EXHIBIT 10.5
COMPOSITE COPY
U.S. BANCORP
DEFERRED COMPENSATION PLAN FOR DIRECTORS
(1998 RESTATEMENT)
First Effective January 1, 1988
As Amended and Restated Effective January 1, 1998
AND
As Amended By
The FIRST AMENDMENT Adopted February 18, 1998
And Effective February 18, 1998
U.S. BANCORP
DEFERRED COMPENSATION PLAN FOR DIRECTORS
(1998 RESTATEMENT)
TABLE OF CONTENTS
PAGE
SECTION 1. INTRODUCTION 1
1.1. Restatement of Plan
1.2. Definitions
1.2.1. Account
1.2.2. Annual Valuation Date
1.2.3. Beneficiary
1.2.4. Director
1.2.5. Event of Maturity
1.2.6. Plan
1.2.7. Plan Statement
1.2.8. Plan Year
1.2.9. Prior Plan Statement
1.2.10. USB
1.2.11. Valuation Date
1.3. Rules of Interpretation
1.4. Additional Definitions
1.4.1. Acquiring Person
1.4.2. Affiliate
1.4.3. Associate
1.4.4. Beneficial Owner
1.4.5. Board of Directors
1.4.6. Company Entity
1.4.7. Continuing Director
1.4.8. Exchange Act
1.4.9. Full Change In Control
1.4.10. Partial Change in Control
1.4.11. Permitted Director
1.4.12. Permitted Transaction
1.4.13. Person
1.4.14. Resulting Corporation
SECTION 2. PARTICIPATION 5
2.1. Participation
2.2. Enrollment
2.3. Revocation
2.4. Prior Years' Enrollments
SECTION 3. ADDITIONS TO ACCOUNTS 6
SECTION 4. ESTABLISHMENT AND ADJUSTMENT OF ACCOUNTS 6
4.1. Establishment of Accounts
4.2. Adjustment of Accounts
4.2.1. Intermediate Distributions Adjustment
4.2.2. Investment Adjustment for Account
4.2.3. Contribution Adjustment
4.2.4. Final Distributions Adjustment
SECTION 5. VESTING OF ACCOUNT 7
SECTION 6. MATURITY 8
6.1. Events of Maturity
6.2. Determination of Account
6.3. Effect of Maturity upon Further Participation in Plan
SECTION 7. DISTRIBUTION 8
7.1. Time of Distribution
7.1.1. Form of Distribution
7.1.2. Time of Distribution
7.1.3. Substantially Equal
7.1.4. Default
7.1.5. Change In Control
7.2. Designation of Beneficiaries
7.2.1. Right To Designate
7.2.2. Failure of Designation
7.2.3. Disclaimers by Beneficiaries
7.2.4. Definitions
7.2.5. Special Rules
7.2.6. No Spousal Rights
7.3. Death Prior to Full Distribution
7.4. Facility of Payment
SECTION 8. FUNDING OF PLAN 12
8.1. Unfunded Agreement
8.2. Spendthrift Provision
SECTION 9. AMENDMENT AND TERMINATION 13
SECTION 10. DETERMINATIONS -- RULES AND REGULATIONS 13
10.1. Determinations
10.2. Rules and Regulations
10.3. Method of Executing Instruments
10.4. Information Furnished by Directors
SECTION 11. PLAN ADMINISTRATION 14
11.1. USB
11.2. Conflict of Interest
SECTION 12. DISCLAIMERS 14
U.S. BANCORP
DEFERRED COMPENSATION PLAN FOR DIRECTORS
(1998 RESTATEMENT)
SECTION 1
INTRODUCTION
1.1. RESTATEMENT OF PLAN. Effective January 1, 1988, FIRST BANK SYSTEM, INC., a
Delaware corporation (hereinafter sometimes referred to as "FBS") authorized the
creation of a nonqualified, unfunded, directors' deferral plan for the purpose
of allowing Directors who are not full-time salaried employees of FBS to defer
the receipt of directors' fees which would otherwise be paid to the Director.
FBS created and established a series of substantially identical annual
directors' deferral plans, effective as of January 1, 1988. They were set forth
in documents referred to collectively as the "Prior Plan Statement." On August
1, 1997, following its merger with U.S. Bancorp, an Oregon corporation, FBS
changed its name to U.S. BANCORP ("USB"). USB has reserved the power to amend
and terminate the Prior Plan Statement from time to time. USB now desires to
exercise that reserved power of amendment by the adoption of this Plan Statement
effective as of January 1, 1998.
