Document:

PUCT Order on Rehearing

 Exhibit 10(ae) 
 DOCKET NO. 34077 
  

					
	JOINT REPORT AND APPLICATION OF ONCOR ELECTRIC DELIVERY COMPANY AND TEXAS ENERGY FUTURE HOLDINGS LIMITED PARTNERSHIP PURSUANT TO PURA § 14.101	  	§
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	  	 PUBLIC UTILITY COMMISSION

 
 OF TEXAS

ORDER ON REHEARING 
 This Order addresses the Joint Report and Application filed by Texas Energy Future Holdings Limited Partnership (TEF) and Oncor Electric Delivery Company pursuant to PURA1 § 14.101 regarding the merger of TEF with Oncor’s parent,
TXU Corp. As described in the findings of fact and conclusions of law set forth below, the Commission approves TEF and Oncor’s application as modified by the non-unanimous stipulation and agreement filed on October 24, 2007, as modified by
an amendment to the stipulation filed on December 12, 2007. 
 AARP, Chapparal Steel Co., and Nucor Steel – Texas are
the only parties opposed to the Stipulation. Testimony regarding opposition to the Stipulation was presented by AARP and Nucor – Steel at the Commission’s hearing on this proceeding. 

Initially, Alliance for Retail Markets (ARM) and Reliant Energy Retail Services, LLC (RERS) opposed only paragraph 35 of the stipulation,
which provided for a one-time $72 million credit to retail electric providers (REPs) to be refunded to residential customers. However, paragraph 35 was amended by the signatories to address issues raised by RERS and ARM, and by letters filed in this
docket and through statements made on the record during the Commission’s hearing on the merits, ARM and RERS withdrew their opposition to paragraph 35 of the stipulation. Although RERS and the members of ARM have agreed to pass through the REP
credit and no longer oppose paragraph 35, RERS and ARM maintain that the Commission does not have the authority 
  

	1	 Public Utility Regulatory Act, TEX. UTIL. CODE ANN. §§ 11.001-66.017 (Vernon
2007) (PURA). 

  

					
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to bind REPs to pass through the credit to end-use consumers. The Commission determines that the one-time $72 million credit represents a great benefit for Texas retail consumers. The Commission
also finds that the $72 million credit to REPs to be refunded to residential customers does not reflect unreasonable rate discrimination under PURA § 36.003 or a violation of competitive methods required by PURA § 39.001. As such, the
Commission has the authority to approve paragraph 35 of the stipulation, which conditions payment of the credit on a REPs’ agreement to pass the credit through to its retail customers. 

Based on the evidence and testimony presented during hearing, the Commission concludes that the merger fulfills the requirements set
forth in PURA § 14.101. Further, the Commission concludes that the stipulation reached by certain parties in this docket fulfills the standards for approval of non-unanimous stipulation set forth by the Texas Supreme Court in City of El Paso
v. Public Utility Commission.2 Accordingly, the
Commission enters this final order, which approves the application filed by TEF and Oncor and, pursuant to PURA § 39.262(o), binds TEF and Oncor to the commitments set forth in the stipulation. 

I. Findings of Fact 

Procedural History 
  

	1.	On April 25, 2007, TEF and Oncor (collectively Applicants) filed their Joint Report and Application of Oncor Electric Delivery Company and Texas Energy Future
Holdings Limited Partnership Pursuant to Public Utility Regulatory Act Section 14.101 requesting a determination that the merger of TEF with Oncor’s parent, TXU Corp., is consistent with the standards set forth in PURA
§ 14.101(b). 

  

	2.	On May 10, 2007, the Commission granted the following parties’ motions to intervene: Texas Industrial Energy Consumers (TIEC); Steering Committee of Cities
Served by Oncor Electric Delivery Company (Cities); Chapparal Steel Co.; 

  

	2	City of El Paso v. Pub. Util. Comm’n of Tex., 883 S.W.2d 179, 183-84 (Tex. 1994). 

  

					
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Nucor Steel – Texas; Office of Public Utility Counsel (OPC); Texas State Association of Electrical Workers (IBEW); Tex-La Electric Cooperative of Texas, Inc.; and the State of Texas.

  

	3.	On May 24, 2007, the Commission issued Order No. 6, granting the following parties’ motions to intervene: Texas Legal Services Center (TLSC); Texas
Ratepayers’ Organization to Save Energy (Texas ROSE); and Alliance for Retail Markets (ARM). 

  

	4.	On June 13, 2007, the Commission issued Order No. 8, granting the motion to intervene filed by Alliance of TXU/Oncor Customers (ATOC).

  

	5.	On June 19, 2007, the Commission issued Order No. 9, joining TXU Corp. as a necessary party to this proceeding. 

 

	6.	On June 20, 2007, the Commission issued Order No. 10, granting the motion to intervene filed by Reliant Energy Retail Services, LLC (RERS).

  

	7.	On June 25, 2007, the Commission issued an order requesting each interested party to file a list of issues to be addressed by the Commission in this docket.

  

	8.	On July 11, 2007, the Commission issued Order No. 13, granting the motion to intervene filed by Sharyland Utilities, LP. 

 

	9.	On July 27, 2007, the Commission issued an order requesting briefing on certain threshold legal and policy issues. 

 

	10.	On August 6, 2007, briefs regarding the threshold legal and policy issues identified by the Commission were timely filed by the following parties: ATOC, Commission
Staff, Nucor Steel – Texas, TIEC, Applicants, and Cities. 

  

	11.	On August 23, 2007, the Commission issued its preliminary order, identifying issues to be addressed and issues not to be addressed and setting forth the
Commission’s determination on certain threshold legal and policy issues. With respect to the threshold legal and policy issues, the Commission determined that its review of the merger under PURA §§ 14.101 and 39.262(o) is limited in
scope and that the Commission can only enforce the commitments that are directly related to the public utility. 

  

					
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	12.	On September 24, 2007, the Commission issued Order No. 30, granting the late-filed motion to intervene filed by AARP. 

 

	13.	On October 5, 2007, a notice of settlement was filed with the following parties as signatories: Oncor, Commission Staff, OPC, Cities, TIEC, IBEW, and the State of
Texas. Notice of the settlement was provided to all parties in this docket. In light of the settlement, the original hearing on the merits for this docket, scheduled for October 9-12, 2007, was cancelled. 

 

	14.	On October 10, 2007, the merger of TEF with Oncor’s parent, TXU Corp., closed. 

 

	15.	On October 24, 2007, the following parties to this docket filed an executed stipulation and agreement purporting to settle all issues in this docket concerning the
merger: TEF, Oncor, Commission Staff, OPC, TIEC, Cities, State of Texas, IBEW, Texas ROSE, and TLSC (collectively signatories). 

  

	16.	On October 24, 2007, ATOC withdrew as a party from this case. 

  

	17.	On October 24, 2007, Sharyland filed a letter stating it did not oppose the stipulation. 

 

	18.	On December 12, 2007, the signatories to the stipulation filed an amendment to paragraph 35 and Exhibit B of the stipulation. 

 

	19.	By letter filed in this docket and dated December 12, 2007, RERS stated that it would no longer object to the stipulation as RERS’s concerns regarding
paragraph 35 of the stipulation would be addressed by the signatories’ filing of an amended Paragraph 35. 

  

	20.	By letter filed in this docket and dated December 12, 2007, ARM stated that it would no longer oppose paragraph 35 and Exhibit B of the stipulation or pursue
resolution of those issues in this proceeding as the signatories’ proposed changes to paragraph 35 and Exhibit B satisfy the concerns raised by ARM. 

  

					
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	21.	The Commission conducted a hearing on the merits of the stipulation for this docket on December 12, 2007. 

 

	22.	Post-hearing briefs filed by the parties by January 11, 2008 were timely received. 

 

	23.	Tex-La Electric did not take a position either supporting or opposing the stipulation. 

 

	24.	At its January 25, 2008 open meeting, the Commission discussed and rendered its decision in this docket, as set forth in this Order. 

Notice 
  

	25.	Notice of the merger at issue in this proceeding and the events in this docket was provided by first class mail to: (1) all municipalities in Oncor’s service
area; (2) all entities listed in the Commission’s transmission matrix in Commission Staff’s Application to Set 2007 Wholesale Transmission Service Rates for the Electric Reliability Council of Texas, Docket No. 33550 (Mar.
30, 2007); (3) all electric cooperatives and municipally-owned utilities with dually certificated areas with Oncor; (4) all REPs currently certificated by this Commission; and (5) all authorized representatives for parties in
Application of TXU Electric Company for Approval of Unbundled Cost of Service Rate Pursuant to PURA § 39.201 and Commission Substantive Rule 25.344, Docket No. 22350 (Oct. 4, 2001). Further notice of this docket was provided by
publication of an approved notice in local newspapers of general circulation in Oncor’s service territory once a week for two consecutive weeks in accordance with P.U.C. PROC. R. 22.55. 

 

	26.	Notice of the stipulation was provided to all parties in this proceeding and in Commission Staff’s Petition for Review of the Rates of TXU Electric Delivery
Company, Docket No. 34040 (pending). 

 Description of the Transaction 

 

	27.	Oncor is an electric utility and a distribution and transmission utility that operates within the Electric Reliability Council of Texas (ERCOT) pursuant to rates
approved by the Commission and, in certain areas in which Oncor provides service, by municipalities that have retained original jurisdiction. 

  

					
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	28.	In addition to the transmission and distribution services provided within ERCOT, Oncor also provides limited open access wholesale transmission services under tariffs
on file with the Federal Energy Regulatory Commission for certain transactions. 

  

	29.	Oncor is a Delaware limited liability company and is a wholly-owned subsidiary of TXU Corp. 

 

	30.	TEF is a Delaware limited partnership formed for the purpose of effectuating the merger of TEF with Oncor’s parent, TXU Corp. 

 

	31.	TEF is not an electric utility or a transmission and distribution utility. 

 

	32.	TEF is controlled by its sole general partner, Texas Energy Future Capital Holdings LLC, and is owned by its sole general partner and its limited partners.

  

	33.	Upon consummation of the merger, which closed on October 10, 2007, TEF became the owner of all or substantially all of the outstanding common shares of TXU
Corp.3 

 

	34.	Pursuant to the merger agreement governing the merger, Texas Energy Future Merger Sub Corp., a Texas corporation and wholly owned subsidiary of TEF, was merged with and
into TXU Corp., with TXU Corp. continuing as the surviving corporation. 

  

	35.	Upon closing of the merger, each outstanding share of common stock of TXU Corp. was converted into the right to receive $69.25 in cash, without interest and less any
applicable withholding taxes. 

  

	36.	After the closing of the merger, TEF now owns all or substantially all of the outstanding shares of TXU Corp., and Oncor remains a wholly-owned subsidiary of TXU Corp.

  

	3	As a result of the closing of the Transaction, TXU Corp. is now named Energy Future Holdings Corp. Any current references to TXU Corp. in this Order are to EFH Corp.

  

					
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	37.	The change in ownership of TXU Corp.’s stock as a result of the merger did not involve the transfer of any of Oncor’s assets, franchises, or certificates of
convenience and necessity. 

  

	38.	No utility operations were combined or modified as a result of the merger. 

 Stipulation and Agreement 
  

	39.	TEF and Oncor made numerous commitments relating to the merger in their direct and rebuttal testimonies. 

 

	40.	As discussed in finding of fact 15, on October 24, 2007, a stipulation was filed that memorialized the commitments made by TEF and Oncor. 

 

	41.	As discussed in finding of fact 18, the parties to the stipulation filed an amendment to paragraph 35 of the stipulation addressing concerns raised by RERS and ARM.

  

	42.	The commitments made by TEF and Oncor as part of this PURA § 14.101 filing are set forth below in findings of fact 43 through 95. 

 

	43.	Name Change Commitment. On or before closing of the merger, the name of TXU Electric Delivery Company will be changed to Oncor Electric Delivery Company.
Oncor’s logo will be separate and distinct from the logos of the parent, TXU Corp., the retail electric provider, which will retain the name TXU Energy Retail, and the power generation company, which is expected to be renamed with the Luminant
Energy brand. (In fact, the name of TXU Electric Delivery Company was changed to Oncor Electric Delivery Company on April 24, 2007.) TXU Corp. commits to maintaining a name and logo for Oncor that is separate and distinct from the names of TXU
Corp.’s retail electric provider and wholesale generation companies. 

  

	44.	Separate Board Commitment. At closing and thereafter, Oncor will have a separate board of directors that will not include any members from the boards of
directors of TXU Energy Retail or Luminant. This commitment is supplemented by findings of fact 74 and 75. 

  

					
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	45.	Separate Headquarters Commitment. Within a reasonable transition period after closing of the merger, not to exceed six months, Oncor’s headquarters will be
located in a separate building from the headquarters and operations of TXU Energy Retail and Luminant. 

  

	46.	No Transaction-Related Debt at Oncor Commitment. Oncor will not incur, guaranty, or pledge assets in respect of any incremental new debt related to financing the
merger at the closing or thereafter. Oncor’s financial integrity will be protected from the separate operations of TXU Energy Retail and Luminant. This commitment is supplemented by finding of fact 82. 

 

	47.	Debt-to-Equity Ratio Commitment. Oncor’s debt will be limited so that its regulatory debt-to-equity ratio (as determined by the Commission) is at or below
the assumed debt-to-equity ratio established from time to time by the Commission for ratemaking purposes, which is currently set at 60% debt to 40% equity. For ratemaking purposes, in its scheduled rate cases in 2007 and 2008, Oncor will support a
cost of debt that does not exceed Oncor’s actual cost of debt immediately prior to the announcement of the merger. This commitment is supplemented by findings of fact 78, 79, and 80. 

 

	48.	Capital Expenditure Commitment. Following the closing of the merger, Oncor will continue to make capital expenditures consistent with the capital expenditures in
Oncor’s business plan. Total capital spending will depend in part on economic and population growth in Texas, as well as permitting and siting outcomes. However, in any event, over the five years following the year in which closing of the
merger occurs, Oncor will make capital expenditures in connection with its transmission and distribution business in an aggregate amount of more than $3.0 billion. This commitment has been replaced by the provisions of finding of fact 86.

  

	49.	 DSM Commitment. Over the five years following the year in which closing occurs, subsidiaries of TXU Corp. will expend an aggregate of at least
$200 million on demand-side management (DSM) over the amount included by the 

  

					
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Commission in Oncor’s rates. This commitment will approximately double the level of spending on DSM currently included in Oncor’s rates. Oncor will not seek to recover in rates any of
the $200 million in incremental DSM expenditures. This commitment is supplemented by findings of fact 83 and 84. 

  

	50.	Service and Safety Commitment. Oncor will support the inclusion of negotiated commitments with appropriate stakeholders regarding reliability, customer service
and employee safety in any final order regarding the merger issued pursuant to PURA § 14.101. Those negotiated commitments are reflected in findings of fact 88, 89, and 90. 

 

	51.	Rate Case Commitment. If, for any reason, the Commission has not initiated a general rate proceeding for Oncor or its predecessor prior to July 1, 2008,
Oncor will not later than that date file a general rate case consistent with its currently effective settlement agreement with certain municipalities. 

  

	52.	Continued Ownership Commitment. TEF will hold a majority of its ownership interest in Oncor, in the current regulatory system, for a period of more than five
years after the closing date of the merger. 

  

	53.	Holding Company Commitment. A new holding company, Oncor Electric Delivery Holdings, will be formed between TXU Corp. and Oncor. 

