PARKER-HANNIFIN CORPORATION
EXECUTIVE DEFERRAL PLAN
PARKER-HANNIFIN CORPORATION
EXECUTIVE DEFERRAL PLAN
Parker-Hannifin Corporation, an Ohio corporation, (the "Company"),
hereby establishes this Executive Deferral Plan (the "Plan"), effective
October 1, 1994, for the purpose of attracting high quality executives and
promoting in its executives increased efficiency and an interest in the
successful operation of the Company by offering a deferral opportunity to
accumulate capital on favorable economic terms. The benefits provided under
the Plan shall be provided in consideration for services to be performed after
the effective date of the Plan, but prior to the executive's retirement.
ARTICLE 1
Definitions
1.1 Administrator shall mean the Company or, if applicable, the
committee appointed by the Board of Directors of the Company to administer the
Plan pursuant to Article 12 of the Plan.
1.2 Annual Deferral shall mean the amount of Compensation which
the Participant elects to defer for a Plan Year pursuant to Articles 2 and 3
of the Plan.
1.3 Beneficiary shall mean the person or persons or entity
designated as such in accordance with Article 13 of the Plan.
1.4 Bonuses shall mean amounts paid in cash to the Participant
by the Company in the form of annual and/or long-term incentive bonuses before
reductions for deferrals under the Plan or the Savings Restoration Plan or the
Savings Plan.
1.5 Change in Control shall mean any of the following events
shall have occurred:
(i) Any person (as that term is defined in Section 13(d)(3)
or Section 14(d)(2) of the Securities Exchange Act of 1934 (the
"Exchange Act")) has become the beneficial owner (as that term is
defined under Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of securities representing
twenty-five percent (25%) of the combined voting power of the then
outstanding securities entitled to vote generally in the election of
the directors of the Company ("Voting Stock"), which ownership of
securities has not been specifically approved by the Company's Board
of Directors with specific reference to this Plan;
(ii) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act
disclosing in response to the applicable disclosure requirements of
Form 8-K or Schedule 14A (or any successor schedule, form or report
or item therein) that a change in control of the Company
has occurred or will occur in the future pursuant to any then
existing contract or transaction; provided, however, that if the
report or proxy statement reports a prospective change in control,
any consequences of a Change in Control as set forth elsewhere in
this Plan will not occur until the reported change in control has
actually occurred;
(iii) If, during any period of twenty-four (24) consecutive
months, beginning before or after the effective date of this Plan,
individuals who at the beginning of any such period constitute the
directors of the Company cease for any reasons (other than death,
disability, or retirement pursuant to the Company's policy relating
to retirement of directors, if any, in effect on the date of this
Plan) to constitute at least a majority of the Board of Directors of
the Company; provided, however, that for purposes of this clause
(iii) if a person is first elected, or first nominated for election
by the Company's stockholders, by a vote of at least two-thirds of
the Board of Directors of the Company (or a committee thereof) then
still in office who were directors of the Company at the beginning of
any such period, then such person will be deemed to have been a
director of the Company at the beginning of such period.
Notwithstanding the foregoing provisions of Sections 1.4(i) or
1.4(ii), unless otherwise determined in a specific case by a majority
vote of the Board of Directors, a Change in Control shall not be
deemed to have occurred for purposes of Sections 1.4(i) or 1.4(ii)
solely because (1) the Company, (2) an entity in which the Company
directly or indirectly beneficially owns 50% or more of the voting
equity securities (a "Subsidiary"), or (3) any employee stock
ownership plan or any other employee benefit plan of the Company or
any Subsidiary (an "Employee Plan") either files or becomes obligated
to file a report or proxy statment under or in response to the
applicable disclosure requirements of Schedule 13D, Schedule 14D-1,
Form 8-K or Schedule 14A (or any successor schedule, form or report
or item therein) under the Exchange Act disclosing beneficial
ownership by it of shares of Voting Stock, whether in excess of 25%
or otherwise, or because the Company, a Subsidiary or an Employee
Plan reports that a change in control of the Company has occurred or
will occur in the future by reason of such beneficial ownership.
1.6 Compensation shall mean the sum of the Participant's base
salary and anticipated bonuses (including profit-sharing, RONA, and incentive
bonuses paid in cash) for a Plan Year before reductions for deferrals under
the Plan, or the Savings Restoration Plan, or the Savings Plan, or the
Benefits Plus Program.
