Exhibit 10 (v)
HOME BENEFICIAL CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
TABLE OF CONTENTS
Page
Section 1. Establishment and Purpose of the Plan........................1
1.1. Establishment................................................1
1.2. Purpose......................................................1
Section 2. Participation by Eligible Executives.........................2
2.1. Eligible Executives on Effective Date........................2
2.2. Eligible Executives after Effective Date.....................2
2.3. Written Proof of Participation Required......................2
Section 3. Accrued Benefit .............................................3
3.1. Accrued Benefit Definition...................................3
3.2. Other Benefit Definitions....................................3
3.3 Cessation of Benefit Accrual after a Change in Control.......3
3.4 Required Reductions..........................................3
Section 4. Benefits.....................................................5
4.1. Normal Retirement Benefit....................................5
4.2. Late Retirement Benefit......................................5
4.3. Early Retirement Benefit.....................................5
4.4. Vested Retirement Benefit....................................5
4.5. Disability Retirement Benefit................................6
4.6. Joint & Spouse Survivor Annuity Option.......................6
4.7. Additional Benefits..........................................6
Section 5. Preretirement Death Benefits................................10
5.1. Preretirement Death Benefit.................................10
5.2. Payment to Beneficiaries....................................10
Section 6. Nature of Participant's Interest in Plan ...................11
6.1. No Right to Assets..........................................11
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6.2. No Right to Transfer Interest...............................11
6.3. No Employment Rights .......................................11
6.4. Withholding and Tax Liabilities.............................11
Section 7. Administration, Interpretation, and Modification of Plan....12
7.1. Plan Administrator..........................................12
7.2. Powers of Committee.........................................12
7.3. Finality of Committee Determinations........................12
7.4. Incapacity..................................................12
7.5. Amendment, Suspension, and Termination......................12
7.6. Power to Delegate Board Authority...........................12
7.7. Headings....................................................12
7.8. Severability................................................12
7.9. Governing Law...............................................12
7.10. Complete Statement of Plan..................................12
7.11. Administration Matters Arising Upon a Change in Control.....13
7.12. Participation by Company Affiliates.........................13
Section 8 Terms Used in the Plan......................................14
8.1. Gender and Number...........................................14
8.2. Definitions.................................................14
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HOME BENEFICIAL CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
EFFECTIVE NOVEMBER 1, 1996
SECTION 1. ESTABLISHMENT AND PURPOSE OF THE PLAN.
1.1. ESTABLISHMENT. Effective November 1, 1996, the Company
established the Plan for the benefit of the Participants.
1.2. PURPOSE. The Plan is an unfunded plan maintained primarily for the
purpose of providing deferred compensation to a select group of management or
highly compensated employees. The Plan provides supplemental retirement income
to Participants in excess of their employer-provided benefits under certain
other plans and arrangements up to the maximum benefit specified in the Plan.
The Plan also provides supplemental survivor's income to Participants'
Beneficiaries, a death benefit, and certain limited medical benefits.
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SECTION 2. PARTICIPATION BY ELIGIBLE EXECUTIVES.
2.1. ELIGIBLE EXECUTIVES ON EFFECTIVE DATE. An employee who is an
Eligible Executive on the Effective Date will become a Participant in the Plan
beginning on the Effective Date.
2.2. ELIGIBLE EXECUTIVES AFTER EFFECTIVE DATE. An employee who first
becomes an Eligible Executive after the Effective Date will become a Participant
in the Plan as of the date he is designated as an Eligible Executive by the
Compensation Committee in its sole discretion.
2.3. WRITTEN PROOF OF PARTICIPATION REQUIRED. No employee will become a
Participant in the Plan unless he and the Company execute a written
participation agreement in the form attached hereto recognizing his
participation in the Plan. The executed copy of the written participation
agreement will constitute an agreement between the Company and the employee that
binds both of them to the terms of the Plan. The written participation agreement
will be binding on their heirs, executors, administrators, successors, and
assigns, both present and future. The executed copy of the written participation
agreement must be signed on the Company's behalf by an authorized officer (other
than the employee) and by the employee on his own behalf.
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SECTION 3. ACCRUED BENEFIT.
3.1. ACCRUED BENEFIT DEFINITION. A Participant's Accrued Benefit under
the Plan is a monthly benefit equal to one twelfth of the Applicable Percentage
of his Final Compensation multiplied by a fraction (not to exceed one) whose
numerator is his Period of Service as an Eligible Executive and a Participant
from November 1, 1996 until his Determination Date and whose denominator is ten,
payable in the applicable Normal Payment Form beginning on his Normal Retirement
Date, and reduced in accordance with Section 3.4. In the event of a Change in
Control, each Participant who is an Eligible Executive as of the date of the
Change in Control will be deemed to have a Period of Service as an Eligible
Executive and a Participant of ten years, thereby causing the fraction described
above to be equal to one.
3.2. OTHER BENEFIT DEFINITIONS.
(a) A Participant's Applicable Percentage is the percentage
that is specified by the Compensation Committee with respect to the
Participant for purposes of the Plan and that is reflected in the
written participation agreement between the Company and the Participant
executed in accordance with Section 2.3.
(b) The Determination Date with respect to a Participant is
the date he ceases to be an Eligible Executive for any reason
(including without limitation, his death) or, if earlier, the date a
Change in Control occurs.
