Limitation to Non-Employee Directors. Only Directors who are not employed by the Company or a Majority-Owned Related Company shall be eligible for the Plan.
Date of Eligibility. Directors who are on the Board as of January 1, 2020 shall be eligible to participate. Thereafter, a new Director shall be eligible as of the date he or she is appointed or elected to the Board.
Accounts; Mandatory Annual Transfer. Each Participant shall have an AC Account administered in his or her name. Such AC Account shall be a bookkeeping entry only and no Stock or other assets shall be placed in the Participant’s name. On December 31 of each year, all Share Units credited to a Participant’s AC Account pursuant to Section 3.3 automatically shall be transferred to that Participant’s DC Account.
Cash Payment. Unless the Participant has elected to defer all or a portion of the Cash Payment into Share Units in accordance with Article IV of this Plan, (a) the Participant will be paid $90,000 annually for service on the Board (the “Director Payment”), payable in equal quarterly installments, and prorated for partial years of service as set forth in Section 3.4, as applicable; (b) the Chair of the Audit Committee of the Board of Directors shall be paid an additional $30,000 annually for service as the Chair of the Audit Committee; (c) the Chair of the Compensation and Talent Committee of the Board of Directors shall be paid an additional $25,000 annually for service as the Chair of the Compensation; (d) the Chairs of each other committee of the Board of Directors shall be paid an additional $20,000 annually for service as a committee Chair (the Chair payments referred to in (b), (c) and (d) of Section 3.2 are collectively referred to herein as the “Chair Payment” and shall be payable in equal quarterly installments, and prorated for partial years of service as set forth in Section 3.4, as applicable); and (e) the Lead Independent Director of the Board of Directors shall be paid an additional $30,000 annually for service as Lead Independent Director (the “LID Payment”, and together with the Director Payment and the Chair Payment, the “Cash Payment”), payable in equal quarterly installments, and prorated for partial years of service as set forth in Section 3.4, as applicable. For the avoidance of doubt, in the event a Participant is a Chair of a
Crediting of Share Units. On the Calculation Date, each Participant’s AC Account shall be credited with Share Units, provided that any Participant that becomes eligible for the Plan after January 1 in a particular year, shall be credited Share Units in accordance with Section 3.4. The value of such Share Units for 2020 shall be $200,000 and may be adjusted in subsequent years by the Board of Directors (the “Dollar Amount”). The number of Share Units credited to each Participant shall be determined by dividing the Dollar Amount by the average of the high and low price of Stock on the New York Stock Exchange Composite Transactions listing on the Calculation Date.
New Directors/Committee Chairs Appointed or Elected During the Year.
With respect to the Director Payment, if a Participant becomes eligible for the Plan after January 1 in a particular year, the Director Payment shall be prorated for the number of regularly-scheduled Board meetings remaining in the year (which shall include the meeting at which the Director was appointed or elected, if such meeting is a regularly-scheduled meeting), as illustrated in the table below. Such Director Payment shall be payable in equal installments in accordance with the payment schedule set forth in Section 3.2.
Meeting at which Director is Appointed or Elected / Appointed Chair/Lead Independent Director
Percentage of applicable Cash Payment to be paid
If a Participant becomes eligible for the Plan after January 1 in a particular year, his or her AC Account shall be credited with Share Units equal to the number of Share Units calculated on the Calculation Date for the year pursuant to Section 3.3, prorated for the number of regularly-scheduled Board meetings remaining in the year (which shall include the meeting at which the Director was appointed or elected, if such meeting is a regularly-scheduled meeting). Such Share Units shall be posted to a new Participant’s AC Account as of the date such Participant
Meeting at which Director is Elected
Percentage of Share Units credited
Establishment of DC Accounts. The Company shall establish a DC Account for each Participant. Such DC Account shall be a bookkeeping entry only and no Stock or other assets shall be placed in the Participant’s name. All eligible compensation, as described in Section 4.2, that a Participant elects to defer in accordance with this Article IV shall be credited to that Participant’s DC Account in the manner set forth in this Article IV. In addition, on December 31 of each year, all compensation credited to a Participant’s AC Account pursuant to Section 3.3 automatically shall be transferred to that Participant’s DC Account.
