Annual Report — Form 10-K Filing Table of Contents
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1: 10-K Forest City Enterprises, Inc. Form 10-K HTML 1.77M
2: EX-10.21 Material Contract HTML 61K
3: EX-10.33 Material Contract HTML 16K
4: EX-10.56 Material Contract HTML 14K
5: EX-10.59 Material Contract HTML 34K
6: EX-10.60 Material Contract HTML 16K
7: EX-21 Subsidiaries HTML 19K
8: EX-23 Consent of Experts or Counsel HTML 10K
9: EX-24.A Power of Attorney HTML 10K
10: EX-24.B Power of Attorney HTML 10K
11: EX-24.C Power of Attorney HTML 10K
12: EX-24.D Power of Attorney HTML 10K
13: EX-24.E Power of Attorney HTML 10K
14: EX-24.F Power of Attorney HTML 10K
15: EX-24.G Power of Attorney HTML 10K
16: EX-24.H Power of Attorney HTML 10K
17: EX-24.I Power of Attorney HTML 10K
18: EX-24.J Power of Attorney HTML 10K
19: EX-24.K Power of Attorney HTML 12K
20: EX-24.L Power of Attorney HTML 12K
21: EX-24.M Power of Attorney HTML 12K
22: EX-24.N Power of Attorney HTML 11K
23: EX-24.O Power of Attorney HTML 11K
24: EX-31.1 Certification -- Sarbanes-Oxley Act - Sect. 302 HTML 16K
25: EX-31.2 Certification -- Sarbanes-Oxley Act - Sect. 302 HTML 16K
26: EX-32.1 Certification -- Sarbanes-Oxley Act - Sect. 906 HTML 12K
FOREST CITY ENTERPRISES, INC.
2005 DEFERRED COMPENSATION PLAN FOR EXECUTIVES
(As Amended and Restated Effective January 1, 2008)
Forest City Enterprises, Inc. does hereby amend and completely restate the Forest City
Enterprises, Inc. 2005 Deferred Compensation Plan For Executives on the terms and conditions
hereinafter set forth, effective as of January 1, 2008. The original effective date of the Plan
was January 1, 2005 and the Plan was subsequently amended and restated as of January 1, 2005. The
Plan provides a select group of management or highly compensated employees with the opportunity to
defer base salary, or incentive compensation payments which may be paid to such executives under
any plan which the Committee (as defined below) may designate from time to time, in accordance with
the provisions of the Plan.
ARTICLE I DEFINITIONS
For the purposes hereof, the following words and phrases shall have the meanings set forth
below, unless their context clearly requires a different meaning:
1. “Account” shall mean the bookkeeping account maintained by the Committee on behalf of each
Participant pursuant to Section 4 of Article II that is credited with Base Salary or Incentive
Compensation which is deferred by a Participant, and the interest on such amounts as determined in
accordance with Section 4 of Article II and that is comprised of the Termination of Employment
Payment Subaccount and the Specified Year Payment Subaccount to which deferred Base Salary and
Incentive Compensation, respectively, are credited.
2. “Base Salary” shall mean the annual fixed or base compensation, payable biweekly or
otherwise to a Participant, including the amount of such compensation earned during the final
payroll period of the year within the meaning of Treas. Reg. Section 1.409A-2(a)(3) or any
successor provision.
3. “Beneficiary” or “Beneficiaries” shall mean the person or persons, including one or more
trusts, designated by a Participant in accordance with the Plan to receive payment of the remaining
balance of the Participant’s Account in the event of the death of the Participant prior to receipt
of the entire amount credited to the Participant’s Account.
4. “Board” shall mean the Board of Directors of the Company.
5. “Bonus Year” shall mean each fiscal year commencing February 1 and ending on the following
January 31, commencing with the fiscal year commencing on February 1, 2008.
6. “Calendar Year” shall mean each calendar year commencing on or after January 1, 2008.
