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Exhibit
10.1.16.1
C HESAPEAKE E
NERGY C ORPORATION
A MENDED
AND R ESTATED D
EFERRED C OMPENSATION P
LAN
E FFECTIVE
J ANUARY 1, 2008
Chesapeake Energy Corporation Amended
and Restated Deferred
Compensation Plan
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RTICLE I |
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Establishment and Purpose
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1 |
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RTICLE II |
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Definitions
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1 |
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RTICLE III |
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Eligibility and Participation
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9 |
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RTICLE IV |
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Deferrals
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10 |
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RTICLE V |
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Company Contributions
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13 |
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RTICLE VI |
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Benefits
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16 |
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RTICLE VII |
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Modifications to Payment
Schedules
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21 |
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RTICLE VIII |
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Valuation of Account Balances;
Investments
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21 |
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RTICLE IX |
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Administration
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23 |
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RTICLE X |
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Amendment and Termination
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24 |
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RTICLE XI |
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Informal Funding
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25 |
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RTICLE XII |
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Claims
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26 |
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RTICLE XIII |
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General Provisions
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Chesapeake Energy Corporation Amended
and Restated Deferred
Compensation Plan
A RTICLE
I
Establishment and
Purpose
Chesapeake Energy Corporation (the
“Company”) established the Chesapeake Energy
Corporation Deferred Compensation Plan, effective as of
January 1, 2003, and the Chesapeake Energy Corporation 401(k)
Make-Up Plan, also effective as of January 1, 2003 (the
“Prior Plans”). The Company hereby amends and restates
the Prior Plans, effective January 1, 2008, into a single
plan, to be hereafter known as the Chesapeake Energy Corporation
Amended and Restated Deferred Compensation Plan” (the
“Plan”).
This amendment and restatement applies
only to amounts deferred under the Prior Plans on or after
January 1, 2005, and to amounts deferred prior to
January 1, 2005 that were not vested as of December 31,
2004. Amounts deferred under the Prior Plans prior to
January 1, 2005 that were vested as of December 31, 2004
(the “Grandfathered Accounts”) shall be subject to the
provisions of the Prior Plans as in effect on October 3, 2004,
as the same may be amended from time to time by the Company without
material modification, it being expressly intended that such
Grandfathered Accounts are to remain exempt from the requirements
of Code Section 409A. The provisions of the Plan applicable to
Grandfathered Accounts are reflected in this document for ease of
reference.
The purpose of the Plan continues to be
to attract and retain key employees and Directors by providing each
Participant with an opportunity to defer receipt of a portion of
their salary, bonus, and other specified compensation. The Plan is
not intended to meet the qualification requirements of Code
Section 401(a), but is intended to meet the requirements of
Code Section 409A, and shall be operated and interpreted
consistent with that intent.
The Plan constitutes an unsecured
promise by a Participating Employer to pay benefits in the future.
Participants in the Plan shall have the status of general unsecured
creditors of the Company or the Adopting Employer, as applicable.
Each Participating Employer shall be solely responsible for payment
of the benefits of its employees and their beneficiaries. The Plan
is unfunded for Federal tax purposes and is intended to be an
unfunded arrangement for eligible employees who are part of a
select group of management or highly compensated employees of the
Employer within the meaning of Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA. Any amounts set aside to defray the liabilities
assumed by the Company or an Adopting Employer will remain the
general assets of the Company or the Adopting Employer and shall
remain subject to the claims of the Company’s or the Adopting
Employer's creditors until such amounts are distributed to the
Participants.
A RTICLE
II
Definitions
| 2.1 |
Account. Account means a bookkeeping account maintained
by the Committee to record the payment obligation of a
Participating Employer to a Participant as determined under the
terms of the Plan. The Committee may maintain an Account to record
the total obligation to a Participant and component Accounts to
reflect amounts payable at different times and in
different
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Chesapeake Energy Corporation Amended
and Restated Deferred
Compensation Plan
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forms. Reference to an
Account means any such Account established by the Committee, as the
context requires. Accounts are intended to constitute unfunded
obligations within the meaning of Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA.
