EXHIBIT 10(K)
EXECUTIVE RETIREMENT AGREEMENT
This Executive Retirement Agreement is made this 12th day of March, 1997,
by and between PS Group, Inc., a Delaware corporation (the "Company"), and
Xxxxxxx X. Xxxxxxxxxxxxx, Xx. (the "Executive"), with reference to the following
facts:
A. The Executive has served as Chairman of the Board of the Company
since 1991, and as Chief Executive Officer of the Company since October, 1994.
B. The Executive is not a participant in the Retirement Plan for
Corporate Officers of PS Group, Inc. and Participating Subsidiaries.
C. The Company has previously agreed to accrue an unfunded
retirement benefit for the Executive of Fifty Thousand Dollars ($50,000.00) per
year plus accrued interest thereon (based on the rate paid on one-year U.S.
Treasury Bills as of January 1 of each calendar year) for each year he serves as
Chairman of the Board of the Company.
D. The Company desires further to compensate the Executive for his
services to the Company by augmenting his accrued retirement benefit, and to
clarify the terms and conditions under which such retirement benefit will be
accrued and paid.
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
1. DEFINITIONS
-----------
For purposes of this Agreement, the following terms are defined
as follows:
1.1 "Account" means the account maintained pursuant to Section 2
of this Agreement.
1.2 "Actuarial Equivalent" means a benefit of equivalent value
when computed using the actuarial assumptions in effect at the time of
computation for computing the equivalency of benefits under the Retirement Plan
for Corporate Officers of PS Group, Inc. and Participating Subsidiaries.
1.3 "Beneficiary" means the person or persons designated or
determined pursuant to Section 3.4.
1.4 "Board" means the Board of Directors of the Company, without
the participation of the Executive.
1.5 "Joint and 50% Survivor Annuity" means a annuity payable
monthly for the life of the Executive with a survivor annuity payable monthly
for the life of the spouse of the Executive which is equal to one-half (1/2) of
the amount of the annuity payable during the joint lives of the Executive and
his spouse, which is the Actuarial Equivalent of the balance in the Account on
the Payment Trigger Date, and which is also the Actuarial Equivalent of a single
life annuity for the life of the Executive.
1.6 "Payment Trigger Date" means the later of January 1, 2001,
or the Termination Date.
1.7 "Previously Accrued Amounts" means the unfunded retirement
benefit and interest thereon which accrued on or before December 31, 1996
pursuant to the previous agreement between the Company and the Executive, and
which consists of:
(a) Fifty Thousand Dollars ($50,000.00) per year accrued on
December 31 of each calendar year from 1991 through 1996, inclusive;
(b) Interest accrued during each calendar year from 1992
through 1996, inclusive, at the rate paid on one-year U.S. Treasury Bills as of
January 1 of such calendar year.
1.8 "Termination Date" means the date on which the Executive
ceases to perform services for any reason (including, but not limited to, the
Executive's death, total and permanent disability, or retirement) for the
Company either in the capacity of Chairman of the Board of Directors or in the
capacity of Chief Executive Officer.
2. THE ACCOUNT
-----------
2.1 The Company shall establish and maintain the Account, which
shall be credited with the following amounts:
(a) As of December 31, 1996, the Previously Accrued Amounts;
(b) As of December 31, 1996, the sum of Fifty Thousand
Dollars ($50,000.00);
-2-
(c) As of the last day of each calendar month in calendar
1997, the sum of Eight Thousand Three Hundred Thirty-Three and 33/100 Dollars
($8,333.33), but subject to Section 2.2 if any calendar month includes the
Termination Date;
(d) As of the last day of each calendar month in each
calendar year after 1997, the sum of Four Thousand One Hundred Sixty-Seven
Dollars ($4,167.00), but subject to the provisions of Section 2.2 if any
calendar month includes the Termination Date; and
(e) Interest during each calendar year beginning with 1997
compounded daily at the rate paid on one-year U.S. Treasury Bills as of January
1 of such calendar year; provided, however, that such interest shall cease to
accrue on the Payment Trigger Date.
2.2 For the calendar month which includes the Termination Date,
the full amount specified in Section 2.1(c) or Section 2.1(d), as the case may
be, with respect to such month shall be credited to the Account on the
Termination Date rather than on the last day of such month, and no amounts shall
be credited to the Account under Section 2.1(c) or Section 2.1(d) with respect
to any calendar month after the calendar month which includes the Termination
Date.
2.3 In accordance with the provisions of Section 7, the Account
shall be for bookkeeping purposes only, and the Company shall not be required to
acquire or maintain any investments corresponding to the Account balance.
