EXHIBIT EX-10.20
TRANSAMERICA CORPORATION
DEFERRED COMPENSATION PLAN
(Effective January 1, 1995)
TABLE OF CONTENTS
Page
SECTION 1
DEFINITIONS
1.1 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 "Beneficiary" . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 "Board of Directors" . . . . . . . . . . . . . . . . . . . 1
1.4 "Change of Control" . . . . . . . . . . . . . . . . . . . . 1
1.5 "Committee" . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 "Compensation" . . . . . . . . . . . . . . . . . . . . . . 2
1.7 "Compensation Deferrals" . . . . . . . . . . . . . . . . . 3
1.8 "Disability" . . . . . . . . . . . . . . . . . . . . . . . 3
1.9 "Eligibility Amount" . . . . . . . . . . . . . . . . . . . 3
1.10 "Eligible Employee" . . . . . . . . . . . . . . . . . . . . 3
1.11 "Employer" . . . . . . . . . . . . . . . . . . . . . . . . 3
1.12 "ERISA" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.13 "Nonemployee Director" . . . . . . . . . . . . . . . . . . 3
1.14 "Participant" . . . . . . . . . . . . . . . . . . . . . . . 3
1.15 "Participant's Account" or "Account" . . . . . . . . . . . 3
1.16 "Plan Year" . . . . . . . . . . . . . . . . . . . . . . . . 3
1.17 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.18 "Retirement" . . . . . . . . . . . . . . . . . . . . . . . 4
1.19 "SSP" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.20 "Transamerica" . . . . . . . . . . . . . . . . . . . . . . 4
1.21 "Transamerica Group" . . . . . . . . . . . . . . . . . . . 4
SECTION 2
PARTICIPATION
2.1 Participation . . . . . . . . . . . . . . . . . . . . . . . 4
2.1.1 Initial Elections by Current Eligible
Employees and Nonemployee Directors . . . . . . . 4
2.1.2 Initial Elections by Newly Eligible
Employees . . . . . . . . . . . . . . . . . . . . 4
2.1.3 Elections by New Directors . . . . . . . . . . . . 4
2.1.4 Elections for Subsequent Plan Years . . . . . . . 4
2.1.5 Separate Election to Defer Bonuses . . . . . . . . 5
2.1.6 No Election Changes During Plan Year . . . . . . . 5
2.1.7 Specific Timing and Method of Election . . . . . . 5
2.2 Hardship Suspension of Participation . . . . . . . . . . . 5
2.2.1 Automatic Suspension . . . . . . . . . . . . . . . 5
2.2.2 Permissible Suspension . . . . . . . . . . . . . . 5
2.3 Termination of Participation . . . . . . . . . . . . . . . 5
SECTION 3
COMPENSATION DEFERRAL ELECTIONS
3.1 Compensation Deferrals . . . . . . . . . . . . . . . . . . 6
3.2 Crediting of Compensation Deferrals . . . . . . . . . . . . 6
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Page
3.3 Deemed Interest on Accounts . . . . . . . . . . . . . . . . 6
3.3.1 Deferral Term of 8 Years or More . . . . . . . . . 6
3.3.2 Deferral Term of 5 to 7 Years . . . . . . . . . . 6
3.3.3 Deferral Term of less than 5 Years . . . . . . . . 6
3.3.4 Interest Crediting Rules . . . . . . . . . . . . . 7
3.4 Form of Payment . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Term of Deferral . . . . . . . . . . . . . . . . . . . . . 7
SECTION 4
ACCOUNTING
4.1 Participants' Accounts . . . . . . . . . . . . . . . . . . 7
4.2 Participants Remain Unsecured Creditors . . . . . . . . . . 7
4.3 Accounting Methods . . . . . . . . . . . . . . . . . . . . 7
4.4 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 5
DISTRIBUTIONS
5.1 Normal Distribution Timing and Rules . . . . . . . . . . . 8
5.2 Change of Control . . . . . . . . . . . . . . . . . . . . . 8
5.3 Special Rule for Death or Disability . . . . . . . . . . . 8
5.4 Termination of Employment . . . . . . . . . . . . . . . . . 8
5.5 Beneficiary Designations . . . . . . . . . . . . . . . . . 9
5.5.1 Spousal Consent . . . . . . . . . . . . . . . . . 9
5.5.2 Changes and Failed Designations . . . . . . . . . 9
5.6 Financial Hardship . . . . . . . . . . . . . . . . . . . . 9
5.7 Payments to Incompetents . . . . . . . . . . . . . . . . . 10
5.8 Undistributable Accounts . . . . . . . . . . . . . . . . . 10
5.9 Payment in Cash or Its Equivalent . . . . . . . . . . . . . 10
5.10 Committee Discretion . . . . . . . . . . . . . . . . . . . 10
SECTION 6
PARTICIPANT'S INTEREST IN ACCOUNT
6.1 Compensation Deferral Contributions . . . . . . . . . . . . 10
SECTION 7
ADMINISTRATION OF THE PLAN
7.1 Plan Administrator . . . . . . . . . . . . . . . . . . . . 10
7.2 Committee . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.3 Actions by Committee . . . . . . . . . . . . . . . . . . . 11
7.4 Powers of Committee . . . . . . . . . . . . . . . . . . . . 11
7.5 Decisions of Committee . . . . . . . . . . . . . . . . . . 11
7.6 Administrative Expenses . . . . . . . . . . . . . . . . . . 12
7.7 Eligibility to Participate . . . . . . . . . . . . . . . . 12
7.8 Indemnification . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 8
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Page
FUNDING
8.1 Unfunded Plan . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 9
MODIFICATION OR TERMINATION OF PLAN
9.1 Employers' Obligation is Limited . . . . . . . . . . . . . 12
9.2 Right to Amend or Terminate . . . . . . . . . . . . . . . . 12
9.3 Effect of Termination . . . . . . . . . . . . . . . . . . . 12
SECTION 10
