Exhibit 10.3

 

ACTUANT CORPORATION

DEFERRED COMPENSATION PLAN

(Conformed through the Third Amendment)

 

 

McDermott Will & Emery LLP

Chicago

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TABLE OF CONTENTS

 

     PAGE  

SECTION 1

     2   

Definitions

     2   

SECTION 2

     8   

Participation

     8   

2.1    Participation

     8   

2.2    Suspension of Participation Due to Hardship

     8   

2.3    Termination of Participation

     8   

SECTION 3

     9   

Contributions

     9   

3.1    Compensation Deferrals

     9   

3.2    Non-Qualified Core Contributions

     11   

SECTION 4

     12   

Notional Investment of Contributions

     12   

4.1    Investment Options

     12   

4.2    Investment Option Elections

     13   

4.3    One-Time Election to Change Investment Option

     14   

SECTION 5

     15   

Accounting

     15   

5.1    Participants’ Accounts

     15   

5.2    Participants Remain Unsecured Creditors

     15   

5.3    Accounting Methods

     15   

5.4    Reports

     16   

SECTION 6

     17   

Distributions

     17   

6.1    General Timing of Distributions

     17   

6.2    Form of Payment

     18   

6.3    Short-Term Payout

     21   

6.4    Deferral Elections for Short-Term Payouts

     22   

6.5    Change of Control

     22   

6.6    Special Rule for Death or Disability

     23   

6.7    Beneficiary Designations

     23   

6.8    Financial Hardship

     23   

6.9    Payments to Incompetents

     23   

6.10  Undistributable Accounts

     23   

6.11  Committee Discretion

     24   

6.12  Withholding; Reporting

     24   

 

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     PAGE  

SECTION 7

     25   

Participant’s Interest in Account

     25   

SECTION 8

     26   

Administration of the Plan

     26   

8.1      Plan Administrator

     26   

8.2      Committee

     26   

8.3      Actions by Committee

     26   

8.4      Powers of Committee

     26   

8.5      Decisions of Committee

     27   

8.6      Administrative Expenses

     28   

8.7      Eligibility to Participate

     28   

8.8      Indemnification

     28   

SECTION 9

     29   

Modification or Termination of Plan

     29   

9.1      Employers’ Obligations Limited

     29   

9.2      Right to Amend or Terminate

     29   

9.3      Effect of Termination

     29   

SECTION 10

     31   

General Provisions

     31   

10.1    Inalienability

     31   

10.2    Successors, Acquisitions, Mergers, Consolidations

     31   

10.3    Rights and Duties

     31   

10.4    No Right to Employer Assets

     31   

10.5    No Enlargement of Employment Rights

     31   

10.6    Apportionment of Costs and Duties

     32   

10.7    Compensation Deferrals Not Counted Under Other Employee Benefit Plans

     32   

10.8    Applicable Law

     32   

10.9    Responsibility for Legal Effect

     32   

10.10  Severability

     32   

10.11  Captions

     32   

 

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Exhibit 10.3

ACTUANT CORPORATION

DEFERRED COMPENSATION PLAN

(As Amended and Restated Effective September 1, 2004)

Actuant Corporation, a Wisconsin corporation, maintains the Actuant Corporation
Deferred Compensation Plan (the “Plan”) for the benefit of a select group of
management and highly compensated employees of the Company and its participating
Affiliates. The Plan is intended to provide such employees with certain deferred
compensation benefits and certain benefits that cannot be provided under the
Actuant Corporation 401(k) Plan due to the limitations on benefits under the
provisions of Section 415 or 401(a)(17) of the Code or to the extent certain
items of compensation are not considered in determining benefits under the
Actuant Corporation 401(k) Plan, or cannot be deferred into the Actuant
Corporation 401(k) Plan.

The Plan was originally established effective as of December 1, 2002. The Plan
was most recently restated effective September 1, 2004, and has been amended
from time to time thereafter.

