Exhibit 10.16
THE KITCHEN COLLECTION, INC.
DEFERRED COMPENSATION PLAN FOR MANAGEMENT EMPLOYEES
(AS AMENDED AND RESTATED AS OF JANUARY 1, 2005)
KCI NQ/Def. Comp. 2005 Rstmt.
THE KITCHEN COLLECTION, INC.
DEFERRED COMPENSATION PLAN FOR MANAGEMENT EMPLOYEES
The Kitchen Collection, Inc. (the "Company") does hereby adopt this
amendment and restatement of The Kitchen Collection, Inc. Deferred Compensation
Plan for Management Employees, effective as of January 1, 2005.
ARTICLE I
PREFACE
Section 1.1 Effective Date. The effective date of this restatement of the
Plan is January 1, 2005. The Plan was previously amended and restated as of
November 1, 2001.
Section 1.2 Purpose of the Plan. The purpose of this Plan is to (a) allow
certain Employees to defer the receipt of certain long-term incentive
compensation award payments, and (b) provide for certain Employees the benefits
they would have received under the Savings Plan but for the limitations imposed
under Code Sections 402(g), 401(a)(17), 401(k)(3), 401(m) and 415.
Section 1.3 Governing Law. This Plan shall be regulated, construed and
administered under the laws of the State of Ohio, except when preempted by
federal law.
Section 1.4 Gender and Number. For purposes of interpreting the provisions
of this Plan, the masculine gender shall be deemed to include the feminine, the
feminine gender shall be deemed to include the masculine, and the singular shall
include the plural unless otherwise clearly required by the context.
Section 1.5 Application of the American Jobs Creation Act ("AJCA").
(a) The following Sub-Accounts (collectively, the "Pre-2005
Sub-Accounts") (and all earnings thereon) are "grandfathered" under Code Section
409A (as enacted by the AJCA) and, as such, will continue to be governed by the
law applicable to nonqualified deferred compensation prior to the enactment of
Code Section 409A: (i) the LTIP Deferral Sub-Account; (ii) amounts credited to
the Excess 401(k) Sub-Account for periods prior to January 1, 2005 (the
"Pre-2005 Excess 401(k) Sub-Account"); (iii) amounts credited to the Excess
Matching Sub-Account for periods prior to January 1, 2005 (the "Pre-2005 Excess
Matching Sub-Account"); and (iv) amounts credited to the Excess Profit Sharing
Sub-Account for Pre-2005 Plan Years (including the amount that was credited in
2005 for the 2004 Plan Year) (the "Pre-2005 Excess Profit Sharing Sub-Account").
(b) The following Sub-Accounts (collectively, the "Post-2004
Sub-Accounts") (and all earnings thereon) are subject to the provisions of Code
Section 409A, as enacted by the AJCA: (i) amounts credited to the Excess 401(k)
Sub-Account for periods on or after January 1, 2005 (the "Post-2004 Excess
401(k) Sub-Account"); (ii) amounts credited to the Excess Matching Sub-Account
for periods on or after January 1, 2005 (the "Post-2004 Excess Matching
Sub-Account"); and (iii) amounts credited to the Excess Profit Sharing
Sub-Account for the 2005 Plan Year and beyond (beginning with amounts credited
in 2006 for the 2005 Plan Year) (the
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"Post-2004 Excess Profit Sharing Sub-Account"). It is intended that the
provisions of the Plan that relate to the Post-2004 Sub-Accounts be administered
in accordance with the requirements of Code Section 409A, so as to prevent the
inclusion in gross income of any amount credited to the Participant's Post-2004
Sub-Accounts hereunder in a taxable year that is prior to the taxable year or
years in which such amounts would otherwise actually be distributed or made
available to the Participants.
ARTICLE II
DEFINITIONS
Except as otherwise provided in this Plan, terms defined in the
Savings Plan as they may be amended from time to time shall have the same
meanings when used herein, unless a different meaning is clearly required by the
context of this Plan. In addition, the following words and phrases shall have
the following respective meanings for purposes of this Plan.
Section 2.1 Account shall mean the record maintained in accordance with
Section 3.5 by the Company as the sum of the Participant's Excess Retirement
Benefits hereunder. The Participant's Account shall be further divided into the
Sub-Accounts described in Section 1.5 hereof.
Section 2.2 Beneficiary shall mean the person or persons designated by the
Participant as his Beneficiary under this Plan, in accordance with the
provisions of Article VII hereof.
Section 2.3 Bonus shall mean any bonus under The Kitchen Collection, Inc.
Annual Incentive Compensation Plan that would be taken into account as
Compensation under the Savings Plan, which is earned with respect to services
performed by a Participant during a Plan Year (whether or not such Bonus is
actually paid to the Participant during such Plan Year). An election to defer a
Bonus under this Plan must be made before the period in which the services are
performed which gives rise to such Bonus.
Section 2.4 Company shall mean The Kitchen Collection, Inc. or any entity
that succeeds The Kitchen Collection, Inc. by merger, reorganization or
otherwise.
Section 2.5 Compensation shall have the same meaning as under the Savings
Plan, except that Compensation shall be deemed to include (a) the amount of
compensation deferred by the Participant under this Plan and (b) amounts in
excess of the limitation imposed by Code Section 401(a)(17). Notwithstanding the
foregoing, the timing and crediting of Bonuses hereunder shall be as specified
in Section 3.1.
Section 2.6 Excess Retirement Benefit or Benefit shall mean an LTIP
Deferral Benefit, an Excess 401(k) Benefit, an Excess Matching Benefit or an
Excess Profit Sharing Benefit (all as described in Article III) which is payable
to or with respect to a Participant under this Plan.
