Exhibit 10.18

 

ONEBEACON
DEFERRED COMPENSATION PLAN

 

ARTICLE I

 

PURPOSE

 

SECTION 1.01.                                           PURPOSE.  THE PURPOSE OF
THIS PLAN IS TO PROVIDE KEY EMPLOYEES WITH THE ABILITY TO DEFER THE RECEIPT OF
COMPENSATION.  THE PLAN IS ALSO INTENDED TO ESTABLISH A METHOD OF ATTRACTING AND
RETAINING PERSONS WHOSE ABILITIES, EXPERIENCE AND JUDGMENT CAN CONTRIBUTE TO THE
LONG-TERM STRATEGIC OBJECTIVES OF THE COMPANY.

 

SECTION 1.02.                                           UNFUNDED PLAN.  THE
COMPANY INTENDS THAT THE PLAN BE AN UNFUNDED NON-QUALIFIED DEFERRED COMPENSATION
PLAN MAINTAINED PRIMARILY FOR THE PURPOSE OF PROVIDING DEFERRED BENEFITS FOR A
SELECT GROUP OF MANAGEMENT OR HIGHLY COMPENSATED SERVICE PROVIDERS OF THE
COMPANY AND ITS SUBSIDIARIES.

 

ARTICLE II

 

DEFINITIONS

 

The following terms when used in this Plan have the designated meanings unless a
different meaning is clearly required by the context.

 

SECTION 2.01.                                           “ACCOUNT” MEANS THE
RECORDS MAINTAINED ON THE BOOKS OF THE COMPANY TO REFLECT DEFERRALS OF
COMPENSATION BY A PARTICIPANT PURSUANT TO SECTION 3.03.

 

SECTION 2.02.                                           “ADMINISTRATOR” MEANS
THE PERSON OR COMMITTEE DESIGNATED BY THE COMMITTEE AS RESPONSIBLE FOR THE
DAY-TO-DAY ADMINISTRATION OF THE PLAN.

 

SECTION 2.03.                                           “BENEFICIARY” MEANS THE
PERSON OR PERSONS DESIGNATED PURSUANT TO ARTICLE 5 TO RECEIVE A BENEFIT PURSUANT
TO SECTION 4.04(A) IN THE EVENT OF A PARTICIPANT’S DEATH BEFORE HIS BENEFIT
UNDER THIS PLAN HAS BEEN PAID.

 

SECTION 2.04.              “BOARD” MEANS THE BOARD OF DIRECTORS OF THE COMPANY.

 

SECTION 2.05.              “CHANGE IN CONTROL” MEANS A “CHANGE IN CONTROL” AS
DEFINED IN THE WHITE MOUNTAINS LONG-TERM INCENTIVE PLAN.

 

SECTION 2.06.                                           “COMMITTEE” MEANS THE
ONEBEACON BENEFITS COMMITTEE; PROVIDED THAT ANY DETERMINATION INVOLVING A
PARTICIPANT WHO IS A MEMBER OF THE COMMITTEE SHALL BE MADE BY THE BOARD.

 

SECTION 2.07.                                           “COMPANY” MEANS
ONEBEACON INSURANCE COMPANY AND ANY SUCCESSOR THERETO.

 

SECTION 2.08.                                           “COMPENSATION” MEANS,
FOR ANY PLAN YEAR, (I) THE BASE SALARY TO BE PAID TO AN ELIGIBLE EMPLOYEE FOR
SUCH PLAN YEAR, THE ANNUAL BONUS, IF ANY, TO BE

 

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PAID TO AN ELIGIBLE EMPLOYEE IN SUCH PLAN YEAR, THE LONG-TERM INCENTIVE
COMPENSATION, IF ANY, TO BE PAID TO AN ELIGIBLE EMPLOYEE IN SUCH PLAN YEAR OR
ANY OTHER COMPENSATION TO BE PAID TO AN ELIGIBLE EMPLOYEE DURING THAT PLAN YEAR
THAT IS DESIGNATED AS “COMPENSATION” HEREUNDER BY THE ADMINISTRATOR OR (II) ANY
FEE OR OTHER COMPENSATION TO BE PAID TO AN ELIGIBLE CONSULTANT BY THE COMPANY OR
ITS SUBSIDIARIES FOR SUCH PLAN YEAR THAT IT IS DESIGNATED AS “COMPENSATION”
HEREUNDER BY THE ADMINISTRATOR.

 

SECTION 2.09.                                           “FISCAL YEAR” MEANS THE
CALENDAR YEAR.

 

SECTION 2.10.                                           “FUND” MEANS ANY
INVESTMENT FUND SELECTED BY THE ADMINISTRATOR TO BE OFFERED UNDER THE PLAN.

 

SECTION 2.11.                                           “KEY EMPLOYEE” MEANS ANY
EXECUTIVE EMPLOYEE, OTHER OVERTIME-EXEMPT EMPLOYEE OR CONSULTANT OF THE COMPANY
OR ITS PARTICIPATING SUBSIDIARIES WHO THE ADMINISTRATOR, IN ITS SOLE DISCRETION,
DECIDES IS IMPORTANT TO THE ONGOING BUSINESS OBJECTIVES OF THE COMPANY.