 

	54.	Independent Board Commitment. Both Oncor Electric Delivery Holdings and Oncor will each have a board of directors comprised of at least nine persons. A majority
of Oncor Electric Delivery Holdings’ board members and Oncor’s board members will qualify as “independent” in all material respects in accordance with the rules and regulations of the New York Stock Exchange (NYSE) (which are set
forth in Section 303A of the NYSE Listed Company Manual and in Exhibit ONCOR/TEF 4 at FMG-2), from TXU Corp. and its subsidiaries (including TXU Energy Retail and Luminant), Texas Pacific Group (TPG), and Kohlberg Kravis Roberts & Co
(KKR). Consistent with TEF’s commitments, the directors of Oncor and Oncor Electric Delivery Holdings will also not include any members from the boards of directors of TXU Energy Retail or Luminant. This commitment is supplemented by finding of
fact 74. 

  

					
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	55.	Affiliate Asset Transfer Commitment. Neither Oncor Electric Delivery Holdings nor Oncor will transfer any material assets or facilities to any affiliates (other
than Oncor Electric Delivery Holdings, Oncor, and their subsidiaries, which are hereinafter referred to as the “ring-fenced entities”), other than a transfer that is on an arm’s length basis consistent with the Commission’s
affiliate standards applicable to Oncor, regardless of whether such affiliate standards would apply to the particular transaction. 

  

	56.	Arm’s Length Relationship Commitment. Each of the ring-fenced entities will maintain an arm’s length relationship with the TXU Group consistent with
the Commission’s affiliate standards applicable to Oncor. This provision is supplemented by finding of fact 85. 

  

	57.	Separate Books and Records Commitment. Each of the ring-fenced entities will maintain accurate, appropriate, and detailed books, financial records and accounts,
including checking and other bank accounts, and custodial and other securities safekeeping accounts that are separate and distinct from those of any other entity. 

 

	58.	Oncor Board’s Right to Determine Dividends Commitment. The Oncor Board, comprised of a majority of independent directors, will have the sole right to
determine dividends. This commitment is supplemented by findings of fact 65 and 76. 

  

	59.	Capital Expenditures Within Oncor Service Territory Commitment. The $3 billion minimum commitment for Oncor capital expenditures over the five years following
the merger will be spent within the traditional Oncor system, and that amount does not include any transmission projects to be constructed by Oncor as a result of the Commission’s decision in its Commission Staff’s Petition for
Designation of Competitive Renewable Energy Zones, Docket No. 33672 (pending). This commitment is modified by findings of fact 86 and 87. 

  

					
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	60.	No Transaction Costs to Oncor Commitment. None of the fees and expenses or any incremental borrowing costs of TXU Corp. or its subsidiaries related to the merger
will be borne by Oncor’s customers. This commitment is supplemented in finding of fact 82. 

  

	61.	Exclusion of Goodwill Commitment. The calculations for the debt-to-equity ratio commitment will not include goodwill resulting from the merger. This commitment
is supplemented by finding of fact 80. 

  

	62.	No Inter-Company Debt Commitment. Oncor will not enter into any inter-company debt transactions with TXU Corp. affiliates following consummation of the merger.
This commitment is supplemented by finding of fact 68. 

  

	63.	No Shared Credit Facilities Commitment. Oncor will not share any credit facility with any unregulated affiliate. This commitment is supplemented by finding of
fact 69. 

  

	64.	No Recovery of TXU Energy Retail Bad Debt Commitment. So long as TXU Energy Retail is affiliated with Oncor, Oncor will not seek to recover from its customers
any costs incurred as a result of a bankruptcy of TXU Energy Retail. This commitment is supplemented by finding of fact 72. 

  

	65.	Dividend Restriction Commitment. The Oncor LLC agreement4 shall, and TEF and Oncor will support a Commission finding to, limit the payment of dividends by Oncor through
December 31, 2012, to an amount not to exceed Oncor’s net income (determined in accordance with generally accepted accounting principles) for the period beginning on the date following the closing of the merger and ending on
December 31, 2012. 

  

	66.	Write-Off Commitment. Oncor will implement a one-time $35 million write-off in 2007 or 2008, at its discretion, either prior to or after the closing of the
merger, to its storm reserve and a one-time write-off in 2007 or 2008, at its discretion, either prior to or after the closing of the merger, to the 2002 restructuring 

 

	4	 See Rebuttal Testimony of Frederick M. Goltz (Goltz Rebuttal), TEF Ex. FMG-R-2 (Highly Sensitive Confidential Exhibit).

  

					
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	 	Order on Rehearing	 	Page 12 of 30

  

	 	 
expenses held as regulatory assets ($20,927,391.50). These write-off amounts will not be included as a cost item in the 2008 rate case or any other Commission proceeding. Parties reserve the
right to challenge claimed expenses included in storm reserve and regulatory assets accounts. These write-offs shall not be included in the calculation of net income for dividend payment purposes, as described in finding of fact 65.

  

	67.	Reporting Commitment. Oncor will file quarterly earnings monitoring reports with the Commission, including information on dividends paid, for a period of five
years beginning in January 2008. 

  

	68.	No Inter-Company Lending Commitment. Oncor will not lend money to or borrow money from TXU Corp. or TXU Corp. affiliates. This provision supplements the
commitment reflected in finding of fact 62. 

  

	69.	Credit Facility Commitment. Oncor will not share credit facilities with TXU Corp. or TXU Corp. affiliates. This provision supplements the commitment reflected in
finding of fact 63. 

  

	70.	No Pledging of Assets Commitment. Oncor’s assets shall not be pledged for any entity other than Oncor. This provision supplements the commitment reflected
in finding of fact 46. 

  

	71.	Notice of Corporate Separateness Commitment. Oncor, TXU Corp., and TXU Corp. affiliates will provide advance notice of their corporate separateness to lenders on
all new debt and will use commercially reasonable efforts to seek an acknowledgment representation of that separateness and non-petition covenants in all new debt instruments, including the debt instruments used in connection with financing the
merger. This commitment will terminate at such time that Oncor ceases to be affiliated with TXU Corp. 

  

	72.	Bankruptcy Expenses Commitment. Oncor will not seek recovery in rates of any expenses related to a bankruptcy or default of TXU Corp. or TXU Corp. affiliates,
including bad debt expense, or expenses associated with the expiration or cancellation of tax and interest reimbursement agreements presently in effect. This provision supplements the commitment reflected in finding of fact 64.

  

					
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	73.	Credit Rating Commitment. During any period that any two of the Standard & Poor’s, Moody’s, or Fitch rating agencies rate Oncor as an entity
at below investment grade, TEF will cause TXU Energy Retail within 15 days to post a letter of credit in favor of Oncor in the amount of $170 million to secure TXU Energy Retail’s payment obligations to Oncor. The parties agree that TXU Energy
Retail may withdraw the letter of credit at such time as two of the three ratings agencies rate Oncor as investment grade or at such time as TXU Energy Retail and Oncor cease to be affiliated with one another. The cost of any letter of credit
required under this provision will not be reflected in Oncor’s rates. 

  

	74.	Independent Directors Commitment. For an individual to qualify as an independent director of Oncor, such individual must be independent of each of Oncor, TEF,
TXU Corp. and TXU Corp. affiliates, KKR, TPG, Goldman Sachs, Lehman Brothers, Morgan Stanley, Citigroup, J.P. Morgan, and CSFB in accordance with the applicable criteria set forth in the NYSE Manual for independent directors of NYSE listed
companies. After such time as any of Lehman Brothers, Morgan Stanley, Citigroup, J.P. Morgan, or CSFB has sold all of the debt it underwrote to finance the merger, then any such entity that has sold all of the debt it underwrote to finance the
merger shall be deemed removed from the list of entities from which an individual must be independent in order to qualify as an independent director of Oncor in this finding of fact 74. This provision supplements the commitment reflected in finding
of fact 54. 

  

	75.	Minority Interest Commitment. The currently contemplated sale of a minority interest in Oncor, to the extent that such sale occurs, will be made to a party that
is not otherwise affiliated with, and is independent from, TXU Corp., KKR, TPG, and Goldman Sachs. Oncor may dividend the net proceeds from the sales of minority interests in Oncor to its members without regard to the provisions of finding of fact
65. 

  

					
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	76.	Independence of Board Commitment. Oncor’s board cannot be overruled by the board of TXU Corp. or any of its subsidiaries on dividend policy, debt issuance,
capital expenditures, management and service fees, and appointment or removal of board members, provided that such actions may also require the additional approval of Oncor Electric Delivery Holdings’ board. This provision supplements the
commitment reflected in finding of fact 58. 

  

	77.	 REP Credit Commitment. Oncor will provide a one-time credit of $72 million to retail electric providers (REPs) to be directly paid or credited
to their retail customers. The credit shall be provided over the first full Oncor billing month that starts at least 45 days after the Commission dismisses Commission Staff’s Petition for Review of the Rates of TXU Electric Delivery Company,
Docket No. 34040 (pending). Oncor will notify all REPs in its service area that the credit will be available only to those REPs that within 15 days of receiving the notice agree in writing to: (1) directly pay or credit the amount in
full to retail customers by ESI ID within 45 days of receipt of the amount received through the Texas SET 810_02 transaction from Oncor, and (2) file an affidavit with the Commission within 60 days of the last day of the billing month in which
the credits were provided stating that the credits which it received in this proceeding through the Texas SET 810_02 transactions were directly paid or credited to its retail customers. Oncor shall notify participating REPs of the first and last
dates of the full Oncor billing month it has used in providing credits to the participating REPs. Oncor will file an affidavit with the Commission providing a list of the participating REPs within 15 days after the deadline for REPs to indicate
their agreement to participate. To the extent that certain REPs do not participate in the credit, Oncor will reallocate in the same proportions the remaining portion of the $72 million credit to the REPs participating in the credit so that the full
$72 million credit is received by participating REPs and directly paid or credited to retail customers. Credit amounts that are unclaimed by non-industrial customers after the initial REP allocation and reallocation will be allocated on a pro rata
basis by Oncor to the bill payment assistance program of each participating REP 

  

					
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that serves residential customers. Within 30 days after providing the credit, Oncor will file an affidavit with the Commission stating that it has provided the $72 million credit and listing the
total amount credited by customer class and the remaining amounts paid to REPs for bill payment assistance programs. This $72 million one-time credit to retail customers shall count as a reduction to net income in the calculation of net income for
dividend payment purposes described in finding of fact 65. TEF will ensure that TXU Energy Retail passes the entire credit that it receives directly through to its retail customers. The parties agree that the one-time credit will not be recovered by
Oncor in any future proceedings, and further agree that they will not argue that the credit is any precedent or support for a rate reduction in the 2008 rate case or any future rate proceeding. The signatories will request the Commission to dismiss
Docket No. 34040, and Oncor will agree to file a system-wide rate case no later than July 1, 2008 based on a test-year ended December 31, 2007. The one-time credit shall be allocated and provided as follows:

  

					
	 Customer Class
	  	Amount Allocated
to Class	 
	 Residential
	  	$	32,983,398.59	  
	 Sec<=10 kW
	  	$	790,769.48	  
	 Sec>10 kW
	  	$	26,427,614.56	  
	 Pri<=10 kW
	  	$	11,163.78	  
	 Pri>10 kW
	  	$	5,279,308.63	  
	 Transmission
	  	$	5,401,089.92	  
	 Lighting
	  	$	1,106,655.05	  

 Credit Methodology

 General 
 Oncor will calculate a credit amount per ESI ID in accordance with the methodology set forth in this finding of fact 77. Oncor will use the standard Texas SET 810_02 transaction with specific transaction
charge code SER 105 in 

  

					
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order to provide the allocated share of $72 million credit to the participating REPs by ESI ID. The credit will be calculated on an ESI ID basis for each end-use retail customer of a
participating REP as of the last billing day of Oncor’s December 2007 billing cycle. Each per ESI ID credit amount shall be truncated to the cent. The credit amount for each ESI ID will be sent to that end-use retail customer’s REP as of
the date of the credit, by ESI ID. 
 Residential Service 

The residential rate-class credit will be based on a fixed dollar amount per residential ESI ID that will be calculated as follows:
$32,983,398.59 divided by the total number of participating REP residential ESI IDs determined as of the last billing day of Oncor’s December 2007 billing cycle. 
 Secondary Service Less Than or Equal to 10 kW ($790,769.48) 
 Same process
used for residential service. 
 Secondary Service Greater than 10 kW ($26,427,614.56) 

The secondary-service-greater-than-10-kW customer credit will be determined based on each participating REP’s customer’s (on a
per ESI ID basis) 2007 annual kilowatt-hours consumption as a percentage of the total 2007 participating REP’s annual secondary-service-greater-than-10-kW class’ kilowatt-hours. 

Each individual ESI ID’s percentage as calculated above will be multiplied by the total class credit of $26,427,614.56. 

Primary Service Less Than or Equal to 10 kW ($11,163.78) 
 Same process used for residential service. 
 Primary Service Greater Than 10 kW
($5,279,308.63) 
 Same process used for secondary service greater than 10 kW. 

Transmission Service ($5,401,089.92) 
 Same process used for secondary service greater than 10 kW. 

  

					
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 Lighting Service ($1,106,655.05) 

The lighting-service credit of $1,106,655.05 will be allocated to the various types of lights based on the light type’s percentage of
the total revenue for the 2006 calendar year. 
  

									
	 Light Type
	  	% of
2006
Test
Year
Lighting
Revenue	 	 	Credit	 
	 Schedule A
	  	 	58.88	% 	 	$	651,750.58	  
	 Schedule B
	  	 	8.66	% 	 	$	95,811.58	  
	 Schedule C
	  	 	0.03	% 	 	$	386.34	  
	 Schedule D
	  	 	2.23	% 	 	$	24,725.58	  
	 Metered (Non-Company)
	  	 	1.7	% 	 	$	18,622.17	  
	 Metered (Company)
	  	 	0.4	% 	 	$	4,420.61	  
	 Outdoor Lights
	  	 	28.1	% 	 	$	310,938.20	  
	 Total
	  	 	100.0	% 	 	$	1,106,655.06	  

 For Street Lighting
Schedules A, B, C, D and outdoor lights, the credit will be based on a fixed dollar amount per light type calculated by dividing the allocated amount for each light type by each participating REP’s number of lights in that type as of the last
billing day of Oncor’s December 2007 billing cycle. 
 For metered streetlight service, the credit will be calculated for
each metered premise based on each participating REP’s metered premises’ 2007 annual revenue as a percentage of the total 2007 revenue for metered street-light service. 

 

	78.	 Debt to Equity Ratio Commitment. Oncor’s debt will be limited so that its debt-to-equity ratio is at or below the assumed debt-to-equity
ratio established from time to time by the Commission for ratemaking purposes, which is currently set at 60% debt to 40% equity. The Commission has authority to determine what types of debt and equity are included in a utility’s debt-to-equity
ratio. The purposes to be conducted or promoted by Oncor are those of an electric transmission and 

  

					
	Docket No. 34077	 	Order on Rehearing	 	Page 18 of 30

  

	 	 
distribution company, including owning and operating equipment or facilities to transmit and distribute electricity, and to engage in any other activities related or incidental thereto or in
anticipation thereof. Oncor will agree to cap its cost of debt for the 2008 rate case at pre-merger levels. In addition, Oncor will agree that its cost of debt in future rate proceedings initiated prior to December 31, 2012 will be based on the
then-current cost of debt for electric utilities which have the same investment grade ratings, as established by the Standard & Poor’s, Moody’s and Fitch rating agencies, at the time of such proceedings as Oncor’s ratings as
of October 1, 2007. This provision supplements the commitment reflected in finding of fact 47. 

  

	79.	Regulatory ROE Commitment. If, at any time from the date of closing of the merger through December 31, 2012, Oncor’s entity rating is not maintained as
investment grade by Standard & Poor’s, Moody’s, or Fitch credit rating agencies, Oncor will not use its below investment grade ratings to justify an argument in favor of a higher regulatory return on equity.

