EXHIBIT 10.10
FLUOR EXECUTIVE
DEFERRED COMPENSATION PROGRAM
(Amended and Restated as of January 1, 2002)
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FLUOR EXECUTIVE
DEFERRED COMPENSATION PROGRAM
(Amended and Restated as of January 1, 2002)
THIS INSTRUMENT, executed and made effective as of January 1, 2002 by
FLUOR CORPORATION, a Delaware corporation, evidences an amendment and
restatement of the terms of the Fluor Executive Deferred Compensation
Program (formerly known as the Fluor Corporation and Subsidiaries
Executive Deferred Compensation Program) adopted for the benefit of
certain key employees of Fluor Corporation and its subsidiaries.
WITNESSETH:
WHEREAS, the Company has previously amended and restated the terms and
conditions of the Fluor Executive Deferred Compensation Program
(formerly known as the Fluor Corporation and Subsidiaries Executive
Deferred Compensation Program), referred to herein as the "Plan", on
May 1, 1997; and
WHEREAS, the Company is in the process of updating the administrative
process respecting the Plan, and is changing the crediting options
available to participants in the Plan, and for these and other reasons
now desires to amend and restate the terms and conditions of the Plan;
NOW, THEREFORE, the Company hereby declares the current terms and
conditions of the Fluor Executive Deferred Compensation Program
(formerly known as the Fluor Corporation and Subsidiaries Executive
Deferred Compensation Program) to be, as of January 1, 2002, as
follows:
ARTICLE I
THE PLAN
1.1. NAME. This Plan shall be known as the "Fluor Executive Deferred
Compensation Program".
1.2 PURPOSE. This Plan is adopted for the purpose of providing eligible
executive employees with a means to satisfy future financial needs and
also for the purpose of providing such employees with retirement and
other benefits which, because of various contribution and benefit
accrual limitations, cannot be provided for them under the tax
qualified retirement, profit sharing and savings plans in which such
employee is a participant. The Company intends that the Plan constitute
an unfunded "top hat" plan maintained for the purpose of providing
deferred compensation to a select group of management or highly
compensated employees under applicable provisions of ERISA.
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1.3 PLAN ADMINISTRATION. The Plan shall be administered by the Committee
in accordance with the following:
(a). The Committee, on behalf of the Participants and their
Beneficiaries, shall enforce the Plan in accordance with its
terms, shall be charged with the general administration of the
Plan, and shall have all powers necessary to accomplish its
purposes, including, but not by way of limitation, the
following:
(i) To determine all questions relating to the
eligibility of employees to participate;
(ii) To construe and interpret the terms and provisions of
this Plan;
(iii) To compute and certify to the amount and kind of
benefits payable to Participants or their
Beneficiaries;
(iv) To maintain all records that may be necessary for the
administration of the Plan;
(v) To provide for the disclosure of all information and
the filing or provision of all reports and statements
to Participants, Beneficiaries or governmental
agencies as the Committee may determine or as shall
be required by law;
(vi) To make and publish such rules for the regulation of
the Plan and procedures for the administration of the
Plan as are not inconsistent with the terms hereof;
and
(vii) To appoint a plan administrator or any other agent,
and to delegate to such person such powers and duties
in connection with the administration of the Plan as
the Committee may from time to time prescribe.
(b). The Committee shall have full discretion to make factual
determinations as may be necessary and to construe and
interpret the terms and provisions of this Plan, which
interpretation or construction shall be final and binding on
all parties, including but not limited to the Company and any
Participant or Beneficiary. The Committee shall administer
such terms and provisions in a uniform manner and in full
accordance with any and all laws applicable to the Plan.
(c). To enable the Committee to perform its functions, the Company
shall supply full and timely information to the Committee on
all Plan matters relating to the Participants, their death or
other cause of termination, and such other pertinent facts as
the Committee may require.
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ARTICLE II
DEFINITIONS
2.1 DEFINITIONS.
Accrual Accounts - shall mean a Participant's Excess Benefit Accrual
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Account and Pre-Effective Date Excess Benefit Accrual Accounts, if any.
