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EXHIBIT 10-11
MCN CORPORATION
MANDATORY DEFERRED COMPENSATION PLAN
(AS AMENDED EFFECTIVE MAY 23, 1996)
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TABLE OF CONTENTS
SECTION PAGE
SECTION 1 ................................................... 1
TITLE, PURPOSE AND EFFECTIVE DATE
1.01. Title .................................. 1
1.02. Purpose ................................ 1
1.03. Effective Date ......................... 1
SECTION 2 ................................................... 1
DEFINITIONS
2.01. "Account" .............................. 1
2.02. "Affiliated Company .................... 1
2.03. "Annual Base Salary" ................... 2
2.04. "Annual Incentive Compensation" ........ 2
2.05. "Beneficiary" .......................... 2
2.06. "Board of Directors" ................... 2
2.07. "Code" ................................. 2
2.08. "Committee" ............................ 2
2.09. "Company" .............................. 2
2.10. "Covered Employee" ..................... 2
2.11. "Deferral" ............................. 2
2.12. "Deferral Form" ........................ 2
2.13. "Deferral Period" ...................... 3
2.14. "ERISA" ................................ 3
2.15. "FICA" ................................. 3
2.16. "In Pay Status" ........................ 3
2.17. "Participant" .......................... 3
2.18. "Performance Unit Award" ............... 3
2.19. "Plan" ................................. 3
2.20. "Plan Interest Rate" ................... 3
2.21. "Plan Year" ............................ 3
2.22. "Restricted Stock Plan" 3
2.23. "Savings Plan" ......................... 3
2.24. "Spouse" ............................... 3
2.25. "Total Compensation" ................... 3
SECTION 3 ................................................... 4
PARTICIPATION
3.01. Determination of Covered Employee Status 4
3.02. Commencement of Participation .......... 4
3.03. Deferral Form .......................... 4
3.04. Amount of Deferral ..................... 4
3.05. Increased Deferral ..................... 5
3.06. Denomination of Deferrals .............. 5
3.07. Establishment of Account ............... 5
SECTION 4 .................................................... 5
FUNDING OF BENEFITS
4.01. Unfunded Plan .......................... 5
4.02. Dividend Equivalents ................... 5
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SECTION PAGE
SECTION 5 ..................................................... 6
FORM AND TIMING OF PAYMENT
5.01. Form and Timing of Payment ............. 6
5.02. Change in Payment Option ............... 6
5.03. Hardship Withdrawal Benefits ........... 6
SECTION 6 ..................................................... 7
SELECTION OF AND PAYMENTS TO A BENEFICIARY .............. 7
6.01. Beneficiary Designation ................ 7
6.02. Change in Beneficiary Designation ...... 7
6.03. Pre-Retirement Survivor Benefit ........ 7
6.04. Post-Retirement Survivor Benefit ....... 7
SECTION 7 ..................................................... 7
VESTING OF BENEFITS
7.01. Vesting of Benefits .................... 7
SECTION 8 ..................................................... 8
ADDITIONAL PROVISIONS AFFECTING BENEFITS
8.01. Tax Withholding ........................ 8
8.02. Dilution and Other Adjustments ......... 8
SECTION 9 .................................................... 8
ADMINISTRATION OF THE PLAN
9.01. Duties and Power ....................... 8
9.02. Benefit Statements ..................... 9
SECTION 10 ................................................... 9
AMENDMENT, SUSPENSION, AND TERMINATION
10.01. Right to Amend or Terminate ............ 9
10.02. Right to Suspend ....................... 9
10.03. Non-ERISA Plan ......................... 9
10.04. Right to Accelerate .................... 9
SECTION 11 ................................................... 10
MISCELLANEOUS
11.01. Right to Continued Employment .......... 10
11.02. Prohibition Against Alienation ......... 10
11.03. Sayings Clause ......................... 10
11.04. Payment of Benefit of Incompetent ...... 10
11.05. Spouse's Interest ...................... 10
11.06. Successors ............................. 10
11.07. Gender, Number and Heading ............. 11
11.08. Legal Fees and Expenses ................ 11
11.09. Choice of Law .......................... 11
11.10. Affiliated Employees ................... 11
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SECTION PAGE
SECTION 12 ................................................... 11
CHANGE IN CONTROL PROVISIONS
12.01. General ................................ 11
12.02. Transfer to Rabbi Trust ................ 11
12.03. Joint and Several Liability ............ 11
12.04. Definition of Change in Control ........ 12
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MCN CORPORATION
MANDATORY DEFERRED COMPENSATION PLAN
SECTION 1
TITLE, PURPOSE AND EFFECTIVE DATE
1.01. Title. The title of this Plan shall be the "MCN Corporation
Mandatory Deferred Compensation Plan" and shall be referred to in this document
as the "Plan."
