Deferred Bonus Plan (Amended and Restated as of January 1, 2008)

 

(1)

Amount of Deferral.  A participant may elect to defer receipt of any whole percent (100 percent maximum) of his or her annual cash bonus otherwise payable to the participant by the Company during a calendar year.

 

(2)

Time for Electing Deferral.  Deferral elections shall be made before the beginning of the calendar year during which the participant will perform the services to which the annual bonus relates.  For example, if a participant wished to defer to a portion of his or her 2009 annual bonus, the participant’s written deferral election must be made on or before December 31, 2008 (before the first day of the calendar year in which the bonus performance period begins), even though the 2009 annual bonus may be actually paid in 2010.  Any election to defer shall be made in accordance with subsection 3 below.

 

Notwithstanding the foregoing, a newly-eligible participant may make an initial deferral election within 30 days of the time the participant first becomes eligible to participate in this Plan, provided that deferrals with respect to this election may be made only with respect to a prorated portion of the participant’s annual bonus for the performance period

 

currently in effect (i.e., the annual bonus amount multiplied by the ratio of the number of days remaining in the performance period after the election over the total number of days in the performance period).  This initial eligibility rule shall not apply if the participant is, or ever has been, eligible to participate in another deferred compensation plan sponsored by the Company that is an “account balance plan” under the plan aggregation rules of Code Section 409A.

 

(3)

Manner of Electing Deferral.   A participant shall elect a deferral by giving written notice to the Committee in a form prescribed by the Committee.  The notice shall include (1) the bonus period with respect to which the deferral relates; (2) the amount to be deferred; (3) the length of the deferral period; and (4) for deferrals relating to services performed in 2008 or thereafter, the form of payment as either a lump sum payment or annual installment payments over a specified period not to exceed 10 years.  A participant may designate a deferral period of three, five or ten years in which case payment will commence on the Company’s first quarterly dividend payment date following the applicable anniversary date measured from the date the amounts are deferred.

 

(b)

Company Matching Contributions.  The Company shall contribute 10 percent of the amount each participant defers.  The Company’s contribution shall be made as of the same date as the participant’s deferral to which it relates and shall be deferred to the same payment date as the related participant deferral.

 

(a)

Valuation of Accounts.  A Participant’s Account shall be valued as of each day there occurs a transaction affecting the Account.  Each deferral or Company contribution shall be reflected by crediting the Participant Account with the number of shares of Company Common Stock that could be purchased at the Common Stock’s then fair market value with the amounts deferred by the participant, or contributed by the Company on behalf of a participant.  With respect to the hypothetical dividends payable on the Company Common Stock previously credited to a Participant Account, each such Participant Account shall be credited with the number of shares of Company Common Stock that could be purchased with the hypothetical dividends on the same date at the same price that shares are purchased for participants in the dividend reinvestment feature of the Company’s Dividend Reinvestment and Direct Stock purchase Plan.  Distributions from, or forfeiture of, the Participant Account shall be recorded as of the day of such distributions or forfeitures.  The Account shall also be adjusted as of the date of any transaction requiring additions to or distributions from the Account to reflect any gains (or losses) in the fair market value of Company Common Stock held in the Account.  Two subaccounts shall be established within the Account to track separately participant and Company contributions and the earnings and distributions on each.  The Common Stock’s fair market value shall be the composite closing price for a share of the Company’s Common Stock as listed on the New York Stock Exchange on the date before the transaction occurs.

 

(b)

Vesting.  All amounts credited to participant contribution subaccounts shall be fully vested at all times.  Except for the possible claims of the Company’s general creditors, they shall not be subject to forfeiture on account of any action by a participant or by the Company, including termination of employment.  Amounts credited to a participant’s Company contribution subaccount shall become fully vested on the third anniversary of the date first credited to the subaccount if the participant has been in continuous employment with the Company through the third

 

anniversary of the contribution date, or if the participant terminates employment on account of disability, death, retirement on or after age 60, or upon a change in control as hereinafter provided. For this purpose, “disability” shall mean the participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Company.  Amounts payable under this Plan shall be paid only to the participant provided that in the event of his or her death payments shall be made to his or her estate.

 

If a participant’s Company subaccount becomes forfeitable, he or she shall forfeit both Company contributions and the earnings thereon.

