Exhibit 10(j)(1):
THE OIL-DRI CORPORATION OF AMERICA DEFERRED COMPENSATION PLAN
As Amended and Restated Effective April 1, 2003
ARTICLE 1 - INTRODUCTION
1.1 PURPOSE OF PLAN
Oil-Dri Corporation of America, a Delaware corporation, has adopted the Plan set
forth herein to provide a means by which certain employees and non-employee
directors may elect to defer receipt of designated percentages or amounts of
their Compensation.
1.2 STATUS OF PLAN
The Plan is intended to be "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 ERISA, and shall be interpreted
and administered to the extent possible in a manner consistent with that intent.
ARTICLE 2 - DEFINITIONS
Wherever used herein, the following terms have the meanings set forth below,
unless a different meaning is clearly required by the context:
2.1 ACCOUNT means for each Participant, the bookkeeping account
established for his or her benefit under Section 5.1.
2.2 CHANGE OF CONTROL has the meaning set forth in the Oil-Dri
Corporation of America 1995 Long-Term Incentive Plan,as amended from
time to time.
2.3 CLAIMANT means a Participant or beneficiary of a Participant
who believes he or she is entitled to a benefit under the Plan.
2.4 CODE means the Internal Revenue Code of 1986, as amended from time
to time. Reference to any section or subsection of the Code includes reference
to any comparable or succeeding provisions of any legislation which amends,
supplements or replaces such section or subsection.
2.5 COMPANY means Oil-Dri Corporation of America or any successor to
all or a major portion of the Company's assets or business which assumes the
obligations of the Company.
2.6 COMPENSATION means employee cash compensation, including but not limited
to, base salary and bonuses payable under the Oil-Dri Corporation of America
Annual Incentive Plan (hereafter "Incentive Bonus"), and director cash
compensation, including but not limited to, retainers, meeting fees, and
consulting fees, payable to a Participant by the Company or an Employer.
Employee compensation is determined before giving effect to Elective Deferrals
and other salary reduction amounts which are not included in the Participant's
gross income under Code sections 125, 401(k), 402(h) or 403(b).
2.7 EARNINGS means the Company's long-term borrowing cost in effect during the
quarter for which Earnings are being credited plus one percent. Prior to October
1, 2000 Earnings means the reported composite rate of return experienced by the
investment portfolio(s) chosen by a Participant as crediting indices; and for
the portfolio referred to as the Oil-Dri Declared Rate Fund, Earnings means the
Company's long-term borrowing cost ("Interest") in effect during the quarter for
which Earnings are being credited. Prior to January 1, 1999, Earnings means
Interest as defined in this Section 2.7. For Participants who retired prior to
January 1, 1999, Earnings will continue to mean Interest as defined in this
Section 2.7.
2.8 EFFECTIVE DATE means December 15, 1995.
2.9 ELECTION FORM means the participation election form as approved and
prescribed by the Plan Administrator.
2.10 ELECTIVE DEFERRAL means the portion of Compensation which is deferred by
a Participant under Section 4.1.
2.11 ELIGIBLE EMPLOYEE OR DIRECTOR generally means each employee of an Employer
who is at a salary grade of Grade 10 or higher at the time he or she elects to
make Elective Deferrals or a non-employee who is a member of the Company's Board
of Directors. The Company reserves the right to from time to time extend
eligibility to participate in the Plan to a management employee of the Company
who is at a salary grade less than Grade 10.
2.11 EMPLOYER means the Company and each other entity that is affiliated with
the Company which adopts the Plan with the consent of the Company.
2.12 ERISA means the Employee Retirement Income Security Act of 1974, as amended
from time to time. Reference to any section or subsection of ERISA includes
reference to any comparable or succeeding provisions of any legislation which
amends, supplements or replaces such section or subsection.
2.13 INSOLVENT means either (i) the Company is unable to pay its debts as they
become due, or (ii) the Company is subject to a pending proceeding as a debtor
under the United States Bankruptcy Code.
2.14 PARTICIPANT means any individual who participates in the Plan in
accordance with Article 3.
2.15 PLAN means the Oil-Dri Corporation of America Deferred Compensation
Plan and all amendments thereto.
2.16 PLAN ADMINISTRATOR means the person, persons or entity designated by the
Company from time to time to administer the Plan. If no such person, persons or
entity is so serving at any time, the Company shall be the Plan Administrator.
2.17 PLAN YEAR means the 12-month period beginning January 1 and ending
December 31.
2.18 TOTAL AND PERMANENT DISABILITY means the inability of a Participant to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months, and the permanence and degree of which shall be
supported by medical evidence satisfactory to the Plan Administrator.
