EMPLOYMENT AGREEMENT
AGREEMENT entered into this 7th day of April, 1997, by
and between Lehi German, hereinafter referred to as the
"Employee," and SF Services, Inc., an Arkansas agricultural
cooperative, hereinafter referred to as the "Employer."
1. Employment. The Employer hereby agrees to employ
the Employee, and the Employee hereby agrees to accept
employment upon the terms and conditions hereinafter set forth.
2. Term. Subject to the provisions for termination
as hereinafter provided, the term of this Agreement shall
begin on March 15, 1997, and shall continue until March 14,
2000.
3. Compensation. During the term hereof, the Employer
shall pay the Employee as follows for the services to be
rendered hereunder and for the covenants set forth in
paragraph 12:
(a) Base Salary. During the first year of
this Agreement, the Employee shall receive a base salary
of two hundred thousand dollars ($200,000) payable proratably
in accordance with the Employer's established payroll periods.
In each of the other two (2) years during the term hereof,
the Employee's base salary, which shall not be less than the
first year's base salary, shall be determined after a
performance review by the Employer's Chief Executive Officer.
(b) Bonus. The Employee shall be entitled to a
guaranteed annual bonus of thirty thousand dollars ($30,000)
during the first year of this Agreement payable in twenty-four
(24) equal semimonthly installments of one thousand two hundred
fifty dollars ($1,250) each beginning on March 31, 1997, and
continuing during the next twenty-three (23) pay periods. The
Employee shall receive incentive bonuses during the second
(payable on or before November 15, 1998) and third (payable on
or before November 15, 1999) years of this Agreement which
shall be predicated on incentives that are implemented for all
executives of the Employer and shall receive a guaranteed bonus
during the second year of fifteen thousand dollars ($15,000)
payable in twelve (12) equal semimonthly installments of one
thousand two hundred fifty dollars ($1,250) each during the
twelve (12) pay periods following the first year's guaranteed
bonus; and further provided that the second year's guaranteed
bonus shall be credited against the full incentive bonus payable
to the Employee for the second year. In the event the
employment relationship should terminate during any year at a
time other than an anniversary date, then the Employee shall be
entitled to a prorata portion of the annual incentive bonus for
the second or third year, as the case may be, based on the
number of days during the year prior to the termination.
4. Severance Pay. In the event the Employer should
terminate the Employee without cause (which is defined under
paragraph 14) or substantially reduce his responsibilities as
defined in paragraph 5 during the term of this Agreement, then
the Employer agrees to pay the Employee severance pay which
shall be equal to the Employee's base salary for the year of
termination as provided under subparagraph (a) of paragraph 3
(the "Severance Amount"); provided, however, if the termination
occurs during the first year of the term hereof, then the
severance pay shall be two hundred percent (200%) of the
Severance Amount. Any severance pay due hereunder will be
payable in twelve (12) equal monthly installments beginning
ninety (90) days after the final date of the Employee's
employment or substantial reduction in duties and, if the
Employee has been terminated without cause, payment thereof
will discharge in full the Employer's obligation to the Employee
arising out of their employment relationship. In the event the
Employer makes severance pay payments to the Employee following
termination and the Employee violates the provisions of
paragraph 12 following termination, then the Employee shall
reimburse the Employer upon demand for all amounts of severance
pay received and the Employer shall be entitled to cease making
payments.
5. Duties of Employee. During the first year of the
term of this Agreement, the Employee shall be assigned a
mutually agreed upon title and shall be responsible for developing
a strategic business plan for each division of the Employer;
thereafter, he shall assume operating responsibility for at least
two (2) of the Employer's divisions.
6. Insurance Benefits. During the term of this
Agreement, the Employer shall provide the Employee with the
following insurance benefits:
(a) Group Plans. All insurance benefits provided
to employees of the Employer based upon class of employment;
provided, however, if the Employee shall be terminated by the
Employer for other than cause as defined in paragraph 14, then
the Employer shall continue the Employee's health insurance
coverage for so long as severance pay is owed under paragraph 4.
(b) Term Life Insurance. During the term of this
Agreement, the Employer shall provide the Employee, if insurable
at standard rates, with an employee-owned policy of term
insurance with coverage equal to two and one-half (21/2) times the
Employee's base salary as determined under subparagraph (a) of
paragraph 3. Upon termination of employment, the Employer shall
provide documentation necessary to allow the Employee to continue
the policy at the Employee's expense.
