Exhibit 10.2

 
INTEGRYS ENERGY GROUP, INC.
 
PENSION RESTORATION AND
 
SUPPLEMENTAL RETIREMENT PLAN
 

 
As Amended and Restated Effective January 1, 2011
 

 
 

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TABLE OF CONTENTS
 
 
 

     Page        ARTICLE I. DEFINITIONS AND CONSTRUCTION  2    Section 1.01.
Definitions.  2    Section 1.02. Construction and Applicable Law.  9      
 ARTICLE II. PAYMENT ELECTIONS  10    Section 2.01. General Rules.  10  
 Section 2.02. Participant Payment Election. 10        ARTICLE III. PENSION
RESTORATION BENEFIT 12     Section 3.01. Eligibility. 12     Section 3.02.
Pension Restoration Benefit Formula. 12     Section 3.03. Distribution of Single
Sum Benefits. 13     Section 3.04. Distribution of 180 Month Period Certain
Installment Benefit. 14     Section 3.05. Distribution of Annuity Benefits. 15 
   Section 3.06. Death Benefits. 18         ARTICLE IV. SUPPLEMENTAL RETIREMENT
BENEFIT 20     Section 4.01. Eligibility. 20     Section 4.02. Final Average
Earnings. 20     Section 4.03. Supplemental Retirement Benefit Formula. 21   
 Section 4.04. Distribution of Single Sum Benefits. 23     Section 4.05.
Distribution of 180 Month Period Certain Installment Benefit. 24     Section
4.06. Distribution of Annuity Benefits. 25     Section 4.07. Death Benefits. 26 
       ARTICLE V. SPECIAL DEFINED CONTRIBUTION CREDITS 28     Section 5.01.
Distribution In Accordance With This Plan. 28     Section 5.02. Distribution of
Single Sum Benefits. 28     Section 5.03. Distribution of 180 Month Period
Certain Installment Benefit. 28     Section 5.04. Distribution of Annuity
Benefits. 29     Section 5.05. Death Benefits. 31         ARTICLE VI. SPECIAL
RULES APPLICABLE IN THE EVENT OF A CHANGE IN CONTROL OF THE COMPANY 33   
 Section 6.01. Definitions 33     Section 6.02. Special Provisions Following
Change in Control. 36     Section 6.03. Maximum Payment Limitation. 39   
 Section 6.04. Resolution of Disputes. 40         ARTICLE VII. GENERAL
PROVISIONS 42     Section 7.01. Administration. 42     Section 7.02. Claims
Procedures. 42 

 
 
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   Section 7.03. Participant Rights Unsecured. 44     Section 7.04. Tax
Withholding. 44     Section 7.05. Amendment or Termination of Plan. 45   
 Section 7.06. Administrative Expenses. 47     Section 7.07. Effect on Other
Employee Benefit Plans. 47     Section 7.08. Successor and Assigns. 48   
 Section 7.09. Additional Section 409A Provisions. 48     Section 7.10. Offset.
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INTEGRYS ENERGY GROUP, INC.
 
PENSION RESTORATION AND
 
SUPPLEMENTAL RETIREMENT PLAN
 

 
The Integrys Energy Group, Inc. Pension Restoration and Supplemental Retirement
Plan (the “Plan”) was originally adopted effective January 1, 2001 as the WPS
Resources Corporation Pension Restoration and Supplemental Retirement Plan.  The
Plan name has been changed to reflect the change in the name of the plan sponsor
from WPS Resources Corporation to Integrys Energy Group, Inc. (“Company”).   The
Plan is intended to promote the best interests of the Company and its
stockholders by attracting and retaining key management employees possessing a
strong interest in the successful operation of the Company and its affiliates
and by encouraging their continued loyalty, service and counsel to the Company
and its affiliates.
 
The Plan is amended and restated effective January 1, 2011, as set forth herein.
 

 

 
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ARTICLE I.  DEFINITIONS AND CONSTRUCTION
 
Section 1.01.  Definitions.  The following terms have the meanings indicated
below unless the context in which the term is used clearly indicates otherwise:
 
(a) Actuarial Equivalent or Actuarially Equivalent:  A benefit of equivalent
actuarial value, determined by assuming payment made or commencing on the
Calculation Date and determined on the basis of the following interest and
mortality assumptions:
 
(1) Pension Restoration Benefit.
 
(A)  
For purposes of converting from a single sum payment to a single life annuity
without survivor benefits (“SLA”), or from a SLA to a single sum payment, the
interest rate and mortality table specified under Part A or C of the Retirement
Plan (whichever is applicable to the Participant) that is determined pursuant to
Code Section 417(e)(3) and that is used under the Retirement Plan for purposes
of converting a SLA into a single sum benefit amount or a single sum benefit
amount into a SLA (the “417(e)(3) Rates”).

 
(B)  
For purposes of converting from a SLA to a one hundred eighty (180) month period
certain installment benefit, a seven percent (7%) interest rate and the 1983
Group Annuity Mortality Table (Unisex).

 
(C)  
For purposes of converting from a SLA to a joint and fifty percent (50%)
surviving Spouse annuity or to any optional form of annuity distribution that is
available to the Participant,  the interest, mortality

 
 
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or other factors that would be used for such purposes if the Pension Restoration
Benefit were being paid under Part A or Part C of the Retirement Plan (whichever
is applicable to the Participant.

 
(2) Supplemental Retirement Benefit.
 
(A)  
For purposes of calculating the offset under Section 4.03(a)(2)(B), the
417(e)(3) Rates.

 
(B)  
For purposes of converting from the one hundred eighty (180) month period
certain installment benefit to a single sum benefit, the interest rate component
of the 417(e)(3) Rates, but with no mortality assumption or adjustment.

 
(C)  
For purposes of converting from the one hundred eighty (180) month period
certain installment benefit to an annuity benefit, or for purposes of the early
commence reduction described in Section 6.02(a)(2)(B), a seven percent (7%)
interest rate and the 1983 Group Annuity Mortality Table (Unisex).

 
(3) Defined Contribution Restoration and SERP Benefit.
 
(A)  
For purposes of converting from a single sum benefit to a SLA, the 417(e)(3)
Rates.

 
(B)  
For purposes of converting from a SLA to another form of annuity payment or to a
one hundred eighty (180) month period certain installment benefit, a seven
percent (7%) interest rate and the 1983 Group Annuity Mortality Table (Unisex).

 
 
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(b) Affiliate:  For all purposes of the Plan other than Article VI, a
corporation, trade or business that, with the Company, constitutes a controlled
group of corporations or a group of trades or businesses under common control
within the meaning of Code Section 414(b) and (c); provided that Code Section
414(b) and (c) shall be applied by substituting “at least fifty percent (50%)”
for “at least eighty percent (80%)” each place it appears therein.
 
(c) Applicable Account Balance:  The Participant’s qualified and non-qualified
plan balances, as of the Calculation Date applicable to the Participant, that
are attributable to Employer Retirement Contributions and Special Defined
Contribution Credits allocated to the Participant with respect to the 2013 –
2017 plan years, in all cases including any actual or deemed investment gains or
losses on such contributions or credits.
 
(d) Beneficiary:  The person or entity designated by a Participant to be his or
her beneficiary for purposes any death benefit that may become payable under
Sections 3.06 or 4.07.  If a Participant designates his or her Spouse as a
beneficiary, such beneficiary designation (to the extent it relates to the
Spouse) shall become null and void on the date the Human Resources Department of
the Company obtains actual written notice of the Participant’s divorce or legal
separation from such Spouse; provided that neither the Plan nor Committee shall
be liable to any Beneficiary for the payments that have been made to such spouse
prior to the date the Committee is notified in writing of such divorce or legal
separation from such spouse.  If a valid designation of beneficiary is not in
effect at the time of the Participant’s death, the estate of the Participant is
deemed to be the sole beneficiary.  If a beneficiary dies while entitled to
receive distributions, any remaining payments shall be paid to the contingent
beneficiary designated by the Participant.  If payments have been made to a
beneficiary or beneficiaries following the Participant’s death and all
beneficiaries and contingent beneficiaries designated by the Participant die
prior to receiving all of the benefits payable on behalf of the Participant, any
remaining payments due in accordance with the terms of the Plan shall be paid to
the estate of the beneficiary or contingent beneficiary who last received
payments under the Plan.  If all beneficiaries and contingent beneficiaries
designated by the Participant die prior to receiving any payments from the Plan,
any benefits payable on behalf of the Participant shall be paid to the estate of
the Participant.  Beneficiary designations shall be in writing, filed with the
Committee, and in such form as the Committee may prescribe for this purpose.
 
 
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(e) Board:  The Board of Directors of the Company.
 
(f) Calculation Date:  The first day of the month following the month in which
occurs the Participant’s Separation from Service.
 
(g) Cause:  Termination by the Company or an Affiliate of a Participant’s
employment in connection with or following a Change in Control of the Company
shall be limited to the following:
 
(i)  
the engaging by the Participant in intentional conduct not taken in good faith
which has caused demonstrable and serious financial injury to the Company and/or
an Affiliate, as evidenced by a determination in a binding and final judgment,
order or decree of a court or administrative agency of competent jurisdiction,
in effect after exhaustion or lapse of all rights of appeal, in an action, suit
or proceeding, whether civil, criminal, administrative or investigative;

 
(ii)  
conviction of a felony (as evidenced by binding and final judgment, order or
decree of a court of competent jurisdiction, in effect after exhaustion of all
rights of appeal) which substantially impairs the Participant’s ability to
perform his or her duties or responsibilities;

 
(iii)  
continuing willful and unreasonable refusal by the Participant to perform the
Participant’s duties or responsibilities (unless significantly changed without
the Participant’s consent); or

 
(iv)  
material violation of the Company’s Code of Conduct.

 
(h) Code:  The Internal Revenue Code of 1986, as interpreted by regulations and
rulings issued pursuant thereto, all as amended and in effect from time to
time.  Any reference to a specific provision of the Code shall be deemed to
include a reference to any successor provision thereto.
 
(i) Committee:  The Compensation Committee of the Board.
 
 
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(j) Company:  Integrys Energy Group, Inc., or any successor corporation.
 
