Exhibit
10.40














PUGET
SOUND ENERGY









DEFERRED
COMPENSATION PLAN




FOR
KEY EMPLOYEES





























As
Amended and Restated




Effective
January 1, 2009










TABLE OF CONTENTS




Purpose
  1.
              Definitions
  2.
              Selection; Enrollment;
      Participation
  2.1
              Selection by
      Committee
  2.2
              Enrollment
      Requirements
  2.3
              Eligibility; Commencement of
      Participation


3.
            Deferrals; Employer
      Contributions; Limits




3.1
            Deferral
      Elections




3.2
            Withholding of Annual Deferral
      Amounts




3.3
            Annual Investment Plan
      Restoration Amount




3.4
            Annual Cash Balance Restoration
      Amount




3.5
            SERP Rollover
      Amount




3.6
            Performance-Based Retirement
      Equivalent Amount




4.
            Vesting; Crediting;
      Taxes




4.1
            Vesting




4.2
            Crediting or Debiting of Account
      Balances




4.3
            FICA and Other
      Taxes




4.4
            Withholding on
      Payments




5.
              Interim Payments; Unforeseeable
      Financial
Emergencies




5.1
            Interim
      Payments




5.2
            Other Benefits Take Precedence
      Over Interim Payments




5.3
            Payments and Cancellations for
      Unforeseeable Financial Emergencies




6.
            Retirement
      Benefit




6.1
            Retirement
      Benefit




6.2
            Payment of Retirement
      Benefit




6.3
            Death Prior to Completion of
      Retirement Benefit




7.
            Death Prior to
      Retirement




7.1
            Pre-Retirement Survivor
      Benefit




7.2
            Payment of Pre-Retirement
      Survivor Benefit




8.
            Termination




8.1
            Termination
      Benefit




8.2
            Payment of Termination
      Benefit




9.
            Disability; Leave of
      Absence




9.1
            Disability
      Benefit




9.2
            Paid Leave of
      Absence




10.
            Beneficiary
      Designation




10.1
            Beneficiary





10.2
            Change; Spousal
      Consent




10.3
            No Beneficiary
      Designation




10.4
            Doubt as to
      Beneficiary




10.5
            Discharge of
      Obligations




11.
            Termination; Amendment or
      Modification




11.1
            Termination




11.2
            Amendment




11.3
            Effect of
      Payment




12.
            Administration




12.1
            Committee
      Duties




12.2
            Administrative Committee;
      Agents




12.3
            Binding Effect of
      Decisions




12.4
            Indemnity of Committee and
      Administrative Committee




13.
            Other Benefits and
      Agreements




14.
            Claims
      Procedures




14.1
            Filing a
    Claim




14.2
            Claim
    Review




14.3
            Appeal




14.4
            Standard of
      Review




14.5
            Legal
    Action




15.
            Trust




15.1
            Establishment of the
      Trust




15.2
            Relationship of This Plan and the
      Trust




15.3
            Distributions from the
      Trust




16.
            Miscellaneous




16.1
            Status of
    Plan




16.2
            Unsecured General
      Creditor




16.3
            Employer's
      Liability




16.4
            Nonassignability




16.5
            Not a Contract of
      Employment




16.6
            Furnishing
      Information




16.7
            Captions




16.8
            Governing
    Law




16.9
            Notice




16.10
            Successors




16.11
            Validity




16.12
            Incompetence




16.13
            Court
      Order




16.14
            Insurance




16.15
            Compliance with Code Section
      409A



















PUGET
SOUND ENERGY




DEFERRED
COMPENSATION PLAN




FOR
KEY EMPLOYEES




As
Amended and Restated Effective January 1, 2009




Purpose




The
growth and success of Puget Sound Energy, Inc. (the "Company") depends on its
ability to attract, motivate and retain key employees of the highest competence,
initiative, and ability.  The purpose of this Plan is to advance the
interests of the Company and its shareholders through a deferred compensation
program for a select group of management and highly compensated executive
officers.  This Plan shall be unfunded for tax purposes and for
purposes of Title I of ERISA.




This Plan
was originally effective June 16, 1997.  This Plan was most
recently amended and restated effective January 1, 2003 and is now amended and
restated effective for all amounts deferred on or after January 1, 2005
that remain unpaid as of January 1, 2009.  All amounts earned and
vested as of December 31, 2004 shall continue to be governed by the terms of the
Plan in place as of December 31, 2004 in accordance with then applicable IRS
guidance.  All amounts earned or vested from January 1, 2005 through
December 31, 2008 shall be governed by this amendment and restatement, as
modified by the operations of the Plan during such period in accordance with
Code Section 409A and then applicable IRS guidance (including transition
relief).  No amendment to this Plan on and after January 1, 2009 is
intended to, nor shall it be deemed to, apply to other than the terms and
conditions of this Plan in effect prior January 1, 2005 unless expressly
provided by such amendment.




1.
            Definitions




For
purposes of this Plan, the following words and phrases shall have the meanings
indicated, unless a different meaning is clearly indicated by the
context:




1.1
            Account
      Balance




"Account
Balance" shall mean a credit on the records of the Employer equal to the sum of
the balances in a Participant's (i) Deferral Account, (ii) Company
Contribution Account, (iii) Investment Plan Restoration Matching Account,
(iv) Cash Balance Restoration Matching Account, and
(v) Performance-Based Retirement Equivalent Account.  The Account
Balance, and each other specified account balance, shall be a bookkeeping entry
only and shall be utilized solely for the determination of amounts due to a
Participant or Beneficiary under this Plan.




1.2
            Annual
      Bonus




"Annual
Bonus" shall mean compensation under an Employer's annual bonus or cash
incentive plans for services performed during any calendar year, excluding stock
compensation and any Long-Term Incentive Awards, whether or not paid in such
year or included on the federal income tax Form W-2 for such year.




1.3
            Annual
      Cash Balance Restoration Amount




"Annual
Cash Balance Restoration Amount" shall mean, for any Plan Year, the amount
determined in accordance with Section 3.4.




1.4
            Annual
      Deferral Amount




"Annual
Deferral Amount" shall mean that portion of Base Salary, Annual Bonus and
Long-Term Incentive Awards that a Participant defers in accordance with
Section 3 for any Plan Year.  If a Participant dies, Retires,
suffers a Disability (if deferrals cease in accordance with Section 9.1) or
undergoes a Termination of Employment during a Plan Year, the Annual Deferral
Amount for the year shall be the amount deferred prior to such
event.




1.5
            Annual
      Installment Method




"Annual
Installment Method" shall mean yearly installments payable in substantially
equal number of shares as described in Sections 6 and 7.




1.6
            Annual
      Investment Plan Restoration Amount




"Annual
Investment Plan Restoration Amount" for any Plan Year shall mean the amount
determined in accordance with Section 3.3.




1.7
            Base
      Salary




"Base
Salary" shall mean cash compensation for services, excluding any Annual Bonus,
any Long-Term Incentive Award and any other bonuses, commissions, overtime pay,
fringe benefits, stock options, relocation expenses, incentive payments,
nonmonetary awards, directors fees and other fees, and automobile and other
allowances.  Base Salary shall be calculated before reduction for
compensation voluntarily deferred or contributed by the Participant pursuant to
this Plan or other qualified or nonqualified plans of any Employer and shall
include amounts excluded from compensation pursuant to Code Sections 125,
402(e)(3), 402(h), and 403(b).




1.8
            Beneficiary




"Beneficiary"
shall mean one or more individuals, trusts, estates or other entities,
designated in accordance with Article 10 to receive benefits under this
Plan upon the death of a Participant.




1.9
            Board




"Board"
shall mean the board of directors of the Company.




