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Exhibit 10.30
CAMELOT MUSIC HOLDINGS, INC.
DEFERRED COMPENSATION PLAN
FOR OUTSIDE DIRECTORS
EFFECTIVE: JUNE 30, 1998
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DEFERRED COMPENSATION PLAN
FOR OUTSIDE DIRECTORS
This Plan is hereby adopted on this 4th day of June, 1998,
effective June 30, 1998, by CAMELOT MUSIC HOLDINGS, INC.(the "Company").
I. NAME AND PURPOSE
1.1. NAME. The name of this Plan shall be the CAMELOT MUSIC
HOLDINGS, INC. DEFERRED COMPENSATION PLAN FOR OUTSIDE
DIRECTORS.
1.2. PURPOSE. This Plan is hereby established to provide unfunded
deferred compensation to Directors under certain conditions
specified herein.
1.3. NOT A FUNDED PLAN. It is the intention and purpose of the
Company that this Plan shall be deemed to be "unfunded" for
tax purposes as well as any other purpose. This Plan shall be
administered in such a manner, notwithstanding any contrary
provision of this Plan, that it will be so deemed and would be
so described.
II. DEFINITIONS
2.1. "ACCOUNTS" mean the Participants' Elective Accounts maintained
on the books of the Company for Participants under this Plan.
A Participant's Account shall not constitute or be treated as
a trust fund of any kind.
2.2. "ADMINISTRATOR" means the person, persons, corporation,
partnership or other entity designated as Administrator under
Section 7.6.
2.3. "AGREEMENT" means the Deferred Compensation Deferral
Agreement(s) executed between a Participant and the Company,
whereby a Participant agrees to defer a portion of his
Compensation in accordance with the provisions of the Plan.
2.4. "APPEALS COMMITTEE" means the Appeals Committee established
pursuant to Article VI.
2.5. "BENEFICIARY" means the person, persons or entity so
designated, or deemed to be so designated, by a Participant
pursuant to Section 4.9.
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2.6. "BOARD OF DIRECTORS" means the Board of Directors of the
Company.
2.7. "CODE" means the Internal Revenue Code of 1986, as amended and
any lawful regulations or other pronouncements promulgated
thereunder.
2.8. "COMPANY" means Camelot Music Holdings, Inc. and any successor
corporation or business organization which shall assume the
duties and obligations of Camelot Music Holdings, Inc. under
this Plan.
2.9. "COMPENSATION" means for any Participant the retainer and
meeting fees paid to him for his services as a Director.
2.10. "DETERMINATION DATE" means the last day of each calendar
quarter.
2.11. "DIRECTOR" shall mean a member of the Board of Directors of
the Company or any of its subsidiaries or affiliated
companies, who is not otherwise employed by the Company or any
of its subsidiaries or affiliated companies.
2.12. "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 duties as a Director.
2.13. "EFFECTIVE DATE" means the date this Plan shall become
effective which date shall be June 30, 1998.
2.14. "ELECTION YEAR" means the period from the Effective Date
through December 31, 1998 and any calendar year thereafter.
2.15. "ELECTIVE AMOUNT" means for each Participant an amount equal
to the amount by which his Compensation is reduced pursuant to
Section 3.4 hereof.
2.16. "ENTRY DATE" means, with respect to any Participant with
respect to any Election Year, the beginning of such Election
Year or, if, pursuant to Section 3.2, such Participant first
becomes eligible to participate in the Plan on a date
following the commencement of an Election Year, then the first
day of the month coincident with or next following the date he
first
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meets the eligibility requirements in such Election Year.
2.17. "NORMAL RETIREMENT DATE" means the date a Participant attains
age 65.
2.18. "PARTICIPANT" means any Director who elects to participate in
the Plan in accordance with Section 3.1 hereof and who enters
into an Agreement and who has commenced Compensation
reductions pursuant to such Agreement. A Participant shall
cease to be a Participant, and shall become a former
Participant, upon his Termination of Service. However, the
word Participant may also include, where the context
indicates, any former Participant in this Plan.