1.02. Purpose. The purpose of the Plan is to promote the success of MCN
Corporation (hereinafter referred to as the "Company") by providing the Company
a method to meet the deduction limitation in Section 162(m) of the Internal
Revenue Code of 1986, as amended, whereby Covered Employees of the Company and
its affiliated companies are required to defer the amount of compensation
payable in one calendar year in excess of $1 million until after completion of
the Deferral Period thereby increasing the employees' personal interest in the
continued success and progress of the Company.
It is intended that this Plan provide benefits for "a select group of
management or highly compensated employees" within the meaning of Sections 201,
301 and 401 of the Employee Retirement Income Security Act of 1974, as amended
(hereinafter referred to as "ERISA") and, therefore, to be exempt from the
provisions of Parts 2, 3 and 4 of Title I of ERISA.
1.03. Effective Date. The Plan shall be effective January 1, 1995.
SECTION 2
DEFINITIONS
The following words and terms used herein shall, unless the context
clearly requires a different meaning, have the respective meanings hereinafter
set forth.
2.01. "Account" means the record maintained by the Company of each
Participant's Deferrals, credited dividend equivalents and distributions under
the Plan.
2.02. "Affiliated Company" means any corporation while such corporation is
a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Company or any other employing entity while
such entity is
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under common control (within the meaning of Section 414(c) of the Code) with
the Company.
2.03. "Annual Base Salary" means annual base salary payable in the current
Plan Year after any deferrals under Sections 125, 129 or 401(k) of the Code and
after any election to defer an amount under the MCN Executive Deferred
Compensation Plan and the MichCon Supplemental Savings Plan and before any
payroll deduction for taxes or any other purpose, but excluding any bonus,
fringe benefit or other form of remuneration.
2.04. "Annual Incentive Compensation" means the cash compensation earned
in the current Plan Year and payable in the subsequent Plan Year under the MCN
Corporation Annual Management Performance Plan.
2.05. "Beneficiary" means the person, persons or entity designated in
writing by the Participant on forms provided by the Company to receive
distribution of certain death benefits under the Plan in the event of the
Participant's death.
2.06. "Board of Directors" means the Board of Directors of the Company.
2.07. "Code" means the Internal Revenue Code of 1986, as amended.
2.08. "Committee" means the Savings Plan Committee under the MichCon
Savings and Stock Ownership Plan (as defined in Section 2.23). The Committee
is responsible for the administration of the Plan.
2.09. "Company" means MCN, a Michigan corporation, its successors and
assigns, and any affiliated company.
2.10. "Covered Employee" means any employee with Total Compensation in
excess of $1 million who, on the last day of the taxable year, is the chief
executive officer ("CEO") of the Company or is acting in such capacity, or is
among the four highest compensated officers (other than the CEO) whose
compensation is required by the Securities Exchange Act of 1934 to be disclosed
in the Company's proxy statement.
2.11. "Deferral" means the amount of a Participant's Performance Unit
Award, Restricted Stock Award, Annual Incentive Compensation and/or Annual Base
Salary that must be deferred in accordance with Section 3 to reduce the
Participant's estimated Total Compensation to an amount less than $1 million
for a Plan Year. The source of the Deferral shall be at the discretion of the
Company's Director of Human Resources. Deferral amounts are retained by the
Company as part of its general assets.
