NONQUALIFIED DEFERRED COMPENSATION PLAN
SECTION 1
Definitions
1.1. Affiliate. "Affiliate" means any corporation. partnership, joint
venture, association or similar organization or entity that is required to be
aggregated with the Company pursuant to Code Sections 414(b), (c), or (m).
1.2. Code. "Code" means the Internal Revenue Code of 1986, as amended
from time to time. Any reference to a section of the Code includes any
comparable section or sections of any future legislation that amends,
supplements or supersedes that section.
1.3. Company. "Company" means ERO, Inc. located at 585 Slawin Court, Mount
Prospect, Illinois, employer tax identification number 36-3573286, which
Company has established the Plan. as set forth herein.
1.4. Compensation. "Compensation" means (select one option):
Option 1. Total taxable salarv, bonuses and commissions paid
to a Participant by the Employer (determined without
regard to any amounts in the Participant's Deferred
Compensation Account).
Option 2. x Total taxable salary and commissions of the
Participant paid or accrued by the Employer, but
not including the value of any bonuses, stock
options, stock appreciation rights (determined
without regard to any amounts in the Participant's
Deferred Compensation Account). and car allowances.
Option 3. Other
1.5. Deferred Compensation Account. "Deferred Compensation Account" means the
bookkeeping account maintained under the Plan in the Participant's name
to reflect amounts deferred under the Plan pursuant to Section 3 (as
adjusted under Section 4) and (if elected by the Company) any Emplover
Discretionarv Contributions made on behalf of the Participant (as
adjusted under Section 4).
1.6. Deferral Election. "Deferral Election" means a written notice filed by
the Participant with the Employer specifying the Compensation or bonus to be
deferred by the Participant.
1.7. Distribution Date. "Distribution Date" means the date a Participant
terminates employment or association with the Employers for whatever reason,
unless such termination of employment is for Good Cause.
1.8. Early Retirement Date. "Early Retirement Date" means (select one
option):
__ The date the Participant attains ____ years of age.
__ The date the Participant attains ____ years of age and has
been employed by the Company or its Affiliates for at least
____ years.
1.9. Effective Date. "Effective Date" means January 1. 1997
1.10. Employee. "Employee" means an employee of an Employer who meets
the eligibility criteria set forth in Subsection 3.1 of the Plan and who is
a member of a select group of management or highly compensated employees as
defined under ERISA or the regulations thereunder.
1.11. Employer. "Employer" means, individually, the Company and each
Affiliate of the Company that adopts the Plan in accordance with Subsection
7. 1. The Company and any Affiliates that adopt the Plan are sometimes
collectively referred to herein as the "Employers".
1.12. ERISA. "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time. Any reference to a section of ERISA
includes any comparable section or sections of any future legislation that
amends, supplements or supersedes that section.
1.13. Excess Contributions. "Excess Contributions" means contributions
determined to be excess contributions or excess deferrals (as such terms are
defined in the regulations under Section 401(k) of the Code) for the Plan Year
under a plan maintained by an Employer that is qualified under Sections 401(a)
and 401(k) of the Code.
1.14. Independent Contractor. "Independent Contractor" means an individual
who is not a common-law employee of an Employer but who receives payments
from the Employer for services rendered.
1.15. Normal Retirement Date. "Normal Retirement Date" means (select one
option):
x The date the Participant attains 65 years of age.
The date the Participant attains ____years of age and has
been employed by the Company or its Affiliates for at least
____ years.
1.16. Participant. "Participant" means an Employee or Independent
Contractor who meets the eligibility criteria set forth in Subsection 3.1 and
who has made a Deferral Election in accordance with the terms of the Plan.
1.17. Plan. "Plan" means the provisions of the Plan. as set forth
herein, including the variable provisions selected and agreed to by the
Company.
1.18. Plan Administrator - The "Plan Administrator" means (select one
option):
x The Companv.
A committee of at least ____ members appointed by the Companv.
The ___________________ (insert title) of the Companv.
Other
1.19. Plan Year. "Plan Year" means the calendar year. However, if
the Effective Date of the Plan is other than January 1 of a year, the
initial Plan Year shall be a short Plan Year, beginning on the Effective
Date and ending on the following December 31.
1.20. Unforeseeable Financial Emergency. "Unforeseeable Financial
Emergency" means a severe financial hardship of the Participant resulting
from:
(a) A sudden and unexpected illness or accident of the
Participant or of a dependent of the Participant;
(b) Loss of the Participant's principal residence due to
casualty; or
(c) Such other similar extraordinary and unforeseeable
circumstances resulting from events bevond the control of the
Participant.
