International Game Technology
Deferred Compensation Plan
Master Plan Document
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Effective September 1, 1999
Copyright (C) 1999
By Compensation Resource Group, Inc.
All Rights Reserved
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International Game Technology
Deferred Compensation Plan
Master Plan Document
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TABLE OF CONTENTS
Page
Purpose .......................................................1
ARTICLE 1 Definitions............................................1
ARTICLE 2 Selection, Enrollment, Eligibility.....................5
2.1 Selection by Committee.................................5
2.2 Enrollment Requirements................................6
2.3 Eligibility; Commencement of Participation.............6
2.4 Termination of Participation and/or Deferrals..........6
ARTICLE 3 Deferral Commitments/Profit Sharing Restoration
Contribution/Crediting/Taxes.........................6
3.1 Minimum Deferrals......................................6
3.2 Maximum Deferral.......................................7
3.3 Election to Defer; Effect of Election Form.............7
3.4 Withholding of Annual Deferral Amounts.................8
3.5 Annual Company Contribution Amount.....................8
3.6 Annual Profit Sharing Restoration
Contribution Amount..................................8
3.7 Vesting................................................8
3.8 Crediting/Debiting of Account Balances.................9
3.9 FICA and Other Taxes..................................11
ARTICLE 4 Short-Term Payout; Withdrawal Election................12
4.1 Short-Term Payout.....................................12
4.2 Other Benefits Take Precedence Over Short-Term........12
4.3 Withdrawal Election...................................12
ARTICLE 5 Retirement Benefit....................................13
5.1 Retirement Benefit....................................13
5.2 Payment of Retirement Benefit.........................13
5.3 Death Prior to Completion of Retirement Benefit.......13
ARTICLE 6 Pre-Retirement Survivor Benefit.......................13
6.1 Pre-Retirement Survivor Benefit.......................13
6.2 Payment of Pre-Retirement Survivor Benefit............13
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ARTICLE 7 Termination Benefit.....................................14
7.1 Termination Benefit.....................................14
7.2 Payment of Termination Benefit..........................14
ARTICLE 8 Disability Waiver and Benefit...........................14
8.1 Disability Waiver.......................................14
8.2 Continued Eligibility; Disability Benefit...............14
ARTICLE 9 Beneficiary Designation.................................15
9.1 Beneficiary.............................................15
9.2 Beneficiary Designation; Change; Spousal Consent........15
9.3 Acknowledgement.........................................15
9.4 No Beneficiary Designation..............................15
9.5 Doubt as to Beneficiary.................................15
9.6 Discharge of Obligations................................15
ARTICLE 10 Leave of Absence........................................15
10.1 Paid Leave of Absence...................................15
10.2 Unpaid Leave of Absence.................................16
ARTICLE 11 Termination, Amendment or Modification..................16
11.1 Termination.............................................16
11.2 Amendment...............................................16
11.3 Plan Agreement..........................................17
11.4 Effect of Payment.......................................17
ARTICLE 12 Administration..........................................17
12.1 Committee Duties........................................17
12.2 Administration Upon Change In Control...................17
12.3 Agents..................................................18
12.4 Binding Effect of Decisions.............................18
12.5 Indemnity of Committee..................................18
12.6 Employer Information....................................18
ARTICLE 13 Other Benefits and Agreements...........................18
13.1 Coordination with Other Benefits........................18
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ARTICLE 14 Claims Procedures.......................................19
14.1 Presentation of Claim...................................19
14.2 Notification of Decision................................19
14.3 Review of a Denied Claim................................19
14.4 Decision on Review......................................19
14.5 Legal Action............................................20
ARTICLE 15 Trust...................................................20
15.1 Establishment of the Trust..............................20
15.2 Interrelationship of the Plan and the Trust.............20
15.3 Distributions From the Trust............................20
ARTICLE 16 Miscellaneous...........................................20
16.1 Status of Plan..........................................20
16.2 Unsecured General Creditor..............................20
16.3 Employer's Liability....................................21
16.4 Nonassignability........................................21
16.5 Not a Contract of Employment............................21
16.6 Furnishing Information..................................21
16.7 Terms...................................................21
16.8 Captions................................................21
16.9 Governing Law...........................................21
16.10 Notice..................................................21
16.11 Successors..............................................22
16.12 Spouse's Interest.......................................22
16.13 Validity................................................22
16.14 Incompetent.............................................22
16.15 Court Order.............................................22
16.16 Distribution in the Event of Taxation...................22
16.17 Insurance...............................................23
16.18 Legal Fees To Enforce Rights After Change in Control....23
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INTERNATIONAL GAME TECHNOLOGY
DEFERRED COMPENSATION PLAN
Effective September 1, 1999
Purpose
The purpose of this Plan is to provide specified benefits to a select
group of management and highly compensated Employees who contribute materially
to the continued growth, development and future business success of
International Game Technology, a Nevada corporation, and its subsidiaries, if
any, that sponsor this Plan. This Plan shall be unfunded for tax purposes and
for purposes of Title I of ERISA.
ARTICLE 1
Definitions
For purposes of this Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:
1.1 "Account Balance" shall mean, with respect to a Participant, a credit
on the records of the Employer equal to the sum of (i) the Deferral
Account balance, (ii) the vested Company Contribution Account balance,
and (iii) the vested Profit Sharing Restoration Contribution Account
balance. The Account Balance, and each other specified account balance,
shall be a bookkeeping entry only and shall be utilized solely as a
device for the measurement and determination of the amounts to be paid
to a Participant, or his or her designated Beneficiary, pursuant to
this Plan.
1.2 "Annual Cash Sharing" shall mean any compensation based upon Company
profitability and payable to a Participant as an Employee in May and
November under the Company's cash sharing plan.
1.3 "Annual Commissions" shall mean any compensation payable to a
Participant as an Employee based upon his or her sales, excluding Base
Annual Salary, Annual Discretionary Cash Bonus and Annual Cash Sharing.
1.4 "Annual Company Contribution Amount" shall mean, for any one Plan Year,
the amount determined in accordance with Section 3.5.
1.5 "Annual Deferral Amount" shall mean that portion of a Participant's
Base Annual Salary, Annual Discretionary Cash Bonus, Annual Cash
Sharing and/or Annual Commissions that a Participant elects to have,
and is deferred, in accordance with Article 3, for any one Plan Year.
In the event of a Participant's Retirement, Disability (if deferrals
cease in accordance with Section 8.1), death or a Termination of
Employment prior to the end of a Plan Year, such year's Annual Deferral
Amount shall be the actual amount withheld prior to such event.
1.6 "Annual Discretionary Cash Bonus" shall mean any compensation, in
addition to Base Annual Salary relating to services performed during
any calendar year, whether or not paid in such calendar year, payable
to a Participant as an Employee under any Employer's annual cash bonus
and cash incentive plans, excluding stock options.
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1.7 "Annual Installment Method" shall be an annual installment payment over
the number of years selected by the Participant in accordance with this
Plan, calculated as follows: The Account Balance of the Participant
shall be calculated as of the close of business on the last business
day of the year. The annual installment shall be calculated by
multiplying this balance by a fraction, the numerator of which is one,
and the denominator of which is the remaining number of annual payments
due the Participant. By way of example, if the Participant elects a
10-year Annual Installment Method, the first payment shall be 1/10 of
the Account Balance, calculated as described in this definition. The
following year, the payment shall be 1/9 of the Account Balance,
calculated as described in this definition. Each annual installment
shall be paid on or as soon as practicable after the last business day
of the applicable year.
1.8 "Annual Profit Sharing Restoration Contribution Amount" for any one
Plan Year shall be the amount determined in accordance with Section
3.6.