2.12 "Deferral Form" means the deferral form described in Section 3.03
relating to a Participant's commitment to make a Deferral.
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2.13. "Deferral Period" means the period beginning with the date a
Participant becomes a Covered Employee and ending the day after the date the
Participant is no longer a Covered Employee.
2.14. "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
2.15. "FICA" means the Federal Insurance Contributions Act tax as set
forth in Chapter 26 of the Code.
2.16. "In Pay Status" means a benefit under the Plan that is currently
being paid or that is about to be paid to a Participant or Beneficiary under
Section 5.01, 6.01, 6.03 or 6.04.
2.17. "Participant" means a Covered Employee who has made a written
election on a properly executed Deferral Form to participate in the Plan in
accordance with Section 3.02.
2.18. "Performance Unit Award" means the final award under the MCN
Corporation Long Term Incentive Performance Unit Plan which is part of the MCN
Corporation Stock Incentive Plan.
2.19. "Plan" means the MCN Corporation Mandatory Deferred Compensation
Plan, as described herein and as hereafter amended.
2.20. "Plan Interest Rate" means the interest rate for the latest issue,
as of the end of the previous month, of ten-year U.S. Treasury Notes, or such
other rate as set by the Committee.
2.21. "Plan Year" means the period beginning January 1 and ending December
31 of each year (the calendar year).
2.22. "Restricted Stock Award" means the final award under the Restricted
Stock Program which is part of the MCN Corporation Stock Incentive Plan.
2.23. "Savings Plan" means the MichCon Savings and Stock Ownership Plan or
a successor thereto.
2.24. "Spouse" means an individual who is legally married to a Participant
under the laws of the State in which the Participant resides, on the day
immediately preceding the Participant's date of death.
2.25. "Total Compensation" means all remuneration for services received by
an employee in a calendar year, including cash and the cash value of all
noncash remuneration (including taxable benefits) less any amount deferred
under Sections 125, 129 and 401(k) of the Code, the MCN Executive Deferred
Compensation Plan and the MichCon Supplemental Savings Plan which is subject to
the deduction limitation described in Section 162(m) of the Code for such
calendar year.
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SECTION 3
PARTICIPATION
3.01. Determination of Covered Employee Status. To determine whether an
employee is a Covered Employee, the estimated Total Compensation of an
employee who would be a Covered Employee if such employee had Total
Compensation in excess of $1 million shall monitored.
3.02. Commencement of Participation. An employee shall become a
Participant upon execution of a Deferral Form no later than 15 days after the
execution of this Plan or the December 22 prior to the January 1 of the year
the Company has determined the employee will become a Covered Employee. A
properly executed Deferral Form shall be effective on the January 1 immediately
following execution of the Deferral Form, and shall contain the items described
in this Section and in Sections 3.03, 5.01 and 6.01. Subject to Section 5.03,
the mandatory deferral required by the Plan shall be effective for all Plan
Years the Participant is a Covered Employee and shall be irrevocable.
3.03. Deferral Form. The Committee shall provide each Covered Employee
with a Deferral Form as set forth in Exhibit A. A Participant shall file a
Deferral Form to defer Total Compensation in excess of $1 million for all Plan
Years in which he is a Covered Employee. A Participant's consent to the
mandatory deferral required by the Plan, as evidenced by his signature on the
Deferral Form, shall be irrevocable during the Deferral Period. The Deferral
Form shall set forth the Covered Employee's acceptance of the benefits provided
hereunder, his agreement to be bound by the terms of the Plan and such other
matters as are set forth in this Plan or deemed advisable by the Committee.
3.04. Amount of Deferral. A Participant's Deferral shall be equal to an
amount that will reduce the Participant's estimated Total Compensation for the
subsequent Plan Year to an amount less than $1 million. However, such annual
Deferral shall not exceed
(a) 100% of the Performance Unit Award less the FICA
tax thereon;
(b) 100% of the Restricted Stock Award less the FICA tax thereon;
(c) 100% of the Annual Incentive Compensation less
the FICA tax thereon; and
(d) 100% of Annual Base Salary less the FICA tax
thereon;
and shall not be less than $10,000.
