EXHIBIT 10.56
January 1, 1995
Amended July 15, 1997
Amended October 29, 1998
Amended February 5, 1999
Amended April 23, 2003
February 26, 2004
MILACRON
COMPENSATION DEFERRAL PLAN
The purpose of the Milacron Compensation Deferral Plan(the "Plan"),
originally effective January 1, 1995 and revised and restated as of January 1,
1995, is to aid Milacron Inc. (the "Company") and its subsidiaries in attracting
high quality executives and promoting in its executives increased efficiency and
an interest in the successful operation of the Company by restoring some of the
deferral opportunities and employer-provided benefits that are lost under
certain other plans due to legislative limits. The benefits provided under the
Plan shall be provided in consideration for services to be performed after the
executive has become eligible to participate in the Plan, but prior to the
executives retirement.
ARTICLE 1
DEFINITIONS
1.1 ACCOUNT shall mean the notional account or accounts established for
record keeping purposes for a Participant pursuant to Article 6 of the Plan.
1.2 ADMINISTRATOR shall mean the Personnel and Compensation Committee
of the Company's Board of Directors or its delegate.
1.3 ANNUAL DEFERRAL shall mean the amount of Compensation which the
Participant actually defers during a Plan Year. The Annual Deferral may differ
from Plan Year to Plan Year.
1.4 ANNUAL DEFERRAL COMMITMENT shall mean the amount of Compensation
which the Participant elects to defer for a Plan Year pursuant to Articles 2 and
3 of the Plan.
1.5 BASE SALARY shall mean the Participant's annual basic rate of pay
from the Company or its subsidiaries (excluding EVA Awards, commissions,
severance pay, and other non-regular forms of compensation) before any
reductions for pre-tax deferrals, or deferrals under this Plan.
1.6 BASIC CREDIT shall mean the Employer Basic Contribution under the
Savings Plan that is credited to the Participant's Deferral Account as described
in Article 4.
1.7 BENEFICIARY shall mean the person or persons or entity designated
as such in accordance with Article 16 of the Plan.
1.8 CHANGE IN CONTROL shall have the meaning set forth in Schedule C.
1.9 COMPENSATION shall mean the sum of the Participant's Base Salary
and EVA Awards for a Plan Year before reductions for deferrals under the Plan or
the Savings Plan, or other benefit plans sponsored by the Company or its
subsidiaries.
1.10 COMPENSATION DEFERRAL PLAN shall mean the Milacron Compensation
Deferral Plan.
1.11 CREDITING RATE shall mean any notional gains or losses equal to
those generated as if the Account balances had been invested in one or more of
the investment portfolios designated as available by the Administrator, less
separate account fees and less applicable investment management and
administrative charges determined annually by the Administrator, or gains or
losses as otherwise determined by the Administrator.
1.12 DEFERRAL ACCOUNT shall mean the notional account established for
record keeping purposes for a Participant's Annual Deferrals, Matching Credits
and Basic Credits pursuant to Article 6 of the Plan.
1.13 DISABILITY shall mean any long-term disability as defined under
the Company's or its subsidiaries, long-term disability plan.
1.14 DISCRETIONARY ACCOUNT shall mean the notional account established
for record keeping purposes for a Participant's Discretionary Credits pursuant
to Article 6 of the Plan.
1.15 DISCRETIONARY CREDIT shall mean the Company's credit to the
Participant's Discretionary Account as described in Article 5.
1.16 EARLY RETIREMENT DATE shall mean age 55 with ten or more years of
service with the Company or its subsidiaries.
1.17 ELIGIBLE EMPLOYEE shall mean a key employee of the Company or any
of its subsidiaries who (i) is subject to U.S. personal income taxes, (ii) is
designated by the Administrator as eligible to participate in all or a portion
of the Plan (subject to the restriction in Sections 11.2, 12.2.2 and 14.2 of the
Plan), and (iii) qualifies as a member of the "select group of management or
highly compensated employees" under ERISA.
1.18 ERISA shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.19 EVA AWARDS shall mean amounts paid in cash to the Participant by
the Company or its subsidiaries pursuant to the Milacron Short Term Management
Incentive Plan or such other bonus plan or program designated by the
Administrator, before reductions for deferrals under the Plan or the Savings
Plan.
1.20 FINANCIAL HARDSHIP shall mean an unexpected need for cash arising
from an illness, casualty loss, sudden financial reversal, or other such
unforeseeable occurrence as determined by the Administrator. Cash needs arising
from foreseeable events such as the purchase of a residence or education
expenses for children shall not, alone, be considered a Financial Hardship.
1.21 MATCHING CREDIT shall mean the Employer Matching Contribution or
Salary Deferral Matching Contribution under the Savings Plan that is credited to
the Participant's Deferral Account as described in Article 4.
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1.22 NORMAL RETIREMENT DATE shall mean the date on which a Participant
attains age 65.
1.23 PARTICIPANT shall mean an Eligible Employee who has either elected
to participate and has completed a Participation Election pursuant to Article 2
of the Plan or is eligible for Basic Credits pursuant to Article 4 of the Plan
or Discretionary Credits pursuant to Article 5 of the Plan.
1.24 PARTICIPATION ELECTION shall mean the Participant's written
election to participate in the Plan.
1.25 PLAN YEAR shall mean the calendar year, with the first Plan Year
commencing January 1, 1995.
1.26 RETIREMENT shall mean a termination of employment following Normal
or Early Retirement Date.
1.27 RETIREMENT PLAN shall mean the Milacron Retirement Plan.
1.28 SAVINGS PLAN shall mean the Milacron Performance Dividend and
Savings Plan and the Milacron Retirement Savings Plan as they currently exist
and as they may subsequently be amended.
1.29 SCHEDULED WITHDRAWAL shall mean a distribution of all or a portion
of the Participant's Deferral Account attributable to Annual Deferrals as
elected by the Participant pursuant to the provisions of Article 12 of the Plan.