GENERAL PROVISIONS
10.1 Inalienability . . . . . . . . . . . . . . . . . . . . . . 13
10.2 Participation by Affiliates . . . . . . . . . . . . . . . . 13
10.3 Rights and Duties . . . . . . . . . . . . . . . . . . . . . 13
10.4 Apportionment of Costs and Duties . . . . . . . . . . . . . 13
10.5 No Effect on Service . . . . . . . . . . . . . . . . . . . 13
10.6 Compensation Deferrals Not Counted Under Other
Employee Benefit Plans . . . . . . . . . . . . . . . . . . 13
10.7 Applicable Law . . . . . . . . . . . . . . . . . . . . . . 14
10.8 Severability . . . . . . . . . . . . . . . . . . . . . . . 14
10.9 Captions . . . . . . . . . . . . . . . . . . . . . . . . . 14
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TRANSAMERICA CORPORATION
DEFERRED COMPENSATION PLAN
TRANSAMERICA CORPORATION, a Delaware corporation, having previously
adopted the Transamerica Deferred Compensation Policy (the "Policy"), and
having amended and restated the Policy on several occasions hereby amends and
restates the last version of the Policy in the form of this Transamerica
Corporation Deferred Compensation Plan (the "Plan"). The Plan is effective as
of January 1, 1995. The Plan was established and is maintained for the
benefit of (a) a select group of management and highly compensated employees
of Transamerica and its participating Affiliates, and (b) members of the Board
of Directors who are employees of neither Transamerica nor its Affiliates, in
order to provide such employees and directors with certain deferred
compensation benefits. The Plan is an unfunded deferred compensation plan
that is intended to qualify for the exemptions provided in sections 201, 301,
and 401 of ERISA.
SECTION 1
DEFINITIONS
The following words and phrases shall have the following meanings
unless a different meaning is plainly required by the context:
1.1 "Affiliate" means any corporation, trade or business which is,
together with Transamerica, a member of a controlled group of corporations or
an affiliated service group or under common control (within the meaning of
section 414(b), (c) or (m) of the Internal Revenue Code of 1986, as amended),
but only for the period during which such other entity is so affiliated with
Transamerica.
1.2 "Beneficiary" means the person or persons entitled to receive
the balance credited to a Participant's Account upon the death of a
Participant, as provided in Section 5.5.
1.3 "Board of Directors" means the Board of Directors of
Transamerica, as constituted from time to time.
1.4 "Change of Control" means the occurrence of any of the
following:
(a) the acquisition by an individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (1) the then outstanding shares of
common stock of Transamerica (the "Outstanding Company Common Stock") or
(2) the combined voting power of the then outstanding voting securities
of Transamerica entitled to vote generally in the election of directors
(the "Outstanding Company Voting Securities"); provided, however, that
for purposes of this paragraph (a), the following acquisitions shall not
constitute a Change in Control: (i) any acquisition directly from
Transamerica, (ii) any acquisition by Transamerica, (iii) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained
by Transamerica or any corporation controlled by Transamerica or (iv) any
acquisition by any corporation pursuant to a transaction which complies
with clauses (1), (2) and (3) of paragraph (c);
(b) During the term of any deferral elected by a Participant
pursuant to his or her deferral election under Section 3.1, individuals
who, at the beginning of such term, constitute the entire Board of
Directors (the "Incumbent Board"), cease for any reason to constitute a
majority of the membership thereof; provided, however, that any
individual becoming a director after the beginning of such term whose
election, or nomination for election by Transamerica's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as
a result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board of Directors;
(c) consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of
Transamerica (a "Business Combination"), in each case, unless, following
such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns Transamerica or
all or substantially all of Transamerica's assets either directly or
through one or more subsidiaries) in substantially the same proportions
as their ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan
(or related trust) of Transamerica or such corporation resulting from
such Business Combination) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination and (iii) at
least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or
of the action of the Board of Directors, providing for such Business
Combination; or
(d) approval by the shareholders of Transamerica of a complete
liquidation or dissolution of Transamerica.
1.5 "Committee" means the Management Development and Compensation
Committee of the Board of Directors, as it may be constituted from time to
time. The members of the Committee are appointed by, and serve at the
pleasure of, the Board of Directors.
