exhibit1018.htm
EXHIBIT
10.18
WEST
PHARMACEUTICAL SERVICES, INC.
NON-QUALIFIED
DEFERRED COMPENSATION PLAN
FOR
DESIGNATED EMPLOYEES
(Amended
and Restated Effective January 1, 2008, except as otherwise noted herein or
required by applicable law)
K:\EDGAR\2009\10K\Exhibit
10.18 - Employees NQDC Plan Restatement.DOC
THE
WEST PHARMACEUTICAL SERVICES, INC.
NON-QUALIFIED
DEFERRED COMPENSATION
PLAN FOR DESIGNATED
EMPLOYEES
(Amended
and Restated Effective January 1, 2008)
West
Pharmaceutical Services, Inc. (the “Company”) hereby adopts this
West Pharmaceutical Services, Inc. Non-Qualified Deferred Compensation Plan For
Designated Employees (the “Plan”), as amended, restated
and renamed effective January 1, 2008, except as otherwise noted herein, to
permit eligible employees of the Company to defer receipt of a specified portion
of their cash and equity-based compensation:
1. Eligible
Employees. Employees of the Company or its subsidiaries are
eligible to make the elections set forth in this Plan after they have completed
three months of continuous service if they are: (a) employed in the United
States by the Company and are expected to earn an annual Base Salary (as defined
below) of $150,000 or more, as determined in the sole discretion of the
Compensation Committee, or (b) any other employee of the Company or its
subsidiaries who is designated by the Compensation Committee as eligible to
participate in the Plan (each an “Eligible Employee”). An
Eligible Employee who at any time makes a valid deferral election under the Plan
is a “Participant.’
2. Deferrable
Compensation. An Eligible Employee may separately elect, in
the form and manner determined by the Committee, to defer cash or stock
compensation as follows:
(a) any whole percentage of his or her
annual aggregate base salary paid by the Company for services rendered exclusive
of any additional allowances, payments or non-cash benefits (“Base Salary”);
(b) any
whole percentage of his or her annual bonus (“Bonus”) earned and payable
under the Management Incentive Plan (“Annual Incentive Plan”), or
any successor plan thereto, whether payable in cash or stock issued under the
2004 Stock-Based Compensation Plan (the “2004 Stock Plan”), the 2007
Omnibus Incentive Compensation Plan (the “2007 Omnibus Plan”), and/or
any successor plan(s) or;
(c) effective
June 1, 2007, any whole number of shares of deferred stock (including
Performance-Vesting Restricted Stock and Performance-Vesting Stock Units, as
applicable) (“PV Stock”)
awarded under the Company’s Long-Term Incentive Plan (the “LTIP”), 2004 Stock Plan, the
2007 Omnibus Plan, and/or any successor plan(s) thereto, to the extent such PV
Stock is earned under the applicable plan.
3. Elections to
Defer.
(a) Base
Salary. An Eligible Employee who wants to defer payment of any
portion of his or her Base Salary in any calendar year must notify the Company’s
Secretary in writing on or before December 31 of the prior year, stating the
amount of his or her Base Salary to be deferred. This election
becomes irrevocable on December 31 of such prior year.
(b) Bonus
Elections.
(i) An
Eligible Employee who wants to defer payment of any portion of his or her Bonus
in any calendar year shall notify the Company’s Secretary in writing on or
before June 30 of the year prior to the year the Bonus would otherwise be
paid. The election must state the amount of a Participant’s Bonus
Stock which is to be deferred, and the election is irrevocable as of such June
30.
(ii) A
Participant who has elected to defer any portion of his or her Bonus, shall be
permitted at the time of his or her election to designate that a portion of such
Bonus will be deemed to be invested in common stock of the Company (“Common Stock”) and ultimately
distributable in Common Stock in accordance with Section
7(c)(iii). The portion of the Participant’s Bonus so designated will
be referred to as “Deferred
Bonus Stock.” The portion of the Participant’s Bonus deferred
hereunder that is not-so-designated shall be referred to as the “Deferred Cash
Bonus.”
(c) PV
Stock. An Eligible Employee who wants to defer payment of any
portion of his or her PV Stock in any calendar year must notify the Company’s
Secretary in writing on or before June 30 of the final (or, as applicable, only)
year of any performance-based vesting period applicable to such PV Stock,
stating the amount of his or her PV Stock which shall be
deferred. This election is irrevocable on such June 30.
(d) Special Rules for
New-Hires.
(i) Base
Salary. Notwithstanding Section 3(a) above, if an Eligible
Employee is hired by the Company during a calendar year, such Participant may
elect to participate in the Plan by notifying the Company’s Secretary in writing
before the first day of the payroll period that commences following the Eligible
Employees completion of three months of continuous service for the Company or
its subsidiaries. An election so made shall be irrevocable on the
first day of the applicable payroll period.
