EXHIBIT 10.5
JACOBS ENGINEERING GROUP INC.
1991 EXECUTIVE DEFERRAL PLAN
(EDP)
Effective June 1, 1991
TABLE OF CONTENTS
Page
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Purpose ............................................................... 1
Article 1 - Definitions ................................................... 1
Article 2 - Eligibility ................................................... 4
2.1 Eligibility and Participation ................................. 4
2.2 Enrollment Requirements ....................................... 4
Article 3 - Deferral Commitments .......................................... 4
3.1 Minimum Deferral .............................................. 4
3.2 Maximum Deferral .............................................. 4
3.3 Fixed Deferral Amount ......................................... 4
3.4 Deferral Commitment Period .................................... 5
3.5 Withholding of Deferral Amounts ............................... 5
3.6 FICA Taxes .................................................... 5
3.7 Interest Crediting Prior to Distribution ...................... 5
3.8 Hardship ...................................................... 6
Article 4 - Pre-Retirement Distribution ................................... 6
4.1 Eligibility for Pre-Retirement Distribution ................... 6
4.2 Amount of Distribution ........................................ 6
Article 5 - Retirement Benefit ............................................ 7
5.1 Eligibility for Retirement Benefit ............................ 7
5.2 Retirement Benefit - Payment .................................. 7
5.3 Retirement Benefit - Amount ................................... 7
5.4 Death Prior to Completion of Retirement Benefit ............... 8
Article 6 - Survivor Benefit .............................................. 8
6.1 Eligibility for Survivor's Benefit ............................ 8
6.2 Survivor's Benefit - Method of Payment ........................ 8
6.3 Survivor's Benefit - Amount ................................... 8
6.4 Suicide ....................................................... 8
Article 7 - Termination Benefit ........................................... 9
7.1 Eligibility for Termination Benefit ........................... 9
7.2 Termination Benefit ........................................... 9
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Page
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Article 8 - Disability .................................................... 9
8.1 Eligibility for Disability Waiver ............................. 9
8.2 Benefits ...................................................... 10
8.3 Long-Term Disability - Termination ............................ 10
Article 9 - Beneficiary ................................................... 10
9.1 Beneficiary ................................................... 10
9.2 Beneficiary Designation; Change ............................... 10
9.3 Acknowledgment ................................................ 10
9.4 No Beneficiary Designation .................................... 10
9.5 Doubt as to Beneficiary ....................................... 10
9.6 Discharge of Obligations ...................................... 10
Article 10 - Leave of Absence .............................................. 11
10.1 Authorized Leave of Absence ................................... 11
Article 11 - Employer/Participant Liability ................................ 11
11.1 General Assets ................................................ 11
11.2 Employer's Liability .......................................... 11
11.3 Limitation of Obligation ...................................... 11
11.4 Participant Cooperation ....................................... 11
11.5 Unsecured General Creditor .................................... 11
Article 12 - No Guarantee of Employment .................................... 12
12.1 No Guarantee of Employment .................................... 12
Article 13 - Termination, Amendment or Modification of the Plan ............ 12
13.1 Termination ................................................... 12
13.2 Amendment ..................................................... 12
13.3 Termination of Plan Agreement ................................. 12
13.4 Change in Control ............................................. 12
13.5 Termination, Modification or Amendment Following
Change in Control ............................................ 14
13.6 Legal Fees To Enforce Rights After Change in Control .......... 14
13.7 Vesting ....................................................... 15
Article 14 - Other Benefits and Agreements ................................. 15
14.1 Coordination with Other Benefits .............................. 15
Article 15 - Restrictions on Alienation of Benefits ........................ 15
15.1 Nonassignability .............................................. 15
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Page
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Article 16 - Administration of the Plan .................................... 15
16.1 Committee Administration ...................................... 15
16.2 Committee Authority ........................................... 15
16.3 Committee Indemnity ........................................... 15
16.4 Employer's Obligations to the Committee ....................... 16
16.5 Committee Discretion in Payment Schedule ...................... 16
Article 17 - Claims Procedures ............................................. 16
17.1 Presentation of Claim ......................................... 16
17.2 Notification of Decision ...................................... 16
17.3 Review of a Denied Claim ...................................... 17
17.4 Decision on Review ............................................ 17
Article 18 - Trust ......................................................... 17
18.1 Establishment of the Trust .................................... 17
18.2 Interrelationship of the Plan and the Trust ................... 17
Article 19 - Miscellaneous ................................................. 18
19.1 Notice ........................................................ 18
19.2 Successors .................................................... 18
19.3 Spouse's Interest ............................................. 18
19.4 Governing Law ................................................. 18
19.5 Pronouns ...................................................... 18
19.6 Headings ...................................................... 18
19.7 Validity ...................................................... 18
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EXECUTIVE DEFERRAL PLAN
OF
JACOBS ENGINEERING GROUP INC.
Purpose
The purpose of this plan is to provide specified benefits to a select group of
key employees who contribute materially to the continued growth, development and
future business success of JACOBS ENGINEERING GROUP INC. and its subsidiaries.
Article 1
Definitions
For purposes hereof, unless otherwise clearly apparent from the context, the
following phrases or terms shall have the following indicated meanings:
1.1 "Account Balance" shall mean the sum of (i) the Deferral Amount and (ii)
interest credited in accordance with all the applicable interest crediting
provisions of this Plan, less all distributions made in accordance with the
Plan.
