Supplemental Executive Retirement Plan Agreement Amended and Restated
Exhibit
10.4
Supplemental
Executive Retirement Plan Agreement
Amended
and Restated
THIS
AGREEMENT is entered into as of the 28th day of November, 2008 and
effective as of January 1, 1987, (hereinafter
called the “Effective Date”) by and between NEW JERSEY RESOURCES
CORPORATION, a corporation of New Jersey (hereinafter called the
"Company"), and XXXXXXXX X.
XXXXXX (hereinafter called the “Employee”).
W I T N E S S E T
H
WHEREAS,
the Employee is employed by the Company and is presently CHAIRMAN & CHIEF EXECUTIVE
OFFICER;
WHEREAS,
the Company desires to continue to employ the Employee as a key
employee;
WHEREAS,
the Company previously entered into an Agreement, dated January 1, 1987 (referred to,
with any amendments thereto, as the “Prior Agreement”), with the Employee as a
part of his/her employment agreement or arrangement as an incentive for his/her
continued loyal service to the Company;
WHEREAS,
the Company and the Employee now desire to amend and restate the Prior Agreement
to comply with Section 409A of the Internal Revenue Code and applicable guidance
issued thereunder (“Code Section 409A”);
WHEREAS,
the Company and the Employee desire this Agreement (also referred to as the
“SERP Agreement”) to apply to the Employee’s entire benefit under the Prior
Agreement and no portion of the benefit hereunder is to be “grandfathered” as
such term is used under Code Section 409A.
NOW, THEREFORE, in consideration of the
premises and of the covenants and agreements herein set forth, and for other
good and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto do covenant and agree as follows:
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1.
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It
is agreed that the Company’s normal retirement age is sixty-five (65) and
that the Employee may retire from the Company upon the last day of the
month in which his/her sixty-fifth (65th)
birthday occurs; provided however, that the Employee may remain in active
employment after his/her sixty-fifth (65th)
birthday. In either event, no benefits shall be paid to the
Employee under this Agreement until the later of the Employee’s attainment
of age sixty-five (65), or his Separation from Service (as defined herein
in accordance with Code Section
409A). A Separation from Service shall occur where it is
reasonably anticipated that no further services will be performed after a
particular date or that the level of bona fide services the Employee will
perform after a particular date (whether as an employee or independent
contractor to the Company or an affiliate that is treated as the Company
under Code Section 409A (an “Affiliate”) will decrease permanently to less
than 50% of the average level of bona fide services performed over the
immediately preceding thirty-six (36) month period. An
Employee shall be considered to continue employment and to not have a
Separation from Service while on a leave of absence if the leave does not
exceed six (6) consecutive months (twenty-nine (29) months for a
disability leave of absence) or, if longer, so long as the Employee
retains a right to reemployment with the Corporation or Affiliate under an
applicable statute or by contract. For this purpose, a
“disability leave of absence” is an absence due to any medically
determinable physical or mental impairment that can be expected to result
in death or can be expected to last for a continuous period of not less
than 6 months, where such impairment causes the Employee to be unable to
perform the duties of his job or a substantially similar
job. Continued services solely as a member of the Board of
Directors of the Company or an Affiliate (the “Board”) shall not prevent a
Separation from Service from
occurring.
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2.
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The
Company agrees that upon the Employee’s Separation from Service at or
after attainment of age sixty-five (65) for reasons other than death, it
will pay to the Employee the sum of TWO-HUNDRED FIFTY THOUSAND
DOLLARS ($250,000) (hereinafter referred to as the "SERP Benefit”),
payable in sixty (60) equal monthly installments. The
installments shall be paid upon the first day of each calendar month
commencing with the month next following the date of such Separation from
Service, and shall continue until the aggregate of such payments equal the
SERP Benefit, at which time such monthly installments shall
terminate. In the event that the SERP Benefit has not been
fully paid to the Employee during his/her lifetime following his/her
Separation from Service, the balance of such monthly installments shall be
paid to his/her designated beneficiary as provided in Paragraph 13
hereof. In no event shall any distribution occur earlier than
permitted under Code Section 409A. The SERP Benefit may increase based
upon a change in the Employee’s position. Such increase shall be set forth
on an addendum to this Agreement. Such increase in the SERP Benefit shall
not change the time and form of payment of the SERP Benefit as provided in
this Agreement except as allowed under Code Section
409A.
