COLLINS INDUSTRIES, INC.

DEFERRED COMPENSATION PLAN

 

INTRODUCTION

The purpose of this Plan is to provide eligible executives of Collins
Industries, Inc. and its affiliated entities with a means of accumulating
additional funds for retirement on a tax-deferred basis. This Plan is designed
and shall at all times be administered as an unfunded arrangement and not a
qualified arrangement under Section 401(a) of the Internal Revenue Code of 1986,
as amended.

DEFINITIONS

"Administrator" means the Board or its designee. "Beneficiary" means the person
who becomes entitled to receive a Participant's Deferred Benefit Account in the
event of the Participant's death. The Participant may designate a primary and
contingent Beneficiary by filing a written notice of such designation with the
Administrator in the manner prescribed by and acceptable to the Administrator.
The Participant may from time to time change the designated Beneficiary by
filing a new designation in writing with the Administrator. If no designation is
in effect at the time any benefits payable under this Plan shall become due, the
Beneficiary shall be the spouse of the Participant, or if no spouse is then
living, the Participant's estate. "Board" means the Board of Directors of the
Sponsor or any committee thereof acting within the scope of its authority.
"Compensation" means the Participant's base salary and incentive compensation
paid by his Employer with respect to services rendered by such Participant
during a Plan Year. "Deferral Contributions" means the portion of a
Participant's Compensation that is credited to his Deferred Benefit Account
pursuant to a Compensation reduction agreement by and between the Participant
and his Employer. "Deferred Benefit Account" means the bookkeeping account and
sub-account(s) maintained by the Employer to reflect each Participant's interest
in the Plan. "Determination Date" means the last day of each calendar quarter,
and such other more frequent dates as the Administrator shall specify as of
which a Participant's Deferred Benefit Account is determined in accordance with
Article IV. "Disability" means a permanent physical or mental impairment that
renders a person incapable of continuing to perform satisfactory services for
the Employer and qualifies such person for disability benefits under the
Employer's long term disability plan. If no such long term disability plan is
maintained by the Employer or the person is not a participant in such plan, then
the determination of whether a Participant is permanently disabled shall be made
by the Administrator upon the basis of competent medical advice obtained in the
sole discretion of the Administrator. "Effective Date" means January 1, 2002,
the effective date of this Plan. "Employer" means the Sponsor and its affiliated
entities, if any, that are authorized by the Sponsor to participate in the Plan.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"Participant" means an employee of the Employer who has met the eligibility
requirements for participation, or a former employee who has a Deferred Benefit
Account maintained on his behalf. "Plan" means this Collins Industries, Inc.
Deferred Compensation Plan, as amended from time to time. "Plan Year" means (i)
with respect to the initial Plan Year, the period commencing on the Effective
Date of the Plan and ending on December 31, 2002, and (ii) with respect to each
Plan Year thereafter, the twelve month period beginning each January 1 and
ending on the following December 31. Notwithstanding the foregoing, if a
Participant commences participation in the Plan after the first day of any
calendar year, then his initial "Plan Year" shall commence on his date of
participation and end on the following December 31. "Sponsor" means Collins
Industries, Inc. or any successor entity.

