THE IMPAC COMPANIES DEFERRED COMPENSATION PLAN ARTICLE I INTRODUCTION
Exhibit 10.17
THE IMPAC COMPANIES
DEFERRED COMPENSATION PLAN
ARTICLE I
INTRODUCTION
1.1 Purpose. The purpose of this Plan is to enable the Sponsor and Affiliated Companies to provide a competitive tax-deferred capital accumulation vehicle in order to attract and retain key management.
1.2 Effective Date and Term. This Plan is effective as of February 1, 2000 (the Effective Date), unless otherwise expressly provided herein.
1.3 Participation. Participation in this Plan is open only to employees of the Sponsor or any Affiliated Company who meet the requirements specified in Section 4.1 of the Plan and who are selected for participation in the Plan by the Committee. Participation in this Plan by any such employees, and the payment of any benefits under this Plan to any such employee, shall be governed by the terms of this Plan and by the terms of the Participation Agreement entered into with respect to this Plan by the Company and such employee pursuant to Section 1.4 hereof.
1.4 Participation Agreement. As a condition to the commencement of participation in this Plan, each employee approved for participation must enter into an agreement covering such employees participation (a Participation Agreement) which agreement shall be executed by the Sponsor and such employee and, if such employee is employed by an Affiliated Company, such Affiliated Company. Each Participation Agreement shall include such terms and conditions related to the employees participation in the Plan as the Committee may deem appropriate.
1.5 Applicability of ERISA. This Plan is intended to be a top-hat plan -- that is, an unfunded plan maintained primarily for the purpose of providing deferred compensation to a select group of management or highly compensated employees within the meaning of ERISA. As such, the Plan is exempt from the participation and vesting requirements of Part 2 of Title I of ERISA, the funding requirements of Part 3 of Title I of ERISA, and the fiduciary responsibility provisions of Part 4 of Title I of ERISA.
ARTICLE II
DEFINITIONS
2.1 Account. Account shall mean one of the separate Accounts maintained by the Committee pursuant to the provisions of Section 5.1.
2.2 Active Participant. Active Participant shall mean a Participant whose participation in this Plan has been approved pursuant to the provisions of Section 1.3, who has entered into a Participation Agreement pursuant to the provisions of Section 1.4, and whose active participation in the Plan has not been terminated pursuant to the provisions of Section 3.5.
2.3 Affiliated Company. Affiliated Company shall mean any of the following affiliates of the Sponsor which the Board expressly designates as having the status of an Affiliated Company for purpose of this Plan: (a) any corporation which is included in a controlled group of corporations, within the meaning of Section 414(b) of the Code, of which controlled group the Sponsor is also a member; (b) any trade or business which is under common control with the Sponsor within the meaning of Section 414(c) of the Code; (c) any service organization that is included in an affiliated service group, within the meaning of Section 414(m) of the Code, of which affiliated service group the Sponsor is also a member; (d) any other entity required to be aggregated with the Sponsor pursuant to regulations promulgated under Section 414(o) of the Code and (e) any other entity or entities which are designated by the Board as Affiliates as listed on Exhibit A hereto and which adopt this Plan.
2.4 Beneficiary. Beneficiary shall mean, with respect to any Participant, the person or persons and/or entity or entities designated or deemed designated by the Participant pursuant to Section 12.1 hereof to receive such Participants Distributable Benefit payable under the Plan following such Participants death.
2.5 Board; Board of Directors. Board and Board of Directors shall mean the board of directors of the Sponsor.
2.6 Bonuses. Bonuses shall mean bonus compensation which a Participant is entitled to receive from the Company, including but not limited to bonus compensation based on the performance of Sponsor and certain affiliates of Sponsor, such as bonuses to which a Participant may be entitled under an incentive plan. Bonuses shall not include any amounts not currently includible in such Participants gross income by reason of Code Section 402(e)(3) and/or Code Section 125.
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2.7 Bonus Deferrals. Bonus Deferrals shall mean Bonuses deferred at the election of the Participant pursuant to a Compensation Deferral Agreement under the provisions of Article IV.
2.8 Code. Code shall mean the Internal Revenue Code of 1986, as amended.
2.9 Commissions. Commissions shall mean fees paid to salespersons as compensation for their services as specified by the Company on its payroll records. Commissions shall not include any amounts not currently includible in such Participants gross income by reason of Code Section 402(e)(3) and/or Code Section 125.
2.10 Commission Deferrals. Commission Deferrals shall mean Commissions deferred at the election of the Participant pursuant to a Compensation Deferral Agreement under the provisions of Article IV.
2.11 Committee. Committee shall mean, as of any date of reference, the committee, if any, then authorized and appointed to administer this Plan as set forth in Section 3.1 hereof.
2.12 Company. Company shall mean the Sponsor or an Affiliated Company. A reference to the term Company shall be deemed to be (a) a reference to the Sponsor with respect to Participants who are employees of the Sponsor and (b) a reference to an Affiliated Company with respect to Participants who are employees of such Affiliated Company.
2.13 Compensation. Compensation shall mean the aggregate of Salary, and Bonuses and Commissions, including any amounts not currently includible in such Participants taxable income by reason of Code Section 402 or Code Section 125.
2.14 Compensation Deferrals. Compensation Deferrals shall mean the Compensation amounts deferred at the election of the Participant pursuant to a Compensation Deferral Agreement under the provisions of Article IV (including Bonus Deferrals, Salary Deferrals and Commission Deferrals).
2.15 Compensation Deferral Agreement. Compensation Deferral Agreement shall mean the agreement entered into by a Participant to defer Compensation pursuant to the provisions of Sections 4.2.
