EX-10.7 TIME WARNER INC DEFERRED COMPENSATION PLAN



 





Exhibit 10.7




TIME WARNER INC.

DEFERRED COMPENSATION PLAN

(Amended and Restated as of January 1, 2005)




ARTICLE I




ESTABLISHMENT OF THE PLAN




     1.1   Establishment of Plan. Time Warner Inc. established this plan effective as of November
18, 1998, to be known as the Time Warner Inc. Deferred Compensation Plan. Effective January 11,
2001 AOL Time Warner Inc. (the “Company”) became the plan sponsor and the plan was renamed the AOL
Time Warner Inc. Deferred Compensation Plan (the “Plan”). The Plan was initially amended and
restated effective as of August 1, 2001. Effective October 16, 2003, AOL Time Warner Inc. was
renamed Time Warner Inc. and effective January 1, 2004 the name of the Plan was amended to be the
Time Warner Inc. Deferred Compensation Plan. The Plan has been further amended and restated
effective as of January 1, 2005.



     1.2   Purpose of Plan. The Plan is intended to be an unfunded, non-qualified deferred
compensation plan maintained to provide deferred compensation for a select group of management or
highly compensated employees under Section 201(2) of the Employee Retirement Income Security Act of
1974, by providing Eligible Employees a means of irrevocably deferring to a future Year the receipt
of certain compensation from Employing Companies in excess of the Compensation Limit.



     1.3   Applicability of Plan. The provisions of the Plan as currently amended and restated are
applicable only to amounts deferred under the Plan on or after January 1, 2005. All amounts
deferred under the Plan on or prior to December 31, 2004 shall remain subject to the terms of the
Plan as in effect on October 3, 2004.



ARTICLE II




DEFINITIONS




     2.1   Definitions. Whenever used in the Plan, the following terms shall have the respective
meanings set forth below unless otherwise expressly provided, and when the defined meaning is
intended, the term is capitalized.



     2.2   Administrative Committee: The Administrative Committee as provided for herein.



     2.3   Affiliate: An Employing Company and any entity affiliated with the Employing Company
within the meaning of Code Section 414(b), with respect to controlled groups of corporations,
Section 414(c) with respect to trades or businesses under common control with the Employing
Company, and Section 414(m) with respect to affiliated service groups, and any other



 









 




entity required to be aggregated with an Employing Company pursuant to regulations under
Section 414(o) of the Code.




     2.4   Assistant Benefits Officer: The Assistant Benefits Officer provided for herein.



     2.5   Beneficiary: The person or persons designated from time to time by a Participant or
Inactive Participant, by notice to the Benefits Officer, to receive any benefits payable under the
Plan after his or her death, which designation has not been revoked by notice to the Benefits
Officer at the date of the Participant’s or Inactive Participant’s death. Such notice shall be in a
form as required by the Benefits Officer or acceptable to such officer which is properly completed
and delivered to the Benefits Officer or such officer’s designee. Notice to the Benefits Officer
shall be deemed to have been given when it is actually received by or on behalf of such officer.



     2.6   Benefits Officer: The Benefits Officer as provided for herein.



     2.7   Board: The Board of Directors of the Company or a committee thereof authorized to act
in the name of the Board.



     2.8   Code: The Internal Revenue Code of 1986, as amended.



     2.9   Company: Time Warner Inc. or any successor thereto.



     2.10   Compensation Limit: The compensation limit of Section 401(a)(17) of the Code, as
adjusted under Section 401(a)(17)(B) of the Code for increases in the cost of living.



     2.11   Deferred Compensation Account: The separate account established under Article V of the
Plan for each Participant and Inactive Participant representing amounts deferred by a Participant
pursuant to Article III.



     2.12   Disability: Permanent and total disability as determined by the Social Security
Administration or any disability for which a Participant is receiving monthly benefits under the
provisions of the Time Warner Long Term Disability Plan or, in the case of an employee covered by a
long term disability plan of an Affiliate, under the provisions of such plan, whichever shall occur
first, to the extent that such definition also constitutes such Participant being considered
“disabled” under Section 409A(a)(2)(C) of the Code.



     2.13   Eligible Employee: An individual who meets the eligibility requirements of Section
3.1.



     2.14   Employee: An individual employed by an Employing Company.



     2.15   Employing Company: The Company and each Affiliate which has been authorized by the
Benefits Officer to participate in the Plan and has adopted the Plan.



     2.16   ERISA: The Employee Retirement Income Security Act of 1974, as amended.



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     2.17   Inactive Participant: A Participant who has had a Separation From Service with the
Company and any Affiliate and whose Deferred Compensation Account has not been fully distributed.



     2.18   Investment Committee: The Investment Committee as provided for herein.



     2.19   Investment Direction: A Participant’s or Inactive Participant’s direction to the
recordkeeper of the Plan, in the form and manner prescribed by the Benefits Officer, in accordance
with directions made by telephone, through the intranet of the applicable Employing Company or
through the Internet, directing which Investment Funds will be credited with his or her deferrals
and transfers of all or part of the deferred amounts and any earnings thereon from other Investment
Funds and certain employment agreements, as provided for herein.



     2.20   Investment Funds: The hypothetical investment funds, as determined from time to time
by the Board or the Investment Committee.



     2.21   Participant: Each Employee who participates in the Plan in accordance with the terms
and conditions of the Plan.



     2.22   Plan: This Plan, the Time Warner Inc. Deferred Compensation Plan, as set forth herein
and as it may be amended from time to time.



