Document:

Prudential Financial, Inc. Compensation Plan

 
Exhibit
10.18 
 
PRUDENTIAL FINANCIAL, INC.

 
COMPENSATION PLAN 
 
ARTICLE 1 
PURPOSE 
 
The purpose of the “Prudential Financial, Inc. Compensation Plan” (the “Plan”) is to foster and promote the long-term
financial success of Prudential Financial, Inc. (the “Company”) and its Affiliates and materially increase shareholder value by providing market-sensitive programs (e.g., base salary and annual incentive compensation) to Eligible
Employees of the Company and its Affiliates that attract and reward highly qualified employees; align with critical business goals and objectives; link to the performance results relevant to the business segment and the Company; retain top
performers; pay for results and differentiate levels of performance; and foster contributions that promote Company success. 
 
Effective as of March 11, 2003 (the “Effective Date”), the Plan is hereby adopted. 
 
ARTICLE 2 
DEFINITIONS 
 
2.01 Definitions.    Whenever used herein, the following terms shall have the respective meanings set
forth below: 
 
Administrative
Guidelines.    “Administrative Guidelines” means the guidelines and information for exercising duties and responsibilities under this Plan as approved by the Senior Vice President, as described in Section 5.01.

 
Affiliate.    “Affiliate” means any corporation or partnership in which the Company owns, directly or indirectly, more than 50% of the total combined voting power of all classes of stock of such
corporation or of the capital interest or profits interest of such partnership, but excluding any such entity that is excluded from participation in the Plan by the Senior Vice President in his or her sole discretion. “Affiliate” also
means any corporation or partnership in which the Company owns, directly or indirectly, 50% or less of the total combined voting power of all classes of stock of such corporation or of the capital interest or profits interest of such partnership,
provided that any such entity is included in the Plan by the Senior Vice President in his or her sole discretion. 
 
Annual Incentive Award.    “Annual Incentive Award” shall have the meaning set forth in Section
4.03(b)(2). 
 
Base
Pay.    “Base Pay” shall have the meaning set forth in Section 4.03(b)(1). 
 
Board.    “Board” means the Board of Directors of the Company. 
 
Code.    “Code” means the
Internal Revenue Code of 1986, as amended. 

 
Committee.    Generally, the term “Committee” means the Compensation Committee of the Board or such other committee of the Board as the Board shall designate from time to time. For purposes of any
Base Pay or Annual Incentive Award decisions related to Covered Employees under this Plan or the Omnibus Incentive Plan, the Committee shall consist of two or more members of the Board, each of whom shall be a “Non Employee Director”
within the meaning of Rule 16b-3, as promulgated under the Securities Exchange Act of 1934 (as amended), an “outside director” within the meaning of section 162(m) of the Code, and an “independent director” under Section 303A of
the New York Stock Exchange’s Listed Company Manual, or any successors thereto. 
 
Company.    “Company” means Prudential Financial, Inc., a New Jersey corporation, and any successor thereto. Prior to December 18, 2001, “Company” means
The Prudential Insurance Company of America 
 
Covered Employee.    “Covered Employee” means any Eligible Employee of the Company or its Affiliates who is deemed to be a “covered employee” for purposes of Code section 162(m).

 
Effective
Date.    “Effective Date” generally means March 11, 2003, or as designated by the Senior Vice President for particular Eligible Employees or categories of Eligible Employee. 
 
Eligible
Employee.    “Eligible Employee” means any U.S.-based regular full-time and regular part-time (but not temporary) employee of the Company or any Affiliate as follows: 
 
(a)    Home Office Employees. 
 
(b)    Field Service Staff Employees. 
 
“Eligible Employee” in no event,
however, shall include any of the following: 
 

	 	(1)	 	Prudential Representatives. 

 

	 	(2)	 	Prudential Field Management-Prudential Insurance and Financial Services Employees. 

 

	 	(3)	 	Prudential Field Management-Prudential Preferred Financial Services Employees. 

 

	 	(4)	 	Senior Life Representatives. 

 

	 	(5)	 	Special Agents, other than Special Agents whose regular compensation is paid in foreign currency. 

 

	 	(6)	 	Employees who are classified by Prudential as Canadian or International employees. 

 

	 	(7)	 	Retired employees. 

 

	 	(8)	 	Temporary employees and Full-Time employees hired on a temporary basis, including any employee who performs services for the Employer through a temporary employment
agency. 

 

	 	(9)	 	Persons employed on a casual or occasional basis. 

 

	 	(10)	 	Persons retained on a monthly fee or per diem basis. 

 

	 	(11)	 	Persons working under the direction of real estate management firms or other contractors. 

 

	 	(12)	 	Employees covered under a collective bargaining agreement, unless the collective bargaining agreement provides for coverage hereunder. 

 
Page 2 of 8 
 

 

	 	(13)	 	Any person (other than an individual considered an employee under Code section 3121(d)(3)(B) and specifically defined herein as an Eligible Employee) who performs
services for the Employer but is not treated by the Employer at the time of the performance of services as an employee for federal tax purposes (regardless of any subsequent recharacterization), including, without limitation:

 
(A) Premiere
Retired Representatives, Agents Emeritus, or Retired Representatives; 
 
(B) Individuals who perform services for the Employer through for which they are compensated through an employee leasing company, temporary employment agency or other third party agency such as, but
not limited to, Spherion and Adecco; 
 
(C) Any former employee; 
 
(D) Any individual who would otherwise be considered an employee solely by being part of an affiliated service group, leasing arrangement or other arrangement under Code Sections 414(m), (n) or (o); 
 
(E) An independent contractor. 
 

	 	(14)	 	Or investment professionals. 

 
Job Grade.    “Job Grade” means the various grades assigned to Eligible Employees under Section 4.02.

 
Manager.    “Manager” means the officer of the Company or its Affiliate who is responsible for supervising, directing and evaluating the work of an Eligible Employee. In the case of Job Grades 1
through 4 who are at least the rank of Senior Vice President (including, but not limited to, Covered Employees), the Committee shall be considered the Manager. 
 
Omnibus Incentive Plan.    “Omnibus Incentive Plan” means the Prudential Financial, Inc. Omnibus
Incentive Plan, as adopted by the Board on March 11, 2003 (and as amended in the future). 
 
Participant.    “Participant” shall have the meaning set forth in ARTICLE 3 of the Plan. 
 
Plan Year.    “Plan Year” means a period that ends on the last Friday in
each December that is also a payday, and begins on the following Monday. 
 
Senior Vice President or SVP.    “Senior Vice President” or “SVP” means the most senior Vice President responsible for corporate Human Resources (or the successor to his or her
duties relating to corporate Human Resources) or his or her delegate if so provided pursuant to his or her written delegation or written direction. 
 
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2.02 Gender and Number.    Except when otherwise
indicated by the context, words in the masculine gender used in the Plan shall include the feminine gender, the singular shall include the plural, and the plural shall include the singular. 
 
