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Exhibit 10 (p)
Alberto-Culver Company
Executive Deferred Compensation Plan
Table of
Contents
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Preamble, Definitions and
Purpose
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1
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Preamble
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1
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Definitions
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1
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Purpose
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3
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Bonus Deferrals
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3
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Participation
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4
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Participation, Notification and
Election
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4
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Deferral Procedure
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4
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Intentionally Omitted
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5
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Establishment of Accounts
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5
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Account Valuation and Earnings
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5
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Benefit Payments
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5
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Intentionally Omitted
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6
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Additional Company Contributions
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6
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Change in Control
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8
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General Provisions
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8
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Funding
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8
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Vesting
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8
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In-Service Withdrawals
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9
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Beneficiary Designation
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9
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Death Benefits
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10
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Administration
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10
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Administrative Fees and Expenses
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10
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Claims Procedure
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10
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Tax Liability
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11
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Exempt Status
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12
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Indemnification
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12
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Amendment and Termination
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12
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Miscellaneous
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12
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Nonassignability
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12
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No Contract of Employment
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12
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Participant Litigation
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13
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Participant and Beneficiary Duties
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13
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Governing Law
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13
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Validity
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13
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Notices
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13
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Successors
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13
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I.
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Preamble, Definitions and
Purpose
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Pursuant to this plan document, Alberto-Culver
Company will maintain an unfunded deferred compensation plan, to be
established as of the date that the Delaware corporation having the
name or previously having the name New Sally Holdings, Inc. ("New
Sally") distributes the then outstanding Common Stock of the
Company to holders of common stock $.01 par value per share of New
Sally ("Effective Date"), and to be known as the Alberto-Culver
Company Executive Deferred Compensation Plan ("Plan"). Under the
terms of the Plan, eligible employees of the Alberto-Culver Company
and certain of its domestic subsidiaries are allowed to defer a
portion of their Compensation. Participants and their beneficiaries
shall have no interest in any Company assets as a source of funds
to satisfy the benefit obligations under the Plan. The Plan
constitutes an unsecured promise by the Company to make benefit
payments in the future and Participants shall have the status of
general unsecured creditors of the Company.
The Plan was approved by the stockholders of the Company on
November 13, 2006. At the time of approval by the stockholders
of the Company, the name of the Company was New Aristotle Holdings,
Inc. Following the time of adoption, the name of the Company will
be changed to Alberto-Culver Company. At the time of adoption of
the Plan by the Company, a plan with the same name was maintained
by Alberto-Culver Company, as then constituted (EIN: 36-2257936)
(the "Prior Plan"). As of the Effective Date, (i) all amounts
that were deferred or became vested under the Prior Plan on or
after January 1, 2005 with respect to current or former
employees of the Company shall be credited to Participant accounts
and be paid pursuant to the terms of this Plan, and (ii) all
amounts that were deferred or became vested prior to
January 1, 2005 with respect to current or former employees of
the Company shall continue to be governed by the Prior Plan.
Capitalized terms are generally defined in the
Section where used. The following terms appear in several Sections
and are defined below for convenient reference:
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(a)
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"Beneficiary" -One or more individuals, trusts or
other entities that are designated in the most recent writing by
the Participant to receive a benefit in the event of the
Participant’s death. If more than one Beneficiary survives
the Participant, such benefit payments shall be made equally to all
such Beneficiaries, unless otherwise indicated by the Participant
on the beneficiary form.
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(b)
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"Code" -The Internal Revenue Code of 1986, as
amended.
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(c)
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"Compensation" -The salary and commissions, where
applicable, and bonuses of an employee as set by the Company for a
Plan Year, exclusive of any amounts payable under severance plans,
option plans, and any other benefit or welfare plan of the Company
now or hereafter existing; provided, that Compensation shall also
include incentive pay under the Company’s management
incentive plans, middle management bonus plans and sales incentive
plans, but expressly excluding any incentive pay under the
Company’s 1994 Shareholder Value Incentive Plan. The Plan
Administrator shall have the discretion to determine which type of
incentive pay are included in
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Compensation under the foregoing definition,
which includes the authority to add or delete incentive plans of
the Company.
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(d)
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"Compensation Committee" -the Compensation and
Leadership Development Committee of the Board of Directors of
Alberto-Culver Company.
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(e)
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"Company" -Alberto-Culver Company and any direct
or indirect domestic subsidiaries which, with the consent of
Alberto-Culver Company, adopts this Plan by resolution of its board
of directors. On the date hereof , Alberto-Culver (P.R.) Inc.,
Alberto-Culver USA, Inc., St. Ives Laboratories, Inc., Pro-Line
International, Inc., Alberto-Culver Overseas, Inc., and
Alberto-Culver International, Inc. have adopted this Plan with the
consent of Alberto-Culver Company.
