NATIONAL SEMICONDUCTOR CORPORATION
DEFERRED COMPENSATION PLAN
(FOR AWARDS UNDER THE KEIP AND EOIP)
PLAN DOCUMENT
EFFECTIVE JUNE 1, 2001
DEFERRED COMPENSATION PLAN (FOR AWARDS UNDER THE KEIP AND EOIP)- PLAN
DOCUMENT
THIS DEFERRED COMPENSATION PLAN (FOR AWARDS UNDER THE KEIP AND EOIP) ("Plan") is
adopted by National Semiconductor Corporation, a corporation organized and
existing under the laws of the State of Delaware, (hereinafter referred to as
the "Employer") effective as of June 1, 2001:
WITNESSETH:
WHEREAS, the Employer's Key Employee Incentive Plan ("KEIP"), Executive Officer
Incentive Plan ("EOIP"), and Key Employee Bonus Plan ("KEBP") previously
permitted certain KEIP, EOIP and KEBP participants to defer payment of their
incentive awards pursuant to the terms of the KEIP, EOIP and KEBP;
WHEREAS, the Employer desires to combine into a single plan the provisions of
the KEIP and EOIP that permit the deferral of incentive awards and provide
additional flexibility with respect to future deferrals;
WHEREAS, the Employer also desires to transfer previously deferred incentive
awards so that they may be held under a single plan; and
WHEREAS, the Employer has been authorized by its Board of Directors to adopt
this Plan in order to provide for the future deferral of incentive awards under
the KEIP and EOIP, and the consolidation of previously deferred incentive awards
under the KEIP, EOIP, and KEBP;
NOW, THEREFORE, in consideration of the promises herein contained, it is hereby
declared as follows:
ARTICLE 1
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DEFINITIONS
When used herein, the words and phrases defined hereinafter shall have the
following meaning unless a different meaning is clearly required by the context.
1.01 "ACCOUNT" shall mean the Account established pursuant to Section 3.04 of
the Plan.
1.02 "BENEFICIARY" shall mean the person or persons last designated by a
Participant, by written notice filed with the Committee, to receive a Plan
Benefit upon his or her death. In the event a Participant fails to
designate a person or persons as provided above or if no Beneficiary so
designated survives the Participant, then for all purposes of this Plan,
the Beneficiary shall be the person(s) designated as the beneficiaries by
the Participant under the RASP, or, if none, the Participant's estate.
1.03 "BENEFITS" shall mean the value of the Participant's Account as credited to
the investment options selected by the Participant from among the options
authorized by the Committee from time to time under the Plan as reflected
in the records of the Participant's Account as described in Sections 3.04
and 3.05.
1.04 "BOARD" shall mean the Board of Directors of National Semiconductor
Corporation.
1.05 "COMMITTEE" shall mean The Retirement and Savings Program Administrative
Committee, as determined by the Board.
1.06 "DEFERRED INCENTIVE AWARD AMOUNT" shall mean the amount of a Participant's
incentive awards under the KEIP and EOIP that are deferred with respect to
a particular fiscal year of the Employer.
1.07 "EFFECTIVE DATE" shall mean June 1, 2001.
1.08 "EMPLOYER" shall mean National Semiconductor Corporation.
1.09 "PARTICIPANT" shall mean an Eligible Employee of the Employer who satisfies
the eligibility requirements of Section 2.01 of the Plan.
1.10 "PLAN" shall mean the National Semiconductor Corporation Deferred
Compensation Plan, as amended from time to time.
1.11 "PLAN YEAR" shall mean the calendar year.
1.12 "PRIOR PLAN DEFERRAL AMOUNTS" shall mean amounts deferred under the
provisions of the KEIP, EOIP and KEBP prior to the Effective Date of this
Plan that remain to the credit of the Participant under the KEIP, EOIP or
KEBP on the Effective Date. Pursuant to Section 3.03, these amounts will be
credited with interest to the Plan and no longer will be payable under the
KEIP, EOIP or KEBP after the Effective Date.
