EXHIBIT 10.2
WESTWOOD HOLDINGS GROUP, INC.
DEFERRED COMPENSATION PLAN
Effective February 1, 2002
Table of Contents
Page
ARTICLE I.
ESTABLISHMENT AND PURPOSE............................................................................... 1
1.1 Establishment....................................................... 1
1.2 Purpose............................................................. 1
1.3 Effective Date of Plan.............................................. 1
ARTICLE II.
DEFINITIONS............................................................................................. 2
ARTICLE III.
ELIGIBILITY AND PARTICIPATION........................................................................... 4
3.1 Eligibility......................................................... 4
3.2 Participation and Classification of Participants.................... 4
ARTICLE IV.
DETERMINATION OF CONTRIBUTION AMOUNTS................................................................... 5
4.1 Deferral............................................................ 5
4.2 Election of Deferral Amount......................................... 5
4.3 Deferral Amount Election Forms...................................... 5
4.4 Matching Contribution............................................... 5
4.5 Discretionary Contribution.......................................... 6
ARTICLE V.
PAYMENTS OF BENEFITS.................................................................................... 7
5.1 Time of Payment..................................................... 7
5.2 Method of Payment................................................... 7
5.3 Death Benefit....................................................... 8
5.4 Disability Benefit.................................................. 8
5.5 Beneficiary Designations............................................ 8
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ARTICLE VI.
ACCOUNTS AND ACCOUNT ADJUSTMENTS........................................................................ 9
6.1 Participant Accounts................................................ 9
6.2 Adjustment of Accounts.............................................. 9
6.3 Investment Alternatives............................................. 9
6.4 Adjustments for Earnings or Losses.................................. 10
6.5 Vesting............................................................. 10
6.6 Account Statements.................................................. 10
ARTICLE VII.
ADMINISTRATION OF THE PLAN.............................................................................. 11
7.1 Administration...................................................... 11
7.2 Compensation and Expenses........................................... 11
7.3 Claims Review Procedures............................................ 11
7.4 Voting of Securities................................................ 12
ARTICLE VIII.
PROVISIONS FOR BENEFITS................................................................................. 13
8.1 Provisions for Benefits............................................. 13
ARTICLE IX.
AMENDMENT, TERMINATION, OR MERGER....................................................................... 14
9.1 Amendment and Termination........................................... 14
9.2 Merger, Consolidation or Acquisition................................ 14
ARTICLE X.
GENERAL PROVISIONS...................................................................................... 15
10.1 Effect on Other Plans............................................... 15
10.2 Nonalienation....................................................... 15
10.3 Incompetency........................................................ 15
10.4 Effect of Mistake................................................... 15
10.5 Plan Not an Employment Contract..................................... 16
10.6 Tax Withholding..................................................... 16
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10.7 Severability........................................................ 16
10.8 Applicable Law...................................................... 16
10.9 Binding Effect...................................................... 16
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WESTWOOD HOLDINGS GROUP, INC.
DEFERRED COMPENSATION PLAN
Effective February 1, 2002
Article I.
Establishment and Purpose
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1.1 Establishment. Westwood Holdings Group, Inc., a corporation organized under
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the laws of the state of Delaware ("Company"), hereby establishes a
deferred compensation plan for Eligible Employees to be known as the
Westwood Holdings Group, Inc. Deferred Compensation Plan ("Plan").
1.2 Purpose. The Plan shall provide Eligible Employees the ability to defer
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payment of Incentive Awards paid by the Company. In addition, the Plan
shall provide a Company Matching Contribution and allow for Discretionary
Contributions for selected Eligible Employees.
1.3 Effective Date of Plan. The Plan was approved by the Company's Board of
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Directors, and is effective on February 1, 2002.
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Article II.
Definitions
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Pronouns and other similar words used herein in the masculine or neuter
gender shall be read in the appropriate gender. The singular form of words shall
be read as plural where appropriate. Where capitalized words or phrases appear
in the Plan, they shall have the meaning set forth below.
"Account" means the recordkeeping account maintained in the name of a
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Participant to which Deferral Amounts, Matching Contributions, Discretionary
Contributions, and adjustments for earnings, gains and losses are recorded
pursuant to the provisions of Article V1.
