Exhibit 10.1
D.R. Horton
Deferred Compensation Plan
Amended and Restated Effective January 1, 2005

 

 

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TABLE OF CONTENTS

                      Page  
 
           
ARTICLE 1
  ESTABLISHMENT AND PURPOSE     1  
 
           
ARTICLE 2
  DEFINITIONS     2  
 
           
ARTICLE 3
  ADMINISTRATION     5  
 
           
ARTICLE 4
  ELIGIBILITY AND PARTICIPATION     7  
 
           
ARTICLE 5
  CONTRIBUTIONS TO DEFERRAL ACCOUNTS     8  
 
           
ARTICLE 6
  DISTRIBUTIONS     9  
 
           
ARTICLE 7
  DEFERRED COMPENSATION ACCOUNTS     16  
 
           
ARTICLE 8
  TRUST     17  
 
           
ARTICLE 9
  CHANGE IN CONTROL     17  
 
           
ARTICLE 10
  RIGHTS OF PARTICIPANTS     18  
 
           
ARTICLE 11
  WITHHOLDING OF TAXES     18  
 
           
ARTICLE 12
  AMENDMENT AND TERMINATION     18  
 
           
ARTICLE 13
  MISCELLANEOUS     19  
 
           
ARTICLE 14
  ADMINISTRATIVE INFORMATION     20  
 
           
ARTICLE 15
  ERISA RIGHTS     20  

 

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D.R. Horton
Deferred Compensation Plan
ARTICLE 1
ESTABLISHMENT AND PURPOSE
1.1 Establishment. D.R. Horton, Inc., a Delaware corporation (the “Company”),
established the D.R. Horton, Inc. Supplemental Executive Retirement Plan No. 1
(the “Supplemental Plan”), an unfunded deferred compensation plan for a select
group of management or highly compensated employees, effective as of
November 15, 1993. Effective as of July 1, 2000, Schuler Homes, Inc. established
the Schuler Homes, Inc. Deferred Compensation Plan for Directors and Key
Employees (the “Schuler Plan”), which also is an unfunded deferred compensation
plan maintained primarily for the purpose of providing deferred compensation to
members of the Board of Directors and a select group of management or highly
compensated employees.
Effective February 21, 2002, Schuler Homes, Inc. merged with and into the
Company, and the Company became the sponsor of the Schuler Plan. For sake of
efficiency, the Company wishes to consolidate and restate the Schuler Plan and
the Supplemental Plan into one uniform plan of benefits for the participants of
such plans and to provide a select group of management or highly compensated
employees and nonemployee directors who are selected to participate the
opportunity to defer compensation on a pre-tax basis.
The Company established this deferred compensation plan, known as the “D.R.
Horton Deferred Compensation Plan” (the “Plan”), effective June 15, 2002, for a
select group of employees and directors, which is the successor to and
supersedes the Supplemental Plan and the Schuler Plan. In particular, the
Schuler Plan was merged with and into the Supplemental Plan, with the
Supplemental Plan being the Surviving Plan, which changed its name to the Plan,
all effective as of June 15, 2002. Except as expressly provided herein, all
amounts deferred under the Supplemental Plan or the Schuler Plan shall be
payable under the terms of the Plan as of the effective date.
The Plan hereby is amended and restated, effective January 1, 2005, and is
intended as good faith compliance with the American Jobs Creation Act of 2004
with respect to amounts earned or that become vested on and after January 1,
2005.
The Plan is intended to be an unfunded plan maintained primarily to provide
deferred compensation benefits for a select group of “management or highly
compensated employees” within the meaning of sections 201, 301, and 401 of
ERISA, and therefore exempt from the provisions of Parts 2, 3, and 4 of Title I
of ERISA. The Plan is intended to constitute a “nonqualified deferred
compensation plan” for purposes of Code section 3121(v)(2) as well as 4 U.S.C.
section 114.
1.2 Purpose. The primary purpose of the Plan is to provide a select group of
management and members of the Board of Directors with a capital accumulation
opportunity by deferring compensation on a pre-tax basis. The Plan also provides
the Company with a method of rewarding and retaining its highly compensated
executives and directors.

 

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ARTICLE 2
DEFINITIONS
Whenever used herein, the following terms shall have the meanings set forth
below, and, when the defined meaning is intended, the term is capitalized:

  (a)   “Affiliate” means any business entity 80% or more owned or controlled by
the Company.

  (b)   “Board” or “Board of Directors” means the Board of Directors of the
Company.

  (c)   “Change in Control” means the occurrence of any of the following events:

  (i)   A merger, consolidation or reorganization of the Company into or with
another corporation or other legal person if the stockholders of the Company,
immediately before such merger, consolidation or reorganization, do not,
immediately following such merger, consolidation or reorganization, then own
directly or indirectly, more than 50% of the combined voting power of the
then-outstanding voting securities of the corporation or other legal person
resulting from such merger, consolidation or reorganization in substantially the
same proportion as their ownership of Voting Securities (as hereinafter defined)
immediately prior to such merger, consolidation or reorganization;

  (ii)   The Company sells all or substantially all of its assets to another
corporation or other legal person, or there is a complete liquidation or
dissolution of the Company;

  (iii)   There is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), each as promulgated pursuant to the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), disclosing
that any person (as the term “person” is used in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the
term “beneficial owner” is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of securities representing 20% or
more of the combined voting power of the then-outstanding voting securities of
the Company (“Voting Securities”) (computed in accordance with the standards for
the computation of total percentage ownership for the purposes of Schedule 13D
or Schedule 14D-1 (or any successor schedule, form or report)); or

 

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  (iv)   The Company files a report or proxy statement with the Securities and
Exchange Commission pursuant to the Exchange Act disclosing in response to Form
8-K or Schedule 14A (or any successor schedule, form or report or item therein)
that a change in control of the Company has occurred or will occur in the future
pursuant to any then-existing contract or transaction.

      Notwithstanding the provisions set forth in (iii) or (iv) above, a “Change
in Control” shall not be deemed to have occurred for purposes of this Plan
solely because (i) the Company, (ii) any Affiliate, or (iii) any employee stock
ownership plan or any other employee benefit plan of the Company or any
Affiliate either files or becomes obligated to file a report or a proxy
statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or
Schedule 14A (or any successor schedule, form or report or item therein) under
the Exchange Act disclosing beneficial ownership by it of Voting Securities,
whether in excess of 20% or otherwise, or because the Company reports that a
change in control of the Company has occurred or will occur in the future by
reason of such beneficial ownership. For purposes of calculating beneficial
ownership pursuant to this subsection, any Voting Securities held by Donald R.
Horton as of the date hereof or received by Donald R. Horton in connection with
any merger involving the Company and any affiliate of the Company shall not be
included in the calculation of beneficial ownership.     (d)   “Code” means the
Internal Revenue Code of 1986, as amended from time to time.

