Document:

ex_10-1.htm

    NON-EMPLOYEE
INTERIM CHIEF OPERATING OFFICER

    ENGAGEMENT
AGREEMENT

     

    This
Non-employee Interim Chief
Operating Officer Agreement (“Agreement”) is entered into
as of the 5th day of
February, 2009 (the “Effective
Date”) by and between Rubicon
Financial Incorporated, a Delaware corporation (the “Company”), and Bootstrap
Real Estate Investments, LLC, a California Limited Liability Company
(“Management
Company”).

    

    A.           Company
has determined it to be in the Company’s best interest to retain Todd Vande Hei
(“Executive”), Managing
Member of Management Company, to provide Non-employee Interim Chief Operating
Officer (“Non-employee Interim
COO”) services to Company as set forth on Exhibit A attached hereto and
as specified from time to time by the Board of Directors of the
Company;

    

    B.           Company
and Management Company agree Company shall retain Executive as a full-time
employee of Company following completion of a minimum $1,000,000 financing of
Company and subject to mutually agreed employment agreement between Company and
Executive; approval by Management Company; and, approval by Company Board of
Directors.

    

    C.           As
a result of Management Company’s and Executive’s engagement, the Company and/or
its affiliates has, or have disclosed to Management Company and Executive, and
Management Company and Executive has obtained, certain Confidential Information
(as defined herein).

    

    NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
conditions contained herein, the parties hereto agree as follows:

    

    1.
Engagement. The
Company hereby engages Executive, Managing Member of Management Company, to
perform those Non-employee Interim COO duties set forth in the Exhibit A
attached hereto and such other duties as may be requested from time to time by
the Board of Directors of the Company. Executive hereby accepts such engagement
upon the terms and subject to conditions set forth in this Agreement. This
agreement shall be ratified by the Board of Directors of Company within two (2)
business days of the execution hereof.

    

    2.
Non-employee Interim
Chief Operating Officer. Management Company agrees to designate
Executive, Managing Member of Management Company, as the Non-employee Interim
COO to Company to perform those duties of Non-employee Interim Chief Operating
Officer for Company as defined herein. Executive shall provide services as
Non-employee Interim COO of Company.

     

    3.  Directorship.  Executive currently
serves as a member of the Company’s Board of Directors and shall remain a member
serving at the pleasure of the Company’s stockholders.

    

    

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    4.
Compensation.

    

    A.           Engagement Fee. For
the services rendered by Executive under this Agreement, the Company shall pay
to Management Company a one-time fee of $30,000, payable in 120,000 shares of
the Company’s restricted common stock at a per share value equal to
$0.25.

    

    B.           Bonus Fees. Executive
will be eligible for incentive bonuses predicated on mutually agreed upon goals
attached in Exhibit B.

    

    5.
Term and
Survivability. The term of this Agreement shall be for a period of three
(3) months, beginning on the Effective Date. Notwithstanding the foregoing,
either party shall have the right to terminate this Agreement at any time, with
or without cause, effective immediately upon written notice to the other
party.

     

    6.
Costs and Expenses of
Management Company’s Performance. Except as set forth in the attached
Schedules, all costs and expenses of Management Company’s and Executive’s
performance hereunder shall be borne by the Company, so long as the Company
agrees verbally or in writing to reimburse or pay such costs and
expenses.

    

    7.
Taxes. As an
independent contractor, Management Company acknowledges and agrees that it is
solely responsible for the payment of any taxes and/or assessments imposed on
account of the payment of compensation to, or the performance of services by
Management Company pursuant this Agreement, including, without limitation, any
unemployment insurance tax, federal and state income taxes, federal Social
Security (FICA) payments, and state disability insurance taxes. The Company
shall not make any withholdings or payments of said taxes or assessments with
respect to amounts paid to Management Company hereunder; provided, however, that
if required by law or any governmental agency, the Company shall withhold such
taxes or assessments from amounts due Management Company, and any such
withholding shall be for Management Company’s account and shall not be
reimbursed by the Company to Management Company. Management Company expressly
agrees to make all payments of such taxes, as and when the same may become due
and payable with respect to the compensation earned under this
Agreement.

    

    8.
Confidentiality. For
a period of twenty four months from the termination of this Agreement,
Management Company agrees that Management Company will not, except when required
by applicable law or order of a court, during the term of this Agreement or
thereafter, disclose directly or indirectly to any person or entity, any Trade
Secrets (as defined below) or Confidential Information (as defined below) or
other information treated as confidential by the Company known, learned or
acquired from the Company by the Management Company during the period of the
Management Company’s engagement by the Company. For purposes of this Agreement,
“Confidential
Information” shall mean any and all Trade Secrets, knowledge, data or
know-how of the Company, any of its affiliates, or proprietary information of
third parties in the possession of the Company or any of its affiliates, and any
nonpublic technical, training, financial and/or business information treated as
confidential by the Company or any of its affiliates, including such
information, knowledge, Trade Secret or data conceived, originated, discovered
or developed by Management Company hereunder. For purposes of this Agreement,
“Trade Secrets” shall
include, without limitation, any formula, concept, pattern, processes, designs,
device, software, systems, list of customers, training manuals, marketing or
sales or service plans, business plans, marketing plans, financial information,
or compilation of information which is used in the Company’s business or in the
business of any of its affiliates. Confidential
Information and Trade Secrets shall not include, and the foregoing shall not
apply to, information that is (i) generally available to the public other than a
result of a disclosure by Management Company; (ii) available to Management
Company on a non-confidential basis prior to the disclosure by Company to
Management Company; (iii) available to the Management Company on a
non-confidential basis from a source other than Company or is affiliates,
provide, however, that such source is not bound by a confidentiality agreement;
or (iv) required to be disclosed by Management Company by law or pursuant to
court order. Management Company shall notify the Company of any information that
comes to its attention that might indicate that there has been a loss of
confidentiality with respect to the Confidential Information.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    9.
Return of the
Company’s Proprietary Materials. Management Company agrees to deliver
promptly to the Company on termination of this Agreement for whatever reason, or
at any time the Company may so request, all documents, records, artwork,
designs, data, drawings, flowcharts, listings, models, sketches, apparatus,
notebooks, disks, notes, copies and similar repositories of Confidential
Information and any other documents of a confidential nature belonging to the
Company, including all copies, summaries, records, descriptions, modifications,
drawings or adaptations of such materials which Management Company may then
possess or have under its control. Management Company further agrees that upon
termination of this Agreement, Management Company’s, employees, Management
Company’s, agents or independent contractors shall not retain any document, data
or other material of any description containing any Confidential Information or
proprietary materials of the Company.