"Affiliate" means:
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(a) Any corporation other than the Company (i.e., either a subsidiary
corporation or an affiliate or associated corporation of the Company),
which together with the Company is a member of a "controlled group of
corporations" within the meaning of Section 414(b) of the Internal
Revenue Code.
(b) Any organization that is under "common control" with the Company
determined under Section 414(c) of the Internal Revenue Code.
(c) Any organization which together with the Company is a member of an
"affiliated service group" within the meaning of Section 414(m) of the
Internal Revenue Code.
"Beneficiary" means the person, persons, trust, or other entity designated
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by a Participant to receive benefit, if any, under this Plan at such
Participant's death pursuant to Section 5.5.
"Committee" means the Compensation Committee or such other committee as may
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be appointed by the Board of Directors of Westwood Holdings Group, Inc. from
time to time to oversee the administration of the plan.
"Company" means Westwood Holdings Group, Inc. and its Affiliates and any
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successor thereto.
"Deferral Amount" means the portion of the Eligible Employee's Incentive
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Award which he elects to defer pursuant to Article IV.
"Deferral Period" means the period established under Section 4.1 to which a
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Deferral Amount election shall apply.
"Disability" or "Disabled" means a mental or physical condition which
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qualifies the Participant as being disabled for purposes of the Westwood
Holdings Group, Inc. Long Term Disability Plan. If a participant is not covered
by such plan, disability means a mental or physical condition, which in the
opinion of the Committee will cause the Participant to be unable to perform
usual duties of the employer for a period of at least six months.
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"Discretionary Contribution" means a supplemental amount credited to a
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Participant's Account as allocated by the Committee from time to time.
"Eligible Employee" means an Employee who is designated by the Committee as
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belonging to a "select group of management or highly compensated employees," as
such phrase is defined under ERISA and who meets such other criteria as
determined by the Committee.
"Employee" means an individual who is an employee of the Company or
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Affiliate.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended.
"Incentive Award" means any Annual Incentive Award or Performance-Based
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Award to an Eligible Employee under the Westwood Holdings Group, Inc. Stock
Incentive Plan, as amended or modified from time to time, or any successor plan.
"Investment Alternative" means the investment selected by the Participant
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pursuant to Section 6.3.
"Matching Contribution" means the amount credited to a Participant's
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Account by the Company, as defined in Section IV.
"Participant" means an Eligible Employee who has been designated a
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Participant under the Plan pursuant to Section 3.2. A person shall continue to
be a Participant under the Plan until the entire remaining balance of his or her
Vested Account Balance has been distributed in accordance with Article V. of the
Plan.
"Plan" means this Westwood Holdings Group, Inc. Deferred Compensation Plan,
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as amended from time to time.
"Plan Year" means the 12-month period beginning each January 1 and ending
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December 31.
"Retirement Date" means the first day of any month after a Participant
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separates from service, attains age 55 and completes 10 years of Service.
"Service" means the most recent period of whole years of uninterrupted
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service with the Employer.
"Stock" means Westwood Holdings Group, Inc. Common Stock.
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"Vested Account" means the vested portion of a Participant's Account as
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defined in Section 6.5.
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Article III.
Eligibility and Participation
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3.1 Eligibility. Only those Eligible Employees selected by the Committee
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shall be eligible to participate in the Plan. All determinations as to
an Employee's status as an Eligible Employee shall be made by the
Committee. The Committee may also determine that an Employee that was
previously eligible under the Plan is no longer eligible. The
determinations of the Committee shall be final and binding on all
Employees. The Committee shall provide each Eligible Employee with
notice of the Employee's status as an Eligible Employee under this Plan
and permit such Eligible Employee the opportunity to make the Deferral
Amount election pursuant to Article IV. Such notice may be given at
such time and in such manner as the Committee may determine.
3.2 Participation and Classification of Participants. Each Eligible
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Employee who has a Deferral Amount credited to an Account under this
Plan shall be a Participant. An Eligible Employee shall continue as a
Participant as long as there is a balance credited to the Participant's
Account.
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Article IV.
Determination of Contribution Amounts
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4.1 Deferral. The Company and each affiliate which has Eligible Employees
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shall establish a Deferral Period to which any Deferral Amount election
made by such employees shall apply. Such Deferral Period shall be at
least twelve months in length except for the Participant's initial
Deferral Period. Only Incentive Awards which become payable within such
Deferral Period may be covered by a Deferral Amount election.
