CSS INDUSTRIES, INC.
CHANGE OF CONTROL SEVERANCE PAY PLAN
FOR EXECUTIVE MANAGEMENT
SUMMARY PLAN DESCRIPTION
Effective May 27, 2009
The purpose of the CSS Industries, Inc.
Change of Control Severance Pay Plan for Executive
Management (the Plan) is to provide payments to certain key employees of CSS Industries, Inc.
(CSS) and its subsidiaries whose employment is terminated for a reason covered by the Plan
following a change of control of CSS. This document is designed to serve as both the Plan document
and the summary plan description for the Plan. The legal rights and obligations of any person
having an interest in the Plan are determined solely by the provisions of the Plan.
The Plan is intended to alleviate some of the financial hardship that eligible employees may
experience when their employment is terminated for a reason covered by the Plan following a change
of control. In essence, benefits under the Plan are intended to be supplemental unemployment
benefits. The benefits under the Plan are not intended as deferred compensation and no individual
shall have a vested right in such benefits.
CSS, as the Plan sponsor, has the sole discretion to determine whether an employee may be
considered eligible for benefits under the Plan. All actions taken by CSS shall be in its role as
the sponsor of the Plan, and not as a fiduciary. Nothing in the Plan will be construed to give any
employee the right to receive severance payments or to continue in the employment of CSS and any of
its subsidiaries. The Plan is unfunded, has no trustee, and is administered by the Plan
Administrator. The Plan is intended to be an employee welfare benefit plan within the meaning of
section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (ERISA), and 29
C.F.R. § 2510.3-2(b) and is to be administered as a top-hat welfare plan exempt from the
substantive requirements of ERISA. Please review the section entitled Amendment and Termination
of the Plan regarding CSS reservation of future rights.
The Plan shall be effective as of May 27, 2009, and supersedes all prior severance pay plans,
policies, agreements or practices, whether formal or informal, written or unwritten, of CSS and its
subsidiaries under which CSS or any of its subsidiaries would have provided severance benefits with
respect to a change of control prior to the effective date of this Plan, with the exception of any
individual employment contract that contains a severance pay provision that provides severance in
excess of the amount an employee would be eligible to receive under this Plan. The Plan will
continue until terminated as provided herein.
1845 Walnut Street, Suite 800
Philadelphia, PA 19103
||Employer Identification Number: 13-1920657
||Type of Plan: Welfare Benefit Severance Pay Plan
||Plan Administrator: Change of Control Severance Pay Plan Administrator
||Agent for Service of Legal Process: The Plan Administrator at the address above.
||Sources of Contributions: The Plan is unfunded and CSS and the Participating Subsidiaries pay
all Plan benefits from their assets.
||Type of Administration: The Plan is administered by the Plan Administrator with benefits
provided in accordance with the provisions of this Plan document.
||Recordkeeping: The Plan and its records are kept on a fiscal year basis, April 1 through
March 31. For the first plan year, the records are kept on the short plan year for the period
between May 27, 2009 and March 31, 2010.
||Participating Subsidiaries: The subsidiaries and affiliates of CSS that participate in the
Plan are identified in the attached Exhibit A.
Adjusted Compensation: The sum of (i) your annual rate of base salary in effect as of
the Employment Termination Date, excluding all extra pay, such as, but not limited to, incentive
bonuses, overtime pay, commissions, car allowances or other allowances, Employer contributions to
the Employers 401(k) plan and other deferred compensation arrangements elected by Plan
participants and other Employer paid benefits; and (ii) the average of the annual bonus earned by
you during the three (3) fiscal years prior to the fiscal year in which your Employment Termination
Date occurs (or, if fewer, the period of fiscal years during which you were employed by the
Employer prior to the Employment Termination Date).
Cause: You have: (i) been convicted of a felony; (ii) willfully and grossly neglected
your job responsibilities; (iii) willfully engaged in misconduct in connection with the performance
of your job responsibilities, which results in material damage to the Employer; or (iv) willfully
failed to perform substantially your duties with the Employer (other than any such failure
resulting from incapacity due to physical or mental illness) which has continued after a written
demand for substantial performance is delivered to you by CSS Board of Directors which
specifically identifies the manner in which such Board believes that you have not substantially
performed your duties.
