Document:

Ex-10.18 Long Term Deferred Compensation Plan

 

Exhibit
10.18

TVA LONG TERM 

DEFERRED COMPENSATION PLAN

Purpose:

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

Eligibility:

Executives who are nominated by the Chief Officers and approved by the TVA Board may
participate in this plan.

Procedures:

	•	 	Participating executives enter into Deferral Agreements with TVA under
which deferred compensation credits are made to an account in the participant’s
name. Credits are made on an annual basis for an established period of time after which
the full amount, with interest or return as provided below, is paid to the participant.
	 
	•	 	The participant must be employed in TVA at the time of the expiration of the
Deferral Agreement, or no payment under this plan will be made by TVA, and any credits
to the participant’s account will be extinguished. This will not apply to a separation
due to death, or under other circumstances deemed acceptable by TVA. In the event of
a participant’s death, his or her account balance shall be paid in a lump sum to
such person as the participant shall have designated in writing prior to his or her
death, or in the absence of any such designation, to the participant’s estate.
	 
	•	 	Interest will be credited daily to the balance reflected in the participant’s
deferral account. Interest will be calculated on the same basis as interest is
calculated under the Merit Incentive Supplemental Retirement Income Plan (MISRIP). In
the alternative, a participant may choose to have their balance adjusted based on
the return on funds selected by the participant under the same conditions as are
contained in MISRIP.
	 
	•	 	The entire amount credited to the participant’s account will be paid to the
participant in a lump sum upon the expiration of the Deferral Agreement, unless the
participant

1

 

	 	 	elects at the time the Deferral Agreement is entered into to further defer receipt
of that amount by having the balance upon expiration of the Agreement credited to
an account in his or her name in TVA’s MISRIP. Credits made in that plan as a
result of such an election will be subject to all of the provisions of MISRIP, including
the payout options specified in that plan.

Administration:

	•	 	The Chief Officers or other officers reporting to the Board recommend executives
for participation in this plan, and also recommend the duration of the Deferral
Agreement and the amount of the yearly credit. The Board approves the participation
of individual executives as well as the amount of the credits and the duration of
the Deferral Agreement. The Chief Officers shall enter into Deferral Agreements
with participants on behalf of TVA after such approval. The Board or the Board’s
designee shall have sole and exclusive responsibility for resolving any dispute
regarding this plan or a Deferral Agreement. The decisions of the Board or its’ designee
in all matters pertaining to the plan’s operation shall be final and conclusive as to
all parties.
	 
	•	 	The Chief Financial Officer shall maintain an account in the name of each
participant and credit to each account interest, return, and other such amounts as may
be approved, The Chief Financial Officer shall make payments to managers
and beneficiaries pursuant to this plan.
	 
	•	 	Nothing contained in this plan or any Deferral Agreement shall be
construed as conferring upon any participant the right to
continue in the employment of TVA as an executive or in any
other capacity.
	 
	•	 	Nothing contained in this plan or any Deferral Agreement and no action
taken pursuant to the provisions of this plan or any Deferral
Agreement shall create or be construed to create a trust of any
kind, or a fiduciary relationship between TVA and any
participant, designated beneficiary or any other person.
	 
	•	 	No transfer, assignment, pledge, seizure, or other voluntary or
involuntary alienation or encumbrance of any benefit provided
under this plan or any Deferral Agreement will be permitted or
recognized other than as specifically provided in this plan. In
the event of any such attempted alienation or encumbrance, the
Board may in its uncontrolled discretion declare the said
benefit to be temporarily or permanently forfeited by the
participant and, in lieu of paying the same to or for the
participant, may in its uncontrolled discretion pay or apply
such benefit temporarily or permanently to or for the use of any
persons who are dependents of, or are related by blood, by
marriage, or by adoption to, such participant, or the Board may in
its uncontrolled discretion cause such benefit to revert to the
general funds of TVA.

2

 

	•	 	TVA may offset amounts owed to it by participants against amounts payable to
a participant under this plan.

Amendments:

	•	 	This plan may be amended or discontinued by the Board at any time, except that
if the Board elects to discontinue the plan, any credits already made to
participant’s accounts as of the date of termination will be paid to the participant at
that time, with interest as calculated under this plan.

3Ex-10.19 Tom D. Kilgore Employment Contract

 

Exhibit
10.19

January 19, 2005

Mr. Tom D. Kilgore

8100 Kennett Village Court

Raleigh, North Carolina 27615

Dear Tom:

The TVA Board has authorized me to offer you the position of President and Chief Operating Officer
with the Tennessee Valley Authority in Knoxville, Tennessee Upon acceptance of this position,
your annual compensation will be comprised of the following:

	 	 	 	 	 
	Annual Salary
	 	$	140,000	 
	Annual Deferred Compensation
	 	$	510,000	 
	 
	 	 	 
	Base Compensation
	 	$	650,000	 

Annual deferred compensation will be credited to your deferred compensation account on a monthly
basis at the rate of 1/12th each month. You may elect to receive up to 50 percent of your annual
deferred compensation in cash at the end of the fiscal year.

