Ex - 10.1
RADISYS CORPORATION
DEFERRED COMPENSATION PLAN
Effective January 1, 2001
TABLE OF CONTENTS
PAGE
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ARTICLE I--PURPOSE AND Effective Date......................................1
ARTICLE II--DEFINITIONS....................................................1
2.1 Account.........................................................1
2.2 Administrative Committee........................................1
2.3 Beneficiary.....................................................1
2.4 Board...........................................................1
2.5 Bonus...........................................................1
2.6 Company.........................................................2
2.7 Compensation....................................................2
2.8 Deferral Commitment.............................................2
2.9 Deferral Period.................................................2
2.10 Determination Date..............................................2
2.11 Director Fees...................................................2
2.12 Disability......................................................2
2.13 Earnings Index..................................................2
2.14 Elective Deferred Compensation..................................2
2.15 Eligible Stock Option...........................................3
2.16 Employer........................................................3
2.17 Option Gain.....................................................3
2.18 Participant.....................................................3
2.19 Participation Agreement.........................................3
2.20 Plan............................................................3
2.21 Rate of Return..................................................3
2.22 Retirement......................................................3
2.23 Salary..........................................................3
2.24 Stock...........................................................4
2.25 Stock Option Deferral...........................................4
2.26 Stock Option Deferral Amount....................................4
2.27 Unforeseen Emergency............................................4
ARTICLE III--PARTICIPATION AND DEFERRAL COMMITMENTS........................4
3.1 Eligibility and Participation...................................4
3.2 Form of Deferral................................................5
3.3 Limitations on Deferral Commitments.............................5
3.4 Commitment Limited by Termination...............................5
3.5 Modification of Deferral Commitment.............................6
(i)
ARTICLE IV--DEFERRED COMPENSATION ACCOUNTS.................................6
4.1 Accounts........................................................6
4.2 Elective Deferred Compensation..................................6
4.3 Matching Contribution...........................................6
4.4 Pension Makeup..................................................6
4.5 Allocation of Elective Deferred Compensation....................7
4.6 Determination of Accounts.......................................7
4.7 Vesting of Accounts.............................................7
4.8 Statement of Accounts...........................................7
ARTICLE V--PLAN BENEFITS...................................................7
5.1 Distributions Prior to Termination of Employment................7
5.2 Distributions Following Termination of Service..................8
5.3 Benefit Commencement............................................9
5.4 Accelerated Distribution........................................9
5.5 Deferred Payment of Benefit.....................................9
5.6 Withholding for Taxes...........................................9
5.7 Valuation and Settlement........................................9
5.8 Payment to Guardian............................................10
ARTICLE VI--BENEFICIARY DESIGNATION.......................................10
6.1 Beneficiary Designation........................................10
6.2 Changing Beneficiary...........................................10
6.3 No Beneficiary Designation.....................................10
6.4 Effect of Payment..............................................10
ARTICLE VII--ADMINISTRATION...............................................10
7.1 Committee; Duties..............................................10
7.2 Agents.........................................................11
7.3 Binding Effect of Decisions....................................11
7.4 Indemnity of Committee.........................................11
ARTICLE VIII--CLAIMS PROCEDURE............................................11
8.1 Claim..........................................................11
8.2 Denial of Claim................................................11
8.3 Review of Claim................................................12
8.4 Final Decision.................................................12
(ii)
ARTICLE IX--AMENDMENT AND TERMINATION OF PLAN.............................12
9.1 Amendment......................................................12
9.2 Employer's Right to Terminate..................................13
ARTICLE X--MISCELLANEOUS..................................................13
10.1 Unfunded Plan..................................................13
10.2 Unsecured General Creditor.....................................13
10.3 Trust Fund.....................................................14
10.4 Nonassignability...............................................14
10.5 Not a Contract of Employment...................................14
10.6 Protective Provisions..........................................14
10.7 Governing Law..................................................14
10.8 Validity.......................................................14
10.9 Notice.........................................................15
10.10 Successors.....................................................15
(iii)
RADISYS CORPORATION
DEFERRED COMPENSATION PLAN
ARTICLE I--PURPOSE AND EFFECTIVE DATE
The purpose of this Deferred Compensation Plan is to provide current
tax planning opportunities as well as supplemental funds upon the retirement or
death of certain employees and Board members of Employer. It is intended that
the Plan will aid in attracting and retaining employees of exceptional ability
by providing them with these benefits. The Plan shall be effective as of January
1, 2001.
