Henry Company
Executive Deferral Plan (EDP)
_________________________________________________________________
July 1, 1992
Amended Plan
Effective January 1, 1994
TABLE OF CONTENTS
Page
Purpose...................................................... 1
Article 1 Definitions...................................... 1
Article 2 Eligibility...................................... 3
2.1 Selection by Committee........................... 3
2.2 Enrollment Requirements.......................... 3
Article 3 Deferral Commitments/Interest Crediting.......... 4
3.1 Minimum Deferral................................. 4
3.2 Maximum Deferral................................. 4
3.3 Withholding of Deferral Amounts.................. 4
3.4 FICA Taxes....................................... 4
3.5 Interest Crediting Prior to Distribution......... 4
3.6 Company Contribution............................. 4
Article 4 Short Term Payout/Unforeseeable Financial
Emergencies/Withdrawal Election.................. 5
4.1 Eligibility for Short Term Payout................ 5
4.2 Amount of Distribution........................... 5
4.3 Withdrawal Payout/Suspensions for
Unforeseeable Financial Emergencies.............. 5
4.4 Withdrawal Election.............................. 5
4.5 Applicability of Other Sections.................. 6
Article 5 Retirement Benefit............................... 6
5.1 Eligibility for Retirement Benefit............... 6
5.2 Retirement Benefit - Method of Payment .......... 6
Article 6 Survivor's Benefit............................... 6
6.1 Eligibility for Survivor's Benefit............... 6
6.2 Survivor's Benefit - Method of Payment........... 6
Article 7 Termination of Benefit........................... 6
7.1 Eligibility for Termination...................... 6
7.2 Termination Benefit.............................. 6
7.3 Termination Benefit - Method of Payment.......... 7
Article 8 Disability Waiver and Benefit.................... 7
8.1 Disability Waiver................................ 7
8.2 Disability Benefit............................... 7
Article 9 Beneficiary...................................... 7
9.1 Beneficiary...................................... 7
9.2 Beneficiary Designation; Change; Spousal Consent. 8
9.3 Acknowledgment................................... 8
9.4 No Beneficiary Designation....................... 8
9.5 Doubt as to Beneficiary.......................... 8
9.6 Discharge of Obligations......................... 8
Article 10 Leave of Absence................................. 8
10.1 Paid Leave of Absence............................ 8
10.2 Unpaid Leave of Absence.......................... 8
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Article 11 Company/Participant Liability.................. 8
11.1 General Assets................................. 9
11.2 Company's Liability............................ 9
11.3 Limitation of Obligation....................... 9
11.4 Participant Cooperation........................ 9
11.5 Unsecured General Creditor..................... 9
Article 12 No Guarantee of Employment..................... 9
12.1 No Guarantee of Employment..................... 9
Article 13 Termination, Amendment or Modification
of the Plan.................................... 9
13.1 Termination.................................... 9
13.2 Amendment...................................... 10
13.3 Charge in Control.............................. 10
13.4 Effect of Payment.............................. 10
Article 14 Other Benefits and Agreements.................. 10
14.1 Coordination with Other Benefits............... 11
Article 15 Restrictions on Alienation of Benefits......... 11
15.1 Nonassignability............................... 11
Article 16 Administration of the Plan..................... 11
16.1 Committee Administration....................... 11
16.2 Committee Authority............................ 11
16.3 Committee Indemnity............................ 11
16.4 Company's Obligations to the Committee......... 11
16.5 Agents......................................... 11
Article 17 Claims Procedures.............................. 12
17.1 Presentation of Claim.......................... 12
17.2 Notification of Decision....................... 12
17.3 Review of a Denied Claim....................... 12
17.4 Decision on Review............................. 12
Article 18 Miscellaneous.................................. 13
18.1 Notice......................................... 13
18.2 Successors..................................... 13
18.3 Spouse's Interest.............................. 13
18.4 Guardian....................................... 13
18.5 Governing Law.................................. 13
18.6 Pronouns....................................... 13
18.7 Headings....................................... 13
18.8 Validity....................................... 13
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EXECUTIVE DEFERRAL PLAN
OF
HENRY COMPANY
Purpose
The purpose of this plan is to provide specified benefits to a select group of
highly compensated employees who contribute materially to the continued growth,
development and future business success of Henry Company.
