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EXHIBIT 10(g)
THE LAIDLAW ENVIRONMENTAL SERVICES, INC.
U.S. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
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This Plan was adopted by the Board of Directors of Laidlaw Environmental
Services, Inc. effective October 14, 1997.
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TABLE OF CONTENTS
ARTICLE PAGE
1 Introduction 1
2 Definitions 2
3 Eligibility and Service 7
4 Supplemental Benefits 8
5 Normal and Optional Forms of Benefits 12
6 Death Benefits 13
7 Future of the Plan 15
8 General Provisions 16
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ARTICLE 1
INTRODUCTION
1.01 Laidlaw Environmental Services, Inc. (hereinafter known as "LES")
hereby establishes the Laidlaw Environmental Services, Inc. U.S.
Supplemental Executive Retirement Plan (the "Plan") for the purpose of
providing supplemental benefits as hereinafter described.
1.02 Supplemental benefits payable under this Plan will be paid in addition
to benefits paid under any other retirement arrangement sponsored by a
participating employer. However, this Plan supersedes the Laidlaw Inc.
U.S. Supplemental Executive Retirement Arrangement adopted by the Board
of Directors of Laidlaw Inc. effective April 1, 1995 (the
"Arrangement"). Duplicate benefits will not be paid from this Plan and
the Arrangement.
1.03 The effective date of this Plan is October 14, 1997.
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ARTICLE 2
DEFINITIONS
In this Plan, the following terms and expressions will have the following
meanings, unless a different meaning is required by the context.
2.01 ACTUARIAL EQUIVALENT means a supplemental benefit of an equivalent
value where such equivalent benefit is established using actuarial
tables, actuarial assumptions and methodology as may be selected by the
Company on the recommendation of the Actuary.
2.02 ACTUARY means a Fellow of the Society of Actuaries, as appointed by the
Company.
2.03 AFFILIATED COMPANY means any subsidiary company of LES or any company
related to or associated with LES.
2.04 BENEFICIARY means the person designated by a Member under Article 6 and
means the Member's estate where there is no such person.
2.05 BOARD OF DIRECTORS means the board of directors of Laidlaw
Environmental Services, Inc., or such Committee to which such board of
directors may delegate its authority in respect of this Plan.
2.06 COMPANY means Laidlaw Environmental Services, Inc. (LES) and any
related, affiliated, associated or subsidiary company which may be
designated as a participating employer by the Company and which has
agreed to participate in the Plan. Where any reference in the Plan is
made to any action to be taken, consent, approval or opinion to be
given,
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discretion or decision to be exercised by the Company, Company means
LES, acting through the Board of Directors or any person authorized by
the Board of Directors for purposes of the Plan.
2.07 CONTINUOUS SERVICE means the years and completed months of an
Employee's uninterrupted period of employment with the Company since
the Employee's last date of hire by the Company, except that where the
Employee was previously employed by another unrelated company,
Continuous Service shall mean the years and completed months of an
Employee's uninterrupted period of employment with the Company since
the date of acquisition of the shares of that unrelated company by the
Company. Notwithstanding the foregoing, Continuous Service shall not
include any notice period related to termination of employment
(including pay in lieu of notice of termination of employment), unless
required by law and only to the extent required by law.
2.08 CREDITED SERVICE of a Member means the aggregate of Credited Past
Service and Credited Future Service as follows:
(a) CREDITED PAST SERVICE
Continuous Service prior to the effective date of an Employee's
becoming a Member hereunder, provided the Human Resource and
Compensation Committee has consented to the granting of such past
service for the purposes of this Plan and has so notified the
Member in writing; and
(b) CREDITED FUTURE SERVICE
Continuous Service from the later of October 14, 1997 or the date
the Employee becomes a Member in this Plan in accordance with
Article 3.
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2.09 EARNINGS in respect of a month of service during a particular fiscal
year means one-twelfth of the aggregate of:
(a) the Employee's base salary received in such complete fiscal year
from the Company (exclusive of any allowances); and
(b) bonuses and other incentive payments received in cash that are
attributable to such fiscal year, up to a maximum of the targeted
bonus payable to the Member in respect of such fiscal year (as
determined under the Company's annual incentive program).
