EXHIBIT 10(iii)(f)
ARMSTRONG
DEFERRED COMPENSATION PLAN
The Armstrong Deferred Compensation Plan (the "Plan") was initially
established by the Board of Directors of Armstrong World Industries, Inc.
effective September 30, 1985. The Plan allows certain directors and management
employees of the Company to defer receipt of a portion of their Compensation
and, as a result, to receive certain supplemental retirement or survivor
benefits. In addition, effective January 1, 1996, certain directors are
required to defer receipt of a portion of their Compensation until termination
of Board service. The Plan is hereby amended and restated as of January 1,
2000.
1. DEFINITIONS
1.01 "Company" shall mean Armstrong World Industries, Inc. or any
successor by merger, purchase or otherwise. In addition, the term Company shall
include any subsidiary corporation controlled by Armstrong World Industries,
Inc. that shall have adopted this Plan with the permission of the Board of
Directors of Armstrong World Industries, Inc.
1.02 "Committee" shall mean the Deferred Compensation Committee whose
membership shall include the Chief Executive Officer of the Company and at least
two (2) other employees of the Company selected by the Chief Executive Officer.
1.03 "Compensation" for an employee Participant shall include a
Participant's annual base salary and any actual bonus payable under the
Company's annual bonus plan received by the employee for services with the
Company and, in the case of a nonemployee director Participant, shall include
payments by the Company to the director in the form of retainer fees, meeting
fees, and special assignment fees, as well as share awards made by the Company
to the director's Stock Subaccount. Upon the prior approval of the Committee
and subject to any conditions imposed by the Committee, an employee Participant
may elect to include in annual base salary an applicable amount of any
"severance pay" to be provided to a Participant under the Employment Protection
Plan for Salaried Employees, the Severance Pay Plan for Salaried Employees or
any individual agreement.
1.04 "Participant" shall be each nonemployee director and employee who has
been selected for participation by the Committee, who satisfies all conditions
of eligibility, and who elects to participate by entering into a Participation
Agreement.
1.05 "Participation Agreement" is the contract between the Company and the
Participant covering participation in the Plan.
1.06 "Change in Control" shall occur if and when (i) any person acquires
"beneficial ownership" of more than twenty-eight percent (28%) of the then
outstanding "voting stock" of the Company and, within five (5) years thereafter,
"disinterested directors" no longer constitute at least a majority of the entire
Board of Directors, or (ii) there shall occur a "Business Combination" with an
"Interested Shareholder." For those individuals with individual agreements,
"Change in Control" shall occur as defined within such agreement.
For the purpose of this section, the terms "person," "beneficial
ownership," "voting stock," "disinterested director," "Business Combination,"
and "Interested Shareholder" shall have the meaning given to them in Article 7
of the Company's Articles of Incorporation as in effect on May 1, 1985.
1.07 "Supplemental Retirement Account Balance" at any date shall mean with
respect to any Participant an amount equal to the amounts credited (including
deferrals and earnings thereon) to the Participant's Cash Subaccount, the
Participant's Stock Subaccount, and the Participant's Fund Subaccount, as
determined pursuant to Sections 1.09, 1.10 and 1.11.
1.08 "Termination Account Balance" at any date shall mean with respect to
any Participant the sum of (a) plus (b), where (a) equals one hundred percent
(100%) of the amount credited to the Participant's Cash Subaccount attributable
to deferrals made prior to January 1, 1993, and earnings thereon, as determined
pursuant to Section 1.09; and (b) equals ninety-four percent (94%) of the sum of
(i) the amount credited to the Participant's Cash Subaccount attributable to
deferrals made on or after January 1, 1993, and earnings thereon, as determined
pursuant to Section 1.09, (ii) the amount credited to the Participant's Stock
Subaccount (including deferrals and earnings thereon), as determined pursuant to
Section 1.10, plus (iii) the amount credited to the Participant's Fund
Subaccount (including deferrals and hypothetical earnings thereon), as
determined pursuant to Section 1.11.
1.09 "Cash Subaccount" shall mean with respect to any Participant:
(a) The amount which the Participant actually defers under this Plan
unless such Participant elects in writing that all or a portion of such
deferral be credited to his Stock Subaccount or his Fund Subaccount in
accordance with subsection 3.02(g) or 3.02(h) of this Plan, plus
(b) Interest which is credited on each such deferral at a rate equal
to the rate specified in the Participant's individual Participation
Agreement for purposes of determining the Participant's Supplemental
Retirement Account Balance, for the following period:
(i) From the date on which the deferred Compensation normally
would have been paid in the case of deferrals to the Cash Subaccount
or, in all
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other cases, from the date of transfer from the Stock
Subaccount or the Fund Subaccount pursuant to subsection 3.02(h),
(ii) Until the earlier of the date of payment or the date of
transfer to the Stock Subaccount or the Fund Subaccount pursuant to
subsection 3.02(h).