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(f)
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"Deferral Agreement Form" -A written agreement
between a Participant and the Company to defer receipt of future
Salary Compensation and/or Bonus Compensation. The Plan
Administrator may amend this form from time to time. The Plan
Administrator may adopt procedures providing for the Deferral
Agreement Form to consist of elections made by a Participant using
a website, telephone voice response system, or other electronic
means.
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(g)
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"Disability" – A medically determinable
physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not
less than 12 months, and which entitles the Participant to receive
disability benefits for a period of not less than 3 months under
the Alberto-Culver Company Long Term Disability Plan or any other
plan maintained by the Company.
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(h)
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"Eligible Compensation" -The salary and
commissions, where applicable, of an employee as set by the Company
for a Plan Year, exclusive of any amounts payable under bonus and
incentive plans, severance plans, option plans, and any other
benefit or welfare plan of the Company now or hereafter
existing.
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(i)
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"Excess Compensation" -Compensation that cannot
be taken into account under the 401(k) Plans or the Profit-Sharing
Plan because such Compensation exceeds the limit on maximum
includable compensation established under Section 401(a)(17)
of the Code.
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(j)
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"ERISA" -The Employee Retirement Income Security
Act of 1974, as amended.
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(k)
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"401(k) Plan" -The Alberto-Culver 401(k) Savings
Plan and, if so determined by the Compensation Committee, any other
plan sponsored by a participating Company that provides a cash or
deferred election under Section 401(k) of the Code.
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(l)
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"Highly Compensated Employee" -an employee of the
Company whose Eligible Compensation is greater than the dollar
amount set forth in Code Section 414(q) (or any successor
provision), as adjusted by the Internal Revenue Service from time
to time.
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(m)
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"Key Employee" – A Participant who is a
"specified employee" as defined in Section 409A of the Code.
The status of Participants as Key Employee shall be determined as
of the last day of each Plan Year, and shall apply for the 12-month
period beginning on the following April 1.
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(n)
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"Bonus Compensation" – The annual cash
bonus paid under either the Alberto-Culver Company Management
Incentive Plan ("MIP") or Management Bonus Plan ("MBP").
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(o)
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Intentionally Omitted
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(p)
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"Salary Compensation" – Salary and
commissions, where applicable, of any employee as set by the
Company for a Plan Year.
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(q)
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"Participant" -A Highly Compensated Employee who
meets the participation requirements set forth in Section 2.1
and either elects to participate in the Plan in accordance herewith
or is credited with additional contributions pursuant to
Section 2.8.
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(r)
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"Plan Administrator" -An individual selected from
time to time by the Compensation Committee to administer the Plan
and perform all accounting and administrative functions in
connection therewith. All or a portion of the accounting and
administrative functions may be delegated by the Plan Administrator
to a third party.
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(s)
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"Plan Year" -Each 12 consecutive month period
commencing on January 1 and ending on
December 31.
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(t)
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"Profit-Sharing Plan" -The Alberto-Culver Company
Employees’ Profit Sharing Plan.
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(u)
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"Termination of Employment" –Any
"separation from service" within the meaning of Section 409A
of the Code.
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Alberto-Culver Company and certain of its
domestic subsidiaries sponsor the 401(k) Plans for the benefit of
their U.S. employees and their beneficiaries. Each of the 401(k)
Plans operate as a "qualified plan", as defined under the Code, and
therefore are subject to deferral limitations contained therein.
The Plan is established to mitigate the effect of these limitations
by allowing Participants to defer a greater portion of their
Compensation and the earnings thereon than is permitted solely
under the 401(k) Plans, and to provide for certain other forms of
deferred compensation for Participants.
Participants under the MIP and MBP will be
entitled to defer a portion of their Bonus Compensation under the
terms of this Plan, provided such participants qualify as a Highly
Compensated Employee. All such amounts deferred hereunder shall be
governed by the terms of this Plan and not by the terms of the MIP
or MBP. In no event shall any deferral of Bonus Compensation exceed
the actual cash bonus paid under the MIP or MBP, less all amounts
withheld therefrom.