ARTICLE II--DEFINITIONS
For the purposes of this Plan, the following terms shall have the
meanings indicated, unless the context clearly indicates otherwise:
2.1 Account
"Account" means the device used by Employer to measure and determine
the amounts to be paid to a Participant under the Plan. Separate subaccounts may
be maintained to properly reflect the Participant's balance and earnings
thereon. A Participant's Account shall not constitute or be treated as a trust
fund of any kind.
2.2 Administrative Committee
"Administrative Committee" means the committee appointed to administer
the Plan pursuant to Article VII.
2.3 Beneficiary
"Beneficiary" means the person, persons or entity entitled under
Article VI to receive any Plan benefits payable after a Participant's death.
2.4 Board
"Board" means the Board of Directors of the Company.
2.5 Bonus
"Bonus" means any incentive compensation (including Executive Incentive
Compensation, Design Win, Revenue, and MBO bonus payments) that is payable to a
Participant in addition to the Participant's Salary.
2.6 Company
"Company" means RadiSys Corporation, an Oregon corporation, or any
successor to the business thereof.
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2.7 Compensation
"Compensation" means the Salary, Bonus, and Option Gain that the
Participant earns for services rendered to the Company.
2.8 Deferral Commitment
"Deferral Commitment" means an election to defer Compensation made by a
Participant pursuant to Article III and for which a separate Participation
Agreement has been submitted by the Participant to the Administrative Committee.
2.9 Deferral Period
"Deferral Period" means a calendar year.
2.10 Determination Date
"Determination Date" means the last day of each calendar month.
2.11 Director Fees
"Director Fees" means all Board and committee meeting fees payable to a
Participant (before reduction for amounts deferred under the Plan). Director
Fees do not include expenses, reimbursements, or any form of noncash
compensation or benefits.
2.12 Disability
"Disability" means a physical or mental condition which, in the opinion
of the Administrative Committee, prevents the Participant from satisfactorily
performing the Participant's usual duties for the Company. The Administrative
Committee's decision as to Disability will be based upon medical reports and/or
other evidence satisfactory to the Administrative Committee.
2.13 Earnings Index
"Earnings Index" means a portfolio or fund selected by the
Administrative Committee from time to time to be used as an index in calculating
Rate of Return.
2.14 Elective Deferred Compensation
"Elective Deferred Compensation" means the amount of Compensation that
a Participant elects to defer pursuant to a Deferral Commitment.
2.15 Eligible Stock Option
"Eligible Stock Option" means one (1) or more nonqualified stock
option(s) under a Company stock option plan that is determined by the Committee
to be eligible for gain deferral pursuant to this Plan.
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2.16 Employer
"Employer" means the Company or any successor to the business thereof,
and any affiliated or subsidiary corporations designated by the Administrative
Committee.
2.17 Option Gain
"Option Gain" means the amount by which the fair market value of
exercised options exceeds the exercise price.
2.18 Participant
"Participant" means any eligible individual who has elected to defer
Compensation under this Plan.
2.19 Participation Agreement
"Participation Agreement" means the agreement submitted by a
Participant (including the Benefit Payment Election Form) to the Administrative
Committee prior to the beginning of the Deferral Period, with respect to a
Deferral Commitment made for such Deferral Period.
2.20 Plan
"Plan" means this RadiSys Corporation Deferred Compensation Plan, as
amended from time to time.
2.21 Rate of Return
"Rate of Return" means the rate used to determine the amount credited
monthly to a Participant's Account under Article IV. Such rate shall be
determined by the Administrative Committee based upon the net performance of the
Earnings Indices selected by the Participant.
2.22 Retirement
"Retirement" means a Participant's voluntary termination of employment
with Employer or termination of Board service on or after the Participant's
attainment of age fifty (50) or after five (5) years of service.