2.19. "PARTICIPANT ELECTIVE ACCOUNT" means for each Participant the
bookkeeping account maintained by the Company on his behalf to
reflect his Elective Amounts for an Election Year and all
earnings, gains and losses thereon.
2.20. "PLAN" means the Camelot Music Holdings, Inc. Deferred
Compensation Plan for Outside Directors, as set forth in this
instrument, as amended from time to time.
2.21. "TERMINATION OF SERVICE" means the Participant's cessation of
his service as a Director for any reason whatsoever, whether
voluntarily or involuntarily, including by reason of
retirement, death, or Disability.
III. PARTICIPATION, COMPENSATION REDUCTIONS AND ACCOUNTS
3.1. ELIGIBILITY. A Director shall be eligible to participate in
the Plan for any Election Year as of the first date that the
Director has been elected a Director of the Company.
3.2. PARTICIPATION. Each Director who has satisfied the eligibility
requirements set forth in Section 3.1 shall become a
Participant and actively participate for an Election Year by
completing and filing an Agreement described in Section 3.3
with the Company prior to the first day of the Election Year
or the Effective Date, in the case of the initial Election
Year. In the event a Director first meets such eligibility
requirements after the beginning of an Election Year, such
Director may become a Participant and actively participate for
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the period commencing on the first day of the month coincident
with or after which he meets the eligibility requirements
until the end of such Election Year by completing and filing
an Agreement described in Section 3.3 with the Company prior
to the first day of such month. Such Agreement shall contain
such provisions as the Company shall require and shall
otherwise be in such form as the Administrator shall
determine.
3.3. DEFERRAL ELECTIONS UNDER AN AGREEMENT. With respect to each
Election Year, each eligible Director may elect, under his
Agreement for such Election Year, to make a deferral of his
Compensation at least a reasonable time, as determined by the
Company in its sole discretion, prior to the time any such
deferred amounts would otherwise be payable to such
Participants. Any such deferral shall be evidenced by an
Agreement in a form acceptable to the Administrator.
3.4. COMPENSATION REDUCTIONS AND DEFERRAL AMOUNTS. A Participant's
election to defer in accordance with 3.3 shall cause an
equivalent reduction in the Participant's Compensation at the
time such amounts would otherwise be payable.
An amount equal to such reductions in a Participant's
Compensation shall constitute an Elective Amount hereunder and
shall be credited to such Participant's Elective Account as of
the time of such reductions.
3.5. ALTERATION OF DEFERRALS. A Participant's deferral election
made pursuant to Section 3.3 above shall be irrevocable.
3.6. ESTABLISHMENT OF ACCOUNTS. The Company shall establish a
Participant Elective Account in the name of each Participant.
All amounts so credited to the Accounts of any Participant or
former Participant shall constitute a general, unsecured
liability of the Company to such person.
3.7. ALLOCATION OF ELECTIVE AMOUNTS. At the time a Participant's
Compensation is reduced pursuant to Section 3.4 hereof, the
Company shall credit the Participant Elective Account of such
Participant with the Participant's Elective Amount with
respect to such Compensation.
3.8. CREDITING OF EARNINGS. The Company shall credit the Account of
each Participant with earnings at the rate of interest on such
Account as if an amount equal to
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the Participant's Account balance had been advanced under the
Revolving Credit Agreement, dated as of January 27, 1998 and
amended as of June 12, 1998, by and among Camelot Music, Inc.,
the several lenders named therein and The Chase Manhattan
Bank, N.A., as agent as such agreement may be amended,
supplemented or otherwise modified from time to time,
including replacement of such agreement with another credit
agreement of like kind and tenor. In the event that no such
agreement is extant, the Company shall credit the Account of
each Participant with earnings calculated in such other manner
as the Company may determine.
3.9. DETERMINATION OF ACCOUNT. The balance of each Participant's
Account as of each Determination Date shall be calculated as
follows, using the terms and methods in the order defined
below:
(a) Earnings, gains and losses determined pursuant to
Section 3.8 shall be allocated based on the
Participant's Adjusted Account. A Participant's
Adjusted Account is equal to the Participant's
Account as of the prior Determination Date, plus 50%
of Elective Amounts, less forfeitures, and less
distributions, which occurred after the prior
Determination Date and up through and including the
current Determination Date.
