Exhibit 10.16
DEFERRED COMPENSATION PROGRAM
FOR EXECUTIVES OF CSX CORPORATION
AND AFFILIATED COMPANIES
As Amended and Restated January 1, 1995
(As Amended through December 11, 1996)
1. Purpose
The purpose of this Program is to provide eligible executives with an
opportunity to supplement their retirement income. This Program is intended to
benefit a select group of management or highly compensated employees.
2. Definitions
2.1 "Administrator" shall mean the Corporation.
2.2 "Affiliated Company" shall mean the Corporation and any company or
corporation directly or indirectly controlled by the Corporation which the
Committee designates for participation in this Program in accordance with
Section 13.2.
2.3 "Award" shall mean, for any year, the amount awarded to an employee
of an Affiliated Company for that year and, in the absence of a Deferral
Agreement with respect to such amount, payable to him in the succeeding year
under the MICP, including any special incentive award.
2.4 "Board" shall mean the Board of Directors of the Corporation.
2.5 "Change of Control" shall mean any of the following:
(a) Stock Acquisition. The acquisition, by any
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 (i) the then
outstanding shares of common stock of the Corporation (the
"Outstanding Corporation Common Stock"), or (ii) the combined
voting power of the then outstanding voting securities of the
Corporation entitled to vote generally in the election of
directors (the "Outstanding Corporation Voting Securities");
provided, however, that for purposes of this subsection (a),
the following acquisitions shall not constitute a Change of
Control: (i) any acquisition directly from the Corporation;
(ii) any acquisition by the Corporation; (iii) any acquisition
by any employee benefit plan (or related trust) sponsored or
maintained by the Corporation or any corporation controlled by
the Corporation; or (iv) any acquisition by any corporation
pursuant to a transaction which complies with clauses (i),
(ii) and (iii) of subsection (c) of this Section XI(5); or
(b) Board Composition. Individuals who, as of the
date hereof, constitute the Board of Directors (the "Incumbent
Board") cease for any reason to constitute at least a majority
of the Board of Directors; provided, however, that any
individual becoming a director subsequent to the date hereof
whose election or nomination for election by the Corporation'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; or
(c) Business Combination. Approval by the
shareholders of the Corporation of a reorganization, merger,
consolidation or sale or other disposition of all or
substantially all of the assets of the Corporation or its
principal subsidiary that is not subject, as a matter of law
or contract, to approval by the Interstate Commerce Commission
or any successor agency or regulatory body having jurisdiction
over such transactions (the "Agency") (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 Corporation Common Stock and
Outstanding Corporation 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 the Corporation or its
principal subsidiary or all or substantially
all of the assets of the Corporation or its
principal subsidiary 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
Corporation Common Stock and Outstanding
Corporation 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 the Corporation 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 or the combined voting power of
the then outstanding voting securities of
such corporation except to the extent that
such ownership existed prior to the Business
Combination; and
(iii) at least a majority of the members of
the board of directors 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) Regulated Business Combination. Approval by the
shareholders of the Corporation of a Business Combination that
is subject, as a matter of law or contract, to approval by the
Agency (a "Regulated Business Combination") unless such
Business Combination complies with clauses (i), (ii) and (iii)
of subsection (c) of this Section XI(5); or
(e) Liquidation or Dissolution. Approval by the
shareholders of the Corporation of a complete liquidation or
dissolution of the Corporation or its principal subsidiary.
2.6 "Committee" shall mean the committee appointed pursuant to Section
13.1 to administer the Program
2.7 "Corporation" shall mean CSX Corporation, a Virginia corporation,
and any successor thereto by merger, purchase or otherwise.
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2.8 "Deferral Agreement" shall mean a completed agreement, including
any attachments and appendices thereto, in the form determined by the Committee,
between an Eligible Executive and the Affiliated Company of which he is an
employee, under which the Eligible Executive agrees to defer all or a portion of
his Award in accordance with the provisions of Section 3.
2.9 "Deferral Date" shall mean, with respect to any Deferral Agreement
entered into by an Eligible Executive, the first day of the month in which the
Award subject to the Deferral Agreement would be payable to the Eligible
Executive in the absence of such Deferral Agreement.