7. “Change in Control” shall mean that:
(i) The Company is merged or consolidated or reorganized into or with another
corporation or other legal person, and as a result of such merger, consolidation or
reorganization less than a majority of the combined voting power of the securities of such
corporation or person that are outstanding immediately following the consummation of such
transaction is held in the aggregate by either (a) the holders of Voting Stock (as
hereinafter defined) of the Company immediately prior to such transaction or (b) Permitted
Holders;
(ii) The Company sells or otherwise transfers all or substantially all of its assets to
any other corporation or other legal person, and as a result of such sale or transfer less
than a majority of the combined voting power of the securities of such corporation or person
that are outstanding immediately following the consummation of such sale or transfer is held
in the aggregate by either (a) the holders of Voting Stock (as hereinafter defined) of the
Company immediately prior to such sale or transfer or (b) Permitted Holders;
(iii) There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor
schedule, form or report) thereto, each as promulgated pursuant to the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), disclosing that any person (as the term
“person” is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) other than a
Permitted Holder has become the beneficial owner (as the term “beneficial owner” is defined
under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of
securities representing 20 percent or more of the combined voting power of the
then-outstanding securities entitled to vote generally in the election of the Board (the
“Voting Stock”);
(iv) The Company files a report or proxy statement with the Securities and Exchange
Commission pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule 14A
(or any successor schedule, form or report or item therein) that a change in control of the
Company has or may have occurred or will or may occur in the future pursuant to any
then-existing contract or transaction, other than with respect to a Permitted Holder; or
(v) If during any period of two consecutive years, individuals who at the beginning of
any such period constitute the Board cease for any reason to constitute at least a majority
of the members thereof, unless the election, or the nomination for election by the Company’s
stockholders, of each member of the Board first elected during such period was approved by a
vote of at least two-thirds of the members of the Board then still in office who were
members of the Board at the beginning of any such period.
Notwithstanding the foregoing provisions of subsection (iii) or (iv) hereof, a “Change in Control”
shall not be deemed to have occurred for purposes of the Plan, either (1) solely because the
Company, a Subsidiary, or any Company-sponsored employee stock ownership plan or other employee
benefit plan of the Company, files or becomes obligated to file a report or a proxy
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statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any
successor schedule, form or report or item therein) under the Exchange Act, disclosing beneficial
ownership by it of shares of Voting Stock, whether in excess of 20 percent or otherwise, or because
the Company reports that a change in control of the Company has or may have occurred or will or may
occur in the future by reason of such beneficial ownership or (2) solely because of a change in
control of any Subsidiary by which any Participant may be employed. Notwithstanding the foregoing
provisions of subsections (i-iv) hereof, if, prior to any event described in subsections (i-iv)
hereof that may be instituted by any person who is not an officer or director of the Company, or
prior to any disclosed proposal that may be instituted by any person who is not an officer or
director of the Company that could lead to any such event, management proposes any restructuring of
the Company that ultimately leads to an event described in subsections (i-iv) hereof pursuant to
such management proposal, then a “Change in Control” shall not be deemed to have occurred for
purposes of the Plan.
8. “Code” shall mean the Internal Revenue Code of 1986, as amended.
9. “Committee” shall mean the Compensation Committee of the Board or such other Committee as
may be authorized by the Board to administer the Plan.
10. “Company” shall mean Forest City Enterprises, Inc. and its successors, including, without
limitation, the surviving corporation resulting from any merger or consolidation of Forest City
Enterprises, Inc. with any other corporation or corporations.
11. “Deferral Election” shall mean the Election Agreement (or portion thereof) completed by a
Participant and filed with the Committee that indicates the amount of his or her Base Salary and/or
Incentive Compensation that is or will be deferred under the Plan for a Deferral Period.
12. “Deferral Period” shall mean (i) with respect to Base Salary, the Calendar Year that
commences after each Election Filing Date, and (ii) with respect to Incentive Compensation, the
Bonus Year that commences after each Election Filing Date.
13. “Disability” shall have the meaning given to such term in the Company’s Long Term
Disability Plan, as amended from time to time.
14. “Election Agreement” shall mean an agreement in the form that the Committee may designate
from time to time.
15. “Election Filing Date” shall mean December 31 of the Calendar Year next preceding the
first day of (i) in the case of Base Salary, the Calendar Year for which such Base Salary would
otherwise be earned and (ii) in the case of Incentive Compensation, the Bonus Year for which such
Incentive Compensation would otherwise be earned.
16. “Eligible Employee” shall mean a full-time or part-time employee of an Employer who is, as
determined by the Committee, a member of a “select group of management or highly compensated
employees,” within the meaning of Sections 201, 301 and 401 of ERISA, and who is selected by the
Committee to participate in the Plan.
