EXHIBIT 10.1 BALL CORPORATION 2005 DEFERRED COMPENSATION PLAN
Published on April 27, 2006
Exhibit 10.1
Ball
Corporation
2005
Deferred Compensation Plan
Effective
January 1, 2005
Ball
Corporation 2005 Deferred Compensation Plan For
Directors
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Article I
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Establishment
and Purpose
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1
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Article II
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Definitions
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1
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Article III
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Eligibility
and Participation
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9
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Article IV
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Deferral
Elections
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10
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Article V
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Modification
to Payment Schedules
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13
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Article VI
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Company
Awards
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14
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Article VII
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Valuation
of Account Balances; Investments
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15
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Article VIII
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Distributions
and Withdrawals
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16
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Article IX
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Administration
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18
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Article X
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Amendment
and Termination
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20
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Article XI
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Informal
Funding
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22
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Article XII
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Claims
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22
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Article XIII
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General
Conditions
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25
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Ball
Corporation 2005 Deferred Compensation Plan For Directors
Article I
Establishment
and Purpose
Ball
Corporation (the “Company”) has maintained and will continue to maintain the
Ball Corporation 2001 Deferred Compensation Plan and predecessor deferred
compensation plans (the “Grandfathered Plans”).
The
Company hereby adopts the Ball Corporation 2005 Deferred Compensation Plan,
restated as of April 26, 2006 (the “Plan”). The purpose of the Plan
continues to be to attract and retain key Employees by providing such Employees
the opportunity to defer the cash portion of their annual incentive awards
and
other cash compensation specified by the Human Resources Committee (the “HR
Committee”) of the Board of Directors.
In
December, 2005, the Company adopted an interim document in response to proposed
Treasury regulations published on October 4, 2005, that required the
Company to adopt written amendments prior to December 31, 2005, with
respect to items of transition relief described in Notice 2005-1 and that
expired on December 31, 2005. The interim document was intended to satisfy
the amendment requirements of the proposed regulations without the amendment
constituting a “material modification” to the Grandfathered Plans, but subject
to restatement in 2006 to reflect the requirements of Code Section 409A.
Accordingly, the Company adopts this Plan document, as of the date set forth
on
the signature page below and effective as of the Effective Date, to comply
with
the requirements of Code Section 409A.
The
Plan
is intended to be an unfunded arrangement providing deferred compensation
to
eligible employees who are part of a select group of management or highly
compensated employees of the Company within the meaning of Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA.
Article II
Definitions
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2.1
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Account.
Account means a bookkeeping account maintained by the Plan Administrator
to record the Company’s payment obligation to a Participant as determined
under the terms of the Plan. The Plan Administrator may maintain
an
Account to record the total obligation to a Participant and component
Accounts to reflect amounts payable at different times and in different
forms pursuant to the terms of a Participant’s Deferral Election. Without
limiting the Plan Administrator’s authority to establish Accounts as it
deems necessary, Accounts may include, for each Participant,
(i) Separation Accounts, (ii) Specified Date Accounts, and/or
(iii) any Retirement Restoration Account. Reference to an Account
means any such Account established by the Plan Administrator, as
the
context requires. Accounts are intended to constitute unfunded
obligations
of the Company within the meaning of Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA.
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Corporation 2005 Deferred Compensation Plan
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Accounts
under this Plan shall reflect only those amounts considered to
be
Deferrals as defined in this Plan. The provisions of this Plan
shall apply
only to such Accounts and shall not apply to any Grandfathered
Plan
accounts.
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2.2
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Account
Balance.
Account Balance means, with respect to any Account, the total amount
of
the Company’s payment obligation from such Account as of the most recent
Valuation Date.
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2.3
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Affiliate.
Affiliate means a corporation, trade or business that, together
with the
Company, is treated as a single employer under Code Section 414(b) or
(c).
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2.4
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Beneficiary.
Beneficiary means a natural person, estate, or trust designated
by a
Participant to receive benefits to which a Beneficiary is entitled
in
accordance with provisions of the Plan. The Participant’s spouse, if
living, otherwise the Participant’s estate, shall be the Beneficiary
if:
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(a)
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the
Participant has not designated a natural person or trust as Beneficiary,
or
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(b)
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all
designated Beneficiaries have predeceased the
Participant.
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A
former spouse shall have no interest under the Plan, as Beneficiary
or
otherwise, unless (i) the Participant designates such person as a
Beneficiary after dissolution of the marriage or (ii) such interest
is ordered under a domestic relations order described in
Section 8.9.
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2.5
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Business
Day.
A
Business Day is each day on which the New York Stock Exchange is open
for business.
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2.6
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Change
in Control.
Change in Control occurs on the date on which there is (i) a change
in the ownership of the Company, (ii) a change in the effective
control of the Company or (iii) a change in the ownership of a
substantial portion of the Company’s assets. For purposes of this Section,
a change in ownership of the Company occurs on the date on which
any one
person or more than one person acting as a group acquires ownership
of
stock of the Company that, together with stock held by such person
or
group constitutes more than 50% of the total fair market value
or total
voting power of the stock of the Company. A change in the effective
control of the Company occurs on the date on which either (i) a
person or more than one person acting as a group acquires ownership
of
stock of the Company possessing 35% or more of the total voting
power of
the stock of the Company or (ii) a majority of members of the
Company’s Board of Directors is replaced during any twelve (12)-month
period by directors whose appointment or election is not endorsed
by a
majority of the members of the Company’s Board of Directors prior to the
date of the appointment or election. A change in the ownership
of a
substantial portion of assets occurs on the date on which any one
person
or more than one person acting as a group acquires assets from
the Company
that have a total gross fair market value equal to or more than
40% of the
total gross fair market value of all of the assets of the Company
immediately prior to such acquisition or
acquisitions.
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Corporation 2005 Deferred Compensation Plan
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Reference
to the Company under this Section 2.6 also shall mean Affiliates for
whom a Participant is providing services at the time of a Change
in
Control affecting such Affiliate.
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The
determination as to the occurrence of a Change in Control shall
be based
on objective facts and in accordance with the requirements of Code
Section 409A.
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2.7
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Claimant.
Claimant means a Participant or Beneficiary filing a claim under
Article XII of this Plan.
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2.8
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Code.
Code means the Internal Revenue Code of 1986, as amended from time
to
time.
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2.9
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Code
Section 409A.
Code Section 409A means Section 409A of the Code, and the regulations
and
other guidance issued by the Treasury Department and Internal Revenue
Service thereunder.
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2.10
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Company.
Company means Ball Corporation.
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2.11
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Company
Award.
Company Award means a credit by the Company to a Participant’s Account(s)
in accordance with the provisions of Article VI of the Plan. Except
as otherwise provided in Article VI, Company Awards are credited at
the sole discretion of the Company and the fact that a Company
Award is
credited in one year shall not obligate the Company to continue
to make
such Company Award in subsequent
years.
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2.12
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Compensation.
Compensation means a Participant’s annual incentive awards. Compensation
may also include such other cash or equity-based compensation,
(if any)
that is determined by the HR Committee of the Board of Directors,
in its
sole discretion, as eligible for deferral under the terms of this
Plan.
Compensation shall not include any compensation that has been previously
deferred under this Plan or any other arrangement subject to Code
Section 409A, or accounts maintained under the Grandfathered
Plans.
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2.13
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Death
Benefit.
Death Benefit means payment to a Participant’s Beneficiary(ies) due to the
death of the Participant. Death Benefits will be paid in accordance
with
Section 8.4.
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2.14
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Deferral.
Deferral means the credits to a Participant’s Accounts attributable to
deferrals of Compensation described in Prop. Treas. Reg.
