HNI CORPORATION DIRECTORS DEFERRED COMPENSATION PLAN As Amended and Restated Effective November 19, 2009
Exhibit
10.15
HNI
CORPORATION
As
Amended and Restated Effective November 19, 2009
TABLE OF
CONTENTS
|
Page
|
|||
|
I.
|
AMENDMENT
AND RESTATEMENT
|
1
|
|
|
1.1
|
Amendment
and Restatement.
|
1
|
|
|
1.2
|
Purpose
|
1
|
|
|
1.3
|
Application
of the Plan.
|
1
|
|
|
II.
|
DEFINITIONS
|
1
|
|
|
2.1
|
Definitions.
|
1
|
|
|
2.2
|
Gender
and Number
|
5
|
|
|
III.
|
ELIGIBILITY
AND PARTICIPATION
|
5
|
|
|
3.1
|
Eligibility
|
5
|
|
|
3.2
|
Missing
Persons
|
5
|
|
|
IV.
|
ESTABLISHMENT
AND ENTRIES TO ACCOUNTS
|
5
|
|
|
4.1
|
Accounts
|
5
|
|
|
4.2
|
Deferral
Election Agreement
|
6
|
|
|
4.3
|
Adjustments
to Accounts
|
7
|
|
|
4.4
|
Commencement
and Form of Distribution of Sub-Accounts
|
7
|
|
|
4.5
|
Exceptions
to Payment Terms
|
8
|
|
|
4.6
|
Death
Benefit
|
11
|
|
|
4.7
|
Funding
|
11
|
|
|
V.
|
ADMINISTRATION
|
12
|
|
|
5.1
|
Administration
|
12
|
|
|
5.2
|
Actions
of the Committee
|
12
|
|
|
5.3
|
Delegation
|
12
|
|
|
5.4
|
Expenses
|
12
|
|
|
5.5
|
Reports
and Records
|
12
|
|
|
5.6
|
Valuation
of Accounts and Account Statements
|
13
|
|
|
5.7
|
Indemnification
and Exculpation
|
13
|
|
|
VI.
|
BENEFICIARY
DESIGNATION
|
13
|
|
|
6.1
|
Designation
of Beneficiary
|
13
|
|
|
6.2
|
Death
of Beneficiary
|
13
|
|
|
6.3
|
Ineffective
Designation
|
13
|
|
|
VII.
|
AMENDMENT
AND TERMINATION
|
13
|
|
|
VIII.
|
CLAIMS
PROCEDURE
|
14
|
|
|
IX.
|
MISCELLANEOUS
|
14
|
|
|
9.1
|
Rights
as a Stockholder
|
14
|
|
|
9.2
|
Governing
Law
|
15
|
|
|
9.3
|
No
Limit on Compensation Plans or Arrangements
|
15
|
|
|
9.4
|
No
Right to Remain a Director
|
15
|
|
|
9.5
|
Severability
|
15
|
|
|
9.6
|
Securities
Matters
|
15
|
|
|
9.7
|
No
Fractional Shares
|
15
|
|
|
9.8
|
Headings
|
15
|
|
|
9.9
|
Nontransferability
|
15
|
|
|
9.10
|
Unfunded
Plan
|
15
|
|
|
9.11
|
No
Other Agreements
|
16
|
|
|
9.12
|
Incapacity
|
16
|
|
|
9.13
|
Release
|
16
|
|
|
9.14
|
Notices
|
16
|
|
|
9.15
|
Successors
|
16
|
|
HNI
CORPORATION
I. AMENDMENT AND
RESTATEMENT
1.1 Amendment
and Restatement. HNI Corporation, an Iowa corporation (the
"Corporation"), established this HNI Corporation Directors Deferred Compensation
Plan (the "Plan"), effective August 9, 1999. The Corporation has
amended and restated the Plan from time to time, most recently effective January
1, 2005. The Corporation hereby again amends and restates the Plan,
effective November 19, 2009 (the "Restatement Date"), to accomplish certain
changes to its form and operation.
1.2 Purpose. The
purpose of the Plan is to give Outside Directors the opportunity to defer the
receipt of fees payable to them by the Corporation to achieve their personal
financial planning goals.
1.3 Application
of the Plan. Except as otherwise set forth herein, the terms
of the Plan, as amended and restated herein, apply to all amounts deferred under
the Plan, whether before, on or after the Restatement Date.
II. DEFINITIONS
2.1 Definitions. Whenever
used in the Plan, the following terms shall have the meaning set forth below
and, when the defined meaning is intended, the term is capitalized:
(a) “Account” means the device
used to measure and determine the amount of benefits payable to a Participant or
Beneficiary under the Plan. The Corporation shall establish a Cash
Account and Stock Account for each Participant under the Plan, and the term
"Account," as used in the Plan, may refer to either such Account or the
aggregate of the two Accounts. In addition, the Corporation shall
establish a separate Sub-Account under each of the Participant's Cash Account
and Stock Account for each Deferral Election Agreement entered into by the
Participant pursuant to Section 4.2.
(b) “Beneficiary” means the
persons or entities designated by a Participant in writing pursuant to Article 6
of the Plan as being entitled to receive any benefit payable under the Plan by
reason of the death of a Participant, or, in the absence of such designation,
the Participant's estate (pursuant to the rules specified in Article
6).
