EXHIBIT 10.2
THE EXECUTIVE NONQUALIFIED EXCESS PLAN
PLAN DOCUMENT
THE EXECUTIVE NONQUALIFIED EXCESS PLAN
Section 1. Purpose:
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By execution of the Adoption Agreement, the Employer has adopted the
Plan set forth herein, and in the Adoption Agreement, to provide a means by
which certain management Employees or Independent Contractors of the Employer
may elect to defer receipt of current Compensation from the Employer in order to
provide retirement and other benefits on behalf of such Employees or Independent
Contractors of the Employer, as selected in the Adoption Agreement. The Plan is
intended to be a nonqualified deferred compensation plan that complies with the
provisions of Section 409A of the Internal Revenue Code (the "Code"). The Plan
is also intended to be an unfunded plan maintained primarily for the purpose of
providing deferred compensation benefits for a select group of management or
highly compensated employees under Sections 201(2), 301(a)(3) and 401(a)(l) of
the Employee Retirement Income Security Act of 1974 ("ERISA") and independent
contractors. Notwithstanding any other provision of this Plan, this Plan shall
be interpreted, operated and administered in a manner consistent with these
intentions.
Section 2. Definitions:
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As used in the Plan, including this Section 2, references to one gender
shall include the other, unless otherwise indicated by the context:
2.1 "Active Participant" means, with respect to any day or date, a
Participant who is in Service on such day or date; provided, that a Participant
shall cease to be an Active Participant (i) immediately upon a determination by
the Committee that the Participant has ceased to be an Employee or Independent
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Contractor, or (ii) at the end of the Plan Year that the Committee determines
the Participant no longer meets the eligibility requirements of the Plan.
2.2 "Adoption Agreement" means the written agreement pursuant to which
the Employer adopts the Plan. The Adoption Agreement is a part of the Plan as
applied to the Employer.
2.3 "Beneficiary" means the person, persons, entity or entities
designated or determined pursuant to the provisions of Section 13 of the Plan.
2.4 "Board" means the Board of Directors of the Company, if the Company
is a corporation. If the Company is not a corporation, "Board" shall mean the
Company.
2.5 "Change in Control Event" means an event described in Section
409A(a)(2)(A)(v) of the Code (or any successor provision thereto) and the
regulations thereunder.
2.6 "Committee" means the persons or entity designated in the Adoption
Agreement to administer the Plan. If the Committee designated in the Adoption
Agreement is unable to serve, the Employer shall satisfy the duties of the
Committee provided for in Section 9.
2.7 "Company" means the company designated in the Adoption Agreement as
such.
2.8 "Compensation" shall have the meaning designated in the Adoption
Agreement.
2.9 "Crediting Date" means the date designated in the Adoption
Agreement for crediting the amount of any Participant Deferral Credits to the
Deferred Compensation Account of a Participant. Employer Credits may be credited
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to the Deferred Compensation Account of a Participant on any day that securities
are traded on a national securities exchange.
2.10 "Deferred Compensation Account" means the account maintained with
respect to each Participant under the Plan. The Deferred Compensation Account
shall be credited with Participant Deferral Credits and Employer Credits,
credited or debited for deemed investment gains or losses, and adjusted for
payments in accordance with the rules and elections in effect under Section 8.
The Deferred Compensation Account of a Participant shall include any In-Service
or Education Account of the Participant, if applicable.
2.11 "Disabled" means Disabled within the meaning of Section 409A of
the Code and the regulations thereunder. Generally, this means that the
Participant is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not
less than 12 months, or is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than three months under an
accident and health plan covering Employees of the Employer.
2.12 "Education Account" is an In-Service Account which will be used by
the Participant for educational purposes.
2.13 "Effective Date" shall be the date designated in the Adoption
Agreement.
2.14 "Employee" means an individual in the Service of the Employer if
the relationship between the individual and the Employer is the legal
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relationship of employer and employee and if the individual is a highly
compensated or management employee of the Employer. An individual shall cease to
be an Employee upon the Employee's separation from Service.
2.15 "Employer" means the Company, as identified in the Adoption
Agreement, and any Participating Employer which adopts this Plan. An Employer
may be a corporation, a limited liability company, a partnership or sole
proprietorship.
2.16 "Employer Credits" means the amounts credited to the Participant's
Deferred Compensation Account by the Employer pursuant to the provisions of
Section 4.2.
2.17 "Grandfathered Amounts" means, if applicable, the amounts that
were deferred under the Plan and were earned and vested within the meaning of
Section 409A of the Code and regulations thereunder as of December 31, 2004.
Grandfathered Amounts shall be subject to the terms designated in the Adoption
Agreement.
2.18 "Independent Contractor" means an individual in the Service of the
Employer if the relationship between the individual and the Employer is not the
legal relationship of employer and employee. An individual shall cease to be an
Independent Contractor upon the termination of the Independent Contractor's
Service. An Independent Contractor shall include a director of the Employer who
is not an Employee.
2.19 "In-Service Account" means a separate account to be kept for each
Participant that has elected to take in-service distributions as described in
Section 5.4. The In-Service Account shall be adjusted in the same manner and at
the same time as the Deferred Compensation Account under Section 8 and in
accordance with the rules and elections in effect under Section 8.
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2.20 "Normal Retirement Age" of a Participant means the age designated
in the Adoption Agreement.
2.21 "Participant" means with respect to any Plan Year an Employee or
Independent Contractor who has been designated by the Committee as a Participant
and who has entered the Plan or who has a Deferred Compensation Account under
the Plan.
2.22 "Participant Deferral Credits" means the amounts credited to the
Participant's Deferred Compensation Account by the Employer pursuant to the
provisions of Section 4.1.
