ITT
DEFERRED COMPENSATION PLAN
Effective as of January 1,
1995
as amended and restated as of December 31, 2008
ITT DEFERRED COMPENSATION
PLAN
The ITT
Deferred Compensation Plan (the “Plan”) was established
by ITT Corporation, a Delaware corporation (“Former
ITT”), effective January 1, 1995. The purpose of the
Plan is to provide each Participant with a means of deferring
compensation in accordance with the terms of the Plan.
Effective as of
December 19, 1995, Former ITT split into three separate
companies — ITT Hartford Group, Inc., ITT Corporation, a
Nevada corporation, and ITT Industries, Inc. an Indiana corporation
(the “Corporation”), which is the successor to Former
ITT.
Under the
Employee Benefits Service and Liability Agreement dated
November 1, 1995 (the “Agreement”) the Corporation
agreed to continue the Plan for eligible employees of the
Corporation or of any of its subsidiaries and to transfer the
liabilities attributable to participants who become employees of
ITT Corporation, a Nevada corporation, on December 19, 1995 to
ITT Corporation.
Effective as of
January 1, 1996, the Plan was amended to accept the
liabilities under the ITT Industries Excess Savings Plan
attributable to salary deferrals, excess matching contributions,
and excess floor contributions credited with respect to Base Salary
deferred under this Plan and hold such amounts hereunder in
accordance with the provisions of the ITT Industries Excess Savings
Plan as set forth in Appendix A, attached hereto and made part
hereof.
Effective as of
October 1, 1997, January 1, 1998, April 1, 1998,
January 1, 1999, and November 1, 2000, the Plan was
further amended to make certain administration changes to unify the
form and timing of Plan distributions, respectively. Effective as
of March 1, 2004, the Plan was further amended to provide that
a Participant may make a separate investment election with respect
to future deferrals. Effective as of July 1, 2004, the Plan
was amended and restated to make certain administrative changes and
to unify the definition of Acceleration Event with other employee
benefit plans of ITT Industries. Effective as of July 1, 2006,
the Plan’s name was revised to the ITT Deferred Compensation
Plan.
The Plan is
hereby amended and restated, effective as of December 31, 2008
to comply with the provisions of Section 409A of the Internal
Revenue Code and regulations promulgated thereunder.
The provisions
of this Plan as herein amended shall apply to amounts deferred on
or after January 1, 2005. Amounts deferred under the provisions of
the Plan prior to January 1, 2005, which were vested as of
December 31, 2004, shall be subject to the provisions of the
Plan as in effect on October 3, 2004 (attached hereto as
Appendix C and made part hereof) without regard to any Plan
amendments after October 3, 2004 which would constitute a
material modification for Code Section 409A purposes, unless
otherwise provided in Appendix B attached hereto.
All benefits
payable under this Plan, which constitutes a nonqualified, unfunded
deferred compensation plan for a select group of management or
highly-compensated employees under Title I of ERISA, shall be paid
out of the general assets of the Company.
ITT DEFERRED COMPENSATION
PLAN
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Page
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3
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ARTICLE 2 — PARTICIPATION
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7
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7
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7
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2.03 Termination of
Participation
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7
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9
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9
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10
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3.03 Crediting to Deferral
Account
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11
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11
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3.05 Unforeseeable Emergency
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11
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ARTICLE 4 — MAINTENANCE OF
ACCOUNTS
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12
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4.01 Adjustment of Account
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12
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4.02 Investment Performance
Elections
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12
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4.03 Changing Investment
Elections
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13
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13
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4.05 Valuation of Accounts
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14
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4.06 Compliance with Securities Laws and
Trading Policies and Procedures
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14
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ARTICLE 5 — PAYMENT OF
BENEFITS
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16
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5.01 Commencement of Payment
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16
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18
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5.03 Change of Distribution
Election
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20
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22
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22
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5.06 Payment upon the Occurrence of a Change
in Control
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23
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5.07 Acceleration of or Delay in
Payments
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23
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5.08 Designation of
Beneficiary
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23
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24
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ARTICLE 6 — AMENDMENT OR
TERMINATION
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25
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25
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25
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i
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ARTICLE 7 — GENERAL
PROVISIONS
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26
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26
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7.02 No Contract of Employment
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26
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26
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26
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27
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27
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27
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28
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29
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7.10 Discharge of Corporation’s
Obligation
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29
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30
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30
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ARTICLE 8 — ADMINISTRATION
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31
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31
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32
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35
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37
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1.01
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“Acceleration
Event” shall mean an “Acceleration
Event” as such term is defined under the provisions of the
Plan as in effect on October 3, 2004.