  (e)   “Committee” means a committee of three (3) or more persons appointed by
the Board to administer the Plan pursuant to Article 3.

  (f)   “Company” means D.R. Horton, Inc., a Delaware corporation.

  (g)   “Compensation” means an Employee’s Salary, Incentive Compensation,
Director’s Compensation, and other compensation paid by the Employer for the
Plan Year.

  (h)   “Deferral Account” means the accounting entry made with respect to each
Participant for the purpose of maintaining a record of each Participant’s
benefit under the Plan.

  (i)   “Director’s Compensation” means such amounts payable to an Employee for
the Plan Year for the Employee’s service on the Board for the Plan Year
including, without limitation, annual retainer and meeting fees.

  (j)   “Disability” means, with respect to amounts that were both earned and
vested as of December 31, 2004, and any earnings attributable thereto, a
condition which meets the definition of a disability as contained in the
Company’s long-term disability plan (as determined by the Committee in its sole
discretion). “Disability” means, with respect to amounts that are earned and/or
become vested on or after January 1, 2005, and any earnings attributable
thereto, a condition under which a Participant either (i) is unable to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, or (ii) is,
by reason of any medically determinable physical or mental impairment that can
be expected to result in death or can be expected to last for a continuous
period of not less than 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 Employer.

 

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  (k)   “Eligible Employee” means an Employee who is eligible to participate in
the Plan pursuant to Section 4.1.

  (l)   “Employee” means any person either (i) employed by the Employer whose
wages are subject to withholding for purposes of the Federal Insurance
Contribution Act, or (ii) serving as a member of the Board of Directors.

  (m)   “Employee Contributions” means those contributions credited to a
Participant’s Deferral Account in accordance with the Participant’s deferral
election pursuant to Section 5.1.

  (n)   “Employer” means the Company and each Affiliate of the Company.

  (o)   “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

  (p)   “Incentive Compensation” means such bonuses and other non periodic
amounts (not including equity compensation) payable to an Employee in addition
to his Salary and/or Director’s Compensation for services rendered during the
Plan Year, which may be paid to the Employee in the following Plan Year as
determined by the Employer in accordance with its general policies and
procedures and its sole discretion. Whether a payment qualifies as “Incentive
Compensation” shall be determined by the Company in its sole discretion.

  (q)   “Installment Eligibility Age” means the attainment of age 50 and
10 years of service with the Employer (including service with any predecessor
employers designated by the Company as such). This age and service requirement
is applicable only to eligibility to receive installment payments or delay
distributions until age 62 hereunder and shall not apply to, or affect or be
considered in interpreting, any other compensation, benefit, or plan of the
Company.

  (r)   “Participant” means an Eligible Employee who is participating in the
Plan pursuant to Section 4.2 or an Employee who participated in the Supplemental
Plan or the Schuler Plan whose compensation deferrals under those plans have
been credited to a Deferral Account under the Plan.

  (s)   “Plan” means the D.R. Horton Deferred Compensation Plan, as set forth
herein, and as it may be amended from time to time.

 

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  (t)   “Plan Year” means January 1 to December 31 of each calendar year. The
first Plan Year was a short plan year that began on June 15, 2002, and ended on
December 31, 2002.

  (u)   “Salary” means the base annual compensation payable to an Employee by
the Employer for services rendered during a Plan Year, before reduction for
amounts deferred pursuant to the Plan or to the D.R. Horton, Inc. Profit Sharing
Plus Plan, or any other deferred compensation, 401(k), or cafeteria plan, which
is payable in cash to the Employee for services to be rendered during the Plan
Year; provided that “Salary” shall exclude (i) Incentive Compensation, and
(ii) Director’s Compensation that may be paid by the Employer to an Employee
with respect to the Plan Year.

  (v)   “Schuler Plan” means the Schuler Homes, Inc. Deferred Compensation Plan
for Directors and Key Employees.

  (w)   “Supplemental Plan” means the D.R. Horton, Inc. Supplemental Executive
Retirement Plan No. 1.

ARTICLE 3
ADMINISTRATION
3.1 Authority of the Committee. The Board shall appoint a Committee of three
(3) or more persons to administer the Plan. The members of the Committee shall
be appointed by and shall serve at the discretion of the Board.
Subject to the provisions herein, the Committee shall have full power and
discretion to select Employees for participation in the Plan; to determine the
terms and conditions of each Employee’s participation in the Plan; to construe
and interpret the Plan and any agreement or instrument entered into under the
Plan; to establish, amend, or waive rules and regulations for the Plan’s
administration; to amend (subject to the provisions of Articles 9 and 12 herein)
the terms and conditions of the Plan and any agreement entered into under the
Plan; and to make other determinations which may be necessary or advisable for
the administration of the Plan.
3.2 Decisions Binding. Subject to Section 3.4(b), all determinations and
decisions of the Committee as to any disputed question arising under the Plan,
including questions of construction and interpretation, shall be final,
conclusive, and binding on all parties and shall be given the maximum possible
deference allowed by law.
3.3 Claim Procedures. If a request for Plan benefits is denied in whole or in
part, the Participant or his beneficiary (“claimant”) will be notified in
writing within 90 days after receipt of the claim. In some instances, the
Committee may require an additional 90 days to consider the claim. When
additional time is needed, the claimant will be notified of the special
circumstances requiring the extension. The extension may not exceed a total of
180 days from the date the claim was originally filed.
If additional information is necessary to process the claim, the claimant will
be notified of the items needed in order to consider the claim.

 