Section 1.409A-1(b)(1) and Earnings on such amounts as provided in
Prop. Treas. Reg. Section 1.409A-1(b)(2), except where the context of
the Plan clearly indicates
otherwise.
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2.15
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Deferral
Election.
Deferral Election means an agreement between a Participant and
the Company
specifying any or all of the following: (i) the amount of each
component of Compensation subject to the Deferral Election;
(ii) investment allocation described in Section 7.2; and
(iii) Payment Schedule. The Plan Administrator may permit different
deferral amounts for each component of Compensation and may establish a
minimum or maximum deferral amount for each such
component.
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Corporation 2005 Deferred Compensation Plan
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A
Deferral Election must be submitted to the Company in accordance
with the
Plan and under procedures established by the Plan Administrator
from time
to time. A Deferral Election may be modified by a subsequent investment
reallocation described in Section 7.2, or payment modification
described in Article V submitted to the Company in accordance with
the terms of this Plan and procedures adopted by the Plan
Administrator.
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The
Plan Administrator may reduce a Participant’s Deferral Election as
necessary to permit sufficient non-deferred Compensation from which
the
Company may satisfy a Participant’s obligations regarding welfare plans
and from which to satisfy tax withholding obligations, and/or to
conform
the Deferral Election and the Plan to applicable
law.
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2.16
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Disability.
Disability means disability under the Company’s long-term disability
programs for Eligible Employees.
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2.17
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Earnings.
Earnings means an adjustment to the value of an Account in accordance
with
Article VII.
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2.18
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Effective
Date.
Effective Date means January 1, 2005, with respect to Compensation
“deferred” on or after such date. Deferrals of Compensation that was
earned and vested as of December 31, 2004, and credited to a
Participant’s account under the Ball Corporation 2001 Deferred
Compensation Plan shall not be subject to this Plan, even if such
deferrals were credited after December 31,
2004.
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2.19
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Eligible
Employee.
Eligible Employee means a member of a “select group of management or
highly compensated employees” of the Company or an Affiliate within the
meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, as
determined by the HR Committee of the Board of Directors (or the
Plan
Administrator, if such authority is delegated by the HR Committee)
from
time to time in its sole
discretion.
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2.20
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Employee.
Employee means an employee of the Company and any former employee
who
continues to provide services to the Company pursuant to Prop.
Treas. Reg.
Section 1.409A-1(h)(1)(ii).
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2.21
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ERISA.
ERISA means the Employee Retirement Income Security Act of 1974,
as
amended from time to time.
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2.22
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Participant.
Participant means an Eligible Employee who has received notification
of
his or her eligibility to defer Compensation under the Plan under
Section 3.1 and any other person with an Account Balance greater than
zero, regardless of whether such individual continues to be an
Eligible
Employee of the Company. A Participant’s continued participation in the
Plan shall be governed by Section 3.2 and Section 3.3 of the
Plan.
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2.23
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Payment
Schedule.
Payment Schedule means the date as of which payment under the Plan
will
commence and the form in which such payment will be
made.
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Corporation 2005 Deferred Compensation Plan
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(a)
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Separation
Payments. A
Participant may elect a Deferral Election that establishes a Separation
Account the number of years following Separation from Service when
payment
will be made from the Account (e.g., “Third year following Separation from
Service”). Subject to the payment rules set forth below, payment under
such an election will be made on or after January 1 of the specified
year. If no payment year is specified, payment will be made in
the year
following the year in which the Participant’s Separation from Service
occurs.
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The
following rules apply to any Payment Schedule commencing in the
year
following the year in which a Participant’s Separation from Service
occurs. If the Separation from Service occurs prior to July 1,
payment will be made on or after January 1 of the following year. If
the Separation from Service occurs on or after July 1, payment will
be made on or after July 1 of the following year. Payments delayed to
a date later than the dates specified in the preceding sentence
pursuant
to the provisions of Sections 8.6 and 8.10 will be treated as
payments made as of such specified
dates.
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Payment
will be made in a single lump sum unless the Participant specifies
an
alternative form of payment in the Deferral Election establishing
a
Separation Account. Alternative forms of payment include (i) a lump
sum payment between 0% and 100% of the Account Balance and (ii) any
remaining Account Balance payable in a series of substantially
equal
annual installments from two (2) to fifteen (15) years. For purposes
of
Article V, (i) each lump sum payment and (ii) each series
of substantially equal installments will be treated as separate
forms of
payment and any series of substantially equal annual installments
will be
treated as a single form of payment. If a partial lump sum is paid,
and
unless the Participant specifies an alternative commencement date
for the
installment payments or modifies the installments pursuant to
Article V, the payment commencement date for the installments will be
the first anniversary of the lump sum payment commencement
date.
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Notwithstanding
the foregoing, if a Participant Separates from Service prior to
attaining
age 55, he or she will receive all Account Balances in a single
lump sum,
commencing in the year following the year in which the Separation
from
Service occurs. Participants may not file an election under Article V
to modify the time or form of a payment described in this
paragraph.
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(b)
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Specified
Date Payments. Payment
from a Participant’s Specified Date Account will be made on or after
January 1 of the year specified under the elections described in
Section 4.5.
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Payment
will be made in a single lump sum unless the Participant specifies
an
alternative form of payment in his first Deferral Election. Alternative
forms of payment include (i) a lump sum payment between 0% and 100%
of the Account Balance and (ii) any remaining Account Balance payable
in a series of
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Corporation 2005 Deferred Compensation Plan
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substantially
equal annual installments from two (2) to fifteen (15) years. For
purposes
of Article V, (i) each lump sum payment and (ii) each
series of substantially equal installments elected by the Participant
will
be treated as separate forms of payment and any series of substantially
equal installments will be treated as a single form of payment.
If a
partial lump sum is paid, and unless the Participant specifies
an
alternative commencement date for the installment payments or modifies
the
installments pursuant to Article V, the payment commencement date for
the installments will be the first anniversary of the lump sum
payment
commencement date.
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Notwithstanding
the foregoing, if a Participant Separates from Service prior to
attaining
age 55, all unpaid Specified Date Accounts will be paid in a single
lump
sum commencing in the year following the year in which the Separation
from
Service occurs. Participants may not file an election under Article V
to modify the time or form of a payment described in this
paragraph.
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(c)
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Death
Payments.
Payment will be made from all Accounts according to the Payment
Schedule
in effect for each such Account, except that the commencement date
under
such Payment Schedules on or after January 1 of the year following
the year in which the Participant’s death
occurs.
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(d)
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Retirement
Restoration Benefit.
A
Participant entitled to a Retirement Restoration Benefit will receive
a
single lump sum payment on or after January 1 of the year following
the year in which occurs the earliest of (i) the date a Participant
attains age 65, (ii) Unforeseeable Emergency (iii) death or
(iv) Separation from Service.
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2.24
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Performance-Based
Compensation.
Performance-Based Compensation means Compensation where the amount
of, or
entitlement to, the Compensation is contingent on the satisfaction
of
preestablished organizational or individual performance criteria
relating
to a performance period of at least twelve (12) consecutive months
in
which the Participant performs services for the Company. Organizational
or
individual performance criteria are considered preestablished if
established not later than ninety (90) days after the commencement
of the
period of service to which the criteria relate, provided that the
outcome
is substantially uncertain at the time the criteria are established.
