Document:

Filed by Bowne Pure Compliance

 Exhibit 10.41

SEVENTH AMENDMENT

TO THE

SITHE STABLE PENSION ACCOUNT PLAN

This Seventh Amendment to the Sithe Stable Pension Account Plan is made and entered into by
Sithe Energies, Inc. (the “Company”) this 4th day of December, 2007, effective as of
January 1, 2008.

W I T N E S S E T H:

WHEREAS, the Company and its predecessors have previously adopted the Sithe Stable Pension
Account Plan, effective January 1, 2000 and as subsequently amended (the “Plan”); and

WHEREAS, the Company and its delegates are authorized and empowered to amend the Plan
pursuant to Section 11.1 of the Plan; and

WHEREAS, the Dynegy Inc. Benefit Plans Committee met and approved on August 23, 2007 certain
changes to the Plan for compliance with the Pension Protection Act of 2006 (“PPA”) and the Company
desires to approve the specific Plan amendments for these changes.

NOW, THEREFORE, the Plan is hereby amended as of January 1, 2008 as follows:

 

 

 

I.

Section 1.4 is amended by adding at the end as follows:

“The Applicable Interest Rate is the annual rate of interest determined in
accordance with Code Section 417(e)(3)(C) for the lookback month preceding the
first day of the stability period. For purposes of this Paragraph, prior to January
1, 2008, the annual rate was the rate of
interest on 30-year Treasury securities. On and after January 1, 2008, the annual rate is
the adjusted first, second and third segment rates applied under rules similar to the rules
of Code Section 430(h)(2)(C) for the month before the date of the distribution or such
other time as the Secretary of the Treasury may prescribe by regulation. For purposes of
this Paragraph, the adjusted first, second and third segment rates are the first, second
and third segment rates which would be determined under Code Section 430(h)(2)(c) if (i)
Code Section 430(h)(2)(D) were applied by substituting the average yields for the month
described in clause (ii) for the average yields for the 24-month period described in such
section; (ii) Code Section 430(h)(2)(G)(i)(ll) were applied by substituting “section
417(e)(3)(A)(ii)(ll)” for “section 412(b)(5)(B)(ii)(ll)”; and (iii) the applicable
percentage under Code Section 430(h)(2)(G) were determined in accordance with the following
table:

	 	 	 	 	 
	For Plan Year	 	Applicable Percentage
	 
	 	 	 	 
	2008

	 	 	20	%
	 
	 	 	 	 
	2009

	 	 	40	%
	 
	 	 	 	 
	2010

	 	 	60	%
	 
	 	 	 	 
	2011

	 	 	80	%”

II.

Article I is amended by adding a new section, Section 1.35A, immediately
following Section 1.35, as follows:

“1.35A ‘QuaIified Optional Survivor Annuity’: An annuity for the life of the Participant
with a survivor annuity for the life of the spouse which is equal to 75% of the
annuity which is payable during the joint lives of the Participant and the spouse that
is the Actuarial Equivalent of the standard form of benefit and that is provided in
compliance with section 417(g) of the Code commencing as of January 1, 2008.”

 

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III.

Section 4.2(b) is amended by inserting the phrase, “including as of January 1,
2008, the election or waiver of a Qualified Optional Survivor” after the phrase “and other rules
and restrictions in this Article 4”.

IV.

Section 4.3(a)(4)(B) is amended by deleting the first sentence and replacing it with the following:

“The term ‘Qualified Election’ shall mean an election to waive the applicable standard
form of annuity and, effective January 1, 2008, to elect or waive the Qualified
Optional Survivor Annuity.”

V.

Section 4.3(b) is amended by inserting the phrase “or the Qualified Optional Survivor Annuity”
after the phrase “in the standard benefit form set forth in Section 4.2” in the first sentence.

VI.

Appendix B, Section B8.1 is amended by adding at the end the following:

“or, effective as of January 1, 2008, a Qualified Optional Survivor Annuity as provided under
Section 4.3:”

VII.

Except as amended herein, the provisions of the Plan shall remain in full force and effect.

 

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IN WITNESS WHEREOF, this Seventh Amendment has been executed by the duly designated officer
and is effective as of the dates set forth hereinabove.

	 	 	 	 	 
	 	Sithe Energies, Inc.

 	 
	 	By:  	/s/ [ILLEGIBLE]
 	 
	 	 	Title: Chairman, Dynegy Benefit Committee	 

 

4Filed by Bowne Pure Compliance

Exhibit 10.42

AMENDMENT TWO TO

SITHE STABLE PENSION ACCOUNT PLAN

As Amended and Restated Effective January 1, 2007

WHEREAS, effective as of January 1, 2007, the Sithe Stable Pension Account Plan (the “Plan”)
was amended and restated in its entirety;

WHEREAS, by the terms of Section 11.1 of the Plan, the Administrative Committee, which is the
Dynegy Inc. Benefit Plans Committee, may amend the Plan as necessary to bring the Plan into
conformity with legal requirements; and

WHEREAS, it is necessary that certain technical amendments be made to the Plan in order to
comply with final regulations issued under section 415 of the Internal Revenue Code;

NOW, THEREFORE, the Plan is hereby amended, effective as of the dates specified below, as
follows:

1. Effective January 1, 2008, Section 1.2 of the Plan is amended by adding the following new
paragraph at the end thereof:

“Effective on and after January 1, 2008, the applicable mortality table used for
adjusting any benefit or limitation under Code Section 415(b)(2)(B), (C), or (D) as
referenced in Section 4.7 of the Plan and the applicable mortality table used for the
purposes of satisfying the requirements of Code Section 417(e) as set forth in this Section
1.2 is the “applicable mortality table” as that term is defined in the Pension Protection
Act of 2006 and as applied in accordance with guidance issued currently and in the future
by the Internal Revenue Service.”

