EXHIBIT 10.1
(PRINCIPAL FINANCIAL GROUP(R) LOGO)
THE EXECUTIVE NONQUALIFIED EXCESS PLAN(SM)
PLAN DOCUMENT
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TABLE OF CONTENTS
THE EXECUTIVE NONQUALIFIED EXCESS PLAN(SM)
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Section 1. Purpose:...................................................... 1
Section 2. Definitions:.................................................. 1
2.1 "Active Participant" .......................................... 1
2.2 "Adoption Agreement" .......................................... 2
2.3 "Beneficiary" ................................................. 2
2.4 "Board" ....................................................... 2
2.5 "Change in Control" ........................................... 2
2.6 "Committee" ................................................... 3
2.7 "Compensation" ................................................ 3
2.8 "Crediting Date" .............................................. 4
2.9 "Deferred Compensation Account" ............................... 4
2.10 "Disabled" .................................................... 4
2.11 "Education Account" ........................................... 4
2.12 "Effective Date" .............................................. 4
2.13 "Employee" .................................................... 5
2.14 "Employer" .................................................... 5
2.15 "Employer Credits" ............................................ 5
2.16 "Independent Contractor" ...................................... 5
2.17 "In-Service Account" .......................................... 5
2.18 "Normal Retirement Age" ....................................... 6
2.19 "Participant" ................................................. 6
2.20 "Participant Deferral Agreement" .............................. 6
2.21 "Participant Deferral Credits" ................................ 6
2.22 "Participating Employer"....................................... 6
2.23 "Performance-Based Compensation" .............................. 6
2.24 "Plan" ........................................................ 7
2.25 "Plan Administrator" .......................................... 7
2.26 "Plan-Approved Domestic Relations Order" ...................... 7
2.27 "Plan Year" ................................................... 9
2.28 "Qualifying Distribution Event" ............................... 9
2.29 "Retirement Account" .......................................... 9
2.30 "Service" ..................................................... 9
2.31 "Service Bonus" ............................................... 9
2.32 "Specified Employee" .......................................... 10
2.33 "Spouse" or "Surviving Spouse" ................................ 10
2.34 "Student" ..................................................... 10
2.35 "Trust" ....................................................... 10
2.36 "Trustee" ..................................................... 10
2.37 "Unforeseeable Emergency" ..................................... 10
2.38 "Years of Service" ............................................ 11
Section 3. Participation:................................................ 11
Section 4. Credits to Deferred Compensation Account:..................... 11
4.1 Participant Deferral Credits. ................................ 11
4.2 Employer Credits. ............................................ 13
4.3 Deferred Compensation Account. ............................... 13
Section 5. Qualifying Distribution Events:............................... 14
5.1 Separation from Service. ..................................... 14
5.2 Disability. .................................................. 14
5.3 Death. ....................................................... 14
5.4 In-Service Distributions. .................................... 14
5.5 Education Distributions. ..................................... 15
5.6 Change in Control. ........................................... 16
5.7 Unforeseeable Emergency. ..................................... 16
Section 6. Qualifying Distribution Events Payment Options:............... 17
6.1 Payment Options. ............................................. 17
6.2 De Minimis Amounts. .......................................... 18
6.3 Subsequent Elections. ........................................ 19
6.4 Acceleration Prohibited. ..................................... 19
Section 7. Vesting:...................................................... 20
Section 8. Accounts; Deemed Investment; Adjustments to Account:.......... 20
8.1 Accounts. .................................................... 20
8.2 Deemed Investments. .......................................... 20
8.3 Adjustments to Deferred Compensation Account. ................ 21
Section 9. Administration by Committee:.................................. 21
9.1 Membership of Committee. ..................................... 21
9.2 Committee Officers; Subcommittee. ............................ 21
9.3 Committee Meetings. .......................................... 22
9.4 Transaction of Business. ..................................... 22
9.5 Committee Records. ........................................... 22
9.6 Establishment of Rules. ...................................... 22
9.7 Conflicts of Interest. ....................................... 22
9.8 Correction of Errors. ........................................ 23
9.9 Authority to Interpret Plan. ................................. 23
9.10 Third Party Advisors. ........................................ 23
9.11 Compensation of Members. ..................................... 23
9.12 Expense Reimbursement. ...................................... 24
9.13 Indemnification. ............................................. 24
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Section 10. Contractual Liability; Trust:................................ 24
10.1 Contractual Liability. ....................................... 24
10.2 Trust. ....................................................... 25
Section 11. Allocation of Responsibilities:.............................. 25
11.1 Board.......................................................... 25
11.2 Committee...................................................... 25
11.3 Plan Administrator............................................. 25
Section 12. Benefits Not Assignable; Facility of Payments:............... 26
12.1 Benefits Not Assignable. ..................................... 26
12.2 Plan-Approved Domestic Relations Orders. ..................... 26
12.3 Payments to Minors and Others. ............................... 27
Section 13. Beneficiary:................................................. 27
Section 14. Amendment and Termination of Plan:........................... 28
14.1 Termination in the Discretion of the Employer. ............... 28
14.2 Termination Upon Change in Control. .......................... 29
14.3 Termination On or Before December 31, 2005. .................. 29
14.4 No Financial Triggers. ....................................... 29
Section 15. Communication to Participants:............................... 29
Section 16. Claims Procedure:............................................ 29
16.1 Filing of a Claim for Benefits. .............................. 29
16.2 Notification to Claimant of Decision. ........................ 30
16.3 Procedure for Review. ........................................ 30
16.4 Decision on Review. .......................................... 31
16.5 Action by Authorized Representative of Claimant. ............. 31
Section 17. Miscellaneous Provisions:.................................... 31
17.1 Set off. ..................................................... 31
17.2 Notices. ..................................................... 31
17.3 Lost Distributees. ........................................... 32
17.4 Reliance on Data. ............................................ 32
17.5 Receipt and Release for Payments. ............................ 32
17.6 Headings. .................................................... 33
17.7 Continuation of Employment. .................................. 33
17.8 Merger or Consolidation; Assumption of Plan. ................. 33
17.9 Construction. ................................................ 33
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THE EXECUTIVE NONQUALIFIED EXCESS PLAN(SM)
SECTION 1. PURPOSE:
By execution of the Adoption Agreement, the Employer has adopted the
Plan set forth herein to provide a means by which certain management Employees
or Independent Contractors of the Employer may elect to defer receipt of current
Compensation from the Employer in order to provide retirement and other benefits
on behalf of such Employees or Independent Contractors of the Employer, as
selected in the Adoption Agreement. The Plan is intended to be a nonqualified
deferred compensation plan that complies with the provisions of Section 409A of
the Internal Revenue Code (the "Code"). The Plan is intended to be an unfunded
plan maintained primarily for the purpose of providing deferred compensation
benefits 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 and independent contractors.
SECTION 2. DEFINITIONS:
As used in the Plan, including this Section 2, references to one
gender shall include the other and, unless otherwise indicated by the context:
2.1 "ACTIVE PARTICIPANT" means, with respect to any day or date, a
Participant who is in Service on such day or date; provided, that a Participant
shall cease to be an Active Participant immediately upon a determination by the
Committee that the Participant has ceased to be an Employee or Independent
Contractor, or that the Participant no longer meets the eligibility requirements
of the Plan.
2.2 "ADOPTION AGREEMENT" means the written agreement pursuant to which
the Employer adopts the Plan. The Adoption Agreement is a part of the Plan as
applied to the Employer.
2.3 "BENEFICIARY" means the person, persons, entity or entities
designated or determined pursuant to the provisions of Section 13 of the Plan.
2.4 "BOARD" means the Board of Directors of the Employer, if the
Employer is a corporation. If the Employer is not a corporation, "Board" shall
mean the Employer.
