Exhibit 10.2
LOUISIANA-PACIFIC CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
PAGE
--------
ARTICLE I--PURPOSE; EFFECTIVE DATE.......................................1
ARTICLE II--DEFINITIONS..................................................1
2.1 Account..........................................................1
2.2 Acquiring Person.................................................1
2.3 Beneficiary......................................................2
2.4 Board............................................................2
2.5 Change in Control................................................2
2.6 Committee........................................................3
2.7 Compensation.....................................................3
2.8 Corporation......................................................4
2.9 Deferral Commitment..............................................4
2.10 Deferral Period..................................................4
2.11 Determination Date...............................................4
2.12 Disability.......................................................4
2.13 Early Retirement Date............................................4
2.14 Earnings Index...................................................4
2.15 Elective Deferred Compensation...................................5
2.16 Employee.........................................................5
2.17 Employer.........................................................5
2.18 Employer Plans...................................................5
2.19 Employment.......................................................5
2.20 Financial Hardship...............................................5
2.21 Moody's Plus Index...............................................6
2.22 Moody's Return...................................................6
2.23 Normal Retirement Date...........................................6
2.24 Participant......................................................6
2.25 Participation Agreement..........................................6
2.26 Plan Benefit.....................................................6
2.27 Plus Rate Return.................................................6
2.28 Qualified Plan...................................................6
2.29 Rate of Return...................................................7
2.30 Retirement.......................................................7
2.31 Years of Service.................................................7
ARTICLE III--PARTICIPATION AND DEFERRAL commitments......................7
3.1 Eligibility and Participation....................................7
3.2 Form of Deferral; Minimum Deferral...............................7
3.3 Deferral Commitment; Periods of Deferral.........................8
3.4 Limitation on Deferral...........................................8
3.5 Modification of Deferral Commitment..............................8
3.6 Cessation of Eligibility.........................................8
(i)
TABLE OF CONTENTS
PAGE
--------
ARTICLE IV--DEFERRED COMPENSATION ACCOUNT................................9
4.1 Accounts.........................................................9
4.2 Elective Deferred Compensation...................................9
4.3 Qualified Plan Makeup Credit.....................................9
4.4 Allocation of Elective Deferred Compensation....................10
4.5 Determination of Accounts.......................................10
4.6 Match...........................................................10
4.7 Vesting of Accounts.............................................10
4.8 Statement of Accounts...........................................11
ARTICLE V--PLAN BENEFITS................................................11
5.1 Retirement Benefit..............................................11
5.2 Termination Benefit.............................................11
5.3 Death Benefit...................................................12
5.4 In-Service Withdrawals..........................................12
5.5 Hardship Distributions..........................................12
5.6 Form of Benefit Payment.........................................12
5.7 Small Accounts..................................................13
5.8 Accelerated Distribution........................................13
5.9 Excise Tax and Lost Benefit Makeup..............................13
5.10 Withholding; Payroll Taxes......................................14
5.11 Payment to Guardian.............................................14
ARTICLE VI--BENEFICIARY DESIGNATION.....................................14
6.1 Beneficiary Designation.........................................14
6.2 Changing Beneficiary............................................14
6.3 Community Property..............................................14
6.4 No Beneficiary Designation......................................15
6.5 Effect of Payment...............................................15
ARTICLE VII--ADMINISTRATION.............................................16
7.1 Committee; Duties...............................................16
7.2 Agents..........................................................16
7.3 Binding Effect of Decisions.....................................16
7.4 Indemnity of Committee..........................................16
ARTICLE VIII--CLAIMS PROCEDURE..........................................16
8.1 Claim...........................................................16
8.2 Denial of Claim.................................................16
8.3 Review of Claim.................................................17
8.4 Final Decision..................................................17
(ii)
TABLE OF CONTENTS
PAGE
--------
ARTICLE IX--AMENDMENT AND TERMINATION OF PLAN...........................17
9.1 Amendment.......................................................17
9.2 Employer's Right to Terminate...................................17
ARTICLE X--MISCELLANEOUS................................................18
10.1 Unfunded Plan...................................................18
10.2 Unsecured General Creditor......................................18
10.3 Trust Fund......................................................18
10.4 Nonassignability................................................19
10.5 Not a Contract of Employment....................................19
10.6 Protective Provisions...........................................19
10.7 Terms...........................................................19
10.8 Captions........................................................19
10.9 Governing Law; Arbitration......................................20
10.10 Validity........................................................20
10.11 Notice..........................................................20
10.12 Successors......................................................20
(iii)
LOUISIANA-PACIFIC CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
AMENDED AND RESTATED SEPTEMBER 1, 2000
ARTICLE I--PURPOSE; EFFECTIVE DATE
The purpose of this Executive Deferred Compensation Plan (the "Plan") is
to provide current tax planning opportunities as well as supplemental funds for
retirement or death for selected employees of Louisiana-Pacific Corporation (the
"Corporation"). It is intended that the Plan will aid in attracting and
retaining employees of exceptional ability by providing them with these
benefits. The Plan became effective as of May 1, 1997 and has been amended as of
October 1, 1999 and December 31, 1999 and amended and restated as of January 1,
2000. The Plan is further amended and restated as of September 1, 2000 as set
forth herein.