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3.
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In
the event that the Employee dies while in active employment with the
Company but prior to his or her Separation from Service, and such death is
due to a cause other than suicide, the Company shall pay a Death Benefit
in the amount of TWO-HUNDRED FIFTY THOUSAND
DOLLARS ($250,000) to his/her designated beneficiary, in sixty (60)
equal monthly installments. The installments shall be paid on
the first day of each calendar month commencing with the month following
the date of death, and shall continue until such Death Benefit has been
fully paid. If the Employee commits suicide, the Company shall
not be obligated to pay any portion of the Death Benefit or any increases
in such benefit granted herein or by any amendment or addendum to this
Agreement made within two (2) years next preceding the date of death, but
such portion of the Death Benefit as was granted or accrued under this or
any similar prior SERP agreement with the Company more than two (2) years
before the death by suicide shall be paid in the manner provided
above.
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4.
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No
SERP or other benefits shall be payable hereunder to the Employee, or to
any other person in the event the employment relationship between the
Employee and the Company is terminated within six (6) years from the
Effective Date for any reason other than by death, or by Separation from
Service of the Employee at or after attainment of age sixty-five
(65). In the event that the employment relationship between the
Employee and the Company continues for a period of at least six (6) years
from the Effective Date, and is thereafter terminated for any reason other
than by death prior to the Employee’s attainment of age sixty-five (65),
upon the later of his/her Separation from Service or the Employee’s
attainment of age sixty-five (65), the Company will pay to the Employee
the Cumulative Termination Benefit for the year in which such termination
occurs, as shown in Schedule A which is attached hereto and made a part
hereof (hereinafter referred to as the “Applicable Cumulative Termination
Benefit”), in sixty (60) equal monthly installments payable on the first
day of each calendar month, commencing with the month following the later
of the Employee’s Separation from Service or the Employee’s attainment of
age sixty-five (65). Such Schedule A may be changed from time
to time to reflect changes in the SERP Benefit. Such
substitution of a new Schedule A shall not change the time and form of
payment of the Cumulative Termination Benefit except to the extent allowed
by Code Section 409A.
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5.
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If
the Employee dies after termination of employment as provided in Paragraph
4 above, and before any or all of the applicable Cumulative Termination
Benefit has been paid to him, then such Cumulative Termination Benefit, or
the balance of installments thereof as the case may be, shall be paid to
his/her designated beneficiary in sixty (60) equal monthly installments
(less the number of installments previously paid, if any), payable on the
first day of each calendar month commencing with the month following the
date of death, until the applicable Cumulative Termination Benefit shall
have been paid in full.
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6.
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Notwithstanding
anything to the contrary contained in the original Agreement or in any
amendment or addendum thereto, it is hereby agreed that upon the
occurrence of a Change In Control (as defined herein), the Employee shall
immediately become fully vested in the SERP Benefit set forth in Paragraph
2 of this Agreement, or in the then most recent amendment or addendum
thereto (whichever amount is greater), and that in the event the
Employee’s employment is thereafter terminated for any reason or if the
Employee resigns for any reason within two years of the Change in Control,
said SERP Benefit shall be paid to the Employee in sixty (60) equal
monthly installments payable on the first day of each calendar
month commencing with the month following the date of termination, until
the applicable Cumulative Termination Benefit shall have been paid in
full. In the event that the Employee dies after termination of employment
pursuant to this Paragraph 6, and before any or all of the SERP Benefit
has been paid to him, then such SERP Benefit, or the balance of
installments thereof, as the case may be, shall be paid to his/her
designated beneficiary in sixty (60) equal monthly installments (less the
number of installments previously paid, if any), payable on the first day
of each calendar month commencing with the month following the date of
death, until the applicable Cumulative Termination Benefit shall have been
paid in full.
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7.