2. Effective January 1, 2008, the provisions of Section I. of the Seventh Amendment to Plan
(which actually was Amendment One to the Sithe Stable Pension Account Plan, as Amended and Restated
Effective January 1, 2007), effective January 1, 2000, amending Section 1.4 of the Plan are hereby
restated as follows:

“1.4 ‘Applicable Interest Rate’ means the interest rate specified under
Code Section 417(e)(3) as in effect for the November preceding the start of the Plan Year
in which the payment is made. On and after January 1, 2008, the annual rate is the
adjusted first, second, and third segment rates applied under rules similar to the rules
of Code Section 430(h)(2)(C) for the November preceding the start of the Plan Year in
which the payment is made. For purposes of this Paragraph, the adjusted first, second,
and third segment rates are the first,
second, and third segment rates which would be determined under Code Section 430(h)(2)(C)
if (i) Code Section 430(h)(2)(D) were applied by substituting the average yields for the
month described in clause (ii) for the average yields for the 24-month period described in
such section; (ii) Code Section 430(h)(2)(G)(i)(ii) were applied by substituting “section
417(e)(3)(A)(ii)(II)” for “section 412(b)(5)(B)(ii)(II)”; and (iii) the applicable
percentage under Code Section 430(h)(2)(G) were determined in accordance with the
following table:

	 	 	 	 	 
	For Plan Year	 	Applicable Percentage	 
	2008
	 	 	20	%
	2009
	 	 	40	%
	2010
	 	 	60	%
	2011
	 	 	80	%”

 

 

 

3. Effective for limitation years beginning on or after July 1, 2007, Section 4.7 of the Plan
is amended to read in its entirety as follows:

“4.7 Maximum Benefit Limitation.

(A) Limitations Imposed by Section 415 of the Internal Revenue Code:

(1) The limitations of this Section 4.7(A) shall apply on and after January 1, 2008,
except as otherwise provided herein.

(2) The Annual Benefit otherwise payable to a Member under the Plan at any time shall
not exceed the Maximum Permissible Benefit. If the benefit the Member would otherwise
accrue in a Limitation Year would produce an Annual Benefit in excess of the Maximum
Permissible Benefit, the benefit shall be limited (or the rate of accrual reduced) to a
benefit that does not exceed the Maximum Permissible Benefit.

(3) If the Member is, or has ever been, a participant in another qualified defined
benefit plan (without regard to whether the plan has been terminated) maintained by the
employer or a predecessor employer, the sum of the Member’s Annual Benefits from all such
plans may not exceed the Maximum Permissible Benefit. Where the Member’s employer-provided
benefits under all such defined benefit plans (determined as of the same age) would exceed
the Maximum Permissible Benefit applicable at that age, the maximum monthly retirement
income applicable to all such defined benefit plans of the employer shall be determined and
allocated on a pro rata basis in proportion to the actuarially equivalent amount of
retirement income otherwise accrued under each such defined benefit plan so that the
Maximum Permissible Benefit is not exceeded.

(4) The application of the provisions of this section shall not cause the Maximum
Permissible Benefit for any Member to be less than the Member’s accrued benefit under all
the defined benefit plans of the employer or a predecessor employer as of the end of the
last Limitation Year beginning before
July 1, 2007 under provisions of the plans that were both adopted and in effect before
April 5, 2007. The preceding sentence applies only if the provisions of such defined
benefit plans that were both adopted and in effect before April 5, 2007 satisfied the
applicable requirements of statutory provisions, regulations, and other published guidance
relating to Section 415 of the Internal Revenue Code in effect as of the end of the last
Limitation Year beginning before July 1, 2007, as described in Section 1.415(a)-1(g)(4) of
the Treasury regulations.

 

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(5) The limitations of this Section 4.7(A) shall be determined and applied taking into
account the rules in Section 4.7(A)(7).

(6) Definitions.

(a) “Annual Benefit” shall mean a benefit that is payable annually in the form of a
straight life annuity. Except as provided below, where a benefit is payable in a form
other than a straight life annuity, the benefit shall be adjusted to an actuarially
equivalent straight life annuity that begins at the same time as such other form of benefit
and is payable on the first day of each month, before applying the limitations of this
Section 4.7(A). For a Member who has or will have distributions commencing at more than
one annuity starting date, the Annual Benefit shall be determined as of each such annuity
starting date (and shall satisfy the limitations of this Section 4.7(A) as of each such
date), actuarially adjusting for past and future distributions of benefits commencing at
the other annuity starting dates. For this purpose, the determination of whether a new
starting date has occurred shall be made without regard to Section 1.401(a)-20, Q&A 10(d),
and with regard to Section 1.415(b)-1(b)(1)(iii)(B) and (C) of the Treasury regulations.