(c) “Board” means the Board of
Directors of the Corporation.
(d) “Change in Control”
means:
(i) the
acquisition by any individual, entity or group (with the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the combined
voting power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors (the "Outstanding
Corporation Voting Securities"); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a Change in
Control: (I) any acquisition directly from the Corporation; (II) any
acquisition by the Corporation; (III) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Corporation or any
corporation controlled by the Corporation; or (IV) any acquisition by any
corporation pursuant to a transaction which complies with clauses (A), (B) and
(C) of subsection (iii) of this paragraph; or
(ii) individuals
who, as of the date hereof, constitute the Board (the "Incumbent Board") cease
during a 12-month period for any reason to constitute a majority of the Board;
provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Corporation's
shareholders, was approved by a vote of a majority of the directors then
comprising the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(iii) consummation
of a reorganization, merger or consolidation or sale or other disposition of all
or substantially all of the assets of the Corporation (a "Business
Combination"), in each case, unless, following such Business
Combination: (A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Corporation Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, 50% or more of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Corporation or all or substantially all of the
Corporation's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Corporation Voting Securities; (B) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Corporation or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 35% or more of the combined voting power of the then
outstanding voting securities of such corporation except to the extent that such
ownership existed prior to the Business Combination; and (C) at least a majority
of the members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Business Combination, if such change in the members of the Board was not
indorsed by a majority of the members of the Incumbent Board.
-2-
(e) “Code” means the Internal
Revenue Code of 1986, as amended from time to time, or any successor
thereto.
(f) “Committee” means the Human
Resources and Compensation Committee of the Board or a delegate of such
Committee.
(g) “Compensation,” of a
Participant, means the Participant's annual retainer, meeting fees (if any) and
any other amounts payable to the Participant by the Corporation for services
performed as an Outside Director, in cash or Stock, excluding any amounts
distributable under the Plan.
(i) “Deferral Election Agreement”
means the agreement described in Section 4.2 in which the Participant designates
the amount of his or her Compensation, if any, he or she wishes to contribute to
the Plan and acknowledges and agrees to the terms of the Plan.
(j) “Elective Deferral” means a
contribution to the Plan made by a Participant pursuant to a Deferral Election
Agreement the Participant enters into with the Corporation. Elective
Deferrals shall be made according to the terms of the Plan set forth in Section
4.2.
(k) “Enrollment Period” means the
period designated by the Corporation during which a Deferral Election Agreement
may be entered into with respect to an eligible employee's future Compensation
as described in Section 4.2. Generally, the Enrollment Period must
end no later than the end of the calendar year before the calendar year in which
the services giving rise to the Compensation to be deferred are
performed. As described in Section 4.2, an exception may be made to
this requirement for individuals who first become eligible to participate in the
Plan.
(l) “Fair Market Value,” of a
share of Stock, means the closing price of the share as reported on the New York
Stock Exchange on the date as of which such value is being determined, or, if
there shall be no reported transactions for such date, on the next preceding
date for which transactions were reported; provided, however, if Fair Market
Value for any date cannot be so determined, Fair Market Value shall be
determined by the Committee by whatever means or method as the Committee, in the
good faith exercise of its discretion, shall at such time deem
appropriate.
-3-
(m) “Outside Director” means a
non-employee member of the Board.
(n) “Participant” means an Outside
Director who has entered into a Deferral Election Agreement.
(o) “Plan Year” means the
consecutive 12-month period beginning each January 1 and ending December
31.
(p) “Prime Rate” means the prime
interest rate published in the Wall Street Journal or its web site as of the
first business day coincident with or immediately following the third Monday in
January.
(q) “Qualified Domestic Relations
Order” has the same meaning as in Section 414(p) of the Code, but without
regard to Section 414(p)(9) of the Code.
(r) “Restatement Date” means
November 19, 2009, 2009.
(s) “Retirement,” of a
Participant, means the Participant's Separation from Service on or after the
attainment of age 55 with at least ten years
of service as a Board member. The Chairman of the Board or, with
respect to the Chairman if the Chairman is a Participant, the Committee, in his,
her or its discretion, may waive or reduce the ten-year service requirement with
respect to a Participant; provided that any such waiver or reduction is made
before the Outside Director becomes a Participant or, with respect to each
Deferral Election Agreement, before the last day of the Enrollment Period for
the Plan Year for which the agreement is made.
(t) “Separation from Service,”
with respect to a Participant, has the meaning set forth in Treasury Regulation
Section 1.409A-1(h), or any subsequent authority.
(u) “Specified Employee” means a
"key employee" (as defined in Section 416(i) of the Code without regard to
Section 416(i)(5)) of the Corporation. For purposes hereof, an
employee is a key employee if the employee meets the requirements of Section
416(1)(A)(i), (ii) or (iii) (applied in accordance with the regulations
thereunder and disregarding Section 416(i)(5)) at any time during the 12-month
period ending on December 31. If a person is a key employee as of
such date, the person is treated as a Specified Employee for the 12-month period
beginning on the first day of the fourth month following such date.
(v) “Stock” means the
Corporation's common stock, $1.00 par value.
