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EXHIBIT
10.2
JPMORGAN CHASE &
CO.
2005 DEFERRED COMPENSATION
PLAN FOR NON-EMPLOYEE
DIRECTORS
Effective as of
January 1, 2005
Effective January 1,
2005, JPMorgan Chase & Co (“Corporation”)
hereby establishes the JPMorgan Chase & Co. 2005 Deferred
Compensation Plan for Non-Employee Directors
(“Plan”).
The Plan applies to deferrals
made on or after January 1, 2005. The Plan is designed to
comply with Section 409A of the Internal Revenue Code
(“Code”) and should be interpreted in a manner to
satisfy that Code Section. In that regard, because employees are
not entitled to participant in this Plan and because Directors are
not “officers,” the Plan does not include provisions
regarding “specified employees.” Further, until final
Treasury Regulations were promulgated under Section 409A of
the Code, the Plan has been interpreted and operated in good faith
compliance with Section 409A and Internal Revenue Service
Notice 2005-1 through December 31, 2007.
At all times, this Plan is
entirely unfunded, both for tax purposes and for purposes of Title
I of ERISA. This Plan is maintained primarily for the purpose of
providing non-qualified deferred compensation and is not a
qualified plan within the meaning of Section 401(a) of the
Code. Further, the Plan is not subject to any of the ERISA
provisions regarding participation, vesting, funding or fiduciary
responsibility.
For avoidance of doubt, it is
intended that each election with respect to the form or timing of a
distribution shall be a “class year” applying solely to
the deferral and investment experience thereon to which the
election pertains.
All amounts deferred under
the JPMorgan Chase Deferred Compensation Plan For Non-Employee
Directors as in effect prior to January 1, 2005 (“Prior
Plan”) were vested as December 31, 2004. Amounts
deferred under the Prior Plan, as well as investment experience
thereon, are separately accounted for under, and remain subject to
the terms and conditions of, the Prior Plan. No material
modifications to the operations or terms of the Prior Plan occurred
after October 3, 2004. The Prior Plan will not comply with
Section 409A of the Code, unless there is a material
modification of such Prior Plan.
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Definitions - The following are defined terms wherever
they appear in the Plan.
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1.1 “
Administrator ” shall mean the Secretary of the
Corporation, or such other person or committee appointed by the
Chief Executive Officer of the Corporation to be responsible for
those functions assigned to the Administrator under the
Plan.
1.2 “
Annual Installments ” shall mean an amount payable
annually on a distribution date based the on value of the Account
as of the Valuation Date. The amount of each installment shall be
calculated by multiplying such Account balance by a fraction the
numerator is one and denominator is the remaining installments.
Each installment shall be a separate payment for purposes of the
Treasury Regulations issued pursuant to Section 409A of the
Code.
1.3 “
Annual Stock Retainer ” or “ Stock
compensation ” shall mean an annual award of Restricted
Stock Units.
1.4 “
Board of Directors ” shall mean the Board of Directors
of the Corporation.
1.5 “
Corporation ” shall mean JPMorgan Chase & Co.
and successor.
1.6 “
Deferred Compensation Account ” or “
Account ” shall mean the separate account established
effective January 1, 2005 under the Plan for each Participant
as described in Section 3.1.
1.7 “
Director ” shall mean a member of the Board of
Directors who is not also an employee of the Corporation or a
Subsidiary.
1.8 “
Participant ” shall mean each Director who
participates in the Plan in accordance with the terms and
conditions of the Plan.
1.9 “
Plan ” shall mean the JPMorgan Chase & Co.
2005 Deferred Compensation Plan for Non-Employee Directors, as
amended from time to time.
1.10 “ Restricted
Stock Unit(s) ” shall mean a contractual obligation to
deliver, following a Separation from Service, a number of shares of
Stock equal to the number of units credited to a
Participant’s Stock Account.
1.11 “ Separation
from Service ” means a termination of services as a
Director of Board of Directors as set forth in Treasury Regulation
1.409A-1(h), using the 20% bench mark set forth therein.
1.12 “ Stock
” shall mean the Common Stock of the Corporation, $1.00 par
value per share.
