1
EXHIBIT 10.3(H)
109
2
EXHIBIT 10.3(H)
SALARY DEFERRAL AGREEMENT
THIS AGREEMENT, dated as of December __, 199___, between First American
Corporation (the "Company") and
(the "Executive").
WITNESSETH:
WHEREAS, the Executive is serving as an executive of the Company at an
annual rate of $____________ as of December __, 199___; and
WHEREAS, the Executive and the Company desire to enter into an
agreement with respect to the deferred payment of a portion of the Executive's
salary upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Company and the Executive hereby agree as follows:
1. $__________ of the Executive's 199___ annual salary will be deferred
by the Company, in equal installments, from the semi-monthly salary
payments paid to the Executive during such year. The deferred salary
is subject to FICA tax at the time the salary payments are made.
However, the Executive and the Company agree that the FICA tax will be
paid out of the remaining non-deferred balance, if any, of the
Executive's semi-monthly salary payments or, if the remaining
non-deferred balance is not sufficient to pay the FICA tax, by the
Executive's personal check payable to the Company and delivered to the
Payroll Department of the Company. Such deferred salary plus interest
computed and accrued as set forth in Article 2 hereof (the "Deferred
Compensation") will be payable to the Executive, the Executive's
designated beneficiary, or the Executive's estate as set forth in this
Agreement.
2. Interest will be credited to the Executive's account on
________________. Interest will accrue at a rate equal to that earned
on one-year treasury notes of the U. S. Government determined as of
December 31, 199___. Interest will accrue on the average daily
balance of the Executive's account beginning with the date on which
the deferred compensation or accrued interest is credited to the
Executive's account and ending with the date on which the deferred
compensation or accrued interest is actually paid.
Executive's Initials
110
3
The Executive may elect payment of the account balance either in
installments or in a lump sum. Installment payments will be computed by
dividing the combined total of deferred compensation and credited interest,
as of the prior year-end, by the number of installments remaining. Lump-sum
and final installment payments will include principal and interest credited
to the Executive's account as of the prior year-end and all interest accrued
subsequently in the year of payment.
3. Deferred Compensation will be paid to the executive following the first to
occur of the listed events and in accordance with the method of payment and
commencement date selected by the Executive on the attached Exhibit A
which is made a part of this Agreement.
Notwithstanding the foregoing, the Company will immediately pay the
Executive the Deferred Compensation in a lump sum in the event of a Change
in Control of the Company as defined in the 1991 Stock Option Plan and in
the event the Executive's employment is terminated, as defined below, within
two (2) years after the Change in Control has occurred:
(a) involuntarily, other than an involuntary termination for cause or
other than occurring as the result of death, disability, or
terminating at or after attaining normal retirement age, or
(b) voluntarily, following:
(i) any reduction in the Executive's (a) base salary from the
level existing at the time of the most recent Change in
Control, (b) in the combined base salary and annual bonus from
that for that the year immediately preceding the Change in
Control, or (c) annual bonus opportunity available immediately
preceding the Change in Control, or
(ii) any relocation to which the Executive has not agreed to an
office of the Company more than thirty-five (35) miles from
the office where Executive was located at the time of any
Change in Control or any increase in Executive's required
travel amounting to a constructive relocation, or
(iii) any material reduction in the level of responsibility,
position (including status, office, title, reporting
relationships or working conditions), authority or duties of
Executive immediately preceding the Change in Control, or
111
4
(iv) any material reduction in the aggregate fringe benefits and
perquisites available to Executive immediately preceding the
Change in Control not offset by salary or annual bonus increases,
or
(c) voluntarily if, following a Change in Control, any successor or
acquiror of Company either announces that it will not honor or cause
the Company to honor the terms of this Agreement or if, at any time,
the Company fails to confirm in writing to the Executive within
fifteen (15) business days of a request by Executive that it will
honor and will cause the Company to honor the terms of this Agreement.
The Executive should notify Human Resources immediately upon the
occurrence of the triggering event to ensure timely payment. For
purposes of Exhibit A, the term "effective date" means the Executive's
last day of employment.
For purposes of this Article 3, the Executive will be deemed to be
continuously employed by the Company or any affiliate of the Company if
the Executive is reemployed by the Company or an affiliate of the
Company within four weeks of the date the Executive's employment first
ceased.
4. The Executive will have the right to designate a beneficiary who, in the
event of the Executive's death prior to the payment of any or all of the
Deferred Compensation pursuant to this Agreement, will receive the unpaid
Deferred Compensation. Such designation will be made by the Executive on
the form attached hereto. The Executive may, at any time, change or
revoke such designation by written notice to the Director, Compensation
and Benefits.
5. (a) If the Executive dies prior to the receipt of any or all of the
Deferred compensation, no deferred Compensation will be paid for a
period of thirty days from the date the Director, Compensation and
Benefits, receives written notice of the Executive's death.
(b) As soon as practical following such thirty-day period, the unpaid
Deferred Compensation will be paid to the designated beneficiary
in a lump sum, unless the Executive's beneficiary elects within
such thirty-day period, by written notice to the Director,
Compensation and Benefits, that the deferred Compensation be paid
to such beneficiary in annual (2-10) installments or not
be paid at all.
(c) If the designated beneficiary predeceases the Executive, the unpaid
Deferred Compensation plus accrued interest will be paid to the
contingent beneficiary, if living, or the Executive's estate in
a lump sum as soon as practical.
(d) If the designated beneficiary dies after the Executive but
prior to the payment of the Deferred Compensation and has not
elected to receive such Deferred
112
5
Compensation, no Deferred Compensation will be paid for a
period of thirty days from the date the Director,
Compensation and Benefits receives written notice of the
death of the designated beneficiary. The Deferred
Compensation plus accrued interest will then be paid to
the contingent beneficiary, if living, or the estate of the
designated beneficiary in a lump sum as soon as practical.