ARTICLE II--DEFINITIONS
For the purposes of the Plan, the following terms shall have the meanings
indicated unless the context clearly indicates otherwise:
2.1 ACCOUNT
"Account" means a balance as maintained by the Employer in accordance with
Article IV with respect to any deferral of Compensation pursuant to the Plan. A
Participant's Account shall be utilized solely as a device for the determination
and measurement of the amounts to be paid to the Participant pursuant to the
Plan. A Participant's Account shall not constitute or be treated as a trust fund
of any kind.
2.2 ACQUIRING PERSON
"Acquiring Person" means any person or related person or related persons
which constitute a "group" for purposes of Section 13(d) and Rule 13d-5 under
the Securities Exchange Act of 1934 (the "Exchange Act"); provided, however,
that the term Acquiring Person shall not include:
(a) Corporation or any of its Subsidiaries;
(b) Any employee benefit plan or related trust of Corporation or any
of its Subsidiaries;
(c) Any entity holding voting capital stock of Corporation for or
pursuant to the terms of any such employee benefit plan; or
PAGE 1
(d) Any person or group solely because such person or group has
voting power with respect to capital stock of Corporation arising from a
revocable proxy or consent given in response to a public proxy or consent
solicitation made pursuant to the Exchange Act.
2.3 BENEFICIARY
"Beneficiary" means the person, persons or entity entitled under Article
VI to receive any Plan benefits payable after a Participant's death.
2.4 BOARD
"Board" means the Board of Directors of the Corporation.
2.5 CHANGE IN CONTROL
A "Change in Control" shall occur upon:
(a) The acquisition by any Acquiring Person of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of twenty
percent (20%) or more of the combined voting power of the then outstanding
Voting Securities; provided, however, that for purposes of this paragraph
(a), the following acquisitions will not constitute a Change in Control:
(i) Any acquisition directly from Corporation;
(ii) Any acquisition by Corporation;
(iii) Any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by Corporation or any corporation
controlled by Corporation; or
(iv) Any acquisition by any corporation pursuant to a
transaction that complies with clauses (i), (ii), and (iii) of
paragraph (c) of this definition of Change in Control; or
(b) During any period of twelve (12) consecutive calendar months,
individuals who at the beginning of such period constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual who becomes a
director during the period whose election, or nomination for election, by
Corporation's shareholders was approved by a vote of at least a majority
of the directors then constituting the Incumbent Board will be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose 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 Board; or
PAGE 2
(c) Consummation of a reorganization, merger, or consolidation or
sale or other disposition of all or substantially all of the assets of
Corporation (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 Voting Securities outstanding
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than fifty percent (50%) of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of
such transaction owns Corporation or all or substantially all of
Corporation's assets either directly or through one (1) or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the
Voting Securities;
(ii) No Person (excluding any employee benefit plan, or
related trust, of Corporation or such corporation resulting from
such Business Combination) beneficially owns, directly or
indirectly, twenty percent (20%) or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from
such Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the
extent that such ownership existed prior to the Business
Combination; 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 Corporation of any plan or
proposal for the liquidation or dissolution of Corporation.
2.6 COMMITTEE
"Committee" means the Committee appointed by the Chief Executive Officer
of the Corporation to administer the Plan pursuant to Article VII.
COMPENSATION
"Compensation" means cash compensation paid by the Employer as base
salary, bonuses and severance pay paid on account of involuntary termination of
Employment by the Employer without cause, before reduction for amounts deferred
under the Plan and before reduction for amounts deferred under any other plan of
the Employer, tax-qualified or otherwise. Compensation does not include amounts
in connection with any employee stock option plan, compensation paid in stock of
the Employer, sign-on bonuses, severance pay other than that described in this
Section 2.7 above (except for
PAGE 3
accrued vacation), noncash compensation attributable to fringe benefits or
similar items, or compensation for any period during which the employee is not
within the class of employees eligible to participate in the Plan as determined
by the Committee under Article III.
2.8 CORPORATION
"Corporation" means Louisiana-Pacific Corporation, a Delaware corporation,
or any successor to the business thereof.
2.9 DEFERRAL COMMITMENT
"Deferral Commitment" means a Salary Deferral Commitment, a Bonus Deferral
Commitment or a Severance Deferral Commitment made by a Participant pursuant to
Article III and for which a Participation Agreement has been submitted by the
Participant to the Committee.
2.10 DEFERRAL PERIOD
"Deferral Period" means the period over which a Participant has elected to
defer a portion of his or her Compensation. Prior to January 1, 2001, the
Deferral Period shall be one (1) calendar year for all Deferral Commitments,
except that the Committee may, from time to time, designate a Deferral Period of
less than one (1) full calendar year. On and after January 1, 2001, the Deferral
Period shall be one (1) calendar quarter for Salary Deferral, Bonus Deferral and
Severance Deferral Commitments. The Deferral Period may be modified pursuant to
Section 3.5.
2.11 DETERMINATION DATE
"Determination Date" means the last day of each calendar month.
2.12 DISABILITY
"Disability" means a physical or mental condition which, in the opinion of
the Committee, prevents an Employee from satisfactorily performing Employee's
usual duties for Employer. The Committee's decision as to Disability will be
based upon medical reports and/or other evidence satisfactory to the Committee.
2.13 EARLY RETIREMENT DATE
"Early Retirement Date" means the date prior to a Participant's Normal
Retirement Date on which the Participant actually terminates Employment
following the attainment of age fifty-five (55) and completion of five (5) Years
of Service.