"Earnings" shall not include any severance payments (i.e. or pay in
lieu of reasonable notice of termination of employment), unless
required by law and only to the extent required by law.
For the purposes of this paragraph, where, at the time of determination
of an Employee's "Earnings", an Employee has not worked for the
entirety of a particular fiscal year, for the purposes of determining
the Employee's Earnings for that fiscal year, the salary received and
bonus attributed to that fiscal year under paragraph (a) and (b) above
shall be divided by the number of whole or partial months service in
that fiscal year.
2.10 EMPLOYEE means any person in full-time employment with the Company who
is a resident of the US.
2.11 FINAL AVERAGE EARNINGS calculated as of any date on or after April 1,
2000 means twelve times the highest average of the Member's Earnings
during any 60 consecutive months of service with the Company and/or an
Affiliated Company within the 10 year period preceding the Member's
retirement, death or termination of employment. If a Member has not
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completed 60 consecutive months of service as of the calculation date,
Final Average Earnings will be based on the average of the Member's
Earnings during the Member's period of consecutive service ending on
such calculation date.
Final Average Earnings calculated as of any calculation date prior to
April 1, 2000 means twelve times the average of the Member's earnings
during the 60 consecutive months of service with the Company and/or an
Affiliated Company ending on the calculation date. If a Member has not
completed 60 consecutive months of service as of the calculation date,
Final Average Earnings will be based on the average of the Member's
Earnings during the Member's period of consecutive service ending on
such calculation date.
2.12 HUMAN RESOURCE AND COMPENSATION COMMITTEE means the Human Resource and
Compensation Committee of the Board of Directors.
2.13 INTERNAL REVENUE CODE MAXIMUM COMPENSATION LIMIT at a particular time
means the "compensation limit" as defined under Section 415(d) of the
Internal Revenue Code of 1986 and the Regulations thereunder, as
amended from time to time. As at October 14, 1997, the "compensation
limit" is $150,000.
2.14 MEMBER means an Employee or former Employee who has been designated as
eligible to participate in the Plan under Article 3 and who continues
to be eligible to receive supplemental benefits under this Plan.
2.15 PLAN means this Laidlaw Environmental Services, Inc. U.S. Supplemental
Executive Retirement Plan, as amended or restated from time to time.
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2.16 RETIREMENT AGE at a particular time, means the age upon which an
individual can claim an unreduced pension under the United States
Social Security Act and Regulations thereunder.
2.17 STATUTORY BENEFIT OFFSET at a particular time means the maximum annual
"primary insurance amount" under the United States Social Security Act
and the Regulations thereunder, as amended from time to time, payable
at the date the Member attains the Retirement Age. Where a Member
demonstrates to the satisfaction of the Company that upon attaining the
Retirement age he or she is entitled to a pension benefit under the
Social Security Act and Regulations thereunder that is less than the
maximum annual primary insurance amount as described above, the
Statutory Benefit Offset in respect of that Member shall be that lesser
amount.
2.18 TOTAL DISABILITY means a disability in respect of which the Member is
entitled to benefits from the Company's long-term disability program.
2.19 VESTED CREDITED SERVICE has the meaning described in Section 4.04.
In this Plan, unless the context requires otherwise, reference to the male
gender will include the female gender and words importing the singular number
only include the plural number and vice versa.
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ARTICLE 3
ELIGIBILITY AND SERVICE
3.01 MEMBERSHIP
An Employee will become a Member under this Plan upon being:
(a) recommended by the Chief Executive Officer of the Company for
participation in this Plan; and
(b) approved for participation by the Human Resource and
Compensation Committee, and such membership shall be effective
on the date determined by the Human Resource and Compensation
Committee in respect of such Member.
