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EXHIBIT 10.4
DELL COMPUTER CORPORATION
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
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DELL COMPUTER CORPORATION
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
TABLE OF CONTENTS
Page
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Section 1 - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2 - ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3 - CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4 - WITHDRAWALS . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 5 - CREDITING OF CONTRIBUTIONS AND INCOME . . . . . . . . . . . . 4
Section 6 - DEATH BENEFITS . . . . . . . . . . . . . . . . . . . . . . . 5
Section 7 - BENEFITS UPON TERMINATION OF SERVICE . . . . . . . . . . . . 5
Section 8 - DISTRIBUTION OF BENEFITS . . . . . . . . . . . . . . . . . . 6
Section 9 - ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . . . 6
Section 10 - CLAIM REVIEW PROCEDURE . . . . . . . . . . . . . . . . . . . 7
Section 11 - LIMITATION OF RIGHTS . . . . . . . . . . . . . . . . . . . . 9
Section 12 - LIMITATION OF ASSIGNMENT, PAYMENTS TO LEGALLY
INCOMPETENT DISTRIBUTEE AND UNCLAIMED PAYMENTS . . . . . . . 9
Section 13 - AMENDMENT TO OR TERMINATION OF THE PLAN AND TRUST . . . . . 9
Section 14 - STATUS OF MEMBER AS UNSECURED CREDITOR . . . . . . . . . . . 10
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DELL COMPUTER CORPORATION
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
PREAMBLE
WHEREAS, DELL COMPUTER CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Corporation") wishes to
adopt this deferred compensation plan (the "Plan") for the benefit of its
non-employee directors, in recognition of their services rendered to the
Corporation;
WHEREAS, the Board of Directors of the Corporation has approved the
Plan as embodied herein;
NOW, THEREFORE, in consideration of the premises and to carry out the
purposes and intent as set forth above, the Corporation does hereby adopt the
Plan for the benefit of those members of its Board of Directors who are not
employed by the Corporation, effective as of May 20, 1994.
The terms and conditions of this Plan are as follows:
Section 1
DEFINITIONS
1.1 "Account" means the account maintained by the Plan
Administrator to reflect the interest of a Member under the Plan, consisting of
amounts deferred by a Member pursuant to Section 3.1 hereof, as adjusted to
reflect income, gains, losses and other credits or charges attributable
thereto.
1.2 "Annual Compensation" means the annual retainer payable by the
Corporation to a Member in August of each year.
1.3 "Beneficiary" means only the person or trust that a Member,
in his most recent written designation filed with the Plan Administrator, shall
have designated to receive his benefit under the Plan in the event of his
death; provided that, if the Member has failed to make a designation or if no
person designated shall be alive or if no trust shall have been established by
the Member, and no successor Beneficiary shall have been designated and be
alive, any death benefit payable hereunder on behalf of such Member shall be
paid to the legal representative of such deceased Member's estate. Changes in
designations of Beneficiaries may be made upon written notice to the Plan
Administrator in any form as the Plan Administrator may prescribe and the Plan
Administrator shall immediately notify the Trustee, in writing, of any
designation or change in designation.
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1.4 "Board of Directors" means the Board of Directors of the
Corporation.
1.5 "Code" means the Internal Revenue Code of 1986, as heretofore
and hereafter amended.
1.6 "Deferral Amount" means a contribution by a Member pursuant to
Section 3.1 of this Plan.
1.7 "Effective Date" means May 20, 1994.
1.8 "Member" means any non-employee director of the Corporation
who has become a Member in the Plan for as long as his benefit under the Plan
has not been fully distributed pursuant to the provisions of the Plan.
1.9 "Normal Retirement Age" means age 65.
1.10 "Plan Administrator" means the compensation committee of the
Board of Directors.
1.11 "Plan Year" means the calendar year.
1.12 "Retirement" means termination of a Member's service with the
Corporation on or after attaining Normal Retirement Age.
