EXHIBIT 10.4
SIEBEL SYSTEMS, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
1. INTRODUCTION
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1.1 ESTABLISHMENT OF PLAN. Siebel Systems, Inc. hereby establishes the
Siebel Systems, Inc. Executive Deferred Compensation Plan effective as of
January 1, 1997.
1.2 PURPOSE OF PLAN. Siebel has established this Plan to provide select
executives with the opportunity to defer the receipt of compensation and a
vehicle through which to do so. Siebel intends to maintain the Plan
primarily for the purpose of providing deferred compensation for a select
group of management or highly compensated employees, within the meaning
ERISA Section 401(a)(1). The Plan will be interpreted in a manner that
comports with these intentions.
2. DEFINITIONS
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Definitions are contained in this article and throughout other sections of
the Plan. The location of a definition is for convenience only and should not
be given any significance. A word or term defined in this article (or in any
other article) will have the same meaning throughout the Plan unless the context
clearly requires a different meaning.
2.1 BENEFICIARY means the individual(s) or entity designated by a
Participant, or by the Plan, to receive any benefit payable upon the
death of a Participant or Beneficiary.
A Beneficiary designation must be signed by the Participant and delivered
to the Benefit Committee on such form as specified by the Benefit
Committee. In the absence of a valid or effective Beneficiary
designation, the Beneficiary will be the Participant's surviving spouse,
or if there is no surviving spouse, the Participant's estate.
2.2 BENEFIT COMMITTEE means one or more individuals appointed by Siebel
in accordance with Article VII. The Benefit Committee will serve as the
"plan administrator" to manage and control the operation and
administration of the Plan, within the meaning of ERISA Section 3(16)(A).
2.3 BOARD means the Board of Directors of Siebel Systems, Inc.
2.4 BONUS means the compensation paid in accordance with the Siebel
Executive Incentive Compensation Plan.
2.5 CODE means the Internal Revenue Code of 1986, as amended from time to
time.
2.6 EDCP Account means a bookkeeping account established for and
maintained on behalf of a Participant to which deferred compensation
amounts, and net income (or losses) thereon, are credited.
2.7 ELIGIBLE EMPLOYEE means a common law employee of Siebel identified by
the Benefit Committee as eligible to defer compensation under the Plan
for a Plan Year, as listed in Appendix A. The group of Eligible
Employees for any Plan Year will be limited to, and may be more
restrictive than, the group of employees who are members of a select
group of management or highly compensated employees (within the meaning
ERISA Section 401(a)(1)). An employee's eligibility to participate in
the Plan for a given Plan Year does not guarantee continued eligibility
to participate in any future Plan Year.
The CEO will identify the initial group of Eligible Employees in Appendix A
before January 1, 1997 and The Benefit Committee may update Appendix A at any
time.
2.8 ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
2.9 HARDSHIP means an unforeseeable and unanticipated emergency which is
caused by an event beyond the control of the Participant or Beneficiary,
and which would result in severe financial hardship to the Participant or
Beneficiary if a distribution or revocation of a deferral election were
not permitted. Hardship conditions will be evaluated in accordance with
the terms of Treasury Regulations Section 1.457-2(h)(4). The Benefit
Committee will have sole discretion to determine whether a Hardship
condition exists and the Benefit Committee's determination will be final.
2.10 SIEBEL means Siebel Systems, Inc. and any other subsidiary of
Siebel Systems, Inc. that is the employer of any Eligible Employee, and
their respective successors.
2.11 INSOLVENT means Siebel is (a) unable to pay its debts as they
become due, or (b) subject to a pending proceeding as a debtor
under the U.S. Bankruptcy Code.
2.12 INVESTMENT FUND OR FUNDS means the investment funds designated by
Benefit Committee as the basis for determining the investment return to
be allocated to Participants" EDCP Accounts. The Benefit Committee may
change the Investment Funds at such times as it deems appropriate.
2.13 PARTICIPANT means a current or former Eligible Employee who has been
designated by the Benefit Committee as eligible to participate in the
Plan and who has an EDCP Account Balance.
