Exhibit 10.3
Updated for name changes and JPMorgan Merger
DEFERRED COMPENSATION PROGRAM OF
JPMORGAN CHASE & CO.
AND PARTICIPATING COMPANIES
PREAMBLE
The Deferred Compensation Program permits annual deferrals by
certain key officers of all or a portion of their incentive compensation under
the Voluntary Bonus Deferral Plan. The Program permits deferrals of Eligible
Compensation under the 401(k) Excess Savings Plan when certain plan or legal
limits reduce contributions that would be otherwise made by officers and
employees pursuant to the JPMorgan Chase 401(k) Savings Plan, a qualified plan
and also permits additional deferrals for commissioned paid employees under a
Voluntary Compensation Deferral Plan. At the determination of the Administrator,
the Program can include other deferral features.
The Program is a successor to the Deferred Compensation Program of
The Chase Manhattan Corporation and Participating Companies, the Deferred
Compensation Plan of Chemical Bank and Participating Companies, the
Thrift-Incentive portion of TRA 86 Supplemental Benefit Plan of The Chase
Manhattan Bank, N.A. and the J.P. Morgan Deferred IC Program. Balances in each
reference plan are subject to the terms of this Program except as otherwise
provided herein.
Additionally, the Supplemental Executive Retirement Plan of The
Chase Manhattan Bank, N.A. was terminated as of December 31, 1996. The
Supplemental Retirement Accounts, as well as the Pre-1988 frozen annuity which
was converted to a lump sum, became part of a Participant's account hereunder.
The terms and conditions of this Program govern any amount
previously deferred thereunder. This Program became effective January 1, 1996.
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The Program represents an unsecured, unfunded promise to make
payments in the future.
ARTICLE I
DEFINITIONS
The following are defined terms wherever they appear in the Program.
1.1 "Additional Credit" shall mean the amount specified in Section
3.2(d).
1.2 "Administrator" shall mean the individual holding the title
"Director Human Resources" of the Corporation, who shall be responsible for
those functions assigned to him under the Plan; provided that the term
"Administrator" shall mean the Committee with respect to any discretionary act
hereunder which affects any person subject to Section 16(a) of the Securities
Exchange Act of 1934, as amended.
1.3 "Bank" shall mean JPMorgan Chase Bank NA.
1.4 "Beneficiary" shall mean the persons designated by a
Participant, on a form provided by the Administrator, to receive in the event of
his/her death the value of any undistributed account balance under this Program.
Any designation shall include amounts deferred under the 401(k) Excess Savings
Plan, the Voluntary Bonus Deferral Plan and the Voluntary Compensation Deferral
Plan and amounts transferred to an account under this Program from the JPMorgan
Chase Excess Retirement Plan (formerly the Excess Retirement Plan of The Chase
Manhattan Corporation) and such other amounts deferred under such other plans or
arrangements as may be specified by the Administrator.
1.5 "Benefits Eligible Compensation" shall mean salary, commissions,
draw and production overrides deferred under the Voluntary Compensation Deferral
Plan.
1.6 "Board of Directors" shall mean the Board of Directors of the
Corporation; provided that any action taken by a duly authorized committee of
the Board of
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Directors (including any action described in Section 5.4) within the scope of
authority delegated to it by the Board shall be considered an action of the
Board of Directors for the purpose of this Plan.
1.7 "Chemical Plan" shall mean the Deferred Compensation Plan of
Chemical Banking Corporation and Participating Companies as in effect on
December 31, 1996.
1.8 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.9 "Committee" shall mean the Compensation and Management
Development Committee of the Board of Directors.
1.10 "Corporation" shall mean J.P. Morgan Chase & Co.
1.11 "Deferral Percentage" shall mean the percentage elected by an
Eligible Employee described in Section 2.1(d) on an Election Form under the
Qualified Plan; provided that no Deferral Percentage can be elected unless the
individual has elected a Pre-Tax Contribution rate of 5% under the Qualified
Plan; provided further that the Deferral Percentage shall not exceed 10% for
period commencing January 1, 2000 and ending December 31, 2001 and 15%
commencing January 1, 2002.
1.12 "DSIB" shall mean the hypothetical investment choice described
in Section 3.3(b).
1.13 "Election Form" shall mean the method specified by the
Administrator to participate in the Program and to make deferral and
hypothetical investment elections under the Program. Such methods may include,
but not be limited to, interactive voice response, internet, and other
electronic means.
1.14 "Eligible Compensation" shall have the meaning specified in the
Qualified Plan.