PARTICIPATION AND COMPENSATION REDUCTION

Participation. Participation in the Plan shall be limited to employees of an
Employer who (i) qualify for inclusion in a "select group of management or
highly compensated employees" within the meaning of Sections 201(2), 301(a)(3),
401(a)(1) and 4021(b)(6) of ERISA, (ii) are not eligible to participate in the
Sponsor's tax-qualified 401(k) savings plan, and (iii) are designated by the
Administrator as being eligible to participate. If the Administrator determines
in good faith that a Participant no longer qualifies as being a member of a
"select group of management or highly compensated employees," the Administrator
shall direct the Employer to (i) terminate the Participant's Compensation
reduction agreement then effect, (ii) prevent the Participant from making future
Deferral Contributions, and/or (iii) immediately pay any amounts then due to
Participant under the Plan and terminate his participation in the Plan.
Compensation Reduction Election. Prior to the first day of each Plan Year (or
initial enrollment in the case of new Participants), a Participant shall
designate the portion of his Compensation payable during such Plan Year to be
deferred under the terms of this Plan. A Participant's election under this
Section 3.2 shall be subject to any minimum and/or maximum deferral percentages
and/or dollar amounts prescribed by the Administrator. A separate Compensation
reduction agreement shall be required for each Plan Year. Irrevocability of
Election. Except as otherwise specifically set forth elsewhere in this Plan, a
Participant's Compensation reduction election for any Plan Year shall be
irrevocable during such year. FICA and Other Taxes. For each Plan Year in which
a Participate participates in the Plan, the Employer shall, to the extent
required by applicable law, withhold from that portion of the Participant's
Compensation that is not being deferred under this Plan, the Participant's share
of any FICA or other applicable taxes on such deferred amount. If necessary, the
Administrator may reduce a Participant's deferred amount in order to fund the
required withholding.

DEFERRED BENEFIT ACCOUNT

Crediting of Deferral Contributions. Each Participant's Deferral Contributions
shall be credited to his Deferred Benefit Account as soon as administratively
practicable following the payroll and/or bonus payment date such Deferral
Contributions would have been paid to the Participant but for his Compensation
reduction election under this Plan. Balance of Deferred Benefit Account. As of
each Determination Date, the amount credited to a Participant's Deferred Benefit
Account shall be the amount credited to his Deferred Benefit Account as of the
immediately preceding Determination Date, plus the Participant's Deferral
Contributions since the immediately preceding Determination Date, minus any
amount that is paid to or on behalf of a Participant subsequent to the
immediately preceding Determination Date, plus or minus any hypothetical
investment gains or losses determined in the manner set forth in Section 4.3
below. Hypothetical Earnings Credits.
 a. The Administrator shall designate the "measurement funds" to be used for
    purposes of debiting or crediting hypothetical earnings on the amounts
    credited to each Participant's Deferred Benefit Account. The Administrator
    from time to time may discontinue, substitute or add a measurement fund,
    provided that any such action to discontinue or substitute any measurement
    fund may only take effect following at least thirty (30) days advance
    written notice of such change to the Participants.
 b. At the time of his initial enrollment in the Plan, each Participant shall
    elect, from among the measurement funds offered under the Plan, the
    measurement funds to be used for purposes of determining the hypothetical
    investment returns to be credited or debited to his Deferred Benefit
    Account. A Participant may thereafter elect to modify his investment
    elections as of the first day of any subsequent Plan Year or such other more
    frequent dates as the Administrator shall specify. A Participant's
    investment elections hereunder shall apply with respect to both his existing
    Deferred Benefit Account and his future Deferral Contributions.

(c) As of each Determination Date, a Participant's Deferred Benefit Account
shall be credited or debited, as the case may be, with hypothetical earnings
based on the actual investment performance of the applicable measurement fund(s)
selected by the Participant; provided, however, following a Participant's
termination of employment for any reason other than retirement on or after
attaining age 55, the Administrator, in its discretion, may reduce the
investment earnings credited to a Participant's Deferred Benefit Account to take
into account any Federal and/or state taxes paid by the Employer with respect to
realized capital gains, dividends and other income recognized by the Employer by
virtue of its actual ownership of such measurement fund(s).

(d) Notwithstanding any other provision of this Plan or any notice, statement,
summary or other communication provided to a Participant that may be interpreted
to the contrary, the measurement funds are to be used for measurement purposes
only, and a Participant's election of any such measurement fund, the
determination of credits and debits to his Deferred Benefit Account based on the
measurement funds, the Employer's actual ownership of the measurement funds, and
any authority granted by the Employer to a Participant to change the investment
of the Employer's assets, if any, may not be considered or construed in any
manner as an actual investment of the Deferred Benefit Account in any such
measurement fund or to constitute a funding of this Plan.

Vesting. Each Participant shall be fully vested in his Deferred Benefit Account
at all times.

