EXHIBIT 4.1
DELUXE CORPORATION
DEFERRED COMPENSATION PLAN
(2001 RESTATEMENT)
DELUXE CORPORATION
DEFERRED COMPENSATION PLAN
(2001 RESTATEMENT)
TABLE OF CONTENTS
PAGE
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SECTION 1 RESTATEMENT AND PURPOSE.........................................1
1.1. Restatement
1.2. Purpose
SECTION 2 DEFINITIONS.....................................................1
2.1. Definitions
2.2. Transition Rule
SECTION 3 ELIGIBILITY FOR PARTICIPATION...................................3
SECTION 4 ENROLLMENT AND ELECTIONS........................................4
4.1. Initial Enrollment
4.2. Election to Defer
4.3. Special Rule for New Hires
SECTION 5 DEFERRAL ACCOUNTS...............................................6
5.1. Participant Deferral Accounts
5.2. Employee Benefit Plan Equivalent
5.3. Investment Options
5.4. Charges Against Deferral Accounts
5.5. Contractual Obligation
5.6. Unsecured Interest
SECTION 6 PAYMENT OF DEFERRED AMOUNTS.....................................7
6.1. Event of Maturity
6.2. Form of Distribution
6.2.1. Form of Payment
6.2.2. Time of Payment
6.2.3. Default
6.2.4. New Designation
6.2.5. Code Section 162(m) Delay
6.3. Special Rule for eFunds Participants
SECTION 7 FINANCIAL EMERGENCY............................................11
SECTION 8 BENEFICIARY....................................................11
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SECTION 9 NONTRANSFERABILITY.............................................12
SECTION 10 DETERMINATIONS -- RULES AND REGULATIONS........................12
10.1. Determinations
10.2. Rules and Regulations
10.3. Method of Executing Instruments
10.4. Claims Procedure
10.4.1. Original Claim
10.4.2. Claims Review Procedure
10.4.3. General Rules
10.5. Information Furnished by Participants
SECTION 11 ADMINISTRATION.................................................14
11.1. Company
11.1.1. Chief Executive Officer
11.1.2. Committee
11.1.3. Management Committee
11.2. Conflict of Interest
11.3. Dual Capacity
11.4. Administrator
11.5. Named Fiduciaries
11.6. Service of Process
11.7. Administrative Expenses
SECTION 12 AMENDMENT AND TERMINATION......................................17
SECTION 13 LIFE INSURANCE CONTRACT........................................17
SECTION 14 MERGER, CONSOLIDATION OR ACQUISITION...........................17
SECTION 15 NO VESTED RIGHTS...............................................18
SECTION 16 APPLICABLE LAW.................................................18
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DELUXE CORPORATION
DEFERRED COMPENSATION PLAN
(2001 RESTATEMENT)
SECTION 1
RESTATEMENT AND PURPOSE
1.1. RESTATEMENT. Deluxe Corporation, a Minnesota corporation (hereinafter
called the "Company"), established, effective as of November 15, 1983, a
deferred compensation plan known as the "DELUXE CORPORATION DEFERRED
COMPENSATION PLAN" (hereinafter called the "Plan"). The Plan was subsequently
restated effective as of January 1, 1996, and amended effective January 1, 1997,
and was restated effective October 26, 2000 (except as otherwise indicated). The
Plan is now again restated effective October 26, 2000 (the "Effective Date"),
except as otherwise indicated in Section 5.
1.2. PURPOSE. The purpose of the Plan is to provide a means whereby amounts
payable by the Company to Participants (as hereinafter defined) may be deferred
to some future period. It is also the purpose of the Plan to attract and retain
as employees persons whose abilities, experience and judgment will contribute to
the growth and profitability of the Company.
SECTION 2
DEFINITIONS
2.1. DEFINITIONS. Whenever used in this Plan, the following terms shall have the
meanings set forth below:
(a.) "Affiliate" means a business entity which is affiliated in
ownership with the Company and is recognized as an Affiliate
by the Management Committee for the purposes of this Plan.
(b.) "Base Salary" means the base salary scheduled to be paid to a
Participant during a Plan Year without regard to any Incentive
Compensation, or any portion deferred under this Plan.
(c.) "Committee" means the Compensation Committee of the Board of
Directors of the Company.
(d.) "Deferral Account" means the separate bookkeeping account
representing the unfunded and unsecured general obligation of
Company established with respect to each Participant to which
is credited the dollar amounts specified in Section 5 and from
which are subtracted payments made pursuant to Sections 6 and
8.
(e.) "Disability" means, as to a Participant who is an employee of
the Company, a determination of disability under Company's
Long Term Disability Plan. If the Participant is an employee
of an Affiliate, "Disability" means as to such Participant, a
determination of disability under the Long Term Disability
Plan of such Affiliate, or, if no such Plan exists, then under
the Long Term Disability Plan of the Company as if such
Participant were a participant in such plan. If the Company
discontinues its Long Term Disability Plan, then "Disability"
shall mean long term disability as defined in any other Plan
of the Company which generally defines long term disability
for purposes of such other plan. In no event, however, shall a
Participant be considered to have a Disability for purposes of
this Plan until such time as such Participant is entitled to
begin (or would be entitled to begin, if such Participant were
a participant in the relevant plan) receipt of benefits under
such long term disability or other relevant plan.