2.14 PLAN means the Siebel Systems, Inc. Executive Deferred Compensation
Plan, as set forth in this document, as amended form time to time.
2.15 PLAN YEAR means the twelve month period from January 1, 1997 through
December 31, 1997, and each future calendar year.
2.16 RETIREMENT means termination of employment with Siebel at or after age
55, or upon termination of employment with Siebel due to Disability.
Disability means a physical or mental impairment which will apparently be
permanent or of long and indefinite duration. The Benefit Committee will
determine whether a Participant is disabled and its determination will be
final.
2.17 SALARY means a Participant's base salary, quarterly regional performance
payments and commission payment for a Plan Year, and excludes any other
form of compensation such as bonuses, proceeds from the exercise of stock
options of stock appreciate rights, severance payments, moving expenses,
car or other special allowances, or other amounts included in an Eligible
Employees' taxable Participant's Salary is determined before taking into
account any reduction in taxable income by salary reduction under Code
Section 125 or 401(k), or under this Plan.
3. PARTICIPATION
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3.1 PARTICIPATION. An Eligible Employee may elect to defer the receipt of
compensation by completing and submitting a deferred compensation
agreement on such form and in such
manner as prescribed by the Benefit Committee. Plan Compensation may be
deferred through three methods, as follows:
(a) BONUS DEFERRAL. An Eligible Employee can elect to defer all, or
any whole percentage or dollar amount, of his or her Bonus paid for
the Plan Year. The minimum Bonus deferral amount is $5,000.
(b) INDEPENDENT SALARY DEFERRAL. In addition to, or instead of, the
automatic rechanneling option described in subsection (c) below, an
Eligible Employee may elect to defer the receipt of up to 100% of
Salary to the Plan for a Plan Year. Independent salary deferral
elections must be made in whole percentage increments.
(c) AUTOMATIC RECHANNELING OF 401(K) DEFERRALS. Effective as of
January 1, 1997, a Participant may elect an automatic
rechanneling of 401(k) deferrals to this Plan. An automatic
rechanneling election for a Plan Year works in tandem with an
Eligible Employee's 401(k) election so that an Eligible
Employee can defer an uninterrupted whole percentage of up to
15% of Salary through the Siebel Systems, Inc. 401(k) Plan and
this Plan. Under an automatic rechanneling election, and
Eligible Employee's 401(k) savings percentage converts to an
EDCP deferred compensation savings election automatically when
an Eligible Employee reaches the Code Section 402(g) limit or
is otherwise limited in making 401(k) deferrals.
An Eligible Employee's election to defer all or a portion of his or her
Bonus or Salary under any available option is unrelated to any election under
another available option.
3.2 PROCEDURES. An Eligible Employee must file a written deferred
compensation agreement with the Benefit Committee electing the amount of
Bonus and/or Salary deferrals for the Plan Year and agreeing to have his
or her Bonus and/or Salary reduced by such amount. A deferred
compensation agreement must be made on such form and in such manner as
prescribed by the Benefit Committee to be considered a valid deferred
compensation election for the Plan Year.
3.3 TIMING OF ELECTIONS. Any Salary deferral election under Section 3.1 (b),
and/or (c) must be made before the start of the Plan Year to which the
Bonus or Salary relates. Any Bonus deferral election under Section 3.1
(a) must be made before the Bonus is due or ascertainable.
Notwithstanding anything in this Plan to contrary, in the first Plan
Year in which a Participant becomes eligible to participate in the Plan,
the newly eligible Participant may make an election to defer Salary and
Bonuses payable during the remainder of such Plan Year. Such election may
be made with respect to Salary payable for services to be performed
subsequent to the election within 30 days after the date the Participant
first becomes eligible. The Benefit Committee may specify such deadlines
and advance notice requirements as it deems necessary to administer the
Plan in accordance with this Section.
3.4 IRREVOCABLE ELECTIONS. In general, deferred compensation agreements
for a Plan year are irrevocable and cannot be amended by the Participant.
In the event of an election under Section 3.1 (c) to automatically
rechannel 401(k) deferrals, the 401(k) deferral election to which the
automatic rechannel election relates is also irrevocable for the Plan
Year.