1.13 "RASP" shall mean the National Semiconductor Corporation Retirement and
Savings Program, or any successor plan (or plans) thereto. In the case of
any successor plan, references herein to Sections of the RASP shall be
interpreted as corresponding Sections under the successor plan.
1.14 Capitalized Terms not defined herein shall have the meaning attributed to
them in the RASP.
ARTICLE II
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ELIGIBILITY
2.01 ELIGIBILITY
A Participant shall be eligible to defer incentive awards under the KEIP or EOIP
if the Participant is an Eligible Employee on the Employer's U.S. payroll, holds
a 39xx or higher job code, and is a participant in the KEIP or the EOIP.
2.02 ENROLLMENT
Participants may enroll in the Plan for purposes of deferring incentive awards
with respect to a particular fiscal year of the Employer no later than 30 days
before the end of the fiscal year of the Employer, or other date that is
specified by the Committee ("enrollment date"), by completing and returning the
form provided by the Employer for this purpose. The completed form shall provide
the percentage of the incentive award that shall be deferred, the timing for
payment of Benefits (in accordance with Section 4.01), and the form of payment
of Benefits (in accordance with Section 4.06). A new form must be completed for
each fiscal year for which a deferral of an incentive award is desired.
ARTICLE III
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BENEFITS
3.01 BENEFITS
The maximum Benefits under this Plan to which a Participant shall be entitled
shall be equal to the sum of (a) the Participant's Deferred Incentive Award
Amounts credited pursuant to Section 3.02, (b) the Participant's Prior Plan
Deferral Amounts credited to the Participant's Account with interest pursuant to
Section 3.03, and (c) earnings and losses credited to the Participant's Account
in accordance with Sections 3.04 and 3.05.
3.02 DEFERRED INCENTIVE AWARD AMOUNTS
The Deferred Incentive Award Amount which shall be credited to a Participant's
Account for a Plan Year shall equal the amount of the incentive awards under the
KEIP and EOIP with respect to the Employer's fiscal year ending within the Plan
Year that a Participant has agreed to defer under this Plan pursuant to
procedures established by the Committee. A Participant may agree to defer
receipt of up to 100% of the Participant's incentive awards under the KEIP and
EOIP with respect to the Employer's fiscal year ending within the Plan Year.
3.03 PRIOR PLAN DEFERRAL AMOUNTS
A Participant's Prior Plan Deferral Amounts shall be credited to the
Participant's Account as of the Effective Date, along with interest credited to
the Effective Date as determined under the provisions of the KEIP, EOIP and
KEBP. Once credited under this Plan, a Participant shall no longer have any
right to such amounts under the terms of the KEIP, EOIP or KEBP. In no event
shall a Participant be entitled to the same amount under this Plan and the KEIP,
EOIP or KEBP.
3.04 PARTICIPANT'S ACCOUNT
The Employer shall create and maintain adequate records to reflect the interest
of each Participant in the Plan. Such records shall be in the form of individual
Accounts. When appropriate, a Participant's Account shall consist of class year
subaccounts with respect to each Plan Year for which a Deferred Incentive Award
Amount is credited under the Plan and for each year for which Prior Plan
Deferral Amounts were credited. Such Accounts shall be kept for recordkeeping
purposes only and shall reflect allocations under Section 3.05, distributions
under Article IV, and divestments under Section 6.07. Any Accounts maintained in
trust by the Employer shall not be construed as providing for assets to be held
in trust or escrow or any other form of asset segregation for the Participant or
Beneficiary to whom benefits are to be paid pursuant to the terms of the Plan.
