Exhibit 10.5
THE EXECUTIVE NONQUALIFIED EXCESS
PLAN
PLAN DOCUMENT
THE EXECUTIVE NONQUALIFIED EXCESS
PLAN
Section 1.
Purpose:
By execution of the Adoption
Agreement, the Employer has adopted the Plan set forth herein, and
in the Adoption Agreement, to provide a means by which certain
management Employees or Independent Contractors of the Employer may
elect to defer receipt of current Compensation from the Employer in
order to provide retirement and other benefits on behalf of such
Employees or Independent Contractors of the Employer, as selected
in the Adoption Agreement. The Plan is intended to be a
nonqualified deferred compensation plan that complies with the
provisions of Section 409A of the Internal Revenue Code (the
“Code”). The Plan is also intended to be an unfunded
plan maintained primarily for the purpose of providing deferred
compensation benefits for a select group of management or highly
compensated employees under Sections 201(2), 301(a)(3) and
401(a)(1) of the Employee Retirement Income Security Act of
1974 (“ERISA”) and independent contractors.
Notwithstanding any other provision of this Plan, this Plan shall
be interpreted, operated and administered in a manner consistent
with these intentions.
Section 2.
Definitions:
As used in the Plan, including this
Section 2, references to one gender shall include the other,
unless otherwise indicated by the context:
2.1
“Active
Participant” means,
with respect to any day or date, a Participant who is in Service on
such day or date; provided, that a Participant shall cease to be an
Active Participant (i) immediately upon a determination by the
Committee that the Participant has ceased to be an Employee or
Independent Contractor, or (ii) at the end
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of the Plan Year that the Committee determines
the Participant no longer meets the eligibility requirements of the
Plan.
2.2
“Adoption
Agreement” means
the written agreement pursuant to which the Employer adopts the
Plan. The Adoption Agreement is a part of the Plan as applied to
the Employer.
2.3
“Beneficiary”
means the person, persons, entity or
entities designated or determined pursuant to the provisions of
Section 13 of the Plan.
2.4
“Board”
means the Board of Directors of the
Company, if the Company is a corporation. If the Company is not a
corporation, “Board” shall mean the Company.
2.5
“Change in Control
Event” means an
event described in Section 409A(a)(2)(A)(v) of the Code (or
any successor provision thereto) and the regulations
thereunder.
2.6
“Committee” means the persons or entity designated in the
Adoption Agreement to administer the Plan. If the Committee
designated in the Adoption Agreement is unable to serve, the
Employer shall satisfy the duties of the Committee provided for in
Section 9.
2.7
“Company”
means the company designated in the
Adoption Agreement as such.
2.8
“Compensation”
shall have the meaning designated in
the Adoption Agreement.
2.9
“Crediting
Date” means the
date designated in the Adoption Agreement for crediting the amount
of any Participant Deferral Credits to the Deferred Compensation
Account of a Participant. Employer Credits may be credited to
the
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Deferred Compensation Account of a Participant
on any day that securities are traded on a national securities
exchange.
2.10
“Deferred Compensation
Account” means the
account maintained with respect to each Participant under the Plan.
The Deferred Compensation Account shall be credited with
Participant Deferral Credits and Employer Credits, credited or
debited for deemed investment gains or losses, and adjusted for
payments in accordance with the rules and elections in effect
under Section 8. The Deferred Compensation Account of a
Participant shall include any In-Service or Education Account of
the Participant, if applicable.
2.11
“Disabled”
means Disabled within the meaning of
Section 409A of the Code and the regulations thereunder.
Generally, this means that the Participant is unable to engage in
any substantial gainful activity 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 12 months, or 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 12 months, receiving income replacement benefits
for a period of not less than three months under an accident and
health plan covering Employees of the Employer.
2.12
“Education
Account” is an
In-Service Account which will be used by the Participant for
educational purposes.
2.13
“Effective
Date” shall be the
date designated in the Adoption Agreement.
2.14
“Employee”
means an individual in the Service
of the Employer if the relationship between the individual and the
Employer is the legal relationship of
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employer and employee. An individual shall cease
to be an Employee upon the Employee’s separation from
Service.
2.15
“Employer”
means the Company, as identified in
the Adoption Agreement, and any Participating Employer which adopts
this Plan. An Employer may be a corporation, a limited liability
company, a partnership or sole proprietorship.
2.16
“Employer
Credits” means the
amounts credited to the Participant’s. Deferred Compensation
Account by the Employer pursuant to the provisions of
Section 4.2.
