Exhibit 10-A
GPU SYSTEM COMPANIES
DEFERRED COMPENSATION PLAN
(as amended through August 1, 1996)
TABLE OF CONTENTS
Purpose 1
Definition of Terms 1
Administration 7
Deferral Election 8
Supplemental Savings Plan Benefits 11
Interest 12
Distribution of Deferred Funds 13
Non-Assignment of Deferred Compensation 17
Termination of Participation or Employment 17
Transfer of Employment 18
1. Purpose
This document sets forth the GPU System Companies Deferred
Compensation Plan, as amended and restated, effective
August 1, 1996.
The Plan provides Elected Officers of each Company, as
defined herein, with an opportunity to defer part or all of
their Compensation, pursuant to their elections made in
accordance with the provisions hereof. The Plan also
provides Elected Officers and Other Eligible Employees with
an opportunity to be credited with additional deferred
amounts that are intended to approximate the Company
Matching Contributions that otherwise might have been made
on their behalf to the GPU, Inc. and Subsidiary System
Companies Employee Savings Plan for Nonbargaining Employees
(the "Savings Plan") but for the limitation on the amount of
compensation that can be taken into account under the
Savings Plan pursuant to section 401(a)(17) of the Internal
Revenue Code of 1986, as amended (the "Compensation Limit").
The Plan is intended to constitute an unfunded plan of
deferred compensation for "a select group of management or
highly compensated employees" within the meaning of Sections
201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
Each Company has adopted this Plan as its own Plan.
Accordingly, each Company shall be obligated hereunder only
with respect to amounts distributable from the Accounts it
maintains for Participants who are its own employees; and the
right to receive any amount distributable hereunder with
respect to any Participant shall be enforceable only against
the Company with which such Participant is or was last
employed.
2. Definition of Terms
2.1 Account - refers, as the context may require, to the
Retirement Account, or the Pre-Retirement Account or
Accounts, or to the Retirement Account and all Pre-
Retirement Accounts, established for a Participant
hereunder.
2.2 Board - refers to the Board of Directors of a Company.
2.3 Chairman - refers to the Chairman of the Board or the
Chairman, as appropriate for each Company that has
adopted the Plan.
2.4 Change in Control - A "Change in Control" shall mean the
occurrence during the term of the Plan of:
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(1) An acquisition (other than directly from GPU, Inc.
(the "Corporation") of any common stock of the
Corporation ("Common Stock") or other voting securities
of the Corporation entitled to vote generally for the
election of directors (the "Voting Securities") by any
"Person" (as the term person is used for purposes of
Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")), immediately
after which such Person has "Beneficial Ownership"
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of twenty percent (20%) or more of the
then outstanding shares of Common Stock or the combined
voting power of the Corporation's then outstanding
Voting Securities; provided, however, in determining
whether a Change in Control has occurred, Voting
Securities which are acquired in a "Non-Control
Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in
Control. A "Non-Control Acquisition" shall mean an
acquisition by (A) an employee benefit plan (or a trust
forming a part thereof) maintained by (i) the
Corporation or (ii) any corporation or other Person of
which a majority of its voting power or its voting
equity securities or equity interest is owned, directly
or indirectly, by the Corporation (for purposes of this
definition, a "Subsidiary"), (B) the Corporation or its
Subsidiaries, or (C) any Person in connection with a
"Non-Control Transaction" (as hereinafter defined);
(2) The individuals who, as of August 1, 1996, are
members of the board of directors of the Corporation
(the "Incumbent Board"), cease for any reason to
constitute at least seventy percent (70%) of the members
of the board of directors of the Corporation; provided,
however, that if the election, or nomination for
election by the Corporation's shareholders, of any new
director was approved by a vote of at least two-thirds
of the Incumbent Board, such new director shall, for
purposes of this Plan, be considered as a member of the
Incumbent Board; provided further, however, that no
individual shall be considered a member of the Incumbent
Board if such individual initially assumed office as a
result of either an actual or threatened "Election
Contest" (as described in Rule 14a-11 promulgated under
the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the board of directors of the
Corporation (a "Proxy Contest") including by reason of
any agreement intended to avoid or settle any Election
Contest or Proxy Contest; or
(3) The consummation of:
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(A) A merger, consolidation or reorganization
involving the Corporation, unless such merger,
consolidation or reorganization is a "Non-Control
Transaction." A "Non-Control Transaction" shall mean a
merger, consolidation or reorganization of the
Corporation where:
(i) the shareholders of the Corporation,
immediately before such merger, consolidation or
reorganization, own directly or indirectly immediately
following such merger, consolidation or reorganization,
at least sixty percent (60%) of the combined voting
power of the outstanding voting securities of the
corporation resulting from such merger or consolidation
or reorganization (the "Surviving Corporation") in
substantially the same proportion as their ownership of
the Voting Securities immediately before such merger,
consolidation or reorganization,
(ii) the individuals who were members of
the Incumbent Board immediately prior to the execution
of the agreement providing for such merger,
consolidation or reorganization constitute at least
seventy percent (70%) of the members of the board of
directors of the Surviving Corporation, or a
corporation, directly or indirectly, beneficially owning
a majority of the Voting Securities of the Surviving
Corporation, and
(iii) no Person other than (w) the
Corporation, (x) any Subsidiary, (y) any employee
benefit plan (or any trust forming a part thereof) that,
immediately prior to such merger, consolidation or
reorganization, was maintained by the Corporation or any
Subsidiary, or (z) any Person who, immediately prior to
such merger, consolidation or reorganization had
Beneficial Ownership of twenty percent (20%) or more of
the then outstanding Voting Securities or common stock
of the Corporation, has Beneficial Ownership of twenty
percent (20%) or more of the combined voting power of
the Surviving Corporation's then outstanding voting
securities or its common stock.
