Document:

EX-10.32

Exhibit 10.32

Officers’ Deferred Compensation Plan

of

Hudson City Bancorp, Inc.

 

Amended and Restated on December 31, 2008

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Article I Definitions
	 	 	1	 
	 
	Section 1.1 Acceleration Event
	 	 	1	 
	Section 1.2 Administrator
	 	 	1	 
	Section 1.3 Annual Incentive Compensation means an annual incentive award payable
pursuant to an Annual Incentive Plan
	 	 	1	 
	Section 1.4 Annual Incentive Plan means the Executive Officers’ Annual Incentive
Plan of Hudson City Bancorp, Inc. or the Annual Incentive Plan for Non-Executive
Officers of Hudson City Bancorp, Inc.
	 	 	1	 
	Section 1.5 Base Salary means the annual base salary payable to an Eligible Officer
	 	 	1	 
	Section 1.6 Beneficiary means the person or persons designated by a Participant
under section 6.3 of the Plan
	 	 	1	 
	Section 1.7 Board
	 	 	1	 
	Section 1.8 Code
	 	 	1	 
	Section 1.9 Company
	 	 	1	 
	Section 1.10 Change in Control Event
	 	 	1	 
	Section 1.11 Committee
	 	 	1	 
	Section 1.12 Compensation means, during any period, the compensation payable to an
Eligible Officer by any Participating Company that is reportable to the Internal
Revenue Service as compensation for such period on Form W-2. Compensation shall
include Base Salary, Annual Incentive Compensation, Option-Related Compensation and
Equity Compensation. Compensation shall not include amounts that become payable
under this Plan
	 	 	2	 
	Section 1.13 Deferred Compensation means the amount of Compensation that a
Participant elects to defer pursuant to the terms of the Plan
	 	 	2	 
	Section 1.14 Disability
	 	 	2	 
	Section 1.15 Effective Date
	 	 	2	 
	Section 1.16 Eligible Officer means an officer of any of the Participating Companies
who is at the level of senior vice president or higher
	 	 	2	 
	Section 1.17 Equity Compensation means, with respect to any Eligible Officer, that
portion of the Eligible Officer’s Compensation, other than Option-Related
Compensation, that is paid to him in Shares or the amount of which is based upon the
value, or increase in value, of a Share
	 	 	2	 
	Section 1.18 Fair Market Value
	 	 	2	 
	Section 1.19 Investment Benchmark
	 	 	2	 
	Section 1.20 ISO Share means a Share acquired upon exercise of an incentive stock
option (within the meaning of section 422 of the Code)
	 	 	3	 
	Section 1.21 Memorandum Account
	 	 	3	 
	Section 1.22 Memorandum Subaccount
	 	 	3	 
	Section 1.23 Option-Related Compensation means, with respect to an option to
purchase Shares that is exercised by paying the entire exercise price therefore by
actual or constructive delivery of Previously Acquired Shares, a number of Shares
equal to the excess of (a) the total number of Shares as to which the option is
exercised, over (b) the number of Shares actually or constructively delivered in
	 	 	 	 

i

 

	 	 	 	 	 
	payment of the exercise price and with respect to a stock appreciation right, the
compensation that result from exercise of the stock appreciation right
	 	 	3	 
	Section 1.24 Participant
	 	 	3	 
	Section 1.25 Participating Company
	 	 	3	 
	Section 1.26 Performance-Based Compensation means “performance-based compensation”
within the meaning of section 409A of the Code and the regulations and other
guidance issued thereunder
	 	 	3	 
	Section 1.27 Performance-Based Compensation Deferral Election Period means, with
respect to any Performance-Based Compensation payable for any Service Period, the
portion of the Service Period prior to the earlier of (a) the date that is one day
less than six (6) months before the end of the Service Period to which such
Performance-Based Compensation relates and (b) the date that such Performance-Based
Compensation becomes both substantially certain to be paid and readily
ascertainable; provided, however, that the Participant entitled to such
Performance-Based Compensation performs services continuously from no later than the
date on which the performance criteria are established through the date the initial
deferral election is made
	 	 	3	 
	Section 1.28 Phantom Share means a unit of value that, on any relevant date,
corresponds to the Fair Market Value of a Share
	 	 	3	 
	Section 1.29 Plan
	 	 	4	 
	Section 1.30 Previously Acquired Share
	 	 	4	 
	Section 1.31 Share
	 	 	4	 
	Section 1.32 Separation from Service means, with respect to a Participant, the
Participant’s separation from service within the meaning of section 409A of the Code
and the regulations and other guidance issued thereunder
	 	 	4	 
	Section 1.33 Service Period means any period of at least one (1) year in respect of
which Performance-Based Compensation is payable
	 	 	4	 
	Section 1.34 Service Recipient
	 	 	4	 
	Section 1.35 Unforeseeable Emergency
	 	 	4	 
	 
	Article II Participation
	 	 	4	 
	 
	Section 2.1 Election to Participate
	 	 	4	 
	Section 2.2 Election to Defer Base Salary
	 	 	5	 
	Section 2.3 Election to Defer Annual Incentive Compensation
	 	 	5	 
	Section 2.4 Election to Defer Equity Compensation
	 	 	6	 
	Section 2.5 Election to Defer Option-Related Compensation
	 	 	7	 
	Section 2.6 Changes in Participation
	 	 	7	 
	 
	Article III Accounting for Deferred Amounts
	 	 	9	 
	 
	Section 3.1 In General
	 	 	9	 
	Section 3.2 Adjustments to Memorandum Accounts
	 	 	9	 
	Section 3.3 Vesting
	 	 	11	 
	Section 3.4 Investment in Phantom Shares
	 	 	11	 
	 
	Article IV Trust
	 	 	11	 
	 
	Section 4.1 Establishment of Trust
	 	 	11	 
	Section 4.2 Contributions to Trust; Investments
	 	 	11	 

ii

 

	 	 	 	 	 
	Section 4.3 Unfunded Character of Plan
	 	 	12	 
	 
	Article V Life Insurance
	 	 	12	 
	 
	Section 5.1 Authority to Purchase Life Insurance
	 	 	12	 
	Section 5.2 Cooperation to Effect Purchases
	 	 	12	 
	Section 5.3 Ownership of Policies
	 	 	12	 
	Section 5.4 Effect of Termination of Participation
	 	 	13	 
	 
	Article VI Distributions
	 	 	13	 
	 
	Section 6.1 Early Distributions
	 	 	13	 
	Section 6.2 Scheduled Distributions to Participants
	 	 	15	 
	Section 6.3 Distributions to Beneficiaries
	 	 	16	 
	Section 6.4 Mandatory Cashout of Small Balances
	 	 	17	 
	Section 6.5 Restrictions on Payments to Specified Employees
	 	 	17	 
	Section 6.6 One-Time Change of Elections
	 	 	17	 
	 
	Article VII Administration
	 	 	17	 
	 
	Section 7.1 Administrator
	 	 	17	 
	Section 7.2 Committee Responsibilities
	 	 	18	 
	Section 7.3 Claims Procedure
	 	 	19	 
	Section 7.4 Claims Review Procedure
	 	 	19	 
	Section 7.5 Other Administrative Provisions
	 	 	20	 
	 
	Article VIII Amendment And Termination
	 	 	21	 
	 
	Section 8.1 Amendment by the Company
	 	 	21	 
	Section 8.2 Termination
	 	 	21	 
	Section 8.3 Amendment or Termination by Other Companies
	 	 	21	 
	 
	Article IX Miscellaneous Provisions
	 	 	22	 
	 
	Section 9.1 Notice and Election
	 	 	22	 
	Section 9.2 Construction and Language
	 	 	22	 
	Section 9.3 Headings
	 	 	22	 
	Section 9.4 Non-Alienation of Benefits
	 	 	22	 
	Section 9.5 Indemnification
	 	 	23	 
	Section 9.6 Severability
	 	 	23	 
	Section 9.7 Waiver
	 	 	23	 
	Section 9.8 Governing Law
	 	 	23	 
	Section 9.9 Withholding
	 	 	23	 
	Section 9.10 No Deposit Account
	 	 	24	 
	Section 9.11 Rights of Participants
	 	 	24	 
	Section 9.12 Status of Plan under ERISA
	 	 	24	 
	Section 9.13 Successors and Assigns
	 	 	24	 
	Section 9.14 Non-dilution Provisions
	 	 	24	 
	Section 9.15 Compliance with Section 409A of the Code
	 	 	25	 

iii

 

Officers’ Deferred Compensation Plan

of

Hudson City Bancorp, Inc.