Whether a Participant has an Unforeseeable Financial Emergency shall be
determined in the sole discretion of the Plan Administrator.
1.21. Valuation Date. "Valuation Date" means (select one option):
x Any business day.
The last dav of any calendar month.
The last dav of any calendar quarter.
The last dav of the Plan Year.
Other
1.22. Other Definitions. In addition to the terms defined in this
Section 1, other terms are defined when first used in later
Sections of this Plan.
SECTION 2
Purpose and Administration
2.1. Purpose. The Company has established the Plan primarily for the
purpose of providing deferred compensation to a select group of management
or highly compensated employees of the Employers. The Plan is intended to be
a top-hat plan described in Section 201(2) of ERISA. If elected by the
Company under Subsection 3.1 of the Plan, Independent Contractors also mav
participate in the Plan. The Company intends that the Plan (and each Trust
under the Plan (as described in Subsection 6.1)) shall be treated as unfunded
for tax purposes and for purposes of Title I of ERISA. An Employer's
obligations hereunder, if any, to a Participant (or to a Participant's
beneficiary) shall be unsecured and shall be a mere promise bv the Employer
to make payments hereunder in the future. A Participant (or the Participant's
beneficiary) shall be treated as a general unsecured creditor of the Employer.
2.2. Administration. The Plan shall be administered by the Plan
Administrator. The Plan Administrator shall serve at the pleasure of the
Company's Board of Directors and may be removed by such Board, with or
without cause. The Plan Administrator may resign upon prior written notice
to the Company's Board of Directors.
The Plan Administrator shall have the powers, rights, and duties set forth
in the Plan and shall have the power, in the Plan Administrator's sole and
absolute discretion, to determine all questions arising under the Plan,
including the determination of the rights of all persons with respect to the
Plan and to interpret the provisions of the Plan and remedy any ambiguities,
inconsistencies, or omissions. Any decisions of the Plan Administrator
shall be final and binding on all persons with respect to the Plan and the
benefits provided under the Plan. The Plan Administrator may delegate the
Plan Administrator's authority under the Plan to one or more officers or
directors of the Company; provided, however, that (a) such delegation must
be in writing, and (b) the officers or directors of the Company to whom
the Plan Administrator is delegating authority must accept such delegation
in writing.
If a Participant is serving as the Plan Administrator (either individually or
as a member of a committee), the Participant mav not decide or determine any
matter or question concerning such Participant's benefits under the Plan that
the Participant would not have the right to decide or determine if the
Participant were not serving as the Plan Administrator.
SECTION 3
Eligibility, Participation, Deferral Elections,
and Employer Contribution
3.1 Eligibilitv and Participation. Subject to the conditions and
limitations of the Plan, the following persons are eligible to participate in
the Plan (select and complete option(s)):
All Emplovees with a rank of ____________ (insert title) or
above and with total earnings of at least __________ per Plan
Year.
X The following Empiovees of the Employers:
See attached list. No Emplovee whose name is stated on this
list may participate in the Plan for a Plan Year unless he
elects to contribute the maximum allowable salarv reduction
amount to the ERO Industries, Inc. Retirement Income Plan during
such Plan Year. This limitation shall not applv during the
first year of an individual's emplovment, if he is ineligible to
contribute to the ERO Industries, Inc. Retirement Income Plan
for that entire year.
The following Independent Contractors:
(Attach a separate sheet if necessary)
Any individuals specified above by an Employer may be changed bv action of
the Employer. An Employee or Independent Contractor shall become a Participant
in the Plan upon the execution and filing with the Plan Administrator of a
written election to defer a portion of the Employee's or Independent
Contractor's Compensation. A Participant shall remain a Participant until
the entire balance of the Participant's Deferred Compensation Account has
been distributed.
3.2. Rules for Deferral Elections. Any person identified in Subsection
3.1 may make a Deferral Election to defer receipt of Compensation he or she
otherwise would be entitled to receive for a Plan Year in accordance with the
rules set forth below:
(a) All Deferral Elections must be made in writing on the form
prescribed by the Plan Administrator and will be effective
only when filed with the Plan Administrator no later than the
date specified by the Plan Administrator. In no event may a
Deferral Election be made later than the last day of the Plan
Year preceding the Plan Year in which the amount being deferred
would otherwise be made available to the Participant. However,
in the case of a Participant's initial year of employment or
association with an Employer, the Participant may make a
Deferral Election with respect to compensation for services
to be performed subsequent to such Deferral Election, provided
such election is made no later than 30 davs after the date the
Participant first becomes eligible for the Plan. Furthermore,
in the case of a short initial Plan Year, each Participant mav
make a Deferral Election with respect to compensation for
services to be performed subsequent to such Deferral Election,
provided such election is made no later than 30 davs after the
Effective Date.