1.10 "Stock Subaccount" at any date shall mean with respect to any
Participant the amount which the Participant elects to defer and have credited
to his Stock Subaccount in accordance with subsection 3.02(g) of this Plan or,
in the case of a nonemployee director Participant, the share awards made by the
Company which the Participant defers in accordance with Subsection 3.02(i), plus
any amounts the Participant elects to transfer to this Subaccount from the Cash
Subaccount or the Fund Subaccount in accordance with the provisions of Section
3.02(h), reduced by any amounts the Participant elects to transfer from this
Subaccount to the Cash Subaccount or the Fund Subaccount in accordance with the
provisions of Section 3.02(h). A bookkeeping entry shall be made of the number
of whole and fractional shares of Company common stock that were awarded or that
could have been purchased with the amounts actually deferred under or
transferred to the Stock Subaccount by the Participant, based on the fair market
value of such stock on the date the deferral is made or the transfer is credited
to the Participant's Stock Subaccount. The Stock Subaccount also shall be
credited with a bookkeeping entry indicating the number of additional whole or
fractional shares which would be payable as a stock dividend on the shares
previously credited to the Stock Subaccount. Any amounts which would represent
cash dividends on Company common stock credited to a Participant's Stock
Subaccount shall be converted to an entry representing the number of additional
shares of Company common stock which could be purchased at fair market value
with such dividends as of the date such dividends are credited to the
Subaccount.
For purposes of this section, "fair market value" of a share of Company
common stock shall mean the closing price of a single share of Company common
stock as reported by the New York Stock Exchange on the applicable date or, if
no sales were made on such date, on the next preceding date on which sales of
the Company common stock were made. The "applicable date" for deferred amounts
shall be the date on which the deferred Compensation would have been paid. The
"applicable date" for transfers to or from the Stock Subaccount shall be the
effective date of the Participant's conversion election under Section 3.02(h).
In the event of any changes in the outstanding shares of Company common
stock by reason of stock dividends, stock splits, recapitalizations,
reorganizations, mergers, consolidations, combinations, exchanges, or other
relevant changes in capitalization occurring after the date of deferral, the
Committee shall adjust the balance in the Participant's Stock Subaccount
appropriately to reflect such change.
1.11 "Fund Subaccount" at any date shall mean with respect to any
Participant the amount which the Participant elects to defer and have credited
to his Fund Subaccount in accordance with subsection 3.02(g) of this Plan, plus
any amounts the Participant elects to
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transfer to this Subaccount from the Cash Subaccount or the Stock Subaccount in
accordance with the provisions of Section 3.02(h), reduced by any amounts the
Participant elects to transfer from this Subaccount to the Cash Subaccount or
the Stock Subaccount in accordance with the provisions of Section 3.02(h). The
Participant shall designate his preference for the investment of the funds
deferred by him under this Subaccount. Such designation shall be limited to the
selection of one or more investment funds designated on the Participant's
Deferral Election forms for the period in question. The Company and the Trustee,
if a trust is funded, may elect to invest trust assets in such designated
investment funds, but shall not be required to do so. In any event, the
Participant's Fund Subaccount shall be credited with the hypothetical earnings,
gains, losses, and changes in the fair market value of such Fund Subaccount for
the time period that a Participant has amounts credited to the Fund Subaccount
as if the Company had followed such investment designation (such amount being
referred to herein as the "hypothetical earnings"). A bookkeeping entry shall be
made of the amounts deferred or transferred to the Fund Subaccount, along with
the hypothetical earnings on such amounts for each investment fund selected by
the participant.
Deferrals credited to the Fund Subaccount under the Plan may be deemed to
be invested in one or more investment funds as approved by the Committee,
including but not limited to the following:
(a) Equity Investment Fund - One or more diversified equity funds
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invested in equity securities or securities convertible into equity
securities.
(b) Fixed Income Investment Fund - One or more fixed income funds
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invested in, but not limited to, guaranteed income contracts, bonds, notes,
debentures, asset-backed securities and fixed income derivatives.
(c) Money Market Fund - One or more money market funds invested in
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short-term obligations of the United States Government, bank certificates
of deposit, commercial paper, bankers' acceptances, shares of money market
mutual funds and other similar types of short-term investments.
(d) Balanced Fund - One or more balanced funds, as may be available
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from time to time, that invest in a mixture of bonds, equities, and short-
term instruments.
