EXHIBIT 10.2

 

OFFICEMAX INCORPORATED

Executive Savings Deferral Plan

 

 

Effective January 1, 2005

 

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FOREWORD

 

Effective January 1, 2005, OfficeMax Incorporated has adopted the Executive
Savings Deferral Plan for the benefit of certain of its executives and key
employees.

 

This Plan is intended to provide executives and key employees of OfficeMax and
its subsidiaries the opportunity to defer a portion of their cash compensation
and to accumulate deferred compensation that cannot be accumulated under the
OfficeMax Savings Plan because of certain legal, administrative, and plan
document restrictions that are imposed upon the permissible amounts of
contributions that may be made to the OfficeMax Savings Plan.

 

This Plan is an unfunded deferred compensation plan for “a select group of
management or highly compensated employees,” within the meaning of the Employee
Retirement Income Security Act of 1974, as amended.

 

ARTICLE I

DEFINITIONS

 

Except to the extent otherwise inappropriate in the context, the following terms
shall have the following meanings when used in this document.

 

1.1           ACCOUNT means the balance credited to a Participant’s or
beneficiary’s Plan bookkeeping account, including contribution credits and
deemed income, gains and losses credited thereto.  A Participant’s or
beneficiary’s Account shall consist of a Supplemental Salary Deferral
Contributions Subaccount(s) and a Supplemental Company Matching Contributions
Subaccount(s).

 

1.2           ACJA means the American Jobs Creation Act of 2004 (Section 409A of
the Code), as amended from time to time, and regulations issued thereunder.

 

1.3           BASIC COMPENSATION means, for a given Plan Year, Compensation not
in excess of the applicable limit prescribed by Section 401(a)(17) of the Code
for that Plan Year.

 

1.4           BASIC PLAN means the OfficeMax Savings Plan, as in effect from
time to time.

 

1.5           BOARD means the Board of Directors of OfficeMax Incorporated.

 

1.6           BONUS means the payout amount (if any) earned by a Participant
under an incentive plan of the Company, but only to the extent the award is an
annual incentive award payable in cash.

 

1.7           A CHANGE IN CONTROL shall be deemed to have occurred if:

 

(a)           Any Person is or becomes the Beneficial Owner, directly or
indirectly of OfficeMax securities representing 25% or more of either the then
outstanding shares of OfficeMax common stock or the combined voting power of

 

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OfficeMax’s then outstanding securities; provided, however, if such person
acquires securities directly from OfficeMax, such securities shall not be
included unless such Person acquires additional securities which, when added to
the securities acquired directly from OfficeMax, exceed 25% of OfficeMax’s then
outstanding shares of common stock or the combined voting power of OfficeMax’s
then outstanding securities; and provided further that any acquisition of
securities by any Person in connection with a transaction described in
Section 1.7(c)(i) shall not be deemed to be a Change in Control; or

 

(b)           The following individuals cease for any reason to constitute at
least a majority of the number of directors then serving:  individuals who, on
the date hereof, constitute the Board and any new director (other than a
director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of OfficeMax) whose
appointment or election by the Board or nomination for election by OfficeMax’s
stockholders was approved by a vote of at least 2/3rds of the directors then
still in office who either were directors on the date hereof or whose
appointment, election, or nomination for election was previously so approved
(the “Continuing Directors”); or

 

(c)           The consummation of a merger or consolidation of OfficeMax (or any
direct or indirect subsidiary of OfficeMax) with any other corporation other
than (i) a merger or consolidation which would result in both (a) Continuing
Directors continuing to constitute at least a majority of the number of
directors of the combined entity immediately following consummation of such
merger or consolidation, and (b) the voting securities of OfficeMax outstanding
immediately prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity or any parent thereof) more than 50% of the combined voting
power of the voting securities of OfficeMax or such surviving entity or any
parent thereof outstanding immediately after such merger or consolidation, or
(ii) a merger or consolidation effected to implement a recapitalization of
OfficeMax (or similar transaction) in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of OfficeMax securities representing
25% or more of either the then outstanding shares of OfficeMax common stock or
the combined voting power of OfficeMax’s then outstanding securities; provided
that securities acquired directly from OfficeMax shall not be included unless
the Person acquires additional securities which, when added to the securities
acquired directly from OfficeMax, exceed 25% of the then outstanding shares of
OfficeMax common stock or the combined voting power of OfficeMax’s then
outstanding securities; and provided further that any acquisition of securities
by any Person in connection with a transaction described in Section 1.7(c)(i)
shall not be deemed to be a Change in Control of the Company; or