Change of Control: A Change of Control shall be deemed to have occurred if:
||any person (as such term is used in sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the Exchange Act))
becomes a beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of CSS representing
more than 50% of the voting power of the then outstanding securities of CSS;
provided that a Change of Control shall not be deemed to occur as a result
of a change of ownership resulting from the death of a stockholder, and a
Change of Control shall not be deemed to occur as a result of a transaction
in which CSS becomes a subsidiary of another corporation and in which the
stockholders of CSS, immediately prior to the transaction, will beneficially
own, immediately after the transaction, shares entitling such stockholders
to more than 50% of all votes to which all stockholders of the parent
corporation would be entitled in the election of directors (without
consideration of the rights of any class of stock to elect directors by a
separate class vote);
||the consummation of a merger or consolidation of CSS with
another corporation where the stockholders of CSS, immediately prior to the
merger or consolidation, will not beneficially own, immediately after the
merger or consolidation, shares entitling such stockholders to more than 50% of
all votes to which all stockholders of the surviving corporation would be
entitled in the election of directors (without consideration of the rights of
any class of stock to elect directors by a separate class vote); or
||the consummation of a sale or other disposition of all or
substantially all of the assets of CSS.
Code: Internal Revenue Code of 1986, as amended.
Committee: The Human Resources Committee of the Board of Directors of CSS.
Employer: CSS and any subsidiary of CSS that is designated by the Committee as a
participating employer in the Plan and is listed on the attached Exhibit A.
Employment Termination Date: The date on which your employment relationship with the
Employer is involuntarily terminated by the Employer or voluntarily terminated by you for Good
Executive Management Employee: For purposes of this Plan, (A) any employee of CSS who
has the title of Chief Executive Officer, President, Chief Financial Officer, Chief Information
Officer or General Counsel; and (B) any employee of Cleo Inc, Berwick Offray LLC, C.R. Gibson, LLC
or Paper Magic Group, Inc. who has the title of President of such entity.
Good Reason: A Good Reason shall be deemed to have occurred if any of the following
circumstances occurs upon the occurrence of, or within the two (2) year period following, a Change
||a material diminution in your authority, duties or
||a material diminution in your base compensation;
||a material diminution in the authority, duties or
responsibilities of the supervisor to whom you are required to report; or
||a material change in the geographic location at which you must
provided, however, that for you to terminate employment on account of Good Reason, you must provide
written notice to us within ninety (90) days following the initial existence of the condition that
constitutes Good Reason, and your Employer will have a thirty (30) day period to remedy the
condition that constitutes Good Reason. If your Employer does not remedy the event constituting
Good Reason within such thirty (30) day period, your employment will automatically terminate on the
first business day immediately the expiration of such thirty (30) day cure period, unless your
Employer determines to provide for an earlier Employment Termination Date.
Plan Administrator: The Committee, or such other person, committee or entity as may
be designated by the Committee to administer the Plan in accordance with its terms.
Release: The release and discharge of the Employer and all affiliated persons and
entities from any and all claims, demands and causes of action relating to your employment with the
Employer, other than as to any vested benefits to which you may be entitled under any Employer
benefit plan, which will be in such form as may be proscribed by the Employer, acting as plan
sponsor and as a fiduciary, from time to time and with such modifications as the Employer deems
appropriate for your individual situation. The foregoing Release also shall include a one (1) year
non-competition covenant, a one (1) year non-solicitation covenant, and a perpetual
confidentiality/non-disparagement covenant, all of which will be in such form as may be prescribed
by the Employer, acting as plan sponsor and as a fiduciary, from time to time and with such
modifications as the Employer deems appropriate for your individual situation.
Severance Pay: The severance benefits that will be offered to you if you incur a
termination of employment with the Employer for a reason set forth in the Plan.
You will be eligible to participate in this Plan if you are an Executive Management Employee
on your Employment Termination Date or you were an Executive Management Employee prior to the
occurrence of a Change of Control but your status as an Executive Management Employee was changed
by the Employer in contemplation of the Change of Control
A. When You Are Eligible
You are eligible for Severance Pay under this Plan if (A) during the two (2) year period on or
after the occurrence of a Change of Control either (i) your employment with your Employer has been
terminated by the Employer for any reason other than on account of Cause or you are not otherwise
ineligible for Severance Pay as set forth in section B. below; or (ii) you terminate your
employment with your Employer for Good Reason and you are not otherwise ineligible for Severance
Pay as set forth in section B. below; and (B) you sign and do not revoke the Employers standard
The foregoing in no way limits the right of the Employer to (i) terminate your employment and
(ii) provide severance under other circumstances, in each case, as determined by the Employer in
its sole and absolute discretion.