1.2 "Annual Bonus" shall mean any compensation paid under the Employer's
Incentive Bonus Plan.
1.3 "Base Annual Salary" shall mean the annual compensation that is to be paid
to a Participant for each Plan Year, determined as of the first day of that
year, excluding bonuses, commissions, overtime and non-monetary awards for
employment services to the Employer.
1.4 "Beneficiary" shall mean the person or persons, or the estate of a
Participant, designated in accordance with Article 9, who is entitled to
receive benefits under this Plan upon the death of a Participant.
1.5 "Beneficiary Designation Form" shall mean the form established from time to
time by the Board that a Participant completes, signs and returns to the
Committee to designate one or more Beneficiaries.
1.6 "Board" shall mean the Board of Directors of the Company.
1.7 "Change in Control" shall have the meaning set forth in Section 13.4.
1.8 "Claimant" shall have the meaning set forth in Section 17.1.
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1.9 "Committee" shall mean the administrative committee appointed to manage and
administer the Plan in accordance with the provisions of Article 16.
1.10 "Company" shall mean JACOBS ENGINEERING GROUP INC.
1.11 "Continuing Director" shall mean a director described in Section 13.4(b).
1.12 "Deferral Amount" shall be the sum of all of a Participant's Base Annual
Salary deferrals, Annual Bonus deferrals and, if applicable, Directors Fees
deferrals.
1.13 "Deferral Commitment Period" shall mean the period described in Section 3.4
of this Plan.
1.14 "Director" shall mean any member of the Board.
1.15 "Directors Fees" shall mean the annual fees paid by the Company, including
retainer fees and meetings fees, as compensation for serving on the Board.
1.16 "Disability" shall mean a period of disability during which a Participant
qualifies for benefits under the Company's or any of its subsidiaries'
long-term disability program.
1.17 "Election Form" shall mean the form established from time to time by the
Board that a Participant completes, signs and returns to the Committee to
make an election under the Plan.
1.18 "Employee" shall mean any person who is in the regular full-time employment
of an Employer as determined by the personnel policies and practices of the
Employer.
1.19 "Employer" shall mean the Company and any subsidiaries of the Company that
have been selected by the Board to participate in the Plan.
1.20 "Moody's Rate" shall mean the interest rate determined and announced by the
Committee at any time before the commencement of each Plan Year. The
Moody's Rate for a Plan Year shall be the most current monthly "Seasoned
Corporate Bond" rate published by Moody's Investors Service, Inc., or any
successor to that service, available prior to the announcement by the
Committee. For the first Plan Year, the Moody's Rate shall be 9.43%. The
Seasoned Corporate Bond rate is an economic indicator, based on an
arithmetic average of the yields of representative bonds, including
industrials, public utilities, Aaa, A, and Baa bonds, and is calculated as
a monthly average of the composite yield.
1.21 "Participant" shall mean any Employee or Director who (i) is selected to
participate in the Plan, (ii) elects to participate in the Plan, (iii)
signs a Plan Agreement, an Election Form and a Beneficiary Designation
Form, (iv) the signed Plan Agreement, Election Form and Beneficiary
Designation Form are returned to and accepted by the Committee and (v)
neither the Plan nor the Plan Agreement has terminated.
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1.22 "Participation Year" shall mean with respect to any Participant, any Plan
Year in which a Participant is at any time during such year a Participant.
Notwithstanding the previous sentence, "Participation Year" shall not
include any years prior to the first Plan Year in which a Participant
actually has any amount deferred under this Plan.
1.23 "Plan" shall mean the 1991 Executive Deferral Plan of the Employer which is
defined by this instrument and by each Plan Agreement.
1.24 "Plan Agreement" shall mean the form of written agreement which is entered
into by and between the Employer and a Participant. Each Plan Agreement
executed by a Participant shall provide for the entire benefit to which
such Participant is entitled to under the Plan, and the Plan Agreement
bearing the latest date shall govern such entitlement.
1.25 The "Plan Year" shall, for the first Plan Year, begin on June 1, 1991, and
end on December 31, 1991. For each Plan Year thereafter, the Plan Year
shall begin on January 1 of each year and continue through December 31 of
the same year.
1.26 "Pre-Retirement Distribution" shall mean the distribution provided for in
Article 4.
1.27 "Retirement Benefit" shall mean the retirement benefit provided for in
Article 5.
1.28 "Retirement Date" shall be the earlier of the first day of the month in
which the Participant (i) attains the age of sixty-five (65), (ii) is sixty
(60) years of age or older and has completed ten (10) Years of Service, or
(iii) is terminated as a result of a long-term disability under the
Employer's policies and practices.
1.29 "Retirement Distribution Date" shall mean the last day of the month in
which a Participant has both (i) reached or passed his or her Retirement
Date and (ii) has actually ceased being an Employee or Director other than
by death.
1.30 "Survivor's Benefit" shall mean the benefit provided for in Article 6.
1.31 "Termination Benefit" shall mean the termination benefit provided for in
Section 7.2.
1.32 "Termination of Employment" shall mean with respect to an Employee or
Director the cessation of employment or a Director's position, as the case
may be, voluntarily or involuntarily, and, except as provided in Article 8
and Article 10, shall exclude cessation as a result of an authorized leave
of absence, retirement, Disability or death. If a Participant is both an
Employee and a Director, Termination of Employment shall occur only upon
the termination of last held position.