For any Deferral Period, a Participant may elect to defer up to 50% of
any Incentive Award that may be payable by the Company. The amount
deferred shall be specified as a percentage (deferrals made in 1%
increments).
4.2 Election of Deferral Amount. An Eligible Employee must file a Deferral
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Amount election form for each Deferral Period for which a Deferral will
be made. Such election must be made not less than 45 days prior to the
commencement of the Deferral Period to which it is to apply, except
that an Eligible Employee's initial election may be made within 30 days
of his selection as a Participant provided no Incentive Award payable
to the Participant at the date of such election shall be considered
part of such Deferral Amount.
If an Eligible Employee does not file a Deferral Amount election form
within the foregoing period prior to any Deferral Period, such Eligible
Employee will be deemed to have elected not to defer receipt of any
Incentive Awards which otherwise become payable during such Deferral
Period.
Once made, an election will be in force for the entire Deferral Period.
If a severe and unforeseeable financial hardship (as determined under
Section 5.1) occurs during the Deferral Period, a Participant may
revoke the Deferral Amount election with the consent of the Committee.
Following such a revocation, a Participant may resume Deferrals only
during the above-described period for the following Deferral Period by
executing a new Deferral Amount election and delivering it to the
Committee.
4.3 Deferral Amount Election Forms. All Deferral Amount elections shall be
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made on a Deferral Amount election form. A Deferral Amount election
form shall specify the Deferral Amount, the Investment Alternative
pursuant to Subsection 6.3, and the Eligible Employee's designated
Beneficiary to receive any death benefit applicable to such Deferral
Amounts.
4.4 Matching Contribution. The Company shall match a Participant's annual
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Deferral Amount as of the date on which the Deferral Amount to which
the Matching Contribution relates is credited to the Account of the
Participant. The Company match will equal 25% of the Participant's
annual Deferral Amount, but not to exceed a total Matching Contribution
of $10,000.
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4.4 Discretionary Contribution. From time to time, the Company may make
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additional contributions to selected Participants' Discretionary
Accounts, as the Committee deems appropriate. Discretionary
Contributions shall be made in Stock, unless otherwise determined by
the Committee.
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Article V.
Payments of Benefits
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5.1 Time of Payment. Payment of the Vested Account will commence within 90
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days of the earliest to occur of 1) termination prior to Retirement
Date, 2) retirement after a Retirement Date, 3) death, or 4)
disability. A Participant may defer commencement of payment under the
Plan beyond his Retirement or termination date with the consent of the
Committee, provided his request to do so is received by the Committee
not less than one year prior to the date that payment would otherwise
be made or commence and the Participant agrees to defer payment or
commencement to a definite future date not less than two years from the
date payment would otherwise be made or commence. The election must be
made at least one year prior to his Retirement Date.
Subject to Section 5.2, all or a portion of the Participant's Account
may be paid during active employment of a Participant if he makes an
election to receive such distribution at least two years prior to the
date such distribution is to be paid. Only one such election shall be
permitted and any such election shall be irrevocable except in the case
of the Participant's subsequent death or Disability. The Committee may
also permit a Participant to receive payment of all or a portion of his
Vested Account to the extent he incurs a severe and unforeseeable
financial hardship. An unforeseeable financial emergency will not be
deemed to exist if the hardship may be relieved through other sources
or cessation of Deferrals under Section 4.2 of the Plan.
5.2 Method of Payment. When a Participant becomes entitled to a
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distribution, the Plan shall, except as provided below, pay the balance
of the Participant's Vested Account in 10 annual installments. The
first installment shall be due on the first day of the month following
the Participant's Retirement or termination. Each subsequent annual
installment shall be paid on the first business day in January
following the initial payment and shall continue on each subsequent
January 1 until all installment payments have been made. The amount of
the first installment shall equal one-tenth of the Vested Account on
the valuation date established under Section 6.2 which coincides or
immediately precedes the Participant's Retirement or termination. The
amount of the second installment shall be one-ninth of the Vested
Account on the valuation date coincident with or next preceding the
second installment date and so forth until all installment payments
have been made; provided that if any installment payment would be less
than $50,000, the Plan may distribute the entire remaining Vested
Account Balance. After commencement of installment payments, a
Participant's Account shall continue to be adjusted in the same manner
as set forth in Section 6.4.