  

	80.	Goodwill Commitment. TEF and Oncor will not include goodwill from the merger in the calculation of the debt-to-equity-ratio commitment to justify increased debt
at Oncor. Write-downs or write-offs of goodwill will not be included in the calculation of net income for dividend payment purposes. This provision supplements the commitment reflected in finding of fact 47. 

 

	81.	Goodwill Commitment. Oncor will not seek to recover merger goodwill or any expense associated with the impairment of goodwill in its rates.

  

	82.	No Recovery of Transaction-Related Costs Commitment. Oncor will not seek to include costs related to the merger in its rates. 

 

	83.	No Recovery of DSM/Energy Efficiency Costs Commitment. Oncor will not seek recovery in rates of any portion of the $200 million in incremental DSM expenditures.
This provision supplements the commitment reflected in finding of fact 49. 

  

					
	Docket No. 34077	 	Order on Rehearing	 	Page 19 of 30

  

	84.	DSM Spending Commitment. TEF will spend $100 million of the additional $200 million in incremental DSM expenditures reflected in finding of fact 49 at Oncor.

  

	 	(i)	From January 1, 2008 through December 31, 2012, Oncor will spend $100 million of its incremental DSM expenditures as follows: 

 

	 	1.	Oncor will spend $16 million for low income customer programs that will be conducted in a manner consistent with the Commission’s energy efficiency rules. To do
so, Oncor will negotiate and execute a contract with the Texas Association of Community Action Agencies (TACAA) to administer $3.2 million annually (for calendar years 2008 through 2012) for weatherization assistance services through local contracts
with governmental and nonprofit agencies that will augment resources from the federal weatherization assistance program. Oncor will use its best efforts to have this agreement in place within 30 days of the final order in this Docket No. 34077.
The contract with TACAA must contain reporting provisions to ensure that the funds are spent efficiently on effective weatherization programs, and provisions that ensure that TACAA makes reasonable progress toward spending the total $16 million over
five years. TACAA must also agree that these additional weatherization funds will be spread equitably across the entire Oncor service area, including through community action agencies that are not members of TACAA. For this $l6 million for low
income customer programs, Oncor shall provide the Commission accurate annual reporting of revenues spent, the reduction in demand, and energy savings by customer class. 

 

	 	2.	After accounting for the low income customers’ share of the $100 million to be spent by Oncor, Oncor will spend the remaining $84 million for the benefit of
industrial, commercial, residential and municipal, state, and other governmental customers. Oncor will spend the remaining $84 million for DSM and energy efficiency in a manner consistent with the Commission’s energy efficiency rules, except
that (A) up to $8.4 million of the remaining $84 million need not meet the cost effectiveness standards set out in such rules; and (B) program cost effectiveness will be measured over the life of the energy efficiency measure, provided
that there will be realized savings in a three year period. For purposes of the remaining $84 million to be spent by Oncor, all end-use customers, including industrial, municipal, state and other governmental customers, will be considered
“eligible customers.” Oncor shall provide the Commission accurate annual reporting of revenues spent, the reduction in demand, and energy savings by customer class. 

  

					
	Docket No. 34077	 	Order on Rehearing	 	Page 20 of 30

  

	 	3.	The $100 million to be spent by Oncor described above will be in addition to amounts Oncor is required to spend under PURA § 39.905, other legislation, or its
preexisting obligations, including those related to Commission Staff’s Application for Approval of Plan to Implement Targeted Low-Income Energy-Efficiency Programs, Docket No. 32103 (Aug. 8, 2006) and Petition of Texas Legal
Services and Texas Ratepayers Organization to Save Energy to Modify the Commission’s Final Order in 32103 and to Reform The Agreement to Implement Weatherization Program, Docket No. 34630 (Pending). Energy savings achieved through the
expenditure of this $100 million shall not count toward meeting or exceeding requirements of PURA § 39.905, related substantive rules, or for purposes of calculating bonuses. 

 

	 	4.	If the $100 million to be spent by Oncor described above is funded by Oncor, including through the sale or transfer of Oncor’s assets, the portion of the $100
million spent in any calendar year shall be included in the calculation of net income for dividend payment purposes, as described in finding of fact 65, but shall not be recognized as an expense for purposes of calculating Oncor’s rate of
return as reported on any Commission-required filing or in support of any future Oncor rate increase. 

  

	 	(ii)	The other $100 million of incremental DSM expenditures will be funded and spent by TEF affiliates other than Oncor for the benefit of industrial, commercial,
residential and municipal, state, and other governmental customers from January 1, 2008 through December 31, 2012. 

  

	 	(iii)	These provisions supplement the commitment reflected in finding of fact 49. 

 

	85.	 Corporate Support Services Commitment. Any corporate support services provided by an affiliate shall be acquired by Oncor at cost, but this
provision shall not serve as a precedent or factor for determining the validity of any affiliate expense in future rate cases. Parties in future rate cases may challenge requested affiliate expenses for compliance with PURA § 36.058. The
Commission can audit compliance with this provision consistent with existing substantive rules. Further, in the 2008 rate case, Oncor will not request affiliate expenses relating to corporate support services in an amount that exceeds the amount
included in its 

  

					
	Docket No. 34077	 	Order on Rehearing	 	Page 21 of 30

  

	 	 
request in Docket No. 34040. Nothing in the stipulation reached by the parties in this docket shall be considered precedent as to whether CapGemini Energy L.P. (CGE) expenses are to be
considered affiliate expenses. By agreeing to this provision, parties do not waive their rights to take the position that CGE is an affiliate of Oncor in the 2008 rate case and any future rate proceedings. 

 

	86.	Capital Expenditures Commitment. Oncor shall make minimum capital expenditures equal to a budget of $3.6 billion over the five-year period beginning
January 1, 2008, and ending December 31, 2012, subject to the following adjustments to the extent reported to the Commission in Oncor’s quarterly earnings monitor report: Oncor may reduce capital spending due to conditions not under
Oncor’s control, including, without limitation, siting delays, cancellations of projects by third-parties, or weaker than expected economic conditions. The $3.6 billion budget does not include transmission projects to be constructed by Oncor as
a result of the Commission’s decision in its Commission Staff’s Petition for Designation of Competitive Renewable Energy Zones, Docket No. 33672 (pending). This finding of fact modifies the commitment reflected in finding of
fact 59. 

  

	87.	Capital Expenditures Commitment. The capital expenditures contained in finding of fact 86 shall be made solely to support the traditional Oncor system.

  

	88.	SAIDI and SAIFI Performance Standards Commitment. From January 1, 2008 until December 31, 2012, Oncor will agree to the following SAIDI and SAIFI
Performance Standards, and Worst Performing Feeder Standards, including a total annual rebate payment ceiling of $2 million. The metrics for these standards were the subject of proposed legislation in the most recent legislative session; therefore
in the event the metrics are changed in subsequent legislative sessions to provide for more stringent standards, Oncor shall file an application to conform the metrics referenced herein to the new metrics established in subsequent legislation.

  

					
	Docket No. 34077	 	Order on Rehearing	 	Page 22 of 30

  

	 	(i)	General Provisions 

  

	 	1.	The reliability standards contained herein are intended to be consistent with P.U.C. SUBST. R. 25.52. 

 

	 	2.	Reporting periods for these reliability standards are intended to be consistent with P.U.C. SUBST. R. 25.81, and will coincide with the reporting periods
in the Oncor electric-system service-quality reports to the Commission. Annual evaluations will be for calendar years. 

  

	 	3.	The initial reporting period for purposes of the rebates provided herein will be the year 2008. 

 

	 	4.	Reliability indices are calculated for “forced interruptions” as defined by P.U.C. SUBST. R. 25.52. 

 

	 	(ii)	Reliability Indices 

 The
following reliability standards use the System Average Interruption Frequency Index (SAIFI) and System Average Interruption Duration Index (SAIDI). The distribution feeder standards will be established for distribution feeders with 10 or more
customers. 
  

	 	1.	10 Percent Worst Distribution Feeder Performance Standards 

 No distribution feeder will sustain a SAIFI or SAIDI value for a reporting period that is among the highest (worst) 10 percent of the feeders for any two consecutive reporting periods. 

 

	 	2.	300 Percent Greater than System Average Distribution Feeder Performance Standards 

No distribution feeder will sustain a SAIFI or SAIDI value for a reporting period that is more than 300 percent greater than the system
average of all feeders for any two consecutive reporting periods. 
  

	 	3.	System Wide Standards 

Oncor will not exceed the system-wide SAIFI or SAIDI standard by more than 5.0 percent beginning in 2008. The System Wide Standards are
the average SAIFI and the average SAIDI for 1998, 1999, and 2000. 
  

	 	(iii)	Maximum Amount of Rebates and Rebate Priorities 

  

	 	1.	The rebates for violations of the reliability standards will not exceed a total of $2 million in a calendar year. 

  

					
	Docket No. 34077	 	Order on Rehearing	 	Page 23 of 30

  

	 	2.	The rebates will be credited to customers based upon the following priorities: 

 

	 	a.	10 Percent Worst Distribution Feeder Performance Standards 

  

	 	b.	300 Percent Greater than System Average Distribution Feeder Performance Standards 

 

	 	c.	System Wide Standards 

 To the
extent that the $2 million rebate cap is reached, the rebate money will be prorated to customers in the last group, under subsections iii(2)(a), (b) and (c) above, eligible for rebates. Customers in higher priority groups will receive full
rebates. 
  

	 	(iv)	Determination of Rebates 

  

	 	1.	10 Percent Worst Distribution Feeder Performance Standards 

  

	 	a.	A rebate of $20 will be made to each customer on all feeders violating one of the 10 Percent Worst Distribution Feeder Performance Standards. A separate rebate will be
made for each violated standard (SAIFI or SAIDI) such that a customer on a feeder violating both standards would be credited $40. 

  

	 	b.	If Oncor has no distribution feeder that violates one of the 10 Percent Worst Distribution Feeder Performance Standards for a reporting period, the total amount of
money for rebates will be reduced 10 percent ($200,000) for the standard achieved. This reduction of money for rebates will decrease the total amount of rebates available for a calendar year for violations of any of the remaining standards. The
amount of reduction will be 20 percent ($400,000) if both standards (SAIFI and SAIDI) are achieved. 

  

	 	2.	300 Percent Greater than System Distribution Feeder Performance Standards 

  

	 	a.	A service reliability credit of $50 will be made to each customer on all feeders violating either standard. A separate credit will be made for each standard violated
(SAIFI or SAIDI) such that a customer on a feeder violating both standards would be credited $100. 

  

	 	b.	 If Oncor has no distribution feeder that violates a 300 Percent Greater than System Average Distribution Feeder Performance Standard for a reporting
period, the total 

  

					
	Docket No. 34077	 	Order on Rehearing	 	Page 24 of 30

  

	 	 
amount of money for rebates will be reduced 10 percent ($200,000) for the standard achieved. The amount of reduction will be 20 percent ($400,000) if both standards (SAIFI and SAIDI) are
achieved. This reduction of money for rebates will decrease the total amount of rebates available for a calendar year for violations of any remaining 300 Percent Greater than Average Distribution Feeder Performance Standard, or the System Wide
Standards, but not the 10 Percent Worst Distribution Feeder Performance Standards. 

  

	 	3.	System Wide Standards 

  

	 	a.	If the SAIFI or SAIDI System Wide Standard is violated, Oncor will distribute the total rebate on a per-capita basis among all distribution customers.

  

	 	b.	SAIFI: The total rebate will be the numerical difference between the actual and the allowable SAIFI values multiplied by $1 million, up to a maximum of one-half of the
total amount of money available for rebates for violations of the System Wide Standards. 

  

	 	c.	SAIDI: The total rebate will be the numerical difference between the actual and the allowable SAIDI values multiplied by $10,000, up to a maximum of one-half of the
total amount of money available for rebates for violations of the System Wide Standards. 

  

	 	4.	Payment 

 Oncor will make
rebates to the current customer at the affected consuming facility by June 1 of the year following the reporting period. 
  

	 	5.	Term of Standards 

 The electric
reliability standards established in this finding of fact 88 will remain in effect from January 1, 2008 through December 31, 2012. 
  

	 	(v)	Any interested person will have the right to petition the Commission to revise the commitments in this finding of fact 88. In the event the Commission’s service
reliability rule, P.U.C. SUBST. R. 25.52, is amended to make its reliability standards more stringent, such amendments will automatically be incorporated in these reliability commitments. Additionally, the signatories to the
stipulation reached in this docket agree that they will revisit these standards and penalties in the future in the context of any performance-based ratemaking plans or rules for Oncor and/or the electric industry. 

  

					
	Docket No. 34077	 	Order on Rehearing	 	Page 25 of 30

  

	 	(vi)	Within 45 days of the date of the final order in this Docket No. 34077, Oncor shall file with the Commission a compliance plan with an agreement to pass through
service quality credits similar in form to phase two of the plan and the agreement adopted in Compliance Filings by Texas-New Mexico Power Company from the Order in Docket No. 30172, Project No. 30848 (Apr. 22, 2005).

  

	89.	Street Lighting Commitment. From January 1, 2008 until December 31, 2012, to the extent not inconsistent with existing agreements with Cities, Oncor
agrees to annual street light performance standards as follows: 

  

	 	(i)	Routine repairs (bulbs, photocells, and ballasts) – 90% complete in 5 calendar days; 

 

	 	(ii)	Circuit repairs (overhead/underground cable repairs) – 80% complete in 15 calendar days; 

 

	 	(iii)	Knockdowns (not repairs, require the replacement of the entire light) – 80% complete in 30 calendar days. 

These metrics will be exempt from force majeure events, including, but not limited to, major storms, cities whose ordinances or approvals
impact Oncor’s ability to meet these metrics, and mutual assistance to other utilities. Examples of qualifying city ordinances include – lane closures, pre-determined work schedules, and noise ordinances. All non-standard lights, such as
antique or historical lights are exempt from this requirement since they are not readily available in Oncor’s stock or from the manufacturer. Oncor agrees to a maximum payment of $1 million per year if the standards are not achieved, to be paid
to the customers affected as contained in a plan filed by Oncor with the Commission for approval. Oncor shall file such a plan within 60 days of the date of the final order in Docket No. 34077. Notwithstanding this agreement, this issue may be
addressed in subsequent rate proceedings. 
  

	90.	 Customer Service Commitment. From January 1, 2008 until December 31, 2012, Oncor will agree to the customer-service metric proposed by
Cities’ witness Norwood (annual average response time for customer calls to Oncor’s telephone 

  

					
	Docket No. 34077	 	Order on Rehearing	 	Page 26 of 30

  

	 	 
call center shall not exceed 60 seconds), with a total payment not to exceed $2 million per calendar year, to be paid in accordance with a plan filed by Oncor with the Commission for approval.
Oncor shall file such a plan within 60 days of the date of the final order in Docket No. 34077. 

  

	91.	Advanced Metering Commitment. Oncor will file its advanced metering deployment plan with the Commission before July 1, 2008; provided, however, that should
the Commission take action to materially alter the existing requirements for advanced metering deployment, Oncor reserves its rights to delay the filing for a reasonable time as may be necessary to address any such requirements. The advanced meters
deployed will support DSM programs to the extent required by the Commission’s rules. 

  

	92.	Legislation Commitment. TEF, Oncor, TXU Corp. and its subsidiaries, and any legislative advocacy group to which any of the parties are members, and the other
signatories will agree not to pursue, support or propose legislation that would change or abrogate any of the terms of the stipulation approved by the Commission in this docket; provided that if legislation discussed in finding of fact 88 is
considered in future sessions, Oncor reserves the right to participate in that legislative process. The stipulation approved by the Commission in this docket is not intended to impair the ability of Commission Staff, OPC or the State to communicate
with or respond to a request of a member of the Texas Legislature or otherwise limit the Commission’s ability to support or oppose any particular proposed legislation. 