IV. BENEFITS
4.1. IN-SERVICE DISTRIBUTION. A Participant who is an active
Director of the Company may request to withdraw all or a
portion of his Accounts, provided that any such amounts have
been credited to his Accounts for two (2) or more calendar
years at the time of distribution. Such request shall be made
in writing in a form and manner specified by the Company and
must specify the amounts to be withdrawn and the date upon
which such amounts shall be paid which must be as soon as
administratively possible following a Determination Date that
is at least one (1) year after the date on which the request
is made. Any such request shall be irrevocable unless, prior
to payment, the Participant has a Termination of Service,
dies, or becomes disabled, at which time the request shall
become null and void and the Participant's Accounts shall be
paid as provided in Section 4.3, 4.4, 4.5 or 4.6 hereof,
whichever shall be applicable.
4.2. PARTICIPANT CALL PROVISION. A Participant (or the
Participant's Beneficiary in the case of the death of
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the Participant) at any time may request an accelerated
distribution of all or a portion of the amounts credited to
his Accounts except those amounts that have been contributed
during the Election Year when such request is made, subject to
the forfeiture of an amount equal to ten percent (10%) of such
accelerated amount. Such request shall be made in writing in a
form and manner specified by the Company. The Company shall
distribute to the Participant or Beneficiary such accelerated
amount in the form of a lump sum as soon as administratively
possible after the Determination Date that coincides with or
is immediately after the date on which the Company receives
the request. Such distribution shall completely discharge the
Company from all liability with respect to the Participant's
or Beneficiary's Accounts or portion thereof that is either
distributed or forfeited as set forth herein. Further, if the
Participant is a Director at the time of the distribution, the
Participant may not make any further deferrals into the Plan
until January 1 of the second calendar year following the
calendar year in which the Participant receives the
distribution.
4.3. TERMINATION BENEFIT. Upon the Termination of Service of a
Participant, for reasons other than death or Disability, he
shall be entitled to receive a distribution of the balance of
his Accounts. Such distribution shall be in the form of
benefit provided in Section 4.7 and shall be paid or commence
to be paid as soon as administratively possible after a
Determination Date that is at least one (1) year after the
date on which such a Participant makes a written request for
distribution; provided, however, that such payment or
commencement date shall in no event be later than a date which
is as soon as administratively possible after the January 1st
coinciding with or immediately after the later of either the
Participant's Normal Retirement Date or his date of actual
retirement.
4.4. DEATH PRIOR TO BENEFIT COMMENCEMENT. Upon the Participant's
death prior to commencement of benefits hereunder, the
Beneficiary of the deceased Participant shall be entitled to a
death benefit equal to the balance of the Participant's
Accounts. Such distribution shall be in the form of benefit
determined under Section 4.7 shall commence as of the date
determined under Section 4.8 and shall be in lieu of all other
benefits under this Plan.
4.5. DEATH SUBSEQUENT TO BENEFIT COMMENCEMENT. Upon the death of a
Participant subsequent to commencement of
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his benefits, the Beneficiary of the deceased Participant
shall be entitled to receive a distribution of the
Participant's remaining Accounts. Such distribution shall be
in the form of benefit determined under Section 4.7, shall
commence as of the date determined under Section 4.8 and shall
be in lieu of all other benefits under this Plan.
4.6. DISABILITY. In the event the Administrator has determined that
the Participant has incurred a Termination of Service due to a
Disability of at least six months duration which first
manifests itself after the Effective Date and prior to his
Normal Retirement Date, a disabled Participant shall be
entitled to receive a distribution of the balance of his
Accounts. Such distribution shall be in the form of benefit
determined under Section 4.7 and shall commence as of the date
determined under Section 4.8; provided, however, that the
payment or commencement date shall not be later than a date
which is as soon as administratively possible after the
Determination Date coinciding with or immediately following
the Participant's Normal Retirement Date.
