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EXHIBIT 10
(l)
Alberto-Culver
Company
Executive Deferred
Compensation Plan
(as amended through
September 18, 2007)
Table of
Contents
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I.
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Preamble, Definitions and Purpose |
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1 |
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1.1
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Preamble |
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1 |
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1.2
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Definitions |
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1 |
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1.3
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Purpose |
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3 |
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1.4
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Bonus
Deferrals |
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3 |
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II.
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Participation |
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4 |
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2.1
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Participation, Notification and Election |
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4 |
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2.2
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Deferral
Procedure |
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4 |
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2.3
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Intentionally Omitted |
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5 |
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2.4
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Establishment of Accounts |
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5 |
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2.5
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Account
Valuation and Earnings |
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5 |
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2.6
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Benefit
Payments |
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5 |
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2.7
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Intentionally Omitted |
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6 |
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2.8
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Additional Company Contributions |
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6 |
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2.9
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Change in
Control |
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7 |
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III.
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General Provisions |
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8 |
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3.1
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Funding |
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8 |
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3.2
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Vesting |
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8 |
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3.3
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In-Service Withdrawals |
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9 |
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3.4
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Beneficiary Designation |
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9 |
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3.5
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Death
Benefits |
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9 |
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3.6
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Administration |
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10 |
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3.7
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Administrative Fees and Expenses |
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10 |
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3.8
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Claims
Procedure |
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10 |
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3.9
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Tax
Liability |
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11 |
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IV.
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Exempt
Status |
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11 |
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V.
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Indemnification |
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12 |
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VI.
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Amendment and Termination |
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12 |
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VII.
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Miscellaneous |
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12 |
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7.1
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Nonassignability |
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12 |
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7.2
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No
Contract of Employment |
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12 |
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7.3
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Participant Litigation |
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12 |
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7.4
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Participant and Beneficiary Duties |
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13 |
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7.5
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Governing
Law |
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13 |
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7.6
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Validity |
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13 |
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7.7
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Notices |
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13 |
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7.8
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Successors |
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13 |
| I. |
Preamble, Definitions and Purpose |
Pursuant to this plan document,
Alberto-Culver Company and its adopting domestic subsidiaries
maintain an unfunded deferred compensation plan, established on
November 16, 2006 (“Effective Date”), and 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 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:
| (a) |
“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. |
| (b) |
“Code” - The Internal Revenue Code of 1986, as
amended. |
| (c) |
“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, management bonus plans and sales incentive plans,
but expressly excluding any incentive pay under the Company’s
2006 Shareholder Value Incentive Plan. The Plan Administrator shall
have the discretion to determine which type of incentive pay are
included in Compensation under the foregoing definition, which
includes the authority to add or delete incentive plans of the
Company. |
| (d) |
“Compensation Committee” - the Compensation and
Leadership Development Committee of the Board of Directors of
Alberto-Culver Company. |
| (e) |
“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 LLC,
Alberto-Culver (P.R.) Inc., Alberto-Culver USA, Inc., St. Ives
Laboratories, Inc., Pro-Line International, Inc., and
Alberto-Culver International, Inc. have adopted this Plan with the
consent of Alberto-Culver Company. Wherever required for the
purposes of applying Section 409A of the Code and the
Regulations thereunder, the term “Company” shall also
include any employer that is required to be treated aggregated with
the Company and treated as a single employer under
Section 414(b), (c), (m) or (o) of the
Code. |
| (f) |
“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. |
| (g) |
“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. |
| (h) |
“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. |
| (i) |
“Excess Compensation” - Compensation that cannot be
taken into account under the 401(k) Plan or the Profit-Sharing Plan
because such Compensation exceeds the limit on maximum includable
compensation established under Section 401(a)(17) of the Code,
or that cannot be included in Compensation under the Profit-Sharing
Plan or 401(k) Plan without adversely affecting the tax qualified
status of such Plan. |
| (j) |
“ERISA” - The Employee Retirement Income Security
Act of 1974, as amended. |
| (k) |
“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. |
| (l) |
“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. |
| (m) |
“Key
Employee” - A Participant who is a “key employee”
as defined in Section 416(i)(1)A of the Code. The status of
Participants as Key Employees 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. For purposes of
determining which Participants are considered Key Employees
pursuant to Section 416(i)(1)(A) by reason of their status as
officers, the fifty employees of the Company who received the
highest compensation for a Plan Year and who hold an office that is
elected or appointed by the board of directors or other
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similar governing body of
the Company, whether or not they are Participants, shall be
considered Key Employees. For purposes of the preceding sentence,
“compensation” shall mean the total taxable
compensation required to be reported in Box 1 of Form W-2 (or any
substitute form) for the Plan Year, but shall not include
compensation paid to a nonresident alien which is not effectively
connected with the conduct of a trade or business within the United
States. The provisions of this Section 1.2(m) are intended as
elections as to the manner of determining specified employees in
accordance with Treasury Regulations §1.409A-1(i)(8), and
shall be applied to all nonqualified deferred compensation plans
maintained by the Company.
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| (n) |
“Bonus Compensation” - The annual cash bonus paid
under either the Alberto-Culver Company Management Incentive Plan
(“MIP”) or Management Bonus Plan
(“MBP”). |
| (o) |
Intentionally Omitted |
| (p) |
“Salary Compensation” - Salary and commissions,
where applicable, of any employee as set by the Company for a Plan
Year. |
| (q) |
“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. |
| (r) |
“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. |
| (s) |
“Plan Year” - Each 12 consecutive month period
commencing on January 1 and ending on
December 31. |
| (t) |
“Profit-Sharing Plan” - The Alberto-Culver Company
Employees’ Profit Sharing Plan. |
| (u) |
“Termination of Employment” - Any “separation
from service” within the meaning of Section 409A of the
Code. |
Alberto-Culver Company and certain of
its domestic subsidiaries sponsor the 401(k) Plan for the benefit
of their U.S. employees and their beneficiaries. The 401(k) Plan
operates 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) Plan, 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 |
Participation, Notification and
Election |
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, which may be either a specified
date or upon Termination of Employment, (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.
All elections shall be made (i) in
the case of Bonus Compensation at the time specified in the MBP or
MIP, as applicable, and (ii) in the case of Salary
Compensation before the beginning of the Plan Year in which the
services are to be performed, with the exception of a new hire. For
purposes of this Section 2.2, a Participant who was previously
eligible to participate in any elective nonqualified deferred
compensation plan maintained by the Company shall not be considered
a new hire unless either all amounts previously deferred by him or
her (other than amounts deferred and vested prior to
January 1, 2005) were distributed to him or her prior to the
date or rehire, or at least twenty-four months have elapsed since
he or she was last eligible to defer any compensation under any
such plan (other than accrual of earnings). 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.
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All elections shall be made as provided
in the previous paragraph with the exception of a new hire. A new
hire will be allowed to participate in the Plan and elect to defer
Salary Compensation 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 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.
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.
| 2.3 |
Intentionally Omitted. |
| 2.4 |
Establishment of Accounts |
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.
| 2.5 |
Account Valuation and Earnings |
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 portion of the account es
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