2.23 Salary
"Salary" means the Employee's base salary for the Plan Year. Salary
excludes any other form of compensation such as restricted stock, proceeds from
stock options or stock appreciation rights, severance payments, moving expenses,
car or other special allowance, or any other amounts included in an Eligible
Employee's taxable income that is not compensation for services. Deferral
elections shall be computed before taking into account any reduction in taxable
income by Salary reduction under Code Sections 125 or 401(k), or under this
Plan.
2.24 Stock
"Stock" means RadiSys Corporation Common Stock.
PAGE 3 - DEFERRED COMPENSATION PLAN
2.25 Stock Option Deferral
"Stock Option Deferral" means a stock-for-stock exercise of an Eligible
Stock Option having an aggregate fair market value in excess of the total stock
purchase price necessary to exercise such options.
2.26 Stock Option Deferral Amount
"Stock Option Deferral Amount" means the amount of a Participant's
Option Gains deferred in connection with an Eligible Stock Option exercise and
Stock Option Deferral in accordance with Section 4.2(c) of this Plan.
2.27 Unforeseen Emergency
"Unforeseen Emergency" means a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of the
Participant or of a dependent (as defined in Section 152(a) of the Internal
Revenue Code) of the 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, payment may not be made to the extent that such
hardship is or may be relieved:
(a) Through reimbursement or compensation by insurance or
otherwise,
(b) By liquidation of the Participant's assets, to the extent the
liquidation of such assets would not itself cause severe financial
hardship, or
(c) By cessation of deferrals under the Plan.
ARTICLE III--PARTICIPATION AND DEFERRAL COMMITMENTS
3.1 Eligibility and Participation
(a) Eligibility. Eligibility to participate in the Plan is
limited to Board members and executives who are Vice Presidents,
Directors, Director Equivalents, or as selected by the Administrative
Committee. Executives must elect to defer the maximum permissible
annual pretax deferral under the 401(k) Savings Plan before
participating in this Plan.
(b) Participation. Eligible employees and Board members may elect
to participate in the Plan with respect to any Deferral Period by
submitting a Participation Agreement to the Administrative Committee by
December 31 of the calendar year immediately preceding the Deferral
Period.
PAGE 4 - DEFERRED COMPENSATION PLAN
(c) Part-Year Participation. When an employee first becomes
eligible to defer Compensation during a Deferral Period, a
Participation Agreement must be submitted to the Administrative
Committee no later than thirty (30) days following notification to the
employee of eligibility to defer, and such Participation Agreement
shall be effective only with regard to Compensation earned or payable
following the submission of the Participation Agreement to the
Administrative Committee.
3.2 Form of Deferral
A Participant may elect Deferral Commitments in the Participation
Agreement as follows:
(a) Salary Deferral Commitment. A Salary Deferral Commitment
shall be related to the Salary payable by Employer to a Participant
during the Deferral Period. The amount to be deferred shall be stated
as a flat percentage or dollar amount.
(b) Bonus Deferral Commitment. A Bonus Deferral Commitment shall
be related to any Bonus payable to the Participant during the Deferral
Period. The amount to be deferred shall be stated as a flat percentage
or dollar amount.
(c) Stock Option Deferral Commitment. To the extent permitted by
the Committee, a Participant may elect to defer into his or her Stock
subaccount all or a portion of his or her Option Gain, subject to such
terms and conditions as the Committee may establish.
(d) Director Fees Deferral Commitment. A Director Fees Commitment
shall relate to the Director Fees payable by the Company to a
Participant during the Deferral Period. The amount to be deferred shall
be stated as a flat percentage or dollar amount.
3.3 Limitations on Deferral Commitments
The following limitations shall apply to Deferral Commitments:
(a) Minimum. The minimum Salary deferral amount shall be five
thousand dollars ($5,000) per year and, for Director Fee deferrals, the
amount shall be two thousand four hundred dollars ($2,400).
(b) Maximum. The maximum deferral amount shall be ninety percent
(90%) of Salary and one hundred percent (100%) of Bonus or Director
Fees.
(c) Changes in Minimum or Maximum. The Administrative Committee
may change the minimum or maximum deferral amounts from time to time by
giving written notice to all Participants. No such change may affect a
Deferral Commitment made prior to the Administrative Committee's
action.