3. PAYMENT OF BENEFITS
-------------------
Payment of benefits under this Agreement shall commence as soon
as administratively practicable following the Payment Trigger Date in accordance
with the following provisions:
3.1 Unless the Executive elects otherwise at the time and in the
manner set forth in Section 3.3, benefits will be paid: (a) if the Executive is
not married on the Payment Trigger Date, in the form of a single life annuity
payable monthly during the Executive's life which is the Actuarial Equivalent of
the balance in the Account as of the Payment Trigger Date, or (b) if the
Executive is married on the Payment Trigger Date, in the form of a Joint and 50%
Survivor Annuity.
3.2 The Executive may elect, at the time and in the manner
specified in Section 3.3, to receive, in lieu of the applicable form of benefits
set forth in Section 3.1, benefits in one of the following optional forms, each
of which shall be the Actuarial Equivalent of the applicable form of benefit
under Section 3.1:
-3-
(a) A single life annuity payable monthly during the
Executive's life;
(b) A monthly benefit payable during the Executive's life
with the provision that, after the Executive's death, the same monthly benefit
will be continued to the Beneficiary, if such Beneficiary survives the
Executive, during the lifetime of such Beneficiary through the month in which
the Beneficiary dies;
(c) A monthly benefit payable for the life of the Executive;
provided, however, that if the Executive dies before having received one hundred
twenty (120) monthly payments, monthly payments shall be continued to his
Beneficiary for the remainder of the one hundred twenty (120) month certain
period; or
(d) A monthly benefit payable for the life of the Executive;
provided, however, that if the Executive dies before having received two hundred
forty (240) monthly payments, monthly payments shall be continued to his
Beneficiary for the remainder of the two hundred forty (240) month certain
period.
3.3 To be effective, an election of one of the optional forms of
benefit set forth in Section 3.2, or a revocation of such election, must be (a)
in writing in a form acceptable to the Board, (b) signed by the Executive, (c)
timely made, (d) name the Beneficiary (except in the case of a single life
annuity), and (e) fulfill such other requirements as the Company may establish.
To be timely made, an election must be delivered to the Board either (i) at
least one (1) year before the Payment Trigger Date, or (ii) if accompanied by
evidence of the Executive's good health satisfactory to the Board, at any time
before the Payment Trigger Date. Any controversy regarding whether the
Executive is in good health will be resolved by a medical doctor jointly
selected by the Executive and the Board, or if they are unable to agree on a
medical doctor, by a medical doctor selected jointly by the Executive's medical
doctor and a medical doctor selected by the Board. An election pursuant to this
Section 3.3 shall become irrevocable on the Payment Trigger Date, and may not be
rescinded or modified thereafter.
3.4 If the Executive elects one of the alternate forms of
benefit specified in Section 3.2(b), (c), or (d), the Executive shall designate
in writing to the Board one or more persons (a "Beneficiary") to receive
benefits if the Executive dies after the Payment Trigger Date. The Executive
may change the designation of his Beneficiaries at any time by giving written
notice of such change to the Board. The Executive may designate one or more
contingent Beneficiaries to receive benefits in the event of the death of the
Primary Beneficiaries. If, upon the death of the Executive, no designation of a
Beneficiary is effective, or no designated Beneficiary survives, benefit
payments shall be made to the following
-4-
persons in the following order of priority: (a) the Executive's surviving
spouse; (b) the Participant's surviving children, and any descendants of a
deceased child by right of representation; (c) the Executive's surviving
parents; (d) the Executive's surviving brothers and sisters, and the descendants
of any deceased brother or sister by right of representation; and (e) the
executor or administrator of the estate of the Executive. If benefits become
payable to any of the persons specified in clauses (b) through (e) of the
preceding sentence, the Executive's last designated Beneficiary, rather than any
of such persons, shall be the measuring life for determining the amount of
annuity payments.
4. CONFIDENTIAL INFORMATION; FORFEITURE OF BENEFITS
------------------------------------------------
Notwithstanding any other provision of this Agreement to the
contrary, benefits under this Agreement are paid with the understanding that the
Executive does not engage or become involved in any occupation or any activity
or relationship which involves the use or disclosure to others of information or
practices or acquired or learned while employed by the Company or any of its
subsidiaries or parent and which any of them reasonably regards as confidential
or their property or trade secret, or in any other activity detrimental to any
of them. If the Company, after a thorough investigation, finds that the
Executive has violated the provisions of this Section 4, benefits payable
hereunder shall be forfeited. Notwithstanding any other provision of this
Agreement to the contrary, no benefits will be payable under this Agreement if
the Executive confesses to, or is convicted of, an act of fraud, theft or
dishonest amounting to a felony and arising in the course of or in connection
with his employment with the Company or any of its subsidiaries or parent, and,
in such case, all such benefits will be forfeited.
