Exhibit 10.3
SERVICE AMERICA CORPORATION
DEFERRED COMPENSATION PLAN
Effective as of February 9, 1999
ARTICLE - INTRODUCTION
1.1 Name of Plan.
Service America Corporation (the "Company") hereby adopts the Service
America Corporation Deferred Compensation Plan (the "Plan").
1.2 Purposes of Plan.
The purposes of the Plan are in provide certain eligible employees of
the Company the opportunity to defer elements of their compensation
which might not otherwise be deferrable under other Company plans,
including the Service America Corporation Retirement and Savings Plan
(the "Savings Plan") and to receive the benefit of additions to their
deferral comparable to those obtainable under the Savings Plan In the
absence of certain restrictions and limitations in the Internal Revenue
Code.
1.3 "Top Hat" Pension Benefit Plan.
The Plan is an "employee pension benefit plan" within the meaning of
ERISA. However, the Plan is unfunded and maintained for a select group
of management or highly compensated employees and, therefore, it is
intended that the Plan will be exempt from Parts 2, 3 and 4 of Title 1
of ERISA. The Plan is not intended to qualify under Code section
401(a).
1.4 Funding.
The Plan is unfunded. All benefits will be paid from the general assets
of the Company.
1.5 Effective Date.
The Plan is effective as of February 9, 1999.
1.6 Administration.
The Plan shall be administered by the Committee.
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ARTICLE - DEFINITIONS AND CONSTRUCTION
2.1 Definitions.
For purposes of the Plan, the following words and phrases shall have
the respective meanings set forth below, unless their context clearly
requires a different meaning:
(a) "Account" means the bookkeeping account maintained by the
Company on behalf of each Participant pursuant to Article VI
that is credited with Base Salary Deferrals, Bonus Deferrals
and Matching Contributions made by the Company on behalf of
each Participant pursuant to Article IV, and the earnings and
losses on such amounts as determined in accordance with
Article V. As of any Valuation Date, a Participant's benefit
under the Plan shall be equal to the amount credited to his
Account as of such date.
(b) "Base Salary" means the base rate of cash compensation paid by
the Company to or for the benefit of a Participant for
services rendered or labor performed while a Participant,
including base pay a Participant could have received in cash
in lieu of (A) deferrals pursuant to Section 4.1 and (B)
contributions made on his behalf to any qualified plan
maintained by the Company or to any cafeteria plan under
Section 125 of the Code maintained by the Company.
(c) "Base Salary Deferral" means the amount of a Participant's
Base Salary which the Participant elects to have withheld on a
pre-tax basis from his Base Salary and credited to his Account
pursuant to Section 4.1.
(d) "Beneficiary" means the person or persons designated by the
Participant in accordance with Section 7.4.
(e) "Bonus Compensation" means the amount awarded to a Participant
for a Plan Year under any bonus plan maintained by the
Company.
