exv10w3



 





Exhibit 10.3




 





INDYMAC BANCORP, INC.

SENIOR MANAGER AND NON-EMPLOYEE DIRECTOR

DEFERRED COMPENSATION PLAN




Effective December 5, 2006

Amended and Restated September 17, 2007




 






 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page #	 
	ARTICLE I — PURPOSE OF PLAN	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II — DEFINITIONS	 	 	1	 
	Section 2.1
	 	Definitions	 	 	1	 
	Section 2.2
	 	Rules of Construction	 	 	4	 
	 
	 	 	 	 	 	 
	ARTICLE III — ELIGIBILITY; AWARDS; ELECTIONS	 	 	4	 
	Section 3.1
	 	Eligibility	 	 	4	 
	Section 3.2
	 	Incentive Awards	 	 	4	 
	Section 3.3
	 	Vesting of Awards	 	 	5	 
	Section 3.4
	 	Deferrals.	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE IV — ESTABLISHMENT AND MAINTENANCE OF ACCOUNTS	 	 	6	 
	Section 4.1
	 	Maintenance of Accounts	 	 	6	 
	Section 4.2
	 	Interest Earning Sub-Account	 	 	6	 
	Section 4.3
	 	Stock Earning Sub-Account	 	 	6	 
	Section 4.4
	 	Eligible Awards which Do Not Vest	 	 	7	 
	Section 4.5
	 	Account Valuation; Participant Statements	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE V — DISTRIBUTION OF ACCOUNTS	 	 	7	 
	Section 5.1
	 	Deferral Period and Method of Payment	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE VI — ADMINISTRATION	 	 	8	 
	Section 6.1
	 	Authority and Duties of Administrator.	 	 	8	 
	Section 6.2
	 	Manner of Taking Action	 	 	8	 
	Section 6.3
	 	Plan Expenses	 	 	9	 
	Section 6.4
	 	Indemnification of Committee	 	 	9	 
	Section 6.5
	 	Claims Procedure	 	 	9	 
	Section 6.6
	 	Performance-Based Awards	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE VII — BENEFICIARY DESIGNATION	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE VIII — AMENDMENT OR TERMINATION	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE IX — GRANTOR TRUST CONTRIBUTIONS	 	 	10	 






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	 	 	 	 	Page #	 
	ARTICLE X — MISCELLANEOUS	 	 	11	 
	Section 10.1
	 	Liability of the Plan Sponsor and Company; Nature of Obligation	 	 	11	 
	Section 10.2
	 	Right of Set-Off	 	 	11	 
	Section 10.3
	 	No Guarantee of Employment	 	 	11	 
	Section 10.4
	 	Benefits Not Assignable	 	 	11	 
	Section 10.5
	 	Severability	 	 	11	 
	Section 10.6
	 	Tax Withholding	 	 	11	 
	Section 10.7
	 	Headings	 	 	11	 
	Section 10.8
	 	Governing Law	 	 	11	 







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ARTICLE I

PURPOSE OF PLAN




     The purpose of the IndyMac Bancorp, Inc. Senior Manager and Non-Employee Director Deferred
Compensation Plan is to provide for the deferral of Eligible Awards granted to eligible key
employees and non-employee members of the Board of Directors of IndyMac Bancorp, Inc. (the
“Company”), IndyMac Bank, F.S.B. (the “Bank”), and certain of the Company’s affiliates. It is
intended that such purposes of the Plan will (i) assist the Company in attracting and retaining
such key employees and non-employee directors; (ii) motivate Participants to achieve long-range
goals of the Company; (iii) provide benefits to Participants which are competitive with the
benefits provided by similar companies; and (iv) further identify Participants’ interests with
those of the Company’s other stockholders in those instances in which awards are credited under the
Plan in the form of Stock.



     The Plan has been established primarily for the purpose of providing deferred compensation for
a select group of management or highly compensated employees of the Company and is intended to
qualify under Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. The Company shall make
contributions to a Trust for purposes of defraying the cost of payments which become due under the
Plan, but the Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.



