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Exhibit 10.1
NAB GROUP - USA
DEFERRED COMPENSATION PLAN
(EFFECTIVE FEBRUARY 10, 1998)
(AMENDED NOVEMBER 14, 2000 -- FIRST AMENDMENT)
(AMENDED MARCH 20, 2001 -- SECOND AMENDMENT)
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TABLE OF CONTENTS
ARTICLE I ESTABLISHMENT AND PURPOSE 5
1.1 Establishment and Purpose 5
ARTICLE II DEFINITIONS 5
2.1 Account Balance 5
2.2 Allocation Election Form 5
2.3 Beneficiary 6
2.4 Change in Control 6
2.5 Chief Executive Officer 8
2.6 Code 8
2.7 Compensation 8
2.8 Compensation Agreements 8
2.9 Compensation Dispersal Agreement 8
2.10 Compensation Reduction Agreement 8
2.11 Company 8
2.12 Cause 8
2.13 Deferred Compensation Committee 9
2.14 Disability 9
2.15 Early Withdrawal 9
2.16 Employee 9
2.17 Employer 9
2.18 ERISA 9
2.19 Fiscal Year 9
2.20 Interim Distribution 9
2.21 Interim Distribution Balance 9
2.22 Interim Distribution Date 10
2.23 Interim Distribution Dispersal Agreement 10
2.24 Involuntary Termination of Employment 10
2.25 Participant 10
2.26 Participating Employer 10
2.27 Plan 11
2.28 Plan Year 11
2.29 Spouse 11
2.30 Termination Benefit 11
2.31 Termination Benefit Dispersal Agreement 11
2.32 Termination of Employment 11
2.33 Voluntary Deferrals 11
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ARTICLE III ELIGIBILITY AND PARTICIPATION 11
3.1 Eligibility and Participation 11
3.2 Duration 11
3.3 Revocation of Future Participation 11
3.4 Notification 12
ARTICLE IV COMPENSATION REDUCTION AGREEMENTS AND ACCOUNT BALANCES 12
4.1 Compensation Reduction Agreements 12
4.2 Termination Benefit Election 12
4.3 Interim Distribution Election 13
4.4 Prohibition Against Compensation Reduction Agreement Modifications 13
4.5 Adjustments to Account Balances 13
ARTICLE V BENEFIT PAYMENTS AND CERTAIN WITHDRAWALS 15
5.1 Termination Benefit 15
5.2 Form of Payment for Termination Benefit 15
5.3 Disability Benefit 16
5.4 Death Benefit 16
5.5 Change in Control 16
5.6 Interim Distribution 16
5.7 Early Withdrawal 17
5.8 Hardship Withdrawal 17
ARTICLE VI ADMINISTRATION 17
6.1 Plan Administration 17
6.2 Withholding 17
6.3 Indemnification 18
6.4 Expenses 18
6.5 Delegation of Authority 18
6.6 Binding Decisions or Actions 18
ARTICLE VII AMENDMENT AND TERMINATION 18
7.1 Amendment and Termination 18
7.2 Constructive Receipt Termination 18
ARTICLE VIII FUNDING 19
8.1 General Assets 19
8.2 Rabbi Trust 19
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ARTICLE IX GENERAL CONDITIONS 19
9.1 Anti-assignment Rule 19
9.2 No Legal or Equitable Rights or Interest 19
9.3 No Employment Contract 19
9.4 Headings 20
9.5 Invalid or Unenforceable Provisions 20
9.6 Governing Law 20
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NAB GROUP - USA
DEFERRED COMPENSATION PLAN
(EFFECTIVE FEBRUARY 10, 1998)
(FIRST AMENDMENT NOVEMBER 14, 2000)
(SECOND AMENDMENT MARCH 20, 2001)
ARTICLE I ESTABLISHMENT AND PURPOSE
1.1 Establishment and Purpose. Each Participating Employer hereby adopts
the NAB Group - USA Deferred Compensation Plan (the "Plan"), effective
as of February 10, 1998 (the "Effective Date"). The purpose of the Plan
is to provide each Participant in the Plan with an opportunity to defer
receipt of salary, bonus, and other specified cash compensation. The
Plan is intended to benefit a "select group of management or highly
compensated employees" within the meaning of Sections 201, 301 and 401
of ERISA, and to be therefore exempt from the requirements of Parts 2,
3 and 4 of Title I of ERISA.
ARTICLE II DEFINITIONS
2.1 Account Balance. Account Balance means the value of each Participant's
deferred compensation account balance under the Plan. The Account
Balance shall be composed of the following bookkeeping accounts: the
Interim Distribution Balance (which may be divided into sub-accounts if
the Participant elects more than one Interim Distribution Date); and
the Termination Benefit Balance. Any hypothetical investment gains or
losses shall be attributed to the respective balance. A Participant's
Account Balance shall be maintained in accordance with Section 4.5. The
Account Balance shall not constitute or be treated as an escrow, trust
fund, or any other type of funded account for Code or ERISA purposes
and, moreover, contingent amounts credited thereto shall not be
considered "plan assets" for ERISA purposes. The Account Balance merely
provides a record of the bookkeeping entries relating to the contingent
benefits that the respective Participating Employer intends to provide
Participant and shall thus reflect a mere unsecured promise to pay such
amount in the future.
