Exhibit 10.13

 

THORATEC CORPORATION
NONQUALIFIED DEFERRED COMPENSATION PLAN

 

Amended and Restated as of December 6, 2011

 

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THORATEC CORPORATION
NONQUALIFIED DEFERRED COMPENSATION PLAN

 

SECTION 1.  ESTABLISHMENT AND PURPOSES

 

1.1          Establishment.  Thoratec Corporation established effective as of
January 1, 2004, a deferred compensation plan for executives as described
herein, known as the “THORATEC CORPORATION DEFERRED COMPENSATION PLAN”
(hereinafter called the “Plan”).  The Plan shall hereinafter be known as the
“THORATEC CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN.”

 

1.2          Purposes.  The purposes of the Plan are to (i) enable the
Corporation to attract and retain persons of outstanding competence;
(ii) provide means whereby certain amounts payable by the Corporation to
selected executives, management employees, and Directors may be deferred to some
future period; and (iii) provide a means for possible future allocation of a
matching credit by the Corporation to selected executives, management employees,
and Directors.  The Plan is intended to constitute an unfunded plan primarily
for the purpose of providing deferred compensation for a select group of
management or highly compensated employees.

 

1.3          409A Compliance.  Effective January 1, 2005, the Corporation
bifurcated the Plan into a previous version of this document (that was
subsequently amended and restated effective January 1, 2008), which is intended
to comply with the provisions of Section 409A of the Code and the final
regulations promulgated thereunder, and a grandfathered document, which applies
to amounts that were deferred on or prior to December 31, 2004 and are not
subject to Section 409A of the Code.  This amended and restated document is
effective as of December 6, 2011 and applies only to deferrals made after
December 31, 2004.

 

SECTION 2.  DEFINITIONS

 

2.1          Definitions.  Whenever used herein, the following terms shall have
the meanings set forth below:

 

(a)           “Board” means the Board of Directors of the Corporation.

 

(b)           “Board Fees” mean the cash compensation payable to Directors,
including any annual retainer and meeting and committee fees.

 

(c)           “Bonus” means the bonus payable in cash by the Corporation to a
Participant in respect of a Fiscal Year under the Corporation’s Executive
Incentive Plan.

 

(d)           “Code” means the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder.

 

(e)           “Committee” means the Nonqualified Deferred Compensation Committee
appointed by the Board.

 

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(f)            “Corporation” means Thoratec Corporation, a California
corporation.

 

(g)           “Director” means a member of the Corporation’s Board of Directors.

 

(h)           “Early Retirement” means a Participant’s Separation from Service
on or after attaining age 55 or on or after the completion of ten years of
service with the Company, but in either case before attaining age 65.

 

(i)            “ERISA” means the Employee Retirement Income Security Act of
1974, as amended, and the regulations promulgated thereunder.

 

(j)            “Fiscal Year” means a fiscal year of the Corporation.

 

(k)           “Growth Increment” means the net amount of income, appreciation,
loss, etc., earned or suffered on a Participant’s deferred amounts.

 

(l)            “Normal Retirement” means a Participant’s Separation from Service
on or after attaining age 65.

 

(m)          “Participant” means an individual eligible to participate in the
Plan pursuant to Section 3.1.

 

(n)           “Salary” means all regular, basic compensation, before reduction
for amounts deferred pursuant to this Plan or any other plan of the Corporation,
payable in cash to a Participant for services rendered during the Year,
exclusive of any bonuses or incentive compensation, special fees or awards,
allowances, or amounts designated by the Corporation as payments toward or
reimbursement of expenses.

 

(o)           “Separation from Service” means a “separation from service” from
the Company within the meaning of Section 409A(a)(2)(A)(i) of the Code and
Treasury Regulation Section 1.409A-1(h).

 

(p)           “Sales Commissions” mean compensation paid in the form of
commissions.

 

(q)           “Specified Employee” means a “specified employee” of the Company,
as defined in Section 409(a)(2)(B)(i) of the Code.

