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Exhibit 10.6
THE EXECUTIVE NONQUALIFIED DEFINED BENEFIT
PLAN
PLAN DOCUMENT
THE EXECUTIVE NONQUALIFIED
DEFINED BENEFIT PLAN
Section 1. Purpose:
By execution of the Adoption Agreement, the Employer has adopted
the Plan set forth herein to provide retirement benefits to certain
management Employees or Independent Contractors of the Employer.
The Plan is intended to be a nonqualified deferred compensation
plan that complies with the provisions of Section 409A of the
Internal Revenue Code (the "Code"). The Plan is also intended to be
an unfunded plan maintained primarily for the purpose of providing
deferred compensation benefits for a select group of management or
highly compensated employees under Sections 201(2), 301(a)(3)
and 401(a)(1) of the Employee Retirement Income Security Act of
1974 ("ERISA") and independent contractors. Notwithstanding any
other provision of this Plan, this Plan shall be interpreted,
operated and administered in a manner consistent with these
intentions.
Section 2. Definitions:
As used in the Plan, including this Section 2, references
to one gender shall include the other, and unless otherwise
indicated by the context:
2.1 "Accrued Benefit" means the amount of the annual
benefit accrued by a Participant as of any date.
2.2 "Active Participant" means an Employee or Independent
Contractor who is actively participating in the Plan according to
Section 3. An Employee or Independent Contractor shall become
a Participant as of any date determined by the Committee. A
Participant whose Service with the Employer is terminated and who
later returns to Service with the Employer shall be treated as a
new Employee or Independent Contractor, as applicable, for
purposes of eligibility to participate in the
Plan with respect to Service following his return to
Service.
2.3 "Actuarial Equivalent" means benefits of equal
Present Value.
2.4 "Adoption Agreement" means the written
agreement pursuant to which the Employer adopts the Plan. The
Adoption Agreement is a part of the Plan as applied to the
Employer.
2.5 "Beneficiary" means the person or persons
entitled to any survivor benefits payable under the Plan, as
provided in Section 11.
2.6 "Benefit Formula" means the formula used in
determining the Accrued Benefit of the Participant as designated in
Section 4.2 of the Adoption Agreement.
2.7 "Board" means the Board of Directors of the
Company, if the Company is a corporation. If the Company is not a
corporation, "Board" shall mean the Company.
2.8 "Change in Control Event" means an event
described in Section 409A(a)(2)(A)(v) of the Code (or any
successor provision thereto) and the regulations thereunder.
2.9 "Committee" means the persons or entity
designated in the Adoption Agreement to administer the Plan. If the
Committee designated in the Adoption Agreement is unable to serve,
the Employer shall satisfy the duties of the Committee provided for
in Section 7.
2.10 "Company" means the company designated in the
Adoption Agreement as such.
2.11 "Disabled" means Disabled within the meaning
of Section 409A of the Code and the regulations thereunder.
Generally, this means that the Participant is unable to engage in
any substantial gainful activity by reason of any medically
determinable physical or
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mental impairment which can be expected to result
in death or can be expected to last for a continuous period of not
less than 12 months, or is, by reason of any medically determinable
physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for a
period of not less than three months under an accident and health
plan covering Employees of the Employer.
2.12 "Early Retirement Date" means the 1st day of
the month on or after the date a Participant has satisfied the
criteria for Early Retirement Eligibility.
2.13 "Early Retirement Eligibility" means the
criteria described in the Adoption Agreement.
2.14 "Effective Date" shall be the date designated
in the Adoption Agreement.
2.15 "Employee" means an individual in the Service
of the Employer if the relationship between him and the Employer is
the legal relationship of employer and employee and if the
individual is one of the select group of management or highly
compensated employees of the Employer. An individual shall cease to
be an Employee upon the Employee’s separation from
Service.
2.16 "Employer" means the Company, as identified
in the Adoption Agreement, and any Participating Employer which
adopts this Plan. An Employer may be a corporation, a limited
liability company, a partnership or sole proprietorship.
2.17 "Entry Date" means the date determined by the
Committee that a Participant is eligible to participate in the
Plan.
2.18 "Grandfathered Amounts" means, if applicable,
Plan benefits that were earned and vested as of December 31,
2004 within the meaning of Section 409A of the Code and
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regulations thereunder. Grandfathered Amounts
shall be subject to the terms designated in the Adoption
Agreement.
2.19 "Inactive Participant" means a Participant
who has an Accrued Benefit and who is not an Active
Participant.
2.20 "Independent Contractor" means an individual
in the Service of the Employer if the relationship between the
individual and the Employer is not the legal relationship of
employer and employee. An individual shall cease to be an
Independent Contractor upon the termination of the Independent
Contractor’s service. An Independent Contractor shall include
a director of the Employer who is not an Employee.
2.21 "Normal Form" means the normal form of benefit
distribution as designated by the Employer in Section 6.1 of
the Adoption Agreement. Benefits under the Plan may be distributed
in the following forms:
2.21.1 Period Certain. An amount payable to
the Participant in equal installments for a specified period. If
the Participant dies before the end of such period, the benefit
will continue for the remainder of the period to the
Beneficiary.