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17. “Employer” shall mean the Company, a Subsidiary that has adopted the Plan, and, effective
as of January 1, 2006, RMS Investment Corp. and RMS Management.
18. “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
19. “Fixed Installment Payment Method” shall mean the method of calculating the amount of each
biweekly installment described in Section 5(ii)(c) of Article II of the Plan.
20. “Incentive Compensation” shall mean cash incentive compensation payable pursuant to an
incentive compensation plan, whether such plan is now in effect or hereafter established by the
Company, which the Committee may designate from time to time.
21. “Key Employee” shall mean a “specified employee” with respect to an Employer (or a
controlled group member of an Employer) determined pursuant to procedures adopted by the Employer
in compliance with Section 409A of the Code.
22. “Moody’s Rate” shall mean, for each calendar quarter, the interest rate that is the sum of
(i) the average of the Moody’s long-term corporate bond yields for A, Aa, and Aaa bonds first
published for such quarter plus (ii) .50. For purposes of determining the amount of interest to be
credited to an Account under Section 4 of Article II of the Plan, the Moody’s Rate shall be
determined on a quarterly basis.
23. “Participant” shall mean any Eligible Employee who has at any time made a Deferral
Election in accordance with Section 2 of Article II of the Plan and who, in conjunction with his or
her Beneficiary, has not received a complete distribution of the amount credited to his or her
Account.
24. “Payment Election” shall mean the Specified Year Payment Election and/or the Termination
of Employment Payment Election.
25. “Permitted Holder” shall mean (i) any of Samuel H. Miller, Albert B. Ratner, Charles A.
Ratner, James A. Ratner, Ronald A. Ratner or any spouse of any of the foregoing, and any trusts for
the benefit of any of the foregoing, (ii) RMS, Limited Partnership and any general partner or
limited partner thereof and any person (other than a creditor) that upon the dissolution or winding
up of RMS, Limited Partnership receives a distribution of capital stock of the Company, (iii) any
group (as defined in Section 13(d) of the Exchange Act) of two or more persons or entities that are
specified in the immediately preceding clauses (i) and (ii), and (iv) any successive recombination
of the persons or groups that are specified in the immediately preceding clauses (i), (ii) and
(iii).
26. “Plan” shall mean this deferred compensation plan, which shall be known as the Forest City
Enterprises, Inc. 2005 Deferred Compensation Plan For Executives. The Plan is unfunded and is
maintained by the Company primarily for the purpose of providing deferred compensation for a select
group of management or highly compensated employees of an Employer.
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27. “Specified Year Payment Election” shall mean the Election Agreement (or portion thereof)
completed by a Participant and filed with the Committee that indicates the form of payment of the
Participant’s Base Salary and/or Incentive Compensation that is or will be deferred, subject to
Section 5(v) of Article II, pursuant to a Deferral Election under the Plan until a specified year
designated by the Participant.
28. “Specified Year Payment Subaccount” shall mean the bookkeeping account maintained by the
Company pursuant to Section 4 of Article II on behalf of each Participant who makes a Specified
Year Payment Election and that is credited with amounts subject to such Specified Year Payment
Election.
29. “Subsidiary” shall mean any corporation, joint venture, partnership, unincorporated
association or other entity in which the Company has a direct or indirect ownership or other equity
interest and directly or indirectly owns or controls 50 percent or more of the total combined
voting or other decision-making power.
30. “Termination of Employment” shall mean a termination of employment with an Employer that
constitutes a separation from service within the meaning of Treasury Regulation Section
1.409A-1(h)(1)(ii).
31. “Termination of Employment Payment Election” shall mean the Election Agreement (or portion
thereof) completed by a Participant and filed with the Committee that indicates the form of payment
of the Participant’s Base Salary and/or Incentive Compensation that is or will be deferred pursuant
to a Deferral Election under the Plan until the Participant’s Termination of Employment.
32. “Termination of Employment Payment Subaccount” shall mean the bookkeeping account
maintained by the Company pursuant to Section 4 of Article II on behalf of each Participant who
makes a Termination of Employment Payment Election that is credited with amounts subject to such
Termination of Employment Payment Election.
33. “Unforeseeable Emergency” shall mean a severe financial hardship to a Participant
resulting from (i) an illness or accident of the Participant or Beneficiary or his or her spouse or
dependent (as defined in Section 152(a) of the Code), (ii) loss of the Participant’s property due
to casualty, or (iii) other similar or extraordinary circumstances arising as a result of events
beyond the control of the Participant.