PAYMENT OF BENEFITS

Deferred Benefit Account Payout.
 a. Prior to the first day of each Plan Year (or initial enrollment in the case
    of new Participants), each Participant must specify the date as of which the
    portion of his Deferred Benefit Account attributable to such Plan Year shall
    be paid or commence; provided, however, no such election shall result in a
    deferral of more than twenty (20) years (including for this purpose the
    period of any installment distribution). A Participant from time to time may
    modify his designated benefit commencement date; provided, however, no such
    modification shall be accepted by the Administrator unless it is made at
    least twelve (12) months prior to the Participant's designated benefit
    commencement date then in effect. A Participant shall be required to make a
    separate benefit commencement election under this Section 5.1(a) with
    respect to each Plan Year of participation.
 b. Prior to the first day of each Plan Year (or initial enrollment in the case
    of new Participants), each Participant must specify the form in which the
    portion of his Deferred Benefit Account attributable to such Plan Year shall
    be paid. The optional forms of payment include:

    (i) a single lump sum,

    (ii) annual installments over a period of five (5) years, or

    (iii) annual installments over a period of ten (10) years.

    If a Participant elects an installment form of payment, each such
    installment payment will be determined annually by dividing the balance of
    the Participant's Deferred Benefit Account at the time of payment by the
    remaining installment payments due. An installment form of payment shall be
    subject to the limitation described in Section 5.1(c) below. A Participant
    shall be required to make a separate benefit payment election under this
    Section 5.1(b) with respect to each Plan Year of participation.

 c. Notwithstanding the foregoing provisions of this Section 5.1 or any other
    provision in this Plan to the contrary, (i) in the event of a Participant's
    death, the unpaid balance of the Participant's Deferred Benefit Account
    shall be paid in a single lump sum to his designated Beneficiary no later
    than ninety (90) days following the last day of the Plan Year in which the
    Participant's death occurs; and (ii) in the event of a Participant's
    Disability, the Administrator, in its discretion, may direct that the unpaid
    balance of the Participant's Deferred Benefit Account be paid in a single
    lump sum notwithstanding any payment election of the Participant to the
    contrary.

Acceleration of Deferred Benefit Account Payout.
 a. Notwithstanding any provision in this Plan to the contrary, in the event the
    Administrator determines that all or any portion of the Deferred Benefit
    Account of a Participant is subject to federal income taxation prior to
    actual receipt of distributions from such account, the Employer shall, as
    soon after such determination as is reasonably practicable, distribute an
    amount to the Participant from his Deferred Benefit Account to fund the
    payment of income tax liabilities arising from such determination.

(b) In the event a Participant incurs a financial hardship (as hereinafter
defined), the Participant may request, in the manner prescribed by the
Administrator, that he be permitted to terminate his Compensation reduction
agreement then in effect and/or receive a distribution from his Deferred Benefit
Account equal to the amount of his financial hardship. Any such hardship
distribution shall result in an automatic suspension of the Participant's
Compenstion reduction agreement then in effect for a period of at least six (6)
months. For purposes of the foregoing, a "financial hardship" 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 Participant
resulting from (i) a sudden and unexpected illness or accident of the
Participant or a dependent of the Participant, (ii) a loss of the Participant's
property due to casualty, or (iii) such other extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant, all as determined by the Administrator. The Administrator shall
approve or disapprove a Participant's request pursuant to this Section.

5.3 Tax Withholding. To the extent required by law in effect at the time payment
is made or Compensation is deferred hereunder, the Employer shall withhold any
taxes required to be withheld by any Federal, State or local government from any
benefit payment.

CLAIMS FOR BENEFITS PROCEDURE

Claim for Benefits. Any claim for benefits under the Plan shall be made in
writing to the Administrator. Such claim shall be reviewed by the "claims
representative" (which term shall mean the Administrator, unless another person
or committee is designated by the Board to serve as the claims representative)
and communicated to the claimant within 90 days after the receipt of such claim
unless special circumstances require an extension of time, in which case the
90-day period shall be extended to 180 days. If the claims representative denies
a claim for benefits in whole or in part, the notice of denial shall be made in
writing and shall contain:
 a. the specific reason or reasons for denial of the claim;
 b. a reference to the relevant Plan provisions upon which the denial is based;
 c. a description of any additional material or information necessary for the
    claimant to perfect the claim, together with an explanation of why such
    material or information is necessary; and
 d. an explanation of the Plan's claim review procedure.