(f) "Bonus Deferral" means the amount of a Participant's Bonus
Compensation which the Participant elects to have withheld on
a pre-tax basis from his Bonus Compensation and credited to
his account pursuant to Section 4.1
(g) "Change in Control" means the happening of any of the
following events;
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(i) An acquisition by an individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of
either (1) the then outstanding shares of common
stock (the "Outstanding Common Stock") of the
Company, Volume Services America, Inc., the company's
immediate parent, or Volume Services America
Holdings, Inc., the company's ultimate parent
(collectively "The Affiliated Companies") or (2) the
combined voting power of the then outstanding voting
securities entitled to vote generally in the election
of directors (the "Outstanding Voting Securities of
any of The Affiliated Companies"): provided, however,
that the following acquisitions shall not constitute
a Change of Control:
(A) any acquisition directly from any of The
Affiliated Companies (excluding an acquisition by
virtue of the exercise of a conversion privilege),
(B) any acquisition by any of The Affiliated
Companies, (C) any acquisition by any employee
benefit plan (or related trust) sponsored or
maintained by any of The Affiliated Companies or (D)
any acquisition of any of The Affiliated Companies by
any corporation pursuant to a reorganization, merger
or consolidation, if, following such reorganization,
merger or consolidation, the conditions described in
clauses (1), (2) and (3) of subsection (iii) of this
Section 2.1 (e) are satisfied; or
(ii) Individuals who, as of the date hereof, constitute
the Board (the "Incumbent Board") cease for any
reason to continue at least a majority of the Board;
provided, however, that any individual becoming a
director subsequent to the date hereof whose election
or nomination for election by any of The Affiliated
Companies' shareholders, was approved, by a vote of
at least a majority of the directors then comprising
the Incumbent Board shall 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 either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the
Board; or
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(iii) Approval by the shareholders of any of The Affiliated
Companies of a reorganization, merger or
consolidation, in each case, unless, following such
reorganization, merger or consolidation, (1) all or
substantially all of the individuals and entities who
were beneficial owners, respectively, of the
Outstanding Common Stock and Outstanding Voting
Securities immediately prior to such reorganization,
merger or consolidation beneficially own, directly or
indirectly, more than 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 reorganization, merger or
consolidation of the outstanding Common Stock and
Outstanding Voting Securities, as the case may be,
(2) no Person, excluding any of The Affiliated
Companies and any employee benefit plan (or related
trust) thereof, or of the corporation resulting from
such reorganization, merger or consolidation and any
Person beneficially owning immediately prior to such
reorganization, merger or consolidation, directly or
indirectly, 20% or more of the Outstanding Common
Stock or Outstanding Voting Securities, as the case
may be, beneficially owns, directly or indirectly,
20% or more of respectively, the then outstanding
shares of common stock of the corporation resulting
from such reorganization, merger or consolidation or
the combined voting power of the then outstanding
voting securities of such corporation and (3) at
least a majority of the members of the board of
directors of the corporation resulting from such
reorganization, merger or consolidation were members
of the Incumbent Board at the time of the execution
of the initial agreement providing for such
reorganization, merger of consolidation; or
(iv) The approval by the shareholders of any of The
Affiliated Companies of (1) a complete liquidation or
dissolution of any of The Affiliated Companies or (2)
the sale or other disposition of all or substantially
all of the assets of any of The Affiliated Companies,
excluding however, such a sale or other disposition
to a corporation, with respect to which following
such sale or other disposition, (A) more than 60% of,
respectively, the outstanding shares of common stock
of such corporation and the combined voting power of
the outstanding voting securities of such corporation
entitled to vote generally in the election of
directors will be beneficially owned, directly or
indirectly, by all or substantially all of the
individuals and entities who were the
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beneficial owners, respectively, of the Outstanding
Common Stock and Outstanding Voting Securities
immediately prior to such sale or other disposition
in substantially the same proportions as their
ownership, immediately prior to such sale or other
disposition, of the Outstanding Common Stock and
Outstanding Voting Securities, as the case may be,
(B) no Person, other than any of The Affiliated
Companies and any employee benefit plan (or related
trust) thereof, or of such corporation and any Person
beneficially owning, immediately prior to such sale
or other disposition, 20% or more of the Outstanding
Common Stock or Outstanding Voting Securities, as the
case may be, then beneficially owns, directly or
indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of such
corporation and the combined voting power of the then
outstanding voting securities of such corporation
entitled to vote generally in the election of
directors and (C) individuals who were members of the
Incumbent Board will constitute at least a majority
of the members of the board of directors of such
corporation.
(h) "Change in Financial Condition" means the date of
determination by the Committee that the Company's financial
condition has materially deteriorated or means the date the
Company is informed that its bank line of credit has been
canceled.
(i) "Code" means the Internal Revenue Code of 1986, as amended.
(j) "Committee" means the administrative committee appointed by
the Board of Directors (or the Compensation Committee thereof
if such Committee is established and in existence) to
administer the Plan in accordance with Article VIII.
(k) "Company" means Service America Corporation and any successor
thereto.