ARTICLE 3 
ELIGIBILITY AND PARTICIPATION 
 
Unless otherwise specifically designated by the Senior Vice President or the Committee, all Eligible Employees of the Company and any
Affiliate are Participants. 
 
ARTICLE 4

JOB GRADES; POWERS OF THE SENIOR VICE PRESIDENT 
 
4.01 Power to Determine Base Pay, Changes in Base Pay and Annual Incentive
Awards.    Subject to the terms of the Plan (including, but not limited to Sections 5.01 and 5.02) and Article IX of the Omnibus Incentive Plan (with respect to Annual Incentive Awards for Eligible Employees who are
Covered Employees), the Senior Vice President shall have the authority to determine, in his or her sole discretion, each Eligible Employee’s Base Pay (including any changes in such Base Pay) as provided in Section 4.03(b)(1) of the Plan, and
each Eligible Employee’s Annual Incentive Awards as provided in Section 4.03(b)(2) of the Plan. 
 
4.02 Job Grades; Pay Rates; Administrative Guidelines.    The Senior Vice President shall have the
authority to develop Job Grades and Administrative Guidelines (as further referenced in Section 5.01) for the application of the principles of this Plan and the Senior Vice President’s authority. 
 
(a) Initially, there will be 18 Job Grades, with the Chief
Executive Officer of the Company designated as Job Grade 1. Each Participant will be assigned a Job Grade, as described in Sections 4.02 and 4.03. 
 
(b) Managers and other appropriate officers of the Company or any Affiliate may make recommendations as to or, if authorized by the Senior
Vice President, set the Base Pay (including any changes in Base Pay) and the Annual Incentive Award of any Eligible Employee. The Senior Vice President may accept or reject any recommendation or setting of Base Pay or an Annual Incentive Award in
his or her sole discretion. The Senior Vice President, in his or her sole discretion, shall determine the terms and conditions of each change in Base Pay and each Annual Incentive Award at the time of grant. The Senior Vice President may establish
different terms and conditions for the Base Pay and/or Annual Incentive Award of different Participants, whether or not granted at different times. 
 
4.03 Determining Pay and Changes in Pay. 
 
(a) Job Grades, and Setting the Minimum and Maximum Pay.    Subject to the
approval of the Senior Vice President, the Company’s Corporate Compensation Department will assign minimum and maximum reference levels of Base Pay, Annual Incentive Award, and total pay to each Job Grade. The reference levels should generally
reflect pay patterns in the market based on independent market surveys or surveys by the Company’s Corporate Compensation Department, applying techniques and standards that are generally acceptable in the industry. Initially and on a periodic
basis, the Company’s Corporate Compensation Department will collect and analyze additional market data to determine if any change to the 

 

Page 4 of 8 

structure or placement of jobs within the structure is necessary or appropriate to maintain market competitiveness. If necessary or
appropriate, structural compensation changes (e.g., increases to Base Pay or Annual Incentive Award minimums and/or maximums) will be made by the Senior Vice President in his or her sole discretion. 
 
(b) Pay.    Each Manager will
recommend or set each Participant’s Base Pay and Annual Incentive Award each year based on the reference levels and the Participant’s job performance, as described below. Except as determined by the Senior Vice President in his or her sole
discretion, no Eligible Employee in a Job Grade shall be paid outside the minimum or maximum for any type of pay or for total pay for that Job Grade. 
 
(1) Base Pay.    Generally, Base Pay is initially set based on the experience, pay history, and
past performance of the Participant and based on market data for the applicable job. Increases generally are to be based on market data for the applicable job, the individual performance of the Eligible Employee, the relative performance of the
Participant to that of other similarly situated Eligible Employees, Company and/or business unit performance, and budgetary restrictions. A Participant must be employed by the Company or the Affiliate and meet all other eligibility requirements as a
Participant, at the time Base Pay increases are effective, to be eligible to receive a Base Pay increase. 
 
(2) Annual Incentive Awards.    Generally, Annual Incentive Awards are made within the sole
discretion of the Company based on, among other things, (i) Company and/or business unit performance for the applicable Plan Year, which determines the available dollar amounts; (ii) the individual performance of the Participant during the
applicable Plan Year; and individual performance relative to other similarly situated Eligible Employees. A Participant must be employed by the Company or the Affiliate and meet all other eligibility requirements as a Participant, on the date the
Annual Incentive Award is due to be paid to be eligible to receive the award. There is no accrual or other creation of a right to payment prior to the due date of payment even if the amount of an award is determined with reference to performance
over the prior Plan Year or some other period, except as permitted by Section 5.05. 
 
(3) Total Cash Consideration.    Generally, the ultimate goal is to review compensation on a
total pay basis. Total pay for a particular Plan Year will include the following: (a) the Eligible Employee’s Base Pay prior to his or her Base Pay increase (typically granted in March of the Plan Year), if any; (b) the amount of any Base Pay
increase (typically granted in March of the Plan Year); and (c) any Annual Incentive Award paid for the previous Plan Year’s performance (typically paid in February). Managers shall have a reasonable amount of flexibility in the amount of Base
Pay increase and Annual Incentive Award that may be used to achieve the total pay amount that the Manager, subject to review by the Senior Vice President (or the Committee, with respect to Covered Employees), determines best meets the combination of
market factors and performance for a Participant. 
 

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ARTICLE 5

ADMINISTRATION 
 
5.01 Rules, Interpretations and Determinations.    The Plan shall be administered by the Company through
decisions made and actions taken by its appropriate officers, including, but not limited to, the Senior Vice President, the Vice President of Total Compensation and/or the Vice President of Corporate Compensation. The Senior Vice President may
exercise any authority granted under this plan either directly or in the form of Administrative Guidelines approved by the Senior Vice President. The Senior Vice President shall have full authority to interpret and administer the Plan, to establish,
amend, and rescind rules, regulations, and guidelines relating to the Plan, and to provide for conditions deemed necessary or advisable for the administration and interpretation of the Plan to carry out their provisions and purposes. This authority
shall include, but not be limited to, adopting special rules or adjustments to Base Pay or Annual Incentive Awards for certain categories of employees or in coordination with any and all other benefit and compensation plans of the Company or any
Affiliate to assure compliance with all applicable laws (such as the federal securities laws) or to obtain optimal tax deductibility under the Code (including, but not limited to, Code section 162(m)). All such determinations, interpretations, or
other actions made or taken by the Senior Vice President shall be made in his or her sole discretion and shall be final, binding, and conclusive for all purposes and upon all persons. 
 