1.15 "Eligible Employee" shall mean an Employee described in Section
2.1.
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1.16 "Employee" shall mean an individual whose employment
classification is that of a regular full-time employee and who is on a United
States payroll of a Participating Company.
1.17 "Former Participant" shall mean a Participant whose employment
has terminated and whose account balance under the Program has not been fully
distributed.
1.18 "J.P. Morgan Deferred IC Program" shall mean the incentive
compensation program providing for deferral of bonuses sponsored by J.P. Morgan
& Co. Incorporated, the balances of which are subject to the terms of this
Program.
1.19 "IPA" shall mean the hypothetical investment choice described
in Section 3.3.(b).
1.20 "401(k) Excess Savings Plan" shall mean that feature of the
Program allowing deferrals of Eligible Compensation on a per pay period basis.
1.21 "Legal Limit" shall mean the dollar limitation imposed by
Section 401(a)(17) of the Code on the amount of Eligible Compensation taken into
account in computing benefits under the Qualified Plan for a calendar year or
the limits imposed under Section 402(g) and Section 415 of the Code. In
addition, if so specified by the Administrator for any calendar year, "Legal
Limit" shall also mean any reduction in Pre-Tax Contributions or matching
contributions under the Qualified Plan because of the expected application of
Section 401(k)(3) of the Code or Section 401(m)(3) of the Code.
1.22 "Participant" shall mean each Eligible Employee of a
Participating Company described in Section 2.1 who participates in the Program
in accordance with the terms and conditions applicable to a deferral arrangement
offered under the Program.
1.23 "Participating Company" shall mean: (a) the Corporation and (b)
each Related Company which has been authorized by the Administrator to
participate in the Program and has agreed to comply with the provisions of the
Program.
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1.24 "Pre-Tax Contributions" shall have the meaning specified in the
Qualified Plan.
1.25 "Program" shall mean the Deferred Compensation Program of The
Chase Manhattan Corporation and Participating Companies as in effect from time
to time, which Program includes the 401(k) Excess Savings Plan, Voluntary Bonus
Deferral Plan and Voluntary Compensation Deferral Plan and such other deferral
features or plans as the Administrator may specify
1.26 "Qualified Plan" shall mean the JPMorgan Chase 401(k) Savings
Plan.
1.27 "Related Company" shall mean a corporation of which more than
51% of the combined voting power of all classes of stock entitled to vote or
equity interest is owned directly or indirectly by the Corporation or a
partnership, joint venture or other unincorporated entity of which more than 51%
of the capital, equity or profits interest is owned directly or indirectly by
the Corporation.
1.28 "SERP Amounts" shall mean the amounts described in Sections
6.2(a)(i) and (ii) plus the investment experience thereon.
1.29 "Supplemental Executive Retirement Plan" shall mean the
Supplemental Executive Retirement Plan of The Chase Manhattan Bank, N.A.
1.30 "Total and Permanent Disability" or "Totally Disabled" shall
mean a disability that, in the determination of the Administrator, would qualify
an individual for benefits under a long term disability program maintained by
the Corporation or a Related Company.
1.31 "TRA Supplemental Retirement Plan" shall mean the TRA 86
Supplemental Retirement Plan of The Chase Manhattan Bank, N.A.
1.32 "Valuation Date" shall mean the close of business on the last
business day of each calendar month for any period prior to July 1, 1999 and
shall have the meaning set forth in Qualified Plan for periods on or after July
1, 1999; provided that the Administrator may specify in his/her sole discretion
a different Valuation Date or Dates for any investment choice
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provided under the Program and may apply such different Valuation Dates on an
individual by individual basis.
1.33 "Voluntary Bonus Deferral Plan" shall mean that feature of the
Program allowing deferral of annual incentive compensation payable in the form
of a bonus.
1.34 "Voluntary Compensation Deferral Plan" shall mean that feature
of the Program permitting the deferral of Benefits Eligible Compensation on a
per pay period basis for commissioned employees.
ARTICLE II
PARTICIPATION
2.1 ELIGIBILITY. The Employees who shall be eligible to participate
in the Program are those officers and other key employees of a Participating
Company who:
(a) under the Voluntary Bonus Deferral Plan:
(i) are participating in a cash incentive plan permitting
deferral of cash bonuses; and
(ii) have a position or salary grade with a Participating
Company that has been designated by the Administrator as
eligible for participation in the Plan; or
(iii) have been specifically authorized by the Administrator
to participate in the Plan.
