AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 20, 1998
REGISTRATION NO. 333-________
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------------
THE DIAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 51-0374887
(State or other (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
15501 NORTH DIAL BOULEVARD
SCOTTSDALE, ARIZONA
85260-1619
(Address of registrant's
principal executive offices)
THE DIAL CORPORATION AMENDED AND RESTATED
MANAGEMENT DEFERRED COMPENSATION PLAN
THE DIAL CORPORATION AMENDED AND RESTATED
DIRECTORS DEFERRED COMPENSATION PLAN
(Full title of the plan)
JANE E. OWENS
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
THE DIAL CORPORATION
15501 NORTH DIAL BOULEVARD
SCOTTSDALE, ARIZONA 85260-1619
(602) 754-3425
(Name, address, and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
==============================================================================
PROPOSED PROPOSED
TITLE OF SECURITIES AMOUNT TO MAXIMUM MAXIMUM AMOUNT OF
TO BE REGISTERED BE OFFERING AGGREGATE REGISTRATION
REGISTERED PRICE PER OFFERING FEE
(1) SHARE(2) PRICE(2)
- ------------------------------------------------------------------------------
Common Stock, par value 850,000 $26.45 $22,482,500 $6,251
$.01 per share
==============================================================================
(1) Includes an indeterminate number of shares of Common Stock that may be
issuable by reason of stock splits, stock dividends or similar transactions
in accordance with Rule 416 under the Securities Act of 1933. This
Registration Statement also pertains to rights to purchase shares of Junior
Participating Preferred Stock of the Registrant (the "Rights"). One Right is
included with each share of Common Stock. Until the occurrence of certain
prescribed events, the Rights are not exercisable, are evidenced by the
certificates for the Common Stock and will be transferred along with and only
with such Common Stock. Thereafter, separate Rights certificates will be
issued representing one Right for each share of Common Stock held, subject to
adjustment pursuant to antidilution provisions.
(2) The amounts are based upon the average of the high and low sale prices
for the Common Stock as reported on the New York Stock Exchange on November
17, 1998, and are used solely for the purpose of calculating the registration
fee pursuant to Rule 457(c) and (h) under the Securities Act of 1933.
<PAGE>
EXPLANATORY NOTE
This Registration Statement is filed pursuant to Instruction E to
Form S-8 to register additional Common Stock issuable under Registrant's
Amended and Restated Management Deferred Compensation Plan and Amended and
Restated Directors Deferred Compensation Plan.
Pursuant to Instruction E to Form S-8, the Registrant hereby
incorporates by reference into this Registration Statement the contents of
the Registrant's Registration Statement on Form S-8 (File No. 333-56607)
and all post-effective amendments thereto.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 8. EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
4.1 -- Restated Certificate of Incorporation of the Company
filed as Exhibit 3(a) to the Form 10.*
4.2 -- Bylaws of the Company filed as Exhibit 3(b) to the
Form 10-Q for the quarter ended July 4, 1998.*
4.3 -- Form of Rights Agreement between the Company and the
Rights Agent named therein filed as Exhibit 4 to the
Form 10.*
4.4 -- The Dial Corporation Amended and Restated Management
Deferred Compensation Plan (As Amended and Restated
Effective January 1, 1999).
4.5 -- The Dial Corporation Amended and Restated Directors
Deferred Compensation Plan (As Amended and Restated
Effective January 1, 1999).
5 -- Opinion of counsel as to the legality of obligations
and securities offered under the Plans.
23.1 -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of counsel (included on Exhibit 5 hereto).
24 -- Power of Attorney (included on signature page of this
Registration Statement).
- ---------------------------------------------
* Incorporated herein by reference.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Scottsdale, State of Arizona, on
November 20, 1998.
THE DIAL CORPORATION
/s/Malcolm Jozoff
--------------------------
By: Malcolm Jozoff
Its: Chairman of the Board,
President and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes
Malcolm Jozoff and Susan J. Riley and each of them as attorneys-in-fact,
with full power of substitution and resubstitution, to execute in the name
and on behalf of such person, individually and in each capacity stated
below, and to file, any and all amendments to this Registration Statement,
including any and all post-effective amendments, as fully as such person
could do in person, hereby verifying and confirming all that such
attorneys-in-fact, or their substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on November 20, 1998.
SIGNATURE TITLE
- ---------------------------- ---------------------------------
Chairman of the Board, President
and Chief Executive Officer
/s/Malcolm Jozoff (Principal Executive Officer)
- --------------------------
Malcolm Jozoff
Senior Vice President and Chief
/s/Susan J. Riley Financial Officer (Principal
- -------------------------- Financial and Accounting Officer)
Susan J. Riley
/s/Joy A. Amundson Director
- --------------------------
Joy A. Amundson
/s/Herbert M. Baum Director
- --------------------------
Herbert M. Baum
/s/Joe T. Ford Director
- --------------------------
Joe T. Ford
<PAGE>
/s/Thomas L. Gossage Director
- --------------------------
Thomas L. Gossage
/s/Donald E. Guinn Director
- --------------------------
Donald E. Guinn
/s/Michael T. Riordan Director
- --------------------------
Michael T. Riordan
/s/Barbara S. Thomas Director
- --------------------------
Barbara S. Thomas
/s/Salvador M. Villar Director
- --------------------------
Salvador M. Villar
/s/A. Thomas Young Director
- --------------------------
A. Thomas Young
Constituting a majority of the Board of Directors.
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description
- -------------- -----------
4.1 Restated Certificate of Incorporation of the Company
filed as Exhibit 3(a) to the Form 10.*
4.2 Bylaws of the Company filed as Exhibit 3(b) to the
Form 10-Q for the quarter ended July 4, 1998.*
4.3 Form of Rights Agreement between the Company and the
Rights Agent named therein filed as Exhibit 4 to the
Form 10.*
4.4 The Dial Corporation Amended and Restated Management
Deferred Compensation Plan (As Amended and Restated
Effective January 1, 1999).
4.5 The Dial Corporation Amended and Restated Directors
Deferred Compensation Plan (As Amended and Restated
Effective January 1, 1999).
5 Opinion of counsel as to the legality of obligations
and securities offered under the Plans.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of counsel (included on Exhibit 5 hereto).
24 Power of Attorney (included on signature page of this
Registration Statement).
- ---------------------------------------------
* Incorporated herein by reference.
EXHIBIT 4.4
THE DIAL CORPORATION AMENDED AND RESTATED
MANAGEMENT DEFERRED COMPENSATION PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1999)
TABLE OF CONTENTS
PAGE
ARTICLE 1 Purpose.......................................................1
ARTICLE 2 Definitions...................................................1
ARTICLE 3 Deferral Elections of Base Salary and Incentive Awards........6
3.1 DEFERRAL ELECTION...............................................6
3.2 TIMING OF DEFERRAL ELECTIONS....................................7
3.3 IRREVOCABILITY..................................................7
3.4 CESSATION OF DEFERRAL ELECTIONS.................................7
3.5 RETURN TO WORK FOLLOWING DISABILITY OR LEAVE OF ABSENCE.........7
3.6 INITIAL PLAN YEAR...............................................7
ARTICLE 4 Treatment of Deferral Amounts.................................7
4.1 MEMORANDUM ACCOUNTS.............................................7
4.2 RULES APPLICABLE TO POST-1998 DEFERRAL AMOUNTS ONLY.............8
4.3 RULES APPLICABLE TO 1998 DEFERRAL AMOUNTS ONLY..................8
4.4 RULES APPLICABLE TO PRIOR ACCOUNTS ONLY.........................9
4.5 STOCK UNIT DIVIDEND EQUIVALENT RIGHTS...........................9
4.6 REPORTS........................................................10
ARTICLE 5 Management Stock Unit Purchase Program.......................11
5.1 PURPOSE........................................................10
5.2 RULES APPLICABLE TO POST-1998 DEFERRAL AMOUNTS.................11
5.3 RULES APPLICABLE TO 1998 DEFERRAL AMOUNTS......................11
5.4 RULES GENERALLY APPLICABLE TO STOCK UNIT ACCOUNTS..............11
ARTICLE 6 Payment of Account Balances..................................12
6.1 FORMS OF PAYMENT OF POST-1998 DEFERRAL AMOUNTS.................12
6.2 FORMS OF PAYMENT OF 1998 DEFERRAL AMOUNTS......................12
6.3 PAYMENT METHOD ELECTIONS.......................................13
6.4 EXCEPTION TO TERMINATION PAYMENT METHOD........................13
6.5 EXCEPTION FOR DISABILITY OF PARTICIPANT........................14
6.6 EXCEPTION FOR DEATH OF PARTICIPANT.............................14
6.7 EXCEPTION FOR UNFORESEEABLE FINANCIAL EMERGENCY................14
6.8 EXCEPTION FOR SECTION 162(M) OF THE CODE.......................15
6.9 EXCEPTION FOR SECTION 16 OF THE EXCHANGE ACT...................15
6.10 SHORT-TERM PAYOUT..............................................15
6.11 WITHDRAWAL ELECTION............................................15
6.12 EFFECT OF SECTION 280G OF THE CODE.............................16
6.13 TIMING OF PAYMENTS.............................................16
6.14 VALUATION OF ACCOUNT BALANCES..................................16
6.15 PRORATION OF PAYMENTS..........................................17
ARTICLE 7 Administration...............................................17
7.1 PLAN ADMINISTRATOR.............................................17
7.2 DELEGATION TO MANAGEMENT COMMITTEE.............................17
7.3 GENERAL POWERS AND RESPONSIBILITIES OF PLAN ADMINISTRATOR......17
7.4 ACTION OF PLAN ADMINISTRATOR...................................17
7.5 LIABILITY......................................................18
7.6 INDEMNIFICATION OF PLAN ADMINISTRATOR..........................18
7.7 ADMINISTRATION UPON CHANGE IN CONTROL..........................18
7.8 EMPLOYER INFORMATION...........................................18
ARTICLE 8 Beneficiary Designation......................................19
8.1 BENEFICIARY....................................................19
8.2 CHANGE OF BENEFICIARY; SPOUSAL CONSENT.........................19
8.3 ACKNOWLEDGMENT.................................................19
8.4 NO BENEFICIARY DESIGNATION.....................................19
8.5 DOUBT AS TO BENEFICIARY........................................19
ARTICLE 9 Amendment and Termination of the Plan........................19
9.1 TERMINATION OF THE PLAN........................................19
9.2 AMENDMENT OF THE PLAN..........................................20
9.3 EFFECT OF PAYMENT..............................................21
ARTICLE 10 Claims Procedures...........................................21
10.1 PRESENTATION OF CLAIM.........................................21
10.2 NOTIFICATION OF DECISION......................................21
10.3 REVIEW OF A DENIED CLAIM......................................21
10.4 DECISION ON REVIEW............................................21
10.5 LEGAL ACTION..................................................21
ARTICLE 11 Funding.....................................................22
11.1 ESTABLISHMENT OF THE TRUST....................................22
11.2 INTERRELATIONSHIP OF THE PLAN AND THE TRUST...................22
11.3 DISTRIBUTIONS FROM THE TRUST..................................22
ARTICLE 12 Miscellaneous...............................................22
12.1 STATUS OF PLAN................................................22
12.2 UNSECURED GENERAL CREDITOR....................................22
12.3 ASSETS........................................................22
12.4 COMPANY LIABILITY.............................................23
12.5 NONASSIGNABILITY..............................................23
12.6 NOT A CONTRACT OF EMPLOYMENT..................................23
12.7 FURNISHING INFORMATION........................................23
12.8 TERMS.........................................................23
12.9 CAPTIONS......................................................23
12.10 GOVERNING LAW.................................................23
12.11 NOTICE........................................................24
12.12 SUCCESSORS....................................................24
12.13 SPOUSE'S INTEREST.............................................24
12.14 REFORMATION AND SEVERABILITY..................................24
12.15 INCOMPETENCE..................................................24
12.16 COURT ORDER...................................................25
12.17 DISTRIBUTION IN THE EVENT OF TAXATION.........................25
12.18 TAXES.........................................................25
12.19 INSURANCE.....................................................25
12.20 MAXIMUM NUMBER OF SHARES OF COMMON STOCK AUTHORIZED...........26
12.21 LITIGATION TO ENFORCE RIGHTS AFTER CHANGE IN CONTROL..........26
12.22 EFFECT OF THE PLAN............................................26
<PAGE>
THE DIAL CORPORATION AMENDED AND RESTATED
MANAGEMENT DEFERRED COMPENSATION PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1999)
--------------------
ARTICLE 1
PURPOSE
The purpose of this Amended and Restated Management Deferred
Compensation Plan is to provide a select group of key management employees
of The Dial Corporation and designated subsidiaries and affiliates the
opportunity to defer receipt of Base Salary and Incentive Awards to which
they are entitled while the Plan is in effect. The Plan is intended to be
an unfunded nonqualified deferred compensation plan maintained for "a
select group of management or highly compensated employees," as that phrase
is used in Title I of ERISA, and shall be construed and administered
accordingly.
ARTICLE 2
DEFINITIONS
For purposes of the Plan, the following terms shall have the
following meanings:
"1998 DEFERRAL AMOUNT" shall mean the portion of a Participant's
Cash Account and Stock Unit Account which are allocable to his or her
Deferral Amount deferred in the 1998 Plan Year.
"ACCOUNT BALANCES" shall mean the sum of the balances of a
Participant's Cash Account, Stock Unit Account and Prior Account.
"ALLOCATION DATE" shall mean the date on which all or a portion
of a Participant's Deferral Amount is credited to his or her Cash Account
or Stock Unit Account, which shall be the date on which such Deferral
Amount (or portion thereof) would have been paid to the Participant if the
Participant had not made a Deferral Election; provided, however, that, if
such date is not a business day, the Allocation Date shall be the
immediately preceding business day.
"ANNUAL INSTALLMENT" shall mean any installment payment required
to be paid to a Participant, the amount of each of which shall be
determined by multiplying each Account Balance as of the Valuation Date
immediately preceding the date of the Annual Installment by a fraction, the
numerator of which shall be one (1) and the denominator of which shall be
the number of Annual Installments remaining to be paid to the Participant.
"BASE SALARY" shall mean a Participant's regular base salary for
a Plan Year (excluding Incentive Awards or other incentive compensation)
payable by an Employer to a Participant, before reduction pursuant to the
Plan or any other plan or arrangement of the Employer.
"BASIC STOCK UNITS" shall have the meaning set forth in Section
5.4(b) of Article 5.
"BENEFICIARY" shall mean the person or persons designated by a
Participant in accordance with Article 8 to receive payments under the Plan
following the death of the Participant.
"BOARD" shall mean the Board of Directors of the Company.
"CASH ACCOUNT" shall mean a memorandum account established on the
books of the Company on behalf of a Participant, into which shall be
credited an amount of cash pursuant to Article 4, in accordance with the
Participant's Deferral Elections.
"CAUSE" shall mean (i) the conviction of a Participant for
committing a felony under federal law or the law of the state in which such
action occurred, (ii) material dishonesty in the course of fulfilling a
Participant's employment duties, (iii) willful and deliberate failure on
the part of a Participant to perform his employment duties in any material
respect or (iv) such other events as shall be determined by the Plan
Administrator.
"CHANGE IN CAPITALIZATION" shall have the meaning set forth in
Section 4.5(iv) of Article 4.
"CHANGE IN CONTROL" shall have the meaning set forth in Appendix A.
"CHANGE IN CONTROL PAYMENT METHOD" shall mean the manner in which
a Participant's Account Balances are paid to a Participant following a
Change in Control in accordance with the Participant's election, such
manner to be either (i) a lump sum upon a Change in Control or (ii) a lump
sum upon termination for any reason following a Change in Control;
provided, that, if a Participant does not elect a Change in Control Payment
Method, the Participant's other Payment Methods shall remain in effect
following a Change in Control.