4.7. FORM AND AMOUNT OF BENEFIT 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 Sections 4.3, 4.4, 4.5
and 4.6 shall be made in a single sum or in the form
of annual installments over a period of no less than
two (2) calendar years and no more than ten (10)
calendar years.
(b) Initially, the amount of any installments under any
installment form of payment shall be equal to the
balance of the Accounts to be distributed divided by
the number of installments to be paid. The amount of
the installment payments shall be recomputed annually
and the installment payments shall be increased or
decreased to reflect any changes in the Accounts due
to fluctuations in earnings, gains and losses on the
remaining balance and the number of remaining
installments.
(c) In the event of the death of the Participant, as
described in Sections 4.4 or 4.5, the Participant's
Beneficiary may, with the consent of the
Administrator, request an alternative form of benefit
payment, such as a lump-sum payment or an installment
form with an installment period of
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less than ten (10) years. Such request shall be made
in accordance with such procedures as the
Administrator may establish. 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 amounts
affected by such a 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.
(d) 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 hereunder, 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 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.
(e) Notwithstanding anything in this Section IV to the
contrary, in no event shall any distribution under
Section 4.1 or 4.2 hereunder be less than the lesser
of One Thousand Dollars ($1,000.00) or the entire
balance of the Participant's Accounts hereunder.
4.8. COMMENCEMENT OF PAYMENTS.
(a) Except as otherwise provided, commencement of
payments under this Plan shall be as soon as
administratively possible following receipt of notice
by the Administrator of an event which entitles a
Participant or a Beneficiary to payments under this
Plan. All payments shall be made as of the first day
of the month.
(b) Subject to such rules, procedures, limits and
restrictions as the Administrator may establish from
time to time, a Participant may elect that any single
sum distributions payable under this Article IV be
made as soon as administratively possible after the
start of any calendar year after the event permitting
payment.
(c) In the event of the death of the Participant, as
described in Sections 4.4 or 4.5, the
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Participant's Beneficiary may, with the consent of
the Administrator, request to change the time of
commencement of benefits hereunder. Such request
shall be made in accordance with such procedures as
the Administrator may establish. 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 amounts
affected by such a 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.
(d) 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 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.
4.9. DESIGNATION OF BENEFICIARY. Subject to rules and procedures
promulgated by the Administrator, a Participant may sign a
document designating a Beneficiary or Beneficiaries. In the
event that a Participant fails to designate any Beneficiary in
accordance with the provisions of this Section, he shall be
deemed to have designated his spouse, or if no spouse is then
living, his estate, as his Beneficiary.
4.10. TAX WITHHOLDING. The Company may withhold from any payment
made by it under the Plan of such amount or amounts as may be
required for purposes of complying with the tax withholding or
other provisions of the 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.
V. RIGHTS OF PARTICIPANTS
5.1. CREDITOR STATUS OF PARTICIPANTS. The Elective Amounts of a
Participant shall be merely unfunded, unsecured promises of
the Company to make benefit payments in the
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future and shall be liabilities solely against the general
assets of the Company. The Company shall not be required to
segregate, set aside or escrow the Elective Amounts nor any
earnings, gains and losses credited thereon. With respect to
amounts credited to any Accounts hereunder and any benefits
payable hereunder, a Participant and his or her Beneficiary
shall have the status of general unsecured creditors of the
Company, and may look only to the Company and its general
assets for payment of such Accounts and benefits.
VI. ADMINISTRATION AND CLAIMS PROCEDURE
6.1. ADMINISTRATOR. The Company shall be the Administrator unless
and until the Board shall appoint some other person, persons,
committee, corporation, partnership or other entity as
Administrator.