No actuarial adjustment to the benefit shall be made for (1) survivor benefits payable
to a surviving spouse under a qualified joint and survivor annuity to the extent such
benefits would not be payable if the Member’s benefit were paid in another form; (2)
benefits that are not directly related to retirement benefits (such as a qualified
disability benefit, preretirement incidental death benefits, and postretirement medical
benefits); or (3) the inclusion in the form of benefit of an automatic benefit increase
feature, provided the form of benefit is not subject to Section 417(e)(3) of the Internal
Revenue Code and would otherwise satisfy the limitations of this Section 4.7(A), and the
Plan provides that the amount payable under the form of benefit in any Limitation Year
shall not exceed the limits of this Section 4.7(A) applicable at the annuity starting date,
as increased in subsequent years pursuant to Section 415(d) of the Internal Revenue Code.
For this purpose, an automatic benefit increase feature is included in a form of benefit if
the form of benefit provides for automatic, periodic increases to the benefits paid in that
form.

The determination of the Annual Benefit shall take into account Social Security
supplements described in Section 411(a)(9) of the Internal Revenue Code and benefits
transferred from another defined benefit plan, other than transfers of distributable
benefits pursuant to Section 1.411(d)-4, Q&A-3(c), of the Treasury
regulations, but shall disregard benefits attributable to employee contributions or
rollover contributions.

 

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Effective for distributions in Plan Years beginning after December 31, 2003, the
determination of actuarial equivalence of forms of benefit other than a straight life
annuity shall be made in accordance with Section 4.7(A)(6)(a)(i) or (ii) below.

	 	(i)	 	Benefit Forms Not Subject to Section 417(e)(3) of the
Internal Revenue Code: The straight life annuity that is actuarially
equivalent to the Member’s form of benefit shall be determined under this
subsection (i) if the form of the Member’s benefit is either (1) a
nondecreasing annuity (other than a straight life annuity) payable for a
period of not less than the life of the Member (or, in the case of a qualified
pre-retirement survivor annuity, the life of the surviving spouse), or (2) an
annuity that decreases during the life of the Member merely because of (a) the
death of the survivor annuitant (but only if the reduction is not below 50% of
the benefit payable before the death of the survivor annuitant), or (b) the
cessation or reduction of Social Security supplements or qualified disability
payments (as defined in Section 401(a)(11) of the Internal Revenue Code).

	 	(A)	 	Limitation Years beginning before July
1, 2007. For Limitation Years beginning before July 1, 2007, the
actuarially equivalent straight life annuity is equal to the annual
amount of the straight life annuity commencing at the same annuity
starting date that has the same actuarial present value as the
Member’s form of benefit computed using whichever of the following
produces the greater annual amount: (I) the interest rate specified
in Section 1.2(a) of the Plan (hereinafter referred to as the “Plan
Interest Rate”) and the mortality table (or other tabular factor)
specified in Section 1.2(a) of the Plan (hereinafter referred to as
the “Plan Mortality Table”) for adjusting benefits in the same form;
and (II) a 5 percent interest rate assumption and the applicable
mortality table prescribed in Revenue Ruling 2001-62 for that annuity
starting date.

	 	(B)	 	Limitation Years beginning on or after
July 1, 2007. For Limitation Years beginning on or after July 1,
2007, the actuarially equivalent straight life annuity is equal to
the greater of (I) the annual amount of the straight life annuity (if
any) payable to the Member under the Plan commencing at the same
annuity starting date as the Member’s form of benefit; and (II) the
annual amount of the straight life annuity commencing at the same
annuity starting date that
has the same actuarial present value as the Member’s form of
benefit, computed using a 5 percent interest rate assumption and
the Applicable Mortality Table defined in Section 1.2 of the Plan
for that annuity starting date.

 

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	 	(ii)	 	Benefit Forms Subject to Section 417(e)(3) of the
Internal Revenue Code: The straight life annuity that is actuarially
equivalent to the Member’s form of benefit shall be determined under this
subsection (ii) if the form of the Member’s benefit is other than a benefit
form described in subsection (i) above. In this case, the actuarially
equivalent straight life annuity shall be determined as follows:

	 	(A)	 	Annuity Starting Date in Plan Years
Beginning After 2005. If the annuity starting date of the
Member’s form of benefit is in a Plan Year beginning after 2005, the
actuarially equivalent straight life annuity is equal to the greatest
of (I) the annual amount of the straight life annuity commencing at
the same annuity starting date that has the same actuarial present
value as the Member’s form of benefit, computed using the Plan
Interest Rate specified in Section 1.2(a) of the Plan and the Plan
Mortality Table (or other tabular factor) specified in Section 1.2(a)
of the Plan for adjusting benefits in the same form; (II) the annual
amount of the straight life annuity commencing at the same annuity
starting date that has the same actuarial present value as the
Member’s form of benefit, computed using a 5.5 percent interest rate
assumption and the applicable mortality table prescribed in Revenue
Ruling 2001-62; and (III) the annual amount of the straight life
annuity commencing at the same annuity starting date that has the
same actuarial present value as the Member’s form of benefit,
computed using the applicable interest rate defined in Section 1.4 of
the Plan for that annuity starting date (hereinafter referred to as
the “Applicable Interest Rate”) and the applicable mortality table
prescribed in Revenue Ruling 2001-62, divided by 1.05.