7. Travel and Business-Related Expenses. The
Employer will reimburse the Employee for all reasonable travel
and business-related expenses. In addition, the Employer will
pay for the Employee the dues and initiation fees for
memberships in professional organizations approved by the
Employer.
8. Qualified Deferred Compensation Plans. Subject
to meeting eligibility requirements, the Employee shall
participate in all of the Employer's qualified retirement
plans.
9. Nonqualified Deferred Compensation Plan. The
Employer agrees to establish a nonqualified plan of deferred
compensation for the Employee's benefit in the form and
manner described in Exhibit A, attached hereto, to which the
Employer will make a minimum annual contribution of eight
percent (8%) of the Employee's base salary as determined
under paragraph 3(a) during the term of this Agreement and
thereafter under the oral or written agreement in effect.
Such contribution shall be in the form of cash or property,
as specified in Exhibit A. Benefits shall be payable as
described in Exhibit A. This paragraph (and the respective
provisions of Exhibit A) shall survive the term of this
Agreement and shall continue so long as the Employee is
employed by the Employer. Provided, however, the required
contribution hereunder shall be reduced to the extent the
Employer shall provide a comparable retirement benefit for
the Employee under a qualified retirement plan and/or another
nonqualified retirement plan.
10. Relocation Expenses. The Employer shall provide
the Employee lodging until the Employer purchases the
Employee's home as provided in paragraph 17. The Employer
and the Employee shall mutually agree on reimbursement, if
any, for the other documented relocation expenses described
on the attached Exhibit B.
11. Incentive Plans. The Employer commits to the
Employee that it will undertake to develop a management
long-term incentive plan designed to attract and retain high
quality management personnel who can produce the level of
sustained results needed to allow the Employer to attain its
business plan over a period of time.
12. Noncompetition. The Employee agrees to the
following restrictions on him during the term of this
Agreement and thereafter:
(a) The Employee agrees that he will not, at
any time during the term of this Agreement or any oral or
written extension thereof or during the six-month period
following the termination of his employment participate in
any capacity with any business of whatever form if in such
capacity he personally engages in any business activity which
is the same as, similar to, or in any manner competitive with,
the business now or hereafter engaged in by the Employer or
any of its related entities in any county in any state in
which the Employer or any of its related entities has a
member store either on the date hereof or on the date of
the Employee's termination of employment.
(b) The position of the Employee will place him
in close contact with many confidential affairs of the Employer
and its related entities including matters of a business nature
such as information about costs, profits, markets, sales,
trade secrets, potential patents and other business ideas,
customer lists, plans for future developments and other
information not known to businesses in the same lines of
business as the Employer and its related entities and other
proprietary rights (hereinafter, collectively, "Confidential
Matters"). The Employee agrees at all times hereafter to
protect from damage or destruction and keep secret all
Confidential Matters of the Employer and its related entities
and not to disclose them in any manner whatsoever to anyone,
or otherwise use them or use his knowledge of the knowhow,
sales techniques, sales operation, customer lists, trade names
or trade marks and other valuable intangible assets of the
Employer or any of its related entities, except with the
Employer's prior written consent, or as required by an Order
of a federal or state governmental agency or a court. The
Employer acknowledges that the purpose of this provision is not
to preclude the Employee from obtaining employment with another
employer, but is to prohibit the use of the Confidential
Matters to the Employer's detriment.
(c) The parties agree that any disputes arising
out of paragraph 12(a) and/or paragraph 12(b) shall be
referred to binding arbitration using a single arbitrator in
accordance with the then current rules of the American
Arbitration Association, and the parties further agree that,
subject to factors beyond the reasonable control of either
party, the decision of the arbitrator shall be binding upon
both parties and completed within ninety (90) days after it is
initiated. The arbitrator shall also determine which party or
parties shall bear the cost of arbitration.
13. Performance Review: The Employer shall establish
procedures by which its President and Chief Executive Officer,
the Board of Directors or a committee thereof will annually
review the Employee's performance. The review will be based
on objective standards of performance of the duties of the
Employee consistently applied from year to year. The Employee
shall be provided a written copy of the results of the review
and shall be informed of any areas of performance which are
deemed to require improvement and have the opportunity to
respond thereto.