1.7 Crediting Rate shall mean any notional gains or losses equal
to those generated as if the Deferral Account balance attributable to Annual
Deferrals under Article 3 had been invested in one or more of the investment
portfolios sponsored by The Prudential Series Fund, Inc. and designated as
available by the Administrator, less separate account fees and less applicable
administrative charges determined annually by the Administrator.
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The allocation of the Deferral Account shall be determined by the
Participant among one or more of the available portfolios. The gains or
losses shall be credited based upon the daily unit values for the portfolio(s)
selected by the Participant. The rules and procedures for allocating the
Deferral Account balance among the portfolios shall be determined by the
Administrator. Notwithstanding the method of calculating the Crediting Rate,
the Company shall be under no obligation to purchase any investments designated
by the Participant.
1.8 Deferral Account shall mean the notional account established
for record keeping purposes for a Participant pursuant to Article 4 of the
Plan.
1.9 Disability shall mean any long term disability as defined
under the Company's long term disability plan. The Administrator, in its
complete and sole discretion, shall determine a Participant's Disability. The
Administrator may require that the Participant submit to an examination on an
annual basis, at the expense of the Company, by a competent physician or
medical clinic selected by the Administrator to confirm Disability. On the
basis of such medical evidence, the determination of the Administrator as to
whether or not a condition of Disability exists or continues shall be
conclusive.
1.10 Early Retirement Date shall mean age 55 with ten or more
years of employment with the Company.
1.11 Eligible Executive shall mean a key employee of the Company
or any of its subsidiaries who (i) is designated by the Administrator as
eligible to participate in the Plan (subject to the restriction in Sections
9.2, 10.3 and 11.2 of the Plan), and (ii) qualifies as a member of the "select
group of management or highly compensated employees" under ERISA.
1.12 ERISA shall mean the Employee Retirement Income Security Act
of 1974, as amended.
1.13 Financial Hardship shall mean an unexpected need for cash
arising from an illness, casualty loss, sudden financial reversal, or other
such unforeseeable occurrence as determined by the Administrator. Cash needs
arising from foreseeable events such as the purchase of a residence or
education expenses for children shall not, alone, be considered a Financial
Hardship.
1.14 Fixed Crediting Rate shall mean an effective annual yield
equal to ninety percent (90%) of the sixty (60) month rolling average of the
Ten-Year United States Treasury Note as determined by the Administrator on
September 30 of the preceding year. Notwithstanding the preceding sentence,
with respect to the first Plan Year, the Fixed Crediting Rate shall be
determined as of September 30, 1994.
1.15 Savings Plan shall mean The Parker-Hannifin Employees'
Savings Plus Stock Ownership Plan as it currently exists and as it may
subsequently be amended.
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1.16 Savings Restoration Plan shall mean the Parker-Hannifin
Corporation Savings Restoration Plan as it currently exists and as it may
subsequently be amended.
1.17 In-Service Distribution shall mean a distribution elected by
the Participant pursuant to Article 10 of the Plan.
1.18 Normal Retirement Date shall mean the date on which a
Participant attains age 65.
1.19 Participant shall mean an Eligible Executive who has elected
to participate and has completed a Participation Agreement pursuant to Article
2 of the Plan.
1.20 Participation Agreement shall mean the Participant's written
election to participate in the Plan.
1.21 Plan Year shall mean the calendar year, except that the
first Plan Year shall be the year commencing October 1, 1994 and ending
December 31, 1994.
1.22 Retirement shall mean a termination of employment following
Normal or Early Retirement Date.
1.23 Salary shall mean the Participant's annual basic rate of pay
from the Company (excluding Bonuses, commissions and other non-regular forms
of compensation) before reductions for deferrals under the Plan or under the
Savings Restoration Plan or under the 401(k)/ESOP Plan.
1.24 Scheduled Withdrawal shall mean a distribution of all or a
portion of the entire amount credited to the Participant's Deferral Account
requested by the Participant pursuant to the provisions of Article 10 of the
Plan.
1.25 Termination of Employment shall mean the Participant's
employment with the Company ceases for any reason whatsoever, whether
voluntary or involuntary, other than Retirement or death.