Beneficiary - The beneficiary designated on a form provided by the
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Participant's corporate employer, or, if no such designation has been
made, the beneficiary designated by the Participant under the
Retirement Plan, or, in the absence of any designation, the personal
representative of the Participant's estate.
Board - shall mean the Board of Directors of Fluor Corporation.
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Change of Control - "Change of Control" of the Company shall be deemed
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to have occurred if, (i) a third person, including a "group" as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, acquires
shares of the Company having twenty-five percent or more of the total
number of votes that may be cast for the election of directors of the
Company; or (ii) as the result of any cash tender or exchange offer,
merger or other business combination or any combination of the
foregoing transactions (a "Transaction"), the persons who were
directors of the Company before the Transaction shall cease to
constitute a majority of the Board of the Company or any successor to
the Company.
Code - shall mean the Internal Revenue Code of 1986, as amended.
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Committee - shall mean the Executive Compensation Committee of the
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Company.
Company - shall mean Fluor Corporation.
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Crediting Options - shall mean the crediting options shown on Schedule
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A, as modified from time to time.
Deferral Account - shall mean collectively, a Participant's Deferred
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Incentive Award Account, Deferred Salary Account, Pre-Effective Date
Deferral Account, the Pre-Effective Date Deferred Salary Accounts and
the Pre-1986 Deferral Accounts.
Deferred Incentive Award Account - shall have the meaning set forth in
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Section 6.1 hereof.
Deferred Salary Account - shall have the meaning set forth in Section
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6.1 hereof.
Effective Date - shall mean May 1, 1995.
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Eligible Employee - shall mean any employee of the Company or its
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subsidiaries who (a) is eligible to participate in the Retirement Plan
or has been specifically designated as eligible for participation in
this Plan by the Committee and (b) is an Executive.
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ERISA - shall mean the Employee Retirement Income Security Act of 1974,
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as amended.
Excess Benefit Accrual Account - shall have the meaning set forth in
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Section 6.2 hereof.
Excess 401(k) Account - shall mean the accounts maintained pursuant to
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the Prior Plan to compensate for lost benefits under the Savings Plan
that were attributable to the annual contribution limitations of
section 401(k) of the Code.
Executive shall mean any employee who has been determined to be
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eligible to participate in the Fluor Corporation and Subsidiaries
Executive Incentive Compensation Program, or any other person which the
Committee determines to be eligible for participation.
Fiscal Year - shall mean the twelve-month period ending on December 31
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of each year.
Incentive Award - shall mean awards made pursuant to the terms of the
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Fluor Corporation and Subsidiaries Executive Incentive Compensation
Program, and any other incentive program for Executives or other highly
compensated employees whose participants the Committee determines to be
eligible for participation in this Plan.
Net Asset Value - shall mean a mutual fund's share value, calculated
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once a day, based on the closing market price for each security in the
fund's portfolio. It is computed by deducting the fund's liabilities
from the portfolio's total assets and dividing this amount by the
number of shares outstanding.
Participant - shall mean any Eligible Employee who has one or more
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Deferral Accounts and/or one or more Accrual Accounts under this Plan.
Performance Plan - shall mean the Fluor Performance Plan.
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Plan - shall mean the Fluor Executive Deferred Compensation Program the
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terms of which are set forth herein.
Pre-1986 Deferral Account - shall have the meaning set forth in Section
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6.1 hereof.
Pre-Effective Date Deferral Account - shall have the meaning set forth
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in Section 6.1 hereof.
Pre-Effective Date Deferred Salary Account - shall have the meaning set
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forth in Section 6.1 hereof.
Pre-Effective Date Excess Benefit Accrual Account - shall have the
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meaning set forth in Section 6.2 hereof.
Prior Plan - shall mean the Fluor Corporation and Subsidiaries
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Executive Deferred Salary Program.
Retirement Plan - shall mean the Fluor Corporation Defined Retirement
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Plan.
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Salary - shall mean the base salary regularly paid to an employee
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including the employee's deferrals under Sections 401(k) and 125 of the
Code.
Savings Plan - shall mean the Fluor Corporation Salaried Employees'
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Savings Investment Plan.
