EXHIBIT 10.68
XXXXXXX NAVIGATION LIMITED
NONQUALIFIED DEFERRED COMPENSATION PLAN
PLAN AND TRUST AGREEMENT
(EFFECTIVE FEBRUARY 10, 1994)
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XXXXXXX NAVIGATION LIMITED
NONQUALIFIED DEFERRED COMPENSATION PLAN AND TRUST
THIS PLAN AND TRUST AGREEMENT, effective as of February 1, 1994 (the
"Effective Date"), is made and entered into by and between Xxxxxxx Navigation
Limited (the "Company"), acting on behalf of itself and any subsidiaries, and
Xxxx X. Xxxxxx as trustee (the "Trustee"). Throughout, Company shall include
wherever relevant any entity that is directly or indirectly controlled by the
Company or any entity in which the Company has a significant equity or
investment interest, as determined by the Company.
RECITALS:
1........The Company wishes to establish a supplemental employee retirement
plan for the benefit of a select group of highly compensated employees
designated by the Company, and in its sole discretion, as eligible executives
("Executives").
2........The Company wishes to provide that the plan to be established
under this plan or agreement shall be designated as the Xxxxxxx Navigation
Limited Nonqualified Deferred Compensation Plan (the "Plan").
3........The Company wishes to provide under the Plan for the payment of
vested accrued benefits to the Executives and their beneficiary or beneficiaries
("Trust Beneficiaries").
4........The Company wishes to provide under the Plan that the Company
shall pay all of the accrued benefits from its general assets.
5........The Company wishes to establish two irrevocable trusts
(individually, a "Trust," and together, the "Trusts") to set aside contributions
by the Company to meet its obligations under the Plan.
6........The Company wishes to make contributions to the Trusts and
that such contributions be held by the Trustee and invested, reinvested and
distributed, all in accordance with the provisions of this Plan.
7........The Company intends that amounts allocated to the Trusts and
the earnings thereon shall be used by the Trustee to satisfy the liabilities of
the Company under the Plan with respect to each Executive for whom an Account
has been established and such utilization shall be in accordance with the
procedures set forth herein.
8........The Company intends that the Trusts be "grantor trusts" with the
corpus and income of the Trusts treated as assets and income of the Company for
federal and state income tax purposes.
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9........The Company intends that the assets of the Trusts shall at all
times be subject to the claims of the general creditors of the Company as
provided in Article XI.
10.......The Company intends that the existence of the Trusts shall not
alter the characterization of the Plan as "unfunded" for purposes of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and shall
not be construed to provide income to the Executives under the Plan prior to
actual payment of the vested accrued benefits thereunder.
NOW THEREFORE, the Company does hereby establish the Plan and Trusts as
follows and does also hereby agree that the Plan and Trusts shall be structured,
held and disposed of as follows:
ARTICLE I
PLAN ADMINISTRATION
A........The Plan shall be administered by Xxxx X. Xxxxxx (the
"Administrator"). Subject to the provisions in the Plan and to the specific
duties delegated by the Board of Directors to such Administrator, the
Administrator shall be responsible for the general administration and
interpretation of the Plan and for carrying out its provisions. The
Administrator shall have such powers as may be necessary to discharge its duties
hereunder, including, but not by way of limitation, the following powers and
duties:
(1) discretionary authority to construe and interpret the
terms of the Plan, and to determine eligibility and the amount, manner
and time of payment of any benefits hereunder;
(2) to prescribe procedures to be followed by Executives for
purposes of Plan participation and distribution of benefits; and
(3) to take such other action as may be necessary and
appropriate for the proper administration of the Plan.
B........The Administrator may adopt such rules, regulations and bylaws
and may make such decisions as it deems necessary or desirable for the proper
administration of the Plan. Any rule or decision that is not inconsistent with
the provisions of the Plan shall be conclusive and binding upon all persons
affected by it, and there shall be no appeal from any ruling by the
Administrator that is within its authority, except as otherwise provided herein.
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ARTICLE II
ELIGIBILITY, PARTICIPATION AND BENEFICIARY DESIGNATION
A........Eligible Employees. The following categories of employees
("Eligible Employees") shall be eligible to participate in the Plan: (i)
employees who are designated as eligible to participate on the attached Exhibit
A to this Plan; and (ii) any other employee or category of employee that is
designated by the Administrator as eligible to participate in the Plan. The
Administrator reserves the right to modify the definition of eligible employee
at any time. Any Eligible Employee who has commenced participation in the Plan
shall be referred to in this Plan as an "Executive."
B........Participation. Each Executive may elect to commence
participation in the Plan by completing a Xxxxxxx Navigation Limited
Nonqualified Deferred Compensation Plan Deferred Compensation Agreement
("Deferred Compensation Agreement") within 30 days following the Effective Date.
Any individual who becomes an Eligible Employee after the Effective Date may
participate in the Plan by filing a Deferred Compensation Agreement within 30
days following the date on which the Administrator gives such individual written
notice that the individual is an Eligible Employee. Any Eligible Employee who
does not execute a Deferred Compensation Agreement within the time periods
described herein may nevertheless participate in the Plan commencing with
Compensation paid in the next succeeding calendar year by filing an executed
Deferred Compensation Agreement with the Administrator before the beginning of
such calendar year.
C........Beneficiary Designation. Each Executive, prior to entering the
Plan, shall designate a beneficiary or beneficiaries to receive the remainder of
any interest of the Executive under the Plan. An Executive may change his or her
beneficiary designation at any time on written notice to the Administrator. Each
beneficiary designation shall be in a form prescribed by the Administrator and
will be effective only when filed with the Administrator during the Executive's
lifetime. Each beneficiary designation filed with the Administrator will cancel
all previously filed beneficiary designations. In the absence of a valid
designation, or if no designated beneficiary survives the Executive, the
Executive's interest shall be distributed to the Executive's estate.