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| 2.2 |
Account Balance. Account Balance means, with respect to
any Account, the total payment obligation owed to a Participant
from such Account as of the most recent Valuation Date. |
| 2.3 |
Adopting Employer. Adopting Employer means an Affiliate
who, with the consent of the Committee, has adopted the Plan for
the benefit of its eligible employees. |
| 2.4 |
Affiliate. Affiliate means a corporation, trade or
business that, together with the Company, is treated as a single
employer under Code Section 414(b) or (c). |
| 2.5 |
Beneficiary. Beneficiary means a natural person, estate,
or trust designated by a Participant to receive payments to which a
Beneficiary is entitled in accordance with provisions of the Plan.
The Participant’s spouse, if living, otherwise the
Participant’s estate, shall be the Beneficiary if:
(i) the Participant has failed to properly designate a
Beneficiary, or (ii) all designated Beneficiaries have
predeceased the Participant. |
A former spouse shall have no
interest under the Plan, as Beneficiary or otherwise, unless the
Participant designates such person as a Beneficiary after
dissolution of the marriage.
| 2.6 |
Business Day . A Business Day is each day on which the
New York Stock Exchange is open for business. |
| 2.7 |
Change in Control . Change in Control, with respect to a
Participating Employer that is organized as a corporation, occurs
on the date on which any of the following events occur (i) a
change in the ownership of the Participating Employer; (ii) a
change in the effective control of the Participating Employer;
(iii) a change in the ownership of a substantial portion of
the assets of the Participating Employer. |
For purposes of this Section,
a change in the ownership of the Participating Employer occurs on
the date on which any one person, or more than one person acting as
a group, acquires ownership of stock of the Participating Employer
that, together with stock held by such person or group constitutes
more than 50% of the total fair market value or total voting power
of the stock of the Participating Employer. A change in the
effective control of the Participating Employer occurs on the date
on which either (i) a person, or more than one person acting
as a group, acquires ownership of stock of the Participating
Employer possessing 35% or more of the total voting power of the
stock of the Participating Employer, taking into account all such
stock acquired during the 12-month period ending on the date of the
most recent acquisition, or (ii) a majority of the members of
the
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Chesapeake Energy Corporation Amended
and Restated Deferred
Compensation Plan
Participating
Employer’s Board of Directors is replaced during any 12-month
period by directors whose appointment or election is not endorsed
by a majority of the members of such Board of Directors prior to
the date of the appointment or election, but only if no other
corporation is a majority shareholder of the Participating
Employer. A change in the ownership of a substantial portion of
assets occurs on the date on which any one person, or more than one
person acting as a group, other than a person or group of persons
that is related to the Participating Employer, acquires assets from
the Participating Employer that have a total gross fair market
value equal to or more than 40% of the total gross fair market
value of all of the assets of the Participating Employer
immediately prior to such acquisition or acquisitions, taking into
account all such assets acquired during the 12-month period ending
on the date of the most recent acquisition.
An event constitutes a Change
in Control with respect to a Participant only if the Participant
performs services for the Participating Employer that has
experienced the Change in Control, or the Participant’s
relationship to the affected Participating Employer otherwise
satisfies the requirements of Treasury Regulation
Section 1.409A-3(i)(5)(ii).
The determination as to the
occurrence of a Change in Control shall be based on objective facts
and in accordance with the requirements of Code
Section 409A.