1.2. DEFINITIONS. When the following terms are used herein with initial capital
letters, they shall have the following meanings:
1.2.1. ACCOUNT -- the separate bookkeeping account representing the
unfunded and unsecured general obligation of USB established with respect to
each Director to which is credited the dollar amounts specified in Section 3 and
Section 4 and from which are subtracted payments made pursuant to Section 5 and
Section 7. To the extent necessary to accommodate different distribution
elections made pursuant to Section 2, the Account shall be maintained as
separate sub-accounts in sufficient number to accommodate each such distribution
election.
1.2.2. ANNUAL VALUATION DATE -- each December 31.
1.2.3. BENEFICIARY -- a person designated by a Director (or
automatically by operation of this Plan Statement) to receive all or a part of
the Director's Account in the event of the Director's death prior to full
distribution thereof. A person so designated shall not be considered a
Beneficiary until the death of the Director.
1.2.4. DIRECTOR -- an individual serving on the Board of Directors of
USB who is not at the same time a common law employee of USB or any of its
subsidiary corporations.
1.2.5. EVENT OF MATURITY -- any of the occurrences described in
Section 6 by reason of which a Director or Beneficiary may become entitled to a
distribution from the Plan.
1.2.6. PLAN -- the income deferral program maintained by USB
established for the benefit of Directors eligible to participate therein, as
first set forth in the Prior Plan Statement and as amended and restated in this
Plan Statement. (As used herein, "Plan" does not refer to the documents pursuant
to which the Plan is maintained. Those documents are referred to herein as the
"Prior Plan Statement" and the "Plan Statement"). The Plan shall be referred to
as the "U.S. BANCORP DEFERRED COMPENSATION PLAN FOR DIRECTORS."
1.2.7. PLAN STATEMENT -- this document entitled "U.S. BANCORP
DEFERRED COMPENSATION PLAN FOR DIRECTORS (1998 Restatement)" as adopted by the
Board of Directors of U.S. BANCORP effective as of January 1, 1998, as the same
may be amended from time to time thereafter.
1.2.8. PLAN YEAR -- the twelve (12) consecutive month period ending
on any Annual Valuation Date.
1.2.9. PRIOR PLAN STATEMENT -- the series of documents pursuant to
which the Plan was established effective as of January 1, 1988, and operated
thereafter until January 1, 1998.
1.2.10. USB -- U.S. BANCORP (formerly known as FIRST BANK SYSTEM,
INC.), a Delaware corporation, or any successor thereto.
1.2.11. VALUATION DATE -- the last day of each calendar month of the
Plan Year.
1.3. RULES OF INTERPRETATION. Whenever appropriate, words used herein in the
singular may be read in the plural, or words used herein in the plural may be
read in the singular; the masculine may include the feminine; and the words
"hereof," "herein" or "hereunder" or other similar compounds of the word "here"
shall mean and refer to this entire Plan Statement and not to any particular
paragraph or section of this Plan Statement unless the context clearly indicates
to the contrary. The titles given to the various sections of this Plan Statement
are inserted for convenience of reference only and are not part of this Plan
Statement, and they shall not be considered in determining the purpose, meaning
or intent of any provision hereof. Any reference in this Plan Statement to a
statute or regulation shall be considered also to mean and refer to any
subsequent amendment or replacement of that statute or regulation. This document
has been executed and delivered in the State of MINNESOTA and has been drawn in
conformity to the laws of that State
and shall be construed and enforced in accordance with the laws of the State of
MINNESOTA.
1.4. ADDITIONAL DEFINITIONS. When the following terms are used herein with
initial capital letters, they shall have the following meanings:
1.4.1. ACQUIRING PERSON -- any Person who or which, together with all
Affiliates and Associates of such person, is the Beneficial Owner, directly or
indirectly, of securities of USB representing 20% or more of the combined voting
power of USB's then outstanding securities, but shall not include any Company
Entity.
1.4.2. AFFILIATE -- shall have the meaning ascribed to the term
"Affiliate" in Rule 12b-2 promulgated under the Exchange Act.