(B) A complete liquidation or dissolution of the
Corporation; or
(C) The sale or other disposition of all or
substantially all of the assets of the Corporation to
any Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall
not be deemed to occur solely because any Person (the
"Subject Person") acquired Beneficial Ownership of more
than the permitted amount of the then outstanding Common
Stock or Voting Securities as a result of the
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acquisition of Common Stock or Voting Securities by the
Corporation which, by reducing the number of shares of
Common Stock or Voting Securities then outstanding,
increases the proportional number of shares Beneficially
Owned by the Subject Persons, provided that if a Change
in Control would occur (but for the operation of this
sentence) as a result of the acquisition of shares of
Common Stock or Voting Securities by the Corporation,
and after such share acquisition by the Corporation, the
Subject Person becomes the Beneficial Owner of any
additional shares of Common Stock or Voting Securities
which increases the percentage of the then outstanding
shares of Common Stock or Voting Securities Beneficially
Owned by the Subject Person, then a Change in Control
shall occur.
2.5 Committee - refers to the Personnel, Compensation and
Nominating Committee of the Board of Directors of GPU,
Inc.
2.6 Company - refers, as the context may require, singularly
and not jointly, to any Company, a majority of the
outstanding common stock of which is owned, directly or
indirectly, by GPU, Inc., that has adopted the Plan.
When used in reference to a Participant, the term
"Company" shall mean the Company with which such
Participant is or was last employed unless the context
otherwise requires.
2.7 Compensation - refers to all amounts which, but for an
election hereunder, would be paid in cash during a Plan
Year to a Participant for services performed on behalf
of the Company, but does not include reimbursement for
travel or other expenses, Company contributions to
retirement programs or other employee benefit plans,
payments under the Company's Short-Term or Long-Term
Disability Income Plans, any amounts distributed to the
Elected Officer from any Pre-Retirement Account. A
Participant's Compensation for any Plan Year includes
any Performance Award that becomes payable to the
Participant during such year, but does not include any
other amounts that are paid or that become payable to
the Participant under the 1990 Stock Plan for Employees
of GPU, Inc. and Subsidiaries (the "Stock Plan"). A
Participant's Compensation for any Plan Year beginning
on or after April 1, 1991, shall not include any
severance payments made to the Participant in connection
with his or her termination of employment.
2.8 Disability - refers to entitlement to benefits under the
Company's Long-Term Disability Income Plan or Employee
Pension Plan as a result of a disability which, in the
opinion of the Board, is considered to be a permanent
disability.
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2.9 Elected Officer - refers to an individual who, pursuant
to election by the Board, is serving as an officer of
the Company other than as an Assistant Controller, an
Assistant Secretary, or an Assistant Treasurer;
provided, however, that the Board of any Company may
limit participation in the Plan to such of that
Company's elected officers as the Board may designate,
and in such case, the term "Elected Officer" shall refer
only to any elected officer of such Company so
designated by the Board.