2.14 EARNINGS INDEX
"Earnings Index" means a portfolio or fund selected by the Committee from
time to time to be used as an index in calculating Rate of Return. In addition
to portfolios or
PAGE 4
funds selected by the Committee, the Moody's Plus Index shall be available to
Participants as an Earnings Index.
2.15 ELECTIVE DEFERRED COMPENSATION
"Elective Deferred Compensation" means the amount of Compensation that a
Participant elects to defer pursuant to a Deferral Commitment.
2.16 EMPLOYEE
"Employee" shall mean a person, other than an independent contractor, who
is receiving remuneration for services rendered to, or labor performed for, the
Employer (or who would be receiving such remuneration except for an authorized
leave of absence).
2.17 EMPLOYER
"Employer" means the Corporation and any affiliated or subsidiary
corporation of the Corporation which is incorporated under the laws of any state
of the United States.
2.18 EMPLOYER PLANS
"Employer Plans" shall mean any employee benefit plan or contract from
which benefits may be payable to the Participant.
2.19 EMPLOYMENT
"Employment" means a Participant's service with the Employer as an
Employee.
2.20 FINANCIAL HARDSHIP
"Financial Hardship" means severe financial hardship to the Participant
resulting from a sudden and unexpected illness or accident of the Participant or
of a dependent (as defined in Section 152(a) of the Internal Revenue Code) of
the Participant, loss of the Participant's property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant. The circumstances that will
constitute an unforeseeable emergency will depend upon the facts of each case,
but in any case, payment may not be made to the extent that such hardship is or
may be relieved:
(a) Through reimbursement or compensation by insurance or otherwise;
(b) By liquidation of the Participant's assets, to the extent the
liquidation of such assets would not itself cause severe financial
hardship;
(c) By cessation of deferrals under the Plan.
(d) By borrowing from commercial sources on reasonable commercial
terms.
PAGE 5
2.21 MOODY'S PLUS INDEX
"Moody's Plus Index" means the sum of the Moody's Return and the Plus Rate
Return.
2.22 MOODY'S RETURN
"Moody's Return" means a rate of return equal to the monthly equivalent of
the annual yield of the Moody's Average Corporate Bond Yield Index for the
preceding calendar month as published by Moody's Investor Service, Inc. (or any
successor thereto) or, if such index is no longer published, a substantially
similar index selected by the Committee.
2.23 NORMAL RETIREMENT DATE
"Normal Retirement Date" means the first day of the month coinciding with
or next following the date on which the Participant attains age sixty-five (65).
2.24 PARTICIPANT
"Participant" means any individual who is participating or has
participated in the Plan as provided in Article III or has a Qualified Plan
Makeup Credit under Section 4.3.
2.25 PARTICIPATION AGREEMENT
"Participation Agreement" means the agreement submitted by a Participant
to the Committee prior to the beginning of the Deferral Period, with respect to
one or more Deferral Commitments made for such Deferral Period.
2.26 PLAN BENEFIT
"Plan Benefit" means the benefit payable to a Participant as calculated in
Article V.
2.27 PLUS RATE RETURN
"Plus Rate Return" means the monthly equivalent of an annual yield of two
percent (2%).
2.28 QUALIFIED PLAN
"Qualified Plan" means the Louisiana-Pacific Corporation Salaried
Employees' Stock Ownership Trust and any successor thereof. On and after January
1, 2000, "Qualified Plan" shall mean the Louisiana-Pacific Corporation
Retirement Account Plan and the profit-sharing component of the
Louisiana-Pacific Salaried 401(k) and Profit-Sharing Plan. The term "Qualified
Plan" shall also include, for purposes of this Plan and effective as of May 1,
1997, the Louisiana-Pacific Supplemental Benefits Plan.
PAGE 6
2.29 RATE OF RETURN
"Rate of Return" means the amount credited monthly to a Participant's
Account under Article IV. Such rate shall be determined by the Committee based
upon the net performance of the Earnings Indices selected by the Participant
pursuant to Section 4.4.
2.30 RETIREMENT
"Retirement" means severance of Employment on or after the Participant's
Normal Retirement Date or Early Retirement Date.
2.31 YEARS OF SERVICE
"Years of Service" shall have the meaning provided for such term for
vesting purposes under the Qualified Plan, whether or not the Participant
participates in that Plan.
ARTICLE III--PARTICIPATION AND DEFERRAL COMMITMENTs
3.1 ELIGIBILITY AND PARTICIPATION
(a) ELIGIBILITY. Employees eligible to participate in the Plan shall
be those key management employees of the Employer who are designated, from
time to time, by the Committee as eligible to participate in the Plan.
(b) PARTICIPATION. An eligible Employee who elects to participate in
the Plan with respect to any Deferral Period must submit a Participation
Agreement to the Committee prior to the beginning of such Deferral Period.
3.2 FORM OF DEFERRAL; MINIMUM DEFERRAL
A Participant may elect in the Participation Agreement any of the
following Deferral Commitments:
(a) SALARY DEFERRAL COMMITMENT. A Participant may elect to defer any
portion of his or her base salary Compensation earned during a Deferral
Period. The amount to be deferred shall be stated as a percentage of base
salary and may not be less than six hundred dollars ($600) for a Deferral
Period.
