Document:

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                                                                    Exhibit 10.5

                    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 (the
"Company"), 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 has
been amended and restated effective as of May 12, 1998.

     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). 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. Other terms that are capitalized in the Plan shall be
defined in the same manner as they are defined in the Non-Employee Director's
Pension Plan:

     "Board of Directors" or "Board" means the Board of Directors of the
Company.

     "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.

     "Company" means The Prudential Insurance Company of America.

     "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
<PAGE>

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.

     "Effective Date" means July 1, 1974.

     "ERISA" means the Employee Retirement Income Security Act of 1974, 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 a
trustee of The Prudential Foundation.

     "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.

     "Non-Employee Director's Pension Plan" means The Pension Plan For
Non-Employee Directors Of The Prudential Insurance Company Of America, as
amended and restated May 12, 1998.

     "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.

     "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.

     "Retirement Date" means the first day of the month following the month in
which the Participant terminates his services as a Non-Employee Director.
<PAGE>

                                   ARTICLE II

                           PARTICIPATION REQUIREMENTS
                           --------------------------

    2.1 Eligibility. A Non-Employee Director will be deemed a Participant in
        -----------
the Plan if he or she elects to defer all or a portion of the Fees to be earned
during a Plan Period as provided herein.

    2.2 Elections. 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 five (5) days prior
to 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.

     The Participants may, no later than the last day of the year prior to the
year of their anticipated Retirement Date, amend their election forms for
deferrals related to all Plan Periods (a) to change the previously-elected form
of distribution to another distribution form permitted under Section 4.1, or (b)
to change the starting date for commencement of payments under the Plan to
another definitely determinable date.

                                   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 Deferred
Compensation Account. The Company shall not be required to segregate any amounts
credited to the Deferred Compensation Accounts, which shall be established
merely as an accounting convenience.

    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 day of
<PAGE>

          September 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 day of March, June, September, and
          December in the Plan Period to which such service fee relates to his
          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 Deferred Compensation
          Account on or about the first business day following such meeting.
          Effective January 1, 1998, any such Fees will be credited to a
          Participant's Deferred Compensation Account at the end of the calendar
          quarter during the Plan Period when such meeting occurred.

     3.3 Accrual of Interest. The amounts credited to a Deferred Compensation
         -------------------
Account shall accrue interest as follows:

     (a)  With respect to amounts credited to an applicable Participant's
          Deferred Compensation Account for Plan Periods commencing on the
          Effective Date and ending December 31, 1992, interest shall be accrued
          on balances in such Deferred Compensation Account at a rate compounded
          to yield an effective annual rate corresponding to the rate payable to
          Fixed Dollar Contributions under The Prudential Investment Plan; and

     (b)  With respect to amounts credited to an applicable Participant's
          Deferred Compensation Account for Plan Periods commencing on January
          1, 1993, interest shall be accrued on balances in such Deferred
          Compensation Account at a rate compounded to yield an effective annual
          rate corresponding to the rate payable by the Fixed Rate Fund under
          The Prudential Employee Savings Plan in effect on the first day of the
          calendar year of the Plan Period.

Interest will accrue commencing with the date of crediting until the
Participant's Retirement Date, at which time interest shall accrue on the
declining unpaid balance (if any) of a Participant's Deferred Compensation
Account at a rate determined in the same way.

     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
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 participation in the Plan during such
Plan Period bears to the total number of days in such Plan Period.
<PAGE>

                                   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 credit in
his 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 60 or 120 monthly
          installments, as elected by the Participant in his deferral election
          form, to begin on the Participant's Retirement Date or such later date
          as selected by the Participant. 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.

          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 to the
          Participant's beneficiary or, if no beneficiary is designated or then
          living, to the Participant's estate.

     (b)  Annuity Option: A Participant whose Retirement Date occurs on or after
          --------------
          January 1, 1989 but before January 1, 1999 may 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 may 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 does not involve the transfer by the Company to the
          Participant of an annuity contract, but merely describes an optional
          form of payment, in accordance with the provisions of Section 7.1 of
          the Plan. Effective January 1, 1999, this distribution option will no
          longer be available to Participants whose Retirement Date has not
          occurred as of such date. Any Participant whose Retirement Date is, or
          is anticipated to be, on or after such date will be required to amend
          his or her election forms to remove such annuity form as a
          distribution option if the annuity option has previously been selected
          by the Participant for all or a portion of their Deferred Compensation
          Account balance. This amendment will occur in accordance with the
          requirements of Section 2.2.
<PAGE>

     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 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.

                                    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 and Chief Legal Officer of the Company's Human Resources Department,
and the Vice President of Total Compensation (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 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 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:
<PAGE>

     (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

     (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.

                                   ARTICLE VII

                               GENERAL PROVISIONS
                               ------------------

     7.1 Participant's Rights Unsecured and Unfunded. The Plan at all times
         -------------------------------------------
shall be entirely unfunded. No assets of the Company shall be segregated or
earmarked to represent the liability for accrued benefits under the Plan. 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.
All payments under the Plan shall be made from the general funds of the Company.