ARTICLE III
PLAN CONTRIBUTIONS AND ALLOCATIONS
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A........Participant Deferrals. Each Executive participating in the
Plan shall execute a Deferred Compensation Agreement authorizing the Company to
withhold a percentage of the Executive's Compensation which would otherwise be
paid to the Executive with respect to services rendered. Compensation shall be
defined for purposes of the foregoing as the cash compensation payable to the
Executive in connection with the Executive's services to the Company, including
all amounts which an Executive elects to have the Company contribute on his
behalf as a deferral contribution ("Compensation"). The deferral percentage is
applied to Compensation after all other applicable payroll deductions have been
applied. The Administrator may, in its discretion, establish in the Deferred
Compensation Agreement minimum and maximum levels of bonus and non-bonus
compensation that may be deferred pursuant to the Plan. Compensation deferrals
made by an Executive under this Plan shall be held as an asset of the Company
and the Company intends to deposit the amounts deferred into the Trusts.
B........Election Changes. An Executive may, in such form as the
Administrator may prescribe, discontinue deferral of future compensation at any
time; however, no other modifications to the Deferred Compensation Agreement may
be made prior to the commencement of the calendar year following written
notification to the Company of any desired modifications. The Administrator has
the power to establish uniform and nondiscriminatory rules and from time to time
to modify or change such rules governing the manner and method by which
Compensation deferral contributions shall be made, as well as the manner and
method by which Compensation deferral contribution may be changed or
discontinued temporarily or permanently. All Compensation deferral contributions
shall be authorized by the Executive in writing, made by payroll deduction,
deducted from the Executive's Compensation without reduction for any taxes or
withholding (except to the extent required by law or the regulations) and paid
over to the Trusts by the Company. Notwithstanding the foregoing, each Executive
shall remain liable for any and all employment taxes owing with respect to such
Executive's Compensation deferral contributions.
C........Cessation of Eligible Status. In the event an Executive ceases
to be an Eligible Employee while also a participant in the Plan, such employee
may continue to make Compensation deferral contributions under the Plan through
the end of the payroll period in which the employee ceases to be an Eligible
Employee. Thereafter, such employee shall not make any further Compensation
deferral contributions to the Plan unless or until he or she again meets the
eligibility requirements of Article II above.
D........Company Matching Contributions. As of the last day of each
calendar year or such earlier time or times as the Administrator may determine,
the Company may make matching contributions to the Trusts in such amount as the
Board of Directors of the Company shall specify.
E........Company Discretionary Contributions. The Company may, in its
sole discretion, make discretionary contributions to the Accounts of one or more
Executives at such times and in such amounts as the Board of Directors of the
Company shall determine.
F........Allocations. The Compensation deferral contributions and any
Company contributions made under the Plan on behalf of an Executive shall be
credited to the Executive's Account. The Administrator shall establish and
maintain separate subaccounts as it determines to be necessary and appropriate
for the proper administration of the Plan. Each Executive Account consists of
the aggregate interest of the Executive under the Plan (and in the Trust Funds,
as such term is defined in Article V), as reflected in the records maintained by
the Company for such purposes.
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ARTICLE IV
VESTING
A........Compensation Deferral Contributions. The value of an
Executive's Account attributable to Executives' Compensation deferral
contributions shall always be fully vested and nonforfeitable.
B........Company Contributions. The value of an Executive's Account
attributable to any Company contributions pursuant to Article III.D and E shall
vest in its entirety five (5) years after the date of the Company contribution
to which such value relates, provided the Executive has remained in the
continuous employ of the Company throughout such five-year period. If the
Executive's employment with the Company terminates for any reason prior to the
expiration of such five-year period, no portion of the Executive's Account
attributable to Company contributions occurring within the preceding five-year
period shall be considered vested for purposes of of this Plan. Upon termination
of an Executive's employment with the Company for any reason, any portion of the
Executive's Account that is not then vested (including allocable earnings, as
determined by the Administrator), shall be forfeited.
ARTICLE V
TRUST FUND
A........Trusts. The Company hereby establishes the Trusts with the
Trustee, consisting of such sums of money and other property acceptable to the
Trustee as from time to time shall be paid or delivered to the Trustee. All such
money and other property, all investments and reinvestments made therewith or
proceeds thereof and all earnings and profits thereon, less all payments and
charges as authorized herein, shall constitute the "Trust Funds." The Trust
Funds shall at all times be subject to the claims of general creditors of the
Company as provided in Article XI.
B........Grantor Trusts. The Trusts hereby established shall be
irrevocable, but for the issuance by the Internal Revenue Service of unfavorable
tax rulings on the status of the Trusts as grantor trusts. Subject to Article
XI, assets of the Trusts shall be held for the exclusive purpose of providing
vested accrued benefits to the Trust Beneficiaries and defraying expenses of the
Trusts in accordance with the provisions of this Plan. No part of the income or
corpus of the Trust Funds shall be recoverable by or for the Company prior to
the termination of the Trusts and the satisfaction of all liabilities under the
Plans.
C........Assignment. No right or interest to receive accrued benefits from
the Trusts may be assigned, sold, anticipated, ---------- alienated or otherwise
transferred by the Trust Beneficiaries.
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D........Trustee. The Trustee accepts the Trusts established under this
Plan on the terms and subject to the provisions set forth herein, and it agrees
to discharge and perform fully and faithfully all of the duties and obligations
imposed upon it under this Plan.