2.2 Allocation Election Form. Allocation Election Form means the form
approved by the Deferred Compensation Committee on which the
Participant designates his or her choice of hypothetical investments,
and the allocation among them, for purposes of determining earnings
which are attributed to the Voluntary Deferrals in Participant's
Account Balance. It also means the form approved by the Deferred
Compensation Committee on which a Participant reallocates any Account
Balance among hypothetical investments previously selected, selects new
hypothetical investments, and/or transfers portions of Account Balances
from one hypothetical investment to another. The elected allocation
shall remain in effect from Plan Year to Plan Year unless a new
Allocation Election Form
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is filed by the Participant. The effective date of any requested change
in an elected allocation shall be the first business day of the next
calendar quarter (unless a different effective date is established by
the Deferred Compensation Committee), provided the Allocation Election
Form is filed prior to the cut-off date established by the Deferred
Compensation Committee.
2.3 Beneficiary. Beneficiary means a natural person, estate, or trust
designated by a Participant in accordance with Section 4.1 to receive
benefits under and in accordance with provisions of the Plan. The
Participant's estate shall be the Beneficiary if:
(a) the Participant has not designated a natural person or trust
as Beneficiary, or
(b) the designated Beneficiary has predeceased the Participant.
2.4 Change in Control. Change in Control means the occurrence of any of the
following:
(a) individuals who, on the Effective Date, constitute the Board of
Directors of the Company (the "Incumbent Directors") cease for any
reason to constitute at least a majority of the Board of Directors of
the Company (the "Board"), provided that any person becoming a director
subsequent to the Effective Date, whose election or nomination for
election was approved by a vote of at least two-thirds of the Incumbent
Directors then on the Board shall be an Incumbent Director; provided,
however, that no individual initially elected or nominated as a
director of the Company as a result of an actual or threatened election
contest with respect to directors or as a result of any other actual or
threatened solicitation of proxies or consents by or on behalf of any
person other than the Board shall be deemed to an Incumbent Director;
(b) any person (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the "Exchange Act") and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 25%
or more of the combined voting power of the Company's then outstanding
securities eligible to vote for the election of the Board (the "Company
Voting Securities"); provided, however, that the event described in
this paragraph (b) shall not be deemed to be a Change in Control by
virtue of any of the following acquisitions: (A) by the Company or any
subsidiary, (B) by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any subsidiary, (C) by any
underwriter temporarily holding securities pursuant to an offering of
such securities, (D) pursuant to a Non-Qualifying Transaction (as
defined in paragraph (iii)), or (E) a transaction (other than one
described in (c) below) in which Company Voting Securities are acquired
from the Company, if a majority of the Incumbent Directors approve a
resolution providing expressly that the acquisition pursuant to this
clause (E) does not constitute a Change in Control under this paragraph
(b);
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(c) the consummation of a merger, consolidation, statutory share
exchange or similar form of corporate transaction involving the Company
or any of its subsidiaries that requires the approval of the Company's
stockholders, whether for such transaction or the issuance of
securities in the transaction (a "Business Combination"), unless
immediately following such Business Combination: (A) more than 50% of
the total voting power of (x) the corporation resulting from such
Business Combination (the "Surviving Corporation"), or (y) if
applicable, the ultimate parent corporation that directly or indirectly
has beneficial ownership of 100% of the voting securities eligible to
elect directors of the Surviving Corporation (the "Parent
Corporation"), is represented by Company Voting Securities that were
outstanding immediately prior to such Business Combination (or, if
applicable, is represented by shares into which such Company Voting
Securities were converted pursuant to such Business Combination), and
such voting power among the holders thereof is in substantially the
same proportion as the voting power of such Company Voting Securities
among the holders thereof immediately prior to the Business
Combination, (B) no person (other than any employee benefit plan (or
related trust) sponsored or maintained by the Surviving Corporation or
the Parent Corporation), is or becomes the beneficial owner, directly
or indirectly, of 25% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) and (C) at least a majority of the members of the board of
directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) following the consummation of
the Business Combination were Incumbent Directors at the time of the
Board's approval of the execution of the initial agreement providing
for such Business Combination (any Business Combination which satisfies
all of the criteria specified in (A), (B) and (C) above shall be deemed
to be a "Non-Qualifying Transaction");
(d) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or a sale of all or
substantially all of the Company's assets; or
(e) the consummation of any sale or disposition of the Company's
ownership interest (direct or indirect) in a Participating Employer
that results in the Company no longer maintaining at least a 50%
ownership interest (directly or indirectly) in such Participating
Employer. For the avoidance of doubt, such sale or disposition shall be
considered a Change of Control only for such affected Participating
Employer (and its related Participants) and not for any other
Participating Employer not so affected.