A Participant may request the Committee to authorize payment of his
Vested Account balance in a lump sum. The Committee shall have the
discretion to agree to such payment upon such terms and conditions, as
it shall establish from time to time. Without limiting the generality
of the foregoing, the Committee may require a Participant to enter into
a non-competition agreement or to execute one or more releases of
claims against the Company and its Affiliates and their officers,
employees and agents as a condition to such lump sum payment. The
Committee may, with or without the request or consent of
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the Participant, require the Participant to accept a distribution of
his Vested Account in a single lump sum payment.
The portion of the Account invested in mutual funds shall be
distributed in cash. The remaining portion, if any, invested in Stock
shall be distributed in shares of Westwood Holdings Group, Inc. Common
Stock.
5.3 Death Benefit. If a Participant dies with a balance credited to the
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Employee's Account, such balance shall be paid to the Employee's
Beneficiary designated on the applicable Deferral Amount election form.
The then current balance of the Vested Account payable to a designated
Beneficiary shall be paid in a single lump sum payment.
5.4 Disability Benefit. If a Participant becomes Disabled with a balance
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credited to the Employee's Account, such balance shall be paid to the
Employee. The then current balance of the Vested Account shall be paid
in a single lump sum payment.
5.5 Beneficiary Designations. A Participant shall designate a Beneficiary
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who, upon the Employee's death, shall receive payments that otherwise
would have been paid to him under the Plan. All Beneficiary
designations shall be in writing. Any such designation shall be
effective only if and when delivered to the Committee during the
lifetime of the Participant.
If a designated Beneficiary of a Participant predeceases the
Participant, the designation of such Beneficiary shall be void. If a
Participant fails to designate a Beneficiary with respect to any death
benefit payments or if such designation is ineffective, in whole or in
part, any payment that otherwise would have been paid to such
Participant shall be paid to the Employee's surviving spouse or, if
none, to the Employee's estate.
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Article VI.
Accounts and Account Adjustments
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6.1 Participant Accounts. The Committee shall maintain, or cause to be
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maintained, a bookkeeping Account for each Participant for the purpose
of accounting for the Participant's interest under the Plan. The
Committee shall maintain within each Participant's Account such
Deferral Amount, Matching Contribution, and Discretionary Contribution
subaccounts as may be necessary. In addition to the foregoing
bookkeeping subaccounts maintained for each Participant, the Committee
shall maintain, or cause to be maintained, such other accounts,
subaccounts, records or books as it deems necessary to properly provide
for the maintenance of Accounts and to carry out the intent and purpose
of the Plan.
6.2 Adjustment of Accounts. Each Participant's Account shall be adjusted to
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reflect all Deferral Amounts, Matching Contributions, and Discretionary
Contributions credited to the Employee's Account, all earnings, gains
or losses credited or debited to the Employee's Account as provided by
Section 6.4, and all benefit payments charged to the Employee's
Account. A Participant's Deferral Amount shall be credited to such
Participant's Account as soon as possible on or after the date on which
the amount being deferred would have become payable to the Participant
absent the deferral election. Participant Accounts shall be adjusted to
reflect earnings and losses pursuant to Section 6.4. Changes to a
Participant's Account to reflect benefit payments shall be made as of
the date of any such payment. As of any relevant date, the balance
standing to the credit of a Participant's Account, and each separate
subaccount comprising such Account, shall be the respective balance in
such Account and the component subaccounts as of the close of business
on such date after all applicable credits, debits and charges have been
posted.
6.3 Investment Alternatives. Participants may elect among the following
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investment alternatives with respect to their Deferral Amounts in
accordance with such limitations as may be approved by the Committee
from time to time:
(a) Deemed Investment Options. A Participant may request that all or
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a portion of his Deferral Amount be invested in selected mutual
fund(s) approved by the Committee from time to time. The purchase
price used for any shares or units of mutual funds held in
Participant Accounts shall be based on the price of such shares
or units on the date such shares or units are actually purchased
with such Deferral Amount. Participants may elect to change, on a
calendar quarter basis, the deemed investment election with
respect to future Deferral Amounts, by following such procedures
as shall be established by the Committee. Participants may also
elect to reallocate any portion of their Deferral Amounts, on a
calendar quarter basis, among the deemed investment mutual fund
options then available, by following such procedures as shall be
established by the Committee.