E........Trust Assets. The principal of the Trusts and any earnings
thereon shall be held separate and apart from other funds of the Company and
shall be used exclusively for the uses and purposes herein set forth. Neither
the Trust Beneficiaries nor the Plan shall have any preferred claim on, or any
beneficial ownership interest in, any assets of the Trusts prior to the time
such assets are paid to a Trust Beneficiary as vested accrued benefits as
provided in Article IX, and all rights created under the Plan and the Trusts
under this Plan shall be mere unsecured, contractual rights of the Executives
against the Company.
ARTICLE VI
GENERAL DUTIES OF THE ADMINISTRATOR AND THE TRUSTEE
A........Administrator Duties. The Administrator will provide the
Trustee with a copy of any future amendment to this Plan promptly upon its
adoption. The Administrator may from time to time hire outside consultants,
accountants, actuaries, legal counsel or recordkeepers to perform such tasks as
the Administrator may from time to time determine.
B........Trustee Duties. The Trustee shall manage, invest and reinvest
the Trust Funds as provided in Article XII of this Plan. The Trustee shall
collect the income on the Trust Funds, and make distributions therefrom, all as
hereinafter provided.
C........Company Contributions. While the Plan remains in effect, and
prior to a Change in Control, as defined below, the Company shall make
contributions to the Trust Funds at least once each quarter. The amount of any
quarterly contributions shall be at the discretion the Company. At the close of
each calendar year, the Company shall make additional contributions to the Trust
Funds to the extent that previous contributions to the Trust Funds for the
current calendar year are not equal to the total of the Compensation deferrals
made by each Executive plus Company matching contributions and discretionary
contributions, if any, accrued, as of the close of the current calendar year.
The Trustee shall not be liable for any failure by the Company to provide
contributions sufficient to pay all accrued benefits under the Plan in full in
accordance with the terms of this Plan.
D........Department of Labor Determination. In the event that any
Executives are found to be ineligible, that is, not members of a select group of
highly compensated employees, according to a determination made by the
Department of Labor, the Administrator will take whatever steps it deems
necessary, in its sole discretion to equitably protect the interests of the
affected Executives.
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ARTICLE VII
ALLOCATION OF TRUST INCOME OR LOSS
A........Determination of Net Income. As of each Valuation Date (as
defined in Article VII.D below), the Administrator shall determine the net
income or loss of the Trust Funds based on a statement from the Trustee of the
receipts and disbursements of the Trust Funds since the immediately preceding
Valuation Date and of the fair market value of the Trust Funds as of the
Valuation Date. If one or more separate investment funds have been established
as provided in Article XII, each fund shall be valued separately on each
Valuation Date and the net income or loss of each fund shall be allocated to
each Account invested in such investment fund. In addition, self-directed
accounts as defined under Article XII.B shall be valued according to Section C
of this Article.
B........Valuation. As of each Valuation Date and prior to any
allocation of contributions and forfeitures to be made as of such date, the net
income or loss of the Trust Funds since the immediately preceding Valuation
Date, including net appreciation or depreciation and any expenses paid by the
Trusts, shall be allocated to each Account in the ratio that the value, as of
the immediately preceding Valuation Date of each such Account invested in the
Trust Funds bears to the value, as of the immediately preceding Valuation Date,
of all Accounts invested in the Trust Funds. If one or more separate investment
funds have been established, the net income or loss of each fund shall be
allocated to each Account invested in such investment fund in proportion to the
value of each Account invested in such funds as of the immediately preceding
Valuation Date. The Administrator shall adopt suitable procedures to establish a
proportionate crediting of Trust income or loss to those portions of Accounts in
the case of contributions or hardship withdrawals that have occurred in the
interim period since the immediately preceding Valuation Date.
C........Valuation of Segregated Accounts. The portion of any
Executive's Account invested on a segregated basis as provided in Article XII
shall be valued separately on each Valuation Date and the net income or loss
allocated to such Account shall be based on the assets, including income, gain,
loss and/or other change in value of the assets constituting such portion of the
Account.
D........Valuation Dates. The Trust Funds, any separate investment
funds and any segregated account shall be valued as of the last day of each
calendar year and as of any other date the Company directs the Trustee to value
the Trust Funds, as provided in Article VII.E.
E........Special Valuation Dates at Administrator Discretion. The
Administrator may direct the Trustee to determine the fair market value of the
Trust Funds and may make a determination of Trust income or loss as of any date
other than the last day of a calendar year.
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ARTICLE VIII
EXECUTIVES' ACCOUNTS
A........Separate Accounts. The Administrator shall open and maintain a
separate Account for each Executive. Each Executive's Account shall reflect the
amounts allocated thereto and distributed therefrom and such other information
as affects the value of such Account pursuant to this Plan. The Administrator
may maintain records of Accounts to the nearest whole dollar.
B........Statement of Accounts. As soon as practicable after the end of
each calendar year the Administrator shall furnish to each Executive a statement
of his Account, determined as of the end of such calendar year. Upon the
discovery of any error or miscalculation in an Account, the Administrator shall
correct it, to the extent correction is practically feasible; provided, however,
that any such statement of Account shall be considered to reflect accurately the
status of the Executive's Account for all purposes under the Plan unless,
subject to any longer period required by ERISA, the Executive reports a
discrepancy to the Administrator within six (6) months after receipt of the
statement. The Administrator shall have no obligation to make adjustments to an
Executive's Account for any discrepancy reported to the Administrator more than
six (6) months after receipt of the statement, or for a discrepancy caused by
the Executive's error. Statements to Executives are for reporting purposes only,
and no allocation, valuation or statement shall vest any right or title in any
part of the Trust Funds, nor require any segregation of Trust assets, except as
is specifically provided in this Plan.
C........Accounts Which Are Not Segregated. When employment is
terminated and payment is not deferred, the amount of the payment shall be based
on the value of the vested portion of the Executive's Account as of the
Valuation Date immediately preceding his termination date plus any contribution
subsequently credited to such Account and less any distributions subsequently
made from the Account.
