EDISON SAULT ELECTRIC COMPANY
XXXXXX'S DIRECTOR'S FEE DEFERRAL PLAN
(DIRDEFPN.ELC) January 1, 1986
EDISON SAULT ELECTRIC COMPANY
XXXXXX DIRECTOR'S FEE DEFERRAL PLAN
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS
A. Purpose 1
B. Definitions 1
ARTICLE II PARTICIPATION AND DEFERRAL AGREEMENTS
A. Purpose 2
B. Eligibility to Participate 2
C. Deferral Agreement 2
D. Amount of Deferral 3
E. Suspension of Participation 3
F. Additional Participation Agreements 3
ARTICLE III BENEFIT AND PAYMENTS
A. Purpose 3
B. Payment of Benefits 4
ARTICLE IV ADMINISTRATION OF PLAN
A. Purpose 5
B. Administrator 5
C. Committee 5
ARTICLE V TERMINATION AND AMENDMENT
A. Purpose 6
B. Amendment 6
C. Termination 6
ARTICLE VI MISCELLANEOUS
A. Purpose 6
B. Creditor Status 6
C. Non-alienation 7
D. Facility of Payment 7
E. Non-Guarantee of Employment 7
F. Cooperation 7
G. Governing Law 7
X. Xxxxxx 7
-(i)-
EDISON SAULT ELECTRIC COMPANY
XXXXXX DIRECTOR'S FEE DEFERRAL PLAN
ARTICLE I
DEFINITIONS
A. PURPOSE.
Throughout this Plan, certain words are used frequently. Whenever a word is
capitalized, it will have the meaning defined in this Article of the Plan unless
the context clearly indicates otherwise.
B. DEFINITIONS.
(1) "Anniversary Date" means January 1 of each Plan Year.
2) "Beneficiary" means the person(s) so designated in writing by the
Participant, or the Participant's lawful spouse in the event that a proper
designation is not made by the Participant. In the event the Participant is not
survived by a lawful Spouse and no other Beneficiary has been designated, the
Participant's estate shall be the Beneficiary.
3) "Board" means the Board of Directors of the Employer.
4) "Committee" means the administrative committee, if any, which may
be appointed by the Employer's Board of Directors to oversee the
administration of the Plan.
5) "Deferral Agreement" means an agreement executed by a Director and
filed with the Committee prior to the beginning of a period for which fees are
to be deferred, pursuant to Article II of the Plan.
6) "Deferred Fee" means the portion of a Director's Fee for any Plan
Year, or part thereof, that has been deferred pursuant to a Deferral Agreement.
7) "Director" means any member of the Board who receives a fee for
service on the Board.
8) "Effective Date" means January 1, 1986.
9) "Employer" means EDISON SAULT ELECTRIC COMPANY, and any
subsidiary or affiliate of Edison Sault Electric Company which has adopted the
Plan with the consent of the Board of Directors of Edison Sault Electric
Company.
10) "Fee" means any compensation paid to a Director for services rendered
to the Employer as a Director.
11) "Normal Retirement Date" means the date the Participant attains his or
her sixty-fifth (65th) birthday, or completes ten (10) years of participation
in the Plan, whichever is later.
1
12) "Participant" means a Director who elects to participate in the Plan
by filing a Deferral Agreement with the Committee on a timely basis.
13) "Plan" means the ESELCO DIRECTOR'S FEE DEFERRAL, PLAN as set forth
herein.
14) "Plan Year" means the twelve (12) month period commencing on January 1
and ending on December 31 of each calendar year.
15) "Policy" means any insurance policy purchased by the Committee from a
legal reserve life insurance company authorized to do business in the State of
Michigan.
16) "Termination of Service" means the termination of the Participant as a
Director of the Employer or any subsidiary or affiliate thereof. Total
Disability shall not be considered a Termination of Service.
17) "Total Disability" means a disability, whether temporary or permanent,
which results from bodily injury, which is not self-inflicted, which prevents a
Participant from engaging in any occupation for compensation or profit and which
has existed continuously for a period of at least six (6) months.
