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EXHIBIT 10.4
DELL COMPUTER CORPORATION
DEFERRED COMPENSATION PLAN
AMENDED AND RESTATED
EFFECTIVE AS OF JANUARY 1, 2001
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Table of Contents
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Article I. Definitions and Construction................................1
1.1 Definitions..........................................................1
(1) Account(s)..................................................1
(2) Affiliate...................................................1
(3) Base Salary.................................................1
(4) Base Salary Deferrals.......................................2
(5) Bonus.......................................................2
(6) Bonus Deferrals.............................................2
(7) Bonus Year..................................................2
(8) Change of Control...........................................2
(9) Code........................................................3
(10) Committee...................................................3
(11) Company.....................................................3
(12) Company Credits.............................................3
(13) Company Credits Account.....................................3
(14) Compensation................................................4
(15) Compensation Deferrals......................................5
(16) Compensation Deferrals Account..............................5
(17) Directors...................................................5
(18) Disability..................................................5
(19) Effective Date..............................................5
(20) Election Date...............................................5
(21) Employee....................................................6
(22) Employer or Participating Employer..........................6
(23) ERISA.......................................................6
(24) Investment Fund(s)..........................................6
(25) Participant.................................................6
(26) Plan........................................................6
(27) Plan Year...................................................6
(28) Retirement Date.............................................6
(29) Trust or Trust Fund.........................................6
(30) Trust Agreement.............................................6
(31) Trustee.....................................................6
(32) Unforeseeable Financial Emergency...........................6
(33) Valuation Dates.............................................7
(34) Vested Interest.............................................7
(35) Vesting Service.............................................7
1.2 Number and Gender....................................................7
1.3 Headings.............................................................7
Article II. Participation...............................................7
2.1 Participation........................................................7
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Table of Contents
(continued)
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2.2 Termination of Participation.........................................8
2.3 Reemployment of a Participant........................................8
Article III. Contributions...............................................8
3.1 Participant Compensation Deferrals...................................8
3.2 Company Credits.....................................................10
Article IV. Allocations to Participant Accounts........................11
4.1 Individual Accounts.................................................11
4.2 Investment of Accounts..............................................11
4.3 Allocation of Net Income or Loss and Changes in Value...............11
Article V. Hypothetical Investment of Accounts........................11
5.1 Hypothetical Investment of Accounts.................................11
5.2 Designation of Investment Funds.....................................12
Article VI. Vested Interest............................................12
6.1 Vesting of Compensation Deferrals Account...........................12
6.2 Vesting of Company Credits Account..................................12
6.3 Forfeitures.........................................................13
Article VII. In-Service Withdrawals and Loans...........................13
7.1 In-Service Withdrawals..............................................13
7.2 Involuntary Distributions...........................................14
7.3 No Loans............................................................14
Article VIII. Plan Benefits..............................................14
8.1 Plan Benefit........................................................14
8.2 Events Entitling Payment of Benefit.................................14
8.3 Payee and Time of Payment...........................................15
8.4 Alternative Forms of Benefit Payments...............................15
8.5 Designation of Beneficiaries........................................16
8.6 Payer of Benefits...................................................17
8.7 Unclaimed Benefits..................................................17
Article IX. Administration of Plan.....................................17
9.1 Appointment of Committee............................................17
9.2 Term, Vacancies, Resignation, and Removal...........................17
9.3 Self-Interest of Committee Members..................................17
9.4 Committee Powers and Duties.........................................18
9.5 Claims Review.......................................................18
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Table of Contents
(continued)
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9.6 Company to Supply Information.......................................19
9.7 Indemnity...........................................................19
Article X. Purpose and Unfunded Nature of the Plan....................20
10.1 Purpose of Plan.....................................................20
10.2 Unfunded Nature of Plan.............................................20
10.3 Funding of Obligation...............................................20
Article XI. Participating Entities.....................................21
11.1 Designation of Participating Entities...............................21
Article XII. Miscellaneous..............................................22
12.1 Not Contract of Employment..........................................22
12.2 Alienation of Interest Forbidden....................................22
12.3 Withholding.........................................................22
12.4 Amendment and Termination...........................................22
12.5 Severability........................................................23
12.6 Governing Laws......................................................23
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DELL COMPUTER CORPORATION
DEFERRED COMPENSATION PLAN
Dell Computer Corporation, a corporation organized and existing under
the laws of the State of Delaware (the "Company"), hereby restates the Dell
Computer Corporation Deferred Compensation Plan (the "Plan"), such restatement
to be effective as of January 1, 2001, except as otherwise provided herein;
WITNESSETH:
WHEREAS, the Company wishes to promote in certain of its highly
compensated employees, and those of its affiliates, the strongest interest in
the successful operation of the business and increased efficiency in their work,
to align the financial interests of such employees with those of Company
shareholders and to provide an opportunity for accumulation of funds for their
retirement; and
WHEREAS, the Plan was initially adopted effective May 1, 1991, and
previously has been amended and restated effective as of April 1, 1996 and
January 1, 1999; and
WHEREAS, it is intended that the Plan be "unfunded" for purposes of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and not be
construed to provide income to any participant or beneficiary under the Internal
Revenue Code of 1986, as amended (the "Code") prior to actual receipt of
benefits hereunder;
NOW THEREFORE, the Plan is hereby restated in its entirety as follows
with no interruption in time, effective as of January 1, 2001, except as
otherwise indicated herein:
ARTICLE I.
DEFINITIONS AND CONSTRUCTION
1.1 DEFINITIONS. Where the following words and phrases appear in the Plan,
they shall have the respective meanings set forth below, unless their
context clearly indicates to the contrary.
(1) ACCOUNT(S): A Participant's Compensation Deferrals Account and
Company Credits Account, if any.
(2) AFFILIATE: Each trade or business (whether or not
incorporated), which together with Dell Computer Corporation
would be deemed to be a "single employer" within the meaning
of Code Section 414(b), (c), (m), or (o).
(3) BASE SALARY: A Participant's gross base salary payable in the
ordinary course of business under the Company's payroll system
and not any periodic bonuses.
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(4) BASE SALARY DEFERRALS: Base Salary deferred by a Participant
pursuant to Section 3.1.
(5) BONUS: The Annual Incentive Compensation Bonus, if any, paid
in cash by the Company to or for the benefit of a Participant
for services rendered or labor performed while a Participant.
For purposes of this Plan, the term Bonus expressly excludes
any bonuses received under any other compensation or bonus
plan sponsored by the Company.
(6) BONUS DEFERRALS: Bonus deferred by a Participant pursuant to
Section 3.1.
(7) BONUS YEAR: The period ending on the last day of each fiscal
year; provided, however, that the Bonus Year may be changed by
the Committee to reflect the twelve month period used by the
Company under the Annual Incentive Compensation Bonus program
for each group of Eligible Employees hereunder, if any.
