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Exhibit 10(l)
ROYAL APPLIANCE
PHANTOM STOCK PLAN
Effective Date: December 15, 2000
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TABLE OF CONTENTS
ARTICLE NUMBER
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PURPOSE I
DEFINITIONS II
ELIGIBILITY AND PARTICIPATION III
AWARD OF PHANTOM SHARES IV
VESTING OF PHANTOM SHARES V
EVENTS OF FORFEITURE VI
TERMINATION OF EMPLOYMENT VII
DISABILITY OF A PARTICIPANT VIII
DEATH OF A PARTICIPANT IX
PAYMENT OF PHANTOM SHARE VALUE X
NONTRANSFERABILITY OF PHANTOM SHARES XI
ADMINISTRATION XII
AMENDMENT AND TERMINATION XIII
PARTICIPATING EMPLOYERS XIV
MISCELLANEOUS XV
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ARTICLE I
PURPOSE
1.1 This Plan is intended to serve as an incentive to key
employees of the Company and Participating Employers, and to attract and retain
in their employ persons of outstanding abilities upon whom the future success of
the Company largely depends. This Plan shall become effective December 15, 2000.
ARTICLE II
DEFINITIONS
2.1 The words "Actual Shares" shall mean the common shares,
without par value, of the Company.
2.2 The word "Administrator" shall mean the Compensation
Committee or the person, persons, committee, corporation, partnership or other
entity designated as Administrator under Article XII.
2.3 The words "Appeals Committee" shall mean the Appeals
Committee established pursuant to Article XII.
2.4 The word "beneficiary" shall mean any person who receives
or is designated to receive payment of any amounts under the terms of this Plan
because of the participation of another person in this Plan.
2.5 The word "Board" shall mean the Board of Directors of the
Company, as the same may change from time to time.
2.6 The word "Cause" shall mean for purposes of this Plan any
of the following occurring while a Participant or former Participant is an
employee of the Company or any Participating Employer:
(a) his engaging in any act of fraud or gross dishonesty
or criminal activity with respect to the Company or
any Participating Employer; or
(b) his conviction of any felony; or
(c) his engaging in any act of willful misconduct or
gross negligence which adversely affects the
Companies or any Participating Employer; or
(d) his refusal to submit to a medical examination if
directed to do so by the Company or Participating
Employer to determine whether the Participant is
disabled under this Plan.
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2.7 The words "Change in Control" shall mean:
(a) a change in the composition of the Board of Directors
of the Company such that a majority of the Board
members are not the same persons who were directors
twelve (12) months earlier;
(b) approval by the stockholders of the Company of a
reorganization, merger or consolidation with respect
to which, in any such case, the persons who were the
stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not,
immediately thereafter, own more than 51% of the
combined voting power entitled to vote in the
election of directors of the reorganized, merged or
consolidated company's then outstanding voting
securities; or
(c) liquidation or dissolution of the Company or a sale
of all or substantially all of the assets of the
Company.
2.8 The word "Company" shall mean Royal Appliance Mfg. Co.,
and any successor corporation or business organization which shall assume the
duties an obligations of Royal Appliance Mfg. Co. under this Plan.
2.9 The words "Compensation Committee" shall mean a committee
consisting of three (3) or more members who are designated by the Board as the
Compensation Committee.
2.10 The word "Disability" shall mean a physical or mental
condition of a Participant resulting from bodily injury, disease, or mental
disorder which renders him incapable of continuing his usual and customary
employment with the Company. The disability of Participant shall be determined
by a licensed physician chosen by the Administrator. The determination shall be
applied uniformly to all Participants.
2.11 The words "he," "him," and "his" shall mean, in addition
to their common meaning, "she," "her," "hers," "it" or "its," as the context may
require, and generally, whenever any pronoun is used herein, it shall be
construed to include the masculine pronoun, the feminine pronoun or the neuter
pronoun, as shall be appropriate.
2.12 The word "Participant" shall mean any individual who is
designated by the Board and who takes the necessary actions to participate in
the Plan pursuant to Article III hereof.