     7.2 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.

     7.3 No Creation of Employee Rights. Participation in the Plan shall not be
         ------------------------------
construed to give or deem any Participant to be an employee of the Company.

     7.4 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.

     7.5 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.

     7.6 Taxes. To the extent required by law, amounts accrued under the Plan
         -----
shall be subject to federal social security and unemployment taxes 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
<PAGE>

withhold from any payments made pursuant to the Plan such amounts as may be
required by federal, state or local law.

     7.7 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 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.

     7.8 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.

     7.9 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.

     7.10 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.

     7.11 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.<PAGE>

                                                                    Exhibit 10.6

                   THE PENSION PLAN FOR NON-EMPLOYEE DIRECTORS
                   -------------------------------------------
                 OF THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
                 ----------------------------------------------

     The Pension Plan for Non-Employee Directors of The Prudential Insurance
Company of America (the "Plan") was established by The Prudential Insurance
Company of America (the "Company"), effective as of April 1, 1985 (the
"Effective Date"), for the purpose of providing retirement income for
non-employee directors of the Company (the "Non-Employee Directors"), after
termination of their services on the Board of Directors of the Company. The Plan
has been amended and restated effective as of May 12, 1998.

     The Plan is intended to be, and shall be administered as, an unfunded plan
maintained for the purpose of providing retirement benefits 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). The Plan is also intended to comply with
the provisions of New Jersey Statutes Annotated 17B:18-52.

                                   ARTICLE 1

                                   DEFINITIONS
                                   -----------

     The following capitalized terms shall have the meanings hereinafter set
forth in this Plan. Other terms that are capitalized in the Plan shall be
defined in the same manner as they are defined in the Non-Employee Director's
Deferred Compensation Plan:

     "Board" or "Board of Directors" means the Board of Directors of the
Company.

     "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.

     "Company" means The Prudential Insurance Company of America.

     "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

<PAGE>

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.

     "Director" means any current or future member of the Company's Board of
Directors and those former members of the Company's Board of Directors who have
retired from the Board on or after attaining age seventy (70).

     "Disability" means any injury or illness which in the opinion of a duly
licensed physician acceptable to the Company renders it impossible for a
Director to continue to perform the Director's duties as a member of
the Board of Directors.

     "Effective Date" means April 1, 1985.

     "Employee Director" means a person serving as a Director who is
concurrently an employee or officer of the Company. An individual shall cease to
be an Employee Director and, assuming that they remain on the Board of
Directors, become a Non-Employee Director, upon his or her retirement or other
termination of employment from the Company.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

     "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.

     "Plan" means the Pension Plan for Non-Employee Directors of The Prudential
Insurance Company of America, as stated herein and as from time to time amended.

     "Retirement Benefit" means the annual pension to which a Non-Employee
Director may become entitled pursuant to Article III, determined under either
clause (1) or (2) (but not both) as follows: (1) for any Non-Employee Director
who has retired or terminated pursuant to the provisions of Sections 3.1, 3.2
or 3.3 of the Plan on or before January 1, 1996, such Non-Employee Director's
annual Retirement Benefit is equal to the basic annual retainer paid to such
Director immediately prior to such retirement or termination, reduced, if
applicable, by the provisions of Section 3.2(b); and
<PAGE>

(2) effective January 1, 1996, a Non-Employee Director's annual Retirement
Benefit will be equal to $30,000 (reduced, if applicable, by the provisions of
Section 3.2(b)), provided that such Director satisfies all of the requirements
set forth in Articles II, III and IV of the Plan. Such annual Retirement
Benefit shall be paid in equal monthly installments for the life of the
Non-Employee Director.

     "Years of Service" means the period that begins on the date a Non-Employee
Director is elected or appointed to the Company's Board of Directors and ends on
the date of termination of membership on the Company's Board.

There shall be excluded from Years of Service any period during which a
Non-Employee Director was an Employee Director.

                                  ARTICLE II

                                  ELIGIBILITY
                                  -----------

     2.1 Eligibility. The Directors who are eligible to participate in, and
         -----------
accrue benefits under, this Plan are Non-Employee Directors who are living on or
after the Effective Date.

                                  ARTICLE III

                                   BENEFITS
                                   --------

     3.1 Retirement.
         ----------

     Each Non-Employee Director who has become vested in a Retirement Benefit
pursuant to Article IV and who retires from the Board of Directors on or after
attaining age 70 (or such earlier date as may be required for a Non-Employee
Director's retirement pursuant to resolutions adopted by the Board of Directors)
shall be entitled to receive a Retirement Benefit. Such Retirement Benefit shall
commence being paid on the first day of the month following the later of (1)
such Non-Employee Director's retirement from the Board, or (2) the date this
Plan is established, provided he or she is living on the date the payment of the
Retirement Benefit would otherwise commence.

