New York Mercantile Exchange Deferred Compensation Plan for Key Employees

Summary

This agreement establishes a deferred compensation plan for key employees of the New York Mercantile Exchange and its subsidiaries. Eligible employees can elect to defer a portion of their salary and/or bonus, with deferred amounts credited to individual accounts and adjusted based on selected investment vehicles. Payments are made after employment ends, either as a lump sum or in installments, with provisions for hardship withdrawals. The plan is intended for a select group of management or highly compensated employees and is governed by ERISA guidelines for such plans.

EX-10.5 3 y46628ex10-5.txt DEFERRED COMPENSATION PLAN FOR KEY EMPLOYEES 1 EXHIBIT 10.5 New York Mercantile Exchange DEFERRED COMPENSATION PLAN FOR KEY EMPLOYEES 1. Name and Purpose. The name of this plan is the New York Mercantile Exchange Deferred Compensation Plan for Key Employees (the "Plan"). The purpose of the Plan is to permit each key employee of the Company (the "Company") or any subsidiary thereof (a "Subsidiary") who is designated by the New York Mercantile Exchange Deferred Compensation Plan Committee of the Company (in either case, a "Participant") to elect to defer all or a portion of his or her compensation from the Company until such Participant ceases to be an Employee or is no longer designated by the New York Mercantile Exchange Deferred Compensation Plan Committee of the Company as being eligible to participate in the Plan. The Plan is intended to be a "a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees" within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and shall be interpreted and administered to the extent possible in a manner consistent with that intent. 2. Right to Defer. For the calendar year, each Participant may elect to defer payment of up to 15%, less the percentage deferred into the New York Mercantile Exchange Savings and Investment Plan as of January 1st of that plan year, of such participant's base compensation otherwise payable for services rendered in such year ("Salary"). For the calendar year, each Participant may also elect to defer payment of up to 100% of their annual bonus otherwise payable for services rendered in such year ("Bonus"). Notwithstanding the foregoing, for calendar year starting July 1, 1997, a Participant may elect to defer up to 30%, less the percentage deferred into the New York Mercantile Exchange Savings and Investment Plan as of July 1, 1997, of such Participant's Salary otherwise payable for services rendered on or after July 1, 1997. 3. Deferral Elections. A Participant's election to defer payments hereunder (a "Deferral Election") shall be in writing and shall be deemed to have been made upon receipt and acceptance by the Company. In order to be effective hereunder, a Deferral Election for any calendar year must be made not later than December 31 of the preceding calendar year and shall specify the time and method of payment pursuant to Section 5(a) and 5(c) below applicable to the amount(s) deferred thereunder. Notwithstanding the foregoing, (a) any Deferral Election for calendar year July 1, 1997 may be made no later than June 30, 1997 and (b) a person who becomes a Participant during a calendar 1 2 year may make Deferral Elections with respect to Salary to be earned during the remainder of such calendar year or before the thirtieth (30th) day after the date he or she becomes a Participant. A Deferral Election made for a calendar year may not be revised after the last date on which it could have been made, except that any Deferral Election made with respect to a Participant's Salary may be revoked in its entirety by the Participant at any time by filing a written notice of revocation with the Company, but only as to Salary which has not yet been earned and which is payable after receipt and acceptance by the Company of such revocation. 4. Accounts; Crediting Earnings & Losses. (a) All amounts deferred by a Participant under this Plan shall be credited by the Company or Subsidiary, whichever is the employer of the Participant, to a book account (a "Deferred Compensation Account) in the name of such Participant as of the dates such amounts would have been paid to the Participant but for his or her Deferral Election. (b) The Company shall, from time to time and in its sole discretion, select one or more investment vehicles (which may, but need not be, comparable to investment vehicles offered as investment options under the New York Mercantile Exchange Deferred Compensation 401(k) Plan) to be made available as the measuring standards for crediting earnings or losses to those sub-accounts described in Section 4(a) within each Participant's Deferred Compensation Account. A Participant may select from such investment vehicles in a manner established by the Company, the investment vehicle or vehicles to apply to his or her sub-accounts and may change such selections, all in accordance with such rules as the Company may establish. The earnings or losses to be credited to the portion of any Participant's sub-account under this Section 4(b) for any period shall be equivalent to the amount of earnings or losses which would have been credited to the sub-account if such portion of such sub-account had actually been invested in such investment vehicles during such period in the manner selected by the Participant. (c) Notwithstanding the foregoing, the Committee may change the method for crediting earnings or losses to sub-accounts under (b) by written notice to each Participant (including former Participants who then have a Deferred Compensation Account which would be affected by such change), which notice shall specify the new method for crediting earnings or losses to be used under (b), the effective date of such change and the Deferred Compensation Accounts to which such new method shall apply. 