Termination of Service - Termination of the full-time employee/employer
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relationship between a Participant and Fluor Corporation or any of its
subsidiaries by reason of retirement, death, resignation, involuntary
termination, permanent total disability or change in status to a
part-time employee, as these terms are defined for purposes of the
Retirement Plan.
ARTICLE III
PARTICIPATION
3.1 SALARY DEFERRALS. Any Eligible Employee will, for the period of such
membership, be entitled to defer all or a portion of Salary pursuant to
the provisions of Section 4.2(a) hereof for so long as he or she
remains an Eligible Employee. If an Eligible Employee is removed as an
Executive, such Eligible Employee will, notwithstanding such removal,
remain eligible to defer salary through the end of the calendar year in
which such removal occurred.
3.2 INCENTIVE AWARD DEFERRALS. Any Eligible Employee who earns an Incentive
Award which becomes payable after the Effective Date will be entitled
to defer such Incentive Award or portion thereof pursuant to the
provisions of Section 4.2(b) hereof.
3.3 EXISTING ACCOUNTS. All undistributed account balances in the Prior Plan
as of the Effective Date are hereby transferred to and made a part of
this Plan. The Prior Plan is hereby merged into this Plan as of the
Effective Date and all benefits previously payable under the Prior Plan
shall be paid solely from this Plan. Any such account balances will be
subject to Adjustment pursuant to the terms of Section 7.1 hereof and,
subject to the deferral period or periods previously elected by the
Employee, will be maintained, determined and distributed in accordance
with the terms hereof. All undistributed account balances of Eligible
Employees under the Fluor Excess Benefit Plan as of the Effective Date
are hereby transferred to and made a part of this Plan and such account
balances will be subject to Adjustment pursuant to the terms of Section
7.1 hereof. On and after the Effective Date all benefits previously
payable to Eligible Employees under the Fluor Excess Benefit Plan shall
be paid solely under this Plan.
3.4 EXCESS BENEFIT ACCRUALS. As of the last day of each calendar year each
Eligible Employee shall be entitled to receive an Excess Benefit
Accrual if and to the extent earned in accordance with the provisions
of Section 5.1 hereof.
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ARTICLE IV
DEFERRALS
4.1 AMOUNTS SUBJECT TO DEFERRAL. Subject to the effect of any previously
authorized or required deductions, reductions or income or employment tax
withholdings applicable to such compensation, an Eligible Employee may
elect to defer all or any portion of his or her Salary or any Incentive
Award, or his or her distributions upon termination subsequent to a Change
in Control, as described in Section 9.1.
4.2 TIMING AND MECHANICS OF ELECTION.
(a). Salary - The amount of Salary to be deferred for future payroll
periods must be specified by the Eligible Employee in writing to his
or her corporate employer as a fixed percentage of Salary. Such
deferral election shall be effective with the first payroll period
within the first fiscal quarter beginning after receipt of the
election by the Company and will continue in effect until a subsequent
election or termination of the election is received by the Company,
which change or termination shall also be effective as of the first
payroll period within the first fiscal quarter beginning after receipt
of such election or termination. The deferral percentage so specified
may not be changed, terminated or re-initiated more often than once
every fiscal quarter.
(b). Incentive Awards - The amount of any Incentive Award to be deferred
must be specified by the Eligible Employee in writing to his or her
corporate employer no later than the end of the fiscal period(s) for
which performance is measured in determining the amount of the
Incentive Award. The amount to be deferred may be specified either as
a fixed dollar amount or as a percentage of the Incentive Award. Such
amount or percentage, once specified, is irrevocable as to such
Incentive Award.
(c). Change of Control - The amounts to be deferred under Section 9.1 must
be specified by the Eligible Employee in writing to his or her
corporate employer at the time the election is required to be made
pursuant to Section 9.1. The amount to be deferred shall be the entire
lump sum distribution due upon Change of Control, or this amount taken
with all or a portion of the other moneys due to him or her from the
Company upon termination, as described in Section 9.1.
4.3 DEFERRAL PERIODS. Unless otherwise specified by the Eligible Employee at
the time of his or her deferral election, payment of such amounts shall be
deferred until such Eligible Employee's Termination of Service. If a
specific deferral period has been selected, the deferral period shall end
upon the earlier to occur of (a) the Eligible Employee's Termination of
Service or (b) expiration of the specified deferral period.