     Prior to the amendment and restatement of the Plan on September 17, 2007, the Plan provided
solely for the deferral of Cash Incentive Awards. With respect to Cash Incentive Awards relating
to Service Periods occurring in 2006 and 2007 (the “2006-2007 Awards”), Participants were required
to submit Payment Elections pursuant to which they could elect a deferred payment date on or
following the Vesting Date relating to such awards. Following the amendment and restatement of the
Plan, Other Cash Awards were added to the Plan, and all Eligible Awards subsequently deferred into
the Plan are required to be paid out on the applicable Vesting Date. The 2006-2007 Awards will
remain subject to the Payment Election submitted with respect thereto.



ARTICLE II

DEFINITIONS




     Section 2.1 Definitions. Whenever used in this instrument the following terms shall
have the following respective meanings set forth in this Section 2.1:



     “Bank” means IndyMac Bank, F.S.B.



     “Beneficiary” means the person designated, or deemed designated, by the Participant
pursuant to Article VII who will receive payments as provided under the Plan in the event of the
Participant’s death.



     “Board Compensation Policy” means the IndyMac Bancorp, Inc. Board Compensation Policy
& Stock Ownership Requirements, or such other board compensation policy as the Plan Sponsor may
maintain from time to time.



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     “Cash Incentive Award” means a Cash Incentive Award issued under the Incentive Plan
and designated by the Committee for deferral pursuant to this Plan. Cash Incentive Awards are
earned during a Service Period prior to their deferral into this Plan.



     “Code” means the Internal Revenue Code of 1986, as amended.



     “Committee” means the Management Development and Compensation Committee of the Board
of Directors of the Plan Sponsor; provided, however, that the Management Development and
Compensation Committee may delegate some or all of its specified authority and responsibilities
under the Plan to the Employee Benefits Fiduciary Committee of the Plan Sponsor, and following any
such delegation, the term “Committee” when used in the Plan shall include the Employee Benefits
Fiduciary Committee in such capacity. The Committee shall be responsible for administering and
operating the Plan in accordance with Article VI.



     “Company” means IndyMac Bancorp, Inc. and any affiliate which has been designated for
inclusion in the Plan, including the Bank.



     “Deferral Account” means the deferred compensation account maintained for a
Participant pursuant to Article IV, comprised of the Participant’s Interest Earning Sub-Account and
Stock Earning Sub-Account.



     “Deferral Date” means the date on which an Eligible Award is deferred into the Plan.
For a Cash Incentive Award, the Deferral Date will be the date on which the Committee determines
the extent to which a Participant has earned the award for the particular Service Period, which
will occur on or before March 15th of the calendar year following the Service Period. For an Other
Cash Award, the Deferral Date will be the Date of Grant of such award.



     “Effective Date” means December 5, 2006.



     “Election Period” means a specified period determined by the Committee (and
communicated to Eligible Individuals and Participants) during which Payment Elections or Investment
Elections may be made. With respect to the 2006-2007 Awards, Payment Elections and Investment
Elections were required to be made no later than December 31 of the calendar year preceding the
relevant Service Period or as provided in Section 3.4(c), as the case may be.



     “Eligible Individual” means (i) any employee or officer of the Company who has
attained a position in the Company of senior manager, or (ii) any non-employee director of the
Company.



     “Interest Earning Sub-Account” means, with respect to a Participant, a sub-account
that is credited, at the Participant’s election, with a specified portion of the Participant’s
Eligible Award and allocable interest calculated pursuant to Section 4.2.



     “Eligible Award” means a Cash Incentive Award or an Other Cash Award granted to an
Eligible Individual and designated by the Committee for deferral pursuant to this Plan.



     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.



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     “Grant Date” means, with respect to an Eligible Award, the date of grant of such award
pursuant to the Incentive Plan, Board Compensation Policy, or otherwise.



     “Incentive Plan” means the IndyMac Bancorp, Inc. 2002 Incentive Plan, as Amended and
Restated, or such other incentive plan as the Plan Sponsor may maintain from time to time.



