Exhibit 10.1

 

 

 

 

ADAPTEC

2005 DEFERRED COMPENSATION PLAN

 

 

 

 

(Effective January 1, 2005)

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

 

Page

1.1

“Account”

1

1.2

“Adaptec”

2

1.3

“AIP”

2

1.4

“Additional Contribution”

2

1.5

“AIP Deferral Amount”

2

1.6

“Benchmark Fund”

2

1.7

“Beneficiary”

2

1.8

“Benefit Distribution Election”

2

1.9

“Benefits”

2

1.10

“Board of Directors” or “Board”

2

1.11

“Change of Control”

2

1.12

“Code”

2

1.13

“Deferred Compensation Committee”

2

1.14

“Distribution Date”

3

1.15

“Effective Date of Amended and Restated Plan”

3

1.16

“Election”

3

1.17

“Eligible Employee”

3

1.18

“Employer”

3

1.19

“Interest”

3

1.20

“Interest Rate”

3

1.21

“MIP”

3

1.22

“MIP Deferral Amount “

3

1.23

“Participant”

3

1.24

“Plan”

3

1.25

“Plan Administrator”

3

1.26

“Plan Year”

3

1.27

“Retitrement with the Consent of the Employer”

3

1.28

“Salary”

4

1.29

“Salary Deferral Amount”

4

1.30

“Termination Event”

4

1.31

“Total Disability”

4

1.32

“Trust”

4

1.33

“Trust Agreement”

4

1.34

“Trustee”

4

1.35

“VIP”

4

1.36

“VIP Deferral Amount”

4

ARTICLE II   ELIGIBILITY

5

2.1

Eligibility

5

2.2

Commencement of Participation

5

2.3

Cessation of Participation

5

2.4

Suspension of Participation.

5

 

 

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TABLE OF CONTENTS

(continued)

 

 

Page

ARTICLE III   DEFERRALS AND CONTRIBUTIONS

5

3.1

Deferral Elections.

5

3.2

Limitations on Deferrals

6

3.3

Additional Contributions

7

3.4

No Withdrawal

7

ARTICLE IV   ACCOUNTS

7

4.1

Account

7

4.2

Interest Credited to Accounts at Least Monthly

7

4.3

Determination of Interest Rate

7

ARTICLE V   BENEFITS

 

5.1

Distributions.

8

5.2

Methods of Distribution.

9

5.3

Financial Hardship Withdrawal

10

5.4

Limitation on Distributions to Covered Employees

10

5.5

Tax Withholding

11

ARTICLE VI   BENEFICIARIES

 

6.1

Designation of Beneficiary

11

6.2

No Designated Beneficiary

11

ARTICLE VII   TRUST OBLIGATION TO PAY BENEFITS

 

7.1

Deferrals Held in Trust

11

7.2

Benefits Paid From Trust

11

7.3

Trustee Investment Discretion

11

7.4

No Secured Interest

12

ARTICLE VIII   PLAN ADMINISTRATION, AMENDMENT AND TERMINATION

 

8.1

Plan Administration

12

8.2

Decisions of the Deferred Compensation Committee

13

8.3

Exclusive Benefit

13

8.4

Plan Amendment

13

8.5

Plan Termination

13

8.6

Additional Power and Responsibility Following a Change of Control

13

ARTICLE IX   MISCELLANEOUS

 

9.1

No Assignment

14

9.2

Successors

14

9.3

No Employment Agreement

14

9.4

Attorneys’ Fees

14

9.5

Arbitration

14

9.6

Governing Law

14

9.7

Entire Agreement

14

 

ADAPTEC

2005 DEFERRED COMPENSATION PLAN

(Effective January 1, 2005)

 

Adaptec, Inc. has adopted this deferred compensation plan, effective January 1,
2005, entitled the Adaptec 2005 Deferred Compensation Plan (the “Plan”). 
Adaptec also maintains another deferred compensation plan, entitled the Adaptec
Deferred Compensation Plan, which was most recently amended and restated in its
entirety, effective July 21, 2004, and which was frozen effective December 31,
2004.

The purpose of the Plan is to provide deferred compensation for a select group
of management or highly compensated employees of Adaptec and its subsidiaries. 
The Plan is intended to be a nonqualified deferred compensation plan. 
Accordingly, it is intended that the Plan be exempt from the requirements of
Parts 2, 3 and 4 of Title I of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”) pursuant to Sections 201(2), 301(a)3) and 401(a)(1)
of ERISA. This Plan is intended to meet the applicable requirements of the
American Jobs Protection Act of 2004.

 

ARTICLE I

DEFINITIONS

 

Whenever used herein, the masculine pronoun shall be deemed to include the
feminine, and the singular to include the plural, unless the context clearly
indicates otherwise, and the following definitions shall govern the Plan:

1.1           “ACCOUNT AND SUB ACCOUNT” “ACCOUNT” MEANS THE BOOK ENTRY ACCOUNT
ESTABLISHED UNDER THE PLAN FOR EACH PARTICIPANT TO WHICH THE PARTICIPANT’S
SALARY DEFERRAL AMOUNTS, AIP DEFERRAL AMOUNTS, VIP DEFERRAL AMOUNTS, MIP
DEFERRAL AMOUNTS, ANY ADDITIONAL CONTRIBUTIONS MADE BY THE EMPLOYER PURSUANT TO
ARTICLE III, AND THE INTEREST WITH RESPECT THERETO SHALL BE CREDITED.  SUCH
ACCOUNT BALANCE SHALL BE REDUCED BY ANY DISTRIBUTIONS MADE TO THE PARTICIPANT OR
THE PARTICIPANT’S BENEFICIARY(IES) AND ANY CHARGES THAT MAY BE IMPOSED ON SUCH
ACCOUNT PURSUANT TO THE TERMS OF THE PLAN.

In addition, a “Sub Account” may be established under the Plan for each
Participant who is (i) actively employed by the Employer, (ii) receiving
distributions pursuant to a Benefit Distribution Election, and (iii) elects to
make Salary deferrals and/or deferrals of amounts payable under the AIP, VIP
and/or MIP to this Plan or is receiving Additional Contributions.  Such “Sub
Account” shall be a book entry account established under the Plan for each such
Participant to which the Participant’s Salary Deferral Amounts, AIP Deferral
Amounts, VIP Deferral Amounts, MIP Deferral Amounts, any Additional
Contributions made by the Employer pursuant to Article III, and the Interest
with respect thereto shall be credited.  Such Sub Account balance shall
separately be reduced by any distributions made to the Participant or the

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Participant’s Beneficiary(ies) and any charges that may be imposed on such Sub
Account pursuant to the terms of the Plan.

Account and Sub Account may be referred to herein collectively as “Accounts.”

1.2           “ADAPTEC” MEANS ADAPTEC, INC., A DELAWARE CORPORATION AND ANY
SUCCESSOR ORGANIZATION THERETO.

1.3           “AIP”  MEANS THE ADAPTEC INCENTIVE PLAN, AS AMENDED FROM TIME TO
TIME.

1.4           “ADDITIONAL CONTRIBUTION” MEANS AN ADDITIONAL CONTRIBUTION,
CONTRIBUTED BY THE EMPLOYER ON BEHALF OF A PARTICIPANT PURSUANT TO ARTICLE III.

1.5           “AIP DEFERRAL AMOUNT” MEANS THE AMOUNT OR PERCENTAGE OF BONUS OR
INCENTIVE PAYMENTS THAT AN ELIGIBLE EMPLOYEE IS ENTITLED TO UNDER THE AIP AND
ELECTS TO CONTRIBUTE TO THE PLAN PURSUANT TO A VALID ELECTION FORM IN ACCORDANCE
WITH THE PROVISIONS OF ARTICLE III.

1.6           “BENCHMARK FUND” MEANS ONE OR MORE OF THE MUTUAL FUNDS OR
CONTRACTS SELECTED BY THE DEFERRED COMPENSATION COMMITTEE PURSUANT TO SECTION
4.3(A).