     2.23   Separation From Service: The term used to indicate a termination of employment with an
Employing Company that also constitutes a “separation from service” under Section 409A(a)(2)(A)(i)
of the Code; provided, however, that for purposes for determining the controlled group of entities
comprising the Participant’s employer under Treas. Reg. 1.409A-1(h)(3), the determination shall be
made pursuant to the test for controlled groups under Section 414(b) and (c) of the Code, using a
common control ownership threshold of “at least 80%” ownership, rather than “at least 50%”
ownership.



     2.24   Valuation Date: With respect to the Investment Funds, each business day when the New
York Stock Exchange is open.



     2.25   Year: A calendar year.



ARTICLE III




PARTICIPANT DEFERRALS




     3.1   Eligibility. The Employees who shall be eligible to make deferral elections under the
Plan are those salaried officers and other key employees of an Employing Company who at the time of
a deferral election pursuant to Section 3.3 below:




	 	(i)	 	are on a regular periodic U.S. payroll of the Employing
Company; and
	 
	 	(ii)	 	have a current base salary plus bonus in excess of, or
projected to be in excess of, the Compensation Limit or are otherwise
designated as eligible by the Benefits Officer. For purposes of this subsection
3.1(ii), “bonus”




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	 	 	 	means any annual bonus (paid or deferred) pursuant to a regular program (but
excluding long-term cash incentive plan payments other than those specified
in Section 3.5 and commission, spot and similar bonuses) for the Year
preceding the current Year, except that, in the case of a deferral election
to be made by a newly hired Employee (which election shall be made available
at the sole discretion of the Employing Company), with respect to a bonus to
be earned in (A) the current Year, “bonus” means the target or otherwise
estimated bonus for that portion of the current Year after the date of his
or her hire, and (B) the Year following hire, “bonus” means the target or
otherwise estimated bonus for the current Year.





     The Benefits Officer may, from time to time, modify the above eligibility requirements and
make such additional or other requirements for eligibility as such officer may determine.



     3.2   Compensation Eligible for Deferral. (a)  An Eligible Employee may elect to defer
receipt of all or a specified portion of any bonus, but only to the extent the receipt thereof
would cause the Eligible Employee’s compensation to exceed the Compensation Limit. Each such
deferral may be expressed as a percentage, in 10% increments only, but in no event shall any
election result in a deferral of less than $5,000. The Eligible Employee may elect to have the
designated percentage apply only to that portion of the bonus in excess of a certain dollar amount
that he or she specifies when making the election. For purposes of this Section 3.2, “bonus” means
any annual bonus earned by such Eligible Employee in respect of services performed in a Year
payable pursuant to a regular program and signing bonuses (but excluding long-term cash incentive
plan payments other than those specified in Section 3.5 and commission, spot and similar bonuses)
and which would otherwise be payable in cash to an Eligible Employee for services as an Employee.
In lieu of designating a percentage, the Eligible Employee may elect to have a specific dollar
amount of the bonus deferred or may make such other deferral election as may be approved from time
to time by the Benefits Officer.



          (b)   An Eligible Employee whose compensation is payable under an employment agreement with an
Employing Company which provides for deferred compensation may elect to defer such deferred
compensation under the Plan, subject to the terms of such agreement. Any such deferral so elected
shall be made in the same manner as provided for in subsection (a). Notwithstanding the foregoing,
any compensation previously deferred under an employment agreement shall be subject to deferral
under the Plan only as provided for in Section 3.6. An Eligible Employee’s employment agreement
with the Company or another Employing Company may also provide for a mandatory deferral of certain
compensation under the Plan.




          (c)   An Employing Company may designate a special bonus to be paid to an Eligible Employee
under an agreement with such employee as eligible for deferral, subject to the terms of such
agreement. Any such deferral so elected shall be made in the same manner as provided for in
subsection (a).




          (d)   Whenever any compensation eligible for deferral under the Plan is also eligible for
deferral, in whole or part, under any other deferred compensation plan (such as an excess 401(k)
plan), the amount of such compensation eligible for deferral under the Plan shall be net of any
amount elected for deferral under the other plan.




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     3.3   Deferral Elections. (a)  An Eligible Employee with the consent of the Benefits Officer
may annually make an irrevocable election to defer under the Plan certain compensation described in
Section 3.2 and participate herein by timely delivering a properly executed election to the
Benefits Officer or such officer’s designee on a form prescribed by the Benefits Officer. The
election form shall specify with respect to the compensation to be deferred under the Plan for the
Year, pursuant to the provisions of Section 3.2 and Article V:




	 	(i)	 	the percentage of the bonus or compensation specified in
Section 3.2 (b) to be deferred or the specific dollar amount to be deferred
(provided, however, that if such specific dollar amount exceeds the amount
eligible for deferral, no deferral shall be made); and
	 
	 	(ii)	 	the time for the commencement of payment of the deferred
compensation, which must be either on account of a Separation From Service or
at an in-service Year to be specified by the Eligible Employee. Compensation
which is to be deferred to an in-service payment date must be deferred for no
fewer than three Years following the Year in which it was earned.
	 
	 	(b)	 	A deferral election shall apply only with respect to the Year for which it is made and
shall not continue in effect for any subsequent Year.