Dividends, interest and other distributions which would otherwise be
received in respect to each hypothetical investment under the Fund Subaccount
shall be deemed to be reinvested in the respective investment fund.
1.12 "Reporting Person" shall mean a person who is subject to the
provisions of Section 16(a) of the Securities Exchange Act of 1934, as amended.
For purposes of this Plan, a person shall be deemed to be a Reporting Person for
the period he is such a Reporting Person and six (6) months thereafter.
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2. ELIGIBILITY FOR PARTICIPATION
Participation in the Plan is limited to nonemployee directors of the
Company and those management employees who have been selected for participation
by the Committee.
3. DEFERRAL OF COMPENSATION
3.01 Deferral Period: During such period or periods as may, from time to
time, be selected by the Committee (the "Deferral Period"), each person eligible
to participate in the Plan shall be given the opportunity to elect to defer a
portion of his or her Compensation. The length of the current Deferral Period
shall be four (4) years, commencing on January 1, 1997.
3.02 Deferral Rules:
(a) There shall be no minimum amount a Participant is required to
defer.
(b) The maximum amount an employee Participant may defer for each
year of the Deferral Period shall be twenty percent (20%) of the
Participant's annual base salary at the time of the deferral election and
one hundred percent (100%) of the Participant's actual bonus payable under
the Company's annual bonus plan; or, with the approval of the Board of
Directors, up to the sum of twenty percent (20%) of the Participant's
annual base salary and one hundred percent (100%) of the Participant's
target bonus award. The amount of any bonus deferral may not exceed the
gross amount of the bonus reduced by any tax required to be withheld from
such amounts under Sections 3111(a) and (b) of the Internal Revenue Code of
1986, as amended, or any state or local statute. Subject to the above
deferral limitations, the Board of Directors may also approve deferrals
from any payment of cash Compensation to the employee Participant. The
maximum amount of Compensation a nonemployee director may defer for each
year of the Deferral Period shall be determined by the director.
(c) The amount deferred by an employee Participant shall be deferred
by means of reductions in the employee's annual base salary or bonus,
whichever is applicable under the Participant's deferral election. Amounts
deferred by a nonemployee director shall be made from the director's
retainer fees, meeting fees and special assignment fees, and share awards
made by the Company to the director's Stock Subaccount under Section
3.02(i).
(d) The decision by a Participant to defer a portion of Compensation
(other than share awards to nonemployee directors under Section 3.02(i)) is
an election for the full Deferral Period which must be made by the December
1 prior to the Deferral Period to which an election to defer Compensation
relates; provided, however, that in the case of a Participant whose
eligibility to participate in the Plan initially commences after January 1
of a year, a decision to defer a portion of Compensation earned after such
a
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deferral election and during the remaining part of a Deferral Period must
be made no later than thirty (30) days after the Participant's commencement
of participation.
The decision by a Participant of the amount to be deferred under this
Plan for each calendar year in the Deferral Period (other than share awards
to nonemployee directors under Section 3.02(i)) is an annual election which
must be made by December 1 of the calendar year prior to the year in which
the amount is to be deferred.
Deferrals of share awards to nonemployee directors under Section
3.02(i) shall be automatic at the time such award is made and shall not
require a deferral election other than the initial election described in
Section 3.02(i) for Participants who were directors prior to January 1,
1996.
(e) Except as provided below, a Participant's election to defer
Compensation shall be irrevocable for the Deferral Period and a
Participant's election of the amount to be deferred shall be irrevocable
for the calendar year in which the election is effective. Notwithstanding
the prior sentence, the Committee may permit a Participant to waive the
remainder of the deferral commitment upon a finding based upon uniform
standards established by the Committee that the Participant has suffered a
severe financial hardship.
For these purposes, a severe financial hardship includes a sudden and
unexpected illness or accident of the Participant or a dependent (as
defined under Section 152(a) of the Internal Revenue Code of 1986, as
amended), loss of the Participant's property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant, to the extent not
reimbursed by insurance or otherwise, and to the extent the Participant
does not have other funds reasonably available to alleviate the hardship.
(f) Notwithstanding the above, any employee Participant, after
approval by the Committee, may elect to complete the deferral of annual
base salary as specified in the current Deferral Election from any
"severance pay" which the Participant is eligible to receive following the
Participant's date of termination under the Employment Protection Plan for
Salaried Employees, the Severance Pay Plan for Salaried Employees or any
individual agreement.
