HARVEST STATES COOPERATIVES
DEFERRED COMPENSATION PLAN
ARTICLE I
GENERAL
SEC. 1.1 NAME OF PLAN. The name of this plan is "Harvest States
Cooperatives Deferred Compensation Plan" (referred to hereinafter as the
"Plan").
SEC. 1.2 PURPOSE. The Plan has been established to provide additional
future compensation to certain highly compensated employees through voluntary
deferrals of compensation so that such employees may be retained and their
productive efforts encouraged.
SEC. 1.3 EFFECTIVE DATE. The "Effective Date" of the Plan, the date as
of which the Plan was established, is April 1, 1994.
SEC. 1.4 HARVEST STATES. For purposes of this Plan, "Harvest States"
means Harvest States Cooperatives, a Minnesota corporation, and any Successor
Employer thereof.
SEC. 1.5 CONSTRUCTION AND APPLICABLE LAW. The Plan is intended to be an
unfunded plan maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees,
within the meaning of section 201(2), 301(a)(3) and 401(a)(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). The Plan shall be
administered and construed consistent with said intent. This Plan also shall be
governed and construed in accordance with the laws of the State of Minnesota as
applied to contracts executed and to be wholly performed within said state to
the extent that such laws are not preempted by the laws of the United States of
America.
ARTICLE II
DEFINITIONS
SEC. 2.1 ACCOUNT. An "Account" shall be established for each eligible
Participant reflecting the deferred compensation owed to the Participant or the
Participant's Beneficiary under the terms of this Plan.
SEC. 2.2 BENEFICIARY. "Beneficiary" means the person or persons
designated as such pursuant to the provisions of Sec. 5.3.
SEC. 2.3 PARTICIPANT. A "Participant" is an individual described as
such in Article III.
SEC. 2.4 PLAN YEAR. A "Plan Year" is the 12-consecutive-month period
commencing on each January 1 and ending December 31. However, the first Plan
Year commences on April 1, 1994 and ends on December 31, 1994.
SEC. 2.5 QUALIFIED EMPLOYEE. "Qualified Employee" means any select
management or highly compensated employee of Harvest States who is designated as
eligible to participate in this Plan on Exhibit A. The President of Harvest
States may amend Exhibit A to add or delete eligible employees at any time;
provided, however, that all such changes shall apply prospectively only.
SEC. 2.6 SUCCESSOR EMPLOYER. A "Successor Employer" is any entity that
succeeds to the business of Harvest States through merger, consolidation,
acquisition of all or substantially all of its assets, or any other means and
which elects before or within a reasonable time after such succession, by
appropriate action evidenced in writing, to continue the Plan.
SEC. 2.7 TERMINATION OF EMPLOYMENT. The "Termination of Employment" of
an employee for purposes of the Plan shall be deemed to occur upon the
employee's resignation, discharge, retirement, death, failure to return to
active work at the end of an authorized leave of absence or the authorized
extension or extensions thereof, failure to return to work when duly called
following a temporary layoff, or upon the happening of any other event or
circumstance which, under the policy of Harvest States as in effect from time to
time, results in the termination of the employer-employee relationship.
ARTICLE III
PARTICIPATION
SEC. 3.1 ELIGIBILITY FOR PARTICIPATION. An employee of Harvest States
shall become a Participant in the Plan on the earliest date (on or after the
Effective Date) on which he or she is a Qualified Employee and has elected to
make contributions under Sec. 4.1. Prior to the time a Qualified Employee
becomes a Participant, the employee shall make the elections required under Sec.
5.1.
SEC. 3.2 DURATION OF PARTICIPATION. A Participant shall continue to be
such until the earliest of:
(a) The Participant's Termination of Employment.
(b) The date on which the Participant ceases to be a Qualified
Employee.
(c) The date the Participant fails to meet the requirements of
any regulations which may be issued by the Department of Labor that
define the phrase "select group of management or highly compensated
employees" under ERISA.
SEC. 3.3 NO GUARANTEE OF EMPLOYMENT. Participation in the Plan does not
constitute a guarantee or contract of employment with Harvest States. Such
participation shall in no way interfere with any rights Harvest States would
have in the absence of such participation to determine the duration of the
employee's employment with Harvest States.
ARTICLE IV
DEFERRED COMPENSATION AND ACCOUNTS
SEC. 4.1 ELECTION OF DEFERRED COMPENSATION. Prior to the first day of
any Plan Year beginning on or after the Effective Date, a Participant may elect
to have an amount of deferred compensation credited to the Participant's Account
for the Plan Year. The compensation actually earned during the Plan Year by a
Participant who elects deferred compensation under this section shall be reduced
by the percentage or amount so elected.
