JPMORGAN CHASE & CO.
2005 DEFERRED COMPENSATION PLAN
Restated Effective as of December 31, 2008
Effective
January 1, 2005, JPMorgan Chase & Co
(“Company”) established the JPMorgan Chase & Co.
2005 Deferred Compensation Plan (“Plan”). The purpose
of the Plan is to provide Participants with an opportunity to defer
payment of a portion their compensation as a means of saving for
their retirement or other purposes.
The Plan applies
to deferrals or vesting of deferrals that occurred on or after
January 1, 2005. Pursuant to final and proposed Treasury
Regulations and Internal Revenue Service Notice 2005-1 promulgated
under Section 409A of the Code, the Plan has been interpreted
and operated in good faith compliance with Section 409A
through December 31, 2008. Effective December 31, 2008,
this Plan has been amended to reflect changes in tax laws as
mandated by Section 409A of the Code. The Plan, dated
January 1, 2005 and employee communications through
December 31, 2008 shall constitute the plan for the interim
period of good faith compliance. All sections of the Plan shall be
interpreted in such a manner as to comply with
Section 409A
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 for a
select group of eligible management and highly compensated
employees 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.
Vested amounts
deferred under the JPMorgan Chase Deferred Compensation Program
prior to January 1, 2005 (“ Prior Program”), as
well as investment experience thereon, are separately accounted for
and remain subject to the terms and conditions of that Program as
in effect on that date. No change to the operations or terms of the
Program occurred after October 3, 2004 (other than with
respect to Investment Options to be offered in calendar year 2006).
The Prior Program will not comply with Section 409A of the
Code, unless there is a material modification of such
Program
When the
context so indicates, the singular or the plural number and the
masculine or feminine gender shall be deemed to include the other,
the terms “he,” “his,” and
“him” shall refer to a Participant or a Beneficiary of
a Participant, as the case may be, unless the context otherwise
requires, the capitalized terms shall have the following
meanings:
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1.1
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“Account”
means the bookkeeping
account established by the Company with respect to a Participant
under Article IV of the Plan. Such Account shall be credited
with Deferred Amounts, including investment experience thereon, in
accordance with the Participant’s Deferral Election and any
investment experience from Deemed Investments. Within an Account,
each Deferred Amount, including investment experience, shall be
separately accounted for; and each Deferred Amount shall be subject
to separate Distribution Elections.
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1.2
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“ Annual Installments
” shall mean an amount payable annually on a Distribution
Date or Initial Distribution Date based 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 1 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.
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1.3
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“Administrator
” means the
individual holding the title “Compensation and Benefits
Executive” of the Company or such other individual designated
by the Committee, who shall be responsible for those functions
assigned to him under the Plan; provided that the term
“Administrator” shall mean the Committee with respect
to any discretionary act hereunder which affects any person subject
to Section 16(a) of the Securities Exchange Act of 1934, as
amended.
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1.4
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“Affiliate
” means any
corporation that is included in a controlled group of corporations
(within the meaning of Section 414(b)of the Code). This would
include the Company, any trade or business (whether or not
incorporated) under common control with the Company (within the
meaning of Section 414(c) of the Code), any organization that is
part of the same affiliated service group (within the meaning of
Section 414(m) of the Code) as the Company and any other entity
required to be aggregated with the Company pursuant to the Treasury
Regulations under Section 414(o) of the Code; provided that for
this purpose, the Plan shall retain the 80% benchmark in defining
an Affiliate.
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1.5
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“ Allocation/Transfer
Election ” means an election by a Participant in
accordance with the provisions of Article V of the Plan as to
the allocation, reallocation or the transfer of the
Participant’s future deferrals and/or existing Account
balances among the Investment Options.
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1.6
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“ Allocation/Transfer
Election Form ” means such form or other designated means
by which the Participant makes an Allocation Election. Such
“other designated means” may include, but not be
limited to, interactive voice response, internet, intranet and
other electronic means.