(b) With respect to Plan Years following the Participant's initial
Plan Year of participation in the Plan, failure to complete a
subsequent Deferral Election shall constitute a waiver of the
Participant's right to elect a different amount of Compensation
to be deferred for each such Plan Year and shall be considered
an affirmation and ratification to continue the Participant's
existing Deferral Election. However, a Participant may,
prior to the beginning of any Plan Year, elect to increase or
decrease the amount of Compensation to be deferred for the next
following Plan Year by filing, another Deferral Election with
the Plan Administrator in accordance with paragraph (a) above.
(c) A Deferral Election in effect for a Plan Year may not be
modified during the Plan Year, except that a Participant may
terminate the Participant's Deferral Election during a Plan
Year in the event of an Unforeseeable Financial Emergency.
3.3 Amounts Deferred. (select one option):
Option 1. x Deferral of a Percentage of Compensation plus Bonus.
Commencing on the Effective Date. a Participant mav elect to defer (a)
up to 20% of the Participant's Base Salary for a Plan Year, but not
less than 6% reduced by the percentage of salary reduction contributions
directed bv the Participant for that Plan Year to the ERO Industries,
Inc. Retirement Income Plan, and (b) up to 0% of the Participant's
bonus for a Plan Year. The amount of Compensation and bonus deferred
by a Participant shall be credited to the Participant's Deferred
Compensation
Account as of the Valuation Date coincident with or immediately
following the date such Compensation and bonus would, but for the
Participant's Deferral Election, be payable to the Participant.
Option 2. Deferral of Bonus Only.
Commencing on the Effective Date, a Participant mav elect to defer up
to ___ % of any bonus awarded to the Participant during a Plan Year.
The amount of bonus deferred by a Participant shall be credited to the
Participant's Deferred Compensation Account as of the Valuation Date
coincident with or immecliateiv following such the date such bonus
would, but for the Participant's Deferral Election, be pavable to
the Participant.
Option 3. Deferral of Excess Contributions.
Commencing on the Effective Date, a Participant may elect to defer an
amount equal to the Excess Contributions payable to the Participant
during a Plan Year. Such amount shall be credited to the Participant's
Deferred Compensation Account as of the Valuation Date coincident with
or immediately following the date such amount would, but for the
Participant's Deferral Election, be pavable to the Participant.
3.4 Employer Discretionary Contributions. If selected by the Company
below, an Employer may, in its sole discretion, credit to the Deferred
Compensation Account of any Participant employed by that Employer an amount
determined by the Employer in its sole discretion (an "Employer Discretionary
Contribution") for a Plan Year. Any Employer Discretionary Contribution for
a Plan Year will be credited to a Participant's Deferred Compensation Account
as of the Valuation Date specified by the Employer.
(select one of tbefollowing options)
No Employer Discretionary Contributions will be made
under the Plan.
x Employer Discretionarv Contributions shall be made under
the Plan for each Plan Year for each Participant in the
percentage equal to 3% of such Participant's base compensation
reduced bv the percentage of total compensation which the
Emplover contributes on behalf of the Participant for that year
to the ERO Industries, Inc., Retirement Income Plan. For
example, if the Emplover for a Plan Year contributes 2.25% of
total compensation on behalf of a Participant to the ERO
Industries, Inc. Retirement Income Plan, then the Employer
shall contribute .75% of the Participant's base compensation
for that Plan Year to the Plan.
SECTION 4
Deferred Compensation Accounts
4.1. Deferred Compensation Accounts. All amounts deferred pursuant to one
or more Deferral Elections under the Plan and any Employer Discretionarv
Contributions shall be credited to a Participant's Deferred Compensation
Account and shall be adjusted under Subsection 4.2.
