Exhibit 10.17
THE
TIMBERLAND COMPANY
DEFERRED COMPENSATION PLAN
ARTICLE I
DEFINITIONS
1.1. DEFINITIONS. Whenever the
following words and phrases are used in this Plan, with the first
letter capitalized, they shall have the meanings specified
below.
(a) “Account” or
“Accounts”: one or more memorandum
(bookkeeping) accounts reflecting compensation deferred under
the Plan and adjustments for notional investment experience with
respect thereto.
(b) “Base Salary”: a
Participant’s annual base salary, excluding bonuses,
commissions, incentive and all other remuneration for services
rendered to Company.
(c) “Beneficiary” or
“Beneficiaries”: the person or persons, including a
trustee, personal representative or other fiduciary, last
designated in writing by a Participant in accordance with
procedures established by the Committee to receive the benefits
specified hereunder in the event of the Participant’s death.
The Committee may require, in the case of a married Participant,
the consent of the Participant’s spouse to the designation of
any non-spouse Beneficiary. No beneficiary designation shall become
effective until it is filed with the Committee. In the absence of a
valid beneficiary designation, the beneficiary of a deceased
Participant shall be deemed to be the Participant’s surviving
spouse or, if there is no surviving spouse, the Participant’s
estate.
(d) “Board”: the
Board of Directors of the Company.
(e) “Bonus”: any
annual or other bonus that is designated by the Committee as a
“Bonus” for purposes of this Plan.
(f) “Code”: the
Internal Revenue Code of 1986, as amended.
(g) “Commissions”:
remuneration, subject to such limitations as the Committee may
prescribe, that (i) is payable to an Eligible Employee for
services consisting of the direct sale of a product or service;
(ii) includes either a portion of the purchase price for the
product or service or an amount calculated solely by reference to
the volume of sales; and (iii) is contingent upon the Company
receiving payment for the product or service from an
“unrelated customer” within the meaning of Treasury
Regulation Section 1.409A-2(a)(10).
(h) “Committee”: the
individual or individuals appointed to administer the Plan in
accordance with Article VII.
(i) “Company”: The
Timberland Company.
(j) “Company
Account”: any Account other than a Deferral Account.
(k) “Compensation”:
Base Salary, Bonuses, Commissions (or any combination of the
foregoing), Board fees, in each case determined prior to deferrals
under this Plan or otherwise, and Refund of 401(k)
Contributions.
(l) “Deferral
Account”: an Account reflecting deferrals by a Participant of
his or her Compensation and adjustments for notional investment
experience with respect thereto.
(m) “Disability”: an
inability to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment that
can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, or such
other permissible definition of “disability” as set
forth in final regulations under Code Section 409A, as
determined by the Committee.
(n) “Distributable
Amount”: the vested balance in a Participant’s Account
or Accounts.
(o) “Early
Distribution”: a distribution pursuant to an election under
Section 6.2.
(p) “Effective
Date”: January 1, 2007, for this amendment and
restatement of the original plan document (adopted December 7,
2000, and effective January 1, 2001).
(q) “Eligible
Employee”: Any individual employed by the Company or a
participating subsidiary of the Company who is selected by the
Committee to be eligible to participate in the Plan. Except to the
extent the context indicates otherwise, the term “Eligible
Employee” shall include a member of the Board. The Committee
may require, as a condition to eligibility under the Plan, that an
employee complete such enrollment information, including without
limitation insurance forms for insurance on the employee’s
life to be owned by the Company, as the Committee may
determine.
(r) “Fund” or
“Funds”: one or more of the investment funds selected
by the Committee pursuant to Section 3.2(b) to measure
notional investment returns under the Plan. The Committee may at
any time and from time to time add or subtract Funds.
(s) “Hardship”: a
severe financial hardship to the Participant resulting from a
sudden and unexpected illness or accident; loss of property due to
casualty; or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of
the Participant, all as determined by the Committee in accordance
with Code Section 409A and related regulations.
(t) “Participant”:
an Eligible Employee or a member of the Board who is participating
in the Plan or a former Eligible Employee or member of the Board
with an Account that has not been distributed.
(u) “Payment Date”:
the date specified in accordance with the Plan for the payment or
commencement of payment of a Participant’s Account.
(v) “Plan”: The
Timberland Company Deferred Compensation Plan set forth herein and
as from time to time amended.
(w) “Plan Year”: the
calendar year.
(x) “Refund of 401(k)
Contributions”: amounts refunded under the Timberland
Retirement Earnings 401(k) Plan as a result of the average deferral
percentage test or the average contribution percentage test.
(aa) “Scheduled Withdrawal
Date”: A Payment Date elected by a Participant for an
in-service withdrawal of amounts attributable to a given Plan
Year’s deferral.
(bb) “Specified
Employee”: an employee who, at any time during the 12-month
period ending on the identification date, is a “specified
employee” under section 409A of the Code, as determined by
the Committee or its delegate. The determination of
Specified Employees, including the number and identity of persons
considered specified employees and the identification date, shall
be made by the Committee or its delegate in accordance with the
provisions of Code §§ 416(i) and 409A and the regulations
issued thereunder. For purposes of identifying Specified Employees,
the Company retains the discretion to make such determinations and
may take any necessary corporate action in accordance with this
Plan.
(cc) “Trust”: the
so-called “rabbi trust” maintained in connection with
the Plan.
(dd) “Trustee”: the
trustee of the Trust.
ARTICLE II
PARTICIPATION
Each Eligible Employee who elects a
deferral pursuant to Article III, and each other Eligible
Employee for whom an Account is maintained under the Plan, shall be
a Participant. An individual shall not cease to be a Participant
until his or her Accounts have been distributed or withdrawn in
full, but no Participant who is not an Eligible Employee shall be
entitled to defer additional amounts of Compensation under the
Plan.