2.5 "CHANGE IN CONTROL" of a corporation (or, to the extent permitted
in this Section 2.5, a partnership or other entity) shall occur on the earliest
of the following events:
2.5.1 Change in Ownership: A change in ownership of a corporation
occurs on the date that any one person, or more than one person acting as a
group, acquires ownership of stock of the corporation that, together with
stock held by such person or group, constitutes more than 50% of the total
fair market value or total voting power of the stock of the corporation,
excluding the acquisition of additional stock by a person or more than one
person acting as a group who is considered to own more than 50% of the
total fair market value or total voting power of the stock of the
corporation.
2.5.2 Change in Effective Control: A change in effective control of a
corporation occurs on the date that either:
(i) Any one person, or more than one person acting as a group,
acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such person or persons)
ownership of stock of the corporation possessing 35% or more of the
total voting power of the stock of the corporation; or
(ii) A majority of the members of the board of directors of the
corporation is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the members
of the board of directors prior to the date of the appointment or
election; provided, that this paragraph (ii) shall apply only to a
corporation for which no other corporation is a majority shareholder.
2.5.3 Change in Ownership of Substantial Assets: A change in the
ownership of a substantial portion of a corporation's assets occurs on the
date that any one person, or more than one person acting as a group,
acquires (or has acquired during the 12-month period ending on the date of
the most recent
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acquisition by such person or persons) assets from the corporation that
have a total gross fair market value equal to or more than 40% of the total
gross fair market value of the assets of the corporation immediately prior
to such acquisition or acquisitions. For this purpose, gross fair market
value means the value of the assets of the corporation, or the value of the
assets being disposed of, determined without regard to any liabilities
associated with such assets.
For this purpose, the Change in Control must relate to (i) a corporation that is
the Employer of the Participant; (ii) a corporation that is liable for the
payment of benefits under this Plan; (iii) a corporation that is a majority
shareholder of the corporation described in (i) or (ii); or (iv) any corporation
in a chain of corporations in which each corporation is a majority shareholder
of another corporation in the chain, ending with the corporation described in
(i) or (ii). To the extent provided in regulations and administrative guidance
promulgated under Section 409A of the Code, the provisions of this Section 2.5
may be applied to changes in the ownership of a partnership and changes in the
ownership of a substantial portion of the assets of a partnership. A Change in
Control shall not be deemed to have occurred until a majority of the members of
the Board receive written certification from the Committee that one of the
events set forth in this Section 2.5 has occurred. The occurrence of an event
described in this Section 2.5 must be objectively determinable by the Committee
and, if made in good faith on the basis of information available at the time,
such determination shall be conclusive and binding on the Committee, the
Employer, the Participants and their Beneficiaries for all purposes of the Plan.
2.6 "COMMITTEE" means the person designated in the Adoption Agreement.
If the Committee designated in the Adoption Agreement is unable to serve, the
Employer shall satisfy the duties of the Committee provided for in Section 9.
2.7 "COMPENSATION" shall have the meaning designated in the Adoption
Agreement.
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2.8 "CREDITING DATE" means the date designated in the Adoption
Agreement for crediting the amount of any Participant Deferral Credits to the
Deferred Compensation Account of a Participant. Employer Credits may be credited
to the Deferred Compensation Account of a Participant on any day that securities
are traded on a national securities exchange.
2.9 "DEFERRED COMPENSATION ACCOUNT" means the account maintained with
respect to each Participant under the Plan. The Deferred Compensation Account
shall be credited with Participant Deferral Credits and Employer Credits,
credited or debited for deemed investment gains or losses, and adjusted for
payments in accordance with the rules and elections in effect under Section 8.
The Deferred Compensation Account of a Participant shall include any In-Service
Account or Education Account of the Participant, if applicable.
2.10 "DISABLED" means a Participant who is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, or is, by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering Employees of the
Employer.
2.11 "EDUCATION ACCOUNT" means a separate account to be kept for each
Participant that has elected to take education distributions as described in
Section 5.5. The Education Account shall be adjusted in the same manner and at
the same time as the Deferred Compensation Account under Section 8 and in
accordance with the rules and elections in effect under Section 8.
2.12 "EFFECTIVE DATE" shall be the date designated in the Adoption
Agreement as of which the Plan first becomes effective. Notwithstanding the
foregoing, any amounts
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credited to the account of a Participant pursuant to the terms of a predecessor
plan of the Employer which are not earned and vested before January 1, 2005,
shall be subject to the terms of this Plan.
2.13 "EMPLOYEE" means an individual in the Service of the Employer if
the relationship between the individual and the Employer is the legal
relationship of employer and employee and if the individual is a highly
compensated or management employee of the Employer. An individual shall cease to
be an Employee upon the Employee's termination of Service.
2.14 "EMPLOYER" means the Employer identified in the Adoption
Agreement, and any Participating Employer which adopts this Plan. The Employer
may be a corporation, a limited liability company, a partnership or sole
proprietorship. All references herein to the Employer shall include each trade
or business (whether or not incorporated) that is required to be aggregated with
the Employer under rules similar to subsections (b) and (c) of Section 414 of
the Code.
2.15 "EMPLOYER CREDITS" means the amounts credited to the
Participant's Deferred Compensation Account by the Employer pursuant to the
provisions of Section 4.2.
2.16 "INDEPENDENT CONTRACTOR" means an individual in the Service of
the Employer if the relationship between the individual and the Employer is not
the legal relationship of employer and employee. An individual shall cease to be
an Independent Contractor upon the termination of the Independent Contractor's
Service. An Independent Contractor shall include a director of the Employer who
is not an Employee.
2.17 "IN-SERVICE ACCOUNT" means a separate account to be kept for each
Participant that has elected to take in-service distributions as described in
Section 5.4. The In-Service Account shall be adjusted in the same manner and at
the same time as the Deferred
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Compensation Account under Section 8 and in accordance with the rules and
elections in effect under Section 8.
2.18 "NORMAL RETIREMENT AGE" of a Participant means the age designated
in the Adoption Agreement.
2.19 "PARTICIPANT" means with respect to any Plan Year an Employee or
Independent Contractor who has been designated by the Committee as a Participant
and who has entered the Plan or who has a Deferred Compensation Account under
the Plan.
2.20 "PARTICIPANT DEFERRAL AGREEMENT" means a written agreement
entered into between a Participant and the Employer pursuant to the provisions
of Section 4.1
2.21 "PARTICIPANT DEFERRAL CREDITS" means the amounts credited to the
Participant's Deferred Compensation Account by the Employer pursuant to the
provisions of Section 4.1.
2.22 "PARTICIPATING EMPLOYER" means any trade or business (whether or
not incorporated) which adopts this Plan with the consent of the Employer
identified in the Adoption Agreement.
2.23 "PERFORMANCE-BASED COMPENSATION" means compensation where the
amount of, or entitlement to, the compensation is contingent on the satisfaction
of preestablished organizational or individual performance criteria relating to
a performance period of at least twelve months in which the service provider
performs services. Organizational or individual performance criteria are
considered preestablished if established in writing at least 90 days after the
commencement of the period of service to which the criteria relates, provided
that the outcome is substantially uncertain at the time the criteria are
established. Performance-based compensation may include payments based upon
subjective performance criteria in accordance
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as provided in regulations and administrative guidance promulgated under Section
409A of the Code.
2.24 "PLAN" means The Executive Nonqualified Excess Plan, as herein
set out or as duly amended. The name of the Plan as applied to the Employer
shall be designated in the Adoption Agreement.