1.4.3. ASSOCIATE -- shall have the meaning ascribed to such term in
Rule 12b-2 promulgated under the Exchange Act.
1.4.4. BENEFICIAL OWNER -- shall have the meaning ascribed to such
term in Rule 13d-3 promulgated under the Exchange Act.
1.4.5. BOARD OF DIRECTORS -- the board of directors of USB.
1.4.6. COMPANY ENTITY -- USB, any subsidiary of USB or any employee
benefit plan of USB or of any subsidiary of USB or any entity holding shares of
the voting capital stock of USB organized, appointed or established for, or
pursuant to the terms of, any such plan.
1.4.7. CONTINUING DIRECTOR -- any person who is a member of the Board
of Directors, while such person is a member of the Board of Directors, who is
not an Acquiring Person or an Affiliate or Associate of an Acquiring Person, or
a representative of an Acquiring Person or of any such Affiliate or Associate,
and who (x) was a member of the Board of Directors as of February 18, 1998 or
(y) subsequently becomes a member of the Board of Directors, if such person's
initial nomination for election or initial election to the Board of Directors
has been approved in advance by the Continuing Directors; provided that any
director designated by or on behalf of a Person who has entered into an
agreement with USB (or who is contemplating entering into such an agreement) to
effect a consolidation or merger of USB or a Company Entity, or other
reorganization, with or into one or more entities which are not Company
Entities, and any director that serves in connection with the act of the Board
of Directors of increasing the number of directors and filling vacancies in
connection with, or in contemplation of, any such transaction, shall not be
deemed to have received such advance approval for initial nomination or
election, and any such director shall not be deemed to be a Continuing Director,
in each case solely for
the purpose of determining whether the addition of members of the Board of
Directors in connection with, or in contemplation of, such transaction results
in a Full Change in Control under clause (b) of the definition of Full Change in
Control.
1.4.8. EXCHANGE ACT -- the Securities Exchange Act of 1934, as
amended.
1.4.9. FULL CHANGE IN CONTROL -- shall mean:
(a) the public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed
pursuant to Section 13(d) of the Exchange Act) by USB or any
Person that a Person (other than a Company Entity) has become
the Beneficial Owner, directly or indirectly, of securities of
USB (x) representing 20% or more, but not more than 50%, of
the combined voting power of USB's then outstanding securities
unless the transaction resulting in such ownership has been
approved in advance by the Continuing Directors or (y)
representing more than 50% of the combined voting power of
USB's then outstanding securities (regardless of any approval
by the Continuing Directors); or
(b) the Continuing Directors cease to constitute a majority of the
Board of Directors of USB or the Resulting Corporation, except
in accordance with the terms of a Permitted Transaction and
except as a result of the death, retirement or disability of
one or more Continuing Directors; or
(c) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the consolidated assets of USB and its
subsidiaries or the adoption of any plan of liquidation or
dissolution of USB.
1.4.10. PARTIAL CHANGE IN CONTROL -- shall mean:
(a) a consolidation or merger of USB or a Company Entity, or other
reorganization, with or into one or more entities which are
not Company Entities, as a result of which less than 60% of
the outstanding voting securities of the Resulting Corporation
are, or are to be, owned by former shareholders of USB as
determined immediately prior to consummation of such
transaction (excluding voting securities of the Resulting
Corporation owned, or to be owned, by such shareholders by
reason of their ownership prior to such transaction of
securities
of any entity other than USB) and as a result of which the
Continuing Directors constitute (i) more than 50% of the Board
of Directors of the Resulting Corporation or (ii) exactly 50%
of the Board of Directors of the Resulting Corporation if the
transaction resulting in such event is a Permitted
Transaction; or
(b) the public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed
pursuant to Section 13(d) of the Exchange Act) by USB or any
Person that a Person (other than a Company Entity) has become
the Beneficial Owner, directly or indirectly, of securities of
USB representing 20% or more, but not more than 50%, of the
combined voting power of USB's then outstanding securities if
the transaction resulting in such ownership has been approved
in advance by the Continuing Directors.
1.4.11. PERMITTED DIRECTOR -- a director who was a Continuing
Director immediately prior to consummation of a Permitted Transaction and any
director who fills a vacancy created by the termination of service as a director
or expiration of the term as a director of any Permitted Director if such person
was selected solely by the then current Permitted Directors.
