Exhibit 10.11
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA
DEFERRED COMPENSATION
PLAN
(UNLESS OTHERWISE NOTED,
AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY
1, 2009)
This document constitutes part of a
prospectus covering securities that have been registered
under the Securities Act of 1933.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
DEFERRED COMPENSATION
PLAN
ARTICLE I—PURPOSE,
EFFECTIVE DATE
The purpose of The Prudential
Insurance Company of America Deferred Compensation Plan (the
“Plan”) is to provide the opportunity for selected
employees to defer, subject to the Plan’s terms, a portion of
their incentive compensation and have it accumulate on a
tax-deferred basis. The Plan is intended to be, and shall be
administered as, an unfunded plan maintained for the purpose of
providing deferred compensation for a select group of management or
highly compensated employees within the meaning of Title I of ERISA
(as defined below).
The Plan, as hereby amended and
restated, is generally effective as of January 1, 2009, unless
specifically noted otherwise.
ARTICLE
II—DEFINITIONS
For the purposes of this Plan, the
following terms shall have the meanings indicated, unless the
context clearly indicates otherwise:
“Account” means the
bookkeeping convention device used by the Employer to measure and
determine the amount to be paid to a Participant under the Plan,
which shall be bifurcated into a Pre-2005 Account and a Post-2004
Account, to the extent provided in Section 6.1
hereof.
“Annual Compensation”
means, for purposes of determining general eligibility to
participate in the Plan under Section 3.1(a)(iii) and for
purposes of determining “Eligible Compensation” for
Insurance Sales Professionals referenced at
Section 3.2(a)(iv), (a) for such Insurance Sales
Professionals, the total compensation received by such employee
that is reportable on Form W-2 as gross income for any Plan Year;
and (b) for all other Employees, such Employee’s gross
salary and incentive bonus (including any sales bonus) payable in
any Plan Year.
“Beneficiary” or
“Beneficiaries” means the person, persons or entity
entitled under Article V to receive any Plan benefits payable after
a Participant’s death.
“Board” means the Board
of Directors of the Company.
“Code” means the
Internal Revenue Code of 1986, as amended from time to time
(including, but not limited to, any regulations or other
interpretative guidance promulgated under the Code by the U.S.
Department of the Treasury or the Internal Revenue Service, as
applicable, which also may be cited separately as “Treasury
Regulations” for purposes of this Plan).
“Committee” shall have
the meaning set forth in Section 7.1.
“Company” means The
Prudential Insurance Company of America.
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PLAN
“Company Retirement
Plan” means either (a) The Prudential Traditional
Retirement Plan Document, or (b) the Prudential Cash Balance
Pension Plan Document, both components of The Prudential Merged
Retirement Plan.
“Continuing Service
Participant” means a Participant who ceases to be an employee
of, but continues to provide services to, any of the 409A Service
Recipients following his Retirement or Termination of Employment,
or is reasonably expected (at the time of such Retirement or
Termination of Employment) to provide services to any of the 409A
Service Recipients within 12 months of such termination of
employment.
“Corporate Compensation”
has the meaning set forth in Section 7.1.
“Deferral Commitments”
has the meaning set forth in Section 3.2(b).
“Deferral Period” means,
for each Participant, the period of time commencing on the first
day of the Plan Year in which Eligible Compensation would otherwise
be payable unless deferred pursuant to the terms of the Plan, and
ending on the date elected by the Participant (or otherwise
determined under the Plan) as provided for in Article III and
Article IV.
“Disability” means the
first date on or prior to the Participant’s Termination of
Employment as of which such Participant qualifies for long-term
disability benefits under the Company’s Welfare Benefits
Plan, or comparable long-term disability benefits plan or program
sponsored by the Employer or Participating Subsidiary, if
applicable.
“Eligible Compensation”
shall have the meaning set forth in Section 3.2(a).
“Eligible Employee”
shall have the meaning set forth in Section 3.1(a).
“Employer” means the
Company and any successor of the Company as designated by the
Board.