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1.02
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“Administrative
Committee” shall mean the person or persons
appointed to administer the Plan as provided in
Section 8.01.
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1.03
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“Associated
Company” shall mean any division, subsidiary
or affiliated company of the Corporation which is an Associated
Company or Participating Unit, as such terms are defined in the ITT
Salaried Retirement Plan (formerly known as ITT Industries Salaried
Retirement Plan) as amended from time to time.
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1.04
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“Base Salary”
shall mean the annual
base fixed compensation paid periodically during the calendar year,
determined prior to any pre-tax contributions under a
“qualified cash or deferred arrangement” (as defined
under Code Section 401(k) and its applicable regulations) or under
a “cafeteria plan” (as defined under Code
Section 125 and its applicable regulations) or a qualified
transportation fringe benefit under Section 132(f) of the Code and
any deferrals under Article 3, Appendix A or another
unfunded deferred compensation plan maintained by the Corporation,
but excluding any overtime, bonuses, foreign service allowances or
any other form of compensation, except to the extent otherwise
deemed “Base Salary” for purposes of the Plan under
rules as are adopted by the Compensation and Personnel
Committee.
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1.05
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“Beneficiary”
shall mean the person or
persons designated by a Participant pursuant to the provisions of
Section 5.08 in a time and manner determined by the
Administrative Committee to receive the amounts, if any, payable
under the Plan upon the death of the Participant.
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1.06
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“Bonus”
shall mean the cash
amount, if any, awarded to an employee of the Company under the
Company’s executive bonus program, or other compensation
program designated by the Compensation and Personnel Committee as a
bonus hereunder, provided that such amount qualifies as
“Performance Based Compensation”.
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1.07
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“Board of
Directors” or “ Board ”
shall mean the Board of Directors of the Corporation.
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Page 4
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1.08
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“Change in
Control” shall mean a “Change in
Control” as such term is defined in the ITT Excess Pension
Plan IIA, as amended from time to time.
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1.09
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“Code”
shall mean the Internal
Revenue Code of 1986, as amended from time to time.
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1.10
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“Company”
shall mean the
Corporation and any successor thereto, with respect to its
employees and any Associated Company authorized by the Compensation
and Personnel Committee to participate in the Plan with respect to
their employees.
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1.11
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“Compensation and Personnel
Committee” shall mean the Compensation and
Personnel Committee of the Board of Directors.
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1.12
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“Corporation”
shall mean ITT
Corporation, an Indiana corporation (successor by merger to and
formerly known as ITT Industries, Inc.), or any successor by
merger, purchase, or otherwise.
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1.13
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“Deferral
Account” shall mean the bookkeeping account
maintained for each Participant to record the amount of Bonus
deferred on or after January 1, 2005 by a Participant in
accordance with Article 3, adjusted pursuant to
Article 4. The Deferral Account shall contain subaccounts,
such as a Termination Subaccount, Special Purpose Subaccount(s), a
Deferral 2005 Subaccount or any other subaccount established by the
Administrative Committee.
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1.14
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“Deferral
Agreement” shall mean the completed agreement,
including any amendments, attachments and appendices thereto, in
such form approved by the Administrative Committee, between an
Eligible Executive and the Company, under which the Eligible
Executive agrees to defer a portion of his Bonus.
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1.15
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“Deferrals”
shall mean the amount of
deferrals credited to a Participant pursuant to Section 3.02 with
respect to Plan Years beginning on or after January 1,
2005.
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1.16
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“Effective
Date” shall mean January 1,
1995.
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1.17
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“Eligible
Executive” shall mean an Executive who is
eligible to participate in the Plan as provided in
Section 2.01.
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Page 5
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1.18
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“Employee”
shall mean a person who
is employed by the Company.
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1.19
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“Executive”
shall mean an Employee
of the Company whose Base Salary equals or exceeds $200,000 (or as
adjusted from time to time by the Administrative
Committee).
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1.20
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“ERISA”
shall mean the Employee
Retirement Income Security Act of 1974, as amended from time to
time.
