exhibit10-23.htm


    
      

      

    

     

    Exhibit
      10.23


     

                          January
      1996

    


    MERIT
      INCENTIVE SUPPLEMENTAL
      RETIREMENT INCOME PLAN

    


    


    This
      plan constitutes an agreement
      between Tennessee Valley Authority (TVA) and its managerial employees who are
      subject to it.  The primary purpose of this plan is to provide
      managerial employees with income to supplement retirement benefits received
      from
      the TVA Retirement System, the Civil Service Retirement System, or the Federal
      Employees Retirement System.  The plan also provides for hardship
      withdrawals subject to conditions set forth below.

    


    Section
      1  Definitions

    "Manager"
      includes any officer or
      employee of TVA who at any time during the fiscal year is employed in a Vice
      President or Senior Manager Pay Group position in TVA's Manager and Specialist
      Schedule or any other employee designated by the Board, but not including the
      members of the TVA Board of Directors.

    "Interest"
      is the computed average
      interest rate payable by the U.S. Treasury upon its total marketable public
      obligations as of the beginning of the fiscal year as calculated by the United
      States Department of the Treasury pursuant to Section 15d of the TVA
      Act.

    "Account"
      includes each calendar year
      subaccount within the account.

    "Retirement"
      includes termination of
      service for any reason by a TVA manager who has five years of TVA service or
      without regard to length of service if the manager is receiving a disability
      retirement allowance under

     


    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    


    the
      TVA
      Retirement System or a disability retirement annuity under the Civil Service
      Retirement System or the Federal Employees Retirement System.

    "Board"
      means the Board of Directors of
      TVA.

    "Committee"
      means a group of three
      persons consisting of the Senior Vice President, Human Resources, who will
      chair
      the Committee, and two additional members appointed by the Board.

    "Return"
      means the change in the value
      of the mutual fund or funds designated by the manager, as calculated by the
      recordkeeper.

    "Recordkeeper"
      means the organization
      selected by the Senior Vice President, Human Resources, to provide and
      administer the investment return alternatives from which the managers may
      choose.

    


    Section
      2  Retirement Credits

    
      	
              A.

            	
              There
                shall be established for each manager an account on TVA's books in
                the
                name of the manager.  Each manager's account may consist of a
                1979-1980 Subaccount, and such additional calendar year subaccounts
                as TVA
                may establish from time to time.

            


    

    
      	
              B.

            	
              From
                time to time the Board or the Board's designee, in the sole discretion
                of
                the Board or its designee, shall determine the amount, if any, to
                be
                credited to each individual manager's account.  Amounts so
                credited prior to January 1, 1981, shall be credited to the 1979-1980
                Subaccount.  Amounts so credited during subsequent calendar
                years shall be credited to the respective calendar year
                subaccount.

            


    

    



    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    


    
      	
              C.

            	
              The
                Board (or its designee) may consider such factors as the following
                in
                determining the amounts to be
                credited:

            


    

    
      	
               

            	
              1.

            	
              meritorious
                performance;

            


    

    
      	
               

            	
              2.

            	
              the
                feasibility of providing a basic management-wide pension credit,
                taking
                into account each manager's basic
                salary;

            


    

    
      	
               

            	
              3.

            	
              providing
                TVA managers with total compensation equivalent to prevailing rates
                in
                corporate, professional, and other public
                organizations;

            


    

    
      	
               

            	
              4.

            	
              the
                need to use pension credits for recruitment
                purposes;

            


    

    
      	
               

            	
              5.

            	
              lost
                annual leave; and

            


    

    
      	
               

            	
              6.

            	
              such
                other factors as may be deemed
                appropriate.

            


    

    
      	
              D.

            	
              Interest
                on the balance of each subaccount in each manager's account shall be
                credited to each subaccount at the end of each month through
                March 31, 1996, and at the end of each business day
                thereafter.

            


    

    
      	
              E.

            	
              Beginning
                effective April 1, 1996, in lieu of the interest provided in 2.D
                above, each manager may elect to have all or a portion of their account
                adjusted by the return as of the end of each business day in accordance
                with the funds selected by the manager under procedures established
                by the
                Recordkeeper, provided, however that each manager who retired prior
                to
                January 1, 1996, and who is owed payments under this plan shall
                continue to receive payments calculated based on accrued interest
                and not
                return.  TVA is not responsible for the effect of decisions by
                any manager who elects to receive the return provided
                herein.  Such decisions shall be the sole responsibility of the
                manager.

            


    

    


    



    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    


    Section
      3  Benefits

    The
      total amount credited to each
      manager's account or accounts shall be paid by TVA in the following
      manner.