(b) under the Voluntary Compensation Deferral Plan:
(i) earned Benefit Eligible Compensation in a prior calendar
year in excess of the Legal Limit for the period
specified by the Administrator; and
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(ii) have a position or salary grade with a Participating
Company that has been designated by Administrator as
eligible for participation in the Plan.
(c) under the 401(k) Excess Savings Plan for the period of January
1, 1997 through December 31, 1999:
(i) were participating in the Qualified Plan electing to
make Pre-Tax Contributions during a calendar year; and
(ii) were subject to the Legal Limit; and
(iii) were described in either Section 2.1(a)(ii) or (iii).
(d) under the 401(k) Excess Savings Plan after December 31, 1999:
(i) are not permitted by the terms of the Qualified Plan to
make Pre-Tax Contributions during a calendar year in
excess of a 5 percent deferral rate, and
(ii) are designated as eligible to participate in the 401(k)
Excess Savings Plan by the Administrator.
2.2 DEFERRAL ELECTIONS.
(a) Voluntary Bonus Deferral Plan. An Eligible Employee may annually
elect to defer incentive compensation and participate in the Voluntary Bonus
Deferral Plan by delivering a properly completed Election Form to the
Administrator; and, upon making such irrevocable election to defer incentive
compensation, such Eligible Employee shall be a Participant.
(b) Voluntary Compensation Deferral Plan. An Eligible Employee may
annually elect to defer Benefits Eligible Compensation up to the maximum
percentage specified by the Administrator commencing with the first pay period
in a calendar year by delivering a
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properly completed Election Form to the Administrator. Upon making such
irrevocable election by delivering the Election Form, such Eligible Employee
shall be a Participant.
(c) 401(k) Excess Savings Plan. (i) Effective as of December 31,
1999, by electing a Deferral Percentage on an Election Form (or continuing an
election of such a percentage), an Eligible Employee thereby elects to have an
amount each per pay period deferred under the 401(k) Excess Savings Plan.
(ii) An Eligible Employee will automatically become a Participant
and will have amounts deferred under the 401(k) Excess Savings Plan after the
applicable Legal Limit is reached under the Qualified Plan based on the
percentage election made for the Qualified Plan.
(iii) Prior to December 31, 1999, an Eligible Employee was required
to elect to defer Eligible Compensation under the 401(k) Excess Savings Plan
(after the applicable Legal Limit was reached for the calendar year under the
Qualified Plan) by delivering a properly completed Election Form to the
Administrator.
2.3 TIMING AND EFFECTIVE DATE OF ELECTIONS.
(a) Any deferral election under the Voluntary Bonus Deferral
Plan shall be made at least three months prior to the end of the calendar year
to which the incentive compensation relates. Such election shall be irrevocable
following the end of the election period and shall be effective with respect to
any incentive compensation to be paid in the calendar year following the date of
the election.
(b) Any deferral election under the Voluntary Compensation
Deferral Plan shall be made at least three months prior to the beginning of the
calendar year to which the election relates. Such election shall be irrevocable
following the end of the election period and shall be effective for Benefit
Eligible Compensation to be received in the calendar year following the date of
the election.
(c) Any deferral election under the 401(k) Excess Savings Plan
and Deferral Percentage shall be made at the same time as any election under the
Qualified Plan
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and shall be effective at the same time as would an election under the Qualified
Plan be effective.
(d) Notwithstanding the dates specified in this Section 2.3,
the Administrator may prescribe an earlier or later date by which Participant
must elect to defer compensation.
(e) Under no circumstances may a Participant at any time defer
compensation to which the Participant has attained a legally enforceable right
to receive.
2.4 TERMINATION OF 401(K) EXCESS SAVINGS ELECTION. An election to
defer Eligible Compensation under the 401(k) Excess Savings Plan will terminate
on the earlier of (i) termination of employment, (ii) ineligibility to
participate in the Qualified Plan, or (iii) filing of an election by such date
as may be specified by the Administrator to cease deferrals.
2.5 TERMINATION OF A VOLUNTARY COMPENSATION DEFERRAL PLAN ELECTIONS.
An election to defer Benefits Eligible Compensation under the Voluntary
Compensation Deferral Plan will terminate on the earlier of (i) termination of
employment, (ii) the end of the calendar year to which the election relates, or
(iii) such earlier date as the Administrator may specify.
ARTICLE III
COMPENSATION DEFERRED
3.1 ACCOUNT.
(a) With respect to deferrals under this Program, a bookkeeping
account shall be established for each Participant. Under the Program, amounts
deferred by a Participant, along with hypothetical income or losses on such
amounts (including Additional Credits, if any, with respect to deferrals under
the 401(k) Excess Savings Plan), shall be credited or debited to the account.