1.10
            Cash
      Balance Plan




"Cash
Balance Plan" shall mean the Retirement Plan for Employees of Puget Sound
Energy, Inc., originally known as the Retirement Plan for Employees of Puget
Sound Power & Light Company, established by Puget Sound
Power & Light Company in 1958, as amended and restated effective
March 1, 1997 and since amended.




1.11
            Cash
      Balance Restoration Account




"Cash
Balance Restoration Account" shall mean an account on the books of the Employer
that reflects (i) the sum of the Participant's Annual Cash Balance
Restoration Amounts, plus (ii) amounts credited to the Participant's Cash
Balance Restoration Account in accordance with the crediting provisions of this
Plan, less (iii) all distributions made to the Participant or the
Participant's Beneficiary from the Participant's Cash Balance Restoration
Account.





1.12
            Claimant




"Claimant"
shall have the meaning set forth in Section 14.1.




1.113
            Code




"Code"
shall mean the Internal Revenue Code of 1986, as it may be amended from time to
time.




1.14
            Committee




"Committee"
shall mean the committee described in Article 12, and, if an Administrative
Committee has been appointed pursuant to Section 12.2 shall include such
Administrative Committee.




1.15
            Company




"Company"
shall mean Puget Sound Energy, Inc., a Washington corporation, and any successor
to all or substantially all of the Company's assets or business.




1.16
            Company
      Contribution Account




"Company
Contribution Account" shall mean an account on the books of the Company that
reflects (i) the sum of the Participant's Annual Company Contribution
Amounts, plus (ii) amounts credited to the Participant's Company
Contribution Account in accordance with the crediting provisions of this Plan,
less (iii) all distributions made to the Participant or the Participant's
Beneficiary from the Participant's Company Contribution Account.




1.17
            Company
      Stock Fund




"Company
Stock Fund" shall mean the Measurement Fund that corresponds to the fair market
value of Stock.  Reallocation of a Participant's existing Account
Balance to, and investment of new contributions in, the Company Stock Fund shall
cease as of such date preceding the Exchange as is designated by the
Committee.  Immediately following the reallocation contemplated by
Section 4.2(e), the Company Stock Fund shall cease to be offered as a
Measurement Fund under the Plan.




1.18
            Deferral
      Account




"Deferral
Account" shall mean an account on the books of the Company that reflects
(i) the sum of a Participant's Annual Deferral Amounts, plus
(ii) amounts credited to the Participant's Deferral Account in accordance
with the applicable crediting provisions of this Plan, less (iii) all
distributions made to the Participant or the Participant's Beneficiary from the
Participant's Deferral Account.




1.19
            Disabled;
      Disability




"Disabled"
shall mean a Participant who is "disabled" within the meaning of Code Section
409A and meets one of the following requirements:




(a)
            He
      or she is unable to engage in any substantial gainful activity by reason
      of any medically determinable physical or mental impairment that can be
      expected to result in death or can be expected to last for a continuous
      period of not less than 12 months;
or




(b)
            He
      or she is, by reason of any medically determinable physical or mental
      impairment that can be expected to result in death or can be expected to
      last for a continuous period of not less than 12 months, is receiving
      income replacement benefits for a period of not less than 3 months under
      an accident and health plan covering employees of the Employer;
      or




(c)
            He
      or she has been determined to be totally disabled by the Social Security
      Administration or Railroad Retirement Board;
or




(d)
            He
      or she is determined to be disabled in accordance with the Employer's
      group long-term disability plan, provided that such plan's definition
      complies with Treasury Regulation
    Section 1.409A-3(i)(4).




1.20
            Disability
      Benefit




"Disability
Benefit" shall mean the benefit set forth in Section 9.1.




1.21
            Employee




"Employee"
shall mean an individual who is an employee of any Employer.




1.22
            Employer




"Employer"
shall mean the Company and shall include any of its affiliates that, together
with the Company, is treated as a single employer under Code Section 414(b) or
(c).




1.23
            ERISA




"ERISA"
shall mean the Employee Retirement Income Security Act of 1974, as it may be
amended from time to time.




1.24     Exchange




"Exchange"
means the exchange of shares of Puget Energy, Inc. for cash, as contemplated in
that Agreement and Plan of Merger by and among Puget Energy, Inc., Padua
Holdings LLC, Padua Intermediate Holdings Inc. and Padua Merger Sub Inc. dated
as of October 25, 2007.




1.25
            Exchange
      Act




"Exchange
Act" shall mean the Securities Exchange Act of 1934, as amended.




1.26
            Fair
      Market Value




"Fair
Market Value" shall mean the average of the daily high and low per share trading
prices for the Stock as reported daily by the New York Stock Exchange in The Wall Street Journal or
similar readily available source, for a single trading day.




1.27
            Fixed
      Amount Installment Method




"Fixed
Amount Installment Method" shall mean installment payments of a fixed amount
selected by the Participant as prescribed in Sections 6 and 7.  The
fixed payments shall be paid until the Participant's Account Balance reaches
zero.




1.28
            Interim
      Payment




"Interim
Payment" shall mean the payment described in Section 5.1.







1.29
            Investment
      Plan




"Investment
Plan" shall mean the Investment Plan for Employees of Puget Sound Energy, Inc.,
formerly known as the Investment Plan for Employees of Puget Sound
Power & Light Company, originally adopted effective August 1, 1970, as
amended and restated, as adopted by the Company effective January 1, 2005 and
since amended.




1.30
            Investment
      Plan Restoration Account




"Investment
Plan Restoration Account" shall mean (i) the sum of a Participant's Annual
Investment Plan Restoration Amounts, plus (ii) amounts credited to the
Participant's Investment Plan Restoration Account in accordance with the
applicable crediting provisions of this Plan, less (iii) all distributions
made to the Participant or the Participant's Beneficiary from the Participant's
Investment Plan Restoration Account.




1.31
            Long-Term
      Incentive Award




"Long-Term
Incentive Award" shall mean amounts paid or payable to a Participant under the
Company's 2005 Long-Term Incentive Plan or any successor plan
thereto.




1.32
            Measurement
      Funds




"Measurement
Funds" shall mean the funds described in Section 4.2.




1.33
            Monthly
      Installment Method




"Monthly
Installment Method" shall mean a monthly installment payment over the number of
months selected by the Participant in accordance with Articles 6 and 7,
calculated as provided in this Section 1.33.  The monthly
installment shall be calculated by multiplying this balance by a fraction, the
numerator of which is one and the denominator of which is the remaining number
of monthly payments due the Participant.  By way of example, if the
Participant elects a 120-month Monthly Installment Method, the first payment
shall be 1/120 of the Account Balance, calculated as described in this
definition.  The following month, the payment shall be 1/119 of the
Account Balance, calculated as described in this definition.




1.34
            Participant




"Participant"
shall mean an Employee who is selected to participate in this Plan and who
elects to participate in this Plan in accordance with
Section 2.  Status as a Participant shall continue for as long as
the individual has an Account Balance under this Plan, even if the Participant
is no longer an Employee.  A spouse or former spouse of a Participant
shall not be treated as a Participant even if such spouse has an interest in the
Participant's benefits under this Plan.




1.35
            Performance-Based
      Retirement Equivalent Account




"Performance-Based
Retirement Equivalent Account" shall mean an account on the books of the Company
that reflects (i) the sum of a Participant's Performance-Based Retirement
Equivalent Amount, plus (ii) amounts credited in accordance with the
applicable crediting provisions of this Plan, less (iii) all distributions
made to the Participant or the Participant's Beneficiary from such
account.




1.36
            Performance-Based
      Retirement Equivalent Amount




"Performance-Based
Retirement Equivalent Amount" shall mean, for any Plan Year, the amount
determined in accordance with Section 3.6.