    
      	
              A.

            	
              Retirement

            


    

    
      	
               

            	
              1.

            	
              Upon
                a manager's retirement the balance of each of the manager's subaccounts
                shall, as elected by the manager
                pursuant to section 3.A.2., be paid to the manager in a
                lump sum or in 5, 10, or 15 annual
                installments.

            


    

    
      	
               

            	
              a.

            	
              As to the subaccounts
                the manager has elected to receive in a lump sum, the balance in
                each
                subaccount, including all accrued interest and return, shall be paid
                to
                the manager not later than the last day of the first full calendar
                month
                following retirement.

            


    

    


    
      	
               

            	
              b.

            	
              As to the subaccounts
                the manager has elected to receive in installments, the balance
                in each subaccount shall be paid in the following
                manner.  On the last day of the first full calendar month
                following retirement the manager shall be paid a sum equal to balance
                in
                the subaccount divided by the number of annual installments elected
                by the
                manager pursuant to section 3.A.1 including all accrued interest and
                return.  Further installments shall be paid on the same date in
                each of the succeeding years.  The amount of each installment
                shall be determined by dividing the balance
                in

            


    

    



    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    


    the
      subaccount, including all accrued interest and return as of that date, by the
      number of payments remaining to be made.

    


    
      	
               

            	
              2.

            	
              A
                manager's election of a retirement benefit pursuant to section 3.A.1.a.
                or
                3.A.1.b. filed before January 1, 1981, shall apply to amounts
                credited to the manager's 1979-1980 Subaccount and is irrevocable
                and
                effective pursuant to the terms of this plan in effect at the time
                the
                election was filed.  Effective on and after January 1,
                1981, prior to TVA crediting any amount to a manager's current calendar
                year subaccount, each manager may irrevocably elect in writing to
                have the
                balance of the manager's current year subaccount paid to the manager
                pursuant to either section 3.A.1.a. or 3.A.1.b.  In the absence
                of an election, the balance of the manager's subaccount shall be
                paid
                pursuant to section 3.A.1.a.  Notwithstanding any other
                provision of this plan, each manager as of January 1, 1996, may make
                a one-time irrevocable election in accordance with the conditions
                established by the Senior Vice President, Human Resources, to change
                any
                election of retirement benefit executed prior to that
                date.

            


    

    
      	
               

            	
              3.

            	
              Any
                manager whose account balance is $25,000 or less at the time he or
                she
                retires shall be paid that balance in a lump sum not later than the
                last
                day of the first full calendar month following
                termination.

            


    

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      	
              B.

            	
              Termination Prior to Retirement
                - Upon the termination for any reason (other than disability) of
                a manager
                who does not have five years of TVA service, the balance of the manager's
                account, including accrued interest and return, shall be paid to
                the
                manager in a lump sum not later than the last day of the first full
                calendar month following the
                termination.

            


    

    
      	
              C.

            	
              Death Benefits
                - Upon receipt of proper proof of the death of a manager who shall
                have
                died in service, or a former manager who had been receiving payments
                under
                section 3.A.1.b. above, the balance remaining in the manager's account,
                including accrued interest and return, shall be paid in a lump sum
                to such
                person or persons, if any, as the manager shall have nominated by
                written
                designation filed with the Treasurer prior to the manager's
                death.  In the absence of any designation of beneficiary,
                payment shall be made in the following order of
                precedence:

            


    

    
      	
               

            	
              1)

            	
              to
                the widow or widower of the
                manager,

            


    

    
      	
               

            	
              2)

            	
              if
                there is no widow or widower, to the child or children of the manager
                and
                descendants of deceased children by
                representation,

            


    

    
      	
               

            	
              3)

            	
              if
                none of the above, to the parents of the manager or the survivor
                of
                them,

            


    

    
      	
               

            	
              4)

            	
              if
                none of the above, to the duly appointed legal representative of
                the
                estate of the manager,

            


    

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      	
               

            	
              5)

            	
              if
                none of the above, to the person or persons entitled to it under
                the laws
                of the domicile of the manager at the time of
                death.

            


    

    Payment
      shall be made on the last day of the first full calendar month following the
      manager's death.

    
      	
              D.