Article I

Definitions

The following definitions shall apply for the purposes of this Plan unless a different meaning is
clearly indicated by the context:

          Section 1.1
Acceleration Event means, with respect to a Participant, any of the events
described in section 6.1 on the basis of which the Administrator may permit acceleration of the
payment of the balance credited to the Participant’s Memorandum Account.

          Section 1.2 Administrator means any person, committee, corporation or organization
appointed by the Committee to perform the responsibilities assigned to the Administrator hereunder.

          Section 1.3 Annual Incentive Compensation means an annual incentive award payable
pursuant to an Annual Incentive Plan.

          Section 1.4 Annual Incentive Plan means the Executive Officers’ Annual Incentive Plan
of Hudson City Bancorp, Inc. or the Annual Incentive Plan for Non-Executive Officers of Hudson City
Bancorp, Inc.

          Section 1.5 Base Salary means the annual base salary payable to an Eligible Officer.

          Section 1.6 Beneficiary means the person or persons designated by a Participant under
section 6.3 of the Plan.

          Section 1.7 Board means the Board of Directors of the Company.

          Section 1.8 Code means the Internal Revenue Code of 1986 (including the corresponding
provisions of any succeeding law).

          Section 1.9 Company means Hudson City Bancorp, Inc. or any successor thereto.

          Section 1.10
Change
in Control Event means, with respect to a Participant: (a) a change
in ownership of the Participant’s Service Recipient; (b) a change in effective control of the
Participant’s Service Recipient; or (c) a change in the ownership of a substantial portion of the
assets of the Participant’s Service Recipient. The existence of a Change in Control Event shall be
determined by the Administrator in accordance with section 409A of the Code and the regulations and
other guidance issued thereunder.

          Section 1.11 Committee means the Compensation Committee of the Board.

 

 

          Section 1.12 Compensation means, during any period, the compensation payable to an
Eligible Officer by any Participating Company that is reportable to the Internal Revenue Service as
compensation for such period on Form W-2. Compensation shall include Base Salary, Annual Incentive
Compensation, Option-Related Compensation and Equity Compensation. Compensation shall not include
amounts that become payable under this Plan.

          Section 1.13 Deferred Compensation means the amount of Compensation that a Participant
elects to defer pursuant to the terms of the Plan.

          Section 1.14 Disability means, with respect to a Participant, (a) any medically
determinable physical or mental impairment which can be expected to result in death or to last for
a continuous period of at least twelve (12) months and as a result of which either: (i) the
Participant is unable to engage in any substantial gainful activity or (ii) the Participant has
been receiving income replacement benefits for a period of at least three (3) months under an
accident and health plan covering employees of the Participant’s employer or (b) a determination by
the Social Security Administration of total disability. The existence of a Disability shall be
determined by the Administrator in accordance with section 409A of the Code and the regulations and
other guidance issued thereunder.

          Section 1.15 Effective Date means December 31, 2008.

          Section 1.16 Eligible Officer means an officer of any of the Participating Companies
who is at the level of senior vice president or higher.

          Section 1.17 Equity Compensation means, with respect to any Eligible Officer, that
portion of the Eligible Officer’s Compensation, other than Option-Related Compensation, that is
paid to him in Shares or the amount of which is based upon the value, or increase in value, of a
Share.

          Section 1.18 Fair Market Value means, with respect to a Share on a specified date:

          (a) the final reported sales price on the date in question (or if there is no reported sale on
such date, on the last preceding date on which any reported sale occurred) as reported in the
principal consolidated reporting system with respect to securities listed or admitted to trading on
the principal United States securities exchange on which the Shares are listed or admitted to
trading; or

          (b) if the Shares are not listed or admitted to trading on any such exchange, the closing bid
quotation with respect to a Share on such date on the National Association of Securities Dealers
Automated Quotations System, or, if no such quotation is provided, on another similar system,
selected by the Committee, then in use; or

          (c) if sections 1.18(a) and (b) are not applicable, the fair market value of a Share as the
Administrator may determine.

          Section 1.19 Investment Benchmark means a hypothetical investment classification in which
a Participant’s Memorandum Account shall be deemed to be invested for

2

 

purposes of crediting or
charging earnings, losses, appreciation or depreciation with respect to the Participant’s
Memorandum Account, in accordance with section 3.2.

          Section 1.20 ISO Share means a Share acquired upon exercise of an incentive stock
option (within the meaning of section 422 of the Code).

          Section 1.21 Memorandum Account means, with respect to a Participant, a bookkeeping
account maintained by the Company to which is credited the amount of the Participant’s Deferred
Compensation, together with any earnings and appreciation thereon, and against which are charged
any losses, depreciation or distributions thereof, pursuant to Article III.

          Section 1.22 Memorandum Subaccount means, with respect to a Participant, a portion of the
Participant’s Memorandum Account that is separately accounted for by the Company due to the
application of unique provisions relating to the applicable distribution schedule or Investment
Benchmark(s).

          Section 1.23 Option-Related Compensation means, with respect to an option to purchase
Shares that is exercised by paying the entire exercise price therefore by actual or constructive
delivery of Previously Acquired Shares, a number of Shares equal to the excess of (a) the total
number of Shares as to which the option is exercised, over (b) the number of Shares actually or
constructively delivered in payment of the exercise price and with respect to a stock appreciation
right, the compensation that result from exercise of the stock appreciation right.

          Section 1.24 Participant means an Eligible Officer who has a Memorandum Account under the
Plan.

          Section 1.25 Participating Company means the Company, Hudson City Savings Bank and any
other company which, with the prior approval of the Board, may adopt this Plan.

          Section 1.26 Performance-Based Compensation means “performance-based compensation”
within the meaning of section 409A of the Code and the regulations and other guidance issued
thereunder.

          Section 1.27 Performance-Based Compensation Deferral Election Period means, with
respect to any Performance-Based Compensation payable for any Service Period, the portion of the
Service Period prior to the earlier of (a) the date that is one day less than six (6) months before
the end of the Service Period to which such Performance-Based Compensation relates and (b) the date
that such Performance-Based Compensation becomes both substantially certain to be paid and readily
ascertainable; provided, however, that the Participant entitled to such Performance-Based
Compensation performs services continuously from no later than the date on which the performance
criteria are established through the date the initial deferral election is made.

          Section 1.28 Phantom Share means a unit of value that, on any relevant date,
corresponds to the Fair Market Value of a Share.

3

 

          Section 1.29 Plan means the Officers’ Deferred Compensation Plan of Hudson City Bancorp,
Inc.

          Section 1.30 Previously Acquired Share means, with respect to a Participant on any date:
(a) a Share (other than an ISO Share) that was acquired by the Participant more than six (6) months
prior to such date and has been held by the Participant continuously since such acquisition and (b)
an ISO Share that was acquired by the Participant upon the exercise, at least one year prior to
such date, of an incentive stock option (within the meaning of section 422 of the Code) that was
granted to him at least two (2) years prior to such date and has been held by the Participant
continuously since such acquisition.

          Section 1.31 Share means a share of Common Stock, par value $.01 per share, of the
Company.

          Section 1.32 Separation from Service means, with respect to a Participant, the
Participant’s separation from service within the meaning of section 409A of the Code and the
regulations and other guidance issued thereunder.

          Section 1.33 Service Period means any period of at least one (1) year in respect of
which Performance-Based Compensation is payable.

          Section 1.34 Service Recipient means with respect to a Participant on any date: (a) the
corporation for which the Participant is performing services on such date; (b) all corporations
that are liable to the Participant for the benefits due to him under the Plan; (c) a corporation
that is a majority shareholder of a corporation described in section 1.35(a) or (b); or (d) any
corporation in a chain of corporations each of which is a majority shareholder of another
corporation in the chain, ending in a corporation described in section 1.35(a) or (b).