1.9 "Base Annual Salary" shall mean the annual cash compensation relating
to services performed during any calendar year, whether or not paid in
such calendar year, excluding bonuses, cash sharing, commissions,
overtime, fringe benefits, stock options, relocation expenses,
incentive payments, non-monetary awards, and other fees, automobile and
other allowances paid to a Participant for employment services rendered
(whether or not such allowances are included in the Employee's gross
income). Base Annual Salary shall be calculated before reduction for
compensation voluntarily deferred or contributed by the Participant
pursuant to all qualified or non-qualified plans of any Employer and
shall be calculated to include amounts not otherwise included in the
Participant's gross income under Code Sections 125, 402(e)(3), 402(h),
or 403(b) pursuant to plans established by any Employer; provided,
however, that all such amounts will be included in compensation only to
the extent that, had there been no such plan, the amount would have
been payable in cash to the Employee.
1.10 "Beneficiary" shall mean one or more persons, trusts, estates or other
entities, designated in accordance with Article 9, that are entitled to
receive benefits under this Plan upon the death of a Participant.
1.11 "Beneficiary Designation Form" shall mean the form established from
time to time by the Committee that a Participant completes, signs and
returns to the Committee to designate one or more Beneficiaries.
1.12 "Board" shall mean the board of directors of the Company.
1.13 "Change in Control" shall mean the first to occur of any of the
following events:
(a) Any "person" (as that term is used in Section 13 and 14(d)(2)
of the Securities Exchange Act of 1934 ("Exchange Act"))
becomes the beneficial owner (as that term is used in Section
13(d) of the Exchange Act), directly or indirectly, of fifty
percent (50%) or more of the Company's capital stock entitled
to vote in the election of directors;
(b) During any period of not more than two consecutive years,
not including any period prior to the adoption of this Plan,
individuals who, at the beginning of such period constitute
the board of directors of the Company, and any new director
other than a director designated by a person who has
entered into an agreement with the Company to effect a
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transaction described in clause (a), (c),(d) or (e) of this
Section 1.10) whose election by the board of directors or
nomination for election by the Company's stockholders was
approved by a vote of at least three-fourths (3/4ths)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 shareholders of the Company approve any consolidation or
merger of the Company, other than a consolidation or merger of
the Company in which the holders of the common stock of the
Company immediately prior to the consolidation or merger hold
more than fifty percent (50%) of the common stock of the
surviving corporation immediately after the consolidation or
merger;
(d) The shareholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company; or
(e) The shareholders of the Company approve the sale or transfer
of all or substantially all of the assets of the Company to
parties that are not within a "controlled group of
corporations" (as defined in Code Section 1563) in which the
Company is a member.
1.14 "Claimant" shall have the meaning set forth in Section 14.1.
1.15 "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
1.16 "Committee" shall mean the Profit Sharing Plan committee.
1.17 "Company"shall mean International Game Technology,a Nevada corporation,
and any successor.
1.18 "Company Contribution Account" shall mean (i) the sum of the
Participant's Annual Company Contribution Amounts, plus (ii) amounts
credited in accordance with all the applicable crediting provisions of
this Plan that relate to the Participant's Company Contribution
Account, less (iii) all distributions made to the Participant or his or
her Beneficiary pursuant to this Plan that relate to the Participant's
Company Contribution Account.
1.19 "Deduction Limitation" shall mean the following described limitation on
a benefit that may otherwise be distributable pursuant to the
provisions of this Plan. Except as otherwise provided, this limitation
shall be applied to all distributions that are "subject to the
Deduction Limitation" under this Plan. If an Employer determines in
good faith prior to a Change in Control that there is a reasonable
likelihood that any compensation otherwise payable to a Participant for
a taxable year of the Employer would not be deductible by the Employer
solely by reason of the limitation under Code Section 162(m), then, to
the extent deemed necessary by the Employer in its discretion to ensure
that the entire amount of any distribution to the Participant pursuant
to this Plan prior to the Change in Control is deductible, the Employer
may defer all or any portion of a distribution otherwise payable under
this Plan. Any amounts deferred pursuant to this limitation shall
continue to be credited/debited with additional amounts in accordance
with Section 3.9 below, even if such amount is being paid out in
installments. The amounts so deferred and amounts credited thereon
shall be distributed to the Participant or his or her Beneficiary (in
the event of the Participant's death) at the earliest possible date, as
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determined by the Employer in good faith, on which the deductibility of
compensation paid or payable to the Participant for the taxable year of
the Employer during which the distribution is made will not be limited
by Section 162(m), or if earlier, the effective date of a Change in
Control. Notwithstanding anything to the contrary in this Plan, the
Deduction Limitation shall not apply after a Change in Control.
1.20 "Deferral Account" shall mean (i) the sum of all of a Participant's
Annual Deferral Amounts, plus (ii) amounts credited in accordance with
all the applicable crediting provisions of this Plan that relate to the
Participant's Deferral Account, less (iii) all distributions made to
the Participant or his or her Beneficiary pursuant to this Plan that
relate to his or her Deferral Account.
1.21 "Disability" shall mean a period of disability during which a
Participant qualifies for permanent disability benefits under the
Participant's Employer's long-term disability plan, or, if a
Participant does not participate in such a plan, a period of disability
during which the Participant would have qualified for permanent
disability benefits under such a plan had the Participant been a
participant in such a plan, as determined in the sole discretion of the
Committee. If the Participant's Employer does not sponsor such a plan,
or discontinues to sponsor such a plan, Disability shall be determined
by the Committee in its sole discretion.
1.22 "Disability Benefit" shall mean the benefit set forth in Article 8.
1.23 "Election Form" shall mean a written form established from time to time
by the Committee that a Participant must complete, sign and return to
the Committee to make an election under the Plan.
1.24 "Employee" shall mean a person who is an employee of any Employer.
1.25 "Employer(s)" shall mean the Company and/or any of its subsidiaries
(now in existence or hereafter formed or acquired) that have been
selected by the Board to participate in the Plan and have adopted the
Plan as a sponsor.
1.26 "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.
1.27 "First Plan Year" shall mean the period beginning September 1, 1999 and
ending December 31, 1999.
1.28 "Participant" shall mean any Employee (i) who is selected to
participate in the Plan, (ii) who elects to participate in the Plan,
(iii) who signs a Plan Agreement, an Election Form and a Beneficiary
Designation Form, (iv) whose signed Plan Agreement, Election Form and
Beneficiary Designation Form are accepted by the Committee, (v) who
commences participation in the Plan, and (vi) whose Plan Agreement has
not terminated. A spouse or former spouse of a Participant shall not be
treated as a Participant in the Plan or have an account balance under
the Plan, even if he or she has an interest in the Participant's
benefits under the Plan as a result of applicable law or property
settlements resulting from legal separation or divorce.
1.29 "Plan" shall mean the Company's Deferred Compensation Plan, which shall
be evidenced by this instrument and by each Plan Agreement, as they may
be amended from time to time.
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1.30 "Plan Agreement" shall mean a written agreement, in a form approved by
the Committee and as it may be amended from time to time, which is
entered into by and between an Employer and a Participant. Each Plan
Agreement executed by a Participant and the Participant's Employer
shall provide for the entire benefit to which such Participant is
entitled under the Plan; should there be more than one Plan Agreement,
the Plan Agreement bearing the latest date of acceptance by the
Employer shall supersede all previous Plan Agreements in their entirety
and shall govern such entitlement. The terms of any Plan Agreement may
be different for any Participant, and any Plan Agreement may provide
additional benefits not set forth in the Plan or limit the benefits
otherwise provided under the Plan; provided, however, that any such
additional benefits or benefit limitations must be agreed to by both
the Employer and the Participant.
1.31 " Plan Year" shall, except for the First Plan Year, mean a period
beginning on January 1 of each calendar year and continuing through
December 31 of such calendar year.
1.32 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in
Article 6.
1.33 "Profit Sharing Plan" shall be that certain IGT Profit Sharing Plan, as
amended from time to time.
1.34 "Profit Sharing Restoration Contribution Account" shall mean (i) the
sum of all of a Participant's Annual Profit Sharing Restoration
Contribution Amounts, plus (ii) amounts credited in accordance with all
the applicable crediting provisions of this Plan that relate to the
Participant's Profit Sharing Restoration Contribution Account, less
(iii) all distributions made to the Participant or his or her
Beneficiary pursuant to this Plan that relate to the Participant's
Profit Sharing Restoration Contribution Account.