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(b) For purposes of hypothetical investments under Section 3.3, for
periods prior to calendar year 2000, incentive compensation deferred with
respect to a calendar year was considered to be invested as of the first day of
the month immediately following the month in which incentive compensation would
otherwise have been payable. For periods after calendar year 2000, incentive
compensation deferred with respect to a calendar year shall be considered to be
invested as soon as administratively practical following the date on which such
compensation would otherwise have been payable.
(c) For purposes of hypothetical investments under Section 3.3,
deferred Eligible Compensation or Benefit Eligible
Compensation shall be considered to be invested as soon as administratively
practical following the date on which such compensation would otherwise have
been payable.
3.2 AMOUNT OF DEFERRAL.
(a) Voluntary Bonus Deferral Plan. Under the Voluntary Bonus
Deferral Plan, a Participant shall have deferred all or a portion, by percentage
or by dollar amount (as specified on an Election Form), of any bonus or other
incentive award (other than any award payable as shares of common stock of the
Corporation) subject to a minimum of $5,000 that would otherwise be payable in
the calendar year following the election. For these purposes, bonus or incentive
compensation means only compensation otherwise payable in cash to a Participant
for services as an Employee of the Participating Company.
(b) Voluntary Compensation Deferral Plan. Under the Voluntary
Compensation Deferral Plan, a Participant shall have deferred for each pay
period an amount equal to the product of the percentage elected on an Election
Form and Benefit Eligible Compensation (otherwise payable for such pay period).
(c) 401(k) Excess Savings Plan. For calendar year 2000 and
following, a Participant shall have deferred from Eligible Compensation for each
pay period an amount equal to the product of the Deferral Percentage (as in
effect from time to time pursuant to an Election Form) and Eligible
Compensation. In addition, a Participant shall have deferred from Eligible
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Compensation, in each pay period following the date that the Pre-Tax
Contributions under the Qualified Plan ceased because of the application of the
Legal Limit, an amount equal to the product of the (I) rate of Pre-Tax
Contribution under the Qualified Plan (as in effect) and (ii) Eligible
Compensation for any remaining pay periods.
(d) Additional Credit. To the extent that Eligible Compensation is
being deferred under the 401(k) Excess Savings Plan because of the application
of the Legal Limit, there shall be credited to an individual's account an amount
equal to the product of Eligible Compensation for any pay period remaining in
the calendar year and the lesser of (i) the maximum employer matching
contribution rate under the Qualified Plan or (ii) the rate elected under the
Qualified Plan prior to application of the Legal Limit, unless the Participant
elects subsequently a lower percentage. Such Additional Credit shall vest in
accordance with the schedule set forth in the Qualified Plan. Notwithstanding
the foregoing or anything hereinto the contrary, no Additional Credits will
apply to the accounts of those Participants whose Eligible Compensation in whole
or part consist of commissions, draw or production overrides or to Participants
employed in one of the wholesale businesses of a Participating Company.
(e) Not in Excess. The amount credited to a Participant's account
under Section 3.2(c) and (d) along with the amount credited to such Participant
under the Qualified Plan shall not exceed the amount that would have been
contributed for the Participant but for the application of the Legal Limit.
3.3 HYPOTHETICAL INVESTMENT.
(a) Subject to the provisions of Section 3.4, amounts credited to an
account shall be deemed to be invested, at the Participant's direction, in one
of the investment vehicles offered under the Qualified Plan and shall be
credited with the same rates of returns as provided by the Qualified Plan for
such funds (except for the Chase Common Stock Fund under the Qualified Plan).
Unless otherwise specified by the Administrator, hypothetical investment funds
shall change as the investment vehicle under the Qualified Plan change and shall
be subject to the same charges and expenses as provided for in the Qualified
Plan.
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(b) In addition to hypothetical investment funds in (a), the Program
provides
(i) Deferred Supplemental Income Benefit ("DSIB"). Amounts treated
as invested in DSIB shall earn the rate of return specified by
the Administrator for that year and future years up to the
January 1, immediately prior to the date of distribution of
the first installment of the DSIB; provided that, however,
with respect to deferrals during a calendar year under the
410(k) Excess Savings Plan or transfers/reallocations of
deferred incentive compensation, the amount designated as
invested in DSIB shall receive the rate specified for the next
succeeding calendar year, and such mid-year deferral or
reallocation shall receive the rate of return of the Stable
Value investment choice until treated as if invested in DSIB.