6.2. GENERAL RIGHTS, POWERS, AND DUTIES OF ADMINISTRATOR. The
Administrator shall be responsible for the general
administration of the Plan and shall have all powers as may be
necessary to carry out the provisions of the Plan and may,
from time to time, establish rules for the administration of
the Plan and the transaction of the Plan's business. In
addition to any powers, rights and duties set forth elsewhere
in the Plan, it shall have the following powers and duties:
(a) To enact such rules, regulations, and procedures and
to prescribe the use of such forms as it shall deem
advisable;
(b) To appoint or employ such agents, attorneys,
actuaries, accountants, assistants or other persons
(who may also be Participants in the Plan or be
employed by or represent the Company or any of it
subsidiaries or affiliated companies) 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;
(c) To interpret the Plan, and 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,
any person in accordance with the provisions of the
Plan and resolve all questions arising under the
Plan;
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(d) To administer the Plan in accordance with its terms
and any rules and regulations it establishes;
(e) To maintain such records concerning the Plan as it
deems sufficient to prepare reports, returns and
other information required by the Plan or by law; and
(f) To direct the Company to pay benefits under the Plan,
and to give such other directions and instructions as
may be necessary for the proper administration of the
Plan.
6.3. INFORMATION TO BE FURNISHED TO ADMINISTRATOR. The Company
shall furnish the Administrator with such data and information
as it may reasonably require. The records of the Company shall
be determinative of each Participant's period of service as a
Director, Termination of Service and the reason therefor,
leave of absence, years of service, personal data, and data
regarding Compensation and all reductions thereof under this
Plan. Participants and their Beneficiaries shall furnish to
the Administrator such evidence, data or information and
execute such documents as the Administrator requests.
6.4. CLAIM FOR BENEFITS. Any claim for benefits under the Plan
shall be made in writing to the Administrator in such a manner
as the Administrator shall prescribe. The Administrator shall
process each such claim and determine entitlement to benefits
within ninety (90) days following its receipt of a completed
application for benefits unless special circumstances require
an extension of time for processing the claim. If such an
extension of time for processing is required, written notice
of the extension shall be furnished to the claimant prior to
the termination of the initial ninety (90) day period. In no
event shall such extension exceed a period of ninety (90) days
from the end of such initial period. The extension notice
shall indicate the special circumstances requiring an
extension of time and the date as of which the Administrator
expects to render the final decision.
If such claim is wholly or partially denied by the
Administrator, the Administrator shall notify the claimant of
the denial of the claim in writing, delivered in person or
mailed by first class mail to the claimant's last known
address. Such notice of denial shall be in writing and shall
contain:
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(a) the specific reason or reasons for denial of the
claim;
(b) a reference to the relevant Plan provisions upon
which the denial is based;
(c) a description of any additional material or
information necessary for the claimant to perfect the
claim, together with an explanation of why such
material or information is necessary; and
(d) an explanation of the Plan's claim review procedure.
If no such notice is provided, the claim shall be
deemed denied. The interpretations, determinations and
decisions of the Administrator shall be final and binding upon
all persons with respect to any right, benefit and privilege
hereunder, subject to the review procedures set forth in this
Article.
6.5. REQUEST FOR REVIEW OF A DENIAL OF A CLAIM FOR BENEFITS. Any
claimant or any authorized representative of such claimant
whose claim for benefits under this Plan has been denied or
deemed 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 her or his claim
for benefits. Such claimant shall have sixty (60) days from
the date the claim is deemed denied, or sixty (60) days from
receipt of the notice denying the claim, as the case may be,
in which to request a review by written application delivered
to the Appeals Committee, which must specify the relief
requested and the reason such claimant believes the denial
should be reversed.
6.6. APPEALS PROCEDURE. The Appeals Committee is hereby authorized
to review the facts and relevant documents as well as this
Plan, to interpret this Plan and other relevant documents and
to render a decision on the claim of the claimant. Such review
may be made by written briefs submitted by the claimant 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 offices of the Company or such other
location as the Appeals Committee shall select on such date
and at such time as the Appeals Committee shall designate upon
not less than fifteen (15) days notice to the claimant and the
Administrator unless both of them accept shorter notice. The
notice shall specify that such claimant must indicate in
writing, at least five (5) days in
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advance of the time established for such hearing, his
intention to appear at the appointed time and place, or the
hearing will be automatically canceled. The reply shall
specify any other persons who will accompany him to the
hearing, or such other persons will not be admitted to the
hearing. The Appeals Committee shall make every effort to
schedule the hearing on a day and at a time which is
convenient to both the claimant and the Administrator. The
claimant, or his duly authorized representative, may review
all pertinent documents relating to the claim in preparation
for the hearing and may submit issues and comments in writing
prior to or during the hearing.