1.30 TERMINATION OF EMPLOYMENT shall mean the Participant's employment
with the Company or its subsidiaries ceases for any reason whatsoever, whether
voluntary or involuntary, other than Retirement or death.
1.31 UNSCHEDULED WITHDRAWAL shall mean a distribution of all or a
portion of the vested amount credited to the Participant's Deferral Account as
requested by the Participant pursuant to the provisions of Article 12 of the
Plan.
1.32 VALUATION DATE shall mean the last business day of the month in
which Termination of Employment, Retirement,
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death, Scheduled Withdrawal, or an Unscheduled Withdrawal request occurs. For
purposes of calculating installment payments, the Valuation Date shall mean the
November 30 of the year preceding the Plan Year in which benefit payments are to
be made.
ARTICLE 2
PARTICIPATION - EMPLOYEE DEFERRALS
2.1 Participation Election. Unless otherwise provided by the
Administrator, an Eligible Employee who desires to defer all or part of his
Compensation pursuant to the Plan must complete and deliver a Participation
Election to the Administrator before the first day of the Plan Year for which
such Compensation would otherwise be paid. Notwithstanding the preceding
sentence, in the event that an individual first becomes an Eligible Employee
during a Plan Year, the individual's Participation Election must be filed no
later than thirty (30) days following the date he first becomes an Eligible
Employee, and such Participation Election shall be effective only with regard to
Compensation earned following the filing of the Participation Election with the
Administrator.
2.2 Annual Deferral Commitment. In the Participation Election, and
subject to the restrictions in Article 3, the Eligible Employee shall designate
the percentage rate of Compensation as the Annual Deferral Commitment for the
covered Plan Year.
2.3 Continuation of Participation. An Eligible Employee who has
participated in the Plan by making an Annual Deferral shall continue as a
Participant in the Plan until such employee's Termination of Employment or all
benefits under the Plan are paid. A Participant shall not be eligible to elect a
new Annual Deferral Commitment unless the Participant is an Eligible Employee
for the Plan Year for which the election is made. In the event a Participant
transfers to a subsidiary of the Company and that subsidiary does not
participate in the Plan, the Participant's Annual Deferral shall cease and the
Participant's Deferral Account shall remain in effect until such time as the
benefits are distributed as originally elected by the Participant in the
Participation Election or until the Participant experiences Termination of
Employment.
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ARTICLE 3
EMPLOYEE DEFERRALS
3.1 Deferral Election. Employees designated as eligible to participate
in the Plan may elect an Annual Deferral Commitment. Such election shall
designate a specified percentage of either Base Salary and/or EVA Awards to be
deferred. Annual Deferral Commitments under this Plan shall be irrevocable,
except as provided under Sections 2.3, 11.2, 12.2.2 and 14.2 of the Plan.
3.2 Minimum Annual Deferral Commitment. The Annual Deferral Commitment
must equal or exceed an amount determined by the Administrator.
3.3 Maximum Annual Deferral Commitment. The Annual Deferral Commitment
from Base Salary for a Plan Year may not exceed seventy-five percent (75%) of
Base Salary. The Annual Deferral Commitment from EVA Awards for a Plan Year may
be less than or equal to one hundred percent (100%). Notwithstanding the
foregoing, a Participant may not reduce Base Salary after deferrals to this Plan
to an amount less than the OASDI Wage Base under FICA.
3.4 Vesting. The Participant's right to receive Compensation deferred
under this Article 3 and earnings thereon shall be one hundred percent (100%)
vested at all times.
ARTICLE 4
COMPANY MATCHING AND BASIC CREDITS
4.1 Amount. In the discretion of the Administrator, in the event a
deferral under this Plan or a non-discrimination rule or limitation applicable
to the Savings Plan causes a Participant to lose a Matching Credit and/or Basic
Credit under the Savings Plan, the amount of the lost Matching Credit and/or
Basic Credit will be credited to the Participant's Deferral Account under this
Plan in such amounts as determined in accordance with the rules and procedures
established by the Administrator.
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4.2 Vesting. The Participant's right to receive Matching and/or Basic
Credits and earnings thereon earned in any Plan Year shall be one hundred
percent (100%) vested at all times.
ARTICLE 5
DISCRETIONARY CREDITS
5.1 Eligibility and Amount. An Eligible Employee who is set forth in
the attached Schedule A shall become a Participant in the Plan with respect to
Discretionary Credits as of the date set forth in Schedule A and shall have
Discretionary Credits credited to his Discretionary Account at such times and in
such amounts as set forth in Schedule A.
5.2 Vesting. The Participant's right to receive Discretionary Credits
under this Article 5 and earnings thereon shall be subject to the vesting
schedule set forth in Schedule A that is applicable to such Participant.
Notwithstanding the vesting schedule set forth in Schedule A, a Participant's
right to receive Discretionary Credits under this Article 5 and earnings thereon
earned in any Plan Year shall be one hundred percent (100%) vested upon the date
of a "Qualifying Termination" (as defined in Schedule B, attached hereto)
following a Change in Control.
ARTICLE 6
ACCOUNTS
6.1 Accounts. Solely for record keeping purposes, the Company shall
maintain a Deferral Account and a Discretionary Account for each Participant, as
applicable.
6.2 Timing of Credits -- Pre-Termination.
6.2.1 Annual Deferrals. The Company shall credit to the
Deferral Account the Annual Deferrals specified under Article 3, or otherwise
allowed as set forth in Article 2.1, at the time the deferrals would otherwise
have been paid to the Participant but for the Participation Election.
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6.2.2 Matching and Basic Credits. Matching and Basic Credits
under Article 4 shall be credited to the Deferral Account as of January 1 of the
following Plan Year.
6.2.3 Discretionary Credits. Discretionary Credits under
Article 5 shall be credited to the Discretionary Account as of January 1 of the
following Plan Year, unless otherwise provided in Schedule A.
6.2.4 Assets. The Company shall be under no obligation to
purchase any investments designated by the Participant. The Company shall credit
gains or losses to the Accounts based on the Crediting Rate as of the date or
dates specified by the Administrator.