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1.21
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“Grandfathered Deferral
Account” shall mean the bookkeeping account
maintained for each Participant to record the amount of Bonus
and/or Base Salary deferred prior to January 1, 2005 by a
Participant in accordance with Article 3 of the Plan as in
effect on or prior to October 3, 2004, adjusted pursuant to
Article 4.
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1.22
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“Participant”
shall mean, except as
otherwise provided in Article 2, each Eligible Executive who
has executed a Deferral Agreement pursuant to the requirements of
Section 2.02 and is credited with an amount under
Section 3.03.
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1.23
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“Performance Based
Compensation” shall mean a bonus where the amount
of, or entitlement to, the bonus is contingent on the satisfaction
of pre-established organizational or individual performance
criteria relating to a performance period of at least twelve
(12) 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 a Bonus
qualifies as “Performance-Based Compensation” will be
made in accordance with Treas. Reg. Section 1.409A-1(e) and
subsequent guidance.
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1.24
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"
Performance Period” shall mean the period of a least
twelve (12) months over which an individual or a
company’s performance is measured for purposes of the
Company’s bonus program.
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1.25
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“Plan”
shall mean the ITT
Deferred Compensation Plan (which was formerly known as the ITT
Industries Deferred Compensation Plan, ITT Deferred Compensation
Plan for 1995, the ITT Industries Deferred Compensation Plan for
1996 and the ITT Industries Deferred Compensation
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Page 6
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Plan for 1997) as set forth in this
document and the appendices and schedules thereto, as it may be
amended from time to time.
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1.26
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“Plan
Committee” shall mean the ITT Pension Fund
Trust and Investment Committee established from time to time
pursuant to the terms of the ITT Salaried Retirement
Plan.
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1.27
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“Plan Year”
shall mean the calendar
year.
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1.28
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“Reporting
Date” shall mean each business day on
which the New York Stock Exchange is open or such other business
day as the Administrative Committee may determine.
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1.29
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“Retirement”
shall mean, with respect
to an Eligible Executive, any termination of employment by an
Eligible Executive after the date the Eligible Executive is
eligible for an early, normal or postponed retirement benefit under
the ITT Salaried Retirement Plan (formerly known as the ITT
Industries Salaried Retirement Plan), or would have been eligible
had he been a participant in such Plan.
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1.30.
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"
Special Purpose Subaccount(s)” shall mean the
bookkeeping account(s) described in Section 5.01(a) maintained to
record deferrals that a Participant has elected to have paid
pursuant to clause (ii) of Section 5.01(a), adjusted
pursuant to Article 4.
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1.31
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“Specified Distribution
Date” shall mean the specific date
designated by a Participant pursuant to clause (ii) of
Section 5.01(a).
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1.32
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“Specified
Employee” shall mean a “Specified
Employee” as such term is defined in the ITT Excess Pension
Plan IIA, as amended from time to time.
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1.33
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“Termination of
Employment” shall mean “Termination of
Employment” as such term is defined in the ITT Excess Pension
Plan IIA, as amended from time to time.
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1.34
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“Termination
Subaccount” shall mean the bookkeeping account
described in Section 5.01(a) maintained to record deferrals
that a Participant has elected to have paid pursuant to clause
(i) of Section 5.01(a), adjusted pursuant to
Article 4.
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Page 7
ARTICLE 2 —
PARTICIPATION
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An
Employee who is an Executive as of the last business day in June of
a calendar year and who was employed by the Company or an
Associated Company on the first day of the Performance Period
beginning in that calendar year (or such other date in the first
quarter of such Performance Period as specified by the
Administrative Committee) shall be an Eligible Executive with
respect to the Plan Year following such calendar year and thereby
eligible to participate in this Plan and execute a Deferral
Agreement authorizing Deferrals under this Plan with respect to his
Bonus payable in the following Plan Year.
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(a)
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An
individual who is determined to be an Eligible Executive with
respect to a Plan Year and who desires to have deferrals credited
on his behalf pursuant to Article 3 for such Plan Year must execute
a Deferral Agreement with the Administrative Committee authorizing
Deferrals under this Plan for such year in accordance with the
provisions of Sections 3.01 and 3.02.
