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Exhibit 4.1
THE GLOBAL CROSSING, LTD.
DEFERRED COMPENSATION PLAN
FOR DIRECTORS
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TABLE OF CONTENTS
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Pages
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ARTICLE 1 PURPOSE.......................................................... 1
ARTICLE 2 DEFINITIONS...................................................... 1
ARTICLE 3 ADMINISTRATION OF THE PLAN....................................... 4
3.1 Authority................................................... 4
3.2 Administrator............................................... 5
3.3 Limitation of Liability..................................... 5
3.4 Indemnification............................................. 5
ARTICLE 4 PARTICIPATION.................................................... 5
4.1 Eligibility................................................. 5
4.2 Election to Participate..................................... 5
4.3 Deferrals................................................... 6
4.4 Deferrals of Certain Company Stock.......................... 6
ARTICLE 5 ACCOUNTS......................................................... 6
5.1 Accounts.................................................... 6
5.2 Earnings on Accounts........................................ 7
5.3 Changes in Earnings Crediting Options....................... 8
5.4 Restrictions on Participant Direction....................... 8
5.5 Valuation of Accounts....................................... 8
5.6 Statement of Accounts....................................... 8
5.7 Distributions from Accounts................................. 8
5.8 Trusts...................................................... 8
ARTICLE 6 DISTRIBUTION OF ACCOUNTS......................................... 8
6.1 Election of Distribution Option............................. 8
6.2 Distribution Upon Termination of Service.................... 9
6.3 In-Service Distributions.................................... 9
6.4 Form of Payment............................................. 10
ARTICLE 7 SPECIAL DISTRIBUTIONS............................................ 10
7.1 Financial Emergency......................................... 10
7.2 On Demand Distributions..................................... 10
ARTICLE 8 CLAIMS PROCEDURES................................................ 11
8.1 In General.................................................. 11
8.2 Original Claim.............................................. 11
8.3 Review of Denied Claim...................................... 11
8.4 General Rules............................................... 12
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8.5 Limitations and Exhaustion................................ 12
ARTICLE 9 MISCELLANEOUS.................................................... 13
9.1 Amendment and Termination................................. 13
9.2 Designation of Beneficiary................................ 13
9.3 Limitation of Participant's Right......................... 14
9.4 No Limitation on Corporation Actions...................... 14
9.5 Nonalienation of Benefits................................. 14
9.6 Protective Provisions..................................... 14
9.7 Withholding Taxes......................................... 14
9.8 Unfunded Status of Plan................................... 14
9.9 Severability.............................................. 14
9.10 Governing Law............................................. 15
9.11 Headings.................................................. 15
9.12 Gender, Singular and Plural............................... 15
9.13 Notice.................................................... 15
9.14 Receipt and Release....................................... 15
9.15 Limitation................................................ 15
9.16 Facility of Payment....................................... 15
9.17 Effective Date............................................ 16
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THE GLOBAL CROSSING LTD.
DEFERRED COMPENSATION PLAN
FOR DIRECTORS
ARTICLE 1
PURPOSE
The purpose of the Global Crossing Ltd. Deferred Compensation Plan for
Directors (the "Plan") is to provide a means whereby Global Crossing Ltd.
(hereinafter referred to as the "Company") and its Affiliates may afford
increased financial security, on a tax-favored basis, to members of the Board of
Directors of the Company and its Affiliates who have rendered and continue to
render valuable services to the Company and its Affiliates, by providing for
additional future compensation so that such Eligible Directors be retained and
their efforts on behalf of the Company and its Affiliates encouraged.
ARTICLE 2
DEFINITIONS
2.1 "Account" means the account established and maintained by the
Company for purposes of accounting for deferrals by a Participant of his or her
Board Retainer and Meeting Fees, adjusted periodically to reflect assumed
investment return on such deferrals. An Account will be maintained solely as a
bookkeeping entry by the Company to evidence unfunded obligations of the Company
or an Affiliate.
2.2 "Administrator" means the person or persons to whom the Committee
has delegated the authority to take any or all action under the Plan otherwise
to be taken by the Committee, except as may otherwise be required by law or
under Article 3.
2.3 "Affiliate" means (a) any corporation, partnership, joint venture,
trust, association or other business enterprise which is a member of the same
controlled group of corporations, trades or businesses as the Company within the
meaning of Code Section 414, and (b) any other entity that is designated as an
Affiliate by the Board.
2.4 "Beneficiary" means the person or persons designated as such in
accordance with Section 11.2.
2.5 "Board" means the Board of Directors of the Company, as constituted
from time to time.
2.6 "Board Retainer" means the annual fee retainer earned by an Eligible
Director for service on the Board.
