Exhibit 10.24
Conseco
Deferred Compensation Plan
Master Plan Document
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Effective January 1, 2007
Copyright (C) 2006
By Clark Consulting, Inc.
All Rights Reserved
Conseco
Deferred Compensation Plan
Master Plan Document
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TABLE OF CONTENTS
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ARTICLE 1 Definitions....................................................................................1
ARTICLE 2 Selection, Enrollment, Eligibility.............................................................5
2.1 Selection by Committee.........................................................................5
2.2 Enrollment and Eligibility Requirements; Commencement of Participation.........................6
ARTICLE 3 Deferral Commitments/Company Contribution Amounts/Supplemental
Contribution Amounts /Vesting/Crediting/Taxes..................................................6
3.1 Minimum Deferrals..............................................................................6
3.2 Maximum Deferral...............................................................................7
3.3 Election to Defer; Effect of Election Form.....................................................7
3.4 Withholding and Crediting of Annual Deferral Amounts...........................................8
3.5 Company Contribution Amount....................................................................9
3.6 Supplemental Contribution Amount...............................................................9
3.7 Crediting of Amounts after Benefit Distribution................................................9
3.8 Vesting.......................................................................................10
3.9 Crediting/Debiting of Account Balances........................................................11
3.10 FICA and Other Taxes..........................................................................12
ARTICLE 4 Scheduled Distribution; Unforeseeable Emergencies.............................................13
4.1 Scheduled Distribution........................................................................13
4.2 Postponing Scheduled Distributions............................................................13
4.3 Other Benefits Take Precedence Over Scheduled Distributions...................................14
4.4 Unforeseeable Emergencies.....................................................................14
ARTICLE 5 Change In Control Benefit.....................................................................15
5.1 Change in Control Benefit.....................................................................15
5.2 Payment of Change in Control Benefit..........................................................15
ARTICLE 6 Retirement Benefit............................................................................15
6.1 Retirement Benefit............................................................................15
6.2 Payment of Retirement Benefit.................................................................15
ARTICLE 7 Termination Benefit...........................................................................16
7.1 Termination Benefit...........................................................................16
7.2 Payment of Termination Benefit................................................................16
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ARTICLE 8 Disability Benefit............................................................................16
8.1 Disability Benefit............................................................................16
8.2 Payment of Disability Benefit.................................................................16
ARTICLE 9 Death Benefit.................................................................................16
9.1 Death Benefit.................................................................................16
9.2 Payment of Death Benefit......................................................................17
ARTICLE 10 Beneficiary Designation.......................................................................17
10.1 Beneficiary...................................................................................17
10.2 Beneficiary Designation; Change; Spousal Consent..............................................17
10.3 Acknowledgement...............................................................................17
10.4 No Beneficiary Designation....................................................................17
10.5 Doubt as to Beneficiary.......................................................................17
10.6 Discharge of Obligations......................................................................17
ARTICLE 11 Leave of Absence..............................................................................18
11.1 Paid Leave of Absence.........................................................................18
11.2 Unpaid Leave of Absence.......................................................................18
11.3 Leaves Resulting in Separation from Service...................................................18
ARTICLE 12 Termination of Plan, Amendment or Modification................................................18
12.1 Termination of Plan...........................................................................18
12.2 Amendment.....................................................................................19
12.3 Plan Agreement................................................................................19
12.4 Effect of Payment.............................................................................19
ARTICLE 13 Administration................................................................................19
13.1 Committee Duties..............................................................................19
13.2 Administration Upon Change In Control.........................................................20
13.3 Agents........................................................................................20
13.4 Binding Effect of Decisions...................................................................20
13.5 Indemnity of Committee........................................................................20
13.6 Employer Information..........................................................................20
ARTICLE 14 Other Benefits and Agreements.................................................................20
14.1 Coordination with Other Benefits..............................................................20
ARTICLE 15 Claims Procedures.............................................................................21
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Master Plan Document
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15.1 Presentation of Claim.........................................................................21
15.2 Notification of Decision......................................................................21
15.3 Review of a Denied Claim......................................................................21
15.4 Decision on Review............................................................................22
15.5 Legal Action..................................................................................22
ARTICLE 16 Trust.........................................................................................22
16.1 Establishment of the Trust....................................................................22
16.2 Interrelationship of the Plan and the Trust...................................................22
16.3 Distributions From the Trust..................................................................23
ARTICLE 17 Miscellaneous.................................................................................23
17.1 Status of Plan................................................................................23
17.2 Unsecured General Creditor....................................................................23
17.3 Employer's Liability..........................................................................23
17.4 Nonassignability..............................................................................23
17.5 Not a Contract of Employment..................................................................23
17.6 Furnishing Information........................................................................23
17.7 Terms.........................................................................................24
17.8 Captions......................................................................................24
17.9 Governing Law.................................................................................24
17.10 Notice........................................................................................24
17.11 Successors....................................................................................24
17.12 Spouse's Interest.............................................................................24
17.13 Validity......................................................................................24
17.14 Incompetent...................................................................................24
17.15 Court Order...................................................................................25
17.16 Distribution in the Event of Income Inclusion Under 409A......................................25
17.17 Deduction Limitation on Benefit Payments......................................................25
17.18 Insurance.....................................................................................25
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Deferred Compensation Plan
Master Plan Document
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CONSECO
DEFERRED COMPENSATION PLAN
Effective January 1, 2007
Purpose
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The purpose of this Plan is to provide specified benefits to a select
group of management or highly compensated Employees who contribute materially to
the continued growth, development and future business success of Conseco
Services, LLC, an Indiana limited liability company, and its subsidiaries, if
any, that sponsor this Plan. This Plan shall be unfunded for tax purposes and
for purposes of Title I of ERISA.
ARTICLE 1
Definitions
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For the purposes of this Plan, unless otherwise clearly apparent from
the context, the following phrases or terms shall have the following indicated
meanings:
1.1 "Account Balance" shall mean, with respect to a Participant, an entry
on the records of the Employer equal to the sum of the Participant's
Annual Accounts. The Account Balance 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 a Participant, or his or
her designated Beneficiary, pursuant to this Plan.
1.2 "Annual Account" shall mean, with respect to a Participant, an entry
on the records of the Employer equal to the following amount: (i) the
sum of the Participant's Annual Deferral Amount, Company Contribution
Amount and Supplemental Contribution Amount for any one Plan Year,
plus (ii) amounts credited or debited to such Annual Account pursuant
to this Plan, less (iii) all distributions made to the Participant or
his or her Beneficiary pursuant to this Plan that relate to the Annual
Account for such Plan Year. The Annual 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 a
Participant, or his or her designated Beneficiary, pursuant to this
Plan.
1.3 "Annual Deferral Amount" shall mean that portion of a Participant's
Base Salary, Bonus, Commissions and LTIP Amounts that a Participant
defers in accordance with Article 3 for any one Plan Year, without
regard to whether such amounts are withheld and credited during such
Plan Year. In the event of a Participant's Retirement, Disability,
death or Termination of Employment prior to the end of a Plan Year,
such year's Annual Deferral Amount shall be the actual amount withheld
prior to such event.
1.4 "Annual Installment Method" shall mean, for an Annual Account being
paid, annual installment payments over the number of years selected by
the Participant in accordance with this Plan, calculated as follows:
(i) for the first annual installment, the vested portion of the Annual
Account being paid shall be calculated as of the close of business on
or as soon as practicable following the Participant's Benefit
Distribution Date, and (ii) for remaining annual installments, the
vested portion of that Annual Account shall be calculated on every
anniversary of such
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Deferred Compensation Plan
Master Plan Document
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calculation date, as applicable. Each annual installment shall be
calculated by multiplying the unpaid vested balance by a fraction, the
numerator of which is one and the denominator of which is the
remaining number of annual payments due to the Participant. By way of
example, if the Participant elects a ten (10) year Annual Installment
Method as the form of Retirement Benefit for an Annual Account, the
first payment shall be 1/10 of the vested balance of such Annual
Account, calculated as described in this definition. The following
year, the payment shall be 1/9 of the vested balance of such Annual
Account, calculated as described in this definition.