(w) “Stock Unit” means the
notational unit representing the right to receive one share
of Stock.
(x) “Subsidiary” means any
corporation, joint venture, partnership, limited liability company,
unincorporated association or other entity in which the Corporation has a direct
or indirect ownership or other equity interest and directly or indirectly owns
or controls 50 percent or more of the total combined voting or other
decision-making power.
-4-
2.2 Gender
and Number. Except when otherwise indicated by the context,
any masculine term used in the Plan also shall include the feminine gender; and
the definition of any plural shall include the singular and the singular shall
include the plural.
III. ELIGIBILITY AND
PARTICIPATION
3.1 Eligibility. Participation
in the Plan shall be limited to Outside Directors.
3.2 Missing
Persons. Each Participant and Beneficiary entitled to receive
benefits under the Plan shall be obligated to keep the Corporation informed of
his or her current address until all Plan benefits due to be paid to the
Participant or Beneficiary have been paid to him or her. If, after
having made reasonable efforts to do so, the Corporation is unable to locate the
Participant or Beneficiary for purposes of making a distribution, the amount of
the Participant's benefits under the Plan that would otherwise be considered as
nonforfeitable will be forfeited. If the missing Participant or
Beneficiary is located after the date of the forfeiture, the benefits for the
Participant or Beneficiary will not be reinstated. In no event will a
Participant's or Beneficiary's benefits be paid to him or her later than the
date otherwise required by the Plan and Code Section 409A.
IV. ESTABLISHMENT AND ENTRIES TO
ACCOUNTS
4.1 Accounts. The
Committee shall establish two Accounts for each Participant under the Plan as
follows:
(a) Cash
Account. A Participant's Cash Account, as of any date, shall
consist of the Compensation the Participant has elected to allocate to that
Account under his or her Deferral Election Agreement(s) pursuant to Section 4.2,
increased by earnings thereon pursuant to Section 4.3(a) and reduced by
distributions from the Account pursuant to Sections 4.4, 4.5 and
4.6.
(b) Stock
Account. A Participant's Stock Account, as of any date, shall
consist of the Compensation the Participant has elected to allocate to that
Account under his or her Deferral Election Agreement(s) pursuant to Section 4.2,
increased with earnings (including dividend equivalents) thereon and converted
to Stock Units pursuant to Section 4.3(b) and reduced by distributions from the
Account pursuant to Sections 4.4, 4.5 and 4.6.
The Committee shall establish a
separate Sub-Account under each of these Accounts for each Deferral Election
Agreement entered into by the Participant pursuant to Section 4.2. As
specified in Section 4.2, as part of a Participant's Deferral Election
Agreement, the Participant shall elect how amounts deferred under each Deferral
Election Agreement are to be distributed to him or her from among the available
distribution options described in Section 4.4. The separate
Sub-Accounts are established to account for the different distribution terms
that may apply to each Sub-Account. The Corporation may combine
Sub-Accounts that have identical distribution terms or may establish other
Sub-Accounts for a Participant under the Plan from time to time in its
discretion, as it deems appropriate or advisable. A Participant shall
have a full and immediate nonforfeitable interest in his or her Accounts at all
times.
-5-
4.2 Deferral
Election Agreement. A Participant wishing to make an Elective
Deferral under the Plan for a Plan Year shall enter into a Deferral Election
Agreement during the Enrollment Period immediately preceding the beginning of
the Plan Year. A separate Deferral Election Agreement must be entered
into for each Plan Year a Participant wishes to make Elective Deferrals under
the Plan. In order to be effective, the Deferral Election Agreement
must be completed and submitted to the Committee at the time and in the manner
specified by the Committee, which may be no later than the last day of the
Enrollment Period. The Committee shall not accept Deferral Election
Agreements entered into after the end of the Enrollment Period.
For the
Plan Year in which an individual first becomes an Outside Director, the
Committee may, in its discretion, allow the Outside Director to enter into a
Deferral Election Agreement within 30 days after he or she first becomes an
Outside Director. In order to be effective, the Deferral Election
Agreement must be completed and submitted to the Committee on or before the
30-day period has elapsed. The Committee will not accept Deferral
Election Agreements entered into after the 30-day period has
elapsed. If the Outside Director fails to complete a Deferral
Election Agreement by such time, he or she may enter into a Deferral Election
Agreement during any succeeding Enrollment Period in accordance with the rules
described in the preceding paragraph. For purposes of the exception
described in this paragraph, the term "Plan" means the Plan and any other plan
required to be aggregated with the Plan pursuant to Code Section 409A, and the
regulations and other guidance thereunder. Accordingly, if an Outside
Director has previously been eligible to participate in a plan required to be
aggregated with the Plan, then the 30-day exception described in this paragraph
shall not apply to him or her.
For each Deferral Election Agreement
the Participant enters into, the Participant shall specify:
(a) The
percentage of Compensation the Participant wishes to contribute as an Elective
Deferral;
(b) The
manner (by percentage) in which the amount in (a), above, is to be allocated
between the Participant's Cash Account and Stock Account; provided, however, in
the case of Compensation otherwise payable to the Participant in Stock, the
Compensation shall automatically be allocated to the Stock Account;
and
(c) The
time and manner of distribution (consistent with the requirements of Section
4.4) of the Sub-Account established with respect to the Deferral Election
Agreement.