5. RECEIPT OF RELEASES
-------------------
Any payment of benefits under this Agreement shall, to the full
extent thereof, be in full satisfaction of all claims against the Company and
its subsidiaries and parent, and the Company may require the recipient thereof,
as a condition precedent to such payment, to execute a receipt and release to
such effect.
6. ERISA; ADMINISTRATION
---------------------
6.1 This Agreement constitutes a pension benefit plan within the
meaning of Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), which is unfunded and maintained for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees. This Plan constitutes the "summary plan description"
required under ERISA, as well as the governing document of the Plan. The
"administrator" of the Plan, within the meaning of Section 3(16) of ERISA, and
the "named fiduciary" thereof, within the meaning of Section 402 of ERISA, is
the
-5-
Board. Attached hereto as Exhibit "A" is a statement of the Executive's rights
under ERISA. Attached hereto as Exhibit "B" is a statement of the claims
procedure under this Agreement and ERISA.
6.1 The Board, acting as the "administrator" under ERISA, shall
have the full power, authority, and discretion to construe and interpret the
terms and provisions of this Agreement, and to compute and certify to the amount
and form of benefits payable under this Agreement. Any interpretation or
construction of this Agreement by the Board shall be final and binding on all
parties, including, but not limited to, the Executive and any Beneficiary.
7. UNSECURED GENERAL CREDITOR
--------------------------
The Executive and his Beneficiaries, heirs, successors, and
assigns shall have no legal or equitable rights, claims, or interests in any
specific property or assets of the Company. No assets of the Company shall be
held under any trust, or held in any way as collateral security for the
fulfilling of the obligations of the Company under this Agreement. This
Agreement shall not cause any of the Company's assets to be pledged or
restricted. The obligations of the Company under the Agreement shall be merely
that of an unfunded and unsecured promise of the Company to pay money in the
future, and the rights of the Executive and his Beneficiaries shall be no
greater than those of unsecured general creditors. The Company may, but need
not, acquire investments corresponding to the Account hereunder, and it is not
under any obligation to maintain any investment it may make. Any such
investments, if made, shall be in the name of the Company, and shall be its sole
property in which neither the Executive nor any Beneficiary shall have any
interest.
8. RESTRICTION AGAINST ASSIGNMENT
------------------------------
The Company shall pay all amounts payable hereunder only to the
person or persons designated by this Agreement and not to or for any other
person. No part of the Account shall be liable for the debts, contracts, or
engagements of the Executive, any Beneficiary, or successors in interest, nor
shall the Account be subject to execution by levy, attachment, or garnishment or
by any other legal or equitable proceeding, nor shall any such person have any
right to alienate, anticipate, transfer, commute, pledge, encumber, or assign
any benefits or payments hereunder in any manner whatsoever. Any purported
alienation, anticipation, transfer, commutation, pledge, encumbrance, or
assignment shall be void and of no effect. If the Executive, any Beneficiary, or
successor in interest is adjudicated bankrupt, and such person's rights to
distribution or payment under this Agreement are subject to involuntary transfer
or assignment in any such proceeding, the Board may in its discretion cancel
such distribution or payment (or any part thereof) to or for the benefit of the
Executive, such Beneficiary or successor in interest.
-6-
9. WITHHOLDING
-----------
There shall be deducted from each payment to the Executive or a
Beneficiary made under this Agreement all taxes which are required to be
withheld by the Company from such payment. If any taxes, including employment
taxes with respect to the Account, are required to be withheld prior to the time
of payment, the Company may withhold such amounts from other compensation paid
to the Executive.
10. AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION
--------------------------------------------------
The Board may amend, modify, suspend or terminate this Agreement
in whole or in part, except that no amendment, modification, suspension or
termination shall have any retroactive effect to reduce any amounts allocated to
the Account.
11. GOVERNING LAW
-------------
This Agreement shall be construed, governed and administered in
accordance with the laws of the State of California, to the extent such laws are
not preempted by ERISA.
12. PAYMENTS ON BEHALF OF PERSONS UNDER INCAPACITY
----------------------------------------------
In the event that any amount becomes payable under this Agreement
to a person who, in the sole judgment of the Board, is considered by reason of
physical or mental condition to be unable to give a valid receipt or release
therefor, the Board may direct that such payment be made to any person found by
the Board, in its sole judgment, to have assumed the care of such person. Any
payment made pursuant to such determination shall constitute a full release and
discharge of the Board and the Company.
13. NO EMPLOYMENT RIGHTS
--------------------
This Agreement shall not confer upon the Executive any right to
be employed by or serve as a director of the Company or any of its subsidiaries
or parent, or any other right not expressly provided hereunder.