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For the purposes of this
Agreement:
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(a)
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a "Change In Control" shall be deemed to have occurred
if:
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(i)
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Any
Person (as defined below) has acquired Voting Securities (as defined
below), of the Company and, immediately thereafter, is the "beneficial
ownership" (within the meaning of Rule 13d-3, as promulgated under Section
13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) of Voting Securities of the Company representing fifty percent
(50%) or more of the combined Voting Power (as defined below)
of the Company's securities; or
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(ii)
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Within
any 12-month period, the persons who were members of the Board of the
Company immediately before the beginning of such period (the
"Incumbent Directors") shall cease (for any reason other than death) to
constitute at least a majority of the Board or the board of directors of
any successor to the Company, provided that any Board member who was not a
Board member at the beginning of such period shall be deemed to be an
Incumbent Director if such director was elected to the Board by, or on the
recommendation of or with the approval of, at least a majority of the
Board members who then qualified as Incumbent Directors either actually or
by prior operation of this Section 7(a)(ii);
or
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(iii)
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the
consummation of a merger, consolidation, share exchange, division, sale or
other disposition of all or substantially all of the assets of the Company
(a "Corporate Event"), except that a Corporate Event shall not trigger a
Change in Control under this clause (iii) if the shareholders of the
Company immediately prior to such Corporate Event shall hold, directly or
indirectly immediately following such Corporate Event a
majority of the Voting Power of (x) in the case
of a merger or consolidation, the surviving or resulting corporation,
(y) in
the case of a share exchange, the acquiring corporation or (z) in the case
of a division or a sale or other disposition of assets, each surviving,
resulting or acquiring corporation.
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(b)
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For
purposes of this Section 7, "Person" shall have the meaning ascribed to
such term in Section 3(a)(9) of the Exchange Act, as supplemented by
Section 13(d)(3) of the Exchange Act; provided, however, that Person shall
not include (i) the Company
or any subsidiary of the Company or (ii) any
employee benefit plan sponsored by the Company or any subsidiary of the
Company.
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(c)
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A
specified percentage of "Voting Power" of a company shall mean such number
of the Voting Securities as shall enable the holders thereof to cast such
percentage of all the votes which could be cast in an annual election of
directors (without consideration of the rights of any class of stock other
than the common stock of the company to elect directors by a separate
class vote); and "Voting Securities" shall mean all securities of a
company entitling the holders thereof to vote in an annual election of
directors (without consideration of the rights of any class of stock other
than the common stock of the company to elect directors by a separate
class vote).
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(d)
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The
above definition of a Change in Control is intended to meet the
requirements of a permissible change in control payment event under Code
Section 409A and shall be interpreted and applied to the Employee in
accordance with Code Section 409A.
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8.
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Any
dispute or controversy arising out of or in connection with the
interpretation or application of the provisions of paragraphs 6 or 7 of
this Agreement shall be settled exclusively by arbitration in accordance
with the rules of the American Arbitration Association then in effect and
the applicable law of the State of New Jersey pertaining to the
arbitration of disputes, and judgment may be entered on the arbitrator’s
award in any court having jurisdiction. All costs and expenses
of such arbitration, including the reasonable counsel fees, costs and
expenses incurred by the Employee in either prosecuting or defending the
arbitration proceeding, shall be borne and paid by the
Company. Any reimbursement of costs or expenses to be paid by
the Company under this paragraph 8 shall be paid no later than the end of
calendar year following the calendar year during which the cost or
expenses are incurred.
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9.
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Notwithstanding
anything else herein to the contrary, payments of benefits hereunder
caused by the Separation from Service (including death) of the Employee
may be delayed for a period of no more than six (6) months following such
Separation from Service, if the Employee is determined by the Board of the
Company or its delegate to meet the definition of a “specified employee”
(as defined under Code Section 409A) but only if such delay in payment is
required in order to comply with the requirements of Code Section
409A. No interest shall accrue or be paid in the event of a
delay in payment.
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10.
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Any
payment otherwise due under the terms of this Agreement which would (a)
not be deductible in whole or in part under Section 162(m) of the Code, or
(b) violate Federal securities laws or other applicable law may not be
made until the earliest date on which such payment no longer is
nondeductible or violates such laws. Payment may be delayed for a
reasonable period in accordance with the provisions of Code Section 409A
(including in the event the payment is not administratively practical due
to events beyond the recipient’s control such as where the recipient is
not competent to receive the benefit payment, there is a dispute as to
amount due or the proper recipient of such benefit payment, or additional
time is needed to calculate the amount payable). No interest shall accrue
or be paid because of any delay of
payment.
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11.
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The
Company may not permit the acceleration of the time or schedule of any
payment or amount scheduled to be paid pursuant to this Agreement, unless
such acceleration of the time or schedule is (a) to comply with conflicts
of interest or ethics laws (as defined in Code Section 409A ), (b) to be
used for the payment of FICA, income taxes on the FICA withholding or
other approved taxes on benefits under this Agreement, (c) is necessary to
pay an amount equal to the amount included in the income of the Employee
under Code Section 409A or (d) as otherwise allowed under Code Section
409A.