"CLAIMANT" shall have the meaning set forth in Section 10.1 of
Article 10.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMITTEE" shall mean the Executive Compensation Committee of
the Company; provided, that if the Committee shall cease to be composed of
at least two "Non-Employee Directors" as defined in Rule 16b-3(b) of the
Exchange Act, "Committee" shall mean two individuals, each of whom is a
"Non-Employee Director."
"COMMON STOCK" shall mean the common stock, par value $.01 per
share, of the Company.
"COMPANY" shall mean The Dial Corporation, a Delaware
corporation, and any successor thereto.
"CONVERSION NOTICE" shall have the meaning set forth in Section
4.3(e) of Article 4.
"DEFERRAL AMOUNT" shall mean a specified percentage or specified
dollar amount of Base Salary or Incentive Awards elected by a Participant
to be deferred in a Plan Year.
"DEFERRAL ELECTION" shall mean a Participant's timely election of
a Deferral Amount pursuant to Article 3.
"DEFERRAL ELECTION FORM" shall mean the form that a Participant
must submit to the Plan Administrator documenting his or her Deferral
Election.
"DEFERRED COMPENSATION ACCOUNTS" shall mean a Participant's Cash
Account, Stock Unit Account, and Prior Account, as applicable.
"DISABILITY" shall mean a condition as a result of which a
Participant qualifies for permanent disability benefits under the Company's
long-term disability plan (or would qualify for such benefits, if the
Participant is not a participant in such plan) as determined by the Plan
Administrator.
The "DISCOUNT" applicable to the conversion of cash to Stock
Units on an Allocation Date shall be a percentage of the Fair Market Value
of a share of Common Stock on such Allocation Date, as determined in the
sole discretion of the Committee.
"ELIGIBLE EMPLOYEE" shall mean an employee of an Employer in a
management position who is designated from time to time by the Plan
Administrator to be eligible for participation in the Plan; provided,
however, that no such employee shall be eligible to participate in the Plan
in a Plan Year if the Plan Administrator shall determine that the employee
could acquire under the Plan more than 1,000,000 shares of Common Stock.
"EMPLOYER" shall mean the Company and any subsidiary or affiliate
of the Company which is an employer of one or more employees who are
Participants in the Plan.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"FAIR MARKET VALUE" on any date shall mean the mean between the
highest and lowest reported sales prices of the Common Stock on the New
York Stock Exchange Composite Tape or, if not listed on such exchange, on
any other national exchange on which the Common Stock is listed or on the
NASDAQ National Market System or on NASDAQ or, if there is no regular
public trading market for the Common Stock, as determined by the Committee
in good faith.
"INCENTIVE AWARD" shall mean an award to a Participant pursuant
to the Company's Annual Incentive Plan or Sales Incentive Plan.
"INVESTMENT CHOICES" shall mean the reference investment vehicles
made available by the Plan Administrator from time to time in which
Participants' Deferral Amounts will be deemed to be invested pursuant to
Section 4.3(c) of Article 4.
"LEAVE OF ABSENCE" shall mean a paid or unpaid break in the
service of a Participant as an employee of his or her Employer with the
approval of the Plan Administrator.
"MANAGEMENT STOCK UNIT PURCHASE PROGRAM" shall mean the program
by which Deferral Amounts are credited as Stock Units to a Stock Unit
Account maintained for the benefit of a Participant, as set forth in
Article 5.
"MATCHING STOCK UNITS" shall have the meaning set forth in
Section 5.4(b) of Article 5.
"PARTICIPANT" shall mean any Eligible Employee who makes a
Deferral Election pursuant to Section 3.1 of Article 3 and for whom one or
more Deferred Compensation Accounts are maintained under the Plan.
"PAYMENT METHOD" shall mean any of a Participant's Change in
Control Payment Method, Retirement Payment Method, Survivor Payment Method
and Termination Payment Method.
"PLAN" shall mean The Dial Corporation Amended and Restated
Management Deferred Compensation Plan (As Amended and Restated Effective
January 1, 1999), as such Plan may be amended from time to time.
"PLAN ADMINISTRATOR" shall mean the Committee or such committee
to which the Committee delegates its powers and duties under the Plan, as
set forth in Section 7.2 of Article 7, or, upon and following a Change in
Control, one or more persons selected pursuant to Section 7.7 of Article 7.
"PLAN YEAR" shall mean the calendar year.
"POST-1998 DEFERRAL AMOUNTS" shall mean the portion of a
Participant's Stock Unit Account which is allocable to his or her Deferral
Amounts deferred in the 1999 Plan Year and thereafter.
"PRIOR ACCOUNT" shall mean the amounts in a Participant's
deferred compensation accounts (under the terms of The Dial Corporation
Deferred Compensation Plan) as of December 31, 1997.
"RETIREMENT" shall mean termination of employment of a
Participant upon or following the date on which (i) the Participant's age
is at least fifty-five (55) and (ii) the Participant has completed at least
ten (10) Years of Service; provided, however, that "Retirement" shall not
include termination upon or following such date for Cause or as a result of
death or Disability.
"RETIREMENT PAYMENT METHOD" shall mean the manner in which a
Participant's Account Balances are paid to the Participant upon Retirement
in accordance with the Participant's election, such manner to be either (i)
a lump sum payment or (ii) five (5), ten (10) or fifteen (15) Annual
Installments.
"SHORT-TERM PAYOUT" shall have the meaning set forth in Section
6.10 of Article 6.
"STOCK UNIT ACCOUNT" shall mean a memorandum account established
on the books of the Company on behalf of a Participant, into which shall be
credited a number of Stock Units pursuant to Sections 4.2(a) and 4.3(a) of
Article 4 and 5.4(a) of Article 5, in accordance with the Participant's
Deferral Elections, or pursuant to Section 4.3(e) of Article 4, in
accordance with the Participant's Conversion Notices.
"STOCK UNITS" shall mean units credited to a Participant's Stock
Unit Account as Matching Stock Units or Basic Stock Units, with one Stock
Unit having a value on a date equal to the Fair Market Value of one share
of Common Stock on such date.
"SURVIVOR PAYMENT METHOD" shall mean the manner in which a
Participant's Account Balances are paid to the Beneficiary of the
Participant upon the Participant's death prior to Retirement in accordance
with the Participant's election, such manner to be either (i) a lump sum or
(ii) five (5), ten (10) or fifteen (15) Annual Installments.
"TERMINATION" shall mean termination of employment of a
Participant, other than (i) for Cause or (ii) upon his or her Retirement or
death.
"TERMINATION PAYMENT METHOD" shall mean the manner in which a
Participant's Account Balances are paid to the Participant upon Termination
in accordance with the Participant's election, such manner to be either (i)
a lump sum payment or (ii) two (2) or three (3) Annual Installments.
"TRUST" shall mean the trust established pursuant to Article 11.
"UNFORESEEABLE FINANCIAL EMERGENCY" shall mean an unanticipated
emergency which is (i) a sudden and unexpected illness or accident of the
Participant or a dependent of the Participant (with "dependent" defined for
purposes of the Plan as in Section 152(a) of the Code), (ii) a loss of the
Participant's property due to casualty or (iii) such other extraordinary
circumstances deemed to be an Unforeseeable Financial Emergency, in each
case caused by an event beyond the control of the Participant and imposing
severe financial hardship to the Participant.
"VALUATION DATE" shall mean the last day of each calendar month;
provided, however, that, if such date is not a business day, the Valuation
Date shall be the immediately preceding business day.
"YEAR OF SERVICE" shall mean each complete 365-day period during
which an employee is an employee of any Employer, such period to commence
on the employee's initial date of hire and each anniversary of his or her
date of hire; provided, that the calculation of the Years of Service of an
employee with breaks in service as a result of a Disability or a Leave of
Absence shall be as determined by the Plan Administrator.
ARTICLE 3
DEFERRAL ELECTIONS OF BASE SALARY AND INCENTIVE AWARDS
3.1 DEFERRAL ELECTION. Each Eligible Employee may elect to have
the payment of a specified percentage or specified dollar amount of Base
Salary or one or more Incentive Awards deferred in each Plan Year pursuant
to the Plan; provided, however, that the Plan Administrator shall establish
minimum and maximum Deferral Amounts in respect of each Plan Year and may
in its discretion establish other limits on Deferral Amounts as it deems
appropriate. Each Deferral Election shall be timely made on a Deferral
Election Form to be provided by the Plan Administrator and shall specify
the Deferral Amount. Upon the acknowledgment of a Deferral Election Form by
the Plan Administrator, such Eligible Employee shall become a Participant
in the Plan for such Plan Year.
3.2 TIMING OF DEFERRAL ELECTIONS. Deferral Elections in respect
of Base Salary otherwise payable to Participants in a Plan Year shall be
timely if made on or before December 15 of the preceding year. Deferral
Elections in respect of Incentive Awards otherwise payable to Participants
in a Plan Year shall be timely: (i) for awards pursuant to the Company's
Annual Incentive Plan, if made on or before September 30 of the preceding
year; and (ii) for awards pursuant to the Company's Sales Incentive Plan,
if made at least six (6) months prior to the Allocation Date of such
awards.
3.3 IRREVOCABILITY. Except as provided in Section 3.4 of this
Article 3, a Deferral Election, once made, shall be irrevocable.
3.4 CESSATION OF DEFERRAL ELECTIONS. The Deferral Election of a
Participant shall be of no further force and effect (i) upon the
Participant's death, (ii) in the discretion of the Plan Administrator, if a
Participant is suffering from a Disability, (iii) in the discretion of the
Plan Administrator, during a Participant's Leave of Absence; provided,
however, that the Plan Administrator may permit the Deferral Election of a
Participant who is on a paid Leave of Absence to remain in effect during
the Leave of Absence, or (iv) upon withdrawal of a Participant from the
Plan pursuant to Section 6.11 of Article 6.
3.5 RETURN TO WORK FOLLOWING DISABILITY OR LEAVE OF ABSENCE. If a
Participant returns to employment upon cessation of Disability, or
following a Leave of Absence, in either case during which the Participant's
Deferral Election was of no force and effect pursuant to Section 3.4 of
this Article 3, (i) the Plan Administrator may give effect to the
Participant's unexpired Deferral Election and (ii) the Participant may,
with the consent of the Plan Administrator, make Deferral Elections in
respect of future Plan Years.
3.6 INITIAL PLAN YEAR. The initial Plan Year of the Plan shall
commence on January 1, 1998.
ARTICLE 4
TREATMENT OF DEFERRAL AMOUNTS
4.1 MEMORANDUM ACCOUNTS. The Company shall establish on its books
for each Participant in the Plan, as necessary, a Cash Account, a Stock
Unit Account and a Prior Account.
4.2 RULES APPLICABLE TO POST-1998 DEFERRAL AMOUNTS ONLY
(a) CREDITING OF MEMORANDUM ACCOUNTS. On each Allocation Date
during the 1999 Plan Year and thereafter, an amount of cash reflecting the
portion of a Participant's Deferral Amount which would otherwise have been
paid to the Participant on such Allocation Date shall be converted to Stock
Units and credited to the Participant's Stock Unit Account, in accordance
with the terms and conditions of Article 5.
(b) VESTING. A Participant shall be vested in the Account Balance
of his or her Stock Unit Account as provided in Section 5.4(b) of Article
5.
4.3 RULES APPLICABLE TO 1998 DEFERRAL AMOUNTS ONLY
(a) CREDITING OF MEMORANDUM ACCOUNTS. On each Allocation Date
during the 1998 Plan Year, an amount of cash reflecting the portion of a
Participant's Deferral Amount which would otherwise have been paid to the
Participant on such Allocation Date shall be (i) credited to the
Participant's Cash Account, to the extent that the Participant has elected
to invest in one or more Investment Choices and (ii) converted to Stock
Units and credited to the Participant's Stock Unit Account, in accordance
with the terms and conditions of Article 5, to the extent that the
Participant has elected to participate in the Management Stock Unit
Purchase Program.
(b) VESTING. A Participant shall be fully (100%) vested in the
Account Balance of his or her Cash Account at all times. A Participant
shall be vested in the Account Balance of his or her Stock Unit Account as
provided in Section 5.4(b) of Article 5.
(c) INVESTMENT OF CASH ACCOUNTS. A Participant's Cash Account
shall be deemed invested among the Investment Choices selected by the
Participant on the Participant's Deferral Election Form (or such other form
as may be prescribed by the Plan Administrator). Each Participant's Cash
Account shall be adjusted as of each Valuation Date to reflect the
performance of the Investment Choices, and, to the greatest extent
practicable, the value of each Participant's Cash Account shall be
determined as if Deferral Amounts were actually invested among the
Investment Choices as directed by such Participant; provided, however, that
the Company shall have no obligation actually to invest any Deferral
Amounts or other assets in any Investment Choices.
(d) ALLOCATION AMONG INVESTMENT CHOICES. A Participant may elect
to change the allocation of his or her Cash Account among the Investment
Choices not more frequently than quarterly by completing such form as may
be prescribed by the Plan Administrator and submitting it to the Plan
Administrator. Any such change in allocation will become effective on the
first day of the next following calendar quarter.
(e) CONVERSION BETWEEN STOCK UNIT ACCOUNTS AND CASH ACCOUNTS. A
Participant may, by notice delivered to the Plan Administrator (a
"Conversion Notice"), convert (i) any portion of the Stock Units credited
to his or her Stock Unit Account which is allocable to his or her 1998
Deferral Amount (either before or after Annual Installments from such
account may have commenced) to his or her Cash Account by multiplying the
Stock Units to be converted by the Fair Market Value of a share of Common
Stock on the earlier of the Valuation Date coincident with or the Valuation
Date next following the day on which the Conversion Notice is received, or
(ii) all or any portion of his or her Cash Account (either before or after
Annual Installments from such account may have commenced) into a number of
Stock Units equal to the portion of the Cash Account to be converted
divided by the Fair Market Value of a share of Common Stock on the last
trading day of the month in which such Conversion Notice is given;
provided, however, that no Conversion Notice shall be of any force and
effect if it (A) is given within six months following the date of an
election by such Participant, with respect to any plan of the Company, that
effected a "Discretionary Transaction" (as defined in Rule 16b-3(f) under
the Exchange Act) that was an acquisition (if the Conversion Notice is
pursuant to clause (i)) or a disposition (if the Conversion Notice is
pursuant to clause (ii)), (B) is given after an individual ceases to be an
employee of an Employer and the Committee does not consent to such
Conversion Notice, (C) applies to (i) any Basic Stock Units which (by
reason of the calculation set forth in Section 5.4(a) of Article 5) give
rise to Matching Stock Units, if such Matching Stock Units are unvested as
of the date of the Conversion Notice or (ii) any unvested Matching Stock
Units, or (D) applies to a Prior Account. Any such Conversion Notice will
become effective on the first day of the next following calendar quarter.
4.4 RULES APPLICABLE TO PRIOR ACCOUNTS ONLY
(a) VESTING. A Participant shall be fully (100%) vested in his or
her Prior Account at all times.
(b) TREATMENT OF PRIOR ACCOUNTS. Prior Accounts shall be
accounted for separately under the Plan. Prior Accounts may be allocated
between the investment alternatives available under the Plan as of December
31, 1997 (unless the Plan Administrator shall make available another
investment alternative) but may not be allocated among the Investment
Choices (unless such other investment alternative is also an Investment
Choice) or transferred to a Cash Account or Stock Unit Account. A
Participant's Prior Account shall be paid to the Participant in accordance
with Article 6 of the Plan.