1.35 "Retirement", "Retire(s)" or "Retired" shall mean, with respect to an
Employee, severance from employment from all Employers for any reason
other than a leave of absence, death or Disability on or after the
attainment of age fifty-five (55).
1.36 "Retirement Benefit" shall mean the benefit set forth in Article 5.
1.37 "Short-Term Payout" shall mean the payout set forth in Section 4.1.
1.38 "Termination Benefit" shall mean the benefit set forth in Article 7.
1.39 "Termination of Employment" shall mean the severing of employment with
all Employers, voluntarily or involuntarily, for any reason other than
Retirement, Disability, death or an authorized leave of absence.
1.40 "Trust" shall mean one or more trusts established pursuant to that
certain Master Trust Agreement, dated as of ________, 199_ between the
Company and the trustee named therein, as amended from time to time.
1.41 "Years of Vesting Service" shall mean, with respect to a Participant,
his or her total years of vesting service as defined in and for
purposes of the Profit Sharing Plan.
ARTICLE 2
Selection, Enrollment, Eligibility
2.1 Selection by Committee. Participation in the Plan shall be limited to a
select group of management and highly compensated Employees of the
Employers, as determined by the Committee in its sole discretion. From
that group, the Committee shall select, in its sole discretion, those
Employees who may actually elect to participate in the Plan.
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2.2 Enrollment Requirements. As a condition to participation, each selected
Employee who wishes to participate in the Plan shall complete, execute
and return to the Committee a Plan Agreement, an Election Form and a
Beneficiary Designation Form, all within 30 days after he or she is
selected to participate in the Plan. In addition, the Committee shall
establish from time to time such other enrollment requirements as it
determines in its sole discretion are necessary. A selected Employee
whose Plan Agreement, Election Form and Beneficiary Designation are not
received by the Committee within such 30 day period shall not be
eligible to participate in the Plan unless we or she is again selected
by the Committee and timely files such documents.
2.3 Eligibility; Commencement of Participation. Provided an Employee
selected to participate in the Plan has met all enrollment requirements
set forth in this Plan and required by the Committee, including
returning all required documents to the Committee within the specified
time period, that Employee shall commence participation in the Plan on
the first day of the Plan Year following the date on which the Employee
completes all enrollment requirements. The Committee may allow an
Employee who is first employed by an Employer to commence participation
in the Plan during a Plan Year; provided that the Employee is selected
in accordance with Section 2.1 and satisfies the requirements of
Section 2.3 no later than 30 days after the date he or she is first
employed and provided that no amount of compensation earned prior to
the date of the Committee's receipt of his or her Plan Agreement and
Election Form may be deferred.
2.4 Termination of Participation and/or Deferrals. If the Committee
determines in good faith that a Participant no longer qualifies as a
member of a select group of management or highly compensated employees,
as membership in such group is determined in accordance with Sections
201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee shall have the
right, in its sole discretion, to (i) terminate any deferral election
the Participant has made for the remainder of the Plan Year in which
the Participant's membership status changes, (ii) prevent the
Participant from making future deferral elections and/or (iii)
immediately distribute the Participant's then Account Balance as a
Termination Benefit and terminate the Participant's participation in
the Plan.
ARTICLE 3
Deferral Commitments/Profit Sharing Restoration Contribution/Crediting/Taxes
3.1 Minimum Deferrals.
(a) Base Annual Salary, Annual Discretionary Cash Bonus, Annual
Cash Sharing, and Annual Commissions . For each Plan Year, a
Participant may elect to defer, as his or her Annual Deferral
Amount, Base Annual Salary, Annual Discretionary Cash Bonus,
Annual Cash Sharing, and/or Annual Commissions in an aggregate
minimum of $2,000.
If an election is made for less than $2,000, if no election is
made or if no election can be made because the maximum amount
that the Participant may defer under Section 3.2 is less than
$2,000, the amount deferred shall be zero.
(b) Short Plan Year. Notwithstanding the foregoing, if a
Participant first becomes a Participant after the first day of
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a Plan Year, or in the case of the first Plan Year of the Plan
itself, the minimum Base Annual Salary, Annual Discretionary
Cash Bonus, Annual Cash Sharing and Annual Commissions
deferral shall be an amount equal to the minimums set forth
above, respectively, multiplied by a fraction, the numerator
of which is the number of complete months remaining in the
Plan Year and the denominator of which is 12.
3.2 Maximum Deferral.
(a) Base Annual Salary, Annual Discretionary Cash Bonus, Annual
Cash Sharing and Annual Commissions. For each Plan Year, a
Participant may elect to defer, as his or her Annual Deferral
Amount, Base Annual Salary, Annual Discretionary Cash Bonus,
Annual Cash Sharing and/or Annual Commissions up to the
following maximum percentages for each deferral elected:
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Deferral Maximum Amount
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Base Annual Salary 50%
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Annual Discretionary Cash 50%
Bonus
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Annual Cash Sharing 50%
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Annual Commissions 50%
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Notwithstanding the foregoing, if a Participant first becomes
a Participant after the first day of a Plan Year, or in the
case of the first Plan Year of the Plan itself, the maximum
Annual Deferral Amount, with respect to Base Annual Salary,
Annual Discretionary Cash Bonus, Annual Cash Sharing and/or
Annual Commissions shall be limited to 50% of the amount of
such form of compensation not yet earned by the Participant as
of the date the Participant submits a Plan Agreement and
Election Form to the Committee for acceptance. The Committee,
in its discretion, may adopt other deferral limits that are
more restrictive on Participants than the foregoing limits,
and the Committee may provide that such limits, and the
Committee may provide that such other limits shall apply to
Participants generally or only to certain specified
Participants.
3.3 Election to Defer; Effect of Election Form.
(a) First Plan Year. In connection with a Participant's
commencement of participation in the Plan, the Participant
shall make an irrevocable deferral election for the Plan Year
in which the Participant commences participation in the Plan,
along with such other elections as the Committee deems
necessary or desirable under the Plan. For these elections to
be valid, the Election Form must be completed and signed by
the Participant, timely delivered to the Committee (in
accordance with Section 2.2 above) and accepted by the
Committee.
(b) Subsequent Plan Years. For each succeeding Plan Year, an
irrevocable deferral election for that Plan Year, and such
other elections as the Committee deems necessary or desirable
under the Plan, shall be made by timely delivering to the
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Committee, in accordance with its rules and procedures, before
the end of the Plan Year preceding the Plan Year for which the
election is made, a new Election Form. If no such Election
Form is timely delivered for a Plan Year, the Annual Deferral
Amount shall be zero for that Plan Year.
3.4 Withholding of Annual Deferral Amounts. For each Plan Year, the Base
Annual Salary portion of the Annual Deferral Amount shall be withheld
from each regularly scheduled Base Annual Salary payroll in equal
amounts, as adjusted from time to time for increases and decreases in
Base Annual Salary. The Annual Discretionary Cash Bonus, Annual Cash
Sharing and Annual Commissions portion of the Annual Deferral Amount
shall be withheld at the time the Annual Discretionary Cash Bonus,
Annual Cash Sharing or Annual Commissions, as the case may be, are or
otherwise would be paid to the Participant, whether or not this occurs
during the Plan Year itself.
3.5 Annual Company Contribution Amount. For each Plan Year, an Employer, in
its sole discretion, may, but is not required to, credit any amount it
desires to any Participant's Company Contribution Account under this
Plan, which amount shall be for that Participant the Annual Company
Contribution Amount for that Plan Year. The amount so credited to a
Participant may be smaller or larger than the amount credited to any
other Participant, and the amount credited to any Participant for a
Plan Year may be zero, even though one or more other Participants
receive an Annual Company Contribution Amount for that Plan Year. The
Annual Company Contribution Amount, if any, shall be credited as of the
last day of the Plan Year. If a Participant is not employed by an
Employer as of the last day of a Plan Year other than by reason of his
or her Retirement or death while employed, the Annual Company
Contribution Amount for that Plan Year shall be zero.
