Sample Business Contracts

Executive Deferred Compensation Plan - eLoyalty Corp.

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                              ELOYALTY CORPORATION


                                 January 1, 2000

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                                TABLE OF CONTENTS

<S>                                                              <C>
1.    PURPOSE; EFFECTIVE DATE                                    1

2.    DEFINITIONS                                                1

3.    PARTICIPATION AND DEFERRALS                                3

4.    DEFERRED COMPENSATION ACCOUNT                              4

5.    PLAN BENEFITS                                              6

6.    BENEFICIARY DESIGNATION                                    9

7.    ADMINISTRATION                                            10

8.    CLAIMS PROCEDURE                                          11

9.    AMENDMENT AND TERMINATION OF PLAN                         12

10.   MISCELLANEOUS                                             13

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         The purpose of this Executive Deferred Compensation Plan is to provide
current tax planning opportunities as well as supplemental funds for retirement
or death for certain employees of eLoyalty Corporation. It is intended that the
Plan will aid in attracting and retaining employees of exceptional ability by
providing them with these benefits. The Plan shall be effective as of January 1,
2000 (the "Effective Date"), and shall constitute a continuation of the
Technology Solutions Company Executive Deferred Compensation Plan with respect
to employees of the Company and its subsidiaries who participated in such plan
prior to the spin-off of the Company by Technology Solutions Company ("TSC") to
its stockholders.


         Whenever used in this document, the following terms shall have the
meanings set forth in this Section unless a contrary or different meaning is
expressly provided:

         2.1 Account. "Account" means the device used by the Employer to measure
         and determine the amounts to be paid to a Participant under the Plan.
         Each Account shall consist of one or more Subaccounts.

         2.2 Beneficiary. "Beneficiary" means the person, persons or entity
         entitled under Section 6 to receive any Plan benefits payable after a
         Participant's death.

         2.3 Board. "Board" means the Board of Directors of the Company.

         2.4 Committee. "Committee" means the Committee appointed by the Board
         to administer the Plan pursuant to Article 7.

         2.5 Company. "Company" means eLoyalty Corporation.

         2.6 Compensation. "Compensation" means base salary, commissions, bonus,
         and bonus retention payments paid in cash. Elective pre-tax
         contributions made to the Plan shall be included in Compensation.
         Income from the exercise of stock options or the vesting of restricted
         stock, the amount of "gross-up" of expense items, and other items that
         the Committee determines should be excluded for administrative
         convenience, shall be excluded from Compensation.

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         2.7 Deferral Period. "Deferral Period" means the twelve (12) month
         period beginning January 1 and ending December 31.

         2.8 Disability. "Disability" shall have the same meaning as under the
         Company's group long term disability plan in effect at the time that
         Participant is declared to be disabled.

         2.9 Earnings. "Earnings" for each Subaccount means the growth credited
         or debited to the Subaccount at the rates described in the definition
         of Investment Index (Section 2.11). "Earnings" for an Account shall
         mean the aggregate Earnings for each Subaccount making up the Account.

         2.10 Employer. "Employer" means the Company and any subsidiary or
         affiliate of the Company designated by the Committee.

         2.11 Investment Index. "Investment Index" means each index selected by
         a Participant to be used as an earnings index pursuant to Article 3.
         Each Investment Index shall be a phantom investment fund, which shall
         be credited with earnings (whether a gain or a loss) at the same rate
         as the investment funds or such other similar indexes as the Committee
         may select from time to time and shown in Appendix A attached.

         2.12 Participant. "Participant" means any individual eligible under
         Section 3.1 who has elected to defer Compensation under this Plan.

         2.13 Participation Agreement. "Participation Agreement" means the
         agreement submitted by a Participant to the Committee prior to the
         beginning of a Deferral Period, specifying the amount to be deferred
         for such Deferral Period.

         2.14 Plan. "Plan" means this eLoyalty Corporation Executive Deferred
         Compensation Plan as amended from time to time.

         2.15 Retirement. "Retirement" means any voluntary termination of
         employment with the Company by the Participant (i) on or after
         attaining age fifty-five (55) and after completing at least five (5)
         years of service with an Employer or with TSC or (ii) on or after
         attaining age sixty-five (65). "Retirement" shall also mean any
         termination of employment by a Participant that is deemed to be a
         Retirement by the Committee.

         2.16 Subaccount. "Subaccount" means the device used by the Employer to
         measure and determine the amount of Deferrals allocated to each
         Investment Index selected by the Participant, and the Earnings
         allocated thereto.