| 2.8 |
Claimant. Claimant means a Participant or Beneficiary
filing a claim under Article XII of this Plan. |
| 2.9 |
Code. Code means the Internal Revenue Code of 1986, as
amended from time to time. |
| 2.10 |
Code Section 409A. Code Section 409A means
section 409A of the Code, and regulations and other guidance issued
by the Treasury Department and Internal Revenue Service
thereunder. |
| 2.11 |
Committee. Committee means the committee appointed by
the Board of Directors of the Company (or the appropriate committee
of such board) to administer the Plan. If no designation is made,
the Chief Executive Officer of the Company or his delegate shall
have and exercise the powers of the Committee. |
| 2.12 |
Company. Company means Chesapeake Energy
Corporation. |
| 2.13 |
Company Contribution. Company Contribution means a
credit by a Participating Employer to a Participant’s
Account(s) in accordance with the provisions of Article V of the
Plan. Company Contributions are credited at the sole discretion of
the Participating Employer and the fact that a Company Contribution
is credited in one year shall not obligate the Participating
Employer to continue to make such Company Contribution in
subsequent years. Unless the context clearly indicates otherwise, a
reference to Company Contribution shall include Earnings
attributable to such contribution. |
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Chesapeake Energy Corporation Amended
and Restated Deferred
Compensation Plan
| 2.14 |
Company Stock. Company Stock means phantom shares of
common stock issued by the Company. |
| 2.15 |
Compensation. Compensation means a Participant’s
base salary, bonus, commission, Director fees, and such other cash
or equity-based compensation (if any) approved by the Committee as
Compensation that may be deferred under this Plan. Compensation
shall not include any compensation that has been previously
deferred under this Plan or any other arrangement subject to Code
Section 409A. |
| 2.16 |
Compensation Deferral Agreement. Compensation Deferral
Agreement means an agreement between a Participant and a
Participating Employer that specifies (i) the amount of each
component of Compensation that the Participant has elected to defer
to the Plan in accordance with the provisions of Article IV, and
(ii) the Payment Schedule applicable to one or more Accounts.
The Committee may permit different deferral amounts for each
component of Compensation and may establish a minimum or maximum
deferral amount for each such component. Unless otherwise specified
by the Committee in the Compensation Deferral Agreement,
Participants may defer up to 75% of their base salary and up to
100% of other types of Compensation for a Plan Year. A Compensation
Deferral Agreement may also specify the investment allocation
described in Section 8.4. |
| 2.17 |
Death Benefit. Death Benefit means the benefit payable
under the Plan to a Participant’s Beneficiary(ies) upon the
Participant’s death as provided in Section 6.1 of the
Plan. |
| 2.18 |
Deferral. Deferral means a credit to a
Participant’s Account(s) that records that portion of the
Participant’s Compensation that the Participant has elected
to defer to the Plan in accordance with the provisions of Article
IV. Unless the context of the Plan clearly indicates otherwise, a
reference to Deferrals includes Earnings attributable to such
Deferrals. |
Deferrals shall be calculated
with respect to the gross cash Compensation payable to the
Participant prior to any deductions or withholdings, but shall be
reduced by the Committee as necessary so that it does not exceed
100% of the cash Compensation of the Participant remaining after
deduction of all required income and employment taxes, 401(k) and
other employee benefit deductions, and other deductions required by
law. Changes to payroll withholdings that affect the amount of
Compensation being deferred to the Plan shall be allowed only to
the extent permissible under Code Section 409A.
| 2.19 |
Director. Director means a member of the Board of
Directors of the Company. |
| 2.20 |
Disability Benefit. Disability Benefit means the benefit
payable under the Plan to a Participant in the event such
Participant is determined to be Disabled. |
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Chesapeake Energy Corporation Amended
and Restated Deferred
Compensation Plan
| 2.21 |
Disabled. Disabled means that a Participant 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 twelve months,
(i) unable to engage in any substantial gainful activity, or
(ii) receiving income replacement benefits for a period of not
less than three months under an accident and health plan covering
employees of the Participant’s employer. The Committee shall
determine whether a Participant is Disabled in accordance with Code
Section 409A provided, however, that a Participant shall be
deemed to be Disabled if determined to be totally disabled by the
Social Security Administration or the Railroad Retirement Board.