Notwithstanding the foregoing, a Change in Control of the Company shall
not be deemed to occur solely because any person acquires beneficial
ownership of more than 25% of the Company Voting Securities as a result
of the acquisition of Company Voting Securities by the Company which
reduces the number of Company Voting Securities outstanding; provided,
that if after such acquisition by the Company such person becomes the
beneficial owner of additional Company Voting Securities that increases
the percentage
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of outstanding Company Voting Securities beneficially owned by such
person, a Change in Control of the Company shall then occur.
2.5 Chief Executive Officer. Chief Executive Officer means the individual
holding the title of Chief Executive Officer, or if no such individual
holds such title, the individual who performs the functions usually
performed by a Chief Executive Officer of a widely-held publicly-traded
corporation.
2.6 Code. Code means the Internal Revenue Code of 1986, as amended from
time to time.
2.7 Compensation. Compensation means, for purposes of this Plan, base
salary (including any employee contributions under a Code section 401k
or 125 plan of a Participating Employer or approved by the Deferred
Compensation Committee as compensation for purposes of this Plan), cash
bonus (annual, incentive or otherwise), and other cash compensation.
2.8 Compensation Agreements. Compensation Agreements shall mean the
Compensation Reduction Agreement and the Compensation Dispersal
Agreement.
2.9 Compensation Dispersal Agreement. Compensation Dispersal Agreement
shall mean the Interim Distribution Dispersal Agreement and/or the
Termination Benefit Dispersal Agreement, as the context requires.
2.10 Compensation Reduction Agreement. Compensation Reduction Agreement
shall mean, as applicable, the salary deferral election form, the bonus
deferral election form, or such other forms furnished by the Deferred
Compensation Committee, on which a Participant elects the amount of a
Voluntary Deferral.
2.11 Company. Company means National Australia Bank, Ltd., a company
organized under the laws of Australia.
2.12 Cause. Cause shall mean (a) the willful and continued failure (not
resulting from Disability) by Participant to substantially perform
Participant's customary duties with the Employer after demand by the
Employer, which demand identifies the manner in which the Employer
believes that the Participant has not substantially performed
Participant's customary duties, (b) gross negligence or willful
misconduct by the Participant in the execution of his/her professional
duties that is materially injurious to the Employer, (c) conviction of
Participant of, or a plea by Participant of nolo contendere to, a
felony, or (d) willful breach by Participant of a material policy,
program or rule of Employer, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which
is remedied by Participant promptly after receipt of notice thereof is
given by the Employer.
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2.13 Deferred Compensation Committee. Deferred Compensation Committee means
a committee composed of one employee from each Participating Employer,
in each case who shall be appointed by the Chief Executive Officer of
each Participating Employer, and who shall serve until the earlier of
termination of employment or appointment of a replacement by the then
Chief Executive Officer of such Participating Employer; provided
further, in the event there is only one Participating Employer, then
the committee shall be composed of two employees from such
Participating Employer.
2.14 Disability. Disability means that a Participant has been determined to
have incurred total and permanent disability, as defined by the
long-term disability ("LTD") group plan in which the Participant
participates as of the date of total and permanent disability.
2.15 Early Withdrawal. Early Withdrawal means a voluntary distribution by a
Participant from a Participant's Account Balance, which Account Balance
shall be subject to a 10% forfeiture and such other penalties and
provisions as set forth in Article V of the Plan.
2.16 Employee. Employee means a full-time salaried employee of an Employer.
2.17 Employer. Employer means, with respect to any Employee (or former
Employee), the particular Participating Employer that employs (or
formerly employed) such Employee.
2.18 ERISA. ERISA means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
2.19 Fiscal Year. Fiscal Year means October 1 through September 30.
2.20 Interim Distribution. Interim Distribution means a lump sum payment
within forty-five (45) days following the Interim Distribution Date to
the Participant from the Interim Distribution Balance sub-account
pertaining to that Interim Distribution. A Participant may elect to
have one or more Interim Distributions but no more than three Interim
Distribution Dates may be outstanding at any given time.
2.21 Interim Distribution Balance. Interim Distribution Balance means a
separate bookkeeping account within the Account Balance. The Interim
Distribution Balance is created whenever a Participant elects to
receive an Interim Distribution pursuant to an Interim Distribution
Dispersal Agreement. If the Participant elects multiple Interim
Distributions, a separate bookkeeping sub-account within Distribution
Balance shall be maintained for each Interim Distribution. Any
Voluntary Deferrals in connection with Interim Distributions shall be
deposited into the Interim Distribution Balance. Interim Distributions
shall be reflected in the balance of the respective Interim
Distribution Balance bookkeeping sub-account.
2.22 Interim Distribution Date. Interim Distribution Date shall mean the
first business day of
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any calendar year selected by the Participant, provided that such date
shall not be less than one (1) year from the end of the Plan Year to
which the Compensation relates.
2.23 Interim Distribution Dispersal Agreement. The Interim Distribution
Dispersal Agreement means the form on which the Participant elects the
Interim Distribution Date in connection with a Voluntary Deferral.