(f.) "Eligible Employee" means an employee of the Company or its
Affiliates who (i) is an officer or assistant officer, or (ii)
has significant management or professional responsibilities,
and (iii) who is highly compensated. Subject to the
limitations contained in Section 3, the Management Committee
from time to time may (i) establish rules governing the
eligibility of employees of the Company and its Affiliates to
participate in the Plan and, such rules, if adopted, shall be
deemed to further define or amend, as the case may be, the
definition of "Eligible Employee" herein, and (ii) permit
certain employees of the Company and its Affiliates, who would
not otherwise be eligible to participate in the Plan, to
participate in the Plan.
(g.) "Event of Maturity" means any of the occurrences described in
Section 6.1 by reason of which a Participant or Beneficiary
may become entitled to a distribution from the Plan.
(h.) "Incentive Compensation" means the incentive, bonus, and
similar compensation that is paid to a Participant based on
performance or other factors during a Plan Year without regard
to any portion deferred under this Plan. Incentive
Compensation shall not include any awards made under the 2000
Stock Incentive Plan, or any subparts thereof, until such time
as the Management Committee determines that all or a portion
of such compensation is Incentive Compensation.
(i.) "Installment Amount" means a Deferral Account (expressed in
dollars) that is to be paid during a period (having common
initial and final installment dates) designated pursuant to
Section 6.2.1 by the Participant in writing at the time of his
or her enrollment or otherwise made in accordance with this
Plan.
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(j.) "Management Committee" means the Management Committee formed
by the Chief Executive Officer pursuant to Section 12 of the
Plan. "Participant" means any Eligible Employee who is
affirmatively selected by the Management Committee and who
elects to participate in the Plan.
(k.) "Plan Year" means the twelve-month period coinciding with the
Company's fiscal year and ending on each December 31.
(l.) "Selected Distribution Date" shall mean the date that is
designated in accordance with this Plan by the Participant in
writing at the time of his or her enrollment as the date for
the payment or commencement of payments of his or her Deferral
Account. In the absence of an effective election of any other
date, a Participant's Selected Distribution Date shall be the
date of his or her Termination of Employment.
(m.) "Termination of Employment" means a complete severance of a
Participant's employment relationship with the Company and all
Affiliates. A transfer from employment with the Company to
employment with an Affiliate of the Company or other transfer
between Affiliates or from an Affiliate to the Company shall
not constitute a Termination of Employment. If an Affiliate
ceases to be an Affiliate because of a sale or other
disposition of substantially all its stock or assets, then
Participants who are employed by that Affiliate shall be
deemed to have had a Termination of Employment for the
purposes of this Plan as of the effective date of such sale.
2.2. TRANSITION RULE. Subject to rules and deadlines established by the
Management Committee, Participants with Deferral Accounts as of October 26, 2000
who have not commenced receiving payments under Section 5 shall have an
opportunity to change the deferral election(s) for their Deferral Accounts and
elect a new designation of a time and form of payment pursuant to Section 6.2.4.
Such new designation must, however, apply to the entire Deferral Account such
that after the new designation, the Participant shall have one Selected
Distribution Date and one form of payment under Section 6 for his or her entire
Deferral Account. Participants failing to make an effective new designation or
not eligible for a new designation pursuant to this transition rule shall
receive their distribution by giving effect to the prior effective election(s)
under the Plan.
SECTION 3
ELIGIBILITY FOR PARTICIPATION
Each Eligible Employee of the Company and its Affiliates shall be eligible to
participate in the Plan and shall become a Participant upon selection by the
Management Committee. In the event a
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Participant ceases to be an Eligible Employee, he or she shall become an
inactive Participant, retaining all the rights described under the Plan, except
the right to elect any further deferrals. Notwithstanding anything apparently to
the contrary in this Plan or in any written communication, summary, resolution
or document or oral communication, no individual shall be a Participant in this
Plan, develop benefits under this Plan or be entitled to receive benefits under
this Plan (either for himself or herself or his or her survivors) unless such
individual is a member of a select group of management or highly compensated
employees (as that expression is used in ERISA). If a court of competent
jurisdiction, any representative of the U.S. Department of Labor or any other
governmental, regulatory or similar body makes any direct or indirect, formal or
informal, determination that an individual is not a member of a select group of
management or highly compensated employees (as that expression is used in
ERISA), such individual shall not be (and shall not have ever been) a
Participant in this Plan at any time. If any person not so defined has been
erroneously treated as a Participant in this Plan, upon discovery of such error
such person's erroneous participation shall immediately terminate AB INITIO and
the Company shall distribute the individual's Deferral Account immediately.
SECTION 4
ENROLLMENT AND ELECTIONS
4.1. INITIAL ENROLLMENT. Prior to the first Plan Year that an employee selected
for participation becomes a Participant, such employee shall complete such forms
and make such elections as required by the Company for effective administration
of the Plan. Such initial enrollment:
(a.) Shall specify the form in which distribution of the Deferral
Account attributable to that enrollment shall be made under
Section 6 (and if such designation is not clearly made to the
contrary, shall be deemed to have been an election of a single
lump sum distribution).