Notwithstanding anything to the contrary herein, Disability with
respect to a Grandfathered Account means a physical or mental
disability as a result of which, at least 180 days after
commencement of such disability, the Participant is determined, by
a physician selected by the Company and acceptable to the
Participant or the Participant’s legal representative, to be
totally and permanently disabled. |
| 2.22 |
Earnings. Earnings means an adjustment to the value of
an Account in accordance with Article VIII. |
| 2.23 |
Effective Date. Effective Date means January 1,
2008. |
| 2.24 |
Eligible Employee. Eligible Employee means, for a Plan
Year, a member of a “select group of management or highly
compensated employees” of a Participating Employer within the
meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, as
determined by the Committee from time to time in its sole
discretion, who has been designated by the Committee as eligible to
participate in the Plan. The Committee may in its discretion
establish criteria to use in determining which Employees are
Eligible Employees, which criteria may include income level, period
of employment, participation in other plans, or such other criteria
as it may deem appropriate. Any criteria established may be
described on an Exhibit A to the Plan, and such criteria can be
amended from time to time without formal amendment of the
Plan. |
| 2.25 |
Employee. Employee means a common-law employee of an
Employer. |
| 2.26 |
Employer. Employer means, with respect to Employees it
employs, the Company and each Affiliate. |
| 2.27 |
ERISA. ERISA means the Employee Retirement Income
Security Act of 1974, as amended from time to time. |
| 2.28 |
Fiscal Year Compensation. Fiscal Year Compensation means
Compensation earned during one or more consecutive fiscal years of
a Participating Employer, all of which is paid after the last day
of such fiscal year or years. |
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Chesapeake Energy Corporation Amended
and Restated Deferred
Compensation Plan
| 2.29 |
Grandfathered Account. Grandfathered Account means
amounts deferred under the Prior Plans prior to January 1,
2005 that were vested as of December 31, 2004. |
| 2.30 |
Participant. Participant means an Eligible Employee or a
Director who has received notification of his or her eligibility to
defer Compensation under the Plan under Section 3.1 and any
other person with an Account Balance greater than zero, regardless
of whether such individual continues to be an Eligible Employee or
a Director. A Participant’s continued participation in the
Plan shall be governed by Section 3.2 of the Plan. |
| 2.31 |
Participating Employer. Participating Employer means the
Company and each Adopting Employer. |
| 2.32 |
Payment Schedule. Payment Schedule means the date as of
which payment of an Account under the Plan will commence and the
form in which payment of such Account will be made. |
| 2.33 |
Performance-Based Compensation. Performance-Based
Compensation means Compensation where the amount of, or entitlement
to, the Compensation is contingent on the satisfaction of
pre-established organizational or individual performance criteria
relating to a performance period of at least twelve consecutive
months. Organizational or individual performance criteria are
considered pre-established if established in writing by not later
than ninety (90) days after the commencement of the period of
service to which the criteria relate, provided that the outcome is
substantially uncertain at the time the criteria are established.
The determination of whether Compensation qualifies as
“Performance-Based Compensation” will be made in
accordance with Treas. Reg. Section 1.409A-1(e) and subsequent
guidance. |
| 2.34 |
Plan. Generally, the term Plan means the
“Chesapeake Energy Corporation Amended and Restated Deferred
Compensation Plan” as documented herein and as may be amended
from time to time hereafter. However, to the extent permitted or
required under Code Section 409A, the term Plan may in the
appropriate context also mean a portion of the Plan that is treated
as a single plan under Treas. Reg. Section 1.409A-1(c), or the
Plan or portion of the Plan and any other nonqualified deferred
compensation plan or portion thereof that is treated as a single
plan under such section. |
| 2.35 |
Plan Year. Plan Year means January 1 through
December 31. |
| 2.36 |
Qualified Plan. Qualified Plan means the Chesapeake
Energy Corporation Savings and Incentive Stock Bonus
Plan. |
| 2.37 |
Retirement. Retirement means a Participant’s
Separation from Service after attainment of age fifty-five
(55) and completion of ten (10) Years of
Service. |
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Chesapeake Energy Corporation Amended
and Restated Deferred
Compensation Plan
| 2.38 |
Retirement Benefit. Retirement Benefit means the benefit
payable to a Participant under the Plan following the Retirement of
the Participant. |
| 2.39 |
Retirement/Termination Account. Retirement/Termination
Account means an Account established by the Committee to record the
amounts payable to a Participant that have not been allocated to a
Specified Date Account. Unless the Participant has established a
Specified Date Account, all Deferrals and Company Contributions
shall be allocated to a Retirement/Termination Account on behalf of
the Participant. |
| 2.40 |
Separation from Service. An Employee incurs a Separation
from Service upon termination of employment with the Employer. A
Director incurs a Separation from Service upon the expiration of
all contracts with the Employer, provided the contractual
relationship has in good faith been completely terminated. Whether
a Separation from Service has occurred shall be determined by the
Committee in accordance with Code Section 409A. |
Except in the case of an
Employee on a bona fide leave of absence as provided below, an
Employee is deemed to have incurred a Separation from Service if
the Employer and the Employee reasonably anticipated that the level
of services to be performed by the Employee after a date certain
would be reduced to 20% or less of the average services rendered by
the Employee during the immediately preceding 36-month period (or
the total period of employment, if less than 36 months),
disregarding periods during which the Employee was on a bona fide
leave of absence.