Section 2.7 Fixed Income Fund shall mean the Stable Asset Fund under the
Savings Plan or any equivalent fixed income fund thereunder which is designated
by the NACCO Industries, Inc. Retirement Funds Investment Committee as the
successor to the Stable Asset Fund.
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Section 2.8 Insolvent. For purposes of this Plan, the Company shall be
considered Insolvent at such time as it (a) is unable to pay its debts as they
mature, or (b) is subject to a pending voluntary or involuntary proceeding as a
debtor under the United States Bankruptcy Code.
Section 2.9 Key Employee shall mean a key employee, as defined in Section
416(i) of the Code (without regard to paragraph (5) thereof), of the Company as
long as the stock of NACCO Industries, Inc. (or a related entity) is publicly
traded on an established securities market or otherwise on the date of the
Employee's Termination of Employment. Key Employees are identified on a
Controlled Group-wide basis and include non-resident alien Employees (whether or
not such Employees are eligible to participate in the Plan). The selected
identification date for Key Employees is December 31st. As such, any Employee
who is classified by the Company as a Key Employee as of December 31st of a
particular Plan Year shall maintain such classification for the 12-month period
commencing the following April 1st. The Company shall have the sole and absolute
discretion to classify Employees as Key Employees hereunder. To the extent
determined by the Company, such classification may include up to 75 highly
compensated Employees (including some who do not meet the statutory requirements
of a Key Employee) as long as such determination is made in a consistent,
reasonable and good faith manner.
Section 2.10 LTIP Plan shall mean the Kitchen Collection, Inc. Long-Term
Incentive Compensation Plan, as in effect from time to time.
Section 2.11 Participant
(a) For purposes of Sections 3.1 through 3.3 of the Plan, the term
Participant shall mean a participant in the Savings Plan (i) who is unable to
make all of the Salary Deferral Contributions that he has elected to make to the
Savings Plan, or unable to receive the maximum amount of Matching Company
Contributions under the Savings Plan, or unable to receive the maximum amount of
Profit Sharing Contributions under the Savings Plan because of the limitations
imposed under Section 402(g), 401(a)(17), 401(k)(3), 401(m) or 415 of the Code;
(ii) whose total compensation from the Controlled Group for the year in which
the deferral election is required is at least $115,000; and (iii) who is
designated as a Participant in this Plan by the President of the Company.
(b) For purposes of Section 3.4 of the Plan, the term "Participant"
shall mean an Employee of the Company (i) who is a participant in the LTIP Plan;
(ii) who, both at the time the deferral election is required and the time the
deferral becomes effective, is a resident or citizen of the United States; (iii)
who is designated as a Participant by the President of the Company and whose
total compensation from the Controlled Group for the year in which the deferral
election is required is at least $115,000; and (iv) who is an active Employee at
the time the deferral becomes effective or who has "Retired" (as such term is
defined in the LTIP Plan).
(c) The term "Participant" shall also include any other person who has
an Account balance hereunder or who was defined as a participant in a prior
version of the Plan.
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Section 2.12 Plan shall mean The Kitchen Collection, Inc. Deferred
Compensation Plan for Management Employees, as herein set forth or as duly
amended.
Section 2.13 Plan Administrator shall mean the Administrative Committee
appointed under the Savings Plan.
Section 2.14 Plan Year shall mean the calendar year.
Section 2.15 ROTCE shall mean the Company's consolidated return on total
capital employed, as determined by the Company for purposes of the Company's
Annual Incentive Compensation Plan as in effect for a particular Plan Year.
Section 2.16 Savings Plan shall mean The Kitchen Collection, Inc.
Retirement Savings Plan (or any successor plan).
Section 2.17 Termination of Employment shall mean a separation of service
as defined in Code Section 409A (and the regulations or other guidance issued
thereunder).
Section 2.18 Unforeseeable Emergency shall mean an event which results in a
severe financial hardship to the Participant as a consequence of (a) an illness
or accident of the Participant, the Participant's spouse or a dependent within
the meaning of Code Section 152(a), (b) loss of the Participant's property due
to casualty or (c) other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant.
Section 2.19 Valuation Date shall mean the last business day of each Plan
Year and any other date chosen by the Plan Administrator.
ARTICLE III
EXCESS RETIREMENT BENEFITS
Section 3.1 Basic and Additional Excess 401(k) Benefits.
(a) Amount of Excess 401(k) Benefits. Each Participant may, prior to
each December 31st, by completing an approved deferral election form, direct the
Company to reduce his Compensation for the next Plan Year, by the difference
between (i) a certain percentage, in 1% increments, with a maximum of 25%, of
his Compensation for the Plan Year, and (ii) the maximum Salary Deferral
Contributions actually permitted to be contributed for him to the Savings Plan
by reason of the application of the limitations under Sections 402(g),
401(a)(17), 401(k)(3) and 415 of the Code (which amounts shall be referred to as
the "Excess 401(k) Benefits"). Notwithstanding the foregoing, a Participant's
direction to reduce a Bonus earned during a particular Plan Year shall be made
no later than December 31st of the Plan Year preceding the Plan Year in which
the Bonus commences to be earned and, as a result, Bonuses that are paid in 2005
shall not be taken into account for purposes of calculating Excess 401(k)
Benefits hereunder.
