EXHIBIT 10.9
IRVINE SENSORS, INC.
DEFERRED COMPENSATION PLAN
PREAMBLE
Irvine Sensors, Inc. (the
Corporation), a corporation formed under the laws of the State of
Delaware, desires to establish a deferred compensation plan for the
exclusive benefit of a select group of management and highly
compensated employees.
The Corporation intends that any
Participant or Beneficiary under the Plan shall have the status of
an unsecured general creditor with respect to the Plan.
The Corporation hereby establishes
the Irvine Sensors Deferred Compensation Plan, effective as of
September 27, 2002 .
ARTICLE I
DEFINITIONS
I.1 “Account” shall mean
the record maintained by the Committee showing the number of shares
of common stock deemed allocated to the account of each Participant
or Beneficiary as well as the amount of any cash contributions,
dividends or income or loss thereon deemed allocated to the
Participant or Beneficiary. The term “Account” shall
refer only to a bookkeeping entry and shall not be construed to
require the segregation of assets or shares on behalf of any
Participant or Beneficiary.
I.2 “Beneficiary” shall
mean the Beneficiary designated by each Participant under the
Irvine Sensors Deferred Compensation Plan; provided, however, that
a Participant may designate a different Beneficiary hereunder by
delivering to the Committee a written beneficiary designation in
the form provided by the Committee, and executed specifically with
respect to this Plan. No beneficiary designation shall be effective
until received and accepted by the Committee.
I.3 “Board” shall mean
the Board of Directors of the Corporation.
I.4 “Change in Control”
shall mean the occurrence of any one or more of the following
events:
(a) any Person (as defined below)
becomes the Beneficial Owner (as defined below) of securities of
the Corporation having fifty percent (50%) or more of the total
number of votes that may be cast for the election of directors of
the Corporation; or
(b) the shareholders of the
Corporation approve the sale or other disposal of all or
substantially all of the assets of the Corporation (including a
plan of liquidation or dissolution) or the merger or consolidation
of the Corporation with or into another corporation, in accordance
with the requirements of the Certificate of Incorporation of the
Corporation and
applicable law; or(c) as a result of or in
connection with any tender offer, exchange offer, merger or other
business combination, sale of assets or contested election of
directors, or any combination of the foregoing, the individuals who
are directors of the Corporation just prior to such event shall
cease to constitute the majority of the Board.
For purposes of this Section 1.4, a
“Person” means any individual, firm, corporation
partnership, trust or other entity. Two or more Persons who agree
to act together for the purpose of acquiring, holding, voting, or
disposing of securities of the Corporation shall be deemed a
“Person.” Excluded from the definition of
“Person” are the Corporation and any subsidiaries of
the Corporation, whether individually or in any
combination.
For purposes of this Section 1.4, a
person is a “Beneficial Owner” of securities of the
Corporation if such Person is any of such Person’s Affiliates
(as defined below) or Associates (as defined below) has or shares,
directly or indirectly through any contract, arrangement
understanding or otherwise, the power to vote or direct the voting
of securities of the Corporation or the power to dispose or direct
the disposition of securities of the Corporation. A Person shall be
the Beneficial Owner of those securities of the Corporation that
such person or any of such Person’s Affiliates or Associates
has the right to become the Beneficial Owner of (whether such right
is execrable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights, warrants, options
or otherwise.
For purposes of Section 1.4 only, an
“Affiliate” of a specified Person is a Person that
directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the
Person specified.
For purposes of this Section 1.4, an
“Associate” of a specified Person is (i) any
corporation or organization (other than the Corporation or any
subsidiary of the Corporation) of which such Person is an officer
or partner or is, directly or indirectly, the Beneficial Owner of
ten percent (10%) or more of any class of equity securities, (ii)
any trust or other estate in which such Person has substantial
beneficial interest or as to which such Person serves as trustee or
in a similar fiduciary capacity, or (iii) any relative or spouse of
such Person, or any relative of such spouse, who has the same home
as such Person or who is a director or officer of the Corporation
or any subsidiary of the Corporation.
I.5 “Code” shall mean
the Internal Revenue Code of 1986, as it may be amended from time
to time, and the rules and regulations promulgated
hereunder.
I.6 “Committee” shall
mean the Committee appointed by the Board of Directors of the
Corporation to administer this Plan, or if none is appointed, the
Board of Directors.
I.7 “Corporation” shall
mean Irvine Sensors, Inc. or its successors.