2.10 "Excess Compensation" - refers, in the case of any
Participant for any month beginning on or after
January 1, 1995, to the amount by which (i) the
aggregate amount of the Participant's Regular
Compensation and Incentive Compensation for such month
and for all prior months within the Plan Year of the
Savings Plan ("ESP Plan Year" ) that includes such month
exceeds the sum of (ii) the Compensation Limit in effect
for such ESP Plan Year and (iii) the aggregate amount of
the Participant's "Excess Compensation" (as determined
under clause (i) and (ii) hereof) for all prior months
within such Plan Year.
2.11 Incentive Compensation - refers to the portion of a
Participant's Compensation for a Plan Year that consists
of amounts awarded to the Participant during such year
under the Company's Incentive Compensation Plan for
Elected Officers, Employee Incentive Compensation Plan,
or Annual Performance Award Plan.
2.12 Other Eligible Employee - refers, with respect to any
Plan Year, to any employee of a Company who is not an
Elected Officer of such Company but who is expected to
have "Excess Compensation" for any one or more months
during such Plan Year and who has been designated by the
Chairman of such Company as eligible to make a deferral
election for such Plan Year under Section 4.3.
2.13 Participant - refers to any Elected Officer or Other
Eligible Employee who has made a deferral election for
any Plan Year under Section 4.1 or 4.3. For all
purposes of the Plan other than for purposes of
continuing entitlement to make deferral elections under
Section 4.1 or 4.3, an Elected Officer who at any time
ceases to be such, or a Participant whose employment is
terminated or whose participation in the Plan is
terminated pursuant to Section 9, shall, notwithstanding
such cessation or termination, continue to be treated as
a "Participant" until all amounts credited to his or her
Accounts under the Plan have been distributed pursuant
to Section 7, or transferred pursuant to Section 10.1.
2.14 Performance Award - refers to the portion of a
Participant's Compensation for a Plan Year that consists
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of any Performance Cash Incentive Award that becomes
payable to the Elected Officer during such year under
the Stock Plan. For this purpose, a Performance Award
shall be treated as becoming payable to a Participant on
the "Vesting Date" for the restricted shares or
restricted units with respect to which the Performance
Award becomes payable; and the "Vesting Date" shall mean
the date on which such restricted shares or restricted
units become vested under the terms of the written
agreement between the Elected Officer and GPU, Inc.
evidencing the award of such shares or units to the
Elected Officer.
2.15 Plan - refers to the GPU System Companies Deferred
Compensation Plan as set forth in this document and as
it may be amended in the future.
2.16 Plan Year - refers to each 12-month period from April 1
through March 31. In the case of any Company that
adopts the Plan as of a date after the start of a Plan
Year, as so defined, the initial "Plan Year," with
respect to such Company's Elected Officers and Other
Eligible Employees, shall be the period commencing on
the date as of which the Plan is so adopted and ending
on the next following March 31.
2.17 Pre-Retirement Account - refers to the memorandum
account which shall be established and maintained for a
Participant who elects, pursuant to Section 4.5, to have
payment of any portion of his or her Compensation for
any Plan Year deferred to a date which is expected to
occur prior to his or her Retirement or Disability. A
separate Pre-Retirement Account shall be established and
maintained for the Compensation for each Plan Year which
the Participant so elects to defer.
2.18 Regular Compensation - refers to a Participant's
Compensation for a Plan Year, exclusive of any Incentive
Compensation awarded to the Participant during such Plan
Year, and exclusive of any Performance Award that
becomes payable to the Participant during such Plan
Year.
2.19 Retirement - refers to termination of service with the
Company on account of retirement under the Company's
Employee Pension Plan, resignation, death or any other
reason other than employment by any other Company. A
Participant will not be deemed to have retired until he
or she ceases to be employed with any Company.
2.20 Retirement Account - refers to the memorandum account
which shall be established and maintained for a
Participant who elects, pursuant to Section 4.5, to have
payment of any portion of his or her Compensation for
any Plan Year deferred to a date after his or her
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Retirement or Disability. The term Retirement Account
shall also refer to the memorandum account that shall be
established and maintained for a Participant pursuant to
Section 5.3.