ARTICLE III
DEFERRAL ELECTIONS
3.1. ELECTIONS TO DEFER
COMPENSATION.
(a) ELECTION UPON FIRST
ELIGIBILITY. Within 30 days after becoming an Eligible
Employee, an individual may make an initial election to defer
Compensation for services to be performed subsequent to the
election during the current Plan Year. If the Committee permits an
initial election to defer Compensation that includes a
performance-based Bonus where the election is made after the
performance period begins, the election will apply only to the
Bonus paid for services performed subsequent to the election,
determined by multiplying the total Bonus by the ratio of the
number of days in the performance period after the election over
the total number of days in the performance period.
(b) GENERAL RULE. As long as an
individual is an Eligible Employee, he or she may elect to defer
Compensation for services to be performed in each subsequent Plan
Year by making an annual election not later than 15 days prior
to the beginning of such subsequent Plan Year. In the case of
Commissions, services are deemed performed in the year in which the
customer pays the Company. Except as otherwise determined by the
Committee, any election to defer a Bonus pursuant to this
Section 3.1(b) must be made prior to the beginning of the Plan
Year or other period to which the Bonus relates. The Committee may
permit an election to defer a performance-based Bonus to be made
after the beginning of the Plan Year and not later than six months
before the end of the performance period, provided that
(i) the Eligible Employee making such election has performed
services continuously from the date the performance criteria are
established through the date such employee makes an initial
deferral election; (ii) the performance period is at least
twelve months, and (iii) the Bonus is not both substantially
certain to be paid and readily ascertainable when the election to
defer the Bonus is made.
(c) IRREVOCABILITY AND DURATION
OF DEFERRAL ELECTION. An election under Section 3.1(b) shall
continue in effect only for the next Plan Year and shall be
irrevocable during such year unless the Participant ceases to be an
Eligible Employee.
Notwithstanding the foregoing to the
contrary, the deferral election of an Eligible Employee who
receives a Hardship distribution pursuant to Section 6.3 shall
be cancelled upon payment of such distribution.
(d) FORM OF ELECTION. An
election to defer any Compensation under this Article III
shall be expressed either as a percentage of the Compensation or as
a dollar amount and shall be made on such form and in such manner
as prescribed by or acceptable to the Committee.
(e) MAXIMUM AND MINIMUM
DEFERRALS. An election under Section 3.1(b) shall not be given
effect to the extent it (together with other deferrals or
withholdings with respect to the Participant) would reduce the
amount otherwise payable on a current basis to the Participant
below the amount needed to satisfy FICA (including Medicare),
income taxes and employee benefit plan withholding requirements. If
an Eligible Employee elects a deferral under Section 3.1(b)
for any Plan Year, the minimum deferral amount shall be $5,000,
except in the case of a Refund of 401(k) Contributions.
3.2. NOTIONAL OR HYPOTHETICAL
INVESTMENT ELECTIONS.
(a) Each Participant shall
designate, in such manner as the Committee may determine, the Funds
in which his or her Accounts are to be deemed invested for purposes
of measuring the notional (hypothetical) investment return on
such Accounts. In designating one or more Funds pursuant to this
Section 3.2, the Participant may allocate the notional
investment of his or her Accounts in whole percentage increments,
subject to such other or additional allocation methods as may be
determined by the Committee. A Participant may reallocate his or
her Accounts among the notional investment alternatives represented
by available Funds at such time and in such manner as prescribed by
or acceptable to the Committee. If a Participant fails to allocate
any portion of his or her Accounts, he or she shall be deemed to
have designated as the measure of notional investment return for
such portion (i) if the Committee has selected a money market
Fund, such Fund, or (ii) if the Committee has not selected a
money-market Fund, a hypothetical savings account bearing a market
rate of interest, as determined by the Committee.
(b) The Committee shall
establish such reasonable rules as it deems appropriate to adjust
Accounts for notional investment experience.
ARTICLE IV
DEFERRAL ACCOUNTS AND TRUST
FUNDING
4.1. DEFERRAL ACCOUNTS.
The Committee shall establish and
maintain a Deferral Account for each Participant under the Plan and
shall establish and maintain such subaccounts as it deems necessary
or appropriate to track the notional investment selections or other
elections applicable to the Deferral Account, and to separately
track amounts deferred (and notional investment experience on such
amounts) before January 1, 2005. A Participant’s
Deferral Account shall be credited as follows:
(a) As soon as practicable after
amounts are withheld and deferred from a Participant’s
Compensation pursuant to an election under Section 3.1, the
Committee shall credit the Participant’s Deferral Account
with an amount equal to Compensation deferred by the Participant
and shall allocate such amount among the notional investment
selections made by the Participant pursuant to Section 3.2(a).
A credit made within five business days following the date of a
Participant’s deferral shall automatically be deemed to
satisfy the “as soon as practicable” standard of the
preceding sentence.
(b) Each Deferral Account shall
periodically be adjusted to reflect notional investment experience
in accordance with Section 3.2(b).
(c) In the event that a
Participant elects for a given Plan Year’s deferral of
Compensation to have a Scheduled Withdrawal Date, all amounts
attributed to the deferral of Compensation for such Plan Year shall
be accounted for in a manner which allows separate accounting for
the deferral of Compensation and notional investment experience
with respect thereto.
4.2. COMPANY ACCOUNT.
If the Company has determined to
credit additional amounts (that is, amounts other than Participant
deferrals and notional investment experience with respect thereto)
under the Plan, the Committee shall establish and maintain a
Company Account for each af
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