2.25 "PLAN ADMINISTRATOR" means the person designated in the Adoption
Agreement. If the Plan Administrator designated in the Adoption Agreement is
unable to serve, the Employer shall be the Plan Administrator.
2.26 "PLAN-APPROVED DOMESTIC RELATIONS ORDER" shall mean a court order
that is lawfully directed to this Plan and that is served upon the Plan
Administrator before the Participant receives a distribution of his benefit that
pursuant to a state domestic relations law creates or recognizes the existence
of the right of an alternate payee to receive all or a portion of a
Participant's benefit and that meets all of the following requirements. An order
shall not be a Plan-Approved Domestic Relations Order unless the Plan
Administrator determines that the court order on its face and without reference
to any other document states all of the following:
(a) The court order expressly states that it relates to the provision
of child support, alimony, or marital property rights to a spouse, former
spouse, or child of a Participant and is made pursuant to State domestic
relations law.
(b) The court order clearly and unambiguously specifies that it refers
to this Plan.
(c) The court order clearly and unambiguously specifies the name of
the Participant's Employer.
(d) The court order clearly specifies: the name, mailing address, and
social security number of the Participant; and the name, mailing address, and
social security number of each alternate payee.
(e) The court order clearly specifies the amount or percentage, or the
manner in which the amount or percentage is to be determined, of the
Participant's benefit to be paid to or segregated for the separate account of
the alternate payee.
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(f) The court order expressly states that the alternate payee's
segregated account shall bear all fees and expenses as though the alternate
payee were a Participant.
(g) The court order clearly specifies that any distribution to the
alternate payee becomes payable only after a Qualifying Distribution Event of
the Participant and only upon the alternate payee's written claim made to the
Administrator.
(h) The court order clearly specifies that any distribution to any
alternate payee shall be payable only as a lump sum.
(i) The court order expressly states that it does not require this
Plan to provide any type or form of benefit or any option not otherwise provided
under this Plan.
(j) The court order expressly states that the order does not require
this Plan to provide increased benefits.
(k) The court order expressly states that any provision of it that
would have the effect of requiring any distribution to an alternate payee of
deferred compensation that is required to be paid to another person under any
court order is void.
(l) The court order expressly states that nothing in the order shall
have any effect concerning any party's tax treatment, and that nothing in the
order shall direct any person's tax reporting or withholding.
An order shall not be a Plan-approved Domestic Relations Order if it includes
any provision that does not relate to this Plan. Without limiting the
comprehensive effect of the preceding sentence, an order shall not be a
Plan-Approved Domestic Relations Order if the order includes any provision
relating to any pension plan, retirement plan, deferred compensation plan,
health plan, welfare benefit plan, or employee benefit plan other than this
Plan. An order shall not be a Plan-Approved Domestic Relations Order unless the
order provides for only one alternate payee. An order shall not be a
Plan-Approved Domestic Relations Order if the order includes any provision that
would permit the alternate payee to designate any beneficiary for any purpose.
However, an order does not fail to qualify as a Plan-approved Domestic Relations
Order because it provides that any rights not paid before the alternate payee's
death shall be payable to the duly appointed and then-currently serving personal
representative of the alternate payee's estate. The Plan Administrator may
assume that the alternate payee named by the court order is a proper
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payee and need not inquire into whether the person named is a spouse or former
spouse or child of the Participant.
2.27 "PLAN YEAR" means the twelve-month period ending on the last day
of the month designated in the Adoption Agreement; provided, that the initial
Plan Year may have fewer than twelve months.
2.28 "QUALIFYING DISTRIBUTION EVENT" means (i) the separation from
Service of the Participant, (ii) the date the Participant becomes Disabled,
(iii) the death of the Participant, (iv) the time specified by the Participant
for an in-service or education distribution, (v) a Change in Control, or (vi) an
Unforeseeable Emergency, each to the extent provided in Section 5.
2.29 "RETIREMENT ACCOUNT" means the portion of the Deferred
Compensation Account of a Participant, excluding any In-Service Account or any
Education Account. The Retirement Account shall be adjusted in the same manner
and at the same time as the Deferred Compensation Account under Section 8 and in
accordance with the rules and regulations in effect under Section 8.
2.30 "SERVICE" means employment by the Employer as an Employee. For
purposes of the Plan, the employment relationship is treated as continuing
intact while the Employee is on military leave, sick leave, or other bona fide
leave of absence if the period of such leave does not exceed six months, or if
longer, so long as the Employee's right to reemployment is provided either by
statue or contract. If the Participant is an Independent Contractor, "Service"
shall mean the period during which the contractual relationship exists between
the Employer and the Participant. The contractual relationship is not terminated
if the Participant anticipates a renewal of the contract or becomes an Employee.
2.31 "SERVICE BONUS" means any bonus paid to a Participant by the
Employer which is not Performance-Based Compensation.
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2.32 "SPECIFIED EMPLOYEE" means an employee who meets the requirements
of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code (applied in accordance
with the regulations thereunder and without regard to Section 416(i)(5) of the
Code) at any time during the twelve-month period ending on December 31 of each
year (the "identification date"). If the person is a key employee as of any
identification date, the person is treated as a Specified Employee for the
twelve-month period beginning on the first day of the fourth month following the
identification date.
2.33 "SPOUSE" or "SURVIVING SPOUSE" means, except as otherwise
provided in the Plan, a person who is the legally married spouse or surviving
spouse of a Participant.
2.34 "STUDENT" means the individual designated by the Participant in
the Participant Deferral Agreement with respect to whom the Participant will
create an Education Account.
2.35 "TRUST" means the trust fund established pursuant to Section
10.2, if designated by the Employer in the Adoption Agreement.
2.36 "TRUSTEE" means the trustee, if any, named in the agreement
establishing the Trust and such successor or additional trustee as may be named
pursuant to the terms of the agreement establishing the Trust.
2.37 "UNFORESEEABLE EMERGENCY" means a severe financial hardship to
the Participant resulting from a sudden or unexpected illness or accident of the
Participant, the Participant's Spouse or dependent (as defined in Section 152(a)
of the Code), 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.
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2.38 "YEARS OF SERVICE" means each Plan Year of Service completed by
the Participant. For vesting purposes, Years of Service shall be calculated from
the date designated in the Adoption Agreement.
SECTION 3. PARTICIPATION:
The Committee in its discretion shall designate each Employee or
Independent Contractor who is eligible to participate in the Plan. An Employee
or Independent Contractor designated by the Committee as a Participant who has
not otherwise entered the Plan shall enter the Plan and become a Participant as
of the date determined by the Committee. A Participant who separates from
Service with the Employer and who later returns to Service will not be an Active
Participant under the Plan except upon satisfaction of such terms and conditions
as the Committee shall establish upon the Participant's return to Service,
whether or not the Participant shall have a balance remaining in the Deferred
Compensation Account under the Plan on the date of the return to Service.
SECTION 4. CREDITS TO DEFERRED COMPENSATION ACCOUNT:
4.1 PARTICIPANT DEFERRAL CREDITS. To the extent provided in the
Adoption Agreement, each Active Participant may elect, by entering into a
Participant Deferral Agreement with the Employer, to defer the receipt of
Compensation from the Employer by a dollar amount or percentage specified in the
Participant Deferral Agreement. The amount of the Participant Deferral Credit
shall be credited by the Employer to the Deferred Compensation Account
maintained for the Participant pursuant to Section 8. The following special
provisions shall apply with respect to the Participant Deferral Credits of a
Participant:
4.1.1 The Employer shall credit to the Participant's Deferred
Compensation Account on each Crediting Date an amount equal to the total
Participant Deferral Credit for the period ending on such Crediting Date.