The Committee may from time to time
establish a minimum amount that may be deferred by a Participant pursuant to
this Section 4.2 for any Plan Year.
Elective Deferrals shall be credited to
the Participant's Cash Account or Stock Account, as the case may be, as soon as
administratively reasonable after the Compensation would have been paid to the
Participant had the Participant not elected to defer it under the
Plan.
-6-
In general, a Deferral Election
Agreement shall become irrevocable as of the last day of the Enrollment Period
applicable to it. However, if a Participant incurs an "unforeseeable
emergency," as defined in Section 4.5(d)(ii) after the Deferral Election
Agreement otherwise becomes irrevocable, the Deferral Election Agreement shall
be cancelled as of the date on which the Participant is determined to have
incurred the unforeseeable emergency and no further Elective Deferrals will be
made under it.
4.3 Adjustments
to Accounts.
(a) The
Participant's Cash Account shall be credited with earnings as of the last day of
each month. The amount so credited shall be the product
of: (i) the Cash Account balance as of such date (less any
contributions credited to the Account during the month); and (ii) 1/12 of the
sum of (A) the Prime Rate (in effect for the Plan Year) and (B) one percentage
point.
(b) The
Elective Deferrals allocable to a Participant's Stock Account under a Deferral
Election Agreement shall be converted to Stock Units. In the case of
Elective Deferrals of Compensation otherwise payable to the Participant in cash,
the conversion shall occur on the day (the "conversion date") on which the
Elective Deferrals are credited to the Stock Account. On the
conversion date, the Elective Deferrals shall be converted to a number of whole
and fractional Stock Units determined by dividing the Elective Deferrals (plus
earnings) by the Fair Market Value of a share of Stock on the conversion
date. In the case of Elective Deferrals of Compensation otherwise
payable to the Participant in Stock, the conversion shall occur at the time the
Elective Deferrals are credited to the Stock Account pursuant to Section 4.2,
with the number of Stock Units so credited equal to the number of shares of
Stock otherwise payable to the Participant but for the Deferral Election
Agreement. On each date on which the Corporation pays a cash dividend
(the "dividend date"), the Stock Account shall be credited with an additional
number of Stock Units determined by dividing the dollar amount the Corporation
would have paid as a dividend if the Stock Units held in the Participant's Stock
Account as of the record date for the dividend were actual shares of Stock
divided by the Fair Market Value of a share of Stock on the dividend
date. Appropriate adjustments in the Stock Account shall be made as
equitably required to prevent dilution or enlargement of the Account from any
Stock dividend, Stock split, reorganization or other such corporate transaction
or event.
4.4 Commencement
and Form of Distribution of Sub-Accounts. As stated in Section
4.2(c), above, as part of his or her Deferral Election Agreement, a Participant
shall elect: (a) the date on (or, in the case of Elective Deferrals
made for Plan Years commencing on or after January 1, 2010, the Plan Year in)
which distribution of each Sub-Account established for him or her under the Plan
is to commence, which date may be no earlier than December 31 of the Plan Year
immediately after the Plan Year in which the Compensation deferred under the
Deferral Election Agreement would otherwise have been paid to the Participant;
provided, however, for Elective Deferrals made for Plan Years commencing on or
after January 1, 2010, the date may be no earlier than the third Monday in
January immediately after the end of the first Plan Year following the Plan Year
in which the Compensation deferred under the Deferral Election Agreement would
otherwise have been paid to the Participant; and (b) the form of distribution of
each such Sub-Account from the available distribution forms set forth
below:
-7-
(a) a
single lump-sum payment, or
(b) annual
installments over a number, not to exceed 15, of years specified by the
Participant.
All
distributions from Cash Sub-Accounts shall be paid in the form of
cash. All distributions from Stock Sub-Accounts shall be paid in the
form of Stock (with each Stock Unit converted to one share of Stock at the time
of distribution).
If a
Participant elects payment in the form of a single lump sum, distribution shall
be made to the Participant in a single lump sum on the commencement date elected
by the Participant; provided, however, for Plan Years commencing on or after
January 1, 2010, distribution will be made on the third Monday in January of the
Plan Year elected by the Participant.
If the
Participant elects payment in the form of annual installments, the initial
installment payment shall be made on the commencement date elected by the
Participant; provided, however, for Elective Deferrals made for Plan Years
commencing on or after January 1, 2010, the initial installment shall be made on
the third Monday in January of the Plan Year elected by the Participant for
benefit commencement. The remaining annual installment payments shall
be made on each anniversary of the commencement date during the payment period
elected by the Participant. The amount of each installment payment
shall be equal to the cash balance or number of Stock Units (as the case may be)
in the Participant's Sub-Account immediately prior to the installment payment,
multiplied by a fraction, the numerator of which is one, and the denominator of
which is the number of installment payments remaining, with the last installment
consisting of the balance of the Participant's Sub-Account. Earnings
and dividends shall be credited to the Participant's Sub-Account in the manner
provided in Section 4.3(a) and (b) during the payment period.
