Exhibit 10.1


 


 


New Century Financial
Corporation


 


Deferred Compensation
Plan


 


Amended and Restated
July 1, 2004


 


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ARTICLE 1


 


 


In recognition of the services provided by certain key
employees, the Board of Directors of New Century Financial Corporation hereby
adopts a deferred compensation plan (the “Plan”) to make additional retirement
benefits and increased financial security, on a tax favored basis, available to
those individuals effective January 1, 1999 and amended effective July 1,
2004.  This Plan shall be unfunded for
tax purposes and for purposes of Title I of ERISA.


 


ARTICLE 2

DEFINITIONS


 


Affiliate.  “Affiliate” means any firm, partnership, or corporation that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with the Company.  “Affiliate” also includes any other
organization similarly related to the Company that is designated as such by the
Board.


 


Annual Bonus.  “Annual Bonus” means any compensation, in
addition to Base Annual Salary, paid in respect of a Plan Year to a Participant
as an Employee under the Company’s Incentive Plan, or otherwise as a bonus in
the discretion of the Company.


 


Annual Deferral Amount.  “Annual Deferral Amount” shall mean that
portion of a Participant’s Base Salary, Annual Bonus, Commissions, and/or
Excess Deferrals that a Participant elects to have, and is, deferred, in
accordance with Article 4 for any one Plan Year.  In the event of Retirement, Disability, death or a Termination of
Employment prior to the end of a Plan Year, such year’s Annual Deferral Amount
shall be the actual amount withheld prior to such event.


 


Base Annual Salary.  “Base Annual Salary” means the annual
compensation (excluding bonuses, commissions, overtime, incentive payments,
welfare benefits, including, without limitation, severance benefits,
non-monetary awards or payments, Directors Fees and other fees, stock options
and phantom stock grants, and car allowances) paid to a Participant for
services rendered to any Employer, before reduction for compensation deferred
pursuant to all tax-qualified, non-qualified and Code Section 125 plans (other
than compensation deferred under individual employment Contracts) of any
Employer.  The Committee may, in its
discretion, with respect to any one or more Participants establish for any Plan
Year a limit on the amount of Base Annual Salary to be taken into account under
this Plan.


 


Beneficiary.  “Beneficiary” means the person or persons
designated as such in accordance with Section 15.2.


 


Board.  “Board” means the Board of Directors of the Corporation.


 


Change in Control.  “Change in Control” means any of the
following:


 


(a)                                  The
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (a
“Person”)) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under


 


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the Securities Exchange
Act of 1934, as amended) of 25% or more of either (1) the then-outstanding
shares of common stock of the Corporation (the “Outstanding Company Common
Stock”) or (2) the combined voting power of the then-outstanding voting
securities of the Corporation entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however,
that, for purposes of this definition, the following acquisitions shall not
constitute a Change in Control; (A) any acquisition directly from the
Corporation, (B) any acquisition by the Corporation, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any affiliate of the Corporation or a successor, or (D) any
acquisition by any entity pursuant to a transaction that complies with Sections
(a), (b), and (c) below;


 


(b)                                 Individuals
who, as of July 1, 2004, constitute the Board (the “Incumbent Board”) cease for
any reason to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to July 1, 2004 whose
election, or nomination for election by the Corporation’s stockholders, was
approved by a vote of at least two-thirds of the directors then comprising the
Incumbent Board (including for these purposes, the new members whose election
or nomination was so approved, without counting the member and his predecessor
twice) shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;


 


(c)                                  Consummation
of a reorganization, merger, statutory share exchange or consolidation or
similar corporate transaction involving the Corporation or any of its
subsidiaries, a sale or other disposition of all or substantially all of the
assets of the Corporation, or the acquisition of assets or stock of another
entity by the Corporation or any of its subsidiaries (each, a “Business
Combination”), in each case unless, following such Business Combination, (1)
all or substantially all of the individuals and entities that were the
beneficial owners of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the then-outstanding
shares of common stock and the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the entity resulting from such Business Combination (including,
without limitation, an entity that, as a result of such transaction, owns the
Corporation or all or substantially all of the Corporation’s assets directly or
through one or more subsidiaries (a “Parent”)) in substantially the same
proportions as their ownership immediately prior to such Business Combination
of the Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (2) no Person (excluding any entity resulting
from such Business Combination or a Parent or any employee benefit plan (or
related trust) of the Corporation or such entity resulting from such Business
Combination or Parent) beneficially owns, directly or indirectly, 25% or more
of, respectively, the then-outstanding shares of common stock of the entity
resulting from such Business Combination or the combined voting power of the
then-outstanding voting securities of such entity, except to the extent that
the ownership in excess of 25% existed


 


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prior to the Business
Combination, and (3) at least a majority of the members of the board of
directors or trustees of the entity resulting from such Business Combination or
a Parent were members of the Incumbent Board at the time of the execution of
the initial agreement or of the action of the Board providing for such Business
Combination; or


 


(d)                                 Approval
by the stockholders of the Corporation of a complete liquidation or dissolution
of the Corporation other than in the context of a transaction that does not
constitute a Change in Control under clause (c) above.


 


Claimant.  “Claimant” shall have the meaning set forth in Section 13.1.


 


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


 


Commissions.  “Commissions” means an Eligible Employee’s
commissions for any Plan Year, as determined in accordance with an Employer’s
policies and procedures regarding compensation.


 


Committee.  “Committee” means the persons appointed by the Plan
Administrator, and which also may act for the Company or the Board in making
decisions and performing specified duties under the Plan.


 


Company.  “Company” means the Corporation and any Affiliate which is
authorized by the Plan Administrative Committee to adopt the Plan and cover its
Eligible Employees and whose designation as such has become effective upon
acceptance of such status by the board of directors of the Affiliate.  An Affiliate may revoke its acceptance of
such designation at any time, but until such acceptance has been revoked, all
the provisions of the Plan and amendments thereto shall apply to the Eligible
Employees of the Affiliate.  In the
event the designation is revoked by the board of directors of an Affiliate, the
Plan shall be deemed terminated only with respect to such Affiliate.


 


Compensation.  “Compensation” means the total amount of
cash remuneration paid by the Company to an Eligible Employee for any calendar
year of employment as wages, commissions, bonuses and other monetary
incentives, including the Participant’s contributions under this Plan and under
any other plan of deferred compensation maintained by the Company or an
Affiliate but not taking into account any Company contributions to benefit
plans, all fringe benefits, moving and relocation expenses and other forms of welfare
benefits.


 


Compensation Deferral.  “Compensation Deferral” means that portion
of Compensation as to which a Participant has made an annual irrevocable
election to defer receipt until the date specified under the In-Service
Distribution Option or the Retirement Option.


 


Corporation.  “Corporation” means New Century Financial
Corporation, a Delaware corporation, and any successor.


 


Deduction Limitation.  “Deduction Limitation” means the following
described limitation on the annual benefit that may be distributed pursuant to
the provisions of this Plan.  The
limitation shall be applied to distributions under this Plan as expressly set
forth in this Plan.  If the Company
determines in good faith prior to a Change in Control that there is a
reasonable


 


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likelihood that any compensation paid to a Participant
for a taxable year of the Company would not be deductible by the Company solely
by reason of the limitation under Code Section 162(m), then to the extent deemed
necessary by the Company to ensure that the entire amount of any distribution
to the Participant pursuant to this Plan prior to the Change in Control is
deductible, the Company may, in its sole discretion, defer all or any portion
of the distribution.  Any amounts
deferred pursuant to this limitation shall continue to be credited (or debited)
with earnings, gains, losses, and changes in value of the Deemed Investment
Options in accordance with Section 5.3. 
The amounts so deferred and interest thereon shall be distributed to the
Participant or his or her Beneficiary (in the event of the Participant’s death)
at the earliest possible date, as determined by the Company in good faith, on
which the deductibility of compensation paid or payable to the Participant for
the taxable year of the Company during which the distribution is made will not
be limited by Section 162(m), or if earlier, the effective date of a Change in
Control


 


Disabled.  “Disabled” means a mental or physical condition which qualifies a
Participant for benefits under the Company’s Long-Term Disability Plan.