     3.4   Effective Date of Election. (a)  An election to defer compensation under the Plan must
be received by or on behalf of the Benefits Officer on or prior to December 31 of the Year
preceding that in which the services related to the compensation will be performed, at which time
it shall become irrevocable (subject to any re-deferral elections made pursuant to Section 5.3);
provided, however, that in the case of any compensation that constitutes “performance-based
compensation” within the meaning of Treas. Reg. § 1.409A-1(e), the Benefits Officer may permit a
Participant to make a deferral election with respect to such compensation until the date that is
six months prior to the end of the applicable performance period, to the extent permitted under
Treas. Reg. § 1.409A-2(a)(8).



          (b)   Notwithstanding the deferral election deadlines specified in subsection (a) above, the
Benefits Officer may prescribe an earlier or later date by which time an Eligible Employee must
elect to defer such compensation to the extent permitted under Section 409A of the Code and any
regulations or other guidance promulgated thereunder from time to time.




          (c)   Under no circumstances may an Eligible Employee at any time defer compensation to which
he or she has attained a legally enforceable right to receive currently.




     3.5   Certain Incentive Plans. Notwithstanding anything to the contrary herein, the term
“bonus” wherever used in this Article III shall include any amounts payable to Eligible Employees
under a long-term incentive plan (“LTIP”) of the Company or an Affiliate, which provides under the
terms of the LTIP for an election to defer payments thereunder into the Plan. Any such elections
pursuant to this Section shall be made in accordance with Section 3.4.



     3.6   Transfers. Each Eligible Employee, whose compensation is payable under an employment
agreement with an Employing Company which provides for deferred compensation,



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may elect to have transferred to and deferred under his or her Deferred Compensation Account
in the Plan the balance, in whole or in part, of the compensation previously deferred under such
agreement, subject to the terms thereof. Such an election can be made at any time, but only once
in the Eligible Employee’s lifetime. Notwithstanding the foregoing, an Eligible Employee who has
made an election to defer compensation under an employment agreement may, prior to the date that
such compensation would be payable but for such election, make a subsequent election directing that
the deferral be made under the Plan instead of under the employment agreement.



ARTICLE IV




DEFERRED COMPENSATION ACCOUNT




     4.1   Deferred Compensation Account. (a)  A Deferred Compensation Account shall be
established for each Participant who makes a deferral election pursuant to Article III. A
Participant’s or Inactive Participant’s Deferred Compensation Account shall consist of the
compensation deferred by a Participant in any Year under the Plan, increased or decreased by any
gains or losses thereon.



          (b)   The Company shall maintain the Deferred Compensation Accounts of all Participants and
Inactive Participants.




          (c)   All payments made under the Plan shall be made directly by the Company from its general
assets subject to the claims of any creditors and no deferred compensation under the Plan shall be
segregated or earmarked or held in trust. The Plan is an unfunded and unsecured contractual
obligation of the Company. Participants, Inactive Participants and Beneficiaries shall be unsecured
creditors of the Company with respect to all obligations owed to them under the Plan. Participants,
Inactive Participants and Beneficiaries shall not have any interest in any fund or specific asset
of the Company by reason of any amount credited to a Deferred Compensation Account, nor shall any
such person have any right to receive any distribution under the Plan except as explicitly stated
herein. The Company shall not designate any funds or assets to specifically provide for the
distribution of the value of a Deferred Compensation Account or issue any notes or security for the
payment thereof. Any asset or reserve that the Company may purchase or establish shall not serve as
security to Participants, Inactive Participants and Beneficiaries for the performance of the
Company under the Plan.




     4.2   Hypothetical Investment. (a)  For crediting rate purposes, amounts credited to a
Participant’s or Inactive Participant’s Deferred Compensation Account shall be deemed to be
invested according to his or her Investment Direction in one or more of all of the similarly named
funds (both core funds and mutual funds in the mutual funds option) offered under the Time Warner
Defined Contribution Plans Master Trust. For any period, the deemed return on each of these
Investment Funds shall be the same as the return for such period on each similarly named fund
offered under such master trust.



          (b)   Notwithstanding anything to the contrary herein, the Company, by action of the
Investment Committee or the Board, may add to, decrease or change the Investment Funds offered
under the Plan, at any time and for any reason. Participants, Inactive Participants and
Beneficiaries shall not have the right to continue any particular deferral option.




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          (c)   The Company shall be under no obligation to invest amounts corresponding to any deferral
options chosen by Participants or Inactive Participants. Any such allocation to any Deferred
Compensation Account shall be made solely for the purpose of determining the value of such account
under the Plan.




     4.3   Investment Direction. Deferrals shall be credited to the Investment Funds in accordance
with a Participant’s or Inactive Participant’s Investment Direction. A Participant or Inactive
Participant shall direct that his or her deferrals be applied, in multiples of one percent, to
deemed investments in any or all of the Investment Funds.



     4.4   Changes in Investment Direction. A Participant or Inactive Participant may make one
Investment Direction in each calendar quarter, with respect to each of new deferrals and previous
deferrals and any earnings thereon; provided, however, that one additional Investment Direction may
be made in each calendar quarter in which any Investment Fund is made available, or ceases to be
available, as provided for in Section 2.20, with respect to each of new deferrals and previous
deferrals and any earnings thereon.



     4.5   Manner of Hypothetical Investment. (a)  For purposes of the hypothetical investment
under Section 4.2, deferred compensation shall be considered to be invested on the date the
recordkeeper of the Plan records the deferral amount.



          (b)   As of each Valuation Date, the recordkeeper of the Plan shall determine the value of
each Participant’s, Inactive Participant’s or Beneficiary’s Deferred Compensation Account.