2.10 "Eligible Executive" shall mean, for any year, an employee of an
Affiliated Company who is in salary grades 22 through 40 as of (a) December 30th
of such year or (b) for calendar years beginning on or after January 1, 1986,
the date in such year he retired from the Affiliated Companies or terminated on
account of disability, as determined by the Committee, provided, however, that
the Committee, in its sole discretion, may designate any other employee of an
Affiliated Company as an Eligible Executive for such year.
2.11 "Equivalent" shall mean of equal present or accumulated value
based on the interest rates set forth in the applicable Deferral Agreements. In
determining Equivalent values, only the value of benefits for which the
eligibility requirements have been met shall be included.
2.12 "MICP" shall mean the Affiliated Companies' Management Incentive
Compensation Plans, as from time to time in effect.
2.13 "Normal Retirement Date" for a Participant shall mean the later
of:
(a) the last day of the month in which his 62nd
birthday occurs, or
(b) the earlier of (i) the last day of the month
preceding the 2nd anniversary of the Participant's earliest
Deferral Date or (ii) the last day of the month in which is
65th birthday occurs.
2.14 "Participant" shall mean an Eligible Executive who elects to defer
a portion of his Award in accordance with the provisions of Section 3.
2.15 "Program" shall mean this Deferred Compensation Program for
Executives of CSX Corporation and Affiliated Companies.
2.16 "Service" shall mean an employee's months of continuous employment
with the Affiliated Companies. In the event the employee has a break in his
continuous employment, his period of employment prior to the break shall be
credited to the employee in accordance with the rules governing breaks in
service under the CSX Corporation Pension Plan.
2.17 "Trust" shall mean the CSX Corporation Nonqualified Plan Trust or
such other trust which will substantially conform to the terms of the Internal
Revenue Service model trust as described in Revenue Procedure 92-64, 1992-2
C.B.422. Except as provided in Section 16, the Corporation is not obligated to
make any contribution to the Trust.
2.18 "Valuation Date" shall mean the last day of each calendar quarter
and such other dates as the Administrator deems necessary or appropriate to
value the Participants' benefits under this Program.
3. Deferral of Awards
3.1 At any time prior to the close of business on December 30 in any
calendar year, an Eligible Executive may elect to defer all or a portion of his
Award, if any, for that year. Such election shall be made by filing a Deferral
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Agreement with the Committee on or before the close of business on December 30
of the calendar year for which the Award is made. In the event that December 30
does not fall on a weekday, such filing must be made by the close of business on
the last prior business day.
3.2 Subject to the provisions of Sections 3.3 and 3.4:
(a) an Eligible Executive in 1985 may elect to defer
up to 100% of his 1985 Award;
(b) an Eligible Executive in 1986 may elect to defer
up to 100% of his 1986 Award;
(c) an Eligible Executive in 1988 may elect to defer
up to 100% of his 1988 Award; and
(d) an Eligible Executive in 1989 may elect to defer
up to 100% of his 1989 Award.
3.3 The minimum amount which an Eligible Executive may defer in any
year shall be the lesser of $5,000 or the maximum amount determined under
Section 3.2. If an Eligible Executive elects to defer less than this amount, his
election shall not be effective.
3.4 In its sole discretion, the Committee may, at any time, impose
additional limits on the maximum amount which an Eligible Executive may elect to
defer under this Program in any year or may impose additional requirements on
the Eligible Executive's right to defer the maximum amount under this Program in
any year.
3.5 An Eligible Executive's election to defer all or a portion of his
Award shall be effective on the last day such deferral may be elected, under
Section 3.1, for the year for which the Award is made. An Eligible Executive may
revoke or change his election to defer all or a portion of his Award at any time
prior to the date the election becomes effective. Any such revocation or change
shall be made in a form and manner determined by the Committee.
4. Normal Retirement Benefit
A Participant who retires from employment with the Affiliated Companies
on his Normal Retirement Date shall receive a benefit Equivalent to the sum of
the amounts set forth in the Participant's Deferral Agreement(s) plus accrued
interest. The benefit shall be paid in 180 equal monthly installments commencing
on the first day of the month next following the Participant's retirement date,
but in no event prior to the first day of the month next following the
Participant's last Deferral Date, unless the Participant elects to receive his
benefit in accordance with Section 9 of this Program.