(l) [Reserved]
(m) "Deferral Period" means the period of time for which a
Participant elects to defer receipt of the Base Salary
Deferrals, Bonus Deferrals and Matching Contributions credited
to such Participant's Account and shall be either the
Retirement Date, a period of years to a Specific Future Year
as specified in Section 5.2 or upon a Change in Control.
Deferral Periods shall be measured on the basis of Plan Years,
beginning with the Plan Year
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that commences immediately following the Plan Year for which
the applicable Base Salary Deferrals, Bonus Deferrals and/or
Matching Contributions are credited to the Participant's
Account.
(n) "Deferred Compensation Agreement" means the written agreement
(regardless of how they may be titled) as prescribed by the
Committee and entered into between the Company and a
Participant pursuant to which the Participant elects the
amount of his Base Salary and/or his Bonus Compensation to be
deferred into the Plan, and the form of payment for such
amounts, the Deferral Period and the deemed investment.
(o) "Directors" means the Board of Directors of the Company.
(p) "Effective Date" means February 9, 1999.
(q) "Employee" means any common-law employee of the Company.
(r) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
(s) "Matching Contribution" means the amount, as determined by the
Company on an annual basis, credited by the Company to the
Account of each Participant based on such Participant's Base
Salary Deferrals.
(t) "Participant" means each Employee who has been selected for
participation in the Plan and who has become a Participant
pursuant to Article III.
(u) "Plan" means the Service America Corporation Deferred
Compensation Plan, as amended from time to time.
(v) "Plan Year" means the twelve consecutive month period
commencing January 1 of each year ending on December 31.
(w) "Retirement Date" means the date the Participant is eligible
for and retires under any qualified retirement plan maintained
by the Company.
(x) "Savings Plan" means the Service America Corporation
Retirement and Savings Plan.
(y) "Specific Future Year" means a calendar year in the future
voluntarily elected by a participant to begin distribution of
Base Salary Deferrals,
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Bonus Deferrals and Matching Contributions, limited only by
the minimum and maximum Deferral Periods.
(z) "Valuation Date" means the last business day of each calendar
month and each special valuation date designated by the
Committee.
2.2 Number and Gender.
Wherever appropriate herein, words used in the singular shall be
considered to include the plural and words used in the plural shall be
considered to include the singular. The masculine gender, where
appearing in the Plan, shall be deemed to include the feminine gender.
2.3 Headings.
The headings of Articles and Sections herein are included solely for
convenience, and if there is any conflict between such headings and the
text of the Plan, the text shall control.
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ARTICLE - PARTICIPATION AND ELIGIBILITY
3.1 Participation.
Participants in the Plan are those employees who are a select group of
highly compensated or management Employees of the Company and selected
by the Committee, in its sole discretion, as Participants. The
Committee shall notify each Participant of his selection as a
Participant. Subject to the provisions of Section 3.3, a Participant
shall remain eligible to continue participation in the Plan for each
Plan Year following his initial year of participation in the Plan.
3.2 Commencement of Participation.
An Employee shall become a Participant effective as of the date the
Committee determines, which date shall be on or after the date his
Deferred Compensation Agreement becomes effective.
3.3 Cessation of Active Participation.
Notwithstanding any provision herein to the contrary, an individual who
has become a Participant in the Plan shall cease to be a Participant
hereunder effective as of any date designated by the Committee. Any
such Committee action shall be communicated to such Participant prior
to the effective date of such action.
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ARTICLE - DEFERRALS & MATCHING CONTRIBUTIONS
4.1 Deferrals by Participants.
Before the first day of each Plan Year (or the remaining portion
thereof for an Employee who commences participation in the Plan other
than on the first day of a Plan Year), a Participant may file with the
Committee a Deferred Compensation Agreement pursuant to which such
Participant elects to make Base Salary Deferrals and/or Bonus
Deferrals. Any such Participant election shall be subject to any
maximum or minimum percentage or dollar amount limitations and to any
other rules prescribed by the Committee in its sole discretion. Base
Salary Deferrals will be credited to the Account of each Participant as
of the last day of each calendar month, provided that such Participant
is an Employee on the last day of such calendar month. A Participant
whose employment terminates during the calendar month shall be paid the
amount of his Bass Salary Deferrals for such month in cash. Bonus
Compensation Deferrals will be credited to the account of each
Participant as of the last day of the month in which such Bonus
Compensation otherwise would have been paid to the Participant in cash
provided the Participant is an Employee on the last day of such month.