          (c)   For purposes of distribution pursuant to Article V, the balance of each Deferred
Compensation Account shall be valued as of the Valuation Date immediately preceding the date that
the Committee commences the processing of the distribution of the balance of such account, or the
particular installment thereof.




     4.6   Participant Assumes Risk of Loss. Each Participant, Inactive Participant and
Beneficiary assumes the risk in connection with any decrease in value of his or her Deferred
Compensation Account deemed invested in the Investment Funds.



     4.7   Statement of Account. A statement of account shall be made available through the
recordkeeper’s website and may be viewed and printed by a Participant or Inactive Participant at
any time. Upon request, as soon as reasonably practicable after the end of each calendar quarter,
a statement of account shall be sent to each Participant and Inactive Participant with respect to
the value of his or her Deferred Compensation Account as of the end of such quarter.



ARTICLE V




PAYMENT OF DEFERRED COMPENSATION ACCOUNT




     5.1   Payment on Account of Separation From Service for Reasons other than Death or
Disability. (a)  In the event of the Participant’s Separation From Service for reasons other than
death or Disability, the Participant’s Deferred Compensation Account shall be distributed to



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him or her in ten annual installment payments, unless otherwise elected pursuant to the
Participant’s deferral election(s) made hereunder.




          (b)   Notwithstanding any other provision of this Section 5.1, if the value of the
Participant’s Deferred Compensation Account together with amounts deferred under any other
nonqualified deferred compensation plan that is aggregated with the Plan under Treas. Reg. §
1.409A-1(c)(2) are less than or equal to the applicable dollar amount under Section 402(g)(1)(B) of
the Code (determined as of December 31 of the Year in which he or she has the Separation From
Service), payment shall be made in a lump sum.




          (c)   The first installment, or lump sum, as the case may be, shall be distributed as soon as
practicable on or after April 1 (and in any event, no later than December 31) of the Year following
the Year in which the Participant has a Separation From Service. Subsequent annual installment
payments shall be distributed as soon as practicable on or after each following April 1 (and in any
event, no later than each following December 31).




     5.2   Payment on Account of Disability. (a)  In the event a Participant meets the definition
of Disability, the value of the Participant’s Deferred Compensation Account shall be distributed to
him or her in five annual installment payments.



          (b)   Notwithstanding subsection (a) above, if the value of the Participant’s Deferred
Compensation Account together with amounts deferred under any other nonqualified deferred
compensation plan that is aggregated with the Plan under Treas. Reg. § 1.409A-1(c)(2) are less than
the applicable dollar amount under Section 402(g)(1)(B) of the Code as of the Valuation Date
immediately prior to the date the definition of Disability is met, payment shall be made in a lump
sum.




          (c)   The first installment, or lump sum, as the case may be, shall be distributed as soon as
practicable on or after April 1 (and in any event, no later than December 31) of the Year following
the Year during which the Participant has met the definition of Disability. Subsequent annual
installment payments shall be distributed as soon as practicable on or after each following April 1
(and in any event, no later than each following December 31).




          (d)   The payment schedule described under Section 5.2(c) shall not be affected by any
subsequent changes to the Participant’s Disability status following the initial occurrence of the
Participant’s Disability.




     5.3   In-Service Payments; Re-deferral Elections. (a)  An in-service payment elected by a
Participant pursuant to Section 3.3(ii) shall be distributed in a lump sum as soon as practicable
on or after April 1 (and in any event, no later than December 31) in the Year specified by the
Participant.



          (b)   Notwithstanding subsection (a) above, a Participant may request, by delivering written
notice to the Benefits Officer on a form prescribed by such officer prior to the date that is 12
months preceding the date on which the in-service payment is to be made, that the Benefits Officer,
in such officer’s sole and absolute discretion, defer such payment until such later Year as the
Participant requests. Any such additional deferral (i) must be for at least 5 full Years beyond the
date the in-service payment was previously scheduled to be made, (ii) must be




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for the current value of the whole amount originally deferred, (iii) can only be made five
times with respect to any in-service payment, (iv) may not take effect until at least twelve (12)
months after the date on which such additional deferral election is made, and (v) shall be
distributed in a lump sum as soon as practicable on or after April 1 (and in any event, no later
than December 31) in the Year specified by the Participant.




          (c)   Notwithstanding the forgoing, the Benefits Officer may, in such officer’s sole and
absolute discretion, permit Participants to change their deferral elections under the Plan without
meeting the conditions set forth above provided that such deferral election changes comply with
Section 409A of the Code or the transitional relief rules promulgated by the Treasury Department
thereunder. In the event of a Participant’s Separation From Service for any reason prior to the
time any in-service payment under this Section 5.3 would have been made, distribution of such
payment shall be made according to the manner of payment specified in Section 5.1, 5.2, or 5.4,
based on the Participant’s actual reason for Separation From Service.




     5.4   Payment to Beneficiary or Estate in the Event of Death. Notwithstanding the provisions
for payment described in Sections 5.1 through 5.3 above, in the event of the death of a Participant
or Inactive Participant before the distribution of his or her Deferred Compensation Account has
commenced, or before such account has been fully distributed, the value of such account shall be
determined as of the Valuation Date coincident with or immediately prior to the date that the
Benefits Officer commences the processing of the distribution, after both a written notice of his
or her death and a death certificate have been received by the Benefits Officer. Such account shall
be distributed in a lump sum as soon as practicable to the Participant’s or Inactive Participant’s
Beneficiary (or, if no person has been designated or if no person so designated survives the
Participant or Inactive Participant, to such Participant’s or Inactive Participant’s estate or if
such Beneficiary survives the Participant or Inactive Participant, but dies prior to payment, to
such Beneficiary’s estate) prior to the end of the Year of the Participant’s or Inactive
Participant’s death (or within 90 days after the date of death, if later). In case any Participant
or Inactive Participant and his or her Beneficiary die in or as a result of a common accident or
disaster and under such circumstances as to make it impossible to determine which of them was the
last to die, the Participant or Inactive Participant shall be deemed to have survived his or her
Beneficiary. Distributions hereunder shall be subject to such administrative and procedural
requirements and forms as the Benefits Officer in such officer’s discretion may require.