1.7           “BENEFICIARY” MEANS ONE, SOME, OR ALL (AS THE CONTEXT SHALL
REQUIRE) OF THOSE PERSONS, TRUSTS OR OTHER ENTITIES DESIGNATED BY A PARTICIPANT
TO RECEIVE THE UNDISTRIBUTED PORTION OF HIS/HER ACCOUNTS FOLLOWING THE
PARTICIPANT’S DEATH.

1.8           “BENEFIT DISTRIBUTION ELECTION” MEANS THE FORM OF ELECTION, AS
PRESCRIBED BY THE PLAN ADMINISTRATOR AND AS MAY BE MODIFIED FROM TIME TO TIME,
UPON WHICH A PARTICIPANT SHALL DESIGNATE HIS/HER DISTRIBUTION DATE.

1.9           “BENEFITS” MEANS THE AMOUNT(S) CREDITED TO PARTICIPANT’S ACCOUNTS.

1.10         “BOARD OF DIRECTORS” OR “BOARD” MEANS THE BOARD OF DIRECTORS OF
ADAPTEC.

1.11         “CHANGE OF CONTROL” MEANS (I) A “CHANGE IN THE OWNERSHIP OF A
CORPORATION” (II) A “CHANGE IN EFFECTIVE CONTROL OF A CORPORATION” OR (III) A
“CHANGE IN THE OWNERSHIP OF A SUBSTANTIAL PORTION OF A CORPORATIONS’ ASSETS” AS
SUCH TERMS ARE DEFINED IN GUIDANCE ISSUED BY THE SECRETARY OF THE TREASURY OR
INTERNAL REVENUE SERVICE PURSUANT TO SECTION 885(E) OF THE AMERICAN JOBS
CREATION ACT OF 2004, INCLUDING, NOTICE 2005-1, SECTION B, Q&AS 11-14.

1.12         “CODE” MEANS THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.

1.13         “DEFERRED COMPENSATION COMMITTEE” MEANS THE COMMITTEE APPOINTED BY
THE BOARD WHICH SHALL FUNCTION AS THE PLAN ADMINISTRATOR AND WHICH SHALL BE
COMPOSED OF THE INDIVIDUALS SERVING THE COMPANY IN THE FOLLOWING POSITIONS:

(A)           CHIEF EXECUTIVE OFFICER OF ADAPTEC

(B)           THE SENIOR EXECUTIVE OF ADAPTEC RESPONSIBLE FOR HUMAN RESOURCES

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(C)           MANAGER, EMPLOYEE BENEFITS

1.14         “DISTRIBUTION DATE” MEANS THE DATE ON WHICH DISTRIBUTION OF A
PARTICIPANT’S BENEFITS IS MADE OR COMMENCED PURSUANT TO ARTICLE V.

1.15         “EFFECTIVE DATE” MEANS JANUARY 1, 2005.

1.16         “ELECTION” MEANS THE FORM ON WHICH A PARTICIPANT ELECTS TO MAKE
SALARY DEFERRALS AND/OR DEFERRALS OF AMOUNTS PAYABLE UNDER THE AIP, VIP AND/OR
MIP TO THIS PLAN.  SUCH ELECTION SHALL BE IN A FORM PRESCRIBED BY THE PLAN
ADMINISTRATOR AS IT MAY BE MODIFIED FROM TIME TO TIME.

1.17         “ELIGIBLE EMPLOYEE” MEANS AN EMPLOYEE OF THE EMPLOYER WHO IS A
MEMBER OF A SELECT GROUP OF MANAGEMENT OR HIGHLY COMPENSATED EMPLOYEES AS MORE
PARTICULARLY DESCRIBED IN ARTICLE II AND WHO HAS BEEN DESIGNATED BY THE PLAN
ADMINISTRATOR, IN THE PLAN ADMINISTRATOR’S SOLE DISCRETION, TO BE ELIGIBLE TO
PARTICIPATE IN THE PLAN AND SHALL ALSO INCLUDE EVERY NON-EMPLOYEE MEMBER OF THE
BOARD OF DIRECTORS.

1.18         “EMPLOYER” MEANS ADAPTEC OR A SUBSIDIARY THEREOF THAT HAS ADOPTED
THIS PLAN WITH THE APPROVAL OF ADAPTEC.

1.19         “INTEREST” MEANS THE INVESTMENT RETURN OR LOSS DETERMINED IN
ACCORDANCE WITH ARTICLE IV, WHICH SHALL BE CREDITED TO THE PARTICIPANT’S
ACCOUNTS.

1.20         “INTEREST RATE” SHALL HAVE THE MEANING SET FORTH IN SECTION 4.3(C).

1.21         “MIP” MEANS THE MANAGEMENT INCENTIVE PLAN ADOPTED BY THE COMPANY IN
JULY 2004, AS IT MAY BE AMENDED FROM TIME TO TIME.

1.22         “MIP DEFERRAL AMOUNT” MEANS THE AMOUNT OR PERCENTAGE OF BONUS OR
INCENTIVE PAYMENTS THAT AN ELIGIBLE EMPLOYEE IS ENTITLED TO UNDER THE MIP AND
ELECTS TO CONTRIBUTE TO THE PLAN PURSUANT TO A VALID ELECTION FORM IN ACCORDANCE
WITH THE PROVISIONS OF ARTICLE III.

1.23         “PARTICIPANT” MEANS AN ELIGIBLE EMPLOYEE WHO HAS ELECTED TO
PARTICIPATE IN THE PLAN BY EXECUTING AN ELECTION FORM.  A PARTICIPANT SHALL ALSO
MEAN AN ELIGIBLE EMPLOYEE FOR WHOM ADDITIONAL CONTRIBUTIONS ARE MADE, REGARDLESS
OF WHETHER SUCH ELIGIBLE EMPLOYEE HAS EXECUTED AN ELECTION FORM.

1.24         “PLAN” MEANS THIS ADAPTEC 2005 DEFERRED COMPENSATION PLAN, AS IT
MAY BE AMENDED FROM TIME TO TIME.

1.25         “PLAN ADMINISTRATOR” MEANS THE DEFERRED COMPENSATION COMMITTEE
SELECTED TO ADMINISTER THIS PLAN AND TO TAKE SUCH OTHER ACTIONS AS MAY BE
SPECIFIED HEREIN.

1.26         “PLAN YEAR” MEANS THE CALENDAR YEAR.

1.27         “RETIREMENT WITH THE CONSENT OF THE EMPLOYER” MEANS A PARTICIPANT’S
VOLUNTARY TERMINATION OF EMPLOYMENT OR CEASING TO SERVE AS A NON-EMPLOYEE MEMBER
OF THE BOARD, IF PRIOR

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TO THE DATE EMPLOYMENT IS TERMINATED OR BOARD MEMBERSHIP CEASES THE PARTICIPANT
COMPLETED AT LEAST FIVE YEARS OF SERVICE FOR THE EMPLOYER, INCLUDING SERVICE FOR
ANY SUBSIDIARY OR FORMER SUBSIDIARY EITHER AS AN EMPLOYEE OR MEMBER OF THE
BOARD.

1.28         “SALARY”  MEANS THE BASE SALARY PAID BY THE EMPLOYER, BUT SHALL NOT
INCLUDE ANY OTHER FORM OF COMPENSATION, WHETHER TAXABLE OR NON-TAXABLE,
INCLUDING, BUT NOT LIMITED TO, BONUSES, COMMISSIONS, OVERTIME, INCENTIVE
PAYMENTS, NON-MONETARY AWARDS AND OTHER FORMS OF ADDITIONAL COMPENSATION.  IN
THE CASE OF A PARTICIPANT WHO IS A NON-EMPLOYEE MEMBER OF THE BOARD, “SALARY”
SHALL MEAN ALL CASH COMPENSATION FOR SERVICE AS A MEMBER OF THE BOARD.

1.29         “SALARY DEFERRAL AMOUNT” MEANS THE SALARY DEFERRAL AMOUNT WHICH THE
PARTICIPANT ELECTS TO CONTRIBUTE TO THE PLAN PURSUANT TO A VALID ELECTION FORM
IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE III.