A
Participant may modify an election for payment of a Sub-Account to postpone the
commencement date and change the form of payment to another form permitted under
the Plan. In order to be effective, the requested modification
must: (a) be in writing and be submitted to the Corporation at the
time and in the manner specified by the Committee; (b) not take effect for at
least 12 months from the date on which it is submitted to the Committee; (c) be
submitted to the Committee at least 12 months prior to the then scheduled
distribution commencement date ("original distribution date"); and (d) specify a
new distribution commencement date that is no earlier than five years after the
original distribution date. For purposes hereof, if the original
distribution date is a Plan Year rather than a specified date within a Plan
Year, the original distribution date shall be deemed to be the first day of the
Plan Year.
4.5 Exceptions
to Payment Terms. Notwithstanding anything in this Article 4
or a Participant's Deferral Election Agreement (as may be modified pursuant to
Section 4.4) to the contrary, the following terms, if applicable, shall apply to
the payment of a Participant's Sub-Accounts.
-8-
(a) Separation
from Service before Scheduled Distribution Commencement
Date.
(i) For Plan
Years Commencing Before January 1, 2010. For Elective Deferrals
made for Plan Years commencing before January 1, 2010, the rules set forth in
this Section 4.5(a)(i) shall apply. If a Participant has a Separation
from Service for any reason, including death or disability, before the date on
which distribution of a Sub-Account is scheduled to commence, distribution of
the Sub-Account will commence within 90 days after the date on which the
Separation from Service occurs. Except as specified in paragraph (b)
of this Section 4.5 and Article 7, distribution will be made in the same form
(i.e., lump sum or installments, and if installments, over the same period) as
elected by the Participant in his or her Deferral Election Agreement (as may be
modified pursuant to the last paragraph of Section 4.4).
(ii) For Plan
Years Commencing On or After January 1, 2010. For Elective Deferrals
made for Plan Years commencing on or after January 1, 2010, the rules set forth
in this Section 4.5(a)(ii) shall apply. If a Participant has a
Separation from Service for any reason other than Retirement before the date on
which distribution of a Sub-Account is scheduled to commence, distribution of
the Sub-Account will be made in a single lump sum within 90 days after the date
on which the Separation from Service occurs.
(b) Small
Payments. If at any time the present value of any benefit
under the Plan that would be considered a "single plan" under Treasury
Regulation Section 1.409A-1(c)(2) together with the present value of any benefit
required to be aggregated with such benefit under Treasury Regulation Section
1.409A-1(c)(2), is less than the dollar limit set forth in Section 402(g)(1)(B)
of the Code, the Corporation may, in its discretion, distribute such benefit (or
benefits) to the Participant in the form of a single lump sum, provided that the
payment results in the liquidation of the entirety of the Participant's interest
under the "single plan," including all benefits required to be aggregated as
part of the "single plan" under Treasury Regulation Section 1.409A-1(c)(2), and
provided further the Corporation evidences its exercise of such discretion in
writing no later than the date of such payment.
(c) Delay in
Distributions.
(i) If
the Participant is a Specified Employee, any Plan distributions that are
otherwise to commence on the Participant's Separation from Service shall
commence on the date immediately following the six-month anniversary of the
Separation from Service or, if earlier, on the date of the Participant's
death. In this case, the first payment following the period of delay
required by this Section 4.5(c)(i) shall be increased by any amount that would
otherwise have been payable to the Participant under the Plan during the delay
period.
(ii) The
Corporation shall delay the distribution of any amount otherwise required to be
distributed under the Plan if, and to the extent that, the Corporation
reasonably anticipates the Corporation's deduction with respect to such
distribution otherwise would be limited or eliminated by application of Section
162(m) of the Code. In such event, (A) if any payment is delayed
during any year on account of Code Section 162(m), then all payments that could
be delayed on account of Code Section 162(m) during such year must also be
delayed; (B) such delayed payments must be paid either (1) in the first year in
which the Corporation reasonably anticipates the payment to be deductible, or
(2) the period beginning on the date of the Participant's Separation from
Service and ending on the later of the end of the Participant's year of
separation or the fifteenth (15th) day of the third month after such separation;
and (C) if payment is delayed to the date of Separation from Service with
respect to a Participant who is a Specified Employee, such payment shall
commence on the date immediately following the six-month anniversary of the
Separation from Service, or if earlier, on the date of the Participant's
death.
-9-
(iii) The
Corporation shall delay the distribution of any amount otherwise required to be
distributed under the Plan if, and to the extent that, the Corporation
reasonably anticipates the making of the distribution would violate Federal
securities laws or other applicable law. In such event, the
distribution will be made at the earliest date on which the Corporation
reasonably anticipates the making of the distribution will not cause such a
violation.
(d) Acceleration
of Distributions. All or a portion of a Participant's
Sub-Accounts may be distributed at an earlier time and in a different form than
specified in this Article 4:
(i) As
may be necessary to fulfill a Qualified Domestic Relations Order or as specified
in Section 1.409A-3(j)(4)(3) of the Treasury
Regulations. Distributions pursuant to a Qualified Domestic Relations
Order shall be made according to administrative procedures established by the
Corporation.