(k) Credited Service:  A Participant’s credited service for benefit accrual
purposes that (1) with respect to periods prior to January 1, 2013, is
recognized under the Retirement Plan for purposes of calculating the amount of
the Participant’s benefit under that plan, and (2) with respect to periods after
December 31, 2012 and before January 1, 2018, would have been recognized under
the Retirement Plan if the Retirement Plan had continued to recognize benefit
accrual service.  Employment after December 31, 2017 will not be recognized as
Credited Service for purposes of this Plan.
 
(l) Employee:  A common law employee of the Company or an Affiliate who is a
management or highly compensated employee, as those terms are defined for
purposes of the “top-hat” rules of ERISA.
 
(m) Employer Retirement Contributions:  The non-elective contributions that are
made by the Company or an Affiliate to a qualified defined contribution plan and
that are not contingent upon the Participant having made contributions to such
plan.
 
(n) ERISA:  The Employee Retirement Income Security Act of 1974, as interpreted
by regulations and rulings issued pursuant thereto, all as amended and in effect
from time to time.  Any reference to a specific provision of ERISA shall be
deemed to include a reference to any successor provision thereto.
 
(o) Participant:  An Employee who has been designated by the Committee as being
eligible to participate in the Integrys Energy Group, Inc. Nonqualified Deferred
Compensation Plan (or any successor plan thereto); provided (i) that the Pension
Restoration Benefit Component of the Plan is limited to those Participants who
are covered under the Retirement Plan, (ii) except as otherwise provided by the
Committee, an Employee of Integrys Energy Services, Inc. (or a subsidiary
thereof) who is employed in a non-officer position, even though designated for
participation in the Integrys Energy Group, Inc. Deferred Compensation Plan,
shall not be eligible for the Pension Restoration Benefit Component of the Plan
if the Employee is covered under an employment contract or agreement that
excludes the Employee from receiving pension restoration, supplemental
retirement or similar restoration benefits or credits,
 
 
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or the Employee is covered under an employment contract or agreement that
references the Employee’s eligibility for deferred compensation generally but
that does not specifically provide for the Participant as being eligible for
pension restoration, supplemental retirement or similar restoration benefits or
credits, and (iii) the Supplemental Retirement Benefit component of the Plan is
limited to those Employees who were designated for participation for that
component prior to April 1, 2008.  Effective April 1, 2008, no additional
Employees will become Participants in the Supplemental Retirement Benefit
component of the Plan.
 
(p) Payment Date:  The last business day of the seventh month following the
month in which the Participant’s Separation from Service occurs.  This is the
date on which payment of a Participant’s vested benefit is made (if paid as a
single sum) or commences (if paid in installments or as a monthly annuity).  All
benefits are paid on the last business day of the month.
 
(q) Pension Restoration Benefit:  The benefit described in Article III.
 
(r) Plan:  The Integrys Energy Group, Inc. Pension Restoration and Supplemental
Retirement Plan, as from time to time amended and in effect.
 
(s) Regular Monthly Payment:  A Participant’s normal monthly installment or
annuity payment amount determined as of the Calculation Date in accordance with
the terms of the Plan, without regard to the Retroactive Benefit Payment or
interest on the Retroactive Benefit Payment.
 
(t) Retirement Plan:  Part A or C (whichever is applicable to the Participant)
of the Integrys Energy Group Retirement Plan, or any successor thereto.
 
(u) Retroactive Benefit Payment: The sum of the Regular Monthly Payments that
would have been made, if monthly benefit payments had commenced with a payment
on the last day of the month in which occurs the Calculation Date, during the
period beginning with the month in which occurs the Calculation Date and ending
with the month preceding the month in which occurs the Payment Date.
 
 
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(v) Separation from Service:  A Participant’s Separation from Service occurs
when the Company (and its Affiliates) and the Participant reasonably anticipate
that no further services (either as an employee or as an independent contractor)
will be performed by the Participant for the Company (or an Affiliate) after a
certain date, or that the level of bona fide services the Participant will
perform for the Company (or the Affiliate) after such date (either as an
employee or as an independent contractor) will permanently decrease to no more
than twenty percent (20%) of the average level of bona fide services performed
by the Participant (whether as an employee or independent contractor) for the
Company or an Affiliate over the immediately preceding thirty-six (36) month
period (or such lesser period of actual services).  A Participant is not
considered to have incurred a Separation from Service if the Participant is
absent from active employment due to military leave, sick leave or other bona
fide leave of absence and if the period of such leave does not exceed the
greater of (i) six (6) months, or (ii) the period during which the Participant’s
right to reemployment by the Company or an Affiliate is provided either by
statute or by contract; provided that if the leave of absence is due to a
medically determinable physical or mental impairment that can be expected to
result in death or last for a continuous period of not less than six (6) months,
where such impairment causes the Participant to be unable to perform the duties
of his or her position of employment or any substantially similar position of
employment, the leave may be extended for up to twenty-nine (29) months without
causing a Separation from Service.
 
(w) Special Defined Contribution Credits:  The defined contribution restoration
and/or supplemental retirement credits made to a Participant’s account under a
non-qualified deferred compensation plan with respect to the 2013-2017 plan
years, that represent (1) amounts that would have been contributed as Employer
Retirement Contributions on the Participant’s behalf to a qualified defined
contribution plan were it not for the limitations of Code Section 401(a)(17) and
415, or (2) other supplemental retirement credits that are not contingent upon
the Participant having deferred compensation under such plan.
 
(x) Spouse:  A person of the opposite sex to whom the Participant is legally
married.
 
(y) Supplemental Retirement Benefit:  The benefit described in Article IV.
 
 
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(z) Trust:  The Integrys Energy Group, Inc. Deferred Compensation Trust, which
was formerly known as the WPS Resources Corporation Deferred Compensation
Trust,  or other funding vehicle which may from time to time be established, as
amended and in effect from time to time.
 
Section 1.02.   Construction and Applicable Law.
 
(a) Wherever any words are used in the masculine, they shall be construed as
though they were used in the feminine in all cases where they would so apply;
and wherever any words are use in the singular or the plural, they shall be
construed as though they were used in the plural or the singular, as the case
may be, in all cases where they would so apply.  Titles of articles and sections
are for general information only, and the Plan is not to be construed by
reference to such items.
 
(b) This Plan is intended to be a plan of deferred compensation maintained for a
select group of management or highly compensated employees as that term is used
in ERISA, and shall be interpreted so as to comply with the applicable
requirements thereof.  In all other respects, the Plan is to be construed and
its validity determined according to the laws of the State of Illinois, without
regard to the principle of conflict of laws, to the extent such laws are not
preempted by federal law.  Any action for benefits under the Plan or to enforce
the terms of the Plan shall be heard in the State of Illinois by the court with
jurisdiction over the claim.  In case any provision of the Plan is held illegal
or invalid for any reason, the illegality or invalidity will not affect the
remaining parts of the Plan, but the Plan shall, to the extent possible, be
construed and enforced as if the illegal or invalid provision had never been
inserted.
 

 
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ARTICLE II.   PAYMENT ELECTIONS
 
Section 2.01.   General Rules.
 
(a) Participant Payment Elections.  A Participant’s vested benefits are
distributed based upon the Participant’s payment election (or deemed payment
election).
 
(b) Coordinated Distribution of Pension Restoration Benefit, Supplemental
Retirement Benefit and Certain Deferred Compensation Benefits.  With respect to
any Participant who has been designated for participation in both the Pension
Restoration Benefit and the Supplemental Retirement Benefit components of the
Plan, the Participant makes a single benefit payment election (or deemed
election) that governs the form and time of distribution of (1) the Pension
Restoration Benefit, (2) the Supplemental Retirement Benefit, and (3) the
portion of the Participant’s Applicable Account Balance that is attributable to
Special Defined Contribution Credits.  The Participant is not able to make
separate elections with respect to each of these benefits.
 
Section 2.02.   Participant Payment Election.
 
(a) Payment Election as to Form of Payment.  Each Participant who became a
Participant prior to January 1, 2009 and whose participation is limited to the
Pension Restoration Benefit Component of the Plan shall make a payment election
whether to receive his or her vested Pension Restoration Benefit either as (i) a
single sum cash payment, or (ii) an annuity distribution.  Each Participant who
became a Participant prior to January 1, 2009 and who participates in both the
Pension Restoration Benefit and the Supplemental Retirement Benefit components
of the Plan shall make a single payment election whether to receive his or her
vested benefits either as (i) a single sum cash payment, (ii) a one hundred
eighty (180) month period certain installment payment, or (ii) an annuity
distribution.  The Participant’s single payment election will govern the
distribution of the Participant’s vested Pension Restoration Benefit, the
Participant’s vested Supplemental Retirement Benefit, and if the Participant has
received Special Defined Contribution Credits, the portion of the Participant’s
vested Applicable Account Balance that is attributable to Special Defined
Contribution Credits.  A Participant who becomes a
 
 
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Participant after December 31, 2008 shall be deemed to have elected a single sum
distribution, and such a Participant may not otherwise make a payment election.
 
(b) Annuity Distribution.  A Participant who has elected (or is deemed to have
elected) the annuity payment option is not required to elect the specific form
of annuity at the time of making the payment election, so long as the available
forms of annuity distribution are actuarially equivalent for purposes of Code
Section 409A.  If the available forms of annuity distribution are actuarially
equivalent for purposes of Code Section 409A, the Participant may choose the
specific form of monthly annuity at any time prior to the Calculation Date, in
accordance with rules prescribed by the Committee.  Additional rules regarding
annuity benefit distribution are set forth in Sections 3.05 and 4.06.
 
(c) Date of Payment Election.  In the case of an Employee who becomes a
Participant prior to January 1, 2009, the payment election must be made on or
before December 31, 2008.  The election on file (or deemed to be on file) for
such Participant at December 31, 2008 will be the Participant’s payment
election.  All payment elections must be made in such form and in accordance
with such rules prescribed by the Committee or its delegate.
 
(d) Default Payment Election.  If a Participant fails to make such a payment
election within the prescribed period, the Participant will be deemed to have
elected to receive a single sum  distribution; provided that in the case of a
Participant who participates in both the Pension Restoration Benefit and the
Supplemental Retirement Benefit components of the Plan, the Participant’s
benefit election on file at December 31, 2008, even if originally made only with
respect to the Pension Restoration Benefit, shall be deemed to be the
Participant’s payment election both with respect to the Pension Restoration
Benefit and the Supplemental Retirement Benefit (and if the Participant has
received Special Defined Contribution Credits, the portion of the Participant’s
vested Applicable Account Balance that is attributable to Special Defined
Contribution Credits).
 