Eligible Compensation. A Participant may elect to defer all or a specified percentage (from 10% - 100%) of the annual Cash Payment (including the Director Payment, the Chair Payment and/or the LID Payment) receivable by such Director under the Plan. No other compensation or expense reimbursement shall be eligible for voluntary deferral.
Elections to Defer. Participants must elect to defer eligible Cash Payments under the following provisions. Elections shall be in writing on forms or via electronic format as determined by the Secretary of the Company. The election shall specify the applicable percentage to be deferred.
Annual Cash Payments. If a Participant wishes to defer all or a portion of his or her annual Cash Payment, he or she must elect a percentage to defer, from 10% - 100%, no later than December 31 prior to the beginning of the year for which the Cash Payment is earned. This election is irrevocable for all amounts paid for the calendar year.
New Directors. A new Director appointed or elected to the Board during the calendar year shall not be eligible to defer the Cash Payment that is payable through the end of that first calendar year of service.
Duration of Elections. If an election is made to defer with respect to the annual Cash Payment, the election shall continue in effect until the end of the Participant’s service as a Director or until the end of the calendar year during which the Director gives the Company written notice of the discontinuance of the election. Such a notice of discontinuance shall operate prospectively from the first day of the
Elections and Forms of Payment.
Forms of Payment. All payments under the Plan shall be in cash. A Participant may elect to receive payments in a single lump sum or in a series of annual installments (not to exceed five). If a Participant fails to make an election in accordance with this Section 4.4, the balance in the Participant’s DC Account upon the Participant’s termination of service with the Company shall be paid in the form of a lump sum, unless otherwise provided in this Section 4.4. In the event of death or a Change in Control, all payments shall be made in the form of a lump sum payment.
Payment Distribution Election Under Prior Plans. All elections made under the Prior Plans regarding the form of payment distribution for compensation awarded to a Participant prior to the Effective Date cannot be changed with respect to such compensation. Any elections made under the Prior Plans also shall apply to all compensation awarded under the Plan, unless the Participant makes a new form of payment distribution election in accordance with Section 4.4(c).
Payment Distribution Election Under the Plan. A Participant may make a different election for future compensation under the Plan. An individual who becomes a Director during the calendar year must make an initial election within 30 days of his or her appointment or election to the Board. Once a Participant makes an election under the Plan, it shall apply to all future compensation awarded to the Participant under the Plan unless a new election is made by December 31 of the year prior to the time the compensation is paid.
Deferral of Cash Payments; Crediting of Share Units. If a Participant has elected to defer the Cash Payment (or any portion thereof) pursuant to Section 4.3, the amount elected shall be added to the Share Units awarded to such Participant pursuant to Section 3.3 on the Calculation Date and credited to the Participant’s DC Account. Such amount shall be converted on the Calculation Date to a number of Share Units equal to the number of shares of Stock that theoretically could have been purchased on such date with such amount, using the average share price on the New York Stock Exchange Composite Transactions listing on such date, or if such date is not a trading day, on the next trading day.
Hypothetical Dividends. As of each date on which dividends on the Stock are payable to shareowners of the Company, each Participant’s AC Account and DC Account shall be credited with the value of the dividends that would be payable on Share Units in such accounts if they were shares of Stock (not taking into account the record date). These hypothetical dividends shall be converted to Share Units using the average of the high and low price of Stock on the New York Stock Exchange Composite Transactions listing
Stock Split; Stock Dividend. Each Participant’s AC Account and DC Account shall be credited on the date of any stock split or stock dividend, with the number of Share Units necessary for an equitable adjustment.
Permitted Payment Events. Payment of accounts under the Plan shall not be made except following death, disability, termination of service from the Board, or upon a Change in Control. Payments shall not be accelerated, except as permitted by Section 409A of the Code and the regulations thereunder.
Payment of Account Balance. Upon a Participant’s separation of service as a Director of the Company, all Share Units in the Participant’s AC Account that have been earned for such year, as calculated pursuant to Section 6.4, shall be transferred to that Participant’s DC Account.
Lump Sum Payment. Except in the case of death, the value of the Participant’s DC Account shall be paid on the Payment Date. In the event of a Participant’s death, the value of the Participant’s DC Account shall be paid to the Participant’s Beneficiary as soon as possible, but no later than 60 days following the date of death.