D........Segregated Accounts. Payment to an Executive shall be based on
the value of the vested portion of the Executive's segregated Account at the
date of distribution. The value of his or her segregated Account shall be the
current fair market value, including any income or loss, of the property
constituting such segregated Account.
ARTICLE IX
PAYMENTS TO A TRUST BENEFICIARY
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A........General. Payments of vested accrued benefits to Trust
Beneficiaries from the Trust Funds shall be made in accordance with the Deferred
Compensation Agreement between the Company and the Executive; provided, however,
the Trustee shall make such payments, as directed by the Administrator, only to
the extent the Company is not at such time Insolvent as defined in Article XI.
Except as otherwise expressly provided in the Executive's Deferred Compensation
Agreement, no distribution shall be made or commenced prior to the Executive's
termination of employment or death, or a "Change of Control," whichever occurs
earlier. An Executive who makes an Early Distribution Election (as defined in
the Deferred Compensation Agreement) may, at least one year prior to the
distribution date specified in such Early Distribution Election, revoke such
Election in favor of a subsequent distribution date; provided that an Executive
may revoke an Early Distribution election once only. For purposes of this Plan,
a "Change in Control" shall be deemed to have occurred if any person (including
a "Group" as such term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended) acquires shares of the Company either (i) having a
majority of the total number of votes that may be cast for the election of
directors of the Company or (ii) possessing, directly or indirectly, the power
to control the direction of management or policies of the Company; provided,
however, that no Change of Control shall be deemed to occur in the event of a
merger, consolidation or reorganization of the Company where the shareholders of
the Company immediately prior to such merger, consolidation or reorganization
own greater than 50% of the outstanding shares of the Company immediately after
such merger, consolidation or reorganization. The Trustee shall have no
responsibility to determine whether a Change in Control has occurred and shall
be advised of such event by the Company.
B........Cash Distributions. Where the distribution of all or any
portion of an Executive's Account is to be deferred in the form of cash, the
Account shall continue to be held and invested in the Trusts subject to
revaluation as provided in Article VII.
C........In Kind Distributions. In kind distributions shall be (i) made
only in a form of investment that was held on behalf of the Executive as a
segregated investment pursuant to Article XII.B in a separate investment fund
pursuant to Article XII.D immediately preceding the date of distribution, (ii)
limited to the amount of such investment so held, and (iii) based on the fair
market value of the distributable property, as determined by the Trustee at the
time of distribution.
D........Method of Distribution. Payment to any Trust Beneficiary shall
be made pursuant to the Deferred Compensation Agreement executed by the
Executive, in whole or in part. A Trust Beneficiary may specify, at least ninety
(90) days prior to the commencement of any distribution, whether such
distribution shall be made in a lump sum or in installments.
(1) In a lump sum, in cash and/or in kind, or
(2) In annual installments equal to 1/n of the Executive's
vested accrued benefit where n is the number of installments remaining to be
paid.
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E........Certain Distributions. In case of any distribution to a minor
or to a legally incompetent person, the Administrator may (1) direct the Trustee
to make the distribution to his legal representative, to a designated relative,
or directly to such person for his benefit, or (2) instruct the Trustee to use
the distribution directly for his support, maintenance, or education. The
Trustee shall not be required to oversee the application, by any third party, of
any distributions made pursuant to this Article IX.E.
F........IRS Determination. Notwithstanding any other provisions of
this Plan, if any amounts held in either Trust are found in a "determination"
(within the meaning of Section 1313(a) of the Internal Revenue Code of 1986, as
amended (the "Code")) to have been includible in the gross income of any Trust
Beneficiary prior to payment of such amounts from such Trust, the Trustee shall
as soon as practicable pay such amounts to the Trust Beneficiary, as directed by
the Company. For purposes of this Section, the Trustee shall be entitled to
written notice from the Administrator that a determination described in the
preceding sentence has occurred and to receive a copy of such notice. The
Trustee shall have no responsibility until so advised by the Administrator.
G........Limitation on Distributions. Notwithstanding any other
provision of this Plan, the Trustee shall limit each distribution to each
"covered employee" (as such term is defined in Section 162(m) of the Code) of
the Company at the time of each such distribution, such that the sum of (i) the
distributions made to such covered employee and (ii) the other "applicable
employee remuneration" (as such term is defined in Section 162(m) of the Code)
paid to such covered employee, during the fiscal year in which such distribution
is made, does not exceed $1,000,000.
ARTICLE X
HARDSHIP WITHDRAWALS
A........General Rule. At the request of an Executive, the
Administrator shall authorize a withdrawal at any time of the accrued benefit
attributable to the Executive's Compensation deferrals and gains or losses
thereon under the Executive's Account, provided that authorization for such
withdrawal and the amount thereof shall be given only on account of an
unforeseeable emergency. The term "unforeseeable emergency" shall mean severe
financial hardship to the Executive resulting from a sudden and unexpected
illness or accident of the Executive or of a dependent (as defined in Internal
Revenue Code section 152(a)) of the Executive, loss of the Executive's property
due to casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Executive. The
circumstances that will constitute an unforeseeable emergency 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 --
(1) hrough reimbursement or compensation by insurance or
otherwise,
(2) By liquidation of the Executive's assets, to the extent
the liquidation of such assets would not itself cause severe financial hardship,
or
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(3) By cessation of deferrals under the Plan.
The Administrator shall establish reasonable procedures and guidelines uniformly
applied, to determine whether an unforeseeable emergency exists; provided,
however, that no withdrawal request shall be granted if to do so could result in
the inclusion of Trust Funds amounts in the gross income of Trust Beneficiaries
prior to payment of such amounts from the Trust Funds because approval of such
request would be inconsistent with any applicable statute, regulation, notice,
ruling or other pronouncement of the Internal Revenue Service interpreting this
or similar provisions.