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2.7 "Change in Control" means:
(a) any Person (other than a Person holding securities representing
ten percent (10%) or more of the combined voting power of the Company's
outstanding securities as of July 1, 1998, the Company, any trustee or other
fiduciary holding securities under any of the Company's employee benefit plans,
or any company owned, directly or indirectly, by the Company's shareholders in
substantially the same proportions as their ownership of the stock of the
Company) becomes the Beneficial Owner (as such term is defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended), directly or indirectly,
of the securities of the Company representing thirty percent (30%) or more of
the combined voting power of then outstanding securities of the Company;
(b) during any period of twenty-four (24) months (not including any
period prior to July 1, 1998), individuals who at the beginning of such period
constitute the Board, and any new director (other than (i) a director nominated
by a Person who has entered into an agreement with the Company to effect a
transaction described in clause (a), (c) or (d) of this definition, (ii) a
director nominated by a Person (including the Company) who publicly announces an
intention to take or to consider taking actions (including, but not limited to,
an actual or threatened proxy contest) which if consummated would constitute a
Change in Control or (iii) a director nominated by any Person who is the
Beneficial Owner, directly or indirectly, of the securities of the Company
representing ten percent (10%) or more of the combined voting power of the
securities of the Company) whose election by the Board or nomination for
election by the Company's shareholders was approved in advance by a vote of at
least two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at least
a majority thereof;
(c) the consummation of any transaction or series of transactions
under which the Company is merged or consolidated with any other company, other
than a merger or consolidation which would result in the Company's shareholders
immediately prior thereto continuing to own (either by remaining outstanding or
by being converted into voting securities of the surviving entity) more than
sixty five percent (65%) of the combined voting power of the voting securities
of the Company or such surviving entity outstanding immediately after such
merger or consolidation in the same proportion such shareholders held the voting
securities of the Company immediately prior to the merger or consolidation; or
(d) the Company's complete liquidation or the sale or disposition by
the Company of all or substantially all of the Company's assets, other than the
Company's liquidation into a wholly-owned subsidiary.
2.8 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
2.9 "Code Section 162(m) Limitation" means the limitation imposed under
Section 162(m) of the Code, as amended from time to time, on the amount of
compensation that may be deducted by the Company for Federal income tax
purposes.
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2.10 "Committee" means the Compensation Committee of the Board or such
other individuals as may be designated from time to time by the Board. Except
as otherwise may be required under Article 3 or by applicable law, any function
of the Committee may be delegated to the Administrator.
2.11 "Company" means Global Crossing Ltd. and any successor to its business
or assets, by operation of law or otherwise.
2.12 "Company Stock Account" means the assumed investment alternative under
which all deferrals and transfers, if any, of exercised stock options shall be
deemed invested. Any amounts deemed invested in the Company Stock Account shall
be valued as if deemed invested in Company common stock, and cannot be
diversified into any other Earnings Crediting Option. Amounts deemed invested
in the Company Stock Account shall be distributed solely in shares of Company
common stock.
2.13 "Disability" means a disability of a nature and duration that, in the
determination of the Committee, would qualify a Participant for benefits under
the Global Crossing Ltd. Group Long-Term Disability Insurance Plan, as amended
from time to time, if he or she were eligible to participate and participated in
such plan.
2.14 "Earnings Crediting Options" means the options elected by the
Participant from time to time pursuant to which earnings are credited to the
Participant's Account. The Earnings Crediting Options shall be based upon
actual investments designated by the Committee.
2.15 "Effective Date" means the effective date of the Plan, which is June
1, 2000.
2.16 "Eligible Director" means a member of the Board who is not an employee
of the Company or any Affiliate.
2.17 "Enrollment Agreement" means the authorization form which an Eligible
Director files with the Committee or its designee to participate in the Plan
with respect to a Plan Year.
2.18 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
2.19 "Initial Enrollment Agreement" means the Enrollment Agreement with
respect to the very first year of an Eligible Director's Plan Participation.
2.20 "In-Service" means while a Participant is in active Service.
2.21 "Meeting Fees" means fees earned by an Eligible Director for service
on the Board and includes fees for attending, either in person or by telephone,
meetings of the Board and any duly authorized committee thereof.
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2.22 "Participant" means an Eligible Director who has filed a completed and
executed Initial Enrollment Agreement with the Committee or its designee and who
is participating in the Plan in accordance with the provisions of Article 4.
2.23 "Plan" means the Global Crossing Ltd. Deferred Compensation Plan
for Directors, as amended from time to time.
2.24 "Plan Year" means the calendar year, except that the first Plan Year
shall run from June 1, 2000, through December 31, 2000.
2.25 "Service" means the period of time during which an individual is an
active member of the Board or is otherwise providing services to the Company or
any Affiliate in any capacity.
2.26 "Termination Date" means the date a Participant ceases to provide
services to the Company or any Affiliate in any capacity and for any reason.
2.27 "Trust" means any trust or trusts established or designated by the
Company to hold assets in connection with the Plan; provided, however, that the
assets of such trust(s) shall remain subject to the claims of the general
creditors of the Company in the event of an insolvency of the Company or, if
applicable, its Affiliate(s). The Company or any Affiliate, as the case may be,
shall be considered "insolvent" for purposes of this Plan and any Trust if (a)
the Company or the Affiliate is unable to pay its debts as they become due, or
(b) the Company or the Affiliate is subject to a pending proceeding as a debtor
under the United States Bankruptcy Code.