1.37
            Plan




"Plan"
shall mean this Deferred Compensation Plan for Key Employees, as it may be
amended from time to time.




1.38
            Plan
      Year




"Plan
Year" shall mean, except for the first Plan Year, a period beginning on
January 1 of each year and continuing through December 31 of such
year.




1.39
            Pre-Retirement
      Survivor Benefit




"Pre-Retirement
Survivor Benefit" shall mean the benefit set forth in
Article 7.




1.40
            Retirement,
      Retire(s), Retired




"Retirement,"
"Retire(s)" or "Retired" shall mean, with respect to an Employee, Termination of
Employment on or after the earlier of the attainment of (a) age 62 or
(b) age 55 with 5 Years of Service.




1.41
            Retirement
      Benefit




"Retirement
Benefit" shall mean the benefit set forth in Article 6.




1.42
            Section 16
      Insider




"Section 16
Insider" shall mean any participant who is, with respect to the Company, subject
to Section 16 of the Exchange Act.




1.43
            SERP
      Rollover Account




"SERP
Rollover Account" shall mean an account on the books of the Company that
reflects (i) a Participant's SERP Rollover Amounts, plus (ii) amounts
credited to the Participant's SERP Rollover Account in accordance with the
applicable crediting provisions of this Plan, less (iii) all distributions
made to the Participant or the Participant's Beneficiary from the Participant's
SERP Rollover Account.




1.44
            SERP
      Rollover Amount




"SERP
Rollover Amount" for any Plan Year shall mean the amount determined in
accordance with Section 3.5.




1.45
            Specified
      Amount Installment Method




"Specified
Amount Installment Method" means installment payments according to a schedule
prepared by the Participant and in a form and amount acceptable to the Company's
Executive Plans Committee.  The amounts of each installment payment
need not be equal.  Installment payments shall continue until the
earlier of (a) the exhaustion of the Participant's Account Balance, and
(b) the period elected by the Participant.  The installment
payments shall be made monthly for cash amounts and annually for stock
amounts.




1.46
            Specified
      Employee




"Specified
Employee" means a "key employee" (as defined in Code Section 416(i) without
regard to Code Section 416(i)(5)) of the Employer.  For purposes of
this Plan, a Participant is a key employee if he or she meets the requirements
of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the
regulations thereunder and disregarding Code Section 416(i)(5)) at any time
during the 12-month period ending on an identification date.  If a
Participant is a key employee as of an identification date, he or she is treated
as a Specified Employee for the 12-month period beginning on the first day of
the fourth month following the identification date.  The Committee may
designate any date in a calendar year as the identification date provided that
it uses the same identification date with respect to all arrangements, and any
change to the identification date may not be effective for a period of 12
months.  If no identification date is designated, the identification
date is December 31.  The Committeemay prospectively
designate an identification date through a separately adopted
document.




1.47
            Stock




"Stock"
shall mean the common stock of the Company's parent, Puget Energy, Inc., that is
traded on the New York Stock Exchange or the common stock of any successor to
Puget Energy, Inc. that is publicly traded.  All references in this
Plan to "Puget Energy, Inc." shall be deemed to include its
successor.  To the extent such successor's stock is traded on an
exchange other than the New York Stock Exchange, all references in the Plan to
"New York Stock Exchange" shall be deemed to include such other
exchange.




1.48
            Stock
      Fund




"Stock
Fund" shall mean the Measurement Fund that corresponds to the fair market value
of Stock.




1.49
            Termination
      Benefit




"Termination
Benefit" shall mean the benefit set forth in Article 8.




1.50
            Termination
      of Employment




"Termination
of Employment" shall mean a "separation from service" as an Employee within the
meaning of Code Section 409A, voluntarily or involuntarily, for any reason other
than Disability, death or an authorized leave of absence.




1.51
            Trust




"Trust"
shall mean one or more trusts established pursuant to that certain Master Trust
Agreement, dated as of June 16, 1997, between the Company and The Bank of
New York as trustee, as amended from time to time.




1.52
            Trustee




"Trustee"
shall mean the financial institution acting at the time as trustee of the
Trust.




1.53
            Unforeseeable
      Financial Emergency




"Unforeseeable
Financial Emergency" shall mean, as defined by Code Section 409A, a severe
financial hardship of the Participant resulting from an illness or accident of
the Participant, the Participant's spouse or dependent (as defined in Code
Section 152, without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B)); loss
of the Participant's property due to casualty (including the need to rebuild a
home following damage to a home not otherwise covered by insurance, for example,
as a result of a natural disaster); or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant.  For example: (a) imminent foreclosure of or eviction
from the Participant's primary residence may constitute an Unforeseeable
Emergency; (b) the need to pay for medical expenses, including nonrefundable
deductibles, as well as for the costs of prescription drug medication, may
constitute an Unforeseeable Emergency; (c) the need to pay for the funeral
expenses of a spouse, a Beneficiary, or a dependent (as defined in Code Section
152, without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B)) may also
constitute an Unforeseeable Emergency; and (d) the purchase of a home and the
payment of college tuition are not Unforeseeable Emergencies.




1.54
            Years
      of Service




"Years of
Service" shall mean the total number of years in which one or more Employers
have employed a Participant.  For purposes of this definition, a year
of employment shall be a 365-day period (or 366-day period in the case of a leap
year) that, for the first year of employment, commences on the Employee's date
of hiring and that, for any subsequent year, commences on the anniversary of
that hiring date.  Any partial year of employment shall not be
counted.




2.
            Selection;
      Enrollment; Participation




2.1
            Selection
      by Committee




Participation
in this Plan shall be limited to a select group of management and highly
compensated Employees chosen for participation by the Committee in its sole
discretion.




2.2
            Enrollment
      Requirements




Each
Employee selected for participation in this Plan shall complete and return to
the Committee an election form, a beneficiary designation form and such other
material as the Committee may request, within 30 days after selection to
participate.




2.3
            Eligibility;
      Commencement of Participation




An
Employee selected to participate in this Plan shall commence participation on
the first day of the month following the month in which the Employee properly
completes all enrollment requirements.  An Employee who does not
complete the requirements within the time required in Section 2.2 shall not
be eligible to participate in this Plan until the first day of the Plan Year
following delivery to and acceptance by the Committee of the required
forms.




3.
            Deferrals;
      Employer Contributions; Limits




3.1
            Deferral
      Elections




An
Employee first selected to participate in this Plan may make an irrevocable
election to defer all or a designated portion of Base Salary, Annual Bonus and
any Long-Term Incentive Award (to the extent determined by the Committee) that
may be otherwise payable for such Plan Year.  The election shall be
effective only with respect to compensation paid for services performed during
the Plan Year after such election.  The Participant must deliver a
completed election form to the Committee within 30 days after selection, in
order to participate for such Plan Year.




For each
succeeding Plan Year, the Participant may make an irrevocable election to defer
all or a designated portion of Base Salary, Annual Bonus and any Long-Term
Incentive Award (to the extent determined by the Committee) that may be
otherwise payable for such Plan Year by delivering to the Committee a new
election form by December 31 of the preceding Plan Year, or such earlier
deadline set by the Committee.  If no election form is timely
delivered to the Committee for any Plan Year, the Participant's Annual Deferral
Amount for that Plan Year shall be zero.




3.2
            Withholding
      of Annual Deferral Amounts




Base
Salary, Annual Bonus and Long-Term Incentive Awards deferred under this Plan
shall be withheld at the time they otherwise would be paid to the Participant,
whether or not this occurs during the Plan Year itself.