1.5 "Base Salary" shall mean the annual cash compensation relating to
services performed during any calendar year, excluding distributions
from nonqualified deferred compensation plans, bonuses, commissions,
overtime, fringe benefits, stock options, relocation expenses,
incentive payments, non-monetary awards, director fees and other fees,
and automobile and other allowances paid by an Employer to a
Participant for employment services rendered (whether or not such
allowances are included in the Employee's gross income). Base Salary
shall be calculated before reduction for compensation voluntarily
deferred or contributed by the Participant pursuant to all qualified
or nonqualified plans of the Employer and shall be calculated to
include amounts not otherwise included in the Participant's gross
income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant
to plans established by the Employer; provided, however, that all such
amounts will be included in compensation only to the extent that had
there been no such plan, the amount would have been payable in cash to
the Employee.
1.6 "Beneficiary" shall mean one or more persons, trusts, estates or other
entities, designated in accordance with Article 10, that are entitled
to receive benefits under this Plan upon the death of a Participant.
1.7 "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.
1.8 "Benefit Distribution Date" shall mean a date that triggers
distribution of a Participant's vested benefits. The Benefit
Distribution Date for a Participant shall be the occurrence of any of
the following:
(a) If the Participant Retires, the Benefit Distribution Date for
his or her vested Account Balance shall be the last day of the
six-month period immediately following the date on which the
Participant Retires; provided, however, in the event the
Participant changes the Retirement Benefit election for one or
more Annual Accounts in accordance with Section 6.2(b), the
Benefit Distribution Date for such Annual Account(s) shall be
postponed in accordance with such section 6.2(b); or
(b) If the Participant experiences a Termination of Employment,
the Benefit Distribution Date for his or her vested Account
Balance shall be the last day of the six-month period
immediately following the date on which the Participant
experiences a Termination of Employment; or
(c) If the Participant dies prior to the complete distribution of
his or her vested Account Balance, the Participant's Benefit
Distribution Date shall be the date on which the Committee is
provided with proof that is satisfactory to the Committee of
the Participant's death; or
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(d) If the Participant becomes Disabled, the Participant's Benefit
Distribution Date shall be the date on which the Participant
becomes Disabled; or
(e) If (i) a Change in Control occurs prior to the Participant's
Termination of Employment, Retirement, death or Disability,
and (ii) the Participant has elected to receive a Change in
Control Benefit, as set forth in Section 5.1 below, the
Participant's Benefit Distribution Date shall be the date on
which the Company experiences a Change in Control, as
determined by the Committee in its sole discretion.
No distribution may be made or commenced prior to a Benefit
Distribution Date.
1.9 "Board" shall mean the board of directors of the Company.
1.10 "Bonus" shall mean any compensation, in addition to Base Salary,
Commissions and LTIP Amounts, earned by a Participant for services
rendered during a Plan Year, under an Employer's annual bonus, cash
incentive plan or other arrangement designated by the Committee, as
further specified on an Election Form.
1.11 "Change in Control" shall mean any "change in control event" as
defined in accordance with Code Section 409A and related Treasury
guidance and Regulations.
1.12 "Change in Control Benefit" shall have the meaning set forth in
Article 5.
1.13 "Claimant" shall have the meaning set forth in Section 15.1.
1.14 "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
1.15 "Commissions" shall mean the cash commissions earned by a Participant
from an Employer for services rendered during a Plan Year, excluding
Bonus, LTIP Amounts or other additional incentives or awards earned by
the Participant.
1.16 "Committee" shall mean the committee described in Article 13.
1.17 "Company" shall mean Conseco Services, LLC, an Indiana limited
liability company, and any successor to all or substantially all of
the Company's assets or business.
1.18 "Company Contribution Amount" shall mean, for any one Plan Year, the
amount determined in accordance with Section 3.5.
1.19 "Death Benefit" shall mean the benefit set forth in Article 9.
1.20 "Disability" or "Disabled" shall mean that a Participant is (i) unable
to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or (ii) by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a
continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than 3 months under an
accident or health plan covering employees of the Participant's
Employer. For purposes of this Plan, a Participant shall be deemed
Disabled if determined to be totally disabled by the Social Security
Administration, or if determined to be disabled in accordance with the
applicable disability insurance program of such Participant's
Employer, provided that the definition of "disability" applied under
such disability insurance program complies with the requirements in
the preceding sentence.
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1.21 "Disability Benefit" shall mean the benefit set forth in Article 8.
1.22 "Election Form" shall mean the form, which may be in electronic
format, established from time to time by the Committee that a
Participant completes, signs and returns to the Committee to make an
election under the Plan.
1.23 "Employee" shall mean a person who is an employee of an Employer.
1.24 "Employer(s)" shall mean the Company and/or any of its subsidiaries
(now in existence or hereafter formed or acquired) that have been
selected by the Board to participate in the Plan and have adopted the
Plan as a sponsor.
1.25 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
1.26 "401(k) Plan" shall mean, with respect to an Employer, a plan
qualified under Code Section 401(a) that contains a cash or deferral
arrangement described in Code Section 401(k), adopted by the Employer,
as it may be amended from time to time, or any successor thereto.
1.27 "LTIP Amounts" shall mean any portion of the cash compensation
attributable to a Plan Year that is earned by a Participant as an
Employee under an Employer's long-term incentive plan or arrangement
designated by the Committee.
1.28 "Participant" shall mean any Employee (i) who is selected to
participate in the Plan and (ii) who has not been removed from
participation by the Committee.
1.29 "Plan" shall mean the Conseco Deferred Compensation Plan, which shall
be evidenced by this instrument and by each Plan Agreement, as they
may be amended from time to time.
1.30 "Plan Agreement" shall mean a written agreement, as may be amended
from time to time, which is entered into by and between an Employer
and a Participant. Each Plan Agreement executed by a Participant and
the Participant's Employer shall provide for the entire benefit to
which such Participant is entitled under the Plan; should there be
more than one Plan Agreement, the Plan Agreement bearing the latest
date of acceptance by the Employer shall supersede all previous Plan
Agreements in their entirety and shall govern such entitlement. The
terms of any Plan Agreement may be different for any Participant, and
any Plan Agreement may provide additional benefits not set forth in
the Plan or limit the benefits otherwise provided under the Plan;
provided, however, that any such additional benefits or benefit
limitations must be agreed to by both the Employer and the
Participant. In the event no Plan Agreement is entered into by a
Participant, the Plan shall serve as the Plan Agreement for that
Participant.
1.31 "Plan Year" shall mean a period beginning on January 1 of each
calendar year and continuing through December 31 of such calendar
year.
1.32 "Retirement", "Retire(s)" or "Retired" shall mean the separation from
service with all Employers for any reason other than death or
Disability, as determined in accordance with Code Section 409A and
related Treasury guidance and Regulations, on or after the earlier of
the attainment of (a) age sixty-five (65) or (b) age fifty-five (55)
with ten (10) Years of Service.
1.33 "Retirement Benefit" shall mean the benefit set forth in Article 6.
1.34 "Scheduled Distribution" shall mean the distribution set forth in
Section 4.1.
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1.35 "Supplemental Contribution Amount" shall mean, for any one Plan Year,
the amount determined in accordance with Section 3.6.
1.36 "Terminate the Plan", "Termination of the Plan" shall mean a
determination by an Employer's board of directors, or similar
governing body, that (i) all of its Participants shall no longer be
eligible to participate in the Plan, (ii) no new deferral elections
for such Participants shall be permitted, and (iii) such Participants
shall no longer be eligible to receive company contributions under
this Plan.
1.37 "Termination Benefit" shall mean the benefit set forth in Article 7.
1.38 "Termination of Employment" shall mean the separation from service
with all Employers, voluntarily or involuntarily, for any reason other
than Retirement, Disability or death, as determined in accordance with
Code Section 409A and related Treasury guidance and Regulations.
1.39 "Trust" shall mean one or more trusts established by the Company in
accordance with Article 16.
1.40 "Unforeseeable Emergency" shall mean a severe financial hardship of
the Participant or his or her Beneficiary resulting from (i) an
illness or accident of the Participant or Beneficiary, the
Participant's or Beneficiary's spouse, or the Participant's or
Beneficiary's dependent (as defined in Code Section 152(a)), (ii) a
loss of the Participant's or Beneficiary's property due to casualty,
or (iii) such other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant or the Participant's Beneficiary, all as determined in the
sole discretion of the Committee.