Performance-Based Compensation may include payments based on performance
criteria that are not approved by the Board of Directors, a committee
of
the Board or by the stockholders of the Company. Performance-Based
Compensation does not include any amount or portion of any amount
that
will be paid either regardless of performance, or based upon a
level of
performance that is substantially certain to be met at the time
the
criteria is established. Performance criteria may be subjective
but must
relate to the performance of the Participant, a group of Employees
that
includes the Participant or a business unit (which may include
the
Company) for which the Participant provides services. The determination
that any subjective performance criteria have been met shall not
be made
by the Participant or by a family member of the Participant, or
by a
person under the supervision of the Participant or a Participant’s family
members where
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Corporation 2005 Deferred Compensation Plan
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any
amount of the compensation of such person is controlled in whole
or in
part by the Participant or such family member. Compensation based
on
Company stock performance may constitute Performance-Based Compensation
if
it is based solely on an increase in the value of such stock after
the
date of grant or award. The determination of whether Compensation
qualifies as “Performance-Based Compensation” will be made in accordance
with Prop. Treas. Reg. Section 1.409A-1(e) and subsequent
guidance.
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2.25
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Plan.
Plan means the Ball Corporation 2005 Deferred Compensation Plan,
as
amended from time to time.
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2.26
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Plan
Administrator.
Plan Administrator means the Deferred Compensation Committee of
the
Company, acting pursuant to the powers and authority granted under
Section 9.1 of the Plan.
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2.27
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Plan
Year.
Plan Year means January 1 through
December 31.
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2.28
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Retirement
Restoration Account.
Retirement Restoration Account means the Account established to
record the
Restoration Contribution specified in Section 6.3 and to pay the
Retirement Restoration Benefit.
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2.29
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Retirement
Restoration Benefit.
Retirement Restoration Benefit means the benefit payable under
Section 8.3.
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2.30
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Separation
Account.
Separation Account means an Account established under a Deferral
Election,
as described in Section 4.4 to record an amount payable to a
Participant due to his or her Separation from Service and the year
in
which payment from such Separation Account will be made. A Participant
may
establish and maintain at any one time no more than the maximum
number of
Separation Accounts specified by the Plan
Administrator.
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2.31
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Separation
from Service.
An Employee incurs a Separation from Service upon termination of
employment with the Company. The occurrence of a Separation from
Service
is determined by the Plan Administrator under the facts and circumstances
and in accordance with Code
Section 409A.
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(a)
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Leaves
of Absence.
A
Participant remains an Employee during military leave, sick leave,
or
other bona
fide
leave of absence (such as temporary employment by the government)
if the
period of such leave does not exceed six (6) months or such longer
period
as is provided either by statute or by contract. If the period
of leave
exceeds six (6) months and the Participant’s right to reemployment after
such extended leave is not provided either by statute or by contract,
the
employment relationship is deemed to terminate on the first day
immediately following such six(6)-month period. In this regard,
a
Participant who is an Eligible Employee at the time he or she is
placed on
disability leave of absence in accordance with the Company’s policies and
procedures shall continue to be an Employee and shall not incur
a
Separation from Service until the earlier of
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Corporation 2005 Deferred Compensation Plan
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(i) termination
of employment, (ii) attainment of age 65, or (iii) the
Participant’s death.
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(b)
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Continuing
Services Post-Employment. A
former Employee shall not be considered to have terminated employment
if
he or she continues to provide more than “insignificant services” as
defined in Prop. Treas. Reg. Section
1.409A-1(h)(ii).
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(c)
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Sale
of Assets. A
Separation from Service shall not include a termination of employment
provided under the terms of a sale of assets of the Company or
an
Affiliate if (i) the purchaser hires the Participant as an employee
or other service provider upon the closing of the transaction and
(ii) the purchaser assumes the liability under the Plan for payment
of such Participant’s Accounts.
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2.32
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Specified
Date Account.
Specified Date Account means an Account established under a Deferral
Election, as described in Section 4.5 to record an amount payable to
a Participant in a year specified in such Deferral Election according
to
the Payment Schedule in effect for such Account. A Participant
may
establish and maintain at any one time no more than the maximum
number of
Separation Accounts specified by the Plan
Administrator.
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2.33
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Substantial
Risk of Forfeiture.
Substantial Risk of Forfeiture shall have the meaning specified
in Prop.
Treas. Reg.
Section 1.409A-1(d).
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2.34
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Target
Total Annual Compensation.
Target Total Annual Compensation means, for purposes of determining
the
contribution to a Participant’s Retirement Restoration Account, the total
as of the last date prior to salary continuance of (i) the
Participant’s annualized salary for the calendar year, plus (ii) the
Participant’s target annual incentive award under the Ball Corporation
Economic Value Added Incentive Compensation Plan, or any successor
plan.
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2.35
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Unforeseeable
Emergency.
An Unforeseeable Emergency is a severe financial hardship of the
Participant or Beneficiary resulting from an illness or accident
of the
Participant or Beneficiary, the Participant’s or Beneficiary’s spouse, or
the Participant’s or Beneficiary’s dependent (as defined in Code
Section 152(a)); loss of the Participant’s or Beneficiary’s property
due to casualty (including the need to rebuild a home following
damage to
a home not otherwise covered by insurance, for example, not as
a result of
a natural disaster); or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control
of the
Participant or Beneficiary. For example, the imminent foreclosure
of or
eviction from the Participant’s or Beneficiary’s primary residence may
constitute an Unforeseeable Emergency. In addition, the need to
pay for
medical expenses, including nonrefundable deductibles, as well
as for the
costs of prescription drug medication, may constitute an Unforeseeable
Emergency. Finally, the need to pay for the funeral expenses of
a spouse
or a dependent (as defined in Code Section 152(a)) may also
constitute an Unforeseeable Emergency. Except as otherwise provided
in
this Section, the purchase of a home and the payment of college
tuition
are
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Corporation 2005 Deferred Compensation Plan
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not
Unforeseeable Emergencies. Whether a Participant or Beneficiary
is faced
with an Unforeseeable Emergency permitting a distribution under
Section 8.5 of the Plan is to be determined by the Plan Administrator
based on the relevant facts and circumstances of each case, but,
in any
case, a distribution on account of Unforeseeable Emergency may
not be made
to the extent that such emergency is or may be reimbursed through
insurance or otherwise, by liquidation of the Participant’s assets, to the
extent the liquidation of such assets would not cause severe financial
hardship, or by cessation of deferrals under this
Plan.
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2.36
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Valuation
Date.
Valuation Date shall mean each Business Day selected by the Plan
Administrator, in its discretion, for determining the value of
Accounts.
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Article III
Eligibility
and Participation
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3.1
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Eligibility
and Participation.
An Eligible Employee becomes eligible to file a Deferral Election
upon
receipt of notification of eligibility from the Plan Administrator.
Such
Eligible Employee becomes a Participant upon the earlier to occur
of
(i) a credit of Company Awards under Article VI or
(ii) filing his or her initial Deferral Election in accordance with
Article IV.
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3.2
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Duration.
A
Participant shall be eligible to defer Compensation and receive
allocations of Company Awards, subject to the terms of the Plan,
for as
long as such Participant is an Eligible Employee. A Participant
who is no
longer an Eligible Employee but continues to be employed by the
Company
may not defer Compensation but may otherwise exercise all of the
rights of
a Participant under the Plan with respect to his or her Accounts.
On and
after a Separation from Service, a Participant shall remain a Participant
as long as his or her Accounts are greater than zero and during
such time
may continue to make investment elections under Article VII. An
individual shall cease participation in the Plan when all benefits
under
the Plan to which he or she is entitled have been
paid.
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A
Participant who is an Eligible Employee at the time he or she is
placed on
disability leave of absence in accordance with the Company’s policies and
procedures shall continue to be an Eligible Employee and a Participant
eligible for Company Awards under Section 6.3 until the earlier of
(i) it is determined by the Plan Administrator that the Eligible
Employee is no longer eligible for the Retirement Restoration Benefit,
(ii) notification of termination of employment, (iii) attainment
of age 65, or (iv) the Participant’s
death.
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3.3
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Revocation
of Future Participation.