    

    10.
Assignment of
Proprietary Rights. Management Company hereby assigns and transfers to
the Company all right, title and interest that Management Company may have, if
any, in and to all Proprietary Rights (whether or not patentable or
copyrightable) made, conceived, developed, written or first reduced to practice
by Management Company, whether solely or jointly with others, during the period
of Management Company’s engagement by the Company which directly relate to and
claim an improvement upon the technology or intellectual property owned by the
Company.

    

    Management
Company acknowledges and agrees that the Company shall have all right, title and
interest in, among other items, all research information and all documentation
or manuals related thereto that Management Company develops or prepares for the
Company hereunder during the period of Management Company’s engagement by the
Company and that such work by Management Company shall be work made for hire and
that the Company shall be the sole author thereof for all purposes under
applicable copyright and other intellectual property laws. With respect to all
Proprietary Rights which are assigned to the Company pursuant to this Section
10, Management Company will assist the Company in any reasonable manner for
reasonable compensation to obtain for the Company’s benefit patents and
copyrights thereon in any and all jurisdictions as may be designated by the
Company, and Management Company will execute, when requested, patent and
copyright applications and assignments thereof to the Company, or other persons
designated by the Company, and any other lawful documents deemed necessary by
the Company to carry out the purposes of this Agreement.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    11.
Trade Secrets of
Others. Management Company represents to the Company that its performance
of all the terms of this Agreement does not and will not breach any agreement to
keep in confidence proprietary information or trade secrets acquired by
Management Company in confidence or in trust prior to its engagement by the
Company, and Management Company will not disclose to the Company, or induce the
Company to use, any confidential or proprietary information or material
belonging to others. Management Company agrees not to enter into any agreement,
either written or oral, in conflict with this Agreement.

    

    12.
Other
Obligations. Management Company acknowledges that the Company, from time
to time, may have agreements with other persons which impose obligations or
restrictions on the Company regarding proprietary rights made or developed
during the course of work thereunder or regarding the confidential nature of
such work. Management Company agrees to be bound by all such obligations and
restrictions made known to him in writing by the Company and to take action as
may be reasonably required to discharge the obligations of the Company
thereunder.

    

    13.
Independent
Contractor. Management Company and designated Non-employee Interim COO
individually shall not be deemed to be employees of the Company for any purpose
whatsoever. Management Company shall have the sole and exclusive control over
its employees, consultants or independent contractors who provide services to
the Company on behalf of Management Company, and over the labor and employee
relations policies and policies relating to wages, hours, working conditions or
other conditions of its employees, consultants or independent
contractors.

    

    14.
Indemnification. The
Company shall, at its own expense, defend, indemnify and hold harmless the
Management Company and Management Company’s employees, consultants or
independent contractors who provide services for Company on behalf of Management
Company from and against any and all liabilities, claims, actions, losses, costs
and expenses (including reasonable attorneys’ fees and disbursements) (i)
relating to or arising out of the Company’s actual or alleged violation of any
law, statute, ordinance, order, rule or regulation; or (ii) to the extent such
Claim is primarily and directly based upon information or direction provided by
the Company to Management Company and Management Company’s employees,
consultants and independent contractors; provided, however, the foregoing shall
not apply to any portion of such Claims to the extent it is found to have
resulted primarily and directly from Management Company’s (A) infringement of
any United States patent, foreign letters patent, license, trademark, copyright,
trade secret or any other proprietary right other than as may be directed or
induced by the Company for the services provided by Management Company
hereunder; (B) breach of this Agreement or any other agreement; (C) violation of
any law, statute, ordinance, order, rule or regulation; or (D) any negligence or
intentional misconduct in connection with such performance. This indemnification
is not voided by the termination of this agreement.

    

    15.
Non-Solicitation.     Management
Company, Executive and its employees, consultants and independent contractors
will not, during the term this Agreement and for one year thereafter, directly
or indirectly (whether as an owner, partner, shareholder, agent, officer,
director, employee, independent contractor, consultant, or otherwise) with or
through any individual or entity: (i) employ, engage or solicit for employment
any individual who is, or was at any time during the twelve-month period
immediately prior to the termination of this Agreement for any reason, an
employee of the Company, or otherwise seek to adversely influence or alter such
individual’s relationship with the Company; or (ii) solicit or encourage any
individual or entity that is, or was during the twelve-month period immediately
prior to the termination of this Agreement for any reason, a customer or vendor
of the Company to terminate or otherwise alter his, her or its relationship with
the Company or any of its affiliates.

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    16.
Governing Law.
This Agreement shall be governed, construed and interpreted in accordance with
the internal laws of the State of California.

    

    17.
Entire Agreement:
Modifications and Amendments. The terms of this Agreement are intended by
the parties as a final expression of their agreement with respect-to such terms
as are included in this Agreement and may not be contradicted by evidence of any
prior or contemporaneous agreement. The Exhibits referred to in this Agreement
are incorporated into this Agreement by this reference. This Agreement may not
be modified, changed or supplemented, nor may any obligations hereunder be
waived or extensions of time for performance granted, except by written
instrument signed by the parties or by their agents duly authorized in writing
or as otherwise expressly permitted herein.

    

    18.
Prohibition of
Assignment. This Agreement and the rights, duties and obligations
hereunder may not be assigned or delegated by Management Company without the
prior written consent of the Company. Any assignment of rights or delegation of
duties or obligations hereunder made without such prior written consent shall be
void and of no effect.

    

    19.
Approval of Public
Communications and Press Releases. Management Company and Company agree
that any and all public announcement regarding Management Company or
Non-employee Interim COO must be approved by Management Company in
advance.

    

    20.
Binding Effect:
Successors and Assignment. This Agreement and the provisions hereof shall
be binding upon each of the parties, their successors and permitted
assigns.

    

    21.
Validity. This
Agreement is intended to be valid and enforceable in accordance with its terms
to the fullest extent permitted by law. If any provision of this Agreement is
found to be invalid or unenforceable by any court of competent Jurisdiction, the
invalidity or unenforceability of such provision shall not affect the validity
or enforceability of all the remaining provisions hereof.

    

    22.
Notices. All
notices and other communications hereunder shall be in writing and, unless
otherwise provided herein, shall be deemed duly given if delivered personally or
by telecopy or mailed by registered or certified mail (return receipt requested)
or by Federal Express or other similar courier service to the parties at the
following addresses or (at such other address for the party as shall be
specified by like notice):

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (i)
If to the Company:

    Rubicon
Financial Incorporated

    Suite
600

    4100
Newport Place

    Newport
Beach, CA  92660

    T:
(949) 798-7220

    F:
(949) 798-7278

    

    (ii)
If to Management Company:

    Bootstrap
Real Estate Investments, LLC

    c/o
Todd Vande Hei, Managing Member

    15
Calle Sonador

    San
Clemente, CA 92673

    T:
(949) 534-9144

    F:
(949) ______________

    

                Any
such notice, demand or other communication shall be deemed to have been given on
the date personally delivered or as of the date received, as the case may
be.