     “Investment Election” means an irrevocable election made by a Participant with regard
to the allocation of an Eligible Award into the Interest Earning Sub-Account and/or the Stock
Earning Sub-Account pursuant to Section 3.4.



     “Other Cash Award” means a cash award granted to an Eligible Individual and designated
by the Committee for deferral pursuant to this Plan which is not a Cash Incentive Award. Other
Cash Awards are not earned during a Service Period prior to their deferral into this Plan. Other
Cash Awards may include, but are not limited to, cash awards granted to non-employee directors
pursuant to the Board Compensation Policy, or cash awards granted to newly-hired or newly-promoted
employees outside of the Incentive Plan, which are designated by the Committee for deferral
pursuant to this Plan.



     “Participant” means an Eligible Individual who has been selected for participation in
the Plan and has made an Investment Election pursuant to Section 3.1. With respect to the
2006-2007 Awards, a Participant also was required to a Payment Election in order to be a
Participant.



     “Payment Election” means an irrevocable election made by a Participant with regard to
the deferred payment date of a 2006-2007 Award pursuant to Section 3.4(b)(i).



     “Plan” means the IndyMac Bancorp, Inc. Senior Manager and Non-Employee Director
Deferred Compensation Plan, as set forth herein and as amended from time to time.



     “Plan Sponsor” means IndyMac Bancorp, Inc. and its successors and assigns.



     “Plan Year” means the calendar year.



     “Separation from Service” means a termination from employment or service with the
Company that constitutes a “separation from service” within the meaning of Section 409A of the Code
and applicable guidance thereunder.



     “Service Period” means the period of time during which a Participant earns a Cash
Incentive Award prior to its deferral into this Plan by performing services for the Company.



     “Specified Employee” has the meaning assigned to such term in Code Section
409A(2)(b)(i) and regulations thereunder. The Company’s Specified Employees shall be determined in
accordance with rules adopted by the Board of Directors of the Plan Sponsor or a committee thereof,
which shall be applied consistently with respect to all nonqualified deferred compensation
arrangements of the Company, as to the determination of Specified Employees.



     “Stock” means common stock of the Plan Sponsor.



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     “Stock Earning Sub-Account” means, with respect to a Participant, a sub-account which
is credited, at the Participant’s election, with a specified portion of the Participant’s Eligible
Award that is invested in shares of Stock pursuant to Section 4.3.



     “Trust” means the grantor trust subject to Subtitle A, Chapter 1, Subchapter J,
Subpart E of the Code, established in order to provide cash and shares of Stock for purposes of
paying deferred amounts due from Participants’ Deferral Accounts.



     “Trustee” means the person or entity appointed to act as trustee with respect to the
Trust.



     “Vesting Date” has the meaning assigned to such term in Section 3.3.



     Section 2.2 Rules of Construction.



          (a) Meaning of Terms. Unless the context otherwise requires (i) a term shall have the
meaning assigned to it in Section 2.1; (ii) all references to “Section” and “Article” shall be to
sections and articles of this instrument; (iii) words in the singular shall include the plural, and
vice-versa; and (iv) words in the masculine gender shall include the feminine and neuter, and
vice-versa.



          (b) Compliance with Section 409A. As permitted under guidance issued under Code
Section 409A, the Plan does not contain provisions retroactive to the effective date of Section
409A (January 1, 2005), but the Plan has complied with Section 409A and guidance thereunder since
the date of its adoption, which followed the effective date of such legislation.



ARTICLE III

ELIGIBILITY; AWARDS; ELECTIONS




     Section 3.1 Eligibility. Subject to the terms and conditions of the Plan, the
Committee shall determine and designate, from time to time from among the Eligible Individuals,
those persons who will receive Eligible Awards to be deferred pursuant to this Plan. An Eligible
Individual who is so designated shall become a “Participant” in the Plan upon making an Investment
Election with respect to the Eligible Award. With respect to the 2006-2007 Awards, each
Participant also was required to make a Payment Election. Once an Eligible Individual becomes a
Participant, he or she shall continue to be a Participant until all amounts credited to his or her
Deferral Account have been paid or distributed pursuant to the Plan.



