Exhibit 10.1


 


 


 


 


ADAPTEC


2005 DEFERRED
COMPENSATION PLAN


 


 


 


 


(Effective
January 1, 2005)


 


 


 


 


 













 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
  1.1

  	
  “Account”

  	
  1

  
	
  1.2

  	
  “Adaptec”

  	
  2

  
	
  1.3

  	
  “AIP”

  	
  2

  
	
  1.4

  	
  “Additional
  Contribution”

  	
  2

  
	
  1.5

  	
  “AIP
  Deferral Amount”

  	
  2

  
	
  1.6

  	
  “Benchmark
  Fund”

  	
  2

  
	
  1.7

  	
  “Beneficiary”

  	
  2

  
	
  1.8

  	
  “Benefit
  Distribution Election”

  	
  2

  
	
  1.9

  	
  “Benefits”

  	
  2

  
	
  1.10

  	
  “Board
  of Directors” or “Board”

  	
  2

  
	
  1.11

  	
  “Change
  of Control”

  	
  2

  
	
  1.12

  	
  “Code”

  	
  2

  
	
  1.13

  	
  “Deferred
  Compensation Committee”

  	
  2

  
	
  1.14

  	
  “Distribution
  Date”

  	
  3

  
	
  1.15

  	
  “Effective
  Date of Amended and Restated Plan”

  	
  3

  
	
  1.16

  	
  “Election”

  	
  3

  
	
  1.17

  	
  “Eligible
  Employee”

  	
  3

  
	
  1.18

  	
  “Employer”

  	
  3

  
	
  1.19

  	
  “Interest”

  	
  3

  
	
  1.20

  	
  “Interest
  Rate”

  	
  3

  
	
  1.21

  	
  “MIP”

  	
  3

  
	
  1.22

  	
  “MIP
  Deferral Amount “

  	
  3

  
	
  1.23

  	
  “Participant”

  	
  3

  
	
  1.24

  	
  “Plan”

  	
  3

  
	
  1.25

  	
  “Plan
  Administrator”

  	
  3

  
	
  1.26

  	
  “Plan
  Year”

  	
  3

  
	
  1.27

  	
  “Retitrement
  with the Consent of the Employer”

  	
  3

  
	
  1.28

  	
  “Salary”

  	
  4

  
	
  1.29

  	
  “Salary
  Deferral Amount”

  	
  4

  
	
  1.30

  	
  “Termination
  Event”

  	
  4

  
	
  1.31

  	
  “Total
  Disability”

  	
  4

  
	
  1.32

  	
  “Trust”

  	
  4

  
	
  1.33

  	
  “Trust
  Agreement”

  	
  4

  
	
  1.34

  	
  “Trustee”

  	
  4

  
	
  1.35

  	
  “VIP”

  	
  4

  
	
  1.36

  	
  “VIP
  Deferral Amount”

  	
  4

  
	
  ARTICLE II   ELIGIBILITY

  	
  5

  
	
  2.1

  	
  Eligibility

  	
  5

  
	
  2.2

  	
  Commencement
  of Participation

  	
  5

  
	
  2.3

  	
  Cessation
  of Participation

  	
  5

  
	
  2.4

  	
  Suspension
  of Participation.

  	
  5

  



 


 





















 


TABLE OF CONTENTS


(continued)


	
   

  	
   

  	
  Page

  
	
  ARTICLE
  III   DEFERRALS
  AND CONTRIBUTIONS

  	
  5

  
	
  3.1

  	
  Deferral Elections.

  	
  5

  
	
  3.2

  	
  Limitations on Deferrals

  	
  6

  
	
  3.3

  	
  Additional Contributions

  	
  7

  
	
  3.4

  	
  No Withdrawal

  	
  7

  
	
  ARTICLE IV   ACCOUNTS

  	
  7

  
	
  4.1

  	
  Account

  	
  7

  
	
  4.2

  	
  Interest
  Credited to Accounts at Least Monthly

  	
  7

  
	
  4.3

  	
  Determination
  of Interest Rate

  	
  7

  
	
  ARTICLE V   BENEFITS

  	
   

  
	
  5.1

  	
  Distributions.

  	
  8

  
	
  5.2

  	
  Methods
  of Distribution.