2.13 The words "Participating Employer" shall mean the Company
and such subsidiaries and affiliated companies of the Company which participate
in the Plan with the consent of the Board of Directors.
2.14 The words "Phantom Share" shall mean a phantom unit of
ownership awarded to a Participant pursuant to this Plan that represents one (1)
Actual Share.
2.15 The words "Phantom Share Value" shall mean the fair
market value of an Actual Share. The fair market value of an Actual Share shall
be the closing price of an Actual
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Share on the New York Stock Exchange or other applicable national stock exchange
with which the Company is registered for the trading date for which the fair
market value of an Actual Share is reported which is coincident with or
immediately prior to the date the Phantom Share Value is determined under this
Plan
2.16 The word "Plan" shall mean the Royal Appliance Phantom
Stock Plan as set forth in this instrument, as amended from time to time.
2.17 The words "Plan Year" shall mean the calendar year.
2.18 The words "Termination of Employment" shall mean the
Participant's cessation of his service with a Participating Employer for any
reason whatsoever, whether voluntarily or involuntarily, including by reason of
retirement, death, or Disability.
2.19 The words "Vested Percentage" shall mean, with respect to
any Phantom Shares in the account of a Participant, the applicable percentage
determined pursuant to Article V hereof.
2.20 The words "Vested Phantom Shares" shall mean the number
of Phantom Shares in a Participant's account multiplied by the applicable Vested
Percentage determined pursuant to Article V hereof.
2.21 The words "Vesting Service" shall mean a Participant's
period of continuous employment with the Company and a Participating Employer
commencing on the date the Phantom Shares are awarded to him under the Plan and
ending on his Termination of Employment.
2.22 The words "Years of Service" shall mean a Participant's
period of continuous employment with the Company and a Participating Employer
commencing on his most recent date of hire and ending on his Termination of
Employment.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Eligibility. The employees who shall be eligible to
participate under this Plan shall be such employees as are designated by the
Compensation Committee (hereinafter the "Committee") to qualify as a member of a
"select group of management or highly compensated employees" as provided in
Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of the Employee Retirement
Income Security Act of 1974, as amended.
3.2 Participation. The Committee shall notify an employee upon
his or her selection for participation under the Plan of such selection. If an
employee, upon such notification, desires to become a Participant, the employee
shall, within such time as the Committee specifies:
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(a) furnish to the Committee all information requested by
it;
(b) execute such documents and such instruments as the
Committee may require to facilitate the
administration of this Plan;
(c) agree in such form and manner as the Committee may
require to be bound by the terms of this Plan and by
the terms of such amendments as may be made hereto;
and
(d) truthfully and fully answer any questions and supply
any information which the Committee deems necessary
or desirable for the proper administration of this
Plan, without any reservations whatsoever.
An employee who is selected by the Committee to participate in the Plan and who
performs timely all acts required to become a Participant, shall become a
Participant on or as of such date as is specified by the Committee.
3.3 Termination of Participation. The Committee may terminate
the participation of any Participant at any time. Such termination of
participation shall not affect the rights of the terminated Participant to the
payment, pursuant to Article X, of the Vested Phantom Shares previously awarded
to such Participant (except as provided in Article VI). A Participant shall
automatically cease to be a Participant on the date of his or her Termination of
Employment.
ARTICLE IV
AWARD OF PHANTOM SHARES
4.1 Authorization of Phantom Shares. The Company has
authorized 100,000 Phantom Shares which may be awarded under the Plan. In the
event there shall be a change in the number of Actual Shares by reason of a
stock split, stock dividend, reorganization, recapitalization, cash dividend, or
other similar event, a similar change shall be made in the number of Phantom
Shares. The determination of the Compensation Committee with respect to any such
adjustment shall be conclusive and binding upon the Participants and their
beneficiaries.
4.2 Award. The Committee, in its sole discretion, may from
time to time award Phantom Shares to a Participant. Subject to all the terms and
conditions of this Plan, each awarded Phantom Share which becomes a Vested
Phantom Share (or is deemed to be a Vested Phantom Share hereunder) shall
entitle the Participant to receive Actual Shares of the Company equal to the
number of the Vested Phantom Shares awarded to a Participant hereunder, on the
dates and under the method of payment as set forth in this Plan. Each
Participant shall be notified by the Committee of the number of Phantom Shares
which have been awarded to him or her.