     Section 3.2 Eligible Awards.



          (a) Cash Incentive Awards. A Cash Incentive Award issued under the Incentive Plan is
eligible for deferral into the Plan only to the extent that the Committee specifically designates
it for such deferral at the time of grant. Following the completion of the Service Period relating
to such Cash Incentive Award, the Committee shall calculate the amount of the Cash Incentive Award
earned by the Participant. Such calculation shall be made, and the actual amount of the earned
Cash Incentive Award allocated to the Plan, on the corresponding Deferral Date.



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          (b) Other Cash Awards. An Other Cash Award, which unlike a Cash Incentive Award is
not required to be earned during a Service Period, is immediately deferred into the Plan on the
Grant Date. Accordingly, on the Grant Date (which is also the Deferral Date), the amount of the
Other Cash Award will be allocated to the Plan.



     Section 3.3 Vesting of Awards. With respect to each separate Eligible Award,
following the Deferral Date, a Participant shall become vested in the portion of his or her
Deferral Account relating to such award pursuant to satisfaction of the vesting conditions
established by the Committee at the time of grant of the Eligible Award (the date of such vesting
being referred to herein as the “Vesting Date”). If a Participant is subject to an Employment
Agreement containing provisions which, by their terms, govern the vesting of an Eligible Award,
such terms shall govern the Vesting Date, or an acceleration thereof; provided, however, that the
Employment Agreement shall so supersede such provisions of this Plan only to the extent that the
result would be to the Participant’s benefit.



     Section 3.4 Deferrals.



          (a) Automatic Deferrals. The entire amount of any Eligible Award designated for
deferral pursuant to the Plan shall be automatically deferred, and shall be paid on the Vesting
Date relating to such award. Notwithstanding the foregoing, the 2006-2007 Awards will be paid on
or following the Vesting Date in accordance with the Payment Election of the Participant which is
in effect with respect to each such award.



          (b) Effect of Payment and Investment Elections.




          (i) Payment Elections with Respect to 2006-2007 Awards. During the Election
Period preceding the 2007 Service Period, a Participant was required to make a Payment
Election with respect to the Cash Incentive Award granted to the Participant for such
Service Period. The Payment Election constitutes an irrevocable election by a Participant,
and an express authorization to the Company, to defer the receipt of a vested Cash Incentive
Award otherwise payable to the Participant until the earlier of a specified date or the
Participant’s Separation from Service, or as otherwise provided under Section 5.1.
Participants shall not be permitted to make a Payment Election for Eligible Awards that are
not 2006-2007 Awards, as distributions of amounts related to such subsequent awards will be
made on the applicable Vesting Date, as provided in Section 3.4(a).




          (ii) Investment Elections for Eligible Awards. A Participant shall be required
to make an Investment Election with respect to an Eligible Award during the Election Period
established by the Committee with respect to such award. The Investment Election shall be
irrevocable and shall specify (in increments of twenty-five percent (25%)), the amount of
the Eligible Award to be allocated to the Participant’s Interest Earning Sub-Account and
Stock Earning Sub-Account.



          (c) Initial Elections. Notwithstanding Section 3.4(b), following adoption of the
Plan, each Participant was permitted to make an initial Payment Election and Investment Election
prior to December 31, 2006, which election applies to the 2006-2007 Awards. In addition, an
Eligible Individual who becomes a Participant during a future calendar year may



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make an initial Investment Election during the thirty (30) day period following the date he or
she becomes an Eligible Individual, which election shall apply to any Cash Incentive Award granted
to the Eligible Individual for the calendar year in which he or she is selected for participation,
or any Other Cash Award subsequently granted during such calendar year.



          (d) Default Elections. If a Participant fails to make an Investment Election with
respect to a particular Eligible Award, the most recent Investment Election made by the Participant
shall be deemed to remain in effect for such Eligible Award.