 

	93.	Transformer Loss Commitment. Oncor will agree to make an exception to the standard transformer loss adjustment of 0.8% for high-voltage customers that are
metered on the low side of the transformer, provided that the customer can provide third-party verification of the actual loss level. 

  

					
	Docket No. 34077	 	Order on Rehearing	 	Page 27 of 30

  

	94.	Transformer Tariff Commitment. Oncor will propose and support a cost-based retail transformation tariff applicable to industrial customers in its 2008 rate
filing. Parties are free to take any position with respect to the proposed tariff. 

  

	95.	Compliance Report Commitment. Oncor will comply with the commitments that are reflected in findings of fact 43 through 94. Oncor will make annual reports to the
Commission regarding its compliance with these commitments. 

  

	96.	Based upon the record evidence, the terms of the stipulation reached by certain parties in this docket are reasonable. 

 

	97.	Based upon the record evidence, the stipulation reached by certain parties in this docket is in the public interest. 

Evaluation of Transaction 
  

	98.	Based upon the record evidence and the commitments offered by Oncor, the merger will not adversely affect the health or safety of Oncor’s customers or employees.

  

	99.	No party presented evidence to rebut TEF’s position that the merger will not result in the transfer of jobs of citizens of this state to workers domiciled out of
this state. 

  

	100.	Based upon the record evidence and the commitment offered by Oncor relative to specific performance and customer service standards, the merger will not result in a
decline in service. 

  

	101.	Based upon the commitment by TEF and Oncor that Oncor will not seek to include merger costs in future rate requests, the merger will not result in Texas ratepayers
bearing merger-related costs unrelated to the corresponding benefits to Texas ratepayers. 

  

	102.	The merger, coupled with the terms of the stipulation, as amended, is in the public interest. 

  

					
	Docket No. 34077	 	Order on Rehearing	 	Page 28 of 30

  

 II. Conclusions of Law 

 

	1.	Oncor is an electric utility as defined by PURA § 31.002(6) and a transmission and distribution utility as defined in PURA § 31.002(19).

  

	2.	The Commission has jurisdiction over the parties and the subject matter of this docket pursuant to PURA §§ 14.101 and 39.262(o). 

 

	3.	Notice of the merger at issue in this proceeding and the events in this docket was provided as required by P.U.C. PROC. R. 22.55.

  

	4.	The merger, coupled with the terms of the stipulation, as amended, meet the requirements set forth in PURA § 14.101 to support a public interest finding.

  

	5.	The terms of PURA § 14.101(b)(1) and (b)(3) do not apply to the Commission’s review of the merger as the merger does not involve the sale of a utility’s
assets or a merger of operating utilities. 

  

	6.	The stipulation reached by certain parties in this docket resolves all issues pending in Docket No. 34077. 

 

	7.	The Commission’s consideration of the stipulation complies with PURA § 14.054 and P.U.C. PROC. R. 22.206. 

 

	8.	The one-time $72 million credit offered by Oncor to retail electric providers set forth in finding of fact 77 does not constitute an unreasonable preference or
advantage under PURA § 36.003 or a violation of the competitive methods required by PURA § 39.001. 

  

	9.	The stipulation, as amended, is in the public interest under PURA § 14.101. 

 

	10.	The stipulation, as amended, satisfies all of the Commission’s standards for review of a non-unanimous stipulation. 

  

					
	Docket No. 34077	 	Order on Rehearing	 	Page 29 of 30

  

 III. Ordering Paragraphs 

In accordance with these findings of fact and conclusions of law, the Commission issues the following Order: 

 

	1.	Oncor Electric Delivery Company and Texas Energy Future Holdings Limited Partnership’s application requesting a public interest finding under PURA § 14.101 on
the merger of TEF with Oncor’s parent, TXU Corp., as modified by the stipulation, as amended, is approved. 

  

	2.	Oncor will comply with the commitments that are reflected in the stipulation, as set forth in findings of fact 43 through 95 in this Order. Oncor will make annual
reports to the Commission regarding its compliance with these commitments. 

  

	3.	The entry of this Order consistent with the stipulation does not indicate the Commission’s endorsement of any principle or method that may underlie the
stipulation. Neither should entry of this Order be regarded as a precedent as to the appropriateness of any principle or methodology underlying the stipulation. 

 

	4.	All motions or requests for entry of specific findings of fact and conclusions of law, and other requests for general or specific relief not expressly granted, are
denied. 

  

					
	Docket No. 34077	 	Order on Rehearing	 	Page 30 of 30

  

 SIGNED AT AUSTIN, TEXAS the 24th day of April 2008. 

 

	
	PUBLIC UTILITY COMMISSION OF TEXAS
	
	 /s/ Barry T. Smitherman

	BARRY T. SMITHERMAN, CHAIRMAN
	
	 /s/ Julie Caruthers Parsley

	JULIE CARUTHERS PARSLEY, COMMISSIONER
	
	 /s/ Paul Hudson

	PAUL HUDSON, COMMISSIONERExhibit 10.18

 Exhibit 10.18 
 GENERAL DYNAMICS CORPORATION 
 SUPPLEMENTAL RETIREMENT PLAN

 Effective January 1, 1983 
 and restated effective January 1, 2010 (incorporating amendments through December 31, 2010) 

 TABLE OF CONTENTS 

 

									
	 	 	 	  	Page	 
	 SECTION 1 INTRODUCTION AND PLAN HISTORY
	  	 	1	  
				
		 	1.01	  	Introduction	  	 	1	  
		 	1.02	  	Effective Date	  	 	1	  
		 	1.03	  	Plan Appendices and Exhibits	  	 	1	  
		
	 SECTION 2 DEFINITIONS
	  	 	1	  
				
		 	2.01	  	Actuarial Equivalent Value	  	 	2	  
		 	2.02	  	Actuary	  	 	2	  
		 	2.03	  	Code	  	 	2	  
		 	2.04	  	Corporation	  	 	2	  
		 	2.05	  	Defined Benefit Plan	  	 	2	  
		 	2.06	  	Defined Contribution Plan	  	 	2	  
		 	2.07	  	Determination Date	  	 	2	  
		 	2.08	  	Employee	  	 	2	  
		 	2.09	  	Employing Unit	  	 	2	  
		 	2.10	  	ERISA	  	 	3	  
		 	2.11	  	Grandfathered Amounts	  	 	3	  
		 	2.12	  	Participant	  	 	3	  
		 	2.13	  	Plan	  	 	3	  
		 	2.14	  	Retirement Plan	  	 	3	  
		 	2.15	  	Separation from Service	  	 	3	  
		 	2.16	  	Subsidiary	  	 	3	  
		
	 SECTION 3 SUPPLEMENTAL BENEFITS DUE TO LIMITATIONS UNDER DEFINED BENEFIT PLANS
	  	 	3	  
				
		 	3.01	  	Participation	  	 	3	  
		 	3.02	  	Transition Rules	  	 	4	  
		 	3.03	  	Supplemental Benefit Due to Limitations Under Defined Benefit Plans	  	 	4	  
		 	3.04	  	Forms of Distribution for Grandfathered Amounts	  	 	5	  
		 	3.05	  	Forms of Distribution for Benefits Without Lump-Sum Option	  	 	5	  
		 	3.06	  	Forms of Distribution for Benefits With Lump-Sum Option	  	 	5	  
		 	3.07	  	Election of Alternative Annuity Forms	  	 	5	  
		 	3.08	  	Distribution Date of non-Grandfathered Amount	  	 	5	  
		 	3.09	  	Small-Sum Cashout	  	 	6	  
		 	3.10	  	Reemployment	  	 	6	  
		 	3.11	  	Distribution of Benefit	  	 	6	  
		
	 SECTION 4 SPECIAL SUPPLEMENTAL BENEFITS
	  	 	7	  
				
		 	4.01	  	Participation	  	 	7	  

  
 i 

									
		 	4.02	  	Benefits	  	 	7	  
		
	 SECTION 5 MISCELLANEOUS PROVISIONS
	  	 	7	  
				
		 	 5.01
	  	Construction	  	 	7	  
		 	 5.02
	  	Employment	  	 	7	  
		 	 5.03
	  	Non-alienability of Benefits	  	 	7	  
		 	 5.04
	  	Facility of Payment	  	 	7	  
		 	 5.05
	  	Discretionary Payment of Benefits	  	 	8	  
		 	 5.06
	  	Obligation to Pay Amounts Hereunder	  	 	8	  
		 	 5.07
	  	Administration	  	 	8	  
		
	 SECTION 6 AMENDMENT AND TERMINATION OF PLAN
	  	 	11	  
				
		 	 6.01
	  	Amendment	  	 	11	  
		 	 6.02
	  	Termination	  	 	11	  
		 	 6.03
	  	Delegation	  	 	11	  
		 	 6.04
	  	Section 409A	  	 	11	  
		
	 Appendix A
	  	 	A-1	  
		
	 Appendix B
	  	 	B-1	  
		
	 Appendix C
	  	 	C-1	  
		
	 Appendix D
	  	 	D-1	  
		
	 Appendix E
	  	 	E-1	  

  
 ii 

 SECTION 1 
 INTRODUCTION AND PLAN HISTORY 
 1.01 Introduction. 

 

	 	(a)	This Plan is maintained so as to strengthen the ability of the Corporation to attract and retain persons of outstanding competence upon which, in large measure,
continued growth and profitability depend. 

  

	 	(b)	The Plan is intended to supplement any benefits that may be provided under any plans of the Corporation and its Subsidiaries, as they may be in effect from time to
time, that are qualified under Code Section 401. The Corporation shall not be required to fund, in any way, any of the benefits provided under this Plan prior to the time payments become due to persons hereunder. 

 

	 	(c)	The Plan is intended to be an excess benefit plan within the meanings of Sections 3(36) and 201(7) of ERISA and an unfunded deferred compensation plan for a select
group of management or highly compensated employees within the meanings of Sections 201(2), 301(a)(3) and 401(a)(4) of ERISA and Labor Regulation Section 2520.104-23, and shall be construed and interpreted accordingly. 

1.02 Effective Date. The Plan was established January 1, 1983, was amended and restated as of January 1, 1989, as of January 1,
2002, and as of January 1, 2009, and has also been amended from time to time. The Effective Date of the amendment and restatement of the Plan as set forth herein is January 1, 2010, except as otherwise provided in the Plan or an Appendix,
and it incorporates amendments through December 31, 2010. 
 1.03 Plan Appendices and Exhibits. From time to time, the Corporation
may adopt Exhibits to the Plan for the purpose of setting forth specific provisions of this Plan. In addition, the Corporation may from time to time adopt Appendices to this Plan for the purpose of providing documentation necessary to determine
benefits under the Plan for certain employee groups. Each such Exhibit or Appendix shall be attached to and form a part of the Plan. Each such Exhibit or Appendix shall specify the Employing Unit to which it applies and shall supersede the
provisions of the Plan document to the extent necessary to eliminate any inconsistencies between the Plan document and such Exhibit or Appendix. 
 SECTION 2 
 DEFINITIONS 

Where the following words and phrases appear in the Plan, they shall have the respective meanings set forth below, unless the context clearly indicates
to the contrary. Some of the words and phrases used in the Plan are not defined in this Section 2, but, for convenience, are defined as provided in an Appendix or Exhibit or as they are introduced into the text. 

  
 1 

 2.01 Actuarial Equivalent Value. “Actuarial Equivalent Value” shall mean an amount
determined by an Actuary that is of the equivalent value to the aggregate amounts expected to be received under different forms of payment under the Plan and based on actuarial assumptions adopted under the Defined Benefit Plan in which the Plan
Participant benefits. For purposes of determining a lump sum value where no lump sum payment option, other than the small benefit cashouts described in Section S5.5 of the Master Retirement Plan Supplement (or any successor provision thereto), is
available under the Defined Benefit Plan, the lump sum value shall be based on the actuarial assumptions that would be used for determining a small benefit cashout. 
 2.02 Actuary. “Actuary” shall mean one or more actuaries chosen by the Corporation, who shall be independent of the Corporation, and qualified through Fellowship in the Society of
Actuaries or a firm with such actuaries on its staff. 
 2.03 Code. “Code” shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the applicable regulations and other guidance issued thereunder. 
 2.04 Corporation.
“Corporation” shall mean General Dynamics Corporation, a Delaware corporation, and any successor thereof. 
 2.05 Defined Benefit
Plan. “Defined Benefit Plan” shall mean any Retirement Plan maintained by the Corporation or its Subsidiaries other than a Defined Contribution Plan as its specific benefit structure is defined with respect to a group of covered
employees. Defined Benefit Plans covered by this Plan are listed in Appendix A. 
 2.06 Defined Contribution Plan. “Defined
Contribution Plan” shall mean a Retirement Plan which provides for an individual account for each covered Employee and for benefits based solely upon the amount contributed to the Employee’s account, and any income, expenses, gains and
losses, and any other amounts which may be allocated to such account. 
 2.07 Determination Date. “Determination Date” shall
mean, in the case of payment resulting from disability, the Participant’s attainment of age 65, or, for all other payments, the first day of the month following the later of the Participant’s attainment of age 55 or the Participant’s
Separation from Service, including Separation from Service on account of death. 
 2.08 Employee. “Employee” shall mean any
person regularly employed as a full-time salaried or hourly employee by the Corporation or its Subsidiaries in any capacity including officers (and also including directors who regularly render services to the Corporation or its Subsidiaries as
regular full-time employees), and who is not covered by a collective bargaining agreement unless coverage under this Plan has been extended by negotiated agreement to Employees covered by the terms of such agreements. Individuals not initially
treated and classified by the Corporation as common-law employees, including, but not limited to, leased employees, independent contractors or any other contract employees, shall be excluded from participation irrespective of whether a court,
administrative agency or other entity determines that such individuals are common-law employees. 
 2.09 Employing Unit. “Employing
Unit” shall mean any Subsidiary or affiliate of the Corporation or any economic or organizational or locational division or unit thereof which is set forth in the Appendices to the Plan. 

  
 2 

 2.10 ERISA. “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended. 
 2.11 Grandfathered Amounts. “Grandfathered Amounts” shall mean any amounts under this Plan which were deferred and
vested before January 1, 2005 (as determined in accordance with Code Section 409A). 
 2.12 Participant.
“Participant” shall mean an Employee who satisfied the eligibility criteria described in Section 3.01, 4.01 or an Appendix. 

2.13 Plan. “Plan” shall mean the Supplemental Retirement Plan effective January 1, 1983, and restated as set forth herein effective
January 1, 2010 (and incorporating amendments through December 31, 2010), as it shall be amended from time to time and its Appendices and Exhibits. 
 2.14 Retirement Plan. “Retirement Plan” shall mean any plan, fund, or program which was heretofore or is hereafter established or maintained by the Corporation and/or its Subsidiaries and
which is qualified under Code Section 401 to the extent that by its express terms or as a result of surrounding circumstances such plan, fund or program: 
  

	 	(a)	provides retirement income to Employees; or 

  

	 	(b)	results in a deferral of income by Employees for periods extending to the termination of covered employment or beyond, 

regardless of the method of calculating the contributions made to the plan, the method of calculating the benefits under the plan or the method of
distributing benefits from the plan. 
 2.15 Separation from Service. “Separation from Service” shall have the meaning set
forth in Code Section 409A. 
 2.16 Subsidiary. “Subsidiary” shall mean any subsidiary of the Corporation authorized by
the Corporation to participate in this Plan with respect to its Employees and of which the Corporation owns, directly or indirectly, fifty percent (50%) or more of the outstanding voting stock. 

