Exhibit 10.13
GREATER BAY BANCORP
1997 ELECTIVE
DEFERRED COMPENSATION PLAN
Amended as of December 16, 1999
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GREATER BAY BANCORP
1997 ELECTIVE DEFERRED COMPENSATION PLAN
Amended as of December 16, 1999
This Greater Bay Bancorp 1997 Elective Deferred Compensation Plan (the
"Plan") is adopted by Greater Bay Bancorp, a California corporation (the
"Company"), and its Subsidiaries to provide specified deferred compensation
benefits to a select group of management or highly compensated employees and
Directors who contribute materially to the continued growth, development, and
future business success of the Company and its Subsidiaries. The Plan shall be
unfunded for tax purposes and for purposes of Title I of ERISA.
ARTICLE I
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DEFINITIONS
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Section 1.01 Definitions. Whenever used in the Plan, the following words
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and phrases shall have the meanings set forth below unless a different meaning
is expressly provided or plainly required by the context in which the words or
phrases are used:
(A) "Account" or "Deferred Compensation Contribution Account"
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means the account maintained for each Participant which represents his
or her total interest in the Plan as of any date and which consists of
the Participant's account to which (i) Deferred Compensation
Contributions have been credited under the Plan, plus (ii) Additions
have been credited in accordance with Section 4.03 of this Plan, and
(iii) all distributions have been subtracted. This Account shall be a
bookkeeping entry only and shall be utilized solely as a device for
the measurement and determination of the amounts to be paid to a
Participant pursuant to this Plan. Each Participant's Account shall
be maintained on a Plan Year-by-Plan Year basis so that the Deferred
Compensation Contribution for a Participant for each Plan Year shall
be tracked separately, as well as any Additions thereto and any
distributions with respect to the deferred amounts attributable to
that particular Plan Year.
(B) "Additions" means deemed earnings on Deferred
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Compensation Contributions with respect to the Interest Reference Rate
applicable to the Deferred Compensation Contributions for a particular
Plan Year for a Participant.
(C) "Beneficiary" means one or more persons, trusts, estates
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or other entities designated in accordance with Section 5.02(C) of the
Plan that are entitled to receive benefits under the Plan upon the
death of a Participant.
(D) "Board" means the Board of Directors of the Company or a
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Subsidiary, as the context requires.
(E) "Committee" means the Deferred Compensation Committee
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created by the Company Board or, if none, the Company Board itself.
The
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Committee shall consist of at least two (2) members, who may
themselves also be Participants.
(F) "Compensation" means, with respect to any Employee, the
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annual base salary paid to such Employee by the Company or a
Subsidiary that is includable in the Employee's gross income for each
calendar year (determined without regard to community property laws),
annual bonuses, special awards, commissions and deferred compensation
contributions to this Plan, but excluding (1) any other amounts
contributed by the Company or a Subsidiary to any pension plan or plan
of deferred compensation, (2) any amount paid by the Company or a
Subsidiary for non-taxable fringe benefits, such as health and
welfare, hospitalization and group life insurance benefits, or
perquisites, and (3), unless the Committee determines otherwise for a
particular Plan Year, any amounts paid by the Company under the
Venture Banking Group Warrant Incentive Compensation Plan (as it may
be amended from time to time).
In the case of Directors, Compensation means the annual fees
paid by the Company or a Subsidiary, including retainer fees and
meeting fees, as compensation for serving on the Board of the Company
or a Subsidiary.
(G) "Deferred Compensation Contributions" means the amount of
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Compensation a Participant elects to have the Company or a Subsidiary
defer on his or her behalf under the Plan on a pretax basis in
accordance with Section 3.01.
(H) "Director" means a member of a Board.
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(I) "Disabled" or "Disability" means permanent and total
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disability as defined in Section 22(e)(3) of the Internal Revenue Code
of 1986, as amended.
(J) "Election Form" means that form to be provided to a
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Participant by the Company or a Subsidiary by which the recipient may
elect to participate in the Plan for a particular Plan Year. A copy
of the initial form of Election Form is attached hereto as Exhibit A.
The Committee may modify such form from time to time.
(K) "Employee" means any person who is either (1) a Director,
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or (2) a common law employee of the Company or a Subsidiary who is a
member of a select group of management or highly compensated
employees.