 

SECTION 2.12.                                           “MARKET PRICE” ON ANY
DAY MEANS (I) IF SHARES ARE LISTED ON THE NEW YORK STOCK EXCHANGE, THE AVERAGE
OF THE HIGH AND LOW SALES PRICE, OR, IN CASE NO SUCH SALE TAKES PLACE ON SUCH
DAY, THE AVERAGE OF THE LAST QUOTED CLOSING BID AND ASKED PRICES, REGULAR WAY,
IN EITHER CASE AS REPORTED IN THE PRINCIPAL CONSOLIDATED TRANSACTION REPORTING
SYSTEM WITH RESPECT TO SECURITIES LISTED OR ADMITTED TO TRADING ON THE NEW YORK
STOCK EXCHANGE OR, IF SHARES ARE NOT LISTED OR ADMITTED TO TRADING ON THE NEW
YORK STOCK EXCHANGE, AS REPORTED IN THE PRINCIPAL CONSOLIDATED TRANSACTION
REPORTING SYSTEM WITH RESPECT TO SECURITIES LISTED ON THE PRINCIPAL NATIONAL
SECURITIES EXCHANGE ON WHICH SHARES ARE LISTED OR ADMITTED TO TRADING OR, IF
SHARES ARE NOT LISTED OR ADMITTED TO TRADING ON ANY NATIONAL SECURITIES
EXCHANGE, THE LAST QUOTED SALE PRICE OR, IF NOT SO QUOTED, THE AVERAGE OF THE
HIGH BID AND THE LOW ASKED PRICES IN THE OVER-THE-COUNTER MARKET, AS REPORTED BY
NASDAQ OR SUCH OTHER SYSTEM THEN IN USE, OR, IF ON ANY SUCH DATE SHARES ARE NOT
QUOTED BY ANY SUCH ORGANIZATION, THE AVERAGE OF THE CLOSING BID AND ASKED PRICES
AS FURNISHED BY ONE OR MORE PROFESSIONAL MARKET MAKERS MAKING A MARKET IN SHARES
AND (II) IF SHARES ARE NOT PUBLICLY HELD OR SO LISTED OR PUBLICLY TRADED, THE
FULLY DILUTED BOOK VALUE PER SHARE AS DETERMINED BY THE ADMINISTRATOR IN
ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.

 

SECTION 2.13.                                           “PARTICIPANT” MEANS A
KEY EMPLOYEE WHO HAS DEFERRED COMPENSATION PURSUANT TO THIS PLAN AND WHO HAS AN
ACCOUNT TO WHICH AMOUNTS STAND CREDITED.

 

SECTION 2.14.                                           “PAYMENT PERIOD” MEANS
THE MONTH AND YEAR DESIGNATED PURSUANT TO SECTION 3.04 FOR PAYMENT OF SOME
PORTION OR ALL OF A PARTICIPANT’S ACCOUNT.

 

SECTION 2.15.                                           “PLAN” MEANS THIS
“ONEBEACON DEFERRED COMPENSATION PLAN” AS SET FORTH HEREIN AND AS AMENDED FROM
TIME TO TIME.

 

SECTION 2.16.                                           “PLAN YEAR” MEANS THE
CALENDAR YEAR.

 

SECTION 2.17.                                           “SHARE(S)” MEANS A
COMMON SHARE(S) OF WHITE MOUNTAINS INSURANCE GROUP, LTD., PAR VALUE $1.00.

 

SECTION 2.18.                                           “TERMINATION OF SERVICE”
MEANS, AS APPLICABLE, CESSATION FOR ANY REASON OF A KEY EMPLOYEE’S (I) SERVICE
AS AN EMPLOYEE OF THE COMPANY AND ITS

 

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SUBSIDIARIES OR (II) STATUS AS A CONSULTANT TO THE COMPANY AND ITS SUBSIDIARIES
AS DETERMINED BY THE COMMITTEE IN ITS SOLE DISCRETION.

 

SECTION 2.19.                                           “VALUATION DATE” MEANS
THE DATE THAT THE ADMINISTRATOR MAKES A VALUATION OF AN ACCOUNT.  UNLESS
OTHERWISE PROVIDED BY THE ADMINISTRATOR, EACH DEEMED INVESTMENT ALTERNATIVE
WITHIN EACH ACCOUNT SHALL BE VALUED AS OF EACH DAY ON WHICH A VALUE FOR SUCH
DEEMED INVESTMENT ALTERNATIVE REASONABLY IS AVAILABLE TO THE ADMINISTRATOR.

