Exhibit 10.31
April 29, 1996
Mr. N. Xxxxx Xxxxx
00000 Xxxxxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Dear Xx. Xxxxx:
This letter, when countersigned by you, will constitute an
agreement between you and USAir, Inc. ("USAir") concerning
supplemental retirement benefits to be paid to you upon your
retirement from USAir. This agreement has been approved by the
Board of Directors at its meeting on May 21, 1996. USAir hereby
agrees with you as follows:
1. In consideration for your future services between the
date of this letter and the time of your retirement, USAir will
pay to you a supplemental pension benefit equal to the pension
benefit calculated under the benefit formula set forth in the
Retirement Plan for Certain Employees of USAir, Inc. (the
"Retirement Plan") assuming (i) that the Retirement Plan had not
been frozen in 1991, (ii) final average earnings under the
Retirement Plan in an amount based on your actual base salary plus
an assumed bonus in the target amount of 30% of your base salary,
(iii) no amendments to the Retirement Plan after the date hereof,
and (iv) credited service under the Retirement Plan using "deemed
credited service" determined at the rate of one year of credited
service for each actual year of credited service with USAir up to
a maximum of 10 years of credited service; provided, however, that
the supplemental pension benefit is subject to the following
limitation. In the event that all pension benefits payable to you
in the aggregate under any pension plan maintained by USAir for
the purpose of providing retirement income, whether tax-qualified
or non-tax-qualified (and including the supplemental pension
benefit provided hereunder), exceed in the aggregate the benefit
which would have been payable to you under the benefit formula set
forth in the Retirement Plan assuming (i) that the Retirement Plan
had not been frozen in 1991, (ii) final average earnings under the
Retirement Plan in an amount based on your actual base salary plus
an assumed bonus in the target amount of 30% of your base salary,
(iii) no amendments to the Retirement Plan after the date hereof,
and (iv) 30 years of credited service under the Retirement Plan,
then the supplemental pension benefit payable hereunder shall be
reduced, but not below zero, until such aggregate limitation is no
longer exceeded. You will become immediately vested in your
accrued supplemental pension benefit as each full year of credited
service is completed.
2. For purposes of calculating the supplemental pension
benefit under paragraph 1 above, the following rules will apply:
(a) In determining the amount of the pension benefit
calculated under the benefit formula set forth in
the Retirement Plan it shall be assumed that the
limitations imposed by Sections 401(a)(17) and 415
of the Internal Revenue Code of 1986, as amended,
are not applicable.
(b) In determining the amount of the pension benefit
payable in the aggregate under any defined
contribution pension plans, the benefit shall only
be included to the extent that it is attributable to
contributions made by USAir (including earnings
attributable to such contributions) and any portion
of the benefit payable under such defined
contribution pension plans attributable to your own
contributions (including earnings attributable to
such contributions) shall be excluded.
(c) In determining the amount of the pension benefit
payable under any defined contribution pension
plans, any benefit payable in the form of a lump
sum, shall be converted to a single life annuity for
purposes of calculating the benefit payable
thereunder.
(d) In determining the amount of your supplemental
benefit hereunder, the reduction factors, actuarial
assumptions, definitions, administrative provisions
and other applicable provisions of the Retirement
Plan will control.
3. The amount of supplemental pension benefit calculated
pursuant to paragraph 1 will be payable in the event of your
normal retirement from USAir at age 65. You may elect to receive
early retirement benefits under this agreement at any time after
termination of your employment with USAir and upon your attainment
of age 55. In the event of your early retirement from USAir, the
supplemental pension benefit calculated pursuant to paragraph 1
will be reduced for early commencement in accordance with the
early retirement reduction factors set forth in the Retirement
Plan.
4. You may elect to receive your supplemental pension
benefit in any of the following payment forms:
(a) an annuity (single life or joint and survivor) payable
from the general assets of USAir;
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(b) any one of the optional payment forms provided for
under the terms of the Retirement Plan; or
(c) a single lump sum payment.
In the event that you select an option other than option (a), the
cost of providing such optional payment form must be cost-neutral
to USAir to providing payment option (a) and actuarial
equivalencies will be determined in accordance with the terms of
the Retirement Plan, or if no such provision is included in the
Retirement Plan, determined at USAir's sole discretion.
5. In the event of your death prior to the payment of your
supplemental pension benefit, your surviving spouse will be
entitled to a benefit hereunder equal to 50 percent of the benefit
which would have been payable had you retired and commenced
benefits on the day before your death. In the event of your death
prior to the payment of your supplemental pension benefit and you
have no surviving spouse, USAir will have no payment obligation
under this agreement. In the event of your death after the
commencement of benefits hereunder, a death benefit will be
payable only if applicable pursuant to the payment form elected
under paragraph 4.
6. Notwithstanding anything in this agreement to the
contrary, your supplemental pension benefit will immediately vest
and you will be entitled to a benefit under paragraph 1 assuming
10 years of deemed credited service if you resign for "good
reason" or your employment is terminated after a "change-of-
control." For purposes of this paragraph the terms "good reason"
and "change-of-control" shall have the definitions set forth in
the severance agreement between you and USAir dated April 29,
1996.
7. Your benefits hereunder shall be accrued, but unfunded
and unsecured.
8. This letter may be amended or supplemented at the request
of either party hereto to clarify its application with
respect to any future pension plan which USAir may adopt
replacing or supplementing its existing plans. Any such
amendment or supplement will be prepared on the basis of
the intent of the parties that USAir is seeking to
provide you with supplemental pension benefits as
determined in paragraph 1 above.
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If you concur in the foregoing, please indicate your
agreement by signing a copy of this letter in the space provided
below.
US AIR, INC.
/s/ Xxxxxxxx X. Xxxxx
-------------------------
Xxxxxxxx X. Xxxxx
Vice President, Deputy General
Counsel and Secretary
Agreed:
/s/ N. Xxxxx Xxxxx
---------------------------
N. Xxxxx Xxxxx
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