4.2. Deferral Account Adiustments and Investment Options. As of each
Valuation Date, the Plan Administrator shall adjust amounts in a Participant's
Deferred Compensation Account to reflect earnings (or losses) in the Investment
Options (as defined in Subsection 4.4) attributable to the Participant's
Deferred Compensation Account. Earnings (or losses) on amounts in a
Participant's Deferred Compensation Account shall accrue commencing on the
date the Deferred Compensation Account first has a positive balance and shall
continue to accrue until the entire balance in the Participant's Deferred
Compensation Account has been distributed. Earnings (or losses) shall be
credited to a Participant's Deferred Compensation Account based on the realized
rate of return (net of any expenses and taxes paid from the Trust)on the
Investment Options attributable to the Participant's Deferred Compensation
Account.
4.3. Vesting. A Participant shall be fully vested in the amounts in the
Participant's Deferred Compensation Account attributable to the Participant's
Deferral Elections. If Employer Discretionary Contributions are made under
the Plan, a Participant shall be vested in the amount in the Participant's
Deferred Compensation Account attributable to Employer Discretionarv
Contributions in accordance with the following (select Options 1., 2., or 3.
and,if desired, Option 4. and/or Option 5.):
Option 1. Five Year Vesting Schedule
Vesting for Participants will be determined by (select one):
Years of Service with the Employer.
Years of Participation in this Plan.
Nonforfeitable Percentage
Less than 5 years....................................... 0%
5 or more years ...................................... 100%
Option 2. Seven Year Graded Vesting Schedule
Vesting for Participants will be determined by (select one):
Years of Service with the Employer.
Years of Participation in this Plan.
Nonforfeitable Percentaee
Less than 3 years ...................................... 0%
3 years 2O%
4 years 4O%
5 years 60%
6 years 8O%
7 years 100 %
Option 3. Other vesting schedule as described below:
100% Immediate Vesting
Option 4. Notwithstanding the foregoing vesting schedule, the
balance in a Participant's Deferred Compensation Account
attributable to Employer Discretionary Contributions will
be forfeited if the Paricipant's employment or association
with the Employer is terminated for Good Cause, before a
Change of Control occurs.
Option 5. x Notwithstanding the foregoing vesting schedule, the entire
balance in a Participant's Deferred Compensation Account
attributable to Employer Discretionary Contributions will
be fully vested upon the Participant's Early Retirement
Date.
For the purpose of determining a Participant's vested benefit with respect to
Employer Discretionary Contributions, a "Year of Service" means each twelve
month period of employment or association with the Company and the Affiliates,
and a "Year of Participation" means each twelve-month period of active
participation in the Plan. Notwithstanding the foregoing, a Participant
shall be fully vested in the entire balance in the Participant's Deferred
Compensation Account upon the ParEicipant's Normal Retirement Date, death or
becoming disabled (as provided in Subsection 5.2 below), provided the date on
which the Participant dies or becomes disabled occurs while the Participant
is actively employed by or associated with the Emplovers. The portion of a
Participant's Deferred Compensation Account in which the Participant is not
fullv vested shall be forfeited to the Employer by the Participant.
If elected by the Companv under Option 4. above, notwithstanding the vesting
schedule selected in Option 1., 2., or 3. above, the balance in a Participant's
Deferred Compensation Account attributable to Employer Discretionary
Contributions will be forfeited (and neither the Participant nor the
Participant's beneficiaries will have any rights thereto)if the Participant's
employment with the Employer is terminated for Good Cause. "Good Cause"
means the Participant's gross negligence, fraud, dishonesty, or willful
violation of any law or significant policy of the Employer that is committed
in connection with the Participant's employment by or association with the
Employer. Whether a Participant has been terminated for Good Cause shall be
determined by the Plan Administrator.
4.4. Investment Options. The Trust (as described in Subsection 6. 1) shall
contain such investment funds ("Investment Options") as may be determined
under the terms of the Trust. The trustee of the Trust (the "Trustee") may,
at its sole discretion, comply with a Participant's directions with respect
to investment of assets of the Trust that are equal to the value of the
Participant's Deferred Compensation Account. Such directions must be
made to the Trustee at least 30 days prior to the effective date of such
direction. Transfers between Investment Options shall be administered in
accordance with the following: (select one option):
Option 1. The Trustee, in its discretion, may take investment
instructions from a Participant for semi-annual
transfers between Investment Options for those assets
of the Trust equal to the value of the Participant's
Deferred Compensation Account.
Option 2. x The Trustee, in its discretion, may take investment
instructions from a Participant for quarterly transfers
between Investment Options for those assets of the Trust
equal to the value of the Participant's Deferred
Compensation Account.