1.13 "Retirement Date" means the first day of the month subsequent
to a Member's Normal Retirement Age on which he actually terminates service
with the Corporation.
1.14 "Trust" means that certain trust agreement established
pursuant to the Plan between the Corporation and the Trustee or any trust
agreement hereafter established, the provisions of which are incorporated
herein by reference.
1.15 "Trustee" means the Trustee under the Trust.
1.16 "Trust Fund" means all assets of whatsoever kind or nature
held from time to time by the Trustee pursuant to the Trust and forming a part
of this Plan, without distinction as to income and principal and without regard
to source, i.e., contributions or earnings.
1.17 "Valuation Date" means each day of the Plan Year.
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Section 2
ELIGIBILITY
Participation in the Plan shall be made available to all non-employee
directors of the Corporation, and such individuals may elect to participate
hereunder by executing a participation agreement in such form and at such time
as the Plan Administrator shall require, provided that each participation
agreement shall be executed no later than the last day of June immediately
preceding payment of the Annual Compensation for any year in which an
individual elects to make contributions to the Plan in accordance with the
provisions of Section 3 hereof.
Section 3
CONTRIBUTIONS
3.1 For any Plan Year, a Member may elect to defer a portion of
the Annual Compensation otherwise payable to him. Any such deferrals shall be
in whole percentages or a specific dollar amount of the Member's Annual
Compensation, as specified in the Member's participation agreement.
Contributions of amounts deferred shall be made by the Corporation directly to
the Trust.
3.2 A Member may change the amount or percentage of
contributions under Section 3.1 once during each calendar year by written
notice to the Plan Administrator, on a form prescribed by the Plan
Administrator, which change shall be effective beginning with the Member's
first full payroll period beginning in the calendar month immediately following
the Plan Administrator's receipt of such written notice.
Section 4
WITHDRAWALS
4.1 In the event of severe financial hardship, a Member may make
a written request to the Plan Administrator for a hardship withdrawal from his
Account. For purposes of this Section, the term "severe financial hardship"
shall mean any extraordinary or unforeseeable need for funds arising from an
emergency beyond the Member's control such as a sudden and unexpected illness
or accident of the Member or any dependent of the Member (as defined in Section
152 of the Code), loss of the Member's property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Member. The need to send a Member's child to
college or the desire to purchase a home shall not be considered a severe
financial hardship. A withdrawal on account of severe financial
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hardship shall not be permitted to the extent that such hardship is or may be
relieved through reimbursement or compensation by insurance or otherwise, by
liquidation of the Member's assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship), or by cessation of
deferrals under this Plan. The amount of a hardship withdrawal may not exceed
the amount required to meet the Member's financial hardship. Any determination
of the existence of financial hardship and the amount to be withdrawn on
account thereof shall be made by the Plan Administrator. However,
notwithstanding the foregoing, an individual who is a member of the
compensation committee of the Board of Directors shall not vote or decide upon
any matter relating to the determination of the existence of his own financial
hardship or the amount to be withdrawn by him on account thereof. Furthermore,
notwithstanding the foregoing, no hardship withdrawal shall be made which is
less than $500.00, unless the distribution is of the entire value of the
Member's Account.
4.2 Withdrawals and other distributions shall be charged pro
rata to the individual investment funds in which the Account of the Member is
invested, pursuant to his designation under Section 5.3 hereof.
Section 5
CREDITING OF CONTRIBUTIONS AND INCOME
5.1 All Deferral Amounts shall be transmitted to the Trustee by
the Corporation as soon as reasonably practicable and shall be credited to the
Account of the Member immediately upon receipt. All payments from an Account
between Valuation Dates shall be charged against the Account as of the
preceding Valuation Date.
5.2 Except as otherwise provided in the Plan and Trust, as of
each Valuation Date, the Trustee shall credit to each Member's Account the
income, gains, losses, and other credits or charges attributable thereto.