(ii) Bonuses and PV
Stock. Section 3(c) shall not apply to elections to defer
Bonuses or PV Stock in the year a Participant is hired. A newly-hired
employee is not eligible to defer Bonuses or PV Stock until the calendar year
following the calendar year in which such Participant is hired.
(a) Revocation for Unforeseeable
Emergency or Disability. If a Participant has an Unforeseeable
Emergency as described in Section 7(d) or incurs a Disability as defined in
Section 409A, then such Participant may make a request in writing to the
Compensation Committee or its delegate to suspend any elections to make any
deferrals to the Plan during the year such Unforeseeable Emergency or Disability
is incurred. Upon approval by the Compensation Committee or its
delegate, such contributions shall cease immediately.
4. Matching
Contributions.
(a) Base
Salary. For years prior to 2007, the Company will contribute
to the Plan an amount equal to 50% of the first 6% of Base Salary that a
Participant elects to defer. Matching contributions under this
Section 4(a) (“Pre-2007 Salary Matching
Contributions”) shall not be made for deferrals of Base Salary in excess
of 6% or any portion of a Bonus or PV Stock deferred by a
Participant.
(b) Deferred Incentive
Shares. The Company shall make a matching contribution (“Deferred Incentive Shares”) equal to
25% of the aggregate fair market value of the Deferred Bonus Stock that a
Participant elects to defer. Fair market value shall be measured as
of the date such Deferred Bonus Stock would otherwise be paid to such
Participant.
(c) 401(k) Plan
True-up. Effective for calendar years beginning on or after
January 1, 2007,
(i) With respect to any
Participant who earns Base Salary in excess of Section 401(a)(17) of the
Internal Revenue Code of 1986, as amended (the “Code”), except as provided in
Sections 4(c)(ii), the Company will make matching contributions (“Post-2007 Salary Matching
Contributions”) equal to 100% of the Participant’s Base Salary deferred
and remaining to such Participant’s Account plus amounts deferred under the West
Pharmaceutical Services, Inc. 401(k) Plan (the “401(k) Plan”), if applicable,
up to 3% of such Participant’s total annual Base Salary and 50% of the
Participant’s Base Salary deferred in excess of 3%, but no greater than 5%, of
such Participant’s total annual Base Salary deferred. Such matching
contributions shall be calculated without regard to Section 401(a)(17) of the
Code. The amount of matching contributions made for the Participant
with respect to a calendar year (including a “true up” contributions) under the
401(k) Plan (or in accordance with Section 8 hereof), if any, shall be deducted
from the Post-2007 Salary Matching Contributions made
hereunder. Post-2007 Salary Matching Contributions under this Section
4(c) shall not be made for deferrals of Base Salary in excess of 5% of a
Participant’s total annual Base Salary.
(ii) Notwithstanding
Section 4(c)(i), a Participant may elect to opt out of being credited with any
Post-2007 Salary Matching
Contributions,
and, such Participant will only be credited with matching contributions under
the 401(k) Plan, if applicable.
5. Investment of Deferred
Compensation Accounts.
(a) The Company shall establish separate
bookkeeping accounts (each part of a Participant’s “Account”) as set forth in this
Section 5. Such Accounts will be maintained on the books of the
Company and will be used solely to calculate the amount payable to each
Participant and shall not constitute separate funds of
assets. Amounts will be credited to such Accounts as of the date such
amounts would have been distributed or paid to a Participant but for an election
to defer such amounts hereunder. If a Bonus or share of Deferred PV
Stock is not earned under the Annual Incentive Plan or the LTIP, or any
successor plan(s) thereto, as applicable, no amount shall be credited to a
Participant’s Accounts.
(b) A
Participant’s Base Salary deferred pursuant to Section 3(a) plus his or her
Deferred Cash Bonus shall be allocated to his or her “Cash Deferral Account” as of
the last day of the payroll period to which it
relates. Notwithstanding the foregoing, a Participant’s Cash Deferral
Account shall be debited, by any amounts contributed to the 401(k) Plan pursuant
to Section 8 hereof.
(c) Pre-2007
Salary Matching Contributions made pursuant to Section 4(a) on or before March
31, 2000 shall be allocated to a Participant’s “Participant-Directed Matching
Contribution Account” as of the last day of
the payroll period to which they relate.