1.13 “
Unforeseeable Emergency ” means a severe financial
hardship of the Participant resulting from an illness or accident
of the Participant or beneficiary, the Participant’s spouse,
or the Participant’s dependent (as defined in
Section 152(a) of
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the Code); loss of the
Participant’s property due to casualty; or other similar
extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant, as described in
Section 409A of the Code.
1.14 “ Valuation Date
” shall mean the close of business on the last business day
of each calendar quarter or such other dates as may be specified by
the Administrator.
1.15 “ Subsidiary ”
shall mean any corporation, which at the time qualifies as a
subsidiary of the Corporation under the definition of
“subsidiary corporation” in Section 425(f) of the
Internal Revenue Code, as amended from time to time.
2.
Participation .
2.1 Basis of
Participation . Only Directors are eligible to participate.
Each Director participates on a mandatory basis with respect to the
Annual Stock Retainer and on a voluntary basis with respect to cash
compensation.
2.2 Participation in the
Plan and Elections .
(a)
Mandatory . All Directors shall have their Annual Stock
Retainer deferred automatically hereunder but may make the
elections described in Section 2.2(d)(v)(c), (d) and
(e) with respect to such deferred amount.
(b)
Voluntary—Existing Director . A Director also may
elect to participate with respect to cash compensation for any
calendar year by delivering the completed election form described
in Section 2.2 (d)(v).
(c)
Voluntary—New Directors . An individual who becomes a
Director during a calendar year may also elect to participate with
respect to cash compensation to be earned for the remainder of
calendar year by delivering the completed election form described
in Section 2.2(d)(v). In addition, such individual shall make
the elections specified in Section 2.2(d)(v)(c), (d) and
(e) with respect the Annual Stock Retainer to be awarded in
the next succeeding calendar year.
(d)
Elections .
(i)
Elections
Irrevocable . On proper and timely delivery to the
Administrator of the election form described herein, the elections
made therein are irrevocable. Each election, including the
elections specified by in Section 2.2(d)(v)(c), (d) and
(e), shall apply only to amount deferred in the calendar year to
which the election applies.
(ii)
Timing of
Election for Annual Stock Retainer . Effective for Annual Stock
Retainers awarded during or after calendar 2009 and subject to the
special rule in Section 2.2(d)(iv), each Director shall make
the election described in Sections 2.2(d)( v)(c), (d) and
(e) with respect to the Annual Stock Retainer by delivering
a
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properly executed deferral
election form to the Administrator by not later than
December 31 of the second calendar year immediately prior to
the date of such award or such earlier date as specified by the
Administrator. (By way of clarification, if an Annual Stock
Retainer is awarded in 2010, the election described above must be
made on or before December 31, 2008.) In the event that a
Director fails to make such an election for any particular calendar
year in which the Annual Stock Retainer is made, the number of
Restricted Stock Units represented by the Annual Stock Retainer for
that year and by the re-reinvested dividend equivalents thereon
shall be distributed in their entirety in the calendar year
immediately following a Separation from Service.
(iii)
Timing of Election of Cash
Compensation . Subject to Section 2.3(iv), each Director
electing to participate in the Plan with respect to cash
compensation for any calendar year must make the elections
described herein by delivering a properly completed deferral
election form to the Administrator not later than December 31
of the calendar year immediately preceding the year for which the
deferral election is effective.
(iv) Timing of Elections
for Individual who become Directors during a Calendar Year . An
individual who becomes a Director during a calendar year may also
elect to participate in this Plan with respect to his/her cash
compensation to be earned during that calendar year by delivering a
properly completed election form to the Administrator prior to the
date that he or she becomes a Director but not later than the date
specified by the Administrator. In addition, at the same time, such
individual shall make the elections specified in Section 2.2
(c)(v)(c), (d) and (e) with respect the Annual Stock
Retainer to be awarded in the next succeeding calendar year. In the
event that such a Director fails to make such an election with
respect to the Annual Stock Retainer, the number of Restricted
Stock Units represented by the Annual Stock Retainer for that year
and by reinvested dividend equivalents thereon shall be distributed
in their entirety in the calendar year immediately following a
Separation from Service.
(v) Election
Form. Each annual election by the Director shall specify
the
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(a) |
amount, by
percentage or by dollar amount, of cash compensation to be
deferred;
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