Exhibit 10.1
WMS INDUSTRIES INC.
NONQUALIFIED DEFERRED COMPENSATION
PLAN
Effective December 1, 2003
ARTICLE I
INTRODUCTION
1.1
Name and Purpose. WMS Industries Inc. (the
“Company”) hereby establishes the WMS Industries Inc.
Nonqualified Deferred Compensation Plan, as set forth herein (the
“Plan”), for the benefit of Eligible Individuals. The
purpose of the Plan is to provide Eligible Individuals with the
opportunity to defer compensation on a pre-tax basis and to receive
Company contributions. The Plan is not intended to be
“qualified” under section 401(a) of the Code; rather,
the Plan is intended to be a deferred compensation plan for
non-employee directors and a select group of management and highly
compensated employees, as described in Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA. The Company intends that the Plan
(and any grantor trust described in Article VI) shall be treated as
unfunded for tax purposes and for purposes of Title I of ERISA. An
Employer’s obligations hereunder, if any, to a Participant
(or to a Participant’s Beneficiary) shall be unsecured and
shall be a mere promise by the Company to make payments hereunder
in the future. A Participant (or the Participant’s
Beneficiary) shall be treated as a general, unsecured creditor of
the Company.
1.2
Effective Date and Plan Year. The Effective Date of the Plan
is December 1, 2003. The Plan will be administered on the
basis of a Plan Year. The first Plan Year begins on
December 1, 2003 and ends on December 31, 2003. All
subsequent Plan Years will be the 12-month period beginning on each
January 1 and ending on each December 31.
1
ARTICLE II
DEFINITIONS
2.1
“Accounting Date” means each date that the New
York Stock Exchange is open for business.
2.2
“Beneficiary” means any person, entity, or any
combination thereof the Participant names in a Participation
Agreement as his or her beneficiary to receive benefits under this
Plan in the event of the Participant’s death, or in the
absence of any such designation, the Participant’s estate. A
Participant may amend his or her Participation Agreement to name a
new Beneficiary at any time.
2.3
“Board” means the Board of Directors of the
Company.
2.4
“Cause” means
that the Participant has engaged in an act of willful misconduct,
gross negligence, fraud or moral turpitude, as determined by the
Company in its sole discretion.
2.5
“Change in
Control” means the occurrence of any of the following
events: (i) during any period of two consecutive years,
individuals who at the beginning of such period constitute the
entire Board shall cease for any reason to constitute a majority
thereof unless the election, or nomination for election by the
Company’s stockholders, of each new director was approved by
a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of such period; (ii) the
shareholders of the Company approve any liquidation of the Company
or any sale or disposition of 50% or more of the assets of the
Company; or (iii) the shareholders of the Company approve any
merger or consolidation to which the Company is a party (other than
a merger with a wholly-owned subsidiary of the Company) as a result
of which the persons who were shareholders of the Company
immediately prior to the effective date of the merger or
consolidation shall have beneficial ownership of less than 50% of
the combined voting power for election of directors of the
surviving corporation following the effective date of such merger
or consolidation.
2.6
“Code” means the
Internal Revenue Code of 1986, as amended.
2.7
“Committee” means the Committee appointed by the
Board to administer the Plan pursuant to
Article VIII.
2.8
“Company” means WMS Industries Inc., a Delaware
corporation, and its successors.
2.9
“Company
Contributions” means the matching and/or profit sharing
contributions made by the Company on behalf of a Participant
pursuant to Article V.
2.10
“Compensation” means the total cash compensation
paid to a Participant for services rendered to an Employer as an
employee (as reported on Form W-2) or as a Director (as
2
reported on Form 1099) for a
Plan Year, with any exclusions or inclusions that the Committee may
determine in its discretion.
2.11
“Deferral Account” means the account maintained
by the Committee to record a Participants’ accrued benefit
under the Plan.
2.12
“Director” means a non-employee member of the
Company’s Board.
2.13
“Disability” means that a Participant has been
determined to be “disabled” under the Company’s
long-term disability plan maintained for employees generally;
provided, however, that if there is no such plan at the time, the
Participant shall be considered “disabled” if he or she
is entitled to collect disability benefits from the Social Security
Administration.
2.14
“Earnings” means
the amount of earnings or losses credited or debited to each
Participant’s Deferral Account pursuant to Section 4.3
of the Plan.
2.15
“Effective Date” means December 1,
2003.
2.16
“Eligible
Individual” means an Employee or a Director who has been
selected to participate in the Plan in accordance with
Section 3.1.
2.17
“Employee” means
a management or highly compensated employee of an Employer who is
scheduled to receive Compensation of at least $200,000 during a
Plan Year (assuming targeted bonuses are earned).
2.18
“Employer” means the Company and any subsidiary
or affiliate of that Company that, with the consent of the Company,
adopts the Plan for the benefit of its Eligible
Employees.
