EXHIBIT 10-R
TRUE VALUE COMPANY
SUPPLEMENTAL RETIREMENT PLAN
(As Amended and Restated Effective January 1, 2005)
TABLE OF CONTENTS
PAGE
ARTICLE I PURPOSE AND EFFECTIVE DATE............................... 1
1.1 History and Purpose............................... 1
1.2 Effective Date.................................... 1
ARTICLE II DEFINITIONS.............................................. 2
2.1 "Actuarial Equivalent"............................ 2
2.2 "Administrator"................................... 2
2.3 "Beneficiary"..................................... 2
2.4 "Board"........................................... 2
2.5 "Cause"........................................... 2
2.6 "Change in Corporate Structure"................... 2
2.7 "Code"............................................ 2
2.8 "Company"......................................... 2
2.9 "Compensation".................................... 2
2.10 "Disability"...................................... 3
2.11 "ERISA"........................................... 3
2.12 "Final Average Compensation"...................... 3
2.13 "Good Reason"..................................... 4
2.14 "Grandfathered Participant"....................... 4
2.15 "Officer"......................................... 4
2.16 "Participant"..................................... 4
2.17 "Plan"............................................ 4
2.18 "Predecessor Corporation"......................... 4
2.19 "Qualified Retirement Plan"....................... 4
2.20 "Termination Date"................................ 5
2.21 "Unreduced 2004 Benefit".......................... 5
2.22 "Years of Service"................................ 5
ARTICLE III PARTICIPATION............................................ 6
3.1 Eligibility....................................... 6
3.2 Condition of Participation........................ 6
ARTICLE IV PLAN BENEFITS............................................. 7
4.1 Amount of Benefit................................. 7
4.2 Vesting........................................... 9
4.3 Death Benefit..................................... 9
4.4 Effect of Trust................................... 10
ARTICLE V PAYMENT OF BENEFITS........................................ 11
5.1 Payment of Benefits............................... 11
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TABLE OF CONTENTS
(continued)
PAGE
5.2 Withholding....................................... 12
5.3 Change in Corporate Structure..................... 12
ARTICLE VI ADMINISTRATION............................................ 13
6.1 Authority of Administrator........................ 13
6.2 Participant's Duty to Furnish Information......... 13
6.3 Claims Procedure.................................. 13
ARTICLE VII AMENDMENT AND TERMINATION................................ 14
ARTICLE VIII MISCELLANEOUS.......................................... 15
8.1 No Implied Rights................................. 15
8.2 No Employment Rights.............................. 15
8.3 Unfunded Plan..................................... 15
8.4 Nontransferability................................ 15
8.5 Offset............................................ 16
8.6 Facility of Payment............................... 16
8.7 Successors and Assigns............................ 16
8.8 Applicable Law.................................... 16
EXHIBIT A ELIGIBLE OFFICERS
EXHIBIT B GRANDFATHERED PARTICIPANTS AS OF JANUARY 1, 2005
ii
TRUE VALUE COMPANY
SUPPLEMENTAL RETIREMENT PLAN
(As Amended and Restated Effective January 1, 2005)
ARTICLE I
PURPOSE AND EFFECTIVE DATE
1.1 History and Purpose. The True Value Company Supplemental Retirement
Plan was previously established by True Value Company to assist in providing
retirement and other benefits to certain employees of the Company and its
subsidiaries. The Plan is not intended to qualify under Section 401(a) of the
Code or to be subject to Parts 2, 3, or 4 of Title I of ERISA. The Plan is
maintained for the purpose of providing supplemental retirement benefits for
Company Officers within the meaning of Section 301(a)(3) of ERISA. This amended
and restated plan document effective January 1, 2005 implements certain changes
to the benefit formula, eligibility, vesting and distribution provisions of the
Plan.
1.2 Effective Date. The following provisions constitute an amendment and
restatement of the Plan as of January 1, 2005; the "Effective Date" of the Plan
as set forth herein.
ARTICLE II
DEFINITIONS
2.1 "Actuarial Equivalent" means a payment whose actuarial reserve (the
amount required to provide such payment) as of a specified date is equal to the
actuarial reserve as of the same date to provide another form of payment,
determined using the mortality and interest factors set forth in the Qualified
Retirement Plan.