(ii) If
the Participant has an unforeseeable emergency. For these purposes an
"unforeseeable emergency" is a severe financial hardship of the Participant
resulting from an illness or accident of the Participant or the Participant's
spouse, Beneficiary or dependent (as defined in Section 152(a) of the Code,
without regard to Section 152(b)(1), (b)(2), and (d)(1)(B)), loss of the
Participant's property due to casualty (including the need to rebuild a home
following damage to a home not otherwise covered by insurance, for example, not
as a result of a natural disaster); or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant. For example, the imminent foreclosure of or eviction
from the Participant's primary residence may constitute an unforeseeable
emergency. In addition, the need to pay for medical expenses,
including non-refundable deductibles, as well as for the cost of prescription
drug medication, may constitute an unforeseeable emergency. Finally,
the need to pay for funeral expenses of a spouse, Beneficiary or a dependent (as
defined in Section 152(a) of the Code, without regard to Section 152(b)(1),
(b)(2) and (d)(1)(B)) may also constitute an unforeseeable
emergency. Except as otherwise provided in this paragraph (c)(ii),
the purchase of a home and the payment of college tuition are not unforeseeable
emergencies. Whether a Participant is faced with an unforeseeable
emergency permitting a distribution under this paragraph (c)(ii) is to be
determined based on the relevant facts and circumstances of each case, but, in
any case, a distribution on account of an unforeseeable emergency may not be
made to the extent such emergency is or may be relieved through reimbursement or
compensation from insurance or otherwise, by liquidation of the Participant's
assets, to the extent the liquidation of such assets would not cause severe
financial hardship, or by cessation of Elective Deferrals.
-10-
Distributions because of an
unforeseeable emergency must be limited to the amount reasonably necessary to
satisfy the emergency need (which may include amounts necessary to pay any
Federal, state, or local income taxes or penalties reasonably anticipated to
result from the distribution). Determinations of the amounts
reasonably necessary to satisfy the emergency need must take into account any
additional compensation available due to the Participant's cancellation of a
Deferral Election Agreement due to an unforeseeable emergency pursuant to
Section 4.2. However, the determination of amounts reasonably
necessary to satisfy the emergency need is not required to take into account any
additional compensation that, due to the unforeseeable emergency, is available
under another nonqualified deferred compensation plan but has not actually been
paid.
(iii) Due
to a failure of the Plan to satisfy Section 409A with respect to the
Participant, but only to the extent an amount is required to be included in the
Participant's income as a result of such failure.
(iv) In
the event of a Change in Control, in which case the Participant's Account shall
be distributed to him or her in a single lump sum within 90 days after the date
on which the Change in Control occurs.
4.6 Death
Benefit. If a Participant dies with all or a portion of his or
her Account unpaid, the Account shall be paid to his or her Beneficiary, as
designated in accordance with Article 6, in the form (single lump sum or
installments) elected by the Participant under Sections 4.2 and 4.4, subject to
Section 4.5(b) and Article 7, with distribution commencing to the Beneficiary
within 90 days following the date of the Participant's
death. Notwithstanding the preceding sentence, for Elective Deferrals
made for Plan Years beginning on or after January 1, 2010, if a Participant dies
with all or a portion of his or her Account unpaid, the Account shall be paid to
his or her Beneficiary, as designated in accordance with Article 6, in the form
of a single lump sum, with distribution commencing to the Beneficiary within 90
days following the date of the Participant's death.
4.7 Funding. The
Corporation's obligations under the Plan shall in every case be an unfunded and
unsecured promise to pay. Each Participant's or Beneficiary's rights
under the Plan shall be no greater than those of a general, unsecured creditor
of the Corporation. The amount of each Participant's Account shall be
reflected on the accounting records of the Corporation but shall not be
construed to create, or require the creation of, a trust, custodial or escrow
account. No Participant shall have any right, title or interest
whatsoever in or to any investment reserves, accounts or funds the Corporation
may purchase, establish or accumulate, and no Plan provision or action taken
pursuant to the Plan shall create or be construed to create a trust or a
fiduciary relationship of any kind between the Corporation and a Participant or
any other person. All amounts paid under the Plan shall be paid in
cash or Stock from the general assets of the Corporation, and the Corporation
shall not be obligated under any circumstances to fund its financial obligations
under the Plan. The Corporation may create a trust to hold funds or
securities to be used in payment of its obligation under the Plan and may fund
such trust; provided, however, any funds contained therein shall remain liable
to the claims of the Corporation's general creditors.
-11-
V. ADMINISTRATION
5.1 Administration. The
Plan shall be administered by the Committee. In addition to the other
powers granted under the Plan, the Committee shall have all powers necessary to
administer the Plan, including, without limitation, powers:
(a) to
interpret the provisions of the Plan;
(b) to
establish and revise the method of accounting for the Plan and to maintain the
Accounts; and
(c) to
establish rules for the administration of the Plan and to prescribe any forms
required to administer the Plan.
5.2 Actions
of the Committee. The Committee (including any person or
entity to whom the Committee has delegated duties, responsibilities or
authority, to the extent of such delegation) has total and complete
discretionary authority to determine conclusively for all parties all questions
arising in the administration of the Plan, to interpret and construe the terms
of the Plan, and to determine all questions of eligibility and status of
Participants and Beneficiaries under the Plan and their respective
interests. Subject to the claims procedures of Article 9, all
determinations, interpretations, rules and decisions of the Committee (including
those made or established by any person or entity to whom the Committee has
delegated duties, responsibilities or authority, if made or established pursuant
to such delegation) are conclusive and binding upon all persons having or
claiming to have any interest or right under the Plan.