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4.1.2 An election pursuant to this Section 4.1 shall be made by the
Participant by executing and delivering a Participant Deferral Agreement to
the Committee. Except as otherwise provided in this Section 4.1, the
Participant Deferral Agreement shall become effective with respect to such
Participant as of the first day of January following the date such
Participant Deferral Agreement is received by the Committee. A
Participant's election may be changed at any time prior to the last
permissible date for making the election as permitted in this Section 4.1,
and shall thereafter be irrevocable. The election of a Participant shall
continue in effect for subsequent years until modified by the Participant
as permitted in this Section 4.1, or until the earlier of the date the
Participant separates from Service or ceases to be an Active Participant
under the Plan.
4.1.3 In the case of the first year in which the Participant becomes
eligible to participate in the Plan, the Participant may execute and
deliver a Participant Deferral Agreement to the Committee within 30 days
after the date the Participant enters the Plan to be effective as of the
first payroll period next following the date the Participant Deferral
Agreement is received by the Committee. For Compensation that is earned
based upon a specified performance period (for example, an annual bonus),
where a deferral election is made in the first year of eligibility but
after the beginning of the service period, the election will be deemed to
apply to Compensation paid for services subsequent to the election if the
election applies to the portion of the Compensation equal to the total
amount of the Compensation for the service period multiplied by the ratio
of the number of days remaining in the performance period after the
election over the total number of days in the performance period.
4.1.4 A Participant may unilaterally modify a Participant Deferral
Agreement (either to terminate, increase or decrease the portion of his
future Compensation which is subject to deferral within the percentage
limits set forth in Section 4.1 of the Adoption Agreement) by providing a
written modification of the Participant Deferral Agreement to the Employer.
The modification shall become effective as of the first day of January
following the date such written modification is received by the Committee.
Notwithstanding the foregoing, at any time during the calendar year 2005, a
Participant may terminate a Participant Deferral Agreement, or modify a
Participant Deferral Agreement to reduce the amount of Compensation subject
to the deferral election, so long as the Compensation subject to the
terminated or modified Participant Deferral Agreement is includible in the
income of the Participant in calendar year 2005 or, if later, in the
taxable year in which the amounts are earned and vested.
4.1.5 If the Participant performed services continuously from a date
no later than the date upon which the performance criteria are established
through a date no earlier than the date upon which the Participant makes an
initial deferral election, a Participant Deferral Agreement relating to the
deferral of Performance-Based Compensation may be executed and delivered to
the Committee no later than the date which is 6 months prior to the end of
the performance period, provided that in no event may an election to defer
Performance-Based
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Compensation be made after such Compensation has become both substantially
certain to be paid and readily ascertainable.
4.1.6 If the Employer has a fiscal year other than the calendar year,
Compensation relating to service in the fiscal year of the Employer (such
as a bonus based on the fiscal year of the Employer), of which no amount is
paid or payable during the fiscal year, may be deferred at the
Participant's election only if the election to defer is made not later than
the close of the Employer's fiscal year next preceding the first fiscal
year in which the Participant performs any services for which such
Compensation is payable.
4.1.7 Compensation payable after the last day of the Participant's
taxable year solely for services provided during the final payroll period
containing the last day of the Participant's taxable year (i.e., December
31) is treated for purposes of this Section 4.1 as Compensation for
services performed in the subsequent taxable year.
4.1.8 The Committee may from time to time establish policies or rules
consistent with the requirements of Section 409A of the Code to govern the
manner in which Participant Deferral Credits may be made.
4.1.9 The requirements of Section 4.1.2 relating to the timing of the
Participant Deferral Agreement shall not apply to any deferral elections
made on or before March 15, 2005, provided that (a) the amounts to which
the deferral election relate have not been paid or become payable at the
time of the election, (b) the Plan was in existence on or before December
31, 2004, (c) the election to defer compensation is made in accordance with
the terms of the Plan as in effect on December 31, 2005 (other than a
requirement to make a deferral election after March 15, 2005), (d) the Plan
is otherwise operated in accordance with the requirements of Section 409A
of the Code, and (e) the Plan is amended to comply with Section 409A in
accordance with Q&A 19 of Notice 2005-1.
4.2 EMPLOYER CREDITS. If designated by the Employer in the Adoption
Agreement, the Employer shall cause the Committee to credit to the Deferred
Compensation Account of each Active Participant an Employer Credit as determined
in accordance with the Adoption Agreement.
4.3 DEFERRED COMPENSATION ACCOUNT. All Participant Deferral Credits
and Employer Credits shall be credited to the Deferred Compensation Account of
the Participant.
13
SECTION 5. QUALIFYING DISTRIBUTION EVENTS:
5.1 SEPARATION FROM SERVICE. If the Participant separates from Service
with the Employer, the vested balance in the Deferred Compensation Account shall
be paid to the Participant by the Employer as provided in Section 6.
Notwithstanding the foregoing, no distribution shall be made earlier than six
months after the date of separation from Service (or, if earlier, the date of
death) with respect to a Participant who is a Specified Employee of a
corporation the stock in which is traded on an established securities market or
otherwise. Any payments to which a Specified Employee would be entitled during
the first six months following the date of separation from Service shall be
accumulated and paid on the first day of the seventh month following the date of
separation from service.
5.2 DISABILITY. If the Participant becomes Disabled while in Service,
the vested balance in the Deferred Compensation Account shall be paid to the
Participant by the Employer as provided in Section 6.
5.3 DEATH. If the Participant dies while in Service, the Employer
shall pay a benefit to the Participant's Beneficiary in the amount designated in
the Adoption Agreement. Payment of such benefit shall be made by the Employer as
provided in Section 6. If a Participant dies following his separation from
Service for any reason, and before all payments under the Plan have been made,
the vested balance in the Deferred Compensation Account shall be paid by the
Employer to the Participant's Beneficiary in a single lump sum.
5.4 IN-SERVICE DISTRIBUTIONS. If the Employer designates in the
Adoption Agreement that in-service distributions are permitted under the Plan, a
Participant may designate in the Participant Deferral Agreement to have a
specified amount credited to the Participant's In-Service Account for in-service
distributions at the later of the date specified by the Participant or as
specified in the Adoption Agreement. In no event may an in-service distribution
be made
14
prior to two years following the establishment of the In-Service Account of the
Participant. If the Participant elects to receive in-service distributions in
annual installment payments, the payment of each annual installment shall be
made on the anniversary of the date of the first installment payment, and the
amount of the annual installment shall be adjusted on such anniversary for
credits or debits to the Participant's account pursuant to Section 8 of the
Plan. Such adjustment shall be made by dividing the balance in the In-Service
Account on such date by the number of annual installments remaining to be paid
hereunder; provided that the last annual installment due under the Plan shall be
the entire amount credited to the Participant's In-Service Account on the date
of payment. Notwithstanding the foregoing, if a Participant incurs a Qualifying
Distribution Event prior to the date on which the entire balance in the
In-Service Account has been distributed, then the balance in the In-Service
Account on the date of the Qualifying Distribution Event shall be distributed to
the Participant in the same manner and at the same time as the balance in the
Deferred Compensation Account is distributed under Section 6 and in accordance
with the rules and elections in effect under Section 6.