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If a claimant’s initial request for benefits is denied, the notice of the denial
will include the specific reasons for denial and references to the relevant Plan
provisions on which the denial was based, a description of any additional
material or information necessary to perfect the claim and an explanation of why
such information is necessary, if applicable, and a description of the Plan’s
review procedures and the time limits applicable thereto, including a statement
of the claimant’s rights under Section 502(a) of ERISA.
Within 60 days after receiving a denial, the claimant or his authorized
representative may appeal the decision by requesting a review by writing the
Committee. On appeal, the claimant may submit in writing any comments or issues
with respect to the claim and/or any additional documents or information not
considered during the initial review and, upon request, the claimant may review
all documents pertinent to the claim.
A decision on appeal will normally be given within 60 days of the receipt of the
appeals request. If special circumstances warrant an extension, then the
decision will be made no later than 120 days after receipt of the appeal.
Subject to Section 3.4, the Committee’s decision on appeal shall be final and
binding on all parties.
If a claimant’s appeal is denied in whole or in part, the notice of the decision
on appeal shall include the specific reasons for the denial and reference to the
relevant Plan provisions on which the denial was based, a statement that, upon
request and free of charge, the claimant may review and copy all documents
relevant to the claim for benefits, a statement describing the Plan’s binding
arbitration procedures (or, on or after a Change in Control, other contest
procedures) and the claimant’s rights under Section 502(a) of ERISA.
3.4 Arbitration. (a) Pre Change in Control. The following provisions shall apply
before a Change in Control. Any individual making a claim for benefits under
this Plan may contest the Committee’s decision to deny such claim or appeal
therefrom only by submitting the matter to binding arbitration before a single
arbitrator. Any arbitration shall be held in Fort Worth, Texas, unless otherwise
agreed to by the Committee. The arbitration shall be conducted pursuant to the
Commercial Arbitration Rules of the American Arbitration Association.
The arbitrator’s authority shall be limited to the affirmation or reversal of
the Committee’s denial of the claim or appeal, based solely on whether or not
the Committee’s decision was arbitrary or capricious, and the arbitrator shall
have no power to alter, add to, or subtract from any provision of this Plan.
Except as otherwise required by ERISA, the arbitrator’s decision shall be final
and binding on all parties, if warranted on the record and reasonably based on
applicable law and the provisions of this Plan. The arbitrator shall have no
power to award any punitive, exemplary, consequential or special damages, and
under no circumstances shall an award contain any amount that in any way
reflects any of such types of damages. Each party shall bear its own attorney’s
fees and costs of arbitration. Judgment on the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof.
(b) Post Change in Control. On and after a Change in Control, the Committee’s
decisions shall be given no special deference, but rather shall be reviewed de
novo, and a claimant may contest any Committee decision through arbitration or
litigation, at the forum and the venue of his or her choice. The Company shall
be liable for all Court or arbitration costs and legal fees if the claimant is
the prevailing party.

 

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3.5 Indemnification. Each person who is or shall have been a member of the
Committee, or of the Board, shall be indemnified and held harmless by the
Employer against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party, or in
which he or she may be involved by reason of any action taken or failure to act
under the Plan, and against and from any and all amounts paid by him in
settlement thereof, with the Employer’s approval, or paid by him in satisfaction
of any judgment in any such action, suit or proceeding against him, provided he
or she shall give the Employer an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his own
behalf.
The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Employer’s Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Employer may have to indemnify them or hold
them harmless.
ARTICLE 4
ELIGIBILITY AND PARTICIPATION
4.1 Eligibility. The Committee shall determine, in its sole and absolute
discretion, which such Employees shall be eligible to participate from time to
time, and may modify such determinations at any time, provided that at all times
the Plan shall continue to qualify as an unfunded plan maintained primarily to
provide deferred compensation benefits to a select group of management or highly
compensated employees, within the meaning of sections 201, 301, and 401 of
ERISA. To be eligible for selection by the Committee, an Employee must either
(i) be a Director serving on the Board, or (ii) have total Compensation for the
Plan Year scheduled to be at least $100,000 (or, if greater, the highly
compensated employee threshold under Code section 414(q)). In addition, to be
eligible to participate herein, a former Schuler Plan participant must consent
to the transfer of assets held in the Trust informally funding the Schuler Plan
(with First Hawaiian Bank as Trustee) being transferred to the Grantor Trust
informally funding this Plan, and must consent to the distribution rules
provided for herein with respect to amounts formerly credited to the Schuler
Plan.
4.2 Participation. Each Eligible Employee shall become a Participant in the Plan
upon his deferral of Compensation hereunder, pursuant to Article 5.
In the event a Participant ceases to be eligible to participate in the Plan,
such Participant shall become an inactive Participant, retaining all the rights
described under the Plan, except the right to make any further deferrals, until
such time that the Participant again becomes an active Participant.

 

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4.3 Partial Year Eligibility. Eligibility only begins on the first day of the
first Plan Year subsequent to meeting the eligibility requirements to
participate in the Plan. No partial year participation is permitted for an
Employee that first becomes eligible to participate in the Plan after the
beginning of the Plan Year.
4.4 Notice. The Company shall notify an Employee within a reasonable time of
such Employee’s gaining or losing eligibility for active participation in the
Plan.
ARTICLE 5
CONTRIBUTIONS TO DEFERRAL ACCOUNTS
5.1 Compensation Deferrals. Subject to Sections 5.2 and 5.3, an Eligible
Employee may elect to defer and have credited to his Deferral Account for any
Plan Year (i) up to one hundred percent (100%) of his Incentive Compensation
and/or Director’s Compensation, and (ii) up to ninety percent (90%) of his
Salary; provided, however, that the amount of deferrals selected by the
Participant shall not reduce his non-deferred Compensation below the amount that
is required to withhold for any state or federal payroll taxes (including
FICA/Medicare tax on deferred amounts), income tax, payments to be withheld
pursuant to the D.R. Horton Profit Sharing Plus Plan or any other benefit plan
of the Employer (other than this Plan), and any other required or elected
withholding. The minimum amount of Compensation that may be deferred in any Plan
Year is five thousand dollars ($5,000) (or two thousand five hundred dollars
($2,500) in the case of the first (short) Plan Year).
5.2 Deferral Election. Eligible Employees and Participants shall make their
elections to defer all or a portion of their Compensation for a Plan Year no
later than December 31 prior to the beginning of the Plan Year in which the
Salary, Incentive Compensation, and/or Director’s Compensation is to be earned,
or not later than thirty (30) calendar days following notification of
eligibility to participate for a partial Plan Year (with respect to Compensation
not yet earned), such periods being referred to as “enrollment periods.”
Notwithstanding the foregoing, any deferral election a Participant made under
the Supplemental Plan or the Schuler Plan shall be null and void effective as of
June 15, 2002.
This Section 5.2 shall apply equally to Incentive Compensation and to other
types of Compensation, notwithstanding that Incentive Compensation is earned
based on the Company’s fiscal year (October 1 to September 30) and paid
quarterly. For example, an election made during the enrollment period for the
2005 Plan Year (i.e., prior to December 31, 2004) shall serve to defer Incentive
Compensation earned in the final three quarters of FY05 (i.e., January 1 through
September 30, 2005) and the first quarter of FY06 (i.e., October 1 through
December 31, 2005), these four quarters together corresponding to the 2005
calendar year Plan Year.
5.3 Length of Deferral and Modification of Elections. All deferral elections
shall be made in the form specified by the Committee, and shall be irrevocable
for the Plan Year in which they are in effect. Once made, a Participant’s
deferral election shall remain in effect for all subsequent Plan Years for which
the Participant is an Eligible Employee unless and until the Participant
increases, decreases, or terminates such election with respect to a future Plan
Year. Deferral election changes must be submitted to the Employer no later than
December 31 prior to the beginning of the Plan Year for which the change is to
be effective.