Article 1
Definitions
For purposes hereof, unless otherwise clearly apparent from the context, the
following phrases or terms shall have the following indicated meanings.
1.1 "Account Balance" shall mean the sum of the Primary Account Balance and
Secondary Account Balance, reduced by all distributions made in
accordance with the Plan. This account shall be a bookkeeping entry
only and shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to the Participant pursuant to
this Plan.
1.2 "Annual Bonus" shall mean any compensation, in addition to Base Annual
Salary, paid annually to a Participant as an employee under the
Company's bonus and incentive plans.
1.3 "Annual Deferral Amount" shall mean that portion of a Participant's Base
Annual Salary, and/or Annual Bonus payable in any one year, that a
Participant elects to have and is deferred in accordance with Article 3,
in that one Plan Year.
1.4 "Base Annual Salary" shall mean the annual compensation that is to be
paid to a Participant for each Plan Year for employment services
rendered to the Company, determined as of the first day of the Plan
Year, excluding bonuses, commissions, overtime and nonmonetary awards,
before reduction for compensation deferred pursuant to all nonqualified
deferred compensation plans of the Company.
1.5 "Beneficiary" shall mean the persons, trusts, estates, or other entities
designated in accordance with Article 9, who is entitled to receive
benefits under this Plan upon the death of a Participant.
1.6 "Beneficiary Designation Form" shall mean the form established from time
to time by the Committee that a Participant completes, signs and returns
to the Committee to designate one or more Beneficiaries.
1.7 "Board" shall mean the Board of Directors of the Company.
1.8 "Change in Control" shall have the meaning set forth in Article 13.3.
1.9 "Claimant" shall have the meaning set forth in Article 17.1.
1.10 "Committee" shall mean the administrative committee appointed to manage
and administer the Plan in accordance with the provisions of Article 16.
1.11 "Company" shall mean Henry Company, a California corporation.
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1.12 "Company Contribution" shall mean a contribution which may be made to a
Participant's Account Balance each Plan Year, at the sole discretion of
the Committee.
1.13 "Deferral Amount" shall be the sum of all of a Participant's Annual
Deferral Amounts.
1.14 "Disability" shall mean a period during which a Participant qualifies
for disability benefits under the Company's long-term disability plan.
If a Participant does not participate in such a plan, "Disability" shall
mean a period in which the Participant would have qualified for
disability benefits under such plan, as determined at the sole
discretion of the Committee, had the Participant been in such a plan.
1.15 "Disability Benefit" shall mean the benefit set forth in Article 8.
1.16 "Election Form" shall mean the form established from time to time by the
Committee that a Participant completes, signs and returns to the
Committee each Plan Year to make an election under the Plan.
1.17 "Interest Rate" shall mean, for each Plan Year, an interest rate
determined by the Committee that is equal to the September "Moody's
Seasoned Corporate Bond" rate that is published prior to the end of the
Plan Year that precedes the Plan Year for which the rate is used. The
"Moody's Corporate Bond" rate is an arithmetic average of yields of
representative bonds including industrials, public utilities, Aaa, Aa, A
and Baa bonds, published by Moody's Investors Service, Inc., or any
successor to that service.
1.18 "Participant" shall mean any employee of the Company (i) who is selected
to participate in the Plan, (ii) who elects to participate in the Plan,
(iii) who signs a Plan Agreement, an Election Form and a Beneficiary
Designation Form are returned to an accepted by the Committee and (v)
whose Plan Agreement has not terminated.
1.19 "Permanent Disability" shall be determined by the Committee.
1.20 "Plan" shall mean the Executive Deferral Plan of Henry Company which
shall be evidenced by this instrument and by each Plan Agreement.
1.21 "Plan Agreement" shall mean the form of written agreement, as amended
from time to time, which is entered into by and between the Company and
a Participant. Each Plan Agreement executed by a Participant shall
provide for the entire benefit to which such Participant is entitled to
under the Plan, and the Plan Agreement bearing the latest date of
acceptance by the Committee shall govern such entitlement.
1.22 The "Plan Year" shall, for the first Plan Year, begin on July 1, 1992
and end on December 31, 1992. For each Plan Year thereafter, the Plan
Year shall begin on January 1 and continue through December 31 of the
same year.
1.23 "Preretirement Distribution" shall mean the distribution provided for in
Article 4.