5.5 EDUCATION DISTRIBUTIONS. If the Employer designates in the
Adoption Agreement that education distributions are permitted under the Plan, a
Participant may designate in the Participant Deferral Agreement to have a
specified amount credited to the Participant's Education Account for education
distributions at the later of the date specified by the Participant or the date
specified in the Adoption Agreement. If the Participant designates more than one
Student, the Education Account will be divided into a separate Education Account
for each Student, and the Participant may designate in the Participant Deferral
Agreement the percentage or dollar amount to be credited to each Education
Account. In the absence of a clear designation, all credits made to the
Education Account shall be equally allocated to each Education Account. The
Employer shall pay to the Participant the balance in the Education Account with
respect to
15
the Student at the time and in the manner designated by the Participant in the
Participant Deferral Agreement. If the Participant elects to receive education
distributions in annual installment payments, the payment of each annual
installment shall be made on the anniversary of the date of the first
installment payment, and the amount of the annual installment shall be adjusted
on such anniversary for credits or debits to the Participant's Education Account
pursuant to Section 8 of the Plan. Such adjustment shall be made by dividing the
balance in the Education Account on such date by the number of annual
installments remaining to be paid hereunder; provided that the last annual
installment due under the Plan shall be the entire amount credited to the
Participant's Education Account on the date of payment. Notwithstanding the
foregoing, if the Participant incurs a Qualifying Distribution Event prior to
the date on which the entire balance of the Education Account has been
distributed, then the balance in the Education Account on the date of the
Qualifying Distribution Event shall be distributed to the Participant in the
same manner and at the same time as the Deferred Compensation Account is
distributed under Section 6 and in accordance with the rules and elections in
effect under Section 6.
5.6 CHANGE IN CONTROL. If the Employer designates in the Adoption
Agreement that distributions are permitted under the Plan in the event of a
Change in Control, the Participant may designate in the Participant Deferral
Agreement to have the vested balance in the Deferred Compensation Account paid
to the Participant upon a Change in Control by the Employer as provided in
Section 6.
5.7 UNFORESEEABLE EMERGENCY. A distribution from the Deferred
Compensation Account may be made to a Participant in the event of an
Unforeseeable Emergency, subject to the following provisions:
5.7.1 A Participant may, at any time prior to his separation from
Service for any reason, make application to the Committee to receive a
distribution in a lump sum of all or a portion of the vested balance in the
Deferred Compensation
16
Account (determined as of the date the distribution, if any, is made under
this Section 5.7) because of an Unforeseeable Emergency. A distribution
because of an Unforeseeable Emergency shall not exceed the amount required
to satisfy the Unforeseeable Emergency plus amounts necessary to pay taxes
reasonably anticipated as a result of such distribution, after taking into
account the extent to which the Unforeseeable Emergency may be relieved
through reimbursement or compensation by insurance or otherwise or by
liquidation of the Participant's assets (to the extent the liquidation of
such assets would not itself cause severe financial hardship).
5.7.2 The Participant's request for a distribution on account of
Unforeseeable Emergency must be made in writing to the Committee. The
request must specify the nature of the financial hardship, the total amount
requested to be distributed from the Deferred Compensation Account, and the
total amount of the actual expense incurred or to be incurred on account of
the Unforeseeable Emergency.
5.7.3 If a distribution under this Section 5.7 is approved by the
Committee, such distribution will be made as soon as practicable following
the date it is approved. The processing of the request shall be completed
as soon as practicable from the date on which the Committee receives the
properly completed written request for a distribution on account of an
Unforeseeable Emergency. Any deferral election of the Participant in effect
at the time of a distribution on account of an Unforeseeable Emergency may
be cancelled upon the Participant's request, and if so cancelled, any
subsequent deferral by the Participant shall be made pursuant to a new
Participant Deferral Agreement which shall become effective as of the first
day of January following the date such Participant Deferral Agreement is
received by the Committee. If a Participant's separation from Service
occurs after a request is approved in accordance with this Section 5.7.3,
but prior to distribution of the full amount approved, the approval of the
request shall be automatically null and void and the benefits which the
Participant is entitled to receive under the Plan shall be distributed in
accordance with the applicable distribution provisions of the Plan.
5.7.4 The Committee may from time to time adopt additional policies or
rules consistent with the requirements of Section 409A of the Code to
govern the manner in which such distributions may be made so that the Plan
may be conveniently administered.
SECTION 6. QUALIFYING DISTRIBUTION EVENTS PAYMENT OPTIONS:
6.1 PAYMENT OPTIONS. The Employer shall designate in the Adoption
Agreement the payment options which may be elected by the Participant. The
Participant shall elect in the Participant Deferral Agreement the method under
which the vested balance in the
17
Deferred Compensation Account will be distributed from among the designated
payment options. Payment shall be made in the manner elected by the Participant
and shall commence upon the date of the Qualifying Distribution Event. A payment
shall be treated as made upon the date of the Qualifying Distribution Event if
it is made on such date or a later date within the same calendar year or, if
later, by the 15th day of the third calendar month following the Qualifying
Distribution Event. A payment may be further delayed to the extent permitted in
accordance with regulations and guidance under Section 409A of the Code. The
Participant may elect a different method of payment for each Qualifying
Distribution Event as specified in the Adoption Agreement. If the Participant
elects the installment payment option, the payment of each annual installment
shall be made on the anniversary of the date of the first installment payment,
and the amount of the annual installment shall be adjusted on such anniversary
for credits or debits to the Participant's account pursuant to Section 8 of the
Plan. Such adjustment shall be made by dividing the balance in the Deferred
Compensation Account on such date by the number of annual installments remaining
to be paid hereunder; provided that the last annual installment due under the
Plan shall be the entire amount credited to the Participant's account on the
date of payment. In the event the Participant fails to make a valid election of
the payment method, the distribution will be made in a single lump sum payment
upon the Qualifying Distribution Event. Notwithstanding the provisions of
Sections 6.3 or 6.4 of the Plan, a Participant may elect on or before December
31, 2006, the method of payment of amounts subject to Section 409A of the Code
provided that such election applies only to amounts that would not otherwise be
payable in 2006 and does not cause an amount to paid in 2006 that would not
otherwise be payable in such year.
6.2 DE MINIMIS AMOUNTS. Notwithstanding any payment election made by
the Participant, the vested balance in the Deferred Compensation Account of the
Participant will
18
be distributed in a single lump sum payment if the payment accompanies the
termination of the Participant's entire interest in the Plan and the amount of
such payment does not exceed the amount designated by the Employer in the
Adoption Agreement. Such payment shall be made on or before the later of (i)
December 31 of the calendar year in which the Participant separates from Service
from the Employer, or (ii) the date that is 2-1/2 months after the Participant
separates from Service from the Employer.
6.3 SUBSEQUENT ELECTIONS. With the consent of the Committee, a
Participant may delay or change the method of payment of the Deferred
Compensation Account subject to the following requirements:
6.3.1 The new election may not take effect until at least 12 months
after the date on which the new election is made.
6.3.2 If the new election relates to a payment for a Qualifying
Distribution Event other than the death of the Participant, the Participant
becoming Disabled, or an Unforeseeable Emergency, the new election must
provide for the deferral of the first payment for a period of at least five
years from the date such payment would otherwise have been made.
6.3.3 If the new election relates to a payment from the In-Service
Account or Education Account, the new election must be made at least 12
months prior to the date of the first scheduled payment from such account.
For purposes of this Section 6.3 and Section 6.4, a payment is each separately
identified amount to which the Participant is entitled under the Plan; provided,
that entitlement to a series of installment payments is treated as the
entitlement to a single payment.
6.4 ACCELERATION PROHIBITED. The acceleration of the time or schedule
of any payment due under the Plan is prohibited except as provided in
regulations and administrative guidance promulgated under Section 409A of the
Code. It is not an acceleration of the time or schedule of payment if the
Employer waives or accelerates the vesting requirements applicable to a benefit
under the Plan.