 


Discretionary Company Contribution.  “Discretionary Company Contribution” are
those credited to the Participant’s Retirement Distribution Account and/or
In-Service Distribution Account by the Company pursuant to Section 4.4.


 


Discretionary Company Contribution Account.  “Discretionary Company Contribution Account”
shall mean the sum of (i) the Participant’s Discretionary Company Contribution
Amount plus (ii) earnings, gains, losses, and changes in value of the Earnings
Crediting Options hereon credited (or debited) in accordance with Section 5.3,
net of all distributions from such account. 
This account shall be a bookkeeping entry only and shall be utilized
solely as a device for the measurement and determination of the amounts to be
paid to the Participant pursuant to the Plan.


 


Discretionary Matching Contribution.  “Discretionary Matching Contribution” are
those credited to the Participant’s Retirement Distribution Account and/or
In-Service Distribution Account by the Company pursuant to Section 4.5.


 


Discretionary Matching Contribution Account.  “Discretionary Matching Contribution
Account” shall mean the sum of (i) the Participant’s Discretionary Matching
Contribution Amount plus (ii) earnings, gains, losses, and changes in value of
the Earnings Crediting Options hereon credited (or debited) in accordance with
Section 5.3, net of all distributions from such account.  This account shall be a bookkeeping entry
only and shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to the Participant pursuant to the
Plan.


 


Distribution Option.  “Distribution Option” means the two (2)
distribution options which are available under the Plan, consisting of the
Retirement Distribution Option and the In-Service Distribution Option.


 


Distribution Option Account.  “Distribution Option Account” or “Accounts”
means, with respect to a Participant, the Retirement Distribution Account
and/or the In-Service Distribution


 


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Account established on the books of account of the
Company, pursuant to Section 5.1, for each Distribution Option Period.


 


Distribution Option Period.  “Distribution Option Period” means a period
of five (5) Plan Years for which an Eligible Employee elects, in the Enrollment
Agreement, the time and manner of payment of amounts credited to the Eligible
Employee’s In-Service Distribution Option Account for such Plan Years.


 


Earnings Crediting Options.  “Earnings Crediting Options” means the deemed
investment options selected by the Participant from time to time pursuant to
which deemed earnings are credited to the Participant’s Distribution Option
Accounts pursuant to Section 5.2


 


Effective Date.  “Effective Date” means the effective date of
the Amended Plan which is July 1, 2004.


 


Elective Deferral Account.  “Elective Deferral Account” shall mean the
sum of (i) a Participant’s Deferral Amount, plus (ii) earnings, gains, losses,
and changes in value of the Earnings Crediting Options hereon credited (or
debited) in accordance with Section 5.3, net of all distributions from such
account.  This account shall be a
bookkeeping entry only and shall be utilized solely as a device for the
measurement and determination of the amounts to be paid to the Participant
pursuant to the Plan.


 


Eligible Employee.  “Eligible Employee” means an Employee who is
a member of the group of selected management and/or highly compensated
Employees of the Company and who is designated by the Committee as eligible to
participate in the Plan for a Plan Year.


 


Employee.  “Employee” means any individual employed by the Company on a
regular, full time basis (in accordance with the personnel policies and
practices of the Employer), including citizens of the United States employed
outside of their home country and resident aliens employed in the United
States; provided, however, that to qualify as an “Employee” for purposes of the
Plan, the individual must be a member of a group of “key management or other
highly compensated employees” within the meaning of Sections 201, 301 and 401
of the Employee Retirement Income Security Act of 1974, as amended.


 


End Termination Date.  “End Termination Date” means the date of
termination of a Participant’s Service with the Company and its Affiliates and
shall be determined without reference to any compensation continuation
arrangement or severance benefit arrangement that may be applicable.


 


Enrollment Agreement.  “Enrollment Agreement” means a written agreement,
as may be amended from time to time, which is entered into by and between the
Company and a Participant.  The terms of
any Enrollment Agreement may vary any of the terms set forth in this Plan and
such changes shall be binding on the Company and the Participant if the
Enrollment Agreement is signed by the Participant and accepted by the
Committee.  Each Enrollment Agreement
executed by a Participant shall provide for the entire benefit to which such
Participant is entitled to under the Plan, and shall specify, the Company
liable for the Participant’s benefits hereunder and the magnitude or extent of
such liability.  The Enrollment
Agreement bearing the latest date of acceptance by the Committee shall govern
such entitlement


 


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and each Employer’s liability.  Upon the complete payment of a Participant’s
Account Balance, each individual’s Enrollment Agreement and his or her status
as a Participant shall terminate.


 


ERISA.  “ERISA” means the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.


 


Excess Deferrals.  “Excess Deferrals” means amounts equal to
the amounts of a Participant’s Employee Before-Tax Contributions under the
401(k) Plan (i) which are limited to Section 402(g) of the Code but which would
otherwise have been made to the 401(k) Plan pursuant to a Participant’s
election under the 401(k) Plan, and/or (ii) which are distributed to a
Participant from the 401(k) Plan in order to satisfy the limitations of Section
401(k) of the Code.


 


In-Service Distribution Account.  “In-Service Distribution Account” means the
Account maintained for a Participant for each Distribution Option Period to
which compensation Deferrals are credited pursuant to the In-Service Distribution
Option.


 


In-Service Distribution Option.  “In-Service Distribution Option” means the
Distribution Option pursuant to which benefits are payable in accordance with
Section 7.2.


 


Participant.  “Participant” means an Eligible Employee who
has filed a completed and executed Enrollment Agreement with the Committee or
its designee and is participating in the Plan in accordance with the provisions
of Article 4.  In the event of the death
or incompetency of a Participant, the term shall mean his personal representative
or guardian.  An individual shall remain
a Participant until that individual has received full distribution of any
amount credited to the Participant’s Account.


 


Plan.  “Plan” means this plan, called the New Century Financial
Corporation Deferred Compensation Plan, as amended from time to time.


 


Plan Administrator.  “Plan Administrator” means the Compensation
Committee of the Board when acting as the administrator of the Plan.


 


Plan Year.  “Plan Year” means the 12 month period beginning on each January 1
and ending on the following December 31, except that the first Plan Year shall
begin on the Effective Date, and end on December 31.


 


Retirement.  “Retirement” means the termination of the
Participant’s Service with the Employer (for reasons other than death) at or
after age 65, or, if the Participant has 5 or more years of Service, at or
after age 55.


 


Retirement Distribution Account.  “Retirement Distribution Account” means the
Account maintained for a Participant to which compensation Deferrals and Company
Matching Contributions are credited pursuant to the Retirement Distribution
Option.


 


Retirement Distribution Option.  “Retirement Distribution Option” means the
Distribution Option pursuant to which benefits are payable in accordance with
Section 7.1.


 


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Savings Plan.  “Savings Plan” means the New Century
Financial Corporation Employee 401(k) Plan, as it may be amended from time to
time.