 

(r)            “Trust” means the Thoratec Corporation Grantor Trust Agreement
attached hereto as Exhibit A.

 

(s)            “Year” means a calendar year.

 

2.2          Gender and Number.  Except when otherwise indicated by the context,
any masculine terminology used herein also shall include the feminine gender,
and the definition of any term herein in the singular also shall include the
plural.

 

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SECTION 3.  ELIGIBILITY AND PARTICIPATION

 

3.1          Eligibility.  The Plan is primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees and Directors.  Subject to the preceding sentence, the following
persons shall be eligible to participate in the Plan:

 

(a)           the elected officers and appointed officers of the Corporation;

 

(b)           cardiovascular division senior directors of the Corporation and
above;

 

(c)           directors of the Corporation in pay grade 63 (added by the Chief
Executive Officer of the Corporation effective January 1, 2008);

 

(d)           Directors; and

 

(e)           any other employee of the Corporation or any direct or indirect
subsidiary of the Corporation designated by the Chair of the Committee or by the
Chief Executive Officer of the Corporation from time to time.

 

3.2          Ceasing Eligibility.  In the event a Participant no longer meets
the requirements for participation in this Plan, the Participant’s deferral
election for the Year in question shall continue to be effective for the
remainder of such Year, after which the Participant shall become an inactive
Participant.  An inactive Participant shall retain all rights described under
this Plan, except the right to make any further deferrals and the right to
receive any further matching credits, until the time that the Participant again
meets the eligibility requirements of Section 3.1 (and, if applicable,
Section 5.1).

 

SECTION 4.  ELECTION TO DEFER; DEFERRAL PERIOD;
FORM OF PAYMENT

 

4.1          Deferral Election.

 

(a)           Subject to the following provisions, for each Year, a Participant
irrevocably may elect, by written notice to the Corporation, to defer Salary,
Bonus, Board Fees and/or Sales Commissions as set forth below.  Deferrals of
each of Salary, Bonus, Board Fees and/or Sales Commissions shall be made
pursuant to a separate deferral election.

 

(i)            With respect to Salary deferrals, the deferral percentage elected
must be at least two percent (2%) but no greater than fifty percent (50%).  The
deferral amount shall be applied to the Participant’s Salary for each pay period
of the Year to which the deferral election applies and must be made on or before
November 30 of the immediately preceding Year for which such deferral election
applies.

 

(ii)           With respect to Bonus deferrals, the deferral percentage elected
shall be 0% to 100% (and/or a flat amount) and shall apply only to the
Participant’s Bonus payable with respect to service to be performed in the
Fiscal Year to which the deferral election applies, and the deferral election
must be made on or before the date that is six months prior to

 

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the end of the Fiscal Year to which the deferral election applies (provided that
in no event may a Bonus deferral election be made after the amount of the
Participant’s Bonus has become readily ascertainable).

 

(iii)          With respect to Board Fees, the deferral percentage elected shall
be 0% to 100% and shall apply only to the Participant’s Board Fees payable with
respect to service to be performed in the Year to which the deferral election
applies and must be made on or before November 30 of the immediately preceding
Year for which such deferral election applies.

 

(iv)          With respect to Sales Commissions, the deferral percentage elected
shall be 0% to 100% (and/or a flat amount) and shall apply only to the
Participant’s Sales Commissions payable with respect to service to be performed
in the Year to which the deferral election applies and must be made on or before
November 30 of the immediately preceding Year for which such deferral election
applies.

 

(b)           Notwithstanding the foregoing, the plan administrator may specify
a second enrollment period for any Plan Year for the purpose of allowing
newly-hired employees or other newly-eligible individuals to enroll in the
Plan.  Any such secondary enrollment shall comply with the requirements of Code
Section 409A.