	 	(B)	 	Annuity Starting Date in Plan Years
Beginning in 2004 or 2005. If the annuity starting date of the
Member’s form of benefit is in a Plan Year beginning in 2004 or 2005,
the actuarially equivalent straight life annuity is equal to the
annual amount of the straight life annuity commencing at the same
annuity starting date that has the same actuarial present value as
the Member’s form of benefit, computed using whichever of the
following produces the greater annual amount: (I) the Plan Interest
Rate specified in Section 1.2(a) of the Plan and the Plan Mortality
Table (or
other tabular factor) specified in Section 1.2(a) of the Plan for
adjusting benefits in the same form; and (II) a 5.5 percent
interest rate assumption and the applicable mortality table
prescribed in Revenue Ruling 2001-62.

 

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(b) “IRC 415 Compensation” shall mean wages, salaries, and fees for professional
services and other amounts received (without regard to whether or not an amount is paid in
cash) for personal services actually rendered in the course of employment with the Employer
maintaining the Plan to the extent that the amounts are includible in gross income
(including, but not limited to, commissions paid salespersons, compensation for services on
the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses,
fringe benefits, and reimbursements, or other expense allowances under a nonaccountable
plan [as described in Section 1.62-2(c) of the Treasury regulations]), and excluding the
following:

	 	(i)	 	Employer contributions (other than elective contributions
described in Sections 402(e)(3), 408(k)(6), 408(p)(2)(A)(i), or 457(b) of the
Internal Revenue Code) to a plan of deferred compensation (including a
simplified employee pension described in Section 408(k) or a simple retirement
account described in Section 408(p) of the Internal Revenue Code, and whether
or not qualified) to the extent such contributions are not includible in the
Employee’s gross income for the taxable year in which contributed, and any
distributions (whether or not includible in gross income when distributed)
from a plan of deferred compensation (whether or not qualified), other than,
amounts received during the year by an Employee pursuant to a nonqualified
unfunded deferred compensation plan to the extent includible in gross income;

	 	(ii)	 	amounts realized from the exercise of a nonstatutory stock
option (that is, an option other than a statutory stock option as defined in
Section 1.421-1(b) of the Treasury regulations), or when restricted stock (or
property) held by the Employee either becomes freely transferable or is no
longer subject to a substantial risk of forfeiture;

	 	(iii)	 	amounts realized from the sale, exchange or other
disposition of stock acquired under a statutory stock option;

	 	(iv)	 	other amounts that receive special tax benefits, such as
premiums for group-term life insurance (but only to the extent that the
premiums are not includible in the gross income of the Employee and are not
salary reduction amounts that are described in Section 125 of the Internal
Revenue Code); and

	 	(v)	 	other items of remuneration that are similar to any of the
items listed in (i) through (iv).

For any self-employed individual, IRC 415 Compensation shall mean earned income.

 

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Except as provided herein, for Limitation Years beginning after December 31, 1991,
IRC 415 Compensation for a Limitation Year is the IRC 415 Compensation actually paid or
made available during such Limitation Year. IRC 415 Compensation for a Limitation Year
shall include amounts earned but not paid during the Limitation Year solely because of the
timing of pay periods and pay dates, provided the amounts are paid during the first few
weeks of the next Limitation Year, the amounts are included on a uniform and consistent
basis with respect to all similarly situated employees, and no compensation is included in
more than one Limitation Year.

For Limitation Years beginning on or after July 1, 2007, IRC 415 Compensation for a
Limitation Year shall also include compensation paid by the later of 2 1/2 months after an
Employee’s severance from employment with the employer maintaining the Plan or the end of
the Limitation Year that includes the date of the Employee’s severance from employment with
the employer maintaining the Plan, if:

	 	(i)	 	the payment is regular compensation for services during the
Employee’s regular working hours, or compensation for services outside the
Employee’s regular working hours (such as overtime or shift differential),
commissions, bonuses, or other similar payments, and, absent a severance from
employment, the payments would have been paid to the Employee while the
Employee continued in employment with the Employer;

	 	(ii)	 	the payment is for unused accrued bona fide sick, vacation or
other leave that the Employee would have been able to use if employment had
continued; or

	 	(iii)	 	the payment is received by the Employee pursuant to a
nonqualified unfunded deferred compensation plan and would have been paid at
the same time if employment had continued, but only to the extent includible
in gross income.

Any payments not described above shall not be considered IRC 415 Compensation if paid
after severance from employment, even if they are paid by the later of 21/2 months after the
date of severance from employment or the end of the Limitation Year that includes the date
of severance from employment, except, (1) payments to an individual who does not currently
perform services for the employer by reason of qualified military service (within the
meaning of Section 414(u)(1) of the Internal Revenue Code) to the extent these payments do
not exceed the amounts the individual would have received if the individual had
continued to perform services for the employer rather than entering qualified military
service, or (2) compensation paid to a Member who is permanently and totally disabled, as
defined in Section 22(e)(3) of the Internal Revenue Code, provided that salary continuation
applies to all Members who are permanently and totally disabled for a fixed or determinable
period, or the Member was not a Highly Compensated Employee immediately before becoming
disabled.

 

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Back pay, within the meaning of Section 1.415(c)-2(g)(8) of the Treasury regulations,
shall be treated as IRC 415 Compensation for the Limitation Year to which the back pay
relates to the extent the back pay represents wages and compensation that would otherwise
be included under this definition.

For Limitation Years beginning after December 31, 1997, IRC 415 Compensation paid or
made available during such Limitation Year shall include amounts that would otherwise be
included in IRC 415 Compensation but for an election under Section 125(a), 402(e)(3),
402(h)(1)(B), 402(k), or 457(b) of the Internal Revenue Code.