Installment Payments Election. If the Participant has elected to receive payment of the Participant’s DC Account balance in the form of annual installments in accordance with Section 4.4, the amount of each such payment shall be computed as provided in this Section 6.2(b). The amount of the first payment shall be a fraction of the balance in the Participant’s DC Account as of December 31 of the year preceding such payment, the numerator of which is one and the denominator of which is the total number of installments elected. The amount of each subsequent payment shall be a fraction of the balance in the Participant’s DC Account as of December 31 of the year preceding each subsequent payment, the numerator of which is one and the denominator of which is the total number of installments elected minus the number of installments previously paid.
Valuation of Account Balance. Except in the case of a Director’s separation of service from the Company due to death or a Change in Control, the balance in the Participant’s DC Account in Share Units shall be valued in an amount equal to the number of Share Units in the Participant’s DC Account multiplied by the average of the high and low market prices at which a share of Stock shall have been sold on the Valuation Date, as reported on the New York Stock Exchange Composite Transactions listing. In the event of separation due to death or a Director or a Change in Control, the value of the balance of Share Units in the Participant’s DC Account shall be calculated in the same manner as set forth above in this Section 6.3, except that the Valuation Date for such purposes shall be the date of death of the Director or the date of the Change in Control, as the case may be.
Separation During the Year; Proration of Annual Compensation. In the event of a Director’s separation of service from the Company during the calendar year, the quarterly Cash Payment shall be retained for any portion of a calendar quarter during which such Participant served as a Director.
Meetings Prior to Director’s Separation
Percentage of Share Units Retained
Unforseeable Emergency. A Participant shall be permitted to elect a distribution from his or her DC Account prior to the date the DC Accounts were to be distributed, subject to the following restrictions:
the election to take a distribution due to an Unforeseeable Emergency shall be made by requesting such a distribution in writing to the Committee, including the amount requested and a description of the need for the distribution;
the Committee shall make a determination, in its sole discretion, that the requested distribution is on account of an Unforseeable Emergency; and
the Unforseeable Emergency cannot be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participant's assets, to the extent the liquidation of assets would not itself cause severe financial hardship, or (iii) by cessation of deferrals under this Plan.
Administration of the Plan. The Committee shall oversee the administration of the Plan. The Committee has the exclusive responsibility and complete discretionary authority to control the operation and administration of the Plan, with all powers necessary to enable it to properly carry out such responsibility, including but not limited to the power to
Amendment and Termination of the Plan. The Board may amend, modify, suspend or terminate the Plan in whole or in part, except that no amendment, modification, suspension or termination may retroactively adversely affect any Participant’s right to a benefit which has been earned under the Plan before such date.
Controlling Law. This Plan shall be subject to the laws of the State of Georgia, and the parties agree that all disputes arising from or related to this Plan shall be litigated in the state or federal courts located in Fulton County, Georgia. The parties agree that such courts shall be the exclusive forum for such disputes and hereby submit to the jurisdiction and venue of such courts for the litigation of all such disputes. The parties hereby waive any claims of improper venue or lack of personal or subject matter jurisdiction as to any such disputes.
Limitation of Responsibility. Neither the establishment of this Plan nor any modification thereof, nor the creation of any AC Account or DC Account, nor the payment of any benefits, shall be construed as giving to any Participant or other person any legal or equitable right against the Company, or its subsidiaries, or any officer or employee thereof; and in no event shall the terms of any Director’s Board appointment be modified or in any way affected thereby.
Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal or equitable rights, claims, or interest in any specific property or assets of the Company. No assets of the Company shall be held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan. The Company's obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Company to pay money in the future, and the rights of the Participants and Beneficiaries shall be no greater than those of unsecured general creditors. Nothing contained in this Plan, and no actions taken pursuant to the provisions of this Plan shall create or be construed to create a trust or any kind of fiduciary relationship between the Company and any Participant, Beneficiary, or any other person.
Taxes. Federal, state, FICA/Medicare and all other taxes shall be solely the responsibility of the Participant. The Company will report all payments as required by the Internal Revenue Code or other tax regulations and withhold any applicable taxes where required.