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3.05. Increased Deferral. A Participant's Deferral shall increase
automatically for each Plan Year in which he is a Participant, up to the limits
set forth in Section 3.04.
3.06. Denomination of Deferrals. During the Deferral Period, a
Participant's Deferral shall be denominated in Company common stock valued at
an amount equal to the closing price of a share of Company common stock on the
New York Stock Exchange Composite Tape for the trading day preceding the day on
which a deferral is to be made. Dividend equivalents shall be credited to the
Participant's Account in accordance with Section 4.02. After completion of the
Deferral Period, the Participant's Account shall be valued on a cash basis with
interest credited monthly, as provided in Section 5.01.
3.07. Establishment of Account. The Committee shall establish an Account
for each Participant to which the Participant's Deferrals shall be credited,
dividend equivalents in accordance with Section 4.02 shall be reinvested and
distributions shall be debited.
SECTION 4
FUNDING OF BENEFITS
4.01. Unfunded Plan. The Plan shall be unfunded. All benefits payable
under the Plan shall be paid from the Company's general assets. The Company
shall not be required to set aside or hold in trust any funds for the benefit
of a Participant or Beneficiary, who shall have the status of a general
unsecured creditor with respect to the Company's obligation to make benefit
payments pursuant to the Plan. Any assets of the Company available to pay Plan
benefits shall be subject to the claims of the Company's general creditors and
may be used by the Company in its sole discretion for any purpose.
4.02. Dividend Equivalents. Dividend equivalents equal to 50% of the
dividends payable on MCN Common Stock shall be credited to a Participant's
Account during the Deferral Period based on the number of shares of Company
common stock deemed to be held in such Participant's Account. A Participant
may elect on his Deferral Form to have 0%, 50% or 100% of such credited
dividend equivalents paid directly to him in cash during the Plan Year. A
Participant's election regarding credited dividend equivalents shall be
effective on the January 1 immediately following execution of his Deferral Form
and shall remain in effect until revoked by the Participant. Revocation of a
dividend equivalent election shall be effective on the January 1 immediately
following revocation.
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SECTION 5
FORM AND TIMING OF PAYMENT
5.01. Form and Timing of Payment. After completion of his Deferral
Period, a Participant shall be entitled to a distribution of his Account on the
first of the month following the month in which his Deferral Period ends.
Notwithstanding the fact that a Participant's Account will be valued on a cash
basis after completion of the Deferral Period in accordance with Section 3.06,
the distribution to a Participant shall be paid in Company common stock equal
to the number of shares of Company common stock deemed to be held in the
Participant's Account and valued at the closing price of MCN Corporation common
stock on the New York Stock Exchange Composite Tape on the day before payment
is made. The distribution of Company common stock shall be made in accordance
with the Participant's selection on his Deferral Form; either in equal monthly
payments over a period not less than one year and not more than 15 years, in
one year increments, or as a lump sum distribution of the Participant's
Account. The number of shares distributed monthly shall be calculated to pay
out over the specified period the entire balance in the Participant's Account
as of the end of the Deferral Period with interest credited monthly on the
declining balance at the Plan Interest Rate. The number of shares distributed
monthly to the Participant shall be adjusted on January 1 of each year to
reflect changes in the Plan Interest Rate and other changes to the
Participant's Account balance.
5.02. Change in Payment Option. The payment option selected by the
Participant on his Deferral Form may be changed at any time by the Participant
by submitting a new payment selection to the Committee, but a change shall be
effective only if it is received by the Committee at least 36 months before
payments under the Plan commence.
5.03. Hardship Withdrawal Benefits. At any time prior to a distribution
in accordance with Section 5.01, a Participant may request that the Committee
make a distribution to him of all or part of his Account within 120 days. Such
distribution shall be made only if the Committee determines that the
Participant is suffering from a financial hardship that cannot be satisfied
from his normal sources of income, and the distribution shall be limited to the
amount required to meet the financial hardship. In making these
determinations, the Committee shall utilize the regulations proposed or adopted
by the U.S. Department of Treasury pursuant to Section 401(k) of the Code and
the rules under the Savings Plan. A financial hardship shall be satisfied from
the Plan to the extent possible then from the MCN Executive Deferred
Compensation Plan, the Supplemental Savings Plan, and finally from the Savings
Plan.