For Limitation Years beginning after December 31, 2000, IRC 415 Compensation shall
also include any elective amounts that are not includible in the gross income of the
Employee by reason of Section 132(f)(4) of the Internal Revenue Code.

For Limitation Years beginning after December 31, 2001, IRC 415 Compensation shall
also include deemed Section 125 compensation. Deemed Section 125 compensation is an amount
that is excludable under Section 106 of the Internal Revenue Code that is not available to
a participant in cash in lieu of group health coverage under a Section 125 arrangement
solely because the Member is unable to certify that he or she has other health coverage.
Amounts are deemed Section 125 compensation only if the employer does not request or
otherwise collect information regarding the Member’s other health coverage as part of the
enrollment process for the health plan.

IRC 415 Compensation shall not include amounts paid as compensation to a nonresident
alien, as defined in Section 7701(b)(1)(B) of the Internal Revenue Code, who is not a
Member in the Plan to the extent the compensation is excludable from gross income and is
not effectively connected with the conduct of a trade or business within the United States.

(c) “Defined Benefit Compensation Limitation” shall mean 100 percent of a Member’s
High Three-Year Average Compensation, payable in the form of a straight life annuity.

 

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In the case of a Member who has had a severance from employment with the employer, the
Defined Benefit Compensation Limitation applicable to the Member in any Limitation Year
beginning after the date of severance shall be automatically adjusted by multiplying the
limitation applicable to the Member in the prior Limitation Year by the annual adjustment
factor under Section 415(d) of
the Internal Revenue Code; provided, however, if the Employer maintains a plan for the
purpose of restoring benefits that certain Members may not receive under the Plan due to
the limitations on contributions and benefits imposed by Section 415 of the Internal
Revenue Code and/or due to the limitations imposed on compensation under Section 401(a)(17)
of said Code, and if the Member or his Beneficiary receives or has received a benefit or
benefits under such restoration plan and a portion of such benefit or benefits would be
duplicated by the cost-of-living adjustment provided under this paragraph, then such
cost-of-living adjustment that would represent a duplication of benefits shall not apply to
the Member or Beneficiary unless the value of the benefit payable from the restoration plan
that would cause such duplication of benefits under the Plan is returned to the Employer by
the Member or Beneficiary within 60 days of the effective date of such cost-of-living
adjustment or the date that such cost-of-living adjustment is announced by the Internal
Revenue Service, whichever date is later; and provided further, however, that such 60-day
period may be extended by the Committee if, in its opinion, reasonable cause exists for
such an extension. The adjusted compensation limit shall apply to Limitation Years ending
with or within the calendar year of the date of the adjustment, but a Member’s benefits
shall not reflect the adjusted limit prior to January 1 of that calendar year.

In the case of a Member who is rehired after a severance from employment, the Defined
Benefit Compensation Limitation is the greater of 100 percent of the Member’s High
Three-Year Average Compensation, as determined prior to the severance from employment, as
adjusted pursuant to the preceding paragraph, if applicable; or 100 percent of the Member’s
High Three-Year Average Compensation, as determined after the severance from employment
under subsection (g) below.

(d) “Defined Benefit Dollar Limitation” shall mean, effective for Limitation Years
ending after December 31, 2001, $160,000, automatically adjusted under Section 415(d) of
the Internal Revenue Code effective January 1 of each year, and payable in the form of a
straight life annuity. The new limitation shall apply to Limitation Years ending with or
within the calendar year of the date of the adjustment, but a Member’s benefits shall not
reflect the adjusted limit prior to January 1 of that calendar year. The automatic annual
adjustment of the Defined Benefit Dollar Limitation shall apply to Members who have had a
separation from employment.

(e) “employer” shall mean the employer that adopts this Plan, and all members of a
controlled group of corporations, as defined in Section 414(b) of the Internal Revenue
Code, as modified by Section 415(h), all commonly controlled trades or businesses (as
defined in Section 414(c) of the Internal Revenue Code, as modified, except in the case of
a brother-sister group of trades or businesses under common control, by Section 415(h)), or
affiliated service groups (as defined in Section 414(m)) of which the adopting employer is
a part, and any other entity required to be aggregated with the employer pursuant to
Section 414(o) of the Internal Revenue Code.

 

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(f) “Formerly Affiliated Plan of the Employer” shall mean a plan that, immediately
prior to the cessation of affiliation, was actually maintained by the employer and,
immediately after the cessation of affiliation, is not actually maintained by the employer.
For this purpose, cessation of affiliation means the event that causes an entity to no
longer be considered the employer, such as the sale of a member of the controlled group of
corporations, as defined in Section 414(b) of the Internal Revenue Code, as modified by
Section 415(h), to an unrelated corporation, or that causes a plan to not actually be
maintained by the employer, such as transfer of plan sponsorship outside a controlled
group.

(g) “High Three-Year Average Compensation” shall mean the average compensation for the
three consecutive years of service (or, if the Member has less than three consecutive years
of service, the Member’s longest consecutive period of service, including fractions of
years, but not less than one year) with the employer that produces the highest average. A
year of service with the employer is the 12-consecutive month period that begins on
January 1 of each calendar year. In the case of a Member who is rehired by the employer
after a severance from employment, the Member’s high three-year average compensation shall
be calculated by excluding all years for which the Member performs no services for and
receives no compensation from the employer (the break period) and by treating the years
immediately preceding and following the break period as consecutive. A Member’s
compensation for a year of service shall not include compensation in excess of the
limitation under Section 401(a)(17) of the Internal Revenue Code that is in effect for the
calendar year in which such year of service begins.