(e) Irrevocability of Payment Election.  A Participant’s payment election (or
deemed payment election) is irrevocable.
 

 
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ARTICLE III.   PENSION RESTORATION BENEFIT
 
Section 3.01.   Eligibility.
 
An Employee is eligible for the Pension Restoration Benefit if:
 
(a) The Committee has designated the Employee for participation in the Pension
Restoration Benefit component of the Plan and the Employee, in accordance with
Section 1.01(o), has become a Participant in the Pension Restoration Benefit
component of the Plan; and
 
(b) The Participant is covered under and has a vested entitlement to a
retirement benefit from the Retirement Plan.
 
Section 3.02.   Pension Restoration Benefit Formula.
 
The Pension Restoration Benefit accrued by an eligible Participant is determined
as of the Calculation Date and, when expressed in the form of a life annuity
without survivor benefits commencing with a payment for the month in which
occurs the Calculation Date, is equal to the difference between (a) and (b)
below:
 
(a) The monthly retirement benefit that would be payable to the Participant
under the Retirement Plan if the benefit were determined by applying all of the
terms and conditions of the Retirement Plan, except for the following
modifications or assumptions:
 
(1) The benefit is paid in the form of a life annuity without survivor benefits,
regardless of the form of benefit actually elected by the Participant under the
Retirement Plan;
 
(2) The benefit is paid commencing with a payment for the month in which occurs
the Calculation Date, regardless of the Participant’s actual date of benefit
commencement under the Retirement Plan and regardless of the Payment Date
applicable to the Participant under this Plan;
 
 
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(3) The benefit is calculated as if base salary and annual bonus (but not
long-term bonus) amounts deferred by the Participant under the Integrys Energy
Group, Inc. Deferred Compensation Plan had been paid to the Participant as
current compensation in the year of the deferral;
 
(4) The benefit is calculated as if the compensation limitation of Section
401(a)(17) of the Code and the maximum benefit limitation of Section 415 of the
Code did not apply.
 
(b) The monthly retirement benefit that would be payable to the Participant
under the Retirement Plan if the benefit were determined in accordance with the
modifications or assumptions described in Section 3.02(a)(1) and (2) above, but
otherwise applying all of the terms and conditions of the Retirement Plan.  For
this purpose, the Participant’s benefit under the Retirement Plan shall be
determined by attributing to the Participant any portion of the Retirement Plan
benefit that is assigned to an alternate payee pursuant to a domestic relations
order.
 
Section 3.03.   Distribution of Single Sum Benefits.
 
If the Participant’s Pension Restoration Benefit is payable in a single sum,
distribution will be made in accordance with the following rules:
 
(a) Time of Payment.  The single sum payment will be calculated as of the
Calculation Date but paid on the Payment Date.
 
(b) Amount of Single Sum Benefit.  The single sum cash payment shall be equal to
the sum of (1) an amount that, as of the Calculation Date, is Actuarially
Equivalent to the Participant’s Pension Restoration Benefit as calculated under
Section 3.02 above.  For a married Participant, the single sum benefit does not
include the value of any surviving Spouse benefit that would be paid if the
Participant had instead elected an annuity benefit, i.e., the single sum benefit
is Actuarially Equivalent to the single life annuity with no survivor
benefits.  The payment to be made on the Payment Date will equal the sum of (1)
the single sum amount determined, as of the Calculation Date, in accordance with
the preceding sentence, and (2)
 
 
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interest on the single sum amount from the last day of the month in which occurs
the Calculation Date through the Payment Date. Interest under clause (2) above,
for the period through the last day of the month in which occurs the six (6)
month anniversary of the Participant’s Separation from Service, shall be
determined at the 417(e)(3) Rate (first segment rate) in effect under the
Retirement Plan for the calendar year in which occurs the Calculation Date.
 
(c) Death Prior to Payment Date.  This Section 3.03 applies only if the
Participant is alive on the Payment Date.  If the Participant dies prior to the
Payment Date, the benefits (if any) payable following the Participant’s death
shall be determined in accordance with Section 3.06.
 
Section 3.04.   Distribution of 180 Month Period Certain Installment Benefit.
 
If the Participant’s Pension Restoration Benefit is payable as a one hundred
eighty (180) month period certain installment benefit (in accordance with
Section 2.02, only certain Participants are eligible for this form of payment),
distribution will be made in accordance with the following rules:
 
(a) Time of Payment.  The one hundred eighty (180) month period certain
installment benefit will be calculated as of the Calculation Date but paid
beginning on the Payment Date.
 
(b) Amount of Each Installment.  The amount of each monthly installment shall be
determined by converting the Participant’s Pension Restoration Benefit as
calculated under Section 3.02 above into an Actuarially Equivalent one hundred
eighty (180) month period certain installment benefit.  For a married
Participant, the one hundred eighty (180) month period certain installment
benefit does not include the value of any surviving Spouse benefit that would be
paid if the Participant had instead elected an annuity benefit, i.e., the one
hundred eighty (180) month period certain installment benefit is Actuarially
Equivalent to the single life annuity with no survivor benefits.  The payment
made on the Payment Date will include (1) the Regular Monthly Payment for the
month in which occurs the Payment Date, (2) the Retroactive Benefit Payment, and
(3) interest on each monthly installment that constitutes part of the
Retroactive Benefit Payment for the period from the date on which such
installment would have been paid had monthly payments commenced with a payment
on the last day of the month that includes the Calculation Date through the
Payment Date.  Following the payment on the Payment Date,
 
 
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payments to the eligible Participant in an amount equal to the Regular Monthly
Payment shall continue until a total of one hundred eighty (180) monthly
payments have been made; provided that for purposes of determining whether a
total of one hundred eighty (180) monthly payments have been made, the payment
made on the Payment Date will be treated as consisting of seven (7)
payments.  Interest under clause (3) above, for the period through the last day
of the month in which occurs the six (6) month anniversary of the Participant’s
Separation from Service, shall be determined at the 417(e)(3) Rate  (first
segment rate) in effect under  the Retirement Plan for the calendar year in
which occurs the Calculation Date.  For example, if the Participant incurs a
Separation from Service on December 31, 2009, the Calculation Date is January 1,
2010, the first payment would have been made on January 31, 2010 if payment had
commenced with a payment for the month that includes the Calculation Date, and
the Payment Date will be July 31, 2010.  Interest on each monthly installment
that constitutes part of the Retroactive Benefit Payment for the period from the
date on which the monthly installment otherwise would have been paid through the
Payment Date will be credited at the 2010 417(e)(3) Rate (first segment rate) in
effect under the Retirement Plan.
 
(c) Death Prior to Payment Date.  This Section 3.04 applies only if the
Participant is alive on the Payment Date.  If the Participant dies prior to the
Payment Date, the benefits (if any) payable following the Participant’s death
shall be determined in accordance with Section 3.06.
 
Section 3.05.   Distribution of Annuity Benefits.
 
If the Participant’s Pension Restoration Benefit is payable as an annuity,
distribution will be made in accordance with the following rules:
 
(a) Normal Form of Distribution.  If the Participant has elected (or is deemed
to have elected) an annuity form of distribution, then payment for an unmarried
Participant will be made in accordance with subsection (a)(1) below, and payment
for a married Participant, unless the Participant has validly elected payment in
an alternate form of annuity payment in accordance with subsection (b) below,
will be made in accordance with subsection (a)(2) below:
 
(1) Unmarried Participant.  If the Participant is not married on the Calculation
Date, distribution will be in the form of
 
 
15

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a monthly single life annuity in the amount determined under
Section 3.02.  Monthly payments will commence on the Payment Date applicable to
the Participant and will continue until and including a payment for the month in
which occurs the Participant’s death.
 
(2) Married Participant.  If the Participant is married on the Calculation Date,
distribution will be in the form of a joint and fifty percent (50%) survivor
annuity with the Participant’s Spouse as of the Calculation Date as the sole
contingent annuitant.  Monthly payments under the joint and fifty percent (50%)
survivor annuity will commence on the Payment Date applicable to the Participant
and will continue until and including a payment for the month in which occurs
the Participant’s death.  If the Participant predeceases the Spouse to whom he
or she was married on the Calculation Date, fifty percent (50%) of the Regular
Monthly Payment Amount applicable to the Participant during his or her lifetime
shall continue during the remaining lifetime of such Spouse.  The Regular
Monthly Payment Amount payable to the Participant during his or her lifetime
will be the amount determined under Section 3.02 reduced, in order to reflect
the cost of the survivor benefit, in the same manner as the benefit would be
reduced under Part A or Part C of the Retirement Plan (whichever is applicable
to the Participant) if the benefit were being paid under the Retirement Plan.
 
(b) Alternate Forms of Annuity Distribution.  In lieu of the normal form of
payment applicable under subsection (a) above, a Participant who participates in
Part A of the Retirement Plan, who is married on the Calculation Date, and who
has in effect an election of the annuity payment method, may elect, in
accordance with such conditions as may be established by the Committee, to
receive payment in an alternate form of annuity that would be available to the
Participant under Part A of the Retirement Plan if the Pension Restoration
Benefit were being
 
 
16

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paid under Part A of the Retirement Plan rather than under this Plan.  In lieu
of the normal form of payment applicable under subsection (a) above, a
Participant who participates in Part C of the Retirement Plan and who has in
effect an election of the annuity payment method, may elect, in accordance with
such conditions as may be established by the Committee, to receive payment in an
alternate form of annuity that would be available to the Participant under Part
C of the Retirement Plan if the Pension Restoration Benefit were being paid
under Part C of the Retirement Plan rather than under this Plan. The alternate
form of annuity distribution shall be calculated by converting the monthly
benefit amount determined under Section 3.02 into a payment in such alternate
annuity form, with the conversion accomplished by using the adjustment factors
that would be used under the Retirement Plan for purposes of converting from the
normal form of benefit to an alternate form of annuity if the Pension
Restoration Benefit were being paid under Part A of Part C of the Retirement
Plan, whichever is applicable to the Participant.  If the Participant elects
payment in an alternate form of annuity that provides surviving Spouse benefits
following the Participant’s death, the surviving Spouse benefits will be paid to
the Spouse to whom the Participant is married on the Calculation Date.  The
Participant’s election of an alternate form of annuity must be made prior to the
Calculation Date, and becomes irrevocable on the Calculation Date; provided that
if the Participant is covered under Part A of the Retirement Plan and is not
married on the Calculation Date, any prior election of payment in an alternate
form of annuity shall be null and void.
 