2.23 "Participating Employer" means any trade or business (whether or
not incorporated) which adopts this Plan with the consent of the Company
identified in the Adoption Agreement.
2.24 "Participation Agreement" means a written agreement entered into
between a Participant and the Employer pursuant to the provisions of Section 4.1
2.25 "Performance-Based Compensation" means compensation where the
amount of, or entitlement to, the compensation is contingent on the satisfaction
of preestablished organizational or individual performance criteria relating to
a performance period of at least twelve months. Organizational or individual
performance criteria are considered preestablished if established in writing
within 90 days after the commencement of the period of service to which the
criteria relates, provided that the outcome is substantially uncertain at the
time the criteria are established. Performance-based compensation may include
payments based upon subjective performance criteria as provided in regulations
and administrative guidance promulgated under Section 409A of the Code.
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2.26 "Plan" means The Executive Nonqualified Excess Plan, as herein set
out and as set out in the Adoption Agreement, or as duly amended. The name of
the Plan as applied to the Employer shall be designated in the Adoption
Agreement.
2.27 "Plan-Approved Domestic Relations Order" shall mean a judgment,
decree, or order (including the approval of a settlement agreement) which is:
2.27.1 Issued pursuant to a State's domestic relations law;
2.27.2 Relates to the provision of child support, alimony payments or
marital property rights to a Spouse, former Spouse, child or other dependent of
the Participant;
2.27.3 Creates or recognizes the right of a Spouse, former Spouse,
child or other dependent of the Participant to receive all or a portion of the
Participant's benefits under the Plan;
2.27.4 Requires payment to such person of their interest in the
Participant's benefits in an immediate lump payment; and
2.27.5 Meets such other requirements established by the Committee.
2.28 "Plan Year" means the twelve-month period ending on the last day
of the month designated in the Adoption Agreement; provided that the initial
Plan Year may have fewer than twelve months.
2.29 "Qualifying Distribution Event" means (i) the Separation from
Service of the Participant, (ii) the date the Participant becomes Disabled,
(iii) the death of the Participant, (iv) the time specified by the Participant
for an In-Service or Education Distribution, (v) a Change in Control Event, or
(vi) an Unforeseeable Emergency, each to the extent provided in Section 5.
2.30 "Seniority Date" shall have the meaning designated in the
Adoption Agreement.
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2.31 "Separation from Service" or "Separates from Service" means a
"separation from service" within the meaning of Section 409A of the Code.
2.32 "Service" means employment by the Employer as an Employee. For
purposes of the Plan, the employment relationship is treated as continuing
intact while the Employee is on military leave, sick leave, or other bona fide
leave of absence if the period of such leave does not exceed six months, or if
longer, so long as the Employee's right to reemployment is provided either by
statute or contract. If the Participant is an Independent Contractor, "Service"
shall mean the period during which the contractual relationship exists between
the Employer and the Participant. The contractual relationship is not terminated
if the Participant anticipates a renewal of the contract or becomes an Employee.
2.33 "Service Bonus" means any bonus paid to a Participant by the
Employer which is not Performance-Based Compensation.
2.34 "Specified Employee" means an employee who meets the requirements
for key employee treatment under Section 416(i)(l)(A)(i), (ii) or (iii) of the
Code (applied in accordance with the regulations thereunder and without regard
to Section 416(i)(5) of the Code) at any time during the twelve month period
ending on December 31 of each year (the "identification date"). Unless binding
corporate action is taken to establish different rules for determining Specified
Employees for all plans of the Company and its controlled group members that are
subject to Section 409A of the Code, the foregoing rules and the other default
rules under the regulations of Section 409A of the Code shall apply. If the
person is a key employee as of any identification date, the person is treated as
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a Specified Employee for the twelve-month period beginning on the first day of
the fourth month following the identification date.
2.35 "Spouse" or "Surviving Spouse" means, except as otherwise provided
in the Plan, a person who is the legally married spouse or surviving spouse of a
Participant.
2.36 "Unforeseeable Emergency" means an "unforeseeable emergency"
within the meaning of Section 409A of the Code.
2.37 "Years of Service" means each Plan Year of Service completed by
the Participant. For vesting purposes, Years of Service shall be calculated from
the date designated in the Adoption Agreement and Service shall be based on
service with the Company and all Participating Employers.
Section 3. Participation:
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The Committee in its discretion shall designate each Employee or
Independent Contractor who is eligible to participate in the Plan. A Participant
who separates from Service with the Employer and who later returns to Service
will not be an Active Participant under the Plan except upon satisfaction of
such terms and conditions as the Committee shall establish upon the
Participant's return to Service, whether or not the Participant shall have a
balance remaining in the Deferred Compensation Account under the Plan on the
date of the return to Service.
Section 4. Credits to Deferred Compensation Account:
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4.1 Participant Deferral Credits. To the extent provided in the
Adoption Agreement, each Active Participant may elect, by entering into a
Participation Agreement with the Employer, to defer the receipt of Compensation
from the Employer by a dollar amount or percentage specified in the
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Participation Agreement. The amount of Compensation the Participant elects to
defer, the Participant Deferral Credit, shall be credited by the Employer to the
Deferred Compensation Account maintained for the Participant pursuant to Section
8. The following special provisions shall apply with respect to the Participant
Deferral Credits of a Participant:
4.1.1 The Employer shall credit to the Participant's Deferred
Compensation Account on each Crediting Date an amount equal to the total
Participant Deferral Credit for the period ending on such Crediting Date.