 


Trust.  “Trust” shall mean the trust established pursuant to that certain
Trust Agreement between the Company and the trustee named therein, as amended
from time to time.


 


Years of Service.  “Years of Service” means the period of time
during which an employment relationship exists between an Employee and the
Company, including any period during which the Employee is on an approved leave
of absence, whether paid or unpaid. 
“Years of Service” also includes employment with an Affiliate if an
Employee transfers directly between the Company and the Affiliate.  For purposes of this definition, a year of
employment shall be a 365 day period (or 366 day period in the case of a leap
year) that, for any subsequent year, commences on an anniversary of that hiring
date.  Any partial year of employment
shall not be counted.  Notwithstanding
the previous sentence, a Participant’s first Year of Service shall be treated
as a full Year of Service for purposes of this definition, even if it is only a
partial Year of Service.


 


ARTICLE 3

ADMINISTRATION OF THE PLAN AND DISCRETION


 


3.1                                 The
Plan Administrator shall have full power and authority to interpret the Plan,
to prescribe, amend and rescind any rules, forms and procedures as it deems
necessary or appropriate for the proper administration of the Plan and to make
any other determinations and to take any other such actions as it deems
necessary or advisable in carrying out its duties under the Plan.  All action taken by the Plan Administrator
arising out of, or in connection with, the administration of the Plan or any
rules adopted thereunder, shall, in each case, lie within its sole discretion,
and shall be final, conclusive and binding upon the Company, the Board, the
Committee, all Employees, all Beneficiaries of Employees and all persons and
entities having an interest therein.


 


3.2                                 Members
of the Committee and the Plan Administrator shall serve without compensation
for their services unless otherwise determined by the Board.  All expenses of administering the Plan shall
be paid by the Company.


 


3.3                                 The
Company shall indemnify and hold harmless each member of the Committee and the
Plan Administrator from any and all claims, losses, damages, expenses
(including counsel fees) and liability (including any amounts paid in
settlement of any claim or any other matter with the consent of the Board)
arising from any act or omission of such member, except when the same is due to
gross negligence or willful misconduct.


 


3.4                                 Any
decisions, actions or interpretations to be made under the Plan by the Company,
the Board or Committee shall be made in its respective sole discretion, not as
a fiduciary and need not be uniformly applied to similarly situated individuals
and shall, except as expressly provided in Section 13.6 with respect to an
arbitrator’s de novo review of determinations related to claims arising upon or
following the occurrence of a Change in Control, be final, binding and
conclusive on all persons interested in the Plan.


 


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ARTICLE 4

PARTICIPATION


 


4.1                                 Deferred
Compensation.  For each Plan Year, a
Participant may elect to defer Base Salary, Annual Bonus, Commissions, and/or
Compensation.  If no election is made,
the amount deferred shall be zero.


 


In no event shall the maximum amount of Base Salary
that a Participant may defer to this Plan in any one year exceed (i) the
Participant’s total Base Salary, less (ii) the sum of the maximum amount that
the Participant could elect to defer to the Savings Plan for that year plus the
amount(s) that the Participant may elect to contribute to any qualified welfare
benefit plan of the Company for that year for medical, healthcare, insurance,
or similar benefits coverage.  The
minimum deferral limits of Section 4.1 shall not apply with respect to a
Participant for a Plan Year if the amount determined pursuant to the preceding
sentence is less than the applicable minimum amount determined in accordance
with Section 4.1.


 


4.2                                 Election
to Participate.   Each Employee who
is an Eligible Employee for a Plan Year will be offered the opportunity to
defer Compensation to be earned in that Plan Year.  Any Eligible Employee may enroll in the Plan effective as of the
first day of that Plan Year by filing a completed and fully executed Enrollment
Agreement with the Committee by a date set by the Committee but in any event
prior to the first day of that Plan Year. 
Pursuant to said Enrollment Agreement, the Eligible Employee shall
irrevocably elect (a) the percentages, in whole percentages, by which (as a
result of payroll reduction) an amount equal to any whole percentage of the
Participant’s Compensation to be earned during that Plan Year, in each case
after required nondeferrable payroll tax deductions, will be deferred, and (b)
the Distribution Option Accounts to which such amounts will be credited, and
shall provide such other information as the Plan Administrator shall
require.  The first Enrollment Agreement
filed by an Eligible Employee during any Distribution Option Period must also
set forth the Participant’s election as to the time and manner of distribution
from the Retirement Distribution Account and In-Service Distribution Account
and of amounts credited for that Distribution Option Period and related
earnings.  The Committee may establish
minimum or maximum amounts that may be deferred under this Section and may
change such standards from time to time. 
Any such limits shall be communicated by the Committee to the Plan
Administrator and by the Plan administrator to the Participants prior to the
commencement of a Plan Year.


 


4.3                                 New
Eligible Employees.  The Committee
may, in its discretion, permit individuals who first become Employees after the
beginning of a Plan Year and who are selected as Eligible Employees to enroll
in the Plan for that Plan Year by filing a completed and fully executed
Enrollment Agreement, in accordance with Section 4.1, as soon as practicable
following the date the individual first becomes an Eligible Employee but, in
any event, within 30 days after such date. 
Notwithstanding the foregoing, however, any election by an Eligible
Employee, pursuant to this Section, to defer Compensation shall apply only to
such amounts as are earned by the Eligible Employee after the date on which
such Enrollment Agreement is filed.


 


4.4                                 Discretionary
Company Contributions.  The Company,
in its sole discretion, may, but is not required to, credit any amount it
desires to any Participant’s Retirement Distribution Account and/or In-Service
Distribution Account under this Plan. 
The amount so credited to a


 


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Participant may be
smaller or larger than the amount credited to any other Participant, and the
amount credited to any Participant for a Plan Year may be zero (0).  Any Discretionary Company Contributions
approved by the Company will be credited as frequently as determined by the
Committee acting on behalf of the Company.


 


4.5                                 Discretionary
Matching Contributions.  If a
Participant has deferred Compensation during any Plan Year, the Company shall
reserve the right to credit to such Participant’s Retirement Distribution
Account and/or In-Service Distribution Account a Matching Contribution, as
defined above.  Any Discretionary
Matching Contributions approved by the Company will be credited as frequently
as determined by the Committee, acting on behalf of the Company.


 


ARTICLE 5

DISTRIBUTION OPTION ACCOUNTS


 


5.1                                 Distribution
Option Accounts.  The Committee
shall establish and maintain separate Distribution Option Accounts with respect
to a Participant for each Distribution Option Period.


 


A Participant’s Distribution Option Accounts shall
consist of the Retirement Distribution Account and/or one or more In-Service
Distribution Accounts.  The amount of
Compensation deferred pursuant to Sections 4.1, 4.2 or 4.3 shall be credited by
the Company to the Participant’s Distribution Option Accounts as soon as
administratively practicable after such compensation would otherwise have been
paid, but in no event later than the fifteenth day of the month following the
month in which such Compensation would otherwise have been paid, in accordance
with the Distribution Option irrevocably elected by the Participant in the
Enrollment Agreement.  Any amount once
taken into account as Compensation for purposes of this Plan shall not be taken
into account thereafter.  The
Participant’s Distribution Option Accounts shall be reduced by the amount of
the payments made by the Company to the Participant or the Participant’s
Beneficiary pursuant to this Plan.