6.7. DECISION UPON REVIEW OF DENIAL OF CLAIM FOR BENEFITS. 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. In making its
decision the Appeals Committee shall have full power and
discretion to interpret the Plan, and 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, any person in accordance with
the provisions of the Plan. The Appeals Committee shall render
a decision on the claim review promptly, but no more than
sixty (60) days after the receipt of the claimant's request
for review, unless special circumstances (such as the need to
hold a hearing) require an extension of time, in which case
the sixty (60) day period shall be extended to one hundred
twenty (120) days. Such decision shall include specific
reasons for the decision and contain specific references to
the relevant Plan provisions upon which the decision is based.
The decision on review shall be furnished to the claimant
within the appropriate time described above. If the decision
on review is not furnished within such time, the claim shall
be deemed denied on review. The decision of the Appeals
Committee shall be final and binding in all respects on the
Administrator and the Company and claimant involved. The
review procedures of this Article shall be the sole and
exclusive remedy and shall be in lieu of all actions at law,
in equity, pursuant to arbitration or otherwise.
6.8. 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 arise under the Plan or a number of Appeals
Committees with different members to
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hear the appeals of denied benefits. 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.
6.9. 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
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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.
6.10. LIMITATION OF DUTIES. The Company, the Administrator, the
Appeals Committee, and their respective officers, members,
employees and agents shall have no duty or responsibility
under the Plan other than the duties and responsibilities
expressly assigned to them herein or delegated to them
pursuant hereto. None of them shall have any duty or
responsibility with respect to the duties or responsibilities
assigned or delegated to another of them.
6.11. EXPENSES OF ADMINISTRATION AND THE APPEALS COMMITTEE. No fee
or compensation shall be paid to the Administrator or any
member of the Appeals Committee for his or its services as
such, but the Administrator and Appeals Committee may be
reimbursed for its expenses from any Trust established by the
Company in connection herewith, or, if no funds exist therein
or if the Company determines that they should not be paid by
such Trust, by the Company. The Appeals Committee and the
Administrator may hire such attorneys, accountants, actuaries,
agents, clerks, and secretaries as it may deem desirable in
the performance of its functions, any of whom may also be
advisors to the Company or any affiliated company, and the
expense associated with the hiring or retention of any such
person or persons shall be paid directly by the Company or
from such Trust, as directed by the Company.
6.12. INDEMNIFICATION. In addition to whatever rights of
indemnification any individual who serves as a delegate of the
Administrator, Company and the members of the Appeals
Committee may be entitled to under the articles of
incorporation, regulations or bylaws of the Company, under any
provision of law or under any other agreement, the Company
shall satisfy any liability actually incurred by any such
individual including reasonable expenses and attorneys' fees,
and any judgments, fines, and amounts paid in settlement, in
connection with any threatened, pending or completed action,
suit or proceeding which is related to the exercise or failure
to exercise by such individual of any powers, authority,
responsibilities or discretion provided under this Plan or
reasonably believed by such member to be provided hereunder,
and any action taken by such individual in connection
therewith. This indemnification for all such acts taken or
omitted is
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intentionally broad, but shall not provide indemnification for
embezzlement or diversion of Plan funds for the benefit of any
such individual. Such indemnification will not be provided to
any person who is not a present or former employee the Company
or a subsidiary or affiliated company thereof nor shall it be
provided for any claim by the Company or a subsidiary or
affiliated company thereof against any such person. No
indemnification shall be provided to any person who is not an
individual.