2.17
“Grandfathered
Amounts” means, if
applicable, the amounts that were deferred under the Plan and were
earned and vested within the meaning of Section 409A of the
Code and regulations thereunder as of December 31, 2004.
Grandfathered Amounts shall be subject to the terms designated in
the Adoption Agreement.
2.18
“Independent
Contractor” means
an individual in the Service of the Employer if the relationship
between the individual and the Employer is not the legal
relationship of employer and employee. An individual shall cease to
be an Independent Contractor upon the termination of the
Independent Contractor’s Service. An Independent Contractor
shall include a director of the Employer who is not an
Employee.
2.19
“In-Service
Account” means a
separate account to be kept for each Participant that has elected
to take in-service distributions as described in Section 5.4.
The In-Service Account shall be adjusted in the same manner and at
the same time as the Deferred Compensation Account under
Section 8 and in accordance with the rules and elections
in effect under Section 8.
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2.20
“Normal Retirement
Age” of a
Participant means the age designated in the Adoption
Agreement.
2.21
“Participant”
means with respect to any Plan Year
an Employee or Independent Contractor who has been designated by
the Committee as a Participant and who has entered the Plan or who
has a Deferred Compensation Account under the Plan; provided that
if the Participant is an Employee, the individual must be a highly
compensated or management employee of the Employer within the
meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of
ERISA.
2.22
“Participant Deferral
Credits” means the
amounts credited to the Participant’s Deferred Compensation
Account by the Employer pursuant to the provisions of
Section 4.1.
2.23
“Participating
Employer” means any
trade or business (whether or not incorporated) which adopts this
Plan with the consent of the Company identified in the Adoption
Agreement.
2.24
“Participation
Agreement” means a
written agreement entered into between a Participant and the
Employer pursuant to the provisions of Section 4.1.
2.25
“Performance-Based
Compensation” means
compensation where the amount of, or entitlement to, the
compensation is contingent on the satisfaction of preestablished
organizational or individual performance criteria relating to a
performance period of at least twelve months. Organizational or
individual performance criteria are considered preestablished if
established in writing within 90 days after the commencement of the
period of service to which the criteria relates, provided that the
outcome is substantially uncertain at the time the criteria are
established. Performance-
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based compensation may include payments based
upon subjective performance criteria as provided in regulations and
administrative guidance promulgated under Section 409A of the
Code.
2.26
“Plan”
means The Executive Nonqualified
Excess Plan, as herein set out and as set out in the Adoption
Agreement, or as duly amended. The name of the Plan as applied to
the Employer shall be designated in the Adoption
Agreement.
2.27
“Plan-Approved Domestic
Relations Order” shall mean a judgment, decree, or order
(including the approval of a settlement agreement) which
is:
2.27.1
Issued pursuant to a State’s
domestic relations law;
2.27.2
Relates to the provision of child
support, alimony payments or marital property rights to a Spouse,
former Spouse, child or other dependent of the
Participant;
2.27.3
Creates or recognizes the right of a
Spouse, former Spouse, child or other dependent of the Participant
to receive all or a portion of the Participant’s benefits
under the Plan;
2.27.4
Requires payment to such person of
their interest in the Participant’s benefits in an immediate
lump payment; and
2.27.5
Meets such other requirements
established by the Committee.
2.28
“Plan
Year” means the
twelve-month period ending on the last day of the month designated
in the Adoption Agreement; provided that the initial Plan Year may
have fewer than twelve months.
2.29
“Qualifying Distribution
Event” means
(i) the Separation from Service of the Participant,
(ii) the date the Participant becomes Disabled, (iii) the
death of the Participant, (iv) the time specified by the
Participant for an In-Service or Education Distribution, (v) a
Change in Control Event, or (vi) an Unforeseeable Emergency,
each to the extent provided in Section 5.
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2.30
“Seniority
Date” shall have
the meaning designated in the Adoption Agreement.
2.31
“Separation from
Service” or “
Separates from Service ” means a “separation
from service” within the meaning of Section 409A of the
Code.
2.32
“Service”
means employment by the Employer as
an Employee. For purposes of the Plan, the employment relationship
is treated as continuing intact while the Employee is on military
leave, sick leave, or other bona fide leave of absence if the
period of such leave does not exceed six months, or if longer, so
long as the Employee’s right to reemployment is provided
either by statute or contract. If the Participant is an Independent
Contractor, “Service” shall mean the period during
which the contractual relationship exists between the Employer and
the Participant. The contractual relationship is not terminated if
the Participant anticipates a renewal of the contract or becomes an
Employee.
2.33
“Service
Bonus” means any
bonus paid to a Participant by the Employer which is not
Performance-Based Compensation.
