Exhibit 10.32
NATIONAL PROCESSING COMPANY
LONG-TERM INCENTIVE COMPENSATION PLAN
FOR SENIOR OFFICERS
As Amended and Restated Effective February 1, 2003
ARTICLE 1. ESTABLISHMENT AND PURPOSE OF PLAN
1.1 Establishment of the Plan. The following are the provisions of the
National Processing Company Long-Term Incentive Compensation Plan for Senior
Officers (herein referred to as the "Plan"), effective as of February 1, 2003,
which is an amendment and restatement of the National City Processing Company
Long-Term Incentive Plan for Senior Officers effective January 1, 2000
("Predecessor Plan").
1.2 Effectiveness. The Plan shall be effective for all purposes with
respect to Plan Cycles commencing on or after February 1, 2003.
1.3 Purpose. The purpose of the Plan is to maximize the returns to
stockholders and to promote the long-term profitability and success of the
Corporation by providing an incentive to those key executives of the Corporation
who are primarily responsible for such profitability and success.
1.4 Operation of the Plan. The Plan shall be administered by the
Committee. A Plan Cycle of three years will be established each year that the
Plan is in operation. With respect to any award made under the Plan, however,
the Plan shall serve as a non-qualified plan providing for and governing the
treatment of deferred compensation at the election of the Participant and/or the
Committee, or as required by the Plan, as provided herein.
ARTICLE 2. DEFINITIONS
2.1 Definitions. Whenever used herein, the following terms shall have
the meanings set forth below, unless otherwise expressly provided. When the
defined meaning is intended, the term is capitalized.
(a) "Account" means the account described in Section 10.3.
(b) "Active Participant" shall mean an Eligible Employee who is
approved by the Committee for participation in a Plan Cycle of
the Plan. Such approval shall be determined with respect to
each Plan Cycle prior to March 31 of the first year of that
Plan Cycle, and shall be redetermined with respect to each new
Plan Cycle.
(c) "Average Stock Price" shall be determined with respect to each
Plan Cycle for the month of December prior to such Plan Cycle
(the Average Stock Price at the beginning of the Plan Cycle)
and for the last full calendar month of the Plan Cycle (the
Average Stock Price at the end of the Plan Cycle) and shall
mean the arithmetic mean (the average) of the closing prices
of a share of common stock of a company as reported on any
national securities exchange (or by any national quotation
system accepted by the Committee for this purpose) for each of
the trading days (on which such shares were traded) in such
calendar month. If the shares of common stock are not then so
traded or regularly reported, the stock price shall be
determined by such means as the Committee shall determine.
Notwithstanding the foregoing, the Committee may determine
prior to the start of a Plan Cycle that a different set of
time periods are appropriate for measuring performance under
the Plan, and such different time periods may be used to
determine Average Stock Prices at the beginning and the end of
such Plan Cycle.
(d) "Base Salary" shall mean the average annual salary of an
employee during that portion, or all of the Plan Cycle for
which he or she is an Active Participant, exclusive of any
bonuses, incentive pay, special awards, or stock options.
(e) "Board" shall mean the Board of Directors of the Corporation.
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(f) "Change in Control" see Section 12.3.
(g) "Corporation" shall mean National Processing Company.
(h) "Committee" shall be composed of the Chief Executive Officer
of the Corporation, the individual at National City
Corporation who has primary responsibility of monitoring the
activities of the Corporation and the officer in charge of
Corporate Human Resources at National City Corporation.
(i) "Covered Executive" means any individual who is, or is
determined by the Committee to be likely to become a "covered
employee" within the meaning of Section 162(m) of the Internal
Revenue Code.
(j) "Crediting Date" means the last business day of each calendar
month or such other date or dates as determined by the
Committee so long as there is no less than one Crediting Date
each calendar year.
(k) "Disability" shall mean the inability, by reason of a
medically determinable physical or mental impairment, to
engage in substantial and gainful activity for a continuous
period of 26 weeks or more as determined by the Committee.
(l) "Early Retirement" shall mean retirement at or after age 55
with at least ten years of service with the Employer and/or
National City Corporation prior to Normal Retirement.
(m) "Earnings Award" shall mean the payment earned by a
Participant based on earnings growth as set forth in Section
4.2.
(n) "Effective Date" see Section 12.4.
(o) "Eligible Employee" shall mean an Employee who is employed in
a position meeting the defined eligibility criteria for
participation in the Plan, as set forth in Article 3.
(p) "Employee" shall mean an individual employed by an Employer on
a regular active and full-time salaried basis.