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2.1
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Participation, Notification and
Election
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The Plan Administrator shall provide notification
to the Highly Compensated Employees of their eligibility to
participate in the Plan. The determination of whether an employee
is a Highly Compensated Employee will be calculated based upon such
employee’s applicable Eligible Compensation in the preceding
calendar year. The determination of whether a new hire is a Highly
Compensated Employee will be calculated based upon such new
hire’s initial annual salary (without regard to commissions,
if any) at the time of hire. The Plan Administrator shall further
provide eligible employees with a Deferral Agreement Form. Eligible
employees shall elect on the Deferral Agreement Form for the
applicable Plan Year, the (i) percentage of Salary
Compensation and/or Bonus Compensation to be deferred in that Plan
Year, (ii) commencement date of distributions with respect to
deferrals made in such Plan Year, (iii) method of distribution
which may be either a single-sum distribution or annual
distribution installments which can be no more than ten, and
(iv) any other elections required by the Plan Administrator
and set forth on the Deferral Agreement Form. In the case of annual
installments, each installment shall be equal to the balance in the
Participant’s account immediately prior to the installment
divided by the number of remaining installments, and if any
distribution to a Key Employee is required to be deferred until six
months after his termination of employment, such deferral shall
apply only to the first installment and the remaining installments
shall be paid in accordance with the original schedule. A
Participant is not permitted to (i) defer Salary Compensation
or Bonus Compensation for a pay period which has commenced prior to
the date on which the Deferral Agreement Form is signed by the
Participant and delivered to the Plan Administrator and
(ii) with the exception of the Participant’s termination
of employment with the Company or a Change in Control as set forth
in Section 2.9, defer Salary Compensation or Bonus
Compensation for a period of time less than three years from the
commencement date of such deferrals.
Upon receipt of a properly completed and timely
executed Deferral Agreement Form, the Company will withhold from
each paycheck, the designated percentage of the Participant’s
Salary Compensation and/or Bonus Compensation. Changes in salary
during the Plan Year shall be subject to the same Compensation
deferral percentage as previously elected and indicated on the
Deferral Agreement Form. Subject to applicable law, the deferral
amount shall not be included as wages subject to federal income tax
on the Participant’s federal income tax withholding
statement. Participant deferrals shall be subject to employment
taxes, including Federal Insurance Contributions Act contributions,
and any state or local taxes as required. The Participant must
elect to defer not less than 1% and not more than 100% of his/her
Salary Compensation and/or Bonus Compensation, provided that under
no circumstances shall the amount of (i) Bonus Compensation
deferred exceed 100% of the Participant’s Bonus Compensation
less all amounts withheld therefrom or (ii) Salary
Compensation deferred exceed 100% of the Participant’s Salary
Compensation less all amounts withheld therefrom. Such deferral
percentages must be in 1% increments.
All elections shall be made before the beginning of the Plan
Year in which the services are to be performed with the exception
of a new hire. A new hire will be allowed to participate in the
Plan
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provided such employee submits a Deferral
Agreement Form within 30 days of the date of hire. In such an
event, the new employee shall become a Participant on the first day
of the first payroll period beginning in the next calendar quarter
following the date on which the Deferral Agreement Form is
submitted to the Plan Administrator. If the new employee is
eligible to receive, and elects to defer, Bonus Compensation for
the year in which he is hired, the deferral election shall apply
only to the portion of his Bonus Compensation attributable to the
period after the date of the Deferral Agreement Form, determined by
daily proration. If a new employee fails to submit a Deferral
Agreement Form within such 30 day period, the new employee will not
be allowed to participate in the Plan until the beginning of the
next Plan Year. Each Plan Year, Participants will be required to
complete a new Deferral Agreement Form prior to the commencement of
such Plan Year if they wish to defer income for that Plan
Year.
If in any Plan Year the Company determines that incentive pay,
or any portion thereof, cannot be included in Compensation under
the Profit-Sharing Plan or any 401(k) Plan without adversely
affecting the tax qualified status of such Plan, the Plan
Administrator may adopt procedures consistent with
Section 409A of the Code to permit each Participant who is
otherwise a Highly Compensated Employee to elect to defer a
percentage of the net amount of such incentive pay.
Notwithstanding the foregoing, deferrals under this Plan for the
2006 Plan Year shall be governed by deferral elections made for the
2006 plan year under the Prior Plan.
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2.3
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Intentionally Omitted.
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2.4
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Establishment of
Accounts
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Each Participant shall have an account
established by the Plan Administrator and Participant statements
will be distributed to Participants in the Plan on not less than a
quarterly basis. The Company will maintain an accrual for the
aggregate amount of deferred benefits under the Plan on the
Company’s accounting records. A Participant’s account
may be divided into subaccounts as necessary to reflect different
payment or vesting terms, or for other purposes as the Plan
Administrator may determine.
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2.5
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Account Valuation and
Earnings
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The account established for each Participant
under Section 2.4 will be valued on not less than a quarterly
basis. Such account shall be adjusted quarterly to reflect a
reasonable fixed annual rate of interest as determined by the
Compensation Committee. This rate may be prospectively adjusted on
an annual or more frequent basis as deemed appropriate by the
Compensation Committee. The rate chosen by the Compensation
Committee from time to time shall apply to the entire balance of
all Participants’ accounts.
Except as otherwise provided in Sections 2.7 and
2.8, the account established for each Participant under
Section 2.4 shall be payable to the Participant as provided in
the Deferral Agreement Form (or, in the case of a Participant who
is allocated a contribution without having entered into a Deferral
Agreement Form, in s
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