(h) “Limitation Year” shall mean the calendar year unless a different 12-month period
has been elected by the employer in accordance with regulations or rulings issued by the
Internal Revenue Service. All qualified plans maintained by the employer must use the same
Limitation Year. If the Limitation Year is amended to a different 12-consecutive month
period, the new Limitation Year must begin on a date within the Limitation Year in which
the amendment is made.

(i) “Maximum Permissible Benefit” shall mean the lesser of the Defined Benefit Dollar
Limitation or the Defined Benefit Compensation Limitation (both adjusted where required as
provided below).

	 	(i)	 	Adjustment for Less Than 10 Years of Participation or
Service: If the Member has less than 10 Years of Participation in the
Plan, the Defined Benefit Dollar Limitation shall be multiplied by a fraction,
the numerator of which is the number of Years (or part thereof, but not less
than one year) of Participation in the Plan, and the denominator of which is
10. In the case of a Member who has less than 10 Years of Service with the
employer, the Defined Benefit Compensation Limitation shall be multiplied by a
fraction, the numerator of which is the number of Years (or part thereof, but
not
less than 1 year) of Service with the employer, and the denominator of
which is 10.

 

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	 	(ii)	 	Adjustment of Defined Benefit Dollar Limitation for
Benefit Commencement Before Age 62 or after Age 65: Effective for
benefits commencing in Limitation Years ending after December 31, 2001, the
Defined Benefit Dollar Limitation shall be adjusted if the annuity starting
date of the Member’s benefit is before age 62 or after age 65. If the annuity
starting date is before age 62, the Defined Benefit Dollar Limitation shall be
adjusted under subsection (A) below, as modified by subsection (C) below in
this subsection (ii). If the annuity starting date is after age 65, the
Defined Benefit Dollar Limitation shall be adjusted under subsection (B)
below, as modified by subsection (C) below in this subsection (ii).

	 	(A)	 	Adjustment of Defined Benefit Dollar
Limitation for Benefit Commencement Before Age 62:

I. Limitation Years Beginning Before July 1, 2007. If the
annuity starting date for the Member’s benefit is prior to age 62 and
occurs in a Limitation Year beginning before July 1, 2007, the Defined
Benefit Dollar Limitation for the Member’s annuity starting date is the
annual amount of a benefit payable in the form of a straight life annuity
commencing at the Member’s annuity starting date that is the actuarial
equivalent of the Defined Benefit Dollar Limitation (adjusted for Years of
Participation less than 10, if required) with actuarial equivalence
computed using whichever of the following produces the smaller annual
amount: (a) the Plan Interest Rate specified in Section 1.2(a) of the Plan
and the Plan Mortality Table (or other tabular factor) specified in
Section 1.2(a) of the Plan; or (b) a 5-percent interest rate assumption
and the applicable mortality table as prescribed in Revenue Ruling
2001-62.

II. Limitation Years Beginning on or After July 1, 2007.

(a) Plan Does Not Have Immediately Commencing Straight
Life Annuity Payable at Both Age 62 and the Age of Benefit
Commencement. If the annuity starting date for the Member’s
benefit is prior to age 62 and occurs in a Limitation Year
beginning on or after July 1, 2007, and the Plan does not have an
immediately commencing straight life annuity payable at both age
62 and the age of benefit commencement, the Defined Benefit Dollar
Limitation for the Member’s annuity starting date is the annual
amount of a benefit payable in the form of a
straight life annuity commencing at the Member’s annuity
starting date that is the actuarial equivalent of the Defined
Benefit Dollar Limitation (adjusted for Years of Participation
less than 10, if required) with actuarial equivalence computed
using a 5 percent interest rate assumption and the Applicable
Mortality Table for the annuity starting date (and expressing the
Member’s age based on completed calendar months as of the annuity
starting date).

 

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(b) Plan Has Immediately Commencing Straight Life Annuity
Payable at Both Age 62 and the Age of Benefit Commencement. If
the annuity starting date for the Member’s benefit is prior to age
62 and occurs in a Limitation Year beginning on or after July 1,
2007, and the Plan has an immediately commencing straight life
annuity payable at both age 62 and the age of benefit
commencement, the Defined Benefit Dollar Limitation for the
Member’s annuity starting date is the lesser of the limitation
determined under subsection (a) immediately above and the Defined
Benefit Dollar Limitation (adjusted for Years of Participation
less than 10, if required) multiplied by the ratio of the annual
amount of the immediately commencing straight life annuity under
the Plan at the Member’s annuity starting date to the annual
amount of the immediately commencing straight life annuity under
the Plan at age 62, both determined without applying the
limitations of this Section 4.7(A).

	 	(B)	 	Adjustment of Defined Benefit Dollar
Limitation for Benefit Commencement After Age 65:

I. Limitation Years Beginning Before July 1, 2007. If the
annuity starting date for the Member’s benefit is after age 65 and occurs
in a Limitation Year beginning before July 1, 2007, the Defined Benefit
Dollar Limitation for the Member’s annuity starting date is the annual
amount of a benefit payable in the form of a straight life annuity
commencing at the Member’s annuity starting date that is the actuarial
equivalent of the Defined Benefit Dollar Limitation (adjusted for Years of
Participation less than 10, if required) with actuarial equivalence
computed using whichever of the following produces the smaller annual
amount: (1) the Plan Interest Rate specified in Section 1.2(a) of the Plan
and the Plan Mortality Table (or other tabular factor) specified in
Section 1.2(a) of the Plan; or (2) a 5-percent interest rate assumption
and the applicable mortality table as prescribed in Revenue Ruling
2001-62.

