1993
DEFERRED COMPENSATION PLAN FOR EXECUTIVES AND KEY
EMPLOYEES
AMENDED AND
RESTATED DECEMBER 2008
i
1993
DEFERRED COMPENSATION PLAN
FOR EXECUTIVES AND KEY EMPLOYEES
December 2008 Restatement
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1
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1
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1.2 “Administrative Appendix
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1.4 “Annual Deferral Amount
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1.18 “Dividend Equivalent
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1.23 “Moody’s Seasoned Corporate
Bond Rate
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1.25 “Phantom Stock Account
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8
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1.31 “Pre-Retirement
Distribution
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1.32 “Pre-Retirement Survivor
Benefit
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1.38 “Termination Benefit
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1.39 “Termination of Employment
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ii
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1.40 “Unforeseeable Financial
Emergency
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1.41 “Value Management Award
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ARTICLE 2 Selection, Enrollment,
Eligibility
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2.1 Selection by Committee
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2.2 Enrollment Requirement
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2.3 Commencement of Participation
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2.4 Paid Leave of Absence
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2.5 Unpaid Leave of Absence
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10
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ARTICLE 4 Pre-Retirement Distribution/
Unforeseeable Financial Emergencies
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4.1 Pre-Retirement Distributions
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4.2 Withdrawal Payout/Suspensions for
Unforeseeable Financial Emergencies
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5.2 Payment of Retirement Benefit
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5.3 Death Prior to Completion of Retirement
Benefit
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12
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ARTICLE 6 Pre-Retirement Survivor
Benefit
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6.1 Pre-Retirement Survivor Benefit
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6.2 Payment of Pre-Retirement Survivor
Benefit
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ARTICLE 7 Termination Benefit
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12
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7.2 Payment of Termination Benefit
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ARTICLE 8 Disability Waiver and
Benefit
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ARTICLE 9 Termination, Amendment or
Modification
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14
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ARTICLE 10 Administration
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10.1 Plan Sponsor and Administrator
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10.2 Powers and Authority of the
Company
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10.4 Binding Effect of Decisions
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10.6 Stock Subject to the Plan
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10.7 Equitable Adjustment
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11.1 Unsecured General Creditor
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11.2 Employer’s Liability
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11.5 Not a Contract of Employment
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11.6 Furnishing Information
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iii
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11.13 Distribution in the Event of
Taxation
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11.14 Legal Fees To Enforce Rights
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11.15 Payment of Withholding
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11.16 Coordination with Other
Benefits
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11.17 Value Management Deferral Amounts
Subsequently Deferred
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iv
1993
DEFERRED COMPENSATION PLAN FOR EXECUTIVES
AND KEY EMPLOYEES
December 2008
Restatement
The purpose
of this Plan is to enhance the motivational value of the salaries
and incentive compensation of a select group of management and
highly compensated employees who contribute materially to the
continued growth, development and future business success of the
Company and its subsidiaries by providing them the opportunity to
defer cash compensation. The Plan is intended to aid the Company
and its subsidiaries in attracting and retaining key employees and
give them an incentive to increase the profitability of the Company
and its subsidiaries. In the future, the Company, in its
discretion, may amend the Plan to include a Company
contribution.
The Company
adopted this Plan effective October 1, 1993 as a successor to
the Prior Plan, which operated for the nine month period ending
September 30, 1993. The Plan was restated with a general
effective date of January 1, 1996. The Company’s name
changed in connection with a corporate reorganization involving the
distribution on December 2, 1996 of CFC stock to the
Company’s shareholders. In order to reflect the new Company
name and to make various administrative and clarifying changes, the
Company adopted a restatement of the Plan effective January 1,
1998. The Company further amended and restated the Plan effective
January 1, 2008. This restatement of the Plan is adopted to
conform certain governance and administrative provisions with those
of the Company’s 2005 Deferred Compensation Plan for
Executives and Key Employees (December 2008 Restatement) and
is effective January 1, 2009.