 

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During the enrollment period Participants shall elect (i) the percentage or flat
dollar amount of each eligible component of Compensation to be deferred;
(ii) the deemed investment elections of the amounts to be deferred, in
accordance with Section 7.2; (iii) the Participant’s distribution preference
under either Section 6.2 (scheduled in-service distribution) or Section 6.3
(distribution following termination of employment or Board service); and (iv) a
Beneficiary designation. Each of the Participant’s elections or choices
described above must be received by (or must be on file with) the Company no
later than December 31 prior to the beginning of the applicable Plan Year.
5.4 Revocation of 2005 Deferral Elections. Notwithstanding anything herein to
the contrary, with respect to deferral elections for the Plan Year ending on
December 31, 2005 (the “2005 Deferral Election”), Participants shall have the
one-time opportunity to elect, prior to December 31, 2005, to cancel their 2005
Deferral Election and receive a lump-sum payment of all amounts that would have
otherwise been deferred under the Plan pursuant to their 2005 Deferral Election,
increased or reduced by earnings or losses credited with respect thereto through
the date of distribution. Any distributions that result from the cancellation of
a 2005 Deferral Election shall be paid to the applicable Participant in a lump
sum no later than December 31, 2005 or such later date on which the Participant
first obtains a legally binding right to receive such amounts. Any amounts that
become payable to a Participant pursuant to the cancellation of his or her 2005
Deferral Election shall be included in the taxable income of the Participant for
the calendar year ending December 31, 2005 or such later year when such amounts
become earned and vested (within the meaning of Section 409A of the Code).
ARTICLE 6
DISTRIBUTIONS
6.1 Distribution Elections. In respect of amounts earned or vested on or after
January 1, 2005, each Participant shall make a distribution election (A) on or
before December 31, 2008 (with respect to amounts earned prior to January 1,
2009); or (B) within the time period specified in Sections 5.2 and 5.3 (with
respect to amounts earned on or after January 1, 2009), in each case choosing
either (i) scheduled in-service distributions pursuant to Section 6.2, or
(ii) distributions after termination of employment or Board service pursuant to
Section 6.3. Participants also can elect, pursuant to Section 6.3(e), to delay
distributions to the later of termination of employment or Board service or age
62. Distribution elections shall be made in the manner specified by the
Committee. If no valid and timely distribution election is made to select either
scheduled in-service distributions or else distributions after termination of
employment or Board service (or age 62) in accordance with this Section 6.1, the
Participant’s Deferral Account will be distributed in the form of a lump sum
payment following termination of employment or Board Service, subject to the
rules of Section 6.3(d).
In respect of any amount earned or vested on or after January 1, 2005, a
Participant may, no later than December 31, 2008, make a new distribution
election if an election has not previously been made, or amend a previous
distribution election to change the time and/or form of payment; provided
however, that (i) no such election made in the calendar year 2006 may change
payment elections with respect to payments that would have otherwise been
received in the calendar year 2006, or to accelerate payments into calendar year
2006 that would not have otherwise been made in 2006; (ii) no such election made
in the calendar year 2007 may change payment elections with respect to payments
that would have otherwise been received in the calendar year 2007, or to
accelerate payments into calendar year 2007 that would not have otherwise been
made in 2007; and (iii) no such election made in the calendar year 2008 may
change payment elections with respect to payments that would have otherwise been
received in the calendar year 2008, or to accelerate payments into calendar year
2008 that would not have otherwise been made in 2008.

 

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6.2 Scheduled In-Service Distributions.
(a) Lump Sum or Installment Payments. A Participant may elect, during the
applicable enrollment period and in a manner prescribed by the Committee, to
receive all or a portion of the vested portion of his Deferral Account while he
is still employed by the Employer in (i) a single lump sum payment, or
(ii) annual installment payments over a period of two (2) to five (5) years;
provided, however, that a Participant may not elect to receive a scheduled
in-service distribution of any portion of his or her Deferral Account
attributable to amounts deferred under the Supplemental Plan. If a Participant
elects installment payments pursuant to (ii) above, the vested portion of such
Participant’s Deferral Account must be at least $25,000 in the aggregate at the
time that installment payments would commence in order for such election to be
honored; if the vested portion of such Participant’s Deferral Account is less
than $25,000, payment shall be made in a lump sum. If no valid distribution
election is made to select either a lump sum payment or installments in
accordance with this Section 6.2(a), the Participant’s Deferral Account will be
distributed in the form of a lump sum payment on the specific in-service date
indicated.
The amount of each installment payment shall be equal to the balance remaining
in the portion of the Participant’s Deferral Account that is subject to such
installment election (as determined immediately prior to each such payment),
multiplied by a fraction, the numerator of which is one (1), and the denominator
of which is the total number of remaining installment payments. The installment
amount shall be adjusted annually to reflect gains and losses, if any, allocated
to such Participant’s Deferral Account pursuant to Article 7.
(b) Time of Distribution. A Participant’s election under this Section 6.2 must
specify the future year in which the payment of the deferred amounts shall be
made (in the case of a lump sum) or commence (in the case of installments),
provided that the year in which distributions are to commence is at least two
(2) years after the end of the Plan Year in which the applicable compensation is
deferred. Scheduled in-service distributions shall commence in January of the
year specified in the Participant’s election.
(c) Separate Annual Elections. Any scheduled in-service distribution must be
elected separately for each Plan Year for which compensation is deferred. Thus,
to elect a scheduled in-service distribution for a future Plan Year’s deferral,
a new distribution election must be submitted during the applicable enrollment
period for such Plan Year. Once the applicable enrollment period has passed, a
scheduled in-service distribution cannot be elected for that Plan Year’s
deferral.

 