Option 3. The Trustee, in its discretion, may take instructions
from a Participant for transfers up to times per year
between Investment Options for those assets of the Trust
equal to the value of the Participant's Deferred
Compensation Account.
Option 4. The Trustee, in its discretion, may take investment
instructions from a Participant for transfers as of
any business day between Investment Options for those
assets of the Trust equal to the value of the
Participant's Deferred Compensation Account.
SECTION 5
Payment of Benefits
5.1. Time and Method of Pavment. Payment of the vested portion of a
Participant's Deferred Compensation Account shall be made as soon as
practicable following the Valuation Date coincident with or next following
the Participant's Distribution Date; provided, however, that if the Company
has elected a daily Valuation Date, such payment will be made as soon as
practicable following the last business day of the month in which the
Participant's Distribution Date occurs. Payment of the vested portion of a
Participant's Deferred Compensation Account shall be made as follows (select
one option):
Option 1. x A single, lump sum pavment.
Option 2. Substantially equal monthly installment payments for
months.
Option 3. Substantially equal monthly installment payments for
months with a one-time option to receive a lump sum
payment. The Participant may elect to receive a
single, lump sum payment in lieu of instalhnent
payments. Such election must be made by filig a
written election with the Plan Administrator at least
30 days prior to the time installment payments would
otherwise begin, and such election is subject to
approval by the Employer of the Participant.
5.2. Payment Upon Disabilitv. In the event a Participant becomes disabled
(as defined below) while the Participant is employed by or associated with
an Employer, payment of the Participant's Deferred Compensation Account shall
be made (or shall commence) as soon as practicable after the Valuation Date
coincident with or next following the date on which the Plan Administrator
determines that the Participant is disabled. For purposes of this Subsection
5.2, a Participant shall be considered disabled if the Participant is unable
to engage in any substantially gainful activity by reason of any medically
determined physical or mental impairment that can be expected to result in
death or that has lasted or can be expected to last for a continuous period
of not less than twelve months. Whether a Participant is disabled for purposes
of the Plan shall be determined by the Plan Administrator, and in making such
determination, the Plan Administrator may rely on the opinion of a physician
(or physicians) selected by the Plan Administrator for such purpose.
5.3. Payment Upon Death of a Participant. A Participant's Deferred
Compensation Account shall be paid to the Participant's beneficiary
(designated in accordance with Subsection 5.4) in a single lump sum as soon
as practicable following the Valuation Date coincident with or next following
the Participant's death.
5.4. Beneficiary. If a Participant is married on the date of the
Participant's death, the Participant's beneficiary shall be the Participant's
spouse, unless the Participant names a beneficiary or beneficiaries (other
than the Participant's spouse) to receive the balance of the Participant's
Deferred Compensation Account in the event of the Participant's death prior
to the payment of the Participant's entire Deferred Compensation Account.
To be effective, any beneficiary designation must be filed in writing with
the Plan Administrator in accordance with rules and procedures adopted by
the Plan Administrator for that purpose. A Participant may revoke an existing
beneficiary designation by filing another written beneficiary designation with
the Plan Administrator. The latest beneficiary designation received bv the
Plan Administrator shall be controlling. If no beneficiary is named bv a
Participant, or if the Participant survives all of the Participant's named
beneficiaries and does not designate another beneficiary, the Participant's
Deferred Compensation Account shall be paid in the following order of
precedence:
(a) The Participant's spouse:
(b) The Participant's children (including adopted children)
per stripes; or
(c) The Participant's estate.
5.5. Unforeseeable Financial Emergency. If the Plan Administrator
determines that a Participant has incurred an Unforeseeable Financial
Emergency, the Participant may receive in cash the portion of the balance
of the Participant's Deferred Compensation Account needed to satisfy the
Unforeseeable Financial Emergency, but only if the Unforeseeable Financial
Emergency may not be relieved (a) through reimbursement or compensation
by insurance or otherwise or (b) by liquidation of the Participant's assets
to the extent the liquidation of such assets would not itself cause severe
financial hardship. A payment on account of an Unforeseeable Financial
Emergencv shall not be in excess of the amount needed to relieve such
Unforeseeable Financial Emergencv and shall be made as soon as
practicable following the date on which the Plan Administrator approves
such payment.
5.6. Withholding of Taxes. In connection with the Plan, the Employers
shall withhold any applicable Federal, state or local income tax and any
employment taxes, including Social Securitv taxes, at such time and in such
amounts as is necessary to comply with applicable laws and regulations.