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SECTION 6
SELECTION OF AND PAYMENTS TO A BENEFICIARY
6.01. Beneficiary Designation. A Participant shall designate a Beneficiary
on his Beneficiary Designation Form, as provided in Exhibit B. The designation
of a Beneficiary other than the Participant's Spouse must be consented to in
writing by the Spouse. If a Participant has not designated a Beneficiary, or
if a designated Beneficiary is not living or in existence at the time of a
Participant's death, any death benefits payable under the Plan shall be paid to
the Participant's Spouse, if then living, and if the Participant's Spouse is
not then living, to the Participant's estate.
6.02. Change in Beneficiary Designation. A Participant may change the
designated Beneficiary, subject to the restriction in Section 6.01, from time
to time by filing a new written designation with the Committee. Such
designation shall be effective upon receipt by the Committee.
6.03. Pre-Retirement Survivor Benefit. If a Participant dies prior to
completion of the Deferral Period, his Beneficiary shall be entitled to receive
a distribution of the Participant's Account. The distribution to a Beneficiary
shall be paid in Company common stock equal to the number of shares of Company
common stock deemed to be held in the Participant's Account and valued at the
closing price of MCN Corporation common stock on the New York Stock Exchange
Composite Tape on the day of the Participant's death. The distribution shall
be paid in accordance with the Participant's selection on his Deferral Form;
either in monthly payments over a period not less than one year and not more
than 15 years, in one year increments, or as a lump sum distribution. Payments
to the Beneficiary shall begin as soon as practicable, but in no event later
than one year following the Participant's death.
6.04. Post-Retirement Survivor Benefit. If a Participant dies subsequent
to the start of his distribution payments under Section 5.01, his Beneficiary
shall be entitled to continue to receive the distribution of the Participant's
Account for the remainder of the period over which benefits were being paid to
the deceased Participant.
SECTION 7
VESTING OF BENEFITS
7.01. Vesting of Benefits. A Participant shall be 100% vested in his
benefits under the Plan at all times, except as set forth in Sections 8.02,
10.02, 10.03 and 10.04. A Participant shall rank as an unsecured creditor of
the Company for all benefits under the Plan.
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SECTION 8
ADDITIONAL PROVISIONS AFFECTING BENEFITS
8.01. Tax Withholding. Benefit payments hereunder shall be subject to
applicable federal, state or local tax withholding laws. A Participant shall be
responsible for making payment to MCN Corporation or a participating Affiliated
Company, as appropriate, in an amount equal to the income payroll tax
withholdings on the fair market value of the payments made in accordance with
Section 5.01. A Participant may sell up to 50 percent of a distribution made
under Section 5.01 on the open market to facilitate payment of the tax
withholdings. In no circumstance will the Company purchase or otherwise issue
cash for any stock distributed under this Plan.
8.02. Dilution and Other Adjustments. In the event of any change in the
outstanding shares of Company common stock by reason of any stock dividend,
stock split, recapitalization, merger, consolidation, spin-off, reorganization,
combination or exchange of shares or other similar corporate change, the
Committee, in its sole discretion, shall make the appropriate adjustment in
each Participant's Account. If any such adjustment shall result in a
fractional share, such fraction shall be disregarded. Such adjustments made by
the Committee shall be conclusive and binding for all purposes of the Plan.
SECTION 9
ADMINISTRATION OF THE PLAN
9.01. Duties and Power. The Committee shall be responsible for the
general administration of the Plan and the proper execution of its provisions.
