Deferred Compensation Plan - Wild Oats Markets Inc.
Wild Oats Markets, Inc.
Deferred Compensation Plan
Master Plan Document
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Effective November 1, 1999
<PAGE>
Wild Oats Markets, Inc.
Deferred Compensation Plan
Master Plan Document
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Purpose ...............................................................................................1
ARTICLE 1 Definitions....................................................................................1
ARTICLE 2 Selection, Enrollment, Eligibility.............................................................6
2.1 Selection by Committee.........................................................................6
2.2 Enrollment Requirements........................................................................6
2.3 Eligibility; Commencement of Participation.....................................................6
2.4 Termination of Participation and/or Deferrals..................................................6
ARTICLE 3 Deferral Commitments/Company Matching/Crediting Taxes..........................................7
3.1 Minimum Deferrals..............................................................................7
3.2 Maximum Deferral...............................................................................7
3.3 Election to Defer; Effect of Election Form.....................................................7
3.4 Withholding of Annual Deferral Amounts.........................................................8
3.5 Company Contribution Amount....................................................................8
3.6 Annual Company Matching Amount.................................................................8
3.7 Investment of Trust Assets.....................................................................8
3.8 Vesting........................................................................................8
3.9 Crediting/Debiting of Account Balances.........................................................9
3.10 FICA and Other Taxes..........................................................................11
ARTICLE 4 Short-Term Payout; Unforeseeable Financial Emergencies; Withdrawal Election...................11
4.1 Short-Term Payout.............................................................................11
4.2 Other Benefits Take Precedence Over Short-Term................................................11
4.3 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies.........................11
4.4 Withdrawal Election...........................................................................12
ARTICLE 5 Retirement Benefit............................................................................12
5.1 Retirement Benefit............................................................................12
5.2 Payment of Retirement Benefit.................................................................12
5.3 Death Prior to Completion of Retirement Benefit...............................................13
ARTICLE 6 Pre-Retirement Survivor Benefit...............................................................13
6.1 Pre-Retirement Survivor Benefit...............................................................13
6.2 Payment of Pre-Retirement Survivor Benefit....................................................13
ARTICLE 7 Termination Benefit...........................................................................13
7.1 Termination Benefit...........................................................................13
7.2 Payment of Termination Benefit................................................................13
ARTICLE 8 Disability Waiver and Benefit.................................................................14
8.1 Disability Waiver.............................................................................14
8.2 Continued Eligibility; Disability Benefit.....................................................14
ARTICLE 9 Beneficiary Designation.......................................................................14
9.1 Beneficiary...................................................................................14
9.2 Beneficiary Designation; Change; Spousal Consent..............................................15
9.3 Acknowledgement...............................................................................15
9.4 No Beneficiary Designation....................................................................15
9.5 Doubt as to Beneficiary.......................................................................15
9.6 Discharge of Obligations......................................................................15
ARTICLE 10 Leave of Absence..............................................................................15
10.1 Paid Leave of Absence.........................................................................15
10.2 Unpaid Leave of Absence.......................................................................15
ARTICLE 11 Termination, Amendment or Modification........................................................16
11.1 Termination...................................................................................16
11.2 Amendment.....................................................................................16
11.3 Plan Agreement................................................................................17
11.4 Effect of Payment.............................................................................17
ARTICLE 12 Administration................................................................................17
12.1 Committee Duties..............................................................................17
12.2 Administration Upon Change In Control.........................................................17
12.3 Agents........................................................................................18
12.4 Binding Effect of Decisions...................................................................18
12.5 Indemnity of Committee........................................................................18
12.6 Employer Information..........................................................................18
ARTICLE 13 Other Benefits and Agreements.................................................................18
13.1 Coordination with Other Benefits..............................................................18
ARTICLE 14 Claims Procedures.............................................................................18
14.1 Presentation of Claim.........................................................................18
14.2 Notification of Decision......................................................................19
14.3 Review of a Denied Claim......................................................................19
14.4 Decision on Review............................................................................19
14.5 Legal Action..................................................................................19
ARTICLE 15 Trust.........................................................................................20
15.1 Establishment of the Trust....................................................................20
15.2 Interrelationship of the Plan and the Trust...................................................20
15.3 Distributions From the Trust..................................................................20
ARTICLE 16 Miscellaneous.................................................................................20
16.1 Status of Plan................................................................................20
16.2 Unsecured General Creditor....................................................................20
16.3 Employer's Liability..........................................................................20
16.4 Nonassignability..............................................................................20
16.5 Not a Contract of Employment..................................................................21
16.6 Furnishing Information........................................................................21
16.7 Terms.........................................................................................21
16.8 Captions......................................................................................21
16.9 Governing Law.................................................................................21
16.10 Notice........................................................................................21
16.11 Successors....................................................................................22
16.12 Spouse's Interest.............................................................................22
16.13 Validity......................................................................................22
16.14 Incompetent...................................................................................22
16.15 Court Order...................................................................................22
16.16 Distribution in the Event of Taxation.........................................................22
16.17 Insurance.....................................................................................23
16.18 Legal Fees To Enforce Rights After Change in Control..........................................23
<PAGE>
Wild Oats Markets, Inc.
Deferred Compensation Plan
Master Plan Document
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
WILD OATS MARKETS, INC.
DEFERRED COMPENSATION PLAN
Effective November 1, 1999
Purpose
The purpose of this Plan is to provide specified benefits to a select
group of management and highly compensated Employees and Directors who
contribute materially to the continued growth, development and future business
success of Wild Oats Markets, Inc., a Delaware corporation, 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
For 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, a credit
on the records of the Employer equal to the sum of (i) the Deferral
Account balance, (ii) the vested Company Contribution Account balance
and (iii) the vested Company Matching Account balance. The Account
Balance, and each other specified 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 Company Matching Amount" for any one Plan Year shall be the
amount determined in accordance with Section 3.6.