(g) At the time a Participant makes an election for the amount to be
deferred for a calendar year during the Deferral Period in accordance with
this Section 3.02, such Participant may elect in writing that a specified
percentage (stated in five percent (5%) increments) of the Compensation he
is deferring pursuant to the Plan for such calendar year be credited to his
Cash Subaccount, to his Stock Subaccount or to the individual investment
funds elected by the Participant in his Fund Subaccount. Such percentage
allocation may be changed with respect to future deferrals at any time. If
the
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Participant's election fails to specify the percentage to be allocated to
each Subaccount or allocates less than one hundred percent (100%) of the
amounts to be deferred, the amounts deferred by the Participant for which
no allocation election has been made for the calendar year shall be
credited to the Participant's Cash Subaccount.
(h) At any time, a Participant may elect to convert all or a portion
of amounts previously deferred under one Subaccount to any other
Subaccount; provided, however, that amounts deferred or otherwise credited
to the Stock Subaccount may not be converted to the Cash Subaccount or the
Fund Subaccount if the Participant is a Reporting Person. The
Participant's election shall be effective on the first day of the month
following the receipt of such election by the Secretary of the Committee,
provided that the Secretary is notified of such election by the twenty-
fifth (25th) day of the month prior to the conversion date. Notice by
telephone or facsimile shall be deemed to constitute notice to the
Secretary of the conversion election, provided that a written form is
submitted immediately subsequent to such notice. The number of shares to
be credited to a Participant's Stock Subaccount, or the number of shares to
be debited from a Participant's Stock Subaccount and the cash to be
credited to the Participant's Cash Subaccount, or an investment fund in the
Fund Subaccount, shall be based on the fair market value of Company common
stock (as determined in Section 1.10 of the Plan) on the date that the
conversion election is effective. The interest rate for amounts
transferred to the Cash Subaccount shall be the rate in effect under the
Participant's individual Participation Agreement in effect during the
Deferral Period in which the conversion election is effective.
Hypothetical earnings credited on amounts transferred to the Fund
Subaccount shall be based on the actual investment performance of each
applicable investment fund for the time period that a Participant has an
account balance in such investment funds.
(i) Effective January 1, 1996, nonemployee directors of the Company
who were Participants of the Board prior to January 1, 1996, were able to
elect to discontinue their participation in the Directors' Retirement
Income Plan ("Directors' Plan") and waive their right to any benefit
accrued under the Directors' Plan. If a nonemployee director made this
election, such director became eligible to receive an annual award
equivalent to the value of two hundred (200) shares of Company common stock
which shall be credited to his Stock Subaccount. The annual share award
shall be made each January 1 up until the time a director attains twelve
(12) years of Board service, including years of Board service prior to
January 1, 1996. The first such award was made on January 1, 1996.
Further, such director received, effective January 1, 1996, a share award
grant to replace the value of the accrued Directors' Plan benefit the
director elected to forfeit. This share award grant was credited to the
director's Stock Subaccount and was the greater of:
(i) Two hundred (200) shares times the number of full years of
Board service as of January 1, 1996, up to a maximum of twelve (12)
years, or
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(ii) The number of shares whose value (based on the fair market
value of Armstrong common stock on January 1, 1996) equated to the
present value of the benefits accrued under the Directors' Plan using
a six and one-half percent (6-1/2%) discount rate and assuming
benefit payments commence on the first day of the month following the
director's sixty-fifth (65th) birthday (January 1, 1996, if the
director was older than sixty-five (65)).
Nonemployee directors who join the Board after January 1, 1996, shall
be eligible to receive an annual award equivalent to two hundred (200)
shares of Armstrong common stock which shall be credited to their Stock
Subaccount unless the director elects to receive stock options in lieu of
this award. The annual share award shall be made each January 1 until such
time as a director attains twelve (12) years of Board service.
3.03 Manner of Electing Deferral and Payment of Benefits: A Participant
shall elect to defer Compensation by giving written notice to the Company on
forms provided for such purposes, which notice shall include:
(a) The amount and manner of Compensation to be deferred in each
calendar year of a specified Deferral Period. An employee Participant
shall make a separate election for amounts of annual base salary to be
deferred and amounts of bonus awards to be deferred.
(b) A Designation of Beneficiary.
(c) The date the installment payments of the Participant's deferred
Compensation and interest thereon are to commence, subject to the
limitations of Section 4.03.
(d) The designation of the Subaccount (Cash, Stock or Fund and, if
applicable, the investment fund or funds under the Fund Subaccount) to
which deferrals are to be credited for each calendar year of the specified
Deferral Period.
The Designation of the Beneficiary shall continue to be effective until and
unless a new election is filed in writing with the Committee. The designation
of the date that the installment payments of the Participant's benefits are to
commence shall be irrevocable, except as provided in Article 4.