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1.7
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“Bank ” means JPMorgan Chase Bank
National Association.
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1.8
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“ Beneficiary” or
“Beneficiaries ” means, with respect to a
Participant, any natural person(s), estate or trust(s) designated
by the Participant on the form provided by the Administrator to
receive the benefits specified under the Plan in the event of the
Participant’s death. The Participant’s estate shall be
the Beneficiary if: (i) the Participant has not designated any
natural person(s) or trust(s) as Beneficiary, or (ii) all
designated Beneficiaries have predeceased the Participant.
Designations made under the Program or under Bank One Corporation
Deferred Compensation Plan shall apply to amounts deferred under
the Plan until a new designation is filed.
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1.9
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“ Board ” shall
mean the Board of Directors of the Company; provided that
any action taken by a duly authorized committee of the Board of
Directors within the scope of authority delegated to it by the
Board shall be considered an action of the Board of Directors for
the purpose of this Plan.
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1.10
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“ Bonus ” means
the annual incentive compensation payable in the form of an annual
cash bonus pursuant to a calendar year performance program,
including any Performance-Based Bonus but before reduction for
taxes and any other amounts as the Administrator may
specify.
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1.11
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“ Code ” means
the Internal Revenue Code of 1986, as it may be amended from time
to time, as well as Treasury Regulations promulgated
thereunder.
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1.12
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“ Commissions ”
means commissions and production overrides earned by a Participant
for services rendered, but before reduction for (i) taxes,
(ii) any before-tax contributions made on the
Participant’s behalf under any tax-qualified employee benefit
plans established by the Company and (iii) any amount not
included in the Participant’s income pursuant to Section 125,
129, or 132 of the Code. Base salary shall be considered part of
“Commissions” for these purpose, except that it shall
include base salary earned for the month December.
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1.13
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“ Committee ”
means the Compensation and Management Development Committee of the
Board.
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1.14
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“ Deemed Investment
” or “Deemed Invested ” means the notional
conversion of the balance held in a Participant’s Account
into shares or units of the Investment Options that are used as
measuring devices for determining the value of a
Participant’s Account.
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1.15
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“ Deferral Election
” means an election by a Participant to defer a portion of
the Participant’s Commissions, Bonus and/or Other
Compensation in accordance with Article III of the
Plan.
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1.16
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“ Deferral Election
Form ” means such form or other designated means by which
a Participant elects the amount of Commissions, Bonus and/or Other
Compensation to defer (in dollar amount or percentage). Such
“other designated means” may include, but not be
limited to, an offer letter, interactive voice response, internet,
intranet, and other electronic means.
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1.17
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“ Deferred Amounts
” means, with respect to a Participant, the Commissions,
Bonus and Other Compensation amounts that the Participant has
elected to defer under the Plan and includes investment experience
following the date of deferral.
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1.18
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“ Distribution Election
” means elections by the Participant made at the same time as
his/her Deferral Election (i) as to the form of payment of the
Deferred Amount (including investment experience thereon) subject
to the Deferral Election and (ii) date(s) when such payments
shall commence.
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1.19
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“ Distribution Election
Form ” means such form or other designated means by which
a Participant makes a Distribution Election. Such other
“designated means” may include, but not be limited to,
an offer letter, interactive voice response, internet, intranet,
and other electronic means.
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1.20
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“ DSIB ” means
the Deferred Supplemental Income Benefit Investment Option, which
was only available for Deferred Amounts attributable to deferrals
credited to such Deemed Investment in January 2005. See
Appendix B for a full description of this Deemed
Investment.
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1.21
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“ Distribution Date
” means any time during the calendar year (i) for which
a Participant elected a specified year for a distribution or
(ii) the calendar year following the Initial Distribution
Date.
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1.22
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“ Eligible Employee
” means an Employee who is designated by the Administrator as
eligible to participate in the Plan in accordance with
Section II hereof, provided that a rehired Employee who was a
Participant shall not become Eligible Employee for purposes of
30 day rule set forth in Section 3.1 until 24 months
have elapsed.