2.24 Involuntary Termination of Employment. Involuntary Termination of
Employment means termination by Participant of employment with his/her
Employer that is based on any of the following: (a) the Employer's
assignment to Participant of duties that are substantially
non-executive or non-managerial in nature; (b) a material adverse
change in Participant's position as an executive of the Employer,
including, without limitation, a change that results in a significant
diminution in the Participant's duties and responsibilities; (c) a
reduction in salary or bonus opportunity for the Participant, or
material reduction of his/her benefits and perquisites; or (d) the
Employer's requirement that the Participant move his/her principal
office beyond a radius of fifty (50) miles from Participant's principal
office; provided, however, such termination shall not be deemed
Involuntary Termination of Employment unless the Participant gives the
Employer written notice of such situation and the Employer fails to
correct such situation within thirty (30) days thereafter. Involuntary
Termination of Employment shall also include termination stemming from
the Disability of the Participant as well as termination based on a
reduction in force or layoff. Notwithstanding the above, Involuntary
Termination shall not include termination of Participant's employment
based on Cause.
2.25 Participant. Participant means (i) an Employee who is a member of a
select group of management or highly compensated employees, who is
selected to participate in this Plan in accordance with Section 3.1,
and who timely elects to participate in this Plan in accordance with
Article IV, and (ii) any person that becomes a Participant pursuant to
Section 3.5. A Participant's continued participation in the Plan shall
be governed by Article III, including Section 3.2.
2.26 Participating Employer. Participating Employer means any entity with
operations in the United States that is more than 50% owned (directly
or indirectly) by the Company, and that adopts this Plan with the
approval of the Company. As of the Effective Date, Participating
Employer shall include Michigan National Corporation, HomeSide, Inc.
and National Australia Bank Ltd. (New York Branch) (and any
subsidiaries designated by such entities as a Participating Employer).
In connection with the March 20, 2001 amendment to the Plan ("Second
Amendment"), the following is acknowledged by HomeSide International,
Inc. (f/k/a HomeSide, Inc.) and HomeSide Lending, Inc.: (a) HomeSide
Lending, Inc., is a Participating Employer, having been so designated
by HomeSide, Inc. effective February 10, 1998; (b) pursuant to a first
amendment ("First Amendment") to the Plan adopted November 14, 2000, by
unanimous written consent of the Deferred Compensation Committee as
authorized by Section 6.1 of the Plan, the Plan
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was amended to remove Michigan National Corporation as a Participating
Employer under the Plan; and (c) National Australia Bank Ltd. (New York
Branch), although authorized to adopt the Plan pursuant to Sections 1.1
and 2.16, has never formally adopted the Plan and has furthermore
advised the aforementioned HomeSide companies that it does not intend
to adopt the Plan, and as a result, is not nor never has been a
Participating Employer under the Plan.
2.27 Plan. Plan means the NAB Group - USA Deferred Compensation Plan, as
documented herein and as may be amended thereafter.
2.28 Plan Year. Plan Year means January 1 through December 31.
2.29 Spouse. Spouse means the person married to the Participant at the date
benefits become payable under the Plan.
2.30 Termination Benefit. Termination Benefit shall mean that benefit paid
in accordance with Section 5.1 and Section 5.2 of the Plan.
2.31 Termination Benefit Dispersal Agreement. Termination Benefit Dispersal
Agreement means the form on which the Participant elects the method of
payment for a Termination Benefit in connection with a Voluntary
Deferral.
2.32 Termination of Employment. Termination of Employment shall mean the
termination of a Participant's employment with the Participating
Employer for any reason.
2.33 Voluntary Deferrals. Voluntary Deferrals made by a Participant shall
mean all deferrals of Compensation under the Plan as permitted by the
Deferred Compensation Committee.
ARTICLE III ELIGIBILITY AND PARTICIPATION
3.1 Eligibility and Participation. Each Employee who is a member of a
select group of management or highly compensated employees, determined
in the sole discretion of the Chief Executive Officer of such
Employee's respective Employer, shall be eligible to participate in
this Plan. Selection for participation in the Plan will be made by the
Chief Executive Officer of such Employee's respective Employer.
3.2 Duration. Once an Employee becomes a Participant, such Employee shall
continue to be a Participant so long as he or she is entitled to
receive benefits hereunder, notwithstanding any subsequent termination
of employment.
3.3 Revocation of Future Participation. Notwithstanding the provisions of
Section 3.2, the Chief Executive Officer of a Participant's respective
Employer may revoke such
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Participant's eligibility to make future deferrals under this Plan.
Such revocation will not affect in any manner a Participant's Account
Balance or other terms of this Plan.
3.4 Notification. Each Participant shall be notified by the Deferred
Compensation Committee, in writing, of his or her eligibility to
participate in this Plan.
