1
EXHIBIT 10(J)
VULCAN MATERIALS COMPANY
EXECUTIVE DEFERRED
COMPENSATION PLAN
As Amended Through December 2, 1998
2
CONTENTS
Article 1 Establishment and Purpose 1
Article 2 Definitions 1
Article 3 Administration 4
Article 4 Eligibility and Participation 5
Article 5 Deferral Opportunities 5
Article 6 Individual Accounts and Crediting of Investment Returns 9
Article 7 Rabbi Trust 10
Article 8 Change in Control 10
Article 9 Beneficiary Designation 10
Article 10 Withholding Taxes 11
Article 11 Amendment and Termination 11
Article 12 Miscellaneous 12
3
VULCAN MATERIALS COMPANY
EXECUTIVE DEFERRED COMPENSATION PLAN
ARTICLE 1. ESTABLISHMENT AND PURPOSE
1.1 ESTABLISHMENT. Vulcan Materials Company, a New Jersey
corporation, hereby establishes, effective as of October 9, 1998 (the
"Effective Date"), a deferred compensation plan for key management employees as
described herein, which shall be known as the "Vulcan Materials Company
Executive Deferred Compensation Plan" (the "Plan").
1.2 PURPOSE. The primary purpose of the Plan is to provide
eligible employees of the Company with the opportunity to defer a portion of
their compensation in a tax-efficient manner. By adopting the Plan, the Company
desires to enhance its ability to attract and retain management employees of
outstanding competence.
ARTICLE 2. DEFINITIONS
2.1 DEFINITIONS. Whenever used herein, the following terms shall
have the meanings set forth below, and when the meaning is intended, the term
is capitalized:
(a) "Accrued Rabbi Trust Obligations" means the then
current aggregate deferred compensation account
balances of all Participants, consisting of each
Participant's deferrals and the net investment gain
or loss thereon.
(b) "Annual Bonus" means any incentive award based on an
assessment of performance, payable in cash by the
Company to a Participant with respect to the
Participant's services during a Plan Year. The Term
"Annual Bonus" shall not include incentive awards
that relate to a period exceeding one year. An
Annual Bonus shall be deemed to be earned when the
Participant performs the related services regardless
of when it is paid.
(c) "Base Salary" means all regular, basic wages, before
reduction for amounts deferred pursuant to the Plan
or any other plan of the Company, payable in cash to
a Participant for services to be rendered during the
Plan Year, exclusive of any Annual Bonus, Long-Term
Incentive Awards, other special fees, awards, or
incentive compensation, allowances, or amounts
designated by the Company as payment toward or
reimbursement of expenses.
(d) "Board" or "Board of Directors" means the Board of
Directors of the Company.
(e) "Change in Control" means:
(1) the acquisition by any person, entity or
"group," within the meaning of Section 13(d)(3) or
(14)(d)(2) of the Exchange Act (excluding for this
purpose,
1
4
any employee benefit plan of the Company or any of
its subsidiaries which acquires beneficial ownership
of voting securities of the Company), of beneficial
ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 25% or more
of either the then outstanding shares of Common
Stock or the combined voting power of the Company's
then outstanding voting securities, in one
transaction or a series of transactions; provided,
however, that, if prior to such an acquisition, a
majority of the Continuing Directors determines that
such acquisition shall not, for purposes of the
Plan, be deemed a Change in Control, such
acquisition shall not constitute a Change in Control
hereunder;
(2) individuals who, as of the Effective Date,
constitute the Board (the "Continuing Directors")
cease for any reason to constitute at least a
majority of the Board, provided that any person
becoming a director of the Company subsequent to the
Effective Date whose election, or nomination for
election by the Company's shareholders, was approved
by a vote of at least a majority of the Continuing
Directors (other than an election or nomination of
an individual whose initial assumption of office is
in connection with an actual or threatened
solicitation with respect to the election or removal
of directors of the Company, as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act) shall be, for purposes of the
Plan, considered as though such person were a
Continuing Director; or
(3) approval by the Board of (i) a merger,
consolidation or reorganization of the Company in
which, as a consequence of the transaction, either
the Continuing Directors do not constitute a
majority of the directors of the continuing or
surviving corporation or any person, entity or
"group," within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act, controls 25% or more
of the combined voting power of the continuing or
surviving corporation; (ii) any sale, lease or other
transfer, in one transaction or a series of
transactions, of all or substantially all of the
assets of the Company; or (iii) any plan or proposal
for the liquidation or dissolution of the Company;
provided, however, that, if at the time of such
approval, a majority of the Continuing Directors
determines that such merger, consolidation,
reorganization, sale, lease, other transfer,
liquidation or dissolution shall not, for purposes
of the Plan, be deemed a Change in Control, such
transaction shall not constitute a Change in Control
hereunder, and, provided further, that, if a
majority of the Continuing Directors so determines,
a Change in Control shall not be deemed to occur
until the consummation of any such transaction.