  	
  9

  
	
  5.3

  	
  Financial
  Hardship Withdrawal

  	
  10

  
	
  5.4

  	
  Limitation
  on Distributions to Covered Employees

  	
  10

  
	
  5.5

  	
  Tax
  Withholding

  	
  11

  
	
  ARTICLE VI   BENEFICIARIES

  	
   

  
	
  6.1

  	
  Designation
  of Beneficiary

  	
  11

  
	
  6.2

  	
  No
  Designated Beneficiary

  	
  11

  
	
  ARTICLE VII   TRUST
  OBLIGATION TO PAY BENEFITS

  	
   

  
	
  7.1

  	
  Deferrals
  Held in Trust

  	
  11

  
	
  7.2

  	
  Benefits
  Paid From Trust

  	
  11

  
	
  7.3

  	
  Trustee
  Investment Discretion

  	
  11

  
	
  7.4

  	
  No
  Secured Interest

  	
  12

  
	
  ARTICLE VIII   PLAN
  ADMINISTRATION, AMENDMENT AND TERMINATION

  	
   

  
	
  8.1

  	
  Plan
  Administration

  	
  12

  
	
  8.2

  	
  Decisions
  of the Deferred Compensation Committee

  	
  13

  
	
  8.3

  	
  Exclusive
  Benefit

  	
  13

  
	
  8.4

  	
  Plan
  Amendment

  	
  13

  
	
  8.5

  	
  Plan
  Termination

  	
  13

  
	
  8.6

  	
  Additional
  Power and Responsibility Following a Change of Control

  	
  13

  
	
  ARTICLE IX   MISCELLANEOUS

  	
   

  
	
  9.1

  	
  No
  Assignment

  	
  14

  
	
  9.2

  	
  Successors

  	
  14

  
	
  9.3

  	
  No
  Employment Agreement

  	
  14

  
	
  9.4

  	
  Attorneys’
  Fees

  	
  14

  
	
  9.5

  	
  Arbitration

  	
  14

  
	
  9.6

  	
  Governing
  Law

  	
  14

  
	
  9.7

  	
  Entire
  Agreement

  	
  14

  














 


ADAPTEC


2005 DEFERRED COMPENSATION PLAN


(Effective January 1, 2005)


 


Adaptec, Inc. has adopted this deferred compensation
plan, effective January 1, 2005, entitled the Adaptec 2005 Deferred
Compensation Plan (the “Plan”).  Adaptec
also maintains another deferred compensation plan, entitled the Adaptec
Deferred Compensation Plan, which was most recently amended and restated in its
entirety, effective July 21, 2004, and which was frozen effective December 31,
2004.


The purpose of the Plan is
to provide deferred compensation for a select group of management or highly
compensated employees of Adaptec and its subsidiaries.  The Plan is intended to be a nonqualified
deferred compensation plan.  Accordingly,
it is intended that the Plan be exempt from the requirements of Parts 2, 3 and 4
of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)
pursuant to Sections 201(2), 301(a)3) and 401(a)(1) of ERISA. This Plan is
intended to meet the applicable requirements of the American Jobs Protection
Act of 2004.


 


ARTICLE I


DEFINITIONS


 


Whenever used herein, the masculine pronoun shall be
deemed to include the feminine, and the singular to include the plural, unless
the context clearly indicates otherwise, and the following definitions shall
govern the Plan:


1.1           “Account and Sub Account” “Account”
means the book entry account established under the Plan for each Participant to
which the Participant’s Salary Deferral Amounts, AIP Deferral Amounts, VIP
Deferral Amounts, MIP Deferral Amounts, any Additional Contributions made by
the Employer pursuant to Article III, and the Interest with respect
thereto shall be credited.  Such Account
balance shall be reduced by any distributions made to the Participant or the
Participant’s Beneficiary(ies) and any charges that may be imposed on such
Account pursuant to the terms of the Plan.


In addition, a “Sub Account” may be established under
the Plan for each Participant who is (i) actively employed by the Employer, (ii)
receiving distributions pursuant to a Benefit Distribution Election, and (iii)
elects to make Salary deferrals and/or deferrals of amounts payable under the
AIP, VIP and/or MIP to this Plan or is receiving Additional Contributions.  Such “Sub Account” shall be a book entry
account established under the Plan for each such Participant to which the
Participant’s Salary Deferral Amounts, AIP Deferral Amounts, VIP Deferral
Amounts, MIP Deferral Amounts, any Additional Contributions made by the
Employer pursuant to Article III, and the Interest with respect thereto shall
be credited.  Such Sub Account balance
shall separately be reduced by any distributions made to the Participant or the



1





















Participant’s Beneficiary(ies) and any charges that
may be imposed on such Sub Account pursuant to the terms of the Plan.


Account and Sub Account may be referred to herein
collectively as “Accounts.”


1.2           “Adaptec” means Adaptec, Inc.,
a Delaware corporation and any successor organization thereto.


1.3           “AIP”  means the Adaptec Incentive Plan, as amended
from time to time.


1.4           “Additional Contribution” means
an Additional Contribution, contributed by the Employer on behalf of a
Participant pursuant to Article III.


1.5           “AIP Deferral Amount” means
the amount or percentage of bonus or incentive payments that an Eligible
Employee is entitled to under the AIP and elects to contribute to the Plan
pursuant to a valid Election form in accordance with the provisions of Article III.


1.6           “Benchmark Fund” means one or
more of the mutual funds or contracts selected by the Deferred Compensation
Committee pursuant to Section 4.3(a).


