Exhibit 10.2
CAR WASH PARTNERS, INC.
NONQUALIFIED DEFERRED COMPENSATION PLAN
AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2022
CAR WASH PARTNERS, INC. NONQUALIFIED DEFERRED COMPENSATION PLAN
Table of Contents
Article Title Page
ARTICLE I Definitions 2
ARTICLE II Administration 9
ARTICLE III Eligibility and Participation 11
ARTICLE IV Deferral Elections and Company Contributions 12
ARTICLE V Participant Accounts and Investment of Deferred Amounts 14
ARTICLE VI Plan Benefits and Distributions 16
ARTICLE VII Amendment and Termination 20
ARTICLE VIII Miscellaneous 21
CAR WASH PARTNERS, INC. NONQUALIFIED DEFERRED COMPENSATION PLAN
PURPOSE
Car Wash Partners, Inc. (the "Company") hereby amends and restates the Mister. Car Wash Deferred Compensation Plan (the "Plan") effective as of January 1, 2022, to retain and reward a select group of management or highly compensated employees of the Company. The Plan is an unfunded plan established and maintained for the primary purpose of providing certain key employees who contribute or who are expected to contribute substantially to the success of the Company with the opportunity to defer the receipt of compensation. The Plan is intended to comply in all respects with Code § 409A and those provisions of ERISA applicable to an unfunded plan maintained primarily to provide deferred compensation benefits for a select group of “management or highly compensated employees.
WHEREAS The Company has maintained its existing plan in the form of an adoption agreement noting chosen alternatives for provisions outlined in a generic deferred compensation agreement since the inception of the Plan; and
WHEREAS The Company is authorized to amend provisions of the Plan under Article 11.8 of the original Plan Document; and
WHEREAS The Company wishes to update and clarify certain provisions of the Plan; and
WHEREAS The Company wishes to incorporate the details contained in the Adoption Agreement directly into the language of a Restated Plan Document;
THEREFORE The Company hereby amends and restates as follows, effective on January 1, 2022.
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ARTICLE I
Definitions
"Account" or "Accounts" means, with respect to any Participant, a bookkeeping entry used as a measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan and subject to such limits, rules and procedures as the Committee from time to time may adopt under this Plan. The Committee and the Record Keeper may establish and use sub-accounts and other record keeping entries with respect to any Participant's Account including without limitation any Deferral Account, Participant, Company Contribution Account and Company Discretionary Account applicable to such Participant and accordance with Article V.
“Account Balance” means, with respect to any Participant at any particular time, the sum at such time of such Participant's (i) Deferral Account balance, (ii) Company Matching Account balance and (iii) Company Discretionary Account balance. The Account Balance shall be a bookkeeping entry only and shall be utilized solely as a measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.
"Affiliate" means a corporation, partnership, limited liability company or other entity that is required to be considered, together with the Company, as a single employer under
§414(b) of the Code (employees of controlled group of Companies) or §414(c) of the Code (employees of partnerships or limited liability companies under common control). For purposes of determining a controlled group of Companies under §414(b) of the Code, the language "at least 50 percent" shall be used instead of "at least 80 percent" each place it appears in §1563(a)(1), (2), and (3) of the Code. For purposes of determining trades or businesses that are under common control for purposes of
§414(c) of the Code, "at least 50 percent" shall be used instead of "at least 80 percent" each place it appears in Treasury Regulation §1 .414(c)-2. An entity shall not be considered an "Affiliate" for any period of time prior to satisfying the controlled group or common control tests described above.
"AnnuaI Company Discretionary Amount" means the benefit amount, if any, for any one Plan Year that is determined for a Participant in accordance with Article IV (c)(1).
"Annual Company Matching Amount" means the benefit amount, if any, for any one Plan Year that is determined for a Participant in accordance with Article IV (c)(2).
"Base Salary" means base salary earned with respect to services performed and payable in cash, exclusive of any of the following: bonuses, overtime, incentive payments and other performance-based forms of compensation, director and other special fees, expense allowances and reimbursements, severance. and any other forms
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of compensation, earnings or payments that are not regular in frequency and form (before reductions for, contributions to or deferrals under this Plan or any other profit sharing, 401(k), pension, deferred compensation or benefit plan sponsored by the Company or any Affiliate).
"Beneficiary" means one or more persons, trusts, estates, or other entities, designated in accordance with Article VI(g) that are entitled to receive benefits under this Plan upon the death of a Participant.