 

(d)           The OfficeMax stockholders approve a plan of complete liquidation
or dissolution of OfficeMax or the consummation of an agreement for the sale or
disposition by

 

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OfficeMax of all or substantially all of OfficeMax’s assets, other than a sale
or disposition by OfficeMax of all or substantially all of OfficeMax’s assets to
an entity, more than 50% of the combined voting power of the voting securities
of which are owned by Persons in substantially the same proportions as their
ownership of OfficeMax immediately prior to such sale.

 

A transaction described in Section 1.7(c) which is not a Change in Control
solely due to the operation of Subsection 1.7(c)(i)(a) will nevertheless
constitute a Change in Control if the Board determines, prior to the
consummation of the transaction, that there is not a reasonable assurance that,
for at least two years following the consummation of the transaction, at least a
majority of the members of the board of directors of the surviving entity or any
parent will continue to consist of Continuing Directors and individuals whose
election or nomination for election by the shareholders of the surviving entity
or any parent would be approved by a vote of at least two-thirds of the
Continuing Directors and individuals whose election or nomination for election
has previously been so approved.

 

For purposes of this Section, “Beneficial Owner” shall have the meaning set
forth in Rule 13d 3 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).

 

For purposes of this Section, “Person” shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof, except that “Person” shall not include (i) OfficeMax or any of its
subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of OfficeMax or any of its subsidiaries, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, (iv) a corporation owned, directly or indirectly, by the
stockholders of OfficeMax in substantially the same proportions as their
ownership of stock of OfficeMax, or (v) an individual, entity or group that is
permitted to and does report its beneficial ownership of securities of OfficeMax
on Schedule 13G under the Exchange Act (or any successor schedule), provided
that if the individual, entity or group later becomes required to or does report
its ownership of OfficeMax securities on Schedule 13D under the Exchange Act (or
any successor schedule), then the individual, person or group shall be deemed to
be a Person as of the first date on which the individual, person or group
becomes required to or does report its ownership on Schedule 13D.

 

1.8           CODE means the Internal Revenue Code of 1986, as amended.

 

1.9           COMMITTEE means the Executive Compensation Committee of the Board,
or any successor to the Committee.

 

1.10         COMPANY means OfficeMax and any of its subsidiaries which may be a
participating employer under the Basic Plan, together with their successors and
assigns, or any other

 

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entity which, with the foregoing’s consent, assumes the Company’s obligations
under this Plan.

 

1.11         COMPANY MATCHING CONTRIBUTIONS means the contributions made or
deemed made by the Company pursuant to Article IV.

 

1.12         COMPANY MATCHING CONTRIBUTIONS SUBACCOUNT means the account(s) on
the books of the Company to which a Participant’s Supplemental Company Matching
Contributions under Article IV, plus earnings and losses thereon, are credited.

 

1.13         COMPENSATION means, for a given Plan Year, a Participant’s Salary
and Bonus.  Compensation shall not include any amounts paid by the Company to a
Participant that are not strictly in consideration for personal services, such
as expense reimbursements, cost-of-living allowances, education allowances,
premiums on excess group life insurance, or any Company contribution to any
defined benefit or defined contribution plan sponsored by the Company; the fact
that an amount constitutes taxable income to the Participant shall not be
controlling for this purpose.  Compensation shall not include any taxable income
realized by, or payments made to, a Participant as a result of the grant or
exercise of an option to acquire OfficeMax stock, or compensation resulting from
the acquisition, exercise, or vesting of any stock appreciation right, stock
bonus, restricted stock, restricted stock units, phantom stock, performance
stock, or similar stock-based award under any incentive plan sponsored by the
Company, except to the extent the award is payable in cash or the Committee
determines that the award shall be included in Compensation for purposes of this
Plan.

 

1.14         EFFECTIVE DATE means January 1, 2005.

 

1.15         ELIGIBLE EMPLOYEE means a person employed by OfficeMax or a
subsidiary who is: (A) eligible to participate in the Basic Plan, and (B) a
“Restricted Highly Compensated Employee” as defined in the Basic Plan.

 

1.16         ENROLLMENT AND ELECTION FORM means the form on which a Participant
elects to defer compensation and makes other required designations.