1.24 "Primary Account Balance' shall mean the portion of the Account Balance
attributed to the sum of all Deferral Amounts and interest credited
thereon.
1.25 "Retirement Benefit" shall mean the Retirement Benefit provided for in
Article 5.
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1.26 "Retirement" and "Retires" shall mean severance from employment with the
Company for any reason other than a leave of absence, death, Termination
of Employment, on or after the attainment of (i) age sixty-five (65) and
the completion of seven (7) Years of Service, or (ii) the attainment of
age sixty (60) and the completion of ten (10) Years of Service.
1.27 "Secondary Account Balance" shall mean the portion of the Account
Balance attributed to the sum of all Company Contributions and interest
credited thereon.
1.28 "Survivor's Benefit" shall mean the benefit provided for in Article 6.
1.29 "Termination Benefit" shall mean the benefit provided for in Article 7.
1.30 "Termination of Employment" shall mean the cessation of employment,
voluntarily or involuntarily, and, except as provided in Article 8 and
Article 10, shall exclude cessation as a result of an authorized leave
of absence, Retirement, Disability or death.
1.31 "Unforeseeable Financial Emergency" shall mean an unexpected need for
cash arising from an illness, casualty loss, sudden financial reversal,
or other such unforeseeable occurrence, all as determined in the sole
discretion of the Committee.
1.32 "Years of Service" shall mean the total number of years that a
Participant is an employee including, without limitation, periods of
Disability and leaves of absences prior to Termination of Employment, as
provided under Article 8 and Article 10.
1.33 "Short Term Payout" shall mean the payout set forth in Article 4.5
Article 2
Eligibility
2.1 Selection by Committee. The Committee, in its sole discretion, shall
establish eligibility qualifications for participation in the Plan.
Participation shall be limited to a select group of management and
highly compensated employees of the Company. All selected employees
shall be entitled to participate in the Plan for the Plan Year in which
they are selected, provided they deliver to the Committee and the
Committee accepts, within 30 days of selection, all documents required
by the Committee for acceptance into the Plan. Any elected employee who
does not meet this 30 day time period shall become a Participant in the
Plan commencing with the first day of the plan Year following the
delivery to and acceptance by the Committee of the required documents.
2.2 Enrollment Requirements. As a condition of participation, each
Participant so selected shall complete, sign and return to the Committee
a Plan Agreement, an Election Form and a Beneficiary Designation Form,
and shall comply with all further conditions that may be established by
the Committee.
Article 3
Deferral Commitments/Interest Crediting
3
3.1 Minimum Deferral. A Participant must defer each Plan Year at least
$2,000.00 of his or her Base Annual Salary and/or Annual Bonus. If no
election is made, the amount deferred shall be zero.
3.2 Maximum Deferral. Foe each Plan Year, a Participant may defer up to one
hundred percent (100%) of his or her Base Annual Salary less payroll
taxes expressed as a fixed dollar amount on the Election Form and one
hundred percent (100%) of his or her Annual Bonus less payroll taxes
expressed as a percentage on the Election Form.
3.3 Withholding of Deferral Amounts. The Base Annual Salary elected to be
deferred annually shall be withheld in each payroll period in equal
amounts over the plan Year. The portion of Annual Bonus being deferred
shall be withheld at the time the Annual Bonus would otherwise be paid
to the Participant.
3.4 FICA Taxes. For each Plan Year in which an Annual Deferral Amount is
being withheld, the Company shall ratably withhold form that portion of
the Participant's Base Annual Salary and Annual Bonus that is not being
deferred, the Participant's share of FICA taxes based on an amount equal
to the Base Annual Salary and Annual Bonus before reduction by the
Annual Deferral Amount. If necessary, the Committee shall reduce the
Annual Deferral Amount in order to comply with this Article 3.4
3.5 Interest Crediting Prior to Distribution.
(a) Except as provided in Article 3.5(b) below, prior to any
distribution of benefits, interest shall be credited and
compounded annually on a Participant's Account Balance, at the
Interest Rate for the Plan Year, as though the Annual Deferral
Amount of Salary and Bonus, which would have been payable in that
Plan Year, was withheld at the beginning of the Plan Year or, in
the case of the first year of Plan participation, was withheld on
the date that the Participant commenced participation in the
Plan. The basis for that Plan Year's interest crediting will be
a fraction of the full Plan Year's interest based on the number
of full months that the Participant was employed with the Company
during the Plan Year. If one or more Preretirement Distributions
are made, for purposes of crediting interest, the Account Balance
shall be reduced as of the first day of the month that each
distribution is made.