(f) "CEO" means the Chief Executive Officer of the
Company.
(g) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
2
5
(h) "Committee" means the Compensation Committee of the
Board (or any other committee designated by the
Board that is eligible to administer the Plan in
accordance with Rule16b-3 under the Exchange Act).
(i) "Company" means Vulcan Materials Company and also
includes any "Employing Company" as such term is
defined in the Salaried Retirement Income Plan.
(j) "Company Stock" means the common stock of the
Company.
(k) "Disability" shall have the meaning ascribed to such
term in the Company's long-term disability plan or,
if no plan is then in effect, shall mean the
determination by the Committee that the physical or
mental condition of a Participant renders such
Participant unable to carry out his or her duties
and obligations to the Company.
(l) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time.
(m) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(n) "Long-Term Incentive Award" means a compensation
vehicle that provides for the accumulation of value
over a time period longer than one year, including,
but not limited to, stock options, restricted stock,
performance shares, and performance units; but the
term shall not include this Plan, any other elective
deferred compensation plan, or any tax-qualified or
nonqualified retirement plan of the Company.
(o) "Participant" means any key management employee of
the Company who has been approved by the Committee
for participation in the Plan under Section 4.1.
(p) "Payout Year" means the calendar year in which the
payout contemplated by Section 5.4 is made or
commences.
(q) "Plan Year" means the calendar year.
(r) "Rabbi Trust" means a grantor trust, as described in
Section 677 of the Code, that is established by the
Company as provided in Article 7.
(s) "Rabbi Trust Agreement" meaning the instrument
establishing the Rabbi Trust, as such instrument may
be amended from time to time.
(t) "Retirement" means a termination of a Participant's
employment with the Company that entitles such
Participant to immediate payment of a pension
benefit under the Salaried Retirement Income Plan.
3
6
(u) "Salaried Retirement Income Plan" means the
Retirement Income Plan for Salaried Employees of
Vulcan Materials Company, and any successor plan
thereto.
2.2 GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the
Committee. In no event shall any member of the Committee be a Participant.
3.2 AUTHORITY OF THE COMMITTEE.
(a) Subject to the terms of the Plan, the Committee
shall have full power and discretionary authority (i) to select the employees
who are eligible to participate in the Plan, (ii) to determine the terms and
conditions of each Participant's participation in the Plan, (iii) to construe
and interpret the Plan and any agreement or instrument entered into under the
Plan, (iv) to establish, amend, and waive rules and regulations for the Plan's
administration, (v) subject to the provisions of Article 11, to amend the Plan
and any agreement or instrument entered into under the Plan or to terminate the
Plan, (vi) to appoint and remove the trustee and the recordkeeper for the Rabbi
Trust, and to direct the trustee and the recordkeeper with respect to their
duties under the agreements pertaining to the Rabbi Trust, and (vii) to make
any other determinations that may be necessary or advisable for the
administration of the Plan.
(b) To the extent permitted by law, the Committee (i)
may delegate any or all of its authority granted under the Plan to one or more
executives of the Company (provided that no executive of the Company who is a
Participant shall exercise any discretion with respect to his own participation
in the Plan) and (ii) may designate one or more individuals who are not
Participants (but who may be employees of the Company) to carry out ministerial
duties related to the administration of the Plan, except that the Committee
shall not delegate responsibility for any matter involving a person subject to
Section 16 of the Exchange Act if a decision by the Committee as to such matter
would have the effect of exempting a transaction under the Plan from the
application of Section 16(b) of the Exchange Act pursuant to Rule 16b-3 or any
successor rule thereunder.