(b) Company Stock. A Participant may request that all or a portion of
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his Deferral Amount be deemed to be invested in Stock. The
purchase price used for Stock
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units held in Participant Accounts shall be based on the Stock
price on the date such Deferral Amount is credited to the
Participant's Account.
6.4 Adjustments for Earnings or Losses. The amount credited to a
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Participant's Account shall be adjusted on a quarterly basis as of the
last day of each calendar quarter to reflect net earnings, gains or
losses for the quarter, weighted in accordance with the Participant's
investment allocation.
The rate earned (positive or negative) by each deemed investment mutual
fund available (taking into account earnings distributed and share
appreciation (gains) or depreciation (losses) on the value of shares in
the fund), shall be determined and credited to the Participant's
Accounts that are invested in the mutual fund deemed investment
options.
Shares of Stock credited to a Participant's Account shall be adjusted
to reflect any dividends or distributions paid on such Stock, or any
split or consolidation of outstanding shares of Stock. If the
outstanding Stock shall, in whole or in part, be changed into or
exchangeable for a different class or classes of securities of the
Company or securities of another corporation or cash or property other
than Stock, whether through reorganization, reclassification,
recapitalization, merger, consolidation or otherwise, the Board of
Directors of the Company shall adopt such amendments to the Plan as it
deems necessary to carry out the purposes of the Plan, including the
continuing deferral of any Accounts deemed invested in Company Stock.
6.5 Vesting. Subject to the conditions and limitations on payment of
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benefits under the Plan, a Participant's Deferral Amount subaccount
shall be 100% vested as of any relevant date. Company Matching
Contributions and Discretionary Contributions shall be vested 25% per
year on a class year basis. The entire balance of the Account shall be
100% vested upon death, Disability, or retirement after Retirement
Date.
Notwithstanding the foregoing, if a Participant is terminated due to
theft or other dishonesty or if the Participant violates any obligation
to which he is subject to refrain from competition or disclosure of
confidential information, the Committee may require the Participant to
forfeit any portion of his Vested Account derived from Matching or
Discretionary Contributions and any earnings or appreciation of his
Deferral Amounts.
6.6 Account Statements. The Committee shall provide each Participant with a
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statement of the status of the Employee's Account under the Plan. The
Committee shall provide such statement annually or at such other times
as the Committee may determine. Such statement shall be in the format
prescribed by the Committee.
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Article VII.
Administration of the Plan
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7.1 Administration. The Plan shall be administered by the Committee. A majority
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of the members of the Committee shall constitute a quorum. The acts of a
majority of a quorum of the Committee at a meeting or acts approved in
writing by a majority of the Committee without a meeting shall be the acts
of the Committee. The Committee shall have the discretionary authority to
make such rules as it deems necessary to administer the Plan, to interpret
the Plan, to decide questions arising under the Plan, and to take such
other action as may be appropriate to carry out the purpose of the Plan.
The Committee is authorized to employ attorneys, accountants or any other
agents or delegate specified duties to employees of the Company as it shall
deem proper in the discharge of its duties. The Committee shall be the
"plan administrator' and the Company shall be the "named fiduciary" as such
terms are defined by ERISA.
7.2 Compensation and Expenses. Any member of the Committee may receive
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reimbursement by the Company for expenses properly and actually incurred.
All expenses of the Committee shall be paid by the Company. Such expenses
shall include any expenses incident to the functioning of the Committee or
the Plan, including, but not limited to, fees of actuaries, accountants,
legal counsel and other specialists, and other costs of administering the
Plan.
7.3 Claims Review Procedures.
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(a) Denial of Claim. If a claim for benefits is wholly or partially
---------------
denied, the claimant shall be given notice in writing of the denial
within a reasonable time after the receipt of the claim, but not later
than 90 days after the receipt of the claim. However, if special
circumstances require an extension, written notice of the extension
shall be furnished to the claimant before the termination of the
90-day period. In no event shall the extension exceed a period of 90
days after the expiration of the initial 90-day period. The notice of
the denial shall contain the following information written in a manner
that may be understood by the claimant:
(1) The specific reasons for the denial.