"Beneficiary Designation Form" means the form established from time to time by the Committee that a Participant completes, signs and returns to the Company to designate one or more Beneficiaries. Beneficiary Designation Forms may be completed and/or signed using such online systems and other electronic means as the Committee or Record Keeper from time to time may designate for such purpose.
"Board" or "Board of Directors" shall mean the board of directors of the Company.
"Bonus" means any compensation relating to services performed that is granted or awarded apart from Base Salary and that is identified by the applicable Company or Affiliate as a "bonus" or “incentive compensation” (before reductions for, contributions to or deferrals under this Plan or any other profit sharing, 401(k), pension, deferred compensation or benefit plan sponsored by the Company or any Affiliate).
"Calendar Year" means the annual period measured from January 1 to December 31.
"Cause", means: (a) with respect to each Participant who has an employment agreement containing a definition of "cause" or "for cause", said definition as set forth in his or her employment agreement, and (b) with respect to all other Participants, and as determined in good faith by the Committee, willfully engaging in misconduct which is demonstrably and materially injurious to the Company or any Affiliate, unless the act or omission giving rise to such misconduct is done, or omitted to be done, by a Participant in good faith and with a sound reason to believe that such action or omission was in the best interest of the Company and its Affiliates.
"Change in Control" shall mean, provided that such definition shall be interpreted in a manner that is consistent with Code § 409A and regulations thereunder, the first to occur of any of the following:
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possessing thirty percent (30%) or more of the total voting power of the stock of the Company;
"Change in Control Distribution" shall have the meaning set forth in Article VI (e).
"Claimant" shall have the same meaning set forth in Article II (c).
"Code" shall mean the Internal Revenue Code of 1986, as it may be amended from time to time, or any successor statute. Reference to a specific section of the Code shall include a reference to any successor provision.
"Committee" means the person(s) designated as Committee members or such other persons as the Company's Board of Directors from time to time may designate to serve as members of the Committee hereunder. In the absence of any Committee, or should the Committee be unable or unwilling to serve, the Company shall perform the duties of the Committee under this Plan.
"Company" shall mean CAR WASH PARTNERS, INC. and its successors.
"Company Discretionary Account" means, with respect to any Participant (but subject in the case of each Participant to Article IV (c)(1), an Account consisting of the sum of (i) all of the Participant's Annual Company Discretionary Amounts, plus (ii) Notional Investment Adjustments in value credited or debited thereon in accordance with Article 4 of this Plan, less (iii) all distributions from such account.
"Company Matching Account" means, with respect to any Participant (but subject in the case of each Participant to Article IV (c)(2), an Account consisting of the sum of (i) all of the Participant's Annual Company Matching Amounts, plus (ii) Notional Investment Adjustments in value credited or debited thereon in accordance with Article V (c) of this Plan, less (iii) all distributions from such account.
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value credited or debited thereon in accordance with Article 4 of this Plan, less (iii) all distributions from such account.
"Deferral Election Form" means notice filed by a Participant with the Record Keeper specifying the amount of the Participant's Pay Type(s) to be deferred, and the time and form of distribution payments .Deferral Election Forms may be completed and/or signed using such online systems and other electronic means as the Committee or Record Keeper from time to time may designate for such purpose.
“Disability or Disabled" shall mean that a Participant, by reason of any medically determinable physical or mental impairment which can be expected to result in death or expected to last for a continuous period of not less than 12 months, and (1) has received income replacement benefits for a period of not less than three months under an accident or health plan covering employees of the Company, or (2) is determined to be totally disabled by the Social Security Administration.
"Disability Benefit" means the benefit set forth in Article VI (b)(6). "Effective Date" shall mean January 1, 2022.
"Eligible Employee" means any employee of the Company or other Participating Employer who is selected to participate herein in accordance with the provisions of Article III hereof, and is one of a select group of management or highly compensated employees. Eligible Employee may also include selected Independent Contractors as determined in the complete and sole discretion of the Committee.
"Employee" means any individual who is employed by or providing services to the Employer. Employee means "service provider" as used in Treasury Regulation
§1.409A-1(l).
"Employer" or "Participating Employer" means the Company or Affiliate who is the legal employer of the Employee or service recipient in the case of an Independent Contractor.
"ERISA" means the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time.
"Hardship Distribution" means any distribution or waiver of deferral granted by the Committee pursuant to Article VI (d).
"Identification Date" for the purpose of identifying Specified Employees means each December 31.
"Independent Contractor" means a non-employee director or an independent contractor for whom deferred amounts will be subject to Section 409A as provided in Treasury Regulation §1 .409A-1(f)(2).
