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SOUTHWEST AIRLINES CO. EXCESS BENEFIT PLAN

Employee Benefits Plan Agreement

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This Employee Benefits Plan Agreement involves

SOUTHWEST AIRLINES CO

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Title: SOUTHWEST AIRLINES CO. EXCESS BENEFIT PLAN
Governing Law: Texas     Date: 2/2/2009
Industry: Airline     Sector: Transportation

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Exhibit 10.32

SOUTHWEST AIRLINES CO.

EXCESS BENEFIT PLAN


SOUTHWEST AIRLINES CO.

EXCESS BENEFIT PLAN

Table of Contents

 

 

  

 

  

Page

ARTICLE I

  

DEFINITIONS

  

1

ARTICLE II

  

ELIGIBILITY

  

2

ARTICLE III

  

CREDITS TO ACCOUNT

  

3

ARTICLE IV

  

BENEFITS

  

4

ARTICLE V

  

PAYMENT OF BENEFITS

  

4

ARTICLE VI

  

IN-SERVICE WITHDRAWALS AND LOANS

  

5

ARTILCLE VII

  

ADMINISTRATION OF THE PLAN

  

7

ARTICLE VIII

  

LIMITATION OF RIGHTS

  

8

ARTICLE IX

  

LIMITATION OF ASSIGNMENT AND PAYMENTS TO LEGALLY INCOMPETENT DISTRIBUTEE

  

8

ARTICLE X

  

AMENDMENT TO OR TERMINATION OF THE PLAN

  

9

ARTICLE XI

  

STATUS OF PARTICIPANT AS UNSECURED CREDITOR

  

9

ARTICLE XII

  

GENERAL AND MISCELLANEOUS

  

9

 


SOUTHWEST AIRLINES CO.

EXCESS BENEFIT PLAN

PREAMBLE

WHEREAS, Southwest Airlines Co., a corporation formed under the laws of the State of Texas, desires to establish an excess benefit plan for the exclusive benefit of its employees to restore retirement benefits decreased due to limitations imposed by Section 415 of the Internal Revenue Code of 1986; and

WHEREAS, Southwest Airlines Co. intends that any Participant or Beneficiary under the Plan shall have the status of an unsecured general creditor with respect to the Plan and any Trust Fund;

NOW, THEREFORE, Southwest Airlines Co. hereby establishes the Southwest Airlines Co. Excess Benefit Plan, effective January 1, 1999.

ARTICLE I

DEFINITIONS

1.1 “Account” shall mean the record maintained by the Committee showing the monetary value of the individual interest in the Plan of each Participant or Beneficiary. The term “Account” shall refer only to a bookkeeping entry and shall not be construed to require the segregation of assets on behalf of any Participant or Beneficiary.

1.2 “Beneficiary” shall mean, with respect to each Participant, the beneficiary of such Participant under the Southwest Airlines Co. ProfitSharing Plan.

1.3 “Board” shall mean the Board of Directors of Southwest Airlines Co.

1.4 “Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time, and the rules and regulations promulgated thereunder.

1.5 “Committee” shall mean the committee designated by the Board to administer the Plan.

1.6 “Company” shall mean Southwest Airlines Co., or its successor or successors.

1.7 “Effective Date” shall mean January 1, 1999.

1.8 “Excess Amount” shall mean, for a particular Plan Year, the amount by which the allocation(s) of a Participant under the Retirement Plans which are attributable to such Plan Year are reduced by reason of the application of the limitations set forth in Section 415 of the Code.

 

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1.9 “Mandatory Retirement Age” shall, with respect to each Southwest Airlines Co. pilot, mean the mandatory retirement age, if any, imposed by the Federal Aviation Agency.

1.10 “Participant” shall mean an Employee who has met the eligibility requirements for participation in this Plan, as set forth in Article II hereof.

1.11 “Plan” shall mean the Southwest Airlines Co. Excess Benefit Plan, as set forth in this document, and as amended from time to time.

1.12 “Plan Year” shall mean the annual period beginning on January 1 and ending on December 31, both dates inclusive of each year.

1.13 “Retirement Plans” shall mean the Southwest Airlines Co. ProfitSharing Plan (the “ProfitSharing Plan”), the Southwest Airlines Co. 401(k) Plan and the Southwest Airlines Co. Pilots Retirement Savings Plan.

