CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC
SEVERANCE PAY PLAN AND SUMMARY PLAN DESCRIPTION
In order to recognize and encourage the continued employment of
employees of Campo Electronics, Appliances and Computers, Inc (the
"Company"), and to alleviate concerns about a possible loss of employment
upon a change of control (as defined below) of the Company, the Company has
adopted a Severance Pay Plan (the "Plan") having the following terms and
conditions. This document also constitutes the Plan's Summary Plan
Description, as described in Section 102 of the Employee Retirement Income
Security Act of 1974 ("ERISA").
ARTICLE I
DEFINITIONS
1.1 Company Defined. As used in this Plan, "Company" shall mean the
Company as defined above and any successor to or assignee of (whether
direct or indirect, by purchase, merger, consolidation or otherwise) all or
substantially all of the assets or business of the Company.
1.2 Change of Control Defined. "Change of Control" shall mean:
(a) the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934 (the "Exchange Act") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of more than
25% of the outstanding shares of the Company's Common Stock, $.10 par
value per share (the "Common Stock"); provided, however, that for
purposes of this subsection (a), the following acquisitions shall not
constitute a Change of Control:
(i) any acquisition of Common Stock directly from the
Company,
(ii) any acquisition of Common Stock by the Company,
(iii) any acquisition of Common Stock by any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company, or
(iv) any acquisition of Common Stock by any corporation
pursuant to a transaction that complies with clauses (i), (ii)
and (iii) of subsection (c) of this Section 1.2; or
(b) individuals who, as of the date this Plan is executed (the
"Plan Effective Date") constitute the Board (the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent
to the Plan Effective Date whose election, or nomination for election
by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered a member of the Incumbent Board, unless such individual's
initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the Incumbent Board;
or
(c) consummation of a reorganization, merger or consolidation, or
sale or other disposition of all of substantially all of the assets of
the Company (a "Business Combination"), in each case, unless,
following such Business Combination,
(i) all or substantially all of the individuals and entities
who were the beneficial owners of the Company's outstanding
common stock and the Company's voting securities entitled to vote
generally in the election of directors immediately prior to such
Business Combination have direct or indirect beneficial
ownership, respectively, of more than 50% of the then outstanding
shares of common stock, and more than 50% of the combined voting
power of the then outstanding voting securities entitled to vote
generally in the election of directors, of the corporation
resulting from such Business Combination (which, for purposes of
this paragraph (i) and paragraphs (ii) and (iii), shall include a
corporation which as a result of such transaction controls the
Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries), and
(ii) except to the extent that such ownership existed prior
to the Business Combination, no person (excluding any corporation
resulting from such Business Combination or any employee benefit
plan or related trust of the Company or such corporation
resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of the then outstanding
shares of common stock of the corporation resulting from such
Business Combination or 20% or more of the combined voting power
of the then outstanding voting securities of such corporation,
and
(iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
(d) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
1.3 Affiliate Defined. "Affiliate" or "affiliated companies" shall
mean any company controlled by, controlling, or under common control with,
the Company.
1.4 Cause Defined. "Cause" shall mean:
(a) the willful and continued failure of the Participant to
perform substantially the Participant's duties with the Company
or its affiliates (other than any such failure resulting from
incapacity due to physical or mental illness), after a written
demand for substantial performance is delivered to the
Participant by the Board of the Company which specifically
identifies the manner in which the Board believes that the
Participant has not substantially performed the Participant's
duties, or
(b) the willful engaging by the Participant in illegal
conduct or gross misconduct.
