Exhibit 10.23
January 22, 1996
Xx. Xxxxxxx X. Xxxx
Chairman and Chief Executive Officer
USAir, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Dear 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 January 16, 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 which is the difference of
subparagraph (a) minus subparagraph (b), where (a) and (b) are:
(a) 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 the amount of $1 million, (iii) no amendments to
the Retirement Plan after the date hereof, and (iv) credited
service under the Retirement Plan using "deemed credited service"
determined under the following schedule:
Retirement Date Deemed Credited Service
------------------------ -----------------------------
01/22/96 through 01/21/97 7.5 years of credited service
01/22/97 through 01/21/98 15 years of credited service
01/22/98 through 01/21/99 22.5 years of credited service
01/22/99 or later 30 years of credited service
(b) all pension benefits payable to you in the aggregate
under any defined contribution pension plan maintained by USAir for
the purpose of providing retirement income, whether tax-qualified
or non-tax-qualified (the "Defined Contribution Pension Plans").
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January 22, 1996
2. For purposes of calculating the supplemental benefits
under paragraph 1 above, the following rules will be applied:
(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 the 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 the Defined Contribution Pension Plans, any benefit payable
in the form of a lump sum, shall be converted to an annuity for
purposes of calculating the benefit to be offset by subparagraph
1(b).
(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
benefits (determined in accordance with paragraphs 1 and 6 hereof)
in one of the following payment forms:
(a) an annuity (single life or joint and survivor) payable
from the general assets of USAir;
(b) a single lump sum payment;
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January 22, 1996
(c) periodic installment payments; or
(d) an annuity (single life or joint and survivor) purchased
by USAir from an annuity provider and assigned to you.
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). Specifically,
USAir will base the calculation of any optional payment form on the
basis of a purchase price equivalent to the present value of the
promised annual benefit based on the Xxxxx'x XX corporate bond
interest rate, which may result in an annuity payment which is less
than the annual benefit calculated under the formula.
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 there
is 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 optional 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 30
years of deemed credited service: (a) if USAir terminates your
employment other than for "cause," (b) you resign for "good
reason," or (c) in the event of a "change-of-control." For
purposes of this paragraph the terms "cause," "good reason" and
"change-of-control" shall have the definitions set forth in the
employment agreement between you and USAir dated January 22, 1996.
7. Prior to the termination of your employment, 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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Xx. Xxxxxxx X. Xxxx
January 22, 1996
If you concur in the foregoing, please indicate your agreement
by signing a copy of this letter in the space provided below.
USAIR, INC.
/s/Xxxxxxxx X. Xxxxx
______________________________
Xxxxxxxx X. Xxxxx
Vice President, Deputy General
Counsel and Secretary
Agreed:
/s/Xxxxxxx X. Xxxx
_____________________________