 

1.17         ENTRY DATE with respect to an Eligible Employee means the first
date that the Eligible Employee is entitled to commence participation in the
Basic Plan.

 

1.18         KEY EMPLOYEE means a “key employee” as defined under AJCA.

 

1.19         LEGACY DEFERRED COMPENSATION PLAN means the 2005 Deferred
Compensation Plan, which is a separate plan offered only to certain employees
who were employees of Boise Cascade Office Products Corporation and who had a
current deferred compensation election effective under the 2001 Key Executive
Deferred Compensation Plan on December 31, 2004.

 

1.20         OFFICEMAX means OfficeMax Incorporated.

 

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1.21         PARTICIPANT means any Eligible Employee who is eligible and elects
to participate in accordance with the provisions of Article II, including, where
appropriate according to the context of the Plan, any former Eligible Employee
who is or may become (or whose beneficiary may become) eligible to receive a
benefit under the Plan.

 

1.22         PLAN means the Executive Savings Deferral Plan as set forth herein
and as amended from time to time.

 

1.23         PLAN YEAR means the calendar year beginning January 1, 2005, and
each calendar year thereafter during which the Plan is in effect.

 

1.24         SALARY means a Participant’s salary, commission, and other payments
for personal services rendered by a Participant to the Company during a calendar
year, determined prior to giving effect to any deferral election under this
Plan.

 

1.25         SALARY DEFERRAL CONTRIBUTIONS means the contributions of Salary and
Bonus made or deemed made by a Participant pursuant to Article III.

 

1.26         SALARY DEFERRAL CONTRIBUTIONS SUBACCOUNT means the account(s) on
OfficeMax’s books to which a Participant’s Supplemental Salary Deferral
Contributions under Article III, plus earnings and losses thereon, are credited.

 

1.27         TRUST means the irrevocable trust established by OfficeMax with an
independent trustee for the benefit of persons entitled to receive payments or
benefits hereunder, the assets of which will be subject to claims of OfficeMax’s
creditors in the event of bankruptcy or insolvency.

 

1.28         TRUSTEE means the trustee named in the agreement establishing the
Trust, if any, and such successor and/or additional trustees as may be named
pursuant to the terms of the agreement establishing the Trust.

 

1.29         VALUATION DATE means March 31, June 30, September 30, and December
31 of each Plan Year and any other date(s) designated as Valuation Dates by the
Committee, in its sole discretion.  Valuations shall occur at least quarterly
within a given Plan Year and may occur more frequently at the sole discretion of
the Committee.

 

ARTICLE II

ELIGIBILITY AND PARTICIPATION

 

2.1           REQUIREMENTS.

 

(a)           Every person who is an Eligible Employee on the Effective Date
shall be eligible to become a Participant in this Plan on the Effective Date. 
Each person who becomes an Eligible Employee after the Effective Date shall be
eligible to become

 

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a Participant on the first Entry Date occurring on or after the date on which he
or she becomes an Eligible Employee.  No individual shall become a Participant,
however, if he or she is not an Eligible Employee on the date his or her
participation is to begin.

 

(b)           In order to participate as of the Effective Date or the Entry
Date, as applicable, an Eligible Employee must execute and return to the
Committee, within the time period specified by the Committee, an Enrollment and
Election Form on which the Eligible Employee shall:

 

(i)            Elect to become a Participant;

 

(ii)           Elect a rate of Salary Deferral Contributions for the initial
Plan Year as provided in Section 3.1;

 

(iii)          Designate a beneficiary as provided in Section 9.1;

 

(iv)          Specify a distribution commencement date for Plan benefits and a
form of distribution of Plan benefits (from among the options indicated on the
form);

 

(v)           Specify a deemed investment fund or funds (in accordance with
Section 6.2); and

 

(vi)          Agree to the terms of the Plan.

 

(c)                                  For each subsequent Plan Year, within such
time period as OfficeMax shall specify before the beginning of the Plan Year, an
Eligible Employee who desires to continue to participate must execute and return
to the Committee an Enrollment and Election Form on which he/she shall elect a
rate of Salary Deferral Contribution as provided in Section 3.1 with respect to
that Plan Year and a distribution commencement date for Plan benefits and a form
of distribution of Plan benefits (from among the options indicated on the form),
with respect to benefits attributable to deferrals for that Plan Year.