          (e) Special Payment Elections for 2006-2007 Awards. In connection with the
amendment and restatement of this Plan, Participants who received 2006-2007 Awards shall be given
the opportunity to change their Payment Election before December 31, 2007. Pursuant to such new
Payment Election, distributions of amounts related to the Participant’s 2006-2007 Awards will be
made on the Vesting Date applicable to such awards, provided that such awards do not vest prior to
December 31, 2007. In the event that a Participant makes a new Payment Election with respect to a
2006-2007 Award and such award becomes vested prior to December 31, 2007, distributions with
respect to such award shall be made as soon as practicable during 2008, subject to Section 5.1(d).



ARTICLE IV

ESTABLISHMENT AND MAINTENANCE OF ACCOUNTS




     Section 4.1 Maintenance of Accounts. The Committee shall cause a separate Deferral
Account to be established and maintained under the Trust for each Participant and, within each such
Deferral Account, a separate Interest Earning Sub-Account and Stock Earning Account. References
herein to a Participant’s “Deferral Account” shall refer to the Participant’s Interest Earning
Sub-Account and Stock Earning Sub-Account in the aggregate. A Participant’s Interest Earning
Sub-Account and Stock Earning Sub-Account shall be charged, as applicable, with any distributions
from the respective sub-accounts on the date such distributions are made.



     Section 4.2 Interest Earning Sub-Account. A Participant’s Interest Earning
Sub-Account shall be credited with the portion of the Participant’s Eligible Award which he or she
elects to have allocated to such sub-account pursuant to his or her Investment Election. Such
interest shall be credited commencing on the date the sub-account is established and ending on the
date of payment of the full account balance of such sub-account. Interest on a particular Eligible
Award shall be credited commencing with the corresponding Deferral Date or Grant Date, as
applicable. Such interest shall be credited at a rate that is set annually by the Committee and
communicated in writing to Participants prior to the beginning of the calendar year for which the
rate will be in effect, and such interest shall be compounded daily. Interest shall be credited on
the balance in an Interest Earning Sub-Account until all amounts credited to such sub-account have
been paid.



     Section 4.3 Stock Earning Sub-Account. The Trustee shall, as soon as practicable
following the Deferral Date or Grant Date, as applicable, apply the aggregate amount of cash that
is allocated to Participants’ Stock Earning Sub-Accounts for Eligible Awards deferred on such
Deferral Date or Grant Date, as applicable, toward the purchase of a block of shares of Stock. The
amount of shares so purchased with respect to any Deferral Date or Grant Date, as



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applicable, shall be allocated to a Participant (and credited to the Participant’s Stock
Earning Sub-Account) in the proportion determined by comparing the amount of the Eligible Award
that the Participant elected to allocate to his or her Stock Earning Sub-Account for such Deferral
Date or Grant Date, as applicable, to the aggregate amount of Eligible Awards which all
Participants elected to allocate to their Stock Earning Sub-Accounts for such Deferral Date or
Grant Date, as applicable. For example, if a Participant elects to defer $1,000 of his or her
Eligible Award into his or her Stock Earning Sub-Account and all other Participants elect to defer
an aggregate of $9,000 into their Stock Earning Sub-Accounts, the Trustee shall purchase shares of
Stock having an aggregate value of $10,000, and the Participant’s Stock Earning Sub-Account shall
be allocated one-tenth (1/10) of such shares. Dividends paid with respect to Stock credited to a
Participant’s Stock Earning Sub-Account shall be converted to shares of Stock as soon as
practicable following the payment of the dividend. Other adjustments or changes to the Stock in
general, including changes as a result of mergers or other corporate transactions, shall be applied
to the Stock credited to a Participant’s Stock Earning Sub-Account. No interest will be credited
with respect to any balance in a Participant’s Stock Earning Sub-Account.



     Section 4.4 Eligible Awards which Do Not Vest. Notwithstanding any other provision of
the Plan to the contrary, in the event all or a portion of a Participant’s Eligible Award, or the
portion of his or her Deferral Account relating to an Eligible Award, does not vest or otherwise
lapses pursuant to its terms, the Participant shall forfeit all cash and interest credited or to be
credited to his or her Deferral Account and sub-accounts, and all Stock credited or to be credited
to his or her Deferral Account and sub-accounts, with respect to such unvested or lapsed portion or
award.



