TABLE OF CONTENTS

 

		Page
Purpose		1
ARTICLE 1	Definitions	1
ARTICLE 2	Selection, Enrollment, Eligibility	7
2.1	Selection by Committee	7
2.2	Enrollment Requirements	7
2.3	Eligibility; Commencement of Participation	7
2.4	Termination of Participation and/or Deferrals	8
ARTICLE 3	Deferral Commitments/Set-Aside/Crediting/Taxes	8
3.1	Minimum Deferrals	8
3.2	Maximum Deferral	8
3.3	Election to Defer; Effect of Election Form	9
3.4	Withholding of Annual Deferral Amounts	9
3.5	Annual Set-Aside Amount	9
3.6	Investment of Trust Assets	9
3.7	Vesting	10
3.8	Crediting/Debiting of Account Balances	10
3.9	FICA and Other Taxes	12
ARTICLE 4	Specified Time Distribution; Unforeseeable Financial Emergencies; Early Withdrawal Election	12
4.1	Specified Time Distribution	12
4.2	Other Benefits Take Precedence Over Specified Date Distribution	12
4.3	Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies	13
ARTICLE 5	Distributions	14
5.1	Benefit Distribution Date	14
5.2	Limited Cashouts	14
5.3	Time of Distribution	14
5.4	Change to Election Forms	15
ARTICLE 6	Retirement Benefit	16
6.1	Retirement Benefit	16
6.2	Payment of Retirement Benefit	16
6.3	Death Prior to Completion of Retirement Benefit	16
ARTICLE 7	Pre-Retirement Survivor Benefit	17
7.1	Pre-Retirement Survivor Benefit	17

 

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7.2	Payment of Pre-Retirement Survivor Benefit	17
ARTICLE 8	Termination Benefit	17
8.1	Termination Benefit	17
8.2	Payment of Termination Benefit	17
ARTICLE 9	Disability Benefit	17
9.1	Disability Benefit	17
9.2	Payment of Disability Benefit	17
ARTICLE 10	Beneficiary Designation	18
10.1	Beneficiary	18
10.2	Beneficiary Designation; Change; Spousal Consent	18
10.3	Acknowledgment	18
10.4	No Beneficiary Designation	18
10.5	Doubt as to Beneficiary	18
10.6	Discharge of Obligations	18
ARTICLE 11	Leave of Absence	19
11.1	Paid Leave of Absence	19
11.2	Unpaid Leave of Absence	19
11.3	Leaves Resulting in Termination of Employment	19
ARTICLE 12	Termination, Amendment or Modification	20
12.1	Termination	20
12.2	Amendment	20
12.3	Effect of Payment	21
ARTICLE 13	Administration	21
13.1	Committee Duties	21
13.2	Administration Upon Change In Control	21
13.3	Agents	22
13.4	Binding Effect of Decisions	22
13.5	Indemnity of Committee	22
13.6	Employer Information	22
ARTICLE 14	Other Benefits and Agreements	22
14.1	Coordination with Other Benefits	22
ARTICLE 15	Claims Procedures	23
15.1	Presentation of Claim	23
15.2	Notification of Decision	23
15.3	Review of a Denied Claim	24
15.4	Decision on Review	24

 

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15.5	Legal Action	25
ARTICLE 16	Trust	25
16.1	Establishment of the Trust	25
16.2	Interrelationship of the Plan and the Trust	25
16.3	Distributions From the Trust	25
ARTICLE 17	Miscellaneous	25
17.1	Status of Plan	25
17.2	Unsecured General Creditor	25
17.3	Employer’s Liability	26
17.4	Nonassignability	26
17.5	Not a Contract of Employment	26
17.6	Furnishing Information	26
17.7	Terms	26
17.8	Captions	26
17.9	Governing Law	26
17.10	Notice	27
17.11	Successors	27
17.12	Spouse’s Interest	27
17.13	Validity	27
17.14	Incompetent	27
17.15	Court Order	27
17.16	Distribution in the Event of Income Inclusion under Section 409A	28
17.17	Deduction Limitation on Benefit Payments	28
17.18	Insurance	28
17.19	Legal Fees To Enforce Rights After Change in Control	29

 

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WEST SUBURBAN BANCORP, INC.