2.28 "Valuation Date" means a date on which a Participant's Account is
valued, which shall be the last business day of each calendar month, and such
other dates as may be specified by the Committee.
ARTICLE 3
ADMINISTRATION OF THE PLAN
3.1 Authority. Both the Committee and the Administrator (subject to the
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ability of the Committee to restrict the Administrator) shall administer the
Plan in accordance with its terms, and shall have all powers necessary to
accomplish such purpose, including the power and authority to construe and
interpret the Plan, to define the terms used herein, to prescribe, amend and
rescind rules and regulations, agreements, forms, and notices relating to the
administration of the Plan, and to make all other determinations necessary or
advisable for the administration of the Plan. Any actions of the Committee or
the Administrator with respect to the Plan shall be conclusive and binding upon
all persons interested in the Plan, except that any action of the Administrator
will not be binding on the Committee. The Committee and Administrator may each
appoint agents and delegate thereto powers and duties under the Plan, except as
otherwise limited by the Plan.
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3.2 Administrator. The Administrator shall be appointed by, shall remain
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in office at the will of, and may be removed, with or without cause, by the
Committee. The Administrator may resign at any time. The Administrator shall
not be entitled to act on or decide any matter relating solely to himself or
herself or any of his or her rights or benefits under the Plan. The
Administrator shall not receive any special compensation for serving in his or
her capacity as Administrator but shall be reimbursed for any reasonable
expenses incurred in connection therewith. No bond or other security need be
required of the Administrator in any jurisdiction.
3.3 Limitation of Liability. Each member of the Committee and the
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Administrator shall be entitled to, in good faith, rely or act upon any report
or other information furnished to him or her by any officer or other employee of
the Company or any Affiliate, the Company's independent certified public
accountants, or any executive compensation consultant, legal counsel, or other
professional retained by the Company to assist in the administration of the
Plan. To the maximum extent permitted by law, no member of the Committee or the
Administrator, nor any person to whom ministerial duties have been delegated,
shall be liable to any person for any action taken or omitted in good faith in
connection with the interpretation and administration of the Plan.
3.4 Indemnification. To the maximum extent permitted by law, members of
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the Committee and the Administrator shall be fully indemnified and protected by
the Company with respect to any action taken or omitted in good faith in
connection with the interpretation or administration of the Plan.
ARTICLE 4
PARTICIPATION
4.1 Eligibility. The Committee will notify each person of his or her
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eligibility to participate in the Plan.
4.2 Election to Participate. Except as otherwise provided by the
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Committee, any Eligible Director may enroll in the Plan effective as of the
first day of any Plan Year, by filing a completed and fully executed Initial
Enrollment Agreement with the Committee prior to the beginning of such Plan
Year. Following the initial Plan Year of participation, a Participant may elect
to defer Board Retainer and Meeting Fees to be earned in any subsequent Plan
Year by filing an Enrollment Agreement with the Committee prior to the beginning
of each such Plan Year. With respect to the first Plan Year, such Initial
Enrollment Agreement must be filed with the Committee within thirty (30) days
following the later of the date on which such individual first becomes and
Eligible Director or his or her receipt of enrollment forms and materials from
the Committee. Notwithstanding the foregoing, however, an individual who first
becomes an Eligible Director after the start of a Plan Year may enroll in the
Plan by filing a completed and fully executed Initial Enrollment Agreement with
the Committee as soon as practicable (but in no event later than thirty (30)
days) following the date on which such individual first becomes an Eligible
Director.
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4.3 Deferrals. Pursuant to an Enrollment Agreement, an Eligible
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Director (a) shall elect the percentages (in whole percentages not greater than
one hundred percent (100%)) or flat dollar amounts by which the Board Retainer
and Meeting Fees, respectively, of such Eligible Director for the Plan Year will
be reduced, and (b) shall provide such other information as the Committee shall
require. The Initial Enrollment Agreement shall also contain an election of the
time and manner of distribution of the Participant's Account. With respect to
the first Plan Year, Participants may make deferrals only with respect to such
portion of the Board Retainer and Meeting Fees to be paid with respect to the
period on or after June 1, 2000. The maximum deferral percentages set forth
above may be changed by the Committee. Notwithstanding anything in this Plan to
the contrary, any election by a Participant to reduce his or her Board Retainer
or Meeting Fees for any Plan Year which results in the reduction of such Board
Retainer and Meeting Fees, in the aggregate, by an amount which is less than
Twenty-Five Hundred Dollars ($2,500), or such other amount as the Committee may
determine from time to time, shall not be given effect. In no event may a
Participant's deferral elections result in a reduction of his or her nondeferred
compensation for the period to an amount below that necessary to satisfy
applicable income tax withholding, if any, for nondeferred compensation.