ARTICLE XI
TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO
TRUST BENEFICIARIES WHEN COMPANY INSOLVENT
A........Company Insolvency. The Company shall be considered "Insolvent"
and an "Insolvency" shall be deemed to exist for purposes of this Plan under any
of the following circumstances:
(1) The Company is unable to pay its debts as they
mature, defined as having a weighted average overdue
payables balance in excess of 270 days.
(2) A receiver or trustee is appointed to take
possession of all or substantially all of the
assets of the Company.
(3) There is a general assignment by the Company
for the benefit of creditors.
(4) An action or proceeding is commenced by or against
the Company under any insolvency or bankruptcy act,
or any other statute or regulation having as its
purpose the protection of creditors, and the action
or proceeding is not discharged within 60 days after
the date of commencement.
B........Plan Suspension. Notwithstanding any provision in this Plan to
the contrary, if at any time while either Trust is still in existence the
Company becomes Insolvent, the Trustee shall upon written notice thereof suspend
the payment of all amounts from the existing Trust Funds and shall thereafter
(i) not permit any further elective Compensation deferral contributions by the
Executives and (ii) discontinue all contributions by the Company to the existing
Trusts on behalf of the Executives. The Trustee shall hold the existing Trust
Funds in suspense for the benefit of the Company's creditors until it receives a
court order directing the disposition of the existing Trust Funds; provided,
however, that the Trustee may deduct or continue to deduct its fees and
expenses, including fees of any consultants, actuaries, accountants, legal
counsel or recordkeepers retained by the Company or Trustee to provide services
to the Trusts.
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C........Notice of Insolvency. By its approval and execution of this
Plan, the Company represents and agrees that its Board of Directors, the
Administrator, and its Chief Executive Officer, as from time to time acting,
shall have the fiduciary duty and responsibility on behalf of the Company's
creditors to give to the Trustee prompt written notice of the Company's
Insolvency and the Trustee shall be entitled to rely thereon to the exclusion of
all directions or claims to pay vested accrued benefits thereafter made. Absent
such notice, the Trustee shall have no responsibility for determining whether or
not the Company has become Insolvent.
D........If after being Insolvent, the Company later becomes solvent
without the entry of a court order concerning the disposition of the Trust
Funds, or if any bankruptcy or insolvency proceedings referred to in Article
XI.A are dismissed, the Company shall by written notice so inform the Trustee
and the Trustee shall thereupon resume all its duties and responsibilities under
this Plan without regard to this Article XI until and unless the Company again
becomes Insolvent as such term is defined herein.
E........If the Trustee discontinues payments from the Trusts pursuant
to this Article XI and subsequently resumes payments, or removes the suspended
status of the Trusts, interest will be added to the Accounts of all Executives,
including those Accounts from which a payment was held in suspense, for the
period of discontinuance at not less than the average rate on 90-Day Treasury
Bills auctioned during the period of discontinuance, to be determined and
calculated by the Company. The Company will not make any other contributions to
the Trusts that otherwise would have been made during the period of
discontinuance.
ARTICLE XII
INVESTMENT AND ADMINISTRATION OF TRUST FUND
A........Investments. The Trustee shall have the power:
(1) To invest and reinvest the Trust Funds; provided,
however, the Trustee may delegate this investment
authority, in whole or in part, and subject to such
terms and conditions and as the Trustee shall
require, to the Administrator, an Investment Manager
who meets the requirements of Section 3(38) of ERISA,
and, in accordance with Sections B through F below,
Executives participating in the Plan (with respect to
their own account), and provided further than in no
event shall the Trust Funds be invested in securities
of Xxxxxxx Navigation Limited;
(2) To collect and receive any and all money and
other property due to the Trust Funds and to give
full discharge therefore;
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(3) To settle, compromise or submit to arbitration any
claims, debts or damages due or owing to or from the
Trusts; to commence or defend suits or legal
proceedings to protect any interest of the Trusts;
and to represent the Trusts in all suits or legal
proceedings in any court or before any other body or
tribunal;
(4) Generally to do all acts, whether or not expressly
authorized, which the Trustee may deem necessary or
desirable for the protection of the Trust Funds.
Persons dealing with the Trustee shall be under no obligation
to see to the proper application of any money paid or property delivered to the
Trustee or to inquire into the Trustee's authority as to any transaction.
B........Segregated Investments - Participant Direction Permitted.
Subject to the provisions of Article XII.A. and at the discretion of the
Administrator, Executives may be permitted to direct the Trustee in writing
regarding the investment of funds in their Accounts, in a manner and form
prescribed by the Administrator; provided, however, that such right to direct
shall apply on a nondiscriminatory basis to all Executives who meet the
requirements established by the Administrator. Such directed investment Accounts
shall be segregated and shall be valued separately by the Trustee under the
provisions of Article VII.C. Valuations of such Accounts shall be made at such
times as the Administrator may require, but no less frequently than annually. In
no event, for valuation purposes, shall the property constituting such
segregated Accounts, or the net income or loss thereon, be commingled with other
Executives' Accounts. Such segregated Accounts may be charged with their
proportionate share of any general expenses charged to the Trusts or with the
full share of any expense incurred directly or indirectly in connection with
such Accounts.