5. Delayed Retirement Benefit
A Participant who retires or otherwise terminates his employment with
the Affiliated Companies after his Normal Retirement Date shall receive a
benefit equal to the benefit he would have received under Section 4 had his
benefit commenced on his Normal Retirement Date, increased by 5/6 of 1% for each
complete calendar month between his Normal Retirement Date and the date his
benefit commences. The benefit shall be paid in 180 equal monthly installments
commencing on the first day of the month next following the Participant's
termination of employment, but in no event prior to the first day of the month
next following the Participant's last Deferral Date, unless the Participant
elects to receive his benefit in accordance with Section 9 of this Program.
6. Early Retirement Benefit
A Participant who has attained age 55, has completed 120 months of
Service and terminates his employment with the Affiliated Companies prior to his
Normal Retirement Date shall receive a benefit commencing on the first day of
the month following his Normal Retirement Date but in no event prior to the
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first day of the month following the Participant's last Deferral Date. The
Participant's benefit shall be equal to the benefit the Participant would have
received under Section 4 had he terminated his employment on his Normal
Retirement Date. However, the Participant may elect a lump sum under Section 9
or may elect, in a time and manner determined by the Committee, to have payment
of his benefit commence on the first day of any month preceding his Normal
Retirement Date, and following the latest of (i) his termination of employment,
(ii) 24 months after his earliest Deferral Date and (iii) the first of the month
following his last Deferral Date, in which event the amount of his benefit shall
be reduced by 5/6 of 1% for each complete calendar month between the date his
benefit commences and the first day of the month next following his Normal
Retirement Date. However, in no event shall the monthly benefit be less than an
amount Equivalent to the Participant's deferrals with accrued interest. Benefits
under this Section 6 shall be paid in 180 equal monthly installments, unless the
Participant elects to receive his benefit in accordance with Section 9 of this
Program.
7. Separation Benefit
7.1 A Participant who terminates his employment with the Affiliated
Companies prior to being eligible for a benefit under Sections 4 or 6, but after
having completed 120 months of Service, shall receive a monthly benefit
commencing on the first day of the month next following his Normal Retirement
Date; provided, however, that a Participant shall not be eligible for a benefit
under this Section 7.1 if the Participant terminates employment without the
consent of the Affiliated Companies. The benefit shall be equal to the monthly
benefit the Participant would have received under Section 4 had he terminated
employment on his Normal Retirement Date. However, the Participant may elect a
lump sum pursuant to Section 9, or may elect, in a time and manner determined by
the Committee, to have monthly benefits commence on the first day of any month,
prior to his Normal Retirement Date, and following the latest of (i) his
termination of employment with the Affiliated Companies, (ii) his 55th birthday
or (iii) the last day of the month prior to the 2nd anniversary of his earliest
Deferral Date, in which event the amount of his benefit shall be reduced by 5/6
of 1% for each complete calendar month between the date his benefit commences
and the first day of the month next following his Normal Retirement Date.
However, in no event shall the monthly benefit be less than an amount Equivalent
to the Participant's deferred amounts with accrued interest. Monthly benefits
under this Section 7.1 shall be paid in 180 equal monthly installments.
7.2 A Participant who terminates his employment with the Affiliated
Companies, other than on account of death, and is not eligible for a benefit
under Section 7.1 shall receive a single sum payment equal to the sum of the
amounts the Participant deferred under his Deferral Agreements plus accrued
interest. However, if the Participant terminates his employment with the
Affiliated Companies on account of a disability within the meaning of Section
8.1, he shall receive a benefit under this Section 7.2 only if the Participant
elects, in a time and manner determined by the Committee, to receive such
benefit and to cease accruing Service under Section 8.1. The single sum payment
shall be made on the first day of the month next following the Participant's
termination of employment, or as soon as practicable thereafter. The Participant
shall not receive any other benefits under this Program.
8. Disability
8.1 A Participant who, in the sole judgment of the Committee, becomes
totally and permanently disabled prior to his termination of employment with the
Affiliated Companies, and does not make an election under Section 7.2 to receive
a benefit under such Section, shall continue to accrue Service during his period
of disability as if he remained an active employee. Such a Participant shall be
eligible to receive a benefit under Sections 4, 6 or 7.1 when he meets the age
and Service requirements for such a benefit.