The DSIB rate of return shall not be applicable if employment
of a Participant terminates with less than five years of
service, or before age 65 with respect to deferrals made
within 12 month of termination of employment. In such
circumstances, that portion of the account shall receive, in
lieu of the DSIB rate, the rate provided by the Stable Value
investment choice for each year deemed invested in DSIB. The
Administrator has the discretion to impose minimum and maximum
allocations to DSIB. A hypothetical investment election in the
DSIB shall only be effective if the Participant cooperates
with the reasonable requests of the Administrator, including
the completion of an insurance application/consent and a
physical; provided further should a Participant revoke his/her
consent to insurance, then no benefit shall be payable under
DISB.
(ii) Inflation-Protected Annuity Benefit ("IPA"). Effective July 1,
2003, the IPA was discontinued for future investments and
amounts pending IPA were treated as invested in the Stable
Value investment choice as of June 30, 2003 unless the
Participant otherwise elected. Amounts treated as invested in
IPA shall earn (a) a rate of return specified by the
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Administrator for that year and future years, and (b) an
annual inflation adjustment return each year based on changes
in the non-seasonally adjusted Consumer Price Index for Urban
Consumers and year end account balance allocated to IPA, in
either case up to the January 1, immediately prior to the date
of distribution of the first installment of the IPA; provided
that however, with respect to deferrals during a calendar year
under the Excess 410(k) Plan or reallocations of deferred
incentive compensation, the amount designated as invested in
IPA shall receive the rate specified for the next succeeding
calendar year, and such mid-year deferral or reallocation
shall receive the rate of return of the Stable Value
investment choice until treated as if invested in IPA. The
Administrator has the discretion to impose minimum and maximum
allocations to IPA.
(iii) NASDAQ 100 Investment Choice. Amounts treated as invested in
the NASDAQ 100 investment choice shall earn a rate of return
that approximates the rate of return published for the NASDAQ
100 Index .
(c) Amounts treated as invested in the common stock investment
choice (including dividend equivalents) shall be treated as if invested in fixed
shares of common stock of the Corporation ("Common Stock investment choice");
and for valuation purposes, the New York Stock Exchange closing market price for
such stock on the date of any such deemed investment of compensation or dividend
equivalents shall be used.
(d) The Administrator may, in his sole discretion, provide to
classes of Participants and Former Participants, as he shall specify, additional
hypothetical investments currently a Private Equity investment choice and
Multi-Strategy investment choice. With respect to amounts treated as if invested
in such additional hypothetical investments, the Administrator may specify (i)
restrictions on transfers and re-allocations and (ii) a distribution schedule
different from that specified herein; provided that the Administrator may change
such
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restrictions and distribution schedule, in his discretion, on 30 days
advance notice to Participants and Former Participants.
3.4 LIMITATIONS ON HYPOTHETICAL INVESTMENTS. Notwithstanding the
provisions of Section 3.3, the Administrator may, in his sole discretion
(i) replace any investment vehicle with a deemed investment
vehicle having comparable investments and investment objectives and
risks substantially similar to the vehicle being replaced, or
(ii) discontinue such vehicle as an alternative for deemed
investment hereunder and provide each affected Participant the
opportunity,
without limiting or otherwise impairing any other right of the Participant under
this Article III regarding changes of investment directions, to redirect the
allocation of the value of such Participant's account that had been deemed
invested in such discontinued investment fund among the remaining deemed
investment vehicles or, in the discretion of the Administrator, into another
deemed investment vehicle established by the Administrator. See Appendix I with
respect to the exercise of the Administrator's discretion for changes to funds
and allocation of existing balances under this Program and the J.P. Morgan
Deferred IC Program as of January 1, 2002. See Appendix II for changes effective
June 30, 2003.
3.5 HYPOTHETICAL INVESTMENT.
(a) As of each Valuation Date, the value of each Participant's
account shall be determined by reference to the value of the hypothetical
investment choice for the particular fund or funds under the Qualified Plan (or,
if applicable, the published rate of return for the NASDAQ Index, the Common
Stock or such other fund as may be made available) in which the portion of the
account is deemed invested plus any income or loss on that hypothetical
investment choice. The amounts credited to DSIB and IAP shall receive the rate
specified at the date of the deemed investment.
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(b) Except as provided in Section 3.4, amounts for which no
investment election has been made shall be treated as if
invested in the Stable Value Fund, until such election is made.
