Exhibit 10.8
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CORNERSTONE PROPANE
DEFERRED COMPENSATION PLAN
EFFECTIVE: JULY 1, 1998
Prepared by:
Xxxxxxx X. Xxxxxx, Incorporated
Xxxxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
THIS DOCUMENT HAS LEGAL AND TAX IMPLICATION AND
SHOULD BE REVIEWED BY THE EMPLOYER'S LEGAL COUNSEL
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CORNERSTONE PROPANE
DEFERRED COMPENSATION PLAN
ARTICLE I.
PURPOSE
The purposes of this Plan are to allow a select group of Cornerstone Propane
Partners, L.P. (the "Company") executives to defer receipt of compensation to
which the executives would otherwise be entitled and to supplement qualified
plan benefits. This Plan is intended to be an unfunded plan of deferred
compensation for a select group of management or highly compensated employees
within the meaning of Title I of ERISA. This Plan is effective July 1, 1998.
ARTICLE II.
DEFINITIONS
Whenever referred to in this Plan, the following capitalized terms shall have
the meanings set forth below except where otherwise provided. As used in the
Plan, the masculine, feminine and neuter genders and the singular and plural
numbers shall each be deemed to include the other or others.
2.1 "Account" means a Participant's Deferred Compensation Account(s) and SERP
Account established pursuant to Article V.
2.2 "Annual Bonus" means an amount payable (but for deferral hereunder) to a
Participant pursuant to the Company's Annual Incentive Plan.
2.3 "Base Salary" means a Participant's base salary.
2.4 "Beneficiary" means the person(s) designated in writing by the
Participant to receive his benefits under the Plan if the Participant
dies before receiving all of his benefits. A Beneficiary designation
must be signed and dated by the Participant and delivered to the
Committee to become effective. In the absence of a valid or effective
Beneficiary designation, the Participant's surviving spouse shall be the
Beneficiary or if there is none, the Beneficiary shall be the
Participant's surviving descendants by right of representation, surviving
parents or estate (in that order).
2.5 "Board" means the Board of Directors of Cornerstone Propane Partners,
L.P.
2.6 "Committee" means the Company's Compensation Committee. The Committee
shall be the "plan administrator" under ERISA.
2.7 "Company" means Cornerstone Propane Partners, L.P.
2.8 "Deferral Election Form" means the agreement between a Participant and
the Company whereby the Participant elects to reduce his Base Salary
and/or Incentive Pay and the Company promises to pay him benefits under
the Plan in the future.
2.9 "Employee" means a common law employee of the Company.
2.10 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
2.11 "Incentive Pay" means a Participant's Annual Bonus or Other Incentive, as
defined herein.
2.12 "Other Incentive" means an amount payable under Company incentive plans
specified by the Board as eligible for deferral hereunder.
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2.13 "Participant" means (a) an Employee who is eligible to participate under
Article III or (b) an individual who has an Account balance greater than
zero.
2.14 "Payment Date" means the date on which a Participant's Account is to be
paid or on which payment is to commence. Except as otherwise provided in
the Plan, the Payment Date for a Participant's Deferred Compensation
Account(s) shall be as specified in Article IV, and the Payment Date for
a Participant's SERP Account shall be the January 31 following the
calendar year in which the Participant's Termination of Employment
occurs.
2.15 "Plan" means the Cornerstone Propane Deferred Compensation Plan as set
forth herein and as amended from time to time.
2.16 "Plan Year" means the period beginning July 1, 1998 and ending December
31, 1998, and thereafter, the calendar year.
2.17 "SERP" means the supplemental executive retirement plan feature of the
Plan.
2.18 "Termination of Employment" means any voluntary or involuntary
termination of the Employee's employment with the Company.
2.19 "Valuation Date" means the last business day of each month.
2.20 "Valuation Period" means the period of time between Valuation Dates.
ARTICLE III.
ELIGIBILITY
3.1 The Committee shall determine which Employees are eligible to participate
in the Plan each Plan Year, provided that only Employees who are members
of a select group of management or highly compensated employees (within
the meaning of ERISA Section 201(2)) shall be eligible.
3.2 The Committee shall notify each Employee of his eligibility and provide
him with a copy of the Plan.
3.3 The Committee shall maintain a record of Plan Participants.
ARTICLE IV.