          Section 1.35 Unforeseeable Emergency means, with respect to a Participant, a severe
financial hardship to the Participant resulting from an illness or accident of the Participant, the
Participant’s spouse or a dependent (within the meaning of section 152(e) of the Code) of the
Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of the Participant.
The existence of an Unforeseeable Emergency shall be determined by the Administrator in accordance
with section 409A of the Code and the regulations and other guidance issued thereunder.

Article II

Participation

          Section 2.1 Election to Participate.

          (a) Any Eligible Officer may elect to become a Participant in the Plan by submitting to the
Administrator a written election, on a form prescribed by the Administrator, to defer the receipt
of all or any portion of his Compensation; provided, however, that no Participant shall be
permitted to defer receipt of any amount that is required to be withheld and remitted to any
federal, state or local taxing authority pursuant to any requirement for the

4

 

collection of tax at
the source or that is required to fund any contribution or premium payment or co-payment required
of the Participant as a condition of participation in any employee benefit plan maintained by the
Company or any other Participating Company at the time the election is made. An Eligible Officer
who elects to become a Participant may make separate deferral elections as to the amount or
percentage (if any) of Base Salary, Annual Incentive Compensation, Equity Compensation and/or
Option-Related Compensation to defer. The Administrator may deny participation to any Eligible
Officer whose initial election to become a Participant does not contemplate the deferral of a
minimum of such amount as the Administrator in his discretion may prescribe.

          Section 2.2 Election to Defer Base Salary.

          (a) An election to defer Base Salary shall specify the amount or percentage of each payment of
Base Salary to be deferred. Any such election shall be made on or before the last day of any
calendar year and shall be effective for Base Salary earned in respect of service performed in the
calendar year following the calendar year in which such election is made and all subsequent
calendar years unless the Participant’s status as an Eligible Officer ceases or the Participant
elects a change in the rate of deferral pursuant to section 2.6; provided, however, that an initial
election to defer Base Salary made by an Eligible Officer and filed with the Administrator during
the thirty (30) day period immediately following the later of the Effective Date or the date the
individual first becomes eligible to participate in the Plan shall take effect with the first
payment of Base Salary that relates to service performed after such election is made, or such later
date as the Eligible Officer shall specify in his election. An election (or deemed election if a
Participant does not elect a change in the rate of deferral pursuant to section 2.6) to defer Base
Salary shall be irrevocable as of the last day on which it may be made.

          (b) Acceptance of an election to defer Base Salary shall not be held or construed as a
guarantee that any conditions precedent to the payment thereof (including but not limited to
continued employment) will be met or the amount to be deferred will in fact be earned. In the
event the dollar amount of Base Salary actually paid is less than the dollar amount for which a
deferral election has been made, the election shall be deemed effective to defer the maximum
permissible amount.

          Section 2.3 Election to Defer Annual Incentive Compensation.

          (a) An election to defer Annual Incentive Compensation shall specify the amount or percentage
of the Annual Incentive Compensation to be deferred. Any such election shall be made:

     (i) If the Annual Incentive Compensation constitutes Performance-Based
Compensation and the Administrator, in its sole discretion, permits, (A) during the
Performance-Based Compensation Deferral Election Period, and shall be effective for
Annual Incentive Compensation earned in respect of service performed during the
Service Period in which it is made and all subsequent Service Periods unless the
Participant’s status as an Eligible Officer ceases or the Participant elects a
change in the rate of deferral pursuant to section 2.6; or (B) at any other time
and/or under any other circumstances, and shall be effective for Annual Incentive
Compensation earned in respect of service during the Service

5

 

Period immediately
following the Service Period in which it is made and all subsequent Service Periods
unless the Participant’s status as an Eligible Officer ceases or the Participant
elects a change in the rate of deferral pursuant to section 2.6.

     (ii) In all other cases, on or before the last day of any calendar year and
shall be effective for Annual Incentive Compensation earned in respect of service
performed in the calendar year following the calendar year in which such election is
made and all subsequent calendar years unless the Participant’s status as an
Eligible Officer ceases or the Participant elects a change in the rate of deferral
pursuant to section 2.6; provided, however, that an initial election to defer Annual
Incentive Compensation made by an Eligible Officer and filed with the Administrator
during the thirty (30) day period immediately following the later of the Effective
Date or the date the individual first becomes eligible to participate in the Plan
shall take effect with the first payment of Annual Incentive Compensation that
relates to service performed after such election is made, or such later date as the
Eligible Officer shall specify in his election.

An election (or deemed election if a Participant does not elect a change in the rate of deferral
pursuant to section 2.6) to defer Annual Incentive Compensation shall be irrevocable as of the last
day on which it may be made.

          (b) Acceptance of an election to defer Annual Incentive Compensation shall not be held or
construed as a guarantee that any conditions precedent to the payment thereof (including but not
limited to continued employment) will be met or the amount to be deferred will in fact be earned.
In the event the dollar amount of Annual Incentive Compensation actually paid is less than the
dollar amount for which a deferral election has been made, the election shall be deemed effective
to defer the maximum permissible amount.

          Section 2.4 Election to Defer Equity Compensation.

          (a) An election to defer Equity Compensation shall specify the amount or percentage of the
Equity Compensation to be deferred. Any such election shall be made:

     (i) If Equity Compensation constitutes Performance-Based Compensation and the
Administrator, in its sole discretion, permits, (A) during the Performance-Based
Compensation Deferral Election Period, and shall be effective for Equity
Compensation earned in respect of service performed during the Service Period in
which it is made and all subsequent Service Periods unless the Participant’s status
as an Eligible Officer ceases or the Participant elects a change in the rate of
deferral pursuant to section 2.6; or (B) at any other time and/or under any other
circumstances, and shall be effective for Equity Compensation earned in respect of
service during the Service Period immediately following the Service Period in which
it is made and all subsequent Service Periods unless the Participant’s status as an
Eligible Officer ceases or the Participant elects a change in the rate of deferral
pursuant to section 2.6.

6

 

     (ii) In all other cases, on or before the last day of any calendar year and
shall be effective for Equity Compensation awarded and earned in respect of service
performed during the calendar year following the calendar year in which such
election is made and all subsequent calendar years unless the Participant’s status
as an Eligible Officer ceases or the Participant elects a change in the rate of
deferral pursuant to section 2.6; provided, however, that an initial election to
defer Equity Compensation made by an Eligible Officer and filed with the
Administrator during the thirty (30) day period immediately following the later of
the Effective Date or the date the individual first becomes eligible to participate
in the Plan shall take effect with the first payment of Equity Compensation that
relates to service performed after such election is made, or such later date as the
Eligible Officer shall specify in his election.

An election (or deemed election if a Participant does not elect a change in the rate of deferral
pursuant to section 2.6) to defer Equity Compensation shall be irrevocable as of the last day on
which it may be made.

          (b) Acceptance of an election to defer Equity Compensation shall not be held or construed as a
guarantee that any conditions precedent to the payment thereof (including but not limited to
continued employment) will be met or the amount to be deferred will in fact be earned. In the
event the dollar amount or value of Equity Compensation actually paid is less than the dollar
amount for which a deferral election has been made, the election shall be deemed effective to defer
the maximum permissible amount.

          Section 2.5 Election to Defer Option-Related Compensation.

          No person shall elect to defer Option-Related Compensation until such time as the Plan is
amended to provide for such elections.

          Section 2.6 Changes in Participation.

          (a) An election by a Participant pursuant to section 2.2 shall continue in effect until
termination of status as a Participant; provided, however, that the Participant may, one or more
times, by written election filed with the Administrator, increase or decrease the portion of his
Base Salary to be deferred, or discontinue such deferral altogether. Such election shall be
effective for Base Salary payable for service rendered after the end of the calendar year in which
such election is filed with the Administrator; provided, however, that if an election provides for
the decrease or discontinuance of the Participant’s deferral of Base Salary and is made on account
of an Acceleration Event, such election shall, to the extent permitted under section 409A of the
Code, be effective with respect to Base Salary payable after the filing of such election.