1.4.12. PERMITTED TRANSACTION -- a transaction in which, pursuant to
a written agreement between USB and all Persons who have entered into an
agreement with USB to effect a transaction described in paragraph (a) of the
definition of Partial Change in Control, it is agreed that (w) the Chief
Executive Officer of USB immediately prior to the consummation of such
transaction shall be the Chief Executive Officer of the Resulting Corporation
for not less than three years following consummation of such transaction, (x)
upon termination of service of any Permitted Director for any reason, including
upon death, disability or retirement, prior to the expiration of such director's
term during such three-year period, the vacancy thereby created shall be filled
by a nominee selected solely by the Permitted Directors, (y) upon expiration of
the term of any Permitted Director during such three-year period, the nominee to
succeed such director shall be selected solely by the Permitted Directors and
(z) the parties will take other appropriate steps to ensure that the Board of
Directors of the Resulting Corporation will be evenly divided between Permitted
Directors and all directors designated by other parties to the transaction
during such three-year period. Notwithstanding the foregoing, such agreement may
provide that directors added to the Board of Directors (x) pursuant to an
expansion of the number of members of the Board of Directors approved by 75% of
the then current members of the Board of Directors or (y) pursuant to the terms
of any subsequent agreement relating to an acquisition by or of USB, shall not
be subject to the foregoing limitations. The determination of whether a
transaction constitutes a Permitted Transaction shall be made at the time of
consummation of
such transaction, and no subsequent events shall cause such transaction to no
longer constitute a Permitted Transaction.
1.4.13. PERSON -- shall have the meaning ascribed to such term as
such term is used in Sections 13(d) and 14(d) of the Exchange Act.
1.4.14. RESULTING CORPORATION -- the surviving corporation in any
consolidation, merger or other reorganization to which USB is a party; provided,
however, that if the surviving corporation in any such transaction is a
subsidiary of another corporation, then the Resulting Corporation is the
ultimate parent corporation of such surviving corporation; and provided,
further, that in the event of a consolidation, merger or other reorganization to
which a Company Entity (other than USB) is a party, then USB shall be deemed the
Resulting Corporation.
SECTION 2
PARTICIPATION
2.1. PARTICIPATION. Each Director of USB shall be a participant in the Plan as
of the first day the Director first becomes a Director.
2.2. ENROLLMENT. Prior to the first day of participation, the Director may
enroll in the Plan for the remainder of that Plan Year. Prior to the first day
of any subsequent Plan Year, a Director may make a new enrollment for that Plan
Year. Once made, the enrollment shall be irrevocable for the remainder of the
Plan Year with respect to which it is made. Each such enrollment, whether for
the initial Plan Year or for a subsequent Plan Year, shall designate in writing:
(a) the amount or portion of the Director's annual retainer and
meeting fees which shall not be paid to the Director but
instead shall be accumulated in this Plan under Section 3 and
Section 4 and distributed from this Plan under Section 6 and
Section 7; and
(b) the time and form in which the Account or portion of Account
attributable to such Plan Year's accumulation shall be paid to
the Director in accordance with Section 7.
2.3. REVOCATION. A Director's written enrollment for the 1998 Plan Year or any
later Plan Year shall continue in effect after the Plan Year with respect to
which it is made until an Event of Maturity occurs as to the Director or until
the last day of the
Plan Year in which the Director files a written revocation of the Director's
enrollment, whichever occurs first.
2.4. PRIOR YEARS' ENROLLMENTS. Notwithstanding the forgoing, elections made by
Directors about the payment of benefits under the Prior Plan Statement
attributable to accumulations for Plan Years ending before January 1, 1998,
shall not be modified by the adoption of this Plan Statement.
SECTION 3
ADDITIONS TO ACCOUNTS
USB shall credit monthly to the Account of each Director such amount as the
Director in his or her sole discretion shall have determined in accordance with
Section 2.2. The amount shall be separately determined by each Director and need
not be equal or bear a uniform relationship to the deferrals of other Directors.
The amount so allocated to a Director shall be credited to such Director's
Account as of the Valuation Date in the month for which it is made.