(c) A Participant's Final Compensation is 52 times his Final
Week Compensation. The Final Week Compensation of a Participant is the
gross amount of base salary paid to him for the highest week of the 260
weeks of service closest to the Determination Date, plus the highest
annual bonus for that period divided by 52.
(d) The Normal Payment Form for a Tier One Participant will be
a Joint & Spouse Survivor Annuity at his Benefit Starting Date or, if
earlier, at his death. If the Tier One Participant is not married at
his Benefit Starting Date or, if earlier, at his death, his Normal
Payment Form will be a Single Life Annuity. The Normal Payment Form for
Participant who is not a Tier One Participant will be a Single Life
Annuity.
3.3. CESSATION OF BENEFIT ACCRUAL AFTER A CHANGE IN CONTROL. In the
event a Change in Control occurs, all further benefit accrual under the Plan
shall cease as of the day after the date the Change in Control occurs.
3.4. REQUIRED REDUCTIONS. The monthly installments otherwise included
in a Participant's Accrued Benefit will be reduced as follows:
(a) First, each monthly installment will be reduced by an
amount that is the monthly Actuarial Equivalent (converted to the form
of benefit payable to the Participant under this Plan) payable at the
Plan's Normal Retirement Date of all
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employer-provided benefits accrued through the Participant's
Determination Date which the Participant or, where applicable, his
Beneficiary is receiving under any defined benefit plan (other than
this Plan) maintained by the Company or any Company Affiliate.
Employer-provided benefits provided to an alternate payee under a
qualified domestic relations order will be treated as if they were
provided to the Participant. The reduction required under this Section
3.4(a) shall be applied only based on and only as and when actual
benefit payments under such other defined benefit plans are made.
(b) Second, if the Participant elects to begin receiving
benefits before his Normal Retirement Date, the monthly installment
resulting after the preceding reductions have been made will be further
reduced by 5/12 of one percent for each month during which benefits are
scheduled to be paid before his Normal Retirement Date.
Notwithstanding the foregoing, no such reduction
shall be effected if the Participant becomes Disabled while an Eligible
Executive and is receiving a Disability Retirement Benefit.
(c) Third, after the preceding reductions have been made, the
resulting monthly installment will be further reduced by multiplying it
by the Participant's Vested Percentage. The Vested Percentage is 100
percent in the case of a Participant whose Period of Service is five or
more years, and the Vested Percentage of each Participant whose Period
of Service is less than five years is zero.
Notwithstanding the foregoing, a Participant's Vested
Percentage will be 100 percent if, at or before his Determination Date,
either he dies while an Eligible Executive, he becomes Disabled while
an Eligible Executive or he is an Eligible Executive at the date of a
Change in Control.
A Participant whose Vested Percentage is 100 percent
is sometimes referred to as a Vested Participant.
(d) Fourth, after the preceding reductions have been made,
each monthly installment made during a month for which the Participant
receives benefits under a long- term disability welfare plan maintained
by the Company will be further reduced by the amount of the
employer-provided long-term disability benefit he receives for that
month.
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SECTION 4. BENEFITS
4.1. NORMAL RETIREMENT BENEFIT. A Participant who retires from service
with the Company on his Normal Retirement Date is entitled to a Normal
Retirement Benefit. Unless he elects otherwise, he will receive his Normal
Retirement Benefit in the applicable Normal Payment Form beginning on his Normal
Retirement Date. The monthly installments made under his Normal Retirement
Benefit will be the same as the monthly installments under his Accrued Benefit.
4.2. LATE RETIREMENT BENEFIT. A Participant who retires from service
with the Company after his Normal Retirement Date is entitled to a Late
Retirement Benefit. Unless he elects otherwise, he will receive his Late
Retirement Benefit in the applicable Normal Payment Form beginning on the first
day of the month after he retires from service with the Company. The monthly
installments made under his Late Retirement Benefit will be the same as the
monthly installments under his Accrued Benefit, beginning with the monthly
installment for the month that includes his Late Retirement Date. For purposes
of calculating the Final Week Compensation and Period of Service of a
Participant entitled to a Late Retirement Benefit, compensation paid and service
after the Participant's Normal Retirement Date will be taken into account.
4.3. EARLY RETIREMENT BENEFIT. A Participant who retires from service
with the Company on or after age 55 but before his Normal Retirement Date is
entitled to an Early Retirement Benefit. Unless he elects otherwise, he will
receive his Early Retirement Benefit in the applicable Normal Payment Form
beginning on his Normal Retirement Date. The monthly installments made under his
Early Retirement Benefit will be the same as the monthly installments under his
Accrued Benefit. However, he may elect to begin receiving his Early Retirement
Benefit on the first day of any month before his Normal Retirement Date (his
Early Retirement Date) and on or after the date he retires from service with the
Company, in accordance with Section 3.4(b).
4.4. VESTED RETIREMENT BENEFIT.
(a) A Participant who is an Eligible Executive at the date a
Change in Control occurs is entitled to a Vested Retirement Benefit.
Unless he elects otherwise, he will receive his Vested Retirement in
the applicable Normal Payment Form beginning on the first day of the
month following the date the Change in Control occurs. The monthly
installments made under his Vested Retirement Benefit will be the same
as the monthly installments under his Accrued Benefit. The
Participant's Vested Retirement Benefit will not be reduced in
accordance with Section 3.4(b).