34. “Variable Installment Payment Method” shall mean the method of calculating the amount of
each biweekly installment described in Section 5(ii)(d) of Article II of the Plan.
ARTICLE II ELECTION TO DEFER
1. Eligibility. An Eligible Employee may make an annual Deferral Election with
respect to receipt of all or a specified part of his or her Base Salary for any Calendar Year or
Incentive Compensation earned for any Bonus Year in accordance with Section 2 of this Article. An
Eligible Employee who makes a Deferral Election must also make a Payment Election with respect to
the amount deferred in accordance with Section 5 of this Article. An Eligible
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Employee’s entitlement to defer shall cease with respect to the Deferral Period following the
Deferral Period in which he or she ceases to be an Eligible Employee.
2. Deferral Elections. All Deferral Elections, once effective, shall be irrevocable,
shall be made on an Election Agreement filed with the Committee and shall comply with the following
requirements:
(i) The Deferral Election shall specify the amount of Base Salary and/or Incentive
Compensation that is to be deferred within the limits under Section 3 of this Article.
(ii) The Deferral Election shall be made by, and shall be effective as of, the
applicable Election Filing Date; provided, however, that to the extent
permitted by Section 409A of the Code, the Company may permit Participants to make a
Deferral Election with respect to Incentive Compensation that constitutes “performance-based
compensation” (within the meaning of Section 409A(a)(4)(B)(iii) of the Code) at a time later
than the time described earlier in this first sentence but no later than six (6) months
prior to the end of the performance period with respect to which the Incentive Compensation
is earned. Notwithstanding the foregoing, an employee who first becomes an Eligible
Employee (A) during the course of a Calendar Year, rather than as of the first day of such
Calendar Year, shall make such Deferral Election with respect to Base Salary within thirty
(30) days following the date the employee first becomes an Eligible Employee, and such
Deferral Election shall be effective on the date made and shall be effective only with
regard to Base Salary earned during such Calendar Year following the filing of the Election
Agreement with the Committee and (B) during the course of a Bonus Year, rather than as of
the first day of such Bonus Year, shall make such Deferral Election with respect to
Incentive Compensation within thirty (30) days following the date the employee first becomes
an Eligible Employee, and such Deferral Election shall be effective on the date made and,
unless the proviso in the first sentence of this Section 2(ii) applies, shall be effective
only with regard to the amount of Incentive Compensation earned during such Bonus Year
following the filing of the Election Agreement with the Committee as determined pursuant to
the pro-ration method permitted under Section 409A of the Code.
3. Amount Deferred. A Participant shall designate on the Election Agreement the
percentage or the dollar amount of his or her Base Salary or Incentive Compensation that is to be
deferred, provided, however, that the maximum deferral by a Participant during any
one Deferral Period shall be, with respect to such Deferral Period, the lesser of (i) $100,000 and
(ii) 25% of the sum of the Base Salary and Incentive Compensation which the Participant would
otherwise earn during such Deferral Period.
4. Accounts. Base Salary and Incentive Compensation that a Participant elects to
defer shall be treated as if they were set aside in an Account on the date the Base Salary or
Incentive Compensation would otherwise have been paid to the Participant. Such Account will be
credited with interest at the Moody’s Rate as determined by the Committee on a quarterly basis.
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5. Payment Elections. Subject to Sections 5(iii), 5(iv), 6, 7, and 8 of this Article,
all Payment Elections shall be irrevocable, shall be made on an Election Agreement filed with the
Committee and shall comply with the following requirements:
(i) The Payment Election shall contain the Participant’s elections regarding the time
of the commencement of payment of amounts in his or her Account, to the extent the
Participant does not already have an election regarding the time of the commencement of
payment applicable to his or her Account. In addition, if a Participant has made a
Specified Year Payment Election pursuant to Section 5(i)(a)(2)(I) of this Article and the
Participant makes a Deferral Election for the Deferral Period immediately prior to the
specified year designated in such Specified Year Payment Election, the time of commencement
of payment of amounts in his or her Account for that and all future Deferral Periods shall
be payable in accordance with the Participant’s Termination of Employment Payment Election
and, if none, shall be the time elected by the Participant pursuant to a new Payment
Election filed in connection with the Deferral Election for the first of such future
Deferral Periods, and, if none, shall be payable upon the Participant’s Termination of
Employment.