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(d) Amendment of Election. A Participant may amend his or her election as to the
form or timing of a scheduled in-service distribution provided that such
amendment (i) must be made in the manner specified by the Committee at least
12 months prior to the date the distribution otherwise would be made (in the
case of a lump sum payment) or commence (in the case of installments);
(ii) shall not take effect until 12 months after it is made; and (iii) must
defer the payment for a minimum of five (5) additional years. The limitation set
forth in clauses (ii) and (iii) of this Section 6.2(d) shall only apply to
amounts that are earned and/or become vested on or after January 1, 2005, and
any earnings attributable thereto, and shall not apply to amounts that were both
earned and vested as of December 31, 2004, and any earnings attributable
thereto. For purposes of the limitation set forth in clause (iii) of this
Section 6.2(d), distributions that are to be paid in installments (as opposed to
in a lump sum) shall be treated as a single payment payable on the date the
installments are due to commence. Any change in the form or timing of payment
may not accelerate distributions to the Participant, except to the extent
permitted under Section 409A of the Code without the imposition of the
additional tax set forth in Section 409A(a)(1)(B) of the Code.
(e) Termination of Employment or Board Service Prior to Completion of In-Service
Distribution. If a Participant’s employment or Board service with the Employer
terminates for any reason (including Disability or death) prior to receiving
full payment of a scheduled in-service distribution, the balance of the vested
portion of such Participant’s Deferral Account shall be paid in the form of a
lump sum: (i) with respect to amounts that were both earned and vested as of
December 31, 2004, and any earnings attributable thereto, as soon as
administratively practicable following the Participant’s termination of
employment or Board service, and (ii) with respect to amounts that are earned
and/or become vested on or after January 1, 2005, and any earnings attributable
thereto, at the time provided for in Section 6.3(d).
Notwithstanding anything in this Section 6.2 to the contrary, if a Participant
has elected or is receiving an Interim Distribution (as such term is defined in
the Schuler Plan) under the Schuler Plan as of the original effective date of
this Plan (i.e., June 15, 2002), the Participant shall receive or shall continue
receiving such distribution in accordance with his election under the Schuler
Plan; provided, however, installment payments shall not be made for a period
longer than five (5) years from the first January 1 following the original
effective date of this Plan (i.e., June 15, 2002); any undistributed portion of
the Participant’s Deferral Account at the end of such five (5) year period shall
be distributed in the form of a lump sum at such time.
6.3 Distributions Following Termination of Employment or Board Service.
(a) Lump Sum or Installment Payments for Amounts Earned and Vested as of
December 31, 2004. With respect to amounts that were both earned and vested as
of December 31, 2004, and any earnings attributable thereto, within ninety
(90) days of a Participant’s termination of employment after attaining
Installment Eligibility Age, separation from Board service, or incurring a
Disability, the Participant may elect to receive the vested balance credited to
that portion of his or her Deferral Account (to the extent not subject to a
in-service distribution election under Section 6.2) in (i) a single lump sum
payment or (ii) annual installment payments over a period of two (2) to ten
(10) years, subject to the payment timing rules set forth in Section 6.3(d). If
a Participant is Installment Eligibility Age, separates from Board service, or
incurs a Disability and he fails to make a distribution election pursuant to
this Section 6.3(a) with respect to amounts that were both earned and vested as
of December 31, 2004, and any earnings attributable thereto, within ninety
(90) days following his termination of employment, or if the vested balance
credited to his Deferral Account is less than $50,000, payment of that portion
of the Participant’s Deferral Account shall be made in a single lump sum,
subject to the rules set forth in Section 6.3(d). Notwithstanding anything
herein to the contrary, with respect to amounts that were both earned and vested
as of December 31, 2004, and any earnings attributable thereto, if a
Participant’s employment terminates for any reason prior to the date the
Participant attains Installment Eligibility Age or incurs a Disability, that
portion of such Participant’s Deferral Account shall be paid to the Participant
or, in the event of his death, the Participant’s designated beneficiary in a
single lump sum payment as soon as administratively feasible following the
Participant’s termination of employment (and the timing rules of Section 6.3(d)
shall not apply).

 

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The amount of each installment payment under (ii) above shall be equal to the
balance remaining in the portion of the Participant’s Deferral Account that is
subject to such installment election (as determined immediately prior to each
such payment), multiplied by a fraction, the numerator of which is one (1), and
the denominator of which is the total number of remaining installment payments.
The installment amount shall be adjusted annually to reflect gains and losses,
if any, allocated to such Participant’s Deferral Account pursuant to Article 7.
(b) Lump Sum or Installment Payments for Amounts Earned and/or Vested on or
after January 1, 2005. As an alternative to electing a scheduled in-service
distribution under Section 6.2, with respect to amounts that are earned and/or
become vested on or after January 1, 2005, and any earnings attributable
thereto, a Participant may elect, during the applicable enrollment period
specified in Section 6.1, to receive the vested balance credited to that portion
of his or her Deferral Account (to the extent not subject to a in-service
distribution election under Section 6.2) following termination of employment or
Board service (for any reason, including Disability) in (i) a single lump sum
payment or, (ii) annual installment payments over a period of two (2) to ten
(10) years, subject to the rules of Section 6.3(d). If a Participant elects
installment payments pursuant to (ii) above, the vested portion of such
Participant’s Deferral Account must be at least $50,000 in the aggregate at the
time that installment payments would commence in order for such election to be
honored; if the vested portion of such Participant’s Deferral Account is less
than $50,000, payment shall be made in a lump sum. If no valid distribution
election is made with respect to amounts that are earned and/or become vested on
or after January 1, 2005, and any earnings attributable thereto, to select
either a lump sum payment or installments in accordance with this
Section 6.3(b), that portion of the Participant’s Deferral Account will be
distributed in the form of a lump sum payment, subject to the rules of
Section 6.3(d).
Notwithstanding anything herein to the contrary, with respect to amounts that
are earned and/or became vested on or after January 1, 2005, and any earnings
attributable thereto, if a Participant’s employment terminates for any reason
prior to the date the Participant attains Installment Eligibility Age or incurs
a Disability, then that portion of such Participant’s Deferral Account shall be
paid to the Participant or, in the event of the Participant’s death, the
Participant’s designated beneficiary in a single lump sum at the time provided
for in Section 6.3(d).
The amount of each installment payment under (ii) above shall be equal to the
balance remaining in the portion of the Participant’s Deferral Account that is
subject to such installment election (as determined immediately prior to each
such payment), multiplied by a fraction, the numerator of which is one (1), and
the denominator of which is the total number of remaining installment payments.
The installment amount shall be adjusted annually to reflect gains and losses,
if any, allocated to such Participant’s Deferral Account pursuant to Article 7.

 

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Any prior elections with respect to retirement or termination of employment made
under the Supplemental Plan or Schuler Plan shall be null and void.
(c) Installment Eligibility Age. If a Participant who is an employee elects
installment payments pursuant to Section 6.3(a) or (b), such Participant must
have reached Installment Eligibility Age in order for such election to be
honored, unless such Participant terminates employment on account of Disability.
Otherwise, the Participant’s Deferral Account will be paid in the form of a lump
sum following termination of employment, subject to the rules of Section 6.3(d).
Participants who are members of the Board or Participants who are employees
terminating employment on account of Disability may receive installment payments
regardless of whether they have reached Installment Eligibility Age. A
Participant, who is an employee, must reach Installment Eligible Age to delay
distributions until age 62 pursuant to Plan Section 6.3(e), otherwise, the
Participant’s Deferral Account will be paid in the form of a lump sum following
his or her termination of employment, subject to the rules of Section 6.3(d).
Participant who are members of the Board may elect to delay distributions until
age 62, regardless of whether they have reached Installment Eligibility Age.
(d) Time of Distribution. Notwithstanding anything herein to the contrary,
distribution of such Participant’s Deferral Account shall be made in accordance
with the following schedule:

  (i)   Except as set forth in Sections 6.2(e) or 6.3(a), with respect to
Compensation both earned and vested up to and including December 31, 2004 (and
any earnings attributable thereto), if the termination of employment or service
occurs after January 1 of any calendar year, but before June 30 of such year,
distributions shall commence on July 1 of the calendar year following the year
of termination (for example if termination of employment occurs on February 1,
2006, distributions commence on July 1, 2007).