(b) Classification of Excess 401(k) Benefits. The Excess 401(k)
Benefits for a particular Plan Year shall be calculated monthly and shall be
further divided into the "Basic Excess 401(k) Benefits" and the "Additional
Excess 401(k) Benefits" as follows:
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(i) The Basic Excess 401(k) Benefits shall be determined by
multiplying each Excess 401(k) Benefit by a fraction, the
numerator of which is the lesser of the percentage of
Compensation elected to be deferred in the deferral election form
for such Plan Year or 7% and the denominator of which is the
percentage of Compensation elected to be deferred; and
(ii) The Additional Excess 401(k) Benefits (if any) shall be
determined by multiplying such Excess 401(k) Benefit by a
fraction, the numerator of which is the difference between (1)
the percentage of Compensation elected to be deferred in the
deferral election form for such Plan Year and (2) 7%, and the
denominator of which is the percentage of Compensation elected to
be deferred.
The Basic Excess 401(k) Benefits shall be credited to the Basic Excess 401(k)
Sub-Account under this Plan and the Additional Excess 401(k) Benefits shall be
credited to the Additional Excess 401(k) Sub-Account hereunder. The Basic and
Additional Excess 401(k) Sub-Accounts shall be referred to collectively as the
"Excess 401(k) Sub-Account."
(c) Consequences of Deferral Election. Any direction by a Participant
to defer Compensation under Subsection (a) shall be effective with respect to
Compensation otherwise payable to the Participant for the Plan Year for which
the deferral election form is effective, and the Participant shall not be
eligible to receive such Compensation. Instead, such amounts shall be credited
to the Participant's Basic and Additional Excess 401(k) Sub-Accounts (as
applicable) hereunder. Any such direction shall be irrevocable with respect to
Compensation earned for such Plan Year, but shall have no effect on Compensation
that is earned in subsequent Plan Years. A new deferral election will be
required for each Plan Year.
(d) Payment Date Election. For Pre-2005 Excess 401(k) Benefits,
Participants were allowed to make separate IRREVOCABLE elections regarding the
time of payment of each Plan Year's Excess 401(k) Benefits. For Post-2004 Excess
401(k) Benefits, the initial deferral election made by a Participant shall also
contain the Participant's IRREVOCABLE election regarding the payment date of the
Participant's entire Post-2004 Excess 401(k) Sub-Account hereunder. A
Participant who does not timely and properly file such an election form shall be
deemed to have elected to receive his Excess 401(k) Sub-Account as soon as
practicable following the date on which he ceases to be an Employee of the
Controlled Group (for Pre-2005 Sub-Accounts) or incurs a Termination of
Employment (for Post-2004 Sub-Accounts). The Participant may elect to commence
payment of such Sub-Accounts on one of the following dates:
(i) the date on which he ceases to be an Employee of a Controlled
Group Member (or incurs a Termination of Employment for Post-2004
Sub-Accounts);
(ii) The date on which he attains an age specified in the deferral
election form;
(iii) The earlier of such dates; or
(iv) The later of such dates (for Pre-2005 Sub-Accounts only).
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(e) Subsequent Deferrals. In the event that a Participant elects to
receive his Post-2004 Excess 401(k) Sub-Account at a specified age (or the
earlier of a specified age or Termination of Employment) and the Participant
continues to be employed past such date, any additional amounts that are
credited to his Post-2004 Excess 401(k) Sub-Account shall automatically be paid
to the Participant in the form of a lump sum payment at his Termination of
Employment.
(f) Automatic Termination of Deferral Election. The deferral election
of a Participant whose eligibility to make Salary Deferral Contributions to the
Savings Plan has been involuntarily suspended because he has taken a Hardship
withdrawal shall automatically terminate. Such termination shall be in effect
for the remainder of the Plan Year in which he receives such Hardship withdrawal
(or, if later, the end of the Plan Year that includes the end of his period of
suspension from the Savings Plan). As a result, the Participant shall be
required to reenroll in this Plan effective as of the next applicable January
1st.
Section 3.2 Excess Matching Benefits. A Participant shall have credited to
his Excess Matching Sub-Account an amount equal to the Matching Company
Contributions attributable to his Basic Excess 401(k) Benefits that he is
prevented from receiving under the Savings Plan because of the limitations
imposed under Code Sections 402(g), 401(a)(17), 401(k)(3), 401(m) and 415 of the
Code ( the "Excess Matching Benefits"). Payment of the Participant's Excess
Matching Sub-Account shall be made at the same time and in the same form as the
payment of the Participant's corresponding Excess 401(k) Sub-Account.
Section 3.3 Excess Profit Sharing Benefits. At the time described in
Section 3.5(d), a Participant shall have credited to his Excess Profit Sharing
Sub-Account an amount equal to the excess, of any, of (i) the Profit Sharing
Contribution which would have been made to the Savings Plan if such Plan did not
contain the limitations imposed under Code Sections 401(a)(17) and 415 and the
term "Compensation" (as defined in Section 2.5 of this Plan) were used for
purposes of determining the amount of Profit Sharing Contributions under the
Savings Plan, over (ii) the amount of Profit Sharing Contributions which are
actually made to the Savings Plan on behalf of the Participant for such Plan
Year (the "Excess Profit Sharing Benefits")
Section 3.4 LTIP Deferral Benefits.
(a) Amount. Each Participant may, by completing an approved deferral
election form, direct the Company to (i) reduce an "Award" that has been
deferred until the tenth anniversary of the Grant Date of such Award and thereby
extinguish his entitlement under the LTIP Plan to 100% of such deferred Award
and (ii) credit the amount of the reduction (the "LTIP Deferral Benefits") to
the LTIP Deferral Sub-Account hereunder. In addition, certain Awards that were
deferred under the LTIP Plan will automatically be transferred to this Plan in
the case of a Participant's "Retirement" (as defined in the LTIP Plan), in which
case such Awards will also be credited to the Participant's LTIP Deferral
Sub-Account hereunder. Notwithstanding the foregoing, the only additional LTIP
Deferral Benefits that shall be accepted hereunder are those Awards with a Grant
Date of January 1, 2004.