(8) CHANGE OF CONTROL: The earliest to occur of any of the
following:
(a) The acquisition by any person of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under
the Securities Exchange Act of 1934 ("Exchange Act"))
of 20% or more of either (i) the then outstanding
shares of stock or (ii) the combined voting power of
the then outstanding voting securities of Dell
Computer Corporation; provided, however, that for
purposes of this Paragraph (a), the following
acquisitions shall not constitute a Change of
Control: (i) any acquisition directly from Dell
Computer Corporation, (ii) any acquisition by Dell
Computer Corporation, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by Dell Computer Corporation or any
corporation controlled by Dell Computer Corporation,
(iv) any acquisition by Mr. Michael S. Dell, his
"affiliates" (as defined in Rule 12b-2 promulgated
under the Exchange Act) or "associates" (as defined
in Rule 12b-2 promulgated under the Exchange Act),
his heirs, or any trust or foundation to which he has
transferred or may transfer stock (collectively,
"Michael Dell"), or (v) any acquisition by any
corporation pursuant to a transaction which complies
with clauses (1), (2), and (3) of Paragraph (c) of
this Section 1.1(6); or
(b) Individuals who constitute the Incumbent Board (as
later defined) cease for any reason to constitute at
least a majority of the Directors; or
(c) Approval by the stockholders of Dell Computer
Corporation of a reorganization, merger, or
consolidation, or sale or other disposition of all or
substantially all of the assets of Dell Computer
Corporation, or the acquisition of assets of another
corporation (a "Business Combination"), unless
following such Business Combination (i) all or
substantially all of the persons who were the
beneficial owners, respectively, of the outstanding
stock and outstanding voting securities of Dell
Computer Corporation immediately prior to such
Business Combination beneficially own, directly
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or indirectly, immediately following such Business
Combination more than 60% of the then outstanding
shares of common stock and more than 60% of the
combined voting power of the then outstanding voting
securities entitled to vote generally in the election
of directors of the corporation resulting from such
Business Combination (including, without limitation,
a corporation which as a result of such transaction
owns Dell Computer Corporation or all or
substantially all of Dell Computer Corporation's
assets either directly or through one or more
subsidiaries), (ii) no person (excluding any employee
benefit plan (or related trust) of Dell Computer
Corporation, such corporation resulting from such
Business Combination, and Michael Dell) beneficially
owns, directly or indirectly, 20% or more of the then
outstanding shares of common stock of the corporation
resulting from such Business Combination or 20% or
more of the combined voting power of the then
outstanding voting securities of such corporation
except to the extent that such ownership existed
prior to the Business Combination, and (iii) at least
a majority of the members of the board of directors
of the corporation resulting from such Business
Combination were members of the Incumbent Board (as
later defined) at the time of the execution of the
initial agreement, or of the action of the Directors,
providing for such Business Combination; or
(d) Approval by the stockholders of Dell Computer
Corporation of a complete liquidation or dissolution
of Dell Computer Corporation.
For purposes of this Section, "Incumbent Board" shall mean the
individuals who, as of the Effective Date, constitute the
Directors; provided, however, that any individual becoming a
Director, subsequent to such date whose election, or
nomination for election by Dell Computer Corporation's
stockholders, was approved by a vote of at least a majority of
the Directors then comprising the Incumbent Board shall be
considered a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of Directors
or other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the Directors.
(9) CODE: The Internal Revenue Code of 1986, as amended from time
to time.
(10) COMMITTEE: The administrative committee appointed by the
Directors to administer the Plan.
(11) COMPANY: Dell Computer Corporation, a corporation organized
and existing under the laws of the State of Delaware, or its
successor or successors
(12) COMPANY CREDITS: The amount, if any, credited to a
Participant's Company Credits Account pursuant to Section 3.2.
(13) COMPANY CREDITS ACCOUNT: A hypothetical account for each
Participant to which is credited his Company Credits pursuant
to Section 3.2, and which is credited with
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(or debited for) such account's allocation of net income (or
net loss) as provided in Section 4.3.
(14) COMPENSATION: A Participant's Compensation shall include all
the items in Section 14(a) below and exclude all the items in
Section 14(b) below:
(a) All of the following items shall be included:
o The total of all wages, salaries, fees for
professional services, and other amounts
received by a Participant in cash or in kind
for services actually rendered in the course
of employment with the Employer while a
Participant and an Employee to the extent
such amounts are includable in gross income
(but determined without regard to the
exclusions from gross income under sections
931 and 933 of the Code);
o In the case of a Participant who is an
employee within the meaning of section
401(c)(1) of the Code and the Treasury
regulations thereunder, the Employee's
earned income (as described in section
401(c)(2) of the Code and the Treasury
regulations thereunder) determined without
regard to the exclusions from gross income
under sections 931 and 933 of the Code;
o Foreign earned income (as defined in section
911(b) of the Code) whether or not
excludable from gross income;
o Amounts described in sections 104(a)(3),
105(a), and 105(h) of the Code, but only to
the extent these amounts are includable in
the gross income of the Participant;
o The value of a non-qualified stock option
granted to the Participant by the Employer,
but only to the extent that the value of the
option is includable in the gross income of
the Participant for the taxable year in
which it is granted;
o The amount includable in the gross income of
the Participant upon making an election
described in section 83(b);
o Elective contributions made on a
Participant's behalf by the Employer that
are not includable in income under section
125, section 402(e)(3), section 402(h),
section 403(b), or 457 of the Code; and
o Any amounts that are not includable in the
gross income of a Participant under a salary
reduction agreement by reason of the
application of section 132(f) of the Code.
(b) All of the following items shall be excluded to the
extent they would otherwise be included:
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o Reimbursements and other expense allowances;
o Cash and noncash fringe benefits;
o Moving expenses;
o Deferred compensation under any plan or
program other than as specifically included
in Section 1.1(i)(1)(vii);
o Welfare benefits;
o Employer contributions to or payments from
this or any other deferred compensation
program, whether such program is qualified
under section 401(a) of the Code or
nonqualified;
o Amounts realized from the exercise of a
stock option that is not an incentive stock
option within the meaning of section 422 of
the Code;
o Amounts realized at the time restricted
stock or property is freely transferable or
no longer subject to a substantial risk of
forfeiture in accordance with section 83 of
the Code;
o Amounts realized from the sale, exchange,
disqualifying disposition or other
disposition of stock acquired under an
incentive stock option; and
o Any other amounts that receive special tax
benefits under the Code, such as premiums
for group life insurance (but only to the
extent such premiums are not includable in
the gross income of the Participant).
(15) COMPENSATION DEFERRALS: Base Salary Deferrals and Bonus
Deferrals.
(16) COMPENSATION DEFERRALS ACCOUNT: A hypothetical account for
each Participant to which is credited his Compensation
Deferrals pursuant to Section 3.1, and which is credited with
(or debited for) such account's allocation of net income (or
net loss) as provided in Section 4.3.
(17) DIRECTORS: The Board of Directors of Dell Computer
Corporation.
(18) DISABILITY: A physical or mental condition which, as
determined in the sole discretion of the Committee, totally
and presumably permanently prevents a Participant from
engaging in any substantial or gainful employment; provided,
however, that an individual shall be deemed to be disabled if
he is determined to be disabled under the terms of the Dell
Computer Corporation 401(k) Plan.
(19) EFFECTIVE DATE: January 1, 2001, except as otherwise provided
herein.