Notwithstanding the provisions of Section 3.2, the Plan Administrator
may, in its discretion, revoke such Participant’s eligibility to make
future deferrals under this Plan. Such revocation will not affect
in any
manner a Participant’s Accounts or other terms of this
Plan.
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Corporation 2005 Deferred Compensation Plan
Article IV
Deferral
Elections
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4.1
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Deferral
Elections, Generally.
An
Eligible Employee shall make a Deferral Election by completing
and
submitting a deferral agreement during the enrollment periods established
by the Plan Administrator and in the manner specified by the Plan
Administrator. The Deferral Election shall designate a dollar amount
or
whole percentage of Compensation to be
deferred.
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|
Deferral
Elections are considered to be effective on the date they become
irrevocable as of the dates set forth in Section 4.2 unless the form
of Deferral Agreement provided by the Plan Administrator specifies
an
earlier date. Notwithstanding the foregoing, a Deferral Election
may be
suspended in the event of an Unforeseeable Emergency (regardless
of
whether a payment is made to the Participant due to such Unforeseeable
Emergency). A Deferral Election that is not timely filed with respect
to a
service period or component of Compensation shall be considered
void and
shall have no effect with respect to such service period or
Compensation.
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|
The
HR Committee of the Board of Directors, in its sole discretion,
may
specify the components of Compensation subject to deferral. The
Plan
Administrator may establish a minimum or maximum deferral amount
for each
component of Compensation and the timing of submission of Deferral
Elections with respect to such
Compensation.
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|
4.2
|
Timing
Requirements for Deferral Elections.
|
|
(a)
|
First
Year of Eligibility.
An
Eligible Employee may submit a Deferral Election within thirty
(30) days
of receipt of the notification of his eligible status under
Section 3.1. The Deferral Election described in this paragraph
becomes irrevocable on the first day following such 30th day. An
Eligible
Employee may file a Deferral Election under this Section 4.2(a) only
if he or she does not participate in any other “account balance plan” as
defined in Prop. Treas. Reg. Section 1.409A-1(c)(i)(A) maintained
by the
Company or an Affiliate, other than as permitted in Prop. Treas.
Reg.
Section 1.409A-1(c)(ii).
|
|
A
Deferral Election filed under this Section 4.2(a) applies to
Compensation earned on and after the date the Deferral Election
becomes
irrevocable. For Compensation that is earned based upon a specified
performance period (e.g., over a calendar year), where a Deferral
Election
is made in the first year of eligibility but after the beginning
of the
service period, the election will be deemed to apply to Compensation
paid
for services performed subsequent to the election if the election
applies
to the portion of the Compensation equal to the total amount of
the
Compensation for the service period multiplied by the ratio of
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the
number of days remaining in the performance period after the Deferral
Election becomes irrevocable over the total number of days in the
service
period.
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|
Eligibility
to submit a Deferral Election during the thirty (30)-day period
specified
in this Section 4.2(a) shall not preclude an Eligible Employee from
also filing any Deferral Elections in accordance with Section 4.2(b)
through (g) during or after such thirty (30)-day
period.
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(b)
|
Salary
and Other Non-Performance-Based Compensation.
Subject to the authority of the HR Committee of the Board of Directors
to
identify deferrable components of Compensation under Section 4.1 and
the Plan Administrator’s authority to establish maximum and minimum
deferrals under Sections 2.15 and 4.1, a Participant may defer salary
and other non-Performance-Based Compensation by filing a Deferral
Election
no later than December 31 of the year prior to the year in which such
Compensation is earned. A Deferral Election described in this paragraph
shall become irrevocable with respect to such Compensation as of
January 1 of the year in which such Compensation is
earned.
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|
(c)
|
Performance-Based
Compensation.
A
Deferral Election may be filed with respect to Performance-Based
Compensation, provided that:
|
|
(1)
|
the
Participant performs services continuously from a date no later
than the
date upon which the performance criteria for such Performance-Based
Compensation are established through a date no earlier than the
date upon
which the Participant submits a Deferral
Election;
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|
(2)
|
the
Deferral Election is submitted at the times and in the manner established
by the Plan Administrator, but in no event later than the date
that is six
(6) months before the end of the performance period during which
such
Performance-Based Compensation is earned;
and
|
|
(3)
|
in
no event may an election to defer Performance-Based Compensation
be made
after such Performance-Based Compensation has become both substantially
certain to be paid and readily
ascertainable.
|
|
A
Deferral Election becomes irrevocable with respect to Performance-Based
Compensation as of the day immediately following the latest date
described
in paragraph (c)(2).
|
|
Nothing
in Section 4.2(a) shall preclude an Eligible Employee from filing a
Deferral Election in his initial year of eligibility under this
Section 4.2(c), even if such election is made later than thirty (30)
days after notification of eligibility under
Section 3.1.
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|
(d)
|
Short-Term
Deferrals.
Compensation that meets the definition of a “short-term deferral”
described in Prop. Treas. Reg. Section 1.409A-1(b)(4) may be deferred
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under
a Deferral Election filed not later than twelve (12) months prior
to the
date on which the substantial risk of forfeiture lapses. The Payment
Schedule for such Deferral must specify a commencement date no
earlier
than five (5) years after the forfeiture restriction
lapses.
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|
(e)
|
Deferral
Election With Respect to Certain Forfeitable
Rights.
With respect to a legally binding right to a payment in a subsequent
year
that is subject to a forfeiture condition requiring the Participant’s
continued services for a period of at least twelve (12) months
from the
date the Participant obtains the legally binding right, an election
to
defer such Compensation may be made on or before the 30th day after
the
Participant obtains the legally binding right to the Compensation,
provided that the election is made at least twelve (12) months
in advance
of the earliest date at which the forfeiture condition could lapse.
The
Deferral Election described in this paragraph becomes irrevocable
after
such 30th day.
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|
(f)
|
Deferral
Under Non-Elective Arrangement.
An
arrangement satisfying the requirements of Prop. Treas. Reg.
Section 1.409A-2(a)(12) shall be treated as a valid Deferral Election
subject to the terms of the Plan if such agreement (i) incorporates
the provisions of this Plan document by reference or conduct, (ii) is
classified as an “individual account plan” under Code Section 409A,
and (iii) otherwise complies with Code
Section 409A.
|
|
(g)
|
2005
Elections.
The Plan Administrator has the authority, effective January 1, 2005,
to allow any or all Participants to make or modify a Deferral Election
with respect to deferrals subject to Code Section 409A, which relate
all or in part to services performed prior to December 31, 2005. Such
election or modification must be filed with the Plan Administrator
no
later than March 15, 2005.
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|
4.3
|
“Evergreen”
Deferral Elections.
The Plan Administrator may provide in the form of Deferral Election
that
such Deferral Election remain in effect until terminated or modified
by
the Participant. Such “evergreen” Deferral Elections become effective with
respect to an item of Compensation on the date such election becomes
irrevocable under Section 4.2. A Participant whose Deferral Election
is suspended due to an Unforeseeable Emergency will be required
to file a
new Deferral Election under this Article IV in order to continue
making Deferrals under the Plan.
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|
4.4
|
Separation
Account Elections.
A
Participant’s Deferral Election may establish one or more Separation
Accounts (up to the maximum number of such Accounts established
by the
Plan Administrator) from which payment will be made due to a Participant’s
Separation from Service. The Deferral Election establishing a Separation
Account shall specify the Payment Schedule for such
Account.
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|
4.5
|
Specified
Date Account Elections.
A
Participant’s Deferral Election may establish one or more Specified Date
Accounts (up to the maximum number of such Accounts established
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by
the Plan Administrator). The Deferral Election establishing a Specified
Date Account shall specify the Payment Schedule for such
Account.
|
|
(a)
|
Allocation
of Deferrals.