2.21.2 Straight Life. An amount payable to
the Participant in equal installments for the life of the
Participant.
2.21.3 Period Certain and Life. An amount
payable to the Participant in equal installments for the longer of
a specified period or the life of the Participant. If the
Participant should die before the end of the specified period, the
benefit will continue for the remainder of the period to the
Beneficiary.
2.21.4 Joint and Survivor Life. An amount
payable to the Participant in equal installments for the life of
the Participant. The amount will continue after the
Participant’s death to the Participant’s Surviving
Spouse, if any, for the life of the Surviving Spouse in an amount
equal to the survivorship percentage multiplied by the amount
payable during the life of the Participant.
2.21.5 Lump sum. One payment in cash.
2.22 "Normal Retirement Date" means the date the
Participant meets the criteria designated in the Adoption
Agreement.
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2.23 "Participant" means either an
Active Participant or an Inactive Participant.
2.24 "Participating Employer" means any trade or
business (whether or not incorporated) which adopts this Plan with
the consent of the Company identified in the Adoption
Agreement.
2.25 "Plan" means The Executive Nonqualified
Defined Benefit Plan as herein set forth or as duly amended. The
name of the Plan as applied to the Employer shall be designated in
the Adoption Agreement.
2.26 "Plan-Approved Domestic Relations Order"
shall mean a judgment, decree, or order (including the approval of
a settlement agreement) which is:
2.26.1 Issued pursuant to a State’s domestic
relations law;
2.26.2 Relates to the provision of child support, alimony
payments or marital property rights to a Spouse, former Spouse,
child or other dependent of the Participant;
2.26.3 Creates or recognizes the right of a Spouse,
former Spouse, child or other dependent of the Participant to
receive all or a portion of the Participant’s benefits under
the Plan;
2.26.4 Requires payment to such person of their interest
in the Participant’s benefits in an immediate lump payment;
and
2.26.5 Meets such other requirements established by the
Committee.
2.27 "Plan Year" means the twelve-month period
ending on the last day of the month designated in the Adoption
Agreement; provided that the initial Plan Year may have fewer than
twelve months.
2.28 "Present Value" means the current value of a
benefit that is payable in a specified form on a specified date.
The basis for the calculation shall be an interest rate of 7.5%
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and the 1994 Group Annuity Reserving (GAR)
mortality table, as given in Revenue Ruling 2001-62.
2.29 "Qualifying Distribution Event" means
(i) the Separation from Service of the Participant,
(ii) the date the Participant becomes Disabled (if elected in
the Adoption Agreement), (iii) the death of the Participant,
or (iv) a Change in Control Event (if elected in the Adoption
Agreement).
2.30 "Separation from Service" or "Separates
from Service" means a "separation from service" within the
meaning of Section 409A of the Code.
2.31 "Service" means employment by the Employer as
an Employee. For purposes of the Plan, the employment relationship
is treated as continuing intact while the Employee is on military
leave, sick leave, or other bona fide leave of absence if the
period of such leave does not exceed six months, or if longer, so
long as the Employee’s right to reemployment is provided
either by statute or contract. If the Participant is an Independent
Contractor, "Service" shall mean the period during which the
contractual relationship exists between the Employer and the
Participant. The contractual relationship is not terminated if the
Participant anticipates a renewal of the contract or becomes an
Employee.
2.32 "Specified Employee" means an employee who
meets the requirements for key employee treatment under
Section 416(i)(l)(A)(i), (ii) or (iii) of the Code
(applied in accordance with the regulations thereunder and without
regard to Section 416(i)(5) of the Code) at any time during
the twelve-month period ending on December 31 of each year
(the "identification date"). Unless binding corporate action is
taken to establish different rules for determining Specified
Employees for all plans of the Company and its controlled group
members that are subject to Section 409A of the Code, the
foregoing rules and the other default rules in the
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regulations under Section 409A of the Code
shall apply. If the person is a key employee as of any
identification date, the person is treated as a Specified Employee
for the twelve-month period beginning on the first day of the
fourth month following the identification date.
2.33 "Spouse" or "Surviving Spouse" means,
except as otherwise provided in the Plan, a person who is the
legally married spouse or surviving spouse of a Participant.
2.34 "Vested Accrued Benefit" means the amount of
the Accrued Benefit of a Participant that is nonforfeitable as of
any date.
2.35 "Vesting Percentage" means the percentage
that is used to determine the Participant’s Vested Accrued
Benefit, as described in Section 4.3 of the Adoption
Agreement.
Section 3. Participation:
3.1 Active Participation. The Committee in its discretion
shall designate each Employee or Independent Contractor who is
eligible to participate in the Plan. An Employee or Independent
Contractor shall become an Active Participant as of any date
determined by the Committee. Such date shall be the
Participant’s Entry Date.
3.2 Inactive Participation. An Active Participant
shall become an Inactive Participant upon the earliest Qualifying
Distribution Event or a determination by the Committee that the
Participant is no longer eligible to accrue future benefits under
the Plan.