3. Administration
3.1 Subject to the concurrence of the Committee, the Company
may modify the provisions of the Plan from time-to-time,
or, may terminate the entire Plan at any time; provided,
however, that Section 2.4, this Section 3.1, Section
3.4, Paragraph (d) of Section 6 and the last paragraph
of Section 7.2 may not be amended or modified, and the
Plan may not be terminated, (i) at the request of a
third party who has indicated an intention or taken
steps to effect a Change in Control and who effectuates
a Change in Control, (ii) within six (6) months prior
to, or otherwise in connection with, or in anticipation
of, a Change in Control which has been threatened or
proposed and which actually occurs, or (iii) following a
Change in Control, if the amendment, modification or
termination adversely affects the rights of any
Participant under the Plan. Action to amend the Plan
may be taken by the Company either by resolution duly
adopted by the Company's Board, or by an instrument in
writing executed by an officer of the Company to whom
authority to adopt or approve amendments to the Plan has
been delegated pursuant to a resolution duly adopted by
the Company's Board. No modification or termination of
the Plan shall adversely affect the rights of any
Participant with respect to any amounts standing to the
Participant's credit in any Account immediately prior to
the date of the adoption of such modification or
termination, including without limitation any rights
with respect to the time and method of payment of, or
the crediting of interest equivalents with respect to,
any such amounts.
3.2 Responsibility for the ongoing administration of this
Plan rests with the Board.
3.3 The Board may delegate the day-to-day administration of
this Plan, including the maintenance of appropriate
records, receiving notifications, making filings, and
maintaining related documentation, to the officer or
other employee of the Company in charge of the Company's
Human Resources division or function, and to his or her
staff.
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3.4 The Board shall have exclusive authority to resolve all
questions concerning the Plan, including any dispute
over accounting or administrative procedures or
interpretation of the Plan.
Notwithstanding the foregoing, any determination made by
the Board after the occurrence of a Change in Control
that denies in whole or in part any claim made by any
individual for benefits under the Plan shall be subject
to judicial review, under a "de novo", rather than a
deferential, standard.
3.5 A Participant's election to defer Compensation,
selection of a distribution commencement date and
distribution option, or designation of a beneficiary and
contingent beneficiary, made pursuant to this Plan,
shall be made in writing, on a form furnished to the
Participant for such purpose by the officer or other
employee of the Company in charge of the Company's Human
Resources division or function. The form shall be
signed by the Participant and delivered personally or by
first class mail to:
Vice President-Human Resources
GPU Service, Inc.
100 lnterpace Parkway
Parsippany, New Jersey 07054
Any such election, selection, designation, or any change
therein, shall not become effective unless and until
received by the Vice President-Human Resources.
Except as provided in Section 7.2 or Section 7.4, a
change in the selection of a distribution commencement
date or distribution option shall not be effective
unless made at least twenty-four (24) months prior to
the Participant's Retirement or Disability.
4. Deferral Election
4.1 For each Plan Year beginning on and after April 1, 1991,
an Elected Officer may elect, separately, to defer (a)
any part or all of his or her Regular Compensation for
such year, (b) any part or all of his or her Incentive
Compensation for such year, and/or (c) any part or all
of any Performance Award that becomes payable to the
Elected Officer during such year; subject, however, in
each case to the limitations set forth in Section 4.4.
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4.2 An election to defer Regular Compensation for any Plan
Year beginning on and after April 1, 1991, shall be made
on or prior to October 31 of the year preceding such
Plan Year. An election to defer Incentive Compensation
for any Plan Year beginning on or after April 1, 1991,
shall be made on or prior to October 31 of such Plan
Year. Notwithstanding the foregoing, (a) Elected
Officers who are initially elected prior to November 1st
of any Plan Year may, within 30 days of such initial
election, or, if later, the date the Elected Officer's
Regular Compensation is fixed by the Board, make a
deferral election for his or her Regular Compensation
for the then current Plan Year, and (b) Elected Officers
who are initially elected after November 1st of any Plan
Year may, within 30 days of such initial election, or,
if later, the date the Elected Officer's Regular
Compensation is fixed by the Board, make a deferral
election for both his or her Regular Compensation and
Incentive Compensation (if any) for the then current
Plan Year, as well as for his or her Regular
Compensation for the immediately succeeding Plan Year;
provided, however, that any deferral election made
pursuant to clause (a) or (b) hereof shall be effective
only with respect to Compensation earned after such
deferral election has become effective. An election to
defer any part of a Performance Award shall be made at
least one year prior to the Vesting Date for the
restricted shares or restricted units with respect to
which such Performance Award is payable. All deferral
elections made under Section 4.1 or 4.3 shall be
irrevocable.
4.3 For each Plan Year beginning on or after April 1, 1996,
any Other Eligible Employee may elect to defer any part
or all of any "Excess Compensation" that may become
payable to such Other Eligible Employee for any month
during such Plan Year, subject to the limitations set
forth in Section 4.4. Such election shall be made on or
prior to October 31 of the year preceding such Plan
Year.