1.7           “Beneficiary” means one, some,
or all (as the context shall require) of those persons, trusts or other
entities designated by a Participant to receive the undistributed portion of
his/her Accounts following the Participant’s death.


1.8           “Benefit Distribution Election”
means the form of election, as prescribed by the Plan Administrator and as may
be modified from time to time, upon which a Participant shall designate his/her
Distribution Date.


1.9           “Benefits” means the amount(s)
credited to Participant’s Accounts.


1.10         “Board of Directors” or “Board”
means the Board of Directors of Adaptec.


1.11         “Change of Control” means (i) a “change
in the ownership of a corporation” (ii) a “change in effective control of a
corporation” or (iii) a “change in the ownership of a substantial portion of a
corporations’ assets” as such terms are defined in guidance issued by the
Secretary of the Treasury or Internal Revenue Service pursuant to Section
885(e) of the American Jobs Creation Act of 2004, including, Notice 2005-1, Section
B, Q&As 11-14.


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


1.13         “Deferred Compensation Committee”
means the committee appointed by the Board which shall function as the Plan
Administrator and which shall be composed of the individuals serving the
Company in the following positions:


(a)           Chief
Executive Officer of Adaptec


(b)           The
senior executive of Adaptec responsible for Human Resources


2





















(c)           Manager,
Employee Benefits


1.14         “Distribution Date” means the
date on which distribution of a Participant’s Benefits is made or commenced
pursuant to Article V.


1.15         “Effective Date” means January
1, 2005.


1.16         “Election” means the form on
which a Participant elects to make Salary deferrals and/or deferrals of amounts
payable under the AIP, VIP and/or MIP to this Plan.  Such Election shall be in a form prescribed
by the Plan Administrator as it may be modified from time to time.


1.17         “Eligible Employee” means an
employee of the Employer who is a member of a select group of management or
highly compensated employees as more particularly described in Article II
and who has been designated by the Plan Administrator, in the Plan
Administrator’s sole discretion, to be eligible to participate in the Plan and
shall also include every non-employee member of the Board of Directors.


1.18         “Employer” means Adaptec or a
subsidiary thereof that has adopted this Plan with the approval of Adaptec.


1.19          “Interest” means the investment
return or loss determined in accordance with Article IV, which shall be
credited to the Participant’s Accounts.


1.20         “Interest Rate” shall have the
meaning set forth in Section 4.3(c).


1.21         “MIP” means the Management
Incentive Plan adopted by the Company in July 2004, as it may be amended from
time to time.


1.22         “MIP Deferral Amount” means the
amount or percentage of bonus or incentive payments that an Eligible Employee
is entitled to under the MIP and elects to contribute to the Plan pursuant to a
valid Election form in accordance with the provisions of Article III.


1.23         “Participant” means an Eligible
Employee who has elected to participate in the Plan by executing an Election
form.  A Participant shall also mean an
Eligible Employee for whom Additional Contributions are made, regardless of
whether such Eligible Employee has executed an Election form.


1.24         “Plan” means this Adaptec 2005 Deferred
Compensation Plan, as it may be amended from time to time.


1.25         “Plan Administrator” means the
Deferred Compensation Committee selected to administer this Plan and to take
such other actions as may be specified herein.


1.26         “Plan Year” means the calendar
year.


1.27         “Retirement with the Consent of the
Employer” means a Participant’s voluntary termination of employment or
ceasing to serve as a non-employee member of the Board, if prior 


3





















to the
date employment is terminated or Board membership ceases the Participant
completed at least five years of service for the Employer, including service
for any subsidiary or former subsidiary either as an Employee or member of the
Board.


1.28         “Salary”  means the base salary paid by the Employer,
but shall not include any other form of compensation, whether taxable or non-taxable,
including, but not limited to, bonuses, commissions, overtime, incentive
payments, non-monetary awards and other forms of additional compensation.  In the case of a Participant who is a
non-employee member of the Board, “salary” shall mean all cash compensation for
service as a member of the Board.


1.29         “Salary Deferral Amount” means
the Salary Deferral Amount which the Participant elects to contribute to the
Plan pursuant to a valid Election form in accordance with the provisions of Article III.


1.30         “Termination Event” means the
termination of the Participant’s employment with the Employer or ceasing to be
a member of the Board for any reason, including termination or cessation in the
event of Total Disability but not including the Participant’s Retirement with
the Consent of the Employer.


1.31         “Total Disability” a Participant
shall be considered disabled if the Participant is, by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period, of not less than
twelve (12) months, receiving income replacement benefits for a period of not
less than three (3) months under an accident and health plan covering employees
of the Participant’s Employer.


1.32         “Trust” means the legal entity
created by the Trust Agreement.


1.33         “Trust Agreement” means that
trust agreement entered into between Adaptec and Putnam Fiduciary Trust
Company, effective April 1, 2002, as amended effective January 1, 2005, as
it may subsequently be amended from time to time.