4.1.2 An election pursuant to this Section 4.1 shall be made by the
Participant by executing and delivering a Participation Agreement to the
Committee. Except as otherwise provided in this Section 4.1, the Participation
Agreement shall become effective with respect to such Participant as of the
first day of January following the date such Participation Agreement is received
by the Committee. A Participant's election may be changed at any time prior to
the last permissible date for making the election as permitted in this Section
4.1, and shall thereafter be irrevocable. The election of a Participant shall
continue in effect for subsequent years until modified by the Participant as
permitted in this Section 4.1.
4.1.3 A Participant may execute and deliver a Participation Agreement
to the Committee within 30 days after the date the Participant first becomes
eligible to participate in the Plan to be effective as of the first payroll
period next following the date the Participation Agreement is fully executed.
Whether a Participant is treated as newly eligible for participation under this
Section shall be determined in accordance with Section 409A of the Code and the
regulations thereunder, including (i) rules that treat all elective deferral
account balance plans as one plan, and (ii) rules that treat a previously
eligible employee as newly eligible if his benefits had been previously
distributed or if he has been ineligible for 24 months. For Compensation that is
earned based upon a specified performance period (for example, an annual bonus),
where a deferral election is made under this Section but after the beginning of
the performance period, the election will only apply to the portion of the
Compensation equal to the total amount of the Compensation for the service
period multiplied by the ratio of the number of days remaining in the
performance period after the election over the total number of days in the
performance period.
4.1.4 A Participant may unilaterally modify a Participation Agreement
(either to terminate, increase or decrease the portion of his future
Compensation which is subject to deferral within the percentage limits set forth
in Section 4.1 of the Adoption Agreement) by providing a written modification of
the Participation Agreement to the Committee. The modification shall become
effective as of the first day of January following the date such written
modification is received by the Committee.
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4.1.5 If the Participant performed services continuously from the later
of the beginning of the performance period or the date upon which the
performance criteria are established through the date upon which the Participant
makes an initial deferral election, a Participation Agreement relating to the
deferral of Performance-Based Compensation may be executed and delivered to the
Committee no later than the date which is 6 months prior to the end of the
performance period, provided that in no event may an election to defer
Performance-Based Compensation be made after such Compensation has become
readily ascertainable.
4.1.6 If the Employer has a fiscal year other than the calendar year,
Compensation relating to Service in the fiscal year of the Employer (such as a
bonus based on the fiscal year of the Employer), of which no amount is paid or
payable during the fiscal year, may be deferred at the Participant's election if
the election to defer is made not later than the close of the Employer's fiscal
year next preceding the first fiscal year in which the Participant performs any
services for which such Compensation is payable.
4.1.7 Compensation payable after the last day of the Participant's
taxable year solely for services provided during the final payroll period
containing the last day of the Participant's taxable year (i.e., December 31) is
treated for purposes of this Section 4.1 as Compensation for services performed
in the subsequent taxable year.
4.1.8 The Committee may from time to time establish policies or rules
consistent with the requirements of Section 409A of the Code to govern the
manner in which Participant Deferral Credits may be made.
4.1.9 If a Participant becomes Disabled or applies for and is eligible
for a distribution on account of an Unforeseeable Emergency during a Plan Year,
his deferral election for such Plan Year shall be cancelled.
4.2 Employer Credits. If designated by the Employer in the Adoption
Agreement, the Employer shall cause the Committee to credit to the Deferred
Compensation Account of each Active Participant an Employer Credit as determined
in accordance with the Adoption Agreement. A Participant must make distribution
elections with respect to any Employer Credits credited to his Deferred
Compensation Account by the deadline that would apply under Section 4.1 for
distribution elections with respect to Participant Deferral Credits credited at
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the same time, on a Participation Agreement that is timely executed and
delivered to the Committee pursuant to Section 4.1.
4.3 Deferred Compensation Account. All Participant Deferral Credits and
Employer Credits shall be credited to the Deferred Compensation Account of the
Participant as provided in Section 8.
Section 5. Qualifying Distribution Events:
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5.1 Separation from Service. If the Participant Separates from Service
with the Employer, the vested balance in the Deferred Compensation Account shall
be paid to the Participant by the Employer as provided in Section 7.
Notwithstanding the foregoing, no distribution shall be made earlier than six
months after the date of Separation from Service (or, if earlier, the date of
death) with respect to a Participant who as of the date of Separation from
Service is a Specified Employee of a corporation the stock in which is traded on
an established securities market or otherwise. Any payments to which a Specified
Employee would be entitled during the first six months following the date of
Separation from Service shall be accumulated and paid on the first day of the
seventh month following the date of Separation from Service.
5.2 Disability. If the Employer designates in the Adoption Agreement
that distributions are permitted under the Plan when a Participant becomes
Disabled, and the Participant becomes Disabled while in Service, the vested
balance in the Deferred Compensation Account shall be paid to the Participant by
the Employer as provided in Section 7.
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5.3 Death. If the Participant dies while in Service, the Employer shall
pay a benefit to the Participant's Beneficiary in the amount designated in the
Adoption Agreement. Payment of such benefit shall be made by the Employer as
provided in Section 7.
5.4 In-Service or Education Distributions. If the Employer designates
in the Adoption Agreement that in-service or education distributions are
permitted under the Plan, a Participant may designate in the Participation
Agreement to have a specified amount credited to the Participant's In-Service or
Education Account for in-service or education distributions at the date
specified by the Participant. In no event may an in-service or education
distribution of an amount be made before the date that is two years after the
first day of the year in which such amount was credited to the In-Service or
Education Account. Notwithstanding the foregoing, if a Participant incurs a
Qualifying Distribution Event prior to the date on which the entire balance in
the In-Service or Education Account has been distributed, then the balance in
the In-Service or Education Account on the date of the Qualifying Distribution
Event shall be paid as provided under Section 7.1 for payments on such
Qualifying Distribution Event.