3.3 Inactive Participant’s Vested Accrued
Benefit. An Inactive Participant’s Vested Accrued Benefit
is that Vested Accrued Benefit on the date he ceases to be an
Active Participant.
3.4 Ceasing Participation. An Inactive
Participant ceases to be a Participant on the date he is no longer
entitled to future benefit payments.
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Section 4. Amount of
Benefit:
4.1 Amount of Accrued Benefit. A Participant’s
Accrued Benefit shall be determined in accordance with the Benefit
Formula described in Section 4.2. The Accrued Benefit of a
Participant can never be less than zero.
4.2 Benefit Formula. The Benefit Formula
shall be designated by the Employer in the Adoption Agreement.
4.3 Vesting Percentage. A
Participant’s Vested Accrued Benefit shall be equal to the
Accrued Benefit multiplied by the Vesting Percentage. The
applicable Vesting Percentage is determined by the schedule
designated in the Adoption Agreement. The Vested Accrued Benefit of
a Participant can never be less than zero.
4.4 Adjustment to the Benefit Amount. The
Accrued Benefit and the Vested Accrued Benefit shall be adjusted
for the form of benefit payment and the time of benefit payment as
provided in Section 6. The adjustments shall be applied in the
following order: First, the annual benefit amount shall be adjusted
for the benefit payment frequency as provided in Section 6.7.
Second, an Actuarial Equivalent adjustment shall be made for the
form of payment, as provided in Section 6.1 and 6.2. Third, an
adjustment shall be made if a Participant’s Plan benefits
begin to be paid before the Participant’s Normal Retirement
Date, as provided in Section 6.6.
4.5 Forfeiture. If a Participant separates
from Service before he is fully vested in his Accrued Benefit, he
shall thereupon forfeit his right to receive such benefit under
this Plan to the extent he is not then vested.
Section 5. Qualifying Distribution
Events:
Payment to a Participant shall commence upon the first
Qualifying Distribution
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Event to occur as to the Participant: a
Separation from Service, death, or, if elected in the Adoption
Agreement, becoming Disabled or a Change in Control Event. Any of
these events that occurs after the first Qualifying Distribution
Event to occur shall have no effect on the time or form of
distribution of Plan benefits.
5.1 Separation from Service. If the Participant
Separates from Service with the Employer, the Vested Accrued
Benefit, as of the date of separation, shall be paid to the
Participant by the Employer as provided in Section 6.
Notwithstanding the foregoing, no distribution shall be made
earlier than six months after the date of Separation from Service
with respect to a Participant who, as of the date of his Separation
from Service, is a Specified Employee of a corporation the stock in
which is traded on an established securities market or otherwise.
Any payments to which such Specified Employee would be entitled
during the first six months following the date of Separation from
Service shall be accumulated without interest and paid on the first
day of the seventh month following the date of Separation from
Service.
5.2 Disability. The Employer designates in the
Adoption Agreement whether (i) a Participant’s becoming
Disabled shall not be a Qualifying Distribution Event, (ii) a
Participant’s becoming Disabled shall be a Qualifying
Distribution Event, or (iii) a Participant’s becoming
Disabled may be a Qualifying Distribution Event if a Participant
timely and affirmatively elects upon his initial enrollment to make
becoming Disabled an applicable Qualifying Distribution Event for
his benefit. If becoming Disabled is a Qualifying Distribution
Event for a Participant and the Participant becomes Disabled, the
Vested Accrued Benefit, as of the date of the Participant’s
becoming Disabled, shall be paid to the Participant by the Employer
as provided in Section 6.
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5.3 Death. If the Participant
dies, the Participant’s Vested Accrued Benefit, as of the
date of death, shall be paid to the Participant by the Employer as
provided in Section 6.
5.4 Change in Control Event. The Employer
designates in the Adoption Agreement whether (i) a Change in
Control Event shall not be a Qualifying Distribution Event,
(ii) a Change in Control Event shall be a Qualifying
Distribution Event, or (iii) a Change in Control Event may be
a Qualifying Distribution Event if a Participant timely and
affirmatively elects upon his initial enrollment to make a Change
in Control Event an applicable Qualifying Distribution Event for
his benefit. If a Change in Control Event is a Qualifying
Distribution Event for a Participant and the Change in Control
Event occurs, the Vested Accrued Benefit, as of the date of the
Change in Control Event, shall be paid to the Participant by the
Employer as provided in Section 6.
5.5 No Duplicate Benefits. The benefit
payments in this Section 5 are alternative benefits. By
accepting the benefits pursuant to any one of the subsections of
Section 5, the Participant shall forfeit any rights under any
other of the subsections of Section 5.
Section 6. Payment of Benefits:
6.1 Normal Form of Benefit Distribution. Unless an
optional form of benefit is elected by the Participant in
accordance with Section 6.2, all benefits shall be payable in
the Normal Form designated for each Qualifying Distribution Event
by the Employer in the Adoption Agreement. Notwithstanding the
foregoing, if the Normal Form is a joint and survivor annuity but
the Participant is not married at the time his benefit payment
commence
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