3.6 ALLOCATION OF HYPOTHETICAL INVESTMENTS; REALLOCATION OF
HYPOTHETICAL INVESTMENTS.
(a) A Participant may elect the manner at such times, as the
Administrator may specify, in which deferrals of future incentive compensation,
Benefits Eligible Compensation or Eligible Compensation, are deemed allocated to
one or more of the hypothetical investments described in Section 3.3.
(b) A Participant or Former Participant may at such times, as the
Administrator may specify, also reallocate/transfer among the hypothetical
investments amounts previously credited to his account on a Valuation Date;
provided that a Participant or Former Participant may not reallocate any amounts
treated as if invested in the Corporation's common stock or DSIB to any other
hypothetical investment choice; provided, further, that for periods prior to
July 1, 1999, a request for reallocation must have been received before the
fifth business date preceding a Valuation Date for it to be effective for that
Valuation Date.
(c) The Administrator in his/her sole discretion may limit transfers
and reallocation among funds under this Program in such manner as he/she may
deem appropriate. The Administrator may exercise such authority on a Program
wide basis or on an individual by individual basis.
3.7 STATEMENT OF ACCOUNT. A statement shall be provided to each
Participant or Former Participant with respect to the amount of his account at
least once a calendar year.
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ARTICLE IV
PAYMENT OF DEFERRED COMPENSATION
4.1 PAYMENT OF DEFERRED COMPENSATION.
(a) Termination of Employment. Except as provided in subsection (b),
upon termination of the Participant's employment with the Corporation or a
Related Company, the value of the account of such individual shall be
distributed to such individual during the month of January or July following the
date of such termination of employment in either installments or a lump sum, as
the Administrator may specify; provided that if the Participant has made a
timely election as solely determined by the Administrator (but always prior to
the calendar year before a payment is due), the Participant shall receive the
value of the account in annual installments or a lump sum in such calendar as
selected by the Participant subject to the consent of the Administrator. The
maximum installment election cannot exceed 15 annual installments, and the
account must be distributed by the date that a Participant attains age 80. An
installment amount shall be based on the balance of an account divided by the
number of installments remaining to be made.
(b) J.P. Morgan Deferred IC Program. Notwithstanding (a) above,
Participants in the J.P. Morgan Deferred IC Program whose employment terminated
on or before December 31, 2001 or who were receiving as of October 31, 2001
distributions from such Program remain subject to the terms of the J.P. Morgan
Deferred IC Program. In the case of other Participants in the J.P. Morgan
Deferred IC Program, their balances became subject to the terms and conditions
of this Program effective January 1, 2002.
(c) Total and Permanent Disability. Upon a termination of employment
due to a Total and Permanent Disability of a Participant, the Administrator may,
in his or her sole discretion, distribute the account under the Program
distributed pursuant to Section 4.1(a).
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(d) In-Service Withdrawal. A Participant at the date of an election
to participate with respect to a deferral of incentive compensation (or with
respect to the Eligible Compensation or Benefits Eligible Compensation Plan on
the date specified by the Administrator for deferrals in the next succeeding
year) may elect a specific year during active employment in which to begin
receiving the portion of the Account representing such deferred incentive
compensation; provided that such date is at least two years after the deferred
amount would have been paid if it were not deferred; provided further that such
election shall not apply to DSIB, IPA or other investment choices as specified
by the Administrator.
(e) Shares of Common Stock, DSIB and IPA. (i) The portion of an
account treated as if invested in the Common Stock investment choice shall be
distributable solely in shares of the common stock of the Corporation and shall
be distributed as set forth in Section 4.1(a), (b) or (c) above.
(ii) The portion of the account treated as if invested in the DSIB
shall be paid in 15 equal, annual installments starting in January of the year
following termination of employment, unless Administrator in his/her sole
discretion specifies a later date. DSIB payments shall not commence prior to
termination of employment.
(iii) The portion of the account treated as if invested in the IPA
shall be paid in 15 annual installments, calculated as a 15 year annuitized
amount based on the specified interest rate for the year of deferral into IPA.
Installments payments (with the exception of the first installment) shall
receive an annual inflation adjustment as described Section 3.3(b)(iii).
Distributions shall commence in January of the year following termination of
employment, unless the Administrator in his/her sole discretion specifies a
later date. IPA payments shall not commence prior to termination of employment.
(e) Shares Available for Issuance. An aggregate of 500,000 shares of
authorized but unissued shares of common stock of the Corporation has been
reserved for issuance pursuant to this Program, as subject to adjustment
provided for in Section 5.8.