(b.) Shall specify the time at which distribution shall be made
which shall, subject to Section 6 hereof, be the later of such
Participant's Selected Distribution Date or such Participant's
Termination of Employment.
(c.) Shall be made upon forms furnished by the Company, shall be
made at such time as the Company shall determine and shall
conform to such other procedural and substantive rules as the
Company shall prescribe from time to time.
(d.) Shall be irrevocable once it has been accepted by the Chief
Executive Officer of the Company, except to the extent that a
new designation is made effective in accordance with Section
6.2.4.
(e.) Shall contain a deferral election made in accordance with
Section 4.2.
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4.2. ELECTION TO DEFER. Prior to the first day of any Plan Year, a Participant
may make a deferral election for that Plan Year. A separate election shall be
made for each Plan Year. Each such deferral election:
(a.) Shall be irrevocable for the Plan Year with respect to which
it is made once it has been accepted by the Chief Executive
Officer of the Company.
(b.) Shall designate the amount or portion of the Participant's
Incentive Compensation which is earned during that Plan Year
(without regard to whether it would be paid during that or a
subsequent Plan Year) which shall not be paid to the
Participant but instead shall be accumulated in this Plan
under Section 5 and distributed from this Plan under Section
6. Such designation shall be in a minimum amount of $1,000. If
expressed as a percentage, such percentage shall not exceed
fifty percent (50%) of such Participant's targeted Incentive
Compensation. If expressed as a dollar amount, such dollar
amount shall not exceed the dollar amount equivalent of fifty
percent (50%) of such Participant's targeted Incentive
Compensation. If a dollar amount is elected, such election
shall be reduced dollar for dollar if the Incentive
Compensation declared is less than the election.
(c.) Shall designate the amount or portion of the Participant's
Base Salary which is earned during that Plan Year (without
regard to whether it would be paid during that or a subsequent
Plan Year) which shall not be paid to the Participant but
instead shall be accumulated in this Plan under Section 5 and
distributed from this Plan under Section 6. Such designation
shall be in a minimum amount of $1,000, and may be up to 100
percent (100%) of such Participant's Base Salary, less all
FICA, federal, state and/or local income tax liabilities, and
shall be automatically revoked if the Base Salary of the
Participant is reduced during the Plan Year for which such
election is made.
(d.) Shall be made upon forms furnished by the Company, shall be
made at such time as the Company shall determine, shall be
made before the beginning of the Plan Year with respect to
which it is made and shall conform to such other procedural
and substantive rules as the Company shall prescribe from time
to time.
4.3. SPECIAL RULE FOR NEW HIRES. Notwithstanding anything to the contrary in
this Plan, the Management Committee may designate an employee of the Company or
its Affiliates as an Eligible Employee in the employee's year of hire if the new
hire satisfies the eligibility requirements of Section 3. In such cases, the new
hire may, prior to commencement of employment, make a deferral election for the
current Plan Year as provided in Sections 4.1 and 4.2, except for the
requirement that the election be made prior to the first day of the Plan Year.
Such newly hired Participants, however, may defer Base Salary only and may not
defer Incentive Compensation. Such new hires may also defer any hiring bonus
provided by Company. In addition to Base Salary and hiring bonuses, a new hire
may be allowed to defer other compensation as approved by the Management
Committee. The newly hired Participant shall make deferral elections according
to Sections 4.1 and 4.2 for Plan Years after the year of hire, as long as the
employee continues to be an Eligible Employee.
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SECTION 5
DEFERRAL ACCOUNTS
(EFFECTIVE JANUARY 1, 2000)
5.1. PARTICIPANT DEFERRAL ACCOUNTS. The Company shall establish and maintain a
bookkeeping Deferral Account for each Participant. The Company shall, from time
to time, provide each Participant with a statement indicating the balance of
such Participant's Deferral Account. At its discretion the Company may obtain
life insurance on the life of any or all Participants to provide all or a
substantial portion of the money needed to pay the amounts deferred under the
Plan. Each Participant's Deferral Account shall be credited, as appropriate,
with one or more of the following:
(a.) Base Salary deferrals and Incentive Compensation deferrals
made pursuant to Section 4 above;
(b.) Employee Benefit Plan Equivalents as provided by Section 5.2
below; and
(c.) Gains or losses on deemed investment options as provided by
Section 5.3 below.
5.2. EMPLOYEE BENEFIT PLAN EQUIVALENT. To the extent the Company's contributions
under its compensation-based benefit plans (including the Deluxe Corporation
Supplemental Benefit Plan) are reduced as a result of the Participant's deferral
of compensation under the Plan, the amount of such reduction shall be credited
to the Participant's Deferral Account. Any amount credited under this procedure
shall be credited as of the last day of the Plan Year during which such
compensation was earned without regard to whether it is paid in a subsequent
year. Any amount credited to a Deferral Account of a Participant under this Plan
shall not be duplicated, directly or indirectly, under any other plan of the
Company.