(d) Pre-2007
Salary Matching Contributions made pursuant to Section 4(a) on or after April 1,
2001 and all Post-2007 Matching Contributions shall be allocated to a
Participant’s “Stock-Invested
Matching Contribution Account” as of the last day of the payroll period
to which they relate or, with respect to Post-2007 Matching Contributions, the
date the amount of such Post-2007 Matching Contributions is determined in the
next following calendar year. Collectively, amounts credited to a
Participant’s Stock-Invested Matching Contribution Account and his or her
Participant-Directed Matching Contribution Account, shall be referred to as his
or her “Matching Contribution
Account.”
(e) Deferred
Bonus Stock, Deferred PV Stock, and Deferred Incentive Shares will be allocated
to a separate “Deferred Stock
Account” and subject to the rules of Section 7(c)(iii).
(f) Investment of Cash Deferral
Account and Participant-Directed Matching Contribution
Account.
(i) Each Participant shall direct the
deemed investment of his or her Cash Deferral Account and Participant-Directed
Matching Contribution Account among the investment funds offered under the Plan
(“Investment Funds”) by
complying with administrative procedures established by the Compensation
Committee. A Participant’s election shall specify the whole
percentage of his or her Cash Deferral Account and Participant-Directed Matching
Contribution Account deemed to be invested in an Investment Fund. A
Participant’s election shall remain in effect until a new election is
made. A Participant may change an election of Investment Funds or
transfer existing Account balances among Investment Funds once per month by
complying with the administrative procedures established by the Compensation
Committee. The Compensation Committee shall establish procedures to
review the investment elections made by a Participant and shall retain the
authority to override any investment election if it determines, in its sole
discretion, that such an override is in the Company’s best
interests. In addition, any discretionary investments in or
divestments of amounts deemed invested in Company Stock shall be subject to the
Company’s Securities Trading Policy.
(ii) Investment
Funds. The Company shall make available to each Participant
literature summarizing the investment characteristics of each Investment
Fund.
(iii) Valuation of Participant
Accounts. Any increase or decrease in the fair market value of
an Investment Fund shall be computed and credited to or deducted from the Cash
Deferral Account or Participant-Directed Matching Contribution Account, as
applicable, of all Participants who are deemed to have invested in the
Investment Fund in accordance with policies and procedures established by the
Compensation Committee.
(g) Investment of Stock-Invested
Matching Contribution Account.
(i) The Stock-Invested Matching
Contribution Account of each Participant shall be deemed to be invested in
Common Stock. Except as set forth herein, a Participant shall not be
able to direct or invest amounts in his or her Stock-Invested Matching
Contribution Account. Notwithstanding the foregoing, effective
January 1, 2008, a Participant who has been credited with three years of
service, may direct the investment of his Stock-Invested Matching Contribution
Account among the other Investment Funds offered under the Plan, and also may
choose to re-invest any portion of their Stock-Invested Matching Contribution
Account in Common Stock after previously investing it in the other available
Investment Funds.
(ii) Any increase or decrease in the fair
market value of the common stock of the Company shall be computed and credited
to or deducted from the Stock-Invested Matching Contribution Accounts of all of
the Participants who are invested in the common stock of the Company in
accordance with policies and procedures established by the Compensation
Committee.
(h) Investment of Deferred Stock
Account.
(i) The
Deferred Stock Account of each Participant shall be deemed to be invested in
Common Stock. A Participant shall not have the ability to direct or
invest amounts in his or her Deferred Stock Account.
(ii) Any
increase or decrease in the fair market value of the common stock of the Company
shall be computed and credited to or deducted from the Deferred Stock Accounts
of all of the Participants who are invested in the common stock of the Company
in accordance with policies and procedures established by the Compensation
Committee.
(i) Indemnity. By
electing to make contributions to this Plan, each Participant hereby
recognizes and agrees that the Company and any other individual responsible for
administering the Plan (including the Company’s Secretary or any trustee
responsible for holding assets under the Plan) are in no way responsible for the
investment performance of the Participant’s Accounts.
(j) Dividends on Company
Stock. Any dividends paid on that portion of a Participant’s
Account that is deemed invested in Company Stock shall be treated as earnings
hereunder, and, shall, in the manner determined by the Committee be credited to
a Participant’s Account and remain deemed invested in Company Stock and shall be
distributed in Company Stock. With respect to Deferred PV Stock, such
amount shall be credited with dividends at the target level in a manner similar
to that provided under the terms of the LTIP.
6. Vesting.
(a) Cash Deferrals and Post-2007
Salary Matching Contributions. A Participant shall always be
100% vested in his or her Cash Deferral Account and Post-2007 Salary Matching
Contributions made pursuant to Section 4(c) on or after January 1,
2007.
