Exhibit 10.12
ORBITAL SCIENCES CORPORATION
NONQUALIFIED
MANAGEMENT DEFERRED
COMPENSATION PLAN
EFFECTIVE AS OF SEPTEMBER 1, 2003
ORBITAL SCIENCES CORPORATION
NONQUALIFIED MANAGEMENT DEFERRED COMPENSATION PLAN
EFFECTIVE: SEPTEMBER 1, 2003
WHEREAS , Orbital Sciences Corporation
(“Orbital”) has decided to establish a deferred
compensation plan for a select group of its key management and
highly compensated employees; and
WHEREAS , the purpose of this Plan is to provide a select
group of management or highly compensated employees with a
tax-deferred capital accumulation program through their voluntary
deferrals of Base Salary and Bonus and the allocation of Company
Discretionary Contributions; and
WHEREAS , this Plan of deferred compensation is intended to
be a “top-hat plan” (i.e., an unfunded deferred
compensation plan maintained for a select group of management or
highly compensated employees) pursuant to Sections 201(2),
301(a)(3) and 401(a)(1) of the Employee Retirement Income Security
Act of 1974 (“ERISA”).
NOW, THEREFORE, the Orbital Sciences Corporation
Nonqualified Management Deferred Compensation Plan is hereby
adopted in accordance with the following terms and
conditions:
ARTICLE 1 - Definitions
Unless
the context or subject matter otherwise requires, the following
definitions shall govern the Plan:
Section 1.01 Base Salary — the base salary
established by the Company to be earned by a Participant during a
calendar year.
Section 1.02 Beneficiary — a person (other
than the Participant) who is entitled to receive benefits under the
Plan because of his designation for such benefits by the
Participant under the provisions of this Plan.
Section 1.03 Board — the Board of
Directors of Orbital Sciences Corporation.
Section 1.04 Bonus — Management Incentive
Plan compensation (or any successor plan).
Section 1.05 Committee — the Human
Resources and Compensation Committee appointed by the Board to
administer the Plan.
Section 1.06 Company — Orbital Sciences
Corporation and its successors.
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Section 1.07 Company Discretionary Contributions
— the contributions made by the Company pursuant to the
provisions of Section 3.02 of the Plan.
Section 1.08 Deferrals — the portion of a
Participant’s Base Salary and/or Bonus that is deferred
pursuant to the provisions of Article 3 of the
Plan.
Section 1.09 Deferral Account — the
separate unfunded account established and maintained on the books
of the Company for each Participant pursuant to the provisions of
Article 6 of the Plan, which is credited with Company
Discretionary Contributions and Deferrals made on the
Participant’s behalf. The Deferral Account shall include
account balances accumulated under the Prior Plan that have been
transferred to this Plan. To the extent necessary to reflect
different vesting schedules and/or distribution dates, a
Participant’s Deferral Account can include multiple
sub-accounts.
Section 1.10 Deferral Election Form — the
form designated by the Company for use by Participants to
(a) contribute Deferrals to the Plan, (b) designate the
deemed investment of the Deferral Account, and (c) select the
timing and form of the distribution of Deferrals, Company
Discretionary Contributions and/or amounts transferred to the Plan
from the Prior Plan. The Committee may change the form at any
time.
Section 1.11 Effective Date —
September 1, 2003.
Section 1.12 First Plan Year —
September 1, 2003-December 31, 2003.
Section 1.13 Forfeiture — that portion of
a Participant’s Deferral Account that is attributable to
Company Discretionary Contributions and that is not Vested as of
the date the Participant terminates employment with the
Company.
Section 1.14 Involuntary Termination of
Employment — events which result in a separation from
service with the Company and which are generally not initiated by a
Participant, including but not limited to a layoff, disability or
discharge by the Company for any reason.
Section 1.15 Participant — an employee of
the Company who is (a) determined by the Company to be a member of
a select group of the Company’s management or highly
compensated employees; and (b) designated by the Committee as
a Participant under the Plan.
Section 1.16 Plan — this Nonqualified
Management Deferred Compensation Plan and any modification,
amendment, extension or renewal thereof.
Section 1.17 Plan Year — the calendar year
ending each December 31.
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Section 1.18 Prior Plan — the Orbital
Sciences Corporation 1995 Deferred Compensation Plan as in
existence immediately prior to the transfer of assets and
liabilities from such plan to this Plan, effective as of
September 1, 2003.