(L) "Interest Reference Rate" means, for each Plan Year, the
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published average Moody's corporate bond yield for AAA-rated corporate
bonds published for the month of January of each Plan Year, plus 200
basis points. It is acknowledged that Moody's publishes such bond
yields weekly during each month and that the Interest Reference Rate
will be an average of such weekly bond yields as published from time
to time for January of a Plan Year. Notwithstanding such average, the
Interest Reference Rate for a Plan Year shall
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not be less than a 7% floor nor greater than a 10% ceiling, except
that the Committee (in its sole and absolute discretion) may increase
the Interest Reference Rate above said 10% ceiling for any Plan Year.
The Interest Reference Rate as so computed shall float from year to
year. If Moody's ceases publication of such bond yields, the Committee
may select any comparable published rate as a replacement.
(M) "Participant" means an Employee who has been selected to
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participate in the Plan by the Committee for a particular Plan Year in
accordance with the rules of eligibility established by the Committee
and shall include, where the context requires, a former Participant
entitled to benefits under the Plan.
(N) "Plan Year" means, for the initial year of the Plan,
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December 1, 1997 through December 31, 1997, and thereafter a 12-month
period ending each December 31.
(O) "Subsidiary" means any corporation that has adopted the
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Plan and in which the Company owns, directly or indirectly, fifty
percent (50%) or more of the total combined voting power of such
corporation. Every corporation satisfying the foregoing ownership test
as of the date of the adoption of the Plan by the Company has adopted
the Plan simultaneously. Additional corporations may become
Subsidiaries in the future if the foregoing ownership test is met and
their Boards adopt the Plan.
ARTICLE II
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PARTICIPATION
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Section 2.01 Eligibility and Participation. As set forth in the
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definitions of "Employee" and "Participant," only certain Directors and a select
group of management or highly compensated common law employees of the Company or
a Subsidiary are eligible to participate in the Plan in accordance with such
eligibility rules as the Committee may establish. Each Employee selected by the
Committee for participation in the Plan with respect to a particular Plan Year
shall become eligible to participate in the Plan upon notice by the Committee of
his or her eligibility for participation for that Plan Year.
Section 2.02 Enrollment of Participants. Each Employee eligible to
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participate in the Plan and selected by the Committee for possible participation
for a particular Plan Year as provided in Section 2.01 shall complete an
Election Form pursuant to Section 3.02 with regard to that Plan Year. At the
time of his or her initial enrollment, each such Employee shall also designate a
Beneficiary to receive benefits under the Plan in the event such Employee dies
prior to the time all benefits held in his or her Account under the Plan have
been distributed to him or her.
Section 2.03 Duration of Participation. From Plan Year to Plan Year, the
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Committee may select potential Participants for that particular Plan Year from
among the Employees in its sole and absolute discretion. Selection of an
Employee as a potential Participant with respect to
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one Plan Year does not guarantee selection of that Employee as a potential
Participant with respect to any subsequent Plan Year by the Committee.
ARTICLE III
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CONTRIBUTIONS
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Section 3.01 Deferred Compensation Contributions. Each Plan Year, a
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Participant may designate on an Election Form a percentage of his or her
Compensation to have allocated to the Plan as a Deferred Compensation
Contribution in accordance with the provisions of Section 3.02, subject to the
limits set forth herein. A Participant may elect to have such contributions
made from bonuses or Director fees at a lower or higher rate than from other
Compensation. The minimum annual deferral is $2,000 in the aggregate, and the
maximums are: 100% of Director's fees; 100% of bonuses; and 50% of other
Compensation.
Section 3.02 Election Procedure. The Committee shall provide an Election
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Form to each Employee who is selected by the Committee to participate in the
Plan and to become a Participant. Each such selected eligible Employee who
elects to make a Deferred Compensation Contribution for the applicable Plan Year
shall so specify on the Election Form and shall agree to a corresponding
reduction in his or her cash Compensation. A Participant must complete his or
her annual Election Form and return it to the Committee on or before such date
as the Committee shall specify. In the case of a Participant making an election
for the next Plan Year, such date shall be no later than the last day of the
calendar month prior to commencement of the Plan Year for which the
Participant's election shall be effective. For the initial Plan Year or for an
eligible Employee selected for participation during the course of a Plan Year,
an eligible selected Employee shall elect to participate during the Plan Year in
which he or she first becomes eligible for participation by returning to the
Committee his or her properly completed Election Form on the deferral of
Compensation for services rendered by such Employee after his or her deferral
election. If such eligible Employee does not make an election during the Plan
Year in which he or she first becomes eligible, a subsequent election may only
be made at the commencement of any succeeding Plan Year. An election made by an
eligible selected Employee shall apply only for one Plan Year, and each eligible
Employee selected for participation for a subsequent Plan Year must make a
separate election for that Plan Year.