19
SECTION 7. VESTING:
A Participant shall be fully vested in the portion of his Deferred
Compensation Account attributable to Participant Deferral Credits, and all
income, gains and losses attributable thereto. A Participant shall become fully
vested in the portion of his Deferred Compensation Account attributable to
Employer Credits, and income, gains and losses attributable thereto, in
accordance with the vesting schedule and provisions designated by the Employer
in the Adoption Agreement. If a Participant's Deferred Compensation Account is
not fully vested upon separation from Service, the portion of the Deferred
Compensation Account that is not fully vested shall thereupon be forfeited.
SECTION 8. ACCOUNTS; DEEMED INVESTMENT; ADJUSTMENTS TO ACCOUNT:
8.1 ACCOUNTS. The Committee shall establish a book reserve account,
entitled the "Deferred Compensation Account," on behalf of each Participant. The
Committee shall also establish an In-Service Account and Education Account as a
part of the Deferred Compensation Account of each Participant, if applicable.
The amount credited to the Deferred Compensation Account shall be adjusted
pursuant to the provisions of Section 8.3.
8.2 DEEMED INVESTMENTS. The Deferred Compensation Account of a
Participant shall be credited with an investment return determined as if the
account were invested in one or more investment funds made available by the
Committee. The Participant shall elect the investment funds in which his
Deferred Compensation Account shall be deemed to be invested. Such election
shall be made in the manner prescribed by the Committee and shall take effect
upon the entry of the Participant into the Plan. The investment election of the
Participant shall remain in effect until a new election is made by the
Participant. In the event the Participant fails for any reason to make an
effective election of the investment return to be credited to his account, the
investment return shall be determined by the Committee.
20
8.3 ADJUSTMENTS TO DEFERRED COMPENSATION ACCOUNT. With respect to each
Participant who has a Deferred Compensation Account under the Plan, the amount
credited to such account shall be adjusted by the following debits and credits,
at the times and in the order stated:
8.3.1 The Deferred Compensation Account shall be debited each business
day with the total amount of any payments made from such account since the
last preceding business day to him or for his benefit.
8.3.2 The Deferred Compensation Account shall be credited on each
Crediting Date with the total amount of any Participant Deferral Credits
and Employer Credits to such account since the last preceding Crediting
Date.
8.3.3 The Deferred Compensation Account shall be credited or debited
on each day securities are traded on a national stock exchange with the
amount of deemed investment gain or loss resulting from the performance of
the investment funds elected by the Participant in accordance with Section
8.2. The amount of such deemed investment gain or loss shall be determined
by the Committee and such determination shall be final and conclusive upon
all concerned.
SECTION 9. ADMINISTRATION BY COMMITTEE:
9.1 MEMBERSHIP OF COMMITTEE. If elected in the Adoption Agreement, the
Committee shall consist of at least three individuals who shall be appointed by
the Board to serve at the pleasure of the Board. Any member of the Committee may
resign, and his successor, if any, shall be appointed by the Board. The
Committee shall be responsible for the general administration and interpretation
of the Plan and for carrying out its provisions, except to the extent all or any
of such obligations are specifically imposed on the Board.
9.2 COMMITTEE OFFICERS; SUBCOMMITTEE. The members of the Committee may
elect Chairman and may elect an acting Chairman. They may also elect a Secretary
and may elect an acting Secretary, either of whom may be but need not be a
member of the Committee. The Committee may appoint from its membership such
subcommittees with such
21
powers as the Committee shall determine, and may authorize one or more of its
members or any agent to execute or deliver any instruments or to make any
payment on behalf of the Committee.
9.3 COMMITTEE MEETINGS. The Committee shall hold such meetings upon
such notice, at such places and at such intervals as it may from time to time
determine. Notice of meetings shall not be required if notice is waived in
writing by all the members of the Committee at the time in office, or if all
such members are present at the meeting.
9.4 TRANSACTION OF BUSINESS. A majority of the members of the
Committee at the time in office shall constitute a quorum for the transaction of
business. All resolutions or other actions taken by the Committee at any meeting
shall be by vote of a majority of those present at any such meeting and entitled
to vote. Resolutions may be adopted or other action taken without a meeting upon
written consent thereto signed by all of the members of the Committee.
9.5 COMMITTEE RECORDS. The Committee shall maintain full and complete
records of its deliberations and decisions. The minutes of its proceedings shall
be conclusive proof of the facts of the operation of the Plan.
9.6 ESTABLISHMENT OF RULES. Subject to the limitations of the Plan,
the Committee may from time to time establish rules or by-laws for the
administration of the Plan and the transaction of its business.
9.7 CONFLICTS OF INTEREST. No individual member of the Committee shall
have any right to vote or decide upon any matter relating solely to himself or
to any of his rights or benefits under the Plan (except that such member may
sign unanimous written consent to resolutions adopted or other action taken
without a meeting), except relating to the terms of his Participant Deferral
Agreement.
22
9.8 CORRECTION OF ERRORS. The Committee may correct errors and, so far
as practicable, may adjust any benefit or credit or payment accordingly. The
Committee may in its discretion waive any notice requirements in the Plan;
provided, that a waiver of notice in one or more cases shall not be deemed to
constitute a waiver of notice in any other case. With respect to any power or
authority which the Committee has discretion to exercise under the Plan, such
discretion shall be exercised in a nondiscriminatory manner.
9.9 AUTHORITY TO INTERPRET PLAN. Subject to the claims procedure set
forth in Section 16 the Plan Administrator and the Committee shall have the duty
and discretionary authority to interpret and construe the provisions of the Plan
and to decide any dispute which may arise regarding the rights of Participants
hereunder, including the discretionary authority to construe the Plan and to
make determinations as to eligibility and benefits under the Plan.
Determinations by the Plan Administrator and the Committee shall apply uniformly
to all persons similarly situated and shall be binding and conclusive upon all
interested persons.
9.10 THIRD PARTY ADVISORS. The Committee may engage an attorney,
accountant, actuary or any other technical advisor on matters regarding the
operation of the Plan and to perform such other duties as shall be required in
connection therewith, and may employ such clerical and related personnel as the
Committee shall deem requisite or desirable in carrying out the provisions of
the Plan. The Committee shall from time to time, but no less frequently than
annually, review the financial condition of the Plan and determine the financial
and liquidity needs of the Plan. The Committee shall communicate such needs to
the Employer so that its policies may be appropriately coordinated to meet such
needs.
9.11 COMPENSATION OF MEMBERS. No fee or compensation shall be paid to
any member of the Committee for his Service as such.
23
9.12 EXPENSE REIMBURSEMENT. The Committee shall be entitled to
reimbursement by the Employer for its reasonable expenses properly and actually
incurred in the performance of its duties in the administration of the Plan.
9.13 INDEMNIFICATION. No member of the Committee shall be personally
liable by reason of any contract or other instrument executed by him or on his
behalf as a member of the Committee nor for any mistake of judgment made in good
faith, and the Employer shall indemnify and hold harmless, directly from its own
assets (including the proceeds of any insurance policy the premiums for which
are paid from the Employer's own assets), each member of the Committee and each
other officer, employee, or director of the Employer to whom any duty or power
relating to the administration or interpretation of the Plan may be delegated or
allocated, against any unreimbursed or uninsured cost or expense (including any
sum paid in settlement of a claim with the prior written approval of the Board)
arising out of any act or omission to act in connection with the Plan unless
arising out of such person's own fraud, bad faith, willful misconduct or gross
negligence.
SECTION 10. CONTRACTUAL LIABILITY; TRUST:
10.1 CONTRACTUAL LIABILITY. The obligation of the Employer to make
payments hereunder shall constitute a contractual liability of the Employer to
the Participant. Such payments shall be made from the general funds of the
Employer, and the Employer shall not be required to establish or maintain any
special or separate fund, or otherwise to segregate assets to assure that such
payments shall be made, and the Participant shall not have any interest in any
particular assets of the Employer by reason of its obligations hereunder. To the
extent that any person acquires a right to receive payment from the Employer,
such right shall be no greater than the right of an unsecured creditor of the
Employer.