3.3
            Annual
      Investment Plan Restoration Amount




A
Participant's Annual Investment Plan Restoration Amount for any Plan Year shall
be equal to the reduction in Employee contributions to the Investment Plan that
are attributable to the Participant's election to defer Base Salary or Annual
Bonus under this Plan (but only if such election included a "spillover" election
from the Investment Plan to this Plan pursuant to Treasury Regulation Section
1.409A-3(j)(5)), credited monthly as an employer contribution, plus an amount
equal to the sum of (i) Employer matching contributions that would have
been credited to the Participant's account under the Investment Plan but for the
reduction in Employee contributions to that Plan or the timing and amount of the
Participant's deferrals under the Investment Plan, (ii) Employer required
contributions that would have been credited to the Participant's account under
the Investment Plan but for the reduction in Employee compensation due to
deferrals hereunder, and (iii) Employer required contributions that would
have been credited to the Participant's account under the Investment Plan but
for the limitations in Code Section 401(k)(3) and may have been credited
monthly.  If a Participant is not an Employee as of the first and last
days of a Plan Year (unless due to Retirement or death), any Annual Investment
Plan Restoration Amount for such Plan Year and not previously credited shall be
zero.  If a Participant Retires or dies during a Plan Year, any Annual
Investment Plan Restoration Amount not previously credited shall be credited
with a prorated amount, based on the Participant's contributions through the
date of Retirement or death.




3.4
            Annual
      Cash Balance Restoration Amount




If a
Participant is eligible to participate in the Cash Balance Plan and
contributions to his or her account under such Plan, or his or her accrued
benefit under such Plan, are reduced for any Plan Year in order to satisfy the
limitations in Code Section 415(e), or if contributions to the
Participant's account under the Cash Balance Plan are reduced in any Plan Year
as a result of the Participant's election to defer Base Salary or Annual Bonus
under this Plan, then in any such case the Participant's Cash Balance
Restoration Account shall be credited as an employer contribution with an amount
that is equal to or (as determined by the Committee in its discretion) is the
actuarial equivalent of such reductions.  The amount so credited shall
be the Annual Cash Balance Restoration Amount for that
Participant.  If a Participant is not employed by an Employer as of
the last day of a Plan Year other than by reason of Retirement or death, the
Annual Cash Balance Restoration Amount for such Plan Year shall be
zero.  If a Participant Retires or dies during a Plan Year, the Annual
Cash Balance Restoration Amount shall be credited with a prorated amount based
on the Participant's deferred Base Salary or Annual Bonus for such Plan Year
through the date of Retirement or death.




3.5
            SERP
      Rollover Amount




If
elected by a Participant according to the terms of the Company's Supplemental
Executive Retirement Plan, the SERP Rollover Amount, if any, shall be credited
to the Participant's SERP Rollover Account as of the date of
retirement.  The SERP Rollover Amount shall be paid pursuant to the
Participant's payment election based on the same terms and conditions as
applicable to Retirement Benefits under Section 6.2, with a Participant's
initial payment election made within 30 days of the Participant's initial
eligibility under the SERP or on or before December 31, 2008 in accordance with
Code Section 409A and all applicable transition guidance
thereunder.




3.6
            Performance-Based
      Retirement Equivalent Amount




For each
Plan Year, a Participant's Performance-Based Retirement Equivalent Amount shall
be calculated and credited as an employer contribution to the Participant's
Performance-Based Retirement Equivalent Account in accordance with the
Participant's employment agreement or other agreement with the Employer, as
applicable.  The Employer may credit different amounts for different
Participants.  A credit awarded to one Participant shall not bind the
Employer to credit any amount to any other Participant.  The
Participant's Performance-Based Retirement Equivalent Account shall vest over a
period and in such manner as provided under the Participant's employment
agreement or other agreement with the Employer, as applicable.  To the
extent a Participant is not fully vested in his or her Performance-Based
Retirement Equivalent Account at the time of his or her Termination of
Employment, death or Disability, or upon the termination of this Plan, all
unvested amounts therein shall be forfeited and neither the Participant nor his
or her Beneficiary shall have any further interest in such amounts.




4.
            Vesting;
      Crediting; Taxes




4.1
            Vesting




Except as
set forth in Section 3.6, a Participant's Account Balance shall at all times be
fully vested; provided, however, that any portion of the Participant's Account
Balance attributable to a deferral of benefits from a Company benefit plan other
than this Plan shall be nonforfeitable to the same extent, and under the same
terms and conditions, as set forth in the vesting provisions of such other
Company benefit plan.




4.2
            Crediting
      or Debiting of Account Balances




Amounts
shall be credited or debited to a Participant's Account Balance in accordance
with the following rules and such other rules and procedures as the Committee
may establish in its discretion:




(a)
            Selection
      of Measurement Funds




In
connection with an initial deferral election a Participant shall select one or
more Measurement Funds to be used to determine the amounts to be credited to the
Account Balance; provided, however, that the Performance-Based Retirement
Equivalent Amount shall be credited only to the Company Stock Fund and may not
thereafter be reallocated to any other Measurement Fund.  A
Participant may change a selection by submitting a new election to the Committee
on a form approved by the Committee.  Any such selection shall take
effect in the calendar quarter next succeeding the quarter in which the election
form is received by the Committee, and shall continue in effect thereafter until
changed in accordance with this Section 4.2(a).  The Participant
shall specify, in increments of 10%, the percentage of the Account Balance to be
allocated to any Measurement Fund.  However, if a Participant is in
payment status under the Monthly Installment Method or the Annual Installment
Method, he or she shall only be allowed to reallocate funds to or from his or
her Company Stock Fund account by December 31 of any Plan Year, to be
effective the following January 1.  Participants who are
Section 16 Insiders may reallocate funds to or from their Company Stock
Fund account only in accordance with the foregoing provisions of this
Section 4.2(a), Company policies on insider trading and in compliance with
the rules for "Discretionary Transactions" as defined in Rule 16b-3 (or any
successor provision) under the Exchange Act.




Notwithstanding
the foregoing, a Participant's direction to credit future contributions in the
Company Stock Fund shall become ineffective as of the date specified by the
Committee in connection with the Exchange and the portion of future
contributions to which such direction applies shall thereafter be credited in
such Measurement Funds as the Committee shall specify until such time as the
Participant changes such direction with respect to future
contributions.




(b)
            Crediting
      of Measurement Funds




The
Committee may, in its sole discretion, discontinue, substitute or add any
Measurement Funds, but at least two Measurement Funds will always be
available.  Deferrals of Long-Term Incentive Awards shall be credited
to Company Stock Fund accounts in the form of stock units equal in number to
(i) the number of shares of Stock payable and (ii) the number of
shares that could be purchased with any cash amount so allocated, based on the
Fair Market Value of the Stock on the date the account is so
credited.  Performance-Based Retirement Equivalent Amounts shall be
credited to Company Stock Fund accounts in the form of stock units equal in
number to that which is determined under the terms of a Participant's employment
agreement or other agreement with the Employer, as applicable.




A
Participant's Account Balance, other than amounts allocated to the Company Stock
Fund, shall be credited or debited on a daily basis based on the performance of
each Measurement Fund selected by the Participant.  Performance shall
be determined by the Committee in its sole discretion as if (i) the
Participant's Account Balance were invested in the Measurement Funds selected by
the Participant, in the percentages applicable during such calendar quarter, as
of the close of business on the first business day of such calendar quarter, at
the closing price on such date, (ii) the portion of the Annual Deferral
Amount that was actually deferred during any calendar quarter was invested in
the Measurement Funds selected by the Participant, in the percentages applicable
to such calendar quarter, no later than the close of business on the tenth
business day after the day on which such amounts are actually deferred through
reductions in payroll, at the closing price on such date, and (iii) any
distribution made to a Participant that decreases such Participant's Account
Balance was withdrawn from the Measurement Funds, in the percentages applicable
to such calendar quarter, no earlier than the valuation date described in this
Section 4.2(b), at the closing price on such date.  The Annual
Investment Plan Restoration Amount, and Annual Cash Balance Restoration Amount
shall be credited to a Participant's Account Balances for purposes of this
Section 4.2(b) as of the close of business on the first business day in
February of the Plan Year following the Plan Year to which they
relate.