5.02 Authority for Senior Executives and Covered
Employees.    Notwithstanding anything in this document to the contrary, in the case of Job Grades 1 through 4 who are at least the rank of Senior Vice President, and whenever authority or discretion must be exercised by
the Committee for Covered Employees under the Code, the Committee reserves to itself the authority and discretion granted in this Plan to the Senior Vice President. If this reserved authority does not extend to the SVP, the Chief Executive Officer
(CEO) of the Company shall have the authority granted herein to the SVP with respect to the SVP. The Committee and the CEO will coordinate with the SVP and other officers to maintain reasonable consistency in the treatment of Eligible Employees
except where the Committee, CEO, or SVP, as appropriate, specifically determines that the facts and circumstances warrant otherwise. In addition, the Base Pay and Annual Incentive Award of any Participant in Job Grades 1 through 4 who is employed by
an insurance Affiliate shall be approved or ratified by the Board of Directors of the Company or the appropriate Affiliate, to the extent required by law. 
 
5.03 Agents.    The Senior Vice President or the Committee may appoint agents (who may be officers or
employees of the Company) to assist in the administration of the Plan and may grant authority to such persons to execute agreements or other documents on its behalf. 
 
5.04 Delegation of Authority.    Notwithstanding anything else contained in
the Plan to the contrary herein, the Senior Vice President or the Committee may, if otherwise appropriate, delegate to any employee of the Company or any group of employees of the Company or its Affiliates any portion of their authority and powers
under the Plan with respect to Participants. Such delegation shall be subject to such terms or conditions or guidelines as the delegating party shall determine and may be for a limited time or task or for an indefinite period subject only to the
delegating party’s revocation of the delegation. 
 
5.05 Newly Eligible or Separated Participants.    The Senior Vice President shall be entitled to make such rules, determinations and adjustments, as he or she deems appropriate and consistent with
the purposes of this Plan, with respect to any Participant who becomes eligible to participate in the Plan after the commencement of a Plan Year or, notwithstanding Section 4.02 (concerning employment on payment due dates), involuntarily separates
from service, other than for cause, (such as upon a qualifying severance event under a severance plan of the Company or an Affiliate, or occurrence of total disability) or upon an approved retirement. 
 

Page 6 of 8 

 
ARTICLE 6

AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION OF PLAN 
 
The Committee may in its sole discretion, at any time and from
time to time, amend, modify, suspend, or terminate this Plan, in whole or in part, without notice to or the consent of any Participant or employee. 
 
ARTICLE 7 
MISCELLANEOUS PROVISIONS 
 
7.01 Transferability of Amounts Payable under the Plan.    No amounts payable under the Plan may be transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by
the laws of descent and distribution or as required by law concerning the garnishment or levy of wages. 
 
7.02 Deferral of Payment.    The Senior Vice President may permit a Participant to elect, upon such
terms and conditions as the Senior Vice President (or the Company, with respect to any deferred compensation plan) may establish, to defer receipt of Annual Incentive Award payments under the Plan. 
 
7.03 No Guarantee of Employment or
Participation.    Neither the existence of the Plan nor anything in this Plan shall be deemed to constitute a contract of employment between the Company or any affiliate and any Eligible Employee or Participant, nor shall
it constitute or create a right to remain in the employ of the Company or any affiliate for any particular period of time. Employment with the Company and its affiliates is employment at will, and either the employee or the employer may terminate
the employment relationship at any time, with or without cause of notice. Except to the extent expressly selected by the Senior Vice President to be a Participant, no person (whether or not an Eligible Employee or a Participant) shall at any time
have a right to be selected for (or additional) participation in the Plan, despite having previously participated in an incentive or bonus plan of the Company or an affiliate. 
 
7.04 Tax Withholding.    The Company, the Affiliate or an affiliate shall
have the right and power to deduct from all payments or distributions hereunder, or require a Participant to remit to the Company promptly upon notification of the amount due, an amount to satisfy any federal, state, local or foreign taxes or other
obligations required by law to be withheld with respect thereto. The Company may defer payments until such requirements are satisfied. 
 
7.05 No Limitation on Compensation; Scope of Liabilities.    Nothing in the Plan shall be construed to
limit the right of the Company to establish other plans if and to the extent permitted by applicable law. The liability of the Company, any Affiliate or any affiliate under this Plan is limited to the obligations expressly set forth in the Plan, and
no term or provision of this Plan may be construed to impose any further or additional duties, obligations, or costs on the Company, any Affiliate or any affiliate thereof or the Committee or the Senior Vice President not expressly set forth in the
Plan. 
 
7.06 Term of Plan
..    The Plan shall be effective upon the Effective Date. The Plan shall continue in effect, unless sooner terminated pursuant to ARTICLE 6. 
 
7.07 Governing Law.    The Plan shall be construed and administered in
accordance with and governed by the laws of the State of New Jersey, without regard to principles of conflict of laws. 
 
7.08 Impact on Benefits.    Amounts paid under the Plan shall not be included in an Eligible
Employee’s compensation for purposes of calculating benefits under any other benefit or compensation plan, program or 
 
Page 7 of 8 

arrangement sponsored by the Company or a Affiliate or any other affiliate, unless such plan, program or arrangement expressly provides that
amounts paid under the Plan shall be included. 
 
7.09 No Constraint on Corporate Action.    Nothing contained in the Plan shall be construed to prevent the Company, any Affiliate or any affiliate, from taking any corporate action (including, but
not limited to, the Company’s right or power to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its
business or assets) which is deemed by it to be appropriate, or in its best interest, whether or not such action would have an adverse effect on this Plan, or any amounts payable under this Plan. No employee, beneficiary or other person, shall have
any claim against the Company, any Affiliate or any affiliate, as a result of any such action. 
 
7.10 Eligible Employee’s Rights Unsecured and Unfunded.    The Plan at all times shall be entirely unfunded. No assets of the Company or any Affiliate shall be
segregated or earmarked to represent the liability for payments under the Plan. The right of an Eligible Employee to receive a payment hereunder shall be an unsecured claim against the general assets of the Company or the Affiliate that was the
employer of such Eligible Employee. All payments under the Plan shall be made from the general assets of the Company or the Affiliate that was the most recent employer of the Eligible Employee. 
 
7.11 No Guarantee of
Benefits.    Nothing contained in the Plan shall constitute a guarantee by the Company or an Affiliate or any other person or entity that the assets of the Company or any Affiliate will be sufficient to pay any amount
hereunder. 
 
7.12 Plan Not Subject to
ERISA.    In accordance with the underlying federal regulations, this Plan is a compensation program that is not subject to the provisions of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”). 
 
7.13
Captions.    The headings and captions appearing herein are inserted only as a matter of convenience. They do not define, limit, construe, or describe the scope or intent of the provisions of the Plan. 
 