 

ARTICLE III

 

ELIGIBILITY AND DEFERRALS

 

SECTION 3.01.                                           ELIGIBILITY.  EACH KEY
EMPLOYEE DESIGNATED BY THE ADMINISTRATOR AS ELIGIBLE TO PARTICIPATE IN THE PLAN
SHALL BE ELIGIBLE TO BE A PARTICIPANT HEREUNDER.  THE ADMINISTRATOR HAS THE SOLE
AND COMPLETE DISCRETION TO DETERMINE WHICH KEY EMPLOYEES ARE ELIGIBLE TO
PARTICIPATE ON A PLAN YEAR BY PLAN YEAR BASIS.  NO KEY EMPLOYEE SHALL HAVE A
RIGHT TO BE DESIGNATED AS A PARTICIPANT AND THE DESIGNATION OF A KEY EMPLOYEE AS
A PARTICIPANT IN ONE PLAN YEAR SHALL NOT OBLIGATE THE ADMINISTRATOR TO CONTINUE
SUCH KEY EMPLOYEE AS A PARTICIPANT IN SUBSEQUENT PLAN YEARS.

 

SECTION 3.02.                                           ACCOUNTS.  THE
ADMINISTRATOR SHALL ESTABLISH AN ACCOUNT FOR EACH KEY EMPLOYEE WHO ELECTS TO
DEFER COMPENSATION PURSUANT TO SECTION 3.03. AMOUNTS DEFERRED PURSUANT TO
SECTION 3.03, AND THE VALUE THEREOF DETERMINED PURSUANT TO SECTION 3.05, SHALL
BE CREDITED TO SUCH ACCOUNT.

 

SECTION 3.03.                                           DEFERRAL OF
COMPENSATION.  A KEY EMPLOYEE MAY ELECT TO REDUCE THE COMPENSATION OTHERWISE
PAYABLE TO HIM DURING A PLAN YEAR AND TO HAVE SUCH AMOUNT CREDITED TO HIS
ACCOUNT.  A DEFERRAL DIRECTION PURSUANT TO THIS SECTION 3.03 SHALL BE MADE IN
WRITING AT SUCH TIME AND IN SUCH MANNER AS THE ADMINISTRATOR SHALL PRESCRIBE BUT
MUST IN ANY EVENT BE MADE BEFORE THE FIRST DAY OF THE PLAN YEAR IN WHICH SUCH
COMPENSATION WOULD OTHERWISE BE PAID.  A DEFERRAL ELECTION SHALL APPLY ONLY WITH
RESPECT TO THE PLAN YEAR FOR WHICH IT IS MADE AND SHALL NOT CONTINUE IN EFFECT
FOR ANY SUBSEQUENT PLAN YEAR.  A DEFERRAL ELECTION, ONCE EXECUTED AND FILED WITH
THE ADMINISTRATOR, CANNOT BE REVOKED AFTER THE DATE SPECIFIED BY THE
ADMINISTRATOR.  NOTWITHSTANDING THE FOREGOING, (I) ANY KEY EMPLOYEE WHO IS FIRST
HIRED BY THE COMPANY OR A PARTICIPATING SUBSIDIARY DURING A PLAN YEAR MAY ELECT
WITHIN 30 DAYS AFTER BECOMING A KEY EMPLOYEE TO DEFER ANY UNPAID PORTION OF HIS
COMPENSATION IN RESPECT OF SUCH PLAN YEAR AND (II) KEY EMPLOYEES MAY ELECT TO
DEFER ANY UNPAID COMPENSATION FOR THE PLAN YEAR IN WHICH THIS PLAN IS FIRST
ADOPTED BY THE BOARD.

 

SECTION 3.04.                                           PAYMENT PERIOD.  (A) 
DESIGNATION.  EACH DEFERRAL DIRECTION GIVEN PURSUANT TO SECTION 3.03 SHALL
INCLUDE DESIGNATION OF THE PAYMENT PERIOD FOR THE VALUE OF THE AMOUNT DEFERRED,
SUBJECT TO THE LIMITATION SET FORTH IN SECTION 3.04(C).

 

(B)                                 ADJUSTMENT.  THE COMMITTEE MAY PERMIT A
PARTICIPANT TO IRREVOCABLY ELECT, NO LATER THAN ONE YEAR BEFORE THE FIRST DAY OF
THE PAYMENT PERIOD INITIALLY DESIGNATED PURSUANT TO SECTION 3.04(A), TO ADJUST
SUCH PAYMENT PERIOD, SUBJECT TO THE LIMITATION SET FORTH IN SECTION 3.04(C).

 

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(C)                                  LIMITATION.  A PARTICIPANT MAY SELECT A
PAYMENT PERIOD (OR ADJUSTED PAYMENT PERIOD) THAT BEGINS NO SOONER THAN THE FIRST
ANNIVERSARY OF THE DATE OF SUCH ELECTION.

 

(D)                                 METHODS OF PAYMENTS.  A PARTICIPANT MAY
ELECT, AT THE TIME A PAYMENT PERIOD IS SELECTED, TO RECEIVE THE AMOUNT WHICH
WILL BECOME PAYABLE AS OF SUCH PAYMENT PERIOD IN NO MORE THAN 10 ANNUAL
INSTALLMENTS.  EXCEPT AS MAY BE ELECTED PURSUANT TO THIS SECTION 3.04(D), ALL
AMOUNTS BECOMING PAYABLE UNDER THIS PLAN SHALL BE PAID IN A SINGLE PAYMENT.