5.3. INVESTMENT OPTIONS. The Management Committee shall permit a Participant to
allocate the Participant's Deferral Account among one or more investment options
for purposes of measuring the value of the benefit. That portion of the Deferral
Account allocated to an investment option shall be deemed to be invested in such
investment option and shall be valued as if so invested, reflecting all
earnings, losses and other distributions or charges and changes in value which
would have been incurred through such an investment. The determination of which
investment options to make available, and the continued availability of selected
investment options rests in the Management Committee's sole discretion. A
Participant's request to allocate or reallocate among investment options must
comply with any procedures established by the Management Committee and must be
in such increments as the Management Committee may require. The Participant may
not reallocate among investment options more frequently than once a quarter. All
requests for allocation or reallocation are subject to acceptance by the
Management Committee, at its discretion. If accepted by the Management
Committee, an allocation request will be effective as soon as reasonably
administratively practicable.
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5.4. CHARGES AGAINST DEFERRAL ACCOUNTS. There shall be charged against each
Participant's account any payments made to the Participant or his or her
Beneficiary in accordance with Sections 6 or 7 of the Plan.
5.5. CONTRACTUAL OBLIGATION. It is intended that the Company is under a
contractual obligation to make payments to a Participant when due. Such payments
shall be made out of the general funds of the Company.
5.6. UNSECURED INTEREST. No Participant or Beneficiary shall have any interest
whatsoever in any specific asset of the Company. To the extent any person
acquires a right to receive payments under the Plan, such right shall be no
greater than the right of any unsecured general creditor of the Company.
SECTION 6
PAYMENT OF DEFERRED AMOUNTS
6.1. EVENT OF MATURITY. A Participant's Deferral Account shall mature and shall
become distributable in accordance with Section 6.2 and 6.3 upon the earliest
occurrence of any of the following events:
(a.) The Participant's death;
(b.) The Participant's Disability; or
(c.) The occurrence of the Selected Distribution Date (except that
if the Selected Distribution Date occurs prior to Termination
of Employment, the Event of Maturity shall be Termination of
Employment).
6.2. FORM OF DISTRIBUTION. Upon the occurrence of an Event of Maturity specified
in Section 6.1 effective as to a Participant, the Company shall commence payment
of such Participant's Deferral Account (reduced by the amount of any applicable
payroll, withholding and other taxes) in the form designated by the Participant
in his or her enrollment subject to the rules of this Section 6. A Participant
shall not be required to make application to receive payment. Distribution shall
not be made to any Beneficiary, however, until such Beneficiary shall have filed
a written application for benefits and such other information as may be
requested by the Company and such application shall have been approved by the
Company.
6.2.1. FORM OF PAYMENT. Payment shall be made in whichever of the
following forms as the Participant shall have designated in writing at the time
of his or her initial enrollment or subsequent effective new designation under
Section 6.2.4 (to the extent that such election is consistent with the rules of
this Plan):
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(a.) TERM CERTAIN INSTALLMENTS TO PARTICIPANT. Subject to Section
6.2.1(d), below, if the distributee is a Participant and the
Deferral Account as of the applicable Event of Maturity
(without giving effect to any gains or losses under Section
5.1(c) after such date) is at least Fifty Thousand Dollars
($50,000), in a series of monthly installments payable over a
period not less than two (2) years and not more than ten (10)
years. The amount of the monthly installments shall be
approximately equal and shall include a reasonable gain or
loss assumption as determined by the Company in its discretion
from time to time.
(b.) CONTINUED TERM CERTAIN INSTALLMENTS TO BENEFICIARY. If the
distributee is a Beneficiary of a deceased Participant and
payment had commenced to the deceased Participant before his
or her death over a period as specified in paragraph (a)
above, in a series of annual installments payable over the
remainder of such period.
(c.) LUMP SUM. If the distributee is either a Participant or
Beneficiary (except as provided in Section 6.2.1(b)), in a
single lump sum payment pursuant to Section 6.2.1(d), below.
(d.) LUMP SUM DISTRIBUTION NOTWITHSTANDING DESIGNATION. If a
Participant's total Deferral Account is less than Fifty
Thousand Dollars ($50,000) at the earlier to occur of
Termination of Employment or an Event of Maturity, then, even
if the Selected Distribution Date occurs after the Termination
of Employment and regardless of whether the Participant
elected to have his or her Deferral Account paid in
installments pursuant to Section 6.2.1(a), such Participant's
Deferral Account shall be paid in a single lump sum pursuant
to the provisions of Section 6.2.2(a) below. If a Participant
elected and is receiving installment distributions pursuant to
Section 6.2.1(a) above (or if a Beneficiary is receiving
installments pursuant to Section 6.2.1(b)) and if, during the
period of installment distributions, the undistributed portion
of such total Deferral Account becomes less than Five Thousand
Dollars ($5,000), then the remaining Deferral Account shall be
paid in a single lump sum.
(e.) LUMP SUM DISTRIBUTION UPON DISPOSITION OF AFFILIATE.