Section 3.03 Failure to Elect. An eligible Employee selected for
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participation but failing to return a completed Election Form to the Committee
on or before the specified due date for a Plan Year shall be deemed to have
elected to receive his or her full Compensation in cash for that Plan Year.
Section 3.04 Irrevocability of Election by the Participant. Except as
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provided in Section 5.03 and Section 5.04, a Deferred Compensation Contribution
election made under the Plan shall remain irrevocable for the entire Plan Year
for which the election is made.
Section 3.05 Company or Subsidiary Contributions. Currently the Plan does
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not provide for Company or Subsidiary contributions.
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Section 3.06 FICA and Other Taxes. For each Plan Year in which a Deferred
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Compensation Contribution is being withheld, the Company or Subsidiary shall
ratably withhold from the Participant's Compensation the Participant's share of
FICA and other employment taxes imposed on such Compensation; first, from
Compensation not deferred under the Plan, and (if necessary) second, from
Compensation which otherwise would be deferred under the Plan.
ARTICLE IV
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PARTICIPANT ACCOUNTS AND INVESTMENT OPTIONS
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Section 4.01 Participant Accounts. The Company or Subsidiary shall
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establish a Deferred Compensation Contribution Account on behalf of each
Participant which shall be credited Plan Year-by-Plan Year with Deferred
Compensation Contributions on behalf of such Participant. Deferred Compensation
Contributions with respect to regular Compensation shall be credited at least
monthly and Deferred Compensation Contributions with respect to Compensation
paid less frequently than monthly shall be credited promptly after such
Compensation otherwise would have been paid.
The Committee shall maintain records relative to each Participant's
Deferred Compensation Contribution Account so that its value may be determined
as of any business day as provided in Sections 4.03 and 5.02(B) below. Each
Participant shall be advised from time to time, at least once each Plan Year, as
to the status and value of his or her Deferred Compensation Contribution
Account.
Section 4.02 Investment Options. A Participant shall be deemed to have
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his or her Deferred Compensation Contribution for each Plan Year treated as if
such Contribution were invested and reinvested at the Interest Reference Rate.
Participants have no other investment options with respect to Deferred
Compensation Contributions.
Section 4.03 Crediting of Additions. The Deferred Compensation
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Contributions that a Participant makes to the Plan each Plan Year shall be
deemed to have been invested and reinvested from time to time at the Interest
Reference Rate. The Committee shall credit the Participant's Account with
Additions on the Deferred Compensation Contributions credited to the
Participant's Account. Additions to the Participant's Account shall accrue
beginning on the date the Account first has a positive balance and shall
continue until the Participant has received his or her Account in full as
provided under Section 5.02. Deemed interest shall be credited quarterly and
compounded quarterly on a Participant's Account, as if each Deferred
Compensation Contribution were allocated to such Account on the last day of the
quarter in which it would otherwise be paid as Compensation. In the case of any
event resulting in a distribution to a Participant or Beneficiary prior to the
end of a Plan Year, the basis for that Plan Year's interest crediting will be a
fraction of the full year's interest, based on the number of full calendar
quarters during the Plan Year prior to the calendar quarter in which the
distribution occurred.
Section 4.04 Minimum Benefit. Notwithstanding any provision of the Plan
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to the contrary, in no event shall the amount of benefits payable to a
Participant be less than the total
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amount of Deferred Compensation Contributions that the Participant has made to
the Plan during his or her years of participation in the Plan, less all
distributions.
ARTICLE V
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BENEFITS
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Section 5.01 Vesting. Each Participant shall be fully vested in his or
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her Deferred Compensation Contribution Account at all times.
