Exhibit 10.27
RYAN'S FAMILY STEAK HOUSES, INC.
DEFERRED COMPENSATION PLAN
RYAN'S FAMILY STEAK HOUSES, INC.
DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
Page
ARTICLE I
TITLE AND DEFINITIONS
1.1
Title . . . . . . . . . . . . . . . . . . . . . . .2
1.2
Definitions . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
PARTICIPATION
2.1
Participation . . . . . . . . . . . . . . . . . . 6
ARTICLE III
DEFERRAL ELECTIONS
3.1
Elections to Defer Compensation . . . . . . . . .7
3.2
Investment Elections . . . . . . . . . . . . . . 9
ARTICLE IV
PARTICIPANT ACCOUNTS
4.1
Deferral Account . . . . . . . . . . . . . . . . . 10
4.2
Company Matching Account . . . . . . . . . . . . 11
ARTICLE V
VESTING
5.1
Deferral Account . . . . . . . . . . . . . . . . . 12
5.2
Company Matching Account . . . . . . . . . . . . . 12
5.3
Forfeiture of Matching Account . . . . . . . . . . 12
ARTICLE VI
DISTRIBUTIONS
6.1
Amount and Time of Distributions . . . . . . . . . . 13
6.2
Form of Distribution . . . . . . . . . . . . . . 13
6.3
Forfeitures . . . . . . . . . . . . . . . . . . . . 14
Payment of Special Term Deferrals . . . . . . . . . .14
ARTICLE VII
HARDSHIPS
7.1
Hardships . . . . . . . . . . . . . . . . . . . . . .15
ARTICLE VIII
ADMINISTRATION
8.1
Committee Action . . . . . . . . . . . . . . . . . . 16
8.2
Powers and Duties of the Committee . . . . . . . . 16
8.3
Construction and Interpretation . . . . . . . . . 17
8.4
Information . . . . . . . . . . . . . . . . . . . 17
8.5
Compensation, Expenses and Indemnity . . . . . . . 17
8.6
Quarterly Statement . . . . . . . . . . . . . . . . 18
8.7
Structure of Committee . . . . . . . . . . . . . . . 18
8.8
Claims for Benefits . . . . . . . . . . . . . . . . . 18
8.9
Arbitration and Arbitration Expenses . . . . . . . . 19
ARTICLE IX
MISCELLANEOUS
9.1
Unsecured General Creditor . . . . . . . . . . . . 20
9.2
Restriction Against Assignment . . . . . . . . . . 20
9.3
Withholding . . . . . . . . . . . . . . . . . . . . 20
9.4
Amendment, Modification, Suspension or Termination . 21
9.5
Governing Law . . . . . . . . . . . . . . . . . . . 21
9.6
Receipt or Release . . . . . . . . . . . . . . . 21
9.7
Payments on Behalf of Minors . . . . . . . . . . . 21
9.8
Headings, etc. Not Part of Agreement . . . . . . . 21
ARTICLE X
BENEFIT OFFSET
10.1 Offset for Certain Benefits Payable Under Split Dollar
Life Insurance Policies . . . . . . . . . . . . 22
RYAN'S FAMILY STEAK HOUSES, INC.
DEFERRED COMPENSATION PLAN
WHEREAS, RYAN'S FAMILY STEAK HOUSES, INC. (the "Company")
desires to establish a deferred compensation plan to provide
supplemental retirement income benefits through deferrals of
salary and bonuses effective as of August 1, 1999; and
WHEREAS, it is believed that the adoption of this plan
providing for deferred compensation at the election of each
executive will be in the best interests of the Company;
NOW, THEREFORE, it is hereby declared as follows:
ARTICLE I
TITLE AND DEFINITIONS
1.1 Title.
This Plan shall be known as the RYAN'S FAMILY STEAK HOUSES,
INC. Deferred Compensation Plan.
1.2 Definitions.
Whenever the following words and phrases are used in this
Plan, with the first letter capitalized, they shall have the
meanings specified below.
"Account" or "Accounts" shall mean a Participant's Deferral
Account and/or Company Matching Account.
"Beneficiary" or "Beneficiaries" shall be the person or
persons, trustee, or other legal entity or entities last
designated by the Participant to receive the benefits specified
hereunder in the event of the Participant's death or, if there is
no such designated beneficiary, the Participant's Beneficiary
shall mean the person or persons who can verify by affidavit or
court order to the satisfaction of the Committee that they are
entitled to receive the benefit specified hereunder pursuant to
the laws of intestate succession or other statutory provision in
effect at the Participant's death in the state in which the
Participant resided.