(c) Regular Monthly Payments and the Retroactive Benefit Payment. The payment
made on the Payment Date will include (1) the Regular Monthly Payment for the
month in which occurs the Payment Date, (2) the Retroactive Benefit Payment, and
(3) interest on each monthly installment that constitutes part of the
Retroactive Benefit Payment for the period from the date on which such
installment would have been paid had monthly payments commenced with a payment
on the last day of the month that includes the Calculation Date through the
Payment Date.  Each subsequent monthly payment to the Participant will be an
amount equal to the Regular Monthly Payment.  Interest under clause (3) above,
for the period through the last day of the month in which occurs the six (6)
month anniversary of the Participant’s Separation from Service, shall be
determined at the 417(e)(3) Rate (first segment rate) in effect under the
Retirement Plan for the calendar year in which occurs the Calculation Date.
 
 
17

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(d) Death Prior to Payment Date.  This Section 3.05 applies only if the
Participant is alive on the Payment Date.  If the Participant dies prior to the
Payment Date, the benefits (if any) payable following the Participant’s death
shall be determined in accordance with Section 3.06.
 
Section 3.06.   Death Benefits.
 
The form and time of benefit distribution is irrevocably established at the
earlier to occur of (1) the Payment Date (which, in accordance with Section
1.409A-3(b) of the Income Tax Regulations, is an objectively determinable and
nondiscretionary date that is based upon the Participant’s Separation from
Service and that is fixed at the time of the Participant’s Separation from
Service), and (2) the date of the Participant’s death.
 
(a) Death Prior to Payment Date.  If a Participant who is eligible for a Pension
Restoration Benefit dies prior to the Payment Date (including a Participant who
is eligible for a Pension Restoration Benefit who dies during employment), the
Participant’s Beneficiary will receive a single sum payment equal to the single
sum payment to which the Participant would have been entitled to as of the
Calculation Date if the Participant had in effect a single sum payment election
under Article II (regardless of the election actually made by the Participant),
together with interest, at the 417(e)(3) Rate (first segment rate) from the last
day of the month in which occurs the Calculation Date through the last day of
the month preceding the month in which payment to the Beneficiary is made.
 
(b) Death on or After the Payment Date.
 
(1) Death After Commencement of Installment Payments.  If the Participant’s
benefit is being distributed as a one hundred eighty (180) month period certain
installment benefit and the Participant dies on or after the Payment Date, i.e.,
on or after the date on which installment distributions to the Participant have
begun, but prior to the date on which one hundred eighty (180) payments have
been made, monthly installment distributions to the Beneficiary (at the same
time as payments to the Participant would have been made) shall continue until
the total number of monthly
 
 
18

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installments paid to the Beneficiary, when aggregated with the number of monthly
installments paid to the Participant prior to his or her death, equals one
hundred eighty (180).
 
(2) Death After Commencement of Annuity Payments.  If the Participant’s benefit
is being distributed as an annuity and the Participant dies on or after the
Payment Date, i.e., on or after the date on which payment of Plan benefits has
actually begun, the only benefits payable following the Participant’s death
shall be those (if any) payable under the form of annuity distribution in which
the Participant’s benefit was being paid.  Thus, for example, if the Participant
was receiving payments in the form of a single life annuity, no further benefits
are payable following the Participant’s death.  Similarly, if the Participant
was receiving benefits in the form of a joint and fifty percent (50%) surviving
Spouse annuity, the only benefits payable following the Participant’s death
shall be those payable pursuant to the fifty percent (50%) survivor feature of
the annuity benefit, to the Spouse (if still living) to whom the Participant was
married on the Calculation Date.  There is no guarantee that the total amount of
benefits received by the Participant (and if applicable, the Participant’s
surviving Spouse) under an annuity form of distribution will be at least equal
to the amount that would have been paid to the Participant if the Participant
had elected distribution in a single sum or in installments.
 

 
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ARTICLE IV.  SUPPLEMENTAL RETIREMENT BENEFIT
 
Section 4.01.   Eligibility.  Except as provided in Section 6.02(c), an Employee
is eligible for the Supplemental Retirement Benefit if:
 
(a) The Committee, prior to April 1, 2008, has designated the Employee for
participation in the Supplemental Retirement Benefit component of the Plan, and
the Employee, in accordance with Section 1.01(n), has become a Participant in
the Supplemental Retirement Benefit component of the Plan; and
 
(b) Except as provided in Section 4.07 with respect to a Participant whose
Separation from Service is caused by the Participant’s death, the Participant’s
Separation from Service occurs after the Participant has attained fifty-five
(55) years of age and after the Participant has completed at least ten (10)
years of Credited Service.
 
Section 4.02.   Final Average Earnings.
 
(a) For purposes of calculating a Participant’s Supplemental Retirement Benefit,
“Final Average Earnings” means one thirty-sixth (1/36th) of the base salary and
annual (but not long-term) bonus, determined prior to reduction for
contributions made at the Participant’s election to a plan or arrangement under
Section 125 or 401(k) of the Code and prior to reduction for elective deferral
contributions under the Integrys Energy Group, Inc. Deferred Compensation Plan,
paid to the Participant by the Company or a participating Affiliate during
whichever of the following periods produces the higher average:
 
(1) The month during which occurs the Participant’s Separation from Service and
the immediately preceding thirty-five (35) months; or
 
(2) the three calendar years preceding the calendar year in which occurs the
Participant’s Separation from Service.
 
(b) Notwithstanding subsection (a), the Committee, in its sole discretion, may
adjust a Participant’s Final Average Earnings if the Committee determines that
such action is necessary
 
 
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or desirable in order to effectuate the intent of this Plan, including, without
limitation, an adjustment to exclude one or more annual bonus payments from the
calculation of the Participant’s Final Average Earnings where application of the
foregoing definition would result in the Participant receiving credit for more
than three annual bonus awards in the calculation of Final Average Earnings as a
result of differences in the timing of payments of such awards.
 
(c) Notwithstanding subsections (a) and (b), for any Participant who continues
to be employed by the Company or a participating Affiliate on and after December
31, 2017, the Participant’s Final Average Earnings will be determined as of
December 31, 2017 as if the Participant had incurred a Separation from Service
on that date.  Salary, bonus or other compensation paid to the Participant after
December 31, 2017 will not be recognized.
 
Section 4.03.   Supplemental Retirement Benefit Formula.
 
(a) Participants With 15 or More Years of Credited Service.  The Supplemental
Retirement Benefit for a Participant who satisfies the eligibility requirements
of Section 4.01 and who has fifteen (15) or more years of Credited Service as of
the date of Separation from Service is determined as of the Calculation Date
and, when expressed in the form of a one hundred eighty (180) month period
certain installment benefit, is equal to the difference between (1) and (2)
below:
 
(1) Sixty percent (60%) of the Participant’s Final Average Earnings, minus
 
(2) The sum of (A) and (B):
 
(A)  
The monthly aggregate annuity benefit (not including any temporary Pension
Supplement) that the Participant is or would be entitled to receive under the
Retirement Plan and the Pension Restoration Benefit component of this Plan if
such benefits were paid, commencing with a payment for the month in which occurs
the Calculation Date, in the form of a single life annuity without survivor

 
 
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benefits, i.e., the Participant’s actual benefit election, and the form in which
and time at which those benefits under those plans are actually payable, shall
be disregarded.  For purposes of this paragraph (A), the monthly aggregate
annuity benefit that the Participant is or would be entitled to receive under
the Retirement Plan and the Pension Benefit Restoration component of this Plan
shall be determined by attributing to the Participant any portion of the benefit
that is assigned to an alternate payee pursuant to a domestic relations order;
and

 
(B)  
The monthly annuity benefit that could be purchased if the Participant’s
Applicable Account Balance is converted into an Actuarially Equivalent single
life annuity, without survivor benefits, commencing with a payment for the month
in which occurs the Calculation Date.  For purposes of this paragraph (B), the
monthly annuity benefit that could be purchased with the Participant’s
Applicable Account Balance shall be determined by attributing to the Participant
any portion of the Applicable Account Balance that is assigned to an alternate
payee pursuant to a domestic relations order.

 
(b) Participants With 10 But Less Than 15 Years of Credited Service.  The
Supplemental Retirement Benefit of a Participant who satisfies the eligibility
requirements of Section 4.01 and who has at least ten (10) but less than fifteen
(15) years of Credited Service shall be determined in accordance with subsection
(a) above, with the exception that the benefit percentage used in subsection
(a)(1) above shall be reduced from sixty percent (60%) to the percentage
determined in accordance with the following schedule:
 
 
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Full Years of Credited Service
Applicable Benefit Percentage
14
13
12
11
10
56%
52%
48%
44%
40%

 
(c) Reduction for Early Commencement.  If the Calculation Date applicable to the
Participant’s Supplemental Retirement Benefit is prior to the Participant’s
attainment of age sixty-two (62), the monthly benefit as calculated under this
Section 4.03 shall be reduced by one quarter of one percent (0.25%) for each
month by which the Calculation Date precedes the month in which the Participant
will attain sixty-two (62) years of age.
 
Section 4.04.   Distribution of Single Sum Benefits.
 
If the Participant’s Supplemental Retirement Benefit is payable in a single sum,
distribution will be made in accordance with the following rules:
 
(a) Time of Payment.  The single sum payment will be calculated as of the
Calculation Date but paid on the Payment Date.
 
(b) Amount of Single Sum Benefit.  The single sum cash payment shall be equal to
the sum of (1) an amount that, as of the Calculation Date, is Actuarially
Equivalent to the Participant’s one hundred eighty (180) month period certain
installment Supplemental Retirement Benefit as calculated under Section 4.03
above.  The payment to be made on the Payment Date will equal the sum of (1) the
single sum amount determined, as of the Calculation Date, in accordance with the
preceding sentence, and (2) interest on the single sum amount from the last day
of the month in which occurs the Calculation Date through the Payment
Date. Interest under clause (2) above, for the period through the last day of
the month in which occurs the six (6) month anniversary of the Participant’s
Separation from Service, shall be determined at
 
 
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the 417(e)(3) Rate (first segment rate) in effect under the Retirement Plan for
the calendar year in which occurs the Calculation Date.
 