5.5 Change in Control Event. If the Employer designates in the
Adoption Agreement that distributions are permitted under the Plan upon the
occurrence of a Change in Control Event, the Participant may designate in the
Participation Agreement to have the vested balance in the Deferred Compensation
Account paid to the Participant upon a Change in Control Event by the Employer
as provided in Section 7.
5.6 Unforeseeable Emergency. If the Employer designates in the
Adoption Agreement that distributions are permitted under the Plan upon the
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occurrence of an Unforeseeable Emergency event, a distribution from the Deferred
Compensation Account may be made to a Participant in the event of an
Unforeseeable Emergency, subject to the following provisions:
5.6.1 A Participant may, at any time prior to his Separation from
Service for any reason, make application to the Committee to receive a
distribution in a lump sum of all or a portion of the vested balance in the
Deferred Compensation Account (determined as of the date the distribution, if
any, is made under this Section 5.6) because of an Unforeseeable Emergency. A
distribution because of an Unforeseeable Emergency shall not exceed the amount
required to satisfy the Unforeseeable Emergency plus amounts necessary to pay
taxes reasonably anticipated as a result of such distribution, after taking into
account the extent to which the Unforeseeable Emergency may be relieved through
reimbursement or compensation by insurance or otherwise or by liquidation of the
Participant's assets (to the extent the liquidation of such assets would not
itself cause severe financial hardship) or by stopping current deferrals under
the Plan pursuant to Section 4.1.9.
5.6.2 The Participant's request for a distribution on account of
Unforeseeable Emergency must be made in writing to the Committee. The request
must specify the nature of the financial hardship, the total amount requested to
be distributed from the Deferred Compensation Account, and the total amount of
the actual expense incurred or to be incurred on account of the Unforeseeable
Emergency.
5.6.3 If a distribution under this Section 5.6 is approved by the
Committee, such distribution will be made as soon as practicable following the
date it is approved. The processing of the request shall be completed as soon as
practicable from the date on which the Committee receives the properly completed
written request for a distribution on account of an Unforeseeable Emergency. If
a Participant's Separation from Service occurs after a request is approved in
accordance with this Section 5.6.3, but prior to distribution of the full amount
approved, the approval of the request shall be automatically null and void and
the benefits which the Participant is entitled to receive under the Plan shall
be distributed in accordance with the applicable distribution provisions of the
Plan.
5.6.4 The Committee may from time to time adopt additional policies or
rules consistent with the requirements of Section 409A of the Code to govern the
manner in which such distributions may be made so that the Plan may be
conveniently administered.
Section 6. Vesting:
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A Participant shall be fully vested in the portion of his Deferred
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Compensation Account attributable to Participant Deferral Credits, and all
income, gains and losses attributable thereto. A Participant shall become fully
vested in the portion of his Deferred Compensation Account attributable to
Employer Credits, and income, gains and losses attributable thereto, in
accordance with the vesting schedule and provisions designated by the Employer
in the Adoption Agreement. If a Participant's Deferred Compensation Account is
not fully vested upon Separation from Service, the portion of the Deferred
Compensation Account that is not fully vested shall thereupon be forfeited.
Section 7. Distribution Rules:
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7.1 Payment Options. The Employer shall designate in the Adoption
Agreement the payment options which may be elected by the Participant (lump sum,
annual installments, or a combination of both). Different payment options may be
made available for each Qualifying Distribution Event, and different payment
options may be available for different types of Separations from Service, all as
designated in the Adoption Agreement. The Participant shall elect in the
Participation Agreement the method under which the vested balance in the
Deferred Compensation Account will be distributed from among the designated
payment options. The Participant may at such time elect a different method of
payment for each Qualifying Distribution Event as specified in the Adoption
Agreement. If the Participant is permitted by the Employer in the Adoption
Agreement to elect different payment options and does not make a valid election,
the vested balance in the Deferred Compensation Account will be distributed as a
lump sum.
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Notwithstanding the foregoing, if certain Qualifying Distribution
Events occur prior to the date on which the vested balance of a Participant's
Deferred Compensation Account is completely paid pursuant to this Section 7.1
following the occurrence of certain initial Qualifying Distribution Events, the
following rules apply:
7.1.1 If the initial Qualifying Distribution Event is a Separation from
Service or Disability, and the Participant subsequently dies, the remaining
unpaid vested balance of a Participant's Deferred Compensation Account shall be
paid as a lump sum.
7.1.2 If the initial Qualifying Distribution Event is a Change in
Control Event, and any subsequent Qualifying Distribution Event occurs (except
an In-Service or Education Distribution described in Section 2.29(iv)), the
remaining unpaid vested balance of a Participant's Deferred Compensation Account
shall be paid as provided under Section 7.1 for payments on such subsequent
Qualifying Distribution Event.
7.2 Timing of Payments. Payment shall be made in the manner elected by
the Participant and shall commence as soon as practicable after (but no later
than 60 days after) the distribution date elected for the Qualifying
Distribution Event. In the event the Participant fails to make a valid election
of the payment method, the distribution will be made in a single lump sum
payment as soon as practicable after (but no later than 60 days after) the
Qualifying Distribution Event. A payment may be further delayed to the extent
permitted in accordance with regulations and guidance under Section 409A of the
Code.
