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Exhibit 10.6(a)
PREMIUM STANDARD FARMS
DEFERRED COMPENSATION PLAN
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TABLE OF CONTENTS
SECTION 1. ESTABLISHMENT................................................ 1
SECTION 2. DEFINITIONS.................................................. 1
SECTION 3. ELIGIBILITY FOR PARTICIPATION................................ 3
SECTION 4. DEFERRAL OF LTIP COMPENSATION................................ 4
SECTION 5. ELECTIONS OF TIMING AND FORM OF PAYMENT...................... 4
SECTION 6. INVESTMENT OF DEFERRAL AND VESTING ACCOUNTS.................. 8
SECTION 7. DESIGNATION OF BENEFICIARIES................................. 9
SECTION 8. MERGER, CONSOLIDATION AND SALE OF ASSETS...................... 9
SECTION 9. RIGHTS OF PARTICIPANTS....................................... 10
SECTION 10. ADMINISTRATION.............................................. 10
SECTION 11. CLAIMS AND APPEALS.......................................... 10
SECTION 12. AMENDMENTS AND TERMINATION.................................. 11
SECTION 13. APPLICABLE LAWS............................................. 12
SECTION 14. INCOMPETENCY................................................ 12
SECTION 15. EXPENSES.................................................... 12
SECTION 16. NOTICES..................................................... 12
SECTION 17. WITHHOLDING AND DEDUCTIONS.................................. 12
SECTION 18. INVALIDITY OF PROVISIONS.................................... 13
SECTION 19. TAX ADVANTAGES NOT GUARANTEED............................... 13
SECTION 20. RETURN OF COMPANY CONTRIBUTIONS............................. 13
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PREMIUM STANDARD FARMS
DEFERRED COMPENSATION PLAN
SECTION 1. ESTABLISHMENT
PREMIUM STANDARD FARMS hereby establishes, effective as of January 1,
2001, a deferred compensation and retirement plan for executives as described
herein, which shall be known as the "PREMIUM STANDARD FARMS DEFERRED
COMPENSATION PLAN" (hereinafter called the "Plan"). The Plan is intended to
constitute an unfunded plan maintained primarily to provide deferred
compensation to a select group or management or highly compensated employees.
SECTION 2. DEFINITIONS
2.1 DEFINITIONS. Whenever used herein, the following terms shall have
the meanings set forth below:
(a) The term "BOARD" means the Board of Directors of the Company.
(b) The term "BENEFICIARY" means the persons or entities
designated pursuant to Section 7 who are to receive, upon a
Participant's death, payment of the amounts credited to the
Participant's Deferral Account as of the date of his death.
(c) The term "CHANGE OF CONTROL" occurs where:
(1) any "person" (as that term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934)
other than: (i) the Company, (ii) any trustee or
other fiduciary holding securities under an employee
benefit plan of the Company, or (iii) any corporation
owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as
their ownership of stock of the Company, is or
becomes the "beneficial owner" (as defined in
Securities Exchange Commission Rule 13(d)(3)),
directly or indirectly, of securities of the Company
representing thirty percent (30%) or more of the
combined voting power of the Company's then
outstanding securities; or
(2) during any period of two consecutive years (not
including any period prior to the Effective Date of
this Plan), individuals who at the beginning of such
period constitute the Board of Directors ("existing
directors"), and any new board member ("approved
director") (other than a board member designated by a
person who has entered into an agreement with the
Company to effect a transaction described in
subsection (1), (2) or (3) of this subsection (c)
whose election by the Board of Directors or
nomination for election by the Company's shareholders
was approved by a vote of at least two-thirds (2/3)
of the board
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members then still in office who either were board
members at the beginning of the period or whose
election or nomination for election previously was so
approved (existing directors together with approved
directors constituting "continuing directors"), cease
for any reason to constitute at least a majority of
the Board of Directors; or
(3) the stockholders of the Company approve a merger or
consolidation of the Company with any other person,
other than (i) a merger or consolidation which would
result in the voting securities of the Company
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by
being converted into voting securities for the
surviving entity) more than fifty percent (50%) of
the combined voting power of the voting securities of
the Company or such surviving entity outstanding
immediately after such merger or consolidation, or
(ii) a merger in which no "person" (as defined in
subsection (1)) acquires more than thirty percent
(30% of the combined voting power of the Company's
then outstanding securities.