2.16 Disability. Disability is deemed to exist, with respect to a Participant, if and when, as a result of injury or sickness, the Participant is permanently impaired to such an extent that he or she cannot perform the material duties of his or her position of employment with the Company. The determination hereunder as to whether and when a Participant has a Disability shall be made by the Committee, and for purposes of assisting the Committee in making any such determination, the Committee may require the
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Participant to submit to an examination by a competent physician or medical clinic selected by the Committee.
2.17 Distributable Benefit. Distributable Benefit shall mean the vested interest of a Participant in his or her Account, which is determined and distributable to the Participant in accordance with the provisions of Articles V, VI, VIII and XI.
2.18 Early Retirement. Early Retirement shall mean retirement from service for the Sponsor and all Affiliates on or after the date that the sum of the Participants age plus Years of Service equals or exceeds 65.
2.19 Effective Date. Effective Date shall mean January 1, 2000.
2.20 ERISA. ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended.
2.21 Investment. Investment shall mean the one or more funds under one or more variable life insurance contracts or one or more mutual funds (or any other investment) deemed suitable by the Committee for purposes of determining the investment experience adjustments that shall be made to a Participants Account pursuant to the provisions of Section 5.4.
2.22 Normal Retirement. Normal Retirement shall mean retirement from service for the Sponsor and all Affiliates on or after the date that the Participant attains age 65.
2.23 Participant. Participant shall mean any employee of the Company who is selected and approved for participation in this Plan as provided in Section 1.3 hereof and who has executed a Participation Agreement as required under Section 1.4 hereof.
2.24 Plan Year. Plan Year shall mean January 1 through December 31.
2.25 Salary. Salary shall mean, with respect to any Participant, the base salary which such Participant is entitled to receive from the Company, excluding any amounts not currently includible in such Participants gross income by reason of Code Section 402(e)(3) and/or Code Section 125. Salary shall not include any Bonuses or Commissions which a Participant is entitled to receive from the Company.
2.26 Salary Deferrals. Salary Deferrals shall mean Salary amounts deferred at the election of the Participant pursuant to a Compensation Deferral Agreement under the provisions of Article IV.
2.27 Sponsor. Sponsor shall Impac Funding Corporation, a California corporation.
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2.28 Termination. Termination shall mean the voluntary or involuntary termination of a Participants employment with the Sponsor and all Affiliated Companies for any reason (including Disability or death).
2.29 Valuation Date. Valuation Date shall mean the last of each calendar quarter which is also a business day, as of which the fair market value of Participants Accounts shall be determined.
2.30 Year of Service. Year of Service shall mean any completed 12 month Period of Service including periods prior to the Effective Date. A Period of Service begins on the date an employee first performs an hour of service and ends on the date his or her employment ends. Employment ends on the date that the employee quits, retires, is discharged, dies or (if earlier) the first anniversary of his or her absence for any other reason. Any Period of Service less than 12 months shall be disregarded.
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ARTICLE III
ADMINISTRATION OF THE PLAN
3.1 Administration By Committee. This Plan shall be administered by a committee composed of at least four (4) individuals appointed from time to time by the Board (the Committee); provided, however, that if the Board does not appoint a committee, the Board shall constitute the Committee. Any member of the Board or the Committee may be a Participant in this Plan, provided, however, that any action to be taken by the Board or Committee solely with respect to the particular interest in this Plan of a Board or Committee member who is also a Participant in this Plan shall be taken by the remaining members of the Board or Committee. Notwithstanding the foregoing, in the event of a Change in Control of the Sponsor, the members of the Committee shall be elected pursuant to a majority vote of the Participants. Each Participant shall have one vote in any such election, regardless of the value of their Accounts. An election to appoint new Committee members following a Change in Control of the Sponsor shall be held by the Committee within 60 days of the date of such Change in Control pursuant to procedures established by the Committee. At a minimum, such procedures shall provide that Participants shall have the right to submit written nominations of one or more persons to serve on the new Committee and all Participants shall be provided with written notice of any such election at their last known residence at least 30 days before the date of the election.
3.2 Board and Committee Authority; Rules and Regulations. The Committee shall have discretionary authority to (a) make, amend, interpret and enforce all appropriate rules and regulations for the administration of the Plan, and (b) decide or resolve, in its discretion, any and all questions, including interpretations of the Plan, as may arise in connection with the Plan. The Committee shall have authority to take or approve, in its discretion, all such actions in relation to the Plan (including, without limitation, actions described in the preceding sentence) as may be taken or approved by the Board; provided, however, that, except as provided in Section 8.2, the Committee shall have no authority to (a) amend, suspend or terminate the Plan or (b) to designate or remove a Company from the list of Affiliates authorized to participate in the Plan. Notwithstanding the foregoing, but subject to the provisions of Section 8.2, the Board may, by written notice to the Committee, withdraw all or any part of the Committees authority at any time, in which case such withdrawn authority shall immediately revest in the Board. The decision or action of the Committee in respect of any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest in the Plan.
3.3 Appointment of Agents. In the administration of the Plan, the Board and/or the Committee may from time to time employ agents (which may include officers and/or employees of the Sponsor or any Affiliated Company) and delegate to them such
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administrative duties as it sees fit and may from time to time consult with counsel who may be counsel to the Sponsor or any Affiliated Company.
3.4 Reports. Within a reasonable amount of time following each calendar quarter, the Committee shall cause to be given to each Participant a statement showing the dollar amount of his or her Account under the Plan as of the end of such calendar quarter.
3.5 Termination of Active Participation. In the event that the Committee determines that a Participants employment performance is no longer at a level which merits continued active participation in the Plan, the Committee may terminate such Participants active participation in the Plan (without necessarily terminating such Participants employment) as of the date specified by the Committee. After the effective date of a Participants termination of active participation in the Plan, such Participant shall not be eligible to make Compensation Deferrals under the Plan nor shall such Participant be entitled to have credited to his or her Account Compensation Deferrals pursuant to the provisions of Section 5.2; nevertheless, such a Participant shall be entitled to have his or her Account adjusted as provided in Section 5.3 hereof.