          (b) An election by a Participant pursuant to section 2.3 shall continue in effect until
termination of status as a Participant; provided, however, that the Participant may, one or more
times, by written election filed with the Administrator, increase or decrease the portion of his
Annual Incentive Compensation to be deferred, or discontinue such deferral altogether in accordance
with the following:

7

 

     (i) If Annual Incentive Compensation constitutes Performance-Based Compensation
and the Administrator, in its sole discretion, permits elections pursuant to section
2.3(a)(i), (A) an election that is made during a Performance-Based Compensation
Deferral Election Period shall be effective commencing with Annual Incentive
Compensation earned in respect of the Service Period in which it is filed with the
Administrator; and (B) an election at any other time and/or under any other
circumstances shall be effective commencing with Annual Incentive Compensation
earned in respect of the Service Period following the Service Period in which it is
filed with the Administrator; and

     (ii) In all other cases, an election shall be effective for Annual Incentive
Compensation payable for service rendered after the end of the calendar year in
which such election is filed with the Administrator;

provided, however, that if an election provides for the decrease or discontinuance of the
Participant’s deferral of Annual Incentive Compensation and is made on account of an Acceleration
Event, such election shall, to the extent permitted under section 409A of the Code, be effective
with respect to Annual Incentive Compensation payable after the filing of such election.

          (c) An election by a Participant pursuant to section 2.4 shall continue in effect until
termination of status as a Participant; provided, however, that the Participant may, one or more
times, by written election filed with the Administrator, increase or decrease the portion of his
Equity Compensation to be deferred, or discontinue such deferral altogether in accordance with the
following:

     (i) If Equity Compensation constitutes Performance-Based Compensation and the
Administrator, in its sole discretion, permits elections pursuant to section
2.4(a)(i), (A) an election that is made during a Performance-Based Compensation
Deferral Election Period shall be effective commencing with Equity Compensation
earned in respect of the Service Period in which it is filed with the Administrator;
and (B) an election at any other time and/or under any other circumstances shall be
effective commencing with Equity Compensation earned in respect of the Service
Period following the Service Period in which it is filed with the Administrator; and

     (ii) In all other cases, an election shall be effective for Equity Compensation
awarded and earned for service rendered after the end of the calendar year in which
such election is filed with the Administrator;

provided, however, that if an election provides for the decrease or discontinuance of the
Participant’s deferral of Equity Compensation and is made on account of an Acceleration Event, such
election shall, to the extent permitted under section 409A of the Code, be effective with respect
to Equity Compensation payable after the filing of such election.

          (d) In the event that a Participant ceases to be an Eligible Officer or in the event that an
Eligible Officer ceases to defer receipt of his Compensation, the balance in his Memorandum Account
shall continue to be adjusted in accordance with Article III. An Eligible

8

 

Officer who has filed a
written election to cease deferring receipt of any portion of his Compensation may thereafter again
file an election to defer receipt of his Compensation in the manner described in sections 2.2
through 2.6.

Article III

Accounting for Deferred Amounts

          Section 3.1 In General.

          The Administrator shall maintain a separate Memorandum Account for each Participant and may
establish within such Memorandum Account two or more Memorandum Subaccounts as may be necessary or
appropriate to properly administer the Plan, including, but not limited to:

          (a) A separate Memorandum Subaccount for each portion of a Participant’s Memorandum Account to
which a unique distribution schedule is applicable;

          (b) A separate Memorandum Subaccount for that portion of a Participant’s Memorandum Account
that is attributable to Base Salary, Annual Incentive Compensation, Equity Compensation and/or
Option-Related Compensation that has been deferred; and

          (c) A separate Memorandum Subaccount for that portion of a Participant’s Memorandum Account
that is required to be adjusted for earnings and losses on the basis of an Investment Benchmark
that is different from the Investment Benchmark(s) applicable to other portions of the Memorandum
Account.

Credits, charges, and other adjustments to each Participant’s Memorandum Account and any Memorandum
Subaccounts shall be made in accordance with this Article III. Neither the Company nor any
Participating Company shall fund its liability for the balances credited to a Memorandum Account or
Memorandum Subaccount, but each shall reflect its liability for such balances on its books.

          Section 3.2 Adjustments to Memorandum Accounts.

          (a) Each Participant’s Memorandum Account and applicable Memorandum Subaccount(s) shall be
credited with amounts of Compensation deferred by the Participant as of the date on which such
Compensation would have been paid to the Participant in the absence of a deferral election. For
purposes of this section 3.2(a):

     (i) Equity Compensation consisting of Shares or other property which would be
taxable for federal income tax purposes pursuant to section 83 of the Code that is
being deferred shall be credited as of the date on which such Shares or other
property become vested or, if later, the date on which such Shares or other property
are contractually required to be transferred to the Participant; and

     (ii) Option-Related Compensation that is being deferred shall be credited as of
the earliest date on which all actions have been taken and conditions satisfied to
effectively exercise the related options;

9

 

all as determined by the Administrator, whose determination shall be conclusive and binding in the
absence of manifest error.

          (b) Each Participant’s Memorandum Account shall be adjusted to reflect the amount of earnings,
losses, appreciation or depreciation, as appropriate that would result if the balances credited to
the Participant’s Memorandum Account were actually invested in Investment Benchmarks according to
the following guidelines:

     (i) That portion of a Participant’s Memorandum Account that is attributable to
the deferral of Option-Related Compensation shall at all times be deemed to be
invested in Phantom Shares. The number of Phantom Shares credited in connection
with each deferral of Option-Related Compensation shall be equal to the number of
Shares corresponding to the Option-Related Compensation that is being deferred.
Additional Phantom Shares shall be credited to account for any stock dividends to
holders of record of Shares in an amount equal to the product of (A) the number of
Shares issued as a stock dividend to the holder of record of one Share, multiplied
by (B) the number of Phantom Units credited to the Participant’s Memorandum Account
as of the record date for the stock dividend. Additional Phantom Shares shall be
credited to account for cash dividends paid to holders of record of Shares in an
amount equal to the quotient of (A) the cash dividend per Share multiplied by the
number of Phantom Shares credited to the Participant’s Memorandum Account as of the
record date for the cash dividend, divided by (B) the Fair Market Value of a Share
on the payment date for the cash dividend.

     (ii) That portion of a Participant’s Memorandum Account that is attributable to
the deferral of Equity Compensation shall be deemed to be invested in Phantom
Shares.

     (iii) Any portion of the Participant’s Memorandum Account that is not subject
to section 3.2(b)(i) or (ii) shall be deemed to be invested in such Investment
Benchmarks as the Participant, by notice given in such form and manner and subject
to such terms, conditions and procedures as the Administrator may prescribe, shall
designate from time to time. If one of the Investment Benchmarks is Phantom Shares,
such terms, conditions and procedures shall be designed to prevent the occurrence of
non-exempt short-swing transactions described in section 16 of the Securities
Exchange Act of 1934, as amended, to assure compliance with the Company’s securities
trading policy and applicable federal and state securities laws, and unless
otherwise determined by the Administrator, to permit the Company to account for its
liability with respect to such portion of the Memorandum Account on the basis of
EITF 94-6 or corresponding guidance in subsequent accounting standards.

          (c) The Memorandum Account established for each Participant shall be adjusted from time to
time, but in no event less frequently than monthly, to reflect:

     (i) credits of Deferred Compensation;

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     (ii) credits reflecting income, dividends and appreciation attributable to the
applicable Investment Benchmarks;

     (iii) charges for losses or depreciation attributable to the applicable
Investment Benchmarks; and

     (iv) charges for payments to the Participant or his Beneficiary.

Except to the extent otherwise provided by the Administrator, all such adjustments in respect of
activity during a month shall be made as of the last business day of each month.

          Section 3.3 Vesting.

          Subject to section 5.3, all amounts credited to a Participant’s Memorandum Account shall be
100% vested at all times.

          Section 3.4 Investment in Phantom Shares.

          Any Deferred Compensation invested in Phantom Shares (whether at the election of the
Participant or as required by section 3.2(b) or otherwise) shall remain invested in Phantom Shares
until the balance attributable thereto is distributed in accordance with section 6.2(c).

Article IV

Trust

          Section 4.1 Establishment of Trust.