3.3 DECISIONS BINDING. All determinations and decisions of the
Committee (or of any person to whom the Committee has delegated its authority)
under the Plan, including questions of construction and interpretation, shall
be final, conclusive, and binding on the employees of the Company, the
Participants and their beneficiaries and estates. Whenever the Plan authorizes
the Committee or any other person to exercise discretion with respect to any
matter, such discretion may be exercised in the sole and absolute discretion of
the Committee or such person, subject only to the terms of the Plan and
applicable requirements of law.
4
7
ARTICLE 4. ELIGIBILITY AND PARTICIPATION
4.1 ELIGIBILITY. Eligibility to participate in the Plan is
limited to a select group of management or highly compensated employees
consisting solely of key management employees who are nominated to participate
in the Plan by the CEO and who are approved by the Committee.
4.2 PARTICIPATION.
(a) Each employee approved for participation in the Plan
by the Committee shall have the opportunity to defer the receipt of
compensation otherwise payable to the Participant in accordance with the
provisions of Article V. This opportunity shall continue in effect until the
Participant is notified by the Committee that he has ceased to be eligible to
make such deferrals.
(b) The Committee may at any time and for any reason
determine that a Participant no longer is eligible to make deferrals under
Article V. Upon being notified in writing of the Committee's decision, such a
Participant shall become an inactive Participant that retains all of the rights
of a Participant under the Plan, except for the right to make further
deferrals.
ARTICLE 5. DEFERRAL OPPORTUNITIES
5.1 AMOUNTS WHICH MAY BE DEFERRED.
(a) An eligible Participant may irrevocably elect,
prior to any Plan Year, to defer (i) up to 50% of his Base Salary earned during
the Plan Year and (ii) up to 100% of his Annual Bonus for the Plan Year.
(b) In the event that a Participant first becomes
eligible to participate in the Plan after the beginning of a Plan Year
(including the Plan Year in which the Effective Date occurs), the Committee may
allow such Participant to elect to defer (i) up to 50% of his Base Salary
earned subsequent to the date on which a valid Deferral Election Form (as
described in Section 5.2) is received by the Company from the Participant and
(ii) for the Plan Year ended December 31, 1998 only, up to 100% of his Annual
Bonus for the entire Plan Year.
(c) The Committee, in its discretion, also may permit
the deferral of Long-Term Incentive Awards in accordance with such rules and
regulations as the Committee may establish.
(d) A Participant at all times shall be 100% vested in
his deferrals under the Plan and all earnings thereon.
5.2 TIMING OF DEFERRAL ELECTIONS. The election of a Participant
to defer compensation under the Plan shall be made within 30 calendar days
prior to the beginning of the Plan Year in which the compensation to be
deferred is earned, except that, if a Participant is notified during a Plan
Year that he is eligible to participate in the Plan for the remainder of the
Plan Year, such election shall be made within 30 calendar days following the
date of such notification. All deferral elections shall be made by means of a
"Deferral Election Form" that is executed by the Participant and delivered to
the
5
8
Company. The Deferral Election Form shall provide for the specification by an
eligible Participant of:
(a) the amount of compensation to be deferred during the Plan Year
in accordance with the terms of Section 5.1;
(b) the length of deferral of such deferred amounts, and the
earnings thereon, in accordance with the terms of Section
5.3; and
(c) the form of payout of such deferred amounts, and the
earnings thereon, in accordance with the terms of Section
5.4.
5.3 LENGTH OF DEFERRAL.
(a) Each Participant who makes a deferral election as to
any Plan Year may elect the length of such deferral by designating a Payout
Year. Such election shall be irrevocable except as otherwise provided in
paragraph (d). The deferral of Base Salary and the deferral of the Annual Bonus
in any Plan Year shall be considered separate deferral elections and each may
be deferred to a different Payout Year. Deferral elections are subject to the
following limitations, unless the Committee permits otherwise:
(i) The Payout Year designated shall be no earlier than
the second year following the end of the Plan Year in
which the compensation deferred is earned; and
(ii) The Payout Year shall not be later than the year
following the Participant's 65th birthday.