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1.23
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“ Employee ”
means an individual whose employment classification is that of a
regular full-time employee and who is on a United States payroll of
a Participating Company.
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1.24
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“ ERISA ” means
the Employee Retirement Income Security Act of 1974, as it may be
amended from time to time, as well as Treasury Regulations
promulgated thereunder.
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1.25
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“FICA Amount
” means Federal
Insurance Contributions Act tax imposed under Section 3101,
Section 3121(a) and Section 3121(v)(2) of the Code, where
applicable, on Deferred Amounts.
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1.26
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“ Full Career
Eligibility ” means a Separation from Service that occurs
on or after the completion of 15 years of recognized service
with the Company as set forth in the Company’s human resource
data basis relating to service related policies.
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1.27
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“ Initial Distribution
Date ” means the calendar year immediately following the
calendar year in which a Separation from Service occurs with
respect to a Participant who:
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did
not made a Distribution Election with respect to a Deferred
Amount,
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elected a lump sum or Installment
following Separation from Service with respect to a Deferred
Amount,
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is
subject to automatic distribution rules of Section 7.7(a) with
respect to a Deferred Amount, including investment experience,
or
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made a Distribution Election of a
specific year that immediately precedes the calendar year of the
Participant’s Separation from Service.
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Notwithstanding
anything in this Plan to the contrary, any distribution hereunder
resulting from a Separation from Service with respect to a
Specified Employee shall occur on the later of the Initial
Distribution Date or six months from date of his/her Separation
from Service.
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1.28
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“ Investment Options
” mean the hypothetical securities or other investments as
may be provided, from time to time, under the Plan, from which a
Participant may select to be used as measuring devices to determine
the Deemed Investment earnings or losses of the Participant’s
Account. A Participant shall have no real or beneficial ownership
in the security or other investment represented by the Investment
Options.
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1.29
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“ Other Compensation
” means compensation to which an Employee has a legal binding
right within the meaning Section 409A of the Code and which is
payable in a future calendar year. Other Compensation may include
awards of restricted stock units and dividends thereon that are not
subject to a substantial risk of forfeiture as defined by
Section 409A of the Code. It may also include Deferral
Elections and Distribution Elections set forth in letters offering
employment; provided that the Employee does not have a
legally binding right to such amounts prior to accepting such offer
of employment.
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1.30
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“ Participant ”
means an Eligible Employee who has elected to make Commission
and/or Bonus deferrals in accordance with the Plan.
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1.31
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“ Participating
Employer” means the Company and any Affiliate that has
been authorized by the Administrator to have its Employees eligible
to participate in the Plan.
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1.32
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“ Performance-Based
Bonus ” means any performance-based Bonus that meets the
requirements of Section 409A of the Code with respect to
performance-based compensation based on services performed over a
period of at least twelve months.
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1.33
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“ Plan ” means
this JPMorgan Chase & Co. 2005 Deferred Compensation Plan as
documented herein and as may be amended from time to time
hereafter. In employee communications, it is referred to as the
Voluntary Bonus Deferral Plan and/or Voluntary Compensation
Deferral Plan.
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1.34
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“ Plan Year ”
means the twelve-month period beginning each January 1 and ending
each December 31.
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1.35
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“ Prior Program ”
means the JPMorgan Chase Deferred Compensation Program as in effect
through December 31, 2004 with respect to amounts deferred and
vested on or prior to December 31, 2004.
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1.36
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“ Separation from
Service ” means a termination of employment with the
Company or an Affiliate as set forth in Treasury
Regulation 1.409A-1(h), using the 20% bench mark set forth
therein. For purposes of a good faith compliance with
Section 409A of the Code and Notice 2005-1 and period through
December 31, 2008, it means a termination of employment as set
forth on the books and records of the Company.