“Employee” generally
means, as of any relevant date, any individual who is compensated
by the Employer or any Participating Subsidiary for services
actually rendered as either a common law employee or as a statutory
employee under Code Section 3121(d)(3) (relating to full time
life insurance salesman) including, for these purposes and to the
degree not specifically described above, agents and other insurance
sales professionals of the Employer and any Participating
Subsidiary. The term “Employee,” however, for purposes
of Section 3.1 of this Plan, does not include: (a) any
individual who is on a paid or unpaid leave of absence from the
Company or any Participating Subsidiary; (b) any individual
who is on Disability; (c) any individual who is receiving
severance or similar benefits related to a Termination of
Employment from a severance plan or program sponsored or maintained
by the Company, any Participating Subsidiary, or any other
affiliate of the Company; or (d) any employee or agent of a
subsidiary or an affiliate of the Company that is not a
Participating Subsidiary at such time as the Deferral Commitment
for a particular Plan Year must be made, unless otherwise provided
for in Exhibit A.
“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from
time to time (including, but not limited to, any regulations or
other interpretative guidance promulgated under ERISA by either the
U.S. Department of Labor, the Internal Revenue Service (with
respect to Title II of ERISA), or the Pension Benefit Guaranty
Corporation (with respect to Title IV of ERISA), as
applicable).
“409A Service
Recipients” means the Company and each other entity which is
in the same controlled group of affiliated employers as the
Company, as determined in accordance with the rules under
Section 414(b) and (c) of the Code.
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PLAN
“Financial Hardship”
means severe financial hardship to the Participant resulting from a
sudden and unexpected illness or accident of the Participant or of
a dependent (as defined in Section 152(a) of the Code) of the
Participant, 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. The circumstances that will constitute a Financial
Hardship will depend upon the facts of each case, but in any case,
payment may not be made to the extent that such hardship is or may
be relieved:
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(a)
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Through
reimbursement or compensation by insurance or otherwise;
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(b)
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By liquidation
of the Participant’s or Participant spouse’s assets, to
the extent the liquidation of such assets would not itself cause
severe financial hardship; or
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(c)
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By cessation of
deferrals under the Plan.
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For purposes of the definition of
the term “Financial Hardship,” the term
“unforeseeable emergencies” does not encompass sending
a Participant’s dependent to college or the desire to
purchase a home, and is intended to be interpreted consistent with
the definition of the term under Treasury Regulations
Section 1.457-2(h)(4).
“Hardship Withdrawal”
has the meaning set forth in Section 4.3.
“Institutional and Retirement
Sales Professionals,” “Institutional Sales
Professionals,” “Insurance Sales Professionals,”
“Investment Professionals,” and “Investment Sales
Professionals,” as used in Article III, refer to Employees of
the Employer or any Participating Subsidiary performing such
functions as such terms are generally understood within the
Employer or such Participating Subsidiary.
“Insurance Sales Matching
Contributions” has the meaning set forth in
Section 3.2(c).
“Participant” means
(a) an Employee who has satisfied the eligibility requirements
of Article III for any Plan Year and (b) has amounts credited
to his or her Account under the terms of Article VI.
“Participating
Subsidiary” means the following affiliates of the Employer as
of the Plan’s Effective Date: PruLease, PAMCO, Prudential
Investment Corporation, Prudential Bank & Trust, INTECH,
Prudential Mutual Funds LLC, Prudential Real Estate Affiliates, PTC
Services, Inc., Prudential HR Management Company, Prudential
Mortgage Capital Company LLC, and Prudential Financial, Inc.
(effective as of January 1, 2002). In addition to these
entities, the term “Participating Subsidiary”
means
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(a)
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any affiliate
of the Employer, including, but not limited to
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(i)
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any member of a
“controlled group of corporations” (as such term is
defined in Code Section 1563(a), without regard to the
limitations of Code Sections 1563(a)(4) and 1563(e)(3)(C)) of which
the Employer is a member,
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(ii)
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any trade or
business, whether incorporated or not, which for any part of a Plan
Year is considered to be under common control with the Employer
under Code Section 414(c),
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(iii)
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any member of
an affiliated service group (as such term is defined under Code
Section 414(m)) of which the Employer is a member;
and
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(b)
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that the
Compensation Committee of the Board as of the Effective Date or
hereafter has designated as an entity whose employees may be
eligible to participate under the applicable terms of the
Plan.
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PAGE 4 - DEFERRED COMPENSATION
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“Participation
Agreement” means the agreement submitted by a Participant to
the Committee (or its representative, Corporate Compensation
(including any Plan Administrator designated by Corporate
Compensation)) prior to the beginning of the Deferral Period, with
respect to a Deferral Commitment made for such Deferral
Period.