Section 5.02 Payments of Benefits. Except as provided in the remaining
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provisions of this Article V, a Participant's benefits hereunder shall be paid
to the Participant (or to his or her Beneficiary following the Participant's
death), as follows:
(A) That portion of the Participant's Account with respect to
a Deferred Compensation Contribution for a Plan Year which the
Participant has elected to have payable in the form of installments
based upon the Participant's designation on his or her Election Form
for that Plan Year shall be payable to him or her in the form of
installments, and that portion of the Participant's Account with
respect to a Deferred Compensation Contribution for a Plan Year which
the Participant has elected to have payable in the form of a lump sum
based upon the Participant's designation on his or her Election Form
for that Plan Year shall be payable to him or her in the form of a
lump sum, at such time as provided below.
(B) Payment of a Participant's benefit in the form of
installments and/or a lump sum shall commence or shall be payable, as
applicable, within 60 days following the Participant's death or payout
commencement date specified in the applicable Election Form.
Notwithstanding the foregoing, the Committee may in its sole
and absolute discretion disregard an installment election by the
Participant and direct the payment of the Participant's benefit in a
single lump sum, if the total amount of the benefit does not exceed
$25,000. If the Participant dies before all installment benefits have
been paid, the remaining installments shall be paid (over the
remaining period) to his or her Beneficiary; provided, that the
Committee in its sole and absolute discretion may determine to pay the
value of the Account to the Beneficiary in a lump sum.
(C) A Participant may designate or change at any time the
Beneficiary to receive the Participant's benefits hereunder in the
event of his or her death. Any such designation shall be made on a
form provided by the Committee for that purpose, and shall not be
effective until the form is filed with the Committee. A form of
beneficiary designation is attached hereto as Exhibit B, which form
the Committee may modify from time to time. Spousal consent is
required if a married Participant wishes to name a primary Beneficiary
other than his or her spouse. If no Beneficiary is designated, or if
a designated Beneficiary shall not survive to receive all payments due
hereunder, all or such part of the Participant's
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Account as have not been distributed shall be payable to the
Participant's spouse, and, if no spouse survives, to the Participant's
children, with equal shares among living children and with the living
descendants of a deceased child receiving equal portions of the
deceased child's share, and in the absence of spouse or descendant, to
the Participant's estate. For purposes of this paragraph, "descendant"
means all persons who are descended from the person referred to,
either by legitimate birth to or legal adoption by such person, or any
of such person's legitimately born or legally adopted descendants
except descendants adopted by other persons. The Participant may
designate a Beneficiary's estate or other conditional Beneficiaries in
the event the first designated Beneficiary does not survive to receive
full payment.
Section 5.03 Hardship Withdrawals for Disability or Unforeseeable
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Emergencies.
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(A) Amount. Upon Committee approval, in the case of
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Disability of a Participant or an unforeseeable emergency with respect
to a Participant, a Participant shall be permitted to (1) make a cash
withdrawal, in any whole percentage increment or dollar amount, of up
to one hundred percent (100%) of the amount in his or her Account,
and/or (2) suspend any deferrals required to be made by him or her,
for such period as the Committee may approve. However, the amount of
any distribution under this section in the case of an unforeseeable
emergency or Disability shall be limited to the amount necessary to
defray the hardship expense which is not reasonably available from
other sources outside the Plan and which constitutes an unforeseeable
emergency. For this purpose, the Bank may accept the written statement
of the Participant stating the nature of his or her immediate and
heavy financial need, his or her financial resources, and the fact
that the amount of withdrawal requested is not reasonably available
from other sources.
(B) Withdrawal Procedure. A Participant wishing to withdraw
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any amount hereunder shall do so by making application therefor which
demonstrates to the satisfaction of the Committee (in its sole and
absolute discretion) that the Participant is confronted by Disability
or by a financial hardship due to an unforeseeable emergency.
Application for withdrawals shall be made on such forms as the
Committee prescribes and may be made at any time, effective as of the
first day of the month following at least fifteen (15) days' notice to
the Committee. Distribution of withdrawals shall be made in a lump sum
as soon as is administratively possible following such date.
Withdrawal distributions shall be based on the value of the
Participant's Account as of the last day of the month prior to the
date of the withdrawal, subject to quarterly interest accrual.