24
10.2 TRUST. If so designated in the Adoption Agreement, the Employer
may establish a Trust with the Trustee, pursuant to such terms and conditions as
are set forth in the Trust Agreement. The Trust, if and when established, is
intended to be treated as a grantor trust for purposes of the Code and all
assets of the Trust shall be held in the United States. The establishment of the
Trust is not intended to cause Participants to realize current income on amounts
contributed thereto, and the Trust shall be so interpreted and administered.
SECTION 11. ALLOCATION OF RESPONSIBILITIES:
The persons responsible for the Plan and the duties and
responsibilities allocated to each are as follows:
11.1 BOARD.
(i) To amend the Plan;
(ii) To appoint and remove members of the Committee; and
(iii) To terminate the Plan as permitted in Section 14.
11.2 COMMITTEE.
(i) To designate Participants;
(ii) To interpret the provisions of the Plan and to determine the
rights of the Participants under the Plan, except to the extent
otherwise provided in Section 16 relating to claims procedure;
(iii) To administer the Plan in accordance with its terms, except
to the extent powers to administer the Plan are specifically delegated
to another person or persons as provided in the Plan;
(iv) To account for the amount credited to the Deferred
Compensation Account of a Participant; and
(v) To direct the Employer in the payment of benefits.
11.3 PLAN ADMINISTRATOR.
(i) To file such reports as may be required with the United
States Department of Labor, the Internal Revenue Service and any other
government agency to which reports may be required to be submitted
from time to time; and
25
(ii) To administer the claims procedure to the extent provided in
Section 16.
SECTION 12. BENEFITS NOT ASSIGNABLE; FACILITY OF PAYMENTS:
12.1 BENEFITS NOT ASSIGNABLE. No portion of any benefit credited or
paid under the Plan with respect to any Participant shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any attempt so to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge the same shall be void, nor shall
any portion of such benefit be in any manner payable to any assignee, receiver
or any one trustee, or be liable for his debts, contracts, liabilities,
engagements or torts. Notwithstanding the foregoing, in the event that all or
any portion of the benefit of a Participant is transferred to the former spouse
of the Participant incident to a divorce, the Committee shall maintain such
amount for the benefit of the former spouse until distributed in the manner
required by an order of any court having jurisdiction over the divorce, and the
former spouse shall be entitled to the same rights as the Participant with
respect to such benefit.
12.2 PLAN-APPROVED DOMESTIC RELATIONS ORDERS. The Plan Administrator
shall establish written procedures for determining whether an order directed to
the Plan is a Plan-Approved Domestic Relations Order.
12.2.1 Review by Plan Administrator: The Plan Administrator shall make
a determination on each final court order directed to the Plan as to
whether the order is a Plan-Approved Domestic Relations Order. The Plan
Administrator may delay the commencement of its consideration of any order
until the later of the date that is 30 days after the date of the order or
the date that the Plan Administrator is satisfied that all rehearing and
appeal rights with respect to the order have expired.
12.2.2 Payment to Alternate Payee: If the Plan Administrator
determines that an order is a Plan-approved Domestic Relations Order, the
Plan Administrator shall cause the payment of amounts pursuant to or
segregate a separate account as provided by (and to prevent any payment or
act which might be inconsistent with) the Plan-Approved Domestic Relations
Order.
26
12.2.3 Expenses: The Employer and the Plan Administrator shall not be
obligated to incur any cost to defend against or set aside any judgment,
decree, or order relating to the division, attachment, garnishment, or
execution of or levy upon the Participant's account or any distribution,
including (but not limited to) any domestic relations proceeding.
Notwithstanding the foregoing, if any such person is joined in any
proceeding, the party may take such action as it considers necessary or
appropriate to protect any and all of its legal rights, and the Participant
(or Beneficiary) shall reimburse all actual fees of lawyers and legal
assistants and expenses reasonably incurred by such party.
12.3 PAYMENTS TO MINORS AND OTHERS. If any individual entitled to
receive a payment under the Plan shall be physically, mentally or legally
incapable of receiving or acknowledging receipt of such payment, the Committee,
upon the receipt of satisfactory evidence of his incapacity and satisfactory
evidence that another person or institution is maintaining him and that no
guardian or committee has been appointed for him, may cause any payment
otherwise payable to him to be made to such person or institution so maintaining
him. Payment to such person or institution shall be in full satisfaction of all
claims by or through the Participant to the extent of the amount thereof.
SECTION 13. BENEFICIARY:
The Participant's beneficiary shall be the person or persons
designated by the Participant on the beneficiary designation form provided by
and filed with the Committee or its designee. If the Participant does not
designate a beneficiary, the beneficiary shall be his Surviving Spouse. If the
Participant does not designate a beneficiary and has no Surviving Spouse, the
beneficiary shall be the Participant's estate. The designation of a beneficiary
may be changed or revoked only by filing a new beneficiary designation form with
the Committee or its designee. If a beneficiary (the "primary beneficiary") is
receiving or is entitled to receive payments under the Plan and dies before
receiving all of the payments due him, the balance to which he is entitled shall
be paid to the contingent beneficiary, if any, named in the Participant's
current beneficiary designation form. If there is no contingent beneficiary, the
balance shall be
27
paid to the estate of the primary beneficiary. Any beneficiary may disclaim all
or any part of any benefit to which such beneficiary shall be entitled hereunder
by filing a written disclaimer with the Committee before payment of such benefit
is to be made. Such a disclaimer shall be made in a form satisfactory to the
Committee and shall be irrevocable when filed. Any benefit disclaimed shall be
payable from the Plan in the same manner as if the beneficiary who filed the
disclaimer had predeceased the Participant.
SECTION 14. AMENDMENT AND TERMINATION OF PLAN:
The Employer may amend any provision of the Plan or terminate the Plan
at any time; provided, that in no event shall such amendment or termination
reduce the balance in any Participant's Deferred Compensation Account as of the
date of such amendment or termination, nor shall any such amendment affect the
terms of the Plan relating to the payment of such Deferred Compensation Account.
Notwithstanding the foregoing, the following special provisions shall apply:
14.1 TERMINATION IN THE DISCRETION OF THE EMPLOYER. Except as
otherwise provided in Sections 14.2 or 14.3, the Employer in its discretion may
terminate the Plan and distribute benefits to Participants subject to the
following requirements:
14.1.1 All arrangements sponsored by the Employer that would be
aggregated with the Plan under Section 1.409A-1(c) of the Treasury
Regulations are terminated.
14.1.2 No payments other than payments that would be payable under the
terms of the Plan if the termination had not occurred are made within 12
months of the termination date.
14.1.3 All benefits under the Plan are paid within 24 months of the
termination date.
14.1.4 The Employer does not adopt a new arrangement that would be
aggregated with the Plan under Section 1.409A-1(c) of the Treasury
Regulations providing for the deferral of compensation at any time within
five years following the date of termination of the Plan.
28
14.2 TERMINATION UPON CHANGE IN CONTROL. If the Employer terminates
the Plan within thirty days preceding or twelve months following a Change in
Control, the Deferred Compensation Account of each Participant shall become
fully vested and payable to the Participant in a lump sum within twelve months
following the date of termination.
14.3 TERMINATION ON OR BEFORE DECEMBER 31, 2005. The Employer may
terminate the Plan on or before December 31, 2005, and distribute the vested
balance in the Deferred Compensation Account to each Participant so long as all
amounts deferred under the Plan are included in the income of the Participant in
the taxable year in which the termination occurs.