"Board of Directors" or "Board" shall mean the Board of
Directors of the Company.
"Bonus" shall mean the regular award or awards payable under
the RYAN'S FAMILY STEAK HOUSES, INC. Management Incentive Program
(or any successor program) and any other special bonus or
incentive compensation payable to a Participant.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Committee" shall mean the Compensation Committee of the
Board of Directors.
"Company" shall mean RYAN'S FAMILY STEAK HOUSES, INC., any
successor corporation and each corporation which is a member of a
controlled group of corporations (within the meaning of Section
1563(a) of the Code, determined without regard to Section
1563(a)(4) and (e)(3)(C) thereof and by substituting the phrase
"at least 50 percent: for the phrase "at least 80 percent" each
time it appears in Section 1563(a)(1) of which RYAN'S FAMILY
STEAK HOUSES, INC. is a component member.
"Company Matching Account" shall mean the bookkeeping
account maintained by the Committee for each Participant that is
credited with a certain amount (the "Company Matching Amount"),
determined by the Company in its sole discretion each Plan Year,
for each dollar of Compensation deferred by the Participant. The
Company Matching Amount shall range from zero to $1.00 per $1.00
of a Participant's deferrals up to a maximum of 6% of Total
Compensation; provided, however, that in no event shall the
Company Matching Amount for a Plan Year exceed an amount that
when combined with the matching contributions made by the Company
with respect to a participant's salary deferrals under any plan
subject to Sections 401(k) and/or 401(m) of the Code, exceed the
maximum amount of matching contributions that the Company would
have made on behalf of that Participant for the Plan Year under
such plan, assuming that the Participant made the maximum
permissible salary deferrals under such plan for the Plan Year,
in the absence of the limitations imposed by Sections 401(k) and
401(m) of the Code.
"Compensation" shall mean the Salary and Bonus that the
Participant is entitled to for services rendered to the Company.
"Deferral Account" shall mean the bookkeeping account
maintained by the Committee for each Participant that is credited
with amounts equal to (1) the portion of the Participant's Salary
that he or she elects to defer (2) the portion of the
Participant's Bonus that he or she elects to defer and (3) gains
and losses pursuant to Section 4.1.
"Director" shall mean a member of the Board of Directors.
"Disability" shall mean the inability to render substantial
services to the Company by reason of mental or physical
disability, as determined by the Committee based on competent
medical advice.
"Early Retirement" shall mean a voluntary termination of
employment prior to normal retirement but after the Participant
is 55 years of age and has completed at least 20 Years of
Employment.
"Effective Date" shall mean August 1, 1999.
"Eligible Employee" shall mean each member of the executive
office, regional officers or directors groups who earned at least
the "highly compensated employee" amount within the meaning of
Section 414(q)(1)(B) as indexed, in Total Compensation in the
calendar year preceding the Plan Year for which the determination
is being made and who is designated in writing by the Committee
as eligible.
"Fund" or "Funds" shall mean one of more of the mutual funds
or contracts selected by the Committee pursuant to Section
3.2(b).
"Initial Election Period" for an Eligible Employee shall
mean the later of (1) August 1, 1999 or (2) the 60-day period
ending on December 1 of the calendar year in which the individual
becomes an Eligible Employee.
"Normal Retirement" shall mean a voluntary termination of
employment after the Participant is 65 years of age.
"Participant" shall mean any Eligible Employee who elects to
defer Compensation in accordance with Section 3.1.
"Payment Eligibility Date" shall mean on or about the first
day of the month following the end of the calendar year quarter
in which a Participant terminated employment.
"Plan" shall mean the RYAN'S FAMILY STEAK HOUSES, INC.
Deferred Compensation Plan set forth herein, now in effect, or as
amended from time to time.
"Plan Year" shall mean the 12 consecutive month period
beginning on January 1; provided, however that the first Plan
Year shall be a short year beginning on August 1, 1999 and ending
December 31, 1999.
"Rate of Return" shall mean, for each Fund, an amount equal
to the gross rate of gain or loss on the assets of such Fund for
each business day reduced by all fund level expenses and charges
charged to investors in such Fund.
"Salary" shall mean the Participant's base pay.
