Exhibit 10.16
NN BALL & ROLLER, INC.
ELECTIVE DEFERRED COMPENSATION PLAN
This unfunded Elective Deferred Compensation Plan (hereafter "Plan"),
effective as of February 26, 1999, is hereby adopted and established by NN Ball
& Roller, Inc. (hereafter "Company") and will be maintained by the Company for
the purpose of providing benefits for certain individuals as provided herein.
ARTICLE I
ELIGIBILITY AND PARTICIPATION
SECTION 1.1 All outside members of the Board of Directors of the Company
are eligible to become and remain participants in the Plan.
SECTION 1.2 The individuals described in Section 1.1 shall be eligible to
participate in the Plan and may do so by filing a written election with the
Company in the form attached or other form approved by the Company. In the first
year in which a participant becomes eligible to participate in the Plan, the
newly eligible participant may make an election to defer directors fees for
services to be performed subsequent to the election within 30 days after the
date the person becomes eligible. Except as otherwise provided herein, elections
to defer payment of directors fees must be made before the beginning of the
calendar quarter for which the directors fees are payable.
SECTION 1.3 For each individual electing to participate in the Plan, the
Company shall establish and maintain a deferred compensation account. The amount
of each participant's deferred compensation shall be credited to this account as
of the date such directors fees otherwise would be payable. No amount shall
actually be set aside for payment under the Plan. Any participant to whom an
amount is credited under the Plan shall deemed a general, unsecured creditor of
the Company.
SECTION 1.4 Any participant may defer all or any portion of his or her
directors fees otherwise payable to him or her by the Company for the calendar
quarter beginning after the date of said election as he or she may specify in
said written election to the Company, and the amounts so deferred shall be paid
only as provided in this Plan. Any participant may change the amount or suspend,
future deferrals with respect to directors fees otherwise payable to him or her
for quarters beginning after date of change or suspension as he or she may
specify by written notice to the Company. If a participant elects to suspend
deferrals, the participant may make a new election to again
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become a participant in the Plan. Any new election to defer payment of directors
fees must be made before the beginning of the period of service for which the
directors fees are payable, which period is the calendar quarter. The election
to defer shall be irrevocable as to the deferred compensation for the period for
which the election is made.
ARTICLE II
DEFERRED COMPENSATION
All amounts credited under the terms of the Plan to a deferred compensation
account maintained in the name of a participant by the Company shall be invested
in the same investment options provided under the Company's 401(k) Plan. Such
investment election shall be made on a form approved by the Company.
ARTICLE III
DISTRIBUTION
SECTION 3.1 On the first day of the month next following the date on which
a participant ceases to be a member of the Company's Board of Directors for any
reason including death, distribution of the amount credited to the participant's
account in accordance with this Plan shall commence to or with respect to the
participant in a lump sum.
SECTION 3.2 If a participant should die before distribution has been made
to the participant, the account shall be distributed to the participant's
beneficiary designated by the participant in writing and delivered to the
Company at the time the participant first elected to become a participant in the
Plan. If a participant has not designated a beneficiary, or if no designated
beneficiary is living on the date of distribution, then, notwithstanding any
provision herein to the contrary, such amounts shall be distributed to such
participant's estate in a lump sum distribution as soon as administratively
feasible following such participant's death.
Section 3.3 In the event a participant incurs an unforeseeable emergency,
the participant may make a written request to the Company for a hardship
withdrawal from his or her account established under the Plan. An unforeseeable
emergency is a severe financial hardship to the participant resulting from a
sudden and unexpected illness or accident of the participant or of a dependent
(as defined in Section 152(a) of the Internal Revenue Code of 1986, as amended)
of the participant, loss of participant's property due to casualty, or other
similar
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extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the participant. Withdrawals of amounts because of an
unforeseeable emergency are only permitted to the extent reasonably needed to
satisfy the emergency need. This section shall be interpreted in a manner
consistent with Sections 1.457-2(h)(4) and 1.457-2(h)(5) of the Treasury
Regulations.