(b) BONUS DEFERRAL COMMITMENT. A Participant may elect to defer all
or a portion of his or her bonus Compensation amounts to be paid by the
Employer in a Deferral Period. The amount to be deferred shall be stated
as an even percentage of such bonus and must not be less than six hundred
dollars ($600) for a Deferral Period, unless the Participant also elects
to make a Salary Deferral Commitment for that Deferral Period, in which
case there shall be no minimum Bonus Deferral Commitment.
PAGE 7
(c) SEVERANCE DEFERRAL COMMITMENT. A Participant may elect to defer
all or a portion of his or her severance Compensation amounts that may be
paid by the Employer in a Deferral Period. The amount to be deferred shall
be stated as an even percentage of such severance amount and must not be
less than six hundred dollars ($600).
3.3 DEFERRAL COMMITMENT; PERIODS OF DEFERRAL
A Participant makes a Deferral Commitment by signing and delivering to the
Committee a Participation Agreement prior to the beginning of the applicable
Deferral Period. Effective for Deferral Periods commencing on and after January
1, 2001, a Deferral Commitment may cover:
(a) A single specified Deferral Period (i.e., a specified calendar
quarter);
(b) Two or more consecutive specified Deferral Periods; or
(c) All Deferral Periods commencing with a designated calendar
quarter and continuing until the Participant either revokes or modifies
the Deferral Commitment with respect to future Deferral Periods.
3.4 LIMITATION ON DEFERRAL
A Participant may defer up to one hundred percent (100%) of the
Participant's Compensation. However, the Committee may from time to time impose
another maximum deferral amount or increase the minimum deferral amount under
Section 3.2 by giving written notice to all Participants, provided that no such
changes may affect a Deferral Commitment made prior to the Committee's action.
3.5 MODIFICATION OF DEFERRAL COMMITMENT
A Deferral Commitment shall be irrevocable with respect to any Deferral
Period that has already commenced, except that the Committee may permit a
Participant to reduce the amount to be deferred, or waive the remainder of the
Deferral Commitment, upon a finding that the Participant has suffered a
Financial Hardship. If a Participant ceases receiving Compensation during a
Deferral Period due to Disability, the Deferral Commitment shall cease at that
time.
3.6 CESSATION OF ELIGIBILITY
In the event a Participant ceases to be designated by the Committee as
eligible to participate in the Plan by reason of a change in employment status
or otherwise, no further amounts of his or her Compensation shall be deferred
under a Deferral Commitment after the date of such cessation of eligibility.
PAGE 8
ARTICLE IV--DEFERRED COMPENSATION ACCOUNT
4.1 ACCOUNTS
For recordkeeping purposes only, an Account shall be maintained for each
Participant. Separate subaccounts shall be maintained to the extent necessary to
properly reflect the Participant's selection of Earnings Indices and total
vested or nonvested Account balances. The Account shall be a bookkeeping device
utilized for the sole purpose of determining the benefits payable under the Plan
and shall not constitute a separate fund of assets. The Account balance for all
active Participants on October 1, 1999 shall be the Account credited with the
Moody's Plus Index Rate of Return. However, such Participants shall not be
vested in the Plus Rate Return balance until the Participant is eligible for
Retirement or upon death, Disability, involuntary termination of Employment by
the Employer without cause after August 31, 2000, or termination within
twenty-four (24) months after a Change in Control. Such balance may be
reallocated by the Participant to other Earnings Indices as of October 1, 1999;
provided, however, that Participants whose employment terminated prior to such
date shall not be entitled to have their Account Balances reallocated to any
Earnings Index or Indices other than the aforementioned Moody's index.
4.2 ELECTIVE DEFERRED COMPENSATION
A Participant's Elective Deferred Compensation shall be credited to the
Participant's Account as the corresponding nondeferred portion of the
Compensation becomes or would have become payable. Any withholding of taxes or
other amounts with respect to deferred Compensation that is required by state,
federal, or local law shall be withheld from the Participant's nondeferred
Compensation to the maximum extent possible with any excess being withheld from
the Participant's Account.
4.3 QUALIFIED PLAN MAKEUP CREDIT
The Employer shall credit to each Participant's Account, as of the first
day of each calendar year, a Qualified Plan Makeup Credit ("Makeup"), which
shall be the difference between:
(a) The amount which would have been contributed or credited for the
immediately preceding calendar year to the Qualified Plan for such
Participant if no deferrals had been made under the Plan; and
(b) The amounts actually contributed or credited for such year to
the Qualified Plan for such Participant.
Effective as of December 31, 1997, as to any Employee who is or thereafter
becomes eligible to participate in the Plan (whether or not he or she becomes a
Participant under Article III of the Plan), the amount of such Employee's
account in the Louisiana-Pacific Supplemental Benefits Plan (`SBP"), if any,
shall be transferred to the Plan as a Makeup, in lieu of continuing such account
in the SBP, as of the close of the calendar year in which the Employee becomes
so eligible. Any such Employee who on or after such date would otherwise be
entitled to receive a supplemental benefit credit
PAGE 9
under the SBP shall receive such credit in this Plan as a Makeup, in lieu of
receiving such credit in the SBP. The Makeup under this Section 4.3 shall vest
in accordance with Section 4.7(c).
To the extent that any distribution or withdrawal from the Plan increases
the amount contributed or credited to the Qualified Plan for a Participant as a
result of the addition of any amount of the distribution or withdrawal to the
Compensation of such Participant covered by the Qualified Plan, an amount equal
to such increase under the Qualified Plan shall be deducted from the amount of
any Makeup in such Participant's Account resulting from prior deferrals under
the Plan.
