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CORPORATE OFFICE PROPERTIES TRUST
SUPPLEMENTAL NONQUALIFIED DEFERRED
COMPENSATION PLAN
Amendment and Restatement
Effective as of May 1, 2002
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CORPORATE OFFICE PROPERTIES TRUST
EXECUTIVE DEFERRED COMPENSATION PLAN
Effective as Amended and Restated as of May 1, 2002
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS
1.1 ACCOUNT...............................................................1
1.2 BENEFICIARY...........................................................1
1.3 BOARD.................................................................1
1.4 CHANGE IN CONTROL.....................................................1
1.5 CODE..................................................................2
1.6 COMMON SHARES.........................................................2
1.7 COMPENSATION..........................................................2
1.8 COMPENSATION DEFERRAL ACCOUNT ........................................2
1.9 COMPENSATION DEFERRALS................................................2
1.10 DESIGNATION DATE......................................................2
1.11 EFFECTIVE DATE........................................................2
1.12 ELIGIBLE EMPLOYEE.....................................................2
1.13 EMPLOYER..............................................................2
1.14 EMPLOYER CONTRIBUTION CREDIT ACCOUNT..................................2
1.15 EMPLOYER CONTRIBUTION CREDITS.........................................2
1.16 ENTRY DATE............................................................3
1.17 FORM AND TIMING OF PAYMENT ELECTION FORM..............................3
1.18 LTIP..................................................................3
1.19 PARTICIPANT...........................................................3
1.20 PHANTOM SHARES........................................................3
1.21 PLAN..................................................................3
1.22 PLAN YEAR.............................................................3
1.23 SPONSOR...............................................................3
1.24 SPONSOR SHARES FUND...................................................3
1.25 TOTAL AND PERMANENT DISABILITY........................................3
1.26 TRUST.................................................................3
1.27 TRUSTEE...............................................................3
1.28 UNREALIZED EQUITY GAINS...............................................3
1.29 UNREALIZED EQUITY GAINS ACCOUNT.......................................4
1.30 UNREALIZED EQUITY GAINS CONTRIBUTIONS.................................4
1.31 VALUATION DATE........................................................4
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ARTICLE 2
ELIGIBILITY AND PARTICIPATION
2.1 REQUIREMENTS..........................................................4
2.2 RE-EMPLOYMENT.........................................................4
2.3 CHANGE OF EMPLOYMENT CATEGORY.........................................4
ARTICLE 3
CONTRIBUTIONS AND CREDITS
3.1 PARTICIPANT CONTRIBUTIONS AND CREDITS.................................5
(a) COMPENSATION DEFERRALS.......................................5
(b) UNREALIZED EQUITY GAINS CONTRIBUTIONS........................5
3.2 EMPLOYER CONTRIBUTION CREDITS.........................................6
3.3 CONTRIBUTIONS TO THE TRUST............................................7
ARTICLE 4
ALLOCATION OF FUNDS
4.1 ALLOCATION OF DEEMED EARNINGS OR LOSSES ON ACCOUNTS...................8
4.2 ACCOUNTING FOR DISTRIBUTIONS..........................................8
4.3 SEPARATE ACCOUNTS.....................................................8
4.4 INTERIM VALUATIONS....................................................9
4.5 DEEMED INVESTMENT DIRECTIONS OF PARTICIPANTS..........................9
4.6 DEEMED INVESTMENTS IN PHANTOM SHARES.................................10
4.7 EXPENSES AND TAXES...................................................11
ARTICLE 5
ENTITLEMENT TO BENEFITS
5.1 FIXED PAYMENT DATES; TERMINATION OF EMPLOYMENT.......................11
5.2 IMMEDIATE DISTRIBUTION ELECTION......................................11
5.3 HARDSHIP DISTRIBUTIONS...............................................12
5.4 RE-EMPLOYMENT OF RECIPIENT...........................................12
ARTICLE 6
DISTRIBUTION OF BENEFITS
6.1 AMOUNT...............................................................13
6.2 METHOD OF PAYMENT....................................................13
6.3 DEATH BENEFITS.......................................................13
6.4 DISABILITY BENEFITS..................................................14
6.5 CHANGE IN CONTROL....................................................14
ARTICLE 7
BENEFICIARIES; PARTICIPANT DATA
7.1 DESIGNATION OF BENEFICIARIES.........................................14
7.2 INFORMATION TO BE FURNISHED BY PARTICIPANTS AND
BENEFICIARIES; INABILITY TO LOCATE PARTICIPANTS OR
BENEFICIARIES........................................................15
ARTICLE 8
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ADMINISTRATION
8.1 ADMINISTRATIVE AUTHORITY.............................................15
8.2 UNIFORMITY OF DISCRETIONARY ACTS.....................................16
8.3 LITIGATION...........................................................16
8.4 CLAIMS PROCEDURE.....................................................16
ARTICLE 9
AMENDMENT
9.1 RIGHT TO AMEND.......................................................17
9.2 AMENDMENTS TO ENSURE PROPER CHARACTERIZATION OF PLAN.................18
ARTICLE 10
TERMINATION
10.1 SPONSOR'S RIGHT TO TERMINATE OR SUSPEND PLAN.........................18
10.2 AUTOMATIC TERMINATION OF PLAN........................................18
10.3 SUSPENSION OF DEFERRALS..............................................18
10.4 ALLOCATION AND DISTRIBUTION..........................................18
10.5 SUCCESSOR TO SPONSOR.................................................18
10.6 WITHDRAWAL OR TERMINATION BY AN EMPLOYER.............................19
ARTICLE 11
THE TRUST
11.1 ESTABLISHMENT OF TRUST...............................................19
ARTICLE 12
MISCELLANEOUS
12.1 LIABILITY OF SPONSOR; LIMITATIONS ON LIABILITY OF SPONSOR OR
EMPLOYER.............................................................19
12.2 CONSTRUCTION.........................................................20
12.3 SPENDTHRIFT PROVISION................................................20
12.4 SPONSOR SHARES SUBJECT TO THE PLAN...................................20
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CORPORATE OFFICE PROPERTIES TRUST
SUPPLEMENTAL NONQUALIFIED DEFERRED COMPENSATION PLAN
Effective as Amended and Restated as of May 1, 2002
RECITALS
This Corporate Office Properties Trust Supplemental Nonqualified
Deferred Compensation Plan (the "Plan") is adopted by Corporate Office
Properties Trust (the "Sponsor") for certain executive and management employees
of those affiliates of the Sponsor which are admitted as adopting employers
under the Plan (each such affiliate hereinafter is referred to as the
"Employer"). The purpose of the Plan, an amendment and restatement of the
nonqualified deferred compensation plan maintained immediately prior to the
Effective Date for the Employers' executive and management employees, is to
offer participants an opportunity to elect to defer the receipt of compensation
in order to provide deferred compensation benefits taxable pursuant to section
451 of the Internal Revenue Code of 1986, as amended (the "Code"), and to
provide a deferred compensation vehicle to which the Sponsor may credit certain
amounts on behalf of participants. The Plan is intended to be a "top-hat" plan
(i.e., an unfunded deferred compensation plan maintained for a select group of
management or highly-compensated employees) under sections 201(2), 301(a)(3) and
401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA").
Accordingly, the following amended and restated Plan is adopted.
Effective as of the Effective Date, any amounts credited on a Participant's
behalf under the Plan immediately prior to the Effective Date shall be credited
to such Participant's Compensation Deferral Account under this amended and
restated Plan.