(4) The stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or
substantially all of the Company's assets (or any
transaction having a similar effect).
(d) The term "COMMITTEE" means the Compensation Committee of, and
appointed by, the Board.
(e) The term "COMPANY" means PREMIUM STANDARD FARMS Inc., a
Delaware corporation, and any successor thereto that agrees to
assume the liabilities associated with this Plan, as described
in Section 8.
(f) The term "DEFERRAL ACCOUNT" means the account maintained by
the Trustee under the Trust, on behalf of a Participant, to
which the Company deposits and the Trustee credits at the
direction of the Company the LTIP Compensation the Participant
elects to defer pursuant to his LTIP Compensation Deferral
Election. Although this Plan may refer to a Deferral Account
as "the Participant's Deferral Account" or as "his Deferral
Account," the amounts credited to such Deferral Account shall
at all times be subject to the terms and conditions of the
agreement and declaration establishing the Trust, and thus
subject to the claims of the Company's general creditors.
(g) The term "EXECUTIVE" means an employee of the Company who is:
(1) in a select group of management or highly paid
employees;
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(2) exempt from the minimum wage and maximum hour
requirements of the Fair Labor Standards Act, as
described in 29 U.S.C. Section 213(a) and regulations
promulgated thereunder; and
(3) a "highly compensated employee" within the meaning of
Internal Revenue Code Section 414(q). With respect to
a newly hired employee, if the employee's annualized
projected Compensation for his first calendar year of
employment exceed the limit described in Section
414(q)(1)(B)(i), he shall be considered a "highly
compensated employee" for such first calendar year of
employment, for purposes of this Plan.
(h) The term "LTIP COMPENSATION" with respect to an active
Participant or eligible Executive means the active
Participant's or eligible Executive's Long Term Incentive Plan
compensation, as determined by Company, for the period to
which his relevant LTIP Compensation Deferral Election
relates.
(i) The term "LTIP COMPENSATION DEFERRAL ELECTION" means the
election made by an active Participant or eligible Executive,
pursuant to Section 4.1 to defer receipt of all or a portion
of his LTIP Compensation which becomes fixed and determined
(after the date of the Deferral Election) and payable to him
in the calendar year to which the election relates.
(j) The term "PARTICIPANT" means a person who has amounts
currently deposited and credited to a Deferral Account,
maintained by the Trustee on his behalf pursuant to the terms
of the Plan. An active Participant is a Participant who is
actively employed by the Company as an Executive and who is
actively participating in the Plan.
(k) The term "TRUST" means, with regard to LTIP Compensation
deposited by the Company and credited by the Trustee on behalf
of a Participant pursuant to his LTIP Compensation Deferral
Election, the PREMIUM STANDARD FARMS DEFERRED COMPENSATION
PLAN GROUP TRUST.
(l) The term "TRUSTEE" means A.G. Edwards Trust Company or the
bank or trust company designated as its successor trustee
under the agreement and declaration establishing the Trust.
2.2 GENDER AND NUMBER. Except when otherwise indicated by the context,
any masculine terminology used herein shall also include the feminine gender,
and the definition of any term herein in the singular shall also include the
plural.
SECTION 3. ELIGIBILITY FOR PARTICIPATION
3.1 ELIGIBILITY. An employee of the Company shall be eligible to
participate in the Plan with respect to a calendar year if:
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(a) He qualifies as an Executive with respect to such
year; and
(b) The Committee has selected such Executive to
participate with respect to such year.
The initial Participants in the Plan are listed on the attached
Schedule A. The Committee may add additional Participants or remove existing
Participants from time to time by written action.
