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EXHIBIT 10-22
EXECUTIVE POST-EMPLOYMENT INCOME ARRANGEMENT
BETWEEN
S. XXXXXX XXXXXX
AND
THE DETROIT EDISON COMPANY
Policy and Benefits Development
March 27, 1989
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Executive Post-Employment Income Arrangement Between S. Xxxxxx Xxxxxx and The
Detroit Edison Company.
Purpose
The Executive Post-Employment Income Arrangement is designed to minimize the
adverse consequences of a mid-career change on your retirement income. This
arrangement may provide you with additional retirement income. The amount of
additional income will be determined at the time of your termination from the
Company.
Terminology
1. Average Final Compensation. Equals one-fifth of your normal pay
during the 260 weeks of Company service that results in the
highest average.
2. Company Service. All years of service with the Company calculated
to the nearest month.
3. Credited Service. Years of relevant experience from previous
employers. For purposes of this arrangement, you have 19 years of
credited service.
4. Normal Pay. Your salary for a standard forty-hour work week. It
does not include any bonuses, special pay, or any overtime pay.
5. Other Employer Pension Benefits. The payment that you may receive
from this arrangement is reduced by the amount that you will
receive from all other employer pension plans. A request was made
to you regarding your pension benefits from previous employers.
Your response to the request is included as Attachment A.
According to Attachment A, you have a vested retirement benefit
from the State Employee's Retirement System that provides a
straight life annuity of $931.66 a month or $11,179.90 per year
effective June 1, 2000 and a vested retirement benefit from the
Pension Plan for Employees of New Detroit, Inc. that provides a
life annuity of $561.90 a month or $6,742.80 per year effective
June 1, 2005.
6. Retirement Age Factor. An adjustment for employment termination
prior to age 61 is as follows:
Age Percent
--- -------
61+ 100%
60 93%
59 86%
58 79%
57 72%
56 65%
55 58%
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7. Retirement Allowance Factor. The multiplier that is used in the
basic formula of the Retirement Plan.
8. Retirement Plan. The Employes' Retirement Plan of the Detroit
Edison Company. The Retirement Plan is a defined benefit pension
plan sponsored by Detroit Edison for eligible employes.
9. Total Service. Your Company service plus your credited service.
Eligibility
You are eligible to receive a benefit under this arrangement provided that you
complete 10 years of Company service.
Benefit Calculation
The annual benefit under this arrangement will be determined at the time of
employment termination by computing the following:
Step 1. Annual Base Amount - Multiply total service X retirement allowance
factor X average final compensation X retirement age factor.
Step 2. Other Employer Pension Offset - Determine a yearly value for pension
amounts from other employers. Based on Attachment A, you will receive a pension
benefit from two pension plans. One plan benefit is payable beginning June 1,
2000 and the other is payable beginning June 1, 2005. As such, the amount of the
other employer pension offset will vary depending upon the date of employment
termination and/or the date in which a benefit is payable under this
arrangement. The amount of the other employer pension offset is as follows:
(a) If date of employment termination is prior to June 1, 2000, the
offset amount shall be zero for all payments made prior to June 1,
2000.
(b) If date of employment termination and/or date in which a benefit
is payable under this arrangement is on or after June 1, 2000 and
prior to June 1, 2005, the offset amount shall be $11,179.90 for
all benefits paid under this arrangement during the June 1, 2000
to June 1, 2005 period.
(c) If date of employment termination and/or date in which a benefit
is payable under this arrangement is on or after June 1, 2005, the
offset amount shall be $17,922.70 for all future payments.
Step 3. Retirement Plan Offset - Multiply company service X retirement allowance
factor X average final compensation X retirement age factor.
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Step 4. Calculated Annual Benefit - Subtract other employer pension offset and
retirement plan offset from annual base amount.
The calculated annual benefit determines your annual benefit, if any, from this
arrangement. The computations (Step 1 through Step 4) are determined at the time
of employment termination, or death. The calculated annual benefit when computed
at termination or death, determines all future payments under this arrangement
except for the determination and application of the other employer pension
offset amount as set forth in Step 2 of the benefit calculation procedure. In
the event that the retirement plan offset and the other employer pension offset
when added together are greater than the annual base amount, then, the
arrangement provides you with no additional retirement income.
Payments
Based on the calculated annual benefit, equal monthly payments will be paid to
you following the schedule for payments under the Retirement Plan. The payments
will continue throughout your life.
In the event of your death after your termination from the Company, your
surviving spouse will receive for her life a monthly payment of 40 percent of
the monthly payment that you had been receiving. Such payments are payable only
to your surviving spouse, and upon her death, all payments cease.
In the event of your death while employed by the Company, and provided that you
are immediately eligible for a benefit under this arrangement at the time of
death, your surviving spouse will receive for her life, monthly payments based
on 40 percent of the calculated annual benefit that would have resulted had you
terminated employment at the time of your death. Such payments are payable only
to your surviving spouse, and upon her death, all payments cease.
Non-Secured Promise
Payments resulting from this arrangement will be made by the Company from its
general assets.
Amendment of Arrangement
This arrangement may be amended in whole or in part by written agreement between
The Detroit Edison Company and S. Xxxxxx Xxxxxx.
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Entire Arrangement
The foregoing contains the entire agreement between S. Xxxxxx Xxxxxx and The
Detroit Edison Company relating to post-employment retirement income benefits
and this Arrangement supersedes all prior understandings and arrangements
relating to such benefits.
THE DETROIT EDISON COMPANY
By /s/ Xxxxxx X. XxXxxxxx, Xx.
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Xxxxxx X. XxXxxxxx, Xx.
Chairman of the Board
Employe
By /s/ S. Xxxxxx Xxxxxx
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S. Xxxxxx Xxxxxx
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