 

4.2          Deferral Period.

 

(a)           A Participant who is an employee shall elect a deferral period for
each separate deferral of Salary, Bonus and/or Sales Commissions.  This election
must be made at the same time as the Participant’s deferral election pursuant to
Section 4.1.  The following options are available:

 

(i)            Scheduled In-Service Withdrawal.  A Participant may establish up
to three (3) “in-service withdrawal” accounts that specify a Year, prior to the
Participant’s Retirement (whether Early or Normal), in which the deferred funds
will be distributed.  Participants only may elect to defer funds into an
in-service withdrawal account whose distribution date is at least two (2) Years
after the Year in which the compensation is deferred.

 

(ii)           Retirement.  A Participant may elect to defer funds into an
account that will be distributed upon his or her Retirement (whether Early or
Normal).  Distribution upon Normal Retirement will be the default election for
any Participant who fails to make an affirmative election pursuant to
Section 4.2(a).

 

(b)           However, notwithstanding any distribution election made by a
Participant, payments of deferred amounts shall automatically be made upon the
earliest to occur of:

 

(i)            the Participant’s death;

 

(ii)           the Participant’s total and permanent disability (as defined in
the Corporation’s long term disability plan, but only to the extent such
disability also meets the requirements for “disability” as defined under
Section 409A of the Code); or

 

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(iii)          in the case of employees only, the Participant’s Separation from
Service for any reason other than Early or Normal Retirement.

 

(c)           Notwithstanding the Participant’s elections under Sections 4.1 and
4.2, the Participant may request to receive a withdrawal in the case of an
unforeseeable emergency.  An unforeseeable emergency will be deemed to have
occurred in the following circumstances:

 

(i)            the Participant experiences a severe financial hardship resulting
from an illness or accident of the Participant or his or her designated
beneficiary, or the spouse or dependent of either one of them;

 

(ii)           the Participant loses his or her home due to casualty; or

 

(iii)          similar extraordinary and unforeseeable circumstances arising as
a result of events beyond the control of the Participant or his or her
designated beneficiary.

 

The Committee shall determine whether a Participant’s request pursuant to this
Section 4.2(c) shall be granted and the manner in which, if at all, the payment
of deferred amounts or matching credits shall be altered or modified, which
determinations shall be final, conclusive and not subject to appeal. In any
event, payment under this Section 4.2(c) may not be made to the extent such
emergency is or may be relieved: (i) through reimbursement or compensation by
insurance or otherwise; (ii) by liquidation of the Participant’s assets, to the
extent the liquidation of such assets would not itself cause severe financial
hardship; and (iii) by cessation of deferrals under the Plan.  Withdrawals of
amounts because of a severe financial hardship may only be permitted to the
extent reasonably necessary to satisfy the hardship, plus to pay taxes on the
withdrawal.  The Participant’s account will be credited with earnings in
accordance with the Plan up to the date of distribution.  In the event a
Participant receives a distribution under this Section 4.2(c), then such
Participant will be ineligible to participate in the Plan for the remainder of
the Year in which the distribution was received.

 

(d)           Directors who are not also employees are not permitted to elect a
deferral period; rather, they are required to defer payment until their
Separation from Service, at which time payment shall commence immediately.

 

4.3          Form of Payment.  Generally, payments are to be made in one lump
sum.

 

(a)           However, a Participant who is an employee may elect for
distributions from up to three (3) in-service withdrawal accounts established
pursuant to Section 4.2(a)(i) to be paid either in a lump sum or in
substantially equal annual installments for up to four (4) years.  The foregoing
election with respect to the form of payments to be made from the in-service
withdrawal account(s) must be made by the Participant at the same time that the
Participant first establishes an in-service withdrawal account(s) under this
Plan (i.e., at the same time as the Participant makes his or her first election
under Section 4.2(a)(i) to defer an amount until a specified date).

 

(b)           In addition, if a Participant who is an employee elects under
Section 4.2(a)(ii) to receive payments upon Early or Normal Retirement, the
Participant can choose whether to have all such payments paid in a lump sum, or
all such payments paid in up to

 

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ten (10) substantially equal annual installments.  The foregoing election with
respect to the form of payments to be made upon Early or Normal Retirement must
be made by the Participant at the same time that the Participant first
establishes an account under this Plan for amounts deferred until Early or
Normal Retirement (i.e., at the same time as the Participant makes the first
election under Section 4.2(a)(ii) to defer an amount until Early or Normal
Retirement).  Once a Participant elects between lump sum and installment
payments, such election shall apply to amounts deferred until Early or Normal
Retirement for all future years.

