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EXHIBIT 10.1
COHU, INC. DEFERRED COMPENSATION PLAN
Article I
Establishment of Plan
1.1 Purpose. The Cohu, Inc. Deferred
Compensation Plan, hereinafter referred to as the "Plan," is to
provide deferred compensation benefits to selected executives of
Cohu, Inc. The benefits provided under the Plan are intended to be
in addition to other employee benefits programs offered by the
Corporation, including but not limited to tax-qualified employee
benefit plans.
1.2 Effective Date and Term. Cohu, Inc.
originally established the Plan on February 23, 1994, amended
and restated the Plan on August 1, 2001, and hereby amends and
restates the Plan effective as of December 23, 2008, in order
to comply with Section 409A of the Code.
1.3 Applicability of ERISA and the Code.
This Plan is intended to be a "top-hat" plan. This Plan is an
unfunded plan maintained primarily for the purpose of providing
deferred compensation to a select group of management or highly
compensated employees within the meaning of ERISA. This Plan is
intended to comply with Section 409A of the Code.
Article II
Definitions
As used within this document, the following words
and phrases have the meanings described in this Article II
unless a different meaning is required by the context. Some of the
words and phrases used in the Plan are not defined in this
Article II, but for convenience, are defined as they are
introduced into the text. Words in the masculine gender shall be
deemed to include the feminine gender. Any headings used are
included for ease of reference only and are not to be construed so
as to alter any of the terms of the Plan.
2.1 Annual Deferral. The amount of Base
Salary and/or Bonuses which the Participant elects to defer in each
Deferral Period pursuant to Article 4.1 of the Plan
Document.
2.2 Base Salary. A Participant’s basic
annual salary for the applicable Plan Year.
2.3 Beneficiary. An individual or entity
designated by a Participant in accordance with
Section 12.6.
2.4 Board or Board of Directors. The Board
of Directors of the Corporation.
2.5 Bonus. Compensation paid, in the
discretion of the Corporation, to a Participant as a bonus.
2.6 Code. The Internal Revenue Code of 1986,
as amended.
2.7 Committee. A Committee of one or more
individuals appointed by the Board of Directors to administer the
Plan.
2.8 Corporation. Cohu, Inc., a Delaware
Corporation.
2.9 Deferral Account. The account
established for a Participant pursuant to Section 5.1 of the
Plan Document.
2.10 Deferral Election. The election made by
the Participant pursuant to Section 4.1 of the Plan
Document.
2.11 Deferral Period. The Plan Year, or in
the case of a newly hired or promoted employee who becomes an
Eligible Employee during a Plan Year, the remaining portion of the
Plan Year.
2.12 Disability. "Disability" shall mean a
condition of the Participant whereby he or she either: (i) 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 twelve (12) months, or
(ii) 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
(12) months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and
health plan, if any, covering employees of the Participant’s
employer.
2.13 Effective Date. The Plan was originally
effective as of February 23, 1994, and is hereby amended and
restated effective as of December 23, 2008.
2.14 Eligible Employee. An employee of the
Corporation who is designated by the Committee.
2.15 ERISA. The Employee Retirement Income
Security Act of 1974, as amended.
2.16 IRS. The Internal Revenue Service.
2.17 Normal Retirement Age. The earlier of
age sixty-five (65) years or the date upon which the
Participant ceases full time employment with the Corporation after
he has attained age sixty-five (65) years.
2.18 Normal Retirement Date. The first day
of the first month coincident with or next following the date on
which a Participant reaches age sixty-five (65), or if a
participant continues to be employed by the Corporation after
attaining age sixty-five (65), the first day of the first month
coincident with or next following the date on which a Participant
ceases full time employment with the Corporation.
2.19 Participant. Any individual who becomes
eligible to participate in the Plan pursuant to Article III of
the Plan Document.
2.20 Participant Agreement and Election
Form. The written agreement to defer Salary and/or Bonuses made
by the Participant. Such written agreement shall be in a format
designated by the Corporation.
2.21 Plan. This Cohu, Inc. Deferred
Compensation Plan, as may be amended from time to time.
2.22 Plan Administrator. The Corporation
unless the Corporation designates another individual or entity to
hold the position of the Plan Administrator.
2.23 Plan Year. The "Plan Year" means the
twelve (12) month period beginning each January 1 and ending
on each December 31st.
2.24 Rabbi Trust. The Rabbi Trust, which the
Corporation may, in its discretion, establish for the Cohu, Inc.
Deferred Compensation Plan, as amended from time to time.
2.25 Rollover Contributions . Amounts
credited to Participant’s accounts as starting balances under
the provisions of the Cohu, Inc. Key Executive Long Term Incentive
Plan (the predecessor plan to this Plan) as determined in the sole
discretion of the Committee.