1.6 "Compensation" means (a) in the case of an Eligible Employee,
his or her base salary and bonuses (if any) eligible to be deferred under the
Plan, and (b) in the case of a Nonemployee Director, his or her annual
retainer, retainer for serving as a committee chairperson (if any), and
meeting fees. The Committee, in its discretion, shall from time to time
2
designate the types of bonuses which shall be eligible for deferral under the
Plan. A Participant's Compensation shall not include any other type of
remuneration.
1.7 "Compensation Deferrals" means the amounts credited to
Participants' Accounts under the Plan pursuant to their deferral elections
made pursuant to Section 2.1.
1.8 "Disability" or "Disabled" means the mental or physical
inability of a Participant to perform the regularly assigned duties of his or
her service, provided that such inability (a) has continued or is expected to
continue for a period of at least twelve (12) months and (b) is evidenced by
the certificate of a physician satisfactory to the Committee stating that such
inability exists and is likely to be permanent.
1.9 "Eligibility Amount" means the amount of Compensation required
to participate in the Plan as determined annually by the Chief Executive
Officer of Transamerica. For 1995, the Eligibility Amount is $150,000.
1.10 "Eligible Employee" means an employee of an Employer (a) whose
Compensation for the year preceding the Plan Year was at least equal to the
Eligibility Amount; (b)(1) whose Compensation for the Plan Year is at least
$122,000, and (2) who deferred Compensation under the Transamerica Deferred
Compensation Policy for a term which, when added to the number of years over
which the Participant's Account was scheduled to be paid, exceeded five (5)
years; or (c) whose annual base salary rate at the time of hire is greater
than or equal to the Eligibility Amount (in the case of an individual who is
hired during a Plan Year). Whether an employee's Compensation or annual base
salary rate is at least equal to the Eligibility Amount shall be determined
pursuant to procedures adopted by the Committee from time to time.
1.11 "Employer" means Transamerica and each of its Affiliates that
adopts the Plan as a participating Employer. With respect to an individual
Participant, Employer means (a) in the case of an Eligible Employee,
Transamerica or the Affiliate that has adopted the Plan and that directly
employs such Participant, and (b) in the case of a Nonemployee Director,
Transamerica.
1.12 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended. Reference to a specific section of ERISA shall include such
section, any valid regulation promulgated thereunder, and any comparable
provision of any future legislation or regulation amending, supplementing or
superseding such section or regulation.
1.13 "Nonemployee Director" means a member of the Board of
Directors who is an employee of neither Transamerica nor of any Affiliate.
1.14 "Participant" means an Eligible Employee or Nonemployee
Director who (a) has become a Participant in the Plan pursuant to Section 2.1
and (b) has not ceased to be a Participant pursuant to Section 2.3.
1.15 "Participant's Account" or "Account" means as to any
Participant the separate account maintained on the books of Transamerica in
order to reflect his or her interest under the Plan.
1.16 "Plan Year" means the calendar year.
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1.17 "Plan" means the Transamerica Corporation Deferred
Compensation Plan, as set forth in this instrument and as hereafter amended
from time to time.
1.18 "Retirement" means (a) in the case of an Eligible Employee,
the Participant's termination of employment with Transamerica and all of its
Affiliates on account of his or her retirement at or after his or her earliest
permissible retirement date under his or her Employer's tax-qualified
retirement plan, and (b) in the case of a Nonemployee Director, the
Participant's termination of service on the Board of Directors at or after his
or her earliest permissible retirement date under Transamerica's Nonemployee
Director Retirement Plan.
1.19 "SSP" means the Transamerica Corporation Employees Stock
Savings Plan, as hereafter amended from time to time.
1.20 "Transamerica" means Transamerica Corporation, a Delaware
corporation.
1.21 "Transamerica Group" means the group of corporations including
Transamerica and its 50% or more owned Affiliates.
SECTION 2
PARTICIPATION
2.1 Participation. The decision of each Eligible Employee and
Nonemployee Director to become a Participant shall be entirely voluntary.
2.1.1 Initial Elections by Current Eligible Employees and
Nonemployee Directors. An Eligible Employee or Nonemployee Director may elect
to become a Participant for the 1995 Plan Year by electing, no later than
December 31, 1994, to make Compensation Deferrals. An election under this
Section 2.1.1 to make Compensation Deferrals shall be effective only for the
1995 Plan Year.
2.1.2 Initial Elections by Newly Eligible Employees. Each
Eligible Employee who is hired during the 1995 Plan Year or a subsequent Plan
Year may elect to become a Participant for that Plan Year by electing, within
thirty calendar days of the date of his or her hire, to make Compensation
Deferrals. An election under this Section 2.1.2 to make Compensation
Deferrals shall be effective only for the remainder of the Plan Year with
respect to which the election is made.
2.1.3 Elections by New Directors. Each individual who is
elected a Nonemployee Director during a Plan Year may elect to become a
Participant in the Plan for that Plan Year by electing, within thirty calendar
days of the effective date of his or her election to the Board of Directors,
to make Compensation Deferrals under the Plan. An election under this
Section 2.1.3 to make Compensation Deferrals shall be effective only for the
remainder of the Plan Year with respect to which the election is made.