1.41 "Years of Plan Participation" shall mean the total number of full Plan
Years a Participant has been a Participant in the Plan prior to his or
her Termination of Employment (determined without regard to whether
deferral elections have been made by the Participant for any Plan
Year). Any partial year shall not be counted. Notwithstanding the
previous sentence, a Participant's first Plan Year of participation
and the First Plan Year of the Plan itself shall be treated as a full
Plan Year for purposes of this definition, even if it is only a
partial Plan Year of participation.
1.42 "Years of Service" shall mean the total number of full years in which
a Participant has been employed by one or more Employers. For purposes
of this definition, a year of employment shall be a 365 day period (or
366 day period in the case of a leap year) that, for the first year of
employment, commences on the Employee's date of hiring and that, for
any subsequent year, commences on an anniversary of that hiring date.
The Committee shall make a determination as to whether any partial
year of employment shall be counted as a Year of Service.
ARTICLE 2
Selection, Enrollment, Eligibility
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2.1 Selection by Committee. Participation in the Plan shall be limited to
a select group of management or highly compensated Employees, as
determined by the Committee in its sole discretion. From that group,
the Committee shall select, in its sole discretion, those individuals
who may actually participate in this Plan. A Participant may be
removed as an active Participant by the Committee in its sole
discretion as of any date, so that the Participant will not be
entitled to make deferrals or receive benefit accruals under the Plan
on or after that date.
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2.2 Enrollment and Eligibility Requirements; Commencement of
Participation.
(a) The Committee shall establish from time to time such
enrollment requirements as it determines, in its sole
discretion, are necessary.
(b) A selected Employee who becomes eligible to participate in
this Plan must complete, execute and return to the Committee a
Plan Agreement, an Election Form, and a Beneficiary
Designation Form within thirty (30) days after he or she first
becomes eligible to participate in the Plan, or within such
other deadline as may be established by the Committee, in its
sole discretion, in order to participate. A Participant shall
not be permitted to defer under this Plan any portion of his
or her Base Salary, Bonus, LTIP Amounts and/or Commissions
that are paid with respect to services performed prior to his
or her participation commencement date, except to the extent
permissible under Code Section 409A and related Treasury
guidance or Regulations.
(c) Each selected Employee who is eligible to participate in the
Plan shall commence participation in the Plan on the date that
the Committee determines, in its sole discretion, that the
Employee has met all enrollment requirements required by the
Committee, including returning all required documents to the
Committee within the specified time period. Notwithstanding
the foregoing, the Committee shall process such Participant's
deferral election as soon as administratively practicable
after such deferral election is submitted to and accepted by
the Committee if such election is timely made under Article 3.
ARTICLE 3
Deferral Commitments/Company Contribution Amounts/
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Supplemental Contribution Amounts / Vesting/Crediting/Taxes
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3.1 Minimum Deferrals.
(a) Annual Deferral Amount. For each Plan Year, a Participant may
elect to defer, as his or her Annual Deferral Amount, Base
Salary, Bonus, Commissions and/or LTIP Amounts in the
following minimum amounts for each deferral elected:
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Deferral Minimum Amount
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Base Salary, Bonus, Commissions $3,000 aggregate
and/or LTIP Amounts
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If the Committee determines, in its sole discretion, prior to
the beginning of a Plan Year that a Participant has made an
election for less than the stated minimum amounts, or if no
election is made, the amount deferred shall be zero. If the
Committee determines, in its sole discretion, at any time
after the beginning of a Plan Year that a Participant has
deferred less than the stated minimum amounts for that Plan
Year, any amount credited to the Participant's applicable
Annual Account as the Annual Deferral Amount for that Plan
Year shall be distributed to the Participant within sixty (60)
days after that Plan Year.
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(b) Short Plan Year. Notwithstanding the foregoing, if a
Participant first becomes a Participant after the first day of
a Plan Year, the minimum Annual Deferral Amount shall be an
amount equal to the minimum set forth above, multiplied by a
fraction, the numerator of which is the number of complete
months remaining in the Plan Year and the denominator of which
is 12.
3.2 Maximum Deferral.
(a) Annual Deferral Amount. For each Plan Year, a Participant may
elect to defer, as his or her Annual Deferral Amount, Base
Salary, Bonus, Commissions and/or LTIP Amounts up to the
following maximum percentages for each deferral elected:
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Deferral Maximum Percentage
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Base Salary 75%
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Bonus 100%
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Commissions 100%
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LTIP Amounts 100%
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(b) Short Plan Year. Notwithstanding the foregoing, if a
Participant first becomes a Participant after the first day of
a Plan Year, the maximum Annual Deferral Amount shall be
limited to the amount of compensation not yet earned by the
Participant as of the date the Participant submits an Election
Form to the Committee for acceptance, except to the extent
permissible under Code Section 409A and related Treasury
guidance or Regulations. For compensation that is earned based
upon a specified performance period, the Participant's
deferral election will apply to the portion of such
compensation that is equal to (i) the total amount of
compensation for the performance period, multiplied by (ii) a
fraction, the numerator of which is the number of days
remaining in the service period after the Participant's
deferral election is made, and the denominator of which is the
total number of days in the performance period.
3.3 Election to Defer; Effect of Election Form.
(a) First Plan Year. In connection with a Participant's
commencement of participation in the Plan, the Participant
shall make an irrevocable deferral election for the Plan Year
in which the Participant commences participation in the Plan,
along with such other elections as the Committee deems
necessary or desirable under the Plan on an Election Form. For
these elections to be valid, the Election Form must be
completed and signed by the Participant, delivered to the
Committee within thirty (30) days of the Participant's
participation commencement date and accepted by the Committee.
If the Participant is or has been a Participant in a deferred
compensation plan required to be aggregated with this Plan
under Code Section 409A, the election must be filed in
accordance with Sections 3.3(b), (c) or (d) below.
(b) Subsequent Plan Years. For each succeeding Plan Year, a
Participant may elect to defer Base Salary, Bonus, Commissions
and LTIP Amounts, and make such other elections as the
Committee deems necessary or desirable under the Plan by
timely delivering a new
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Election Form to the Committee, in accordance with its rules
and procedures, by the December 31st preceding the Plan Year
in which the services giving rise to such compensation are
performed, or before such other deadline established by the
Committee in accordance with the requirements of Code Section
409A and related Treasury guidance or Regulations.
Any deferral election(s) made in accordance with this Section
3.3(b) shall be irrevocable; provided, however, that if the
Committee requires Participants to make a deferral election
for "performance-based compensation" by the deadline(s)
described above, it may, in its sole discretion, and in
accordance with Code Section 409A and related Treasury
guidance or Regulations, permit a Participant to subsequently
change his or her deferral election for such compensation by
submitting an Election Form to the Committee no later than the
deadline established by the Committee pursuant to Section
3.3(c) below.
(c) Performance-Based Compensation. Notwithstanding the foregoing,
the Committee may, in its sole discretion, determine that an
irrevocable deferral election pertaining to "performance-based
compensation" based on services performed over a period of at
least twelve (12) months may be made by timely delivering an
Election Form to the Committee, in accordance with its rules
and procedures, no later than six (6) months before the end of
the performance service period. "Performance-based
compensation" shall be compensation, the payment or amount of
which is contingent on pre-established organizational or
individual performance criteria, which satisfies the
requirements of Code Section 409A and related Treasury
guidance or Regulations. In order to be eligible to make a
deferral election for "performance-based compensation," a
Participant must perform services continuously from a date no
later than the date upon which the performance criteria for
such compensation are established through the date upon which
the Participant makes a deferral election for such
compensation. In no event shall an election to defer
"performance-based compensation" be permitted after such
compensation has become both substantially certain to be paid
and readily ascertainable.
(d) Compensation Subject to Risk of Forfeiture. With respect to
compensation (i) to which a Participant has a legally binding
right to payment in a subsequent year, and (ii) that is
subject to a forfeiture condition requiring the Participant's
continued services for a period of at least twelve (12) months
from the date the Participant obtains the legally binding
right, the Committee may, in its sole discretion, determine
that an irrevocable deferral election for such compensation
may be made by timely delivering an Election Form to the
Committee in accordance with its rules and procedures, no
later than the 30th day after the Participant obtains the
legally binding right to the compensation, provided that the
election is made at least twelve (12) months in advance of the
earliest date at which the forfeiture condition could lapse.