5. Time and Method of Payment. (a) Amounts standing to the credit of each sub-account within a Participant's Deferred Compensation Account shall be paid, or commence to be paid, on the March first following the calendar year in which the Participant ceases to be an employee of the Company and its 2 3 Subsidiaries for any reason whatsoever. The amount of each such payment shall be determined by the amount credited to such sub-account as of the preceding December 31. (b) All amounts credited to each sub-account within the Participant's Deferred Compensation Account shall be distributed in cash and shall be made by the Company or the Subsidiary which credited such amounts to the Participant's Deferred Compensation Account. (c) All amounts credited to a sub-account within the Participant's Deferred Compensation Account shall be paid in either a single lump sum or in annual installments over a period of up to 5 years, as the Participant has specified in the Deferral Election(s) applicable to such sub-account; however, the Company reserves the right, at any time, to accelerate payments being made in annual installments, by making a single lump sum payment of the amount standing to the credit of the Participant without the consent of the Participant. In the case of installment payments, (i) interest on any sub-account shall continue to be credited in accordance with Section 4 during the payment period, and (ii) the amount of each payment shall be equal to the amount credited to the Deferred Compensation Account as of the preceding December 31 divided by the number of annual payments remaining to be made, including the current payment. (d) All amounts credited to a Participant's Deferred Compensation Account shall be paid as they become due to the Participant if then living. All amounts credited to a Participant's Deferred Compensation Account at the time of his or her death shall be paid pursuant to Section 6. (e) Notwithstanding any provision hereof to the contrary, if a Participant believes he or she is suffering from a "hardship," an application may be made to the Company for an acceleration of payments from one or more sub-accounts within such Participant's Deferred Compensation Account. "Hardship" for this purpose shall mean a need for financial assistance in meeting real emergencies which would cause substantial hardship to the Participant or any member of the Participant's immediate family, and which are beyond the Participant's control. If the Company determines, in its sole discretion, that the Participant is suffering from a "hardship," the Company may accelerate payment to the Participant of such portion of such sub-account(s) within the Participant's Deferred Compensation Account as the Company may determine is required to alleviate such hardship, and each such sub-account shall be charged with the amount paid therefrom as of the date of payment. (f) If a Participant is required to pay federal (or state) income tax on all or any portion of the amount credited to his Deferred Compensation Account prior to the time it is actually received or made available, such portion of his Deferred Compensation Account shall be paid to him under the Plan upon written request. 6. Payments after Death. Each Participant may designate, from time to time, a beneficiary or beneficiaries (who may be named contingently or successively) to whom any amounts which remain credited to the Participant's Deferred Compensation Account at the time of his or her 3 4 death shall be paid. All such amounts shall be paid in a single lump sum or in any other method permitted by the Company in accordance with Section 5(b) as soon as practicable after such Participant's death. Each such designation shall revoke all prior designations by the same Participant, except to the extent otherwise specifically noted, shall be in a form prescribed by the Company, and shall be effective only when filed by the Participant in writing with the Company during his or her lifetime. Any amounts which remain credited to a Participant's Deferred Compensation Account at the time of his or her death which are not payable to a designated beneficiary shall be paid to the estate of such Participant in a single lump sum in accordance with Section 5(b) as soon as practicable after the death of such Participant. 7. Claims Procedure. In the event any person is denied benefits by the New York Mercantile Exchange Deferred Compensation Plan Committee, such person shall be notified in writing within ninety (90) days (or one hundred eighty (180) days if special circumstances require an extension of time) after receipt of this claim by the Committee of: (a) the specific reason(s) for the denial; (b) specific references to pertinent Plan provisions on which the denial is based; (c) a description of any additional material or information necessary for the claimant to perfect his or her claim, and the reason why such material or information is necessary; and (d) the procedure for submitting his or her claim for review. After the denial of the claim, the claimant shall be entitled to review pertinent documents and to submit to the Committee in writing any issues to comments the claimant may have regarding his or her claim for benefits under the Plan. If the claimant cannot settle his or her dispute with a representative of the Committee, the claimant may request a review of his or her claim by the Committee. Such requests must be made by the claimant in writing within sixty (60) days after receipt of notice that his or her claim has been rejected and may include a request that he or she be granted a hearing before the Committee; in which case, if the Committee shall deem appropriate, such hearing shall be held as soon as practicable thereafter. The Committee shall advise the claimant in writing of the disposition of his or her appeal within sixty (60) days after the request for a review of the claim is first received by the Committee (or within one hundred twenty (120) days if a review with a hearing is requested) and shall give specific references to the pertinent Plan provisions on which the decision is based. 