1
Exhibit 10(e)(v)
CABOT CORPORATION
Deferred Compensation Plan
Master Plan Document
==============================================================================
2
CABOT CORPORATION
Deferred Compensation Plan
Master Plan Document
===============================================================================
TABLE OF CONTENTS
-----------------
1. In General........................................................ 1
----------
2. Defined Terms..................................................... 1
-------------
3. Deferral Election................................................. 3
-----------------
(a) In general............................................... 3
----------
(b) First year of participation.............................. 3
---------------------------
(c) Limits................................................... 3
------
(d) Form of election; irrevocability......................... 3
--------------------------------
4. Accounts; Credits................................................. 4
-----------------
(a) Deferral credits......................................... 4
----------------
(b) Notional earnings........................................ 4
-----------------
(c) FICA/Medicare taxes, etc. ............................... 4
------------------------
5. Payment of Deferred Amounts....................................... 5
---------------------------
(a) Form and timing of distributions; in general............. 5
--------------------------------------------
(b) Distributions upon death................................. 6
------------------------
(c) Hardship................................................. 6
--------
(d) Other Withdrawals........................................ 7
-----------------
(e) Computation of installment payments, etc................. 7
----------------------------------------
(f) Section 162(m)........................................... 7
--------------
(g) Taxes.................................................... 7
-----
6. Assignment........................................................ 7
----------
- -------------------------------------------------------------------------------
i
3
CABOT CORPORATION
Deferred Compensation Plan
Master Plan Document
===============================================================================
7. Plan To Be Unfunded, etc. ........................................ 8
------------------------
8. No Contract of Employment......................................... 8
-------------------------
9. Amendment and Termination......................................... 8
-------------------------
10. Administration of the Plan........................................ 9
--------------------------
- -------------------------------------------------------------------------------
ii
4
CABOT CORPORATION
Deferred Compensation Plan
Master Plan Document
===============================================================================
CABOT CORPORATION
-----------------
DEFERRED COMPENSATION PLAN
--------------------------
1. IN GENERAL. Cabot Corporation (the "Company") has established this
Deferred Compensation Plan (the "Plan") to further its business interests by
providing eligible employees an opportunity to defer some or all of their
compensation on an unfunded, nonqualified basis as hereinafter provided. The
Plan shall be effective January 1, 1995.
2. DEFINED TERMS. As used in the Plan, the following terms have the
meanings associated with them below:
- "Account": A memorandum account maintained by the
Administrator to reflect the Employer's unfunded deferred
compensation obligation to a Participant hereunder, including
where the context requires any sub-account.
- "Administrator": The Benefits Committee of the Company,
whose members are appointed by the Board and serve at the Board's
pleasure, or such other committee, person or persons as the Board
may designate. The term "Administrator" shall also include
delegates of any of the foregoing.
- "Board": The Board of Directors of the Company.
- "Code": The federal Internal Revenue Code, as amended.
- "Consultant": An individual performing consulting
services for an Employer (other than as an employee) who is
designated by the Administrator as eligible to participate in the
Plan, provided that such designation has not been revoked by the
Administrator.
- "CRISP": The Cabot Retirement Incentive Savings Plan
as from time to time amended and in effect.
- -------------------------------------------------------------------------------
1
5
CABOT CORPORATION
Deferred Compensation Plan
Master Plan Document
===============================================================================
- "Earnings Measure": An interest rate, stock index, bond
index, mutual fund or other objective external measure of
investment performance specified by the Administrator for
purposes of measuring and crediting notional earnings under
Section 4(b) below.
- "Eligible Employee": An individual employed by an
Employer who is (i) determined by the Administrator to qualify as
a "highly compensated or management" employee for purposes of
Sections 201(a)(2), 301(a)(3) and 401(a)(1) of ERISA, and (ii)
designated by the Administrator as eligible to participate in the
Plan, provided that such designation has not been revoked by the
Administrator.
- "Eligible Pay": Except as otherwise determined by the
Administrator, Eligible Pay shall include (i) in the case of an
Eligible Employee: base salary, amounts payable under the
Company's short-term incentive program, and sales incentive
bonuses; and (ii) in the case of a Consultant: the consulting
fees payable by the Employer. The Administrator in its
discretion may include other categories of remuneration in, or
exclude categories of remuneration from, the definition of
"Eligible Pay," either in general or in particular cases.
- "Employer": The Company and its Subsidiaries, or any of
them. Except as otherwise specified by the Administrator,
however, participation in the Plan shall be limited to Eligible
Employees employed by, or Consultants providing services to, the
Company or one of the Subsidiaries listed in Appendix A hereto.