3.2 INACTIVE PARTICIPANTS. If at a future date an active Participant no
longer meets the requirements for participation in this Plan for reasons other
than termination of employment, the Participant shall become an inactive
Participant, retaining all of the rights accorded Participants by this Plan,
except the right to make additional deferrals of LTIP Compensation pursuant to
Section 4. Such an individual shall remain an inactive Participant unless and
until he again becomes an active Participant by again qualifying as an Executive
entitled to participate in this Plan.
SECTION 4. DEFERRAL OF LTIP COMPENSATION
4.1 DEFERRAL OF LTIP COMPENSATION. At the times and in the manner
specified below, an active Participant or an eligible Executive may make an
irrevocable election in writing to defer all or a portion of his LTIP
Compensation until a specified date in the future.
(a) TIMING AND NATURE OF LTIP COMPENSATION DEFERRAL
ELECTION. An active Participant or eligible Executive
described in the preceding paragraph may make a LTIP
Compensation Deferral Election, prior to December 31
of any calendar year, to defer receipt of any
percentage in whole numbers (e.g., 1%, 7%, etc.) of
his LTIP Compensation which is not then fixed or
determined but which is expected to be fixed and
determined, and paid, in the following calendar year.
(b) ELECTIONS BY NEWLY ELIGIBLE EXECUTIVES.
Notwithstanding anything in this Section 4.1 to the
contrary, when an Executive first becomes an eligible
Executive, he may make the election described in
subsection (a) above, as applicable (to be applied to
the LTIP Compensation, if any, earned by and payable
to him with respect to the calendar year in which he
is first an eligible Executive), within 30 days after
the date he first becomes an eligible Executive,
provided that at the time the election is made the
amount of the LTIP Compensation payable to him with
respect to such calendar year has not been fixed and
determined.
(c) CREDITING OF DEFERRED AMOUNTS. As soon as practicable
after LTIP Compensation subject to a LTIP
Compensation Deferral Election would, but for the
provisions of this Plan, be payable to an active
Participant or eligible Executive, the Company shall
deposit with the Trustee, and direct the Trustee to
credit to his Deferral Account, the amount of the
LTIP Compensation the active Participant or eligible
Executive elected to defer.
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SECTION 5. ELECTIONS OF TIMING AND FORM OF PAYMENT
5.1 ELECTING THE TIME OF PAYMENT.
(a) GENERAL RULE. An active Participant or eligible
Executive shall, in his LTIP Compensation Deferral
Election, elect to commence receipt of payment of the
deferred amount (and earnings thereon):
(1) 30 days after termination of employment;
(2) on a specified deferral ending date which is
at least two years after the calendar year
in which the LTIP Compensation would have
been paid but for the deferral election;
(3) the earlier of the dates specified in (1)
and (2) above;
(4) the earlier of the date specified in (1)
above, or the date 30 days after a Change of
Control; or
(5) the earlier of (i) the date specified in (3)
above, or (ii) the date 30 days after a
Change of Control.
In addition, upon application made to the Committee
not later than the last day of the calendar year that
ends at least two years prior to the beginning of the
calendar year in which such amounts first become
payable, and with the approval in its sole discretion
of the Committee, a Participant may elect to receive
payment of deferred LTIP Compensation (and earnings
thereon) at one of the times reflected in (1) through
(5) above, notwithstanding the initial election as to
the time of payment reflected in the pertinent LTIP
Compensation Deferral Election; provided however,
that the change in election as to the timing of the
payment must provide for payment at a later time than
the time for payment elected in the initial LTIP
Compensation Deferral Election.
EXAMPLE: Participant A completes a LTIP Compensation
Deferral Election on December 31, 2000, for deferral
of a portion of his LTIP Compensation payable in 2001
which has not been fixed or determined as of the date
of the election. Participant A elects to receive his
deferred LTIP Compensation on July 1, 2005. The
election is permissible because his deferral ending
date is a date certain that is more than two years
after the 2001 calendar year, which is the year in
which the LTIP Compensation would have been paid but
for the deferral election.