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(f) Valuation. For purposes of distribution, the balance of an
account shall be valued as of the Valuation Date immediately preceding the date
that the balance of such account or the particular installment thereof is to be
distributed.
4.2 FINANCIAL EMERGENCY PAYMENTS. Notwithstanding any other
provisions of this Plan, if the Administrator determines, after consideration of
an application of a Participant or Former Participant, such individual has a
financial emergency of such a substantial nature and beyond the individual's
control that a contemporaneous payment of incentive compensation previously
deferred under this Plan is warranted, the Administrator may, in his sole and
absolute discretion, direct that all or a portion of the balance of the account
be paid or distributed to the Participant or Former Participant in such manner
and at such time as the Administrator shall specify.
4.3 PAYMENTS TO A DECEASED PARTICIPANT'S BENEFICIARY. In the event
of a death of a Participant or Former Participant before the value of the
account under the Program has been fully distributed, the value of the account
of such individual shall be distributed in a lump sum to the individual's
Beneficiary (or his/her estate in the event that no Beneficiary, including a
secondary/contingent Beneficiary shall survive the Participant or Former
Participant) as soon as practicable thereafter after receipt of all
documentation. Shares of the common stock of the Corporation shall be
distributed with respect to any portion of the account treated as if invested in
the Corporation's common stock. Notwithstanding the foregoing, any compensation
treated as if invested in the DSIB or IPA shall be distributed to the named
Beneficiary (i) if prior to the commencement of DSIB payments, in 15 annual
installments in an amount specified by the Administrator for the calendar year
in which the deferral occurred; or (ii) if after commencement of DSIB or IPA
payments, annual payments in the same amount as the Participant received until
an aggregate 15 payments have been received by the Participant and his
Beneficiary.
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ARTICLE V
GENERAL PROVISIONS
5.1 PARTICIPANT'S RIGHTS UNSECURED. The right of any Participant or
Former Participant to receive future payments under the provisions of the
Program shall be an unsecured claim against the general assets of (i) the Bank
if the Participating Company employing the Participant at the time that his/her
compensation is deferred was a bank or a bank subsidiary, or (ii) the
Corporation, if the Participating Company employing the Participant at the time
his/her compensation is deferred was not a bank or a bank subsidiary. Deferrals
under the Chemical Plan prior to January 1, 1997 shall be allocated to the Bank
or Corporation depending upon the employer of the Employee on January 1, 1997.
No Participating Company (other than the Corporation or Bank) is liable for
payment of benefits to its Employees under the Plan.
5.2 ASSIGNABILITY. No right to receive payments hereunder shall be
transferable or assignable by a Participant or Former Participant except by will
or by the laws of descent and distribution or by a court of competent
jurisdiction. Any other attempted assignment or alienation of payments hereunder
shall be void and of no force or effect.
5.3 ADMINISTRATION. Except as otherwise provided herein, the Plan
shall be administered by the Administrator who shall have the authority to adopt
rules and regulations for carrying out the provisions of the Plan, who shall
interpret, construe and implement the provisions of the Plan, and whose
determinations shall be conclusive and binding. In carrying out his
responsibilities hereunder, the Administrator may appoint such delegates as
he/she deems appropriate. Notwithstanding anything herein to the contrary, the
Administrator shall have the absolute right to delay any payments for a
reasonable period following the calendar year of termination of employment.
5.4 AMENDMENT. The Plan may at any time or from time to time be
amended, modified or terminated by the Board of Directors or the Administrator;
provided that no amendment, modification, or termination shall, without the
consent of the Participant, reduce the value of Participant's account at that
time; provided further that as to persons subject to
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Section 16(a) of the Securities Exchange Act of 1934, as amended, no provision
hereunder which relates to the Chase Common investment choice may be amended at
less than six months intervals, and such amendment shall be subject to
stockholder approval if required by SEC Rule 16b-3.
5.5 LEGAL OPINIONS. The Administrator may consult with legal
counsel, who may be counsel for the Corporation or other counsel, with respect
to his obligations or duties hereunder, or with respect to any action,
proceeding or any question at law, and shall not be liable with respect to any
action taken, or omitted, by him in good faith pursuant to the advice of such
counsel.
5.6 LIABILITY. Any decision made or action taken by the Board of
Directors, the Committee, the Administrator or the Corporation, arising out of,
or in connection with, the construction, administration, interpretation and
effect of the Program shall be within their absolute discretion, and will be
conclusive and binding on all parties. Neither the Administrator nor a member of
the Board of Directors of the Corporation or the Committee of the Corporation
shall be liable for any act or action hereunder, whether of omission or
commission, by any other member or employee or by any agent to whom duties in
connection with the administration of the Plan have been delegated or, except in
circumstances involving bad faith, for anything done or omitted to be done in
connection with this Plan.