(a) A Participant may elect to commence payment (1) of all of the Participant’s Account
upon the date on which he or she incurs a Termination of Employment for any reason,
including, without limitation, by reason of death, retirement, or Disability, or (2) with
the Committee’s written approval at the time that the Participant files his or her Election
Agreement with the Committee (I) a designated percentage or dollar amount of his or her
Account in a specified year that begins at least two years after the date on which the
Deferral Election becomes effective, and (II) the remaining percentage or dollar amount (if
any) of the Participant’s Account, as the case may be, upon the date on which the
Participant incurs a Termination of Employment for any reason, including, without
limitation, by reason of death, retirement, or Disability.
(b) Payments made in accordance with the Participant’s Termination of Employment
Payment Election under Section 5(i)(a)(1) or Section 5(i)(a)(2)(II) of this Article shall be
paid or commence to be paid on the date of the Termination of Employment and payments made
in accordance with the Participant’s Specified Year Payment Election under Section
5(i)(a)(2)(I) of this Article shall be paid or commence to be paid on the first payroll date
next following June 1 of the specified year.
(ii) The Payment Election shall also contain the Participant’s elections regarding the
form of payment of amounts in his or her Account, to the extent the Participant does not
already have an election regarding the form of payment applicable to his or her Account. In
addition, if a Participant has made a Specified Year Payment Election pursuant to Section
5(i)(a)(2)(I) of this Article and the Participant makes a Deferral Election for the Deferral
Period immediately prior to the specified year designated in such Specified Year Payment
Election, the form of payment of amounts in his or her Account for that and all future
Deferral Periods shall be payable in accordance with the Participant’s Termination of
Employment Payment Election and, if none, shall be the form elected by the Participant
pursuant to a new Payment Election filed in
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connection with the Deferral Election for the first of such future Deferral Periods,
and, if none, shall be payable in the form of a single, lump sum payment.
(a) A Participant may elect to receive amounts credited to:
(1)
his or her Termination of
Employment Payment Subaccount in one of the following forms:
(a) a single, lump sum payment, (b) a number of biweekly
installments over a period of five (5) years, or (c) a number of
biweekly installments over a period of ten (10) years, and
(2)
his or her Specified Year Payment
Subaccount in one of the following forms: (a) a single, lump
sum payment or (b) a number of biweekly installments over a
period of five (5) years.
(b) In the case of a Participant who elects installment payments under Section 5(ii)(a)
of this Article, such Participant shall also elect one of the following methods of
calculating installment payments: (1) the Fixed Installment Payment Method or (2) the
Variable Installment Payment Method.
(c) In the event that all or a portion of a Participant’s Account is payable under the
Fixed Installment Payment Method, all of the biweekly installment payments during the
installment period shall be equal in amount and the amount of each biweekly installment
shall be calculated so that the total installment payments have a present value equivalent
to the value of the Participant’s Account subject to an installment Payment Election at the
time such payments commence. The interest rate used for purposes of determining the
installment payment amount in the prior sentence shall be the average of the Moody’s Rates
in effect during the four quarters that precede the quarter in which installment payments
commence.
(d) In the event that all or a portion of a Participant’s Account is payable under the
Variable Installment Payment Method, the amount of each installment shall be determined as
follows:
(1)
The value, at the time of the
first installment payment, of the portion of the Participant’s
Account payable under the Variable Installment Payment Method
shall be divided by the number of installment payments that will
be made during the installment period;
(2)
The amount determined under (1)
shall be paid to the Participant on each payment date through
the end of the Calendar Year in which the installment payments
begin;
(3)
After the end of the Calendar
Year described in (2), the value at the end of such Calendar
Year of the portion of the Account payable in installments shall
be divided by the
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number of installment payments then remaining in the
installment period;
(4)
The amount determined under (3)
shall be paid to the Participant on each payment date during the
following Calendar Year;
(5)
The procedures described in (3)
and (4) shall be followed for any following Calendar Year in
which installment payments will be made;
(6)
The portion of the Account
subject to such installment payments that remains unpaid from
time to time shall continue to be credited with gains, losses,
interest and other earnings as provided in Section 4 of this
Article;
(7)
The final installment payment
shall include an adjustment for gains, losses, interest and
other earnings pursuant to Section 4 of this Article during the
period between the beginning of the Calendar Year in which the
final installment payment is made and the date of such final
payment; and
(8)
Notwithstanding the foregoing
provisions of this Section 5(ii)(d), a Participant who commences
his or her installment payments after June 30 of a Calendar Year
shall be paid the amount determined under (1) on each payment
date (a) through the end of the Calendar Year in which the
installment payments began and (b) through the end of the
immediately following Calendar Year and such Participant shall
not have the amount of his or her payments recalculated as
described in (3) until after the end of such immediately
following Calendar Year.