3.05 ALLOCATION TO PARTICIPANT ACCOUNT
The Participant's Deferred Incentive Award Amount for a Plan Year shall be
credited to the Participant's Account as of the pay date such amount would have
been paid to such Participant absent a deferral under the Plan. The
Participant's Prior Plan Deferral Amounts (with interest as provided under
Section 3.03) shall be credited to the Participant's Account as of the Effective
Date. Each Participant may advise the Committee, in accordance with procedures
established by the Committee, on how he wishes his Account to be allocated among
the investment options authorized by the Committee and such Participant's
Account shall be credited with earnings and losses at such time and in such
manner as determined in the sole discretion of the Committee and shall reflect
the allocation of investments made thereunder. The Participant may change his
investment allocation in accordance with procedures established by the
Committee. Notwithstanding the foregoing, the Committee reserves the right to
determine the options and specific process for making investments without regard
to the advice received from Participants.
ARTICLE IV
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DISTRIBUTION OF BENEFITS
4.01 BENEFIT COMMENCEMENT DATE
Except as provided in Section 4.04, Benefits under the Plan may not be paid
prior to the earlier of (a) the Participant's termination of employment (as
provided in Section 4.02) or (b) a date pre-selected by the Participant (as
provided in Section 4.03), in accordance with the election made by the
Participant pursuant to Section 2.02. If an election is made to have Benefits
commence on a date pre-selected by the Participant (as provided in Section
4.03), such election subsequently may be modified to defer payment until the
Participant's termination of employment (as provided in Section 4.02), provided
such modification is made by the Participant in writing at least 12 months prior
to the pre-selected date.
4.02 TERMINATION OF EMPLOYMENT
Except as otherwise provided in this section, Benefits shall be distributed upon
termination of employment for any reason (including retirement, disability,
death, or reduction-in-force). However, in the case of a termination of
employment because of a disposition of substantially all of the assets of a line
of business or a disposition of the Employer's interest in a subsidiary, if the
Employer and the acquiring company so agree, a Participant that would continue
in a similar position with the acquiring company will be given the opportunity
to elect sufficiently in advance of such disposition to have the Participant's
Benefits transferred to a nonqualified deferred compensation plan maintained by
the acquiring company. If the Participant makes the election described in the
preceding sentence, and the Participant's Benefits are so transferred, the
Participant's rights under this Plan shall cease. If the Participant does not
make such an election, the Participant's Benefits shall be paid as they
otherwise would in the case of a termination of employment.
4.03 DATE PRE-SELECTED BY THE PARTICIPANT
A Participant may elect to have payment of a subaccount relating to a Deferred
Incentive Award Amount for a particular Plan Year commence prior to termination
of employment, provided that the commencement date is at least two full calendar
years after the end of the calendar year in which the Deferred Incentive Award
Amount otherwise would have been paid to the Participant absent the deferral
under this Plan. For example, payment of a subaccount relating to a Deferred
Incentive Award Amount that otherwise would have been paid to the Participant in
2001 may be deferred to a date no earlier than January 1, 2004.
4.04 HARDSHIP
Payment of part or all of the Benefits under this Plan may be accelerated in the
case of severe hardship, which shall mean an emergency or unexpected situation
in the Participant's financial affairs, including, but not limited to, illness
or accident involving the Participant or any of the Participant's dependents
(within the meaning of Section 152(a) of the Internal Revenue Code). All
payments in case of hardship must be approved by the Committee and will be
limited to the amount necessary to meet the severe hardship.
4.05 FORM OF PAYMENT
Benefits shall be distributed to a Participant in a lump sum, or in annual
installment payments of at least two (2) years, but not more than ten (10)
years, in accordance with the election made by the Participant pursuant to
Section 2.02; provided, however, that the Participant's election under Section
2.02 as to the form of payment of Benefits subsequently may be modified to
provide for another permissible form of payment, so long as such modification is
made by the Participant in writing at least 90 days prior to the date the
payment of Benefits commences under Section 4.01. If installment payments are
elected, the first installment shall be made as soon as is administratively
feasible after the event giving rise to the distribution and all subsequent
installments shall be paid at the beginning of each subsequent calendar year as
soon as is administratively feasible. To the extent Benefits are not paid in
installments, the account balance will be paid in a lump sum in the month
following the event giving rise to the distribution, or as soon as is
administratively feasible.