3.6 Annual Profit Sharing Restoration Contribution Amount. A Participant's
Annual Profit Sharing Restoration Contribution Amount for any Plan Year
shall be equal to the difference between (i) the amount of employer
matching contributions the Participant would have received under
section 3.3 of the Profit Sharing Plan for the period under the Profit
Sharing Plan that corresponds to the Plan Year, but for the
Participant's deferral election under this Plan, and (ii) the amount of
employer matching contributions the Participant actually received under
section 3.3 of the Profit Sharing Plan for the period under the Profit
Sharing Plan that corresponds to the Plan Year. If a Participant is not
employed by an Employer as of the last day of a Plan Year other than by
reason of his or her Retirement or death, the Annual Profit Sharing
Restoration Contribution Amount for such Plan Year shall be zero. In
the event of Retirement or death, a Participant shall be credited with
the Annual Profit Sharing Restoration Contribution Amount for the Plan
Year in which he or she Retires or dies. Any Annual Company Profit
Sharing Restoration Amount, and amounts debited or credited thereon in
accordance with Section 3.9, which has been forfeited under Section 3.8
during a Plan Year shall be allocated as of the last day of the Plan
Year to the Company Profit Sharing Restoration Accounts of the other
eligible Participants in the Plan during that Plan Year in accordance
with the methodology set forth in Section 3.10 of the Profit Sharing
Plan as interpreted by the Committee in its sole and absolute
discretion.
3.7 Vesting.
(a) A Participant shall at all times be 100% vested in his or her
Deferral Account.
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(b) A Participant shall be vested in his or her Company
Contribution Account and Profit Sharing Restoration
Contribution Account in accordance with the following
schedule:
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Years of Vesting Service Vested Percentage of
on Date of Termination of Employment Company Contribution Account
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Less than 1 year 0%
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More than 1 but less than 2 years 10%
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More than 2 but less than 3 years 20%
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More than 3 but less than 4 years 30%
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More than 4 but less than 5 years 45%
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More than 5 but less than 6 years 60%
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More than 6 but less than 7 years 80%
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7 years or more 100%
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(c) Notwithstanding anything to the contrary contained in this
Section 3.8, in the event of the Participant's death, or a
Change in Control, a Participant's Company Contribution
Account and Profit Sharing Restoration Contribution Account
shall immediately become 100% vested (if it is not already
vested in accordance with the above vesting schedules).
(d) Notwithstanding subsection (c), the vesting schedule for a
Participant's Company Contribution Account and Profit Sharing
Restoration Contribution Account shall not be accelerated to
the extent that the Committee determines that such
acceleration would cause the deduction limitations of Section
280G of the Code to become effective. In the event that all
of a Participant's Company Contribution Account or Profit
Sharing Restoration Contribution Account is not vested
pursuant to such a determination, the Participant may
request, no later than 60 days after the date the Committee
notifies the Participant in writing that his or her vesting
will not be fully accelerated in accordance with the
foregoing sentence , independent verification of the
Committee's calculations with respect to the application of
Section 280G. Such request must be made in writing to the
Committee. In such case, the Committee must provide to the
Participant within 30 business days of its receipt of such a
request an opinion from a nationally recognized accounting
firm selected by the Participant (the "Accounting Firm").
The opinion shall state the Accounting Firm's opinion that
any limitation in the vested percentage hereunder is
necessary to avoid the limits of Section 280G and contain
supporting calculations, and the Participant's vesting (to
the extent not previously accelerated) shall be accelerated
to the maximum extent possible (within the determination
made by the Accounting Firm) such that the limitations of
Section 280G of the Code will not be triggered. The cost of
such opinion shall be paid for by the Company.
3.8 Crediting/Debiting of Account Balances. In accordance with, and subject
to, the rules and procedures that are established from time to time by
<PAGE>
the Committee, in its sole discretion, amounts shall be credited or
debited to a Participant's Account Balance in accordance with the
following rules:
(a) Election of Measurement Funds. A Participant , in connection
with his or her initial deferral election in accordance with
Section 3.3(a) above, shall elect, on the Election Form, one
or more Measurement Fund(s) (as described in Section 3.9(c)
below) to be used to determine the additional amounts to
be credited (or, in the event of losses, debited) to his
or her Account Balance for the first calendar month or
portion thereof in which the Participant commences
participation in the Plan and continuing thereafter for
each subsequent calendar month in which the Participant
participates in the Plan, unless changed in accordance with
the next sentence. Commencing with the first business day
that follows the Participant's commencement of participation
in the Plan and continuing thereafter for each subsequent
business day in which the Participant participates in the
Plan, the Participant may (but is not required to) elect,
by submitting an Election Form to the Committee that is
accepted by the Committee, to add or delete one or more
Measurement Fund(s) to be used to determine the additional
amounts to be credited (or, in the event of losses,
debited) to his or her Account Balance, or to change the
portion of his or her Account Balance allocated to each
previously or newly elected Measurement Fund. If an election
is made in accordance with the previous sentence, it shall
apply to the next business day and continue thereafter for
each subsequent day in which the Participant participates
in the Plan, unless changed in accordance with the previous
sentence.
(b) Proportionate Allocation. In making any election described in
Section 3.9(a) above, the Participant shall specify on the
Election Form, in increments of five percentage points (5%),
the percentage of his or her Account Balance to be deemed to
be invested in a particular Measurement Fund for purposes of
crediting deemed earnings (or losses) with respect to his or
her Account Balance. A Participant's elections shall total
100%.
(c) Measurement Funds. The Participant may elect one (1) or more
of the measurement funds, based on certain mutual funds
approved from time to time by the Committee (the "Measurement
Funds"), for the purpose of crediting additional amounts to
his or her Account Balance. As necessary, the Committee may,
in its sole discretion, discontinue, substitute or add a
Measurement Fund. Each such action will take effect as of the
first business day that follows by thirty (30) days the day on
which the Committee gives Participants advance written notice
of such change.
(d) Crediting or Debiting Method. The performance of each
elected Measurement Fund (either positive or negative) will
be determined by the Committee, in its reasonable discretion,
based on the actual performance of the selected mutual funds
corresponding to the Measurement Funds. A Participant's
Account Balance shall be credited or debited on a daily
basis based on the performance of each Measurement Fund
selected by the Participant, as determined by the
Committee in its sole discretion, as though (i) a
Participant's Account Balance were invested in the
Measurement Fund(s) selected by the Participant, in the
percentages applicable to such calendar month, as of
the close of usiness on the first business day of such
<PAGE>
calendar month, at the closing price on such date; (ii) the
portion of the Annual Deferral Amount that was actually
deferred during any calendar month were invested in the
Measurement Fund(s) selected by the Participant, in the
percentages applicable to such calendar month, no later
than the close of business on the first business day after
the day on which such amounts are actually deferred from
the Participant's Base Annual Salary through reductions in
his or her payroll, at the closing price on such date;
and (iii) any distribution made to a Participant that
decreases such Participant's Account Balance ceased being
invested in the Measurement Fund(s), in the percentages
applicable to such calendar month, no earlier than one
business day prior to the distribution, at the closing price
on such date. The Participant's Annual Company
Contribution Amount and Annual Profit Sharing Restoration
Contribution Amount shall be credited to his or her Company
Contribution Account or Profit Sharing Restoration
Contribution Account, as the case may be, for purposes of this
Section 3.9(d) as of the close of business on the last
business day of the Plan Year to which it relates.