(iii) Except as provided in the last sentence of Section 2(ii) and in Section 5(iv) of
this Article, the Payment Election(s) shall be made by, and shall be effective as of, the
applicable Election Filing Date. A Participant may not have more than one Termination of
Employment Payment Election and one Specified Year Payment Election in effect at any one
time. In addition, if a Participant has made a Specified Year Payment Election pursuant to
Section 5(i)(a)(2)(I) of this Article and the Participant makes a Deferral Election for the
Deferral Period immediately prior to the specified year designated in such Specified Year
Payment Election, the time of commencement and form of payment of amounts in his or her
Account for that and all future Deferral Periods shall be payable in accordance with the
Participant’s Termination of Employment Payment Election and, if none, shall be the time of
commencement and form of payment elected by the Participant pursuant to a new Payment
Election filed in connection with the Deferral
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Election for the first of such future Deferral Periods, and, if none, shall be payable
in the form of a single, lump sum payment upon the Participant’s Termination of Employment.
(iv) In accordance with Section 409A of the Code, Participants who commenced
participation in the Plan prior to January 1, 2008 shall make a new Payment Election with
respect to the time of commencement of payment and form of payment of the portion of his or
her Account attributable to the amount deferred (including earnings) pursuant to any
Election Agreement filed prior to 2007. The new Payment Election shall (i) be made by
December 31, 2007 and (ii) specify the time at which the Participant has elected to have
such portion of his or her Account paid under Section 5(i) of this Article and the form of
payment under Section 5(ii) of this Article.
(v) Notwithstanding the foregoing provisions of this Section 5, in the event that a
Participant makes a Specified Year Payment Election pursuant to Section 5(i)(a)(2)(I) of
this Article and prior to the date payment is due to be paid or commence to be paid under
such election (as described in Section 5(i)(b) of this Article) he or she incurs a
Termination of Employment, payment of the Participant’s Specified Year Payment Subaccount
shall commence on the date of such Termination of Employment in the form elected by the
Participant with respect to his or her Termination of Employment Payment Subaccount under
Section 5(ii)(a)(1) of this Article, and if none, in the form elected by the Participant
with respect to his or her Specified Year Payment Subaccount under Section 5(ii)(a)(2) of
this Article.
(vi) Notwithstanding the foregoing provisions of this Section 5, if the Participant is
a Key Employee, payment on account of Termination of Employment shall commence on the first
payroll date next following the first business day of the seventh month following such
Termination of Employment (or, if earlier, the date of death). In the event that all or a
portion of a Key Employee’s Account is payable in installments upon a Termination of
Employment, the total amount of biweekly installment payments to which such Key Employee
would otherwise be entitled during the six-month period following the date of such
Termination of Employment shall also be paid on the first payroll date next following the
first business day of the seventh month following such Termination of Employment (or, if
earlier, the date of death).
(vii) The payment of a single, lump-sum amount, or the payment of a number of biweekly
installments as designated by the Participant in the Election Agreement, to a Participant
(or his or her Beneficiary) pursuant to this Section 5 shall discharge all obligations of
the Company to such Participant (or his or her Beneficiary) under the Plan.
6. Death of a Participant. In the event of the death of a Participant, the remaining
amount of the Participant’s Account shall be paid to his or her Beneficiary or Beneficiaries
designated in a writing on a form that the Committee may designate from time to time (the
“Beneficiary Designation”). A Participant’s Beneficiary Designation may be changed at any time
prior to his or her death by the execution and delivery of a new Beneficiary Designation. The
Beneficiary Designation on file with the Company that bears the latest date at the time of the
Participant’s death shall govern. In the absence of a Beneficiary Designation or the failure of
any Beneficiary to survive the Participant, the amount of the Participant’s Account
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shall be paid to the Participant’s estate. Amounts payable to the Participant’s Beneficiary,
Beneficiaries or estate under this Section 6 shall be paid in the form of a single, lump sum
payment as soon as practicable, but no later than ninety (90) days, after the date of the
Participant’s death; providedthat the Beneficiary, Beneficiaries or representative
of the estate, as the case may be, shall not have the right to designate the year of payment.