(2) Specific reference to pertinent Plan provisions on which the
denial is based.
(3) A description of any additional material or information necessary
for the claimant to make a claim and an explanation of why such
material or information is necessary.
(4) An explanation that a full and fair review by the Committee of
the denial may be requested by the claimant or authorized
representative by filing a
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written request for a review with the Committee within 60 days
after the notice of the denial is received; and
(5) If a request for a review is filed, the claimant or an authorized
representative may review pertinent documents and submit issues
and comments in writing within the 60-day period described in
Section 7.3(a)(4).
(b) Decision After Review. The decision of the Committee with respect to
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the review of the denial shall be made promptly, but not later than
60-days after the Committee receives the request for the review.
However, if special circumstances require an extension of time, a
decision shall be rendered not later than 120 days after the receipt
of the request for review. A written notice of the extension shall be
furnished to the claimant prior to the expiration of the initial
60-day period. The claimant shall be given a copy of the decision,
which shall state, in a manner calculated to be understood by the
claimant, the specific reasons for the decision and specific
references to the pertinent Plan provisions on which the decision is
based.
(c) Finality of Determinations. All determinations of the Committee as to
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any matter arising under the Plan, including questions of construction
and interpretation shall be final, binding and conclusive upon all
interested parties.
(d) Indemnification. To the extent permitted by law and the Company's
---------------
bylaws, the members of the Committee, its agents, and the officers,
directors and employees of the Company shall be indemnified and held
harmless by the Company from and against any and all loss, cost,
liability or expense that may be imposed upon or may be reasonably
incurred by them in connection with or resulting with any claim,
action, suit or proceeding to which they be a party or which they may
be involved by reason of any action taken or failure to act under the
Plan and against and from any and all amounts paid by them in
settlement with the Company's written approval or paid by them in
satisfaction of a judgment in any such action, suit or proceeding. The
foregoing provision shall not be applicable to any person if the loss,
cost, liability or expense is due to such person's gross negligence or
willful misconduct.
7.4 Voting of Securities. The Committee shall direct the Trustee as to the
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manner in which voting, dissenter's rights or other stockholder's rights of
any securities held by the trust created by Article VIII shall be
exercised.
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Article VIII.
Provisions For Benefits
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8.1 Provisions For Benefits. Amounts payable under the Plan to or on account of
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an Eligible Employee shall be paid, directly or indirectly, from assets of
the trust established by the Company for such payment, the assets of which
shall be subject to the claims of creditors of the Company in the event of
the Company's insolvency. The Company shall make contributions to the trust
in amounts that are reasonably estimated to be sufficient to satisfy the
Company's obligations to make benefit payments under the Plan. To the
extent that the assets of the trust are not sufficient to make benefit
payments hereunder, amounts payable under the Plan shall be paid directly
by the Company from its general assets. No assets of the Company shall be
used solely for the purpose of providing benefits hereunder (except as to
the amounts paid or payable to the trust established for this Plan), and
the Company's obligation to pay such benefits is not limited to any
particular assets of the Company. The Company's obligation to make credits
to the Accounts of each Eligible Employee is merely a contractual
obligation, and an Eligible Employee shall be treated as a general creditor
of the Company with respect to any amounts credited to his Account.
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Article IX.
Amendment, Termination, or Merger
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9.1 Amendment and Termination. The Board of Directors of the Company may amend,
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modify or terminate the Plan at any time and in any manner. In the event of
a termination of the Plan, no further Deferral Amount elections shall be
made under the Plan. Amounts which are then payable or which become payable
under the terms of the Plan shall be paid as scheduled under the provisions
of the Plan, unless the Committee directs the payments be accelerated.
9.2 Merger, Consolidation or Acquisition. In the event of a merger,
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consolidation, or acquisition or other reorganization in which the Company
is not the surviving or resulting corporation, (i) all Accounts in the Plan
shall become 100% vested, and (ii) the surviving or resulting corporation
may elect to continue and carry on the Plan, and in such event, shall have
the same rights with respect to the Plan as the Company. If the Plan is
terminated as part of a reorganization, all Accounts shall be considered
fully vested at such date and participants shall receive payment of their
Accounts pursuant to Section 5.2.
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Article X.