ARTICLE IV
COMPENSATION REDUCTION AGREEMENTS AND ACCOUNT BALANCES
4.1 Compensation Reduction Agreements. The amount of a Voluntary Deferral
made under the Plan shall be in accordance with a written Compensation
Reduction Agreement provided by the Deferred Compensation Committee for
that purpose. The amount of a salary deferral election shall be made no
later than December 1 preceding the Plan Year for which the deferral is
made. The amount of an annual bonus deferral election shall be made no
later than September 1 of the Fiscal Year to which such annual bonus
relates. Other Compensation deferral elections shall be made prior to
the time such amounts have been earned. Notwithstanding the foregoing,
(i) an Employee who first becomes a Participant during any Plan Year
may make salary deferral elections for such Plan Year within 30 days of
becoming a Participant if permitted by the Deferred Compensation
Committee member(s) representing such Participating Employer, and (ii)
a Participant wishing to defer a guaranteed signing bonus must make a
deferral election in respect of such guaranteed bonus within three
weeks of commencement of employment if permitted by the Deferred
Compensation Committee member(s) representing such Participating
Employer. The Compensation Reduction Agreement shall designate the
amount to be deferred in whole percentages of Compensation and/or as a
dollar amount. Salary deferrals shall be applied on a pro rata basis to
each pay period during the Plan Year. In addition, a Participant shall
be permitted to designate a Beneficiary on a form prescribed for such
purpose by the Deferred Compensation Committee. To be effective, a
Compensation Reduction Agreement and beneficiary designation form must
be received and approved by the Deferred Compensation Committee.
4.2 Termination Benefit Election. If a Termination Benefit is elected by
Participant, the Participant shall file the Termination Benefit
Dispersal Agreement with the Deferred Compensation Committee. Such
agreement shall state the Participant's election concerning the payment
distribution method for his/her Termination Benefit. The entire
Termination Benefit Balance shall be distributed pursuant to only one
payment distribution method (possible payment distribution methods are
defined in Section 5.2); provided, however, if the Participant, prior
to the Second Amendment, elected more than one payment distribution
method, then such multiple distribution methods shall remain in effect
in connection with elections made prior to the Second Amendment unless
such multiple distribution methods are waived by the Participant and
thenceforth the entire Termination Benefit Balance shall be distributed
pursuant to only one payment distribution method elected by the
Participant. A Participant may change the method of
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Termination Benefit payment election at any time during each Plan Year
by filing a revised Termination Benefit Dispersal Agreement with the
Deferred Compensation Committee. If the most recent Termination Benefit
election is not at least twelve (12) months prior to Termination of
Employment, then the prior election that is at least twelve (12) months
prior to Termination of Employment shall control.
4.3 Interim Distribution Election. If an Interim Distribution is elected by
Participant, the Participant shall file the Interim Distribution
Dispersal Agreement with the Deferred Compensation Committee. Such
agreement shall state the Interim Distribution Date elected by
Participant. A Participant may elect to have one or more Interim
Distribution Dates but a Participant may have no more than three (3)
Interim Distribution Dates outstanding at any given time (provided the
Deferred Compensation Committee reserves the right to increase or
decrease such number of dates). One time per Interim Distribution Date
(not counting substitute Dates), and upon written request of
Participant, an Interim Distribution Date may be substituted with
another Interim Distribution Date provided the request is made at least
one (1) year prior to the Interim Distribution Date being changed, and
the substitute Interim Distribution Date is at least one (1) year later
in time from the Interim Distribution Date being changed. Any such
request for a substitute Interim Distribution Date shall be subject to
the discretionary approval of the Deferred Compensation Committee. Upon
request of Participant, an Interim Distribution Date may be eliminated
provided such request is at least one (1) year before such Interim
Distribution Date; provided further, (a) any such change shall be
subject to the discretionary approval of the Deferred Compensation
Committee and (b) the amount in the Interim Distribution Balance
sub-account relating to such eliminated Interim Distribution Date shall
be deposited into the Termination Benefit Balance.
4.4 Prohibition Against Compensation Reduction Agreement Modifications. In
connection with a Voluntary Deferral of salary, a Participant may not
modify a Compensation Reduction Agreement during a Plan Year by
changing the amount of the Compensation reduction. In addition, a
Participant may not revoke a Compensation Reduction Agreement once
approved by the Deferred Compensation Committee.
4.5 Adjustments to Account Balances.
(a) On and after the Effective Date, a Participant's Account Balance
shall be credited with amounts deferred pursuant to Compensation
Reduction Agreements, and further credited or debited in an amount
equal to the hypothetical return on such Account Balance from the date
on which such deferred Compensation would otherwise have been
distributed to such Participant, assuming for such purpose that such
Account Balance had been actually invested during such period in one or
more of a number of investments, as provided in Section 4.5(b). In the
case of a Termination Benefit, such debiting and crediting shall
continue through the later of (i) the end of the month of such
Participant's Termination of Employment, and (ii) the end of the
installment period under Section 5.2,
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if applicable. In the case of an Interim Distribution, such debiting
and crediting shall continue through the close of business on the last
business day of the calendar year preceding the applicable Interim
Distribution Date.
(b) The Deferred Compensation Committee shall provide each Participant
with an Allocation Election outlining a list of available hypothetical
investments which may be designated by such Participant (as provided
below) for purposes of determining the adjustments to such
Participant's Account Balance under Section 4.5(a). Such investment
options shall initially include the Xxxxxxx Xxxxx Corporate Bond Index
(high quality, 1-10 year term) plus 1% and such other options as set
forth on Schedule A.