    

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.

     

    Company:

    Rubicon
Financial Incorporated

    

    

    By:
/s/ Joseph Mangiapane,
Jr.                                                                

           Joseph
Mangiapane, Jr., CEO

    

    Management
Company:

    Bootstrap
Real Estate Investments, LLC

     

    

    By:
/s/ Todd Vande
Hei                                                                

          Todd
Vande Hei, Managing Member

    

    Executive:

    

    

    /s/ Todd Vande
Hei                                                                

    Todd
Vande Hei

    
      
         

      

      
        6exhibit1039.htm

    

     

    Exhibit
10.39

     

    

     

    

     

    PUGET
SOUND ENERGY, INC.

     

    

     

    SUPPLEMENTAL
EXECUTIVE

    RETIREMENT
PLAN

    

    

    

    

    

    

    

    

    

    

     

    Amended
and Restated

     

    Effective
January 1, 2009

     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    Table of Contents

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                  ARTICLE I
 	           
      ESTABLISHMENT
      AND PURPOSE
	
                                                  1.1

                                                	
                                                  Establishment

                                                
	
                                                  1.2

                                                	
                                                  Purpose

                                                
	
                                                  ARTICLE
      II

                                                	
                                                  DEFINITIONS

                                                
	
                                                  2.1

                                                	
                                                  Definitions

                                                
	
                                                  2.2

                                                	
                                                  Number;
      Headings

                                                
	
                                                  ARTICLE
      III

                                                	
                                                  ELIGIBILITY

                                                
	
                                                  3.1

                                                	
                                                  General

                                                
	
                                                  3.2

                                                	
                                                  Change
      of Control

                                                
	
                                                  3.3

                                                	
                                                  Disability

                                                
	
                                                  ARTICLE
      IV

                                                	
                                                  RETIREMENT
      BENEFIT

                                                
	
                                                  4.1

                                                	
                                                  Amount

                                                
	 
      	
                                                  (a)  General

                                                
	 
      	
                                                  (b)  Umbrella
      Benefit

                                                
	 
      	
                                                  (c)  Disability

                                                
	 
      	
                                                  (d)  Nonduplication

                                                
	
                                                  4.2

                                                	
                                                  Distribution

                                                
	 
      	
                                                  (a)  Normal
      Form of Payment

                                                
	 
      	
                                                  (b)  Alternate
      Forms of Payment

                                                
	 
      	
                                                  (c)  Reduction
      for Early Commencement

                                                
	 
      	
                                                  (d)  Payment
      Suspension for Specified Employees

                                                
	 
      	
                                                  (e)  Supplemental
      Agreements

                                                
	 
      	
                                                  (f)  Death
      Benefits

                                                
	
                                                  4.3

                                                	
                                                  Other
      Forfeiture

                                                
	
                                                  ARTICLE
      V

                                                	
                                                  ADMINISTRATION
      AND CLAIMS PROCEDURE

                                                
	
                                                  5.1

                                                	
                                                  Administration

                                                
	
                                                  5.2

                                                	
                                                  Claims
      Procedure

                                                
	 
      	
                                                  (a)  Filing
      a Claim

                                                
	 
      	
                                                  (b)  Claim
      Review

                                                
	 
      	
                                                  (c)  Appeal

                                                
	 
      	
                                                  (d)  Standard
      of Review

                                                
	 
      	
                                                  (e)  Legal
      Action

                                                
	
                                                  5.3

                                                	
                                                  Finality
      of Determination

                                                
	
                                                  5.4

                                                	
                                                  Expenses

                                                
	
                                                  ARTICLE
      VI

                                                	
                                                  FUNDING
      OF THE PLAN

                                                
	
                                                  ARTICLE
      VII

                                                	
                                                  AMENDMENT
      AND TERMINATION

                                                
	
                                                  ARTICLE
      VIII

                                                	
                                                  GENERAL
      PROVISIONS

                                                
	
                                                  8.1

                                                	
                                                  Withholdings
      for Taxes and Other Deductions

                                                
	
                                                  8.2

                                                	
                                                  Nonalienation

                                                
	
                                                  8.3

                                                	
                                                  Severability

                                                
	
                                                  8.4

                                                	
                                                  No
      Right of Employment

                                                
	
                                                  8.5

                                                	
                                                  Incompetency

                                                
	
                                                  8.6

                                                	
                                                  Successors
      and Assigns

                                                
	
                                                  8.7

                                                	
                                                  General
      Limitation of Liability

                                                
	
                                                  8.8

                                                	
                                                  No
      Guaranty of Tax Consequences

                                                
	
                                                  8.9

                                                	
                                                  Governing
      Law

                                                

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
 

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

    

    

    PUGET
SOUND ENERGY, INC.

    SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

    

    As
Amended and Restated Effective January 1, 2009

     

    ARTICLE
I                                

     

    ESTABLISHMENT
AND PURPOSE

     

    1.1 Establishment.  This
Supplemental Executive Retirement Plan (the "Plan") was originally effective as
of June 1, 1997 (the "Effective Date").  The Plan was previously
amended and restated effective October 5, 2004 and February 24,
1999.  The Plan is now amended and restated effective for all amounts
earned or vested on or after January 1, 2009.  Any Retirement Benefit
earned and vested prior to January 1, 2005 shall be paid in accordance with and
subject to all of the terms and conditions of the Plan as in effect on December
31, 2004 and to the extent provided by this amendment and
restatement.  Any Retirement Benefit earned or vested from January 1,
2005 through December 31, 2008 shall be governed by this amendment and
restatement, as modified by the operations of the Plan during such period in
accordance with Code Section 409A and then applicable IRS pronouncements
(including transition relief).  No amendment to the Plan on and after
January 1, 2009 is intended to, nor shall it be deemed to, apply to other than
the applicable terms and conditions of the Plan in effect prior to January 1,
2005 unless expressly provided by such amendment. 

     

    1.2 Purpose.  The Plan
is intended to be an unfunded plan for purposes of providing supplemental
retirement income to a select group of management and highly compensated
employees, and as such, it is intended that the Plan be exempt from Parts 2
through 4 of Subtitle B of Title I of the Employee Retirement Income Security
Act of 1974, as amended.  The Plan is not intended to satisfy the
qualification requirements of Code Section 401(a).