 

(d)           As provided in Sections 2.1(b)(iv) and 2.1(c), an Eligible
Employee may elect a different distribution commencement date for Plan benefits
and/or a different form of distribution of Plan benefits with respect to
deferrals for each separate Plan Year.  However, the election made for each Plan
Year is irrevocable after that Plan Year has begun, and may not be subsequently
modified, except as otherwise provided in Article VIII.

 

2.2           CHANGE OF EMPLOYMENT CATEGORY.  During any period in which a
Participant remains in the employ of the Company, but ceases to be an Eligible
Employee, he/she shall cease to be eligible to make Salary Deferral
Contributions or have Company Matching Contributions made on his/her behalf as
of the date he/she is no longer an

 

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Eligible Employee.  However, his/her Account shall continue to be revalued in
accordance with Article VI.

 

ARTICLE III

SALARY DEFERRAL CONTRIBUTIONS

 

3.1           IRREVOCABLE ELECTION.  A Participant may elect by filing with the
Company a salary reduction agreement in the form of an Enrollment and Election
Form (pursuant to Section 2.1) to reduce the amount of Compensation that he/she
would otherwise receive as taxable pay for the Plan Year with respect to which
the form relates and to have the Company credit an equivalent amount to his/her
Salary Deferral Contributions Subaccount.  A Salary Deferral Contribution
election shall apply only with respect to Compensation for the particular Plan
Year specified on the election form.  Once the Plan Year has begun, the Salary
Deferral Contribution election with respect to that Plan Year shall become
irrevocable.

 

3.2           CHOICE OF CONTRIBUTION RATES.

 

(a)           For each Plan Year, a Participant may elect to make Salary
Deferral Contributions of his or her Salary paid during that Plan Year and his
or her Bonus earned during that Plan Year.  Bonus elections shall apply to the
Bonus earned (if any) during the Plan Year following the Participant’s election,
payable in the second year following the Participant’s election.

 

(b)           Elections shall be made in whole percentages.  The maximum
deferral election for Salary is 50% less (i) the maximum contribution percent
applicable to Restricted Highly Compensated Employees under the Basic Plan (as
determined by the plan administrator for the Basic Plan), and (ii) the deferral
percentage the Participant has elected under the Legacy Deferred Compensation
Plan, if applicable.  The maximum deferral election for Bonus is 90% less (i)
the maximum contribution percent applicable to Restricted Highly Compensated
Employees under the Basic Plan (as determined by the plan administrator for the
Basic Plan), and (ii) the deferral percentage the Participant has elected under
the Legacy Deferred Compensation Plan, if applicable.

 

(c)           Salary Deferral Contributions shall be deducted from the
Participant’s pay and an equivalent amount shall be credited to the
Participant’s Salary Deferral Contributions Subaccount.

 

ARTICLE IV

COMPANY MATCHING CONTRIBUTIONS

 

4.1           AMOUNT.  In addition to the Salary Deferral Contributions made
pursuant to Article III above, the Company shall credit to each Participant’s
Company Matching Contributions

 

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Subaccount an amount equal to 50% of the Salary Deferral Contributions that the
Participant has elected in accordance with Section 3.2, disregarding for this
purpose any Salary Deferral Contributions in excess of Match-Eligible
Contributions.

 

4.2           MATCH-ELIGIBLE CONTRIBUTIONS.  For purposes of calculating Company
Matching Contributions under Section 4.1, “Match-Eligible Contributions” means
six percent (6%) of Basic Compensation less (a) the maximum contribution percent
applicable to Restricted Highly Compensated Employees under the Basic Plan (as
determined by the plan administrator for the Basic Plan), and (b) the deferral
percentage the Participant has elected under the Legacy Deferred Compensation
Plan, if applicable.  If the maximum contribution percent applicable to
Restricted Highly Compensated Employees under the Basic Plan plus the deferral
percentage the Participant has elected under the Legacy Deferred Compensation
Plan (if applicable) is 6% or greater, no Company Matching Contributions will be
made under this Plan.

 

ARTICLE V

VESTING

 

5.1           VESTING.  An Eligible Employee shall always be one hundred percent
(100%) vested in all amounts credited to his/her Salary Deferral Contributions
Subaccount.  He/she shall vest in amounts credited to his/her Company Matching
Contributions Subaccount in accordance with the following schedules, based on
his/her “Years of Service” as defined in the Basic Plan.