B. When You Are Not Eligible
You are not eligible for Severance Pay under this Plan in any of the following circumstances:
||You voluntary resign, including retirement, for any reason
other than Good Reason.
||You are discharged involuntarily for Cause, or the Employer
discovers following your Employment Termination Date that you engaged in
conduct that constitutes Cause during or after your Employment Termination
||You have an individual employment contract that contains a
severance pay provision that provides severance in excess of the amount you
would be eligible to receive under the Plan.
||Prior to or on your last day of scheduled employment, you die.
||Prior to notification of an Employment Termination Date, you
would be entitled to benefits under any then applicable Employer-sponsored
long-term disability plan if you were a participant in such plan, subject to
the expiration of applicable waiting period.
||Your Employment Termination Date occurs prior to a Change of
Control or your Employment Termination Date occurs after the second anniversary
of the Change of Control, except in the event in which the occurrence of the
Good Reason condition first occurs prior to the second anniversary of the
Change of Control.
||You do not execute, or you revoke, the Release.
||You elect in writing to receive severance benefits under
another severance pay plan then in effect and under which you may be eligible
to receive severance benefits.
Notwithstanding any provision of the Plan to the contrary, the Committee, in its sole
discretion and acting on behalf of the Employer as the Plan sponsor and not as a fiduciary,
reserves the right to determine whether an employee satisfies the eligibility requirements for
If you are selected to receive Severance Pay under the Plan, as determined by the Committee,
you will be eligible to receive payment of the following:
||any accrued and unpaid base pay and benefits due and owing to you for the
period prior to your Employment Termination Date;
||an amount equal to your Adjusted Compensation multiplied by 1.5 (2.0 in the
case of CSS Chief Executive Officer); and
||a pro rata bonus, based upon the period of time you were employed by the
Employer during the Employers fiscal year in which the Employment Termination Date
occurs, which payment shall be based upon 100% achievement of your target annual bonus
opportunity for such fiscal year.
The foregoing amounts will be paid from the general assets of the Employer and will be paid to
you in a cash lump sum payment within sixty (60) days after your Employment Termination Date,
unless delay or a different form is required as described below. Your entitlement to Severance Pay
under this Plan is expressly conditioned on your execution and non-revocation of the Release. If
you do not execute the Release or you revoke the Release you will not be entitled to Severance Pay
under this Plan. Severance Pay will be subject to all applicable federal, state and local tax
All fringe benefits, including health and welfare, pension, life insurance, vacation and
personal days, will cease on your Employment Termination Date, regardless of whether Severance Pay
is made after that date.
If you receive Severance Pay under this Plan and elect health care continuation coverage under
the Consolidated Omnibus Reconciliation Act (COBRA) following termination of your employment, the
Employer will pay for a portion of the monthly COBRA premium, on the same basis as the Employer
pays for a portion of such coverage for active employees, for a period of eighteen (18) months
following your Employment Termination Date; provided, that in order to receive such continued
coverage, you must pay to your Employer, at the same time that premium payments are due for the
month, an amount equal to the full monthly premium payments required for such monthly coverage and
your Employer will reimburse to you the amount of such monthly premium, less the amount that you
would have been required to pay for such coverage if you were employed by your Employer at such
time (the Health Payment), within ten (10) days following the due date of such premiums. In
addition, unless delay is required as described below, on each date on which the monthly Health
Payment is paid to you, your Employer will pay to you an additional amount equal to the federal,
state and local income and payroll taxes that you incur on each monthly Health Payment (the Health
Gross-Up Payment). Your entitlement to the Health Payment and the Health Gross-Up Payment will
continue until the earlier to occur of (i) the end of the eighteen (18) month period, (ii) you do
not pay the full monthly premium for COBRA coverage, or (iii) you become eligible to receive
comparable benefits from a new employer.
If you die before you have received Severance Pay to which you are entitled under the Plan,
your Severance Pay will be paid to your estate within sixty (60) days from the date of your death.