Notwithstanding the foregoing provisions of this Section 6.2.1
or any enrollment of a Participant to the contrary, if a
Termination of Employment is deemed to occur on account of a
sale or other disposition of stock or assets of an Affiliate,
the Deferral Accounts of Participants employed by such
Affiliate who are deemed to have had such a Termination of
Employment shall be distributed in a single lump sum.
6.2.2. TIME OF PAYMENT. Payment shall be made or commenced to a
Participant in accordance with the following rules:
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(a.) TERMINATION OF EMPLOYMENT. If the payment is to be made or
commenced on account of the Participant's Termination of
Employment, payment shall be made within sixty (60) days of
such Termination of Employment.
(b.) DEATH -- INSTALLMENTS TO BENEFICIARY. If installments are
recommenced pursuant to Section 6.2.1(b) on account of the
Participant's death, the recommencement of such installment
payments shall begin within sixty (60) days after the later
date of such Participant's death or approval by the Management
Committee of such Beneficiary's application for recommencement
of installments.
(c.) DEATH -- LUMP SUM TO BENEFICIARY. If a single lump sum payment
is to be made pursuant Section 6.2.1(c) to the Participant's
Beneficiary, payment shall be made within the later of sixty
(60) days after the Participant's death or the approval by the
Management Committee of such Beneficiary's application for
payment.
(d.) DISABILITY. If the payment is made on account of the
Participant's Disability, payment shall be made in a single
lump sum as if the Participant had a Termination of Employment
as provided in paragraph (a) above, within sixty (60) days of
the determination of the existence of such Disability.
(e.) SELECTED DISTRIBUTION DATE. Subject to the provisions of
Section 6.2.1(d), if payment is to be made or commenced on a
Selected Distribution Date, payment will be made or commenced
within sixty (60) days of such Selected Distribution Date. If
the Selected Distribution Date is Termination of Employment,
either because so designated by the Participant as the
Selected Distribution Date or by default under Section 2.1(m),
payment will be made or commenced within sixty (60) days of
such Termination of Employment.
(f.) DISPOSITION OF AFFILIATE. If the payment is to be made on
account of the Participant's Termination of Employment on
account of a disposition of an Affiliate, payment shall be
made within sixty (60) days of such disposition.
6.2.3. DEFAULT. If for any reason a Participant shall have failed to
make a timely written designation of the form of distribution or of a Selected
Distribution Date for payment (including reasons entirely beyond the control of
the Participant), the payment shall be made in a single lump sum within sixty
(60) days of the Participant's Termination of Employment. No spouse, former
spouse, Beneficiary or other person shall have any right to participate in the
Participant's selection of a form of benefit.
6.2.4. NEW DESIGNATION. At any time and from time to time, each
Participant may file with the Chief Executive Officer of the Company (or as
otherwise directed by the Management Committee) a new designation of a time and
form of payment. Each subsequent designation shall supercede all prior
designations and shall be effective as to the Participant's entire Deferral
Account (including the portions of the Deferral Account attributable to periods
before the new designation is
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filed) as if the new designation had been made in writing at the time of the
Participant's initial enrollment. Notwithstanding the foregoing, any new
designation shall be disregarded as if it had never been filed (and the prior
effective designation shall be given effect) unless the designation was filed
with the Chief Executive Officer of the Company (or as otherwise directed by the
Management Committee) at least thirteen (13) months before the Participant's
Termination of Employment.
6.2.5. CODE SECTION 162(m) DELAY. If the Company determines that
delaying the time when the initial payments are made or commenced would increase
the probability that such payments would be fully deductible by the Company for
federal or state income tax purposes, the Company may unilaterally delay the
time of the making or commencement of such payments for up to twelve (12) months
after the date such payments would otherwise be made.
6.3. SPECIAL RULE FOR eFUNDS PARTICIPANTS. Notwithstanding anything to the
contrary in this Plan, the following provisions shall apply to all Participants
who as of the spin off of eFunds Corporation ("eFunds") from the Company are
employed by eFunds or a subsidiary or affiliated corporation of eFunds ("eFunds
Participant"):
(a.) The spin off of eFunds shall not constitute a Termination of
Employment for purposes of this Plan and payment shall not be
made or commenced to eFunds Participants based on the
occurrence of the spin off.
(b.) Unless eligible for distribution before the spin off, eFunds
Participants shall not be eligible for payments of Deferral
Accounts from the Plan until they have an Event of Maturity
occurring after the spin off. Termination of Employment by
eFunds (including all of its affiliates, defined as any
business entity which is affiliated in ownership with eFunds
and is recognized as an affiliate of eFunds by the Management
Committee for purposes of this Plan) shall constitute a
Termination of Employment for purposes of this Plan with
respect to eFunds Participants.
(c.) The deferral elections of eFunds Participants shall
immediately and automatically terminate upon occurrence of the
spin off and there shall be no further deferrals of
compensation for such eFunds Participants into this Plan.
There shall also be no further Employee Benefit Plan
Equivalents credited to the eFunds Participants' Deferral
Accounts after the spin off, except any credits reflecting
deferrals occurring before the spin off. Deferrals related to
Incentive Compensation earned before the spin off (even if
paid after the spin off) will be credited to the eFunds
Participants' accounts in accordance with the terms of their
deferral elections for the 2000 Plan Year.