Prior to
the Exchange, a Participant's Account Balance that is allocated to the Company
Stock Fund shall be credited with stock units at the time they would have been
paid if the shares would have been held by the Participant, with additional
stock units equal in number to the number of shares of Stock that could be
purchased with the amount of any cash dividends or other distributions that
would be payable on the number of shares of Stock that equals the number of
stock units in such account.  The number of stock units credited to a
Participant's Account Balance shall be appropriately adjusted to reflect
(i) Stock splits, Stock dividends and other like adjustments in such
Account Balance that were allocated to the Company Stock Fund, and (ii) any
distributions made to a Participant that decrease the portion of such Account
Balance allocated to the Company Stock Fund.  Following the Exchange,
the provisions of Section 4.2(e) shall apply.




(c)
            Form
      and Amount of Payment




Prior to
the Exchange, a Participant's Account Balance that is allocated to the Company
Stock Fund shall be payable only in Stock, plus cash for any fractional shares,
and the remainder of the Participant's Account Balance shall be paid in
cash.  After the Exchange, the Participant's Account Balance shall be
paid only in cash, including with respect to the future payment of any
Retirement Benefits or other distributions that commenced prior to the
Exchange.




Lump sum
payments are valued as of the valuation date immediately preceding the
following: (i) the Participant's date of Termination, date of Retirement,
death or Disability, (ii) the first business day for the appropriate Plan
Year for deferrals designated as Interim Payments, or (iii) when approved
by the Committee for payments due to Unforeseeable Financial Emergencies
pursuant to Section 5.3.  All other payments are valued as of the
valuation date immediately preceding the date on which the payment is
processed.




(d)
            No
      Actual Investment




The
Measurement Funds are to be used for measurement purposes only.  A
Participant's selection of a Measurement Fund and the crediting or debiting of
amounts to a Participant's Account Balance based on such selection shall not be
considered or construed as an actual investment in any such Measurement
Fund.  If the Company or the Trustee, in its discretion, invests
assets in any or all of the Measurement Funds, no Participant shall have any
rights in or to such investments.  Without limiting the foregoing, a
Participant's Account Balance shall at all times be a bookkeeping entry only and
shall not represent any investment made on his or her behalf by the Company or
the Trust.  With respect to Account Balances and other rights under
this Plan, the Participant shall at all times be and remain an unsecured general
creditor of the Company.




(e)           Crediting
of Company Stock Fund After the Exchange




Notwithstanding
Section 4.2(b) or any other provision herein to the contrary, reallocation of a
Participant's Account Balance to, and investment of new contributions in, the
Company Stock Fund shall cease as of such date preceding the Exchange as is
designated by the Committee.  Immediately following the reallocation
contemplated by this Section 4.2(e), the Company Stock Fund shall cease to be
offered as a Measurement Fund under the Plan.




As soon
as administratively practicable after the Exchange, the portion of a
Participant's Account Balance that is invested in the Company Stock Fund
(including any Stock dividends credited after the Exchange) shall be reallocated
among the remaining Measurement Funds in accordance with investment directions
provided by the Participant expressly for such purpose or, to the extent such
investment directions are not received by the Committee (or its delegate) by the
date specified by the Committee, to the fund or funds specified by the
Committee.




4.3
            FICA
      and Other Taxes




The
Employer shall withhold from all forms of compensation related to deferrals
under this Plan, in any reasonable manner determined by the Employer, the
Participant's share of FICA and other employment or self-employment taxes that
may be required to be withheld.




4.4
            Withholding
      on Payments




The
Employer or the Trustee shall withhold from any payments made to a Participant
or Beneficiary all federal, state and local income, employment and other taxes
required to be withheld from such payments, in amounts and in a manner
determined in the discretion of the Employer and the Trust.  In
accordance with applicable law, the Employer may withhold from any distribution
under this Plan any amount owed by the Participant to any Employer, but in no
event more than $5,000 per year and as otherwise limited by Code Section
409A.




5.
            Interim
      Payments; Unforeseeable Financial
Emergencies




5.1
            Interim
      Payments




A
Participant may irrevocably elect, by December 31st of the year preceding the
Plan Year covered by this election, to receive an Interim Payment from this Plan
with respect to any Annual Deferral Amount for such Plan Year.  The
Interim Payment shall be an amount that is equal to the Annual Deferral Amount
plus amounts credited or debited in the manner provided in Section 4.2 on
that amount, determined at the time that the Interim Payment becomes
payable.  Each such Interim Payment shall be paid in a lump sum within
60 days after the last day of any Plan Year designated by the Participant
that is at least two Plan Years after the Plan Year in which the Annual Deferral
Amount is deferred.  For example, if a two-year Interim Payment is
elected for Annual Deferral Amounts that are deferred in the Plan Year
commencing January 1, 2009, the two-year Interim Payment would become
payable during a 60-day period commencing January 1, 2012.




5.2
            Other
      Benefits Take Precedence Over Interim
Payments




Payments
for reason of Termination of Employment, Retirement, death, Disability or an
Unforeseeable Financial Emergency take precedence over Interim
Payments.  Payments under those circumstances may be made from Annual
Deferral Amounts that otherwise would be payable as Interim
Payments.




5.3
            Payments
      and Cancellations for Unforeseeable Financial
  Emergencies




If a
Participant experiences an Unforeseeable Financial Emergency, the Participant
may request a partial or full payment from the Plan.  Such payment
shall not exceed the lesser of the Participant's Account Balance or the amount
reasonably necessary to satisfy the Unforeseeable Financial Emergency (which may
include amounts necessary to pay any Federal, state, or local income taxes or
penalties reasonably anticipated from the distribution).  A payment on
account of an Unforeseeable Financial Emergency will not be made to the extent
that such emergency is or may be relieved through reimbursement or compensation
from insurance or otherwise, by liquidation of the Participant's assets, to the
extent the liquidation of such assets would not cause severe financial hardship,
or by cancellation of deferrals under this Plan.  If the Committee
approves such a request, the Participant's deferral election then in place shall
be cancelled for the remainder of the Plan Year effective on the date of
approval and any payment shall be made within 60 days of the date of
approval.




6.
            Retirement
      Benefit




6.1
            Retirement
      Benefit




A
Participant who Retires shall receive his or her vested Account Balance as a
Retirement Benefit.




6.2
            Payment
      of Retirement Benefit




(a)
            Timing
      and Form




A
Participant may elect at the same time as his or her initial deferral election,
in a manner determined by the Committee, to receive Retirement Benefits in a
lump sum, under the Fixed Amount Installment Method, Annual Installment Method,
Monthly Installment Method or Specified Amount Installment Method of not more
than 20 years (240 months); provided, however, that to the extent a Participant
receives Retirement Benefits in Stock from the Company Stock Fund, a Participant
may elect to receive such Retirement Benefits only in a lump sum or under the
Annual Installment Method or Specified Amount Installment Method for the same
period that benefits from the other Measurement Funds are elected and
paid.  The election may be changed in accordance with subsection (b)
below.  The election most recently accepted by the Committee shall
govern the payment of the Retirement Benefit.  If a Participant does
not make any election with respect to the payment of the Retirement Benefit,
then such benefit shall be payable in a lump sum.  The lump sum
payment shall be made no later than 60 days after the date the Participant
Retires.  Installment payments shall commence no later than
60 days after the Participant Retires; however, any annual distributions
from the Company Stock Fund shall be distributed in the subsequent year in
January.  Notwithstanding the foregoing sentence to the contrary, to
the extent the payment of Retirement Benefits commenced prior to the Exchange
and remain outstanding at the time of the Exchange, future payments of the
Participant's Account Balance converted from the Company Stock Fund to another
Measurement Fund in accordance with Section 4.2(a) shall thereafter be paid in
cash on a monthly basis throughout the year in which payment would otherwise
have been made in Company Stock in January of such year.