SECTION 4
ESTABLISHMENT AND ADJUSTMENT OF ACCOUNTS
4.1. ESTABLISHMENT OF ACCOUNTS. There shall be established for each Director an
unfunded bookkeeping Account which shall be adjusted each Valuation Date
4.2. ADJUSTMENT OF ACCOUNTS. As of each Valuation Date (the "current Valuation
Date"), the value of each Account determined as of the immediately preceding
Valuation Date (the "initial Account value") shall be increased (or decreased)
by the following adjustments made in the following sequence:
4.2.1. INTERMEDIATE DISTRIBUTIONS ADJUSTMENT. The initial Account
value shall be reduced by the total amount distributed in fact to (or with
respect to) the Director from such Account as of a date subsequent to the
immediately preceding Valuation Date but prior to the current Valuation Date.
4.2.2. INVESTMENT ADJUSTMENT FOR ACCOUNT. The initial Account value
of each Director's Account (as adjusted above) shall be increased by interest.
The rate shall be determined from time to time by USB. The rate may be changed
by USB without amendment of the Plan Statement and without notice to or the
consent of any Director, former Director or any Beneficiary. Beginning January
1, 1998, the rate for each month in a Plan Year shall be equal to the monthly
equivalent of one
hundred percent (100%) of the 120 month rolling average of the 10-year Treasury
Note, determined as of September 30 of the immediately preceding Plan Year. This
percentage shall be uniform for all Directors for the same Valuation Date but
may change from Valuation Date to Valuation Date.
4.2.3. CONTRIBUTION ADJUSTMENT. The initial Account value (as
adjusted above) shall be increased by the total amount, if any, credited to such
Account under Section 3 as of the current Valuation Date.
4.2.4. FINAL DISTRIBUTIONS ADJUSTMENT. The initial Account value (as
adjusted above) shall be reduced by the total amount distributed in fact to (or
with respect to) the Director from such Account as of the current Valuation
Date.
SECTION 5
VESTING OF ACCOUNT
The Account of each Director shall be fully (100%) vested at all times.
SECTION 6
MATURITY
6.1. EVENTS OF MATURITY. A Director's Account shall mature and shall become
distributable in accordance with Section 7 upon the earliest occurrence of any
of the following events while in the employment of USB or an Affiliate:
(a) his or her death, or
(b) his or her removal or resignation from the Board of Directors
of USB, whether voluntary or involuntary, or
(c) his or her Disability, or
(d) termination of the Plan.
6.2. DETERMINATION OF ACCOUNT. Upon the occurrence of an Event of Maturity
effective as to a Director, the value of such Director's Account as of the
Valuation Date coincident with or next following the Event of Maturity shall be
determined.
6.3. EFFECT OF MATURITY UPON FURTHER PARTICIPATION IN PLAN. On the occurrence of
an Event of Maturity, a Director shall cease to have any interest in the Plan
other than the right to receive payment of his or her Account as provided in
Section 7 hereof, adjusted from time to time as provided in Section 4.
SECTION 7
DISTRIBUTION
7.1. TIME OF DISTRIBUTION. Upon the occurrence of an Event of Maturity effective
as to a Director, USB shall commence payment of such Director's Account in the
manner designated by the Director in his or her enrollment.
7.1.1. FORM OF DISTRIBUTION. Distribution shall be made in whichever
of the following forms as the Director shall have designated in writing:
(a) In a series of substantially equal annual installments payable
over ten (10) years.
(b) In a single, lump sum payment.
7.1.2. TIME OF DISTRIBUTION. Distribution shall be made (in the case
of a single lump sum) or commenced (in the case of installments) as of the first
business day of January after the Director's Event of Maturity.
7.1.3. SUBSTANTIALLY EQUAL. Distributions shall be considered to be
substantially equal if the amount of the distribution required to be made for
each calendar year (the "distribution year") is determined by dividing the
amount of the Account as of the last Valuation Date in the calendar year
immediately preceding the distribution year (such preceding calendar year being
the "valuation year") by the number of remaining installment payments to be made
(including the distribution being determined). The amount of the Account as of
such Valuation Date shall be decreased by the amount of any distributions made
in the valuation year and after such Valuation Date.
7.1.4. DEFAULT. If for any reason a Director shall have failed to
make a written designation of form and time for distribution (including reasons
entirely beyond the control of the Director), the distribution shall be made in
a single lump sum during the January following the date the Director shall have
had an Event of Maturity. No spouse, former spouse, Beneficiary or other person
shall have any right to participate in the Director's selection of a form of
benefit.