(20) ELECTION DATE: (i) With respect to Base Salary, January 1st of
each Plan Year, or such earlier date as may be designated by
the Committee, and (ii) with respect to
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Bonuses, two weeks prior to the last day of the Company's
third fiscal quarter, or such earlier date as may be
designated by the Committee.
(21) EMPLOYEE: Any individual on the payroll of an Employer (i)
whose wages from the Employer are subject to withholding for
purposes of Federal income taxes and for purposes of the
Federal Insurance Contributions Act, (ii) who is included
within a "select group of management or highly compensated
employees," as such term is used in ERISA Section 401(a)(1),
and (iii) who is designated by the Committee as eligible to
participate in this Plan.
(22) EMPLOYER OR PARTICIPATING EMPLOYER: The Company and any
Affiliate of the Company to the extent that (i) an Employee of
such Affiliate is a Participant hereunder and (ii) the
Affiliate has adopted the Plan in accordance with the
provisions of Article XI.
(23) ERISA: Public Law No. 93-406, the Employee Retirement Income
Security Act of 1974, as amended from time to time.
(24) INVESTMENT FUND(S): The investment fund(s) designated by the
Committee from time to time for the hypothetical investment of
a Participant's Accounts pursuant to Article V.
(25) PARTICIPANT: An Employee participating in the Plan in
accordance with the provisions of Section 2.1.
(26) PLAN: The Dell Computer Corporation Deferred Compensation
Plan, as amended from time to time.
(27) PLAN YEAR: The twelve-consecutive month period commencing
January 1 of each year.
(28) RETIREMENT DATE: The date upon which a Participant attains
sixty-five years of age.
(29) TRUST OR TRUST FUND: The fund consisting of funds, investments
and properties, if any, held pursuant to the provisions of the
Trust Agreement, together with all income, profit, and
increments thereto.
(30) TRUST AGREEMENT: The Dell Computer Corporation Deferred
Compensation Trust, entered into between the Company and the
Trustee pursuant to Section 10.3, as such agreement may be
amended from time to time.
(31) TRUSTEE: The corporation, individual or individuals appointed
by the Directors to administer the Trust Fund in accordance
with the terms of the Trust Agreement.
(32) UNFORESEEABLE FINANCIAL EMERGENCY: An unexpected need of the
Participant for cash, which (i) arises from an illness,
casualty loss, sudden financial reversal, or such other
unforeseeable occurrence that is caused by an event beyond the
control of the Participant, (ii) would result in severe
financial hardship to the Participant if his Compensation
Deferral election was not canceled pursuant to Section 3.1(c)
or if a
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withdrawal pursuant to Section 7.1 was not permitted, and
(iii) is not reasonably satisfiable from other resources of
the Participant. Cash needs arising from foreseeable events,
such as the purchase of a house or education expenses for
children, shall not be considered to be the result of an
Unforeseeable Financial Emergency.
(33) VALUATION DATES: Each day the New York Stock Exchange is open
for business.
(34) VESTED INTEREST: The percentage of a Participant's Accounts
that, pursuant to Article VI, is vested.
(35) VESTING SERVICE: With respect to each Participant, "Vesting
Service" as defined and credited under the Dell Computer
Corporation 401(k) Plan.
1.2 NUMBER AND GENDER. Wherever appropriate herein, words used in the
singular shall be considered to include the plural, and words used in
the plural shall be considered to include the singular. The masculine
gender, where appearing in the Plan, shall be deemed to include the
feminine gender.
1.3 HEADINGS. The headings of Articles and Sections herein are included
solely for convenience, and if there is any conflict between such
headings and the text of the Plan, the text shall control.
ARTICLE II.
PARTICIPATION
2.1 PARTICIPATION.
(a) Prior to the first day of each Plan Year, the Committee, in
its sole discretion, shall select and notify those Employees
who are newly eligible to become Participants as of such date.
Any such eligible Employee may become a Participant on such
date or on the first day of any subsequent Plan Year (with
respect to Base Salary deferrals) or as of the first day of
any Bonus Year (with respect to Bonus deferrals) by executing
and filing with the Committee, prior to the applicable
Election Date, the enrollment form prescribed by the
Committee.
(b) Notwithstanding Subsection (a) above, if an individual is
designated by the Committee as an Employee following the first
day of a Plan Year (with respect to Base Salary deferrals) or
prior to the Election Date for a Bonus Year (with respect to
Bonus deferrals), such eligible Employee may elect to become a
Participant as follows:
(1) with respect to Base Salary deferrals, by filing an
election with the Committee during the thirty
(30)-day period commencing on the date of such
selection or prior to the Election Date for any
subsequent Plan Year; and
(2) with respect to Bonus deferrals, by filing an
election with the Committee during the thirty
(30)-day period commencing on the date of such
selection or prior to the Election Date for any
subsequent Bonus Year, provided,
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however, that an individual designated as an Employee
after the first day of the fourth fiscal quarter of
the Company shall not be permitted to file an
election for such Bonus Year.
(c) Once an individual has been designated as an Employee and
commences Plan participation, he shall remain a Participant
eligible to participate in the Plan each Plan Year or Bonus
Year until his participation is terminated in accordance with
Section 2.2 or the Committee terminates his designation as an
Employee under this Plan.
2.2 TERMINATION OF PARTICIPATION. Notwithstanding any provision herein to
the contrary, an individual who has become or is entitled to become a
Participant of the Plan shall cease to be or be entitled to be a
Participant effective as of the earliest to occur of (1) the date the
Participant is no longer employed by the Company or (2) any earlier
date designated by the Committee and communicated to the affected
individual prior to the effective date of such action.
2.3 REEMPLOYMENT OF A PARTICIPANT. A Participant who terminates employment
with the Company and is subsequently rehired by the Company shall not
be entitled to commence or continue participation in the Plan unless
and until he is again eligible to become a Participant in accordance
with Section 2.1. In the case of such a rehired Participant, his
recommencement of Plan participation, if any, shall be considered as
his initial commencement of participation for purposes of the Plan.
ARTICLE III.
CONTRIBUTIONS
3.1 PARTICIPANT COMPENSATION DEFERRALS. Each Participant may elect to defer
a portion of his Compensation in accordance with this Section.
Compensation not deferred by a Participant pursuant to this Section
shall, for purposes of this Plan, be received by such Participant in
cash.
(a) BASE SALARY DEFERRALS.
(1) Each Participant may elect to defer receipt of an
integral percentage of from 1% to 50% of his Base
Salary for any Plan Year under the Plan as Base
Salary deferrals. Notwithstanding the preceding, the
Committee may, by resolution, provide that the
maximum deferral limit for certain groups of
Participants shall be less than fifty percent (50%).
Such election must be made in the form and within the
time period required by the Committee.
(2) A Participant's election to defer Base Salary for any
Plan Year under the Plan must be made on or prior to
the Election Date for Base Salary deferrals.
(3) If an Employee becomes initially eligible under the
Plan following an Election Date, he may make an
election to defer Base Salary for the remaining
portion of the Plan Year by filing an election within
the thirty (30) day period following the date of his
initial eligibility.
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(4) A Participant's election to make Base Salary
deferrals shall become effective as of the Election
Date coincident with or next following the date such
Participant executes and files with the Committee the
form described in Paragraph (1) above.