For
purposes hereof, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following
indicated meanings:
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1.1
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“Account Balance” means
the sum of (i) amounts credited to a Participant’s Cash
Account, plus (ii) Phantom Stock Units credited to a
Participant’s Phantom Stock Account, reduced by (iii) all
distributions made pursuant to the terms and conditions of this
Plan. Amounts credited to a Participant’s Cash Account shall
derive from Annual Deferral Amounts, the Participant’s
deferred ROE Awards and deferred Value Management Awards, in the
latter two cases to be credited as of the date immediately
following the end of the applicable award cycle.
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1.2
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“Administrative
Appendix” means the rules and procedures governing the
administration of this Plan, as set forth in a separate appendix
which by this reference is specifically incorporated into this
Plan.
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1.3
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“Annual Bonus” means any
bonus or incentive compensation, other than an ROE Award or a Value
Management Award, earned by a Participant in each Plan Year under
all cash bonus and incentive plans of the Company, and any
subsidiary, whether or not paid in such Plan Year.
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1.4
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“Annual Deferral Amount”
means that portion of a Participant’s Base Annual Salary and
Annual Bonus that a Participant elects to have and is deferred, in
accordance with the Plan, for any one Plan Year. In the event of
Retirement, Disability, death or a Termination of Employment prior
to the end of a Plan Year, such year’s Annual Deferral Amount
shall be the actual amount withheld prior to such event.
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1.5
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“Base Annual Salary”
means a Participant’s base annual salary that is to be paid
to a Participant for each Plan Year, determined as of the first day
of that year, excluding bonuses, commissions, overtime, incentive
payments, non-monetary awards, and other fees, before reduction for
compensation deferred pursuant to all qualified, nonqualified and
Code section 125 plans of the Company or any subsidiary.
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1.6
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“Beneficiary” means one
or more persons, trusts, estates or other entities, designated in
accordance with the Plan that are entitled to receive benefits
under this Plan upon the death of a Participant.
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1.7
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“Board” means the Board
of Directors of the Company.
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1.8
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“Cash Account” shall
mean that portion of a Participant’s Account Balance that is
not credited to such Participant’s Phantom Stock
Account.
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1.9
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“CFC” means Consolidated
Freightways Corporation, a Delaware corporation.
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1.10
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“Change in Control”
means the occurrence of an event described in any one of the
following clauses (a) through (f):
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(a)
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any
“person,” as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than (A) the Company or its
affiliates, (B) any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or its
affiliates, and (C) any corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the
same proportions as their ownership of the common stock, par value
$0.625 per share, of the Company), is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under
the
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Exchange Act), directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such person any securities
acquired directly from the Company or its affiliates) representing
25% or more of the combined voting power of the Company’s
then outstanding voting securities;
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(b)
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the
following individuals cease for any reason to constitute a majority
of the number of directors then serving: individuals who, on the
effective date, constitute the Board and any new director (other
than a director whose initial assumption of office is in connection
with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of
directors of the Company) whose appointment or election by the
Board or nomination for election by the Company’s
stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either
were directors on the effective date or whose appointment, election
or nomination for election was previously so approved or
recommended;
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(c)
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there is consummated a merger or
consolidation of the Company or any direct or indirect subsidiary
of the Company with any other corporation, other than (A) a
merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving or parent entity) more than
50% of the combined voting power of the voting securities of the
Company or such surviving or parent entity outstanding immediately
after such merger or consolidation or (B) a merger or
consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no “person”
(as defined above), directly or indirectly, acquired 25% or more of
the combined voting power of the Company’s then outstanding
securities (not including in the securities beneficially owned by
such person any securities acquired directly from the Company or
its affiliates);
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(d)
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the
stockholders of the Company approve a plan of complete liquidation
of the Company or there is consummated an agreement for the sale or
disposition by the Company of assets having an aggregate book value
at the time of such sale or disposition of more than 75% of the
total book value of the Company’s assets on a consolidated
basis (or any transaction having a similar effect), other than any
such sale or disposition by the Company (including by way of
spin-off or other distribution) to an entity, at least 50% of the
combined voting power of the voting securities of which are
owned
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immediately
following such sale or disposition by stockholders of the Company
in substantially the same proportions as their ownership of the
Company immediately prior to such sale or disposition;
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(e)
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there is consummated the sale or
other disposition by the Company, however effected, of at least two
of the three primary business units of the Company, whether in a
single transaction or in a series of transactions occurring within
an 18-month period, and whether or not one or both of such business
units constitute part of a larger enterprise at the time of the
sale or other disposition; provided, however , that this
clause (e) shall apply only to grantees who are employed by
the Company and shall not apply to grantees who are employed by the
Company’s business units; and provided further , that
the Board of Directors of the Company may, upon notice to the
affected grantees given at any time, terminate this clause
(e) without the consent of such grantees, except that any such
notice shall not be effective to terminate this clause (e) if a
Change in Control occurs pursuant to this clause (e) within
ninety (90) days after such notice is given; or
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(f)
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there is consummated the sale or
other disposition, however effected, of one of the primary business
units of the Company, or the sale or other disposition by the
Company, however effected, of the Emery Worldwide Airlines, Inc.