1.30         “TERMINATION EVENT” MEANS THE TERMINATION OF THE PARTICIPANT’S
EMPLOYMENT WITH THE EMPLOYER OR CEASING TO BE A MEMBER OF THE BOARD FOR ANY
REASON, INCLUDING TERMINATION OR CESSATION IN THE EVENT OF TOTAL DISABILITY BUT
NOT INCLUDING THE PARTICIPANT’S RETIREMENT WITH THE CONSENT OF THE EMPLOYER.

1.31         “TOTAL DISABILITY” A PARTICIPANT SHALL BE CONSIDERED DISABLED IF
THE PARTICIPANT IS, BY REASON OF ANY MEDICALLY DETERMINABLE PHYSICAL OR MENTAL
IMPAIRMENT WHICH CAN BE EXPECTED TO RESULT IN DEATH OR CAN BE EXPECTED TO LAST
FOR A CONTINUOUS PERIOD, OF NOT LESS THAN TWELVE (12) MONTHS, RECEIVING INCOME
REPLACEMENT BENEFITS FOR A PERIOD OF NOT LESS THAN THREE (3) MONTHS UNDER AN
ACCIDENT AND HEALTH PLAN COVERING EMPLOYEES OF THE PARTICIPANT’S EMPLOYER.

1.32         “TRUST” MEANS THE LEGAL ENTITY CREATED BY THE TRUST AGREEMENT.

1.33         “TRUST AGREEMENT” MEANS THAT TRUST AGREEMENT ENTERED INTO BETWEEN
ADAPTEC AND PUTNAM FIDUCIARY TRUST COMPANY, EFFECTIVE APRIL 1, 2002, AS AMENDED
EFFECTIVE JANUARY 1, 2005, AS IT MAY SUBSEQUENTLY BE AMENDED FROM TIME TO TIME.

1.34         “TRUSTEE” MEANS THE ORIGINAL TRUSTEE(S) NAMED IN THE TRUST
AGREEMENT AND ANY DULY APPOINTED SUCCESSOR(S) THERETO.

1.35         “VIP” MEANS THE VARIABLE INCENTIVE PLAN MAINTAINED BY ADAPTEC, AS
IT MAY BE AMENDED FROM TIME TO TIME.

1.36         “VIP DEFERRAL AMOUNT” MEANS THE AMOUNT OR PERCENTAGE OF BONUS OR
INCENTIVE PAYMENTS THAT AN ELIGIBLE EMPLOYEE IS ENTITLED TO UNDER THE VIP AND
ELECTS TO CONTRIBUTE TO THE PLAN PURSUANT TO A VALID ELECTION FORM IN ACCORDANCE
WITH THE PROVISIONS OF ARTICLE III.

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ARTICLE II

ELIGIBILITY

 

2.1           ELIGIBILITY.  ELIGIBILITY FOR PARTICIPATION IN THE PLAN SHALL BE
LIMITED TO NON-EMPLOYEE MEMBERS OF THE BOARD AND TO KEY MANAGEMENT OR HIGHLY
COMPENSATED EMPLOYEES OF THE EMPLOYER WHO ARE SELECTED BY THE PLAN
ADMINISTRATOR, IN ITS SOLE DISCRETION, TO PARTICIPATE IN THE PLAN.  INDIVIDUALS
WHO ARE IN THIS SELECT GROUP SHALL BE NOTIFIED AS TO THEIR ELIGIBILITY TO
PARTICIPATE IN THE PLAN.  FOR PURPOSES OF THE PLAN, THE PHRASE “SELECT GROUP OF
MANAGEMENT OR HIGHLY COMPENSATED EMPLOYEES” SHALL INCLUDE THOSE INDIVIDUALS
EMPLOYED AS DIRECTORS AND THOSE INDIVIDUALS EMPLOYED IN POSITIONS AT A HIGHER
LEVEL, ALL AS DETERMINED BY THE PLAN ADMINISTRATOR.

2.2           COMMENCEMENT OF PARTICIPATION.  AN ELIGIBLE EMPLOYEE MAY BEGIN
PARTICIPATION IN THE PLAN UPON THE ELIGIBLE EMPLOYEE’S SUBMISSION OF A VALID
ELECTION FORM PURSUANT TO ARTICLE III.  IN ORDER TO COMMENCE SALARY DEFERRALS
AND/OR DEFERRALS OF AMOUNTS PAYABLE UNDER THE AIP, VIP AND/OR MIP, THE ELECTION
FORM MUST BE RETURNED TO THE PLAN ADMINISTRATOR WITHIN THIRTY (30) DAYS OF THE
DATE AN INDIVIDUAL FIRST BECOMES AN ELIGIBLE EMPLOYEE; OTHERWISE THE ELECTION
FORM MUST BE RETURNED TO THE PLAN ADMINISTRATOR IN ADVANCE OF THE NEXT
SUBSEQUENT PLAN YEAR, IN ACCORDANCE WITH RULES AND PROCEDURES ESTABLISHED BY THE
PLAN ADMINISTRATOR.

2.3           CESSATION OF PARTICIPATION.  ACTIVE PARTICIPATION IN THE PLAN
SHALL END WHEN A PARTICIPANT’S EMPLOYMENT TERMINATES FOR ANY REASON.  NO
CONTRIBUTIONS TO THE PLAN SHALL BE MADE WITH RESPECT TO COMPENSATION PAID AFTER
SUCH TERMINATION DATE.  UPON TERMINATION OF EMPLOYMENT, A PARTICIPANT SHALL
REMAIN AN INACTIVE PARTICIPANT IN THE PLAN UNTIL ALL OF THE BENEFITS TO WHICH HE
OR SHE IS ENTITLED UNDER THIS PLAN HAVE BEEN PAID IN FULL.

2.4           SUSPENSION OF PARTICIPATION.  A PARTICIPANT WHO IS EMPLOYED BY A
SUBSIDIARY WHICH HAS NOT ADOPTED THE PLAN SHALL BE A SUSPENDED PARTICIPANT.  NO
CONTRIBUTIONS TO THE PLAN SHALL BE MADE ON BEHALF OF A SUSPENDED PARTICIPANT. 
EXCEPT AS OTHERWISE PROVIDED IN THIS ARTICLE II, A SUSPENDED PARTICIPANT SHALL
CONTINUE TO PARTICIPATE IN THE PLAN IN ACCORDANCE WITH ITS TERMS.

 

 

ARTICLE III

DEFERRALS AND CONTRIBUTIONS

 

3.1           DEFERRAL ELECTIONS GENERALLY.  EACH PARTICIPANT MUST COMPLETE A
DEFERRAL ELECTION IN THE FORM AND MANNER SPECIFIED BY THE COMMITTEE FOR EACH
PLAN YEAR WITH RESPECT TO WHICH HE OR SHE WISHES TO DEFER ALL OR PART OF HIS OR
HER SALARY OR PAYMENT UNDER THE AIP, VIP AND/OR MIP.  THE SALARY DEFERRAL
AMOUNT, AIP DEFERRAL AMOUNT, VIP DEFERRAL AMOUNT AND/OR MIP DEFERRAL AMOUNT
SHALL NOT BE PAID TO THE PARTICIPANT, BUT SHALL BE WITHHELD AND SHALL BE
CREDITED TO THE PARTICIPANT’S ACCOUNT OR SUB ACCOUNT (AS APPROPRIATE).  TO BE
EFFECTIVE, EACH SUCH DEFERRAL ELECTION MUST SATISFY THE FOLLOWING RULES:

(A)           THE DEFERRAL ELECTION FORM MUST BE SIGNED AND DATED BY THE
PARTICIPANT, SPECIFY THE DEFERRAL AMOUNT OR PERCENTAGE AND COMPLY WITH SUCH
OTHER RULES AND PROCEDURES ESTABLISHED BY THE PLAN ADMINISTRATOR.

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(i)            A Participant who is a non-employee member of the Board may elect
to reduce his or her Salary by 50% or 100% as set forth in a written Election
filed with the Plan Administrator.