Page 8 of 8The Prudential Deferred Compensation Plan for Non-Employee Directors

Exhibit 10.19 
 
THE PRUDENTIAL DEFERRED COMPENSATION PLAN 
FOR NON-EMPLOYEE DIRECTORS 
 
The Prudential Deferred Compensation Plan for Non-Employee Directors (the “Plan”) was established by The Prudential Insurance
Company of America (“Prudential Insurance”), effective as of July 1, 1974, for the purpose of providing a method of deferring payment to non-employee directors of the Company (the “Non-Employee Directors”) of their fees, as fixed
from time to time by the Board of Directors of the Company until termination of their services on the Board. The Plan was amended and restated effective as of May 12, 1998. Effective as of January 1, 2002, the Plan was amended to transfer
sponsorship from Prudential Insurance to Prudential Financial, Inc. (the “Company”) to reflect the change in corporate structure resulting from the demutualization of Prudential Insurance, and the establishment of the Company as the
publicly-held parent company of Prudential Insurance as of December 17, 2001. Effective as of September 10, 2002, the Plan has been amended and restated, with such changes generally to be effective as of January 1, 2003 as set forth herein, to
provide for the deferral of “Stock Based Fees” and “Cash Based Fees” (as defined below), the provision of certain additional notional investment options under the Plan related to the deferral of such Fees, and to address the
suspension of, and “rollover” of accrued amounts under, the Pension Plan (as defined below). 
 
The Plan is intended to be, and shall be administered as, an unfunded plan maintained for the purpose of providing deferred compensation
for the Non-Employee Directors and, as such, is not an “employee benefit plan” within the meaning of Title I of ERISA (as defined below). To the degree applicable, the Plan is also intended to comply with the provisions of New Jersey
Statutes Annotated 17B:18-52. 
 
ARTICLE I

 
DEFINITIONS 
 
The following capitalized terms shall have the meanings
hereinafter set forth in this Plan: 
 
“Board
of Directors” or “Board” means the Board of Directors of the Company. 
 
“Cash-Based Fees” shall mean, effective as of January 1, 2003, Fees payable in U.S. currency to the Company’s Non-Employee Directors, the amount of which may be periodically amended or
modified consistent with the requirements of the By-laws and Statement of Corporate Governance Principles and Practices of the Company. 
 

1 

“Change of Control” shall be deemed to have occurred if any of the following
events shall occur: 
 
(i) any
Person (as defined below) acquires “beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined Voting Power (as defined
below) of the Company’s securities; or 
 
(ii) within any 24-month period, the persons who, at the beginning of such period, were the members of the Board (the “Incumbent Company Directors”) shall cease to constitute at least a majority of the Board or the board of
directors of any successor to the Company; provided, however, that any director elected to the Board, or nominated for election to the Board, by a majority of the Incumbent Company Directors then still in office shall be deemed to be an Incumbent
Company Director for purposes of this subclause (ii); or 
 
(iii) upon the consummation of a merger, consolidation, share exchange, division, sale or other disposition of all or substantially all of the assets of the Company (a “Company Corporate Event”), immediately
following the consummation of which the stockholders of the Company immediately prior to such Company Corporate Event do not hold, directly or indirectly, a majority of the Voting Power of 
 
(x) in the case of a merger or consolidation,
the surviving or resulting corporation, 
 
(y) in the case of a share exchange, the acquiring corporation or 
 
(z) in the case of a division or a sale or other disposition of assets, each surviving, resulting or acquiring corporation
which, immediately following the relevant Company Corporate Event, holds more than 25% of the consolidated assets of the Company immediately prior to such Company Corporate Event, provided that no Change of Control shall be deemed to have occurred
with respect to any Participant who is employed, immediately following such Company Corporate Event, by any entity in which the policyholders or stockholders of the Company, as the case may be, immediately prior to such Company Corporate Event hold,
directly or indirectly, a majority of the Voting Power; or 
 
(iv) any other event occurs which the Board declares to be a Change of Control. 
 
Notwithstanding the foregoing, a Change of Control shall not be deemed to have occurred merely as a result of an underwritten offering of
the equity securities of the Company where no Person (including any group (within the meaning of Rule 13d-5(b) under the 

 

2 

Exchange Act)) acquires more than 25% of the beneficial ownership interests in such securities. 
 
“Code” means the Internal Revenue Code of 1986, as
amended. 
 
“Committee” means the
Committee that has been appointed by the Board of Directors pursuant to Article V of the Plan. 
 
“Common Stock” means the common stock, par value $0.01, of the Company. 
 
“Company” means Prudential Financial, Inc. 
 
“Controlled Group” means the Company and (i) each corporation which is a member of a controlled
group of corporations (within the meaning of Section 414(b) of the Code) which includes the Company, (ii) each trade or business (whether or not incorporated) which is under common control with the Company (within the meaning of Section 414(c) of
the Code), (iii) each organization included in the same affiliated service group (within the meaning of Section 414(c) of the Code) as the Company, and (iv) each other entity required to be aggregated with the Company pursuant to regulations
promulgated under Section 414(o) of the Code. Any such entity shall be treated as part of the Controlled Group only for the period while it is a member of the controlled group or considered to be in a common control group. 
 
“Deferred Compensation Accounts” shall have the
meaning set forth in Section 3.1 of the Plan. 
 
“Deferred Stock Units” shall have the meaning set forth in Section 7.1. 
 
“Early Distribution With Penalty” shall have the meaning set forth in Section 4.3. 
 
“Effective Date” means July 1, 1974. 
 
“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended. 
 
“Exchange
Act” means the Securities Exchange Act of 1934, as amended. 
 
“Fees” includes all fee income payable to Non-Employee Directors for their service on the Board of Directors, including, but not limited to (i) annual service fees, (ii) meeting fees (including orientation meeting fees),
and (iii) compensation that may be payable to such Non-Employee Directors for serving on any of the committees of the Board of Directors. The term “Fees” does not include travel payments that may be made to such Non-Employee Directors as a
result of attending orientation meetings of the Board of Directors, payments that constitute reimbursement for expenses incurred by such Non-Employee Director in connection with his or her services to the Board of Directors, nor any fees that may be
payable to such Non-Employee Director for service as 

 

3 

a trustee of The Prudential Foundation. Effective January 1, 2003, the term “Fees” shall include both Stock-Based Fees and
Cash-Based Fees, unless otherwise noted in this Plan. 
 
“Fixed Units” shall have the meaning set forth in Section 7.1. 
 
“Hardship” means an unanticipated emergency that is caused by an event beyond the control of the Participant or beneficiary, and that would result in severe financial hardship to such
Participant or beneficiary. 
 
“Non-Employee
Director” means any Director of the Company who is not a salaried officer or employee of either the Company or any entity within the Controlled Group. 
 
“Participant” means a Non-Employee Director of the Company (and, if applicable, their beneficiaries) who have elected to
participate in the Plan and thereby defer all or a portion of the Fees to be earned by such Participant in the next applicable Plan Period. 
 
“Pension Plan” means The Pension Plan For Non-Employee Directors Of Prudential Financial, Inc., as suspended by the Company as
of December 31, 2002. 
 
“Pension Plan
Rollover Deferrals” has the meaning set forth in Section 3.3 (a) (ii). 
 
