Exhibit 10.31
GATX CORPORATION
DIRECTORS' PHANTOM STOCK PLAN
SECTION 1. PURPOSE AND EFFECTIVE DATE.
The purpose of the Directors' Phantom Stock Plan (the "Plan") is to provide fees
to non-employee directors of GATX Corporation (the "Company") in the form of
common stock of the Company that is delivered on a deferred basis. To conform
the Plan to the requirements of section 409A of the Internal Revenue Code (the
"Code"), the terms of the Directors' Phantom Stock Plan are as set forth below,
effective with respect to amounts that were first accrued and vested under the
Plan after December 31, 2004.
SECTION 2. DEFINITIONS.
Unless the context otherwise requires, the following words as used herein shall
have the following meanings:
(a) AFFILIATE. The term "Affiliate" means any person with whom the Company is
considered to be a single employer under section 414(b) of the Code and any
person with whom the Company would be considered a single employer under
section 414(c) of the Code.
(b) BOARD. The term "Board" means the Board of Directors of the Company.
(c) PARTICIPANT. The term "Participant" means an eligible member of the Board
who participates in the Plan.
(d) QUARTER. The term "Quarter" means each of the three calendar month periods
ending on the last day of January, April, July and October, respectively.
(e) QUARTERLY PHANTOM STOCK AMOUNT. The term "Quarterly Phantom Stock Amount"
for any Quarter means the portion of a director's compensation required to
be paid in phantom stock for that quarter.
(f) SPECIFIED EMPLOYEE. The term "Specified Employee" shall be defined in
accordance with Treas. Reg. Section 1.409A-1(i) and such rules as may be
established by the Chief Executive Officer of the Company or his or her
delegate from time to time.
(g) TERMINATION DATE. An individual's "Termination Date" is the date on which
the individual ceases to serve on the boards of directors of the Company
and the Affiliates, subject to the following:
(i) A director will be deemed to have ceased to serve on the board of
directors of the Company and the Affiliates at the time the director and
the Company reasonably
anticipate that a level of bona fide services the individual would perform
for the Company and the Affiliates as a director after such date would
permanently decrease to no more than 20% of the average level of bona fide
services performed over the immediately preceding 36 month period (or the
full period of service to the Company and the Affiliates if the individual
has performed services as a director for the Company and the Affiliates for
less than 36 months).
(ii) The relationship as a director will be treated as continuing intact
while the individual is on a bona fide leave of absence (determined in
accordance with Treas. Reg. Section 1.409A-1(h)).
(h) UNFORESEEABLE EMERGENCY. The term "Unforeseeable Emergency" shall mean a
severe financial hardship to the Participant resulting from an illness or
accident of the Participant, the Participant's spouse, the Participant's
beneficiary, or the Participant's dependent; 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; provided, however, that the determination of Unforeseeable
Emergency shall be made by the Administrator in a manner that is consistent
with the meaning of Unforeseeable Emergency set forth in Treas. Reg.
Section 1.409A-3(i)(3).
SECTION 3. ELIGIBILITY.
Each member of the Board who is not an employee of the Company or the Affiliates
shall participate in the Plan as of the first day he/she begins service on the
Board.
SECTION 4. PHANTOM STOCK ACCOUNT.
The Company will maintain a Phantom Stock Account for each Participant. The
Phantom Stock Account will be credited each Quarter with the number of units of
phantom stock equal to the result obtained by dividing the portion of the
Quarterly Phantom Stock Amount by the average of the high and low price of the
Company's common stock on the New York Stock Exchange on the last trading day of
each Quarter. Until distribution as provided herein, the Participant's Phantom
Stock Account will be credited with additional units of phantom stock
representing dividends declared on the Company's common stock based on the
average of the high and low price of such stock on the New York Stock Exchange
on the date such dividend is paid. The last day of each Quarter shall be a
"Valuation Date" with respect to the Phantom Stock Account.
The Phantom Stock Account will be merely a bookkeeping entry on the Company's
books so that no trust or escrow arrangement will be used and the Participant
will remain a general, unsecured creditor with respect to his or her account. As
promptly as practicable following the end of each Quarter, a statement will be
sent to each Participant reflecting the balance in his or her Phantom Stock
Account as of the end of such Quarter.
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SECTION 5. DISTRIBUTIONS.
(a) Generally.
Subject to the following provisions of this Section 5, including without
limitation paragraph 5(d)(iii), a Participant's benefits will be
distributed in a lump sum within 30 days after the Quarter in which the
Participant's Termination Date occurs.
(b) Distributions to Specified Employees.