14. Termination by Employer. The Employer shall have
the right to terminate this Agreement at any time for cause
in which event the Employee shall be terminated immediately
and shall not be entitled to severance pay pursuant to
paragraph 4. For purposes of this Agreement "cause" shall
exist if:
(a) The Employee fails to discharge his
responsibilities hereunder to the satisfaction of the
Employer's Board of Directors after being reprimanded in
writing, specifying in detail the Employee's failures which
must be material, for a prior failure to do so and then given
sixty (60) days to properly discharge his duties. In the
exercise of its authority under this provision, the Employer
shall consider the prior performance reviews of the Employee
and any determination of a material failure of performance by
the Employee shall be based on reasonable findings of fact and
not be arbitrary or capricious;
(b) The Employee violates the restrictive
provisions of paragraph 12; or
(c) The Employee engages in any act which
constitutes (i) a felony under any state or federal law;
(ii) gross, willful or wanton negligence or misconduct; or
(iii) a breach of any fiduciary duty to Employer.
15. Notices. Any notice required or permitted to be
given under this Agreement shall be sufficient if in writing,
and if sent by registered mail or certified mail to his
residence in the case of the Employee, or to its principal
office in the case of the Employer.
16. Vacation and Professional Development Time. The
Employee shall be entitled to twenty (20) working days of paid
vacation plus normal holidays per year as well as reasonable
time for professional development.
17. Purchase of Home. On or before August 15, 1997,
the Employer agrees to purchase the Employee's home in Kansas
City, Missouri, for five hundred fifty thousand dollars
($550,000) and to assume all costs in conjunction with the
closing of that purchase.
18. Waiver of Breach. Waiver by the Employer of a
breach of any provision of this Agreement by the Employee shall
not operate to be construed as a waiver of any subsequent
breach by the Employee.
19. Entire Agreement. This instrument contains the
entire agreement of the parties. It may not be changed orally
but only by an agreement in writing signed by the party against
whom enforcement of any waiver, change, modification, extension
or discharge is sought.
20. Benefit. This Agreement shall inure to the benefit
of, and shall be binding upon, their heirs, successors,
assigns, and legal representatives.
IN WITNESS WHEREOF, the parties have executed this
Agreement the day and year aforsaid.
EMPLOYER:
SF SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------
Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
EMPLOYEE:
/s/ Lehi German
----------------------
Lehi German
EXHIBIT A
SF SERVICES, INC.
NON-QUALIFIED DEFERRED COMPENSATION PLAN
PREAMBLE
WHEREAS, SF Services, Inc. does not presently maintain a
qualified retirement plan which is comparable to this Plan
for the benefit of its employees which provides a
nondiscretionary, non-matching employer contribution;
WHEREAS, SF Services, Inc. and its subsidiaries desire to
provide a Non-Qualified Deferred Compensation Plan to provide
benefits to certain Executive Employees;
NOW, THEREFORE, SF Services, Inc. for itself and on behalf of
its subsidiaries does hereby adopt the Plan as set forth in
the following pages.
ARTICLE I
DEFINITIONS
The following terms when used herein shall have the
following meaning, unless a different meaning is clearly required
by the context.
1.01 Account. "Account" means the separate bookkeeping
record of each Participant's aggregate Employer Contributions
(as defined in paragraph 3.01 of this Plan), and any
Hypothetical Income or Loss thereon, which shall be valued as
of each Valuation Date.
1.02 Beneficiary. "Beneficiary" means the person(s) or
estate entitled to receive benefits under this Plan after the
death of a Participant.
1.03 Board. "Board" means the Board of Directors of SF
Services, Inc.
1.04 Code. "Code" means the Internal Revenue code of
1986, as amended, and including all regulations promulgated
pursuant thereto.
1.05 Company. "Company" means SF Services, Inc.
1.06 Compensation. "Compensation" means the base
compensation (as defined in the Participant's Employment
Agreement) earned as an employee for personal services rendered
to the Employer for the Plan Year.
1.07 Effective Date. "Effective Date" means April 7, 1997
1.08 Eligible Employee. "Eligible Employee" means an
employee who is an Executive Employee, as defined herein. The
Board of Directors of the Employer shall have the sole and
absolute discretion to determine which employees with the
Employer shall be considered eligible.