SECTION 6
Miscellaneous
6.1. Funding. Each Employer under the Plan shall establish and maintain one
or more grantor trusts (individually, a "Trust") to hold assets to be used
for payment of benefits under the Plan. A Trust shall confonn with the terms
of Internal Revenue Service Revenue Procedure 92-64 (or any subsequent
administrative ruling). The assets of the Trust with respect to benefits
payable to the Participants employed by or associated with an Employer
shall remain the assets of such Employer subject to the claims of its
general creditors. Any payments by a Trust of benefits provided to a
Participant under the Plan shall be considered payment by the applicable
Employer and shall discharge such Employer from any further liability under
the Plan for such payments.
6.2. Rights. Establishment of the Plan shall not be construed to give any
Employee or Independent Contractor the right to be retained by the Employers
or to any benefits not specifically provided by the Plan.
6.3. Interests Not Transferable. Except as to withholding of any tax under
the laws of the United States or any state or locality and the provisions of
Subsection 5.4, no benefit payable at any time under the Plan shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
or any other encumbrance of any kind or to any attachment, garnishment, or other
legal process of any kind. Any attempt by a person (including a Participant
or a Participant's beneficiary) to anticipate, alienate, sell, transfer,
assign, pledge, or otherwise encumber any benefits under the Plan, whether
currently or thereafter payable, shall be void. If any person shall attempt
to, or shall alienate, sell, transfer, assign, pledge or otherwise encumber
such person's benefits under the Plan, or if by any reason of such person's
bankruptcy or other event happening at any time, such benefits would
devolve upon any other person or would not be enjoyed by the person entitled
thereto under the Plan, then the Plan Administrator, in the Plan
Administrator's sole discretion, may terminate the interest in any such
benefits of the person otherwise entitled thereto under the Plan and may hold
or apply such benefits in such manner as the Plan Administrator may deem
proper.
6.4. Forfeitures and Unclaimed Amounts. Unclaimed amounts shall consist of
the amounts in the Deferred Compensation Account of a Participant that cannot
be distributed because of the Plan Administrator's inability, after a
reasonable search, to locate a Participant or the Participant's beneficiary,
as applicable, within a period of two years after the Distribution Date upon
which the payment of benefits became due. Unclaimed amounts shall be forfeited
at the end of such two-year period. These forfeitures will reduce the
obligations of the Employers, if any, under the Plan. After an unclaimed
amount has been forfeited, the Participant or beneficiary, as applicable,
shall have no further right to amounts in the Participant's Deferred
Compensation Account.
6.5. Controlling Law. The law of the state of incorporation of the Company
shall be controlling in all matters relating to the Plan to the extent not
preempted by Federal law.
6.6. Number. Words in the plural shall include the singular, and the
singular shall include the plural.
6.7. Action bv the Employers. Except as otherwise specifically provided
herein, any action required of or permitted to be taken bv an Emplover under
the Plan shall be by resolution of its Board of Directors or by resolution
of a duly authorized committee of its Board of Directors or by action of
a person or persons authorized by resolution of such Board of Directors or
such committee.
6.8. Offset for Obligations to Employer. If, at such time as a Participant
or a Participant's beneficiary becomes entitled to benefit payments hereunder,
the Participant has any debt, obligation or other liability representing an
amount owing to an Employer or an Affiliate of the Employer, and if such debt,
obligation, or other liability is due and owing at the time benefit payments
are payable hereunder, the Employer may offset the amount owing it or an
Affiliate against the amount of benefits otherwise distributable hereunder.
6.9. No Fiduciary Relationship. Nothing contained in this Plan, and no
action taken pursuant to its provisions by either the Employers or the
Participants shall create, or be construed to create a fiduciary relationship
between the Employer and the Participant, a designated beneficiary, other
beneficiaries of the Participant, or any other person.
6. 10. Claims Procedures. Any person (hereinafter referred to as a
"Claimant") who believes that he or she is being denied a benefit to which
he or she may be entitled under the Plan may file a written request for
such benefit with the Plan Administrator. Such written request must
set forth the Claimant's claim and must be addressed to the Plan Administrator,
at the Company's principal place of business. Upon receipt of a claim, the Plan
Administrator shall advise the Claimant that a reply will be forthcoming
within ninety days and shall deliver a reply within ninety days. The Plan
Administrator may, however, extend the reply period for an additional ninety
days for reasonable cause. If the claim is denied in whole or in part, the
Plan Administrator shall issue a written determination, using language
calculated to be understood by the Claimant, setting forth:
(a) The specific reason or reasons for such denial;
(b) The specific reference to pertinent provisions of the Plan
upon which such denial is based:
(c) A description of any additional material or information
necessary for the Claimant to perfect the Claimant's claim
and an explanation why such material or such information is
necessary; and
(d) Appropriate information as to the steps to be taken if the
Claimant wishes to submit the claim for review, and the time
limits for requesting such a review.
