Exhibit 10.16
DEFERRED COMPENSATION PROGRAM
FOR EXECUTIVES OF CSX CORPORATION
AND AFFILIATED COMPANIES
As Amended and Restated January 1, 1998
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" means the Corporation. The duties of the
administrator shall be performed by a person or persons designated by the Chief
Executive Officer of the Corporation to perform such duties.
2.2 "Affiliated Company" means the Corporation and any company or
corporation directly or indirectly controlled by the Corporation which the
Compensation Committee designates for participation in this Program in
accordance with Section 15.2.
2.3 "Award" means, 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 "Benefits Trust Committee" means the committee created pursuant to
the CSX Corporation and Affiliated Companies Benefits Assurance Trust Agreement.
2.5 "Board" means the Board of Directors of the Corporation.
2.6 "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 2.6; 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.
2.7 "Compensation Committee" means the Compensation Committee of the
Board.
2.8 "Corporation" means CSX Corporation, a Virginia corporation, and any
successor thereto by merger, purchase or otherwise.
2.9 "Corporation's Accountant's" means the independent accountant or
accountants engaged by the Corporation and, if selected or changed following a
Change of Control, approved by the Benefits Trust Committee.
2.10 "Deferral Agreement" means a completed agreement, including any
attachments and appendices thereto, in the form determined by the Administrator,
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.
2.11 "Deferral Date" means 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.
2.12 "Divisive Transaction" means a transaction in which the
Participant's employer ceases to be a Subsidiary or there is a sale of
substantially all of the assets of the Subsidiary.
2.13 "Eligible Executive" means, 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 Administrator, provided, however,
that the Administrator, in its sole discretion, may designate any other employee
of an Affiliated Company as an Eligible Executive for such year. Notwithstanding
the preceding, following a Change of Control, such action by the Administrator
is subject to the approval of the Benefits Trust Committee.
2.14 "Equivalent" means 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.
2.15 "MICP" means the Affiliated Companies' Management Incentive
Compensation Plans, as from time to time in effect.
2.16 "Normal Retirement Date" means the later of:
(a) the last day of the month in which a Participant's
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 a Participant's 65th
birthday occurs.
2.17 "Participant" means an Eligible Executive who elects to defer a
portion of his Award in accordance with the provisions of Section 3.
2.18 "Program" means this Deferred Compensation Program for Executives
of CSX Corporation and Affiliated Companies.
2.19 "Service" means 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 Pension Plan.
2.20 "Subsidiary" means a corporation more than 50% of the voting shares
of which are owned directly or indirectly by the Corporation.
2.21 "Trust" means the CSX Corporation and Affiliated Companies Benefits
Assurance Trust. Except as provided in Section 18, the Corporation is not
obligated to make any contribution to the Trust.
2.22 "Valuation Date" means 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. Following a Change of Control,
the Benefits Trust Committee shall have final approval over any date selected
other than the last day of each calendar year.
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
Agreement with the Administrator 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 Compensation 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 Administrator.
3.6 Notwithstanding the preceding, following a Change of Control, any
discretionary decisions made by the Compensation Committee or the Administrator
with respect to this Section 3 shall be subject to the approval of the Benefits
Trust 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
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 Administrator, 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 Administrator, 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. For
purposes of this program and particularly this Section 7, if a Participant's
employer is involved in a Divisive Transaction, the Participant will be deemed
to have terminated his employment with an Affiliated Company with the consent of
the Affiliated Company.
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 Administrator, 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 Administrator,
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, provided that
following a Change of Control, any decisions of the Administrator pursuant to
this Section 8.1 is subject to the approval of the Benefits Trust Committee.
8.2 The Administrator may, in its sole discretion, require a Participant
to submit to a medical examination by a physician approved by the Administrator,
or present other evidence satisfactory to the Administrator, to establish the
existence or continuance of his disability. The Administrator may require such
medical examination or other evidence not more than once per year. A Participant
who 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.
Notwithstanding the preceding, following a Change of Control, any decision by
the Administrator made pursuant to this Section 8.2 is subject to approval by
the Benefits Trust Committee.
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 Administrator.
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. Furthermore, following a Change of Control ,
any decision of the Administrator made pursuant to this Section 8.2 is subject
to approval by the Benefits Trust Committee.
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 Administrator 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.
10.4 Following a Change of Control , any decision by the Administrator
made pursuant to this Section 10 is subject to the approval of the Benefits
Trust Committee.
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);
(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 16 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 do not 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 Program, 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 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
Administrator determines to be detrimental to the interests of an Affiliated
Company, then the Administrator 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 Administrator'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.