4.4 ALLOCATION OF ELECTIVE DEFERRED COMPENSATION
(a) At the time a Participant completes a Deferral Commitment for a
Deferral Period, the Participant shall also select the Earnings Index or
Indices in which the Participant wishes to have his or her deferrals
deemed invested. The Participant may select any combination of Earnings
Indices as long as at least ten percent (10%), in whole percentages, is
credited to each of the Earnings Indices selected.
(b) A Participant may change the amounts allocated to the Earnings
Indices as of the first day of any month, provided that the Participant
submits a notice of the change to the Committee at least ten (10) business
days before the first day of the month. The change may apply to future
deferrals only or may include current Account balances.
4.5 DETERMINATION OF ACCOUNTS
Each Participant's Account as of each Determination Date shall consist of
the balance of the Participant's Account as of the immediately preceding
Determination Date, plus the Participant's Elective Deferred Compensation
credited during the period, plus any Makeup or Match crediting, plus the
applicable Rate of Return, minus the amount of any distributions made since the
immediately preceding Determination Date.
4.6 MATCH
Each deferral of base salary made by a Participant after October 1, 1999
shall be matched by the Employer at a rate equal to one hundred percent (100%)
of the first seven percent (7%) of base salary deferred during the period. Match
amounts shall be credited to the Participant's Account the same day the
corresponding deferral amount is credited.
4.7 VESTING OF ACCOUNTS
Each Participant shall be vested in the amounts credited to such
Participant's Account and the earnings thereon as follows:
PAGE 10
(a) AMOUNTS DEFERRED. A Participant shall be one hundred percent
(100%) vested at all times in the amount of Compensation elected to be
deferred under this Plan and the earnings thereon.
(b) EMPLOYER MATCHING CONTRIBUTIONS. Employer Matching Contributions
and the earnings thereon shall be one hundred percent (100%) vested after
completion of two (2) Years of Service or upon eligibility for Retirement,
death, Disability, or termination of Employment within twenty-four (24)
months after a Change in Control.
(c) QUALIFIED PLAN MAKEUP CREDITS. Qualified Plan Makeup Credits and
the earnings thereon shall be vested at the same rate as they otherwise
would have vested under the underlying Qualified Plan, except for death,
Disability, or termination of Employment within twenty-four (24) months
after a Change in Control, in which case Participants shall be one hundred
percent (100%) vested in their Makeup balance.
(d) PLUS RATE RETURN. Notwithstanding the provisions of Section
4.7(a), (b) and (c) above, the Plus Rate Return and the earnings thereon
shall vest only upon eligibility for Retirement, death, Disability, or
termination of Employment within twenty-four (24) months after a Change in
Control or upon involuntary termination of Employment by the Employer
without cause. Upon the occurrence of any one of such events, the Plus
Rate Return and the earnings thereon shall be one hundred percent (100%)
vested.
4.8 STATEMENT OF ACCOUNTS
The Committee shall submit to each Participant, within one hundred twenty
(120) days after the close of each calendar year and at such other times as
determined by the Committee, a statement setting forth the balance to the credit
of each Account maintained for the Participant.
ARTICLE V--PLAN BENEFITS
5.1 RETIREMENT BENEFIT
The Employer shall pay a Plan Benefit equal to the Participant's Account
balance in the form selected in Section 5.6 to a Participant who terminates
Employment by reason of Retirement, Disability or within twenty-four (24) months
after a Change in Control or who is terminated by the Employer involuntarily
without cause.
5.2 TERMINATION BENEFIT
Except as may otherwise be provided in Section 5.3, the Employer shall pay
a Plan Benefit equal to the Participant's Account balance in a lump sum, or in
such other forms as determined by the Committee, to a Participant who terminates
Employment for any reason other than those provided for in Section 5.1.
PAGE 11
5.3 DEATH BENEFIT
Upon the death of a Participant, the Employer shall pay to the
Participant's Beneficiary an amount determined as follows:
(a) POST-TERMINATION. If the Participant dies after termination of
Employment, the amount payable shall be equal to the remaining unpaid
balance of the Participant's appropriate Account.
(b) PRE-TERMINATION. If the Participant dies prior to termination of
Employment, the amount payable shall be the Participant's Account balance
in the form elected.
5.4 IN-SERVICE WITHDRAWALS
Participants shall be permitted to elect to withdraw amounts from their
Account subject to the following restrictions:
(a) ELECTION TO WITHDRAW. An election to make an in-service withdrawal
must be made at the same time the Participant enters into a Participation
Agreement for a Deferral Commitment. The date of the in-service withdrawal
cannot be earlier than five (5) years after the date the Deferral Period
begins under the Deferral Commitment. Such election may be modified no
later than the end of the calendar year two (2) calendar years prior to
the calendar year the Participant was scheduled to receive the benefits.
(b) AMOUNT OF WITHDRAWAL. The amount which a Participant can elect to
withdraw with respect to any Deferral Commitment shall be limited to one
hundred percent (100%) of the amount of such Deferral Commitment plus
earnings thereon.
(c) FORM OF IN-SERVICE WITHDRAWAL PAYMENT. The amount elected to be
withdrawn shall be paid in a lump sum unless the Committee approves an
alternative form of payment at the time elected by the Participant in the
Participation Agreement wherein he or she elected the in-service
withdrawal.