1.33 "Trust" shall mean the trust established pursuant to that certain Trust
Agreement, dated as of June 1, 1991, between the Company and the Trustee
named therein, as amended from time to time.
1.34 "Unforeseeable Financial Emergency" shall have the meaning set forth in
Section 3.8(b).
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1.35 "Years of Service" shall mean the total number of years, that a Participant
is an Employee or a Director, including, without limitation, periods of
Disability and leaves of absence prior to Termination of Employment, as
provided under Article 8 and Article 10.
Article 2
Eligibility
2.1 Eligibility and Participation. The Committee, in its sole discretion, shall
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establish eligibility qualifications for participation in the Plan.
Participation shall be limited to a select group of management and highly
compensated employees of the Employer.
2.2 Enrollment Requirements. As a condition of participation, each Participant
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so selected shall complete, sign and return to the Committee a Plan
Agreement, an Election Form and a Beneficiary Designation Form, and shall
comply with all further conditions that may be established by the
Committee.
Article 3
Deferral Commitments
3.1 Minimum Deferral. A Participant must defer during each Plan Year of the
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Deferral Commitment Period at least one of the following minimum amounts:
(a) In the case of an Employee, $2,000 of his or her Base Annual Salary; or
(b) In the case of a Director who is not an Employee, a percentage that is
anticipated to equal $2,000 of his or her Directors Fees.
A Participant shall not be permitted to defer any portion of his or her
Annual Bonus unless he or she meets one of the minimum Deferral requirements
set forth in this Section. If a Participant first becomes a Participant
after the first day of a Plan Year, or in the case of the first Plan Year of
the Plan itself, at the election of the Employee on the Election Form, the
minimum deferral described in (a) shall be an amount equal to $2,000,
multiplied by a fraction, the numerator of which is the number of complete
months remaining in the Plan Year and the denominator of which is 12.
3.2 Maximum Deferral. For each Plan Year of the Deferral Commitment Period, a
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Participant may defer up to fifty percent (50%) of his or her Base Annual
Salary, fifty percent (50%) of his or her Annual Bonus (except as noted in
Section 3.5) and, if applicable, up to one hundred percent (100%) of his or
her Directors Fees.
3.3 Fixed Deferral Amount. Except as provided in Section 3.5, the annual
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deferral selected by a Participant shall be the same for each Plan Year of
the Deferral Commitment Period. A Base Annual Salary deferral shall be a
fixed dollar amount, and an Annual Bonus or Directors Fees deferral shall
be a fixed percentage of the applicable annual bonus or fee.
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In no event shall an annual deferral amount be decreased during the
Deferral Commitment Period. An annual deferral amount may only be increased
(i) prior to the commencement of the Plan Year to which such annual
deferral amount relates and (ii) with the approval of the Committee.
3.4 Deferral Commitment Period. The "Deferral Commitment Period" for each
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Participant shall be a fixed period of four (4) consecutive Plan Years
commencing with the 1991 Plan Year unless otherwise designated by the
Committee.
3.5 Withholding of Deferral Amounts. The portion of the Base Annual Salary
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elected to be deferred annually shall be withheld in equal amounts over the
Plan Year. The portion of Annual Bonus and Directors Fees being deferred
shall be withheld at the time the Annual Bonus or Directors Fees would
otherwise be paid to the Participant. Notwithstanding the above, for such
first Plan Year, Participants can elect to:
(a) Defer the total Base Annual Salary deferral in that first Plan Year,
(b) Defer an amount equal to the amount in Article 3.5(a) above multiplied
by a fraction, the numerator of which is the number of complete months
remaining in the first Plan Year, and the denominator of which is
twelve (12).
(c) Defer from Base Annual Salary an amount equal to Article 3.5(b),
above. In addition, the difference between Articles 3.5(a) and 3.5(b)
would be deferred from the Annual Bonus for the first Plan Year (in
addition to any Annual Bonus election). For the first Plan Year only,
the total Annual Bonus deferral could exceed fifty percent (50%) by
nature of this provision.
3.6 FICA Taxes. For each Plan Year of the Deferral Commitment Period, the
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Employer shall ratably withhold from that portion of the Participant's Base
Annual Salary and/or Annual Bonus that is not being deferred, the
Participant's share of FICA taxes based on an amount equal to the Base
Annual Salary and/or Annual Bonus before reduction by the amount deferred.
If necessary, the Committee shall reduce the amount deferred in order to
comply with this Section 3.6.
3.7 Interest Crediting Prior to Distribution.
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(a) Except as provided in Section 3.7(b) and Section 3.7(c) below,
interest shall be credited annually on a Participant's Account Balance
at 125% of the Moody's Rate. For purposes of this crediting, all
amounts deferred during a Plan Year shall be treated as having been
deferred as of the beginning of the Plan Year. Such interest crediting
shall be made up to the date of the Pre-Retirement Distribution, the
Retirement Date, the date of the Participant's death or the date of
Termination of Employment, depending on whether the benefit is paid
under Article 4, 5, 6 or 7, respectively.
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(b) In the event of a Termination of Employment, interest shall be
credited in the manner provided in Section 3.7(a), but at the rate
provided for in Section 7.2.
(c) In the event of a Participant's suicide, interest shall be credited in
accordance with Section 6.4.