(d.) All other provisions of the Plan shall remain in effect as to
the eFunds Participants who shall become inactive
Participants, including but not limited to the ability to
allocate Deferral Accounts among Investment Options as
provided at Section 5.3 and the crediting or debiting of such
Deferral Accounts to reflect such Investment Options as
provided at Section 5.1(c).
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SECTION 7
FINANCIAL EMERGENCY
The Management Committee may alter the manner or timing of payment of a Deferral
Account under Section 6 in the event that the Participant establishes, to the
satisfaction of the Management Committee, severe financial hardship. In such
event, the Management Committee may:
(a.) Provide that all or a portion of the Deferral Account shall be
paid immediately in a lump sum payment,
(b.) Provide that all or a portion of the installments payable over
a period of time shall be paid immediately in a lump sum, or
(c.) Provide for such other installment payment schedules as it
deems appropriate under the circumstances,
as long as the accelerated distribution shall not be in excess of that amount
which is necessary for the Participant to meet the financial hardship.
Severe financial hardship shall be deemed to have occurred in the event of the
Participant's impending bankruptcy, a Participant's or dependent's long and
serious illness, or other events of similar magnitude. The Management
Committee's determination as to the occurrence of a severe financial hardship of
the Participant and the manner in which, if at all, the payment of deferred
amounts shall be altered or modified, shall be final.
SECTION 8
BENEFICIARY
A Participant may designate a Beneficiary or Beneficiaries who, upon his or her
death, shall receive the distributions that otherwise would have been paid to
the Participant. All designations shall be in writing and shall be effective
only if and when delivered to the Chief Executive Officer of the Company during
the lifetime of the Participant. If a Participant designates a Beneficiary
without providing in the designation that the Beneficiary must be living at the
time of such distribution, the designation shall vest in the Beneficiary all of
the distributions, whether payable before or after the Beneficiary's death, and
any distributions remaining upon the Beneficiary's death shall be paid to the
Beneficiary's estate.
A Participant may, from time to time, change the Beneficiary or Beneficiaries by
a written instrument delivered to the Chief Executive Officer of the Company. In
the event a Participant shall not designate a Beneficiary or Beneficiaries
pursuant to this Section, or if for any reason such
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designation shall be ineffective, in whole or in part, the distributions that
otherwise would have been paid to such Participant shall be paid to the first
class of the following classes of automatic Beneficiaries with a member
surviving the Participant and (except in the case of the Participant's surviving
issue) in equal shares if there is more than one member in such class surviving
the Participant:
Participant's surviving spouse
Participant's surviving issue per stirpes and not per capita
Participant's surviving parents
Participant's surviving brothers and sisters
Representative of Participant's estate.
SECTION 9
NONTRANSFERABILITY
In no event shall the Company make any payment under the Plan to any assignee or
creditor of a Participant or a Beneficiary. Prior to the time of payment
hereunder, a Participant or Beneficiary shall have no rights by way of
anticipation or otherwise to assign or otherwise dispose of any interest under
the Plan nor shall such rights be assigned or transferred by operation of law.
SECTION 10
DETERMINATIONS -- RULES AND REGULATIONS
10.1. DETERMINATIONS. The Management Committee shall make such determinations as
may be required from time to time in the administration of the Plan. The
Management Committee shall have the discretionary authority and responsibility
to interpret and construe the Plan and to determine all factual and legal
questions under the Plan, including but not limited to the entitlement of
Participants and Beneficiaries, and the amounts of their respective interests.
Each interested party may act and rely upon all information reported to them
hereunder and need not inquire into the accuracy thereof, nor be charged with
any notice to the contrary.
10.2. RULES AND REGULATIONS. Any rule not in conflict or at variance with the
provisions hereof may be adopted by the Management Committee.
10.3. METHOD OF EXECUTING INSTRUMENTS. Information to be supplied or written
notices to be made or consents to be given by the Management Committee pursuant
to any provision of this Plan may be signed in the name of the Management
Committee by any person who has been authorized to make such certification or to
give such notices or consents.
10.4. CLAIMS PROCEDURE. The claims procedure set forth in this Section 12.4
shall be the exclusive procedure for the disposition of claims for benefits
arising under the Plan.
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10.4.1. ORIGINAL CLAIM. Any Participant, former Participant or
Beneficiary of such Participant or former Participant may, if he or she so
desires, file with the Management Committee a written claim for benefits under
the Plan. Within ninety (90) days after the filing of such a claim, the
Management Committee shall notify the claimant in writing whether the claim is
upheld or denied in whole or in part or shall furnish the claimant a written
notice describing specific special circumstances requiring a specified amount of
additional time (but not more than one hundred eighty (180) days from the date
the claim was fled) to reach a decision on the claim. If the claim is denied in
whole or in part, the Company shall state in writing:
(a.) The specific reasons for the denial;
(b.) The specific references to the pertinent provisions of this
Plan on which the denial is based;
(c.) A description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary;
and
(d.) An explanation of the claims review procedure set forth in
this section.