 

- 12 -

 

II. Limitation Years Beginning After July 1, 2007.

(a) Plan Does Not Have Immediately Commencing Straight
Life Annuity Payable at Both Age 65 and the Age of Benefit
Commencement. If the annuity starting date for the Member’s
benefit is after age 65 and occurs in a Limitation Year beginning
on or after July 1, 2007, and the Plan does not have an
immediately commencing straight life annuity payable at both age
65 and the age of benefit commencement, the Defined Benefit Dollar
Limitation at the Member’s annuity starting date is the annual
amount of a benefit payable in the form of a straight life annuity
commencing at the Member’s annuity starting date that is the
actuarial equivalent of the Defined Benefit Dollar Limitation
(adjusted for Years of Participation less than 10, if required),
with actuarial equivalence computed using a 5 percent interest
rate assumption and the Applicable Mortality Table for that
annuity starting date (and expressing the Member’s age based on
completed calendar months as of the annuity starting date).

(b) Plan Has Immediately Commencing Straight Life Annuity
Payable at Both Age 65 and the Age of Benefit Commencement.
If the annuity starting date for the Member’s benefit is after age
65 and occurs in a Limitation Year beginning on or after July 1,
2007, and the Plan has an immediately commencing straight life
annuity payable at both age 65 and the age of benefit
commencement, the Defined Benefit Dollar Limitation at the
Member’s annuity starting date is the lesser of the limitation
determined under subsection (a) immediately above and the Defined
Benefit Dollar Limitation (adjusted for Years of Participation
less than 10, if required) multiplied by the ratio of the annual
amount of the adjusted immediately commencing straight life
annuity under the Plan at the Member’s annuity starting date to
the annual amount of the adjusted immediately commencing straight
life annuity under the Plan at age 65, both determined without
applying the limitations of this Section 4.7(A). For this
purpose, the adjusted immediately commencing straight life annuity
under the Plan at the Member’s annuity starting date is the annual
amount of such annuity payable to the Member, computed
disregarding the Member’s accruals after age 65 but including
actuarial adjustments even if those actuarial adjustments are used
to offset accruals; and the adjusted immediately commencing
straight life annuity under the Plan at age 65 is the annual
amount of such annuity that
would be payable under the Plan to a hypothetical participant
who is age 65 and has the same accrued benefit as the Member.

 

- 13 -

 

	 	(C)	 	Notwithstanding the other requirements of
this subsection (ii), no adjustment shall be made to the Defined
Benefit Dollar Limitation to reflect the probability of a Member’s
death between the annuity starting date and age 62, or between age 65
and the annuity starting date, as applicable, if benefits are not
forfeited upon the death of the Member prior to the annuity starting
date. To the extent benefits are forfeited upon death before the
annuity starting date, such an adjustment shall be made. For this
purpose, no forfeiture shall be treated as occurring upon the
Member’s death if the Plan does not charge Members for providing a
qualified preretirement survivor annuity, as defined in
Section 417(c) of the Internal Revenue Code, upon the Member’s death.

	 	(iii)	 	Minimum Benefit Permitted: Notwithstanding anything
else in this section to the contrary, the benefit otherwise accrued or payable
to a Member under this Plan shall be deemed not to exceed the Maximum
Permissible Benefit if:

	 	(A)	 	the retirement benefits payable for a
Limitation Year under any form of benefit with respect to such Member
under this Plan and under all other defined benefit plans (without
regard to whether a Plan has been terminated) ever maintained by the
employer do not exceed $10,000 multiplied by a fraction, the
numerator of which is the Member’s number of Years (or part thereof,
but not less than one year) of Service (not to exceed 10) with the
employer, and the denominator of which is 10; and

	 	(B)	 	the employer (or a predecessor employer)
has not at any time maintained a defined contribution plan in which
the Member participated (for this purpose, mandatory employee
contributions under a defined benefit plan, individual medical
accounts under Section 401(h) of the Internal Revenue Code, and
accounts for postretirement medical benefits established under
Section 419A(d)(1) of the Internal Revenue Code are not considered a
separate defined contribution plan).

(j) “Predecessor Employer” shall mean, if the employer maintains a plan that provides
a benefit which the Member accrued while performing services for a former employer, the
former employer with respect to the Member in the plan. A former entity that antedates the
employer is also a
predecessor employer with respect to a participant if, under the facts and
circumstances, the employer constitutes a continuation of all or a portion of the trade or
business of the former entity.

 

- 14 -

 

(k) “Severance from Employment” shall mean the Employee ceases to be an employee of
the employer maintaining the Plan. An Employee does not have a severance from employment
if, in connection with a change of employment, the Employee’s new employer maintains the
Plan with respect to the Employee.