12.3 Notwithstanding the preceding, following a Change of Control, the
Administrator's authority to make decisions under this Section 12 is subject to
the approval of the Benefits Trust Committee.
13. Benefit Determinations Following a Change of Control
13.1 Following a Change of Control, final benefit determinations for
Participants, their beneficiaries, heirs and assigns and decisions regarding
benefits under this Program shall rest with the Benefits Trust Committee or its
delegate in its sole and absolute discretion.
14. Funding
14.1 To the extent reflected by resolutions of the applicable boards of
directors, obligations for benefits under this Program shall be joint and
several.
14.2 The obligations of the Corporation and any of its affiliated
corporations and the benefit due any Participant, surviving spouse or
beneficiary hereunder shall be reduced by any amount received in regard thereto
under the Benefits Assurance Trust or any similar trust or other vehicle.
15.. Administration
15.1 This Program shall be administered by the Corporation. Certain
administrative functions, as set forth in this Program, shall be the
responsibility of the Administrator. The Administrator 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. Following a
Change of Control, the Benefits Trust Committee may remove and/or replace the
Administrator.
15.2 Prior to a Change of Control, the Compensation Committee, 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 it may determine. Following a
Change of Control, no entity shall become or cease to be a participating company
without the consent of the Benefits Trust Committee.
15.3 The Administrator 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 Administrator of its decision
denying the claim. Prior to a Change of Control, the Administrator's decision on
any such review shall be final and binding on the Participant, beneficiary,
contingent beneficiary, remainder beneficiary and all other interested persons.
All acts and decisions of the Administrator shall be final and binding upon all
Participants and employees of the Affiliated Companies.
15.4 Following a Change of Control, all benefit determinations for
Participants, their beneficiaries, heirs and assigns and decisions regarding
benefit claims under this Program shall rest with the Benefits Trust Committee
or its delegate in its sole and absolute discretion.
16. Termination and Amendment of the Program
16.1 Prior to a Change of Control, the Board may, in its sole discretion,
terminate this Program and the related Deferral Agreement(s) at any time.
Following a Change of Control, this Program may not be terminated without the
approval of the Benefits Trust Committee. 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.
16.2 Prior to a Change of Control, 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. Following a Change of Control, all
amendments are subject to the approval of the Benefits Trust Committee. 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
16.1.
16.3 Notwithstanding anything to the contrary in this Section 16, prior
to a Change of Control, the Board must act to terminate or amend the Program or
the Deferral Agreements in a uniform and nondiscriminatory manner. Following a
Change of Control, such actions are subject to the approval of the Benefits
Trust Committee
17. Miscellaneous
17.1 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 the employment of 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.
17.2 A Participant's rights to benefit payments under the Program 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.
17.3 Except for Section 18 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.
17.4 All payments under this Program shall be net of an amount
sufficient to satisfy any federal, state or local withholding and payroll tax
requirements.
17.5 Prior to paying any benefit under this Program, the Administrator
may require the Participant, beneficiary, contingent beneficiary or remainder
beneficiary to provide such information or material as the Administrator, in its
sole discretion, shall deem necessary for it to make any determination it may be
required to make under this Program. The Administrator 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.
17.6 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.
17.7 The Program is intended to be unfunded for tax purposes and for
purposes of Title I of ERISA.
17.8 The masculine pronoun shall mean the feminine pronoun and all
singular shall include the plural wherever appropriate.
17.9 The terms of this Program and any Deferral Agreement shall be
governed by the laws of the Commonwealth of Virginia.
17.10 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.
18. Change of Control
18.1 If a Change of Control has occurred, the Corporation shall
contribute to the Trust, within 7 days of such Change of Control, a lump sum
payment equal to the greater of (i) the aggregate value of the amount each
Participant would be eligible to receive (determined under Section 18.2 below)
as of a Valuation Date coinciding with or next preceding the date of Change of
Control or (ii) the amount determined under Section 1(h) of the Trust
attributable to liabilities relating to the Program, 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 18 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 18.2 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.
18.2 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 18.3 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.
18.3 Each Participant may elect in a time and manner determined by the
Administrator, 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 Administrator, 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 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.
18.4 Notwithstanding anything in this Program to the contrary, each
Participant who has made an election under 18.3 above may elect within 90 days
following a Change of Control, in a time and manner determined by the Benefits
Trust Committee, to receive a lump sum payment calculated under the provisions
of 18.2 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 18.4 shall be made not later than 7 days
following receipt by the Corporation of the Participant's election. The Benefits
Trust 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 18.4, that a Change of Control has occurred and
informing such Participant of the availability of the election.