(e) No Actual Investment. Notwithstanding any other provision
of this Plan that may be interpreted to the contrary, the
Measurement Funds are to be used for measurement purposes only
and a Participant's election of any such Measurement Fund,
the deemed allocation to his or her Account Balance thereto,
the calculation of additional amounts and the crediting or
debiting of such amounts to a Participant's Account Balance
shall not be considered or construed in any manner as an
actual investment of his or her Account Balance in any such
Measurement Fund. In the event that the Company or the
Trustee (as that term is defined in the T rust), in its own
discretion, decides to invest funds in any or all of the
Measurement Funds, no Participant shall have any rights in
or to such investments. Without limiting the foregoing, a
Participant's Account Balance shall at all times be a
bookkeeping entry only and shall not represent any investment
made on his or her behalf by the Company or the Trust; the
Participant shall at all times remain an unsecured general
creditor of the Company.
3.9 FICA and Other Taxes.
(a) Annual Deferral Amounts. For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the
Participant's Employer(s) shall withhold from that portion of
the Participant's Base Annual Salary, Annual Discretionary
Cash Bonus, Annual Cash Sharing and Annual Commissions that is
not being deferred, in a manner determined by the Employer(s),
the Participant's share of FICA and other employment taxes on
such Annual Deferral Amount. If necessary, the Committee may
reduce the Annual Deferral Amount otherwise elected by a
Participant in order to comply with this Section 3.10.
(b) Annual Company Contribution Amounts and Annual Profit Sharing
Restoration Contribution Amounts. For each Plan Year in
which an Annual Company Contribution Amount or Profit
Sharing Restoration Contribution Amount vests, the
Participant's Employer(s) shall withhold from that portion of
the Participant's Base Annual Salary, Annual Discretionary
Cash Bonus, Annual Cash Sharing and Annual Commissions that
is not being deferred, in a manner determined by the
Employer(s), the Participant's share of FICA and other
<PAGE>
employment taxes on such Annual Company Contribution Amount
and Annual Profit Sharing Restoration Contribution Amount
and all earnings thereon. If necessary, the Committee may
reduce a Participant's Annual Company Contribution Amount or
Annual Profit Sharing Restoration Contribution Amount or both
in order to comply with this Section 3.10.
(c) Distributions. The Participant's Employer(s), or the trustee
of the Trust, shall withhold from any amount otherwise payable
to a Participant under this Plan all federal, state and local
income, employment and other taxes required to be withheld by
the Employer(s), or the trustee of the Trust, in connection
with such payments, in amounts and in a manner to be
determined in the sole discretion of the Employer(s) and the
trustee of the Trust.
ARTICLE 4
Short-Term Payout; Withdrawal Election
4.1 Short-Term Payout. In connection with each election to defer an Annual
Deferral Amount, a Participant may irrevocably elect to receive a
future "Short-Term Payout" from the Plan with respect to such Annual
Deferral Amount. Subject to the Deduction Limitation, the Short-Term
Payout shall be a lump sum payment in an amount that is equal to the
Annual Deferral Amount plus amounts credited or debited in the manner
provided in Section 3.9 above on that amount, determined at the time
that the Short-Term Payout becomes payable (rather than the date of a
Termination of Employment). Subject to the Deduction Limitation and the
other terms and conditions of this Plan, each Short-Term Payout elected
shall be paid out during a 45 day period commencing immediately after
the last day of any Plan Year designated by the Participant that is at
least three Plan Years after the Plan Year in which the Annual Deferral
Amount is actually deferred. By way of example, if a three year
Short-Term Payout is elected for Annual Deferral Amounts that are
deferred in the Plan Year commencing March 1, 2000, the three year
Short-Term Payout would become payable during the 45 day period
commencing December 1, 2004.
4.2 Other Benefits Take Precedence Over Short-Term. Should an event occur
that triggers a benefit under Article 5, 6, 7 or 8, any Annual Deferral
Amount, plus amounts credited or debited thereon, that is subject to a
Short-Term Payout election under Section 4.1 shall not be paid in
accordance with Section 4.1 but shall be paid in accordance with the
other applicable Article.
4.3 Withdrawal Election. A Participant (or, after a Participant's death,
his or her Beneficiary) may elect, at any time, to withdraw all of his
or her Account Balance, calculated as if there had occurred a
Termination of Employment as of the day of the election, less a
withdrawal penalty equal to 10% of such amount (the net amount shall be
referred to as the "Withdrawal Amount"). This election can be made at
any time, before or after Retirement, Disability, death or Termination
of Employment, and whether or not the Participant (or Beneficiary) is
in the process of being paid pursuant to an installment payment
schedule. If made before Retirement, Disability or death, a
Participant's Withdrawal Amount shall be his or her Account Balance
calculated as if there had occurred a Termination of Employment as of
the day of the election. No partial withdrawals of a Participant's
Account Balance shall be allowed. The Participant (or his or her
Beneficiary) shall make this election by giving the Committee advance
written notice of the election in a form determined from time to time
by the Committee. The Participant (or his or her Beneficiary) shall be
<PAGE>
paid the Withdrawal Amount within 45 days of his or her election. Once
the Withdrawal Amount is paid, the Participant's participation in the
Plan shall terminate and the Participant shall not be eligible to
participate in the Plan for the remainder of the Plan Year in which the
withdrawal election is made and the next full Plan Year. The payment of
this Withdrawal Amount shall not be subject to the Deduction
Limitation. The amount of the withdrawal penalty shall be permanently
and irrevocably forfeited by the Participant.
ARTICLE 5
Retirement Benefit
5.1 Retirement Benefit. Subject to the Deduction Limitation, a
Participant who Retires shall receive, as a Retirement Benefit, his or
her Account Balance.
5.2 Payment of Retirement Benefit. A Participant, in connection with his or
her commencement of participation in the Plan, shall elect on an
Election Form to receive the Retirement Benefit in a lump sum or
pursuant to an Annual Installment Method of 5, 10 or 15 years. The
Participant may annually change his or her election to an allowable
alternative payout period by submitting a new Election Form to the
Committee, provided that an Election Form must be received and accepted
by the Committee at least 1 year prior to the Participant's Retirement
in order to be effective with respect to a change of the Participant's
alternative payout period. The Election Form most recently accepted by
the Committee shall govern the payout of the Retirement Benefit. If a
Participant does not make any election with respect to the payment of
the Retirement Benefit, then such benefit shall be payable in a lump
sum. The lump sum payment shall be made, or installment payments shall
commence, no later than 45 days after the last day of the Plan Year in
which the Participant Retires. Any payment made shall be subject to the
Deduction Limitation.
5.3 Death Prior to Completion of Retirement Benefit. If a Participant dies
after Retirement but before the Retirement Benefit is paid in full, the
Participant's unpaid Retirement Benefit payments shall continue and
shall be paid to the Participant's Beneficiary in a lump sum that is
equal to the Participant's unpaid remaining Account Balance.
ARTICLE 6
Pre-Retirement Survivor Benefit
6.1 Pre-Retirement Survivor Benefit. Subject to the Deduction Limitation,
the Participant's Beneficiary shall receive a Pre-Retirement Survivor
Benefit equal to the Participant's Account Balance if the Participant
dies before he or she Retires, experiences a Termination of Employment
or suffers a Disability.
6.2 Payment of Pre-Retirement Survivor Benefit. The Pre-Retirement Survivor
Benefit shall be paid in a lump sum. The lump sum payment shall be made
no later than 45 days after the last day of the Plan Year in which the
Committee is provided with proof that is satisfactory to the Committee
of the Participant's death. Any payment made shall be subject to the
Deduction Limitation.
<PAGE>
ARTICLE 7
Termination Benefit
7.1 Termination Benefit. Subject to the Deduction Limitation, the
Participant shall receive a Termination Benefit, which shall be equal
to the Participant's Account Balance if a Participant experiences a
Termination of Employment prior to his or her Retirement, death or
Disability.
7.2 Payment of Termination Benefit. The Termination Benefit shall be paid
in a lump sum. The lump sum payment shall be made no later than 45 days
after the date on which the Participant experiences the Termination of
Employment. Any payment made shall be subject to the Deduction
Limitation.