2.34
“Specified
Employee” means an
employee who meets the requirements for key employee treatment
under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code
(applied in accordance with the regulations thereunder and without
regard to Section 416(i)(5) of the Code) at any time during
the twelve month period ending on December 31 of each year
(the “identification date”). Unless binding corporate
action is taken to establish different rules for determining
Specified Employees for all plans of the Company and its controlled
group members that are subject to Section 409A of the Code,
the foregoing rules and the other default rules under the
regulations of Section 409A of the Code shall
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apply. If the person is a key employee as of any
identification date, the person is treated as a Specified Employee
for the twelve-month period beginning on the first day of the
fourth month following the identification date.
2.35
“Spouse”
or “Surviving
Spouse” means, except as otherwise provided in the Plan,
a person who is the legally married spouse or surviving spouse of a
Participant.
2.36
“Unforeseeable
Emergency” means an
“unforeseeable emergency” within the meaning of
Section 409A of the Code.
2.37
“Years of
Service” means each
Plan Year of Service completed by the Participant. For vesting
purposes, Years of Service shall be calculated from the date
designated in the Adoption Agreement and Service shall be based on
service with the Company and all Participating
Employers.
Section 3.
Participation:
The Committee in its discretion
shall designate each Employee or Independent Contractor who is
eligible to participate in the Plan. A Participant who separates
from Service with the Employer and who later returns to Service
will not be an Active Participant under the Plan except upon
satisfaction of such terms and conditions as the Committee shall
establish upon the Participant’s return to Service, whether
or not the Participant shall have a balance remaining in the
Deferred Compensation Account under the Plan on the date of the
return to Service.
Section 4.
Credits to Deferred
Compensation Account:
4.1
Participant Deferral
Credits. To the extent
provided in the Adoption Agreement, each Active Participant may
elect, by entering into a Participation Agreement with the
Employer, to defer the receipt of Compensation from the Employer by
a dollar
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amount or percentage specified in the
Participation Agreement. The amount of Compensation the Participant
elects to defer, the Participant Deferral Credit, shall be credited
by the Employer to the Deferred Compensation Account maintained for
the Participant pursuant to Section 8. The following special
provisions shall apply with respect to the Participant Deferral
Credits of a Participant:
4.1.1
The Employer shall credit to the
Participant’s Deferred Compensation Account on each Crediting
Date an amount equal to the total Participant Deferral Credit for
the period ending on such Crediting Date.
4.1.2
An election pursuant to this
Section 4.1 shall be made by the Participant by executing and
delivering a Participation Agreement to the Committee. Except as
otherwise provided in this Section 4.1, the Participation
Agreement shall become effective with respect to such Participant
as of the first day of January following the date such
Participation Agreement is received by the Committee. A
Participant’s election may be changed at any time prior to
the last permissible date for making the election as permitted in
this Section 4.1, and shall thereafter be irrevocable. The
election of a Participant shall continue in effect for subsequent
years until modified by the Participant as permitted in this
Section 4.1.
4.1.3
A Participant may execute and
deliver a Participation Agreement to the Committee within 30 days
after the date the Participant first becomes eligible to
participate in the Plan to be effective as of the first payroll
period next following the date the Participation Agreement is fully
executed. Whether a Participant is treated as newly eligible for
participation under this Section shall be determined in
accordance with Section 409A of the Code and the regulations
thereunder, including (i) rules that treat all elective deferral
account balance plans as one plan, and (ii) rules that
treat a previously eligible employee as newly eligible if his
benefits had been previously distributed or if he has been
ineligible for 24 months. For Compensation that is earned based
upon a specified performance period (for example, an annual bonus),
where a deferral election is made under this Section but after
the beginning of the performance period, the election will only
apply to the portion of the Compensation equal to the total amount
of the Compensation for the service period multiplied by the ratio
of the number of days remaining in the performance period after the
election over the total number of days in the performance
period.
4.1.4
A Participant may unilaterally
modify a Participation Agreement (either to terminate, increase or
decrease the portion of his future Compensation which is subject to
deferral within the percentage limits set forth in Section 4.1
of the Adoption Agreement) by providing a written modification of
the Participation Agreement to the Committee. The modification
shall become effective as of the first day of
January following the date such written modification is
received by the Committee.
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4.1.5
If the Participant performed
services continuously from the later of the beginning of the
performance period or the date upon which the performance criteria
are established through the date upon which the Participant makes
an initial deferral election, a Participation Agreement relating to
the deferral of Performance-Based Compensation may be executed and
delivered to the Committee no later than the date which is 6 months
prior to the end of the performance period, provided that in no
event may an election to defer Performance-Based Compensation be
made after such Compensation has become readily
ascertainable.