3.4 Withholding and Crediting of Annual Deferral Amounts. For each Plan
Year, the Base Salary portion of the Annual Deferral Amount shall be
withheld from each regularly scheduled Base Salary payroll in equal
amounts, as adjusted from time to time for increases and decreases in
Base Salary. The Bonus, Commissions and/or LTIP Amounts portion of the
Annual Deferral Amount shall be withheld at the time the Bonus,
Commissions or LTIP Amounts are or otherwise would be paid to the
Participant, whether or not this occurs during the Plan Year itself.
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Annual Deferral Amounts shall be credited to the Participant's Annual
Account for such Plan Year at the time such amounts would otherwise
have been paid to the Participant. For example, the deferred portion
of a Bonus attributable to Plan Year One that would have been paid in
Plan Year Two will be credited to the Annual Account for Plan Year
One, but will not be credited to the account until Plan Year Two.
3.5 Company Contribution Amount.
(a) For each Plan Year, an Employer may be required to credit
amounts to a Participant's Annual Account in accordance with
employment or other agreements entered into between the
Participant and the Employer, which amounts shall be part of
the Participant's Company Contribution Amount for that Plan
Year. Such amounts shall be credited to the Participant's
Annual Account for the applicable Plan Year on the date or
dates prescribed by such agreements.
(b) For each Plan Year, an Employer, in its sole discretion, may,
but is not required to, credit any amount it desires to any
Participant's Annual Account under this Plan, which amount
shall be part of the Participant's Company Contribution Amount
for that Plan Year. The amount so credited to a Participant
may be smaller or larger than the amount credited to any other
Participant, and the amount credited to any Participant for a
Plan Year may be zero, even though one or more other
Participants receive a Company Contribution Amount for that
Plan Year. The Company Contribution Amount described in this
Section 3.5(b), if any, shall be credited to the Participant's
Annual Account for the applicable Plan Year on a date or dates
to be determined by the Committee, in its sole discretion.
3.6 Supplemental Contribution Amount. For each Plan Year, an Employer, in
its sole discretion, may, but is not required to, credit any amount it
desires to a Participant's Annual Account under this Plan, which
amount shall be the Participant's Supplemental Contribution Amount for
that Plan Year. The amount so credited to a Participant may be smaller
or larger than the amount credited to any other Participant, and the
amount credited to any Participant for a Plan Year may be zero, even
though one or more other Participants receive a Supplemental
Contribution Amount for that Plan Year. Furthermore, in no event shall
the crediting of a Supplemental Contribution Amount to a Participant
in any Plan Year be interpreted to mean that such Participant shall
receive a Supplemental Contribution Amount in any other Plan Year. The
Supplemental Contribution Amount described in this Section 3.6, if
any, shall be credited to the Participant's Annual Account for the
applicable Plan Year on a date or dates to be determined by the
Committee, in its sole discretion.
3.7 Crediting of Amounts after Benefit Distribution. Notwithstanding any
provision in this Plan to the contrary, should the complete
distribution of a Participant's vested Account Balance occur prior to
the date on which any portion of (i) the Annual Deferral Amount that a
Participant has elected to defer in accordance with Section 3.3, (ii)
the Company Contribution Amount, or (iii) the Supplemental
Contribution Amount, would otherwise be credited to the Participant's
Account Balance, such amounts shall not be credited to the
Participant's Account Balance, but shall be paid to the Participant in
accordance with the applicable payment terms for the underlying
compensation, as determined by the Committee, in its sole discretion.
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3.8 Vesting.
(a) A Participant shall at all times be 100% vested in the portion
of his or her Account Balance attributable to deferrals of
Base Salary, Bonus, Commissions and LTIP Amounts, plus amounts
credited or debited on such amounts (pursuant to Section 3.9).
(b) A Participant shall be vested in the portion of his or her
Account Balance attributable to any Company Contribution
Amounts, plus amounts credited or debited on such amounts
(pursuant to Section 3.9), in accordance with the vesting
schedule(s) set forth in the employment agreement in effect
between the Participant and his or her Employer at the time of
the Participant's Benefit Distribution Date. If not addressed
in such employment agreement, a Participant shall vest in the
portion of his or her Account Balance attributable to any
Company Contribution Amounts, plus amounts credited or debited
on such amounts (pursuant to Section 3.9), in accordance with
the vesting schedule declared by the Committee, in its sole
discretion.
(c) A Participant shall be vested in the portion of his or her
Account Balance attributable to any Supplemental Contribution
Amounts, plus amounts credited or debited on such amounts
(pursuant to Section 3.9), in accordance with the vesting
schedule(s) set forth the employment agreement in effect
between the Participant and his or her Employer at the time of
the Participant's Benefit Distribution Date. If not addressed
in such employment agreement, a Participant shall vest in the
portion of his or her Account Balance attributable to any
Supplemental Contribution Amounts, plus amounts credited or
debited on such amounts (pursuant to Section 3.9), on the
basis of the Participant's Years of Plan Participation, in
accordance with the following schedule:
------------------------------------------------------- --------------------------------------------
Years of Plan Participation Vested Percentage
------------------------------------------------------- --------------------------------------------
------------------------------------------------------- --------------------------------------------
Less than 5 years 0%
------------------------------------------------------- --------------------------------------------
------------------------------------------------------- --------------------------------------------
5 years or more 100%
------------------------------------------------------- --------------------------------------------
(d) Notwithstanding anything to the contrary contained in this
Section 3.8, in the event of a Change in Control, or upon a
Participant's Retirement, death while employed by an Employer,
or Disability, any amounts that are not vested in accordance
with Sections 3.8(b) or 3.8(c) above, shall immediately become
100% vested (if not already vested in accordance with the
above vesting schedules).
(e) Notwithstanding subsection 3.8(d) above, the vesting schedules
described in Sections 3.8(b) and 3.8(c) shall not be
accelerated upon a Change in Control to the extent that the
Committee determines that such acceleration would cause the
deduction limitations of Section 280G of the Code to become
effective. In the event of such a determination, the
Participant may request independent verification of the
Committee's calculations with respect to the application of
Section 280G. In such case, the Committee must provide to the
Participant within ninety (90) days of such a request an
opinion from a nationally recognized accounting firm selected
by the Participant (the "Accounting Firm"). The opinion shall
state the Accounting Firm's opinion that any limitation in the
vested
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percentage hereunder is necessary to avoid the limits of
Section 280G and contain supporting calculations. The cost of
such opinion shall be paid for by the Company.
(f) Section 3.8(e) shall not prevent the acceleration of the
vesting schedules described in Sections 3.8(b) and 3.8(c) if
such Participant is entitled to a "gross-up" payment, to
eliminate the effect of the Code section 4999 excise tax,
pursuant to his or her employment agreement or other agreement
entered into between such Participant and the Employer.
3.9 Crediting/Debiting of Account Balances. In accordance with, and
subject to, the rules and procedures that are established from time to
time by the Committee, in its sole discretion, amounts shall be
credited or debited to a Participant's Account Balance in accordance
with the following rules:
(a) Measurement Funds. The Participant may elect one or more of
the measurement funds selected by the Committee, in its sole
discretion, which are based on certain mutual funds (the
"Measurement Funds"), for the purpose of crediting or debiting
additional amounts to his or her Account Balance. As
necessary, the Committee may, in its sole discretion,
discontinue, substitute or add a Measurement Fund. Each such
action will take effect as of the first day of the first
calendar quarter that begins at least thirty (30) days after
the day on which the Committee gives Participants advance
written notice of such change.
(b) Election of Measurement Funds. A Participant, in connection
with his or her initial deferral election in accordance with
Section 3.3(a) above, shall elect, on the Election Form, one
or more Measurement Fund(s) (as described in Section 3.9(a)
above) to be used to determine the amounts to be credited or
debited to his or her Account Balance. If a Participant does
not elect any of the Measurement Funds as described in the
previous sentence, the Participant's Account Balance shall
automatically be allocated into the lowest-risk Measurement
Fund, as determined by the Committee, in its sole discretion.