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4.3 Rights under Phantom Shares. Phantom Shares awarded under
this Plan shall have no voting rights and shall not be entitled to receive cash
or other dividends declared and paid, and the Participant shall have no other
rights as a shareholder of the Company under the Ohio General Corporation Law or
common law.
4.4 Bookkeeping Entries. All grants of Phantom Shares awarded
under this Plan shall be simple bookkeeping entries for the convenience of the
Company. The Company shall not be require to segregate any funds with respect to
the Phantom Shares granted under this Plan. All rights of Participants, former
Participants and beneficiaries under this Plan shall constitute only contractual
claims against the Company and no such claim against the Company shall be
secured or deemed to be secured in any manner.
ARTICLE V
VESTING OF PHANTOM SHARES
5.1 Vesting Schedule. Subject to the provisions of Section 6.2
the Vested Percentage applicable to a Participant shall be determined on the
basis of his Vesting Service in accordance with the following table:
Vesting Vested
Service Percentage
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Less than 3 years 0%
At least 3 but less than 4 years 60%
At least 4 but less than 5 years 80%
5 or more years 100%
5.2 Death or Disability. Notwithstanding anything in this
Article V to the contrary but subject to the provisions of this Section 5.2
hereof, upon the death of a Participant or the Termination of Employment of a
Participant due to Disability, the Vested Percentage applicable to a Participant
shall be determined by multiplying the number of his total months of Vesting
Service with the Company commencing the date the Phantom Shares were awarded to
him and ending on his date of death or Termination of Employment due to
Disability by 1/60. A fractional month of Vesting Service shall be counted as
one month. The Vested Percentage determined under this Section 5.2 shall not
exceed 100%.
5.3 100% Vesting. Notwithstanding anything in this Article V
to the contrary but subject to the provisions of this Section 5.3 hereof, the
Vested Percentage applicable to a Participant shall become one hundred percent
(100%) with respect to all Phantom Shares previously granted to him pursuant to
this Plan (other than Phantom Shares previously forfeited pursuant to Article VI
hereof) upon the occurrence of a Change in Control.
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ARTICLE VI
EVENTS OF FORFEITURE
6.1 Forfeiture. Except as set forth below in Section 6.2, in
the event that a Participant has a Termination of Employment before he is 100%
vested under the provisions of Article V, he shall forfeit all rights whatsoever
he shall have to receive any payments on account of the Phantom Shares that are
not vested on the date of his Termination of Employment.
6.2 Termination for Cause. Notwithstanding any other provision
of this Plan, in the event that a Participant's Termination of Employment shall
be for Cause, the Participant shall forfeit all Phantom Shares granted to him
and shall forfeit all rights whatsoever he shall have to receive any payments of
Actual Shares or other amounts under this Plan. If a Participant's employment
could be terminated for Cause hereunder, it shall be considered so terminated
regardless of whether actually so terminated or terminated voluntarily by the
Participant through retirement or otherwise.
6.3 Effect of Forfeiture. Upon the occurrence of an event
described in this Article which results in forfeiture of a Participant's Phantom
Shares, such Phantom Shares shall be canceled and neither the Participant nor
his beneficiary shall have any further rights with respect thereto. If a
Participant forfeits all rights to receive payment hereunder as a result of a
Termination of Employment for Cause pursuant to Section 6.2 above, he shall
forfeit all rights to any further payments hereunder but he shall not be
required to repay amounts previously received by him hereunder. Forfeited
Phantom Shares shall not be reinstated by subsequent rehire of the Participant
by the Company or a Participating Employer. Forfeited Phantom Shares shall be
available for reissuance under the Plan.
ARTICLE VII
TERMINATION OF EMPLOYMENT
7.1 Termination of Employment Other Than For Cause. In the
event of a Participant's Termination of Employment for a reason other than death
or Disability, and there is no Cause for the Company or any Participating
Employer to terminate his employment, such Participant shall be entitled to
receive a distribution of his Phantom Shares multiplied by his Vested
Percentage.
