Exhibit 10.7
DIRECTOR DEFERRAL PLAN - PLAN DOCUMENT
THIS DIRECTOR DEFERRAL PLAN ("Plan") is hereby adopted by National Semiconductor
Corporation, a corporation organized and existing under the laws of the State of
Delaware, (hereinafter referred to as the "Company") effective as of October 1,
1999.
WITNESSETH:
WHEREAS, the Company desires to establish a Plan to provide a means by which
Directors may elect to defer the receipt of their fees or retainer;
WHEREAS, the Plan is intended to be unfunded and is maintained primarily for the
purpose of providing deferred compensation; and
WHEREAS, the Board has adopted this Plan in order to provide for the benefits
specified;
NOW, THEREFORE, in consideration of the premises herein contained, it is hereby
declared as follows:
ARTICLE I
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 Accounts established pursuant to Section 3.02 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 Participant's estate.
1.03 "Board" shall mean the Board of Directors of National Semiconductor
Corporation.
1.04 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.05 "Committee" shall mean The Retirement and Savings Program Administrative
Committee of the Company, as determined by the Board.
1.06 "Company" shall mean National Semiconductor Corporation.
1.07 "Director" shall mean a member of the Board who is not an employee of the
Company and earns meeting fees during the Plan Year or a fee or retainer
for the Plan Year.
1.08 "Elective Deferral" shall mean the amount the Participant agrees to defer
under this Plan pursuant to procedures established by the Committee.
1.09 "Entry Date" shall mean October 1 of each year; provided, however, for a
newly elected Director, the first Entry Date shall be the earlier of thirty
(30) days following his or her election or October 1.
1.10 "Interest" shall mean the rate for long-term A-rated corporate bonds
reported by the investment banking firm of Salomon Smith Barney of New York
City (or such other investment banking firm as the Committee may specify)
during the first week of each Plan Year. The interest rate will be reset at
the beginning of each Plan year.
1.11 "Participant" shall mean a Director who elects to make an Elective Deferral
under the Plan.
1.12 "Plan Year" shall mean the twelve consecutive month period beginning on
October 1; provided, however, that the first Plan Year shall be a short
year beginning October 1, 1999.
ARTICLE II
Participation
2.01 Commencement of Participation.
A Director shall become a Participant in the Plan on the first Entry Date as of
which he or she makes an Elective Deferral.
2.02 Election.
Prior to an Entry Date, a Participant may make an Elective Deferral of any whole
percentage or whole dollar amount of fees, including meeting fees, or retainer
payable to him or her in cash for the remainder of the Plan Year. A Participant
who desires to make Elective Deferrals shall complete and file an enrollment
form with the Committee, pursuant to rules prescribed by the Board. Once a
Participant has enrolled in the Plan, the election made shall remain in effect
from Plan Year to Plan Year until, pursuant to rules prescribed by the Board,
the Participant modifies or revokes his or her election. If a Participant
revokes his or her election during a Plan Year, the Participant cannot reinstate
his or her election until the Entry Date for the next Plan Year.
ARTICLE III
Benefits
3.01 Benefits.
The benefits under this Plan to which a Participant or Beneficiary shall be
entitled shall be equal to the sum of the Elective Deferrals, plus Interest on
such amounts.
3.02 Accounts.
The Company 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. Such Accounts shall be kept for recordkeeping purposes only and 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.
3.03 Allocation to Participant Account and Interest.
The Participant's Elective Deferrals shall be credited to the Participant's
Account as of the date such amount would have been paid to such Participant as
remuneration for services, and the Participant's balance in his Account shall be
credited with Interest at such times and in such manner as determined in the
sole discretion of the Committee.
3.04 Vested Percentage.
Notwithstanding anything herein to the contrary, a Participant shall be 100%
vested at all times in the amount credited to his Account.
ARTICLE IV
Distribution of Benefits
4.01 Separation from Service.
The balance in the Participant's Account shall be distributed in a lump sum upon
the earlier of his or her termination as a Director for any reason (including
retirement, disability or death) or a date preselected by the Participant either
upon commencement of participation under the Plan or upon such date or dates as
may be determined by the Board.
4.02 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.
All payments in case of hardship must be approved by the Board.
ARTICLE V
Administration; Amendments and Termination; Rights Against the Company
5.01 Administration.
The Board shall administer this Plan, but may choose to delegate administration
of this Plan to the Committee. Except as expressly set forth herein, any
determination or decision by the Board or 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 Board, solely, and without the approval of 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 Company 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
Company's control may make it impossible or inadvisable to continue the Plan.
Therefore, the Board, 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 remain entitled to receive the benefits promised under
the Plan immediately prior to the termination of the Plan.
5.03 Rights Against the Company.
The establishment of this Plan shall not be construed as giving to any
Participant, Beneficiary, or any person whomsoever, any legal, equitable or
other rights against the Company, 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 Company or giving any Director the right to be retained. All 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 Board to
terminate this Plan or any benefit hereunder, the rights of a Participant
hereunder shall be solely those of an unsecured creditor of the Company.
ARTICLE VI
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, encumbrance, garnishment, attachment, execution or levy of any
kind, whether voluntary or involuntary. Any attempt to alienate, sell, transfer,
assign, 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 STATE OF CALIFORNIA, WITHOUT REGARD TO ITS OTHERWISE APPLICABLE
PRINCIPLES OF CONFLICTS OF LAWS.
6.06 Unfunded Top Hat Plan.
It is the Company's intention that this Plan is exempt from the Employee
Retirement Income Security Act of 1974, as amended from time to time because it
does not cover employees as that term is used in such Act but even if the Act
applied this Plan would be a Top Hat Plan as defined in Section 201(2),
301(a)(3), and 401(a)(1) of such Act. The Company 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 Company's
general creditors in the event of the insolvency or bankruptcy of the Company,
and (ii) notwithstanding the creation or funding of any such trust(s), the
Company 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 Company.
6.07 Divestment for Cause.
Notwithstanding any other provisions of this Plan to the contrary, the right of
any Participant, former Participant or Beneficiary either to receive or to have
paid to any other person, any benefits hereunder, shall be forfeited, if such
Participant is discovered to have engaged in fraud, embezzlement, dishonesty
against the Company, obtaining funds or property under false pretenses,
assisting a competitor without permission, or interfering with the relationship
of the Company 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 as a Director or the payment of benefits under the
Plan. If payment has been made, such payment shall be restored to the Company by
the Participant or Beneficiary.