     

                ARTICLE
II                                

     

    DEFINITIONS

     

    2.1 Definitions.  When
used herein, the following terms shall have the meanings set forth
below:

     

    (a) "Actuarial Equivalent" means a
benefit payable at a particular time and in a particular form and manner and
which has the same value as the benefit which it replaces.  For
purposes of lump sum payment calculations, such determination shall be made
using the mortality table and interest rate prescribed by the Commissioner of
Internal Revenue for purposes of Code Section 417(e)(3)(A) in effect on the
date as of which the present value is being determined (based on the applicable
interest rate or rates for the September immediately preceding the first day of
the Plan Year).  For purposes of annuity payment calculations, such
determination shall be made using the following actuarial
assumptions:  (i) interest rate at eight percent (8%) per annum
compounded annually; and (ii) participant mortality rate pursuant to the
1984 Unisex Pensioners Mortality Table.

     

    (b) "Affiliate" means any
corporation, employer, trade, business, or other entity that, together with the
Company, is treated as a single employer under Code Section 414(b) or
(c).

    
      
      

    

    (c) "Beneficiary" means the
individual, trust or other entity designated by the Participant who, upon the
Participant's death, may receive the payment of the Retirement Benefit to the
extent provided in Section 4.2(f).  All Beneficiary designations shall
be in writing and on a form prescribed by the Committee for such purpose, and
any such designation shall only be effective if and when delivered to the
Committee during the lifetime of the Participant.  The Participant may
from time to time change a designated Beneficiary or Beneficiaries by filing a
new beneficiary designation form with the Committee.  In the event the
Participant shall fail to designate a Beneficiary or Beneficiaries, if such
designation is ineffective, or if no designated Beneficiary survives the
Participant, any payment then due to the Participant shall be paid to the
Participant's estate.

     

    (d) "Board" means the Board of
Directors of the Company and includes any individual or entity to which such
Board has delegated authority to act with respect to the Plan.

     

    (e) "Change of Control" has the
meaning set forth in the Company's Benefits Protection Trust with respect to the
Plan.

     

    (f) "Code" means the Internal
Revenue Code of 1986, as amended.

     

    (g) "Committee" means the
Compensation and Leadership Development Committee of the Board and includes any
individual or entity to which such Committee has delegated authority to act with
respect to the Plan.

     

    (h) "Company" means Puget Sound
Energy, Inc. or any successor thereto.

     

    (i) "Date of Termination" means
the date the Participant ceases to be employed by the Company or any of its
Affiliates.  In no event shall the Date of Termination be earlier than
the Participant's "separation from service" within the meaning of Code Section
409A.

     

    (j) "Deferred Compensation Plan"
means the nonqualified "Puget Sound Energy Deferred Compensation Plan for Key
Employees," as amended from time to time, or any successor thereto.

     

    (k) "Disability" means a physical
or mental condition that entitles the Participant to benefits under the
Company's group long-term disability plan.

     

    (l) "Early Commencement Date"
means the date on which Retirement Benefits commence prior to the Normal
Commencement Date and shall be the later of the date elected by the Participant
in accordance with Section 4.2(c) and his or her Date of
Termination.  In no event may the Early Commencement Date occur prior
to the Participant attaining age 55.

     

    (m) "Earnings" means the base
salary and annual bonus paid to the Participant by the Company and its
Affiliates, before any deferrals or reductions under a Code Section 401(k)
plan, a Code Section 125 cafeteria plan or a nonqualified deferred
compensation plan, but excluding long-term incentive compensation.  A
bonus will be included in Earnings in the year in which it is paid to the
Participant, or in which it would have been paid had it not been
deferred.  Amounts paid after the Participant ceases to be an active
Participant in the Plan shall not be taken into account.

     

    (n) "Effective Date" has the
meaning set forth in Section 1.1.  The effective date of this
amendment and restatement is January 1, 2009.

     

    (o) "ERISA" means the Employee
Retirement Income Security Act of 1974, as amended from time to
time.

     

    (p) "Frozen Retirement Benefit"
means the monthly "Retirement Benefit" to which the Participant would have been
entitled as of the Normal Commencement Date (or, if applicable, the Early
Commencement Date) if the Participant had voluntarily terminated services
without cause on December 31, 2004 and received a payment of the benefits
available from the Plan in such form with the maximum payment value (after
taking into account the Participant's age as of the actual Date of Termination
and the benefit offsets calculated under Sections 3.2(a)(i) through (iv) as of
the applicable commencement date under the terms of the Plan as in effect on
December 31, 2004).  Notwithstanding the foregoing, the Frozen
Retirement Benefit may increase to equal the present value (using reasonable
actuarial assumptions) of the Retirement Benefit to which the Participant
actually becomes entitled, at the time and in the form actually paid, determined
under the terms of the Plan in effect on October 3, 2004 without regard to
any further services rendered by the participant after December 31, 2004 or
to any other events affecting the amount of or the entitlement to benefits
(other than the Participant's election with respect to the time or form of an
available benefit).  The calculation of the Frozen Retirement Benefit
shall be consistent in all respects with Treasury Regulation Section
1.409A-6(a)(3)(i).

     

    (q) "Highest Average Earnings"
means the average of the Participant's highest three calendar years of
Earnings.  The three calendar years do not have to be consecutive, but
they must be among the last 10 complete calendar years completed by the
Participant prior to the Date of Termination (with the calendar year in which
the Date of Termination occurs counting as a complete calendar year) and on or
after January 1, 2000.  If the Participant completes less than three
complete calendar Years of Service prior to the Date of Termination, then the
average shall be computed by adding together the Participant's monthly Earnings
for all of the calendar months during which the Participant was employed by the
Company or any of its Affiliates, dividing the result by the number of months in
such period, and multiplying that result by 12.

     

    (r) "Specified Employee" means a
"key employee" (as defined in Code Section 416(i) without regard to Code Section
416(i)(5)) of the Company.  For purposes of the Plan, a Participant is
a key employee if he or she meets the requirements of Code Section
416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations
thereunder and disregarding Code Section 416(i)(5)) at any time during the
12-month period ending on an identification date.  If a Participant is
a key employee as of an identification date, he or she is treated as a Specified
Employee for the 12-month period beginning on the first day of the fourth month
following the identification date.  The Committee may designate any
date in a calendar year as the identification date provided that it uses the
same identification date with respect to all arrangements, and any change to the
identification date may not be effective for a period of 12
months.  If no identification date is designated, the identification
date is December 31.  The Committee may prospectively
designate an identification date through a separately adopted
document.

     

    (s) "Normal Commencement Date"
means the first day of the month immediately following the Participant's Date of
Termination or, if later, the first day of the month on or immediately following
the date on which the Participant attains age 62.