Participant B similarly completes a LTIP Compensation
Deferral Election form, but elects to receive her
deferred Compensation 30 days after termination of
her employment. The election is permissible.
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Participant C similarly completes a LTIP Compensation
Deferral Election form and, like Participant A,
selects a deferral ending date of July 1, 2004. But
Participant C further elects to receive his deferred
LTIP Compensation on the earlier of (i) 30 days after
his termination of employment, and (ii) the July 1,
2004, deferral ending date. The election is
permissible.
Participant D similarly completes a LTIP Compensation
Deferral Election form and, like Participant A,
selects a deferral ending date of July 1, 2004. But
Participant D further elects to receive his deferred
LTIP Compensation on the earlier of (i) 30 days after
his termination of employment, (ii) the July 1, 2004,
deferral ending date, or (iii) 30 days after a Change
of Control. The election is permissible.
(b) EXCEPTIONS. Notwithstanding anything in subsection
(a) above, or in any other provision of the Plan, the
following additional rules apply to the time at which
amounts are payable by this Plan:
(1) DEATH OF PARTICIPANT. The balance of a
Participant's Deferral Account shall be paid
to the Participant's Beneficiary as soon as
practicable after the Participant's death.
(2) DISABILITY OF PARTICIPANT. The balance of a
Participant's Deferral Account shall be paid
to the Participant upon the Participant's
total and permanent disability. For this
purpose, a "total and permanent disability"
is a physical or mental condition that
entitles the Participant to Social Security
disability benefits. Payment shall be made
to the Participant as soon as practicable
after the Participant files with the
Committee proof of his disability
determination by the Social Security
Administration.
(3) HARDSHIP. In the event of an unforeseen
financial hardship or financial emergency
occurring in the personal affairs of the
Participant, the Committee, upon application
by the Participant, may accelerate the
payment of all or a portion of the balance
of his Deferral Account.
A great financial hardship or unforeseen
emergency will be deemed to have occurred if
the payment of benefits is for or on account
of:
(i) unemployment of the Participant, or
employment at a salary fifty
percent (50%) or less than the sum
of his prior Compensation and LTIP
Compensation with the Company,
(ii) expenses for medical care
previously incurred by the
Participant, his spouse, or any of
his other dependents,
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(iii) costs directly related to the
Participant's purchase of his
principal residence (excluding
mortgage payments),
(iv) bankruptcy of the Participant,
(v) payment of tuition, related
educational fees, and room and
board expenses, for the next 12
months of post-secondary education
for the Participant, his spouse, or
other dependents,
(vi) payments necessary to prevent the
eviction of the Participant from
his principal residence or the
foreclosure on the mortgage on that
residence, or
(vii) other events of a similar
magnitude.
The accelerated payment made pursuant to
this subsection shall not exceed the amount
the Committee, in its complete discretion,
determines is necessary to satisfy the great
financial hardship or unforeseen emergency.
(4) ACCELERATION OF PAYMENT DATE SUBJECT TO
SUBSTANTIAL RESTRICTION. The Committee, upon
application by the Participant, may
accelerate the payment of up to ninety-five
percent (95%) of the balance of the
Participant's Deferral Account, subject to a
forfeiture by the Participant of a portion
of his Deferral Account. The amount of the
forfeiture shall be equal to five percent
(5%) of the amount of the payment
accelerated by the Committee.
(5) TERMINATION OF THE PLAN AND TRUST. All
amounts credited to Participants' respective
Deferral Accounts shall be payable
immediately upon termination of the Plan and
Trust as described in Section 12.2.
(d) FINAL PAYMENT FROM TRUST. The final payment from the
Trust to a Participant or Beneficiary may be adjusted
to account for prior overpayments or underpayments
attributable to estimates of earnings allocable to
prior distributions of deferred LTIP Compensation.