4. PAYMENT AND AMOUNT OF BENEFITS
4.01 A Participant's supplemental retirement benefits under this Plan
shall be paid in substantially equal monthly installments under the declining
balances methodology for one hundred twenty (120) months in the case of a
nonemployee director Participant and for one
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hundred eighty (180) months in the case of an employee Participant; provided,
however, that alternative payment schedules may be established by the Management
Development and Compensation Committee of the Board of Directors. The
Participant's installment payments of his supplemental retirement benefits shall
commence in accordance with the election made by the Participant pursuant to
Section 3.03, provided, however, that:
(a) For a Participant who is a nonemployee director, payment may
commence at any time following termination of service as a director, but in
no event earlier than age sixty-five (65) for directors who begin Plan
participation before January 1, 1996; provided that payment will commence
in all events not later than the first day of the month following the
Participant's seventieth (70th) birthday, regardless of whether service as
a director has terminated at that time.
(b) For a Participant who is an employee, payment may commence at any
time subsequent to termination or retirement; provided, however, that
payment will commence in all events not later than the first day of the
month following the Participant's sixty-fifth (65th) birthday, regardless
of whether the Participant has actually retired at that time.
Notwithstanding the foregoing, the Company reserves the right to impose
conditions, including with respect to payment commencement, in connection with
early retirement opportunities or any other severance arrangements which
otherwise enhance an employee Participant's retirement income.
4.02 The supplemental retirement benefits for a Deferral Period will be
paid, but in a lesser amount, if:
(a) By the end of the Deferral Period the Compensation payable to a
Participant has proved insufficient to accommodate full deferral;
(b) Prior to the end of the Deferral Period, a nonemployee director
ceases to be a director after completing one (1) year of service on the
Board of Directors for any reason other than death;
(c) A Participant ceases to be a Participant within the Deferral
Period because his or her employment with the Company ceases or such
Participant retires under any Company Pension Plan within that period;
(d) A Participant discontinues deferrals within the Deferral Period
due to severe financial hardship.
4.03 Notwithstanding any other provision of the Plan (including but not
limited to Sections 4.05 and 4.06), if an employee Participant resigns without
the written approval of the
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Committee or is discharged for willful, deliberate or gross misconduct as
determined by the Committee or if a nonemployee director Participant terminates
service on the Board of Directors prior to the completion of one (1) year of
service, then in lieu of any other benefit under the Plan (including any single
sum previously requested by the Participant under Section 4.05(b) or Section
4.06), the Participant shall be paid a single sum amount, as soon as practical
following such resignation, discharge or termination (as the case may be) equal
to the Participant's Termination Account Balance, and shall permanently forfeit
the amount that represents the difference between the Participant's Supplemental
Retirement Account Balance and Termination Account Balance.
4.04 Notwithstanding Section 4.03, if an employee Participant is
terminated or terminates for good reason as set forth in the Employment
Protection Plan for Salaried Employees or an individual agreement within three
(3) years following a Change in Control or if an employee Participant retires
pursuant to an early retirement opportunity or any other severance arrangement
in which the Participant agrees to commence payment of the supplemental
retirement benefits following the Participant's sixty-fifth (65th) birthday and
a Change in Control precedes the commencement of such payments, the Participant
may request the payment of his Supplemental Retirement Account Balance in a
single sum. Notwithstanding the preceding sentence, if such Participant
requests that the single sum be paid on a date that is less than twelve (12)
months from the date of such request, the Participant shall receive a single sum
payment equal to the Participant's Termination Account Balance, and shall
permanently forfeit the amount that represents the difference between the
Participant's Supplemental Retirement Account Balance and Termination Account
Balance.
4.05 Notwithstanding any other provision of the Plan to the contrary, a
Participant may elect, upon written request to the Committee, to accelerate the
commencement date of the installment payments to be made to the Participant
and/or to receive a specified portion (including one hundred percent (100%)) of
his supplemental retirement benefits under the Plan in a single sum payment, in
accordance with the rules set forth below:
(a) A Participant may accelerate the commencement date upon which the
installment payments of his supplemental retirement benefits are otherwise
scheduled to commence, provided that the accelerated commencement date is
otherwise permissible under Section 4.01 and is at least twelve (12) months
from the date of such request.