It shall also be responsible for the interpretation of the Plan and the
determination of all questions arising thereunder. It shall maintain all
necessary books of accounts and records. It shall have power to establish,
interpret, enforce, amend, and revoke, from time to time, such rules and
regulations for the administration of the Plan and the conduct of its business
as it deems appropriate, including the right to remedy ambiguities,
inconsistencies and omissions (provided such rules and regulations are
uniformly applied to all persons similarly situated). Any action that the
Committee is required or authorized to take shall be final and binding upon
each and every person who is or may become a Plan Participant or Beneficiary.
The Committee may amend this Plan to comply with changes to the Code, so long
as the amendment does not materially increase the cost of maintaining the Plan
or decrease benefits to Participants or Beneficiaries.
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9.02. Benefit Statements. No later than 120 days after the end of each
Plan Year, the Committee will provide each Participant with a statement setting
forth the Participant's Account balance as of the last day of the immediately
preceding Plan Year.
SECTION 10
AMENDMENT, SUSPENSION, AND TERMINATION
10.01. Right to Amend or Terminate. The Plan may be amended or terminated
by the Board of Directors at any time. Such amendment or termination may
modify or eliminate any benefit hereunder except that such amendment or
termination shall not affect the rights of Participants or Beneficiaries to the
vested portion of a Participant's Account as of the date of such amendment or
termination.
10.02. Right to Suspend. If the Board of Directors determines that
payments under the Plan would have a materially adverse affect on the Company's
ability to carry on its business, the Board of Directors may suspend such
payments temporarily for such time as in it sole discretion it deems advisable,
but in no event for a period in excess of one year. During the period of
suspension, the payment of dividend equivalents shall continue to be made in
cash to the Participant in accordance with Section 5.01. The Company shall pay
such suspended payments in a lump sum distribution of Company common stock
immediately upon the expiration of the period of suspension.
10.03. Non-ERISA Plan. The Plan is intended to provide benefits for "a
select group of management or highly compensated employees" within the meaning
of Sections 201, 301 and 401 of ERISA, and therefore to be exempt from Sections
2, 3 and 4 of Title 1 of ERISA. Accordingly, the Plan shall terminate and,
existing Account balances and other benefits In Pay Status shall be paid in a
single, actuarially equivalent lump-sum and no further benefits, vested or
non-vested, shall be paid hereunder in the event it is determined by a court of
competent jurisdiction or by an opinion of counsel that the Plan constitutes an
employee pension benefit plan within the meaning of Section 3(2) of ERISA which
is not so exempt.
10.04. Right to Accelerate. The Board of Directors in its sole discretion
may accelerate all vested benefits upon termination of the Plan, and pay such
benefits in a single, actuarially equivalent lump-sum distribution of Company
stock.
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SECTION 11
MISCELLANEOUS
11.01 Right to Continued Employment. Nothing in the Plan shall create or
be construed as a contract between the Company and employees for any matter
including giving any person employed by the Company the right to be retained in
the Company's employ. The Company expressly reserves the right to dismiss any
person at any time, with or without cause, without liability for the effect
that such dismissal might have upon him as a Participant in the Plan.
11.02. Prohibition Against Alienation. Except as otherwise provided in
the Plan, no right or benefit under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or
charge, and any attempt to so anticipate, alienate, sell, transfer, assign,
pledge, encumber, or charge the same shall be void. No such right or benefit
shall be liable for or subject to the debts, contracts, liabilities,
engagements, or torts of the person entitled to such right or benefit.
11.03. Sayings Clause. If any provision of this Plan is held by a court
of competent jurisdiction to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision and the remaining
provisions hereof shall continue to be construed and enforced as if the invalid
or unenforceable provision had not been included.
11.04. Payment of Benefit of Incompetent. In the event the Committee
finds that a Participant, former Participant, or Beneficiary is unable to care
for his affairs because of his minority, illness, accident, or other reason,
any benefits payable hereunder may, unless other claim has been made therefor
by a duly appointed guardian, committee or other legal representative, be paid
to a spouse, child, parent, or other blood relative or dependent or to any
person found by the Committee to have incurred expenses for the support and
maintenance of such Participant, former Participant, or Beneficiary; and any
such payments so made shall be a complete discharge of all liability therefor.