8.2 The Committee may, in its sole discretion, require a Participant to
submit to a medical examination by a physician approved by the Committee, or
present other evidence satisfactory to the Committee, to establish the existence
or continuance of his disability. The Committee may require such medical
examination or other evidence not more than once per year. A Participant who
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refuses to submit to any required medical examination or to present any other
required evidence under this Section 8.2 shall not be disabled for purposes of
this Program and shall only be eligible to receive the benefit he would have
received under the Program had he terminated his employment with the Affiliated
Companies immediately prior to the date of such request.
9. Single Sum Payments
A Participant who is eligible to receive a benefit under Sections 4, 5,
6, 7.1 or 8.1 of the Program but whose benefits hereunder have not yet commenced
may, with the consent of the Administrator, elect, in a time and manner
determined by the Administrator, to receive his benefit in the form of a single
sum. The single sum shall be in the amount of the Participant's deferred amounts
plus accrued interest, provided that, in the case of a Participant then eligible
for immediate commencement of monthly benefits, such single sum shall not be
less than an amount Equivalent to the value of such monthly benefits. Such
single sum shall be paid on the first day of the fourth month following the
later of (i) the Participant's termination of employment with the Affiliated
Companies, or (ii) the date such election is received by the Committee.
Notwithstanding any other provision hereof, such amount shall be determined as
of a date three months prior to the date of payment and shall not accrue
interest beyond such earlier date.
10. Hardship Withdrawal
10.1 While employed by the Affiliated Companies, a Participant may, in
the event of a severe financial hardship, request a withdrawal of an amount
which does not exceed the single sum amount determined in Section 9. The
withdrawal shall be made in a time and manner determined by the Administrator,
and shall not be for a greater amount than the amount required to meet the
financial hardship, and shall be subject to approval by the Administrator.
10.2 For purposes of this Section 10, financial hardship shall include:
(a) Education of a dependent child where the
Participant can show that without the withdrawal under this
Section 10 the education would be unavailable to the child;
(b) Illness of the Participant or his dependents,
resulting in severe financial hardship to the Participant;
(c) The loss of the Participant's home or it
contents, to the extent not reimbursable by insurance or
otherwise, if such loss results in a severe financial hardship
to the Participant; and
(d) Any other extraordinary circumstances of the
Participant approved by the Committee if such circumstances
would result in a present or impending critical financial need
which the Participant is unable to satisfy with funds
reasonably available from other sources.
10.3 If a Participant makes a withdrawal under this Section 10, any
other benefit which he may be entitled to under this Program on his termination
of employment shall be appropriately adjusted to take into account the amount
the Participant received under this Section 10.
11. Death Benefits
11.1 Except as provided in Section 11.10(b), if a Participant dies
while employed by an Affiliated Company, his beneficiary shall be eligible to
receive a single sum benefit equal to the greatest of:
(a) three times the sum of the amount(s) the
Participant deferred under his Deferral Agreement(s);
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(b) the amounts the Participant deferred under his
Deferral Agreement(s) plus accrued interest; or
(c) an amount Equivalent to the monthly benefit the
Participant could have received under the Program, if any, had
he terminated his employment with the Affiliated Companies on
the day immediately preceding his death and elected to begin
receiving the benefit on the first day of the following month.
The benefit is payable on the first day of the month next
following the date of the Participant's death, and shall be in lieu of all other
benefits payable under this Program, other than any benefit payable under
Section 11.6.
11.2 If a Participant who has terminated his employment with the
Affiliated Companies after becoming eligible for a benefit under Sections 4, 5
or 6, dies prior to the commencement of any benefit under this Program, his
beneficiary shall receive a benefit under Section 11.1
11.3 If a Participant who is totally and permanently disabled under
Section 8.1 dies prior to receiving a benefit under this Program, his
beneficiary shall receive a benefit under Section 11.1
11.4 If a Participant who is eligible for a benefit under Section 7.1
dies prior to receiving a benefit, his beneficiary will receive a benefit based
on the greater of the amounts determined under Sections 11.1(b) and 11.1(c).