1.3 "Annual Deferral Amount" shall mean that portion of a Participant's
Base Annual Salary, Bonus and Directors Fees that a Participant elects
to have, and is deferred, in accordance with Article 3, for any one
Plan Year. In the event of a Participant's Retirement, Disability (if
deferrals cease in accordance with Section 8.1), death or a 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 be an annual installment payment over
the number of years selected by the Participant in accordance with this
Plan, calculated as follows: The Account Balance of the Participant
shall be calculated as of the close of business on the last business
day of the year. The annual installment shall be calculated by
multiplying this balance by a fraction, the numerator of which is one,
and the denominator of which is the remaining number of annual payments
due the Participant. By way of example, if the Participant elects a 10
year Annual Installment Method, the first payment shall be 1/10 of the
Account Balance, calculated as described in this definition. The
following year, the payment shall be 1/9 of the Account Balance,
calculated as described in this definition. Each annual installment
shall be paid on or as soon as practicable after the last business day
of the applicable year.
1.5 "Base Annual Salary" shall mean the annual cash compensation relating
to services performed during any calendar year, whether or not paid in
such calendar year or included on the Federal Income Tax Form W-2 for
such calendar year, excluding bonuses, commissions, overtime, fringe
benefits, stock options, relocation expenses, incentive payments,
non-monetary awards, directors fees and other fees, automobile and
other allowances paid to a Participant for employment services rendered
(whether or not such allowances are included in the Employee's gross
income). Base Annual Salary shall be calculated before reduction for
compensation voluntarily deferred or contributed by the Participant
pursuant to all qualified or non-qualified plans of any 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 any 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 9, 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 "Board" shall mean the board of directors of the Company.
1.9 "Bonus" shall mean any compensation, in addition to Base Annual Salary
relating to services performed during any calendar year, whether or not
paid in such calendar year or included on the Federal Income Tax Form
W-2 for such calendar year, payable to a Participant as an Employee
under any Employer's bonus and cash incentive plans, excluding stock
options, stock dividends, stock warrants, and any other stock-based
compensation.
1.10 "Change in Control" shall mean the first to occur of any of the
following events:
(a) Any person (as defined below) becomes the Beneficial Owner (as defined
below), directly or indirectly, of securities of the Company representing a
majority or more of the combined voting power of the Company's then
outstanding securities. For purposes of this Agreement, (1) the term
"Person" is used as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); provided,
however, that the term shall not include Elizabeth C. Cook, Michael C.
Gilliland, Chase Venture Capital Associates or their affiliates, the
Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any company owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, and (2) the term
"Beneficial Owner" shall have the meaning given to such term in Rule 13d-3
under the Exchange Act;
(b) During any period of two consecutive years following the effective date of
this Plan, individuals who at the beginning of such period constitute the
Board, and any new director (other than a director designated by a person
who has entered into an agreement with the Company to effect a transaction
described in Sections 1.11(a) or (c)) whose election by the Board or
nomination for election by the Company's stockholders was approved by a
vote of at least a majority of the directors then still in office who
either were directors at the beginning of such period or whose election or
nomination for election was previously so approved (hereinafter referred to
as "Continuing Directors"), cease for any reason to constitute at least a
majority thereof;
(c) The stockholders of the Company consummate a plan of complete liquidation
of the Company or any agreement for the sale or disposition by the Company
to an unrelated third party or parties of all or substantially all of the
Company's assets.
1.11 "Claimant" shall have the meaning set forth in Section 14.1.
1.12 "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
1.13 "Committee" shall mean the committee described in Article 12.
1.14 "Company" shall mean Wild Oats Markets, Inc., a Delaware corporation,
and any successor to all or substantially all of the Company's assets
or business.
1.15 "Company Contribution Account" shall mean (i) the sum of the
Participant's Company Contribution Amounts, plus (ii) amounts credited
in accordance with all the applicable crediting provisions of this Plan
that relate to the Participant's Company Contribution Account, less
(iii) all distributions made to the Participant or his or her
Beneficiary pursuant to this Plan that relate to the Participant's
Company Contribution Account.
1.16 "Company Contribution Amount" shall mean, for any one Plan Year, the
amount determined in accordance with Section 3.5.
1.17 "Company Matching Account" shall mean (i) the sum of all of a
Participant's Annual Company Matching Amounts, plus (ii) amounts
credited in accordance with all the applicable crediting provisions of
this Plan that relate to the Participant's Company Matching Account,
less (iii) all distributions made to the Participant or his or her
Beneficiary pursuant to this Plan that relate to the Participant's
Company Matching Account.
1.18 "Deduction Limitation" shall mean the following described limitation on
a benefit that may otherwise be distributable pursuant to the
provisions of this Plan. Except as otherwise provided, this limitation
shall be applied to all distributions that are "subject to the
Deduction Limitation" under this Plan. If an Employer determines in
good faith prior to a Change in Control that there is a reasonable
likelihood that any compensation paid to a Participant for a taxable
year of the Employer would not be deductible by the Employer solely by
reason of the limitation under Code Section 162(m), then to the extent
deemed necessary by the Employer to ensure that the entire amount of
any distribution to the Participant pursuant to this Plan prior to the
Change in Control is deductible for federal income tax purposes, the
Employer may defer all or any portion of a distribution under this
Plan. Any amounts deferred pursuant to this limitation shall continue
to be credited/debited with additional amounts in accordance with
Section 3.9 below, even if such amount is being paid out in
installments. The amounts so deferred and 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 possible date, as
determined by the Employer in good faith, on which the deductibility of
compensation paid or payable to the Participant for the taxable year of
the Employer during which the distribution is made will not be limited
by Section 162(m), or if earlier, the effective date of a Change in
Control. Notwithstanding anything to the contrary in this Plan, the
Deduction Limitation shall not apply to any distributions made after a
Change in Control.
1.19 "Deferral Account" shall mean (i) the sum of all of a Participant's
Annual Deferral Amounts, plus (ii) amounts credited in accordance with
all the applicable crediting provisions of this Plan that relate to the
Participant's Deferral Account, less (iii) all distributions made to
the Participant or his or her Beneficiary pursuant to this Plan that
relate to his or her Deferral Account.
1.20 "Director" shall mean any member of the board of directors of any
Employer.
1.21 "Directors Fees" shall mean the total fees paid by any Employer in cash
during a Plan Year, including retainer fees and meetings fees, as
compensation for serving on the board of directors.
1.22 "Disability" shall mean a period during which a Participant is
"permanently and totally disabled" within the meaning of Code Section
22(e), as determined in the sole discretion of the Committee.
1.23 "Disability Benefit" shall mean the benefit set forth in Article 8.
1.24 "Election Form" shall mean the form 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.