5.3 Delegation. The
Committee, or any officer or other employee of the Corporation designated by the
Committee, shall have the power to delegate specific duties and responsibilities
to officers or other employees of the Corporation or other individuals or
entities. Any delegation may be rescinded by the Committee at any
time. Each person or entity to whom a duty or responsibility has been
delegated shall be responsible for the exercise of such duty or responsibility
and shall not be responsible for any act or failure to act of any other person
or entity.
5.4 Expenses. The
expenses of administering the Plan shall be borne by the
Corporation.
5.5 Reports
and Records. The Committee, and those to whom the Committee
has delegated duties under the Plan, shall keep records of all their proceedings
and actions and shall maintain books of account, records and other data as shall
be necessary for the proper administration of the Plan and for compliance with
applicable law.
-12-
5.6 Valuation
of Accounts and Account Statements. As of each valuation date,
the Committee shall adjust the previous Account balances of each Participant for
Elective Deferrals, distributions and investment gains and losses. A
"valuation date," for these purposes, is the last day of each calendar quarter,
and such other dates as the Committee may designate from time to time in its
discretion. The Committee shall provide each Participant with a
statement of his or her Account balances on a quarterly basis.
5.7 Indemnification
and Exculpation. The agents, officers, directors and employees
of the Corporation and its Subsidiaries and the Committee shall be indemnified
and held harmless by the Corporation against and from any and all loss, cost,
liability or expense that may be imposed upon or reasonably incurred by them in
connection with or resulting from any claim, action, suit or proceeding to which
they may be a party or in which they may be involved by reason of any action
taken or failure to act under the Plan and against and from any and all amounts
paid by them in settlement (with the Corporation's written approval) or paid by
them in satisfaction of a judgment in any such action, suit or
proceeding. The foregoing provision shall not be applicable to any
person if the loss, cost, liability or expense is due to such person's gross
negligence or willful misconduct.
VI. BENEFICIARY
DESIGNATION
6.1 Designation
of Beneficiary. Each Participant shall be entitled to
designate a Beneficiary or Beneficiaries who, upon the Participant's death, will
receive the amounts that otherwise would have been paid to the Participant under
the Plan. All designations shall be signed by the Participant and
shall be in a form prescribed by the Committee. The Participant may
change his or her designation of Beneficiary at any time, on a form prescribed
by the Committee. The filing of a new Beneficiary designation form by
a Participant shall automatically revoke all prior designations by that
Participant.
6.2 Death of
Beneficiary. In the event all the Beneficiaries named by a
Participant pursuant to Section 6.1 predecease the Participant, the amounts that
would have been paid to the Participant under the Plan shall be paid to the
Participant's estate.
6.3 Ineffective
Designation. In the event the Participant does not designate a
Beneficiary, or for any reason such designation is ineffective in whole or in
part, the ineffectively designated amounts shall be paid to the Participant's
estate.
VII. AMENDMENT AND
TERMINATION
The Board of Directors or the Committee
has the authority to amend, modify and/or terminate the Plan at any
time. No amendment or termination of the Plan shall in any manner
reduce the Account balance of any Participant without the consent of the
Participant (or if the Participant has died, his or her
Beneficiary). Without limiting the foregoing, the Board may, in its
sole discretion: (a) freeze the Plan by precluding any further
Elective Deferrals and/or other credits, but otherwise maintain the balance of
the provisions of the Plan; or (b) terminate the Plan in its entirety and
distribute the Participant's Accounts at an earlier date and in a different form
than otherwise provided under the Plan, provided such termination and
distribution comply with the requirements of Section 409A of the
Code.
-13-
VIII. CLAIMS
PROCEDURE
The
Committee shall notify a Participant in writing within 90 days of the
Participant's written application for benefits of the Participant's eligibility
or non-eligibility for benefits under the Plan; provided, however, benefit
distribution shall not be contingent upon a Participant's application for
benefits. If the Committee determines a Participant is not eligible
for benefits or full benefits, the notice shall set forth: (a) the
specific reasons for such denial; (b) a specific reference to the provision of
the Plan on which the denial is based; (c) a description of any additional
information or material necessary for the Participant to perfect the claim, and
a description of why it is needed; and (d) an explanation of the Plan's claims
review procedure and other appropriate information as to the steps to be taken
if the Participant wishes to have the claim reviewed. If the
Committee determines there are special circumstances requiring additional time
to make a decision, the Committee shall notify the Participant of the special
circumstances and the date by which a decision is expected to be made and may
extend the time for up to an additional 90-day period. If a
Participant is determined by the Committee to be not eligible for benefits, or
if a Participant believes he or she is entitled to greater or different
benefits, the Participant shall have the opportunity to have the Participant's
claim reviewed by the Committee by filing a petition for review with the
Committee within 60 days after receipt by the Participant of the notice issued
by the Committee. The petition shall state the specific reasons the
Participant believes the Participant is entitled to benefits or greater or
different benefits. Within 60 days after receipt by the Committee of
the petition, the Committee shall afford the Participant (and the Participant's
counsel, if any) an opportunity to present the Participant's position to the
Committee orally or in writing, and the Participant (or counsel) shall have the
right to review the pertinent documents, and the Committee shall notify the
Participant of its decision in writing within the 60-day period, stating
specifically the basis of the decision written in a manner calculated to be
understood by the Participant and the specific provisions of the Plan on which
the decision is based. If, because of the need for a hearing, the
60-day period is not sufficient, the decision may be deferred for up to another
60-day period at the election of the Committee, but notice of this deferral
shall be given to the Participant. If a Participant does not appeal
on time, the Participant will have failed to exhaust the Plan's internal
administrative appeal process, which is generally a prerequisite to bringing
suit. In the event an appeal of a denial of a claim for benefits is
denied, any lawsuit to challenge the denial of such claim must be brought within
one year of the date the Committee has rendered a final decision on the
appeal.