7. Small Payments. Notwithstanding the foregoing, if at the time a Participant
commences payment of his or her entire Account balance pursuant to (i) his or her Termination of
Employment Payment Election under Section 5(i)(a)(1) of Article II, (ii) his or her Specified Year
Payment Election under Section 5(i)(a)(2)(I) of Article II, or (iii) Section 5(v) of Article II,
such Account balance does not exceed the applicable dollar amount then in effect under Section
402(g)(1)(B) of the Code, such Account shall be automatically paid to such Participant in a single,
lump-sum payment on the date of the Participant’s Termination of Employment or the date applicable
to the Specified Year Payment Election, as the case may be; provided, however, that
if the Participant is a Key Employee, payment on account of a Termination of Employment shall occur
on the first payroll date next following the first business day of the seventh month after such
Termination of Employment (or, if earlier, the date of death).
8. Unforeseeable Emergency. Notwithstanding the foregoing, in the event of an
Unforeseeable Emergency and at the request of a Participant, accelerated payment shall be made to
the Participant of all or a part of his or her Account. Payments of amounts as a result of an
Unforeseeable Emergency may not exceed the amount necessary to satisfy such Unforeseeable Emergency
plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution(s),
after taking into account the extent to which the hardship is or may be relieved through
reimbursement or compensation by insurance or otherwise by liquidation of the Participant’s assets
(to the extent the liquidation of such assets would not itself cause severe financial hardship).
9. Termination of Participation. Notwithstanding any other provision of the Plan, a
Participant’s active participation in the Plan shall terminate upon a determination by the
Committee that the Participant is not a member of a select group of management or highly
compensated employees of his or her employer, within the meaning of ERISA.
ARTICLE III ADMINISTRATION
The Company, through the Committee, shall be responsible for the general administration of the
Plan and for carrying out the provisions hereof. The Committee shall have all such powers as may
be necessary to carry out the provisions of the Plan, including the power to (i) resolve all
questions relating to eligibility for participation in the Plan and the amount in the Account of
any Participant and all questions pertaining to claims for benefits and procedures for claim
review, (ii) resolve all other questions arising under the Plan, including any factual questions
and questions of construction, and (iii) take such further action as the Company shall deem
advisable in the administration of the Plan. The actions taken and the decisions made by the
Committee hereunder shall be final and binding upon all interested parties. In accordance with the
provisions of Section 503 of ERISA, the Committee shall provide a procedure for handling claims of
Participants or their Beneficiaries under the Plan. Such procedure shall be in
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accordance with regulations issued by the Secretary of Labor and shall provide adequate
written notice within a reasonable period of time with respect to the denial of any such claim as
well as a reasonable opportunity for a full and fair review by the Committee of any such denial.
It is intended that the Plan comply with the provisions of Section 409A of the Code, as enacted by
the American Jobs Creation Act of 2004, so as to prevent the inclusion in gross income of any
amounts deferred hereunder in a taxable year that is prior to the taxable year or years in which
such amounts would otherwise actually be distributed or made available to Participants or
Beneficiaries. This Plan shall be administered in a manner that effects such intent.
ARTICLE IV AMENDMENT AND TERMINATION
The Company reserves the right to amend or terminate the Plan at any time by action of the
Board, except that no such action shall adversely affect any Participant or Beneficiary who has an
Account, or result in any change in the timing or manner of payment of the amount of any Account
(except as otherwise permitted under the Plan), without the consent of the Participant or
Beneficiary (provided, however, that this limitation requiring the consent of
Participants or Beneficiaries to certain actions shall not apply to any amendment that is deemed
necessary by the Company to ensure compliance with Section 409A of the Code and any termination to
the extent, and in the circumstances described, in Treas. Reg. Section 1.409A-3(j)(4)(ix), or any
successor provision).