SECTION 3.4 Anything herein to the contrary notwithstanding, if, at any
time, a court or the Internal Revenue Service determines that an amount in a
participant's account is includable in the gross income of the participant and
subject to tax, the Board of Directors of the Company may, in its sole
discretion, permit a lump sum distribution of an amount equal to the amount
determined to be includable in the participant's gross income.
ARTICLE IV
AMENDMENT AND TERMINATION OF PLAN
The Company reserves the right to amend or terminate the Plan at any time.
Any such termination shall be effective as of the end of the calendar year
during which notification is given to each participant. Notification will be by
first class mail, addressed to each participant at the participant's last known
address, or by other notice acknowledged in writing by the participant. Any
amounts credited to an account of any participant shall remain subject to the
provisions of the Plan and distribution will not be accelerated because of the
termination of the Plan. No amendment or termination shall directly or
indirectly reduce the balance of any account described in this Plan as of the
effective date of such amendment or termination. No additional credits or
contributions will be made to the accounts of the participants under the Plan
after termination of the Plan, but interest may continue to be credited to the
accounts of the participants under the Plan until all benefits are distributed
to the participants or to their beneficiaries. Upon termination of the Plan,
distribution of amounts credited to the accounts of the participants shall be
made to the participants or their beneficiaries in accordance with Article III
of this Plan.
ARTICLE V
CLAIMS PROCEDURE
Section 5.1 For purposes of handling claims with respect to this Plan, the
"Claims Reviewer" shall be the Company, unless another person or organizational
unit is designated by the
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Company as Claims Reviewer.
SECTION 5.2 An initial claim for benefits under the Plan must be made by
the participant or his or her beneficiary in accordance with the terms of the
Plan through which the benefits are provided. Not later than 90 days after
receipt of such a claim, the Claims Reviewer will render a written decision on
the claim to the claimant, unless special circumstances require the extension of
such 90-day period. If such extension is necessary, the Claims Reviewer shall
provide the participant or the participant's beneficiary with written
notification of such extension before the expiration of the initial 90-day
period. Such notice shall specify the reason or reasons for such extension and
the date by which a final decision can be expected. In no event shall such
extension exceed a period of 90 days from the end of the initial 90-day period.
In the event the Claims Reviewer denies the claim of a participant or the
beneficiary in whole or in part, the Claims Reviewer's written notification
shall specify, in a manner calculated to be understood by the claimant, (a) the
reason for the denial; (b) a reference to the Plan or other document or form
that is the basis for the denial; (c) a description of any additional material
or information necessary for the claimant to perfect the claim; (d) an
explanation as to why such information or material is necessary; and (e) an
explanation of the applicable claims procedure. Should the claim be denied in
whole or in part and should the claimant be dissatisfied with the Claims
Reviewer's disposition of the claimant's claim, the claimant may have a full and
fair review of the claim by the Company upon written request therefor submitted
by the claimant or the claimant's duly authorized representative and received by
the Company within 60 days after the claimant receives written notification that
the claimant's claim has been denied. In connection with such review, the
claimant or the claimant's duly authorized representative shall be entitled to
review pertinent documents and submit the claimant's views as to the issues, in
writing. The Company shall act to deny or accept the claim within 60 days after
receipt of the claimant's written request for review unless special
circumstances require the extension of such 60-day period. If such extension is
necessary, the Company shall provide the claimant with written notification of
such extension before the expiration of such initial 60-day period. In all
events, the Company shall act to deny or accept the claim within 120 days of the
receipt of the claimant's written request for review. The action of the Company
shall be in the form of a written notice to the claimant and its contents shall
include all of the requirements for action on the original claim. In no event
may a claimant commence legal action for benefits the claimant believes are due
the claimant until the claimant has exhausted all of the remedies and procedures
afforded the claimant by this Article V.