5.7 CORPORATE REORGANIZATION. In the event that as of any date a
corporation or unincorporated entity ceases to meet the definition of Related
Company, such corporation or entity shall cease to be a Participating Employer
and its employees shall cease to be Participants under the Plan as of the
Valuation Date coincident with or immediately following such date, and this Plan
shall be treated as though a separate plan for the benefit of its employees who
were Participants in the Plan to govern the balances in an account under the
Program as of such Valuation Date.
5.8 ADJUSTMENTS. The maximum aggregate number of shares of common
stock of the Corporation to be issued under this Plan shall be proportionately
adjusted for any increase or decrease in the number of issued shares of common
stock of the Corporation
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resulting from a subdivision or consolidation of such shares of common stock or
other similar capital adjustment, or the payment of a stock dividend (but only
if such stock dividend is 5% or more), or other increases or decreases in such
shares of common stock effected without receipt of consideration by the
Corporation.
5.9 COMPLIANCE. This Program will be administered to comply with the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended.
5.10 ASSUMED LIABILITY. Effective January 1, 1996, this Program
governs the account liability for payments in lieu of Thrift-Incentive Plan
Contributions liability under the TRA Supplemental Benefit Plan of The Chase
Manhattan Bank, N.A. prior to merger with Chemical Bank. All rights and benefits
for such liability are governed by this Program.
5.11 CONSTRUCTION. The masculine gender, where appearing in this
Program, shall be deemed to also include the feminine gender. The singular shall
also include the plural, where appropriate.
ARTICLE VI
OBLIGATIONS UNDER TRA SUPPLEMENTAL PLAN AND
UNDER SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
6.1 TRA SUPPLEMENTAL PLAN. The balances of participants in Section
II of the TRA Supplemental Retirement Plan became part of the account balances
under this Program as of January 1, 1997. Such balances are subject to the terms
and conditions of this Program, including, but not limited to the hypothetical
investments described in Section 3.3.
6.2 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. (a) Each Employee who
had a benefit as of December 31, 1996 under the Supplemental Executive
Retirement Plan shall have an account under this Program consisting of:
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(i) the amount of his/her Supplemental Chase Retirement Account
including any amounts credited for the bonus payable in 1996; and
(ii) if such individual had accrued an annuity frozen as of
December 31, 1988, under the Supplemental Executive Retirement Plan,
an amount derived by converting the accrued life annuity frozen as
of December 31, 1988 utilizing the factors set forth in Section 4.1
of the Retirement Plan.
(b) Unless an employee otherwise elects by February 27, 1997, the amount
derived from the SERP shall be treated as if invested in DSIB;
provided that if the Employee elects another form of benefit of the
hypothetical investment, Employee by virtue of such election
acknowledges that such hypothetical investment may provide rates of
return lower than that provided by the Supplemental Executive
Retirement Plan.
(c) Employees shall vest in the balance of their account subject to SERP
only if they have a Period of Service recognized for Pay Credit
purposes under the Retirement Plan of at least 10 years.
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APPENDIX I
- - In December of 2001, Participants who had account balances under the J.P.
Morgan Deferred IC Program had the opportunity to transfer balances among
the investment choices under that Program to be effective as of January 1,
2002. Balances in the heritage Morgan accounts were then directed to the
new investment choices as follows:
Equity Account-S&P 500 Index Investment Choice
Bond Account-Intermediate Bond Investment Choice
Balanced Account-Moderately Aggressive Lifestyle Investment Choice
Deferred Cash Account-Short-Term Fixed Income Investment Choice
International Equity Account-International Equity Index Investment Choice
NASDAQ Account-NASDAQ 100 Index Investment Choice
MIPs Account-remain in place as IPA Investment Choice
DIBA Account-remain in place as DSIB Investment Choice
- - Starting on January 7, 2002, heritage Morgan Participants had the
opportunity to transfer/reallocate balances (other than the DSIB
investment choice, IPA investment choice and Common Stock investment
choice) on a daily basis.
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APPENDIX II
Effective June 30, 2003, the Large Cap Blend investment choice was eliminated as
an investment choice under the Program. Any amounts remaining in that investment
choice on June 30, 2003, as well as future contributions, were automatically
treated as invested in the S&P 500 Index investment choice.