(C) Definition of Unforeseeable Emergency. For purposes of
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this section, "unforeseeable emergency" includes severe financial
hardship to the Participant resulting from a sudden and unexpected
illness or accident of the Participant (not resulting in Disability,
however) or of a dependent (as defined in section 152(a) of the
Internal Revenue Code of 1986, as amended) of the
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Participant, loss of the Participant's property due to casualty, or
other similar extraordinary and unforeseeable circumstances arising as
a result of events beyond the control of the Participant. The
circumstances that will constitute an unforeseeable emergency will
depend upon the facts of each case, but, in any case, no withdrawal
shall be permitted to the extent that such hardship is or may be
relieved:
(1) Through reimbursement or compensation by insurance or
otherwise;
(2) By liquidation of the Participant's assets (not
including qualified retirement plan benefits), to the extent the
liquidation of such assets would not itself cause severe
financial hardship; or
(3) By cessation of deferrals under the Plan.
Section 5.04 Non-Emergency Withdrawal. A Participant may elect (on a form
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provided by the Committee), at any time, to withdraw all of his or her Deferred
Compensation Contribution Account, less a 10% withdrawal penalty which shall be
forfeited upon such withdrawal. No partial withdrawals are allowed. Upon such
a withdrawal, the Participant's participation in the Plan shall cease, and the
Participant may not participate in the Plan for two (2) Plan Years following the
Plan Year in which the withdrawal occurs.
Section 5.05 Regulatory Accelerated Payout. If at any time any Subsidiary
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that is a bank is determined to be "significantly undercapitalized" pursuant to
the prompt corrective action provisions of federal banking law, then,
notwithstanding the general provisions of this Article V above, the Subsidiary
shall immediately distribute to such Subsidiary's Participants or Beneficiaries
a lump sum cash amount equal to the Account balances of such distributees. In
the event bank Subsidiaries of the Company constituting more than two-thirds
(2/3) of the net assets of the Company have been determined to be "significantly
undercapitalized" as defined above, the Company shall make a similar immediate
payout to the Company's Participants and Beneficiaries. All determinations for
purposes of this Section 5.05 shall be made by the Committee in its sole and
absolute discretion.
ARTICLE VI
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CREDITOR RIGHTS; NO TRUST
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By participating in the Plan, a Participant shall become a mere unsecured
creditor of the Company or a Subsidiary. No assets of the Company or a
Subsidiary shall be placed in trust or otherwise set aside from the claims of
general creditors of the Company or a Subsidiary for the benefit of any
Participant. A Participant shall have the mere promise of the Company or a
Subsidiary to pay deferred compensation in the future. A Participant's right to
benefit payments under the Plan are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment or
garnishment by creditors of the Participant or his Beneficiary.
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The foregoing not withstanding, upon the occurrence of a Change in Control
as the term is defined below, the Company shall create an irrevocable trust, the
assets of which are subject to the claims of general creditors of the Company or
a Subsidiary (the "Rabbi Trust"), and transfer all amounts credited to the
Deferred Compensation Contribution Account of each Participant to such Rabbi
Trust. For purposes of the Plan, the term "Change in Control" shall mean the
first to occur of any of the following events:
(A) Any "person" (as that term is used in Section 13 and
14(d)(2) of the Securities Exchange Act of 1934 ("Exchange Act"))
becomes the beneficial owner (as that term is used in Section 13(d) of
the Exchange Act), directly or indirectly, of 25% or more of the
Company's capital stock entitled to vote in the election of Directors;
(B) During any period of not more than two consecutive years,
not including any period prior to the adoption of this Trust,
individuals who, at the beginning of such period constitute the Board
of Directors of the Company, and any new Director (other than a
Director designated by a person who has entered into an agreement with
the Company to effect a transaction described in clause (A), (C), (D)
and (E) of this Article) whose election by the Board of Directors or
nomination for election by the Company's stockholders was approved by
a vote of at least three-fourths (3/4ths) of the Directors then still
in office, either were Directors at the beginning of the period or
whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority thereof;
(C) The shareholders of the Company approve any consolidation
or merger of the Company, other than a consolidation or merger of the
Company in which the holders of the common stock of the Company
immediately prior to the consolidation or merger hold more than 50% of
the common stock of the surviving corporation immediately after the
consolidation or merger;
(D) The shareholders of the Company approve any plan or
proposal for the liquidation or dissolution of the Company; or
(E) The shareholders of the Company approve the sale or
transfer of substantially all of the Company's assets to parties that
are not within a "controlled group of corporations" (as defined in
Code Section 1563) in which the Company is a member.