1.34         “Trustee” means the original
Trustee(s) named in the Trust Agreement and any duly appointed successor(s)
thereto.


1.35         “VIP” means the Variable
Incentive Plan maintained by Adaptec, as it may be amended from time to time.


1.36         “VIP Deferral Amount” means the amount
or percentage of bonus or incentive payments that an Eligible Employee is
entitled to under the VIP and elects to contribute to the Plan pursuant to a
valid Election form in accordance with the provisions of Article III.


4





















ARTICLE II


ELIGIBILITY


 


2.1           Eligibility.  Eligibility for participation in the Plan
shall be limited to non-employee members of the Board and to key management or
highly compensated employees of the Employer who are selected by the Plan
Administrator, in its sole discretion, to participate in the Plan.  Individuals who are in this select group
shall be notified as to their eligibility to participate in the Plan.  For purposes of the Plan, the phrase “select
group of management or highly compensated employees” shall include those
individuals employed as directors and those individuals employed in positions
at a higher level, all as determined by the Plan Administrator.


2.2           Commencement of Participation.
 An Eligible Employee may begin
participation in the Plan upon the Eligible Employee’s submission of a valid
Election form pursuant to Article III. 
In order to commence Salary deferrals and/or deferrals of amounts
payable under the AIP, VIP and/or MIP, the Election form must be returned to
the Plan Administrator within thirty (30) days of the date an individual first
becomes an Eligible Employee; otherwise the Election form must be returned to
the Plan Administrator in advance of the next subsequent Plan Year, in
accordance with rules and procedures established by the Plan Administrator.


2.3           Cessation of Participation.  Active participation in the Plan shall end
when a Participant’s employment terminates for any reason.  No contributions to the Plan shall be made
with respect to compensation paid after such termination date.  Upon termination of employment, a Participant
shall remain an inactive participant in the Plan until all of the Benefits to
which he or she is entitled under this Plan have been paid in full.


2.4           Suspension of Participation.  A Participant who is employed by a subsidiary
which has not adopted the Plan shall be a suspended Participant.  No contributions to the Plan shall be made on
behalf of a suspended Participant. 
Except as otherwise provided in this Article II, a suspended Participant
shall continue to participate in the Plan in accordance with its terms.


 


 


ARTICLE III


DEFERRALS AND
CONTRIBUTIONS


 


3.1           Deferral Elections Generally.  Each Participant must complete a deferral
Election in the form and manner specified by the Committee for each Plan Year
with respect to which he or she wishes to defer all or part of his or her
Salary or payment under the AIP, VIP and/or MIP.  The Salary Deferral Amount, AIP Deferral
Amount, VIP Deferral Amount and/or MIP Deferral Amount shall not be paid to the
Participant, but shall be withheld and shall be credited to the Participant’s
Account or Sub Account (as appropriate). 
To be effective, each such deferral Election must satisfy the following
rules:


(a)           The
deferral Election form must be signed and dated by the Participant, specify the
deferral amount or percentage and comply with such other rules and procedures
established by the Plan Administrator.


5





















(i)            A Participant who is a non-employee
member of the Board may elect to reduce his or her Salary by 50% or 100% as set
forth in a written Election filed with the Plan Administrator.


(b)           All
deferral Elections are irrevocable throughout the Plan Year for which they are
made.  An Election to stop deferrals or
to change the Salary Deferral Amount, AIP Deferral Amount, VIP Deferral Amount and/or
MIP Deferral Amount will take effect on the first day of the Plan Year that is
at least 20 days (or such lesser number of days as the Plan Administrator may
specify) after the date the new valid Election form is filed with the Plan
Administrator.  Notwithstanding the
foregoing, in accordance with Notice 2005-1, a Participant may either terminate
participation in the Plan or cancel an Election to defer Salary or payments
under the AIP, VIP, and/or MIP which are subject to Code Section 409A, provided
such termination or cancellation is filed on or before December 20, 2005, in
accordance with the rules and procedures established by the Plan Administrator.  The amounts subject to any such termination
or cancellation shall be includible in income of the Participant in calendar
year 2005 or, if later, the Participant’s taxable year in which the amount is
earned and vested (as defined in Notice 2005-1, Q&A 16).


(c)           The
deferral Election must generally be received by the Plan Administrator before
the beginning of the Plan Year in which the Salary, AIP, VIP and/or MIP is
earned; provided, however, in the case of a newly-eligible Eligible Employee,
the deferral Election form (i) must be received by the Plan Administrator
within thirty (30) days of the date on which the Eligible Employee becomes
eligible, and (ii) will be effective with respect to Salary, AIP, VIP
and/or MIP earned after the Election.