 

4.4          Modification, Corporate Discretion.  Notwithstanding a
Participant’s election pursuant to Section 4.2, a Participant who is an employee
may delay the timing and may change the form (i.e., lump sum versus
installments) of any payment to be made pursuant to a scheduled in-service
withdrawal or upon Early or Normal Retirement by written election (a “subsequent
election”) made at least twelve (12) months prior to the date such deferred
amounts are to be paid or commence being paid, provided, however, that (i) a
subsequent election will not take effect until at least twelve (12) months after
it is made and (ii) the subsequent election must defer payment for at least five
(5) Years from the date payment otherwise would have been paid or commenced
prior to the change (except as otherwise permitted pursuant to Section 409A of
the Code).  For purposes of this Section 4.4, the entire series of installment
payments is considered to be a single “payment” for purposes of Treasury
Regulations Section 1.409A-2(b)(2).  Once a Participant has elected to receive a
payment upon Early or Normal Retirement, that election may not be changed to a
commencement date prior to a Separation from Service except for a withdrawal on
account of an unforeseeable emergency pursuant to Section 4.2(c).  In addition,
the Corporation will also defer any scheduled in-service withdrawals to the
first Year in which the deduction of the payment would not be limited by
Section 162(m) of the Internal Revenue Code.

 

4.5          Denial of Participation.  In the event payment of deferred amounts
commences because of long term disability or an unforeseeable emergency pursuant
to Section 4.2(c), no deferrals may be made for the remainder of the Year in
which the last payment occurs in connection with such disability or
unforeseeable emergency.

 

SECTION 5.  MATCHING CREDITS

 

5.1          Effective Date and Eligibility.  Effective at such date as
determined by the Board, the Corporation shall credit matching credits to
Participants under this Plan.  The matching formula shall be determined by the
Board at the time it activates this Section 5.

 

5.2          Payment.  Payment of matching credits shall occur at the same time
as payment of deferred amounts to which the matching credits relate. 
Notwithstanding the foregoing, in the case of a withdrawal on account of an
unforeseeable emergency pursuant to Section 4.2(c), payment of matching credits
shall occur at the time that payment of deferred amounts would have occurred
under the provisions of this Plan excepting Section 4.2(c), rather than at the
time the withdrawal on account of an unforeseeable emergency actually takes
place.

 

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SECTION 6.  DEFERRED COMPENSATION AND MATCHING CREDITS ACCOUNTS

 

6.1          Participant Accounts.

 

(a)           Deferred Compensation Accounts.  The Corporation shall establish
and maintain one or more individual bookkeeping accounts in respect of deferrals
made by a Participant called “Deferral Accounts.” A Participant shall have
separate Deferral Accounts for deferred amounts to be paid after a Separation
from Service and those paid during employment.  A Participant’s Deferral
Accounts shall be credited with the dollar amount of any amount deferred as of
the date the amount deferred otherwise would have become due and payable.

 

(b)           Matching Credits Accounts.  The Corporation shall establish and
maintain an individual bookkeeping account in respect of matching credits by the
Corporation for the benefit of an eligible Participant to be known as a
“Matching Account” (and, together with the Deferral Accounts, “Accounts”).

 

6.2          Growth Increments on Accounts.  The Corporation will provide the
opportunity for Growth Increments (which can be a negative number to reflect a
loss of value) to be earned on the balances of a Participant’s Accounts.  The
Committee will have the authority to select, from time to time, funds or
investments for use in indexing and thus determining the Growth Increments.  The
Accounts shall be credited daily with Growth Increments computed on the balances
in such Accounts.  The Growth Increments shall be the sum of the income, capital
growth, loss, etc., as selected and determined by the Committee.

 

6.3          Charges Against Accounts.  There shall be charged against a
Participant’s Accounts any payments made to the Participant or to his or her
beneficiary in accordance with Section 7.