            	
              Financial
                Hardship - In the event of a financial hardship, a manager may apply
                to withdraw all or part of the total amount credited to the Manager's
                account.  The withdrawal shall be granted upon a determination
                of the Committee, in the Committee's sole discretion that the amount
                withdrawn is reasonably required to satisfy the hardship
                need.  This determination shall be final and conclusive as to
                all parties.  A financial hardship shall mean immediate and
                heavy financial needs occurring in the personal affairs of a manager
                such
                as:

            


    

    
      	
               

            	
              1)

            	
              need
                for housing;

            


    

    
      	
               

            	
              2)

            	
              need
                for the education of the manager, the manager's spouse, or
                children;

            


    

    
      	
               

            	
              3)

            	
              need
                due to destruction of property;

            


    

    
      	
               

            	
              4)

            	
              need
                due to accident, sickness, or temporary disability affecting the
                manager
                or any member of the manager's immediate
                family;

            


    

    
      	
               

            	
              5)

            	
              need
                due to a death in the manager's immediate
                family.

            


    

    Financial
      hardship withdrawals will be credited against the subaccounts in a manager's
      account in chronological order, starting with the earliest
      subaccount.

    



    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    


    
      	
              E.

            	
              Lump-Sum
                Cash Out of Certain Accounts - TVA may in its sole discretion pay
                any
                retired manager whose account balance on January 1, 1996, is $25,000
                or less, the entire amount of that balance in a lump
                sum.

            


    

    


    Section
      4  Administration of Plan

    
      	
              A.

            	
              The
                Board shall have control over and responsibility to oversee the general
                administration of the plan; the Board or the Board's designee shall
                approve all credits to managers' accounts.  The Board shall
                authorize all amendments to the plan.  The Committee shall
                approve all hardship withdrawals.

            


    

    
      	
              B.

            	
              As
                requested, each Vice President shall annually recommend amounts to
                be
                credited to the account of each manager within that office, based
                on the
                factors listed in 2.C. above.  In making such recommendations,
                Vice Presidents shall describe the basis for
                them.

            


    

    
      	
              C.

            	
              The
                Treasurer shall maintain an account in the name of each manager and
                credit
                to each account interest, return, and such other amounts as may be
                approved.  The Treasurer shall make payments to managers and
                beneficiaries pursuant to this
                plan.

            


    

    
      	
              D.

            	
              The
                Senior Vice President, Human Resources, shall have sole and exclusive
                responsibility for resolving any dispute regarding this plan as it
                affects
                any manager below the level of Vice President.  The Board shall
                have exclusive responsibility for resolving any such dispute as it
                affects
                any Vice President.  The decisions of the Board or the Senior
                Vice President, Human Resources, as appropriate, in these matters
                and the
                decision of the Board or the
                Board's

            


    

    



    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    


    designee
      in all other matters pertaining to the plan's operation shall be final and
      conclusive as to all parties.

    
      	
              E.

            	
              As
                necessary, the Office of the General Counsel shall provide legal
                advice
                pertaining to the plan.

            


    

    


    Section
      5  Restoration to Service After Retirement

    If
      a manager who has retired is
      restored to full-time service
      with TVA, the manager's pension payments under section 3.A. of this plan shall
      be suspended and the amount, if any, remaining in that manager's account shall
      continue to accrue interest or return, and shall be credited with any subsequent
      amounts that may be approved, until that manager's termination from
      service.  At such subsequent retirement, pension payments under 3.A.
      shall resume.  Part-time employment, or employment under a personal
      services contract, shall not affect the payment of a manager's benefits under
      section 3.A.

    


    Section
      6  Assignments Prohibited

    No
      transfer, assignment, pledge,
      seizure, or other voluntary or involuntary alienation or encumbrance of any
      benefit provided under the plan will be permitted or recognized other than
      as
      specifically provided in this plan.  In the event of any such
      attempted alienation or encumbrance (including specifically, but without
      limitation, any attempted attachment, levy, execution, garnishment, or other
      legal process affecting such benefit), the Board may in its uncontrolled
      discretion declare the said benefit to be temporarily or permanently forfeited
      by the manager and, in lieu of paying the same to or for the manager, may in
      its
      uncontrolled


    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    


    discretion
      pay or apply such benefit temporarily or permanently to or for the use of any
      persons who are dependents of, or are related by blood, by marriage, or by
      adoption to, such manager, or the Board may in its uncontrolled discretion
      cause
      such benefit to revert to the general funds of TVA.

    TVA
      may offset amounts owed to it by a
      manager against amounts payable to a manager under this plan.

    


    Section
      7  No Trust is Created

    No
      trust in favor of any manager is
      created by this plan, and in the absence of any attempted assignment prohibited
      under section 6, managers shall have the rights of general creditors of TVA
      with
      respect to amounts credited their accounts established by this
      plan.

    


    Section
      8  Amendments to Plan

    This
      plan may be amended as authorized
      by the Board from time to time as it deems appropriate.

    


    


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