5.5 HARDSHIP DISTRIBUTIONS
Upon a finding that a Participant has suffered a Financial Hardship or a
Disability, the Committee may, in its sole discretion, make distributions from
the Participant's vested Account prior to the time specified for payment of
benefits under the Plan. The amount of such distribution shall be limited to the
amount reasonably necessary to meet the Participant's requirements during the
Financial Hardship or Disability.
5.6 FORM OF BENEFIT PAYMENT
(a) If a Participant terminates Employment with the Employer due to
Retirement, death, Disability, involuntary termination by the Employer
without cause or within twenty-four (24) months of a Change in Control,
the Participant's
PAGE 12
Account shall be paid in the form selected by the Participant under his or
her Deferral Commitment or Commitments. Optional forms of payment include
a lump-sum payment, substantially equal annual installments of the Account
amortized over a period of up to fifteen (15) years selected by the
Participant, or any other form of payment made available in the discretion
of the Committee to all Participants. If installment payments are elected,
the Account shall be amortized with an assumed Rate of Return of six
percent (6%) unless the Participant selects, and the Committee approves,
an alternative assumed Rate of Return. As of each January 1, the amount to
be distributed in installment payments for that year shall be determined
by amortizing the Participant's Account balance as of the preceding
December 31 over the remainder of the installment period, using the
assumed Rate of Return which was fixed under the preceding sentence at the
time installment payments were elected.
(b) Payment shall commence as elected by the Participant, which
shall be either within sixty-five (65) days of termination or in the next
January following the Participant's termination.
(c) The Participant may modify the form or timing of benefit payment
as long as such modification is made before the end of the calendar year
two (2) calendar years prior to when the Participant's benefits were
scheduled to commence had the modification not been made.
5.7 SMALL ACCOUNTS
Notwithstanding Section 5.6(a), if a Participant's Account is less than
twenty thousand dollars ($20,000), the Committee shall pay the Participant in a
lump sum.
5.8 ACCELERATED DISTRIBUTION
Notwithstanding any other provision of the Plan, at any time, a
Participant shall be entitled to receive, upon written request to the Committee,
a lump-sum distribution equal to ninety percent (90%) of the vested Account
balance as of the Determination Date immediately preceding the date on which the
Committee receives the written request. The remaining balance shall be forfeited
by the Participant and the Participant will not be allowed to participate in the
Plan in the future. The amount payable under this section shall be paid in a
lump sum within thirty (30) days following the receipt of the notice by the
Committee from the Participant.
5.9 EXCISE TAX AND LOST BENEFIT MAKEUP
If as a result of participating in the Plan the Participant is required to
pay additional excise tax under Section 4999 of the Internal Revenue Code
("IRC"), or receives a smaller benefit from any other Employer Plan as a result
of any IRC Section 280G Golden Parachute limitations, then a makeup amount shall
be payable from the Plan. This amount shall be equal to the amount of Section
4999 excise tax payable and any lost benefit from other Employer Plans due to
IRC Section 280G Golden Parachute limitation, as a result of participation in
the Plan, plus any excise tax or income taxes payable due to this payment. The
Corporation and Participant shall
PAGE 13
cooperate in good faith in making such determination and in providing the
necessary information for this purpose.
5.10 WITHHOLDING; PAYROLL TAXES
The Employer shall withhold from payments made hereunder any taxes
required to be withheld from such payments under federal, state or local law.
However, a Beneficiary may elect not to have withholding for federal income tax
pursuant to Section 3405(a)(2) of Internal Revenue Code, or any successor
provision thereto.
5.11 PAYMENT TO GUARDIAN
If a Plan benefit is payable to a minor or a person declared incompetent
or to a person incapable of handling the disposition of his or her property, the
Committee may direct payment of such Plan Benefit to the guardian, legal
representative, or person having the care and custody of such minor,
incompetent, or person. The Committee may require proof of incompetency,
minority, incapacity or guardianship as it may deem appropriate prior to
distribution of the Plan Benefit. Such distribution shall completely discharge
the Committee from all liability with respect to such benefit.
ARTICLE VI--BENEFICIARY DESIGNATION
6.1 BENEFICIARY DESIGNATION
Subject to Section 6.3, each Participant shall have the right, at any
time, to designate one or more persons or an entity as Beneficiary (both primary
as well as secondary) to whom benefits under the Plan shall be paid in the event
of Participant's death prior to complete distribution of the Participant's
Account. Each Beneficiary designation shall be in a written form prescribed by
the Committee and shall be effective only when filed with the Committee during
the Participant's lifetime.
6.2 CHANGING BENEFICIARY
Subject to Section 6.3, any Beneficiary designation may be changed by a
Participant without the consent of the previously named Beneficiary by the
filing of a new designation with the Committee. The filing of a new designation
shall cancel all designations previously filed. If a Participant's Compensation
is community property, any Beneficiary designation shall be valid or effective
only as permitted by applicable law.
6.3 COMMUNITY PROPERTY
If the Participant resides in a community property state, the following
rules shall apply:
(a) Designation by a married Participant of a Beneficiary other than
the Participant's spouse shall not be effective unless the spouse executes
a written
PAGE 14
consent that acknowledges the effect of the designation, or it is
established the consent cannot be obtained because the spouse cannot be
located.
(b) A married Participant's Beneficiary designation may be changed
by a Participant with the consent of the Participant's spouse as provided
for in Section 6.3(a) by the filing of a new designation with the
Committee.