In the case of a Participant's death,
the same procedures shall apply to the Beneficiary.
IX. MISCELLANEOUS
9.1 Rights as
Stockholder. No person shall have any right as a stockholder
of the Corporation with respect to any shares of Stock or other equity security
of the Corporation payable under the Plan unless and until such person becomes a
stockholder of record with respect to such shares or equity
security.
-14-
9.2 Governing
Law. The Plan and all determinations made and actions taken
pursuant thereto, to the extent not otherwise governed by the Code or the laws
of the United States, shall be governed by the laws of the State of Iowa and
construed in accordance therewith without giving effect to principles of
conflicts of laws.
9.3 No Limit
on Compensation Plans or Arrangements. Nothing contained in
the Plan shall prevent the Corporation or a Subsidiary from adopting or
continuing in effect other or additional compensation plans or
arrangements.
9.4 No Right
to Remain a Director. Neither the adoption and maintenance of
the Plan nor the execution by the Corporation of a Deferral Election Agreement
with any Participant be construed as giving a Participant the right to be
retained as a Director of the Corporation, nor will it affect in any way the
right of the Corporation to terminate a Participant's position as a Director,
with or without cause. In addition, the Corporation may at any time
remove or dismiss a Participant from his or her position as a Director free from
any liability or any claim under the Plan.
9.5 Severability. If
any provision of the Plan or any Deferral Election Agreement is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction or would
disqualify the Plan or any Deferral Election Agreement under any law deemed
applicable by the Board, such provision shall be construed or deemed amended to
conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Board, materially altering the purpose or
intent of the Plan or the Deferral Election Agreement, such provision shall be
stricken as to such jurisdiction or Deferral Election Agreement, and the
remainder of the Plan or any such Deferral Election Agreement shall remain in
full force and effect.
9.6 Securities
Matters. The Corporation shall not be required to deliver any
share of Stock until the requirements of any federal or state securities or
other laws, rules or regulations (including the rules of any securities
exchange) as may be determined by the Corporation to be applicable are
satisfied.
9.7 No
Fractional Shares. No fractional shares of Stock
shall be issued or delivered pursuant to the Plan. Any fractional
share otherwise payable under the Plan shall be settled in the form of
cash.
9.8 Headings. Headings
are given to the Articles, Sections and Subsections of the Plan solely as a
convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
9.9 Nontransferability. No
benefit payable at any time under the Plan will be subject in any manner to
alienation, sale, transfer, assignment, pledge, levy, attachment or encumbrance
of any kind.
9.10 Unfunded
Plan. The Plan is intended to be an unfunded plan maintained
primarily to provide deferred compensation benefits for "a select group of
management or highly compensated employees" within the meaning of Sections
201(2), 301(a)(3) and 401(a)(1) of ERISA, and
therefore is further intended to be exempt from the provisions of Parts 2, 3,
and 4 of Title I of ERISA.
-15-
9.11
No Other
Agreements. The terms and conditions set forth herein
constitute the entire understanding of the Corporation, the Subsidiaries and the
Participants with respect to the matters addressed herein.
9.12 Incapacity. In
the event any Participant is unable to care for his or her affairs because of
illness or accident, any payment due may be paid to the Participant's spouse,
parent, brother, sister, adult child or other person deemed by the Corporation
to have incurred expenses for the care of the Participant, unless a duly
qualified guardian or other legal representative has been
appointed.
9.13 Release. Any
payment of benefits to or for the benefit of a Participant made in good faith by
the Corporation in accordance with the Corporation's interpretation of its
obligations hereunder, shall be in full satisfaction of all claims against the
Corporation and all Subsidiaries for benefits under the Plan to the extent of
such payment.
9.14 Notices. Any
notice permitted or required under the Plan shall be in writing and shall be
hand-delivered or sent, postage prepaid, by first class mail, or by certified or
registered mail with return receipt requested, to the Committee, if to the
Corporation, or to the address last shown on the records of the Corporation, if
to a Participant. Any such notice shall be effective as of the date
of hand delivery or mailing.
9.15 Successors. All
obligations of the Corporation under the Plan shall be binding upon and inure to
the benefit of any successor to the Corporation, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation
or otherwise, of all or substantially all of the business or assets of the
Corporation.
-16-