3.6 Leave of Absence. In the event the Participant takes a leave of absence from active employment with the Sponsor and all Affiliated Companies, the Committee shall determine, in its discretion, whether such leave of absence shall be deemed to constitute, a Termination for purposes of the Plan.
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ARTICLE IV
COMPENSATION DEFERRALS
AND COMPANY CONTRIBUTIONS
4.1 Eligibility to Make Compensation Deferrals. Subject to the limitations of this Article IV, each employee who, as of the last day of the Plan Year immediately preceding the Plan Year for which an eligibility determination is being made (the Determination Date), meets at least one of the following requirements, shall be eligible to enter into a Compensation Deferral Agreement to make Compensation Deferrals and become a Participant, effective as of first day of the Plan Year:
| (a) The employee is designated as, and performs the functions of an officer of the Company having the rank of at least a Vice President and the employees annual base salary as of the Determination Date was at least the greater of: (i) $80,000 or (ii) the amount specified in Section 414(q)(1)(B)(i) of the Internal Revenue Code; or |
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| (b) The employee is designated as, and performs the functions of an officer of the Company having the rank of at least a Vice President and the employees Compensation actually received in the calendar year ending on the Determination Date was at least the greater of: (i) $80,000 or (ii) the amount specified in Section 414(q)(1)(B)(i) of the Internal Revenue Code. |
4.2 Election to Make Compensation Deferrals.
| (a) Salary Deferrals. Each Active Participant who desires to make Salary Deferrals for a Plan Year shall enter into a Compensation Deferral Agreement for such year specifying the amount of Salary for such year to be deferred (stated in terms of a whole percentage of Salary not to exceed 50%) and such other information as the Committee shall determine. The amount of Salary Deferrals elected for a Plan Year shall not be less than 5% of Salary. |
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| (b) Monthly Bonus/Commission Deferrals. Each Active Participant who desires to make Deferrals of monthly Bonuses or Commissions for a Plan Year shall enter into a Compensation Deferral Agreement for such year specifying the amount of monthly Bonuses or Commissions for such year to be deferred (stated after in terms of a whole percentage of Bonus or Commission Deferrals not to exceed 100%) and such other information as the Committee shall determine. The amount of monthly Bonus or Commission Deferrals elected for a Plan Year shall not be less than 5% of monthly Bonuses or Commissions. |
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| (c) Quarterly Bonus/Commission Deferrals. Each Active Participant who desires to make Deferrals of quarterly Bonuses or Commissions for a Plan Year shall enter into a Compensation Deferral Agreement for such year specifying the amount of quarterly Bonuses or Commissions for such year to be deferred (stated in terms of a whole percentage not to exceed 100%) and such other information as the Committee shall determine. The amount of quarterly Bonus or Commission Deferrals elected for a Plan Year shall not be less than 5% of quarterly Bonuses or Commissions. |
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| (d) Annual Bonus/Commission Deferrals. Each Active Participant who desires to make Deferrals of annual Bonuses or Commissions for a Plan Year shall enter into a Compensation Deferral Agreement for such year specifying the amount of annual Bonuses or Commissions for such year to be deferred (stated in terms of a whole percentage not to exceed 100%) and such other information as the Committee shall determine. The amount of annual Bonus or Commission Deferrals elected for a Plan Year shall not be less than 5% of annual Bonuses or Commissions. |
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| (e) Procedures. A Compensation Deferral Agreement under this Section 4.2 shall not be effective unless it is executed by the Participant and returned to the Committee before the first day of the first Plan Year with respect to which the Agreement relates. Once executed, a Compensation Deferral Agreement shall remain in effect for all subsequent Plan Years unless revoked or modified in writing by the Participant before the first day of the Plan Year for which the revocation or modification is to take effect. An election to make Compensation Deferrals for a Plan Year (including a failure to revoke or modify a prior election in a timely manner), shall be irrevocable after the beginning of the Plan Year with respect to which the election relates. A Participants failure to revoke or modify his original deferral election in writing before the first day of the following Plan Year shall constitute a waiver by the Participant of the Participants right to elect a different deferral amount and shall constitute an election to make deferrals as previously elected and shall apply as of the new Plan Year. |
4.3 Continuing Participation. Once an employee becomes eligible to participate in the Plan, the employee shall continue to be eligible to participate in the Plan until eligibility for participation is terminated as provided in Section 3.5.
4.4 No Deferrals After a Termination. No Compensation Deferrals shall be made after a Participant terminates employment with the Company.
4.5 Spousal Consent. Compensation Deferrals under this Article IV shall not be subject to the consent of the Participants spouse, if any.
4.6 Withholding. No deferral election shall reduce a Participants compensation below the amount necessary to pay any applicable employment taxes on amounts deferred,
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any income tax applicable to compensation that is not deferred or any amount required to be withheld to fund any other benefit or plan of the Company.
4.7 Company Contributions. Each participating Company may, in its sole discretion, make a Company Contribution to the Plan in such amount as the Company, in its sole discretion determines. Company Contributions shall be allocated among the Accounts of Participants as specified by each Company in its sole discretion.
4.8 Special Provisions for 2000 Salary Deferrals. Notwithstanding the requirement of Section 4.2 that elections to defer Compensation must be made before the first day of the Plan Year, Participants shall be permitted to make Compensation Deferrals for the period beginning on February 1, 2000 and continuing through December 31, 2000 (the 2000 Deferral Period) pursuant to this Section 4.8. A Compensation Deferral Agreement under this Section 4.8 shall not be effective unless it is executed by the Participant and returned to the Committee before January 25, 2000. A Participants election to make Compensation Deferrals for the 2000 Deferral Period shall be irrevocable after January 25, 2000.