2.26 Separation from Service. A "Separation
from Service" is a termination of a Participant’s employment
with the Company that meets the requirements of Treasury Regulation
Section 1.409A-1(h).
2.27 Valuation Date. Each business day of
the Plan Year.
2.28 Years of Service. Each consecutive
twelve (12) month period during which a Participant is
continuously employed by the Corporation.
Article III
Eligibility and Participation
3.1 Participation – Eligibility and
Initial Period . Participation in the Plan is open only to
Eligible Employees of the Corporation. Any employee becoming an
Eligible Employee after the Effective Date, e.g., new hires or
promoted employees, may become a Participant for the Deferral
Period commencing on or after he becomes an Eligible Employee if he
submits a properly completed Participant Agreement and Deferral
Election within thirty days after becoming eligible for
participation.
3.2 Participation – Subsequent Entry into
Plan. An Eligible Employee who does not elect to participate at
the time of initial eligibility as set forth in Section 3.1
shall remain eligible to become a Participant in subsequent Plan
Years as long as he continues his status as an Eligible Employee.
In such event, the Eligible Employee may become a Participant by
submitting a properly executed Participant Agreement and Deferral
Election Form prior to December 31 of the Plan Year prior to
the Plan Year for which such election shall be effective.
Article IV
Contributions
4.1 Deferral Election. Before the first day
of each Plan Year, a Participant may file with the Committee, a
Deferral Election Form indicating the amount of Salary and/or Bonus
Deferrals for that Plan Year. A Participant shall not be obligated
to make a Deferral Election in each Plan Year. After a Plan Year
commences, such Deferral Election shall continue for the entire
Plan Year and subsequent Plan Years except that it shall terminate
upon the execution and submission of a newly completed Deferral
Election Form or termination of employment.
4.2 Maximum Deferral Election. A Participant
may elect to defer up to twenty-five percent (25 %) of Base Salary
and/or up to one hundred percent (100%) of Bonuses earned. A
Deferral Election may be automatically reduced if the Committee
determines that such action is necessary to meet Federal, FICA or
State tax withholding obligations.
4.3 Annual Employer Contributions. The
Corporation shall make a contribution equal to an amount that is
four percent (4%) of the Participant’s annual Base Salary
that exceeds the limit, as indexed, provided under
Section 401(a)(17) of the Internal Revenue Code.
4.4 Discretionary Employer Contributions .
The Corporation, in its sole discretion, may from time to time,
make additional contributions to the Plan on behalf of any Eligible
Employee.
4.5 Rollover Contributions . Are equal to
those amounts which have been determined for each Participant
pursuant to the Cohu, Inc. Key Executive Long Term Incentive Plan
(the predecessor plan to this Plan). For all purposes of this Plan,
such rollover contributions shall be deemed an Employee
Deferral.
Article V
Accounts
5.1 Deferral Accounts. Solely for
recordkeeping purposes, the Plan Administrator shall establish a
Deferral Account for each Participant. A Participant’s
Deferral Account shall be credited with the contributions made by
him or on his behalf by the Corporation under Section 4 and
shall be credited (or charged, as the case may be) with the
hypothetical or deemed investment earnings and losses determined
pursuant to Section 5.3, and charged with distributions made
to or with respect to the Participant.
5.2 Crediting of Deferral Accounts. Base
Salary contributions under Section 4.1 shall be credited to a
Participant’s Deferral Account as of the date on which such
contributions were withheld from Base Salary. Bonus contributions
under Section 4.1 shall be credited to a Participant’s
Deferral Account as of the date on which the Bonus would have
otherwise been paid in cash. Contributions under Section 4.3,
4.4, and 4.5, if any, shall be credited to the Participant’s
Deferral Account on the date declared by the Corporation. Any
distribution with respect to a Deferral Account shall be charged as
of the date such payment is made by the Corporation or the trustee
of the Rabbi Trust which is established for the Plan.
5.3 Earning Credits or Losses. Amounts
credited to a Deferral Account shall be credited with deemed net
income, gain and loss, including the deemed net unrealized gain and
loss based on hypothetical investment directions made by the
Participant with respect to his Deferral Account on a form
designated by the Corporation, in accordance with investment
options and procedures adopted by the Corporation in its sole
discretion, from time to time.