(c) If the Participant's marital status changes after the
Participant has designated a Beneficiary, the following shall apply:
(i) If the Participant is married at the time of death but was
unmarried when the designation was made, the designation shall be
void unless the spouse has consented to it in the manner prescribed
in Section 6.3(a).
(ii) If the Participant is unmarried at the time of death but
was married when the designation was made:
(A) The designation shall be void if the spouse was
named as Beneficiary unless Participant had submitted a change
of beneficiary listing the former spouse as the beneficiary.
(B) The designation shall remain valid if a nonspouse
Beneficiary was named.
(iii) If the Participant was married when the designation was
made and is married to a different spouse at death, the designation
shall be void unless the new spouse has consented to it in the
manner prescribed above.
6.4 NO BENEFICIARY DESIGNATION
In the absence of an effective Beneficiary Designation, or if all
designated Beneficiaries predecease the Participant or die prior to complete
distribution of the Participant's benefits, then the Participant's designated
Beneficiary shall be deemed to be the person in the first of the following
classes in which there is a survivor:
(a) the surviving spouse;
(b) the Participant's children, except that if any of the children
predeceases the Participant but leaves issue surviving, then such issue
shall take by right of representation the share the parent would have
taken if living;
(c) the Participant's estate.
6.5 EFFECT OF PAYMENT
The payment to the deemed Beneficiary shall completely discharge
Employer's obligations under the Plan.
PAGE 15
ARTICLE VII--ADMINISTRATION
7.1 COMMITTEE; DUTIES
The Plan shall be administered by the Committee, which shall consist of
not less than three (3) persons appointed by the Chief Executive Officer of the
Corporation and which may include the CEO as a member. The Committee shall have
the authority to make, amend, interpret and enforce all appropriate rules and
regulations for the administration of the Plan and decide or resolve any and all
questions, including interpretations of the Plan, as may arise in connection
with the Plan. A majority vote of the Committee members shall control any
decision. Members of the Committee may be Participants under the Plan.
7.2 AGENTS
The Committee may, from time to time, employ other agents and delegate to
them such administrative duties as it sees fit, and may from time to time
consult with counsel who may be counsel to the Employer.
7.3 BINDING EFFECT OF DECISIONS
The decision or action of the Committee with respect to any question
arising out of or in connection with the administration, interpretation and
application of the Plan and the rules and regulations promulgated hereunder
shall be final, conclusive and binding upon all persons having any interest in
the Plan.
7.4 INDEMNITY OF COMMITTEE
The Employer shall indemnify and hold harmless the members of the
Committee against any and all claims, loss, damage, expense or liability arising
from any action or failure to act with respect to the Plan, except in the case
of gross negligence or willful misconduct.
ARTICLE VIII--CLAIMS PROCEDURE
8.1 CLAIM
Any person claiming a benefit, requesting an interpretation or ruling
under the Plan, or requesting information under the Plan shall present the
request in writing to the Committee, which shall respond in writing as soon as
practicable.
8.2 DENIAL OF CLAIM
If the claim or request is denied, the written notice of denial shall
state:
(a) The reasons for denial, with specific reference to the Plan
provisions on which the denial is based.
PAGE 16
(b) A description of any additional material or information required
and an explanation of why it is necessary.
(c) An explanation of the Plan's claim review procedure.
8.3 REVIEW OF CLAIM
Any person whose claim or request is denied or who has not received a
response within thirty (30) days may request review by notice given in writing
to the Committee. The claim or request shall be reviewed by the Committee which
may, but shall not be required to, grant the claimant a hearing. On review, the
claimant may have representation, examine pertinent documents, and submit issues
and comments in writing.
8.4 FINAL DECISION
The decision on review shall normally be made within sixty (60) days. If
an extension of time is required for a hearing or other special circumstances,
the claimant shall be notified and the time limit shall be one hundred twenty
(120) days. The decision shall be in writing and shall state the reasons and the
relevant Plan provisions. All decisions on review shall be final and bind all
parties concerned.
ARTICLE IX--AMENDMENT AND TERMINATION OF PLAN
9.1 AMENDMENT
The Corporation may at any time amend the Plan in whole or in part;
provided, however, that any such amendment that would materially change the
benefits provided under the Plan shall be subject to the prior approval of the
Compensation Committee of the Board. Provided, further, that no amendment shall
be effective to decrease or restrict the amount accrued to the date of amendment
in any Account maintained under the Plan.
9.2 EMPLOYER'S RIGHT TO TERMINATE
The Corporation may at any time partially or completely terminate the Plan
if, in its judgment, the tax, accounting or other effects of the continuance of
the Plan, or potential payments thereunder would not be in the best interests of
the Employer.
(a) PARTIAL TERMINATION. The Corporation may partially terminate the
Plan by instructing the Committee not to accept any additional Deferral
Commitments. In the event of such a Partial Termination, the Plan shall
continue to operate and be effective with regard to Deferral Commitments
entered into prior to the effective date of such Partial Termination.
(b) COMPLETE TERMINATION. The Corporation may completely terminate
the Plan by instructing the Committee not to accept any additional
Deferral Commitments, and by terminating all ongoing Deferral Commitments.