4.5 STOCK UNIT DIVIDEND EQUIVALENT RIGHTS. In the event of a
dividend paid with respect to the Common Stock, whether in cash, Common
Stock or other stock or property of the Company, credits (dividend
equivalents) will be made to each Participant's Stock Unit Account as
follows:
(i) in the case of a cash dividend, or a dividend of stock
of the Company (other than Common Stock) or other property, additional
credits will be made to the Stock Unit Account consisting of a number
of Stock Units equal to the number determined by dividing (A) the cash
amount of such dividend per share (or the fair market value, on the
date of payment, of dividends paid in such stock or other property),
multiplied by the aggregate number of Stock Units credited to such
Stock Unit Account on the record date for the payment of such dividend
by (B) the Fair Market Value of a share of Common Stock on the day
prior to the date such dividend is payable to holders;
(ii) in the case of a dividend consisting of Common Stock,
the Stock Unit Account will be credited with a number of Stock Units
equal to the number of Stock Units in such account immediately prior
to such dividend multiplied by the number of shares of Common Stock
paid per share of Common Stock in such dividend;
(iii) in the case of a dividend consisting of shares of
stock of any of the Company's subsidiaries, a new stock unit
subaccount will be established and credited with a number of shares of
stock of such subsidiary equal to the number of Stock Units in the
Participant's Stock Unit Account immediately prior to such dividend
multiplied by the number of shares of subsidiary stock issued per
share of Common Stock in such dividend (with dividends thereafter
accruing on such new subaccount solely in the form of cash in an
amount equal to the value of dividends paid by the issuer of the stock
to which the stock units relate); and
(iv) in the case of a Change in Capitalization not described
in subsections (i), (ii) or (iii) of this Section 4.5, the Committee
in good faith shall take such action as it deems necessary to preserve
the economic value of the Stock Unit Account immediately prior to the
Change in Capitalization. For purposes of this Section 4.5(iv),
"Change in Capitalization" shall mean any increase or reduction in the
number of shares of Common Stock, or any change (including, but not
limited to, a change in value) in such shares or exchange of such
shares for a different number or kind of shares or other securities of
the Company or another corporation, by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, spin-off,
split-up, issuance of warrants or rights or debentures, stock
dividend, stock split or reverse stock split, cash dividend, property
dividend, combination or exchange of shares, repurchase of shares,
change in corporate structure or otherwise.
After payment in respect of a Participant's Stock Unit Account commences,
dividend equivalents will accrue on the unpaid balance of such Stock Unit
Account in the same manner until all of the amounts credited to such Stock
Unit Account have been paid.
4.6 REPORTS. Until a Participant's Account Balances shall have
been paid in full, the Company will furnish to the Participant a report at
least quarterly which shall set forth transactions in, and the status of,
the Participant's Deferred Compensation Accounts.
ARTICLE 5
MANAGEMENT STOCK UNIT PURCHASE PROGRAM
5.1 PURPOSE. The purpose of the Management Stock Unit Purchase
Program is to cause Participants in the Plan to defer compensation into
Stock Units, thereby aligning the interests of senior management of the
Company with the interests of the Company's stockholders.
5.2 RULES APPLICABLE TO POST-1998 DEFERRAL AMOUNTS
(a) STOCK UNIT DEFERRALS. All Deferral Amounts deferred by a
Participant in the 1999 Plan Year and thereafter shall be credited as Stock
Units to his or her Stock Unit Account.
(b) STOCK UNIT ACCOUNTS. A Stock Unit Account shall be maintained
for each Participant. On each Allocation Date, an amount of cash reflecting
the portion of a Participant's Deferral Amount which would otherwise have
been paid to the Participant on such Allocation Date shall be converted to
Stock Units pursuant to Section 5.4(a) of this Article 5 and shall be
credited to the Participant's Stock Unit Account.
5.3 RULES APPLICABLE TO 1998 DEFERRAL AMOUNTS
(a) STOCK UNIT DEFERRAL ELECTIONS. In making his or her Deferral
Election for the 1998 Plan Year, a Participant may elect that his or her
Deferral Amount be deferred as Stock Units. A Participant shall make such a
Deferral Election on the Deferral Election Form or such other form as the
Plan Administrator may prescribe.
(b) STOCK UNIT ACCOUNTS. A Stock Unit Account shall be maintained
as necessary for each Participant. On each Allocation Date, an amount of
cash reflecting the portion of a Participant's Deferral Amount which would
otherwise have been paid to the Participant on such Allocation Date shall
be converted to Stock Units pursuant to Section 5.4(a) of this Article 5
and shall be credited to the Participant's Stock Unit Account. The amount
so credited shall reflect the portion of the Participant's Deferral Amount
not credited to the Participant's Cash Account pursuant to Section 4.3(a)
of Article 4.
5.4 RULES GENERALLY APPLICABLE TO STOCK UNIT ACCOUNTS
(a) CONVERSION TO STOCK UNITS. Subject to Section 5.4(e) of this
Article 5, credits to a Participant's Stock Unit Account on an Allocation
Date shall be converted into a number of Stock Units equal to the amount of
the credit to the Stock Unit Account on such Allocation Date divided by the
Discount. Upon and following such conversion, such Stock Units shall be
allocated to the Stock Unit Account in lieu of such credit.
(b) VESTING IN STOCK UNITS. Stock Units which are equal to the
credit to the Stock Unit Account on an Allocation Date divided by the Fair
Market Value of a share of Common Stock on such Allocation Date shall be
deemed "Basic Stock Units." The remaining Stock Units following the
conversion of the credit into Stock Units on such Allocation Date shall be
deemed "Matching Stock Units." Each Participant shall at all times be fully
(100%) vested in the Basic Stock Units allocated to his or her Stock Unit
Account. Subject to Section 5.4(c) of this Article 5, each Participant
shall vest in the Matching Stock Units allocated to his or her Stock Unit
Account on the last day of the second Plan Year following the Plan Year in
which such Stock Units were allocated.
(c) FORFEITURE AND ACCELERATED VESTING OF MATCHING STOCK UNITS.
If, prior to a Change in Control, a Participant ceases to be an employee of
an Employer for any reason other than death or Disability, all unvested
Matching Stock Units credited to the Participant's Stock Unit Account shall
be immediately forfeited. Upon (i) the death of a Participant, (ii)
termination of employment by reason of Disability or (iii) a Change in
Control, all unvested Matching Stock Units credited to the Participant's
Stock Unit Account shall immediately vest. If a Participant shall remain a
Participant following a Change in Control or become a Participant following
cessation of a Disability, Stock Units thereafter allocated to the
Participant's Stock Unit Account shall be subject to the terms and
conditions of the Plan as if no such Change in Control or Disability (as
the case may be) had occurred.
(d) DIVIDEND EQUIVALENT RIGHTS. Dividend equivalents credited
pursuant to Section 4.5 of Article 4 shall be subject to the vesting and
forfeiture provisions of Sections 5.4(b) and 5.4(c) of this Article 5 in
accordance with the Stock Units to which such dividend equivalents relate.
(e) CONTINUATION OF DISCOUNTED STOCK UNIT PURCHASE. Upon oral or
written notice to Participants, the Plan Administrator may prospectively
alter the Discount (including but not limited to ceasing to make the
Discount available).
ARTICLE 6
PAYMENT OF ACCOUNT BALANCES
6.1 FORMS OF PAYMENT OF POST-1998 DEFERRAL AMOUNTS. Any payment
which is allocable to a Participant's Post-1998 Deferral Amounts shall be
paid in Common Stock.
6.2 FORMS OF PAYMENT OF 1998 DEFERRAL AMOUNTS
(a) PAYMENT TO BE MADE IN CASH. Any payment which is allocable to
a Participant's 1998 Deferral Amount and which is required to be paid from
a Participant's Cash Account, and any payment which is required to be paid
from the cash portion of a Participant's Prior Account, shall be in cash.
(b) PAYMENT TO BE MADE IN COMMON STOCK. Any payment which is
allocable to a Participant's 1998 Deferral Amount and which is required to
be paid from a Participant's Stock Unit Account, and any payment which is
required to be paid from the stock unit portion of a Participant's Prior
Account, shall be in cash or, at the election of the Participant or the
Plan Administrator, in Common Stock. A Participant's election pursuant to
this Section 6.2(b) shall be honored by the Plan Administrator in its
discretion.
6.3 PAYMENT METHOD ELECTIONS
(a) PAYMENT OF ACCOUNT BALANCES IN ACCORDANCE WITH PAYMENT
METHODS. Except as provided in the exceptions set forth in Sections 6.4
through 6.9 of this Article 6, a Participant's Account Balances shall be
paid in accordance with the Payment Methods selected by him or her.
(b) INITIAL PAYMENT METHOD ELECTIONS. Each Eligible Employee
shall select Payment Methods upon completion of his or her initial Deferral
Election Form. If a Participant fails to select one or more Payment
Methods, he or she will be deemed to have selected a lump sum in respect of
such Payment Methods; provided, however, that, if a Participant has not
selected a Change in Control Payment Method, the Participant's Retirement
Payment Method, Survivor Payment Method and Termination Payment Method will
remain in effect following a Change in Control.
(c) CHANGE IN PAYMENT METHOD. A Participant may change one or
more of his or her Payment Methods by completing such form as may be
prescribed by the Plan Administrator; provided, however, that such change
shall be effective only if made by the Participant and acknowledged by the
Plan Administrator: (i) if the change relates to the Change in Control
Payment Method, at least one (1) year prior to the date of a Change in
Control, (ii) if the change relates to the Retirement Payment Method or
Termination Payment Method, at least two (2) years prior to the date of
Termination or Retirement (whichever is applicable) and (iii) if the change
relates to the Survivor Payment Method, immediately.
(d) PRIOR ACCOUNTS. Prior Accounts shall be paid to a Participant
in accordance with the Payment Methods selected by the Participant pursuant
to Section 6.3(b) of this Article 6 (or, if the Participant has failed to
select one or more Payment Methods, in a lump sum).
6.4 EXCEPTION TO TERMINATION PAYMENT METHOD. Notwithstanding a
Participant's selection of a Termination Payment Method, a Participant's
Account Balances shall be paid in a lump sum if (i) the Participant's
Account Balances on the Valuation Date next following his or her
Termination of employment equal less than twenty-five thousand dollars
($25,000) or (ii) the Participant ceases to be an employee of an Employer
by reason of termination for Cause. If a Participant's Account Balances on
the Valuation Date next following his or her Termination of employment
equal twenty-five thousand dollars ($25,000) or greater, the Account
Balances shall be paid in accordance with the Participant's Termination
Payment Method.
6.5 EXCEPTION FOR DISABILITY OF PARTICIPANT. If a Participant is
determined by the Plan Administrator to be suffering from a Disability, the
Plan Administrator may deem such Participant to have effected a Termination
of employment; provided, however, that if a Participant is eligible for
Retirement on the date he or she would have been deemed to have effected a
Termination, the Plan Administrator, with the consent of the Participant,
may deem the Participant to have effected his or her Retirement.
6.6 EXCEPTION FOR DEATH OF PARTICIPANT
(a) PRIOR TO RETIREMENT. Notwithstanding a Participant's
selection of a Survivor Payment Method, if a Participant's Account Balances
on the Valuation Date next following his or her death prior to Retirement
equal less than twenty-five thousand dollars ($25,000), the Account
Balances shall be paid to the Participant's Beneficiary in a lump sum. If a
Participant's Account Balances on such Valuation Date equal twenty-five
thousand dollars ($25,000) or greater, the Account Balances shall be paid
to the Participant's Beneficiary in accordance with the Participant's
Survivor Payment Method.
(b) FOLLOWING RETIREMENT. If a Participant's Account Balances on
the Valuation Date next following his or her death following Retirement
equal less than twenty-five thousand dollars ($25,000), the Account
Balances shall be paid to the Participant's Beneficiary in a lump sum. If a
Participant's Account Balances on such Valuation Date equal twenty-five
thousand dollars ($25,000) or greater, the Account Balances shall be paid
to the Participant's Beneficiary in accordance with the Retirement Payment
Method in effect in respect of the Participant on the date of his or her
death; provided, however, that the Beneficiary may request that the Plan
Administrator pay the Participant's Account Balances in a lump sum without
giving effect to Section 6.11 of this Article 6, which request shall be
honored by the Plan Administrator in its discretion in whole or in part or
upon such terms and conditions as the Plan administrator in good faith
deems appropriate.
6.7 EXCEPTION FOR UNFORESEEABLE FINANCIAL EMERGENCY. If a
Participant (or, after a Participant's death, his or her Beneficiary)
experiences an Unforeseeable Financial Emergency, the Participant or
Beneficiary may request that the Plan Administrator (i) suspend his or her
Deferral Election and (ii) distribute a partial or full lump sum payment
from the Participant's Account Balances. The payment shall not exceed the
amount reasonably needed to satisfy the Unforeseeable Financial Emergency
(and may include an amount equal to any income taxes and other taxes
payable by the Participant or Beneficiary upon receipt of the amount to be
distributed). The request shall be honored by the Plan Administrator in its
discretion. The lump sum payment shall be paid promptly after the first
Valuation Date after approval of the request.
6.8 EXCEPTION FOR SECTION 162(M) OF THE CODE. If, prior to a
Change in Control, the Plan Administrator determines that any payment under
the Plan to a Participant may not be deductible by the Company under
Section 162(m) of the Code, the Plan Administrator may, to the extent
necessary to preserve such deduction, defer any such payment otherwise
payable until the earlier of (i) the earliest date that such payment is
deductible under Section 162(m) or (ii) a Change in Control. This Section
6.8 shall be of no force and effect upon and following a Change in Control.
6.9 EXCEPTION FOR SECTION 16 OF THE EXCHANGE ACT. Notwithstanding
any other provision of the Plan, no payment shall be made pursuant to the
Plan if such payment would subject a Participant to liability under Section
16 of the Exchange Act, and any such payment shall be delayed until the
first date on which such payment may be made without subjecting the
Participant to such liability.
6.10 SHORT-TERM PAYOUT. In making his or her Deferral Election, a
Participant may irrevocably elect to receive a "Short-Term Payout" of the
Deferral Amount in respect of the Plan Year for which such Deferral
Election is made. The Short-Term Payout shall be a lump sum payment in an
amount equal to such Deferral Amount plus or minus gains or losses to such
Deferral Amount, to be paid to such Participant before March 1 of a Plan
Year selected by the Participant; provided, however, that at least two (2)
complete Plan Years must elapse between the Plan Year in which the Deferral
Amount is deferred and the Plan Year in which the Short-Term Payout is to
occur. If, after a Participant elects to receive a Short-Term Payout but
before the Short-Term Payout occurs, the Participant becomes entitled to
payment of his or her Account Balances (in whole or in part), such
Short-Term Payout shall be of no force and effect to the extent
inconsistent with such other payment.
6.11 WITHDRAWAL ELECTION. A Participant (or, after a
Participant's death, his or her Beneficiary) may elect to withdraw from the
Plan at any time. A Participant or Beneficiary shall make such election in
writing delivered to the Plan Administrator on such form as the Plan
Administrator may prescribe. Upon the making of such an election, any
unvested Matching Stock Units credited to the Participant's Stock Unit
Account shall be immediately forfeited, and the Participant's Account
Balances shall thereafter be reduced by an additional ten percent (10%).
Payment of a Participant's Account Balances shall be in a lump sum to be
paid as soon as practicable following the election. Upon payment of his or
her Account Balances pursuant to this Section 6.11, a Participant's
participation in the Plan shall terminate and the Participant shall be
ineligible to participate in the Plan in the future.
6.12 EFFECT OF SECTION 280G OF THE CODE. If a Participant is a
party to an agreement or a participant in a plan (other than this Plan)
that contains a provision which addresses the treatment of "excess
parachute payments" (as defined in Section 280G(b)(1) of the Code), the
treatment of excess parachute payments set forth in such agreement or plan
shall be applicable to any payments to be made to him or her pursuant to
the Plan. If a Participant is not a party to such an agreement and is not a
participant in such a plan, and if any payment under the Plan to a
participant would constitute an excess parachute payment, then such payment
shall be reduced (but not below zero) to such extent; provided, however,
that such Participant may, by notice given to the Plan Administrator, elect
to reduce payments due him or her under other plans, arrangements or
agreements of the Company in lieu of the reduction of one or more payments
under the Plan. Any such notice given by a Participant shall take
precedence over the provisions of any other plan, arrangement or agreement
governing the Participant's rights and entitlements to any benefits or
compensation.