7.3 Installment Payments. If the Participant elects to receive
installment payments upon a Qualifying Distribution Event, the payment of each
annual installment shall be made on the anniversary of the date of the first
installment payment, and the amount of the annual installment shall be adjusted
on such anniversary for credits or debits to the Participant's account pursuant
to Section 8 of the Plan. Such adjustment shall be made by dividing the balance
in the Deferred Compensation Account on such date by the number of annual
installments remaining to be paid hereunder; provided that the last annual
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installment due under the Plan shall be the entire amount credited to the
Participant's account on the date of payment.
7.4 De Minimis Amounts. Notwithstanding any payment election made by
the Participant, if the Employer designates a pre-determined de minimis amount
in the Adoption Agreement, the vested balance in the Deferred Compensation
Account of the Participant will be distributed in a single lump sum payment if
at the time of a permitted Qualifying Distribution Event the vested balance does
not exceed such pre-determined de minimis amount; provided, however, that such
distribution will be made only where the Qualifying Distribution Event is a
Separation from Service, death, Disability (if applicable) or Change in Control
Event (if applicable). Such payment shall be made on or before the later of (i)
December 31 of the calendar year in which the Qualifying Distribution Event
occurs, or (ii) the date that is 2-1/2 months after the Qualifying Distribution
Event occurs. In addition, the Employer may distribute a Participant's vested
balance at any time if the balance does not exceed the limit in Section
402(g)(1)(B) of the Code and results in the termination of the Participant's
entire interest in the Plan as provided under Section 409A of the Code.
7.5 Subsequent Elections. With the consent of the Committee, a
Participant may delay or change the method of payment of the Deferred
Compensation Account subject to the following requirements:
7.5.1 The new election may not take effect until at least 12 months
after the date on which the new election is made.
7.5.2 If the new election relates to a payment for a Qualifying
Distribution Event other than the death of the Participant, the Participant
becoming Disabled, or an Unforeseeable Emergency, the new election must provide
for the deferral of the payment for a period of at least five years from the
date such payment would otherwise have been made.
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7.5.3 If the new election relates to a payment from the In-Service or
Education Account, the new election must be made at least 12 months prior to the
date of the first scheduled payment from such account.
For purposes of this Section 7.5 and Section 7.6, a payment is each separately
identified amount to which the Participant is entitled under the Plan; provided,
that entitlement to a series of installment payments is treated as the
entitlement to a single payment.
7.6 Acceleration Prohibited. The acceleration of the time or schedule
of any payment due under the Plan is prohibited except as expressly provided in
regulations and administrative guidance promulgated under Section 409A of the
Code (such as accelerations for domestic relations orders and employment taxes).
It is not an acceleration of the time or schedule of payment if the Employer
waives or accelerates the vesting requirements applicable to a benefit under the
Plan.
Section 8. Accounts; Deemed Investment; Adjustments to Account:
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8.1 Accounts. The Committee shall establish a book reserve account,
entitled the "Deferred Compensation Account," on behalf of each Participant. The
Committee shall also establish an In-Service or Education Account as a part of
the Deferred Compensation Account of each Participant, if applicable. The amount
credited to the Deferred Compensation Account shall be adjusted pursuant to the
provisions of Section 8.3.
8.2 Deemed Investments. The Deferred Compensation Account of a
Participant shall be credited with an investment return determined as if the
account were invested in one or more investment funds made available by the
Committee. The Participant shall elect the investment funds in which his
Deferred Compensation Account shall be deemed to be invested. Such election
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shall be made in the manner prescribed by the Committee and shall take effect
upon the entry of the Participant into the Plan. The investment election of the
Participant shall remain in effect until a new election is made by the
Participant. In the event the Participant fails for any reason to make an
effective election of the investment return to be credited to his account, the
investment return shall be determined by the Committee.
8.3 Adjustments to Deferred Compensation Account. With respect to
each Participant who has a Deferred Compensation Account under the Plan, the
amount credited to such account shall be adjusted by the following debits and
credits, at the times and in the order stated:
8.3.1 The Deferred Compensation Account shall be debited each business
day with the total amount of any payments made from such account since the last
preceding business day to him or for his benefit.
8.3.2 The Deferred Compensation Account shall be credited on each
Crediting Date with the total amount of any Participant Deferral Credits and
Employer Credits to such account since the last preceding Crediting Date.
8.3.3 The Deferred Compensation Account shall be credited or debited on
each day securities are traded on a national stock exchange with the amount of
deemed investment gain or loss resulting from the performance of the investment
funds elected by the Participant in accordance with Section 8.2. The amount of
such deemed investment gain or loss shall be determined by the Committee and
such determination shall be final and conclusive upon all concerned.
Section 9. Administration by Committee:
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9.1 Membership of Committee. If the Committee consists of individuals
appointed by the Board, they will serve at the pleasure of the Board. Any member
of the Committee may resign, and his successor, if any, shall be appointed by
the Board.
9.2 General Administration. The Committee shall be responsible for the
operation and administration of the Plan and for carrying out its provisions.
The Committee shall have the full authority and discretion to make, amend,
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interpret, and enforce all appropriate rules and regulations for the
administration of this Plan and decide or resolve any and all questions,
including interpretations of this Plan, as may arise in connection with this
Plan. Any such action taken by the Committee shall be final and conclusive on
any party. To the extent the Committee has been granted discretionary authority
under the Plan, the Committee's prior exercise of such authority shall not
obligate it to exercise its authority in a like fashion thereafter. The
Committee shall be entitled to rely conclusively upon all tables, valuations,
certificates, opinions and reports furnished by any actuary, accountant,
controller, counsel or other person employed or engaged by the Employer with
respect to the Plan. The Committee may, from time to time, employ agents and
delegate to such agents, including employees of the Employer, such
administrative or other duties as it sees fit.