     Section 4.5 Account Valuation; Participant Statements. For each Service Period, the
Committee shall provide a written statement to each Participant setting forth (i) the amount
credited to his or her Interest Earning Sub-Account and the number of shares of Stock credited to
his or her Stock Earning Sub-Account (including dividends invested in Stock pursuant to Section
4.3), if any, for the Service Period, (ii) the rate at which interest was credited to his or her
Interest Earning Sub-Account and the aggregate amount of interest credited to such sub-account
since the last such statement, and (iii) his or her total Deferral Account balance (in cash and
Stock) as of a date specified in such statement.



ARTICLE V

DISTRIBUTION OF ACCOUNTS




     Section 5.1 Deferral Period and Method of Payment.



          (a) Deferred Payment Date and Payment Method.




               (i) 2006-2007 Awards. The deferred payment date elected by a Participant in a
Payment Election for 2006-2007 Awards shall be a specified date that is objectively
determinable at the time the election is made. Such deferred payment date shall be no
earlier than the Vesting Date of the Cash Incentive Award for the designated Service Period.
A Participant shall be permitted to elect a deferred payment date for his or her vested Cash
Incentive Awards which is a specified payment date or the date the Participant has a
Separation from Service.



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               (ii) Eligible Awards Other than 2006-2007 Awards. The deferred payment date
for Eligible Awards granted after December 31, 2007 shall be the Vesting Date of the
Eligible Award.



          (b) Payment Upon Death or Separation From Service. Notwithstanding Section 5.1(a)(i),
if a Participant dies or otherwise incurs a Separation From Service before beginning distributions
or after beginning distributions but before receiving distribution of his or her entire Deferral
Account, the remaining vested balance of his or her Deferral Account shall be distributed in a
single lump sum payment to his or her Beneficiary(ies) as soon as practicable but no later than the
90th day following the Participant’s death.



          (c) Payment Upon Separation From Service. Notwithstanding Section 5.1(a)(i), if a
Participant incurs a Separation From Service (other than on account of his or her death) before
beginning distributions or after beginning distributions but before receiving distribution of his
or her entire Deferral Account, the remaining vested balance of his or her Deferral Account shall
be distributed in a single lump sum payment on the date which is six (6) months after the date
which occurs six (6) months after the date such Separation from Service occurs.



          (d) Special Rule for Specified Employees. Notwithstanding any provision of the Plan
to the contrary, if a Participant who is a Specified Employee at the time he or she experiences a
Separation from Service and a payment is required to be made under Section 5.1(a)(i) or 5(c) upon
such Separation from Service, the payment otherwise due hereunder shall be delayed until the
corresponding date which occurs six (6) months after the date such Separation from Service occurs.



ARTICLE VI

ADMINISTRATION




     Section 6.1 Authority and Duties of Administrator. The Committee shall be responsible
for administering the Plan and shall have sole and absolute discretion to (i) determine the
eligibility of employees and non-employee directors to participate in the Plan, (ii) interpret,
construe and make determinations under the Plan, (iii) establish such rules as may be necessary or
appropriate for the administration of the Plan, (iv) maintain or cause the Trustee to maintain
Accounts, books and records with respect to the Plan, (v) calculate the amount of Eligible Awards
deferred and interest or Stock credited under the Plan, and (vi) take such other action in the
administration of the Plan as the Committee deems necessary or appropriate in furtherance hereof.
The Committee shall, in good faith, interpret the Plan in such a way as to meet the requirements of
Code Section 409A and any regulations and guidance issued thereunder. Any such interpretation,
construction or determination made or action taken by the Committee with respect to the Plan shall
be conclusive and binding on all persons interested therein.



