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EXHIBIT 10.7
NATIONAL FUEL GAS COMPANY
DEFERRED COMPENSATION PLAN
As amended effective June 16, 1989,
December 15, 1989,
June 16, 1993,
August 1, 1993
and May 1, 1994
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NATIONAL FUEL GAS COMPANY
DEFERRED COMPENSATION PLAN
Table of Contents
Page
Purpose . . . . . . . . . . . . . . . . . . . . . . . . . 1
Article 1 - Definitions
1.1 Account . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Base Salary . . . . . . . . . . . . . . . . . . . . 2
1.3 Beneficiary . . . . . . . . . . . . . . . . . . . . 2
1.4 Committee . . . . . . . . . . . . . . . . . . . . . 2
1.5 Company . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Deferral Agreement . . . . . . . . . . . . . . . . 2
1.7 Deferral Amount . . . . . . . . . . . . . . . . . . 2
1.8 Deferral Period . . . . . . . . . . . . . . . . . . 3
1.9 Employer . . . . . . . . . . . . . . . . . . . . . 3
1.10 Index . . . . . . . . . . . . . . . . . . . . . . . 3
1.11 Moody's Election. . . . . . . . . . . . . . . . . . 3
1.12 Participant . . . . . . . . . . . . . . . . . . . . 3
1.13 Plan . . . . . . . . . . . . . . . . . . . . . . . 3
1.14 Plan Year . . . . . . . . . . . . . . . . . . . . . 3
1.15 Retirement and Retire . . . . . . . . . . . . . . . 3
1.16 Retirement Benefit Date . . . . . . . . . . . . . . 3
1.17 S&P 500 . . . . . . . . . . . . . . . . . . . . . . 4
1.18 S&P 500 Minus 1.2% Election . . . . . . . . . . . . 4
1.19 Termination of Employment . . . . . . . . . . . . . 4
1.20 Maximum Matching Contribution Percentage . . . . . 4
1.21 TDSP . . . . . . . . . . . . . . . . . . . . . . . 4
Article 2 - Eligibility
2.1 Selection . . . . . . . . . . . . . . . . . . . . . 5
2.2 Deferral Agreement of Participant . . . . . . . . . 5
Article 3 - Deferral Commitments
3.1 Minimum Deferral . . . . . . . . . . . . . . . . . 6
3.2 Maximum Deferral . . . . . . . . . . . . . . . . . 6
3.3 Withholding of Deferral Amounts . . . . . . . . . . 6
3.4 Commitments as Percentage of Salary . . . . . . . . 6
Article 4 - Deferral Crediting Rates Accounts
4.1 Basic Interest Rate . . . . . . . . . . . . . . . . 7
4.2 Supplemental Interest Rate . . . . . . . . . . . . 7
4.3 Available Accounts . . . . . . . . . . . . . . . . 7
4.4 Crediting of Deferrals and Interest . . . . . . . . 7
4.5 Account Statements . . . . . . . . . . . . . . . . 8
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NATIONAL FUEL GAS COMPANY
DEFERRED COMPENSATION PLAN
Table of Contents
Page
Article 5 - Savings Account
5.1 Definition . . . . . . . . . . . . . . . . . . . . 9
5.2 Four Year Minimum . . . . . . . . . . . . . . . . . 9
5.3 Distribution of Savings Account . . . . . . . . . . 9
5.4 Elections within Savings Account. . . . . . . . . . 9
Article 6 - Retirement
6.1 Definition . . . . . . . . . . . . . . . . . . . . 10
6.2 Retirement Benefit . . . . . . . . . . . . . . . . 10
6.3 Forms of Annuity . . . . . . . . . . . . . . . . . 10
6.4 Determination of Annuity . . . . . . . . . . . . . 10
6.5 Death Prior to Completion of Retirement Benefits . 10
6.6 Elections within Retirement Account . . . . . . . . 11
Article 7 - Termination
7.1 Termination . . . . . . . . . . . . . . . . . . . . 12
7.2 Death . . . . . . . . . . . . . . . . . . . . . . . 12
Article 8 - Beneficiary Designation
8.1 Beneficiary Designation . . . . . . . . . . . . . . 13
8.2 Change of Beneficiary Designation . . . . . . . . . 13
8.3 No Beneficiary Designation . . . . . . . . . . . . 13
8.4 Effect of Payment . . . . . . . . . . . . . . . . . 13
Article 9 - Other Benefits and Agreements
9.1 Coordination With Other Benefits . . . . . . . . . 14
9.2 Restoration of Benefits-Tophats . . . . . . . . . . 14
Article 10 - Termination and Modification
10.1 Termination and Amendment . . . . . . . . . . . . . 17
10.2 Change in Interest Rate . . . . . . . . . . . . . . 17
10.3 Limited Power of President to Amend Plan . . . . . 17
Article 11 - Administration
11.1 Committee Duties . . . . . . . . . . . . . . . . . 18
11.2 Agents . . . . . . . . . . . . . . . . . . . . . . 18
11.3 Binding Effect of Decisions . . . . . . . . . . . . 18
11.4 Indemnity of Committee . . . . . . . . . . . . . . 18