(b) Pre-2007 Salary Matching
Contributions. A Participant shall be 40% vested in Pre-2007
Salary Matching Contributions made on his or her behalf under Section 4
after two years of employment with the Company or any of its subsidiaries (prior
to such two-year period, no portion of the Pre-2007 Salary Matching
Contributions shall be vested). A Participant’s vested interest in
Pre-2007 Salary Matching Contributions will increase by 20% per year of
employment, so that he or she is 100% vested after five years of employment with
the Company or any of its subsidiaries. A “year of employment” will
be credited to a Participant for each 12 month period, beginning on his or her
date of hire by the Company or any of its subsidiaries (and each anniversary
thereof), during which he or she is continuously employed by the Company or any
of its subsidiaries, as determined in the Company’s sole
discretion.
(c) Bonus Stock and Deferred PV
Stock. Any Bonus Stock deferred under Section 3(b) and any
Deferred PV Stock deferred under Section 2(c) shall be immediately 100%
vested.
(d) Deferred Incentive
Shares.
(i) Subject
to Sections 6(d)(ii) through 6(d)(v), all Incentive Shares credited to a
Participant’s Account will vest on the fourth anniversary of the date that the
Bonus Stock with respect to which such Incentive Share relates (“Underlying Stock”) was granted
to a Participant.
(ii) If
a Participant receives a distribution with respect to any share of Underlying
Stock prior to the fourth anniversary of the grant date of the Underlying Stock
in accordance with Section 7(a)(iv), the Incentive Shares that relates to such
Underlying Stock will be immediately forfeited by such Participant.
(iii) If
a participant sells, assigns, exchanges, pledges, hypothecates or otherwise
encumbers any of the Underlying Stock, the Incentive Shares that relate to such
Underlying Stock will be immediately forfeited by such Participant.
(iv) If,
as determined by the Committee in its sole and absolute discretion, a
Participant terminates employment with the Company due to death, disability or
retirement under a qualified pension plan maintained by the Company
(collectively referred to as a “Qualified Termination”), then
the following percentage of Incentive Shares shall vest and all unvested shares
shall be immediately forfeited:
(A) 25%
if at least one but less than two years has elapsed since the grant date of the
Underlying Stock.
(B) 50% if at least two but less than three
years has elapsed since the grant date of the Underlying Stock.
(C) 75% if at least three but less than
four years has elapsed since the grant date of the Underlying
Stock.
(v) If,
as determined by the Committee in its sole and absolute discretion, a
Participant’s service with the Company terminates for any reason other than a
Qualified Termination, all unvested Incentive Shares shall immediately be
forfeited.
(e) (i) Notwithstanding
anything in this Plan to the contrary, a Participant shall immediately be 100%
vested in matching contributions made pursuant to Section 4 after a Change
in Control, as defined below.
(ii) A
“Change in Control”
shall mean a change in control of a nature that would be required to be reported
in response to Item 1 of the Current Report on Form 9-K as in effect on April
28,1998, pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended (the “Act”),
provided that, without limitation, a Change in Control shall be deemed to have
occurred if:
(A) any “Person” (as such term is used
in sections 13(d) and 14(d) of the Act), other than:
(1) the Company,
(2) any Person who on the date hereof is a
director or Participant of the Company, or
(3) a trustee or fiduciary holding
securities under an employee benefit plan of the Company,
(B) is or becomes the “beneficial owner,”
(as defined in Rule 13d-3 under the Act), directly or indirectly, of securities
of the Company representing more than 50% of the combined voting power of the
Company’s then outstanding securities; or
(C) during any period of two consecutive
years during the term of this Plan, individuals who at the beginning of such
period constitute the board of directors of the Company (the “Board”) cease for any reason
to constitute at least a majority thereof, unless the election of each director
who was not a director at the beginning of such period has been approved in
advance by directors representing at least two-thirds of the directors then in
office who were directors at the beginning of the period; or
(D) the shareholders of the Company
approve:
(1) a plan of complete liquidation of the
Company; or
(2) an agreement for the sale or
disposition of all or substantially all of the Company’s assets; or
(3) a merger, consolidation, or
reorganization of the Company with or involving any other corporation, other than a merger,
consolidation, or reorganization that would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity), at least fifty percent (50%) of the combined voting power
of the voting securities of the Company (or the surviving entity, or an entity
which as a result of such transaction owns the Company or all or substantially
all of the Company’s assets either directly or through one or more subsidiaries)
outstanding immediately after such merger, consolidation, or
reorganization.
7. Distribution of Deferred
Compensation.
(a) Distributions of Certain
Amounts Following Fifth Anniversary. For allocations to a
Participant’s Cash Deferral Account and the vested portion of a Participant’s
Deferred Stock Account only, during each calendar year, unless a Participant
elects otherwise in accordance with Section 7(b), the amount contributed to each
Account for each plan year plus any earnings and losses, shall be distributed on
the first to occur of:
(i) The
first normal payroll date on or after the January 15 that occurs following the
fifth anniversary of the end of year such amounts would have been paid to the
Participant absent his or her deferral hereunder; or,
(ii) The first normal payroll date on or
after the date which is six months following the Participant’s termination of
employment.