ARTICLE II
PARTICIPATION AND DEFERRAL AGREEMENTS
A. PURPOSE.
This Article describes when a Director becomes eligible to participate in
the Plan and what steps must be taken to actually participate.
B. ELIGIBILITY TO PARTICIPATE.
Any Director of the Employer is eligible to participate in the Plan upon
the execution of a Deferral Agreement and the filing of such Deferral Agreement
with the Committee in accordance with Section C. below.
C. DEFERRAL AGREEMENT.
1) Each eligible Director who wishes to participate in the Plan, must
execute a Deferral Agreement in the form approved by the Committee (a copy of
which is attached to this Plan). Except for the first Plan Year, the Deferral
Agreement must be executed and filed with the Committee by November 30 of the
Plan Year preceding the Plan Year for which the Deferral Agreement is
to be effective.
2) For the first Plan Year commencing on the Effective Date, an eligible
Director who wishes to participate must execute a Deferral Agreement not later
than 30 days after the date of adoption of the Plan by the Board. Any such
Deferral Agreement -- will apply only to Fees which have not yet been earned by
or paid to the Director.
2
3) A Director who first becomes eligible during a Plan Year and who
wishes to participate must execute a Deferral Agreement not later than 30 days
after the date the Committee notifies the Director of eligibility for the Plan.
Any such Deferral Agreement will apply only to Fees for the Plan Year which have
not yet been earned by or paid to the Director.
D. AMOUNT OF DEFERRAL.
1) A Participant may elect to defer a dollar amount equal to all or any
portion of the Fees which are expected to be earned over a six (6) Plan Year
period by the Participant. A Participant will not be permitted to elect a
deferral of Fees which, in total, exceeds six (6) times the highest annual Fee
paid to the Director during the current and next preceding five
(5) Plan Years.
2) The amount of Deferred Fees will be specified in the Deferral
Agreement executed by the Director. A Director will not be permitted to change
the amount of Fees elected to be deferred in any Deferral Agreement.
E. SUSPENSION OF PARTICIPATION.
1) An election by a Participant to enter into a Deferral Agreement will
be irrevocable; provided however, that a Participant may elect to suspend the
deferral of Fees after one (1) or more years of participation. Any such election
must be in writing and filed with the Committee not later than the fifteenth
(15th) day preceding the regular Fee payment on which the suspension is to take
effect.
2) Upon the suspension of participation in the Plan by a Director, the
Committee will arrange to pay the Director a lump sum cash payment equal to the
amount of Deferred Fees under the Plan as of the date of suspension, less any
expenses incurred by the Employer in providing for the Fee deferral for the
Participant. A Participant who has suspended the deferral of Fees will not be
permitted to execute a subsequent Deferral Agreement to take effect prior to the
Anniversary Date next following the expiration of a period of twelve (12) months
from the date of suspension.
F. ADDITIONAL PARTICIPATION AGREEMENTS.
Upon the expiration of the first or any succeeding Deferral Agreement, the
Committee in its sole discretion may permit a Participant to enter into an
additional Deferral Agreement by executing and filing with the Committee such a
Deferral Agreement prior to November 30 of the Plan Year preceding the Plan Year
for which the additional Deferral Agreement is to be effective. Each additional
Deferral Agreement will be subject to all or the requirements of this Article II
and will be treated as a completely separate Deferral Agreement for all purposes
under the Plan.
ARTICLE III
BENEFIT PAYMENTS
A. PURPOSE.
This Article describes the conditions under which benefits will be paid
under the Plan, and
3
the form of benefit payments.
B. PAYMENT OF BENEFITS.
1) NORMAL RETIREMENT:
Upon the Participant's attainment of his or her Normal Retirement Date, the
Committee will take steps to provide for the payment of monthly benefits in
accordance with the provisions of XXXXX. of the Deferral Agreement, with such
payments to continue for a period of one hundred and eighty (180) months, or
until the death of the Participant, if earlier.