(c) Death Prior to Payment Date.  This Section 4.04 applies only if the
Participant is alive on the Payment Date.  If the Participant dies prior to the
Payment Date, the benefits (if any) payable following the Participant’s death
shall be determined in accordance with Section 4.07.
 
Section 4.05.   Distribution of 180 Month Period Certain Installment Benefit.
 
If the Participant’s Supplemental Retirement Benefit is payable as a one hundred
eighty (180) month period certain installment benefit, distribution will be made
in accordance with the following rules:
 
(a) Time of Payment.  The one hundred eighty (180) month period certain
installment benefit will be calculated as of the Calculation Date but paid
beginning on the Payment Date.
 
(b) Amount of Each Installment.  The amount of each monthly installment shall be
the amount determined under Section 4.03 above.  The payment made on the Payment
Date will include (1) the Regular Monthly Payment for the month in which occurs
the Payment Date, (2) the Retroactive Benefit Payment, and (3) interest on each
monthly installment that constitutes part of the Retroactive Benefit Payment for
the period from the date on which such installment would have been paid had
monthly payments commenced with a payment on the last day of the month that
includes the Calculation Date through the Payment Date.  Following the payment
on the Payment Date, payments to the eligible Participant in an amount equal to
the Regular Monthly Payment shall continue until a total of one hundred eighty
(180) monthly payments have been made; provided that for purposes of determining
whether a total of one hundred eighty (180) monthly payments have been made, the
payment made on the Payment Date will be treated as consisting of seven (7)
payments.  Interest under clause (3) above, for the period through the last day
of the month in which occurs the six (6) month anniversary of the Participant’s
Separation from Service, shall be determined at the 417(e)(3) Rate (first
segment rate) in effect under the Retirement Plan for the calendar year in which
occurs the Calculation Date.
 
 
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(c) Death Prior to Payment Date.  This Section 4.05 applies only if the
Participant is alive on the Payment Date.  If the Participant dies prior to the
Payment Date, the benefits (if any) payable following the Participant’s death
shall be determined in accordance with Section 4.07.
 
Section 4.06.   Distribution of Annuity Benefits.
 
If the Participant’s Supplemental Retirement Benefit is payable as an annuity,
distribution will be made in accordance with the following rules:
 
(a) Calculation of Monthly Annuity Amount.  The amount of the monthly annuity
benefit is determined, as of the Calculation Date, by converting the one hundred
eighty (180) month period certain installment benefit under Section 4.03 into an
Actuarially Equivalent annuity benefit in the form of annuity applicable to the
Participant (the same form of annuity in which the Participant’s Pension
Restoration Benefit will be distributed).  If the Participant is married and
receiving payment in the form of a joint and survivor annuity, the Supplemental
Retirement Plan survivor benefit is not actuarially subsidized, even though the
Participant may receive an actuarial subsidy with respect to the Pension
Restoration Benefit survivor benefit.
 
(b) Regular Monthly Payments and the Retroactive Benefit Payment. The payment
made on the Payment Date will include (1) the Regular Monthly Payment for the
month in which occurs the Payment Date, (2) the Retroactive Benefit Payment, and
(3) interest on each monthly installment that constitutes part of the
Retroactive Benefit Payment for the period from the date on which such
installment would have been paid had monthly payments commenced with a payment
on the last day of the month that includes the Calculation Date through the
Payment Date.  Each subsequent monthly payment to the Participant will be an
amount equal to the Regular Monthly Payment.  Interest under clause (3) above,
for the period through the last day of the month in which occurs the six (6)
month anniversary of the Participant’s Separation from Service, shall be
determined at the 417(e)(3) Rate (first segment rate) in effect under  the
Retirement Plan for the calendar year in which occurs the Calculation Date.
 
(c) Death Prior to Payment Date.  This Section 4.06 applies only if the
Participant is alive on the Payment Date.  If the Participant dies prior to the
Payment Date, the benefits (if any) payable following the Participant’s death
shall be determined in accordance with Section 4.07.
 
 
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Section 4.07.   Death Benefits.
 
The form and time of benefit distribution is irrevocably established at the
earlier to occur of (1) the Payment Date (which, in accordance with Section
1.409A-3(b) of the Income Tax Regulations, is an objectively determinable and
nondiscretionary date that is based upon the Participant’s Separation from
Service and that is fixed at the time of the Participant’s Separation from
Service), and (2) the date of the Participant’s death.
 
(a) Death Prior to Payment Date.  If a Participant who has been designated for
participation in the Supplemental Retirement Benefit component of the Plan dies
prior to the Payment Date (including a Participant who dies during employment)
but after having completed ten (10) or more years of Credited Service, the
Participant’s Beneficiary will receive a single sum payment equal to the single
sum payment to which the Participant would have been entitled to as of the
Calculation Date if the Participant had in effect a single sum payment election
under Article II (regardless of the election actually made by the Participant),
together with interest, at the 417(e)(3) Rate (first segment rate), from the
last day of the month in which occurs the Calculation Date through the last day
of the month preceding the month in which payment to the Beneficiary is
made.  If a Participant who has been designated for participation in the
Supplemental Retirement Benefit component of the Plan dies prior to the Payment
Date (including a Participant who dies during employment) and prior to
completing ten (10) or more years of Credited Service, no benefit is payable.
 
(b) Death on or After the Payment Date.
 
(1) Death After Commencement of Installment Payments.  If the Participant’s
benefit is being distributed as a one hundred eighty (180) month period certain
installment benefit and the Participant dies on or after the Payment Date, i.e.,
on or after the date on which installment distributions to the Participant have
begun, but prior to the date on which one hundred eighty (180) payments have
been made, monthly installment distributions to the Beneficiary (at the same
time as payments to the Participant would have been made) shall continue until
the total number of monthly
 
 
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installments paid to the Beneficiary, when aggregated with the number of monthly
installments paid to the Participant prior to his or her death, equals one
hundred eighty (180).
 
(2) Death After Commencement of Annuity Payments.  If the Participant’s benefit
is being distributed as an annuity and the Participant dies on or after the
Payment Date, i.e., on or after the date on which payment of Plan benefits has
actually begun, the only benefits payable following the Participant’s death
shall be those (if any) payable under the form of annuity distribution in which
the Participant’s benefit was being paid.  Thus, for example, if the Participant
was receiving payments in the form of a single life annuity, no further benefits
are payable following the Participant’s death.  Similarly, if the Participant
was receiving benefits in the form of a joint and fifty percent (50%) surviving
Spouse annuity, the only benefits payable following the Participant’s death
shall be those payable pursuant to the fifty percent (50%) survivor feature of
the annuity benefit, to the Spouse (if still living) to whom the Participant was
married on the Calculation Date.  There is no guarantee that the total amount of
benefits received by the Participant (and if applicable, the Participant’s
surviving Spouse) under an annuity form of distribution will be at least equal
to the amount that would have been paid to the Participant if the Participant
had elected distribution in a single sum or installments.
 

 
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ARTICLE V.   SPECIAL DEFINED CONTRIBUTION CREDITS
 
Section 5.01.   Distribution In Accordance With This Plan.
 
If a Participant has a vested benefit attributable to Special Defined
Contribution Credits, that benefit will be distributed in accordance with the
terms of this Plan and the Participant’s payment election (or deemed payment
election) under this Plan, even though the Special Defined Contribution Credits
are, for record-keeping purposes, credited under the Integrys Energy Group, Inc.
Deferred Compensation Plan.
 
Section 5.02.   Distribution of Single Sum Benefits.
 
If the Participant’s vested account balance that is attributable to Special
Defined Contribution Credits is payable in a single sum, distribution will be
made in accordance with the following rules:
 
(a) Time of Payment.  The single sum payment will be calculated as of the
Calculation Date but paid on the Payment Date.
 
(b) Amount of Single Sum Benefit.  The single sum cash payment shall be equal to
the Participant’s vested account balance under the Integrys Energy Group, Inc.
Deferred Compensation Plan that is attributable to Special Defined Contribution
Credits.
 
(c) Death Prior to Payment Date.  This Section 5.02 applies only if the
Participant is alive on the Payment Date.  If the Participant dies prior to the
Payment Date, the benefits (if any) payable following the Participant’s death
shall be determined in accordance with Section 5.05.
 
Section 5.03.   Distribution of 180 Month Period Certain Installment Benefit.
 
If the Participant’s vested account balance that is attributable to Special
Defined Contribution Credits is payable as a one hundred eighty (180) month
period certain installment benefit, distribution will be made in accordance with
the following rules:
 
(a) Time of Payment.  The one hundred eighty (180) month period certain
installment benefit will be calculated as of the Calculation Date but paid
beginning on the Payment Date.
 
 
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(b) Amount of Each Installment.  The amount of the monthly annuity benefit is
determined, as of the Calculation Date, by converting the Participant’s vested
account balance, as of the Calculation Date, under the Integrys Energy Group,
Inc. Deferred Compensation Plan that is attributable to Special Defined
Contribution Credits, into an Actuarially Equivalent one hundred eighty (180)
month period certain installment benefit.  The actuarial conversion shall be
accomplished by first converting the Participant’s vested account balance into a
single life annuity without survivor benefits, and then converting the single
life annuity into a one hundred eighty (180) month period certain installment
benefit.  The payment made on the Payment Date will include (1) the Regular
Monthly Payment for the month in which occurs the Payment Date, (2) the
Retroactive Benefit Payment, and (3) interest on each monthly installment that
constitutes part of the Retroactive Benefit Payment for the period from the date
on which such installment would have been paid had monthly payments commenced
with a payment on the last day of the month that includes the Calculation Date
through the Payment Date.  Following the payment on the Payment Date, payments
to the eligible Participant in an amount equal to the Regular Monthly Payment
shall continue until a total of one hundred eighty (180) monthly payments have
been made; provided that for purposes of determining whether a total of one
hundred eighty (180) monthly payments have been made, the payment made on the
Payment Date will be treated as consisting of seven (7) payments.  Interest
under clause (3) above, for the period through the last day of the month in
which occurs the six (6) month anniversary of the Participant’s Separation from
Service, shall be determined at the 417(e)(3) Rate (first segment rate) in
effect under the Retirement Plan for the calendar year in which occurs the
Calculation Date.
 