3.4 Commitment Limited by Termination
If a Participant terminates employment with Employer prior to the end
of the Deferral Period, the Deferral Period and the Deferral Commitment shall
end at the date of termination.
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3.5 Modification of Deferral Commitment
Participants may change, suspend or resume their Deferral Commitments
in accordance with rules established by the Administrative Committee, provided
that the modification applies only to a Salary, Bonus, Director Fee or Stock
Option Deferral payment that is not yet payable.
ARTICLE IV--DEFERRED COMPENSATION ACCOUNTS
4.1 Accounts
For record keeping purposes only, an Account shall be maintained for
each Participant. Separate subaccounts shall be maintained to the extent
necessary to properly reflect the Participant's election of Earnings Indices and
total vested or nonvested Account balances. The Account shall be a bookkeeping
device utilized for the sole purpose of determining the benefits payable under
the Plan and shall not constitute a separate fund of assets.
4.2 Elective Deferred Compensation
(a) A Participant's Elective Deferred Compensation shall be
credited to the Participant's Account at the same time the
corresponding nondeferred portion of the Compensation becomes or would
have become payable. Any withholding of taxes or other amounts with
respect to deferred Compensation which is required by state, federal or
local law shall be withheld from the Participant's nondeferred
Compensation to the maximum extent possible with any excess reducing
the amount to be credited to the Participant's Account.
(b) As soon as practicable after Stock would have otherwise been
issued to the Participant in connection with the exercise of an
Eligible Stock Option, the Committee shall credit a Stock subaccount of
the Participant's Account with shares of Phantom Stock with a value
equivalent to the Option Gain which has been deferred by the
Participant in accordance with the Participant's election; that is, the
portion of the Participant's Option Gain that the Participant has
elected to defer shall be credited to the Stock subaccount of the
Participant's Account.
4.3 Matching Contribution
If a Participant defers the maximum elective percentage into the
qualified 401(k) Savings Plan, the Employer shall credit a matching contribution
to the Participant's Account equal to any matching contribution which would have
been credited to the Participant's 401(k) Savings Plan but for the Participant's
participation in this Plan.
4.4 Pension Makeup
The Employer shall restore an amount equal to any reduction in a
Participant's Qualified Pension Plan benefits resulting from deferrals under
this Plan to the extent that the Qualified Pension Plan benefits are not
restored by any other plan or agreement provided by the Employer.
PAGE 6 - DEFERRED COMPENSATION PLAN
4.5 Allocation of Elective Deferred Compensation
(a) At the time a Participant completes a Deferral Commitment for
a Deferral Period, the Participant shall also select the Investment
Index or Indices in which the Participant wishes to have the deferrals
deemed invested. The Participant may select any combination of
Investment Indices as long as at least five percent (5%), in whole
percentages, is credited to each of the Investment Indices selected.
(b) A Participant may change the amounts allocated to the
Investment Indices on the first day of each calendar quarter, provided
that the Participant submitted notice of the change at least ten (10)
days before the first day of the calendar quarter. The change may apply
to prospective deferrals only or may include current account balances.
However, any amount allocated to the Participant's Stock subaccount
from Salary, Bonus and Director Fee Deferrals or a Stock Option
Deferral may not be reallocated.
(c) Changes in Notice and Frequency. The Administrative Committee
may change the notice requirement and frequency by which Participants
can reallocate their accounts from time to time by giving written
notice to all Participants.
4.6 Determination of Accounts
Each Participant's Account as of each Determination Date shall consist
of the balance of the Participant's Account as of the immediately preceding
Determination Date, plus the Participant's Elective Deferred Compensation
credited during the period, plus earnings, minus the amount of any distributions
made since the immediately preceding Determination Date.
4.7 Vesting of Accounts
Each Participant shall be one hundred percent (100%) vested at all
times in the Participant's Elective Deferred Compensation and any earnings
thereon. Any matching or makeup contributions under Sections 4.3 and 4.4 shall
vest pursuant to the vesting schedule of the underlying qualified plan.