  (ii)   Except as set forth in Sections 6.2(e) or 6.3(a), with respect to
Compensation both earned and vested up to and including December 31, 2004 (and
any earnings attributable thereto), if the termination of employment or service
occurs after July 1 of any calendar year, but before December 31 of such year,
distributions shall commence on January 1 of the second calendar year following
the year of termination (for example if termination of employment occurs on
August 1, 2006, distributions commence on January 1, 2008).

  (iii)   With respect to Compensation earned or vested on or after January 1,
2005 (and any earnings attributable thereto), if the termination of employment
or service occurs after January 1 of any calendar year, but before June 30 of
such year, distributions shall commence on January 1 of the calendar year
following the year of termination (for example if termination of employment
occurs on February 1, 2006, distributions commence on January 1, 2007).

 

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  (iv)   With respect to Compensation earned or vested on or after January 1,
2005 (and any earnings attributable thereto), if the termination of employment
or service occurs after July 1 of any calendar year, but before December 31 of
such year, distributions shall commence on July 1 of the calendar year following
the year of termination (for example if termination of employment occurs on
August 1, 2006, distributions commence on July 1, 2007).

(e) Delay of Distributions Until Age 62. A Participant can elect or amend his or
her election to delay the payment (in the case of a lump sum) or the
commencement of payment (in the case of installments) of his or her Deferral
Account after termination of employment or Board service to a date no later than
the January of the year immediately following his or her attainment of age 62,
provided that such election satisfies the rules of Section 6.1, or such amended
election meets the requirements for amended elections described in
Section 6.2(d) or 6.3(g). An amended election may not accelerate distributions
to the Participant, except to the extent permitted under Section 409A of the
Code without the imposition of the additional tax set forth in Section
409A(a)(1)(B) of the Code.
(f) Death of Participant. Notwithstanding anything herein to the contrary, if a
Participant dies prior to receiving full payment of his or her Deferral Account
as elected under this Section 6.3, the balance of the vested portion of such
Participant’s Deferral Account shall be paid to the Participant’s beneficiary or
other person determined pursuant to Section 7.3 in the form of a lump sum as
soon as administratively practicable following the Participant’s death.
(g) Amendment of Election. A Participant may amend his or her election as to the
form or timing of a distribution under this Section 6.3, provided that such
amendment (i) must be made in the manner specified by the Committee at least
12 months prior to the date the distribution otherwise would be made (in the
case of a lump sum payment) or commence (in the case of installments);
(ii) shall not take effect until 12 months after it is made; and (iii) must
defer the payment for a minimum of five (5) additional years. The limitation set
forth in clauses (ii) and (iii) of this Section 6.3(g) shall only apply to
amounts that are earned and/or become vested on or after January 1, 2005, and
any earnings attributable thereto, and shall not apply to amounts that were both
earned and vested as of December 31, 2004, and any earnings attributable
thereto. For purposes of the limitation set forth in clause (iii) of this
Section 6.3(g), distributions that are to be paid in installments (as opposed to
in a lump sum) shall be treated as a single payment payable on the date the
installments are due to commence. Any change in the form or timing of payment
may not accelerate distributions to the Participant, except to the extent
permitted under Section 409A of the Code without the imposition of the
additional tax set forth in Section 409A(a)(1)(B) of the Code.

 

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6.4 Nonscheduled In-Service Withdrawals. Notwithstanding any provision of this
Plan to the contrary, a Participant may at any time request a lump sum
distribution of all or a portion of that portion of his Deferral Account that
was both earned and vested as of December 31, 2004, and any earnings
attributable thereto. In the event a Participant requests a distribution under
this Section 6.4, (i) such Participant will receive a portion of his Deferral
Account equal to 90% of the requested distribution, and the remaining 10% of the
requested distribution will be forfeited, and (ii) such Participant will be
ineligible to participate in the Plan for the remainder of the Plan Year in
which the distribution is received and for the immediately following Plan Year.
This Section 6.4 shall not apply to amounts that are earned and/or become vested
on or after January 1, 2005, and any earnings attributable thereto and
Nonscheduled In-Service Withdrawals of such amounts are not permitted.
6.5 Unforeseeable Emergency. The Committee shall have the authority to alter the
timing or manner of payment of deferred amounts in the event that the
Participant establishes, to the satisfaction of the Committee, that he or she
has experienced an unforeseeable emergency. In such event, the Committee may, in
its sole discretion, distribute all or a portion of such Participant’s Deferral
Account to the Participant without penalty.
For purposes of this Section 6.5, “unforeseeable emergency” shall mean a severe
financial hardship to the Participant resulting from an illness or accident of
the Participant, the Participant’s spouse, or a dependent of the Participant,
loss of the Participant’s property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant. Payment under this Section 6.5 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 itself
would not cause severe financial hardship; and (iii) by cessation of deferrals
under the Plan. Distributions of amounts because of an unforeseeable emergency
only may be permitted to the extent reasonably necessary to satisfy the hardship
and to pay taxes on the distribution. Examples of what are not considered to be
unforeseeable emergencies include the need to send a Participant’s child to
college or the desire to purchase a home. The Participant’s Deferral Account
will be credited with earnings in accordance with the Plan up to the date of
distribution.
The Committee shall judge the existence of the unforeseeable emergency. The
Committee’s decision in this regard and the manner in which, if at all, the
Participant’s future deferral opportunities shall be suspended, and/or the
manner in which, if at all, the payment of deferred amounts to the Participant
shall be altered or modified, shall be final, conclusive, and not subject to
appeal. In the event a Participant receives a distribution under this
Section 6.5, then such Participant will be ineligible to participate in the Plan
for the remainder of the Plan Year in which the distribution was received.
6.6 Incompetence of Distributee. In the event that it shall be found that a
person entitled to receive payment under the Plan (including a designated
beneficiary) is a minor or is physically or mentally incapable of personally
receiving and giving a valid receipt for any payment due (unless prior claim
therefor shall have been made by a duly qualified committee or other legal
representative), such payment may be made to any person whom the Committee in
its sole discretion determines is entitled to receive it, and any such payment
shall fully discharge the Employer, the Company, the Committee and the Plan from
any further liability to the person otherwise entitled to payment hereunder, to
the extent of such payment.