(b)
            Subsequent
      Payment Elections




A
Participant may elect to delay a payment or to change the form of payment of his
or her vested Account Balance only under the following conditions:




(1)
            The
      election does not take effect until as least 12 months after the date on
      which the election is made; and




(2)
            With
      respect to elections related to payments made for reasons other than on
      account of death, Disability or an Unforeseeable Financial Emergency, the
      payment with respect to which such election is made shall be deferred for
      a period of not less than five years from the date such payment would
      otherwise have been paid (or in the case of any method of installment
      payments, each of which are treated as a single payment for purposes of
      Code Section 409A, five years from the date the first amount was scheduled
      to be paid).  Any such election may be made only two times by
      the Participant covering each specific class year of
      deferrals.




(c)
            Required
      Delay in Payment to Specified
Employees




In the
case of any Specified Employee, payments due upon Termination of Employment or
Retirement shall not be made before the date that is six months after the date
of such Termination or Retirement.  In the case of any method of
installment payments, payments due upon Termination of Employment or Retirement
shall be delayed by six months from the date the first amount was scheduled to
be paid.




6.3
            Death
      Prior to Completion of Retirement
Benefit




If a
Participant dies after Retirement but before the Retirement Benefit is paid in
full, the unpaid Retirement Benefit payments shall be paid to the Participant's
Beneficiary within 60 days after the date of the Participant's
death.  Payment shall be made in the same manner and in the same
amounts as the benefit would have been paid to the Participant had the
Participant survived.




7.
            Death
      Prior to Retirement




7.1
            Pre-Retirement
      Survivor Benefit




The
Participant's Beneficiary shall receive a Pre-Retirement Survivor Benefit equal
to the Participant's vested Account Balance, if the Participant dies before
Retirement.




7.2
            Payment
      of Pre-Retirement Survivor Benefit




A
Participant may elect at the same time as his or her initial election, in a
manner determined by the Committee, whether the Pre-Retirement Survivor Benefit
shall be paid to his or her Beneficiary in a lump sum or pursuant to the Fixed
Amount Installment Method, Annual Installment Method, Monthly Installment Method
or Specified Amount Installment Method of not more than 20 years (240 months);
provided, however, that to the extent a Beneficiary receives Retirement Benefits
in Stock from the Company Stock Fund, a Participant may elect to have such
Retirement Benefits paid to his or her Beneficiary only in a lump sum or under
the Annual Installment Method or Specified Amount Installment Method for the
same period that benefits from other Measurement Funds are elected and
paid.  The Participant may change this election to any allowable
alternative payment period by submitting a new election to the Committee, in a
form approved by the Committee; provided that the election complies with Section
6.2(b).  The election most recently accepted by the Committee prior to
the Participant's death shall govern the payment of the Participant's
Pre-Retirement Survivor Benefit.  If a Participant does not make any
election with respect to the payment of the Pre-Retirement Survivor Benefit,
then such benefit shall be paid in a lump sum.  A lump sum payment
shall be made no later than 60 days after the Participant's
death.




8.
            Termination




8.1
            Termination
      Benefit




A
Participant who is not eligible for a Retirement Benefit or Disability Benefit
shall receive a Termination Benefit, which shall be equal to the Participant's
vested Account Balance.  Any nonvested balances or restricted shares
in the Company Stock Fund shall be forfeited.




8.2
            Payment
      of Termination Benefit




At the
time of a Participant's Termination of Employment, his or her Account Balance
shall be paid in a lump sum (the "Termination Benefit").  Such lump
sum payment shall be made no later than 60 days after the date of
Termination of Employment.




9.
            Disability;
      Leave of Absence




9.1
            Disability
      Benefit




If the
Committee determines that a Participant is Disabled, he or she shall receive a
Disability Benefit equal to his or her vested Account Balance at the time of the
Committee's determination.  The Disability Benefit shall be paid in a
lump sum within 60 days of the Committee's determination.




9.2
            Paid
      Leave of Absence




A
Participant who is on a paid leave of absence shall continue to be considered
employed by the Employer, and deferrals shall continue to be withheld during
such paid leave of absence in accordance with Section 3.2.




10.
            Beneficiary
      Designation




10.1
            Beneficiary




Each
Participant shall have the right to designate one or more Beneficiaries
(including primary and contingent Beneficiaries) to receive any benefits payable
under this Plan.  The Beneficiary may be the same as or different from
the Beneficiary designated under any other plan in which the Participant
participates.




10.2
            Change;
      Spousal Consent




A
Participant shall have the right to change a Beneficiary by completing a new
beneficiary designation on a form approved by the Committee.  If the
Participant designates someone other than his or her spouse as a Beneficiary,
the spouse must consent to the designation in writing on a form approved by the
Committee, and the signed consent form must be returned to the
Committee.  The Committee shall be entitled to rely on the last
Beneficiary designation filed by the Participant and accepted by the Committee
prior to the Participant's death.




10.3
            No
      Beneficiary Designation




If a
Participant fails to designate a Beneficiary or if all designated Beneficiaries
predecease the Participant or die prior to complete distribution of the
Participant's benefits, then the Participant's designated Beneficiary shall be
deemed to be his or her surviving spouse.  If the Participant has no
surviving spouse, the benefits remaining under this Plan to be paid to a
Beneficiary shall be payable to the executor or personal representative of the
Participant's estate.




10.4
            Doubt
      as to Beneficiary




If the
Committee has any doubt as to the proper Beneficiary to receive payments
pursuant to this Plan, it shall have the right to withhold payments until the
matter is resolved to the Committee's satisfaction.




10.5
            Discharge
      of Obligations




The
payment of benefits under this Plan to a Beneficiary shall fully and completely
discharge all Employers and the Committee from all further obligations under
this Plan with respect to the Participant and any other
Beneficiary.




11.
            Termination;
      Amendment or Modification




11.1
            Termination




Although
each Employer anticipates that it will continue this Plan for an indefinite
period of time, it reserves the right to terminate this Plan at any
time.  Upon termination, the vested Account Balances of the affected
Participants shall be paid to the extent permissible under the requirements of
Code Section 409A.




11.2
            Amendment




The
Company may, at any time, amend or modify this Plan in whole or in part;
provided, that no amendment or modification shall decrease or restrict the value
of a Participant's Account Balance in existence at the time the amendment or
modification is made, calculated as if the Participant had experienced a
Termination of Employment as of the effective date of the amendment or
modification or, if the amendment or modification occurs after the date upon
which the Participant was eligible to Retire.  The amendment or
modification of this Plan shall not affect any Participant or Beneficiary who
has become entitled to the payment of benefits under this Plan as of the date of
the amendment or modification.




11.3
            Effect
      of Payment




The full
payment of the applicable benefit under Article 5, 6, 7 or 8 or Section 9.2
shall completely discharge all obligations of the Employers and the Committee to
a Participant and his or her designated Beneficiaries under this
Plan.