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NATIONAL FUEL GAS COMPANY
DEFERRED COMPENSATION PLAN
Table of Contents
Page
Article 12 - Miscellaneous
12.1 Unsecured General Creditor . . . . . . . . . . . . 19
12.2 Nonassignability . . . . . . . . . . . . . . . . . 19
12.3 Not a Contract of Employment . . . . . . . . . . . 19
12.4 Health Information . . . . . . . . . . . . . . . . 19
12.5 Governing Law . . . . . . . . . . . . . . . . . . . 20
12.6 Withholding . . . . . . . . . . . . . . . . . . . . 20
12.7 Binding Effect . . . . . . . . . . . . . . . . . . 20
12.8 Borrowing . . . . . . . . . . . . . . . . . . . . . 20
12.9 Validity . . . . . . . . . . . . . . . . . . . . . 20
12.10 Incapacity of Person Entitled to Payment . . . . . 20
12.11 Captions . . . . . . . . . . . . . . . . . . . . . 20
12.12 Construction . . . . . . . . . . . . . . . . . . . 20
<PAGE 5>
NATIONAL FUEL GAS COMPANY
DEFERRED COMPENSATION PLAN
Purpose
The primary purposes of the National Fuel Gas Company Deferred
Compensation Plan ("Plan") are to help attract and retain high caliber
employees in high-level management positions, and to provide such employees
with a tax-favored vehicle to accumulate assets and to enhance retirement
benefits. Selected executives of National Fuel Gas Company and its
subsidiaries and certain other select management and highly compensated
employees will be allowed to participate in the Plan.
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Article I
Definitions
For purposes hereof, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:
1.1 "Account" shall mean an individual account maintained on behalf of a
Participant under the Plan. Accounts shall be utilized solely as
recordkeeping devices for the measurement and determination of the
amounts to be paid to the Participant pursuant to this Plan. Separate
Accounts may be maintained respecting separate Deferral Periods. A
Participant's Accounts shall not constitute or be treated as trust
funds or in other respects as the property of the Participants for
which they are maintained.
1.2 "Base Salary" shall mean gross cash compensation per regular payroll
period, including salary continuation payments made by an Employer on
account of sickness or accident, which are paid to a Participant for
employment services rendered to an Employer, before reduction for
compensation deferred pursuant to this Plan or pursuant to the
National Fuel Gas Company Tax-Deferred Savings Plan for Non-Union
Employees, and shall also include payments made to a participant
pursuant to the Company's Annual At Risk Compensation Incentive
Program, or a successor plan thereto, but shall exclude all other
fees, commissions, special, extra or nonperiodic compensation in any
form.
1.3 "Beneficiary" shall mean the person, persons, or entity designated by
the Participant to receive any benefits payable under this Plan upon
the death of a Participant.
1.4 "Committee" shall mean the committee appointed to manage and
administer the Plan in accordance with its provisions pursuant to
Article 11.
1.5 "Company" shall mean National Fuel Gas Company and all successor
companies thereto.
1.6 "Deferral Agreement" shall mean the form of written agreement, as
amended from time to time, which is entered into by and between an
Employer and a Participant, respecting each Deferral Period prior to
the commencement thereof.
1.7 "Deferral Amount" shall mean the amount of Base Salary deferred by a
Participant with respect to a Deferral Period pursuant to his election
in the form of a Deferral Agreement.
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1.8 "Deferral Period" shall mean the period established from time to time
by the Company during which amounts of Base Salary may be deferred by
means of the deferral election of the Participant as set forth in the
Participant's Deferral Agreement. The first Deferral Period consisted
of four Plan Years beginning August 1, 1986. The Company, by action
of or pursuant to the authorization of its Board of Directors, may
from time to time establish subsequent Deferral Periods and set forth
the particular terms and conditions therefor. Each cycle is a
Deferral Period.