 

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ARTICLE 7
DEFERRED COMPENSATION ACCOUNTS
7.1 Participants’ Accounts. The Company shall establish and maintain an
individual bookkeeping Deferral Account for Employee Contributions. Each
Deferral Account shall be credited with Employee Contributions generally within
five (5) business days of the applicable payroll deduction, and as provided in
Section 7.2. The Employee Contributions held in each Participant’s Deferral
Account shall be one hundred percent (100%) vested at all times.
A Participant’s Deferral Account also shall be credited with (i) compensation
deferrals, if any, made under the Supplemental Plan or the Schuler Plan,
(ii) Matching Contributions and Discretionary Contributions (as those terms are
defined in the Schuler Plan) made on the Participant’s behalf under the Schuler
Plan, if any, and (iii) deemed earnings credit to such amounts prior to the
effective date of this Plan. (These credits are in lieu of the amounts formerly
credited under the Supplemental Plan and Schuler Plan, which are being merged
into this Plan.) Participants shall be one hundred percent (100%) vested at all
times in the compensation deferrals made under the Supplemental Plan or the
Schuler Plan credited to their Deferral Accounts. If a Participant’s Deferral
Account is credited with Matching Contributions and/or Discretionary
Contributions made under the Schuler Plan, the Participant’s vested interest in
such contributions shall be determined in accordance with the terms of the
Schuler Plan.
7.2 Earnings on Deferred Amounts. A Participant’s Deferral Account shall be
credited with earnings (or losses) based on a deemed investment of the
Participant’s Deferral Account, as directed by each Participant, which deemed
investment shall be in one or more funds among the investment options selected
by the Committee from time to time. Deemed earnings (and losses) on a
Participant’s Deferral Account shall be based upon the daily unit valuation of
the funds selected by such Participant, and shall be credited to a Participant’s
Deferral Account on a monthly basis. Deemed earnings (or losses) shall be paid
out to a Participant in accordance with the applicable Deferral Election Form.
Any portion of a Participant’s Deferral Account which is subject to distribution
in installments shall continue to be credited with deemed earnings (or losses)
until fully paid out to the Participant.
The Committee reserves the right to change the options available for deemed
investments under the Plan from time to time, or to eliminate any such option at
any time. A Participant may specify a separate investment allocation with
respect to each Deferral Election Form or amended Deferral Election Form.
Participants may modify their deemed investment instructions each business day
with respect to any portion (whole percentages only) of their Deferral Account;
provided they notify the Committee or its designee within the time and in the
manner specified by the Committee. Elections and amendments thereto pursuant to
this Section 7.2 shall be made in the manner prescribed by the Committee. The
Committee reserve the right to credit earnings (or losses) on a basis different
from that elected by the Participants.
7.3 Designation of Beneficiary. Each Participant may designate a beneficiary or
beneficiaries who, upon the Participant’s death will receive the amounts that
otherwise would have been paid to the Participant under the Plan. All
designations shall be signed by the Participant, and shall be in such form as
prescribed by the Committee. Each designation shall be effective as of the date
delivered to the Committee or its designee by the Participant.

 

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Participants may change their beneficiary designations on such form as
prescribed by the Committee. The payment of amounts deferred under the Plan
shall be in accordance with the last unrevoked written beneficiary designation
that has been signed by the Participant and delivered to the Committee or its
designee prior to the Participant’s death. Notwithstanding the foregoing, a
Participant who is married may not designate a beneficiary other than the
Participant’s spouse, unless the spouse consents in writing to such alternate
beneficiary designation.
In the event that all the beneficiaries named by a Participant pursuant to this
Section 7.3 predecease the Participant, the deferred amounts that would have
been paid to the Participant or the Participant’s beneficiaries shall be paid to
the Participant’s estate.
In the event a Participant does not designate a beneficiary, or for any reason
such designation is ineffective, in whole or in part, the amounts that otherwise
would have been paid to the Participant or the Participant’s beneficiaries under
the Plan shall be paid to the Participant’s estate.
ARTICLE 8
TRUST
Nothing contained in this Plan shall create a trust of any kind or a fiduciary
relationship between the Employer and any Participant. Nevertheless, the
Employer may establish one or more trusts, with such trustee(s) as the Committee
may approve, for the purpose of providing for the payment of deferred amounts
and earnings thereon. Such trust or trusts may be irrevocable, but the assets
thereof shall be subject to the claims of the Employer’s general creditors upon
the bankruptcy or insolvency of the Employer.
ARTICLE 9
CHANGE IN CONTROL
9.1 Trust and Trustees. Upon the occurrence of a Change in Control, the trust or
trusts that may be established by the Employer pursuant to Article 8 shall
become irrevocable and the Employer shall not thereafter be permitted to remove,
terminate, or change the trustee(s) without the prior written consent of the
majority of the Participants, with weighted voting as measured by their account
balances.
9.2 Advanced Funding. No later than 30 days after a Change in Control occurs,
the Employer shall make a contribution to the trust or trust(s) established
pursuant to Article 8 to the extent required to fully fund all benefits that are
or may become payable under the Plan, assuming for purposes of this calculation
that all Participants retire with 100% vesting, and to fund in advance all
administrative, legal, and other costs of maintaining the Plan, in an amount no
less than $125,000. No later than December 31 of each Plan Year thereafter, the
Employer shall make such additional contributions to the trust or trusts to
fully fund the additional benefits that may become payable to Participants or
beneficiaries under the Plan and the additional administrative, legal, and other
Plan expenses.
9.3 Amendment and Termination. After the occurrence of a Change in Control, the
Employer may not amend the Plan without the prior approval of a majority of the
Participants. After a Change in Control, the Employer may not terminate the Plan
until either (i) all benefits have been paid in full, or (ii) the majority of
the Participants approve the same. For purposes hereof, Participants’ votes
shall be weighted based on their relative Plan account balances.

 

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ARTICLE 10
RIGHTS OF PARTICIPANTS
10.1 Contractual Obligation. The Plan shall create an unfunded, unsecured
contractual obligation on the part of the Employer to make payments from the
Participants’ Deferral Accounts when due. Payment of Deferral Account balances
shall be made out of the general assets of the Employer or from the trust or
trusts referred to in Article 8 above.
10.2 Unsecured Interest. No Participant or party claiming an interest in
deferred amounts of a Participant shall have any interest whatsoever in any
specific asset of the Employer. To the extent that any party acquires a right to
receive payments under the Plan, such right shall be equivalent to that of an
unsecured general creditor of the Employer. Each Participant, by participating
hereunder, agrees to waive any priority creditor status for wage payments with
respect to any amounts due hereunder. The Employer shall have no duty to set
aside or invest any amounts credited to Participants’ Deferral Accounts under
this Plan. Accounts established hereunder are solely for bookkeeping purposes
and the Employer shall not be required to segregate any funds based on such
Accounts.
10.3 Employment. Nothing in the Plan shall interfere with or limit in any way
the right of the Employer to terminate a Participant’s employment at any time,
or confer upon any Participant any right to continue in the employ of the
Employer.
ARTICLE 11
WITHHOLDING OF TAXES
The Employer shall have the right to require Participants to remit to the
Employer an amount sufficient to satisfy federal, state, and local withholding
tax requirements, or to deduct from all payments made pursuant to the Plan (or
from a Participant’s other Compensation) amounts sufficient to satisfy
withholding tax requirements. Employment taxes with respect to amounts deferred
hereunder shall be payable in accordance with Code section 3121(v)(2) and may be
withheld from a Participant’s Compensation even if due prior to the time of a
distribution hereunder. The Employer makes no representations, warranties, or
assurances and assumes no responsibility as to the tax consequences of this Plan
or participation herein.
ARTICLE 12
AMENDMENT AND TERMINATION
Subject to Article 9, the Employer reserves the right to amend or modify the
Plan (in whole or in part) at any time by action of the Board or the Committee,
with or without prior notice. To the extent permitted under Code Section 409A
without imposition of the additional tax set forth in Section 409A(a)(1)(B), and
subject to Article 9, the Board or Committee may terminate the Plan (in whole or
in part) at any time, with or without prior notice. Except as described below in
this Article 12, no such amendment or termination shall in any material manner
adversely affect any Participant’s rights to any amounts already deferred or
credited hereunder or deemed earnings thereon, up to the point of amendment or
termination, without the consent of the Participant.