-7-
14. HEADINGS NOT PART OF AGREEMENT
------------------------------
Headings and subheadings in this Agreement are inserted for
convenience of reference only and are not to be considered in the construction
of the provisions hereof.
15. COUNTERPARTS
------------
This Agreement may be executed in two counterparts, each of which
shall constitute an original document but both of which together shall
constitute a single instrument.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date first above written.
The "Company"
PS GROUP, INC.
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxxx X. Xxxxx
Vice President-Finance
The "Executive"
/s/ Xxxxxxx X. Xxxxxxxxxxxxx, Xx.
-----------------------------------------------
Xxxxxxx X. Xxxxxxxxxxxxx, Xx.
-8-
EXHIBIT A
---------
INFORMATION PROVIDED UNDER ERISA. This Executive Retirement Agreement
--------------------------------
constitutes an unfunded Plan of deferred compensation, maintained on a calendar
year basis. The Company is the Plan sponsor, Plan Administrator, and agent for
service of legal process. The Company bears the costs of all benefits under the
Plan.
The Company's address, telephone number, and employer identification number
are as follows:
0000 Xx Xxxxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attn: Xx. Xxxxxxx Xxxxx
Telephone No.: (000) 000-0000
Employer Identification No.: 00-0000000
The Plan number assigned to the Plan is 003.
STATEMENT OF ERISA RIGHTS. A Participant in this Plan is entitled to
-------------------------
certain rights and protections under a federal law known as "ERISA." ERISA
provides that all Plan Participants shall be entitled to examine, without
charge, at the Plan Administrator's office, all Plan documents and the Plan's
annual report. Copies of these documents and other Plan information may also be
obtained upon written request to the Plan Administrator. A reasonable charge
may be made for copies.
In addition to creating rights for plan participants, ERISA imposes duties
upon the people who are responsible for the operation of this Plan. The people
who operate this Plan, called "fiduciaries" of the Plan, have a duty to do so
prudently and in your interest. No one, including your employer or any other
person, may fire you or otherwise discriminate against you in any way to prevent
you from obtaining benefits or exercising your rights under ERISA. If your claim
for benefits is denied in whole or in part, you must receive a written
explanation of the reason for this denial. You have the right to have the Plan
Administrator review and reconsider your claim, as described in Exhibit B to the
letter to which this Exhibit is attached.
Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the Plan and do not receive them within
30 days, you may file a claim in Federal court. In such a case, the court may
require the Plan Administrator to provide the materials and pay you up to $100 a
day until you receive the materials, unless the materials were not sent because
of reasons beyond the control
of the Plan Administrator. If you have a claim for benefits which is denied or
ignored, in whole or in part, you may file a claim in Federal or state court.
If you are discriminated against for asserting your rights, you may seek
assistance from the U.S. Department of Labor, or you may file a lawsuit in
Federal court. The court will decide who should pay the costs and legal fees of
lawsuit. If you are successful, the court may order the person you have sued to
pay these costs and fees. If you lose, the court may order you to pay these
costs and fees, for example, if it finds your claim is frivolous.
If you have any questions about your Plan, you should contact the Plan
Administrator. If you have any questions about this statement or about your
rights under ERISA, you should contact the nearest Area Office of the U.S.
Labor-Management Services Administration, Department of Labor.
-2-
EXHIBIT B
---------
If you believe you are entitled to a benefit under this Agreement, you may
make a claim for such benefit by filing with the Company a written statement
setting forth the amount and type of payment so claimed. The statement shall
also set forth the facts supporting the claim. The claim may be filed by
mailing or delivering it to the Board of Directors of the Company.
Within sixty (60) calendar days after receipt of such a claim, the Board
shall notify you in writing of its action on such claim and if such claim is not
allowed in full, shall state the following in a manner calculated to be
understood by you:
(a) The specific reason or reasons for the denial;
(b) Specific reference to pertinent provisions of this Agreement
on which the denial is based;
(c) A description of any additional material or information
necessary for you to be entitled to the benefits that have been denied and
an explanation of why such material or information is necessary; and
(d) An explanation of this Agreement's claim review procedure.
If you disagree with the action taken by the Board, you or your duly
authorized representative may apply to the Board for a review of such action.
Such application shall be made within one hundred twenty (120) calendar days
after receipt by you of the notice of the Board's action on your claim. The
application for review shall be filed in the same manner as the claim for
benefits. In connection with such review, you may inspect any documents or
records pertinent to the matter and may submit issues and comments in writing to
the Board. A decision by the Board shall be communicated to you within sixty
(60) calendar days after receipt of the application. The decision on review
shall be in writing and shall include specific reasons for the decision, written
in a manner calculated to be understood by you, and specific references to the
pertinent provisions of this Agreement on which the decision is based.