ARTICLE 1
DEFINITIONS
1.1 ACCOUNT means the balance credited to a Participant's or
Beneficiary's Plan account, including amounts credited under the Compensation
Deferral, the Unrealized Equity Gains Contribution Account and the Employer
Contribution Credit Account and deemed income, gains and losses (as determined
by the Employer, in its discretion) credited thereto. A Participant's or
Beneficiary's Account shall be determined as of the date of reference.
1.2 BENEFICIARY means any person or person so designated in
accordance with the provisions of Article 7.
1.3 BOARD means the Sponsor's Board of Trustees, or a committee
thereof duly authorized to make determinations and act for the Board under this
Plan.
1.4 CHANGE IN CONTROL means a transaction or series of
transactions occurring after the Effective Date that constitutes a "change of
control", as defined in the LTIP, as amended from time to time.
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1.5 CODE means the Internal Revenue Code of 1986 and the
regulations thereunder, as amended from time to time.
1.6 COMMON SHARES means the Sponsor's common shares of beneficial
interest, $.01 par value per share.
1.7 COMPENSATION means the total current cash remuneration,
including regular salary and bonus awards, paid by the Employer to an Eligible
Employee with respect to his or her service for the Employer (as determined by
the Employer, in its discretion).
1.8 COMPENSATION DEFERRAL ACCOUNT is defined in Section 3.1.
1.9 COMPENSATION DEFERRALS is defined in Section 3.1.
1.10 DESIGNATION DATE means the date or dates as of which a
designation of deemed investment directions by an individual pursuant to Section
4.5, or any change in a prior designation of deemed investment directions by an
individual pursuant to Section 4.5, shall become effective. The Designation
Dates in any Plan Year shall be designated by the Sponsor.
1.11 EFFECTIVE DATE means the effective date of the Plan's
amendment and restatement as set forth herein, which shall be May 1, 2002.
1.12 ELIGIBLE EMPLOYEE means, for any Plan Year (or applicable
portion thereof), a person employed by the Employer as a Director (or at an
equivalent level) or above, who is determined by the Sponsor to be a member of a
select group of management or highly compensated employees of the Employer and
who is designated by the Board to be an Eligible Employee under the Plan.
By each November 1 (or before the Effective Date for the
Plan's first Plan Year), the Sponsor shall notify those individuals, if any, who
will be Eligible Employees for the next Plan Year. If the Sponsor determines
that an individual first becomes an Eligible Employee during a Plan Year, the
Sponsor shall notify such individual of its determination and of the date during
the Plan Year on which the individual shall first become an Eligible Employee.
1.13 EMPLOYER means any affiliated or related corporation or
business organization which agrees, with the consent of the Sponsor, to
become an Employer under the Plan. As of the Effective Date, each of the
following is an Employer under the Plan: (i) Corporate Office Properties,
L.P.; (ii) Corporate Development Services, L.L.C.; (iii) Corporate Realty
Management, L.L.C.; and (iv) Martin G. Knott & Associates, L.L.C.
1.14 EMPLOYER CONTRIBUTION CREDIT ACCOUNT is defined in Section
3.2.
1.15 EMPLOYER CONTRIBUTION CREDITS is defined in Section 3.2.
1.16 ENTRY DATE with respect to an individual means the first day
of the pay period following the date on which the individual first becomes an
Eligible Employee.
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1.17 FORM AND TIMING OF PAYMENT ELECTION FORM means the form or
forms on which a Participant elects the form and timing of the Participant's
Plan benefit.
1.18 LTIP means the Corporate Office Properties Trust 1998 Long
Term Incentive Plan, as the same may be amended from time to time.
1.19 PARTICIPANT means any person so designated in accordance with
the provisions of Article 2, including, where appropriate according to the
context of the Plan, any former employee who is or may become (or whose
Beneficiaries may become) eligible to receive a benefit under the Plan.
1.20 PHANTOM SHARES means an artificial unit of value, the amount
of one unit of which varies with the value of one share of Common Shares. Except
as otherwise provided herein, all distributions to a Participant or Beneficiary
with respect to Phantom Shares shall be made in Common Shares.
1.21 PLAN means this Corporate Office Properties Trust Supplemental
Nonqualified Deferred Compensation Plan, as amended from time to time.
1.22 PLAN YEAR means the twelve (12) month period (the eight (8)
month period in the case of the Plan's first Plan Year) ending on the December
31 of each year during which the Plan is in effect.
1.23 SPONSOR means Corporate Office Properties Trust and its
successors and assigns unless otherwise herein provided.
1.24 SPONSOR SHARES FUND means an account maintained on the books
of the Sponsor reflecting credits to Participants' Accounts in Phantom Shares.
1.25 TOTAL AND PERMANENT DISABILITY means the classification of a
Participant as "disabled" pursuant to the group long term disability plan
maintained by the Participant's Employer or the Sponsor, or a successor to such
plan (or, if there is no such plan, as reasonably determined by the Sponsor).
1.26 TRUST means the Trust described in Article 11.
1.27 TRUSTEE means the trustee of the Trust described in Article
11.
1.28 UNREALIZED EQUITY GAINS, with respect to a given option award
or restricted share award granted to a particular Participant under the LTIP,
means, (i) in the case of options, the difference in dollar value, determined as
of the date of an election to convert the option to an Unrealized Equity Gains
Contribution hereunder, between the exercise price of the option and the fair
market value of the underlying Common Shares as of the date of such election or,
(ii) in the case of restricted shares, the fair market value of the restricted
shares elected to be converted to an Unrealized Equity Gains Contribution
hereunder determined on the date of such election. In each case, fair market
value is determined with reference to the closing price of the shares of Common
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Shares underlying the option or held as restricted shares on the day that
coincides with the election, or if such day is not a trading day, on the next
trading day (or on such other date as the Sponsor shall reasonably elect).
1.29 UNREALIZED EQUITY GAINS ACCOUNT is defined in Section 3.1.
1.30 UNREALIZED EQUITY GAINS CONTRIBUTIONS means contributions made
under Section 3.1.
1.31 VALUATION DATE means the last day of each Plan Year and any
other date that the Sponsor, in its sole discretion, designates as a Valuation
Date.
ARTICLE 2
ELIGIBILITY AND PARTICIPATION
2.1 REQUIREMENTS. Every Eligible Employee on the Effective Date
shall be eligible to become a Participant on the Effective Date. Every other
Eligible Employee shall be eligible to become a Participant on the first Entry
Date occurring on or after the date on which he or she becomes an Eligible
Employee. No individual shall become a Participant, however, if he or she is not
an Eligible Employee on the date his or her participation is to begin.
Participation in the Compensation Deferral and Unrealized
Equity Gains Contribution Account portion of the Plan is voluntary. In order to
participate in those portions of the Plan, an otherwise Eligible Employee must
make written application in such manner as may be required by Section 3.1 and by
the Sponsor and must agree to make Compensation Deferrals or Unrealized Equity
Gains Contributions as provided in Article 3. An Eligible Employee shall have
the right to make Unrealized Equity Gains Contributions only as provided by the
Sponsor in a Notice of Right to Conversion Contribution and only subject to the
terms and conditions specified in the Notice.
Participation in the Employer Contribution Credit Account
portion of the Plan is automatic and does not require a Participant's election
to participate.
2.2 RE-EMPLOYMENT. If a Participant whose employment with the
Employer is terminated is subsequently re-employed, he or she shall become a
Participant in accordance with the provisions of Section 2.1.
2.3 CHANGE OF EMPLOYMENT CATEGORY. During any period in which a
Participant remains in the employ of the Employer, but ceases to be an Eligible
Employee, he or she shall not be eligible to make Compensation Deferrals or
Unrealized Equity Gains Contributions hereunder or to receive Employer
Contribution Credits hereunder.