5.4 Hypothetical Nature of Accounts. The
Plan constitutes a mere promise by the Corporation to make the
benefit payments in the future. Any Deferral Account established
for a Participant under this Article V shall be hypothetical
in nature and shall be maintained for the Corporation’s
recordkeeping purposes only, so that any contributions can be
credited and so that deemed investment earnings and losses on such
amounts can be credited (or charged, as the case may be). Neither
the Plan nor any of the Accounts (or subaccounts) shall hold any
actual funds or assets. The right of the Participant, a
Beneficiary, or any other individual or entity to receive one or
more payments under the Plan shall be an unsecured claim against
the general assets of the Corporation. Any liability of the
Corporation to any Participant, former Participant, or Beneficiary
with respect to a right to payment shall be based solely upon
contractual obligations created by the Plan. The Corporation, the
Board of Directors, the Committee and any individual or entity
shall not be deemed to be a trustee of any amounts to be paid under
the Plan. Nothing contained in the Plan, and no action taken
pursuant to its provisions, shall create or be construed to create
a trust of any kind, or a fiduciary relationship, between the
Corporation and a Participant, former Participant, Beneficiary, or
any other individual or entity. The Corporation may, in its sole
discretion, use a Rabbi Trust as a vehicle in which to place funds
with respect to this Plan. The Corporation does not in any way
guarantee any Participant’s Deferral Account against loss or
depreciation, whether caused by poor investment performance,
insolvency of a deemed investment or by any other event or
occurrence. In no event shall any employee, officer, director, or
stockholder of the Corporation be liable to any individual or
entity on account of any claim arising by reason of the Plan
provisions or any instrument or instruments implementing its
provisions, or for the failure of any Participant, Beneficiary or
other individual or entity to be entitled to any particular tax
consequences with respect to the Plan or any credit or payment
thereunder.
5.5 Statement of Deferral Accounts. The Plan
Administrator will make available to each Participant a
recordkeeping of the activity in the Deferral Account maintained
for such Participant.
Article VI
Vesting
6.1 Vesting. The Corporation’s
contributions credited to a Participant’s Deferral Account
under Plan Section 4.3 and 4.4 and any deemed investment
earnings attributable to these contributions shall be one hundred
percent (100%) vested or nonforfeitable when the Participant has
two Years of Service with the Corporation. Prior to the time a
Participant has two Years of Service with the Corporation, the
Corporation’s contributions to his account shall be zero
percent (0%) vested. However, all amounts credited to a
Participant’s Deferral Account pursuant to Plan
Sections 4.2 and 4.5, and any deemed investment earnings
attributable to these contributions, shall always be one hundred
percent (100%) vested. In addition, a Participant shall be one
hundred percent (100%) vested in the Corporation’s
contributions, including any deemed investment earnings
attributable to these contributions, upon his death or Disability
while he is actively employed by the Corporation.
Article VII
Benefits
7.1 Retirement. Unless benefits have already
commenced pursuant to another section in this Article VII, a
Participant shall be entitled to begin receipt of the vested amount
credited to his Deferral Account as of the Valuation Date
coinciding with his Normal Retirement Date. Payment of any amount
under this Section shall commence within thirty (30) days of
the Participant’s Retirement and be in accordance with the
payment method elected by the Participant on his Participant
Agreement and Deferral Election Form.
7.2 Disability. If a Participant suffers a
Disability while employed with the Corporation and before he is
entitled to benefits under this Article, he shall receive the
amount credited to his Deferral Account as of the Valuation Date
coinciding with the date on which the Participant is determined to
have suffered a Disability. Payment of any amount under this
Section shall commence within thirty (30) days of when the
Committee determines the existence of the Participant’s
disability and be in accordance with the payment method elected by
the Participant on his Participant Agreement and Deferral Election
Form.
7.3 Pre-Retirement Survivor Distribution. If
a Participant dies before becoming entitled to benefits under this
Article, the Beneficiary or Beneficiaries designated under
Section 12.6, shall receive the vested amount credited to the
Participant’s Deferral Account as of the Valuation Date
coinciding with the date of the Participant’s death. Payment
of any amount under this Section shall be made within thirty
(30) days of the Participant’s death, or if later,
within 30 days of when the Committee receives notification of
or otherwise confirms the Participant’s death, and be in
accordance with the payment method elected by the Participant on
his Participant Agreement and Deferral Election Form.
7.4 Post-Retirement Survivor Benefit. If a
Participant dies after benefits have commenced, but prior to
receiving complete payment of benefits under this Article, the
Beneficiary or Beneficiaries designated under Section 12.6,
shall continue to receive the vested amount credited to the
Participant’s Deferral Account as of the Valuation Date
coinciding with the date of the Participant’s death and be in
accordance with the current payment method for Retirement
Distribution as elected by the Participant on his Participant
Agreement and Deferral Election Form. Payment of any amount under
this Section shall be made within thirty (30) days of the
Participant’s death, or if later, within 30 days of when
the Committee receives notification of or otherwise confirms the
Participant’s death.
7.5 Termination. If a Participant’s
employment terminates with the Corporation, and such termination is
a Separation from Service, before he becomes enti
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