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"Matching Contribution Limit" means the Maximum Contribution Limit set forth o be used and calculated as a limit on Annual Company Matching Amounts pursuant to Article IV (c). Such Limit shall be communicated to Participants on an annual basis.
"Matching Contribution Rate"means the respective percentage rate, which rate shall be used to calculate Annual Company Matching Amounts pursuant to Article IV (c), subject to the Matching Contribution Limit, and communicated to Participants on an annual basis.
"Notional Investment" means any security, fund, account, sub-account, index, formula or other instrument, asset, measure or method from time to time designated by the Committee as a means to calculate the amount of any Notional Investment Adjustment.
"NotionaI Investment Adjustment" means earnings, gains, losses and any other adjustments made with respect to any Annual Deferral Amount, Annual Company Matching Amount or Annual Company Discretionary Amount, which adjustments are made based on the performance of a Notional Investment pursuant to Article V.
"Notional Investment Election Form" means notice filed with the Record Keeper by or on behalf of a Participant (or his or her Beneficiaries, as provided below) specifying the allocation of the Participant's Annual Deferral Amount and how the Participant's Annual Deferral Amount, Annual Company Matching Amount and Annual Company Discretionary Amount, if any, are to be allocated under the Plan among the Notional Investments provided under the Plan. Notional investment Election Forms may be completed and/or signed using such online systems and other electronic means as the Committee or Record Keeper from time to time may designate for such purpose. Upon the death of a Participant, for so long as such Participant's Beneficiaries retain an interest in such Participant's Account hereunder, such Beneficiaries may file Notional Investment Election Forms with respect to such Account in accordance with such policies and procedures as the Committee from time to time may specify for such purpose.
"Participant" means any Eligible Employee (i) who is selected to participate in the Plan, (ii) who elects to participate in the Plan, (iii) who signs a Participation Agreement, a Deferral Election Form, a Notional Investment Election Form, (iv) whose signed Participation Agreement, Deferral Election Form, and Notional Investment Election Form are accepted by the Committee, and (v) who commences participation in the Plan. A spouse or former spouse (or beneficiary) of a Participant shall not be treated as a Participant in the Plan, even if he or she has an interest in the Participant's benefits under the Plan as a result of applicable law or property settlements resulting from legal separation or divorce.
"Participation Agreement" means the form established from time to time by the Committee that a Participant completes, signs and returns to the Company to become a Participant in this Plan. Participation Agreements may be completed and/or signed using such online systems and other electronic means as the Committee or Record Keeper from time to time may designate for such purpose.
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"Plan" shall mean the Mister Car Wash Nonqualified Deferred Compensation Plan hereby created and as it may be amended from time to time.
"Plan Administrator" shall mean the Company or its designees or designated Committee.
"Plan Year" shall mean the period beginning December 28, 2015 and ending December 31, 2015 and thereafter, the 12-month period ending on December 31.
"Record Keeper" means the party designated as the Record Keeper, as such designation may be amended from time to time in the discretion of the Committee. In the absence of any such designation, or should the Record Keeper be unable or unwilling to serve, the Company shall perform the duties of the Record Keeper under this Plan.
“Refund of 401(k) Contribution” means a corrective distribution from Company’s 401(k) Plan.
"Retirement" means the Termination of Employment of a Participant on or after such Participant's Retirement Eligibility Date.
"Retirement Eligibility Date" means the date when the Participant achieves age 65 or older, or at age 55 with five (5) years of service.
"Section 409A" means Section 409A of the Code, as the same may be amended from time to time, and any successor statute thereto. References to Section 409A or any requirement under Section 409A, as the same may be interpreted, construed or applied to this Plan at any particular time, shall be deemed to mean and include, to the extent then applicable and then in force and effect (but not to the extent overruled, limited or superseded), published guidance, regulations, notices, rulings and similar announcements issued by the Internal Revenue Service or by the Secretary of the Treasury under or interpreting Section 409A, decisions by any court of competent jurisdiction involving a Participant or a beneficiary and any closing agreement made under §7121 of the Code that is approved by the Internal Revenue Service and involves a Participant, all as determined by the Committee in good faith, which determination may (but shall not be required to) be made in reliance on the advice of such tax counsel or other tax professional(s) with whom the Committee from time to time may elect to consult with respect to any such matter.