(b) Election to Receive Certain
Amounts at a Different Time. Notwithstanding Section 7(a), a
Participant may elects in writing as described in this Section 7(b) only to have
amounts that would be distributed in accordance with Section 7(a) distributed at
a different time.
(i) With
respect to amounts described in Section 7(a) that were earned and vested on or
before December 31, 2004 (“Grandfathered Amounts”), the
election must be made in writing by December 31 of the year which is two years’
prior to the date the Grandfathered Amounts would otherwise be distributed under
the Plan. A Participant may elect to receive his or her Grandfathered
Amounts on either: (A) a subsequent date that is at least 24 months later than
the date the amounts would otherwise be distributed hereunder, or (B)
termination of employment. A Participant is permitted to make
subsequent deferrals under this Section 7(b)(i) provided that such subsequent
elections satisfy the requirements in the previous
sentence. Notwithstanding any election under this Section 7(b),
Grandfathered Amounts will be distributed by the end of the month following the
Participant’s termination of employment if it occurs earlier.
(ii) With respect to amounts described in
Section 7(a) that were earned and vested on or after January 1, 2005 (“Non-Grandfathered Amounts”),
the election must be made in writing by the later of (A) the date his or her
election becomes irrevocable as described in Section 3, or (B) December 31,
2008. A
Participant may elect to receive his or her Non-Grandfathered Amounts on either:
(A) a subsequent date that is at least 24 months later than the date the amounts
would otherwise be distributed hereunder, or (B) termination of
employment. A Participant is not permitted to make
subsequent deferrals under this Section 7(b)(ii). Notwithstanding any
election under this Section 7(b)(ii), Non-Grandfathered Amounts will be
distributed on the date that is six months following the Participant’s
termination of employment if it occurs earlier.
(c) Distributions of Matching
Contributions. Allocations of Grandfathered and
Non-Grandfathered Amounts to a Participant’s Participant-Directed Matching
Contribution Account and Stock-Invested Matching Contribution Account are
distributable only following the termination of a Participant’s employment with
the Company and all of its subsidiaries for any reason, including retirement,
death. Distributions of Grandfathered Amounts shall be made by the
end of the month following the month of the Participant’s termination of
employment, and distributions of Non-Grandfathered Amounts shall be made on the
date that is six months following the Participant’s termination of
employment.
(d) Distributions in the Event
of an Unforeseeable Emergency. Notwithstanding anything
herein to the contrary, a Participant may elect
to receive a distribution from his Cash Deferral Account and the vested portion
of a Participant’s Deferred Stock Account in the event of an Unforeseeable
Emergency. An Unforeseeable Emergency shall be defined in accordance
with Section 409A(a)(2)(B)(ii) of the Code. The distributed amount
may not exceed the amount necessary to eliminate the Unforeseeable Emergency
plus pay any applicable taxes. To apply for an Unforeseeable
Emergency distribution, a Participant must submit a written application to the
Company’s Secretary indicating (A) the nature of the Unforeseeable
Emergency, (B) the amount the Participant needs to alleviate the Unforeseeable
Emergency, and (C) the Account from which a distribution, if approved, shall be
made. The determination of whether an Unforeseeable Emergency exists
shall be made in accordance with the claims procedures in Section
12. Amounts allocated to a Participant’s Participant-Directed
Matching Contribution Account, Stock-Invested Matching Contribution Account and
the unvested portion of a Participant’s Deferred Stock Account shall not be
available for distribution under this Section 7(d).
(e) Valuing Accounts for
Distributions, The value of each of the Accounts of a
Participant shall be determined as of the effective date of a distribution from
the Plan (the “Valuation
Date”). The value of the Accounts will be adjusted on the
Valuation Date to reflect earnings, losses, dividends, stock splits, and
previous withdrawals. The relevant portion of each of the Accounts,
as applicable, shall then be distributed in accordance with this Section
7.
(f) Method of
Distribution,
(i) Subject to Sections
7(g) and 8, and unless elected otherwise under Section 7(f)(ii), all
distributions from the Plan shall be made in a cash lump sum.
(ii) For amounts payable
upon termination of employment pursuant to any other sub-section of this Section
7, a Participant may elect to receive the distribution in five substantially
equal annual installments in accordance with this Section 7(f)(ii).