10.4.2. CLAIMS REVIEW PROCEDURE. Within sixty (60) days after receipt
of notice that the claim has been denied in whole or in part, the claimant may
file with the Management Committee a written request for a review and may, in
conjunction therewith, submit written issues and comments. Within sixty (60)
days after the filing of such a request for review, the Management Committee
shall notify the claimant in writing whether, upon review, the claim was upheld
or denied in whole or in part or shall furnish the claimant a written notice
describing specific special circumstances requiring a specified amount of
additional time (but not more than one hundred twenty (120) days from the date
the request for review was filed) to reach a decision on the request for review.
10.4.3. GENERAL RULES.
(a.) No inquiry or question shall be deemed to be a claim or a
request for a review of a denied claim unless made in
accordance with the claims procedure. The Management Committee
may require that any claim for benefits and any request for a
review of a denied claim be filed on forms to be furnished by
the Management Committee upon request.
(b.) All decisions on claims and on requests for a review of denied
claims shall be made by the Management Committee.
(c.) The Management Committee may, in its discretion, hold one or
more hearings on a claim or a request for a review of a denied
claim.
(d.) A claimant may be represented by a lawyer or other
representative (at the claimant's own expense), but the
Management Committee reserves the right to require the
claimant to furnish written authorization. A claimant's
representative shall be entitled to copies of all notices
given to the claimant.
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(e.) The decision of the Management Committee on a claim and on a
request for a review of a denied claim shall be served on the
claimant in writing. If a decision or notice is not received
by a claimant within the time specified, the claim or request
for a review of a denied claim shall be deemed to have been
denied.
(f.) Prior to filing a claim or a request for a review of a denied
claim, the claimant or his or her representative shall have a
reasonable opportunity to review a copy of this Plan and all
other pertinent documents in the possession of the Management
Committee.
10.5. INFORMATION FURNISHED BY PARTICIPANTS. The Company and its Affiliates
shall not be liable or responsible for any error in the computation of the
Deferral Account of a Participant resulting from any misstatement of fact made
by the Participant, directly or indirectly, to the Company, and used by it in
determining the Participant's Deferral Account. The Company shall not be
obligated or required to increase the Deferral Account of such Participant
which, on discovery of the misstatement, is found to be understated as a result
of such misstatement of the Participant. However, the Deferral Account of any
Participant which are overstated by reason of any such misstatement shall be
reduced to the amount appropriate in view of the truth.
SECTION 11
ADMINISTRATION
11.1. COMPANY. Functions generally assigned in this Plan to the Company are
delegated to the Committee, Chief Executive Officer and the Management Committee
as follows:
11.1.1. CHIEF EXECUTIVE OFFICER. Except as otherwise provided by the
Plan and as set forth in Section 11.1.2, below, the Chief Executive Officer of
the Company shall delegate to a Management Committee all matters regarding the
administration of the Plan.
11.1.2. COMMITTEE. Notwithstanding the foregoing general delegations to
the Chief Executive Officer and the Management Committee, the Committee shall
have the exclusive authority, which may not be delegated, to act for the
Company:
(a.) to amend or to terminate this Plan; and
(b.) to consent to the adoption of the Plan by other business
entities; to establish conditions and limitations upon such
adoption of the Plan by other business entities.
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11.1.3. MANAGEMENT COMMITTEE.
(a.) APPOINTMENT AND REMOVAL. The Management Committee, subject to
the direction of the Committee and the Chief Executive
Officer, shall have all of the functions and authorities
generally assigned in this Plan to the Company. The Management
Committee shall consist of one or members as may be determined
and appointed from time to time by the Chief Executive Officer
of the Company and they shall serve at the pleasure of such
Chief Executive Officer and the Committee.
(b.) AUTOMATIC REMOVAL. If any individual who is a member of the
Management Committee is a director, officer or employee when
appointed as a member of the Management Committee, then such
individual shall be automatically removed as a member of the
Management Committee at the earliest time such individual
ceases to be a director, officer or employee. This removal
shall occur automatically and without any requirement for
action by the Chief Executive Officer of the Company or any
notice to the individual so removed.
(c.) AUTHORITY. The Management Committee may elect such officers as
the Management Committee may decide upon. In addition to the
other authorities delegated elsewhere in this Plan to the
Management Committee, the Management Committee shall:
(i.) establish rules for the functioning of the Management
Committee, including the times and places for holding
meetings, the notices to be given in respect of such
meetings and the number of members who shall
constitute a quorum for the transaction of business,
(ii.) organize and delegate to such of its members as it
shall select authority to execute or authenticate
rules, advisory opinions or instructions, and other
instruments adopted or authorized by the Management
Committee; adopt such bylaws or regulations as it
deems desirable for the conduct of its affairs;
appoint a secretary, who need not be a member of the
Management Committee, to keep its records and
otherwise assist the Management Committee in the
performance of its duties; keep a record of all its
proceedings and acts and keep all books of account,
records and other data as may be necessary for the
proper administration of the Plan,
(iii.) determine from the records of the Company and its
Affiliates the compensation, service records, status
and other facts regarding Participants and other
employees,
(iv.) cause to be compiled at least annually, from the
records of the Management Committee and the reports
and accountings of the Company and its Affiliates, a
report or accounting of the status of the Plan and
the Deferral Accounts of the Participants, and make
it available to each Participant who shall have the
right to examine that part of such report or
accounting (or a true and correct copy of such part)
which sets forth the Participant's benefits,
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(v.) prescribe forms to be used for applications for
participation, benefits, notifications, etc., as may
be required in the administration of the Plan,
(vi.) set up such rules as are deemed necessary to carry
out the terms of this Plan,
(vii.) resolve all questions of administration of the Plan
not specifically referred to in this Section,
(viii.) delegate or redelegate to one or more persons,
jointly or severally, and whether or not such persons
are members of the Management Committee or employees
of the Company, such functions assigned to the
Management Committee hereunder as it may from time to
time deem advisable, and
(ix.) perform all other acts reasonably necessary for
administering the Plan and carrying out the
provisions of this Plan and performing the duties
imposed by the Plan on it.