“Separation from Service” shall mean termination of employment (as defined in Treasury Regulations § 1.409A-1(h)) and generally encompasses the circumstances when a Participant voluntarily or involuntarily terminates employment with the Company and all Affiliates, for any reason other than death. A termination of employment occurs if the facts and circumstances indicate that the Plan Administrator and the Participant reasonably anticipate that no further services will be performed after a certain date, or that the level of bona fide services the Participant will perform after such date (whether as an employee or an independent contractor) will decrease to no more than 20 percent of the average level of bona fide services performed (whether as an employee or an
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independent contractor) over the immediately preceding 36-month period (or the full period of services if the Participant has been providing services for less than 36 months). Notwithstanding the foregoing, the employment relationship is treated as continuing while the Participant is on military leave, sick leave or other bona fide leave of absence if the period of leave does not exceed six (6) months, or if longer, so long as the Participant retains the right to reemployment with the Company or an Affiliate under an applicable statute or contract. When a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or to last for a period of at least six (6) months and such impairment causes the Participant to be unable to perform the duties of his or her position or any substantially similar position, a 29-month period of absence may be substituted for the 6-month period above.
“Specified Employee” shall mean a key employee (as defined in Code § 416(i) without regard to paragraph (5) thereof) of a Company or its Affiliates, any stock of which is publicly traded on an established securities market or otherwise. A Participant is a key employee if the Participant meets the requirements of Code §416(i)(1)(A)(i), (ii) or (iii) (applied in accordance with the regulations thereunder and disregarding Code
§416(i)(5)) at any time during the 12-month period ending each December 31. If a Participant is a key employee at any time during the 12-month period ending on such December 31, the Participant is treated as a Specified Employee for the 12-month period beginning on the following April 1. Whether any stock of Company or its successors is publicly traded on an established securities market or otherwise must be determined as of the date of the Participant’s Separation from Service. Any Participant who is at the level of Vice President or above, shall automatically be considered to be a Specified Employee, and any distribution to them shall be subject to a payment delay of six months.
“Unforeseeable Emergency” shall mean a severe financial hardship resulting from an illness or accident of the Participant, the Participant’s spouse, or a dependent (as defined in Code § 152(a)) of the Participant, loss of the Participant’s property due to casualty or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.
"Year of Participation" shall mean each consecutive 12-month period beginning on the effective date of the Participant's first deferral election made in accordance with Article IV and each anniversary date thereafter.
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ARTICLE II
Administration
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not provided him/her proper interest in the Plan. The Plan Administrator must render a decision on the claim within a reasonable period of time of the Claimant's written claim for benefits, which is within ninety (90) days of Plan Administrator’s receipt of initial claim. The Plan Administrator must provide adequate notice in writing to the Claimant whose claim for benefits under the Plan the Plan Administrator has denied. The Plan Administrator's notice to the Claimant must set forth:
If the Claimant should appeal to the Plan Administrator, he/she, or his/her duly authorized representative, must submit, in writing, whatever issues and comments he/she, or his/her duly authorized representative, believes are pertinent. The Claimant, or his/her duly authorized representative, may review pertinent Plan documents. The Plan Administrator will re-examine all facts related to the appeal and make a final determination as to whether the denial of benefits is justified under the circumstances. After receipt of the Claimant’s written request for review, the Plan Administrator must advise the Claimant of its decision within sixty (60) days after receipt of Claimant’s appeal.
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ARTICLE III
Eligibility and Participation
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ARTICLE IV
Deferral Elections and Company Contributions
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ARTICLE V
Participant Accounts and Investment of Deferred Amounts
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ARTICLE VI
Plan Benefits and Distributions
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Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).
Such election shall be made in accordance with a manner prescribed by the Plan Administrator.
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5 Year Installment | |
Payment | Factor |
1 | 5 |
2 | 4 |
3 | 3 |
4 | 2 |
5 | 1 |
(i) a re-deferral election may not take effect until at least twelve (12) months after such election is filed with the Company, (ii) an election to further defer a distribution (other than a distribution upon death, Disability or an unforeseeable emergency) must result in the first distribution subject to the election being made at least five (5) years after the previously elected date of distribution, and (iii) any re-deferral election affecting a distribution at a fixed date must be filed with the Company at least twelve (12) months before the first scheduled payment under the previous fixed date distribution election. Once a sub-account begins distribution, no such changes to distributions shall be permitted. Only one change election will be permitted for Separation from Service elections for each Plan Year contributions.
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election for any and all deferrals under the Plan to continue to defer and receive no such distribution upon a Change in Control event.
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ARTICLE VII
Amendment
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ARTICLE VIII
Miscellaneous
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employees, officers, directors, partners, agents, affiliates and representatives, from and against any and all claims, losses, liabilities, costs, damages and expenses (including without limitation reasonable attorneys’ fees) arising from any action or failure to act with respect to this Plan on account of such party’s services hereunder, excepting the case of gross negligence or willful misconduct.
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