9.3 Indemnification. To the extent not covered by insurance, the
Employer shall indemnify the Committee, each employee, officer, director, and
agent of the Employer, and all persons formerly serving in such capacities,
against any and all liabilities or expenses, including all legal fees relating
thereto, arising in connection with the exercise of their duties and
responsibilities with respect to the Plan, provided however that the Employer
shall not indemnify any person for liabilities or expenses due to that person's
own gross negligence or willful misconduct
Section 10. Contractual Liability:
----------- ----------------------
10.1 Contractual Liability. Unless otherwise elected in the Adoption
Agreement, the Company shall be obligated to make all payments hereunder. This
obligation shall constitute a contractual liability of the Company to the
Participants, and such payments shall be made from the general funds of the
19
Company. The Company shall not be required to establish or maintain any special
or separate fund, or otherwise to segregate assets to assure that such payments
shall be made, and the Participants shall not have any interest in any
particular assets of the Company by reason of its obligations hereunder. To the
extent that any person acquires a right to receive payment from the Company,
such right shall be no greater than the right of an unsecured creditor of the
Company.
10.2 Trust. The Employer may establish a trust to assist it in meeting
its obligations under the Plan. Any such trust would be treated as a grantor
trust for purposes of the Code and all assets of the trust would be held in the
United States. The establishment of such a trust would not be intended to cause
Participants to realize current income on amounts contributed thereto, and the
trust would be so interpreted and administered.
Section 11. Allocation of Responsibilities:
----------- -------------------------------
The persons responsible for the Plan and the duties and responsibilities
allocated to each are as follows:
11.1 Board.
(i) To amend the Plan;
(ii) To appoint and remove members of the Committee; and
(iii) To terminate the Plan as permitted in Section 14.
11.2 Committee.
(i) To designate Participants;
(ii) To interpret the provisions of the Plan and to determine the
rights of the Participants under the Plan, except to the extent
otherwise provided in Section 16 relating to claims procedure;
(iii) To administer the Plan in accordance with its terms, except to the
extent powers to administer the Plan are specifically delegated to
another person or persons as provided in the Plan;
20
(iv) To account for the amount credited to the Deferred Compensation
Account of a Participant; and
(v) To direct the Employer in the payment of benefits.
(vi) To file such reports as may be required with the United States
Department of Labor, the Internal Revenue Service and any other
government agency to which reports may be required to be submitted
from time to time; and
(vii) To administer the claims procedure to the extent provided in
Section 16.
Section 12. Benefits Not Assignable; Facility of Payments:
----------- ----------------------------------------------
12.1 Benefits Not Assignable. No portion of any benefit credited or
paid under the Plan with respect to any Participant shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any attempt so to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge the same shall be void, nor shall
any portion of such benefit be in any manner payable to any assignee, receiver
or any one trustee, or be liable for his debts, contracts, liabilities,
engagements or torts. Notwithstanding the foregoing, in the event that all or
any portion of the benefit of a Participant is transferred to the former Spouse
of the Participant incident to a divorce, the Committee shall maintain such
amount for the benefit of the former Spouse until distributed in the manner
required by an order of any court having jurisdiction over the divorce, and the
former Spouse shall be entitled to the same rights as the Participant with
respect to such benefit.
12.2 Plan-Approved Domestic Relations Orders. The Committee shall
establish procedures for determining whether an order directed to the Plan is a
Plan-Approved Domestic Relations Order. If the Committee determines that an
order is a Plan-Approved Domestic Relations Order, the Committee shall cause the
21
payment of amounts pursuant to or segregate a separate account as provided by
(and to prevent any payment or act which might be inconsistent with) the
Plan-Approved Domestic Relations Order.
12.3 Payments to Minors and Others. If any individual entitled to
receive a payment under the Plan shall be physically, mentally or legally
incapable of receiving or acknowledging receipt of such payment, the Committee,
upon the receipt of satisfactory evidence of his incapacity and satisfactory
evidence that another person or institution is maintaining him and that no
guardian or committee has been appointed for him, may cause any payment
otherwise payable to him to be made to such person or institution so maintaining
him. Payment to such person or institution shall be in full satisfaction of all
claims by or through the Participant to the extent of the amount thereof.
Section 13. Beneficiary:
----------- ------------
The Participant's beneficiary shall be the person, persons, entity or
entities designated by the Participant on the beneficiary designation form
provided by and filed with the Committee or its designee. If the Participant
does not designate a beneficiary, the beneficiary shall be his Surviving Spouse.
If the Participant does not designate a beneficiary and has no Surviving Spouse,
the beneficiary shall be the Participant's estate. The designation of a
beneficiary may be changed or revoked only by filing a new beneficiary
designation form with the Committee or its designee. If a beneficiary (the
"primary beneficiary") is receiving or is entitled to receive payments under the
Plan and dies before receiving all of the payments due him, the balance to which
he is entitled shall be paid to the contingent beneficiary, if any, named in the
Participant's current beneficiary designation form. If there is no contingent
22
beneficiary, the balance shall be paid to the estate of the primary beneficiary.
Any beneficiary may disclaim all or any part of any benefit to which such
beneficiary shall be entitled hereunder by filing a written disclaimer with the
Committee before payment of such benefit is to be made. Such a disclaimer shall
be made in a form satisfactory to the Committee and shall be irrevocable when
filed. Any benefit disclaimed shall be payable from the Plan in the same manner
as if the beneficiary who filed the disclaimer had predeceased the Participant.