11.05. Spouse's Interest. The interest in the benefits hereunder of a
Spouse who has predeceased the Participant shall automatically pass to the
Participant and shall not be transferable by such Spouse in any manner
including but not limited to such Spouse's will, nor shall such interest pass
under the laws of intestate succession.
11.06. Successors. In the event of any consolidation, merger, acquisition
or reorganization of the Company, the obligations of the Company under this
Plan shall continue and be binding upon the Company and its successors.
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11.07. Gender, Number and Heading. Whenever any words are used herein in
the masculine gender, they shall be construed as though they were also used in
the feminine gender in all cases where they would so apply. Whenever any words
used herein are in the singular form, they shall be construed as though they
were also used in the plural form in all cases where they would so apply.
Headings of sections and subsections as used herein are inserted solely for
convenience and reference and constitute no part of the Plan.
11.08. Legal Fees and Expenses. The Company shall pay all legal fees and
expenses that a Participant may incur as a result of the Company contesting the
validity, enforceability, or the Participant's interpretation of, or
determinations under this Plan, other than Section 5.03.
11.09. Choice of Law. This Plan shall be governed by and construed in
accordance with the laws of the State of Michigan to the extent not superseded
by applicable federal statues or regulations.
11.10. Affiliated Employees. Transfers of employment between Affiliated
Companies and the Company or other Affiliated Companies will be treated as
continuous and uninterrupted service under the Plan.
SECTION 12
CHANGE IN CONTROL PROVISIONS
12.01. General. In the event of a Change in Control, as defined in
Section 12.04, then notwithstanding any other provision of the Plan, the
provisions of this Section 12 shall be applicable and shall supersede any
conflicting provisions of the Plan.
12.02. Transfer to Rabbi Trust. The Company has established a trust
pursuant to a Trust Agreement dated January 3, 1991 (the "Rabbi Trust"). The
terms of the Rabbi trust provide that, in the event of a Change in Control and
thereafter, assets are to be transferred to such trust to provide benefits
under the Plan. The Company shall make all transfers of funds required by such
Rabbi trust in a timely manner and shall otherwise abide by the terms of such
Rabbi trust.
12.03. Joint and Several Liability. Upon and at all times after a Change
in Control, the liability under the Plan of the Company and each Affiliated
Company that has adopted the Plan shall be joint and several so that the
Company and each such Affiliated Company shall each be liable for all
obligations under the Plan to each employee covered by the Plan, regardless of
the corporation by which such employee is employed.
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12.04 Definition of Change in Control. A "Change of Control" means:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisition shall not constitute a Change
of Control: (A) any acquisition directly from the Company (excluding an
acquisition by virtue of the exercise of a conversion privilege), (B) any
acquisition by the Company, (C) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company or (D) any acquisition by any corporation pursuant to
a reorganization, merger or consolidated, if, following such reorganization,
merger or consolidation, the conditions described in clauses (i), (ii) and
(iii) or subsection (c) of this Section 12.04 are satisfied; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board; or
(c) Approval by the shareholders of the Company of a reorganization,
merger or consolidation, in each case, unless, following such reorganization,
merger or consolidation, (i) more than 60% of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation in substantially the same proportions
as their ownership, immediately prior to such reorganization, merger or
consolidation, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be (ii) no person (excluding the Company,
any employee benefit plan or related trust) of the Company or such corporation
resulting from such reorganization, merger or consolidation and any Person
beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 20% or more of the Outstanding Company
Common Stock or Outstanding Voting Securities, as the case
-12-
17
may be beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation or the combined
voting power of the then outstanding voting securities or such corporation
entitled to vote generally in the election of directors and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or
(d) Approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other disposition
of all or substantially all of the assets of the Company, other than to a
corporation, with respect to which following such sale or other disposition,
(A) more than 60% of, respectively, the then outstanding shares of common stock
of such corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the
election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be, (B)
no person (excluding the Company and any employee benefit plan (or related
trust) of the Company or such corporation and any Person beneficially owning,
immediately prior to such sale or other disposition, directly or indirectly,
20% or more of the Outstanding Company Common Stock or Outstanding Company
Voting Securities, as the case may be beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the
election of directors and (C) at least a majority of the members of the board
of directors of such corporation were members of the Incumbent Board at the
time of the execution of the initial agreement or action of the Board providing
for such sale or other disposition of assets of the Company.