If no such notice is provided, the claim shall be deemed granted.

Request for Review of a Denial of a Claim for Benefits. Upon the receipt by the
claimant of written notice of denial of the claim, the claimant may within 60
days file a written request to the Administrator (or other person or committee
designated by the Board to review appeals of denied claims) requesting a review
of the denial of the claim, which review shall include a hearing if deemed
necessary by the Administrator. In connection with the claimant's appeal of the
denial of his claim, he may review relevant documents and may submit issues and
comments in writing. Decision Upon Review of Denial of Claim for Benefits. The
Administrator shall render a decision on the claim review promptly, but no more
than 60 days after the receipt of the claimant's request for review, unless
special circumstances (such as the need to hold a hearing) require an extension
of time, in which case the 60 day period shall be extended to 120 days. Such
decision shall:
 a. include specific reasons for the decision;
 b. be written in a manner calculated to be understood by the claimant; and
 c. contain specific references to the relevant Plan provisions upon which the
    decision is based.

The decision of the Administrator shall be final and binding in all respects on
both the Employer and the claimant.

ADMINISTRATION

General Rights,  Powers, and Duties of Administrator. The Administrator shall be
responsible for the management, operation, and administration of the Plan and
shall have the following powers and duties, in addition to any powers, rights
and duties set forth elsewhere in the Plan:
 a. to adopt such rules and regulations consistent with the provisions of the
    Plan as it deems necessary for the proper and efficient administration of
    the Plan;
 b. to administer the Plan in accordance with its terms and any rules and
    regulations it establishes;
 c. to maintain records concerning the Plan sufficient to prepare reports,
    returns and other information required by the Plan or by law;
 d. to construe and interpret the Plan and resolve all questions arising under
    the Plan;
 e. to direct the Employer to pay benefits under the Plan, and to give such
    other directions and instructions as may be necessary for the proper
    administration of the Plan;
 f. to employ or retain agents, attorneys, actuaries, accountants or other
    persons, who may also be Participants in the Plan or be employed by or
    represent the Employer, as it deems necessary for the effective exercise of
    its duties. and may delegate to such agents any power and duties, both
    ministerial and discretionary, as it may deem necessary and appropriate; and
 g. to be responsible for the preparation, filing and disclosure on behalf of
    the Plan of such documents and reports as are required by any applicable
    Federal or State law.

Information to be Furnished to Administrator. The Employer shall furnish the
Administrator such data and information as it may require. The records of the
Employer shall be determinative of each Participant's period of employment,
termination of employment and the reason therefor, leave of absence,
reemployment, personal data, and Compensation reductions. Participants and their
Beneficiaries shall furnish to the Employer and Administrator such evidence,
data, or information, and execute such documents as the Employer or
Administrator reasonably requests. Responsibility. No member of the Board or any
person appointed by the Board to serve as "Administrator" or "claims
representative" shall be liable to any person for any action taken or omitted in
connection with the administration of this Plan. Administrator Review. Any
action on matters within the discretion of the Administrator shall be final and
conclusive as to all Participants, former Participants, Beneficiaries and other
persons claiming rights under the Plan. The Administrator shall exercise all of
the powers, duties and responsibilities set forth hereunder in its sole
discretion.

NO FUNDING

Title to and beneficial ownership of all assets of the Employer shall at all
times remain in the Employer, except as otherwise required by the payment
provisions hereof. No Participant (or Beneficiary of any such Participant) shall
have any property interest whatsoever in any specific assets of the Employer. No
trust arrangement for the benefit of Participants is intended to be created
under this Plan and no Participant shall have any rights under this Plan greater
than those of an unsecured general creditor of the Employer. Neither the
Deferred Benefit Accounts, nor any asset of the Employer, shall be held in any
way as security for the Employer's obligations under this Plan. The Deferred
Benefit Account of each Participant shall be, and shall remain, a bookkeeping
entry only, and this Plan shall not cause any of the Employer's assets to be
pledged or otherwise restricted.