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ARTICLE V
ACCOUNTS; VALUATION OF ACCOUNTS; VESTING
5.1 Separate Accounts for Participants. The Committee shall have the responsibility to keep separate Accounts for each Participant in accordance with the provisions of this Article V reflecting amounts credited to the Participant under the Plan (subject to the restrictions set forth in Section 9.1 below). Each Participants Account shall represent a book reserve in the name of the Participant.
5.2 Crediting of Compensation Deferrals to Participants Accounts. All Compensation Deferrals and all Company Contributions made for a particular year shall be credited to separate Accounts (the Compensation Deferral Account and the Company Contribution Account) for each Participant by whom such deferrals are made.
5.3 Adjustments for Investment Experience. Each Participants Account(s) shall be adjusted as of each Valuation Date. The adjustments made shall be those adjustments reflecting income, gains and losses that would have been made to the Participants Account(s) had the dollar value of the Account been invested in the Investments selected by the Participant pursuant to the provisions of Section 5.4.
5.4 Designation of Investments. For purposes of determining the adjustments for investment experience set forth in Section 5.3 above, the dollar value of each Participants Account(s) shall be deemed to be invested in accordance with the Participants investment designation in one or more Investments established by the Committee pursuant to rules established by the Committee. The Committee may, at its discretion, establish alternative Investments or eliminate any previously established Investments at any time and from time to time. In accordance with rules established by the Committee, each Participant may elect the Investment in which his or her Account is deemed invested.
5.5 Valuation of Accounts. A Participants Account(s) under the Plan shall be valued by the Committee as of each Valuation Date. A Participants Account(s) shall be calculated by starting with the balance of the Account as of the prior Valuation Date (assuming a $0 balance for the initial Valuation Date) and by (a) adding to the Participants Account those amounts, if any, credited to the Account of such Participant under Section 5.2 above since the last Valuation date, (b) making the adjustments to such Participants Account set forth in Section 5.3 above since the last Valuation Date, and (c) subtracting the aggregate amount of distributions or withdrawals made since the last Valuation Date to or with respect to such Participant.
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5.6 Vesting of Accounts. Participant Accounts shall vest in accordance with the following provisions:
| (a) Compensation Deferrals Account. A Participant shall be fully vested at all times in the amount of their Compensation Deferrals Account. |
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| (b) Company Contributions Account. A Participants Company Contributions Account shall become fully vested upon the Participants Early Retirement, Normal Retirement, death or Disability while employed by the Company or upon a Change in Control as defined in Article XI. In addition, a Participants Company Contributions Account shall become vested in accordance with the following schedule: |
| Years of Participation |
| Vested Percentage |
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| Less than 3 |
| 0 | % |
| 3 or more |
| 100 | % |
| (c) Year of Participation. For purposes of this Section 5.6(b), a Year of Participation shall be defined as a twelve consecutive month period beginning on the date that the Company Contribution is approved by the Board of Directors of the Company electing to make a Company Contribution and ending on the anniversary of such date. No credit shall be given for partial years of participation. |
5.7 Forfeitures. Any amounts not vested at the time of a Participants Termination or upon termination of the Plan as provided in Section 8.1 shall be forfeited.
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ARTICLE VI
BENEFITS
6.1 Eligibility. Any Participant who incurs any Termination shall receive his or her Distributable Benefit in an amount equal to the vested balance of the Participants Accounts as of the Valuation Date immediately following such Termination. Except as otherwise provided in Article XI hereof, a Participants Distributable Benefit shall be paid at the times and in the amounts specified in this Article VI. A Participants Distributable Benefit shall be paid (or commenced to be paid) within 30 days after the first Valuation Date following such Termination or as soon as practicable thereafter.
6.2 Form of Plan Benefit. Any Participant or Beneficiary who is entitled to receive his or her Distributable Benefit shall receive such Benefit in the form of a lump sum payment unless (a) the value of the Participants Accounts exceeds $100,000 in the aggregate, and (b) the Participant elects in accordance with the provisions of Section 6.3 to have his or her Distributable Benefit paid in substantially equal annual payments payable over fifteen (15) years. In the event a Participant elects to have his or her Distributable Benefit paid in substantially equal annual payments, the investment experience adjustments set forth in Section 5.3 shall continue to be made to the Participants Account until the final payment is made to the Participant, reducing his or her Account balance to zero.
6.3 Election of Form of Benefit. A Participant shall elect the form in which his or her Distributable Benefit will be paid in the event of a Termination on account of Early Retirement, Normal Retirement, death, or Disability in his or her Initial Participation Agreement. Except to the extent that the Participant qualified for a Hardship Withdrawal as provided in Section 6.4 or elects a Short Term Pay-Out as provided in Section 6.5, the Participants election as to the timing and form of distribution that is made on the Participants Initial Participation Agreement shall apply to all subsequent Compensation Deferrals and shall be irrevocable once made.
6.4 Hardship Withdrawals. A Participant may withdraw from his or her Compensation Deferral Account Participant Deferrals previously made, but only if the Committee determines that the Participant has an unforeseeable emergency and that a withdrawal is reasonably necessary in order to satisfy the emergency need.