6.3 Statement of Accounts. The Administrator shall provide periodically
to each Participant a statement setting forth the balance of the Accounts
maintained for such Participant.
ARTICLE 7
RETIREMENT BENEFITS
7.1 Amount. Upon Retirement, the Company shall pay to the Participant
the amount of his vested Accounts in the form provided in Section 7.2 of the
Plan, based on the balance of the vested Accounts as of the Valuation Date. If
paid as a lump sum, the retirement benefit shall be equal to such balance. If
paid in installments, the installments shall be paid in amounts that will
amortize such balance with interest credited at the Crediting Rate over the
period of time benefits are to be paid. For purposes of calculating
installments, the Account shall be valued as of November 30 each year, and the
subsequent installments will be adjusted for the next Plan Year according to
procedures established by the Administrator.
7.2 Form of Retirement Benefits. The entire vested Accounts shall be
paid monthly over a period of one hundred eighty (180) months or the number of
whole months required to result in a monthly benefit of three hundred dollars
($300.00), if less. Notwithstanding anything herein to the contrary, the
Participant may elect one of the following alternative forms of payment:
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(i) In a lump sum, or
(ii) In installments paid monthly over a period of sixty (60),
one hundred twenty (120), or one hundred eighty (180) months, or
(iii) In a lump sum of a portion of the vested Accounts upon
Retirement with the balance in installments paid monthly over a period of sixty
(60), one hundred twenty (120), or one hundred eighty (180) months, or
(iv) In installments paid annually over a period of five (5),
ten (10), or fifteen (15) years, or
(v) In a lump sum of a portion of the vested Accounts upon
Retirement with the balance in installments paid annually over a period of five
(5), ten (10), or fifteen (15) years.
A Participant's election of an alternative form of payment must be made
in the Participation Election or in such other form as designated by the
Administrator. A Participant may make a separate election with respect to the
Participant's Deferral Account and Discretionary Account.
7.3 Commencement of Benefits. Payments will commence within ninety (90)
days following the last business day of the month in which Retirement occurs,
unless a later date is otherwise elected by the Participant, which date shall
not be later than the earlier of five (5) years after the Plan Year in which
Retirement occurs or age seventy (70). Participants may elect an alternative
form and time of payment as available under Section 7.2 or 7.3 by written
election filed with the Administrator; provided, however, that if the
Participant files the election less than thirteen (13) months (or such other
time as determined by the Administrator) prior to the date benefit payments are
to commence, that portion of the Participant's vested Account that is subject to
such election shall be reduced by ten percent (10%).
7.4 Small Benefit Exception. Notwithstanding any of the foregoing, if
the sum of all vested benefits payable to the Participant is less than or equal
to ten thousand dollars
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($10,000), the Company may, in its sole discretion, elect to pay such benefits
in a single lump sum.
ARTICLE 8
TERMINATION BENEFITS
8.1 If Termination of Employment occurs prior to Retirement, the
Company shall pay to the Participant a termination benefit equal to the balance
of the vested Accounts as of the Valuation Date. The Company shall pay the
termination benefits in a single lump sum within ninety (90) days following the
last business day of the month in which such Termination of Employment occurs.
ARTICLE 9
SURVIVOR BENEFITS
9.1 Pre-Retirement Survivor Benefit. If the Participant dies prior to
the date Retirement benefits commence, the Company shall pay to the
Participant's Beneficiary within ninety (90) days after the last business day of
the month in which the Participant's death occurs, a benefit equal to the
balance of the Participant's vested Accounts as of the Valuation Date.
9.2 Post-Retirement Survivor Benefit. If the Participant dies after the
time Retirement Benefits have commenced, the Company shall pay to the
Participant's Beneficiary an amount equal to the remaining vested benefits
payable to the Participant under the Plan over the same period such benefits
would have been paid to the Participant, in which event the Company shall credit
interest on the unpaid balance of the vested Accounts at the Crediting Rate in
effect during such period.
9.3 Changing Form of Benefit. Beneficiaries may petition the Company
once, and only after the death of the Participant, for a change in the form of
Retirement Benefits. The Company may, in its sole and absolute discretion,
choose to grant or deny such a petition, and in the case of installment
payments, reduce the period to the number of whole months required to result in
a monthly benefit of at least three hundred dollars ($300.00).
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9.4 Small Benefit Exception. Notwithstanding any of the foregoing, in
the event the sum of all vested benefits payable to the Beneficiary is less than
or equal to ten thousand dollars ($10,000), the Company may, in its sole
discretion, elect to pay such benefits in a single lump sum.
ARTICLE 10
DISABILITY
10.1 For purposes of the Plan, a Participant shall be considered to
have entered Retirement upon a determination by the Administrator that the
Participant has suffered a Disability, and the Company shall pay the benefit
described in Article 7.
ARTICLE 11
CHANGE IN CONTROL
11.1 Election. At the time a Participant is completing the initial
Participation Election, the Participant may elect that, if a Change in Control
occurs, the Participant (or after the Participant's death the Participant's
Beneficiary) shall receive a lump sum payment of the balance of the Accounts
within thirty (30) days after the Change of Control. Such balance shall be
determined as of the last business day of the month thirty (30) days prior to
the month in which the Change of Control occurs. Notwithstanding the foregoing,
a Participant may make or revoke an election under this Section 11.1 at the
times and upon the terms and conditions established by the Administrator from
time to time.
11.2 Benefit Reduction on Withdrawal. If a Participant has not made the
election described in Section 11.1 above and, within two (2) years after a
Change of Control, the Participant (or Beneficiary) elects to receive a
distribution of the balance of the vested Accounts (determined as of the last
business day of the month in which such election is received by the
Administrator), the lump sum payment shall be reduced by an amount equal to five
percent (5%) of the total balance of the vested Accounts (instead of the ten
percent (10%) reduction otherwise provided for in Section 12.2, which amounts
shall be forfeited to the Company) and shall be paid within ninety (90)
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days following the last business day of the month in which such election is
received by the Administrator. If a Participant elects such a withdrawal, any
ongoing Annual Deferral shall cease, and the Participant may not again be
designated as an Eligible Employee with respect to Annual Deferrals until one
entire Plan Year following the Plan Year in which such withdrawal was made has
elapsed.