“Plan” means this
Deferred Compensation Plan as amended from time to time.
“Plan Year” means the
calendar year.
“Post-2004 Account”
means a sub-account established within a Participant’s
Account pursuant to Section 6.1 to separately record the
portion, if any, of a Participant’s Account which is
attributable to Eligible Compensation that had been credited to
such Account and which was earned or vested after December 31,
2004, and earnings thereon.
“Pre-2005 Deferred
Compensation Account” means a sub-account established within
a Participant’s Account pursuant to Section 6.1 to
separately record the portion, if any, of a Participant’s
Account which is attributable to Eligible Compensation that had
been credited to such Account and which was earned and vested as of
December 31, 2004, and earnings thereon.
“Prudential Cash Balance
Pension Plan” means the Prudential Cash Balance Pension Plan
Document, a component of the Company Retirement Plan.
“Prudential Traditional
Retirement Plan” means The Prudential Traditional Retirement
Plan Document, a component of the Company Retirement
Plan.
“Retires” or
“Retirement” means a Participant’s Termination of
Employment (as defined below, including the special provisions
applicable to a Continuing Service Participant) on or after the
earliest date on which he or she satisfies any of the following
conditions: ( i ) has attained age 50 and has completed
20 years of service; ( ii ) has attained age 55 and has
completed 10 years of service or ( iii ) has attained
age 65. Whether a Participant Retires or has reached Retirement
shall be determined regardless of whether, as of the date of his or
her Termination of Employment, the Participant has commenced
receipt of his or her Pension from the Prudential Traditional
Retirement Plan or any comparable retirement plan sponsored by the
Employer or Participating Subsidiary.
“Termination of
Employment” means a Participant’s separation from
service from the 409 Service Recipients for any reason other than
death; provided however , that, in the case of any
Continuing Service Participant, the term Termination of Employment
or Retirement (and any similar terms used in this Plan) shall be
deemed to refer to the date at which such Participant incurs a
“separation from service,” within the meaning of
Section 409A of the Code and the regulations promulgated
thereunder, from the 409A Service Recipients. This means that
rather than being entitled to receive a distribution hereunder
upon, or at a specified time following, a termination of
employment, a Continuing Service Participant shall only be entitled
to receive such distribution upon, or at a specified time
following, such a separation from service.
“Unforseeable Emergency”
means is a severe financial hardship to the Participant resulting
from an illness or accident of the Participant or the
Participant’s spouse or dependents; 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. Whether a
Participant has an Unforseeable Emergency shall be determined on
the particular facts and circumstances pertaining to such
Participant, in accordance with the provisions of Section 409A
of the Code and the regulations promulgated thereunder.
PAGE 5 - DEFERRED COMPENSATION
PLAN
ARTICLE III—
ELIGIBILITY, PARTICIPATION AND
DEFERRAL COMMITMENTS
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3.1
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Eligibility
and Participation
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(a)
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Eligibility. Eligibility to participate in the Plan shall be
limited to any one of the following Employees (each, an
“Eligible Employee”) who is:
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(i)
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at Vice
President rank (Grade 06P) and above;
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(ii)
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at Managing
Director rank and above; and/or
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(iii)
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the following
select group of management and highly compensated Employees who
satisfy the Annual Compensation thresholds set forth below as of
the particular Plan Year (if noted):
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(A)
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For Plan Year
2000 Deferral Commitments only:
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(I)
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An Investment
Professional at Senior Vice President and Vice President rank whose
Annual Compensation exceeds (or is anticipated to exceed) $200,000
in any Plan Year; and
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(II)
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An
Institutional and Retirement Sales Professional at Vice President
rank whose Annual Compensation exceeds (or is anticipated to
exceed) $250,000 in any Plan Year;
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(B)
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For Plan Year
2001 Deferral Commitments and beyond:
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(I)
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An Investment
Professional at Senior Vice President and Vice President rank whose
Annual Compensation exceeds (or is anticipated to exceed) $200,000
in any Plan Year;
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(II)
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An Investment
Sales Professional at Regional Manager rank and above whose Annual
Compensation exceeds (or is anticipated to exceed) $200,000 in any
Plan Year; and
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(III)
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An
Institutional Sales Professional at Sales Manager rank and above
whose Annual Compensation exceeds (or is anticipated to exceed)
$200,000 in any Plan Year; and/or
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(C)
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An Insurance
Sales Professional whose Annual Compensation exceeds (or is
anticipated to exceed) $100,000 for such Plan Year.