| (a) An unforeseeable emergency, as used in this Section 6.4, shall mean severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or a dependent (as defined in Code Section 152(a)) of the Participant, loss of the Participants property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. |
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| (b) The determination as to whether a withdrawal is reasonably necessary to satisfy an unforeseeable emergency need is to be made on the basis of all relevant facts and circumstances. However, a withdrawal shall be necessary in order to satisfy an immediate and heavy financial need only if: | ||
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| (i) The amount of the withdrawal is not in excess of the amount required to relieve the emergency need or in excess of the amount that such need could not be satisfied from other sources that are reasonably available to the Participant. The amount of any hardship withdrawal may include any amounts necessary to pay federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution. | |
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| (ii) The Participant submits a signed statement to the Committee, on which the Committee can reasonably rely, to the extent that the need cannot be relieved: | |
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| (I) Through reimbursement or compensation by insurance or otherwise; | |
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| (II) By reasonable liquidation of the Participants assets, to the extent such liquidation would not itself cause an immediate and heavy financial need; | |
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| (III) By cessation of deferrals under the Sponsors Retirement Savings Plan; or | |
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| (IV) By other withdrawals, distributions or nontaxable loans from any plan maintained by the Company or any other employer, or by borrowing from commercial sources on reasonable commercial terms. | |
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| (iii) A Participants resources shall be deemed to include those assets of his or her spouse and minor children that are reasonably available to the Participant. | |
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| (iv) A Participant who makes a hardship withdrawal pursuant to this Section 6.4 shall not be eligible to make Compensation Deferrals for the taxable year of the Participant immediately following the taxable year of such hardship withdrawal. | |
6.5 Short Term Pay-Outs. A Participant may designate in advance on his or her Compensation Deferral Agreement the time and amount of one or more withdrawals of Compensation Deferrals (but not investment earnings thereon) from his or her Account, subject to the following rules: (a) A Participant may designate a time for withdrawal not earlier than two years after the year that Compensation was deferred under such
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Compensation Deferral Agreement which otherwise would have been paid absent the deferral election (such amount to be designated as payable after 2, 3, 5 or 10 years); and (b) such election shall be irrevocable. Notwithstanding a Participants election to receive a Short Term Pay-Out in a particular dollar amount, the maximum amount payable as a Short Term Pay-Out shall be limited to the lesser of (a) the account balance of the Participants Compensation Deferrals Account or (b) the dollar value of the Compensation Deferrals with respect to the Plan Year for which the Deferral was elected, each determined as of the Valuation Date preceding the payment of such Short Term Pay-Out.
6.6 Disputes. In the event of a dispute between a Participant and the Company concerning the amount of the Participants Distributable Benefit, the claims procedures and mandatory arbitration provisions of Article VII shall apply.
6.7 Lump Sum Payment of Withdrawals. All Short Term Pay-Outs shall be paid to Participants as soon as reasonably practicable following the approval by the Committee of a properly completed withdrawal request. All Short Term Pay-Outs shall be made in a single lump sum payment in cash.
6.8 Lump Sum Payment Upon Termination of Plan. Upon a termination of the Plan pursuant to Section 8.1 or Section 8.2, all Distributable Benefits shall be paid to Participants (including Participants receiving installment payments), in the form of a single lump sum payment in cash within 30 days after the first Valuation Date following termination of the Plan, or as soon as practicable thereafter.
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ARTICLE VII
APPLICATION FOR BENEFITS
7.1 Initial Application. In order for a Participant to receive or commence receiving his or her Distributable Benefit, such Participant (or, in the case of a Participant who incurs a Termination by reason of death, the Participants Beneficiary) must file a written application for such Plan benefit (an Initial Application for Benefits) with the Committee. The Initial Application for Benefits shall contain at least the following information:
| (a) The Participants name; |
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| (b) The Participants date of Termination and the reason for such Termination (that is, whether such Termination is on account of the Participants death, Disability or Retirement); |
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| (c) A brief statement setting forth the basis (with references to pertinent Plan provisions where applicable) of the Participants claim for his or her Distributable Benefit; and |
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| (d) Such other documents and information as the Committee may reasonably require. |
Notwithstanding the foregoing, if the Committee determines, based on such evidence as it deems appropriate, that a Participant has incurred Termination (or that the Plan has been terminated) and that such Participant (or other person claiming benefits with respect to such Participant) would be entitled, but for the failure to file an application for benefits, to commence receiving benefit payments under this Plan, then the Committee may, in its discretion, deem an application for such benefits to have been filed.
7.2 Action on Applications. At such time as the Committee receives any Initial Application for Benefits (hereinafter shall be referred to as a Claim, and the person filing any Claim shall be referred to hereinafter as a Claimant), the Committee shall review the Claim, together with other pertinent information (including any additional information the Committee may reasonably request from the Claimant), and shall allow or deny the Claim. The Committee shall provide written notice to the Claimant of the Committees decision to allow or deny the Claim (a Notice of Action on Claim) within 60 days after the Committee receives the Claim. If the Claim is denied, the Notice of Action on Claim shall include the following information:
| (a) The specific reasons for the denial; |
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| (b) Specific reference to pertinent Plan provisions on which the denial is based; |
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| (c) If applicable, a description of any additional information or material necessary to perfect the Claim, and an explanation of why such information or material is necessary; and |
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| (d) An explanation of the claims review procedure. |
7.3 Review Procedure.
| (a) A Claimant is entitled to request the Committee to review any denial by the Committee of his or her Claim. The request for review must be submitted in writing to the Committee within 60 days after the date the Notice of Action on Claim is deemed given pursuant to Section 12.6 hereof. If the Claimant fails to make a timely request for review, the Claim will be deemed conclusively to be denied. The Claimant or his or her representative shall be entitled to review all pertinent documents and to submit relevant issues and comments to the Committee in writing. |
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| (b) The Committee shall review the Claim and shall render the final decision to allow or deny the Claim. The Committee shall give written notice of its decision to the Claimant within 60 days after it receives the written request for review. If the Claim is denied, such written notice shall recite the facts on which the Committee based its decision as well as its reasons therefor, with specific reference to pertinent Plan provisions where applicable. |
7.4 Mandatory Arbitration. Following exhaustion of all administrative remedies as described in Sections 7.1-7.4, above, in the event of any unresolved dispute under the provisions of this Plan, such dispute shall be submitted to arbitration in accordance with the provisions of Section 12.12 of the Plan.