ARTICLE VII
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ADMINISTRATION OF PLAN
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Section 7.01 Plan Administration. The administration of the Plan shall be
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under the supervision of the Committee, which shall see that the Plan is carried
out, in accordance with its terms, for the exclusive benefit of persons entitled
to participate in the Plan without discrimination among them. Committee members
must recuse themselves with respect to any
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decisions of the Committee relating to that particular member individually. The
Committee's powers will include, but will not be limited to, the following
authority, in addition to all other powers provided by this Plan:
(A) To make and enforce such rules and regulations as it deems
necessary or proper for the efficient administration of the Plan;
(B) To interpret the Plan, its interpretation thereof in good faith
to be final and conclusive on all persons claiming benefits under the Plan;
(C) To decide all questions concerning the Plan and the eligibility
of any person to participate in the Plan;
(D) To appoint such agents, counsel, accountants, consultants and
other persons as may be required to assist in administering the Plan; and
(E) To allocate and delegate its responsibilities under the Plan
and to designate other persons to carry out any of its responsibilities
under the Plan, any such allocation, delegation or designation to be in
writing.
Section 7.02 Examination of Records. The Committee will make available to
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each Participant such of his or her records under the Plan as pertain to the
Participant, for examination at reasonable times during normal business hours.
Section 7.03 Nondiscriminatory Exercise of Authority. Whenever, in the
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administration of the Plan, any discretionary action by the Committee is
required, the Committee shall exercise its authority in a nondiscriminatory
manner so that all persons similarly situated will receive substantially the
same treatment. The Committee is given broad discretion to interpret and
construe the Plan and to carry out its responsibilities hereunder. Subject to
the rights of appeal set forth in Section 7.04, decisions and interpretations of
the Committee shall be final, conclusive, and binding once made and shall be
entitled to judicial deference, and shall be upheld unless found to be arbitrary
or capricious.
Section 7.04 Claim For Benefits and Review of Denial.
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(A) Submission of Claim. A Participant or Beneficiary (the
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"Claimant") may file a claim for benefits under the Plan by writing a
letter to the Committee which requests the determination of the Claimant's
entitlement to benefits and which states the basis for the claim. The
claim must be dated and signed by the Claimant, and must contain the
Claimant's address and telephone number.
(B) Denial of Claim. If a claim is wholly or partially denied, the
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Committee shall, within ninety (90) days after receipt of the claim,
provide written notice to the Claimant setting forth the following in a
manner calculated to be understood by the Claimant:
(1) The specific reason or reasons for the denial;
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(2) Specific reference to pertinent Plan provisions on which the
denial is based;
(3) A description of any additional material or information
necessary for the Claimant to perfect the claim and an explanation of
why such material or information is necessary; and
(4) Appropriate information as to the steps to be taken if the
Claimant wishes to submit his or her claim for review.
If special circumstances require an extension of time for processing
the claim, the Committee may extend the period for an additional ninety
(90) days by furnishing written notice of the extension to the Claimant
prior to the termination of the initial ninety 90-day period.
If notice of denial of the claim is not furnished to a Claimant within
these periods, and the claim has not been granted within these periods, the
claim shall be deemed denied for the purposes of review.
(C) Appeal From Denial of Claim. A Claimant may appeal the denial of
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a claim to the Committee by delivering to the Committee a written
application for review within sixty (60) days after receipt by the Claimant
of written notification of denial of the claim, or such longer period as
the Committee may, in its reasonable discretion, permit. The written
application shall be dated and signed by the Claimant or his or her
authorized representative and shall request a review of the prior denial of
the claim. The Claimant shall be entitled to a full and fair review of the
denial of his or her claim, including the opportunity for the Claimant or
his or her authorized representative to review pertinent documents and to
submit issues and comments in writing.
(D) Review of Appeal. The Committee shall make its decision on the
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appeal within sixty (60) days after receipt of the request for review,
unless special circumstances (such as the need to hold a hearing if, in the
Committee's determination, a hearing is necessary or advisable) require an
extension of time, in which case a decision shall be rendered as soon as
possible, but not later than one hundred twenty (120) days after receipt of
the request for review. If such 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 commencement of the
extension. If the decision on review is not furnished within these time
limits, the claim shall be deemed denied on review.