(l) “Year of Participation.” The Member shall be credited with a Year of
Participation (computed to fractional parts of a year) for each accrual computation period
for which the following conditions are met: (1) the Member is credited with at least the
number of hours of service (or period of service if the elapsed time method is used) for
benefit accrual purposes, required under the terms of the Plan in order to accrue a benefit
for the accrual computation period, and (2) the Member is included as a participant under
the eligibility provisions of the Plan for at least one day of the accrual computation
period. If these two conditions are met, the portion of a Year of Participation credited to
the Member shall equal the amount of benefit accrual service credited to the Member for
such accrual computation period. A Member who is permanently and totally disabled within
the meaning of Section 415(c)(3)(C)(i) of the Internal Revenue Code for an accrual
computation period shall receive a Year of Participation with respect to that period. In
addition, for a Member to receive a Year of Participation (or part thereof) for an accrual
computation period, the Plan must be established no later than the last day of such accrual
computation period. In no event shall more than one Year of Participation be credited for
any 12-month period.

(m) “Year of Service.” For purposes of Section 4.1(A)(6)(g), the Member shall be
credited with a Year of Service (computed to fractional parts of a year) for each accrual
computation period for which the Member is credited with at least the number of hours of
service (or period of service if the elapsed time method is used) for benefit accrual
purposes, required under the terms of the Plan in order to accrue a benefit for the accrual
computation period, taking into account only service with the employer or a predecessor
employer.

(7) Other Rules.

(a) Benefits Under Terminated Plans. If a defined benefit plan maintained by
the employer has terminated with sufficient assets for the payment of benefit liabilities
of all plan participants and a Member in the Plan has not yet commenced benefits under the
Plan, the benefits provided pursuant to the annuities purchased to provide the Member’s
benefits under the terminated plan at each possible annuity starting date shall be taken
into account in applying the limitations of this Section 4.7(A). If there are not
sufficient assets for the payment of all participants’ benefit liabilities, the benefits
taken into account shall
be the benefits that are actually provided to the Member under the terminated plan.

 

- 15 -

 

(b) Benefits Transferred From the Plan. If a Member’s benefits under a
defined benefit plan maintained by the employer are transferred to another defined benefit
plan maintained by the employer and the transfer is not a transfer of distributable
benefits pursuant to Section 1.411(d)-4, Q&A-3(c), of the Treasury regulations, the
transferred benefits are not treated as being provided under the transferor plan (but are
taken into account as benefits provided under the transferee plan). If a Member’s benefits
under a defined benefit plan maintained by the employer are transferred to another defined
benefit plan that is not maintained by the employer and the transfer is not a transfer of
distributable benefits pursuant to Section 1.411(d)-4, Q&A-3(c), of the Treasury
regulations, the transferred benefits are treated by the employer’s plan as if such
benefits were provided under annuities purchased to provide benefits under a plan
maintained by the employer that terminated immediately prior to the transfer with
sufficient assets to pay all Members’ benefit liabilities under the plan. If a Member’s
benefits under a defined benefit plan maintained by the employer are transferred to another
defined benefit plan in a transfer of distributable benefits pursuant to
Section 1.411(d)-4, Q&A-3(c), of the Treasury regulations, the amount transferred is
treated as a benefit paid from the transferor plan.

(c) Formerly Affiliated Plans of the Employer. A Formerly Affiliated Plan of
the Employer shall be treated as a plan maintained by the employer, but the Formerly
Affiliated Plan of the Employer shall be treated as if it had terminated immediately prior
to the cessation of affiliation with sufficient assets to pay Members’ benefit liabilities
under the plan and had purchased annuities to provide benefits.

(d) Plans of a Predecessor Employer. If the employer maintains a defined
benefit plan that provides benefits accrued by a Member while performing services for a
predecessor employer, the Member’s benefits under a plan maintained by the predecessor
employer shall be treated as provided under a plan maintained by the employer. However, for
this purpose, the plan of the predecessor employer shall be treated as if it had terminated
immediately prior to the event giving rise to the predecessor employer relationship with
sufficient assets to pay Members’ benefit liabilities under the plan, and had purchased
annuities to provide benefits; the employer and the predecessor employer shall be treated
as if they were a single employer immediately prior to such event and as unrelated
employers immediately after the event; and if the event giving rise to the predecessor
relationship is a benefit transfer, the transferred benefits shall be excluded in
determining the benefits provided under the plan of the predecessor employer.

(e) Special Rules. The limitations of this Section 4.7(A) shall be determined
and applied taking into account the rules in Section 1.415(f)-1(d), (e) and (h) of the
Treasury regulations.

 

- 16 -

 

(f) Aggregation with Multiemployer Plans.

(i) If the employer maintains a multiemployer plan, as defined in Section 414(f) of
the Internal Revenue Code, and the multiemployer plan so provides, only the benefits under
the multiemployer plan that are provided by the employer shall be treated as benefits
provided under a plan maintained by the employer for purposes of this Section 4.7(A).

(ii) Effective for Limitation Years ending after December 31, 2001, a multiemployer
plan shall be disregarded for purposes of applying the compensation limitation of Sections
4.7(A)(6)(c) and 4.7(A)(6)(i)(i) to a plan which is not a multiemployer plan.

(B) Compliance With Section 415 of the Internal Revenue Code:

The provisions set forth in Section 4.7(A) are intended to conform the Plan to the
Final Treasury Regulations under Section 415 of the Internal Revenue Code of 1986, as
amended, that were released in April, 2007.”

IN WITNESS WHEREOF, the undersigned has caused this Amendment to be executed on this
 _____ 

day
of December, 2008.

	 	 	 	 	 
	 	SITHE ENERGIES, INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	BPC, Chairman 	 
	 

 

- 17 -

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