7.2 Payment of Vested Phantom Shares. A Participant's Vested
Phantom Shares shall be paid to such Participant as provided in Article X
hereof.
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ARTICLE VIII
DISABILITY OF A PARTICIPANT
8.1 Benefits Payable Due to Disability. In the event of a
Participant's Termination of Employment due to his Disability, all Phantom
Shares awarded to such disabled Participant which have not vested previously
pursuant to this Plan shall become vested in accordance with the pro-rata
vesting formula set out in Section 5.2 as of the date the Participant's
Termination of Employment due to his Disability.
8.2 Payment of Vested Phantom Shares. A Participant's Vested
Phantom Shares shall be paid to such disabled Participant as provided in Article
X hereof.
ARTICLE IX
DEATH OF A PARTICIPANT
9.1 Benefits Payable Due to Death. In the event of the
Termination of Employment of a Participant by reason of his death, his
beneficiary shall be entitled to receive a distribution of his Vested Phantom
Shares. All Phantom Shares awarded to such Participant which have not vested
previously pursuant to this Plan shall become vested in accordance with the
pro-rata vesting formula set out in Section 5.2 as of the Participant's date of
Termination of Employment by reason of his death.
9.2 Payment of Vested Phantom Shares. A Participant's Vested
Phantom Shares shall be paid as provided in Article X hereof to the beneficiary
of the Participant.
9.3 Default Beneficiary. Unless a Participant or former
Participant has designated a beneficiary in accordance with the provisions of
Section 9.4 hereof, his beneficiary shall be deemed to be the person or persons
in the first of the following classes in which there are any survivors of such
Participant or former Participant:
(a) his spouse at the time of his death;
(b) his issue, per stirpes;
(c) his parents; or
(d) the executor or administrator of his estate.
9.4 Designated Beneficiary. In lieu of having the Vested
Phantom Shares distributable pursuant to this Article distributed to a
beneficiary determined in accordance with the provisions of Section 9.3 hereof,
a Participant may sign a document designating a beneficiary or beneficiaries to
receive such Vested Phantom Shares.
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9.5 Partial Disposition. In the event that a Participant or
former Participant, dies at a time when he has a designation on file with the
Administrator which does not fully dispose of his Vested Phantom Shares under
this Plan upon his death, then the Vested Phantom Shares distributable on behalf
of said Participant or former Participant, the disposition of which was not
determined by the deceased Participant's or former Participant's designation,
shall be distributed to a beneficiary determined under the provisions of Section
9.3 hereof.
9.6 Ambiguity as to Beneficiary. Any ambiguity in a Participant's beneficiary
designation shall be resolved by the Administrator. Subject to Section 9.4
hereof, the Administrator may direct a Participant to clarify his beneficiary
designation and if necessary execute a new beneficiary designation containing
such clarification.
ARTICLE X
PAYMENT OF PHANTOM SHARES
10.1 Payments Before Termination of Employment. Subject to
Sections 10.2 and 10.4, a Participant who has not had a Termination of
Employment may request a distribution of all or a portion of his Vested Phantom
Shares. Such request shall be made in writing in a form and manner specified by
the Company and must specify the number of Vested Phantom Shares to be
distributed and the date upon which such Vested Phantom Shares shall be paid
which must be as soon as administratively possible following a date that is at
least one (1) year after the date on which the request is made. A Participant
may request a distribution before the date on which his Phantom Shares actually
become vested subject to the other requirements set forth in this Section 10.1.
Any distribution request shall be irrevocable unless, prior to payment, the
Participant dies, has a Termination of Employment due to Disability or has a
Termination of Employment at which time the request shall become null and void
and the Participant's Vested Phantom Shares shall be paid as provided in Section
10.2.
10.2 Payments On or After a Termination of Employment. Upon a
Participant's Termination of Employment for any reason, including death or
Disability, the Participant or the beneficiary of the deceased Participant shall
be entitled to a distribution equal to his Vested Phantom Shares. Such
distribution shall be in a single lump sum payment on the date determined under
Section 10.5 and shall be in lieu of all other benefits under this Plan.