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(q) "Employer" shall mean the Corporation or any corporation,
organization or entity controlled by the Corporation.
(r) "Enrollment Period" means the period in each calendar year
designated by the Plan Administrator during which Eligible
Employees make elections to defer Compensation earned during
the following Plan Year.
(s) "Evaluation Date" means the last day of the Plan Year.
(t) "Implementation Date" see Section 12.4.
(u) "Inactive Participant" shall mean an individual who was an
Active Participant in the Plan for a Plan Cycle, who is not
currently an Active Participant for a Plan Cycle but who
continues to have an interest under the Plan.
(v) "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time.
(w) "Investment Option" means any arrangement deemed suitable by
the Plan Administrator from time to time for the purpose of
providing an investment credit on amounts deferred.
(x) "Normal Retirement" shall mean leaving the employ of the
Employer and National City Corporation at or after the age 62
with at least twenty years of continuous service with the
Employer and/or National City Corporation or at or after the
age 65 with at least five years of continuous service with the
Employer and/or National City Corporation.
(y) "Participant" shall mean and include all Active Participants
and all Inactive Participants.
(z) "Payment Date" means any day within thirty (30) days following
an Evaluation Date a Participant receives a distribution.
(aa) "Peer Group" shall mean a group of comparable corporations
used to measure relative performance. Such Peer Group shall be
established by the Committee for
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each Plan Cycle prior to the commencement of the Plan Cycle,
and shall not thereafter be changed with respect to such Plan
Cycle, provided, however, that one or more members of a Peer
Group shall be dropped therefrom in the event of the
acquisition of the Peer Group Member, the acquisition of
sixty-five percent or more of the gross assets of the Peer
Group Member or the merger of the Peer Group Member with
another company(ies) where the Peer Group Member is not the
surviving corporation.
(bb) "Peer Group Award" shall mean the payment earned by a
Participant based on comparison of the Total Shareholder
Return with the Peer Group as set forth in Section 4.1.
(cc) "Plan" shall mean this National Processing Company Long-Term
Incentive Compensation Plan for Senior Officers Effective
February 1, 2003.
(dd) "Plan Administrator" shall mean the Plan Administrator of the
National City Corporation Deferred Compensation Plan or such
other person or group as established or designated by the
Committee from time to time.
(ee) "Plan Cycle" shall mean a period of three consecutive fiscal
years of the Corporation and shall be referred to by the
fiscal year in which a particular Plan Cycle commences.
(ff) "Plan Year" means the calendar year. The first Plan Year shall
be 2003.
(gg) "Predecessor Plan" see Section 1.1.
(hh) "Subsidiary" means an entity in which the Corporation directly
or indirectly owns 50% or more of the voting equity
securities.
(ii) "Successor" see Section 12.3(a).
(ll) "Termination Date" means the later of (i) the individual's
last day worked or (ii) the last day an individual receives a
Salary payment either for services rendered or as salary
continuation.
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(mm) "Total Award" shall mean the payment earned by a Participant
based on the Peer Group Award and the Earnings Award.
(nn) "Total Stockholder Return" with respect to a stock shall be
calculated in the following manner:
(i) Add the Average Stock Price at the end of the Plan Cycle
for such stock to the dividends paid on the stock during
the Plan Cycle (if any), and then subtract the Average
Stock Price at the beginning of the Plan Cycle for such
stock.
(ii) Divide the resulting sum of (i) above by the Average
Stock Price at the beginning of the Plan Cycle for such
stock.
(iii) The result equals Total Stockholder Return with respect
to such stock for the Plan Cycle.
(oo) "Vesting Event" shall mean the earliest to occur of the
following events:
(1) for each Award, the end of the respective Plan Cycle,
(2) the Effective Date of a Change in Control,
(3) the date a Participant is eligible to retire on a Normal
Retirement,
(4) the date a Participant incurs a Disability,
(5) the date of a Participant's death.
Each Participant and Beneficiary with respect to whom a Vesting Event
has occurred shall be 100% vested in his or her benefits or Awards
earned or accrued hereunder as of the date of such Vesting Event,
subject to the forfeiture provisions of Article 11.
(pp) "Voting Stock" shall mean the then outstanding
securities of the Corporation entitled to vote in the election
of directors.
2.2 Gender and Number. Except when otherwise indicated by the context,
any masculine terminology used herein also shall include the feminine, and the
definition of any term in the singular shall include the plural.