"Tax Adjustment Factor" shall mean a number, determined by
the Committee, which is equal to one minus the sum of (1) the
highest marginal federal personal income tax rate then in effect
and (2) the effective highest marginal state income tax rate in
which the Participant resides, net after the effect of the
deduction for such state income tax for federal income tax
purposes.
"Total Compensation" shall mean all cash compensation paid
to a Participant by the Company during a Plan Year.
"Years of Employment" shall mean the number of full calendar
years beginning on the employee's original date of hire in which
a Participant is continuously employed by the Company on a full-
or part-time basis until the last day of such calendar year.
ARTICLE II
PARTICIPATION
2.1 Participation.
An Eligible Employee, after first being designated eligible
by the Committee, shall become a Participant in the Plan by
electing to defer a portion of his or her Salary or Bonus in
accordance with Section 3.1.
ARTICLE III
DEFERRAL ELECTIONS
3.1 Elections to Defer Compensation.
(a) Initial Election Period. Each Eligible Employee may
elect to defer Salary or Bonus by filing with the Committee
an election, on a form provided by the Committee, no later
than the last day of his or her Initial Election Period.
(b) General Rule. Subject to the limitations set forth in
paragraph (c) below, the amount of Compensation which an
Eligible Employee may elect to defer is as follows:
(1) Up to 100% of annual base salary above the Social
Security Taxable Wage Base; and
(2)
Any percentage or dollar amount of Bonus up to 100%.
(c) Minimum Deferrals. As a condition to becoming a
Participant, Eligible Employee must commit to defer an
aggregate amount of Salary or Bonus of at least $5,000 per
Plan Year. In the event that a Participant files a deferral
election which will result in deferral of less that $5,000
for a Plan Year or the Participant files an election to
terminate Salary or Bonus deferrals for such a Plan Year,
then the Participant shall nevertheless be deemed to have
elected to defer Salary or Bonus in an amount equal to
$5,000 for that Plan Year.
(d) Effect of Initial Election. An election to defer
Salary or Bonus during an Initial Election Period shall be
effective with respect to Salary or Bonus that would
otherwise be paid during the first pay period beginning no
earlier that 30 days after the Initial Election Period.
(e) Duration of Salary Deferral Election. Any Salary
deferral election made under paragraph (a) or paragraph (g)
of this Section 3.1 shall remain in effect, notwithstanding
any change in the Participant's Salary, until changed or
terminated in accordance with the terms of this paragraph
(e); provided, however, that such election shall terminate
for any Plan Year for which the Participant is not an
Eligible Employee. Subject to the provisions of paragraph
(c) of this Section 3.1, a Participant may increase,
decrease or terminate his or her Salary deferral election,
effective for Salary earned during pay periods beginning
after any January 1, by filing a new election, in accordance
with the terms of this Section 3.1, with the Committee on or
before the preceding December 1.
(f) Duration of Bonus Deferral Election. Any Bonus
deferral election made under paragraph (a) of this Section
3.1 shall remain in effect, notwithstanding any change in
the Participant's Bonus until changes or terminated in
accordance with the terms of this paragraph (f); provided,
however, that such election shall terminate for any Plan
Year for which the Participant is not an Eligible Employee.
Subject to the provisions of paragraph (c) of this Section
3.1, a Participant may increase, decrease or terminate his
or her Bonus deferral election, effective for Bonus earned
during pay periods beginning after any January 1, by filing
a new election, in accordance with the terms of this Section
3.1, with the Committee on or before the preceding December
1.
(g) Elections other than Elections during the Initial
Election Period. Subject to the limitations of paragraph
(c) above, any Eligible Employee who fails to elect to defer
compensation during his or her Initial Election Period may
subsequently become a Participant, and any Eligible Employee
who has terminated a prior Salary or Bonus deferral election
may elect to again defer Salary or Bonus by filing an
election, on a form provided by the Committee, to defer
Compensation as described in paragraph (b) above. An
election to defer Salary or Bonus must be filed on or before
December 1 and will be effective for Salary or Bonus earned
during pay periods beginning after the following January 1.
(h) Special Designation of Deferral Period.
Notwithstanding and in addition to the preceding, a
Participant may specifically designate an "annual deferral
period" for "specific term deferral." All deferrals made
during an "annual deferral period" will be subject to
"specific term deferral" "Annual deferral period" means
each Plan Year. "Specific term deferral" means a deferral
election made by a Participant that identifies the future
date on which all deferrals (including gains and losses
thereon) made during an annual deferral period will be paid
to the Participant. Company Matching Amounts are not
subject to payout under this Section 3.1(h).