10.3 Change in Control. Any Phantom Shares held by a
Participant under this Plan or any Phantom Shares remaining to be paid to a
Participant or beneficiary under a prior distribution election shall be paid
immediately to such Participant or beneficiary in a single lump sum payment upon
the occurrence of a Change in Control.
10.4 Form and Amount of Payment.
(a) Subject to such rules, procedures, limits
and restrictions as the Administrator may
establish from time to time, a Participant,
may elect that distributions payable under
Section 10.1 shall be made in a single sum
or in the form of annual installments over a
period of no
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less than two (2) calendar years and no more
than ten (10) calendar years.
(b) Any installment form of payment shall be
equal to the number of Vested Phantom Shares
to be distributed to a Participant divided
by the number of remaining installments to
be paid.
(c) The Administrator, with the consent of the
Company, may establish procedures to permit
some or all Participants to request to
change their prior elections regarding the
form of their benefit payments under Section
10.1, provided that any such procedures
shall either require such request be made a
reasonable period of time, as determined by
the Company in its sole discretion, before
the Phantom Shares affected by such request
shall be distributable, or require a
forfeiture of a significant portion of such
Phantom Shares. The Administrator may, but
is not required to, grant any such requests.
(d) All payments under the Plan shall be made in
Actual Shares of the Company. Actual Shares
shall be distributed first from treasury
shares and then, to the extent treasury
shares are not available, from any
authorized and unissued Company shares.
10.5 Commencement of Payments.
(a) Payments under Section 10.1 of this Plan
shall be made as soon as administratively
possible following the date elected by the
Participant which is at least one (1) year
after the date such election is made by the
Participant.
(b) The Administrator, with the consent of the
Company, may establish procedures to permit
some or all Participants who have made a
distribution election pursuant to Section
10.1 to request to change their prior
elections regarding the time of commencement
of benefits hereunder, provided that any
such procedures shall either require that
the request be made a reasonable period of
time, as determined by the Company in its
sole discretion, before the amounts affected
by such request shall be distributable, or
require a forfeiture of a significant
portion of such amounts. The Administrator
may, but is not required to, grant any such
requests.
(c) Single lump sum payments made under Section
10.2 of this Plan shall be made as soon as
administratively possible following a
Participant's Termination of Employment and,
in any event, no later than ninety (90) days
after a Participant's Termination of
Employment.
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(d) Single lump sum payments made under Section
10.3 of this Plan shall be made immediately
upon a Change in Control.
10.6 Protective Distributions. In the event that the
Administrator determines, in its sole discretion, that a Participant is not, or
may not be, a member of a "select group of management or highly compensated
employees" within the meaning of Sections 201(2), 301(a)(3), 401(a)(1) or
4021(b)(6) of the Employee Retirement Income Security Act of 1974, as amended,
then the Administrator may, in its sole discretion, terminate such Participant's
participation in this Plan, and distribute such Participant's Vested Phantom
Shares in a single lump sum payment. Any such distribution shall be made at such
time as the Administrator determines in its sole discretion.
10.7 Tax Withholding. A Participating Employer may
withhold from any payment made by it under the Plan the number of Vested Phantom
Shares equal in value to such amount or amounts as may be required for purposes
of complying with the tax withholding or other provisions of the Internal
Revenue Code or the Social Security Act or any state or local income or
employment tax act or for purposes of paying any estate, inheritance or other
tax attributable to any amounts payable hereunder.
10.8 Cancellation of Phantom Shares. As of the date of
payment with respect to a Phantom Share of a Participant, such Phantom Share
shall be deemed canceled.
ARTICLE XI
NONTRANSFERABILITY OF PHANTOM SHARES
11.1 Nontransferable. Except as provided in Article IX
hereof with respect to the designation of beneficiaries, Phantom Shares awarded
pursuant to this Plan and the right to receive payments of Vested Phantom
Shares, if any, attributable thereto, are nontransferable directly, indirectly,
as security for a loan or otherwise by any means, either voluntarily or by
operation of law.
ARTICLE XII
ADMINISTRATION
12.1 Administration. The Compensation Committee shall be
the Administrator unless and until the Board shall appoint some other person,
persons, committee, corporation, partnership or other entity as Administrator.