The Participant may (but is not required to) elect, by
submitting an Election Form to the Committee that is accepted
by the Committee, to add or delete one or more Measurement
Fund(s) to be used to determine the amounts to be credited or
debited to his or her Account Balance, or to change the
portion of his or her Account Balance allocated to each
previously or newly elected Measurement Fund. If an election
is made in accordance with the previous sentence, it shall
apply as of the first business day deemed reasonably
practicable by the Committee, in its sole discretion, and
shall continue thereafter for each subsequent day in which the
Participant participates in the Plan, unless changed in
accordance with the previous sentence. Notwithstanding the
foregoing, the Committee, in its sole discretion, may impose
limitations on the frequency with which one or more of the
Measurement Funds elected in accordance with this Section
3.9(b) may be added or deleted by such Participant;
furthermore, the Committee, in its sole discretion, may impose
limitations on the frequency with which the Participant may
change the portion of his or her Account Balance allocated to
each previously or newly elected Measurement Fund.
(c) Proportionate Allocation. In making any election described in
Section 3.9(b) above, the Participant shall specify on the
Election Form, in increments of one percent (1%), the
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percentage of his or her Account Balance or Measurement Fund,
as applicable, to be allocated/reallocated.
(d) Crediting or Debiting Method. The performance of each
Measurement Fund (either positive or negative) will be
determined on a daily basis based on the manner in which such
Participant's Account Balance has been hypothetically
allocated among the Measurement Funds by the Participant.
(e) No Actual Investment. Notwithstanding any other provision of
this Plan that may be interpreted to the contrary, the
Measurement Funds are to be used for measurement purposes
only, and a Participant's election of any such Measurement
Fund, the allocation of his or her Account Balance thereto,
the calculation of additional amounts and the crediting or
debiting of such amounts to a Participant's Account Balance
shall not be considered or construed in any manner as an
actual investment of his or her Account Balance in any such
Measurement Fund. In the event that the Company or the Trustee
(as that term is defined in the Trust), in its own discretion,
decides to invest funds in any or all of the investments on
which the Measurement Funds are based, no Participant shall
have any rights in or to such investments themselves. Without
limiting the foregoing, a Participant's Account Balance shall
at all times be a bookkeeping entry only and shall not
represent any investment made on his or her behalf by the
Company or the Trust; the Participant shall at all times
remain an unsecured creditor of the Company.
3.10 FICA and Other Taxes.
(a) Annual Deferral Amounts. For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the
Participant's Employer(s) shall withhold from that portion of
the Participant's Base Salary, Bonus, Commissions and/or LTIP
Amounts that is not being deferred, in a manner determined by
the Employer(s), the Participant's share of FICA and other
employment taxes on such Annual Deferral Amount. If necessary,
the Committee may reduce the Annual Deferral Amount in order
to comply with this Section 3.10.
(b) Company Contribution Amounts and Supplemental Contribution
Amounts. When a Participant becomes vested in a portion of his
or her Account Balance attributable to any Company
Contribution Amounts and/or Supplemental Contribution Amounts,
the Participant's Employer(s) shall withhold from that portion
of the Participant's Base Salary, Bonus, Commissions and/or
LTIP Amounts that is not deferred, in a manner determined by
the Employer(s), the Participant's share of FICA and other
employment taxes on such amounts. If necessary, the Committee
may reduce the vested portion of the Participant's Company
Contribution Amount or Supplemental Contribution Amount, as
applicable, in order to comply with this Section 3.10.
(c) Distributions. The Participant's Employer(s), or the trustee
of the Trust, shall withhold from any payments made to a
Participant under this Plan all federal, state and local
income, employment and other taxes required to be withheld by
the Employer(s), or the trustee of the Trust, in connection
with such payments, in amounts and in a manner to be
determined in the sole discretion of the Employer(s) and the
trustee of the Trust.
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ARTICLE 4
Scheduled Distribution; Unforeseeable Emergencies
-------------------------------------------------
4.1 Scheduled Distribution. In connection with each election to defer an
Annual Deferral Amount, a Participant may irrevocably elect to receive
a Scheduled Distribution, in the form of a lump sum payment, from the
Plan with respect to all or a portion of the Annual Deferral Amount.
The Scheduled Distribution shall be a lump sum payment in an amount
that is equal to the portion of the Annual Deferral Amount the
Participant elected to have distributed as a Scheduled Distribution,
plus amounts credited or debited in the manner provided in Section 3.9
above on that amount, calculated as of the close of business on or as
soon as reasonably practicable following the date on which the
Scheduled Distribution becomes payable. Subject to the other terms and
conditions of this Plan, each Scheduled Distribution elected shall be
paid out during a sixty (60) day period commencing immediately after
the first day of the Plan Year designated by the Participant (the
"Scheduled Distribution Date"). The Plan Year designated by the
Participant must be at least three (3) Plan Years after the end of the
Plan Year to which the Participant's deferral election described in
Section 3.3 relates, unless otherwise provided on an Election Form
approved by the Committee in its sole discretion. By way of example,
if a Scheduled Distribution is elected for Annual Deferral Amounts
that are earned in the Plan Year commencing January 1, 2007, the
earliest Scheduled Distribution Date that may be designated by a
Participant would be January 1, 2011, and the Scheduled Distribution
would become payable during the sixty (60) day period commencing
immediately after such Scheduled Distribution Date.
4.2 Postponing Scheduled Distributions. A Participant may elect to
postpone a Scheduled Distribution described in Section 4.1 above, and
have such amount paid out during a sixty (60) day period commencing
immediately after an allowable alternative distribution date
designated by the Participant in accordance with this Section 4.2. In
order to make this election, the Participant must submit a new
Scheduled Distribution Election Form to the Committee in accordance
with the following criteria:
(a) Such Scheduled Distribution Election Form must be submitted to
and accepted by the Committee in its sole discretion at least
twelve (12) months prior to the Participant's previously
designated Scheduled Distribution Date;
(b) The new Scheduled Distribution Date selected by the
Participant must be the first day of a Plan Year, and must be
at least five years after the previously designated Scheduled
Distribution Date; and
(c) The election of the new Scheduled Distribution Date shall have
no effect until at least twelve (12) months after the date on
which the election is made.
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4.3 Other Benefits Take Precedence Over Scheduled Distributions. Should a
Benefit Distribution Date occur that triggers a benefit under Articles
5, 6, 7, 8 or 9, any Annual Deferral Amount that is subject to a
Scheduled Distribution election under Section 4.1 shall not be paid in
accordance with Section 4.1, but shall be paid in accordance with the
other applicable Article. Notwithstanding the foregoing, the Committee
shall interpret this Section 4.3 in a manner that is consistent with
Code Section 409A and related Treasury guidance and Regulations.
4.4 Unforeseeable Emergencies.
(a) If the Participant experiences an Unforeseeable Emergency, the
Participant may petition the Committee to receive a partial or
full payout from the Plan, subject to the provisions set forth
below.
(b) The payout, if any, from the Plan shall not exceed the lesser
of (i) the Participant's vested Account Balance, calculated as
of the close of business on or around the date on which the
amount becomes payable, as determined by the Committee in its
sole discretion, or (ii) the amount necessary to satisfy the
Unforeseeable Emergency, plus amounts necessary to pay
Federal, state, or local income taxes or penalties reasonably
anticipated as a result of the distribution. Notwithstanding
the foregoing, a Participant may not receive a payout from the
Plan to the extent that the Unforeseeable Emergency is or may
be relieved (A) through reimbursement or compensation by
insurance or otherwise, (B) by liquidation of the
Participant's assets, to the extent the liquidation of such
assets would not itself cause severe financial hardship, or
(C) by cessation of deferrals under this Plan.
(c) If the Committee, in its sole discretion, approves a
Participant's petition for payout from the Plan, the
Participant shall receive a payout from the Plan within sixty
(60) days of the date of such approval, and the Participant's
deferrals under the Plan shall be terminated as of the date of
such approval.
(d) In addition, a Participant's deferral elections under this
Plan shall be terminated to the extent the Committee
determines, in its sole discretion, that termination of such
Participant's deferral elections is required pursuant to
Treas. Reg. ss.1.401(k)-1(d)(3) for the Participant to obtain
a hardship distribution from an Employer's 401(k) Plan. If the
Committee determines, in its sole discretion, that a
termination of the Participant's deferrals is required in
accordance with the preceding sentence, the Participant's
deferrals shall be terminated as soon as administratively
practicable following the date on which such determination is
made.