          The Company may establish a trust fund which may be used to accumulate funds to satisfy
benefit liabilities to Participants, former Participants and their Beneficiaries under the Plan;
provided, however, that the assets of such trust shall be subject to the claims of the creditors of
the Company in the event that it is determined that the Company is insolvent; and provided,
further, that the trust agreement shall contain such terms, conditions and provisions as shall be
necessary to cause the Company to be considered the owner of the trust fund for federal, state or
local income tax purposes with respect to all amounts contributed to the trust fund or any income
attributable to the investments of the trust fund. The Company shall pay all costs and expenses
incurred in establishing and maintaining such trust. Any payments made to a Participant, former
Participant or Beneficiary from a trust established under this section 4.1 shall offset payments
which would otherwise be payable by the Company in the absence of the establishment of such trust.
Any such trust will conform to the terms of the model trust prescribed by Revenue Procedure 92-64,
as the same may be modified from time to time.

          Section 4.2 Contributions to Trust; Investments.

          If a trust is established in accordance with section 4.1, each Participating Company shall
make contributions to such trust in such amounts and at such times as may be specified by the
Committee or required pursuant to the terms of any trust agreement between the Company and the
trustee that has been authorized by the Committee.

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          Section 4.3 Unfunded Character of Plan.

          Notwithstanding the establishment of a trust pursuant to section 4.1, the Plan shall be
unfunded. Any liability of the Company or another Participating Company to any person with respect
to benefits payable under the Plan shall be based solely upon such contractual obligations, if any,
as shall be created by the Plan, and shall give rise only to a claim against the general assets of
the Company or such Participating Company. No such liability shall be deemed to be secured by any
pledge or any other encumbrance on any specific property of the Company or a Participating Company.

Article V

Life Insurance

          Section 5.1 Authority to Purchase Life Insurance.

          To assist it in meeting its financial obligations under the Plan, the Company may purchase and
hold, or may cause the trustee of a trust described in Article IV to purchase and hold, insurance
on the life or lives of such Participant or Participants in such amounts as the Committee may
determine. By electing to defer Compensation under the Plan, a Participant shall be deemed to have
authorized and consented to such purchase.

          Section 5.2 Cooperation to Effect Purchases.

          Each Participant shall take such actions (including but not limited to submitting to such
physical examinations, providing such medical information and executing such applications, consents
to the purchase of insurance and other documents and instruments) as the Administrator may
reasonably request to facilitate the purchase of insurance authorized by the Committee. Any person
who fails or refuses to cooperate in the purchase of such insurance may, in the discretion of the
Committee, be denied the right of future participation in the Plan, such denial to be effected in a
manner that complies with the requirements of section 409A of the Code. No person shall be denied
eligibility to participate in the Plan solely because he is deemed uninsurable by the carrier or
carriers designated by the Committee.

          Section 5.3 Ownership of Policies.

          The Company (or, if applicable, a trust described Article IV) shall be the legal owner of any
life insurance policies purchased under the Plan and shall have and enjoy all of the incidents of
ownership, including, but not limited to, the right to cancel, surrender, extend or assign the
policy in whole or in part, the right to exercise borrowing privileges against the cash value of
the policy, the right designate the beneficiary of any death benefit proceeds that may become
payable thereunder, the right to receive policy dividends, the right to exercise voting rights with
respect to all matters on which the holder of the policy may vote, and, in the case of a mutual
insurance company, the right to participate in and receive and hold any proceeds distributed in
relation to the policy in connection with any demutualization transaction. In no event shall the
Participant, his Beneficiary or his heirs, successors or assigns have any rights in, to or under
any such policy, including but not limited to the right to receive any portion of any death benefit
proceeds that may be payable upon the death of the Participant. In the event that

12

 

the Participant,
his designated Beneficiary or any of his heirs, successors or assigns attempts to challenge the
rights of the Company (or, if applicable, a trust described Article IV), then, in addition to any
other rights and remedies that may be available, any balance credited to the Participant’s
Memorandum Account that is then unpaid shall be forfeited.

          Section 5.4 Effect of Termination of Participation.

          Neither the cessation of a Participant’s performance of service for the Company or any
Participating Company, nor the cessation of a Participant’s deferrals of Compensation under the
Plan, nor the complete distribution of the balance credited to the Participant’s Memorandum Account
shall have any effect on the authority of the Company (or, if applicable, a trust described Article
IV) to continue any life insurance policy then in effect on the life of such Participants for such
future period as the Committee may determine, including but not limited to the period extending
through the date of the Participant’s death.

Article VI

Distributions

          Section 6.1 Early Distributions.

          (a) If a Participant suffers an Unforeseeable Emergency, the Administrator may, in its sole
discretion, allow such Participant to obtain a lump sum withdrawal of an amount credited to his
Memorandum Account that does not exceed the amount necessary to alleviate the Unforeseeable
Emergency.

          (b) To the extent such Participant has filed a written election with the Administrator to
receive a distribution from his Memorandum Account upon his Disability, if a Participant suffers a
Disability, the Administrator shall pay to the Participant, in lump sum, the amount credited to his
Memorandum Account.

          (c) To the extent required to comply with the terms of a domestic relations order (within the
meaning of section 414(p) of the Code) directed to and served upon the Plan, the Administrator may
direct the payment of all or any portion of the balance credited to a Participant’s Memorandum
Account at any time or in accordance with any payment schedule set forth in said order.

          (d) To the extent necessary for any Federal officer or employee in the executive branch to
comply with an ethics agreement with the Federal government, the Administrator may permit the
distribution of all or a portion of the balance credited to a Participant’s Memorandum Account
earlier than the times otherwise provided in the Plan.

          (e) To the extent reasonably necessary to avoid the violation of an applicable Federal, state,
local, or foreign ethics law or conflicts of interest law, the Administrator may permit the
distribution of all or a portion of the balance credited to a Participant’s Memorandum Account
earlier than the times otherwise provided in the Plan, in accordance with section 409A of the Code
and the regulations and other guidance issued thereunder.

13

 

          (f) To the extent necessary to pay the Federal Insurance Contributions Act tax imposed under
section 3103, section 3121(a) and section 3121(v)(2) of the Code on Deferred Compensation (the
“FICA amount”), to pay the income tax at source on wages imposed under section 3401 of the Code or
the corresponding withholding provisions of applicable state, local, or foreign tax laws as a
result of the payment of the FICA amount, or to pay the additional income tax at source on wages
attributable to the pyramiding section 3401 wages and taxes, the Administrator may permit the
distribution of all or a portion of the balance credited to a Participant’s Memorandum Account
earlier than the times otherwise provided in the Plan, in accordance with section 409A of the Code
and the regulations and other guidance issued thereunder.

          (g) To the extent necessary to pay state, local or foreign tax obligations arising from
participation in the Plan that apply to an amount of Deferred Compensation before the amount is
paid or made available to the Participant or to pay the income tax at source on wages imposed under
section 3401 as a result of such payment and to pay the additional income tax at source on wages
imposed under section 3401 attributable to such additional section 3401 wages, the Administrator
may permit the distribution of all or a portion of the balance credited to a Participant’s
Memorandum Account earlier than the times otherwise provided in the Plan, in accordance with
section 409A of the Code and the regulations and other guidance issued thereunder.

          (h) To the extent necessary to satisfy a debt of the Participant to a Service Recipient, where
such debt is incurred in the ordinary course of the service relationship between the Service
Recipient and the Participant, the Administrator may permit the distribution of all or a portion of
the balance credited to a Participant’s Memorandum Account earlier than the times otherwise
provided in the Plan if the entire amount of reduction in any of the Service Recipient’s taxable
years does not exceed $5,000, and the reduction is made at the same time and in the same amount as
the debt otherwise would have been due and collected from the Participant.

          (i) The Administrator may permit the distribution of all or a portion of the balance credited
to a Participant’s Memorandum Account earlier than the times otherwise provided in the Plan where
such payments occur as part of an arm’s length settlement between the Participant and the Service
Recipient of an arm’s length, bona fide dispute as to the Participant’s right to the deferred
amount, in accordance with section 409A of the Code and the regulations and other guidance issued
thereunder.

          (j) To the extent Deferred Compensation fails to meet the requirements of section 409A and the
regulations and other guidance issued thereunder and is required to be included in income, the
Administrator may permit the distribution of all or a portion of the balance credited to a
Participant’s Memorandum Account earlier than the times otherwise provided in the Plan.