ARTICLE 12
SCHEDULED AND UNSCHEDULED
WITHDRAWALS OF EMPLOYEE DEFERRALS
12.1 Scheduled Withdrawals.
12.1.1 Election. A Participant may, when making a
Participation Election, elect to receive at a specified year in the future, a
distribution while employed of all or a percentage of the Participant's Deferral
Account attributable to Annual Deferrals, excluding earnings, to be made in
subsequent Plan Years. The election of a Scheduled Withdrawal shall apply only
to prospective Annual Deferrals, excluding earnings, and not to any previous
Annual Deferrals or earnings thereon.
12.1.2 Timing and Form of Withdrawal. The year specified for
the Scheduled Withdrawal must be at least two (2) entire Plan Years after the
commencement of Annual Deferral Commitments covered by the Participation
Election. The Company shall make a lump sum distribution of the amount elected
in February of the Plan Year specified.
12.1.3 Remaining Deferral Account. The remainder, if any, of
the Participant's Deferral Account shall continue in effect and shall be
distributed in the future according to the terms of the Plan.
12.2 Unscheduled Withdrawals.
12.2.1 Election. A Participant (or Beneficiary if the
Participant is deceased) may request an Unscheduled Withdrawal of all or a
portion of the entire vested amount credited to the Participant's Deferral
Account, which shall be paid in a single lump sum within ninety (90) days
following the last business day of the month in which such election is received
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by the Administrator; provided, however, that (i) the minimum withdrawal shall
be twenty-five percent (25%) of the Deferral Account balance, (ii) an election
to withdraw seventy-five percent (75%) or more of the balance shall be deemed to
be an election to withdraw the entire balance, (iii) such an election may be
made only once in a Plan Year, and (iv) such Deferral Account shall be valued as
of the last business day of the month in which the request was received by the
Administrator.
12.2.2 Withdrawal Penalty. There shall be a forfeiture from
the Deferral Account prior to an Unscheduled Withdrawal equal to ten percent
(10%) of the Unscheduled Withdrawal (which amount shall be forfeited to the
Company). If a Participant elects such a withdrawal, any ongoing Annual
Deferrals shall cease, and the Participant may not again be designated as an
Eligible Employee with respect to Annual Deferrals until one entire Plan Year
following the Plan Year in which such withdrawal was made has elapsed.
12.2.3 Small Benefit Exception. Notwithstanding any of the
foregoing, if the sum of all benefits payable to the Participant or Beneficiary
who has requested the Unscheduled Withdrawal is less than or equal to ten
thousand dollars ($10,000), the Company may, in its sole discretion, elect to
pay out the entire Deferral Account (reduced by the ten percent (10%) penalty)
in a single lump sum.
ARTICLE 13
RESTORATION OF BENEFITS
13.1 Purpose. The purpose of this Article 13 is to restore retirement
benefits to certain Participants whose benefit under the Retirement Plan is
reduced due to participation in the Plan. The benefits under this Article 13
shall be determined without reference to Articles 2 through 12 and Article 16
unless otherwise specifically referenced in this Article 13.
13.2 Eligibility. A Participant shall be eligible for a benefit under
this Article 13 if:
(i) The Participant is also a participant in the Retirement Plan;
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(ii) The Participant has made employee deferrals under Articles 2
and 3; and
(iii) The Participant is not eligible to participate in the Milacron
Supplemental Pension Plan, Milacron Supplemental Retirement
Plan, Milacron Supplemental Executive Retirement Plan or the
Milacron Supplemental Executive Pension Plan.
13.3 Benefit. A Participant's vested benefit under this Article 13
shall be a monthly amount equal to the amount determined under the terms of the
Retirement Plan as of the Participant's or surviving spouse's "benefit
commencement date" (as defined in the Retirement Plan) in the form of payment as
elected or determined under the Retirement Plan, calculated using the
Participant's "highest average compensation" (as defined under the Retirement
Plan, except that "compensation" for a year shall include employee deferrals
made under Articles 2 and 3 of the Plan with respect to that year) reduced by
the monthly amount determined as of the Participant's or surviving spouse's
benefit commencement date under the Retirement Plan, in the form of payment as
elected or determined under the Retirement Plan, calculated without regard to
this Article 13.
13.4 Benefit Commencement Date and Payment Options. Benefits under this
Article 13 shall commence at the same time and in the same payment form as the
Participant or surviving spouse has elected under the Retirement Plan and shall
cease at the time benefits cease under the Retirement Plan. Notwithstanding the
foregoing, the Company may, in its sole discretion, elect to pay such benefits
in a single lump sum determined using the actuarial assumptions used to
calculate lump sum amounts as set forth in the Retirement Plan.
13.5 Vesting. Unless forfeited pursuant to Sections 13.6 or 13.7, a
Participant's benefit under the Article 13 shall become vested at the same time
the Participant's benefit under the Retirement Plan becomes vested.
13.6 Fraud. In the event that a Participant shall at any time be
dismissed for, or convicted of a crime involving, dishonesty or fraud on his
part in his relationship with the Company and its subsidiaries, all benefits
which would otherwise be payable to him under this Article 13 shall be
forfeited.
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13.7 Competition. By accepting payment of any benefit under this
Article 13, the Participant agrees not to be employed, or consult, in any
business which is, or is about to be, engaged in a business of the same or
substantially the same nature as the businesses of the Company and its
subsidiaries without prior written consent of the Company, and breach of this
agreement by the Participant shall be cause for termination of payment of
benefits under this Article 13.