“Person” means any person (within the meaning of Section 3(a)(9) of the Exchange Act), including any group (within the meaning of Rule 13d-5(b) under the Exchange Act)), but excluding any of
the Company, any Subsidiary or any employee benefit plan sponsored or maintained by the Company or any Subsidiary. 
 
“Plan Period” has the following meaning: (a) with respect to the “First Plan Period,” the period commencing on
July 1, 1974, and terminating on December 31, 1974, and (b) with respect to all subsequent Plan Periods, the period of time commencing on January 1 and terminating on December 31 for all successive calendar years. 
 
“Pre-2003 Fee Deferrals” has the meaning set forth
in Section 3.3(a)(i). 
 
“Retirement
Date” means the first day of the month following the month in which the Participant terminates his or her services as a Non-Employee Director. 
 
“Secretary” means the Secretary of the Board of Directors and, for purposes of this Plan and various administrative procedures
described herein, the term “Secretary” shall also include any member of the Secretary’s Department of the Company, 
 
“Stock-Based Fees” shall mean, effective as of January 1, 2003, Fees payable in Common Stock to the Company’s Non-Employee
Directors, the amount of which may be periodically amended or modified consistent with the requirements of the By-laws and Statement of Corporate Governance Principles and Practices of the Company. 
 

4 

 
“Subsidiary” means any corporation or partnership in which the Company owns, directly or indirectly, more than 50% of the total combined voting power of all classes of stock of such corporation or of the capital interest or
profits interest of such partnership. 
 
ARTICLE II

 
PARTICIPATION REQUIREMENTS 
 
2.1 Eligibility. A Non-Employee Director will be deemed
a Participant in the Plan either (a) if he or she elects to defer all or a portion of the Fees to be earned during a Plan Period as provided herein, and/or (b) if such Non-Employee Director has accrued a pension under the terms of the Pension Plan
the value of which is to be transferred to this Plan as of such date pursuant to the suspension and subsequent termination of the Pension Plan. 
 
2.2 Elections 
 
(a) General Rules. The election to defer all or a portion of the Participant’s Fees for the next Plan Period,
as well as the election of the form and timing of any distributions on the Participant’s behalf, shall be made by written notice delivered by the Participant to the Secretary not later than the last day of the open trading window under the
Company’s Personal Securities Trading Policy immediately preceding the first day of such Plan Period. In the case of a Non-Employee Director who first becomes eligible during such Plan Period, such election must be made by written notice not
later than thirty (30) days after such Non-Employee Director first becomes eligible; provided, however, that with respect to such initial elections, no Fees attributable to the period before which the election is made and presented to the Secretary
are eligible for deferral under this Plan. Each such election shall be irrevocable during such Plan Period and thereafter, except as set forth below. 
 
(b) Amendment of Election Form: Each Participant may, no later than the last day of the year prior to the year of
his or her anticipated Retirement Date, amend their election forms for deferrals of Fees related to all Plan Periods (a) to change the previously-elected form of distribution to another distribution form of all distributions under the Plan to
another distribution form permitted under Section 4.1, or (b) to change the starting date for commencement of all payments under the Plan to another definitely determinable date on or after such Retirement Date, provided, however that such election
shall be made during an open trading window under the Company’s Insider Trading Policy. 
 
2.3 Pension Plan Rollover Elections. With respect to any Non-Employee Director not already a Participant, or a current Participant of the Plan who has accrued a pension under the terms of the
Pension Plan the value of which is to be transferred to this Plan as of such date pursuant to the suspension and subsequent termination of the Pension Plan, such individuals must, by written notice delivered by the Participant to the Secretary

 

5 

not later than the last day of the open trading window under the Company’s Insider Trading Policy immediately preceding the first day of
such Plan Period, elect the form and timing of any distributions on the Participant’s behalf with respect to such Pension Plan Rollover Deferrals. 
 
Such election form shall specify, at a minimum, that: 
 
(a) For Participants of the Plan and other Non-Employee Directors who become Participants in
this Plan by virtue of such Pension Plan Rollover who are in active service with the Board as of December 31, 2002, the form (lump sum or installment) and timing of any distribution of such Pension Plan Rollover Deferrals as generally provided for
under Section 4.1(a) of the Plan; and 
 
(b) For Participants of the Plan and other Non-Employee Directors who become Participants in this Plan by virtue of such Pension Plan Rollover who were in active service with the Board as of December 31, 2001 but had retired from the
Board prior to December 31, 2002, such Participants will be permitted to elect only five (5) or ten (10) annual installment payments of such amounts, to commence on or after January 1, 2003. 
 
No other election shall be permitted with respect to such Pension Plan
Rollover Deferrals, except as set forth in Section 4.4 below. 
 
ARTICLE III 
DEFERRED COMPENSATION ACCOUNTS 
 
3.1 Establishment of Deferred Compensation Accounts. An
account shall be established for each Participant which shall be designated as his or her Deferred Compensation Account. Such Account may be suballocated as generally provided for under Section 3.3(a) below as a recordkeeping matter and accounting
convenience, but the Company shall not be required to segregate any amounts credited to the Deferred Compensation Accounts in any manner or in any form, except in its sole discretion. 
 
3.2 Crediting of Fees to Deferred Compensation Accounts. Upon the execution of a valid election to
defer all or a portion of the Fees attributable to services performed by the Participant in the next Plan Period, such Fees shall be credited to the Participant’s Deferred Compensation Accounts in the following manner: 
 
(a) Annual Service Fees: To the degree
the Fees deferred by the Participant constitute annual service fees, the amount of the annual service fee to be earned by the Participant for services rendered during the First Plan Period shall be credited in two equal installments on or about the
last business day of September 

 

6 

and December in such Plan Period and for services rendered during any other Plan Period shall be credited in four equal installments on or
about the last business day of March, June, September, and December in the Plan Period to which such service fee relates to his or her Deferred Compensation Account, subject to the provisions of Section 3.4. 
 
(b) Meeting/Committee Fees: To the
degree the Fees deferred by the Participant constitute meeting fees or committee fees, the amount of each fee to be earned by a Participant for attendance at a meeting during a Plan Period shall be credited to his or her Deferred Compensation
Account on the last business day of the calendar quarter during the Plan Period when such meeting occurred. 
 