3.8 Hardship.
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(a) If a Participant experiences an Unforeseeable Financial Emergency as
described in Section 3.8(b) below, the Participant may petition the
Committee to (i) suspend any deferrals required by the Plan Agreement
and/or (ii) receive a distribution from the Plan. Any approval of such
a petition shall be made at the sole discretion of the Committee. If
the Committee approves a distribution, the distribution shall be made
within sixty (60) days of the date of approval. The distribution may
not exceed the Participant's Account Balance as of the last day of the
month prior to the date of the Committee's approval of the petition,
calculated as if such Participant were receiving a Termination Benefit
as of such date.
(b) An "Unforeseeable Financial Emergency" shall mean an unexpected need
for cash arising from an illness, casualty loss, sudden financial
reversal, transfer of place of employment or other such unforeseeable
occurrence, all as determined in the sole discretion of the Committee.
Article 4
Pre-Retirement Distribution
4.1 Eligibility for Pre-Retirement Distribution. A Participant may elect to
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receive a Pre-Retirement Distribution from the Plan to be received in or
after the eighth Participation Year. This election shall be irrevocable and
shall be made on the Election Form, which form is to be delivered to the
Committee prior to the commencement of the Deferral Commitment Period.
4.2 Amount of Distribution. The amount of the Pre-Retirement Distribution shall
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be any amount not to exceed the electing Participant's Account Balance at
the end of the Participation Year prior to the Participation Year selected
on the Election Form for the distribution. The Pre-Retirement Distribution
may not be made prior to the eighth (8th) Participation Year. At the
election of the Participant (on the Election Form), this amount shall be
distributed or, in the case of installment payments, shall start
distribution within ninety (90) days of the January 1st of the
Participation Year selected on the Election Form in one of the following
manners:
(a) In a lump sum equal to the Total Account Balance at the end of the
Participation Year prior to the Participation Year selected on the
Election Form for the distribution; or
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(b) In a lump sum equal to a fixed dollar amount. Such fixed dollar amount
shall be chosen by the Participant on the Election Form. Any remaining
amounts in the Account Balance, after completion of the Pre-Retirement
Distribution, shall remain in the Plan to be paid under the other
provisions of the Plan; or
(c) In four or fewer annual consecutive installments of a fixed dollar
amount. Such fixed dollar amount shall be chosen by the Participant on
the Election Form. Interest on the unpaid Account Balance shall be
credited at 125% of Moody's. Any remaining amounts in the Account
Balance, after completion of the Pre-Retirement Distribution, shall
remain in the Plan to be paid under the other provisions of the Plan;
or
(d) In four or fewer annual consecutive installments so that the total
Account Balance is completely distributed over the elected installment
period. Interest on the unpaid Account Balance shall be credited at
125% of Moody's.
If the amount of Pre-Retirement Distribution elected by the Participant
exceeds the total Account Balance at any time during the Pre-Retirement
Distribution period, only the amount remaining in the Account Balance shall
be distributed to the Participant and the Employer shall have no further
liability under the Plan.
Article 5
Retirement Benefit
5.1 Eligibility for Retirement Benefit. If the Participant ceases to be an
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Employee or a Director for any reason other than death, including without
limitation, retirement or a Termination of Employment after the Retirement
Date, the Employer shall pay the Retirement Benefit to the Participant (or
his or her Beneficiary) as provided in Section 5.2 and Section 5.3 below.
5.2 Retirement Benefit - Method of Payment. The Retirement Benefit may be paid
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in a lump sum, or in installments over a period of 60, 120, or 180 months
at the sole discretion of the Committee. The lump sum payment shall be
made, or installment payments shall commence, within sixty (60) days of the
Retirement Distribution Date and in the case of installment payments, shall
continue until the Retirement Benefit is paid in full.
5.3 Retirement Benefit - Amount. If the Retirement Benefit is paid in a lump
---------------------------
sum, it shall be the retired Participant's Account Balance determined as of
the Retirement Distribution Date. If the Retirement Benefit is paid in
installments, it shall be a constant monthly payment, determined at the
beginning of each Plan Year by monthly amortization of the remaining
Account Balance over the remaining payment period. Interest on the unpaid
balance will be credited for the remaining periods at 125% of the Moody's
Rate established for each of the subsequent Plan Years.
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5.4 Death Prior to Completion of Retirement Benefit. If the Participant dies
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after the Retirement Date and prior to the completion of the Retirement
Benefit payments, the retired Participant's designated Beneficiary will
receive any unpaid Retirement Benefit payments due the Participant, either
at the times they were to be received by the Participant, or in a lump sum,
as determined by the Committee in its sole discretion. If this Section 5.4
applies, a designated Beneficiary shall not be entitled to any benefits
provided for under Article 6.
Article 6
Survivor Benefit
6.1 Eligibility for Survivor's Benefit. If a Participant dies before the
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Retirement Date and before Termination of Employment, the Employer shall
pay the Survivor's Benefit to the deceased Participant's Beneficiary,
provided that all of the following conditions are met:
(a) the Participant's death was determined not to be from a bodily or
mental cause or causes, the information about which was withheld,
knowingly concealed, or falsely provided by the Participant, when
requested by the Employer to furnish evidence of good health; and
(b) proof of the Participant's death is furnished to the Committee in such
form as determined acceptable by the Committee.
6.2 Survivor's Benefit - Method of Payment. The Survivor's Benefit may be paid
--------------------------------------
in a lump sum, or in installments over a period of 60, 120, or 180 months
at the sole discretion of the Committee. The lump sum payment shall be
made, or installment payments shall commence within sixty (60) days of the
date the Participant died and in the case of installment payments, shall
continue until the Survivor's Benefit is paid in full.