(b) In the event of a Termination of Employment, interest shall be
credited in the manner provided in Article 3.5(a), but using the
vesting schedule provided for in Article 7.2.
(c) Whenever a distribution is made to a Participant during a Plan
Year, interest will be credited on the amount of the distribution
at the Interest Rate for the Plan Year, for the portion of the
year prior to the distribution. Such amount will be distributed
to the Participant as soon as possible after the end of the Plan
Year.
3.6 Company Contribution. For each Plan Year, the Company may contribute to
each Participant's Account Balance a Company Contribution. For purposes
of interest crediting and compounding prior to any distribution of
benefits, Company Contribution amounts contributed during the Plan Year
will be subject to Article 3.5.
Article 4
Short Term Payout; Unforeseeable Financial Emergencies
Withdrawal Election
4
4.1 Eligibility for Short Term Payout. In connection with each election to
defer an Annual Deferral Amount, a Participant may elect to receive a
future Short Term Payout from the Plan with respect to that Annual
Deferral Amount. This election shall be irrevocable and shall be made
on the election form that is to be delivered to the Committee prior to
the commencement of each Plan Year.
4.2 Amount of Distribution. The amount of the Short Term Payout shall be a
lump sum payment that is equal to:
(a) The Deferred Base Annual Salary and/or Annual Bonus, plus all
interest thereon,
and/or
(b) The Company Contribution, if any, made during the same Plan Year
as the Annual Deferral Amount, plus interest thereon, credited at
the Interest Rate.
The Short Term Payout may not be paid prior to the sixth (6th) Plan Year
following each Annual Deferral Amount.
Short Term Payouts elected to be received prior to completing seven (7)
Years of Service with the Company will be subject to vesting as
described in Article 7, with respect to the Company Contribution and
interest credited thereon. Any unvested amount of the Company
Contribution, plus interest credited thereon, will be distributed to the
Participant as soon as it is vested or will be forfeited to the Company
if the Participant terminates employment before it is vested.
The Short Term Payout shall be paid within 30 days of the January 1 of
the year elected by the Participant on the Election Form.
4.3 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies.
If the Participant experiences an Unforeseeable Financial Emergency, the
Participant any petition the Committee to (i) suspend any deferrals
required to be made by a Participant and/or (ii) receive a partial or
full payout from the Plan. The payout shall not exceed the lesser of
the Participant's Account Balance, calculated as if such Participant
were receiving a Termination Benefit, or the amount reasonably needed to
satisfy the Unforeseeable Financial Emergency. If, subject to the sole
discretion of the Committee, the petition for a suspension and/or payout
is approved, suspension shall take effect upon the date of approval and
any payout shall be made within 30 days of the date of approval.
4.4 Withdrawal Election. A Participant may elect, at any time, to withdraw
all of his or her Account Balance less a 10% withdrawal penalty (the net
amount shall be referred to as the "Withdrawal Amount"). No partial
withdrawals of the Account Balance shall be allowed. The Participant
shall make this election by giving the Committee advance written notice
of the election in a form determined from time to time by the Committee.
The penalty shall be equal to 10% of the Participant's Account Balance
determined immediately prior to the withdrawal. The Participant shall
be paid the Withdrawal Amount within 60 days of his or her election.
Once the Withdrawal Amount is paid, the Participant's participation in
the plan shall terminate and the Participant shall not be eligible to
participate in the Plan in the future. This election is subject to
vesting as described in Article 7, with respect to the Company
Contribution and interest credited thereon. Any unvested amount of the
Company contribution, plus interest credited thereon, will be
5
distributed to the Participant as soon as it is vested or will be
forfeited to the Company if the Participant terminates employment before
it is vested.
4.5 Applicability of Other Sections. If a Participant dies, Retires,
experiences a Termination of Employment or is determined to have a
Permanent Disability as provided under Article 8, the Participant or
Participant's Beneficiary shall not be entitled to a Preretirement
Distribution, but shall instead receive the applicable Retirement
Benefit, Termination Benefit, Survivor's Benefit or Disability Benefit.