 


5.2                                 Earnings
on Distribution Option Accounts.  A
Participant’s Distribution Option Accounts shall be credited with earnings
according to the Earnings Crediting Options elected by the Participant.  Participants may allocate their Retirement
Distribution Account and/or each of their In-Service Distribution Accounts
among the Earnings Crediting Options available under the Plan only in whole
percentages of not less than five percent (5%) for any one Earnings Crediting
Option and provided that allocation must total 100%.   The Committee shall select the Earnings Crediting Options whose
performance will measure the amounts to be credited under Section 5.3 to the
Distribution Option Accounts of Participants. 
The selection of Earnings Crediting Options shall be for bookkeeping
purposes only, and the Company shall not be obligated actually to invest any
money in the Earnings Crediting Options, or to acquire or maintain any actual
investment.  The Committee may, in its
discretion, change its selection of the Earnings Crediting Options at any time;
provided that following a Change in Control, the number and general type(s) of
Earnings Crediting Options offered shall not be substantially diminished.  If a Participant or Beneficiary has elected
pursuant to this Section to invest all or a portion of his Distribution
Accounts in a Earnings Crediting Option which the Committee decided to
discontinue, his Distribution Accounts shall be invested after such
discontinuance in the


 


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continuing
Earnings Crediting Options which the Committee determines, in its discretion,
most nearly resembles the discontinued Earnings Crediting Options.  The Committee shall provide each Participant
(or Beneficiary in the event of a Participant’s death) with a list of the
Earnings Crediting Options available for hypothetical investment, and the
Participant (or Beneficiary in the event of a Participant’s death) shall
designate, on a form provided by the Committee, or on the Plan’s website, one
or more of such Earnings Crediting Options in which he or she wishes his or her
Distribution Option Accounts to be “invested”. 
Notwithstanding the foregoing, the Participant’s Distribution Accounts
on July 1, 2004 shall be deemed to be invested in an Earnings Crediting Option
that is similar to a money market fund. 
The Committee, in its discretion, shall designate the times, procedures,
and limitations for the designation of hypothetical investments by Participants
or Beneficiaries of their Distribution Option Accounts among the Earnings
Crediting Options (including, but not limited to, the times when a Participant
or Beneficiary may change his hypothetical investments, the increments
expressed as a dollar amount or as a percentage of the Participant’s
Distribution Accounts in which a Participant or Beneficiary may choose to make
a hypothetical investment in a Earnings Crediting Option, and any minimum
increment expressed as a dollar amount or as a percentage of the Participant’s
Distribution Accounts that may be deemed to be invested in a Earnings Crediting
Option); provided, however, that (i) a Participant or Beneficiary may make a
selection of a hypothetical investment in a Earnings Crediting Option on a
prospective basis only, and (ii) the times, procedures and limitations for the
selection of hypothetical investments in the Earnings Crediting Options in
effect at any time shall be uniform among all Participants and Beneficiaries.


 


5.3                                 Crediting
of Earnings, Gains, Losses, and Changes in Value of Earnings Crediting Options.  The Committee shall determine, in its
discretion, the exact times and methods for (i) crediting or charges to each
Participant’s Distribution Accounts with the earnings, gains, losses, and
changes in value of the Earnings Crediting Options selected by the Participant,
(ii) crediting each Participant’s Distribution Accounts with such Participant’s
Annual Deferral Amount, Discretionary Company Contribution, and Discretionary
Matching Contribution, and (iii) debiting each Participant’s Distribution
Accounts with the payment of benefits or withdrawals under this Plan; provided
that any such credits, debits or other charges shall be made no less frequently
than annually.  The Committee may, at
any time, change the timing or methods for crediting or debiting earnings,
gains, losses, and changes in value of Earnings Crediting Options, Annual
Deferral Amounts, Discretionary Company Contribution, Discretionary Matching
Contribution, and payments of benefits under this Plan; provided, however, that
the times and methods for crediting or debiting such items in effect at any
particular time shall be uniform among all Participants and Beneficiaries and
such crediting or debiting shall occur no less frequently than annually.


 


5.4                                 Changes
in Earnings Crediting Options.  A
Participant may change the Earnings Crediting Options to which his Distribution
Option Accounts are deemed to be allocated, in the manner prescribed by the
Committee, with whatever frequency is determined by the Committee provided that
each Participant shall have the right to elect at least one such change per
year.  Each such change may include (a)
reallocation of Participant’s existing Accounts in whole percentages of not
less than five percent (5%), and/or (b) change in investment allocation of
amounts to be credited to the Participant’s Accounts in the future, as the Participant
may elect, provided that the allocations remain in whole percentages of not
less than five percent (5%).


 


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5.5                                 Valuation
of Accounts.  The value of a
Participant’s Distribution Option Accounts as of any date shall equal the
amounts therefore credited to such Accounts, including any earnings (positive
or negative) deemed to be earned on such Accounts in accordance with Section
5.2 through the day preceding such date, less the amounts therefore deducted
from such Accounts.


 


5.6                                 Statement
of Accounts.  The Committee shall
provide to each Participant, not less frequently than quarterly, a statement in
such form as the Committee deems desirable setting forth the balance standing
to the credit of each Participant in each of his Distribution Option Accounts
as of the end of the preceding calendar quarter.


 


5.7                                 Distribution
from Accounts.  Any distribution
made to or on behalf of a Participant from one or more of his Distribution
Option Accounts in an amount which is less than the entire balance of any such
Account shall be made pro rata from each of the Earnings Crediting Options to
which such Account is then allocated.


 


ARTICLE 6

DISTRIBUTION OPTIONS


 


6.1                                 Election
of Distribution Option.  In the
first completed and fully executed Enrollment Agreement filed with the
Committee for each Distribution Option Period, an Eligible Employee shall elect
the time and manner of payment pursuant to which the Eligible Employee’s
Distribution Option Accounts for that Distribution Option Period will be
distributed.  Annually, the Eligible
Employee shall allocate his or her deferrals between the Distribution Options
in increments of five percent, provided, however that 100 percent of such
deferrals must be allocated to one or the other of the Distribution Options.


 


6.2                                 Retirement
Distribution Option.  Subject to
Section 7.1 distribution of the Participant’s Retirement Distribution Account,
if any,  shall commence upon (a) the
Participant’s Retirement,  or (b) if
later, the Participant’s attainment of age 65, as elected by the Participant in
the Enrollment Agreement pursuant to which such Retirement Distribution Account
was established or otherwise as permitted under Section 7.1(a).


 


6.3                                 In-Service
Distribution Option.  Subject to
Section 7.2, the Participant’s In-Service Distribution Account for any
Distribution Option Period shall be distributed commencing in the year elected
by the Participant in the Enrollment Agreement pursuant to which such
In-Service Distribution Account was established.  Notwithstanding the foregoing, a Participant shall not be
entitled to allocate any deferrals to an In-Service Distribution Account for
two Plan Years preceding the Plan Year which includes the date on which such
Account is to be distributed and such additional deferrals shall instead be
allocated to the Retirement Distribution Account.


 


ARTICLE 7

BENEFITS TO PARTICIPANTS


 


7.1                                 Benefits
Under the Retirement Distribution Option. 
Benefits under the Retirement Distribution Option shall be paid to a
Participant as follows.