1.9 "Employer" shall mean the Company and each of its subsidiaries which
has one or more eligible employees who have been selected to
participate in the Plan. Where the context dictates, the term
"Employer" as used herein refers to the particular Employer that has
entered into a Deferral Agreement with a specific Participant.
1.10 "Moody's Index" shall mean the Moody's Composite Average of Yields on
Corporate Bonds, an economic indicator prepared and published by
Moody's Investors Service, Inc., which is an arithmetic average of
yields on representative bonds: industrials, public utilities, Aaa,
Aa, A and Baa, as it shall be constituted from time to time, or some
other index as selected by the Committee which shall be reasonably
similar or reasonably reflective of long-term corporate bond yields.
1.11 "Moody's Election" shall mean the election by a Participant,
respecting Cycle III-A (which has a Deferral Period of May 1, 1994
through July 31, 1997) and subsequent cycles, to earn a return on his
Deferral Amounts, on a semimonthly basis, equal to the semimonthly
equivalent of the Basic Interest Rate in accordance with Sections 4.1
and 4.4(b), which return shall be compounded.
1.12 "Participants" shall mean those persons currently or formerly in the
regular full-time employment of an Employer, who were made eligible to
defer compensation under the Plan by the President of the Company, who
have deferred compensation under the Plan, and whose Accounts have not
been completely distributed to them.
1.13 "Plan" shall mean the National Fuel Gas Company Deferred Compensation
Plan, as amended from time to time.
1.14 "Plan Year" shall mean the 12 consecutive month period commencing on
August 1 and ending on the next following July 31.
1.15 "Retirement" and "Retire" shall mean severance from employment with
the Employer at or after the attainment of age fifty-five (55), or
prior thereto pursuant to the disability retirement provisions of the
National Fuel Gas Company Retirement Plan ("Retirement Plan").
1.16 "Retirement Benefit Date" shall mean the date at which the Retired
Participant has commenced retirement under the Retirement Plan or a
successor plan thereto; i.e., the date as of which he first receives
retirement benefits.
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1.17 "S&P 500" shall mean the Standard & Poors 500 stock index, an index of
American stocks published by Standard and Poors Inc., or some other
index as selected by the Committee which shall be reasonably similar
to or reasonably reflective of the performance of the American stock
market.
1.18 "S&P 500 Minus 1.2% Election" shall mean the election by a
Participant, respecting Cycle III-A and subsequent cycles, to earn a
return on his Deferral Amounts, on a semimonthly basis, equal to the
semimonthly return of the S&P 500 (including reinvestment of
dividends), minus .045%, which when compounded will provide a total
return approximately equal to the total annual return of the S&P 500,
minus 1.2%, from time to time. A Participant making this election
shall, beginning six months before his Retirement (if he retires),
cease earning a return on the above basis. Instead, for such
six-month period, he shall earn a return as if he had then made the
Moody's Election.
1.19 "Termination of Employment" shall mean the cessation of employment
with the Company, voluntarily or involuntarily, for any reason other
than Retirement.
1.20 "Maximum Matching Contribution Percentage" shall mean the maximum
employer matching contribution percentage to which a Participant would
be entitled under Section 3.05 (or successor section) of the TDSP.
1.21 "TDSP" shall mean the National Fuel Gas Company Tax-Deferred Savings
Plan for Non-Union Employees, as it may be amended from time to time.
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Article 2
Eligibility
2.1 Selection. The President of the Company shall have the sole
discretion to determine the management and highly compensated
employees of an Employer who are eligible to become Participants in
the Plan with respect to each Deferral Period, subject to any
restrictions the Company's Board of Directors may impose. The
President shall be eligible to be a Participant in the Plan for each
Deferral Period during which he is President of the Company.
2.2 Deferral Agreement of Participant. As a condition of deferral of
compensation with respect to each Plan Deferral Period, each
Participant shall complete, execute and return to the Employer a
Deferral Agreement by the enrollment deadline respecting each Deferral
Period.
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Article 3
Deferral Commitments
3.1 Minimum Deferral. The Participant must agree to defer no less than
$10,000 over the Deferral Period as a condition of Plan participation
respecting that Deferral period, or such other minimum as may be
established from time to time.
3.2 Maximum Deferral. The Participant may defer no more than 60% of Base
Salary in any Plan Year, or such other maximum as may be established
from time to time.
3.3 Withholding of Deferral Amounts. The percentage of Base Salary
deferred by a Participant pursuant to his Deferral Agreement shall be
withheld over the Deferral Period in which he participates in the
manner set forth in the Deferral Agreement of the Participant.