1.25 "Employee" shall mean a person who is an employee of any Employer.
1.26 "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.
1.27 "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.
1.28 "First Plan Year" shall mean the period beginning November 1, 1999 and
ending December 31, 1999.
1.29 "Participant" shall mean any Employee or Director (i) who is selected
to participate in the Plan, (ii) who elects to participate in the Plan,
(iii) who signs a Plan Agreement, an Election Form and a Beneficiary
Designation Form, (iv) whose signed Plan Agreement, Election Form and
Beneficiary Designation Form are accepted by the Committee, (v) who
commences participation in the Plan, and (vi) whose Plan Agreement has
not terminated. A spouse or former spouse of a Participant shall not be
treated as a Participant in the Plan or have an account balance under
the Plan, even if he or she has an interest in the Participant's
benefits under the Plan as a result of applicable law or property
settlements resulting from legal separation or divorce.
1.30 "Plan" shall mean the Company's Deferred Compensation Plan, which shall
be evidenced by this instrument and by each Plan Agreement, as they may
be amended from time to time.
1.31 "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.
1.32 "Plan Year" shall, except for the First Plan Year, mean a period
beginning on January 1 of each calendar year and continuing through
December 31 of such calendar year.
1.33 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in
Article 6.
1.34 "Retirement", "Retire(s)" or "Retired" shall mean, with respect to an
Employee, severance from employment from all Employers for any reason
other than a leave of absence, death or Disability when the sum of the
Participant's age and Years of Service is equal to or greater than
fifty five (55).
1.35 "Retirement Benefit" shall mean the benefit set forth in Article 5.
1.36 "Short-Term Payout" shall mean the payout set forth in Section 4.1.
1.37 "Termination Benefit" shall mean the benefit set forth in Article 7.
1.38 "Termination of Employment" shall mean the severing of employment with
all Employers, or service as a Director of all Employers, voluntarily
or involuntarily, for any reason other than Retirement, Disability,
death or an authorized leave of absence. If a Participant is both an
Employee and a Director, a Termination of Employment shall occur only
upon the termination of the last of these positions held; provided,
however, that such a Participant may elect, at least one year before
Termination of Employment and in accordance with the policies and
procedures established by the Committee, to be treated for purposes of
this Plan as having experienced a Termination of Employment at the time
he or she ceases employment with an Employer as an Employee.
1.39 "Trust" shall mean one or more trusts established pursuant to that
certain Master Trust Agreement, dated as of November 1, 1999 between
the Company and the trustee named therein, as amended from time to
time.
1.40 "Trustee" shall mean the trustee named under the Trust.
1.41 "Unforeseeable Financial Emergency" shall mean an unanticipated
emergency that is caused by an event beyond the control of the
Participant that would result in severe financial hardship to the
Participant resulting from (i) a sudden and unexpected illness or
accident of the Participant, the Participant's spouse, or a dependent
of the Participant, (ii) a loss of the Participant's property due to
casualty, or (iii) such other extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant, all of the above as determined in the sole discretion of
the Committee.
1.42 "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
shall be treated as a full Plan Year for purposes of this definition,
even if it is only a partial Plan Year of participation.
1.43 "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.
Any partial year of employment shall not be counted.
ARTICLE 2
Selection, Enrollment, Eligibility
2.1 Selection by Committee. Participation in the Plan shall be limited to a
select group of management and highly compensated Employees and
Directors of the Employers, as determined by the Committee in its sole
discretion. From that group, the Committee shall select, in its sole
discretion, Employees and Directors to participate in the Plan.
2.2 Enrollment Requirements. As a condition to participation, each selected
Employee and Director shall complete, execute and return to the
Committee a Plan Agreement, an Election Form and a Beneficiary
Designation Form, all within 30 days after he or she is selected to
participate in the Plan. In addition, the Committee shall establish
from time to time such other enrollment requirements as it determines
in its sole discretion are necessary.
2.3 Eligibility; Commencement of Participation. Provided an Employee or
Director selected to participate in the Plan has met all enrollment
requirements set forth in this Plan and required by the Committee,
including returning all required documents to the Committee within the
specified time period, that Employee or Director shall commence
participation in the Plan on the first day of the month following the
month in which the Employee or Director completes all such enrollment
requirements. If an Employee or a Director fails to meet all such
requirements within the period required, in accordance with Section
2.2, that Employee or Director shall not be eligible to participate in
the Plan until the first day of the Plan Year following the delivery to
and acceptance by the Committee of the required documents.
2.4 Termination of Participation and/or Deferrals. If the Committee
determines in good faith that a Participant no longer qualifies as a
member of a select group of management or highly compensated employees,
as membership in such group is determined in accordance with Sections
201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee shall have the
right, in its sole discretion, to do one or more of the following: (i)
terminate any deferral election the Participant has made for the
remainder of the Plan Year in which the Participant's membership status
changes, (ii) prevent the Participant from making future deferral
elections, and (iii) immediately distribute the Participant's then
Account Balance as a Termination Benefit and terminate the
Participant's participation in the Plan.
ARTICLE 3
Deferral Commitments/Company Matching/Crediting/Taxes
3.1 Minimum Deferrals.
(a) Base Annual Salary, Bonus and Director's Fees. For each Plan
Year, a Participant may elect to defer, as his or her Annual
Deferral Amount, one or more of the following forms of
compensation: (i) Base Annual Salary; (ii) Bonus; and (iii)
Director's Fees. The Annual Deferral Amount for each
Participant shall not in total be less than $2,000 in any Plan
Year.
(b) Short Plan Year. Notwithstanding the foregoing, if a
Participant first becomes a Participant after the first day of
a Plan Year, or in the case of the First Plan Year, the
minimum Annual Deferral Amount for such Participant shall be
an amount equal to the product obtained by multiplying $2,000
by a fraction, the numerator of which is the number of full
months remaining in that Plan Year and the denominator of
which is 12.