 


12

















 


(a)                                  Benefits
Upon Retirement.  In the case of a
Participant whose Service with the Employer terminates on account of his
Retirement, the Participant’s Retirement Distribution Account shall be
distributed in the following methods, as elected by the Participant in writing
either in the Enrollment Agreement or in a separate election made prior to the
first day of the Plan Year immediately preceding the Plan Year in which the Participant’s
Retirement occurs:  (i) in a lump sum;
(ii) in annual installments; or (iii) by any other formula that is
mathematically derived and is acceptable to the Committee.  Any lump-sum benefit payable in accordance
with this paragraph shall be paid in, but not later than January 31 of, the
Plan Year following the Plan Year in which occurs the Participant’s Retirement
or, if later, attainment of age 65 as elected by the Participant in accordance
with this Section or Section 6.2, in an amount equal to the value of such
Retirement Distribution Account as of the last business day of the Plan Year
preceding the date of payment.  Annual
installment payments, if any, shall commence no later than January 31 of the
Plan Year following the Plan Year in which occurs the Participant’s Retirement
or if later, attainment of age 65, as elected by the Participant in accordance
with this Section or Section 6.2, in an amount equal to (i) the value of such
Retirement Distribution Account as of the last business day of the Plan Year
preceding the date of payment, divided by (ii) the number of annual installment
payments elected by the Participant in the Enrollment Agreement pursuant to
which such Retirement Distribution Account was established.  The remaining annual installments shall be
paid not later than January 31 of each succeeding Plan Year in an amount equal
to (i) the value of such Retirement Distribution Account as of the last
business day of the immediately preceding Plan Year divided by (ii) the number
of installments remaining.   A
Participant may change the election regarding the manner of payments as
described in Section 6.1 of the Participant’s account at any time prior to the
first day of the Plan Year immediately preceding the Plan Year in which the
Participant’s Retirement occurs, and elected as the distribution date by the
Participant in accordance with Section 6.1.


 


(b)                                 Benefits
Upon Termination of Employment.  In
the case of a Participant whose Service with the Employer terminates prior to
the earliest date on which the Participant is eligible for Retirement, other
than on account of becoming Disabled or by reason of death, the vested portion
of a Participant’s Retirement Distribution Account shall be distributed (i) in
a lump sum by February 28 of the year following the Participant’s End
Termination Date or (ii) beginning at age 65, as irrevocably elected by the
Participant in the Enrollment Agreement pursuant to which such Retirement
Distribution Account was established; provided, however, that the Company may
override Participant’s election and cause a distribution under clause (i)
notwithstanding any other election by the Participant.


 


7.2                                 Benefits
Under the In-Service Distribution Option. 
Benefits under the In-Service Distribution Option shall be paid to a
Participant as follows:


 


(a)                                  In-Service
Distributions.  In the case of a
Participant who continues in Service with the Employer, the Participant’s
In-Service Distribution Account for any Distribution Option Period shall be
paid to the Participant commencing no later than January 31 of the Plan Year
elected by the Participant in the Enrollment Agreement pursuant to which such
In-Service Distribution Account was established, which may be no earlier than
the third Plan Year following the end of the last Plan Year in the Distribution
Option Period in which deferrals are to be credited to the In-Service
Distribution Account for that Distribution Option Period in one lump sum or in
annual installments payable over 2, 3, 4 or 5 years.   Any lump-sum benefit


 


13

















 


payable in
accordance with this paragraph shall be paid not later than January 31 of the
Plan Year elected by the Participant in accordance with Section 6.3, in an
amount equal to the value of such In-Service Distribution Account as of the
last business day of the Plan Year preceding the date of the payment.  Annual installment payments, if any, shall
commence not later than January 31 of the Plan Year as elected by the
Participant in accordance with Section 6.3, in an amount equal (i) the value of
such In-Service Distribution Account as of the last business day of the Plan
Year preceding the date of payment, divided by (ii) the number of installments
remaining.  In accordance with
procedures established by the Plan Administrator, not later than twelve months
prior to the Participant’s designated In-Service Distribution date, the
Participant may elect in writing to extend the designated In-Service
Distribution date into the future but such extension will not result in an
extension of less than five years.


 


(b)                                 Benefits
Upon Termination of Employment.  In
the case of a Participant whose Service with the Employer terminates prior to
the date on which the Participant’s In-Service Distribution Account would
otherwise be distributed, other than on account of becoming Disabled or by
reason of death, such In-Service Distribution Account shall be distributed (i)
in a lump sum by February 28 of the year following the Participant’s End
Termination Date; (ii) in annual installments commencing on the date such
In-Service Distribution Account would have been distributed; or (iii) in a lump
sum on the date such In-Service Distribution Account would otherwise have been
distributed, all as irrevocably elected by the Participant in the Enrollment
Agreement pursuant to which such In-Service Distribution Account was
established; provided, however, that the Company may override a Participant’s
election and cause a distribution under clause (i) notwithstanding any other
election by the Participant.


 


ARTICLE 8

DISABILITY


 


In the event a Participant becomes Disabled, the
Participant’s right to make any further deferrals under this Plan shall
terminate as of the date for which the Participant first receives benefits
under the Company’s Long-Term Disability Benefit Plan, as amended from time to
time.   The Participant’s Distribution
Option Accounts shall continue to be credited with earnings in accordance with
Section 5.2 until such Accounts are fully distributed.  For purposes of this Plan, a Disabled
Participant will not be treated as having terminated Service.  The Participant’s Retirement Distribution
Account, if any, shall be distributed to the Participant in accordance with
Section 7.1(a), provided, however, that distribution of the Participant’s
Retirement Distribution Accounts, if any, shall commence not later than January
31 of the Plan Year immediately following the later of (a) the Plan Year in
which the Participant first becomes eligible for Retirement, or (b) the Plan
Year in which the Participant first received benefits under the Company’s
Long-Term Disability Plan, as amended from time to time.  The Participant’s In-Service Distribution
Accounts, if any, will be distributed to the Participant in accordance with
Section 7.2(a) without regard to the fact that the Participant became Disabled.


 


ARTICLE 9

SURVIVOR BENEFITS


 


9.1                                 Death
of Participant Prior to the Commencement of Benefits.  In the event of a Participant’s death prior
to the commencement of benefits in accordance with Article 7, benefits


 


14

















 


shall be paid to
the Participant’s Beneficiary, as determined under Section 12.4, pursuant to
Section 9.2 or 9.3, whichever is applicable, in lieu of any benefits otherwise
payable under the Plan to or on behalf of such Participant.


 


9.2                                 Survivor
Benefits Under the Retirement Distribution Option.  In the case of a Participant with respect to
whom the Company has established a Retirement Distribution Account, and who
dies prior to the commencement of benefits under such Retirement Distribution
Account pursuant to Section 7.1, distribution of such Retirement Distribution
Account shall be made (a) in a lump sum as soon as practicable following the
Participant’s death, or (b) in the manner and at such time as such Retirement
Distribution Account would otherwise have been distributed in accordance with
Section 7.1 had the Participant lived, as elected by the Participant in the
Enrollment Agreement pursuant to which such Retirement Distribution Account was
established or as may have been changed by the Participant.  The amount of any lump sum benefit payable
in accordance with this Section shall equal the value of such Retirement
Distribution Account as of the last business day of the calendar month
immediately preceding the date on which such benefit is paid.  The amount of any annual installment benefit
payable in accordance with this Section shall equal (a) the value of such
Retirement Distribution Account as of the last business day of the calendar
month immediately preceding the date on which such installment is paid, divided
by (b) the number of annual installments remaining to be paid pursuant to the
election of the Participant in the Enrollment Agreement pursuant to which such
Retirement Distribution Account was established or as may have been changed by
the Participant.