11.5 If a Participant dies after commencing to receive a benefit, other
than a benefit under Section 7.2, but prior to receiving all remaining benefits
due, the remaining benefits shall be paid to the Participant's beneficiary or
contingent beneficiary, whichever is applicable.
11.6 In addition to any other benefit payable under this Section 11, in
the case of a Participant (i) who dies while employed by an Affiliated Company
after becoming eligible for benefits under Sections 4, 5, or 6 hereof, or (ii)
who terminates employment while eligible for a benefit under Section 4, 5 or 6
of the Program and then dies, his beneficiary shall be eligible to receive a
benefit of $10,000, payable in a single sum. This benefit shall be payable as
soon as practicable following the presentation to the Administrator, and the
Administrator's examination and approval of, any information or material,
including proof of death of the Participant, the Administrator may request.
Notwithstanding anything to the contrary, a benefit shall not be payable on
account of the death of a Participant who received a single sum benefit under
Sections 12 or 14 of the Program.
11.7 A Participant may, in a time and manner determined by the
Administrator, designate a beneficiary and one or more contingent beneficiaries
(which may include the Participant's estate) to receive any benefits which may
be payable under this Section 11. If the Participant fails to designate a
beneficiary or contingent beneficiary, or if the beneficiary and the contingent
beneficiaries fail to survive the Participant, such benefits shall be paid to
the Participant's estate. The Participant may also designate a remainder
beneficiary to receive any benefits which may be payable under Section 11.9.
11.8 A Participant may revoke or change any designation made under
Section 11.7 in a time and manner determined by the Administrator.
11.9 If, pursuant to Section 11.7, payments commence to a beneficiary
or contingent beneficiary and if such beneficiary or contingent beneficiary dies
prior to receiving all payments due under this Plan, any remaining payments
shall be made to the Participant's remainder beneficiary. If, at the date of
such death, there is no surviving remainder beneficiary, the remaining benefits
hereunder shall be paid to the estate of the beneficiary or contingent
beneficiary previously in receipt of benefits hereunder.
11.10 (a) If any benefits are payable under this Section 11 to an
individual other than the Participant's spouse or child under
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age 21 (or child under age 25 who is a full-time student at an
accredited institution of higher education), the benefit shall
be paid in the form of a single sum.
(b) If benefits become payable to the Participant's
spouse or his child under age 21 (or his child under age 25
who is a full-time student at an accredited institute of
higher education), such benefits (other than benefits under
Section 11.6) shall be payable in 180 monthly installments
Equivalent to the single sum amount determined under Section
11.1 through 11.5 hereof, as applicable. Monthly benefits
shall commence on the first day of the month following the
Participant's death. The Participant may elect, in a time and
manner determined by the Administrator to have any amounts
which may be payable under the Program paid in accordance with
Section 11.10(a).
(c) Notwithstanding anything to the contrary in this
Program, if a Participant's child under age 21 (or child under
age 25 who is a full-time student at an accredited institute
of higher education) is receiving a benefit under this Program
in the form of installment payments, upon his attaining age 21
(or age 25 or ceasing to be a full-time student at an
accredited institute of higher education) he shall receive a
single sum Equivalent to his remaining installments in lieu of
receiving such remaining installments.
12. Special Distribution Rules
12.1 Notwithstanding anything to the contrary in this Program, if (a) a
Participant becomes the owner, director or employee of a competitor of the
Affiliated Companies, (b) his employment is terminated by an Affiliated Company
on account of actions by the Participant which are detrimental to the interests
of any Affiliated Company, or (c) he engages in conduct subsequent to the
termination of his employment with the Affiliated Companies which the Committee
determines to be detrimental to the interests of an Affiliated Company, then the
Committee may, in its sole discretion, pay a Participant a single sum payment
equal to the sum of the amounts the Participant deferred under his Deferral
Agreements plus accrued interest, reduced by an amount Equivalent to any
payments the Participant may already have received under this Program. However,
if the Participant is receiving a benefit under the Program, or could be
receiving an immediate benefit under the Program, the single sum shall not be
less than an amount Equivalent to the remaining monthly benefit the Participant
is, or could be, receiving. The single sum payment shall be made as soon as
practicable following the Participant's becoming an owner, director or employee
of a competitor, his termination of employment or the Committee's determination
of detrimental conduct, as the case may be, and shall be in lieu of all other
benefits which may be payable to the Participant under this Program.