4.4 Deferrals of Certain Company Stock. The Committee, in its sole
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discretion, may permit a Participant to defer, consistent with the Plan, Company
common stock issuable pursuant to certain exercised stock options, provided the
plan(s) under the which the stock options were granted anticipate and provide
for the deferral of receipt of stock under such plan(s) through such a transfer.
Prior to any such deferral, the Participant must provide evidence satisfactory
to the Committee that all criteria under the applicable stock option plan for
the deferral of receipt of stock that would otherwise occur under such plan(s)
have been satisfied. Upon any deferral under this Section 4.4, the
Participant's interest in the deferred stock shall be represented solely by
units of Company common stock and shall be held in the Company Stock Account.
Distribution of the units of Company common stock representing any deferral
under this Section 4.4 shall occur in accordance with the provisions of Articles
6 and 7 of this Plan.
ARTICLE 5
ACCOUNTS
5.1 Accounts. The Committee shall establish and maintain a separate
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Account for each Participant. The amount by which Board Retainer and Meeting
Fees is reduced pursuant to Section 4.3 shall be credited by the Company to the
Participant's Account no later than the first day of the month in which such
Board Retainer and Meeting Fees would otherwise have been paid. Any amount once
taken into account as Board Retainer and Meeting Fees for purposes of this Plan
shall not be taken into account thereafter. The Participant's Account shall be
reduced by the amount of any payments made by the Company to the Participant or
the Participant's Beneficiary pursuant to this Plan. The Account of each
Participant shall be fully (100%) vested and nonforfeitable at all times (except
for early distribution penalties described in Section 7.2).
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5.2 Earnings on Accounts.
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(a) Prior to a Participant's Death. As of each Valuation Date
------------------------------
occurring prior to a Participant's death, a Participant's Account shall be
credited with earnings (and losses) in accordance with the Earnings Crediting
Options elected by the Participant from time to time. Participants may allocate
their Account among the Earnings Crediting Options available under the Plan only
in whole percentages of not less than one percent (1%). The rate of return,
positive or negative, credited under each Earnings Crediting Option will be
based upon the actual performance of the underlying investments upon which the
Earnings Crediting Options are based, and shall equal the total return of such
investment, net of any charges, including, without limitation, money management
fees and fund expenses, as determined by the Company. Notwithstanding the
foregoing, however, the Committee reserves the right, on a prospective basis, to
add or delete Earnings Crediting Options, provided, however, that any such
change in the Earnings Crediting Options available under the Plan will only
affect the rate at which earnings will be credited to Participants' Accounts in
the future, and will not affect the value of Participants' existing Accounts,
including any earnings credited under the Plan up to the date of such change.
Notwithstanding that the rates of return credited to Participants' Accounts
under the Earnings Crediting Options are based upon the actual performance of
the investments, the Company shall not be obligated to invest any Board Retainer
and Meeting Fees deferred by Participants under this Plan, or any other amounts,
in any such investments.
(b) Following a Participant's Death. Effective as of the Valuation
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Date occurring on or immediately following the death of a Participant (whether
death occurs prior to or following termination of Service), his or her Account
shall no longer be valued in accordance with the Earnings Crediting Options but
shall thereafter be credited with interest based on the One-Year U.S. Treasury
Note Rate for the last business day of the month preceding the date of death,
which rate shall be changed, as of the first Valuation Date of each calendar
year thereafter until full distribution of the Participant's Account has
occurred, to the One-Year U.S. Treasury Note Rate for the last business day of
the immediately preceding calendar year.
(c) Company Stock. Notwithstanding Sections 5.2(a) and (b) above, at
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all times a Participant's Company Stock Account shall reflect the actual number
of shares of Company common stock deemed held in such Participant's Account.
The value of such Company common stock shall be determined based on the closing
NASDAQ price for a share of Company common stock on each Valuation Date. A
Participant's deemed investment in Company common stock shall be adjusted to
reflect stock splits, combinations or subdivisions of shares, recapitalization
or other stock-related events that affect the number of shares of Company common
stock. Any such stock-related event shall be reflected in the Participant's
Company Stock Account as of the beginning of the first day of the month in which
it occurs. Dividends paid on Company common stock, if any, shall be deemed paid
in cash and deferred into the non-Company Stock Account portion of a
Participant's Account, and shall be allocated among such Participant's Earnings
Crediting Options in accordance with such Participant's investment elections in
effect as of the date of payment of such dividend and be credited with earnings
in accordance with Section 5.2(a) or (b), whichever is applicable.
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5.3 Changes in Earnings Crediting Options. Subject to rules established
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by the Committee, a Participant may change the Earnings Crediting Options to
which his or her Account is allocated, effective as of the first day of the
calendar month next following the receipt by the Committee of the Participant's
election, in such form as may be specified by the Committee. Each such change
may include (a) reallocation of the Participant's existing Account in increments
of one percent (1%) of the amount allocated to a particular Earnings Crediting
Option, or such minimum or maximum amount as may be established by the
Committee, and/or (b) change in investment allocation of amounts to be credited
to the Participant's Account in the future, as the Participant may elect.