Article 5
Retirement Benefit
5.1 Eligibility for Retirement Benefit. A participant who Retires shall
receive as a Retirement Benefit, in accordance with this Article, his
Account Balance.
5.2 Retirement Benefit - Method of Payment. The Retirement Benefit shall be
paid as a lump sum payment. The lump sum payment shall be made within
thirty (30) days of the date the Participant retires.
Article 6
Survivor's Benefit
6.1 Eligibility for Survivor's Benefit. If a Participant dies before
Retirement, Termination of Employment or Permanent Disability pursuant
to Article 8, the Participant's Beneficiary shall receive a Survivor's
Benefit equal to the Participant's Account Balance.
6.2 Survivor's Benefit - Method of Payment. The Survivor's Benefit shall be
paid in a lump sum. The lump sum payment shall be made within thirty
(30) says of the date the Committee receives proof of the Participant's
death, in such form as is acceptable to the Committee.
Article 7
Termination Benefit
7.1 Eligibility for Termination Benefit. If a Participant experiences a
Termination of Employment prior to Retirement, Death, or Permanent
Disability pursuant to Article 8, the Participant shall receive the
Termination Benefit described in this Article 7.
7.2 Termination Benefit. The Termination Benefit shall be equal to (a) the
Participant's entire Primary Account Balance, with interest calculated
in the manner provided in Article 3.5(a) above, plus (b) the
Participant's Secondary Account Balance, with interest calculated in the
manner provided in Article 3.5(a), but using the applicable vested
percentage as set forth in the following schedule:
Percentage of
Number of Completed Secondary Account
Years of Service Balance Available
6
Year 1 0%
Year 2 10%
Year 3 20%
Year 4 40%
Year 5 60%
Year 6 80%
Year 7 100%
Unvested portions of the Secondary Account Balance will be forfeited to
the Company upon Termination of Employment. Unvested portions of the
Secondary Account Balance, upon payment of a Preretirement Distribution,
will remain in the Account Balance to be paid out as the portions become
vested while the Participant continues in employment.
7.3 Termination Benefit. Method of Payment. The Termination Benefit shall
be paid in a lump sum within thirty (30) days following the Termination
of Employment.
Article 8
Disability Waiver and Benefit
8.1 Disability Waiver.
(a) Eligibility. By participating in the Plan, all Participants are
eligible for this waiver.
(b) Waiver of Deferral. A Participant who is determined by the
Committee to be suffering from a Disability shall be excused from
fulfilling that portion of the Annual Deferral Amount, if any,
that would otherwise have been withheld from a Participant's Base
Annual Salary and/or Annual Bonus for the period during which the
Participant suffers a Disability.
(c) Termination of Disability and Return to Employment. If the
Participant returns to employment with the Company during that
Plan Year, the Participant shall be obligated to complete the
remaining portion of the Annual Deferral Amount commitment for
that Plan Year, commencing with the month he or she returns to
work.
8.2 Disability Benefit. A Participant suffering a Disability shall continue
to be considered to be employed and shall be eligible for the benefits
provided for in Articles 4,5, 6, or 7 in accordance with the provisions
of those Articles. Notwithstanding the above, the Committee shall have
the right, in its sole and absolute discretion, to declare a Termination
of Employment, or a Retirement at any time after the Participant is
determined to have a Permanent Disability.
Article 9
Beneficiary
9.1 Beneficiary. Each Participant shall have the right, at any time, to
designate any person or persons as his or her Beneficiary or
Beneficiaries (both primary as well as contingent) to receive any
benefits payable under the Plan to a Beneficiary upon the death of a
Participant.
9.2 Beneficiary Designation; Change; Spousal Consent. A Participant shall
designate his or her Beneficiary or Beneficiaries by completing and
signing the Beneficiary Designation Form, and returning it to the
7
Committee or its designated agent. A participant shall have the right
to change a Beneficiary by completing, signing and otherwise complying
with the terms of the Beneficiary Designation Form and the Committee's
rules and procedures, as in effect from time to time. If the
Participant names someone other than his or her spouse as a Beneficiary,
a spousal consent, in the form designated by the Committee, must be
signed by that Participant's spouse and returned to the Committee. Upon
the acceptance by the Committee of a new Beneficiary Designation Form,
all Beneficiary designations previously filed shall be cancelled. The
Committee shall be entitled to rely on the last Beneficiary Designation
Form filed by the Participant and accepted by the Committee prior to his
or her death.