2.1.4 Elections for Subsequent Plan Years. An Eligible
Employee or Nonemployee Director may elect to become a Participant (or to
continue or reinstate his or her active participation) in the Plan for any
subsequent Plan Year by electing, no later than December 31 of the preceding
Plan Year, to make Compensation Deferrals under the Plan. An election under
4
this Section 2.1.4 to make Compensation Deferrals shall be effective only for
the Plan Year with respect to which the election is made.
2.1.5 Separate Election to Defer Bonuses. Each Eligible
Employee shall make a separate Compensation Deferral election with respect to
the bonus portion(s) (if any) of his or her Compensation. An Eligible
Employee's Compensation Deferral election with respect to his or her bonus(es)
shall be made no later than December 31 of the Plan Year immediately
preceding the Plan Year during which the Eligible Employee will perform the
services for which a bonus may be paid, except to the limited extent provided
in Section 2.1.2.
2.1.6 No Election Changes During Plan Year. After the
beginning of a Plan Year, a Participant shall not be permitted to change or
revoke his or her deferral election for such Plan Year, except to the limited
extent provided in Section 2.2.
2.1.7 Specific Timing and Method of Election.
Notwithstanding any contrary provision of this Section 2.1, the Director of
Compensation of Transamerica (the "Director"), in his or her sole discretion,
shall determine the manner and deadlines for Participants to make Compensation
Deferral elections. The deadlines prescribed by the Director may be earlier
than the deadlines specified in Sections 2.1.1, 2.1.2, 2.1.3, 2.1.4, and
2.1.5, but shall not be later than such specified deadlines.
2.2 Hardship Suspension of Participation.
2.2.1 Automatic Suspension. In the event that a
Participant receives a financial hardship withdrawal from the SSP or any other
plan which is maintained by one or more members of the Transamerica Group and
which contains a qualified cash or deferred arrangement under section 401(k)
of the Code (collectively, the "Plans"), the Participant's Compensation
Deferrals under the Plan (if any) shall be suspended for a period of twelve
(12) months from the date that the Participant received such hardship
withdrawal.
2.2.2 Permissible Suspension. In the event that a
Participant incurs a "financial hardship" (as defined in this Section 2.2.2),
the Committee, in its sole discretion, may suspend the Participant's
Compensation Deferrals for the remainder of the Plan Year. However, an
election to make Compensation Deferrals under Section 2.1 shall be irrevocable
as to amounts deferred as of the effective date of any suspension in
accordance with this Section 2.2.2. For purposes of the Plan, a "financial
hardship" shall mean a severe financial emergency which is caused by a sudden
and unexpected accident, illness or other event beyond the control of the
Participant which would, if no suspension of deferrals (or accelerated
distribution under Section 5.6) were made, result in severe financial burden
to the Participant or a member of his or her immediate family. Also, a
financial hardship does not exist to the extent that the hardship may be
relieved by (a) reimbursement or compensation by insurance, (b) liquidation of
the Participant's other assets (to the extent such liquidation would not
itself cause severe financial hardship), or (c) any loan available to the
Participant (to the extent the payments on such loan would not themselves
cause severe financial hardship).
2.3 Termination of Participation. An Eligible Employee or
Nonemployee Director who has become a Participant shall remain a Participant
until his or her entire vested Account balance is distributed. However, an
5
individual who has become a Participant may or may not be an active
Participant making Compensation Deferrals for a particular Plan Year,
depending upon whether he or she has elected to make Compensation Deferrals
for such Plan Year.
SECTION 3
COMPENSATION DEFERRAL ELECTIONS
3.1 Compensation Deferrals. At the times and in the manner
prescribed in Section 2.1, each Eligible Employee or Nonemployee Director may
elect to defer portions of his or her Compensation and to have the amounts of
such deferrals credited to his or her Account. For each Plan Year, an
Eligible Employee may elect to defer an amount equal to any percentage or any
specific dollar amount of his or her Compensation, provided that the
percentage or dollar amount elected by the Participant shall result in an
expected deferral of not less than $5,000 of his or her Compensation. For
each Plan Year, a Nonemployee Director may elect to defer an amount equal to
any percentage or specific dollar amount of his or her Compensation, provided
that (a) the percentage or dollar amount elected by the Participant shall
result in an expected deferral of not less than $5,000 of his or her
Compensation, and (b) the Participant shall elect a percentage with respect to
his or her meeting fees, and such percentage shall be either 0% or 100%.
Notwithstanding any contrary provision of the Plan, the Committee may reduce a
Participant's Compensation Deferrals to the extent necessary to satisfy any
required deductions for welfare plans or any deductions required by law.
3.2 Crediting of Compensation Deferrals. The amounts deferred
pursuant to Section 3.1 shall reduce the Participant's Compensation for the
Plan Year and shall be credited to the Participant's Account as of the last
day of the month in which the amounts (but for the deferral) would have been
paid to the Participant. For each Plan Year, the exact dollar amount to be
deferred from each Compensation payment shall be determined by the Committee
under such formulae as it shall adopt from time to time.