SECTION 3 

SUPPLEMENTAL BENEFITS DUE TO LIMITATIONS 
 UNDER DEFINED BENEFIT PLANS 
 3.01 Participation. Eligibility for
participation for any benefits provided under Section 3.03 shall be extended to Employees covered under a benefit structure identified in Appendix A either who are members of a select group of management or highly compensated employees with
benefits payable under such benefit structure restricted due to the limitations of Code Section 401(a)(17) or whose benefits payable thereunder are restricted due to Code Section 415 limitations. 

Notwithstanding the preceding paragraph, an Employee shall not be eligible for a benefit under Section 3.03 if such Employee is eligible for
benefits under an Appendix (other than Appendix A) 

  
 3 

 
or an agreement with the Corporation or its Subsidiaries where such Appendix or agreement provides benefits in lieu of benefits described in Section 3.03 unless such Appendix or agreement
provides otherwise. 
 3.02 Transition Rules. 
  

	 	(a)	Except as otherwise specifically provided herein with respect to Grandfathered Amounts, any benefit pursuant to this Plan distribution of which commenced prior to
January 1, 2009, shall continue to be paid in the same amount and in the same time and form of payment as elected by the Participant prior to January 1, 2009. 

 

	 	(b)	A Participant with a Plan benefit that is solely a Grandfathered Amount the distribution of which has not commenced prior to January 1, 2009, shall be eligible for
a Plan benefit in accordance with the terms of the Plan as in effect as of the date of such Participant’s termination of employment, without regard to any forms of benefit that are no longer available under the Defined Benefit Plan of which the
Participant is a member as of the date distribution of such Participant’s benefit commences. 

 3.03 Supplemental Benefit
Due to Limitations Under Defined Benefit Plans. 
 The benefit payable to or on behalf of a Participant eligible under
Section 3.01 with a Determination Date on or after January 1, 2009, other than a Participant described in Section 3.02 above, shall be an amount equal to the excess, if any, of (X) over (Y) as follows: 

(X) The total benefit that would have been provided to the Participant under the various Defined Benefit Plans of which the Participant is
a member without regard to the limitations of Code Sections 415 or 401(a)(17), where such benefit is calculated in the form of a single life annuity payable as of the Determination Date. 

(Y) The benefit that would have been payable to the Participant under the various Defined Benefit Plans of which the Participant is a
member, after giving effect to the limitations of Code Section 415 and 401(a)(17) where such benefit is calculated in the form of a single life annuity payable as of the Determination Date. 

However, calculation of the benefit pursuant to this Section shall reflect any restrictions and/or modifications described in Appendix A
that may be applicable to the Participant. In the event that the Determination Date of a Participant is earlier than when the Participant would first be eligible for early commencement of benefits from the underlying Defined Benefit Plan, the
monthly amount payable upon such earlier commencement shall be reduced in accordance with the actuarial equivalent early commencement basis that would be applicable under the General Dynamics Salaried Retirement Plan for a Participant terminating
prior to the attainment of age 55 but with ten years of service. 
 3.04 Forms of Distribution for Grandfathered Amounts. Any
Grandfathered Amounts shall be subject to the distribution forms and elections under this Plan as in effect on December 31, 2004 to the extent that such forms continue to be available under the Defined Benefit Plan of which the

  
 4 

 
Participant is a member as of the date distribution of such Participant’s benefit commences, and such benefit shall be determined and payable as of such Defined Benefit Plan benefit
commencement date. 
 3.05 Forms of Distribution for Benefits Without Lump-Sum Option. Payment of benefits under the Plan (other than
with respect to Grandfathered Amounts), with respect to Defined Benefit Plans that as of January 1, 2005, did not provide for a lump sum payment option, shall be as follows: 

 

	 	(a)	The normal form of distribution of benefits subject to this Section 3.05 if the Participant is legally married at the Determination Date shall be in the form of a
100% Contingent Annuitant Option, which is a reduced retirement benefit payable to the Participant during his or her lifetime, with 100% of such retirement benefit continuing to and for the lifetime of the participant’s spouse, if such spouse
survives the Participant. 

  

	 	(b)	The normal form of distribution of benefits subject to this Section 3.05 if the Participant is not legally married at the Determination Date shall be in the form
of a single life annuitant option, which is a retirement benefit payable to the Participant for the remainder of his or her lifetime. 

 3.06 Forms of Distribution for Benefits With Lump-Sum Option. Payment of benefits under the Plan (other than with respect to Grandfathered Amounts), with respect to Defined Benefit Plans that as of
January 1, 2005, provided for a lump sum distribution option, shall be as follows: 
  

	 	(a)	The normal form of distribution of benefits subject to this Section 3.06 with respect to benefits for which a lump sum option under the underlying Defined Benefit
Plan was available as of January 1, 2005, shall be in a lump sum payment. 

  

	 	(b)	The normal form of distribution of benefits subject to this Section 3.06 but not subject to Section 3.06(a) shall be (1) if the Participant was legally
married at the Determination Date, in the form of a 100% Contingent Annuitant Option (as described in Section 3.05) and (2) if the Participant is not legally married at the Determination Date, in the form of a single life annuitant option
(as described in Section 3.05). 

 3.07 Election of Alternative Annuity Forms. With respect to non-Grandfathered
Amounts that are payable under Sections 3.05 or 3.06(b), a Participant may elect, at any time prior to the Determination Date, to change from the normal form of distribution to another optional form of distribution with an Actuarial Equivalent Value
that is provided for in the underlying Defined Benefit Plan. 
 3.08 Distribution Date of non-Grandfathered Amounts. 

 

	 	(a)	 Later of Age 55 or 6 Months Following Separation From Service. Except as provided in paragraph (b), below, distribution of a Participant’s
benefits under the Plan (other than with respect to Grandfathered Amounts) shall commence on the Participant’s Determination Date; provided however that distribution of such

  
 5 

	 	 
benefits shall commence no earlier than the first day of the first month that is more than 6 months following the Participant’s Separation from Service. Payments that are delayed pursuant to
the proviso in the preceding sentence shall be accumulated with interest during such deferral period based on the third segment rate in effect in November of the year prior to the year in which the Determination Date occurs and with application of
the §417(e)(3)(D) adjustment for plan years beginning prior to 2012. 

  

	 	(b)	Disability. If the Participant incurs a “disability” (as defined in Code Section 409A), distribution of the Participant’s benefits under the
Plan (other than with respect to Grandfathered Amounts) shall commence upon the Participant’s attainment of age 65. 

 3.09
Small-Sum Cashout. In the event that the single lump sum Actuarial Equivalent Value of any benefit subject to Section 3.05 or Section 3.06(b), determined as of the Determination Date (or the date specified in Section 3.08(b),
if applicable) is less than $100,000, such benefit shall be distributed in a single lump sum payment. In addition, in the event that the single lump sum Actuarial Equivalent Value of any benefit subject to Section 3.05 or Section 3.06,
aggregated with benefits (other than Grandfathered Amounts) under other plans of the Corporation that are of a “single type” with this Plan pursuant to Treas. Reg. § 1.409A-1(c)(2), is less than the applicable dollar amount under
§ 402(g)(1)(B) of the Code, the Corporation shall have the discretion to distribute such amount in a single lump sum payment. 
 3.10
Reemployment. Except as otherwise provided in this Section 3.10, there will be no suspension of benefits under this Plan in the event of reemployment of the Participant by the Corporation or any Subsidiary following the
Participant’s Determination Date. Re-employment of a Participant following such Participant’s Determination Date shall not affect the Participant’s rights to continued receipt of benefits previously earned by such Employee.
Notwithstanding the foregoing, if a Participant who is receiving Grandfathered Amounts is reemployed with the Corporation or an affiliate of the Corporation and, in connection with such reemployment, his Defined Benefit Plan benefit payment is
suspended, payment of his Grandfathered Amounts will be suspended for the same period. Payment of such Grandfathered Amounts will recommence at the same time as his or her benefit under the Defined Benefit Plan and recommencement of the
Grandfathered Amounts will be adjusted in accordance with the provisions of the Plan to reflect the period of suspension and benefits previously paid. However, any additional benefits earned attributable to service associated with the Grandfathered
Amounts shall be treated as non-Grandfathered Amounts. 
 3.11 Distribution of Benefit. In accordance with the
provisions of Section 409A, distributions of a Participant’s benefits (other than Grandfathered Amounts) shall be paid or commence no later than the fifteenth (15th) day of the third (3rd) month following the date on which payment of benefits is scheduled to commence pursuant to Section 3.08.

  
 6 

 SECTION 4 
 SPECIAL SUPPLEMENTAL BENEFITS 
 4.01 Participation. Recognizing the need to
make special retirement and other compensation or employee benefit provisions for certain Employees of Employing Units, the Corporation may, from time to time and in its best judgment, designate groups of select management or highly compensated
employees as being eligible to receive additional benefits, substitute benefits, or more restrictive benefits than are found in Section 3.03 of the Plan. Any such Employees or groups of Employees shall be described in Appendices attached to
this Plan or in other agreements with the Corporation or its Subsidiaries. 
 Such Employees shall not be eligible for a benefit under
Section 3.03 to the extent such appendices or agreements provide for benefits in lieu of benefits described in Section 3.03 unless such Appendix or agreement provides otherwise. For those Employees with individual agreements, unless
expressly provided in the agreement, the provisions of this Plan shall not apply to the benefit attributable to such agreement. 
 4.02
Benefits. Such benefits may be provided only to select management or highly compensated employees in such amounts as the Corporation determines are appropriate. 
 SECTION 5 
 MISCELLANEOUS PROVISIONS 

5.01 Construction. In the construction of the Plan the masculine shall include the feminine and the singular shall include the plural in all cases
where such meanings would be appropriate. This Plan shall be construed, governed, regulated, and administered according to the laws of the State of Virginia. 
 5.02 Employment. The Plan is not an employment contract. Participation in the Plan shall not give any Employee the right to be retained in the employ of the Corporation or its Subsidiaries, or upon
dismissal or upon his voluntary termination of employment, to have any right, legal or equitable, under the Plan or any portion thereof, except as expressly granted by the Plan. 
 5.03 Non-alienability of Benefits. No benefit under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge; and any attempt
to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be void; and no such benefit shall in any manner be liable for or subject to the debts, liabilities, engagements, or torts of the person entitled to such
benefit, except as specifically provided in the Plan. 
 5.04 Facility of Payment. If any recipient of benefits is, in the judgment of
the Corporation, legally incapable of personally receiving and giving a valid receipt for any payment due him under the Plan, the Corporation may, unless and until claims shall have been made by a duly appointed guardian or committee of such person,
make such payment or any part thereof to such person’s spouse, children, or other legal entity deemed by the Corporation to have incurred expenses or assumed responsibility for the expenses of such person. Any payment so made shall be a
complete discharge of any liability under the Plan for such payment. 

  
 7 

 5.05 Discretionary Payment of Benefits. In any instance in which the Corporation in its sole and
uncontrolled discretion believes such action to be in the best interest of the party entitled to receive any payment provided by this Plan, or to be in the best interests of the Corporation, Grandfathered Amounts payable in installments pursuant to
the provisions of this Plan may be paid in a single lump sum, the amount of which shall be of Actuarial Equivalent Value to the benefits for which the lump sum is to be substituted. It is intended by this Section 5.05 to vest the Corporation
with full discretion to administer this Plan with respect to Grandfathered Amounts and to determine when and under what circumstances deviations which accelerate payments of Grandfathered Amounts are necessary, desirable, or appropriate; and the
Corporation shall have full power to authorize such deviations as regards each payee separately. 
 5.06 Obligation to Pay Amounts
Hereunder. 
  

	 	(a)	No trust fund, escrow account, or other segregation of assets need be established or made by the Corporation to guarantee, secure, or assure the payment of any amount
payable hereunder. The Corporation’s obligation to make payments pursuant to this Plan shall constitute only a general contractual liability of the Corporation to individuals entitled to benefits hereunder and other actual or possible payees
hereunder in accordance with the terms hereof. Payments hereunder shall be made only from such funds of the Corporation as it shall determine, and no individual entitled to benefits hereunder shall have any interest in any particular asset of the
Corporation by reason of the existence of this Plan. It is expressly understood as a condition for receipt of any benefits under this Plan that the Corporation is not obligated to create a trust fund or escrow account, or to segregate any asset of
the Corporation in any fashion. 

  

	 	(b)	The Corporation may, in its sole discretion, establish segregated funds, escrow accounts, or trust funds whose primary purpose would be for the provision of benefits
under this Plan. If such funds or accounts are established, however, individuals entitled to benefits hereunder shall not have any identifiable interest in any such funds or accounts nor shall such individuals be entitled to any preference or
priority with respect to the assets of such funds or accounts. These funds and accounts would still be available to judgment creditors of the Corporation and to all creditors in the event of the Corporation’s insolvency or bankruptcy.

  

	 	(c)	A former Employee is not entitled to a benefit under this Plan to the extent that the liability for such benefit has been transferred to or assumed by a successor to
all or any portion of the business of the Corporation. 

 5.07 Administration. 

 

	 	(a)	Administrative Provisions of Defined Benefit Plans. To the extent consistent with the purposes and provisions of this Plan and as may be deemed necessary or
advisable in the best judgment of the Corporation, the Plan shall be operated under the Administrative and General Provisions of the Defined Benefit Plans. 

  
 8 

	 	(b)	Claims Procedures. Any application for benefits, inquiries about the Plan or inquiries about present or future rights under the Plan must be submitted in writing
to the person or persons (the “Claims Administrator”) selected by the Corporation or, at the election of the Corporation, by the Corporation’s Employee Benefit Appeals Committee (the Company or such Employee Benefit Appeals Committee
being hereinafter referred to as the “Committee”), as follows: 

  

	 	(i)	In the event that any application for benefits is denied in whole or in part, the Claims Administrator must notify the applicant, in written or electronic format, of
the denial of the application, and of the applicant’s right to review the denial. The notice of denial will be set forth in a manner designed to be understood by the applicant, and will include specific reasons for the denial, specific
references to the Plan provision upon which the denial is based, a description of any information or material that the Claims Administrator needs to complete the review, and an explanation of the Plan’s review procedure.

  

	 	(ii)	This notice will be given to the applicant within ninety (90) days after the Claims Administrator receives the application, unless special circumstances require an
extension of time, in which case, the Claims Administrator has up to an additional ninety (90) days for processing the application. If an extension of time for processing is required, written or electronic notice of the extension will be
furnished to the applicant before the end of the initial ninety (90)-day period. 

  

	 	(iii)	This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Claims Administrator is to render his or
her decision on the application. The applicant will then be permitted to appeal the denial in accordance with the Review Procedure described below. 

  

	 	(iv)	Any person (or that person’s authorized representative) for whom an application for benefits is denied, in whole or in part, may appeal the denial by submitting a
request for a review to the Claims Administrator within 60 days after the application is denied. The Claims Administrator will give the applicant (or his or her representative) a reasonable opportunity for a full and fair review of a claim and
adverse benefit determination, including: (A) the opportunity to submit written comments, documents, records and other information relating to the claim for benefits; (B) the provision, upon request and free of charge, of reasonable access
to and copies of, all documents, records and other information relevant to the claimant’s claim for benefits, and (C) a review that takes 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 in the initial benefit determination. A request for a review shall be in writing and shall be addressed to: 

  
 9 

					
		 	                             
                   	 	
		 	General Dynamics Corporation	 	
		 	2941 Fairview Park Drive	 	
		 	Falls Church, Virginia 22042	 	

  

	 	(v)	A request for review must set forth all of the grounds on which it is based, all facts in support of the request and any other matters that the applicant feels are
pertinent. The Claims Administrator may require the applicant to submit additional facts, documents or other material as he or she may find necessary or appropriate in making his or her review. 