ARTICLE 8
Disability Waiver and Benefit
8.1 Disability Waiver.
(a) Waiver of Deferral. A Participant who is determined by the
Committee to be suffering from a Disability shall be excused
from fulfilling that portion of the Annual Deferral Amount
commitment that would otherwise have been withheld from a
Participant's Base Annual Salary, Annual Discretionary Cash
Bonus, Annual Cash Sharing and/or Annual Commissions for the
Plan Year during which the Participant first suffers a
Disability. During the period of Disability, the Participant
shall not be allowed to make any additional deferral
elections, but will continue to be considered a Participant
for all other purposes of this Plan.
(b) Return to Work. If a Participant returns to employment with an
Employer, after a Disability ceases, the Participant may elect
to defer an Annual Deferral Amount for the Plan Year following
his or her return to employment or service and for every Plan
Year thereafter while a Participant in the Plan; provided such
deferral elections are otherwise allowed and an Election Form
is timely delivered to and accepted by the Committee for each
such election in accordance with Section 3.3 above.
8.2 Continued Eligibility; Disability Benefit. A Participant suffering a
Disability shall, solely for benefit purposes under this Plan, continue
to be considered to be employed, and shall be eligible for the benefits
provided for in Articles 4, 5, 6 or 7 in accordance with the provisions
of those Articles. Notwithstanding the above, the Committee shall have
the right to, in its sole and absolute discretion and for purposes of
this Plan only, and must in the case of a Participant who is otherwise
eligible to Retire, deem the Participant to have experienced a
Termination of Employment, or in the case of a Participant who is
eligible to Retire, to have Retired, at any time (or in the case of a
Participant who is eligible to Retire, as soon as practicable) after
such Participant is determined to be suffering a Disability, in which
case the Participant shall receive a Disability Benefit equal to his or
her Account Balance at the time of the Committee's determination;
provided, however, that should the Participant otherwise have been
eligible to Retire, he or she shall be paid in accordance with Article
5. The Disability Benefit shall be paid in a lump sum within 45 days of
the Committee's exercise of such right. Any payment made shall be
subject to the Deduction Limitation.
<PAGE>
ARTICLE 9
Beneficiary Designation
9.1 Beneficiary. Each Participant shall have the right, at any time, to
designate his or her Beneficiary(ies) (both primary as well as
contingent) to receive any benefits payable under the Plan to a
beneficiary upon the death of a Participant. The Beneficiary designated
under this Plan may be the same as or different from the Beneficiary
designation under any other plan of an Employer in which the
Participant participates.
9.2 Beneficiary Designation; Change; Spousal Consent. A Participant shall
designate his or her Beneficiary by completing and signing the
Beneficiary Designation Form, and returning it to the Committee or its
designated agent. A Participant shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the
terms of the Beneficiary Designation Form and the Committee's rules and
procedures, as in effect from time to time. If the Participant names
someone other than his or her spouse as his or her sole primary
Beneficiary, a spousal consent, in the form designated by the
Committee, must be signed by that Participant's spouse and returned to
the Committee. Upon the acceptance by the Committee of a new
Beneficiary Designation Form, all Beneficiary designations previously
filed shall be canceled. The Committee shall be entitled to rely on the
last Beneficiary Designation Form filed by the Participant and accepted
by the Committee prior to his or her death.
9.3 Acknowledgment. No designation or change in designation of a
Beneficiary shall be effective until received and acknowledged in
writing by the Committee or its designated agent.
9.4 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if all
designated Beneficiaries predecease the Participant or die prior to
complete distribution of the Participant's benefits, then the
Participant's designated Beneficiary shall be deemed to be his or her
surviving spouse. If the Participant has no surviving spouse, the
benefits remaining under the Plan to be paid to a Beneficiary shall be
payable to the executor or personal representative of the Participant's
estate.
9.5 Doubt as to Beneficiary. If the Committee has any doubt as to the
proper Beneficiary to receive payments pursuant to this Plan, the
Committee shall have the right, exercisable in its discretion, to cause
the Participant's Employer to withhold such payments until this matter
is resolved to the Committee's satisfaction.
9.6 Discharge of Obligations. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to
the Participant, and that Participant's Plan Agreement shall terminate
upon such full payment of benefits.
<PAGE>
ARTICLE 10
Leave of Absence
10.1 Paid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take a paid leave of absence
from the employment of the Employer, the Participant shall continue to
be considered employed by the Employer and the Annual Deferral Amount
shall continue to be withheld during such paid leave of absence in
accordance with Section 3.3.
10.2 Unpaid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take an unpaid leave of
absence from the employment of the Employer, the Participant will
continue to be considered employed by the Employer and the Participant
shall be excused from making deferrals until the earlier of the date
the leave of absence expires or the Participant returns to a paid
employment status. Upon such expiration or return, deferrals shall
resume for the remaining portion of the Plan Year in which the
expiration or return occurs, based on the deferral election, if any,
made for that Plan Year. If no election was made for that Plan Year, no
deferral shall be withheld. A Participant shall be deemed to have
terminated employment if he or she fails to timely return to the employ
of the Employer.
ARTICLE 11
Termination, Amendment or Modification
11.1 Termination. Although each Employer anticipates that it will continue
the Plan for an indefinite period of time, there is no guarantee that
any Employer will continue the Plan or will not terminate the Plan at
any time in the future. Accordingly, each Employer reserves the right
to discontinue its sponsorship of the Plan and/or to terminate the Plan
at any time with respect to any or all of its participating Employees
by action of its board of directors. Upon the termination of the Plan
with respect to any Employer, the Plan Agreements of the affected
Participants who are employed by that Employer shall terminate and
their Account Balances, determined as if they had experienced a
Termination of Employment on the date of Plan termination or, if Plan
termination occurs after the date upon which a Participant was eligible
to Retire, then with respect to that Participant as if he or she had
Retired on the date of Plan termination, shall be paid to the
Participants as follows: Prior to a Change in Control, if the Plan is
terminated with respect to all of its Participants, an Employer shall
have the right, in its sole discretion, and notwithstanding any
elections made by the Participant, to pay such benefits in a lump sum
or pursuant to an Annual Installment Method of up to 15 years, with
amounts credited and debited during the installment period as provided
herein. If the Plan is terminated with respect to less than all of its
Participants, an Employer shall be required to pay such benefits in a
lump sum. After a Change in Control, the Employer shall be required to
pay such benefits in a lump sum. The termination of the Plan shall not
adversely affect any Participant or Beneficiary who has become entitled
to the payment of any benefits under the Plan as of the date of
termination; provided however, that the Employer shall have the right
to accelerate installment payments without a premium or prepayment
penalty by paying the Account Balance in a lump sum or pursuant to an
Annual Installment Method using fewer years (provided that the present
value of all payments that will have been received by a Participant at
any given point of time under the different payment schedule shall
equal or exceed the present value of all payments that would have been
received at that point in time under the original payment schedule).
<PAGE>
11.2 Amendment. Any Employer may, at any time, amend or modify the Plan in
whole or in part with respect to that Employer by the action of its
board of directors; provided, however, that: (i) subject to Section
11.9, no amendment or modification shall be effective to decrease or
restrict the value of a Participant's Account Balance in existence at
the time the amendment or modification is made, calculated as if the
Participant had experienced a Termination of Employment as of the
effective date of the amendment or modification or, if the amendment or
modification occurs after the date upon which the Participant was
eligible to Retire, the Participant had Retired as of the effective
date of the amendment or modification, and (ii) no amendment or
modification of this Section 11.2 or Section 12.2 of the Plan shall be
effective. The amendment or modification of the Plan shall not affect
any Participant or Beneficiary who has become entitled to the payment
of benefits under the Plan as of the date of the amendment or
modification; provided, however, that the Employer shall have the right
to accelerate installment payments by paying the Account Balance in a
lump sum or pursuant to an Annual Installment Method using fewer years
(provided that the present value of all payments that will have been
received by a Participant at any given point of time under the
different payment schedule shall equal or exceed the present value of
all payments that would have been received at that point in time under
the original payment schedule).