2.2 "Administrator" means the Chief Executive Officer of the Company or
the individual or committee appointed by the Chief Executive Officer to act as
the Administrator under the Plan.
2.3 "Beneficiary" means the person(s) or entity designated to receive a
Participant's benefit under the Plan in the event of the Participant's death. If
the Participant does not designate one or more Beneficiaries to receive his or
her Plan benefits, or none of the Participant's designated Beneficiaries is
living at the time of the Participant's death, the Participant's Beneficiary
shall be his or her beneficiary under the Qualified Retirement Plan and, if the
Participant does not have a beneficiary under the Qualified Plan, the
Beneficiary under this Plan shall be his or her estate.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Cause" means (i) the willful engaging by the Participant in conduct
which is materially injurious to the Company, monetarily or otherwise, (ii) the
Participant's conviction of a felony in connection with the Participant's
employment with the Company, (iii) the Participant's embezzlement or
misappropriation of the Company's money or property, or (iv) the finding by the
Securities and Exchange Commission or other government regulatory agency that
the Participant has violated a rule or policy of such agency in connection with
his or her employment with the Company and its subsidiaries.
2.6 "Change in Corporate Structure" means the occurrence of any of the
following events:
(a) a merger, consolidation, reorganization, or change in control of
the Company with or involving any other corporation or entity, in which the
Company is not the surviving entity; or
(b) the sale or disposition of all or substantially all of the
Company's assets.
2.7 "Code" means the Internal Revenue Code of 1986, as amended.
2.8 "Company" means True Value Company, a Delaware corporation, formerly
known as TruServ Corporation.
2.9 "Compensation" means, for any calendar year, the base salary plus
short-term incentive pay, which is paid for goal or performance achievements
(except as provided below) to the Participant in such year related to prior year
performance, plus pre-tax deferrals of base
2
salary or short-term incentive pay under Sections 401(k) or 125 of the Code or
under a nonqualified deferred compensation plan maintained by the Company during
such year, but excluding amounts earned and/or paid to the Participant under any
long-term incentive plan authorized by the Board during the year, and also
excluding distributions to the Participant from any nonqualified plan during the
year. The Administrator, in its sole discretion, may determine on an individual
Participant basis that payments under specified one-time bonus or incentive
plans and arrangements shall not be treated as eligible Compensation under the
Plan. Notwithstanding the foregoing provisions of this Section 2.9, in no event
shall a Participant's Compensation include continued salary or other
compensation received by the Participant pursuant to the terms of a severance
agreement or similar type arrangement under which the Participant receives
salary or compensation for periods that he or she is not expected to perform any
significant duties for the Company. For purposes of the Plan, Compensation shall
cease on the last date that the Participant performs any significant services on
a full-time basis for the Company, as determined by the Administrator.
Consulting services compensation is excluded from the definition of
Compensation.
2.10 "Disability" means the Participant receives benefits from a long-term
disability benefit plan sponsored by the Company.
2.11 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
2.12 "Final Average Compensation" means:
(a) prior to January 1, 2005, the Participant's average annual
Compensation during the three calendar years in which the Participant's
Compensation was the highest out of the ten calendar years of continuous
employment with the Company or a Predecessor Company immediately preceding such
date. In the event of a Change in Corporate Structure, if the Participant does
not have three calendar years of Compensation in such ten year period, the
Participant's average annual Compensation will be calculated based on the number
of calendar years of Compensation available. If such Participant has less than a
full calendar year of Compensation on such date, the Participant's base salary
paid in the calendar year of the Change in corporate Structure through the
Change in Corporate Structure date shall be used as Final Average Compensation;
and
(b) effective January 1, 2005, the Participant's average annual
Compensation during the contiguous three-calendar-year period in which the sum
of the Participant's Compensation for such three years is the highest out of the
Participant's ten calendar years of continuous employment with the Company or a
Predecessor Company immediately preceding such date. In the event of a Change in
Corporate Structure, if the Participant does not have a contiguous
three-calendar-year period of Compensation in such ten year period, the
Participant's Final Average Compensation will be calculated based on the number
of contiguous calendar years of Compensation available. If such Participant has
less than a full calendar year of Compensation on such date, the Participant's
base salary paid in the calendar year of the Change in Corporate Structure
through the Change in Corporate Structure date shall be used as Final Average
Compensation.