(b) A Participant may request at any time the single sum payment of a
specified dollar amount or percentage (including one hundred percent
(100%)) of his supplemental retirement benefits. The Participant's single
sum payment shall equal the specified dollar amount or percentage of the
Participant's Supplemental Retirement Account Balance as of the payment
date. Notwithstanding the preceding sentence, if such Participant requests
that the single sum be paid on a date that is less than twelve (12) months
from the date of such request, the Participant shall receive a single sum
payment equal to the specified dollar amount or percentage of the
Participant's Termination Account Balance as of the payment date and shall
permanently forfeit the proportionate
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amount of his Supplemental Retirement Account Balance that would otherwise
have been paid in a single sum if the Participant had requested that the
single sum be paid on a date that is at least twelve (12) months from the
date of the such request. If a Participant has commenced receiving
installment payments of his supplemental retirement benefits, and the
Participant is paid a single sum payment under this Section 4.05(b), each
subsequent installment payment shall be reduced as necessary to reflect the
single sum payment and the permanent forfeiture. A Participant shall be
limited to two (2) single sum requests in any calendar year.
(c) Notwithstanding any other provision in the Plan to the contrary,
any Participant who is a Reporting Person shall not be entitled to receive
a distribution of any amount owed to the Participant under the Stock
Subaccount.
(d) Notwithstanding any other provision in the Plan to the contrary,
a Participant who has requested, but not received, a single sum payment of
all or part of his supplemental retirement benefits under the Plan may
elect, upon written request to the Committee, to change the payment date of
such single sum or revoke the payment of such single sum provided the
payment date in the absence of such request is not within twelve (12)
months of the date of the request. If the Participant requests an amended
payment date that is less than twelve (12) months from the date of the
request, the Participant shall receive a single sum payment equal to the
specified dollar amount or percentage of the Participant's Termination
Account Balance as of the payment date. Any such single sum paid under
this Section 4.05(d), the forfeiture of a portion of the Participant's
Supplemental Retirement Account, and the Participant's remaining
installment payments in the event the Participant has commenced receiving
installment payments, shall be administered in accordance with the
provisions of Section 4.05(b) above.
4.06 Further, notwithstanding any other provision of the Plan to the
contrary, a Participant may request a single sum payment of an amount necessary
to satisfy a severe financial hardship. The Committee shall determine, based
upon uniform, established standards, whether the Participant has suffered a
severe financial hardship. For these purposes, a severe financial hardship
shall have the same meaning as under Section 3.02(e). Notwithstanding the
foregoing, amounts deferred under the Stock Subaccount shall not be
distributable due to such a severe financial hardship if the Participant is a
Reporting Person. Upon such determination, the Participant will receive an
amount necessary to satisfy such financial hardship but in no event more than
the balance of the Participant's Supplemental Retirement Account Balance as of
the date of payment.
4.07 For purposes of any single sum payment made under Section 4.05(b) or
4.06, the Participant's request for such single sum payment shall designate the
deferral period or periods and the dollar amount or percentage of the
Participant's interest in his Cash Subaccount, Fund Subaccount and/or Stock
Subaccount (to the extent the Participant is not a Reporting Person at the time
of the single sum payment) with respect to each such deferral period that shall
be debited to derive the proceeds of the single sum payment. If the Participant
designates more
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than one deferral period, the actual proceeds of the single sum shall be derived
from the deferral periods in the order designated by the Participant, with the
deferrals and earnings in a deferral period being fully exhausted before
accessing each other deferral period according to the order designated by the
Participant. With respect to each such deferral period, the proceeds shall be
derived first from the Participant's deferrals to the Subaccount or Subaccounts
designated by the Participant on a last deferred, first distributed basis, and
then from earnings thereon.
5. SURVIVOR BENEFIT
5.01 If a Participant dies prior to the full distribution of his
supplemental retirement benefits and prior to the commencement of the
installment payments of his supplemental benefits, the Participant's designated
beneficiary or the Participant's estate (in the event no beneficiary is
designated) shall be entitled to a survivor benefit equal to the greater of (a)
the Participant's Supplemental Retirement Account Balance as of the
Participant's date of death, or (b) an amount equal to three (3) times the
deferrals (but not earnings) credited to the Participant's Cash Subaccount,
Stock Subaccount and Fund Subaccount for each Deferral Period that have not been
previously distributed to the Participant under Article 4. Such survivor
benefit shall be paid to the Participant's designated Beneficiary or estate (as
the case may be) in substantially equal monthly installments under the declining
balances methodology for a period of one hundred twenty (120) months, beginning
as soon as practical after the Participant's death. Notwithstanding the
preceding sentence, the Committee may approve a single sum payment of the
survivor benefit if such single sum is requested by the Beneficiary and
necessitated by severe financial hardship (as defined in Section 3.02(e)).
5.02 If a Participant dies prior to the full distribution of his
supplemental retirement benefits and after the commencement of the installment
payments of his supplemental benefits, the remaining installments shall be paid,
on their respective due dates, to the Participant's designated beneficiary or
the Participant's estate (in the event no beneficiary is designated).