     5.5   Severe Unforeseeable Financial Emergency Payments. Notwithstanding any other provisions
of the Plan, a Participant or Inactive Participant may make an application to the Benefits Officer
that he or she has a severe unforeseeable financial emergency; to the extent that such severe
unforeseeable financial emergency also constitutes an “unforeseeable emergency” under Section
409A(a)(2)(B)(ii) of the Code. After consideration of the application, and a determination that
such an emergency exists, the Benefits Officer shall direct that all or a portion of the balance of
such individual’s Deferred Compensation Account be paid to him or her in such manner and at such
time as the Benefits Officer shall specify; provided, that such amount shall be limited to the
amount reasonably necessary to satisfy the emergency need, to the extent permitted under Section
409A(a)(2)(B)(ii) of the Code.



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     5.6   Incapacity. The Benefits Officer may direct that any amounts distributable under the
Plan to a person under a legal disability be made to (and be withheld until the appointment of) a
representative qualified pursuant to law to receive such payment on such person’s behalf.



     5.7   Method of Paying Installments. Installment payments as provided for in this Article V
shall be paid on each payment date in an amount equal to the value of the Deferred Compensation
Account on such payment date multiplied by a fraction, the numerator of which is one (1) and the
denominator of which is the number of Years remaining in the period of installment payments elected
by the Participant.



     5.8   Payments Only in Cash. All payments under the Plan shall be made only in cash.



     5.9   Rehire of Inactive Participant. If an Inactive Participant returns to work with the
Company or an Affiliate, distribution of his or her remaining Deferred Compensation Account with
respect to amounts deferred prior to the date of the Separation From Service shall continue to be
made as if the Inactive Participant has not returned to work.



     5.10   Election Changes Pursuant to Transition Relief Rules Under Code Section 409A. To the
extent permitted by the Committee or the Benefits Officer, Participants may elect to amend their
deferral election to provide that a greater portion (or all) of the Participant’s bonus or long
term incentive plan award amounts will be paid to the Participant in a subsequent year upon the
regularly scheduled bonus or long term incentive plan award payment dates, in each case, in a
manner consistent with the transition relief rules promulgated by the Treasury Department under
Section 409A of the Code and pursuant to the terms established by the Benefits Officer.



ARTICLE VI




ADMINISTRATION




     6.1   The Administrative Committee; Appointment. The Plan shall be administered by a
Administrative Committee, consisting of not less than three members to be appointed from time to
time by the Board. The members of the Administrative Committee shall serve at the pleasure of, and
may be removed by the Board at any time. Any member of the Administrative Committee may resign at
any time by giving notice to the Board or to the President of the Company. Any such resignation
shall take effect at the date of receipt of such notice or at any later date specified therein;
and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary
to make it effective. No member of the Administrative Committee shall receive any compensation for
his or her services as such. Participants and Inactive Participants may be members of the
Administrative Committee but may not participate in any decision affecting their own account in any
case where the Administrative Committee may take discretionary action under Article V.



     6.2   Quorum and Actions of Administrative Committee. A majority of the members of the
Administrative Committee at the time in office shall constitute a quorum for the transaction of
business. All resolutions or other action taken by the Administrative Committee



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shall be by vote of a majority of its members present at any meeting or, without a meeting, by
instrument in writing signed by all its members. Members of the Administrative Committee may
participate in a meeting of such Administrative Committee by means of a conference telephone or
similar communications equipment that enables all persons participating in the meeting to hear each
other, and such participation in a meeting shall constitute presence in person at the meeting.




     6.3   Plan Administrator. The Administrative Committee shall be the administrator of the Plan
and shall have all powers necessary to administer the Plan, including discretionary authority to
determine eligibility for benefits and to decide claims under the terms of the Plan, except to the
extent that any such powers are vested in any other fiduciary by the Plan or by the Administrative
Committee. The Administrative Committee may from time to time establish rules for the
administration of the Plan, and it shall have the exclusive right to interpret the Plan to decide
any matters arising in connection with the administration and operation of the Plan. All its rules,
interpretations and decisions shall be conclusive and binding on the Employing Companies and on
Eligible Employees, Participants, Inactive Participants and Beneficiaries.



     The Administrative Committee may delegate any of its powers or duties to others as it shall
determine and may retain counsel, agents and such clerical and accounting services as it may
require in carrying out the provisions of the Plan.



     6.4   Reliance on Information. The Administrative Committee and the Investment Committee (as
described below) may rely conclusively upon all tables, valuations, certificates, opinions and
reports furnished by any actuary, accountant, controller, counsel, recordkeeper or other person who
is employed or engaged for any purpose in connection with the administration of the Plan.