A Participant whose employment terminates during the calendar month in
which his bonus compensation would have been paid to him in cash will
be paid his bonus deferral in cash.
4.2 Effective Date of Deferred Compensation Agreement.
A Participant's initial Deferred Compensation Agreement shall be
effective as of the first payroll period after the date the Participant
commences participation in the Plan. Each subsequent Deferred
Compensation Agreement shall become effective on the first day of the
Plan Year to which it relates. If a Participant fails to complete a
Deferred Compensation Agreement on or before the date the Participant
commences participation in the Plan or the first day of any Plan Year,
the Participant shall be deemed to have elected not to make Base Salary
Deferrals and/or Bonus Compensation Deferrals for such Plan Year (or
remaining portion thereof if the Participant enters the Plan other than
on the first day of a Plan Year).
4.3 Modification or Revocation of Election by Participant.
A Participant may not change the amount of his Base Salary or Bonus
Deferrals during a Plan Year. However, a Participant may discontinue a
Base Salary Deferral election at any time, by filing on such forms and
subject to such limitations and restrictions as the committee may
prescribe in its discretion, a revised Deferred Compensation Agreement
with the Committee. If approved by
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the Committee, revocation shall take effect as of the first payroll
period next following his filing. If a Participant discontinues a Base
Salary Deferral election during a Plan Year, he will not be permitted
to elect to make Base Salary Deferrals again until the next Plan Year.
A Participant may discontinue his Bonus Compensation Deferral only if
approved by the Committee following a showing of Financial Hardship.
Under no circumstances may a Participant's Deferred Compensation
Agreement be amended, modified or revoked retroactively.
4.4 Matching Contributions.
The Committee, in its sole discretion may provide for a Company Match
Contribution on any portion of the amount deferred. Included in the
Committee's discretion is the ability to name specific individuals to
whom a match applies and the amount and timing of that match.
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ARTICLE - VESTING, DEFERRAL PERIODS AND
EARNINGS ELECTION
5.1 Vesting.
A Participant shall be 100% vested in his Account, including Matching
Contributions, at all times.
5.2 Deferral Periods.
A Deferral Period shall, at the Participant's election, be until (i)
Retirement Date, or (ii) a Specific Future Year and upon (iii) a Change
in Control or Change in Financial Condition. In the case of an election
to defer until a Specific Future Year, the Deferral Period must be for
any period of at least three (3) years or more, but may not end later
than the year in which the Participant attains age 70, unless a
Participant is over age 55 as of the date such Deferred Compensation
Agreement is made with respect to such amount in which case the
Deferral Period need only be for one (1) calendar tax year. A
Participant must specify on the Deferred Compensation Agreement the
Deferral Period for the Base Salary Deferrals, Bonus Compensation
Deferrals and Matching Contributions to be made to the Plan for the
Plan Year (or the remaining portion thereof for a Participant who
enters the Plan other that on the first day of a Plan Year) to which
the Deferred Compensation Agreement relates, subject to certain rules
as determined by the Committee from time to time. In the event a
Participant does not elect a Deferral Period for any such Base Salary
Deferrals and Matching Contributions for a Plan Year, such Participant
shall be deemed to have elected a Deferral Period of three (3) years.
5.3 Earnings Elections.
Amounts credited to a Participants' Account shall be credited with
earnings and losses based on hypothetical investment directions made by
the Participant, in accordance with investment deferral crediting
options and procedures adopted by the Committee from time to time. The
Company specifically retains the right in its sole discretion to change
the investment deferral crediting options and procedures. Any amounts
credited to a Participant's Account with respect to which a Participant
does not provide investment direction shall be credited with earnings
in an amount determined by the Committee in its sole discretion. A
Participant's Account shall be adjusted as of each Valuation Date to
reflect investment gains and losses.