ARTICLE 3
CONTRIBUTIONS AND CREDITS
3.1 PARTICIPANT CONTRIBUTIONS AND CREDITS.
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(a) COMPENSATION DEFERRALS. In accordance with rules
established by the Sponsor and subject to such amount limitations as might be
imposed by the Sponsor in its discretion, a Participant may elect to defer
Compensation which is due to be earned and which would otherwise be paid to the
Participant, in any fixed periodic dollar amounts or percentages designated by
the Participant. Amounts so deferred will be considered a Participant's
"Compensation Deferrals." Ordinarily, a Participant shall make such an election
with respect to a coming twelve (12) month Plan Year during the period beginning
on the November 1 and ending on the November 30 of the prior calendar year, or
during such other period as might be established by the Sponsor.
Compensation Deferrals shall be made through regular payroll
deductions or through an election by the Participant to defer the payment of a
bonus not yet payable to him or her at the time of the election. The Participant
may change his or her regular payroll deduction Compensation Deferral amount as
of, and by written notice delivered to the Employer prior to, the beginning of
any regular payroll period, with such change being first effective for
Compensation to be earned in that payroll period. In the case of bonus payment
deferrals, the Participant may reduce his or her bonus due to be paid by the
Employer by delivering written notice to the Employer of the bonus Compensation
Deferral amount prior to the date the applicable bonus is first due to be paid.
Once made, a Compensation Deferral regular payroll deduction
election shall continue in force only for the Plan Year to which the election
relates, unless changed as provided above. A Compensation Deferral bonus payment
election shall continue in force only for the bonus payment for which the
election is specifically effective. Compensation Deferrals shall be deducted by
the Employer from the pay of a deferring Participant and shall be credited to
the Compensation Deferral Account of the deferring Participant.
There shall be established and maintained a separate
Compensation Deferral Account in the name of each Participant to which shall be
credited or debited: (a) amounts equal to the Participant's Compensation
Deferrals; and (b) amounts equal to any deemed earnings or losses (to the extent
realized, based upon deemed fair market value of the Compensation Deferral
Account's deemed assets, as determined by the Sponsor, in its discretion)
attributable or allocable thereto. With respect to any Participant having an
amount credited on his or her behalf under the Plan immediately prior to the
Effective Date, such amount shall, as of the Effective Date, be credited to the
Participant's Compensation Deferral Account.
A Participant shall at all times be 100% vested in amounts
credited to his or her Compensation Deferral Account.
(b) UNREALIZED EQUITY GAINS CONTRIBUTIONS. In accordance
with rules established by the Sponsor, a Participant may elect to have amounts
in respect of Unrealized Equity Gains made as Unrealized Equity Gains
Contributions to the Participant's Unrealized Equity Gains Contribution Account.
The value of the Unrealized Equity Gains Contributions to be credited to the
Participant's Account shall be the value of the Unrealized Equity Gains
converted as determined pursuant to Section 1.28.
A Participant shall be entitled to make an Unrealized
Equity Gains Contribution solely at the time and in the form and manner
determined by the Sponsor and communicated to the Participant. No Participant
shall have a right to make an Unrealized Equity
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Gains Contribution unless and until notified in writing by the Sponsor and only
to the extent provided in such notice.
An Unrealized Equity Gains Contribution election
shall be made by a Participant with respect to options granted under the LTIP no
earlier than the date on which the options become exercisable and no later than
the date on which the options are exercised or lapse. An Unrealized Equity Gains
Contribution election shall be made by a Participant with respect to restricted
shares granted under the LTIP no earlier than three (3) months prior to the date
on which the restricted shares are to become unrestricted and no later than the
day before the date on which the restricted shares are to become unrestricted;
provided, however, that, if a Participant makes an Unrealized Equity Gains
Contribution election with respect to restricted shares and events occur or
conditions exist that would have caused the restricted shares to be forfeited,
to the extent of any such forfeiture, the Unrealized Equity Gains Contribution
shall be null and void and the forfeiture amount (determined by the Sponsor in
its discretion) shall be returned to the Sponsor.
There shall be established and maintained a separate
Unrealized Equity Gains Contribution Account in the name of each Participant to
which shall be credited or debited: (a) amounts equal to the Participant's
Unrealized Equity Gains Contribution; and (b) amounts equal to any deemed
earnings or losses (to the extent realized, based upon deemed fair market value
of the Unrealized Equity Gains Contribution Account's deemed assets, as
determined by the Sponsor, in its discretion) attributable or allocable thereto.
A Participant shall at all times be 100% vested in amounts
credited to his or her Unrealized Equity Gains Contribution Account.
3.2 EMPLOYER CONTRIBUTION CREDITS. There shall be established and
maintained a separate Employer Contribution Credit Account in the name of each
Participant. There shall be established the following two (2) sub-accounts under
a Participant's Employer Contribution Credit Account: (a) the Employer
Make-Whole Contribution Sub-Account; and (b) the Employer Discretionary
Contribution Sub-Account. Each such Sub-Account shall be credited or debited, as
applicable, with (a) amounts equal to the Employer's Contribution Credits
credited to that Sub-Account; and (b) amounts equal to any deemed earnings and
losses (to the extent realized, based upon deemed fair market value of the
Sub-Account's deemed assets as determined by the Sponsor, in its discretion)
allocated to that Sub-Account.
(a) Employer Contribution Credits may be credited to the
Employer Make-Whole Contribution Sub-Accounts of Participants who are eligible
to receive a matching contribution allocation under the Employer's tax-qualified
retirement plan. The Sponsor shall credit such contributions with such
frequency, and in such amounts, as the Sponsor determines in its sole
discretion, including, for example:
(i) crediting such contributions at the close of
each Plan Year in an amount equal to the excess of: (A) the matching
contributions that would be made by the Employer under the Employer's
tax-qualified retirement plan for the Plan Year, calculated as if Participant
Compensation Deferrals hereunder for the Plan Year had instead been made to the
Employer's tax-qualified retirement plan, but using the Participant's
Compensation for the Plan Year rather than the Employer's tax-qualified
retirement plan definition of "compensation" and calculated without regard
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to the limits on recognizable compensation and employee deferrals under the
Employer's tax-qualified retirement plan resulting from the application of the
Code's non-discrimination testing requirements; over (B) the matching
contribution actually made by the Employer to the Employer's tax-qualified
retirement plan for the Plan Year.
(ii) the amount by which the matching
contribution to the Employer's tax-qualified retirement plan on behalf of a
Participant is reduced on account of the inability of the Employer's
tax-qualified retirement plan to take into account in calculating Employer
contributions thereunder Compensation Deferrals under this Plan.
A Participant shall become vested in amounts (if any)
credited to his or her Employer Make-Whole Contribution Sub-Account according to
the vesting schedule applicable to matching contributions under the Employer's
tax-qualified retirement plan or according to any other vesting schedule adopted
by the Board, in its discretion.
(b) The Employer Contribution Credits credited to a
Participant's Employer Discretionary Contribution Sub-Account for any particular
Plan Year shall be an amount (if any) determined by the Board, in its
discretion. The Sponsor shall credit such contributions on behalf of such
individuals, in such amounts and with such frequency, and subject to such
vesting requirements, as the Board determines in its sole discretion.
3.3 CONTRIBUTIONS TO THE TRUST. Except as to amounts credited
as Phantom Shares under Section 4.6, an amount shall be contributed by the
Sponsor to the Trust maintained under Section 11.1 equal to the amount(s)
required to be credited to the Participant's Account under Sections 3.1 and
3.2. The Sponsor shall make a good faith effort to contribute these amounts
to the Trust as soon as practicable following the date on which the
contribution credit amount(s) are determined.