     3.2 Termination of Board Membership Prior to Retirement Other Than on
         -----------------------------------------------------------------
Account of Disability or Death.
------------------------------
<PAGE>

          (a)  A Non-Employee Director who has become vested in a Retirement
               Benefit pursuant to Article IV and who terminates his or her
               membership on the Board of Directors prior to attaining age 70
               (or such earlier date as may be required for a Non-Employee
               Director's retirement pursuant to resolutions adopted by the
               Board of Directors) for any reason other than Disability or
               death shall be entitled to receive a Retirement Benefit
               commencing on the first day of the month coincident with or next
               following his or her attainment of age 70, provided he or she is
               living on such date.

          (b)  A vested Non-Employee Director who terminates his or her
               membership on the Board of Directors prior to attaining age 70
               may elect to receive a reduced Retirement Benefit. Such reduced
               Retirement Benefit may commence on the first day of the month
               coincident with or next following the Non-Employee Director's
               attainment of age 60 or on the first day of any subsequent month,
               provided such Director is living on such date. The reduction
               shall be five (5) percent multiplied by each year that the
               Retirement Benefit commences prior to age 70; provided however,
               that (i) the reduction at ages less than sixty-six (66) shall be
               lessened by two (2) percent for each Year of Service completed by
               the Director in excess of five (5), but not to less than twenty
               (20) percent, and (ii) the reduction at age 69 shall be zero (0)
               percent if the Director's membership on the Board terminates at
               age 69 under the election rules.

     3.3 Disability.
         ----------

     A Non-Employee Director who has become vested in a Retirement Benefit
pursuant to Article IV and who incurs a termination of membership on the Board
of Directors on account of Disability shall be entitled to receive a Retirement
Benefit commencing on the first day of the month following his or her
termination of Board membership as a result of such Disability, provided he or
she is living on such date.

     3.4 Death.
         -----

     There are no death benefits payable under the Plan. Upon the death of a
Non-Employee Director who is receiving benefits pursuant to this Article III,
the payment of any Retirement Benefits shall immediately cease.

     3.5 Adjustments.
         -----------

     The Retirement Benefit payable to a Non-Employee Director pursuant to
Section 3.1, 3.2, or 3.3 may be increased from time to time, subject to the
approval of the Board and pursuant to the provisions of Article VI.

<PAGE>

                                  ARTICLE IV

                                    VESTING
                                    -------

     4.1  Vesting Schedule. A Non-Employee Director shall vest in his or her
          ----------------
Retirement Benefit in accordance with the following schedule based upon such
Director's Years of Service:

                           Years of Service                   Percent Vested

                           Less than five                                0%
                           Five or more                                100%

<PAGE>

                                    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 and Chief Legal Officer of the Company's Human Resources Department,
and the Vice President of Total Compensation (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 Non-Employee Directors). The
Committee shall maintain such procedures and records as will enable the
Committee to determine the Non-Employee Directors 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 Non-Employee Directors.

                                  ARTICLE VI

                       AMENDMENT AND TERMINATION OF PLAN
                       ---------------------------------

     6.1 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 Non-Employee Directors; 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

  (b) Such amendment or termination resolution may not retroactively reduce or
  adversely affect the amount of any Retirement Benefit payable to any Non-
  Employee Director, or (ii) adversely affect the rights of any Non-Employee
  Director to receive benefits vested under the Plan prior to such amendment or
  termination.
<PAGE>

                                  ARTICLE VII
                                  -----------

                               GENERAL PROVISIONS
                               ------------------

     7.1 Non-Employee Director's Rights Unsecured and Unfunded. The Plan at all
         -----------------------------------------------------
times shall be entirely unfunded. No assets of the Company shall be segregated
or earmarked to represent the liability for accrued benefits under the Plan. The
right of a Non-Employee Director to receive a payment hereunder shall be an
unsecured claim against the general assets of the Company. All payments under
the Plan shall be made from the general funds of the Company.

     7.2 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.

     7.3 No Creation of Employee Rights. Participation in the Plan shall not be
         ------------------------------
construed to give or deem any Non-Employee Director to be an employee of the

<PAGE>

Company, nor does the creation and maintenance of this Plan give no further
rights to any Director to continue as a member of the Board of Directors beyond
those which are inherent in such Director's election or appointment as a member
of the Company's Board of Directors.

     7.4 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.

     7.5 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.

     7.6 Taxes. To the extent required by law, amounts accrued under the Plan
         -----
shall be subject to federal social security and unemployment taxes 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.

     7.7 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 Non-Employee Director shall be the Plan
benefit which would have been provided on the basis of the correct information.
Any excess payments 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.

     7.8 No Impact on Other Benefits. Amounts accrued under the Plan shall not
         ---------------------------
be included in a Non-Employee Director's compensation for purposes of
calculating benefits under any other plan, program or arrangement sponsored by
the Company.

     7.9 Data. Each Non-Employee Director shall furnish the Committee all
         ----
information necessary or appropriate for the administration of the Plan, and the
Company shall not be liable for the fulfillment of any 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.
<PAGE>

     7.10 Incapacity of Recipient. If a Non-Employee Director entitled to a
          -----------------------
Retirement Benefit under the Plan is living under guardianship or
conservatorship, distributions payable under the terms of the Plan to such
Non-Employee Director 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.

     7.11 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.

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