     Section 6.2 Manner of Taking Action. All actions permitted or required to be taken
hereunder by a person who is an Eligible Individual under Section 3.1 or a Participant shall be
effective only if such action is taken at the time and in the manner prescribed by the Committee
and in accordance with the terms of the Plan. All actions permitted or required to be taken
hereunder by the Committee may be taken by a majority of its members at a meeting in person or



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by telephone, or by unanimous written consent of such members. The Committee may delegate to
any one or more of its members authority to individually take any action the Committee is
authorized to take hereunder.



     Section 6.3 Plan Expenses. All expenses of administering the Plan shall be borne by
the Plan Sponsor.



     Section 6.4 Indemnification of Committee. The Plan Sponsor shall indemnify and save
harmless any person serving as a member of the Committee from claims for liability, loss or damage
(including payment of expenses in connection with defense against any such claim) which result from
such person’s good faith exercise or failure to exercise any responsibilities with respect to the
Plan.



     Section 6.5 Claims Procedure.



          (a) Benefit Claims. A Participant (or his or her Beneficiary in the event of the
Participant’s death) may file a claim with respect to amounts asserted to be due hereunder by
filing a written claim with the Committee specifying the nature of such claim in detail. The
Committee shall notify the claimant within sixty (60) days as to whether the claim is allowed or
denied, unless the claimant receives written notice from the Committee prior to the end of the
sixty (60) day period stating that special circumstances require an extension of time for a
decision on the claim, in which case the period shall be extended by an additional sixty (60) days.
Notice of the Committee’s decision shall be in writing, sent by mail to the Participant’s or
Beneficiary’s last known address and, if the claim is denied, such notice shall (i) state the
specific reasons for denial, (ii) refer to the specific provisions of the Plan upon which such
denial is based, and (iii) describe any additional information or material necessary to perfect the
claim, an explanation of why such information or material is necessary, and an explanation of the
review procedure in Section 6.5(b), including a statement of the claimant’s right to bring a civil
action under Section 502(a) of ERISA following an adverse determination on review.



          (b) Review Procedure. A claimant is entitled to request a review of any denial of his
or her claim under Section 6.5(a). The request for review must be submitted to the Committee in
writing within sixty (60) days of mailing by the Committee of notice of the denial. Absent a
request for review within the sixty (60) day period, the claim shall be extinguished in its
entirety. The claimant or his or her representative shall be entitled to submit issues and
comments orally and in writing, as well as other written documents, to the Committee. The claimant
shall also be entitled to receive from the Committee, upon request and free of charge, reasonable
access to and copies of all documents, records and other information relating to his or her claim.
The review shall be conducted by the Committee, which shall afford the claimant a hearing and which
shall render a decision in writing within sixty (60) days of a request for a review, provided that,
if the Committee determines prior to the end of such sixty (60) day review period that special
circumstances require an extension of time for the review and decision of the denial, the period
for review and decision on the denial shall be extended by an additional sixty (60) days. The
review shall take account of all comments, documents, records and other information submitted by
the claimant relating to the claim, without regard to whether such information was submitted or
considered in the initial benefit determination under Section 6.5(a). The claimant shall receive
written notice of the Committee’s review decision, together with specific reasons for the decision
and reference to the



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pertinent provisions of the Plan. The claimant shall also be notified that, upon request and
free of charge, the claimant can have reasonable access to and copies of all documents, records and
other information relevant to his or her claim.



     Section 6.6 Performance-Based Awards.



          In the event that the Committee has designated a Cash Incentive Award to be
“performance-based” compensation for purposes of Code Section 162(m), such award will be
conditioned on the achievement of one or more performance measures included in the Incentive Plan.
The grant of such award and the establishment of the relevant performance goals shall be made
during the period required under Code Section 162(m). The Committee shall certify in writing prior
to the vesting of such award that the performance goals applicable to such award, as well as any
other material terms applicable to such award, were satisfied.



ARTICLE VII

BENEFICIARY DESIGNATION




     A Participant may, in the manner prescribed by the Committee, designate one or more
Beneficiaries to receive the balance credited to the Participant’s Account, if any, in the event of
the Participant’s death prior to full payment thereof. Such beneficiary designation may be changed
by the Participant at any time without the consent of any prior Beneficiary by making a new
designation in the same manner; provided, however, that no such designation shall be effective
unless received by the Committee or its agent for such purpose prior to the Participant’s death.
If a Participant fails to designate a Beneficiary hereunder, or if no Beneficiary survives the
Participant, the Participant’s estate shall be deemed to be the Beneficiary.