3.2 Maximum Deferral.
(a) Base Annual Salary, Bonus and Directors Fees. For each Plan Year, a
Participant may elect to defer, as his or her Annual Deferral Amount, up to
the following maximum percentages for each of the following forms of
compensation:
Deferral Maximum Amount
Base Annual Salary 50%
Bonus 100%
Directors Fees 100%
Notwithstanding the foregoing, a Participant's total maximum Annual
Deferral Amount for the First Plan Year shall be limited to the amount of
compensation not yet earned by such Participant for the First Plan Year
determined as of the date the Participant submits a Plan Agreement and
Election Form to the Committee for acceptance. If a Participant commences
participation in the Plan after the first day of a Plan Year (other than
the First Plan Year), such Participant's Maximum Annual Deferral Amount
shall be limited in the same manner as the First Plan Year limitation.
3.3 Election to Defer; Effect of Election Form.
(a) Initial 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. For these elections to be
valid, the Election Form must be completed and signed by the Participant,
timely delivered to the Committee (in accordance with Section 2.2 above)
and accepted by the Committee.
(b) Subsequent Plan Years. For each succeeding Plan Year, an irrevocable
deferral election and such other elections as the Committee shall require
must be made by each Participant prior to the end of the preceding Plan
Year. The irrevocable deferral election shall be made by timely delivering
an Election Form to the Committee in accordance with its rules and
procedures. Failure to do so shall preclude a Participant from
participating in the Plan for that Plan Year.
3.4 Withholding of Annual Deferral Amounts. For each Plan Year, the total
Base Annual Salary portion of the Annual Deferral Amount shall be
withheld from each regularly scheduled Base Annual Salary paycheck in
equal amounts, as adjusted from time to time for increases and
decreases in Base Annual Salary. The Bonus and Directors Fees portion
of the Annual Deferral Amount shall be withheld at the time the Bonus
and Directors Fees are to be paid to the Participant, whether or not
this occurs during the Plan Year.
3.5 Company 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 Company Contribution Account. The amount so
credited to a Participant may be greater or less 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, if any, shall be credited as of the
last day of the Plan Year. If a Participant is not employed by an
Employer as of the last day of a Plan Year other than by reason of his
or her Retirement or death while employed, the Company Contribution
Amount for that Plan Year shall be zero.
3.6 Annual Company Matching Amount. A Participant's Annual Company Matching
Amount for any Plan Year shall be equal to (i) 50 % of the
Participant's Annual Deferral Amount for such Plan Year, up to an
amount that does not exceed 4 % of the Participant's Base Annual Salary
plus (ii) 25 % of the Participant's Annual Deferral Amount for such
Plan Year that exceeds 4 % of the Participant's Base Annual Salary, up
to an amount that does not exceed 6 % of the Participant's Base Annual
Salary. If a Participant is not employed by an Employer, or is no
longer providing services as a Director, as of the last day of a Plan
Year other than by reason of his or her Retirement or death, the Annual
Company Matching Amount for such Plan Year shall be zero. In the event
of Retirement or death, a Participant shall be credited with the Annual
Company Matching Amount for the Plan Year in which he or she Retires or
dies.
3.7 Investment of Trust Assets. The Trustee shall be authorized, upon
written instructions received from the Committee or investment manager
appointed by the Committee, to invest and reinvest the assets of the
Trust in accordance with the applicable Trust Agreement, including the
disposition of stock and reinvestment of the proceeds in one or more
investment vehicles designated by the Committee.
3.8 Vesting.
(a) A Participant shall at all times be 100% vested in his or her Deferral
Account and Company Matching Account.
(b) A Participant shall be vested in his or her Company Contribution Account in
accordance with the schedule set forth in his or her Plan Agreement.
(c) Notwithstanding anything to the contrary contained in Section 3.8(b), in
the event of a Change in Control, a Participant's Company Contribution
Account shall immediately become 100% vested (if it is not already vested
in accordance with the above vesting schedule).
(d) Notwithstanding subsection (c), the vesting schedule for a Participant's
Company Contribution Account shall not be accelerated 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
that all of a Participant's Company Contribution Account is not vested
pursuant to 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 30 business days of such a request an opinion from
an independent public accounting firm selected by the Company (the
"Accounting Firm") concluding that a limitation in the vested percentage
hereunder is necessary to avoid the limits of Code Section 280G. The
opinion shall include supporting calculations. The cost of such opinion
shall be paid for by the Company.
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) 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(c) below) to be used to determine the additional amounts to
be credited to his or her Account Balance for the first business day in
which the Participant commences participation in the Plan and continuing
thereafter for each subsequent business day in which the Participant
participates in the Plan, unless changed in accordance with the next
sentence. Commencing with the first business day that follows the
Participant's commencement of participation in the Plan and continuing
thereafter for each subsequent business day in which the Participant
participates in the Plan, 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 additional amounts to be credited 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 to the next
business day and continue thereafter for each subsequent business day in
which the Participant participates in the Plan, unless changed in
accordance with the previous sentence.
(b) Proportionate Allocation. In making any election described in Section
3.9(a) above, the Participant shall specify on the Election Form, in
increments of five percentage points (5%), the percentage of his or her
Account Balance to be allocated to a Measurement Fund (as if the
Participant was making an investment in that Measurement Fund with that
portion of his or her Account Balance).
(c Measurement Funds. The Participant may elect one or more of the following
measurement funds, based on certain mutual funds (the "Measurement Funds"),
for the purpose of crediting 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 calendar quarter that follows by
thirty (30) days the day on which the Committee gives Participants advance
written notice of such change.
(d) Crediting or Debiting Method. The performance of each elected Measurement
Fund (either positive or negative) will be determined by the Committee, in
its reasonable discretion, based on the performance of the Measurement
Funds themselves. A Participant's Account Balance shall be credited or
debited on a daily basis based on the performance of each Measurement Fund
selected by the Participant, as determined by the Committee in its sole
discretion, as though (i) a Participant's Account Balance were invested in
the Measurement Fund(s) selected by the Participant, in the percentages
applicable to such calendar quarter, as of the close of business on the
first business day of such calendar quarter, at the closing price on such
date; (ii) the portion of the Annual Deferral Amount that was actually
deferred during any calendar quarter was invested in the Measurement
Fund(s) selected by the Participant, in the percentages applicable to such
calendar quarter, no later than the close of business on the first business
day after the day on which such amounts are actually deferred from the
Participant's Base Annual Salary through reductions in his or her payroll,
at the closing price on such date; and (iii) any distribution made to a
Participant that decreases such Participant's Account Balance ceased being
invested in the Measurement Fund(s), in the percentages applicable to such
calendar quarter, no earlier than one business day prior to the
distribution, at the closing price on such date. The Participant's Annual
Company Matching Amount shall be credited to his or her Company Matching
Account for purposes of this Section 3.9(d) as of the close of business on
the first business day in February of the Plan Year following the Plan Year
to which it relates.