Section 1.19 Valuation Date — the date on
which a Participant’s Deferral Account is credited with
Deferrals and earnings. For purposes of this Plan, and in
accordance with the terms set forth by CIGNA, the Plan’s
third-party administrator, a Participant’s Deferral Account
will be subject to daily valuation.
Section 1.20 Vested — a
Participant’s nonforfeitable interest in a portion of his
Deferral Account. A Participant’s Vested interest shall be
determined in accordance with the provisions of Article 5 of
the Plan.
Section 1.21 Voluntary Termination of Employment
— events, other than those classified as an Involuntary
Termination of Employment, which are initiated by the Participant
and which result in a separation from service with the Company. For
purposes of this Plan, a Participant’s death will constitute
a Voluntary Termination of Employment.
ARTICLE 2 — Eligibility and
Participation
Section 2.01 Eligible Persons . Eligibility to
participate in the Plan is limited to (a) those management or
highly compensated employees of the Company with a Base Salary of
$125,000 or greater on January 1 of any Plan Year, and (b) any
additional management or highly compensated employees of the
Company who are designated as Participants by the
Committee.
Section 2.02 Notice of Participation . The
Committee shall notify in writing each Participant of his
designation to participate in the Plan.
Section 2.03 Date of Entry . A person eligible
to participate in the Prior Plan as of August 31, 2003 shall
become a Participant on the Effective Date of this Plan. Those
persons who are designated to participate in the Plan on or after
the Effective Date shall become a Participant thirty (30) days
after they are notified in writing of their designation to
participate in the Plan.
Section 2.04 Application for Participation . A
person who is eligible to participate in this Plan must initially
complete a Deferral Election Form. If, with respect to any Plan
Year, a Participant fails to submit the form in a timely manner, he
will be ineligible to make Deferrals in that Plan Year.
Section 2.05 Limitation on Participants . The
Committee, in its sole discretion, may determine who qualifies as a
Participant and may change the criteria (including salary
requirements) at any time. The effective date of such change shall
be determined by the
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Committee.
Section 2.06 Removal from Participation . The
Committee may terminate a Participant’s participation for any
reason. A Participant who is prospectively terminated from
participating in this Plan is ineligible to make Deferrals or
receive an allocation of Company Discretionary Contributions
effective as of the date of termination in the Plan as determined
by the Committee.
ARTICLE 3 — Participant Deferrals and
Company Contributions
Section 3.01 Participant Deferrals . As set
forth more fully below, a Participant may defer a portion of his
Base Salary, which would otherwise be earned and payable during the
First Plan Year and any subsequent Plan Year, by executing a
Deferral Election Form pursuant to subsection (a) of this
Section. A Participant may defer a portion of his Bonus, which
would otherwise be earned and payable during any Plan Year, by
executing a Deferral Election Form pursuant to subsection
(b) of this Section. Subject to the rules set forth by the
Committee and the limitations set forth below, the maximum Deferral
is one hundred percent (100%) of the Participant’s Base
Salary and Bonus. No deferral election shall reduce a
Participant’s compensation below the amount necessary to
satisfy the following obligations: applicable employment taxes
(e.g., FICA/Medicare) on amounts paid or deferred; withholding
requirements of a Company-sponsored benefit plan; or income tax
withholding for compensation that is not deferred.
(a) Salary Deferral Contribution .
(i) Submission of Deferral Election Form
.
(A) First Plan Year . Each Participant who
wishes to participate in the Plan and defer a portion of his Base
Salary must submit a Deferral Election Form to the Committee no
later than August 15, 2003 or as otherwise determined by the
Committee. The Deferral Election Form, once properly completed and
submitted to the Committee, shall be effective as of the first pay
period for that portion of a Participant’s Base Salary earned
between September 1, 2003 and December 31, 2003. In the
case of a person who becomes a Participant after the Effective
Date, but within the First Plan Year, the Deferral Election Form
must be filed with the Committee no later than thirty
(30) days after he becomes eligible to participate in the Plan
or as otherwise determined by the Committee. However, such election
shall be prospective and shall apply only to Base Salary earned
after the election is made. If, with respect to the First Plan
Year, a Participant fails to submit the form in a timely manner, he
will be ineligible to make Deferrals in the First Plan Year. Unless
a Participant files a new Deferral Election Form by
December 15, 2003, the existing Deferral Election Form shall
only remain effective until December 31, 2003 and shall not be
effective for subsequent Plan Years.