2) DEATH
(a) PRIOR TO NORMAL RETIREMENT: In the event of the death of a
Participant, or a terminated Participant whose benefit is being deferred
under Section B.(4)(b) of this Article III, prior to his or her Normal
Retirement Date, the Committee will arrange to commence monthly benefit
payments to the Participant's Beneficiary as of the first day of the month
next following the date of death in an amount specified in ~F. of the
Deferral Agreement, with such payments to continue for a period of one
hundred and eighty (180) months.
(b) AFTER NORMAL RETIREMENT: In the event of the death of a
Participant after his or her Normal Retirement Date and after the
commencement of monthly benefit payments, but prior to the receipt of one
hundred and eighty (180) monthly payments by the Participant, the Committee
will arrange to have monthly benefits continued to the Participant's
Beneficiary in the same amount as the Participant was receiving, with such
monthly benefits to continue until a total of one hundred and eighty (180)
payments have been made to the Participant and the Beneficiary together.
3) TOTAL DISABILITY:
In the event the Participant suffers a Total Disability where the
Participant no longer receives Fees, the Participant will not be required to
continue the deferral of Fees. Such disabled Participant will, however be
eligible to receive full retirement or death benefits to the same extent
as if the Participant had continued to defer Fees in accordance with the
Deferral Agreement until his or her Normal Retirement Date.
4) TERMINATION OF SERVICE:
(a) WITH LESS THAN 6 YEARS OF PARTICIPATION: If a Participant with
less than 6 years of participation in the Plan incurs a Termination of
Service prior to his or her Normal Retirement Date, for reasons other than,
death, Total Disability, or Governmental Service, with or without
cause, voluntarily or involuntarily, and if the Participant's Termination
of Employment was not due to fraudulent or dishonest conduct (as determined
by the Committee), the Committee will arrange to pay the Director a lump
sum cash payment equal to the amount of Fees deferred under the Plan, plus
interest as determined by the Committee, less any expenses incurred by the
Employer in providing for the Fee deferral for the Participant.
(b) WITH 6 OR MORE YEARS OF PARTICIPATION: If a Participant with
6 or more years of participation in the Plan incurs a Termination of
Service prior to his or her Normal Retirement Date, for reasons other than,
death, Total Disability or Governmental Service, with or without cause,
voluntarily or involuntarily, and if the Participant's Termination of
Employment was not due to fraudulent or dishonest conduct (as determined by
4
the Committee), the Committee will arrange to pay the Director at his or
her Normal Retirement Date, the benefit specified in Article III
Section B.(l).
5) GOVERNMENTAL SERVICE: In the event that a Participant becomes a
member of a governmental agency which has regulatory jurisdiction over the
activities of the Employer, the Participant will be deemed to have incurred a
Termination of Service and benefits will be paid in accordance with Section
(4) above.
ARTICLE IV
ADMINISTRATION OF PLAN
A. PURPOSE.
This Article defines the responsibilities of the parties involved in the
administration of the Plan and establishes a claims and appeals procedure to
resolve disputes with Plan Participants.
B. ADMINISTRATOR.
The Employer will be the administrator of the Plan. The Employer may
delegate administrative responsibilities to others by action of its Board of
Directors and with notice to the person or persons to whom the delegation is
made.
C. COMMITTEE.
The Board may, but need not, appoint a Committee of not less than one
member to serve at the pleasure of the Board. Any member of the Committee may
resign upon written notice to the Board and the Board may remove any member of
the Committee for any reason.
1) The Committee will act by a majority of its members by vote at a
meeting, or in writing without a meeting. If the Committee cannot reach a
decision on an issue, a temporary Committee member will be appointed by
unanimous vote of all Committee members to decide the issue. In the event the
Committee fails to agree on the selection of a temporary Committee member, an
arbitrator will be selected by the American Arbitration Association in
accordance with its rules.
2) The Committee may appoint from its members chairman to preside over
meetings and a secretary (who need not be a member) to keep records of meetings
and activities of the Committee. The Committee may also appoint one or more of
its members to execute any document on its behalf.