 

SECTION 7.  PAYMENT OF DEFERRED AND MATCHING AMOUNTS

 

7.1          Payment of Deferred and Matching Amounts.  For purposes of
determining the amount to pay a Participant upon a distribution from his or her
Accounts, such Accounts shall be valued (including accumulated Growth
Increments) as follows, subject to Section 7.2 hereof:

 

(a)           Scheduled In-Service Withdrawal.  In the case of a scheduled
in-service withdrawal, a Participant’s Accounts shall be valued as of
December 31 preceding the Year elected by the Participant.  The lump sum
distribution, or the first installment payment, as the case may be, shall be
paid on the first business day of the following January or as soon as
practicable (and not to exceed 45 days) thereafter.  For purposes of making
remaining installment payments, the Accounts will be revalued each December 31,
with subsequent installment payments made on the first business day of each
January or as soon as practicable (and not to exceed 45 days) thereafter.

 

(b)           Retirement.  In the case of a distribution upon Retirement
(whether Early or Normal), a Participant’s Accounts shall be valued as of
December 31 of the Year in which the Retirement occurs.  The lump sum
distribution, or the first installment payment, as the case may be, shall be
paid on the first business day of the following January or as soon as
practicable (and

 

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not to exceed 45 days) thereafter.  For purposes of making remaining installment
payments, the Accounts will be revalued each December 31, with subsequent
installment payments made on the first business day of each January or as soon
as practicable (and not to exceed 45 days) thereafter.

 

(c)           Unforeseeable Emergency.  In the case of a distribution on account
of an unforeseeable emergency under Section 4.2(c), the Plan administrator will
make arrangements to value the Accounts and make a distribution as soon as
practicable, consistent with the requirements of Section 409A of the Code and
subject to Section 5.2.

 

(d)           Other Distributions.  In the case of any distribution scenario not
described in subsections (a) through (c) above, a Participant’s Accounts shall
be valued as of the last day of the month in which the event triggering
distribution occurs and shall be paid in the form of a lump sum within
forty-five (45) days thereafter.

 

All payments shall be made in the form specified under Section 4.3, subject to
Section 7.3.  The amount of any installment payment shall be equal to the sum of
the balances in a Participant’s Accounts multiplied by a fraction, the numerator
of which is one and the denominator of which is the number of installment
payments remaining.

 

7.2          Six-Month Delay for Specified Employees.  In the case of a
Specified Employee, payments to be made or commence upon a Separation from
Service (including Early or Normal Retirement, but not including a Separation
from Service due to the Participant’s death) shall be delayed until a date that
is six (6) months after such Separation from Service, except that in no case
shall the six (6)-month delay described in this Section 7.2 apply to a payment
made upon the occurrence of a Participant’s death.  The Deferral and Matching
Accounts of a Specified Employee will be valued as of the date set forth in
Section 7.1 or the last day of the applicable six (6)-month delay, if later.

 

7.3          Acceleration of Payments.  If prior to the payment of all or a
portion of his Account, the Participants dies, suffers a total and permanent
disability (as defined in Section 4.2(b)(ii)) or has a Separation from Service
other than for Early or Normal Retirement, the balance of any amounts payable
shall be paid in a lump sum, subject to Section 7.2, within sixty (60) days
following such event to the Participant or, in the case of death, to the
beneficiaries designated under Section 8.  Also, regardless of the event
triggering payment (including Early or Normal Retirement), and notwithstanding
any other provision of the Plan to the contrary, if a Participant’s Account
balances total less than fifty thousand dollars ($50,000) in the aggregate at
the time of the Participant’s Separation from Service or commencement of any
scheduled in-service withdrawal, such amount, to the extent scheduled to be paid
in installments, shall instead be paid to the Participant in a lump sum.