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12.
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It
is agreed that neither the Employee nor any other person shall have any
right to commute, bequeath, pledge, sell, assign, transfer, levy upon or
otherwise encumber the rights to receive any payments hereunder, which
payments and the rights thereto are expressly declared to be
non-transferable and non-assignable, and in the event of any attempted
disposition of such payments or rights in violation hereof the Company
shall have no further liability
hereunder.
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13.
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The
Employee shall designate in writing, to be annexed hereto, one or more
beneficiaries to whom the benefits in the event of his/her death shall be
paid pursuant to paragraphs 2, 3, 5 or 6 hereof. In the absence
of such designation, or in the event no designated beneficiary survives
the Employee, then any such benefits shall be payable in like manner to
the Employee’s executor or administrator. In the event of the
death of all designated beneficiaries after commencement but prior to
completion of payment of the installments of benefits, the balance thereof
shall be payable in like manner to the executor or administrator of the
last surviving beneficiary.
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14.
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The
Company shall withhold from any amounts payable under this Agreement such
federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or
regulations.
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15.
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This
Agreement shall be binding upon the parties hereto, and upon the heirs,
executors, administrators, or other personal representatives and
designated beneficiaries of the Employee, and upon the successors and
assigns of the Company.
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16.
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This
Agreement hereby amends and restates the Prior Agreement in its entirety.
During the lifetime of the Employee, this Agreement may be amended or
terminated at any time or times, in whole or in part, by the mutual
written agreement of the Employee and the Company, and only in accordance
with Code Section 409A.
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17.
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The
benefits under this Agreement are designed to comply with the requirements
of Code Section 409A. The Company shall interpret and
administer this Agreement in a manner as to comply with Code Section
409A. Notwithstanding the foregoing, however, the Company shall
not be liable to the Employee or any other person if any benefit under
this Agreement does not comply with Code Section 409A or the Employee or
any other person is otherwise subject to any additional tax or penalty
under Code Section 409A. Each Employee is solely responsible
for the payment of any tax liability (including any taxes and penalties
that may arise under Code Section 409A) that may arise from any benefit
under this Agreement.
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18.
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This
Agreement shall be executed in duplicate, each copy of which when executed
and delivered shall be an original, but both copies shall, together,
constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto
have caused these presents to be duly executed in their respective name and
their respective seals to be hereunto affixed and attested, the day and year
first above written.
NEW
JERSEY RESOURCES CORPORATION
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/s/ Xxxxx X.
Xxxxxxxx
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Date:
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11/26/08
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XXXXX
X. XXXXXXXX
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Senior
Vice President & Chief Financial Officer
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/s/ Xxxxxx X.
Xxxx
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Date:
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11/26/08
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Witness
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/s/
Xxxxxxxx X. Xxxxxx
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Date:
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11/26/08
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XXXXXXXX
X. XXXXXX
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Chairman
& Chief Executive Officer
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/s/ Xxxxxx X.
Xxxx
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Date:
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11/26/08
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Witness
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DESIGNATION
OF BENEFICIARY
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I
hereby designate the following person (or persons) as my beneficiary (or
beneficiaries) to whom the benefits provided hereunder in the event of my
death shall be paid pursuant to this
Agreement:
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PRIMARY
BENEFICIARY(IES):
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Name:
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Address:
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Social
Security #
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Relationship
to Employee:
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Percentage
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SECONDARY
BENEFICIARY(IES)*:
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Name:
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Address:
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Social
Security #
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Relationship
to Employee:
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Percentage
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*In
the event that primary beneficiary(ies) predecease
employee.
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SIGNED:_________________________________
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DATED:_____________________________
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(employee’s
name)
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EFFECTIVE
_____________
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YEAR
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AGE
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SCHEDULE
"A"
CUMULATIVE
TERMINATION
BENEFIT
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1998
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$
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1999
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$
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2000
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$
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2001
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$
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2002
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$
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2003
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2004
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2005
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2006
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2007
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2008
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2009
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2010
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2011
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2012
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2013
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2014
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2015
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2016
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2017
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2018
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2019
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2020
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2021
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