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(b)
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The
Deferral Agreement shall be in writing and be properly completed in
the manner approved by the Administrative Committee, which shall be
the sole judge of the proper completion thereof. Such Deferral
Agreement shall provide, subject to the provisions of
Section 3.02, for the deferral of a portion of the Eligible
Executive’s Bonus. The Deferral Agreement shall include such
other provisions as the Administrative Committee deems
appropriate.
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(c)
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An
Eligible Executive shall become a Participant when Deferrals are
first credited on his behalf pursuant to Article 3.
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2.03
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Termination of
Participation
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(a)
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Participation shall cease when all
benefits to which a Participant is entitled to hereunder are
distributed to him.
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Page 8
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(b)
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Subject to the provisions of
Section 3.01, a Participant shall only be eligible to have
Deferrals credited on his behalf in accordance with Article 3
for as long as he remains an Eligible Executive.
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(c)
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If
a former Participant who has incurred a Termination of Employment
and whose participation in the Plan ceased under
Section 2.03(a) is reemployed as an Eligible Executive, the
former Participant may again become a Participant in accordance
with the provisions of Section 2.02.
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Page 9
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(a)
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Subject to the following provisions
of this Section, prior to the close of an annual enrollment period
established by the Administrative Committee, an Eligible Executive
who was employed by the Company or an Associated Company on the
first day of a Performance Period (or such other date in the first
quarter of such Performance Period as specified by the
Administrative Committee) and who remains continuously employed
through the date his Deferral Agreement is submitted, may elect to
defer a portion of his Bonus earned with respect to that
Performance Period which is otherwise payable in the next Plan
Year; provided the Deferral Agreement is filed with Plan
Administrative Committee (or its delegates) by the date established
by the Administrative Committee but no later than six months before
the end of the applicable Performance Period (the “Deferral
Deadline Date”). Notwithstanding the foregoing, any election
to defer Bonus 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. Reg. Section 1.409A-1(e))
or upon a Change in Control prior to the satisfaction of the
performance criteria, will be void.
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(b)
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A
Participant’s election to defer a portion of his Bonus for
any calendar year shall become irrevocable on the last day the
deferral of such Bonus may be elected under Section 3.01(a),
except as otherwise provided in Section 3.02(c) or 3.05. A
Participant may revoke or change his election to defer a portion of
Bonus at any time prior to the date the election becomes
irrevocable. Any such revocation or change shall be made in a form
and manner determined by the Administrative Committee.
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(c)
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Subject to the provisions of
Section 3.02, an Eligible Executive must file, in accordance
with the provisions of Section 3.01(a), a new Deferral
Agreement for each calendar year the Eligible Executive is eligible
for and elects to defer a portion of his Bonus.
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(d)
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Notwithstanding any provision of the
Plan to the contrary, an Eligible Executive’s election to
defer Bonus shall only be effective if (1) the Eligible
Executive files the Deferral Agreement with respect to such Bonus
no later than the earlier of (A) the applicable Deferral
Election Deadline (as defined in paragraph (a) above) or
(B) the date that is six months before the end of the
Performance Period with respect to which the Bonus is payable,
(2) the Participant
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Page 10
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performs services continuously from
the later of the beginning of the Performance Period or the date
the criteria are established through the date the Deferral
Agreement is submitted and (3) the Bonus is not readily
ascertainable as of the date the Deferral Agreement is
filed.
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(e)
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If
a Participant ceases to be an Eligible Executive but continues to
be employed by the Company or an Associated Company, he shall
continue to be a Participant and his Deferral Agreement currently
in effect for the Plan Year shall remain in force for the remainder
of such Plan Year, but such Participant shall not be eligible to
defer any portion of his Bonus earned in a subsequent Plan Year
until such time as he shall once again become an Eligible
Executive.
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(f)
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The
Eligible Executive shall submit the Deferral Agreement in the
manner specified by the Administrative Committee and a Deferral
Agreement that is not timely filed shall be considered void and
shall have no effect. The Administrative Committee shall establish
procedures that govern deferral elections under the
Plan.
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(a)
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The
Compensation and Personnel Committee or its delegate may determine
prior to June 30th of a calendar year that an Eligible
Executive may defer all or a portion of his Bonus that is otherwise
payable in the next Plan Year. An Eligible Executive shall be given
written notice of the opportunity to defer all or a portion of his
Bonus at least ten business days prior to the date the Deferral
Agreement for the applicable Plan Year must be submitted to the
Administrative Committee.