Additionally, you will be included as a participant in TVA’s Executive Annual and Long-Term
Incentive Plans. Under the Annual Incentive Plan your annual incentive opportunity will be 70
percent of your base compensation beginning in fiscal year 2005-prorated based on the number of
months you participate in the performance cycle. Under the Long-term Incentive Plan, your award
opportunity will be 60 percent of your base compensation beginning with the performance cycle (FY
2003-2005) ending in fiscal year 2005. Actual annual and long-term incentive awards are based
solely on organizational performance measured against performance goals established at the
beginning of each performance period. For FY 2005, 30 percent of your annual incentive award will
be based on TVA scorecard performance and 70 percent will be based on the average performance of
all strategic business units. You will have an opportunity to elect to receive these awards in a
lump-sum cash payment or have all or part of the awards credited to your deferred compensation
account.

Due to the nature of this position, you will also be included as a participant in TVA’s
Supplemental Executive Retirement Plan (SERP) at the Tier 1 level with the following modifications:

 

 

Mr. Tom
D. Kilgore

Page 2

January 19, 2005

	 	•	 	If your employment terminates during the first five years (other than for
cause as defined below), you will be entitled to SERP benefits and receive credit for
eight years of service and the five-year vesting requirement will be waived.
	 
	 	•	 	If your employment terminates after five years of service, your SERP
benefits will be based on your actual service plus three years.
	 
	 	•	 	The “Prior Employer Offset” will be waived.
	 
	 	•	 	The “Qualified Plan Offset” will be calculated based on the pension benefit
you would be eligible to receive as a participant in TVA’s Cash Balance Benefit
Structure with the years of credited service used for SERP benefit calculation
purposes.
	 
	 	•	 	In the event of termination (other than for cause as defined below), your
termination will be considered an approved termination under TVA’s SERP and a benefit
equal to that calculated for an “Approved Termination” will be payable upon
termination.

A general outline of how the SERP calculation works has been furnished to you to use in your
consideration of this offer.

In addition, TVA will enter into a long-term deferred compensation agreement with you which will
provide annual deferred compensation credits for a period of five
years. Under the agreement, an
initial credit of $300,000 will be made to your account within one month following your employment
with TVA. This initial credit will be fully vested on the date it is contributed to your account.
Subsequent credits of $300,000 will be made to your account on
October 1, 2005, October 1, 2006,
October 1, 2007, and October 1, 2008. You will be fully vested in the value of your account if you
remain employed by TVA until the expiration of the agreement on September 30, 2009.

In the event you are not appointed as TVA’s Chief Executive Officer, TVA substantially reduces your
duties, responsibilities, or compensation, or TVA materially breeches this agreement with you, and
you terminate your employment with TVA, or if your employment is terminated for any reason other
than “for cause” (as defined below), you will be provided a lump sum payment equal to one year’s
annual compensation (including salary, annual deferred compensation, and the amount of the annual
and long-term incentive you would have been eligible to receive based on the successful achievement
of mid-level performance goals).

For purposes of this offer, termination “for cause” shall be considered to be under circumstances
involving (1) conviction of a felony or crime of moral turpitude, or (2) illegal conduct involving
dishonesty, fraud, or gross negligence that directly results in significant economic harm to TVA.

TVA also offers to provide you a lump sum payment in the amount of $35,000, less applicable taxes,
as a vehicle allowance, which is intended to be used to lease a vehicle for personal and official
business for 36 months. It is understood that you will elect whether to receive this payment
within 90 days of your employment. In the event your employment terminates prior to the expiration
of the lease, you will be required to

 

 

Mr. Tom D. Kilgore

Page 3

January 19, 2005

repay a portion of the payment for the months remaining in the 36-month period unless the
termination is mutually agreed upon by you and TVA. If you choose not to request this allowance,
you will be assigned a TVA vehicle for official business only. In addition, TVA will provide you a
one-time recruitment incentive payment of $150,000.

In connection with your move to Tennessee, TVA will pay for the actual and reasonable travel and
moving expenses for you and your immediate family. TVA’s Relocation Services Program is available
to assist you in the sale of your present home. Louise Grishom of our Shared Resources
organization will forward information to you regarding this program.

TVA also provides employee benefits which are described in materials that will be sent to you under
separate cover. You will be covered by the federal leave laws and, based on your prior years of
federal service, you will receive a minimum of four weeks of annual leave. The TVA Retirement
System, of which you will become a member, provides for vesting after five years of full-time
service, except that eligibility for death benefits vests immediately. Your employment will be
subject to the usual employment procedures and satisfactory results of a security investigation,
which will include a drug screen. As we have discussed, this position will also require a top
secret security clearance.

Please let me know if you accept our offer and the date that you wish to report.

If you have questions, or if I can be of assistance in any way, please do not hesitate to call me
at (865) 632-6307. We look forward to working with you.

Sincerely,

	 	 	 
	/s/ John E. Long, Jr.
	 	 
	 

John E. Long, Jr.

	 	 
	 
	 	 
	 

Tom D. Kilgore

	 	 
	 
	 	 
	 

Date

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}]]