3.02 DISABILITY
If the Member suffers from a Total Disability, such period of
disability will be excluded from Credited Service. If the Member's
Total Disability continues until he attains age 65, the Member will be
deemed to have retired from employment and his supplemental benefits
will be determined based on:
(a) the formula set out in Section 4.01;
(b) Credited Service accrued to the date the Total Disability
commenced;
(c) for the purposes of Article 4, Continuous Service accrued to
the date the Total Disability commenced; and
(d) Final Average Earnings at the date the Total Disability
commenced.
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ARTICLE 4
SUPPLEMENTAL BENEFITS
4.01 BENEFIT FORMULA
The annual supplemental benefit formula is equal to ({A +B} - C) x D as
follows:
where:
A is 1% of the lesser of (i) the Member's Final Average Earnings; and
(ii) the Internal Revenue Code maximum Compensation Limit;
B is 1.5% of the amount by which the Member's Final Average Earnings
exceeds the Internal Revenue Code Maximum Compensation Limit;
C is, assuming the Member has attained the Retirement Age, 1/35th of the
Statutory Benefit Offset, determined on the date of termination of
employment, or death, as the case may be, and prior to the Member
attaining the Retirement Age, nil; and
D is the aggregate of the number of whole or partial years of the
Member's Vested Credited Service, as determined under Section 4.04.
4.02 PENSION COMMENCEMENT
A Member will be entitled to an annual supplemental benefit calculated
according to the formula in Section 4.01 and based on Vested Credit
Service and Final Average Earnings as at the date of termination of the
Member's employment, commencing the first day of the month coincident
with or next following such Member attaining the age of 65.
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4.03 EARLY RETIREMENT
A Member who retires from employment with the Company on or after the
attainment of age 60 and before attainment of age 65 and who elects to
have this provision apply to him will be entitled to an annual
supplemental benefit, commencing on the first day of the month
coincident with or next following such Member's actual retirement date
and such other date selected by him that is prior to the Member's
attainment of age 65, equal to the supplemental benefit calculated
according to the formula in Section 4.01 and based on the Vested
Credited Service and the Member's Final Average Earning at the Member's
actual retirement date. Such supplemental benefit will be reduced by
0.1667% for each complete month that the date of commencement of
payment of benefits precedes the Member's attainment of age 65. A
Member can elect to have this provision apply to him by giving written
notice to the Company of such election, which notice must be received
by the Company prior to the day that the Member elects that
supplemental benefits will commence to become payable to him.
4.04 VESTED CREDITED SERVICE
For the purposes of this Plan, Vested Credited Service is the sum of
Vested Credited Future Service and Vested Credited Past Service, as
defined below:
(a) VESTED CREDITED FUTURE SERVICE
A Member's Vested Credited Future Service is equal to the Member's
Credited Future Service multiplied by the relevant vesting
percentage contained in the following chart, based on the number of
full years of the Member's Credited Future Service rendered after
becoming a Member of this Plan.
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YEARS OF CREDITED FUTURE RELEVANT VESTING PERCENTAGE
SERVICE RENDERED AFTER
BECOMING A MEMBER
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less than 1 year 0%
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1 or more years but less than 2 years 20%
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2 or more years but less than 3 years 40%
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3 or more years but less than 4 years 60%
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4 or more years but less than 5 years 80%
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5 or more years 100%
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Where a Member suffers from a Total Disability, such period of Total
Disability shall be considered to be Credited Future Service rendered
after becoming a Member for the purposes only of determining the
relevant vesting percentage in the above chart.
(b) VESTED CREDITED PAST SERVICE
A Member's Vested Credited Past Service is equal to the Member's
Credited Past Service if the Member:
(i) dies, at any age, and such death occurs prior to the
commencement of payment of supplemental benefits under
this Plan;
(ii) retires from employment with the Company on or after the
attainment age 60; or
(iii) terminates employment with the Company before age 60,
provided the Member neither voluntarily terminates his
employment with the Company nor is dismissed for just
cause.
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For the purposes of this Section 4.04(b), the Human Resource and
Compensation Committee will determine what constitutes "just cause"
and whether a particular Member has been dismissed for just cause
or has voluntarily terminated his employment with the Company.