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ARTICLE V
OTHER ACCRUALS
5.1 EXCESS BENEFIT ACCRUALS. As of the last business day of each month, the
Company shall credit the Excess Benefit Accrual Account of each Eligible
Employee with an amount equal to the excess of the amount of Company
contributions which would have been allocated to such Eligible Employee's
account under the Retirement Plan for the calendar year but for the
limitations imposed by Sections 401 and 415 of the Code over the actual
amount of company contributions allocated to his or her accounts under such
plans for the calendar year. As of the last business day of each calendar
month, the Company shall credit the Excess Benefit Accrual Account of each
Eligible Employee with an amount equal to the excess of the amount of
Company contributions which would have been made to the account of such
Eligible Employee for such month under Section 5.1 and Article VI of the
Savings Plan, but for the limitations imposed by Sections 401 and 415 of
the Code over the actual amount of Company contributions allocated to his
or her accounts for such month pursuant to such Article VI; provided
however, that such amounts will be so credited only if such Eligible
Employee elects, prior to beginning of any such month, to defer an
additional portion of his or her Salary which is equal to the amount by
which the amounts contributed on behalf of such Eligible Employee pursuant
to Section 5.1 of the Savings Plan for such month were reduced by reason of
the limitations imposed by Sections 401 and 415 of the Code. As of the last
business day of each calendar year, the Company shall credit the Excess
Benefit Accrual Account of each Eligible Employee with an amount equal to
the excess of the amount of company contributions which would have been
allocated to such Eligible Employee's account under the Performance Plan
for the calendar year but for the limitations imposed by Sections 401 and
415 of the Code over the actual amount of Company contributions allocated
to his or her accounts under such plan for the calendar year.
5.2 COMPENSATING ACCRUALS. Each Eligible Employee who elects to defer all or a
portion of his or her Salary pursuant to Section 4.2(a) hereof will also be
credited with additional accruals to his or her Deferred Salary Account to
compensate for reductions in Retirement Plan, Savings Plan, and Performance
Plan contributions that result from such Salary deferral. Such accruals
shall be calculated as follows:
(a). As of the last business day of each calendar month, there shall be
credited to the account of each Eligible Employee, an additional
amount that is equal to the amount by which Company contributions to
such Eligible Employee's accounts in the Retirement Plan were reduced
by reason of Salary deferrals made under this Plan.
(b). At the last business day of each calendar month, there shall be
credited to the account of each Eligible Employee an additional amount
that is equal to the amount by which Company contributions made under
Article VI of the Savings Plan for such month to the account of such
Eligible Employee are reduced by reason of Salary deferrals made under
this Plan.
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(c). As of the last business day of each calendar year, there shall be
credited to the account of each Eligible Employee, an additional
amount that is equal to the amount by which Company contributions to
such Eligible Employee's accounts in the Performance Plan were reduced
by reason of Salary deferrals made under this Plan.
ARTICLE VI
MAINTENANCE OF ACCOUNTS
6.1 DEFERRAL ACCOUNTS. The Company shall maintain one or more of the following
separate deferral accounts, as applicable, for Eligible Employees: (1) a
Deferred Incentive Award Account to which shall be credited all amounts of
Incentive Awards which have been deferred by such Eligible Employee
pursuant to the provisions of Section 4.2(b) hereof; (2) a Pre-Effective
Date Deferral Account which shall include all undistributed amounts
relating to Incentive Awards as to which a deferral election had been made
prior to the Effective Date, but not including deferred amounts of
Incentive Awards for Fiscal Years ending on or before October 31, 1985; and
(3) a Pre-1986 Deferral Account which shall include all undistributed
amounts relating to Incentive Awards for Fiscal Years ending on or before
October 31, 1985; (4) a Pre-Effective Date Deferred Salary Account to which
shall be credited the balance as of the Effective Date of the amount
standing to the credit of such Eligible Employee under the Prior Plan,
reduced by the amount attributable to the Excess 401(k) Account maintained
under such Prior Plan; and (5) a Deferred Salary Account to which shall be
credited all amounts of Salary deferred on and after the Effective Date and
all amounts credited such Eligible Employee pursuant to Section 5.2 hereof.