(b) A Participant who does not retire under the Plan and who
is not otherwise entitled to a Vested Retirement Benefit under Section
4.4(a) but who has a Vested Percentage of 100 percent and whose
employment with the Company terminates for any reason other than
retirement or death is entitled to a Vested Retirement Benefit. Unless
he elects otherwise, he will receive his Vested Retirement
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in the applicable Normal Payment Form beginning on his Normal
Retirement Date. The monthly installments made under his Vested
Retirement Benefit will be the same as the monthly installments under
his Accrued Benefit. However he may elect to begin receiving his Vested
Retirement Benefit on the first day of any month before his Normal
Retirement Date and on or after age 55, in accordance with Section
3.4(b).
4.5. DISABILITY RETIREMENT BENEFIT. A Participant who becomes Disabled
while an Eligible Executive and before he satisfies the requirements for another
Retirement Benefit under this Section 4 is entitled to a Disability Retirement
Benefit while he remains Disabled. Unless he elects otherwise, he will receive
his Disability Retirement Benefit in the applicable Normal Payment Form
beginning on his Disability Retirement Date. The monthly installments made under
his Disability Retirement Benefit will be the same as the monthly installments
under his Accrued Benefit, and will not be reduced in accordance with Section
3.4(b).
4.6. JOINT & SPOUSE SURVIVOR ANNUITY OPTION. A Participant who is not a
Tier One Participant may elect to receive his Retirement Benefit in the form of
a Joint & Spouse Survivor Annuity rather than a Single Life Annuity. The Joint &
Spouse Survivor Annuity may begin on the first day of any month on which the
Participant is entitled to begin receiving his Retirement Benefit and will be
the Actuarial Equivalent of the Retirement Benefit that would have been payable
to him in the form of a Single Life Annuity beginning on that day. Any election
under this Section 4.6 must be made before the Participant's Benefit Starting
Date and may not be changed or revoked after that date, provided however that
such an election will be automatically revoked if the Participant is not married
at his Benefit Starting Date. A Participant shall have an election period of at
least 60 days to make his election under this Section 4.6.
4.7. ADDITIONAL BENEFITS. In addition to the various forms of
retirement benefits described above, in the event of a Change in Control, the
following additional benefits will be provided to Participants who are Eligible
Executives at the date the Change in Control occurs:
(a) LIFE INSURANCE - In the event of a Participant's cessation
of employment for any reason other than death on or after the date a
Change in Control occurs, the Participant's Beneficiary will be
entitled to a life insurance benefit which will pay upon the
Participant's death the excess of (i) the following applicable amount
over (ii) the actual amount of the life insurance death benefit paid
(whether or not to that Beneficiary) with respect to the Participant
under the Home Beneficial Death and Disability Plan (or any successor
to such plan):
o 100% of his total normal compensation (based on the
four most recently completed calendar quarters prior
to cessation of employment and defined in the same
manner as provided in the Home Beneficial Death and
Disability Plan for retiree death benefit purposes at
the date of the Change in Control) for the first full
year following cessation of employment,
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o 75% of his total normal compensation for the second
full year following cessation of employment, and
o 50% of his total normal compensation for each year
thereafter.
(b) MEDICAL BENEFIT - In the event of a Change in Control,
each Tier One Participant who is an Eligible Executive at the date the
Change in Control occurs and his spouse to whom he is married at the
date of the Change in Control shall be entitled to receive until age 65
health care coverage for himself and his family which is comparable to
that provided, and for which the cost to the Participant does not
exceed the cost to an active employee, at the date of the Change in
Control occurs under the Home Beneficial Medical Expense Plan.
(c) GROSS-UP BENEFIT - In the event of a Change in Control,
anything in the Plan to the contrary notwithstanding, in the event it
shall be determined that any benefit, payment or distribution by the
Company to or for the benefit of a Participant who is an Eligible
Executive at the date the Change in Control occurs or his Beneficiary
(determined without regard to any additional payments required under
this Section 4.7(c) (a "Payment") is or would be subject to the excise
tax imposed by Section 4999 of the Code or any interest or penalties
are incurred by the Participant or his Beneficiary with respect to such
excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise
Tax"), then the Participant or his Beneficiary shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such
that after payment by the Participant or his Beneficiary of all taxes
(including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, the Participant or his Beneficiary
retains an amount of the Gross- Up Payment equal to the Excise Tax
imposed upon the Payments.
The following shall apply for purposes of this
Section 4.7(c):
(i) Subject to the provisions of clause (ii) of this
Section 4.7(c), all determinations required to be made under
this Section 4.7(c), including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such
determination, shall be made by or such other certified public
accounting firm as may be designated by the Participant or his
Beneficiary (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the
Participant or his Beneficiary within 15 business days of the
receipt of notice from the Participant or his Beneficiary that
there has been a Payment, or such earlier time as is requested
by the Company. In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or
group effecting the Change in Control, the Participant or his
Beneficiary shall appoint another nationally recognized
accounting firm to make the determinations required hereunder
(which accounting firm shall then
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be referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant to this
Section 4.7(c), shall be paid by the Company to the
Participant or his Beneficiary within five days of the receipt
of the Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon the Company and the
Participant or his Beneficiary. As a result of the uncertainty
in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it
is possible that Gross-Up Payments which will not have been
made by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies
pursuant to this Section 4.7(c) and the Participant or his
Beneficiary thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred and any such Underpayment
shall be promptly paid by the Company to or for the benefit of
the Participant or his Beneficiary.