However, a Participant may request to revoke a deferred compensation
agreement in the event of a Hardship. Such request will be made in
writing on such form and in such manner as prescribed by the Benefit
Committee. The Benefit Committee may grant such request if and to the
extent that it determines that the revocation of the election would serve
to alleviate the Hardship, in a manner consistent with Section 5.1.
Siebel reserves the right to modify deferred compensation agreements in
any case or class of cases to reflect a change in Plan provisions or for
administrative convenience.
3.5 COMMUNITY AND MARITAL PROPERTY. The spouse of a participant may have a
community or marital property interest in the Participant's EDCP Account
which the spouse may pass to a third party upon his or her death. If it
is intended that a spouse relinquish his or her community or marital
property interest in the Participants EDCP Account, the spouse must
execute a waiver in which he or she clearly states an intention to
relinquish his or her rights under community or marital property law with
respect to the EDCP Account. A spouse's mere consent to a Participant's
designation of a non-spouse Beneficiary is not sufficient to effect such
a waiver.
4. SIEBEL SYSTEMS, INC. CONTRIBUTIONS
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4.1 401(K) MATCHING CONTRIBUTIONS. To the extent that an Eligible Employee's
matching contributions under the Siebel Systems, Inc. 401(k) Plan are
limited to satisfy the nondiscrimination requirements of Code Sections
401(k) and 401(m), Siebel will credit each Eligible Employee's EDCP
account with a corresponding amount. The credited amount will equal an
amount which, when considered together with the matching contributions
made to the Siebel Systems, Inc. 401(k) Plan equal the amount in which
the Eligible Employee would otherwise be entitled under the terms of the
Siebel Systems, Inc. 401(k) Plan absent the limitations of Code Sections
401(k) and 401(m).
4.2 DISCRETIONARY CONTRIBUTIONS. For any Plan Year, Siebel may also elect to
credit Eligible Employees' EDCP accounts with such amount (if any) as the
Benefit Committee (in its discretion) may direct be credited for such
Plan Year. Such direction will include instructions to determine which
Eligible Employees are entitled to share in such contributions and the
method of allocation among such Eligible Employees.
5. PARTICIPANT ACCOUNT BALANCES
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5.1 ESTABLISHMENT OF ACCOUNTS. The Benefit Committee will select an
independent recordkeeper who will establish and maintain an EDCP Account
on behalf of each Eligible Employee who elects to participate in the Plan
or for whom Siebel elects to make a contribution. Contributions and net
income (or losses) will be credited to such accounts in accordance with
the provisions of this Article.
5.2 BOOKKEEPING ACCOUNTS. EDCP Accounts will be primarily for accounting
purposes and will not restrict the operation of the Plan or require
separate earmarked assets to be allocated to any account. The
establishment of an EDCP Account will not give any Participant the right
to receive any asset held by Siebel in connection with the Plan or
otherwise.
5.3 CREDITING DEFERRED COMPENSATIONS. Siebel will credit to a Participant's
EDCP Account the amount of any Bonus or Salary deferred by the
Participant as soon as administratively possible following the pay period
to which such Bonus or Salary would have been paid absent a deferred
compensation agreement.
5.4 CREDITING SIEBEL CONTRIBUTIONS. Siebel will credit to a Participant's
EDCP Account to amount of any matching or discretionary contributions
made by Siebel as of the date specified by Siebel.
5.5 ESTABLISHMENT OF INVESTMENT FUNDS. The Benefit Committee will establish
one or more Investment Funds which will be maintained for the purpose of
determining the investment
return to be credited to a Participant's EDCP Account. The Committee may
change the number, identity or composition of the Investment Funds from
time to time.
Each Participant will indicate the Investment Funds to which
contributions under Sections 5.3 and 5.4 and any existing EDCP Account
balance are to be credited. Investment Fund elections must be made at
such times and in such manner as the Benefit Committee will specify. A
Participant may change his or her Investment Fund election periodically
in such manner as the Benefit Committee may specify.