 

	 	(vi)	The Claims Administrator will act on each request for review within sixty (60) days after receipt of the request, unless special circumstances require an extension
of time (not to exceed an additional sixty (60) days), for processing the request for a review. If an extension for review is required, written or electronic notice of the extension will be furnished to the applicant within the initial sixty
(60)-day period. The Claims Administrator will give prompt, written or electronic notice of his or her decision to the applicant. In the event that the Claims Administrator confirms the denial of the application for benefits in whole or in part, the
notice will outline, in a manner calculated to be understood by the applicant: (A) the specific reason or reasons for the adverse determination, (B) the specific Plan provisions upon which the decision is based, (C) a description of
any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary, (D) a description of the Plan’s review procedures and the time limits applicable to
such procedures, including a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on review. 

 

	 	(vii)	The Claims Administrator may establish rules and procedures, consistent with the Plan and with ERISA, as necessary and appropriate in carrying out his or her
responsibilities in reviewing benefit claims. The Claims Administrator may require an applicant who wishes to submit additional information in connection with an appeal from the denial of benefits to do so at the applicant’s own expense.

  

	 	(viii)	No legal action for benefits under the Plan may be brought until the applicant (A) has submitted a written application for benefits in accordance with the
procedures described by paragraph (i) above, (B) has been notified by the Claims Administrator that the application is denied, (C) has filed a written request for a review of the application in accordance with the appeal procedure
described in paragraph (iv) above and (D) has been notified in writing or electronically that the Claims Administrator has denied the appeal. 

  
 10 

	 	(c)	Committee. Unless otherwise provided by the Corporation, the Committee shall rule in place of the Corporation and the Committee’s ruling shall be the final
decision of the Corporation. Benefits shall be paid under the Plan only if the Corporation or the Committee in its sole discretion, determines that a Participant is entitled to them. There shall be no duplication of benefits between this Plan and
its Appendices and any other plan or agreement with the Corporation or its Subsidiaries for the same period of service unless otherwise specifically stated in the Plan, Appendices or such other plan or agreement. 

SECTION 6 

AMENDMENT AND TERMINATION OF PLAN 
 6.01 Amendment. The Chairman of the Board of Directors of the Corporation reserves the right to modify or amend this Plan in whole or in part, effective as of any specified date; provided, however,
that the Chairman shall have no authority to modify or amend the Plan with respect to the benefit provided by Section 3.03 to: 
  

	 	(a)	reduce any benefit accrued hereunder based on service and compensation to the date of amendment unless such action is necessary to prevent this Plan from being subject
to any provision of Title I, Subtitle B, Parts 2, 3 or 4 of ERISA; 

  

	 	(b)	permit the accrual, holding or payment of actual shares of General Dynamics Corporation common stock under the Plan. 

6.02 Termination. 
  

	 	(a)	The Chairman of the Board of Directors of the Corporation reserves the right to terminate this Plan, in whole or in part. This Plan shall be automatically terminated
upon a dissolution of the Corporation (but not upon a merger, consolidation, reorganization, recapitalization, or acquisition of a controlling interest in the voting stock of the Corporation by another); upon the Corporation being legally
adjudicated as bankrupt; upon the appointment of a receiver or trustee in bankruptcy with respect to the Corporation’s assets and business if such appointment is not set aside within ninety (90) days thereafter; or upon the making by the
Corporation of an assignment for the benefit of creditors. 

  

	 	(b)	Upon termination of this Plan, no additional Employees shall become entitled to receive all benefits hereunder; and all benefits accrued through the date of termination
(calculated as if the date of such termination were the date on which the Employee’s employment ceased) will become non-forfeitable. 

 6.03 Delegation. The Chairman of the Board of Directors of the Corporation may delegate his powers under this Section 6 by written delegation. 

6.04 Section 409A. It is intended that any income or payments provided pursuant to the Plan will not be subject to the additional tax and
interest under Code Section 409A, and all regulations issued thereunder and applicable guidance thereto (“Section 409A”), and the Plan shall be 

  
 11 

 
interpreted and construed on a basis consistent with such intent. The preceding shall not be construed as a guarantee of any particular tax treatment of any amounts paid or payable hereunder.

  
 12 

 Appendix A 

(Defined Benefit Plans Subject to the Provisions of Section 3.03) 
 The following Defined Benefit Plans are subject to the provisions of Section 3.03. Where noted, the benefits related to the inclusion of these Defined Benefit Plans under this Plan provide
supplemental benefits related to corporate acquisitions or, as applicable, supersede the applicability of the provisions of the indicated prior plan providing similar coverage and as such represent an amendment and restatement of such plan.
Likewise, where noted, the provisions of Section 3.03 are modified to the extent specified in this Appendix. 
  

			
	 Defined Benefit Plan
	  	 Modifications and Effective Date

		
	General Dynamics Salaried Retirement Plan—Corporate Legacy Provisions (known prior to January 1, 2007 as General Dynamics Corporation Retirement Plan for Salaried
Employees)	  	Effective Date: January 1, 1983.
		
	Retirement Plan for the Resources Group Salaried Employees	  	Effective Date: January 1, 1983.
		
	General Dynamics Salaried Retirement Plan—ATS Legacy Provisions (known prior to January 1, 2007 as Retirement Plan for Management/Technical Employees of General Dynamics
Advanced Technology Systems, Inc., the Plan hereby supersedes the Lucent Technologies Inc. Non-Qualified Pension Plan)	  	Effective Date: October 1, 1997.
		
	General Dynamics Salaried Retirement Plan—Armament Systems and Defense Systems Legacy Provisions (known prior to January 1, 2007 as Retirement Plan for Salaried Employees,
AS/DS Legacy Provisions, which superseded the Retirement Plan for Non-Represented Employees of General Dynamics Armament/Defense Systems, the Plan hereby supersedes the Martin Marietta Corporation Supplemental Excess Retirement Plan)	  	Effective Date: January 1, 1997.
		
	General Dynamics Salaried Retirement Plan—BIW Legacy Provisions (known prior to January 1, 2007 as Bath Iron Works Corporation Pension Plan for Salaried
Employees)	  	The benefit under Section 3.03 is determined taking into account post December 31, 1996 benefit service only. Effective Date: January 1,
1997.

  
 A-1

			
	 Defined Benefit Plan
	  	 Modifications and Effective Date

		
	General Dynamics Salaried Retirement Plan—Decision Systems Traditional Legacy Provisions (known prior to January 1, 2007 as Retirement Plan for General Dynamics Decision
Systems, Inc. Traditional Legacy Provisions, which superseded a part of the Retirement Plan for General Dynamics Decision Systems, Inc., the Plan hereby supersedes the Motorola Supplemental Pension Plan)	  	For Employees that participated and were vested in a benefit under the Motorola Elected Officers Supplementary Retirement Plan as of September 27, 2001 the benefit under
Section 3.03 is determined taking into account post September 27, 2001 benefit service only. Effective Date: September 28, 2001.
		
	General Dynamics Salaried Retirement Plan—Decision Systems Portable Legacy Provisions (known prior to January 1, 2007 as General Dynamics Salaried Retirement Plan for
Legacy Decision Systems Portable Plan Employees, which superseded a part of the Retirement Plan for General Dynamics Decision Systems, Inc., the Plan hereby supersedes the Motorola Supplemental Pension Plan)	  	For Employees that participated and were vested in a benefit under the Motorola Elected Officers Supplementary Retirement Plan as of September 27, 2001 the benefit under
Section 3.03 is determined taking into account post September 27, 2001 benefit service only. Effective Date: September 28, 2001.
		
	General Dynamics Salaried Retirement Plan—GDIS Legacy Provisions (known prior to January 1, 2007 as Retirement Plan for General Dynamics Information Systems, Inc., the
Plan hereby supersedes the Ceridian Corporation Benefit Equalization Plan)	  	The benefit under Section 3.03 is determined taking into account compensation described in Section 3.03 and, in addition, any amount that would have otherwise been paid as base
salary or bonus but for the Participant’s election pursuant to the Ceridian Corporation Deferred Compensation Plan. Effective Date: January 1, 1998.
		
	General Dynamics Salaried Retirement Plan—GSC Legacy Provisions (known prior to January 1, 2007 as Retirement Plan for Salaried Employees, GSC Legacy Provisions, which
superseded the Retirement Plan for General Dynamics Government Systems Corporation, the Plan hereby supersedes the GTE Excess Pension Plan)	  	The benefit under Section 3.03 is determined based on the normal form of payment. The benefit under Section 3.03 is determined taking into account compensation described in Section
3.03 and, in addition, certain forms of compensation not covered under the Defined Benefit Plan prior to 1995. Optional forms of payment for Grandfathered Amounts are calculated independently of the Defined Benefit Plan but using the same
adjustments as provided under that plan, but otherwise based on Section 3 of the Plan. Effective Date: September 1, 1999.
		
	General Dynamics Salaried Retirement Plan—Muskegon Legacy Provisions (known prior to January 1, 2007 as Retirement Plan for Salaried Employees of GDLS Muskegon
Operations)	  	The benefit under Section 3.03 is determined taking into account post March 31, 1996 benefit service only. Effective Date: April 1,
1996.

  
 A-2

			
	 Defined Benefit Plan
	  	 Modifications and Effective Date

		
	General Dynamics Salaried Retirement Plan—NASSCO Legacy Provisions (known prior to January 1, 2007 as NASSCO Retirement Plan, the Plan hereby supersedes the NASSCO
Supplemental Retirement Plan)	  	Only Employees designated by National Steel and Shipbuilding Corporation shall be eligible for the benefit under Section 3.03. Effective Date: November 10,
1998.
		
	General Dynamics Salaried Retirement Plan—Saco Legacy Provisions (known prior to January 1, 2007 as Retirement Plan for Salaried Employees of General Dynamics Armament
Systems—Saco Operations)	  	The benefit under Section 3.03 is determined taking into account post December 31, 2000 benefit service only. Effective Date: January 1, 2001.
		
	General Dynamics Salaried Retirement Plan—OTS Garland Legacy Provisions (known prior to January 1, 2007 as Retirement Plan for Salaried Employees of General Dynamics
Ordnance and Tactical Systems, Inc. (Garland))	  	The benefit under Section 3.03 is determined taking into account post September 3, 2003 benefit service only. Effective Date: September 4, 2003.
		
	General Dynamics Salaried Retirement Plan	  	Effective Date: January 1, 2007.

  
 A-3

 Appendix B 

(Bath Iron Works Corporation) 

B-1. Purpose, Superseding Provision. The purpose of this Appendix B is to describe certain benefits that were previously described in the Bath
Iron Works Corporation Supplemental Executive Retirement Program (Principal Officers, Tier I, and Tier II Employees) (the “Bath SERP”) as of December 31, 1996, that are being provided for those Employees of Bath Iron Works Corporation
(“Bath”) who continue in employment with the Corporation on or after January 1, 2005. The provisions applicable to employees who have terminated or retired prior to January 1, 2005, continue to be described by the provisions
of the plan as it existed prior to January 1, 2005. 
 This Appendix forms a part of the Plan to which it is attached and its terms shall
supersede other provisions of the Plan to the extent such other provisions are inconsistent with this Appendix. 
 B-2. Definitions.
Capitalized terms in this Appendix not defined elsewhere in the Plan shall have the meaning assigned to them below. 
  

	 	(1)	Annuity Value of the Non-Program Benefits. The “Annuity Value” of any Non-Program Benefit is twelve times the initial monthly amount expressed as a
straight life annuity commencing at the time that Bath SERP benefits under this Appendix B commence. 

  

	 	(2)	Annuity Value of the Social Security Benefit. The Annuity Value of the Social Security Benefit is twelve times the initial monthly amount shown on the Notice of
Award from the Social Security Administration commencing at the time such Social Security Benefit becomes Receivable. The Tier II Employee shall provide the Corporation with a copy of such Notice of Award prior to the time such Social Security
Benefit becomes Receivable. 

  

	 	(3)	Average Earnings. “Average Earnings” for purposes of determining the Bath SERP benefit for a Tier II Employee means the average of the highest
thirty-six (36) consecutive months of Earnings within the sixty-month (60) period immediately preceding retirement, death, or disability, multiplied by twelve (12). 

 

	 	(4)	 Earnings. “Earnings” for each month includes base salary for such month plus one-twelfth ( 1/12) of the amount earned under the General Dynamics Corporation
Second Amended and Restated 1997 Incentive Compensation Plan for the calendar year in which such month occurs. 

  

	 	(5)	Base Plans. “Base Plans” are the General Dynamics Salaried Retirement Plan, the General Dynamics Salaried Retirement Plan—BIW Legacy Provisions
(known prior to January 1, 2007, as the Bath Iron Works Corporation Pension Plan for Salaried Employees), and the Bath Iron Works Corporation Pension Plan for Hourly Employees. 

  
 B-1

	 	(6)	Company. “Company” means Bath Iron Works Corporation and its predecessor, Congoleum Corporation and CC Liquidating Corp. 

 

	 	(7)	Credited Service. “Credited Service” means the period of an employee’s continuous service from his most recent date of employment, in any
capacity, with the Corporation. Credited service will include any period prior to the earliest of the Tier II Employee’s attaining age sixty-five (65), voluntary retirement, or voluntary termination of employment. 

 

	 	(8)	Early Retirement Date. “Early Retirement Date” means any date prior to Normal Retirement Date on which the Tier II Employee’s employment with the
Corporation terminates after having attained age fifty-five (55) and completed ten (10) years of Credited Service. 

  

	 	(9)	 Executive Service. “Executive Service” means that period of an executive’s Credited Service accrued as a Tier II Employee. For
any computation under this Appendix, “Years of Executive Service” and “Years of Projected Executive Service” shall be expressed as a whole number representing the number of full years of Executive Service or Projected Executive
Service, as the case may be, and a fraction representing any partial years treating each calendar month during which the Tier II Employee is employed as a Tier II Employee for at least one-half ( 1/2) of the month as a full month.

  

	 	(10)	Non-Program Benefit. “Non-Program Benefit” means any of the following: 

 

	 	a.	Except to the extent attributable to voluntary contributions by the Tier II Employee, a retirement benefit from any Base Plans, defined benefit or defined contribution
retirement plan maintained by the Corporation or any of its operating units; 

  

	 	b.	A benefit from any individual contract between the Tier II Employee and the Corporation or any of its operating units or any predecessor of any of them providing for
periodic payments from commencement thereof until death (with or without survivor benefits of optional modes of settlement) in the event of retirement or other termination of employment, other than a contract which offsets benefits under Section B-5
against the benefits provided under the contract. 

  

	 	(11)	Normal Retirement Date. “Normal Retirement Date” means the first day of the month following the day a Tier II Employee attains age sixty-five (65).

  

	 	(12)	Projected Executive Service. “Projected Executive Service” means that period of Executive Service which a Tier II Employee would accrue if he should
remain a Tier II Employee covered by this Appendix B until his Normal Retirement Date. 

  

	 	(13)	 Receivable. A Social Security Benefit is considered “Receivable” from and after the later of (i) commencement of benefits under
this Appendix B, or (ii) the earliest 

  
 B-2

	 	 
date on which such Social Security Benefit is, or upon application, would have been payable to the Tier II Employee. 

 

	 	(14)	Retirement. “Retirement” means any termination of employment with the Corporation on an Early Retirement Date or on or after Normal Retirement Date.
Retirement or other termination of employment shall be “Voluntary” if initiated by the Tier II Employee, or “Involuntary” if initiated by the Corporation notwithstanding that the Tier II Employee shall have consented thereto or
shall have resigned in response to a Corporate initiative. 

  

	 	(15)	Social Security Benefit. “Social Security Benefit” means the Tier II Employee’s Primary Insurance Amount, reduced for commencement prior to Social
Security Normal Retirement Age, under the Social Security Act as in effect on the date such benefit becomes Receivable. 