The Plan is designed to comply with the American Jobs Creation Act of 2004, as
amended (the “Jobs Act”), and Section 409A of the Code. Accordingly, the Plan
has been amended to conform to the requirements of the Jobs Act and Section 409A
of the Code, and final Treasury regulations issued thereunder, with respect to
Non-Grandfathered Amounts under the Plan. Prior to January 1, 2008, it is
intended that the Plan be interpreted according to a good faith interpretation
of the Jobs Act and Section 409A of the Code, and consistent with published
guidance thereunder, including, without limitation, IRS Notice 2005-1 and the
proposed and final Treasury regulations under Section 409A of the Code.
Treatment of amounts deferred under the Plan pursuant to and in accordance with
any transition rules provided under all IRS published guidance and other
applicable authorities in connection with the Jobs Act or Section 409A of the
Code, including, without limitation, the adoption of the transition rules
prescribed under Q&As 20 and 21 of IRS Notice 2005-1, shall be expressly
authorized hereunder and shall be administered in accordance with procedures
established by the Administrator or the Committee, as the case may be. In the
event of any inconsistency between the terms of the Plan and the Jobs Act or
Section 409A of the Code with respect to Non-Grandfathered Amounts, the terms of
the Jobs Act and Section 409A of the Code shall prevail and govern.

 

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SECTION 1

Definitions

The following words and phrases shall have the following meanings unless a
different meaning is plainly required by the context:

1.1     “Administrator” shall mean the Company, as provided in Section 8.1.

1.2    “Affiliate” shall mean a corporation, trade or business which is,
together with any Employer, a member of a controlled group of corporations or an
affiliated service group or under common control (within the meaning of
Section 414(b), (c) or (m) of the Code), but only for the period during which
such other entity is so affiliated with any Employer.

1.3    “Beneficiary” shall mean the person or persons entitled to receive
benefits under the Plan upon the death of a Participant, as provided in
Section 6.7.

1.4    “Board of Directors” shall mean the Board of Directors of the Company, as
constituted from time to time.

1.5    “Change of Control” shall mean the date on which the first of the
following events occurs:

 

  (a) any one person or more than one person acting as a Group (within the
meaning assigned to such term in Treasury Regulation §§1.409A-3(i)(5)(v)(B) and
(vi)(D)) (excluding Affiliates) acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such person or
persons) all or substantially all of the business or assets from the Company
(but in no event shall a Change of Control be deemed to have occurred where such
acquired assets have a total Gross Fair Market Value (as defined below) of less
than 40% of the total Gross Fair Market Value of all of the assets of the
Company immediately before such acquisition or acquisitions);

 

  (b) any one person or more than one person acting as a Group (excluding
Affiliates) acquires more than 50% of the total fair market value or total
voting power of stock of the Company, provided that if such person or persons
are considered either to own more than 50% of the total fair market value or
total voting power of the stock of the Company or to possess Effective Control
(as defined below) of the Company, the acquisition of additional stock or
control, respectively, of the Company by the same person or persons is not
considered to cause a Change of Control of the Company under this subsection
(b); or

 

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  (c) (i) any one person, or (ii) a majority of the Board of Directors is
replaced during any 12-month period by directors whose appointment or election
is not endorsed by a majority of the members of the Board of Directors as
constituted before the appointment or election. ‘Effective Control’ for purposes
of this Plan means that any one person or more or more than one person acting as
a Group acquires (or has acquired during the 12-month period ending on the date
of the most recent acquisition by such person or persons) ownership of stock of
the Company possessing 30% or more of the total voting power of the stock of the
Company, provided that if such person or persons are considered either to own
more than 50% of the total fair market value or total voting power of the stock
of the Company or to possess Effective Control of the Company, the acquisition
of additional stock or control, respectively, of the Company by the same person
or persons is not considered to cause a change in the Effective Control of the
Company under this subsection (c).

The term ‘Gross Fair Market Value’ shall mean the value of the assets of the
Company, or the value of the assets being disposed of, determined without regard
to any liabilities associated with such assets. For purposes of determining
stock ownership, the attribution rules described in Section 318(a) of the Code
shall apply and stock underlying a vested option is considered owned by the
individual who holds the vested option, provided that if a vested option is
exercisable for stock that is not substantially vested (as defined by Treasury
Regulation §§83-3(b) and (j)), the stock underlying the option shall not be
treated as owned by the individual who holds the option. If payments from the
Plan are made on account of a Change of Control event described in subsection
(a) or (b), above, that occur because an Employer purchases its stock held by
the Participant or because the Employer or a third party purchases a stock right
held by the Employer, or that are calculated by reference to the value of the
Employer’s stock, such payments shall be completed not later than 5 years after
the Change of Control event. A Change of Control shall be subject to such
further rules, conditions, limitations, restrictions, or clarifications
prescribed under Section 409A of the Code, including, without limitation,
Treasury Regulation §§1.409A-3(i)(5)(v), (vi) and (vii).

1.6    “Code” shall mean the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code shall include such section, any
valid regulation promulgated thereunder, and any comparable provision of any
future legislation amending, supplementing or superseding such section.