     

    (t) "Participant" means one of a
select group of management personnel or highly compensated employees designated
by the Committee to participate in the Plan.  A Participant shall
automatically cease to accrue additional benefits under the Plan at the time the
Participant ceases to be a member of management or a highly compensated
employee, as determined by the Committee.  In addition, the Committee
may revoke the active participation (and discontinue the benefit accruals) of
any Participant at any time and for any reason.  Notwithstanding the
foregoing, in no event shall the revocation of a Participant's active
participation in the Plan (or the cessation of additional benefit accruals under
the Plan) reduce the Retirement Benefit previously accrued by such Participant
prior to such revocation or cessation.

     

    (u) "Participant Year of Service"
means a Year of Service performed while a Participant under the Plan or under
such other predecessor plans or agreements that the Committee shall
designate.

    
      
      

    

    (v) "Plan" means this "Puget Sound
Energy, Inc. Supplemental Executive Retirement Plan," together with any
amendments hereto.

     

    (w) "Plan Year" means the
consecutive 12-month period beginning each January 1 (or in the case of the
first Plan Year, beginning on the Effective Date) and ending the following
December 31.

     

    (x) "Retirement Benefit" means the
benefit to which the Participant is entitled under Article III at the
Normal Commencement Date.

     

    (y) "Retirement Plan" means the
"Retirement Plan for Employees of Puget Sound Energy, Inc."

     

    (z) "Section 409A" means Code
Section 409A, as clarified or modified by regulations and pronouncements
from the U.S. Department of Treasury or the Internal Revenue
Service.

     

    (aa) "WNG Nonqualified Retirement
Benefits" means the nonqualified pension benefits provided under an
employment agreement between the Participant and Washington Energy Company or
Washington Natural Gas Company.

     

    (bb) "Year of Service" means 12
consecutive months of employment with the Company or its Affiliates, or with
Washington Energy Company or Washington Natural Gas Company.  No month
of employment shall be counted in more than one Year of Service.

     

    2.2 Number;
Headings.  Except when otherwise indicated by the context, the
definition of any term in the singular shall also include the
plural.  Headings of Articles and Sections herein are included solely
for convenience, and if there is any conflict between such headings and the text
of the Plan, such text shall control.

     

                     ARTICLE
III                                           

     

    ELIGIBILITY

     

    3.1 General.  A
Participant whose employment with the Company and its Affiliates terminates (or
is terminated) for any reason other than death after completing five Participant
Years of Service shall be entitled to receive a Retirement Benefit as of the
Normal Commencement Date.  A Participant whose employment terminates
or is terminated (voluntarily or involuntarily) by the Company and its
Affiliates prior to completing five Participant Years of Service shall not be
entitled to any Retirement Benefit or other payment or benefit under the
Plan.

     

    3.2 Change of
Control.  Notwithstanding Section 3.1, a Participant whose
employment with the Company and its Affiliates terminates (or is terminated)
after a Change of Control shall be treated as completing five Participant Years
of Service as of the Date of Termination regardless of the Participant's actual
Participant Years of Service.

     

    3.3 Disability.  If a
Participant suffers a Disability while employed by the Company or its
Affiliates, then for purposes of Section 3.1, the Participant Years of Service
shall be determined as if the Participant remained employed until the Normal
Commencement Date (or Early Commencement Date if the Participant elects to
commence Retirement Benefit as of such date) or the end of the Participant's
Disability, whichever is earlier.  If the Participant is reemployed
after the Participant's Disability ends, then for purposes of Section 3.1, the
Participant Years of Service shall be determined by adding the Participant's
period of employment following rehire to the period determined in accordance
with the preceding sentence.

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

                ARTICLE
IV                                           

     

    RETIREMENT
BENEFIT

     

    4.1 Amount.

     

    (a) General.  The
benefit payable under the Plan is the Retirement Benefit.  The
"Retirement Benefit" equals the umbrella benefit calculated in accordance with
subsection (b) below.  The portion of the Retirement Benefit that
consists of the Frozen Retirement Benefit is subject to all of the terms and
conditions of the Plan as in effect on December 31, 2004 or any earlier date as
applicable, including those regarding the time and form of distributions,
without regard to any changes in this amended and restated Plan.  The
remainder of the Retirement Benefit is subject to the terms and conditions of
this amended and restated Plan.

     

    (b) Umbrella
Benefit.  The umbrella benefit for purposes of
subsection (a) above is the monthly amount payable for the life of the
Participant commencing as of the Normal Commencement Date equal to the amount
described in clause (i) below minus the sum of clauses (ii), (iii), and (iv)
below.

     

    
      	
              (i)  

            	
              One-twelfth
      (1/12) of the Participant's Highest Average Earnings times Years of
      Service (not in excess of 15) times
3-1/3%.

            

    

     

    
      	
              (ii)  

            	
              The
      monthly amount payable (or that would be payable) under the Retirement
      Plan to the Participant as of the Normal Commencement Date calculated as
      if such payment were made in the form of a Straight-Life Annuity (as
      defined in the Retirement Plan) commencing on such date and including all
      amounts previously paid or separated (or payable or separable) pursuant to
      a domestic relations order which the Retirement Plan's Plan Administrator
      has accepted as "qualified" with respect to the Participant's interest
      under such Plan.

            

    

     

    
      	
              (iii)  

            	
              The
      monthly amount of any WNG Nonqualified Retirement Benefits payable (or
      that would be payable) to the Participant as of the Normal Commencement
      Date in the form of a single life annuity for the life of the Participant
      (or if such benefits are paid or payable as of another date and/or in
      another form, the Actuarial Equivalent monthly amount of such benefits
      calculated as a single life annuity payable for the life of the
      Participant and commencing as of the Participant's Normal Commencement
      Date).

            

    

     

    
      	
              (iv)  

            	
              The
      Actuarial Equivalent monthly amount payable (or that would be payable) as
      of the Normal Commencement Date from any pension-type rollover accounts
      (including without limitation said accounts related to the Annual Cash
      Balance Restoration Account) within the Deferred Compensation Plan, using
      the Actuarial Equivalent methodology for purposes of lump sum payment
      calculations.

            

    

     

    (c) Disability.  If
a Participant suffers a Disability while employed by the Company or its
Affiliates, then for purposes of this Section 4.1, the Participant's Highest
Average Earnings shall be determined as of the date the Participant incurred the
Disability.  If the Participant is reemployed after the Participant's
Disability ends, then for purposes of this Section 4.1, the Highest Average
Earnings shall be determined as of the subsequent Date of Termination and
excluding the period of Disability.

     

    (d) Nonduplication.  The
Retirement Benefit is not intended to duplicate any other comparable payments or
benefits under any other of the Company's plans, programs, policies or
agreements.  Should any such other comparable payments or benefits be
due, the amount of the Retirement Benefit shall be reduced by such other
comparable payments or benefits in the manner and to the extent determined by
the Committee.