3.4 Commitments as Percentage of Salary. A Participant's deferral
commitment respecting each Deferral Period, and each deferral
commitment to his Savings Account or Retirement Account, must be
expressed as a whole percentage of his Base Salary. A Participant
shall, prior to the Deferral Period, make his commitment (if any) for
all or part of the Deferral Period, at varying percentages, provided
that those percentages shall be constant for each 6-month period
beginning August 1 and February 1 (unless shorter periods are from
time to time authorized). If, within any such six months (or shorter
authorized period), a Participant's Base Salary changes, such change
shall not be reflected in the amount of his deferral until the next
February 1 or August 1.
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Article 4
Deferral Crediting Rates and Accounts
4.1 Basic Interest Rate. Respecting Cycles I, II, II-A and III, and
respecting Cycles III-A and subsequent cycles for Participants making
the Moody's election, the Basic Interest Rate for a Plan Year shall
equal the Moody's index in effect in May prior thereto.
4.2 Supplemental Interest Rate. The Supplemental Interest Rate for each
Plan Year in the Deferral Period equals 35% of the Basic Interest Rate
in effect for that Plan Year. The Supplemental Interest Rate or the
formula for determining it that will be in effect respecting each
Deferral Period shall from time to time be established by the Company
by action of or pursuant to the authorization of its Board of
Directors. For Plan cycles beginning in and after 1994 (i.e., Cycle
III-A and subsequent cycles), there shall be no Supplemental Interest
Rate.
4.3 Available Accounts. Each Participant shall have either a Savings
Account or a Retirement Account, and may have both, depending upon his
deferral election as expressed in his Deferral Agreement. Each
Participant in Cycles I, II, II-A and III shall have an Accumulation
Account.
4.4 Crediting of Deferrals and Interest. Each Participant's Deferral
Amounts shall be credited to his Retirement Account and/or Savings
Account in accordance with his deferral election as expressed in his
Deferral Agreement, on or about such time as the Participant would
have been paid such Deferral Amounts had he not participated in the
Plan. The percentage of Base Annual Salary credited from time to time
to a Participant's Accounts shall equal the percentage thereof that
the Participant has deferred.
(a) Respecting Cycles I, II, II-A, and III, interest on each
Participant's Deferral Amounts shall be credited semimonthly at the
semimonthly equivalent of the Basic Interest Rate, and shall be
compounded semimonthly. Each Participant shall have an Accumulation
Account to which additional interest shall be credited (subject to
forfeiture as described in Article 7). Interest shall be credited to
the Accumulation Account, and compounded, semimonthly, at the
semimonthly equivalent of (i) the Basic Interest Rate plus
Supplemental Interest Rate times the aggregate of Retirement Account,
Savings Account and Accumulation Account balances, less (ii) the Basic
Interest Rate times the aggregate of Retirement Account and Savings
Account balances.
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(b) Respecting Cycles III-A and subsequent cycles, for Participants
making the Moody's Election, interest on Deferral Amounts shall be
credited semimonthly at the semimonthly equivalent of the Basic
Interest Rate, and shall be compounded semimonthly.
(c) Respecting Cycle III-A and subsequent cycles, for Participants
making the S&P 500 Minus 1.2% Election, a return on each Participant's
Deferral Amounts shall be credited semimonthly, at a rate equal to the
semimonthly total return of the S&P 500 (including reinvestment of
dividends) minus .045%, and shall be compounded semimonthly.
4.5 Account Statements. Each Participant will receive a statement of his
accounts annually.
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Article 5
Savings Account
5.1 Definition. A Savings Account is an Account to which a Participant
may defer a percentage of his Base Salary, as he shall designate
pursuant to his Deferral Agreement.
5.2 Four Year Minimum. Respecting each Deferral Period, all funds in a
Participant's Savings Account must remain in the Plan until at least
the end of the fourth year after the commencement of the Deferral
Period (or for such other minimum period as is established by the
Company), unless the Participant terminates employment, in which case
he thereupon should receive his Savings Account.
5.3 Distribution of Savings Account. As part of his Deferral Agreement, a
Participant shall designate the date(s), but no more than three, on or
about which his savings account is to be distributed to him, and the
apportionment of such distribution if more than one is to be made. If
a Participant retires or otherwise terminates employment, his Savings
Account shall be paid to him then in a lump sum payment even if that
date is earlier than the date(s) he elected. The Company may from
time to time revise these requirements and establish other
requirements as to Savings Account elections and distributions.