C........Participant Direction Subject to Administrator and Trustee
Approval. Neither the Administrator nor the Trustee shall be under any
obligation to approve or disapprove any specific investment medium. Neither the
Company nor the Trustee has any liability for any losses or damage that may
occur or result from (i) the approval of or failure to approve of any specific
investment medium; (ii) the imposition of any administrative rules relating to
the timing of investment elections of any sort; or (iii) any administrative
delay in carrying out or failure to carry out investment elections within a
specified time. The Administrator or the Trustee may disapprove or refuse to
carry out any investment directions which in its opinion would subject the
Company or the Trustee to burdensome administrative responsibilities or which
the Administrator determines to be inappropriate from a legal, financial or
social perspective. Prior to carrying out any investment direction of an
Executive, the Trustee may require releases or any other documents, agreements
or indemnifications as it may consider necessary. The Trustee, in approving any
investment medium or in making investments under this Plan, shall not be
restricted by statutes governing the legal investment of trust funds.
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D........Separate Investment Funds - Administrator May Establish
Separate Funds. The Administrator may, in its sole discretion, direct the
Trustee to create one or more separate investment funds, having such different
specific investment objectives as the Administrator shall from time to time
determine. The Administrator shall determine and may from time to time
redetermine the number of investment funds and the specific objectives of said
funds and the investments or kinds of investment which shall be authorized
therefor.
Each Participant has the right to instruct the Administrator
to direct the Trustee in writing to invest his Account in one or more separate
investment funds, or in a directed investment, provided, however, that if any
Executive fails to make a direction pursuant to this Article as to all or any
part of such Account, the undirected portion of an Executive's Account shall be
invested by the Trustee.
E........Administrator To Establish Rules. The Administrator may at any
time make such uniform and nondiscriminatory rules as it determines necessary
regarding the administration of the directed investment option. The
Administrator may also develop and maintain rules governing the rights of
Executives to change their investment directions and the frequency with which
such changes can be made.
ARTICLE XIII
ACCOUNTING BY TRUSTEE
The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions required to be
done, including such specific records as shall be agreed upon in writing between
the Administrator and the Trustee. All such accounts, books and records shall be
open to inspection and audit at all reasonable times by the Administrator, the
Administrator's representatives or agents. Within one hundred and twenty (120)
days following the close of each calendar quarter and within one hundred and
twenty (120) days after the removal or resignation of the Trustee, the Trustee
shall deliver to the Administrator a written account of its administration of
the Trusts during such quarter or during the period from the close of the last
preceding quarter to the date of such removal or resignation, setting forth all
investments, receipts, disbursements and other actions effected by it, including
a description of all securities and investments purchased and sold, with the
cost or net proceeds of such purchases or sales (accrued interest paid or
receivable being shown separately), and showing all cash, securities and other
property held in the Trusts at the end of such quarter or as of the date of such
removal or resignation, as the case may be. The written approval of any
accounting by the Administrator shall be final as to all matters and
transactions stated or shown therein and binding upon the Administrator and all
persons who then shall be or then after shall become interested in the Trusts.
Failure of the Administrator to notify the Trustee within 180 days after receipt
of any accounting of its disapproval of such accounting shall be the equivalent
of written approval.
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ARTICLE XIV
RESPONSIBILITY OF TRUSTEE
The Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use; provided, however, that the
Trustee shall incur no liability to anyone for any action taken pursuant to a
direction, request or approval given by the Administrator or any Executive which
is contemplated by and complies with the terms of this Trust Agreement, and to
that extent the Trustee shall be relieved of the prudent person rule for
investments. The Trustee may hire agents, accountants, actuaries recordkeepers
and financial consultants. Expenses of such persons shall be deemed to be
expenses of management and administration of the Trusts within the meaning of
Article XV.D, below. The Trustee shall have, without exclusion, all powers
conferred on Trustees by applicable law unless expressly provided otherwise
herein.
ARTICLE XV
TAXES, EXPENSES AND COMPENSATION OF TRUSTEE
A........Company Assets. It is the intention of the Company to have the
corpus and income of the Trusts established hereunder treated as assets and
income of the Company to be used to satisfy the Company's legal liability under
the Plan in respect of all of the Executives, and the Company agrees that all
income, deductions and credits of the Trust Funds belong to the Company as owner
for income tax purposes and will be included on the Company's income tax
returns.
B........Taxes. The Company shall from time to time pay taxes
(references in this Plan to the payment of taxes shall include interest and
applicable penalties) of any and all kinds whatsoever which at any time are
lawfully levied or upon or become payable in respect of the Trust Funds, the
income or any property forming a part thereof, or any security transaction
pertaining thereto. To the extent that any taxes levied or assessed upon the
Trust Funds are not paid by the Company or contested by the Company pursuant to
the last sentence of this Article, the Trustee shall pay such taxes out of the
Trust Funds, and the Company shall, upon demand by the Trustee, deposit into the
Trust Funds an amount equal to the amount paid from the Trust Funds to satisfy
such tax liability. If requested by the Company, the Trustee shall at the
Company's expense, contest the validity of such taxes in any manner deemed
appropriate by the Company or its counsel, but only if it has received an
indemnity bond or other security satisfactory to it to pay any expenses of such
contest. Alternatively, the Company may itself contest the validity of any such
taxes, but any such contest shall not affect the Company's obligation to
reimburse the Trust Funds for taxes paid from the Trust Funds.
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C........Withholding. In making payments from the Trusts, the Trustee
shall be liable for federal income tax withholding, and shall withhold the
appropriate amount of tax, if any, as provided by applicable law and regulation,
from any payment made to a Trust Beneficiary, unless the Company does not
provide the Trustee with the necessary information as set forth in regulations,
in which case the Company shall assume all relevant liability.