7.1.5. CHANGE IN CONTROL. Notwithstanding the foregoing provisions of
this Section or any designation made by a Director, in the event of a Full
Change in Control the Plan shall be automatically terminated and every Account
shall be paid in a single lump sum distribution within thirty (30) days after
the Full Change in Control.
7.2. DESIGNATION OF BENEFICIARIES.
7.2.1. RIGHT TO DESIGNATE. Each Director may designate, upon forms to
be furnished by and filed with USB, one or more primary Beneficiaries or
alternative Beneficiaries to receive all or a specified part of such Director's
Account in the event of such Director's death. The Director may change or revoke
any such designation from time to time without notice to or consent from any
Beneficiary. No such designation, change or revocation shall be effective unless
executed by the Director and received by USB during the Director's lifetime.
7.2.2. FAILURE OF DESIGNATION. If a Director:
(a) fails to designate a Beneficiary,
(b) designates a Beneficiary and thereafter revokes such
designation without naming another Beneficiary, or
(c) designates one or more Beneficiaries and all such
Beneficiaries so designated fail to survive the Director,
such Director's Account, or the part thereof as to which such Director's
designation fails, as the case may be, shall be payable to the first class of
the following classes of automatic Beneficiaries with a member surviving the
Director and (except in the case of surviving issue) in equal shares if there is
more than one member in such class surviving the Director:
Director's surviving spouse
Director's surviving issue per stirpes and not per capita
Director's surviving parents
Director's surviving brothers and sisters
Representative of Director's estate.
7.2.3. DISCLAIMERS BY BENEFICIARIES. A Beneficiary entitled to a
distribution of all or a portion of a deceased Director's Account may disclaim
an interest therein subject to the following requirements. To be eligible to
disclaim, a Beneficiary must be a natural person, must not have received a
distribution of all or any portion of the Account at the time such disclaimer is
executed and delivered, and must have attained at least age twenty-one (21)
years as of the date of the
Director's death. Any disclaimer must be in writing and must be executed
personally by the Beneficiary before a notary public. A disclaimer shall state
that the Beneficiary's entire interest in the undistributed Account is
disclaimed or shall specify what portion thereof is disclaimed. To be effective,
duplicate original executed copies of the disclaimer must be both executed and
actually delivered to USB after the date of the Director's death but not later
than one hundred eighty (180) days after the date of the Director's death. A
disclaimer shall be irrevocable when delivered to USB. A disclaimer shall be
considered to be delivered to USB only when actually received by USB. USB shall
be the sole judge of the content, interpretation and validity of a purported
disclaimer. Upon the filing of a valid disclaimer, the Beneficiary shall be
considered not to have survived the Director as to the interest disclaimed. A
disclaimer by a Beneficiary shall not be considered to be a transfer of an
interest in violation of the provisions of Section 8. No other form of attempted
disclaimer shall be recognized by USB.
7.2.4. DEFINITIONS. When used herein and, unless the Director has
otherwise specified in the Director's Beneficiary designation, when used in a
Beneficiary designation, "issue" means all persons who are lineal descendants of
the person whose issue are referred to, including legally adopted descendants
and their descendants but not including illegitimate descendants and their
descendants; "child" means an issue of the first generation; "per stirpes" means
in equal shares among living children of the person whose issue are referred to
and the issue (taken collectively) of each deceased child of such person, with
such issue taking by right of representation of such deceased child; and
"survive" and "surviving" mean living after the death of the Director.
7.2.5. SPECIAL RULES. Unless the Director has otherwise specified in
the Director's Beneficiary designation, the following rules shall apply:
(a) If there is not sufficient evidence that a Beneficiary was
living at the time of the death of the Director, it shall be
deemed that the Beneficiary was not living at the time of the
death of the Director.
(b) The automatic Beneficiaries specified in Section 7.2.2 and the
Beneficiaries designated by the Director shall become fixed at
the time of the Director's death so that, if a Beneficiary
survives the Director but dies before the receipt of all
payments due such Beneficiary hereunder, such remaining
payments shall be payable to the representative of such
Beneficiary's estate.
