1
THE CHASE MANHATTAN CORPORATION
DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
(As amended and restated December 1996)
1. Definitions - The following are defined terms wherever they appear in the
Plan.
1.1 "Administrator" shall mean the Secretary, or such other person or
committee appointed by the Chief Executive Officer of the
Corporation, responsible for those functions assigned to the
Administrator under the Plan.
1.2 "Bank" shall mean The Chase Manhattan Bank.
1.3 "Board of Directors" shall mean the Board of Directors of the
Corporation or the Bank.
1.4 "Corporation" shall mean The Chase Manhattan Corporation.
1.5 "Deferred Compensation Account" or "Account" shall mean the separate
account established under the Plan for each Participant as described
in Section 3.1.
1.6 "Director" shall mean a member of the Board of Directors of the
Corporation or the Board of Directors of the Bank who is not also an
employee (or former employee) of the Corporation or the Bank.
1.7 "Participant" shall mean each Director who participates in the Plan
in accordance with the terms and conditions of the Plan.
1.8 "Plan" shall mean the Deferred Compensation Plan for Non-Employee
Directors of The Chase Manhattan Corporation and The Chase Manhattan
Bank, as amended from time to time.
1.9 "Stock" shall mean the Common Stock of the Corporation, $1.00 par
value per share.
1.10 "Valuation Date" shall mean the close of business on the last
business day of each calendar quarter.
1.11 "Subsidiary" shall mean any corporation which at the time qualifies
as a subsidiary of the Corporation under the definition of
"subsidiary corporation" in Section 425(f) of the Internal Revenue
Code, as amended from time to time.
2
2. Participation.
2.1 Eligibility. Each Director is eligible to participate in the Plan.
2.2 Participation in the Plan; Termination of Participation.
(a) An individual may elect to participate by delivering a
properly executed election form to the Administrator. The
election form shall specify: (1) the amount, by percentage or
by dollar amount, of cash compensation and/or the amount (but
not less than all) of Stock compensation to be deferred; (2)
the allocation of deferred cash compensation among the forms
of hypothetical investment of such deferred compensation; (3)
the manner in which deferred compensation is to be paid; (4)
the date or dates for payment of deferred compensation; and
(5) the manner of payment of deferred compensation to a
Participant's estate in the event of death before complete
distribution of deferred compensation.
(b) The effective date for participation in the Plan by an
individual who is a Director shall be the first day of the
calendar year next beginning after the date that the
Administrator receives the individual's election to
participate in the Plan. The effective date of participation
in the Plan for an individual who is not a Director shall be
the date that he becomes a Director if the Administrator has
received an election to participate in the Plan prior to that
date.
(c) A Participant may elect to terminate participation in the Plan
by delivering written notice to the Administrator. The
effective date for termination shall be the date specified by
the Participant in the notice of termination (but not earlier
than the date of such notice).
(d) The deferral of a Participant's compensation shall begin or
end, as appropriate, as of the effective date of the
Participant's election to participate or of the Participant's
notice to terminate participation, as appropriate, described
in paragraphs (b) and (c) above.
2.3 Term of Election of Deferral; Modification or Termination of
Election of Deferral.
(a) An election to defer compensation, or to modify a prior
election to defer compensation, must be made by the
Participant prior to the commencement of the period during
which the compensation is earned or to which the compensation
relates and shall continue in effect until modified or
terminated by the Participant or until the Participant ceases
to be eligible to participate in the Plan. A Participant may
at any time modify
2
3
or terminate an election to defer compensation, but in each
case only once in any 12-month period.
(b) A termination of an election to defer compensation shall apply
prospectively only and shall not affect previously deferred
compensation. A Participant who terminates an election to
defer compensation is not eligible to participate in the Plan
again until 12 months after the date that the Participant's
election to terminate becomes effective under Section 2.2.
3. Compensation Deferred.
3.1 Deferred Compensation Account.
(a) A Deferred Compensation Account shall be established for each
Participant. The Account shall consist of two parts: (1) cash
compensation deferred by a Participant under the Plan, along
with hypothetical income (or losses) on this compensation (the
"Cash Account") and (2) compensation in the form of Stock
plus Stock credited to Participant as a result of the
hypothetical reinvestment of hypothetical dividends on such
Stock compensation (the "Stock Account"). The amount of cash
deferred (plus income or less losses) shall be credited to the
Participant's Cash Account. The number of shares of Stock
deferred, plus Stock resulting from the hypothetical
reinvestment of hypothetical dividends on deferred Stock
compensation, shall be credited to the Participant's Stock
Account.
(b) Deferred cash compensation shall be credited to the
Participant's Cash Account as of the last day of the month
during which such cash compensation was otherwise payable to
the Participant. For purposes of hypothetical investment of
cash compensation under Section 3.3, however, deferred cash
compensation shall not be considered to be hypothetically
invested until the first day of the calendar quarter next
following the date that such compensation is credited to the
Participant's Cash Account and shall not begin to earn income
until the first day of such quarter.