 

(E)                                  IRREVOCABILITY.  EXCEPT AS PROVIDED IN
SECTION 3.04(B) OR AS SET FORTH IN ARTICLE IV, A DESIGNATION OF A PAYMENT PERIOD
AND AN ELECTION OF INSTALLMENT PAYMENTS SHALL BE IRREVOCABLE; PROVIDED, HOWEVER,
THAT PAYMENT MAY BE MADE AT A DIFFERENT TIME AS PROVIDED IN SECTION 4.04.

 

SECTION 3.05.                                           VALUE OF PARTICIPANTS’
ACCOUNTS.  COMPENSATION DEFERRALS SHALL BE ALLOCATED TO EACH PARTICIPANT’S
ACCOUNT ON THE FIRST BUSINESS DAY FOLLOWING THE DATE SUCH COMPENSATION IS
WITHHELD FROM THE PARTICIPANT’S COMPENSATION AND SHALL BE DEEMED INVESTED
PURSUANT TO THIS SECTION 3.05, AS SOON AS PRACTICABLE THEREAFTER.

 

(A)                                  CREDITING OF INCOME, GAINS AND LOSSES.  AS
OF EACH VALUATION DATE, INCOME, GAIN AND LOSS EQUIVALENTS (DETERMINED AS IF THE
ACCOUNT IS INVESTED IN THE MANNER SET FORTH BELOW) ATTRIBUTABLE TO THE PERIOD
FOLLOWING THE NEXT PRECEDING VALUATION DATE SHALL BE CREDITED TO AND/OR DEDUCTED
FROM THE ACCOUNT.

 

(B)                                 INVESTMENT OF ACCOUNT BALANCE.  THE
PARTICIPANT MAY SELECT, FROM VARIOUS FUNDS MADE AVAILABLE HEREUNDER, THE FUNDS
IN WHICH ALL OR PART OF HIS ACCOUNT SHALL BE DEEMED TO BE INVESTED.

 

(I)               THE PARTICIPANT SHALL MAKE AN INVESTMENT DESIGNATION ON A FORM
PROVIDED BY THE ADMINISTRATOR, WHICH SHALL REMAIN EFFECTIVE UNTIL ANOTHER VALID
DESIGNATION HAS BEEN MADE BY THE PARTICIPANT AS HEREIN PROVIDED.  THE
PARTICIPANT MAY AMEND HIS INVESTMENT DESIGNATION BY GIVING WRITTEN DIRECTION TO
THE ADMINISTRATOR IN ACCORDANCE WITH PROCEDURES ESTABLISHED BY THE
ADMINISTRATOR.  A TIMELY CHANGE TO A PARTICIPANT’S INVESTMENT DESIGNATION SHALL
BECOME EFFECTIVE ON THE DATE DETERMINED UNDER THE APPLICABLE PROCEDURES
ESTABLISHED BY THE ADMINISTRATOR.

 

(II)            ANY CHANGES TO THE FUNDS TO BE MADE AVAILABLE TO THE
PARTICIPANT, AND ANY LIMITATION ON THE MAXIMUM OR MINIMUM PERCENTAGES OF THE
PARTICIPANT’S ACCOUNT THAT MAY BE INVESTED IN ANY PARTICULAR MEDIUM, SHALL BE
COMMUNICATED FROM TIME TO TIME TO THE PARTICIPANT BY THE ADMINISTRATOR.

 

(C)                                  DEFAULT PROVISION.  EXCEPT AS PROVIDED
BELOW, THE PARTICIPANT’S ACCOUNT SHALL BE DEEMED TO BE INVESTED IN ACCORDANCE
WITH HIS INVESTMENT DESIGNATIONS, PROVIDED SUCH DESIGNATIONS CONFORM TO THE
PROVISIONS OF THIS SECTION.  NOTWITHSTANDING THE ABOVE, THE COMMITTEE, IN ITS
SOLE DISCRETION, MAY DISREGARD THE PARTICIPANT’S ELECTION AND DETERMINE THAT ALL
COMPENSATION DEFERRALS SHALL BE DEEMED TO BE INVESTED IN A FUND DETERMINED BY
THE COMMITTEE.  IN THE EVENT THAT ANY FUND UNDER WHICH ANY PORTION OF THE
PARTICIPANT’S ACCOUNT IS DEEMED TO BE INVESTED CEASES TO EXIST, SUCH PORTION OF
THE ACCOUNT THEREAFTER SHALL BE DEEMED HELD IN THE FUND SELECTED BY THE
PARTICIPANT OR, IN THE ABSENCE OF ANY INSTRUCTIONS FROM THE PARTICIPANT, BY THE
COMMITTEE, SUBJECT TO SUBSEQUENT DEEMED INVESTMENT ELECTIONS.

 

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(D)                                 STATEMENTS.  THE COMPANY SHALL PROVIDE AN
ANNUAL STATEMENT TO THE PARTICIPANT SHOWING SUCH INFORMATION AS IS APPROPRIATE,
INCLUDING THE AGGREGATE AMOUNT CREDITED TO THE ACCOUNT, AS OF A REASONABLY
CURRENT DATE.