(A) With
respect to Grandfathered Amounts, such election must be made by December 31 of
the year before the year of a Participant’s termination of employment. This
election shall continue in effect until changed by the Participant, provided
that any such change shall be effective only if the Participant submits
appropriate instructions, in accordance with administrative procedures
established by the Company, on or before December 31 of the year prior to the
year in which the Participant becomes entitled to a distribution.
(B) With
respect to Non-Grandfathered Amounts, such election must be made by the later of
(i) the date the Participant makes his or her first deferral election under the
Plan, or (ii) December 31, 2008. This election is
irrevocable.
(C) If installment distributions are
elected, the first installment shall be paid on or as soon as practicable
following the January 15 immediately following the Participant’s termination
from employment, and the others on or as soon as practicable following January
15 of the second, third, fourth and fifth years following such
termination. The Participant shall continue to direct the investment
of any amount remaining in his or her Cash Deferral Account and
Participant-Directed Matching Contribution Account and the second to fifth
installments shall be adjusted to take into account any earnings, losses, stock
splits or dividends.
(g) Form of
Distributions. Regardless of the method of distribution
required or elected under Section 7(f):
(ii) Distributions
from a Participant’s Cash Deferral Account, and either Matching Contribution
Account shall be made in cash, unless elected otherwise under Section
7(g)(iii).
(iii) Distributions
of Bonus Stock and amounts allocated to a Participant’s Deferred Stock Account
must be made in the form of whole shares of Common Stock in accordance with this
Section. No partial shares of Common Stock shall be distributed, and
cash equal to the fair market value of such fractional Common Stock shall be
distributed in lieu thereof.
(iv) A
Participant may elect to receive all or a portion of his or her distribution
from his or her Base Salary Deferral Account or either Matching Contribution
Account in Common Stock; provided that such election to receive Common Stock in
lieu of cash shall be effective only if the Participant submits appropriate
instructions, in accordance with administrative procedures established by the
Company, on or before December 31 of the year prior to the year in which
the Participant becomes entitled to a distribution.
(v) Any
Common Stock distributable from this Plan in accordance with this Section 7(g)
shall be made under and pursuant to the 2004 Stock Plan, or, as applicable, the
2007 Omnibus Plan or any successor plan(s) thereto as determined by the
Compensation Committee.
(h) Treatment of Unvested
Portion of Participant’s Account. Incentive Shares that are
not vested at the time a Participant terminates employment shall be forfeited
and may be used by the Company as determined in its sole
discretion.
(i) Small-Benefit Cash
Out. To the extent permitted by Section 409A of the Code,
notwithstanding any other provision of this Plan to the contrary, if a
Participant’s entire Account Balance (plus any amounts that would be aggregated
with the Account Balance under Code Section 409A) is less than the amount
specified in Section 402(g)(1)(B) of the Code when such Participant terminates
employment, his or her entire Account Balance will be paid in a single, cash
lump sum six months following termination of employment.
8. Transfers of Certain Amounts
to the 401(k) Plan. With respect to any Participant who is
eligible for the 401(k) Plan,
(a) The
Company shall distribute from such Participant’s Base Salary deferred hereunder
(but not Cash Bonuses), the maximum pre-tax amount that may be contributed to
the 401(k) Plan by such Participant for such deferral year, and shall contribute
such amount to the 401(k) Plan on behalf of such Participant in accordance with
the limitations imposed by the Code. Such amount shall not include
any earnings on the Base Salary Deferrals, but shall be adjusted for any
losses.
(b) The
Company shall contribute, from such Participant’s Post-2007 Matching
Contributions an amount equal to the maximum amount such Participant could have
been credited with matching contributions under the 401(k) Plan. Such
amount shall not include any earnings on the Base Salary Deferrals, but shall be
adjusted for any losses.
(c) The
Company shall contribute both such amounts to the 401(k) Plan as soon as
practicable after the calendar year to which the election relates, but not later
than March 15 of the following calendar year.
9. Distributions on
Death; Designation of
Beneficiary. Notwithstanding anything in the Plan to the
contrary, if a Participant dies prior to receiving the entire balance of his or
her Accounts, any balance remaining in his or her Accounts shall be paid in a
cash lump sum only to the Participant’s designated beneficiary as soon as
practicable after such Participant’s death, or if the Participant has not
designated a beneficiary in writing to the Company’s Secretary, to such
Participant’s estate. Any designation of beneficiary may
be revoked or modified at any time by the Participant or his or her authorized
designee.