(e) Notwithstanding the foregoing, the Committee shall interpret
all provisions relating to payout and/or termination of
deferrals under this Section 4.4 in a manner that is
consistent with Code Section 409A and related Treasury
guidance and Regulations.
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ARTICLE 5
Change in Control Benefit
-------------------------
5.1 Change in Control Benefit. A Participant, in connection with his or
her commencement of participation in the Plan, shall irrevocably elect
on an Election Form whether to (i) receive a Change in Control Benefit
upon the occurrence of a Change in Control, which shall be equal to
the Participant's vested Account Balance, calculated as of the close
of business on or as soon as reasonably practicable following the
Participant's Benefit Distribution Date, or (ii) to have his or her
Account Balance remain in the Plan upon the occurrence of a Change in
Control and to have his or her Account Balance remain subject to the
terms and conditions of the Plan. If a Participant does not make any
election with respect to the payment of the Change in Control Benefit,
then such Participant's Account Balance shall remain in the Plan upon
a Change in Control and shall be subject to the terms and conditions
of the Plan.
5.2 Payment of Change in Control Benefit. The Change in Control Benefit,
if any, shall be paid to the Participant in a lump sum no later than
sixty (60) days after the Participant's Benefit Distribution Date.
Notwithstanding the foregoing, the Committee shall interpret all
provisions in this Plan relating to a Change in Control Benefit in a
manner that is consistent with Code Section 409A and related Treasury
guidance and Regulations.
ARTICLE 6
Retirement Benefit
------------------
6.1 Retirement Benefit. A Participant who Retires shall receive, as a
Retirement Benefit, his or her vested Account Balance, calculated as
of the close of business on or as soon as reasonably practicable
following the Participant's Benefit Distribution Date.
6.2 Payment of Retirement Benefit.
(a) The Participant shall elect the form in which his or her
Annual Accounts will be paid by filing an Election Form with
the Committee. The Participant may elect to receive each
Annual Account in the form of a lump sum or pursuant to an
Annual Installment Method of up to ten (10) years. If a
Participant does not make any election with respect to the
payment of an Annual Account by the required deferral election
date for deferrals credited to that Annual Account, then the
Participant shall be deemed to have elected to receive such
Annual Account as a lump sum.
(b) A Participant may change the form of payment for an Annual
Account by submitting an Election Form to the Committee in
accordance with the following criteria:
(i) The election to modify the form of payment for such
Annual Account shall have no effect until at least
twelve (12) months after the date on which the
election is made; and
(ii) The first payment related to such Annual Account shall
be delayed at least five (5) years from the originally
scheduled Benefit Distribution Date for such Annual
Account, as described in Section 1.8(a).
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For purposes of applying the requirements above, the right to
receive an Annual Account in installment payments shall be
treated as the entitlement to a single payment. The Committee
shall interpret all provisions relating to an election
described in this Section 6.2 in a manner that is consistent
with Code Section 409A and related Treasury guidance or
Regulations.
The Election Form most recently accepted by the Committee that
has become effective shall govern the payout of the applicable
Annual Account.
(c) The lump sum payment shall be made, or installment payments
shall commence, no later than sixty (60) days after the
Benefit Distribution Date. Except as provided below, remaining
installments, if any, shall continue in accordance with the
Participant's election for each Annual Account and shall be
paid no later than sixty (60) days after each anniversary of
the Benefit Distribution Date.
(d) If the Participant dies prior to the payment of all of the
installments payable under this Article 6, no further
installment payments shall be made. Instead, the remaining
vested Account Balance shall be paid in a lump sum as provided
in Article 9.
ARTICLE 7
Termination Benefit
-------------------
7.1 Termination Benefit. A Participant who experiences a Termination of
Employment shall receive, as a Termination Benefit, his or her vested
Account Balance, calculated as of the close of business on or as soon
as reasonably practicable following the Participant's Benefit
Distribution Date.
7.2 Payment of Termination Benefit. The Termination Benefit shall be paid
to the Participant in a lump sum payment no later than sixty (60) days
after the Participant's Benefit Distribution Date.
ARTICLE 8
Disability Benefit
------------------
8.1 Disability Benefit. Upon a Participant's Disability, the Participant
shall receive a Disability Benefit, which shall be equal to the
Participant's vested Account Balance, calculated as of the close of
business on or as soon as reasonably practicable following the
Participant's Benefit Distribution Date.
8.2 Payment of Disability Benefit. The Disability Benefit shall be paid to
the Participant in a lump sum payment no later than sixty (60) days
after the Participant's Benefit Distribution Date.
ARTICLE 9
Death Benefit
-------------
9.1 Death Benefit. The Participant's Beneficiary(ies) shall receive a
Death Benefit upon the Participant's death, which will be equal to the
Participant's vested Account Balance, calculated as
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of the close of business on or as soon as reasonably practicable
following the Participant's Benefit Distribution Date, as determined
in accordance with Section 1.8(c).
9.2 Payment of Death Benefit. The Death Benefit shall be paid to the
Participant's Beneficiary(ies) in a lump sum payment no later than
sixty (60) days after the Participant's Benefit Distribution Date.
ARTICLE 10
Beneficiary Designation
-----------------------
10.1 Beneficiary. Each Participant shall have the right, at any time, to
designate his or her Beneficiary(ies) (both primary as well as
contingent) to receive any benefits payable under the Plan to a
beneficiary upon the death of a Participant. The Beneficiary
designated under this Plan may be the same as or different from the
Beneficiary designation under any other plan of an Employer in which
the Participant participates.
10.2 Beneficiary Designation; Change; Spousal Consent. A Participant shall
designate his or her Beneficiary by completing and signing the
Beneficiary Designation Form, and returning it to the 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, the
Committee may, in its sole discretion, determine that spousal consent
is required to be provided in a form designated by the Committee,
executed by such 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 canceled.
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.
10.3 Acknowledgment. No designation or change in designation of a
Beneficiary shall be effective until received and acknowledged in
writing by the Committee or its designated agent.
10.4 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided in Sections 10.1, 10.2 and 10.3 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
payable to the executor or personal representative of the
Participant's estate.
10.5 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, exercisable in its discretion, to
cause the Participant's Employer to withhold such payments until this
matter is resolved to the Committee's satisfaction.
10.6 Discharge of Obligations. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to
the Participant, and that Participant's Plan Agreement shall terminate
upon such full payment of benefits.
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ARTICLE 11
Leave of Absence
----------------
11.1 Paid Leave of Absence. If a Participant is authorized by the
Participant's Employer to take a paid leave of absence from the
employment of the Employer, and such leave of absence does not
constitute a separation from service, as determined by the Committee
in accordance with Code Section 409A and related Treasury guidance and
Regulations, (i) the Participant shall continue to be considered
eligible for the benefits provided in Articles 4, 5, 6, 7, 8 or 9 in
accordance with the provisions of those Articles, and (ii) the Annual
Deferral Amount shall continue to be withheld during such paid leave
of absence in accordance with Section 3.3.
11.2 Unpaid Leave of Absence. If a Participant is authorized by the
Participant's Employer to take an unpaid leave of absence from the
employment of the Employer for any reason, and such leave of absence
does not constitute a separation from service, as determined by the
Committee in accordance with Code Section 409A and related Treasury
guidance and Regulations, such Participant shall continue to be
eligible for the benefits provided in Articles 4, 5, 6, 7, 8 or 9 in
accordance with the provisions of those Articles. However, the
Participant shall be excused from fulfilling his or her Annual
Deferral Amount commitment that would otherwise have been withheld
during the remainder of the Plan Year in which the unpaid leave of
absence is taken. During the unpaid leave of absence, the Participant
shall not be allowed to make any additional deferral elections.
However, if the Participant returns to employment, the Participant may
elect to defer an Annual Deferral Amount for the Plan Year following
his or her return to employment and for every Plan Year thereafter
while a Participant in the Plan, provided such deferral elections are
otherwise allowed and an Election Form is delivered to and accepted by
the Committee for each such election in accordance with Section 3.3
above.
11.3 Leaves Resulting in Separation from Service. In the event that a
Participant's leave of absence from his or her Employer constitutes a
separation from service, as determined by the Committee in accordance
with Code Section 409A and related Treasury guidance and Regulations,
the Participant's vested Account Balance shall be distributed to the
Participant in accordance with Article 6 or 7 of this Plan, as
applicable.