 


9.3                                 Survivor
Benefits Under the In-Service Distribution Option.  In the case of a Participant with respect to
whom the Company has established one or more In-Service Distribution Accounts,
and who dies prior to the date on which such In-Service Distribution Accounts
are to be paid pursuant to Section 7.2, distribution of such In-Service
Distribution Accounts shall be made (a) in a lump sum as soon as practicable
following the Participant’s death, or (b) at such time and in such form as such
In-Service Distribution Accounts would otherwise have been distributed in
accordance with Section 7.2 had the Participant lived, as irrevocably elected
by the Participant in the Enrollment Agreement pursuant to which such
In-Service Distribution Accounts were established.  The amount of any lump sum benefit payable in accordance with
this Section shall equal the value of such In-Service Distribution Accounts as
of the last business day of the calendar month immediately preceding the date
on which such benefit is paid.


 


9.4                                 Death
of Participant After Benefits Have Commenced.  In the event a Participant who elected the Retirement
Distribution Option dies after annual installment benefits payable under
Section 7.1 from the Participant’s Retirement Distribution Account has
commenced, but before the entire balance of such Retirement Distribution
Account has been paid, any remaining installments shall continue to be paid to
the Participant’s Beneficiary, as determined under Section 15.2, at such times
and in such amounts as they would have been paid to the Participant had he
survived.


 


15

















 


ARTICLE 10

EMERGENCY BENEFIT


 


In the event that the Committee, upon written request
of a Participant, determines, in its sole discretion, that the Participant has
suffered an unforeseeable financial emergency, the Company shall pay to the
Participant from the vested portion of his Distribution Option Account, as soon
as practicable following such determination, an amount necessary to meet the
emergency, after deduction of any and all taxes as may be required pursuant to
Section 15.8 (the “Emergency Benefit”). 
For purposes of this Plan, an unforeseeable financial emergency is an
unexpected need for cash arising from an illness, casualty loss, sudden
financial reversal, or other such unforeseeable occurrence.  Cash needs arising from foreseeable events
such as the purchase of a house or education expenses for children shall not be
considered to be the result of an unforeseeable financial emergency.  Emergency Benefits shall be paid first from
the Participant’s In-Service Distribution Accounts, if any, to the extent the
balance of one or more of such In-Service Distribution Accounts is sufficient
to meet the emergency, in the order in which such Accounts would otherwise be
distributed to the Participant.  If the
distribution exhausts the In-Service Distribution Accounts, the Retirement
Distribution Account may be accessed.  With respect to that portion of any Distribution Option Account
which is distributed to a Participant as an Emergency Benefit, in accordance
with this Article, no further benefit shall be payable to the Participant under
this Plan.  Notwithstanding anything in
this Plan to the contrary, a Participant who receives an Emergency Benefit in
any Plan Year shall not be entitled to make any further deferrals for the
remainder of such Plan Year or the following Plan Year.  It is intended that the Committee’s determination
as to whether a Participant has suffered an “unforeseeable financial emergency”
shall be made consistent with the requirements under section 457(d) of the
Code.


 


ARTICLE 11

ACCELERATED DISTRIBUTION


 


11.1                           Availability
of Withdrawal Prior to Retirement. 
Upon the Participant’s written election, the Participant may elect to
withdraw all or a portion of the Participant’s Distribution Option Account at
any time prior to the time such Distribution Option Account otherwise becomes
payable under the Plan, provided the conditions specified in Section 11.3,  Section 11.4, and Section 11.5 are
satisfied.


 


11.2                           Acceleration
of Periodic Distributions.  Upon the
Participant’s written election, the Participant or Participant’s Beneficiary
who is receiving installment payments under the Plan may elect to have all or a
percentage of the remaining installments distributed in the form of an
immediately payable lump sum, provided the condition specified in Section 11.3
is satisfied.


 


11.3                           Forfeiture
Penalty.  In the event of a
withdrawal pursuant to Section 11.1, or an accelerated distribution pursuant to
Section 11.2, the Participant shall forfeit from his Distribution Option
Account from which the withdrawal is made an amount equal to ten percent (10%)
of the amount of the withdrawal or accelerated distribution, as the case may
be.  The forfeited amount shall be
deducted from the applicable Distribution Option Account prior to giving effect
to the requested withdrawal or acceleration. 
The Participant and the Participant’s Beneficiary shall not have any
right or claim to the forfeited amount, and the Company shall


 


16

















 


have no obligation
whatsoever to the Participant, the Participant’s Beneficiary or any other
person with regard to the forfeited amount.


 


11.4                           Minimum
Withdrawal.  In no event shall the
amount withdrawn in accordance with Section 11.1 be less than 25% of the amount
credited to the Participant’s Distribution Option Account immediately prior to
the withdrawal.


 


11.5                           Suspension
from Deferrals.  In the event of a
withdrawal pursuant to Section 11.1, a Participant who is otherwise eligible to
make deferrals under Article 4 shall be prohibited from making any deferrals
with respect to the Plan Year immediately following the Plan Year during which
the withdrawal was made, and any election previously made by the Participant
with respect to deferrals for the Plan Year of the withdrawal shall be void and
of no effect with respect to subsequent deferrals for such Plan Year.


 


ARTICLE 12

VESTING


 


12.1                           A
Participant shall at all times be one hundred percent (100%) vested in his or
her Elective Deferral Account.


 


12.2                           A
Participant shall be vested in his or her Discretionary Company Contribution
Account in accordance with the following schedule:


 




	
  Years Discretionary

  Company Contribution

  has been credited to account

  	
   

  	
  Vested
  Percentage

  	
   

  
	
  Less than 1 year

  	
   

  	
  50

  	
  %

  
	
  1 year but less than 2 years

  	
   

  	
  75

  	
  %

  
	
  2 years or more

  	
   

  	
  100

  	
  %

  






 


 


12.3                           A
Participant shall be vested in his or her Discretionary Matching Contribution
Account in accordance with the following schedule:


 




	
  Years of Service

  	
   

  	
  Vested
  Percentage

  	
   

  
	
  Less than 1 year

  	
   

  	
  0

  	
  %

  
	
  1 year but less than 2 years

  	
   

  	
  20

  	
  %

  
	
  2 years but less than 3 years

  	
   

  	
  40

  	
  %

  
	
  3 years but less than 4 years

  	
   

  	
  60

  	
  %

  
	
  4 years but less than 5 years

  	
   

  	
  80

  	
  %

  
	
  5 years or more

  	
   

  	
  100

  	
  %

  






 


17

















 


12.4                           Notwithstanding
anything to the contrary contained in this Section, in the event of a Change in
Control, Retirement, or Death, a Participant’s Discretionary Company
Contribution Account and Discretionary Matching Contribution Account shall
immediately become one hundred percent (100%) vested (if it is not already
vested in accordance with the above vesting schedules).


 


ARTICLE 13

CLAIMS PROCEDURE


 


13.1                           Presentation
of Claim.  Any Participant or
Beneficiary of a deceased Participant (such Participant or Beneficiary being
referred to below as a “Claimant”) may deliver to the Committee a written claim
for a determination with respect to the amounts distributable to such Claimant
from the Plan.  If such a claim relates
to the contents of a notice received by the Claimant, the claim must be made
within sixty (60) days after such notice was received by the Claimant.  The claim must state with particularity the
determination desired by the Claimant. 
All other claims must be made within one hundred eighty (180) days of
the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the
determination desired by the Claimant.