When Benefits End
Severance Pay and any other benefits will be discontinued immediately if:
||The Employer determines that you engaged in any of the actions defined above as
Cause, even if such determination is made following your Employment Termination Date.
||You breach any term of your Release, post-employment agreement, or other
agreement relating to your employment.
Any request or claim for Severance Pay shall be deemed to be filed when a written request is made
by the claimant or the claimants authorized representative which is reasonably calculated to bring
the claim to the attention of the Plan Administrator.
The Plan Administrator, or its designee, shall advise the claimant or such claimants
representative, in writing or in electronic form, of its decision within ninety (90) days of
receipt of the claim for Severance Pay, unless special circumstances require an extension of such
ninety (90) day period for not more than an additional ninety (90) days. Where such extension is
necessary, the claimant shall be given written notice of the delay before the expiration of the
initial ninety (90) day period, which notice shall set forth the reasons for the delay and the date
the Plan Administrator expects to render its decision. If the extension is necessary because the
claimant has failed to submit the information necessary to decide the claim, the Plan
Administrators period for responding to such claim shall be tolled until the date the claimant
responds to the request for additional information. The response shall:
||be in writing or in electronic form,
||be written in a manner calculated to be understood by the claimant, and
||in the case of an adverse benefit determination:
||set forth the specific reason(s) for the denial of benefits;
||contain specific references to Plan provisions on which the denial is
||describe any additional material and information, if any, necessary for
the claim for benefits to be perfected, and an explanation of why such material or
information is necessary; and
||describe the Plans review procedures and the time limits applicable to
such procedures, and include a statement of the claimants right to bring a civil
action under section 502(a) of the ERISA following an adverse benefit determination
If the claimant fails to appeal the Plan Administrators adverse benefit determination, in
writing, within sixty (60) days after its receipt by the claimant, the Plan Administrators
determination shall become final and conclusive.
If the claimant appeals the Plan Administrators adverse benefit determination in a timely
fashion, the Plan Administrator shall reexamine all issues relevant to the original denial of
benefits. Any such claimant or his or her duly authorized representative may review any relevant
documents and records, free of charge, including documents and records that were relied upon in
making the benefit determination, documents submitted, considered or generated in the course of
making the benefit determination (even if such documents were not relied upon in making the benefit
determination), and documents that demonstrate compliance, in making the benefit determination,
with the Plans required administrative processes and safeguards. In addition, the claimant or his
duly authorized representative may submit, in writing, any documents, records, comments or other
information relating to such claim for benefits. In the course of the review, the Plan
Administrator shall take into account all comments, documents, records and other information
submitted by the claimant or his duly authorized representative relating to such claim, regardless
of whether it was submitted or considered as part of the initial benefit determination.
The Plan Administrator shall advise the claimant or such claimants representative, in writing
or in electronic form, of its decision within sixty (60) days of receipt of the written appeal,
unless special circumstances require an extension of such sixty (60) day period for not more than
an additional sixty (60) days. Where such extension is necessary, the claimant shall be given
written notice of the delay before the expiration of the initial sixty (60) day period, which
notice shall set forth the reasons for the delay and the date the Plan Administrator expects to
render its decision. In the event of an adverse benefit determination on appeal, the Plan
Administrator shall advise the claimant, in a manner calculated to be understood by the claimant
||the specific reason(s) for the adverse benefit determination;
||the specific Plan provisions on which the decision was based;
||the claimants right to receive, upon request and free of charge, and
reasonable access to, copies of all documents, records and other information relevant
to such claim; and
||a statement describing any voluntary appeals procedures offered by the Plan,
the claimants right to obtain information about such procedures, and a statement of
the claimants right to bring an action under section 502(a) of ERISA.
No person may bring an action for any alleged wrongful denial of Plan benefits in a court of
law unless the claims procedures set forth above are exhausted and a final determination is made by
the Plan Administrator. If you or other interested person challenges a decision of the Plan
Administrator, a review by the court of law will be limited to the facts, evidence and issues
presented to the Plan Administrator during the claims procedure set forth above. Facts and
evidence that become known to you or other interested person after having exhausted the claims
procedure must be brought to the attention of the Plan Administrator for reconsideration of the
claims determination. Issues not raised with the Plan Administrator will be deemed waived.