6.3 Survivor's Benefit - Amount. If the Survivor's Benefit is paid in a lump
---------------------------
sum, it shall be the retired Participant's Account Balance determined as of
the date the Participant died. If the Survivor's Benefit is paid in
installments, it shall be a constant monthly payment, determined at the
beginning of each Plan Year by monthly amortization of the remaining
Account Balance over the remaining payment period. Interest on the unpaid
balance will be credited for the remaining periods at 125% of the Moody's
Rate established for each of the subsequent Plan Years.
6.4 Suicide. In the event of a Participant's suicide within twenty-four months
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of the first deferral of any Deferral Commitment Period, the Employer shall
be obligated to pay to the Participant's designated Beneficiary the
Participant's portion of the Deferral Amount, without interest, and no
other Survivor's Benefit shall be payable.
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Article 7
Termination Benefit
7.1 Eligibility for Termination Benefit. If a Participant experiences a
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Termination of Employment prior to the Retirement Date, the Employer shall
pay to the Participant the Termination Benefit.
7.2 Termination Benefit. The Termination Benefit is a sum equal to the
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Participant's Account Balance determined as provided in this Section 7.2,
as of the date of Termination of Employment, and shall be paid in a lump
sum within ninety (90) days following the Termination of Employment. In
determining the Account Balance for purposes of this Article 7 only,
interest shall be calculated in the manner provided in Section 3.7(a)
above, but using the applicable interest rate set forth in the following
schedules:
Number of Interest
Participation Years Crediting Rate
------------------- --------------
For Employees:
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Less than 2 years 0
More than 2 but less than 7 Moody's Rate
7 or more 125% of Moody's Rate
For Directors:
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All years 125% of Moody's Rate
In the event a Participant is both an Employee and Director, interest
shall be credited under the Employee schedule.
Article 8
Disability
8.1 Eligibility for Disability Waiver. If a Participant suffers a Disability
---------------------------------
during any Plan Year during the Deferral Commitment Period, the
Participant's annual deferral amount for that Plan Year or any subsequent
Plan Year shall, except as provided in this Section 8.1, be as set forth in
his or her Election Form for the first six (6) months that a Participant
suffers from a Disability, and the withholding of the Participant's monthly
deferral amounts, calculated in accordance with Section 3.5, shall be met
from the Participant's taxable portion of the disability benefit under the
Employer's long-term disability program. Should the monthly deferral amount
exceed one hundred percent (100%) of the taxable disability benefit, the
Participant's deferral obligation shall be excused to the extent of that
excess. If a Participant's Disability exceeds six (6) consecutive months,
the Participant
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shall be excused from making any additional deferrals while he or she is
suffering from a Disability.
8.2 Benefits. A Participant suffering a Disability, but not terminated as a
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result of long-term disability under the Employer's policies and practices,
shall continue to be considered a Participant and shall be eligible for the
benefits provided for in Articles 4, 5, 6 or 7 in accordance with the
provisions of those Articles.
8.3 Long-Term Disability - Termination. For a Participant who is terminated as
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a result of disability under the Employer's policies and practices, the
provisions of Article 5 shall apply for purposes of Account Balance
distribution and interest crediting.
Article 9
Beneficiary
9.1 Beneficiary. Each Participant shall have the right, at any time, to
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designate any person or persons as his or her Beneficiary or Beneficiaries
(both primary as well as contingent) to receive any benefits payable under
the Plan to a Beneficiary upon the death of a Participant.
9.2 Beneficiary Designation; Change. A Participant shall designate his or her
-------------------------------
Beneficiary or Beneficiaries by completing and signing the Beneficiary
Designation Form, and returning it to the Committee. A Participant shall
have the right to change a Beneficiary by completing, signing and otherwise
complying with the terms of the Beneficiary Designation Form.
9.3 Acknowledgment. No designation or change in designation of a Beneficiary
--------------
shall be effective until received, accepted and acknowledged in writing by
the Committee.
9.4 No Beneficiary Designation. If a Participant fails to designate a
--------------------------
Beneficiary as provided above, or if all designated Beneficiaries
predecease the Participant or die prior to complete distribution of the
Participant's benefits, then the Participant's designated Beneficiary shall
be deemed to be his or her surviving spouse. If the Participant has no
surviving spouse, the benefits remaining under the Plan to be paid to a
Beneficiary shall be payable to the executor or personal representative of
the Participant's estate.
9.5 Doubt as to Beneficiary. If the Committee has any doubt as to the proper
-----------------------
Beneficiary to receive payments pursuant to this Plan, they shall have the
right to withhold such payments until this matter is resolved to their
satisfaction.
9.6 Discharge of Obligations. The payment of benefits under the Plan to a
------------------------
Beneficiary shall fully and completely discharge the Employer from all
further obligations under this Plan with respect to the deceased
Participant and all of his or her Beneficiaries.
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Article 10
Leave of Absence
10.1 Authorized Leave of Absence. If a Participant is authorized by the Employer
---------------------------
for any reason to take a paid leave of absence from employment, such
Participant shall continue to be considered employed as an Employee or
Director and shall be required to maintain the level of deferrals set forth
in his or her Plan Agreement in order to keep the Plan Agreement in full
force and effect. If such leave of absence is unpaid, the Participant shall
continue to be considered employed as an Employee or Director and will be
excused from making deferrals until the unpaid leave of absence ends;
provided, however, that if the unpaid leave of absence continues beyond
three consecutive months, the Participant shall be treated as having
incurred a Termination of Employment as of the end of such three month
period and the Participant shall receive the Termination Benefit in
accordance with Article 7. In the case of a conflict between this Article
10 and Article 8, Article 8 shall prevail.