(B)           ALL DEFERRAL ELECTIONS ARE IRREVOCABLE THROUGHOUT THE PLAN YEAR
FOR WHICH THEY ARE MADE.  AN ELECTION TO STOP DEFERRALS OR TO CHANGE THE SALARY
DEFERRAL AMOUNT, AIP DEFERRAL AMOUNT, VIP DEFERRAL AMOUNT AND/OR MIP DEFERRAL
AMOUNT WILL TAKE EFFECT ON THE FIRST DAY OF THE PLAN YEAR THAT IS AT LEAST 20
DAYS (OR SUCH LESSER NUMBER OF DAYS AS THE PLAN ADMINISTRATOR MAY SPECIFY) AFTER
THE DATE THE NEW VALID ELECTION FORM IS FILED WITH THE PLAN ADMINISTRATOR. 
NOTWITHSTANDING THE FOREGOING, IN ACCORDANCE WITH NOTICE 2005-1, A PARTICIPANT
MAY EITHER TERMINATE PARTICIPATION IN THE PLAN OR CANCEL AN ELECTION TO DEFER
SALARY OR PAYMENTS UNDER THE AIP, VIP, AND/OR MIP WHICH ARE SUBJECT TO CODE
SECTION 409A, PROVIDED SUCH TERMINATION OR CANCELLATION IS FILED ON OR BEFORE
DECEMBER 20, 2005, IN ACCORDANCE WITH THE RULES AND PROCEDURES ESTABLISHED BY
THE PLAN ADMINISTRATOR.  THE AMOUNTS SUBJECT TO ANY SUCH TERMINATION OR
CANCELLATION SHALL BE INCLUDIBLE IN INCOME OF THE PARTICIPANT IN CALENDAR YEAR
2005 OR, IF LATER, THE PARTICIPANT’S TAXABLE YEAR IN WHICH THE AMOUNT IS EARNED
AND VESTED (AS DEFINED IN NOTICE 2005-1, Q&A 16).

(C)           THE DEFERRAL ELECTION MUST GENERALLY BE RECEIVED BY THE PLAN
ADMINISTRATOR BEFORE THE BEGINNING OF THE PLAN YEAR IN WHICH THE SALARY, AIP,
VIP AND/OR MIP IS EARNED; PROVIDED, HOWEVER, IN THE CASE OF A NEWLY-ELIGIBLE
ELIGIBLE EMPLOYEE, THE DEFERRAL ELECTION FORM (I) MUST BE RECEIVED BY THE PLAN
ADMINISTRATOR WITHIN THIRTY (30) DAYS OF THE DATE ON WHICH THE ELIGIBLE EMPLOYEE
BECOMES ELIGIBLE, AND (II) WILL BE EFFECTIVE WITH RESPECT TO SALARY, AIP, VIP
AND/OR MIP EARNED AFTER THE ELECTION.

3.2           LIMITATIONS ON DEFERRALS.  A PARTICIPANT’S SALARY, AIP, VIP,
AND/OR MIP DEFERRAL AMOUNT SHALL BE LIMITED AS FOLLOWS:

(A)           THE SALARY DEFERRAL AMOUNT, AIP DEFERRAL AMOUNT, VIP DEFERRAL,
AND/OR MIP DEFERRAL AMOUNT ELECTED BY THE PARTICIPANT SHALL BE REDUCED BY THE
AMOUNT(S), IF ANY, WHICH MAY BE NECESSARY:

(I)            TO SATISFY ALL APPLICABLE INCOME AND EMPLOYMENT TAX WITHHOLDING
AND FICA CONTRIBUTIONS;

(II)           TO PAY ALL CONTRIBUTIONS ELECTED BY THE PARTICIPANT PURSUANT TO
APPLICABLE ADAPTEC HEALTH, WELFARE AND FRINGE BENEFIT PROGRAMS; AND

(III)          TO SATISFY ALL GARNISHMENTS OR OTHER AMOUNTS REQUIRED TO BE
WITHHELD BY APPLICABLE LAW OR COURT ORDER.

(B)           ANY WITHHOLDING OR SALARY DEFERRAL ELECTIONS MADE UNDER AN
EMPLOYER SPONSORED 401(K) PLAN SHALL BE DETERMINED BASED ON THE PARTICIPANT’S
COMPENSATION AFTER REDUCTION FOR THE SALARY DEFERRAL AMOUNT, AIP DEFERRAL
AMOUNT, VIP DEFERRAL AMOUNT, AND/OR MIP DEFERRAL AMOUNT CONTRIBUTED TO THIS
PLAN.

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3.3           ADDITIONAL CONTRIBUTIONS.  ADDITIONAL CONTRIBUTIONS MAY BE
CREDITED TO A PARTICIPANT’S ACCOUNT OR SUB ACCOUNT (AS APPROPRIATE) IN SUCH
AMOUNTS AND AT SUCH TIMES AS THE EMPLOYER MAY, IN ITS SOLE DISCRETION, DETERMINE
AND COMMUNICATE TO THE PARTICIPANT.  THE EMPLOYER SHALL BE UNDER NO OBLIGATION
TO CONTINUE TO CREDIT ADDITIONAL CONTRIBUTIONS AND MAY DISCONTINUE OR CHANGE THE
AMOUNT OR METHOD OF CALCULATING THE AMOUNT OF SUCH ADDITIONAL CONTRIBUTIONS AT
ANY TIME.

3.4           NO WITHDRAWAL.  EXCEPT AS PROVIDED IN SECTION 5.3 BELOW, AMOUNTS
CREDITED TO A PARTICIPANT’S ACCOUNTS MAY NOT BE WITHDRAWN BY A PARTICIPANT AND
SHALL BE PAID ONLY IN ACCORDANCE WITH THE PROVISIONS OF THIS PLAN.

 

ARTICLE IV

ACCOUNTS

4.1           ACCOUNT AND/OR SUB ACCOUNT.  AN ACCOUNT SHALL BE ESTABLISHED AND
MAINTAINED FOR EACH PARTICIPANT.  THE PARTICIPANT’S ACCOUNT SHALL BE CREDITED
WITH THE PARTICIPANT’S SALARY DEFERRAL AMOUNT, AIP DEFERRAL AMOUNT, VIP DEFERRAL
AMOUNT, MIP DEFERRAL AMOUNT AND ADDITIONAL CONTRIBUTIONS, IF ANY, MADE ON BEHALF
OF EACH PARTICIPANT.  THE PARTICIPANT’S ACCOUNT SHALL BE CREDITED (DEBITED) WITH
THE APPLICABLE INTEREST, AS SET FORTH IN SECTION 4.2.  THE PARTICIPANT’S ACCOUNT
SHALL BE REDUCED BY DISTRIBUTIONS THEREFROM AND ANY CHARGES WHICH MAY BE IMPOSED
ON THE ACCOUNT PURSUANT TO THE TERMS OF THE PLAN.

A “SUB ACCOUNT” MAY BE ESTABLISHED UNDER THE PLAN FOR EACH PARTICIPANT WHO IS
(I) ACTIVELY EMPLOYED BY THE EMPLOYER, (II) RECEIVING DISTRIBUTIONS PURSUANT TO
A BENEFIT DISTRIBUTION ELECTION, AND (III) ELECTS TO MAKE SALARY DEFERRALS
AND/OR DEFERRALS OF AMOUNTS PAYABLE UNDER THE AIP, VIP AND/OR MIP TO THIS PLAN
OR IS RECEIVING ADDITIONAL CONTRIBUTIONS.  THE PARTICIPANT’S SUB ACCOUNT SHALL
BE CREDITED (DEBITED) WITH ALL APPLICABLE INTEREST, AS SET FORTH IN SECTION
4.2.  THE PARTICIPANT’S SUB ACCOUNT SHALL SEPARATELY BE REDUCED BY ANY
DISTRIBUTIONS THEREFROM AND ANY CHARGES THAT MAY BE IMPOSED ON SUCH SUB ACCOUNT
PURSUANT TO THE TERMS OF THE PLAN.

4.2           INTEREST CREDITED TO ACCOUNTS AT LEAST MONTHLY.  EACH ACCOUNT OR
SUB ACCOUNT (AS APPROPRIATE) SHALL BE CREDITED (DEBITED) MONTHLY, OR MORE
FREQUENTLY AS THE COMMITTEE MAY SPECIFY, IN AN AMOUNT EQUAL TO THE ACCOUNT OR
SUB ACCOUNT (AS APPROPRIATE) BALANCE ON THE LAST DAY OF THE PRIOR ACCOUNTING
PERIOD MULTIPLIED BY THE INTEREST RATE.