12.2 Notwithstanding anything to the contrary contained herein, the
Corporation may delay payment of a benefit under this Program to any Participant
who is determined to be among the top five most highly paid executives for the
year the benefit under this Program would otherwise be paid; provided, however,
if a Participant's payment is delayed, the benefit to which he is entitled will
not decrease after the date it would otherwise be distributed.
13. Administration
13.1 This Program shall be administered by the Compensation Committee
of the Board. Certain administrative functions, as set forth in this Program,
shall be the responsibility of the Administrator. The Committee shall interpret
the Program, establish regulations to further the purposes of the Program and
take any other action necessary to the proper operation of the Program.
13.2 The Board, in its sole discretion and upon such terms as it may
prescribe, may permit any company or corporation directly or indirectly
controlled by the Corporation to participate in the Program for such periods as
the Committee may determine.
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13.3 The Committee shall provide adequate notice in writing to any
Participant, beneficiary, contingent beneficiary or remainder beneficiary whose
claim for benefits under this Program has been denied, setting forth the
specific reasons for such denial. A reasonable opportunity shall be afforded to
any such Participant, beneficiary, contingent beneficiary or remainder
beneficiary for a full and fair review by the Committee of its decision denying
the claim. The Committee's decision on any such review shall be final and
binding on the Participant, beneficiary, contingent beneficiary, remainder
beneficiary and all other interested persons.
13.4 All acts and decisions of the Committee shall be final and binding
upon all Participants and employees of the Affiliated Companies.
14. Termination and Amendment of the Program
14.1 The Board may, in its sole discretion, terminate this Program and
the related Deferral Agreement(s) at any time. In the event the Program and
related Deferral Agreement(s) are terminated, Participants shall receive a
single sum payment equal to the sum of the amounts they deferred under their
Deferral Agreements plus accrued interest, reduced by an amount Equivalent to
any payments the Participant may already have received under this Program.
However, if the Participant is receiving a benefit under the Program, or could
be receiving an immediate benefit under the Program, the single sum shall not be
less than an amount Equivalent to the monthly benefit the Participant is, or
could be, receiving. The single sum payment shall be made as soon as practicable
following the date the Program is terminated and shall be in lieu of any other
benefit which may be payable to the Participant under this Program.
14.2 The Board, in its sole discretion, may amend this Program and the
related Deferral Agreements in any way on thirty (30) days prior notice to the
Participants. If any amendment to this Program or to the Deferral Agreements
shall adversely affect the rights of a Participant, the Participant must consent
in writing to such amendment prior to its effective date. If the Participant
does not consent to the amendment, the Program, shall be deemed to be terminated
with respect to the Participant and he shall receive a single sum payment in
accordance with Section 14.1.
14.3 Notwithstanding anything to the contrary in this Section 14, the
Board must act to terminate or amend the Program or the Deferral Agreements in a
uniform and nondiscriminatory manner.
15. Miscellaneous
15.1 The existence of this Program or a Deferral Agreement does not
constitute a contract for continued employment between an Eligible Executive or
a Participant and an Affiliated Company. The Affiliated Companies reserve the
right to modify an Eligible Executive's or Participant's compensation and to
terminate an Eligible Executive or a Participant for any reason and at any time,
notwithstanding the existence of this Program or of a Deferral Agreement. The
Affiliated Companies reserve the right not to grant Awards to Eligible
Executives and Participants for any reason.
15.2 A Participant's rights to benefit payments under the Plan are not
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment or garnishment by creditors of the Participant,
his beneficiary, contingent beneficiaries, remainder beneficiary, heirs or
personal representative.
15.3 Except for Section 16 herein, nothing contained in this Program or
in a Deferral Agreement shall require the Affiliated Companies to segregate any
monies from their general funds, or to create any trusts, or to make any special
deposits for any amounts to be paid to any Participant, beneficiary, contingent
beneficiary or remainder beneficiary. Neither the Participant, his beneficiary,
contingent beneficiaries, remainder beneficiary, heirs or personal
representatives shall have any right, title or interest in or to any funds of
the Affiliated Companies on account of this Program or on account of having
completed a Deferral Agreement.