(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 to 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 Measurement Funds, 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's compensation, the
Participant's Employer(s) shall withhold from that portion of the
Participant's Base Annual Salary and Bonus 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 Matching Amounts. When a participant becomes vested in a portion of
his or her Company Matching Account, the Participant's Employer(s) shall
withhold from the Participant's Base Annual Salary and/or Bonus that is not
deferred, in a manner determined by the Employer(s), the Participant's
share of FICA and other employment taxes. If necessary, the Committee may
reduce the vested portion of the Participant's Company Matching Account in
order to comply with this Section 3.10.
(c) Distributions. The Participant's Employer(s) or the Trustee, as the case
may be, shall withhold from any payments made to a Participant under this
Plan all applicable federal, state and local income, employment and other
taxes required to be withheld in a manner to be determined in the sole
discretion of the Employer(s) or the Trustee.
ARTICLE 4
Short-Term Payout; Unforeseeable Financial Emergencies;
Withdrawal Election
4.1 Short-Term Payout. In connection with each election to defer an Annual
Deferral Amount, a Participant may irrevocably elect to receive a
future "Short-Term Payout" from the Plan with respect to such Annual
Deferral Amount. Subject to the Deduction Limitation, the Short-Term
Payout shall be a lump sum payment in an amount that is equal to the
Annual Deferral Amount and the Annual Company Matching Amount, plus
amounts credited or debited in the manner provided in Section 3.9 above
on those amounts, determined at the time that the Short-Term Payout
becomes payable (rather than the date of a Termination of Employment).
Subject to the Deduction Limitation and the other terms and conditions
of this Plan, each Short-Term Payout elected shall be paid out during a
60 day period commencing immediately on the first day of any Plan Year
designated by the Participant that is at least three Plan Years after
the Plan Year in which the Annual Deferral Amount is actually deferred.
By way of example, if a one year Short-Term Payout is elected for
Annual Deferral Amounts that are deferred in the Plan Year commencing
November 1, 1999, the three year Short-Term Payout would become payable
during a 60 day period commencing January 1, 2002.
4.2 Other Benefits Take Precedence Over Short-Term. Should an event occur
that triggers a benefit under Article 5, 6, 7 or 8, any Annual Deferral
Amount, plus amounts credited or debited thereon, that is subject to a
Short-Term Payout 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.
4.3 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies.
If the Participant experiences an Unforeseeable Financial Emergency,
the Participant may petition the Committee to (i) suspend any deferrals
required to be made by a Participant and/or (ii) receive a partial or
full payout from the Plan. The payout shall not exceed the lesser of
the Participant's Account Balance, calculated as if such Participant
were receiving a Termination Benefit, or the amount reasonably needed
to satisfy the Unforeseeable Financial Emergency. If, subject to the
sole discretion of the Committee, the petition for a suspension and/or
payout is approved, suspension shall take effect upon the date of
approval and any payout shall be made within 60 days of the date of
approval. The payment of any amount under this Section 4.3 shall not be
subject to the Deduction Limitation.
4.4 Withdrawal Election. A Participant (or, after a Participant's death,
his or her Beneficiary) may elect, at any time, to withdraw all but not
less than all of his or her Account Balance, calculated as if there had
occurred a Termination of Employment as of the day of the election,
less a withdrawal penalty equal to 10% of such amount (the net amount
shall be referred to as the "Withdrawal Amount"). This election can be
made at any time, before or after Retirement, Disability, death or
Termination of Employment, and whether or not the Participant (or
Beneficiary) is in the process of being paid pursuant to an installment
payment schedule. If made before Retirement, Disability or death, a
Participant's Withdrawal Amount shall be his or her Account Balance
calculated as if there had occurred a Termination of Employment as of
the day of the election. No partial withdrawals of the Withdrawal
Amount shall be allowed. The Participant (or his or her Beneficiary)
shall make this election by giving the Committee advance written notice
of the election in a form determined from time to time by the
Committee. The Participant (or his or her Beneficiary) shall be paid
the Withdrawal Amount within 60 days of his or her election. Once the
Withdrawal Amount is paid, the Participant's participation in the Plan
shall terminate and the Participant shall not be eligible to
participate in the Plan for the remainder of the Plan Year of such
election and the next Plan Year. The payment of this Withdrawal Amount
shall not be subject to the Deduction Limitation.
ARTICLE 5
Retirement Benefit
5.1 Retirement Benefit. Subject to the Deduction Limitation, a
Participant who Retires shall receive, as a Retirement Benefit,
his or her Account Balance in accordance with the provisions contained
herein.
5.2 Payment of Retirement Benefit. A Participant, in connection with his or
her commencement of participation in the Plan, shall elect on an
Election Form to receive the Retirement Benefit in a lump sum or
pursuant to an Annual Installment Method of 2, 5, 10 or 15 years. The
Participant may annually change his or her election to an allowable
alternative payout period by submitting a new Election Form to the
Committee, provided that any such Election Form is submitted at least 1
year prior to the Participant's Retirement and is accepted by the
Committee in its sole discretion. The Election Form most recently
accepted by the Committee shall govern the payout of the Retirement
Benefit. If a Participant does not make any election with respect to
the payment of the Retirement Benefit, then such benefit shall be
payable in a lump sum. If elected, the lump sum payment shall be made
no later than 60 days after the day on which the Participant Retires.
If elected, installment payments shall commence no later than 60 days
after the last day of the Plan Year in which the Participant Retires.
Any payment made shall be subject to the Deduction Limitation.
5.3 Death Prior to Completion of Retirement Benefit. If a Participant dies
after Retirement but before the Retirement Benefit is paid in full, the
Participant's unpaid Retirement Benefit payments shall continue and
shall be paid to the Participant's Beneficiary (a) over the remaining
number of years and in the same amounts as that benefit would have been
paid to the Participant had the Participant survived, or (b) in a lump
sum, if requested by the Beneficiary and allowed in the sole discretion
of the Committee, that is equal to the Participant's unpaid remaining
Account Balance.