 

SECTION 8.  BENEFICIARY DESIGNATION

 

8.1          Designation of Beneficiary.  A Participant shall designate a
beneficiary or beneficiaries who, upon the Participant’s death, are to receive
the amounts that otherwise would have been paid to the Participant.  All
designations shall be in writing to the Corporation in such form as it requires
or accepts and signed by the Participant.  The designation shall be effective

 

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only if and when delivered to the Corporation during the lifetime of the
Participant.  The Participant also may change his beneficiary or beneficiaries
by a signed, written instrument delivered to the Corporation.  However, if a
married Participant maintains his primary residence in a state that has
community property laws, the Participant’s spouse shall join in any designation
of a beneficiary or beneficiaries other than the spouse.  The payment of amounts
shall be in accordance with the last unrevoked written designation of
beneficiary that has been signed and delivered to the Corporation.

 

8.2          Death of Beneficiary.  In the event that all of the beneficiaries
named in Section 8.1 predecease the Participant, the amounts that otherwise
would have been paid to the Participant shall be paid to the Participant’s
estate, and in such event, the term “beneficiary” shall include his or her
estate.

 

8.3          Ineffective Designation.  In the event the Participant does not
designate a beneficiary, or if for any reason such designation is ineffective,
in whole or in part, the amounts that otherwise would have been paid to the
Participant shall be paid to the Participant’s estate, and in such event, the
term “beneficiary” shall include the Participant’s estate.

 

SECTION 9.  RIGHTS OF PARTICIPANTS

 

9.1          Contractual Obligation.  It is intended that the Corporation is
under a contractual obligation to make payments of a Participant’s Accounts when
due.  Payment shall be made out of the general funds of the Corporation as
determined by the Board.

 

9.2          Unsecured Interest.  No Participant or beneficiary shall have any
interest whatsoever in any specific asset of the Corporation.  To the extent
that any person acquires a right to receive payments under this Plan, such right
shall be no greater than the right of any unsecured general creditor of the
Corporation.  Notwithstanding the above, the Corporation intends to informally
fund for the obligations under this Plan through the Trust.  While contributions
to the Trust are discretionary prior to a Change in Control, full contribution
is required in accordance with Section 16.2 upon a Change in Control.

 

9.3          Employment.  Nothing in the Plan shall interfere with or limit in
any way the rights of the Corporation to terminate any Participant’s employment
at any time, nor confer upon any Participant any right to continue in the employ
of the Corporation.

 

9.4          Participation.  No employee shall have a right to be selected as a
Participant or, having been so selected, to be selected again as a Participant.

 

SECTION 10.  NONTRANSFERABILITY

 

10.1        Nontransferability.  In no event shall the Corporation make any
payment under this Plan to any assignee or creditor of a Participant or a
beneficiary.  Prior to the time of a payment hereunder, a Participant or a
beneficiary shall have no rights by way of anticipation or otherwise to assign
or otherwise dispose of any interest under this Plan nor shall such rights be
assigned or transferred by operation of law.

 

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SECTION 11.  ADMINISTRATION

 

11.1        Administration.  This Plan shall be administered by the Committee. 
The Committee may from time to time establish rules for the administration of
this Plan that are not inconsistent with the provisions of this Plan.

 

11.2        Finality of Determination.  The Committee has sole discretion in
interpreting the provisions of the Plan.  The determination of the Committee as
to any disputed questions arising under this Plan, including questions of
construction and interpretation, shall be final, binding, and conclusive upon
all persons.

 

11.3        Expenses.  The cost of payments from this Plan and the expenses of
administering the Plan shall be borne by the Corporation.

 

11.4        Action by the Corporation.  Any action required or permitted to be
taken under this Plan by the Corporation shall be by resolution of the Board, by
the duly authorized Committee of the Board, or by a person or persons authorized
by resolution of the Board or the Committee.

 

SECTION 12.  AMENDMENT AND TERMINATION

 

12.1        Amendment and Termination.  The Corporation expects the Plan to be
permanent but, since future conditions affecting the Corporation cannot be
anticipated or foreseen, the Corporation necessarily must and does hereby
reserve the right to amend, modify, or terminate the Plan at any time by action
of the Board.  Notwithstanding the foregoing, upon the occurrence of a Change in
Control (as hereinafter defined) the Plan may not be terminated or amended in
such a manner as to decrease any benefits or rights accrued as of the date of
the Change in Control without the approval of the majority of the Participants,
and subject to Section 409A of the Code.