The Employer shall reimburse you for all reasonable legal fees and related expenses incurred
by you (A) in connection with this Plan and (B) (i) in contesting or disputing any termination of
your employment or (ii) seeking to obtain or enforce any right or benefit provided by this Plan;
provided, in each case, that you are successful on at least one (1) material issue raised in such
contest, dispute or enforcement proceeding. If you are awarded the right to recover fees and
expenses under this paragraph, the reimbursement of eligible fees or expenses shall be made within
ten (10) business days after delivery of your written request for payment, accompanied with such
evidence of fees and expenses incurred as the Employer reasonably may require, but in no event
later than the end of the Employers fiscal year after the year in which such rights are
The Plan Administrator of the Plan will be the named fiduciary of the Plan for purposes of
ERISA. The Plan Administrator shall consist of one or more persons appointed by the Committee.
The Plan Administrator may, however, delegate to any person, committee or entity any of its power
or duties under the Plan.
The Plan Administrator will be the sole judge of the application and interpretation of the
Plan, and will have the discretionary authority to construe the provisions of the Plan and to
resolve disputed issues of fact. The Committee will have the sole authority to make determinations
regarding eligibility for benefits. The decisions of the Plan Administrator and the Committee in
all matters relating to the Plan that are within the scope of its authority (including, but not
limited to, eligibility for benefits, Plan interpretations, and disputed issues of fact) will be
final and binding on all parties.
Notwithstanding the other provisions hereof, this Plan is intended to comply with the
requirements of section 409A of the Code, to the extent applicable, and this Plan shall be
interpreted to avoid any penalty sanctions under section 409A of the Code. Accordingly, all
provisions herein, or incorporated by reference, shall be construed and interpreted to comply with
section 409A of the Code and, if necessary, any such provision shall be deemed amended to comply
with section 409A of the Code and regulations thereunder. If any payment or benefit cannot be
provided or made at the time specified herein without incurring sanctions under section 409A of the
Code, then such benefit or payment shall be provided in full at the earliest time thereafter when
such sanctions will not be imposed. All payments to be made upon a termination of employment under
this Plan may only be made upon a separation from service under section 409A of the Code. For
purposes of section 409A of the Code, each payment made under this Plan shall be treated as a
separate payment and all installment payments shall be treated as a separate payment. In no event
may you, directly or indirectly, designate the calendar year of payment.
To the maximum extent permitted under section 409A of the Code, the severance benefits payable
under this Plan are intended to comply with the short-term deferral exception under Treas. Reg.
§1.409A-1(b)(4), and any remaining amount is intended to comply with the separation pay exception
under Treas. Reg. §1.409A-1(b)(9)(iii); provided, however, any amount payable to you during the six
(6) month period following your Employment Termination
Date that does not qualify within either of the foregoing exceptions and constitutes deferred
compensation subject to the requirements of section 409A of the Code, then such amounts shall
hereinafter be referred to as the Excess Amount. If at the time of your Employment Termination
Date, your Employers (or any entity required to be aggregated with the Employer under section 409A
of the Code) stock is publicly-traded on an established securities market or otherwise and you are
a specified employee (as defined in section 409A of the Code and determined in the sole
discretion of the Employer (or any successor thereto) in accordance with the Employers (or any
successor thereto) specified employee determination policy), then the Employer shall postpone the
commencement of the payment of the portion of the Excess Amount that is payable within the six (6)
month period following your Employment Termination Date with the Employer (or any successor
thereto) for six (6) months following your Employment Termination Date. The delayed Excess Amount
shall be paid in a lump sum to you within thirty (30) days following the date that is six (6)
months following your Employment Termination Date (or any successor thereto) and any installments
payable to you after such six (6) month period shall continue in accordance with their original
schedule. If you die during such six (6) month period and prior to the payment of the portion of
the Excess Amount that is required to be delayed on account of section 409A of the Code, such
Excess Amount shall be paid to the personal representative of your estate within sixty (60) days
after your death.
Notwithstanding the foregoing, if the severance benefits payable under this Plan constitute
deferred compensation subject to section 409A of the Code and the Change of Control does not
constitute a change in the ownership or effective control of CSS, or in the ownership of a
substantial portion of the assets of CSS, within the meaning of section 409A of the Code, then the
severance benefits payable to you under this Plan will be paid to you in the same form as severance
benefits are payable to you under your Employers severance plan, if any, that covers terminations
unrelated to a Change of Control.