The decision on review shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be understood
by the Claimant, and specific references to the pertinent Plan provisions
on which the decision is based.
(E) Legal Action. Compliance with the administrative appeal
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provisions of this Section 7.04 is a mandatory prerequisite to a Claimant's
right to commence any legal action with respect to any claim for benefits
under this Plan.
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Section 7.05 Correction of Administrative Errors. If an error is made in
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the administration of the Plan, the Committee shall promptly correct the error
upon its discovery. For this purpose, "administration" shall encompass the
entire operation of the Plan, including, but not limited to, eligibility,
participation and benefit calculation and distribution. If a Claimant (as
defined in Section 7.04) has been denied a benefit payment due to such
administrative oversight, the Committee shall determine the correct interest of
the Claimant and the Company or Subsidiary shall pay an amount on behalf of the
Claimant as is necessary to rectify the error. If an excessive payment has been
made for a Participant or Beneficiary, the Committee shall advise the
Participant or Beneficiary of the error and shall take such actions on the
Plan's behalf as are necessary to retrieve the excessive payment.
Section 7.06 Participant Applications and Notices. Any Participant or
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Beneficiary applications or notices required to be made to the Committee
hereunder shall be made to the Committee at the Company's principal office
address, and shall be deemed made upon personal delivery, two (2) days following
posting by express mail (postage prepaid), Federal Express or similar overnight
carrier, or five (5) days after sending by ordinary mail, postage prepaid.
ARTICLE VIII
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AMENDMENT AND TERMINATION OF PLAN
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Section 8.01 Amendment. The Company shall have the right to amend this
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Plan from time to time, and to amend or cancel any such amendments. Plan
amendments shall be stated in an instrument executed by the Company and each
Subsidiary adopting such amendment in the same manner as this Plan, and this
Plan shall be deemed to have been amended in the manner and at the time therein
set forth and all Participants and Beneficiaries shall be bound thereby;
provided, however, that no amendments shall be effective which shall attempt to
reduce the Account balance of any Participant or Beneficiary.
Section 8.02 No Contractual Obligation. It is the expectation of the
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Company and the Subsidiaries that they will continue the Plan indefinitely, but
the continuation thereof is not assumed as a contractual obligation by the
Company or any Subsidiary. The Plan may be discontinued or terminated with
respect to the Company or any Subsidiary at any time by action of the Company or
Subsidiary. Discontinuance or termination of the Plan shall not have the effect
of depriving any Participant or Beneficiary of any benefit owed under the Plan
as of the date of termination of the Plan.
Section 8.03 Procedure Upon Termination. Upon the termination of the Plan
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by the Company, the Company shall proceed as soon as administratively feasible,
but in any event within one (1) year from such effective date, to distribute all
of the Participants' Accounts owed under the Plan.
ARTICLE IX
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MISCELLANEOUS PROVISIONS
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Section 9.01 Information To Be Furnished. Participants and Beneficiaries
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shall provide the Committee with such information and evidence, and shall sign
such documents, as may reasonably be requested from time to time for the purpose
of administration of the Plan.
Section 9.02 Limitation on Participants' Rights. Participation in the
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Plan shall not give any person the right to continued employment, or any right
or interest in the Plan other than as herein provided. The Company and each
Subsidiary reserves the right to dismiss any person without any liability for
any claim either against the Plan, except to the extent herein provided, or
against the Company or Subsidiary. All benefits provided hereunder shall be
provided solely by the Company or Subsidiary from its general assets.
Section 9.03 Receipt and Release. Any payment on behalf of any
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Participant or his or her legal representative or Beneficiary in accordance with
the provisions of this Plan shall be, to the extent thereof, in full
satisfaction of all claims against the Company or Subsidiary and the Company or
Subsidiary may require such Participant, legal representative or Beneficiary, as
a condition precedent to such payment, to execute a receipt and release to such
effect.
Section 9.04 Nonassignability. None of the benefits, payments, proceeds
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or claims of any Participant or Beneficiary shall be subject to any claim of any
creditor of any Participant or Beneficiary and, in particular, the same shall
not be subject to attachment or garnishment or other legal process by any
creditor of any Participant or Beneficiary, nor shall any Participant or
Beneficiary have any right to alienate, anticipate, commute, pledge, encumber or
assign any of the benefits or payments or proceeds which he or she may expect to
receive under this Plan.