(c) Deferred Stock compensation shall be credited annually to the
Participant's Stock Account as of December 1 or such other
date as may be specified by the Board of Directors for the
payment of Stock compensation.
3.2 Amount of Deferral. A Participant may elect to defer receipt of all
or a specified portion, by percentage or by dollar amount, of
compensation otherwise payable in cash and/or all (but not a portion
of) compensation payable in Stock to the Participant for services as
a Director or as a member of a committee of the Board of Directors
of the Corporation or the Bank or as a member of any advisory
3
4
board of the Corporation, the Bank or any subsidiary of the
Corporation or the Bank. For these purposes, compensation shall
include, but shall not be limited to, Directors' fees (whether in
cash or Stock), retainers, meeting fees, fees for committees or
other similar forms of remuneration, but shall not include direct
reimbursement of expenses.
3.3 Hypothetical Investment of Cash. Deferred cash compensation is
assumed to be invested, without charge, in one or more of the
investment equivalents made available from time to time hereunder.
Descriptions of investment equivalents available under the Plan
shall be provided to each Participant on or prior to the Participant
making an allocation or reallocation of investment equivalents into
which any deferred cash payments are to be allocated or reallocated.
3.4 Time of Hypothetical Investment of Cash. The amount of cash in the
Participant's Cash Account on each Valuation Date which has not been
previously invested shall be deemed invested in a hypothetical
investment on that Valuation Date based on the value of the
hypothetical investment on that date.
3.5 Allocation of Hypothetical Investments of Cash; Reallocation of
Hypothetical Investments of Cash.
(a) A Participant may allocate the balance of the Participant's
Cash Account to one or more hypothetical investments. The
allocation shall be selected by the Participant.
(b) A Participant may at any time prospectively change the
allocation of the hypothetical investment of future deferred
cash compensation. The reallocation of such future deferred
compensation may be made only once in a 12-month period and
shall be effective as of, and shall be based upon values in
effect on, the Valuation Date which is coincident with or next
following the date that the Administrator receives the
Participant's written notification of the reallocation.
(c) A Participant may at any time also reallocate among the
hypothetical investments any cash compensation previously
deferred by the Participant and then credited to the
Participant's Cash Account. This reallocation is in addition
to the reallocation described in paragraph (b) above and may
be made only once in a 12-month period. The reallocation shall
be effective as of, and based upon values in effect on, the
Valuation Date which is coincident with or next following the
date that the Administrator receives the Participant's written
notification of the reallocation.
4
5
3.6 Hypothetical Dividends on Deferred Stock. Dividends shall be deemed
to have been paid on Stock allocated to a Participant's Stock
Account as if such allocated Stock were actual shares of Stock
issued and outstanding on the record date for dividends on Stock.
Such hypothetical dividends shall be converted into deferred shares
of Stock and shall be credited to a Participant's Stock Account
quarterly on each payment date in the amount of such hypothetical
dividends divided by the average of the high and low selling price
of one share of Stock as reported in the New York Stock Exchange
Composite Transactions on such payment date. Fractional shares shall
be credited to a Participant's Stock Account cumulatively, but the
balance of shares of Stock in a Participant's Stock Account shall be
rounded to the next highest whole share in the event of any issuance
and distribution of Stock to such Participant pursuant to Section
4.1. The number of shares of Stock in a Participant's Stock Account
shall be adjusted to reflect stock dividends, splits and
reclassifications.
3.7 Balance of Deferred Compensation Account. The balance of each
Participant's Deferred Compensation Account shall include: (1) cash
compensation deferred by the Participant and income (or losses) from
the hypothetical investment of this compensation credited to the
Participant's Cash Account and (2) Stock compensation deferred by
the Participant and credited to the Participant's Stock Account and
any additional Stock credited to the Participant's Stock Account
from the investment of dividends deemed paid on such Stock
compensation. The balance of each Participant's Deferred
Compensation Account, and the income or losses attributable to the
Account since the last Valuation Date, shall be determined as of
each Valuation Date.
3.8 Statement of Account. A statement shall be sent to each Participant
as to the balance of the Participant's Deferred Compensation Account
at least once a calendar year.
4. Payment of Deferred Compensation.
4.1 Payment of Deferred Compensation. Upon termination of services as a
Director, the balance of the Participant's Deferred Compensation
Account shall (subject to Section 4.2) be paid to the Participant in
the manner and at the time selected by the Participant prior to the
date of such termination. For purposes of payment, the balance of
the Participant's Account shall be valued as of the Valuation Date
coincident with or immediately preceding the date that the balance,
or the particular installment thereof, is to be paid, but the
balance of the Participant's Account shall include all compensation
deferred by the Participant since the last Valuation Date.