1.26 Unscheduled Withdrawal shall mean a distribution of all or a
portion of the entire amount credited to the Participant's Deferral Account
requested by the Participant pursuant to the provisions of Article 10 of the
Plan.
1.27 Valuation Date shall mean the end of the month in which the
Retirement, Termination of Employment, or death occurs, except in the event of
an election to delay retirement benefits under Article 5, in which case the
Valuation Date shall mean the November 30 of the year preceding commencement
of benefit payments.
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ARTICLE 2
Participation
2.1 Participation Agreement/Annual Deferral. An Eligible
Executive shall become a Participant in the Plan on the first day of the Plan
Year following appointment as an Eligible Executive and submission to the
Administrator of a Participation Agreement. To be effective, the Eligible
Executive must submit the Participation Agreement to the Administrator during
the enrollment period designated by the Administrator. In the Participation
Agreement, and subject to the restrictions in Article 3, the Eligible
Executive shall designate the Annual Deferral for the covered Plan Year.
2.2 Continuation of Participation. An Eligible Executive who has
elected to participate in the Plan by making an Annual Deferral shall continue
as a Participant in the Plan for purposes of such Annual Deferral even though
such executive ceases to be an Eligible Executive. However, a Participant
shall not be eligible to elect a new Annual Deferral unless the Participant is
an Eligible Executive for the Plan Year for which the election is made.
ARTICLE 3
Executive Deferrals
3.1 Deferral Commitment. A Participant may elect in the
Participation Agreement to defer an amount equal to a specified percentage of
Salary and a specified percentage of Bonuses to be earned by such Participant
during the next Plan Year. The Participant may also elect to defer a
percentage of Bonuses to be earned during the next Plan Year up to a specified
maximum dollar amount. Annual Deferrals under this Plan shall be irrevocable.
3.2 Minimum Annual Deferral. The Annual Deferral for a Plan Year
must equal at least five thousand dollars ($5,000), from either Salary or
Bonuses or a combination of Salary and Bonuses.
Where a Participant elects to defer a specified percentage of Salary
and/or Bonuses, the determination of whether the Annual Deferral is at least
five thousand dollars ($5,000) shall be made by multiplying the applicable
elected percentages of Salary and Bonuses to be deferred by the Participant's
Salary and Bonuses in the Plan Year immediately preceding the Deferral
Contribution Period. The Administrator may, in its sole discretion, permit
Participants to elect to defer amounts in the form of a percentage based on
anticipated future Salary and Bonuses.
3.3 Maximum Deferral Commitment. The Annual Deferral for any
Plan Year may not exceed 20% of Salary plus 100% of Bonuses. Notwithstanding
the foregoing, the Annual Deferral may not reduce the Participant's income to
an amount below the old age, survivor, and disability insurance wage base
under Social Security.
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3.4 Vesting. The Participant's right to receive Compensation
deferred (and gains or losses thereon) under this Article 3 shall be 100%
vested at all times.
ARTICLE 4
Deferral Accounts
4.1 Deferral Accounts. Solely for recordkeeping purposes, the
Company shall maintain a Deferral Account for each Participant.
4.2 Timing of Credits -- Pre-Termination. The Company shall
credit to the Deferral Account the Annual Deferrals under Article 3 at the
time the deferrals would otherwise have been paid to the Participant but for
the deferral election. The Company shall also credit gains or losses to the
Deferral Account each calendar quarter, or as of the Valuation Date, using the
Crediting Rate in effect.
4.3 Mid-Year Terminations. If a Participant's Termination of
Employment occurs other than at the end of a Plan Year, the Company shall
credit gains or losses to the Deferral Account from the first day of such Plan
Year to the Valuation Date.
4.4 Statement of Accounts. The Administrator shall provide
periodically to each Participant a statement setting forth the balance of the
Deferral Account maintained for such Participant.
ARTICLE 5
Retirement Benefits
5.1 Amount. Upon Retirement, the Company shall pay to the
Participant a retirement benefit in the form provided in Section 5.2 of the
Plan, based on the balance of the Deferral Account as of the Valuation Date.
If paid as a lump sum, the retirement benefit shall be equal to such balance.
