of service, was equal to 67% of the participants highest average annual base salary and annual cash bonus over a consecutive three-year period during the last ten years or, if shorter, the
full calendar years of employment. On December 13, 2010, pursuant to authority delegated by the Board, the Compensation Committee amended the Retirement Plan, effective January 1, 2011, by eliminating the inclusion of annual cash bonuses
earned for years subsequent to 2010 in the computation of benefits. As amended, the annual retirement benefit would be the greater of (i) the retirement benefit accrued by the participant at December 31, 2010, based upon eligibility for
vesting and years of service credited at such date, pursuant to the benefit formula in effect at December 31, 2010, or (ii) a full service retirement benefit, if paid in the form of a joint and survivor annuity to a married participant who
retires on reaching age 65 based upon years of service credited at December 31, 2013, equal to 67% of the participants highest average annual base salary over a consecutive three-year period during the ten years ending December 31,
2013 or, if shorter, the full calendar years of employment. The retirement benefit payable to a participant who retires on reaching age 65 with more than five but fewer than 15 years of service will equal the amount produced by the formula set forth
in clause (ii) of the preceding sentence multiplied by a fraction the numerator of which is the number of the participants years of service at December 31, 2013 and the denominator of which is 15, or, if greater, the retirement
benefit accrued at December 31, 2010.
For purposes of the formula, base salary is the amount that would be included in the salary
column of the Summary Compensation Table for the relevant years. For computations involving years when annual cash bonuses are included in the formula for determining the amount of the retirement benefit, the cash bonus is the amount of the cash
bonus earned under the 2005 MIP or predecessor plan or any other annual incentive bonus plan or discretionary annual award that would be included in either the Bonus or
Non-Equity
Incentive Plan Compensation
column of the Summary Compensation Table as earned in respect of the relevant years. The Retirement Plans benefit formula contains a factor which will reduce a married participants benefit payments to the extent that a participant is
older than his or her spouse.
If a participant becomes totally disabled prior to retirement, then for the period of total disability the
participant is treated as earning annual base salary in an amount which is equal to his or her annual base salary at the time of disability, with such base salary amount adjusted annually for inflation. Further, a participants period of
disability will be treated as continued employment for all purposes under the Retirement Plan, including for purposes of determining his or her years of service.
A participant who has terminated employment may start to receive benefits under the Retirement Plan as early as age 55, but the benefit
payable at that time will be reduced to reflect the commencement of benefit payments prior to Normal Retirement Age, which is defined as age 65 with 15 years of service. A participant who terminated employment with us after reaching age 55 and
completing at least 20 years of service, or after reaching age 60 and completing at least 10 years of service, will have a smaller reduction (a reduction equal to 3% of his or her accrued benefit) than a participant who terminated employment prior
to reaching such age or completing such number of years of service (a reduction equal to 6% of his or her accrued benefit), and therefore has a subsidized early retirement benefit. The benefit payable to a participant who retires after Normal
Retirement Age is increased to the greater of (i) the benefit taking into account additional years of service, salary increases and (for years prior to 2011) bonuses paid through the actual date of retirement or (ii) the benefit that is
actuarially equivalent to the lump sum that would have been payable at Normal Retirement Age, such lump sum increased with interest to reflect the passage of time since Normal Retirement Age. For all purposes of the Retirement Plan, a
participants years of service are the number of years, including a fraction thereof, included in the period which starts on the date he or she becomes a participant, and which ends on the date his or her employment with us terminates.
As of December 31, 2017, Mr. Hicks was age 61 and had 15 years of credited service (for the purpose of early retirement
qualification), thus he could have retired and begun to receive a retirement benefit as of that date. If Mr. Hicks had retired on December 31, 2017, the present value of his early retirement benefit would have been $15,247,820. As of
December 31, 2017, Mr. Gorham was age 55 and had 13 years of credited service (for the purpose of early retirement qualification), thus he could have retired and begun to receive a retirement benefit
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