PARTICIPATION IN DEFERRED COMPENSATION FEATURE
4.1 Prior to the beginning of each Plan Year, or if later, within 30 days of
notification of first becoming eligible to participate in the Plan, a
Participant may elect to defer receipt of future Base Salary by
completing a Deferral Election Form prescribed by the Committee and
specifying a percentage (in 1% increments up to a maximum of 75%) to be
deferred. Up to two times during a calendar year, a Participant may
complete a Deferral Election Change Form to increase the percentage (in
1% increments up to a maximum of 75%) of future Base Salary he wants to
defer under the Plan. These elections shall be effective as of the first
payroll period beginning after the date the Deferral Election Form or
Deferral Election Change Form is received by the Committee or such later
date as the Committee specifies. No election to defer Base Salary shall
be effective prior to January 1, 1999.
4.2 A Deferral Election Form for Base Salary shall remain in effect until the
earliest of:
(a) the end of the calendar year in which it became effective, or
(b) the first day of the payroll period beginning on or after the
date the Committee receives a completed and signed Deferral
Election Change Form by which the Participant indicates he
wants to increase the percentage of Base Salary deferred to
the Plan, on a prospective basis only, or
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(c) the first day of the payroll period beginning on or after the
date the Committee receives a signed and dated written
revocation from the Participant.
An election to defer Base Salary may be revoked prospectively (under
paragraph (c)), or modified to increase the elected percentage (under
Section 4.1 and paragraph (b)), but may not be amended to otherwise
increase or decrease the elected percentage. A Participant who revokes
an election pursuant to this Section shall not be eligible to resume
deferral of Base Salary until the first day of the first Plan Year
beginning after the revocation.
4.3 Prior to the end of the second quarter of the fiscal year for which an
Annual Bonus is earned, a Participant may elect to defer receipt of such
Incentive Pay by completing a Deferral Election Form prescribed by the
Committee and specifying a percentage (in 1% increments up to a maximum
of 100%) to be deferred. The election shall be effective the date the
Deferral Election Form is received by the Committee.
4.4 The timing of elections for the deferral of Other Incentives shall be
determined by the Board in conjunction with approving deferral of such
awards under the Plan.
4.5 An election to defer Incentive Pay shall be irrevocable.
4.6 The Participant shall also specify on the Deferral Election Form that all
amounts credited to the Participant's Deferred Compensation Account
pursuant to the Deferral Election Form (together with any gains or
losses) shall be paid on one of the following Payment Dates:
(a) January 31 of a specified future year, or
(b) January 31 following the calendar year in which the Participant's
Termination of Employment occurs, or
(c) the earlier of (a) or (b);
provided, however, that the Participant shall have no more than three
(3) Payment Dates in effect at any time. Except as provided in
Section 4.8, this election shall be irrevocable.
4.7 The Participant's Deferral Election Form shall specify that the
Participant's Deferred Compensation Account which is attributable to
deferrals made pursuant to the Deferral Election Form shall be paid
either:
(a) in a single lump sum on the Payment Date, or
(b) in substantially equal installments over a period of five or ten
years as specified by the Participant on the Deferral Election
Form, commencing on the Payment Date.
Except as provided in Section 4.9, the election of a payment form shall
be irrevocable.
4.8 Notwithstanding the Participant's election of a Payment Date, a
Participant has a one-time opportunity to defer a Payment Date, provided
the new Payment Date is at least two years after the original Payment
Date. This one-time designation of a later Payment Date is irrevocable,
but is rendered ineffective if the Participant terminates employment
before the original Payment Date. To postpone a Payment Date, a
Participant must provide the Committee with a signed and dated written
notice, using a form prescribed by the Committee, no later than the
December 31 prior to the beginning of the calendar year preceding the
calendar year which includes the original Payment Date. For example, if
the Participant's original Payment Date is January 31, 2001, an election
to further defer payment must be made no later than December 31, 1999,
and must specify a new payment which is no earlier than January 31, 2003.
4.9 Notwithstanding the Participant's election of a payment form for
benefits attributable to his Deferred Compensation Account, a
Participant has a one-time opportunity to change his payment form
election. This election of a different payment form is irrevocable,
but is rendered ineffective if the Participant terminates employment
before the original Payment Date. To change a payment form election, a
Participant must provide the Committee with a signed and dated written
notice, using a form prescribed by the Committee, no later than
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the December 31 prior to the beginning of the calendar year preceding the
calendar year which includes the Payment Date of the affected benefit.