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(b)
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Participation.
An Eligible
Employee may elect to participate in the Plan with respect to the
Deferral Period by submitting a Participation Agreement by the
31 st day of December, or such other
date specified in the enrollment materials, which must be in the
year preceding the Plan Year in which the services in respect of
which the Eligible Compensation is payable commence to be performed
by the Participant.
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PAGE 6 - DEFERRED COMPENSATION
PLAN
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3.2
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Deferral
Commitments and Insurance Sales Professionals Matching
Contributions
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(a)
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Eligible
Compensation. The
following compensation is eligible for deferral, in whole or in
part, under the Plan by an Eligible Employee (“Eligible
Compensation”):
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(i)
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Grants under
the Employer’s or any Participating Subsidiary’s
long-term incentive award plans, the precise amounts of which, as
of the time such Employee may complete a Participation Agreement,
are unknown to such Employee;
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(ii)
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Grants under
the Employer’s or any Participating Subsidiary’s sales
bonus award plans, the precise amounts of which, as of the time
such Employee may complete a Participation Agreement, are unknown
to such Employee;
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(iii)
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Grants under
the Employer’s or any Participating Subsidiary’s annual
incentive award plans, the precise amounts of which, as of the time
such Employee may complete a Participation Agreement, are unknown
to such Employee; and
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(iv)
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For Insurance
Sales Professionals described in Section 3.1(a)(iii)(c) above,
all amounts in excess of $100,000 of Annual Compensation earned
during the Plan Year subsequent to the year in which such Employee
executes a Participation Agreement in accordance with the terms of
Section 3.4.
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For purposes of this
Section 3.2(a), the term “Eligible Compensation”
does not include any (a) salary payments made to Eligible
Employees (except as may be included under the terms of
Section 3.2(a)(iv) above), (b) any supplemental bonuses
paid to an Eligible Employee that are not part of a compensation
plan sponsored by the Employer or any Participating Subsidiary,
(c) any severance payments paid to an Eligible Employee, or
(d) any amounts under any such long-term incentive award,
sales bonus award or annual incentive award plans or other programs
or arrangements that are “guaranteed” by the Employer
or any Participating Subsidiary to an Eligible Employee, whether or
not as part of an employment or severance agreement with such
Eligible Employee, or are otherwise known or determinable by such
Employee as of the time of such Eligible Employee’s
enrollment in the Plan pursuant to a Participation Agreement.
Notwithstanding anything else contained herein to the contrary, so
long as an Eligible Employee completes a Participation Agreement in
respect thereof at a time established by Corporate Compensation in
compliance with the requirements of Section 409A of the Code,
grants under the Employer’s or any Participating
Subsidiary’s notional carried interest investment plan, as to
which the Eligible Employee had an earned and vested right to
payment as of December 31, 2004 and payment of which is made
after 2007, shall be treated as Eligible Compensation.
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(b)
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Form of
Deferral. The amount of
Eligible Compensation that Eligible Employees may defer under the
Plan with respect to services to be performed in any subsequent
Plan Year or Years (the “Deferral Commitment”) shall be
indicated on any Participation Agreement as a percentage (in five
percent (5%) increments up to eighty percent (80%)) for
Participants that are Insurance Sales Professionals; and for all
other Participants, a percentage (in five percent
(5%) increments up to eighty-five percent (85%)), of such
participant’s annual incentive award or long-term incentive
award.
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PAGE 7 - DEFERRED COMPENSATION
PLAN
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(c)
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Insurance
Sales Professional Matching Contribution. For any Eligible Employee who is an Insurance
Sales Professional and who makes a Deferral Commitment under the
Plan in respect of any Plan Year, an Insurance Sales Professional
Matching Contribution shall be made on such Participant’s
behalf with respect to the Deferral Commitment in an amount equal
to three percent (3%) of such Deferral Commitment.