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(B) Plan Years On and After January 1,
2004 . Each Participant who wishes to participate in the
Plan and defer a portion of his Base Salary must submit a Deferral
Election Form to the Committee no later than December 15 of
the year immediately prior to the Plan Year with respect to which
the election is to be effective or as otherwise determined by the
Committee. The Deferral Election Form, once properly completed and
submitted to the Committee, shall be effective as of the first pay
period of the following Plan Year. In the case of a person who
becomes a Participant after the first day of a Plan Year, the
Deferral Election Form must be filed with the Committee no later
than thirty (30) days after he becomes eligible to participate
in the Plan or as otherwise determined by the Committee. However,
such election shall be prospective and shall apply only to Base
Salary earned after the election is made. If, with respect to any
Plan Year, a Participant fails to submit the form in a timely
manner, he will be ineligible to make Deferrals in that Plan Year.
The Deferral Election Form is effective for one 12-month period
only. A Participant must file a new Deferral Election Form each
year as determined by the Committee.
(ii) Modification of Salary Deferral
Contribution . An election under Section 3.01(a) may
only be modified or continued by filing a new Deferral Election
Form by December 15th of the Plan Year (or First Plan Year, if
applicable) prior to the effective date of the change. Any such
modification or continuation will become effective as of the first
pay period of the following Plan Year. Notwithstanding the
forgoing, once during a Plan Year (or First Plan Year, if
applicable), an election under Section 3.01(a) may be
decreased by filing a new Deferral Election Form. Any such decrease
will be effective as of the first pay period beginning after the
date the election form is received by the Committee and shall
remain in effect until the end of the Plan Year (or First Plan
Year, if applicable).
(iii) Deferral Period . The Deferral Election
Form will establish the deferral period for the Base Salary. The
deferral period shall begin on the first day of the Plan Year (or
First Plan Year, if applicable) with respect to which the Deferral
Election Form is filed (or, in the case of Participants becoming
eligible after the Effective Date, on the first day of a pay period
following the filing of a Deferral Election Form). The deferral
period shall end on the earlier of: (A) a Participant’s
termination of employment; or (B) the scheduled in-service
withdrawal date specified on the Deferral Election Form (such
scheduled in-service withdrawal dates shall be a minimum of two
years from the date the deferral period commenced). The Participant
may designate different deferral periods for the Base Salary
contributed in the First Plan Year and each subsequent Plan Year by
filing a separate Deferral Election Form in accordance with
Section 3.01(a)(i).
(b) Bonus Deferral Contribution .
(i) Submission of Deferral Election Form . Each
Participant who wishes to defer a portion of his Bonus must submit
a Deferral Election Form to the Committee in accordance with
procedures determined by the Committee in its sole discretion. The
Deferral Election Form with respect to Bonuses is effective for one
12-month period only. A Participant
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must file a new Deferral Election
Form in order to defer the Bonus that is earned during the
subsequent 12-month period commencing each January 1.
(ii) Deferral Period . If a Participant has
elected to defer his Base Salary, the deferral period corresponding
to the Base Salary deferred in a Plan Year (or for the First Plan
Year, if applicable) will govern the deferral period for the Bonus
earned with respect to that Plan Year. If a Participant has not
elected to defer his Base Salary, the Deferral Election Form with
respect to the Bonus will establish the deferral period for the
Bonus. Such deferral period shall begin on the January 1 following
the Plan Year with respect to which the Bonus was earned and shall
end on the earlier of: (A) a Participant’s termination
of employment; or (B) the scheduled in-service withdrawal date
specified on the Deferral Election Form (such scheduled in-service
withdrawal dates shall be a minimum of two years from the date the
deferral period commenced). If a Participant has not elected to
defer his Base Salary, the Participant may designate different
deferral periods by filing a separate Deferral Election Form for
each Bonus.
Section 3.02 Company Discretionary Contributions
. The Company, in its sole and absolute discretion, may at any time
commencing with and including the First Plan Year credit a Company
Discretionary Contribution to a Participant’s Deferral
Account. The Company shall determine the amount of the Company
Discretionary Contribution, which Participants are eligible to
share in the allocation of the Company Discretionary Contribution,
and the vesting of the Company Discretionary Contribution.
Participants who, with respect to any Plan Year, are not making
Deferrals may, in the sole discretion of the Committee, be eligible
for the allocation of a Company Discretionary Contribution for such
Plan Year. In the event a Participant has not established a
Deferral Account, the Company shall determine how the Company
Discretionary Contribution will be deemed invested until such time
as the Participant directs otherwise.
Section 3.03 Amounts Transferred from Prior Plan
. Ef