Notwithstanding any of the foregoing, deferrals, if any, of Company common stock
issuable pursuant to certain exercised stock options always shall be deemed to
be invested in the Company Stock Account and may not be allocated or reallocated
to any other Earnings Crediting Option.
5.4 Restrictions on Participant Direction. The provisions of Sections
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5.2 and 5.3 notwithstanding, the Committee may restrict or prohibit reallocation
of amounts deemed invested in specified Earnings Crediting Options, and subject
such amounts to other restrictions, in order to conform to restrictions
applicable to any amount deferred under the Plan and resulting in such deemed
investment, to comply with any applicable law or regulation, or for such other
purpose as the Committee may determine is not inconsistent with the Plan.
5.5 Valuation of Accounts. As of each Valuation Date, a Participant's
---------------------
Account shall be adjusted to reflect all amounts theretofore credited to such
Account, including any earnings (positive or negative) deemed to be earned on
such Account in accordance with Section 5.2 as of such Valuation Date, less the
amounts theretofore deducted from such Account.
5.6 Statement of Accounts. The Committee shall provide to each
---------------------
Participant, not less frequently than semiannually, a statement in such form as
the Committee deems desirable setting forth the balance standing to the credit
of each Participant in his or her Account.
5.7 Distributions from Accounts. Any distribution made to or on behalf of
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a Participant from his or her Account in an amount which is less than the entire
balance of any such Account shall be made pro rata from each of the Earnings
Crediting Options to which such Account is then allocated.
5.8 Trusts. The Committee may, in its discretion, establish one or more
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Trusts and deposit therein cash or other property in amounts not exceeding the
amount of the Company's obligations with respect to a Participant's Account
established under this Section 5.
ARTICLE 6
DISTRIBUTION OF ACCOUNTS
6.1 Election of Distribution Option. In the Initial Enrollment Agreement
-------------------------------
filed by an Eligible Director with the Committee for participation in the Plan,
such Eligible Director shall elect the manner in which the amounts to be
deferred to his or her Account will be distributed. Amounts deferred shall not
be distributable until the Participant's termination of Service, in which
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case distribution shall occur in accordance with Section 6.2. Once an Initial
Enrollment Agreement, properly completed, is received by the Company, the
elections of the Participant with respect to manner of payment (i.e., lump sum
or number of periodic payments) shall be irrevocable; provided, however, that
the Committee may, in its discretion, permit a Participant to change the manner
of distribution by filing a later election form; and provided, further, that any
election to change the manner of a distribution must be made (i) one time only;
(ii) only while the Participant is an active Eligible Director; and (iii) at
least one (1) full Plan Year prior to the date such amounts otherwise would be
payable. Notwithstanding the above, an Eligible Director shall be entitled, in
his or her Initial Enrollment Agreement, to elect one or more future Valuation
Dates on which such Participant shall receive In-Service Distribution(s), in
accordance with Section 6.3.
6.2 Distributions Upon Termination of Service. In the case of a
-----------------------------------------
Participant whose Service with the Employer terminates for any reason, including
death or Disability, all amounts in such Participant's Account shall be
distributed to the Participant (or, in the event of the Participant's death, to
his or her Beneficiary) (a) in a lump sum as soon as practicable following the
Participant's Termination Date or (b) in no more than five (5) annual
installments, as elected by the Participant in his or her Initial Enrollment
Agreement. Any lump sum benefit payable in accordance with this Section 6.2
shall be paid not later than January 31 of the Plan Year following the Plan Year
in which occurs the Participant's Termination Date, in an amount equal to the
value of such Account as of the Valuation Date immediately preceding the date of
payment. Annual installment payments, if any, shall commence not later than
January 31 of the Plan Year following the Plan Year in which occurs the
Participant's Termination Date in an amount equal to (i) the value of such
portion of the Account as of the Valuation Date immediately preceding the date
of payment, divided by (ii) the number of annual installment payments elected by
the Participant in his or her Initial Enrollment Agreement. The remaining annual
installments shall be paid not later than January 31 of each succeeding year in
an amount equal to (x) the value of such Account as of the Valuation Date
immediately preceding the date of payment divided by (y) the number of
installments remaining. In the event a Participant dies following the
termination of his or her Service, the Participant's remaining Account balance
shall be paid, or shall continue to be paid, to the Participant's Beneficiary,
at such times and in such amounts as they would have been paid to the
Participant had he or she survived.