ARTICLE 12
Termination of Plan, Amendment or Modification
----------------------------------------------
12.1 Termination of Plan. Although each Employer anticipates that it will
continue the Plan for an indefinite period of time, there is no
guarantee that any Employer will continue the Plan or will not
terminate the Plan at any time in the future. Accordingly, each
Employer reserves the right to Terminate the Plan. In the event of a
Termination of the Plan, the Measurement Funds available to
Participants following the Termination of the Plan shall be comparable
in number and type to those Measurement Funds available to
Participants in the Plan Year preceding the Plan Year in which the
Termination of the Plan is effective. Following a Termination of the
Plan, Participant Account Balances shall remain in the Plan until the
Participant becomes eligible for the benefits provided in Articles 4,
5, 6, 7, 8 or 9 in accordance with the provisions of those Articles.
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.
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Notwithstanding the foregoing, to the extent permissible under Code
Section 409A and related Treasury guidance or Regulations, during the
thirty (30) days preceding or within twelve (12) months following a
Change in Control, an Employer shall be permitted to (i) terminate the
Plan by action of its board of directors, and (ii) distribute the
vested Account Balances to Participants in a lump sum no later than
twelve (12) months after the Change in Control, provided that all
other substantially similar arrangements sponsored by such Employer
are also terminated and all balances in such arrangements are
distributed within twelve (12) months of the termination of such
arrangements.
12.2 Amendment.
(a) Any Employer may, at any time, amend or modify the Plan in
whole or in part with respect to that Employer.
Notwithstanding the foregoing, (i) no amendment or
modification shall be effective to decrease the value of a
Participant's vested Account Balance in existence at the time
the amendment or modification is made, and (ii) no amendment
or modification of this Section 12.2 or Section 13.2 of the
Plan shall be effective.
(b) Notwithstanding any provision of the Plan to the contrary, in
the event that the Company determines that any provision of
the Plan may cause amounts deferred under the Plan to become
immediately taxable to any Participant under Code Section 409A
and related Treasury guidance or Regulations, the Company may
(i) adopt such amendments to the Plan and appropriate policies
and procedures, including amendments and policies with
retroactive effect, that the Company determines necessary or
appropriate to preserve the intended tax treatment of the Plan
benefits provided by the Plan and/or (ii) take such other
actions as the Company determines necessary or appropriate to
comply with the requirements of Code Section 409A and related
Treasury guidance or Regulations.
12.3 Plan Agreement. Despite the provisions of Sections 12.1 and 12.2
above, if a Participant's Plan Agreement contains benefits or
limitations that are not in this Plan document, the Employer may only
amend or terminate such provisions with the written consent of the
Participant.
12.4 Effect of Payment. The full payment of the Participant's vested
Account Balance under Articles 4, 5, 6, 7, 8 or 9 of the Plan shall
completely discharge all obligations to a Participant and his or her
designated Beneficiaries under this Plan, and the Participant's Plan
Agreement shall terminate.
ARTICLE 13
Administration
--------------
13.1 Committee Duties. Except as otherwise provided in this Article 13,
this Plan shall be administered by a Committee, which shall consist of
the members of the Human Resources and Compensation Committee of the
Board, or such other committee as the Board shall appoint. Members of
the Committee may be Participants under this Plan. The Committee shall
also have the discretion and authority to (i) make, amend, interpret,
and enforce all appropriate rules and regulations for the
administration of this Plan, and (ii) decide or resolve any and all
questions, including benefit entitlement determinations and
interpretations of this Plan, as may arise in connection with the
Plan. Consequently, any individual serving on the Committee who is a
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Participant shall not vote or act on any matter relating solely to
himself or herself. When making a determination or calculation, the
Committee shall be entitled to rely on information furnished by a
Participant or the Company.
13.2 Administration Upon Change In Control. Within one hundred and twenty
(120) days following a Change in Control, the individuals who
comprised the Committee immediately prior to the Change in Control
(whether or not such individuals are members of the Committee
following the Change in Control) may, by written consent of the
majority of such individuals, appoint an independent third party
administrator (the "Administrator") to perform any or all of the
Committee's duties described in Section 13.1 above, including without
limitation, the power to determine any questions arising in connection
with the administration or interpretation of the Plan, and the power
to make benefit entitlement determinations. Upon and after the
effective date of such appointment, (i) the Company must pay all
reasonable administrative expenses and fees of the Administrator, and
(ii) the Administrator may only be terminated with the written consent
of the majority of Participants with an Account Balance in the Plan as
of the date of such proposed termination.
13.3 Agents. In the administration of this Plan, the Committee or the
Administrator, as applicable, may, from time to time, employ agents and
delegate to them such administrative duties as it sees fit (including
acting through a duly appointed representative) and may from time to
time consult with counsel.
13.4 Binding Effect of Decisions. The decision or action of the Committee
or Administrator, as applicable, with respect to any question arising
out of or in connection with the administration, interpretation and
application of the Plan and the rules and regulations promulgated
hereunder shall be final and conclusive and binding upon all persons
having any interest in the Plan.
13.5 Indemnity of Committee. All Employers shall indemnify and hold
harmless the members of the Committee, any Employee to whom the duties
of the Committee may be delegated, and the Administrator against any
and all claims, losses, damages, expenses or liabilities arising from
any action or failure to act with respect to this Plan, except in the
case of willful misconduct by the Committee, any of its members, any
such Employee or the Administrator.
13.6 Employer Information. To enable the Committee and/or Administrator to
perform its functions, the Company and each Employer shall supply full
and timely information to the Committee and/or Administrator, as the
case may be, on all matters relating to the Plan, the Trust, the
Participants and their Beneficiaries, the Account Balances of the
Participants, the compensation of its Participants, the date and
circumstances of the Retirement, Disability, death or Termination of
Employment of its Participants, and such other pertinent information
as the Committee or Administrator may reasonably require.
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 Participant's Employer. The
Plan shall
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supplement and shall not supersede, modify or amend any other such
plan or program except as may otherwise be expressly provided.
ARTICLE 15
Claims Procedures
-----------------
15.1 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 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 sixty
(60) days after such notice was received by the Claimant. All other
claims must be made within 180 days of the date on which the event
that caused the claim to arise occurred. The claim must state with
particularity the determination desired by the Claimant.
15.2 Notification of Decision. The Committee shall consider a Claimant's
claim within a reasonable time, but no later than ninety (90) days
after receiving the claim. If the Committee determines that special
circumstances require an extension of time for processing the claim,
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 the initial period. The extension notice shall indicate the
special circumstances requiring an extension of time and the date by
which the Committee expects to render the benefit determination. The
Committee 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;
(iv) an explanation of the claim review procedure set forth
in Section 15.3 below; and
(v) a statement of the Claimant's right to bring a civil
action under ERISA Section 502(a) following an adverse
benefit determination on review.
15.3 Review of a Denied Claim. On or before 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. The Claimant (or the Claimant's duly authorized
representative):
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(a) may, upon request and free of charge, have reasonable access
to, and copies of, all documents, records and other
information relevant (as defined in applicable ERISA
regulations) to the claim for benefits;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole
discretion, may grant.
15.4 Decision on Review. The Committee shall render its decision on review
promptly, and no later than sixty (60) days after the Committee
receives the Claimant's written request for a review of the denial of
the claim. If the Committee determines that special circumstances
require an extension of time for processing the claim, written notice
of the extension shall be furnished to the Claimant prior to the
termination of the initial sixty (60) day period. In no event shall
such extension exceed a period of sixty (60) days from the end of the
initial period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date by which the
Committee expects to render the benefit determination. In rendering
its decision, the Committee shall take into account all comments,
documents, records and other information submitted by the Claimant
relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination. The
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;
(c) a statement that the Claimant is entitled to receive, upon
request and free of charge, reasonable access to and copies
of, all documents, records and other information relevant (as
defined in applicable ERISA regulations) to the Claimant's
claim for benefits; and
(d) a statement of the Claimant's right to bring a civil action
under ERISA Section 502(a).
15.5 Legal Action. A Claimant's compliance with the foregoing provisions of
this Article 15 is a mandatory prerequisite to a Claimant's right to
commence any legal action with respect to any claim for benefits under
this Plan.