All deferral elections are subject to Section 8(a), which requires an immediate
lump-sum payment in the event of a Change in Control.
(b) In the event that a deferral election is made and no
Payout Year is designated, the Participant shall be deemed to have elected a
deferral until the Payout Year following the year of the Participant's
Retirement.
(c) Notwithstanding the Payout Years designated by a
Participant pursuant to this Section 5.3 or the form of payout elected by a
Participant pursuant to Section 5.4, if at any time prior to the end of any
deferral period a Participant's employment with the Company is terminated for
any reason other than Retirement or Disability (including termination of
employment by reason of the Participant's death), (i) all Payout Years shall be
accelerated to the year following the year in which the termination of the
Participant's employment occurs, and (ii) all deferred amounts, and the
earnings thereon, for all Plan Years shall be paid to the Participant in a
single lump-sum cash payment.
(d) Notwithstanding the length of deferral elected by a
Participant pursuant to paragraph (a) or the form of payout elected by such
Participant pursuant to Section 5.4(a), such Participant may
6
9
elect to receive an early payout of all or any portion of the deferral amount,
and the earnings thereon, with respect to any Payout Year in the form of a
single lump-sum cash payment. As a penalty for early payout, the Participant
shall forfeit an amount equal to 10% of the amount requested as a payout, such
that the actual payment shall be equal to 90% of the amount by which the
balance of the Participant's account for such Payout Year is reduced. Such
payout shall be made as soon as practicable following the receipt of the
Participant's request.
(e) If the Internal Revenue Service determines that a
Participant or beneficiary is subject to federal income tax on an amount
credited to the Participant's account under the Plan before that amount would
otherwise become payable under the Plan, the amount that is then subject to tax
shall be paid to the Participant or beneficiary in a single lump-sum cash
payment as soon as practicable after the Committee is notified of the Internal
Revenue Service's determination.
5.4 FORM OF PAYOUT.
(a) Each Participant who makes a deferral election as to
any Plan Year may elect as the form of payout either (i) a single lump-sum
payment or (ii) up to fifteen approximately equal annual installment payments
(such number to be specified by the Participant); provided that all
compensation (whether Base Salary or Annual Bonus) deferred to a specific
Payout Year (regardless of the Plan Year for which the compensation is
deferred) shall be payable in the same form. Such election shall be irrevocable
except as otherwise provided in Section 5.3(d). If no such election is made,
then all deferred amounts, and the earnings thereon, shall be paid in the form
of a single lump-sum payment. All deferral elections are subject to Section
8(a), which requires an immediate lump-sum payment in the event of a Change in
Control.
(b) Lump-sum and installment payments shall be made on
the following terms:
(i) LUMP-SUM PAYMENT. Each payout to be made in the form
of a single lump-sum payment shall be made in cash on or
before the last business day of March in the Payout Year.
(ii) INSTALLMENT PAYMENTS. The first installment payment
of a payout to be made in installments shall be made in
cash on or before the last business day of March in the
Payout Year. The remaining installment payments shall be
made in cash each year thereafter, on or before the last
business day of March of such year, until the entire
balance of such Participant's applicable account has been
paid in full. Earnings shall continue to accrue to the
Participant's account during the payment period. The
amount of each installment payment shall be equal to the
balance remaining in the applicable account immediately
prior to each such payment, multiplied by a fraction, the
numerator of which is one, and the denominator of which
is the number of installment payments remaining
(including the installment payment immediately due).
(c) Notwithstanding the form of payout elected by a
Participant pursuant to this Section 5.4, with respect to any Payout Year, such
Participant may, at any time at least one year prior to such
7
10
Payout Year, petition the Committee to allow the payout for such Payout Year to
be changed from a single lump-sum cash payout to an installment payout. The
Committee may allow or refuse such request.