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ARTICLE VI
ADMINISTRATION
Section 6.1 The right of a participant or the participant's beneficiary to
receive a distribution hereunder shall be an unsecured claim against the general
assets of the Company, and neither a participant nor his or her designated
beneficiary shall have any rights in or against any amount credited to any
accounts under this Plan or any other assets of the Company. The Plan at all
times shall be considered entirely unfunded both for tax purposes and for
purposes of Title I of the Employee Retirement Income Security Act of 1974, as
amended. Any funds invested hereunder shall continue for all purposes to be part
of the general assets of the Company and available to its general creditors in
the event of bankruptcy or insolvency. Accounts under this Plan and any benefits
which may be payable pursuant to this Plan are not subject in any manner to
anticipation, sale, alienation, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors of a participant or a participant's
beneficiary. The Plan constitutes a mere promise by the Company to make benefit
payments in the future. No interest or right to receive a benefit may be taken,
either voluntarily or involuntarily, for the satisfaction of the debts of, or
other obligations or claims against, such person or entity, including claims for
alimony, support, separate maintenance and claims in bankruptcy proceedings.
Section 6.2 The Plan shall be administered by the Board of Directors of the
Company, which shall have the authority, duty and power to interpret and
construe the provisions of the Plan as the Board deems appropriate including the
authority to determine eligibility for benefits under the Plan. The Board shall
have the duty and responsibility of maintaining records, making the requisite
calculations and disbursing the payments hereunder. The interpretations,
determinations, regulations and calculations of the Board shall be final and
binding on all persons and parties concerned.
Section 6.3 Expenses of administration shall be paid by the Company. The
Board of Directors of the Company shall be entitled to rely on all tables,
valuations, certificates, opinions, data and reports furnished by any actuary,
accountant, controller, counsel or other person employed or retained by the
Company with respect to the Plan.
Section 6.4 The Company shall furnish individual annual statements of
accrued benefits to each participant, or current beneficiary, in such form as
determined by the Company or as required by law.
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SECTION 6.5 The sole rights of a participant or beneficiary under this Plan
shall be to have this Plan administered according to its provisions, to receive
whatever benefits he or she may be entitled to hereunder, and nothing in the
Plan shall be interpreted as a guaranty that any funds in any trust which may be
established in connection with the Plan or assets of the Company will be
sufficient to pay any benefit hereunder. Further, the adoption and maintenance
of this Plan shall not be construed as creating any contract of employment
between the Company and any participant.
SECTION 6.6 The Company may from time to time establish rules and
procedures which it determines to be necessary for the proper administration of
the Plan and the benefits payable to an individual in the event that individual
is declared incompetent and a conservator or other person legally charged with
that individual's care is appointed. Except as otherwise provided herein, when
the Company determines that such individual is unable to manage his or her
financial affairs, the Company may pay such individual's benefits to such
conservator, person legally charged with such individual's care, or institution
then contributing toward or providing for the care and maintenance of such
individual. Any such payment shall constitute a complete discharge of any
liability of the Company and the Plan for such individual.
SECTION 6.7 The Plan may be continued after a sale of assets of the
Company, or a merger or consolidation of the Company into or with another
corporation or entity only if and to the extent that the transferee, purchaser
or successor entity agrees to continue the Plan. In the event that the Plan is
not continued by the transferee, purchaser or successor entity, then the Plan
shall be terminated subject to the provisions of Article IV.
Section 6.8 Each participant shall keep the Company informed of his or her
current address and the current address off his or her designated beneficiary.
The Company shall not be obligated to search for any person. If such person is
not located within three years after the date on which payment of the
participant's benefits payable under this Plan may first be made, payment may be
made as though the participant or his or her beneficiary had died at the end of
such three-year period.
Section 6.9 Notwithstanding any provision herein to the contrary, neither
the Company nor any individual acting as an employee or agent of the Company
shall be liable to any participant, former participant, designated beneficiary,
or any other person for any claim, loss, liability or expense incurred in
connection with the Plan, unless attributable to fraud or willful misconduct on
the part of the Company or any such
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employee or agent of the Company.
SECTION 6.10 All questions pertaining to the construction, validity and
effect of the Plan shall be determined in accordance with the laws of the United
States and to the extent not preempted by such laws, by the laws of the State of
Tennessee.
IN WITNESS WHEREOF, NN BALL & ROLLER, INC., by its duly authorized officer,
has executed this Plan on this 26th day of February 1999.
NN BALL & ROLLER, INC.
By: /s/ William C. Kelly, Jr.
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Its: Secretary/Treasurer