3.2 Investment Elections.
(a) At the time of making the deferral elections described
in Section 3.1, the Participant shall designate, on a form
provided by the Committee, which of the following types of
mutual funds or contracts the Participant's Accounts will be
deemed to be invested in for purposes of determining the
amount of earnings to be credited to those Accounts:
AIM V.I. Value Fund MFS/Sun Life Government
Securities Series
Dreyfus Variable Capital MFS/Sun Life MA Investors
Appreciation Fund Growth Stock Fund
Dreyfus Variable Small Cap MFS/Sun Life Money Market
Portfolio Series
Dreyfus Stock Index Fund MFS/Sun Life Research
Series
Fidelity VIP High-Income MFS/Sun Life Utilities
Portfolio Series
Fidelity VIP II Asset Manager: Neuberger Berman AMT Mid-
Growth Portfolio Cap Growth Fund
Fidelity VIP II Contrafund Sun Capital Advisers Real
Portfolio Estate Fund
MFS/Sun Life Emerging Growth T. Rowe Price New America
Series Growth
MFS/Sun Life Global Growth
Series
In making the designation pursuant to this Section 3.2, the
Participant may specify that all or any 5% multiple of his
Deferral Account or Company Match Account be deemed to be
invested in one or more of the types of mutual funds or contract
listed above. A Participant may change the designation made
under this Section 3.2 by filing an election, on a form provided
by the Committee. Participant may request a change in
designation any business day no more than 12 times per calendar
year and providing a minimum separation of 5 business days
between requests. If a Participant fails to elect a type of fund
under this Section 3.2, he or she shall be deemed to have elected
the MFS/Sun Life Money Market Series.
(b) Although the Participant may designate the type of
mutual funds in paragraph (a) above, the Committee shall
select from time to time, in its sole discretion, a
commercially available fund or contract of each of the types
described in paragraph (a) above to be the Funds. The Rate
of Return of each such commercially available fund or
contract shall be used to determine the amount of earnings
to be credited to Participant's Accounts under Article IV.
ARTICLE IV
PARTICIPANT ACCOUNTS
4.1 Deferral Account.
The Committee shall establish and maintain a Deferral
Account for each Participant under the Plan. Each Participant's
Deferral Account shall be further divided into separate
subaccounts ("mutual fund subaccount"), each of which corresponds
to a mutual fund or contract elected by the Participant in
Section 3.2(a). A Participant's Deferral Account shall be
credited as follows:
(a) As of the last day of each month the Committee shall
credit the mutual fund subaccounts of the Participant's
Deferral Account with an amount equal to Salary deferred by
the Participant during each pay period ending in that month
in accordance with the Participant's election under Section
3.2(a); that is, the portion of the Participant's deferred
Salary that the Participant has elected to be deemed to be
invested in a certain type of mutual fund shall be credited
to the mutual fund subaccount corresponding to that mutual
fund;
(b) As of the last day of the month in which the Bonus or
partial Bonus would have been paid, the Committee shall
credit the mutual fund subaccounts of the Participant's
Deferral Account with an amount equal to the portion of the
Bonus deferred by the Participant's election under Section
3.2(a); that is, the portion of the Participant's deferred
Bonus that the participant has elected to be deemed to be
invested in a particular type of mutual fund shall be
credited to the mutual fund subaccount corresponding to that
mutual fund; and
(c) As of each business day, each mutual fund subaccount of
a Participant's Deferral Account shall be credited with gains and
losses in an amount equal to that determined by multiplying the
balance credited to such mutual fund subaccount as of the
preceding business day by the Rate of Return for the
corresponding Fund selected by the Company pursuant to Section
3.2(b).
4.2 Company Matching Account.
The Committee shall establish and maintain a Company
Matching Account for each Participant under the Plan. Each
Participant's Company Matching Account shall be further divided
into separate mutual fund subaccounts corresponding to the mutual
fund contract elected by the Participant in Section 3.2(a). A
Participant's Company Matching Account shall be credited as
follows:
(a) As of the date on which the Company makes its matching
contribution under the Company's qualified defined
contribution plan for a Plan Year, or as of such earlier
date as the Committee shall determine, the Committee shall
credit the mutual fund subaccounts of the Participant's
Company Matching Account with an amount equal to RYAN'S
FAMILY STEAK HOUSES, INC.'s discretionary Company Matching
Amount for the Plan Year in accordance with the
Participant's election under Section 3.2(a); that is, the
portion of the Company Matching Amount which the Participant
elected to be deemed to be invested in a certain type of
mutual fund shall be credited to the corresponding mutual
fund subaccount.