3.3 Deemed Interest on Accounts. Each Participant's Account shall
be credited with deemed interest as of the end of each month. The annual rate
for crediting deemed interest shall be based on the term of deferral elected
by the Participant pursuant to Section 3.5, as follows:
3.3.1 Deferral Term of 8 Years or More. Subject to Section
5, amounts deferred from a Participant's Compensation for 8 years or more
shall be credited at the end of each month with interest at an annual rate
(which rate shall be adjusted annually) equal to the Moody's A Rated Corporate
Bond Yield average for November of the immediately preceding Plan Year,
plus 3%.
3.3.2 Deferral Term of 5 to 7 Years. Subject to Section 5,
amounts deferred from a Participant's Compensation for 5, 6 or 7 years shall
be credited at the end of each month with interest at an annual rate (which
rate shall be adjusted annually) equal to the Moody's A Rated Corporate Bond
Yield average for November of the immediately preceding Plan Year, plus 2%.
3.3.3 Deferral Term of less than 5 Years. Subject to
Section 5, amounts deferred from a Participant's Compensation for less than 5
years shall be credited at the end of each month with interest at an annual
rate equal to the average rate paid by 10-year U.S. Treasury Notes during that
month; provided, however, that, for the month of deferral which immediately
6
precedes payout of amounts deferred for less than 5 years (the "Last Month"),
interest will be credited at the rate in effect for the month which
immediately precedes the Last Month.
3.3.4 Interest Crediting Rules. Deemed interest under this
Section 3.3 shall be calculated using a 360-day year and shall be compounded
on a monthly basis. The exact dollar amount to be credited as deemed interest
to any Participant's Account shall be determined by the Committee under such
formulae as it shall adopt from time to time.
3.4 Form of Payment. Each Participant shall indicate on his or
her deferral election made pursuant to Section 3.1 the form of payment for
Compensation Deferrals made pursuant to such election. A Participant may
elect (a) a lump sum payment, or (b) a fixed number of annual installment
payments (not to exceed 10); provided, however, that a Participant who elects
to receive annual installments shall receive payment in a lump sum if:
(a) the Participant terminates his or her service with the Transamerica and
all Affiliates for a reason other than Retirement, death or disability, or
(b) distribution to the Participant is accelerated due to a change of control,
or the Participant's death or Disability. A Participant's election as to the
form of payment shall be irrevocable and shall apply to all amounts credited
to the Participant's Account during the Plan Year with respect to which the
election is made.
3.5 Term of Deferral. Each Participant shall indicate on his or
her deferral election made pursuant to Section 3.1 the time for payment for
Compensation Deferrals (and deemed interest thereon) made pursuant to such
election. A Participant may elect a term of deferral equal to any whole
number (not less than one) of calendar years specified in his or her deferral
election. In addition, pursuant to such procedures as the Committee may adopt
from time to time, a Participant may elect a term of deferral which ends upon
the later of the expiration of a specified period or the occurrence of a
specific event (for example, the later of ten years or Retirement). If a
Participant makes such an alternative election, the rate for crediting deemed
interest on the deferral shall be based on the elected term of years for such
deferral, but subject to Section 5.4. A Participant's election as to the term
of deferral shall be irrevocable and shall apply to all amounts credited to
the Participant's Account during the Plan Year with respect to which the
election is made.
SECTION 4
ACCOUNTING
4.1 Participants' Accounts. For each Plan Year, at the direction
of the Committee, there shall be established and maintained on the books of
Transamerica, a separate Account for each Participant to which shall be
credited all Compensation Deferrals made by the Participant during such Plan
Year, and the deemed interest on such Compensation Deferrals.
4.2 Participants Remain Unsecured Creditors. All amounts credited
to a Participant's Account under the Plan shall continue for all purposes to
be a part of the general assets of Transamerica. Each Participant's interest
in the Plan shall make him or her only a general, unsecured creditor of
Transamerica.
4.3 Accounting Methods. The accounting methods or formulae to be
used under the Plan for the purpose of maintaining the Participants'
7
Accounts, including the calculation and crediting of any deemed interest
shall be determined by the Committee in its sole discretion. The accounting
methods or formulae selected by the Committee may be revised from time to
time.
4.4 Reports. Each Participant shall be furnished with periodic
statements of his or her Account, reflecting the status of his or her
interest in the Plan, at least annually.
SECTION 5
DISTRIBUTIONS
5.1 Normal Distribution Timing and Rules. Subject to Sections
5.2, 5.3, and 5.4, distribution of the balance credited to a Participant's
Account shall commence as soon as administratively practicable after the end
of the term(s) of deferral elected by the Participant under Section 3.5, in
accordance with the following rules. If the Participant elected a lump sum,
payment shall be made as of the first business day of the calendar year next
following the last year of the term of deferral, in an amount equal to the
amount credited to the Participant's Account as of the end of the last year of
deferral. If the Participant elected annual installments, the first
installment shall be paid as of the first business day of the calendar year
next following the last year of the term of deferral, and subsequent
installments shall be paid to the Participant as near as administratively
practicable to each anniversary of the first installment payment. The amount
of each installment shall equal the amount credited to the Participant's
Account as of the December 31 next preceding the date of payment, divided by
the number of installments remaining to be made. While a Participant's
Account is in installment payout status, the unpaid balance credited to the
Participant's Account shall continue to be credited with deemed interest under
Section 3.3.