4.06 BENEFICIARY ENTITLEMENT
In the event a Participant entitled to installment payments dies before
receiving all Benefits under the Plan, the unpaid balance will be paid in a lump
sum to such Participant's Beneficiary as soon as is administratively feasible
following the Participant's death.
ARTICLE V
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ADMINISTRATION; AMENDMENTS AND TERMINATION; RIGHTS AGAINST THE COMPANY
5.01 ADMINISTRATION
The Committee shall administer this Plan. With respect to the Plan, the
Committee shall have, and shall exercise and perform, all the powers, rights,
authorities and duties set forth in the RASP with the same effect as if set
forth in full herein with respect to this Plan. Except as expressly set forth
herein, any determination or decision by the Committee shall be conclusive and
binding on all persons who at any time have or claim to have any interest
whatever under this Plan.
5.02 AMENDMENT AND TERMINATION PRIOR TO A CHANGE IN CONTROL
The Employer, solely, and without the approval of the Committee or any
Participant or Beneficiary, shall have the right to amend this Plan at any time
and from time-to-time, by resolution adopted by it. Any such amendment shall
become effective upon the date stated therein. Notwithstanding the foregoing, no
amendment shall adversely affect the rights of any Participant or Beneficiary
who was previously receiving Benefits under this Plan to continue to receive
such Benefits or of all other Participants and Beneficiaries to receive the
Benefits promised under the Plan immediately prior to the later of the effective
date or the date of adoption of the amendment.
The Employer has established this Plan with the bona fide intention and
expectation that from year-to-year it will deem it advisable to continue it in
effect. However, circumstances not now foreseen or circumstances beyond the
Employer's control may make it impossible or inadvisable to continue the Plan.
Therefore, the Employer, in its sole discretion, reserves the right to terminate
the Plan in its entirety at any time; provided, however, that in such event any
Participant or Beneficiary who was receiving benefits under this Plan as of the
termination date, shall continue to receive such Benefits, and all other
Participants and Beneficiaries shall remain entitled to receive the Benefits
promised under the Plan immediately prior to the termination of the Plan.
5.03 RIGHTS AGAINST THE EMPLOYER
The establishment of this Plan shall not be construed as giving to any
Participant, Beneficiary, employee or any person whomsoever, any legal,
equitable or other rights against the Employer, or its officers, directors,
agents or shareholders, except as specifically provided for herein, or its
giving to any Participant any equity or other interest in the assets, business
or shares of the Employer or giving any employee the right to be retained in the
employment of the Employer. All terms relating to incentive awards that do not
involve the deferral of receipt of such awards shall be governed by the KEIP or
EOIP, as the case may be. All employees and Participants shall be subject to
discharge to the same extent that they would have been if this Plan had never
been adopted. Subject to the rights of the Employer to terminate this Plan or
any benefit hereunder, the rights of a Participant hereunder shall be solely
those of an unsecured creditor of the Employer.
ARTICLE VI
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GENERAL AND MISCELLANEOUS
6.01 SPENDTHRIFT CLAUSE
No right, title or interest of any kind in the Plan shall be transferable or
assignable by any Participant or Beneficiary or any other person or be subject
to alienation, anticipation, encumbrance, garnishment, attachment, execution or
levy of any kind, whether voluntary or involuntary. Any attempt to alienate,
sell, transfer, assign, pledge, garnish, attach or otherwise encumber or dispose
of any interest in the Plan shall be void.
6.02 SEVERABILITY
In the event that any provision of this Plan shall be declared illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions of this Plan but shall be fully severable, and this Plan
shall be construed and enforced as if said illegal or invalid provision had
never been inserted herein.
6.03 CONSTRUCTION OF PLAN
The article and section headings and numbers are included only for convenience
of reference and are not to be taken as limiting or extending the meaning of any
of the terms and provisions of this Plan. Whenever appropriate, words used in
the singular shall include the plural or the plural may be read as the singular.
6.04 GENDER
The personal pronoun of the masculine gender shall be understood to apply to
women as well as men except where specific reference is made to one or the
other.