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(b)
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The
Administrative Committee may establish maximum or minimum limits on
the amount of any Bonus which may be deferred and/or the timing of
such Deferral. Eligible Executives shall be given written notice of
any such limits prior to the date they take effect.
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(c)
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Notwithstanding anything in this
Plan to the contrary, if an Eligible Executive:
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(i)
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receives a withdrawal of deferred
cash contributions on account of hardship from any plan which is
maintained by the Company or an Associated Company and which meets
the requirements of Code Section 401(k) (or any successor thereto),
and
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(ii)
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is
precluded from making contributions to such 401(k) plan for at
least 6 months after receipt of the hardship
withdrawal,
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Page 11
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the
Eligible Executive’s Deferral Agreement with respect to Bonus
in effect at that time shall be cancelled. Any Bonus payment which
would have been deferred pursuant to that Deferral Agreement but
for the application of this Section 3.02(c) shall be paid to
the Eligible Executive as if he had not entered into the Deferral
Agreement.
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3.03
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Crediting to Deferral
Account
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The
amount of Deferrals shall be credited to such Participant’s
Deferral Account on the day such Bonus would have otherwise been
paid to the Participant in the absence of a Deferral Agreement.
Deferrals credited to a Participant’s Deferral account which
are deemed invested in a Corporation phantom stock fund will be
credited based on the fair market value of the Corporation’s
common stock on that day.
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A
Participant shall at all times be 100% vested in his Deferral
Account.
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3.05
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Unforeseeable
Emergency
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Notwithstanding the foregoing
provisions of this Article 3, the Compensation and Personnel
Committee may completely cease Deferrals made under all Deferral
Agreements then in effect with respect to the Participant upon the
Participant’s providing the Compensation and Personnel
Committee with such evidence of an Unforeseeable Emergency (as
defined in Section 5.05) as the Compensation and Personnel
Committee may deem appropriate. In the event the Compensation and
Personnel Committee finds the Participant has incurred an
Unforeseeable Emergency (as defined in Section 5.05), the
Participant’s Deferral Agreement in effect at that time shall
be cancelled and Deferrals shall cease as of the first practicable
payroll period following the Compensation and Personnel
Committee’s decision. In the event the Participant wishes to
recommence Deferrals starting in a subsequent calendar year, the
Participant may do so by duly completing, executing, and filing the
appropriate Deferral Agreement with the Administrative Committee in
accordance with Section 3.01, provided said Participant is an
Eligible Executive at that time.
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Page 12
ARTICLE 4 — MAINTENANCE
OF ACCOUNTS
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4.01
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Adjustment of Account
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(a)
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As
of each Reporting Date, each Deferral Account (or subaccount
thereof) and/or Grandfathered Deferral Account shall be credited or
debited with the amount of earnings or losses with which such
Deferral Account (or subaccounts thereof) and/or Grandfathered
Deferral Account would have been credited or debited, assuming it
had been invested in one or more investment funds, or earned the
rate of return of one or more indices of investment performance,
designated by the Administrative Committee and elected by the
Participant pursuant to Section 4.02 for purposes of measuring
the investment performance of such Accounts. Any portion of a
Participant’s Deferral Account (or subaccount thereof) and/or
Grandfathered Deferral Account deemed invested in a Corporation
phantom stock fund shall be credited with dividend equivalents, as
and when dividends are paid on the Corporation’s common
stock, which shall be deemed invested in additional shares of such
phantom stock.
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(b)
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The
Plan Committee shall designate at least one investment fund or
index of investment performance and may designate other investment
funds or investment indices (including a Corporation phantom stock
fund) to be used to measure the investment performance of a
Participant’s Deferral Account and/or Grandfathered Deferral
Account. The designation of any such investment funds or indices
shall not require the Corporation to invest or earmark their
general assets in any specific manner. The Plan Committee may
change the designation of investment funds or indices from time to
time, in its sole discretion, and any such change shall not be
deemed to be an amendment affecting Participants’ rights
under Section 6.02.