Notwithstanding the preceding sentence, the Participant's designated beneficiary
or the representative of the Participant's estate (as the case may be) may
request a single sum distribution equal to the Participant's Supplemental
Retirement Account Balance as of the payment date; provided, however, if the
beneficiary or the representative of the estate (as the case may be) requests a
payment date within twelve (12) months of the date of such request, the single
sum payment shall equal the Participant's Termination Account Balance as of the
payment date and the amount that represents the difference between the
Participant's Supplemental Retirement Account Balance and Termination Account
Balance shall be permanently forfeited.
6. AMOUNTS OF SUPPLEMENTAL RETIREMENT AND SURVIVOR BENEFITS
The amount of the supplemental retirement and survivor benefits shall be
prescribed in accordance with a general plan applicable to all Participants
which has been established by the Committee and approved by the Management
Development and Compensation Committee of the Board of Directors.
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7. FINANCING
The Company may finance obligations under this Plan by the purchase of one
(1) or more policies of life insurance upon the lives of Participants, with the
Company as owner of and beneficiary under such policies. No Participant shall
have any right or interest in any such policy or the proceeds thereof or in any
other specific fund or asset of the Company as a result of the Plan. The rights
of Participants to benefit payments hereunder shall be no greater than those of
an unsecured creditor. Each Participant shall cooperate fully in the
application for, and in the maintenance of, any such policy or policies of
insurance upon the Participant's life.
8. AMENDMENT OR TERMINATION
8.01 The Board of Directors of the Company may, through written
resolutions, terminate or amend this Plan at any time, including a retroactive
amendment if necessary to bring this Plan into conformity with any law or
governmental regulation relating to plans or trusts of this character; provided,
however, that if the Plan is amended to discontinue or reduce the amount of
supplemental retirement benefits payments (except as may be required pursuant to
any plan arising from insolvency or bankruptcy proceedings) (a) any Participant
who has commenced receiving installment payments of his supplemental retirement
benefits prior to the effective date of the amendment shall continue to be paid
his supplemental retirement benefits in the amount and manner (as provided under
Articles 3 and 4 hereof) as they were being paid at the time of such amendment,
and (b) any Participant who has not commenced receiving installments payment of
his supplemental retirement benefits prior to the effective date of the
amendment shall be entitled to receive (i) the supplemental retirement benefits
accrued by such Participant as of the effective date of the amendment, with such
supplemental retirement benefits being paid in the form and at the time elected
by the Participant under Articles 3 and 4, and (ii) any legal fees and related
expenses incurred by the Participant in receiving such supplemental retirement
benefits (as permitted under Section 10.05) and interest under Section 10.06 (to
the extent applicable). Notwithstanding the preceding sentence, any written
employment agreement between the Executive Committee and any Participant
described in clause (b) of the preceding sentence shall govern to the extent
such agreement either amends or discontinues the Participant's supplemental
retirement benefits under the Plan, and Section 4.03 shall govern to the extent
any Participant is discharged for willful, deliberate or gross misconduct.
8.02 Notwithstanding the preceding provisions of Section 8.01, if the
reason for termination or amendment is a change in the tax laws adversely
affecting the financing of the supplemental retirement benefits or survivor
benefits under the Plan, then the Board of Directors of the Company may
terminate all (but not less than all) of the then existing Participation
Agreements except any under which benefits are then being paid.
(a) Each Participant with a terminated Agreement will be paid in lieu
of any and all other benefits hereunder an amount equal to the
Participant's Supplemental Retirement Account balance as of the date of
termination.
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(b) Such amount resulting from termination may be paid in a single
sum within forty-five (45) days of the date of such termination or in such
other manner and at such other time or times as the Committee may
reasonably determine.
9. ADMINISTRATION
9.01 Responsibility for establishing the requirements for participation
and for administration of the Plan shall be vested in the Committee, which shall
have the full and exclusive discretionary authority to interpret the Plan or the
Participation Agreements, to determine all benefits and to resolve all questions
arising from the administration, interpretation, and application of their
provisions, either by general rules or by particular decisions, including
determinations as to whether a claimant is eligible for benefits, the amount,
form and timing of benefits, and any other matter (including any question of
fact) raised by a claimant or identified by the Committee. The Committee may
delegate administrative tasks as necessary to persons who are not Committee
members. All decisions of the Committee shall be conclusive and binding upon
all affected persons.
9.02 The expenses of administering the Plan shall be borne by the Company.
No member of the Committee shall receive any remuneration for service in such
capacity. However, expenses of the Committee or its members paid or incurred in
connection with administering the Plan shall be reimbursed by the Company.