DIRECTORS AND SENIOR MANAGEMENT

DEFERRED COMPENSATION PLAN

Effective January 1, 2005

as amended and restated

December 30, 2008

 

Purpose

 

The purpose of this Plan is to provide specified benefits to a select group of management or highly compensated Employees and Directors who contribute materially to the continued growth, development and future business success of West Suburban Bancorp, Inc., an Illinois corporation, and its subsidiaries, if any, that sponsor this Plan.  This Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.  This Plan is intended to be a non-qualified deferred compensation plan subject to Section 409A.  Participants were permitted to commence deferrals into the Plan effective January 1, 2005.  The Company also maintains the West Suburban Bancorp, Inc. Directors and Senior Management Deferred Compensation Plan under which all amounts deferred on or before December 31, 2004 are held.

 

This Plan was originally adopted effective January 1, 2005 and is hereby amended and restated in its entirety December 30, 2008.  This Plan is intended to comply with Section 409A in its entirety and has at all times since January 1, 2005 been operated in good faith compliance with Section 409A.  This Plan shall apply only with respect to amounts deferred or vested on or after January 1, 2005.

 

ARTICLE 1
Definitions

 

For the purposes of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:

 

1.1            “Account Balance” shall mean, with respect to a Participant, a credit on the records of the Employer equal to the sum of (i) the Deferral Account balance, and (ii) the Set-Aside Account balance.  The Account Balance, and each other specified account balance, shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.

 

1.2            “Annual Bonus” shall mean any compensation, in addition to Base Annual Salary relating to services performed during any calendar year, whether or not paid in such calendar year or included on the Federal Income Tax Form W-2 for such calendar year, payable to a Participant as an Employee under any Employer’s annual bonus and cash incentive plans.

 

 

1.3            “Annual Deferral Amount” shall mean that portion of a Participant’s Base Annual Salary, Annual Bonus and Director’s Fees that a Participant elects to have and is deferred in accordance with ARTICLE 3 for any one Plan Year.  In the event of a Participant’s Retirement, Disability, death or a Termination of Employment prior to the end of a Plan Year, such year’s Annual Deferral Amount shall be the actual amount withheld prior to such event.

 

1.4            “Annual Installment Method” shall be an annual installment payment over the number of years selected by the Participant in accordance with this Plan, calculated as follows: the Account Balance of the Participant shall be calculated as of the close of business on the last business day of the Plan Year.  The annual installment shall be calculated by multiplying this balance by a fraction, the numerator of which is one and the denominator of which is the remaining number of annual payments due the Participant.  By way of example, if the Participant elects a ten (10) year Annual Installment Method, the first payment shall be 1/10 of the Account Balance, calculated as described in this definition.  The following year, the payment shall be 1/9 of the Account Balance, calculated as described in this definition.  Each annual installment shall be paid no later than sixty (60) days after the last business day of the applicable Plan Year.

 

1.5            “Annual Set-Aside Amount” shall mean, for any one Plan Year, the amount determined in accordance with Section 3.5.

 

1.6            “Base Annual Salary” shall mean the annual cash compensation relating to services performed during any calendar year, whether or not paid in such calendar year or included on the Federal Income Tax Form W-2 for such calendar year, excluding Annual Set-Aside Amounts, bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, director’s fees and other fees, and automobile and other allowances paid to a Participant for employment services rendered (whether or not such allowances are included in the Employee’s gross income). Base Annual Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non-qualified plans of any Employer and shall be calculated to include amounts not otherwise included in the Participant’s gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer; provided, however, that all such amounts will be included in compensation only to the extent that had there been no such plan, the amount would have been payable in cash to the Employee.