5.4 Elections Within Savings Account. With respect to a Participant's
Deferral Amounts allocated to his Savings Account for Cycle III-A or
subsequent cycles, the Participant may make either the Moody's
Election or the S&P 500 Minus 1.2% Election, but not both.
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Article 6
Retirement
6.1 Definition. A Retirement Account is an Account to which a Participant
may defer a percentage of his Base Salary as he shall designate
pursuant to his Deferral Agreement.
6.2 Retirement Benefit. A Participant who Retires shall become eligible
to receive, in accordance with this Article, a monthly payment based
on his Retirement Account and Accumulation Account. However, if the
Participant has no Retirement Account balance and his Accumulation
Account balance is less than $10,000 at the date of his retirement,
that account shall be paid in the form of a lump sum equal to the
value of such account.
6.3 Forms of Annuity. A Participant who Retires shall receive a 15-year
certain annuity, commencing on the Retirement Benefit Date (except as
described above), unless he has elected to receive a 5 or 10 year
certain annuity prior to the Deferral Period. The Participant must
give the Company at least 90 days notice of Retirement.
Notwithstanding the above, respecting Cycle III-A and subsequent
cycles, the Participant may elect to have the 5, 10 or 15 year certain
annuity he has chosen pursuant to this Section commence on the latter
of his retirement or as of the first of the month coinciding with or
next following a designated birthday, but no later than his 70th
birthday.
6.4 Determination of Annuity. Respecting Plan balances attributable to
the Deferral Periods for Cycles I, II, II-A and III, the annuity shall
be determined by using an interest rate equal to 135% of the average
of the Moody's Index in effect for the 60-month period that ends with
the month preceding the month in which the Participant's Retirement
Benefit Date occurs. Respecting Plan balances attributable to Cycle
III-A and subsequent Deferral Periods, the annuity shall be determined
by using the average of the Moody's Index in effect for the 60-month
period that ends with the month preceding the month in which the
Participant's Retirement Benefit Date occurs, unless the Participant
has made an election to commence receipt of his Plan benefits in the
form of a 5, 10 or 15 year certain annuity for such cycle or cycles at
a later date pursuant to the last sentence of Section 6.3, in which
case the same 60-month formula shall be used but the 60 months shall
end with the month preceding the month in which the annuity commences.
6.5 Death Prior to Completion of Retirement Benefits. If a Retired
Participant dies before the retirement annuity hereunder has commenced
or has been paid in full, any unpaid benefit payments shall continue
and be paid to that Participant's Beneficiary.
<PAGE 15>
6.6 Elections within Retirement Account. With respect to a Participant's
Deferral Amounts allocated to his Retirement Account for Cycle III-A
or subsequent cycles, the Participant may make either the Moody's
Election or the S&P 500 Minus 1.2% Election, but not both.
For Cycle III-A and subsequent cycles, a Participant who had made the
S&P 500 Minus 1.2% Election for his Retirement Account may, after his
55th birthday, at one time only, switch all his Retirement Account
balances out of such election effective as of the first of the month
following receipt by the Company of his written notification
requesting the switch. If a Participant makes such a switch, such
Retirement Account balance will commence earning a return, on a
semimonthly basis, equal to the semimonthly equivalent of the Basic
Interest Rate, minus .04%, which when compounded will provide a total
annual return approximately equal to the Moody's Index minus 1% per
Plan Year, from time to time. This crediting rate of less than the
Moody's Index shall not affect the Participant's annuity computation,
which shall be in accordance with Section 6.4.
<PAGE 16>
Article 7
Termination
7.1 Termination. If the Participant incurs a Termination of Employment by
means other than death, such Participant shall receive any
undistributed Savings Account balance, and his Retirement Account
balance, as soon as reasonably practicable thereafter, but shall
forfeit his Accumulation Account balance, if any.
7.2 Death. If the Participant incurs a Termination of Employment by
reason of death, or dies while in active service with an Employer at
or after age 55, his Beneficiary shall receive his Retirement Account
balance, any undistributed Savings Account balance, and his
Accumulation Account balance (if any), as soon as reasonably
practicable thereafter, in the form of a lump sum payment.
<PAGE 17>
Article 8
Beneficiary Designation
8.1 Beneficiary Designation. Each Participant shall have the right, at
any time, to designate any person, persons or entity as his primary
and secondary Beneficiary or Beneficiaries.
8.2 Change of Beneficiary Designation. Any Beneficiary designation may be
changed by a Participant at any time by executing and filing a form
prescribed by the Committee. The filing of a new Beneficiary
designation form will cancel all Beneficiary designations previously
filed. The Committee shall be entitled to rely on the last
designation filed by the Participant prior to his death.