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ARTICLE 3. ELIGIBILITY AND PARTICIPATION
3.1 Eligibility. Eligibility for participation in the Plan will be
limited to those senior officers of the Corporation and its subsidiaries who, by
the nature and scope of their positions, are materially responsible for the
management, growth, and overall success of the Corporation, as determined by the
Committee.
3.2 Participation. Participation in the Plan shall be determined by the
Committee with respect to each Plan Cycle prior to the commencement of the Plan
Cycle. The Committee may base its approval upon the recommendation of the
President of the Corporation. The Committee shall classify senior officers for
the purposes of the Plan into the following categories:
Category Persons Included
-------- ----------------
Category I President of the Corporation
Category II Executive officers of the
Corporation and Executive
officers of major
subsidiaries of the
Corporation and similar
officers
Each Eligible Employee approved for participation shall be notified of
the selection as soon after approval as is practicable and shall become a
Participant upon acceptance by him or her of such selection; provided however,
that after December 31, 1994, no Eligible Employee shall become a Participant in
the Plan with respect to any Plan Cycle after the commencement of such Plan
Cycle.
3.3 Participant for Part of a Plan Cycle. In the event an Employee is
an Eligible Employee for only a portion of a Plan Cycle (Participation Portion)
such Eligible Employee may, in the Committee's discretion, be a Participant for
such portion of the Plan Cycle but his or her Award will be based upon his or
her Base Salary at the end of such Participation Portion and such Award will
normally be pro-rated to reflect the number of months in the Participation
Portion of the Plan Cycle compared to the number of months in the total Plan
Cycle.
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3.4 Category Changes During a Plan Cycle. In the event a Participant is
promoted or demoted from one Category to another during a Plan Cycle, the
Committee may, in its discretion, (a) continue such Participant in the Category
he or she was in prior to such promotion or demotion, (b) provide for
participation from and after the promotion or demotion to the new Category, or
(c) provide for a combination of (a) and (b).
In the event of a Plan Cycle for which the Participant's participation
is thus split between two Categories, the Award for such Plan Cycle will
normally be pro-rated to reflect the portions of the Plan Cycle spent in each
Category and each part of the Award will be based upon the Participant's Base
Salary at the end of the appropriate portions of the Plan Cycle.
3.5 No Right to Participate. No Participant or Employee shall have a
right at any time to be selected for current or future participation in the
Plan.
ARTICLE 4. AWARD DETERMINATION
4.1 Peer Group Award for Each Plan Cycle. Prior to the beginning of the
Plan Cycle the Committee shall establish the threshold award, target award and
maximum award performance levels for the Plan Cycle, against which the Total
Stockholder Return of the Corporation for the Plan Cycle shall be compared to
average (arithmetical mean) of the Total Stockholder Returns of the members of
the Peer Group. The Committee shall also determine the membership of the Peer
Group for the Plan Cycle at such time.
4.2 Earnings Growth. The threshold Earnings Award shall be awarded if,
in the sole discretion of the Committee the Corporation has achieved a compound
growth rate in earnings per share of 10%, target Earnings Award shall be awarded
if, in the sole discretion of the Committee the Corporation has achieved a
compound growth rate in earnings per share of 12%. The maximum Earnings Award
shall be awarded if, in the sole discretion of the Committee, the Corporation
has achieved a compound growth rate in earnings per share of 15%. If the
compound growth rate in earnings per share of the Corporation is greater than
10% but less than 15%. The Committee shall pro-rate the award. In determining
the compound growth rate in
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earnings per share of the Corporation the Committee may make adjustments as it
deems appropriate for acquisitions, divestitures and other one-time events.
4.3 Total Award. The amount of Total Award that shall be awarded to a
Participant under this Plan shall be expressed as a percentage of Base Salary.
Such percentage shall be determined on the basis of the attainment, or lack of
attainment, by the Corporation of the threshold, target or maximum performance
for the Peer Group Award and target or maximum performance for the Earnings
Award, as follows:
Peer Group Award
Percent of Base Compensation
Category Threshold Target Maximum
-------- --------- -------- -------
I 6% 12% 24%
II 4% 8% 16%
Earnings Award
Percent of Base Compensation
Category Threshold Target Maximum
-------- --------- ------ -------
I 9% 18% 36%
II 6% 12% 24%
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ARTICLE 5. PAYMENT OF AWARDS
5.1 Form and Timing of Payment of Awards. Within 90 days after the end
of the Plan Cycle, the Participant's shall be entitled to receive a cash payment
equal to the entire amount of the Participant's Award, unless Participant has
elected to defer the Award under Article 10 herein. Except as otherwise provided
for in Section 6.1, to receive an Award a Participant must be an Employee on the
date on which the Plan Cycle ends. The Committee may terminate a Participant's
Award prior to any Vesting Event.