6.2 EXCESS BENEFIT ACCRUAL ACCOUNTS. The Company shall maintain the following
separate accrual accounts, as applicable, for Eligible Employees: (1) a
Pre-Effective Date Excess Benefit Accrual Account to which shall be
credited as of the Effective Date all amounts then standing to the credit
of such Eligible Employees in the Fluor Excess Benefit Plan, and in the
Excess 401(k) Account of the Prior Plan; and (2) an Excess Benefit Accrual
Account to which shall be credited all amounts accruing for the benefit of
such Eligible Employee pursuant to Section 5.1 hereof.
6.3 ADJUSTMENTS. Each account of a Participant established pursuant to Sections
6.1 and 6.2 hereof shall be adjusted monthly to reflect any gains and/or
losses thereon (the "Adjustment") in accordance with the provisions of
Section 7.1 hereof.
ARTICLE VII
CREDITING OPTIONS
7.1 CREDITING OPTIONS. The Company has selected certain crediting options , any
of which may be changed, modified or deleted, or additional investment
options may be added, from time to time by the Committee in its discretion
(the "Crediting Options"), provided however, that (a) the Five Year T-Bill
Option will remain available for Pre-Effective Date Deferral Accounts,
Pre-Effective Date Deferred Salary Accounts and Pre-
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Effective Date Excess Benefit Accrual Accounts and, until the end of the
1995 fiscal year, for Salary Deferrals put into place prior to the
Effective Date; and (b) the Fluor Average Interest Factor option shall
always remain available for Pre-1986 Deferral Accounts. At the time that an
Eligible Employee first becomes a Participant, the Participant shall
allocate deferrals among the Crediting Options that will be used as a
measure of the investment performance of the contents of each of his or her
Deferral and Accrual Accounts on a form provided by the Committee. In
making this designation, the Participant may specify that all or any 1%
multiple of each of his or her Deferral and Accrual Accounts be deemed to
be invested in one or more of the Crediting Options. Each Participant will
be able to reallocate the Crediting Options (1) for each of his or her
Deferral and Accrual Accounts and (2) both for current account balances and
for future contributions to these accounts, once every month in 1%
multiples on a form provided by the Committee. Said reallocation will be
effective as of the first day of the month following the month in which the
form is received by the Committee, unless the form is received after the
monthly deadline set from time to time by the Committee for receipt of
reallocation forms, in which case said reallocation will be effective as of
the first day of the next subsequent month. Until a Participant delivers a
new Crediting Options form to the Committee, his or her prior Crediting
Options shall control. If a Participant has never selected a Crediting
Option for deferrals or accruals made after the Effective Date, he or she
shall be deemed to have elected the Money Market Option. The Company shall
use the Participant's Crediting Option designations as the basis for
calculating the Adjustment component of each Deferral and Accrual Account.
If a Participant changes his or her Crediting Option designations, then
such change shall supersede the previous designation effective the first
business day of the month following the month the change is made. The
Company shall begin crediting the Participant's Deferral Accounts with the
amount deferred by the Participant on the last day of the month in which
the applicable deferral amount would have otherwise been paid. The daily
adjustment shall be determined as follows: As of each business day in which
any amount remains credited to any Deferral Account or Accrual Account of a
Participant, each portion of such accounts deemed invested in a particular
Crediting Option shall either be credited or debited with an amount equal
to that determined by multiplying the portion of such account (as measured
by number of shares) deemed invested in a particular Crediting Option by
the Net Asset Value reported for that day for the applicable Investment
Option. As to the applicable amount distributed, the Company shall cease
crediting or debiting adjustments to the Participant's Deferral and/or
Accrual Accounts on the last day of the month prior to the applicable
distribution event set forth in Articles VIII and IX (the "Valuation
Date").
Allocation of investment selections shall be made among the Crediting
Options. A Participant shall have absolutely no ownership interest in any
Crediting Option. The Company shall be the sole owner of (if any) funds
invested in any such Investment Option, as well as all amounts accounted
for in the Deferral and Accrual Accounts, all of which shall at all times
be subject to the claims of the Company's creditors.