In any other case, a Member's Vested Credited Past Service is nil.
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ARTICLE 5
NORMAL AND OPTIONAL FORMS OF BENEFITS
5.01 NORMAL FORM
The normal form of supplemental benefit payable under this Plan is an
annuity payable in monthly installments for the life of the Member and,
in any event, for a period of not less than 60 months. If the Member
dies before receiving 60 monthly payments, the Member's Beneficiary
will receive the remaining payments at the same time and in the same
amount that the Member would have received, had he not died.
5.02 OPTIONAL FORMS
In lieu of the normal form of supplemental benefit described in Section
5.01, the Member may elect, before supplemental benefit payments
commence, any other form of periodic lifetime annuity acceptable to the
Human Resource and Compensation Committee (the "Optional Form"), which
Optional Form will be the Actuarial Equivalent of the normal form of
supplemental benefit described in Section 5.01.
Where the Member wishes to elect an Optional Form, the Member must so
advise the Company, in writing, at least 30 days before the date
benefit payments would otherwise have commenced under this Plan.
Section 5.01 will apply where the Member has not provided such written
notice to the Company in the specified time period.
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ARTICLE 6
DEATH BENEFITS
6.01 BENEFICIARY DESIGNATION
A Member may designate, by written notice delivered to the Committee, a
Beneficiary to receive any benefits that are payable with respect to
the Member on or after the death of the Member. A Member may revoke or
amend such designation in the same manner at any time, subject to any
applicable laws governing the designation of beneficiaries.
6.02 NO BENEFICIARY
If no valid Beneficiary designation is in effect for the Member at his
death, or if the Beneficiary predeceases the Member, any benefit
payable to the Member's Beneficiary will be paid to the estate of the
Member in accordance with this Plan.
6.03 DEATH OF A BENEFICIARY
If a Beneficiary, as a result of a Member's death, is entitled to
payments under this Plan and the Beneficiary dies before receiving any
or all of the payments due to him, any remaining guaranteed monthly
payments will continue to be paid to the estate of the Beneficiary.
6.04 DEATH BEFORE SUPPLEMENTAL BENEFIT COMMENCEMENT
Notwithstanding Sections 4.02 and 4.03, if the Member dies before the
payment of supplemental benefits have commenced, the Member will be
deemed to have retired the day before his death and the Member's
Beneficiary will receive a supplemental benefit equal to the benefit
determined in accordance with Section 4.01, and payable for 60 months,
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commencing on the first day of the month coincident with or next
following the Member's death.
6.05 DEATH AFTER SUPPLEMENTAL BENEFIT COMMENCEMENT
If a Member dies after the Member's supplement benefits have commenced
being paid, any benefits payable under this Plan will be determined and
payable in accordance with Article 5.
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ARTICLE 7
FUTURE OF THE PLAN
7.01 RIGHT TO AMEND OR TERMINATE THE PLAN
The Human Resource and Compensation Committee reserves the right to
amend or discontinue this Plan at any time, either in whole or in part,
at its discretion, provided such amendment or termination, as
applicable, does not reduce benefits under this Plan accrued to the
date of amendment or termination of the Plan, as applicable, based on a
Member's Final Average Earnings and Credited Service at the date of
such amendment or termination, as applicable.
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ARTICLE 8
GENERAL PROVISIONS
8.01 ADMINISTRATION
The Company will administer this Plan. The Company:
(a) will be responsible for all matters relating to the administration
of this Plan;
(b) may delegate such matters as it deems appropriate to be performed
by the committee or by one or more agents;
(c) will decide conclusively all matters relating to the operation,
interpretation and application of the Plan; and
(d) may enact rules and regulations relating to the administration of
the Plan to carry out the terms of this Plan and may amend such
rules and regulations from time to time. Such rules and
regulations will not conflict with any provision of this Plan.
8.02 SUPPLEMENTAL BENEFITS PAYABLE BY THE COMPANY
(a) The Company is not required to establish or contribute to a trust
fund, annuity or other current funding arrangement of any kind
for the provision of supplemental benefits which may become, or
are, payable under this Plan.