(d) Following the termination of the employment of a
Participant due to Retirement or Disability, notwithstanding the forms of
payout elected by a Participant pursuant to this Section 5.4 for all remaining
Payout Years, if, on the date any lump-sum or installment payment is due, the
payment to be made would cause the aggregate amount of all of the Participant's
account balances under the Plan to fall below $50,000, then the amount due, and
the remaining balance of each of the Participant's accounts, shall be paid to
such Participant on such date in a single lump-sum cash payment.
(e) Notwithstanding the provisions of this Section 5.4,
if a Participant is a "covered employee" (within the meaning of Section
162(m)(3) of the Code) when a payment is scheduled to be made under the Plan,
any portion of the payment that would be nondeductible under Section 162(m) of
the Code (when considered with all other compensation that the Participant is
expected to receive in the same taxable year) shall be deferred, and shall be
paid on the earliest date on which it would be deductible under Section 162(m).
(f) If the Company fails to makes any payment due under
the Plan within 90 days after it first becomes due, the Committee shall direct
the trustee of the Rabbi Trust to make the payment from the Rabbi Trust (to the
extent there are assets in the Rabbi Trust available to make the payment).
5.5 FINANCIAL HARDSHIP.
(a) If a Participant establishes, to the satisfaction of
the Committee, severe financial hardship, the Committee, may:
(i) authorize the cessation of deferrals by
such Participant;
(ii) provide that all or a portion of the
amounts previously deferred by the Participant shall
immediately be paid in a single lump-sum cash
payment;
(iii) provide that all or a portion of the
installments payable over a period of time shall be
paid immediately in a single lump-sum cash payment;
or
(iv) provide for such other payment schedule as
deemed appropriate by the Committee under the
circumstances.
(b) Severe financial hardship will be deemed to exist in
the event of an unanticipated emergency that is caused by the Participant's
long and serious illness, impending bankruptcy, or a similar event that is
beyond the control of the Participant and that would result in severe financial
hardship to the Participant if cessation of deferrals or modified payments were
not permitted. The amount distributed pursuant to this Section 5.5 shall not
exceed that amount which the Committee determines
8
11
to be reasonably necessary for the Participant to meet the financial hardship
at the time of distribution. The Committee's decision with respect to the
severity of financial hardship and the manner in which, if at all, the
Participant's future deferral opportunities shall cease, and/or the manner in
which, if at all, the payment of deferred amounts to the Participant shall be
modified, shall be final, conclusive, and not subject to appeal.
ARTICLE 6. INDIVIDUAL ACCOUNTS AND CREDITING OF INVESTMENT RETURNS
6.1 PARTICIPANTS' ACCOUNTS.
(a) The Company shall establish and maintain a separate
bookkeeping account for each deferral made by a Participant, and the earnings
thereon. Deferrals shall be credited to a Participant's account as of the date
the amount deferred otherwise would have become due and payable to such
Participant. Each Participant shall be furnished a statement of his deferred
compensation account balances at least annually.
(b) The establishment and maintenance of such deferred
compensation accounts by the Company shall not be construed as entitling any
Participant to any specific assets of the Company. The rights of Participants
to receive any distribution under the Plan shall be an unsecured claim against
the general assets of the Company.
6.2 INVESTMENT RETURNS ON DEFERRED AMOUNTS.
(a) All compensation deferred by a Participant pursuant
to Section 5.1 shall be deemed invested, as directed by the Participant, in one
or more of the investment alternatives made available from time to time by the
Committee. Each such investment election shall be made (i) by means of the
execution by the Participant and delivery to the Company of a "New Investment
Election Form or (ii) by means of such other methods as the Committee shall
approve. The Committee shall specify the available investment alternatives and
may adopt such rules and procedures for the allocation of deferrals among such
investment alternatives as the Committee deems necessary or appropriate. An
investment election shall be effective for all subsequent deferrals under Plan
until the Participant makes a new investment election.
(b) A Participant shall be permitted, at any time and
from time to time, to reallocate his deferred compensation account balances
under the Plan among the investment alternatives then available, subject to
right of the Committee to impose such restrictions on a Participant's ability
to change investment elections as the Committee deems necessary or appropriate.
The election of a Participant to reallocate account balances shall be made by
means of a form provided to the Participant by the Committee for such purpose,
and shall become effective as soon as practicable after a properly-executed
form is received by the Committee from the Participant.