10. Unsecured Obligation of the
Company. The Company’s obligations to establish and maintain
Accounts for each Participant and to make payments of deferred compensation to
him or her under this Plan shall be the general unsecured obligations of the
Company. The Company shall be under no obligation to establish any
separate fund, purchase any annuity contract, or in any other way make special
provision or specifically earmark any funds for the payment of any amounts
called for under this Plan, nor shall this Plan or any actions taken under or
pursuant to this Plan be construed to create a trust of any kind, or a fiduciary
relationship between the Company and any Participant, his or her designated
beneficiary, executors or administrators, or any other person or
entity. If the Company chooses to establish such a fund or purchase
such an annuity contract or make any other arrangement to provide for the
payment of any amounts called for under this Plan, such fund contract or
arrangement shall remain part of the general assets of the Company, and no
person claiming benefits under this Plan shall have any right, title, or
interest in or to any such fund, contract or arrangement.
11. Administration. The
Plan will be administered by the Compensation Committee.
(a) The Compensation Committee shall be the
named fiduciary for purposes of the claims procedure pursuant to Section 12 and
shall have authority to act to the full extent of its absolute discretion
to:
(ii)
interpret
the Plan;
(iii) resolve
and determine all disputes or questions arising under the Plan subject to the
provisions of Section 11, including the power to determine the rights of
Participants and their beneficiaries (designated under Section 8), and their
respective benefits, and to remedy any ambiguities, inconsistencies or omissions
in the Plan;
(iv) create and revise rules and procedures
for the administration of the Plan and prescribe such forms as may be required
for Participants to make elections under, and otherwise participate in, the
Plan; and
(v) take any other actions and make any
other determinations as it may deem necessary and proper for the administration
of the Plan.
(b) Any expenses incurred in the
administration of the Plan will be paid by the Company or the
Employer.
(c) Except as the Compensation Committee
may otherwise determine (and subject to the claims procedure set forth in
Section 12), all decisions and determinations by the Compensation Committee
shall be final and binding upon all Participants and their designated
beneficiaries.
(d) Neither the Secretary nor any member of
the Compensation Committee shall participate in any matter involving any
questions relating solely to his or her own participation or benefits under the
Plan. The Compensation Committee shall be entitled to rely conclusively upon,
and shall be fully protected in any action or omission taken by it in good faith
reliance upon the advice or opinion of any persons, firms or agents retained by
it, including but not limited to accountants, actuaries, counsel and other
specialists. Nothing in this Plan shall preclude the Company from indemnifying
the Secretary or members of the Compensation Committee for all actions under
this Plan, or from purchasing liability insurance to protect such persons with
respect to the Plan.
(e) With respect to Company Stock, in the
event of any (a) stock split, reverse stock split, or stock dividend, or (b)
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation, spin-off, split-up
or other similar change in corporate structure or capitalization or similar
event, the number and kinds of shares payable hereunder shall be adjusted by the
Company. The determinations and adjustments made by the Committee
under this Section shall be conclusive.
12. Claims
Procedure. The Company shall administer a claims
procedure as follows:
(a) Initial
Claim. A Participant or his or her beneficiary who believes
that he or she is entitled to benefits under the Plan (the “Claimant”), or the Claimant’s
authorized representative acting on behalf of such Claimant, must make a claim
for those benefits by submitting a written notification of his or her claim of
right to such benefits. Such notification must be on the form and in
accordance with the procedures established by the Company. No benefit
shall be paid under the Plan until a proper claim for benefits has been
submitted.
(b) Procedure for
Review. The Compensation Committee shall establish
administrative processes and safeguards to ensure that all claims for benefits
are reviewed in accordance with the Plan document and that, where appropriate,
Plan provisions have been applied consistently to similarly situated
Claimants. Any notification to a Claimant required hereunder may be
provided in writing or by electronic media, provided that any electronic
notification shall comply with the applicable standards imposed under 29 C.F.R.
§2520.104b-1(c).
(c) Claim Denial
Procedure. If a claim is wholly or partially denied, the
Compensation Committee shall notify the Claimant within a reasonable period of
time, but not later than 90 days after receipt of the claim, unless the
Compensation Committee determines that special circumstances require an
extension of time for processing the claim. If the Compensation
Committee determines that an extension of time for processing is required,
written notice of the extension shall be furnished to the Claimant prior to the
termination of the initial 90-day period. In no event shall such
extension exceed a period of 180 days from receipt of the claim. The
extension notice shall indicate: (i) the special circumstances necessitating the
extension and (ii) the date by which the Compensation Committee expects to
render a benefit determination. A benefit denial notice 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 denial,
(ii) the specific reference to the Plan provisions on which the denial is
based, (iii) a description of any additional material or information necessary
for the Claimant to perfect the claim, with reasons therefor, and (iv) the
procedure for reviewing the denial of the claim and the time limits
applicable to such procedures, including a statement of the Claimant’s right to
bring a legal action under section 502(a) of Employee Retirement Income Security
Act of 1974, as amended (“ERISA”) following an adverse
benefit determination on review.