3.2           Limitations on Deferrals.  A Participant’s Salary, AIP, VIP, and/or MIP
Deferral Amount shall be limited as follows:


(a)           The
Salary Deferral Amount, AIP Deferral Amount, VIP Deferral, and/or MIP Deferral
Amount elected by the Participant shall be reduced by the amount(s), if any,
which may be necessary:


(i)            To
satisfy all applicable income and employment tax withholding and FICA
contributions;


(ii)           To
pay all contributions elected by the Participant pursuant to applicable Adaptec
health, welfare and fringe benefit programs; and


(iii)          To
satisfy all garnishments or other amounts required to be withheld by applicable
law or court order.


(b)           Any
withholding or Salary deferral elections made under an Employer sponsored
401(k) plan shall be determined based on the Participant’s compensation after
reduction for the Salary Deferral Amount, AIP Deferral Amount, VIP Deferral
Amount, and/or MIP Deferral Amount contributed to this Plan.


6





















3.3           Additional Contributions.  Additional Contributions may be credited to a
Participant’s Account or Sub Account (as appropriate) in such amounts and at
such times as the Employer may, in its sole discretion, determine and
communicate to the Participant.  The
Employer shall be under no obligation to continue to credit Additional
Contributions and may discontinue or change the amount or method of calculating
the amount of such Additional Contributions at any time.


3.4           No Withdrawal.  Except as provided in Section 5.3 below,
amounts credited to a Participant’s Accounts may not be withdrawn by a
Participant and shall be paid only in accordance with the provisions of this
Plan.


 


ARTICLE IV


ACCOUNTS


4.1           Account and/or Sub Account.  An Account shall be established and
maintained for each Participant.  The
Participant’s Account shall be credited with the Participant’s Salary Deferral
Amount, AIP Deferral Amount, VIP Deferral Amount, MIP Deferral Amount and
Additional Contributions, if any, made on behalf of each Participant.  The Participant’s Account shall be credited
(debited) with the applicable Interest, as set forth in Section 4.2.  The Participant’s Account shall be reduced by
distributions therefrom and any charges which may be imposed on the Account
pursuant to the terms of the Plan.


A “Sub Account” may be established under the Plan for
each Participant who is (i) actively employed by the Employer, (ii) receiving
distributions pursuant to a Benefit Distribution Election, and (iii) elects to
make Salary deferrals and/or deferrals of amounts payable under the AIP, VIP
and/or MIP to this Plan or is receiving Additional Contributions.  The Participant’s Sub Account shall be
credited (debited) with all applicable Interest, as set forth in Section
4.2.  The Participant’s Sub Account shall
separately be reduced by any distributions therefrom and any charges that may
be imposed on such Sub Account pursuant to the terms of the Plan.


4.2           Interest Credited to Accounts at
Least Monthly.  Each Account or Sub
Account (as appropriate) shall be credited (debited) monthly, or more
frequently as the Committee may specify, in an amount equal to the Account or
Sub Account (as appropriate) balance on the last day of the prior accounting
period multiplied by the Interest Rate.


4.3           Determination of Interest Rate.


(a)           The
Deferred Compensation Committee shall designate the particular funds or
contracts which shall constitute the Benchmark Funds, and may, in its sole
discretion, change or add to the Benchmark Funds.


(b)           Each
Participant may select among the Benchmark Funds and specify the manner in
which his or her Accounts shall be deemed to be invested, solely for purposes
of determining the Participant’s Interest Rate. 
The Deferred Compensation Committee shall establish and communicate the
rules, procedures and deadlines for making and changing 


7





















Benchmark
Fund selections.  The Employer shall have
no obligation to acquire investments corresponding to the Participant’s
Benchmark Fund selections.


(c)           The
Interest Rate is the investment return, net of administrative fees and
investment management fees and other applicable fees or charges for a specified
accounting period, of the Benchmark Fund(s) designated by Participant and other
applicable fees or charges.  The Interest
Rate may be negative if the applicable Benchmark Fund(s) sustained a loss
during the specified accounting period.


 


ARTICLE V


BENEFITS


5.1           Distributions.


(a)           Timing
of Distribution.  The amounts
credited to a Participant’s Account or Sub Account shall be paid (or payment
shall commence) within a reasonable time after:


(i)            If
the Participant is currently employed by the Employer the Benefit Distribution
Date, as defined in Section 5.1(b), on which the Participant elected to receive
a distribution of Benefits from his/her Account or Sub Account; or


(ii)           If
the Participant has retired with the Consent of the Employer, the Benefit
Distribution Date, as defined in Article 5.1(b), on which the Participant
elected to receive a distribution of Benefit, or, if no such Benefit
Distribution Election is then in effect, six (6) months (or as soon as
administratively feasible thereafter) after the date of such Retirement with
the Consent of Employer; or


(iii)          If
the Participant has a Termination Event, six (6) months (or as soon as
administratively feasible thereafter) after the date of such Termination Event;


(iv)          The
date of the death of the Participant;


(v)           A
Change of Control Event.


(b)           Benefit
Distribution Date.