6.13 TIMING OF PAYMENTS
(a) TIMING OF LUMP SUM PAYMENTS. Except as provided in Sections
6.7 and 6.11 of this Article 6, prior to a Change in Control, any lump sum
payment required to be paid pursuant to the Plan shall be paid by March 1
of the Plan Year following the Plan Year in which occurs the event giving
rise to such payment. Upon and following a Change in Control, any lump sum
payment required to be paid pursuant to the Plan shall be paid within ten
(10) business days following the first Valuation Date following the
occurrence of the event giving rise to such payment.
(b) TIMING OF ANNUAL INSTALLMENTS. A Participant's initial Annual
Installment shall be paid by March 1 of the Plan Year following the Plan
Year in which occurs the event giving rise to such Annual Installment.
Subsequent Annual Installments required to be paid under the Plan shall be
paid as promptly as practicable after the end of each subsequent Plan Year
until all Annual Installments have been paid.
6.14 VALUATION OF ACCOUNT BALANCES
(a) CASH ACCOUNTS. The valuation of any payment to be made from a
Cash Account shall be determined as of the Valuation Date immediately
preceding the date of such payment.
(b) STOCK UNIT ACCOUNTS. The valuation of any payment to be made
from a Stock Unit Account or the stock unit portion of a Prior Account
shall be based on the Fair Market Value of a share of Common Stock on the
Valuation Date immediately preceding the date of such payment.
6.15 PRORATION OF PAYMENTS. To the extent that a Participant has
two or more Account Balances at the time a payment is due from such Account
Balances, any payment due such Participant (or such Participant's
Beneficiary) shall be paid pro rata from each Account Balance.
ARTICLE 7
ADMINISTRATION
7.1 PLAN ADMINISTRATOR. Except as may be delegated pursuant to
Section 7.2 of this Article 7 and except as provided in Section 7.7 of this
Article 7, the Committee shall be the Plan Administrator.
7.2 DELEGATION TO MANAGEMENT COMMITTEE. The Plan Administrator
may delegate one or more of its functions to a committee composed of three
or more senior executives of the Company; provided, however, that the Plan
Administrator may not delegate (i) the selection of Eligible Employees,
(ii) the selection of Investment Choices, (iii) the approval of the
Deferral Elections of any officer who is subject to Section 16 of the
Exchange Act or (iv) any other function required by law to be performed by
the Committee. Upon appointment of such a committee and delegation of
duties thereto, such committee shall become the Plan Administrator to the
extent of such delegation.
7.3 GENERAL POWERS AND RESPONSIBILITIES OF PLAN ADMINISTRATOR.
The Plan Administrator shall have full authority to construe and interpret
the terms and provisions of the Plan, and to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan and
perform all acts as it shall, from time to time, deem advisable, and
otherwise to supervise the administration of the Plan. The Plan
Administrator may correct any defect, supply any omission or reconcile any
inconsistency in the Plan, or in any Deferral Election hereunder, in the
manner and to the extent it shall deem necessary to effectuate the Plan.
Any decision, interpretation or other action made or taken in good faith by
or at the direction of the Plan Administrator in connection with the Plan
shall be in the sole and absolute discretion of the Plan Administrator and
shall be final, binding and conclusive on all persons (including, but not
limited to, the Company, employees of the Company and the Employers,
Participants and their respective Beneficiaries, heirs, executors,
administrators, successors and assigns). A Participant who is a member of a
committee that is the Plan Administrator or a person to whom the Plan
Administrator has delegated responsibility pursuant to Section 7.2 of this
Article 7 shall not participate in any decision involving a request made by
him or her or relating in any way to his or her rights, duties, and
obligations as a Participant (unless such decision relates to all
Participants generally and in a similar manner).
7.4 ACTION OF PLAN ADMINISTRATOR. Action taken by the Plan
Administrator shall be taken by a vote of the majority of its members
present at a meeting at which a quorum is present or signed by a majority
of its members in writing without a meeting.
7.5 LIABILITY. No member of the Board, nor the Plan Administrator
nor any employee or agent of the Company, shall be liable for any act or
action hereunder, whether of omission or commission, by any person to whom
duties in connection with the administration of the Plan have been
delegated except in respect of the prudent appointment and periodic
monitoring of such person. Except in circumstances involving bad faith,
gross negligence, willful misconduct or fraud, no person who is a member of
the Board, the Plan Administrator or any employee or agent of the Company
shall be liable for anything done or omitted to be done by him or her. The
Company or the Plan Administrator may consult with legal counsel, who may
be counsel for the Company or other legal counsel with respect to
obligations or duties hereunder or with respect to any action or proceeding
or any question of law, and shall not be liable with respect to any action
taken or omitted by it in good faith pursuant to the advice of such counsel
except in respect of the prudent selection of such counsel.
7.6 INDEMNIFICATION OF PLAN ADMINISTRATOR. The Company hereby
indemnifies the Plan Administrator and each employee to whom
responsibilities are delegated under the Plan against any and all
liabilities and expenses, including attorney's fees, actually and
reasonably incurred by them in connection with any threatened, pending or
completed legal action or judicial or administrative proceeding to which
they may be a party, or may be threatened to be made a party, by reason of
being a member of a committee which is the Plan Administrator or due to a
delegation of responsibilities, except with regard to any matters (i) as to
which they shall be adjudged to have failed to act with the care, skill,
prudence and diligence under the circumstances then prevailing that a
prudent person acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and with like
aims, and (ii) with respect to any action finally adjudged to be a crime,
had reasonable cause to believe their conduct was unlawful.
7.7 ADMINISTRATION UPON CHANGE IN CONTROL. Upon and following a
Change in Control, the Plan Administrator shall be one or more persons
selected by the individual who, immediately prior to the Change in Control
was the Company's chief executive officer; provided, however, that if no
such Plan Administrator has been appointed or accepted such appointment
within ninety (90) days following such Change in Control, the Plan
Administrator shall remain as in effect prior to such Change in Control.
The Company's chief executive officer may appoint himself or herself as
Plan Administrator pursuant to this Section 7.7.
7.8 EMPLOYER INFORMATION. To enable the Plan Administrator to
perform its functions under the Plan, each Employer shall supply full and
timely information to the Plan Administrator regarding all matters relating
to the compensation of Participants, the date and circumstances of the
Retirement, Disability, death and Termination of Participants, and such
other pertinent information as the Plan Administrator may reasonably
require.
ARTICLE 8
BENEFICIARY DESIGNATION
8.1 BENEFICIARY. Each Participant shall designate upon such form
as may be prescribed by the Plan Administrator one or more primary
Beneficiaries and one or more contingent Beneficiaries to receive such
Participant's Account Balances upon his or her death.
8.2 CHANGE OF BENEFICIARY; SPOUSAL CONSENT. A Participant shall
have the right to change his or her Beneficiaries upon such form as may be
prescribed by the Plan Administrator. If the Participant names a primary
Beneficiary other than his or her spouse, a spousal consent, in the form
designated by the Plan Administrator, must be signed by the Participant's
spouse and returned to the Plan Administrator.
8.3 ACKNOWLEDGMENT. No designation or change in designation of a
Beneficiary shall be effective until actually received and acknowledged in
writing by the Plan Administrator. Upon such receipt and acknowledgment,
all prior Beneficiary designations of a Participant shall be of no further
force and effect. The Plan Administrator shall be entitled to rely on the
most recent Beneficiary designation in effect prior to a Participant's
death.
8.4 NO BENEFICIARY DESIGNATION. If a Participant fails to
designate a Beneficiary as provided in this Article 8, or if all designated
Beneficiaries who are natural persons shall have predeceased the
Participant or die prior to complete distribution of the Participant's
Account Balances, such Participant's Account Balances shall be paid to his
or her surviving spouse or, if the Participant has no surviving spouse, to
the Participant's estate.
8.5 DOUBT AS TO BENEFICIARY. If the Plan Administrator is in
doubt as to a Participant's Beneficiary, the Plan Administrator may
withhold payments under the Plan until the Plan Administrator has resolved
its doubts to its satisfaction.
ARTICLE 9
AMENDMENT AND TERMINATION OF THE PLAN
9.1 TERMINATION OF THE PLAN
(a) BY THE COMPANY. Subject to Section 9.1(c) of this Article 9,
the Company may terminate the Plan in whole or in part (including with
respect to the participation of the employees of any Employer) at any time
and for any reason without prior notice to or consent of any Participant.
(b) BY THE EMPLOYERS. Subject to Section 9.1(c) of this Article
9, each Employer may terminate the Plan at any time with respect to any or
all Participants who are employees of such Employer.
(c) PAYMENT OF ACCOUNT BALANCES FOLLOWING PLAN TERMINATION. Upon
the termination of the Plan prior to a Change in Control, Participants
shall receive their Account Balances in a lump sum or in five (5), ten (10)
or fifteen (15) Annual Installments (at the discretion of the Plan
Administrator); provided, however, that if a Participant is receiving
Annual Installments upon termination of the Plan pursuant to the election
of a Payment Method, such Annual Installments shall continue following
termination of the Plan. Upon termination of the Plan upon or following a
Change in Control, Participants shall receive their Account Balances in a
lump sum promptly following the Valuation Date next following the date of
such termination. Termination of the Plan shall not adversely affect the
Account Balances of any Participant or Beneficiary; provided, however, that
neither lump sum payment of Account Balances nor a reduced number of Annual
Installments upon termination of the Plan shall be deemed such an adverse
effect.
9.2 AMENDMENT OF THE PLAN
(a) BY THE COMPANY. Subject to Section 9.2(c) of this Article 9,
the Company may amend or modify the Plan in whole or in part at any time
and for any reason without prior notice to or consent of any Participant or
Beneficiary; provided, however, that, unless a Participant or Beneficiary
who would be affected by such amendment shall have consented thereto, the
Plan may not be amended (i) at the request of a third party who has
indicated an intention or taken steps to effect a Change in Control and who
effectuates a Change in Control, (ii) within six (6) months prior to, or
otherwise in connection with, or in anticipation of, a Change in Control
which has been threatened or proposed and which actually occurs, or (iii)
upon or following a Change in Control.
(b) BY THE PLAN ADMINISTRATOR. Subject to Section 9.2(c) of this
Article 9, prior to a Change in Control, the Plan Administrator may in good
faith amend or modify the Plan to effectuate its intent or to resolve any
discrepancy among the provisions of the Plan or between the Plan and other
documents describing the Plan; provided, however, that no such amendment
may materially increase the cost of the Plan to the Company or any
Employer.
(c) EFFECT OF AMENDMENT. No amendment or modification of the Plan
shall reduce a Participant's Account Balances as of the date of such
amendment or modification.
9.3 EFFECT OF PAYMENT. The full payment of a Participant's
Account Balances shall completely discharge all obligations to a
Participant and his or her Beneficiaries under the Plan.
ARTICLE 10
CLAIMS PROCEDURES
10.1 PRESENTATION OF CLAIM. Any Participant, Beneficiary or other
person (each such person, a "Claimant") may deliver to the Plan
Administrator a written claim for payment from the Plan. All claims must be
made within one hundred eighty (180) days following the date of the
occurrence of the event giving rise to the claim; provided, however, that,
if a claim relates to a notice given by the Company, such claim must be
made within sixty (60) days following receipt of such notice by the
Claimant. The claim must state with particularity the determination desired
by the Claimant.
10.2 NOTIFICATION OF DECISION. The Plan Administrator shall
consider a Claimant's claim, and shall notify the Claimant in writing of
its determination within a reasonable time. Such notice shall set forth (i)
one or more reasons for the grant or denial of the claim or any part of it;
(ii) a description of any additional material or information necessary for
the Claimant to perfect the claim, and an explanation of why such material
or information is necessary; and (iii) an explanation of the claim review
procedure set forth in Section 10.3 of this Article 10.
10.3 REVIEW OF A DENIED CLAIM. Within sixty (60) days after
receiving a notice from the Plan Administrator that a claim has been denied
in whole or in part, a Claimant (or such Claimant's duly authorized
representative) may file with the Plan Administrator a written request for
a review of the denial of the claim. During such sixty-day period, the
Claimant (or the Claimant's duly authorized representative) (i) may review
pertinent documents, (ii) may submit written comments or other documents to
the Plan Administrator and (iii) may request a hearing.
10.4 DECISION ON REVIEW. The Plan Administrator shall render its
decision on review promptly, and not later than sixty (60) days after the
filing of a written request for review of the denial, unless a hearing is
held or other special circumstances require additional time, in which case
the Plan Administrator's decision must be rendered within one hundred
twenty (120) days after such date. Such decision must be written in a
manner calculated to be understood by the Claimant, and it must contain (i)
specific reasons for the decision, (ii) specific reference(s) to the
pertinent Plan provisions upon which the decision was based, and (iii) such
other matters as the Plan Administrator may deem relevant.
10.5 LEGAL ACTION. In making a Deferral Election under the Plan,
each Participant shall be deemed to have agreed that compliance with the
provisions of this Article 10 is a mandatory prerequisite to commencement
of any legal action with respect to any claim for payment under the Plan.
ARTICLE 11
FUNDING
11.1 ESTABLISHMENT OF THE TRUST. The Company shall establish a
Trust in connection with the Plan, and each Employer may, from time to time
and in its sole discretion, transfer to the Trust assets with respect to
Participants who are employees of such Employer. The Plan Administrator
may, in its discretion, establish subaccounts into which assets allocable
to the participation of employees of an Employer shall be deposited.
11.2 INTERRELATIONSHIP OF THE PLAN AND THE TRUST. The provisions
of the Plan shall govern the rights of a Participant to receive payment of
his or her Account Balances. The provisions of the Trust shall govern the
rights of the Trustee, the Company, the Employers, Participants and the
creditors of the Company or the Employers to the assets held in the Trust.
11.3 DISTRIBUTIONS FROM THE TRUST. Each Employer's obligations
under the Plan may be satisfied with Trust assets distributed pursuant to
the terms of the Trust, and any such distribution shall reduce the
Employer's obligations under the Plan.
ARTICLE 12
MISCELLANEOUS
12.1 STATUS OF PLAN. The Plan is intended to be a plan that is
not qualified within the meaning of Section 401(a) of the Code and that "is
unfunded and is maintained by an employer primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees" within the meaning of Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA. The Plan shall be administered and interpreted in a
manner consistent with that intent.
12.2 UNSECURED GENERAL CREDITOR. Participants and their
Beneficiaries, heirs, successors and assigns shall have no legal or
equitable rights, interest or claims in any property or assets of the
Company. For purposes of the payment of benefits under the Plan, any and
all of the Company's assets shall be, and remain, the general, unpledged
unrestricted assets of the Company. The Company's obligation under the Plan
shall be merely that of an unfunded and unsecured promise to pay money in
the future.
12.3 ASSETS. This Plan, and the crediting of Deferral Amounts to
Cash Accounts, Stock Unit Accounts and Prior Accounts hereunder, shall not
constitute a trust and shall be an unsecured contractual obligation of the
Company to the Participants. The obligations of the Company hereunder to
any Participant on any date shall be limited to his or her Account Balances
as of the most recent preceding Valuation Date.
12.4 COMPANY LIABILITY. The Company's liability for the payment
of benefits under the Plan shall be defined only by the Plan. The Company
shall have no obligation to a Participant under the Plan except as
expressly provided herein.
12.5 NONASSIGNABILITY. Neither a Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate
or convey in advance of actual receipt, any amount payable under the Plan.
All amounts payable under the Plan, and all rights to such amounts, are
expressly declared to be unassignable and non-transferable. Except as
provided in Section 12.16 of this Article 12, no part of a Participant's
Account Balances shall, prior to actual payment, be subject to seizure,
attachment, garnishment or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by the Participant or any
other person, be transferable by operation of law in the event of a
Participant's or any other person's bankruptcy or insolvency or be
transferable to a spouse as a result of a property settlement or otherwise.