4.4 Deferral elections otherwise permitted to be made under
the Plan for Plan Years beginning on or after April 1,
1995 shall be subject to the following limitations:
(a) No amount may be deferred pursuant to a
Participant's election under this Plan for a period
of 12 months following the Participant's receipt of
a hardship withdrawal under Section 7.2(e) of the
Savings Plan.
(b) No Incentive Compensation for a Plan Year may
be deferred pursuant to a Participant's election
hereunder if the Participant's Retirement or
Disability occurs after the date on which he or she
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made such election but prior to the first day of
the calendar year next following the date on which
the Participant made the election for such Plan
Year.
(c) No portion of a Participant's Compensation for
a Plan Year may be deferred pursuant to the
Participant's election hereunder to the extent such
portion is required to be applied to payment of any
tax or other obligation of the Participant.
4.5 In any election to defer Regular Compensation or
Incentive Compensation for any Plan Year, in any
election to defer any Performance Award that becomes
payable during a Plan Year, and in any election by any
Other Eligible Employee to defer any Excess Compensation
for any Plan Year, the Participant shall specify the
amount or portion of such Compensation to be deferred,
and shall indicate whether the Compensation so deferred
is to be credited to a Pre-Retirement Account, or to a
Retirement Account. If an Elected Officer elects to
defer Incentive Compensation for any Plan Year to a Pre-
Retirement Account, the Compensation so deferred shall
be credited to the Elected Officer's Pre-Retirement
Account for the Plan Year next following the Plan Year
in which such Incentive Compensation is awarded to the
Elected Officer.
4.6 With respect to Compensation deferred hereunder for a
Plan Year which a Participant elects to have credited to
his or her Pre-Retirement Account, he or she shall
specify in his or her election form the date on which
distribution of such account shall be made or commence.
The date so selected shall be no earlier than January 15
of the third calendar year beginning after the close of
such Plan Year, and may be the January 15 of any
subsequent calendar year. Notwithstanding the
foregoing, a Participant may elect to have distribution
of any Pre-Retirement Account made or commence on the
earlier of any date selected by the Participant in
accordance with the preceding sentence, or January 15 of
the calendar year following the Participant's Retirement
or Disability. In his or her election form for the Plan
Year, the Participant shall also select an option under
Section 7.2 for the distribution of the Pre-Retirement
Account. Except as provided in Section 7.2 or Section
7.4, the date so specified, and the option so selected,
may not thereafter be changed by the Participant.
4.7 With respect to any Compensation deferred hereunder
which a Participant elects to have credited to his or
her Retirement Account, he or she shall, at the time he
or she first elects to have an amount credited to such
account, also elect a distribution commencement date and
a distribution option under Section 7.2 for the
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distribution of such account. A Participant may,
subject to the provisions of Section 3.5, change any
election as to the distribution commencement date and
distribution option for the Retirement Account
previously made by him or her. The distribution
commencement date so elected shall be either January 15
of the calendar year following the Participant's
Retirement or Disability, or January 15 of any
subsequent calendar year.
5. Supplemental Savings Plan Benefits
5.1 Beginning on or after April 1, 1992, for each month for
which an Elected Officer has Excess Compensation, and
beginning on or after April 1, 1996, for each month for
which any Other Eligible Employee has Excess
Compensation, there shall be credited to such
Participant's Retirement Account an amount determined by
multiplying the Participant's Excess Compensation for
such month by his or her Matching Percentage for such
month.
5.2 For purposes of Section 5.1, the following definitions
and rules shall apply beginning on or after January 1,
1995:
(a) In determining the amount of a Participant's
"Excess Compensation" for any month, only the
Participant's Regular Compensation for those months
during which he or she is eligible to participate
in the Savings Plan shall be taken into account.
(b) A Participant's Regular Compensation for any
month shall include the total amount of Regular
Compensation that would have been paid to the
Participant in such month but for any deferral
election made by the Participant hereunder. A
Participant's Incentive Compensation for any month
shall include the total amount of Incentive
Compensation awarded to the Participant during such
month whether or not paid to the Participant in
such month.
(c) A Participant's "Matching Percentage" for any
month shall mean the percentage, not in excess of
4%, determined by dividing the aggregate amount of
the Participant's Regular Compensation and
Incentive Compensation for such month, and for all
prior months within the ESP Plan Year that includes
such month, that is deferred pursuant to elections
made by the Participant hereunder, by (ii) the
aggregate amount of the Participant's Excess
Compensation for such month and for all prior
months within the ESP Plan Year that includes such
month.