  

	 	(16)	Tier II Employee. “Tier II Employee” means any Company executive whom the Company had designated as a Tier II Employee and remained in such designation
as of September 13, 1995, the date General Dynamics Corporation acquired Bath Iron Works Corporation. 

 B-3. Covered
Employees. A Covered Employee is any Employee who has been designated as a Tier II Employee. 
 B-4. Amount of Benefit. The amount of
benefits payable to a Tier II Employee shall equal the excess, if any, of (a) the Tier II Benefit payable to such Employee under the provisions described in Section B-5, or in the case of death, the benefit payable on behalf of such Employee
under the provisions described in Section B-7, over (b) the benefit determined in accordance with the provisions of Section 3.03 and Appendix A. 
 Benefits payable under this Section B-4 shall be in addition to any benefit payable under the provisions of Section 3.03 and Appendix A. 
 B-5. Tier II Benefit. The amount of a Covered Employee’s Tier II Benefit shall be determined as follows: 
  

	 	(1)	 Normal Retirement Benefit. A Tier II Employee retiring under this Appendix B on or after Normal Retirement Date shall receive a monthly Normal
Retirement Benefit equal to one-twelfth
( 1/12) of the amount determined by:

  

	 	a.	Taking the amount which is fifty percent (50%) of Average Earnings at Normal Retirement Date and reducing such amount by the Annuity Value of the Non-Program
Benefits and by the Annuity Value of the Social Security Benefit; and 

  

	 	b.	Multiplying the amount determined by application of the preceding clause (a) by a fraction, the numerator of which is Years of Executive Service at Normal
Retirement Date to a maximum of fifteen (15), and the denominator of which is fifteen (15). 

  
 B-3

	 	(2)	 Early Retirement Benefit. A Tier II Employee retiring under this Appendix B on an Early Retirement Date shall receive a monthly Early Retirement
Benefit equal to one-twelfth ( 1/12) of the
amount determined by: 

  

	 	a.	Taking the amount which is fifty percent (50%) of Average Earnings at Early Retirement Date and subtracting from such amount the product of (i) such amount
times (ii) 0.004 times (iii) the number of full months by which the commencement of benefits under this B-5 precedes age sixty-two (62); 

  

	 	b.	Reducing the amount in the preceding clause (a) by the Annuity Value of the Non-Program Benefits, and further reducing the amount by the Annuity Value of the
Social Security Benefit commencing at the time such Social Security Benefit becomes Receivable; and 

  

	 	c.	Multiplying the amount determined by application of the preceding clauses (a) and (b) by the product of (i) a fraction, the numerator of which is Years
of Executive Service at Early Retirement Date to a maximum of twenty-five (25), and the denominator of which is Years for Projected Executive Service to a maximum of twenty-five (25), times (ii) a fraction, the numerator of which is Years of
Projected Executive Service to a maximum of twenty (20), and the denominator of which is twenty (20). 

  

	 	(3)	Vested Benefit. After completion of five (5) years of Credited Service, a Tier II Employee’s rights to benefits under this Appendix B will, subject to
the provisions of this Plan, become fully vested. The benefit payable under this Appendix B to a Tier II Employee who terminates employment prior to his Early Retirement Date will be the same as the Early Retirement Benefit otherwise payable, based
on Years of Executive Service and Average Earnings computed as of the date of termination, except that the multiplicand in clause B-5(2)(a)(iii) shall be the number of full months by which the commencement of benefits under this B-5 precedes age
sixty-five (65). 

 B-6. Form and Timing of Benefit. 

 

	 	(1)	The commencement of B-4 benefits payable to a Tier II Employee retiring under this Appendix B shall be determined in accordance with Section 3 of the Plan.

  

	 	(2)	A Tier II Employee will receive B-4 benefits in the forms provided for under Sections 3.04, 3.05, and 3.07 of the Plan, as applicable. 

B-7. Death Benefit. If an active Tier II Employee dies before Retirement and while still employed by the Corporation, his Tier II Benefit used to
determine the benefit payable to his surviving spouse will be a monthly benefit equal to seventy-five percent (75%) of the amount of the Normal Retirement Benefit determined in accordance with B-5 based on the Executive Service and Average
Earnings as of the date of death, and 

  
 B-4

	 	(1)	Assuming that the Tier II Employee is living and that such benefit is payable to him in a straight life annuity commencing on the first day of the month following the
date of death; 

  

	 	(2)	In determining any reduction for the Annuity Value of the Non-Program Benefits and for the Annuity Value of the Social Security Benefit, considering only the Tier II
Employee’s Social Security Benefit and those Non-Program Benefits to which the Tier II Employee would then or thereafter become entitled had he been living and terminated his employment on the date of death; 

 

	 	(3)	Assuming that the Social Security Benefit becomes Receivable from and after the date of death, irrespective of whether or not such benefit has actually commenced; and,

  

	 	(4)	Calculating the Annuity Value of the Non-Program Benefits as if the Tier II Employee were living and had terminated his employment on the date of death, basing such
calculation upon the Tier II Employee’s employment and earnings history and other circumstances existing at the date of death, but assuming that the Tier II Employee’s age is the later of his age at the date of death, the earliest age at
which such Non-Program Benefit would upon application be payable, or age sixty-two (62). 

 The benefit payable to a surviving
spouse shall be paid monthly commencing on the first day of the month following the month in which the Tier II Employee dies. The last payment to a surviving spouse shall be on the first day of the month in which the surviving spouse dies or
remarries, whichever occurs first. 
 Upon the Tier II Employee’s death if the Tier II Employee’s spouse predeceases him, or upon the
earlier of the death or remarriage of such spouse if the Tier II Employee’s spouse survives him, if one or more children of the Tier II Employee shall then be living and under twenty-one (21) years of age, an equal share of the Death
Benefit shall be apportioned to each such child who is then living and under age twenty-one (21). The share so apportioned to each child shall be paid to him as a monthly benefit commencing on the first day of the month following the month in which
the Tier II Employee dies or, if his spouse survives him, following the earlier of the month in which such spouse dies or the month in which such spouse remarries. The last payment of a child’s monthly benefit under this Appendix shall be on
the first day of the month in which he dies or attains age twenty-one (21), whichever occurs first. 
 B-8. Competition. Notwithstanding
anything elsewhere herein contained, if, while employed by the Corporation, a Tier II Employee engages in competitive activities without prior authorization of the Corporation, such Tier II Employee, his surviving spouse, his children, and any
contingent annuitant designated by him shall be entitled to no further benefits hereunder. For such purpose, to “engage in competitive activities” shall mean, directly or indirectly, to own, manage, operate, control, or participate in the
ownership, management, operation, or control of, or be connected as an officer, employee, partner, director, or otherwise with, or have any financial interest in, or aid or assist anyone else in the conduct of, any business which competes with, or
which contemplates competition with, any business conducted by the Corporation, or be any group, 

  
 B-5

 
division or subsidiary of the Corporation, in any area where such business is being conducted by the Corporation at the time of such termination. For the purposes of the foregoing provisions,
ownership of not more than two percent (2%) of the voting stock of any publicly held corporation shall not be considered engaging in competitive activities. 

  
 B-6

 Appendix C 

(General Dynamics Information Systems, Inc.) 
 C-1. Purpose, Superseding Provision. The purpose of this Appendix C is to provide for certain provisions for those Employees of General Dynamics Information Systems, Inc. (“GDIS”)
described below. This Appendix forms a part of the Plan to which it is attached and its terms shall supersede other provisions of the Plan to the extent such other provisions are inconsistent with this Appendix. 

Notwithstanding anything contained herein to the contrary, pursuant to the Personnel Agreement dated December 31, 1997, between Ceridian Corporation
and General Dynamics Corporation (the “Personnel Agreement”), and the March 17, 1998 letter agreement between Ceridian Corporation and General Dynamics Corporation, participants in the Ceridian Corporation Deferred Compensation Plan
(the “Deferred Compensation Plan”) listed on Schedule 4.2(c) of the Personnel Agreement who went to work for General Dynamics Corporation shall have their benefits under the Deferred Compensation Plan paid in accordance with the provisions
of the Deferred Compensation Plan as it existed as of December 31, 1997. The benefits for Employees covered by these provisions are in addition to any benefits that may be provided under Section 3.03 of the Plan. 

  
 C-1

 Appendix D 

(General Dynamics Government Systems Corporation) 
 D-1. Purpose, Superseding Provision. Effective September 1, 1999, the purpose of this Appendix D is to provide for certain provisions for those Employees of General Dynamics Government Systems
Corporation (“GSC”) described below (the “Appendix D Employees”). This Appendix forms a part of the Plan to which it is attached and its terms shall supersede other provisions of the Plan to the extent such other provisions are
inconsistent with this Appendix. This Appendix consists of two parts: (i) an ISEP Executive Minimum and (ii) an Executive Retired Life Insurance Plan (each a “Part” and collectively “Parts”). Both such Parts provide
benefits for Employees covered by these provisions, benefits that are in addition to any benefits that may be provided under Section 3.03 of the Plan. An Appendix D Employee will participate under a Part or Parts based on the eligibility
provisions of that Part. 
 D-2. Definitions. Capitalized terms in this Appendix not defined elsewhere in the Plan shall have the meaning
assigned to them below. 
  

	 	(1)	“Administrator” shall mean the Corporation, or the person (including but not limited to GSC) to whom administrative duties are delegated to by the
Corporation. 

  

	 	(2)	“Base Salary” shall mean the Appendix D Employee’s annual basic remuneration (exclusive of overtime, differentials, premiums and other similar types of
payment, but inclusive of commissions and bonuses on account of sales when received by an Appendix D Employee pursuant to a written commitment of his or her employer). 

 

	 	(3)	“GSC Legacy Plan” means the General Dynamics Salaried Retirement Plan—GSC Legacy Provisions (known from January 1, 2005 to January 1, 2007 as
the Retirement Plan for Salaried Employees, GSC Legacy Provisions and prior to January 1, 2005 as the Retirement Plan for General Dynamics Government Systems Corporation). 

 

	 	(4)	“GSC Qualified Plan” means the Retirement Plan for General Dynamics Government Systems Corporation effective September 1, 1999. 

 

	 	(5)	“GTE Executive Life Insurance Plan” means the GTE Executive Life Insurance Plan effective January 1, 1979. 

 

	 	(6)	“Predecessor Company” shall mean, for periods prior to September 1, 1999, the GTE Government Systems Corporation and any Affiliate as defined by the GTE
Government Systems Corporation Pension Plan for Salaried Employees at August 31, 1999. 

 ISEP Executive
Minimum 
 D-3. Covered Employees. For purposes of this part, an Appendix D Employee is an Employee who is a member of a select group
of management or highly compensated employees of GSC and 

  
 D-1

 
who Separates as a Special Separatee under Section 9 of the GSC Qualified Plan prior to December 31, 2002, regardless of whether he is eligible to receive a Retirement Benefit under the
GSC Qualified Plan. 
 D-4. Benefit. The benefit payable to an eligible Appendix D Employee under this Part shall be a single life
annuity equal to the Actuarial Equivalent Value (as described in (3)(a) below) of the excess, if any, of (1) over (2) as follows: 
  

	 	(1)	The product of (a) times (b) as follows: 

  

	 	(a)	The Appendix D Employee’s annual rate of compensation as of the day immediately preceding the Appendix D Employee’s Separation Date, as defined in the GSC
Qualified Plan, whereby the annual rate of compensation shall be determined by including only the types of remuneration included in determining Modified Average Annual Compensation under the GSC Qualified Plan, but for periods prior to
September 1, 1999, without regard to awards from the Predecessor Company under the Management Incentive Plan, the International Team Incentive Program, and the GTE Investment Management Corporation Incentive Plan, times

  

	 	(b)	The Payment Ratio (as described in (3)(b) below) for the Appendix D Employee; over 

 

	 	(2)	The ISEP Lump Sum as defined by Section 9 of the GSC Qualified Plan (plus the portion of such ISEP Lump Sum attributable to Appendix A), determined without regard
to any reduction in the ISEP Lump Sum attributable to a failure to execute a Separation Agreement and General Release there under. 

  

	 	(3)	For purposes of this D-4, the following shall apply: 

  

	 	(a)	The Actuarial Equivalent Value shall be determined in the same manner as it is determined for purposes of calculating the ISEP Annuity under Section 9 of the GSC
Qualified Plan. 

  

	 	(b)	The Payment Ratio shall be determined as follows based on the Appendix D Employee’s career band and Base Salary at termination: 

 

					
	 Career Band
	  	 Base Salary Breakpoints
	  	Payment Ratio
			
	Tan	  	$80,000 or higher	  	50%
			
	Orange	  	Less than $100,000	  	50%
			
	Orange	  	$100,000 or higher	  	75%
			
	Yellow	  	Less than $155,000	  	75%
			
	Yellow	  	$155,000 or higher	  	100%

  
 D-2

	 	(4)	The amounts determined under D-4 shall be reduced to 50% of the amounts determined unless the Appendix D Employee (or, if applicable, the Appendix D Employee’s
personal representative) executes a Separation Agreement and General Release pursuant to the requirements of Section 9 of the GSC Qualified Plan. 

 D-5. Timing of Benefit. An Appendix D Employee, surviving spouse or designated beneficiary who is entitled to an ISEP Executive Minimum benefit under this Part shall be paid such ISEP Executive
Minimum benefit under this Part when benefits become due and payable to such person under the GSC Qualified Plan. 
 D-6. Form of
Benefit. Any benefits payable pursuant to this Part shall be paid under the same conditions and restrictions as would apply to the benefits if they were provided by the GSC Qualified Plan at the time of retirement, subject to the following:

  

	 	(1)	An Appendix D Employee shall have the right to elect to receive benefits under this Part in any one of the forms provided under the GSC Qualified Plan provided that an
annuity option shall be available under this Part only if the Appendix D Employee elects the annuity payment option prior to such Appendix D Employee’s termination of employment. 

 

	 	(2)	Notwithstanding D-6 (1), if the Appendix D Employee is also entitled to a benefit pursuant to the provisions of Appendix A, then both the benefit attributable to
Appendix A and the benefit attributable to this Part of Appendix D must be paid at the same time and under the same optional form. 

  

	 	(3)	If an Appendix D Employee elects to receive benefits under this Part in a form other than a single life annuity, the benefits shall be computed so as to be the
Actuarial Equivalent of such benefits in the form of a single life annuity using the actuarial tables and interest rates then in effect under the GSC Qualified Plan. 

Executive Retired Life Insurance Plan 
 D-7. Covered Employees. For purposes of this Part, an Appendix D Employee is an Employee of GSC who as of June 21, 1999, participated in the GTE Executive Retired Life Insurance Plan (the
“ERLIP”) and whose combined age and years of service as of June 21, 1999, was at least 66 or who was otherwise within five years of eligibility for the ERLIP as of that date. 
 In order to be eligible to obtain benefits under this Part, an Appendix D Employee must retire pursuant to the terms of the GSC Legacy Plan, provided however that retirement with a deferred vested benefit
shall not be deemed to satisfy this provision except in the case of a participant who terminates employment with GSC having attained age 60 with at least 10 years of service. 
 D-8. Benefit. A participant eligible to receive benefits under this Part shall receive non-contributory life insurance benefits under the following schedule: 

  
 D-3

			
	 Grandfathered
 Salary Grade
 at Termination
	  	Insurance
		
	15	  	1.0 x base salary
		
	16	  	1.5 x base salary
		
	17	  	2.0 x base salary
		
	18	  	2.5 x base salary
		
	19 and above	  	3.0 x base salary

 The Administrator, in
its sole discretion, may amend the above schedule. 
 Any Appendix D Employee who is demoted, downgraded, transferred or assigned to a position,
whether or not such position is eligible to participate in this Part, may under extraordinary circumstances as determined by the Administrator, remain eligible to receive benefits based upon his highest salary grade and Base Salary while
participating in this Part. 
 D-9. Timing of Benefit. An Appendix D Employee who satisfies the criteria in D-7 of this Part shall
receive benefits only upon retirement pursuant to the terms of the GSC Legacy Plan. The benefits under this Part shall be in lieu of any other life insurance coverage provided for retired employees by GSC. 