Article 11
Employer/Participant Liability
11.1 General Assets. Amounts payable to a Participant shall be paid from the
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general assets of the Employer exclusively.
11.2 Employer's Liability. The Employer's liability for the payment of
--------------------
benefits shall be defined only by this Plan, as entered into between the
Employer and a Participant.
11.3 Limitation of Obligation. The Employer shall have no obligation to a
------------------------
Participant under the Plan, except as expressly provided for in the Plan.
11.4 Participant Cooperation. The Participant must cooperate with the Employer
-----------------------
and the Committee in furnishing all information requested by the Employer
and/or Committee in order to facilitate the payment of benefits, and the
administration and operations of this Plan. Such information may include
taking a physical examination, or other actions, and such cooperation
shall extend beyond the termination of the Plan Agreement and the
Employee's Participation in the Plan.
11.5 Unsecured General Creditor. Participants, their Beneficiaries and their
--------------------------
permitted heirs, successors and assigns shall have no legal or equitable
rights, interest or claims in any property or assets of the Employer. Any
and all of the Employer's assets shall be, and remain, the general,
unpledged unrestricted assets of the Employer. The Employer's obligations
under the Plan shall be merely that of an unfunded and unsecured promise
of the Employer to pay money in the future.
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Article 12
No Guarantee of Employment
12.1 No Guarantee of Employment. Nothing in this Agreement shall be construed
--------------------------
as altering in any manner the employment relationship with an Employee or
Director, which is hereby acknowledged to be an "at will" employment
relationship that can be terminated at any time for any reason, with or
without cause, unless otherwise expressly provided in a written employment
agreement. All terms and conditions of an Employee's or Director's current
employment shall remain the same. Nothing in this Plan creates, or is
meant to create, any obligation on the part of the Employer to keep an
Employee or Director employed by the Employer or not to terminate an
Employee or Director at any time and for any reason.
Article 13
Termination, Amendment or Modification of the Plan
13.1 Termination. The Company reserves the right to terminate the Plan at any
-----------
time. Upon termination of the Plan, the Participant's Account Balance
shall be paid out in accordance with the benefits that the Participant
would receive if there had occurred a Termination of Employment with
respect to the Participant on the date of Plan termination or, if such
termination occurs after the Retirement Date, the Participant had retired
on the date of Plan termination. Notwithstanding the above, the
termination of the Plan shall not affect any Participant or Beneficiary
who has become entitled to the payment of benefits under the Plan as of
the date of termination.
13.2 Amendment. The Company may, at any time, amend or modify the Plan in whole
---------
or in part, provided, however, that no amendment or modification shall be
effective to decrease or restrict a Participant's Account Balance in
existence at the time the amendment or modification is made, calculated as
if there had occurred a Termination of Employment with respect to such
Participant as of the effective date of the amendment or, if such
amendment occurs after the Retirement Date, the Participant had retired as
of the effective date of the amendment. The amendment or modification of
the Plan shall not affect any Participant or Beneficiary who has become
entitled to the payment of benefits under the Plan as of the date of the
amendment or modification.
13.3 Termination of Plan Agreement. Absent the earlier termination,
-----------------------------
modification or amendment of the Plan, the Plan Agreement of any
Participant shall terminate upon the full payment of the applicable
benefit provided under Articles 4, 5, 6, or 7, as the case may be.
13.4 Change in Control.
-----------------
(a) All benefits accrued under the Plan as of the date of a Change of
Control shall thereafter be paid in accordance with the terms and
conditions of this Plan. However, if at any time during a period of
three years following a Change of Control
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of the Company, the employment of a participant by the Employer is
terminated (i) by the Employer for any reason other than for Cause, or
(ii) by the Participant for just reason, then all benefits, including
all interest at the full 125% of Moody's rate shall apply and not at
the rates applicable in Section 7.2. Such amounts will thereupon be
immediately due and payable in full, less any withholdings required by
law, to such Participant, and within ten business days thereafter the
Employer, or any successor corporation of the Employer shall deliver
payment of such Account Balance to such Participant.
A Participant shall be deemed to have terminated his or her employment
for just reason if he or she resigns voluntarily after a demotion, a
material reduction in his or her authority or responsibility or any
reduction in his or her compensation or after being notified of a
relocation of his or her work place that would materially increase the
commuting distance from his or her then current principal residence.
A Participant shall be deemed to have been terminated by the Employer
for cause only if such participant has been terminated by reason of (i)
a willful failure by such Participant to substantially perform his or
her duties other than a failure resulting from the Participant's
incapacity due to physical or mental illness, or (ii) a willful act by
the Participant that constitutes gross misconduct and is materially
injurious to the Employer. No act or failure to act by a Participant
shall be considered "willful" unless committed without good faith and
without a reasonable belief that the act of omission was in the best
interests of the Employer.