12.6 NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of
the Plan shall not be deemed to establish, constitute or be evidence of a
contract of employment between any Employer and any Participant. Nothing in
the Plan shall be deemed to confer upon a Participant the right to be
retained in the service of any Employer, or in any way to restrict the
right of any Employer to discipline or discharge a Participant at any time.
12.7 FURNISHING INFORMATION. A Participant or his or her
Beneficiary will cooperate with the Plan Administrator by furnishing any
and all information requested by the Plan Administrator and will take such
other action as may be requested in order to facilitate the administration
of the Plan and the payments of benefits hereunder.
12.8 TERMS. Unless the context shall plainly require otherwise,
(i) use of the masculine herein shall be deemed to include the feminine
(and vice versa), (ii) use of the singular shall be deemed to include the
plural (and vice versa) and (iii) use of the conjunctive shall be deemed to
include the disjunctive (and vice versa).
12.9 CAPTIONS. The captions of the articles, sections and
paragraphs of the Plan are for convenience only and shall not control or
affect the meaning or construction of any of its provisions.
12.10 GOVERNING LAW. The provisions of the Plan shall be
construed and interpreted according to the internal laws of the State of
Delaware without regard to its conflicts of laws principles, except to the
extent governed by ERISA.
12.11 NOTICE. Any notice or filing required or permitted to be
given to the Company or the Plan Administrator shall be sufficient if in
writing and sent to the following address by (i) hand, (ii) registered or
certified mail or (iii) facsimile:
The Dial Corporation
Attention: Senior Vice President, Human Resources
15501 North Dial Boulevard
Scottsdale, AZ 85260
(Fax: 602-754-1098)
Such notice shall be deemed given as of the date of receipt by the Company
or the Plan Administrator (whichever may apply). The person sending such
notice or filing shall produce satisfactory evidence of receipt by the
Company upon the request of the Plan Administrator, and, if such person
fails to produce such evidence of receipt, the Plan Administrator may give
effect to such notice or filing as it deems appropriate.
Any notice or filing required or permitted to be given to a Participant
under the Plan shall be sufficient if in writing and hand-delivered, or
sent by first-class mail, to the last known address of the Participant.
12.12 SUCCESSORS. The provisions of the Plan shall bind and inure
to the benefit of the Company and its successors and assigns. The
provisions of the Plan shall bind and inure to Participants and, upon the
death of a Participant, his or her Beneficiaries or estate (whichever may
apply).
12.13 SPOUSE'S INTEREST. The interest in the Plan of a spouse of
a Participant who is not a Beneficiary shall be subject to the terms and
conditions of Article 8. Without limiting the generality of the foregoing,
the spouse of a Participant shall have no interest in the Plan if such
spouse shall predecease such Participant.
12.14 REFORMATION AND SEVERABILITY. In the event that any
provision of the Plan shall be held illegal, invalid or unenforceable for
any reason, the provision shall be reformed to the extent necessary such
that the provision, as reformed, is legal, valid and enforceable. If a
provision of the Plan shall be held illegal, invalid or enforceable and
such reformation is not possible, such provision shall be ineffective to
the extent of such illegality, invalidity or unenforceability without
rendering illegal, invalid or unenforceable the remaining provisions of the
Plan.
12.15 INCOMPETENCE. If the Plan Administrator determines that a
benefit under the Plan is to be paid to a minor, a person declared
incompetent or a person adjudged legally incapable of handling the
disposition of his or her property, the Plan Administrator may direct
payment of such benefit to the guardian, legal representative or other
person having the care and custody of such minor or such incompetent or
incapable person. The Plan Administrator may require proof of minority,
incompetence, incapacity or guardianship, as it may deem appropriate prior
to distribution of such benefit. Any payment of a benefit shall be a
payment for the account of the Participant or the Participant's
Beneficiary, as the case may be, and shall effect a complete discharge of
any liability under the Plan for such payment.
12.16 COURT ORDER. The Plan Administrator is authorized to make
any payments directed by court order in any action in which the Plan, the
Company or the Plan Administrator has been named as a party. Without
limiting the generality of the foregoing, if a court determines that a
spouse or former spouse of a Participant has an interest in the
Participant's Account Balances under the Plan in connection with a property
settlement or otherwise, the Plan Administrator, in its sole discretion,
shall have the right, notwithstanding any election by a Participant of a
Payment Method, immediately to distribute the interest of such spouse or
former spouse in the Participant's Account Balances under the Plan to such
spouse or former spouse.
12.17 DISTRIBUTION IN THE EVENT OF TAXATION. If, for any reason,
all or any portion of a Participant's Account Balances becomes taxable to
the Participant prior to receipt, a Participant may request that the Plan
Administrator distribute that portion of his or her Account Balances that
has become taxable. The granting of such a request shall not be
unreasonably withheld. If the request is granted, the distribution for such
tax liability shall be paid within ninety (90) days of the date the request
is granted.
12.18 TAXES
(a) UPON DEFERRAL. For each Plan Year in respect of which a
Participant makes a Deferral Election, the Company shall withhold (from
amounts other than Deferral Amounts) an amount equal to the employment
taxes on the Deferral Amounts required to be so withheld.
(b) UPON VESTING. For each Plan Year in which Matching Stock
Units vest in accordance with the terms of the Plan, the Company shall
withhold (from amounts other than Deferral Amounts) an amount equal to the
employment taxes on the vested Matching Stock Units required to be so
withheld.
(c) UPON DISTRIBUTION. When Account Balances are distributed to
Participants, the Company shall withhold from such distributions any taxes
required by federal, state or local law to be so withheld by any Employer.
12.19 INSURANCE. The Company, on its own behalf or on behalf of
the Trust, in its sole discretion may apply for and procure insurance
policies on the life of Participants, in such amounts and in such forms as
the Trustee may select. The Trust shall be the sole owner and beneficiary
of any such policies. The Participant shall have no interest in any such
policies.
12.20 MAXIMUM NUMBER OF SHARES OF COMMON STOCK AUTHORIZED.
Notwithstanding any other provision of this Plan, no more than
5,000,000 shares of Common Stock may be issued in the aggregate to
Participants under the Plan; and provided, that the number of shares of
Common Stock which may be so issued under the Plan shall be further reduced
by the number of shares of Common Stock authorized for issuance under other
plans of the Company (excluding from such reduction, however, the number of
shares of Common Stock authorized for issuance under other plans of the
Company for which shareholder approval is not required pursuant to
subsections (1)-(3) of New York Stock Exchange Rule 312.03(a)).
12.21 LITIGATION TO ENFORCE RIGHTS AFTER CHANGE IN CONTROL. Upon
or following a Change in Control, litigation in respect of the rights of
Participants and Beneficiaries under the Plan may be commenced as provided
in The Dial Corporation Benefits Protection Trust.
12.22 EFFECT OF THE PLAN. The terms and conditions of the Plan
shall supersede the terms and conditions of The Dial Corporation Deferred
Compensation Plan.
IN WITNESS WHEREOF, the Company has caused the Plan to be
executed by its duly authorized representative effective as of this ____
day of ______________, 199_.
THE DIAL CORPORATION
-------------------------------
By:
----------------------------
Its:
---------------------------
<PAGE>
APPENDIX A
DEFINITION OF "CHANGE IN CONTROL"
A "Change in Control" shall mean the occurrence, while the Plan
is in effect, of any of the following:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (i) the then
outstanding shares of common stock of the Company (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election
of directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change in Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or
(iv) any acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (c) below; or
(b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of
a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding voting
shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or substantially all
of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company
or such corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or
(d) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
EXHIBIT 4.5
THE DIAL CORPORATION AMENDED AND RESTATED
DIRECTORS DEFERRED COMPENSATION PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1999)
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 Purpose..............................................................1
ARTICLE 2 Definitions..........................................................1
ARTICLE 3 Deferral Elections of Compensation...................................6
3.1 DEFERRAL ELECTION.....................................................6
3.2 TIMING OF DEFERRAL ELECTIONS..........................................6
3.3 IRREVOCABILITY........................................................6
3.4 CESSATION OF DEFERRAL ELECTIONS.......................................6
3.5 RETURN TO WORK FOLLOWING DISABILITY OR LEAVE OF ABSENCE...............6
3.6 INITIAL PLAN YEAR.....................................................6
ARTICLE 4 Treatment of Deferral Amounts........................................6
4.1 MEMORANDUM ACCOUNTS...................................................6
4.2 CREDITING OF MEMORANDUM ACCOUNTS FOR POST-1998 DEFERRAL AMOUNTS ONLY..7
4.3 RULES APPLICABLE TO 1998 DEFERRAL AMOUNTS ONLY........................7
4.4 TREATMENT OF PRIOR BALANCES...........................................8
4.5 STOCK UNIT DIVIDEND EQUIVALENT RIGHTS.................................8
4.6 CONVERSION TO STOCK UNITS.............................................9
4.7 VESTING...............................................................9
4.8 REPORTS...............................................................9
ARTICLE 5 Payment of Account Balances..........................................9
5.1 FORMS OF PAYMENT OF POST-1998 DEFERRAL AMOUNTS........................9
5.2 FORMS OF PAYMENT OF 1998 DEFERRAL AMOUNTS............................10
5.3 PAYMENT METHOD ELECTIONS.............................................10
5.4 EXCEPTION TO TERMINATION PAYMENT METHOD..............................10
5.5 EXCEPTION FOR DISABILITY OF PARTICIPANT..............................10
5.6 EXCEPTION FOR DEATH OF PARTICIPANT...................................11
5.7 EXCEPTION FOR UNFORESEEABLE FINANCIAL EMERGENCY......................11
5.8 EXCEPTION FOR SECTION 16 OF THE EXCHANGE ACT.........................11
5.9 SHORT-TERM PAYOUT....................................................12
5.10 WITHDRAWAL ELECTION..................................................12
5.11 TIMING OF PAYMENTS...................................................12
5.12 VALUATION OF ACCOUNT BALANCES........................................13
5.13 PRORATION OF PAYMENTS................................................13
ARTICLE 6 Administration......................................................13
6.1 PLAN ADMINISTRATION..................................................13
6.2 DELEGATION TO MANAGEMENT COMMITTEE...................................13
6.3 GENERAL POWERS AND RESPONSIBILITIES OF PLAN ADMINISTRATOR............13
6.4 ACTION OF PLAN ADMINISTRATOR.........................................14
6.5 LIABILITY............................................................14
6.6 INDEMNIFICATION OF PLAN ADMINISTRATOR................................14
6.7 ADMINISTRATION UPON CHANGE IN CONTROL................................14
6.8 COMPANY INFORMATION..................................................15
ARTICLE 7 Beneficiary Designation.............................................15
7.1 BENEFICIARY..........................................................15
7.2 CHANGE OF BENEFICIARY; SPOUSAL CONSENT...............................15
7.3 ACKNOWLEDGMENT.......................................................15
7.4 NO BENEFICIARY DESIGNATION...........................................15
7.5 DOUBT AS TO BENEFICIARY..............................................16
ARTICLE 8 Amendment and Termination of the Plan...............................16
8.1 TERMINATION OF THE PLAN..............................................16
8.2 AMENDMENT OF THE PLAN................................................16
8.3 EFFECT OF PAYMENT....................................................17
ARTICLE 9 Claims Procedures...................................................17
9.1 PRESENTATION OF CLAIM................................................17
9.2 NOTIFICATION OF DECISION.............................................17
9.3 REVIEW OF A DENIED CLAIM.............................................17
9.4 DECISION ON REVIEW...................................................17
9.5 LEGAL ACTION.........................................................18
ARTICLE 10 Funding............................................................18
10.1 ESTABLISHMENT OF THE TRUST...........................................18
10.2 INTERRELATIONSHIP OF THE PLAN AND THE TRUST..........................18
10.3 DISTRIBUTIONS FROM THE TRUST.........................................18
ARTICLE 11 Miscellaneous......................................................18
11.1 STATUS OF PLAN.......................................................18
11.2 UNSECURED GENERAL CREDITOR...........................................18
11.3 ASSETS...............................................................18
11.4 COMPANY LIABILITY....................................................19
11.5 NONASSIGNABILITY.....................................................19
11.6 NO RIGHT TO CONTINUED SERVICE........................................19
11.7 FURNISHING INFORMATION...............................................19
11.8 TERMS................................................................19
11.9 CAPTIONS.............................................................19
11.10 GOVERNING LAW........................................................19
11.11 NOTICE...............................................................19
11.12 SUCCESSORS...........................................................20
11.13 SPOUSE'S INTEREST....................................................20
11.14 REFORMATION AND SEVERABILITY.........................................20
11.15 INCOMPETENCE.........................................................20
11.16 COURT ORDER..........................................................21
11.17 DISTRIBUTION IN THE EVENT OF TAXATION................................21
11.18 TAXES................................................................21
11.19 INSURANCE............................................................21
11.20 MAXIMUM NUMBER OF SHARES OF COMMON STOCK AUTHORIZED..................21
11.21 LITIGATION TO ENFORCE RIGHTS AFTER CHANGE IN CONTROL.................22
11.22 EFFECT OF THE PLAN...................................................22
THE DIAL CORPORATION AMENDED AND RESTATED
DIRECTORS DEFERRED COMPENSATION PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1999)
---------------------
ARTICLE 1
PURPOSE
The purpose of this Amended and Restated Directors Deferred
Compensation Plan is to provide directors who are not employees of The Dial
Corporation the opportunity to defer receipt of Compensation to which they
are entitled while the Plan is in effect. The Plan is intended to be an
unfunded nonqualified deferred compensation plan and shall be construed and
administered accordingly.
ARTICLE 2
DEFINITIONS
For purposes of the Plan, the following terms shall have the
following meanings:
"1998 DEFERRAL AMOUNT" shall mean the portion of a Participant's
Cash Account and Stock Unit Account which are allocable to his or her
Deferral Amount deferred in the 1998 Plan Year.
"ACCOUNT BALANCES" shall mean the sum of the balances of a
Participant's Cash Account and Stock Unit Account.
"ALLOCATION DATE" shall mean the date on which all or a portion
of a Participant's Deferral Amount is credited to his or her Cash Account
or Stock Unit Account, which shall be the date on which such Deferral
Amount (or portion thereof) would have been paid to the Participant if the
Participant had not made a Deferral Election; provided, however, that, if
such date is not a business day, the Allocation Date shall be the
immediately preceding business day.
"ANNUAL INSTALLMENT" shall mean any installment payment required
to be paid to a Participant, the amount of each of which shall be
determined by multiplying each Account Balance as of the Valuation Date
immediately preceding the date of the Annual Installment by a fraction, the
numerator of which shall be one (1) and the denominator of which shall be
the number of Annual Installments remaining to be paid to the Participant.
"BENEFICIARY" shall mean the person or persons designated by a
Participant in accordance with Article 7 to receive payments under the Plan
following the death of the Participant.
"BOARD" shall mean the Board of Directors of the Company.
"CASH ACCOUNT" shall mean a memorandum account established on the
books of the Company on behalf of a Participant, into which shall be
credited an amount of cash pursuant to Article 4.
"CAUSE" shall mean (i) the conviction of a Participant for
committing a felony under federal law or the law of the state in which such
action occurred, (ii) material dishonesty in the course of fulfilling a
Participant's duties or (iii) willful and deliberate failure on the part of
a Participant to perform his duties in any material respect, or (iv) such
other events as shall be determined by the Plan Administrator.
"CHANGE IN CAPITALIZATION" shall have the meaning set forth in
Section 4.5(iv) of Article 4.
"CHANGE IN CONTROL" shall have the meaning set forth in Appendix
A.
"CHANGE IN CONTROL PAYMENT METHOD" shall mean the manner in which
a Participant's Account Balances are paid to a Participant following a
Change in Control in accordance with the Participant's election, such
manner to be either (i) a lump sum upon a Change in Control or (ii) a lump
sum upon termination for any reason following a Change in Control;
provided, that, if a Participant does not elect a Change in Control Payment
Method, the Participant's other Payment Methods shall remain in effect
following a Change in Control.