ARTICLE 14
CONDITIONS RELATED TO BENEFITS
14.1 Nonassignability. The benefits provided under the Plan may not be
alienated, assigned, transferred, pledged or hypothecated by or to any person or
entity, at any time or any manner whatsoever. These benefits shall be exempt
from the claims of creditors of any Participant or other claimants and from all
orders, decrees, levies, garnishment or executions against any Participant to
the fullest extent allowed by law.
14.2 Financial Hardship Distribution. Upon a petition from the
Participant to the Administrator and a subsequent finding by the Administrator
that the Participant or the Beneficiary has suffered a Financial Hardship, the
Administrator may in its sole discretion, permit the Participant to cease any
ongoing deferrals and accelerate distribution of the Participant's Deferral
Account under the Plan in the amount reasonably necessary to alleviate such
Financial Hardship with such amount paid within ninety (90) days following the
last business day of the month in which the petition is received by the
Administrator. If a distribution is to be made to a Participant on account of
Financial Hardship, the Participant may not make deferrals under the Plan until
one entire Plan Year following the Plan Year in which a distribution based on
Financial Hardship was made has elapsed.
14.3 No Right to Company Assets. The benefits paid under the Plan shall
be paid from the general funds of the Company, and the Participant and any
Beneficiary shall be no more than unsecured general creditors of the Company
with no special or prior right to any assets of the Company for payment of any
obligations hereunder.
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14.4 Protective Provisions. The Participant shall cooperate with the
Company by furnishing any and all information requested by the Administrator, in
order to facilitate the payment of benefits hereunder, taking such physical
examinations as the Administrator may deem necessary and taking such other
actions as may be requested by the Administrator. If the Participant refuses to
cooperate, the Company shall have no further obligation to the Participant under
the Plan.
14.5 Withholding. The Participant or the Beneficiary shall make
appropriate arrangements with the Company for satisfaction of any federal, state
or local income tax withholding requirements and Social Security or other
employee tax requirements applicable to the payment of benefits under the Plan.
If no other arrangements are made, the Company may provide, at its discretion,
for such withholding and tax payments as may be required.
ARTICLE 15
ADMINISTRATION OF PLAN
15.1 The Administrator shall administer the Plan and interpret,
construe and apply its provisions in accordance with its terms. The
Administrator shall further establish, adopt or revise such rules and
regulations as it may deem necessary or advisable for the administration of the
Plan. All decisions of the Administrator shall be final and binding. The
individuals serving on the Personnel and Compensation Committee of the Company's
Board of Directors, and their designees for purposes of administering the Plan,
shall, except as prohibited by law, be indemnified and held harmless by the
Company from any and all liabilities, costs, and expenses (including legal
fees), to the extent not covered by liability insurance arising out of any
action taken by any member of the Committee with respect to the Plan, unless
such liability arises from the individual's own gross negligence or willful
misconduct.
ARTICLE 16
BENEFICIARY DESIGNATION
16.1 Designation. The Participant shall have the right, at any time, to
designate any person or persons as
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Beneficiary (both primary and contingent) to whom payment under the Plan shall
be made in the event of the Participant's death. The Beneficiary designation
shall be effective when it is submitted in writing to the Administrator during
the Participant's lifetime on a form prescribed by the Administrator,
16.2 Revocation. The submission of a new Beneficiary designation shall
cancel all prior Beneficiary designations. Any finalized divorce or marriage of
a Participant subsequent to the date of a Beneficiary designation shall revoke
such designation, unless in the case of divorce the previous spouse was not
designated as Beneficiary and unless in the case of marriage the Participant's
new spouse has previously been designated as Beneficiary. The spouse of a
married Participant shall consent to any designation of a Beneficiary other than
the spouse.
16.3 Failure to Designate. If a Participant fails to designate a
Beneficiary as provided above, or if the Beneficiary designation is revoked by
marriage, divorce, or otherwise without execution of a new designation, or if
every person designated as Beneficiary predeceases the Participant or dies prior
to complete distribution of the Participant's benefits, then the Administrator
shall direct the distribution of such benefits to the Participant's estate.
ARTICLE 17
AMENDMENT AND TERMINATION OF PLAN
17.1 Amendment of Plan. Subject to the terms of Article 17.3, the
Company may at any time amend the Plan in whole or in part, provided, however,
that such amendment (i) shall not decrease the balance of the Participant's
Account at the time of such amendment and (ii) shall not retroactively decrease
the applicable Crediting Rates of the Plan prior to the time of such amendment.
The Company may amend the Crediting Rates of the Plan prospectively, or the
method used for the determination of Crediting Rates, in which case the Company
shall notify the Participant of such amendment in writing within thirty (30)
days after such amendment.
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17.2 Termination of Plan. Subject to the terms of Section 17.3, the
Company may at any time terminate the Plan. If the Company terminates the Plan,
the date of such termination shall be treated as the date of Termination of
Employment for the purpose of calculating Plan benefits, and the Company shall
pay to the Participant the vested benefits the Participant is entitled to
receive under the Plan in either a lump sum within ninety (90) days or in
installments over three (3) years, as determined by the Administrator.
17.3 Amendment or Termination After a Change in Control.
Notwithstanding the foregoing, the Company shall not amend or terminate the Plan
without the prior written consent of affected Participants for a period of two
calendar years following a Change in Control and shall not thereafter terminate
the Plan or amend those provisions of the Plan that affect the Crediting Rate or
the form or commencement of payment of any Participant's or Beneficiary's
Accounts, including but not limited to Articles 7 thru 10 and Article 12,
without the prior written consent of affected Participants and Beneficiaries of
deceased Participants.
17.4 Company Action. Except as provided in Section 17.3, the Company's
power to amend or terminate the Plan shall be exercisable by the Company's Board
of Directors or by the Administrator.
17.5 Constructive Receipt Termination. In the event the Administrator
determines that amounts deferred under the Plan have been constructively
received by Participants and must be recognized as income for federal income tax
purposes, the Plan shall terminate and distributions shall be made to
Participants in accordance with the provisions of Section 17.2 or as may be
determined by the Administrator. The determination of the Administrator under
this Section 17.5 shall be binding and conclusive.
