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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 December 31 of
each year. Interest will accrue at a rate equal to that earned on
one-year treasury notes of the U. S. Government determined as of the prior
December 31. 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.
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.
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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) combined base salary and annual bonus
from that for 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
(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 re-employed 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
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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.
(c) If the designated beneficiary predeceases the Executive, the
unpaid Deferred Compensation 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 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 or, if the contingent beneficiary does not
survive the Executive, 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 that will be
necessary to meet a financial hardship arising from an unforeseen
emergency. For purposes of this Article 6, such emergency payment will be
made only in instances of hardship arising from an unanticipated emergency
that is caused by an event beyond the control of the Executive and that
would result in severe financial hardship to the Executive if early
withdrawal were not permitted. Any early withdrawal approved by the Human
Resources Committee is limited to the amount necessary to meet the
emergency. The circumstances that will constitute an unforeseeable
emergency will depend upon the facts of each case, but, in any case,
payment may not be made to the extent that such hardship is or may be
relieved:
(a) through reimbursement or compensation by insurance or
otherwise,
(b) by liquidation of the Executive's assets, to the extent the
liquidation of such assets would not itself cause severe financial
hardship, or
(c) by cessation of deferrals under this Agreement.
Examples of what are not considered to be unforeseeable emergencies
include the need to send an Executive's child to college or the desire to
purchase a home. 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.
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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. The Executive will have the status of a general unsecured
creditor of the Company and this Agreement constitutes a mere promise by
the Company to make Deferred Compensation payments in the future. It is
the intention of the parties that this Agreement is to be unfunded for tax
purposes and for purposes of Title I of ERISA.
8. Any right under this Agreement to receive Deferred Compensation will not
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by creditors of
the Executive or the Executive's beneficiary. Any attempted assignment
will be null and void.
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 First American Corporation Supplemental Executive
Retirement Program, the Life Insurance Plan and Short and Long Term
Disability Plans. Salary deferred under this Agreement will not be
eligible for deferral under the FIRST Plan.
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.
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.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
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Executive
Social Security Number:
FIRST AMERICAN CORPORATION
By:
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Martin E. Simmons
Executive Vice President-Administration,
General Counsel, and Corporate Secretary
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)
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Executive
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EXHIBIT A
TO SALARY DEFERRAL AGREEMENT
DATED AS OF _________, 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 [ ] February 1 of year
Select 2-10: ___________________ = following a fixed date
account balance plus interest after early retirememt.
credited thereto divided by number Insert year:
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 early retirement
[ ] Annual Installments [ ] February 1 of year
Select 2-10: ___________________ = following a fixed date
account balance plus interest after early retirement.
credited thereto divided by number Insert year:
of installments outstanding.
------------------.
Executive's Initials
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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 termination.
[ ] Annual Installments [ ] February 1 of year
Select 2-10: ___________________ = following a fixed
account balance plus interest date after voluntary or
credited thereto divided by number involuntary termination.
of installments outstanding. 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 [ ] February 1 of year
Select 2-10: ___________________ = following a fixed
account balance plus interest date after disability
credited thereto divided by number determintation.
of installments outstanding. Insert year:
---------------------.
Executive's Initials
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THE TERM "EFFECTIVE DATE" MEANS THE EXECUTIVE'S LAST DAY OF EMPLOYMENT.
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EVENT TRIGGERING PAYMENT
Fixed Date
Full Payment (Optional)
METHOD OF PAYMENT COMMENCEMENT DATE
[ ] Lump Sum = deferred amount plus [ ] February 1 following
accrued interest. fixed date
Insert year:
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[ ] 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 amount [ ] February 1 following
with the remainder to be paid as fixed date.
indicated by the first appropriate Insert year:
event triggering payment
------------------- .
[ ] Annual Installments Amount: $ or %
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
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