6.05 GOVERNING LAW
THE VALIDITY AND EFFECT OF THIS PLAN AND THE RIGHTS AND OBLIGATIONS OF ALL
PERSONS AFFECTED HEREBY SHALL BE CONSTRUED AND DETERMINED IN ACCORDANCE WITH THE
LAWS OF THE UNITED STATES AND THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT
REGARD TO ITS OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS.
6.06 UNFUNDED TOP HAT PLAN
It is the Employer's intention that this Plan be a Top Hat Plan, defined as an
unfunded plan maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees,
as provided in Sections 201(2), 301(a)(3), and 401(a)(1) of the Employee
Retirement Income Security Act of 1974, as amended from time-to-time. The
Employer may establish and fund one or more trusts for the purpose of paying
some or all of the benefits promised to Participants and Beneficiaries under the
Plan; provided, however, that (i) any such trust(s) shall at all times be
subject to the claims of the Employer's general creditors in the event of the
insolvency or bankruptcy of the Employer, and (ii) notwithstanding the creation
or funding of any such trust(s), the Employer shall remain primarily liable for
any obligation hereunder. Notwithstanding the establishment of any such
trust(s), the Participants and Beneficiaries shall have no preferred claim on,
or any beneficial ownership interest in, any assets of any such trust or of the
Employer.
6.07 DIVESTMENT FOR CAUSE
Notwithstanding any other provisions of this Plan to the contrary, the right of
any Participant, former Participant, or Beneficiary of either, to receive any
Benefits, or to have paid to any other person any Benefits, or the right of any
such other person to receive any Benefits under this Plan, shall be forfeited,
if such Participant's employment with the Employer is terminated because of, or
the Participant is discovered to have engaged in, fraud, embezzlement,
dishonesty against the Employer, obtaining funds or property under false
pretenses, assisting a competitor without permission, or interfering with the
relationship of the Employer or any subsidiary or affiliate thereof with a
customer. A Participant's or Beneficiary's Benefits shall be forfeited for any
of the above reasons regardless of whether such act is discovered prior to or
subsequent to the Participant's termination from the Employer or the payment of
Benefits under the Plan. If payment has been made, such payment shall be
restored to the Employer by the Participant or Beneficiary.
ERISA RIGHTS
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This Plan is intended to provide benefits for a select group of highly
compensated employees within the meaning of the Employee Retirement Income
Security Act of 1974 (ERISA). However, it is not subject to most of the
requirements or protection of ERISA nor is the Plan eligible for insurance under
Title IV of ERISA. Furthermore, the Plan is considered to be an unfunded,
non-qualified plan for purposes of complying with the Internal Revenue Code.
PLAN NAME:
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DEFERRED COMPENSATION PLAN (FOR AWARDS UNDER THE KEIP AND EOIP)
PLAN SPONSOR: EMPLOYER I.D. NUMBER (EIN):
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National Semiconductor Corporation EIN: 95-2095071
2900 Semiconductor Drive
P.O.Box 58090
Santa Clara, CA 95052-8090
(408) 721-6431
PLAN NUMBER:
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[006]
PLAN YEAR:
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The Plan Year is the calendar year. Plan records are maintained on the basis of
this Plan Year.
PLAN ADMINISTRATOR:
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Retirement and Savings Program Administrative Committee
c/o Corporate Benefits
National Semiconductor Corporation
2900 Semiconductor Drive
P. O. Box 58090 M/S C1-195
Santa Clara, CA 95052-8090
(408) 721-6431
TYPE OF PLAN:
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The Plan is a non-qualified deferred compensation plan for selected key
employees of National Semiconductor Corporation.
AGENT FOR SERVICE OF LEGAL PROCESS:
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Legal process should be served on the Employer's Corporate Secretary or the Plan
Administrator in care of the Retirement Plans Administration Office at the
Employer's address.
FUNDING MEDIUM:
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The Plan is unfunded and Benefits are paid from the Plan sponsor's general
assets.