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2.13 "Good Reason" means
(i) the Participant is assigned duties substantially
inconsistent with his or her position, duties, responsibilities or status
immediately prior to the Change in Corporate Structure, or the
Participant's duties are substantially reduced from his or her duties
immediately prior to the Change in Corporate Structure, or
(ii) the Participant's principal office is relocated more than
fifty (50) miles from its location immediately prior to the Change in
Corporate Structure; or
(iii) the Participant's Compensation is reduced from its level
immediately prior to the Change in Corporate Structure.
2.14 "Grandfathered Participant" means a Participant pursuant to Section
3.1(a). Grandfathered Participants as of the Effective Date are listed on
Exhibit B.
2.15 "Officer" means:
(a) prior to January 1, 2005, an employee who is employed in the
position of Vice President or above; and
(b) effective January 1, 2005, an employee who is either (i)
employed in the position of Senior Vice President or above or (ii) a
Grandfathered Participant.
The Officers who are eligible for the Plan from time to time in accordance with
Article III shall be set forth in Exhibit A. The Administrator shall have the
authority to revise Exhibit A and any such revised Exhibit A shall be included
as a part of the Plan without the need for further amendment.
2.16 "Participant" means an Officer who is eligible for participation in
the Plan, determined in accordance with Article III.
2.17 "Plan" means this True Value Company Supplemental Retirement Plan, as
amended and restated effective January 1, 2005, and as amended thereafter. The
Plan was formerly known as the TruServ Corporation Supplemental Retirement Plan.
2.18 "Predecessor Corporation" means, unless the Administrator in its sole
discretion determines otherwise, a corporation or other entity which has been
acquired by the Company or which becomes a part of the Company through merger,
consolidation, reorganization or a similar type transaction.
2.19 "Qualified Retirement Plan" means any pension benefit plan which is
maintained by the Company or any subsidiary thereof which is intended to be
qualified under Section 401(a) of the Code, excluding the True Value Company
Employee Savings and Compensation Deferral Plan and any successor thereto.
2.20 "Termination Date" means (i) the date that a Participant quits,
retires, is discharged or dies, or (ii) the first anniversary of the date on
which the Participant is first absent
4
from service, with or without pay, for any reason such as vacation, sickness,
disability, layoff or leave of absence.
2.21 "Unreduced 2004 Benefit" means the benefit amount calculated as of
December 31, 2004 for a Participant pursuant to Section 4.1(a)(i).
2.22 "Years of Service" means a Participant's number of eligible "years of
service" calculated in accordance with the service crediting rules in the
Qualified Retirement Plan under which the Participant is covered, subject to the
following provisions of this Section 2.22.
(a) For the period prior to January 1, 2005:
(i) through December 14, 2002, Years of Service shall be
calculated using all service from the date the individual first held a
position of Vice President or higher with the Company; and
(ii) beginning on December 15, 2002 through December 31, 2004,
Years of Service shall be calculated using only service during which the
Participant held a position of Vice President or higher with the Company.
(b) For the period on and after January 1, 2005:
(i) for Participants who are Grandfathered Participants, Years
of Service shall be calculated using only service during which the
Participant held a position of Vice President or higher with the Company;
and
(ii) for Participants who are not Grandfathered Participants,
Years of Service shall be calculated using only service during which the
Participant held a position of Senior Vice President or higher with the
Company.
(c) If a Participant was employed by the Company prior to his or her
most-recent hire date, such Participant's Years of Service under the Plan, if
any, shall be only Years of Service after such most-recent hire date.
(d) Notwithstanding any provision of the Plan to the contrary, in no
event shall a Participant be credited with Years of Service for any period that
the Participant is receiving salary or other compensation pursuant to the terms
of a severance agreement or consulting agreement or similar type arrangement.
Service credit shall end on the last date that the Participant performs any
significant services for the Company, as determined by the Administrator, unless
such severance agreement or arrangement specifically provides that a different
date will be used for purposes of this Plan.