(c) The balances of each Participant's deferred
compensation accounts shall be credited with earnings and charged with losses
based upon the actual results that would have been achieved had such balances
actually been invested pursuant to the investment elections of the Participant.
9
12
(d) The Company shall have no obligation to invest the
compensation deferred under the Plan, or the earnings thereon, in any of the
investment alternatives selected by Participants.
6.3 CHARGES AGAINST ACCOUNTS. All payments made to a Participant
under the Plan shall be charged against such Participant's accounts when and as
made.
ARTICLE 7. RABBI TRUST
7.1 ESTABLISHMENT OF A RABBI TRUST. As soon as administratively
practicable following the Effective Date, the Company shall establish an
irrevocable Rabbi Trust to accumulate assets that will assist the Company in
meeting its obligation under the Plan. The Rabbi Trust shall have an
independent trustee that is selected by the Company. The trust agreement with
respect to the Rabbi Trust shall provide that the assets of the Rabbi Trust
shall at all times be specifically subject to the claims of the Company's
general creditors in the event of the bankruptcy or insolvency (as defined by
the Rabbi Trust Agreement) of the Company.
7.2 FUNDING OF THE RABBI TRUST. The Company may contribute cash,
Company Stock, or any other asset to the Rabbi Trust, as the Company deems
appropriate. It is intended that the Rabbi Trust will hold assets with a value
approximately equal to the Accrued Rabbi Trust Obligations.
ARTICLE 8. CHANGE IN CONTROL
Upon the occurrence of a Change in Control:
(a) The Company shall, within ten business days after
the Change in Control, accelerate all deferred amounts to the date of the
Change in Control and pay all such deferred amounts, and the earnings thereon,
to each Participant or Beneficiary in a single lump-sum cash payment.
(b) The composition of the Committee immediately prior
to the Change in Control shall not be changed after the Change in Control,
except with the consent of a majority of the Continuing Directors. If, after
the Change in Control, a member of the Committee resigns or is unable to serve
due to death or disability, the remaining members of the Committee shall
appoint a replacement.
(c) The Company promptly shall reimburse a Participant
for all legal fees and expenses reasonably incurred in successfully enforcing
any right or benefit under the Plan.
ARTICLE 9. BENEFICIARY DESIGNATION
9.1 DESIGNATION OF BENEFICIARY. Each Participant may designate a
beneficiary or beneficiaries who, upon the Participant's death, will receive
the amounts that otherwise would have been paid to the Participant under the
Plan. All such designations shall be signed by the Participant, and shall be in
such form as is prescribed by the Committee. Each designation shall be
effective as of the date delivered to the Committee (or to a Company employee
appointed by the Committee to receive such designations); provided that the
Committee must receive any beneficiary designation or
10
13
change therein before the Participant's death. A Participant may change his
beneficiary designation at any time and from time to time on such form as is
prescribed by the Committee. In the event of the death of the Participant, the
payment of all amounts deferred under the Plan, and the earnings thereon, shall
be in accordance with the last written beneficiary designation signed and
delivered by the Participant and not revoked.
9.2 PAYMENT TO BENEFICIARY. If a Participant dies before the end
of the deferral period for any amount under the Plan, the payment of that
amount to the Participant's beneficiary or beneficiaries shall be made in a
single lump-sum cash payment as provided in Section 5.3. If a Participant dies
after installment payments have commenced, but before they have been completed,
the remaining payments shall be made to the Participant's beneficiary or
beneficiaries under the installment schedule elected by the Participant.
9.3 DEATH OF BENEFICIARY. In the event that all the beneficiaries
of a Participant predecease the Participant, all amounts deferred under the
Plan, and the earnings thereon, that would have been paid to the Participant
under the Plan shall be paid in a single lump-sum cash payment to the
Participant's estate, or to the person or persons designated in writing by the
Participant's estate.
9.4 INEFFECTIVE DESIGNATION. In the event a Participant does not
designate a beneficiary, or for any reason such designation is ineffective, in
whole or in part, the amounts that otherwise would have been paid to the
Participant under the Plan shall be paid in a single lump-sum cash payment to
the Participant's estate.