5.3 Each Member, upon becoming a Member of the Plan, may, on a
form prescribed by the Plan Administrator, designate the manner in which his
Account is to be invested, among the funds designated by the Plan Administrator
for that purpose. Such designation may be changed as of any Valuation Date,
with respect to future contributions and transfers among investment funds, by
filing an election with the Plan Administrator, on a form prescribed by the
Plan Administrator, within the time period prior to such Valuation Date
established by the Plan Administrator. The Member must designate, in such
minimum percentages or amounts as may be prescribed by the Plan Administrator,
that portion of his Account which the Member wishes to invest in the various
investment funds. The designation will continue until changed by the timely
submission of a new form, which change will be effective as of the next
succeeding Valuation Date. The Plan Administrator shall, prior to each
applicable Valuation Date, forward
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the designation form to the Trustee, who shall invest each Member's Account in
accordance with such designation. In the absence of any such designation, the
Trustee shall invest and reinvest a Member's Account in such property as the
Trustee, in its sole and absolute discretion, shall determine, pursuant to the
provisions of the Trust. In no event may a Member designate the investment of
his Account in stock or other securities of the Corporation.
Section 6
DEATH BENEFITS
6.1 Upon the death of a Member prior to the termination of his
service with the Corporation, the Beneficiary of such Member shall be entitled
to the entire value of his Account.
6.2 Upon the death of a Member who, at the time of his death,
had terminated his service with the Corporation, the Beneficiary of such Member
shall be entitled to the entire value of his Account.
6.3 If subsequent to the death of a Member, the Member's
Beneficiary dies while entitled to receive benefits under this Plan, the
successor Beneficiary of the Member, if any, shall be entitled to receive
benefits of the Member under this Plan. However, if no successor Beneficiary
shall have been designated and shall be alive, the benefits shall be paid to
the legal representative of the deceased Beneficiary's estate to be paid
according to the deceased Beneficiary's will, or if the deceased Beneficiary
has no will, by the laws of intestacy of the state in which the deceased
Beneficiary resided at the date of the deceased Beneficiary's death.
6.4 Any benefit payable under this Section 6 shall be paid in
accordance with Section 8 hereof, after receipt by the Trustee from the Plan
Administrator of notice of the death of the Member.
Section 7
BENEFITS UPON TERMINATION OF SERVICE
7.1 In the event of the termination of service of a Member for
reasons other than death, the Member shall be entitled to the entire value of
his Account.
7.2 Any benefit payable under this Section 7 shall be paid in
accordance with Section 8 hereof.
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Section 8
DISTRIBUTION OF BENEFITS
8.1 Payment of a terminated Member's benefit shall be made from
the Trust in an amount equal to the entire value of his Account, which shall be
determined as of the monthly Valuation Date designated by the Plan
Administrator for the purpose of valuing distributions coinciding with or next
following the Member's termination of service. Payment shall be made either in
a lump sum in cash, or in cash payments in annual, quarterly or monthly
installments over a period certain not exceeding ten (10) years, such method of
payment to be elected by the Member on his participation agreement. If
installment payments are made, the unpaid balance shall be segregated from the
remainder of the Trust, and shall, as of each Valuation Date, be credited with
the actual net income, gain or loss attributable to such segregated account, as
determined under the Plan and Trust during that period for which the
installments are paid. Payment shall commence or be made as soon as
practicable after the Member's date of termination of service, but in no event
later than one year following that date.
Section 9
ADMINISTRATION OF THE PLAN
9.1 The Corporation shall enter into a trust agreement with the
Trustee, which Trust shall form a part of this Plan and is hereby incorporated
herein by reference. The Trust shall constitute an unfunded arrangement and
shall not affect the status of the Plan as an unfunded plan for tax purposes
and for purposes of Title I of the Employee Retirement Income Security Act of
1974, as and if applicable.