          (k) No
Participant shall have any discretion to accelerate payments under
Section 6.1(b) through Section 6.1(j) or any direct or indirect
election as to whether the Administrator’s discretion to accelerate a payment will be exercised.

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          (l) If the Administrator reasonably anticipates that a deduction will not be permitted with
respect to a scheduled payment under the Plan due to the application of section 162(m), the
Administrator shall delay making such payment until the Participant’s first taxable year in which
the Administrator reasonably anticipates, or should reasonably anticipate, the deduction of such
payment will not be barred by application of section 162(m) or until the period beginning with the
date of the Participant’s Separation from Service and ending on the later of the last day of the
taxable year of the Service Recipient in which the Participant Separates from Service or the
15th day of the third month following the Participant’s Separation from Service. Such
delayed payment shall be made in accordance with section 409A of the Code and the regulations and
other guidance issued thereunder.

          (m) If the Administrator reasonably anticipates that the making of a schedule payment will
violate Federal securities laws or other applicable law, the Administrator may delay such payment
until the earliest date at which the Administrator reasonably anticipates that the making of the
payment will not cause such violation. For purposes of this section 6.1(m) , the making of a
payment that would cause inclusion in gross income or the application of any penalty provision or
other provision of the Code is not treated as a violation of applicable law.

          Section 6.2 Scheduled Distributions to Participants.

          (a) Upon a Participant’s Separation from Service, an amount equal to the balance credited to
such Participant’s Memorandum Account shall be paid to the Participant in a single payment during
the calendar year immediately following the calendar year in which such Separation from Service
occurs; provided, however, that if a Participant so elects in his initial election to participate
or in any subsequent deferral election, payment of balances attributable to amounts deferred
pursuant to such election may be made:

     (i) in a single payment as of some other date (not earlier than the first day
of the calendar year following the calendar year that includes the third anniversary
of the effective date of the election) specified by the Participant in his election;
or

     (ii) in annual installments over such number of years (not to exceed fifteen
(15)) and payable beginning on such date (not earlier than the first day of the
calendar year following the calendar year that includes the third anniversary of the
effective date of the election) specified by the Participant in his election. In
the event payment is to be made in installments, each installment shall be equal to
the balance credited to the Participant’s Memorandum Account (or, if applicable,
Memorandum Subaccount) as of the last business day of the month ending immediately
prior to the date on which payment is to be made, divided by the number of
installment payments remaining to be paid (including the payment then being
computed). Any portion of the balance credited to the Participant’s Memorandum
Account with respect to which a payment has not been made shall continue to be
adjusted pursuant to Article III, in accordance with the Investment Benchmarks in
which the Participant’s Memorandum Account is deemed to be invested, until a
distribution with respect to such amount has been made.

15

 

          (b) Notwithstanding section 6.2(a), each Participant may, by written election given in such
form and manner as the Administrator may prescribe, elect to change the time and manner of
distribution of the balance credited to any Memorandum Subaccount; provided, however, that

     (i) Any such election shall not take effect until twelve (12) months after it
is received by the Administrator; and

     (ii) In the case of an election to defer a payment to be made on account of an
event other than the Participant’s death, Disability or Unforeseeable Emergency, the
first payment made under such election shall not occur until at least five (5) years
later than such payment would otherwise have been made; and

     (iii) In the case of an election to defer a payment to be made at a specified
time or pursuant to a fixed schedule, such election shall be made at least twelve
(12) months prior to the date of the first scheduled payment.

          (c) Distributions of balances deemed to be invested in Phantom Shares shall be made in whole
Shares (with cash paid in lieu of fractional Shares) and all other distributions shall be made in
cash unless the Administrator, in its discretion, permits other forms of distribution.

          Section 6.3 Distributions to Beneficiaries.

          (a) A Participant may designate a Beneficiary or Beneficiaries by filing a written notice with
the Administrator prior to the Participant’s death, in such form and manner as the Administrator
may prescribe. A Participant who has designated a Beneficiary or Beneficiaries may change or
revoke such designation prior to the Participant’s death by means of a similar written instrument.

          (b) In the event that a Participant dies before receiving payment of his entire Memorandum
Account, payment of the value of the deceased Participant’s Memorandum Account shall be made in a
lump sum to his Beneficiary or Beneficiaries as soon as practical during the calendar year
following the calendar year of the Participant’s death. upon receipt by the Administrator of
satisfactory evidence of the Participant’s death. If no Beneficiary shall have been designated or
if any such designation shall be ineffective, or in the event that no designated Beneficiary
survives the Participant, payment of the value of the Participant’s Memorandum Account shall be
made to the Participant’s personal representative, or if no personal representative is appointed,
to his surviving spouse, or if he has no surviving spouse, to his then living descendants, per
stirpes, in the same manner and at the same time as the Participant’s Memorandum Account would have
been paid to a Beneficiary. If any Participant and any one or more of his designated
Beneficiary(ies) shall die in circumstances that leave substantial doubt as to who shall have been
the first to die, the Participant shall be deemed to have survived the deceased Beneficiary(ies).
The presence of substantial doubt for such purposes shall be determined by the Administrator in its
sole and absolute discretion.

16

 

          Section 6.4 Mandatory Cashout of Small Balances.

     Notwithstanding anything in the Plan to the contrary, except as provided in section 6.5, if,
at any time, the aggregate amount payable in respect of a Participant’s Memorandum Account is not
greater than the applicable dollar amount under section 402(g)(1)(B) of the Code, the entire amount
credited to his Memorandum Account shall be distributed in a single lump sum payment as soon as
practicable, provided that the payment results in the termination and liquidation of the entirety
of the Participant’s interest under the Plan, including all agreements, methods, programs, or other
arrangements with respect to which deferrals of compensation are treated as having been deferred,
in accordance with section 409A of the Code and the regulations and other guidance issued
thereunder.

          Section 6.5 Restrictions on Payments to Specified Employees.

     Notwithstanding anything in the Plan to the contrary, to the extent required under section
409A of the Code, no payment to be made to a Specified Employee on or after the date of his
Separation from Service shall be made sooner than, and shall be deferred if necessary until, six
(6) months after such Separation from Service.

          Section 6.6 One-Time Change of Elections.

     A Participant may, not later than December December 31, 2008, elect in writing to change the
time and manner of payment of any patment due hereunder to another time and manner of payment
permitted under the Plan; provided, however, that no such election shall result in the deferral of
payment that is due to be made in the year in which the election is made or the acceleration to
year in which the election is made of payment otherise scheduled to be paid later.

Article VII

Administration

          Section 7.1
Administrator.

     The Administrator shall, subject to the responsibilities of the Committee and the Board, have
the responsibility for the day-to-day control, management, operation and administration of the
Plan. The Administrator shall have the following responsibilities:

          (a) To maintain records necessary or appropriate for the administration of the Plan;

          (b) To give and receive such instructions, notices, information, materials, reports and
certifications as may be necessary or appropriate in the administration of the Plan;

          (c) To prescribe forms and make rules and regulations consistent with the terms of the Plan
and with the interpretations and other actions of the Committee;

17

 

          (d) To require such proof or evidence of any matter from any person as may be necessary or
appropriate in the administration of the Plan;

          (e) To determine any question arising in connection with the Plan, including any question of
Plan interpretation, and the Administrator’s decision or action in respect thereof shall be final
and conclusive and binding upon all persons having an interest under the Plan; provided, however,
that any question relating to inconsistency or omission in the Plan, or interpretation of the
provisions of the Plan, shall be referred to the Committee by the Administrator and the decision of
the Committee in respect thereof shall be final;

          (f) To review and dispose of claims under the Plan filed pursuant to section 8.3 and appeals
of claims decisions pursuant to section 8.4;

          (g) If the Administrator shall determine that by reason of illness, senility, insanity, or for
any other reason, it is undesirable to make any payment to the person entitled thereto, to direct
the application of any amount so payable to the use or benefit of such person in any manner that
the Administrator may deem advisable or to direct in the Administrator’s discretion the withholding
of any payment under the Plan due to any person under legal disability until a representative
competent to receive such payment on his behalf shall be appointed pursuant to law;

          (h) To discharge such other responsibilities or follow such directions as may be assigned or
given by the Committee or the Board; and

          (i) To perform any duty or take any action which is allocated to the Administrator under the
Plan.