4.3           DETERMINATION OF INTEREST RATE.

(A)           THE DEFERRED COMPENSATION COMMITTEE SHALL DESIGNATE THE PARTICULAR
FUNDS OR CONTRACTS WHICH SHALL CONSTITUTE THE BENCHMARK FUNDS, AND MAY, IN ITS
SOLE DISCRETION, CHANGE OR ADD TO THE BENCHMARK FUNDS.

(B)           EACH PARTICIPANT MAY SELECT AMONG THE BENCHMARK FUNDS AND SPECIFY
THE MANNER IN WHICH HIS OR HER ACCOUNTS SHALL BE DEEMED TO BE INVESTED, SOLELY
FOR PURPOSES OF DETERMINING THE PARTICIPANT’S INTEREST RATE.  THE DEFERRED
COMPENSATION COMMITTEE SHALL ESTABLISH AND COMMUNICATE THE RULES, PROCEDURES AND
DEADLINES FOR MAKING AND CHANGING

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BENCHMARK FUND SELECTIONS.  THE EMPLOYER SHALL HAVE NO OBLIGATION TO ACQUIRE
INVESTMENTS CORRESPONDING TO THE PARTICIPANT’S BENCHMARK FUND SELECTIONS.

(C)           THE INTEREST RATE IS THE INVESTMENT RETURN, NET OF ADMINISTRATIVE
FEES AND INVESTMENT MANAGEMENT FEES AND OTHER APPLICABLE FEES OR CHARGES FOR A
SPECIFIED ACCOUNTING PERIOD, OF THE BENCHMARK FUND(S) DESIGNATED BY PARTICIPANT
AND OTHER APPLICABLE FEES OR CHARGES.  THE INTEREST RATE MAY BE NEGATIVE IF THE
APPLICABLE BENCHMARK FUND(S) SUSTAINED A LOSS DURING THE SPECIFIED ACCOUNTING
PERIOD.

 

ARTICLE V

BENEFITS

5.1           DISTRIBUTIONS.

(A)           TIMING OF DISTRIBUTION.  THE AMOUNTS CREDITED TO A PARTICIPANT’S
ACCOUNT OR SUB ACCOUNT SHALL BE PAID (OR PAYMENT SHALL COMMENCE) WITHIN A
REASONABLE TIME AFTER:

(I)            IF THE PARTICIPANT IS CURRENTLY EMPLOYED BY THE EMPLOYER THE
BENEFIT DISTRIBUTION DATE, AS DEFINED IN SECTION 5.1(B), ON WHICH THE
PARTICIPANT ELECTED TO RECEIVE A DISTRIBUTION OF BENEFITS FROM HIS/HER ACCOUNT
OR SUB ACCOUNT; OR

(II)           IF THE PARTICIPANT HAS RETIRED WITH THE CONSENT OF THE EMPLOYER,
THE BENEFIT DISTRIBUTION DATE, AS DEFINED IN ARTICLE 5.1(B), ON WHICH THE
PARTICIPANT ELECTED TO RECEIVE A DISTRIBUTION OF BENEFIT, OR, IF NO SUCH BENEFIT
DISTRIBUTION ELECTION IS THEN IN EFFECT, SIX (6) MONTHS (OR AS SOON AS
ADMINISTRATIVELY FEASIBLE THEREAFTER) AFTER THE DATE OF SUCH RETIREMENT WITH THE
CONSENT OF EMPLOYER; OR

(III)          IF THE PARTICIPANT HAS A TERMINATION EVENT, SIX (6) MONTHS (OR AS
SOON AS ADMINISTRATIVELY FEASIBLE THEREAFTER) AFTER THE DATE OF SUCH TERMINATION
EVENT;

(IV)          THE DATE OF THE DEATH OF THE PARTICIPANT;

(V)           A CHANGE OF CONTROL EVENT.

(B)           BENEFIT DISTRIBUTION DATE.

(I)            ONE-YEAR ADVANCE ELECTION.  A PARTICIPANT MAY ELECT A
DISTRIBUTION DATE BY FILING A BENEFIT DISTRIBUTION ELECTION FORM AT THE TIME OF
THE DEFERRAL ELECTION FORM IN SUCH MANNER AS THE PLAN ADMINISTRATOR SHALL
SPECIFY.  SUCH BENEFIT DISTRIBUTION ELECTION FORM SHALL SPECIFY A DISTRIBUTION
DATE WHICH SHALL BE AT LEAST ONE YEAR FROM THE DATE THE BENEFIT DISTRIBUTION
ELECTION IS DELIVERED TO THE PLAN ADMINISTRATOR.  EXCEPT AS OTHERWISE PROVIDED
IN THIS ARTICLE V, THE BENEFIT DISTRIBUTION ELECTION SHALL APPLY TO ALL AMOUNTS
CREDITED TO A PARTICIPANT’S ACCOUNT ON THE DISTRIBUTION DATE DESIGNATED THEREIN,
OR TO SUCH LESSER DOLLAR AMOUNT AS MAY BE SPECIFIED IN THE BENEFIT DISTRIBUTION
ELECTION FORM.  A SEPARATE BENEFIT DISTRIBUTION ELECTION FORM MUST BE MADE WITH
RESPECT TO ANY SUB ACCOUNT.  EXCEPT AS OTHERWISE

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PROVIDED IN THIS ARTICLE V, A BENEFIT DISTRIBUTION ELECTION MADE WITH RESPECT TO
A PARTICIPANT’S ACCOUNT SHALL NOT APPLY TO THE PARTICIPANT’S SUB ACCOUNT.

(II)           REVOCATION OR AMENDMENT OF BENEFIT DISTRIBUTION ELECTION.  A
PARTICIPANT MAY REVOKE AND/OR AMEND A BENEFIT DISTRIBUTION ELECTION PREVIOUSLY
MADE ONLY IN ACCORDANCE WITH THE RULES UNDER CODE SECTION 409(A).  GENERALLY, A
SUBSEQUENT ELECTION PURSUANT TO THIS SECTION 5.1(B)(II):  (A) CANNOT TAKE EFFECT
FOR TWELVE (12) MONTHS, (B) MUST OCCUR AT LEAST TWELVE (12) MONTHS BEFORE THE
FIRST SCHEDULED PAYMENT UNDER A PAYMENT AT A SPECIFIED DISTRIBUTION DATE ELECTED
PURSUANT TO SECTION 5.1(B)(I), AND (C) MUST DEFER A PREVIOUSLY ELECTED
DISTRIBUTION DATE AT LEAST FIVE (5) ADDITIONAL YEARS.

(C)           TERMINATION EVENT.  NOTWITHSTANDING ANY PRIOR BENEFIT DISTRIBUTION
ELECTION, IF THE PARTICIPANT HAS A TERMINATION EVENT OTHER THEN A RETIREMENT
WITH THE CONSENT OF THE EMPLOYER, DISTRIBUTION OF THE PARTICIPANT’S ACCOUNTS
SHALL COMMENCE SIX (6) MONTHS (OR AS SOON AS ADMINISTRATIVELY FEASIBLE
THEREAFTER) AFTER THE TERMINATION EVENT.

(D)           CHANGE OF CONTROL EVENT.  IN THE EVENT OF A CHANGE OF CONTROL, ALL
ACCOUNTS SHALL BE DISTRIBUTED AS SOON AS ADMINISTRATIVELY FEASIBLE AFTER THE
CHANGE OF CONTROL.