Notwithstanding the foregoing, if a Participant is
selected as initially eligible under the Plan
following an Election Date, such Participant's
election to make Base Salary deferrals shall become
effective as soon as administratively feasible
following the date such election is received by the
Committee; provided, however, that such election
shall apply no earlier than the first day of the
payroll period coincident with or next such date.
(5) The reduction of a Participant's Base Salary pursuant
to this election shall be effected by Base Salary
reductions as of each payroll period within the
election period.
(6) A Participant shall be deemed to have elected the
same Base Salary deferral percentage pursuant to this
Subsection for a Plan Year that was in effect for the
immediately preceding Plan Year unless such
Participant elects a new deferral percentage for the
Plan Year in accordance with Paragraph (1) or cancels
his Base Salary deferrals for the Plan Year in
accordance with Subsection (c) below.
(b) BONUS DEFERRALS.
(1) Effective as of January 1, 2000, each Participant may
elect to defer receipt of an integral percentage of
from 1% to 100% of his Bonus for any Bonus Year under
the Plan as Bonus deferrals. Such election must be
made in the form and within the time period required
by the Committee. Notwithstanding any provision
hereof, the portion of a Participant's Bonus which is
deferred pursuant to this Subsection shall be subject
to withholding for applicable payroll taxes (i.e.,
amounts required to be withheld under Code Section
3121(v)) and such taxes shall be netted from the
portion of his Bonus deferred hereunder.
(2) A Participant's election to defer Bonus under the
Plan must be made on or prior to the Election Date
for Bonus deferrals, and such election shall be
irrevocable for such Bonus Year.
(3) If an Employee becomes initially eligible under the
Plan following an Election Date, he may make an
election to defer a designated portion of his Bonus
for the entire Bonus Year by filing an election
within the thirty (30)-day period following the date
of his initial eligibility, and such election shall
be irrevocable for such Bonus Year. Notwithstanding
the preceding, an Employee who becomes initially
eligible to participate in the Plan after the first
day of the fourth quarter of the Company's fiscal
year shall not be permitted to make a deferral
election with respect to any portion of the Bonus
received during such Bonus Year.
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(4) The reduction of a Participant's Bonus pursuant to
this election shall be effected at the time such
Bonus is paid to such Participant in one lump sum
deferral.
(5) A Participant's election to defer a Bonus during a
Bonus Year shall not apply to a Bonus paid during any
subsequent Bonus Year.
(c) CANCELLATION OF BASE SALARY DEFERRAL ELECTION.
(1) A Participant may cancel his Base Salary Deferral
election effective as of the first day of any
subsequent payroll period by executing and filing
with the Committee the form prescribed by the
Committee within the minimum time period prescribed
by the Committee. Notwithstanding the preceding, the
Committee shall have the right, in its sole
discretion, to decline to accept the termination of a
Participant's Base Salary Deferral election. An
individual described in the preceding sentence may
again elect to make Base Salary Deferrals hereunder
in accordance with Subsection (a)(1) above.
(2) Upon application by the Participant, in the event
that the Committee determines that the Participant
has suffered an Unforeseeable Financial Emergency,
all the Participant's Compensation Deferral
election(s) then in effect shall be canceled as soon
as administratively practicable after such
determination. If the Participant's Compensation
Deferral election is so canceled, the Participant may
again elect to defer a percentage of his Compensation
effective as of any subsequent Election Date that is
at least twelve (12) months after the effective date
of such cancellation by complying with the procedural
requirements set forth in Subsection (a)(1) or
(b)(1), as applicable.
(d) ONGOING ELECTION. A Participant's election to make Base Salary
Deferrals shall remain in force and effect while he is a
Participant unless and until such deferrals cease in
accordance with the provisions of Subsection (c) above or such
Participant terminates participation in the Plan pursuant to
Section 2.2.
(e) CREDITING OF DEFERRALS. Compensation Deferrals made by a
Participant shall be credited to such Participant's
Compensation Deferrals Account as of a date determined in
accordance with procedures established from time to time by
the Committee.
(f) COMMITTEE LIMITATION ON COMPENSATION DEFERRALS.
Notwithstanding the preceding, the Committee may, in its sole
discretion, limit (i.e., reduce or terminate) the Compensation
Deferral election or Bonus Deferral election for any
Participant or group of Participants.
3.2 COMPANY CREDITS. As of any date or dates selected by the Company, the
Company may credit a Participant's Company Credits Account with an
amount, if any, as the Company in its sole discretion shall determine.
Such credits may be made on behalf of some Participants but not others,
and such credits may vary in amount among individual Participants.
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ARTICLE IV.
ALLOCATIONS TO PARTICIPANT ACCOUNTS
4.1 INDIVIDUAL ACCOUNTS. The Committee shall create and maintain adequate
records to disclose the interest hereunder of each Participant, former
Participant and Beneficiary. Such records shall be in the form of
individual accounts and credits and debits shall be made to such
accounts in the manner herein described.
4.2 INVESTMENT OF ACCOUNTS. The Committee shall allocate earnings and
losses to each Participant's Accounts according to the hypothetical
investments made by a Participant pursuant to the terms of Article V.
4.3 ALLOCATION OF NET INCOME OR LOSS AND CHANGES IN VALUE.
(a) As of each Valuation Date, the Committee shall determine the
fair market value and the net income (or net loss) of each
Investment Fund for the period elapsed since the next
preceding Valuation Date. The net income (or net loss) of each
Investment Fund since the next preceding Valuation Date shall
be ascertained by the Committee in such manner as it deems
appropriate, which may include expenses, if any, of
administering the Investment Fund, the Trust, and the Plan.
(b) For purposes of allocations of net income (or net loss), each
Participant's Accounts shall be divided into subaccounts to
reflect the hypothetical investment of such Participant's
Accounts in a particular Investment Fund or Investment Funds
pursuant to Article V. As of each Valuation Date, the net
income (or net loss) of each Investment Fund, separately and
respectively, shall be allocated among the corresponding
subaccounts of the Participants who had such corresponding
subaccounts invested in such Investment Fund since the next
preceding Valuation Date, and each such corresponding
subaccount shall be credited with (or debited for) that
portion of such net income (or net loss) that the value of
each such corresponding subaccount on such next preceding
Valuation Date was of the value of all such corresponding
subaccounts on such date; provided, however, that the value of
such subaccounts as of the next preceding Valuation Date shall
be reduced by the amount of any distributions made therefrom
since the next preceding Valuation Date.
(c) So long as there is any balance in any Account, such Account
shall continue to receive allocations pursuant to this
Section.
ARTICLE V.
HYPOTHETICAL INVESTMENT OF ACCOUNTS
5.1 HYPOTHETICAL INVESTMENT OF ACCOUNTS. The Committee shall from time to
time select, add, and/or delete Investment Funds for purposes of the
hypothetical investment of Participants' Accounts. For purposes of
allocating earnings and losses and valuation of each Participant's
Accounts, each Participant's Accounts shall be deemed to be invested in
the Investment Funds. The Committee shall designate which Investment
Fund or Funds the Participant's Accounts shall be deemed to be
invested. The preceding notwithstanding, the Committee may, in its
discretion, permit one or more Participants, or any group of
Participants, to direct
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the hypothetical investment of all or any portion of their Accounts in
accordance with Section 5.2.