(ii) The Participant or his Beneficiary shall notify
the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than ten business
days after the Participant or his Beneficiary is informed in
writing of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is
requested to be paid in writing. The Participant or his
Beneficiary shall not pay such claim prior to the expiration
of the 30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is
due). If the Company notifies the Participant or his
Beneficiary in writing prior to the expiration of such period
that it desires to contest such claim, the Participant or his
Beneficiary shall:
(A) give the Company any information reasonably
requested by the Company relating to such claim,
(B) take such action in connection with contesting
such claim as the Company shall reasonably request in writing
from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney
reasonably selected by the Company,
(C) cooperate with the Company in good faith in
order effectively to contest such claim, and
(D) permit the Company to participate in any
proceedings relating to such claim.
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Notwithstanding the foregoing, the Company shall bear and pay
directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest and
shall indemnify and hold the Participant or his Beneficiary
harmless, on an after-tax basis, for any Excise Tax or income
tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of
costs and expenses. Without limitation on the foregoing
provisions of this Section 4.7(c), the Company shall control
all proceedings taken in connection with such contest and, at
its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at
its sole option, either direct the Participant or his
Beneficiary to pay the tax claimed and sue for a refund or to
contest the claim in any permissible manner, and the
Participant or his Beneficiary agrees to prosecute such
contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine. If the
Company directs the Participant or his Beneficiary to pay such
claim and sue for a refund, the Company shall advance the
amount of such payment to the Participant or his Beneficiary,
on an interest-free basis and shall indemnify and hold the
Participant or his Beneficiary harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest
or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with
respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of
taxes for the taxable year of the Participant or his
Beneficiary with respect to which such contested amount is
claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Participant or his
Beneficiary shall be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(iii) If, after the receipt by the Participant or his
Beneficiary of an amount advanced by the Company pursuant to
this Section 4.7(c), the Participant or his Beneficiary
becomes entitled to receive any refund with respect to such
claim, the Participant or his Beneficiary shall (subject to
the Company's complying with the requirements of this Section
4.7(c)) promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the
Participant or his Beneficiary of an amount advanced by the
Company pursuant to this Section 4.7(c), a determination is
made that the Participant or his Beneficiary shall not be
entitled to any refund with respect to such claim and the
Company does not notify the Participant or his Beneficiary in
writing of its intent to contest such denial of refund prior
to the expiration of 30 days after such determination, then
such advance shall be forgiven and shall not be
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required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
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SECTION 5. PRERETIREMENT DEATH BENEFITS.
5.1. PRERETIREMENT DEATH BENEFIT. If a Vested Participant (as defined
in Section 3.4(c)) dies before his Benefit Starting Date, his surviving spouse,
if any, is entitled to a Preretirement Death Benefit. The Preretirement Death
Benefit with respect to a Participant is that portion of the Participant's
Accrued Benefit that would have been paid to the surviving spouse after the
Participant's death if (i) the Participant's Retirement Benefit had begun on the
earliest date after his death on which he could have begun receiving benefits
under Section 4 ("his assumed Benefit Starting Date"), (ii) the Participant's
Retirement Benefit was paid in the form of a Joint & Spouse Survivor Annuity,
and (iii) the Participant died on the day after his assumed Benefit Starting
Date.
If a Preretirement Death Benefit is payable to the
Participant's surviving spouse, that spouse shall automatically be considered
the Participant's Beneficiary with respect to such benefit under the Plan.
5.2. PAYMENT TO BENEFICIARIES. The Preretirement Death Benefit with
respect to a Participant will be paid to the Participant's surviving spouse, if
any, in the form of a Single Life Annuity for the Beneficiary's life commencing
on the earliest date after the Participant's death on which he could have begun
receiving benefits under Section 4.
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SECTION 6. NATURE OF PARTICIPANT'S INTEREST IN PLAN.
6.1. NO RIGHT TO ASSETS. Participation in the Plan does not create, in
favor of any Participant or Beneficiary, any right or lien in or against any
asset of the Company. Nothing contained in the Plan, and no action taken under
its provisions, will create or be construed to create a trust of any kind, or a
fiduciary relationship, between the Company and a Participant or any other
person. The Company's promise to pay benefits under the Plan will at all times
remain unfunded as to each Participant and Beneficiary, whose rights under the
Plan are limited to those of a general and unsecured creditor of the Company.
6.2. NO RIGHT TO TRANSFER INTEREST. Rights to benefits payable under
the Plan are not subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, or encumbrance. However, the Administrative
Committee may permit a Participant or Beneficiary to enter into a revocable
arrangement to pay all or part of his benefits under the Plan to a revocable
grantor trust (a so-called "living trust"). In addition, the Administrative
Committee may recognize the right of an alternate payee named in a domestic
relations order to receive all or part of a Participant's benefits under the
Plan, but only if (a) the domestic relations order would be a "qualified
domestic relations order" within the meaning of section 414(p) of the Code (if
section 414(p) applied to the Plan), (b) the domestic relations order does not
attempt to give the alternate payee any right to any asset of the Company, (c)
the domestic relations order does not attempt to give the alternate payee any
right to receive payments under the Plan at a time or in an amount that the
Participant could not receive under the Plan, and (d) the amount of the
Participant's benefits under the Plan are reduced to reflect any payments made
or due the alternate payee.
6.3. NO EMPLOYMENT RIGHTS. No provisions of the Plan and no action
taken by the Company, the Board of Directors, the Compensation Committee, or the
Administrative Committee will give any person any right to be retained in the
employment of the Company, and the Company specifically reserves the right and
power to dismiss or discharge any participant with or without cause, maintaining
the "at-will employment status of all employees".