An Employee who is absent
from work due to military leave, sick leave, or other bona fide
leave of absence shall incur a Separation from Service on the first
date immediately following the later of (i) the six-month
anniversary of the commencement of the leave or (ii) the
expiration of the Employee’s right, if any, to reemployment
under statute or contract.
If a Participant is both a
Director and an Employee, the services provided as a Director shall
be disregarded in determining whether there has been a Separation
from Service as an Employee, and the services provided as an
Employee shall be disregarded in determining whether there has been
a Separation from Service as a Director, provided the portion of
the Plan in which the Participant participates as a Director is
substantially similar to arrangements covering non-Employee
Directors.
For purposes of determining
whether a Separation from Service has occurred, the Employer means
the Employer as defined in Section 2.26 of the Plan, except
that for purposes of determining whether another organization is an
Affiliate of the Company, common ownership of at least 50% shall be
determinative.
The Committee specifically
reserves the right to determine whether a sale or other disposition
of substantial assets to an unrelated party constitutes a
Separation from Service with respect to a Participant providing
services to the seller immediately
Page 7 of
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Chesapeake Energy Corporation Amended
and Restated Deferred
Compensation Plan
prior to the transaction and
providing services to the buyer after the transaction. Such
determination shall be made in accordance with the requirements of
Code Section 409A.
| 2.41 |
Specified Date Account. A Specified Date Account means
an Account established pursuant to Section 4.3 that will be
paid (or that will commence to be paid) at a future date as
specified in the Participant’s Compensation Deferral
Agreement. Unless otherwise determined by the Committee, a
Participant may maintain no more than five (5) Specified Date
Accounts. A Specified Date Account may be identified in enrollment
materials as an “In-Service Account”. |
| 2.42 |
Specified Date Benefit. Specified Date Benefit means the
benefit payable to a Participant under the Plan in accordance with
Section 6.1(c). |
| 2.43 |
Specified Employee. Specified Employee means an Employee
who, as of the date of his Separation from Service, is a “key
employee” of the Company or any Affiliate, any stock of which
is actively traded on an established securities market or
otherwise. An Employee is a key employee if he meets the
requirements of Code Section 416(i)(1)(A)(i), (ii), or
(iii) (applied in accordance with applicable regulations
thereunder and without regard to Code Section 416(i)(5)) at
any time during the 12-month period ending on the Specified
Employee Identification Date. Such Employee shall be treated as a
key employee for the entire 12-month period beginning on the
Specified Employee Effective Date. |
For purposes of determining
whether an Employee is a Specified Employee, the compensation of
the Employee shall be determined in accordance with the definition
of compensation provided under Treas. Reg.
Section 1.415(c)-2(d)(3) (wages within the meaning of Code
section 3401(a) for purposes of income tax withholding at the
source, plus amounts excludible from gross income under section
125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k) or 457(b),
without regard to rules that limit the remuneration included in
wages based on the nature or location of the employment or the
services performed); provided, however, that, with respect to a
nonresident alien who is not a Participant in the Plan,
compensation shall not include compensation that is not includible
in the gross income of the Employee under Code Sections 872, 893,
894, 911, 931 and 933, provided such compensation is not
effectively connected with the conduct of a trade or business
within the United States.
Notwithstanding anything in
this paragraph to the contrary, (i) if a different definition
of compensation has been designated by the Company with respect to
another nonqualified deferred compensation plan in which a key
employee participates, the definition of compensation shall be the
definition provided in Treas. Reg. Section 1.409A-1(i)(2), and
(ii) the Company may through action that is legally binding
with respect to all nonqualified deferred compensation plans
maintained by the Company, elect to use a different definition of
compensation.