In the
PAGE 17
event of Complete Termination, the Plan shall cease to operate and the
Employer shall pay out to each Participant his or her Account (including
any Plus Rate Return) as if the Participant had terminated service as of
the effective date of the Complete Termination. Payments shall be made in
equal annual installments over the period listed below, based on the
Account balance:
PAYOUT
ACCOUNT BALANCE PERIOD
---------------------------------------------------
Less than $10,000 1 Year
10,000 but less than $50,000 3 Years
More than $50,000 5 Years
===================================================
ARTICLE X--MISCELLANEOUS
10.1 UNFUNDED PLAN
The Plan is intended to be an unfunded plan maintained primarily to
provide deferred compensation benefits for a select group of "management or
highly-compensated employees" within the meaning of Sections 201, 301 and 401 of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
therefore is exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA.
Accordingly, the Plan shall terminate and no further benefits shall accrue
hereunder in the event it is determined by a court of competent jurisdiction or
by an opinion of counsel that the Plan constitutes an employee pension benefit
plan within the meaning of Section 3(2) of ERISA which is not so exempt. In the
event of such termination, all ongoing Deferral Commitments shall terminate, no
additional Deferral Commitments will be accepted by the Committee, and the
amount of each Participant's vested Account balance shall be distributed to such
Participant at such time and in such manner as the Committee, in its sole
discretion, determines.
10.2 UNSECURED GENERAL CREDITOR
In the event of Employer's insolvency, Participants and their
Beneficiaries, heirs, successors, and assigns shall have no legal or equitable
rights, interest or claims in any property or assets of the Employer, nor shall
they be Beneficiaries of, or have any rights, claims or interests in any life
insurance policies, annuity contracts or the proceeds therefrom owned or which
may be acquired by the Employer. In that event, any and all of the Employer's
assets and policies shall be, and remain, the general, unpledged, unrestricted
assets of the Employer. The Employer's obligation under the Plan shall be that
of an unfunded and unsecured promise of the Employer to pay money in the future.
10.3 TRUST FUND
The Employer shall be responsible for the payment of all benefits provided
under the Plan. At its discretion, the Employer may establish one or more
trusts, with such trustees as it may approve, for the purpose of providing for
the payment of such
PAGE 18
benefits. Such trust or trusts may be irrevocable, but the assets thereof shall
be subject to the claims of the Employer's creditors. To the extent any benefits
provided under the Plan are actually paid from any such trust, the Employer
shall have no further obligation with respect thereto, but to the extent not so
paid, such benefits shall remain the obligation of, and shall be paid by, the
Employer.
10.4 NONASSIGNABILITY
Neither a Participant nor any other person shall have any right to sell,
assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate or convey in advance of actual receipt the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are,
expressly declared to be unassignable and nontransferable. No part of the
amounts payable shall, prior to actual payment, be subject to seizure or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, or be transferable by
operation of law in the event of a Participant's or any other person's
bankruptcy or insolvency.
10.5 NOT A CONTRACT OF EMPLOYMENT
The terms and conditions of the Plan shall not be deemed to constitute a
contract of employment between the Employer and the Participant, and the
Participant (or his or her Beneficiary) shall have no rights against the
Employer except as may otherwise be specifically provided herein. Moreover,
nothing in the Plan shall be deemed to give a Participant the right to be
retained in the service of the Employer or to interfere with the right of the
Employer to discipline or discharge the Participant at any time.
10.6 PROTECTIVE PROVISIONS
A Participant will cooperate with the Employer by furnishing any and all
information requested by the Employer, in order to facilitate the payment of
benefits hereunder, and by taking such physical examinations as the Employer may
deem necessary and taking such other action as may be requested by the Employer.
10.7 TERMS
Whenever any words are used herein in the masculine, they shall be
construed as though they were used in the feminine in all cases where they would
so apply; and wherever any words are used herein in the singular or in the
plural, they shall be construed as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply.
10.8 CAPTIONS
The captions of the articles, sections and paragraphs of the Plan are for
convenience only and shall not control or affect the meaning or construction of
any of its provisions.
PAGE 19
10.9 GOVERNING LAW; ARBITRATION
The provisions of the Plan shall be construed and interpreted according to
the laws of the State of Oregon. Any dispute or claim that arises out of or that
relates to the Plan or to the interpretation, breach, or enforcement of the
Plan, must be resolved by mandatory arbitration in accordance with the then
effective arbitration rules of Arbitration Service of Portland, Inc., and any
judgment upon the award rendered pursuant to such arbitration may be entered in
any court having jurisdiction thereof.
10.10 VALIDITY
In case any provision of the Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts
hereof, but the Plan shall be construed and enforced as if such illegal and
invalid provision had never been inserted herein.
10.11 NOTICE
Any notice or filing required or permitted to be given to the Committee
under the Plan shall be sufficient if in writing and hand delivered, or sent by
registered or certified mail, to any member of the Committee or the Secretary of
the Employer. Such notice shall be deemed given as of the date of delivery or,
if delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification.
10.12 SUCCESSORS
The provisions of the Plan shall bind and inure to the benefit of the
Employer and its successors and assigns. The term successors as used herein
shall include any corporate or other business entity which shall, whether by
merger, consolidation, purchase or otherwise acquire all or substantially all of
the business and assets of the Employer, and successors of any such corporation
or other business entity.
LOUISIANA-PACIFIC CORPORATION
By:
-------------------------------------
Vice President, Human Resources
By:
-------------------------------------
Secretary
Dated:
----------------------------------
PAGE 20