1.09 Employer. "Employer" means SF Services, Inc., an
Arkansas agricultural cooperative, or a subsidiary thereof
which is the employer of the Participant.
1.10 ERISA. "ERISA" means the Employee Retirement
Income Security Act of 1974, as amended from time to time.
1.11 Executive Employee. shall mean those persons in
the regular full-time employment of the Employer who are key
employees and who are members of the management staff and who
are specifically selected for participation in the Plan by
the Employer.
1.12 Employer Contribution. means the contribution
made by the Employer to the Plan, as specified in paragraph
3.01, herein.
1.13: Hypothetical Income or Loss: means the income or
loss as measured by the Hypothetical Investments described in
Paragraph 3.03 of the Plan, in which the Participant is deemed
to have invested. The Employer shall be under no obligation
to invest any portion of its general assets in any mutual
funds, stocks, bonds or other investments in order to
accumulate funds for the satisfaction of its obligations under
this Plan. The bookkeeping accounts described in paragraph
1.01 will equal the amounts of principal and gain or loss that
would have resulted if the amounts contributed in Paragraph
3.01 had actually been invested in the Hypothetical Investments
described in Paragraph 3.03 and may, but shall not necessarily,
correspond with the value of any assets retained by the Company
or transferred to a Trustee for the purposes of informally
funding the obligation(s) created by this Plan.
1.14 Participant. "Participant" means an Eligible
Employee or former employee who is or has been enrolled in
the Plan and who retains the right to benefits under the Plan.
1.15 Plan. "Plan" means this SF Services, Inc.
Non-Qualified Deferral Compensation Plan as amended from time
to time.
1.16 Plan Administrator. "Plan Administrator" means
the Plan Administrative Committee which shall be appointed by
the Employer.
1.17 Plan Year. "Plan Year" means the twelve month
period beginning January 1 and ending December 31. However,
the first Plan Year shall begin on April 7, 1997 and end on
December 31, 1997.
1.18 Trust. "Trust" means the SF Services, Inc.
Non-Qualified Deferred Compensation Trust which is a "rabbi
trust" in that all assets of the Trust will remain subject to
the claims of the Employer's creditors.
1.19 Trustee. "Trustee" means the trustee designated
pursuant to the Trust agreement which the Employer may establish
as provided in Paragraph 7.04 of this Plan.
1.20 Valuation Date. "Valuation Date" means the last
day of the Plan Year; provided however, that the Employer may
establish more frequent Valuation Dates.
ARTICLE II
PARTICIPATION
2.01 Eligibility for Participation. Eligible Employees
shall become a Participant in this Plan on the later of the
date they commence employment or the date the Employer has
selected an Eligible Employee for participation in the Plan.
A commitment by the Employer, in an Employment Agreement
or other legally binding contract, to provide the Employee
with a benefit under this Plan shall be deemed to be a selection
of that Employee to participate in the Plan.
ARTICLE III
CONTRIBUTIONS
3.01 Employer Contribution. A Participant shall be
entitled to receive an annual Employer Contribution. The amount
of the Employer Contribution shall be eight percent (8%) of
the Employee's Compensation, as defined herein. A Participant's
Employer Contribution shall be accounted for in the
Participant's Employer Contribution Account. For purposes
of valuing the Account, one-fourth (1/4) of the annual Employer
Contribution shall be deemed to have been allocated to the
Account on the last day of each Plan Year quarter. One-fourth
(1/4) of the annual Employer Contribution shall actually be
contributed to the Trust on the last day of each Plan Year
quarter, as provided in paragraph 7.04 of this Plan.
3.02 Vesting of Contributions. A Participant shall
always be 100% vested in the Employer Contribution Account .
3.03 Hypothetical Investment: In order to determine
the amount of the Hypothetical Income or Loss, the Participant
may elect to use a combination of the following hypothetical
investments, in increments of 10%. A Participant may elect
to reallocate his account effective on the first business
day of each calendar year quarter. The election must be
made by submitting instructions to the Administrator, on forms
provided by the Administrator, at least thirty (30) days prior
to the reallocation date. There will be no funds actually
invested by the Plan Administrator for the Participant in any
of these investments.
HYPOTHETICAL INVESTMENTS AVAILABLE: Any security or
other investment which is traded on a nationally registered
securities exchange excluding securities or obligations issued
by the Employer.