(c) Death Prior to Payment Date.  This Section 5.03 applies only if the
Participant is alive on the Payment Date.  If the Participant dies prior to the
Payment Date, the benefits (if any) payable following the Participant’s death
shall be determined in accordance with Section 5.05.
 
Section 5.04.   Distribution of Annuity Benefits.
 
If the Participant’s vested account balance that is attributable to Special
Defined Contribution Credits is payable as an annuity, distribution will be made
in accordance with the following rules:
 
 
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(a) Calculation of Monthly Annuity Amount.  The amount of the monthly annuity
benefit is determined, as of the Calculation Date, by converting the
Participant’s vested account balance, as of the Calculation Date, under the
Integrys Energy Group, Inc. Deferred Compensation Plan that is attributable to
Special Defined Contribution Credits into an Actuarially Equivalent annuity
benefit in the form of annuity applicable to the Participant (the same form of
annuity in which the Participant’s Pension Restoration Benefit will be
distributed).  The actuarial conversion shall be accomplished by first
converting the Participant’s vested account balance into a single life annuity
without survivor benefits, and then, if the Participant’s benefit is being paid
in a form of annuity other than a single life annuity without survivor benefits,
converting the single life annuity into such other form of annuity in which the
Participant’s benefit will be paid.  If the Participant is married and receiving
payment in the form of a joint and survivor annuity, the Supplemental Retirement
Plan survivor benefit is not actuarially subsidized, even though the Participant
may receive an actuarial subsidy with respect to the Pension Restoration Benefit
survivor benefit.
 
(b) Regular Monthly Payments and the Retroactive Benefit Payment. The payment
made on the Payment Date will include (1) the Regular Monthly Payment for the
month in which occurs the Payment Date, (2) the Retroactive Benefit Payment, and
(3) interest on each monthly installment that constitutes part of the
Retroactive Benefit Payment for the period from the date on which such
installment would have been paid had monthly payments commenced with a payment
on the last day of the month that includes the Calculation Date through the
Payment Date.  Each subsequent monthly payment to the Participant will be an
amount equal to the Regular Monthly Payment.  Interest under clause (3) above,
for the period through the last day of the month in which occurs the six (6)
month anniversary of the Participant’s Separation from Service, shall be
determined at the 417(e)(3) Rate (first segment rate) in effect under the
Retirement Plan for the calendar year in which occurs the Calculation Date.
 
(c) Death Prior to Payment Date.  This Section 5.04 applies only if the
Participant is alive on the Payment Date.  If the Participant dies prior to the
Payment Date, the benefits (if any) payable following the Participant’s death
shall be determined in accordance with Section 5.05.
 
 
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Section 5.05.   Death Benefits.
 
The form and time of benefit distribution is irrevocably established at the
earlier to occur of (1) the Payment Date (which, in accordance with Section
1.409A-3(b) of the Income Tax Regulations, is an objectively determinable and
nondiscretionary date that is based upon the Participant’s Separation from
Service and that is fixed at the time of the Participant’s Separation from
Service), and (2) the date of the Participant’s death.
 
(a) Death Prior to Payment Date.  If a Participant who has a vested benefit
attributable to Special Defined Contribution Credits dies prior to the Payment
Date (including a Participant who is eligible for such benefits and who dies
during employment), the Participant’s Beneficiary will receive a single sum
payment equal to the single sum payment to which the Participant would have been
entitled to if the Participant had in effect a single sum payment election under
Article II (regardless of the election actually made by the Participant).
 
(b) Death on or After the Payment Date.
 
(1) Death After Commencement of Installment Payments.  If the Participant’s
benefit is being distributed as a one hundred eighty (180) month period certain
installment benefit and the Participant dies on or after the Payment Date, i.e.,
on or after the date on which installment distributions to the Participant have
begun, but prior to the date on which one hundred eighty (180) payments have
been made, monthly installment distributions to the Beneficiary (at the same
time as payments to the Participant would have been made) shall continue until
the total number of monthly installments paid to the Beneficiary, when
aggregated with the number of monthly installments paid to the Participant prior
to his or her death, equals one hundred eighty (180).
 
(2) Death After Commencement of Annuity Payments.  If the Participant’s benefit
is being distributed as an annuity and the Participant dies on or after the
Payment Date, i.e., on or after
 
 
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the date on which payment of Plan benefits has actually begun, the only benefits
payable following the Participant’s death shall be those (if any) payable under
the form of annuity distribution in which the Participant’s benefit was being
paid.  Thus, for example, if the Participant was receiving payments in the form
of a single life annuity, no further benefits are payable following the
Participant’s death.  Similarly, if the Participant was receiving benefits in
the form of a joint and fifty percent (50%) surviving Spouse annuity, the only
benefits payable following the Participant’s death shall be those payable
pursuant to the fifty percent (50%) survivor feature of the annuity benefit, to
the Spouse (if still living) to whom the Participant was married on the
Calculation Date.  There is no guarantee that the total amount of benefits
received by the Participant (and if applicable, the Participant’s surviving
Spouse) under an annuity form of distribution will be at least equal to the
amount that would have been paid to the Participant if the Participant had
elected distribution in a single sum or in installments.
 

 
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ARTICLE VI.   SPECIAL RULES APPLICABLE IN THE EVENT OF A CHANGE IN CONTROL OF
THE COMPANY
 
Section 6.01.   Definitions.  For purposes of this Article VI, the following
terms shall have the following respective meanings:
 
(a) The “Act” means the Securities Exchange Act of 1934, as amended.
 
(b) An “Affiliate” of, or a person “affiliated” with, a specified person is a
person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the person
specified and the term “Associate” used to indicate a relationship with any
person, means (1) any corporation or organization (other than the registrant or
a majority-owned subsidiary of the registrant) of which such person is an
officer or partner or is, directly or indirectly, the beneficial owner of 10
percent or more of any class of equity securities, (2) any trust or other estate
in which such person has a substantial beneficial interest or as to which such
person serves as trustee or in a similar fiduciary capacity, and (3) any
relative or Spouse of such person, or any relative of such Spouse, who has the
same home as such person or who is a director or officer of the registrant or
any of its parents or subsidiaries.
 
(c) A person shall be deemed to be the “Beneficial Owner” of any securities:
 
(1) which such Person or any of such Person’s Affiliates or Associates has the
right to acquire (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement, or understanding,
or upon the exercise of conversion rights, exchange rights, warrants or options,
or otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, (A) securities tendered pursuant to
a tender or exchange offer made by or on behalf of such Person or any of such
Person’s Affiliates or Associates until such tendered securities are accepted
for purchase or (B) securities issuable upon exercise of any rights agreement
 
 
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that the Company may have in effect at any time before the issuance of such
securities.
 
(2) which such Person or any of such Person’s Affiliates or Associates, directly
or indirectly, has the right to vote or dispose of or has “beneficial ownership”
of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations
under the Act, including pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security under this
subparagraph (2) as a result of an agreement, arrangement or understanding to
vote such security if the agreement, arrangement or understanding:  (A) arises
solely from a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations under the Act and (B) is not also then
reportable on a Schedule 13D under the Act (or any comparable or successor
report); or
 
(3) which are beneficially owned, directly or indirectly, by any other Person
with which such Person or any of such Person’s Affiliates or Associates has any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in Section 6.01(c)(2)
above) or disposing of any voting securities of the Company.
 
(d) A “Change in Control of the Company” shall be deemed to have occurred if:
 
(1) any Person (other than any employee benefit plan of the Company or any
subsidiary of the Company, any Person organized, appointed or established
pursuant to the terms of any such benefit plan or any trustee, administrator or
fiduciary of such
 
 
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a plan) is or becomes the Beneficial Owner of securities of the Company
representing at least 30% of the combined voting power of the Company’s then
outstanding securities;
 
(2) one-half or more of the members of the Board are not Continuing Directors;
 
(3) there shall be consummated any merger, consolidation, or reorganization of
the Company with any other corporation as a result of which less than 50% of the
outstanding voting securities of the surviving or resulting entity are owned by
the former shareholders of the Company other than a shareholder who is an
Affiliate or Associate of any party to such consolidation or merger;
 
(4) there shall be consummated any merger of the Company or share exchange
involving the Company in which the Company is not the continuing or surviving
corporation other than a merger of the Company in which each of the holders of
the Company’s Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger;
 
(5) there shall be consummated any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all, or substantially
all, of the assets of the Company to a Person which is not a wholly owned
subsidiary of the Company; or
 
(6) the shareholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company.
 
(e) “Continuing Directors” means (1) any member of the Board of Directors of the
Company who was a member of such Board on the effective date of this amendment
and
 
 
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restatement, (2) any successor of a Continuing Director who is recommended to
succeed a Continuing Director by a majority of the Continuing Directors then on
such Board, and (3) additional directors elected or recommended for membership
by a majority of the Continuing Directors then on such Board.
 
(f) “Person” means any individual, firm, partnership, corporation or other
entity, including any successor (by merger or otherwise) of such entity, or a
group of any of the foregoing acting in concert; provided that in the case of a
merger, consolidation or reorganization of the Company with any other
corporation or a share exchange involving the Company, the shareholder of the
other corporation that is a party to the merger, consolidation, reorganization
or share exchange shall not be considered to be acting in concert for purposes
of applying subsection (d)(1).
 
Section 6.02.   Special Provisions Following Change in Control.
 
Upon and following the occurrence of a Change in Control of the Company, the
provisions of this Section 6.02 shall be operative, notwithstanding any
provision of the Plan to the contrary.
 
(a) A Participant who (1) has been designated as being eligible to participate
in the Supplemental Retirement Benefit component of the Plan, but (2) the
Participant’s employment with the Company and its Affiliates is involuntarily
terminated for other than Cause (or, in the case of a Participant who has in
effect an employment, retention, change in control, severance or similar
agreement with the Company or any Affiliate that provides for “good reason”
termination and the Participant, in accordance with such agreement, terminates
employment or service for “good reason”) within two years following the date of
the Change in Control by the Company prior to becoming eligible for a
Supplemental Retirement Benefit under Article IV, shall nevertheless be entitled
to a Supplemental Retirement Benefit if (1) the Participant has a vested benefit
entitlement under the Retirement Plan, and (2) the Participant has completed
five (5) or more years of Credited Service as of the date of his or her
Separation from Service.
 