- 18 -
ARTICLE 18
MISCELLANEOUS
18.1 Successors of the Company. The rights and obligations of the
Company under the Plan shall inure to the benefit of, and shall be binding upon,
the successors and assigns of the Company.
18.2 ERISA Plan. The Plan is intended to be an unfunded plan maintained
primarily to provide deferred compensation benefits for "a select group of
management or highly compensated employees" within the meaning of Sections 201,
301 and 401 of ERISA and therefore to be exempt from Parts 2, 3 and 4 of Title I
of ERISA.
18.3 Trust. The Company shall be responsible for the payment of all
benefits under the Plan. At its discretion, the Company may establish one or
more grantor trusts for the purpose of providing for payment of benefits under
the Plan. Such trust or trusts may be irrevocable, but the assets thereof shall
be subject to the claims of the Company's creditors. Benefits paid to the
Participant from any such trust shall be considered paid by the Company for
purposes of meeting the obligations of the Company under the Plan.
18.4 Employment Not Guaranteed. Nothing contained in the Plan nor any
action taken hereunder shall be construed as a contract of employment or as
giving any Participant any right to continued employment with the Company or its
subsidiaries.
18.5 Gender, Singular and Plural. All pronouns and variations thereof
shall be deemed to refer to the masculine, feminine, or neuter, as the identity
of the person or persons may require. As the context may require, the singular
may be read as the plural and the plural as the singular.
18.6 Captions. The captions of the articles and paragraphs of the Plan
are for convenience only and shall not control or affect the meaning or
construction of any of its provisions.
18.7 Validity. If any provision of the Plan is held invalid, void or
unenforceable, the same shall not affect, in any
- 19 -
respect whatsoever, the validity of any other provisions of the Plan.
18.8 Waiver of Breach. The waiver by the Company of any breach of any
provision of the Plan by the Participant shall not operate or be construed as a
waiver of any subsequent breach by the Participant.
18.9 Applicable Law. The Plan shall be governed and construed in
accordance with the laws of Ohio except where the laws of Ohio are preempted by
ERISA.
18.10 Notice. Any notice or filing required or permitted to be given to
the Company under the Plan shall be sufficient if in writing and hand-delivered,
or sent by first class mail to the principal office of the Company, directed to
the attention of the Administrator. Such notice shall be deemed given as of the
date of delivery, or, if delivery is made by mail, as of the date shown on the
postmark.
18.11 Incapacity. If a Participant entitled to receive a benefit under
this Plan is deemed by the Company or is adjudged by a court of competent
jurisdiction to be legally incapable of giving valid receipt and discharge for
such benefit, such benefit shall be paid to such person or persons as the
Company shall designate or to the duly appointed guardian or other legal
representative of such Participant. The payment of such benefit shall, to the
extend made, be deemed a complete discharge for such benefit payment under this
Plan.
ARTICLE 19
CLAIMS AND REVIEW PROCEDURE
19.1 Claims Procedure. The Company shall notify a Participant in
writing, within ninety (90) days after his or her written application for
benefits, of his or her eligibility or noneligibility for benefits under the
Plan. If the Company determines that a Participant is not eligible for benefits
or full benefits, the notice shall set forth (i) the specific reasons for such
denial, (ii) a specific reference to the provisions of the Plan on which the
denial is based, (iii) a description of any additional information or material
necessary for the claimant to perfect his or her claim, and a description
- 20 -
of why it is needed, and (iv) an explanation of the Plan's claims review
procedure and other appropriate information as to the steps to be taken if the
Participant wishes to have the claim reviewed. If the Company determines that
there are special circumstances requiring additional time to make a decision,
the Company shall notify the Participant of the special circumstances and the
date by which a decision is expected to be made, and may extend the time for up
to an additional ninety-day period.
19.2 Review Procedure. If a Participant is determined by the Company
not to be eligible for benefits, or if the Participant believes that he or she
is entitled to greater or different benefits, the Participant shall have the
opportunity to have such claim reviewed by the Company by filing a petition for
review with the Company within sixty (60) days after receipt of the notice
issued by the Company. Said petition shall state the specific reasons which the
Participant believes entitle him or her to benefits or to greater or different
benefits. Within sixty (60) days after receipt by the Company of the petition,
the Company shall afford the Participant (and counsel, if any) an opportunity to
present his or her position to the Company orally or in writing, and the
Participant (or counsel) shall have the right to review the pertinent documents.
The Company shall notify the Participant of its decision in writing within the
sixty-day period, stating specifically the basis of its decision, written in a
manner calculated to be understood by the Participant and the specific
provisions of the Plan on which the decision is based. If, because of the need
for a hearing, the sixty-day period is not sufficient, the decision may be
deferred for up to another sixty-day period at the election of the Company, but
notice of this deferral shall be given to the Participant. In the event of the
death of the Participant, the same procedures shall apply to the Participant's
Beneficiaries.
- 21 -
SCHEDULE A
<Table>
<Caption>
Eligible Employee Amount Vesting
- ----------------- ------ -------
1. Jerry R. Lirette An amount equal to the 4% times the The January 1 of the year in
Participant's "Covered Compensation" (as defined which the Eligible Employee
under the Milacron Retirement Savings Plan as attains age 55 and 10 years
modified by paragraph F-3 of Supplement F, of "Vesting Service" (as
including employee deferrals under the Plan) for defined under the Milacron
the Plan Year in excess of the compensation Retirement Savings Plan),
limit under Section 401(a)(17) of the Internal dies or incurs a Disability.
Revenue Code of 1986, as amended, to be credited
annually with respect to Covered Compensation
received from January 28, 1996 to July 30, 1998.