Section 9.05 Incompetency. Every person receiving or claiming benefits
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under the Plan shall be conclusively presumed to be mentally competent and of
age until the date on which the Committee receives a written notice, in a form
and manner acceptable to the Committee, that such person is incompetent or a
minor, for whom a guardian or other person legally vested with the care of his
or her person or estate has been appointed; provided, however, that if the
Committee shall find that any person to or for whom a benefit is payable under
the Plan is unable to care for his or her affairs because of incompetency, or is
a minor, any payment due (unless a prior claim therefor shall have been made by
a duly appointed legal representative) may be paid to the spouse, a child, a
parent or a brother or sister, or to any person or institution deemed by the
Committee to have incurred expense for such person otherwise entitled to
payment. To the extent permitted by law, any such payment so made shall be a
complete discharge of liability therefor under the Plan.
Section 9.06 No Guarantee of Tax Consequences. The Company and the
--------------------------------
Subsidiaries make no commitment or guarantee that any Deferred Compensation
Contributions or other benefits hereunder provided or to be provided to or for
the benefit of a Participant or Beneficiary will be excludable from the
Participant's or Beneficiary's gross income for federal or state income tax
purposes, or that any other federal or state tax treatment will apply to or be
available to any Participant or Beneficiary.
Section 9.07 Indemnification of Company and Subsidiaries by Participants.
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If a Deferred Compensation Contribution or other amount is allocated to an
Account hereunder for any Participant and such allocation is taxable to the
Participant, such Participant shall indemnify
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and reimburse the Company and Subsidiaries for any liability they may incur for
failure to withhold federal or state income tax or Social Security tax from such
payments. However, such indemnification and reimbursement shall not exceed the
amount of additional federal and state income tax and interest that the
Participant would have owed if the amount had been paid to the Participant as
regular cash Compensation, plus the Participant's share of any Social Security
tax that would have been paid on such Compensation, less any such additional
income and Social Security tax actually paid by the Participant.
Section 9.08 Benefits Solely From General Assets. The benefits provided
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hereunder will be paid solely from the general assets of the Company or
Subsidiary, as applicable. This Plan is an unfunded Plan, with no segregated or
separate assets required. No Participant or Beneficiary or other person shall
have any claim against, right to, or security or other interest in, any fund,
account or asset of the Company or Subsidiary from which any payment under the
Plan may be made. All amounts of compensation deferred under the Plan, all
property and rights purchased with such amounts, and all income attributable to
such amounts, property or rights, shall remain (until made available to the
Participant or other Beneficiary) solely the property and rights of the Company
or Subsidiary (without being restricted to the provision of benefits under the
Plan) subject only to the claims of the general creditors of the Company or
Subsidiary, as applicable.
Section 9.09 Governing Law. This Plan shall be construed, administered
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and enforced according to the laws of California.
Section 9.10 Distribution in the Event of Taxation or ERISA Coverage.
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If, for any reason, all or any portion of a Participant's Account under
this Plan becomes taxable to the Participant prior to receipt, a Participant may
petition the Committee for a distribution of that portion of his or her Account
that has become taxable. Upon the grant of such a petition, which grant shall
not be unreasonably withheld, the Company or Subsidiary shall distribute to the
Participant immediately available funds in an amount equal to the taxable
portion of his or her Account. If the petition is granted, the tax liability
distribution shall be made within 90 days of the date when the Participant's
petition is granted. Such a distribution shall reduce the Participant's
Account. The Committee shall also distribute a Participant's Account
immediately in a lump sum in the event of a judicial or administrative decision,
or an opinion of Company's counsel, that such Participant is not a member of a
"select group of management or highly compensated employees" within the meaning
of Title I of ERISA (determined without regard to any termination of employment
or termination of Director status with the Company or a Subsidiary).
Section 9.11 Taxes and Withholding. The Company or Subsidiary may
---------------------
withhold from any distribution under this Plan any and all employment and income
taxes that are required to be withheld under applicable law.
Section 9.12 Adoption by Subsidiaries. Any corporation that is now or
------------------------
hereafter becomes a Subsidiary may adopt this Plan by executing a counterpart
signature page hereto and furnishing written notice of such adoption to the
Committee.
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