4.8 Statement of Accounts
The Administrative Committee shall give to each Participant a statement
setting forth the balances in the Participant's Account on a quarterly basis and
at such other times as may be determined by the Administrative Committee.
ARTICLE V--PLAN BENEFITS
5.1 Distributions Prior to Termination of Employment
A Participant's Account may be distributed to the Participant prior to
termination of employment as follows:
(a) Scheduled Early Withdrawals. A Participant may elect in a
Participation Agreement to withdraw all or any portion of the amount
deferred (and earnings thereon) pursuant to that Participation
Agreement in from two (2) to five (5) substantially equal annual
installments or a single lump sum commencing the first January 1 and on
each subsequent January 1 follow
PAGE 7 - DEFERRED COMPENSATION PLAN
-ing the date specified in the election. Such date shall not be sooner
than three (3) years after the date the Deferral Period commences.
(b) Hardship Withdrawals. Upon a finding that a Participant has
suffered an Unforeseen Emergency, the Administrative Committee may, in
its sole discretion, make distributions from the Participant's Account.
The amount of such a withdrawal shall be limited to the amount the
Administrative Committee determines to be reasonably necessary to meet
the Participant's needs resulting from the Unforeseen Emergency. If any
payment is made due to Unforeseen Emergency, any existing Deferral
Commitment shall be null and void and the Participant shall not be
permitted to make any Deferral Commitment for twelve (12) months. Any
hardship withdrawal distribution shall be payable in a single lump sum
within thirty (30) days after the Administrative Committee approves
such payment.
5.2 Distributions Following Termination of Service
(a) Retirement or Disability Benefit.
(i) Benefit Amount. If a Participant terminates service
with Employer due to Retirement or Disability, Employer shall pay
to the Participant a benefit equal to the balance in the
Participant's Account.
(ii) Form of Benefit. Subject to Section 5.2(a)(iii),
benefits under this Section 5.2(a) shall be paid in the form
selected by the Participant in the Participation Agreement.
Optional forms of payment include a lump-sum payment or
substantially equal annual installments of the Account amortized
over a period of up to fifteen (15) years. The initial payment
shall be within sixty (60) days of termination and all subsequent
payments, if any, shall be in January. As of each January 1, the
amount to be distributed in installment payments for that year
shall be determined by dividing the Participant's Account balance
as of the preceding December 31 by the remainder of the
installment periods.
(iii) Small Accounts. Notwithstanding Section 5.2(a)(ii),
if a Participant's Account is less than fifty thousand dollars
($50,000) on the Retirement date, the Administrative Committee,
in its sole discretion, may pay the benefit under Section 5.2(a)
in a lump sum.
(iv) Change in Form of Payment. Notwithstanding the above,
a Participant may elect to file a change of payment designation
which shall supersede the prior form of payment designation in
the Participation Agreement for any one (1) or more Deferral
Periods. If the Participant's most recent change of payment
designation has not been filed thirteen (13) calendar months
prior to the year of termination, the prior election shall be
used to determine the form of payment.
(b) Death Benefit.
(i) Preretirement. If a Participant terminates employment
with Employer due to death, Employer shall pay to the
Participant's Beneficiary a lump-sum benefit equal to the vested
balance in the Participant's Account.
PAGE 8 - DEFERRED COMPENSATION PLAN
(ii) Postretirement. If a Participant dies following the
Participant's Retirement, Employer shall continue to pay any
remaining benefit payments to the Participant's Beneficiary in
the form previously elected by the Participant for Retirement
benefits.
(c) Termination Benefit. If a Participant terminates employment
with Employer for any reason other than Retirement, Disability, or
death, Employer shall pay to the Participant a lump-sum benefit equal
to the balance in the Participant's Account.
(d) All balances in a Participant's Stock subaccount shall be
paid in Stock. All other Participant subaccounts shall be paid in cash.
5.3 Benefit Commencement
Benefits shall commence as soon as practical after termination but in
no case more than sixty (60) days after termination.