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Chesapeake Energy Corporation Amended
and Restated Deferred
Compensation Plan
In the event of corporate
transactions described in Treas. Reg. Section 1.409A-1(i)6),
the identification of Specified Employees shall be determined in
accordance with the default rules described therein, unless the
Employer elects to utilize the available alternative methodology
through designations made within the timeframes specified
therein.
| 2.44 |
Specified Employee Identification Date. Specified
Employee Identification Date means December 31, unless the
Employer has elected a different date through action that is
legally binding with respect to all nonqualified deferred
compensation plans maintained by the Employer. |
| 2.45 |
Specified Employee Effective Date. Specified Employee
Effective Date means the first day of the fourth month following
the Specified Employee Identification Date, or such earlier date as
is selected by the Committee. |
| 2.46 |
Substantial Risk of Forfeiture. Substantial Risk of
Forfeiture shall have the meaning specified in Treas. Reg.
Section 1.409A-1(d). |
| 2.47 |
Termination Benefit. Termination Benefit means the
benefit payable to a Participant under the Plan following the
Participant’s Separation from Service prior to
Retirement. |
| 2.48 |
Unforeseeable Emergency. An Unforeseeable Emergency
means a severe financial hardship to the Participant resulting from
an illness or accident of the Participant, the Participant’s
spouse, the Participant’s dependent (as defined in Code
section 152, without regard to section 152(b)(1), (b)(2), and
(d)(1)(B)), or a Beneficiary; loss of the Participant’s
property due to casualty (including the need to rebuild a home
following damage to a home not otherwise covered by insurance, for
example, as a result of a natural disaster); or other similar
extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant. The types of
events which may qualify as an Unforeseeable Emergency may be
limited by the Committee. |
| 2.49 |
Valuation Date. Valuation Date shall mean each Business
Day. |
| 2.50 |
Year of Service . A Year of Service shall mean each
12-month period of continuous service with the
Employer. |
A RTICLE
III
Eligibility and
Participation
| 3.1 |
Eligibility and Participation. An Eligible Employee or a
Director becomes a Participant upon the earlier to occur of
(i) a credit of Company Contributions under Article V or
(ii) receipt of notification of eligibility to
participate. |
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Chesapeake Energy Corporation Amended
and Restated Deferred
Compensation Plan
| 3.2 |
Duration. A Participant shall be eligible to defer
Compensation and receive allocations of Company Contributions,
subject to the terms of the Plan, for as long as such Participant
remains an Eligible Employee or a Director. A Participant who is no
longer an Eligible Employee or a Director but has not Separated
from Service may not defer Compensation under the Plan but may
otherwise exercise all of the rights of a Participant under the
Plan with respect to his or her Account(s). On and after a
Separation from Service, a Participant shall remain a Participant
as long as his or her Account Balance is greater than zero and
during such time may continue to make allocation elections as
provided in Section 8.4. An individual shall cease being a
Participant in the Plan when all benefits under the Plan to which
he or she is entitled have been paid |
A RTICLE
IV
Deferrals
| 4.1 |
Deferral Elections, Generally. |
| |
(a) |
A Participant shall submit a Compensation Deferral Agreement
during the enrollment periods established by the Committee and in
the manner specified by the Committee, but in any event, in
accordance with Section 4.2. A Compensation Deferral Agreement
that is not timely filed with respect to a service period or
component of Compensation shall be considered void and shall have
no effect with respect to such service period or Compensation. The
Committee may modify any Compensation Deferral Agreement prior to
the date the election becomes irrevocable under the rules of
Section 4.2. |
| |
(b) |
The Participant may elect on the Compensation Deferral
Agreement to defer (i) an amount of Compensation equal to the
percentage of Compensation he has elected to defer to the Qualified
Plan reduced by the maximum amount he is permitted to defer to such
plan, and/or (ii) additional amounts of Compensation that are
independent of his deferral election under the Qualified Plan. The
deferral election under the Qualified Plan shall be irrevocable for
a year to the extent the Participant makes an election of the type
described in (i) above. |
| |
(c) |
The Participant shall specify on his or her Compensation
Deferral Agreement whether to allocate Deferrals to a
Retirement/Termination Account or to a Specified Date Account. If
no designation is made, all Deferrals shall be allocated to the
Retirement/Termination Account. A Participant may also specify in