12.
            Administration




12.1
            Committee
      Duties




This Plan
shall be administered by a Committee, which shall consist of the Board, or such
committee as the Board may appoint.  Members of the Committee may be
Participants.  The Committee shall have the discretion and authority,
subject to Section 11.2, to make amendments to this Plan, or in its
discretion it may recommend amendments to the Board for its
action.  The Committee shall have the discretion and authority to
make, amend, interpret and enforce appropriate rules and regulations for the
administration of this Plan and to decide or resolve, in its discretion, any and
all questions involving interpretation of this Plan.  Any individual
serving on the Committee who is a Participant shall not vote or act on any
matter relating solely to himself or herself.  When making a
determination or calculation, the Committee shall be entitled to rely on
information furnished by a Participant or the Company.




12.2
            Administrative
      Committee; Agents




The
Committee may, from time to time, appoint an Administrative Committee and
delegate to the Administrative Committee such duties and responsibilities (but
not the authority to amend this Plan) with respect to this Plan as the Committee
may determine.  The Committee, and the Administrative Committee, may
employ agents and delegate to them such duties as either Committee sees fit
(including acting through a duly appointed representative) and may from time to
time consult with counsel who may be counsel to the Company.




12.3
            Binding
      Effect of Decisions




The
decisions or actions of the Committee, and of the Administrative Committee, with
respect to the administration, interpretation and application of this Plan and
the rules and regulations hereunder shall be final and conclusive and shall be
binding on all persons having any interest in this Plan.




12.4
            Indemnity
      of Committee and Administrative
Committee




The
Company shall indemnify and hold harmless the members of the Committee and the
Administrative Committee, and any agent or employee to whom the duties of the
Committee or the Administrative Committee may be delegated, against any and all
claims, losses, damages, expenses or liabilities arising from any action or
failure to act with respect to this Plan, except in the case of willful
misconduct by the Committee, the Administrative Committee or any of their
members or any such agent or employee.




13.
            Other
      Benefits and Agreements




The
benefits provided for a Participant and Participant's Beneficiary under this
Plan are in addition to any other benefits available to such Participant under
any other plan or program of the Participant's Employer.  This Plan
shall not supersede, modify or amend any other such plan or program except as
may otherwise be expressly provided.




14.
            Claims
      Procedures




14.1
            Filing
      a Claim




A
Participant or a Beneficiary, or the authorized representative of either (the
"Claimant"), who believes that he or she is then entitled to benefits hereunder
may file a written claim for such benefits with the Vice President of Human
Resources.  The Vice President of Human Resources may prescribe a form
for filing such claims, and, if it does so, a claim will not be deemed properly
filed unless such form is used, but the Secretary of the Vice President of Human
Resources shall provide a copy of such form to any person whose claim for
benefits is improper solely for this reason.




14.2
            Claim
      Review




Claims
that are properly filed will be reviewed by the Vice President of Human
Resources, which will make its decision with respect to such claim and notify
the Claimant in writing of such decision within 90 days (45 days in the
case of a claim related to a Participant's Disability) after its receipt of the
written claim; provided that the 90-day period (45-day period in the case of a
claim related to a Participant's Disability) can be extended for up to an
additional 90 days (30 days in the case of a claim related to a Participant's
Disability) if the Vice President of Human Resources determines that special
circumstances require an extension of time to process the claim and the Claimant
is notified of the extension, and the reasons therefor, prior to the
commencement of the extension.  If the claim is wholly or partially
denied, the written response to the Claimant shall include:




(a)
            the
      specific reason or reasons for the
denial;




(b)
            reference
      to the specific Plan provisions on which the denial is
    based;




(c)
            a
      description of any additional information necessary for the Claimant to
      perfect his or her claim and an explanation why such information is
      necessary;




(d)
            a
      description of this Plan's claim appeal procedure (and the time limits
      applicable thereto), as set forth in
  Section 14.3;




(e)
            a
      statement of the Claimant's right to bring a civil action under ERISA
      following an adverse determination on appeal;
  and




(f)
            in
      the case of an adverse benefit determination related to the Participant's
      Disability:




(i)
            if
      an internal rule, guideline, protocol or other similar criterion was
      relied upon in making the adverse determination, either the specific rule,
      guideline, protocol or other similar criterion; or a statement that such a
      rule, guideline, protocol or similar criterion was relied upon in making
      the adverse determination and that a copy of such rule, guideline,
      protocol or other criterion will be provided free of charge to the
      Claimant upon request; or




(ii)
            if
      the adverse benefit determination is based on a medical necessity or
      experimental treatment or similar exclusion or limit, either an
      explanation of the scientific or clinical judgment for the determination,
      applying the terms of this Plan to the Claimant's medical circumstances,
      or a statement that such explanation will be provided free of charge upon
      request.




14.3
            Appeal




If the
claim is denied in whole or in part, the Claimant may appeal such denial by
filing a written request for appeal with the Administrative Committee within
60 days (180 days in the case of a claim related to the Participant's
Disability) of receiving written notice that the claim has been
denied.  Such written request for appeal should include:




(a)
            a
      statement of the grounds on which the appeal is
  based;




(b)
            reference
      to the specific Plan provisions that support the
  claim;




(c)
            the
      reason or argument why the Claimant believes the claim should be granted
      and evidence supporting each reason or argument;
  and




(d)
            any
      other comments, documents, records or other information relating to the
      claim that the Claimant wishes to
include.




Appeals
will be considered by the Administrative Committee, which will take into account
all comments, documents, records and other information submitted by the Claimant
relating to the claim, without regard to whether such information was submitted
or considered by the Vice President of Human Resources in making its initial
determination.  The Administrative Committee will make its decision
with respect to any appeal, and notify the Claimant in writing of such decision,
within 60 days (45 days in the case of a claim related to the
Participant's Disability) after the its receipt of the written request for
appeal; provided that the 60-day period (45-day period in the case of a claim
related to the Participant's Disability) can be extended for up to an additional
60 days (45 days in the case of a claim related to the Participant's
Disability) if the Administrative Committee determines that special
circumstances require an extension of time to process the appeal and the
Claimant is notified of the extension, and the reasons therefor, prior to the
commencement of the extension.  During the appeal period, the Claimant
will be provided, upon request and free of charge, reasonable access to, and
copies of, documents, records and other information relevant to his or her
claim.




In the
event the claim is denied on appeal, the written denial will
include:




(a)
            the
      specific reason or reasons for the
denial;




(b)
            reference
      to the specific Plan provisions on which the denial is
    based;




(c)
            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 his or her
claim;




(d)
            a
      statement of the Claimant's right to bring a civil action under ERISA;
      and




(e)
            in
      the case of an adverse benefit determination related to the Participant's
      Disability:




(i)
            if
      an internal rule, guideline, protocol or other similar criterion was
      relied upon in making the adverse determination, either the specific rule,
      guideline, protocol or other similar criterion; or a statement that such a
      rule, guideline, protocol or similar criterion was relied upon in making
      the adverse determination and that a copy of such rule, guideline,
      protocol or other criterion will be provided free of charge to the
      Claimant upon request; or




(ii)
            if
      the adverse benefit determination is based on a medical necessity or
      experimental treatment or similar exclusion or limit, either an
      explanation of the scientific or clinical judgment for the determination,
      applying the terms of this Plan to the Claimant's medical circumstances,
      or a statement that such explanation will be provided free of charge upon
      request.




14.4
            Standard
      of Review




Any
further review, judicial or otherwise, of the Administrative Committee's
decision on the Claimant's claim will be limited to whether, in the particular
circumstances, the Administrative Committee abused its discretion.  In
no event will such further review, judicial or otherwise, be on a de novo basis,
because the Administrative Committee has discretionary authority to determine
eligibility for benefits and to construe and interpret the terms and provisions
of this Plan.