5
6
4.2 Elections Pertaining to Payments. The Participant may elect the
manner of payment of the balance of the Participant's Deferred
Compensation Account, whether in the Cash or Stock Account,
including the dates of periodic payments over a specified period of
years or the date of a lump sum distribution, provided that:
(a) If the payment provides for installments, the payments shall
be made at least annually and not more frequently than
quarterly and shall be payable for a period not to exceed 15
years;
(b) Except as provided in paragraph (d) below, no payments may be
made prior to the first day of the calendar year following the
calendar year during which the Participant terminates services
as a Director unless the payment is made pursuant to Section
4.4 or Section 4.5;
(c) No payments from any Participant's Stock Account shall be
payable otherwise than in shares of Stock; and
(d) No payments from any Participant's Cash Account shall be
payable otherwise than in cash.
4.3 Modifications of Elections Pertaining to Payments. A Participant may
at any time prior to the date that the Participant's service as a
Director is terminated modify previous elections pertaining to: (1)
the date or dates and the manner in which the balance of the
Participant's Deferred Compensation Account is to be paid and (2)
the manner of payment of the balance of the Participant's Deferred
Compensation Account in the event of the Participant's death.
4.4 Payments to a Deceased Participant's Estate or Beneficiaries.
(a) A Participant may elect by notice to the Administrator that in
the event of the Participant's death, any balance in the
Participant's Deferred Compensation Account shall be paid (i)
to beneficiaries, named by the Participant, provided that if
no such election is made, payment shall be to the
Participant's estate; and (ii) in the same manner as provided
with respect to the Participant, provided that if no such
election is made the balance of the Participant's Deferred
Compensation Account shall be determined as of the Valuation
Date coincident with or immediately following the
Participant's death and this amount shall be paid in a single
payment to the Participant's estate as soon as reasonably
practicable thereafter.
(b) In the event of a Participant's election to have Deferred
Compensation payments made in installments following the death
of such Participant, the
6
7
Administrator may, upon consideration of the application of
the duly appointed administrator or executor of the
Participant's estate, or such beneficiaries as have been named
by the Participant, direct that the balance of the
Participant's Deferred Compensation Account be paid in a
single payment. The payment shall be made at the time
specified by the Administrator.
4.5 Unforeseeable Emergency. A Participant may request the Administrator
to make payment in the care of an unforeseeable emergency. For
purposes of this Plan, an unforeseeable emergency is severe
financial hardship to the Participant resulting from a sudden and
unexpected illness or accident of the Participant or of a dependent
(as defined by relevant provisions of law) of the Participant, loss
of the Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant. The circumstances that
will constitute an unforeseeable emergency will depend upon the
facts of each case, but, in any case, payment may not be made to the
extent that such hardship is or may be relieved (i) through
reimbursement or compensation by insurance or otherwise, (ii) by
liquidation of the Participant's assets, to the extent the
liquidation of such assets would not itself cause severe financial
hardship, or (iii) by cessation of deferrals under the Plan.
Examples of what are not considered to be unforeseeable emergencies
include the need to send a Participant's child to college or the
desire to purchase a home. Withdrawals of amounts because of an
unforeseeable emergency must only be permitted to the extent
reasonably needed to satisfy the emergency need.
5. General Provisions.
5.1 Participant's Rights Unsecured. The right of any Participant to
receive future payments of cash or Stock under the provisions of the
Plan shall be an unsecured claim against the general assets of the
Corporation or the Bank, as appropriate.
5.2 Assignability. No right to receive payments or distributions under
the Plan shall be transferable or assignable by a Participant,
except by will, by the laws of descent and distribution or by a
court of competent jurisdiction. Any other attempted assignment or
alienation of payments under the Plan 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 Plan and who
shall interpret, construe and implement the provisions of the Plan.
5.4 Amendment. The Plan may at any time or from time to time be amended,
modified or terminated by the Corporation and/or the Bank, provided
that no
7
8
amendment, modification or termination (a) shall, without the
consent of the Participant and the approval of the Board of
Directors, adversely affect the balance of a Participant's Deferred
Compensation Account at that time or (b) permit payment of the
balance of a Participant's Deferred Compensation Account prior to
the date of payment specified in Section 4.2 (except for payments
provided in Section 4.4 or Section 4.5).
5.5 Legal Opinions. The Administrator may consult with legal counsel,
who may be counsel for the Corporation or other counsel, with
respect to the Administrator's obligations or duties hereunder, or
with respect to any action, proceeding or any question of law, and
shall not be liable with respect to any action taken or omitted to
be taken, by the Administrator 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 Administrator, or any employee of the Corporation or
any of its subsidiaries arising out of or in connection with the
construction, administration, interpretation or effect of the Plan
shall be within their or its absolute discretion and shall be
conclusive and binding on all parties. Neither the Administrator nor
any member of the Board of Directors, and no employee of the
Corporation or of any of its subsidiaries, shall be liable for any
act or action hereunder, whether of omission or commission, except
in circumstances involving bad faith, or for any act of any other
member or employee or of any agent to whom duties in connection with
the administration of the Plan have been delegated.
5.7 Construction. The singular shall include the plural, where
appropriate.
8