D........Compensation; Expenses. The Trustee may be paid compensation
by the Company in accordance with any written agreement for this purpose between
them; provided, however, that a Trustee who is an officer, director or employee
of the Company shall serve without compensation. The Trustee shall be reimbursed
by the Company for its reasonable expenses of management and administration of
the Trusts, including reasonable compensation of any agent engaged by the
Trustee to assist it in such management and administration. The Trustee shall be
able to charge the Trust Funds for such compensation and for any reasonable
expenses including counsel, appraisal or accounting fees, and the same may be
deducted from the Trust Funds unless paid by the Company within sixty (60) days
after the Company receives written billing by the Trustee; provided that this
paragraph shall not apply while a dispute over the amount of such charges
exists.
ARTICLE XVI
PROTECTION OF TRUSTEE
A........Certification. The Company shall certify to the Trustee the
name or names of any person or persons authorized to act for the Company. Such
certification shall be signed by the Secretary of the Company duly authorized by
the Board of Directors. Until the Company notifies the Trustee, in a similarly
signed notice, that any such person is no longer authorized to act for the
Company, the Trustee may continue to rely upon the authority of such person. The
Trustee may rely upon any certificate, notice or direction of the Company which
the Trustee reasonably believes to have been signed by a duly authorized officer
or agent of the Company. Notices to the Trustee shall be sent in writing to the
Trustee, c/o Trimble Navigation Limited, 000 X. Xxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000-0000. No communication shall be binding upon the Trust Funds or
the Trustee until it is received by the Trustee and unless it is in writing and
signed by an authorized person. Notices to the Company shall be sent in writing
attention to the Company's principal office to the Chief Financial Officer, c/o
Trimble Navigation Limited, 000 X. Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx
00000-0000, or to such other address as the Company may specify. No notice shall
be binding upon the Company until it is received by the Company.
B........Legal Counsel. The Trustee may consult with any legal counsel
("Legal Counsel"), except as provided in Article XVIII.C, for the purpose of
obtaining advice on topics including but not limited to the construction of this
Plan, its duties hereunder, or any act which it proposes to take or omit, and
shall not be liable for any action taken or omitted in good faith pursuant to
such advice. Expenses of Legal Counsel shall be deemed to be expenses of
management and administration of the Trusts within the meaning of Article XV.D
hereof.
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C........Trustee Duties. The Trustee shall discharge its duties under
this Plan in a manner consistent with the objectives of this Plan. The Trustee
shall not be liable for any loss sustained by the Trust Funds by reason of the
purchase, retention, sale or exchange of any investment in good faith and in
accordance with the provisions of this Plan. The Trustee shall have no
responsibility or liability for any failure of the Company to make contributions
to the Trust Funds or to pay vested accrued benefits when due. The Trustee's
duties and obligations shall be limited to those expressly imposed upon it under
the provisions of this Plan relating to the Trusts, and the Trustee shall not
have responsibility under the provisions of this Plan relating to the Plan,
notwithstanding any reference to the Plan.
ARTICLE XVII
INDEMNIFICATION OF TRUSTEE
To the fullest extent permitted by law, the Company agrees to
indemnify, to defend, and to hold harmless the Trustee against any liability
whatsoever for any action taken or omitted by such Trustee in good faith in
connection with this Plan or duties hereunder and for any expenses or losses for
which the Trustee may become liable as a result of any such actions or
non-actions unless resultant from gross negligence or willful misconduct.
ARTICLE XVIII
RESIGNATION AND REMOVAL OF TRUSTEE AND LEGAL COUNSEL
A........Resignation. The Trustee may resign upon thirty (30) days'
prior written notice to the Company, except that any such resignation shall not
be effective until a successor trustee has been appointed, and such successor
has accepted the appointment in writing, but in any event no later than ninety
(90) days after such resignation. The Company shall condition its acceptance of
such successor on the obtaining from such successor of a written statement that
the successor has read this Plan and Trust Agreement and understands its
obligations thereunder.
B........Removal. The Company may remove the Trustee upon thirty (30)
days' prior written notice to the Trustee. Any such removal shall not be
effective until the close of such notice period and delivery by the Company to
the Trustee of (i) an instrument in writing appointing a successor trustee, (ii)
an acceptance of such appointment in writing executed by such successor, and
(iii) a written statement by such proposed successor that the successor has read
this Plan and Trust Agreement and understands its obligations thereunder.
160
C........Successor Trustee. Upon the resignation or removal of the
Trustee and appointment of a successor, the Trustee shall transfer and deliver
the Trust Funds to such successor. Following the effective date of the
appointment of the successor, the Trustee's responsibility hereunder shall be
limited to managing the assets in its possession, transferring such assets to
the successor and settling its final account. Neither the Trustee nor the
successor shall be liable for the acts of the other. All of the provisions set
forth herein with respect to the Trustee shall relate to each successor with the
same force and effect as if such successor had been originally named as the
Trustee hereunder.
ARTICLE XIX
DURATION AND TERMINATION OF TRUST AND AMENDMENT
A........Irrevocable. The Trusts are hereby declared to be
irrevocable and shall continue until all vested accrued benefits have been paid.
B........Termination of Trust. If the Trusts terminate under the
provisions of Article XIX.A, the Trustee shall liquidate the Trust Funds and,
after their final accounting has been settled, shall distribute to the Company
the net balance of any assets of the Trust Funds remaining after all vested
accrued benefits and administration expenses have been paid. Upon making such
distribution, the Trustee shall be relieved from all further liability.
C........Plan Amendment. This Plan may be amended, or the Plan
terminated or suspended, by an instrument in writing executed on behalf of the
Company by the President of the Company or the Administrator, or a duly
appointed representative of the Board of Directors and delivered to the Trustee,
provided, however, that (i) no amendment will be made to this Plan which will
cause this Plan, the Trusts or the assets of the Trust Funds to be governed by
or subject to Part 2, 3 or 4 of Title I of ERISA, (ii) no such amendment shall
adversely affect any Trust Beneficiary's accrued benefit, (iii) no such
amendment shall increase the duties or responsibilities of the Trustee unless
the Trustee consents thereto in writing, (iv) no such amendment which would
cause the Trusts to be other than "grantor trusts," or have contributions to the
Trusts by the Company, or income and gains of the Trust Funds, constitute a
taxable event to the Trusts or to the Executives, and (v) no such amendment
shall cause the vested accrued benefit paid to Trust Beneficiaries from the
Trust Fund to become nondeductible to the Company in the year of payment.