5.2 ELECTING THE FORM OF PAYMENT.
(a) GENERAL RULE. Each active Participant or eligible
Executive shall, in his LTIP Compensation Deferral
Elections, elect the form in which the Plan shall pay
his deferred LTIP Compensation (and earnings
thereon). Such an active Participant or eligible
Executive may elect that such amounts be paid:
(1) in a single lump sum; or
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(2) in ten substantially equal annual
installments, adjusted annually for earnings
on the unpaid balance.
In addition, upon application to the Committee not
later than the last day of the calendar year that
ends at least two years prior to the beginning of the
calendar year in which such amounts first become
payable, and with the approval in its sole discretion
of the Committee, a Participant may elect to receive
payment of deferred LTIP Compensation (and earnings
thereon) in any of the forms listed above,
notwithstanding the initial election as to form as
reflected in the pertinent LTIP Compensation Deferral
Election.
(b) EXCEPTIONS. Notwithstanding anything in subsection
(a) above, or any other provision of the Plan, the
following additional rules apply to the form in which
amounts are payable by this Plan:
(1) DEATH OF PARTICIPANT. A Participant may
designate, in his Beneficiary designation on
file with the Committee, the form in which
payments on account of his death should be
made to his Beneficiary. The Participant may
elect to have such payments made in any of
the forms described in subsections (1) or
(2) of subsection (a) above. In the event
the Participant fails to designate a form of
death benefits, death benefits shall be paid
in a single lump sum.
(2) DISABILITY OF PARTICIPANT. Upon application
to the Committee at least 60 days prior to
the calendar year in which such amounts
first become payable, and with the approval
of the Committee in its sole discretion, a
Participant may elect to receive payments
made pursuant to subsection 5.1(b)(2) in any
of the forms described in subsections (1) or
(2) of subsection (a) above. If the
Participant fails to timely make an election
concerning the form of payment, payment
shall be made in a single lump sum.
(3) HARDSHIP AND ACCELERATED PAYMENTS. Payments
made pursuant to subsection 5.1(b)(3) or (4)
shall be made in a single lump sum.
(4) TERMINATION OF THE PLAN AND TRUST. Upon
termination of the Plan and Trust, a
Participant's Deferral Account shall be paid
in a single lump sum, irrespective of any
elections made pursuant to subsection
5.2(a). See also Section 12.2.
SECTION 6. INVESTMENT OF DEFERRAL AND VESTING ACCOUNTS
The Deferral Account maintained by the Trustee on behalf of a
Participant shall be credited with earnings (and losses) resulting from
investment by the Trustee. Participants may request that amounts deposited and
credited to their respective Deferral Accounts be invested in particular
investments, chosen from a set of options established by the Committee. The
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Participants' requests shall not be binding, however, and the Committee, in its
sole discretion, may elect to:
(a) instruct the Trustee to decline to honor
Participant's requests,
(b) direct the Trustee to invest amounts deposited and
credited to Deferral Accounts in another manner, or
(c) permit the Trustee to invest amounts deposited and
credited to Deferral Accounts in the manner the
Trustee considers most appropriate or, where the
Committee provides such guidelines, in accordance
with general investment guidelines established by the
Committee and communicated in writing to the Trustee.
SECTION 7. DESIGNATION OF BENEFICIARIES
7.1 GENERAL RULE. A Participant may designate a Beneficiary or
Beneficiaries who are to receive upon his death the payments that otherwise
would have been paid to him. Such Beneficiary designation may include an
election concerning the form in which death benefits are to be paid by the Plan
to the Beneficiary or Beneficiaries. All designations shall be in writing and
shall be effective only if and when delivered to the Committee or its designee
during the lifetime of the Participant.
7.2 SPECIAL RULE FOR MARRIED PARTICIPANTS. Notwithstanding Section 7.1,
the spouse of a married Participant shall be deemed to be the Participant's sole
primary Beneficiary. The Participant may designate a primary Beneficiary other
than his spouse only if the spouse consents in writing, on a form the Committee
or its designee shall provide, and the spouse's signature is notarized. Spousal
consent is not required if the Participant is legally separated or cannot locate
his spouse.