(b) As of each business day, each mutual fund subaccount of
a Participant's Company Matching Account shall be credited
with gains and losses in an amount equal to that determined
by multiplying the balance credited to such mutual fund
subaccount as of preceding business day the Rate of Return
for the corresponding Fund selected by the Company pursuant
to Section 3.2(b).
ARTICLE V
VESTING
5.1 Deferral Account.
A Participant's Deferral Account shall be 100% vested at all
times.
5.2 Company Matching Account.
A Participant's interest in his or her Company Matching
Account shall vest and become nonforfeitable up to a maximum of
100% in accordance with the following schedule:
Years of
Employment Percentage Vested
less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 100%
A Participant's interest in his or her Company Matching
Account shall become 100% vested if, while an Employee of the
Company, he or she attains age 65, incurs a Disability or dies.
5.3 Forfeiture of Matching Account
Notwithstanding any provision in the Plan to the contrary,
any benefit to be paid to or on behalf of any Participant related
to his or her Company Matching Account (including gains and
losses thereon) shall be forfeited in its entirety if the
Participant commits an act or acts of dishonesty or moral
turpitude (including but not limited to conviction of a felony)
which materially injures or damages the Company.
ARTICLE VI
DISTRIBUTIONS
6.1 Amount and Time of Distributions.
Each Participant (or, in the case of his or her death,
Beneficiary) shall be entitled to receive a distribution of
benefits under this Plan as soon as practicable following his or
her Payment Eligibility Date. The amount payable to the
Participant shall be the vested portions of his or her Deferral
Account and Company Matching Account as of his or her Payment
Eligibility Date.
6.2 Form of Distribution.
The form of the distribution of benefits to a Participant
(or his or her Beneficiary) at Early Retirement or Normal
Retirement shall be a cash lump sum payment, or in equal annual
installments over a term certain of five, ten or fifteen years.
The Participant must select the form of distribution in the year
prior to retirement. The form of the distribution of benefits
to a Participant who terminates prior to Early Retirement or
Normal Retirement shall be a cash lump sum. If benefit is paid
in installments, the amount of the annual installments payable
during each succeeding twelve calendar month period (or such
lesser period, if applicable) shall be adjusted, as of each year-
end allocation date during the period that installment payments
are made, for additions to the Participant's Accounts pursuant
to Article IV by dividing the aggregate of his or her account
balance as of such date (following adjustment as of such date)
by the number of annual installments remaining to be paid
hereunder; provided, that the last annual installment due
hereunder shall be the entire amount credited to the
Participant's Account on the date of payment. If the
Participant dies prior to the complete distribution of benefits,
the Participant's beneficiary will receive a lump sum
distribution of the remaining balance. Notwithstanding the
foregoing, the Committee may, in its sole and absolute
discretion, elect to accelerate and pay any unpaid benefits in a
single lump sum payment on any date following a Participant's
Payment Eligibility Date. In addition and notwithstanding the
foregoing, the Committee shall be required to accelerate and pay
any unpaid benefit in a single lump sum payment on any date
following a Participant's Payment Eligibility Date if any one of
the following financial statement conditions exist at the end of
any calendar quarter:
(a) Debt to Total Capitalization Ratio equals or exceeds
55%; or
(b) Net Worth is less than $225,000,000; or
(c) Fixed Charge Coverage Ratio is less than 2.0.
The foregoing financial statement tests shall be computed
in the same manner as required under the Company's debt
covenants in effect on August 1, 1999.
6.3 Forfeitures.
When a Participant receives a distribution of benefits
under this Plan, the portion of his or her Company Matching
Account which is not vested shall be forfeited, and the Company
shall have no obligation to the Participant with respect to such
forfeited amount.
6.4 Payment of Special Term Deferrals.
Notwithstanding and in addition to the preceding, a
Participant shall be entitled to receive a distribution of
benefits under this Plan as soon as practicable after the
expiration of a specific term deferral, if any, elected under
Section 3.1(h). The amount payable to the Participant shall be
the vested portion of his or her Deferral Account (including
gains and losses) related to such specific term deferral. The
payment of a specific term deferral shall be a cash lump sum
payment within 90 days of the expiration of the specific term
deferral.
