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8-K - FORM 8-K - GLOBAL DEFENSE TECHNOLOGY & SYSTEMS, INC. | c09820e8vk.htm |
Exhibit 10.1
THE EXECUTIVE NONQUALIFIED EXCESS PLAN
PLAN DOCUMENT
PLAN DOCUMENT
THE EXECUTIVE NONQUALIFIED EXCESS PLAN
Section 1. Purpose:
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:
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 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.
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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 or Employer Credits to the Deferred Compensation Account
of a Participant.
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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 relationship of employer and employee. An individual
shall cease to be an Employee upon the Employees separation from Service.
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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 Participants 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 Contractors 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.
2.20 Normal Retirement Age of a Participant means the age designated in the Adoption
Agreement.
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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; provided that if the
Participant is an Employee, the individual must be a highly compensated or management employee of
the Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.
2.22 Participant Deferral Credits means the amounts credited to the
Participants 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 States 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 Participants benefits under the Plan;
2.27.4 Requires payment to such person of their interest in the Participants benefits in a
lump sum payment at a specific time; 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.
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2.30 Seniority Date shall have the meaning designated in the Adoption Agreement.
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 Employees 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
a Specified Employee for the twelve-month period beginning on the first day of the fourth month
following the identification date.
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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:
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 Participants
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.
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Section 4. Credits to Deferred Compensation Account:
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 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 Participants 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 Participants 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 by the Participant. 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
Participants election if the election to defer is made not later than the close of the Employers
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 Participants taxable year solely for
services provided during the final payroll period containing the last day of the Participants
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 or as required due to a hardship
distribution under Section 1.401(k)-1(d)(3) of the Code, 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 the same time, on a Participation
Agreement that is timely executed and delivered to the Committee pursuant to Section 4.1.
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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:
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 such 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.
5.3 Death. If the Participant dies while in Service, the Employer shall pay a benefit to the
Participants Beneficiary in the amount designated in the Adoption
Agreement. Payment of such benefit shall be made by the Employer as provided in Section 7.
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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
Participants 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.
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5.6 Unforeseeable Emergency. If the Employer designates in the Adoption Agreement that
distributions are permitted under the Plan upon the 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
Participants 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 Participants 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 Participants 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.
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Section 6. Vesting:
A Participant shall be fully vested in the portion of his Deferred 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 Participants 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:
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 Participants 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 Participants
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 Participants 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 Participants 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 installment due under the Plan shall be the entire amount
credited to the Participants account on the date of payment.
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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 Participants
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 Participants 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.
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.
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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:
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 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.
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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. Unless otherwise specified by the Employer, each deemed investment fund will be
debited pro-rata based on the value of the investment funds as of the end of the preceding business
day.
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:
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.
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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, 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 Committees 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 persons own gross negligence or willful misconduct
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Section 10. Contractual Liability, Trust:
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 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 shall conform to the requirements of a grantor trust under Revenue
Procedures 92-64 and 92-65 and at all times during the continuance of the trust the principal and
income of the trust shall be subject to claims of general creditors of the Employer under federal
and state law. 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; |
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(iv) | To account for the amount credited to the Deferred Compensation Account of a Participant; | ||
(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 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.
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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 Participants 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 Participants 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 Participants current beneficiary
designation form. If there is no contingent 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.
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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 Participants
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 providing for the
deferral of compensation at any time within 3 years following the date of termination of the
Plan.
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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.
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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 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 claimants
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.
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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:
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 claimants claim for benefits; and |
(iv) | a statement describing any voluntary appeal procedures offered by the Plan and the claimants right to obtain the information about such procedures, as well as a statement of the claimants 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.
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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 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 Participants 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 Participants 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.
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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.
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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 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
Participants wages, or the Employer may reduce a Participants Account balance, in order to meet
any federal, state, or local or employment 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, 2009.
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.
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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 Participants
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, 2008, 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.
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