9.2 The Plan Administrator shall perform any act which the Plan
authorizes expressed by a vote at a meeting or in a writing signed by a
majority without a meeting. The Plan Administrator may, by a writing signed by
a majority, designate any person constituting the Plan Administrator as the
person entitled to give notices on behalf of the Plan Administrator, and the
Trustee is entitled to rely upon any such writing until amended or superseded
by a subsequent similar writing. Any person constituting the Plan
Administrator shall not vote or decide upon any matter relating solely to
himself or vote in any case in which his individual right or claim to any
benefit under the Plan is particularly involved. If, in any matter or case in
which a person is so disqualified to act, the remaining persons constituting
the Plan Administrator cannot resolve such matter or case, the Board of
Directors will appoint a temporary substitute to exercise all the powers of the
disqualified person concerning the matter or case in which he is disqualified.
9.3 (a) The Plan Administrator may designate in writing
other persons to carry out its responsibilities under the Plan. The Plan
Administrator may remove any person designated
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to carry out its responsibilities under the Plan by notice in writing to that
person.
(b) The Plan Administrator may employ persons to render
advice with regard to any of its responsibilities. Charges for all services
rendered shall be directly paid by the Corporation but until paid shall
constitute a charge against the Trust.
(c) The Corporation shall indemnify and hold harmless
each person constituting the Plan Administrator from and against any and all
claims and expenses (including, without limitation, attorney's fees and related
costs), in connection with the performance by the person of his duties in that
capacity, other than any of the foregoing arising in connection with the
willful neglect or willful misconduct of the person so acting.
9.4 (a) The Plan Administrator shall advise the Trustee with
respect to all payments under the terms of the Plan and shall direct the
Trustee in writing to make payments from the Trust.
(b) The Plan Administrator shall establish rules, not
contrary to the provisions of the Plan and the Trust, for the administration of
the Plan and the transaction of its business. The Plan Administrator shall
interpret the Plan in its sole and absolute discretion, and shall determine all
questions arising in the administration, interpretation and application of the
Plan. All determinations of the Plan Administrator shall be conclusive and
binding on all employees, Members and Beneficiaries, subject to the provisions
of this Plan, the Trust and applicable law.
9.5 Any action to be taken by the Corporation shall be taken by
resolution adopted by the Board of Directors or an executive committee thereof;
provided, however, that by resolution, the Board of Directors or an executive
committee thereof may delegate to any officer of the Corporation the authority
to take any actions hereunder, other than the power to amend or terminate the
Plan or the Trust or to determine the basis of contributions.
Section 10
CLAIM REVIEW PROCEDURE
10.1 In the event that a Member or Beneficiary is denied a claim
for benefits under this Plan (the "claimant"), the Plan Administrator shall
provide to the claimant written notice of the denial which shall set forth:
(a) the specific reason or reasons for the denial;
(b) specific references to pertinent Plan provisions on
which the Plan Administrator based its denial;
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(c) a description of any additional material or
information needed for the claimant to perfect the claim and an
explanation of why the material or information is needed;
(d) a statement that the claimant may:
(i) Request a review upon written application
to the Plan Administrator;
(ii) Review pertinent Plan documents; and
(iii) Submit issues and comments in writing; and
(e) That any appeal the claimant wishes to make of the
adverse determination must be in writing to the Plan Administrator
within sixty (60) days after receipt of the Plan Administrator's notice
of denial of benefits. The Plan Administrator's notice must further
advise the claimant that his failure to appeal the action to the Plan
Administrator in writing within the sixty (60) day period will render
the Plan Administrator's determination final, binding, and conclusive.