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         2.17 Termination. "Termination" means any involuntary termination or
         any voluntary termination of employment with the Company other than on
         account of Retirement, Disability or death.

         2.18 TSC Plan. "TSC Plan" means the Technology Solutions Company
         Executive Deferred Compensation Plan, as in effect immediately prior to
         the Effective Date.


         3.1 Eligibility and Participation

             3.1.1 Eligibility. Eligibility to participate in the Plan shall be
             limited to those employees selected by the Plan Committee as being
             eligible to participate. Each employee of an Employer who was a
             participant in the TSC Plan immediately prior to the Effective Date
             shall be a Participant in this Plan as of the Effective Date.

             3.1.2 Participation. An eligible individual may elect to
             participate in the Plan with respect to any Deferral Period by
             submitting a Participation Agreement to the Committee prior to the
             beginning of the Deferral Period.

             3.1.3 Part-Year Participation. When an individual first becomes
             eligible to participate during a Deferral Period, a Participation
             Agreement may be submitted to the Employer no later than thirty
             (30) days after the employee becomes eligible to participate. Such
             Participation Agreement will be effective only with regard to
             Compensation to be paid following submission of the Participation
             Agreement to the Employer.

         3.2 Form of Deferral. A Participant may elect a deferral in the
         Participation Agreement as follows. A deferral shall be a portion of
         the Compensation payable by the Employer to the Participant during the
         Deferral Period. The amount of Compensation to be deferred shall be
         stated as a flat percentage, a flat dollar amount, or a percentage
         amount above a flat dollar amount not to exceed the maximums and not to
         be less than the minimums described in Section 3.3.

         3.3 Limitations on Deferrals. The following limitations shall apply to

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             3.3.1 Maximum. The maximum percentage of Compensation deferred
             shall be fifty percent (50%) for base salary and commissions and
             one-hundred percent (100%) for bonuses and retention bonuses.

             3.3.2 Minimum. The minimum deferral amount shall be five thousand
             dollars ($5,000) for each Deferral Period.

             3.3.3 Changes in Minimum or Maximum. The Committee may change the
             minimum or maximum deferral amounts from time to time by giving
             written notice to all Participants. No such change may affect the
             amount of deferral specified in a Participation Agreement made
             prior to the Committee's action.

         3.4 Termination of Employment. If a Participant terminates employment
         with Employer prior to the end of the Deferral Period, the Deferral
         Period shall end at the date of termination.

         3.5 Continuation of Deferral Amount. Once a Participant has filed a
         Participation Agreement, the elected deferral amount shall remain in
         effect for the applicable Deferral Period. The election shall be
         irrevocable except as provided in Section 5.1 relating to hardship

         3.6 Change in Employment Status. The Committee reserves the right to
         terminate an employee's participation in the plan if such employee no
         longer meets the eligibility requirements set by the Committee. Account
         balances will remain in the Plan and the employee will be deemed a
         Participant for purposes of those Accounts.


         4.1 Account. The amounts deferred by a Participant under the Plan, and
         any Earnings, shall be credited to the Participant's Account. Separate
         Subaccounts will be maintained to reflect Investment Index selections.
         The Account and Subaccounts shall be bookkeeping devices utilized for
         the sole purpose of determining the benefits payable under the Plan and
         shall not constitute a separate fund of assets. As of the Effective
         Date, each Participant's Account shall also be credited with the amount
         credited to such Participant's account under the TSC Plan, which amount
         shall thereafter be paid pursuant to the terms of this Plan, and not
         the TSC Plan.

         4.2 Selection of Investment Index

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             4.2.1 At the time a Participant elects a deferral for a Deferral
             Period, the Participant shall also select the Investment Index or
             Indexes in which the Participant wishes to have the deferrals
             deemed invested. The Participant may select any combination of one
             or more of the Investment Indexes as long as at least ten percent
             (10%) is allocated to each of the Investment Indexes selected.

             4.2.2 At the time the Participant selects Investment Index(es) for
             new deferrals, a different allocation may be selected among
             Investment Funds for current Account balances, which may be
             different from the allocation for new deferrals. A Participant may
             change his or her investment allocation at any time, but not more
             frequently than once in any 30-day period, in accordance with the
             electronic, telephonic, or other methods designated by the

         4.3 Timing of Credits; Withholding. A Participant's deferred
         Compensation shall be credited to the Account and Subaccounts at the
         time it would have been payable to the Participant. Any withholding of
         taxes or other amounts with respect to deferred Compensation that is
         required by state, federal or local law shall be withheld from the
         Participant's corresponding nondeferred Compensation.