6.4. WITHHOLDING AND TAX LIABILITIES. The amount of any withholdings
required to be made by any government or government agency will be deducted from
benefits paid under the Plan to the extent deemed necessary by the
Administrative Committee. In addition, the Participant or Beneficiary (as the
case may be) will bear the cost of any taxes not withheld on benefits provided
under the Plan, regardless of whether withholding is required.
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SECTION 7. ADMINISTRATION, INTERPRETATION, AND MODIFICATION OF PLAN.
7.1. PLAN ADMINISTRATOR. The Administrative Committee will administer
the Plan and is the plan administrator of the Plan.
7.2. POWERS OF COMMITTEE. The Administrative Committee's powers
include, but are not limited to, the power to adopt rules consistent with the
Plan; the power to decide all questions relating to the interpretation of the
terms and provisions of the Plan; and the power to resolve all other questions
arising under the Plan (including, without limitation, the power to remedy
possible ambiguities, inconsistencies, or omissions by a general rule or
particular decision). The Administrative Committee has discretionary authority
to exercise each of the foregoing powers.
7.3. FINALITY OF COMMITTEE DETERMINATIONS. Determinations by the
Administrative Committee and any interpretation, rule, or decision adopted by
the Administrative Committee under the Plan or in carrying out or administering
the Plan will be final and binding for all purposes and upon all interested
persons, their heirs, and their personal representatives.
7.4. INCAPACITY. If the Administrative Committee, in its sole
discretion, determines that any person entitled to benefits under the Plan is
unable to care for his affairs because of illness or accident, any payment due
(unless a duly qualified guardian or other legal representative has been
appointed) may be paid for the benefit of such person to his spouse, parent,
brother, sister, or other party deemed by the Administrative Committee to have
incurred expenses for such person.
7.5. AMENDMENT, SUSPENSION, AND TERMINATION. The Board of Directors
has the right by written resolution to amend, suspend, or terminate the Plan at
any time. However, no amendment, suspension, or termination will apply to an
employee who already is a Participant in the Plan without the Participant's
express written consent.
7.6. POWER TO DELEGATE BOARD AUTHORITY. The Board of Directors may, in
its sole discretion, delegate to any person or persons all or part of its
authority and responsibility under the Plan, including, without limitation, the
authority to amend the Plan.
7.7. HEADINGS. The headings used in this document are for convenience
of reference only and may not be given any weight in interpreting any provision
of the Plan.
7.8. SEVERABILITY. If any provision of the Plan is held illegal or
invalid for any reason, the illegality or invalidity of that provision will not
affect the remaining provisions of the Plan, and the Plan will be construed and
enforced as if the illegal or invalid provision had never been included in the
Plan.
7.9. GOVERNING LAW. The Plan will be construed, administered, bind
regulated in accordance with the laws of the Commonwealth of Virginia, except to
the extent that those
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laws are preempted by federal law.
7.10. COMPLETE STATEMENT OF PLAN. This Plan contains a complete
statement of its terms. The Plan may be amended, suspended or terminated only in
writing and then only as provided in Section 7.5. A Participant's right to any
benefit of a type provided under the Plan will be determined solely in
accordance with the terms of the Plan. No other evidence, whether written or
oral, will be taken into account in interpreting the provisions of the Plan.
Notwithstanding the preceding provisions of this Section 7.10, for purposes of
determining benefits with respect to a Participant, this Plan will be deemed to
include (a) the provisions of the written participation agreement executed in
accordance with Section 2.3, and (b) the provisions of any other written
agreement between the Company and the Participant to the extent such other
agreement explicitly provides for the incorporation of some or all of its terms
into this Plan.
7.11. ADMINISTRATIVE MATTERS ARISING FROM A CHANGE IN CONTROL. In the
event of a Change in Control as defined in Section 8.2, the Company will, within
90 days, place the amount necessary to pay future benefits into a grantor trust
(the Trust) to be used for benefit payments, but subject to the general
creditors of the Company as provided therein.
The trustee of the Trust is expressly authorized, though not
required, to purchase annuities for payment of the benefits within 60 days
following the establishment of the Trust, such Trust to begin payment of
benefits as soon as possible, commensurate with this agreement.
Nothing in this Section 7.11 shall be construed to authorize
or delay benefit payments due under the Plan.
7.12. PARTICIPATION BY COMPANY AFFILIATES. Any Company Affiliate may
adopt this Plan for the benefit of one or more of its employees who are Eligible
Executives with the consent of its Board of Directors and the Company's Board of
Directors. Such adoption shall be reflected in an adoption agreement or in the
Plan. Each Company Affiliate adopting the Plan shall be jointly and severally
liable with the Company and other adopting Company Affiliates for benefits
accrued under the Plan participating in the Plan. As of the Effective Date, the
only Company Affiliate adopting the Plan is Home Beneficial Life Insurance
Company.
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SECTION 8. TERMS USED IN THE PLAN.
8.1. GENDER AND NUMBER. Words used in the masculine gender in the Plan
are intended to include the feminine and neuter genders, where appropriate.
Words used in the singular form in the Plan are intended to include the plural
form, where appropriate, and vice versa.
8.2. DEFINITIONS. When used in capitalized form in the Plan, the
following words and phrases have the following meanings, unless the context
clearly indicates that a different meaning is intended:
"ACCRUED BENEFIT" means the benefit described in Section 3.