10.2 (a) If the claimant should appeal to the Plan
Administrator, he, or his duly authorized representative, may submit, in
writing, whatever issues and comments he, or his duly authorized
representative, feels are pertinent. The Plan Administrator shall re-examine
all facts related to the appeal and make a final determination as to whether
the denial of benefits is justified under the circumstances. The Plan
Administrator shall advise the claimant in writing of its decision on his
appeal, the specific reasons for the decision, and the specific Plan provisions
on which the decision is based. The notice of the decision shall be given
within sixty (60) days of the claimant's written request for review, unless
special circumstances (such as a hearing) would make the rendering of a
decision within the sixty (60) day period infeasible, but in no event shall the
Plan Administrator render a decision regarding the denial of a claim for
benefits later than 120 days after its receipt of a request for review. If an
extension of time for review is required because of special circumstances,
written notice of the extension shall be furnished to the claimant prior to the
date the extension period commences.
(b) If, upon appeal, the Plan Administrator shall grant
the relief requested by the claimant, then, in addition, the Plan Administrator
shall award to the claimant reasonable fees and expenses of counsel, or any
other duly authorized representative of claimant, which shall be payable from
the Trust Fund.
10.3 The Plan Administrator's notice of denial of benefits shall
identify the address to which the claimant may forward his appeal.
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Section 11
LIMITATION OF RIGHTS
Neither this Plan, the Trust nor membership in the Plan shall give any
person any right except to the extent that the right is specifically fixed
under the terms of the Plan. The establishment of the Plan shall not be
construed to give any individual a right to be continued in the service of the
Corporation or as interfering with the right of the Corporation to terminate
the service of any individual at any time.
Section 12
LIMITATION OF ASSIGNMENT, PAYMENTS TO LEGALLY
INCOMPETENT DISTRIBUTEE AND UNCLAIMED PAYMENTS
12.1 No benefit which shall be payable under the Plan to any
person shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or
otherwise dispose of the same shall be void. No benefit shall in any manner be
subject to the debts, contracts, liabilities, engagements or torts of any
person, nor shall it be subject to attachment or legal process for or against
any person, except to the extent as may be required by law.
12.2 Whenever any benefit which shall be payable under the Plan
is to be paid to or for the benefit of any person who is then a minor or
determined by the Plan Administrator to be incompetent by qualified medical
advice, the Plan Administrator need not require the appointment of a guardian
or custodian, but shall be authorized to cause the same to be paid over to the
person having custody of the minor or incompetent, or to cause the same to be
paid to the minor or incompetent without the intervention of a guardian or
custodian, or to cause the same to be paid to a legal guardian or custodian of
the minor or incompetent if one has been appointed or to cause the same to be
used for the benefit of the minor or incompetent.
Section 13
AMENDMENT TO OR TERMINATION OF THE PLAN AND TRUST
Except as otherwise expressly provided in the Trust, the Corporation
reserves the right at any time to amend or terminate the Plan or Trust in whole
or in part; provided, however, that the duties or liabilities of the Trustee
shall not be increased without its written consent. No amendments shall have
the effect of retroactively changing or depriving Members or
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Beneficiaries of rights already accrued under the Plan. In the event that the
Corporation shall change its name, the Plan shall be deemed to be amended to
reflect the name change without further action of the Corporation, and the
language of the Plan shall be changed accordingly.
Section 14
STATUS OF MEMBER AS UNSECURED CREDITOR
All benefits under the Plan shall be the unsecured obligation of the
Corporation and, except for those assets which will be placed in the Trust
established in connection with this Plan, no assets will be placed in trust or
otherwise segregated from the general assets of the Corporation for the
payment of obligations hereunder. To the extent that any person acquires a
right to receive payments hereunder, such right shall be no greater than the
right of any unsecured general creditor of the Corporation.
IN WITNESS WHEREOF, Dell Computer Corporation, the Corporation, has
caused its corporate seal to be affixed hereto and these presents to be duly
executed in its name and behalf by its proper officers thereunto duly
authorized this 20th day of May, 1994.
CORPORATION:
DELL COMPUTER CORPORATION
By:/s/ M.S. Dell
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ATTEST:
/s/ Roger Bailey
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(Title)
Asst. Secretary
(CORPORATE SEAL)
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