6. The Company will pay to the Executive during the term of the
Executive's employment that portion of the Deferred Compensation which
will be necessary to meet a financial hardship arising from an
emergency. For purposes of this Article 6, such emergency payment
will be made only in instances of hardship arising from causes beyond
the Executive's control for unexpected and unreimbursed expenses and
only in the amount that the Human Resources Committee of the Board of
Directors of the Company (the "Human Resources Committee") determines
is necessary to meet the hardship. The Executive will apply to the
Human Resources Committee for any emergency payment under this Article
6 and will furnish to the Human Resources Committee such information
as the Executive deems appropriate and as the Company and counsel for
the Company deem necessary and appropriate to make such determination.
The determination of the Human Resources Committee as to whether a
payment is warranted under this Article 6, and the amount of such
payment, will be conclusive and binding on the Executive and Company.
7. The Deferred Compensation will be paid out of the general funds of the
Company and no funds will be set aside therefor. The Deferred
Compensation will be subject to the claims of the Company's general
creditors.
8. Any right under this Agreement to receive Deferred Compensation will
be non-assignable, and any attempted assignment will be null and void
and will extinguish the Company's obligation under this Agreement to
pay Deferred Compensation.
9. Any amount of salary deferred pursuant to this Agreement will be
included in the Executive's compensation base for purposes of
determining entitlements under the Master Retirement Plan and/or the
Supplemental Executive Retirement Plan, the life insurance plan and
short- and long-term disability plans.
10. The Executive and the Company acknowledge that this Agreement is not
an employment agreement between the Executive and the Company, and the
Company and the Executive each have the right to terminate the
Executive's employment at any time for any reason, unless there is a
written employment agreement to the contrary.
11. This Agreement will be binding upon any successor to the Company by
merger, consolidation, purchase or otherwise.
113
6
12. This Agreement, together with the Executive's beneficiary designation,
constitutes the entire agreement between the Company and the Executive
regarding the Deferred Compensation and will not be modified except
upon the written agreement of the Company and the Executive.
13. This Agreement will be governed in accordance with the laws of the
State of Tennessee.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
Executive
Social Security Number
FIRST AMERICAN CORPORATION
By:
Title:
Beneficiary: Name, Relationship, and Social Security Number
Contingent or Secondary Beneficiary: Name, Relationship, and Social
Security Number (if the beneficiary designated above is not living at the time
of the death of the employee)
Executive
114
7
EXHIBIT A
TO SALARY DEFERRAL AGREEMENT
DATED AS OF DECEMBER __, 199__
INSTRUCTIONS: Select one (1) Method of Payment and one (1) Commencement date
for each event listed and then initial the Exhibit where indicated. The "FIXED
DATE" event is optional and should not be completed unless some form of
distribution is desired prior to retirement or termination.
EVENT TRIGGERING PAYMENT
Early Retirement
----------------
METHOD OF PAYMENT COMMENCEMENT DATE
/ / Lump Sum = deferred amount plus / / February 1 of the year
accrued interest. following effective date of
early retirement.
/ / Annual Installments
Select 2-10: / / February 1 of the year
account balance plus interest following a fixed date after
credited thereto divided by early retirement. Insert year:
number of installments
outstanding. .
Normal Retirement
-----------------
METHOD OF PAYMENT COMMENCEMENT DATE
/ / Lump Sum = deferred amount plus / / February 1 of the year
accrued interest. following effective date of
normal retirement.
/ / Annual Installments
Select 2-10: / / February 1 of the year
account balance plus interest following a fixed date after
credited thereto divided by normal retirement. Insert
number of installments year:
outstanding.
.
Executive's Initials
115
8
EVENT TRIGGERING PAYMENT
Voluntary or Involuntary Termination
------------------------------------
METHOD OF PAYMENT COMMENCEMENT DATE
/ / Lump Sum = deferred amount plus / / February 1 of the year
accrued interest. following effective date of
voluntary or involuntary
/ / Annual Installments termination.
Select 2-10:
account balance plus interest / / February 1 of the year
credited thereto divided by following a fixed date after
number of installments voluntary or involuntary
outstanding. termination. Insert year:
.
Disability Termination
----------------------
METHOD OF PAYMENT COMMENCEMENT DATE
/ / Lump Sum = deferred amount plus / / February 1 of the year
accrued interest. following effective date of
disability termination.
/ / Annual Installments
Select 2-10: / / February 1 of the year
account balance plus interest following a fixed date after
credited thereto divided by disability termination. Insert
number of installments year:
outstanding.
.
Executive's Initials
THE TERM "EFFECTIVE DATE" MEANS THE EXECUTIVE'S LAST DAY OF EMPLOYMENT.
116
9
EVENT TRIGGERING PAYMENT
Fixed Date
Full Payment Optional
METHOD OF PAYMENT COMMENCEMENT DATE
/ / Lump Sum = deferred amount plus / / February 1 following fixed
accrued interest. date. Insert year: .
/ / Annual Installments
Select 2-10:
account balance plus interest
credited thereto divided by
number of installments
outstanding.
Fixed Date
Partial Payment (Optional)
METHOD OF PAYMENT COMMENCEMENT DATE
/ / Lump Sum = partial payment / / February 1 following fixed
amount with the remainder to be date. Insert year: .
paid as indicated by the first
appropriate event triggering
payment. Amount: $ or %
/ / Annual Installments
Select 2-10:
payment amount divided by
number of installments
outstanding with the remainder
to be paid as indicated by the
first appropriate event
triggering payment.
Executive's Initials
117