 

SECTION 3.06.                                           LIMIT ON ACCOUNT
BALANCE.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE MAXIMUM
AGGREGATE AMOUNT THAT MAY BE CREDITED TO A PARTICIPANT’S ACCOUNT (INCLUDING,
WITHOUT LIMITATION, COMPENSATION DEFERRALS AND INVESTMENT GAINS THEREON) AS OF
ANY VALUATION DATE SHALL BE $50,000,000 OR SUCH OTHER AMOUNT AS MAY BE
DESIGNATED BY THE COMMITTEE.  ANY AMOUNT CREDITED TO A PARTICIPANT’S ACCOUNT IN
EXCESS OF THE APPLICABLE LIMIT HEREUNDER SHALL BE PROMPTLY DISTRIBUTED TO THE
PARTICIPANT IN (AS DETERMINED BY THE COMMITTEE) CASH OR SHARES HAVING A MARKET
PRICE AS OF THE TRADING DAY IMMEDIATELY PRECEDING THE DATE OF SUCH DISTRIBUTION
EQUAL TO THE VALUE OF SUCH DISTRIBUTION.  THE ADMINISTRATOR MAY SUSPEND A
PARTICIPANT FROM DEFERRING ADDITIONAL COMPENSATION UNDER THE PLAN IF THE
ADMINISTRATOR DETERMINES THAT THE AMOUNT CREDITED TO A PARTICIPANT’S ACCOUNT
WILL EXCEED THE APPLICABLE LIMIT HEREUNDER.

 

ARTICLE IV

 

Payment of Benefits

 

SECTION 4.01.                                           NONFORFEITABILITY. 
SUBJECT TO SECTION 4.06, PARTICIPANT’S RIGHT TO A DEFERRED AMOUNT OF
COMPENSATION AND HIS RIGHT TO THE INCOME AND GAINS CREDITED THEREON, SHALL BE
FULLY VESTED AND NONFORFEITABLE AT ALL TIMES.

 

SECTION 4.02.                                           INCOME.  ANY PAYMENT
MADE PURSUANT TO SECTIONS 4.03, 4.04, 4.05, 4.06 OR 4.07 SHALL INCLUDE THE
INCOME, GAINS AND LOSSES CALCULATED IN THE MANNER DESCRIBED IN SECTION 3.05
THROUGH THE DATE OF PAYMENT (OR, IF NOT ADMINISTRATIVELY PRACTICABLE, AS OF THE
MOST RECENT VALUATION DATE NEXT PRECEDING THE DATE OF PAYMENT).

 

SECTION 4.03.                                         Time of Payment.  Except
as provided in Section 4.04, the amount credited to the Account of each
Participant shall become payable to the Participant during the Payment Period
designated pursuant to Section 3.04. If the Participant has elected installment
payments, such payments shall begin within thirty days following the expiration
of the Payment Period.  In any other case, payment shall be made as a single sum
within thirty days following the expiration of the Payment Period.

 

SECTION 4.04.                                         Termination of Service. 
In the event of a Participant’s Termination of Service while amounts stand
credited to his Account, such amounts shall be disposed of as provided in this
Section 4.04.

 

(a)                                  Death of Participant.  If the Participant’s
Termination of Service is on account of his death, or if he dies following
Termination of Service but while receiving installment payments, his Account
shall be paid to his Beneficiary as a single payment as soon as practicable, but
not later than 30 days following the immediately succeeding Valuation Date
following the Participant’s death.

 

(b)                                 Other Termination.  If the Participant’s
Termination of Service is for a reason other than death, his Account shall be
paid to him as a single payment; provided, however, that if the Participant had
elected installment payments pursuant to Section 3.04(d) for

 

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ANY DEFERRED COMPENSATION, THE AMOUNT OF SUCH DEFERRED COMPENSATION AND INCOME,
GAINS AND LOSSES CREDITED THEREON SHALL BE PAID IN THE NUMBER OF INSTALLMENTS
THUS ELECTED.  ALL PAYMENTS PURSUANT TO THIS SECTION 4.04(B) SHALL BE MADE OR
BEGIN NO MORE THAN THREE MONTHS AFTER THE END OF THE FISCAL YEAR IN WHICH
TERMINATION OF SERVICE OCCURS.

 

SECTION 4.05.                                         Withdrawal for Emergency
Need.  (a)  Authorization.  The Committee may permit a Participant who
demonstrates an emergency need to withdraw from the Plan an amount no greater
than the amount determined by the Committee to be reasonably necessary to
satisfy such emergency need.

 

(b)                                 Emergency Need.  For purposes of this
Section 4.05, an emergency need is a severe financial hardship of a Participant
resulting from (i) a sudden and unexpected illness of or accident to the
Participant or a dependent within the meaning of Section 152(a) of the Internal
Revenue Code of 1986, as amended (the “Code”), (ii) a casualty loss to the
Participant’s property or (iii) other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the Participant’s control.  A
need is not an emergency need to the extent that it is relieved by reimbursement
or compensation by insurance or otherwise, or by liquidation of the
Participant’s assets insofar as such liquidation would not cause severe
financial hardship, or by cessation of deferrals under the Plan.