5.2 Change of Control. If there is a Change of Control, the
balance then credited to a Participant's Account shall be distributed to him
or her in a lump sum as soon as administratively practicable after the date of
the Change of Control. Deemed interest shall be credited prior to any such
accelerated distribution in accordance with the terms of the Participant's
deferral election. The amount of any such accelerated lump sum distribution
shall be equal to (a) the amount credited to the Participant's Account as of
the end of the month next preceding the month in which payment is made, plus
(b) any amount that the Participant deferred but which has not yet been
credited to his or her Account.
5.3 Special Rule for Death or Disability. If a Participant dies
or becomes Disabled, the balance then credited to his or her Account shall be
distributed to the Participant (or his or her Beneficiary) at the time and in
the form elected by the Participant pursuant to Sections 3.4 and 3.5;
provided, however, that the Committee, in its sole discretion, may elect to
distribute such amount in a lump sum as soon as administratively practicable
after the date of death or Disability. Deemed interest shall be credited
prior to any such accelerated distribution in accordance with the terms of the
Participant's deferral election.
5.4 Termination of Employment. If a Participant terminates his or
her employment with Transamerica and all of its Affiliates for a reason other
than death, Disability or Retirement, the balance then credited to his or her
Account shall be distributed to him or her in a lump sum as soon as
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administratively practicable after such termination. Deemed interest shall
be credited prior to any such accelerated distribution in accordance with the
terms of the Participant's deferral election. Notwithstanding the preceding
sentence, if (a) distribution of the Participant's Account has not commenced
prior to the date of such termination, and (b) either (1) the Participant
voluntarily terminated employment or service, or (2) the Participant's
employment was terminated for "cause", deemed interest shall be recomputed and
credited prior to any such accelerated distribution based on the average
10-year U.S. Treasury Note rate (in the manner described in Section 3.3.3).
For purposes of this Section 5.4, termination of employment for "cause" shall
mean termination on account of the Participant's (a) commission of any
criminal act (other than minor traffic violations), and/or (b) gross
negligence or willful misconduct in the performance of his or her duties of
employment.
A transfer of employment between any two corporations within the
Transamerica Group shall not be deemed to be a termination of employment for
purposes of this Section 5.4. A transfer of employment shall include a
transfer on account of the sale of assets by one member of the Transamerica
Group to another member of the Transamerica Group. In the event that a
Participant's Employer ceases to be a member of the Transamerica Group by
reason of the sale (or spin-off) of the stock of the Employer by Transamerica,
such cessation shall not in itself be deemed to constitute a termination of
employment for purposes of this Section 5.4.
5.5 Beneficiary Designations. Each Participant may, pursuant to
such procedures as the Committee may specify, designate one or more
Beneficiaries.
5.5.1 Spousal Consent. If a Participant does not designate
his or her spouse as sole primary Beneficiary, the beneficiary designation
shall be ineffective unless such spouse consents to the designation. Any
spousal consent required under this Section 5.5 shall be ineffective unless it
is set forth in writing and signed by the spouse. Notwithstanding the
preceding, if the Participant establishes to the satisfaction of Transamerica
that written spousal consent may not be obtained because the spouse cannot be
located, his or her designation shall be effective without a spousal consent.
Any spousal consent required under this Section 5.5 shall be valid only with
respect to the spouse who signs the consent.
5.5.2 Changes and Failed Designations. A Participant may
change or revoke Beneficiary designations by delivering a new designation (or
revocation) in the manner described in Section 5.5.1. Any designation or
revocation shall be effective only if it is received by Transamerica.
However, when so received, the designation or revocation shall be effective as
of the date the notice is executed (whether or not the Participant still is
living), but without prejudice to Transamerica on account of any payment made
before the change is recorded. The last effective designation received by
Transamerica shall supersede all prior designations. If a Participant dies
without having effectively designated a Beneficiary, or if no Beneficiary
survives the Participant, the Participant's Account shall be payable (a) to
his or her surviving spouse, or (b) if the Participant is not survived by his
or her spouse, to his or her beneficiary under the Employer's group-term life
insurance program (if any), or (c) if no one survives or no such program
exists, to his or her estate.
5.6 Financial Hardship. In the event that a Participant incurs a
"financial hardship" (as defined in Section 2.2), the Committee, in its sole
9
discretion and notwithstanding any contrary provision of the Plan, may
determine that all or part of the Participant's Account shall be paid to him
or her immediately; provided, however, that (a) the amount paid to the
Participant pursuant to this Section 5.6 shall be limited to the amount
reasonably necessary to alleviate the Participant's hardship, and (b) payment
under this Section 5.6 may not be made to the extent that the hardship may be
relieved by suspension of the Participant's Compensation Deferrals in
accordance with Section 2.2.