(c) If the Director designates as a Beneficiary the person who is
the Director's spouse on the date of the designation, either
by name or by relationship, or both, the dissolution,
annulment or other
legal termination of the marriage between the Director and
such person shall automatically revoke such designation. (The
foregoing shall not prevent the Director from designating a
former spouse as a Beneficiary on a form executed by the
Director and received by USB after the date of the legal
termination of the marriage between the Director and such
former spouse, and during the Director's lifetime.)
(d) Any designation of a nonspouse Beneficiary by name that is
accompanied by a description of relationship to the Director
shall be given effect without regard to whether the
relationship to the Director exists either then or at the
Director's death.
(e) Any designation of a Beneficiary only by statement of
relationship to the Director shall be effective only to
designate the person or persons standing in such relationship
to the Director at the Director's death.
USB shall be the sole judge of the content, interpretation and validity of a
purported Beneficiary designation.
7.2.6. NO SPOUSAL RIGHTS. No spouse or surviving spouse of a Director
and no person designated to be a Beneficiary shall have any rights or interest
in the benefits accumulated under this Plan including, but not limited to, the
right to be the sole Beneficiary or to consent to the designation of
Beneficiaries (or the changing of designated Beneficiaries) by the Director.
7.3. DEATH PRIOR TO FULL DISTRIBUTION. If a Director dies after an Event of
Maturity but before distribution of such Director's Account has been completed,
the remaining undistributed Account shall be distributed in the same manner as
hereinbefore provided in Section 7.1. If, at the death of the Director, any
payment to the Director was due or otherwise pending but not actually paid, the
amount of such payment shall be included in the Account which are payable to the
Beneficiary (and shall not be paid to the Director's estate).
7.4. FACILITY OF PAYMENT. In case of the legal disability of a Director or
Beneficiary entitled to receive any distribution under the Plan, payment shall
be made, if USB shall be advised of the existence of such condition:
(a) to the duly appointed guardian, conservator or other legal
representative of such Director or Beneficiary, or
(b) to a person or institution entrusted with the care or
maintenance of the incompetent or disabled Director or
Beneficiary, provided such person or institution has satisfied
USB that the payment will be used for the best interest and
assist in the care of such Director or Beneficiary, and
provided further, that no prior claim for said payment has
been made by a duly appointed guardian, conservator or other
legal representative of such Director or Beneficiary.
Any payment made in accordance with the foregoing provisions of this section
shall constitute a complete discharge of any liability or obligation of USB
therefor.
SECTION 8
FUNDING OF PLAN
8.1. UNFUNDED AGREEMENT. The obligations of USB to make payments under this Plan
constitute only the unsecured (but legally enforceable) promise of USB to make
such payments. The Director shall have no lien, prior claim or other security
interest in any property of USB. USB is not required to establish or maintain
any fund, trust or account (other than a bookkeeping account or reserve) for the
purpose of funding or paying the benefits promised under this Plan. If such a
fund is established, the property therein shall remain the sole and exclusive
property of USB. USB will pay the cost of this Plan out of its general assets.
All references to accounts, accruals, gains, losses, income, expenses, payments,
custodial funds and the like are included merely for the purpose of measuring
USB's obligation to Directors in this Plan and shall not be construed to impose
on USB the obligation to create any separate fund for purposes of this Plan.
8.2. SPENDTHRIFT PROVISION. No Director or Beneficiary shall have any
transmissible interest in any Account nor shall any Director or Beneficiary have
any power to anticipate, alienate, dispose of, pledge or encumber the same while
in the possession or control of USB, nor shall USB recognize any assignment
thereof, either in whole or in part, nor shall any Account be subject to
attachment, garnishment, execution following judgment or other legal process
while in the possession or control of USB.
The power to designate Beneficiaries to receive the Account of a Director in the
event of such Director's death shall not permit or be construed to permit such
power or right to be exercised by the Director so as thereby to anticipate,
pledge, mortgage or encumber such Director's Account or any part thereof, and
any attempt of a Director so to exercise said power in violation of this
provision shall be of no force and effect and shall be disregarded by USB.
This section shall not prevent USB from exercising, in its discretion, any of
the applicable powers and options granted to it upon the occurrence of an Event
of Maturity, as such powers may be conferred upon it by any applicable provision
hereof.