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ARTICLE 4
ALLOCATION OF FUNDS
4.1 ALLOCATION OF DEEMED EARNINGS OR LOSSES ON ACCOUNTS. Subject
to such limitations as may from time to time be required by law, imposed by the
Sponsor or the Trustee or contained elsewhere in the Plan (including Section
4.6), and subject to such operating rules and procedures as may be imposed from
time to time by the Sponsor, prior to the date on which a direction will become
effective, the Participant shall have the right to direct the Sponsor as to how
amounts in his or her Account shall be deemed to be invested. The Sponsor, may,
but is not required to, direct the Trustee to invest the account maintained in
the Trust on behalf of the Participant pursuant to the deemed investment
directions the Sponsor properly has received from the Participant.
The value of the Participant's Account shall be equal to the
value of the deemed investments maintained under the Trust on behalf of the
Participant plus, if applicable, any Phantom Shares deemed to be held in the
Participant's Sponsor Shares Fund. As of each valuation date of the Trust, the
Participant's Account will be credited or debited to reflect the Participant's
deemed investments of the Trust. The Participant's Plan Account will be credited
or debited with the increase or decrease in the realizable net asset value or
credited interest, as applicable, of the designated deemed investments, as
follows. As of each Valuation Date, an amount equal to the net increase or
decrease in realizable net asset value or credited interest, as applicable (as
determined by the Trustee), of each deemed investment option within the Account
since the preceding Valuation Date shall be allocated among all Participants'
Accounts deemed to be invested in that investment option in accordance with the
ratio which the portion of the Account of each Participant which is deemed to be
invested within that investment option, determined as provided herein, bears to
the aggregate of all amounts deemed to be invested within that investment
option.
4.2 ACCOUNTING FOR DISTRIBUTIONS. As of the date of any
distribution hereunder, the distribution made hereunder to the Participant or
his or her Beneficiary or Beneficiaries shall be charged to such Participant's
Account. If a cash distribution is requested, the amount of the distribution
shall first be charged against the investments of the Trust other than the
Sponsor Shares Fund in which the Participant's Account is deemed to be invested,
on a pro rata basis, until such deemed investments are exhausted. If an in-kind
distribution is requested, the amount of the distribution shall be charged on a
pro rata basis against all the investments of the Trust in which the
Participant's Account is deemed to be invested.
4.3 SEPARATE ACCOUNTS. A separate bookkeeping account under the
Plan shall be established and maintained by the Sponsor to reflect the Account
for each Participant with bookkeeping sub-accounts to show separately the
Participant's Compensation Deferral Accounts, the Participant's Unrealized
Equity Gains Contribution Account, and the Participant's Employer Contribution
Credit Account. Separate sub-accounts shall also be maintained to reflect
portions of a Participant's Unrealized Equity Gaines Contribution Account
representing the Plan's Sponsor Shares Fund and, if different, the Plan's other
deemed investment categories. Each sub-account will separately account for the
credits and debits described in Article 3. In addition, the Accounts of those
Participants employed by one Employer shall be accounted for separately from
the Accounts of Participants employed by other Employers.
4.4 INTERIM VALUATIONS. If it is determined by the Sponsor that the
value of a Participant's Account as of any date on which distributions are to be
made differs materially from the value of the Participant's Account on the prior
Valuation Date upon which the distribution is to
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be based, the Sponsor, in its discretion, shall have the right to designate any
date in the interim as a Valuation Date for the purpose of revaluing the
Participant's Account so that the Account will, prior to the distribution,
reflect its share of such material difference in value.
4.5 DEEMED INVESTMENT DIRECTIONS OF PARTICIPANTS. Subject to such
limitations as may from time to time be required by law, imposed by the Sponsor
or the Trustee or contained elsewhere in the Plan (including Section 4.6), and
subject to such operating rules and procedures as may be imposed from time to
time by the Sponsor, prior to and effective for each Designation Date, each
Participant may communicate to the Sponsor a direction (in accordance with (a),
below) as to how his or her Plan Accounts should be deemed to be invested among
such categories of deemed investments as may be made available by the Sponsor
hereunder, which may be unlimited, at the Sponsor's sole discretion. Such
direction shall designate the percentage (in any whole percent multiples) of
each portion of the Participant's Plan Accounts which is requested to be deemed
to be invested in such categories of deemed investments, and shall be subject to
the following rules:
(a) Any initial or subsequent deemed investment direction
shall be in writing, on a form supplied by and filed with the Sponsor, and/or,
as required or permitted by the Sponsor, shall be by oral designation and/or
electronic transmission designation. A designation shall be effective as of the
Designation Date next following the date the direction is received and accepted
by the Sponsor on which it would be reasonably practicable for the Sponsor to
effect the designation.
(b) All amounts credited to the Participant's Account
shall be deemed to be invested in accordance with the then effective deemed
investment direction, and as of the Designation Date with respect to any new
deemed investment direction, all or a portion of the Participant's Account at
that date shall be reallocated among the designated deemed investment funds
according to the percentages specified in the new deemed investment direction
unless and until a subsequent deemed investment direction shall be filed and
become effective. An election concerning deemed investment choices shall
continue indefinitely as provided in the Participant's most recent investment
direction form provided by and filed with the Sponsor.
(c) If the Sponsor receives an initial or revised deemed
investment direction which it deems to be incomplete, unclear or improper, the
Participant's investment direction then in effect shall remain in effect (or, in
the case of a deficiency in an initial deemed investment direction, the
Participant shall be deemed to have filed no deemed investment direction) until
the next Designation Date, unless the Sponsor provides for, and permits the
application of, corrective action prior thereto.
(d) If the Sponsor possesses (or is deemed to possess as
provided in (c), above) at any time directions as to the deemed investment of
less than all of a Participant's Account, the Participant shall be deemed to
have directed that the undesignated portion of the Account be deemed to be
invested in a money market, fixed income or similar fund made available under
the Plan as determined by the Sponsor in its discretion.
(e) Each Participant hereunder, as a condition to his or
her participation hereunder, agrees to indemnify and hold harmless the Sponsor,
the Employer and their agents
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and representatives from any losses or damages of any kind relating to the
deemed investment of the Participant's Account hereunder.
(f) Each reference in this Section to a Participant shall
be deemed to include, where applicable, a reference to a Beneficiary of a
deceased Participant.
4.6 DEEMED INVESTMENTS IN PHANTOM SHARES. Unless the Sponsor, in
its sole discretion, permits otherwise, Participants' Unrealized Equity Gains
Contributions automatically will be deemed to be invested in Phantom Shares,
through the Sponsor Shares Fund.
Unless the Sponsor, in its sole discretion, permits otherwise,
a Participant may not transfer any portion of his or her Account from the
Sponsor Shares Fund into another deemed investment option, nor may a Participant
transfer any amounts from another deemed investment option into the Sponsor
Shares Fund.
All amounts invested in Phantom Shares shall be treated as if
they had been invested in shares of Common Shares purchased from the Sponsor at
fair market value, determined pursuant to Section 1.20.
Unless the Sponsor, in its sole discretion, permits otherwise,
all distributions with respect to the portion of a Participant's Account
allocated to the Sponsor Shares Fund shall be made solely in shares of Common
Shares. For purposes of making distributions with respect to amounts allocated
to the Sponsor Shares Fund, any fractional shares credited to the Participant's
Account shall be rounded up to the nearest full share.