(1) If the Participant has attained age fifty-five (55) as of the date of his or
her Separation from Service, the benefit shall
 
 
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be calculated and paid as described in Articles II and IV, with the exception
that with respect to any Participant who has completed at least five (5) but
fewer than ten (10) years of Credited Service, the applicable benefit percentage
for purposes of Section 4.03(a)(1) shall be determined in accordance with the
schedule set forth in subparagraph (3) below.
 
(2) If the Participant has not attained age fifty-five (55) as of the date of
his or her Separation from Service, the benefit shall be calculated and paid as
described in Articles II and IV, with the exception that:
 
(A)  
With respect to any Participant who has completed at least five (5) but fewer
than ten (10) years of Credited Service, the applicable benefit percentage for
purposes of Section 4.03(a)(1) shall be determined in accordance with the
schedule set forth in subparagraph (3) below;

 
(B)  
In addition to the early commencement reduction specified in Section 4.03(c)
that applies between the ages of fifty-five (55) and sixty-two (62), the benefit
calculated under Section 4.03 shall be further reduced to an Actuarially
Equivalent amount to reflect benefit commencement prior to the Participant’s
attainment of age fifty-five (55).  This is the benefit amount if the benefit is
paid in the form of a one hundred eighty (180) month period certain installment
benefit; and

 
(C)  
If the benefit is paid other than as a one hundred eighty (180) month period
certain installment benefit, the benefit shall be further adjusted to

 
 
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convert the one hundred eighty (180) month period certain installment benefit
into an Actuarial Equivalent benefit is the form of distribution applicable to
the Participant under Article II.

 
(3) If the Participant has completed at least five (5) but less than ten (10)
years of Credited Service as of the date of his or her termination of
employment, the applicable benefit percentage for purposes of Section 4.03(a)(1)
shall be determined in accordance with the following schedule:
 
Full Years of Credited Service
Applicable Benefit Percentage
9
8
7
6
5
36%
32%
28%
24%
20%

 
(4) For purposes of applying Section 4.07, the reference to “ten (10) years of
Credited Service” shall be replaced with the phrase “five (5) years of Credited
Service” each place it appears.
 
(b) The Board may at any time amend the Plan consistent with Section 6.05 to
modify the terms and conditions applicable to (or otherwise eliminate) benefits
that would otherwise accrue on or after the Amendment Date.
 
(c) Prior to the occurrence of a Change in Control, the Board may exercise its
authority under Section 7.05 to amend or terminate the Plan.  This may include,
without limitation, the passage of a resolution that terminates the Plan,
regardless of whether such resolution is adopted in anticipation of a Change in
Control.  On or after the date on which a Change in Control,  any amendment to
the Plan or action to terminate the Plan that is not
 
 
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described in subsection (b) above shall be effective only with the written
consent of the Participant (or in the case of a deceased Participant, the
Participant’s Beneficiary).
 
(d) The term “Amendment Date” means the date on which an amendment to the Plan
is validly adopted or the date on which the amendment is or purports to be
effective, whichever is later.
 
Section 6.03.   Maximum Payment Limitation.
 
(a) Except as provided in subsection (b) below, if any portion of the payments
or benefits described in this Plan or under any other agreement with or plan of
the Company or its Affiliates (in the aggregate, “Total Payments”), would
constitute an “excess parachute payment” that is subject to the tax imposed by
Section 4999 of the Code, then the Total Payments to be made to the Participant
shall be reduced such that the value of the aggregate Total Payments that the
Participant is entitled to receive shall be one dollar ($1) less than the
maximum amount which the Participant may receive without becoming subject to the
tax imposed by Section 4999 of the Code.  The terms “excess parachute payment”
and “parachute payment” shall have the meanings assigned to them in Section 280G
of the Code, and such “parachute payments” shall be valued as provided
therein.  Present value shall be calculated in accordance with Section
280G(d)(4) of the Code.  Within forty (40) days following delivery of notice by
the Company to the Participant of its belief that there is a payment or benefit
due the Participant which will result in an excess parachute payment as defined
in Section 280G of the Code, the Participant and the Company, at the Company’s
expense, shall obtain the opinion (which need not be unqualified) of nationally
recognized tax counsel selected by the Company’s independent auditors and
acceptable to the Participant in the Participant’s sole discretion (which may be
regular outside counsel to the Company), which opinion sets forth (A) the amount
of the base period income, (B) the amount and present value of Total Payments
and (C) the amount and present value of any excess parachute payments determined
without regard to the limitations of this Section.  As used in this Section, the
term “base period income” means an amount equal to the Participant’s “annualized
includible compensation for the base period” as defined in Section 280G(d)(1) of
the Code.  For purposes of such opinion, the value of any noncash benefits or
any deferred payment or benefit shall be determined by the Company’s independent
auditors in accordance with the
 
 
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principles of Sections 280G(d)(3) and (4) of the Code, which determination shall
be evidenced in a certificate of such auditors addressed to the Company and the
Participant.  Such opinion shall be addressed to the Company and
the  Participant and shall be binding upon the Company and the Participant.  If
such opinion determines that there would be an excess parachute payment, the
payments hereunder that are includible in Total Payments or any other payment or
benefit determined by such counsel to be includible in Total Payments shall be
reduced or eliminated so that there will be no excess parachute payment.  Such
reduction will be achieved by reducing or eliminating payments or benefits in
the manner that produces the highest economic value to the Participant; provided
that in the event it is determined that the foregoing methodology for reduction
would violate Section 409A of the Code, the reduction shall be made pro rata
among the benefits and/or payments (on the basis of the relative present value
of the parachute payments).  If such legal counsel so requests in connection
with the opinion required by this Section, the Participant and the Company shall
obtain, at the Company’s expense, and the legal counsel may rely on in providing
the opinion, the advice of a firm of recognized executive compensation
consultants as to the reasonableness of any item of compensation to be received
by the Participant.  If the provisions of Sections 280G and 4999 of the Code are
repealed without succession, then this Section shall be of no further force or
effect.
 
(b) The provisions of subsection (a) above shall not apply to a Participant
whose employment is governed by an employment contract that provides for Total
Payments in excess of the limitation described in subsection (a) above.
 
Section 6.04.   Resolution of Disputes.
 
If, after a Change in Control, (1) a dispute arises with respect to the
enforcement of the Participant’s rights under the Plan, or (2) any legal
proceeding shall be brought to enforce or interpret any provision contained in
the Plan or to recover damages for breach of the Plan, in either case so long as
the Participant is not acting in bad faith or otherwise pursuing a course of
action that a reasonable person would determine to be frivolous, the Participant
shall recover from the Company any reasonable attorneys’ fees and necessary
costs and disbursements incurred as a result of such dispute or legal proceeding
(“Expenses”), and prejudgment interest on any money judgment obtained by the
Participant calculated at the rate of interest announced
 
 
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by US Bank Milwaukee, Milwaukee, Wisconsin (or any successor thereto), from time
to time as its prime or base lending rate from the date that payments to the
Participant should have been made under this Plan.  Within ten (10) days after
the Participant’s written request therefore and reasonable substantiation that
such expenses have been incurred (but in no event later than the end of the
calendar year following the calendar year in which such Expense is incurred),
the Company shall pay to the Participant, or such other person or entity as the
Participant may designate in writing to the Company, the Participant’s
Expenses.  The reimbursement shall be made even though a final disposition or
conclusion of the dispute or legal proceeding has not been entered.  In the case
of a deceased Participant, this Section shall apply with respect to the
Participant’s Beneficiary or estate.
 

 
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ARTICLE VII.   GENERAL PROVISIONS
 
 
Section 7.01.   Administration.  The Committee shall administer and interpret
the Plan and supervise preparation of Participant elections, forms, and any
amendments thereto.  If at any time the Committee shall not be in existence,
then all determinations affecting Participants who are subject to Section 16 of
the Securities Exchange Act of 1934 shall be made by the full Board, and all
determinations affecting other Participants shall be made by the full Board or
an officer appointed by the Board.  The Committee may, in its discretion,
delegate any or all of its authority and responsibility.  To the extent of any
such delegation, any references herein to the Committee shall be deemed
references to such delegee. Interpretation of the Plan shall be within the sole
discretion of the Committee and shall be final and binding upon each Participant
and Beneficiary.  The Committee may adopt and modify rules and regulations
relating to the Plan as it deems necessary or advisable for the administration
of the Plan.  If any delegee of the Committee shall also be an eligible
Participant or Beneficiary, any determinations affecting the delegee’s
participation in the Plan shall be made by the Committee.  The Plan shall be
interpreted to comply with the requirements of Section 409A of the Code with
respect to any benefit that is subject to the requirements of such Section of
the Code.
 
Section 7.02.   Claims Procedures.
 
(a) If a Participant, Spouse or Beneficiary (the “claimant”) believes that he is
entitled to a benefit under the Plan that is not provided, the claimant or his
or her legal representative shall file a written claim for such benefit with the
Committee no later than ninety (90) days after the first payment is made (or
should have been made) in accordance with the terms of the Plan or under
Regulations issued by the Secretary of the Treasury under Code Section 409A.  If
the Committee denies the claim, it shall deliver to the claimant, within one
hundred thirty-five (135) days of the date the first payment to the Participant
was made (or should have been made) in accordance with the terms of the Plan or
under Regulations issued by the Secretary of the Treasury under Code Section
409A, a written notice to the claimant of such denial.  The written notice shall
include the specific reason(s) for the denial; reference to specific Plan
provisions upon which the denial is based; a description of any additional
material or information necessary for the claimant to perfect the claim and an
explanation of why such material or information is
 
 
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necessary; and a description of the Plan’s review procedures (as set forth in
subsection (b)) and the time limits applicable to such procedures, including a
statement of the claimant’s right to bring a civil action under section 502(a)
of ERISA following an adverse determination upon review.
 