For all investment options other than the Xxxxxxx Xxxxx Corporate Bond
Index, the adjustment shall be based upon the return of the funds
during the applicable period. With respect to amounts hypothetically
invested in the Xxxxxxx Xxxxx Corporate Bond Index, such amounts shall
be credited quarterly based upon the index rate in effect at the
beginning of each calendar quarter. The Deferred Compensation
Committee, in its sole discretion, shall be permitted to add or remove
hypothetical investment options; provided, that in the event the
Xxxxxxx Xxxxx Corporation Bond Index hypothetical investment option is
removed, the Deferred Compensation Committee will provide a replacement
hypothetical investment option based upon the yield of United States
Treasury securities with a constant maturity of at least one year (the
"Bond Index Substitute Investment"), unless the Plan has been
terminated in accordance with Article VII; provided, further, that any
such additions or removals of hypothetical investment options shall not
be effective with respect to any period prior to the effective date of
such change. For the avoidance of doubt, if a Participant has elected
that all or any portion of a Participant's Account Balance (or future
deferrals) are to be hypothetically invested in a hypothetical
investment option that is removed by the Deferred Compensation
Committee, such Participant shall be required to elect a different
hypothetical investment option with respect to such portion of such
Participant's Account Balance (or such future deferrals); and until
such time as such Participant has made a new election, the applicable
portion of such Participant's Account Balance (and future deferrals)
shall be deemed to be invested in the Xxxxxxx Xxxxx Corporate Bond
Index (or Bond Index Substitute Investment).
Through the use of an Allocation Election Form, each Participant may
elect how such Participant's Account Balance is deemed to be
hypothetically invested; provided that such allocations shall be in
increments of five percent (5%). If a Participant fails to elect how
deferrals are deemed to be hypothetically invested, such deferrals
shall be deemed to be hypothetically invested in the Xxxxxxx Xxxxx
Corporation Bond Index (or, if such option has been removed, the
replacement option based upon the yield of United States Treasury
securities with a constant maturity of at least one year). Once in each
calendar quarter, if a Participant elects, the Account Balance may be
reallocated among the various hypothetical investment options; provided
that such allocations shall be in increments of five percent (5%).
Similarly, once each calendar quarter, each Participant may file an
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election to change the hypothetical investment of future deferrals.
Election changes may be permitted more frequently than quarterly if
permitted by the Deferred Compensation Committee for all Participants.
In the event a Participant is currently receiving Termination Benefit
distributions from such Participant's Termination Benefit Balance in
installments, the amount of each installment shall be reamortized
annually to reflect the return over the prior year of the investment
option in which such Termination Benefit Balance is hypothetically
invested. Notwithstanding anything in this Section 4.5(b) to the
contrary, each Participating Employer shall have the sole and exclusive
authority to invest any or all amounts (deferred by those Participants
who are (or were) employed by such Employer) in any manner, regardless
of any hypothetical investment election by any Participant. A
Participant's hypothetical investment election shall be used solely for
purposes of determining the deemed investment yield to be credited or
debited to such Participant's Account Balance.
ARTICLE V
BENEFIT PAYMENTS AND CERTAIN WITHDRAWALs
5.1 Termination Benefit. Subject to the provisions of this Article V, each
Participant shall be entitled to a Termination Benefit in an amount
equal to such Participant's Termination Benefit Balance as of the end
of the month in which Termination of Employment occurs, subject to
subsequent increase or decrease in the Termination Benefit Balance
based on hypothetical investment returns during the installment period
in the event Participant elects to receive payment in installments
under Section 5.2(b).
5.2 Form of Payment for Termination Benefit. A Participant may elect (as
provided in Section 4.2) to have such Participant's Termination Benefit
Balance distributed: (a) in a single lump sum within forty-five (45)
days following Termination of Employment; or (b) in annual installment
payments for a selected number of years not to exceed twenty (20)
years. If installments are elected, up to three of the annual
installments may be in amounts selected by the Participant with the
remaining payments being in equal amounts (all such installment
payments being subject to increase or decrease based on the
hypothetical investment returns during the installment period). If
installments are elected, the first installment shall be payable within
45 days of Termination of Employment, with subsequent installments
being paid each calendar year thereafter within forty-five (45) days
following the first business day of such calendar year until all
scheduled payments have been made.
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5.3 Disability Benefit. In the event of Disability, a Participant may elect
to commence immediate distribution of such Participant's Termination
Benefit in accordance with the form of payment previously elected under
the current Termination Benefit Dispersal Agreement. For purposes of
Termination Benefit distribution pursuant to Section 5.3, the last
business day of the month in which the Disability occurs shall be
deemed the equivalent of the date on which Termination of Employment
occurs.
5.4 Death Benefit. Notwithstanding a Participant's election as to form of
payment pursuant to a Compensation Dispersal Agreement, upon the death
of such Participant, such Participant's Beneficiary shall be paid a
single lump sum in an amount equal to the Participant's Account Balance
as of such Participant's date of death.