D-10. Form of Benefit. The benefit provided by this Part is in the form of non-contributory life insurance. However, an Appendix D Employee
eligible to receive benefits under this Part may elect with respect to Grandfathered Amounts to convert all or part of this life insurance benefit to a supplementary retirement benefit as follows: 

 

	 	(1)	An Appendix D Employee may with respect to Grandfathered Amounts elect to receive a supplementary retirement benefit in any form provided under the GSC Legacy Plan as
of December 31, 2004, or in two to thirty annual installments, or as otherwise may be approved by the Administrator. The supplementary retirement benefit shall be based upon the present value of the life insurance benefit defined in this Part,
using the actuarial tables and interest rates then in effect for the GSC Legacy Plan. 

  

	 	(2)	In the event that an Appendix D Employee elects to receive a supplementary retirement benefit with respect to Grandfathered Amounts other than in the single life
annuity form and/or other than at age 65, the amount of such benefits shall be actuarially adjusted using the actuarial table and interest rates then in effect for the GSC Legacy Plan. 

 

	 	(3)	 If an Appendix D Employee elects to receive with respect to Grandfathered Amounts a supplementary retirement benefit in an installment form and dies
prior to the payment of all installments, any unpaid installments shall be paid to the Appendix D Employee’s beneficiary or, in the absence of a designated beneficiary, to the Appendix D Employee’s estate. The designated beneficiary shall
have the option, in accordance with Section 3.03 of the Plan, to continue to receive annual 

  
 D-4

	 	 
payments for the period elected by the Appendix D Employee or to receive the unpaid installments in a lump sum. In the event that a lump sum is elected, the lump sum will be adjusted using the
actuarial tables and interest rates then in effect for the GSC Legacy Plan. 

  
 D-5

 Appendix E 

(General Dynamics Armament Systems and General Dynamics Defense Systems) 
 E-1. Purpose, Superseding Provision. The purpose of this Appendix E is to describe certain benefits that were previously described in the Martin Marietta Supplementary Pension Plan for Employees of
Transferred GE Operations as of December 31, 1996, that are being provided to certain employees who continue in employment with the Corporation on or after January 1, 2005. The provisions applicable to employees who have terminated or
retired prior to January 1, 2005, continue to be described by the provisions of the plan as it existed prior to January 1, 2005. 

This Appendix forms a part of the Plan to which it is attached and its terms shall supersede other provisions of the Plan to the extent such other
provisions are inconsistent with this Appendix. 
 E-2. Definitions. Capitalized terms in this Appendix not defined elsewhere in the Plan
shall have the meaning assigned to them below. 
  

	 	(1)	 Annual Estimated Social Security Benefit. “Annual Estimated Social Security Benefit” shall mean the annual equivalent of the maximum
possible Primary Insurance Amount payable, after reduction for early retirement, as an old-age benefit to an employee who retired at age sixty-two (62) on January 1st of the calendar year in which occurred the Employee’s actual date of retirement or death, whichever is earlier.
Such Annual Estimated Social Security Benefit shall be determined by the Corporation in accordance with the Federal Social Security Act in effect at the end of the calendar year immediately preceding such January 1st. 

If an Employee has less than thirty-five (35) years of Credited Service, the Annual Estimated Social Security Benefit shall be the
amount determined under the first paragraph hereof multiplied by a fraction, the numerator of which shall be the number of years of the Employee’s Credited Service to his date of retirement or death, whichever is earlier, and the denominator of
which shall be thirty-five (35). 
 The Annual Estimated Social Security Benefit as so determined shall be adjusted to include
any social security, severance or similar benefit provided under foreign law or regulation as the Corporation may prescribe by rules and regulations issued with respect to this Plan. 

 

	 	(2)	Annual Retirement Income. “Annual Retirement Income” shall mean the amount determined by multiplying 1.75% of the Employee’s Average Annual
Compensation by the number of years of Credited Service completed by the Employee at the date of his retirement or death, whichever is earlier. 

  

	 	(3)	 Average Annual Compensation. “Average Annual Compensation” means one-third of the Employee’s Compensation for the highest
thirty-six (36) consecutive months during the last one-hundred twenty (120) months before his date of retirement or death, whichever is earlier. In computing the Average Annual Compensation, normal straight-time earnings shall be
substituted for actual 

  
 E-1

	 	 
Compensation for any month in which such normal straight-time earnings are greater. 

  

	 	(4)	Benefit Eligibility Service. “Benefit Eligibility Service” shall have the same meaning herein as Benefit Eligibility Service in the Legacy Plan.

  

	 	(5)	Compensation. “Compensation” for the purposes of the Supplementary Pension defined in this Appendix E shall mean salary, including any deferred salary
approved by the Corporation as compensation for purposes of the Supplementary Pension benefit, plus 

  

	 	a.	For Employees then eligible for Incentive Compensation, the total amount of any Incentive Compensation earned except to the extent such Incentive Compensation is
excluded by the Corporation; 

  

	 	b.	For Employees who would then have been eligible for Incentive Compensation if they had not been participants in a Sales Commission Plan or other variable compensation
plan, the total amount of sales commissions (or other variable compensation) earned; 

  

	 	c.	For all other Employees, the sales commissions and other variable compensation earned by them but only to the extent such earnings were then included under the Martin
Marietta Corporation Retirement Income Plan II, plus any amounts (other than salary and those mentioned in clauses (a) and (b) above) which were then included as compensation under the Martin Marietta Corporation Retirement Income Plan II
except any amounts which the Corporation may exclude from the computation of “Compensation” and subject to the powers of the Corporation. 

  

	 	(6)	Credited Service. “Credited Service” shall have the same meaning herein as in the Legacy Plan. Credited Service shall include periods of Plan
Membership as defined under the Legacy Plan. 

  

	 	(7)	Legacy Plan. “Legacy Plan” shall mean the General Dynamics Salaried Retirement Plan—Armament Systems and Defense Systems Legacy Provisions (known
from January 1, 2005 to January 1, 2007 as the Retirement Plan for Salaried Employees, AS/DS Legacy Provisions and prior to January 1, 2005, as the Retirement Plan for Non-Represented Employees of General Dynamics Armament/Defense
Systems). 

  

	 	(8)	Salaried Plan. “Salaried Plan” shall mean the General Dynamics Salaried Retirement Plan effective January 1, 2007. 

 

	 	(9)	Vesting Service. “Vesting Service” shall have the same meaning herein as Continuous Service in the Legacy Plan. 

E-3. Covered Employees. An Appendix E Employee is an Employee who was covered by the Martin Marietta Supplementary Pension Plan for Employees of
Transferred GE Operations prior to January 1, 1997, and who is a Transferred Lockheed Martin Employee as defined in the 

  
 E-2

 
Retirement Plan for Non-Represented Employees of General Dynamics Armament/Defense Systems, as amended and restated effective January 1, 2001. 

E-4. Amount of Benefit. Subject to the limitation described in (5) below, the amount of the Supplementary Pension shall be as follows.

  

	 	(1)	Normal Retirement Benefit. The annual Supplementary Pension payable to an Appendix E Employee retiring on or after his Normal Retirement Date as defined under
the Legacy Plan shall be equal to the excess, if any, of the Employee’s Annual Retirement Income over the sum of: 

  

	 	a.	The annual pension payable under the Legacy Plan (as a single life annuity); 

 

	 	b.	The annual pension payable under the Salaried Plan (as a single life annuity); 

 

	 	c.	 One-half
( 1/2) of the Employee’s Annual Estimated
Social Security Benefit; 

  

	 	d.	The Employee’s Personal Pension Account annuity as defined in the Legacy Plan (as a single life annuity); and 

 

	 	e.	The Employee’s annual benefit, if any, determined in accordance with the provisions of Section 3.03 and Appendix A (as a single life annuity).

  

	 	(2)	Early Retirement Benefit After Age Sixty (60). The annual Supplementary Pension payable to an Appendix E Employee who, following the attainment of age sixty
(60), retires on an optional retirement date under the Legacy Plan, shall be computed in the manner provided by (1) above (for an Employee retiring on or after his Normal Retirement Date) but taking into account only Credited Service and
Average Annual Compensation to the actual date of optional retirement and, for purposes of the Legacy Plan offset in (1)(a), excluding the early retirement supplement described in sections 2.3(a)(ii) and 2.3(b)(ii) of the Legacy Plan.

  

	 	(3)	Early Retirement Benefit Before Age Sixty (60). The annual Supplementary Pension payable to an Appendix E Employee who retires following the attainment of age
fifty-five (55), but before attainment of age sixty (60), shall be equal to the excess, if any, of the Employee’s Annual Retirement Income multiplied by an early retirement reduction factor described in (a), over the sum of (b) through
(f), where (a) through (f) are as follows: 

  

	 	a.	 The earlier retirement reduction factor shall equal the product of (i) one-twelfth ( 1/12) of the number of complete months by which commencement of
the Supplementary Benefit precedes the attainment of age sixty (60) and (ii) seven percent (7%) minus the smaller of three and one-half percent (3.5%) or fourteen hundredths percent (0.14%) times complete years of Benefit
Eligibility Service in excess of five (5). 

  
 E-3

	 	b.	The annual pension payable under the Legacy Plan (as a single life annuity and excluding the early retirement supplement described in sections 2.3(a)(ii) and 2.3(b)(ii)
of the Legacy Plan); 

  

	 	c.	The annual pension payable under the Salaried Plan (as a single life annuity); 

 

	 	d.	 One-half
( 1/2) of the Employee’s Annual Estimated
Social Security Benefit; 

  

	 	e.	The Employee’s Personal Pension Account annuity as defined in the Legacy Plan (as a single life annuity); and 

 

	 	f.	The Employee’s annual benefit, if any, determined in accordance with the provisions of Section 3.03 and Appendix A (as a single life annuity).

 Except as provided by the Special Retirement provisions in (4) below, an Appendix E Employee who retires
before the first day of the month following attainment of age fifty-five (55) or who terminates employment before attainment of age fifty-five (55) shall not be eligible for the Supplementary Pension under this Appendix E. 

 

	 	(4)	Special Retirement. An Appendix E Employee who is laid off due to a reduction in force, a plant closing or lack of work after reaching age fifty (50) and
having completed at least twenty-five (25) years of Vesting Service is eligible for a Supplementary Pension commencing as early as age fifty-five (55). The Supplementary Pension shall be determined by (3) above except taking into account
the following: 

  

	 	a.	The Average Annual Compensation shall be based on the last one hundred twenty (120) completed months before his termination date; 

 

	 	b.	The Annual Estimated Social Security Benefit shall be determined as though the Employee’s retirement date was the date of termination; and

  

	 	c.	The early retirement reduction factor shall be based on the age at which the Supplementary Pension benefit actually commences. 

 

	 	(5)	Limitation on Benefit. Notwithstanding any provision of this Plan to the contrary, if the sum of (a) through (g) defined as follows exceeds sixty
percent (60%) of the Employee’s Average Annual Compensation, then the Employee’s Supplementary Pension shall be reduced by the amount of such excess, but not less than zero (0). In cases of retirement before age sixty (60), then for
purposes of this limitation the sixty-percent (60%) of Average Annual Compensation shall be reduced by the same early retirement reduction factor described in (3)(a). 

 

	 	a.	The Supplementary Pension (calculated after application of any reduction factor for early retirement) otherwise payable hereunder; 

  
 E-4

	 	b.	The annual pension payable under the Legacy Plan (as a single life annuity and excluding the early retirement supplement described in sections 2.3(a)(ii) and 2.3(b)(ii)
of the Legacy Plan) 

  

	 	c.	The annual pension payable under the Salaried Plan (as a single life annuity); 

 

	 	d.	The Employee’s Annual Estimated Social Security Benefit, but before any adjustment for less than 35 years of service; 

 

	 	e.	The Employee’s Personal Pension Account annuity as defined in the Legacy Plan (as a single life annuity); 

 

	 	f.	The Employee’s annual benefit, if any, determined in accordance with the provisions of Section 3.03 and Appendix A (as a single life annuity); and

  

	 	g.	The Employee’s annual benefit (as a single life annuity), if any, payable under any other annual pension (or the annual pension equivalent of other forms of
payment) payable under any other pension plan, policy, contract, or government program sponsored by the Corporation. 

 E-5.
Form and Timing of Benefit. 
  

	 	(1)	An Appendix E Employee may elect to receive the Supplementary Pension benefit with respect to Grandfathered Amounts as a life annuity (the normal form) or in any one of
the optional forms permitted under the provisions of Section 5.4 of the Legacy Plan (optional forms for the TOPS Benefit). Non-Grandfathered Amounts shall be distributed in a form determined in accordance with Sections 3.04, 3.05, and 3.07 of
the Plan. 

  

	 	(2)	The timing of the Supplementary Pension benefit payable to an Appendix E Employee shall be determined in accordance with the provisions of Section 3 of the Plan.

 E-6. Death Benefit. 
  

	 	(1)	If an Appendix E Employee dies prior to commencing his Supplementary Pension benefit and leaves a surviving spouse, a lifetime benefit shall be payable to his surviving
spouse. Such benefit shall commence on the first of the month following the later of the date the Employee would have attained age fifty-five (55) or his date of death, and shall be equal to the excess, if any, of the Employee’s Annual
Retirement Income multiplied by an early retirement reduction factor described in (a), over the sum of (b) through (f), where (a) through (f) are as follows: 

 

	 	a.	 The earlier retirement reduction factor shall equal the product of (i) one-twelfth ( 1/12) of the number of complete months by which commencement of
the death benefit precedes the attainment of age sixty (60) and (ii) seven percent (7%) minus the smaller of three and one-half percent 

  
 E-5

	 	 
(3.5%) or fourteen hundredths percent (0.14%) times complete years of Benefit Eligibility Service in excess of five (5). If commencement of the death benefit is on or after the date the Employee
attained or would have attained age sixty (60), then this early retirement reduction factor shall not apply. 

  

	 	b.	The annual pre-retirement surviving spouse benefit payable under the Legacy Plan (as a single life annuity and excluding the early retirement supplement described in
sections 2.3(a)(ii) and 2.3(b)(ii) of the Legacy Plan); 

  

	 	c.	The annual pre-retirement surviving spouse benefit payable under the Legacy Plan (as a single life annuity); 

 

	 	d.	Twenty-five percent (25%) of the Employee’s Annual Estimated Social Security Benefit; 

 

	 	e.	The Employee’s Personal Pension Account joint and survivor benefit as defined in the Legacy Plan (as a single life annuity); and 

 

	 	f.	The annual pre-retirement surviving spouse benefit, if any, determined in accordance with the provisions of Section 3.03 and Appendix A (as a single life annuity).

  

	 	(2)	If an Appendix E Employee dies while employed by the Corporation and without leaving a surviving spouse, the death benefit payable to his Beneficiary shall be a single
sum equal to five (5) times his annual Supplementary Pension benefit that would have otherwise been payable had he survived until the first of the month following the later of his age fifty-five (55) or his date of death and then commenced
his Supplementary Pension. Such single sum shall be paid on the first of the month following the later of the date the Employee would have attained age fifty-five (55) or his date of death. For purposes of this paragraph, an Appendix E Employee
may only designate his estate, former spouse, or member of his immediate family as his Beneficiary. 

  
 E-6

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