(i)            One-Year
Advance Election.  A Participant may
elect a Distribution Date by filing a Benefit Distribution Election form at the
time of the deferral Election form in such manner as the Plan Administrator shall
specify.  Such Benefit Distribution
Election form shall specify a Distribution Date which shall be at least one
year from the date the Benefit Distribution Election is delivered to the Plan
Administrator.  Except as otherwise
provided in this Article V, the Benefit Distribution Election shall apply to
all amounts credited to a Participant’s Account on the Distribution Date
designated therein, or to such lesser dollar amount as may be specified in the
Benefit Distribution Election form.  A
separate Benefit Distribution Election form must be made with respect to any
Sub Account.  Except as otherwise 


8





















provided
in this Article V, a Benefit Distribution Election made with respect to a
Participant’s Account shall not apply to the Participant’s Sub Account.


(ii)           Revocation
or Amendment of Benefit Distribution Election.  A Participant may revoke and/or amend a
Benefit Distribution Election previously made only in accordance with the rules
under Code section 409(A).  Generally, a
subsequent election pursuant to this Section 5.1(b)(ii):  (A) cannot take effect for twelve (12)
months, (B) must occur at least twelve (12) months before the first
scheduled payment under a payment at a specified Distribution Date elected pursuant
to Section 5.1(b)(i), and (C) must defer a previously elected Distribution
Date at least five (5) additional years.


(c)           Termination
Event.  Notwithstanding any prior
Benefit Distribution Election, if the Participant has a Termination Event other
then a Retirement with the Consent of the Employer, distribution of the
Participant’s Accounts shall commence six (6) months (or as soon as
administratively feasible thereafter) after the Termination Event.


(d)           Change
of Control Event.  In the event of a
Change of Control, all Accounts shall be distributed as soon as
administratively feasible after the Change of Control.


5.2           Methods of Distribution.


(a)           Method
of Distribution While Actively Employed or Following a Retirement with the
Consent of the Company.  If a
distribution of the Participant’s Benefits commences while he or she is
actively employed by the Employer pursuant to the Participant’s Benefit
Distribution Election or because the Participant’s termination of employment
satisfies the requirements for Retirement with the Consent of the Company, then
such Participant’s Accounts shall be paid in one of the following methods
specified in his or her most recent valid Election form filed with the Plan
Administrator:


(i)            a
single lump sum payment;


(ii)           two
payments, on the dates and in the amounts specified in the Participant’s
Election;


(iii)          in
twenty (20) substantially equal quarterly payments; or


(iv)          in
forty (40) substantially equal quarterly payments.


For purposes of this
provision, substantially equal payments shall be determined by dividing the
Participant’s Account balance by the number of payments remaining.


(b)           Method
of Distribution Following a Termination Event or Death.  If a distribution of Benefits is made on
account of a Termination Event or the death of a Participant, the Participant’s
Accounts shall be distributed in a lump sum payment.


(c)           Method
of Distribution Following a Change of Control.  Generally, all Accounts shall be paid in a
lump sum payment following a Change of Control. 
Notwithstanding 


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the
foregoing, if a lump sum payment will result in an “excess parachute payment”,
as that term is defined in the Code, the Plan Administrator, in its sole
discretion, may determine that payment shall be made by some other method.


5.3           Financial Hardship Withdrawal.  With the consent of the Plan Administrator, a
Participant may withdraw up to one hundred percent (100%) of the amount
credited to his or her Accounts as may be required to meet a sudden
unforeseeable financial emergency of the Participant in accordance with Code
Section 409A.  Such hardship distribution
shall be subject to the following provisions.


(a)           The
hardship withdrawal must be necessary to satisfy the unforeseeable emergency
and no more may be withdrawn from the Participant’s Accounts than is required
to relieve the financial need after taking into account other resources that
are reasonably available to the Participant for this purpose.


(b)           The
Participant must certify that the financial need cannot be relieved:  (i) through reimbursement or
compensation by insurance or otherwise; (ii) by liquidation of the
Participant’s assets, to the extent such liquidation would not itself cause an
immediate and heavy financial need; (iii) by discontinuing the Participant’s Salary
deferrals and deferrals of amounts payable under the AIP, VIP and MIP; or (iv)
by borrowing from commercial sources on reasonable commercial terms.


(c)           An
unforeseeable financial emergency is a severe financial hardship to Participant
resulting from a sudden and unexpected illness or accident of Participant or of
a dependent of Participant (as defined in section 152(a) of the Code), loss of
Participant’s property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
Participant.  Neither the need to pay
tuition expenses on behalf of the Participant or the Participant’s spouse or
children nor the desire to purchase a home shall be considered an unforeseeable
emergency.


(d)           The
Plan Administrator, in its sole discretion, shall determine if there is an
unforeseeable financial emergency, if the Participant has other resources to
satisfy such emergency and the amount of the hardship withdrawal that is
required to alleviate the Participant’s financial hardship.


(e)           A
Participant shall be prohibited from making any further Salary deferrals or
deferrals of amounts payable under the AIP, VIP or MIP and the Employer shall
not make any Additional Contributions pursuant to the Plan for the remainder of
the Plan Year in which a financial hardship withdrawal occurs.