9.3 Acknowledgment. No designation or change in designation of a
Beneficiary shall be effective until received, accepted and acknowledged
in writing by the Committee.
9.4 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided above, or if all designated Beneficiaries
predecease the Participant or die prior to complete distribution of the
Participant's benefits, then the Participant's designated Beneficiary
shall be deemed to be his or her surviving spouse. If the Participant
has no surviving spouse, the benefits remaining under the Plan to be
paid to a beneficiary shall be to the Participant's estate.
9.5 Doubt as to Beneficiary. If the Committee has any doubt as to the
proper Beneficiary to receive payments pursuant to this Plan, the
Committee shall have the right to withhold such payments until this
matter is resolved to the Committee's satisfaction.
9.6 Discharge of Obligations. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge the Company from all
further obligations under this Plan with respect to the deceased
Participant and all of his or her Beneficiaries.
Article 10
Leave of Absence
10.1 Paid Leave of Absence. If a Participant is authorized by the Company
for any reason to take a paid leave of absence from the employment of
the Company, the Participant shall continue to be considered employed by
the Company and the Annual Deferral Amount shall continue to be withheld
during such paid leave of absence.
10.2 Unpaid Leave of Absence. If a Participant is authorized by the Company
for any reason to take an unpaid leave of absence from the employment of
the Company, the Participant shall continue to be considered employed by
the Company and the Participant shall be excused from making deferrals
until the earlier of the date the leave of absence expires or the
Participant returns to a paid employment status.
Article 11
Company/Participant Liability
11.1 General Assets. Amounts payable to a Participant shall be paid from the
general assets of the Participant's Company exclusively.
11.2 Company's Liability. The Company's liability for the payment of
benefits shall be defined only by this Plan, as entered into between the
Company and a Participant.
11.3 Limitation of Obligation. The Company shall have no obligation to a
8
Participant under the Plan, except as expressly provided for in the
Plan.
11.4 Participant Cooperation. The Participant must cooperate with the
Company and the Committee in furnishing all information requested by the
Company and/or Committee in order to facilitate the payment of benefits,
and the administration and operations of this Plan. Such information
may include taking a physical examination, or other actions, and such
cooperation shall extend beyond the termination of the Plan Agreement
and the Participant's participation in the Plan.
11.5 Unsecured General Creditor. Participants, their Beneficiaries and their
permitted heirs, successors and assigns shall have no legal or equitable
rights, interest or claims in any property or assets of the Company.
Any and all of the Company's assets shall be, and remain, the general,
unpledged unrestricted assets of the Company. The Company's obligations
under the Plan shall be that of an unfunded and unsecured promise to pay
money in the future.
Article 12
No Guarantee of Employment
12.1 No Guarantee of Employment. Nothing in this Agreement shall be
construed as creating a contract of employment or altering in any manner
the employment relationship with a Participant which is hereby
acknowledged to be an "at will" employment relationship that can be
terminated at any time for any reason, with or without cause, unless
otherwise expressly provided in a written employment agreement. All
terms and conditions of a Participant's current employment shall remain
the same. Nothing in this Plan creates, or is meant to create, any
obligation on the part of the Company to keep a Participant employed by
the Company or not to terminate a Participant at any time and for any
reason.
Article 13
Termination, Amendment or Modification of the Plan
13.1 Termination. The Company reserves the right to terminate the Plan at
any time with respect to Participants employed by the Company. Upon the
termination of the Plan, all Plan Agreements shall terminate and a
Participant's Account Balance shall be paid out in accordance with the
benefits that the Participant would have received if the Participant had
experienced a Termination of Employment on the date of Plan termination
or, if Plan termination occurs after the date upon which the Participant
was eligible to Retire, the Participant had Retired on the date of Plan
termination. Prior to a Change in Control, the Company shall have the
right, as its sole discretion and notwithstanding any elections made by
the Participant, to pay such benefits in a lump sum, with interest
credited as provided in Article 3.5. After a Change in Control, the
Company shall be required to pay such benefits in a lump sum. The
termination of the Plan shall not adversely affect any Participant or
Beneficiary who has become entitled to the payment of any benefits under
the Plan as of the date of termination.