         4.4 Determination of Accounts and Subaccounts. Each Participant's
         Account shall consist of the balance of such Participant's account
         under the TSC Plan immediately prior to the Effective Date increased by
         any deferred Compensation credited to such Participant's Account
         pursuant to Section 3, reduced by any benefits distributed to the
         Participant and increased or decreased by the Earnings credited on the
         balance in the Account as of each day on which the Nasdaq National
         Market or the New York Stock Exchange is open.

         4.5 Vesting of Accounts. Each Participant shall be one hundred percent
         (100%) vested at all times in the amounts credited to such
         Participant's Account, Subaccount and Earnings thereon, for amounts
         attributable to deferrals.

         4.6 Statement of Accounts. The Committee shall give to each Participant
         a statement showing the balances in the Participant's Account and
         Subaccount(s) on a quarterly basis and at such other times as may be
         determined by the Committee.

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         5.1 Early Withdrawals. A Participant's Account may be distributed to
         the Participant before termination of employment as follows:

             5.1.1 Election for In-Service Distribution. A Participant may elect
             in the Participation Agreement to have returned to such Participant
             any portion of the principal amount deferred by the Participation
             Agreement as soon as administratively practicable after the
             beginning of the fifth year following the commencement of the
             Deferral Period. The portion of the principal amount to be returned
             shall be elected in the Participation Agreement. The amount
             distributed shall be limited to the Account balance, if it is less
             than the principal amount deferred.

             5.1.2 Hardship Withdrawal. Upon a finding that a Participant or
             Beneficiary has suffered an Unforeseeable Emergency, the Committee
             may, in its sole discretion, make distributions from the
             Participant's Account. "Unforeseeable Emergency" means an
             unanticipated emergency that is caused by an event beyond the
             control of the Participant or Beneficiary and that would result in
             severe financial hardship to the individual if early withdrawal
             were not permitted. In no event shall declining earnings rates be
             considered an Unforeseeable Emergency. Any early withdrawal
             approved by the Committee shall be limited to the amount necessary
             to meet the emergency. If a Participant is deemed eligible to
             receive a hardship withdrawal, no additional deferrals shall be
             made for the Participant for the remainder of the Deferral Period
             in which withdrawal is made or for the immediately succeeding
             Deferral Period.

             5.1.3 Form of Payment. Withdrawals shall be paid in a lump sum and
             shall be charged to the Participant's Account as a distribution.

         5.2 Termination of Employment. If a Participant terminates employment
         with Employer for any reason, including death or disability, the
         Employer shall pay to the Participant (or the Participant's
         Beneficiary, in case of death) benefits equal to the balance in the

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         5.3 Form of Benefits. Except as provided below, benefits payable as a
         result of termination of employment shall be paid in the form elected
         by the Participant prior to the beginning of the first Deferral Period
         or as thereafter changed pursuant to Section 5.4. If the Participant
         participated in the TSC Plan prior to the Effective Date, benefits
         payable to the Participant hereunder shall be paid in the form elected
         under the TSC Plan. If a Participant's termination of employment is a
         Retirement or Disability, the form of benefit shall be, as elected by
         the Participant:

             5.3.1 A lump sum amount which is equal to the applicable Account
             balance; or

             5.3.2 Equal monthly installments of the Account amortized over a
             period of sixty (60), one hundred twenty (120), or one hundred
             eighty (180) months. Earnings on the unpaid balance shall continue
             to be credited to Subaccounts at the appropriate Investment Fund
             rate; or

             5.3.3 Equal annual installments of the Account amortized over a
             period of five (5), ten (10), or fifteen (15) years. Earnings on
             the unpaid balance shall continue to be credited to Subaccounts at
             the appropriate Investment Fund rate.

         If a Participant's termination of employment is a Termination, the form
         of benefit shall be, as elected by the Participant:

             5.3.4 A lump sum amount which is equal to the applicable Account
             balance; or

             5.3.5 Equal monthly installments of the Account amortized over a
             period of twelve (12), twenty-four (24), or thirty-six (36) months.
             Earnings on the unpaid balance shall continue to be credited to
             Subaccounts at the appropriate Investment Fund rate; or

             5.3.6 Equal annual installments of the Account amortized over a
             period of one (1), two (2), or three (3) years. Earnings on the
             unpaid balance shall continue to be credited to Subaccounts at the
             appropriate Investment Fund rate.