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5.3 If, on the first date as of which an amount is to be
credited to a Participant's Retirement Account under
Section 5.1, a Retirement Account had not previously
been established for such Participant pursuant to
Section 4.5, a Retirement Account shall be established
for such Participant as of such date. By no later than
30 days after such date, such Participant shall elect a
distribution commencement date and a distribution option
for his Retirement Account, and may thereafter change
any such election, in accordance with the provisions set
forth in Section 4.7.
6. Interest
Interest equivalents will be calculated and credited to
Accounts at the end of each quarter in the calendar year.
Such interest equivalents shall be determined in accordance
with the following rules:
(a) The amount of Regular Compensation deferred each month
pursuant to an Elected Officer's election hereunder, the
amount of Excess Compensation for any month that is
deferred pursuant to any Other Eligible Employee's
election hereunder, and any amount credited to a
Participant's Retirement Account for any month under
Section 5.1, shall be treated as having been credited to
the Participant's Account in two equal installments
during such month, one at mid-month, and the other at
month's end; and interest equivalents thereon shall be
compounded monthly on each quarter's beginning balance
with proportionate monthly compounding for any amounts
so deferred or credited during any calendar quarter.
(b) The amount of Incentive Compensation deferred pursuant
to an Elected Officer's election hereunder shall be
treated as having been credited to the Elected Officer's
Account as of the 15th day, or the last day of the month
(whichever is earlier), following the date on which such
amount would have been paid to the Elected Officer in
the absence of such election, and interest equivalents
thereon shall be compounded monthly.
(c) Any part of a Performance Award deferred pursuant to an
Elected Officer's election hereunder shall be treated as
having been credited to the Elected Officer's Account as
of the 15th day, or the last day of the month (whichever
is earlier), following the Vesting Date for the
restricted shares or restricted units with respect to
which such Performance Award became payable.
(d) The rate used in calculation of interest equivalents
will be the rate equal to the simple average of Citibank
N.A. of New York Prime Rates for the last business day
of each of the three months in the calendar quarter or,
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if greater, such other rate as established from time to
time by the Committee.
Interest equivalents will be credited to the balance of each
Account maintained for a Participant hereunder, including the
undistributed balance of any such Account from which payments
are being made in installments. However, if a Participant
elects Option (c) under Section 7.2 below, no interest
equivalents will be credited to the Participant's Account for
any period after the date on which distribution under such
Option is to commence.
7. Distribution of Deferred Funds
7.1 Subject to Section 7.4, a Participant's Pre-Retirement
Accounts shall be distributed to him or her, or
distributions from such Pre-Retirement Accounts shall
commence, on the date or dates specified in the
elections made by the Participant with respect to such
accounts. Subject to Section 7.4, a Participant's
Retirement Account shall be distributed to him or her,
or distributions from such Retirement Account shall
commence, on the date specified in the Participant's
latest effective election.
7.2 The options for distribution are:
(a) A single lump sum payment.
(b) Annual installments over any fixed number of
years selected by the Participant, with a minimum
of five annual installments required for the
Retirement Account.
(c) With the prior consent of the Committee and
subject to such terms and conditions as it may
require, a lifetime annuity payable in annual or
more frequent installments, the amount of which
shall be determined by reference to mortality
tables and interest and dividend rates applicable
under individual whole life insurance policies
being issued at the time of the Committee's
approval by such life insurance companies as the
Committee may designate.
(d) Any other form of distribution, in equal or
unequal payments, as specifically approved by the
Committee.
If distribution of any of a Participant's Accounts is to
be made in annual installments under Option (b) of this
Section 7.2, the amount of each installment will equal
the total amount in said Account on the date the
installment is payable, divided by the number of
installments remaining to be paid. In addition, if the
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distributions are made in installments under Option (b)
of this Section 7.2, the interest equivalent accrued on
each Account each year after the date the first
installment is payable will be distributed on each
anniversary of such date.