5.6 CREDITING INVESTMENT RESULTS. No less frequently than as of the last day
of each quarter, a Participant's EDCP Account balance will be increased
or decreased to reflect investment results. EDCP Accounts will be
credited with the investment return of the Investment Funds in which the
Participant elected to participate. The credited investment return is
impounded to reflect the actual performance of the Investment Funds net
of any investment fees or commissions; however, the Benefit Committee
reserves the right to calculate the investments return based on the
Investment Funds' respective rates of return.
6. DISTRIBUTION OF ACCOUNTS
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6.1 DISTRIBUTIONS IN THE EVENT OF HARDSHIP OR UPON FORFEITURE PENALTY. Prior
to a distribution under Sections 6.2 & 6.3 or 6.4, payment of all or a
portion of a Participant's EDCP Account may be made only in the event of
Hardship or upon a 10% forfeiture. The amount of any Hardship
distribution will not exceed the amount required to meet the Hardship,
including any taxes or penalties due on the distribution. A Participant
or Beneficiary must submit a written request for a Hardship distribution
to the Benefit Committee on such form and in such manner as the Benefit
Committee prescribes, and must certify as to the Hardship condition and
the severe financial need. The Benefit Committee will have sole
discretion to determine whether a Hardship exists and to determine the
appropriate action, if any. In the event of an approved Hardship, a
Participant will be precluded from deferring compensation for the
remainder of the Plan Year in which the Hardship occurred and the next
following Plan Year.
6.2 DISTRIBUTION UPON RETIREMENT OR DISABILITY. Amounts credited to a
Participant's EDCP Account will be paid upon Retirement or Disability
according to the time and manner elected by the Participant. An election
regarding the time and manner of payment of the Participant's EDCP
Account balance must be made concurrent with the Participant's election
to defer compensation under Section 3.1 and cannot subsequently be
revoked or amended by the Participant, except as provided in Section 6.1.
(a) TIME OF PAYMENT. A Participant's EDCP Account will be paid (or
will begin payment) as soon as practicable following a Participant's
Retirement or Disability, unless the Participant elects to postpone
such payment for a period of up to 15 months following the
Participant's termination of employment.
(b) MANNER OF PAYMENT. A Participant's EDCP Account will be paid in a
single sum payment unless the Participant has elected to receive the
distribution of his of her account in 5 substantially equal annual
installment payment calculated in such method as the Benefit
Committee prescribes.
6.3 DISTRIBUTION UPON TERMINATION. The time and manner of distribution of a
Participant's EDCP Account balance following termination of employment,
for reasons other than Retirement, Disability or death are governed by
this Section 6.3.
(a) TIME OF PAYMENT. A Participant's EDCP Account will be paid as soon
as practicable following a Participant's termination of employment,
unless the Participant elects to postpone each payment for a period
of up to 15 months following the Participant's termination of
employment.
(b) MANNER OF PAYMENT. Amounts credited to a Participant's EDCP
Account will be paid in a single sum payment.
6.4 DISTRIBUTION AT DESIGNATED DATE. At the time of a Participant's election
to defer compensation under Section 6.1, a Participant may elect to
receive a distribution of his or her EDCP Account balance at a specified
date in the future, provided that such election shall not affect the
timing of any distribution due to Retirement, Disability or termination
of employment.
6.5 DISTRIBUTION UPON DEATH. In the event of the death of a Participant, the
Participant's Beneficiary will receive the Participant's EDCP Account
balance in a single sum payment. Any previous election made by the
Participant regarding installment payments under Section 6.2 will be
considered null and void. Payment will be made as soon as practicable
following the Participant's death.
6.6 CASH PAYMENTS ONLY. All distributions under the Plan will be made in
cash by check.
7. PLAN ADMINISTRATION
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7.1 PLAN ADMINISTRATOR. This Plan will be administered by a Benefit
Committee of one or more members, who will be the Plan administrator. The
Benefit Committee members will be appointed by and serve at the pleasure
of Compensation Committee of the Board.