A
Deferral Election may allocate Deferrals to one or more Specified
Date
Accounts, provided that the payment commencement date for such
Accounts
occurs on or after the first day of the third Plan Year after the
Plan
Year to which the Compensation subject to the Deferral Election
is earned.
If a Deferral Election would result in an allocation of Deferrals
to a
Specified Date Account with a payment date occurring earlier than
the
minimum deferral period, such allocation will be treated as an
unallocated
Deferral, subject to the provisions of
Section 4.6.
|
|
(b)
|
Effect
of Earlier Separation From Service. The
unpaid Account Balance of any Specified Date Account will be combined
with
the Separation Account in the event of the Participant’s Separation from
Service prior to attaining age 55, and will be paid in a single
lump sum
in accordance with
Section 2.23(a).
|
|
4.6
|
Unspecified
Deferral Allocations.
Deferrals that are not allocated to a Separation Account or Specified
Date
Account under the terms of a Deferral Election will be allocated
to the
Separation Account with the earliest payment commencement
year.
|
|
If
a Separation Account has not been established, the Administrator
shall
establish a Separation Account to receive such Deferrals. Subject
to the
modification rules under Article V, such Account will be payable in a
single lump sum in the year following the year in which the Participant’s
Separation from Service occurs.
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|
4.7
|
Deductions
from Pay.
The Plan Administrator has the authority to determine the payroll
practices under which any component of Compensation subject to
a Deferral
election will be deducted from a Participant’s
Compensation.
|
Article V
Modifications
to Payment Schedules
|
5.1
|
Participant’s
Right to Modify.
Subject to Section 5.2, a Participant may modify the Payment Schedule
with respect to an Account, provided such modification complies
with the
requirements of Sections 5.1(a) and
(b).
|
|
(a)
|
Time
of Election. The
date on which a modification election is submitted to the Plan
Administrator must be at least twelve (12) months prior to the
January 1 or July 1 on which payment commences under the Payment
Schedule in effect prior to modification, and (ii) the date payments
commence under the modified Payment Schedule occurs no earlier
than five
(5) years after the January 1 or July 1 of the year payment
would have commenced under the Payment Schedule in effect prior
to the
effective date of the modification. Under no circumstances
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may
a modification election result in an acceleration of payments in
violation
of Code Section 409A.
|
|
(b)
|
Effective
Date. A
modification election described in Section 5.1(a) becomes effective
on the date that is twelve (12) months after the date the modification
is
filed with the Plan Administrator. Until such modification election
becomes effective, payment will be made in accordance with the
Payment
Schedule in effect prior to such
modification.
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|
(c)
|
Effect
on Other Accounts. An
election to modify a Payment Schedule is specific to the Specified
Date or
Separation Account to which it applies, and shall not be construed
to
affect the Payment Schedules of any other
Accounts.
|
|
(D)
|
Effect
of Modification Election Upon Death or Unforeseeable
Emergency.
A
modification election described in this Section shall have no effect
on
the commencement date of payments due to death or Unforeseeable
Emergency.
|
|
5.2
|
Modifications
Authorized Under Notice 2005-1 and Proposed Regulations.
Notwithstanding any provision of this Plan to the contrary, during
calendar years 2005 and 2006, a Participant may modify any Payment
Schedule of any Account without regard to the requirements of
Section 5.1(a) and (b); provided, however, that any modification
election submitted during 2006 purporting to modify an Account
with a
Payment Schedule commencing during 2006 or which would cause the
commencement date of the Payment Schedule for an Account to be
accelerated
into 2006 shall be null and void to the extent such election is
inconsistent with this paragraph. The Plan Administrator has the
authority
to prescribe the time and manner under which such modifications
may be
made.
|
Article VI
Company
Awards
|
6.1
|
Company
Awards.
The HR Committee of the Board of Directors or the Plan Administrator,
if
such authority is delegated, may, in its sole and absolute discretion,
authorize Company Awards to one, some, or all of the Participant(s)
in an
amount determined in its sole and absolute discretion. A Company
Award may
be made at any time during the calendar year and may consist of
“matching”
contributions. The HR Committee of the Board of Directors or its
delegate
shall be under no obligation to make contributions to the Plan
unless the
Company has entered into a separate agreement (such as an employment
agreement) to make such
contributions.
|
|
6.2
|
Vesting.
Company Awards and the Earnings thereon, shall vest in accordance
with the
vesting schedule(s) established by the Plan Administrator at the
time that
the Company Award is made. The unvested portion shall be forfeited
upon
Separation from Service. The Plan Administrator may, at any time,
in its
sole discretion, increase a Participant’s
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vested
interest in a Company Award or restore any forfeiture. Notwithstanding
the
foregoing, any decision to accelerate vesting with respect to a
Participant subject to SEC Rule 16b shall be approved by the HR
Committee of the Board of
Directors.
|
|
6.3
|
Retirement
Restoration Due to Disability.
The Company will make an annual contribution to a Participant’s Retirement
Restoration Account during each year in which a Participant is
receiving
disability benefits from the Company. The amount of the contribution
will
equal 12.5% of the Participant’s Target Total Annual Compensation, up to a
maximum of $70,000. The Retirement Restoration Account will be
100% vested
at all times. Contributions under this Section 6.3 shall be made
during such times as the Company is receiving payments under a
policy of
insurance that are payable due to the Participant’s
disability.
|
Article VII
Valuation
of Account Balances; Investments
|
7.1
|
Valuation.
Deferrals shall be credited to appropriate Accounts on the date
such
Compensation would have been paid to the Participant absent the
Deferral
Election. Company Awards shall be credited in accordance with the
provisions of Article VI, as determined by the Plan Administrator.
Account Balances will be adjusted as of each subsequent Valuation
Date to
reflect Earnings and payments since the previous Valuation Date.
Valuation
of Accounts shall be performed under procedures approved by the
Plan
Administrator.
|
|
7.2
|
Earnings
Credit.
Subject to the Plan Administrator’s procedures for valuing payments from
the Plan, each Account will be credited with earnings on each Business
Day, based upon the Participant’s allocation of Deferrals among a menu of
investment options selected in advance by the Plan
Administrator.
|
|
(a)
|
Investment
Options.
Investment options will consist of actual investments, which may
include
stocks, bonds, mutual fund shares and other investments. The Plan
Administrator, in its sole discretion, shall be permitted to add
or remove
Investment Funds from the Plan menu from time to time provided
that any
such additions or removals of Investment Funds shall not be effective
with
respect to any period prior to the effective date of such
change.
|
|
A
Participant’s investment allocation constitutes a deemed, not actual,
investment among the investment options comprising the investment
menu. At
no time shall a Participant have any real or beneficial ownership
in any
investment option included in the investment menu, nor shall the
Company
or any trustee acting on its behalf have any obligation to purchase
actual
securities as a result of a Participant’s investment allocation. A
Participant’s investment allocation shall be used solely for purposes of
adjusting the value of a Participant’s Account
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Balances
and the amount of the Company’s corresponding payment obligation under the
terms of the Plan.
|
|
(b)
|
Participant
Allocations.
A
Participant’s Deferral Election shall specify the manner in which future
Deferrals credited to each Account will be invested. Deferrals
may be
allocated among the investment options in increments of 1%. The
Participant’s investment allocation will become effective on the same
Business Day or, in the case of investment allocations received
after a
time specified by the Plan Administrator, the next Business Day.
The
investment allocation will remain in effect until the Participant
modifies
the investment allocation in accordance with procedures adopted
by the
Plan Administrator.
|
|
Participants
may reallocate current Account Balances among the investment options
in
increments of 1% by filing a new allocation election at the time
and in
the form specified by the Plan Administrator. The Participant’s investment
allocation will become effective on the same Business Day or, in
the case
of asset allocations received after a time specified by the Plan
Administrator, the next Business Day. The allocation election shall
apply
prospectively to the Account or Accounts identified in the
election.
|
|
(c)
|
Unallocated
Deferrals and Accounts.