"ACTUARIAL EQUIVALENT" means the following: an amount or
benefit is the "Actuarial Equivalent" of, or is "Actuarially
Equivalent" to, another amount or benefit as of a specified date, if
the Actuarial Present Value as of the specified date of the first
amount or benefit equals the Actuarial Present Value as of the
specified date of the second amount or benefit, when calculated using
the same actuarial assumptions.
Actuarial Equivalence under Section 3.4 will be determined as
of the Participant's Benefit Starting Date, and the resulting benefit
will be expressed in the applicable Normal Payment Form beginning on
the Participant's Normal Retirement Date.
Actuarial Equivalence under Section 4.6 will be determined as
of the Participant's Benefit Starting Date, and the resulting benefit
will be expressed in the form of a Joint & Spouse Survivor Annuity
beginning on the Participant's Benefit Starting Date.
Actuarial Equivalence under the definition of "Single Life
Annuity" in this Section 8.2 will be determined as of the Beneficiary's
Benefit Starting Date, and the resulting benefit will be expressed in
the form of a Single Life Annuity beginning on the Beneficiary's
Benefit Starting Date.
To determine the actuarial equivalent of a benefit in the form
of a Joint & Spouse Survivor Annuity, the factors in Table II-C of the
Home Beneficial Retirement Plan for benefits earned after December 3l,
1988 shall be used. For this purpose, the "Normal Retirement Age
Payment Date" in such Table shall be applied based on the Retirement
Plan's definition and not based on this Plan's definition of Normal
Retirement Date and shall also be determined without the 5/12 of one
percent early payment reduction built into the Table.
"ACTUARIAL PRESENT VALUE" means the value as of a specified
date of an amount or a series of amounts due before or thereafter,
where each amount is multiplied by the probability that the condition
or conditions on which payment of the
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amount is contingent will be satisfied, and where each amount so
multiplied is then increased (if due before) or discounted (if due
thereafter) according to assumed rate of interest to reflect the time
value of money. Unless the Plan specifies otherwise, the mortality
table and interest rate used to calculate the Actuarial Present Value
of an amount or series of amounts will be the mortality table and
interest rate in effect under section 417(e)(3)(A)(ii) of the Code in
effect in the month before the beginning of the plan year, during which
such computation is being made.
"ADMINISTRATIVE COMMITTEE" means the Board of Directors or any
other person or committee appointed by the Board of Directors. However,
following a Change in Control, "Administrative Committee" means the
trustee under the Trust maintained by the Company in connection with
the Plan unless the Board of Directors as such Board is constituted
prior to such Change in Control provides otherwise.
"APPLICABLE PERCENTAGE" has the meaning assigned to that term
in Section 3.2(a).
"ASSOCIATE" has the meaning assigned to that term for purposes
of Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act.
"BENEFICIAL OWNER" means the following: a Person is deemed to
be the "Beneficial Owner" of, to "Beneficially Own," and to have
"Beneficial Ownership" of, any securities:
(1) which such Person or any of such Person's Securities Law
Affiliates or Associates beneficially owns, directly or indirectly;
(2) which such Person or any of such Person's Securities Law
Affiliates or Associates has (A) the right or obligation to acquire
(whether such right or obligation is exercisable or effective
immediately or only after the passage of time) pursuant to any
agreement, arrangement, or understanding (whether or not in writing) or
upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided that a Person shall not be
deemed the "Beneficial Owner" of; or to "Beneficially Own," or to have
"Beneficial Ownership" of, securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Securities
Law Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right to vote pursuant to
any agreement, arrangement, or understanding (whether or not in
writing); provided that a Person shall not be deemed the "Beneficial
Owner" of; or to "Beneficially Own," or to have "Beneficial Ownership"
of; any security under this clause (B) if the agreement, arrangement,
or understanding to vote such security (i) arises solely form
irrevocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Securities Exchange Act, and (ii) is not
also then reported by such Person on Schedule 13D under the Securities
Exchange Act (or any comparable or successor report); or
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(3) which are beneficially owned, directly or in directly, by
any other Person (or any Securities Law Affiliate or Associate thereof)
with which such Person or any of such Person's Securities Law
Affiliates or Associates has any agreement, arrangement, or
understanding (whether or not in writing) or with which such Person or
any of such Person's Securities Law Affiliates have otherwise formed a
group for the purpose of acquiring, holding, voting (except pursuant to
a revocable proxy as described in clause (B)(i) of paragraph (2),
above), or disposing of any securities of the Company.
"BENEFICIARY" means, except as otherwise expressly provided in
Section 5 for purposes of the Preretirement Death Benefit, the person
designated in writing by a Participant to receive benefits under the
Plan after the Participant's death. If a Participant dies and he has
failed to designate a Beneficiary or his designated Beneficiary fails
to survive him, his Beneficiary will be the person to whom he is
married at the time of his death, or if he is not married at that time,
his Beneficiary will be the executor of his will or the administrator
of his estate. A Participant may revoke in writing a prior designation
of a Beneficiary at any time prior to receipt of benefits.
"BENEFIT STARTING DATE" means the date on which a Participant
or Beneficiary is scheduled to begin receiving benefits under the Plan.
"BOARD OF DIRECTORS" means the Board of Directors of the
Company.