ARTICLE 6. TERMINATION OF EMPLOYMENT
6.1 Termination of Employment due to Death, Disability or Normal
Retirement. In the event a Participant's employment is terminated during a Plan
Cycle at or after the occurrence of a Vesting Event other than a Change in
Control the Participant shall be eligible to receive a pro-rated Award
reflecting his or her partial participation. This pro-ration shall be determined
by multiplying the Award by a fraction the numerator of which is the number of
full months of participation to the date participation ends, and the denominator
of which is 36. The Award thus determined shall be payable as soon as
practicable following the end of the Plan Cycle.
6.2 Other Terminations of Employment. In the event a Participant's
employment is terminated during a Plan Cycle prior to a Vesting Event, the
Participant's participation in such Plan Cycle shall end and the Participant
shall not be entitled to any Award for such Plan Cycle.
ARTICLE 7. RIGHTS OF PARTICIPANTS
7.1 Employment. Nothing in this Plan shall interfere with or limit in
any way the right of the Corporation to terminate a Participant's employment at
any time, nor confer upon any Participant any right to continue in the employ of
the Corporation.
7.2 Restrictions on Assignments. The interest of a Participant or his
or her beneficiary under this Plan may not be sold, transferred, assigned, or
encumbered in any manner, either voluntarily or involuntarily, and any attempt
to so anticipate, alienate, sell, transfer, assign,
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pledge, encumber, or charge the same shall be null and void; neither shall the
benefits hereunder be liable for or subject to the debts, contracts,
liabilities, engagements, or torts of any person to whom such benefits or funds
are payable, nor shall they be subject to garnishment, attachment, or other
legal or equitable process, nor shall they be an asset in bankruptcy.
ARTICLE 8. ADMINISTRATION
Administration. The Plan shall be administered by the Committee in
accordance with any administrative guidelines and any rules that may be
established from time to time by the Committee. The procedures, standards and
provisions of this Plan for determining eligibility for and amounts of Awards in
themselves confer no rights, duties or privileges upon Participants nor place
obligations upon either the Committee or the Corporation. Accordingly, the
Committee may, in making such determinations hereunder, deviate from such
procedures and standards in whatever manner that it, in its judgment, deems
appropriate.
The Committee shall have full power and authority to
interpret, construe and administer the Plan and its interpretations and
construction hereof, and actions hereunder, including the timing, form, amount
or recipient of any payment to be made hereunder, and its decisions shall be
binding and conclusive on all persons for all purposes.
The Committee may name assistants who may be, but need not be,
members of the Committee. Such assistants shall serve at the pleasure of the
Committee, and shall perform such functions as are provided for herein and such
other functions as may be assigned by the Committee.
No member of the Board, Committee or any assistant shall be
liable to any person for any action taken or omitted in connection with the
interpretation and administration of this Plan unless attributable to his or her
own willful misconduct or lack of good faith.
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ARTICLE 9. REQUIREMENTS OF LAW
9.1 Laws Governing. This Plan shall be construed in accordance with and
governed by the laws of the State of Ohio.
9.2 Withholding Taxes. The Corporation shall have the right to deduct
from all payments under this Plan any federal, local or state taxes required by
the law to be withheld with respect to such payments.
9.3 Plan Binding on Corporation, Employees and Their Successors. This
Plan shall be binding upon and inure to the benefit of the Corporation, its
successors and assigns and each Participant and his or her beneficiaries, heirs,
executors, administrators and legal representatives.
ARTICLE 10. DEFERRAL OF AWARDS
10.1 Election to Request Deferral of Award; Deferral Percentage. The
Committee shall determine which Participants or group of Participants of, if
any, shall be eligible to make deferral elections under this Plan. Each
Participant who is therefore eligible to elect to request deferral of a portion
or all of his or her Award for a Plan Cycle, shall be given the opportunity
prior to the last Plan Year in the Plan Cycle, to make such request. Such
election and the percentage of Award requested to be deferred shall be
irrevocable and fixed with respect to such Participant and such Plan Cycle from
and after the December 31 of the year prior to the last year of the Plan Cycle.
The request and determination of the portion of the Award to
be deferred shall be made in terms of 1% increments of the Award.
Participants becoming Participants during a Plan Cycle shall,
if determined to be eligible to do so, make any such deferral request to defer
prior to the commencement of their participation and the same shall become
irrevocable and fixed as of the day prior to the commencement of their
participation.