A Participant shall be entitled to payment of an amount equal to the amount
in each of his or her Deferral and Accrual Accounts in accordance with
Articles VIII and IX hereof.
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ARTICLE VIII
ACCOUNT DISTRIBUTIONS
8.1 NO DEFERRAL PERIOD SPECIFIED. With respect to any Accrual Account and those
portions of any Deferral Account (including, any Adjustments related
thereto) as to which no specific deferral period has been selected by the
Participant at the time of deferral:
(a). The lump sum payment or the first installment will be paid in January
of the year succeeding termination; provided, however, that the
Company may in its sole discretion elect to make payment on or before
December 31 of the year of termination.
(b). In the event of installment payments, the second installment will be
paid in January following the year in which the first installment was
paid and all remaining installments will be paid annually in January.
(c). Payment in cash in one lump sum will be made to all Participants with
aggregate Accrual and Deferral Account balances of less than
twenty-five thousand dollars ($25,000). For all other Participants,
payments either in cash in one lump sum or in annual installments will
be at the sole discretion of the Participant's corporate employer. The
number of installment payments will not exceed twenty.
(d). In the event of the death of a Participant prior to commencement of
any payments hereunder, payments will be made to his or her
Beneficiary in accordance with the foregoing provisions. In the event
of the death of a Participant after commencement of benefit payments
in installments but prior to payment of his or her entire entitlement,
payment may be made to his or her Beneficiary in one lump sum or by
continuation of installments at the discretion of the Participant's
corporate employer. In the event installments continue to the
Beneficiary, they will continue to be subject to Adjustment under
Section 7.1 hereof.
8.2 SPECIFIED DEFERRAL PERIOD. With respect to those portions of any Deferral
Account (including any Adjustments related thereto) as to which a specified
deferral period has been selected by a Participant at the time of deferral:
(a). Entitlement to payment will occur upon the earlier of the (i)
Participant's Termination of Service or (ii) upon expiration of the
specific deferral period.
(b). All payments will be made in a lump sum in cash unless (i) in the
cases where entitlement to payment arises upon expiration of the
deferral period, the Participant designates at the time of deferral
that the deferred amount be paid in a specified number (not to exceed
twenty) of annual installments or, (ii) in cases where entitlement to
payment arises upon Termination of Service and where the Participant
has aggregate Accrual and Deferral Account Balances of twenty-five
thousand dollars ($25,000) or more, the Company in its sole discretion
elects to make payments of the deferred amount in a specified number
(not to exceed twenty) of annual installments.
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(c). The lump sum payment or the first installment payment will be paid in
January of the year succeeding entitlement; provided, however, that
the Company may in its sole discretion elect to make such payment on
or before December 31 of the year of entitlement.
(d). If a Participant's entitlement is paid in installments, the second
installment payment will be paid during January of the year following
the year in which the first installment was paid and all remaining
installments will be paid annually in the month of January.
(e). In the event of the death of a Participant prior to commencement of
any payments hereunder, payments will be made to his or her
Beneficiary in accordance with the foregoing provisions. In the event
of the death of a Participant after commencement of benefit payments
in installments but prior to payment of his or her entire entitlement,
payment may be made to his or her Beneficiary in one lump sum or by
continuation of the installments all at the discretion of the
Participant's corporate employer. If a Participant has received his or
her entire entitlement under one or more, but less than all of his or
her deferral elections, and dies prior to commencement of payments
under one or more unpaid deferral elections he or she shall be
considered to have died prior to the commencement of any payments
hereunder. In the event installments continue to the Beneficiary, they
will continue to be subject to Adjustment pursuant to Section 7.1
hereof until distributed.
(f). Notwithstanding the foregoing, in the event of Termination of Service
of the Participant after commencement of benefit payments in
installments but prior to payment of his or her entire entitlement,
continued payment may be made to Participant by continuation of
installments, or may be made pursuant to the provisions of Section
8.1, all at the discretion of the Participant's corporate employer.
(g). Acceptance of payment of the distributions required hereunder to a
Participant or his or her beneficiary (as applicable) shall constitute
a release by such Participant or beneficiary (as applicable) of all
claims against the Company by the Participant or beneficiary (as
applicable).