business unit, whether or not such business unit constitutes part
of a larger enterprise at the time of the sale or other
disposition; provided, however , that this clause
(f) shall apply only to grantees (i) who, immediately prior to
such sale or other disposition, were employed by the business unit
that is sold or otherwise disposed of and (ii) who are not
employed by the Company or any of its subsidiaries immediately
following such sale or other disposition.
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As
used in clauses (e) and (f) above:
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(i)
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“primary business units”
means Con-Way Transportation Services, Inc., Emery Air Freight
Corporation and Menlo Logistics, Inc., and
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(ii)
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a
“sale or other disposition” of a business unit
inlcudes:
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(A)
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a
sale by the Company of the then outstanding shares of capital stock
of the business unit having more than 50% of the then
existing
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voting power of all outstanding
securities of the business unit, whether by merger, consolidation
or otherwise;
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(B)
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the
sale of all or substantially all of the assets of the business
unit; and
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(C)
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any
other transaction or course of action (including, without
limitation, a spin-off or other distribution) engaged in, directly
or indirectly, by the Company or the business unit that has a
substantially similar effect as the transactions of the type
referred to in clause (A) or (B) above;
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it
being the intent that a sale or other disposition of a business
unit occurs even if (x) such business unit constitutes part of
a larger enterprise at the time of the relevant sale or disposition
transaction and (y) such sale or disposition transaction
involves such larger enterprise (such as, by way of example and
without limitation, when one or more business units are
subsidiaries of a common parent and either (A) the common
parent is spun-off or (B) there is consummated a sale of the
stock or other equity interests in the common parent having more
than 50% of the then existing voting power of all outstanding
securities of the common parent).
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The
foregoing notwithstanding, (1) a sale or other disposition of
a business unit shall not be deemed to have occurred for purposes
of clauses (e) and (f) above (x) except in the case of a
transaction described in clause (B) above, so long as the
Company or any of its Affiliates (as such term is defined in
Rule 12b-2 under the Securities Exchange Act of 1934, as
amended), individually or collectively, own the then outstanding
shares of capital stock of the business unit having 50% or more of
the then existing voting power of all outstanding securities of the
business unit, or (y) in the event of the sale of shares of
capital stock of the business unit (or the sale of shares or other
equity interests in any parent company of such business unit) to
any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, the business unit or any other
Affiliate of the Company, and (2) a sale or other disposition
of a business unit shall not be deemed to have occurred for
purposes of clause (f) above in the event of the sale or
distribution of shares of capital stock (including, without
limitation, a spin-off) of the business unit to shareholders of the
Company, or the sale of assets of the business unit to any
corporation or other entity owned, directly or indirectly, by the
shareholders of the Company, in either
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case in
substantially the same proportions as their ownership of stock in
the Company.
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1.11
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“Claimant” means any
Participant or Beneficiary of a deceased Participant who makes a
claim for determination under the Plan.
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1.12
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“Code” means the
Internal Revenue Code of 1986, as amended.
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1.13
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“Committee” means the
Compensation Committee of the Board or its delegates.
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1.14
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“Common Stock” means the
common stock, par value $0.625 per share, of the
Company.