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ARTICLE - ACCOUNTS
6.1 Establishment of Bookkeeping Accounts.
A separate bookkeeping account shall be maintained for each
Participant. Such account shall be credited with the Base Salary
Deferrals and/or Bonus Compensation Deferrals made by the Participant
pursuant to Section 4.1, and Matching Contributions made by the Company
pursuant to Section 4.4 and credited (or charged, as the case may be)
with the hypothetical investment results determined pursuant to Section
5.3.
6.2 Subaccounts.
Within each Participant's bookkeeping account, separate subaccounts
shall be maintained to the extent necessary for the administration of
the Plan. For example, it may be necessary to maintain separate
subaccounts where the Participant has specified different Deferral
Periods, methods of payment or investment directions with respect to
his Base Salary Deferrals, Bonus Compensation Deferrals and Matching
Contributions for different Plan Years.
6.3 Hypothetical Nature of Accounts.
The account established under this Article VI shall be hypothetical in
nature and shall be maintained for bookkeeping purposes only so that
earnings and losses on the Base Salary Deferrals, Bonus Compensation
Deferrals and Matching Contributions made to the Plan can be credited
(or charged, as the case may be). Neither the Plan nor any of the
accounts (or subaccounts) established hereunder shall hold any actual
funds or assets. The right of any person to receive one or more
payments under the Plan shall be an unsecured claim against the general
assets of the Company. Any liability of the Company to any Participant,
former Participant or Beneficiary with respect to a right to payment
shall be based solely upon contractual obligations created by the Plan.
Neither the Company, the Directors, nor any other person shall be
deemed to be a trustee of any amounts to be paid under the Plan.
Nothing contained in the Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind,
or a fiduciary relationship, between the Company and a Participant or
any other Person.
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ARTICLE - PAYMENT OF ACCOUNT
7.1 Timing of Distribution of Benefits.
Distribution of Base Salary Deferrals, Bonus Compensation Deferrals and
Matching Contributions to a Participant shall be made as soon as
practicable following the date the Deferral Period for such amounts
ends. If the Participant elects to receive a distribution in the event
of a Change in Control or Change in Financial Condition, distribution
shall be made within 45 days of the Change in Control or Change in
Financial Condition. Notwithstanding the foregoing, the Participant's
entire Account shall be distributed to him (or his Beneficiary in the
event of his death) in five (5) annual installments if the account
balance is $200,000 or greater following the earlier to occur of the
following: (i) the Participant's death; (ii) the Participant's
permanent disability (as defined in the Company's long-term disability
program); or (iii) the Participant's termination of employment. If the
Participant's account balance is less than $200,000, the account
balance for subsections 7.1(i), (ii) or (iii) will be paid as a lump
sum. This distribution may be accelerated, including a lump sum, based
upon a showing of severe financial hardship in accordance with Section
7.6 by the Participant or his beneficiary.
7.2 Adjustment for Investment Gains and Losses Upon a Distribution.
Upon a distribution pursuant to this Article VII, the balance of a
Participant's Account shall be determined as of the Valuation Date
immediately preceding We date of the distribution to be made and shall
be adjusted for investment gains and losses which have accrued to the
date of distribution but which have not been credited to his Account.
7.3 Form of Payment or Payments.
Base Salary Deferrals, Bonus Compensation Deferrals and Matching
Contributions shall be distributed in accordance with the form of
payment elected by the Participant on the Deferred Compensation
Agreement to which such amounts relate. The form of payment with
respect to amounts and the earnings credited thereon may be in any of
the following forms:
(a) A lump sum; or
(b) Installment payments for a period not to exceed fifteen years.
Installment payments shall be paid annually on the first business day
of January of each Plan Year or quarterly on the first business day of
each calendar quarter as
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elected by the Participant. Each installment payment shall be
determined by multiplying the amounts to be distributed by a fraction,
the numerator of which is one and the denominator of which is the
number of remaining installment payments to be mode to Participant.