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Promotion or demotion during a Plan Cycle shall not affect the
fixed and irrevocable nature of a deferral request made prior to such Plan Cycle
for such Plan Cycle.
10.2 Deferral of Awards; Committee's Decision. Notwithstanding any
request to defer none, a portion, or all of an Award hereunder submitted by a
Participant pursuant to Section 10.1 above, and not withstanding the Committee's
prior determination as to the eligibility of any Participant or group of
Participants to defer a portion or all of any Award hereunder, the Committee
shall make the decision, in the case of each Participant, whether or not to
defer any portion or all of any Participant's Award with respect to any Plan
Cycle. Such decision shall be made in the discretion of the Committee, which
extends to the percentage of any Award to be deferred.
The Committee's decision shall be final and binding on all
parties. Any amount to be deferred shall not be paid to the Participant but
shall be deferred as provided in this Article 10.
10.3 Accounts. An unfunded bookkeeping account shall be established and
maintained by the Corporation in the name of each Participant who has deferred
compensation hereunder. The Account shall be credited with all amounts deferred
under the Plan net of applicable taxes. The amounts credited to each Account, as
reduced for amounts distributed under Article 10, shall be adjusted each
Crediting Date to reflect gain or loss from Investment Option(s) selected by the
Participant. Such Accounts shall remain a part of the general liabilities of the
Corporation and nothing in this Plan shall be deemed to create a trust or fund
of any kind or any fiduciary relationship. Each Account may be comprised of
sub-accounts to reflect Investment Option(s) selected by the Participant.
10.4 Crediting to Accounts. As of the dates of payment of cash Awards
made under this Plan the amount of the Award to be deferred for each Participant
under this Article 10 shall be credited to such Participant's Account, and shall
correspondingly be credited to the Investment Option or Options selected by the
Participant.
10.5 Selection of Investment Options. Each Participant (and each
Beneficiary of a deceased Participant) may select the Investment Option(s) he or
she wishes to be used hereunder
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for his or her Account. The selection of Investment Options shall be made in
portions of the amount deferred equal to 5% of the total of such amounts. In the
event no election is made by a Participant (or Beneficiary) his or her Account
shall be deemed invested in and credited to the Investment Option designated by
the Plan Administrator for such purpose.
Selection of Investment Options by Participants shall be made no later
than the Enrollment Period of the Plan Cycle for which the Award is to be made
in advance of the deferral or payment of the Award; provided however, that in
the event a Participant who has not requested a deferral of any part of his or
her Award nevertheless has a portion thereof deferred by decision of the
Committee, or otherwise, then in such event, such Participant shall immediately
be given an election period of 10 days to determine appropriate Investment
Options, such period running from the date of his or her notification of his or
her right to make such selection.
10.6 Allocation of New Deferrals Among Investment Options and Transfers
Among Investment Options.
(a) During the Enrollment Period, the Participant shall elect how deferrals
during the applicable Plan Year are to be allocated among the available
Investment Options using forms and procedures established by the Plan
Administrator for such purpose.
(b) Each Participant may reallocate his or her accumulated Deferred
Compensation Account or deferrals among the Investment Options only
during times approved by the Plan Administrator and using forms and
procedures established from time to time by the Plan Administrator for
such purpose. Any changes a Participant makes shall become effective on
the next Crediting Date following the Plan Administrator's acceptance
of the Participant's reallocation election.
10.7 Payments Deducted on a Pro-Rata Basis from each Investment Option.
Lump sums, installments, or any other distributions from the Deferred
Compensation Account shall be deducted from the balance in each Investment
Option on a pro rata basis in proportion to the balance in each option using
procedures established by the Plan Administrator for such purpose.
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10.8 Change in Investment Option. The Plan Administrator may change the
Investment Options available from time to time under the Plan. However, no such
change shall reduce a Participant's Deferred Compensation Account. If, following
a change in the Investment Options, the Participant fails to reallocate his or
her Account among the available Investment Options the Plan Administrator has
the discretion to select an Investment Option for the Participant.
10.9 Vesting of Deferred Amounts. Amounts of Awards made and deferred
under the Plan, and earnings and gains thereon, are always 100% vested.
10.10 Manner of Distribution. A Participant's Deferred Compensation
Account shall be distributed according to the procedures set forth below.
(a) Distributions while employed. A Participant may elect to receive a
distribution from their Account during their period of employment. Such
election may either be for a Scheduled Distribution, or an Unscheduled
Distribution, each as defined below.