ARTICLE V.
PARTICIPATION IN THE SERP FEATURE
5.1 Within 30 days of notification of first becoming eligible to participate
in the SERP feature of the Plan, a Participant shall indicate on a form
prescribed by the Committee that his SERP Account shall be paid either
(a) in a lump sum payment on the Payment Date, or (b) in substantially
equal installments over a period of five or ten years as specified by the
Participant commencing on the Payment Date. Except as specified in
Section 5.2, the election of a payment form is irrevocable.
5.2 A Participant has a one-time opportunity to change his payment form
election. This election of a different payment form is irrevocable, but
is rendered ineffective if the Participant terminates employment within
one year of making the change. To change a payment form election, a
Participant must provide the Committee with a signed and dated written
notice no later than the December 31 prior to the beginning of the
calendar year preceding the calendar year which includes the Payment
Date.
ARTICLE VI.
ACCOUNTS
6.1 The Company shall establish one or more Accounts in the name of each
Participant on the Company's books and records for purposes of tracking
the Participant's benefits under the Plan: a Deferred Compensation
Account if the Participant has elected to participate under Article IV
and a SERP Account, if applicable.
(a) In lieu of paying Base Salary or Incentive Pay deferred pursuant
to a Deferral Election Form, the Company shall credit the
Participant's Deferred Compensation Account with amounts deferred
under Article IV as of the last day of the payroll period in
which deferred Base Salary would have otherwise been paid or as
of the date the deferred Incentive Pay would otherwise have been
paid to the Participant. If the Participant has elected more
than one Payment Date or different payment forms, separate
sub-Accounts shall be maintained for each such Payment Date and
payment form.
(b) Effective July 1, 1998, at the end of each month, the Company
shall credit each Participant's SERP Account with an amount equal
to 15% of the Participant's Base Salary for that month.
6.2 Each Account shall be credited on each Valuation Date with interest at a
rate set by the Committee from time to time. Unless changed by the
Committee, the rate shall be the average of the Company's working capital
Eurodollar borrowing rate on the first and last business days of the
month for the month ending on the Valuation Date. The Account shall
continue to be credited with interest through the end of the month
preceding the last payment. The interest shall be applied to the Account
balance as of the beginning of the Valuation Period increased by one-half
of the amounts credited during the Valuation Period and decreased by
one-half of the amount of any payments made during the Valuation Period.
At the Committee's discretion, the method of crediting interest or
determining the interest rate may be prospectively changed.
ARTICLE VII.
PAYMENT OF ACCOUNTS
7.1 A Participant's Deferred Compensation Accounts shall be paid (or payment
shall commence) on the Payment Date(s) and in the form(s) specified in
the Deferral Election Form(s). A Participant's SERP Account shall be
paid (or payment shall commence) on the Payment Date in the form elected
by the Participant.
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7.2 If the Participant dies before receiving the entire balance in his
Account(s), the remaining balance shall be paid to his Beneficiary in a
single lump sum on January 31 following the year of death,
notwithstanding the Participant's election of a later Payment Date.
7.3 All payments shall be in cash and shall be made subject to applicable
federal and state income and employment taxes. If benefits are subject
to withholding of taxes before becoming payable, the Company will
withhold from the Participant's current cash compensation.
7.4 Amounts credited to a Participant's SERP Account shall not be payable
prior to the Participant's Termination of Employment.
7.5 Notwithstanding any other provision of this Plan to the contrary, in the
event of a Participant's Termination of Employment, the Committee
reserves the right in its sole and absolute discretion to disregard a
Participant's election of a Payment Date or installment payments and to
accelerate the payment of benefits hereunder to the Participant or
Beneficiary.
ARTICLE VIII.
PLAN ADMINISTRATION
8.1 This Plan shall be adopted by the Company and shall be administered by
the Committee.
8.2 This Plan may be amended in any way or may be terminated, in whole or in
part, at any time, at the discretion of the Board by a duly adopted Board
resolution. No amendment or termination of the Plan shall reduce the
value of any Participant's Account determined as of the effective date of
such amendment or termination. This shall not be construed to prevent
the Board from terminating the Plan and paying all benefits prior to the
Payment Dates otherwise provided.