(b) Deferral Election. A Participant may elect to make a separate
deferral election with respect to each Award under the LTIP Plan. Each such
election must be made no
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later than one year prior to the date such Award would otherwise be payable to
the Participant under the LTIP Plan (or six months prior to Retirement (as
defined in the LTIP Plan), if later). Any direction by a Participant to defer
receipt of an Award under the LTIP Plan and to receive LTIP Deferral Benefits in
lieu of such Award shall be irrevocable with respect to such Award subject to
the terms hereof and in the LTIP Plan.
(c) Payment Date. The initial LTIP deferral election made by a
Participant shall also contain the Participant's IRREVOCABLE election regarding
the time of the commencement of payment of the Participant's entire LTIP
Deferral Sub-Account hereunder. The Participant may elect to commence payment of
his LTIP Deferral Sub-Account as soon as practicable following (1) the date on
which he ceases to be an Employee of the Controlled Group, (2) the date on which
he attains a specified age, or (3) the earlier or later of such dates. A
Participant who does not timely and properly file such an election form shall be
deemed to have elected to receive his LTIP Deferral Sub-Account as soon as
practicable following the date on which he ceases to be an Employee of the
Controlled Group. In the event that a Participant previously elected to receive
his LTIP Deferral Sub-Account at a specified age (or the earlier of a specified
age or the date on which he ceases to be an Employee of the Controlled Group)
and the Participant continues to be employed past such date, the Participant
shall be prohibited from deferring any additional LTIP Awards hereunder.
Section 3.5 Participant's Accounts. The Company shall establish and
maintain on its books an Account for each Participant which shall contain the
following entries:
(a) Credits to a Basic Excess 401(k) Sub-Account for the Basic Excess
401(k) Benefits described in Section 3.1(b)(i), which shall be credited to the
Sub-Account when a Participant is prevented from making a Salary Deferral
Contribution under the Savings Plan.
(b) Credits to an Excess Matching Sub-Account for the Excess Matching
Benefits described in Section 3.2, which shall be credited to the Sub-Account
when a Participant is prevented from receiving Matching Company Contributions
under the Savings Plan.
(c) Credits to an Additional Excess 401(k) Sub-Account for the
Additional Excess 401(k) Benefits described in Section 3.1(b)(ii), which shall
be credited to the Sub-Account when a Participant is prevented from making a
Salary Deferral Contribution under the Savings Plan.
(d) Credits to an Excess Profit Sharing Sub-Account for the Excess
Profit Sharing Benefits described in Section 3.3, which shall be credited to the
Sub-Account at the time the Profit Sharing Contributions are otherwise credited
to the Participant's account under the Savings Plan.
(e) Credits to an LTIP Deferral Sub-Account for the LTIP Deferral
Benefits described in Section 3.4, which shall be credited to the Sub-Account at
the time the Award would otherwise be payable to the Participant under the LTIP
Plan.
(f) Credits to all Sub-Accounts for the earnings described in Article
IV, which shall continue until such Sub-Accounts have been distributed to the
Participant or his Beneficiary.
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(g) Debits for any distributions made from the Sub-Accounts and for
any amounts forfeited under Section 6.4.
(h) The Company shall make the above-described credits and debits to
the Participant's Pre-2005 Sub-Accounts or the Post-2004 Sub-Accounts, as
applicable, in accordance with Code Section 409A.
ARTICLE IV
EARNINGS
Section 4.1 Earnings on Basic 401(k) and Matching Sub-Accounts and Profit
Sharing Sub-Accounts.
(a) Subject to Subsection (b) and Section 4.4, at the end of each
calendar month during a Plan Year, the Basic Excess 401(k) Sub-Account, Excess
Matching Sub-Account and Excess Profit Sharing Sub-Account of each Participant
shall be credited with earnings in an amount determined by multiplying such
Participant's average Sub-Account balance during such month by the blended rate
earned during such month by the Fixed Income Fund. Notwithstanding the
foregoing, in the event that the ROTCE determined for such Plan Year exceeds the
rate credited to the Participant's Sub-Accounts under the preceding sentence,
the Participant's Sub-Accounts shall retroactively be credited with the
difference between (i) the amount determined under the preceding sentence, and
(ii) the amount determined by multiplying such Participant's average Sub-Account
balance during each month of such Plan Year by the ROTCE determined for such
Plan Year, compounded monthly.
(b) The ROTCE calculation described in Subsection (a) shall be made
during the month in which the Participant terminates employment and shall be
based on the year-to-date ROTCE for the month ending prior to the date the
Participant terminated employment, as calculated by the Company. For any
subsequent month, such ROTCE calculation shall not apply. The Fixed Income Fund
calculation described above for the month in which the Participant receives a
distribution from his Sub-Account shall be based on the blended rate earned
during the preceding month by the Fixed Income Fund.
Section 4.2 Earnings on Additional 401(k) Sub-Account. Subject to Section
4.4, at the end of each calendar month during a Plan Year, the Additional Excess
401(k) Sub-Account of each Participant shall be credited with earnings in an
amount determined by multiplying such Participant's average Sub-Account balance
during such month by the blended rate earned by the Fixed Income Fund. The
earnings calculation for the month in which the Participant receives a
distribution from his Sub-Account will be based on the blended rate earned
during the preceding month by the Fixed Income Fund.