"CHANGE IN CONTROL" means the first to occur of the following
events (however if the 1984 Voting Trust, due to continue until May 11,
1997 is not renewed, such nonrenewal will not be considered a Change in
Control):
(1) an acquisition (other than directly from the Company) of
securities of the Company by any Person, immediately after which such
Person, together with all Securities Law Affiliates and Associates of
such Person, becomes the Beneficial Owner of securities of the Company
representing 50 percent or more of the Voting Power, provided that, in
determining whether a Change in Control has occurred, the acquisition
of securities of the Company in a Non-Control Acquisition will not
constitute an acquisition that would cause a Change in Control; or
(2) four or more directors, whose election or nomination for
election is not approved by a majority of the members of the Incumbent
Board then serving as members of the Board of Directors, are elected
within any single 12-month period to serve on the Board of Directors;
provided that an individual whose election or nomination for election
is approved as a result of either an actual or threatened Election
Contest or Proxy Contest, including by reason of any agreement intended
to avoid or settle any Election Contest or Proxy Contest, will be
deemed not to have been approved by a majority of the Incumbent Board
for purposes of this definition; or
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(3) members of the Incumbent Board cease for any reason to
constitute at least a majority of the Board of Directors; or
(4) consummation of:
(A) a merger, consolidation, or reorganization involving the
Company, unless
(i) the shareholders of the Company, immediately
before the merger, consolidation, or reorganization, own,
directly or indirectly immediately following such merger,
consolidation, or reorganization, at least 75 percent of the
combined voting power of the outstanding voting securities of
the corporation resulting from such merger, consolidation, or
reorganization in substantially the same proportion as their
ownership of the voting securities immediately before such
merger, consolidation, or reorganization;
(ii) individuals who were members of the Incumbent
Board immediately prior to the execution of the agreement
providing for such merger, consolidation, or reorganization
constitute at least a majority of the board of directors of
the Surviving Corporation; and
(iii) no Person (other than (1) the Company or any
Subsidiary thereof, (2) any employee benefit plan (or any
trust forming a part thereof) maintained by the Company, any
Subsidiary thereof, or the Surviving Corporation, or (3) any
Person who, immediately prior to such merger, consolidation,
or reorganization, had Beneficial Ownership of securities
representing 25 percent or more of the Voting Power) has
Beneficial Ownership of securities representing 25 percent or
more of the combined voting power of the Surviving
Corporation's then outstanding voting securities;
(B) a complete liquidation or dissolution of the Company; or
(C) the sale or other disposition of all or substantially all
of the assets of the Company to any Person (other than a transfer to a
Subsidiary of the Company).
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
"COMPANY" means Home Beneficial Corporation, any successor to
Home Beneficial Corporation. Employment with the Company includes
employment with any Company Affiliate.
"COMPANY AFFILIATE" means any corporation, partnership, or
other organization, partnership, or other organization required to be
aggregated with the Company under section 414(b) and (c) of the Code.
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"COMPENSATION COMMITTEE" means the Compensation Committee of
the Board of Directors or if there is no such committee, the Board of
Directors.
"DETERMINATION DATE" with respect to a Participant means the
applicable date as of which his benefit is determined as described in
Section 3.2(b).
"DISABILITY RETIREMENT BENEFIT" means the benefit described in
Section 4.5.
"DISABLED" means entitled to receive disability benefits under
a long-term disability plan or disability retirement benefits under a
defined benefit plan (other than this Plan) maintained by the Company.
"EARLY RETIREMENT BENEFIT" means the benefit described in
Section 4.3.
"EARLY RETIREMENT DATE" shall be that last day of the calendar
month coinciding with or next following the date of early retirement
from the Company. A Participant who has attained the age of fifty-five
years or more and has completed a Period of Service of at least five
years as determined for vesting purposes under Section 3.4(c).
"EFFECTIVE DATE" means November 1, 1996.
"ELECTION CONTEST" means an election contest described in Rule
14a-II promulgated under the Securities Exchange Act.
"ELIGIBLE EXECUTIVE" means a common law employee who is an
officer of the Company or a Company Affiliate or who holds another key
position with the Company or a Company Affiliate and, in either case,
who is designated as an "Eligible Executive" for purposes of this Plan
by the Compensation Committee in its sole discretion. Unless otherwise
expressly provided in a Participant's written participation agreement
referred to in Section 2.3, any such designation may be terminated for
prospective periods, but not retroactively, by the Compensation
Committee in its sole discretion, and any such designation shall
automatically terminate when the person ceases to be a common law
employee of the Company and all Company Affiliates, in which case the
employee will cease to be an "Eligible Employee" prospectively from the
effective date of such termination. Notwithstanding the foregoing, no
termination of such a designation may be made by the Compensation
Committee (whether by termination of the employee's employment or his
actual designation as an Eligible Executive or otherwise) in
anticipation of a Change in Control.
"FINAL WEEK COMPENSATION" has the meaning assigned to that
term in Section 3.2(c).
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"INCUMBENT BOARD" means individuals who, as of the close of
business on the Effective Date, are members of the Board of Directors;
provided that, if the election, or nomination for election by the
Company's shareholders, of any new director was approved by a vote of
at least 75 percent of the Incumbent Board, such new director shall,
for purposes of the Plan, be considered as a member of the Incumbent
Board; provided further that no individual shall be considered a member
of the Incumbent Board if such individual initially assumed office as a
result of either an actual or threatened Election Contest or other
actual or threatened Proxy Contest, including by reason of any
agreement intended to avoid or settle any election Contest or Proxy
contest.