 

Years of Service

 

Vested Percentage

 

 

 

 

 

Less than 3 years of service

 

0

%

3 or more years of service

 

100

%

 

A Participant’s Company Matching Contributions Subaccount also will become 100%
vested if, while still employed by the Company, he/she attains age 65 or dies.

 

 

ARTICLE VI

ACCOUNTS

 

6.1           ACCOUNTS.  The Company will maintain on its books a Salary
Deferral Contributions Subaccount(s) and a Company Matching Contributions
Subaccount(s) for each Participant to which shall be credited, as appropriate,
Salary Deferral Contributions under Article III, Company Matching Contributions
under Article IV, and deemed investment earnings and/or losses as provided in
Section 6.2.  Appropriate records will be maintained for each Participant, as
necessary, to account separately for Plan benefits that are attributable to
deferrals for different Plan Years to the extent deferrals are subject to
different payment option elections under Section 8.2(a).  All Accounts shall be
bookkeeping accounts only, and all such amounts referred to therein shall, prior
to being

 

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distributed, in all events remain subject to the claims of the general creditors
of the Company who is or was the employer of the respective Participant.

 

6.2           ADJUSTMENTS.

 

(a)                                  In accordance with rules established by the
Committee, a Participant may elect to “invest” amounts credited to his Account
in and among hypothetical investment funds which shall mirror the investment
funds offered under the Basic Plan from time to time.  Any election may be
changed in accordance with rules established by the Committee.  If a Participant
fails to make such an election, his/her Account will be deemed to be invested in
a default investment fund chosen by the Committee.

 

(b)                                 As of each Valuation Date, each Account will
be adjusted, with either an increase or a decrease, to reflect the deemed
investment experience of the Account since the preceding Valuation Date.  For
this purpose, the Account will be adjusted to reflect the investment return
under the Eligible Employee’s deemed investment elections.

 

6.3           ACCOUNTING FOR DISTRIBUTIONS.  As of the date of any distribution,
the distribution to a Participant or his/her beneficiary shall be charged to
such Participant’s Account.

 

 

ARTICLE VII

ENTITLEMENT TO BENEFITS

 

7.1           VALUATION OF ACCOUNT.  If a Participant terminates employment with
the Company for any reason, the Participant’s Account shall be valued as of the
Valuation Date coincident with or next following the date of termination (or the
distribution commencement date as elected in the Participant’s Enrollment and
Election Form, if later) and the vested portion of the Account shall be payable
according to the provisions of Article VIII.

 

7.2           SOURCE OF PAYMENTS.  Benefits under this Plan shall be payable
from general assets of the Company who is or was the employer of the respective
Participant; provided, however, that if OfficeMax has established a Trust to
fund benefit payments hereunder, such payments by the Trust shall be made only
to the extent there are assets in the Trust and any payment due under the Plan
that is not paid by the Trust will be paid by the Company who is or was the
employer of the respective Participant from its general assets.

 

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ARTICLE VIII

PAYMENT OF BENEFITS

 

8.1           CASH PAYMENTS.  All payments under this Plan shall be made in
cash.

 

8.2           PAYMENT OPTIONS.

 

(a)                                  As provided in Section 2.1(d), an Eligible
Employee may elect a different payment option for Plan benefits attributable to
deferrals for each Plan Year.  Each payment option must be selected by the
Eligible Employee prior to the deferral, pursuant to Sections 2.1(b)(iv) and
2.1(c).  Each payment option shall provide for payment to the Participant of the
vested value of the Participant’s Account attributable to such deferral as set
forth below:

 

(i)            Time of Distribution.  As soon as administratively feasible
pursuant to Article XI after the Participant’s employment terminates with the
Company and all affiliates other than by reason of death, or at a later or
earlier fixed date, which shall be a calendar quarter end-date, as specified by
the Participant in his/her Enrollment and Election Form at the time of the
deferral election under the Plan.

 

(ii)           Form of Distribution.  In a single lump sum, or in approximately
equal installments over a period not exceeding fifteen (15) years, as elected by
the Participant in his/her Enrollment and Election Form at the time of the
deferral election under the Plan.

 

(b)                                 Notwithstanding the foregoing, if a
Participant fails to designate properly the manner of payment of the
Participant’s benefit under the Plan, payment will be made in a lump sum as soon
as practicable after the date of the Participant’s termination of employment.