For purposes of this provision, no act or failure to act, on the part of
the Participant, shall be considered "willful" unless it is done, or
omitted to be done, by the Participant in bad faith or without reasonable
belief that the Participant's action or omission was in the best interests
of the Company or its Affiliates. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or upon
the instructions of a senior officer of the Company or based upon the
advice of counsel for the Company or its Affiliates shall be conclusively
presumed to be done, or omitted to be done, by the Participant in good
faith and in the best interests of the Company or its Affiliates. The
cessation of employment of the Participant shall not be deemed to be for
Cause unless and until there shall have been delivered to the Participant a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting of the
Board called and held for such purpose (after reasonable notice is provided
to the Participant and the Participant is given an opportunity, together
with counsel, to be heard before the Board), finding that, in the good
faith opinion of the Board, the Participant is guilty of the conduct
described in subparagraph (a) or (b) above, and specifying the particulars
thereof in detail.
1.5 Disability Defined. "Disability" shall mean a condition that
would entitle the Participant to receive benefits under the Company's long-
term disability insurance policy in effect at the time either because he is
Totally Disabled or Partially Disabled, as such terms are defined in the
Company's policy in effect as of the Plan Effective Date or as similar
terms are defined in any successor policy. If the Company has no long-term
disability plan in effect, "Disability" shall occur if (a) the Participant
is rendered incapable because of physical or mental illness of
satisfactorily discharging his duties and responsibilities to the Company
for a period of 90 consecutive days, (b) a duly qualified physician chosen
by the Company and acceptable to the Participant or his legal
representatives so certifies in writing, and (c) the Board determines that
the Participant has become disabled.
1.6 Good Reason Defined. "Good Reason" shall mean:
(a) Any failure of the Company or its Affiliates to provide the
Participant with an executive level position, with authority, duties
and responsibilities and at a salary level, that is reasonably
similar in all material respects with the most significant of those
held, exercised and assigned at any time during the 120-day period
immediately preceding the Change of Control.
(b) The assignment to the Participant of any duties inconsistent
in any material respect with Participant's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities or any other action that results in a diminution in
such position, authority, duties or responsibilities, excluding for
this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith that is remedied within 10 days after receipt of
written notice thereof from the Participant to the Company;
(c) Any failure by the Company or its Affiliates to comply with
any of the provisions of this Plan, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith that
is remedied within 10 days after receipt of written notice thereof
from the Participant to the Company;
(d) The Company or its Affiliates requiring Participant to be
based at any office or location that is located more than [75] miles
from the location where the Participant was employed at the time of
the Change of Control; unless any such transfer would involve a
promotion at an increased salary with the Company paying for all
relocation costs of the Participant;
(e) Any purported termination of the Participant's employment
otherwise than as expressly permitted by this Plan; or
(f) Any failure by the Company to comply with and satisfy
Sections 3.1(a) and (b) of this Plan.
1.7 Participant Defined. "Participant" shall mean any executive
officer of the Company or a subsidiary who is designated by the
Compensation Committee of the Board of Directors of the Company as a
participant in the Plan.
ARTICLE II
CHANGE OF CONTROL BENEFIT
2.1 Obligations upon Termination after a Change of Control.
(a) Termination by Company for Reasons other than Death,
Disability or Cause or by Participant for Good Reason. If a Change of
Control occurs on or before December 31, 2000 at a time that the
Participant continues to be employed by the Company or a subsidiary,
and within one year after the Change of Control the Company terminates
the Participant's employment other than for Cause, death or
Disability, or the Participant terminates employment for Good Reason,
(i) the Company shall pay to the Participant in a lump sum
in cash within 30 days of the date of termination an amount equal
to six times the highest monthly base salary paid or payable
including any base salary which has been earned but deferred by
the Participant, by the Company and its affiliated companies in
respect of the 12-month period immediately preceeding the month
in which the Change of Control occurs ("Base Salary").