14.4 NO FINANCIAL TRIGGERS. The Employer may not terminate the Plan
and make distributions to a Participant due solely to a change in the financial
health of the Employer. This provision shall apply to amounts earned and vested
before, on or after December 31, 2004.
SECTION 15. COMMUNICATION TO PARTICIPANTS:
The Employer shall make a copy of the Plan available for inspection by
Participants and their beneficiaries during reasonable hours at the principal
office of the Employer.
SECTION 16. CLAIMS PROCEDURE:
The following claims procedure shall apply with respect to the Plan:
16.1 FILING OF A CLAIM FOR BENEFITS. If a Participant or beneficiary
(the "claimant") believes that he is entitled to benefits under the Plan which
are not being paid to him or which are not being accrued for his benefit, he
shall file a written claim therefore with the Plan Administrator. In the event
the Plan Administrator shall be the claimant, all actions which are required to
be taken by the Plan Administrator pursuant to this Section 16 shall be taken
instead by another member of the Committee designated by the Committee.
29
16.2 NOTIFICATION TO CLAIMANT OF DECISION. Within 90 days after
receipt of a claim by the Plan Administrator (or within 180 days if special
circumstances require an extension of time), the Plan Administrator shall notify
the claimant of the decision with regard to the claim. In the event of such
special circumstances requiring an extension of time, there shall be furnished
to the claimant prior to expiration of the initial 90-day period written notice
of the extension, which notice shall set forth the special circumstances and the
date by which the decision shall be furnished. If such claim shall be wholly or
partially denied, notice thereof shall be in writing and worded in a manner
calculated to be understood by the claimant, and shall set forth: (i) the
specific reason or reasons for the denial; (ii) specific reference to pertinent
provisions of the Plan on which the denial is based; (iii) a description of any
additional material or information necessary for the claimant to perfect the
claim and an explanation of why such material or information is necessary; and
(iv) an explanation of the procedure for review of the denial and the time
limits applicable to such procedures, including a statement of the claimant's
right to bring a civil action under ERISA following an adverse benefit
determination on review. Notwithstanding the forgoing, if the claim relates to a
Participant who is Disabled, the Plan Administrator shall notify the claimant of
the decision within 45 days (which may be extended for an additional 30 days if
required by special circumstances).
16.3 PROCEDURE FOR REVIEW. Within 60 days following receipt by the
claimant of notice denying his claim, in whole or in part, or, if such notice
shall not be given, within 60 days following the latest date on which such
notice could have been timely given, the claimant shall appeal denial of the
claim by filing a written application for review with the Committee. Following
such request for review, the Committee shall fully and fairly review the
decision denying the claim. Prior to the decision of the Committee, the claimant
shall be given an opportunity to review pertinent documents and to submit issues
and comments in writing.
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16.4 DECISION ON REVIEW. The decision on review of a claim denied in
whole or in part by the Plan Administrator shall be made in the following
manner:
16.4.1 Within 60 days following receipt by the Committee of the
request for review (or within 120 days if special circumstances require an
extension of time), the Committee shall notify the claimant in writing of
its decision with regard to the claim. In the event of such special
circumstances requiring an extension of time, written notice of the
extension shall be furnished to the claimant prior to the commencement of
the extension. Notwithstanding the forgoing, if the claim relates to a
Participant who is Disabled, the Committee shall notify the claimant of the
decision within 45 days (which may be extended for an additional 45 days if
required by special circumstances).
16.4.2 With respect to a claim that is denied in whole or in part, the
decision on review shall set forth specific reasons for the decision, shall
be written in a manner calculated to be understood by the claimant, and
shall cite specific references to the pertinent Plan provisions on which
the decision is based.
16.4.3 The decision of the Committee shall be final and conclusive.
16.5 ACTION BY AUTHORIZED REPRESENTATIVE OF CLAIMANT. All actions set
forth in this Section 16 to be taken by the claimant may likewise be taken by a
representative of the claimant duly authorized by him to act in his behalf on
such matters. The Plan Administrator and the Committee may require such evidence
as either may reasonably deem necessary or advisable of the authority to act of
any such representative.
SECTION 17. MISCELLANEOUS PROVISIONS:
17.1 SET OFF. Notwithstanding any other provision of this Plan, the
Employer may reduce the amount of any payment otherwise payable to or on behalf
of a Participant hereunder (net of any required withholdings) by the amount of
any loan, cash advance, extension of credit or other obligation of the
Participant to the Employer that is then due and payable, and the Participant
shall be deemed to have consented to such reduction.
17.2 NOTICES. Each Participant who is not in Service and each
Beneficiary shall be responsible for furnishing the Committee or its designee
with his current address for the
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mailing of notices and benefit payments. Any notice required or permitted to be
given to such Participant or Beneficiary shall be deemed given if directed to
such address and mailed by regular United States mail, first class, postage
prepaid. If any check mailed to such address is returned as undeliverable to the
addressee, mailing of checks will be suspended until the Participant or
beneficiary furnishes the proper address. This provision shall not be construed
as requiring the mailing of any notice or notification otherwise permitted to be
given by posting or by other publication.
17.3 LOST DISTRIBUTEES. A benefit shall be deemed forfeited if the
Plan Administrator is unable to locate the Participant or Beneficiary to whom
payment is due on or before the fifth anniversary of the date payment is to be
made or commence; provided, that the deemed investment rate of return pursuant
to Section 8.2 shall cease to be applied to the Participant's account following
the first anniversary of such date; provided further, however, that such benefit
shall be reinstated if a valid claim is made by or on behalf of the Participant
or Beneficiary for all or part of the forfeited benefit.
17.4 RELIANCE ON DATA. The Employer, the Committee and the Plan
Administrator shall have the right to rely on any data provided by the
Participant or by any Beneficiary. Representations of such data shall be binding
upon any party seeking to claim a benefit through a Participant, and the
Employer, the Committee and the Plan Administrator shall have no obligation to
inquire into the accuracy of any representation made at any time by a
Participant or beneficiary.
17.5 RECEIPT AND RELEASE FOR PAYMENTS. Subject to the provisions of
Section 17.1, any payment made from the Plan to or with respect to any
Participant or Beneficiary, or pursuant to a disclaimer by a Beneficiary, shall,
to the extent thereof, be in full satisfaction of all claims hereunder against
the Plan and the Employer with respect to the Plan.
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The recipient of any payment from the Plan may be required by the Committee, as
a condition precedent to such payment, to execute a receipt and release with
respect thereto in such form as shall be acceptable to the Committee.
17.6 HEADINGS. The headings and subheadings of the Plan have been
inserted for convenience of reference and are to be ignored in any construction
of the provisions hereof.
17.7 CONTINUATION OF EMPLOYMENT. The establishment of the Plan shall
not be construed as conferring any legal or other rights upon any Employee or
any persons for continuation of employment, nor shall it interfere with the
right of the Employer to discharge any Employee or to deal with him without
regard to the effect thereof under the Plan.
17.8 MERGER OR CONSOLIDATION; ASSUMPTION OF PLAN. No Employer shall
consolidate or merge into or with another corporation or entity, or transfer all
or substantially all of its assets to another corporation, partnership, trust or
other entity (a "Successor Entity") unless such Successor Entity shall assume
the rights, obligations and liabilities of the Employer under the Plan and upon
such assumption, the Successor Entity shall become obligated to perform the
terms and conditions of the Plan. Nothing herein shall prohibit the assumption
of the obligations and liabilities of the Employer under the Plan by any
Successor Entity.
17.9 CONSTRUCTION. The Employer shall designate in the Adoption
Agreement the state according to whose laws the provisions of the Plan shall be
construed and enforced, except to the extent that such laws are superseded by
ERISA and the applicable requirements of the Code.
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