     

    4.2 Distribution.

     

    (a) Normal Form of
Payment.  Except as provided otherwise in this
Section 4.2, the Retirement Benefit shall be distributed to a Participant
in the form of a lump sum payable within 90 days following the Normal
Commencement Date.

     

    (b) Alternate Forms of
Payment.  At any time that is within 30 days of a
Participant's initial eligibility under the Plan or on or before December 31,
2008 in accordance with Code Section 409A and all applicable transition guidance
thereunder, a Participant may elect to receive the Actuarial Equivalent value of
the Retirement Benefit in one of the methods identified below in lieu of the
normal form of payment described in subsection (a) above:

     

    
      	
              (i)  

            	
              Monthly
      installments over two to 20 years, commencing within 90 days following the
      Normal Commencement Date;

            

    

     

    
      	
              (ii)  

            	
              Straight-life
      annuity, commencing at the specified date elected by the Participant
      following the Normal Commencement
Date;

            

    

     

    
      	
              (iii)  

            	
              Optional
      joint and survivor annuity (100%, 75%, 50% or 25%), commencing at the
      specified date elected by the Participant following the Normal
      Commencement Date; and

            

    

     

    
      	
              (iv)  

            	
              Transfer
      of Actuarial Equivalent lump-sum value of the Retirement Benefit to the
      Deferred Compensation Plan (and thereafter payable in accordance with the
      terms and conditions of such plan), with the transfer to be completed on
      the Normal Commencement Date or, if the Date of Termination is on or after
      a Participant attaining age 55, the Early Commencement
    Date.

            

    

     

    The terms
and conditions of the optional joint and survivor annuity form of payment shall
be the same as those for the corresponding annuity under Section 6.6 (or its
successor) of the Retirement Plan to the maximum extent permitted by Code
Section 409A.  An election of distribution method under this
subsection (b) may be changed at least 12 months prior to the date
payment is originally scheduled to commence.  Such election change may
be made only two times by the Participant, and each election must result in a
five-year delay of the actual commencement date.

     

    (c) Reduction for Early
Commencement.  Within 30 days of a Participant's initial
eligibility under the Plan, the Participant may elect to commence the Retirement
Benefit prior to the Normal Commencement Date as of the Early Commencement
Date.  Any Retirement Benefit that becomes payable under this
subsection (c) shall equal the Retirement Benefit set forth under Section
4.1(a) except the payment calculated under Section 4.1(b)(i) shall be further
reduced (prior to applying the reductions of Sections 4.1(b)(ii) through (iv))
by 1/3% for each month that the Early Commencement Date occurs prior to the
beginning of the month coincident with or next following the date the
Participant would attain age 62.  The reductions of Section 4.1(b)(ii)
through (iv) shall be similarly calculated based on said early commencement
distribution date, notwithstanding any provision of Section 4.1(b) to the
contrary.  Early commencement under this subsection (c) is
available only for a Participant whose Date of Termination is on or after the
date the Participant attains age 55.

     

    (d) Payment Suspension for
Specified Employees.  To the extent a Participant is designated
as a Specified Employee as of the Date of Termination, any payment or payments
due under subsection (a) or (b) above shall not be made during the period
that begins on the Date of Termination and ends six months
thereafter.  Any payment or payments so suspended shall be paid on the
first business day following the end of such six-month period.

     

    (e) Supplemental
Agreements.  If an agreement between the Company and a
Participant supplements the Retirement Benefit and related rights provided under
the Plan, such agreement shall be incorporated by reference herein to the extent
in compliance with the requirements of Code Section 409A.

     

    (f) Death
Benefits.

     

    
      	
              (i)  

            	
              If
      a Participant dies (A) while actively participating in the Plan or
      after completing five Participant Years of Service and (B) such death
      occurs on or before the date on which the Retirement Benefit is
      distributed (or commences to be distributed), no Retirement Benefit shall
      be payable under the Plan.  However, the Participant's spouse
      (as reasonably determined by the Committee as of the Participant's date of
      death) shall receive an amount equal to the lump-sum Actuarial Equivalent
      as of the Participant's Normal Commencement Date of the benefit that would
      have been payable under the 50% joint and survivor form of payment, which
      benefit shall be calculated by assuming that the Participant had died the
      day after the Normal Commencement Date and by using the actual Participant
      Years of Service and actual Years of Service completed by the
      Participant.  If the Participant is not actively employed
      immediately prior to the date of death on account of Disability, the
      actual Participant Years of Service and actual Years of Service will
      include the years of Disability.  If the Participant dies before
      attaining age 62, such benefit shall be reduced to the extent
      provided in subsection (c) above.  Such benefit shall be
      paid within 90 days of the Committee's receipt of the notice of the
      Participant's death.  A benefit shall not be payable with
      respect to a Participant who dies while not actively participating in the
      Plan or before completing five Participant Years of
    Service.

            

    

     

    
      	
              (ii)  

            	
              If
      a Participant dies after the date on which the Retirement Benefit
      commences to be distributed, the Beneficiary shall receive payment of the
      Retirement Benefit to the extent the form in which the Retirement Benefit
      is being paid provides for such
benefit.

            

    

     

    4.3 Other
Forfeiture.  If a Participant who is receiving benefits under
the Plan following an Early Commencement Date (including via a transfer to the
Deferred Compensation Plan) is at any time employed directly or indirectly as an
employee or director of, or retained as an independent contractor, consultant or
agent for, an electric or gas utility (including any federal, state or municipal
utility authority or district) serving retail customers within Washington or
Oregon, or a person or entity supplying or seeking to supply electric power or
natural gas to retail customers within Washington or Oregon, then the Committee
may suspend all benefits payable to the Participant under the Plan (or the
Deferred Compensation Plan) during the period of such employment and may require
repayment to the Company of any benefits received by the Participant during the
period of such employment.  If the competitive employment is
subsequently terminated, benefits hereunder (or under the Deferred Compensation
Plan) shall resume without adjustment to reflect the suspension
period.

     

    ARTICLE
V                                

     

    ADMINISTRATION
AND CLAIMS PROCEDURE

     

    5.1 Administration.  The
Plan shall be administered by the Committee in accordance with the Plan's terms
and applicable law.  The Committee shall have the full power and
authority (discretionary and otherwise) to interpret, construe, and administer
the Plan in its sole discretion and to make final and binding determinations for
all parties.  The Committee shall establish and maintain such accounts
or records as the Committee may from time to time consider necessary or
convenient for the administration of the Plan.