7.5 Claims By Representative. In the event that any person who is entitled (or required) to file a Claim under this Article VII is deceased or is mentally or physically incapacitated in a manner that prevents such person from filing such Claim, then such Claim may be filed by another person on behalf of such Claimant, subject to such other persons providing to the Committee or Committee, as applicable, reasonable verification of such other persons authorization to act on the Claimants behalf.
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ARTICLE VIII
CHANGES TO THE PLAN
8.1 Termination, Suspension or Amendment of Plan by Board. Subject to the provisions of Section 8.2, the Board may, in its sole discretion, terminate or suspend this Plan at any time or from time to time, in whole or in part, and, except as otherwise provided by the Board, no further Compensation Deferrals or Company Contributions shall be credited to Participants Accounts as of the date of such termination or suspension. Subject to the provisions of Section 8.3, the Board may amend this Plan at any time or from time to time, and any amendment may provide benefits different in kind and/or amount from those herein set forth. Notwithstanding the foregoing, in the case of any termination, suspension or amendment of this Plan, such termination, suspension or amendment shall not adversely affect (a) the Account balance of any such Participant as of the effective date of such termination, suspension or amendment, (b) the Participants right to the investment experience adjustments after any suspension or amendment pursuant to the provisions of Section 5.3, (c) the Participants right to investment experience adjustments after termination of the Plan, up to and including the effective date of such termination, pursuant to the provisions of Section 5.3, or (d) the right or ability of any such Participant (and, if applicable, such Participants Beneficiary) to receive his or her vested Distributable Benefit in accordance with the terms of this Plan as in effect immediately prior to such termination, suspension or amendment. Any termination, suspension or amendment of this Plan by the Board shall be binding on each Affiliated Company, without further action by any such Affiliated Company.
8.2 Termination of Plan Upon a Change in Control. Notwithstanding the provisions of Section 8.1 of the Plan, upon the occurrence of a Change in Control, the Committee may, in its sole discretion, elect to terminate all or a portion of this Plan, in which case no further Compensation Deferrals or Company Contributions shall be credited to Participants Accounts as of the date of such termination and benefits shall be paid out as soon as practicable thereafter as provided in Section 6.8. In the case of any termination of the Plan by the Committee, such termination shall not adversely affect (a) the Account balance of any such Participant as of the effective date of such termination, (b) the Participants right to investment experience adjustments after termination of the Plan, up to and including the effective date of such termination, pursuant to the provisions of Section 5.3, or (c) subject to the provisions of Section 6.8, the right or ability of any such Participant (and, if applicable, such Participants Beneficiary) to receive his or her vested Distributable Benefit in accordance with the terms of this Plan as in effect immediately prior to such termination. Any termination of this Plan by the Committee pursuant to this Section 8.2 shall be binding on each Affiliated Company, without further action by any such Affiliated Company.
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8.3 Amendment of Plan Following a Change in Control. Notwithstanding the provisions of Section 8.1 of the Plan, upon the occurrence of a Change in Control of the Sponsor, if the Committee does not terminate the Plan as provided in Section 8.2, the Plan shall continue in force as provided in Section 12.4: provided, however, that for a period of 24 months following the date of a Change in Control of the Sponsor, no amendment to the Plan shall be effective unless such amendment is consented to in writing by a majority of Plan Participants pursuant to procedures established by the Committee.
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ARTICLE IX
FUNDING
9.1 In General. Benefits under this Plan shall be payable solely from the general assets of the Sponsor (and, with respect to any Participant who is an employee of an Affiliated Company, also from the general assets of such Affiliated Company), and no person shall be entitled to look to any other source for payment of such benefits. The Sponsor (and, if applicable, any Affiliated Company) shall have and possess all title to, and beneficial interest in, any and all funds or reserves maintained or held by the Sponsor (or such Affiliated Company) on account of any obligation to pay benefits as required this Plan, whether or not earmarked as a fund or reserve for such purpose; any such funds, other property or reserves shall be subject to the claims of the creditors of the Sponsor (or such Affiliated Company), and the provisions of this Plan are not intended to create, and shall not be interpreted as vesting, in any Participant, Beneficiary or other person, any right to or beneficial interest in any such funds, other property or reserves. Nothing in this Section 9.1 shall be construed or interpreted as prohibiting or restricting the establishment of a grantor trust (within the mean of Code Section 671) from which benefits under this Plan may be payable, so long as such trust or contract does not cause the plan to be funded for purposes of Sections 201(a), 301(a)(3) or 401(a)(1) of ERISA.
9.2 Establishment of Rabbi Trust. The Sponsor has established (or will establish) a trust (Trust) substantially in the form attached hereto as Exhibit B for the purpose of funding benefits under this Plan as provided in this Article IX and for the purpose of paying the reasonable legal and administration fees and expenses incurred by Participants and their Beneficiaries in connection with lawsuits, actions or other proceedings brought by such persons to enforce their rights under the Plan.
9.3 Funding of Rabbi Trust. Subject to the amendment or termination of this Plan and the restrictions set forth in Section 9.1, the Company shall contribute to the Trust, on behalf of each Participant, the amount of Compensation Deferrals made by such Participant and the amount of any Company Contribution allocated to such Participants Account. Amounts corresponding to Salary Deferrals for each payroll period shall be contributed to the Trust as soon as reasonably practicable following the end of such payroll period. Bonus Deferrals for a Plan Year shall be contributed to the Trust as soon as reasonably practicable following the date on which such Bonus amounts otherwise would have been paid to the Participant.
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ARTICLE X
AFFILIATED COMPANIES
10.1 Affiliated Company Participation. The Board of Directors may revoke or modify an Affiliated Companys participation in this Plan at any time and for any or no reason, or terminate this Plan with respect to such Affiliated Companys employees and Participants, subject to the provisions of Section 8.1 concerning changes in the Plan.