The Administrator shall have the power and authority necessary or appropriate to carry out his
responsibilities. The Administrator may resign only by giving at least 30 days’ prior written
notice of resignation to the Committee, and such resignation shall be effective on the date
specified in such notice.

               Section 7.2 Committee Responsibilities.

          The Committee shall, subject to the responsibilities of the Board, have the following
responsibilities:

          (a) To review the performance of the Administrator;

          (b) To hear and decide appeals, pursuant to the claims procedure contained in section 8.4 of
the Plan, taken from the decisions of the Administrator;

          (c) To hear and decide questions, including interpretation of the Plan, as may be referred to
the Committee by the Administrator;

          (d) To report and make recommendations to the Board regarding changes in the Plan, including
changes in the operation and management of the Plan;

18

 

          (e) To designate an alternate Administrator to serve in the event that the Administrator is
absent or otherwise unable to discharge his responsibilities;

          (f) To remove and replace the Administrator or alternate, or both of them, and to fill a
vacancy in either office;

          (g) To discharge such other responsibilities or follow such directions as may be assigned or
given by the Board; and

          (h) To perform any duty or to take any action that is allocated to the Committee under the
Plan.

The Committee shall have the power and authority necessary or appropriate to carry out its
responsibilities. The Committee may take action under the Plan by vote of a majority of the
members present at any meeting of the Committee at which a quorum is present or by unanimous
written consent in lieu of meeting. No member of the Committee shall participate in any action or
decision in which he has a personal interest unless all members of the Committee voting on such
matter are similarly interested. The Committee may delegate to one of its members, to the
Administrator or to any Non-Employee Director of the Company or any other Participating Company the
power and responsibility, to the extent not expressly allocated under the Plan to the
Administrator, to sign instruments and other communications on its behalf and to take appropriate
action to implement the Committee’s decisions.

               Section 7.3 Claims Procedure.

          Any claim relating to benefits under the Plan shall be filed with the Administrator on a form
prescribed by it. If a claim is denied in whole or in part, the Administrator shall give the
claimant written notice of such denial, which notice shall specifically set forth:

          (a) The reasons for the denial;

          (b) The pertinent Plan provisions on which the denial was based;

          (c) Any additional material or information necessary for the claimant to perfect his claim and
an explanation of why such material or information is needed; and

          (d) An explanation of the Plan’s procedure for review of the denial of the claim.

In the event that the claim is not granted and notice of denial of a claim is not furnished by the
30th day after such claim was filed, the claim shall be deemed to have been denied on
that day for the purpose of permitting the claimant to request review of the claim.

               Section 7.4 Claims Review Procedure.

          Any person whose claim filed pursuant to section 8.3 has been denied in whole or in part by
the Administrator may request review of the claim by the Committee, upon a form prescribed by the
Administrator. The claimant shall file such form (including a statement of his position) with the
Committee no later than 60 days after the mailing or delivery of the written

19

 

notice of denial
provided for in section 8.3, or, if such notice is not provided, within 60 days after such claim is
deemed denied pursuant to section 8.3. The claimant shall be permitted to review pertinent
documents. A decision shall be rendered by the Committee and communicated to the claimant not
later than 30 days after receipt of the claimant’s written request for review. However, if the
Committee finds it necessary, due to special circumstances (for example, the need to hold a
hearing), to extend this period and so notifies the claimant in writing, the decision shall be
rendered as soon as practicable, but in no event later than 120 days after the claimant’s request
for review. The Committee’s decision shall be in writing and shall specifically set forth:

          (a) The reasons for the decision; and

          (b) The pertinent Plan provisions on which the decision is based.

Any such decision of the Committee shall be binding upon the claimant and the Participating
Company, and the Administrator shall take appropriate action to carry out such decision.

               Section 7.5 Other Administrative Provisions.

          (a) Any person whose claim has been denied in whole or in part must exhaust the administrative
review procedures provided in section 8.4 prior to initiating any claim for judicial review.

          (b) Neither the members of the Committee, the Administrator, nor any Non-Employee Director or
employee of a Participating Company to whom responsibilities are assigned under the Plan shall be
liable for any act of omission or commission by himself or by another person, except for his own
individual willful and intentional malfeasance.

          (c) The Administrator or the Committee may shorten, extend or waive the time (but not beyond
60 days) required by the Plan for filing any notice or other form with the Administrator or
Committee, or taking any other action under the Plan; provided, however, that no such shortening,
extension or waiver shall be done that would cause any Participant to be in constructive receipt of
the balance credited his Memorandum Account prior to the date on which such balance is scheduled to
be paid.

          (d) Any person, group of persons, committee, corporation or organization may serve in more
than one fiduciary capacity with respect to the Plan.

          (e) Any action taken or omitted by the Administrator or the Committee or any delegate of the
Committee with respect to the Plan, including any decision, interpretation, claim denial or review
on appeal, shall be conclusive and binding on all interested parties and shall be subject to
judicial modification or reversal only to the extent it is determined by a court of competent
jurisdiction that such action or omission was arbitrary and capricious and contrary to the terms of
the Plan.

20

 

Article VIII

Amendment And Termination

               Section 8.1 Amendment by the Company.

          The Company reserves the right, in its sole and absolute discretion, at any time and from time
to time, by action of the Board, to amend the Plan in whole or in part. In no event, however,
shall any such amendment adversely affect the right of any Participant, former Participant or
Beneficiary to receive any benefits under the Plan in respect of participation for any period
ending on or before the later of the date on which such amendment is adopted or the date on which
it is made effective.

               Section 8.2 Termination.

          (a) The Company reserves the right, in its sole and absolute discretion, by action of the
Board, to terminate the Plan, but only in the following circumstances:

     (i) Within thirty (30) days before or twelve (12) months after any Change in
Control Event; and

     (ii) At such other time and in such other circumstances as may be permitted
under section 409A of the Code.

In such event, undistributed benefits attributable to participation prior to the date of
termination shall be distributed in lump sum payments as soon as practicable following the
effective date of termination.

          (b) The Company reserves the right, in its sole and absolute discretion, by action of the
Board, to suspend the operation of the Plan, but only in the following circumstances:

     (i) With respect to Compensation to be earned and paid in calendar years
beginning after the date of adoption of the resolution suspending the operation of
the Plan; and

     (ii) At such other time and in such other circumstances as may be permitted
under section 409A of the Code.

In such event, no further Compensation shall be deferred following the effective date of the
suspension and Memorandum Accounts in existence prior to such date shall continue to be maintained,
and payments shall continue to be made, in accordance with the provisions of the Plan.

               Section 8.3 Amendment or Termination by Other Companies.

          In the event that a corporation or trade or business other than the Company shall adopt this
Plan, such corporation or trade or business shall, by adopting the Plan, empower the Company to
amend or terminate the Plan, insofar as it shall cover employees of such corporation

21

 

or trade or
business, upon the terms and conditions set forth in sections 9.1 and 9.2; provided, however, that
any such corporation or trade or business may, by action of its board of directors or other
governing body, amend or terminate the Plan, insofar as it shall cover employees of such
corporation or trade or business, at different times and in a different manner. In the event of
any such amendment or termination by action of the board of directors or other governing body of
such a corporation or trade or business, a separate plan shall be deemed to have been established
for the employees of such corporation or trade or business, and any amounts set aside to provide
for the satisfaction of benefit liabilities with respect to employees of such corporation or trade
or business shall be segregated from the assets set aside for the purposes of this Plan at the
earliest practicable date and shall be dealt with in accordance with the documents governing such
separate plan.

Article IX

Miscellaneous Provisions

               Section 9.1 Notice and Election.

          The Administrator shall provide a copy of this Plan and the resolutions of adoption to each
individual who becomes eligible to participate, together with a form on which the Eligible Officer
may notify the Administrator of his election whether to become a Participant, which form, if he so
elects, he may complete, sign and return to the Administrator.

               Section 9.2 Construction and Language.

          Wherever appropriate in the Plan, words used in the singular may be read in the plural, words
used in the plural may be read in the singular, and the masculine gender may be read as referring
equally to the feminine gender or the neuter.

               Section 9.3 Headings.

          The headings of Articles and sections are included solely for convenience of reference. If
there is any conflict between such headings and the text of the Plan, the text shall control.