ARTICLE VII
HARDSHIPS
7.1 Hardships.
In the event a Participant incurs a "financial hardship" as
a result of an "unforeseeable emergency" (as such terms are
defined in Department of the Treasury Regulations Section 1.457-
2(h)(4) or any successor regulations), the Participant may
request that the Company accelerate payment of the Participant's
benefits under the Plan. Such request shall be filed with the
Committee and provide such information and be in such form as
the Committee shall require. The Committee, in the exercise of
its sole and absolute discretion, shall approve or deny the
request in whole or in part, and shall direct the Company
accordingly. Notwithstanding any provision in the Plan to the
contrary, any payment made pursuant to this Article VII shall
comply with Code Section 457(d)(1)(A)(iii) and the regulations
promulgated thereunder (or any successor provisions). The
amount available for payment to a Participant under this Article
VII shall be limited to balance in the Participant's Account as
of the first day of the month following the end of the calendar
year quarter next preceding the payment of the Hardship Payment.
ARTICLE VIII
ADMINISTRATION
8.1 Committee Action.
The Committee shall act at meetings by affirmative vote of a
majority of the members of the Committee. Any action permitted
to be taken at a meeting may be taken without a meeting if, prior
to such action, a written consent to the action is signed by all
members of the Committee and such written consent is filed with
the minutes of the proceedings of the Committee. A member of the
Committee shall not vote or act upon any matter which related
solely to himself or herself as a Participant. The Chairman or
any other member or members of the Committee designated by the
Chairman may execute any certificate or other written direction
on behalf of the Committee.
8.2 Powers and Duties of the Committee.
(a) The Committee, on behalf of the Participants and their
Beneficiaries, shall enforce the Plan in accordance with its
terms, shall be charged with the general administration of
the Plan, and shall have all powers necessary to accomplish
its purposes, including, but not by way of limitation, the
following:
(1) To determine all questions relating to the eligibility
of employees to participate;
(2) To select the funds or contracts to be the Funds in
accordance with Section 3.2(b) hereof;
(3) To construe and interpret the terms and provisions of
this Plan;
(4) To compute and certify to the amount and kind of
benefits payable to Participants and their Beneficiaries;
(5) To maintain all records that may be necessary for the
administration of the Plan;
(6) To provide for the disclosure of all information and
the filing or provision of all reports and statement to
Participants, beneficiaries or governmental agencies as
shall be required by law;
(7) To make and publish such rules for the regulation of
the Plan and procedures for the administration of the Plan
as are not inconsistent with the terms hereof; and
(8) To appoint a plan administrator or any other agent, and
to delegate to them such powers and duties in connection
with the administration of the plan as the Committee may
from time to time prescribe.
8.3 Construction and Interpretation.
The Committee shall have full discretion to construe and
interpret the terms and provisions of this Plan, which
interpretation or construction shall be final and binding on all
parties, including but not limited to the Company and any
Participant or Beneficiary. The Committee shall administer such
terms and provisions in a uniform and nondiscriminatory manner
and in full accordance with any and all laws applicable to the
Plan.
8.4 Information.
To enable the Committee to perform its functions, the
Company shall supply full and timely information to the Committee
on all matters relating to the Compensation of all Participants,
their death or other cause of termination, and such other
pertinent facts as the Committee may require.
8.5 Compensation, Expenses and Indemnity.
(a) The members of the Committee shall serve without
compensation for their services hereunder.
(b) The Committee is authorized at the expense of the
Company to employ such legal counsel as it may deem
advisable to assist in the performance of its duties
hereunder. Expenses and fees in connection with the
administration of the Plan shall be paid by the Company.
(c) To the extent permitted by applicable state law, the
Company shall indemnify and save harmless the Committee and
each member thereof, the Board of Directors and any delegate
of the Committee who is an employee of the Company against
any and all expenses, liabilities and claims, including
legal fees to defend against such liabilities and claims
arising out of their discharge in good faith or
responsibilities under or incident to the Plan, other than
expenses and liabilities arising out of willful misconduct.
This indemnity shall not preclude such further indemnities
as may be available under insurance purchased by the Company
or provided by the Company under any bylaw, agreement, or
otherwise, as such indemnities are permitted under state
law.