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1.15
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“Company” means Con-way
Inc., a Delaware corporation.
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1.16
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“Disability” means a
disability for which a Participant qualifies for benefits under the
Con-way Inc. Long Term Disability Plan as it may be amended from
time to time or, for Participants employed by CFC or one of its
subsidiaries, the Consolidated Freightways Corporation Long Term
Disability Plan or any successor plan.
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1.17
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“Distribution Event”
shall mean: (a) in the case of a withdrawal for an
Unforeseeable Financial Emergency, the date the Committee approves
the payout, provided that a Distribution Event shall only be deemed
to have occurred for the portion of the Participant’s Account
Balance that is approved to be paid out (b) in the case of a
Retirement Benefit, the date of Retirement, (c) in the case of
death, the date of death, (d) in the case of a Pre-Retirement
Survivor Benefit, the date of death, (e) in the case of a
Pre-Retirement Distribution, the first day of the Plan Year chosen
by the Participant on the Election Form for such distribution,
(f) in the case of a Termination Benefit, the date of
Termination of Employment (or the Payroll Termination Date, if
applicable), and (g) in the case of a Disability distribution,
the date the Committee approves the payout.
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1.18
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“Dividend Equivalent”
means an amount representing the dividend paid on that number of
shares of Common Stock equal to the number of Phantom Stock Units
credited to a Participant’s Phantom Stock Account as of the
record date for such dividend.
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1.19
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“Election Form” means
the form established from time to time by the Committee that a
Participant completes, signs and returns to the Committee to make
an election under the Plan. A Participant may complete and return
the Election Form electronically and such electronic transmission
shall be treated as a valid signature.
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1.20
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“Employer” means the
Company or any of its subsidiaries that employs a Participant. CFC
and its subsidiaries shall cease to be Employers effective
December 2, 1996, the date of distribution of the stock of CFC
to the Company’s shareholders. No further deferral of
compensation by their employees shall be permitted under this Plan
after that date. The obligation to pay the Account Balance for such
employees based on deferral of compensation before that date shall
be retained by the Company.
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1.21
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“ERISA” means the
Employee Retirement Income Security Act of 1974, as
amended.
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1.22
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“Fair Market Value” of a
share of Common Stock as of a particular date shall mean the
closing price per share of Common Stock on the New York Stock
Exchange on the last trading day immediately preceding such
date.
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1.23
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“Moody’s Seasoned
Corporate Bond Rate,” means the arithmetic average of yields
of representative bonds, including industrials, public utilities,
Aaa, Aa, A and Baa bonds as published by Moody’s Investors
Service, Inc. or any successor to that service. For each Plan Year,
this rate shall be determined by the Committee using the rate
calculated for the month of October preceding the Plan
Year.
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1.24
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“Participant” for any
Plan Year means any employee of an Employer who is selected to
participate in the Plan for such Plan Year by the Committee and
commences participation in accordance with
Article 2.
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1.25
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“Phantom Stock Account”
shall mean that portion of a Participant’s Account Balance
which is credited with Phantom Stock Units.
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1.26
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“Phantom Stock Unit”
shall mean a unit which shall at all times be equal in value to one
whole share of Common Stock.
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1.27
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“Plan” means the
Company’s 1993 Deferred Compensation Plan for Executives and
Key Employees, Amended and Restated December 2008, evidenced
by this instrument, as amended from time to time, and as
supplemented by the Administrative Appendix.
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1.28
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“Plan Administrator”
means the Committee, or any person or persons to whom the Committee
delegates its authority or any portion thereof.
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1.29
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“Plan Entry Date” means
the date on which an employee selected by the Committee to
participate in the Plan commences participation in the Plan in
accordance with Article 2. The Plan Entry Date shall be
January 1 of the Plan Year following selection by the
Committee. If an employee is first selected for
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participation in the Plan subsequent
to January 1 of a Plan Year, but prior to July 1, such
July 1 shall be an additional Plan Entry Date.
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1.30
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“Plan Year” means the
period beginning on January 1 of each year (or, in certain
limited cases, July 1) and continuing through December 31
of that year.