ARTICLE 16
Trust
-----
16.1 Establishment of the Trust. In order to provide assets from which to
fulfill its obligations to the Participants and their beneficiaries
under the Plan, the Company may establish a so-called "rabbi" trust by
a trust agreement with a third party, the trustee, to which each
Employer may, in its discretion, contribute cash or other property,
including securities issued by the Company, to provide for the benefit
payments under the Plan, (the "Trust").
16.2 Interrelationship of the Plan and the Trust. The provisions of the
Plan and the Plan Agreement shall govern the rights of a Participant
to receive distributions pursuant to the Plan. The provisions of the
Trust shall govern the rights of the Employers, Participants and the
creditors of the Employers to the assets transferred to the Trust.
Each Employer shall at all times remain liable to carry out its
obligations under the Plan.
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16.3 Distributions From the Trust. Each Employer's obligations under the
Plan may be satisfied with Trust assets distributed pursuant to the
terms of the Trust, and any such distribution shall reduce the
Employer's obligations under this Plan.
ARTICLE 17
Miscellaneous
-------------
17.1 Status of Plan. The Plan is intended to be a plan that is not
qualified within the meaning of Code Section 401(a) and that "is
unfunded and is maintained by an employer primarily for the purpose of
providing deferred compensation for a select group of management or
highly compensated employees" within the meaning of ERISA Sections
201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and
interpreted (i) to the extent possible in a manner consistent with the
intent described in the preceding sentence, and (ii) in accordance
with Code Section 409A and related Treasury guidance and Regulations.
17.2 Unsecured General Creditor. Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights,
interests or claims in any property or assets of an Employer. For
purposes of the payment of benefits under this Plan, any and all of an
Employer's assets shall be, and remain, the general, unpledged
unrestricted assets of the Employer. An Employer's obligation under
the Plan shall be merely that of an unfunded and unsecured promise to
pay money in the future.
17.3 Employer's Liability. An Employer's liability for the payment of
benefits shall be defined only by the Plan and the Plan Agreement, as
entered into between the Employer and a Participant. An Employer shall
have no obligation to a Participant under the Plan except as expressly
provided in the Plan and his or her Plan Agreement.
17.4 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, alienate or
convey in advance of actual receipt, the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are
expressly declared to be, unassignable and non-transferable. No part
of the amounts payable shall, prior to actual payment, be subject to
seizure, attachment, garnishment or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed by a
Participant or any other person, be transferable by operation of law
in the event of a Participant's or any other person's bankruptcy or
insolvency or be transferable to a spouse as a result of a property
settlement or otherwise.
17.5 Not a Contract of Employment. The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between any
Employer and the Participant. Such employment is hereby acknowledged
to be an "at will" employment relationship that can be terminated at
any time for any reason, or no reason, with or without cause, and with
or without notice, unless expressly provided in a written employment
agreement. Nothing in this Plan shall be deemed to give a Participant
the right to be retained in the service of any Employer, or to
interfere with the right of any Employer to discipline or discharge
the Participant at any time.
17.6 Furnishing Information. A Participant or his or her Beneficiary will
cooperate with the Committee by furnishing any and all information
requested by the Committee and take such other actions as may be
requested in order to facilitate the administration of the Plan and
the
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payments of benefits hereunder, including but not limited to taking
such physical examinations as the Committee may deem necessary.
17.7 Terms. Whenever any words are used herein in the masculine, they shall
be construed as though they were in the feminine in all cases where
they would so apply; and whenever any words are used herein in the
singular or in the plural, they shall be construed as though they were
used in the plural or the singular, as the case may be, in all cases
where they would so apply.
17.8 Captions. The captions of the articles, sections and paragraphs of
this Plan are for convenience only and shall not control or affect the
meaning or construction of any of its provisions.
17.9 Governing Law. Subject to ERISA, the provisions of this Plan shall be
construed and interpreted according to the internal laws of the State
of Delaware without regard to its conflicts of laws
principles.
17.10 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 the
address below:
Conseco Services LLC
-------------------------------------------------------
-------------------------------------------------------
Attn: Vice President - Compensation and Benefits
-------------------------------------------------------
-------------------------------------------------------
11825 North Pennsylvania Street
-------------------------------------------------------
-------------------------------------------------------
P.O. Box 194
-------------------------------------------------------
-------------------------------------------------------
Carmel, Indiana 46032
-------------------------------------------------------
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.
Any notice or filing required or permitted to be given to a
Participant under this Plan shall be sufficient if in writing and
hand-delivered, or sent by mail, to the last known address of the
Participant.
17.11 Successors. The provisions of this Plan shall bind and inure to the
benefit of the Participant's Employer and its successors and assigns
and the Participant and the Participant's designated Beneficiaries.
17.12 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.
17.13 Validity. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect
the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal or invalid provision had never been
inserted herein.
17.14 Incompetent. If the Committee determines in its discretion that 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. The
Committee may require proof of minority, incompetence, incapacity or
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guardianship, as it may deem appropriate prior to distribution of the
benefit. Any payment of a benefit shall be a payment for the account
of the Participant and the Participant's Beneficiary, as the case may
be, and shall be a complete discharge of any liability under the Plan
for such payment amount.
17.15 Court Order. The Committee is authorized to comply with any court
order in any action in which the Plan or the Committee has been named
as a party, including any action involving a determination of the
rights or interests in a Participant's benefits under the Plan.
Notwithstanding the foregoing, the Committee shall interpret this
provision in a manner that is consistent with Code Section 409A and
other applicable tax law. In addition, if necessary to comply with a
qualified domestic relations order, as defined in Code Section
414(p)(1)(B), pursuant to which a court has determined that a spouse
or former spouse of a Participant has an interest in the Participant's
benefits under the Plan, the Committee, in its sole discretion, shall
have the right to immediately distribute the spouse's or former
spouse's interest in the Participant's benefits under the Plan to such
spouse or former spouse.
17.16 Distribution in the Event of Income Inclusion Under 409A. If any
portion of a Participant's Account Balance under this Plan is required
to be included in income by the Participant prior to receipt due to a
failure of this Plan to meet the requirement of Code Section 409A and
related Treasury guidance or Regulations, the Participant may petition
the Committee or Administrator, as applicable, for a distribution of
that portion of his or her Account Balance that is required to be
included in his or her income. Upon the grant of such a petition,
which grant shall not be unreasonably withheld, the Participant's
Employer shall distribute to the Participant immediately available
funds in an amount equal to the portion of his or her Account Balance
required to be included in income as a result of the failure of the
Plan to meet the requirements of Code Section 409A and related
Treasury guidance or Regulations, which amount shall not exceed the
Participant's unpaid vested Account Balance under the Plan. If the
petition is granted, such distribution shall be made within ninety
(90) days of the date when the Participant's petition is granted. Such
a distribution shall affect and reduce the Participant's benefits to
be paid under this Plan.
17.17 Deduction Limitation on Benefit Payments. If an Employer reasonably
anticipates that the Employer's deduction with respect to any
distribution from this Plan would be limited or eliminated by
application of Code Section 162(m), then to the extent deemed
necessary by the Employer to ensure that the entire amount of any
distribution from this Plan is deductible, the Employer may delay
payment of any amount that would otherwise be distributed from this
Plan. Any amounts for which distribution is delayed pursuant to this
Section shall continue to be credited/debited with additional amounts
in accordance with Section 3.9 above. The delayed amounts (and any
amounts credited thereon) shall be distributed to the Participant (or
his or her Beneficiary in the event of the Participant's death) at the
earliest date the Employer reasonably anticipates that the deduction
of the payment of the amount will not be limited or eliminated by
application of Code Section 162(m).
17.18 Insurance. The Employers, on their own behalf or on behalf of the
trustee of the Trust, and, in their sole discretion, may apply for and
procure insurance on the life of the Participant, in such amounts and
in such forms as the Trust may choose. The Employers or the trustee of
the Trust, as the case may be, shall be the sole owner and beneficiary
of any such insurance. The
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Participant shall have no interest whatsoever in any such policy or
policies, and at the request of the Employers shall submit to medical
examinations and supply such information and execute such documents as
may be required by the insurance company or companies to whom the
Employers have applied for insurance.
IN WITNESS WHEREOF, the Company has signed this Plan document as of August 2,
2006.
"Company"
Conseco Services, LLC.
an Indiana limited liability company
By:/s/Daniel J. Murphy
-------------------------------------------
Title: President
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