5.7 Payments to Incompetents. If any individual to whom a
benefit is payable under the Plan is a minor or legally incompetent, the
Committee shall determine whether payment shall be made directly to the
individual, any person acting as his or her custodian or legal guardian under
the California Uniform Transfers to Minors Act, his or her legal
representative or a near relative, or directly for his or her support,
maintenance or education.
5.8 Undistributable Accounts. Each Participant (and in the event
of the Participant's death, his or her Beneficiary) shall keep the Committee
advised of his or her current address. If the Committee is unable to locate
the Participant or Beneficiary to whom a Participant's Account is payable
under this Section 5, the Participant's Account shall continue to be credited
with deemed interest pursuant to Section 3.3. Accounts that, in accordance
with the preceding sentence, have been undistributable for a period of 35
months shall be forfeited as of the end of the 35th month. If a Participant
whose Account was forfeited under this Section 5.8 (or his or her Beneficiary)
files a claim for distribution of the Account after the date that it was
forfeited, and if the Committee determines that such claim is valid, then the
forfeited balance shall be paid in a lump sum cash payment as soon as
practicable thereafter.
5.9 Payment in Cash or Its Equivalent. All payments from the Plan
shall be made in cash or its equivalent.
5.10 Committee Discretion. Within the specific time periods
described in this Section 5, the Committee shall have sole discretion to
determine the specific timing of the payment of any Account balance under the
Plan.
SECTION 6
PARTICIPANT'S INTEREST IN ACCOUNT
6.1 Compensation Deferral Contributions. Subject to Sections 8.1
(relating to creditor status) and 9.2 (relating to amendment and/or
termination of the Plan), a Participant's interest in the balance credited to
his or her Account at all times shall be 100% vested and nonforfeitable.
SECTION 7
ADMINISTRATION OF THE PLAN
7.1 Plan Administrator. Transamerica is hereby designated as the
administrator of the Plan (within the meaning of section 3(16)(A) of ERISA).
7.2 Committee. The Plan shall be administered by the Committee.
The Committee shall have the authority to control and manage the operation and
administration of the Plan.
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7.3 Actions by Committee. Each decision of a majority of the
members of the Committee then in office shall constitute the final and binding
act of the Committee. The Committee may act with or without a meeting being
called or held and shall keep minutes of all meetings held and a record of all
actions taken by written consent.
7.4 Powers of Committee. The Committee shall have all powers and
discretion necessary or appropriate to supervise the administration of the
Plan and to control its operation in accordance with its terms, including, but
not by way of limitation, the following powers:
(a) To interpret and determine the meaning and validity of the
provisions of the Plan and to determine any question arising under, or in
connection with, the administration, operation or validity of the Plan or
any amendment thereto;
(b) To determine any and all considerations affecting the
eligibility of any employee or director to become a Participant or remain
a Participant in the Plan;
(c) To cause one or more separate Accounts to be maintained for
each Participant;
(d) To cause Compensation Deferrals and deemed interest to be
credited to Participants' Accounts;
(e) To establish and revise an accounting method or formula for
the Plan, as provided in Section 4.3;
(f) To determine the status and rights of Participants and their
spouses, Beneficiaries or estates;
(g) To employ such counsel, agents and advisers, and to obtain
such legal, clerical and other services, as it may deem necessary or
appropriate in carrying out the provisions of the Plan;
(h) To establish, from time to time, rules for the performance
of its powers and duties and for the administration of the Plan;
(i) To arrange for annual distribution to each Participant of a
statement of benefits accrued under the Plan;
(j) To publish a claims and appeal procedure satisfying the
minimum standards of section 503 of ERISA pursuant to which individuals
or estates may claim Plan benefits and appeal denials of such claims;
(k) To delegate to any one or more of its members or to any
other person, severally or jointly, the authority to perform for and on
behalf of the Committee one or more of the functions of the Committee
under the Plan; and
(l) To decide all issues and questions regarding Account
balances, and the time, form, manner, and amount of distributions to
Participants.
7.5 Decisions of Committee. All actions, interpretations, and
decisions of the Committee shall be conclusive and binding on all persons, and
shall be given the maximum deference permitted by law.
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7.6 Administrative Expenses. All expenses incurred in the
administration of the Plan by the Committee, or otherwise, including legal
fees and expenses, shall be paid and borne by the Employers.
7.7 Eligibility to Participate. No member of the Committee who
also is an Eligible Employee or Nonemployee Director shall be excluded from
participating in the Plan, but as a member of the Committee, he or she shall
not be entitled to act or pass upon any matters pertaining specifically to his
or her own Account.
7.8 Indemnification. Each of the Employers shall, and hereby
does, indemnify and hold harmless the members of the Committee, from and
against any and all losses, claims, damages or liabilities (including
attorneys' fees and amounts paid, with the approval of the Board of Directors,
in settlement of any claim) arising out of or resulting from the
implementation of a duty, act or decision with respect to the Plan, so long as
such duty, act or decision does not involve gross negligence or willful
misconduct on the part of any such individual.