ARTICLE 6
Pre-Retirement Survivor Benefit
6.1 Pre-Retirement Survivor Benefit. Subject to the Deduction Limitation,
the Participant's Beneficiary shall receive a Pre-Retirement Survivor
Benefit equal to the Participant's Account Balance if the Participant
dies before he or she Retires, experiences a Termination of Employment
or suffers a Disability.
6.2 Payment of Pre-Retirement Survivor Benefit. A Participant, in
connection with his or her commencement of participation in the Plan,
shall elect on an Election Form whether the Pre-Retirement Survivor
Benefit shall be received by his or her Beneficiary in a lump sum or
pursuant to an Annual Installment Method of 2, 5, 10 or 15 years. The
Participant may annually change this election to an allowable
alternative payout period by submitting a new Election Form to the
Committee, which form must be accepted by the Committee in its sole
discretion. The Election Form most recently accepted by the Committee
prior to the Participant's death shall govern the payout of the
Participant's Pre-Retirement Survivor Benefit. If a Participant does
not make any election with respect to the payment of the Pre-Retirement
Survivor Benefit, then such benefit shall be paid in a lump sum.
Despite the foregoing, if the Participant's Account Balance at the time
of his or her death is less than $25,000, payment of the Pre-Retirement
Survivor Benefit may be made, in the sole discretion of the Committee,
in a lump sum or pursuant to an Annual Installment Method of not more
than 5 years. The lump sum payment shall be made, or installment
payments shall commence, no later than 60 days after the last day of
the Plan Year in which the Committee is provided with proof that is
satisfactory to the Committee of the Participant's death. Any payment
made shall be subject to the Deduction Limitation.
ARTICLE 7
Termination Benefit
7.1 Termination Benefit. Subject to the Deduction Limitation, the
Participant shall receive a Termination Benefit, which shall be equal
to the Participant's Account Balance if a Participant experiences a
Termination of Employment prior to his or her Retirement, death or
Disability.
7.2 Payment of Termination Benefit. If the Participant's Account Balance at
the time of his or her Termination of Employment is less than $25,000,
payment of his or her Termination Benefit shall be paid in a lump sum.
If his or her Account Balance at such time is equal to or greater than
that amount, the Committee, in its sole discretion, may cause the
Termination Benefit to be paid in a lump sum or pursuant to an Annual
Installment Method of 5 years. The lump sum payment shall be made, or
installment payments shall commence, no later than 60 days after the
last day of the Plan Year in which the Participant experiences the
Termination of Employment. Any payment made shall be subject to the
Deduction Limitation.
ARTICLE 8
Disability Waiver and Benefit
8.1 Disability Waiver.
(a) Waiver of Deferral. A Participant who is determined by the
Committee to be suffering from a Disability shall be excused
from fulfilling that portion of the Annual Deferral Amount
commitment that would otherwise have been withheld from a
Participant's Base Annual Salary, Bonus and/or Directors Fees
for the remainder of the Plan Year during which the
Participant first suffers a Disability. During the period of
Disability, the Participant shall not be allowed to make any
additional deferral elections, but will continue to be
considered a Participant for all other purposes of this Plan.
(b) Return to Work. If a Participant returns to employment, or
service as a Director, with an Employer, after a Disability
ceases, the Participant may elect to defer an Annual Deferral
Amount for the Plan Year following his or her return to
employment or service 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.
8.2 Continued Eligibility; Disability Benefit. A Participant suffering a
Disability shall, for benefit purposes under this Plan, continue to be
considered to be employed, or in the service of an Employer as a
Director, and shall be eligible for the benefits provided for in
Articles 4, 5, 6 or 7 in accordance with the provisions of those
Articles. Notwithstanding the above, the Committee may, in its sole and
absolute discretion and for purposes of this Plan only, and shall in
the case of a Participant who is otherwise eligible to Retire, deem the
Participant to have experienced a Termination of Employment, or in the
case of a Participant who is eligible to Retire, to have Retired, at
any time (or in the case of a Participant who is eligible to Retire, as
soon as practicable) after such Participant is determined to be
suffering a Disability, in which case the Participant shall receive a
Disability Benefit equal to his or her Account Balance at the time of
the Committee's determination; provided, however, that should the
Participant otherwise have been eligible to Retire, he or she shall be
paid in accordance with Article 5. The Disability Benefit shall be paid
in a lump sum within 60 days of the Committee's exercise of such right.
Any payment made shall be subject to the Deduction Limitation.
ARTICLE 9
Beneficiary Designation
9.1 Beneficiary. Each Participant shall have the right, at any time, to
designate one or more Beneficiaries to receive benefits payable under
the Plan 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.
9.2 Beneficiary Designation; Change; Spousal Consent. A Participant shall
designate a 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
designation by completing, signing and otherwise complying with the
terms of the Beneficiary Designation Form and the Committee's rules and
procedures, as in effect from time to time. If the Participant names
someone other than his or her spouse as a Beneficiary, a spousal
consent, in the form designated by the Committee, must be signed by
that Participant's spouse and returned to the Committee. Upon the
acceptance by the Committee of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be 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.
9.3 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.
9.4 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided in Sections 9.1, 9.2 and 9.3 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.
9.5 Doubt as to Beneficiary. If the Committee has any doubt as to the
proper Beneficiary to receive payments pursuant to this Plan, the
Committee shall have the right, exercisable in its discretion, to cause
the Participant's Employer to withhold such payments until this matter
is resolved to the Committee's satisfaction.
9.6 Discharge of Obligations. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge 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.
ARTICLE 10
Leave of Absence
10.1 Paid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take a paid leave of absence
from the employment of the Employer, the Participant shall continue to
be considered employed by the Employer and the Annual Deferral Amount
shall continue to be withheld during such paid leave of absence in
accordance with Section 3.3.
10.2 Unpaid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take an unpaid leave of
absence from the employment of the Employer, the Participant shall
continue to be considered employed by the Employer and the Participant
shall be excused from making deferrals until the earlier of the date
the leave of absence expires or the Participant returns to a paid
employment status. Upon such expiration or return, deferrals shall
resume for the remaining portion of the Plan Year in which the
expiration or return occurs, based on the deferral election, if any,
made for that Plan Year. If no election was made for that Plan Year, no
deferral shall be withheld.