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15.4 All payments under this Program shall be net of an amount
sufficient to satisfy any federal, state or local withholding tax requirements.
15.5 Prior to paying any benefit under this Program, the Committee may
require the Participant, beneficiary, contingent beneficiary or remainder
beneficiary to provide such information or material as the Committee, in its
sole discretion, shall deem necessary for it to make any determination it may be
required to make under this Program. The Committee may withhold payment of any
benefit under this Program until it receives all such information and material
and is reasonably satisfied of its correctness and genuineness.
15.6 Each Participant shall have the status of a general unsecured
creditor of the Affiliated Companies, and this Program constitutes a mere
promise by the Affiliated Companies to make benefit payments in the future.
15.7 The Program is intended to be unfunded for tax purposes and for
purposes of Title I of ERISA.
15.8 The masculine pronoun shall mean the feminine pronoun and all
singular shall include the plural wherever appropriate.
15.9 The terms of this Program and any Deferral Agreement shall be
governed by the laws of the Commonwealth of Virginia.
15.10 The invalidity or unenforceability of any provision of this
Program or of a Deferral Agreement shall in no way affect the validity or
enforceability of any other provision.
16. Change of Control
16.1 If a Change of Control has occurred, the Committee shall cause the
Corporation to contribute to the Trust, within 7 days of such Change of Control,
a lump sum payment equal to the aggregate value of the amount each Participant
would be eligible to receive (determined under Section 16.2 below) as of a
Valuation Date coinciding with or next preceding the date of Change of Control
to the extent such amounts are not already in the Trust. The aggregate value of
the amount of the lump sum to be contributed to the Trust pursuant to this
Section 16 shall be determined by the Corporation's accountants after
consultation with the entity then maintaining the Program's records. Thereafter,
the Corporation's accountants shall annually determine for each Participant not
receiving a lump sum payment pursuant to subsection 16.2 below the amount which
would be payable under such subsection were a Change of Control to occur at the
date of such determination. To the extent that the value of the assets held in
the Trust relating to this Program do not equal the amount described in the
preceding sentence, at the time of the valuation, as determined by the
Corporation's accountants, the Corporation shall make a lump sum contribution to
the Trust equal to the difference.
16.2 In the event a Change of Control has occurred, the trustee of the
Trust shall, within 45 days of such Change of Control, pay to each Participant
not making an election under 16.3 below, a lump sum payment equal to the amount
the Participant would have been entitled to receive determined under Section 6
had he retired early and selected a lump sum payment. The amount of each
Participant's lump sum payment shall be determined by the Corporation's
accountants after consultation with the entity then maintaining the Program's
records.
16.3 Each Participant may elect in a time and manner determined by the
Committee, but in no event later than December 31, 1996, or the occurrence of a
Change of Control, if earlier, to have amounts and benefits determined and
payable under the terms of the Program as if a Change of Control had not
occurred. New Participants in the Program may elect in a time and manner
determined by the Committee, but in no event later than 90 days after becoming a
Participant, to have amounts and benefits determined and payable under the terms
of the Program as if a Change of Control had not occurred. A Participant who has
made an election, as set forth in the two preceding sentences, may, at any time
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and from time to time, change that election; provided, however, a change of
election that is made within one year of a Change of Control shall be invalid.
16.4 Notwithstanding anything in this Program to the contrary, each
Participant who has made an election under 16.3 above may elect within 90 days
following a Change of Control, in a time and manner determined by the Committee,
to receive a lump sum payment calculated under the provisions of 16.2 above,
except that such calculated amount shall be reduced by 5% and such reduction
shall be irrevocably forfeited to the Corporation by the Participant.
Furthermore, as a result of such election, the Participant shall no longer be
eligible to participate or otherwise benefit from the Program. Payments under
this subsection 16.4 shall be made not later than 7 days following receipt by
the Corporation of the Participant's election. The Committee shall, no later
than 7 days after a Change of Control has occurred, give written notification to
each Participant eligible to make an election under this subsection 16.4, that a
Change of Control has occurred and informing such Participant of the
availability of the election.
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