               Section 9.4 Non-Alienation of Benefits.

          Except as may otherwise be required by law, no distribution or payment under the Plan to any
Participant, former Participant or Beneficiary shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge, whether voluntary or
involuntary, and any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber
or charge the same shall be void; nor shall any such distribution or payment be in any way liable
for or subject to the debts, contracts, liabilities, engagements or torts of any person entitled to
such distribution or payment. If any Participant, former Participant or Beneficiary is adjudicated
bankrupt or purports to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge
any such distribution or payment, voluntarily or involuntarily, the Committee, in its sole
discretion, may cancel such distribution or payment or may hold or cause to be held or applied such
distribution or payment, or any part thereof, to or for the benefit of such Participant, former

22

 

Participant
or Beneficiary, in such manner as the Committee shall direct; provided, however, that
no such action by the Committee shall cause the acceleration or deferral of any benefit payments
from the date on which such payments are scheduled to be made.

               Section 9.5 Indemnification.

          The Company shall indemnify, hold harmless and defend each Participant, former Participant and
Beneficiary, against their reasonable costs, including legal fees, incurred by them or arising out
of any action, suit or proceeding in which they may be involved, as a result of their efforts, in
good faith, to defend or enforce the obligations of the Company and any other Participating
Employer under the terms of the Plan.

               Section 9.6 Severability.

          A determination that any provision of the Plan is invalid or unenforceable shall not affect
the validity or enforceability of any other provision hereof.

               Section 9.7 Waiver.

          Failure to insist upon strict compliance with any of the terms, covenants or conditions of the
Plan shall not be deemed a waiver of such term, covenant or condition. A waiver of any provision
of the Plan must be made in writing, designated as a waiver, and signed by the party against whom
its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one
or more times shall not be deemed a waiver or relinquishment of such right or power at any other
time or times.

               Section 9.8 Governing Law.

          The Plan shall be construed, administered and enforced according to the laws of the State of
New Jersey without giving effect to the conflict of laws principles thereof, except to the extent
that such laws are preempted by federal law. The federal and state courts having jurisdiction in
Bergen County, New Jersey shall have exclusive jurisdiction over any claim, action, complaint or
lawsuit brought under the terms of the Plan or in any way relating to the rights or obligations of
any person under, or the acts or omissions of the Company, the Board, the Administrator, the
Committee or any duly authorized person acting in their behalf in relation to, the Plan. By
electing to participate in this Plan, the Participant, for himself and any other person claiming
any rights under the Plan through him, agrees to submit himself, and any such legal action
described herein that he shall bring, to the sole jurisdiction of such courts for the adjudication
and resolution of such disputes. Any payments made pursuant to this Plan are subject to and
conditioned upon their compliance with 12 U.S.C. § 1828(k) and any regulations promulgated
thereunder.

               Section 9.9 Withholding.

          Payments from this Plan shall be subject to all applicable federal, state and local income
withholding taxes. The Company, Hudson City Savings Bank, any other Participating Company or the
Committee shall have the right to require any person entitled to receive a distribution in Shares
under this Plan to pay the amount of any tax which is required to be

23

 

withheld with respect to such
Shares, or, in lieu thereof, to cancel without notice, a sufficient number of Phantom Shares to
cover the amount required to be withheld.

               Section 9.10 No Deposit Account.

          Nothing in this Plan shall be held or construed to establish any deposit account for any
Participant or any deposit liability on the part of the Company or any Participating Company.
Participants’ rights hereunder shall be equivalent to those of a general unsecured creditor of each
Participating Company.

               Section 9.11 Rights of Participants.

          No Participant shall have any right or claim to any benefit under the Plan except in
accordance with the provisions of the Plan. The establishment of the Plan shall not be construed
as conferring upon any Participant or other person any legal right to a continuation of service or
to any terms or conditions of service, nor as limiting or qualifying the right of a Participating
Company to terminate the service of such Participant.

               Section 9.12 Status of Plan under ERISA.

          The Plan is intended to be a non-qualified deferred compensation plan maintained exclusively
for employees. The Plan is not intended to comply with the requirements of section 401(a) of the
Code or to be subject to Parts 2, 3 and 4 of Title I of ERISA. The Plan shall be administered and
construed so as to effectuate this intent.

               Section 9.13 Successors and Assigns.

          The provisions of the Plan will inure to the benefit of and be binding upon the Participants
and their respective legal representatives and testate or intestate distributes, and each
Participating Company and their respective successors and assigns, including any successor by
merger or consolidation or a statutory receiver or any other person or firm or corporation to which
all or substantially all of the assets and business of any Participating Company may be sold or
otherwise transferred.

               Section 9.14 Non-dilution Provisions.

          In the event of any merger, consolidation, or other business reorganization involving the
Company, and in the event of any stock split, stock dividend or other event generally affecting the
number of Shares held by each person who is then a holder of record of Shares, and in the event of
any other occurrence which, in the judgment of the Committee warrants an adjustment to avoid
unintended enhancement or dilution of the rights of one or more Participants under the Plan, the
number of Phantom Shares credited to each Participant’s Memorandum Account, and the unit value
thereof, shall be adjusted to account for such event. Such adjustment shall be effected in such
manner as the Committee shall determine to be appropriate in order to prevent the enlargement or
diminution of any Participant’s rights under the Plan.

24

 

               Section 9.15 Compliance with Section 409A of the Code.

     The Plan is intended to be a non-qualified deferred compensation plan described in section
409A of the Code. The Plan shall be operated, administered and construed to give effect to such
intent. In addition, the Plan shall be subject to amendment, with or without advance notice to
Participants and other interested parties, and on a prospective or retroactive basis, including,
but not limited to, amendment in a manner that adversely affects the rights of Participants and
other interested parties, to the extent necessary to effect such compliance.

25EX-10.36.1

Exhibit 10.36.1

FIRST AMENDMENT TO
VALIDUS HOLDINGS LTD.
DIRECTORS STOCK COMPENSATION PLAN

     The Validus Holdings Ltd. Directors Stock Compensation Plan is hereby amended in the following
respects:

     1. Subsection (e) of Section 6 is amended to read in its entirety as follows:

“(e) The account of a Director shall be distributed (in the form of
one Share for each Share unit) in a lump sum upon the Director’s
separation from service (within the meaning of Section
409A(a)(2)(A)(i) of the Code and the regulations thereunder).
Distribution shall be made on such date following such separation
from service as the Company shall determine but in no event later
than 30 days following the date of such separation from service.”

     2. Section 6 is amended by adding the following subsection (h) at the end thereof:

“(h) Anything in the Plan to the contrary notwithstanding, in the
case of any Director for whom deferrals under the Plan with respect
to periods after December 31, 2008 would be subject to current
United States income tax pursuant to Section 457A of the Code, the
following special provisions shall apply: (i) no deferrals may be
made by the Director with respect to any annual retainer fees for
Plan Years beginning after December 31, 2008 and (ii) the Director’s
account under the Plan shall be distributed in a lump sum on the
earlier of the date determined pursuant to Section 6(e) or December
31, 2017.”

     3. The last sentence of subsection (e) of Section 7 is amended to read in its entirety as
follows:

“With respect to any payments not yet made to a Participant pursuant
to a deferral election, nothing contained in the Plan shall give any
such Participant any rights that are greater than those of a general
unsecured creditor of the Company; provided, however, that the
Company may authorize the creation of trusts or make other
arrangements to meet the Company’s obligations under the Plan to
deliver cash, Shares or other property pursuant to any award, which
trusts or other arrangements shall be consistent with the ‘unfunded’
status of the Plan.”

 

 

     4. Section 7 is amended by adding the following subsection (k) at the end thereof:

“(k) Code Section 409A Compliance. The Plan is intended to comply
with Section 409A of the Code and the regulations thereunder, and
the Plan shall be interpreted and operated consistently with that
intent.”

	 	 	 	 	 
	 	VALIDUS HOLDINGS LTD.
	 
	 	 	 	 
	Date: January 5, 2009

	 	By:
	 	/s/ C. Jerome Dill
	 

	 	Name:
	 	C. Jerome Dill
	 

	 	Title:
	 	EVP & General Counsel

-2-

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