Section 14. Amendment and Termination of Plan:
----------- ----------------------------------
The Company may amend any provision of the Plan or terminate the Plan
at any time; provided, that in no event shall such amendment or termination
reduce the balance in any Participant's Deferred Compensation Account as of the
date of such amendment or termination, nor shall any such amendment affect the
terms of the Plan relating to the payment of such Deferred Compensation Account.
Notwithstanding the foregoing, the following special provisions shall apply:
14.1 Termination in the Discretion of the Employer. Except as otherwise
provided in Sections 14.2, the Company in its discretion may terminate the Plan
and distribute benefits to Participants subject to the following requirements
and any others specified under Section 409A of the Code:
14.1.1 All arrangements sponsored by the Employer that would be
aggregated with the Plan under Section 1.409A-l(c) of the Treasury Regulations
are terminated.
14.1.2 No payments other than payments that would be payable under the
terms of the Plan if the termination had not occurred are made within 12 months
of the termination date.
14.1.3 All benefits under the Plan are paid within 24 months of the
termination date.
14.1.4 The Employer does not adopt a new arrangement that would be
aggregated with the Plan under Section 1.409A-1(c) of the Treasury Regulations
23
providing for the deferral of compensation at any time within 3 years following
the date of termination of the Plan.
14.1.5 The termination does not occur proximate to a downturn in the
financial health of the Employer.
14.2 Termination Upon Change in Control Event. If the Company
terminates the Plan within thirty days preceding or twelve months following a
Change in Control Event, the Deferred Compensation Account of each Participant
shall become fully vested and payable to the Participant in a lump sum within
twelve months following the date of termination, subject to the requirements of
Section 409A of the Code.
Section 15. Communication to Participants:
----------- ------------------------------
The Employer shall make a copy of the Plan available for inspection by
Participants and their beneficiaries during reasonable hours at the principal
office of the Employer.
Section 16. Claims Procedure:
----------- -----------------
The following claims procedure shall apply with respect to the Plan:
16.1 Filing of a Claim for Benefits. If a Participant or Beneficiary
(the "claimant") believes that he is entitled to benefits under the Plan which
are not being paid to him or which are not being accrued for his benefit, he
shall file a written claim therefore with the Committee.
16.2 Notification to Claimant of Decision. Within 90 days after receipt
of a claim by the Committee (or within 180 days if special circumstances require
an extension of time), the Committee shall notify the claimant of the decision
with regard to the claim. In the event of such special circumstances requiring
an extension of time, there shall be furnished to the claimant prior to
expiration of the initial 90-day period written notice of the extension, which
24
notice shall set forth the special circumstances and the date by which the
decision shall be furnished. If such claim shall be wholly or partially denied,
notice thereof shall be in writing and worded in a manner calculated to be
understood by the claimant, and shall set forth: (i) the specific reason or
reasons for the denial; (ii) specific reference to pertinent provisions of the
Plan on which the denial is based; (iii) 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 (iv) an
explanation of the procedure for review of the denial and the time limits
applicable to such procedures, including a statement of the claimant's right to
bring a civil action under ERISA following an adverse benefit determination on
review. Notwithstanding the foregoing, if the claim relates to a disability
determination, the Committee shall notify the claimant of the decision within 45
days (which may be extended for an additional 30 days if required by special
circumstances).
16.3 Procedure for Review. Within 60 days following receipt by the
claimant of notice denying his claim, in whole or in part, or, if such notice
shall not be given, within 60 days following the latest date on which such
notice could have been timely given, the claimant may appeal denial of the claim
by filing a written application for review with the Committee. Following such
request for review, the Committee shall fully and fairly review the decision
denying the claim. Prior to the decision of the Committee, the claimant shall be
given an opportunity to review pertinent documents and to submit issues and
comments in writing.
16.4 Decision on Review. The decision on review of a claim denied in
whole or in part by the Committee shall be made in the following manner:
25
16.4.1 Within 60 days following receipt by the Committee of the request
for review (or within 120 days if special circumstances require an extension of
time), the Committee shall notify the claimant in writing of its decision with
regard to the claim. In the event of such special circumstances requiring an
extension of time, written notice of the extension shall be furnished to the
claimant prior to the commencement of the extension. Notwithstanding the
foregoing, if the claim relates to a disability determination, the Committee
shall notify the claimant of the decision within 45 days (which may be extended
for an additional 45 days if required by special circumstances).
16.4.2 With respect to a claim that is denied in whole or in part, the
decision on review shall set forth specific reasons for the decision, shall be
written in a manner calculated to be understood by the claimant, and shall set
forth:
(i) the specific reason or reasons for the adverse
determination;
(ii) specific reference to pertinent Plan provisions on
which the adverse determination is based;
(iii) a statement that the claimant is entitled to receive,
upon request and free of charge, reasonable access to,
and copies of, all documents, records, and other
information relevant to the claimant's claim for
benefits; and
(iv) a statement describing any voluntary appeal procedures
offered by the Plan and the claimant's right to obtain
the information about such procedures, as well as a
statement of the claimant's right to bring an action
under ERISA section 502(a).
16.4.3 The decision of the Committee shall be final and conclusive.
16.5 Action by Authorized Representative of Claimant. All actions set
forth in this Section 16 to be taken by the claimant may likewise be taken by a
representative of the claimant duly authorized by him to act in his behalf on
such matters. The Committee may require such evidence as either may reasonably
deem necessary or advisable of the authority to act of any such representative.
Section 17. Miscellaneous Provisions:
----------- -------------------------
17.1 Set off. Notwithstanding any other provision of this Plan, the
Employer may reduce the amount of any payment otherwise payable to or on behalf
26
of a Participant hereunder (net of any required withholdings) at the time
payment is due by the amount of any loan, cash advance, extension of credit or
other obligation of the Participant to the Employer that is then due and
payable, and the Participant shall be deemed to have consented to such
reduction. In addition, the Employer may at any time offset a Participant's
Deferral Compensation Account by an amount up to $5,000 to collect any such
amount in accordance with the requirements of Section 409A of the Code.