-13-
18
IN WITNESS WHEREOF, MCN Corporation has caused this Plan to be executed as
of this 23rd day of May, 1996.
MCN CORPORATION
By:/s/ Daniel L. Schiffer
-----------------------
Daniel L. Schiffer, Vice President,
General Counsel and Secretary
-14-
19
EXHIBIT A
MCN CORPORATION
MANDATORY DEFERRED COMPENSATION PLAN
DEFERRAL FORM
==============================================================================
Employee Name (Print) Social Security No. I. D. Number
- ------------------------------------------------------------------------------
Address (Number/Street) City State Zip Code
==============================================================================
In accordance with the terms of the MCN Corporation Mandatory Deferred
Compensation Plan ("Plan" ), which is hereby incorporated by reference, I
hereby accept and agree to all the provisions of the Plan and irrevocably elect
pursuant to Section 3 of the Plan to have all Total Compensation paid to me in
excess of $1 million in any calendar year in which I am a Covered Employee
deferred until completion of the Deferral Period.
Benefit Payment Election
That the amount deferred shall be paid to me after completion of the Deferral
Period in the manner specified below:
Lump-sum payment of MCN Corporation common stock.
-------
Payment in monthly installments of MCN Corporation common
------- stock over years (in 1 year increments, not to
exceed 15 years)
I understand that, notwithstanding the above benefit payment election, I may be
eligible for a hardship withdrawal pursuant to Section 5 of the Plan.
Dividend Payment Election
- -------------------------
I hereby elect to have the dividend equivalents credited to my Account paid as
specified below:
All reinvested in my Account and denominated in shares of MCN
-------- Corporation common stock
50% reinvested in my Account, denominated in shares of MCN
-------- Corporation common stock, and 50% paid directly to me in cash
100% paid directly to me in cash
--------
==============================================================================
Employee Signature Date
- ------------------------------------------------------------------------------
Receipt Acknowledged By Title Date
===============================================================================
May 23, 1996
20
EXHIBIT B
MCN CORPORATION
MANDATORY DEFERRED COMPENSATION PLAN
BENEFICIARY DESIGNATION FORM
==============================================================================
Employee Name (Print) Social Security No. I. D. Number
- ------------------------------------------------------------------------------
Address (Number/Street) City State Zip Code
==============================================================================
I hereby designate, pursuant to Article 6 of the above-referenced plan,
the below designated person(s) as my beneficiary in the event of my death:
==============================================================================
Beneficiary's Name Address
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
I UNDERSTAND THAT THE DESIGNATION OF A BENEFICIARY OTHER THAN MY SPOUSE
MUST BE CONSENTED TO IN WRITING BY MY SPOUSE.
In the event any of the above-named beneficiaries should predecease me, or
shall survive me but die before receiving all amounts to be paid, I hereby
name the following as a contingent beneficiary to receive any such unpaid
amounts:
==============================================================================
Beneficiary's Name Address
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
In the event none of the above-named beneficiaries survive me, any unpaid
amounts shall be paid to my lawful successor in interest. I reserve the
right to change this beneficiary designation at any time by filing with
the Committee or its Designee a new beneficiary designation form.
I UNDERSTAND THAT MY MOST RECENT ELECTION AS TO THE BENEFICIARY
DESIGNATION WILL APPLY TO ALL DEFERRALS BY ME UNDER THE PLAN.
==============================================================================
Employee Signature Date
- ------------------------------------------------------------------------------
Receipt Acknowledged By Title Date
==============================================================================
Spousal Consent: I hereby consent to the designation of beneficiary set fourth
herein.
==============================================================================
Spouse's Signature Date
- ------------------------------------------------------------------------------
Witness Date
==============================================================================