If any portion of a Deferral or Account Balance has not been allocated
to
an investment option, such portion shall be invested in an option,
the
primary objective of which is the preservation of
capital.
|
Article VIII
Distributions
and Withdrawals
|
8.1
|
Separation
Account Payments.
Payments will be made from all Separation Accounts according to
the
Payment Schedule specified in Section 2.23(a). The amount of the
payments will be based on the Separation Account Balance and will
be paid
in accordance with the provisions of
Section 8.6.
|
|
8.2
|
Specified
Date Account Payments.
Subject to an earlier Separation from Service described in
Section 4.5(b), the Account Balance of each Specified Date Account
will be paid in accordance with the Payment Schedule in effect
for such
Account and the provisions of
Section 8.6.
|
|
8.3
|
Retirement
Restoration Benefit.
The Company shall pay or commence payment of the Retirement Restoration
Benefit according to the Payment Schedule specified in
Section 2.23(d).
|
|
8.4
|
Death
Benefit.
If payments have commenced from a Participant’s Accounts as of the time of
the Participant’s death, the Beneficiary(ies) will continue to receive the
remaining
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payments
under the Payment Schedule in effect for such Account. If payments
have
not commenced from an Account, payment will be made in accordance
with the
Payment Schedule for a death benefit described in
Section 2.23(c).
|
|
8.5
|
Unforeseeable
Emergency.
A
Participant may submit a written request to the Plan Administrator
to
receive a distribution from his or her Account Balance(s) if the
Participant experiences an Unforeseeable Emergency. Distributions
of
amounts in the event of an Unforeseeable Emergency are limited
to the
extent reasonably needed to satisfy the emergency need which cannot
be met
with other resources of the Participant. The amount of such distribution
shall be subtracted first from the Participant’s Separation Account with
the latest payment commencement date until depleted and then from
the next
latest Separation Accounts and then Specified Date
Accounts.
|
|
A
withdrawal by a Participant who is a “16b Officer” must be approved by the
HR Committee of the Board of
Directors.
|
|
8.6
|
Valuation
and Payment.
Payment of benefits under the Plan will be based on the valuation
of the
applicable Account Balance as of the Valuation Date specified by
the Plan
Administrator in its discretion.
|
|
Payment
is treated as made upon the payment commencement date under the
applicable
Payment Schedule if the payment is made on or after such date in
the same
calendar year or, if later, by the 15th day of the third calendar
month
following the date specified under the arrangement. If a calculation
of
the amount of the payment is not administratively practical due
to events
beyond the control of the Participant, the payment will be treated
as made
upon the date specified under the Payment Schedule if the payment
is made
during the first calendar year in which the payment becomes
administratively practicable.
|
|
8.7
|
Installments;
Declining Balance Calculation.
If a Payment Schedule specifies installment payments, annual payments
will
be made beginning as of the payment commencement date for such
installments and shall continue on each anniversary thereof until
the
number of installment payments specified in the Payment Schedule
has been
paid. The amount of each installment payment shall be determined
by
dividing (a) by (b):
|
|
(a)
|
equals
the Account Balance as of the Valuation Date
and
|
|
(b)
|
equals
the remaining number of installment
payments.
|
|
8.8
|
“De
Minimis Account” Balance.
Any provision in this Plan to the contrary notwithstanding, payment
to a
Participant or Beneficiary will be made in a single lump sum, provided
(i) the payment accompanies the entirety of the Participant’s
interest in the Plan and all similar arrangements that constitute
a
nonqualified deferred compensation arrangement under Prop. Treas.
Reg.
Section 1.409A-1(c); (ii) the payment is made on or before the
later of December 31 of the calendar year in which occurs the
Participant’s Separation from Service, or the 15th day of the third month
following the Participant’s
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Separation
from Service; (iii) the payment is not greater than $25,000. Any
Payment Schedule contrary to the provisions of this Section 8.8 shall
be null and void.
|
|
8.9
|
Domestic
Relations Order.
Notwithstanding any benefit, Payment Schedule or other provision
of this
Plan regarding the time and form of payment, the Plan Administrator
may
pay all or a portion of a Participant’s Accounts to an “alternate payee”
as specified under the terms of a domestic relations order (defined
in
Code Section 414(p)(1)(B)). If a time or form of payment is not
specified
in such order, payment will be made to such alternate payee(s)
in a single
lump sum as soon as is administratively practical following the
Plan
Administrator’s determination that the order meets the requirements of
this Section 8.9.
|
|
8.10
|
Permissible
Payment Delays.
The Company may delay any payment to a Participant upon the Plan
Administrator’s reasonable anticipation of one or more of the
following:
|
|
(a)
|
The
Company’s income tax deduction with respect to such payment would be
limited or eliminated by application of Code Section 162(m);
or
|
|
(b)
|
Making
such payment would violate a term of a loan agreement to which
the Company
or an Affiliate is a party, or other similar contract to which
the
Company, or an Affiliate, is a party, and such violation would
cause
material harm to the Company or an Affiliate;
or
|
|
(c)
|
Making
such payment would violate federal securities laws or other applicable
law.
|
Article IX
Administration
|
9.1
|
Plan
Administration.
This Plan shall be administered by the Deferred Compensation Committee
of
the Company which shall act as the Plan Administrator. The Plan
Administrator shall have discretionary authority to make, amend,
interpret
and enforce all appropriate rules and regulations for the administration
of this Plan and to utilize its discretion to decide or resolve
any and
all questions, including but not limited to eligibility for benefits
and
interpretations of this Plan and its terms, as may arise in connection
with the Plan. Claims for benefits shall be filed with the Plan
Administrator and resolved in accordance with the claims procedures
in
Article XII. The Plan Administrator may exercise such additional
powers and authority as may be delegated to the Plan Administrator
by the
HR Committee of the Board of Directors and such powers as are conferred
under the terms of the Plan.
|
|
9.2
|
Administration
Upon Change in Control.
Upon a Change in Control the members of the HR Committee of the
Board of
Directors, as constituted immediately prior to such Change in Control,
shall act as the Plan
Administrator.
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Upon
such Change in Control, the management of the successor to the
Company may
not act, directly or indirectly, to remove the Plan Administrator,
unless
2/3rds of the members of the Board of Directors of the Company
and a
majority of Participants and Beneficiaries with Account Balances
consent
to the removal and replacement of the Plan Administrator. The individual
who was the Chief Executive Officer of the Company (or if such
person is
unable or unwilling to act, the next highest ranking officer) prior
to the
Change in Control shall have the authority (but shall not be obligated)
to
appoint an independent third party to act as the Plan Administrator
in
lieu of the members of the HR Committee of the Board of Directors.
Notwithstanding the foregoing, neither the members of the HR Committee
of
the Board of Directors nor the officer described above shall have
authority to direct investment of trust assets under any rabbi
trust
described in Section 11.2.
|
|
The
members of the HR Committee of the Board of Directors, acting as
the Plan
Administrator, shall have the exclusive authority to interpret
the terms
of the Plan and resolve claims under the claims procedure (except
appeals
brought by a Participant or
Beneficiary).
|
|
The
successor organization to the Company shall, with respect to the
individuals acting as the Plan Administrator identified under this
Section, (i) pay all reasonable expenses and fees of the Plan
Administrator, (ii) indemnify the Plan Administrator (including
individual members of the HR Committee of the Board of Directors)
against
any costs, expenses and liabilities including, without limitation,
attorneys’ fees and expenses arising in connection with the performance of
the Plan Administrator hereunder, except with respect to matters
resulting
from the Plan Administrator’s gross negligence or willful misconduct and
(iii) supply full and timely information to the Plan Administrator on
all matters related to the Plan, any rabbi trust, Participants,
Beneficiary(ies) and Accounts as the Plan Administrator may reasonably
require.
|
|
9.3
|
Withholding.