8.6 Quarterly Statement.
Under procedures established by the Committee, a Participant
shall receive a statement with respect to such Participant's
Accounts at least once for each Calendar Quarter.
8.7 Structure of Committee.
The Committee shall be the Compensation Committee of the
Board of Directors as such committee is constituted from time to
time. The members of the Committee shall not receive any special
compensation for serving in the capacity as members of the
Committee but shall be reimbursed for any reasonable expenses
incurred in connection therewith. No bond or other security
shall be required of the Committee or any member thereof in any
jurisdiction. Any member of the Committee, any subcommittee or
agent to whom the Committee delegates any authority, and any
other person or group of persons, may serve in more than one
fiduciary capacity with respect to the Plan.
8.8 Claims for Benefits.
All claims for benefits under the Plan shall be submitted in
writing to the Committee. Within a reasonable period time, the
Committee shall decide the claim by majority vote. Written
notice of the decision on each such claim shall be furnished
within 30 days after receipt of the claim. If the claim is
wholly or partially denied, such written notice shall set forth
an explanation of the specific findings and conclusions on which
such denial is based. A claimant may review all pertinent
documents and may request a review by the Committee of such a
decision denying the claim. Such a request shall be made in
writing and filed with the Committee within 60 days after
delivery to said claimant of written notice of said decision.
Such written request for review shall contain all additional
information which the claimant wishes the Committee to consider.
The Committee may hold any hearing or conduct any independent
investigation which it deems necessary to render its decision,
and the decision on review shall be made as soon as possible
after the Committee's receipt of the request for review. Written
notice of the decision on review shall be furnished to the
claimant within 30 days after receipt by the Committee of a
request for review. Written notice of the decision on review
shall be a final decision and shall include specific reasons for
such decision.
8.9 Arbitration and Arbitration Expenses.
(a) Arbitration. Any claims or disputes pertaining to this
Plan or to any matter arising therefrom not resolved by the
claims procedures set forth in Section 8.8, shall be resolved by
arbitration in the State of South Carolina. The Participant, any
Beneficiary, and the Company will be bound to this mandatory
arbitration rule as the exclusive remedy for all disputes under
this Plan. There must be full compliance with the rules of the
American Arbitration Association in order to resolve any legal
disputes regarding this Plan. The exclusive choice of forum set
forth in this Section 8.9 shall not be deemed to preclude the
enforcement of any judgment obtained in such forum or the taking
of any action under this Plan to enforce such judgment in any
appropriate jurisdiction.
(b) Payment of Expenses. All costs and expenses (exclusive
of attorney's fees) incurred in connection with any arbitration
relating to a claim or dispute pertaining to this Plan shall be
paid by the Company. The Company shall bear the cost of all
attorneys' fees incurred by the Company. The attorneys' fees
incurred by the Participant or Beneficiary shall be paid by the
party to whom the arbitrator determines should bear the
attorneys' fees incurred by the Participant or Beneficiary in
pursuing the claim. In allocating the attorneys' fees under this
Section 8.9, the arbitrator should consider the relative merits
of each party's position and the manner and means the party
undertook to assert the party's case.
ARTICLE IX
MISCELLANEOUS
9.1 Unsecured General Creditor.
Participants and their Beneficiaries, heirs, successors, and
assigns shall have no legal or equitable rights, claims, or
interest in any specific property or assets of the Company. Any
and all of the Company's assets shall be, and remain, the general
unpledged, unrestricted assets of the Company. The Company's
obligation under the Plan shall be merely that of an unfunded and
unsecured promise of the Company to pay money in the future, and
the rights of the Participants and Beneficiaries shall be no
greater than those of unsecured general creditors.
9.2 Restriction Against Assignment.
The Company shall pay all amounts payable hereunder only to
the person or persons designated by the Plan and not to any other
person or corporation. No part of a Participant's Accounts shall
be liable for the debts, contracts, or engagements of any
Participant, his or her Beneficiary, or successors in interest,
nor shall a Participant's Accounts be subject to execution by
levy, attachment or garnishment or by any other legal or
equitable proceeding, nor shall any such person have any right to
alienate, anticipate, commute, pledge, encumber, or assign any
benefits or payments hereunder in any manner whatsoever. If any
Participant, Beneficiary or successor in interest is adjudicated
bankrupt or purports to anticipate, alienate, sell, transfer,
assign, pledge, encumber or charge any distribution or payment
from the Plan, voluntarily or involuntarily, the Committee, in
its discretion, may cancel such distribution or payment (or any
part thereof) to or for the benefit of such Participant,
Beneficiary or successor in interest in such manner as the
Committee shall direct.