10.2 Adoption Agreement. Any Affiliated Company participating in the Plan shall adopt the Plan and shall agree to be bound by the terms and conditions of the Plan and any future changes made by the Board to the Plan.
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ARTICLE XI
CHANGE IN CONTROL
11.1 Change in Control. As used in this Plan, Change in Control shall mean the following and shall be deemed to occur if any of the following events occur:
| (a) Any person, as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act), is or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Impac Mortgage Holdings Company (the Parent) representing 50% or more of the combined voting power of the Parents then outstanding voting securities. | |
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| (b) Any person, as such term is used in Sections 13 (d) and 14(d) of the Exchange Act, other than any person who were the beneficial owners of securities of Impac Funding Corporation, a California corporation, as January 1, 2000, or a direct or indirect subsidiary of Parent (Parent Subsidiary), is or becomes the beneficial owner (as defined in Rule 13d-3 under the 50% or more of the combined voting power of Sponsors then outstanding voting securities). | |
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| (c) During any period of two consecutive years, individuals who, as of the beginning of such period, constitute the Parents Board of Directors (the Parents Incumbent Board) cease for any reason to constitute at least a majority of the Parents Board of Directors, unless the election, or nomination for election by the Parents stockholders, of each new director is approved by a vote of at least two-thirds of the directors then comprising the Parents Incumbent Board. | |
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| (d) During any period of two consecutive years, individuals who, as of the beginning of such period, constitute the Sponsors Board of Directors (the Sponsors Incumbent Board) cease for any reason to constitute at least a majority of the Sponsors Board of Directors, unless the election, or nomination for election by the Sponsors stockholders, of each new director is approved by a vote of at least two-thirds of the directors then comprising the Sponsors Incumbent Board. | |
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| (e) The stockholders of the Parent approve a merger or consolidation of Parent with any other corporation, other than the following | |
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| (i) A merger or consolidation which would result in the voting securities of the Parent outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities or another entity) more |
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| than 50% of the combined voting power of the voting securities of the Parent or such other entity outstanding immediately after such merger or consolidation; or |
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| (ii) A merger or consolidation effected to implement a recapitalization of the Parent (or similar transaction) in which no person acquires 50% or more of the combined voting power of the Parents then outstanding voting securities. |
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| (f) The stockholders of the Sponsor approve a merger or consolidation of Sponsor with any other corporation, other than the following | |
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| (i) A merger or consolidation which would result in the voting securities of the Sponsor outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being 50% of the combined voting power of the voting securities of the Sponsor or such other entity outstanding immediately after such merger or consolidation); or |
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| (ii) A merger or consolidation effected to implement a recapitalization of the Sponsor (or similar transaction) in which no person acquires 50% or more of the combined voting power of the Sponsors then outstanding voting securities; or |
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| (iii) A merger or consolidation with a Parent Subsidiary. |
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| (g) The stockholders of Parent approve a plan of complete liquidation of the Parent or an agreement for the sale or other disposition by the Parent of all or substantially all of the Parents assets. | |
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| (h) The stockholders of Sponsor approve a plan of complete liquidation of the Sponsor or an agreement for the sale or other disposition by the Sponsor of all or substantially all of the Sponsors assets to a person that is not a Parent Subsidiary. |
Notwithstanding the preceding provisions of this Section 11.1, a Change in Control shall not be deemed to have occurred (1) if the person described in the preceding provisions of this Section 11.1, is an underwriter or underwriting syndicate that has acquired the ownership of 50% or more of the combined voting power of the Parents then outstanding voting securities solely in connection with a public offering of the Parents securities, or (2) if the person described in the preceding provisions of this Section 11.1 is an underwriter or underwriting syndicate that has acquired the ownership of 50% or more of the combined voting power of the Sponsors then outstanding voting securities solely in connection with a public offering of the Sponsors securities. Further, a Change of Control of any one participating Company shall be deemed to be a Change in Control only
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with respect to employees of that Company and shall not be deemed to be a Change in Control with respect to employees of any other participating Company.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Designation of Beneficiary. A Participant shall be entitled to designate one or more individuals or entities (including a trust or trusts), in any combination, as his or her Beneficiary or Beneficiaries to receive any Plan benefit payments to which such Participant is entitled as of, or by reason of, his or her death; provided, however, that the designation of any individual or entity other than the Participants spouse shall be effective only with the consent of the Participants spouse. Any such designation may be made or changed at any time prior to the Participants death by written notice filed with the Committee, with such written notice to be in such form and contain such information as the Committee may from time to time determine. In the event that (a) a Beneficiary designation is not on file or is not effective at the date of a Participants death, (b) no Beneficiary survives the Participant, or (c) no Beneficiary is living at the time any payment becomes payable under this Plan, then, for purposes of making any further payment of any unpaid benefits under the Plan, such Participants Beneficiary or Beneficiaries shall be deemed to be the Participants estate. A Beneficiary entitled to receive any Plan Benefit payments pursuant to this Section 12.1 shall receive such payments at the time(s) and in the manner elected by the Participant in his or her Participation Agreement.
12.2 Payments During Incapacity. The Committee shall have no duty or obligation to determine the competence or capacity of any Participant or Beneficiary. However, in the event that the Committee is made aware that a Participant (or Beneficiary) is under mental or physical incapacity at the time of any payment to be made to such Participant (or Beneficiary) pursuant to this Plan, any such payment may be made to the conservator or other legally appointed personal representative having authority over and responsibility for the person or estate of such Participant (or Beneficiary), as the case may be, and for purposes of such payment references in this Plan to the Participant (or Beneficiary) shall mean and refer to such conservator or other personal representative of the person or estate of the Participant (or Beneficiary), any such payment may be made to any person or institution that has apparent responsibility for the person and/or estate of the Participant (or Beneficiary) as determined by the Committee. Any payment made in accordance with the provisions of this Section 12.2 to a person or institution other than the Participant (or Beneficiary) shall be deemed for all purposes of this Plan as the equivalent of a payment to such Participant (or Beneficiary), and the Company shall have no further obligation or responsibility with respect to such payment.