     

    5.2 Claims
Procedure.  

     

    (a) Filing a Claim.  A Participant or
a Beneficiary, or the authorized representative of either (the "Claimant"), who
believes that he or she is then entitled to benefits hereunder may file a
written claim for such benefits with the Vice President of Human
Resources.  The Vice President of Human Resources may prescribe a form
for filing such claims, and, if it does so, a claim will not be deemed properly
filed unless such form is used, but the Secretary of the Vice President of Human
Resources shall provide a copy of such form to any person whose claim for
benefits is improper solely for this reason.

     

    (b) Claim Review.  Claims that are
properly filed will be reviewed by the Vice President of Human Resources, which
will make its decision with respect to such claim and notify the Claimant in
writing of such decision within 90 days (45 days in the case of a claim
related to a Participant's Disability) after its receipt of the written claim;
provided that the 90-day period (45-day period in the case of a claim related to
a Participant's Disability) can be extended for up to an additional 90 days (30
days in the case of a claim related to a Participant's Disability) if the Vice
President of Human Resources determines that special circumstances require an
extension of time to process the claim and the Claimant is notified of the
extension, and the reasons therefor, prior to the commencement of the
extension.  If the claim is wholly or partially denied, the written
response to the Claimant shall include:

     

    
      	
              (i)  

            	
              the
      specific reason or reasons for the
denial;

            

    

     

    
      	
              (ii)  

            	
              reference
      to the specific Plan provisions on which the denial is
    based;

            

    

     

    
      	
              (iii)  

            	
              a
      description of any additional information necessary for the Claimant to
      perfect his or her claim and an explanation why such information is
      necessary;

            

    

     

    
      	
              (iv)  

            	
              a
      description of this Plan's claim appeal procedure (and the time limits
      applicable thereto), as set forth in
  Section 5.2(c);

            

    

     

    
      	
              (v)  

            	
              a
      statement of the Claimant's right to bring a civil action under ERISA
      following an adverse determination on appeal;
  and

            

    

     

    
      	
              (vi)  

            	
              in
      the case of an adverse benefit determination related to the Participant's
      Disability:

            

    

     

    
      	
              (i)  

            	
              if
      an internal rule, guideline, protocol or other similar criterion was
      relied upon in making the adverse determination, either the specific rule,
      guideline, protocol or other similar criterion; or a statement that such a
      rule, guideline, protocol or similar criterion was relied upon in making
      the adverse determination and that a copy of such rule, guideline,
      protocol or other criterion will be provided free of charge to the
      Claimant upon request; or

            

    

     

    
      	
              (ii)  

            	
              if
      the adverse benefit determination is based on a medical necessity or
      experimental treatment or similar exclusion or limit, either an
      explanation of the scientific or clinical judgment for the determination,
      applying the terms of this Plan to the Claimant's medical circumstances,
      or a statement that such explanation will be provided free of charge upon
      request.

            

    

     

    (c) Appeal.  If the claim is
denied in whole or in part, the Claimant may appeal such denial by filing a
written request for appeal with the Administrative Committee within 60 days
(180 days in the case of a claim related to the Participant's Disability)
of receiving written notice that the claim has been denied.  Such
written request for appeal should include:

     

    
      	
              (i)  

            	
              a
      statement of the grounds on which the appeal is
  based;

            

    

     

    
      	
              (ii)  

            	
              reference
      to the specific Plan provisions that support the
  claim;

            

    

     

    
      	
              (iii)  

            	
              the
      reason or argument why the Claimant believes the claim should be granted
      and evidence supporting each reason or argument;
  and

            

    

     

    
      	
              (iv)  

            	
              any
      other comments, documents, records or other information relating to the
      claim that the Claimant wishes to
include.

            

    

     

    Appeals
will be considered by the Administrative Committee, which will take 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 by the Vice President of Human Resources in making its initial
determination.  The Administrative Committee will make its decision
with respect to any appeal, and notify the Claimant in writing of such decision,
within 60 days (45 days in the case of a claim related to the
Participant's Disability) after the its receipt of the written request for
appeal; provided that the 60-day period (45-day period in the case of a claim
related to the Participant's Disability) can be extended for up to an additional
60 days (45 days in the case of a claim related to the Participant's
Disability) if the Administrative Committee determines that special
circumstances require an extension of time to process the appeal and the
Claimant is notified of the extension, and the reasons therefor, prior to the
commencement of the extension.  During the appeal period, the Claimant
will be provided, upon request and free of charge, reasonable access to, and
copies of, documents, records and other information relevant to his or her
claim.

     

    In the
event the claim is denied on appeal, the written denial will
include:

     

    
      	
              (i)  

            	
              the
      specific reason or reasons for the
denial;

            

    

     

    
      	
              (ii)  

            	
              reference
      to the specific Plan provisions on which the denial is
    based;

            

    

     

    
      	
              (iii)  

            	
              a
      statement that the Claimant is entitled to receive, upon request and free
      of charge, reasonable access to, and copies of, all documents, records and
      other information relevant to his or her
claim;

            

    

     

    
      	
              (iv)  

            	
              a
      statement of the Claimant's right to bring a civil action under ERISA;
      and

            

    

     

    
      	
              (v)  

            	
              in
      the case of an adverse benefit determination related to the Participant's
      Disability:

            

    

     

    
      	
              (i)  

            	
              if
      an internal rule, guideline, protocol or other similar criterion was
      relied upon in making the adverse determination, either the specific rule,
      guideline, protocol or other similar criterion; or a statement that such a
      rule, guideline, protocol or similar criterion was relied upon in making
      the adverse determination and that a copy of such rule, guideline,
      protocol or other criterion will be provided free of charge to the
      Claimant upon request; or

            

    

     

    
      	
              (ii)  

            	
              if
      the adverse benefit determination is based on a medical necessity or
      experimental treatment or similar exclusion or limit, either an
      explanation of the scientific or clinical judgment for the determination,
      applying the terms of this Plan to the Claimant's medical circumstances,
      or a statement that such explanation will be provided free of charge upon
      request.

            

    

     

    (d) Standard of
Review.  Any further
review, judicial or otherwise, of the Administrative Committee's decision on the
Claimant's claim will be limited to whether, in the particular circumstances,
the Administrative Committee abused its discretion.  In no event will
such further review, judicial or otherwise, be on a de novo basis, because the
Administrative Committee has discretionary authority to determine eligibility
for benefits and to construe and interpret the terms and provisions of this
Plan.

     

    (e) Legal Action.  Compliance with
the foregoing provisions of this Article 14 is a mandatory prerequisite to
a Claimant's right to commence any legal action with respect to any claim for
benefits under this Plan.  If a Claimant wishes to file a court action
after exhausting the foregoing procedures, the Claimant must file such action in
a court of competent jurisdiction within 180 days after the date of the
Committee's written denial of the appeal.  Court actions may not be
commenced after such 180-day period.