1.14 “Trust Agreement” shall mean the agreement, if any, including any amendments thereto, entered into between the Company and the Trustee to carry out the provisions of the Plan.

1.15 “Trust Fund” shall mean the cash and other properties held and administered by the Trustee pursuant to the Trust Agreement.

1.16 “Trustee” shall mean the designated trustee acting at any time under the Trust Agreement.

1.17 “Valuation Date” shall mean each business day on which the financial markets are open for trading activity.

ARTICLE II

ELIGIBILITY

Each employee of the Company who qualifies for an allocation under each or any one of the Retirement Plans, and whose Excess Amount is at least $1,000, shall be eligible to participate in this Plan.

 

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ARTICLE III

CREDITS TO ACCOUNT

3.1 For each Plan Year, as soon as practicable following the date on which the company funds its contribution, if any, to the ProfitSharing Plan, the Company shall credit to the Account of each Participant who is actively employed on the date on which such ProfitSharing contribution is funded, an amount equal to the Excess Amount of such Participant for the preceding Plan Year.

3.2 As of each Valuation Date, the Committee shall credit to each Participant’s Account the deemed income or losses attributable thereto, as provided in Section 3.3 below, as well as any other credits to or charges against such Account, including such Participant’s pro rata portion of Plan administrative expenses. All payments from an Account between Valuation Dates shall be charged against the Account as of the preceding Valuation Date.

3.3 Each Participant, prior to initial participation in the Plan, may, in the manner prescribed by the Committee, designate the manner in which amounts credited to such Participant’s Account pursuant to Section 3.1 above shall be deemed to be invested among the various options designated by the Committee for this purpose. Such designation may be changed as of any Valuation Date solely with respect to amounts credited under Section 3.1 after the date of such change, and shall be effected by filing an election with the Committee, in the manner prescribed by the Committee, within the period of time prior to such Valuation Date established by the Committee. The Participant must designate, in such minimum percentages or amounts as may be prescribed by the Committee, that portion of the amount to be credited to the Account of such Participant which is to be allocated to each investment option offered hereunder. In the absence of any such investment designation, amounts credited to a Participant’s Account shall be deemed to be invested in such property as the Committee, in its sole and absolute discretion, shall determine. In no event may any Participant designate the investment of amounts credited to an Account in stock or other securities of the Company. The Committee may, but shall not be obligated to, invest amounts credited to a Participant’s Account in accordance with the investment designations of such Participant; nevertheless, the Account of such Participant shall be credited with the amount of income, gains and losses attributable thereto, as if the amounts credited to such Account had been so invested. The Committee shall be authorized at any time and from time to time to modify, alter, delete or add to the investment options hereunder. In the event a modification occurs, the Committee shall prior to the effective date of such change, notify those Participants whom the Committee, in its sole and absolute discretion, determines are affected by the change. The Committee shall not be obligated to substitute options with similar investment criteria for existing options, nor shall it be obligated to continue the types of investment options presently available to the Participants.

 

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ARTICLE IV

BENEFITS

4.1 Upon the death of a Participant, the Beneficiary of such Participant shall be entitled to the entire value of all amounts credited to such Participant’s Account, as of the Valuation Date coincident with or preceding the date of distribution.

4.2 Upon a Participant’s termination of employment or attainment of Mandatory Retirement Age, as applicable, such Participant shall be entitled to the entire value of all amounts credited to the Account of such Participant, as of the Valuation Date coincident with or preceding the date of distribution.

ARTICLE V

PAYMENT OF BENEFITS

5.1 Payment of a Participant’s benefit on account of the attainment of Mandatory Retirement Age or termination of employment shall be made either in a lump sum in cash, or in cash payments in annual installments over a period certain not exceeding five (5) years, such method of payment to be irrevocably elected by the Participant upon initial participation in the Plan in the manner prescribed by the Committee; provided, however, that payment will be made in a lump sum in any event if, at the time distribution of the Account is to commence, the amount credited to the Account is $25,000 or less. Furthermore, notwithstanding the commencement of installment payments under this Section 5.1, all remaining amounts credited to a Participant’s Account shall be distributed in a lump sum in cash, at such time as the value of such remaining amounts is $25,000 or less. Payment shall commence at the time specified by the Participant upon initial participation in the


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