ARTICLE V MISCELLANEOUS
1. Non-Alienation of Deferred Compensation. No right or interest under the Plan of
any Participant or Beneficiary shall be (i) assignable or transferable in any manner, (ii) subject
to alienation, anticipation, sale, pledge, encumbrance, attachment, garnishment or other legal
process or (iii) in any manner liable for or subject to the debts or liabilities of the Participant
or Beneficiary. Notwithstanding the foregoing, to the extent permitted by Section 409A of the
Code, the payment of part or all of an interest under this Plan may be made to an individual other
than the Participant or Beneficiary, to the extent necessary to fulfill a “domestic relations
order” as defined in Section 414(p)(1)(B) of the Code.
2. Participation by Employees of an Employer Other than the Company. An Eligible
Employee who is employed by a Subsidiary (that has adopted the Plan), RMS Investment Corp., or RMS
Management and who elects to participate in the Plan shall participate on the same basis as an
Eligible Employee of the Company. The Account of a Participant employed by such Subsidiary, RMS
Investment Corp., or RMS Management shall be paid in accordance with the Plan solely by such
Subsidiary, RMS Investment Corp., or RMS Management, as the case may be, to the extent attributable
to Base Salary or Incentive Compensation that would have been paid by such Subsidiary, RMS
Investment Corp., or RMS Management in the absence of deferral pursuant to the Plan, unless the
Committee otherwise determines that the Company shall be the obligor.
3. Interest of Participant. The obligation of the Company under the Plan to make
payment of amounts reflected in an Account merely constitutes the unsecured promise of the
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Company to make payments from its general assets and no Participant or Beneficiary shall have
any interest in, or a lien or prior claim upon, any property of the Company. Further, no
Participant or Beneficiary who is not an employee or a Beneficiary of an employee of any
Subsidiary, RMS Investment Corp., or RMS Management shall have any claim whatsoever against any
Subsidiary, RMS Investment Corp., or RMS Management for amounts reflected in an Account. Nothing
in the Plan shall be construed as guaranteeing future employment to Eligible Employees. It is the
intention of the Company that the Plan be unfunded for tax purposes and for purposes of Title I of
ERISA. The Company may create a trust to hold funds to be used in payment of its obligations under
the Plan, and may fund such trust; provided, however, that any funds contained
therein shall remain liable for the claims of the Company’s general creditors. Notwithstanding the
above, upon the earlier to occur of (i) a Change in Control or (ii) a declaration by the Board that
a Change in Control is imminent, the Company shall promptly to the extent it has not previously
done so:
(a) establish an irrevocable trust, substantially in the form of the Rabbi Trust
attached hereto as Exhibit A (the funds of which shall be subject to the claims of
the Company’s general creditors) to hold funds to be used in payment of its obligations
under the Plan; and
(b) transfer to the trustee of such trust, to be added to the principal thereof, an
amount equal to (I) the aggregate amount credited to the Accounts of all of the Participants
and Beneficiaries under the Plan, less (II) the balance, if any, in the trust at such time.
4. Claims of Other Persons. The provisions of the Plan shall in no event be construed
as giving any other person, firm or corporation any legal or equitable right as against an Employer
or the officers, employees or directors of an Employer except any such rights as are specifically
provided for in the Plan or are hereafter created in accordance with the terms and provisions of
the Plan.
5. Severability. The invalidity and unenforceability of any particular provision of
the Plan shall not affect any other provision hereof, and the Plan shall be construed in all
respects as if such invalid or unenforceable provision were omitted.
6. Governing Law. Except to the extent preempted by federal law, the provisions of
the Plan shall be governed and construed in accordance with the laws of the State of Ohio.
7. Relationship to Other Plans. The Plan is intended to serve the purposes of and to
be consistent with any incentive compensation plan approved by the Committee for purposes of the
Plan.
8. Headings; Interpretation.
(i) Headings in this Plan are inserted for convenience of reference only and are not to
be considered in the construction of the provisions hereof.
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(ii) Any reference in this Plan to Section 409A of the Code will also include any
proposed, temporary or final regulations, or any other guidance, promulgated with respect to
such Section 409A by the U.S. Department of Treasury or the Internal Revenue Service.
(iii) For purposes of the Plan, the phrase “permitted by Section 409A of the Code,” or
words or phrases of similar import, shall mean that the event or circumstance that may occur
or exist only if permitted by Section 409A of the Code would not cause an amount deferred or
payable under the Plan to be includible in the gross income of a Participant or Beneficiary
under Section 409A(a)(1) of the Code.