ARTICLE IX
OTHER DISTRIBUTION EVENTS
9.1 CHANGE OF CONTROL.
(a). Notwithstanding any other Section hereof, if a Participant's
employment with the Company or its subsidiaries terminates for any
reason other than death, within the two-year period beginning on the
date that a Change of Control of the Company occurs, then the Company
shall pay to the Participant by the end of the month following the
month of termination a lump sum distribution of all of his or her
Deferral Accounts and Accrual Accounts. If the Participant dies after
termination
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of employment but before payment of any amount under this Section,
then such amount shall be paid to the Beneficiary within the first
fifteen (15) days of the month following the Participant's death.
(b). A Participant may elect to waive the lump sum distribution of all of
his or her Deferral Accounts and Accrual Accounts provided for in
Section 9.1(a) and maintain these Accounts upon the terms and
conditions of this Program. Such an election is permitted in either of
two ways, and a Participant may make either or both forms of election.
First, such an election can be made subsequent to the Change of
Control and upon termination of the Participant's employment for any
reason other than death within the two year period beginning on the
date of that Change of Control. In the event of a distribution
pursuant to such an election to waive the lump sum distribution,
Participant shall forfeit an amount equal to 10% of the amount that
would otherwise have been distributed to him or her but for the
election. Such forfeited amount shall become the property of the
Company. Second, such an election can be made no less than three
months prior to the date on which a Change of Control occurs. In the
event of such an election, the election shall apply to any Change of
Control occurring at least three months later which is followed by
termination of that Participant's employment for any reason other than
death within the two-year period beginning on the date of that Change
of Control. In the event of a distribution pursuant to such an
election, no forfeiting of 10% of the amount of the distribution shall
occur. Participant may include within this second type of election all
or a portion of any other moneys which would be due to him or her from
the Company upon termination, including for example but without
limitation accrued vacation, sick pay and severance benefits.
9.2 UNFORESEEABLE EMERGENCY.
(a). A distribution of a portion of a Participant's Deferral Accounts and
Accrual Accounts because of an Unforeseeable Emergency will be
permitted only to the extent required by the Participant to satisfy
the emergency need. Whether an Unforeseeable Emergency has occurred
will be determined solely by the Committee. Distributions in the event
of an Unforeseeable Emergency may be made by and with the approval of
the Committee upon written request by a Participant.
(b). An "Unforeseeable Emergency" is defined as a severe financial hardship
to the Participant caused by sudden and unexpected illness or accident
of the Participant or of a dependent of the Participant (as defined in
Code Section 152(a), as interpreted by Treas. Reg. 1457-2(h)(iv) and
(v) and Rev. Proc. 92-65), loss of the Participant's property due to
casualty, or other extraordinary and unforeseeable circumstances
caused by a result of events beyond the Participant's control. The
circumstances that will constitute an unforeseeable emergency will
depend upon the facts of each case, but, in any event, any
distribution under this Section shall not exceed the amount required
by the Participant to resolve the hardship after (i)
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reimbursement or compensation through insurance or otherwise, (ii)
obtaining liquidation of the Participant's assets, to the extent such
liquidation would not itself cause a severe financial hardship, or
(iii) suspension of deferrals under the Plan.
9.3 WITHDRAWALS. A Participant may elect by filing with the Company a form
specified by the Committee, to receive an amount equal to ninety percent of
his or her Deferral Accounts and Accrual Accounts at any time prior to his
or her Termination of Service. If a Participant makes an election described
in this Section 9.3 the balance of the Participant's Deferral Accounts not
distributed to the Participant shall be forfeited to the Company; the
amount to which he or she is entitled under this Section 9.3 shall be
distributed to the Participant in a single lump sum as soon as
administratively practical following such election; the Participant shall
be prohibited from participating in deferral portions of the Plan for the
balance of the Fiscal Year in which this distribution is made and the
following Fiscal Year; any elections previously made pursuant to Section
4.2 of this Plan shall cease to be effective.