If paid in installments, the installments shall be paid in amounts that will
amortize such balance with interest credited at the Crediting Rate over the
period of time benefits are to be paid. For purposes of calculating
installments, an assumed rate of interest established by the Administrator
shall be applied to the balance and reconciled once annually with the actual
Crediting Rate for the period; any excess earnings shall be paid in an
additional payment once per year, and any overpayments shall be deducted pro
rata over the remaining installments.
5.2 Form of Retirement Benefits. The retirement benefit shall
be paid monthly over a period of one hundred eighty (180) months or the
number of months required to result in a monthly benefit of one thousand
dollars $1,000.00, if less. Notwithstanding anything herein to the contrary,
the Participant may elect in the Participation Agreement to have the
retirement benefit paid in a lump sum or in installments paid monthly over a
period of sixty (60) or one hundred twenty (120) months. Payment shall be
made or shall begin as of the first day of the calendar quarter next following
the date sixty (60)
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days after the Participant's Retirement unless the Participant elects in the
Participation Agreement for payments to begin on January l of a later year.
However, in all events payments shall commence on or before the earlier of the
date the retired Participant attains age seventy (70) or the January 1 five
years after Retirement. Except as provided under Section 9.2, Participants
may elect an alternative form of payout as available under this Section 5.2 by
written election filed with the Administrator; provided, however, that if the
Participant files the election less than thirteen (13) months prior to the
date benefit payments are to commence, the Deferral Account shall be reduced
by ten percent (10%).
5.3 Small Benefit Exception. Notwithstanding any of the
foregoing, if the sum of all benefits payable to the Participant is less than
or equal to five thousand dollars ($5,000), the Company may, in its sole
discretion, elect to pay such benefits in a single lump sum.
ARTICLE 6
Termination Benefits
6.1 Amount. As of the first day of the calendar quarter
beginning at least sixty (60) days after Termination of Employment, the
Company shall pay to the Participant a termination benefit equal to the
balance of the Deferral Account as of the Valuation Date.
6.2 Form of Termination Benefits. The Company shall pay the
termination benefits in a single lump sum; provided, however, that except
following a Change in Control the Company may, in its sole discretion, elect
to pay the termination benefits over a period of three (3) years in monthly
installments, in which event the Company shall credit interest on the unpaid
balance of the Deferral Account after the Valuation Date at the Fixed
Crediting Rate in effect at the time of Termination of Employment.
ARTICLE 7
Survivor Benefits
7.1 Pre-Commencement Survivor Benefit. If the Participant dies
prior to the time installment payments have commenced, the Company shall pay
to the Participant's Beneficiary within ninety (90) days after the
Participant's death a benefit equal to the balance of the Participant's
Deferral Account as of the Valuation Date.
7.2 Post-Commencement Survivor Benefit. If the Participant dies
after the time installment payments have commenced, the Company shall pay to
the Participant's Beneficiary an amount equal to the remaining benefits
payable to the Participant under the Plan over the same period such benefits
would have been paid to the Participant, in which event the Company shall
credit interest on the unpaid balance of the Deferral Account at the Fixed
Crediting Rate in effect at the date of the Participant's death.
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7.3 Small Benefit Payment. Notwithstanding any of the
foregoing, in the event the sum of all benefits payable to the Beneficiary is
less than or equal to five thousand dollars ($5,000), the Company may, in its
sole discretion, elect to pay such benefits in a single lump sum.
ARTICLE 8
Disability
If a Participant suffers a Disability, the Company shall pay the
benefit described in Article 5 to the Participant as if the date of the
Participant's Termination of Employment for Disability were the Participant's
Normal Retirement Date.
ARTICLE 9
Change in Control
9.1 Election. At the time the Participant is completing his
initial Participation Agreement, the Participant may elect that, if a Change
in Control occurs, the Participant (or after the Participant's death the
Participant's Beneficiary) shall receive a lump sum payment of the balance of
the Deferral Account within thirty (30) days after the Change of Control.
Such balance shall be determined as of end of the month sixty (60) days prior
to the month in which the Change of Control occurs.