"CLAIMANT" shall have the meaning set forth in Section 9.1 of
Article 9.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" shall mean the common stock, par value $.01 per
share, of the Company.
"COMPANY" shall mean The Dial Corporation, a Delaware
corporation, and any successor thereto.
"COMPENSATION" shall mean the retainer fees and meeting fees
payable to a Participant.
"CONVERSION NOTICE" shall have the meaning set forth in Section
4.3(d) of Article 4.
"DEFERRAL AMOUNT" shall mean a specified percentage or specified
dollar amount of Compensation elected by a Participant to be deferred in a
Plan Year.
"DEFERRAL ELECTION" shall mean a Participant's timely election of
a Deferral Amount pursuant to Article 3.
"DEFERRAL ELECTION FORM" shall mean the form that a Participant
must submit to the Plan Administrator documenting his or her Deferral
Election.
"DEFERRED COMPENSATION ACCOUNTS" shall mean a Participant's Cash
Account and Stock Unit Account.
"DISABILITY" shall mean a condition as a result of which a
Participant would qualify for permanent disability benefits under the
Company's long-term disability if the Participant were a participant in
such plan, as determined by the Plan Administrator.
"ELIGIBLE DIRECTOR" shall mean each member of the Board who does
not receive a regular salary as an employee of the Company; provided,
however, that no such member shall be eligible to participate in the Plan
in a Plan Year if the Plan Administrator shall determine that the member
could acquire under the Plan more than 1,000,000 shares of Common Stock.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"FAIR MARKET VALUE" on any date shall mean the mean between the
highest and lowest reported sales prices of the Common Stock on the New
York Stock Exchange Composite Tape or, if not listed on such exchange, on
any other national exchange on which the Common Stock is listed or on the
NASDAQ National Market System or on NASDAQ or, if there is no regular
public trading market for the Common Stock, as determined by the Board in
good faith.
"INVESTMENT CHOICES" shall mean the reference investment vehicles
made available by the Plan Administrator from time to time in which
Participants' Deferral Amounts and Prior Balances will be deemed to be
invested pursuant to Section 4.3(b) of Article 4.
"LEAVE OF ABSENCE" shall mean a paid or unpaid break in the
service of a Participant with the approval of the Plan Administrator.
"PARTICIPANT" shall mean any Eligible Director who makes a
Deferral Election pursuant to Section 3.1 of Article 3 and for whom one or
more Deferred Compensation Accounts are maintained under the Plan.
"PAYMENT METHOD" shall mean any of a Participant's Change in
Control Payment Method, Retirement Payment Method, Survivor Payment Method
and Termination Payment Method.
"PLAN" shall mean The Dial Corporation Amended and Restated
Directors Deferred Compensation Plan (As Amended and Restated Effective
January 1, 1999), as such Plan may be amended from time to time.
"PLAN ADMINISTRATOR" shall mean the Board or a committee to which
the Board delegates its powers and duties under the Plan, as set forth in
Section 6.2 of Article 6, or, upon and following a Change in Control, one
or more persons selected pursuant to Section 6.7 of Article 6.
"PLAN YEAR" shall mean the calendar year.
"POST-1998 DEFERRAL AMOUNTS" shall mean the portion of a
Participant's Stock Unit Account which is allocable to his or her Deferral
Amounts deferred in the 1999 Plan Year and thereafter.
"PRIOR BALANCES" shall mean the amounts in a Participant's
deferred compensation accounts (under the terms of the Deferred
Compensation Plan for Directors of The Dial Corporation) as of December 31,
1997.
"RETIREMENT" shall mean termination of service as a member of the
Board upon or following the earlier of (i) the date on which the
Participant has five (5) Years of Service or (ii) the date on which the
Participant's age is at least 70; provided, however, that "Retirement"
shall not include termination upon or following such dates for Cause or as
a result of death.
"RETIREMENT PAYMENT METHOD" shall mean the manner in which a
Participant's Account Balances are paid to the Participant upon Retirement
in accordance with the Participant's election, such manner to be either (i)
a lump sum payment or (ii) two (2), three (3), five (5), ten (10) or
fifteen (15) Annual Installments.
"SHORT-TERM PAYOUT" shall have the meaning set forth in Section
5.9 of Article 5.
"STOCK UNIT ACCOUNT" shall mean a memorandum account established
on the books of the Company on behalf of a Participant, into which shall be
credited a number of Stock Units pursuant to Article 4.
"STOCK UNITS" shall mean units credited to a Participant's Stock
Unit Account, with one Stock Unit having a value on a date equal to the
Fair Market Value of one share of Common Stock on such date.
"SURVIVOR PAYMENT METHOD" shall mean the manner in which a
Participant's Account Balances are paid to the Beneficiary of the
Participant upon the Participant's death prior to Retirement in accordance
with the Participant's election, such manner to be either (i) a lump sum or
(ii) two (2), three (3), five (5), ten (10) or fifteen (15) Annual
Installments.
"TERMINATION" shall mean termination of a Participant's service
as a member of the Board, other than (i) for Cause or (ii) upon his or her
Retirement or death.
"TERMINATION PAYMENT METHOD" shall mean the manner in which a
Participant's Account Balances are paid to the Participant upon Termination
in accordance with the Participant's election, such manner to be either (i)
a lump sum payment or (ii) two (2) or three (3) Annual Installments.
"TRUST" shall mean the trust established pursuant to Article 10.
"UNFORESEEABLE FINANCIAL EMERGENCY" shall mean an unanticipated
emergency which is (i) a sudden and unexpected illness or accident of the
Participant or a dependent of the Participant (with "dependent" defined for
purposes of the Plan as in Section 152(a) of the Code), (ii) a loss of the
Participant's property due to casualty or (iii) such other extraordinary
circumstances deemed to be an Unforeseeable Financial Emergency, in each
case caused by an event beyond the control of the Participant and imposing
severe financial hardship to the Participant.
"VALUATION DATE" shall mean the last day of each calendar month;
provided, however, that, if such date is not a business day, the Valuation
Date shall be the immediately preceding business day.
"YEAR OF SERVICE" shall mean each complete 365-day period during
which a member of the Board has been a member of the Board, such period to
commence on the member's initial date of appointment or election (as the
case may be) and each anniversary of such date; provided, that the
calculation of the Years of Service of a member with breaks in service as a
result of a Disability or a Leave of Absence shall be as determined by the
Plan Administrator.
ARTICLE 3
DEFERRAL ELECTIONS OF COMPENSATION
3.1 DEFERRAL ELECTION. Each Eligible Director may elect to have
the payment of a specified percentage or specified dollar amount of
Compensation deferred in each Plan Year pursuant to the Plan; provided,
however, that the Plan Administrator may in its discretion establish limits
on Deferral Amounts as it deems appropriate. Each Deferral Election shall
be timely made on a Deferral Election Form to be provided by the Plan
Administrator and shall specify the Deferral Amount. Upon the
acknowledgment of a Deferral Election Form by the Plan Administrator, such
Eligible Director shall become a Participant in the Plan for such Plan
Year.
3.2 TIMING OF DEFERRAL ELECTIONS. Deferral Elections in respect
of Compensation otherwise payable to Participants in a Plan Year shall be
timely if made on or before November 30 of the preceding year; provided,
however, that Deferral Elections in respect of Compensation otherwise
payable in the 1998 Plan Year shall be timely if made on or before a date
specified by the Plan Administrator.
3.3 IRREVOCABILITY. Except as provided in Section 3.4 of this
Article 3, a Deferral Election, once made, shall be irrevocable.
3.4 CESSATION OF DEFERRAL ELECTIONS. The Deferral Election of a
Participant shall be of no further force and effect (i) upon the
Participant's death, (ii) in the discretion of the Plan Administrator, if a
Participant is suffering from a Disability, (iii) during a Participant's
Leave of Absence or (iv) upon withdrawal of a Participant from the Plan
pursuant to Section 5.10 of Article 5.
3.5 RETURN TO WORK FOLLOWING DISABILITY OR LEAVE OF ABSENCE. If a
Participant returns to service as a member of the Board upon cessation of
Disability, or following a Leave of Absence, in either case during which
the Participant's Deferral Election was of no force and effect pursuant to
Section 3.4 of this Article 3, (i) the Plan Administrator may give effect
to the Participant's unexpired Deferral Election and (ii) the Participant
may, with the consent of the Plan Administrator, make Deferral Elections in
respect of future Plan Years.
3.6 INITIAL PLAN YEAR. The initial Plan Year of the Plan shall
commence on January 1, 1998.
ARTICLE 4
TREATMENT OF DEFERRAL AMOUNTS
4.1 MEMORANDUM ACCOUNTS. The Company shall establish on its books
for each Participant in the Plan, as necessary, a Cash Account and a Stock
Unit Account.
4.2 CREDITING OF MEMORANDUM ACCOUNTS FOR POST-1998 DEFERRAL
AMOUNTS ONLY. On each Allocation Date during the 1999 Plan Year and
thereafter, an amount of cash reflecting the portion of a Participant's
Deferral Amount which would otherwise have been paid to the Participant on
such Allocation Date shall be converted to Stock Units and credited to the
Participant's Stock Unit Account, in accordance with Section 4.6 of this
Article 4.
4.3 RULES APPLICABLE TO 1998 DEFERRAL AMOUNTS ONLY
(a) CREDITING OF MEMORANDUM ACCOUNTS. On each Allocation Date
during the 1998 Plan Year, an amount of cash reflecting the portion of a
Participant's Deferral Amount which would otherwise have been paid to the
Participant on such Allocation Date shall be (i) credited to the
Participant's Cash Account, to the extent that the Participant has elected
to invest in one or more Investment Choices and (ii) converted to Stock
Units and credited to the Participant's Stock Unit Account, in accordance
with Section 4.6 of this Article 4.
(b) INVESTMENT OF CASH ACCOUNTS. A Participant's Cash Account
shall be deemed invested among the Investment Choices selected by the
Participant on the Participant's Deferral Election Form (or such other form
as may be prescribed by the Plan Administrator). Each Participant's Cash
Account shall be adjusted as of each Valuation Date to reflect the
performance of the Investment Choices, and, to the greatest extent
practicable, the value of each Participant's Cash Account shall be
determined as if Deferral Amounts were actually invested among the
Investment Choices as directed by such Participant; provided, however, that
the Company shall have no obligation actually to invest any Deferral
Amounts or other assets in any Investment Choices.
(c) ALLOCATION AMONG INVESTMENT CHOICES. A Participant may elect
to change the allocation of his or her Cash Account among the Investment
Choices not more frequently than quarterly by completing such form as may
be prescribed by the Plan Administrator and submitting it to the Plan
Administrator. Any such change in allocation will become effective on the
first day of the next following calendar quarter.
(d) CONVERSION BETWEEN STOCK UNIT ACCOUNTS AND CASH ACCOUNTS. A
Participant may, by notice delivered to the Plan Administrator (a
"Conversion Notice"), convert (i) any portion of the Stock Units credited
to his or her Stock Unit Account which is allocable to his or her 1998
Deferral Amount (either before or after Annual Installments from such
account may have commenced) to his or her Cash Account by multiplying the
Stock Units to be converted by the Fair Market Value of a share of Common
Stock on the earlier of the Valuation Date coincident with or the Valuation
Date next following the day on which the Conversion Notice is received, or
(ii) all or any portion of his or her Cash Account (either before or after
Annual Installments from such account may have commenced) into a number of
Stock Units equal to the portion of the Cash Account to be converted
divided by the Fair Market Value of a share of Common Stock on the last
trading day of the month in which such Conversion Notice is given;
provided, however, that no Conversion Notice shall be of any force and
effect if it (A) is given within six months following the date of an
election by such Participant, with respect to any plan of the Company, that
effected a "Discretionary Transaction" (as defined in Rule 16b-3(f) under
the Exchange Act) that was an acquisition (if the Conversion Notice is
pursuant to clause (i)) or a disposition (if the Conversion Notice is
pursuant to clause (ii)) or (B) is given after a Participant ceases to be a
member of the Board and the Plan Administrator does not consent to such
Conversion Notice. Any such Conversion Notice will become effective on the
first day of the next following calendar quarter.
4.4 TREATMENT OF PRIOR BALANCES. Effective as of January 1, 1998,
Prior Balances denominated as cash shall be allocated to a Participant's
Cash Account, and Prior Balances denominated as stock units shall be
allocated to a Participant's Stock Unit Account and deemed to be allocable
to a Participant's 1998 Deferral Amounts. A Participant's Prior Balances
shall be paid to the Participant in accordance with Article 5 of the Plan.
4.5 STOCK UNIT DIVIDEND EQUIVALENT RIGHTS. In the event of a
dividend paid with respect to the Common Stock, whether in cash, Common
Stock or other stock or property of the Company, credits (dividend
equivalents) will be made to each Participant's Stock Unit Account as
follows:
(i) in the case of a cash dividend, or a dividend of
stock of the Company (other than Common Stock) or other property,
additional credits will be made to the Stock Unit Account
consisting of a number of Stock Units equal to the number
determined by dividing (A) the cash amount of such dividend per
share (or the fair market value, on the date of payment, of
dividends paid in such stock or other property), multiplied by
the aggregate number of Stock Units credited to such Stock Unit
Account on the record date for the payment of such dividend by
(B) the Fair Market Value of a share of Common Stock on the day
prior to the date such dividend is payable to holders;
(ii) in the case of a dividend consisting of Common
Stock, the Stock Unit Account will be credited with a number of
Stock Units equal to the number of Stock Units in such account
immediately prior to such dividend multiplied by the number of
shares of Common Stock paid per share of Common Stock in such
dividend;
(iii) in the case of a dividend consisting of shares of
stock of any of the Company's subsidiaries, a new stock unit
subaccount will be established and credited with a number of
shares of stock of such subsidiary equal to the number of Stock
Units in the Participant's Stock Unit Account immediately prior
to such dividend multiplied by the number of shares of subsidiary
stock issued per share of Common Stock in such dividend (with
dividends thereafter accruing on such new subaccount solely in
the form of cash in an amount equal to the value of dividends
paid by the issuer of the stock to which the stock units relate);
and
(iv) in the case of a Change in Capitalization not
described in subsections (i), (ii) or (iii) of this Section 4.5,
the Plan Administrator in good faith shall take such action as it
deems necessary to preserve the economic value of the Stock Unit
Account immediately prior to the Change in Capitalization. For
purposes of this Section 4.5(iv), "Change in Capitalization"
shall mean any increase or reduction in the number of shares of
Common Stock, or any change (including, but not limited to, a
change in value) in such shares or exchange of such shares for a
different number or kind of shares or other securities of the
Company or another corporation, by reason of a reclassification,
recapitalization, merger, consolidation, reorganization,
spin-off, split-up, issuance of warrants or rights or debentures,
stock dividend, stock split or reverse stock split, cash
dividend, property dividend, combination or exchange of shares,
repurchase of shares, change in corporate structure or otherwise.
After payment in respect of a Participant's Stock Unit Account commences,
dividend equivalents will accrue on the unpaid balance of such Stock Unit
Account in the same manner until all of the amounts credited to such Stock
Unit Account have been paid.
4.6 CONVERSION TO STOCK UNITS. Credits to a Participant's Stock
Unit Account on an Allocation Date shall be converted into a number of
Stock Units equal to the amount of the credit to the Stock Unit Account on
such Allocation Date divided by the Fair Market Value of a share of Common
Stock on the Allocation Date. Upon and following such conversion, such
Stock Units shall be allocated to the Stock Unit Account in lieu of such
credit.
4.7 VESTING. A Participant shall be fully (100%) vested in his or
her Account Balances at all times.
4.8 REPORTS. Until a Participant's Account Balances shall have
been paid in full, the Company will furnish to the Participant a report at
least quarterly which shall set forth transactions in, and the status of,
the Participant's Deferred Compensation Accounts.
ARTICLE 5
PAYMENT OF ACCOUNT BALANCES
5.1 FORMS OF PAYMENT OF POST-1998 DEFERRAL AMOUNTS. Any payment
which is allocable to a Participant's Post-1998 Deferral Amounts shall be
paid in Common Stock.