5.2           METHODS OF DISTRIBUTION.

(A)           METHOD OF DISTRIBUTION WHILE ACTIVELY EMPLOYED OR FOLLOWING A
RETIREMENT WITH THE CONSENT OF THE COMPANY.  IF A DISTRIBUTION OF THE
PARTICIPANT’S BENEFITS COMMENCES WHILE HE OR SHE IS ACTIVELY EMPLOYED BY THE
EMPLOYER PURSUANT TO THE PARTICIPANT’S BENEFIT DISTRIBUTION ELECTION OR BECAUSE
THE PARTICIPANT’S TERMINATION OF EMPLOYMENT SATISFIES THE REQUIREMENTS FOR
RETIREMENT WITH THE CONSENT OF THE COMPANY, THEN SUCH PARTICIPANT’S ACCOUNTS
SHALL BE PAID IN ONE OF THE FOLLOWING METHODS SPECIFIED IN HIS OR HER MOST
RECENT VALID ELECTION FORM FILED WITH THE PLAN ADMINISTRATOR:

(I)            A SINGLE LUMP SUM PAYMENT;

(II)           TWO PAYMENTS, ON THE DATES AND IN THE AMOUNTS SPECIFIED IN THE
PARTICIPANT’S ELECTION;

(III)          IN TWENTY (20) SUBSTANTIALLY EQUAL QUARTERLY PAYMENTS; OR

(IV)          IN FORTY (40) SUBSTANTIALLY EQUAL QUARTERLY PAYMENTS.

For purposes of this provision, substantially equal payments shall be determined
by dividing the Participant’s Account balance by the number of payments
remaining.

(B)           METHOD OF DISTRIBUTION FOLLOWING A TERMINATION EVENT OR DEATH.  IF
A DISTRIBUTION OF BENEFITS IS MADE ON ACCOUNT OF A TERMINATION EVENT OR THE
DEATH OF A PARTICIPANT, THE PARTICIPANT’S ACCOUNTS SHALL BE DISTRIBUTED IN A
LUMP SUM PAYMENT.

(C)           METHOD OF DISTRIBUTION FOLLOWING A CHANGE OF CONTROL.  GENERALLY,
ALL ACCOUNTS SHALL BE PAID IN A LUMP SUM PAYMENT FOLLOWING A CHANGE OF CONTROL. 
NOTWITHSTANDING

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THE FOREGOING, IF A LUMP SUM PAYMENT WILL RESULT IN AN “EXCESS PARACHUTE
PAYMENT”, AS THAT TERM IS DEFINED IN THE CODE, THE PLAN ADMINISTRATOR, IN ITS
SOLE DISCRETION, MAY DETERMINE THAT PAYMENT SHALL BE MADE BY SOME OTHER METHOD.

5.3           FINANCIAL HARDSHIP WITHDRAWAL.  WITH THE CONSENT OF THE PLAN
ADMINISTRATOR, A PARTICIPANT MAY WITHDRAW UP TO ONE HUNDRED PERCENT (100%) OF
THE AMOUNT CREDITED TO HIS OR HER ACCOUNTS AS MAY BE REQUIRED TO MEET A SUDDEN
UNFORESEEABLE FINANCIAL EMERGENCY OF THE PARTICIPANT IN ACCORDANCE WITH CODE
SECTION 409A.  SUCH HARDSHIP DISTRIBUTION SHALL BE SUBJECT TO THE FOLLOWING
PROVISIONS.

(A)           THE HARDSHIP WITHDRAWAL MUST BE NECESSARY TO SATISFY THE
UNFORESEEABLE EMERGENCY AND NO MORE MAY BE WITHDRAWN FROM THE PARTICIPANT’S
ACCOUNTS THAN IS REQUIRED TO RELIEVE THE FINANCIAL NEED AFTER TAKING INTO
ACCOUNT OTHER RESOURCES THAT ARE REASONABLY AVAILABLE TO THE PARTICIPANT FOR
THIS PURPOSE.

(B)           THE PARTICIPANT MUST CERTIFY THAT THE FINANCIAL NEED CANNOT BE
RELIEVED:  (I) THROUGH REIMBURSEMENT OR COMPENSATION BY INSURANCE OR OTHERWISE;
(II) BY LIQUIDATION OF THE PARTICIPANT’S ASSETS, TO THE EXTENT SUCH LIQUIDATION
WOULD NOT ITSELF CAUSE AN IMMEDIATE AND HEAVY FINANCIAL NEED; (III) BY
DISCONTINUING THE PARTICIPANT’S SALARY DEFERRALS AND DEFERRALS OF AMOUNTS
PAYABLE UNDER THE AIP, VIP AND MIP; OR (IV) BY BORROWING FROM COMMERCIAL SOURCES
ON REASONABLE COMMERCIAL TERMS.

(C)           AN UNFORESEEABLE FINANCIAL EMERGENCY IS A SEVERE FINANCIAL
HARDSHIP TO PARTICIPANT RESULTING FROM A SUDDEN AND UNEXPECTED ILLNESS OR
ACCIDENT OF PARTICIPANT OR OF A DEPENDENT OF PARTICIPANT (AS DEFINED IN SECTION
152(A) OF THE CODE), LOSS OF PARTICIPANT’S PROPERTY DUE TO CASUALTY, OR OTHER
SIMILAR EXTRAORDINARY AND UNFORESEEABLE CIRCUMSTANCES ARISING AS A RESULT OF
EVENTS BEYOND THE CONTROL OF PARTICIPANT.  NEITHER THE NEED TO PAY TUITION
EXPENSES ON BEHALF OF THE PARTICIPANT OR THE PARTICIPANT’S SPOUSE OR CHILDREN
NOR THE DESIRE TO PURCHASE A HOME SHALL BE CONSIDERED AN UNFORESEEABLE
EMERGENCY.

(D)           THE PLAN ADMINISTRATOR, IN ITS SOLE DISCRETION, SHALL DETERMINE IF
THERE IS AN UNFORESEEABLE FINANCIAL EMERGENCY, IF THE PARTICIPANT HAS OTHER
RESOURCES TO SATISFY SUCH EMERGENCY AND THE AMOUNT OF THE HARDSHIP WITHDRAWAL
THAT IS REQUIRED TO ALLEVIATE THE PARTICIPANT’S FINANCIAL HARDSHIP.

(E)           A PARTICIPANT SHALL BE PROHIBITED FROM MAKING ANY FURTHER SALARY
DEFERRALS OR DEFERRALS OF AMOUNTS PAYABLE UNDER THE AIP, VIP OR MIP AND THE
EMPLOYER SHALL NOT MAKE ANY ADDITIONAL CONTRIBUTIONS PURSUANT TO THE PLAN FOR
THE REMAINDER OF THE PLAN YEAR IN WHICH A FINANCIAL HARDSHIP WITHDRAWAL OCCURS.

5.4           LIMITATION ON DISTRIBUTIONS TO COVERED EMPLOYEES.  NOTWITHSTANDING
ANY OTHER PROVISION OF THIS ARTICLE V, IN THE EVENT THAT THE PARTICIPANT IS A
“COVERED EMPLOYEE” AS DEFINED IN SECTION 162(M)(3) OF THE CODE, OR WOULD BE A
COVERED EMPLOYEE IF THE BENEFITS WERE DISTRIBUTED IN ACCORDANCE WITH HIS OR HER
BENEFIT DISTRIBUTION ELECTION OR HARDSHIP, THE MAXIMUM AMOUNT WHICH MAY BE
DISTRIBUTED FROM THE PARTICIPANT’S ACCOUNTS, IN ANY PLAN YEAR, SHALL NOT EXCEED
ONE MILLION DOLLARS ($1,000,000) LESS THE AMOUNT OF COMPENSATION PAID TO THE
PARTICIPANT IN SUCH PLAN

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YEAR WHICH IS NOT “PERFORMANCE-BASED” (AS DEFINED IN CODE SECTION 162(M)(4)(C)),
WHICH AMOUNT SHALL BE REASONABLY DETERMINED BY THE PLAN ADMINISTRATOR AT THE
TIME OF THE PROPOSED DISTRIBUTION. ANY AMOUNT WHICH IS NOT DISTRIBUTED TO THE
PARTICIPANT IN A PLAN YEAR AS A RESULT OF THIS LIMITATION SHALL BE DISTRIBUTED
TO THE PARTICIPANT IN THE NEXT PLAN YEAR, SUBJECT TO COMPLIANCE WITH THE
FOREGOING LIMITATION SET FORTH IN THIS SECTION 5.4.