9.2 Benefit Reduction on Withdrawal. If a Participant has not
made the election described in Section 9.1 above and, within thirty (30) days
after a Change of Control, the Participant (or Beneficiary) elects to receive
a distribution of the balance of the Deferral Account (determined as described
in Section 10.2 herein), the lump sum payment shall be reduced by an amount
equal to five percent (5%) of the total vested balance of the Deferral Account
(instead of the ten percent (10%) reduction otherwise provided for in Section
10.3). If a Participant elects such a withdrawal, any on-going Annual
Deferral shall cease, and the Participant may not again be designated as an
Eligible Executive until one entire Plan Year following the Plan Year in which
such withdrawal was made has elapsed.
ARTICLE 10
Scheduled and Unscheduled Withdrawals
10.1 Payment of Scheduled Withdrawal. No later than the last day
of February of the Plan Year designated in the initial Participation Agreement
for a Scheduled Withdrawal, the Company shall pay to the Participant, in a
lump sum or four approximately equal annual installments, all or a portion of
the vested balance in the Participant' s Deferral Account.
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10.2 Election. A Participant (or Beneficiary if the Participant
is deceased) may request an Unscheduled Withdrawal of all or any portion of
the entire amount credited to the Participant's Deferral Account, which shall
be paid in a single lump sum; provided, however, (i) that the minimum
withdrawal shall be twenty-five percent (25%) of the Deferral Account balance,
and (ii) that an election to withdraw seventy-five percent (75%) or more of
the Deferral Account balance shall be deemed to be an election to withdraw the
entire Deferral Account balance.
10.3 Withdrawal Penalty. There shall be a penalty deducted from
the Deferral Account prior to an Unscheduled Withdrawal equal to ten percent
(10%) of the Unscheduled Withdrawal. If a Participant elects such a
withdrawal, any on-going Annual Deferral shall cease, and the Participant may
not again be designated as an Eligible Executive until one entire Plan Year
following the Plan Year in which such withdrawal was made has elapsed.
10.4 Small Benefit Exception. Notwithstanding any of the
foregoing, if the sum of all benefits payable to the Participant or
Beneficiary who has requested the Unscheduled Withdrawal is less than or equal
to five thousand dollars ($5,000), the Company may, in its sole discretion,
elect to pay out the entire Deferral Account balance (reduced by the ten
percent (10%) penalty) in a single lump sum.
ARTICLE 11
Conditions Related to Benefits
11.1 Nonassignability. The benefits provided under the Plan may
not be alienated, assigned, transferred, pledged or hypothecated by or to any
person or entity, at any time or any manner whatsoever. These benefits shall
be exempt from the claims of creditors of any Participant or other claimants
and from all orders, decrees, levies, garnishment or executions against any
Participant to the fullest extent allowed by law.
11.2 Financial Hardship Distribution. Upon a finding that the
Participant or the Beneficiary has suffered a Financial Hardship, the
Administrator may in its sole discretion, permit the Participant to cease any
on-going deferrals and accelerate distributions of benefits under the Plan in
the amount reasonably necessary to alleviate such Financial Hardship. If a
distribution is to be made to a Participant on account of Financial Hardship,
the Participant may not make deferrals under the Plan until one entire Plan
Year following the Plan Year in which a distribution based on Financial
Hardship has elapsed.
11.3 No Right to Company Assets. The benefits paid under the
Plan shall be paid from the general funds of the Company, and the Participant
and any Beneficiary shall be no more than unsecured general creditors of the
Company with no special or prior right to any assets of the Company for
payment of any obligations hereunder.
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11.4 Protective Provisions. The Participant shall cooperate with
the Company by furnishing any and all information requested by the
Administrator, in order to facilitate the payment of benefits hereunder,
taking such physical examinations as the Administrator may deem necessary and
taking such other actions as may be requested by the Administrator. If the
Participant refuses to cooperate, the Company shall have no further obligation
to the Participant under the Plan. In the event of a Participant's suicide
during the first two (2) years of participation in the Plan, or if the
Participant makes any material misstatement of information or nondisclosure of
medical history, then no benefits shall be payable to the Participant or the
Participant's Beneficiary or estate under the Plan beyond the sum of the
Participant's Annual Deferrals.
11.5 Withholding. The Participant or the Beneficiary shall make
appropriate arrangements with the Company for satisfaction of any federal,
state or local income tax withholding requirements and Social Security or
other employee tax requirements applicable to the payment of benefits under
the Plan. If no other arrangements are made, the Company may provide, at its
discretion, for such withholding and tax payments as may be required.