5.2 FORMS OF PAYMENT OF 1998 DEFERRAL AMOUNTS
(a) PAYMENT TO BE MADE IN CASH. Any payment which is allocable to
a Participant's 1998 Deferral Amount and which is required to be paid from
a Participant's Cash Account shall be in cash.
(b) PAYMENT TO BE MADE IN COMMON STOCK. Any payment which is
allocable to a Participant's 1998 Deferral Amount and which is required to
be paid from a Participant's Stock Unit Account shall be in cash or, at the
election of the Participant or the Plan Administrator, in Common Stock. A
Participant's election pursuant to this Section 5.2(b) shall be honored by
the Plan Administrator in its discretion.
5.3 PAYMENT METHOD ELECTIONS
(a) PAYMENT OF ACCOUNT BALANCES IN ACCORDANCE WITH PAYMENT
METHODS. Except as provided in the exceptions set forth in Sections 5.4
through 5.9 of this Article 5, a Participant's Account Balances shall be
paid in accordance with the Payment Methods selected by him or her.
(b) INITIAL PAYMENT METHOD ELECTIONS. Each Eligible Director
shall select Payment Methods upon completion of his or her initial Deferral
Election Form. If a Participant fails to select one or more Payment
Methods, he or she will be deemed to have selected a lump sum in respect of
such Payment Methods; provided, however, that, if a Participant has not
selected a Change in Control Payment Method, the Participant's Retirement
Payment Method, Survivor Payment Method and Termination Payment Method will
remain in effect following a Change in Control.
(c) CHANGE IN PAYMENT METHOD. A Participant may change one or
more of his or her Payment Methods by completing such form as may be
prescribed by the Plan Administrator; provided, however, that such change
shall be effective only if made by the Participant and acknowledged by the
Plan Administrator: (i) if the change relates to the Change in Control
Payment Method, at least one (1) year prior to the date of a Change in
Control, (ii) if the change relates to the Retirement Payment Method or
Termination Payment Method, at least two (2) years prior to the date of
Termination or Retirement (whichever is applicable) and (iii) if the change
relates to the Survivor Payment Method, immediately.
5.4 EXCEPTION TO TERMINATION PAYMENT METHOD. Notwithstanding a
Participant's selection of a Termination Payment Method, a Participant's
Account Balances shall be paid in a lump sum if (i) the Participant's
Account Balances on the Valuation Date next following his or her
Termination equal less than twenty-five thousand dollars ($25,000) or (ii)
the Participant ceases to be a member of the Board by reason of termination
for Cause. If a Participant's Account Balances on the Valuation Date next
following his or her Termination equal twenty-five thousand dollars
($25,000) or greater, the Account Balances shall be paid in accordance with
the Participant's Termination Payment Method.
5.5 EXCEPTION FOR DISABILITY OF PARTICIPANT. If a Participant is
determined by the Plan Administrator to be suffering from a Disability, the
Plan Administrator may deem such Participant to have effected a
Termination; provided, however, that if a Participant is eligible for
Retirement on the date he or she would have been deemed to have effected a
Termination, the Plan Administrator, with the consent of the Participant,
may deem the Participant to have effected his or her Retirement.
5.6 EXCEPTION FOR DEATH OF PARTICIPANT
(a) PRIOR TO RETIREMENT. Notwithstanding a Participant's
selection of a Survivor Payment Method, if a Participant's Account Balances
on the Valuation Date next following his or her death prior to Retirement
equal less than twenty-five thousand dollars ($25,000), the Account
Balances shall be paid to the Participant's Beneficiary in a lump sum. If a
Participant's Account Balances on such Valuation Date equal twenty-five
thousand dollars ($25,000) or greater, the Account Balances shall be paid
to the Participant's Beneficiary in accordance with the Participant's
Survivor Payment Method.
(b) FOLLOWING RETIREMENT. If a Participant's Account Balances on
the Valuation Date next following his or her death following Retirement
equal less than twenty-five thousand dollars ($25,000), the Account
Balances shall be paid to the Participant's Beneficiary in a lump sum. If a
Participant's Account Balances on such Valuation Date equal twenty-five
thousand dollars ($25,000) or greater, the Account Balances shall be paid
to the Participant's Beneficiary in accordance with the Retirement Payment
Method in effect in respect of the Participant on the date of his or her
death; provided, however, that the Beneficiary may request that the Plan
Administrator pay the Participant's Account Balances in a lump sum without
giving effect to Section 5.10 of this Article 5, which request shall be
honored by the Plan Administrator in its discretion in whole or in part or
upon such terms and conditions as the Plan administrator in good faith
deems appropriate.
5.7 EXCEPTION FOR UNFORESEEABLE FINANCIAL EMERGENCY. If a
Participant (or, after a Participant's death, his or her Beneficiary)
experiences an Unforeseeable Financial Emergency, the Participant or
Beneficiary may request that the Plan Administrator (i) suspend his or her
Deferral Election and (ii) distribute a partial or full lump sum payment
from the Participant's Account Balances. The payment shall not exceed the
amount reasonably needed to satisfy the Unforeseeable Financial Emergency
(and may include an amount equal to any income taxes and other taxes
payable by the Participant or Beneficiary upon receipt of the amount to be
distributed). The request shall be honored by the Plan Administrator in its
discretion. The lump sum payment shall be paid promptly after the first
Valuation Date after approval of the request.
5.8 EXCEPTION FOR SECTION 16 OF THE EXCHANGE ACT. Notwithstanding
any other provision of the Plan, no payment shall be made pursuant to the
Plan if such payment would subject a Participant to liability under Section
16 of the Exchange Act, and any such payment shall be delayed until the
first date on which such payment may be made without subjecting the
Participant to such liability.
5.9 SHORT-TERM PAYOUT. In making his or her Deferral Election, a
Participant may irrevocably elect to receive a "Short-Term Payout" of the
Deferral Amount in respect of the Plan Year for which such Deferral
Election is made. The Short-Term Payout shall be a lump sum payment in an
amount equal to such Deferral Amount plus or minus gains or losses to such
Deferral Amount, to be paid to such Participant before March 1 of a Plan
Year selected by the Participant; provided, however, that at least two (2)
complete Plan Years must elapse between the Plan Year in which the Deferral
Amount is deferred and the Plan Year in which the Short-Term Payout is to
occur. If, after a Participant elects to receive a Short-Term Payout but
before the Short-Term Payout occurs, the Participant becomes entitled to
payment of his or her Account Balances (in whole or in part), such
Short-Term Payout shall be of no force and effect to the extent
inconsistent with such other payment.
5.10 WITHDRAWAL ELECTION. A Participant (or, after a
Participant's death, his or her Beneficiary) may elect to withdraw from the
Plan at any time. A Participant or Beneficiary shall make such election in
writing delivered to the Plan Administrator on such form as the Plan
Administrator may prescribe. Upon the making of such an election, ten
percent (10%) of the Participant's Account Balances shall be immediately
forfeited. Payment of a Participant's Account Balances shall be in a lump
sum to be paid as soon as practicable following the election. Upon payment
of his or her Account Balances pursuant to this Section 5.10, a
Participant's participation in the Plan shall terminate and the Participant
shall be ineligible to participate in the Plan in the future.
5.11 TIMING OF PAYMENTS
(a) TIMING OF LUMP SUM PAYMENTS. Except as provided in Sections
5.7 and 5.9 of this Article 5, prior to a Change in Control, any lump sum
payment required to be paid pursuant to the Plan shall be paid by March 1
of the Plan Year following the Plan Year in which occurs the event giving
rise to such payment. Upon and following a Change in Control, any lump sum
payment required to be paid pursuant to the Plan shall be paid within ten
(10) business days following the first Valuation Date following the
occurrence of the event giving rise to such payment.
(b) TIMING OF ANNUAL INSTALLMENTS. A Participant's initial Annual
Installment shall be paid by March 1 of the Plan Year following the Plan
Year in which occurs the event giving rise to such Annual Installment.
Subsequent Annual Installments required to be paid under the Plan shall be
paid as promptly as practicable after the end of each subsequent Plan Year
until all Annual Installments have been paid.
5.12 VALUATION OF ACCOUNT BALANCES
(a) CASH ACCOUNTS. The valuation of any payment to be made from a
Cash Account shall be determined as of the Valuation Date immediately
preceding the date of such payment.
(b) STOCK UNIT ACCOUNTS. The valuation of any payment to be made
from a Stock Unit Account shall be based on the Fair Market Value of a
share of Common Stock on the Valuation Date immediately preceding the date
of such payment.
5.13 PRORATION OF PAYMENTS. To the extent that a Participant has
two Account Balances at the time a payment is due from such Account
Balances, any payment due such Participant (or such Participant's
Beneficiary) shall be paid pro rata from each Account Balance.
ARTICLE 6
ADMINISTRATION
6.1 PLAN ADMINISTRATION. It is intended that the provisions of
the Plan be self-effectuating to the greatest extent possible. To the
extent necessary to secure the proper administration of the Plan, the Board
shall be the Plan Administrator.
6.2 DELEGATION TO MANAGEMENT COMMITTEE. The Plan Administrator
may delegate one or more of its functions to a committee composed of three
or more senior executives of the Company; provided, however, that the Plan
Administrator may not delegate (i) the selection of Investment Choices,
(ii) any action required to be taken by the Board pursuant to Section 16 of
the Exchange Act or (ii) any other function required by law to be performed
by the Board. Upon appointment of such a committee and delegation of duties
thereto, such committee shall become the Plan Administrator to the extent
of such delegation.
6.3 GENERAL POWERS AND RESPONSIBILITIES OF PLAN ADMINISTRATOR.
The Plan Administrator shall have full authority to construe and interpret
the terms and provisions of the Plan, and to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan and
perform all acts as it shall, from time to time, deem advisable, and
otherwise to supervise the administration of the Plan. The Plan
Administrator may correct any defect, supply any omission or reconcile any
inconsistency in the Plan, or in any Deferral Election hereunder, in the
manner and to the extent it shall deem necessary to effectuate the Plan.
Any decision, interpretation or other action made or taken in good faith by
or at the direction of the Plan Administrator in connection with the Plan
shall be in the sole and absolute discretion of the Plan Administrator and
shall be final, binding and conclusive on all persons (including, but not
limited to, the Company, employees of the Company, Participants and their
respective Beneficiaries, heirs, executors, administrators, successors and
assigns). A Participant shall not participate in any decision involving a
request made by him or her or relating in any way to his or her rights,
duties, and obligations as a Participant (unless such decision relates to
all Participants generally and in a similar manner).
6.4 ACTION OF PLAN ADMINISTRATOR. Action taken by the Plan
Administrator shall be taken by a vote of the majority of its members
present at a meeting at which a quorum is present or signed by a majority
of its members in writing without a meeting.
6.5 LIABILITY. The Plan Administrator shall not be liable for any
act or action hereunder, whether of omission or commission, by any person
to whom duties in connection with the administration of the Plan have been
delegated except in respect of the prudent appointment and periodic
monitoring of such person. Except in circumstances involving bad faith,
gross negligence, willful misconduct or fraud, neither the Plan
Administrator nor any employee or agent of the Company shall be liable for
anything done or omitted to be done by him or her. The Company or the Plan
Administrator may consult with legal counsel, who may be counsel for the
Company or other legal counsel with respect to obligations or duties
hereunder or with respect to any action or proceeding or any question of
law, and shall not be liable with respect to any action taken or omitted by
it in good faith pursuant to the advice of such counsel except in respect
of the prudent selection of such counsel.
6.6 INDEMNIFICATION OF PLAN ADMINISTRATOR. The Company hereby
indemnifies the Plan Administrator and each employee to whom
responsibilities are delegated under the Plan against any and all
liabilities and expenses, including attorney's fees, actually and
reasonably incurred by them in connection with any threatened, pending or
completed legal action or judicial or administrative proceeding to which
they may be a party, or may be threatened to be made a party, by reason of
being a member of a committee which is the Plan Administrator or due to a
delegation of responsibilities, except with regard to any matters (i) as to
which they shall be adjudged to have failed to act with the care, skill,
prudence and diligence under the circumstances then prevailing that a
prudent person acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and with like
aims, and (ii) with respect to any action finally adjudged to be a crime,
had reasonable cause to believe their conduct was unlawful.
6.7 ADMINISTRATION UPON CHANGE IN CONTROL. Upon and following a
Change in Control, the Plan Administrator shall be one or more persons
approved by the Board prior to the Change in Control and selected by the
individual who, immediately prior to the Change in Control, was the
Company's chief executive officer; provided, however, that if no such Plan
Administrator has been appointed or accepted such appointment within ninety
(90) days following such Change in Control, the Plan Administrator shall
remain as in effect prior to such Change in Control. The Company's chief
executive officer may appoint himself or herself as Plan Administrator
pursuant to this Section 6.7.
6.8 COMPANY INFORMATION. To enable the Plan Administrator to
perform its functions under the Plan, the Company shall supply full and
timely information to the Plan Administrator regarding all matters relating
to the Compensation of Participants, the date and circumstances of the
Retirement, Disability, death and Termination of Participants, and such
other pertinent information as the Plan Administrator may reasonably
require.
ARTICLE 7
BENEFICIARY DESIGNATION
7.1 BENEFICIARY. Each Participant shall designate upon such form
as may be prescribed by the Plan Administrator one or more primary
Beneficiaries and one or more contingent Beneficiaries to receive such
Participant's Account Balances upon his or her death.
7.2 CHANGE OF BENEFICIARY; SPOUSAL CONSENT. A Participant shall
have the right to change his or her Beneficiaries upon such form as may be
prescribed by the Plan Administrator. If the Participant names a primary
Beneficiary other than his or her spouse, a spousal consent, in the form
designated by the Plan Administrator, must be signed by the Participant's
spouse and returned to the Plan Administrator.
7.3 ACKNOWLEDGMENT. No designation or change in designation of a
Beneficiary shall be effective until actually received and acknowledged in
writing by the Plan Administrator. Upon such receipt and acknowledgment,
all prior Beneficiary designations of a Participant shall be of no further
force and effect. The Plan Administrator shall be entitled to rely on the
most recent Beneficiary designation in effect prior to a Participant's
death.
7.4 NO BENEFICIARY DESIGNATION. If a Participant fails to
designate a Beneficiary as provided in this Article 7, or if all designated
Beneficiaries who are natural persons shall have predeceased the
Participant or die prior to complete distribution of the Participant's
Account Balances, such Participant's Account Balances shall be paid to his
or her surviving spouse or, if the Participant has no surviving spouse, to
the Participant's estate.
7.5 DOUBT AS TO BENEFICIARY. If the Plan Administrator is in
doubt as to a Participant's Beneficiary, the Plan Administrator may
withhold payments under the Plan until the Plan Administrator has resolved
its doubts to its satisfaction.
ARTICLE 8
AMENDMENT AND TERMINATION OF THE PLAN
8.1 TERMINATION OF THE PLAN
(a) BY THE COMPANY. Subject to Section 8.1(b) of this Article 8,
the Company may terminate the Plan in whole or in part at any time and for
any reason without prior notice to or consent of any Participant.
(b) PAYMENT OF ACCOUNT BALANCES FOLLOWING PLAN TERMINATION. Upon
the termination of the Plan prior to a Change in Control, Participants
shall receive their Account Balances in a lump sum or in two (2), three
(3), five (5), ten (10) or fifteen (15) Annual Installments (at the
discretion of the Plan Administrator); provided, however, that if a
Participant is receiving Annual Installments upon termination of the Plan
pursuant to the election of a Payment Method, such Annual Installments
shall continue following termination of the Plan. Upon termination of the
Plan upon or following a Change in Control, Participants shall receive
their Account Balances in a lump sum promptly following the Valuation Date
next following the date of such termination. Termination of the Plan shall
not adversely affect the Account Balances of any Participant or
Beneficiary; provided, however, that neither lump sum payment of Account
Balances nor a reduced number of Annual Installments upon termination of
the Plan shall be deemed such an adverse effect.