(d.) MAJORITY DECISIONS. If there shall at any time be three (3) or
more members of the Management Committee serving hereunder who
are qualified to perform a particular act, the same may be
performed, on behalf of all, by a majority of those qualified,
with or without the concurrence of the minority. No person who
failed to join or concur in such act shall be held liable for
the consequences thereof, except to the extent that liability
is imposed under ERISA.
11.2. CONFLICT OF INTEREST. If any officer or employee of the Company or an
Affiliate, any member of the Committee, or any member of the Management
Committee to whom authority has been delegated or redelegated hereunder shall
also be a Participant or Beneficiary in the Plan, the individual shall have no
authority as such officer, employee, Committee or Management Committee member
with respect to any matter specially affecting his or her individual interest
hereunder (as distinguished from the interests of all Participants and
Beneficiaries or a broad class of Participants and Beneficiaries), all such
authority being reserved exclusively to the other officers, employees, Committee
or Management Committee members as the case may be, to the exclusion of such
Participant or Beneficiary, and such Participant or Beneficiary shall act only
in his or her individual capacity in connection with any such matter.
11.3. DUAL CAPACITY. Individuals, firms, corporations or partnerships identified
herein or delegated or allocated authority or responsibility hereunder may serve
in more than one fiduciary capacity.
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11.4. ADMINISTRATOR. The Company shall be the administrator for purposes of
section 3(16)(A) of ERISA.
11.5. NAMED FIDUCIARIES. The Chief Executive Officer, the Committee and the
Management Committee shall be named fiduciaries for the purpose of section
402(a) of ERISA.
11.6. SERVICE OF PROCESS. In the absence of any designation to the contrary by
the Company, the Secretary of the Company is designated as the appropriate and
exclusive agent for the receipt of service of process directed to the Plan in
any legal proceeding, including arbitration, involving the Plan.
11.7. ADMINISTRATIVE EXPENSES. The reasonable expenses of administering the Plan
shall be payable by the Company.
SECTION 12
AMENDMENT AND TERMINATION
The Company expects the Plan to be permanent but since future conditions
affecting the Company cannot be anticipated or foreseen, the Company reserves
the right to amend, modify or terminate the Plan at any time by action of the
Committee.
SECTION 13
LIFE INSURANCE CONTRACT
If the Company elects to purchase one or more life insurance contracts to
provide it with funds to make payments under the Plan, the Company shall at all
times be the sole and complete owner and Beneficiary of such contract(s), and
shall have the unrestricted right to use all amounts and exercise all options
and privileges under such contract(s) without the knowledge or consent of any
Participant or Beneficiary or any other person; neither Participant, Beneficiary
nor any other person shall have any right, title or interest whatsoever in or to
any such contract(s).
SECTION 14
MERGER, CONSOLIDATION OR ACQUISITION
In the event of a merger, consolidation or acquisition in which the Company is
not the surviving corporation, unless the successor or acquiring corporation
shall elect to continue and carry on this Plan, all Deferral Accounts shall
become immediately payable in full, notwithstanding any other provision of this
Plan to the contrary.
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SECTION 15
NO VESTED RIGHTS
The Plan and the elections exercisable hereunder shall not be deemed or
construed to be a written contract of employment between any Participant and the
Company or any of its Affiliates, nor shall any provision of the Plan restrict
the right of the Company or any of its Affiliates to discharge any Participant,
nor shall any provision of the Plan in any way whatsoever grant to any
Participant the right to receive any scheduled compensation, bonus, or other
payment of any nature whatsoever.
SECTION 16
APPLICABLE LAW
This Plan shall be construed and this Plan shall be administered to create an
unfunded plan providing deferred compensation to a select group of management or
highly compensated employees so that it is exempt from the requirements of Parts
2, 3 and 4 of Title I of ERISA and qualifies for a form of simplified,
alternative compliance with the reporting and disclosure requirements of Part 1
of Title I of ERISA. Any reference in this Plan to a statute or regulation shall
be considered also to mean and refer to any subsequent amendment or replacement
of that statute or regulation. This Plan has been executed and delivered in the
State of Minnesota and has been drawn in conformity to the laws of that State
and shall be construed and enforced in accordance with the laws of the State of
Minnesota.
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