     

    5.3 Finality of
Determination.  The determination of the Committee with respect
to any question arising out of or in connection with the administration,
interpretation, and application of the Plan shall be final, binding, and
conclusive on all persons and shall be given the greatest deference permitted by
law.

     

    5.4 Expenses.  The
expenses of administering the Plan shall be borne by the Company.

     

                ARTICLE
VI                                           

     

    FUNDING
OF THE PLAN

     

    All
amounts paid under the Plan shall be paid from the general assets of the
Company.  Benefits shall be reflected on the accounting records of the
Company, but neither the Plan nor the maintenance of such accounting records
shall be construed to affect, require, or prohibit the creation of a trust,
custodial account, or escrow account with respect to the
Participant.  The Participant shall not have any right, title, or
interest whatsoever in or to any investment reserves, accounts, or funds that
the Company may purchase, establish, or accumulate to aid in providing the
unfunded benefit payments described in the Plan.  Nothing contained in
the Plan, and no action taken pursuant to its provisions, shall create, or be
construed to create, a trust or fiduciary relationship of any kind between the
Company, the Board, the Committee or the Company's Executive Plans Committee and
any Participant or any other person.  Participants and Beneficiaries
shall have the status of general unsecured creditors of the
Company.

     

        ARTICLE
VII                                           

     

    AMENDMENT
AND TERMINATION

     

    The Board
or such person or persons, including the Committee, as may be designated by the
Board may amend, modify, or terminate the Plan at any time and in any manner;
provided, however, that no amendment, modification, or termination shall reduce
benefits accrued prior to such action.  In the event of a termination
of the Plan pursuant to this Article VII, no further benefits shall accrue
under the Plan, but amounts which are then payable shall continue to be an
obligation of the Company and shall be paid as scheduled.

     

                ARTICLE
VIII                                           

     

    GENERAL
PROVISIONS

     

    8.1 Withholdings for Taxes and Other
Deductions.  The Company may withhold from any payment of
benefits hereunder any taxes required to be withheld and such sum as the Company
may reasonably estimate to be necessary to cover any taxes which may be assessed
with regard to benefits provided under the Plan.  In addition, the
Company may deduct from any payment of benefits hereunder any amounts owed by
the Participant to the Company or any of its Affiliates, but in no event more
than $5,000 in total per year and as otherwise limited by Code Section 409A and
applicable law.

     

    8.2 Nonalienation.  No
benefit payable at any time under the Plan shall be subject in any manner to
voluntary or involuntary alienation, sale, transfer, assignment, pledge,
attachment, garnishment, or encumbrance of any kind, or subject to or reached by
any legal or equitable process (including execution, garnishment, attachment,
pledge, or bankruptcy) in satisfaction of any debt, liability, or obligation,
prior to receipt.  Any attempt to alienate, sell, transfer, assign,
pledge, or otherwise encumber any such benefit, whether presently or thereafter
payable, shall be void.

     

    8.3 Severability.  In
the event any provision of the Plan shall be held invalid or illegal for any
reason, such illegality or invalidity shall not affect the remaining parts of
the Plan, but the Plan shall be construed and enforced as if the illegal or
invalid provision had never been inserted.

     

    8.4 No Right of
Employment.  The establishment of the Plan shall not be
construed as conferring any legal or other rights upon a Participant for a
continuation of employment, nor shall it interfere with the rights of the
Company and its Affiliates to discharge the Participant or otherwise act with
relation to the Participant.  The Company and its Affiliates may take
any action (including discharge) with respect to the Participant and may treat
such person without regard to the effect that such action or treatment might
have on such person as the Participant under the Plan.

     

    8.5 Incompetency.  Every
person receiving or claiming benefits under the Plan shall be conclusively
presumed to be mentally competent until the date on which the Committee receives
a written notice, in a form and manner acceptable to the Committee, that such
person is incompetent, and that a guardian, conservator, or other person legally
vested with the care of such person's person or estate has been appointed;
provided, however, that if the Committee shall find that any person to whom a
benefit is payable under the Plan is unable to care for such person's affairs
because of incompetency, any payment due (unless a prior claim therefor shall
have been made by a duly appointed legal representative) may be paid to a third
party as the Committee deems appropriate.  Any such payment so made
shall be a complete discharge of liability therefor under the Plan.

     

    8.6 Successors and
Assigns.  The Plan shall be binding on and inure to the benefit
of the Company and its Affiliates, successors and assigns, and the Participant
and his or her heirs, executors, administrators and legal
representatives.

     

    8.7 General Limitation of
Liability.  None of the Company, the Board, the Committee or
any other person will be liable, either jointly or severally, for any act or
failure to act or for anything whatsoever in connection with the Plan, or the
administration thereof, except to the extent of any liability imposed because of
gross negligence or willful misconduct.  All benefit payments will be
made solely from the general assets of the Company.

     

    8.8 No Guaranty of Tax Consequences.
None of the Company, the Board, the Committee or any other person
guaranties that any particular federal or state income, payroll or other tax
consequence will occur because of participation in the Plan.  A
Participant should consult with professional tax advisors regarding all
questions relative to the tax consequences arising from participation in the
Plan.

     

    8.9 Governing Law.  The
Plan shall be governed and construed in accordance with the laws of the State of
Washington to the extent not preempted by federal law.

     

    8.10 Compliance with Code Section
409A.  The Plan is intended to comply with the requirements of
Code Section 409A (including current IRS guidance) and to conform to the current
operation of the Plan.  Notwithstanding any provision to the contrary,
the Plan shall be interpreted, operated and administered in a manner consistent
with this intention, so as to avoid the predistribution inclusion in income of
amounts deferred under the Plan and the imposition of any additional tax or
interest thereon.  In addition, the Plan shall be deemed to be
amended, and any deferrals and distributions hereunder shall be deemed to be
modified, to the extent permitted by and necessary to comply with Code Section
409A and to avoid or mitigate the imposition of additional taxes under Code
Section 409A.  Notwithstanding the foregoing, no provision of the Plan
shall be interpreted or construed to transfer any liability for failure to
comply with Code Section 409A from a Participant or any other individual to
the Company or any of its affiliates, employees or agents.

     

    [Signature
appears on following page.]

     

    

     

    IN
WITNESS WHEREOF, the Company has signed this Plan document as of the date
indicated below.

     

    PUGET
SOUND ENERGY, INC.

     

    

     

    By: /s/ Jennifer L.
O’Connor

     

    Title:
Senior Vice President, General Counsel, Corporate Secretary, and Chief Ethics
& Compliance Officer

     

    Dated: December
19, 2008

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00154-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00154-of-00352.parquet"}]]