Anything contained herein to the contrary notwithstanding, total
distribution of a Participant's Account must be made by the date such
Participant attains age 85. In the tax year prior to the year in which
a distribution of a Participant's Account is scheduled to begin
distribution (but no less than 60 days prior to the distribution date
in all events), a Participant may request a change in form of payment
which may be approved or disapproved by the Committee in its sole
discretion.
7.4 Designation of Beneficiaries.
Each Participant shall have the right to designate the beneficiary or
beneficiaries to receive payment of his benefit in the event of his
death. A beneficiary designation shall be made by executing the
beneficiary designation form prescribed by the Committee and filing the
same with the Committee. Any such designation may be changed at any
time by execution of a new designation in accordance with this Section.
If no such designation is on file with the Committee at the time of the
death of the Participant or such designation is not effective for any
reason as determined by the Committee, then the designated beneficiary
or beneficiaries to receive such benefit shall be the Participant's
surviving spouse, if any, or if none, the Participant's executor or
administrator, or his heirs at law if there is no administration of
such Participant's estate.
7.5 Unclaimed Benefits.
In the case of a benefit payable on behalf of such Participant, if the
committee is unable to locate the Participant or beneficiary to whom
such benefit is payable, such benefit may be forfeited to the Company,
upon the Committee's determination. Notwithstanding the foregoing, if
subsequent to any such forfeiture the Participant or beneficiary to
whom such benefit is payable makes a valid claim for such benefit, such
forfeited benefit shall be paid by the Company or restored to the Plan
by the Company.
7.6 Hardship Withdrawals.
A Participant may apply in writing to the Committee for, and the
Committee may permit, a hardship withdrawal of all or any part of a
Participant's Account. If the Committee, in its sole discretion,
determines that the Participant has incurred a severe financial
hardship resulting from a sudden and unexpected illness or accident of
the Participant or of a dependent (as defined in section 152(a) of the
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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, as determined by the Committee, in its sole and absolute
discretion. The amount that may be withdrawn shall be limited to the
amount reasonably necessary to relieve the hardship or financial
emergency upon which the request is based, plus the federal and state
taxes due on the withdrawal, as determined by the Committee. The
Committee may require a Participant who requests a hardship withdrawal
to submit such evidence as the Committee, in its sole discretion, deems
necessary or appropriate to substantiate the circumstances upon which
the request is based.
7. Other Withdrawals.
At any time, a Participant may request that 90% of all (or a designated
portion of) his account balance may be paid to him. The Committee in
its sole discretion may approve or disapprove such a request. If it
approves the request and a Participant receives a payment under this
Section, he shall (1) permanently forfeit the remaining 10% of the
entire account balance (or designated portion of it) and this amount
shall not be paid to, or in respect of, the Participant; and (2) the
Participant shall lose the right to participate in the Plan for 1 full
Plan Year after receiving a distribution under this Section.
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ARTICLE - ADMINISTRATION
8.1 Committee.
The Plan shall be administered by a Committee appointed by the Board of
Directors (or the Compensation Committee thereof if such Committee is
established and in existence). The Committee shall be responsible for
the general operation and administration of the Plan and for carrying
out the provisions thereof. The Committee may delegate to others
certain aspects of the management and operational responsibilities of
the Plan including the employment of advisors and the delegation of
ministerial duties to qualified individuals, provided that such
delegation is in writing.
8.2 General Powers of Administration.
The Committee shall have all powers necessary or appropriate to enable
it to carry out its administrative duties. Not in limitation, but in
application of the foregoing, the Committee shall have the duty and
power to interpret the Plan and determine all questions that may arise
hereunder as to the status and rights of Employees, Participants and
Beneficiaries. The Committee may exercise their powers hereby granted
in its sole and absolute discretion. No member of the committee shall
be personally liable for any actions taken by the Committee unless the
member's action involves willful misconduct.