</Table>
- 22 -
MILACRON COMPENSATION DEFERRAL PLAN
RULES AND PROCEDURES
Effective January 1, 1995
ARTICLE 4
COMPANY MATCHING AND BASE CREDITS
1. Participants who are also participants under the Milacron Retirement
Savings Plan and who lose "Employer Matching Contributions" or "Salary
Deferral Matching Contributions" under the plan due to employee
deferrals under this Plan, will receive matching credits equal to the
amount of matching contributions lost under such plan, as determined by
the Administrator.
2. Basic Credits will be made to the Plan, as follows:
a. Participants who are also participants under the Milacron
Retirement Savings Plan and who lose "Employer Basic
Contributions" under the Milacron Retirement Savings Plan due
to employee deferrals under this Plan, will receive Basic
Credits equal to the amount of Employer Basic Contributions
lost under such plan, as determined by the Administrator.
b. Participants who are also participants under the Supplement of
the Milacron Retirement Savings Plan applicable to DME Company
or Uniloy Milacron and who are entitled to but do not receive
the additional 1 1/2% or 2%, as applicable, additional
"Employer Basic Contribution" pursuant to such Supplements,
will receive Basic Credits equal to such amount, as determined
by the Administrator.
-23-
SCHEDULE B
A "Qualifying Termination" shall mean (i) a termination of the individual's
employment by the Company for any reason other than for "Cause" or "Disability"
(as defined below) during the "Protection Period" (as defined below), or (ii)
the individual's termination of employment for "Good Reason" (as defined below)
during the Protection Period.
(a) Disability. If the individual is absent from duties with the
Company on a full-time basis for eighteen consecutive months due to a physical
or mental incapacity, and the individual has not returned to the full-time
performance of the individual's duties within thirty (30) days after written
Notice of Termination is given to the individual by the Company, such
termination shall be considered to be termination by the Company for
"Disability" for purposes of this Exhibit.
(b) Cause. The Company may terminate the individual's employment for
Cause. For purposes of this Schedule only, the Company shall have "Cause" to
terminate the individual's employment hereunder only on the basis of (i) the
individual's fraud on, or misappropriation or embezzlement of assets of, the
Company that causes material harm to the Company or (ii) the individual's
willful and continued failure to substantially perform the individual's duties
hereunder (other than any such failure resulting from the individual's mental or
physical incapacity or mental illness or any such actual or anticipated failure
after the issuance of a Notice of Termination, as defined in Paragraph (d), by
the individual for Good Reason, as defined below); provided, however, that
"Cause" shall occur with respect to clause (ii) of this sentence only if such
action constituting Cause has not been corrected or cured by the individual
within 30 days after the individual has received written notice from the Company
of the Company's intent to terminate the individual's employment for Cause and
specifying in detail the basis for such termination. For purposes of this
Paragraph, no act, or failure to act, on the individual's part shall be
considered "willful" unless done, or omitted to be done, by the individual in
bad
-24-
faith and without reasonable belief that the individual's action or omission was
in the best interests of the Company. Notwithstanding the foregoing, the
individual shall not be deemed to have been terminated for Cause unless and
until delivery to the individual of a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of the
Board at a meeting of the Board called and held for the purpose (after
reasonable notice to the individual and an opportunity for the individual,
together with the individual's counsel, to be heard before the Board), finding
that in the good faith opinion of the Board the individual was guilty of conduct
set forth in clause (i) or (ii) of this Paragraph and specifying the particulars
thereof in detail.
(c) Good Reason. The individual shall be entitled to terminate the
individual's employment for Good Reason at any time following a Change in
Control. For purposes of this Schedule, "Good Reason" shall exist in the event
of the occurrence of any of the following without the individual's express prior
written consent:
(i) any diminution of, or the assignment to the individual of
duties inconsistent with, the individual's position, duties, responsibilities
and status with the Company immediately prior to a Change in Control, an adverse
change in the individual's titles or offices as in effect immediately prior to a
Change in Control, or any removal of the individual from, or any failure to
reelect the individual to, any of such positions, except in connection with the
individual's termination of employment for Disability or Cause or as a result of
the individual's death or by the individual other than for Good Reason;
(ii) a reduction by the Company in the individual's base
salary as in effect on the date of a Change in Control or as the same may be
increased from time to time during the term of any agreement between the Company
and the individual;
-25-
(iii) the Company's failure to continue any benefit plan or
arrangement (including, without limitation, the Company's life insurance,
post-retirement benefits, and comprehensive medical plan coverage) in which the
individual participated at the time of a Change in Control (or any other plans
providing the individual with substantially similar benefits) (hereinafter
referred to as "Benefit Plans"), or any action by the Company that would
adversely affect the individual's participation in or materially reduce the
individual's benefits under any such Benefit Plan or deprive the individual of
any material fringe benefit enjoyed by the individual at the time of a Change in
Control;
(iv) the Company's failure to continue in effect, or continue
payments under, any incentive plan or arrangement (including, without
limitation, any equity-based plan or arrangement) in which the individual
participated at the time of a Change in Control (hereinafter referred to as
"Incentive Plans") or any action by the Company that would adversely affect the
individual's participation in any such Incentive Plans or reduce the
individual's benefits under any such Incentive Plans;
(v) a relocation of the Company's principal executive offices
to a location outside the Cincinnati, Ohio metropolitan area or relocation of
the individual's primary workplace to any place other than the location at which
the individual performed the individual's duties immediately prior to a Change
in Control;
(vi) the Company's failure to provide the individual with the
number of paid vacation days to which the individual was entitled at the time of
a Change in Control;
(vii) the Company's material breach of any provision of any
agreement between the Company and the individual regarding severance benefits
following a Change in Control;
(viii) the Company's purported termination of the individual
which is not effected pursuant to a Notice of Termination satisfying the
requirements of Paragraph (d);
-26-
(d) Notice of Termination. Any purported termination of the individual
by the Company or by the individual shall be communicated by written Notice of
Termination to the other party in accordance with Paragraph (f) hereof. For
purposes of this Schedule, a "Notice of Termination" shall mean a notice that
indicates the specific termination provision in this Schedule relied upon and
the facts, if any, supporting application of such provision.