5.5 Change in Control. Notwithstanding anything in the Plan to the
contrary, in the event of an Involuntary Termination of Employment
within three (3) years following a Change in Control, each
Participant's Account Balance shall be valued as of the last day of the
month in which the Involuntary Termination of Employment occurs, and
shall be paid to such Participant in a lump sum within seven (7) days
following such valuation date.
5.6 Interim Distribution.
(a) A Participant may elect, on the Compensation Dispersal Agreement
for a given Compensation deferral, to have a portion, or all, of such
Voluntary Deferral, as well as any hypothetical investment gains and
losses specifically attributable to such deferrals, paid within
forty-five (45) days following an Interim Distribution Date designated
by the Participant. Upon deferral, the portion of the Voluntary
Deferral designated by the Participant to be distributed as an Interim
Distribution shall be credited to the Interim Distribution Balance.
(b) The Participant may also elect a "maximum amount" for the Interim
Distribution. In the event the Interim Distribution Balance relating to
a given Interim Distribution Date exceeds the specified maximum amount
at the time specified for distribution, then the excess balance shall
be credited to the Termination Benefit Balance. Otherwise, the Interim
Distribution Balance shall be the distribution amount. The Interim
Distribution shall be measured as of the close of business on the last
business day of the calendar year preceding the applicable Interim
Distribution Date.
(c) Notwithstanding a Participant's election to receive an Interim
Distribution, the entire Interim Distribution Balance shall be
distributable upon the occurrence of any event which triggers a
Termination Benefit distribution (whether lump sum or installments)
under any other provision of this Article V.
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5.7 Early Withdrawal. Through an Early Withdrawal prior to Termination of
Employment, a Participant may elect to have no less than 25% and up to
all of his Account Balance distributed at any time and for any reason,
subject to a penalty of 10% of the amount distributed. The penalty
shall be forfeited to the Company. Such distribution shall be
determined utilizing the last monthly valuation of the Account Balance
preceding the desired Early Withdrawal and shall be payable within
forty-five (45) days of such date. No deferrals shall be made under the
Plan on behalf of such Participant for the balance of the Plan Year in
which such election is made or for the following Plan Year. The amount
of such Early Withdrawal shall be debited to the Participant's
Termination Benefit Balance until depleted, and then to the Interim
Distribution Balance (commencing with the Distribution Balance
sub-account relating to the most distant Interim Distribution Date)
until depleted.
5.8 Hardship Withdrawal. A Participant may request, in writing to the
Deferred Compensation Committee, a distribution under the Plan if the
Participant experiences a financial hardship. A "financial hardship" is
an unanticipated emergency that is caused by an event beyond the
control of a Participant and that would result in severe financial
hardship to the Participant if early withdrawal were not permitted. The
Deferred Compensation Committee, in its sole discretion, shall
determine whether a Participant has experienced a financial hardship.
The amount of any distribution for financial hardship is limited to the
amount of the severe financial need, which cannot be met with other
resources of the Participant. The amount of such hardship distribution
shall be debited to the Participant's Termination Benefit Balance until
depleted, and then to the Interim Distribution Balance (commencing with
the Distribution Balance sub-account relating to the most distant
Interim Distribution Date) until depleted. Such distribution shall be
determined utilizing the last monthly valuation of the Account Balance
preceding the Hardship Withdrawal and shall be payable within fifteen
(15) days following approval of the Hardship Withdrawal by the Deferred
Compensation Committee.
ARTICLE VI
ADMINISTRATION
6.1 Plan Administration. This Plan shall be administered by the Deferred
Compensation Committee, which shall have authority to make, amend,
interpret and enforce all appropriate rules and regulations for the
administration of this Plan and decide or resolve any and all questions
including interpretations of this Plan, as may arise in connection with
the Plan.
6.2 Withholding. Each Participant's respective Employer shall have the
right to withhold from any payment made under the Plan (or any amount
deferred into the Plan) any taxes required by law to be withheld in
respect of such payment (or deferral).
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6.3 Indemnification. Each Employer shall indemnify and hold harmless each
employee, officer, or director of such Employer to whom is delegated
duties, responsibilities, and authority with respect to the Plan
against all claims, liabilities, fines and penalties, and all expenses
reasonably incurred by or imposed upon him (including but not limited
to reasonable attorney fees) which arise as a result of his actions or
failure to act in connection with the operation and administration of
the Plan to the extent lawfully allowable and to the extent that such
claim, liability, fine, penalty, or expense is not paid for by
liability insurance purchased or paid for by such Employer.
Notwithstanding the foregoing, an Employer shall not indemnify any
person for any such amount incurred through any settlement or
compromise of any action unless such Employer consents in writing to
such settlement or compromise.
6.4 Expenses. The expenses of administering the Plan shall be paid equally
by the Participating Employers.
6.5 Delegation of Authority. In the administration of this Plan, the
Deferred Compensation Committee may, from time to time, employ agents
and delegate to them such administrative duties as it sees fit, and may
from time to time consult with legal counsel who may be legal counsel
to a Participating Employer.
6.6 Binding Decisions or Actions. The decision or action of the Deferred
Compensation Committee in respect of any question arising out of or in
connection with the administration, interpretation and application of
the Plan and the rules and regulations thereunder shall be final and
conclusive and binding upon all persons having any interest in the
Plan.