ARTICLE IV
PAYMENT
4.01 Eligibility for Payment.
(a) Distribution of vested Account shall be made
only after the later of the Participant's attainment of age
55 or actual retirement. Provided, however, that distribution
of vested Accounts shall also be permitted due to an
Unforeseeable Emergency.
(b) For purposes of this Section, "Unforeseeable
Emergency" means an unanticipated emergency that is caused by
an event beyond the control of the Participant that would
result in Severe Financial Hardship to the individual if early
withdrawal were not permitted. Unforeseeable Emergency shall
include, but not be limited to, the Participant's involuntary
unemployment for a duration of six (6) months or more. For
purposes of this section, Severe Financial Hardship will result
if the distribution is necessary in light of immediate and heavy
financial needs of the Participant, where such Participant lacks
other available resources.
(c) In the event of Unforeseeable Emergency on the
part of a Participant, the Participant may submit in writing
the facts and circumstances describing the hardship to the
Plan Administrator. The Plan Administrator shall review the
claim and determine if such claim meets the standards specified
above. If a favorable determination is made, the amount
available shall be limited to amount necessary to meet the
Unforeseeable Emergency and shall be paid out in a lump sum
payment, within thirty (30) days of the Participant's request.
(d) In the event of the Participant's death prior
to the full distribution of the Participant's Account, any
remaining Account balance shall be payable to the Participant's
beneficiary, in accordance with Paragraph 5.01(a) of this Plan.
4.02 Benefit Payment. Benefits, other than those due to an
Unforeseeable Emergency, hsall be paid over a period of five (5)
successive years commencing on the later of the date the Participant
attains age 55 or actual retires and continuing on the next four
anniversaries thereof. The amount distributed shall be determined
as follows:
ANNUAL PORTION OF
DISTRIBUTION REMAINING VESTED ACCOUNT
(as of most
recent Valuation Date)
First 20%
Second 25%
Third 33.3%
Fourth 50%
Fifth 100%
ARTICLE V
DEATH BENEFITS
5.01 Designation of Beneficiary.
(a) A Participant may designate one or more
Beneficiaries to receive the balance of the Participant's
Accounts in the event of the Participant's death on such form
as supplied by the Plan Administrator. A Participant may by
similar action designate a change of Beneficiary at any time,
which change shall be effective only upon receipt by the Plan
Administrator of said notice. The last such designation form
filed with the Plan Administrator shall control.
(b) In the absence of a written designation, or
in the event a Participant dies without a Beneficiary surviving
him, the amount which would otherwise be payable to his
Beneficiary shall be paid to the surviving spouse of such
Participant or if none, to such Participant's estate. A
Beneficiary shall have no interest or rights under the Plan
during the lifetime of the Participant, except as may be
provided otherwise in the Plan, ERISA or the Code.
ARTICLE VI
ADMINISTRATION
6.01 Fiduciaries.
(a) Any fiduciary shall have only those powers,
duties, responsibilities, and obligations which are specifically
allocated to them under the Plan. Notwithstanding the foregoing,
any person may serve in more than one fiduciary capacity.
(b) Each fiduciary warrants that any directions
given, information furnished, or action taken by it shall be in
accordance with the provisions of the Plan authorizing or
providing for such direction, information or action. Furthermore,
each fiduciary may rely upon any such direction, information
or action of any other named fiduciary as being proper under the
Plan, and is not required to inquire into the propriety of any
such direction, information or action. No fiduciary shall be
deemed to have guaranteed the Trust in any manner against
investment loss or depreciation in asset value.
6.02 Powers and Responsibilities of the Company and
Employers.
(a) An Employer shall supply such information as
may be requested by the Plan Administrator or the Trustee
including information with respect to compensation, service,
age, retirement, death, termination of employment of any Employee
or Participant.
(b) The Company shall receive and review reports of
the receipts and disbursements of the Trust from the Trustee;
(c) The Company shall file or cause to be filed
with the appropriate government agency (or agencies) any required
reports, summary plan description, and any other pertinent
documents.
6.03 Plan Administrator. The "named fiduciary" (as
defined in Section 402 of ERISA) of the Plan is the Plan
Administrative Committee which is also designated under
Paragraph 1.15 of the Plan as the Plan Administrator.