his or her Compensation Deferral Agreement the Payment Schedule
applicable to his or her Plan Accounts. If the Payment Schedule is
not specified in a Compensation Deferral Agreement, the Payment
Schedule shall be the Payment Schedule specified in
Section 6.2. |
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Chesapeake Energy Corporation Amended
and Restated Deferred
Compensation Plan
| |
(d) |
Notwithstanding any other provision of this Plan, a Director
may not establish a Specified Date Account or allocate Deferrals to
an existing Specified Date Account. All Deferrals by a Director
shall be allocated to such Director’s Retirement/Termination
Account. |
| 4.2 |
Timing Requirements for Compensation Deferral
Agreements. |
| |
(a) |
First Year of Eligibility. In the case of the first year
in which an Eligible Employee or a Director becomes eligible to
participate in the Plan, he has up to 30 days following his initial
eligibility to submit a Compensation Deferral Agreement with
respect to Compensation to be earned during such year. The
Compensation Deferral Agreement described in this paragraph becomes
irrevocable upon the end of such 30-day period. The determination
of whether an Eligible Employee or a Director may file a
Compensation Deferral Agreement under this paragraph shall be
determined in accordance with the rules of Code Section 409A,
including the provisions of Treas. Reg.
Section 1.409A-2(a)(7). |
A Compensation Deferral
Agreement filed under this paragraph applies to Compensation earned
on and after the date the Compensation Deferral Agreement becomes
irrevocable.
| |
(b) |
Prior Year Election. Except as otherwise provided in
this Section 4.2, Participants may defer Compensation by
filing a Compensation Deferral Agreement no later than
December 31 of the year prior to the year in which the
Compensation to be deferred is earned. A Compensation Deferral
Agreement described in this paragraph shall become irrevocable with
respect to such Compensation as of January 1 of the year in
which such Compensation is earned. |
| |
(c) |
Performance-Based Compensation. Participants may file a
Compensation Deferral Agreement with respect to Performance-Based
Compensation no later than the date that is six months before the
end of the performance period, provided that: |
| |
(i) |
the Participant performs services continuously from the later
of the beginning of the performance period or the date the criteria
are established through the date the Compensation Deferral
Agreement is submitted; and |
| |
(ii) |
the Compensation is not readily ascertainable as of the date
the Compensation Deferral Agreement is filed. |
A Compensation Deferral
Agreement becomes irrevocable with respect to Performance-Based
Compensation as of the day immediately following the latest date
for filing such election. Any election to defer Performance-Based
Compensation that is made in accordance with this paragraph and
that becomes payable as a result of the Participant’s death
or disability (as defined in Treas.
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Reg.
Section 1.409A-1(e)) or upon a Change in Control (as defined
in Treas. Reg. Section 1.409A-3(i)(5)) prior to the
satisfaction of the performance criteria, will be void.
| |
(d) |
Fiscal Year Compensation. A Participant may defer Fiscal
Year Compensation by filing a Compensation Deferral Agreement prior
to the first day of the fiscal year or years in which such Fiscal
Year Compensation is earned. The Compensation Deferral Agreement
described in this paragraph becomes irrevocable on the first day of
the fiscal year or years to which it applies. |
| |
(e) |
Short-Term Deferrals. Compensation that meets the
definition of a “short-term deferral” described in
Treas. Reg. Section 1.409A-1(b)(4) may be deferred in
accordance with the rules of Article VII, applied as if the date
the Substantial Risk of Forfeiture lapses is the date payments were
originally scheduled to commence, provided, however, that the
provisions of Section 7.3 shall not apply to payments
attributable to a Change in Control (as defined in Treas. Reg.
Section 1.409A-3(i)(5)). |
| |
(f) |
Certain Forfeitable Rights. With respect to a legally
binding right to a payment in a subsequent year that is subject to
a forfeiture condition requiring the Participant’s continued
services for a period of at least twelve months from the date the
Participant obtains the legally binding right, an election to defer
such Compensation may be made on or before the 30th day after the
Participant obtains the legally binding right to the Compensation,
provided that the election is made at least twelve months in
advance of the earliest date at which the forfeiture condition
could lapse. The Compensation Deferral Agreement described in this
paragraph becomes irrevocable after such 30th day. If the
forfeiture condition applicable to the payment lapses before the
end of the required service period as a result of the
Participant’s death or disability (as defined in Treas. Reg.