(d) Appeal
Procedure. In the case of an adverse benefit determination,
the Claimant or his
or her representative shall have the opportunity to appeal to the Compensation
Committee for review thereof by requesting such review in writing to the Board
within 60 days of receipt of notification of the denial. Failure to
submit a proper application for appeal within such 60 day period will cause such
claim to be permanently denied. The Claimant or his or her
representative shall be provided, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information relevant
to the claim. A document, record or other information shall be deemed
“relevant” to a claim in accordance with 29 C.F.R.
§2560.503-1(m)(8). The Claimant or his or her representative shall
also be provided the opportunity to submit written comments, documents, records
and other information relating to the claim for benefits. The Board
shall review the appeal taking into account all comments, documents, records and
other information submitted by the Claimant or his or her representative
relating to the claim, without regard to whether such information was submitted
or considered in the initial benefit determination.
(e) Decision on
Appeal. The Board shall notify a Claimant of its decision on
appeal within a reasonable period of time, but not later than 60 days after
receipt of the Claimant’s request for review, unless the Compensation Committee
determines that special circumstances require an extension of time for
processing the appeal. If the Compensation Committee determines that
an extension of time for processing is required, written notice of the extension
shall be furnished to the Claimant prior to the termination of the initial
60-day period. In no event shall such extension exceed a period of 60
days from the end of the initial period. The extension notice shall
indicate: (i) the special circumstances necessitating the extension and (ii) the
date by which the Compensation Committee expects to render a benefit
determination. An adverse benefit decision on appeal 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) the specific reference to the Plan provisions on which
the denial 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 (the
relevance of a document, record or other information will be determined in
accordance with 29 C.F.R. §2560-1(m)(8)) and (iv) a statement of the
Claimant’s right to bring a legal action under section 502(a) of
ERISA.
(f) Litigation. In
order to operate and administer the claims procedure in a timely and efficient
manner, any Claimant whose appeal with respect to a claim for benefits has been
denied, and who wants to commence a legal action with respect to such claim,
must commence such action in a court of competent jurisdiction within
90 days of receipt of notification of such denial. Failure to
file such action by the prescribed time will forever bar the commencement of
such action.
(g) Disputes; Enforcement of
Rights. All reasonable legal and other fees and expenses
incurred by the Claimant in connection with any disputed claim regarding any
right or benefit provided for in this Plan shall be paid by the Company, to the
extent permitted by law, provided that the Claimant prevails on the merits of
his or her claim in material part as the result of litigation, arbitration or
settlement.
13. Delay. Notwithstanding
anything in the Plan to the contrary, to the extent permitted by Section 409A of
the Code, distributions to Participants shall be delayed if (a) the ability of
the Company to remain a going concern is jeopardized, (b) it is necessary to
comply with applicable law, or (c) prior to a Change in Control only, to the
extent necessary to ensure deduction under Section 162(m) of the
Code.
14.
Acceleration to Pay
Employment Taxes. To the extent permitted by Section 409A of
the Code, distributions under the Plan may be accelerated to the extent required
to pay employment taxes, as permitted by the Compensation
Committee.
15. Top Hat and Non-Qualified
Status. This Plan is intended to be a top-hat plan within the
meaning of ERISA. The Plan is an unfunded plan for purposes of ERISA
and the Code and is not qualified under section 401(a) of the Code.
16. Withholding of
Taxes. The rights of a Participant (and his or her
beneficiaries) to payments under this Plan shall be subject to the Company’s
obligations at any time to withhold from such payments any income or other tax
on such payments.
17. Assignability. No
portion of a Participant’s Account(s) may be assigned or transferred in any
manner, nor shall any of the Accounts be subject to anticipation, voluntary
alienation or involuntary alienation.
18. Amendments and
Termination. This Plan may be amended by a the Compensation
Committee of the Board. This Plan may be terminated at any time by
the Board. No amendment or termination may adversely affect a
Participant’s Accounts existing on the date such amendment or termination is
made, nor any election previously made under the Plan as to deferrals for the
calendar year in which the amendment or termination occurs.
19. Effective Date; Section
409A. The Plan was originally effective with respect to a
Participant’s Bonus Stock or Cash Compensation earned after August
30, 1994. This restatement is effective with respect to a
Participant’s deferrals made on or after January 1, 2008, except to the extent
required by Section 409A, when such changes shall be effective as of the date
required by Section 409A (generally, January 1, 2005). The Plan is
intended to satisfy Code Section 409A and all of the official guidance
promulgated thereunder. To the extent a provision in the Plan is
inconsistent with Code Section 409A, such provisions shall be deemed amended to
comply with Code Section 409A, to avoid the application of the penalty tax and
interest provided thereunder.