8.3 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided above, or if all designated Beneficiaries
predecease the Participant or die prior to complete distribution of
the Participant's benefits, then the Participant's designated
Beneficiary shall be deemed to be the surviving spouse. If the
Participant has no surviving spouse, the benefits remaining under the
Plan shall be payable to the Participant's personal representative,
executor or administrator of the Participant's estate.
8.4 Effect of Payment. The payment of benefits under the Plan to the
named Beneficiary shall completely discharge the Employer's
obligations under this Plan.
<PAGE 18>
Article 9
Other Benefits and Agreements
9.1 Coordination With Other Benefits. The benefits provided for a
Participant or for the Beneficiary of a Participant under the Plan are
in addition to any other benefits to which the Participant or
Beneficiary may be entitled under any other plan or program of the
Employer. This Plan shall supplement and shall not supersede, modify,
amend, enhance or diminish any other such plan or program except as
may otherwise be expressly provided.
9.2 Restoration of Benefits-Tophats. (a) Amounts deferred under the
Plan, under the current state of the law, will not be considered as
compensation for purposes of the computation of benefits under plans
qualified under the Employee Retirement Income Security Act of 1974,
as amended, ("ERISA") and Sections 401(a) and 501(a) of the Internal
Revenue Code of 1986, as amended ("Code"). In order to restore to Plan
Participants benefits under other plans that are lost as a result of
the above, or as a result of legal limits on participation in such
plans, as these plans may be amended from time to time, the following
"tophats" are instituted:
(i) Each Participant who has elected a deferral percentage under
the TDSP that otherwise would be sufficient to entitle him
to receive the Maximum Matching Contribution Percentage
under the TDSP and who defers under the Plan compensation
otherwise payable with respect to one or more pay periods in
a Plan Year shall be credited with an additional amount
equal to the Participant's Maximum Matching Contribution
Percentage for each such pay period times the Participant's
Base Salary actually deferred under the Plan with respect to
each such pay period, adjusted as of the end of the Plan
Year to reflect the increased value of his TDSP accounts had
such amounts been actually contributed as additional
employer matching contributions to the TDSP. If a
participant elects a deferral percentage under the TDSP that
is less than the Maximum Matching Contribution Percentage,
the applicable matching contribution percentage received
under the TDSP shall instead be used in the manner described
above to determine the amount credited to the Participant.
<PAGE 19>
(ii) Each Participant who has elected a deferral percentage under
the TDSP that otherwise would be sufficient to entitle him
to receive the Maximum Matching Contribution Percentage
under the TDSP and who is prevented, as a result of legal
limits (imposed under Sections 401(k)(3), 401(a)(17), 402(g)
or 415 of the Code or a successor to any such section), from
making additional elective deferrals under the TDSP and thus
receiving the maximum employer matching contribution to
which he would otherwise be entitled under the TDSP, for one
or more pay periods in a Plan Year, shall be credited with
an additional amount under the Plan equal to the employer
matching contributions foregone (i.e., that would have been
received if additional elective deferrals under the TDSP not
subject to such legal limits could have been made), provided
that a TDSP participant who is prevented from making
elective deferrals under the TDSP due to legal limits shall
not be obligated to contribute to this Plan. In determining
the employer matching contribution forgone for purposes of
this clause, it shall be assumed that the TDSP Maximum
Matching Contribution Percentage applies to Base Salary as
defined in the Plan, and that the legal limits would not
have permitted the application of such percentage under the
TDSP to any part of the excess of Base Salary under this
Plan over Base Salary as defined in the TDSP with respect to
any participant. However, this clause when operated in
conjunction with clause (i) shall not result in a "double
tophat" respecting Plan deferrals. The amount credited
hereunder shall be adjusted as of the end of the Plan Year
to reflect the increased value the TDSP accounts would have
had, had such amounts credited hereunder been actually
contributed as additional employer matching contributions to
the TDSP. If a participant elects a deferral percentage
under the TDSP that is less than the Maximum Matching
Contribution Percentage, the applicable matching
contribution percentage received under the TDSP shall
instead be used in the manner described above to determine
the amount credited to the Participant.