General Provisions
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10.1 Effect on Other Plans. Deferred Amounts shall not be considered as part of
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a Participant's compensation for the purpose of any qualified employee
pension plans maintained by the Company. However, such amounts may be taken
into account under all other employee benefit plans maintained by the
Company in the year in which such amounts would have been payable absent
the deferral election; provided, such amounts shall not be taken into
account if their inclusion would jeopardize the tax-qualified status of the
plan to which they relate.
10.2 Nonalienation. Except as otherwise required by law, no benefit payable at
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any time under the Plan shall be subject in any manner to alienation, sale,
transfer, assignment, pledge, attachment, garnishment, or encumbrance of
any kind. Any attempt to alienate, sell, transfer, assign, pledge, or
otherwise encumber any such benefit, whether presently or hereafter
payable, shall be void. No benefit payable under the Plan shall in any
manner be liable for or subject to the debts or liabilities of any
Participant or Beneficiary entitled to any benefit. Without limiting the
generality of the foregoing, no benefit payable or in pay status under the
Plan shall be subject to division in connection with any divorce or
separation proceeding involving a Participant.
10.3 Incompetency. Any person receiving or claiming benefits under the Plan
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shall be conclusively presumed to be mentally competent until the date on
which the Committee receives written notice, in an acceptable form and
manner, that such person is incompetent and a guardian or other person
legally vested with the care of the Employee's estate has been appointed.
If the Committee finds that any person to whom a benefit is payable under
the Plan is unable to care for the Employee's affairs because of any
disability or infirmity and no legal guardian of such person's estate has
been appointed, any payment due may be paid to the spouse, a child, a
parent, a sibling, or to any person deemed by the Committee to have
incurred expense for such person otherwise entitled to payment. Any such
payment so made shall be a complete discharge of any liability therefor
under the Plan. If a guardian of the estate of any person receiving or
claiming benefits under the Plan shall be appointed by a court of competent
jurisdiction, benefit payments shall be made to such guardian, provided
proper proof of appointment and continuing qualification is furnished in
the form and manner acceptable to the Committee. Any such payment so made
shall be a complete discharge of any liability therefor under the Plan.
10.4 Effect of Mistake. If, in the sole opinion of the Committee, a material
-----------------
mistake or misstatement occurs with respect to the eligibility of a
Participant, the amount of benefit payments made or to be made to or with
respect to a Participant, the Investment Alternative selected by a
Participant or other matters related to the administration of the Plan, the
Committee may make such adjustments as it deems appropriate to correct such
mistake or misstatement. To the extent that the Committee determines that
such mistake or misstatement results from an act or failure to act of a
Participant, the Committee may require the Participant to hold the Plan
harmless from any loss or expense incurred by it.
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10.5 Plan Not an Employment Contract. This Plan is not an employment contract
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and does not confer on any person the right to be continued in employment.
All Employees remain subject to change of salary, transfer, change of job,
discipline, layoff, discharge or any other change of employment status.
10.6 Tax Withholding. The Company or other payor may withhold from a benefit
---------------
payment or Deferral Amount any federal, state or local taxes required by
law to be withheld with respect to such payment or Deferral Amount. All
contributions will be subject to FICA tax as required by federal law. In
the event the Deferred Amount is invested in Stock and the Participant's
Account does not contain sufficient cash for the required withholding, the
Company or other payor may sell shares of Stock to supply sufficient cash
to fund the required withholding.
10.7 Severability. If any provision of the plan is held invalid or illegal for
------------
any reason, any illegality or invalidity shall not affect the remaining
provisions of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provision had never been contained therein. The
Company shall have the privilege and opportunity to correct and remedy such
questions of illegality or invalidity by amendment.
10.8 Applicable Law. The Plan shall be governed and construed in accordance with
--------------
the laws of the State of Delaware, except to the extent such laws are
preempted by any applicable federal law. No reference to ERISA in the Plan
shall be construed to mean that the Plan is subject to any particular
provisions of ERISA.
10.9 Binding Effect. This Plan shall be binding upon the Company, its Affiliates
--------------
and their respective successors and assigns and upon the Participant and
each Participant's Beneficiary, heirs, executors, administrators,
representatives, successors and assigns.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed
by a duly authorized officer of the Company, effective as of February 1, 2002.
WESTWOOD HOLDINGS, INC.
Attest:
By:______________________________ By: __________________________________
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