ARTICLE 11
Termination, Amendment or Modification
11.1 Termination. Each Employer reserves the right to discontinue its
sponsorship of the Plan and/or to terminate the Plan at any time with
respect to one or more or all of its participating Employees and
Directors, by action of its board of directors. Upon the termination of
the Plan with respect to any Employer, the Plan Agreements of the
affected Participants who are employed by that Employer, or in the
service of that Employer as Directors, shall terminate and their
Account Balances, determined as if they had experienced a Termination
of Employment on the date of Plan termination or, if Plan termination
occurs after the date upon which a Participant was eligible to Retire,
then with respect to that Participant as if he or she had Retired on
the date of Plan termination, shall be paid to the Participants as
follows: Prior to a Change in Control, if the Plan is terminated with
respect to all of its Participants, an Employer shall have the right,
in its sole discretion, and notwithstanding any elections made by the
Participant, to pay such benefits in a lump sum or pursuant to an
Annual Installment Method of up to 15 years, with amounts credited and
debited during the installment period as provided herein. If the Plan
is terminated with respect to less than all of its Participants, an
Employer shall be required to pay such benefits in a lump sum. After a
Change in Control, the Employer shall be required to pay such benefits
in a lump sum. The termination of the Plan shall not adversely affect
any Participant or Beneficiary who has become entitled to the payment
of any benefits under the Plan as of the date of termination; provided
however, that the Employer shall have the right to accelerate
installment payments without a premium or prepayment penalty by paying
the Account Balance in a lump sum or pursuant to an Annual Installment
Method using fewer years (provided that the present value of all
payments that will have been received by a Participant at any given
point of time under the different payment schedule shall equal or
exceed the present value of all payments that would have been received
at that point in time under the original payment schedule).
11.2 Amendment. Any Employer may, at any time, amend or modify the Plan in
whole or in part with respect to that Employer by the action of its
board of directors; provided, however, that: (i) no amendment or
modification shall decrease or restrict the value of a Participant's
Account Balance in existence at the time the amendment or modification
is made, calculated as if the Participant had experienced a Termination
of Employment as of the effective date of the amendment or modification
or, if the amendment or modification occurs after the date upon which
the Participant was eligible to Retire, the Participant had Retired as
of the effective date of the amendment or modification, and (ii) no
amendment or modification of this Section 11.2 or Section 12.2 of the
Plan shall be effective. The amendment or modification of the Plan
shall not affect any Participant or Beneficiary who has become entitled
to the payment of benefits under the Plan as of the date of the
amendment or modification; provided, however, that the Employer shall
have the right to accelerate installment payments by paying the Account
Balance in a lump sum or pursuant to an Annual Installment Method using
fewer years (provided that the present value of all payments that will
have been received by a Participant at any given point of time under
the different payment schedule shall equal or exceed the present value
of all payments that would have been received at that point in time
under the original payment schedule).
11.3 Plan Agreement. Despite the provisions of Sections 11.1 and 11.2 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 consent of the Participant.
11.4 Effect of Payment. The full payment of the applicable benefit under
Articles 4, 5, 6, 7 or 8 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 12
Administration
12.1 Committee Duties. Except as otherwise provided in this Article 12, this
Plan shall be administered by a Committee which shall consist of the
Board, or such 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
interpretations of this Plan, as may arise in connection with the Plan.
Any individual serving on the Committee who is a 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.
12.2 Administration Upon Change In Control. For purposes of this Plan, the
Company shall be the "Administrator" at all times prior to the
occurrence of a Change in Control. Upon and after the occurrence of a
Change in Control, the "Administrator" shall be an independent third
party selected by the Trustee and approved by the individual who,
immediately prior to such event, was the Company's Chief Executive
Officer or, if not so identified, the Company's highest ranking officer
(the "Ex-CEO"). The Administrator shall have the discretionary power to
determine all questions arising in connection with the administration
of the Plan and the interpretation of the Plan and Trust including, but
not limited to benefit entitlement determinations; provided, however,
upon and after the occurrence of a Change in Control, the Administrator
shall have no power to direct the investment of Plan or Trust assets or
select any investment manager or custodial firm for the Plan or Trust.
Upon and after the occurrence of a Change in Control, the Company must:
(1) pay all reasonable administrative expenses and fees of the
Administrator; (2) indemnify the Administrator against any costs,
expenses and liabilities including, without limitation, attorney's fees
and expenses arising in connection with the performance of the
Administrator hereunder, except with respect to matters resulting from
the gross negligence or willful misconduct of the Administrator or its
employees or agents; and (3) supply full and timely information to the
Administrator or all matters relating to the Plan, the Trust, the
Participants and their Beneficiaries, the Account Balances of the
Participants, the date of circumstances of the Retirement, Disability,
death or Termination of Employment of the Participants, and such other
pertinent information as the Administrator may reasonably require. Upon
and after a Change in Control, the Administrator may be terminated (and
a replacement appointed) by the Trustee only with the approval of the
Ex-CEO. Upon and after a Change in Control, the Administrator may not
be terminated by the Company.
12.3 Agents. In the administration of this Plan, the Committee may, from
time to time, employ agents and delegate to them such administrative
duties as it sees fit (including acting through a duly appointed
representative) and may from time to time consult with counsel who may
be counsel to any Employer.
12.4 Binding Effect of Decisions. The decision or action of the
Administrator 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.
12.5 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 gross negligence or willful misconduct by the Committee, any of its
members, any such Employee or the Administrator.
12.6 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 compensation of its
Participants, the date and circumstances of the Retirement, Disability,
death or 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 13
Other Benefits and Agreements
13.1 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 supplement and shall not supersede, modify or amend any
other such plan or program except as may otherwise be expressly
provided.
ARTICLE 14
Claims Procedures
14.1 Presentation of Claim. Any Participant or Beneficiary (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 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.
14.2 Notification of Decision. The Committee shall consider a Claimant's
claim within a reasonable time, not to exceed 60 days from the date the
Committee received written notice of the claim, and shall notify the
Claimant in writing:
(a) that the Claimant's requested determination has been made, and that the
claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in whole or in part,
to the Claimant's requested determination, and such notice shall include
the following:
(i the specific reason(s) for the denial of the claim, or any part of it;
(ii) specific reference(s) to pertinent provisions of the Plan upon which such
denial was based;
(iii)a description of any additional material or information necessary for the
Claimant to perfect the claim, and an explanation of why such material or
information is necessary; and
(iv) an explanation of the claim review procedure set forth in Section 14.3
below.