(b) As used in this Plan, "Change of Control" means the occurrence of any
of the following events:
(i) Any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, hereinafter "Person")
becomes the beneficial owner, directly or indirectly, of
securities of the Company representing twenty-five percent
(25%) or more of the combined voting power of the Company's
then outstanding securities ordinarily (and apart from rights
accruing under special circumstances) having the right to vote
at elections of directors;
(ii) A change in the composition of the Board as a result of which
fewer than two-thirds (2/3rds) of the incumbent directors are
Continuing Directors; or
(iii) A change of control that would be required to be reported in a
proxy statement pursuant to Item 5(f) of Schedule 14A of
Regulation 14A under the Securities Exchange Act of 1934.
An individual shall be considered a "Continuing Director" on a
particular date if he or she either (i) had been a member of the
Board twenty-four (24) months prior to such date or (ii) was elected,
or nominated for election, to the Board with the affirmative votes of
at least a majority of the members of the Board twenty-four
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(24) months prior to such date and who were still in office at
the time of the election or nomination.
13.5 Termination, Modification or Amendment Following Change in Control.
------------------------------------------------------------------
Following a Change in Control, neither the Company, any subsidiary of the
Company nor any corporation, trust or other Person that succeeds to all or
any substantial portion of the assets of the Company shall have the right
to terminate, modify, or amend a Plan Agreement in effect prior to such
Change in Control, and all benefits under such Plan Agreement shall
thereafter be paid in accordance with the terms of such Plan Agreement as
in effect immediately prior to such Change in Control. Any provision of
this Plan to the contrary shall be construed in accordance with this
Section 13.5.
13.6 Legal Fees To Enforce Rights After Change in Control. The Company is aware
----------------------------------------------------
that upon the occurrence of a Change in Control, the Board (which might
then be composed of new members) or a shareholder of the Company or of any
successor corporation might then cause or attempt to cause the Company or
such successor to refuse to comply with its obligations under the Plan and
might cause or attempt to cause the Company to institute, or may
institute, litigation seeking to deny Participants the benefits intended
under the Plan. In these circumstances, the purpose of the Plan could be
frustrated. It is the intent of the Company that Participants not be
required to incur the expenses associated with the enforcement of their
rights under the Plan by litigation or other legal action, because the
cost and expense thereof would substantially detract from the benefits
intended to be extended to Participants hereunder, and that Participants
not be bound to negotiate any settlement of their rights under the Plan
under threat of incurring such expenses. Accordingly, if, following a
Change in Control, it should appear to any Participant that the Company
has failed to comply with any of its obligations under the Plan or any
agreement thereunder or, if the Company or any other Person takes any
action to declare the Plan or any agreement hereunder void or
unenforceable or institutes any litigation or other legal action designed
to deny, diminish or to recover from any Participant the benefits intended
to be provided to each Participant under the Plan, and such Participant
has substantially complied with all of his or her obligations under the
Plan and any such agreement, then the Company irrevocably authorizes such
Participant from time to time to retain counsel of his or her choice at
the expense of the Company to represent such Participant in connection
with the initiation or defense of any litigation or other legal action,
whether by or against the Company or any director, officer, shareholder or
other person affiliated with the Company or any successor thereto in any
jurisdiction. Notwithstanding any existing or prior attorney-client
relationship between the Company and such counsel, the Company irrevocably
consents to each Participant's entering into an attorney-client
relationship with such counsel, and in that connection the Company and
each Participant agree that a confidential relationship shall exist
between each such Participant and his counsel. The Company shall pay or
reimburse each Participant for all reasonable fees and expenses of counsel
selected by such Participant from time to time on a regular, periodic
basis from presentation of a statement or statements prepared by such
counsel in accordance with its customary practices up to a maximum
aggregate amount of $500,000.
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13.7 Vesting. Notwithstanding anything that may be construed to the contrary in
-------
this Plan, a Participant shall at all times be 100% vested in his or her
Deferral Amount.
Article 14
Other Benefits and Agreements
14.1 Coordination with Other Benefits. The benefits provided for a Participant
--------------------------------
and Participant's Beneficiary under the Plan are in addition to any other
benefits available to such Participant under any other plan or program for
employees of the Employer. The Plan shall supplement and shall not
supersede, modify or amend any other such plan or program except as may
otherwise be expressly provided.
Article 15
Restrictions on Alienation of Benefits
15.1 Nonassignability. Neither a Participant nor any other person shall have
----------------
any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate or convey in advance of
actual receipt, the amounts if any, payable hereunder, or any part
thereof. No part of the amounts payable shall, prior to actual payment, be
subject to any claims of creditors and, in particular, they shall not be
subject to attachment, garnishment, seizure or sequestration by any
creditor for the payment of any debts, judgments, obligations, alimony or
separate maintenance owed by a Participant.
Article 16
Administration of the Plan
16.1 Committee Administration. The general administration of this Plan, as well
------------------------
as construction and interpretation thereof, shall be the responsibility of
the Committee, the number of members of which shall be designated and
appointed from time to time by, and shall serve at the pleasure of the
Board.
16.2 Committee Authority. Subject to the Plan, the Committee shall from time to
-------------------
time establish rules, forms and procedures for the administration of the
Plan. Except as otherwise expressly provided, the Committee shall have the
exclusive right to interpret the Plan and to decide any and all matters
arising thereunder. The Committee's decisions shall be conclusive and
binding upon all persons having or claiming to have any right or interest
under the Plan.
16.3 Committee Indemnity. No member of the Committee shall be liable for any
-------------------
act or omission of any other member of the Committee, nor for any act or
omission on his own part, excepting his or her own willful misconduct. The
Employer shall indemnify and save harmless each member of the Committee
against any and all expenses and liabilities
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arising out of his or her membership on the Committee, with the exception
of expenses and liabilities arising out of his or her own willful
misconduct.