         Benefits payable due to a Participant's death shall be distributed as

             5.3.7 If the Participant's death occurs before benefit payments
             have commenced, the Participant's Beneficiary shall receive payment
             in a lump sum.

             5.3.8 If the Participant's death occurs after benefit payments have
             commenced, the Participant's Beneficiary shall continue to receive
             payments in the form elected by the Participant.

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         Notwithstanding the form elected, if the Participant's total Account is
         five thousand dollars ($5,000) or less as of the date the Participant's
         employment terminates, the benefit shall be paid in a lump sum.

         5.4 Change in Form of Benefits. A Participant may amend the form of
         benefit distribution previously selected at any time prior to the
         calendar year in which the Participant's employment terminates so long
         as the amendment does not increase the number of years during which
         payment is to be made. Notwithstanding the above, the Participant may
         not amend any distribution election made pursuant to Section 5.1.1,
         Election for In-Service Distribution.

         5.5 Disability Payments. If a Participant is to receive payments from
         the Plan due to Disability, and wishes to alter the form of benefit
         payment previously elected, the Participant shall submit a request to
         postpone payments until the Participant would have otherwise qualified
         for Retirement had the Participant remained employed at the Company in
         the full capacity of his or her duties. Amendment of the form of
         payment shall be subject to approval by the Committee. Any alteration
         of the elected payment shall be at the sole discretion of the Committee
         and the Committee reserves the right to deny any application to alter
         the elected payment form.

         5.6 Withholding Payroll Taxes. The Employer shall withhold from
         payments hereunder any taxes required to be withheld from such payments
         under federal, state or local law. A Beneficiary, however, may elect
         not to have withholding of federal income tax pursuant to Section 3405
         of the Internal Revenue Code, or any successor provision thereto.

         5.7 Valuation. The amount of a lump sum, monthly installment, or annual
         installment payment shall be based on the value of the Participant's
         Account on the date the Participant's employment terminates. Except as
         provided in Section 5.8, payments shall be made or commence within
         ninety (90) days after such date.

         5.8 Covered Employee. Notwithstanding Section 5.7, if any portion of a
         payment in a calendar year would be disallowed as a deduction to the
         Employer because the Participant is a "covered employee" for that
         calendar year under Section 162(m) of the Internal Revenue Code, that
         portion shall instead be paid in the immediately following

<PAGE>   11

         calendar year, by January 30. This Section does not apply to early
         withdrawals under Section 5.1.

         5.9 Payment to Guardian. If a distribution is payable to a minor or to
         a person declared incompetent or to a person incapable of handling the
         disposition of property, the Committee may direct payment to the
         guardian, legal representative, or person having the care and custody
         of such minor, incompetent, or person. The Committee may require proof
         of incompetence, minority, incapacity or guardianship as it may deem
         appropriate prior to distribution. Such distribution shall completely
         discharge the Committee from all liability with respect to such


         6.1 Beneficiary Designation. Each Participant shall have the right at
         any time to designate one or more persons or an entity as Beneficiary
         (both primary as well as secondary) to whom benefits under this Plan
         shall be paid in the event of a Participant's death prior to complete
         distribution of the Participant's Account. Each Beneficiary designation
         shall be in a written form prescribed by the Committee and will be
         effective only when filed with the Committee during the Participant's
         lifetime. The Beneficiary designated by a Participant under the TSC
         Plan shall continue in effect under this Plan until changed by such
         Participant. Designation by a married Participant of a Beneficiary
         other than the Participant's spouse shall not be effective unless the
         spouse executes a written consent that acknowledges the effect of the
         designation and is witnessed by a notary public, or the consent cannot
         be obtained because the spouse cannot be located.

         6.2 Amendments. Except as provided below, any nonspousal designation of
         Beneficiary may be changed by a Participant without the
         consent of such Beneficiary by the filing of a new designation with the
         Committee. The filing of a new designation shall cancel all
         designations previously filed.

         6.3 Change in Marital Status. If the Participant's marital status
         changes after the Participant has designated a
         Beneficiary, the following shall apply:

             6.3.1 If the Participant is married at death but was unmarried when
             the designation was made, the designation shall be void unless the
             spouse has consented to it in the manner prescribed above.