(b) The claimant has the right to appeal the Committee’s decision by filing a
written appeal with the Committee.  Notice of the appeal must be received by the
Committee no later than one hundred eighty (180) days after the first payment is
made (or should have been made) in accordance with the terms of the Plan or
under Regulations issued by the Secretary of the Treasury under Code Section
409A.  The claimant will have the opportunity, upon request and free of charge,
to have reasonable access to and copies of all documents, records and other
information relevant to the claimant’s appeal.  The claimant may submit written
comments, documents, records and other information relating to his or her claim
with the appeal.  The Committee will review all comments, documents, records and
other information submitted by the claimant relating to the claim, regardless of
whether such information was submitted or considered in the initial claim
determination.  The Committee shall make a determination on the appeal within
sixty (60) days after receiving the claimant’s written appeal; provided that the
Committee may determine that an additional sixty (60)-day extension is necessary
due to circumstances beyond the Committee’s control, in which event the
Committee shall notify the claimant prior to the end of the initial period that
an extension is needed, the reason therefore and the date by which the Committee
expects to render a decision. If the claimant’s appeal is denied in whole or
part, the Committee shall provide written notice to the claimant of such
denial.  The written notice shall include the specific reason(s) for the denial;
reference to specific Plan provisions upon which the denial is based; a
statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of all documents, records, and other
information relevant to the claimant’s claim; and a statement of the claimant’s
right to bring a civil action under section 502(a) of ERISA.
 
(c) Notwithstanding anything in the Plan to the contrary, and as a condition of
participating in the Plan, a Participant agrees, on behalf of the Participant
and all persons or entities that may claim through the Participant, that (1) any
claim for benefits or other legal action or legal proceeding concerning the Plan
may be brought more than one (1) year after the
 
 
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later of (A) the last date on which the act or omission giving rise to the
claim, legal action or other legal proceeding occurred, or (B) the date the
individual or entity bringing such claim, legal action or other legal proceeding
had knowledge (or reasonably should have had knowledge) of the act or omission,
and (2) that any legal action or legal proceeding concerning the Plan may only
be heard in a “bench” trial and that any right to a jury trial is waived.
 
Section 7.03.   Participant Rights Unsecured.
 
(a) The right of a Participant or his or her Beneficiary to receive a
distribution hereunder shall be an unsecured claim, and neither the Participant
nor any Beneficiary shall have any rights in or against any amount credited to
his or her Account or any other specific assets of the Company or an
Affiliate.  The right of a Participant or Beneficiary to the payment of benefits
under this Plan shall not be assigned, encumbered, or transferred, except by
will or the laws of descent and distribution.  The rights of a Participant
hereunder are exercisable during the Participant’s lifetime only by the
Participant or the Participant’s guardian or legal representative.
 
(b) The Company may set aside assets in the Trust or authorize the creation of
another trust or other arrangements to assist in meeting the obligations created
under the Plan, subject to the restrictions on funding imposed on such trusts by
Code § 409A(b)(3).  However, any liability to any person with respect to the
Plan shall be based solely upon any contractual obligations that may be created
pursuant to the Plan.  No obligation of the Company or an Affiliate shall be
deemed to be secured by any pledge of, or other encumbrance on, any property of
the Company or an Affiliate.  Nothing contained in this Plan and no action taken
pursuant to its terms shall create or be construed to create a trust of any
kind, or a fiduciary relationship between the Company or an Affiliate and
any  Participant or Beneficiary, or any other person, or as providing a
Participant with a right to continue employment with the Company or any
Affiliate.
 
Section 7.04.   Tax Withholding.
 
  The Participant shall pay or make arrangements satisfactory to the Committee
regarding the payment or withholding of, any Federal, state, local or foreign
taxes of any kind required by law to be withheld with respect to such
amount.  In addition, if prior to the date of distribution of any amount
hereunder, the Federal Insurance Contributions Act (FICA) tax imposed under Code
Sections 3101, 3121(a) and 3121(v)(2),
 
 
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where applicable, becomes due, the Company may direct that the Participant’s
benefit be reduced by an Actuarially Equivalent amount to reflect the amount
needed to pay the Participant’s portion of such tax.
 
Section 7.05.   Amendment or Termination of Plan.
 
(a) There shall be no time limit on the duration of the Plan.
 
(b) Except as otherwise limited pursuant to Section 6.02, the Board may at any
time amend the Plan, including but not limited to modifying the terms and
conditions applicable to (or otherwise eliminating) benefit accruals on or after
the Amendment Date (as defined in Section 6.02); provided, however, that no
amendment or termination may reduce or eliminate any benefit accrued to the date
of such amendment.  Further, the Company’s Chief Human Resources Officer (or any
successor to such position) is authorized to amend the Plan to the extent that
such amendment is determined to be necessary or desirable in order to comply or
facilitate compliance with the requirements of Code Section 409A or other
applicable law; or that is otherwise desirable to promote efficient Plan
administration; provided that any such amendment shall not increase Plan
benefits or result in non-ministerial action that is prohibited under
Section 7.01.
 
(c) Subject to Section 6.02, the Board may terminate the Plan in accordance with
and subject to the following provisions.  Upon termination of the Plan, future
accrual of benefits shall cease.
 
(1) The Board terminates the Plan within twelve (12) months of a corporate
dissolution taxed under Code Section 331, or with the approval of a bankruptcy
court pursuant to 11 U.S.C. §503(b)(1)(A),  and  the amounts accrued under the
Plan but not yet paid are distributed to the Participants, Spouses or
beneficiaries, as applicable, in a single sum payment, regardless of any
distribution election then in effect, by the latest of: (A) the last day of the
calendar year in which the Plan termination and liquidation occurs, (B) the last
day of the calendar year in which the amount is no longer subject to a
substantial risk of forfeiture, or
 
 
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(C) the last day of the first calendar year in which payment is administratively
practicable.
 
(2) The Board terminates the Plan at any time during the period that begins
thirty (30) days prior and ends twelve (12) months following a Change of Control
Event (as defined for purposes of Code Section 409A), provided that all
arrangements required to be aggregated with this Plan under Code Section 409A
are terminated and liquidated with respect to each Participant that experienced
the Change in Control Event, so that all participants under similar arrangements
are required to receive all amounts of compensation deferred under the
terminated arrangements within twelve (12) months of the date of termination of
the arrangements.
 
(3) The Board terminates the Plan at any other time, provided that such
termination does not occur proximate to a downturn in the financial health of
the Company or an Affiliate. In such event, all amounts accrued under the Plan
but not yet paid will be distributed to all Participants, Spouses or
beneficiaries, as applicable, in a single sum payment no earlier than twelve
(12) months (and no later than twenty-four (24) months) after the date of
termination, regardless of any distribution election then in effect.  This
provision shall not be effective unless all other plans required to be
aggregated with this Plan under Code Section 409A are also terminated and
liquidated.  Notwithstanding the foregoing, any payment that would otherwise be
paid during the twelve (12)-month period beginning on the Plan termination date
pursuant to the terms of the Plan shall be paid in accordance with such
terms.  In addition, the Company or any Affiliate shall be prohibited from
adopting a similar arrangement within three (3) years following the date of the
Plan’s termination, unless any individual who was a
 
 
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Participant under this Plan is excluded from participating thereunder for such
three (3) year period.
 
(4) Except as provided in Paragraphs (1), (2) and (3) above or as otherwise
permitted in regulations promulgated by the Secretary of the Treasury under Code
Section 409A, any action that purports to terminate the Plan shall instead be
construed as an amendment to discontinue further benefit accruals, but the Plan
will continue to operate, in accordance with its terms as from time to time
amended in accordance with Sections 6.02 and 7.05, and in accordance with
applicable Participant elections, with respect to the Participant’s benefit
accrued through the date of termination, and in no event shall any such action
purporting to terminate the Plan form the basis for accelerating distributions
to Participants and Beneficiaries.
 
(5) If single sum payments are made in accordance with this Section 7.05, the
single sum distribution amount applicable to Participant’s Pension Restoration
Benefit and Supplemental Retirement Benefit shall be determined in accordance
with Sections 3.03 and 4.04 as if the date on which the Plan will make the
single sum distributions is the Calculation Date (and the single sum
distribution amount attributable to the Participant’s Special Defined
Contribution Credits will be equal to the value of the Participant’s account
immediately prior to distribution).
 
Section 7.06.   Administrative Expenses.
 
  Costs of establishing and administering the Plan will be paid by the Company
and its Affiliates.
 
Section 7.07.   Effect on Other Employee Benefit Plans.
 
  Benefits accrued by a Participant under this Plan shall not be considered
“compensation” for the purpose of computing benefits under any employee benefit
plan maintained by the Company or an Affiliate.
 
 
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Section 7.08.   Successor and Assigns.
 
  This Plan shall be binding upon and inure to the benefit of the Company and
its Affiliates, their successors and assigns and the Participants and their
heirs, executors, administrators, and legal representatives.
 
Section 7.09.   Additional Section 409A Provisions.
 
(a) Accelerated Distribution Following Section 409A Failure.  If an amount under
this Plan is required to be included in a Participant’s income under Code
Section 409A prior to the date such amount is actually distributed, the
Participant shall receive a distribution, in a lump sum, within ninety (90) days
after the date it is finally determined that the Plan fails to meet the
requirements of Code Section 409A.  The distribution shall equal the amount
required to be included in the Participant’s income as a result of such failure.
 
(b) Permitted Delay in Payment.  If a distribution required under the terms of
this Plan would jeopardize the ability of the Company or of an Affiliate to
continue as a going concern, the Company or the Affiliate shall not be required
to make such distribution.  Rather, the distribution shall be delayed until the
first date that making the distribution does not jeopardize the ability of the
Company or of an Affiliate to continue as a going concern.  Further, if any
distribution pursuant to the Plan will violate the terms of Section 16(b) of the
Securities Exchange Act of 1934 or other Federal securities laws, or any other
applicable law, then the distribution shall be delayed until the earliest date
on which making the distribution will not violate such law.
 
(c) Compliance With Section 409A Transition Rules.  With respect to a
Participant whose benefit is paid or commences to be paid on or before December
31, 2008, taking into account the required six month delay in the payment
commencement date under Code Section 409A(a)(2)(B), the form and time of
distribution applicable to the Participant shall be determined in accordance
with the terms of the Plan as in effect on March 31, 2008, i.e., in accordance
with the Internal Revenue Service transition rules under Code Section 409A, the
April 1, 2008 amendment and restatement of the Plan shall not affect the form
and time of distribution for a Participant whose benefit is paid (or commences
to be paid) in 2008.
 
 
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Section 7.10.   Offset.
 
The Company shall have the right to offset, without the requirement of obtaining
the consent of the Participant (or his Spouse or Beneficiary, in the event of
the Participant’s death),  from the benefits payable hereunder any amount (up to
the maximum amount that may be deducted without violating Code Section 409A)
that the Participant owes to the Company or any Affiliate.
 

 
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