9.3 Withholding.
There shall be deducted from each payment made under the
Plan all taxes which are required to be withheld by the Company
in respect to such payment. The Company shall have the right to
reduce any payment by the amount of cash sufficient to provide
the amount of said taxes.
9.4 Amendment, Modification, Suspension or Termination.
The Company may amend, modify, suspend or terminate the Plan
in whole or in part, except that no amendment, modification,
suspension or termination shall reduce any amounts then allocated
previously to a Participant's Accounts, or to be credited in the
future based on amounts then allocated to a Participant.
9.5 Governing Law.
This Plan shall be construed, governed and administered in
accordance with the laws of the State of South Carolina.
9.6 Receipt or Release.
Any payment to a Participant or the Participant's
Beneficiary in accordance with the provisions of the Plan shall,
to the extent thereof, be in full satisfaction of all claims
against the Committee and the Company. The Committee may require
such Participant or Beneficiary, as a condition precedent to such
payment, to execute a receipt and release to such effect.
9.7 Payments on Behalf of Minors.
In the event that any amount becomes payable under the Plan
to a minor or a person who, in the sole judgment of the
Committee, is considered by reason of physical or mental
condition to be unable to give a valid receipt therefore, the
Committee may direct that such payment be made to any person
found by the Committee, in its sole judgment, to have assumed the
care of such minor or other person. Any payment made pursuant to
such determination shall constitute a full release and discharge
of the Committee and the Company.
9.8 Headings, etc. Not Part of Agreement.
Headings and subheadings in this Plan are inserted for
convenience of reference only and are not to be considered in the
construction of the provisions hereof.
ARTICLE X
BENEFIT OFFSET
10.1 Offset for Certain Benefits Payable Under Split-Dollar
Life Insurance Policies.
(a) Notwithstanding anything contained herein to the
contrary, any benefits payable under this Plan shall be offset by
the value of benefits received by the Participants under certain
life insurance policies as set forth in this Section.
Participants in this Plan may own life insurance policies (the
"Policies") purchased on their behalf by the Company. The
exercise of ownership rights under these Policies by each
Participant is, however, subject to certain conditions (set forth
in a "Split-Dollar Life Insurance Agreement" between each
Participant and the Company, pursuant to which the Company holds
a security interest on the Policy) and, if the Participant fails
to meet the conditions set forth in the Split-Dollar Life
Insurance Agreement, the Company may exercise its security
interest in the Policy and cause the Participant to lose certain
benefits under the Policy. In the event that a Participant
satisfies the conditions specified in Section 4 or 5 of the Split-
Dollar Life Insurance Agreement, or the Company's security
interest in the Policy is otherwise released, so that the
Participant or his or her beneficiary under the Policy becomes
entitled to exercise rights free from the Company's security
interest under one of those sections, the value of those benefits
shall constitute an offset to any benefits otherwise payable
under this Plan. As the case may be, this offset (the "Offset
Value") shall be equal to the value of benefits payable under the
Split-Dollar Life Insurance Agreement, that is, the cash
surrender value of the Policy. The Offset Value shall then be
compared to the Participant's Accounts, and the amounts credited
to the Accounts shall be reduced, but not to less than zero, by
the Offset Value. This offset shall first be applied to the
Participant's Deferral Account and then to the Participant's
Company Matching Account.
(b) If the Policy in subsection (a) is not on the life of
the Participant and the insured dies prior to distribution
of benefits under this Plan, then the value of the benefits
received by the Participant under the Policy will offset the
Participant's Accounts under this Plan. This offset
("Offset Value") shall be equal to the amount of death
benefit payable to the Participant divided by the Tax
Adjustment Factor. This Offset Value shall then be compared
to the Participant's Accounts, and the amounts credited to
the Accounts shall be reduced, but not to be less than zero,
by the Offset Value. This offset shall first be applied to
the Participant's Deferral Accounts and then to the
Participant's Company Matching Account.
IN WITNESS WHEREOF, the Company has caused this document to
be executed by its duly authorized officers on this
___________ day of ________________, 1999.
RYAN'S FAMILY STEAK HOUSES, INC.
By_________________________
Title:_____________________
By_________________________
Title:_____________________