ARTICLE 10. WITHHOLDING OF TAXES
The Company shall have the right to either (i) require Participants to
remit to the Company, or any person or entity designated by the Committee to
administer the Plan, an amount sufficient to satisfy any applicable federal,
state, and local income and employment tax withholding requirements or (ii) to
deduct from any payment made pursuant to the Plan amounts sufficient to satisfy
such withholding requirements.
ARTICLE 11. AMENDMENT AND TERMINATION
The Company has the right to amend, suspend, or terminate the Plan at
any time by action of the Board of Directors, except that (i) no such
amendment, suspension, or termination shall, without the written consent of a
Participant, change the time or form of any payout under the Plan or otherwise
adversely affect, in any material respect, such Participant's rights with
respect to amounts theretofore deferred under the Plan, and the earnings
thereon, and (ii) following a Change in Control, the Company shall not amend
Section 5.4(f), Articles 3, 7 or 8, or this Article 11, and shall not amend any
other provision of the Plan in a manner that would alter the effect of Section
5.4(f), Articles 3, 7 or 8, or this Article 11.
11
14
ARTICLE 12. MISCELLANEOUS
12.1 EMPLOYMENT. No provision of the Plan, nor any action taken by
the Committee or the Company pursuant to the Plan, shall give or be construed
as giving a Participant any right to be retained in the employ of the Company,
or affect or limit in any way the right of the Company to terminate his
employment.
12.2 NOTICE. Any notice required or permitted to be given to the
Committee or the Company under the Plan shall be sufficient if in writing and
hand delivered, sent by registered or certified mail, or deliver in any other
manner authorized by the Committee, to the Committee (or to a person designated
by the Committee to receive such notices). Such notices, if mailed, shall be
addressed to the principal executive offices of the Company. Notice to any
Participant shall be given in any manner authorized by the Committee and, if
mailed, shall be sent to the Participant's address as is set forth in the
records of the Company.
12.3 UNFUNDED PLAN. This Plan is intended to be an unfunded plan
for tax purposes and for purposes of Title I of ERISA. The Plan is intended
primarily to provide deferred compensation benefits for "a select group of
management or highly compensated employees" within the meaning of Sections 201,
301, and 401 of ERISA, and therefore is further intended to be exempt from the
provisions of Parts 2, 3, and 4 of Title I of ERISA. The Committee may
terminate the Plan for any or all Participants, subject to Article 11, in order
to achieve and maintain these intended results.
12.4 SUCCESSORS. All obligations of the Company under the Plan
shall be binding on any successor to the Company, whether the existence of such
successor is the result of a direct or indirect merger or consolidation, the
purchase of all or substantially all of the assets of the Company, or
otherwise. The provision of the Plan with respect to each Participant shall be
binding on such Participant's heirs, executors, administrators or other
successors in interest.
12.5 NONTRANSFERABILITY. The Committee may recognize the right of
an alternate payee named in a domestic relations order to receive all or a
portion of a Participant's benefit under the Plan, provided that (i) the
domestic relations order would be a "qualified domestic relations order" within
the meaning of Section 414(p) of the Code if Section 414(p) were applicable to
the Plan, (ii) the domestic relations order does not purport to give the
alternate payee any right to assets of the Company or its affiliates, and (iii)
the domestic relations order does not purport to give the alternate payee any
right to receive payments under the Plan before the Participant is eligible to
receive such payments. Except as set forth in the preceding sentence with
respect to domestic relations orders, and except as required under applicable
federal, state, or local laws concerning the withholding of tax, the rights of
any Participant or beneficiary to amounts deferred under the Plan, and the
earnings thereon, are not subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by
creditors of the Participant or any beneficiary, other than by will or by the
laws of descent and distribution. In no event shall the Company make any
payment under the Plan to any assignee or creditor of a Participant or
beneficiary.
12
15
12.6 SEVERABILITY. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
12.7 COSTS OF THE PLAN. All costs of implementing and
administering the Plan shall be borne by the Company.
12.8 GOVERNING LAW. The Plan shall be governed by and construed in
accordance with the laws of the state of New Jersey, without giving effect to
any choice or conflict of law provision or rule.
13