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1.37
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“ Specified Employee
” means a “specified employee” as defined in
Section 409A (a)(2)(B)(i) of the Code. For this purpose and
all other plans of deferred compensation, the specified employee
identification date for determining a whether a Participant is a
Specified Employee shall be each December 31st and W-2
compensation for that year, as permitted by Treasury
Regulation 1.409A-1(i)(2), shall be used. An individual who is
a Specified Employee on the specified identification date shall be
considered to be in such status from the April 1 immediately
following the identification date up to and including the next
March 31 s provided that a non-resident alien
employee of an Affiliate shall not be included . The Plan
determines specified employees based on the top paid fifty
employees.
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1.38
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“ 2005 Deferred Amount
” means, for purposes of Article VI, any vested amount
credited to a Participant’s Account with respect to Bonus,
Commissions and Other Compensation deferred during calendar year
2005, including investment experience thereon; provided that
the investment experience for any 2005 Deferred Amount treated as
if invested in DSIB and the Private Equity Investment Options shall
be the rate of return of the Short-Term Investment Option and the
investment experience for the Multi-Strategy Investment Option
shall be credited through October 31, 2005.
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1.39
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“ 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 the
Cole); 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
determined under Section 409A.
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1.40
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“ Valuation Date
” means any date specified by the Administrator with respect
to valuing an Account of a Participant for purposes of a
distribution during that month, which shall be the fifth business
day in which a distribution occurs; provided that if a dividend has
been declared on the common stock of the Company during a month in
which a distribution shall occur, the Valuation Date shall be the
dividend record date plus one day.
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2.1
Eligibility . An Employee shall be eligible to
participate in the Plan for any Plan Year only if such Employee
is
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designated by the Administrator or
his delegatee as an officer and/or other key employee of a
Participating Company, and
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notified in writing by the
Administrator or his delegatee that he or she is eligible to
participate in the Plan.
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2.2
Participant . An Eligible Employee shall become a
Participant on the last business day of any enrollment period (or
other period specified by Article III) if he or she makes a
Deferral Election in accordance with Article III. With respect
to amounts not subject to an annual enrollment period, he or she
shall become a Participant when the Deferral Election is
irrevocable.
ARTICLE III—DEFERRAL AND
DISTRIBUTION ELECTIONS
(a)
General Rule . An Eligible Employee for any Plan Year
may make a Deferral Election by completing and submitting a
Deferral Election Form during the annual enrollment period
established by the Administrator with respect to Bonuses and,
subject to an election being made available, Commissions;
provided that in the case of the first Plan Year in which an
Employee becomes an Eligible Employee in accordance with
Article II, such Deferral Election may be made with respect to
services to be performed subsequent to the date of the Deferral
Election within thirty (30) days after the Employee becomes an
Eligible Employee; provided further that with respect to
Other Compensation, the Deferral Election Form shall be submitted
and returned in accordance with the period established by the
Administrator and as provided in Section 3.1 (d) below. See
definition
(b)
Commission Deferrals . Subject to an election being
made available, with respect to Commissions to be earned in any
Plan Year, a Participant may make a Deferral Election during the
enrollment period which shall occur on or before
December 31 st of the year prior to the Plan Year to which the
Deferral Election relates.
(c)
Bonus Deferrals . A Participant may elect to defer a
portion of any Bonus amounts to be earned in a performance year by
completing and submitting a Deferral Election Form during an annual
enrollment period which shall occur no later than
December 31 st prior to the calendar year to which the Deferral
Election relates ; provided that if the Administrator
determines that a Bonus is a Performance Based Bonus, a Participant
may elect to defer a portion of any Performance-Based Bonus by
making a Deferral Election during the enrollment period which shall
occur at least six months prior to the end of the performance
period to which such Performance-Based Bonus relates.
Notwithstanding the foregoing, with respect to a Bonus earned in
the 2004 performance year, a Participant may be permitted to make a
later enrollment election in good faith reliance on Internal
Reven
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