5
ARTICLE III
PARTICIPATION
3.1 Eligibility.
(a) Each employee of the Company or its subsidiaries who was a
Participant in the Plan immediately prior to the Effective Date shall be a
Participant on the Effective Date and thereafter, subject to all other terms of
the Plan, and shall be referred to herein as a "Grandfathered Participant". A
Grandfathered Participant who ceases to be a Participant due to a Termination
Date shall not be a Grandfathered Participant upon a subsequent re-hire. Exhibit
B lists each Grandfathered Participant as of the Effective Date.
(b) Each employee of the Company or its subsidiaries who is not a
Grandfathered Participant shall be eligible to participate in the Plan as of the
date such employee is first employed in a position of Senior Vice President or
above on or after the Effective Date.
3.2 Condition of Participation. Notwithstanding any other provision of the
Plan to the contrary, if the Administrator determines that participation by one
or more Participants shall cause the Plan to be subject to Part 2, 3 or 4 of
Subtitle B of Title I of ERISA, the entire interest of such Participants under
the Plan shall be immediately paid to them, or shall otherwise be segregated
from the Plan in the discretion of the Administrator, and such Participants
shall cease to have any interest under the Plan.
6
ARTICLE IV
PLAN BENEFITS
4.1 Amount of Benefit.
(a) A Participant's benefit under the Plan as of a date prior to
January 1, 2005 will be an amount equal to (i) below minus (ii) below:
(i) the product of (A) the Participant's Final Average
Compensation as of such date (pursuant to the Plan's definition of Final
Average Compensation as of such date), multiplied by (B) 33%, multiplied
by (C) the Participant's number of Years of Service earned under the Plan,
with such product not to exceed 660% of the Participant's Final Average
Compensation (pursuant to the Plan's definition of Final Average
Compensation as of such date);
LESS
(ii) the lump sum Actuarial Equivalent value of the benefit
under the Qualified Retirement Plan that was paid or payable to the
Participant as of such date.
(b) Subject to reduction pursuant to Section 4.1(c) below, as of any
date on or after January 1, 2005 a Participant's benefit under the Plan will be
equal to the result of (i) below minus (ii) below.
(i) The amount pursuant to this Subsection (i) shall equal the
greater of the following three amounts:
(A) the Unreduced 2004 Benefit;
(B) the sum of (A) the Unreduced 2004 Benefit plus (B)
the product of (I) the Participant's Final Average Compensation,
multiplied by (II) 25%, multiplied by (III) the Participant's number
of Years of Service earned under the Plan after December 31, 2004;
with such sum not to exceed 500% of the Participant's Final Average
Compensation; or
(C) the product of (A) the Participant's Final Average
Compensation, multiplied by (B) 25%, multiplied by (C) the
Participant's Years of Service earned under the Plan, with such
product not to exceed 500% of the Participant's Final Average
Compensation.
LESS
(ii) The amount pursuant to this Subsection (ii) shall equal
the lump sum Actuarial Equivalent of the benefit under the Qualified
Retirement Plan that was paid or payable to the Participant as of such
date.
7
(c) If a Participant commences receipt of his or her benefit under
the Plan prior to attaining age 65, the Participant's benefit pursuant to
Section 4.1(b) above shall be reduced according to the following schedule;
provided, however, the Participant's benefit shall not be less than the amount
calculated for such Participant as of December 31, 2004 pursuant to Subsection
4.1(a) above:
AGE OF PARTICIPANT
WHEN COMMENCE PERCENT OF UNREDUCED BENEFIT TO BE
RECEIPT OF THE BENEFIT RECEIVED
- ---------------------- ----------------------------------
Receive unreduced benefit pursuant to
Less than Age 55 Subsection 4.1(a) as of December 31,
2004; not yet vested in any additional
benefit (pursuant to Section 4.2 below)