ARTICLE VIII

AMENDMENT OR TERMINATION




     The Committee may amend or terminate the Plan at any time, in whole or in part, and for any
reason, provided, however, that no amendment or termination shall reduce a
Participant’s accumulated Deferral Account nor shall any amendment detrimentally change the terms
and conditions of the Plan with respect to any deferrals made prior to such amendment unless the
Committee determines that such amendment is required by law to preserve the tax deferral of such
Deferral Account or otherwise to comply with Section 409A of the Code.



ARTICLE IX

GRANTOR TRUST CONTRIBUTIONS




     The Company shall make payments to the Trust in the form of cash. Any payment distribution
made to a Participant or Beneficiary from the Trust shall relieve the Company and the Plan Sponsor
from any further obligations under the Plan only to the extent of such payment or distribution.
Notwithstanding any other provisions of the Plan, the assets of the Trust shall remain the property
of the Plan Sponsor, and shall be subject to the claims of creditors in the event of bankruptcy or
insolvency, as provided in the Trust agreement.



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ARTICLE X

MISCELLANEOUS




     Section 10.1 Liability of the Plan Sponsor and Company; Nature of Obligation. Nothing
herein shall be deemed to constitute the creation of a trust or other fiduciary relationship
between the Company and any of its employees and non-employee directors, between the Company and
any other person, or between the Plan Sponsor and the Company’s employees and non-employee
directors or any other person. The Plan Sponsor and the Company shall not be considered a trustee
by reason of this Plan. Participants, Beneficiaries and any other person who may have rights
hereunder shall be mere unsecured general creditors of the Company and the Plan Sponsor with
respect to a Participant’s Deferral Account and any Eligible Award deferred or interest or shares
of Stock credited hereunder, and all amounts credited to a Deferral Account shall be payable from
the general assets of the Plan Sponsor or the Company, as the case may be.



     Section 10.2 Right of Set-Off. Notwithstanding any provision of the Plan to the
contrary, the Plan Sponsor and the Company, as the case may be, shall have the right to reduce and
offset any payment to which a Participant or Beneficiary is entitled to receive hereunder by the
amount of any debt or other amount owed to the Plan Sponsor or Company, respectively, by the
Participant at the time of such payment.



     Section 10.3 No Guarantee of Employment or Continued Service. Nothing contained
herein shall require the Company or any of its affiliates to continue any person in its employ or
service, and the Company and its affiliates shall have the right to terminate the employment or
service of any person at any time notwithstanding the terms of the Plan.



     Section 10.4 Benefits Not Assignable. The Deferral Account of a Participant and any
right or interest in any Eligible Award granted or deferred hereunder, and any interest or shares
of Stock credited hereunder, shall not be subject to alienation, transfer, assignment, garnishment,
execution or levy of any kind or nature, or claim for alimony or support pursuant to a divorce
decree or other court order, and any attempt to accomplish the foregoing shall be null and void.



     Section 10.5 Severability. If any particular provision of the Plan shall be found by
final judgment of a court or administrative tribunal of competent jurisdiction to be illegal,
invalid or unenforceable, such illegal, invalid or unenforceable provision shall not affect any
other provision of the Plan and the other provisions of the Plan shall remain in full force and
effect.



     Section 10.6 Tax Withholding. Any cash amounts and shares of Stock payable hereunder
shall be subject to all applicable federal, state and local tax withholding, as applicable.



     Section 10.7 Headings. The headings of the several Articles and Sections of this Plan
have been inserted for convenience of reference only and shall in no way restrict or modify any of
the terms of the provisions hereof.



     Section 10.8 Governing Law. To the extent not subject to ERISA, the Plan shall be
governed by and construed and enforced in accordance with the laws of the State of California,
without regard to conflicts of laws principles thereof.




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