 

1.7            “Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated in accordance with ARTICLE 10, that are entitled to receive benefits under this Plan upon the death of a Participant.

 

1.8            “Beneficiary Designation Form” shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to designate one or more Beneficiaries.

 

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1.9            “Benefit Distribution Date” shall have the meaning set forth in Section 5.1.

 

1.10          “Board” shall mean the board of directors of the Company.

 

1.11          “Change in Control” shall mean the first to occur of any of the following events:

 

(a)             The consummation of the acquisition by any person (as such term is defined in Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “ 1934 Act ”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of fifty percent (50%) or more of the combined voting power of the then outstanding voting securities of the Company; or

 

(b)            The individuals who, as of the date hereof, are members of the Board of the Company cease for any reason to constitute a majority of the Board, unless the election, or nomination for election by the shareholders, of any new director was approved by a vote of a majority of the Board, and such new director shall, for purposes of this Agreement, be considered as a member of the Board; or

 

(c)             Consummation by the Company of:  (1) a merger or consolidation if the shareholders immediately before such merger or consolidation do not, as a result of such merger or consolidation, own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting securities of the entity resulting from such merger or consolidation in substantially the same proportion as their ownership of the combined voting power of the voting securities of the Company outstanding immediately before such merger or consolidation; or (2) a complete liquidation or dissolution or an agreement for the sale or other disposition of all or substantially all of the assets of the Company.

 

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because fifty percent (50%) or more of the combined voting power of the then outstanding securities of the Company is acquired by:  (1) a trustee or other fiduciary holding securities under one or more employee benefit plans maintained for employees of the Company or an Employer; or (2) any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the shareholders in the same proportion as their ownership of stock of the Company immediately prior to such acquisition.

 

1.12          “Claimant” shall have the meaning set forth in Section 15.1.

 

1.13          “Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.

 

1.14          “Committee” shall mean the committee described in ARTICLE 13.

 

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1.15          “Company” shall mean West Suburban Bancorp, Inc., an Illinois corporation, and any successor to all or substantially all of the Company’s assets or business.

 

1.16          “Deferral Account” shall mean (i) the sum of all of a Participant’s Annual Deferral Amounts, plus (ii) amounts credited in accordance with all the applicable crediting and debiting provisions of this Plan that relate to the Participant’s Deferral Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to his or her Deferral Account.

 

1.17          “Deferred Compensation and Split-Dollar Insurance Agreement” shall mean the Deferred Compensation and Split-Dollar Insurance Agreement previously executed by the Participant and the Employer which set forth the amount of compensation the Employer “set-aside” on that Participant’s behalf each year.

 

1.18          “Director” shall mean any member of the board of directors of any Employer.

 

1.19          “Director’s Fees” shall mean the annual fees paid by any Employer, including retainer fees and meetings fees, as compensation for serving on the board of directors.

 

1.20          “Disability” shall mean that (i) the Participant is unable 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 (ii) the Participant is, 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, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company or an Employer.

 

1.21          “Disability Benefit” shall mean the benefit set forth in ARTICLE 9.

 

1.22          “Election Form” shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to make an election under the Plan.

 

1.23          “Employee” shall mean a person who is an employee of any Employer.

 

1.24          “Employer(s)” shall mean the Company and/or any of its subsidiaries (now in existence or hereafter formed or acquired) that have been selected by the Board to participate in the Plan and have adopted the Plan as a sponsor.

 

1.25          “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.

 

1.26          “First Plan Year” shall mean the period beginning January 1, 2005 and ending December 31, 2005.

 

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1.27          “Measurement Funds” shall mean the hypothetical investment fund or benchmark made available to Participants by the Committee for the purpose of valuing amounts contributed to the Plan.