ARTICLE 12
Administration of Plan
The Company shall administer the Plan, provided, however, that the
Company may elect by action of its Board of Directors to appoint a committee
of three (3) or more individuals to administer the Plan. All references to
the Administrator herein shall refer to the Company or, if such committee has
been appointed, the committee.
The Administrator shall administer the Plan and interpret, construe
and apply its provisions in accordance with its terms. The Administrator
shall further establish, adopt or revise such rules and regulations as it may
deem necessary or advisable for the administration of the Plan. All decisions
of the Administrator shall be final and binding. The individuals serving on
the committee shall, except as prohibited by law, be indemnified and held
harmless by the Company from any and all liabilities, costs, and expenses
(including legal fees), to the extent not covered by liability insurance
arising out of any action taken by any member of the committee with respect to
the Plan, unless such liability arises from the individual's own gross
negligence or willful misconduct.
ARTICLE 13
Beneficiary Designation
The Participant shall have the right, at any time, to designate any
person or persons as Beneficiary (both primary and contingent) to whom payment
under the Plan shall be made in the event of the Participant's death. The
Beneficiary designation shall be effective when it is submitted in writing to
the Administrator during the Participant's lifetime on a form prescribed by
the Administrator.
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The submission of a new Beneficiary designation shall cancel all
prior Beneficiary designations. Any finalized divorce or marriage of a
Participant subsequent to the date of a Beneficiary designation shall revoke
such designation, unless in the case of divorce the previous spouse was not
designated as Beneficiary and unless in the case of marriage the Participant's
new spouse has previously been designated as Beneficiary. The spouse of a
married Participant shall consent to any designation of a Beneficiary other
than the spouse, and the spouse's consent shall be witnessed by a notary
public.
If a Participant fails to designate a Beneficiary as provided above,
or if the Beneficiary designation is revoked by marriage, divorce, or
otherwise without execution of a new designation, or if every person
designated as Beneficiary predeceases the Participant or dies prior to
complete distribution of the Participant's benefits, then the Administrator
shall direct the distribution of such benefits to the Participant's estate.
ARTICLE 14
Amendment and Termination of Plan
14.1 Amendment of Plan. Except as provided in Section 14.3, the
Company may at any time amend the Plan in whole or in part, provided, however,
that such amendment (i) shall not decrease the balance of the Participant's
Deferral Account at the time of such amendment and (ii) shall not
retroactively decrease the applicable Crediting Rate of the Plan prior to the
time of such amendment. The Company may amend the Crediting Rate or Fixed
Crediting Rate of the Plan prospectively, in which case, the Company shall
notify the Participant of such amendment in writing within thirty (30) days
after such amendment.
14.2 Termination of Plan. Except as provided in Section 14.3,
the Company may at any time terminate the Plan. If the Company terminates the
Plan, the date of such termination shall be treated as the date of Retirement
or Termination of Employment for the purpose of calculating Plan benefits, and
the Company shall pay to the Participant the benefits the Participant is
entitled to receive under the Plan in monthly installments over a thirty-six
(36) month period. Interest at the Fixed Crediting Rate will be credited to
the Participant's Deferral Account prospectively commencing as of the date of
the Plan's termination and continuing until distribution under this Section is
completed.
14.3 Amendment or Termination After Change in Control.
Notwithstanding the foregoing, the Company shall not amend or terminate the
Plan without the prior written consent of affected Participants for a period
of two calendar years following a Change in Control and shall not thereafter
amend or terminate the Plan in any manner which affects any Participant (or
Beneficiary of a deceased Participant) who commences receiving payment of
benefits under the Plan prior to the end of such two year period following a
Change in Control.
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14.4 Company Action. Except as provided in Section 14.3 or 14.5,
the Company's power to amend or terminate the Plan shall be exercisable by the
Company's Board of Directors or by the committee or individual authorized by
the Company's Board of Directors to exercise such powers.
14.5 Constructive Receipt Termination. In the event the
Administrator determines that amounts deferred under the Plan have been
constructively received by Participants and must be recognized as income for
federal income tax purposes, the Plan shall terminate and distributions shall
be made to Participants in accordance with the Provisions of Section 14.2 or
as may be determined by the Administrator. The determination of the
Administrator under this Section shall be binding and conclusive.