3.3 Earnings Indices and Investment Options for Stock-Based Fees and Cash-Based Fees Within the Deferred Compensation Accounts (Fixed
Units and Deferred Stock Units); Allocation Limitations 
 
A Participant’s Deferred Compensation Account will be credited with notional interest, earnings (and, where applicable, notional investment gain or loss) that are intended to mirror the investment performance and results of the
two notional investment options offered under the Plan and selected by the Participant on the Participation Agreement, subject to the limitations set forth below: 
 
(a) Sub-Allocation of Deferred Compensation Accounts: Amounts credited to each
Participant’s Deferred Compensation Account shall be identified in the Plan’s records as comprised of up to four subaccounts, as follows: 
 
(i) Amounts credited to an applicable Participant’s Deferred Compensation Account for Plan Periods ending on December
31, 2002 (including any interest accrued on such balances (the “Pre-2003 Fee Deferrals”); 
 
(ii) Amounts credited to an applicable Participant’s Deferred Compensation Account as a result of the suspension and
subsequent termination of the Pension Plan as of December 31, 2002 (the “Pension Plan Rollover Deferrals”); 
 
(iii) Stock-Based Fee Deferrals; and 
 
(iv) Cash-Based Fee Deferrals. 
 
(b) Available Notional Investment Options under the Plan: Effective for Plan Years
beginning on or after January 1, 2003, there are two (2) available notional investment options under the Plan – the “Fixed Units” and the “Deferred Stock Units”: 
 
(i) Fixed Units: The Fixed Units are intended to mirror the performance of the Fixed
Rate Fund, one of the actual investment option available to participants of the Prudential Employee Savings Plan. With respect to 
 

7 

amounts deemed allocated to the Fixed Units under the Plan by any Participant, such amounts will be credited with interest in the same
general manner as interest would be credited to amounts invested in the actual Fixed Rate Fund. To the extent that the Fixed Rate Fund is amended, replaced or removed from the Prudential Employee Savings Plan, comparable changes shall be made in the
available notional investment option under this Plan, and any such changes shall be communicated to Participants as soon as administratively practicable. 
 
(ii) Deferred Stock Units: The Deferred Stock Units are intended to mirror the performance of shares of Common
Stock, with each Deferred Stock Unit the equivalent of one share of Common Stock. With respect to amounts deemed allocated to Deferred Stock Units by any Participant, such amounts will be credited under the Plan as if the Participant had actually
purchased shares of Common Stock on the date of such deferral. If dividends on the Common Stock are declared while a Participant holds Deferred Stock Units in his or her Deferred Compensation Account, additional Deferred Stock Units will be credited
to such Account in the following manner. First, a notional value equal to the cash value of dividends that would be paid upon the same number of whole shares of Common Stock as the Participant has Deferred Stock Units in his or her Deferred
Compensation Account on the dividend crediting date (e.g., the date such dividend is payable) will be calculated. Second, such notional value will be deemed to be allocated to the Participant’s Deferred Compensation Account and credited to a
corresponding number of Deferred Stock Units to such Account (in whole or fractional units) as of the same date, as soon as administratively practicable. 
 
(c) Allocation Limitations: Generally, a Participant may elect a combination of the two available notional
investment options with respect to the amount of Fees deferred under the Plan, subject to the limitations set forth below: 
 
(i) Cash-Based Fees: With respect to any Cash-Based Fee amounts, such amounts (including any earnings) may be
allocated to either the Fixed Units or the Deferred Stock Units under the Plan; provided, however, that the Participant’s allocation of his or her account must be stated in five percent (5%) increments. 
 
(ii) Stock-Based Fees: With respect to
any Stock-Based Fees deferred under the Plan, such amounts (and any notional dividends paid with respect to such amounts) may only be allocated to the Deferred Stock Units under the Plan. 
 
(iii) Pre-2003 Fee Deferrals: With respect to any Pre-2003 Fee Deferrals, such amounts
may be allocated to either the Fixed Units or the Deferred Stock Units under the Plan; provided, however, that the Participant’s allocation of his or her account must be stated in five percent (5%) increments. 
 

8 

 
(iv) Pension Plan Rollover Deferrals: With respect to any Pension Plan Rollover Deferrals deferred under the Plan, such amounts (and any notional dividends paid with respect to such amounts) may only be allocated to the
Deferred Stock Units under the Plan. 
 
(d) Changing Notional Investment Options: Subject to the allocation limitations set forth in Section 3.3(c) above, a Participant may change how the notional amounts reflected in his or her Account are deemed invested by
completing an Account Reallocation Form. Such deemed investment allocations may be changed periodically during an open trading window under the Company’s Personal Securities Policy, and in no event more than once per calendar quarter. Changes
will be effective the first day of the following month. To the extent that additions to, or subtractions from, the number of indices/notional investment options are made under this Plan, Participants will be asked to complete an Account Reallocation
Form to indicate if they wish to reallocate their notional Account balances. In the event no such Form is received, no changes to the Participant’s Account will be made except that, in the event a particular notional investment option is
eliminated and no Form has been completed, the notional amounts credited in such eliminated option shall be credited under the Fixed Units (or, if such option has been eliminated, a notional investment equivalent to any money market fund option
offered under the Prudential Employee Savings Plan) as of the date of such elimination (or as soon as administratively practicable thereafter). The aforementioned allocation limitations apply at all times during which the Participant is in active
service as a Non-Employee Director of the Company, and for a period of two (2) years following his or her Retirement Date (or such other period after the Retirement Date as the Committee, in its sole discretion, may impose). 
 
(e) Account Valuation and Reports:

 
(i) Periodic Account
Valuation. For purposes of Deferred Compensation Account recordkeeping, periodic updates of the notional value of each Participant’s Deferred Compensation Account (and of the aggregate unfunded liabilities of the Plan as a whole) shall be
made at the direction of the Committee (in any event, no less frequently than as of the end of each calendar quarter). With respect to any distribution for a Participant’s Account as provided for in Article IV of the Plan, the aggregate value
of any such distribution shall be calculated by reference to the notional value of the Account as of the last day of the month prior to the month in which such distribution is either anticipated to commence or has been requested to commence by the
Participant (or Beneficiary, as applicable). 
 
(ii) Participant Statements. Quarterly statements illustrating Participant Deferred Compensation Account balances, including any notional gains or losses in such Accounts, shall be made available to Participants as soon as

 

9 

practicable after the end of each calendar year quarter, in a form and manner prescribed by the Committee. 
 
3.4 Special Rules Governing Deferral of Annual Service
Fees. If, prior to the end of the Plan Period, a Participant (a) becomes an employee of the Company or any member of the Controlled Group, (b) ceases for any reason to be a Non-Employee Director, or (c) has elected to defer all or a portion of
his or her annual services fees and the effective date of participation by a Participant for any Plan Period is other than the first day thereof, such Participant’s Deferred Compensation Account will be credited with that proportion of the
annual service fee that the Participant has elected to defer for the full Plan Period which the number of days of his or her participation in the Plan during such Plan Period bears to the total number of days in such Plan Period. 
 