ESTABLISHMENT OF TRUST

The Employer shall establish and fund a "rabbi trust" for the purpose of
assisting it in meeting its obligations to Participants under this Plan. The
provisions of this Plan shall govern the rights of a Participant to receive
distributions pursuant to the Plan and the provisions of the Trust shall govern
the rights of the Employer, Participants and the creditors of the Employer to
the assets transferred to the Trust. Each Employer shall at all times remain
liable to carry out its obligations under the Plan.

AMENDMENT AND TERMINATION

Amendment. The Board may amend the Plan, in whole or in part, retroactively or
prospectively, at any time. Notice of any such amendment shall be given to each
Participant, former Participant and each Beneficiary. No amendment shall
decrease the amount credited to a Participant's Deferred Benefit Account as of
the date of such amendment or the Participant's rights with respect to that
amount. Board's Right to Terminate. The Board may terminate the Plan at any
time. In the event of any such termination, the Participant's Deferred Benefit
Account shall be paid to the Participant in a single lump sum as soon as
administratively practicable following such termination date.

MISCELLANEOUS

No Implied Rights. Neither the establishment of the Plan nor any amendment
thereof shall be construed as giving any Participant, Beneficiary, or any other
person any legal or equitable right unless such right shall be specifically
provided for in the Plan or conferred by specific action of the Employer in
accordance with the terms and provisions of the Plan. Except as expressly
provided in this Plan, the Employer shall not be required or be liable to make
any payment under the Plan. No Employment Rights. Nothing herein shall
constitute a contract of employment or of continuing service or in any manner
obligate the Employer to continue the services of a Participant, or obligate a
Participant to continue in the service of the Employer, or as a limitation of
the right of the Employer to discharge any of its employees, with or without
cause. Nothing herein shall be construed as fixing or regulating the
compensation payable to a Participant. Offset. If at the time any benefit
payment is to be made hereunder the Participant (or any beneficiary of such
Participant) is indebted or obligated to the Employer, then the payment
remaining to be made to the Participant or Beneficiary may, at the discretion of
the Employer, be reduced by the amount of such indebtedness or obligation;
provided, however, that an election by the Employer not to reduce any such
payment shall not constitute a waiver of its claim for such indebtedness or
obligation. Non-assignability. Neither the Participant nor any other person
shall have any voluntary or involuntary right to assign, pledge, encumber or
otherwise transfer any amounts payable hereunder in advance of actual receipt.
No part of the amounts payable shall be, prior to actual payment, subject to
seizure or sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by the Participant or any other person, or be
transferable by operation of law in the event of the Participant's or any other
person's bankruptcy or insolvency. Expenses. The Sponsor shall pay expenses of
administration. Gender and Number. Wherever appropriate herein, the masculine
shall mean the feminine and the singular may mean the plural or vice versa.
Notice. Any notice required or permitted to be given under the Plan shall be
sufficient if in writing and hand delivered, or sent by registered or certified
mail, and if given to the Employer, delivered to the principal office of the
Employer, directed to the attention of the Administrator. Such notice shall be
deemed given as of the date of delivery or, if delivery is made by mail, as of
the date shown on the postmark or the receipt for registration or certification.
Governing Laws. The Plan shall be construed and administered according to the
laws of the State of Kansas, except to the extent preempted by ERISA or other
applicable federal law.

SIGNATURE PAGE

IN WITNESS WHEREOF, the Sponsor has caused this document to be executed this
27th day of November, 2001, but effective as of the date set forth herein.

 

 

COLLINS INDUSTRIES, INC.

 

"Sponsor"

     

By: /s/ Donald Lynn Collins

 

Title: President & CEO