12.2 Powers of the Administrator. The Administrator shall
administer and interpret this Plan. In so doing, it shall have full power and
discretion:
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(a) to interpret this Plan and any related documents, to
resolve ambiguities, inconsistencies and omissions, to
determine any questions of fact, to determine the right
to benefits of, and the amount of benefits, if any,
payable to any person in accordance with the provisions
of this Plan;
(b) to enact such rules, regulations, and procedures and
to prescribe the use of such administrative forms as
it shall deem advisable; and
(c) to appoint or employ such agents, attorneys,
appraisers, accountants and assistants at the
expense of the Company, as it may deem necessary to
keep its records or to assist it in taking any other
action authorized or required hereunder.
12.3 Denial of Benefits. If any Participant or beneficiary
shall file an application for benefits hereunder and such application is denied
in whole or in part by the Administrator, the applicant shall be notified in
writing of the specific reason or reasons for such denial. The notice shall also
set forth the specific Plan provisions upon which the denial is based, an
explanation of the provisions of 12.4 hereof, and any other information deemed
necessary or advisable by the Administrator.
12.4 Appeals Procedure. Any Participant, any beneficiary,
or any authorized representative of a Participant or beneficiary whose
application for benefits hereunder has been denied, in whole or in part, by the
Administrator may upon written notice to the Appeals Committee request a review
by the Appeals Committee of such denial of his application. Such review may be
made by written briefs submitted by the applicant and the Administrator or at a
hearing, or by both, as shall be deemed necessary by the Appeals Committee. Any
such hearing shall be held in the main office of the Company on such date and at
such time as the Appeals Committee shall designate upon not less than seven (7)
days' notice to the applicant and the Administrator unless both of them accept
shorter notice. The Appeals Committee shall make every effort to schedule the
hearing on a day and at a time which is convenient to both the applicant and the
Administrator. After the review has been completed, the Appeals Committee shall
render a decision in writing, a copy of which shall be sent to both the
applicant and the Administrator. Such decision shall be made no later than sixty
(60) days following the applicant's request for review; provided, however, that
in the event that a hearing is held with respect to the review of the claim,
such decision shall be rendered no later than one hundred twenty (120) days
following the applicant's request for review. In rendering its decision, the
Appeals Committee shall have full power and discretion to interpret this Plan
and related documents, to resolve ambiguities, inconsistencies and omissions, to
determine any question of fact, to determine the right to benefits of, and the
amount of benefits, if any, payable to, the applicant in accordance with the
provisions of this Plan. Such decision shall set forth the specific reason or
reasons for the decision and the specific Plan provisions upon which the
decision is based. Such decision shall be final and binding on the applicant and
the Administrator.
12.5 Establishment of Appeals Committee. The Company shall
appoint the members of an Appeals Committee which shall consist of three (3) or
more members. The Company may appoint one Appeals Committee to hear all appeals
of denied benefits that may
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arise under the Plan or a number of Appeals Committees with different members to
hear the appeals of denied benefits that arise from Participants employed by a
Participating Employer or group of Participating Employers. The members of the
Appeals Committee shall remain in office at the will of the Company and the
Company, from time to time, may remove any of said members with or without
cause. A member of the Appeals Committee may resign upon written notice to the
remaining member or members of the Appeals Committee and to the Company,
respectively. The fact that a person is a Participant or a former Participant or
a prospective Participant shall not disqualify him from acting as a member of
the Appeals Committee, nor shall any member of the Appeals Committee be
disqualified from acting on any question because of his interest therein, except
that no member of the Appeals Committee may act on any claim which such member
has brought as a Participant, former Participant, or Beneficiary under this
Plan. In case of the death, resignation or removal of any member of the Appeals
Committee, the remaining members shall act until a successor-member shall be
appointed by the Company. At the Administrator's request, the Secretary of the
Company shall notify the Administrator in writing of the names of the original
members of the Appeals Committee, of any and all changes in the membership of
the Appeals Committee, of the member designated as Chairman, and the member
designated as Secretary, and of any changes in either office. Until notified of
a change, the Administrator shall be protected in assuming that there has been
no change in the membership of the Appeals Committee or the designation of
Chairman or of Secretary since the last notification was filed with it. The
Administrator shall be under no obligation at any time to inquire into the
membership of the Appeals Committee or its officers. All communications to the
Appeals Committee shall be addressed to its Secretary at the address of the
Company.