SECTION 9
AMENDMENT AND TERMINATION
USB reserves the power to amend or terminate the Plan prior to a Full Change in
Control. No amendment or termination of the Plan, however, shall reduce a
Director's Account earned as of the date of such amendment unless the Director
so affected consents thereto in writing. A Director's Account earned as of the
date of an amendment or termination shall be determined as if the Director had
an Event of Maturity on that date. After a Full Change in Control, the Plan
cannot be amended or terminated (as applied to Directors who are Directors on
the date of the Full Change in Control) unless:
(a) all Accounts of all Directors as of the date of the Full
Change in Control have been paid, or
(b) eighty percent (80%) of all the Directors as of the date of
the Full Change in Control give written consent to such
amendment or termination.
SECTION 10
DETERMINATIONS -- RULES AND REGULATIONS
10.1. DETERMINATIONS. USB shall make such determinations as may be required from
time to time in the administration of the Plan. USB, in its sole discretion,
shall have the authority and responsibility to interpret and construe the Plan
Statement and to determine all factual and legal questions under the Plan,
including but not limited to the entitlement of Directors and Beneficiaries, and
the amounts of their respective interests. Each interested party may act and
rely upon all information reported to them hereunder and need not inquire into
the accuracy thereof, nor be charged with any notice to the contrary.
10.2. RULES AND REGULATIONS. Any rule not in conflict or at variance with the
provisions hereof may be adopted by USB.
10.3. METHOD OF EXECUTING INSTRUMENTS. Information to be supplied or written
notices to be made or consents to be given by USB pursuant to any provision of
this Plan Statement may be signed in the name of USB by any officer or director
thereof who has been authorized to make such certification or to give such
notices or consents.
10.4. INFORMATION FURNISHED BY DIRECTORS. USB shall not be liable or responsible
for any error in the computation of the Account of a Director resulting from any
misstatement of fact made by the Director, directly or indirectly, to USB, and
used by it in determining the Director's Account. USB shall not be obligated or
required to increase the Account of such Director which, on discovery of the
misstatement, is found to be understated as a result of such misstatement of the
Director. However, the Account of any Director which are overstated by reason of
any such misstatement shall be reduced to the amount appropriate in view of the
truth.
SECTION 11
PLAN ADMINISTRATION
11.1. USB. Except as hereinafter provided, functions generally assigned to USB
shall be discharged by the Compensation and Human Resources Committee of the
Board of Directors or delegated and allocated as provided herein.
11.2. CONFLICT OF INTEREST. If any member of the Board of Directors of USB to
whom authority has been delegated or redelegated hereunder shall have an Account
in the Plan, such Director shall have no authority as such Director with respect
to any matter specially affecting such Director's individual interest hereunder
(as distinguished from the interests of all Directors and Beneficiaries or a
broad class of Directors and Beneficiaries), all such authority being reserved
exclusively to the other Directors, to the exclusion of such Director, and such
Director shall act only in such Director's individual capacity in connection
with any such matter.
SECTION 12
DISCLAIMERS
Neither the terms of this Plan Statement nor the benefits hereunder nor the
continuance thereof shall be an obligation of any Director. USB shall not be
obliged to continue the Plan. The terms of this Plan Statement shall not give
any Director the right to be retained on the Board of Directors of USB. Neither
USB nor any of its
officers nor any member of its Board of Directors in any way secure or guarantee
the payment of any benefit or amount which may become due and payable hereunder
to any Director or to any Beneficiary or to any creditor of a Director or a
Beneficiary. Each Director, Beneficiary or other person entitled at any time to
payments hereunder shall look solely to the assets of USB for such payments or
to the Account distributed to any Director or Beneficiary, as the case may be,
for such payments. In each case where an Account shall have been distributed to
a former Director or a Beneficiary or to the person or any one of a group of
persons entitled jointly to the receipt thereof and which purports to cover in
full the benefit hereunder, such former Director or Beneficiary, or such person
or persons, as the case may be, shall have no further right or interest in the
other assets of USB. Neither USB nor any of its officers nor any member of its
Board of Directors shall be under any liability or responsibility for failure to
effect any of the objectives or purposes of the Plan by reason of the insolvency
of USB. USB and its officers and the members of its Board of Directors shall not
be liable for an act or omission of another person with regard to a
responsibility that has been allocated to or delegated to such other person
pursuant to the terms of this Plan Statement or pursuant to procedures set forth
in this Plan Statement.