ARTICLE IV 
DISTRIBUTIONS FROM THE PLAN 
 
4.1 Timing and Form of Distribution. The Company shall pay to the Participant (or, in the event of the Participant’s
death, to the Participant’s designated beneficiary) a sum equal to the amount then standing to his or her credit in his or her Deferred Compensation Account (plus interest as provided for under Section 3.3 herein), in the following manner:

 
(a) Normal Form of
Benefits—Lump Sum or Installment Payments: Payments shall be made in a lump sum, or in installments (either five (5) or ten (10) annual installments, if the form of distribution is Common Stock or cash, and/or sixty (60) or one hundred
twenty (120) monthly installments, if the form of distribution is cash), as elected by the Participant in his or her deferral election form, to begin on either (i) a date prior to the Participant’s Retirement Date, provided that such date must
be no earlier than the January 1 in the year following the Plan Period during which such Fees would otherwise have been payable to the Participant, (ii) the Participant’s Retirement Date, or (iii) such later date as selected by the Participant
(provided, however, that in any event, distributions from the Plan must commence in the year such Participant attains age 70 1/2). In the event an installment option is chosen, such installments shall be as nearly equal as practicable and
shall continue even if the Participant again serves on the Board of Directors. 
 
Any such distribution provided for under the terms of this Section 4.3(a) will be made in the following forms: 
 
(i) For Deferred Compensation Account balances attributable to Pension Plan Rollover and Stock-Based Fees, the form of
distribution shall be Common Stock; and 
 

10 

 
(ii) For Deferred Compensation Account Balances attributable to Cash-Based Fees or Pre-2003 Fee Deferrals, the form of distribution shall be either cash or Common Stock, at the election of the Participant. 
 
In the event that an installment option has
been elected by the Participant, such Participant will have the right during such allocation period to reallocate the amounts yet to be distributed under the Plan among the notional investment options described in and subject to the limits set forth
in Article III. Any such reallocation elections shall be made on a form, and under procedures established by the Committee, in its sole discretion. 
 
Notwithstanding the above, if the Participant dies (either before payments commence from the Plan or while such payments
are being made), the balance of the Participant’s Deferred Compensation Account shall immediately become due and payable in one lump sum in cash to the Participant’s beneficiary or, if no beneficiary is designated or then living, to the
Participant’s estate. 
 
(b)
Small Account Balances—Lump Sum Cashout. Notwithstanding the foregoing, in the event the Participant’s Deferred Compensation Account balance is ten thousand dollars ($10,000) or less at the time a distribution of the
Participant’s Deferred Compensation Account balance would commence by reason of the application of this Section, or in the event that a Participant’s remaining Account balance after commencement of the installment options provided for
above is ten thousand dollars ($10,000) or less, the Committee reserves the right to accelerate the payment of such Participant’s Account balance in a lump sum in cash and/or Common Stock (consistent with the general requirements of Section
4.1(a)(i) and (ii) above), notwithstanding the form of benefit payment elected by the Participant under the terms of Article II (for Pension Plan Rollover Deferrals) or Article IV (for all other deferrals), as applicable. For purposes of this
Section, a Participant’s Account balance shall be valued in accordance with the general provisions of Section 3.3(e). 
 
(c) Annuity Option: A Participant whose Retirement Date occurred on or after January 1, 1989 but before January 1,
1999 had the ability to elect to receive payments in any form of annuity offered in the normal course of business by the Company; provided, however, that the election of such method of payment could not result in the receipt of payments on an annual
basis in greater amounts that under a method of payment, if any, previously elected by the Participant. The annuity option provided herein did not involve the transfer by the Company to the Participant of an annuity contract, but merely describes an
optional form of payment. Effective January 1, 1999, this distribution option will no longer be available to Participants whose Retirement Date has not occurred as of such date. 
 
4.2 Hardship Distribution. Notwithstanding any other provisions of the Plan, the Committee may
determine, in the Committee’s sole discretion, to accelerate the payment of amounts accrued in such Participant’s Deferred Compensation Account in the event of the Participant incurring a Hardship. For purposes of this Section, the 

 

11 

Committee may only permit the accelerated payment of an amount not to exceed the amount necessary to satisfy the Hardship liability and, in
no event, may the Committee permit the payment under the Plan of an amount exceeding the Participant’s balance in his or her Deferred Compensation Account as of the date of such withdrawal. 
 
4.3 Early Distribution With Penalty. A request for an
Early Distribution With Penalty of the Participant’s Deferred Compensation Account balance (not including, for these purposes, any Pension Plan Rollover Amounts) may be made by submitting a Deferred Compensation Withdrawal Form in any Plan Year
during an open trading window under the Company’s Insider Trading Policy. The Account balance distributed will be reduced by a penalty of ten percent (10%) of the Account. For purposes of any such Early Distribution With Penalty, the Account
will be valued as of the last day of the month immediately preceding the date on which the request is received and will be paid in a lump sum, in cash and stock (as provided for under the general provisions of Section 4.1), within thirty (30) days
of receipt by the Committee of such Withdrawal Form. 
 
If an Early Distribution With Penalty payment is made, all further deferrals of Fees shall cease for the remainder of the Plan Year and for the subsequent Plan Year. 
 
Any penalty amounts withheld from the Early Distribution With Penalty are taxable income to the Participant,
and may be used by the Committee in its sole discretion. 
 
4.4 Distribution on a Change of Control. In the event of a Change of Control, Participants under the Plan will have the ability to make a one-time election to commence payment of their Deferred Compensation Account balance, in
whatever manner (lump sum or installment) previously chosen by such Participant, no earlier than the January 1st of
the year following the Plan Period during which such Change of Control occurred. Such election shall, consistent with the general provisions of Section 2.2 of the Plan be made by written notice delivered by the Participant to the Secretary not later
than five (5) days before the end of such Plan Period. 
 
ARTICLE V 
ADMINISTRATION OF THE PLAN 
 
5.1 Administration of the Plan. The Board of Directors shall appoint a Committee to administer the
Plan, which shall be comprised of the following three persons: the Vice President and Secretary of the Company, the Vice President of Total Compensation of the Company’s (or as the case may be, Prudential Insurance’s) Human Resources
Department, and a Vice President and Corporate Counsel – Financial Management, of the Company’s Law Department (with the Vice President and Secretary of the Company serving, where appropriate, as the primary contact for questions related
to the Plan’s operation by Participants). The Committee shall maintain such procedures 
 

12 

and records as will enable the Committee to determine the Participants and their beneficiaries who are entitled to receive benefits under the
Plan and the amounts thereof. 
 
5.2 General
Powers of Administration. The Committee shall have the exclusive right, power, and authority to interpret, in its sole discretion, any and all of the provisions of the Plan; and to consider and decide conclusively any questions (whether of fact
or otherwise) arising in connection with the administration of the Plan or any claim for benefits arising under the Plan. Any decision or action of the Committee shall be conclusive and binding on the Company and the Participants. 
 
ARTICLE VI 
 
AMENDMENT AND TERMINATION 
 
6.1 Amendment of the Plan: The Committee shall have the
authority to adopt minor amendments to the Plan without prior approval by the Board of Directors that: 
 
(a) are necessary or advisable for purposes of complying with applicable laws and regulations; 
 
(b) relate to administrative practices under
the Plan (including, but not limited to, the establishment of any procedures or processes or accounts related to the distribution of Common Stock or other amounts under the Plan); 
 
(c) relate to the selection or deletion of additional notional investment options for
Participants in their accounts; or 
 
(d) have an insubstantial financial effect on the Plan. 
 