 

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To the extent permitted under Section 409A of the Code without imposition of the
additional tax set forth in Section 409A(a)(1)(B) of the Code, the Board may
terminate the Plan and commence termination payout for all or certain
Participants, or remove certain Employees as Participants, if it is determined
by the United States Department of Labor or a court of competent jurisdiction
that the Plan constitutes an employee pension benefit plan within the meaning of
section 3(2) of ERISA that is not exempt from the provisions of Parts 2, 3, and
4 of Title I of ERISA, or if the IRS otherwise taxes amounts deferred prior to
their scheduled payment date. If payout is commenced pursuant to the operation
of this Article 12, the payment of deferred amounts and earnings thereon shall
be made in the manner selected by each Participant under Section 6.2 herein
(other than the commencement date), as if the Participant had attained
Installment Eligibility Age.
ARTICLE 13
MISCELLANEOUS
13.1 Notice. Any notice or filing required or permitted to be given to the
Employer under the Plan shall be sufficient if in writing and hand delivered, or
sent by registered or certified mail to the D.R. Horton Deferred Compensation
Plan Committee, and if mailed, shall be addressed to the principal executive
offices of the Employer. Notice mailed to a Participant shall be at such address
as is given in the records of the Employer. Notices to the Employer shall be
deemed given as of the date of delivery. Notice to a Participant or beneficiary
shall be deemed given as of the date of hand delivery, or if delivery is made by
mail, three (3) days following the postmark date.
13.2 Nontransferability. Except as provided in Section 7.3 and this
Section 13.2, Participants’ rights to deferred amounts and earnings credited
thereon under the Plan may not be sold, transferred, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution, or pursuant to a domestic relations order, nor shall the Employer
make any payment under the Plan to any assignee or creditor of a Participant.
13.3 Severability. In the event any provision of the Plan shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.
13.4 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular, and the singular shall include the plural.
13.5 Costs of the Plan. All costs of implementing and administering the Plan
shall be borne by the Employer.
13.6 Successors. All obligations of the Employer under the Plan shall be binding
on any successor to the Employer, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation, or otherwise, of
all or substantially all of the business and/or assets of the Employer.
13.7 Applicable Law. Except to the extent preempted by applicable federal law,
the Plan shall be governed by and construed in accordance with the laws of the
state of Texas.

 

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ARTICLE 14
ADMINISTRATIVE INFORMATION
14.1 Plan Sponsor and Administrator. The Plan described herein is sponsored by:
D.R. Horton, Inc.
301 Commerce Street
Suite 500
Fort Worth, Texas 76102
The Company is the plan administrator and named fiduciary. Prior to a Change in
Control, the Company has been granted complete fiduciary discretion and
authority to administer, operate, and interpret the Plan and make final
decisions on such issues as eligibility, payment of benefits, claims, and claims
appeals, unless such decisions have been delegated to another party. However,
many day-to-day questions can be answered by the Benefits Department.
The agent for the service of legal process for the Plan is the Company.
14.2 Plan Type and Plan Year. Documents and reports for the Plan are filed with
the United States Internal Revenue Service and the Department of Labor under
Employer Identification Number: 75-2386963.
The official Plan name is the D.R. Horton Deferred Compensation Plan, which, for
government purposes, is intended to be an unfunded pension plan maintained by an
employer for a select group of management or highly compensated employees. Plan
records are maintained on an annual basis and December 31 is the end of the plan
year.
14.3 Plan Funding. The Plan is unfunded and unsecured and benefits are paid
solely from the Employer’s general assets.
ARTICLE 15
ERISA RIGHTS
Certain rights and protections are provided to Plan participants under the
Employee Retirement Income Security Act of 1974 (ERISA). These ERISA rights
include the following:

  (a)   Any Plan participant may contact the Benefits Department to examine all
Plan documents without charge. These may include the Plan descriptions and all
other documents filed with the United States Department of Labor.

  (b)   Copies of Plan documents and other information may be obtained by
writing to the Committee. A reasonable charge may be assessed for these copies.

 

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  (c)   Each Plan participant has the right to receive a written summary of the
Plan’s annual financial reports, if any. However, this type of plan is not
required to have either an annual financial report or a summary annual report.

  (d)   An employee may not be discharged or discriminated against to prevent
his obtaining a benefit or exercising his ERISA rights.

  (e)   If a claim for a benefit is denied, in whole or in part, a written
explanation from the Committee or a delegated representative will be provided.
Each participant has the right to have the plan administrator review and
reconsider any denied claim.

The named fiduciary for this Plan is the Company.
Under certain circumstances, outside assistance may be necessary to resolve
disputes between a Participant and Plan officials. For example:

  (a)   If a claim for benefits is denied or ignored, in whole or in part, after
a final review, the claim may be submitted to binding arbitration (or, after a
Change in Control, to either arbitration or a court, at the Participant’s
election).

  (b)   If a participant is discriminated against for pursuing a benefit or
exercising his ERISA rights, the participant may seek help from the United
States Department of Labor or file an arbitration claim (or, after a Change in
Control, either an arbitration claim or a lawsuit, at the Participant’s
election).

For further information about this statement or about ERISA rights, contact the
Benefits Department. Or, you may contact the nearest area office of the Employee
Benefits Security Administration, United States Department of Labor, listed in
your telephone directory or the Division of Technical Assistance and Inquiries,
Employee Benefits Security Administration, U.S. Department of Labor, 200
Constitution Avenue N.W., Washington D.C. 20210. You may also obtain certain
publications about your rights and responsibilities under ERISA by calling the
publications hotline of the Employee Benefits Security Administration.

 

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IN WITNESS WHEREOF, D.R. Horton, Inc. has caused this document to be executed by
its duly authorized officer on this 10th day of December, 2008, effective as of
the date set forth above.

            D.R. HORTON, INC.
      By:   /s/ Donald J. Tomnitz         Its: Vice Chairman, President and    
           Chief Executive Officer   

 

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