Section 4.3 Earnings on LTIP Deferral Sub-Accounts. Subject to Section 4.4,
at the end of each calendar month during a Plan Year, the LTIP Deferral
Sub-Account of each Participant shall be credited with an amount determined by
multiplying such Participant's average Sub-Account balance during such month by
the "10-Year U.S. Treasury Yield" plus 2.0%. For purposes hereof, the 10-Year
U.S. Treasury Yield shall be the 10 year yield on US
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Treasury issues as listed in the Bond Market Data Bank for the last day of the
preceding calendar quarter as printed in the Wall Street Journal (or as
published on the Website for the Wall Street Journal). In the event that a yield
is not listed for a maturity exactly 10 years from the calendar quarter end, the
next preceding chronological treasury bond issue yield shall be used.
Section 4.4 Changes in/Limitations on Earnings Assumptions.
(a) To the extent not prohibited by Code Section 409A, the Company
(with the approval or ratification of the NACCO Industries, Inc. Benefits
Committee (the "Benefits Committee")) may change (but not suspend) the earnings
rate credited on Accounts hereunder at any time.
(b) Notwithstanding any provision of the Plan to the contrary, in no
event will earnings on Accounts for a Plan Year be credited at a rate which
exceeds 14%.
ARTICLE V
VESTING
Section 5.1 Vesting. All Participants who are employed on or after December
31, 1999 shall be immediately 100% vested in all amounts credited to their
Account hereunder.
ARTICLE VI
DISTRIBUTION OF BENEFITS TO PARTICIPANTS
Section 6.1 Excess 401(k) Sub-Account, Excess Matching Sub-Account and LTIP
Deferral Sub-Account.
(a) Payment Dates. A Participant's Excess 401(k) Sub-Account, Excess
Matching Sub-Account and LTIP Deferral Sub-Account shall each be paid (or
commence to be paid) to the Participant as soon as practicable after the date
elected (or deemed elected) by the Participant under Section 3.1, 3.2 or 3.4, as
applicable.
(b) Form of Payment of Pre-2005 Sub-Accounts.
(i) Normal Form of Payment for Pre-2005 Sub-Accounts. The Pre-2005
Excess 401(k) Sub-Account (along with the corresponding Pre-2005 Excess Matching
Sub-Account) and the LTIP Deferral Sub-Account shall each be distributed to the
Participant in the form of ten annual installments. All installment payments
under the Plan shall be based on the value of the applicable Sub-Account on the
Valuation Date immediately preceding the date such installment is to be paid,
with each installment being a fraction of such value in which the numerator is
one and the denominator is the total number of remaining installments to be
paid. The first installment payment shall be paid as soon as practicable after
the designated payment date, with each additional installment being paid in the
month of January of each succeeding calendar year. Installment payments under
the Plan will be classified as a single payment for purposes of Section 409A of
the Code.
(ii) Optional Forms of Payment for Pre-2005 Sub-Accounts.
Notwithstanding clause (i) hereof, the Participant may elect to receive the
amount credited to his Pre-2005 Excess
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401(k) Sub-Account (along with the corresponding Pre-2005 Excess Matching
Sub-Account) and/or his LTIP Deferral Sub-Account in the form of a single lump
sum payment or in annual installments for a period of less than 10 years by
filing a notice in writing, signed by the Participant and filed with the Plan
Administrator while the Participant is alive and at least one year prior to the
designated payment date. Any such election of the form of benefit may be changed
at any time and from time to time, without the consent of any other person, by
filing a later election in writing that is signed by the Participant and filed
with the Plan Administrator while the Participant is alive and at least one year
prior to the designated payment date. Any such lump sum payment shall be paid as
soon as practicable following the designated payment date.
(c) Form of Payment for Post-2004 Excess 401(k) and Matching
Sub-Accounts. Except for amounts described in Section 3.1(e), the Participant
shall elect a form of payment for his Post-2004 Excess 401(k) Sub-Account (which
shall automatically apply to his Post-2004 Excess Matching Sub-Account) prior to
December 31, 2004 (or in his initial deferral election form that is filed when
the Plan first becomes applicable to him, if later). He may elect to receive
such Sub-Account in the form of a lump sum payment or in the form of annual
installment payments (for 10 or fewer years), with the installment payments (if
any) being calculated in accordance with the rules specified in Subsection
(b)(i), above. If the Participant does not make a timely election regarding the
form of payment, his Post-2004 Excess 401(k) and Matching Sub-Accounts shall be
distributed in the form of a single lump sum payment. Once made, the election
(or deemed election) of a form of payment under this Subsection (c) shall be
IRREVOCABLE.
Section 6.2 Excess Profit Sharing Benefits.
(a) Pre-2005 Excess Profit Sharing Sub-Accounts. Amounts allocated to
a Participant's Pre-2005 Excess Profit Sharing Sub-Account shall be paid (or
commence to be paid) at the same time that the Profit Sharing Contributions are
paid (or commence to be paid) to the Participant under the Savings Plan.
Participants have the ability to elect (and change) a form of payment for their
Pre-2005 Excess Profit Sharing Sub-Accounts under the same rules as are
specified in Section 6.1(b) above.
(b) Post-2004 Excess Profit Sharing Sub-Accounts. Amounts allocated to
a Participant's Post-2004 Excess Profit Sharing Sub-Account shall automatically
be paid in the form of a lump sum payment at the time of the Participant's
Termination of Employment.