(b) Supplemental benefits payable under this Plan are to be paid solely
from the general assets of the Company.
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8.03 FREQUENCY AND TIMING OF SUPPLEMENTAL BENEFIT BENEFITS
Unless specified otherwise, payments under this Plan will be payable
monthly upon the first day of the month in which they fall due. Where
such payments are subject to termination on death or loss of
eligibility ("termination event"), the last monthly payment will be
payable on the first day of the month in which the termination event
occurs.
8.04 NON-ALIENATION
Except as otherwise required by law, any transaction that purports to
assign, charge, anticipate, surrender or grant as security a Member's
right or interest under the Plan, or supplemental benefits payable
under this Plan, is void.
8.05 NON-COMMUTATION OF BENEFITS
A supplemental benefit payable under this Plan will not be capable of
being commuted, unless the Human Resource and Compensation Committee
decides it is in the best interests of the Company to do so.
8.06 RIGHTS OF EMPLOYEES
(a) No Member will have any right or interest, whatsoever, to
supplemental benefits under this Plan, except as provided in this
Plan.
(b) The establishment of this Plan will not constitute an enlargement
of any rights an Employee might otherwise have as to tenure,
retention of employment
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with the Company, continuity of work, advancement in employment or any
particular job or position.
8.07 LIMITATION OF LIABILITIES
Notwithstanding anything in this Plan to the contrary, the Company, its
directors, officers, employees, and agents will not be liable to any
person whatsoever because of any acts, omissions to act, or mistakes,
negligence or errors in judgment either by the Company or of any person
appointed or employed by it or providing service to it in connection
with its or their functions hereunder, except for any claims, demands
and proceedings arising from any act or omission which is due to
willful misconduct, fraud or lack of good faith by the Company or such
persons or any one of them.
8.08 INFORMATION TO BE PROVIDED BEFORE BENEFITS ARE PAID
Payment of supplemental benefits will not be made until the person
entitled to payment of supplemental benefits delivers to the Company:
(a) satisfactory proof of age of the person and other persons who may
become entitled to payment of supplemental benefits; and
(b) any such other information as may be required to calculate and pay
supplemental benefits, including a signed declaration of marital
status, if applicable.
8.09 COMPANY RECORDS
Whenever the records of the Company are used for the purposes of this
Plan, such records will be conclusive as to the facts with which they
are concerned.
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8.10 SUCCESSOR COMPANIES
If the Company (or participating employer contemplated by the
definition of "Company") sells or exchanges all or substantially all of
its assets, discontinues operation of its business or enters into a
statutory or non-statutory merger, consolidation of re-organization
with any other corporation, this Plan will be continued and the person,
firm or corporation to which the Company (or participating employer, as
the case may be) is sold or with which the Company (or participating
employer, as the case may be) is merged, consolidated or re-organized
will be deemed to be the successor of the Company (or participating
employer, as the case may be) and will be substituted hereunder for the
Company (or participating employer, as the case may be).
8.11 CONSTRUCTION
The Plan will be governed and construed in accordance with the laws of
South Carolina.
8.12 CURRENCY
All supplemental benefits payable under this Plan will be paid in the
lawful currency of the United States.
8.13 SEVERABILITY
If any provision of this Plan is held to be invalid or unenforceable by
a court of competent jurisdiction, its invalidity or unenforceability
will not affect any other
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provision of this Plan and the Plan will be construed and enforced as
if such provision had not been included therein.
8.14 CAPTIONS AND HEADINGS
The captions, heading and Table of Contents of this Plan are included
for convenience of reference only and will not be used in interpreting
the provisions of this Plan.
8.15 ARTICLES AND SECTIONS
"Article" or "Articles" means an article or articles as defined in the
Table of Contents and "Section" or "Sections" means a specific
provision or provisions within and Article or Articles, as applicable.
8.16 WAIVER
The Human Resource and Compensation Committee shall have the unfettered
right and sole discretion to waive any provision of this Plan, if it
deems such waiver to be in the best interests of the Company.
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