13.2 Amendment. The Company may, at any time, amend or modify the Plan in
whole or in part, provided, however, that no amendment or modification
shall be effective to decrease or restrict the present value equivalent,
using the Interest Rate for the Plan Year of the amendment or
modification as the discount rate, of a Participant's Account Balance in
existence at the time the amendment or modification is made, calculated
as if the Participant had experienced a Termination of Employment as of
the effective date of the amendment or modification, or, if the
amendment or modification occurs after the date upon which the
9
Participant was eligible to Retire, the Participant had Retired as of
the effective date of the amendment or modification. The amendment or
modification of the Plan shall not affect any Participant or Beneficiary
who has become entitled to the payment of benefits under the Plan as of
the date of the amendment or modification.
13.3 Change in Control.
(a) Interest Rate. After a Change in Control of the Company, the
applicable interest rate to be used in determining a
Participant's Termination Benefit in connection with a
Termination of Employment under Article 7.1, or a Plan
termination, amendment or modification under Articles 13.1 and
13.2, shall be the Interest Rate. The Interest Rate for the Plan
Year in which the Change in Control occurs shall be used as the
discount rate for determining present value.
(b) Change in Control. A "Change in Control" shall be deemed to
occur if:
(i) any "person" (as that term is used in Section 13 and
14(d)(2) of the Securities Exchange Act of 1934 ("Exchange
Act")) is or becomes the beneficial owner (as that term is
used in Section 13(d) of the Exchange Act), directly or
indirectly, of 25% or more of the Company's capital stock
entitled to vote in the election of directors;
(ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board
cease for any reason to constitute at least a majority
thereof, unless the election or the nomination for
election by the Company's shareholders of each new
director was approved by a vote of at least three-quarters
of the directors still in office who were directors at the
beginning of the period;
(iii) the Company is liquidated or consummates a merger or
consolidation in which it is not the survivor;
(iv) substantially all of the assets of the Company and its
subsidiaries, in the aggregate, are sold or otherwise
transferred to parties that are not within a "controlled
group of corporations" (as defined in the Section 1563 of
the Internal Revenue Code of 1986, as amended), in which
the Company is a member.
13.4 Effect of Payment. The full payment of the applicable benefit under
Articles 5, 6, 7 or 8 of the Plan shall completely discharge all
obligations to a Participant under this Plan and the Participant's Plan
Agreement shall terminate.
Article 14
Other Benefits and Agreements
14.1 Coordination with Other Benefits. The benefits provided for a
Participant and Participant's Beneficiary under the Plan are in addition
to any other benefits available to such Participant under any other plan
or program for employees of the Company. The Plan shall supplement and
shall not supersede, modify or amend any other such plan or program
except as may otherwise be expressly provided.
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Article 15
Restrictions on Alienation of Benefits
15.1 Nonassignability. Neither a Participant nor any other person shall have
any right to commute, sell, assign, transfer, 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. No part of the amounts payable shall, prior to actual
payment, be subject to any claims of creditors and, in particular, they
shall not be subject to attachment, garnishment, seizure or
sequestration by any creditor for the payment of any debts, judgments,
obligations, alimony or separate maintenance owed by a Participant or
any other person nor be transferable by operation of law in the event of
a Participant's or any other person's bankruptcy or insolvency.
Article 16
Administration of the Plan
16.1 Committee Administration. The general administration of this Plan, as
well as construction and interpretation thereof, shall be the
responsibility of the Committee, the number of members of which shall be
designated and appointed from time to time by, and shall serve at the
pleasure of the Board.
16.2 Committee Authority. Subject to the Plan, the Committee shall from time
to time establish rules, forms and procedures for the administration of
the Plan. Except as otherwise expressly provided, the Committee shall
have the discretion and exclusive right to interpret the Plan and to
decide any and all matters arising thereunder. The Committee's
decisions shall be conclusive and binding upon all persons having or
claiming to have any right or interest under the Plan.
16.3 Committee Indemnity. No member of the Committee shall be liable for any
act or omission of any other member of the Committee, nor for any act or
omission on his own part, excepting his or her own willful misconduct.
The Company shall indemnify and save harmless each member of the
Committee against any and all expenses and liabilities arising out of
his or her membership on the Committee, with the exception of expenses
and liabilities arising out of his or her own willful misconduct.
16.4 Company's Obligations to the Committee. To enable the Committee to
perform its functions, the Company shall supply full and timely
information to the Committee on all matters relating to the compensation
of all Participants, their retirement, death, Disability or Termination
of Employment, and such other pertinent facts as the Committee may
require.
