ex10_5.htm


    
      

    

    Exhibit
10.5

     

    January
2009

    


    TVA
LONG-TERM

    DEFERRED
COMPENSATION PLAN

    


    


    Purpose:

    


    The TVA
Long Term Deferred Compensation Plan (“Plan”) is designed to provide long-term
incentives to executives to encourage them to stay with TVA and to provide
competitive levels of total compensation to such executives.  This
Plan will also assist in the recruitment of top executive talent for TVA by
providing an opportunity for significant additional tax deferred
compensation.  As in other corporations, deferred compensation can be
an integral part of a total compensation package.

    


    Eligibility:

    


    The Board
of Directors, the Chief Executive Officer (“CEO”), or their delegatees, approve
the participants in the Plan in accordance with then existing delegations of
authority (“Participants”).

    


    Procedures:

    


    
      	
              •

            	
              TVA
      enters into a deferral agreement with each Participant (a “Deferral
      Agreement”) under which deferred compensation credits (“Credits”) are made
      to an account in the Participant’s name (each, an
      “Account”).  Credits are made on an annual or other periodic
      basis for an established period of time, as specified in the Deferral
      Agreement, after which the Participant vests in the full amount in the
      Participant’s Account, including interest or return as provided
      below.

            


    

    


    
      	
              •

            	
              The
      Participant must be employed with TVA at the time of the expiration of the
      Deferral Agreement, or no payment under this Plan will be made by TVA to
      the Participant pursuant to the Deferral Agreement, and all Credits, and
      any interest or return on such Credits, in the Participant’s Account will
      be forfeited.  This will not apply in the event TVA terminates
      the Participant’s employment without cause through no act or delinquency
      of the Participant or in the event of the Participant’s death in service,
      in which cases the Participant will become vested in the Account balance
      at the time of termination or death.  In the event of death in
      service, the Participant’s Account balance shall be paid in a lump sum to
      the Participant’s designated beneficiary, or in the absence of any such
      designation, to the Participant’s estate, by the last day of the first
      full calendar month following the receipt of proper proof of the
      Participant’s death.

            


    

    


    
      	
              •

            	
              Each
      Participant’s Account will receive interest on the same basis as interest
      is calculated under the TVA Deferred Compensation Plan.  In lieu
      of interest, each Participant may elect to have all or a portion of the
      Participant’s Account adjusted by the return tied to one or more mutual
      funds selected by the Participant under the same conditions as are
      contained in the TVA Deferred Compensation
Plan.

            


    


    
      
         


      

      
        1

        
          

        

      

      
         


      

    


    
      	
              •

            	
              The
      entire vested amount in the Participant’s Account will be paid to the
      Participant in a lump sum within sixty (60) days following the expiration
      of the Deferral Agreement, unless the Participant elects, within thirty
      (30) days following the date the Deferral Agreement is entered into, to
      further defer receipt of vested amounts by having the vested Account
      balance upon expiration of the Deferral Agreement credited to an account
      in the Participant’s name in the TVA Deferred Compensation
      Plan.  Deferred amounts will be paid out upon the Participant’s
      Separation from Service in either a lump sum or in 5 or 10 annual
      installments, as chosen by the Participant at the time of
      election.

            


    

    


    For
purposes of the above paragraph, Separation from Service means the term
“separation from service” as defined in 26 CFR §1.409A-1(h) of the Internal
Revenue Code section 409A final regulations.

    


    
      	
              •

            	
              Under
      certain Deferral Agreements with Participants in key positions within TVA,
      TVA will vest the Participant in certain Credits at the time the Credit is
      made to the Participant’s Account.  In the event a Credit vests
      upfront on the effective date of the Deferral Agreement or within twelve
      (12) months following the effective date of the Deferral Agreement, TVA
      will specify within the terms of the Deferral Agreement how the Credit(s)
      will be paid to the Participant (lump sum within sixty (60) days following
      the expiration of the Deferral Agreement or upon Separation from Service
      in either a lump sum or in 5 or 10 annual installments), and the
      Participant shall not have a deferral election with respect to such
      Credits.

            


    

    


    Administration:

    


    
      	
              •

            	
              Approvals
      regarding the terms of Deferral Agreements under the Plan for each
      Participant, such as the duration of the Deferral Agreements and the
      amount and number of Credits, will be made in accordance with the TVA
      Compensation Plan and the delegations
  thereunder.

            


    

    


    
      	
              •

            	
              The
      Vice President, Human Resources, shall have sole and exclusive
      responsibility for resolving any dispute regarding this Plan or a Deferral
      Agreement.  The decisions of the Vice President, Human
      Resources, in all matters pertaining to the Plan’s operation shall be
      final and conclusive as to all
parties.

            


    

    


    
      	
              •

            	
              TVA
      shall maintain each Participant’s Account and credit to each Account the
      Credits, interest, return, and other such amounts as may be approved or
      elected pursuant to this Plan.  TVA shall make payments to
      Participants (and their beneficiaries, as applicable) pursuant to this
      Plan, applicable Deferral Agreements, and the TVA Deferred Compensation
      Plan.

            


    


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    
      	
              •

            	
              Nothing
      contained in this Plan or any Deferral Agreement shall be construed as
      conferring upon any Participant the right to continue in the employment of
      TVA as an executive or employee or in any other
  capacity.

            


    

    


    
      	
              •

            	
              Nothing
      contained in this Plan or any Deferral Agreement and no action taken
      pursuant to the provisions of this Plan or any Deferral Agreement shall
      create or be construed to create a trust of any kind, or a fiduciary
      relationship between TVA and any Participant, designated beneficiary or
      any other person.

            


    

    


    
      	
              •

            	
              No
      transfer, assignment, pledge, seizure, or other voluntary or involuntary
      alienation or encumbrance of any benefit provided under this Plan or any
      Deferral Agreement will be permitted or recognized other than as
      specifically provided in this Plan.

            


    

    


    
      	
              •

            	
              The
      above paragraph notwithstanding, TVA may offset amounts owed to it by a
      Participant against any amounts payable to a Participant under this Plan
      or any Deferral Agreement.

            


    

    


    Amendments:

    


    This Plan
may be amended or terminated by the Board, or its delegatee, at any time as it
deems appropriate without the consent of any Participant, beneficiary, or other
person; provided, however, that if the Board, or its delegatee, elects to
terminate the Plan, any Credits already made under then current Deferral
Agreements to Participants’ Accounts as of the date of termination, including
any interest and/or return as calculated pursuant to this Plan, will vest and be
paid to the Participants either (i) in a lump sum within sixty (60) of the
termination of the Plan or (ii) pursuant to the Participant’s valid deferral
election, as appropriate.

    


    Compliance
with Section 409A:

    


    At all
times, to the extent Internal Revenue Code Section 409A and its implementing
regulations (collectively, “Section 409A”) applies to amounts deferred under
this Plan: (a) this Plan and all Deferral Agreements shall be operated in
accordance with the requirements of Section 409A; (b) any action that may be
taken (and, to the extent possible, any action actually taken) by the Board, or
its delegatee, and the Participants, shall not be taken (or shall be void and
without effect), if such action violates the requirements of Section 409A; (c)
any provision in this Plan or a Deferral Agreement that is determined to violate
the requirements of Section 409A shall be void and without effect; and (d) any
provision that is required by Section 409A to appear in this Plan or any
Deferral Agreement that is not expressly set forth shall be deemed to be set
forth herein, and this Plan and such Deferral Agreement shall be administered in
all respects as if such provision were expressly set forth herein.

     

     

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