(i) Scheduled Distribution. During the Enrollment Period when a
Participant makes their deferral election, the Participant may
specify a future Payment Date when the amount deferred or portion
thereof will be distributed. To be valid, such future Payment Date
must not be within 3 years of the Plan anniversary to which such
election first applied, and such future Payment Date must precede
the Participant's Termination Date. The amount distributed shall be
allocated against the Investment Options as provided under Section
10.7. The Plan Administrator may disregard any invalid Scheduled
Distribution election.
(ii) Unscheduled Distribution. During the Enrollment Period, a
Participant may submit a written request to the Plan Administrator
for an unscheduled distribution from their Account. If the Plan
Administrator approves such request, the amount shall be payable
upon the Payment Date following such approval. The amount
distributed shall be subject to a 10% penalty, with the
Participant's Account being debited an amount equal to 10% of the
Unscheduled Distribution amount. The withdrawn
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amounts and the Unscheduled Distribution penalty shall be allocated
against the Investment Options as provided under Section 10.7. Any
Participant electing an Unscheduled Distribution during an
Enrollment Period shall be considered ineligible to defer any
Compensation under the Plan for the remainder of the Plan Year in
which the Unscheduled Distribution occurs and for the next following
Plan Year.
(iii) Notwithstanding the foregoing, no Covered Executive shall be
eligible to make an election for either a Scheduled Distribution or
Unscheduled Distribution, and the Plan Administrator is hereby
empowered to disregard a Scheduled Distribution election made by a
Participant at a time prior their first becoming a Covered
Executive.
(b) Distributions following employment. A Participant may receive either a
Termination Distribution or a Retiree Distribution following their period
of employment, each as defined below.
(i) Termination Distribution. A Participant who is not a Retirement
Eligible Employee shall have their Account balance valued as of the
Evaluation Date first following their Termination Date. Such balance
shall be distributed in a lump sum on the Payment Date first
following such Evaluation Date.
(ii) Retiree Distribution. A Participant who is a Retirement Eligible
Employee shall have their Account paid according to the following
procedures:
1) Notwithstanding sections 2) and 3) below, if the Participant's
Account, determined as of the first Evaluation Date following
their Termination Date, is equal to or less than an amount
established by the Plan Administrator from time to time (the
"Minimum Installment Amount") such amount shall be distributed
according to section (i) above.
2) If the Participant has made an election as described in
Section 10.11 that has been in effect for at least twelve
months prior to the Termination Date, the Participant's
Account shall be paid in accordance with such payment
election.
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3) If the Participant does not have a payment election that has
been in effect for at least twelve months prior to the
Termination Date, the Participant's Account shall be paid in
annual installments over a period of 10 years, as provided in
the Section 10.11(ii).
10.11 Form of Payment Election. Each Participant may submit a payment
election form specifying how the Participant's accumulated Deferred Compensation
Account shall be paid. The following distribution options shall be available:
(a) Distributions following employment. A Participant who is a Retirement
Eligible Employee, having an accumulated Account of at least the Minimum
Installment Amount, as provided in Section 10.10(b)(ii) above, may elect
their Account to be distributed in either of the following forms:
(i) Lump Sum Distribution. The amount payable shall equal the Account
balance determined as of the Evaluation Date. Pursuant to the
Participant's election, the Evaluation Date may be any Evaluation
Date following the Termination Date. If the Participant fails to
elect a date, the Evaluation Date will be the last day of the Plan
Year in which the Termination Date occurs. The amount so determined
shall be paid on the Payment Date next following such Evaluation
Date.
(ii) Annual Installments. The amount of the first distribution shall be
based on the Account balance as determined on the last Evaluation
Date in the Plan Year in which the Participant's Termination Date
occurs. Such amount shall be divided by the number of payments
elected (being either 5 or 10, or other period as determined by the
Plan Administrator) to determine the distribution. The distribution
shall be made on the Payment Date next following such Evaluation
Date. Subsequent distributions shall be determined annually
thereafter using the procedure established herein, with the
exception that the divisor shall be the number of payments
remaining.
(iii) Participants not making a valid election shall have their Account
distributed over a period of ten years as provided in Section
10.11(a)(ii) above.
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10.12 Plan Administrator's Discretion. The Plan Administrator shall
have the discretion to distribute the Account of any Participant who is not a
Covered Executive in a single distribution following their Termination Date.
Such distribution shall be based on the balance of the Participant's Account as
of the Evaluation Date immediately following their Termination Date. Such amount
shall be paid on the Payment Date next following such Evaluation Date.