In the event that the Sponsor declares a cash dividend to the
holders of its Common Shares, with respect to each Participant deemed to hold
Phantom Shares in the Sponsor Shares Fund, the Sponsor shall credit the
Participant's Compensation Deferral Account with an amount equal to that amount
of cash that a holder of a share of Common Shares would receive multiplied by
the shares of Phantom Shares credited to the Participant's Sponsor Shares Fund
on the date of record of such dividend. Such contributions shall be treated as
Compensation Deferrals for all purposes of this Plan, including being eligible
for Participant investment direction among the Plan's deemed investments, except
that the same shall not be considered Compensation Deferrals for any
"Make-Whole" Employer Contributions made under the Plan.
Despite the foregoing, the Sponsor may, but need not, prohibit
or delay the liquidation, disposition, or acquisition of any Phantom Shares
units by any Participant who is subject to short swing trading liability under
Section 16(b) of the Securities and Exchange Act of 1934 if said liquidation,
disposition, or acquisition may result in the imposition of such liability.
4.7 EXPENSES AND TAXES. Expenses, including Trustee fees,
associated with the administration or operation of the Plan shall be paid by
the Sponsor from its general assets unless the Sponsor elects to charge such
expenses against the appropriate Participant's Account or Participants'
Accounts. Any taxes allocable to an Account (or portion thereof) maintained
under the Plan which are payable prior to the distribution of the Account (or
portion thereof), as determined by the Sponsor, shall be paid by the Sponsor
unless
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the Sponsor elects to charge such taxes against the appropriate Participant's
Account or Participants' Accounts.
ARTICLE 5
ENTITLEMENT TO BENEFITS
5.1 FIXED PAYMENT DATES; TERMINATION OF EMPLOYMENT. On his or her
Form and Timing of Payment Election Form, a Participant may select a fixed
payment date for the payment or commencement of payment of that portion of his
or her vested Account attributable to Compensation Deferrals, Unrealized Equity
Gains Contributions and/or Employer Contribution Credits made by the Participant
or on the Participant's behalf during the period indicated in the Form and
Timing of Payment Election Form which portion will be valued and payable
according to the provisions of Article 6. Such payment dates may be extended to
later dates so long as elections to so extend the dates are made by the
Participant at least six (6) months prior to the date on which the distribution
is to be made or commence. Such payment dates may not be accelerated, except as
provided in Section 5.2.
A Participant who selects payment or commencement of payment
of the designated portion of his or her vested Account on a fixed date or dates
shall receive payment of the designated portion of his or her vested Account at
the earlier of such fixed payment date or dates (as extended, if applicable) or
his or her termination of employment with the Employer.
Any fixed payment date elected by a Participant as provided
above must be a date no earlier than the January 1 of the third calendar year
after the calendar year in which the election is made.
If a Participant does not make an election as provided above
for any particular amounts hereunder, and the Participant terminates employment
with the Employer for any reason, the Participant's vested Account at the date
of such termination shall be valued and payable at or commencing at such
termination according to the provisions of Article 6.
5.2 IMMEDIATE DISTRIBUTION ELECTION. In addition to a
Participant's option to have payment or commencement of payment of his or her
vested Account occur on the fixed payment date described in Section 5.1 or on
the Participant's termination of employment as described in Section 5.1, a
Participant may elect to have his or her vested Account (or a portion
thereof) paid or commence to be paid immediately upon his or her election.
Any amount paid pursuant to this Section shall be subject to a ten percent
(10%) penalty, with the amount of the penalty being forfeited by the
Participant and returned to the Sponsor. In addition, a Participant who
elects an immediate distribution under this Section shall not be eligible to
make, or to have made on his or her behalf, any contributions to the Plan for
the one (1) year period beginning on the date of receipt of the immediate
distribution.
Any Participant wishing to elect an immediate distribution
pursuant to this Section must complete an Immediate Distribution Election Form.
The distribution shall occur or commence as soon as is administratively feasible
following the Sponsor's receipt of the Immediate Distribution Election Form.
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Notwithstanding the foregoing, the Sponsor may but need not
deny an immediate distribution election made by any Participant who is subject
to short-swing trading liability of Section 16(b) of the Securities and Exchange
Act of 1934 under circumstances in which said distribution may result in the
imposition of such liability.
5.3 HARDSHIP DISTRIBUTIONS. In the event of financial hardship of
the Participant, as hereinafter defined, the Participant may apply to the
Sponsor for the distribution of all or any part of his or her vested Account.
The Sponsor shall consider the circumstances of each such case, and the best
interests of the Participant and his or her family, and shall have the right, in
its sole discretion, if applicable, to allow such distribution, or, if
applicable, to direct a distribution of part of the amount requested, or to
refuse to allow any distribution. Upon a finding of financial hardship, the
Sponsor shall direct that the appropriate distribution is made to the
Participant with respect to the Participant's vested Account. In no event shall
the aggregate amount of the distribution exceed either the full value of the
Participant's vested Account or the amount determined by the Sponsor to be
necessary to alleviate the Participant's financial hardship (which financial
hardship may be considered to include any taxes due because of the distribution
occurring because of this Section), and which is not reasonably available from
other resources of the Participant. For purposes of this Section, the value of
the Participant's vested Account shall be determined as of the date of the
distribution.
"Financial hardship" means (a) a severe financial hardship to
the Participant resulting from a sudden and unexpected illness or accident of
the Participant or of a dependent (as defined in Code section 152(a)) of the
Participant, (b) loss of the Participant's property due to casualty, or (c)
other similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant, each as determined to exist by
the Sponsor. A distribution may be made under this Section only with the consent
of the Sponsor.
Notwithstanding the foregoing, the Sponsor may but need not
deny a hardship distribution election made by a Participant who is subject to
short-swing trading liability of Section 16(b) of the Securities and Exchange
Act of 1934 under circumstances in which said distribution may result in the
imposition of such liability.
5.4 RE-EMPLOYMENT OF RECIPIENT. If a Participant receiving
installment distributions pursuant to Section 6.2 is re-employed by the
Employer, the remaining distributions due to the Participant shall be suspended
until such time as the Participant (or his or her Beneficiary) once again
becomes eligible for benefits under Section 5.1 or 5.2, at which time such
distribution shall commence, subject to the limitations and conditions contained
in this Plan.
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ARTICLE 6
DISTRIBUTION OF BENEFITS
6.1 AMOUNT. A Participant (or his or her Beneficiary) shall become
entitled to receive, within ninety (90) days following the earlier of the
Participant's termination of employment with the Employer or the date or dates
selected by the Participant on his or her Form and Timing of Payment Election
Form (or, if no such selection is made, on or about the date of the
Participant's termination of employment with the Employer), a distribution in an
aggregate amount equal to the Participant's vested Account. A Participant may
alternatively elect to receive an immediate distribution, subject to a ten
percent (10%) penalty and a suspension from the Plan, of all or a portion of his
or her vested Account pursuant to Section 5.2. Any payment due hereunder from
the Trust which is not paid by the Trust for any reason will be paid by the
Sponsor from its general assets.
6.2 METHOD OF PAYMENT.
(a) CASH OR IN-KIND PAYMENTS. Payments under the Plan
(other than payments with respect to amounts deemed invested in Phantom Shares)
shall be made in cash or in-kind, as elected by the Participant and as permitted
by the Sponsor and the Trustee in their sole and absolute discretion, subject,
however, to Section 12.4 and any other applicable restrictions on transfer that
may be applicable legally or contractually. Unless the Sponsor, in its sole
discretion, permits otherwise, all amounts deemed invested in Phantom Shares
through the Sponsor Shares Fund shall be distributed in shares of Common Shares.