The Board of Directors shall have the authority to adopt any other amendments to the Plan not encompassed under the terms of the preceding sentence. Any such amendments must be made by written instrument, and notice of such
amendments shall be provided as soon as practicable to Participants after their adoption. 
 
6.2 Limitations on Amendment or Termination of the Plan. The Company reserves the right to amend or terminate the Plan in any respect and at any time, without the consent of Participants or
beneficiaries; provided, however, that the following conditions with respect to such amendment or termination must be satisfied in order for such amendment or termination to be binding and in effect: 
 
(a) Such amendment or termination must be
made pursuant to a written resolution of the Committee which is approved thereafter by the Board of Directors; and 

 

13 

(b) Such amendment or termination resolution may not adversely affect the
rights of any Participant or beneficiary to receive benefits earned and accrued under the Plan prior to such amendment or termination; provided, however, that 
 
(i) any alteration of the notional investment options under the Plan, 
 
(ii) any acceleration of payments of amounts
accrued under the Plan by action of the Committee or the Compensation Committee or by operation of the Plan’s terms; or 
 
(iii) any decision by the Committee or the Compensation Committee to limit participation (or other features of the Plan)
prospectively under the Plan 
 
shall not be deemed to violate this provision. 
 
6.3 Continuation or Termination—Change of Control. In the event of a Change of Control where the Company is not the surviving entity, any successor to the Company may elect to continue or to terminate the Plan (in either
event, assuming any and all liabilities for such Plan); provided, however, that in the event the Plan is terminated by such entity, the Plan shall be terminated in accordance with the requirements of this Article VI. (including, but not limited to,
the requirements of Section 6.2 herein). 
 
ARTICLE VII 
 
GENERAL
PROVISIONS 
 
7.1 Common Stock Subject
to the Plan. The number of shares of Common Stock that may be distributed under the Plan in accordance with Article IV shall be 500,000 shares of Common Stock. 
 
7.2 Participant’s Rights Unsecured and Unfunded. This Plan is an unfunded plan maintained
primarily to provide deferred compensation benefits for Non-Employee Directors, and therefore is exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA. Accordingly, no assets of the Company shall be segregated or earmarked to represent
the liability for accrued benefits under the Plan. Amounts referenced in Participant Account statements are only recordkeeping devices reflecting such liability for accrued benefits, and do not reflect any actual amounts credited. The right of a
Participant (or his or her Beneficiary) to receive a payment hereunder shall be an unsecured claim against the general assets of the Company or any successor to the Company. All payments under the Plan shall be made from the general funds of the
Company or any successor. The Company is not required to set aside money or any other property to fund its obligations under the Plan, and all amounts that may be set aside by the Company prior to the distribution of Account balances under the terms
of the Plan remain the property of the Company (or, if applicable, any successor). 
 

14 

Notwithstanding the foregoing, nothing in this Section 7.1 shall preclude the Company, in
its sole discretion, from establishing a “rabbi trust” or other vehicle in connection with the operation of this Plan, provided that no such action shall cause the Plan to fail to be an unfunded plan designed to provide deferred
compensation benefits for Non-Employee Directors within the meaning of Title I of ERISA. 
 
7.3 No Guarantee of Benefits. Nothing contained in the Plan shall constitute a guaranty by the Company or any other person or entity that the assets of the Company will be sufficient to pay any
benefit hereunder. 
 
7.4 No Creation of
Employee Rights; Plan is Not A Contract of Employment. Participation in the Plan shall not be construed to give or deem any Participant to be an employee of the Company. This Plan shall not constitute a contract of employment between the Company
and any Participant. 
 
7.5 Non-Alienation
Provision. No interest of any person or entity in, or right to receive a benefit or distribution under, the Plan shall be subject in any manner to sale, transfer, anticipation, assignment, pledge, attachment, garnishment, or other alienation or
encumbrance of any kind; nor may such interest or right to receive a distribution be taken, either voluntarily or involuntarily for the satisfaction of the debts of, or other obligations or claims against, such person or entity, including claims for
alimony, support, separate maintenance and claims in bankruptcy proceedings. 
 
7.6 Applicable Law; Severability. The Plan shall be construed and administered under the laws of the State of New Jersey, except to the extent that such laws are preempted by ERISA, if
applicable. In the event any provision of this Plan shall be determined to be illegal or invalid for any reason, the remaining portion(s) shall continue in full force and effect as if such illegal or invalid provision had never been included herein.

 
7.7 Taxes. To the extent required by law,
amounts accrued under the Plan shall be subject to federal and state income, federal social security and federal or state unemployment taxes (if applicable) during the year the services giving rise to such amounts were performed (or, if later, when
the amounts are both determinable and not subject to a substantial risk of forfeiture). The Company shall withhold from any payments made pursuant to the Plan such amounts as may be required by federal, state or local law, and the Company further
reserves the right: (a) to limit or reduce the amounts intended to be deferred under the terms of the Plan as may be necessary or appropriate in order to ensure that any required tax withholdings can be deducted; and/or (b) to require the
Participant to pay any taxes owed on such amounts. 
 
7.8 Excess Payments. If the compensation, years of service, age, or any other relevant fact relating to any person is found to have been misstated, the Plan benefit payable by the Company to a Participant or beneficiary shall
be the Plan benefit which would have been provided on the basis of the correct information. Any excess payments 

 

15 

due to such misstatement, or due to any other mistake of fact or law, shall be refunded to the Company or withheld by it from any further
amounts otherwise payable under the Plan. 
 
7.9
No Impact on Other Benefits. Amounts accrued under the Plan shall not be included in a Participant’s compensation for purposes of calculating benefits under any other plan, program or arrangement sponsored by the Company. 
 
7.10 Data. Each Participant or beneficiary shall
furnish the Committee all proofs of dates of birth and death and proofs of continued existence necessary for the administration of the Plan, and the Company shall not be liable for the fulfillment of any Plan benefits in any way dependent upon such
information unless and until the same shall have been received by the Committee in a form satisfactory to it. 
 
7.11 Incapacity of Recipient. If a Participant or other beneficiary entitled to a distribution under the Plan is living under
guardianship or conservatorship, distributions payable under the terms of the Plan to such Participant or beneficiary shall be paid to his or her appointed guardian or conservator and such payment shall be a complete discharge of any liability of
the Company under the Plan. 
 
7.12 Usage of
Terms and Headings. Words in the masculine gender shall include the feminine and the singular shall include the plural, and vice versa, unless qualified by the context. Any headings are included for ease of reference only, and are not to be
construed to alter the terms of the Plan.  
 

16

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