(iii) This example shall illustrate how the "tophat" provisions of
this paragraph (a) are to be applied. Assume that a
particular Plan participant's Plan deferral percentage for
an entire calendar year is 10%, that his TDSP deferral
percentage (salary contribution percentage) is 7%, and that
his Maximum Matching Contribution Percentage under the TDSP
is 6%. Also assume that his Base Salary as defined in the
Plan for that calendar year is $420,000 (i.e., $300,000 base
annual pay plus $120,000 paid under the Annual At Risk
<PAGE 20>
Compensation Incentive Program), that his Base Salary as
defined in the TDSP for the same period is $270,000
($300,000 minus the 10% Plan deferral) that the Code section
401(a)(17) limit for that year is $150,000, that the Code
section 402(g) limit is $10,000 for that year, and that the
Code section 401(k)(3) and section 415 limits do not
adversely
affect the Plan participant in this example. Also, assume
that there are no distortions caused by the operation of the
Plan on a Plan Year basis and the TDSP's use of a calendar
year. Applying these assumptions, under clause (i) a
"tophat" is provided in the amount of 6% x 10% x $420,000,
or $2,520. Under clause (ii), since the $10,000 per annum
limit on permitted TDSP deferrals would result in the
participant receiving an $8,333 Maximum Matching
Contribution Percentage, whereas he should have received a
total "tophat" under Section 9.2 of 6% x $420,000, or
$25,200 minus the match received under the TDSP, he should,
at first blush, receive $25,200 - $8,333, or $16,867 under
clause (ii). However, he has already received $2,520 by
virtue of clause (i), and thus should only receive $14,347
by virtue of clause (ii), for a total tophat of $16,867, and
a total aggregate "employer matching contribution" of
$25,200 ($8,333 in the TDSP and $16,867 by virtue of these
"tophats".) In actuality, these tophat amounts will be
adjusted for changes in the value of Company common stock,
as further alluded to in this paragraph. As can be seen by
this illustration, the tophats are intended to make up for
and not under- or overcompensate for Participants' losses of
Maximum Matching Contribution Percentages caused by the
various legal limitations applying to, and the Base Salary
definition of, the TDSP.
(b) Any loss of benefits to a participant under the National Fuel Gas
Company Retirement Plan and the National Fuel Gas Company Executive
Retirement Plan in the aggregate, as these plans may be amended from
time to time, which results from the deferrals made under the Plan by
the Participant, shall be restored by the Company.
(c) Participants, as part of their Deferral Agreements, shall elect
to receive the tophat entitlements annually or at their termination of
employment.
(d) The tophats shall be paid in the manner and under such terms and
conditions as determined by the Committee and shall in other respects
also be administered by the Committee in accordance with their intent.
<PAGE 21>
Article 10
Termination and Modification
10.1 Termination and Amendment. The Company reserves the right to
terminate or amend the Plan in whole or in part at any time. Such
termination or amendment shall have a binding effect on Participants
and their Beneficiaries. Upon termination of the Plan, the
Participants' Accounts shall be paid out at such time and in such
manner as the Committee deems appropriate.
10.2 Change in Interest Rate. The Company may, at any time it deems it
appropriate (on a prospective or retrospective basis), increase the
Supplemental Interest Rate. The Company may also reduce or eliminate
the Supplemental Interest Rate on a prospective basis with respect
both to future deferrals and future interest on past deferrals. The
Company has eliminated the Supplemental Interest Rate with respect to
Cycle III-A.
10.3 Limited Power of President to Amend Plan. The President is empowered
to amend, restate or otherwise change the Plan as (i) counsel may
advise to be necessary or appropriate in order to ensure that the Plan
continues to operate as a plan of deferred compensation for tax
purposes, remains exempt from many of the provisions of ERISA and
otherwise continues to fulfill the purposes for which the Plan was
adopted and intended, (ii) as he may deem necessary in order to make
technical or clarifying changes not inconsistent with or in order to
fulfill the purposes of the Plan, and (iii) in other respects except
as will materially increase the cost of the Plan to the Company or its
subsidiaries or the benefits of the Plan to Participants.
<PAGE 22>
Article 11
Administration
11.1 Committee Duties. This Plan shall be administered by a committee the
members of which shall be appointed by the Board of Directors of the
Company. The Committee shall have the authority to make, amend,
interpret, and enforce all appropriate rules, regulations, and
procedures for the administration of this Plan, and to decide or
resolve any and all questions including interpretations of this Plan,
as may arise in connection with the Plan. The Committee shall have no
power to waive or in any other way modify the terms of Deferral
Agreements. Members of the Committee who are eligible to participate
in the Plan may participate to the same extent as other Participants
but shall not take part in any determination directly relating only to
their own participation or benefits.