5.5           TAX WITHHOLDING.  ALL PAYMENTS UNDER THIS ARTICLE V SHALL BE
SUBJECT TO ALL APPLICABLE WITHHOLDING FOR STATE AND FEDERAL INCOME TAX AND TO
ANY OTHER FEDERAL, STATE OR LOCAL TAX WHICH MAY BE APPLICABLE TO SUCH PAYMENTS.

 

ARTICLE VI

BENEFICIARIES

6.1           DESIGNATION OF BENEFICIARY.  THE PARTICIPANT SHALL HAVE THE RIGHT
TO DESIGNATE ON SUCH FORM AS MAY BE PRESCRIBED BY THE PLAN ADMINISTRATOR, ONE OR
MORE BENEFICIARIES TO RECEIVE ANY BENEFITS DUE UNDER ARTICLE V WHICH MAY REMAIN
UNPAID ON THE DATE OF THE PARTICIPANT’S DEATH.  THE PARTICIPANT SHALL HAVE THE
RIGHT AT ANY TIME TO REVOKE SUCH DESIGNATION AND TO SUBSTITUTE ONE OR MORE OTHER
BENEFICIARIES IN ACCORDANCE WITH THE RULES AND PROCEDURES ESTABLISHED BY THE
PLAN ADMINISTRATOR.

6.2           NO DESIGNATED BENEFICIARY.  IF, UPON THE DEATH OF THE PARTICIPANT,
THERE IS NO VALID BENEFICIARY DESIGNATION, THE BENEFICIARY SHALL BE THE
PARTICIPANT’S SURVIVING SPOUSE.  IN THE EVENT THERE IS NO SURVIVING SPOUSE, THEN
THE PARTICIPANT’S BENEFICIARY SHALL BE THE PARTICIPANT’S ESTATE.

 

ARTICLE VII

TRUST OBLIGATION TO PAY BENEFITS

7.1           DEFERRALS HELD IN TRUST.  AN AMOUNT EQUAL TO THE SALARY DEFERRAL
AMOUNT, AIP DEFERRAL AMOUNT, VIP DEFERRAL AMOUNT, MIP DEFERRAL AMOUNT AND
ADDITIONAL CONTRIBUTIONS, IF ANY, MADE BY OR ON BEHALF OF THE PARTICIPANT SHALL
BE TRANSFERRED TO THE TRUSTEE WITHIN THIRTY (30) DAYS AFTER THE APPLICABLE PAY
PERIOD TO BE HELD PURSUANT TO THE TERMS OF THE TRUST AGREEMENT.

7.2           BENEFITS PAID FROM TRUST.  ALL BENEFITS PAYABLE TO A PARTICIPANT
HEREUNDER SHALL BE PAID BY THE TRUSTEE TO THE EXTENT OF THE ASSETS HELD IN THE
TRUST BY THE TRUSTEE, AND BY THE EMPLOYER TO THE EXTENT THE ASSETS IN THE TRUST
ARE INSUFFICIENT TO PAY A PARTICIPANT’S BENEFITS AS PROVIDED UNDER THIS PLAN.

7.3           TRUSTEE INVESTMENT DISCRETION.  THE BENCHMARK FUNDS ESTABLISHED
PURSUANT TO SECTION 4.3 SHALL BE FOR THE SOLE PURPOSE OF DETERMINING THE
INTEREST AND NEITHER THE TRUSTEE NOR THE EMPLOYER SHALL HAVE ANY OBLIGATION TO
INVEST THE PARTICIPANT’S ACCOUNTS IN THE DEEMED INVESTMENT OPTIONS OR IN ANY
OTHER INVESTMENT.

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7.4           NO SECURED INTEREST.  PARTICIPANTS AND THEIR BENEFICIARIES, HEIRS,
SUCCESSORS AND  ASSIGNS SHALL HAVE NO LEGAL OR EQUITABLE RIGHTS, CLAIMS OR
INTEREST IN ANY SPECIFIC PROPERTY OR ASSETS OF THE EMPLOYER OR THE TRUST.  THE
ASSETS OF THE TRUST SHALL BE SUBJECT TO THE CLAIMS OF CREDITORS OF THE
EMPLOYER.  THE EMPLOYER’S OBLIGATION UNDER THE PLAN SHALL BE MERELY THAT OF AN
UNFUNDED AND UNSECURED PROMISE OF THE EMPLOYER AND EXCEPT AS PROVIDED IN THE
TRUST AGREEMENT, THE PARTICIPANT (OR THE PARTICIPANT’S BENEFICIARY) SHALL BE A
GENERAL UNSECURED CREDITOR OF THE EMPLOYER WITH RESPECT TO THE PAYMENT OF
BENEFITS UNDER THIS PLAN.

 

ARTICLE VIII

PLAN ADMINISTRATION, AMENDMENT AND TERMINATION

8.1           PLAN ADMINISTRATION.  AS PLAN ADMINISTRATOR, THE DEFERRED
COMPENSATION COMMITTEE SHALL HAVE COMPLETE CONTROL OF THE ADMINISTRATION OF THE
PLAN HEREIN SET FORTH WITH ALL POWERS NECESSARY TO ENABLE IT PROPERLY TO CARRY
OUT ITS DUTIES IN THAT RESPECT.  NOT IN LIMITATION, BUT IN AMPLIFICATION OF THE
FOREGOING, THE DEFERRED COMPENSATION COMMITTEE SHALL HAVE THE POWER AND
AUTHORITY TO:

(A)           CONSTRUE THE PLAN AND TO DETERMINE ALL QUESTIONS THAT SHALL ARISE
AS TO INTERPRETATIONS OF THE PLAN’S PROVISIONS, INCLUDING DETERMINATION OF
ELIGIBLE EMPLOYEES, AMOUNTS OF CREDITS, ALLOCATION OF ASSETS, METHOD OF PAYMENT,
AND PARTICIPATION AND BENEFITS UNDER THE TERMS OF THE PLAN;

(B)           ESTABLISH REASONABLE RULES AND PROCEDURES WHICH SHALL BE APPLIED
IN A UNIFORM AND NONDISCRIMINATORY MANNER WITH RESPECT TO ELECTIONS AND BENEFIT
DISTRIBUTION ELECTIONS;

(C)           ESTABLISH THE RULES AND PROCEDURES BY WHICH THE PLAN WILL OPERATE;

(D)           CONSTRUE AND INTERPRET THE PLAN AND TRUST AGREEMENT AND ADOPT
RULES FOR PLAN ADMINISTRATION THAT ARE CONSISTENT WITH THE TERMS OF THE PLAN
DOCUMENTS;

(E)           COMPILE AND MAINTAIN ALL RECORDS IT DETERMINES TO BE NECESSARY,
APPROPRIATE OR CONVENIENT IN CONNECTION WITH THE ADMINISTRATION OF THE PLAN;

(F)            ADOPT AMENDMENTS TO THE PLAN DOCUMENT AND/OR THE TRUST AGREEMENT
WHICH ARE DEEMED NECESSARY OR DESIRABLE TO FACILITATE ADMINISTRATION OF THE PLAN
AND/OR TO BRING THESE DOCUMENTS INTO COMPLIANCE WITH ALL APPLICABLE LAWS AND
REGULATIONS, PROVIDED THAT THE DEFERRED COMPENSATION COMMITTEE SHALL NOT HAVE
THE AUTHORITY TO ADOPT ANY PLAN AMENDMENT THAT WILL RESULT IN INCREASED EMPLOYER
CONTRIBUTIONS OR SUBSTANTIALLY INCREASED ADMINISTRATIVE COSTS UNLESS SUCH
AMENDMENT IS CONTINGENT UPON RATIFICATION BY THE BOARD BEFORE BECOMING
EFFECTIVE;

(G)           EMPLOY SUCH PERSONS OR ORGANIZATIONS TO RENDER SERVICE OR PERFORM
SERVICES WITH RESPECT TO THE ADMINISTRATIVE RESPONSIBILITIES OF THE DEFERRED
COMPENSATION

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Committee under the Plan as the Deferred Compensation Committee determines to be
necessary and appropriate, including but not limited to actuaries, attorneys,
accountants, and benefit, financial and administrative consultants;

(H)           SELECT, REVIEW AND RETAIN OR CHANGE THE BENCHMARK FUNDS USED TO
DETERMINE THE INTEREST RATE; IN ITS SOLE DISCRETION, THE COMMITTEE MAY DELEGATE
THE POWER, AUTHORITY AND RESPONSIBILITY SET FORTH IN THIS SECTION 8.1(H) TO THE
INVESTMENT COMMITTEE APPOINTED PURSUANT TO THE ADAPTEC, INC. SAVINGS AND
RETIREMENT PLAN;

(I)            DIRECT THE INVESTMENT OF ASSETS OF THE TRUST; AND

(J)            DIRECT THE TRUSTEE AND REVIEW THE PERFORMANCE OF THE TRUSTEE WITH
RESPECT THE TRUSTEE’S DUTIES, RESPONSIBILITIES AND OBLIGATIONS UNDER THE PLAN
AND TRUST AGREEMENT.