8. No Funding Required. (a) Nothing in this Plan will be construed to create a trust or to obligate the Company, any Subsidiary or any other person to segregate a fund, purchase an insurance contract, or in any other way to fund currently the future payment of any benefits hereunder, nor will anything herein be construed to give any Participant or any other person rights to any specific assets of the 4 5 Company, any Subsidiary or of any other person. Except as provided in 8(b) below, any benefits which become payable hereunder shall be paid from the general assets of the Company or Subsidiary, whichever is applicable, in accordance with the terms hereof. (b) The Company in its sole discretion may establish a grantor or other trust of which it is treated as the owner under Subpart E of Subchapter J, Chapter 1 of the Internal Revenue Code of 1986, as amended, to provide for the payment of benefits hereunder, subject to such other terms and conditions as the Company may deem necessary or advisable to ensure (i) that benefits are not includible, by reason of the establishment or funding of the grantor trust, in the income of trust beneficiaries prior to actual distribution and (ii) that the existence of the grantor trust does not cause the Plan or any other arrangement to be considered "funded" for purposes of Title I of ERISA. 9. Plan Administration and Interpretation. The Company shall have complete control over the administration of the Plan and complete control and authority to determine, in its sole discretion, the rights and benefits and all claims, demands and actions arising out of the provisions of the Plan of any Participant, beneficiary, or other person having or claiming to have any interest under the Plan and the Company's determinations shall be conclusive and binding on all such parties. The Company shall be deemed to be the Plan Administrator with the responsibility for complying with any reporting and disclosure requirements of ERISA. The rights of the Company hereunder shall be exercised by the New York Mercantile Exchange Deferred Compensation Plan Committee of the Company. 10. Non-Assignable. Amounts payable under this Plan shall not be subject to alienation, assignment, garnishment, execution or levy of any kind, and any attempt to cause any such amount to be so subjected shall be null, void and of no effect and shall not be recognized by the Company or its Subsidiaries. 11. Termination and Modification. The Company may terminate this Plan by written notice to each Participant participating therein. A termination of the Plan shall have no effect other than to eliminate the right of each Participant to defer further compensation. Except for such "prospective" termination, neither the Plan nor any Deferral Election in effect hereunder may be amended, modified, waived, discharged or terminated, except by mutual consent of the Company and the Participant or Participants affected thereby, which consent shall be evidenced by an instrument in writing, signed by the party against which enforcement of such amendment, modification, waiver, discharge or termination is sought. 12. Parties. The terms of this Plan shall be binding upon the Company, its Subsidiaries and their successors or assigns and each Participant participating herein and his or her beneficiaries, heirs, executors and administrators. 13. Liability of Company. Subject to its obligation to pay the amount credited to the Participant's Deferred Compensation Account at the time distribution is called for by the payment 5 6 option in effect, none of the Company, its Subsidiaries nor any person acting in behalf of the Company or its Subsidiaries shall be liable to any Participant or any other person for any act performed or the failure to perform any act with respect to the Plan. 14. Notices. Notices, elections or designations by a Participant to the Company hereunder shall be addressed to the Company to the attention of the New York Mercantile Exchange Deferred Compensation Plan Committee of the Company. Notices by the Company to a Participant shall be addressed to the Participant at his or her most recent home address as reflected in the records of the Company. 15. Unsecured General Creditors. No Participant or his or her legal representative or any beneficiary designated by him or her shall have any right, other than the right of any unsecured general creditor, against the Company or any Subsidiary in respect of the Deferred Compensation Account of such Participant established hereunder. 16. Effective Date. This Plan shall be effective as of July 1, 1997, and shall continue in existence thereafter until terminated pursuant to Section 10. 17. Governing Law. This Plan shall be construed and enforced in accordance with, and governed by, the laws of the State of New York. 06/23/97 6