- "ERISA": The Employee Retirement Income Security Act of
1974, as amended.
- "Moody's Rate": The rate described in Section 5(e) below.
- "Participant": A Consultant or an Eligible Employee who
participates in the Plan.
- "Subsidiary": A corporation in which the Company holds,
directly or indirectly, stock possessing 50% of the total voting
power, and any other corporation or unincorporated trade or
business that the Board designates as a Subsidiary for purposes
of the Plan.
- -------------------------------------------------------------------------------
2
6
CABOT CORPORATION
Deferred Compensation Plan
Master Plan Document
===============================================================================
3. Deferral Election
(a) IN GENERAL. Each Eligible Employee and Consultant may elect to
defer hereunder a specified portion or percentage of his or her Eligible
Pay to be earned in any calendar year. Except as the Administrator may
otherwise determine, Eligible Pay is earned in a year if (i) in the case
of base salary or Consultant's fees paid on a periodic basis, it would
normally be paid in that year; or (ii) in the case of other Eligible
Pay, it is neither vested nor determinable at the beginning of the year
but becomes determinable at some point during the year. Each such
deferral election shall be made by the Participant's delivery to the
Administrator of a deferral election form on or before the date
specified by the Administrator, but in any case (except as provided in
(b) below) prior to the first day of the calendar year to which the
deferral election relates.
(b) FIRST YEAR OF PARTICIPATION. Notwithstanding (a) above, an
individual who first becomes eligible to participate in the Plan during
the course of a calendar year may elect to defer a specified portion or
percentage of his or her Eligible Pay for the remainder of the year by
delivering to the Administrator a deferral election form within 30 days
of being notified of eligibility, such election to take effect as of the
first day of the month next following receipt by the Administrator of
such form or forms (the "initial effective date"). An election under
this paragraph shall be effective only as to Eligible Pay earned in the
period commencing on the initial effective date and ending on the last
day of the year, as determined by the Administrator under principles
similar to those set forth in (a)(i) and (a)(ii) above.
(c) LIMITS. Except as otherwise determined by the Administrator, the
maximum amount of Eligible Pay that an Eligible Employee may elect to
defer for any year shall be 50% of his or her base salary plus 100% of
any other Eligible Pay. An Eligible Employee who elects to defer any
Eligible Pay for a year must defer at least $2,000. The $2,000 minimum
shall apply on a prorated basis with respect to a partial year election
under (b) above. A Consultant may defer any portion or all of his or
her consulting fees for any year.
(d) FORM OF ELECTION; IRREVOCABILITY. Each deferral election shall be
made in writing on a form prescribed by the Administrator. The
Administrator may condition the effectiveness of any election upon the
delivery by the Participant of such other form or forms as the
Administrator may prescribe. A deferral election applicable to Eligible
Pay to be earned in a particular calendar year shall be irrevocable once
that year has begun (or, in the case of an initial year of participation
described in (b) above, once the 30-day election period has expired).
- -------------------------------------------------------------------------------
3
7
CABOT CORPORATION
Deferred Compensation Plan
Master Plan Document
===============================================================================
4. ACCOUNTS; CREDITS. For each Participant, the Administrator shall
maintain one or more Accounts reflecting deferrals and notional earnings as
hereinafter provided.
(a) DEFERRAL CREDITS. Each amount deferred by a Participant under
Section 3 above shall be credited to the Participant's Account in the
year the amount would have been paid absent the deferral. In addition,
there shall be credited to the Account of each Participant who is an
Eligible Employee: (i) for the year to which the Participant's deferral
election relates, an amount equal to 10% of any base salary elected to
be deferred by the Participant from that year; provided, that
Participants who also participate in the Company's supplemental plans
(or any of them) shall not be eligible for the additional credit
described in this clause; and (ii) subject to Treas. Regs. Section
1.401(k)-1(e)(6), if the Participant is a participant in CRISP, an
additional credit equal to the amount, if any, of matching contributions
that would have been made for the benefit of such Participant under
CRISP but for a reduction thereunder attributable to the limitations of
Sections 401(k) and 401(m) of the Code, provided that the Participant
has elected to participate in CRISP to the maximum extent permitted by
Section 401(k) of the Code. Notional earnings under (b) below shall be
calculated as though all amounts deferred under the preceding two
sentences for a calendar year had been credited to the Participant's
Account as of the first day of such year (or as of the date
participation in the Plan commences, in the case of a Participant's
first year of participation described in Section 3(b) above).