Age 55 or older but less than age 56 50% of the unreduced benefit
Age 56 or older but less than age 57 56% of the unreduced benefit
Age 57 or older but less than age 58 62% of the unreduced benefit
Age 58 or older but less than age 59 68% of the unreduced benefit
Age 59 or older but less than age 60 74% of the unreduced benefit
Age 60 or older but less than age 61 80% of the unreduced benefit
Age 61 or older but less than age 62 84% of the unreduced benefit
Age 62 or older but less than age 63 88% of the unreduced benefit
Age 63 or older but less than age 64 92% of the unreduced benefit
Age 64 or older but less than age 65 96% of the unreduced benefit
Age 65 or older 100% of the unreduced benefit
8
4.2 Vesting.
(a) Subject to Section 5.3 and the provisions of this Section 4.2:
(i) prior to January 1, 2005, a Participant shall be vested in
his or her benefit under the Plan after attaining five Years of Service;
and
(ii) on and after January 1, 2005, a Participant shall be
vested in his or her benefit under the Plan only after attaining (i) five
Years of Service (provided, however, that any Participant in the Plan as
of January 1, 2005 shall be deemed to have no less than one Year of
Service as of such date)) and (ii) age 55;
provided, however, that any Grandfathered Participant who was vested in
his or her benefit under the Plan as of December 31, 2004 pursuant to the terms
of (i) above, shall continue to be vested in his or her benefit calculated
pursuant to Section 4.1(a) above on and after January 1, 2005, subject to the
other terms of the Plan.
(b) If a Participant's Termination Date occurs for reasons of Cause,
the Participant's benefit under the Plan shall be permanently forfeited and no
amount will be payable to the Participant or his or her Beneficiary. If, within
90 days of the Participant's Termination Date, it is determined by the
Administrator (or, if the Administrator is the Chief Executive Officer of the
Company and the Participant at issue is the Chief Executive Officer, then the
Board) that prior to such Termination Date, events (or the absence of events)
existed that would have justified the Participant's employment being terminated
by the Company for Cause, the Participant's Termination Date will be deemed to
be for Cause for purposes of the Plan. If, following payment of a Participant's
Plan benefits, it is found by a court, the Securities and Exchange Commission or
other government agency of competent jurisdiction, that the Participant has
engaged in acts (or omissions) that would have justified the Participant's
employment being terminated for Cause, all amounts previously paid to the
Participant under the Plan shall be repaid to the Company. If the Participant
fails to repay such amount after demand by the Company, the Participant shall be
required to reimburse the Company for any legal fees and other costs incurred by
the Company in obtaining such repayment.
(c) If the Participant terminates employment prior to the date the
Participant is vested in his or her Plan benefits, such benefits shall be
permanently forfeited and if the Participant is later rehired, such Participant
shall be treated as a new Participant for purposes of determining the amount of
benefits payable under the Plan, if any, after his or her rehire date.
4.3 Death Benefit.
(a) If the Participant's Termination Date occurs by reason of death,
the Participant's Beneficiary shall be entitled to a death benefit under the
Plan as provided below, subject to the vesting requirement of Section 4.2 above.
9
(b) If the death occurs prior to January 1, 2005, the death benefit
shall equal:
(i) the Unreduced 2004 Benefit;
(ii) multiplied by 55%;
(iii) less the lump sum Actuarial Equivalent value of the
benefit paid or payable to the Participant's beneficiary, if any, under
the Qualified Retirement Plan as of such Termination Date.
(c) If the death occurs on or after January 1, 2005, the death
benefit shall equal:
(i) the amount calculated pursuant to Subsection 4.1(b)(i)
above;
(ii) multiplied by 55%;
(iii) less the lump sum Actuarial Equivalent value of the
benefit paid or payable to the Participant's beneficiary, if any, under
the Qualified Retirement Plan as of such Termination Date.
(d) If the Participant dies after his or her Termination Date but
prior to the time payment of Plan benefits has been made, payment of the
Participant's benefit under Section 4.1 shall be made to the Beneficiary in lieu
of the death benefit provided under this Section 4.3.
4.4 Effect of Trust. If the Company has established a trust under Section
8.3 for purposes of assisting it in meeting its Plan obligations, then the
amount of any benefits payable from the general assets of the Company under the
Plan pursuant to this Article IV shall be reduced by the amount of any benefits
paid to the Participant or Beneficiary, as applicable, from such trust.