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1.31
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“Pre-Retirement
Distribution” means the payout set forth in Section 4.1
below.
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1.32
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“Pre-Retirement Survivor
Benefit” means the benefit set forth in Article 5
below.
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1.33
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“Prior Plan” means the
Company’s 1993 Executive Deferral Plan adopted effective
January 1, 1993, as amended effective January 1,
2008.
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1.34
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“Retirement”,
“Retires” or “Retired” means the Employee
leaves employment with the Employer on account of (i) early
retirement as defined in the Con-way Inc. Pension Plan, if the
Participant elects within sixty (60) days from the last day of
regular employment to receive monthly pension benefits under such
Retirement Plan starting on the first day of the month following
the last day of employment, or (ii) normal or deferred
retirement under such Retirement Plan. The distribution of the
stock of CFC to the shareholders of the Company in
December 1996 shall not cause any employee of a subsidiary of
CFC to be retired. After such distribution, Retirement of an
employee of CFC or one of its subsidiaries for purposes of this
Plan shall occur when the employee has an early or normal
retirement under the CFC Pension Plan.
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1.35
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“Retirement Benefit”
means the benefit set forth in Article 5.
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1.36
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“ROE Award” means the
Participant’s award for a three-year award cycle under the
Con-way Inc. Return on Equity Plan.
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1.37
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“Spouse” has the meaning
set forth in the Defense of Marriage Act of 1996 (P. L. 104-199),
as amended. (As of January 1, 2005, this definition is a legal
union between one man and one woman as husband and
wife.)
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1.38
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“Termination Benefit”
means the benefit set forth in Article 7.
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1.39
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“Termination of
Employment” means the ceasing of employment with the Company
and its subsidiaries, voluntarily or involuntarily, for any reason
other than Retirement, Disability or death. The distribution of the
stock of CFC to the shareholders of the Company in December 1996
shall not cause any employee of a subsidiary of CFC to have a
Termination of Employment. After such distribution, Termination of
Employment of an employee of CFC or one of its subsidiaries for
purposes of this Plan shall occur when the employee ceases
employment with CFC and its subsidiaries for any reason other than
Retirement, Disability or death.
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8
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1.40
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“Unforeseeable Financial
Emergency” means an unanticipated emergency that is caused by
an event beyond the control of the Participant that would result in
severe financial hardship to the Participant resulting from
(i) a sudden and unexpected illness or accident of the
Participant or a dependent of the Participant, (ii) a loss of
the Participant’s property due to casualty, or
(iii) such other extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the
Participant, all as determined in the sole discretion of the
Committee.
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1.41
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“Value Management Award”
means the Participant’s Award for an award cycle under the
Con-way Inc. Value Management Plan, as amended from time to
time.
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Selection,
Enrollment, Eligibility
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2.1
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Selection by Committee
. Participation in the
Plan shall be limited to a select group of management and highly
compensated employees of the Company and its subsidiaries. The
Committee shall select for each Plan Year, in its sole discretion,
those employees eligible to participate in the Plan for that Plan
Year.
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2.2
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Enrollment Requirement
. The Committee shall
establish from time to time such enrollment requirements as it
determines in its sole discretion are necessary.
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2.3
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Commencement of
Participation . Provided an employee selected to
participate in the Plan has met all enrollment requirements set
forth by the Committee, that employee shall commence participation
in the Plan on the Plan Entry Date that immediately follows the
employee’s election to participate in the Plan.
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2.4
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Paid Leave of Absence
. If a Participant is
authorized by the Company to take a paid leave of absence, the
Participant shall continue to be considered employed by the
Employer and the Base Annual Salary and Annual Bonus deferred by
the Participant shall continue to be withheld during such paid
leave of absence in accordance with the Plan.
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2.5
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Unpaid Leave of Absence
. If a Participant is
authorized by the Company to take an unpaid leave of absence, the
Participant shall continue to be considered employed by the
Employer and the Participant shall be excused from making deferrals
until the earlier of the date the leave of absence expires or the
Participant returns to a paid employment status. Upon such
expiration or return, deferrals shall resume for the remaining
portion of the Plan Year in which the expiration or return occurs,
based on the deferral election, if any, made for that Plan
Year.