Section 6.3 Unforeseeable Emergency Distributions. Notwithstanding the
foregoing, the Plan Administrator may at any time, upon written request of the
Participant, cause to be paid to such Participant an amount equal to all or any
part of the Participant's Account if the Plan Administrator determines, in its
absolute discretion based on such reasonable evidence that it shall require,
that such a payment or payments is necessary for the purpose of alleviating the
consequences of an Unforeseeable Emergency occurring with respect to the
Participant. Payments made on account of an Unforeseeable Emergency shall be
permitted only to the extent the amount does not exceed the amount reasonably
necessary to satisfy the emergency need (plus an amount necessary to pay taxes
and penalties reasonably anticipated as a result of the distribution) and may
not be made to the extent such Unforeseeable Emergency is or may be
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relieved through reimbursement or compensation by insurance or otherwise or by
liquidation of the Participant's assets (to the extent such liquidation would
not itself cause severe financial hardship). Unforeseeable Emergency
distributions shall be paid to the Participant in the form of a lump sum payment
as soon as practicable after such distribution request is approved and processed
by the Plan Administrator.
Section 6.4 Withdrawals from Pre-2005 Sub-Accounts Subject to a 10%
Penalty. Notwithstanding any provision of the Plan to the contrary, (a) a
Participant who is an Employee may, at any time (and from time to time) elect in
writing to receive a withdrawal of 100% of his Additional Pre-2005 Excess 401(k)
Sub-Account and/or his LTIP Deferral Sub-Account and (b) a Participant who has
ceased to be an Employee of the Controlled Group may also elect in writing to
receive a withdrawal of 100% of his Basic Pre-2005 Excess 401(k) Sub-Account,
Pre-2005 Excess Matching Sub-Account and/or his Pre-2005 Excess Profit Sharing
Sub-Account. Withdrawals under this Section shall be equal to the entire amount
credited to any such Sub-Account at the time of the withdrawal, less 10%. Such
10% reduction shall be treated as a forfeiture hereunder and shall immediately
be subtracted from the applicable Sub-Account, never to be restored.
Section 6.5 Other Payment Rules and Restrictions.
(a) Payments From Post-2004 Sub-Accounts Violating Contractual
Requirements. Notwithstanding any provision of the Plan to the contrary, the
payment of all or any portion of the amounts payable hereunder from a
Participant's Post-2004 Sub-Accounts will be deferred to the extent that the
Company reasonably anticipates that the making of such payment would violate a
term of a loan agreement or other similar contract to which the Company is a
party and the violation will cause material harm to the Company. The deferred
amount shall become payable at the earliest date at which the Company reasonably
anticipates that making the payment will not cause such violation, or such
violation will not cause material harm to the Company.
(b) Payments Violating Applicable Law. Notwithstanding any provision
of the Plan to the contrary, the payment of all or any portion of the amounts
payable hereunder will be deferred to the extent that the Company reasonably
anticipates that the making of such payment would violate Federal securities
laws or other applicable law (provided that the making of a payment that would
cause income taxes or penalties under the Code shall not be treated as a
violation of applicable law). The deferred amount shall become payable at the
earliest date at which the Company reasonably anticipates that making the
payment will not cause such violation.
(c) Small Sub-Accounts. Notwithstanding any provision of the Plan to
the contrary, (i) in the event that the sum of a Participant's Pre-2005
Sub-Account balances do not exceed $10,000 on the date of the Participant's
termination of employment with the Controlled Group, such Sub-Accounts shall
automatically be paid to him in a single lump sum payment on the date of his
termination of employment with the Controlled Group and (ii) in the event that
the sum of a Participant's Post-2004 Sub-Account balances (plus any other
amounts that are required to be aggregated therewith under Code Section 409A) do
not exceed $10,000 on the date of the Participant's Termination of Employment,
such
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Sub-Accounts shall automatically be paid to him in a single lump sum payment at
the latest of (A) the date of his Termination of Employment or (B) the end of
the 6-month period described in Subsection (e) below for Key Employees.
(d) Insolvency. Notwithstanding any provision of the Plan to the
contrary, the Company shall not be required to make any payment hereunder to any
Participant or Beneficiary if the Company is Insolvent at the time such payment
is due to be made or if the payment would jeopardize the solvency of the
Company; provided that the payment shall be made during the first calendar year
in which the funds of the Company are sufficient to make the payment without
jeopardizing the solvency of the Company.
(e) Key Employees. Notwithstanding any provision of the Plan to the
contrary, distributions of Post-2004 Sub-Accounts to Key Employees made on
account of a Termination of Employment may not be made before the date that is
six months after such Termination of Employment (or, if earlier, the date of
death) except for payments made on account of (i) a QDRO (as specified in
Section 8.5) or (ii) a conflict of interest or the payment of FICA taxes (as
specified in Subsection (g) below). Any amounts that are otherwise payable to
the Key Employee during the 6-month period following his Termination of
Employment shall be accumulated and paid in a lump sum make-up payment as soon
as practicable following the end of such 6-month period.
(f) Time of Payment/Processing. All payments under the Plan shall be
made on, or as soon as practicable after, the specified payment date (and, in
any event, no later than December 31 of the year that includes the specified
payment date or, if later, by the 15th day of the third calendar month following
the specified payment date). Notwithstanding the foregoing, if the calculation
of the amount payable from the Post-2004 Sub-Accounts is not administratively
practicable due to events beyond the control of the Company and the Participant,
the payment shall be made during the first calendar year in which the payment is
administratively practicable.
(g) Acceleration of Payments. Notwithstanding any provision of the
Plan to the contrary, payments of Post-2004 Sub-Accounts hereunder may be
accelerated (i) to the extent necessary to comply with a certificate of
divestiture (as defined in Code Section 1043(b)(2)) or (ii) to the extent
necessary to pay the FICA taxes imposed on benefits hereunder under Code Section
3101, and the income withholding taxes related thereto. Payments may also be
accelerated if the Plan (or a portion thereof) fails to satisfy the requirements
of Code Section 409A; provided that the amount of such payment may not exceed
the amount required to be included as income as a result of the failure to
comply with Code Section 409A.