(b) TIMING AND MANNER OF PAYMENT. Except as otherwise
provided herein, in the case of distributions to a Participant or his or her
Beneficiary by virtue of an entitlement pursuant to Sections 5.1, an aggregate
amount equal to the Participant's vested Account will be paid by the Trust or
the Sponsor, as provided in Section 6.1, in a lump sum or, if permitted by the
Sponsor in its sole and absolute discretion, in five (5), ten (10) or fifteen
(15) annual installments (adjusted for gains and losses), as selected by the
Participant as provided in Article 5. If a Participant fails to designate
properly the manner of payment of the Participant's benefit under the Plan, such
payment will be in a lump sum.
If the whole or any part of a payment hereunder is to be in
installments, the total to be so paid shall continue to be deemed to be invested
pursuant to Article 4 under such procedures as the Sponsor may establish, in
which case any deemed income, gain, loss or expense or tax allocable thereto (as
determined by the Sponsor, in its discretion) shall be reflected in the
installment payments, using such method for the calculation of the installments
as the Sponsor shall reasonably determine.
6.3 DEATH BENEFITS. If a Participant dies before terminating his
or her employment with the Employer and before the commencement of payments to
the Participant hereunder, the entire value of the Participant's Account shall
be paid, within ninety (90) days following the Participant's death, in a lump
sum, to the person or persons designated in accordance with Section 7.1.
Upon the death of a Participant after payments hereunder have
begun but before he or she has received all payments to which he or she is
entitled under the Plan, the remaining benefit
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payments shall be paid to the person or persons designated in accordance with
Section 7.1, in the manner in which such benefits were payable to the
Participant.
6.4 DISABILITY BENEFITS. If a Participant experiences a Total and
Permanent Disability before terminating his or her employment with the Employer
and before the commencement of payments to the Participant hereunder, the
Participant shall become fully vested in his or her Account, and shall become
entitled to receive (or to commence receiving) the entire balance of his or her
Account in a single lump sum payment on the thirtieth (30th) day following the
Total and Permanent Disability (or as soon thereafter as is administratively
feasible). Notwithstanding the preceding, the Participant may irrevocably elect,
prior to the end of such thirty (30) day period, to waive his or her right to a
single lump sum payment and instead to receive his or her Account in
installments as provided hereunder or pursuant to an alternative payment
schedule offered by the Sponsor in its sole and absolute discretion, including a
schedule which takes into account the payments the Participant receives under
the group long term disability plan maintained by the Participant's Employer or
the Sponsor. If such waiver election is timely made, the Participant shall
receive his or her entire Account balance at the time and in the manner
designated by the Participant on the form supplied by the Sponsor on which such
waiver election is made.
6.5 CHANGE IN CONTROL. Notwithstanding anything herein to the
contrary, upon a Change in Control, each Participant shall become fully vested
in his or her Account, and shall become entitled to receive the entire balance
of his or her Account in a single lump sum payment on the thirtieth (30th) day
following the Change in Control (or as soon thereafter as is administratively
feasible). Notwithstanding the preceding, the Participant may irrevocably elect,
prior to the end of such thirty (30) day period, to waive his or her right to
receive such a Change in Control distribution. If such waiver election is timely
made, the Participant shall receive his or her entire Account balance at the
time designated in the most recent Participant Enrollment and Election Form
received by the Sponsor from the Participant or, if no election as to timing of
Account distribution has been made on the Participant's Enrollment and Election
Form, at the time the Participant terminates employment with the Employer.
ARTICLE 7
BENEFICIARIES; PARTICIPANT DATA
7.1 DESIGNATION OF BENEFICIARIES. Each Participant from time to
time may designate any person or persons (who may be named contingently or
successively) to receive such benefits as may be payable under the Plan upon or
after the Participant's death, and such designation may be changed from time to
time by the Participant by filing a new designation. Each designation will
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Sponsor, and will be effective only when filed in writing with
the Sponsor during the Participant's lifetime.
In the absence of a valid Beneficiary designation, or if, at
the time any benefit payment is due to a Beneficiary, there is no living
Beneficiary validly named by the Participant, the Sponsor shall pay any such
benefit payment to the Participant's spouse, if then living, but otherwise to
the Participant's then living descendants, if any, PER STIRPES, but, if none, to
the Participant's estate. In determining the existence or identity of anyone
entitled to a benefit payment, the Sponsor may rely conclusively upon
information supplied by the Participant's personal representative, executor
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or administrator. If a question arises as to the existence or identity of anyone
entitled to receive a benefit payment as aforesaid, or if a dispute arises with
respect to any such payment, then, notwithstanding the foregoing, the Sponsor,
in its sole discretion, may distribute or direct that the Trustee distribute
such payment to the Participant's estate without liability for any tax or other
consequences which might flow therefrom, or may take such other action as the
Sponsor deems to be appropriate.
7.2 INFORMATION TO BE FURNISHED BY PARTICIPANTS AND
BENEFICIARIES; INABILITY TO LOCATE PARTICIPANTS OR BENEFICIARIES. Any
communication, statement or notice addressed to a Participant or to a
Beneficiary at his or her last post office address as shown on the Employer's
records shall be binding on the Participant or Beneficiary for all purposes
of the Plan. Neither an Employer nor the Sponsor shall be obliged to search
for any Participant or Beneficiary beyond the sending of a registered letter
to such last known address. If the Sponsor or Employer notifies any
Participant or Beneficiary that he or she is entitled to an amount under the
Plan and the Participant or Beneficiary fails to claim such amount or make
his or her location known to the Employer within three (3) years thereafter,
then, except as otherwise required by law, if the location of one or more of
the next of kin of the Participant is known to the Employer, the Sponsor may
distribute or direct distribution of such amount to any one or more or all of
such next of kin, and in such proportions as the Sponsor determines. If the
location of none of the foregoing persons can be determined, the Sponsor
shall have the right to direct that the amount payable shall be deemed to be
a forfeiture, except that the dollar amount of the forfeiture, unadjusted for
deemed gains or losses in the interim, shall be paid by the Sponsor if a
claim for the benefit subsequently is made by the Participant or the
Beneficiary to whom it was payable. If a benefit payable to an unlocated
Participant or Beneficiary is subject to escheat pursuant to applicable state
law, neither the Employer nor the Sponsor shall not be liable to any person
for any payment made in accordance with such law.
ARTICLE 8
ADMINISTRATION
8.1 ADMINISTRATIVE AUTHORITY. Except as otherwise specifically
provided herein, the Sponsor shall have the sole responsibility for and the sole
control of the operation and administration of the Plan, and shall have the
power and authority to take all action and to make all decisions and
interpretations which may be necessary or appropriate in order to administer and
operate the Plan, including, without limiting the generality of the foregoing,
the power, duty and responsibility to:
(a) Resolve and determine all disputes or questions
arising under the Plan, and to remedy any ambiguities, inconsistencies or
omissions in the Plan.
(b) Adopt such rules of procedure and regulations as in
its opinion may be necessary for the proper and efficient administration of the
Plan and as are consistent with the Plan.
(c) Implement the Plan in accordance with its terms and
the rules and regulations adopted as above.
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(d) Make determinations with respect to the eligibility
of any Eligible Employee as a Participant and make determinations concerning the
crediting of Plan Accounts.
(e) Appoint any persons or firms, or otherwise act to
secure specialized advice or assistance, as it deems necessary or desirable in
connection with the administration and operation of the Plan, and the Sponsor
shall be entitled to rely conclusively upon, and shall be fully protected in any
action or omission taken by it in good faith reliance upon, the advice or
opinion of such firms or persons. The Sponsor shall have the power and authority
to delegate from time to time by written instrument all or any part of its
duties, powers or responsibilities under the Plan, both ministerial and
discretionary, as it deems appropriate, to any person or committee, and in the
same manner to revoke any such delegation of duties, powers or responsibilities.