The Company shall have the right to withhold from any payment due
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).
|
|
9.4
|
Indemnification.
The Company shall indemnify and hold harmless each employee, officer,
director, agent or organization, to whom or to which it delegated
duties,
responsibilities, and authority under the Plan or otherwise with
respect
to administration of the Plan, including, without limitation, the
Plan
Administrator, the HR Committee of the Board of Directors and their
agents, against all claims, liabilities, fines and penalties, and
all
expenses reasonably incurred by or imposed upon him or it (including
but
not limited to reasonable attorney fees) which arise as a result
of his or
its 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 the Company.
Notwithstanding the foregoing, the Company shall not indemnify
any person
or organization if his or its actions or failure to act are due
to gross
negligence or willful
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misconduct
or for any such amount incurred through any settlement or compromise
of
any action unless the Company consents in writing to such settlement
or
compromise.
|
|
9.5
|
Expenses.
The direct out of pocket expenses of administering the Plan shall
be paid
by the Company.
|
|
9.6
|
Delegation
of Authority.
In the administration of this Plan, the Plan Administrator 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
shall be legal counsel to the
Company.
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9.7
|
Binding
Decisions or Actions.
The decision or action of the Plan Administrator 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.
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Article X
Amendment
and Termination
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10.1
|
Amendment
and Termination.
The Plan is intended to be permanent, but the HR Committee of the
Board of
Directors of the Company may at any time and from time to time
amend the
Plan or may terminate the Plan as provided in this
Section 10.1.
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(a)
|
Amendments.
The
Company, by action taken by the HR Committee of the Board of Directors,
may amend the Plan at any time, provided that any such amendment
shall not
reduce the vested Account Balances of any Participant accrued as
of the
date of any such amendment or restatement (as if the Participant
had
incurred a voluntary Separation from Service on such date) or reduce
any
rights of a Participant under the Plan or other Plan features with
respect
to vested Deferrals made prior to the date of any such amendment
or
restatement without the consent of the Participant. The HR Committee
of
the Board of Directors of the Company may delegate to the Plan
Administrator the authority to amend the Plan without the consent
of the
Board of Directors of the Company for the purpose of (i) conforming
the Plan to the requirements of law, (ii) to facilitate
administration, (iii) to clarify provisions based on the Plan
Administrator’s interpretation of the document and (iv) to make such
other amendments as the Board may
authorize.
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(b)
|
Termination.
The Company, by action taken by the HR Committee of the Board of
Directors, may terminate the Plan and pay Participants and Beneficiaries
their Account Balances in a single lump sum under the following
conditions:
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(1)
|
Company’s
Discretion.
The Company may terminate the Plan in its discretion, provided
that
(i) all arrangements sponsored by the Company that would be
aggregated with any terminated arrangement under Prop.
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Treas.
Reg. Section 1.409A-1(c) if the same Participant participated in all
of the arrangements, are terminated; (ii) no payments other than
payments that would be payable under the terms of the arrangements
if the
termination had not occurred are made within twelve (12) months
of the
termination of the arrangements; (iii) all payments are made within
twenty-four (24) months of the termination of the arrangements;
and
(iv) the Company or its Affiliates do not adopt a new arrangement
that would be aggregated with any terminated arrangement under
Prop.
Treas. Reg. Section 1.409A-1(c) if the same Participant participated
in both arrangements, at any time within five (5) years following
the date
of termination of the arrangement.
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(2)
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Change
in Control.
The Company may terminate the Plan within the thirty (30) days
preceding
or the twelve (12) months following a Change in Control (as defined
in
Prop. Treas. Reg. Section 1.409A-2(g)(4)(i)). For purposes of this
paragraph, a Change in Control shall be defined as provided in
Prop.
Treas. Reg. Section 1.409A-2(g)(4)(i). The Plan is considered terminated
under this paragraph only if all substantially similar arrangements
are
terminated, and all participants under such arrangements are required
to
receive all amounts of compensation deferred under the terminated
arrangements within twelve (12) months of the termination of such
arrangements.
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(3)
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Dissolution;
Bankruptcy Court Order.
The Company may terminate the Plan within twelve (12) months of
a
corporate dissolution taxed under Code Section 331, or with the
approval of a bankruptcy court pursuant to 11 U.S.C. Section
403(b)(1)(A), provided that the vested Account Balances are included
in
Participants’ gross incomes in the latest of (i) the calendar year in
which the Plan terminates; (ii) the calendar year in which the amount
is no longer subject to a substantial risk of forfeiture; or
(iii) the first calendar year in which the payment is
administratively practicable.
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10.2
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Accounts
Taxable Under Code Section 409A.
The Plan is intended to constitute a plan of deferred compensation
that
meets the requirements for deferral of income taxation under Code
Section
409A. The Plan Administrator, pursuant to its authority to interpret
the
Plan, may sever from the Plan or any Deferral Election any provision
or
exercise of a right that otherwise would result in a violation
of Code
Section 409A. If, after application of the preceding sentence,
the Plan
Administrator determines that a Participant’s Accounts are taxable or if
such Participant receives a notice of deficiency from the Internal
Revenue
Service due to a violation of Code Section 409A, such Participant
will receive payment from his or her Accounts in a single lump
sum. The
amount of the payment shall not exceed the lesser of (i) the
Participant’s Account Balance or (ii) an amount equal to the amount
of income included in taxable income as a result of such violation,
plus
an additional amount, to the extent permissible under Treasury
Department
regulations, for penalties under Code Section 409A, other taxes
and
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interest
or other costs. Payment under this Section 10.2, including the amount
of any taxes, penalties, interest or other costs, shall be applied
against
the Participant’s Accounts and shall constitute fulfillment of the
Company’s payment obligation to such Participant under the Plan to the
extent of any such payments.
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Article XI
Informal
Funding
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11.1
|
General
Assets.
Obligations established under the terms of the Plan may be satisfied
from
the general funds of the Company, an Affiliate, or a trust described
in
Section 11.2. No Participant, spouse or Beneficiary shall have any
right, title or interest whatever in assets of the Company or an
Affiliate. 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 the Company or its Affiliates
and any Employee, spouse, or Beneficiary. To the extent that any
person
acquires a right to receive payments from the Company hereunder,
such
rights are no greater than the right of an unsecured general creditor
of
the Company.
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11.2
|
Rabbi
Trust.
The Company or an Affiliate may, at its sole discretion, establish
a
grantor trust, commonly known as a rabbi trust, as a vehicle for
accumulating assets to pay benefits under the Plan. Payments under
the
Plan may be paid from the general assets of the Company or from
the assets
of any such rabbi trust. Payment from any such source shall reduce
the
Company’s obligation to the Participant or Beneficiary under the
Plan.
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Article XII
Claims
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12.1
|
Filing
a Claim.
Any controversy or claim arising out of or relating to the Plan
shall be
filed in writing with the Plan Administrator which shall make all
determinations concerning such claim. Any claim filed with the
Plan
Administrator and any decision by the Plan Administrator denying
such
claim shall be in writing and shall be delivered to the Participant
or
Beneficiary filing the claim
(Claimant).
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12.2
|
In
General.
Notice of a denial of benefits will be provided within ninety (90)
days of
the Plan Administrator’s receipt of the Claimant’s claim for benefits. If
the Plan Administrator determines that it needs additional time
to review
the claim, the Plan Administrator will provide the Claimant with
a notice
of the extension before the end of the initial ninety (90)-day
period. The
extension will not be more than ninety (90) days from the end of
the
initial ninety (90)-day period and the notice of extension will
explain
the special circumstances that require the extension and the date
by which
the Plan Administrator expects to make a
decision.