     Neither the Administrative Committee or Investment Committee nor any member of the Board or
the board of directors (or governing body) of an Affiliate and no employee of the Company or any
Affiliate shall be liable for any act or action hereunder, whether of omission or commission, by
any other member or employee or by any agent to whom duties in connection with the administration
of the Plan have been delegated or for anything done or omitted to be done in connection with the
Plan.



     6.5   Committee Records. The Administrative Committee shall keep a record of all its
proceedings and of all payments directed by it to be made to Participants, Inactive Participants or
Beneficiaries or payments made by it for expenses or otherwise.



     6.6   The Benefits Officer; Appointment. The Benefits Officer shall be appointed by the Chief
Executive Officer of the Company and may be removed by the Chief Executive Officer. The Benefits
Officer may not serve concurrently on the Administrative Committee or the Investment Committee. The
Benefits Officer may resign at any time by giving notice to the Chief Executive Officer of the
Company. Any such resignation shall take effect at the date of receipt of such notice or at any
later date specified therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective. A Participant may be appointed as the
Benefits Officer. The Benefits Officer shall not receive compensation for his or her services as
such.



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     6.7   Delegation of Duties. The Benefits Officer may authorize others to execute or deliver
any instrument or to make any payment in his or her behalf and may delegate any of his or her
powers or duties to others as he or she shall determine, including the delegation of such powers
and duties to an Assistant Benefits Officer who shall be appointed by the Benefits Officer. In the
event of such delegation, the Assistant Benefits Officer shall for all purposes of the Plan be
considered the Benefits Officer and all references to the Benefits Officer shall be deemed to be
references to such Assistant Benefits Officer when acting in such capacity. The Benefits Officer
and the Assistant Benefits Officer may retain such counsel, agents and clerical, medical,
accounting and actuarial services as they may require in carrying out their functions.



     6.8   Benefits Officer; Settlor and Ministerial Functions. The Benefits Officer shall have
the duty to execute settlor and ministerial functions on behalf of the Company, including, without
limitation, amending and modifying the terms of the Plan and performing ministerial functions with
respect to the Plan, except to the extent specifically limited by resolution of the Board or by the
terms herein. The Benefits Officer shall have solely ministerial and settlor functions, and shall
have no fiduciary authority, obligations or status with respect to the Plan, such as, without
limitation, authority or discretion to interpret or administer the Plan, set investment policy with
respect to the Plan, or resolve factual disputes arising in connection with the interpretation,
administration and operation of the Plan, and all such fiduciary authority, obligations and status
shall be retained by the Administrative Committee and Investment Committee as set forth herein, and
the Benefits Officer will present any issues related to such authority, obligations or status to
the Administrative Committee for its resolution.



     6.9   Investment Committee; Appointment. An Investment Committee, consisting of three or more
persons, shall be appointed from time to time by the Board. The members of the Investment Committee
shall serve at the pleasure of, and may be removed by the Board at any time. Any member of the
Investment Committee may resign at any time by giving notice to the Board or to the President of
the Company. Any such resignation shall take effect at the date of receipt of such notice or at any
later date specified therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective. Participants may be members of the
Investment Committee. Unless otherwise directed by the Board, and except as may be required under
ERISA, no bond or other security shall be required of any members of the Investment Committee as
such. No member of the Investment Committee shall receive compensation for his services as such.



     6.10   Quorum and Actions of Investment Committee. A majority of the members of the
Investment Committee at the time in office shall constitute a quorum for the transaction of
business. All resolutions or other action taken by the Investment Committee shall be by vote of a
majority of its members present at any meeting or, without a meeting, by instrument in writing
signed by all its members. Members of the Investment Committee may participate in a meeting of such
Investment Committee by means of a conference telephone or similar communications equipment that
enables all persons participating in the meeting to hear each other, and such participation in a
meeting shall constitute presence in person at the meeting.



     6.11   Investment Committee Chairman; Delegation by Investment Committee. The members of the
Investment Committee shall elect one of their number as chairman and may elect a secretary who may,
but need not, be one of their number. The Investment Committee may



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delegate any of its powers or duties among its members or to others as it shall determine. It
may authorize one or more of its members to execute or deliver any instrument or to make any
payment in its behalf. It may employ such counsel, agents and clerical, accounting, actuarial and
recordkeeping services as it may require in carrying out the provisions of the Plan.




     6.12   Investment Policy. The Board shall have the authority to establish the overall
investment policy for the Plan and may delegate such responsibility to the Investment Committee.
The Investment Committee shall take all prudent action necessary or desirable for the purpose of
carrying out the foregoing.



     6.13   Indemnification. The Company shall, to the fullest extent permitted by law, indemnify
each director, officer or employee of the Company or any Affiliate (including the heirs, executors,
administrators and other personal representatives of such person) and each member of the
Administrative Committee, Investment Committee and Benefits Officer against expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement, actually and reasonably incurred
by such person in connection with any threatened, pending or actual suit, action or proceeding
(whether civil, criminal, administrative or investigative in nature or otherwise) in which such
person may be involved by reason of the fact that he or she is or was serving any employee benefit
plans of the Company or any Affiliate in any capacity at the request of such company.



     6.14   Expenses of Administration. Any expense incurred by the Company, the Administrative
Committee, the Investment Committee or the Benefits Officer relative to the administration of the
Plan shall be paid by the Employing Companies in such proportions as the Company may direct.