16.5 Agents. In the administration of this Plan, the Committee may, from
time to time, employ agents and delegate to them such administrative
duties as it sees fit and may, from time to time, consult with counsel
who may be counsel to the Company.
Article 17
Claims Procedures
17.1 Presentation of Claim. Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below as
a "Claimant") may deliver to the Committee a written claim for a
determination with respect to the amounts (i) credited to (or deducted
from) such Claimant's Participant's Account Balance, or (ii)
distributable to such Claimant from the Plan. If such a claim relates
to the contents of a notice received by the Claimant, the claim must be
made within 60 days after such notice was received by the Claimant. The
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claim must state with particularity the determination desired by the
Claimant.
17.2 Notification of Decision. The Committee shall consider a Claimant's
claim within a reasonable time, and shall notify the Claimant in
writing:
(a) that the Claimant's requested determination has been made, and
that the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in whole or
in part, to the Claimant's requested determination, and such
notice must set forth in a manner calculated to be understood by
the Claimant:
(i) the specific reason(s) for the denial of the claim, or any
part of it;
(ii) specific reference(s) to pertinent provisions of the Plan
upon which such denial was based;
(iii) 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
(iv) an explanation of the claim review procedure set forth in
Article 17.3.
17.3 Review of a Denied Claim. Within sixty (60) days after receiving a
notice from the Committee that a claim has been denied, in whole or in
part, a Claimant (or the Claimant's duly authorized representative) may
file with the Committee a written request for a review of the denial of
the claim. Thereafter, but not later than thirty (30) days after the
review procedure began, the Claimant (or the Claimant's duly authorized
representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole
discretion, may grant.
17.4 Decision on Review. The Committee shall render its decision on review
promptly, and not later than sixty (60) days after the filing of a
written request for review of the denial, unless a hearing is held or
other special circumstances require additional time, in which case the
Committee's decision must be rendered within 120 days after such date.
Such decision must be written in a manner calculated to be understood by
the Claimant, and it must contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon which
the decision was based; and
(c) such other matters as the Committee deems relevant.
Article 18
Miscellaneous
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18.1 Notice. Any notice or filing required or permitted to be given to the
Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail to:
Henry Company
Administrative Committee
Executive Deferral Plan
2911 Slauson Avenue
Huntington Park, California 90255
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 on the
receipt for registration or certification.
18.2 Successors. The Plan shall be binding upon, and inure to the benefit
of, the Company and its respective successors or assigns, and upon a
Participant, the Participant's Beneficiaries and the Participant's
permitted successors, assigns, heirs, executors and administrators.
18.3 Spouse's Interest. The interest in the benefits hereunder of a spouse
of a Participant who has predeceased the Participant shall automatically
pass to the Participant and shall not be transferable by such spouse in
any manner including but not limited to such spouse's will, nor shall
such interest pass under the laws of intestate succession.
18.4 Guardian. If a benefit under this Plan is to be paid to a minor, a
person declared incompetent or to a person incapable of handling the
disposition of that person's property, the Committee may direct payment
of such benefit to the guardian, legal representative or person having
the care and custody of such minor, incompetent or incapable person
appropriate indemnification of the Company and the Committee. The
Committee may require proof of minority, incompetency, incapacity or
guardianship, as it may deem appropriate prior to distribution of the
benefit.
18.5 Governing Law. The Plan and Plan Agreement shall be governed by and
construed under the laws of the State of California, as in effect at the
time of their adoptions and executions, respectively.
18.6 Pronouns. Masculine pronouns wherever used shall include feminine
pronouns and the singular shall include the plural.
18.7 Headings. The headings of the articles, sections and paragraphs of the
Plan are for convenience only and shall not control or affect the
meaning or construction of any of its provisions.
18.8 Validity. In the event any provision of this Plan shall be illegal or
invalid for any reason, the illegality or invalidity of that provision
shall not affect the remaining parts hereof, but this Plan shall be
construed and enforced as if such illegal and invalid provision had
never been inserted herein.
IN WITNESS WHEREOF Henry Company has signed this Plan document this ___
day of ________________, 19__.
"Company"
_________________________________________
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By: _____________________________________
Title: __________________________________
(Officer of the Company)
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