2.19
“ERISA” means the
Employee Retirement Income Security Act of 1974, as
amended.
2.20
“Participant”
means an Eligible Individual who has executed a Participation
Agreement.
2.21
“Participation Agreement” means the agreement
executed by an Eligible Individual that includes provisions for the
Eligible Individual’s election to defer, the Eligible
Individual’s Beneficiary designation, and the Eligible
Individual’s investment designation.
2.22
“Plan Year” means the calendar year.
2.23
“Qualified Plan” means the WMS Industries Inc.
401(k) Retirement Savings Plan for Non-Union Employees, or its
successor.
3
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1
Eligibility. Before the beginning of each Plan Year, the
Committee will designate the Directors and Employees who are
eligible to participate in the Plan during such Plan Year. An
Eligible Individual’s eligibility to make a deferral to the
Plan in any given Plan Year does not guarantee that individual the
right to make a deferral in any subsequent Plan Year.
3.2
Participation and Cessation of
Participation. An Eligible Individual for any Plan Year may
make a deferral election on a timely basis as described in
Section 4.1, and if the Eligible Individual makes such a
deferral election, he or she shall become a Participant and shall
remain a Participant until he or she has received a distribution of
his or her entire Deferral Account. A Participant in the Plan who
separates from service with the Company and all of its subsidiaries
and affiliates for any reason will cease to be eligible to defer
Compensation under this Plan and will become entitled to
distributions in accordance with Article VII.
4
ARTICLE IV
ENROLLMENT AND DEFERRAL ELECTIONS
4.1
Participant Elections to Defer. Each Eligible Individual who
intends to make an election to defer shall indicate on a
Participation Agreement that portion of his or her Compensation (if
any) that shall be deferred hereunder, in accordance with the
following:
(a) Limits
Established By Committee: All deferrals under the Plan shall be
subject to limits established from time to time by the Committee in
its discretion, including (but not limited to): (i) limitations on
the amounts permitted to be deferred; (ii) limitations on the
sources and timing and form of deferrals for all or particular
Participants; and (iii) other terms and conditions regarding
deferrals under the Plan. Any such limits may be set forth in
election forms, instructions or other policies established by the
Committee, which may be, but need not be, set forth in
writing.
(b)
Timing of Elections. No later than
December 1 of the preceding Plan Year, an Eligible Individual may
make an election to defer a portion of his or her Compensation that
otherwise would be payable in the following Plan Year; provided,
however, that a deferral election made in the 2003 Plan Year
applicable to Compensation payable in the 2004 Plan Year may be
made by December 15, 2003. In the event a Director or Employee
first becomes an Eligible Individual after the first day of a Plan
Year, such Eligible Individual may make an election within thirty
(30) days after the date on which he or she first became an
Eligible Individual in order to defer Compensation for such Plan
Year. An Eligible Individual may make an election to defer by
completing a Participation Agreement and filing it with the
Committee. An election to defer shall remain in effect only for the
Plan Year specified in the Participation Agreement. Once filed, the
Participation Agreement is irrevocable, subject only to the
one-time redeferral provision of Section 7.2. An election to
defer shall only be effective with respect to Compensation earned
after the date the Participation Agreement is filed with the
Committee.
(c) Period of
Deferral. Each election to defer made by an Eligible Individual
shall include an election of the date on which the amount of such
deferral (together with Earnings thereon) will be distributed. Such
date shall be no earlier than January 1 of the third Plan Year
following the Plan Year to which the election to defer
relates.
4.2
Deferral Account. The Committee shall maintain a Deferral
Account for each Participant. A Participant’s Deferral
Account shall include a subaccount for each deferral made under the
Plan and any Company Contributions made to the Participant under
Article V of the Plan. Each such subaccount shall reflect:
(i) any amount deferred or contributed during a Plan Year,
(ii) any amounts distributed during a Plan Year, and
(iii) the total Earnings on the Deferral Account described in
Section 4.3 for a Plan Year. Deferred Compensation shall be
credited to
5
Participant’s subaccounts
as soon as practicable following the date the Compensation would
otherwise have been paid to the Participant but for his or her
deferral election. A Participant’s Deferral Account shall be
nonforfeitable at all times (except as otherwise provided in
Section 5.3).
4.3
Investment of Deferral
Account. A Participant may direct the deemed investment of his
or her Deferral Account among investment alternatives determined by
the Committee from time to time (collectively, the
“Measurement Funds”). Investment elections may be
changed by the Participant (but only among such Measurement Funds)
on such date and in such manner as determined by the Committee in
its sole discretion. A Participant’s Deferral Account shall
be credited or debited daily based on the performance of each
Measurement Fund selected by the Participant, as though
(i) the Participant’s Compensation deferrals were
invested in the Measurement Fund(s) as of the date that they are
credited to the Participant’s Deferral Account; and
(ii) any distributions made to the Participant that decrease
the Participant’s Deferral Account balance ceased
being