10.13 Payments Upon Death of Participant.
(a) A Participant may designate any person or persons (not exceeding 5),
including a trust, as his or her beneficiary to receive his or her Deferred
Compensation Account in the event of the Participant's death. Any such
designation shall be made by filing the form designated for that purpose by
the Plan Administrator. The Participant may change or cancel his or her
beneficiary designation at any time prior to death without the consent of
any designated beneficiary. If no beneficiary has been designated by the
Participant, or if no beneficiary is alive at the date of the Participant's
death, payment shall be made to the Participant's estate.
(b) If the Participant's death occurs during Employment, the Participant's
Account shall be distributed in a lump sum as provided in 10.11(a)(i) to
each of the Participant's surviving beneficiaries in the portions
designated by the Participant in 10.13(a).
(c) If the Participant's death occurs after installment payments have
commenced, the Participant's Account shall be distributed in a lump sum on
the next scheduled Payment Date to each of the Participant's surviving
beneficiaries in the portions designated by the Participant in 10.13(a).
10.14 Withholding Taxes. The Corporation shall have the right to deduct
from deferrals and distributions under the Plan any and all taxes required to be
collected under federal, state or local laws, using procedures established by
the Plan Administrator for such purpose.
10.15 Beneficiary Designations. Each Participant, and each Beneficiary
of a deceased Participant or Beneficiary hereunder, may designate, on a
Beneficiary Designation form supplied by the Plan Administrator, any person or
persons to whom payments are to be made if
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the Participant (or Beneficiary) dies before receiving payment of all amounts
due hereunder. A beneficiary designation will be effective only after the signed
Beneficiary Designation form is filed with the Plan Administrator for such
purpose while the Participant (or Beneficiary) is alive, and will cancel all
beneficiary designations signed and filed earlier. If the Participant (or
Beneficiary) fails to designate a beneficiary as provided above, or if all
designated beneficiaries die before the Participant or before complete payment
of all amounts due hereunder, remaining unpaid distribution amounts shall be
paid to the then surviving spouse of the Participant, if any, or, if there be
none, in one lump sum to the estate of the last to die of the Participant or his
or her designated beneficiaries, if any.
In the event a Participant (or a Beneficiary of a deceased
Participant) designates as a Beneficiary any so called "marital deduction trust"
or any so called "qualified income trust", the Participant (or Beneficiary) may
additionally indicate whether the dollar equivalent of the current income,
during the distribution of an interest hereunder, should be distributed yearly
to such Beneficiary. In the event of such an indication, such income shall be
distributed at least annually.
10.16 Participants Rights; Beneficiaries Rights. Except as otherwise
specifically provided, neither a Participant nor any of his or her Beneficiaries
has rights under this Plan. The payment of deferred compensation shall be a
general, unsecured obligation of the Corporation to be paid by the Corporation
from its own funds, and such payments shall not impose any obligation upon any
trust fund for any tax qualified plan, or be paid from any such trust fund. No
Participant or beneficiary shall have any title to or beneficial ownership in
any assets which the Corporation may earmark to pay benefits hereunder.
10.17 Nature of deferred compensation. The election of deferred
compensation under this Plan and any setting aside by the Corporation of amounts
with which to discharge its deferred obligations hereunder in a trust fund, an
insurance policy, or otherwise, shall not be deemed to create a right in any
person; equitable title to any funds so set aside in a trust, an insurance
policy, or otherwise shall remain in the Corporation, and any recipient of
benefits
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hereunder shall have no security or other interest in such trust, policies or
funds. Any and all funds so set aside in a trust, an insurance policy or
otherwise shall remain subject to the claims of the general creditors of the
Corporation, present and future. This provision shall not require the
Corporation to set aside any funds, but the Corporation may set aside such funds
if it chooses to do so. Any amount so set aside for this Plan shall be accounted
for separately and apart from any other plan of the Corporation. This Plan is
intended to constitute an unfunded plan of deferred compensation described in
Section 201(2) of the Employee Retirement Income Security Act of 1974.
10.18 Distributions in Cash. Notwithstanding any other provision of
this Plan, distributions of amounts deferred hereunder shall be made only in
cash and shall be subject to withholding of applicable federal, state and local
taxes.
10.19 Nature of Deferred Compensation Plan. The provisions of the Plan
relating to deferred compensation are fixed and final unless and until amended,
revised or terminated as herein provided.