(a) Elections for the Plan Year commencing on April 1, 1994
must be filed with Harvest States by March 25, 1994. Elections for
subsequent Plan Years must be filed by the preceding December 15.
However, if an individual becomes a Qualified Employee during a Plan
Year, an election for that year may be filed within 30 days following
the date the individual became a Qualified Employee and shall apply to
compensation earned following the date the election is filed.
(b) A Participant may elect to have either or both of the
following types of deferrals made from the Participant's compensation:
(1) The Participant may elect to contribute a
percentage of each payment of base compensation. The
percentage may not exceed 30%, and must be expected to result
in annual contributions totaling at least $1000.
(2) The Participant may elect to contribute either a
percentage or a specific dollar amount (not less than $1000)
of any bonus or similar incentive payment which may become
payable during the Plan Year. If a specific dollar amount is
elected and that amount exceeds the amount of bonuses payable
on or prior to a particular date during the year, 100% of the
bonus will be contributed under this Plan. If a percentage is
elected, the contribution will not be less than the smaller of
$1000 or 100% of the bonus payable.
(c) A Participant may elect to change the amount to be
contributed, or discontinue contributions, in a future Plan Year by
filing an approved form with Harvest States on or before the December
15th preceding that Plan Year. If no such election is filed, the
election in effect during the previous Plan Year will continue in
effect during the next Plan Year. Each election for a Plan Year shall
become irrevocable on the December 15th deadline for that year.
SEC. 4.2 ALLOCATION TO ACCOUNTS. The deferred compensation credited
under the Plan by Harvest States on behalf of a Participant for a Plan Year
shall be allocated to the Account of the Participant as of the date that the
compensation would otherwise have been paid to the Participant in cash.
SEC. 4.3 VALUATION OF ACCOUNTS. As of any date as of which an Account
is to be valued, the value of the Account shall be adjusted to reflect the
effect of additional credits under Sec. 4.1 and any credit for income with
respect to that Account, less any distributions under the Plan with respect to
said Account, since the last date the value of the Account was determined.
Income shall be credited to each Account each Plan Year at an annual rate equal
to 1% over the five-year U. S. Treasury Bond rate as of October 1 of the year
preceding the Plan Year, adjusted as appropriate to reflect contributions to and
distributions from the Account during the Plan Year.
SEC. 4.4 UNSECURED OBLIGATIONS. A Participant's credits in his or her
Account shall be an unsecured obligation of Harvest States to pay the
Participant (or the Participant's Beneficiary, in the event of the Participant's
death) the actual amount of the credits at the time designated in Article V.
Each Participant or Beneficiary is only a general creditor of Harvest States
with respect to his or her Account. Accounts are maintained for recordkeeping
purposes only. Notwithstanding the foregoing, obligations of Harvest States to
pay benefits under this Plan may be satisfied by distributions from a grantor
trust created by Harvest States in its sole discretion for such purpose.
ARTICLE V
DISTRIBUTION OF ACCOUNTS
SEC. 5.1 DISTRIBUTION ON TERMINATION OF EMPLOYMENT OR OTHER EVENT.
Prior to the date an employee becomes a Participant in the Plan, the employee
shall elect a time and method in which the amount credited to the Participant's
Account is to be paid by Harvest States to the Participant. The election shall
be irrevocable as to all contributions credited to an Account and all earnings
on those contributions until the Participant files a subsequent election
changing the time and/or method of payment of future contributions and earnings
on such contributions. The elected time must be a definitely determinable date,
such as the date of the Participant's Termination of Employment or the date the
Participant attains a specified age. The elected method may be either a lump sum
payment or a schedule of installment payments. If payments are to be made in
installments, the Participant's Account shall continue to be revalued prior to
each payment as provided in Sec. 4.3. The amount of the installments during each
Plan Year shall be equal to the balance in the Account on the first day of the
Plan Year divided by the number of years in which installments remain to be
paid. Installment payments by Harvest States to any Participant or Beneficiary
shall cease when the Participant's Account balance is reduced to zero. Harvest
States in its sole discretion may allow a Participant to elect a different time
or method than specified in the preceding sentences of this section, provided
that the payment method is definitely determinable at the time the election is
filed.
SEC. 5.2 DISTRIBUTION ON DEATH. Upon the death of a Participant,
Harvest States shall pay to the Participant's Beneficiary an amount equal to the
entire balance of the Participant's Account. Such payment shall be made in a
single sum payment to the Participant's Beneficiary as soon as administratively
feasible following the Participants's death; provided, however, that if the
Participant has made a written election as to the time and method of
distribution to a Beneficiary, the Account shall instead be distributed in
accordance with said election.