JOINT & SPOUSE SURVIVOR ANNUITY" means an annuity payable in
equal monthly installments to the Participant, beginning with the
calendar month in which his Benefit Starting Date occurs and ending
with the calendar month in which he dies, and thereafter in equal
monthly installments of the same amount to his surviving spouse (if
any), beginning with the calendar month following the calendar month in
which he dies and ending with the calendar month in which his surviving
spouse dies.
"LATE RETIREMENT BENEFIT" means the benefit described in
Section 4.2.
"LATE RETIREMENT DATE" means the first day of the month
following the month in which a Participant retires from service with
the Company, if he retires from service with the Company after his
Normal Retirement Date.
"NON-CONTROL ACQUISITION" means an acquisition by (1) an
employee benefit plan (or a trust forming a part thereof) maintained by
(a) the Company or (b) any of its Subsidiaries, (2) the Company or any
of its Subsidiaries, or (3) any Person in connection with a Non-Control
Transaction.
"NON-CONTROL TRANSACTION" means any transaction described in
clauses (4)(A)(i) through (iii) of the definition of "Change in
Control."
"NORMAL PAYMENT FORM" with respect to a Participant means the
applicable form of payment described for the Participant in Section
3.2(d).
"NORMAL RETIREMENT BENEFIT" means the benefit described in
Section 4.1.
"NORMAL RETIREMENT DATE" means the first day of the month
following the month in which a Participant reaches age 65, unless a
Change in Control occurs, in which case Normal Retirement Date means
the first day of the month following the month in which the Change in
Control occurs for each Participant who is an Eligible Executive at the
date the Change in Control occurs. In the case of a Participant who
dies before reaching his Normal Retirement Date, Normal Retirement Date
means the day on which the Participant would have reached his Normal
Retirement Date had he
86
not died.
"PARTICIPANT" means a member of a select group of management
or highly compensated employees of the Company or a Company Affiliate
who has become a participant in the Plan under Section 2.
Certain Participants are designated as Tier One Participants
in their written participation agreements referred to in Section 2.3.
All Participants who are not so designated as Tier One Participants
shall be considered Tier Two Participants.
Once an Eligible Executive becomes a Participant, he shall be
a Participant for so long as he is an Eligible Executive or he is
entitled to future benefits under the terms of the Plan.
"PERIOD OF SERVICE" with respect to an employee means the
period he is a common law employee of the company or any company
Affiliate, based on whole months of employment and expressed in years
and months (expressed as 1/12th of a year each), whether or not such
employment is continuous. Separate periods of employment shall be
aggregated, with 30 days being considered a month in the case of
aggregated separate partial months of employment.
"PERSON" means any individual, firm, corporation, partnership,
joint venture, association, trust, or other entity.
"PLAN" means the Home Beneficial Corporation Supplemental
Executive Retirement Plan as set forth in this document.
"PRERETIREMENT DEATH BENEFIT" means the benefit described in
Section 5.1.
"PROXY CONTEST" means a solicitation of proxies or consents by
or on behalf of a Person other than the Board of Directors.
"RETIREMENT BENEFIT" means a Normal Retirement Benefit, a Late
Retirement Benefit, an Early Retirement Benefit, a Vested Retirement
Benefit, or a Disability Retirement Benefit.
"SECTION" means a section of this Plan. For example, a
reference to Section 2 includes a reference to Sections 2.1 through
2.3, while a reference to Section 2.1 is intended as a reference to
Section 2.1 only.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
1934, amended and in effect from time to time.
"SECURITIES EXCHANGE AFFILIATE" means an "affiliate" as
defined for purposes
87
of Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act.
"SINGLE LIFE ANNUITY" generally means an annuity payable in
equal monthly installments to the Participant, beginning with the
calendar month in which the Participant's Benefit Starting Date occurs
and ending with the calendar month in which the Participant dies.
The Single Life Annuity payable to a Beneficiary means an
annuity payable in equal monthly installments to the Beneficiary,
beginning with the calendar month in which the Beneficiary's Benefit
Starting Date occurs and ending with the calendar month in which the
Beneficiary dies.
"SUBSIDIARY" of any Person means any corporation or other
entity of which at least 80 percent (or such lesser percentage as the
Administrative Committee may determine) of the voting power of the
voting equity securities or voting interest therein is owned, directly
or indirectly, by such Person.
"SURVIVING CORPORATION" means a corporation resulting from a
merger, consolidation, or reorganization described in paragraph
(4)(A)(i) of the definition of "Change in Control."
"TRUST" means the grantor trust referred to in Section 7.11,
which trust is maintained under that certain document known as the Home
Beneficial Corporation Supplemental Executive Retirement Trust
Agreement.
"VESTED PARTICIPANT" means a Participant described as such in
Section 3.4(c).
"VESTED RETIREMENT BENEFIT" means the benefit described in
Section 4.4.
"VOTING POWER" means the voting power of all securities of the
Company then outstanding generally entitled to vote for the election of
directors of the Company.
WITNESS, THE FOLLOWING SIGNATURES THIS DAY OF DECEMBER, 1996:
HOME BENEFICIAL CORPORATION
ATTEST: BY:
---------------------------------- ---------------------------
JAMES M. WILTSHIRE, JR. R. W. WILTSHIRE
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TITLE: SECRETARY TITLE: CHAIRMAN
HOME BENEFICIAL
LIFE INSURANCE COMPANY
ATTEST: BY:
---------------------------------- ---------------------------
JAMES M. WILTSHIRE, JR. R. W. WILTSHIRE
TITLE: SECRETARY TITLE: CHAIRMAN
89