ARTICLE 11. FORFEITURES
Notwithstanding any provision in this Plan to the contrary excepting
only the provisions of Article 12, in the event the Committee finds
(a) that an Employee or former Employee who has an interest under
this Plan has been discharged by his or her Employer in the
reasonable belief (and such reasonable belief is the reason or
one of the reasons for such discharge) that the Employee or
former Employee did engage in fraud against the Employer or
anyone else, or
(b) that an Employee or former Employee who has an interest under
this Plan has been convicted of a crime as a result of which it
becomes illegal for his Employer to employ him or her,
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then any amounts held under this Plan for the benefit of such Employee or former
Employee or his or her beneficiaries shall be forfeited and no longer payable to
such Employee or former Employee or to any person claiming by or through such
Employee or former Employee.
ARTICLE 12. CHANGE IN CONTROL
12.1 Treatment of Awards. In the event of a Change in Control the
Corporation shall pay to each Active Participant on the Implementation Date of
such Change in Control a lump sum cash payment equal to the amount hereinafter
determined. Such payment shall be payable in cash to the Participant within five
business days after the Implementation Date of such Change in Control and shall
be payment in full to each such Participant for such Plan Cycle, each of which
shall be deemed terminated by operation of this Article 12. No further Plan
Cycles shall commence thereafter under this Plan.
12.2 Amount of Payment. The amount of the payment to be made as a
consequence of a Change in Control shall, with respect to each Plan Cycle, be
equal to the Maximum Award level (without regard to stockholder return during
such abbreviated Plan Cycle) for the Participant for such Plan Cycle multiplied
by a fraction the numerator of which is the number of full months completed from
the commencement of the Plan Cycle to the Implementation Date of the Change in
Control, and the denominator of which is 36.
12.3 Definition of Change in Control. Change in Control shall mean the
occurrence of any of the following events:
(a) The Company is merged, consolidated or reorganized into or
with another corporation or other legal person other than
National City Corporation ("NCC"), a successor of NCC (direct
or indirect, by purchase, merger, consolidation,
reorganization or otherwise) ("Successor"), or an affiliate
of NCC or of a Successor and as a result of such merger,
consolidation or reorganization less than fifty percent of
the combined voting power of the then-outstanding securities
of such resulting corporation or person immediately after
such transaction are held by NCC, a Successor or an affiliate
of NCC or of a Successor; or
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(b) The Company sells or otherwise transfers all or substantially
all of its assets to another corporation or other legal
person, and as a result of such sale or transfer less than
fifty percent of the combined voting power of the
then-outstanding Voting Stock of such corporation or person
immediately after such sale or transfer is held by NCC, a
Successor or an affiliate of NCC or of a Successor, provided,
however, that a Change in Control of NCC determined by the
standards set forth herein or otherwise shall not constitute
a Change in Control of the Company.
12.4 Effective Date of Change in Control. Notwithstanding the
foregoing, in the event a Change in Control ultimately results from discussions
or negotiations involving the Corporation or any of its officers or directors,
the "Effective Date" of such Change in Control shall be the date such
discussions or negotiations commenced; otherwise, such Effective Date or Change
in Control shall be the Implementation Date of such Change in Control.
12.5 Implementation Date of Change in Control. The "Implementation
Date" shall be the earliest to occur of the events specified in subsections (a)
or (b) of Section 12.3. As used herein, the Implementation Date of Change in
Control shall be the last date of all current Plan Cycles.
12.6 Effect of Change in Control, In addition to other vesting under
the Plan, the opportunity of a Participant to participate to the end of all
current Plan Cycles is vested in such Participant in the event of a Change in
Control, as of the Effective Date of and such Change in Control.
ARTICLE 13. MISCELLANEOUS
In the event of the liquidation of the Corporation the Committee may
make any provisions for holding, handling and distributing the amounts standing
to the credit of the Participants or beneficiaries hereunder which, in the
discretion of the Committee, are appropriate and equitable under all
circumstances and which are consistent with the spirit and purposes of these
provisions.
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ARTICLE 14. AMENDMENT AND DISCONTINUANCE
The Corporation expects to continue this Plan indefinitely, but
reserves the right, by action of the Board, to amend it from time to time or to
discontinue it. However, if the Board should amend or discontinue this Plan, the
Corporation shall remain obligated under the Plan with respect to (1) Awards
made final (and thus payable) by decision by the Committee prior to the date of
such amendment or discontinuance, (2) Awards and rights of any Participant or
beneficiary with respect to whom a Vesting Event has occurred.
Executed as of this __ day of___________, 2003 at Louisville, Kentucky.
NATIONAL PROCESSING COMPANY
By: _______________________
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