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4.02
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Investment Performance
Elections
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In
the event the Plan Committee designates more than one investment
fund or index of investment performance under Section 4.01,
each Participant shall file an investment election with the
Administrative Committee or its delegate with respect to the
investment of his Deferral Account (or subaccount thereof) and/or
Grandfathered Deferral Account within such time period and in such
manner as the Administrative Committee may prescribe. The election
shall designate the investment fund or funds or index or indices of
investment performance which shall be used
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to
measure the investment performance of the Participant’s
Deferral Account (or subaccount thereof) and/or Grandfathered
Deferral Account.
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4.03
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Changing Investment
Elections
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In
the event the Plan Committee designates more than one investment
fund or index of investment performance under Section 4.01, a
Participant may change his election of the investment fund or funds
or index or indices of investment performance used to measure the
future investment performance of the existing account balance of
his Deferral Account (or subaccount thereof) and/or his
Grandfathered Deferral Account, by filing an appropriate written
notice with the Administrative Committee or its delegate within
such time periods and in such manner as prescribed by the
Administrative Committee, in advance of the date such election is
effective. The election shall be effective as soon as
administratively practicable after the date on which notice is
timely filed or at such other time as prescribed by the
Administrative Committee on a basis uniformly applicable to all
Participants similarly situated.
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A
Participant may change his or her election of the investment fund
or funds or index or indices of investment performance used to
measure the future investment performance of his future Deferrals
within such time periods and in such manner prescribed by the
Administrative Committee. The election shall be effective as soon
as administratively practicable after the date in which notice is
timely filed or at such other time as the Administrative Committee
shall determine. In the absence of such an election, the
Participant’s future Deferrals will be invested in accordance
with his existing investment election with respect to the current
balance of his Deferral Account (or subaccount thereof), provided,
however, if such Participant is an “insider” (as
defined in Section 16 of the Securities Exchange Act of 1934)
and his existing investment elections include an investment in the
Corporation’s phantom stock fund, his future Deferrals shall
be allocated pro rata among the other funds or indices on his
existing investment election based on the proportions as designated
on such existing investment election.
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(a)
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The
Administrative Committee shall maintain, or cause to be maintained
on the books of the Corporation, records showing the individual
balance of each Participant’s Deferral Account (or subaccount
thereof) and/or Grandfathered Deferral Account. The
Participant’s Deferral Account (or subaccount thereof) shall
be credited with the Deferrals made by the Participant pursuant to
the provisions of Article 3 and the
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Participant’s Deferral Account
(or subaccount thereof) and/or Grandfathered Deferral Account shall
be credited and debited, as the case may be, with hypothetical
investment results determined pursuant to this Article 4. At
least once a year each Participant shall be furnished with a
statement setting forth the value of his Deferral Account (or
subaccount thereof) and/or Grandfathered Deferral
Account.
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(b)
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Within each Participant’s
Deferral Account and/or Grandfathered Deferral Account, separate
subaccounts shall be maintained to the extent necessary for the
administration of the Plan.
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(c)
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The
accounts established under this Article shall be hypothetical in
nature and shall be maintained for bookkeeping purposes only so
that hypothetical gains or losses on the deferrals made to the Plan
can be credited or debited, as the case may be.
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4.05
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Valuation of Accounts
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(a)
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The
Administrative Committee shall value or cause to be valued each
Participant’s Deferral Account and/or Grandfathered Deferral
Account at least monthly. On each Reporting Date there shall be
allocated to the Deferral Account and/or Grandfathered Deferral
Account of each Participant the appropriate amount determined in
accordance with Section 4.01.
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(b)
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Whenever an event requires a
determination of the value of a Participant’s Deferral
Account and/or Grandfathered Deferral Account, the value shall be
computed as of the Reporting Date immediately preceding the date of
the event, except as otherwise specified in this Plan.
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4.06
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Compliance with Securities Laws and
Trading Policies and Procedures
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A
Participant’s ability to direct investments into or out of a
Corporation phantom stock fund shall be subject to such terms,
conditions and procedures as the Plan Administrator may prescribe
from time to time to assure compliance with Rule 16b-3
promulgated under Section 16(b) of the Securities Exchange Act of
1934, as amended (“Rule 16b-3”), and other
applicable requirements. Such procedures also may limit or restrict
a Participant’s ability to make (or modify previously made)
Deferrals and distribution elections under the Plan. In
furtherance, and not in limitation, of the foregoing, to the extent
a Participant acquires any interest in an equity security under the
Plan
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for
purposes of Section 16(b), the Participant shall
not
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