9.4 HUMANE TREATMENT DISTRIBUTION. In the event of the divorce or legal
separation of a Participant, and the awarding of all or a portion of the
Deferral Accounts and Accrual Accounts to the spouse of the Participant by
court order, , such spouse may elect, by filing with the Committee a form
specified by the Committee and by providing such other information as the
Committee may in its discretion reasonably request in order to confirm that
the applicable facts and circumstances are present, to receive a
distribution of his or her portion of the Deferral Accounts and Accrual
Accounts pursuant and subject to the terms of Section 8.1.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 PARTICIPANT RIGHTS IN THE UNFUNDED PLAN. Any liability of the Company to
any Participant with respect to any benefit shall be based solely upon the
contractual obligations created by the Plan; no such obligation shall be
deemed to be secured by any pledge or any encumbrance on any property of
the Company. The Company's obligations under this agreement shall be an
unfunded and unsecured promise to pay. No Participant or his or her
designated beneficiaries shall have any rights under the Plan other than
those of a creditor of the Company. Assets segregated or identified by the
Company for the purpose of paying benefits pursuant to the Plan remain
general corporate assets subject to the claims of the Company's creditors.
10.2 NON-ASSIGNABILITY. Neither the Participant nor his or her Beneficiary shall
have any power or right to transfer, assign, anticipate, hypothecate or
otherwise encumber any part or all of the amounts payable hereunder, which
are expressly declared to be unassignable and non-transferable. Any such
attempted assignment or transfer shall be void and the Company shall
thereupon have no further liability to such Participant or such Beneficiary
hereunder. No amount payable hereunder shall, prior to actual payment
thereof, be subject to seizure by any creditor of any Participant or
Beneficiary for the payment of debt, judgment or other obligation, by a
proceeding at law or in equity, nor
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transferable by operation of law in the event of the bankruptcy,
insolvency or death of the Participant, his or her designated Beneficiary
or any other beneficiary hereunder.
10.3 TERMINATION OR AMENDMENT OF PLAN. The Company retains the right, at any
time and in its sole discretion, to amend or terminate the Plan, in whole
or in part. Any amendment of the Plan shall be approved by the Board,
shall be in writing, and shall be communicated to the Participants.
Notwithstanding the above, the Committee shall have the authority to
change the requirements of eligibility or to modify the Crediting Options
hereunder. No amendment of the Plan shall materially impair or curtail the
Company's contractual obligations arising from deferral elections
previously made or for benefits accrued prior to such amendment.
Notwithstanding any other provision herein to the contrary, in the event
of Plan termination, payment of Deferral and Accrual Accounts shall occur
not later than the last business day of the month following the month in
which the termination is made effective.
10.4 CONTINUATION OF EMPLOYMENT. This Plan shall not be deemed to constitute a
contract of employment between the Company and a Participant. Nothing in
the Plan or in any instrument executed pursuant to the Plan will confer
upon any Participant any right to continue in the employ of the Company or
any Subsidiary or affect the right of the Company or any Subsidiary to
terminate the employment of any Participant at any time with or without
cause. Nothing in the Plan will otherwise affect any Participant's
employment relationship with the Company.
10.5 RESPONSIBILITY FOR LEGAL EFFECT. Neither the Committee nor the Company
makes any representations or warranties, express or implied, or assumes
any responsibility concerning the legal, tax or other implications or
effects of this Plan.
10.6 WITHHOLDING. The Company shall withhold from or offset against any payment
or accrual made under the Plan any taxes the Company determines it is
required to withhold by applicable federal, state or local laws.
10.7 OTHER COMPENSATION PLANS. The adoption of the Plan shall not affect any
other incentive or other compensation plans in effect for the Company or
any subsidiary, nor shall the Plan preclude the Company from establishing
any other forms of incentive or other compensation for employees of the
Company or any subsidiary.
10.8 PLAN BINDING ON SUCCESSORS. The Plan shall be binding upon the successors
and assigns of the Company.
10.9 SINGULAR, PLURAL. Wherever appropriate in this Plan, nouns in the singular
shall include the plural.
10.10 CONTROLLING LAW. The Plan shall be governed by and construed in accordance
with the internal law, without regard to conflict of law principles, of
the State of California to the extent not pre-empted by the laws of the
United States of America.
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