ARTICLE VII
BENEFICIARIES
Section 7.1 Beneficiary Designations. A designation of a Beneficiary
hereunder may be made only by an instrument (in form acceptable to the Plan
Administrator) signed by the Participant and filed with the Plan Administrator
prior to the Participant's death. Separate Beneficiary designations may be made
for each Sub-Account under the Plan; provided that a
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single Beneficiary must be designated for both the Excess 401(k) Sub--Account
and the Excess Matching Sub-Account. In the absence of such a designation and at
any other time when there is no existing Beneficiary designated hereunder, the
Beneficiary of a Participant for his Excess Retirement Benefits shall be his
Beneficiary under the Savings Plan. A person designated by a Participant as his
Beneficiary who or which ceases to exist shall not be entitled to any part of
any payment thereafter to be made to the Participant's Beneficiary unless the
Participant's designation specifically provided to the contrary. If two or more
persons designated as a Participant's Beneficiary are in existence with respect
to a single Sub-Account, the amount of any payment to the Beneficiary under this
Plan shall be divided equally among such persons unless the Participant's
designation specifically provided to the contrary. Any change in Beneficiary
shall be made by giving written notice thereof to the Plan Administrator and any
change shall be effective only if received by the Plan Administrator prior to
the death of the Participant.
Section 7.2 Distributions to Beneficiaries. Excess Retirement Benefits
payable to a Participant's Beneficiary shall be equal to the balance in the
applicable Sub-Account on the Valuation Date preceding the date of the
distribution of the Sub-Account to the Beneficiary. All Excess Retirement
Benefits payable hereunder shall be paid in the form of a lump sum payment made
as soon as practicable following the death of the Participant.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Liability of Company. Nothing in this Plan shall constitute the
creation of a trust or other fiduciary relationship between the Company and any
Participant, Beneficiary or any other person.
Section 8.2 Limitation on Rights of Participants and Beneficiaries - No
Lien. The Plan is designed to be an unfunded, nonqualified plan. Nothing
contained herein shall be deemed to create a trust or lien in favor of any
Participant or Beneficiary on any assets of the Company. The Company shall have
no obligation to purchase any assets that do not remain subject to the claims of
the creditors of the Company for use in connection with the Plan. No Participant
or Beneficiary or any other person shall have any preferred claim on, or any
beneficial ownership interest in, any assets of the Company prior to the time
that such assets are paid to the Participant or Beneficiary as provided herein.
Each Participant and Beneficiary shall have the status of a general unsecured
creditor of the Company.
Section 8.3 No Guarantee of Employment. Nothing in this Plan shall be
construed as guaranteeing future employment to Participants. A Participant
continues to be an Employee of the Company solely at the will of the Company
subject to discharge at any time, with or without cause.
Section 8.4 Payment to Guardian. If a Benefit payable hereunder is payable
to a minor, to a person declared incompetent or to a person incapable of
handling the disposition of his property, the Plan Administrator may direct
payment of such Benefit to the guardian, legal representative or person having
the care and custody of such minor, incompetent or person. The Plan
Administrator may require such proof of incompetency, minority, incapacity or
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guardianship as it may deem appropriate prior to distribution of the Benefit.
Such distribution shall completely discharge the Company from all liability with
respect to such Benefit.
Section 8.5 Assignment. No right or interest under this Plan of any
Participant or Beneficiary shall be assignable or transferable in any manner or
be subject to alienation, anticipation, sale, pledge, encumbrance or other legal
process or in any manner be liable for or subject to the debts or liabilities of
the Participant or Beneficiary. Notwithstanding the foregoing, the Plan
Administrator shall honor a qualified domestic relations order ("QDRO") from a
state domestic relations court which requires the payment of part of all or a
Participant's or Beneficiary's Account under this Plan to an "alternate payee"
as defined in Code Section 414(p).
Section 8.6 Severability. If any provision of this Plan or the application
thereof to any circumstance(s) or person(s) is held to be invalid by a court of
competent jurisdiction, the remainder of the Plan and the application of such
provision to other circumstances or persons shall not be affected thereby.
Section 8.7 Effect on Other Benefits. Benefits payable to or with respect
to a Participant under the Savings Plan or any other Company-sponsored
(qualified or nonqualified) plan, if any, are in addition to those provided
under this Plan.
Section 8.8 Liability for Payment/Expenses. The Company shall be liable for
the payment of the Excess Retirement Benefits that are payable hereunder.
Expenses of administering the Plan shall be paid by the Company.
ARTICLE IX
ADMINISTRATION OF PLAN
Section 9.1 Administration. (a) In general. The Plan shall be administered
by the Plan Administrator. The Plan Administrator shall have sole and absolute
discretion to interpret where necessary all provisions of the Plan (including,
without limitation, by supplying omissions from, correcting deficiencies in, or
resolving inconsistencies or ambiguities in, the language of the Plan), to make
factual findings with respect to any issue arising under the Plan, to determine
the rights and status under the Plan of Participants, or other persons, to
resolve questions (including factual questions) or disputes arising under the
Plan and to make any determinations with respect to the benefits payable under
the Plan and the persons entitled thereto as may be necessary for the purposes
of the Plan. Without limiting the generality of the foregoing, the Plan
Administrator is hereby granted the authority (i) to determine whether a
particular employee is a Participant, and (ii) to determine if a person is
entitled to Excess Retirement Benefits hereunder and, if so, the amount and
duration of such Benefits. The Plan Administrator's determination of the rights
of any person hereunder shall be final and binding on all persons, subject only
to the claims procedures outlined in Section 9.3 hereof.