 

SECTION 4.06.                                         Other Withdrawal.  Subject
to this Section 4.06, a Participant may elect to withdraw all or any portion of
his Account at any time by filing an appropriate request with the Administrator;
provided that, prior to making any distribution provided under this
Section 4.06, the Participant shall irrevocably forfeit an amount equal to 10%
of the aggregate value of the Participant’s Account and the Participant shall
not be permitted to make any additional Compensation deferrals for the remainder
of the year of such withdrawal and the next calendar year.  Amounts shall be
distributed pursuant to this Section 4.06 as soon as reasonably practicable
after the Valuation Date occurring after the submission of the Participant’s
election hereunder.

 

SECTION 4.07.                                         Change in Control.  Unless
otherwise elected by a Participant in accordance with procedures established by
the Administrator, a Participant’s Account shall be distributed in full in a
cash lump sum immediately prior to a Change in Control.

 

SECTION 4.08.                                         Source of Payment.  The
Compensation deferred pursuant to this Plan (and the income, gains and losses
credited thereon) shall be a general obligation of the Company.  The claim of a
Participant or Beneficiary to a benefit shall at all times be merely the claim
of an unsecured creditor of the Company.  No trust, security, escrow, or similar
account need be established for the purpose of paying benefits hereunder.  The
Company shall not be required to purchase, hold or dispose of any investments
pursuant to this Plan; however, if in order to cover its obligations hereunder
the Company elects to purchase any investments the same shall continue for all
purposes to be a part of the general assets and property of the Company, subject
to the claims of its general creditors and no person other than the Company
shall by virtue of the provisions of this Plan have any interest in such assets
other than an interest as a general creditor.

 

SECTION 4.09.                                         Withholding.  All amounts
credited to Participants’ Accounts pursuant to this Plan and all payments under
the Plan shall be subject to any applicable withholding requirements imposed by
any tax (including, without limitation, FICA) or other law.

 

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IF ANY OF THE TAXES REFERRED TO ABOVE ARE DUE AT THE TIME OF DEFERRAL, INSTEAD
OF AT THE TIME OF PAYOUT, THE PARTICIPANT WILL BE REQUIRED TO PAY (BY PAYROLL
DEDUCTION OR CHECK) TO THE COMPANY THE PARTICIPANT’S SHARE OF ANY SUCH TAXES
THEN DUE AND PAYABLE.

 

SECTION 4.10.                                         Right of Offset.  Any
amount payable pursuant to this Plan shall be reduced at the discretion of the
Administrator to take account of any amount due, and not paid, by the
Participant to the Company at the time payment is to be made hereunder.

 

SECTION 4.11.                                         Payment Denomination. 
Except as set forth in this Section 4.11 or as otherwise determined by the
Committee in its sole and absolute discretion, all distributions under the Plan
(including all distributions made pursuant to Sections 4.03, 4.04, 4.05 and
4.06) shall be made in Shares having a Market Price as of the trading day
immediately preceding the date of such distribution equal to the value of such
distribution; provided that the first $1,000,000 (or such other amount as may be
designated by the Committee) distributed to a Participant (or his beneficiary)
in any Plan Year and all distributions made pursuant to Section 4.07 shall be
made in cash.

 

SECTION 4.12.                                         Distribution Limitation. 
Notwithstanding anything to the contrary contained herein, the Committee may
defer to any date it selects any distribution to any Participant that it
determines in its sole and absolute discretion would not be deductible by the
Company or its affiliates solely by reason of the applicability of
Section 162(m) of the Code.

 

SECTION 4.13.                                         Defeasance.  Subject to
Section 4.08, the Committee may instruct the Company to defease the Company’s
obligations under the Plan.

 

ARTICLE V

 

BENEFICIARIES

 

SECTION 5.01.                                         Beneficiary Designation. 
(a)  Designation.  A Participant may from time to time designate, in the manner
specified by the Administrator, a Beneficiary to receive payment pursuant to
Section 4.04 in the event of his death.

 

(B)                                 ABSENCE OF BENEFICIARY.  IN THE EVENT THAT
THERE IS NO PROPERLY DESIGNATED BENEFICIARY LIVING AT THE TIME OF A
PARTICIPANT’S DEATH, HIS BENEFIT HEREUNDER SHALL BE PAID TO HIS ESTATE.

 

SECTION 5.02.                                         Payment to Incompetent. 
If any person entitled to benefits under this Plan shall be a minor or shall be
physically or mentally incompetent in the judgment of the Administrator, such
benefits may be paid in any one or more of the following ways, as the
Administrator in his sole discretion shall determine:

 

(A)                                  TO THE LEGAL REPRESENTATIVES OF SUCH MINOR
OR INCOMPETENT PERSON;

 

(B)                                 DIRECTLY TO SUCH MINOR OR INCOMPETENT
PERSON; OR

 

(C)                                  TO A PARENT OR GUARDIAN OF SUCH MINOR OR
INCOMPETENT PERSON, TO THE PERSON WITH WHOM SUCH MINOR OR INCOMPETENT PERSON
RESIDES, OR TO A CUSTODIAN FOR SUCH MINOR UNDER THE UNIFORM GIFTS TO MINORS ACT
(OR SIMILAR STATUTE) OF ANY JURISDICTION.