(e) Date of Termination: Dispute Concerning Termination. "Date of
Termination" shall mean (i) if the individual's employment is terminated for
Disability, thirty (30) days after Notice of Termination is given (provided that
the individual has not returned to the performance of the individual's duties on
a full-time basis during such thirty (30) day period) or (ii) if the
individual's employment is terminated by the Company for any reason other than
Disability or by the individual for any reason, the date specified in the Notice
of Termination (which, in the case of a termination by the Company shall not be
less than thirty (30) days, and in the case of a termination by the individual
shall not be more than sixty (60) days, respectively, from the date such Notice
of Termination is given); provided, however, that if the party receiving the
Notice of Termination notifies the other party within thirty (30) days after the
date such Notice of Termination is given that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute is
finally resolved, either by mutual written agreement of the parties or by a
binding arbitration award referred to in Paragraph (g); and provided, further
that the Date of Termination shall be extended by a notice of dispute only if
such notice is given in good faith and the party giving such notice shall pursue
the resolution of such dispute with reasonable diligence. The Company shall
continue the individual as a participant in the plan until the dispute is
finally resolved in accordance with this Schedule. For purposes of determining
whether any Qualifying Termination has occurred during the Protection Period,
the date a Notice of Termination is
-27-
given pursuant to this Schedule shall be deemed the date of the individual's
Qualifying Termination.
(f) Notice. For the purposes of this Schedule, notices and all other
communications provided for in the Schedule shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:
(i) if, to the individual, to the individual's current address
on file with the Company;
(ii) if, to the Company, to: Milacron Inc. 4701 Marburg Avenue
Cincinnati, Ohio 45209
Attn: Secretary
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notice of change of address shall be
effective only upon receipt.
(g) Arbitration. Any dispute or controversy arising under or in
connection with this Schedule shall be settled exclusively by arbitration in
Cincinnati, Ohio in accordance with the rules of (but not necessarily appointed
by) the American Arbitration Association then in effect except as provided
herein. Judgment may be entered on the arbitrator's award in any court having
jurisdiction. No such arbitration proceedings shall be commenced or conducted
until at least sixty (60) days after the parties, in good faith, shall have
attempted to resolve such dispute by mutual agreement; and the parties hereby
agree to endeavor in good faith to resolve any dispute by mutual agreement. If
mutual agreement cannot be attained, any disputing party, by written notice to
the other ("Arbitration Notice") may commence arbitration proceedings. Such
arbitration shall be conducted before a panel of three arbitrators, one
appointed by each party within thirty (30) days after the date of the
Arbitration Notice, and one chosen within sixty (60) days after the date of the
Arbitration Notice by the two arbitrators appointed by the
-28-
disputing parties. Any Cincinnati, Ohio court of competent jurisdiction shall
appoint any arbitrator that has not been appointed within such time periods.
Judgment may include costs and attorneys fees and may be entered in any court of
competent jurisdiction.
(h) Definitions. For purposes of this Schedule, "Company" shall mean
Milacron Inc., "Protection Period" shall mean the 24-month period beginning on
the date of a Change in Control, and "Board" shall mean the Board of Directors
of Milacron Inc. and "Change in Control" shall have the meaning set forth in
Schedule C.
-29-
SCHEDULE C
A "Change in Control" occurs if:
(a) a Person or Group other than a trustee or other fiduciary of
securities held under an employee benefit plan of the Company or any of its
subsidiaries, is or becomes a Beneficial Owner, directly or indirectly, of stock
of the Company representing 20% or more of the total voting power of the
Company's then outstanding stock and securities; provided, however, that for
purposes of this Paragraph (a), the following acquisitions shall not constitute
a Change of Control: (i) any acquisition directly from the Company, (ii) any
acquisition by the Company, (iii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company or (iv) any acquisition by any corporation pursuant to
a transaction which complies with clause (i) of Paragraph (c) of this Schedule.
(b) individuals who, as of the date hereof, constitute the Board of
Directors of the Company (the "Incumbent Board"), cease for any reason to
constitute a majority thereof; provided, however, that any individual becoming a
director whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least 60% of the directors then
comprising the Incumbent Board shall be considered as though such individual was
a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person or Group other than the Board of Directors of the Company;
(c) there is consummated a merger, consolidation or other corporate
transaction, other than (i) a merger, consolidation or transaction that would
result in the voting securities of the Company outstanding immediately prior to
such merger,
-30-
consolidation or transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity
or any parent thereof) at least 66 2/3% of the combined voting power of the
stock and securities of the Company or such surviving entity or any parent
thereof outstanding immediately after such merger, consolidation or transaction,
or (ii) a merger, consolidation or transaction effected to implement a
recapitalization of the Company (or similar transaction) in which no Person or
Group is or becomes the Beneficial Owner, directly or indirectly, of stock and
securities of the Company representing more than 20% of the combined voting
power of the Company's then outstanding stock and securities;
(d) the sale or disposition by the Company of all or substantially all
of the Company's assets other than a sale or disposition by the Company of all
or substantially all of the assets to an entity at least 66 2/3% of the combined
voting power of the stock and securities which is owned by Persons in
substantially the same proportions as their ownership of the Company's voting
stock immediately prior to such sale; or
(e) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company.
"Company" shall mean Milacron Inc. "Person" shall mean any person (as defined in
Section 3(a)(9) of the Securities Exchange Act (the "Exchange Act"), as such
term is modified in Section 13(d) and 14(d) of the Exchange Act) other than (i)
any employee plan established by the Company, (ii) any affiliate (as defined in
Rule 12b-2 promulgated under the Exchange Act) of the Company, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by stockholders
of the Company in substantially the same proportions as their ownership of the
Company. "Group" shall mean any group as defined in Section 14(d)(2) of the
Exchange Act. "Beneficial Owner" shall mean beneficial owner as defined in Rule
13d-3 under the Exchange Act.
-31-