5.4 Accelerated Distribution
Notwithstanding any other provision of the Plan, at any time a
Participant shall be entitled to receive, upon written request to the
Administrative Committee, a lump-sum distribution equal to ninety percent (90%)
of the Account balance as of the Determination Date immediately preceding the
date on which the Administrative Committee receives the written request. The
remaining balance shall be forfeited by the Participant. The amount payable
under this section shall be paid in a lump sum within thirty (30) days following
the receipt of the notice by the Administrative Committee from the Participant.
Such Participant shall not be eligible to participate in the Plan for a period
of one (1) year from the date of distribution.
5.5 Deferred Payment of Benefit
If part of a Participant's compensation is not deductible under IRC
Section 162(m), then RadiSys may require the Participant to defer payment of
benefits under this Article to avoid the limitation set forth in Section 162(m).
Any deferred benefits under this Section shall be distributed to the Participant
in the first calendar year such amounts would not exceed the limitation as set
out in IRC Section 162(m).
5.6 Withholding for Taxes
To the extent required by the law in effect at the time payments are
made, Employer shall withhold from payments made hereunder any taxes required to
be withheld by the federal or any state or local government, including any
amounts which the Employer determines are reasonably necessary to pay any
generation-skipping transfer tax which is or may become due. A beneficiary,
however, may elect not to have withholding of federal income tax pursuant to
Section 3405 of the Internal Revenue Code, or any successor provision thereto.
5.7 Valuation and Settlement
The amount of a lump-sum payment and the initial installment payment
shall be based on the value of the Participant's Account on the Determination
Date immediately preceding the lump-sum payment or commencement of installment
payments.
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5.8 Payment to Guardian
The Administrative Committee may direct payment to the duly appointed
guardian, conservator, or other similar legal representative of a Participant or
Beneficiary to whom payment is due. In the absence of such a legal
representative, the Administrative Committee may, in it sole and absolute
discretion, make payment to a person having the care and custody of a minor,
incompetent or person incapable of handling the disposition of property upon
proof satisfactory to the Administrative Committee of incompetency, minority, or
incapacity. Such distribution shall completely discharge the Administrative
Committee from all liability with respect to such benefit.
ARTICLE VI--BENEFICIARY DESIGNATION
6.1 Beneficiary Designation
Each Participant shall have the right, at any time, to designate a
Beneficiary (both primary as well as contingent) to whom benefits under this
Plan shall be paid if a Participant dies prior to complete distribution to the
Participant of the benefits due under the Plan. Each Beneficiary designation
shall be in a written form prescribed by the Administrative Committee, and will
be effective only when filed with the Administrative Committee during the
Participant's lifetime.
6.2 Changing Beneficiary
Any Beneficiary designation may be changed by a Participant without the
consent of the previously named Beneficiary by the filing of a new Beneficiary
designation with the Administrative Committee. The filing of a new Beneficiary
designation shall cancel all Beneficiary designations previously filed. If a
Participant's Compensation is community property, any Beneficiary Designation
shall be valid or effective only as permitted under applicable law.
6.3 No Beneficiary Designation
In the absence of an effective Beneficiary Designation, or if all
designated Beneficiaries predecease the Participant or die prior to complete
distribution of the Participant's benefits, the Participant's designated
Beneficiary shall be deemed to be the Participant's estate.
6.4 Effect of Payment
Payment to the Beneficiary shall completely discharge Employer's
obligations under this Plan.
ARTICLE VII--ADMINISTRATION
7.1 Committee; Duties
The Plan shall be administered by an Administrative Committee
consisting of three (3) members as may be appointed from time to time by the
Board. The Administrative Committee shall have the authority to interpret and
enforce all appropriate rules and regulations for the administration of the Plan
and decide or resolve any and all questions, including determination of
eligibility and interpretations of the Plan, as may arise in such
administration. A majority vote of the Administrative Committee members in
office at the time of the vote shall control any decision. The required majority
action
PAGE 10 - DEFERRED COMPENSATION PLAN
may be taken either by a vote at a meeting or without a meeting by a
signed memorandum. Meetings may be conducted by telephone conference call. The
Administrative Committee may, by majority action, delegate to one or more of its
members the authority to execute and deliver in the name of the Administrative
Committee all communications and documents which the Administrative Committee is
required or authorized to provide under this Plan. Any party shall accept and
rely upon any document executed in the name of the Administrative Committee.