 

8.3           PAYMENT UPON DEATH. If a Participant dies (whether before or after
payments to the Participant have begun), the value of the Participant’s Account
shall be paid to the Participant’s beneficiary in a lump sum as soon as
practicable thereafter.

 

8.4           SMALL BALANCES.  Notwithstanding any provision of this Plan to the
contrary, if at the time of a Participant’s termination of employment with the
Company and all affiliates, the value of his/her vested Account is less than
$10,000, an amount equal to the value of the vested Account shall be distributed
in a lump sum as soon as practicable after the date of the Participant’s
termination, regardless of any elections made by the Participant to the
contrary.

 

8.5           DISTRIBUTIONS TO KEY EMPLOYEES.  Notwithstanding anything in this
Plan to the contrary, distributions to Key Employees shall comply with AJCA.

 

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ARTICLE IX

BENEFICIARIES; PARTICIPANT DATA

 

9.1           DESIGNATION OF BENEFICIARIES.

 

(a)                                  Each Participant from time to time may
designate any person or persons (who may be named contingently or successively)
to receive any benefits payable under the Plan upon or after the Participant’s
death, and the Participant may change this designation from time to time by
filing a new designation.  If the Participant is legally married at the time of
death, any designation of a Beneficiary other than the Participant’s legal
spouse shall be void, and the Participant’s legal spouse will be the sole
beneficiary, unless the legal spouse has consented to the designation of another
person as beneficiary in a signed and notarized statement.  Each designation
will revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company, and will be effective only when filed in writing with
the Company during the Participant’s lifetime.

 

(b)                                 In the absence of a valid beneficiary
designation, or if, at the time any benefit payment is due to a beneficiary,
there is no living beneficiary, the Company shall cause the benefit payment to
be paid to the Participant’s spouse, or, if no spouse is then living, to the
Participant’s estate.  In determining the existence or identity of anyone
entitled to a benefit payment, the Company may rely conclusively upon
information supplied by the Participant’s personal representative, executor, or
administrator.  If a question arises as to the existence or identity of anyone
entitled to receive a benefit payment, or if a dispute arises with respect to
any benefit payment, then, notwithstanding the foregoing, the Company, in its
sole discretion, may cause the payment to be distributed to the Participant’s
estate without liability for any tax or other consequences that might flow
therefrom or may take such other action as the Company deems appropriate.

 

9.2           INABILITY TO LOCATE PARTICIPANTS OR BENEFICIARIES.  Any
communication, statement, or notice addressed to a Participant or to a
beneficiary at his or her last mailing address as shown on the Company’s records
shall be binding on the Participant or beneficiary for all purposes of the
Plan.  The Company shall not be obliged to search for any Participant or
beneficiary beyond sending a registered letter to the last known address.  If
the Company notifies any Participant or beneficiary that he/she is entitled to
an amount under the Plan and the Participant or beneficiary fails to claim such
amount or make his/her location known to the Company within three (3) years
thereafter, then, except as otherwise required by law, the Company shall have
the right to direct that the amount payable shall be deemed to be a forfeiture,
except that the dollar amount of the forfeiture, unadjusted for deemed gains or
losses in the interim, shall be paid by the Company if a claim for the benefit
subsequently is made by the Participant or the beneficiary to whom it was
payable.  If a benefit payable to an unlocated Participant or beneficiary is
subject to escheat pursuant to applicable state law, the Company shall not be
liable to any person for any payment made in accordance with such law.

 

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ARTICLE X

THE TRUST

 

10.1         FUNDING OF TRUST.  Upon the occurrence of a Change in Control or at
any time thereafter, the Company, in its sole discretion, may transfer to the
Trust cash, marketable securities, or other property acceptable to the trustee
to pay the Company’s obligations under this Plan in whole or in part (the
“Funding Amount”).  Any cash, marketable securities, or other property so
transferred shall be held, managed, and disbursed by the trustee subject to and
in accordance with the terms of the Trust.  In addition, from time to time the
Company may make additional transfers of cash, marketable securities, or other
property acceptable to the trustee as desired by the Company in its sole
discretion to maintain or increase the Funding Amount with respect to this
Plan.  The assets of the Trust, if any, shall be used to pay benefits under this
Plan, except to the extent the Company pays such benefits.  The Company and any
successor shall continue to be liable for the ultimate payment of those
benefits.