2.19 UNFORESEEN EMERGENCY has the mean set forth in Section 7.6
ARTICLE 3 - PARTICIPATION
3.1 COMMENCEMENT OF PARTICIPATION
Any individual who elects to defer part of his or her Compensation in accordance
with Section 4.1 shall become a Participant in the Plan as of the date such
deferrals commence in accordance with Section 4.1.
3.2 CONTINUED PARTICIPATION
A Participant in the Plan shall continue to be a Participant so long as any
amount remains credited to his or her Account.
ARTICLE 4 - ELECTIVE DEFERRALS
4.1 ELECTIVE DEFERRALS
An individual who is an Eligible Employee or Director on the Effective Date may,
by completing an Election Form and filing it with the Plan Administrator on or
before the Effective Date, elect to defer a percentage or dollar amount of one
or more payments of Compensation (other than Incentive Bonus), on such terms as
the Plan Administrator may permit, which are for services to be performed by the
Participant in the Plan Year immediately following the Effective Date. A
Participant may, by completing an Election Form and filing it with the Plan
Administrator on or before March 15 of any Plan Year, elect to defer a
percentage of any Incentive Bonus payable in such Plan Year. A Participant other
than a non-employee director may elect to defer only up to 50% of base salary,
provided that such deferral shall equal a minimum of $5,000 and up to 100% of
any Incentive Bonus. A Participant who is a non-employee director may elect
to defer all or any part of such Participant's Compensation. Any individual
who becomes an Eligible Employee or Director after the Effective Date may,
by completing an Election Form and filing it with the Plan Administrator
within 30 days after becoming an Eligible Employee or Director,
elect to defer a percentage or dollar amount of one or more payments
of Compensation, on such terms as the Plan Administrator may permit, which are
for services to be performed by the Participant after the date on which the
individual files the Election Form. Any Eligible Employee or Director who has
not otherwise initially elected to defer Compensation in accordance with this
Section 4.1 may elect to defer a percentage or dollar amount of one or more
payments of Compensation, on such terms as the Plan Administrator may permit,
commencing with Compensation paid in the next succeeding Plan Year, by
completing an Election Form and filing it with the Plan Administrator on or
before November 15 of the year preceding such Plan Year. A Participant's
Compensation shall be reduced in accordance with the Participant's election
hereunder and amounts deferred hereunder shall be credited to the Participant's
Account as of the date the amounts would have been paid to the Participant
absent the deferral election. Elective Deferrals shall not be in effect for any
Participant during any period in which such Participant is eligible to receive
benefits under the Company's Long Term Disability policy.
An election to defer a percentage or dollar amount of Compensation for any Plan
Year shall apply for only such Plan Year. For each succeeding Plan Year an
Eligible Employee or Director must make a new deferral election by completing
and filing with the Plan Administrator an Election Form on or before the 15th of
November preceding that Plan Year with respect to Compensation other than
Incentive Bonus (except that elections for the Plan Year 1996 may be made up to
and including the effective date of December 15, 1995) and before the 15th of
March with respect to Incentive Bonus.
ARTICLE 5 - ACCOUNTS
5.1 ACCOUNTS
The Plan Administrator shall establish a bookkeeping Account for each
Participant reflecting Elective Deferrals made for the Participant's benefit and
any distributions to the Participant, together with any adjustments for
Earnings. The Plan Administrator shall provide the Participant as soon as
practicable after the end of the Plan Year with a statement of his or her
Account as of the last business day of the Plan Year, reflecting the amounts of
deferrals, Earnings, and distributions of such Account since the prior
statement. Prior to October 1, 2000 and subsequent to January 1, 1999 the Plan
Administrator shall provide each Participant with a statement showing the status
of his or her account as of the end of the calendar quarter.
5.2 EARNINGS CREDITED
Each Participant's Account shall be adjusted for Earnings. Effective October 1,
2000 Earnings adjustments shall be calculated at a rate equal to the Company's
long-term borrowing cost in effect during the quarter for which the
Participant's Account is being adjusted plus one percent.
Prior to October 1, 2000, Earnings adjustments shall be calculated at a rate
computed as if the Participant's Account had been invested in whole and
fractional shares of the investment portfolio(s) selected by the Participant as
crediting indices. For purposes of computing these Earnings adjustments,
Elective Deferrals shall be assumed to have been invested in shares of the
crediting indices on each date a transaction is credited to or debited from the
Participant's account, at the trading price of the crediting indices on such
date or the first business day thereafter. Earnings adjustments shall be
computed as if all dividends paid on the crediting indices were reinvested in
whole or fractional shares on the date paid.