6.3 In-Service Distributions. (a) In a Participant's Initial Enrollment
------------------------
Agreement, a Participant may elect one or more future Valuation Dates on which
such Participant shall receive In-Service Distribution(s), payable in one lump
sum, of either (i) a specified percentage of such Participant's Account as of
such date or (ii) a specified dollar amount, which percentage(s) or dollar
amount(s) shall be set forth on the Initial Enrollment Agreement; provided,
however, that (A) the first date elected for such an In-Service Distribution may
not occur prior to the first Valuation Date following the Participant's
completion of three (3) full Plan Years of Participation, (B) only one such In-
Service Distribution may occur in any one Plan Year, and (C) no In-Service
Distribution shall include any amounts (or earnings thereon) which have been
deferred for fewer than three (3) full Plan Years.
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(b) The In-Service Distribution elections of the Participant under
this Section 6.3 shall be irrevocable; provided, however, that a Participant may
extend his or her In-Service Distribution elections to a Valuation Date(s) no
earlier than two (2) full Plan Years following the originally designated date(s)
or revoke such In-Service Distribution elections in their entirety by filing a
later election form with the Committee, and provided, further, that such an
extension or revocation election may be made (i) one time only; (ii) only while
the Participant is in active Service at the Company or an Affiliate; and (iii)
at least one (1) full Plan Year prior to the Valuation Date such amounts
otherwise would be payable.
(c) Notwithstanding the foregoing, however, to the extent a
Participant's compensation (as defined in Code Section 162(m) and any
regulations promulgated thereunder) in any Plan Year in which the Participant is
to receive a distribution of all or a portion of his Account is subject to the
Code Section 162(m) Limitation, the amount of any such distribution from the
Participant's Account shall be reduced so as not to exceed such limitation. The
remaining balance of such portion of the Participant's Account not distributed
to the Participant because of the immediately preceding sentence shall be
distributed to the Participant in succeeding Plan Years to the maximum extent
possible without exceeding the Code Section 162(m) Limitation for such years,
until such remaining balance is fully distributed.
6.4 Form of Payment. All distributions and withdrawals, other than those
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made from the Company Stock Account, shall be made in cash. Distributions from
the Company Stock Account shall be made in shares of Company common stock.
ARTICLE 7
SPECIAL DISTRIBUTIONS
7.1 Financial Emergency. Other provisions of the Plan notwithstanding
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(except for Section 6.3(c)), if, upon the written application of a Participant,
the Committee determines that the Participant has a financial emergency of such
a substantial nature and beyond the individual's control that payment of amounts
previously deferred under the Plan is warranted, the Committee may direct the
immediate lump sum payment to the Participant of the applicable portion of the
Participant's Account. If a Participant receives a distribution due to financial
emergency, such Participant's deferrals under Section 4 will then cease, and the
Participant may not again elect to defer Board Retainer or Meeting Fees under
this Plan until the enrollment period for the Plan Year that begins at least
twelve (12) months after such distribution. A Beneficiary of a deceased
Participant also may request an early distribution for financial emergency.
7.2 On Demand Distributions. Prior to the date otherwise scheduled for
-----------------------
payment under the Plan, a Participant may, subject to Section 6.3(c), request a
withdrawal of all or a portion of his or her Account by filing a request with
the Committee specifying the amount of the Account to be so withdrawn. Payment
of such amount, adjusted by the amount to be forfeited pursuant to paragraph (a)
below, shall be made as of the Valuation Date as soon as administratively
practicable after such request is received, and shall be subject to the
following:
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(a) A penalty equal to ten percent (10%) of the requested withdrawal
amount shall be debited to the Participant's Account and permanently forfeited
to the Employer.
(b) Any request submitted under this Section 7.2 following the
termination of the Participant's Service for any reason (including his or her
Retirement) must be for withdrawal of the Participant's entire remaining Account
balance, which shall then be paid to the Participant in a lump sum.
(c) Any deferral election under Section 4 in effect at the time a
Participant receives a distribution in accordance with this Section 7.2 shall
thereafter be void and all deferrals of such Participant to this Plan shall
immediately cease.
(d) The Participant shall not be eligible to file a new deferral
election until the enrollment period for the Plan Year that begins at least
twelve (12) months after such distribution.
(e) The minimum amount payable under this Section 7.2 shall be the
greater of $5,000 or five percent (5%) of a Participant's Account, or the entire
Account balance if less.
ARTICLE 8
CLAIMS PROCEDURES
8.1 In General. The claims procedure set forth in this Article 8 shall be
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the exclusive administrative procedure for the disposition of claims for
benefits arising under this Plan.
8.2 Original Claim. Any person may, if he or she so desires, file with
--------------
the Committee a written claim for benefits under this Plan. Within ninety (90)
days after the filing of such a claim, the Committee shall notify the claimant
in writing whether the claim is upheld or denied in whole or in part or shall
furnish the claimant a written notice describing specific special circumstances
requiring a specified amount of additional time (but not more than one hundred
eighty (180) days from the date the claim was filed) to reach a decision on the
claim. If the claim is denied in whole or in part, the Committee shall state in
writing:
(a) the specific reasons for the denial;
(b) the specific references to the pertinent provisions of the Plan
on which the denial is based;
(c) a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such material or
information is necessary; and
(d) an explanation of the claims review procedure set forth in this
Article 8.