 

10.2         BENEFIT PAYMENTS IN ABSENCE OF TRUST.  To the extent the Company
does not fund the Trust or to the extent the Funded Amount is insufficient to
pay benefits under this Plan, benefit payments shall be made from the general
assets of the Company who was or is the employer of the respective Participant. 
The Company and any successor shall continue to be liable for the ultimate
payment of those benefits.

 

ARTICLE XI

ADMINISTRATION

 

11.1         GENERAL ADMINISTRATION.  The Company, acting through its senior
human resources officer or his or her delegates, shall have final discretion,
responsibility, and authority to administer and interpret the Plan.  This
includes the discretion and authority to determine all questions of fact,
eligibility, or benefits relating to the Plan.  The Company may also adopt any
rules it deems necessary to administer the Plan.  The Company’s responsibilities
for administration and interpretation of the Plan shall be exercised by Company
employees who have been assigned those responsibilities by the Company’s
management.  Any Company employee exercising responsibilities relating to the
Plan in accordance with this section shall be deemed to have been delegated the
discretionary authority vested in the Company with respect to those
responsibilities, unless limited in writing by the Company.  Any Participant may
appeal any action or decision of these employees to the Company’s senior human
resources officer.  Claims for benefits under the Plan and appeals of claim
denials shall be in accordance with Section 11.3.  Any interpretation by the
Company’s senior human resources officer shall be given deference and shall be
final and binding on the Participants.

 

11.2         AMENDMENT AND TERMINATION.  The Committee may, at its sole
discretion, amend or terminate the Plan at any time, provided that any amendment
or termination shall not reduce the amount of a Participant’s Account as of the
date of the amendment or

 

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termination or adversely affect a Participant’s entitlement to his/her Account
as of that date.

 

11.3         CLAIMS PROCEDURE.

 

(a)                                 Notice of Claim.  Any Participant or
beneficiary, or the duly authorized representative of a Participant or
beneficiary, may file a claim for a Plan benefit. Claims for benefits under the
Plan shall be filed in writing, within 90 days after the event giving rise to a
claim, with the Company’s benefits manager (the “Manager”), who shall have
absolute discretion to interpret and apply the Plan, evaluate the facts and
circumstances, and make a determination with respect to the claim in the name
and on behalf of the Company.  The claim shall include a statement of all facts
the Participant believes relevant to the claim and copies of all documents,
materials, or other evidence that the Participant believes relevant to the
claim.  Written notice of the disposition of a claim shall be furnished to the
Participant within 90 days after the application is filed.  This 90-day period
may be extended an additional 90 days for special circumstances by the Manager,
in his or her sole discretion, by providing written notice of the extension to
the claimant prior to the expiration of the original 90-day period.

 

(b)                                 Action on Claim.  If the claim is denied,
the Manager (or his or her designee) shall provide a written notice of denial,
setting forth, in a manner calculated to be understood by the claimant:

 

(i)             The specific reason or reasons for the denial;

 

(ii)            The pertinent Plan provisions on which the denial is based;

 

(iii)           A description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary;

 

(iv)          An explanation of the Plan’s claim review procedure; and

 

(v)           A statement of the claimant’s right to bring an action under
section 502(a) of ERISA following an adverse determination on review.

 

(c)                                  Review of Denial.  Within sixty (60) days
after receipt of the written notification of denial provided for in Section
11.3(b), the claimant or the claimant’s duly authorized representative, upon
written request to the Manager, may review pertinent documents, may request
review of the claim, and may submit to the Manager, in writing, issues and
comments concerning the claim.

 

(d)                                 Decision on Review.  Upon receipt of a
request for review as provided in Section 11.3(c), the Manager shall promptly
inform the Company’s senior human resources officer, who shall be the named
fiduciary of the Plan for purposes of

 

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claim review.  The senior human resources officer shall make his or her
decision, in writing, within 60 days after receipt of the claimant’s request for
review.  This 60-day period may be extended an additional 60 days if, in the
senior human resources officer’s sole discretion, special circumstances warrant
the extension and if the senior human resources officer provides written notice
of the extension to the claimant prior to the expiration of the original 60-day
period.  The senior human resources officer’s decision shall be written in a
manner calculated to be understood by the claimant and shall include the
following:

 

(i)             The specific reason or reasons for the denial;

 

(ii)            The pertinent Plan provisions on which the denial is based;

 

(iii)           A statement that the Participant/beneficiary is entitled to
receive at no charge upon written request reasonable access to and copies of all
documents, records, and other information relevant to his/her claim; and

 

(iv)          A statement that the claimant has the right to bring an action
under section 502(a) of ERISA.