8.2           DECISIONS OF THE DEFERRED COMPENSATION COMMITTEE.  DECISIONS OF
THE DEFERRED COMPENSATION COMMITTEE MADE IN GOOD FAITH UPON ANY MATTER WITHIN
THE SCOPE OF ITS AUTHORITY SHALL BE FINAL, CONCLUSIVE AND BINDING UPON ALL
PERSONS, INCLUDING PARTICIPANTS AND THEIR LEGAL REPRESENTATIVES OR
BENEFICIARIES.

8.3           EXCLUSIVE BENEFIT.  THE DEFERRED COMPENSATION COMMITTEE SHALL
PERFORM ITS DUTIES UNDER THE PLAN SOLELY IN THE INTEREST OF THE PARTICIPANTS AND
THEIR BENEFICIARIES.  ANY DISCRETION GRANTED TO THE DEFERRED COMPENSATION
COMMITTEE SHALL BE EXERCISED IN ACCORDANCE WITH RULES AND POLICIES ESTABLISHED
BY THE DEFERRED COMPENSATION COMMITTEE.

8.4           PLAN AMENDMENT.  THIS PLAN MAY BE AMENDED BY ADAPTEC AT ANY TIME
IN ITS SOLE DISCRETION UPON AN ACTION OF AT LEAST TWO-THIRDS (2/3) OF THE
MEMBERS OF THE DEFERRED COMPENSATION COMMITTEE; PROVIDED, HOWEVER, THAT NO
AMENDMENT MAY BE MADE WHICH WOULD ALTER THE NATURE OF A DEFERRAL ELECTION OR
BENEFIT DISTRIBUTION ELECTION OR WHICH WOULD REDUCE THE AMOUNT CREDITED TO A
PARTICIPANT’S ACCOUNTS ON THE DATE OF SUCH AMENDMENT; AND PROVIDED FURTHER THAT
NO AMENDMENT WHICH WOULD AFFECT THE TRUSTEE’S OBLIGATION MAY BE MADE WITHOUT THE
TRUSTEE’S CONSENT.

8.5           PLAN TERMINATION.  ADAPTEC, BY ACTION OF ITS BOARD AND WITH THE
APPROVAL OF TWO-THIRDS (2/3) OF THE MEMBERS OF THE DEFERRED COMPENSATION
COMMITTEE RESERVES THE RIGHT TO TERMINATE THE PLAN IN ITS ENTIRETY AT ANY TIME
UPON FIFTEEN (15) DAYS NOTICE TO THE PARTICIPANTS.  IF THE PLAN IS TERMINATED,
ALL BENEFITS SHALL BE PAID AS SET FORTH IN SECTIONS 5.1 AND/OR 5.2.  ANY AMOUNTS
REMAINING IN THE TRUST AFTER ALL BENEFITS HAVE BEEN PAID SHALL REVERT TO THE
EMPLOYER.

8.6           ADDITIONAL POWER AND RESPONSIBILITY FOLLOWING A CHANGE OF
CONTROL.  IN THE EVENT OF A CHANGE OF CONTROL, THE PLAN MAY BE AMENDED AND/OR
TERMINATED ONLY BY A MAJORITY VOTE OF THE DEFERRED COMPENSATION COMMITTEE. 
ADDITIONALLY, THE SUCCESSOR TO ADAPTEC SHALL HAVE NO RIGHT TO DISMISS ANY MEMBER
OF THE DEFERRED COMPENSATION COMMITTEE OR ADD MEMBERS TO THE DEFERRED
COMPENSATION COMMITTEE WITHOUT THE EXPRESS CONSENT OF A MAJORITY OF THE DEFERRED
COMPENSATION COMMITTEE MEMBERS.  SUCH LIMITATIONS ON THE RIGHTS OF ANY SUCCESSOR
CORPORATION OR BUSINESS ENTITY SHALL TAKE EFFECT ON THE DATE OF THE CHANGE OF
CONTROL AND SHALL REMAIN IN EFFECT

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for a period of twelve (12) months following the Change of Control unless a
majority of the members of the Deferred Compensation Committee agrees to
withdraw these limitations earlier.

 

ARTICLE IX

MISCELLANEOUS

9.1           NO ASSIGNMENT.  THE RIGHT OF ANY PARTICIPANT, ANY BENEFICIARY, OR
ANY OTHER PERSON TO THE PAYMENT OF ANY BENEFITS UNDER THIS PLAN SHALL NOT BE
ASSIGNED, TRANSFERRED, PLEDGED OR ENCUMBERED.

9.2           SUCCESSORS.  THIS PLAN SHALL BE BINDING UPON AND INURE TO THE
BENEFIT OF THE EMPLOYER, ITS SUCCESSORS AND ASSIGNS AND THE PARTICIPANT AND HIS
OR HER HEIRS, EXECUTORS, ADMINISTRATORS AND LEGAL REPRESENTATIVES.

9.3           NO EMPLOYMENT AGREEMENT.  NOTHING CONTAINED HEREIN SHALL BE
CONSTRUED AS CONFERRING UPON ANY PARTICIPANT THE RIGHT TO CONTINUE IN THE EMPLOY
OF THE EMPLOYER AS AN EMPLOYEE.

9.4           ATTORNEYS’ FEES.  IF THE EMPLOYER, THE PARTICIPANT, ANY
BENEFICIARY, THE TRUSTEE AND/OR A SUCCESSOR IN INTEREST TO ANY OF THE FOREGOING,
BRINGS LEGAL ACTION TO ENFORCE ANY OF THE PROVISIONS OF THIS PLAN, THE
PREVAILING PARTY IN SUCH LEGAL ACTION SHALL BE REIMBURSED BY THE OTHER PARTY,
THE PREVAILING PARTY’S COSTS OF SUCH LEGAL ACTION INCLUDING, WITHOUT LIMITATION,
REASONABLE FEES OF ATTORNEYS, ACCOUNTANTS AND SIMILAR ADVISORS AND EXPERT
WITNESSES.

9.5           ARBITRATION.  ANY DISPUTE OR CLAIM RELATING TO OR ARISING OUT OF
THIS PLAN SHALL BE FULLY AND FINALLY RESOLVED BY BINDING ARBITRATION CONDUCTED
BY THE AMERICAN ARBITRATION ASSOCIATION IN ALAMEDA COUNTY, CALIFORNIA.

9.6           GOVERNING LAW.  THIS PLAN SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.

9.7           ENTIRE AGREEMENT.  THIS PLAN CONSTITUTES THE ENTIRE UNDERSTANDING
AND AGREEMENT WITH RESPECT TO THE SUBJECT MATTER CONTAINED HEREIN, AND THERE ARE
NO AGREEMENTS, UNDERSTANDINGS, RESTRICTIONS, REPRESENTATIONS OR WARRANTIES AMONG
ANY PARTICIPANT AND THE EMPLOYER OTHER THAN THOSE AS SET FORTH OR PROVIDED FOR
HEREIN.

IN WITNESS WHEREOF, the undersigned certifies that the foregoing is the Adaptec
2005 Deferred Compensation Plan, effective as of January 1, 2005.

 

ADAPTEC, INC.

 

 

 

 

Dated:  August 25, 2005

By: /s/ Shirley B. Olerich

 

Title: Vice President, Human Resources

 

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