Prior to January 1, 1999 earnings adjustments shall be calculated at the
Interest rate as defined in Section 2.7. For Participants who retired prior to
January 1, 1999, the rate for calculation of Earnings will continue to be the
Interest rate.
5.3 CREDITING INDICES
Effective October 1, 2000 no crediting indices shall be offered under the Plan.
Prior to October 1 and subsequent to January 1, 1999 the Company shall select
investment portfolios to serve as crediting indices. Each Participant may
designate any combination (in increments of not less than 5%) of these
portfolios to be used as the crediting indices for his or her account.
Participants do not have an ownership interest in the investment portfolio(s)
chosen by them as crediting indices. Each Participant may change his or her
designated portfolio(s) to be effective the first day of any quarter by
submitting the appropriate form to the Plan Administrator at least ten days
prior to the first day of such quarter. Any designation of new crediting indices
will result in an Earnings adjustment equivalent to a sale of shares in the
current crediting indices and a purchase of shares in the new crediting indices
on the first day of the quarter or the first business day thereafter. The
Company may from time to time change the selection of investment portfolios
offered to Participants as crediting indices. The Plan Administrator shall
notify each Participant of any such change in investment portfolios.
ARTICLE 6 - VESTING
6.1 GENERAL
A Participant shall be immediately vested in and, subject to Participant's
elections as to time and form of payment under Section 7.1, shall have a
nonforfeitable right to, all Elective Deferrals and all Earnings attributable
thereto credited to his or her Account.
ARTICLE 7 - PAYMENTS
7.1 ELECTION AS TO TIME AND FORM OF PAYMENT
A Participant shall elect on the Election Form the date at which the Elective
Deferrals (including any Earnings attributable thereto) will commence to be paid
to the Participant. Such date must be at least five years following the date at
which such Elective Deferrals commence or the date of retirement, whichever
occurs first. The Participant shall also elect thereon for payments to be paid
in either:
a. a single lump sum; or
b. annual installments over a period elected by the Participant up to 15 years,
the amount of each installment to equal the balance of his or her Account
immediately prior to the installment divided by the number of installments
remaining to be paid ("Annual Installments").
Each such election will be effective only for deferrals (including any
Earnings attributable thereto) for the Plan Year for which it is made.
Except as provided in Sections 7.2, 7.3, 7.4, 7.5 or 7.6, payment of a
Participant's Account shall be made in accordance with the Participant's
elections under this Section 7.1 Such elections will be irrevocable except
that a Participant who has elected to receive payments only upon retirement,
may change the method of payment by completing a new Election Form more
than one year in advance of retirement.
7.2 CHANGE OF CONTROL
The Plan will terminate upon a Change of Control. Immediately prior to the
consummation of a transaction resulting in a Change of Control or, if not
possible, as soon as possible following a Change of Control, each Participant
shall be paid his or her entire Account balance in a single lump sum.
7.3. TERMINATION OF EMPLOYMENT PRIOR TO AGE 55
Upon termination of a Participant's employment for any reason other than death
prior to the attainment of age 55, the Participant's entire Account shall be
paid to the Participant in a single lump sum as soon as practicable following
the end of the quarter in which such termination occurs.
7.4 DISABILITY
If a Participant suffers a Total and Permanent Disability prior to the complete
distribution of his or her Account balance, the following provisions shall
apply:
a. If the Participant is receiving disability benefits under the Company's
short-term or long-term disability plan, the Participant will be treated as
actively employed and payment from the Participant's account shall not be
made. The Participant may, at his or her election, apply for
payment because of Unforeseen Emergency under Section 7.6.
b. If disability benefits under the Company's disability plans cease due to
recovery from the Total and Permanent Disability, and the Participant does
not return to employment with the Company, the Participant's Account shall
be paid to the Participant as provided in Section 7.3.
7.5 DEATH
If a Participant dies prior to the complete distribution of his or her Account,
the balance of the Account shall be paid, according to the Participant's
irrevocable election on the Election Form, to the Participant's designated
beneficiary or beneficiaries. Payment in a single lump sum shall be made as soon
as practicable following the end of the quarter in which death occurs. Payment
in annual installments shall commence the year immediately following the year in
which death occurs.
Any designation of beneficiary and form of payment to such beneficiary shall be
made by the Participant on a designation/change of beneficiary form filed with
the Plan Administrator and may be changed by the Participant at any time by
filing another designation/change of beneficiary form containing the revised
instructions. If no beneficiary is designated or no designated beneficiary
survives the Participant, payment shall be made to the Participant's surviving
spouse, or, if none, to his or her issue per stirpes, in a single payment. If no
spouse or issue survives the Participant payment shall be made in a single lump
sum to the Participant's estate.