The payment by the Employer of a portion of the applicable COBRA premium during the severance
period is intended to qualify for the exception for deferred compensation as a medical benefit
provided in accordance with the requirements of Treas. Reg. §1.409A-1(b)(9)(v)(B).
Anything in this Plan to the contrary notwithstanding, in the event it shall be determined
that (i) any payment, award, benefit or distribution (or any acceleration of any payment, award,
benefit or distribution) by the Employer or its affiliates or the entity that causes the change in
control to or for your benefit (whether pursuant to the terms of this Plan or otherwise) (the
Payments) would be subject to the excise tax imposed by section 4999 of the Code (the Excise
Tax), and (ii) the reduction of the amounts payable to you under this Plan to the maximum amount
that could be paid to you without giving rise to the Excise Tax (the Safe Harbor Cap) would
provide you with a greater after tax amount than if such amounts were not reduced, then the amounts
payable to you under this Plan shall be reduced (but not below zero) to the Safe Harbor Cap. To
the extent necessary to fall within the Safe Harbor Cap, the amounts payable or benefits to be
provided to you will be reduced such that the economic loss to you as a result of the reduction is
minimized. In applying this principle, the reduction shall be made in a manner consistent with the
requirements of section 409A of the Code and where two economically equivalent amounts are subject
to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but
not below zero. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable
under this Plan (and no other Payments)
shall be reduced. If the reduction of the amounts payable hereunder would not result in a
greater after tax result to you, no amounts payable under this Plan shall be reduced pursuant to
All determinations required to be made under this section shall be made by the public
accounting firm that is retained by CSS as of the date immediately prior to the Change of Control
(the Accounting Firm) which shall provide detailed supporting calculations both to CSS and you
within fifteen (15) business days of the receipt of notice from CSS or you that there has been a
Payment, or such earlier time as is requested by CSS. Notwithstanding the foregoing, in the event
(i) CSS Board of Directors shall determine prior to the Change of Control that the Accounting Firm
is precluded from performing such services under applicable auditor independence rules or (ii) the
Audit Committee of CSS Board of Directors determines that it does not want the Accounting Firm to
perform such services because of auditor independence concerns or (iii) the Accounting Firm is
serving as accountant or auditor for the person(s) effecting the Change of Control, CSS Board of
Directors shall appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees, costs and expenses (including, but not limited to, the costs
of retaining experts) of the Accounting Firm shall be borne by CSS. If payments are reduced to the
Safe Harbor Cap or the Accounting Firm determines that no Excise Tax is payable by you without a
reduction in payments, the Accounting Firm shall provide a written opinion to you to such effect,
that you are not required to report any Excise Tax on your federal income tax return, and to the
effect that failure to report the Excise Tax, if any, on your applicable federal income tax return
will not result in the imposition of a negligence or similar penalty. The determination by the
Accounting Firm shall be binding upon the CSS and you (except as provided in the immediately
If it is established pursuant to a final determination of a court or the Internal Revenue
Service (the IRS) proceeding which has been finally and conclusively resolved, that Payments have
been made to, or provided for the benefit of, you by the Employer, which are in excess of the
limitations provided in this section (referred to hereinafter as an Excess Payment), you shall
repay the Excess Payment to the Employer on demand, together with interest on the Excess Payment at
the applicable federal rate (as defined in Section 1274(d) of the Code) from the date of your
receipt of such Excess Payment until the date of such repayment. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the determination, it is possible that
Payments which will not have been made by the Employer should have been made (an Underpayment),
consistent with the calculations required to be made under this section. In the event that it is
determined (i) by the Accounting Firm, the Employer (which shall include the position taken by the
Employer (which shall include the position taken by the Employer, or by CSS on a consolidated
basis, on its respective federal income tax return) or the IRS or (ii) pursuant to a determination
by a court, that an Underpayment has occurred, the Employer shall pay an amount equal to such
Underpayment to you within ten (10) days of such determination together with interest on such
amount at the applicable federal rate from the date such amount would have been paid to you until
the date of payment. You shall cooperate, to the extent your expenses are reimbursed by the
Employer, with any reasonable requests by the Employer or CSS in connection with any contests or
disputes with the IRS in connection with the Excise Tax or the determination of the Excess Payment.