 

1.28          “Participant” shall mean any Employee or Director (i) who is selected to participate in the Plan, (ii) who elects to participate in the Plan, (iii) who signs a Participation Agreement, an Election Form and a Beneficiary Designation Form, (iv) whose signed Participation Agreement, Election Form and Beneficiary Designation Form are accepted by the Committee, (v) who commences participation in the Plan, and (vi) whose Participation Agreement has not terminated.  A spouse or former spouse of a Participant shall not be treated as a Participant in the Plan or have an account balance under the Plan, even if he or she has an interest in the Participant’s benefits under the Plan as a result of applicable law or property settlements resulting from legal separation or divorce.

 

1.29          “Participation Agreement” shall mean a written agreement, as may be amended from time to time, which is entered into by and between an Employer and a Participant with respect to this Plan.  Each Participation Agreement executed by a Participant and the Participant’s Employer shall provide for the entire benefit to which such Participant is entitled under the Plan.  Should there be more than one Participation Agreement, the Participation Agreement bearing the latest date of acceptance by the Employer shall supersede all previous Participation Agreements in their entirety and shall govern such entitlement.  The terms of any Participation Agreement may be different for any Participant, and any Participation Agreement may provide additional benefits not set forth in the Plan or limit the benefits otherwise provided under the Plan; provided, however, that any such additional benefits or benefit limitations must be agreed to by both the Employer and the Participant.

 

1.30          “Plan” shall mean the Company’s Directors and Senior Management Deferred Compensation Plan, which shall be evidenced by this instrument and by each Participation Agreement, as they may be amended from time to time.

 

1.31          “Plan Year” shall, except for the First Plan Year, mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year.

 

1.32          “Pre-Retirement Survivor Benefit” shall mean the benefit set forth in ARTICLE 7.

 

1.33          “Retirement,” “Retire(s)” or “Retired” shall mean, with respect to an Employee, Termination of Employment from all Employers on or after the earlier of the attainment of age fifty (50); and shall mean with respect to a Director who is not an Employee, severance of his or her directorships with all Employers on or after the later of (a) the attainment of age seventy (70), or (b) in the sole discretion of the Committee, an age later than age seventy (70).  If a Participant is both an Employee and a Director, Retirement shall occur on the later of the date he or she Retires as an Employee or a Director.  Retirement, for purposes of the Plan, shall mean a “separation from service” as determined under Treas. Reg. Section 1.409A-1(h).

 

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1.34          “Retirement Benefit” shall mean the benefit set forth in ARTICLE 6.

 

1.35          “Section 409A” shall mean Code Section 409A, related U.S. Treasury Department regulations and guidance promulgated thereunder, including such regulations and guidance promulgated after the effective date of the Plan, as deemed appropriate by the Committee.

 

1.36          “Set-Aside Account” shall mean (i) the sum of the Participant’s Annual Set-Aside Amounts, plus (ii) amounts credited or debited in accordance with all the applicable crediting and debiting provisions of this Plan that relate to the Participant’s Set-Aside Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Participant’s Set-Aside Account.

 

1.37          “Specified Employee” shall mean, in the event the Company becomes publicly traded, any Participant who is a “key employee” (as defined in Code Section 416(i) without regard to paragraph (5) thereof), as determined by the Committee based upon the twelve (12)-month period ending on each December 31 st  (such 12-month period is referred to below as the “identification period”).  All Participants who are determined to be key employees under Code Section 416(i) (without regard to paragraph (5) thereof) during the identification period shall be treated as Specified Employees for purposes of the Plan during the twelve (12)-month period that begins on the April 1 following the close of such identification period.  For purposes of determining whether an individual is a key employee under Code Section 416(i), “compensation” shall mean such individual’s W-2 compensation as reported by the Company or any Employer for a particular calendar year.

 

1.38          “Specified Time Distribution” shall mean the distribution set forth in Section 4.1.

 

1.39          “Termination Benefit” shall mean the benefit set forth in ARTICLE 8.

 

1.40          “Termination of Employment” shall mean the severing of the Participant’s employment with all Employers, or service as a Director of all Employers, voluntarily or involuntarily, for any reason other than Retirement, Disability, death or an authorized leave of absence; provided such severing of employment constitutes a “separation from service” as defined in Treas. Reg. Section 1.409A-1(h).  If a Participant is both an Employee and a Director, a Termination of Employment shall on the later of the date he or she terminates his or her employment with an Employer as an Employee or service as a Director of all Employers.