 

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Payment to any person in accordance with the foregoing provisions of this
Section 5.02 shall to that extent discharge the Company, which shall not be
required to see to the proper application of any such payment.

 

SECTION 5.03.                                         Doubt as to Right To
Payment.  If any doubt exists as to the right of any person to any benefits
under this Plan or the amount or time of payment of such benefits (including,
without limitation, any case of doubt as to identity, or any case in which any
notice has been received from any other person claiming any interest in amounts
payable hereunder, or any case in which a claim from other persons may exist by
reason of community property or similar laws), the Administrator may, in its
discretion, direct that payment of such benefits be deferred until such right or
amount or time is determined, or pay such benefits into a court of competent
jurisdiction in accordance with appropriate rules of law, or direct that payment
be made only upon receipt of a bond or similar indemnification (in such amount
and in such form as is satisfactory to the Administrator).

 

SECTION 5.04.                                         Spendthrift Clause.  No
benefit, distribution or payment under the Plan may be anticipated, assigned
(either at law or in equity), alienated or subject to attachment, garnishment,
levy, execution or other legal or equitable process whether pursuant to a
“qualified domestic relations order” as defined in Section 414(p) of the Code or
otherwise.

 

ARTICLE VI

 

ADMINISTRATION AND RESERVATION OF RIGHTS

 

SECTION 6.01.                                         Powers of the Committee. 
The Committee shall have the power and discretion to

 

(A)                                  DETERMINE ALL QUESTIONS ARISING IN THE
INTERPRETATION AND APPLICATION OF THE PLAN;

 

(B)                                 DETERMINE THE PERSON OR PERSONS TO WHOM
BENEFITS UNDER THE PLAN SHALL BE PAID;

 

(C)                                  DECIDE ANY DISPUTE ARISING HEREUNDER;

 

(D)                                 CORRECT DEFECTS, SUPPLY OMISSIONS AND
RECONCILE INCONSISTENCIES TO THE EXTENT NECESSARY TO EFFECTUATE THE PLAN; AND

 

(E)                                  HAVE ALL SUCH OTHER POWERS AS MAY BE
NECESSARY TO DISCHARGE ITS DUTIES HEREUNDER.

 

SECTION 6.02.                                           POWERS OF THE
ADMINISTRATOR.  THE ADMINISTRATOR SHALL HAVE THE POWER AND DISCRETION TO

 

(A)                                  PROMULGATE AND ENFORCE SUCH RULES,
REGULATIONS AND PROCEDURES AS SHALL BE PROPER FOR THE EFFICIENT ADMINISTRATION
OF THE PLAN;

 

(B)                                 DETERMINE ALL QUESTIONS ARISING IN THE
ADMINISTRATION OF THE PLAN;

 

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(C)                                  COMPUTE THE AMOUNT OF BENEFITS AND OTHER
PAYMENTS WHICH SHALL BE PAYABLE TO ANY PARTICIPANT IN ACCORDANCE WITH THE
PROVISIONS OF THE PLAN;

 

(D)                                 MAKE RECOMMENDATIONS TO THE BOARD WITH
RESPECT TO PROPOSED AMENDMENTS TO THE PLAN;

 

(E)                                  ADVISE THE BOARD REGARDING THE KNOWN FUTURE
NEED FOR FUNDS TO BE AVAILABLE FOR DISTRIBUTION;

 

(F)                                    FILE ALL REPORTS WITH GOVERNMENT
AGENCIES, PARTICIPANTS AND OTHER PARTIES AS MAY BE REQUIRED BY LAW, WHETHER SUCH
REPORTS ARE INITIALLY THE OBLIGATION OF THE COMPANY OR THE PLAN; AND

 

(G)                                 HAVE ALL SUCH OTHER POWERS AS MAY BE
NECESSARY TO DISCHARGE ITS DUTIES HEREUNDER.

 

SECTION 6.03.                                         Claims Procedure.  If the
Committee denies any Participant’s or Beneficiary’s claim for benefits under the
Plan:

 

(A)                                  THE COMMITTEE SHALL NOTIFY SUCH PARTICIPANT
OR BENEFICIARY OF SUCH DENIAL BY WRITTEN NOTICE WHICH SHALL SET FORTH THE
SPECIFIC REASONS FOR SUCH DENIAL; AND

 

(B)                                 THE PARTICIPANT OR BENEFICIARY SHALL BE
AFFORDED A REASONABLE OPPORTUNITY FOR A FULL AND FAIR REVIEW BY THE COMMITTEE OF
THE DECISION TO DENY HIS CLAIM FOR PLAN BENEFITS.

 

SECTION 6.04.                                         Action by the Committee. 
The Committee may elect a Chairman and Secretary from among its members and may
adopt rules for the conduct of its business.  A majority of the members then
serving shall constitute a quorum for the transacting of business.  All
resolutions or other action taken by the Committee shall be by vote of a
majority of those present at such meeting and entitled to vote.  Resolutions may
be adopted or other action taken without a meeting upon written consent signed
by at least a majority of the members.  All documents, instruments, orders,
requests, directions, instructions and other papers shall be executed on behalf
of the Committee by either the Chairman or the Secretary of the Committee, if
any, or by any member or agent of the Committee duly authorized to act on the
Committee behalf.