Any action of such person or committee in the exercise of such delegated duties,
powers or responsibilities shall have the same force and effect for all purposes
hereunder as if such action had been taken by the Sponsor. Further, the Sponsor
may authorize one or more persons to execute any certificate or document on
behalf of the Sponsor, in which event any person notified by the Sponsor of such
authorization shall be entitled to accept and conclusively rely upon any such
certificate or document executed by such person as representing action by the
Sponsor until such notified person shall have been notified of the revocation of
such authority.
8.2 UNIFORMITY OF DISCRETIONARY ACTS. Whenever in the
administration or operation of the Plan discretionary actions by the Sponsor are
required or permitted, such actions shall be consistently and uniformly applied
to all persons similarly situated, and no such action shall be taken which shall
discriminate in favor of any particular person or group of persons.
8.3 LITIGATION. Except as may be otherwise required by law, in any
action or judicial proceeding affecting the Plan, no Participant or Beneficiary
shall be entitled to any notice or service of process, and any final judgment
entered in such action shall be binding on all persons interested in, or
claiming under, the Plan.
8.4 CLAIMS PROCEDURE. Any person claiming a benefit under the Plan
(a "Claimant") shall present the claim, in writing, to the Sponsor, and the
Sponsor shall respond in writing. If the claim is denied, the written notice of
denial shall state, in a manner calculated to be understood by the Claimant:
(a) The specific reason or reasons for the denial, with
specific references to the Plan provisions on which the denial is based;
(b) A description of any additional material or
information necessary for the Claimant to perfect his or her claim and an
explanation of why such material or information is necessary; and
(c) An explanation of the Plan's claims review procedure.
The written notice denying or granting the Claimant's claim
shall be provided to the Claimant within ninety (90) days after the Sponsor's
receipt of the claim, unless special circumstances require an extension of time
for processing the claim. If such an extension is required, written notice of
the extension shall be furnished by the Sponsor to the Claimant within the
initial
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ninety (90) day period and in no event shall such an extension exceed a
period of ninety (90) days from the end of the initial ninety (90) day period.
Any extension notice shall indicate the special circumstances requiring the
extension and the date on which the Sponsor expects to render a decision on the
claim. Any claim not granted or denied within the period noted above shall be
deemed to have been denied.
Any Claimant whose claim is denied, or deemed to have been
denied under the preceding sentence (or such Claimant's authorized
representative), may, within sixty (60) days after the Claimant's receipt of
notice of the denial, or after the date of the deemed denial, request a review
of the denial by notice given, in writing, to the Sponsor. Upon such a request
for review, the claim shall be reviewed by the Sponsor (or its designated
representative) which may, but shall not be required to, grant the Claimant a
hearing. In connection with the review, the Claimant may have representation,
may examine pertinent documents, and may submit issues and comments in writing.
The decision on review normally shall be made within sixty
(60) days of the Sponsor's receipt of the request for review. If an extension of
time is required due to special circumstances, the Claimant shall be notified,
in writing, by the Sponsor, and the time limit for the decision on review shall
be extended to one hundred twenty (120) days. The decision on review shall be in
writing and shall state, in a manner calculated to be understood by the
Claimant, the specific reasons for the decision and shall include references to
the relevant Plan provisions on which the decision is based. The written
decision on review shall be given to the Claimant within the sixty (60) day (or,
if applicable, the one hundred twenty (120) day) time limit discussed above. If
the decision on review is not communicated to the Claimant within the sixty (60)
day (or, if applicable, the one hundred twenty (120) day) period discussed
above, the claim shall be deemed to have been denied upon review. All decisions
on review shall be final and binding with respect to all concerned parties.
ARTICLE 9
AMENDMENT
9.1 RIGHT TO AMEND. The Sponsor, by action of its Board of
Trustees, shall have the right to amend the Plan, at any time and with respect
to any provisions hereof, and all parties hereto or claiming any interest
hereunder shall be bound by such amendment; provided, however, that no such
amendment shall deprive a Participant or a Beneficiary of a right accrued
hereunder prior to the date of the amendment.
9.2 AMENDMENTS TO ENSURE PROPER CHARACTERIZATION OF PLAN.
Notwithstanding the provisions of Section 9.1, the Plan may be amended by the
Sponsor, by action of the Board, at any time, retroactively if required, if
found necessary, in the opinion of the Sponsor, in order to ensure that the Plan
is characterized as "top-hat" plan of deferred compensation maintained for a
select group of management or highly compensated employees as described under
ERISA sections 201(2), 301(a)(3), and 401(a)(1), and to conform the Plan to the
provisions and requirements of any applicable law (including ERISA and the
Code). No such amendment shall be considered prejudicial to any interest of a
Participant or a Beneficiary hereunder.
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ARTICLE 10
TERMINATION
10.1 SPONSOR'S RIGHT TO TERMINATE OR SUSPEND PLAN. The Sponsor
reserves the right to terminate the Plan and/or obligations to make further
credits to Plan Accounts, by action of the Board. The Sponsor also reserves the
right to suspend the operation of the Plan for a fixed or indeterminate period
of time, by action of the Board. Finally, the Sponsor reserves the right to
terminate any Employer's participation herein as provided in Section 10.6.
10.2 AUTOMATIC TERMINATION OF PLAN. The Plan automatically shall
terminate upon the dissolution of the Sponsor, or upon its merger into or
consolidation with any other corporation or business organization if there is a
failure by the surviving corporation or business organization to adopt
specifically and agree to continue the Plan.
10.3 SUSPENSION OF DEFERRALS. In the event of a suspension of the
Plan, the Sponsor shall continue all aspects of the Plan, other than
contributions to the Plan, during the period of the suspension, in which event
payments hereunder will continue to be made during the period of the suspension
in accordance with Articles 5 and 6.
10.4 ALLOCATION AND DISTRIBUTION. This Section shall become
operative on a complete termination of the Plan. The provisions of this Section
also shall become operative in the event of a partial termination of the Plan,
as determined by the Sponsor, but only with respect to that portion of the Plan
attributable to the Participants to whom the partial termination is applicable.
Upon the effective date of any such event, notwithstanding any other provisions
of the Plan, no persons who were not theretofore Participants shall be eligible
to become Participants, the value of the interest of all Participants and
Beneficiaries shall be determined and, after deduction of estimated expenses in
liquidating and, if applicable, paying Plan benefits, paid to them as soon as is
practicable after such termination.
10.5 SUCCESSOR TO SPONSOR. Any corporation or other business
organization which is a successor to the Sponsor by reason of a consolidation,
merger or purchase of substantially all of the assets of the Sponsor shall have
the right to become a party to the Plan by adopting the same by resolution of
the entity's board of directors or other appropriate governing body. If, within
ninety (90) days from the effective date of such consolidation, merger or sale
of assets, such new entity does not become a party hereto, as above provided,
the Plan automatically shall be terminated, and the provisions of Section 10.4
shall become operative.
10.6 WITHDRAWAL OR TERMINATION BY AN EMPLOYER. Any Employer, by
action of its board of directors or other governing authority and notice to the
Sponsor and the Trustee, may withdraw from the Plan and Trust at any time, or
may terminate the Plan and Trust with respect to its Employees at any time,
without affecting other Employers not withdrawing or terminating. A withdrawing
Employer may arrange for the continuation of this Plan and Trust in separate
forms for its own Employees, with such amendments, if any, as it may deem
proper, and may arrange for continuation of the Plan and Trust by merger with an
existing plan and trust. The Sponsor may, in its absolute discretion, terminate
an Employer's participation in this Plan at any time, without the consent of any
Employer, Participant or Beneficiary.