 

1.41          “Trust” shall mean one or more trusts that may be established by the Company, in its sole discretion.

 

1.42          “Unforeseeable Financial Emergency” shall mean a severe financial hardship of the Participant resulting from (i) an illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary or the Participant’s dependent (as defined in Code Section 152, without regard to paragraphs (b)(1), (b)(2) and (d)(1)(B) thereof), (ii) loss of

 

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the Participant’s property due to casualty, or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

 

ARTICLE 2
Selection, Enrollment, Eligibility

 

2.1            Selection by Committee .  Participation in the Plan shall be limited to a select group of management and highly compensated Employees and Directors of the Employers, as determined by the Committee in its sole discretion.  From that group, the Committee shall select, in its sole discretion, Employees and Directors to participate in the Plan.

 

2.2            Enrollment Requirements .

 

(a)            As a condition to participation, each selected Employee or Director who is eligible to participate in the Plan effective as of the first day of a Plan Year, shall complete, execute and return to the Committee a Participation Agreement, an Election Form and a Beneficiary Designation Form, all prior to the first day of such Plan Year, or such earlier deadline as may be established by the Committee in its sole discretion.  In addition, the Committee shall establish from time to time such other enrollment requirements as it determines in its sole discretion are necessary.

 

(b)            A selected Employee or Director who first becomes eligible to participate in this Plan after the first day of a Plan Year, and who is not otherwise prohibited from making an election under this subsection (b) by operation of the plan aggregation rules of Section 409A, must complete, execute and return to the Committee, as the Committee may deem necessary in its sole discretion, a Participation Agreement, an Election Form and a Beneficiary Designation Form within thirty (30) days after he or she first becomes eligible to participate in the Plan, or within such other earlier deadline as may be established by the Committee, in its sole discretion, in order to participate for that Plan Year.  In such event, such person’s participation in this Plan shall not commence earlier than the date determined by the Committee pursuant to Section 2.3 and such person shall not be permitted to defer under this Plan any portion of his or her Base Annual Salary, Annual Bonus or Director’s fees that are paid with respect to services performed prior to his or her participation commencement date, except to the extent permissible under Section 409A.

 

2.3            Eligibility; Commencement of Participation .  Provided an Employee or Director selected to participate in the Plan has met all enrollment requirements set forth in this Plan and required by the Committee, including returning all required documents to the Committee within the specified time period, that Employee or Director shall commence participation in the Plan on the first day of the month following the month in which the Employee or Director completes all enrollment requirements.  If an Employee or a

 

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Director fails to meet all such requirements within the period required, in accordance with Section 2.2, that Employee or Director shall not be eligible to participate in the Plan until the first day of the Plan Year following the delivery to and acceptance by the Committee of the required documents.

 

2.4            Termination of Participation and/or Deferrals .  If the Committee determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, to the extent permitted by Section 409A, the Committee shall have the right, in its sole discretion, to (i) terminate any deferral election the Participant has made for the remainder of the Plan Year in which the Participant’s membership status changes, (ii) prevent the Participant from making future deferral elections and/or (iii) take any other action permitted or required pursuant to Section 409A as and when the Committee deems appropriate or necessary.  Notwithstanding the foregoing, in the event of a termination of the Plan in accordance with Section 12.1, the termination of the affected Participant’s eligibility for participation in the Plan shall not be governed by this Section 2.4, but rather shall be governed by ARTICLE 12.  In the event that a Participant is no longer eligible to defer compensation under this Plan, the Participant’s Account Balance shall continue to be governed by the terms of this Plan until such time as the Participant’s Account Balance is paid in accordance with the terms of this Plan.