5.4           Limitation on Distributions to
Covered Employees.  Notwithstanding
any other provision of this Article V, in the event that the Participant is a “covered
employee” as defined in section 162(m)(3) of the Code, or would be a covered
employee if the Benefits were distributed in accordance with his or her Benefit
Distribution Election or hardship, the maximum amount which may be distributed
from the Participant’s Accounts, in any Plan Year, shall not exceed one million
dollars ($1,000,000) less the amount of compensation paid to the Participant in
such Plan 


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Year
which is not “performance-based” (as defined in Code section 162(m)(4)(C)),
which amount shall be reasonably determined by the Plan Administrator at the
time of the proposed distribution. Any amount which is not distributed to the
Participant in a Plan Year as a result of this limitation shall be distributed
to the Participant in the next Plan Year, subject to compliance with the
foregoing limitation set forth in this Section 5.4.


5.5           Tax Withholding.  All payments under this Article V shall
be subject to all applicable withholding for state and federal income tax and
to any other federal, state or local tax which may be applicable to such
payments.


 


ARTICLE VI


BENEFICIARIES


6.1           Designation of Beneficiary.  The Participant shall have the right to
designate on such form as may be prescribed by the Plan Administrator, one or
more Beneficiaries to receive any Benefits due under Article V which may
remain unpaid on the date of the Participant’s death.  The Participant shall have the right at any
time to revoke such designation and to substitute one or more other
Beneficiaries in accordance with the rules and procedures established by the
Plan Administrator.


6.2           No Designated Beneficiary.  If, upon the death of the Participant, there
is no valid Beneficiary designation, the Beneficiary shall be the Participant’s
surviving spouse.  In the event there is
no surviving spouse, then the Participant’s Beneficiary shall be the
Participant’s estate.


 


ARTICLE VII


TRUST
OBLIGATION TO PAY BENEFITS


7.1           Deferrals Held in Trust.  An amount equal to the Salary Deferral
Amount, AIP Deferral Amount, VIP Deferral Amount, MIP Deferral Amount and
Additional Contributions, if any, made by or on behalf of the Participant shall
be transferred to the Trustee within thirty (30) days after the applicable pay
period to be held pursuant to the terms of the Trust Agreement.


7.2           Benefits Paid From Trust.  All benefits payable to a Participant
hereunder shall be paid by the Trustee to the extent of the assets held in the
Trust by the Trustee, and by the Employer to the extent the assets in the Trust
are insufficient to pay a Participant’s Benefits as provided under this Plan.


7.3           Trustee Investment Discretion.  The Benchmark Funds established pursuant to
Section 4.3 shall be for the sole purpose of determining the Interest and
neither the Trustee nor the Employer shall have any obligation to invest the
Participant’s Accounts in the deemed investment options or in any other
investment.


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7.4           No Secured Interest.  Participants and their Beneficiaries, heirs,
successors and  assigns shall have no
legal or equitable rights, claims or interest in any specific property or
assets of the Employer or the Trust.  The
assets of the Trust shall be subject to the claims of creditors of the
Employer.  The Employer’s obligation
under the Plan shall be merely that of an unfunded and unsecured promise of the
Employer and except as provided in the Trust Agreement, the Participant (or the
Participant’s Beneficiary) shall be a general unsecured creditor of the
Employer with respect to the payment of Benefits under this Plan.


 


ARTICLE VIII


PLAN
ADMINISTRATION, AMENDMENT AND TERMINATION


8.1           Plan Administration.  As Plan Administrator, the Deferred
Compensation Committee shall have complete control of the administration of the
Plan herein set forth with all powers necessary to enable it properly to carry
out its duties in that respect.  Not in
limitation, but in amplification of the foregoing, the Deferred Compensation
Committee shall have the power and authority to:


(a)           Construe
the Plan and to determine all questions that shall arise as to interpretations
of the Plan’s provisions, including determination of Eligible Employees,
amounts of credits, allocation of assets, method of payment, and participation
and benefits under the terms of the Plan;


(b)           Establish
reasonable rules and procedures which shall be applied in a uniform and
nondiscriminatory manner with respect to Elections and Benefit Distribution
Elections;


(c)           Establish
the rules and procedures by which the Plan will operate;


(d)           Construe
and interpret the Plan and Trust Agreement and adopt rules for Plan
administration that are consistent with the terms of the Plan documents;


(e)           Compile
and maintain all records it determines to be necessary, appropriate or
convenient in connection with the administration of the Plan;


(f)            Adopt
amendments to the Plan document and/or the Trust Agreement which are deemed
necessary or desirable to facilitate administration of the Plan and/or to bring
these documents into compliance with all applicable laws and regulations,
provided that the Deferred Compensation Committee shall not have the authority
to adopt any Plan amendment that will result in increased Employer
contributions or substantially increased administrative costs unless such
amendment is contingent upon ratification by the Board before becoming
effective;