SECTION 8
FUNDING
8.1 Unfunded Plan. All amounts credited to a Participant's
Account under the Plan shall continue for all purposes to be a part of the
general assets of Transamerica. The interest of the Participant in his or her
Account, including his or her right to distribution thereof, shall be an
unsecured claim against the general assets of Transamerica. Nothing contained
in the Plan shall give any Participant or Beneficiary any interest in or claim
against any specific assets of Transamerica.
SECTION 9
MODIFICATION OR TERMINATION OF PLAN
9.1 Employers' Obligation is Limited. The Employers intend to
continue the Plan indefinitely, and to maintain each Participant's Account
until it is scheduled to be paid to him or her in accordance with the
provisions of the Plan. However, the Plan is voluntary on the part of the
Employers, and the Employers do not guarantee to continue the Plan.
Transamerica at any time may amend the Plan, suspend Compensation Deferrals,
or discontinue Compensation Deferrals, with or without cause.
9.2 Right to Amend or Terminate. The Board of Directors reserves
the right to alter, amend or terminate the Plan, or any part thereof, at any
time and for any reason.
9.3 Effect of Termination. If the Plan is terminated pursuant to
this Section 9, the balances credited to the Accounts of the affected
Participants shall be distributed to them at the time and in the manner set
forth in Section 5; provided, however, that the Committee, in its sole
discretion, may authorize accelerated distribution of Participants' Accounts
as of any earlier date.
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SECTION 10
GENERAL PROVISIONS
10.1 Inalienability. In no event may either a Participant, a
former Participant or his or her Beneficiary, spouse or estate sell, transfer,
anticipate, assign, hypothecate, or otherwise dispose of any right or interest
under the Plan; and such rights and interests shall not at any time be subject
to the claims of creditors nor be liable to attachment, execution or other
legal process. Accordingly, for example, a Participant's interest in the Plan
is not transferable pursuant to a domestic relations order.
10.2 Participation by Affiliates. One or more Affiliates of
Transamerica may become participating Employers by adopting the Plan. By
adopting the Plan, an Affiliate is deemed to agree to all of its terms,
including (but not limited to) the provisions granting exclusive authority to
the Board of Directors to amend the Plan and the provisions granting exclusive
authority to the Committee to administer and interpret the Plan. Any
Affiliate may terminate its participation in the Plan at any time by
resolution of its board of directors. The liabilities incurred under the Plan
to the Participants shall be solely the liabilities of Transamerica, and no
other Employer shall be liable for benefits accrued under the Plan. An
Affiliate's participation in the Plan shall be deemed terminated if it ceases
to be a member of the Transamerica Group.
10.3 Rights and Duties. Neither the Employers nor the Committee
shall be subject to any liability or duty under the Plan except as expressly
provided in the Plan, or for any action taken, omitted or suffered in good
faith.
10.4 Apportionment of Costs and Duties. All acts required of the
Employers under the Plan may be performed by Transamerica for itself and its
Affiliates, and the costs of the Plan may be equitably apportioned by the
Committee among Transamerica and the other Employers.
10.5 No Effect on Service. Neither the establishment or
maintenance of the Plan, the making of any Compensation Deferrals nor any
action of any Employer or the Committee, shall be held or construed to confer
upon any individual any right to be continued as an employee or Nonemployee
Director, upon dismissal, any right or interest in any specific assets of the
Employers other than as provided in the Plan. Each Employer expressly
reserves the right to discharge any employee at any time, with or without
cause.
10.6 Compensation Deferrals Not Counted Under Other Employee
Benefit Plans. Compensation Deferrals under the Plan will not be considered
for purposes of contributions or benefits under any other employee benefit
plan sponsored by the Employers, except that (a) to the extent specifically
provided in the Transamerica Corporation Supplemental Pension Plan and the
Transamerica Corporation Nonemployee Director Retirement Plan, Compensation
Deferrals will be considered for purposes of determining an individual's
benefit (if any) under such Plans, and (b) pursuant to such procedures as the
Committee, in its discretion, may adopt from time to time, Compensation
Deferrals will be eligible to be credited with employer matching
contributions under the SSP+ (or such other plan as the Committee may
designate).
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10.7 Applicable Law. The provisions of the Plan shall be
construed, administered and enforced in accordance with ERISA, and to the
extent not preempted by ERISA, with the laws of the State of California.
10.8 Severability. If any provision of the Plan is held invalid
or unenforceable, its invalidity or unenforceability shall not affect any
other provisions of the Plan, and in lieu of each provision which is held
invalid or unenforceable, there shall be added as part of the Plan a provision
that shall be as similar in terms to such invalid or unenforceable provision
as may be possible and be valid, legal, and enforceable.
10.9 Captions. The captions contained in and the table of contents
prefixed to the Plan are inserted only as a matter of convenience and for
reference and in no way define, limit, enlarge or describe the scope or
intent of the Plan nor in any way shall affect the construction of any
provision of the Plan.
EXECUTION
IN WITNESS WHEREOF, Transamerica, by its duly authorized officers,
has executed the Plan on the date indicated below.
TRANSAMERICA CORPORATION
Dated: ____________, 1994 By: _____________________________
Title:
Dated: ____________, 1994 And By: _________________________
Title:
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