Within sixty days after the receipt by the Claimant of the written
determination described above, the Claimant may request in writing, that
the Plan Administrator review the Plan Administrator's determination. The
request must be addressed to the Plan Administrator, at the Company's
principal place of business. The Claimant or the Claimant's duly authorized
representative may, but need not, review the pertinent documents and submit
issues and comments in writing for consideration by the Plan Administrator.
If the Claimant does not request a review of the Plan Administrator's
determination within such sixty day period, the Claimant shall be barred
and estopped from challenging the Plan Administrator's deterinination.
Within sixty days after the Plan Administrator's receipt of a request for
review, the Plan Administrator will review the determination. After
considering all materials presented by the Claimant, the Plan Administrator
will render a written determination, written in a manner calculated to be
understood by the Claimant setting forth the specific reasons for the
decision and containing specific references to the pertinent provisions of
the Plan on which the decision is based. If special circumstances require
that the sixty day time period be extended, the Plan Administrator will so
notify the Claimant and will render the decision as soon as practicable,
but no later than one hundred twenty days after receipt of the request
for review.
6.11. Notice. Any notice required or permitted to be given under the
provisions of the Plan shall be in writing, and shall be signed by the
party giving or making the same. If such notice, consent or demand is
mailed to a party hereto, it shall be sent by United States certified
mail, postage prepaid. addressed to such pariy's last known address as
shown on the records of the Employers. Notices to the Plan Administrator
should be sent in care of the Company at the Company's principal place
of business. The date of such mailing shall be deemed the date of notice.
Either party may change the address to which notice is to be sent by giving
notice of the change of address in the manner set forth above.
SECTION 7
Employer Participation
7.1. Adoption of Plan. Any Affiliate of the Companv may, with the approval
of the Company, adopt the Plan by filing with the Company a resolution of its
Board of Directors to that effect.
7.2. Withdrawal from the Plan by Emplover. Any Emplover shall have the
right, at any time, upon the approval of, and under such conditions as mav
be provided by the Plan Administrator, to withdraw from the Plan by delivering
to the Plan Administrator written notice of its election so to withdraw. Upon
receipt of such notice by the Plan Administrator, the portion of the Deferred
Compensation Account of Participants and beneficiaries attributable to amounts
deferred while the Participants were employed by or associated with such
withdrawing Employer shall be distributed from the Trust at the direction of
the Plan Administrator in cash at such time or times as the Plan Administrator
in the Plan Administrator's sole discretion, may deem to be in the best
interest of such Participants and their beneficiaries. To the extent the
amounts held in the Trust for the benefit of such Participants and
beneficiaries are not sufficient to satisfy the Employer's obligation to
such Participants and their beneficiaries accrued on account of their
employment with the Employer, the remaining amount necessary to satisfy
such obligation shall be an obligation of the Employer, and the other
Employers shall have no further obligation to such Participants and
beneficiaries with respect to such amounts.
SECTION 8
Amendment and Termination
The Companv intends the Plan to be permanent, but reserves the right at
anv time to modifv, amend or terminate the Plan; provided however, that
except as provided below, any amendment or termination of the Plan shall
not reduce or eliminate any balance in a Participant's Deferred Compensation
Account accrued through the date of such amendment or termination. Upon
termination of the Plan, the Companv may provide that notwithstanding the
Participant's Distribution Date, all Deferred Compensation Account balances
will be distributed on a date selected bv the Company.
SECTION 9
Change of Control
9.1. Overriding Provisions Applicable During a Restricted Period. The
following provisions of this Section 9 will become effective on a Restricted
Date as the result of a Change of Control and will remain in effect during
the Restricted Period beginning on that date until the following related
Unrestricted Date, and during the Restricted Period, will supersede any other
provisions of the Plan to the extent necessary to eliminate any inconsistencies
between the provisions of this Section 9 and any other provisions of the Plan,
including any supplements thereto.