6.04 Powers and Responsibilities of the Plan Administrator.
The Plan Administrator shall carry out the daily management
of the Plan in accordance with its terms and shall have the
power to determine all questions arising in connection with the
administration, interpretation, and application of the Plan.
Any such determination by the Plan Administrator shall be
conclusive and binding upon all persons. The Plan Administrator
may correct any defect, supply any information, or reconcile
any inconsistency in such manner and to such extent as shall
be deemed necessary or advisable to carry out the purpose of
this Plan; provided, however, that any interpretation or
construction shall be made and applied in a nondiscriminatory
manner. The Plan Administrator shall have such powers and
duties, unless otherwise provided herein, as may be necessary
to discharge its duties hereunder, including, but not limited
to, the power and duty:
(a) to construe and interpret the Plan, decide
all questions of eligibility for payment of any benefits
hereunder;
(b) to adopt such rules, such procedures and
forms as it deems appropriate;
(c) to make a determination as to the right of
any person to a benefit and to afford any person dissatisfied
with such determination the right to a hearing thereon;
(d) to receive from an Employer and from Employees
such information as shall be necessary for the proper
administration of the Plan;
(e) to delegate to one or more of the members of
the Committee the right to act in its behalf in all matters
connected with the administration of the Plan and Trust and
to delegate ministerial matters to its agents or employees,
who need not be members of the Committee;
(f) to furnish any Employee and each Beneficiary
receiving benefits hereunder a summary plan description
explaining the Plan unless exempted under ERISA;
(g) to furnish any Employee or Beneficiary who
requests in writing statements indicating such Employee's or
Beneficiary's Account balance;
(h) to maintain all records necessary for
verification of information required to be filed with any
governmental agency;
(i) to report to the Trustee all available
information regarding the amount of benefits payable to each
Participant, the computations with respect to the allocation
of assets, and any other information which the Trustee may
require;
(j) to retain such agents, and employees,
including legal counsel (which may be counsel for the
Employer), as it deems appropriate for the discharge of its
duties hereunder.
6.05 Voting of Securities. The Plan Administrator may
direct the Trustee as to the manner in which voting, dissenter's
or other stockholder's rights of securities held by the Trust
are to be exercised.
6.06 Decisions of the Plan Administrator. The decisions
of the Plan Administrator shall be conclusive and binding upon
the Company, the Employers, the Trustee and all Employees,
Participants and Beneficiaries. All decisions of the Plan
Administrator which involve the exercise of discretion shall
be made upon the basis of uniform principles established in
this Plan and by the Plan Administrator.
6.07 Records and Statements. The Plan Administrator
shall maintain such records as may be required by law, the Plan
or as it otherwise deems appropriate for the administration of
the Plan. Such records shall be subject to the inspection by
the Company, the Employers and of any Participant or Beneficiary,
but only to the extent that they apply to him.
6.08 Payment of Expenses. All expenses incident to the
administration, termination or protection of the Plan and Trust,
including but not limited to, legal, accounting, actuarial and
Trustee's fees shall be paid by the Employer.
6.09 Benefit Claims Procedure. The Plan Administrator
shall make all determinations as to the right of any such person
to any benefit under the Plan. Any Participant, Beneficiary, or
the authorized representative of either of the foregoing may file
a request for benefits under the Plan. Such request shall be
deemed filed when made in writing addressed or hand-delivered
to the Plan Administrator in care of the Employer. Such request
shall be on such form and pursuant to such rules as are adopted
by the Plan Administrator and shall set forth the basis of
such claim. Upon receipt of such claim, the Plan Administrator
shall conduct such examinations as may be necessary to
determine the validity of the claims and, if appropriate,
shall take such steps as may be necessary to facilitate the
payment to which the claimant is entitled.
6.10 Claims Review Procedure. If any claim for
benefits is denied, the Plan Administrator shall notify the
claimant in writing. The notice of the denial of benefits
shall state the specific reason for such denial and cite any
applicable provisions of the Plan upon which the denial is
based. If the claim can be corrected, a request for such
information shall be made and the reason for requesting
such additional information shall be stated in the notice
to the claimant. The claimant shall be entitled to appeal
the decision to the Plan Administrator for a period of sixty
(60) days after receipt of the notification of denial. The
claimant shall be advised that the failure to perfect and
appeal within such sixty (60) day period shall make the Plan
Administrator's decision conclusive. The Plan Administrator
shall furnish the claimant or his personal representative any
Plan information needed to perfect his appeal.