12.6 Operations of Appeals Committee. On all matters and
questions, the decision of a majority of the members of the Appeals Committee
shall govern and control; but a meeting need not be called or held to make any
decision. The Appeals Committee shall appoint one of its members to act as its
Chairman and another member to act as Secretary. The terms of office of these
members shall be determined by the Appeals Committee, and the Secretary and/or
Chairman may be removed by the other members of the Appeals Committee for any
reason which such other members may deem just and proper. The Secretary shall do
all things directed by the Appeals Committee. Although the Appeals Committee
shall act by decision of a majority of its members as above provided,
nevertheless in the absence of written notice to the contrary, every person may
deal with the Secretary and consider his acts as having been authorized by the
Appeals Committee. Any notice served or demand made on the Secretary shall be
deemed to have been served or made upon the Appeals Committee.
12.7 Delegation of Powers. The Administrator may by
appropriate resolution delegate to one or more of its members the authority to
exercise any of its powers in administering and interpreting this Plan.
12.8 Limitation of Liability. The Administrator and the
Appeals Committee shall not be liable for any action or determination made with
respect to this Plan and awards under it and the Company shall indemnify all
such persons, individually and collectively, against any and all losses, costs
or expenses which may be incurred by them, individually or collectively, in
connection with their administering this Plan.
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ARTICLE XIII
AMENDMENT AND TERMINATION
13.1 Power to Amend and Terminate Plan. This Plan may be
amended by the Company at any time, or from time to time, and may be terminated
by the Company with respect to any or all Participants at any time, but no such
amendment or termination will deprive any Participant of the right to receive
any payment in accordance with the terms of the Plan as of the date of such
amendment or termination.
ARTICLE XIV
PARTICIPATING EMPLOYERS
14.1 List of Participating Employers. The initial
Participating Employers as of the Effective Date are as follows:
Participating Employers
Royal Appliance Mfg. Co.
The Company may designate additional Participating Employers or remove
Participating Employers during the period of the Plan's existence by action of
an appropriate officer of Company authorized or ratified by the Board. Such
addition or deletion shall not require a formal amendment hereto.
ARTICLE XV
MISCELLANEOUS
15.1 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 any legal or equitable right unless such right
shall be specifically provided for in the Plan or conferred by specific action
of the Company in accordance with the terms and provisions of the Plan. Except
as expressly provided in this Plan, neither the Company nor any other
Participating Employer shall be required or be liable to make any payment under
the Plan.
15.2 No Right to Participating Employer Assets. Neither
the Participant nor any other person shall acquire by reason of the Plan any
right in or title to any assets, funds or property of a Participating Employer
whatsoever including, without limiting the generality of the foregoing, any
specific funds, assets or other property which a Participating Employer, in its
sole discretion, may set aside in anticipation of a liability hereunder. The
Participant shall have only a contractual right to the amounts, if any, payable
hereunder unsecured by any asset of a Participating Employer. Nothing contained
in the Plan constitutes a guarantee by a Participating Employer that the assets
of a Participating Employer shall be sufficient to pay any benefit to any
person.
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15.3 No Employment Rights Created. This Plan shall not be
deemed to constitute a contract of employment between any of the Participating
Employers and any Participant, nor confer upon any Participant or employee the
right to be retained in the service of any Participating Employer for any period
of time, nor shall any provision hereof restrict the right of any Participating
Employer to discharge or otherwise deal with any Participant or other employees,
with or without cause. Nothing herein shall be construed as fixing or regulating
the compensation, salary, bonus or other remuneration payable to any Participant
or other employee of a Participating Employer.