ARTICLE VII




CLAIMS PROCEDURE




     7.1   Participant or Beneficiary Request for Claim. Any request for a benefit payable under
the Plan shall be made in writing by a Participant or Beneficiary (or an authorized representative
of any of them), as the case may be, and shall be delivered to any member of the Administrative
Committee. Such written request shall be deemed filed upon receipt thereof by the Administrative
Committee. Such request shall be made within one year after the claimant first knew or should have
known that he had a claim for benefits under the Plan.



     7.2   Insufficiency of Information. In the event a request for benefits contains insufficient
information, the Administrative Committee shall, within a reasonable period after receipt of such
request, send a written notification to the claimant setting forth a description of any additional
material or information necessary for the claimant to perfect the claim and an explanation of why
such material is necessary. The claimant’s request shall be deemed filed with the Administrative
Committee on the date the Administrative Committee receives in writing such additional information.



     7.3   Request Notification. The Administrative Committee shall make a determination with
respect to a request for benefits within ninety (90) days after such request is filed (or within



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such extended period prescribed below). The Administrative Committee shall notify the claimant
whether his claim has been granted or whether it has been denied in whole or in part. Such
notification shall be in writing and shall be delivered, by mail or otherwise, to the claimant
within the time period described above. If the claim is denied in whole or in part, the written
notification shall set forth, in a manner calculated to be understood by the claimant:





	 	(i)	 	The specific reason or reasons for the denial;
	 
	 	(ii)	 	Specific reference to pertinent provisions of the Plan on which
the denial is based; and
	 
	 	(iii)	 	An explanation of the Plan’s claim review procedure.





          Failure by the Administrative Committee to give notification pursuant to this Section within
the time prescribed shall be deemed a denial of the request for the purpose of proceeding to the
review stage.




     7.4   Extensions. If special circumstances require an extension of time for processing the
claim, the Administrative Committee shall furnish the claimant with written notice of such
extension. Such notice shall be furnished prior to the termination of the initial ninety (90)-day
period and shall set forth the special circumstances requiring the extension and the date by which
the Administrative Committee expects to render its decision. In no event shall such extension
exceed a period of ninety (90) days from the end of such initial ninety (90)-day period.



     7.5   Claim Review. A claimant whose request for benefits has been denied in whole or in
part, or his duly authorized representative, may, within sixty (60) days after written notification
of such denial, file with a reviewer appointed for such purpose by the Administrative Committee
(or, if none has been appointed, with the Administrative Committee itself), with a copy to the
Administrative Committee, a written request for a review of his claim. Such written request shall
be deemed filed upon receipt of same by the reviewer.



     7.6   Time Limitation on Review. A claimant who timely files a request for review of his
claim for benefits, or his duly authorized representative, may review pertinent documents (upon
reasonable notice to the reviewer) and may submit the issues and his comments to the reviewer in
writing. The reviewer shall, within sixty (60) days after receipt of the written request for review
(or within such extended period prescribed below), communicate its decision in writing to the
claimant and/or his duly authorized representative setting forth, in a manner calculated to be
understood by the claimant, the specific reasons for its decision and the pertinent provisions of
the Plan on which the decision is based. If the decision is not communicated within the time
prescribed, the claim shall be deemed denied on review.



     7.7   Special Circumstances. If special circumstances require an extension of time beyond the
sixty (60)-day period described above for the reviewer to render his decision, the reviewer shall
furnish the claimant with written notice of the extension required. Such notice shall be furnished
prior to the termination of the initial sixty (60)-day period and shall set forth the special
circumstances requiring the extension period. In no event shall such extension exceed a period of
sixty (60) days from the end of such initial sixty (60)-day period.



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ARTICLE VIII




AMENDMENT AND TERMINATION




     8.1   Amendments. The Company (by action of the Board) or the Benefits Officer (for the
Company and the other Employing Companies) may at any time amend the Plan.



     8.2   Termination or Suspension. The continuance of the Plan and the ability of an Eligible
Employee to make a deferral for any Year are not assumed as contractual obligations of the Company
or any other Employing Company. The Company reserves the right (for itself and the other Employing
Companies) by action of the Board or the Benefits Officer, to terminate or suspend the Plan, or to
terminate or suspend the Plan with respect to itself or an Employing Company, to the extent
permitted under Treas. Reg. § 1.409A-3(j)(4)(ix). Any Employing Company may terminate or suspend
the Plan with respect to itself by executing and delivering to the Company or the Benefits Officer
such documents as the Company or Benefits Officer shall deem necessary or desirable.



     8.3   Participants’ Rights to Payment. No termination of the Plan or amendment thereto shall
deprive a Participant, Inactive Participant or Beneficiary of the right to payment of deferred
compensation credited as of the date of termination or amendment, in accordance with the terms of
the Plan as of the date of such termination or amendment; provided, however, that in the event of
termination of the Plan, or termination of the Plan with respect to the Company or one or more
other Employing Companies, the Benefits Officer may, in such officer’s sole and absolute
discretion, accelerate the payment of all such credited deferred compensation on a uniform basis
for all Participants and Inactive Participants or, in the case of termination of the Plan with
respect to one or more other Employing Companies, for all Participants and Inactive Participants of
such other Employing Companies only, to the extent permitted under Treas. Reg. §
1.409A-3(j)(4)(ix).



ARTICLE IX




PARTICIPATING COMPANIES




     9.1   Adoption by Other Entities. Upon the approval of the Company or the Benefits Officer,
the Plan may be adopted by any Affiliate by executing and delivering to the Company or the Benefits
Officer such documents as the Company or Benefits Officer shall deem necessary or desirable. The
provisions of the Plan shall be fully applicable to such entity except as may otherwise be agreed
to by such adopting company and the Company or Benefits Officer.