11.3 Plan Agreement. Despite the provisions of Sections 11.1 and 11.2 above,
if a Participant's Plan Agreement contains benefits or limitations that
are not in this Plan document, the Employer may only amend or terminate
such provisions as to the Participant with his or her consent.
11.4 Effect of Payment. The full payment of the applicable benefit under
Articles 4, 5, 6, 7 or 8 of the Plan shall completely discharge all
obligations to a Participant and his or her designated Beneficiaries
under this Plan and the Participant's Plan Agreement shall terminate.
ARTICLE 12
Administration
12.1 Committee Duties. Except as otherwise provided in this Article 12, this
Plan shall be administered by a Committee, which shall consist of the
Board, or such committee as the Board shall appoint. Members of the
Committee may be Participants under this Plan. In addition to any
powers otherwise conferred under this Plan, the Committee shall have
the discretion and authority to (i) make, amend, interpret, and enforce
all appropriate rules and regulations for the administration of this
Plan and (ii) decide or resolve any and all questions including
interpretations of this Plan, as may arise in connection with the Plan.
Any individual serving on the Committee who is a Participant shall not
vote or act on any matter relating solely to himself or herself. When
making a determination or calculation, the Committee shall be entitled
to rely on information furnished by a Participant or the Company.
12.2 Administration Upon Change In Control. For purposes of this Plan, the
Company shall be the "Administrator" at all times prior to the
occurrence of a Change in Control. Upon and after the occurrence of a
Change in Control, the "Administrator" shall be an independent third
party selected by the Trustee and approved by the individual who,
immediately prior to such event, was the Company's Chief Executive
Officer or, if not so identified, the Company's highest ranking officer
(the "Ex-CEO"). The Administrator shall have the discretionary power to
determine all questions arising in connection with the administration
of the Plan and the interpretation of the Plan and Trust including, but
not limited to benefit entitlement determinations; provided, however,
<PAGE>
upon and after the occurrence of a Change in Control, the Administrator
shall have no power to direct the investment of Plan or Trust assets or
select any investment manager or custodial firm for the Plan or Trust.
Upon and after the occurrence of a Change in Control, the Company must:
(1) pay all reasonable administrative expenses and fees of the
Administrator; (2) indemnify the Administrator against any costs,
expenses and liabilities including, without limitation, attorney's fees
and expenses arising in connection with the performance of the
Administrator hereunder, except with respect to matters resulting from
the gross negligence or willful misconduct of the Administrator or its
employees or agents; and (3) supply full and timely information to the
Administrator or all matters relating to the Plan, the Trust, the
Participants and their Beneficiaries, the Account Balances of the
Participants, the date of circumstances of the Retirement, Disability,
death or Termination of Employment of the Participants, and such other
pertinent information as the Administrator may reasonably require. Upon
and after a Change in Control, the Administrator may be terminated (and
a replacement appointed) by the Trustee only with the approval of the
Ex-CEO. Upon and after a Change in Control, the Administrator may not
be terminated by the Company.
12.3 Agents. In the administration of this Plan, the Committee may, from
time to time, employ agents and delegate to them such administrative
duties as it sees fit (including acting through a duly appointed
representative) and may from time to time consult with counsel who may
be counsel to any Employer.
12.4 Binding Effect of Decisions. The decision or action of the
Administrator with respect to any question arising out of or in
connection with the administration, interpretation and application of
the Plan and the rules and regulations promulgated hereunder shall be
final and conclusive and binding upon all persons having any interest
in the Plan.
12.5 Indemnity of Committee. All Employers shall indemnify and hold harmless
the members of the Committee, any Employee to whom the duties of the
Committee may be delegated, and the Administrator against any and all
claims, losses, damages, expenses or liabilities arising from any
action or failure to act with respect to this Plan, except in the case
of willful misconduct by the Committee, any of its members, any such
Employee or the Administrator.
12.6 Employer Information. To enable the Committee and/or Administrator to
perform its functions, the Company and each Employer shall supply full
and timely information to the Committee and/or Administrator, as the
case may be, on all matters relating to the compensation of its
Participants, the date and circumstances of the Retirement, Disability,
death or circumstances of the Retirement, Disability, death or
Termination of Employment of its Participants, and such other pertinent
information as the Committee or Administrator may reasonably require.
ARTICLE 13
Other Benefits and Agreements
13.1 Coordination with Other Benefits. The benefits provided for a
Participant and Participant's Beneficiary under the Plan are in
addition to any other benefits available to such Participant under any
other plan or program for employees of the Participant's Employer. The
Plan shall supplement and shall not supersede, modify or amend any
other such plan or program except as may otherwise be expressly
provided.
<PAGE>
ARTICLE 14
Claims Procedures
14.1 Presentation of Claim. Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below as
a "Claimant") may deliver to the Committee a written claim for a
determination with respect to the amounts distributable to such
Claimant from the Plan. If such a claim relates to the contents of a
notice received by the Claimant, the claim must be made within 60 days
after such notice was received by the Claimant. All other claims must
be made within 180 days of the date on which the event that caused the
claim to arise occurred. The claim must state with particularity the
determination desired by the Claimant.
14.2 Notification of Decision. The Committee shall consider a Claimant's
claim within a reasonable time, and shall notify the Claimant in
writing:
(a) that the Claimant's requested determination has been made, and
that the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in whole
or in part, to the Claimant's requested determination, and
such notice must set forth in a manner calculated to be
understood by the Claimant:
(i) the specific reason(s) for the denial of the claim, or any part of it;
(ii) specific reference(s) to pertinent provisions of the Plan upon which
such denial was based;
(iii) 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
(iv) an explanation of the claim review procedure set forth in Section 14.3
below.
14.3 Review of a Denied Claim. Within 60 days after receiving a notice from
the Committee that a claim has been denied, in whole or in part, a
Claimant (or the Claimant's duly authorized representative) may file
with the Committee a written request for a review of the denial of the
claim. Thereafter, but not later than 30 days after the review
procedure began, the Claimant (or the Claimant's duly authorized
representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole
discretion, may grant.
14.4 Decision on Review. The Committee shall render its decision on review
promptly, and not later than 60 days after the filing of a written
request for review of the denial, unless a hearing is held or other
special circumstances require additional time, in which case the
Committee's decision must be rendered within 120 days after such date.
Such decision must be written in a manner calculated to be understood
by the Claimant, and it must contain:
<PAGE>
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisios upon
which the decision was based; and
(c) such other matters as the Committee deems relevant.
14.5 Legal Action. A Claimant's compliance with the foregoing provisions of
this Article 14 is a mandatory prerequisite to a Claimant's right to
commence any legal action with respect to any claim for benefits under
this Plan.
ARTICLE 15
Trust
15.1 Establishment of the Trust. The Company shall establish the Trust, and
each Employer shall at least annually transfer over to the Trust such
assets as the Employer determines, in its sole discretion, are
necessary to provide, on a present value basis, for its respective
future liabilities created with respect to the Annual Deferral Amounts,
Annual Company Contribution Amounts, and for such Employer's
Participants for all periods prior to the transfer, as well as any
debits and credits to the Participants' Account Balances for all
periods prior to the transfer, taking into consideration the value of
the assets in the trust at the time of the transfer.
15.2 Interrelationship of the Plan and the Trust. The provisions of the Plan
and the Plan Agreement shall govern the rights of a Participant to
receive distributions pursuant to the Plan. The provisions of the Trust
shall govern the rights of the Employers, Participants and the
creditors of the Employers to the assets transferred to the Trust. Each
Employer shall at all times remain liable to carry out its obligations
under the Plan.
15.3 Distributions From the Trust. Each Employer's obligations under the
Plan may be satisfied with Trust assets distributed pursuant to the
terms of the Trust, and any such distribution shall reduce the
Employer's obligations under this Plan.
ARTICLE 16
Miscellaneous
16.1 Status of Plan. The Plan is intended to be a plan that is not qualified
within the meaning of Code Section 401(a) and that "is unfunded and is
maintained by an employer primarily for the purpose of providing
deferred compensation for a select group of management or highly
compensated employee" within the meaning of ERISA Sections 201(2),
301(a)(3) and 401(a)(1). The Plan shall be administered and interpreted
to the extent possible in a manner consistent with that intent.