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             6.3.2 If the Participant is unmarried at death but was married when
             the designation was made:

     The designation shall be void if the spouse was named as

    The designation shall remain valid if a nonspouse
             Beneficiary was named.

             6.3.3 If the Participant was married when the designation was made
             and is married to a different spouse at death, the designation
             shall be void unless the new spouse has consented to it in the
             manner prescribed above.

         6.4 No Beneficiary Designation. If any Participant fails to designate a
         Beneficiary in the manner provided above, or if the Beneficiary
         designated by a deceased Participant dies before the Participant or
         before complete distribution of the Participant's benefits, the
         Participant's Beneficiary shall be the person in the first of the
         following classes in which there is a survivor:

             6.4.1 The Participant's surviving spouse;

             6.4.2 The Participant's children in equal shares, except that if
             any of the children predeceases the Participant but leaves issue
             surviving, then such issue shall take by right of representation
             the share the parent would have taken if living;

             6.4.3 The Participant's estate.


         7.1 Committee; Duties. This Plan shall be administered by the Committee
         which shall be comprised of the outside directors serving on the
         Board's Compensation Committee or a committee of at least two members
         composed of non-Participants, designated by the Board's Compensation
         Committee. The Committee shall have the authority to make, amend,
         interpret and enforce all appropriate rules and regulations for the
         administration of the Plan and decide or resolve any and all questions,
         including interpretations of the Plan, as may arise in such
         administration. A majority vote of the

<PAGE>   13

         Committee members shall control any decision. Members of the Committee
         may be Participants under this Plan.

         7.2 Agents. The Committee may, from time to time, employ agents and
         delegate to them such administrative duties as it sees fit, and may
         from time to time consult with counsel who may be counsel to the

         7.3 Binding Effect of Decisions. The decision or action of the
         Committee 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,
         conclusive and binding upon all persons having any interest in the

         7.4 Indemnity of Committee. The Company shall indemnify and hold
         harmless the members of the Committee to the fullest extent authorized
         by the Delaware General Corporation Law pursuant to "Article VIII
         Indemnification" of the Company's By-Laws.


         8.1 Claim. Any person claiming a benefit, requesting an interpretation
         or ruling under the Plan, or requesting information under the Plan
         shall present the request in writing to the Committee, which shall
         respond in writing as soon as practicable.

         8.2 Denial of Claim. If the claim or request is denied, the written
         notice of denial shall state:

             8.2.1 The reasons for denial, with specific reference to the Plan
             provisions on which the denial is based.

             8.2.2 A description of any additional material or information
             required and an explanation of why it is necessary.

             8.2.3 An explanation of the Plan's claim review procedure.

         8.3 Review of Claim. Any person whose claim or request is denied or who
         has not received a response within thirty (30) days may request review
         by notice given in writing to the Committee. The claim or request shall
         be reviewed by the Committee which may, but shall not be required to,
         grant the claimant a hearing. On review, the claimant may have
         representation, examine pertinent documents, and submit issues and
         comments in writing.

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         8.4 Final Decision. The decision on review shall normally be made
         within sixty (60) days. If any extension of time is required for a
         hearing or other special circumstances, the claimant shall be notified
         and the time limit shall be one hundred twenty (120) days. The decision
         shall be in writing and shall state the reasons and the relevant Plan
         provisions. All decisions on review shall be final and bind all parties


         9.1 Amendment. The Board may at any time amend the Plan by written
         instrument, notice of which shall be given to all Participants and to
         Beneficiaries receiving installment payments, subject to the following:

             9.1.1 Preservation of Account Balance. No amendment shall reduce
             the amount accrued in any Account to the date such notice of the
             amendment is given.

             9.1.2 Changes in Investment Indexes. The Committee may change the
             Investment Indexes available to Participants for any date
             subsequent to the date of such change.

         9.2 Employer's Right to Terminate. The Board may at any time partially
         or completely terminate the Plan if, in its judgment, the tax,
         accounting, or other effects of the continuance of the Plan, or
         potential payments thereunder would not be in the best interest of the

             9.2.1 Partial Termination. The Board may partially terminate the
             Plan by instructing the Committee not to accept any additional
             Participation Agreements. If such a partial termination occurs, the
             Plan shall continue to operate and be effective with regard to
             Participation Agreements entered into prior to the effective date
             of such partial termination.