7.2 AMENDMENT OR TERMINATION. The Compensation Committee of the Board may
amend all or any provision of this Plan, and may terminate the Plan in
its entirety, at any time and for any reason. No amendment or termination
of the Plan will reduce any Participant's EDCP Account balance as of the
effective date of such amendment or termination.
7.3 ADMINISTRATION OF THE PLAN. The Benefit Committee will have the sole
discretionary authority to control and mange the operation and
administration of the Plan and have all powers, authority and discretion
necessary or appropriate to carry out the Plan provisions, and to
interpret and apply the terms of the Plan and determine questions of fact
in the particular cases or circumstances. All decisions, determinations
and interpretations of the Benefit Committee will be binding on all
interested parties, subject to the claims and appeal procedure described
in Section 7.5 and will be given the maximum deference allowed by law.
The Benefit Committee may delegate in writing its responsibilities as it
sees fit.
Committee members who are Participants will abstain from voting on any
Plan matters that relate primarily to themselves or that would cause them
to be in constructive receipt of amounts credited to their EDCP Accounts.
The Compensation Committee of the Board will identify temporary
replacement of the Benefit Committee in the event that all members must
abstain from voting.
7.4 INDEMNIFICATION. Siebel Systems, Inc. will and hereby does indemnify and
hold harmless any of it s employees, officers, directors or member of the
Benefit Committee who have fiduciary or administrative responsibilities
with respect to the
Plan from and against any and all losses, claims, damages, expenses and
liabilities (including reasonable attorney's fees and amounts paid, with
the approval of the Board, in settlement of any claim) arising our of or
resulting from the implementation of a duty, act or decision with respect
to the Plan, so long as such duty, act or decision does not involve gross
negligence or willful misconduct on the part of any such individual.
7.5 CLAIMS, INQUIRIES AND APPEALS.
(a) Any application for benefits, inquiries about the Plan or inquiries
about present or future rights under the Plan must be submitted to
the Benefit Committee at:
EDCP Benefit Committee
Siebel Systems, Inc.
1855 South Grant Street
San Mateo, CA 94115
(b) In the event that any application for benefits is denied in whole
or in part, the Benefit Committee must notify the applicant, in
writing, of the denial of the application, and of the applicant's
right to review the denial. The written notice of denial will be set
forth in a manner designed to be understood by the individual, and
will include specific reasons for the denial, specific references to
the Plan provision upon which the denial is based, a description of
any information or material that the Benefit Committee needs to
complete the review and an explanation of the Plan's review
procedure.
This written notice will be given to the individual within 90 days
after the Benefit Committee receives the application, unless special
circumstances require an extension of time, in which case, the
Benefit Committee has up to an additional 90 days for processing the
application. If an extension of time for processing is required,
written notice of the extension will be furnished to the applicant
before the end of the initial 90-day period.
This notice of extension will describe the special circumstances
necessitating the additional time and the date by which the Benefit
Committee is to render its decision on the application. If written
notice of denial of the application for benefits is not furnished
within the specified time, the application shall be deemed to be
denied. The applicant will then be permitted to appeal the denial in
accordance with the review procedure described below.
(c) Any person (or the person's authorized representative) for whom an
application for benefits is denied (or deemed denied), in whole or
in part, may appeal the denial by submitting a request for a review
to the Benefit Committee within 60 days after the application is
denied (or deemed denied). The Benefit Committee will give the
applicant (or his or her
representative) an opportunity to review pertinent documents in
preparing a request for a review. A request for a review shall be in
writing and shall be addressed to:
EDCP Benefit Committee/Appeals
Siebel Systems, Inc.
1855 South Grant Street
San Mateo, CA 94115
A request for review must set forth all of the grounds on which it is
based, all facts in support of the request and any other matters that the
applicant feels are pertinent. The Benefit Committee may require the
applicant to submit additional facts, documents or other material as it
may find necessary or appropriate in making its review.