4.1.6
If the Employer has a fiscal year
other than the calendar year, Compensation relating to Service in
the fiscal year of the Employer (such as a bonus based on the
fiscal year of the Employer), of which no amount is paid or payable
during the fiscal year, may be deferred at the Participant’s
election if the election to defer is made not later than the close
of the Employer’s fiscal year next preceding the first fiscal
year in which the Participant performs any services for which such
Compensation is payable.
4.1.7
Compensation payable after the last
day of the Participant’s taxable year solely for services
provided during the final payroll period containing the last day of
the Participant’s taxable year (i.e., December 31) is
treated for purposes of this Section 4.1 as Compensation for
services performed in the subsequent taxable year.
4.1.8
The Committee may from time to time
establish policies or rules consistent with the requirements
of Section 409A of the Code to govern the manner in which
Participant Deferral Credits may be made.
4.1.9
If a Participant becomes Disabled or
applies for and is eligible for a distribution on account of an
Unforeseeable Emergency during a Plan Year, his deferral election
for such Plan Year shall be cancelled.
4.2
Employer Credits.
If designated by the Employer in the
Adoption Agreement, the Employer shall cause the committee to
credit to the Deferred Compensation Account of each Active
Participant an Employer Credit as determined in accordance with the
Adoption Agreement. A Participant must make distribution elections
with respect to any Employer Credits credited to his Deferred
Compensation Account by the deadline that would apply under
Section 4.1 for distribution elections with respect to
Participant Deferral Credits credited at the same time, on a
Participation
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Agreement that is timely executed and delivered
to the Committee pursuant to Section 4.1.
4.3
Deferred Compensation
Account. All Participant
Deferral Credits and Employer Credits shall be credited to the
Deferred Compensation Account of the Participant as provided in
Section 8.
Section 5
.
Qualifying Distribution
Events:
5.1
Separation from
Service. If the
Participant Separates from Service with the Employer, the vested
balance in the Deferred Compensation Account shall be paid to the
Participant by the Employer as provided in Section 7.
Notwithstanding the foregoing, no distribution shall be made
earlier than six months after the date of Separation from Service
(or if earlier, the date of death) with respect to a Participant
who as of the date of Separation from Service is a Specified
Employee of a corporation the stock in which is traded on an established securities market or
otherwise. Any payments to which such Specified Employee would be
entitled during the first six months following the date of
Separation from Service shall be accumulated and paid on the first
day of the seventh month following the date of Separation from
Service.
5.2
Disability.
If the Employer designates in the
Adoption Agreement that distributions are permitted under the Plan
when a Participant becomes Disabled, and the Participant
becomes Disabled while in Service,
the vested balance in the Deferred Compensation Account shall be
paid to the Participant by the Employer as provided in
Section 7.
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5.3
Death. If the Participant dies while in Service, the
Employer shall pay a benefit to the Participant’s Beneficiary
in the amount designated in the Adoption Agreement. Payment of such
benefit shall be made by the Employer as provided in
Section 7.
5.4
In-Service or Education
Distributions. If the
Employer designates in the Adoption Agreement that in-service or
education distributions are permitted under the Plan, a Participant
may designate in the Participation Agreement to have a specified
amount credited to the Participant’s In-Service or Education
Account for in-service or education distributions at the date specified by
the Participant. In no event may an in-service or education
distribution of an amount be made before the date that is two years
after the first day of the year in which such amount was credited
to the In-Service or Education Account. Notwithstanding the
foregoing, if a Participant incurs a Qualifying Distribution Event
prior to the date on which the entire balance in the In-Service or
Education Account has been distributed, then the balance in the
In-Service or Education Account on the date of the Qualifying
Distribution Event shall be paid as provided under Section 7.1
for payments on such Qualifying Distribution Event.
5.5
Change in Control Event. If the Employer designates
in the Adoption Agreement that distributions are permitted under
the Plan upon the occurrence of a Change in Control Event, the
Participant may designate in the Participation Agreement to have
the vested balance in the Deferred Compensation Account paid to the
Participant upon a Change in Control Event by the Employer as
provided in Section 7.
5.6
Unforeseeable
Emergency. If the
Employer designates in the Adoption Agreement that distributions
are permitted under the Plan upon the occurrence of an
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Unforeseeable Emergency event, a
distribution from the Deferred Compensation Account may be made to
a Participant in the event of an Unforeseeable Emergency,
subjec