16.2 Unsecured General Creditor. Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights,
interests or claims in any property or assets of an Employer. For
purposes of the payment of benefits under this Plan, any and all of an
Employer's assets shall be, and remain, the general, unpledged
unrestricted assets of the Employer. An Employer's obligation under the
Plan shall be merely that of an unfunded and unsecured promise to pay
money in the future.
<PAGE>
16.3 Employer's Liability. An Employer's liability for the payment of
benefits shall be defined only by the Plan and the Plan Agreement, as
entered into between the Employer and a Participant. An Employer shall
have no obligation to a Participant under the Plan except as expressly
provided in the Plan and his or her Plan Agreement.
16.4 Nonassignability. Neither a Participant nor any other person shall have
any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate, alienate or
convey in advance of actual receipt, the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are
expressly declared to be, unassignable and non-transferable. No part of
the amounts payable shall, prior to actual payment, be subject to
seizure, attachment, garnishment or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed by a
Participant or any other person, be transferable by operation of law in
the event of a Participant's or any other person's bankruptcy or
insolvency or be transferable to a spouse as a result of a property
settlement or otherwise.
16.5 Not a Contract of Employment. The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between any
Employer and the Participant. Such employment is hereby acknowledged to
be an "at will" employment relationship that can be terminated at any
time for any reason, or no reason, with or without cause, and with or
without notice, unless expressly provided in a written employment
agreement. Nothing in this Plan shall be deemed to give a Participant
the right to be retained in the service of any Employer as an Employee,
or to interfere with the right of any Employer to discipline or
discharge the Participant at any time.
16.6 Furnishing Information. A Participant or his or her Beneficiary will
cooperate with the Committee by furnishing any and all information
requested by the Committee and take such other actions as may be
requested in order to facilitate the administration of the Plan and the
payments of benefits hereunder, including but not limited to taking
such physical examinations as the Committee may deem necessary.
16.7 Terms. Whenever any words are used herein in the masculine, they shall
be construed as though they were in the feminine in all cases where
they would so apply; and whenever any words are used herein in the
singular or in the plural, they shall be construed as though they were
used in the plural or the singular, as the case may be, in all cases
where they would so apply.
16.8 Captions. The captions of the articles, sections and paragraphs of this
Plan are for convenience only and shall not control or affect the
meaning or construction of any of its provisions.
16.9 Governing Law. Subject to ERISA, the provisions of this Plan shall be
construed and interpreted according to the internal laws of the State
of Nevada without regard to its conflicts of laws principles.
16.10 Notice. Any notice or filing required or permitted to be given to the
Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address
below:
<PAGE>
Deferred Compensation Plan
Administrative Committee
-----------------------------------------
-----------------------------------------
International Game Technology
-----------------------------------------
-----------------------------------------
9295 Prototype Drive
Reno, Nevada 89511-8986
-----------------------------------------
Such 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.
Any notice or filing required or permitted to be given to a Participant
under this Plan shall be sufficient if in writing and hand-delivered,
or sent by mail, to the last known address of the Participant.
16.11 Successors. The provisions of this Plan shall bind and inure to the
benefit of the Participant's Employer and its successors and assigns
and the Participant and the Participant's designated Beneficiaries.
16.12 Spouse's Interest. The interest in the benefits hereunder of a spouse
of a Participant who has predeceased the Participant shall
automatically pass to the Participant and shall not be transferable by
such spouse in any manner, including but not limited to such spouse's
will, nor shall such interest pass under the laws of intestate
succession.
16.13 Validity. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect
the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal or invalid provision had never been
inserted herein.
16.14 Incompetent. If the Committee determines in its discretion that a
benefit under this Plan is to be paid to a minor, a person declared
incompetent or to a person incapable of handling the disposition of
that person's property, the Committee may direct payment of such
benefit to the guardian, legal representative or person having the care
and custody of such minor, incompetent or incapable person. The
Committee may require proof of minority, incompetence, incapacity or
guardianship, as it may deem appropriate prior to distribution of the
benefit. Any payment of a benefit shall be a payment for the account of
the Participant and the Participant's Beneficiary, as the case may be,
and shall be a complete discharge of any liability under the Plan for
such payment amount.
16.15 Court Order. The Committee is authorized to make any payments directed
by court order in any action in which the Plan or the Committee has
been named as a party. In addition, if a court determines that a spouse
or former spouse of a Participant has an interest in the Participant's
benefits under the Plan in connection with a property settlement or
otherwise, the Committee, in its sole discretion, shall have the right,
notwithstanding any election made by a Participant, to immediately
distribute the spouse's or former spouse's interest in the
Participant's benefits under the Plan to that spouse or former spouse.
<PAGE>
16.16 Distribution in the Event of Taxation.
(a) In General. If, for any reason, all or any portion of a
Participant's benefits under this Plan becomes taxable to the
Participant prior to receipt, a Participant may petition the
Committee before a Change in Control, or the trustee of the
Trust after a Change in Control, for a distribution of that
portion of his or her benefit that has become taxable. Upon
the grant of such a petition, by the Committee in its sole
discretion, a Participant's Employer shall distribute to
the Participant immediately available funds in an amount
equal to the taxable portion of his or her benefit (which
amount shall not exceed a Participant's unpaid Account
Balance under the Plan). If the petition is granted, the tax
liability distribution shall be made within 90 days of the
date when the Participant's petition is granted. Such a
distribution shall affect and reduce the benefits to be paid
under this Plan.
(b) Trust. If the Trust terminates in accordance with Section
3.6(e) of the Trust and benefits are distributed from the
Trust to a Participant in accordance with that Section, the
Participant's benefits under this Plan shall be reduced to the
extent of such distributions.
16.17 Insurance. The Employers, on their own behalf or on behalf of the
trustee of the Trust, and, in their sole discretion, may apply for and
procure insurance on the life of the Participant, in such amounts and
in such forms as the Trust may choose. The Employers or the trustee of
the Trust, as the case may be, shall be the sole owner and beneficiary
of any such insurance. The Participant shall have no interest
whatsoever in any such policy or policies, and at the request of the
Employers shall submit to medical examinations and supply such
information and execute such documents as may be required by the
insurance company or companies to whom the Employers have applied for
insurance.
16.18 Legal Fees To Enforce Rights After Change in Control. The Company and
each Employer is aware that upon the occurrence of a Change in Control,
the Board or the board of directors of a Participant's Employer (which
might then be composed of new members) or a shareholder of the Company
or the Participant's Employer, or of any successor corporation might
then cause or attempt to cause the Company, the Participant's Employer
or such successor to refuse to comply with its obligations under the
Plan and might cause or attempt to cause the Company or the
Participant's Employer to institute, or may institute, litigation
seeking to deny Participants the benefits intended under the Plan. In
these circumstances, the purpose of the Plan could be frustrated.
Accordingly, if, following a Change in Control, it should appear to any
Participant that the Company, the Participant's Employer or any
successor corporation has failed to comply with any of its obligations
under the Plan or any agreement thereunder or, if the Company, such
Employer or any other person takes any action to declare the Plan void
or unenforceable or institutes any litigation or other legal action
designed to deny, diminish or to recover from any Participant the
benefits intended to be provided, then the Company and the
Participant's Employer irrevocably authorize such Participant to retain
counsel of his or her choice at the expense of the Company and the
Participant's Employer (who shall be jointly and severally liable) to
represent such Participant in connection with the initiation or defense
of any litigation or other legal action, whether by or against the
Company, the Participant's Employer or any director, officer,
shareholder or other person affiliated with the Company, the
Participant's Employer or any successor thereto in any jurisdiction.
<PAGE>
IN WITNESS WHEREOF, the Company has signed this Plan document as of __________,
1999.
"Company"
International Game Technology, a Nevada corporation
By: __________________________________
Title: _______________________________