 

(e)                                  No lawsuit claiming entitlement to benefits
under this Plan may be filed prior to exhausting the claim and claim review
procedures described in this Section 11.3.  Any such lawsuit must be initiated
no later than (a) one year after the event(s) giving rise to the claim occurred,
or (b) 60 days after a final written decision is provided to the claimant under
Section 11.3(d), whichever is later.  Any legal action involving benefits
claimed or legal obligations relating to or arising under this Plan may be filed
only in Federal District Court in the city of Itasca, Illinois.  Federal law
shall be applied in the interpretation and application of this Plan and the
resolution of any legal action.  To the extent not preempted by federal law, the
laws of the state of Delaware shall apply.

 

11.4         FORM OF COMMUNICATION.  Any election, application, notice, claim,
or other communication required or permitted to be made by a Participant or
beneficiary shall be made in writing and in such form as the Company may
prescribe.  Such communication shall be effective upon receipt by the Company’s
benefits manager at 150 Pierce Road, Itasca, IL  60143.

 

ARTICLE XII

MISCELLANEOUS PROVISIONS

 

12.1         LIMITATION OF RIGHTS.  Nothing contained in this Plan shall be
construed to:

 

(a)                                  Limit in any way the right of the Company
to terminate an Eligible Employee’s employment at any time; or

 

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(b)                                 Be evidence of any agreement or
understanding, express or implied, that the Company will employ an Eligible
Employee in any particular position or at any particular rate of remuneration.

 

12.2         NONALIENATION OF BENEFITS.  No amounts payable hereunder may be
assigned, pledged, mortgaged, or hypothecated, and, to the extent permitted by
law, no such amounts shall be subject to legal process or attachment for the
payment of any claims against any person entitled to receive the same; provided
that a Participant’s rights and interests may be assigned or transferred upon
the Participant’s death, as described in Sections 8.3 and 9.1.

 

12.3         UNFUNDED PLAN.  The Plan is “unfunded and is maintained primarily
for the purpose of providing deferred compensation for a select group of
management or highly compensated employees,” within the meaning of Sections
201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act
of 1974, as amended (ERISA).  It is the intention of the Company that the Plan
be unfunded for tax and ERISA purposes and that it be construed and interpreted
accordingly.  Except as provided in Article X, Participants and their
beneficiaries, heirs, successors, and assigns shall have no legal or equitable
rights, interest, or claims in any property or assets of the Company.  The
assets of the Company shall not be held under any trust for the benefit of
Participants, their beneficiaries, heirs, successors, or assigns, or held in any
way as collateral security for the fulfilling of the obligations of the Company
under this Plan.  Any and all Company assets shall be, and remain, the general,
unpledged, unrestricted assets of the Company.  The Company’s obligation under
the Plan shall be an unfunded and unsecured promise of the Company to pay money
in the future.

 

12.4         GENDER AND NUMBER.  Wherever used in this Plan, the masculine shall
be deemed to include the feminine, and the singular shall be deemed to include
the plural, unless the context clearly indicates otherwise.

 

12.5         GOVERNING LAW.  This Plan shall be construed in accordance with,
and shall be governed by, the laws of the State of Delaware to the extent such
laws are not preempted by federal law.

 

12.6         CHANGES IN DEEMED INVESTMENTS/CONVERSIONS.  Notwithstanding any
provision of the Plan to the contrary:

 

(a)                                  In the event of any conversion, change in
recordkeepers, change in investment funds under the Basic Plan and/or a Plan
merger or spin-off, the Company, in its sole and absolute discretion (subject to
the requirements of applicable law), may temporarily suspend, in whole or in
part, certain Plan transactions, including without limitation, the right to
change contributions, the right to change deemed investment elections and/or the
right to receive a distribution.

 

(b)                                 In the event of a change in investment funds
under the Basic Plan and/or a Plan merger or spin-off, the Company, in its sole
and absolute discretion, may decide to map deemed investments under this Plan in
a manner similar to the mapping of

 

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under the investments in the Basic Plan.  If deemed investments are mapped in
this manner, the Participant shall be permitted to reallocate his/her Account
balance among the deemed investment funds (in accordance with the provisions of
Section 6.2) after any suspension period as described in subsection (a) is
lifted.

 

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