If a Participant is a Specified Employee at the Participant's Termination
Date, and distribution is made to the Participant by reason of the
occurrence of such Termination Date, distributions of benefits under the
Plan may not be made before the date that is six months after the
Participant's Termination Date or, if earlier, the date of death of the
Participant. At the end of the six-month period described in the preceding
sentence, amounts that could not be paid by reason of the limitation in
this Section (b) shall be paid on the first day of the seventh month
following the Termination Date.
(c) Distributions Upon Occurrence of Unforeseeable Emergency.
A Participant may request the Administrator to allow withdrawal from the
Participant's Accounts in the event of an Unforeseeable Emergency.
Distributions because of an Unforeseeable Emergency shall be limited to the
amount reasonably necessary to satisfy the emergency need (which may
include amounts necessary to pay any federal, state, local, or foreign
income taxes or penalties reasonably anticipated to result from the
distribution). However, in making the determination of amounts reasonably
necessary to satisfy the emergency need, the Administrator is not required
to take into account any additional compensation that due to the
Unforeseeable Emergency is available under another nonqualified deferred
compensation plan but has not actually been paid, or that is available due
to the Unforeseeable Emergency under another plan that would provide for
deferred compensation except due to the application of the effective date
provisions under Treas. Reg. Section 1.409A-6.
(d) General Distribution Rules.
Distributions of amounts under the Plan are subject to the following:
(i) Amount of Lump Sum Distributions. Distribution of a Participant's
benefits under the Plan shall be in shares of the Company's common stock
equal in amount to the number of units of phantom stock credited to the
Participant's Phantom Stock Account as of the Valuation Date coincident
with or immediately preceding the date on which the distribution is in fact
made. If, after the Valuation Date used to determine the number of shares
to be distributed, additional phantom units are credited to the
Participant's Phantom Stock Account, shares of stock with respect to the
additional phantom units shall be distributed as soon as practicable after
being credited.
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(ii) Deferrals During Year of Termination. For the avoidance of doubt, it
is recited that phantom units with respect to any calendar year shall be
allocated to the Participant's Accounts in accordance with the provisions
of the Plan and shall be distributed in accordance with the terms of the
Plan, regardless of whether the Participant's Termination Date occurs
during that year.
(iii) Permitted Date of Distribution. For purposes of Code section 409A, a
distribution will be considered to be made under the Plan as of the date
specified in the Plan if it is made no later than the end of the calendar
year in which such date occurs or, if later, by the 15th day of the third
calendar month following that specified date, provided that the Participant
is not permitted, directly or indirectly, to designate the taxable year of
the payment. The foregoing provisions of this paragraph (iii) are intended
to conform the payments under the Plan to the requirements of Code section
409A, and shall not be construed to permit delay by the Company of payment
of amounts due earlier in accordance with the Plan.
(iv) Fractional Shares. Cash shall be paid in lieu of any fractional share
of Company stock that would otherwise be distributed with respect to the
Phantom Stock Account.
(v) Application of Section 5. Distributions from a Participant's Phantom
Stock Account may only be made pursuant to the provisions of this Section
5.
SECTION 6. PARTICIPANT'S RIGHTS UNSECURED
No fund is to be created to meet payment obligations under this Plan, and the
right of a Participant to receive any unpaid portion of any amounts credited to
the Participant's Phantom Stock Account shall be an unsecured claim against the
general assets of the Company.
SECTION 7. NON-ASSIGNABILITY.
The right of a Participant to receive any unpaid portion of any amounts credited
to his or her Phantom Stock Account shall not be assigned, transferred, pledged
or encumbered or be subject in any manner to alienation or anticipation, except
that a Participant may designate, on forms provided by the Company, a
beneficiary to receive benefits under the Plan in the event of such
Participant's death.
SECTION 8. ADMINISTRATION.
The "Administrator" of this Plan shall be the Senior Vice President, Human
Resources of the Company, who shall have authority to adopt rules and
regulations for carrying out the Plan and to interpret and implement the
provisions hereof.
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SECTION 9. AMENDMENT AND TERMINATION
This Plan may at any time be amended, modified or terminated by the Board. No
amendment, modification or termination shall, without the consent of a
Participant, adversely affect such Participant's rights with respect to amounts
credited to the Participant's Phantom Stock Account. No amendment, modification,
or termination shall be adopted or effective if it would result in accelerated
recognition of income or imposition of additional tax under Code section 409A
or, except as otherwise provided in the amendment, would cause amounts that were
not otherwise subject to Code section 409A to become subject to section 409A."
SECTION 10. EXECUTION AND ADOPTION.
The Plan as set forth herein is hereby adopted by the undersigned officer of the
Company, on ______________, 2007.
GATX CORPORATION
By:
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Senior Vice President, Human Resources
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