5.2 DESIGNATION OF INVESTMENT FUNDS.
(a) Each Participant shall designate, in accordance with the
procedures established from time to time by the Committee, the
manner in which the amounts credited to his Accounts over
which he has been given investment discretion by the Committee
shall be deemed to be invested from among the Investment
Funds. Such Participant may designate one of such Investment
Funds for the hypothetical investment of all the amounts
credited to such Accounts, or he may split the hypothetical
investment of the amounts credited to such Accounts between
such Investment Funds in such increments as the Committee may
prescribe. If a Participant fails to make a proper
designation, then his Accounts shall be deemed to be invested
in the Investment Fund or Investment Funds designated by the
Committee from time to time.
(b) A Participant may change his hypothetical investment
designation for future amounts to be credited to the portion
of his Accounts over which he has been given investment
discretion by the Committee. Any such change shall be made in
accordance with the procedures established by the Committee,
and the frequency of such changes may be limited by the
Committee.
(c) If the Committee elects to establish a hypothetical investment
fund that holds shares of the Company's common stock, a
Participant may elect to invest his Accounts in such fund. The
Committee may in its sole discretion refuse to recognize
Participant elections that it determines may cause the
Participant's Accounts to become subject to the short-swing
profit provisions of Section 16b of the Securities Exchange
Act of 1934 and establish special election procedures for
Participants subject to Section 16 of such Act.
(d) A Participant's hypothetical investment selections pursuant to
the immediately preceding paragraph shall be made solely for
purposes of crediting earnings and/or losses to his Accounts
under Section 4.3 of this Plan. The Committee shall not, in
any way, be bound to actually invest any amounts set aside
pursuant to Article X below to satisfy its obligations under
this Plan in accordance with such selections.
ARTICLE VI.
VESTED INTEREST
6.1 VESTING OF COMPENSATION DEFERRALS ACCOUNT. A Participant shall have a
100% Vested Interest in his Compensation Deferrals Account at all
times.
6.2 VESTING OF COMPANY CREDITS ACCOUNT.
(a) A Participant shall acquire a Vested Interest in his Company
Credits Account as such Participant completes years of Vesting
Service in accordance with the following schedule:
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YEARS OF VESTING SERVICE VESTED INTEREST
------------------------ ---------------
Less than 1 year 0%
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years or more 100%
(b) Notwithstanding Subsection (a) above, a Participant shall have
a 100% Vested Interest in his Company Credits Account upon the
earliest to occur of (i) the attainment of such Participant's
Retirement Date while employed by the Company, (ii) the death
of such Participant while employed by the Company, (iii) the
date such Participant becomes Disabled, or (iv) any earlier
date designated by the Committee in its sole discretion.
6.3 FORFEITURES. A Participant who terminates employment with the Company
and its Affiliates with a Vested Interest in his Company Credits
Account that is less than 100% shall forfeit to the Company the
nonvested portion of such Account as of the date of such termination.
ARTICLE VII.
IN-SERVICE WITHDRAWALS AND LOANS
7.1 IN-SERVICE WITHDRAWALS.
(a) Except as provided in Subsections (b) through (d) below, no
in-service withdrawals shall be permitted under the Plan, and
Participants shall not be permitted to make withdrawals from
the Plan prior to a termination of employment with the Company
and its Affiliates.
(b) In the event that the Committee, upon written petition of the
Participant, determines in its sole discretion that the
Participant has suffered an Unforeseeable Financial Emergency,
the Participant shall be entitled to withdrawal from his
Compensation Deferrals Account an amount not to exceed the
lesser of (i) the amount determined by the Committee as
necessary to meet the Participant's needs created by the
Unforeseeable Financial Emergency or (ii) the Vested Interest
in the Participant's Accounts. Such benefit shall be paid in a
single lump sum payment as soon as administratively
practicable after the Committee has made its determination
with respect to the availability and amount of such
withdrawal. If the Participant's Accounts are deemed to be
invested in more than one Investment Fund, such withdrawal
shall be made pro rata from each Investment Fund in which such
Accounts are deemed to be invested. This Subsection shall not
be applicable to the Participant following his termination of
employment with the Company and its Affiliates, and in the
event of such termination the amounts credited to the
Participant's Accounts shall be payable to him only in
accordance with Article VIII.
(c) A Participant may at any time make an irrevocable election,
effective as of the first day of the next Plan Year, to have
all or a portion of the Vested Interest in his Accounts,
determined as of the date his election is made, paid to him on
a fixed date
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specified in such election, which shall be at least two (2)
years following the date that such election is submitted to
the Committee in writing. The amount of the payment pursuant
to this irrevocable election shall be stated in the election
and shall be a fixed dollar amount, and shall not be adjusted
for earnings or losses following such election date. Once an
in-service distribution election has been filed with the
Committee, it may be extended to provide that the distribution
shall be made on a date which is subsequent to the original
distribution date; provided, however, that a Participant may
not elect to extend his distribution date during the two (2)
year period immediately preceding the designated distribution
date. A Participant may have only one election hereunder
outstanding at any time. Notwithstanding the preceding, if the
Participant terminates employment prior to the designated
payment date, his election shall be terminated and his
Accounts shall be distributed as provided in Section 8.4
below.
(d) In the event that the Committee, upon written petition of the
Participant, determines in its sole discretion that the
Participant has a Disability, the Participant shall be
entitled to a distribution in accordance with Article VIII.
7.2 INVOLUNTARY DISTRIBUTIONS. Notwithstanding anything contained in the
Plan to the contrary, if at any time any Participant is finally
determined by the Internal Revenue Service or the U.S. Department of
Labor not to qualify as a member of a select group of "management or
highly compensated employees" as such term is used in ERISA Section
401(a)(1), the Committee may, in its sole discretion, immediately
distribute in one lump sum to such Participant his vested account under
the Plan. A final determination of the Internal Revenue Service or the
U.S. Department of Labor shall be a decision rendered by the Internal
Revenue Service or the U.S. Department of Labor which is no longer
subject to administrative appeal within such agency. In addition, the
Committee may, in its exclusive and sole discretion, cause the Plan to
make a distribution to a Participant during a Plan Year in order to
cause the Participant to have sufficient taxable compensation to
satisfy the annual addition requirements of Code Section 415 with
respect to any qualified retirement plans maintained by the Company
during such Plan Year.
7.3 NO LOANS. Participants shall not, at any time, be permitted to borrow
from the Plan or Trust Fund.
ARTICLE VIII.
PLAN BENEFITS
8.1 PLAN BENEFIT. A Participant's Plan benefit shall be the value of his
Accounts determined as of the Valuation Date immediately preceding the
time of payment of such Accounts in accordance with Section 8.3.
8.2 EVENTS ENTITLING PAYMENT OF BENEFIT. A Participant's benefit shall
become payable upon the earliest to occur of the following events:
(a) A termination of the Participant's employment with the Company
and its Affiliates for any reason;
(b) The death of the Participant;
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(c) A determination by the Committee that the Participant has a
Disability; or
(d) A Change of Control.