 


13.2                           Notification
of Decision.  The Committee shall
consider a Claimant’s claim within a reasonable time, and shall notify the
Claimant in writing but not later than ninety (90) days after receiving the
claim.  If the Committee determines that
special circumstances require an extension of time for processing the claim,
written notice of the extension shall be furnished to the Claimant prior to the
termination of the initial ninety (90) day period.  In no event shall such extension exceed a period of ninety (90)
days from the end of the initial period. 
The extension notice shall indicate the special circumstances requiring
an extension of time and the date by which the Committee expects to render the
benefit determination.  The Committee
shall notify the Claimant in writing:


 


(a)                                  That
the Claimant’s requested determination has been made, and that the claim has
been allowed in full; or


 


(b)                                 That
the Committee has reached a conclusion contrary, in whole or in part, to the
Claimant’s requested determination, and such notice must set forth in a manner
calculated to be understood by the Claimant:


 


(i)                                     the
specific reason(s) for the denial if the claim, or any part of it;


 


(ii)                                  specific
reference(s) to pertinent provisions of the Plan upon which such denial was
based;


 


(iii)                               a description of any
additional material or information necessary for the Claimant to perfect the
claim, and an explanation of why such material or information is necessary; and


 


(iv)                              an
explanation of the claim review procedure set forth in Section 13.3 below or,
to the extent required by law, a civil action under ERISA Section 502(a)
following an adverse benefit determination on review.


 


18

















 


13.3                           Review
of a Denied Claim.  Within sixty
(60) days after receiving a notice from the Committee that a claim has been
denied, in whole or in part, a Claimant (or the Claimant’s duly authorized
representative) may file with the Committee a written request for a review of
the denial of the claim.  Thereafter,
the Claimant (or the Claimant’s duly authorized representative):


 


(a)                                  may,
upon request and free of charge, have reasonable access to, and copies of, all
documents, records and other information relevant to the claim for benefits;


 


(b)                                 may
submit written comments or other documents;


 


(c)                                  may
request a hearing, which the Committee, in its sole discretion, may grant.


 


13.4                           Decision
on Review.  The Committee shall
render its decision on review promptly, and not later than sixty (60) days
after the filing of a written request for review of the denial of the
claim.  If the Committee determines that
special circumstances require an extension of time for processing the claim,
written notice of the extension shall be furnished to the Claimant prior to the
termination of the initial sixty (60) day period.  In no event shall such extension exceed a period of sixty (60)
days from the end of the initial period. 
The extension notice shall indicate the special circumstances requiring
an extension of time and the date by which the Committee expects to render the
benefit determination.  In rendering its
decision, the Committee shall take into account 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.  The
decision must be written in a manner calculated to be understood by the
Claimant, and it must contain:


 


(a)                                  specific
reasons for the decision;


 


(b)                                 specific
reference(s) to the pertinent Plan provisions upon which the decision was
based; and


 


(c)                                  a
statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of, all documents, records and other information
relevant (as defined in applicable ERISA regulations) to the Claimant’s claim
for benefits; and


 


(d)                                 to
the extent required by law, a statement of the Claimant’s right to bring a
civil action under ERISA Section 502(a).


 


13.5                           Legal
Action.  With respect to claims made
prior to the occurrence of a Change in Control, a Claimant’s compliance with
the foregoing provisions of this Article 13 is a mandatory prerequisite to a
Claimant’s right to commence arbitration pursuant to Section 13.6 with respect
to any claim for benefits under this Plan. 
With respect to claims made upon and after the occurrence of a Change in
Control, the Claimant may proceed directly to arbitration in accordance with
Section 13.6 and need not first satisfy the foregoing provisions of this
Article 13.


 


13.6                           Arbitration.  All claims or controversies arising out of
or in connection with this Plan, that any Company may have against any
Claimant, or that any Claimant may have against


 


19

















 


any Company or
against any of their respective officers, directors, employees or agents acting
in their capacity as such, shall, subject to the initial review provided for in
the foregoing provisions of this Article 13 that are effective with respect to
claims brought prior to the occurrence of a Change in Control, be resolved
through arbitration as provided in this Section 13.6.  The decision of an arbitrator on any issue, dispute, claim or
controversy submitted for arbitration, shall be final and binding upon each
Company and the Claimant and that judgment may be entered on the award of the
arbitrator in any court having proper jurisdiction.  With respect to claims arising upon or following the occurrence
of a Change in Control (but not with respect to any determination made by the
Committee prior to the Change in Control), the arbitrator shall review de novo any
claim previously considered by the Committee pursuant to this Article 13.


 


Except as otherwise provided in this procedure or by
mutual agreement of the parties, any arbitration shall be conducted in Orange
County, California before a sole arbitrator selected from Judicial Arbitration
and Mediation Services, Inc., Orange County, California, or its successor
(“JAMS”), or if JAMS is no longer able to supply the arbitrator, such
arbitrator shall be selected from the American Arbitration Association, and
shall be conducted in accordance with the provisions of California Code of
Civil Procedure §§ 1280 et seq. as the exclusive forum for the resolution of
such dispute.  The party desiring to
initiate arbitration shall do so by sending written notice of an intention to
arbitrate to the other party, which notice shall include a description of the
nature of all claims or controversies asserted and a description of the facts
upon which such claims are based. 
Pursuant to California Code of Civil Procedure § 1281.8, provisional
injunctive relief may, but need not, be sought by either party to this
Agreement in a court of law while arbitration proceedings are pending, and any
provisional injunctive relief granted by such court shall remain effective
until the matter is finally determined by the arbitrator.  Final resolution of any dispute through
arbitration may include any remedy or relief which the arbitrator deems just
and equitable, including any and all remedies provided by applicable state or
federal statutes.  At the conclusion of
the arbitration, the arbitrator shall issue a written decision that sets forth
the essential findings and conclusions upon which the arbitrator’s award or
decision is based.  Any award or relief
granted by the Arbitrator hereunder shall be final and binding on the parties
hereto and may be enforced by any court of competent jurisdiction.  The parties acknowledge and agree that they
are hereby waiving any rights to trial by jury in any action, proceeding or
counterclaim brought by either of the parties against the other in connection
with any matter whatsoever arising out of or in any way connected with this
Plan.


 


All forum costs of the arbitration (including, but not
limited to, the fees and expenses of the arbitrator) shall be advanced and
borne by the Company.  Further, the fees
and expenses of the counsel for the Claimant shall be advanced and borne by the
Company; provided, however, that if it is determined by the arbitrator that the
Claimant did not commence the arbitration in good faith and had no reasonable
basis therefore, the Claimant shall repay to the Company all amounts advanced
by the Company to cover the Claimant’s fees and expenses of counsel and shall
reimburse the Company for its reasonable legal fees and expenses (other than
forum costs) in connection with the arbitration.


 


The arbitrator shall interpret this Plan, any
applicable Company policy or rules and regulations, any applicable substantive
law (and the law of remedies, if applicable) of the state in which the claim
arose or applicable federal law (any such law to be applicable only to the
extent


 


20

















 


consistent with Section 15.11).  In reaching his or her decision, the
arbitrator shall have no authority to change or modify any lawful Company
policy, rule or regulation, or this Plan. 
The arbitrator, and not any federal, state or local court or agency,
shall have exclusive and broad authority to resolve any dispute relating to the
interpretation, applicability, enforceability or formation of this Plan,
including but not limited to, any claim that all or any part of this Plan is
voidable.


 


The arbitrator shall have authority to entertain a
motion to dismiss and/or motion for summary judgment by any party and shall
apply the standards governing such motions under the Federal Rules of Civil
Procedure.