11.2 Agents. In the administration of this Plan, the Committee may, from
time to time, employ agents, including employees of the Company and
Plan Participants, and may delegate to them such administrative duties
as it sees fit, and may from time to time consult with counsel who may
be counsel to the Employer.
11.3 Binding Effect of Decisions. The decision or action of the Committee
with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the
rules and regulations promulgated hereunder shall be final, conclusive
and binding upon all persons having any interest in the Plan.
11.4 Indemnity of Committee. The Company and Employer shall indemnify and
hold harmless the members of the Committee and their agents and
delegates against any and all claims, losses, damage, expense
(including counsel fees) or liability arising from any action or
failure to act with respect to this Plan, except in the case of
willful misconduct by the Committee or any of its members or agents.
<PAGE 23>
Article 12
Miscellaneous
12.1 Unsecured General Creditor. Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights,
interest or claims in any property or assets of any Employer, nor
shall they be Beneficiaries of, or have any rights, claims or
interests in any life insurance policies, annuity contracts or the
proceeds therefrom owned or which may be acquired by the Employer
("Policies"). Such Policies or other assets of the Employer shall not
be held under any trust for the benefit of Participants, their
Beneficiaries, heirs, successors or assigns, or held in any way as
collateral security for the fulfilling of the obligations of the
Employer under this Plan. Any and all of the Employer's assets and
Policies shall be, and remain, the general assets of the Employer.
The Employer's obligation under the Plan shall merely constitute an
unfunded and unsecured promise of the Employer to pay money in the
future.
12.2 Nonassignability. Neither a Participant nor any other person shall
have any right to sell, assign, transfer, pledge, mortgage or
otherwise encumber, hypothecate or convey in advance of actual
receipt, the amounts, if any, payable hereunder, or any part thereof
or interest therein. No part of the amounts payable shall, prior to
actual payment, be subject to seizure or sequestration for the payment
of any debts, judgments, alimony or separate maintenance owed by a
Participant or any other person, nor be transferable by operation of
law in the event of a Participant's or any other person's bankruptcy
or insolvency.
12.3 Not a Contract of Employment. The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between the
Employer and the Participant, and the Participant (or his Beneficiary)
shall have no rights against the Employer except as may otherwise be
specifically provided herein. Moreover, nothing in this Plan shall be
deemed to give a Participant the right to be retained in the service
of the Employer or to deny to the Employer the right to discipline a
Participant (including reducing his salary) or discharge him at any
time.
12.4 Health Information. The Participant shall provide to the Company, if
so requested and as a precondition for Plan participation, all health
information and other information as the Company may require in order
to purchase Policies.
<PAGE 24>
12.5 Governing Law. The provisions of the Plan shall be construed and
interpreted according to the laws of the State of New York.
12.6 Withholding. All payments that are to be made by an Employer to a
Participant shall be subject to withholding for any and all taxes as
the Employer in its discretion deems appropriate.
12.7 Binding Effect. The provisions of this Plan shall bind the
Participant and his Beneficiaries, and shall bind and inure to the
benefit of the Employer and its successors and assigns.
12.8 Borrowing. No portions of any Accounts may be borrowed by a
Participant or his Beneficiaries under this Plan.
12.9 Validity. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect
the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal and invalid provision had never been
inserted herein.
12.10 Incapacity of Person Entitled To Payment. If the Committee shall
reasonably determine, upon evidence satisfactory to it, that it is not
desirable, because of the incapacity of the person who shall be
entitled to receive any payment in accordance with the provisions of
the Plan, to make such payment directly to such person, the Committee
may apply such payment for the benefit of such person in any way that
the Committee shall deem advisable, or the Committee may make such
payment to any third person who, in the judgment of the Committee,
will apply such payment for the benefit of the person entitled
thereto. Such payment for the benefit of the person entitled thereto,
or to a third person for his benefit, shall be a complete discharge of
all liability with respect to such payment. The Committee may retain
any amount that would otherwise be payable in accordance with the
provisions of the Plan to a person who may be under legal disability
until a representative of such person competent to receive such
payment on his behalf shall have been appointed pursuant to law.
12.11 Captions. The captions of the articles, sections and paragraphs of
the Plan are for convenience only and shall not control or affect the
meaning or construction of any of its provisions.
12.12 Construction. Whenever any words are used herein in the masculine,
they shall be construed as though they were used in the feminine in
all cases where they would so apply; and whenever any words are used
herein in the singular or in the plural, they shall be construed as
though they were used in the plural or the singular, as the case may
be, in all cases where they would so apply.