ARTICLE VII
AMENDMENT AND TERMINATION
7.1 Amendment and Termination. The Plan is intended to be permanent, but
the Deferred Compensation Committee may at any time modify, amend, or
terminate the Plan, provided that such modification, amendment or
termination shall not cancel, reduce, or otherwise adversely affect the
amount of benefits of any Participant accrued (and any form of payment
elected) as of the date of any such modification, amendment, or
termination, without the consent of the Participant; provided, the
Deferred Compensation Committee shall be permitted upon Plan
termination to pay each Participant (without such Participant's
consent) a lump sum in the amount of such Participant's Account Balance
as of the date of such Plan termination.
7.2 Constructive Receipt Termination. Notwithstanding anything to the
contrary in the Plan, if any Participant receives a deficiency notice
from the United States Internal Revenue Service asserting constructive
receipt of amounts payable under the Plan, the Deferred
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Compensation Committee, in its sole discretion, may terminate the Plan
or such Participant's participation in the Plan.
ARTICLE VIII
FUNDING
8.1 General Assets. All benefits in respect of a Participant under this
Plan shall be paid directly from the general funds of such
Participant's Employer (or former Employer), and no special or separate
fund shall be established and no other segregation of assets shall be
made to assure payment. No Participant, Spouse or Beneficiary shall
have any right, title or interest whatever in or to any investments
which the Employer may make to aid the Employer in meeting its
obligation hereunder. Nothing contained in this Plan, and no action
taken pursuant to its provisions, shall create or be construed to
create a trust of any kind, or a fiduciary relationship, between an
Employer and any Employee, Spouse, or Beneficiary. To the extent that
any person acquires a right to receive payments from an Employer
hereunder, such rights are no greater than the right of an unsecured
creditor of such Employer.
8.2 Rabbi Trust. Any Employer may, at its sole discretion, establish a
grantor trust, commonly known as a Rabbi Trust, as a vehicle for
accumulating the assets needed to pay the promised benefit, but no
Employer shall be under any obligation to establish any such trust or
any other funding vehicle.
ARTICLE IX
GENERAL CONDITIONS
9.1 Anti-assignment Rule. No interest of any Participant, Spouse or
Beneficiary under this Plan and no benefit payable hereunder shall be
assigned as security for a loan, and any such purported assignment
shall be null, void and of no effect, nor shall any such interest or
any such benefit be subject in any manner, either voluntarily or
involuntarily, to anticipation, sale, transfer, assignment or
encumbrance by or through any Participant, Spouse or Beneficiary.
9.2 No Legal or Equitable Rights or Interest. No Employee and no other
person shall have any legal or equitable rights or interest in this
Plan that are not expressly granted in this Plan. Participation in this
Plan does not give any person any right to be retained in the service
of any employer. The right and power of any Employer to dismiss or
discharge such Employer's Employee is expressly reserved.
9.3 No Employment Contract. Nothing contained herein shall be construed to
constitute a contract of employment between an Employee and an
Employer.
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9.4 Headings. The headings of Sections are included solely for convenience
of reference, and if there is any conflict between such headings and
the text of this Plan, the text shall control.
9.5 Invalid or Unenforceable Provisions. If any provision of this Plan
shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof and the
Plan shall be construed and enforced as if such provisions, to the
extent invalid or unenforceable, had not been included. In particular,
if it shall be held that application of the Code to this Plan would
cause any payment to be received by a Participant to be taxable in
advance of the payment schedule elected by Participant, then (a) the
provision of this Plan causing such advanced taxability shall be
severed from this Plan and shall have no further force and effect and
(b) to the extent a Participant has already begun to receive payments,
then any remaining payments shall be accelerated to coincide with the
calendar year in which such tax is assessed.
9.6 Governing Law. The laws of the State of New York shall govern the
construction and administration of the Plan.
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IN WITNESS WHEREOF, the following Participating Employers have caused
this Plan to be adopted, effective as of February 10, 1998.
HOMESIDE INTERNATIONAL, INC.
F/K/A HOMESIDE, INC.
By: ______________________________________
Its: Chairman and Chief Executive Officer
ATTEST: _________________________________
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SCHEDULE A
FIDELITY CONTRA
FIDELITY MAGELLAN
JANUS
FIDELITY GROWTH & INCOME
INDEPENDENCE ONE EQUITY PLUS
VANGUARD INDEX 500
BRANDYWINE
PBHG GROWTH PBHG
HEARTLAND
DODGE & XXX BALANCED
X. XXXX PRICE INTERNATIONAL
VANGUARD INTERNATIONAL
FIDELITY GOVERNMENT SECURITIES
FIDELITY INVESTMENT GRADE BOND
INDEPENDENCE ONE FIXED INCOME
MONEY MARKET FUND
THE AFOREMENTIONED HYPOTHETICAL INVESTMENTS ARE REPLACED BY THE ATTACHED
HYPOTHETICAL INVESTMENTS THAT HAVE BEEN APPROVED BY THE DEFERRED COMPENSATION
COMMITTEE.
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