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(a)
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General
Rule. Once the Eligible
Employee has completed a Participation Agreement with respect to an
amount of Eligible Compensation, a new Deferral Period begins on
the first day of the Plan Year in which the Participant commences
the services in respect of which the Eligible Compensation would
otherwise be earned unless deferred pursuant to the terms of the
Plan. Except as otherwise expressly provided herein (including, but
not limited to, Section 4.1), such new Deferral Period will
extend, at the Participant’s election, as set forth in the
Participation Agreement, to any of the following:
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1)
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A specified
date in a year subsequent to the year in which the Eligible
Compensation deferred under the terms of this Plan would otherwise
have been payable to such Participant;
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2)
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The
Participant’s Retirement;
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3)
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January of the
year following the Participant’s Retirement; or
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4)
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The
Participant’s death, Disability or Termination of
Employment;
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provided, however
, effective for Plan Years beginning
after Plan Year 2007, (i) to the degree that a Participant has
elected a fixed payment date pursuant to clause (1) above that
has not occurred at the date of the Participant’s Retirement,
payments from the Participant’s Account will commence,
regardless of such fixed date election, on the first anniversary of
the Participant’s Retirement, and (ii) in all events,
irrespective of the Participant’s election of a specified
date, Retirement, January of the year following Retirement or
Disability or Termination of Employment under this
Section 3.3, payments shall commence under the Plan no later
than the last day of the Plan Year in which any such Participant
has attained age 70 1/2, as determined under the books and records
of the Company.
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(b)
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Special
Transition Rule Elections. Notwithstanding the provisions of
Section 3.3(a), the Committee may permit any or all
Participants, or any class of Participants, to change either or
both the Deferral Period and the distribution elections applicable
to all or any specified portion of the Participant’s
Post-2004 Account in accordance with, and not later than the latest
date specified under, the special transition relief applicable
under the guidance promulgated under Section 409A of the
Code.
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(a)
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General Rule
. In order for an Eligible Employee
to become a Participant under the Plan, the Eligible Employee must
complete a Participation Agreement and submit it to the Committee
(or its representative, Corporate Compensation) in the time frame
specified in Section 3.1(b). If a Participation Agreement is
not received by such date, the Eligible Employee is deemed to have
elected not to defer any Eligible Compensation under the Plan for
such subsequent Plan Year. Except as otherwise
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PAGE 8 - DEFERRED COMPENSATION
PLAN
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expressly provided in
Section 3.3(b), once received by the Committee (or its
representative, Corporate Compensation (including any Plan
Administrator designated by Corporate Compensation)), such election
to defer Eligible Compensation is irrevocable by the Eligible
Employee.
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(b)
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Effect of
Enrollment in the Event of a Termination of Employment.
Effective in respect of
compensation payable for services to be commenced in Plan Years
beginning on or after January 1, 2008, if an otherwise
Eligible Employee incurs a Termination of Employment after
completing a Participation Agreement in respect of services to be
performed commencing in such Plan Year, but prior to the
commencement of such Plan Year, such election for that Plan Year
will be deemed null and void and no amounts will be credited to the
Participant’s Account under the Plan. In the event that an
Eligible Employee completed a Participation Agreement and commenced
the services to which such Eligible Compensation relates, such
Participation Agreement will continue in full force and effect (to
the extent the Participant is otherwise entitled to receive any
compensation under the terms of the plan(s) or agreement(s)
governing the payment of such Eligible Compensation). Any amount
credited to the Participant’s account following Termination
of Employment shall be paid in accordance with the provisions of
Article IV applicable with respect to such Deferral
Commitment.
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Participants will, at all times, be
fully vested in the notional value of their Account balances under
the Plan (which, due to notional gains, losses and interest, may be
greater or lesser than the amount of Eligible Compensation actually
deferred under the Plan).
ARTICLE
IV—DISTRIBUTIONS
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4.1
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Distribution
Election Requirements
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Except as otherwise expressly
provided herein, a Participant may elect to commence to receive a
distribution of amounts deferred with respect to a Deferral Period
( i ) at a fixed date or ( ii ) at or
within a specified period of time following Retirement; provided,
however, that ( A ) if a Participant has a Termination
of Employment prior to qualifying for Retirement or prior to the
occurrence of a specified date on which payments are to commence in
respect of a Deferral Period, any distributions to be made under
the Plan (ot