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12.3
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Contents
of Notice.
If a claim for benefits is completely or partially denied, notice
of such
denial shall be in writing and shall set forth the reasons for
denial in
plain language. The notice shall (i) cite the pertinent provisions of
the Plan document and (ii) explain, where appropriate, how the
Claimant can perfect the claim, including a description of any
additional
material or information necessary to complete the claim and why
such
material or information is necessary. The claim denial also shall
include
an explanation of the claims review procedures and the time limits
applicable to such procedures, including a statement of the Claimant’s
right to bring a civil action under Section 502(a) of ERISA following
an adverse decision on review.
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12.4
|
Appeal
of Denied Claims.
A
Claimant whose claim has been completely or partially denied shall
be
entitled to appeal the claim denial by filing a written appeal
with the
Plan Administrator. A Claimant who timely requests a review of
the denied
claim (or his or her authorized representative) may review, upon
request
and free of charge, copies of all documents, records and other
information
relevant to the denial and may submit written comments, documents,
records
and other information relevant to the claim to the Plan Administrator.
All
written comments, documents, records, and other information shall
be
considered “relevant” if the information (i) was relied upon in
making a benefits determination, (ii) was submitted, considered or
generated in the course of making a benefits decision regardless
of
whether it was relied upon to make the decision, or
(iii) demonstrates compliance with administrative processes and
safeguards established for making benefit decisions. The Plan
Administrator may, in its sole discretion and if it deems appropriate
or
necessary, decide to hold a hearing with respect to the claim
appeal.
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(a)
|
In
General.
Appeal of a denied benefits claim must be filed in writing with
the Plan
Administrator no later than sixty (60) days after receipt of the
written
notification of such claim denial. The Plan Administrator shall
make its
decision regarding the merits of the denied claim within sixty
(60) days
following receipt of the appeal (or within one hundred and twenty
(120)
days after such receipt, in a case where there are special circumstances
requiring extension of time for reviewing the appealed claim).
If an
extension of time for reviewing the appeal is required because
of special
circumstances, written notice of the extension shall be furnished
to the
Claimant prior to the commencement of the extension. The notice
will
indicate the special circumstances requiring the extension of time
and the
date by which the Plan Administrator expects to render the determination
on review. The review will take into account comments, documents,
records
and other information submitted by the Claimant relating to the
claim
without regard to whether such information was submitted or considered
in
the initial benefit determination.
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(b)
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Contents
of Notice.
If
a benefits claim is completely or partially denied on review, notice
of
such denial shall be in writing and shall set forth the reasons
for denial
in plain language. The decision on review shall set forth (i) the
specific reason or reasons for the denial, (ii) specific references
to the pertinent Plan provisions on which the denial is based,
(iii) a statement that the Claimant is entitled to receive, upon
request and free of charge, reasonable access to and
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copies
of all documents, records, or other information relevant (as defined
above) to the Claimant’s claim, and (iv) a statement describing any
voluntary appeal procedures offered by the plan and a statement
of the
Claimant’s right to bring an action under Section 502(a) of
ERISA.
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(c)
|
Claims
Appeals Upon Change in Control.
Upon a Change in Control, the members of the Deferred Compensation
Committee, as constituted immediately prior to such Change in Control,
shall continue to act as the Plan
Administrator.
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Upon
such Change in Control, the Company may not remove any member of
the
Deferred Compensation Committee but may replace resigning members
if
2/3rds of the members of the Board of Directors of the Company
and a
majority of Participants and Beneficiaries with Account Balances
consent
to the replacement.
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The
Plan Administrator shall have the exclusive authority at the appeals
stage
to interpret the terms of the Plan and resolve appeals under the
Claims
Procedure.
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The
Company shall, with respect to the Plan Administrator identified
under
this Section, (i) pay all reasonable expenses and fees of the Plan
Administrator, (ii) indemnify the Plan Administrator (including
individual committee members) against any costs, expenses and liabilities
including, without limitation, attorneys’ fees and expenses arising in
connection with the performance of the Plan Administrator hereunder,
except with respect to matters resulting from the Plan Administrator’s
gross negligence or willful misconduct, and (iii) supply full and
timely information to the Plan Administrator on all matters related
to the
Plan, any rabbi trust, Participants, Beneficiaries and Accounts
as the
Plan Administrator may reasonably
require.
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12.5
|
Legal
Action.
A
Claimant may not bring any legal action, including commencement
of any
arbitration, relating to a claim for benefits under the Plan unless
and
until the Claimant has followed the claims procedures under the
Plan and
exhausted his or her administrative remedies under such claims
procedures.
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If
a Participant or Beneficiary prevails in a legal proceeding brought
under
the Plan to enforce the rights of such Participant or any other
similarly
situated Participant or Beneficiary, in whole or in part, the Company
shall reimburse such Participant or Beneficiary for all legal costs,
expenses, attorneys’ fees and such other liabilities incurred as a result
of such proceedings. If the legal proceeding is brought in connection
with
a Change in Control, or a “change in control” as defined in a rabbi trust
described in Section 11.2, the Participant or Beneficiary may file a
claim directly with the trustees for reimbursement of such costs,
expenses
and fees. For purposes of the preceding sentence, the amount of
the claim
shall be treated as if it were an addition to the Participant’s or
Beneficiary’s Account Balance and will be in included in determining the
Company’s trust funding obligation under
Section 11.2.
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12.6
|
Discretion
of Plan Administrator.
All interpretations, determinations and decisions of the Plan
Administrator with respect to any claim shall be made in its sole
discretion, and shall be final and
conclusive.
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Article XIII
General
Conditions
|
13.1
|
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.
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13.2
|
No
Legal or Equitable Rights or Interest.
No Participant or 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 the Company or any of its subsidiaries
or
affiliated companies. The right and power of the Company to dismiss
or
discharge an Employee is expressly reserved. Notwithstanding the
provisions of Section 10.2, the Company makes no representations or
warranties as to the tax consequences to a Participant or a Participant’s
beneficiary(ies) resulting from a deferral of income pursuant to
the
Plan.
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13.3
|
No
Employment Contract.
Nothing contained herein shall be construed to constitute a contract
of
employment between an Employee and the Company or any of its subsidiaries
or affiliated companies.
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13.4
|
Notice.
Any notice or filing required or permitted to be delivered to the
Plan
Administrator under this Plan shall be delivered in writing, in
person, or
through such electronic means as is established by the Plan Administrator.
Notice shall be deemed given as of the date of delivery or, if
delivery is
made by mail, as of the date shown on the postmark on the receipt
for
registration or certification. Written transmission shall be sent
by
certified mail to:
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Ball
Corporation
10
Longs Peak Drive
Broomfield,
CO 80021
Attn:
Deferred Compensation Plan Administrator
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Any
notice or filing required or permitted to be given to a Participant
under
this Plan shall be sufficient if in writing or hand-delivered,
or sent by
mail to the last known address of the
Participant.
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13.5
|
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.
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13.6
|
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 Administrator may elect in its sole discretion
to
construe such invalid or unenforceable provisions in a manner that
conforms to applicable law or as if such provisions, to the extent
invalid
or unenforceable, had not been
included.
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13.7
|
Governing
Law.
To the extent not preempted by ERISA, the laws of the State of
Indiana
shall govern the construction and administration of the
Plan.
|
IN
WITNESS WHEREOF,
the undersigned executed this Plan as of the 26th day of April, 2006 to be
effective as of the Effective Date.
Ball
Corporation
By: David
A. Westerlund (Print Name)
Its:
Executive Vice President, Administration, and Corporate
Secretary (Title)
/s/
David A. Westerlund (Signature)
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