(d) The Benefit Committee will act on each request for review within
60 days after receipt of the request, unless special circumstances
require an extension of time (not to exceed an additional 60 days),
for processing the request for a review. If an extension for review
is required, written notice of the extension will be furnished to
the applicant within the initial 60-day period. The Benefit
Committee will give prompt, written notice of its decision to the
applicant. In the event that the Benefit Committee confirms the
denial of the application for benefits in whole or in part, the
notice will outline, in a manner calculated to be understood by the
applicant, the specific Plan provisions upon which the decision is
based. If written notice of the Benefit Committee's decision is not
given to the applicant within the time prescribed in this Subsection
(d), the application will be deemed denied on review.
(e) The Benefit Committee will establish rules and procedures,
consistent with the Plan and with ERISA, as may be necessary and
appropriate in carrying out its responsibilities in reviewing
benefit claims. The Benefit Committee may require an applicant who
wishes to submit additional information in connection with an appeal
from the denial (or deemed denial) of benefits to do so at the
applicant's own expense.
(f) No legal action for benefits under the Plan may be brought until the
claimant (i) has submitted a written application for benefits in
accordance with the procedures described by Sections 7.5(a) above,
(ii) has been notified by the Benefit Committee that the application
is denied (or the application in accordance with the appeal
procedure described in Section 7.5 (c) above and (iv) has been
notified in writing that the Benefit Committee has denied the appeal
(or the appeal is deemed to be denied due to the Benefit Committee's
failure to take any action on the claim within the time prescribed
by Section 7.5 (d) above).
8. MISCELLANEOUS
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8.1 FUNDING. Participant deferrals pursuant to Article 3 and Siebel
Contributions pursuant to Article 4, and any earnings therein, will be
held in trust by an independent third party trustee selected by the
Compensation committee of the Board, and as such are earmarked to pay
benefits under the terms of the Plan. The Benefit Committee will direct
Siebel to make
periodic contributions to the trust at such times and in such amounts as
the Benefit Committee deems appropriate.
Trust assets can not be diverted to, or used for, any other purpose
except payments to Participants and Beneficiaries under the terms of the
Plan or, if Siebel is Insolvent, to Siebel's creditors. Participants and
Beneficiaries will have no right against Siebel with respect to the
payment of any portion of the Participant's EDCP Account, except as a
general unsecured creditor of Siebel.
8.2 NONALIENATION. No benefit or interest of any Participant of Beneficiary
under this Plan will be subject to any manner of assignment, alienation,
anticipation, sale transfer, pledge or encumbrance, whether voluntary or
involuntary. However, the Benefit Committee will honor a court order
regarding the payment of alimony or other support payments, or the
establishment of community property or other marital property rights, to
the extent required by law. Prior to distribution to a Participant or
Beneficiary, no EDCP Account balance will be in any manner subject to the
debts, contracts, liabilities, engagements or torts of the Participant
for Beneficiary. Assets held in trust to fund this Plan may, however, be
diverted to pay Siebel creditors, if Siebel is Insolvent.
8.3 LIMITATION OF RIGHTS. Nothing in this Plan will be construed to give a
Participant the right to continue in the employ of Siebel Systems, Inc.
at any particular position or to interfere with the right of Siebel to
discharge, lay off or discipline a Participant at any time and for any
reason, or to give Siebel the right to require any Participant to remain
in its employ or to interfere with the Participant's right to terminate
his employment.
The fact that a participant is designated as an Eligible Employee who is
eligible to defer compensation for a given Plan Year will not in any way
assure his or her continued eligibility to defer compensation for any
subsequent Plan Year.
8.4 GOVERNING LAW. To the extent that state law applies, the provisions of
this Plan will be construed, enforced and administered in accordance with
the laws of the State of California, except to the extent preempted by
ERISA.
IN WITNESS WHEREOF, by its duly authorized officer, Siebel Systems, Inc. has
executed this Plan on the date indicated below.
Siebel Systems, Inc.
EXECUTIVE DEFERRED COMPENSATION PLAN
Appendix A
For the 1997 Plan Year, the following select group of management or highly
compensated employees will be eligible to participate in the Siebel Systems,
Inc. Executive Deferred Compensation Plan:
All Vice Presidents, Senior Vice Presidents, Executive Vice Presidents, and
the Chief Executive Officer of Siebel Systems, Incorporated.