 

SECTION 13.  APPLICABLE LAW

 

13.1        Applicable Law.  This Plan shall be governed and construed in
accordance with the laws of the State of California.

 

SECTION 14.  WITHHOLDING OF TAXES

 

14.1        Tax Withholding.  The Corporation shall have the right to deduct
from all contributions made to, or payments made from, the Plan any federal,
state, or local taxes required by law to be withheld with respect to such
contributions or payments.

 

SECTION 15.  NOTICE

 

15.1        Notice.  Any notice required or permitted to be given under the Plan
by a Participant shall be sufficient if in writing and hand-delivered or sent by
registered or certified mail to the Vice President of Human Resources of the
Corporation, and by the Corporation shall be sufficient if made via electronic
delivery, or, by either party shall be sufficient if made using any other method
permitted by the Committee.  Such notice shall be deemed given as of the date

 

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of delivery or, if delivery is made by mail, as of the date shown on the
postmark or the receipt for registration or certification.

 

SECTION 16.  CHANGE IN CONTROL

 

16.1        Change in Control.  For purposes of this Plan, a “Change in Control”
shall be deemed to have occurred on the first to occur of any one of the events
set forth in the following paragraphs:

 

(a)           any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Corporation (not including in the securities
Beneficially Owned by such Person any securities acquired directly from the
Corporation or its Affiliates) representing 50% or more of either the then
outstanding shares of Common Stock or the combined voting power of the
Corporation’s then outstanding voting securities, excluding any Person who
becomes such a Beneficial Owner in connection with a transaction described in
clause (i) of paragraph (c) below; or

 

(b)           a change in the composition of the Board occurring within a
two-year period, as a result of which fewer than a majority of the Directors are
Incumbent Directors.  “Incumbent Directors” shall mean Directors who either
(i) are Directors of the Company as of November 1, 2003 or (ii) are elected, or
nominated for election, to the Board with the affirmative votes of at least two
thirds of those Directors whose election or nomination was not in connection
with any transaction described in this Section 16.1, or in connection with an
actual or threatened proxy contest relating to the election of Directors of the
Company.

 

(c)           there is consummated a merger or consolidation of the Corporation
or any direct or indirect subsidiary of the Corporation with any other
corporation, other than (i) a merger or consolidation, which would result in the
voting securities of the Corporation outstanding immediately prior to such
merger or consolidation continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity or any
parent thereof) at least fifty percent (50%) of the combined voting power of the
voting securities of the Corporation or such surviving entity or any parent
thereof outstanding immediately after such merger or consolidation, or (ii) a
merger or consolidation effected to implement a recapitalization of the
Corporation (or similar transaction) in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of the Corporation (not
including in the securities Beneficially Owned by such Person any securities
acquired directly from the Corporation or its Affiliates) representing fifty
percent (50%) or more of either the then outstanding shares of Common Stock or
the combined voting power of the Corporation’s then outstanding voting
securities; or

 

(d)           the stockholders of the Corporation approve a plan of complete
liquidation or dissolution of the Corporation or there is consummated an
agreement for the sale or disposition by the Corporation of all or substantially
all of the Corporation’s assets (in one transaction or a series of related
transactions within any period of twenty four (24) consecutive months), other
than a sale or disposition by the Corporation of all or substantially all of the
Corporation’s assets to an entity, at least fifty percent (50%) of the combined
voting power of the

 

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voting securities of which are owned by stockholders of the Corporation in
substantially the same proportions as their ownership of the Corporation
immediately prior to such sale.