7.3 CHANGING BENEFICIARY DESIGNATIONS. Subject to Section 7.2, a
Participant may, from time to time during his lifetime, change his Beneficiary
or Beneficiaries by a written instrument delivered to the Committee or its
designee. The term "Beneficiary" may include a trust, so long as the trust
survives the Participant's death. A Participant's designation of his spouse as a
Primary Beneficiary shall automatically lapse upon his divorce or legal
separation from the spouse.
7.4 FAILURE TO DESIGNATE A BENEFICIARY. In the event that a Participant
is not survived by a Beneficiary, or if for any reason a Beneficiary designation
shall be ineffective in whole or in part, the distribution that otherwise would
have been paid to such Participant shall be paid to his estate, and in such
event the term "Beneficiary" shall include his estate.
SECTION 8. MERGER, CONSOLIDATION AND SALE OF ASSETS
8.1 MERGER. In the event the Company consolidates with, merges into, or
transfers all or substantially all of its assets to another entity (hereinafter
referred to as a "Successor Employer"), the Company and such Successor Employer
may agree that the Successor Employer shall assume the Company's obligations
under this Plan in whole or in part. In no event shall such merger,
consolidation or transfer extinguish the Company's or the Successor Employer's
obligations to Participants and their Beneficiaries under this Plan. In the
event the Successor Employer elects to terminate the Plan and Trust, all amounts
credited to Participants'
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respective Deferral Accounts shall be paid to the Participants or their
Beneficiaries in a single sum as soon as practicable.
8.2 ACQUISITION BY ANOTHER EMPLOYER. In the event the Company is sold
to another corporation or other party(ies) ("New Company"), the Company may
agree with such New Company that the New Company shall assume the obligations
under this Plan in whole or in part. In no event shall such sale extinguish the
Company's or New Company's obligations to Participants and their Beneficiaries
under this Plan. In the event the New Company elects to terminate the Plan and
Trust, all amounts credited to Participants' respective Deferral Accounts shall
be paid to the Participants or their Beneficiaries in a single sum as soon as
practicable.
SECTION 9. RIGHTS OF PARTICIPANTS
Notwithstanding the depositing and crediting of amounts to the Deferral
Account maintained by the Trustee on behalf of a Participant, the right of the
Participant, or his Beneficiary, to receive a distribution under this Plan shall
be an unsecured claim against the general assets of the Company. Participants
and Beneficiaries shall have the status of general unsecured creditors of the
Company. This Plan constitutes a mere promise by the Company to make benefit
payments in the future.
The Deferral Account maintained by the Trustee on behalf of a
Participant may not in any way be encumbered or assigned by a Participant or his
Beneficiary.
Nothing in this Plan shall give any Participant the right to be
retained as an Executive or an employee of the Company, affect the right of the
Company to remove any Executive or employee, or give any Executive or employee
(or his Beneficiary) the right to receive a particular amount of LTIP
Compensation from the Company.
SECTION 10. ADMINISTRATION
10.1 ADMINISTRATIVE COMMITTEE. The Committee shall administer the Plan.
The Committee may appoint an administrative committee (the "Administrative
Committee") to assist it in the administration of the Plan. The Administrative
Committee may act on behalf of the Committee with respect to all matters
concerning the Plan, except for those matters the Committee specifically
reserves, in this Plan or otherwise, for its own action. The Board or the
Committee may remove, replace, or appoint members of the Administrative
Committee at any time.
10.2 POWERS OF ADMINISTRATIVE COMMITTEE. The Committee shall have the
power to interpret the Plan and to determine all questions that arise under it.
Such power includes, for example, the administrative discretion necessary to
determine whether an individual meets the Plan's written eligibility
requirements, and to interpret any other term contained in this document. All
payments of benefits under the Plan shall be made by the Company or by the
Trustee in accordance with the terms of this Plan and the agreement and
declaration establishing the Trust. The decision of the Committee upon all
matters within the scope of its authority shall be final and binding on all
parties, shall be subject to the most deferential standard on review, and shall
not be affected by any actual or alleged conflict of interest. No member of the
Committee or the Administrative Committee may act, in his capacity as a member
of the Committee or
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Administrative Committee, with respect to a matter concerning his eligibility or
benefits under the Plan.