A Participant's benefit shall equal the Participant's Vested Interest
in his Accounts as of the Valuation Date next preceding the date the
payment of such benefit is to be paid or commence pursuant to Section
8.3.
8.3 PAYEE AND TIME OF PAYMENT. Payment of a Participant's benefit shall be
paid or commence as soon as administratively practicable following the
Section 8.2 event triggering payment. The Participant's benefit shall
be paid to the Participant, unless the Section 8.2 triggering event is
the death of the Participant, in which case the Participant's benefit
shall be paid to the Participant's designated beneficiary as provided
in Section 8.5.
8.4 ALTERNATIVE FORMS OF BENEFIT PAYMENTS.
(a) A Participant's benefit under the Plan shall be paid in cash
in one of the following forms:
(1) A single lump sum payment; or
(2) Monthly, quarterly or annual installment payments for
a term certain not to exceed ten years payable to
such Participant or, in the event of such
Participant's death prior to the end of such term
certain, to his designated beneficiary as provided in
Section 8.5.
(b) A Participant must elect one of the forms of payment listed in
Subsection 8.4(a) above on or before the date he first becomes
a Participant of the Plan pursuant to Article II. Except as
provided in Subsection 8.4(c) below, such election shall be
irrevocable by the Participant and shall remain in effect for
all periods of a Participant's participation in the Plan. In
the event a Participant fails to elect timely the form in
which his benefit payments are to be made, such benefit
payments shall be deemed to have been elected by such
Participant to be in the form of a single lump sum payment.
(c) A Participant may shall be entitled to change his elected form
of benefit payment under Subsection 8.4(a) above with respect
to all amounts allocated to his Accounts (i.e., both existing
and future allocations) as of each January 1st. Such change
shall be made prior to each such January 1st and shall be
effective as of the subsequent January 1st. If a triggering
event described in Section 8.2 occurs during the Plan Year
following the Committee's receipt of an election to change
distribution forms, such election shall be deemed to be null
and void and the immediately preceding election shall apply to
the Participant's distribution. A Participant who does not
elect to change his current elected (or deemed elected) form
of benefit payment with respect to future allocations to such
Participant's Accounts as of any such January 1 shall not be
entitled to change his elected form of benefit until the
subsequent January 1st. If a Participant elected to receive
his benefit payment in one or more different forms of payment
prior to January 1, 2000, such Participant shall receive his
distribution pursuant to the most recent form of distribution
elected by the
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Participant; provided, however, if no such election is on file
with the Committee, his distribution shall be made in the form
elected of a single lump sum payment, unless such Participant
elects to file a new election under Subsection (a) above.
(d) If a Participant dies prior to the date the payment of his
benefit begins or is completed, such benefit shall be paid to
such Participant's beneficiary designated in accordance with
Section 8.5 in a single lump payment, notwithstanding any
other form of payment elected by such Participant.
(e) The preceding Subsections notwithstanding, if the Section 8.2
event triggering payment of a Participant's benefit is a
Change of Control, such benefit shall be paid to such
Participant in a single lump sum cash payment as soon as
administratively practicable after such Change of Control.
(f) Notwithstanding any provision of the Plan to the contrary, the
Committee may, in its sole and absolute discretion, distribute
a Participant's benefit in the form of a single lump sum
payment notwithstanding any other form of distribution elected
by the Participant.
8.5 DESIGNATION OF BENEFICIARIES.
(a) Each Participant shall have the right to designate the
beneficiary or beneficiaries to receive payment of his benefit
in the event of his death. Each such designation shall be made
by executing the beneficiary designation form prescribed by
the Committee and filing such form with the Committee during
the life of such Participant. Any such beneficiary designation
may be changed at any time by execution and filing of a new
designation in accordance with this Subsection. The preceding
notwithstanding, (i) if a Participant has designated his
spouse as his beneficiary, such designation shall be void and
of no effect upon the divorce of the Participant and such
spouse, unless the Participant notifies the Committee to the
contrary in writing after the date of such divorce, and (ii)
if a Participant who is married on the date of his death has
designated an individual or entity other than his surviving
spouse as his beneficiary, such designation shall not be valid
unless (a) such surviving spouse has consented thereto in
writing, and such consent (1) acknowledges the effect of such
specific designation, (2) either consents to the specific
designated beneficiary (which designation may not subsequently
be changed by the Participant without spousal consent) or
expressly permits such designation by the Participant without
the requirement of further consent by such spouse, and (3) is
witnessed by a Plan representative (other than the
Participant) or a notary public or (b) the consent of such
spouse cannot be obtained because such spouse cannot be
located or because of other circumstances that the Committee
in its discretion determines warrants a waiver of such
consent. Any such consent by such surviving spouse shall be
irrevocable.
(b) If at the time of the death of the Participant no designated
beneficiary is on file with the Committee, or such beneficiary
designation is not valid or effective for any reason as
determined by the Committee, then the designated beneficiary
or beneficiaries to receive such benefit shall be as follows:
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(1) If a Participant has a surviving spouse at the time
of such Participant's death, his designated
beneficiary shall be such surviving spouse;
(2) If a Participant has no surviving spouse at the time
of such Participant's death, his designated
beneficiary shall be such Participant's executor or
administrator or, if there is no administration of
such Participant's estate, his heirs at law.
8.6 PAYER OF BENEFITS. To the extent the Trust Fund has sufficient assets,
the Trustee shall pay benefits to Participants or their beneficiaries,
except to the extent the Company pays the benefits directly. To the
extent the Trustee does not or cannot pay benefits out of the Trust
Fund, the benefits shall be paid by the Company. Any benefit payments
made to a Participant or for his benefit pursuant to any provision of
the Plan shall be debited to such Participant's Accounts. All benefit
payments shall be made in cash.
8.7 UNCLAIMED BENEFITS. In the case of a benefit payable to or on behalf of
a Participant, if the Committee after a reasonable search is unable to
locate the Participant or beneficiary to whom such benefit is payable,
upon the Committee's determination thereof, such benefit shall be
forfeited to the Company. The Committee shall adopt procedures
concerning the process that will be followed to locate a Participant or
beneficiary under this Section. Notwithstanding the foregoing, if
subsequent to any such forfeiture the Participant or beneficiary to
whom such benefit is payable makes a valid claim for such benefit
within a reasonable (as determined by and in the discretion of the
Committee) period of time following the date such benefit became
payable, such forfeited benefit shall be payable pursuant to the Plan
provisions.
ARTICLE IX.
ADMINISTRATION OF PLAN
9.1 APPOINTMENT OF COMMITTEE. The general administration of the Plan shall
be vested in the Committee, which shall be appointed by the Directors
and shall consist of one or more persons. Any individual, whether or
not an employee of the Company, is eligible to become a member of the
Committee.