(b) NOTIONAL EARNINGS. Not less frequently than annually, the
Administrator shall adjust each Participant's Account to reflect
notional earnings. Notional earnings shall be based on such Earnings
Measures as the Administrator shall specify. The Administrator may, but
need not, permit Participants to (i) select the Earnings Measures that
will apply to their Accounts from among those specified by the
Administrator, and (ii) change such Measures prospectively at any time.
The Administrator shall have the absolute discretion at any time to
alter or amend the Earnings Measures used in valuing and adjusting
Accounts; provided, that the Administrator may not, without the written
consent of the affected Participant, alter any Earnings Measure
retroactively to the extent that the effect of such alteration would be
to reduce the balance of the Participant's Account below what it was
immediately prior to such alteration. Nothing herein shall be construed
as obligating the Administrator or any Employer to set aside assets or
establish a trust or other fund for purposes of the Plan.
(c) FICA/MEDICARE TAXES, ETC. To the extent any amount deferred or
credited hereunder to the Account of a Participant is treated as "wages"
for FICA/Medicare or FUTA tax purposes on a current basis rather than
when distributed, all as determined by
- -------------------------------------------------------------------------------
4
8
CABOT CORPORATION
Deferred Compensation Plan
Master Plan Document
===============================================================================
the Administrator, then the Administrator shall require that the
Participant either (i) timely pay such taxes in cash by separate check
to the Employer, or (ii) make other arrangements satisfactory to the
Employer (e.g., additional withholding from other wage payments) for the
payment of such taxes. To the extent a Participant fails to pay or
provide for such taxes as required, the Administrator may suspend the
Participant's participation in the Plan or reduce amounts credited or to
be credited hereunder.
5. PAYMENT OF DEFERRED AMOUNTS. The Participant's Employer shall make
distributions of Account balances as provided in this Section. All
distributions shall be in cash.
(a) FORM AND TIMING OF DISTRIBUTIONS; IN GENERAL. Amounts credited to
a Participant's Account for any year under Section 4(a) above (the
"deferral year"), adjusted for notional earnings under Section 4(b)
above, shall be paid as the Participant elects either
(i) upon the expiration of a fixed period of years, but in no event
earlier than the third anniversary of the beginning of the deferral
year (a "fixed-period election"), or
(ii) upon termination of the Participant's employment or consulting
relationship with the Employer.
A fixed-period election shall not be effective for any deferral year
unless made prior to the beginning of the deferral year or within 30
days of being notified of eligibility to participate, in the case of an
initial year of participation described in Section 3(b) above, and once
made shall be irrevocable. Amounts distributable pursuant to a
fixed-period election shall be paid in a lump sum. If the Participant's
employment or consulting relationship with the Employer terminates prior
to the payment date specified in any fixed-period election, amounts that
would otherwise have been payable under (i) above pursuant to such
election shall instead be paid in a lump sum upon such termination.
A Participant shall be deemed to have elected a distribution under (ii)
above as to any portion of his or her Account for which an effective
fixed-period election has not been made. Subject to such rules as the
Administrator may prescribe, a Participant may elect to have amounts
distributable under (ii) above paid either in a lump sum or in equal
monthly installments over a period of five, ten or fifteen years (a
"form of payment election"), and may change such election at any time
prior to termination of employment or termination of the consulting
relationship. However, a Participant may have only one form of payment
election in effect at any time, and it shall control the manner in which
the entirety of the Participant's Account distributable under (ii) above
will be paid. Moreover, except for a Participant's initial form of
payment election made in connection
- -------------------------------------------------------------------------------
5
9
CABOT CORPORATION
Deferred Compensation Plan
Master Plan Document
===============================================================================
with his or her commencement of participation in the Plan, no such
election or change in election shall be effective unless made more than
three years prior to termination of the Participant's employment or
consulting relationship with the Company. In the absence of any
effective form of payment election, all amounts distributable to a
Participant under the Plan shall be paid in a lump sum. The
Adminisitrator may also in its discretion accelerate the distribution
under (ii) above, including payment of a lump sum, to a Participant who
elected an installment payout and who terminates employment prior to age
55 with less than 10 years of service with all Employers.