 

Notwithstanding the foregoing, no “Change in Control” shall be deemed to have
occurred if there is consummated any transaction or series of integrated
transactions immediately following which the record holders of the Common Stock
immediately prior to such transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity which owns all or
substantially all of the assets of the Corporation immediately following such
transaction or series of transactions.  Moreover, if the definition of “Change
in Control” contained herein does not satisfy the requirements for a change in
control as defined pursuant to Section 409A of the Code and the final
regulations promulgated thereunder, then the definition contained herein shall
be deemed modified to the minimum extent necessary to satisfy such requirements.

 

For purposes of the definition of Change in Control, “Affiliate” shall have the
meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange
Act; “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the
Exchange Act; “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended; and “Person” shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) the Corporation or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Corporation or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities,
(iv) a corporation owned, directly or indirectly, by the shareholders of the
Corporation in substantially the same proportions as their ownership of stock of
the Corporation or (v) any individual, entity or group which is permitted to,
and actually does, report its Beneficial Ownership on Schedule 13G (or any
successor schedule); provided that if any such individual, entity or group
subsequently becomes required to or does report its Beneficial Ownership on
Schedule 13D (or any successor schedule), such individual, entity or group shall
be deemed to be a Person for purposes hereof on the first date on which such
individual, entity or group becomes required to or does so report Beneficial
Ownership of all of the voting securities of the Corporation Beneficially Owned
by it on such date.

 

16.2        Effect of Change in Control.  Upon a Change in Control, the
Corporation must contribute to the Trust as provided in the Trust.

 

16.3        Successors.  Any successor in interest to the Corporation, including
a purchaser of a substantial portion of its assets, must assume the obligations
of this Plan.

 

SECTION 17.  CONSTRUCTION

 

17.1        Construction.  The provisions of this Plan are intended to comply
with Section 409A of the Code and the final regulations promulgated thereunder,
and shall be so construed and interpreted.  In the event that any provision of
this Plan does not comply with Section 409A of the Code, such provision shall be
deemed to be amended to the minimum extent necessary to cause it to comply.

 

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SECTION 18.  CLAIMS PROCEDURE

 

18.1        Claims Procedure.  The Committee shall be the “administrator” of the
Plan.  If a Participant or other person makes a claim for benefits under the
Plan, he or she generally will be notified electronically or in writing within
ninety (90) days after the claim is received whether it was accepted or denied. 
If an extension of time for processing the claim is required, the administrator
may take up to an additional ninety (90) days, provided that the administrator
sends the Participant or other person written notice of the extension before the
expiration of the original ninety (90)-day period.  The notice provided to will
describe why an extension is required and when a decision is expected to be
made.

 

If a claim is wholly or partially denied, the denial notice will contain the
following information:

 

·                  the reasons for the denial, including specific reference to
those plan provisions on which the denial is based;

·                  a description of any additional information necessary to
complete the claim and an explanation of why such information is necessary;

·                  an explanation of the steps to be taken to appeal the adverse
determination;  and

·                  a statement of the Participant’s right to bring a civil
action under section 502(a) of ERISA following an adverse decision after appeal.

 

If a claim is wholly or partially denied, the Participant or other person may
submit a request for an appeal within sixty (60) days of receiving notice of the
denial.  The Participant or other person may submit comments, records,
documents, or other information supporting his or her appeal, regardless of
whether such information was considered in the prior benefits decision. Upon
request and free of charge, the Participant or other person will be provided
reasonable access to and copies of all documents, records and other information
relevant to his or her claim.

 

A Participant or other person generally will be notified electronically or in
writing of the outcome of his or her appeal within sixty (60) days after it is
received.  If an extension of time for processing the appeal is required, the
appeal reviewer may take up to an additional sixty (60) days provided that the
appeal reviewer sends written notice of the extension before the expiration of
the original sixty (60)-day period.  If the appeal is wholly or partially
denied, the denial notice will explain the reasons for the decision and include
the following:  (i) references to the specific plan provision(s) upon which the
decision was based;  (ii) a statement that, upon request and free of charge, the
Participant or other person will be provided reasonable access to and copies of
all documents, records and other information relevant to his or her claim for
benefits;  and (iii) a statement of his or her right to bring a civil action
under section 502(a) of ERISA.

 

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