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ARTICLE 11
THE TRUST
11.1 ESTABLISHMENT OF TRUST. The Sponsor shall establish the Trust
with the Trustee pursuant to such terms and conditions as are set forth in the
Trust agreement to be entered into between the Sponsor and the Trustee or the
Sponsor shall cause to be maintained one or more separate subaccounts in an
existing Trust maintained with the Trustee with respect to one or more other
plans of the Sponsor, which subaccount or subaccounts represent Participants'
interests in the Plan. Any such Trust shall be intended to be treated as a
"grantor trust" under the Code and the establishment of the Trust or the
utilization of any existing Trust for Plan benefits, as applicable, shall not be
intended to cause any Participant to realize current income on amounts
contributed thereto, and the Trust shall be so interpreted.
ARTICLE 12
MISCELLANEOUS
12.1 LIABILITY OF SPONSOR; LIMITATIONS ON LIABILITY OF SPONSOR OR
EMPLOYER. Notwithstanding anything herein that may suggest otherwise, the
Sponsor shall be solely liable for the payment of any benefits due hereunder.
However, neither the establishment of the Plan nor any modification thereof, nor
the creation of any account under the Plan, nor the payment of any benefits
under the Plan shall be construed as giving to any Participant or other person
any legal or equitable right against the Sponsor, the Employer, or any officer
or employer thereof except as provided by law or by any Plan provision. Neither
the Sponsor nor the Employer in any way guarantee any Participant's Account from
loss or depreciation, whether caused by poor investment performance of a deemed
investment or the inability to realize upon an investment due to an insolvency
affecting an investment vehicle or any other reason. In no event shall the
Sponsor, the Employer, or any successor, employee, officer, director or
stockholder of the Sponsor or the Employer, be liable to any person on account
of any claim arising by reason of the provisions of the Plan or of any
instrument or instruments implementing its provisions, or for the failure of any
Participant, Beneficiary or other person to be entitled to any particular tax
consequences with respect to the Plan, or any credit or distribution hereunder.
12.2 CONSTRUCTION. If any provision of the Plan is held to be
illegal or void, such illegality or invalidity shall not affect the remaining
provisions of the Plan, but shall be fully severable, and the Plan shall be
construed and enforced as if said illegal or invalid provision had never been
inserted herein. For all purposes of the Plan, where the context admits, the
singular shall include the plural, and the plural shall include the singular.
Headings of Articles and Sections herein are inserted only for convenience of
reference and are not to be considered in the construction of the Plan. The laws
of Maryland shall govern, control and determine all questions of law arising
with respect to the Plan and the interpretation and validity of its respective
provisions, except where those laws are preempted by the laws of the United
States. Participation under the Plan will not give any Participant the right to
be retained in the service of the Employer nor any right or claim to any benefit
under the Plan unless such right or claim has specifically accrued hereunder.
The Plan is intended to be and at all times shall be
interpreted and administered so as to qualify as an unfunded deferred
compensation plan, and no provision of the Plan shall be
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interpreted so as to give any individual any right in any assets of the Sponsor
which is greater than the rights of a general unsecured creditor of the Sponsor.
12.3 SPENDTHRIFT PROVISION. No amount payable to a Participant or a
Beneficiary under the Plan will, except as otherwise specifically provided by
law, be subject in any manner to anticipation, alienation, attachment,
garnishment, sale, transfer, assignment (either at law or in equity), levy,
execution, pledge, encumbrance, charge or any other legal or equitable process,
and any attempt to do so will be void; nor will any benefit be in any manner
liable for or subject to the debts, contracts, liabilities, engagements or torts
of the person entitled thereto. Further, (i) the withholding of taxes from Plan
benefit payments, (ii) the recovery under the Plan of overpayments of benefits
previously made to a Participant or Beneficiary, (iii) if applicable, the
transfer of benefit rights from the Plan to another plan, or (iv) the direct
deposit of benefit payments to an account in a banking institution (if not
actually part of an arrangement constituting an assignment or alienation) shall
not be construed as an assignment or alienation.
In the event that any Participant's or Beneficiary's benefits
hereunder are garnished or attached by order of any court, the Sponsor, the
Employer or the Trustee may bring an action or a declaratory judgment in a court
of competent jurisdiction to determine the proper recipient of the benefits to
be paid under the Plan. During the pendency of said action, any benefits that
become payable shall be held as credits to the Participant's or Beneficiary's
Account or, if the Sponsor, the Employer or the Trustee prefers, paid into the
court as they become payable, to be distributed by the court to the recipient as
the court deems proper at the close of said action.
12.4 SPONSOR SHARES SUBJECT TO THE PLAN.
(a) CHANGES IN CAPITAL STRUCTURE. Subject to any required
action by the shareholders and directors of the Sponsor, the number of units of
Phantom Shares allocable to the Account of any Participant and the number of
shares of Common Shares distributable from the Account of any Participant and
the per-unit value or per-share price thereof shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Shares
resulting from a stock split, reverse stock split, combination,
reclassification, the payment of a stock dividend on the Common Shares or any
other increase or decrease in the number of such shares of Common Shares
effected without receipt of consideration by the Sponsor. Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding, and conclusive.
The Sponsor may, if it so determines in the exercise
of its sole discretion, also make provision for adjusting the number or class of
securities covered by the Plan, as well as the value thereof or price to be paid
therefor, in the event of the Sponsor's effecting one or more reorganizations,
recapitalizations, rights, offerings, or other increase or reductions of the
number of shares of its outstanding Common Shares, or in the event of the
Sponsor's being consolidated with or merged into any other corporation. Unless
otherwise determined by the Board, upon the dissolution or liquidation of the
Sponsor or upon any merger or consolidation in any Plan Year, if the Sponsor is
not the surviving corporation, a Participant's right to receive shares of Common
Shares hereunder shall terminate and thereupon become null and void.
(b) NECESSARY ACTIONS. To the extent required by law, as
determined by the Board, the adoption of the Plan shall be subject to approval
by the affirmative vote of the
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shareholders of the Sponsor in accordance with applicable federal or state laws.
Shares of Common Shares shall not be issued under the Plan unless the issuance
and delivery of such securities pursuant thereto shall comply with all relevant
provisions of federal, state, and local securities laws. As a condition to the
issuance of securities under the Plan, the Sponsor may require the Participant
to represent and warrant, at the time of any allocation of securities, that the
securities are being acquired only for investment and without any present
intention to sell or distribute such securities if, in the opinion of the
Sponsor, such a representation is required by any of the aforementioned relevant
provisions of law. During the term of this Plan, the Sponsor will at all times
reserve and keep available the number of securities as shall be sufficient to
satisfy the requirements of the Plan. Inability of the Sponsor to obtain
pertinent approval or exemption from any regulatory body having jurisdiction and
authority deemed by the Sponsor to be necessary to the lawful allocation,
issuance, or sale of any securities hereunder shall relieve the Sponsor of any
liability in respect of the nonallocation, nonissuance, or nonsale of such
securities as to which such requisite authority shall not have been obtained.
IN WITNESS WHEREOF, the Sponsor has caused the Plan to be executed and
its seal to be affixed hereto, effective as of the 1st day of May, 2002.
ATTEST/WITNESS: CORPORATE OFFICE PROPERTIES
TRUST
By:
- ------------------------------------ ------------------------- (SEAL)
Print: Print Name:
------------------------------ -----------------------
Date:
-------------------------
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