9.2. Suspension of Part or All of the Overriding Provisions. If a majority
of the members of the Entire Board are Continuing Directors (provided such
majority is equal to the same number as constituted a majoritv of the Entire
Board immediately prior to the Change of Control), by the affirmative vote of
a majority of the Entire Board and a majority of those members of the Entire
Board who are Continuing Directors, all or a designated portion or portions
of the following provisions of this Section 9 may be declared not applicable
as to the specified transaction or event. No portion of the provisions of
this Section 9 will apply to any transaction or event to the extent such
portion is inconsistent with the requirements of applicable law.
9.3. Definitions. For purposes of this Section 9, the definitions set forth
in Paragraphs (a) throuph (k) below will apply. Definitions set forth
elsewhere in the Plan also will apply to the provisions set forth in this
Section 9, except that where a definition set forth elsewhere in the Plan
and a definition set forth in this Subsection conflict, the definition set
forth in this Subsection will govern.
(a) "Acquiring Person" will mean any Person, who or which,
together with all Affiliates and Associates of such Person,
is the Beneficial Owner of shares of common stock of the
Company constituting more than 20 percent of the common stock
then outstanding.
(b) "Affiliate" and "Associate" will have the meaning ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934 (the "Act").
(c) "Beneficial Owner" will have the meaning ascribed to such term
in Rule 13d-3 of the Act.
(d) "Board of Directors" will mean the Board of Directors of the
Companv.
(e) A "Change of Control" will be deemed to occur (i) upon any
Person becoming an Acquiring Person if the Board of Directors,
including a majority of the Continuing Directors, has not
recommended that stockholders of the Company tender or
otherwise sell their common stock to such Acquiring Person;
(ii) upon the approval bv the stockholders of the Companv of
a reorganization, merger or consolidation, in each case,
with respect to which persons who were stockholders of the
Company immediately prior to such reorganization, merger or
consolidation, do not, immediately thereafter, own more than
50 percent of the combined voting power entitled to vote
generally in the election of directors of the reorganized,
consolidated or merged Company's then outstanding securities;
or (iii) upon a liquidation or dissolution of the Companv or
the sale of all or substantially all of the Companv's assets;
or (iv) when a majority of the Board of Directors is replaced
during any 12 month period by directors whose appointment or
election is not endorsed by a majoritv of the members of the
Board of Directors, including a majority of the Continuing
Directors, immediately prior to the date of the appointment
or election.
(f) "Continuing Director" will mean:
(i) any member of the Board of Directors immediately prior
to a Change of Control, or
(ii) anv successor of a Continuing Director who is recommended
or elected to succeed such Continuing Director bv a
majority of the Continuing Directors then in office and
is neither an Acquiring Person, an Affiliate of an
Acquiring Person, nor a representative or nominee of
an Acquiring Person or of any such Affiliate while
such person is a member of the Board of Directors.
Notwithstanding the foregoing, a successor will not be
deemed to be a Continuing Director unless, immediately
prior to his or her appointment or election, a majoritv
of the members of the Entire Board were Continuing
Directors (and unless such majority is equal to the
same number as constituted a majoritv of the Entire
Board immediately prior to the Change of Control).
(g) "Person" will mean any individual, firm, corporation or
other entity, and will include any "group" as that term
is used in Rule 13d-5(b) of the Act.
(h) "Restricted Date" will mean the date on which a Change of
Control occurs.
(i) "Restricted Period" will mean the period beginning on a
Restricted Date and ending on the fifth anniversary of
such Restricted Date.
(j) "Unrestricted Date" will mean the last day of a Restricted
Period.
(k) "Entire Board will mean the total number of members of
the Board of Directors that there would be if there were
no vacancies on such Board.
9.4 Benefits Vested on the Restricted Date. Effective on a Restricted
Date, the balances in the Deferred Compensation Accounts (including
any contributions and investment earnings after that date) of each
Participant who is a Participant in the Plan on that date will become
fully vested and nonforfeitable. Further, unless declared not
applicable under the previous Section 9.2 the entire balances in the
Deferred Compensation Accounts will be distributed in full upon the
Participant's election within 90 days after Change of Control occurs.
9.5 Prohibition Against Amendment. During the Restricted Period, the
provisions of this Section 9 may not be amended or deleted and may
not be superseded by any other provision of the Plan (including the
provisions of any exhibit or supplement thereto).
IN WITNESS WHEREOF, the Company has caused this plan to be executed by
its duly authorized officers on this 27th day of January, 1997.
ERO, Inc.
By: /s/ Mark D. Renfree
Its: CFO