 

ARTICLE 3
Deferral Commitments/Set-Aside/Crediting/Taxes

 

3.1            Minimum Deferrals .  For each Plan Year, a Participant may elect to defer, as his or her Annual Deferral Amount, Base Annual Salary, Annual Bonus and/or Director’s Fees in an aggregate minimum amount of $3,000.  If an election is made for less than $3,000, the amount deferred shall be zero.

 

3.2            Maximum Deferral .

 

(a)            Base Annual Salary, Annual Bonus and Director’s Fees .  For each Plan Year, a Participant may elect to defer, as his or her Annual Deferral Amount, Base Annual Salary, Annual Bonus and/or Director’s Fees up to the following maximum percentages for each deferral elected:

 

Deferral		Maximum Amount
Base Annual Salary		80	%
Annual Bonus		80	%
Director’s Fees		100	%

 

Notwithstanding the foregoing, if a Participant first becomes a Participant after the first day of a Plan Year, or in the case of the first Plan Year of the Plan itself, the maximum Annual Deferral Amount, with respect to Base Annual Salary,

 

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Annual Bonus and Directors Fees shall be limited to the amount of compensation not yet earned by the Participant as of the date the Participant submits a Participation Agreement and Election Form to the Committee for acceptance.

 

3.3            Election to Defer; Effect of Election Form .

 

(a)            First Plan Year .  In connection with a Participant’s commencement of participation in the Plan, the Participant shall make an irrevocable deferral election for the Plan Year in which the Participant commences participation in the Plan, along with such other elections as the Committee deems necessary or desirable under the Plan.  For these elections to be valid, the Election Form must be completed and signed by the Participant, timely delivered to the Committee (in accordance with Section 2.2) and accepted by the Committee.

 

(b)            Subsequent Plan Years .  For each succeeding Plan Year, an irrevocable deferral election for that Plan Year, and such other elections as the Committee deems necessary or desirable under the Plan, shall be made by timely delivering to the Committee, in accordance with its rules and procedures, before the end of the Plan Year preceding the Plan Year for which the election is made, a new Election Form. If no such Election Form is timely delivered for a Plan Year, the Annual Deferral Amount shall be the same as that elected for the preceding Plan Year.

 

3.4            Withholding of Annual Deferral Amounts .  For each Plan Year, the Base Annual Salary portion of the Annual Deferral Amount shall be withheld from each regularly scheduled Base Annual Salary payroll in equal amounts, as adjusted from time to time for increases and decreases in Base Annual Salary.  The Annual Bonus and/or Director’s Fees portion of the Annual Deferral Amount shall be withheld at the time the Annual Bonus or Director’s Fees are or otherwise would be paid to the Participant, whether or not this occurs during the Plan Year itself.

 

3.5            Annual Set-Aside Amount .  The Employer may, in its sole discretion, credit a “set-aside” amount to a Participant’s Set-Aside Account under this Plan each month, which amounts shall be for that Participant the Annual Set-Aside Amount for that Plan Year; provided, however, that if a Participant has entered into an employment agreement with the Employer and that agreement requires the Employer to credit a particular “set-aside” amount on behalf of that Participant, the Employer must credit such amount to the Participant’s Set-Aside Account under this Plan.  The amount so credited to a Participant may be smaller or larger than the amount credited to any other Participant, and the amount credited to any Participant for a Plan Year may be zero, even though one or more other Participants receive an Annual Set-Aside Amount for that Plan Year.

 

3.6            Investment of Trust Assets .  If the Company establishes a Trust, the Trustee of the Trust shall be authorized, upon written instructions received from the Committee or investment manager appointed by the Committee, to invest and reinvest the assets of the Trust in accordance with the applicable Trust Agreement, including the disposition of stock and

 

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reinvestment of the proceeds in one or more investment vehicles designated by the Committee.

 

3.7            Vesting .  A Participant shall at all times be 100% vested in his or her Deferral Account and Set Aside Deferral Account.