6.11 Unclaimed Benefits. Each Participant and
Beneficiary of a deceased Participant shall file with the
Plan Administrator from time to time in writing, his home
address and each change of home address. Any communication
addressed to the Participant or the Beneficiary at his last
home address filed with the Plan Administrator, or if no such
address was filed, then at his last home address as shown on
the Employer's records, shall be binding on the Participant or
Beneficiary for all purposes of the Plan. The Plan
Administrator shall not be obligated to search for or
ascertain the whereabouts of any Participant or Beneficiary.
If the Plan Administrator furnishes notice to any Participant
or Beneficiary of a deceased Participant, that he is entitled
to a distribution and the Participant or Beneficiary fails to
claim such distribution or make his whereabouts known to the
Plan Administrator, such benefit shall be retained by the
Plan until the earliest of (i) the date of the Plan is
terminated without the establishment of a successor plan, or
(ii) the date the Employer is liquidated. Such Participant's
benefit shall then be disposed of as follows:
(a) If the Participant has not been located by
the time of distribution of assets, and that the whereabouts
of the Beneficiary of such Participant then is known to the
Plan Administrator, payment shall be made to such Beneficiary.
(b) If the whereabouts of both such Participant
and his beneficiary are unknown to the Plan Administrator, the
Plan Administrator may direct the distribution of such
Participant's benefit to the Employer.
6.12 Indemnification. The Employer shall indemnify
each member of each committee appointed by it and each other
fiduciary with respect to the Plan from and against any and
all liabilities, costs, damages or expenses occasioned by any
act or omission, to the extent required by the Employer's Bylaws,
court decision or individual agreement with such fiduciary, but
not in any event when the same is judicially determined to be
due to the gross negligence willful misconduct or fraud of such
member. The Employer may purchase insurance to the extent
deemed appropriate in connection with such indemnification.
ARTICLE VII
FUNDING AND RELATED MATTERS
7.01 Compliance With Applicable Law. It is the intent
of the Employer to comply with Title I of ERISA. With respect
to such Title, this Plan is intended to be an unfunded plan
(in that it will be "informally funded" through utilization of
the Trust) maintained primarily for the purpose of providing
deferred compensation for a select group of management or
highly compensated employees and it is not intended that any
separate trust or other pool of assets shall exist solely for
the payment of benefits.
7.02 Valuation of Accounts. As of each Valuation Date,
and at such other times as the Plan Administrator shall direct,
the Plan Administrator shall ascertain the fair market value
of the Accounts as of such day. Whenever the term "balance
of the Participant's Accounts" is used herein this shall mean
the balance of the Participant's Accounts as of the last
Valuation Date as determined by the Plan Administrator, plus
any Employer Contributions which have been made but not yet
included in the last valuation.
7.03 Protective Clause. Neither the Employers, the
Board, the Trustee nor the Plan Administrator shall be
responsible for the validity of any contract of insurance
issued in connection with the Plan or Trust or for the
failure on the part of the insurer to make payments provided
by such contract, or for the action of any person which may
delay payment or render a contract null and void or unenforceable
in whole or in part.
7.04 Unsecured General Creditor: The Participant,
Beneficiary and any other person or persons having or claiming
a right to payments hereunder or to any interest in this Plan
shall rely solely on the unsecured promise of the Employer set
forth herein, and nothing in this Plan shall be construed to
give the Participant, Beneficiary, or any other person or
persons any right, title, interest or claim in, or to, any
specific asset, fund, reserve, account or property of any kind
whatsoever owned by the Employer or in which it may have any
right, title or interest now or in the future. The Employer
shall, however, informally fund its obligations under this
Plan through the establishment and maintenance of a Trust.
The Employer will make contributions to the Trust, at the
end of each calendar quarter, in the amount described in
Paragraph 3.01 of this Plan. Once contributed, any and all
Trust assets will remain subject to the claims of the Employer's
creditors, and the Plan shall remain an unfunded plan within
the regulatory framework of ERISA.