 


ARTICLE 14

TRUST


 


14.1                           Establishment
of Trust.  The Company shall establish
the Trust, and the Employers shall transfer over to the Trust such assets, if
any, as the Committee determines, from time to time and in its sole discretion,
are appropriate.


 


14.2                           Interrelationship
of the Plan and the Trust.  The
provisions of the Plan shall govern the rights of a Participant to receive
distributions pursuant to the Plan.  The
provisions of the Trust shall govern the rights of the Participant and the
creditors of the Employers to the assets transferred to the Trust.  The Employers shall at all times remain
liable to carry out their obligations under the Plan.  The Employers’ obligations under the Plan may be satisfied with
Trust assets distributed pursuant to the terms of the Trust.  Any such distribution shall reduce the
Employer’s obligations under this Agreement.


 


ARTICLE 15

MISCELLANEOUS


 


15.1                           Amendment
and Termination.  The Plan may be
amended, suspended, discontinued or terminated at any time by the Committee;
provided, however, that no such amendment, suspension, discontinuance or
termination shall reduce or in any manner adversely affect the rights of any
Participant with respect to benefits that are payable or may become payable
under the Plan based upon the balance of the Participant’s Accounts as of the
effective date of such amendment, suspension, discontinuance or termination.
Notwithstanding anything else contained herein or in the New Century Financial
Corporation Supplemental Benefit and Deferred Compensation Trust Agreement II
to the contrary, the Company may at any time terminate the Plan and pay out the
Distribution Option Accounts in the form of lump sum payments


 


15.2                           Designation
of Beneficiary.  Each Participant
may designate a Beneficiary or Beneficiaries (which Beneficiary may be an
entity other than a natural person) to receive any payments which may be made
following the Participant’s death.  Such
designation may be changed or canceled at any time without the consent of any
such Beneficiary(1).  Any such
designation, change or cancellation must be made in a form approved by the
Committee and


 












(1)  In Community Property States, in order for a married participant
to designate someone other than his/her spouse as the primary beneficiary,
consent of each spouse is required.


 


21

















 


shall not be
effective until received by the Committee, or its designee.  If no Beneficiary has been named, or the
designated Beneficiary or Beneficiaries shall have predeceased the Participant,
the Beneficiary shall be the Participant’s estate.  If a Participant designates more than one Beneficiary, the
interests of such Beneficiaries shall be paid in equal shares, unless the
Participant has specifically designated otherwise.


 


15.3                           Limitation
of Participant’s Right.  Nothing in
this Plan shall be construed as conferring upon any Participant any right to
continue in the employment of the Company, nor shall it interfere with the
rights of the Company to terminate the employment of any Participant and/or to
take any personnel action affecting any Participant without regard to the
effect which such action may have upon such Participant as a recipient or
prospective recipient of benefits under the Plan.  Any amounts payable hereunder shall not be deemed salary or other
compensation to a Participant for the purposes of computing benefits to which
the Participant may be entitled under any other arrangement established by the
Employer for the benefit of its employees.


 


15.4                           No
Limitation on Company Actions. 
Nothing contained in the Plan shall be construed to prevent the Company
from taking any action which is deemed by it to be appropriate or in its best
interest.  No Participant, Beneficiary,
or other person shall have any claim against the Employer as a result of such
action.


 


15.5                           Obligations
to Company.  If a Participant
becomes entitled to a distribution of benefits under the Plan, and if at such
time the Participant has outstanding any debt, obligation, or other liability
representing an amount owing to the Employer, then the Employer may offset such
amount owed to it against the amount of benefits otherwise distributable.  Such determination shall be made by the
Committee.


 


15.6                           Nonalienation
of Benefits.  Except as expressly
provided herein, no Participant or Beneficiary shall have the power or right to
transfer (otherwise than by will or the laws of descent and distribution),
alienate, or otherwise encumber the Participant’s interest under the Plan.  The Company’s obligations under this Plan
are not assignable or transferable except to (a) any corporation or partnership
which acquires all or substantially all of the Company’s assets or (b) any
corporation or partnership into which the Company may be merged or
consolidated.  The provisions of the
Plan shall inure to the benefit of each Participant and the Participant’s
Beneficiaries, heirs, executors, administrators or successors in interest.


 


15.7                           Protective
Provisions.  Each Participant shall
cooperate with the Employer by furnishing any and all information requested by
the Employer in order to facilitate the payment of benefits hereunder, taking
such physical examinations as the Employer may deem necessary and taking such
other relevant action as may be requested by the Employer.  If a Participant refuses to cooperate, the
Employer shall have no further obligation to the Participant under the Plan,
other than payment to such Participant of the then current balance of the
Participant’s Distribution Option Accounts in accordance with his prior
elections.


 


15.8                           Withholding
Taxes.  The Company may make such
provisions and take such action as it may deem necessary or appropriate for the
withholding of any taxes which the Company is required by any law or regulation
of any governmental authority, whether Federal,


 


22

















 


state or local, to
withhold in connection with any benefits under the Plan, including, but not
limited to, the withholding of appropriate sums from any amount otherwise
payable to the Participant (or his Beneficiary).  Each Participant, however, shall be responsible for the payment
of all individual tax liabilities relating to any such benefits.


 


15.9                           Unfunded
Status of Plan.  The Plan is
intended to constitute an “unfunded” plan of deferred compensation for
Participants.  Benefits payable hereunder
shall be payable out of the general assets of the Company, and no segregation
of any assets whatsoever for such benefits shall be made.  Notwithstanding any segregation of assets or
transfer to a grantor trust, with respect to any payments not yet made to a
Participant, nothing contained herein shall give any such Participant any
rights to assets that are greater than those of a general creditor of the
Company.


 


15.10                     Severability.  If any provision of this Plan is held
unenforceable, the remainder of the Plan shall continue in full force and
effect without regard to such unenforceable provision and shall be applied as
though the unenforceable provision were not contained in the Plan.


 


15.11                     Governing
Law.  Subject to ERISA, the Plan
shall be construed in accordance with and governed by the laws of the State of
California, without reference to the principles of conflict of laws.


 


15.12                     Headings.  Headings are inserted in this Plan for
convenience of reference only and are to be ignored in the construction of the
provisions of the Plan.


 


15.13                     Gender,
Singular and Plural.  All pronouns
and any variations thereof shall be deemed to refer to the masculine, feminine,
or neuter, as the identity of the person or persons may require.  As the context may require, the singular may
read as the plural and the plural as the singular.


 


15.14                     Notice.  Any notice or filing required or permitted
to be given to the Plan Administrator or the Committee under the Plan shall be
sufficient if in writing and hand delivered, or sent by registered or certified
mail, to the Human Resources Department, or to such other entity as the Plan
Administrator or the Committee may designate from time to time.  Any notice or filing required or permitted to
be given to a Participant under the Plan shall be sufficient if in writing and
hand delivered, or sent by registered or certified mail, to the Participant at
the Participant’s last address reflected on the payroll records of the Company,
or to such other address as the Participant may specify from time to time (any
such other address to be sent by the Participant in a written notice that
satisfies this Section 15.14 and which notice shall make express reference to
the purpose of the notice).    In either
case, any such notice shall be deemed given as to the date of delivery, or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification.


 


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Dated at Irvine, State of California, on June
22, 2004.


 


 


	
   

  	
  /s/ Stergios
  Theologides

  
	
   

  	
  (Signature
  of Representative of New Century Financial Corp.)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness:

  	
  /s/ Amy Gossin

  	
   

  
					



 


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