 

3.8            Crediting/Debiting of Account Balances .  In accordance with, and subject to, the rules and procedures that are established from time to time by the Committee, in its sole discretion, amounts shall be credited or debited to a Participant’s Account Balance in accordance with the following rules:

 

(a)            Election of Measurement Funds .  A Participant, in connection with his or her initial deferral election in accordance with Section 3.3(a) above, shall elect, on the Election Form, one or more Measurement Fund(s) (as described in Section 3.8(c)) to be used to determine the amounts to be credited or debited to his or her Account Balance for the first day on which the Participant commences participation in the Plan and continuing thereafter for each subsequent day in which the Participant participates in the Plan, unless changed in accordance with the next sentence.  Commencing with the first business day that follows the Participant’s commencement of participation in the Plan and continuing thereafter for each subsequent day in which the Participant participates in the Plan, no later than the close of business on such day, the Participant may (but is not required to) elect, by submitting an Election Form to the Committee that is accepted by the Committee and received by the Company’s third-party administrator, if any, or by submitting changes via the Internet in a manner that is accepted by the Committee, to add or delete one or more Measurement Fund(s) to be used to determine the amounts to be credited or debited to his or her Account Balance, or to change the portion of his or her Account Balance allocated to each previously or newly elected Measurement Fund.  If an election is made in accordance with the previous sentence, it shall apply no later than the close of business on the next business day and continue thereafter for each subsequent day in which the Participant participates in the Plan, unless changed in accordance with the previous sentence.

 

(b)            Proportionate Allocation .  In making any election described in Section 3.8(a), the Participant shall specify on the Election Form, in increments of one (1) percentage point, the percentage of his or her Account Balance to be allocated to a Measurement Fund (as if the Participant was making an investment in that Measurement Fund with that portion of his or her Account Balance).

 

(c)            Measurement Funds .  The Participant may elect one or more of the measurement funds listed at Exhibit A , based on certain mutual funds (the “Measurement Funds”), for the purpose of crediting or debiting additional amounts to his or her Account Balance.  As necessary, the Committee may, in its

 

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sole discretion, discontinue, substitute or add a Measurement Fund.  Each such action will take effect on the first day of the calendar quarter that follows the day on which the Committee gives Participants advance written notice of such change by at least thirty (30) days.  By way of example, if the Committee decides on March 1st to discontinue a particular Measurement Fund, the Measurement Fund will be discontinued effective April 1.  If the Committee decides on March 15th to discontinue a particular Measurement Fund, the Measurement Fund will not be discontinued until July 1, since thirty days would not have elapsed before the following calendar quarter began on April 1.

 

(d)            Crediting or Debiting Method .  A Participant’s Account Balance shall be credited or debited on a daily basis based on the performance of each Measurement Fund selected by the Participant as though (i) a Participant’s Account Balance were invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable to such business day, at the closing price on such date; (ii) the portion of the Annual Deferral Amount that was actually deferred during any business day was invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable to such business day, no later than the close of business on the first business day after the day on which such amounts are actually deferred from the Participant’s Base Annual Salary, Director’s Fees and/or Annual Bonus through reductions in his or her payroll, at the closing price on such date; and (iii) any distribution made to a Participant that decreases such Participant’s Account Balance ceased being invested in the Measurement Fund(s), in the percentages applicable to such business day, no earlier than one business day prior to the distribution, at the closing price on such date.

 

(e)            No Actual Investment .  Notwithstanding any other provision of this Plan that may be interpreted to the contrary, the Measurement Funds are to be used for measurement purposes only, and a Participant’s election of any such Measurement Fund, the allocation to his or her Account Balance thereto, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant’s Account Balance shall not be considered or construed in any manner as an actual investment of his or her Account Balance in any such Measurement Fund.  In the event that the Company or the Trustee (as that term is defined in the Trust), in its own discretion, decides to invest funds in any or all of the Measurement Funds, no Participant shall have any rights in or to such investments themselves.  Without limiting the foregoing, a Participant’s Account Balance shall at all times be a bookkeeping entry only and shall not represent any investment made on his or her behalf by th