ARTICLE XX
MISCELLANEOUS
A........California Law. This Plan and the Trusts hereby created
shall be construed and regulated by the laws of the State of California.
161
B........Headings. The headings of sections in this Plan are used
herein for convenience of reference only and in case of any conflict the
text of this Plan shall control.
C........Successorship. This Plan shall be binding upon and inure to
the benefit of any successor to the Company or its business as the result of
merger, consolidation, reorganization, transfer of assets or otherwise, and any
subsequent successor thereto; and any such successor shall be deemed to be the
"Company" under this Plan. In the event of any such merger, consolidation,
reorganization, transfer of assets or other similar transaction, the successor
to the Company or its business or any subsequent successor thereto shall
promptly notify the Trustee in writing of its successorship and furnish the
Trustee with the information specified in Article XVI.A of this Plan. In no
event shall any such transaction described herein suspend or delay the rights of
Trust Beneficiaries to receive their vested accrued benefits hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
XXXXXXX NAVIGATION LIMITED TRUSTEE
By:
Xxxx X. Xxxxxx
Title:
Date: Date:
162
XXXXXXX NAVIGATION LIMITED
NONQUALIFIED DEFERRED COMPENSATION PLAN
DEFERRED COMPENSATION AGREEMENT
1. I acknowledge that the terms and conditions of the Xxxxxxx Navigation
Limited Nonqualified Deferred Compensation Plan ("Plan") have been
explained to me, including the tax consequences of my decision to
participate in the Plan.
2. I agree to defer all or a portion of my current income, and to have
that income paid to me at a later date pursuant to the terms and
conditions of the Plan, which is incorporated by reference, in its
entirety, in this Agreement.
3. I acknowledge that under the terms of the Plan, no payments can be
made in the event Xxxxxxx Navigation Limited is Insolvent (as defined
in the Plan).
4. I understand that this Agreement is not an employment agreement, does
not guarantee that I will receive any predetermined amount of
compensation, and does not guarantee that I will receive any bonus.
5. I understand that any income I defer will be held as an asset of
Xxxxxxx Navigation Limited and will remain subject to the claims of
the general creditors of Xxxxxxx Navigation Limited.
ELECTION TO DEFER INCOME
I hereby elect to defer
% of my future salary (between 1% and 100%)
% of any future bonus (between 1% and 100%)
I understand that I may discontinue deferral of future Compensation at any time
during the year, but that I may make no other change in the Agreement until the
beginning of the calendar year after I have notified Xxxxxxx Navigation Limited
in writing of the change I desire. I also understand that if I discontinue
deferral of future Compensation during the year, I cannot restart deferral until
the beginning of the succeeding calendar year.
DISTRIBUTION
I understand that all vested amounts held for my benefit under the Plan shall
begin to be distributed upon the earlier of my termination of employment with
Xxxxxxx Navigation Limited for any reason, including retirement, disability or
death, or upon a change of control or unforeseen emergency as described in the
Plan. In addition, I may elect to commence an early distribution (an "Early
Distribution Election") prior to such dates by making the following election:
Distribution of vested amounts held for my benefit under the Plan should
commence:
3 years after the date of this Agreement
or
5 years after the date of this Agreement
163
I understand that an Early Distribution Election cannot be changed, except to
make a one-time only election to extend the deferral period which must be made
at least one year before the deferral period ends.
METHOD OF PAYMENT (One method must be checked in order for this to be a valid
Agreement)
Subject to the preceding election, if any, I elect that the payment of all
vested amounts due me under this Agreement and the Plan shall be made in the
following manner:
One single lump sum payment paid as soon as administratively possible
following termination of employment or my death.
Annual installments equal to 1/n of the assets on deposit in the trust
credited to my account, where n is the number of installments
remaining to be paid. I hereby elect _____ annual payments (not to
exceed 10 years), with the first payment being made in the year in
which I terminate from employment or die, whichever first occurs.
Annual installments equal to a specified % of the vested assets credited
to my account under the Trust. I hereby elect _____ annual payments
(not to exceed 10 years). Please indicate the installment % by year in
the following space provided:
Year %
1
---------
2
---------
3
---------
4
---------
5
---------
6
---------
7
---------
8
---------
9
---------
10 100%
I understand that my elected method of distribution can be changed up to 90 days
prior to the date of actual distribution.
I understand further that my elected method of distribution may be modified by
Xxxxxxx Navigation Limited at any time prior to my termination of employment,
provided that any such modification that impairs my rights under this Agreement
and the Plan shall be subject to my consent.
164
DESIGNATED BENEFICIARY
In the event that I should die before all amounts payable to me under the Plan
have been paid, I designate the following beneficiary to receive the remainder
of my interest under the Plan. I understand that I may change this Designated
Beneficiary at any time on written notice to Xxxxxxx Navigation Limited.
Please follow the Beneficiary Election on file for the Xxxxxxx Navigation
Limited Savings and Retirement Plan.
or
Name(s) and Relationship:
The foregoing Election is voluntarily made by me after reviewing the terms of
the Plan and with knowledge that this Election is irrevocable until changed in
accordance with the terms of the Plan.
Agreed:
(Signature)
XXXXXXX NAVIGATION LIMITED
(Print Name)
By
(Social Security Number)
(Date) (Date)
165