Notwithstanding any other provision of the Plan to the
contrary or any other optional form of distribution
otherwise elected, each Participant shall be permitted
to make a special distribution election to have the
entire balance of each of his or her Accounts
distributed in the form of a single lump sum payment in
the event of the Participant's termination of employment
(1) by the Company (A) within six (6) months prior to a
Change in Control or (B) prior to a Change in Control
but which the Participant reasonably demonstrates (i)
was at the request of a third party who has indicated an
intention or taken steps reasonably calculated to effect
a Change in Control or (ii) otherwise arose in
connection with, or in anticipation of, a Change in
Control which has been threatened or proposed and which
actually occurs, or (2) for any reason within the two
(2) year period following a Change in Control; provided,
however, that such election shall be effective only if
it is made either (x) at least twenty-four (24) months
prior to such termination of Participant's employment,
or (y) if such termination of employment constitutes an
"Involuntary Termination" as defined below, at least one
year prior to such Change in Control. Any special
election made hereunder may be revoked, and a new
special election may be made at any time; provided,
however, that any such revocation or new election shall
be effective only if it is made within the election
period specified in clause (x) or (y) of the preceding
sentence. Any special election, or revocation of a
special election, that may be made hereunder shall be
made in the manner set forth in Section 3.5
For purposes of this Section 7.2, an "Involuntary
Termination" shall mean the termination of a
Participant's employment (A) as a result of the
Participant's death, (B) by the Company, for any reason,
or (C) by the Participant for "Good Reason" as defined
below.
For purposes of this Section 7.2, "Good Reason" shall
mean the occurrence after a Change in Control of any of
the following events or conditions:
(A) a change in the Participant's status, title,
position or responsibilities (including reporting
responsibilities) which, in the Participant's
reasonable judgment, represents an adverse change
from his or her status, title, position or
responsibilities as in effect immediately prior
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thereto; the assignment to the Participant of any
duties or responsibilities which, in the
Participant's reasonable judgment, are inconsistent
with his or her status, title, position or
responsibilities; or any removal of the Participant
from or failure to reappoint or reelect him or her
to any of such offices or positions, other than in
connection with the termination of his or her
employment for disability, for cause, or by the
Participant other than for Good Reason;
(B) a reduction in the Participant's annual base
salary below the rate of the Participant's annual
base salary in effect as of the date of the Change
in Control or, if greater, at any time thereafter,
determined without regard to any salary reduction
or deferred compensation elections made by the
Participant;
(C) the relocation of the offices of the Company
at which the Participant is principally employed to
a location more than twenty-five (25) miles from
the location of such offices immediately prior to
the Change in Control, or the Company's requiring
the Participant to be based anywhere other than
such offices, except to the extent the Participant
was not previously assigned to a principal location
and except for required travel on the Company's
business to an extent substantially consistent with
the Participant's business travel obligations at
the time of the Change in Control;
(D) the failure by the Company to pay to the
Participant any amount of the Participant's current
compensation, or any amount payable under this
Plan, within seven (7) days of the date on which
payment of such amount is due; or
(E) the failure by the Company to (1) continue in
effect (without reduction in benefit level, and/or
reward opportunities) any material compensation or
employee benefit plan in which the Participant was
participating immediately prior to the Change in
Control unless a substitute or replacement plan has
been implemented which provides substantially
identical compensation or benefits to the
Participant or (2) provide the Participant with
compensation and benefits, in the aggregate, at
least equal (in terms of benefit levels and/or
reward opportunities) to those provided for under
all other compensation or employee benefit plans,
programs and practices in which the Participant was
participating immediately prior to the Change in
Control.
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Any event or condition described in subparagraph (A)
through (E) above which occurs (1) within six (6) months
prior to a Change in Control or (2) prior to a Change in
Control but which (x) was at the request of a third
party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control and
who effectuates a Change in Control, or (y) otherwise
arose in connection with, or in anticipation of, a
Change in Control which has been threatened or proposed
and which actually occurs, shall constitute Good Reason
for purposes of this Section 7.2 notwithstanding that it
occurred prior to a Change in Control.
7.3 Except as the Board may otherwise determine based on the
circumstances at the time the distribution to the
beneficiary is to commence:
(a) If a Participant should die after distribution
of any Account maintained for him or her hereunder
has commenced, but before the entire balance of
such Account has been fully distributed,
distributions will continue to be made from such
Account to the Participant's designated beneficiary
or contingent beneficiary, in accordance with the
distribution option in effect for such Account at
the time of the Participant's death.
(b) If a Participant should die before any
distribution from an Account maintained for him or
her hereunder has been made to him or her,
distribution of such Account to the Participant's
designated beneficiary or contingent beneficiary
shall be made, or shall commence, as soon as
practicable after the Participant's death, in
accordance with the distribution option in effect
for such Account at the time of the Participant's
death.