8.3 Costs of Administration.
The costs of administering the Plan shall be borne by the Company
unless and until the Participant receives written notice of the
imposition of such administrative costs, with such costs to begin with
the next Plan Year and none may be assessed retroactively for prior
Plan Years. Such costs shall be charged against the Participant's
Account and shall be uniform for all Plan Participants. Such costs
shall not exceed the standard rates for similarly designed nonqualified
plans under administration by high quality third party administrators
at the time such costs are initially imposed and thereafter.
8.4 Indemnification of Committee.
The Company shall indemnify the members of the Committee against any
and all claims, losses, damages, expenses, including attorney's fees,
incurred by them, and any liability, including any amounts paid in
settlement with their approval, arising from their action or failure to
act, except when the same is judicially determined to be attributable
to their gross negligence or wilful misconduct.
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ARTICLE - DETERMINATION OF BENEFITS,
CLAIMS PROCEDURE AND ADMINISTRATION
9.1 Claims.
A person who believes that he is being denied a benefit to which he is
entitled under the Plan (hereinafter referred to as "Claimant") may
file a written request for such benefit with the Committee, setting
forth his claim. The request must be addressed to the Committee at the
Company at its then principal place of business.
9.2 Claim Decision.
Upon receipt of a claim, the Company shall advise the Claimant that a
reply will be forthcoming within ninety (90) days and shall, in fact,
deliver such reply within such period. The Company may, however, extend
the reply period for an additional ninety (90) days for reasonable
cause.
If the claim is denied in whole or in part, the Committee shall adopt a
written opinion, using language calculated to be understood by the
Claimant, setting forth:
(1) The specific reason or reasons for such denial;
(2) The specific reference to pertinent provisions of the Plan on
which such denial is based;
(3) A description of any additional material or information
necessary for the Claimant to perfect his claim and an
explanation why such material or such information is
necessary;
(4) Appropriate information as to the steps to be taken if the
Claimant wishes to submit the claim for review; and
(5) The time limits for requesting a review under Section 9.3 and
for review under Section 9.4 hereof.
9.3 Request for Review.
Within sixty (60) days after the receipt by the Claimant of the written
opinion described above, the Claimant may request in writing that the
Company review the determination of the Committee. Such request must be
addressed to the Secretary of the Company, at its then principal place
of business. The Claimant or his duly authorized representative may,
but need not, review the pertinent
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documents and submit issues and comments in writing for consideration
by the Company. If the Claimant does not request a review of the
Corporation's determination by the Secretary of the Company within such
sixty (60) day period he shall be barred and estopped from challenging
the Company's determination.
9.4 Review of Decision.
Within sixty (60) days after the Secretary's receipt of a request for
review, such secretary will review the Company's determination. After
considering all materials presented by the Claimant, the Secretary will
render a written opinion, written in a manner calculated to be
understood by the Claimant setting forth the specific reasons for the
decision and containing specific references to the pertinent provisions
of this Agreement on which the decision is based. If special
circumstances require that the sixty (60) day time period be extended,
the Secretary will so notify the Claimant and will render the decision
as soon as possible, but no later than one hundred twenty (120) days
after receipt of the request for review.
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ARTICLE - MISCELLANEOUS
10.1 Not Contract of Employment.
The adoption and maintenance of the Plan shall not be deemed to be a
contract between the Company and any person or to be consideration for
the employment of any person. Nothing herein contained shall be deemed
to give any person the right to be retained in the employ of the
Company or to restrict the right of the Company to discharge any person
at any time nor shall the Plan be deemed to give the Company the right
to require any person to remain in the employ of the Company or to
restrict any person's right to terminate his employment at any time.
10.2 Non-Assignability of Benefits.
No Participant, Beneficiary or distributee of benefits under the Plan
shall have any power or right to transfer, assign, anticipate,
hypothecate or otherwise encumber any part or all of the amounts
payable hereunder, which are expressly declared to be unassignable and
non-transferable. Any such attempted assignment or transfer shall be
void. Except as provided by applicable law, no amount payable hereunder
shall, prior to actual payment thereof, be subject to seizure by any
creditor of any such Participant, Beneficiary or other distributee for
the payment of any debt judgment or other obligation, by a proceeding
at law or in equity, nor transferable by operation of law in the event
of the bankruptcy, insolvency or death of such Participant, Beneficiary
or other distributee hereunder.