Section 1.409A-3(i)(4)) or upon a Change in Control (as
defined in Treas. Reg. Section 1.409A-3(i)(5)), the
Compensation Deferral Agreement will be void unless it would be
considered timely under another rule described in this
Section. |
| |
(g) |
Company Awards. Participating Employers may unilaterally
provide for deferrals of Company awards prior to the date of such
awards. Deferrals of Company awards (such as sign-on, retention, or
severance pay) may be negotiated with a Participant prior to the
date the Participant has a legally binding right to such
Compensation. |
| |
(h) |
“Evergreen” Deferral Elections. The
Committee, in its discretion, may provide in the Compensation
Deferral Agreement that such Compensation Deferral Agreement will
continue in effect for each subsequent year or performance period.
Such “evergreen” Compensation Deferral Agreements will
become effective with respect to an item of Compensation on the
date such election becomes irrevocable under this Section 4.2.
An evergreen Compensation Deferral Agreement may be
|
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| |
terminated or modified
prospectively with respect to Compensation for which such election
remains revocable under this Section 4.2. A Participant whose
Compensation Deferral Agreement is cancelled in accordance with
Section 4.6 will be required to file a new Compensation
Deferral Agreement under this Article IV in order to recommence
Deferrals under the Plan.
|
| 4.3 |
Allocation of Deferrals. Except as provided in
Section 4.1(c), a Compensation Deferral Agreement may allocate
Deferrals to one or more Specified Date Accounts and/or to the
Retirement/Termination Account. The Committee may, in its
discretion, establish a minimum deferral period for Specified Date
Accounts (for example, the third Plan Year following the year
Compensation subject to the Compensation Deferral Agreement is
earned). |
| 4.4 |
Deductions from Pay. The Committee has the authority to
determine the payroll practices under which any component of
Compensation subject to a Compensation Deferral Agreement will be
deducted from a Participant’s Compensation. |
| 4.5 |
Vesting. Participant Deferrals shall be 100% vested at
all times. |
|
4.6
|
Cancellation of
Deferrals. The Committee may cancel a Participant’s
Deferrals (i) for the balance of the Plan Year in which an
Unforeseeable Emergency payment occurs and for the following Plan
Year, (ii) if the Participant receives a hardship distribution
under the Employer’s qualified 401(k) plan, through the end
of the Plan Year in which the six-month anniversary of the hardship
distribution falls, and (iii) during periods in which the
Participant is unable to perform the duties of his or her position
or any substantially similar position due to a mental or physical
impairment that can be expected to result in death or last for a
continuous period of at least six months, provided cancellation
occurs by the later of the end of the taxable year of the
Participant or the 15 th day
of the third month following the date the Participant incurs the
disability (as defined in this paragraph (iii)).
|
A RTICLE
V
Company Contributions
| 5.1 |
Company Make-Up Contribution . Provided the
Participating Employer has made the maximum matching contribution
to the Qualified Plan that is permissible under Section 401(m)
of the Code, a Participating Employer will credit to the
Retirement/Termination Account of each eligible Participant a
Company Make-Up Contribution in an amount (if any) equal to
(a) minus (b) below: |
| |
(a) |
100% of a Participant’s Deferrals into this Plan that do
not exceed 15% of such Participant’s base salary and bonus
(or such other percentage as determined by the Committee in its
discretion); |
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(b) |
The actual amount of any Company matching contributions to its
qualified 401(k) plan for such Participant during the Plan
Year. |
To be an eligible Participant
for purposes of this Section 5.1, the Participant must
(i) be a Participant in the Qualified Plan, (b) have made
the maximum contribution allowable under the Qualified Plan and
(c) have experienced a reduction in the benefits he would have
received from the Qualified Plan as a result of the limitations of
Section 401(a)(17) of the Code.
| 5.2 |
Discretionary Company Contributions. The Participating
Employer may, from time to time in its sole and absolute
discretion, credit Company Contribu |
|