10
ARTICLE V
PAYMENT OF BENEFITS
5.1 Payment of Benefits.
(a) Prior to January 1, 2005, a Participant's benefit determined in
accordance with Section 4.1 shall be paid in a lump sum cash payment 90 days
after the Participant's Termination Date or as soon as administratively
practicable thereafter. If the Participant's Termination Date occurs by reason
of death, the benefit determined in accordance with Section 4.3 shall be paid to
the Participant's Beneficiary in a lump sum cash payment 90 days after the
Participant's Termination Date or as soon as administratively practicable
thereafter. If payment is not made within 120 days of the Participant's
Termination Date, the benefit payable shall accrue interest, compounded
annually, from the 121st day following the Participant's Termination Date until
the date on which payment is made, at the applicable short-term federal rate
(within the meaning of Section 1274(d) of the Code). The short-term federal rate
shall be the rate in effect on the Participant's Termination Date.
Notwithstanding the foregoing provisions of this Section 5.1, the Board, in its
discretion, may defer the payment of benefits under this Section 5.1 to the
extent that it determines such deferral is necessary to prevent a default under
the terms of any financing or similar agreement(s) between the Company and a
lender or group of lenders, or if the Company is already in default under such
an agreement(s) and unable to secure a waiver to make such payment. Any such
deferred payment shall accrue interest as described in the foregoing provisions
of this Section 5.1.
(b) On and after January 1, 2005:
(i) In the discretion of the Administrator after consulting
with the Chairman of the Compensation Committee of the Board (or, if the
Administrator is the Chief Executive Officer of the Company and the
Participant is such Chief Executive Officer, then in the discretion of the
Compensation Committee of the Board), a Participant's benefit determined
in accordance with Section 4.1 may be paid to pursuant to either Section
5.1(a) above or a series of substantially equal payments made no less
frequently than annually over a period of time not to exceed 10 years from
the Termination Date.
(ii) If a benefit is paid pursuant to a series of payments,
the benefit shall earn interest, compounded no less frequently than
annually, at the interest rate for United States Treasury bonds for the
period equal to the period over which the series of benefit payments will
be made, or, if there is no United States Treasury bond for such a period,
then the interest rate for United States Treasury bonds for the period
which is closest to but less than the period over which the series of
benefit payments will be made. The interest rate shall be calculated as of
the last day of the month immediately preceding the day on which the
interest shall be added to the benefit amount.
(iii) Additionally, if a benefit is to be paid pursuant to a
series of payments, a trust shall be established to hold the funds needed
for such benefit, consistent
11
with Section 8.3 below, and the participant shall receive a copy of such
trust document along with detailed description of the number and timing of
the payments.
(c) If a Participant dies prior to receiving all of his or her
payments pursuant to Section 5.1(b), the Participant's Beneficiary shall receive
a lump sum cash payment equal to all of the unpaid payments within 90 days of
the date of death.
5.2 Withholding. All benefits and payments under the Plan are subject to
the withholding of all applicable Federal, state, local and employment taxes.
5.3 Change in Corporate Structure.
(a) Prior to January 1, 2005, As of the effective date of a Change
in Corporate Structure, all Participants shall become fully vested in their
benefits under the Plan. Unless the surviving or successor employer in a Change
in Corporate Structure agrees to continue the Plan or provide Participants with
a substitute nonqualified retirement plan, in either case with terms no less
favorable than those under the Plan as in effect prior to the Change in
Corporate Structure, all Plan benefits shall be paid in a lump sum cash payment
as of the effective date of the Change in Corporate Structure.
(b) On and after January 1, 2005, if a Participant incurs a
Termination Date within the two year period immediately following a Change in
Corporate Structure due to (i) termination by the Company without Cause or
Disability or (ii) termination by the Participant for Good Reason, then such
Participant shall become fully vested in their benefits under the Plan and shall
receive such benefits in a single lump sum cash payment within 90 days after the
Participant's Termination Date.
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ARTICLE VI
ADMINISTRATION
6.1 Authority of Administrator. The Administrator shall have full power
and authority to carry out the terms of the Plan. The Administrator's
interpretation, construction and administration of the Plan, including any
adjustment of the amount or recipient of the payments to be made, shall be
binding and conclusive on all persons for all purposes. Neither the Company,
including its officers, employees or directors, nor the Administrator or the
Board or any member thereof, shall be liable to any person for any action taken
or omitted in connection with the interpretation, construction and
administration of the Plan.