12.3 Prohibition Against Assignment. Except as otherwise expressly provided in Section 12.1 and Section 12.2 hereof, the rights, interests and benefits of a Participant under this Plan (a) may not be sold, assigned, transferred, pledged, hypothecated, gifted, bequeathed or otherwise disposed of to any other party by such Participant or any Beneficiary, executor, administrator, heir, distribute or other person claiming under such Participant, and (b) shall not be subject to execution, attachment or similar process. Any
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attempted sale, assignment, transfer, pledge, hypothecation, gift, bequest or other disposition of such rights, interests or benefits contrary to the foregoing provisions of this Section 12.3 shall be null and void and without effect.
12.4 Assumption of Plan. The Company expressly agrees that it shall not merge or consolidate into or with another corporation, or sell substantially all of its assets to another corporation, firm or person until such corporation, firm or person expressly agrees in writing to assume and discharge the duties and obligations of the Company under this Plan. The powers, duties, rights and obligations of the Company under this Plan may be assigned (i) to any company into which the Company may be merged, or with which it may be consolidated, or (ii) to any company resulting from any merger, reorganization or consolidation to which the Company is a party, or (iii) to any company to which the business of the Company may be transferred, to the extent affected Participants transfer their employment to such company. If such an assignment occurs, the successor-in-interest to the Company shall assume the powers, duties, rights and obligations of the Company in writing.
12.5 Binding Effect. The provisions of this Plan shall be binding upon the Sponsor, the Participants, all Affiliated Companies employing any Participants, and any successor-in-interest, beneficiary, heir or personal representative to the Sponsor, any Participant or any such Affiliated Company.
12.6 No Right to Employment. This Plan is voluntary on the part of the Sponsor and its Affiliated Companies, and shall not be deemed to constitute an employment contract between any Participant and the Sponsor or any Affiliated Company, nor shall the adoption or existence of the Plan or any provision contained in the Plan be deemed to be a required condition of the employment of any Participant. Nothing contained in this Plan shall be deemed to give any Participant the right to continued employment with the Sponsor or any Affiliated Company, and the Sponsor and its Affiliated Companies may terminate any Participant at any time, in which case the Participants rights arising under this Plan shall be only those expressly provided under the terms of this Plan.
12.7 Notices. All notices, requests, or other communications (hereinafter collectively referred to as Notices) required or permitted to be given hereunder or which are given with respect to this Plan shall be in writing and may be personally delivered, or may be sent by United States registered mail, postage prepaid, return receipt requested and addressed as follows:
To the Sponsor, |
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| Impac Funding Corporation |
| 1401 Dove Street |
| Newport Beach, CA 92660 |
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To Participant at: | The Participants residential |
A Notice which is delivered personally shall be deemed given as of the date of personal delivery, and a Notice mailed as provided herein shall be deemed given on the date received. Any Participant may change his or her address for purposes of Notices hereunder pursuant to a Notice to the Committee, given as provided herein, advising the Committee of such change. The Sponsor, any Affiliated Company and/or the Committee may at any time change its address for purposes of Notices hereunder pursuant to a Notice to all affected Participants, given as provided herein, advising such Participants of such change.
12.8 Governing Law. This Plan shall be governed by, interpreted under and construed and enforced in accordance with the internal laws, and not the laws pertaining to conflicts or choice of laws, of the State of California applicable to agreements made and to be performed wholly within the State of California.
12.9 Titles and Headings; Gender of Terms. Article and Section headings herein are for reference purposes only and shall not be deemed to be part of the substance of this Plan or in any way to enlarge or limit the meaning or interpretation of any provision in this Plan. Use in this Plan of the masculine, feminine or neuter gender shall be deemed to include each of the omitted genders if the context so requires.
12.10 Severability. In the event that any provision of this Plan is found to be invalid or otherwise unenforceable by a court or other tribunal of competent jurisdiction, such invalidity or unenforceability shall not be construed as rendering any other provision contained herein invalid or unenforceable, and all such other provisions shall be given full force and effect to the same extent as though the invalid and unenforceable provision was not contained herein.
12.11 Tax Effect of Plan. Neither the Sponsor nor any Affiliated Company warrants any tax benefit or any financial benefit under this Plan. Without limiting the foregoing, the Sponsor and each Affiliated Company and their directors, officers, employees and agents shall be held harmless by the Participant from, and shall not be subject to any liability on account of, any Federal or State tax consequences or any consequences under ERISA of any determination as to the amount of plan benefits to be paid, the method by which plan benefits are paid, the persons to whom plan benefits are paid, or the commencement or termination of the payment of plan benefits.
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12.12 Mandatory Arbitration. In the event of any unresolved dispute between a Participant or Beneficiary and the Company or the Trustee regarding this Plan, such dispute shall be submitted to arbitration in accordance with the rules and regulations of the American Arbitration Association for the arbitration of employee benefit plan claim disputes (including the rules contained therein for the selection of an arbitrator who is familiar with employee benefit plans). The written determination of the arbitrator shall be final, binding and conclusive on the Parties and judgment on the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The prevailing party or parties of any arbitration of legal or equitable proceeding shall be entitled to have and recover his or their attorneys fees, costs and expenses as determined by the arbitrator.
IN WITNESS WHEREOF, the Sponsor has caused this Plan to be executed by its duly authorized officer effective as of the Effective Date hereof.
| IMPAC FUNDING CORPORATION | |
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| By: | /s/ RON MORRISON |
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| Title: | E.V.P |
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