(g)           Employ
such persons or organizations to render service or perform services with
respect to the administrative responsibilities of the Deferred Compensation 


12





















Committee under the Plan
as the Deferred Compensation Committee determines to be necessary and
appropriate, including but not limited to actuaries, attorneys, accountants,
and benefit, financial and administrative consultants;


(h)           Select,
review and retain or change the Benchmark Funds used to determine the Interest
Rate; in its sole discretion, the Committee may delegate the power, authority
and responsibility set forth in this Section 8.1(h) to the Investment
Committee appointed pursuant to the Adaptec, Inc. Savings and Retirement Plan;


(i)            Direct
the investment of assets of the Trust; and


(j)            Direct
the Trustee and review the performance of the Trustee with respect the Trustee’s
duties, responsibilities and obligations under the Plan and Trust Agreement.


8.2           Decisions of the Deferred
Compensation Committee.  Decisions of
the Deferred Compensation Committee made in good faith upon any matter within
the scope of its authority shall be final, conclusive and binding upon all
persons, including Participants and their legal representatives or
Beneficiaries.


8.3           Exclusive Benefit.  The Deferred Compensation Committee shall
perform its duties under the Plan solely in the interest of the Participants
and their Beneficiaries.  Any discretion
granted to the Deferred Compensation Committee shall be exercised in accordance
with rules and policies established by the Deferred Compensation Committee.


8.4           Plan Amendment.  This Plan may be amended by Adaptec at any
time in its sole discretion upon an action of at least two-thirds (2/3) of the
members of the Deferred Compensation Committee; provided, however, that no
amendment may be made which would alter the nature of a deferral Election or
Benefit Distribution Election or which would reduce the amount credited to a
Participant’s Accounts on the date of such amendment; and provided further that
no amendment which would affect the Trustee’s obligation may be made without
the Trustee’s consent.


8.5           Plan Termination.  Adaptec, by action of its Board and with the
approval of two-thirds (2/3) of the members of the Deferred Compensation
Committee reserves the right to terminate the Plan in its entirety at any time
upon fifteen (15) days notice to the Participants.  If the Plan is terminated, all benefits shall
be paid as set forth in Sections 5.1 and/or 5.2.  Any amounts remaining in the Trust after all
benefits have been paid shall revert to the Employer.


8.6           Additional Power and
Responsibility Following a Change of Control.  In the event of a Change of Control, the Plan
may be amended and/or terminated only by a majority vote of the Deferred
Compensation Committee.  Additionally,
the successor to Adaptec shall have no right to dismiss any member of the
Deferred Compensation Committee or add members to the Deferred Compensation
Committee without the express consent of a majority of the Deferred
Compensation Committee members.  Such
limitations on the rights of any successor corporation or business entity shall
take effect on the date of the Change of Control and shall remain in effect 


13





















for a period of twelve (12) months following the Change of Control
unless a majority of the members of the Deferred Compensation Committee agrees
to withdraw these limitations earlier.


 


ARTICLE IX


MISCELLANEOUS


9.1           No Assignment.  The right of any Participant, any
Beneficiary, or any other person to the payment of any benefits under this Plan
shall not be assigned, transferred, pledged or encumbered.


9.2           Successors.  This Plan shall be binding upon and inure to
the benefit of the Employer, its successors and assigns and the Participant and
his or her heirs, executors, administrators and legal representatives.


9.3           No Employment Agreement.  Nothing contained herein shall be construed
as conferring upon any Participant the right to continue in the employ of the
Employer as an employee.


9.4           Attorneys’ Fees.  If the Employer, the Participant, any
Beneficiary, the Trustee and/or a successor in interest to any of the
foregoing, brings legal action to enforce any of the provisions of this Plan,
the prevailing party in such legal action shall be reimbursed by the other
party, the prevailing party’s costs of such legal action including, without
limitation, reasonable fees of attorneys, accountants and similar advisors and
expert witnesses.


9.5           Arbitration.  Any dispute or claim relating to or arising
out of this Plan shall be fully and finally resolved by binding arbitration
conducted by the American Arbitration Association in Alameda County,
California.


9.6           Governing Law.  This Plan shall be construed in accordance
with and governed by the laws of the State of California.


9.7           Entire Agreement.  This Plan constitutes the entire
understanding and agreement with respect to the subject matter contained
herein, and there are no agreements, understandings, restrictions,
representations or warranties among any Participant and the Employer other than
those as set forth or provided for herein.


IN WITNESS WHEREOF, the undersigned certifies that the
foregoing is the Adaptec 2005 Deferred Compensation Plan, effective as of
January 1, 2005.


	
   

  	
  ADAPTEC, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:  August
  25, 2005

  	
  By: /s/ Shirley B. Olerich

  
	
   

  	
  Title: Vice President, Human Resources

  



 


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