7.6 UNFORESEEN EMERGENCY
If a Participant suffers an Unforeseen Emergency, as defined herein, the Plan
Administrator, in its sole discretion, may pay to the Participant only that
portion, if any, of his or her Account which the Plan Administrator determines
is necessary to satisfy the emergency need, including at the discretion of the
Plan Administrator any amounts necessary to pay any federal, state and local
income taxes reasonably anticipated to result from the distribution. A
Participant requesting emergency payment shall apply for the payment in writing
in a form approved by the Plan Administrator and shall provide such additional
information as the Plan Administrator may require. For purposes of this section,
Unforeseen Emergency means an immediate and heavy financial need resulting from
any of the following:
a. expenses which are not covered by insurance and which the Participant or his
or her spouse or dependent has incurred as a result of sudden and unexpected
illness or accident; or
b. expenses which are not covered by insurance and which the Participant or his
or her spouse or dependent has incurred or must incur as a result of a
casualty loss.
7.7 TAXES
All federal, state and local taxes that the Plan Administrator determines are
required to be withheld from any payments made pursuant to this Article 7 shall
be withheld.
7.8 CLAIMS PROCEDURE
A Claimant may file a claim for benefits with the Plan Administrator, in such
form as permitted by the Plan Administrator. The claim will be evaluated and a
decision rendered within ninety (90) days, unless special circumstances require
an additional ninety (90) day extension of time.
A Claimant shall be given written notice of whether the claim is granted or
denied, in whole or in part, including (1) specific reasons for the denial, (2)
references to pertinent Plan provisions on which the denial is based, (3) a
description of any additional material or information necessary to perfect the
claim and explanation as to why necessary, and (4) the Claimant's right to seek
review of the denial.
If denied, in whole or in part, the Claimant may make a written request for
review of such denial to the Plan Administrator within 60 days after receipt of
the denial, and may include pertinent documents, issues and comments to aid the
Plan Administrator. The request will be evaluated and a decision rendered within
sixty (60) days, unless special circumstances require an additional sixty (60)
day extension of time. The written decision will specify reasons for the
decision and references to Plan provisions upon which the decision is based.
A Claimant who fails to file a claim, or submit a request for review of an
initial claim shall have no right to review and shall have no right to bring
action in any court. The denial of the claim shall be final and binding on all
persons for all purposes.
7.9 SECTION 162(M) LIMITATIONS
In the event that any amount to be paid pursuant to Section 7.1, 7.3, 7.4, 7.5
or 7.6 would, in the Company's judgment, result in the non-deductibility, under
Section 162(m) of the code, of any portion of such Participant's income payable
by or attributable to the Company for the year in which such amount is to be
paid, such amount shall not be paid in such year. Such nondeductible amount
shall be payable in the following calendar year, as an addition to the annual
installment scheduled to be paid in such following calendar year, if applicable,
subject to the provisions of this Section 7.9.
ARTICLE 8 - PLAN ADMINISTRATOR
8.1 PLAN ADMINISTRATION AND INTERPRETATION
The Plan Administrator shall oversee the administration of the Plan. The Plan
Administrator shall have complete control and authority to determine the rights
and benefits and all claims, demands and actions arising out of the provisions
of the Plan of any Participant, beneficiary, deceased Participant, or other
person having or claiming to have any interest under the Plan. The Plan
Administrator shall have complete discretion to interpret the Plan and to decide
all matters under the Plan. Such interpretation and decision shall be final,
conclusive and binding on all Participants and any person claiming under or
through any Participant, in the absence of clear and convincing evidence that
the Plan Administrator acted arbitrarily and capriciously. Any individual(s)
serving as Plan Administrator who is a Participant will not vote or act on any
matter relating solely to himself or herself. In such case, the Company will
appoint an individual to act as Plan Administrator to take such actions. When
making a determination or calculation, the Plan Administrator shall be entitled
to rely on information furnished by a Participant, a beneficiary or the Company.
The Plan Administrator shall have the responsibility for complying with any
reporting and disclosure requirements of ERISA.
8.2. POWERS, DUTIES, PROCEDURES, ETC.
The Plan Administrator shall have such powers and duties, may adopt such rules
and tables, may act in accordance with such procedures, may appoint such
officers or agents, may delegate such powers and duties, may receive such
reimbursements, and shall follow such claims and appeal procedures with respect
to the Plan as it may establish.