14.3 Review of a Denied Claim. Within 60 days after receiving a notice from
the Committee that a claim has been denied, in whole or in part, a
Claimant (or the Claimant's duly authorized representative) may file
with the Committee a written request for a review of the denial of the
claim. Thereafter, but not later than 30 days after the review
procedure began, the Claimant (or the Claimant's duly authorized
representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole discretion, may
grant.
14.4 Decision on Review. The Committee shall render its decision on review
promptly, and not later than 60 days after the filing of a written
request for review of the denial, unless a hearing is held or other
special circumstances require additional time, in which case the
Committee's decision must be rendered within 120 days after such date.
Such decision must contain the following:
(a) the specific reasons for the decision;
(b) the specific reference(s) to the pertinent Plan provisions upon
which the decision was based; and
(c) such other matters as the Committee deems relevant.
14.5 Legal Action. A Claimant's compliance with the foregoing provisions of
this Article 14 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 15
Trust
15.1 Establishment of the Trust. The Company shall establish the Trust, and
each Employer shall at least annually transfer to the Trust such assets
as the Employer determines, in its sole discretion, are necessary to
provide, on a present value basis, for its respective future
liabilities created with respect to the Annual Deferral Amounts,
Company Contribution Amounts, and Company Matching Amounts for such
Employer's Participants for all periods prior to the transfer, as well
as any debits and credits to the Participants' Account Balances for all
periods prior to the transfer, taking into consideration the value of
the assets in the trust at the time of the transfer.
15.2 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.
15.3 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 16
Miscellaneous
16.1 Status of Plan. The Plan is intended to be a nonqualified plan within
the meaning of Code Section 401(a) and 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 to the extent
possible in a manner consistent with this intent.
16.2 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.
16.3 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.
16.4 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, any amounts payable hereunder. 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.
16.5 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 a 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, either as an
Employee or a Director, or to interfere with the right of any Employer
to discipline or discharge the Participant at any time.
16.6 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
payments of benefits hereunder, including but not limited to taking
such physical examinations as the Committee may deem necessary.
16.7 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.
16.8 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.
16.9 Governing Law. Subject to ERISA, the provisions of this Plan
shall be construed and interpreted according to the internal
laws of the State of Colorado without regard to its conflicts of
laws principles.
16.10 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:
Chief Financial Officer
Wild Oats Markets, Inc.
3376 Mitchell Lane
Boulder, Colorado 80301
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 registered or certified mail, to the last known address of
the Participant. 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.
16.11 Successors. This Plan shall be binding upon and inure to the benefit of
all the parties hereto, and, to the extent permitted by this Plan, to
their respective heirs, legal representatives, successors, and assigns.
16.12 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.
16.13 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.
16.14 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
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.
16.15 Court Order. The Committee is authorized to make any payments directed
by court order in any action in which the Plan or the Committee has
been named as a party. In addition, if a court determines that a spouse
or former spouse of a Participant has an interest in the Participant's
benefits under the Plan in connection with a property settlement or
otherwise, the Committee, in its sole discretion, shall have the right,
notwithstanding any election made by a Participant, to immediately
distribute the spouse's or former spouse's interest in the
Participant's benefits under the Plan to that spouse or former spouse.
16.16 Distribution in the Event of Taxation.
(a) In General. If, for any reason, all or any portion of a Participant's
benefits under this Plan becomes taxable to the Participant prior to
receipt, a Participant may petition the Committee before a Change in
Control, or the Trustee after a Change in Control, for a distribution of
that portion of his or her benefit that has become taxable. Upon the grant
of such a petition, which grant shall not be unreasonably withheld (and,
after a Change in Control, shall be granted), a Participant's Employer
shall distribute to the Participant immediately available funds in an
amount equal to the taxable portion of his or her benefit (which amount
shall not exceed a Participant's unpaid Account Balance under the Plan). If
the petition is granted, the tax liability distribution shall be made
within 90 days of the date when the Participant's petition is granted. Such
a distribution shall affect and reduce the benefits to be paid under this
Plan.
(b) Trust. If the Trust terminates in accordance with its terms, and benefits
are distributed from the Trust to a Participant in accordance therewith,
the Participant's benefits under this Plan shall be reduced to the extent
of such distributions.
16.17 Insurance. The Employers, on their own behalf or on behalf of the
Trustee, 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 Trustee may choose. The Employers or the Trustee, as the
case may be, shall be the sole owner and beneficiary of any such
insurance. The 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.
16.18 Legal Fees To Enforce Rights After Change in Control. The Company and
each Employer is aware that upon the occurrence of a Change in Control,
the Board or the board of directors of a Participant's Employer (which
might then be composed of new members) or a shareholder of the Company
or the Participant's Employer, or of any successor corporation might
then cause or attempt to cause the Company, the Participant's Employer
or such successor to refuse to comply with its obligations under the
Plan and might cause or attempt to cause the Company or the
Participant's Employer to institute, or may institute, litigation
seeking to deny Participants the benefits intended under the Plan. In
these circumstances, the purpose of the Plan could be frustrated.
Accordingly, if, following a Change in Control, it should appear to any
Participant that the Company, the Participant's Employer or any
successor corporation has failed to comply with any of its obligations
under the Plan or any agreement thereunder or, if the Company, such
Employer or any other person takes any action to declare the Plan void
or unenforceable or institutes any litigation or other legal action
designed to deny, diminish or to recover from any Participant the
benefits intended to be provided, then the Company and the
Participant's Employer irrevocably authorize such Participant to retain
counsel of his or her choice at the expense of the Company and the
Participant's Employer (who shall be jointly and severally liable) to
represent such Participant in connection with the initiation or defense
of any litigation or other legal action, whether by or against the
Company, the Participant's Employer or any director, officer,
shareholder or other person affiliated with the Company, the
Participant's Employer or any successor thereto in any jurisdiction.
IN WITNESS WHEREOF, the Company has signed this Plan document as of __________,
1999.
"Company"
Wild Oats Markets, Inc., a Delaware corporation
By: /s/
Title: _________________________________