(ii) for a period of six months following the date of
termination of employment (the "Continuation Period"), the
Company shall at its expense continue on behalf of the
Participant and his dependents and beneficiaries the life
insurance, disability, medical, dental and hospitalization
benefits provided (x) to the Participant at any time during the
90-day period prior to the Change in Control or at any time
thereafter or (y) to other similarly situated executives who
continue in the employ of the Company during the Continuation
Period. The coverage and benefits (including deductibles and
costs) provided in this Section 2.1(a)(ii) during the
Continuation Period shall be no less favorable to the Participant
and his dependents and beneficiaries, than the most favorable of
such coverages and benefits during any of the periods referred to
in clauses (x) or (y) above. The Company's obligation hereunder
with respect to the foregoing benefits shall be limited to the
extent that the Participant obtains any such benefits pursuant to
a subsequent employer's benefit plans, in which case the Company
may reduce the coverage of any benefits it is required to provide
the Participant hereunder as long as the aggregate coverages and
benefits of the combined benefit plans is no less favorable to
the Participant than the coverages and benefits required to be
provided hereunder. The coverage during the Continuation Period
will run concurrently with the coverage provided under the
Consolidated Omnibus Budget Reconciliation Act; and
(iii) the Participant shall immediately become fully (100%)
vested in his benefit under each supplemental or excess
retirement plan of the Company in which the Participant was a
participant.
(b) Death. If, within six months after a Change of Control, the
Participant's status as an employee is terminated by reason of the
Participant's death, there shall be no further obligation under this
Plan to the Participant's legal representatives (other than those
already accrued to the Participant), other than the obligation to make
any payments due pursuant to employee benefit plans maintained by the
Company or its affiliated companies.
(c) Disability. If, within six months after a Change of Control,
Participant's status as an employee is terminated by reason of
Participant's Disability, there shall be no further obligation under
this Plan to the Participant (other than those already accrued to the
Participant), other than the obligation to make any payments due
pursuant to employee benefit plans maintained by the Company or its
affiliated companies.
(d) Cause. If, within six months after a Change of Control, the
Participant's status as an employee is terminated by the Company for
Cause, there shall be no further obligation under this Plan to the
Participant other than for obligations imposed by law and obligations
imposed pursuant to any employee benefit plan maintained by the
Company or its affiliated companies.
(e) Voluntary Termination. If, within six months after a Change
of Control, the Participant voluntarily terminates his employment with
the Company other than for Good Reason, there shall be no further
obligation under this Plan to the Participant other than for
obligations imposed by law and obligations imposed pursuant to any
employee benefit plan maintained by the Company or its affiliated
companies.
2.2 Accrued Obligations and Other Benefits. It is the intent of this
Plan that upon termination of employment for any reason the Participant be
entitled to receive promptly, and in addition to any other benefits
specifically provided, (a) the Participant's Base Salary through the date
of termination to the extent not theretofore paid, (b) any accrued vacation
pay, to the extent not theretofore paid, and (c) any other amounts or
benefits required to be paid or provided or which the Participant is
entitled to receive under any plan, program, policy practice or agreement
of the Company.
2.3 Stock Options. The foregoing benefits are intended to be in
addition to the value of any options to acquire Common Stock of the Company
the exercisability of which is accelerated pursuant to the terms of any
stock option, incentive or other similar plan heretofore or hereafter
adopted by the Company.
2.4 Legal Fees. The Company agrees to pay as incurred, to the full
extent permitted by law and to the extent that legal fees and expenses are
not recoverable under the provisions of the Employee Retirement Income
Security Act of 1974, all legal fees and expenses which the Participant may
reasonably incur as a result of any contest (regardless of the outcome
thereof) by the Company, the Participant or others of the validity or
enforceability of, or liability under, any provision of this Plan
(including as a result of any contest by the Participant about the amount
or timing of any payment pursuant to this Plan.)
2.5 Set-Off; Mitigation. After a Change of Control, the Company's
and its Affiliates' obligations to make the payments provided for in this
Plan and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company or its Affiliates may have against the
Participant or others; except that to the extent the Participant accepts
other employment in connection with which he is provided health insurance
benefits, the Company shall only be required to provide health insurance
benefits to the extent the benefits provided by the Participant's employer
are less favorable than the benefits to which he would otherwise be
entitled hereunder. It is the intent of this Plan that in no event shall
the Participant be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Participant under
any of the provisions of this Plan.