3) The Committee will have all powers and authority to make rules and
regulations with respect to the Plan and to determine all questions as to
interpretation of the Plan provisions and/or the rights or status of
Participants or Beneficiaries.
4) The Committee will establish a reasonable procedure for the filing of
claims and the appeal by Participants of any decision of the Committee.
5) If a Committee is not appointed by the Board, the duties and
responsibilities of the Committee will be carried out by the Employer.
5
ARTICLE V
TERMINATION AND AMENDMENT
A. PURPOSE.
This Article establishes the circumstances under which the Plan can
be amended or terminated and how benefits will be distributed if the Plan is
terminated.
B. AMENDMENT.
The Board reserves the right to amend the Plan at any time and for any
reason. No amendment will decrease or place further restrictions on a
Participant's accrued benefits at the time of such amendment.
C. TERMINATION.
(1) The Board reserves the right to terminate the Plan or discontinue
recognizing further Fee deferrals any time.
(2) The Plan will be automatically terminated upon the Employer's
legal dissolution, adjudication as bankrupt or insolvent, upon a general
assignment for the benefit of creditors, upon receiver being appointed.
(3) In the event of termination of the Plan, any Participant with six (6)
or more years of participation will receive a benefit at normal Retirement Date
as provided in Article III, Section (4)(b). Any Participant with less than six
(6) years of participation will receive a lump sum cash payment determined in
accordance with Article III, Section (4)(a). Any benefits in pay status at the
time of Plan termination to a retired Participant or Beneficiary will be
continued to such Participant or Beneficiary in accordance with the terms
of the Plan and any Deferral Agreement between the Participant and the Employer.
ARTICLE VI
MISCELLANEOUS
A. PURPOSE.
This Article describes the creditor status of Participants and
Beneficiaries, discusses assignability of benefits, and other miscellaneous
items.
B. CREDITOR STATUS.
Participants and their Beneficiaries will have no legal or equitable
rights, interest or claims in any property or asset of the Employer, nor will
they be beneficiaries of, or have any rights, claims or interests in any
life insurance Policies, annuity contract Policies, or the proceeds therefrom
owned by or which may be acquired by the Employer. Such Policies or other assets
of the Employer will not be held in trust for the benefit of Participants or
their Beneficiaries or held in any way as collateral security for the fulfilling
of the obligations of the Employer under this Plan. Any and all of the
Employer's assets and Policies will be, and remain, the general, unpledged,
unrestricted assets of the Employer. The Employer's obligation under the Plan
will
6
be merely that of an unfunded and unsecured promise of the Employer to pay
money in the future.
C. NON-ALIENATION.
Except as may be required by federal tax withholding rules, benefits
hereunder may not be assigned, alienated, commuted, sold, transferred,
mortgaged, hypothecated, or in any other way encumbered.
D. FACILITY OF PAYMENT.
If any individual entitled to a distribution under the Plan is a minor or
is adjudged mentally incompetent, the Committee may in its discretion make
payments to such individual or to his or her legal representative or to a
relative or friend of the individual for his or her benefit. Any payment of a
benefit under this paragraph will be a complete discharge of any liability for
the making of such payment under the provisions of the Plan.
E. NON-GUARANTEE OF EMPLOYMENT.
Nothing contained in this Plan will be construed to be a contract of
service between the Employer and any Director, or as a guarantee of continued
retention of a Director by the Employer.
F. COOPERATION.
A Participant will cooperate with the Committee by furnishing any and all
information requested by the Committee in order to facilitate benefit
payments, and by taking such physical examinations as the Committee may deem
necessary, and by taking any other action requested by the Committee.
G. GOVERNING LAW.
The Plan shall be construed in accordance with and governed by the laws of
the State of Michigan.
H. MERGER.
The Employer will not merge, consolidate, or combine with any other
business entity unless and until the obligations of
the Employer under the terms of this Plan are provided for adequately.
7