8.3 Review of Denied Claim. Within sixty (60) days after receipt of
----------------------
notice that the claim has been denied in whole or in part, the claimant may file
with the Committee a written
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request for a review and may, in conjunction therewith, submit written issues
and comments. Within sixty (60) days after the filing of such a request for
review, the Committee shall notify the claimant in writing whether, upon review,
the claim was upheld or denied in whole or in part or shall furnish the claimant
a written notice describing special circumstances requiring a specified amount
of additional time (but not more than one hundred twenty (120) days from the
date the request for review was filed) to reach a decision on the request for
review.
8.4 General Rules.
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(a) No inquiry or question shall be deemed to be a claim or a request
for a review of a denied claim unless made in accordance with the claims
procedure set forth herein. The Committee may require that any claim for
benefits and any request for a review of a denied claim be filed on forms to be
furnished by the Committee on request.
(b) All decision on original claims or denied claims shall be made by
the Committee.
(c) The Committee may, in its discretion, hold one or more hearings
on a claim or a request for a review of a denied claim.
(d) A claimant may be represented by a lawyer or other representative
(at the claimant's own expense), but the Committee reserves the right to require
the claimant to furnish written authorization. A claimant's representative shall
be entitled, upon request, to copies of all notices given to the claimant.
(e) The decision of the Committee on a claim or on a request for
review of a denied claim shall be served on the claimant in writing. If a
decision or notice is not received by a claimant within the time specified, the
claim or request for a review of a denied claim shall be deemed to have been
denied.
(f) Prior to filing a claim or a request for review of a denied
claim, the claimant or his representative shall have a reasonable opportunity to
review a copy of the Plan and all other pertinent documents held by the
Committee.
(g) The Committee may permanently or temporarily delegate its
responsibilities under this claims procedure to an individual or a committee of
individuals.
8.5 Limitations and Exhaustion.
--------------------------
(a) Limitations. No claim shall be considered under these
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administrative claims procedures unless it is filed with the Committee within
one (1) year after the claimant knew (or reasonably should have known) of the
principal facts on which the claim is based. Every untimely claim shall be
denied by the Committee without regard to the merits of the claim. No legal
action (whether arising under Section 502 or Section 510 of ERISA or under any
other legal statute or non-statutory law) may be brought by any claimant on any
matter pertaining to
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this Plan unless the legal action is commenced in the proper forum before the
earlier of (i) two (2) years after the claimant knew (or reasonably should have
known) of the principal facts on which the claim is based, or (ii) ninety (90)
days after the claimant has exhausted these administrative claims procedures.
Knowledge of all facts that a Participant knew (or reasonably should have known)
shall be imputed to each claimant who is or claims to be a Beneficiary of the
Participant (or otherwise claims to derive an entitlement by reference to a
Participant) for the purpose of applying the one (1) year and two (2) year
periods.
(b) Exhaustion Required. The exhaustion of these administrative
-------------------
claims procedures is mandatory for resolving every claim and dispute arising
under the Plan. As to such claims and disputes:
(i) no claimant shall be permitted to commence any legal action
relating to any such claim or dispute (whether arising under Section 502 or 510
of ERISA or under any other statute or non-statutory law) unless a timely claim
has been filed under these administrative procedures and these administrative
procedures have been exhausted; and
(ii) in any such legal action, all explicit and implicit
determinations by the Committee (including, but not limited to, determinations
as to whether the claim was timely filed) shall be afforded the maximum
deference permitted by law.
ARTICLE 9
MISCELLANEOUS
9.1 Amendment and Termination. The Plan may be amended, suspended,
-------------------------
discontinued or terminated at any time by the Board, or by any other entity
authorized by the Board, provided, however, that no such amendment, suspension,
discontinuance or termination shall reduce the balance of a Participant's
Account, as of the effective date of such amendment, suspension, discontinuance
or termination. In the event of termination of the Plan, the Board may require
such amounts to be distributed after the termination, on a date or dates
selected by the Board.
9.2 Designation of Beneficiary. Each Participant may designate a
--------------------------
Beneficiary or Beneficiaries (which Beneficiary may be an entity other than a
natural person) to receive any payments which may be made hereunder following
the Participant's death. Such designation may be changed or canceled at any time
without the consent of any such Beneficiary. Any such designation, change or
cancellation must be made in a form approved by the Committee and shall not be
effective until received by the Committee, or its designee. If no Beneficiary
has been named, or the designated Beneficiary or Beneficiaries shall have
predeceased the Participant, the Beneficiary shall be the Participant's estate.
If a Participant designates more than one Beneficiary, the interests of such
Beneficiaries shall be paid in equal shares, unless the Participant has
specifically designated otherwise.
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9.3 Limitation of Participant's Right. Nothing in this Plan shall be
---------------------------------
construed as conferring upon any Participant any right to be retained as a non-
employee Director of the Company or any Affiliate or to otherwise continue in
Service with the Company or any Affiliate.