(b) DISTRIBUTIONS UPON DEATH. Each Participant shall designate in
writing, on such form as the Administrator shall prescribe, a
beneficiary or beneficiaries to receive any amounts remaining to be paid
hereunder at the Participant's death; but if no such beneficiary
designation is in effect at the time of the participant's death, or if
the Participant's beneficiary(ies) do(es) not survive the Participant,
the Administrator shall cause any such remaining benefits to be paid to
the executor or administrator of the Participant's estate. If death
occurs prior to the commencement or completion of installment
distributions to the Participant, the Administrator reserves the right
to distribute the remaining balance of the decedent's Account to the
designated beneficiary(ies), or to the decedent's estate where
applicable, in a lump sum or other form of payment. The spouse of a
married Participant who has not consented in writing, on such form as
the Administrator may prescribe, to a designation by the Participant of
one or more non-spouse beneficiary(ies) shall be treated as the
designated primary beneficiary for 50% of any portion of the
Participant's Account remaining undistributed at the Participant's death
(or such larger amount as the Participant shall have specified in his or
her beneficiary designation, if any, in effect at the time of the
Participant's death). If application of the preceding sentence results
in the Participant's spouse being treated as the designated primary
beneficiary for any portion of the Participant's Account which would
otherwise have been distributed to others, the Administrator shall
reduce the amount payable to the other designated beneficiary(ies), if
any, in such equitable manner as it deems appropriate under the
circumstances.
(c) HARDSHIP. If a Participant suffers an unforeseeable financial
emergency (caused by an event beyond the Participant's control) prior to
the payment in full of his or her Account, the Participant may apply in
writing for an extraordinary distribution under this paragraph. If the
Administrator in its discretion determines that an unforeseeable
financial emergency has occurred, the Participant's Employer will pay
the Participant an amount equal to the lesser of (i) the then balance of
the Participant's Account, or (ii) the amount determined by the
Administrator to be necessary to meet the emergency (including
applicable taxes).
- --------------------------------------------------------------------------------
6
10
CABOT CORPORATION
Deferred Compensation Plan
Master Plan Document
===============================================================================
(d) OTHER WITHDRAWALS. A Participant may at any time elect to
withdraw the entirety of his or her Accounts less a 10% withdrawal
penalty (in addition to any applicable tax withholding). Any such
election shall be made in such manner and upon such prior notice as the
Administrator may prescribe. A Participant who elects a withdrawal
under this Section 5(d) shall thereby be barred from future
participation in the Plan and shall cease to be a Participant.
(e) COMPUTATION OF INSTALLMENT PAYMENTS, ETC. If any Account is to be
distributed in installments, the amount of each such installment shall
be determined so as to result in equal installments over the installment
period, applying the following special rules and assumptions: (i) the
Earnings Measure used to measure notional earnings with respect to the
declining Account balance over the course of the installment period
shall be a fixed rate equal to the average of the Moody's Rate for the
year in which the installment distributions are to commence and the
preceding four calendar years, and (ii) notional earnings (calculated
using the Earnings Measure described in (i) above) shall be determined
by assuming that the Account is reduced at the beginning of each year in
the installment period by the aggregate amount of the installment
payments to be made for that year. For purposes of this paragraph, the
Moody's Rate for any calendar year is the interest rate specified in
Moody's Bond Record under the heading of "Moody's Corporate Bond Yield
Averages -- Av. Corp.", as published for the month of November preceding
the calendar year.
(f) SECTION 162(m). Notwithstanding any other provision of the Plan,
prior to a Change in Control (as that term is defined in CRISP as in
effect immediately prior to such a Change) the Administrator may defer
payment of any portion of a distribution hereunder if in the judgment of
the Administrator such deferral is necessary to avoid disallowance of a
deduction under Section 162(m) of the Code. Amounts so deferred shall
continue to be credited with notional earnings under Section 4(b) and
shall be paid on the earlier of (i) the date Section 162(m) would no
longer limit the deductibility of such payment, as reasonably determined
by the Administrator, or (ii) the date of the Change in Control (as so
defined).
(g) TAXES. All distributions under the Plan shall be subject to
reduction for applicable tax withholding.
6. ASSIGNMENT. Each Employer's obligations under the Plan shall be
binding upon its successors and assigns. The rights of Participants and
beneficiaries under the Plan are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of such Participants and beneficiaries.
- -------------------------------------------------------------------------------
7
11
CABOT CORPORATION
Deferred Compensation Plan
Master Plan Document
===============================================================================
Any attempt by any person other than Participants or their beneficiaries to
bring a claim under the Plan shall be null and void.