2.6 Outplacement Assistance. Upon any termination of employment of
the Participant other than for Cause within six months following a Change
of Control the Company shall provide to the Participant outplacement
assistance by a reputable firm specializing in such services for the six
month period beginning with the termination of employment.
2.7 Withholding. The Participant agrees that the Company has the
right to withhold, from the amounts payable pursuant to this Plan, all
amounts required to be withheld under applicable income and/or employment
tax laws, or as otherwise stated in documents granting rights that are
affected by this Plan.
ARTICLE III
MISCELLANEOUS
3.1 Successors. (a) The Company shall require any successor to or
assignee of (whether direct or indirect, by purchase, merger, consolidation
or otherwise) all or substantially all of the assets or businesses of the
Company (i) to assume unconditionally and expressly this Plan and (ii) to
agree to perform or to cause to be performed all of the obligations under
this Plan in the same manner and to the same extent as would have been
required of the Company had no assignment or succession occurred, such
assumption to be set forth in a writing reasonably satisfactory to the
Participant.
(b) The Company shall also require all entities that control or
that after the transaction will control (directly or indirectly) the
Company or any such successor or assignee to agree to cause to be performed
all of the obligations under this Plan, such agreement to be set forth in a
writing reasonably satisfactory to the Participant.
3.2 Funding. The Plan is funded solely through general assets of the
Company that employs the Participant and no employee contributions are
taken nor are any funds held in trust.
3.3 Plan Amendment or Termination. The Company reserves the right to
amend or terminate this Plan at any time and without advance notice. An
amendment shall be made in writing, executed by an officer of the Company,
as authorized by the Company's Board of Directors. The Board of Directors
may delegate its authority under this Section 3.3 to the Compensation
Committee of the Board of Directors. No benefits will be paid to anyone
whose employment is terminated after the Plan is terminated or amended to
exclude that Participant.
3.4 Applicable Laws. The Plan shall be governed by the laws of the
State of Louisiana to the extent not preempted by ERISA.
3.5 Administration of the Plan. The Plan shall be administered by
Campo Electronics, Appliances and Computers, Inc (the "Plan
Administrator"). The Plan Administrator's address is: 107 Northpark Blvd.,
Covington, LA 70433. The Plan Administrator shall have the exclusive
right to interpret the Plan and all such interpretation shall be binding on
all affected parties. The Campo Electronics, Appliances and Computers, Inc
Severance Pay Plan Document is a legal document that controls the
operation of the Plan. Its provisions cover all situations relating to
benefits and its provision will be final authority.
3.6 Company's Reservation of Rights. A Participant serves at the
pleasure of the Board and the Company has the right at any time to
terminate the Participant's status as an employee of the Company, or to
change or diminish his status during the Employment Term, subject to the
rights of the Participant to claim the benefits conferred by the Plan.
3.7 Type of Plan. This Plan is intended to be a severance welfare
benefit plan under the Employee Retirement Income Security Act of 1974
("ERISA"). In no event shall benefits payable to any Participant under
this Plan exceed twice the Participant's "Annual Compensation" (as defined
in ERISA regulation Section 2510.3-2(b)(2)) during the year immediately
preceding the year of termination.
ARTICLE IV
CLAIMS FOR BENEFITS
4.1 Claims Procedure. Claims for benefits may be made to the Plan
Administrator at the above address. Payments of the amounts provided in
this Plan shall ordinarily be made without the need for demand at the
discretion of the Company. Nevertheless, a Participant who claims
entitlement to a benefit can file a written claim for benefits with the
Plan Administrator within 90 days after the Participant's employment is
terminated. The Plan Administrator shall accept or reject the claim within
30 days of its receipt. If the claim is denied, the Plan Administrator
shall give the reason for denial in a written notice calculated to be
understood by the claimant, referring to the Plan provisions that provide
the basis for the denial. If any additional information or material is
necessary to perfect the claim, the Plan Administrator shall identify these
items and explain why such additional material is necessary. If the Plan
Administrator neither accepts nor rejects the claim within 30 days, the
claim shall be deemed to be denied.