 

(a)

Commencement of Benefits.  Payments of vested amounts from an Account shall normally be made in a lump sum or annual installment payments in accordance with the participant’s deferral election and section 3 of the Plan, commencing on the Company’s first quarterly dividend payment date following an elected anniversary date or the participant’s termination of employment.

 

(b)

Specified Employees.  Notwithstanding any other provision of the Plan to the contrary or a Participant’s election of a payment date, a distribution from a Participant Account of a Specified Employee that is triggered by a separation from service may not be made before the date which is six months after the separation from service date.  For purposes of the Plan, the term “Specified Employee” shall have the meaning defined in Section 409A, as determined under rules established by the Committee.

 

(c)

Hardship Withdrawals.  Except for earlier payments expressly authorized by this Plan and Code Section 409A, no benefit may be paid earlier than the date specified in a deferral election.  Notwithstanding the payment terms set forth in a participant’s deferral election, however, the Committee may, in its sole discretion, authorize an in-service withdrawal on account of a participant’s Unforeseeable Financial Emergency.  A distribution based upon Unforeseeable Financial Emergency shall not exceed the lesser of the participant’s account balance, or the amount reasonably needed to satisfy the Unforeseeable Financial Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the payouts, after taking into account the extent to which the Unforeseeable Financial Emergency is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the participant’s assets (to the extent the liquidation of assets would not itself cause severe financial hardship).  A distribution based upon Unforeseeable Financial Emergency shall be permitted only to the extent permitted under Section 409A.

 

For purposes of the Plan, the term “Unforeseeable Financial Emergency” shall mean 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) an illness or accident of the participant, the participant’s spouse 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.

 

(d)

Subsequent Deferral Election.  No subsequent deferral election shall be permitted to extend the payment of benefits beyond the payment date set forth in the relevant deferral election, except for a subsequent deferral election that satisfies all of the following conditions:

 

·

the subsequent election must be made 12 months or more prior to the previously-selected payment date; and

 

·

the new payment commencement date must be at least five years later than the previously-selected payment date; and

 

·

the subsequent election may not be effective until at least 12 months after the date on which it is made.

 

(e)

Code Section 162(m).  If any scheduled payment from this Plan during a taxable year of the Company would, in combination with other compensatory payments to the participant during such year, result in the participant’s compensation exceeding the $1 million cap under Code Section 162(m), the Company shall defer benefit payments to the first subsequent year when the participant’s compensation will not exceed the $1 million cap.  Such payments shall be made in a manner as consistent as possible with the participant’s original deferral election.

 

(f)

Form of Payment.  Payments for any reason other than a change in control shall be made only in stock provided that any fractional shares from a Participant Account shall be paid in cash.

 

(g)

Change in Control.  In the event of a change in control, all account balances shall become fully and immediately vested and shall be paid, in cash or stock as the Committee in its sole discretion may determine, within five days of the change in control.  For this purpose, the term “change in control” means a change that is a change in the ownership, a change in the effective control or a change in the ownership of a substantial portion of the assets of the Company, all as defined in IRS regulations under Code Section 409A, provided that such change also satisfies one of the following:

 

i.

a change of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A or to Item 5.01 of Form 8-K promulgated under the Securities Exchange Act of 1934, as amended;

 

ii.

any “person” (as such term is used in Sections 13(d) and 14(d)(2) of such Act) is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company’s then outstanding securities; or

 

iii.

during any period of twenty-four (24) consecutive months, individuals who at the beginning of such period constitute the Board of Directors of the Company cease for any reason to constitute at least a majority thereof unless the election, or the nomination for election by the Company’s shareholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period.

 

(h)

Authorized Shares.  An aggregate of 100,000 shares of Company Common Stock (subject to substitution or adjustment as provided below) shall be available for stock payments under this Plan.  Such shares may be authorized and unissued shares or may be treasury shares.  In the event of any change in the Common Stock of the Company by reason of any stock dividend, recapitalization, reorganization, merger, consolidation, split-up, combination, or exchange of shares, or rights offering to purchase Common Stock at a price substantially below fair market value, or of any similar change affecting the Common Stock, the number and kind of shares which thereafter are available for stock payments under the Plan shall be appropriately adjusted consistent with such change in such manner as the Committee may deem equitable to prevent substantial dilution or enlargement of the rights granted to, or available for, participants in the Plan.

 

By:

Its:

Executive Vice President