Members of the Administrative Committee may be Participants under this Plan.
7.2 Agents
The Administrative Committee may, from time to time, employ agents and
delegate to them such administrative duties as it sees fit, and may from time to
time consult with counsel who may be counsel to the Company.
7.3 Binding Effect of Decisions
The decision or action of the Administrative Committee with respect to
any question arising out of or in connection with the administration,
interpretation and application of the Plan and the rules and regulations
promulgated hereunder shall be final, conclusive and binding upon all persons
having any interest in the Plan.
7.4 Indemnity of Committee
The Company shall indemnify and hold harmless the members of the
Administrative Committee against any and all claims, loss, damage, expense or
liability arising from any action or failure to act with respect to this Plan on
account of such person's service on the Administrative Committee, except in the
case of gross negligence or willful misconduct.
ARTICLE VIII--CLAIMS PROCEDURE
8.1 Claim
Any person claiming a benefit, requesting an interpretation or ruling
under the Plan, or requesting information under the Plan shall present the
request in writing to the Administrative Committee which shall respond in
writing within thirty (30) days.
8.2 Denial of Claim
If the claim or request is denied, the written notice of denial shall
state:
(a) The reason for denial, with specific reference to the Plan
provisions on which the denial is based.
(b) A description of any additional material or information
required and an explanation of why it is necessary.
(c) An explanation of the Plan's claim review procedure.
PAGE 11 - DEFERRED COMPENSATION PLAN
8.3 Review of Claim
(a) Any person whose claim or request is denied or who has not
received a response within thirty (30) days may request review by
notice given in writing to the Administrative Committee. The claim or
request shall be reviewed by the Administrative Committee who may, but
shall not be required to, grant the claimant a hearing. On review, the
claimant may have representation, examine pertinent documents, and
submit issues and comments in writing.
(b) Such notice shall be made within the lesser of ninety (90)
days of notice of denial or one hundred twenty (120) days of the
original written claim.
8.4 Final Decision
The decision on review shall normally be made within sixty (60) days.
If an extension of time is required for a hearing or other special
circumstances, the claimant shall be notified and the time limit shall be one
hundred twenty (120) days. The decision shall be in writing and shall state the
reason and the relevant plan provisions. All decisions on review shall be final
and bind all parties concerned.
ARTICLE IX--AMENDMENT AND TERMINATION OF PLAN
9.1 Amendment
(a) The Company may amend the Plan at any time and from time to
time by written instrument. Except as provided in (b) below, the power
to amend may be executed only by the Board.
(b) The Administrative Committee may adopt any technical,
clerical, conforming or clarifying amendment or other change, provided:
(i) The Administrative Committee deems it necessary or
advisable to:
(A) Correct any defect, supply any omission or
reconcile any inconsistency in order to carry out the
intent and purposes of the Plan;
(B) Maintain the Plan's status as a "top-hat" plan
for purposes of ERISA; or
(C) Facilitate the administration of the Plan;
(ii) The amendment or change does not, without the consent
of the Board, materially increase the cost to the Employer of
maintaining the Plan; and
(iii) Any amendment adopted by the Administrative
Committee shall be in writing, signed by a member of the
Committee and promptly reported to the Board.
(c) To the extent permitted under subsection (e) below,
amendments may have an immediate, prospective or retroactive effective
date.
(d) Amendments do not require the consent of any Participant or
Beneficiary.
PAGE 12 - DEFERRED COMPENSATION PLAN
(e) Amendments are subject to the following limitations:
(i) Preservation of Account Balance. No amendment shall
reduce the amount credited or to be credited to any Account as of
the date notice of the amendment is given to Participants.
(ii) Changes in Earnings Rate. If the Plan is amended so
that the Earnings Index is not used to calculate the Rate of
Return, the rate of earnings to be credited to the Participant's
Account shall not be less than the monthly equivalent of the
average nominal annual yield on three (3) month Treasury bills
for the applicable Determination Period.
9.2 Employer's Right to Terminate
The Board may at any time partially or completely terminate the Plan
if, in its judgment, the tax, accounting or other effects of the continuance of
the Plan, or potential payments thereunder would not be in the best interests of
Employer.