 

SECTION 6.05.                                         Consent.  By electing to
become a Participant, each Participant shall be deemed conclusively to have
accepted and consented to all terms of the Plan and all actions or decisions
made by the Administrator, the Committee or the Board with regard to the Plan. 
Such terms and consent shall also apply to, and be binding upon, the
Beneficiaries, distributees and personal representatives and other successors in
interest of each Participant.

 

SECTION 6.06.                                         Agents and Expenses.  The
Administrator or the Committee may employ agents and provide for such clerical,
legal, actuarial, accounting, medical, advisory or other services as it deems
necessary to perform its duties under this Plan.  The cost of such services and
all other expenses incurred by the Administrator or the Committee in connection
with the administration of the Plan shall be paid by the Company.

 

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SECTION 6.07.                                         Allocation of Duties.  The
duties, powers and responsibilities reserved to the Committee may be allocated
among its members so long as such allocation is pursuant to written procedures
adopted by the Committee, in which case no Committee member shall have any
liability, with respect to any duties, powers or responsibilities not allocated
to him, for the acts or omissions of any other Committee member.

 

SECTION 6.08.                                         Delegation of Duties.  The
Administrator and the Committee may delegate any of their respective duties to
employees of the Company or its subsidiaries.

 

SECTION 6.09.                                         Actions Conclusive.  Any
action on matters within the discretion of the Administrator or the Committee
shall be final, binding and conclusive.

 

SECTION 6.10.                                         Records and Reports.  The
Administrator and the Committee shall maintain adequate records of their
respective actions and proceedings in administering this Plan and shall file all
reports and take all other actions as are deemed appropriate in order to comply
with any Federal or state law.  Without limiting the foregoing, the
Administrator shall provide to the Committee no less frequently than annually a
list of the investment alternatives made available under the Plan, the aggregate
amounts deemed invested under the Plan in each such alternative and such other
information requested by the Committee.

 

SECTION 6.11.                                         Liability and
Indemnification.  The Administrator and the Committee shall perform all duties
required of them under this Plan in a prudent manner.  The Administrator and the
Committee shall not be responsible in any way for any action or omission of the
Company, its subsidiaries or their employees in the performance of their duties
and obligations as set forth in this Plan.  The Administrator and the Committee
also shall not be responsible for any act or omission of any of their respective
agents provided that such agents were prudently chosen by the Administrator or
the Committee and that the Administrator or the Committee relied in good faith
upon the action of such agents.

 

SECTION 6.12.                                         Right to Amend or
Terminate.  The Committee may at any time amend the Plan in any respect,
retroactively or otherwise, or terminate the Plan in whole or in part for any
other reason.  However, no such amendment or termination shall reduce the amount
standing credited to any Participant’s Account as of the date of such amendment
or termination.  In the event of the termination of the Plan, the Committee, in
its sole discretion, may choose to pay out Participants’ Accounts prior to the
designated Payment Periods (a “Termination Distribution”).  Each Participant
shall be compensated for the early distribution of his/her Account pursuant to a
Termination Distribution by a payment from the Company in an amount determined
by the Committee to be appropriate to make the Participant whole for such
Termination Distribution.  Otherwise, following a termination of the Plan,
income, gains and losses shall continue to be credited to each Account in
accordance with the provisions of this Plan until the time such Accounts are
paid out.

 

SECTION 6.13.                                           USAGE.  WHENEVER
APPLICABLE, THE MASCULINE GENDER, WHEN USED IN THE PLAN, INCLUDES THE FEMININE
GENDER, AND THE SINGULAR INCLUDES THE PLURAL.

 

SECTION 6.14.                                         Separability.  If any
provision of the Plan is held invalid or unenforceable, its invalidity or
unenforceability shall not affect any other provisions of the Plan, and the Plan
shall be construed and enforced as if such provision had not been included
therein.

 

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SECTION 6.15.                                         Captions.  The captions in
this document and in the table of contents are inserted only as a matter of
convenience and for reference and in no way define, limit, enlarge or describe
the scope or intent of the Plan and shall in no way affect the Plan or the
construction of any provision thereof.

 

SECTION 6.16.                                         Right of Discharge
Reserved.  Nothing contained in this Plan shall be construed as a guarantee or
right of any Participant to be continued as a employee of the Company or its
subsidiaries (or of a right of a Key Employee or Participant to any specific
level of Compensation) or as a limitation of the right of the Company or its
subsidiaries to terminate any Key Employee or Participant.

 

SECTION 6.17.                                         Governing Law and
Construction.  The Plan is intended to constitute an unfunded, nonqualified
deferred compensation arrangement.  Except to the extent preempted by Federal
law, all rights under the Plan shall be governed by and construed in accordance
with the laws of the State of New York without regard to principles of conflicts
of law.  No action shall be brought by or on behalf of any Participant or
Beneficiary for or with respect to benefits due under this Plan unless the
person bringing such action has timely exhausted the Plan’s claim review
procedure.

 

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