8.2 AMENDMENT OF THE PLAN
(a) BY THE COMPANY. Subject to Section 8.2(c) of this Article 8,
the Company may amend or modify the Plan in whole or in part at any time
and for any reason without prior notice to or consent of any Participant or
Beneficiary; provided, however, that, unless a Participant or Beneficiary
who would be affected by such amendment shall have consented thereto, the
Plan may not be amended (i) at the request of a third party who has
indicated an intention or taken steps to effect a Change in Control and who
effectuates a Change in Control, (ii) within six (6) months prior to, or
otherwise in connection with, or in anticipation of, a Change in Control
which has been threatened or proposed and which actually occurs, or (iii)
upon or following a Change in Control.
(b) BY THE PLAN ADMINISTRATOR. Subject to Section 8.2(c) of this
Article 8, prior to a Change in Control, the Plan Administrator may in good
faith amend or modify the Plan to effectuate its intent or to resolve any
discrepancy among the provisions of the Plan or between the Plan and other
documents describing the Plan.
(c) EFFECT OF AMENDMENT. No amendment or modification of the Plan
shall reduce a Participant's Account Balances as of the date of such
amendment or modification.
8.3 EFFECT OF PAYMENT. The full payment of a Participant's
Account Balances shall completely discharge all obligations to a
Participant and his or her Beneficiaries under the Plan.
ARTICLE 9
CLAIMS PROCEDURES
9.1 PRESENTATION OF CLAIM. Any Participant, Beneficiary or other
person (each such person, a "Claimant") may deliver to the Plan
Administrator a written claim for payment from the Plan. All claims must be
made within one hundred eighty (180) days following the date of the
occurrence of the event giving rise to the claim; provided, however, that,
if a claim relates to a notice given by the Company, such claim must be
made within sixty (60) days following receipt of such notice by the
Claimant. The claim must state with particularity the determination desired
by the Claimant.
9.2 NOTIFICATION OF DECISION. The Plan Administrator shall
consider a Claimant's claim, and shall notify the Claimant in writing of
its determination within a reasonable time. Such notice shall set forth (i)
one or more reasons for the grant or denial of the claim or any part of it;
(ii) a description of any additional material or information necessary for
the Claimant to perfect the claim, and an explanation of why such material
or information is necessary; and (iii) an explanation of the claim review
procedure set forth in Section 9.3 of this Article 9.
9.3 REVIEW OF A DENIED CLAIM. Within sixty (60) days after
receiving a notice from the Plan Administrator that a claim has been denied
in whole or in part, a Claimant (or such Claimant's duly authorized
representative) may file with the Plan Administrator a written request for
a review of the denial of the claim. During such sixty-day period, the
Claimant (or the Claimant's duly authorized representative) (i) may review
pertinent documents, (ii) may submit written comments or other documents to
the Plan Administrator and (iii) may request a hearing.
9.4 DECISION ON REVIEW. The Plan Administrator shall render its
decision on review promptly, and not later than sixty (60) days after the
filing of a written request for review of the denial, unless a hearing is
held or other special circumstances require additional time, in which case
the Plan Administrator's decision must be rendered within one hundred
twenty (120) days after such date. Such decision must be written in a
manner calculated to be understood by the Claimant, and it must contain (i)
specific reasons for the decision, (ii) specific reference(s) to the
pertinent Plan provisions upon which the decision was based, and (iii) such
other matters as the Plan Administrator may deem relevant.
9.5 LEGAL ACTION. In making a Deferral Election under the Plan,
each Participant shall be deemed to have agreed that compliance with the
provisions of this Article 9 is a mandatory prerequisite to commencement of
any legal action with respect to any claim for payment under the Plan.
ARTICLE 10
FUNDING
10.1 ESTABLISHMENT OF THE TRUST. The Company shall establish a
Trust in connection with the Plan and may from time to time and in its sole
discretion transfer to the Trust assets with respect to Participants.
10.2 INTERRELATIONSHIP OF THE PLAN AND THE TRUST. The provisions
of the Plan shall govern the rights of a Participant to receive payment of
his or her Account Balances. The provisions of the Trust shall govern the
rights of the Company, the trustee of the Trust, Participants and the
creditors of the Company to the assets held in the Trust.
10.3 DISTRIBUTIONS FROM THE TRUST. The Company's obligations
under the Plan may be satisfied with Trust assets distributed pursuant to
the terms of the Trust, and any such distribution shall reduce the
Company's obligations under the Plan.
ARTICLE 11
MISCELLANEOUS
11.1 STATUS OF PLAN. The Plan is intended to be a plan that is
not qualified (within the meaning of Section 401(a) of the Code) and is not
funded. The Plan shall be administered and interpreted in a manner
consistent with that intent.
11.2 UNSECURED GENERAL CREDITOR. Participants and their
Beneficiaries, heirs, successors and assigns shall have no legal or
equitable rights, interest or claims in any property or assets of the
Company. For purposes of the payment of benefits under the Plan, any and
all of the Company's assets shall be, and remain, the general, unpledged
unrestricted assets of the Company. The Company's obligation under the Plan
shall be merely that of an unfunded and unsecured promise to pay money in
the future.
11.3 ASSETS. This Plan, and the crediting of Deferral Amounts to
Cash Accounts and Stock Unit Accounts hereunder, shall not constitute a
trust and shall be an unsecured contractual obligation of the Company to
the Participants. The obligations of the Company hereunder to any
Participant on any date shall be limited to his or her Account Balances as
of the most recent preceding Valuation Date.
11.4 COMPANY LIABILITY. The Company's liability for the payment
of benefits under the Plan shall be defined only by the Plan. The Company
shall have no obligation to a Participant under the Plan except as
expressly provided herein.
11.5 NONASSIGNABILITY. Neither a Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate
or convey in advance of actual receipt, any amount payable under the Plan.
All amounts payable under the Plan, and all rights to such amounts, are
expressly declared to be unassignable and non-transferable. Except as
provided in Section 11.16 of this Article 11, no part of a Participant's
Account Balances shall, prior to actual payment, be subject to seizure,
attachment, garnishment or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by the Participant or any
other person, be transferable by operation of law in the event of a
Participant's or any other person's bankruptcy or insolvency or be
transferable to a spouse as a result of a property settlement or otherwise.
11.6 NO RIGHT TO CONTINUED SERVICE. The terms and conditions of
the Plan shall not be deemed to establish, constitute or be evidence of a
right of any Participant to remain in service as a member of the Board, or
of a restriction of the right of the Company to discipline or discharge a
Participant at any time in accordance with the Company's customary policies
and procedures.
11.7 FURNISHING INFORMATION. A Participant or his or her
Beneficiary will cooperate with the Plan Administrator by furnishing any
and all information requested by the Plan Administrator and will take such
other action as may be requested in order to facilitate the administration
of the Plan and the payments of benefits hereunder.
11.8 TERMS. Unless the context shall plainly require otherwise,
(i) use of the masculine herein shall be deemed to include the feminine
(and vice versa), (ii) use of the singular shall be deemed to include the
plural (and vice versa) and (iii) use of the conjunctive shall be deemed to
include the disjunctive (and vice versa).
11.9 CAPTIONS. The captions of the articles, sections and
paragraphs of the Plan are for convenience only and shall not control or
affect the meaning or construction of any of its provisions.
11.10 GOVERNING LAW. The provisions of the Plan shall be
construed and interpreted according to the internal laws of the State of
Delaware without regard to its conflicts of laws principles, except to the
extent governed by ERISA.
11.11 NOTICE. Any notice or filing required or permitted to be
given to the Company or the Plan Administrator shall be sufficient if in
writing and sent to the following address by (i) hand, (ii) registered or
certified mail or (iii) facsimile:
The Dial Corporation
Attention: Senior Vice President, Human Resources
15501 North Dial Boulevard
Scottsdale, AZ 85260
(Fax: 602-754-1098)
Such notice shall be deemed given as of the date of receipt by the Company
or the Plan Administrator (whichever may apply). The person sending such
notice or filing shall produce satisfactory evidence of receipt by the
Company upon the request of the Plan Administrator, and, if such person
fails to produce such evidence of receipt, the Plan Administrator may give
effect to such notice or filing as it deems appropriate.
Any notice or filing required or permitted to be given to a Participant
under the Plan shall be sufficient if in writing and hand-delivered, or
sent by first-class mail, to the last known address of the Participant.
11.12 SUCCESSORS. The provisions of the Plan shall bind and inure
to the benefit of the Company and its successors and assigns. The
provisions of the Plan shall bind and inure to Participants and, upon the
death of a Participant, his or her Beneficiaries or estate (whichever may
apply).
11.13 SPOUSE'S INTEREST. The interest in the Plan of a spouse of
a Participant who is not a Beneficiary shall be subject to the terms and
conditions of Article 7. Without limiting the generality of the foregoing
sentence, the spouse of a Participant shall have no interest in the Plan if
such spouse shall predecease such Participant.
11.14 REFORMATION AND SEVERABILITY. In the event that any
provision of the Plan shall be held illegal, invalid or unenforceable for
any reason, the provision shall be reformed to the extent necessary such
that the provision, as reformed, is legal, valid and enforceable. If a
provision of the Plan shall be held illegal, invalid or enforceable and
such reformation is not possible, such provision shall be ineffective to
the extent of such illegality, invalidity or unenforceability without
rendering illegal, invalid or unenforceable the remaining provisions of the
Plan.
11.15 INCOMPETENCE. If the Plan Administrator determines that a
benefit under the Plan is to be paid to a minor, a person declared
incompetent or a person adjudged legally incapable of handling the
disposition of his or her property, the Plan Administrator may direct
payment of such benefit to the guardian, legal representative or other
person having the care and custody of such minor or such incompetent or
incapable person. The Plan Administrator may require proof of minority,
incompetence, incapacity or guardianship, as it may deem appropriate prior
to distribution of such benefit. Any payment of a benefit shall be a
payment for the account of the Participant or the Participant's
Beneficiary, as the case may be, and shall effect a complete discharge of
any liability under the Plan for such payment.
11.16 COURT ORDER. The Plan Administrator is authorized to make
any payments directed by court order in any action in which the Plan, the
Company or the Plan Administrator has been named as a party. Without
limiting the generality of the foregoing sentence, if a court determines
that a spouse or former spouse of a Participant has an interest in the
Participant's Account Balances under the Plan in connection with a property
settlement or otherwise, the Plan Administrator, in its sole discretion,
shall have the right, notwithstanding any election by a Participant of a
Payment Method, immediately to distribute the interest of such spouse or
former spouse in the Participant's Account Balances under the Plan to such
spouse or former spouse.
11.17 DISTRIBUTION IN THE EVENT OF TAXATION. If, for any reason,
all or any portion of a Participant's Account Balances becomes taxable to
the Participant prior to receipt, a Participant may request that the Plan
Administrator distribute that portion of his or her Account Balances that
has become taxable. The granting of such a request shall not be
unreasonably withheld. If the request is granted, the distribution for such
tax liability shall be paid within ninety (90) days of the date the request
is granted.
11.18 TAXES
(a) UPON DEFERRAL. For each Plan Year in respect of which a
Participant makes a Deferral Election, the Company shall withhold (from
amounts other than Deferral Amounts) an amount equal to the employment
taxes on the Deferral Amounts required to be so withheld.
(b) UPON DISTRIBUTION. When Account Balances are distributed to
Participants, the Company shall withhold from such distributions any taxes
required by federal, state or local law to be so withheld.
11.19 INSURANCE. The Company, on its own behalf or on behalf of
the Trust, in its sole discretion may apply for and procure insurance
policies on the lives of Participants, in such amounts and in such forms as
the Trustee may select. The Trust shall be the sole owner and beneficiary
of any such policies. The Participant shall have no interest in any such
policies.
11.20 MAXIMUM NUMBER OF SHARES OF COMMON STOCK AUTHORIZED.
Notwithstanding any other provision of this Plan, no more than 5,000,000
shares of Common Stock may be issued in the aggregate to Participants under
the Plan; and provided, that the number of shares of Common Stock which may
be so issued under the Plan shall be further reduced by the number of
shares of Common Stock authorized for issuance under other plans of the
Company (excluding from such reduction, however, the number of shares of
Common Stock authorized for issuance under other plans of the Company for
which shareholder approval is not required pursuant to subsections (1)-(3)
of New York Stock Exchange Rule 312.03(a)).
11.21 LITIGATION TO ENFORCE RIGHTS AFTER CHANGE IN CONTROL. Upon
or following a Change in Control, litigation in respect of the rights of
Participants and Beneficiaries under the Plan may be commenced as provided
in The Dial Corporation Director Benefits Protection Trust.
11.22 EFFECT OF THE PLAN. The terms and conditions of the Plan
shall supersede the terms and conditions of the Deferred Compensation Plan
for Directors of The Dial Corporation.
IN WITNESS WHEREOF, the Company has caused the Plan to be
executed by its duly authorized representative effective as of this _____
day of ____________, 199_
THE DIAL CORPORATION
-----------------------------
By:
------------------------
Its: ------------------------
APPENDIX A
DEFINITION OF "CHANGE IN CONTROL"
A "Change in Control" shall mean the occurrence, while the Plan
is in effect, of any of the following:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (i) the then
outstanding shares of common stock of the Company (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election
of directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change in Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or
(iv) any acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (c) below; or
(b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of
a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding voting
shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or substantially all
of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company
or such corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or
(d) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
EXHIBIT 5
[LETTERHEAD OF THE DIAL CORPORATION]
November 20, 1998
The Dial Corporation
15501 North Dial Boulevard
Scottsdale, Arizona 85260-1619
RE: Registration Statement on Form S-8 for The Dial Corporation
Amended and Restated Management and Directors Deferred
Compensation Plans (As Amended and Restated Effective January 1,
1999) (the "Plans")
Ladies and Gentlemen:
This opinion is delivered in connection with the registration by The
Dial Corporation, a Delaware corporation (the "Company"), on Form S-8 (the
"Registration Statement"), under the Securities Act of 1933 (the "Act"), as
amended, of 850,000 shares of common stock of the Company, par value $.01
per share (the "Common Stock"), together with the associated preferred
stock purchase rights (the "Rights"), issuable pursuant to the Plans.
In arriving at this opinion, I have examined such corporate
instruments, documents, statements and records of the Company, and I have
examined such statutes and regulations and have conducted such legal
analysis, as I have deemed relevant, necessary and appropriate for the
purposes of this opinion. I have assumed the genuineness of all signatures
and the authenticity of all documents submitted to me as originals, the
conformity to original documents of all the documents submitted to me as
certified or photostatic copies, and the authenticity of the originals of
such latter documents. I also have assumed that any future changes to the
terms and conditions of the Plans will be duly authorized by the Company
and will comply with all applicable laws.
Based on the foregoing, I am of the opinion that the 850,000 shares of
Common Stock to be issued pursuant to the Registration Statement, together
with the associated Rights, have been duly authorized and, when issued and
delivered by the Company in accordance with the terms and conditions of the
Plans, will be validly issued, fully paid and nonassessable securities of
the Company.
I hereby consent to the reference to my name in the Registration
Statement and further consent to the inclusion of this opinion as Exhibit 5
to the Registration Statement. In giving this consent, I do not hereby
admit that I am in the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Securities and
Exchange Commission.
The opinion expressed herein is solely for your benefit in connection
with the Registration Statement and may not be relied on in any manner or
for any purpose by any other person or entity and may not be quoted in
whole or in part without my prior written consent.
Very truly yours,
/s/ Jane E. Owens
Jane E. Owens
Senior Vice President, General Counsel
and Secretary
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of The Dial Corporation on Form S-8 of our report dated January 22, 1998,
appearing in the Annual Report on Form 10-K of The Dial Corporation for the
year ended January 3, 1998.
DELOITTE & TOUCHE LLP
Phoenix, Arizona
November 19, 1998