9.4 No Limitation on Corporate Actions. Nothing contained in the Plan
----------------------------------
shall be construed to prevent the Company from taking any corporate action which
is deemed by it to be appropriate or in its best interest. No Participant,
Beneficiary or other person shall have any claim against the Company as a result
of any such action.
9.5 Nonalienation of Benefits. Except as expressly provided herein, no
-------------------------
Participant or Beneficiary shall have the power or right to transfer (otherwise
than by will or the laws of descent and distribution), alienate, or otherwise
encumber the Participant's interest under the Plan. The Company's obligations
under this Plan are not assignable or transferable except to (a) a corporation
which acquires all or substantially all of the Company's assets or (b) any
corporation into which the Company may be merged or consolidated. The provisions
of the Plan shall inure to the benefit of each Participant and the Participant's
Beneficiaries, heirs, executors, administrators or successors in interest.
9.6 Protective Provisions. Each Participant shall cooperate with the
---------------------
Company by furnishing any and all information requested by the Company in order
to facilitate the payment of benefits hereunder, taking such physical
examinations as the Company may deem necessary and taking such other relevant
action as any be requested by the Company. If a Participant refuses to
cooperate, the Company shall have no further obligation to the Participant under
the Plan, other than payment to such Participant of the then current balance of
the Participant's Accounts.
9.7 Withholding Taxes. The Company may make such provisions and take such
-----------------
action as it may deem necessary or appropriate for the withholding of any taxes
which the Company is required by any law or regulation of any governmental
authority, whether Federal, state or local, to withhold in connection with any
benefits under the Plan, including, but not limited to, the withholding of
appropriate sums from any amount otherwise payable to the Participant (or his
Beneficiary). Each Participant, however, shall be responsible for the payment of
all individual tax liabilities relating to any such benefits.
9.8 Unfunded Status of Plan. The Plan is intended to constitute an
-----------------------
"unfunded" plan of deferred compensation for Participants. Benefits payable
hereunder shall be payable out of the general assets of the Company, and no
segregation of any assets whatsoever for such benefits shall be made, except
that the Company or an Affiliate may form a grantor trust or trusts to assist it
in meeting its obligations hereunder. With respect to any payments not yet made
to a Participant, nothing contained herein shall give any such Participant any
rights that are greater than those of a general creditor of the Company.
9.9 Severability. If any provision of this Plan is held unenforceable,
------------
the remainder of the Plan shall continue in full force and effect without regard
to such unenforceable provision and shall be applied as though the unenforceable
provision were not contained in the Plan.
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9.10 Governing Law. The Plan shall be construed in accordance with and
-------------
governed by the laws of the State of New York, without reference to the
principles of conflict of laws.
9.11 Headings. Headings are inserted in this Plan for convenience of
--------
reference only and are to be ignored in the construction of the provisions of
the Plan.
9.12 Gender, Singular and Plural. All pronouns and any variations thereof
---------------------------
shall be deemed to refer to the masculine, feminine, or neuter, as the identity
of the person or persons may require. As the context may require, the singular
may be read as the plural and the plural as the singular.
9.13 Notice. Any notice or filing required or permitted to be given to the
------
Committee under the Plan shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail, to such person or entity as the
Committee may designate from time to time. Such notice shall be deemed given as
to 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.
9.14 Receipt and Release. Payments (in any form) to any Participant or
-------------------
Beneficiary in accordance with the provisions of the Plan shall, to the extent
thereof, be in full satisfaction of all claims for the awards or other
compensation deferred and relating to the Account to which the payments relate
against the Company or any Affiliate, the Administrator, or the Committee, and
the Committee may require such Participant or Beneficiary, as a condition to
such payments, to execute a receipt and release to such effect.
9.15 Limitation. A Participant and his or her Beneficiary shall assume all
----------
risk in connection with any decrease in value of the Participant's Account, and
neither the Company, the Committee nor the Administrator shall be liable or
responsible thereof.
9.16 Facility of Payment. In case of the legal disability, including
-------------------
minority, of a Participant or Beneficiary entitled to receive any distribution
under this Plan, if the Committee shall be advised of the existence of such
condition, payments due hereunder shall be made:
(a) to the duly appointed guardian, conservator or other legal
representative of such Participant or Beneficiary; or
(b) to a person or institution entrusted with the care or maintenance
of the incompetent or disabled Participant or Beneficiary, provided such person
or institution has satisfied the Committee that the payment will be used for the
best interest and assist in the care of such Participant or Beneficiary, and
provided further, that no prior claim for said payment has been made by a duly
appointed guardian, conservator or other legal representative of such
Participant or Beneficiary.
Any payment made in accordance with the foregoing provisions of this section
shall constitute a complete discharge of any liability or obligation of the
Company or any Affiliate therefor.
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9.17 Effective Date. The Plan shall be effective as of June 1, 2000.
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16