Any amounts remaining to be paid to a Participant's
designated beneficiary at the time of the designated
beneficiary's death shall be paid to the Participant's
contingent beneficiary or, if such contingent
beneficiary has predeceased the Participant's designated
beneficiary, to the estate of the designated
beneficiary. Any amounts remaining to be paid to a
Participant's contingent beneficiary at the time of such
contingent beneficiary's death shall be paid to the
estate of the contingent beneficiary. If the
Participant's designated beneficiary and contingent
beneficiary have both predeceased the Participant, any
amounts remaining to be paid to the Participant at the
time of his or her death shall be paid to the
Participant's estate.
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7.4 Notwithstanding anything herein to the contrary, any
Account maintained for a Participant hereunder may be
distributed, in whole or in part, to such Participant on
any date earlier than the date on which distribution
from such Account is to be made or commence pursuant to
the Participant's election with respect to such Account,
if (a) the Participant requests such early distribution,
and (b) the Board, in its sole discretion, determines
that such early distribution is necessary to help the
Participant meet some severe financial need arising from
circumstances which were beyond the Participant's
control and which were not foreseen by him or her at the
time he or she made his or her election as to the date
or dates for distribution from such Account. A request
by a Participant for an early distribution shall be made
in writing, shall set forth sufficient information as to
the Participant's need for such distribution to enable
the Board to take action on his or her request, and
shall be mailed or delivered to the Company's Corporate
Secretary.
7.5 The Company may, but shall not be required to, purchase
a life insurance policy, or policies, to assist in
funding any of its payment obligations under the Plan.
If any policy is so purchased, it shall, at all times,
remain the exclusive property of the Company and subject
to the claims of its creditors. Neither the Participant
nor any beneficiary or contingent beneficiary designated
by him or her shall have any interest in, or rights with
respect to, such policy.
7.6 A Participant shall have the status of a mere unsecured
creditor of the Company with respect to his or her right
to receive any payment under the Plan. The Plan shall
constitute a mere promise by the Company to make
payments in the future of the benefits provided for
herein. It is intended that the arrangements reflected
in this Plan be treated as unfunded for tax purposes and
for purposes of Title I of ERISA.
8. Non-Assignment of Deferred Compensation
A Participant's rights to payments under this Plan shall not
be subject in any manner to anticipation, alienation, sale,
transfer (other than transfer by will or by the laws of
descent and distribution, in the absence of a beneficiary
designation), assignment, pledge, encumbrance, attachment or
garnishment by creditors of the Participant or his or her
spouse or other beneficiary.
9. Termination of Participation or Employment
A Participant's participation in the Plan may be terminated
by the Board at any time. No promise or representation,
either express or implied, is made with respect to continued
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employment, transfer or promotion because of participation in
the Plan, and the employment of a Participant may be
terminated at any time.
10. Transfer of Employment
10.1 If a Participant transfers employment to any other
Company that maintains this Plan for such Company's
Elected Officers and Other Eligible Employees and the
Participant is or becomes an Elected Officer or Other
Eligible Employee of such other Company, the balance to
the Participant's credit in each Account maintained for
the Participant under this Plan shall be transferred to
the comparable account established for the Participant
under the Plan maintained by such other Company,
effective as of the date on which the Participant's
employment is so transferred or, if later, the date on
which the Participant first becomes an Elected Officer
or Other Eligible Employee of such other Company. Upon
the transfer of the Participant's Account balances, the
Company making the transfer shall have no further
obligation to the Participant or his or her designated
beneficiaries with respect to payment of the Account
balances so transferred.
10.2 If an Elected Officer or Other Eligible Employee of any
other Company that maintains this Plan for its Elected
Officers or Other Eligible Employee transfers employment
to the Company and is or becomes an Elected Officer or
Other Eligible Employee of the Company, as of the date
on which such Elected Officer's or Other Eligible
Employee's employment is so transferred or, if later,
the date on which such Elected Officer or Other Eligible
Employee first becomes an Elected Officer or Other
Eligible Employee of the Company, there shall be
established for the Elected Officer or Other Eligible
Employee under this Plan an Account or Accounts
comparable to each account maintained for such Elected
Officer or Other Eligible Employee under such other
Company's Plan, and there shall be transferred to each
Account so established an amount equal to the balance to
such Elected Officer's or Other Eligible Employee's
credit in the comparable account maintained for the
Elected Officer or Other Eligible Employee under such
other Company's Plan.
In addition, on and after the date on which an Elected
Officer's or Other Eligible Employee's Account balances
are so transferred, any election to defer Compensation,
any election as to the date of commencement or form of
distribution of Account balances, and any designation of
a beneficiary, made by the Participant under such other
Company's Plan shall be treated as having been made
under this Plan.
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