Notwithstanding the foregoing, in the event that amounts payable under this Plan were reduced
pursuant to the first paragraph of this section and the value of stock options is subsequently
re-determined by the Accounting Firm (as defined below) within the context of Treasury Regulation
§1.280G-1 Q/A 33 that reduces the value of the Payments
attributable to such options, the Employer shall promptly pay you any amounts payable under
this Plan that were not previously paid solely as a result of the first paragraph of this section
up to the Safe Harbor Cap.
AMENDMENT AND TERMINATION OF THE PLAN
CSS reserves the right to amend or terminate the Plan, in whole or in part, at any time and
for any reason; provided, however, that no such amendment or termination shall become effective
until each employee eligible to receive Severance Pay under the Plan shall receive from CSS at
least one (1) year prior written notice of such amendment or termination (so long as a Change of
Control does not occur prior to the end of such one (1) year notice period), unless such amendment
is necessary to comply with applicable law, in which case no written notice shall be necessary to
make such amendment. An amendment to the Plan may not discontinue or change any payments to a
terminated employee who commenced receiving Severance Pay under the Plan prior to the effective
date of the amendment of the Plan. If the Plan is terminated, no further benefits will be payable
under the Plan to any employee who has not commenced receiving Severance Pay prior to the effective
date of such termination.
NONALIENATION OF BENEFITS
You do not have the power to transfer, assign, anticipate, mortgage or otherwise encumber any
rights or any amounts payable under this Plan; nor will any such rights or amounts payable under
this Plan be subject to seizure, attachment, execution, garnishment or other legal or equitable
process, or for the payment of any debts, judgments, alimony, or separate maintenance, or be
transferable by operation of law in the event of bankruptcy, insolvency, or otherwise. In the
event you attempt to assign, transfer or dispose of such right, or if an attempt is made to subject
such right to such process, such assignment, transfer or disposition will be null and void.
ERISA RIGHTS STATEMENT
As a participant in the Plan, you are entitled to certain rights and protections under the
Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all Plan
participants will be entitled to:
Receive Information about the Plan and Benefits
||Examine, without charge, at the Plan Administrators office and at other specified
locations, such as worksites, all documents governing the Plan, including a copy of the latest
annual report (Form 5500 Series) filed by the Plan with the U.S. Department of Labor and
available at the Public Disclosure Room of the Employee Benefits Security Administration.
||Obtain, upon written request to the Plan Administrator, copies of documents governing the
operation of the Plan, including copies of the latest annual report (Form 5500 Series) and
updated summary plan description. The Plan Administrator may make a reasonable charge for the
Prudent Actions by Plan Fiduciaries
In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are
responsible for the operation of the employee benefit plan. The people who operate the Plan,
called fiduciaries of the Plan, have a duty to do so prudently and in the interest of employees
and other Plan participants and beneficiaries. No one, including your Employer, or any other
person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining
a welfare benefit or exercising your rights under ERISA.
Enforcing Your Rights
If your claim for a benefit is denied or ignored, in whole or in part, you have a right to know why
this was done, to obtain copies of documents relating to the decision without charge, and to appeal
any denial, all within certain time schedules.
Under ERISA, there are steps you can take to enforce the above rights. For instance, if you
request materials from the Plan and you do not receive them within thirty (30) days, you may file
suit in a federal court. In such a case, the court may require the Plan Administrator to provide
the materials and pay you up to $110 a day until you receive the materials, unless the materials
were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim
for benefits that is denied or ignored, in whole or in part, you may file suit in a state or
federal court. If it should happen that the Plan fiduciaries misuse the Plans money or if you are
discriminated against for asserting your rights, you may seek assistance from the U.S. Department
of Labor, or you may file suit in a federal court. The court will decide who should pay court
costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if
it finds your claim is frivolous.
Assistance with Your Questions
If you have any questions about the Plan, you should contact the Plan Administrator. If you have
any questions about this statement or about your rights under ERISA, you should contact the nearest
office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in the
telephone directory or the Division of Technical Assistance and Inquires, Employee Benefits
Security Administration, U.S. Department of Labor, 200 Constitution Avenue NW, Washington, D.C.
20210 (web address: www.dol.gov/dol/pwba). You may also obtain certain publications about your
rights and responsibilities under ERISA by calling the publication hotline of the Employee Benefits
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