SEC. 5.3 BENEFICIARY DESIGNATION. Each Participant shall have the
right, at any time, to designate any person or persons as Beneficiary or
Beneficiaries to whom payments under this Plan shall be made in the event of the
Participant's death prior to complete distribution of the amount credited to the
Participant's Account. Each Participant shall have the right to change his or
her Beneficiary designation at any time. Each Beneficiary designation shall
become effective only when filed in writing with Harvest States during the
Participant's life on a form prescribed by Harvest States. If a Participant
fails to designate a Beneficiary as provided above, then the Participant's
Beneficiary shall be the Participant's estate.
SEC. 5.4 DISTRIBUTION ON DISABILITY. A Participant's election under
Sec. 5.1 may include a separate election of the time and method of payment of a
Participant's account in the event the Participant incurs a disability which
entitles the Participant to benefits under a long-term disability plan sponsored
by Harvest States which covers the Participant, subject to approval by Harvest
States. In the absence of such a separate election, the Participant's election
under Sec. 5.1 shall control.
SEC. 5.5 DISTRIBUTIONS FOR UNFORESEEABLE EMERGENCY. Notwithstanding any
election under the foregoing sections of this Article V, Harvest States in its
sole discretion may approve a request by a Participant (or by a Beneficiary
following the Participant's death) for a withdrawal from the Participant's
Account due to an unforeseeable emergency. An "unforeseeable emergency" is an
unanticipated emergency that is caused by an event beyond the control of the
Participant or Beneficiary and that would result in severe financial hardship to
the individual if an early withdrawal is not permitted. Any such early
withdrawal approved by Harvest States may not exceed the amount necessary to
meet the emergency.
SEC. 5.6 WITHHOLDING OF TAXES. The benefits payable under this Plan
shall be subject to the deduction of any federal, state, or local income taxes
or other taxes which are required to be withheld from such payments by
applicable laws and regulations.
ARTICLE VI
ADMINISTRATION
SEC. 6.1 ADMINISTRATION BY HARVEST STATES. Harvest States shall
administer the Plan, establish, adopt, or revise such rules and regulations as
it may deem necessary or advisable for the administration of the Plan and
interpret the provisions of the Plan. The interpretations of Harvest States
shall be conclusive.
ARTICLE VII
AMENDMENT AND TERMINATION
SEC. 7.1 AMENDMENT. The President of Harvest States may at any time
amend the Plan in whole or in part for any reason. No amendment shall decrease
the benefits under the Plan which have accrued prior to the date of such
amendment, but an amendment may modify the interest rate under Sec. 4.3 to be
used following the adoption of the amendment, both for future deferrals and for
the balance in each Account on the date the amendment was adopted.
SEC. 7.2 TERMINATION OF PLAN. Harvest States, by action of its
President, may at any time terminate the Plan. After such termination, no
employee of Harvest States shall become a Participant, and no further amounts
shall be credited pursuant to Sec. 4.1 to Accounts of Participants. At the
discretion of Harvest States, the amounts credited to the Accounts of such
Participants may be either (i) distributed to such Participants as soon as
reasonably possible after the date of termination or (ii) distributed in
accordance with Article V.
ARTICLE VIII
MISCELLANEOUS
SEC. 8.1 BENEFITS MAY NOT BE ASSIGNED OR ALIENATED. Neither a
Participant nor any Beneficiary thereof shall have the right to sell, assign,
transfer, encumber or otherwise convey any right to receive any payment
hereunder. No part of the amounts payable hereunder shall be subject to seizure
or sequestration for the payment of any debts or judgments owed by a Participant
or any other person.
SEC. 8.2 HEADINGS. Headings at the beginning of articles and sections
hereof are for convenience of reference, shall not be considered a part of the
text of the Plan, and shall not influence its construction.
SEC. 8.3 CAPITALIZED DEFINITIONS. Capitalized terms used in the Plan
shall have their meaning as defined in the Plan unless the context clearly
indicates to the contrary.
SEC. 8.4 GENDER. Any references to the masculine gender include the
feminine and vice versa.
SEC. 8.5 USE OF COMPOUNDS OF WORD "HERE". Use of the words "hereof",
"herein", "hereunder", or similar compounds of the word "here" shall mean and
refer to the entire Plan unless the context clearly indicates to the contrary.
SEC. 8.6 CONSTRUED AS A WHOLE. The provisions of the Plan shall be
construed as a whole in such manner as to carry out the provisions hereof and
shall not be construed separately without relation to the context.