I.8 “Disability” shall
mean that a Participant is permanently impaired to such an extent
that he or she cannot perform the material duties of his or her
position of employment with the Corporation. The determination
hereunder as to whether and when a Participant has a Disability
shall be made by the Committee, and for purposes of assisting the
Committee in making any such determination, the Committee may
require the Participant to submit to an examination by a competent
physician or medical clinic selected by the Committee.
I.9 “Effective Date”
shall mean September 27, 2002.
I.10 “Normal Retirement
Age” shall mean the age of Sixty Five (65) years.
I.11 “Participant” shall
mean an individual who has been designated by the Committee as
being eligible to participate in the Plan.
I. 12 “Plan” shall mean
the Irvine Sensors Deferred Compensation Plan, as amended from time
to time.
I.13 “Plan Year” shall
mean the annual period beginning January 1 and ending December 31,
both dates inclusive of each year, except for the initial Plan Year
that shall be a partial year, beginning September 27, 2002 and
ending December 31, 2002.
I.14 “Valuation Date”
shall mean each business day on which the financial markets are
open for trading activity.
ARTICLE II
ELIGIBILITY
Participation in the Plan shall be
made available to a select group of individuals, as determined by
the Committee, in its sole discretion, who are providing services
to the Corporation in key positions of management and
responsibility or who are highly compensated employees of the
Corporation. Such individuals may elect to participate hereunder by
executing a participation agreement in such form and at such time
as the Committee shall require, within thirty (30) days of the date
on which he or she is notified by the Committee of his/her
eligibility to participate in the Plan. The determination as to the
eligibility of any individual to participate in the Plan shall be
in the sole and absolute discretion of the Committee, whose
decision in that regard shall be conclusive and binding for all
purposes hereunder.
ARTICLE III
CREDITING OF CONTRIBUTIONS AND
INCOME
III.1 As of each Valuation Date, the
Committee shall credit to each Participant’s Account the
deemed income or losses attributable thereto, determined pursuant
to the provisions of Section 3,2 below, as well as any other
applicable credits to or charges against such Account, on account
of deemed Company Contributions or distributions to participants or
similar transactions or adjustments to such Account.
III.2 The Corporation may, in its
sole discretion, make one or more deemed Company Contributions to
the Plan in such dollar amounts or shares of common stock of the
Corporation as the Corporation, in its sole discretion determines.
Deemed Company Contributions shall be allocated among the Accounts
of Participants as specified by the
Corporation in its sole discretion, as of the
Valuation Date immediately following the date of the Company
Contribution, or as provided in a Participant’s participation
agreement.
III.3 Each Participant’s
Account shall be deemed to be invested in common stock of the
Employer, plus any cash contributions or cash dividends which would
have been paid on such shares had such shares been owned by the
Participant. The Account of each Participant shall be deemed to be
credited with the amount of dividends, income, gains and losses
attributable thereto, as if the amounts credited to such Account
had been invested in common stock of the Corporation except to the
extent that the Company specifies that deemed contributions shall
be in cash. .
ARTICLE IV
BENEFITS
IV. 1 As provided in Article V, as
soon as practicable following the death of a Participant, the
Beneficiary of such Participant shall be paid the number of shares
of common stock deemed credited to such Participant’s
Account. In addition the Beneficiary shall be paid the amount of
deemed cash contributions and deemed cash dividends, if any, which
were allocated to the Participant’s Account plus any earnings
or losses thereon in the form of cash. The amount of any such
deemed cash contributions and deemed cash dividends shall be
determined as of the Valuation Date coincident with or next
preceding the date such amount is distributed.
IV.2 As provided in Article V, as
soon as practicable following a Participant’s Disability,
termination of employment or attainment of Normal Retirement Age,
such Participant shall be paid the number of shares of common stock
deemed credited to such Participant’s Account, plus any
earnings or losses thereon, in the form of cash. The amount of any
such deemed cash contributions and deemed cash dividends shall be
determined as of the Valuation Date coincident with or next
preceding the date such amount is distributed.
A Participant shall be deemed to
have terminated employment only upon his actual termination of
employment with the Corporation, and not upon a leave of absence or
other temporary cessation of services.
IV.3 Each Participant’s
Account shall be fully vested and nonforfeitable.
ARTICLE V
FROM OF PAYMENT OF
BENEFITS
V.1 Payment of a Participant’s
benefit as determined in accordance with Article IV on account
o