8.3 INFORMATION
To enable the Plan Administrator to perform its functions, the Company shall
supply full and timely information to the Plan Administrator on all matters
relating to the compensation of Participants, their employment, retirement,
death, termination of employment, and such other pertinent facts as the Plan
Administrator may require.
8.4 INDEMNIFICATION OF PLAN ADMINISTRATOR
The Company agrees to indemnify and to defend to the fullest extent permitted by
law any officer(s) or employee(s) who serve as Plan Administrator (including any
such individual, whether a present or former employee, who formerly served as
Plan Administrator) against all liabilities, damages, costs and expenses
(including attorneys' fees and amounts paid in settlement of any claims approved
by the Company) occasioned by any act or omission to act in connection with the
Plan, if such act or omission is in good faith.
ARTICLE 9 - AMENDMENT AND TERMINATION
9.1 AMENDMENTS
The Company shall have the right to amend the Plan from time to time, subject to
Section 9.3, by an instrument in writing which has been executed on the
Company's behalf by its Chief Executive Officer or another executive officer of
the Company, with the specific approval of the board of directors, or an
authorized committee of the board of directors.
9.2 TERMINATION OF PLAN
This Plan is strictly a voluntary undertaking on the part of the Company and
shall not be deemed to constitute a contract between the Company and any
Eligible Employee or Director (or any other employee) or a consideration for or
condition of employment or an inducement for the performance of services by an
Eligible Employee or Director (or other employee). The Company reserves the
right to terminate the Plan at any time, subject to Section 9.3, by an
instrument in writing which has been executed on the Company's behalf by its
Chief Executive Officer or another executive officer of the Company, with the
specific approval of the board of directors, or an authorized committee of the
board of directors. In addition, the Plan shall terminate upon a Change of
Control in accordance with Section 7.2.
9.3 EXISTING RIGHTS
No amendment or termination of the Plan shall adversely affect the rights of any
Participant with respect to amounts that have been credited to his or her
Account prior to the date of such amendment or termination.
ARTICLE 10 - MISCELLANEOUS
10.1 NO FUNDING
The Plan constitutes a mere promise by the Company to make payments in
accordance with the terms of the Plan and Participants and beneficiaries shall
have the status of general unsecured creditors of the Company. Nothing in the
Plan will be construed to give any employee or any other person rights to any
specific assets of the Company or of any other person. In all events, it is the
intent of the Company that the Plan be treated as unfunded for tax purposes and
for purposes of Title I of ERISA.
10.2 NON-ASSIGNABILITY
None of the benefits, payments, proceeds or claims of any Participant or
beneficiary shall be subject to any claim of any creditor of any Participant or
beneficiary, nor shall any Participant or beneficiary have any right to
alienate, anticipate, commute, pledge, encumber or assign any of the benefits or
payments or proceeds which he or she may expect to receive, contingently or
otherwise, under the Plan.
10.3 LIMITATION OF PARTICIPANT'S RIGHTS
Nothing contained in the Plan shall confer upon any person a right to be
employed or to continue in the employ of the Company, or interfere in any way
with the right of the Company to terminate the employment of a Participant in
the Plan at any time, with or without cause.
10.4 PARTICIPANTS BOUND
Any action with respect to the Plan taken by the Company or the Plan
Administrator or any action authorized by or taken at the direction of the
Company or the Plan Administrator shall be conclusive upon all Participants and
beneficiaries entitled to benefits under the Plan.
10.5 RECEIPT AND RELEASE
Any payment to any Participant or beneficiary in accordance with the provisions
of the Plan shall, to the extent thereof, be in satisfaction of claims against
the Company and/or the Plan Administrator under the Plan, and the Plan
Administrator may require such Participant or beneficiary, as a condition
precedent to such payment, to execute a receipt and release to such effect. If
any Participant or beneficiary is determined by the Plan Administrator to be
incompetent by reason of physical or mental disability, including minority, to
give a valid receipt and release, the Plan Administrator may cause payment or
payments becoming due to such person to be made to another person for his or her
benefit without responsibility on the part of the Plan Administrator or the
Company to follow the application of such funds.
10.6 GOVERNING LAW
The Plan shall be construed, administered, and governed in all respects under
and by the laws of the state of Illinois. If any provision shall be held by a
court of competent jurisdiction to be invalid or unenforceable, the remaining
provisions hereof shall continue to be fully effective.
10.7 HEADINGS AND SUBHEADINGS
Headings and subheadings in this Plan are inserted for convenience only and are
not to be considered in the construction of the provisions thereof.