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9
Prior to
distribution, returns in respect of a Participant’s Cash
Account and Phantom Stock Units in respect of a Participant’s
Phantom Stock Account shall be credited as provided in the
Administrative Appendix.
Pre-Retirement
Distribution
Unforeseeable Financial Emergencies
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4.1
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Pre-Retirement
Distributions .
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(a)
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In
the event that a Participant elects to defer an Annual Deferral
Amount, an ROE Award and/or a Value Management Award in a Plan
Year, such Participant may, subject to subsection (b), elect to
receive all, but not less than all, of the amounts so deferred as a
lump sum distribution (A Pre-Retirement Distribution”) on a
specified date prior to such Participant’s Retirement. The
Pre-Retirement Distribution shall be in an amount equal to the
amounts so deferred, plus returns credited in accordance with the
Plan, and shall be paid within sixty (60) days following the
first day of the Plan Year chosen by the Participant on the
Election Form for such distribution. The earliest date that a
Participant may receive a Pre-Retirement Distribution is five (5)
years after the first day of the Plan Year in which such deferral
occurs.
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(b)
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If
a Participant who has elected one or more Pre-Retirement
Distributions has a Retirement or Termination of Employment before
the start of the Plan Year chosen by the Participant for such
Pre-Retirement Distribution, the Participant’s Account
Balance shall be paid at the time and in the form elected by the
Participant in accordance with Sections 5.2 or 7.2
respectively, and not as the elected Pre-Retirement
Distribution.
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4.2
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Withdrawal Payout/Suspensions for
Unforeseeable Financial Emergencies . If the Participant experiences an
Unforeseeable Financial Emergency, the Participant may petition the
Committee to (i) suspend any deferrals required to be made by
a Participant and/or (ii) receive a partial or full payout
from the Plan. The Committee may, in its sole discretion, accept or
deny such petition. Any payout shall not exceed the lesser of the
Participant’s Account Balance, calculated as if such
Participant were receiving a Termination Benefit, or the amount
reasonably needed to satisfy the Unforeseeable Financial Emergency.
The suspension shall continue for such period of time and/or the
reinstatement
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10
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of
deferrals shall occur at a date, as specified by the Committee, in
its sole discretion. If reinstated, the deduction in each pay
period shall not exceed that made immediately prior to the
suspension. If the petition for a suspension and/or payout is
approved, suspension shall take effect upon the date of approval
and any payout shall be made within sixty (60) days of the
date of approval.
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5.1
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Retirement Benefit
. A Participant who
Retires shall receive, as a Retirement Benefit, the
Participant’s Account Balance.
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5.2
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Payment of Retirement
Benefit . A
Participant may elect on the Election Form prior to the beginning
of each Plan Year to receive the Retirement Benefit in a lump sum
or in quarterly payments over a period of 5, 10, 15 or
20 years. The lump sum payment shall be made within sixty
(60) days of the Participant’s Retirement. Any
installment payment shall be made in accordance with the Plan.
Except for employees of CFC and its subsidiaries, who shall receive
payment of amounts deferred for each Plan Year (including returns)
in the form elected on the Election Form for that Plan Year, an
election of the form of Retirement Benefit shall be effective for a
Retirement occurring in the second Plan Year following the Plan
Year for which the Election Form is submitted or in any subsequent
Plan Year until superseded by a new election. No election of the
form of Retirement Benefit shall be effective before the first day
of such second Plan Year, except as follows:
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(a)
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Upon a Retirement in a
Participant’s first Plan Year of participation, the election
made on the Election Form for such Plan Year shall determine the
form of payment. Upon a Retirement in a Participant’s second
Plan Year of participation, the election made on the Election Form
for the preceding Plan Year shall determine the form of
payment.
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(b)
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In
the Election Form for 1998, a Participant may elect to have the
Election Form for 1997 control the form of payment upon a
Retirement in 1998 instead of the Election Form for
1996.
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Notwithstanding the foregoing, if
the balance in a
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