             9.2.2 Complete Termination. The Board may completely terminate the
             Plan by instructing the Committee not to accept any additional
             Participation Agreements, and by terminating all ongoing
             Participation Agreements. If such a complete termination occurs,
             the Plan shall cease to operate and the Employer shall pay out each
             Account. Unless the Committee determines otherwise, payment shall
             be made as a lump sum or in equal monthly installments over the
             following period, based on the Account balance:

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                Account Balance                            Payout Period
                ---------------                            -------------
                $50,000 or less                            Lump Sum
                More than $50,000 but less than $250,000   3 Years
                $250,000 or More                           5 Years

         Earnings at the appropriate rate shall continue to be credited on the
         unpaid balance in each Account. The Employer reserves the right to pay
         each Account in a lump sum, notwithstanding the above schedule.


         10.1 Unfunded Plan. This Plan is 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, 301 and 401 of the Employee Retirement Income Security
         Act of 1974, as amended ("ERISA"), and therefore is exempt from the
         provisions of Parts 2, 3 and 4 of Title I of ERISA. Accordingly, the
         Board may terminate the Plan and make no further benefit payments or
         remove certain employees as Participants if it is determined by the
         United States Department of Labor, a court of competent jurisdiction,
         or an opinion of counsel that the Plan constitutes an employee pension
         benefit Plan within the meaning of Section 3(2) of ERISA (as currently
         in effect or hereafter amended) which is not so exempt.

         10.2 Unsecured General Creditor. Participants and their Beneficiaries,
         heirs, successors, and assigns shall have no secured legal or equitable
         rights, interest or claims in any property or assets of the Employer,
         nor shall they be Beneficiaries of, or have any rights, claims or
         interest in any assets or financial instruments which may be acquired
         by the Employer. Except as provided in Section 10.3, such assets of the
         Employer shall not be held under any trust for the benefit of
         Participant, their Beneficiaries, heirs, successors or assigns, or held
         in any way as collateral security for the fulfilling of the obligations
         of the Employer under this Plan. Any and all of the Employer's assets
         and policies shall be, and remain, the general, unpledged, unrestricted
         assets of the Employer. The Employer's obligation under the Plan shall
         be that of an unfunded and unsecured promise to pay money in the

<PAGE>   16

         10.3 Trust Fund. At its discretion, the Employer may establish one or
         more trusts, with such trustees as the Board may approve, for the
         purpose of providing for the payment of benefits owed under the Plan.
         Although such a trust shall be irrevocable, its assets shall be held
         for payment of all the Employer's general creditors in the event of
         insolvency. To the extent any benefits provided under the Plan are paid
         from any such trust, the Employer shall have no further obligation to
         pay them. If not paid from the trust, such benefits shall remain the
         obligation of the Employer. Notwithstanding the existence of such a
         trust, it is intended that the Plan be unfunded for tax purposes and
         for purposes of Title I of ERISA.

         10.4 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 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 nontransferable. No part of the amounts
         payable shall, prior to actual payment, be subject to seizure or
         sequestration for the payment of any debts, judgments, alimony or
         separate maintenance owed by a Participant or any other person, nor be
         transferable by operation of law in the event of a Participant's or any
         other person's bankruptcy or insolvency.

         10.5 Not a Contract of Employment. This Plan shall not constitute a
         contract of employment between the Employer and the Participant.
         Nothing in this Plan shall give a Participant the right to be retained
         in the service of the Employer or to interfere with the right of the
         Employer to discipline or discharge a Participant at any time.

         10.6 Protective Provisions. A Participant will cooperate with the
         Employer by furnishing any and all information requested by the
         Employer as the Employer may reasonably require.

         10.7 Governing Law. The provisions of this Plan shall be construed and
         interpreted according to the laws of the State of Illinois, except as
         preempted by federal law.

         10.8 Validity. In case any provision of this Plan shall be held 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 and invalid provision had never been
         inserted herein.

<PAGE>   17

         10.9 Notice. Any notice required or permitted under the Plan shall be
         sufficient if in writing and hand delivered or sent by registered or
         certified mail. Such notice shall be deemed as 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. Mailed
         notice to the Committee shall be directed to the Company's address.
         Mailed notice to a Participant or Beneficiary shall be directed to the
         individual's last known address in the Employer's records.

         10.10 Successors. The provisions of this Plan shall bind and inure to
         the benefit of the Employer and its successors and assigns. The term
         successors as used herein shall include any corporate or other business
         entity which shall, whether by merger, consolidation, purchase or
         otherwise acquire all or substantially all of the business and assets
         of the Employer, and successors of any such corporation or other
         business entity.