6.2 Participant's Duty to Furnish Information. Each Participant shall
furnish to the Administrator such information as it may from time to time
request for the purpose of the proper administration of this Plan.
6.3 Claims Procedure. If a Participant or Beneficiary ("Claimant") is
denied all or a portion of an expected benefit under this Plan for any reason,
he or she may file a claim with the Administrator. The Administrator shall
notify the Claimant within 90 days of receipt of the claim of allowance or
denial of the claim, unless the Claimant receives written notice from the
Administrator prior to the end of the 90-day period stating that special
circumstances require an extension (of up to 90 additional days) of the time for
decision. The notice of the decision shall be in writing, sent by certified mail
to Claimant's last known address, and if a denial of the claim, shall contain
the following information: (a) the specific reasons for the denial; (b) specific
reference to pertinent provisions of the Plan on which the denial is based; and
(c) if applicable, a description of any additional information or material
necessary to perfect the claim, an explanation of why such information or
material is necessary, and an explanation of the claims review procedure. A
Claimant is entitled to request a review of any denial of his or her claim by
the Board. The request for review must be submitted within 60 days of mailing of
notice of the denial. Absent a request for review within the 60-day period, the
claim shall be deemed to be conclusively denied. The Claimant or his or her
representatives shall be entitled to review all pertinent documents, and to
submit issues and comments orally and in writing. The Board shall render a
review decision in writing within 60 days after receipt of a request for a
review, provided that, in special circumstances the Board may extend the time
for decision by not more than 60 days upon written notice to the Claimant. The
Claimant shall receive written notice of the Board's review decision, together
with specific reasons for the decision and reference to the pertinent provisions
of the Plan.
13
ARTICLE VII
AMENDMENT AND TERMINATION
The Board may amend or terminate the Plan at any time; provided that no
such amendment or termination shall have a material adverse effect on any
Participant's rights under the Plan accrued as of the date of such amendment or
termination. Upon termination of the Plan, all Plan benefits shall be paid to
Participants in a lump sum cash payment within 90 days of such termination date;
provided, however, if the Company is then in default or threatened default under
the terms of any financing or similar agreement(s) between the Company and
lender or group of lenders and is unable to secure a waiver for such payment, or
if the Board determines that such payment would result in a default under such
an agreement(s), payment shall be deferred until a waiver can be secured or the
Board determines that payment can be made without causing a default. Any payment
deferred pursuant to the preceding sentence shall accrue interest from the 121st
day following the termination date in the manner described in Section 5.1(a). If
the Plan is terminated following a Change in Corporate Structure, all Plan
benefits shall be paid in a lump sum cash payment as soon as practicable
following such termination date.
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ARTICLE VIII
MISCELLANEOUS
8.1 No Implied Rights. Neither the establishment of the Plan nor any
amendment thereof shall be construed as giving any Participant, Beneficiary or
any other person, individually or as a member of a group, any legal or equitable
right unless such right shall be specifically provided for in the Plan or
conferred by specific action of the Board or the Administrator in accordance
with the terms and provisions of the Plan. Except as expressly provided in this
Plan, neither the Company nor any of its subsidiaries shall be required or be
liable to make any payment under the Plan.
8.2 No Employment Rights. Nothing herein shall constitute a contract of
employment or of continuing service or in any manner obligate the Company or any
subsidiary to continue the services of any Participant, or obligate any
Participant to continue in the service of the Company or subsidiaries, or as a
limitation of the right of the Company or subsidiaries to discharge any of their
employees, with or without cause.
8.3 Unfunded Plan. No funds shall be segregated or earmarked for any
current or former Participant, Beneficiary or other person under the Plan.