4.2 Claim Denial and Appeal. Upon denial of the claim, the claimant
may file a written request for review of the denied claim to the Plan
Administrator within 60 days of the denial. The claimant shall have the
opportunity to be represented by counsel and may request to be heard at a
hearing. The claimant shall have the opportunity to review the pertinent
documents and the opportunity to submit written reasons opposing the
denial. The decision upon the appeal will be made within 60 days of
receipt of the requested review unless special circumstances (such as a
need to hold a hearing) require an extension of time for processing, in
which case a decision will be made as soon as possible, but no later than
120 days after receipt of a request for review. If such extension of time
for review is required, because of special circumstances, written notice of
the extension will be furnished to the claimant prior to the commencement
of the extension. If the appeal is denied, the denial shall be in writing.
ARTICLE V
ERISA RIGHTS
On Labor Day of 1974 a new law was enacted to protect the interests of
workers in pension and welfare benefits connected with their jobs. Its
title is "Employee Retirement Income Security Act of 1974" but it is often
referred to by its initials - ERISA. Some of the benefits provided by the
Plan may be subject to ERISA. Therefore, each Participant under the Plan
has certain rights and protection under ERISA.
ERISA provides that all Plan Participants shall be entitled to:
i. Examine, without charge, at the Plan Administrator's office
and at other specified locations, such as work sites, all
Plan documents, including any Plan documents filed by the
Plan Administrator with the U.S. Department of Labor.
ii. Obtain copies of all Plan documents and other Plan
information upon written request to the Plan Administrator.
The Plan Administrator may make a reasonable charge for the
copies.
In addition to creating rights for Participants, ERISA imposes duties upon
the people who are responsible for the operation of the Plan. The people
who operate the Plan, called "fiduciaries" of the Plan, have a duty to do
so prudently and in the interest of the Plan Participants. No one,
including the Company or any other person, may terminate a Participant's
employment or otherwise discriminate against a Participant in any way to
prevent the Participant from obtaining a welfare benefit or exercising his
or her rights under ERISA. If a claim for a benefit is denied in whole or
in part, the claimant must receive a written explanation of the reason for
the denial. A claimant has the right to have the Plan Administrator review
and reconsider the claim. Under ERISA, there are steps a Participant can
take to enforce the above rights. For instance, if a Participant requests
certain materials from the Plan Administrator and does not receive them
within 30 days, he or she may file suit in a federal court. In such a
case, the court may require the Plan Administrator to provide the materials
and pay the Participant up to $100 a day until the Participant receives the
materials, unless the materials were not sent because of reasons beyond the
control of the Plan Administrator. If a claim for benefits is denied or
ignored, in whole or in part, the claimant may file suit in a state or
federal court. If it should happen that a Participant is discriminated
against for asserting his or her rights, he or she may seek assistance from
the U.S. Department of Labor, or may file suit in a federal court. The
court will decide who should pay court costs and legal fees. If the
Participant is successful, the court may order the person sued to pay these
costs and fees. If the Participant loses, the court may order the
Participant to pay these costs and fees, for example, if it finds that the
claim is frivolous. If a Participant has any questions about the Plan, he
or she should contact the Director of Human Resources at the above address.
If a Participant has any questions about this paragraph or about his or her
rights under ERISA, he or she should contact the nearest Area Office of the
U.S. Labor-Management Services Administration, Department of Labor.
This Plan was executed in Covington, Louisiana, this 4th day of
October, 1996, effective as of August 29, 1996.
WITNESSES: CAMPO ELECTRONICS, APPLIANCES
AND COMPUTERS, INC
/s/ Barbara Treuting Casteix By: /s/ Mervin L. Trail
____________________________ _______________________________
Name: Mervin L. Trail
Title: Chairman, Compensation Committee
/s/ Ron Forman
____________________________