16.4 Employer's Obligations to the Committee. To enable the Committee to
---------------------------------------
perform its functions, each Employer shall supply full and timely
information to the Committee on all matters relating to the compensation
of all Participants, their retirement, death, Disability or Termination of
Employment, and such other pertinent facts as the Committee may require.
16.5 Committee Discretion in Payment Schedule. The Committee shall also have
----------------------------------------
the power, at its sole discretion, to change the manner and timing of
payments to be made to a Participant or Participant's Beneficiary from
that set forth in the Participant's Plan Agreement, if requested to do so
by such Participant or Beneficiary.
Article 17
Claims Procedures
17.1 Presentation of Claim. Any Participant or Beneficiary of a deceased
---------------------
Participant (such Participant or Beneficiary being referred to below as a
"Claimant") may deliver to the Committee a written claim for a
determination with respect to the amounts (i) credited to (or deducted
from) such Claimant's Participant's Account Balance, or (ii) distributable
to such Claimant from the Plan. If such a claim relates to the contents of
a notice received by the Claimant, the claim must be made within 60 days
after such notice was received by the Claimant. The claim must state with
particularity the determination desired by the Claimant.
17.2 Notification of Decision. The Committee shall consider a Claimant's claim
------------------------
within a reasonable time, and shall notify the Claimant in writing:
(a) that the Claimant's requested determination has been made, and that
the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in whole or in
part, to the Claimant's requested determination, and such notice
must set forth in a manner calculated to be understood by the
Claimant:
(i) the specific reason(s) for the denial of the claim, or any
part of it;
(ii) specific reference(s) to pertinent provisions of the Plan
upon which such denial was based;
(iii) a description of any additional material or information
necessary for the Claimant to perfect the claim, and an
explanation of why such material or information is necessary;
and
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(iv) an explanation of the claim review procedure set forth in
Section 17.3.
17.3 Review of a Denied Claim. Within sixty (60) days after receiving a notice
------------------------
from the Committee that a claim has been denied, in whole or in part, a
Claimant (or the Claimant's duly authorized representative) may file with
the Committee a written request for a review of the denial of the claim.
Thereafter, but not later than thirty (30) days after the review procedure
began, the Claimant (or the Claimant's duly authorized representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole discretion,
may grant.
17.4 Decision on Review. The Committee shall render its decision on review
------------------
promptly, and not later than sixty (60) days after the filing of a written
request for review of the denial, unless a hearing is held or other
special circumstances require additional time, in which case the
Committee's decision must be rendered within 120 days after such date.
Such decision must be written in a manner calculated to be understood by
the Claimant, and it must contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon which the
decision was based; and
(c) such other matters as the Committee deems relevant.
Article 18
Trust
18.1 Establishment of the Trust. The Company shall establish the Trust. The
--------------------------
Employer shall at least annually transfer over to the Trust such assets as
the Committee determines, in its sole discretion, are necessary to provide
for the Employer's future liabilities created with respect to the Deferral
Amounts and interest credits for that year.
18.2 Interrelationship of the Plan and the Trust. The provisions of the Plan
-------------------------------------------
and the Plan Agreement shall govern the rights of a Participant to receive
distributions pursuant to the Plan. The provisions of the Trust shall
govern the rights of the Employer, Participant and the creditors of the
Employer to the assets transferred to the Trust. The Employer shall at all
times remain liable to carry out its obligations under the Plan. The
Employer's obligations under the Plan may be satisfied with Trust assets
distributed pursuant to the terms of the Trust.
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Article 19
Miscellaneous
19.1 Notice. Any notice given under the Plan shall be in writing and shall be
------
mailed to:
JACOBS ENGINEERING GROUP INC.
Employee Benefits
251 South Lake Avenue
Pasadena, California 91101
19.2 Successors. The Plan shall be binding upon the Employer and its respective
----------
successors or assigns, and upon a Participant, the Participant's
Beneficiaries and the Participant's permitted assigns, heirs, executors
and administrators.
19.3 Spouse's Interest. The interest in the benefits hereunder of a spouse of a
-----------------
Participant who has predeceased the Participant shall automatically pass
to the Participant and shall not be transferable by such spouse in any
manner including but not limited to such spouse's will, nor shall such
interest pass under the laws of intestate succession.
19.4 Governing Law. The Plan and Plan Agreement shall be governed by and
-------------
construed under the laws of the State of California, as in effect at the
time of their adoptions and executions, respectively.
19.5 Pronouns. Masculine pronouns wherever used shall include feminine
--------
pronouns and the singular shall include the plural.
19.6 Headings. The headings of the articles, sections and paragraphs of this
--------
Plan are for convenience only and shall not control or affect the meaning
or construction of any of its provisions.
19.7 Validity. In the event any provision of this Plan shall be illegal or
--------
invalid for any reason, the illegality or invalidity of that provision
shall not affect the remaining parts hereof, but this Plan shall be
construed and enforced as if such illegal and invalid provision had never
been inserted herein.
IN WITNESS WHEREOF JACOBS ENGINEERING GROUP INC. has signed this Plan
document this 31st day of May, 1991.
"Company"
JACOBS ENGINEERING GROUP INC.
By: /s/ John W. Prosser Jr.
------------------------------------------------
Title: Senior Vice President Finance and Administration
------------------------------------------------
(Officer of the Company)
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