SECTION 11. CLAIMS AND APPEALS
11.1 CLAIMS FOR BENEFITS; INITIAL PROCESSING. Claims for benefits under
the Plan normally will be approved or denied by the Committee within 30 calendar
days after they are received by the Committee or its designee. If an extension
of time is required to process the claim, the extension will not exceed 30
calendar days, and the claimant shall be provided notice of any extension. The
notice shall explain the reason for the extension and when a decision will be
made. Claims not resolved prior to the end of the extension may be deemed
denied.
11.2 CLAIM DENIAL. If a claim for benefits is denied (or deemed
denied), the Committee or its designee shall provide the claimant with written
notice reflecting the reasons for the denial, with a specific reference to the
Plan provisions upon which the decision was based. The notice shall also reflect
any additional information that may be necessary for the claimants claim to be
approved.
11.3 APPEALING A DENIED CLAIM. A claimant may appeal the denial of a
claim by writing the Committee and stating that he wishes to appeal. In order to
be considered, the appeal must be received by the Committee or its designee no
more than 30 calendar days after notice of the denial is provided (or, if no
notice is provided, then after the earliest date on which the claimant is
entitled to deem the claim denied).
11.4 PROCESSING APPEALS. If a claimant appeals a denial of a claim, the
Board shall review the claim and any additional information furnished by the
claimant. The Board shall decide the appeal within 30 calendar days after it is
received, but in unusual circumstances may delay resolution of the appeal for an
additional 30 calendar days. The claimant shall be notified of any delay within
30 calendar days after the appeal is received by the Committee or its designee.
After the appeal is decided, the Board shall notify the claimant in writing of
its decision, and explain how the appeal was decided and what Plan provisions
were relied upon.
SECTION 12. AMENDMENTS AND TERMINATION
12.1 AMENDMENT. The Company in its absolute discretion, without notice,
may at any time and from time to time, modify or amend, in whole or in part, any
or all of the provisions of the Plan. No such modification or amendment may,
without the consent of a Participant (or his Beneficiary in the case of his
death) reduce the right of a Participant (or his Beneficiary, as the case may
be) to the payment of any amount deposited and credited to his Deferral Account
under the Plan as of the date of such modification or amendment.
12.2 SUSPENSION AND TERMINATION. The Company in its absolute
discretion, without notice, at any time may suspend or terminate the Plan. In
addition, the Committee may suspend or terminate an active Participant's further
participation in the Plan at any time. Other than earnings on a Participant's
Deferral Account credited under Section 6, no additional LTIP Compensation may
be deferred by any Participant following suspension or termination of the Plan,
or to such an Account of an inactive Participant following termination of his or
her participation in the Plan. Upon termination of a Participant's participation
in the Plan, distribution
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of a Participant's Plan benefit shall be made in the manner and at the time
described under the Plan's normal provisions.
Upon suspension of the Plan, distribution of a Participant's Plan
benefit shall be made in the manner and at the time described under the Plan's
provisions, and the Trust shall not terminate until all monies on deposit
thereunder are either paid to Participants and their Beneficiaries, or returned
to the Employer, as provided for under the agreement and declaration
establishing the Trust.
In the event the Company, a Successor Employer described in Section
8.1, or a New Employer described in Section 8.2 elects to terminate the Plan,
all amounts then on deposit with and credited to Participants' respective
Deferral Accounts shall, notwithstanding anything herein to the contrary, be
paid as soon as practicable to the Participants (or their Beneficiaries, as the
case may be) in a lump sum.
SECTION 13. APPLICABLE LAWS
The Plan shall be construed, administered, and governed in all respects
under and by the laws of the State of Missouri, to the extent federal law does
not apply.