9.2 TERM, VACANCIES, RESIGNATION, AND REMOVAL. Each member of the Committee
shall serve until he resigns, dies, or is removed by the Directors. At
any time during his term of office, a member of the Committee may
resign by giving written notice to the Directors and the Committee,
such resignation to become effective upon the appointment of a
substitute member or, if earlier, the lapse of thirty days after such
notice is given as herein provided. At any time during his term of
office, and for any reason, a member of the Committee may be removed by
the Directors with or without cause, and the Directors may in their
discretion fill any vacancy that may result therefrom. Any member of
the Committee who is an employee of the Company shall automatically
cease to be a member of the Committee as of the date he ceases to be
employed by the Company and its Affiliates.
9.3 SELF-INTEREST OF COMMITTEE MEMBERS. No member of the Committee shall
have any right to vote or decide upon any matter relating solely to
himself under the Plan (including, without limitation, Committee
decisions under Article II) or to vote in any case in which his
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individual right to claim any benefit under the Plan is particularly
involved. In any case in which a Committee member is so disqualified to
act and the remaining members cannot agree, the Directors shall appoint
a temporary substitute member to exercise all the powers of the
disqualified member concerning the matter in which he is disqualified.
9.4 COMMITTEE POWERS AND DUTIES. The Committee shall administer and enforce
the Plan according to the terms and provisions hereof and shall have
all powers necessary to accomplish these purposes, including, but not
by way of limitation, the complete and absolute discretion to construe
all provisions of the Plan and make all factual determinations and the
right, power, authority, and duty:
(a) To make rules, regulations, and bylaws for the administration
of the Plan that are not inconsistent with the terms and
provisions hereof, and to enforce the terms of the Plan and
the rules and regulations promulgated thereunder by the
Committee;
(b) To construe in its sole discretion all terms, provisions,
conditions, and limitations of the Plan;
(c) To correct any defect or to supply any omission or to
reconcile any inconsistency that may appear in the Plan in
such manner and to such extent as it shall deem in its
discretion expedient to effectuate the purposes of the Plan;
(d) To employ and compensate such accountants, attorneys,
investment advisors, and other agents, employees, and
independent contractors as the Committee may deem necessary or
advisable for the proper and efficient administration of the
Plan;
(e) To determine in its sole discretion all questions relating to
eligibility;
(f) To establish or designate Investment Funds as provided in
Article V;
(g) To determine whether and when there has been a termination of
a Participant's employment with the Company and its
Affiliates, and the reason for such termination;
(h) To make a determination in its sole discretion as to the right
of any person to a benefit under the Plan and to prescribe
procedures to be followed by distributees in obtaining
benefits hereunder; and
(i) To receive and review reports from the Trustee as to the
financial condition of the Trust Fund, including its receipts
and disbursements.
9.5 CLAIMS REVIEW.
(a) In any case in which a claim for Plan benefits of a
Participant or beneficiary is denied or modified, the
Committee shall furnish written notice to the claimant within
ninety days (or within 180 days if additional information
requested by the Committee necessitates an extension of the
ninety-day period and, in which case, the claimant shall be
informed of such extension prior to the end of the initial
ninety-day period), which notice shall:
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(1) State the specific reason or reasons for the denial
or modification;
(2) Provide specific reference to pertinent Plan
provisions on which the denial or modification is
based;
(3) Provide a description of any additional material or
information necessary for the Participant, his
beneficiary, or representative to perfect the claim
and an explanation of why such material or
information is necessary; and
(4) Explain the Plan's claim review procedure as
contained herein.
(b) In the event a claim for Plan benefits is denied or modified,
if the Participant, his beneficiary, or a representative of
such Participant or beneficiary desires to have such denial or
modification reviewed, he must, within sixty days following
receipt of the notice of such denial or modification, submit a
written request for review by the Committee of its initial
decision. In connection with such request, the Participant,
his beneficiary, or the representative of such Participant or
beneficiary may review any pertinent documents upon which such
denial or modification was based and may submit issues and
comments in writing. Within sixty days following such request
for review the Committee shall, after providing a full and
fair review, render its final decision in writing to the
Participant, his beneficiary, or the representative of such
Participant or beneficiary stating specific reasons for such
decision and making specific references to pertinent Plan
provisions upon which the decision is based. If special
circumstances require an extension of such sixty-day period,
the Committee's decision shall be rendered as soon as
possible, but not later than 120 days after receipt of the
request for review. If an extension of time for review is
required, written notice of the extension shall be furnished
to the Participant, beneficiary, or the representative of such
Participant or beneficiary prior to the commencement of the
extension period.
(c) Compliance with the claims review procedures set forth in this
Section shall be a condition precedent to the filing of a
lawsuit by a Participant, his beneficiary, or any person
claiming through a participant or beneficiary in connection
with a Plan benefit, and a failure to timely exhaust the
administrative remedies set forth herein shall bar any such
proceeding in federal or state court.
9.6 COMPANY TO SUPPLY INFORMATION. The Company shall supply full and timely
information to the Committee, including, but not limited to,
information relating to each Participant's Compensation, age,
retirement, death, or other cause of termination of employment and such
other pertinent facts as the Committee may require. When making a
determination in connection with the Plan, the Committee shall be
entitled to rely upon the aforesaid information furnished by the
Company or any Affiliate.
9.7 INDEMNITY. To the extent permitted by applicable law, the Company shall
indemnify and hold harmless each member of the Committee and other
employee of the Company or an Affiliate to whom Plan administrative
functions have been delegated by the Committee against any and all
expenses and liabilities arising out of such individual's
administrative functions or fiduciary responsibilities under or
incident to the Plan, including any expenses
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and liabilities that are caused by or result from an act or omission
constituting the negligence of such individual in the performance of
such functions or responsibilities, but excluding expenses and
liabilities that are caused by or result from such individual's own
gross negligence or willful misconduct. Expenses against which such
individual shall be indemnified hereunder shall include, without
limitation, the amounts of any settlement or judgment, costs, counsel
fees, and related charges reasonably incurred in connection with a
claim asserted or a proceeding brought or settlement thereof.
ARTICLE X.
PURPOSE AND UNFUNDED NATURE OF THE PLAN
10.1 PURPOSE OF PLAN. The Company intends and desires by the adoption and
maintenance of the Plan to recognize the value to the Company of the
past and present services of employees covered by the Plan and to
encourage and ensure their continued service with the Company by making
more adequate provision for their future retirement security.
10.2 UNFUNDED NATURE OF PLAN. The Plan is intended to constitute an
unfunded, unsecured plan of deferred compensation for a select group of
management or highly compensated employees of the Company. Further, it
is the intention of the Company that the Plan be "unfunded" for
purposes of the Code and Title I of ERISA. The Plan constitutes a mere
promise by the Company to make benefit payments in the future. Plan
benefits herein provided are to be paid out of the Company's general
assets, and Participants shall have the status of general unsecured
creditors of the Company.
10.3 FUNDING OF OBLIGATION.
(a) The adoption of this Plan and any setting aside of amounts by
the Employers with which to discharge their obligations
hereunder shall not be deemed to create a trust; legal and
equitable title to any funds so set aside shall remain with
the Employers, and any recipient of benefits hereunder shall
have no security or other interest in such funds. Any and all
funds so set aside shall remain subject to the claims of the
general creditors of the Employers, present and future. This
provision shall not require the Employers to set aside any
funds, but the Employers may set aside funds if they choose to
do so.