ARTICLE VIII
AMENDMENT AND TERMINATION
8.01 Amendment. The Committee, as authorized by the
Board, shall have the right to amend this Plan, at any time
and from time to time, in whole or in part. The Board shall
notify each Participant within a reasonable time after such
amendment in writing of any Plan amendment. No such amendment
shall reduce or eliminate the benefits of a Participant which
have accrued up to the effective date of the amendment.
8.02 Termination. Although the Company has established
this Plan with a bona fide intention and expectation to maintain
the Plan indefinitely, the Committee, as authorized by the Board,
may terminate the Plan in whole or in part at any time without
any liability for such termination or discontinuance. Upon
Plan termination, all Contributions shall cease and the
Committee and the Participant may mutually agree that the
Participant's Account shall be paid immediately upon plan
termination. If the Employer establishes a retirement plan
qualified under 401 of the Internal Revenue Code, and to the
extent permitted by applicable law, the Employer and Participant
may mutually agree that the Participant may transfer the
Account to such qualified plan upon plan termination. If
no such mutual agreements are reached, the Committee shall
retain all Accounts until each Participant would otherwise
receive payment pursuant to the Plan.
ARTICLE IX
MISCELLANEOUS
9.01 Limitation of Rights; Employment Relationship.
Neither the establishment of this Plan nor any modification
thereof, nor the creation of any fund or account, nor the
payment of any benefits, shall be construed as giving a
Participant or other person any legal or equitable right
against the Employer except as provided in the Plan. In
no event shall the terms of employment of any employee be
modified or in any way be affected by the Plan.
9.02 Limitation on Assignment.
(a) Benefits under this Plan may not be assigned
or alienated by any Participant or a Participant's Beneficiary.
A Participant's or Beneficiary's interest in benefits under the
Plan shall not be subject to debts or liabilities incurred by
the Participant or the Beneficiary and shall not be subject
to attachment, garnishment or other legal process as a result
of any of the Participant's or Beneficiary's debts or
liabilities.
(b) The provisions of this Section shall not apply
to the extent a Participant or Beneficiary is indebted to the
Employer for any reason. At the time a distribution is to be
made to or for his benefit, such proportion of the amount
distributed as shall equal such indebtedness shall be paid to
the Employer to apply against or discharge such indebtedness.
9.03 Representations. The Company does not represent
or guarantee that any particular federal or state income,
payroll, personal property or other tax consequence will
result from participation in this Plan. A Participant should
consult with professional tax advisors to determine the tax
consequences of his or her participation.
9.04 Severability. In the event that any provision
of this Plan shall be held illegal or invalid for any reason,
the illegality or invalidity shall not affect the remaining
provisions of this Plan, but shall be fully severable and the
Plan shall be construed and enforced as if the illegal or
invalid provision had never been inserted herein.
9.05 Governing Law. The validity, construction, and
effect of this Plan and its enforcement shall be determined by
ERISA and by the common law of trusts as developed under ERISA.
9.06 Binding Effect. The provisions of this Plan
shall be binding upon each Participant and each Beneficiary
or other person entitled to any Benefits hereunder, their
heirs, personal representatives, and assigns.
SF Services, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
------------------
Title: President & CEO
EXHIBIT B
Relocation Expense Proposal
Temporary living Airfare to and from former residence
to conduct personal business, maximum
four round trips. May be used by
Employee or a person of his choice.
Premove/househunting Airfare, lodging, and meals, maximum
trips to Little Rock two round trips.
Shipment of household Packing and transportation of household goods
goods Appliance disconnection and reconnection
In transit storage, maximum sixty days
Carton pickup within thirty days of delivery
Expenses en route to Meals, lodging, and mileage reimbursement
new location at 31.5 cents/mile.
Home purchase expenses Prepurchase valuation of proposed home by
(Employee will have independent appraiser.
18 months after
employment to use
this home purchase Purchase closing costs including, but not
benefit) limited to, the following:
Loan origination fee and/or discount
points (maximum 2 points),
Appraisal fee, credit report, lender
inspection fee, abstracting fee, attorney
fee, radon testing, and termite inspection.
Tax liability Benefit of tax allowance for the employee,
allowance based on the employee's federal, state,
and city tax liability resulting from
moving expense reimbursement. Payment
to be made using the employee's
applicable marginal tax rates, grossed-up,
and directly deposited into employee's
tax account at the Employer.