ARTICLE X




GENERAL PROVISIONS




     10.1   Participants’ Rights Unsecured. The right of any Participant or Inactive Participant
to receive future payments under the provisions of the Plan shall be a general unsecured claim
against the general assets of the Employing Company employing the Participant at the time that his
or her compensation is deferred. The Company, and any other Employing



15









 




Company or former Employing Company shall not guarantee or be liable for payment of benefits
to the employees of any other Employing Company or former Employing Company under the Plan.




     10.2   Non-Assignability. The right of any person to receive any benefit payable under the
Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, lien or charge, and any such benefit shall not, except to such extent as may
be required by law, in any manner be liable for or subject to the debts, contracts, liabilities,
engagements or torts of the person who shall be entitled to such benefits, nor shall it be subject
to attachment or legal process for or against such person.



     10.3   Affiliate Ceasing to be Such. (a)  In the event that a corporation or other entity
ceases at any time to meet the definition of an Affiliate, such entity shall cease as of such time
to be an Employing Company, if it had been such, and those of its Employees who would have been
Eligible Employees under the Plan shall cease to be such, in each case, to the extent that the
event causing such entity to no longer be an Affiliate constitutes a change in ownership or
effective control of such entity within the meaning of Section 409A(a)(2)(A)(v) of the Code.



          (b)   Payments to Participants employed by any entity which ceases to be an Affiliate under
the circumstances described under Section 10.3(a) shall be made pursuant to Article V as if the
Participant had a Separation From Service.




     10.4   No Rights Against the Company. The establishment of the Plan, any amendment or other
modification thereof; or any payments hereunder, shall not be construed as giving to any Employee,
Eligible Employee, Participant or Inactive Participant any legal or equitable rights against the
Company or any other Employing Company or former Employing Company, its shareholders, directors,
officers or other employees, except as may be contemplated by or under the Plan including, without
limitation, the right of any Participant or Inactive Participant to be paid as provided under the
Plan. Participation in the Plan does not give rise to any actual or implied contract of employment.
A Participant may be terminated at any time for any reason in accordance with the procedures of the
Employing Company.



     10.5   Withholding. Each Employing Company, former Employing Company, or paying agent shall
withhold any federal, state and local income or employment tax (including F.I.C.A. obligations for
both social security and medicare) which by any present or future law it is, or may be, required to
withhold with respect to any deferral of compensation pursuant to the Plan, any Employing Company
Allocation, any income deemed accrued or any distribution under the Plan, with respect to any of
its former or present Employees. The Benefits Officer shall provide or direct the provision of
information necessary or appropriate to enable each such company to so withhold.



     10.6   No Guarantee of Tax Consequences. The Administrative Committee, the Benefits Officer,
the Company and any Employing Company or former Employing Company do not make any commitment or
guarantee that any amounts deferred for the benefit of a Participant or Inactive Participant will
be excludible from the gross income of the Participant or Inactive Participant in the Year of
deferral or distribution for federal, state or local income or employment tax purposes, or that any
other federal, state or local tax treatment will apply to or be available to



16









 




any Participant or Inactive Participant. It shall be the obligation of each Eligible Employee,
Participant or Inactive Participant to determine whether any deferral under the Plan is excludible
from his or her gross income for federal, state and local income or employment tax purposes, and to
take appropriate action if he or she has reason to believe that any such deferral is not so
excludible.




     10.7   Severability. If a provision of the Plan shall be held illegal or invalid, 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 in the Plan.



     10.8   Governing Law. The provisions of the Plan shall be governed by and construed in
accordance with the laws of the State of New York (other than its rules of conflicts of laws to the
extent that the application of the laws of another jurisdiction would be required thereby), to the
extent not preempted by the laws of the United States.



     10.9   Compliance with Section 409A of the Code. This Plan is intended to comply with Section
409A of the Code and will be interpreted in a manner intended to comply with Section 409A of the
Code. In furtherance thereof, no payments may be accelerated under the Plan other than to the
extent permitted under Section 409A of the Code. To the extent that any provision of the Plan
violates Section 409A of the Code such that amounts would be taxable to a Participant prior to
payment or would otherwise subject a Participant to a penalty tax under Section 409A, such
provision shall be automatically reformed or stricken to preserve the intent hereof.
Notwithstanding anything herein to the contrary, (i) if at the time of a Participant’s Separation
From Service the Participant is a “specified employee” as defined in Section 409A of the Code (and
any related regulations or other pronouncements thereunder) and the deferral of the commencement of
any payments or benefits otherwise payable hereunder as a result of such Separation From Service is
necessary in order to prevent any accelerated or additional tax under Section 409A of the Code,
then the Company shall defer the commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits ultimately paid or provided to the
Participant) until the date that is six months following the Participant’s Separation From Service
(or the earliest date as is permitted under Section 409A of the Code) and (ii) if any other
payments due to a Participant hereunder could cause the application of an accelerated or additional
tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral
will make such payment compliant under Section 409A of the Code, or otherwise such payment shall be
restructured, to the extent possible, in a manner, determined by the Benefits Officer or the
Administrative Committee, that does not cause such an accelerated or additional tax. The Benefits
Officer and the Administrative Committee shall implement the provisions of this Section 10.9 in
good faith; provided that none of the Company, the Benefits Officer, the Administrative Committee
nor any of the Company’s or its subsidiaries’ employees or representatives shall have any liability
to Participants with respect to this Section 10.9.




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