(b) The Company, in its sole discretion, may establish the Trust
and enter into the Trust Agreement. Any such Trust, and any
assets held by such Trust, to assist the Employers in meeting
its obligations under the Plan shall be a "rabbi trust." The
Employers may transfer money or other property to the Trustee,
and the Trustee shall pay Plan benefits to Participants and
their beneficiaries out of the Trust Fund unless otherwise
paid by the Company. In such event, the Company shall remain
the owner of all assets in the Trust Fund, and the assets held
in the Trust Fund shall be subject to the claims of Company
creditors if the Company becomes "insolvent" as described in
Subsection (c) below. No Participant or beneficiary shall have
any preferred claim to, or any beneficial ownership interest
in, any assets of the Trust Fund.
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(c) The Company shall be considered "insolvent" if (i) the Company
is unable to pay its debts as they become due or (ii) the
Company is subject to a pending proceeding as a debtor under
the United Sates Bankruptcy Code (or any successor federal
statute).
(d) The chief executive officer of the Company and the Directors
shall each have the duty to inform the Trustee in writing if
the Company becomes insolvent. Such notice given under the
preceding sentence by any one party shall satisfy each party's
duty to give notice. When so informed, the Trustee shall
suspend payments to the Participants and beneficiaries and
hold the assets for the benefit of the Company's general
creditors. If the Trustee receives a written allegation that
the Company is insolvent, the Trustee shall suspend payments
to the Participants and beneficiaries and hold the Trust Fund
for the benefit of the Company's general creditors and shall
determine within the period specified in the Trust Agreement,
or, in the absence of a specified period, within a reasonable
period of time, whether the Company is insolvent. If the
Trustee determines that the Company is not insolvent, the
Trustee shall resume payments to the Participants and
beneficiaries. In the case of insolvency of the Company or any
Affiliate designated to participate in the Plan pursuant to
Section 11.1, only the assets contributed to the Trust, if
any, by the Company or such Affiliate, whichever is insolvent,
shall be subject to the claims of such insolvent entity.
(e) All expenses incident to the administration of the Plan and
Trust, including but not limited to, legal, accounting,
Trustee fees, and expenses of the Committee, may be paid by
the Company and, if not so paid, shall be paid by the Trustee
from the Trust Fund, if any.
(f) All income, profits, recoveries, contributions, forfeitures
and any and all moneys, securities, and properties of any kind
at any time received or held by the Trustee, if any, shall be
held for investment purposes as a commingled Trust Fund
pursuant to the terms of the Trust Agreement. The Committee
shall maintain Accounts in the name of each Participant, but
the maintenance of Accounts designated as Accounts of a
Participant shall not mean that such Participant shall have a
greater or lesser interest than that due him under the terms
of the Plan and shall not be considered as segregating any
funds or property from any other funds or property contained
in the commingled fund.
ARTICLE XI.
PARTICIPATING ENTITIES
11.1 DESIGNATION OF PARTICIPATING ENTITIES.
(a) The Committee may designate any Employer as eligible to
participate in the Plan by written instrument delivered to the
Company and the designated entity. Such written instrument
shall specify the effective date of such designated
participation, may incorporate specific provisions relating to
the operation of the Plan that apply to the designated entity
only, and shall become, as to such designated entity and its
employees, a part of the Plan. Each designated Employer shall
be conclusively presumed to have consented to its designation
and to have agreed to be bound by the
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terms of the Plan and any and all amendments thereto upon its
submission of information to the Committee required by the
terms of or with respect to the Plan; provided, however, that
the terms of the Plan may be amended so as to increase the
obligations of an entity only with the consent of such entity,
which consent shall be conclusively presumed to have been
given by such entity upon its submission, after receipt of
notice of any such amendment, of any information to the
Committee required by the terms of or with respect to the
Plan.
(b) Except as modified by the Committee in the written instrument
described in Subsection (a) above, the provisions of this Plan
shall be applicable with respect to each participating entity
separately, and amounts payable hereunder for or on behalf of
a Participant shall be paid by the participating entity that
employs such Participant.
(c) Any participating entity may, by appropriate action of its
officers without the need for approval of its board of
directors or noncorporate counterpart or the Committee, the
Company, or the Directors, terminate its participation in the
Plan. Moreover, the Committee may, in its discretion,
terminate a participating entity's Plan participation at any
time by giving written notice to such participating entity and
the Company.
ARTICLE XII.
MISCELLANEOUS
12.1 NOT CONTRACT OF EMPLOYMENT. The adoption and maintenance of the Plan
shall not be deemed to be a contract between the Company and any person
or to be consideration for the employment of any person. Nothing herein
contained shall be deemed to give any person the right to be retained
in the employ of the Company or to restrict the right of the Company to
discharge any person at any time, nor shall the Plan be deemed to give
the Company the right to require any person to remain in the employ of
the Company or to restrict any person's right to terminate his
employment at any time.
12.2 ALIENATION OF INTEREST FORBIDDEN. The interest of a Participant or his
beneficiary or beneficiaries hereunder may not be sold, transferred,
assigned, or encumbered in any manner, either voluntarily or
involuntarily, and any attempt so to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge the same shall be null
and void, nor shall the benefits hereunder be liable for or subject to
the debts, contracts, liabilities, engagements, or torts of any person
to whom such benefits or funds are payable, nor shall they be an asset
in bankruptcy or subject to garnishment, attachment, or other legal or
equitable proceedings. The preceding notwithstanding, the Committee
shall comply with the terms and provisions of a "qualified domestic
relations order" as defined in ERISA Section 206(d).
12.3 WITHHOLDING. All Compensation Deferrals, Company Credits, and benefit
payments provided for hereunder shall be subject to applicable
withholding and other deductions as shall be required of the Company
under any applicable local, state, or federal law as such laws are
interpreted by the Company.
12.4 AMENDMENT AND TERMINATION. The Directors have the absolute and
unconditional right to amend the Plan at any time and may from time to
time, in their discretion, amend, in whole or in part, any or all of
the provisions of the Plan; provided, however, that any
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amendments to the Plan that do not have a significant cost impact on
the Company, whether or not retroactive, may be made by the Committee;
and provided, further, that no amendment may be made that would reduce
a Participant's Vested Interest in the amounts credited to his Accounts
as of the date of adoption of such amendment. The Directors have the
absolute and unconditional right to terminate the Plan at any time on
behalf of the Company and each participating entity. In the event that
the Plan is terminated, notwithstanding any other form of benefit
elected by the Participant, the balance of each Participant's Accounts
shall be paid to such Participant or his designated beneficiary in the
manner selected by the Committee in its discretion (notwithstanding any
other form of benefit elected by such Participant), which may include
the payment of a single lump sum cash payment, in full satisfaction of
all of such Participant's or beneficiary's benefits hereunder.
12.5 SEVERABILITY. If any provision of the Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect
the remaining provisions hereof; instead, each provision shall be fully
severable, and the Plan shall be construed and enforced as if said
illegal or invalid provision had never been included herein.
12.6 GOVERNING LAWS. All provisions of the Plan shall be construed in
accordance with the laws of the State of Texas except to the extent
preempted by federal law.