(a) Partial Termination. The Board may partially terminate the
Plan by instructing the Administrative Committee not to accept any
additional Deferral Commitments. If such a partial termination occurs,
the Plan shall continue to operate and be effective with regard to
Deferral Commitments entered into prior to the effective date of such
partial termination.
(b) Complete Termination. The Board may completely terminate the
Plan by instructing the Administrative Committee not to accept any
additional Deferral Commitments, and by terminating all ongoing
Deferral Commitments. If such a complete termination occurs, the Plan
shall cease to operate and Employer shall pay out each Account. Payment
shall be made in the form designated by the Participant at the time of
deferral.
Payments shall commence within sixty (60) days after the Board
terminates the Plan and earnings shall continue to be credited on the unpaid
Account balance.
ARTICLE X--MISCELLANEOUS
10.1 Unfunded Plan
This plan is an unfunded plan maintained primarily to provide deferred
compensation benefits for a select group of "management or highly-compensated
employees" within the meaning of Sections 201, 301 and 401 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and therefore is
exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA.
10.2 Unsecured General Creditor
Participants and Beneficiaries shall be unsecured general creditors,
with no secured or preferential right to any assets of Employer or any other
party for payment of benefits under this Plan. Any life insurance policies,
annuity contracts or other property purchased by Employer in connection with
this Plan shall remain its general, unpledged and unrestricted assets.
Employer's obligation under the Plan shall be an unfunded and unsecured promise
to pay money in the future.
PAGE 13 - DEFERRED COMPENSATION PLAN
10.3 Trust Fund
At its discretion, the Employer may establish one (1) or more trusts,
with such trustees as the Employer may approve, for the purpose of providing for
the payment of benefits owed under the Plan. Although such a trust shall be
irrevocable, its assets shall be held for payment of all the Company's general
creditors in the event of insolvency or bankruptcy. To the extent any benefits
provided under the Plan are paid from any such trust, Employer shall have no
further obligation to pay them. If not paid from the trust, such benefits shall
remain the obligation of Employer.
10.4 Nonassignability
Neither a Participant nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise
encumber, transfer, hypothecate or convey in advance of actual receipt the
amounts, if any, payable hereunder, or any part thereof, which are, and all
rights to which are, expressly declared to be unassignable and nontransferable.
No part of the amounts payable shall, prior to actual payment, be subject to
seizure or sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or any other person, nor be
transferable by operation of law in the event of a Participant's or any other
person's bankruptcy or insolvency.
10.5 Not a Contract of Employment
This Plan shall not constitute a contract of employment between
Employer and the Participant. Nothing in this Plan shall give a Participant the
right to be retained in the service of Employer or to interfere with the right
of Employer to discipline or discharge a Participant at any time.
10.6 Protective Provisions
A Participant will cooperate with Employer by furnishing any and all
information requested by Employer in order to facilitate the payment of benefits
hereunder, and by taking such physical examinations as Employer may deem
necessary and taking such other action as may be requested by Employer.
10.7 Governing Law
The provisions of this Plan shall be construed and interpreted
according to the laws of the State of Oregon, except as preempted by federal
law.
10.8 Validity
In case any provision of this Plan shall be held illegal or invalid for
any reason, said illegality or invalidity shall not affect the remaining parts
hereof, but this Plan shall be construed and enforced as if such illegal and
invalid provision had never been inserted herein.
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10.9 Notice
Any notice required or permitted under the Plan shall be sufficient if
in writing and hand delivered or sent by registered or certified mail. Such
notice shall be deemed as given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification. Mailed notice to the Administrative Committee
shall be directed to the Company's address. Mailed notice to a Participant or
Beneficiary shall be directed to the individual's last known address in
Employer's records.
10.10 Successors
The provisions of this Plan shall bind and inure to the benefit of
Employer and its successors and assigns. The term successors as used herein
shall include any corporate or other business entity which shall, whether by
merger, consolidation, purchase or otherwise acquire all or substantially all of
the business and assets of Employer, and successors of any such corporation or
other business entity.
RADISYS CORPORATION
By:
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Its:
Dated:
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