6.13. LIMITATION OF ADMINISTRATIVE LIABILITY. Neither the
Administrator nor the Appeals Committee while acting on behalf
of the Administrator, nor any of their respective officers,
members, employees, agents and delegates shall be liable for
any act taken by such person or entity pursuant to any
provision of the Plan except for gross abuse of the discretion
given it and them hereunder. No member of the Appeals
Committee shall be liable for the act of any other member. No
member of the Board of Directors of the Company shall be
liable to any person for any action taken or omitted in
connection with the administration of this Plan.
6.14. LIMITATION OF SPONSOR LIABILITY. Any right or authority
exercisable by the Company or Board pursuant to any provision
of this Plan shall be exercised in the Company's capacity as
sponsor of the Plan, or on behalf of the Company in such
capacity, and not in a fiduciary capacity, and may be
exercised without the approval or consent of any person in a
fiduciary capacity. Neither the Company, nor the Board, nor
any of their respective officers, members, employees, agents
and delegates, shall have any liability to any party for its
exercise of any such right or authority.
VII. AMENDMENT AND TERMINATION
7.1. AMENDMENT, MODIFICATION AND TERMINATION. This Plan may be
amended, modified or terminated by the Company at any time, or
from time to time, by a document executed on behalf of the
Company by an officer thereof, which amendment, modification
or termination is authorized or ratified by the Board. No such
amendment, modification or termination shall reduce the
amounts credited to any Participant's Accounts, all determined
as of the date of such amendment, modification or termination.
7.2. DISTRIBUTIONS ON TERMINATION. In the event this Plan is
terminated, the amounts then credited to all Participants'
Accounts may, in the Company's sole
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discretion, (i) be distributed to the Participants in
quarterly installments over such period not more than fifteen
(15) years as the Company may determine, (ii) be distributed
to the Participants in a lump sum, or (iii) continue to be
credited with earnings, gains and losses pursuant to Article
III and be distributed pursuant to Article IV.
VII. MISCELLANEOUS
8.1. NO IMPLIED RIGHTS. Neither the establishment of the Plan nor
any amendment thereof shall be construed as giving any
Participant, Beneficiary or any other person 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, the Company
shall not be required or be liable to make any payment under
the Plan.
8.2. NO RIGHT TO COMPANY 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 the Company
whatsoever including, without limiting the generality of the
foregoing, any specific funds, assets or other property which
the Company, in its sole discretion, may set aside in
anticipation of a liability hereunder. Any benefits which
become payable hereunder shall be paid from the general assets
of the Company. The Participant shall have only a contractual
right to the amounts, if any, payable hereunder unsecured by
any asset of the Company. Nothing contained in the Plan
constitutes a guarantee by the Company that the assets of the
Company shall be sufficient to pay any benefit to any person.
8.3. NO RIGHTS TO CONTINUE AS DIRECTOR CREATED. This Plan shall not
be deemed to constitute a contract for services between the
Company and any Participant, nor confer upon any Participant
the right to be retained in the service of Director for any
period of time. Nothing herein shall be construed as fixing or
regulating the Compensation payable to any Participant.
8.4. 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 the Company, 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
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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.
8.5. 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
benefits or amounts credited to Accounts under this Plan are
expressly declared to be unassignable and non-transferable. No
part of the benefits or amounts credited to Accounts 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.
8.6. 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 Vice President of Human
Resources. 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.
8.7. 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.
8.8. 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, any Trust, the
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Administrator, the Company and the Appeals Committee with
respect to such payments.
8.9. 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.
8.10. RESPONSIBILITY FOR LEGAL EFFECT. Neither the Company, 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.
8.11. SUCCESSORS. The terms and conditions of this Plan shall inure
to the benefit of and bind the Company, the Administrator, the
Appeals Committee and its members, the Participants, their
beneficiaries, and the successors, assigns, and personal
representatives of any of them.
8.12. 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.
8.13. 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.
8.14. 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.
8.15. 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
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Company, or by any other person designated by any of the
foregoing.
IN WITNESS WHEREOF, the Company, by two of its appropriate officers duly
authorized, has executed this Deferred Compensation Plan for Outside Directors
as of the date first above written.
CAMELOT MUSIC HOLDINGS, INC.
("Company")
By
-----------------------------
Title
--------------------------
And
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Title
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