However, the Company may establish one or more trusts to assist in meeting its
obligations under the Plan, the assets of which shall be subject to the claims
of the Company's general creditors. No current or former Participant,
Beneficiary or other person, individually or as a member of a group, shall have
any right, title or interest in any account, fund, grantor trust, or any asset
that may be acquired by the Company in respect of its obligations under the Plan
(other than as a general creditor of the Company with an unsecured claim against
its general assets). In no event shall Participants' benefits under the Plan be
treated as administrative claims or receive any priority for payment in any
liquidation, bankruptcy or similar-type proceeding. The Company may also choose
to use life insurance to assist it in meeting its obligations under the Plan. As
a condition of participation in the Plan, each Participant agrees to execute any
documents that may be required in connection with obtaining such insurance and
to cooperate with any reasonable life insurance underwriting requirements.
8.4 Nontransferability. Except as specifically provided by the Company,
prior to payment thereof, no benefit under the Plan shall be assignable or
subject to any manner of alienation, sale, transfer, claims of creditors,
pledge, attachment or encumbrances of any kind, except pursuant to a domestic
relations order awarding vested benefits to an "alternate payee" (within the
meaning of Code Section 414(p)(8)) that the Administrator determines satisfies
the criteria set forth in paragraphs (1), (2) and (3) of Code Section 414(p) (a
"DRO"). Notwithstanding any provision of the Plan to the contrary, the Plan
benefits awarded to an alternate payee under a DRO shall be paid in a single
lump sum to the alternate payee at the same time as Plan benefits are payable to
the Participant or Beneficiary, as applicable, and the amount payable to the
alternate payee will be deducted from the Participant's benefit determined under
Section 4.1 or, if applicable, the Beneficiary's benefit determined under
Section 4.3, prior to payment thereof.
15
8.5 Offset. If, at the time payment is to be made under the Plan, the
Participant or Beneficiary is indebted to or obligated to the Company, then any
payment to be made to the Participant or Beneficiary, as applicable, may, at the
discretion of the Administrator, be reduced by the amount of such indebtedness
or obligation; provided that the election by the Administrator not to reduce
such payment shall not constitute a waiver of the Company's claim for such
indebtedness or obligation.
8.6 Facility of Payment. If the Administrator receives evidence that a
Participant or Beneficiary entitled to benefits under the Plan is incompetent in
any way so as to be unable to manage his or her financial affairs, and another
person or institution is maintaining or has custody of such Participant or
Beneficiary, and no guardian, committee or other representative of the estate of
such person has been duly appointed by a court of competent jurisdiction, then
the Administrator may make payment under the Plan to such other person or
institution. Any such determination by the Administrator shall be final and
binding on all persons and any payment made pursuant to this Section 8.6 shall
be a valid and complete discharge of the obligations of the Company under the
Plan.
8.7 Successors and Assigns. The rights, privileges, benefits and
obligations under the Plan are intended to be, and shall be treated as legal
obligations of and binding upon the Company, its successors and assigns,
including successors by merger, consolidation, reorganization or otherwise.
8.8 Applicable Law. This Plan is established under and will be construed
according to the laws of the State of Illinois, to the extent not preempted by
the laws of the United States.
* * *
16
IN WITNESS WHEREOF, the undersigned has caused this Plan to be executed in
the name of and on behalf of the Company, this 10th day of November, 2004.
TRUE VALUE COMPANY
By /s/ Thomas S. Hanemann
------------------------------------
Its President and CEO
-----------------------------------
17
EXHIBIT A
ELIGIBLE OFFICERS
As of January 1, 2005
Cathy C. Anderson
Michael Haining
Jon Johnson
Brian Kiernan
Manfred L. Kirst
Steven L. Mahurin
Amy W. Mysel
David Shadduck
Barbara L. Wagner
Leslie A. Weber
Carol W. Wentworth
By: /s/ Thomas S. Hanemann
-----------------------------------
Administrator
Date: November 10, 2004
---------------------------------
EXHIBIT B
GRANDFATHERED PARTICIPANTS
As of January 1, 2005
Cathy C. Anderson
Michael Haining
Jon Johnson
Brian Kiernan
Manfred L. Kirst
Steven L. Mahurin
Amy W. Mysel
David Shadduck
Barbara L. Wagner
Leslie A. Weber
Carol W. Wentworth
By: /s/ Thomas S. Hanemann
-----------------------------------
Administrator
Date: November 10, 2004
---------------------------------