(b) Delegation of Duties. The Plan Administrator may delegate any of
its administrative duties, including, without limitation, duties with respect to
the processing, review, investigation, approval and payment of Excess Retirement
Benefits, to a named administrator or administrators.
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Section 9.2 Regulations. The Plan Administrator may promulgate any rules
and regulations it deems necessary in order to carry out the purposes of the
Plan or to interpret the provisions of the Plan; provided, however, that no
rule, regulation or interpretation shall be contrary to the provisions of the
Plan. The rules, regulations and interpretations made by the Plan Administrator
shall, subject only to the claims procedure outlined in Section 9.3 hereof, be
final and binding on all persons.
Section 9.3 Claims Procedures. The Plan Administrator shall determine the
rights of any person to any Excess Retirement Benefits hereunder. Any person who
believes that he has not received the Excess Retirement Benefits to which he is
entitled under the Plan may file a claim in writing with the Plan Administrator.
The Plan Administrator shall, no later than 90 days after the receipt of a claim
(plus an additional period of 90 days if required for processing, provided that
notice of the extension of time is given to the claimant within the first 90 day
period), either allow or deny the claim in writing.
A denial of a claim by the Plan Administrator, wholly or partially,
shall be written in a manner calculated to be understood by the claimant and
shall include:
(a) the specific reasons for the denial;
(b) specific reference to pertinent Plan provisions on which the
denial is based;
(c) a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such material or
information is necessary; and
(d) an explanation of the claim review procedure and the time limits
applicable thereto (including a statement of the claimant's right to bring a
civil action under Section 502(a) of ERISA following an adverse benefit
determination on review).
A claimant whose claim is denied (or his duly authorized
representative) may within 60 days after receipt of denial of a claim file with
the Plan Administrator a written request for a review of such claim. If the
claimant does not file a request for review of his claim within such 60-day
period, the claimant shall be deemed to have acquiesced in the original decision
of the Plan Administrator on his claim. If such an appeal is so filed within
such 60 day period, the Compensation Committee (or its delegate) shall conduct a
full and fair review of such claim. During such review, the claimant shall be
given the opportunity to review documents that are pertinent to his claim and to
submit issues and comments in writing. For this purpose, the Compensation
Committee (or its delegate) shall have the same power to interpret the Plan and
make findings of fact thereunder as is given to the Plan Administrator under
Section 9.1(a) above.
The Compensation Committee (or its delegate) shall mail or deliver to
the claimant a written decision on the matter based on the facts and the
pertinent provisions of the Plan within 60 days after the receipt of the request
for review (unless special circumstances require an extension of up to 60
additional days, in which case written notice of such extension
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shall be given to the claimant prior to the commencement of such extension).
Such decision shall be written in a manner calculated to be understood by the
claimant, shall state the specific reasons for the decision and the specific
Plan provisions on which the decision was based and shall, to the extent
permitted by law, be final and binding on all interested persons. In addition,
the notice of adverse determination shall also include statements that the
claimant is entitled to receive, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information relevant
to the claimant's claim for benefits and a statement of the claimant's right to
bring a civil action under Section 502(a) of ERISA.
Section 9.4 Revocability of Action. Any action taken by the Plan
Administrator or the Compensation Committee with respect to the rights or
benefits under the Plan of any person shall be revocable as to payments not yet
made to such person. In addition, the acceptance of any Excess Retirement
Benefits under the Plan constitutes acceptance of and agreement to the Plan
making any appropriate adjustments in future payments to any person (or to
recover from such person) any excess payment or underpayment previously made to
him.
Section 9.5 Amendment. The Company (with the approval or ratification of
the Benefits Committee) may at any time amend any or all of the provisions of
this Plan, except that (a) no such amendment may adversely affect the amount of
any Participant's vested Excess Retirement Benefit as of the date of such
amendment and (b) no such amendment may suspend the crediting of earnings on the
balance of a Participant's Account, until the entire balance of such Account has
been distributed, in either case without the prior written consent of the
Participant. Any amendment shall be in the form of a written instrument executed
by an officer of the Company. Subject to the foregoing provisions of this
Section, such amendment shall become effective as of the date specified in such
instrument or, if no such date is specified, on the date of its execution.
Section 9.6 Termination.
(a) The Company, in its sole discretion, may terminate this Plan at
any time and for any reason whatsoever, except that, subject to Subsection (b)
hereof, (i) no such termination may adversely affect the amount of any
Participant's vested Excess Retirement Benefit as of the date of such
termination and (ii) no such termination may suspend the crediting of earnings
on the balance of a Participant's Account, until the entire balance of such
Account has been distributed, in either case without the prior written consent
of the Participant. Any such termination shall be expressed in the form of a
written instrument executed by an officer of the Company, with the approval or
ratification of the Compensation Committee. Subject to the foregoing provisions
of this Section, such termination shall become effective as of the date
specified in such instrument or, if no such date is specified, on the date of
its execution. Written notice of any termination shall be given to the
Participants as soon as practicable after the instrument is executed.
(b) Notwithstanding anything in the Plan to the contrary, to the
extent permitted under Code Section 409A, in the event of a termination of the
Plan (or any portion thereof), the Company, in its sole and absolute discretion,
shall have the right to change the time and form of distribution of
Participants' Excess Retirement Benefits, including requiring that all amounts
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credited to a Participant's Account hereunder be immediately distributed in the
form of a lump sum payment.
Executed this 8th day of February, 2006.
THE KITCHEN COLLECTION, INC.
By: /s/ Charles A. Bittenbender
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Title: Assistant Secretary
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