14.5
            Legal
      Action




Compliance
with the foregoing provisions of this Article 14 is a mandatory
prerequisite to a Claimant's right to commence any legal action with respect to
any claim for benefits under this Plan.  If a Claimant wishes to file
a court action after exhausting the foregoing procedures, the Claimant must file
such action in a court of competent jurisdiction within 180 days after the date
of the Committee's written denial of the appeal.  Court actions may
not be commenced after such 180-day period.




15.
            Trust




15.1
            Establishment
      of the Trust




Each
Employer shall at least annually transfer to the Trust such assets as it
determines, in its sole discretion, are necessary to provide, on a present value
basis, for its liabilities under this Plan.




15.2
            Relationship
      of This Plan and the Trust




The
provisions of this Plan shall govern the rights of a Participant to receive
distributions pursuant to this Plan.  The provisions of the Trust
shall govern the rights of the Employers, Participants and the creditors of the
Employers to the assets transferred to the Trust.  Each Employer shall
remain liable to carry out its obligations under this Plan.




15.3
            Distributions
      from the Trust




Each
Employer's obligations under this Plan may be satisfied with Trust assets
distributed pursuant to the terms of the Trust, and any such distribution shall
reduce pro tanto the Employer's obligations under this Plan.




16.
            Miscellaneous




16.1
            Status
      of Plan




This Plan
is intended to be a plan that is not qualified within the meaning of Code
Section 401(a) and that "is unfunded and is maintained by an employer
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees" within the meaning of ERISA
Sections 201(2), 301(a)(3) and 401(a)(1).  This Plan shall be
administered and interpreted in a manner consistent with that
intent.




16.2
            Unsecured
      General Creditor




Participants
and their Beneficiaries, heirs, successors and assigns shall have no legal or
equitable rights, interests or claims in any property or assets of any Employer
or of the Trust.  For purposes of the payment of benefits under this
Plan, any and all of an Employer's assets including any assets of the Trust
shall be, and remain, the general, unpledged unrestricted assets of the
Employer.  An Employer's obligation under this Plan shall consist
solely of an unfunded and unsecured promise to pay money in the
future.




16.3
            Employer's
      Liability




An
Employer's liability for the payment of benefits shall be defined only by this
Plan.  No Employer shall have any obligation to a Participant under
this Plan except as expressly provided in this Plan.




16.4
            Nonassignability




Neither a
Participant nor a Beneficiary nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise
encumber, transfer, hypothecate, alienate or convey in advance of actual receipt
the amounts, if any, payable hereunder, or any part thereof.  All of
such rights are expressly declared to be unassignable and
nontransferable.  None of the amounts payable under this Plan shall,
prior to actual payment, be subject to seizure, attachment, garnishment or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, be transferable by
operation of law in the event of a Participant's or any other person's
bankruptcy or insolvency or be transferable to a spouse as a result of a
property settlement or otherwise, except to the extent required by a court order
as described in Section 16.13 of this Plan.




16.5
            Not
      a Contract of Employment




The terms
and conditions of this Plan shall not be deemed to constitute a contract of
employment between any Employer and the Participant.  Such employment
is an "at will" employment relationship that can be terminated at any time for
any reason, or for no reason, with or without cause, and with or without notice,
unless expressly provided otherwise in a written employment
agreement.  Nothing in this Plan shall be deemed to give a Participant
the right to be retained in the service of any Employer or to interfere with the
right of any Employer to discipline or discharge the Participant at any
time.




16.6
            Furnishing
      Information




A
Participant or Beneficiary shall cooperate with the Committee by furnishing any
and all information requested by the Committee and shall take such other actions
as may be requested in order to facilitate the administration of this Plan and
the payments of benefits hereunder, including, but not limited to, taking such
physical examinations as the Committee may deem necessary.




16.7
            Captions




The
captions of the articles, sections and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or construction of
any of its provisions.




16.8
            Governing
      Law




Subject
to ERISA, the provisions of this Plan shall be construed and interpreted
according to the internal laws of the State of Washington without regard to its
conflicts of laws principles.




16.9
            Notice




Any
notice or filing required or permitted to be given to the Committee under this
Plan shall be sufficient if in writing and hand-delivered, or sent by registered
or certified mail, to the address below:




Vice
President, Human Resources




Puget
Sound Energy, Inc.




P.O. Box
90868




Bellevue,
WA 98009-0868




Such
notice shall be deemed given as of the date of delivery or, if delivery is made
by mail, as of the date shown on the postmark on the receipt for registration or
certification.  Any notice or filing required or permitted to be given
to a Participant under this Plan shall be sufficient if in writing and
hand-delivered, or sent by mail, to the last known address of the
Participant.




16.10
            Successors




The
provisions of this Plan shall bind and inure to the benefit of the Company, the
Employers and their successors and assigns and the Participant and the
Participant's designated Beneficiaries.




16.11
            Validity




If any
provision of this Plan shall be found to be illegal or invalid for any reason,
such illegality or invalidity shall not affect the remaining parts hereof, but
this Plan shall be construed and enforced as if such illegal or invalid
provision had never been inserted herein.




16.12
            Incompetence




If the
Committee determines in its discretion that a benefit under this Plan is to be
paid to a minor, a person declared incompetent or to a person incapable of
handling the disposition of that person's property, the Committee may direct
payment of such benefit to the guardian, legal representative or person having
the care and custody of such minor, incompetent or incapable
person.  The Committee may require proof of minority, incompetence,
incapacity or guardianship, as it may deem appropriate, prior to distribution of
the benefit.  Any payment of a benefit shall be a payment for the
account of the Participant and the Participant's Beneficiary, as the case may
be, and shall be a complete discharge of any liability under this Plan for such
payment amount.




16.13
            Court
      Order




The
Committee is authorized to make any payments directed by court
order.  If a court determines that a spouse or former spouse of a
Participant has an interest in the Participant's benefits under this Plan in
connection with a property settlement or otherwise, the Committee, in its sole
discretion, shall have the right, notwithstanding any election made by a
Participant, to immediately distribute the spouse's or former spouse's interest
in the Participant's benefits under this Plan to that spouse or former
spouse.





16.14
            Insurance




The
Employers, on their own behalf or on behalf of the Trustee, and, in their sole
discretion, may apply for and procure insurance on the life of any Participant,
in such amounts and in such forms as the Trust may choose.  The
Employers or the Trustee, as the case may be, shall be the sole owner and
beneficiary of any such insurance.  The Participant shall have no
interest whatsoever in any such policy or policies, and at the request of the
Employers shall submit to medical examinations and supply such information and
execute such documents as may be required by the insurance company or companies
to whom the Employers have applied for insurance.




16.15
            Compliance
      with Code Section 409A




The Plan
is intended to comply with the requirements of Code Section 409A (including
current IRS guidance) and to conform to the current operation of the
Plan.  Notwithstanding any provision to the contrary, the Plan shall
be interpreted, operated and administered in a manner consistent with this
intention, so as to avoid the predistribution inclusion in income of amounts
deferred under the Plan and the imposition of any additional tax or interest
thereon.  In addition, the Plan shall be deemed to be amended, and any
deferrals and distributions hereunder shall be deemed to be modified, to the
extent permitted by and necessary to comply with Code Section 409A and to avoid
or mitigate the imposition of additional taxes under Code Section
409A.  Notwithstanding the foregoing, no provision of the Plan shall
be interpreted or construed to transfer any liability for failure to comply with
Code Section 409A from a Participant or any other individual to the Company
or any of its affiliates, employees or agents.




[Signature
appears on following page.]

















IN
WITNESS WHEREOF, the Company has signed this Plan document as of the date
indicated below.
  PUGET
SOUND ENERGY, INC.
 
 By: /s/ Jennifer L.
O’Connor
  Title:
Senior Vice President, General Counsel, Coporate Secretary, and Chief Ethics
& Compliance Officer
  Dated:
December 19, 2008