10.3 Withholding.
All deferrals and payments provided for hereunder shall be subject to
applicable withholding and other deductions as shall be required of the
Company under any applicable local, state or federal law.
10.4 Amendment and Termination.
The Board of Directors (or the Compensation Committee thereof if such
Committee is established and in existence) may from time to time, in
its discretion, amend, in whole or in part, any or all of the
provisions of the Plan; provided, however, that no amendment may be
made that would impair the rights of a Participant with respect to
amounts already allocated to his Account. The Board of Directors (or
the Compensation Committee thereof if such Committee is established and
in existence) may terminate the Plan at any time. In the event that the
Plan is terminated, the balance in a Participant's Account shall be
paid to such
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Participant or his Beneficiary in a single cash lump sum in full
satisfaction of all such Participant's or Beneficiary's benefits
hereunder. Any such amendment to or termination of the Plan shall be in
writing and signed by a member of the Board of Directors (or the
Compensation Committee thereof if such Committee is established and in
existence).
10.5 No Trust Created.
Nothing contained in this Agreement, and no action taken pursuant to
its provisions by either party hereto, shall create, nor be construed
to create, a trust of any kind or a fiduciary relationship between the
Company and the Participant, his beneficiary, or any other person.
10.6 Unsecured General Creditor Status of Employee.
The payments to Participant, his Beneficiary or any other distributee
hereunder shall be made from assets which shall continue, for all
purposes, to be a part of the general, unrestricted assets of the
Company; no person shall have nor acquire any interest in any such
assets by virtue of the provisions of this Agreement. The Company's
obligation hereunder shall be an unfunded and unsecured promise to pay
money in the future. To the extent that the Participant, Beneficiary or
other distributee acquires a right to receive payments from the Company
under the provisions hereof, such right shall be no greater than the
right of any unsecured general creditor of the Company; no such persons
shall have nor require any legal or equitable right, interest or claim
in or to any property or assets of the Company.
In the event that, in its discretion, the Company purchases an
insurance policy or policies insuring the life of the Employees (or any
other property) to allow the Company to recover the cost of providing
the benefit, in whole, or in part, hereunder, neither the Participant,
Beneficiary or other distributee shall have nor acquire any rights
whatsoever therein or in the proceeds therefrom. The Company shall be
the sole owner and beneficiary of any such policy or policies and, as
such, shall possess and, may exercise all incidents of ownership
therein. No such policy, policies or other property shall be held in
any trust for a Participant, Beneficiary or other distributee or held
as collateral security for any obligation of the Company hereunder. An
Employee's participation in the underwriting or other steps necessary
to acquire such policy or policies may be required by the Company and,
if required. shall not be a suggestion of any beneficial interest in
such policy or policies to a Participant.
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10.7 Severability.
If any provision of this Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining
provisions hereof; instead, each provision shall be fully severable and
the Plan shall be construed and enforced as if said illegal or invalid
provision had never been included herein.
10.8 Governing Laws.
All provisions of the Plan shall be construed in accordance with the
laws of South Carolina except to the extent preempted by federal law.
10.9 Binding Effect.
This Plan shall be binding on each Participant and his heirs and legal
representatives and on the Company and its successors and assigns.
10.10 Entire Agreement.
This document and any amendments contain all the terms and provisions
of the Plan and shall constitute the entire Plan, any other alleged
terms or provisions being of no effect.
IN WITNESS WHEREOF, the Company has caused this Plan to be properly
executed on the 9th day of February, 1999.
SERVICE AMERICA CORPORATION
/s/ Robert Paoletti
By: ______________________________________
Its: Corporate Vice President & Controller
(Corporate Seal)
Attested to:
/s/ Janet L. Steinmayer
__________________________________
Secretary