SECTION 14. INCOMPETENCY
Every person receiving or claiming payments under this Plan shall be
conclusively presumed to be mentally competent until the date on which the
Committee or its designee receives written notice, in a form and manner
acceptable to the Committee, that such person is incompetent and that a
guardian, conservator, or other person legally vested with the care of his
estate has been appointed. In the event a guardian or conservator of the estate
of any person receiving or claiming payments under this Plan shall be appointed
by a court of competent jurisdiction, benefit payments may be made to such
guardian or conservator, provided that proper proof of appointment and
continuing qualification are furnished in a form and manner acceptable to the
Committee or its designee. Any such payment so made shall be a complete
discharge of any liability therefor.
SECTION 15. EXPENSES
Costs of administration of the Plan and Trust, and all taxes imposed on
the Plan or Trust shall be paid by the Company. Participants' Deferral Accounts
shall not be reduced for these amounts.
SECTION 16. NOTICES
Any notice or election required or permitted to be given hereunder
shall be in writing, in the form prescribed by the Committee, and shall be
deemed to be filed with the Committee:
(a) On the date it is personally delivered to the Committee (or
its designee), or
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(b) Five business days after it is sent by registered or certified
mail, addressed to the Committee (or its designee) at the
Company's address.
SECTION 17. WITHHOLDING AND DEDUCTIONS
All payments made under the Plan by the Company or the Trustee to any
Participant or Beneficiary, shall be subject to applicable withholding and to
such other deductions that are required by applicable law, and to the delivery
to the Committee (or its designee) or the Trustee of any documents, applications
or other information deemed necessary by the Committee or the Trustee, in their
sole discretion, as a condition precedent to payment.
SECTION 18. INVALIDITY OF PROVISIONS
If any provision of the Plan is held or found to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof, and the Plan shall be construed and enforced as if such
provision had not been included. Similarly, in the event any provision of the
Plan is held or found to be ineffective or unenforceable with respect to
allowing for the deferral of income taxation as intended by the Plan, such
provision shall be severed from the provisions of the Plan that are so effective
or enforceable, and such latter provisions shall be considered to constitute a
separate arrangement.
19. TAX ADVANTAGES NOT GUARANTEED
Neither the Company, the Committee, the Administrative Committee, nor
any other person guarantees that any particular Participant or Beneficiary will
achieve the tax advantages contemplated by this Plan, and neither the Company,
the Committee, the Administrative Committee or any other person indemnifies or
holds harmless a Participant or Beneficiary with respect to liability, whether
or not unintended or unforeseen, for income taxes, excise taxes, interest and/or
penalties, or any other liability, arising from or incurred in connection with
this Plan.
In the event any benefits payable hereunder to a Participant or
Beneficiary are subjected to taxation prior to the date such benefits are
payable under the terms of the Plan, the payment of such benefits shall be
accelerated so that, to the extent practicable, the Participant or Beneficiary
receives such benefits in the taxable year in which such amounts are subjected
to taxation.
20. RETURN OF COMPANY CONTRIBUTIONS
Nothing in this Plan nor the agreement and declaration establishing the
Trust shall be construed to prevent the return to the Company of amounts
contributed to the Trust by the Company due to a mistake of fact or law,
including (but not limited to) erroneous calculations or erroneous
determinations of eligibility.
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IN WITNESS WHEREOF, the Company hereby adopts this PREMIUM STANDARD
FARMS DEFERRED COMPENSATION PLAN this 29th day of December, 2000.
PREMIUM STANDARD FARMS
BY: /s/ David Klein
__________________________________
TITLE: Vice President, Human Resources
__________________________________
ATTEST:
/s/ John Meyer
____________________________
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APPENDIX A
Initial eligible Executives are:
JOHN MEYER
STEVE LIGHTSTONE
ROBERT MANLEY
CHARLIE ARNOT
DAVE KLEIN
MIKE TOWNSLEY
JERRY SCHULTE
DAVID JAMES
MARK WARREN
CINDY BRABANDER
DON KILLINGSWORTH
CALVIN HELD
DENNIS RIPPE
DAVE TOWNSEND
DAN HARRIS
COLLETTE SCHULTZ-KASTER
MARK TRULL