ARTICLE 15
Miscellaneous
15.1 Successors of the Company. The rights and obligations of
the Company under the Plan shall inure to the benefit of, and shall be binding
upon, the successors and assigns of the Company.
15.2 ERISA Plan. The Plan is intended to be an unfunded plan
maintained primarily to provide deferred compensation benefits for "a select
group of management or highly compensated employees" within the meaning of
Sections 201, 301 and 401 of ERISA and therefore to be exempt from Parts 2, 3
and 4 of Title I of ERISA.
15.3 Trust. The Company shall be responsible for the payment of
all benefits under the Plan. At its discretion, the Company may establish one
or more grantor trusts for the purpose of providing for payment of benefits
under the Plan. Such trust or trusts may be irrevocable, but the assets
thereof shall be subject to the claims of the Company's creditors. Benefits
paid to the Participant from any such trust shall be considered paid by the
Company for purposes of meeting the obligations of the Company under the Plan.
15.4 Employment Not Guaranteed. Nothing contained in the Plan
nor any action taken hereunder shall be construed as a contract of employment
or as giving any Participant any right to continued employment with the
Company.
15.5 Gender, Singular and Plural. All pronouns and variations
thereof shall be deemed to refer to the masculine, feminine, or neuter, as the
identity of the person or persons may require. As the context may require,
the singular may be read as the plural and the plural as the singular.
15.6 Captions. The captions of the articles and sections of the
Plan are for convenience only and shall not control or affect the meaning or
construction of any of its provisions.
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15.7 Validity. If any provision of the Plan is held invalid,
void or unenforceable, the same shall not affect, in any respect whatsoever,
the validity of any other provisions of the Plan.
15.8 Waiver of Breach. The waiver by the Company of any breach
of any provision of the Plan by the Participant shall not operate or be
construed as a waiver of any subsequent breach by the Participant.
15.9 Applicable Law. The Plan shall be governed and construed in
accordance with the laws of Ohio except where the laws of Ohio are preempted
by ERISA.
15.10 Notice. Any notice or filing required or permitted to be
given to the Company under the Plan shall be sufficient if in writing and
hand-delivered, or sent by first class mail to the principal office of the
Company, directed to the attention of the Administrator. Such notice shall be
deemed given as of the date of delivery, or, if delivery is made by mail, as
of the date shown on the postmark.
ARTICLE 16
Claims and Review Procedures
16.1 Claims Procedure. The Company shall notify a Participant in
writing, within ninety (90) days after his or her written application for
benefits, of his or her eligibility or noneligibility for benefits under the
Plan. If the Company determines that a Participant is not eligible for
benefits or full benefits, the notice shall set forth (1) the specific reasons
for such denial, (2) a specific reference to the provisions of the Plan on
which the denial is based, (3) a description of any additional information or
material necessary for the claimant to perfect his or her claim, and a
description of why it is needed, and (4) an explanation of the Plan's claims
review procedure and other appropriate information as to the steps to be taken
if the Participant wishes to have the claim reviewed. If the Company
determines that there are special circumstances requiring additional time to
make a decision, the Company shall notify the Participant of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional ninety-day period.
16.2 Review Procedure. If a Participant is determined by the
Company not to be eligible for benefits, or if the Participant believes that
he or she is entitled to greater or different benefits, the Participant shall
have the opportunity to have such claim reviewed by the Company by filing a
petition for review with the Company within sixty (60) days after receipt of
the notice issued by the Company. Said petition shall state the specific
reasons which the Participant believes entitle him or her to benefits or to
greater or different benefits. Within sixty (60) days after receipt by the
Company of the petition, the Company shall afford the Participant (and
counsel, if any) an opportunity to present his or her position to the Company
orally or in writing, and the Participant (or counsel) shall have the right to
review the pertinent documents. The Company shall notify the Participant of
its decision in writing within the sixty-day period, stating specifically the
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basis of its decision, written in a manner calculated to be understood by the
Participant and the specific provisions of the Plan on which the decision is
based. If, because of the need for a hearing, the sixty-day period is not
sufficient, the decision may be deferred for up to another sixty-day period at
the election of the Company, but notice of this deferral shall be given to the
Participant. In the event of the death of the Participant, the same
procedures shall apply to the Participant's beneficiaries.
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