9.03 The Company shall indemnify and hold harmless the members of the
Committee against any and all claims, loss, damage, expense or liability arising
from any action or failure to act with respect to this Plan, except in the case
of gross negligence or willful misconduct.
10. CLAIMS PROCEDURE
10.01 Claim. Any person claiming a benefit, requesting an interpretation
or ruling under the Plan, or requesting information under the Plan shall present
the request in writing to the Committee which shall respond in writing as soon
as practicable.
10.02 Denial of Claim. If the claim or request is denied, the written
notice of denial shall state:
(a) The reasons for denial, with specific reference to the Plan
provisions on which the denial is based.
(b) A description of any additional material or information required
and an explanation of why it is necessary.
(c) An explanation of the Plan's claim review procedure.
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10.03 Review of Claim. Any person whose claim or request is denied or who
has not received a response within thirty (30) days may request review by notice
given in writing to the Committee. The claim or request shall be reviewed by
the Committee who may, but shall not be required to, grant the claimant a
hearing. On review, the claimant may have representation, examine pertinent
documents, and submit issues and comments in writing.
10.04 Final Decision. The decision on review shall normally be made
within sixty (60) days. If an extension of time is required for a hearing or
other special circumstances, the claimant shall be notified and the time limit
shall be one hundred twenty (120) days. The decision shall be in writing and
shall state the reasons and the relevant Plan provisions. All decisions on
review shall be final and bind all parties concerned.
10.05 Attorney's Fees and Expenses. In the event a Participant's claim for
benefits under this Plan is denied and the Participant successfully appeals the
denial of such claim under the foregoing procedures, the Company shall pay or
reimburse the legal fees and expenses directly incurred by the Participant in
connection with his appeal subject to a maximum payment or reimbursement of
one-third of the supplemental retirement benefits to which the Participant is
entitled. Any such legal fees and expenses shall be paid by the Company to, or
on behalf of, the Participant no later than thirty (30) days following the
Participant's written request for the payment of such legal fees and expenses,
provided the Participant supplies the Committee with evidence of the fees and
expenses incurred by the Participant that the Committee, in its sole discretion,
determines is sufficient.
10.06 Interest on Delayed Payments. Further, in the event a Participant's
claim for supplemental retirement benefits under this Plan is denied and the
Participant successfully appeals the denial of such claim under the foregoing
procedures, the Company shall pay to the Participant interest on the portion of
the Participant's supplemental retirement benefits that were not otherwise paid
when due because of the initial denial of the claim. For purposes of the
preceding sentence, interest shall accrue at an annual rate equal to the prime
rate as quoted in the Wall Street Journal as of the date the supplemental
retirement benefits would otherwise have been paid if the claim had not
initially been denied, plus five percent (5%), and shall be adjusted as
necessary to reflect any partial payment or payments of the amounts owed to the
Participant.
11. MISCELLANEOUS
11.01 No amount payable under the Plan or any Participation Agreement shall
be subject to assignment, transfer, sale, pledge, encumbrance, alienation or
charge by a Participant or the Beneficiary of a Participant except as may be
required by law.
11.02 Neither the Plan nor any action taken hereunder shall be construed as
giving any employee who is a Participant or who becomes a Participant any right
to be retained in the employ of the Company.
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11.03 "Retirement" under the Company Pension Plan shall mean retirement
under the Retirement Income Plan. However, in the event of any retirement
arising by reason of a "Change in Control" and which, as set forth in the
Retirement Income Plan, results in an enhancement of an employee Participant's
retirement income then:
(a) "Retirement" for purposes of this Plan shall mean the
Participant's sixty-fifth (65th) birthday; or
(b) A Participant may elect to treat retirement as "retirement" under
the Plan subject to the penalties imposed in an early retirement
opportunity under Section 4.04 of this Plan.
11.04 The Management Development and Compensation Committee of the Board of
Directors may at any time direct the Company to establish a trust to secure part
or all of the obligations of the Company with respect to payments and benefits
to be paid to Participants under this Plan. Funding of the trust shall be at
the direction of the Board of Directors and shall be irrevocable in nature.
Notwithstanding the foregoing, the assets of such trust shall be subject to the
claims of the general creditors of the Company in the event of bankruptcy or
insolvency of the Company.
11.05 In the event that the Committee shall find that a Participant or
other person entitled to benefits hereunder is unable to care for his or her
affairs because of illness or accident, the Committee may direct that any
benefit payment due him or her, unless claim shall have been made therefor by a
duly appointed legal representative, be paid to the Participant's spouse, child,
parent or other blood relative, or to a person with whom he or she resides, and
any such payment so made shall be a complete discharge of the liabilities of the
Company and the Plan therefor.
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