15.4 Offset. If, at the time payments or installments of
payments are to be made hereunder, the Participant or the beneficiary or both
are indebted or obligated to a Participating Employer, then the payments
remaining to be made to the Participant or the beneficiary or both may, at the
discretion of the Company, be reduced by the amount of such indebtedness or
obligation, provided, however, that an election by the Company not to reduce any
such payment or payments shall not constitute a waiver of its claim for such
indebtedness or obligation.
15.5 Non-assignability. Neither the Participant nor any
other person shall have any voluntary or involuntary right to commute, sell,
assign, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate or convey in advance of actual receipt the amounts, if any, payable
hereunder, or any part thereof, and any attempt to do so shall be void. All
amounts payable under this Plan are expressly declared to be unassignable and
non-transferable. No part of the amounts payable under this Plan shall be, prior
to actual payment, subject to seizure or sequestration for the payment of any
debts, judgments, alimony or separate maintenance owed by the Participant or any
other person, or be transferable by operation of law in the event of the
Participant's or any other person's bankruptcy or insolvency.
15.6 Notice. Any notice required or permitted to be given
under the Plan shall be sufficient if in writing and hand delivered, or sent by
registered or certified mail, and if given to the Company, delivered to the
principal office of the Company, directed to the attention of the Secretary of
the Company. 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 or the receipt
for registration or certification.
15.7 Governing Laws. The Plan shall be construed and
administered according to the laws of the State of Ohio to the extent not
preempted by the laws of the United States of America.
15.8 Incapacity. If the Administrator determines that any
Participant or beneficiary entitled to payments under the Plan is incompetent by
reason of physical or mental disability and is consequently unable to give a
valid receipt for payments made hereunder, or is a minor, the Administrator may
order the payments becoming due to such Participant or beneficiary to be made to
another person for the benefit of such Participant or beneficiary, without
responsibility on the part of the Administrator to follow the application of
amounts so paid. Payments made pursuant to this Section shall completely
discharge the Plan, the Administrator, the Participating Employers and the
Appeals Committee with respect to such payments.
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15.9 Administrative Forms. All applications, elections and
designations in connection with the Plan made by a Participant or beneficiary
shall become effective only when duly executed on forms provided by the
Administrator and filed with the Administrator.
15.10 Independence of Plan. Except as otherwise expressly
provided herein, this Plan shall be independent of, and in addition to, any
other employee benefit agreement or plan or any rights that may exist from time
to time thereunder.
15.11 Responsibility for Legal Effect. Neither the
Company, any other Participating Employer, the Administrator, the Appeals
Committee, nor any officer, member, delegate or agent of any of them, makes any
representations or warranties, express or implied, or assumes any responsibility
concerning the legal, tax, or other implications or effects of this Plan.
15.12 Successors. The terms and conditions of this Plan
shall inure to the benefit of and bind the Company, the Participating Employers,
the Administrator, the Appeals Committee and its members, the Participants,
their beneficiaries, and the successors, assigns, and personal representatives
of any of them.
15.13 Headings and Titles. The Section headings and titles
of Articles used in this Plan are for convenience of reference only and shall
not be considered in construing this Plan.
15.14 General Rules of Construction. The masculine gender
shall include the feminine and neuter, and vice versa, as the context shall
require. The singular number shall include the plural, and vice versa, as the
context shall require. The present tense of a verb shall include the past and
future tenses, and vice versa, as the context may require.
15.15 Severability. In the event that any provision or
term of this Plan, or any agreement or instrument required by the Administrator
hereunder, is determined by a judicial, quasi-judicial or administrative body to
be void or not enforceable for any reason, all other provisions or terms of this
Plan or such agreement or instrument shall remain in full force and effect and
shall be enforceable as if such void or nonenforceable provision or term had
never been a part of this Plan, or such agreement or instrument.
15.16 Actions by the Company. Except as otherwise provided
herein, all actions of the Company under this Plan shall be taken by the Board,
by any officer of the Company, or by any other person designated by any of the
foregoing.
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IN WITNESS WHEREOF, Royal Appliance Mfg. Co., by its duly authorized
officers, has caused this Phantom Stock Plan to be executed as of this 15th day
of December 2000.
ROYAL APPLIANCE MFG. CO.
By___________________________
And__________________________
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