7. PLAN TO BE UNFUNDED, ETC. The Plan is intended to be a "pension
plan" (within the meaning of Section 3(2) of ERISA) that is unfunded for ERISA
and tax purposes and that qualifies for the exemptions described in ERISA
Sections 201(a)(2), 301(a)(3) and 401(a)(1). The Administrator shall be the
"plan administrator" of the Plan and shall have discretion to construe its
terms and determine each Eligible Employee's or Participant's eligibility for
deferrals or distributions hereunder. If any person claims any benefit
hereunder, the Administrator shall make and communicate its decision with
respect to the claim within 90 days from the date the claim was received.
Where special circumstances require additional time for processing the claim,
the ninety-day response period may be extended by the Administrator to 180
days. If the Administrator does not render a written determination prior to
the expiration of such 90-day (or 180-day) period, the claim will be deemed
denied. If a claim hereunder is denied, the claimant may, within 60 days of
such denial, appeal the denial by written request for review delivered to the
Board or its designate, which request may include a request to review pertinent
documents and to submit issues and comments in writing. The Board or its
designate shall render a decision on the appeal within 60 days (or, if special
circumstances require an extension of the time for processing, 120 days) after
receipt of the request for review; but if no written decision is rendered
within such period(s), the appeal will be deemed denied.
Nothing in this Section or in Section 4(b) shall be construed as prohibiting
the Employer from establishing and maintaining a "rabbi trust" or similar trust
or account in connection with the Plan, so long as the maintenance and funding
of such a trust or account does not jeopardize the unfunded status of the Plan
under ERISA or effective tax deferral under the Code.
8. NO CONTRACT OF EMPLOYMENT. By participanting in the Plan, each
Participant expressly acknowledges and agrees that (i) nothing in the Plan in
its operation, including deferrals hereunder, limits the right of the Company
or any other Employer to terminate the employment or other services of the
Participant at any time, with or without cause, and that (ii) neither he or
she, nor his or her beneficiaries, will claim lost compensation or tax benefits
associated with discontinuance of participation in the Plan as damages or as a
measure of damages in connection with any termination of employment or other
services.
9. AMENDMENT AND TERMINATION. The Board may terminate the Plan at any
time and may amend the Plan at any time and from time to time, including
amendments with retroactive effect; provided, that no such action shall,
without the consent of the affected Participant, reduce the balance of any
Participant's Account below what it was immediately prior to the taking of such
- -------------------------------------------------------------------------------
8
12
CABOT CORPORATION
Deferred Compensation Plan
Master Plan Document
===============================================================================
action; and further provided, that upon and following a Change in Control (as
defined in CRISP as in effect immediately prior to such a Change), no amendment
shall result in the further deferral of payments that have been delayed by
reason of the operation of Section 5(e) above. If it determines such action to
be necessary to preserve or reinstate the Plan's status as a "top hat" plan
under Sections 201(a)(2), 301(a)(3) or 401(a)(1) of ERISA, or to ensure
effective tax deferral under the Plan, the Administrator may at any time
exclude any individual from participation in the Plan and cause his or her
Account to be promptly distributed, or may make such changes in the deferral or
distribution rules hereunder as are reasonably determined by the Administrator
to be necessary to accomplish such result or results. Upon termination of the
Plan in general or as to any Participant or group of Participants, the
Administrator may, but need not, provide for immediate distribution of Accounts
to the affected Participants.
10. ADMINISTRATION OF THE PLAN. The Administrator shall have full
power to interpret and administer the Plan and determine the eligibility of any
person for benefits hereunder and the amount of any such benefit, in its
discretion. Without limiting the foregoing, the Administrator shall have full
discretionary power and authority, not inconsistent with the express provisions
of the Plan, to select those individuals who may participate in the Plan; to
determine their remuneration eligible for deferral under the Plan; to determine
their eligibility to commence receipt of benefits and the form of benefits
(including, without limitation, any determination as to the proper treatment of
leaves of absence and other periods of service to the Employer); to adopt,
alter, and repeal such rules, guidelines and procedures for administration of
the Plan and for its own acts and proceedings as it shall deem advisable; to
prescribe the form of any election under the Plan; and otherwise to supervise
the administration of the Plan.
IN WITNESS WHEREOF, the Company has signed this Plan Document as of the
1st day of January 1995.
By: Karen M. Morrissey
-----------------------------------------
Its: Vice President
----------------------------------------
- -------------------------------------------------------------------------------
9
13
CABOT CORPORATION
Deferred Compensation Plan
Master Plan Document
===============================================================================
Appendix A
Employers Participating in the Plan
- -----------------------------------
Cabot Corporation
Distrigas of Massachusetts Corporation
TUCO INC.
- --------------------------------------------------------------------------------
10