8.3 The Committee shall have the sole authority, in its full and absolute
discretion, to adopt, amend and rescind such rules and regulations as it
deems advisable in the administration of the Plan, to construe and
interpret the Plan, the rules and regulations, and Plan forms, and to
make all other determinations and interpretations of the Plan. All
decisions, determinations, and interpretations of the Committee shall be
binding on all persons, except as otherwise provided by law. Committee
members who are Participants shall abstain from voting on any Plan
matters that would cause them to be in constructive receipt of benefits
under the Plan. The Committee may delegate its responsibilities as it
sees fit.
ARTICLE IX.
MISCELLANEOUS
9.1 The amounts credited to a Participant's Account are not held in escrow
and are not secured by any specific assets of the Company or in which the
Company has an interest. The Company may make such arrangements as it
desires to provide for the payment of benefits. Neither the Participant,
any Beneficiary nor the Participant's estate shall have any rights
against the Company with respect to any portion of the Participant's
Account except as a general unsecured creditor of the Company. No
Participant has an interest in his Account until the Participant actually
receives payment.
9.2 No benefit under this Plan may be sold, assigned, transferred, conveyed,
hypothecated, encumbered, anticipated, or otherwise disposed of, and any
attempt to do so shall be void. No such benefit shall, prior to receipt
thereof by a Participant, be in any manner subject to the debts,
contracts, liabilities, engagements, or torts of such Participant.
9.3 Nothing in this Plan shall be construed to limit in any way the right of
the Company to terminate an Employee's employment at any time for any
reason whatsoever with or without cause; nor shall it be evidence of any
agreement or understanding, express or implied, that the Company (a) will
employ an Employee in any
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particular position, (b) will ensure participation in any incentive
programs, or (c) will grant any awards from such programs.
9.4 Claims Procedures.
(a) Whenever a Participant incurs a Termination of Employment, the
Committee shall determine the value of the Participant's Account.
If the Participant (or Beneficiary) believes he is entitled to a
greater benefit, he may file a written request for review of the
benefit computation by the Committee. The Committee may require
additional information if necessary to process the request. The
Committee (or its delegate) shall review the request and within
90 days of the Participant's request, the Committee shall provide
written notice to any claimant whose claim for benefits under the
Plan is being denied, in whole or in part. Such notice shall be
written in a manner calculated to be understood by the claimant
and shall include:
(i) The specific reason or reasons for such denial;
(ii) Specific references to pertinent Plan provisions upon
which the denial is based;
(iii) A description of any additional material or information
which may be needed to clarify the request, including an
explanation of why such information is required; and
(iv) An explanation of the Plan's claim review procedures.
(b) If an extension of time is required by special circumstances,
written notice may be furnished to the claimant within the 90-day
period referred to above which states the special circumstances
requiring the extension and the date by which a decision can be
expected, which shall be no more than 180 days from the date the
claim was filed. If no notice is received within 90 days of the
date the claim is submitted, the claimant may assume his claim
has been denied and may submit an appeal for review of the claim.
(c) Any claimant whose claim for benefits has been denied by the
Committee may appeal to the Committee for a review of the denial
by making a written request therefore within 60 days of receipt
of a notification of denial. The claimant may upon request to
the Committee examine any pertinent documents. The claimant may,
if he chooses, submit to the Committee written issues, comments
or other information upon which the claimant relies in support of
his claim, or may request a representative to make such written
submissions on his behalf.
(i) Within 60 days after receipt of a request for review, the
Committee shall notify the claimant in writing of its
decision, and, if the Committee confirms the denial in
whole or in part, the notice shall set forth the reasons
for the decision and specific reference to those Plan
provisions upon which the decision is based.
(ii) Notwithstanding the foregoing, if the Committee determines
that special circumstances require additional time for
processing, the Committee may extend such 60-day period,
but not by more than an additional 60 days, and shall
notify the claimant of such extension.
9.5 All Plan administrative expenses shall be paid by the Company.
9.6 The Company shall indemnify the Committee and each Committee member
against any and all claims, losses, damages, expenses (including
reasonable counsel fees), and liability arising from any action, failure
to act, or other conduct in the member's official capacity, except when
due to the individual's own gross negligence or willful misconduct.
9.7 The captions and headings in this Plan are for convenience only and shall
not in any way affect the meaning or interpretation of the Plan.
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9.8 This Plan shall be construed and its provisions enforced and administered
in accordance with the laws of the State of California except as
otherwise provided in ERISA.
Date: CORNERSTONE PROPANE PARTNERS, L.P.
By
Title:
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