17.2 Notices. Each Participant who is not in Service and each
Beneficiary shall be responsible for furnishing the Committee or its designee
with his current address for the mailing of notices and benefit payments. Any
notice required or permitted to be given to such Participant or Beneficiary
shall be deemed given if directed to such address and mailed by regular United
States mail, first class, postage prepaid. If any check mailed to such address
is returned as undeliverable to the addressee, mailing of checks will be
suspended until the Participant or Beneficiary furnishes the proper address.
This provision shall not be construed as requiring the mailing of any notice or
notification otherwise permitted to be given by posting or by other publication.
17.3 Lost Distributees. A benefit shall be deemed forfeited if the
Committee is unable to locate the Participant or Beneficiary to whom payment is
due on or before the fifth anniversary of the date payment is to be made or
commence; provided, that the deemed investment rate of return pursuant to
Section 8.2 shall cease to be applied to the Participant's account following the
first anniversary of such date; provided further, however, that such benefit
shall be reinstated if a valid claim is made by or on behalf of the Participant
or Beneficiary for all or part of the forfeited benefit.
27
17.4 Reliance on Data. The Employer and the Committee shall have the
right to rely on any data provided by the Participant or by any Beneficiary.
Representations of such data shall be binding upon any party seeking to claim a
benefit through a Participant, and the Employer and the Committee shall have no
obligation to inquire into the accuracy of any representation made at any time
by a Participant or Beneficiary.
17.5 Receipt and Release for Payments. Subject to the provisions of
Section 17.1, any payment made from the Plan to or with respect to any
Participant or Beneficiary, or pursuant to a disclaimer by a Beneficiary, shall,
to the extent thereof, be in full satisfaction of all claims hereunder against
the Plan and the Employer with respect to the Plan. The recipient of any payment
from the Plan may be required by the Committee, as a condition precedent to such
payment, to execute a receipt and release with respect thereto in such form as
shall be acceptable to the Committee.
17.6 Headings. The headings and subheadings of the Plan have been
inserted for convenience of reference and are to be ignored in any construction
of the provisions hereof.
17.7 Continuation of Employment. The establishment of the Plan shall
not be construed as conferring any legal or other rights upon any Employee or
any persons for continuation of employment, nor shall it interfere with the
right of the Employer to discharge any Employee or to deal with him without
regard to the effect thereof under the Plan.
17.8 Merger or Consolidation; Assumption of Plan. No Employer shall
consolidate or merge into or with another corporation or entity, or transfer all
or substantially all of its assets to another corporation, partnership, trust or
28
other entity (a "Successor Entity") unless such Successor Entity shall assume
the rights, obligations and liabilities of the Employer under the Plan and upon
such assumption, the Successor Entity shall become obligated to perform the
terms and conditions of the Plan. Nothing herein shall prohibit the assumption
of the obligations and liabilities of the Employer under the Plan by any
Successor Entity.
17.9 Construction. The Employer shall designate in the Adoption
Agreement the state according to whose laws the provisions of the Plan shall be
construed and enforced, except to the extent that such laws are superseded by
ERISA and the applicable requirements of the Code.
17.10 Taxes. The Employer or other payor may withhold a benefit payment
under the Plan or a Participant's wages, or the Employer may reduce a
Participant's Account balance, in order to meet any federal, state, or local tax
withholding obligations with respect to Plan benefits, as permitted under
Section 409A of the Code. The Employer or other payor shall report Plan payments
and other Plan-related information to the appropriate governmental agencies as
required under applicable laws.
Section 18. Transition Rules:
----------- -----------------
This Section 18 does not apply to plans newly established on or after January 1,
2008.
18.1 2005 Election Termination. Notwithstanding Section 4.1.4, at any
time during 2005, a Participant may terminate a Participation Agreement, or
modify a Participation Agreement to reduce the amount of Compensation subject to
the deferral election, so long as the Compensation subject to the terminated or
modified Participation Agreement is includible in the income of the Participant
in 2005 or, if later, in the taxable year in which the amounts are earned and
vested.
29
18.2 2005 Deferral Election. The requirements of Section 4.1.2 relating
to the timing of the Participation Agreement shall not apply to any deferral
elections made on or before March 15, 2005, provided that (a) the amounts to
which the deferral election relate have not been paid or become payable at the
time of the election, (b) the Plan was in existence on or before December 31,
2004, (c) the election to defer compensation is made in accordance with the
terms of the Plan as in effect on December 31, 2005 (other than a requirement to
make a deferral election after March 15, 2005), and (d) the Plan is otherwise
operated in accordance with the requirements of Section 409A of the Code.
18.3 2005 Termination of Participation; Distribution. Notwithstanding
anything in this Plan to the contrary, at any time during 2005, a Participant
may terminate his or her participation in the Plan and receive a distribution of
his Deferred Compensation Account balance on account of that termination, so
long as the full amount of such distribution is includible in the Participant's
income in 2005 or, if later, in the taxable year of the Participant in which the
amount is earned and vested.
18.4 Payment Elections. Notwithstanding the provisions of Sections 7.1
or 7.5 of the Plan, a Participant may elect on or before December 31, 2007, the
time or form of payment of amounts subject to Section 409A of the Code provided
that such election applies only to amounts that would not otherwise be payable
in the year of the election and does not cause an amount to paid in the year of
the election that would not otherwise be payable in such year.
30