1.7    “Committee” shall mean the Company’s Compensation Committee, as it may be
constituted from time to time. The members of the Compensation Committee are
appointed by, and serve at the pleasure of, the Board of Directors.

1.8    “Company” shall mean Actuant Corporation, a Wisconsin corporation.

 

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1.9    “Compensation” shall mean the base salary of a Participant and any CMM
bonus paid to him or her under the Company’s CMM bonus plan for a given Plan
Year. Effective January 1, 2011, Compensation shall also include eligible (as
determined under Subsection 3.1(d) herein) Restricted Stock Units (RSUs) granted
to any Eligible Employee in accordance with the Actuant Corporation 2009 Omnibus
Incentive Plan or any other similar plan or program granting RSUs approved by
the Company for deferral into this Plan.

1.10  “Compensation Deferrals” shall mean the amounts credited to Participants’
Accounts under the Plan pursuant to their deferral elections made in accordance
with Section 3.1.

1.11  “Disability” or “Disabled” shall mean the mental or physical inability of
a Participant to perform the regularly assigned duties of his or her employment,
provided that such inability (a) has continued or is expected to continue for a
period of at least 12 months and (b) is evidenced by the certificate of a
physician satisfactory to the Committee stating that such inability exists and
is likely to be permanent. The meaning of Disability or Disabled shall be
subject to such further rules, conditions, limitations, restrictions, or
clarifications as prescribed under Section 409A of the Code and Treasury
Regulations and other guidance issued thereunder.

1.12  “Eligible Compensation” for a Plan Year shall mean an Eligible Employee’s
“Eligible Compensation” as defined in the 401(k) Plan for the fiscal year of the
Company ending in the preceding Plan Year, except that (a) the limitation under
Section 401(a)(17) of the Code shall not apply, and (b) the Eligible Employee’s
elective deferrals made pursuant to any non-qualified deferred compensation plan
maintained by an Employer, including this Plan, shall be included.

1.13  “Eligible Employee” shall mean the following:

 

  (a) with respect to eligibility to receive Non-Qualified Core Contributions
described in Section 3.2, an “Eligible Employee” shall be any employee whose
Eligible Compensation exceeds the limitation under Section 401(a)(17) of the
Code in any given fiscal year of the Company (as adjusted by the Internal
Revenue Service for changes in the cost of living from time to time); and

 

  (b)

with respect to eligibility to make Compensation Deferrals in accordance with
Section 3.1, the Committee shall have discretion to determine whether an
Eligible Employee may participate in the Plan by electing to make Compensation
Deferrals. For these purposes an Eligible Employee shall include any employee
whose Compensation, as defined in Subsection 1.9, annualized as of the date of
determination, exceeds the limitation under Section 414(q)(1)(b) of the Code (as
adjusted by the Internal Revenue Service for changes in the cost of living from
time to time) that is applicable

 

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  on the date of such determination. The Committee may make such determination
by individual or employment classification prior to the beginning of each Plan
Year, or, in the case of newly hired employees, upon such employee’s date of
hire. Notwithstanding the foregoing, if an employee was an Eligible Employee in
a prior Plan Year and made Compensation Deferrals in the prior Plan Year, such
Eligible Employee shall continue to be deemed to be an Eligible Employee in the
subsequent Plan Year, regardless of the amount of Eligible Compensation earned
by such employee in such subsequent Plan Year.

1.14  “Employers” shall mean the Company and each of its Affiliates who adopts
the Plan with the consent of the Company. With respect to an individual
Participant, Employer shall mean the Company or its Affiliate that directly
employs such Participant. To the extent (and only to the extent) required under
Section 409A of the Code with respect to a Participant’s Non-Grandfathered
Amounts under the Plan, including, without limitation, for purposes of Sections
1.5, 1.26(b), 3.1, 3.2 (excluding the first paragraph therein), 6.1(b), 6.2(c),
and 9.3 the “Employer” shall mean the person for whom the Participant performs
services and with respect to whom the legally binding right to payments under
the Plan arises, and all persons with whom such person would be considered a
single employer under Section 414(b) or (c) of the Code.

1.15  “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended. Reference to a specific section of ERISA shall include such section,
any valid regulation promulgated thereunder, and any comparable provision of any
future legislation amending, supplementing or superseding such section.

1.16  “Financial Hardship” shall mean a severe financial hardship to the
Participant, which has been properly demonstrated to and approved by the
Committee or its delegate in its sole discretion, resulting from:

 

  (a) an illness or accident of the Participant, Participant’s spouse, the
Participant’s Beneficiary, or the Participant’s dependent (as defined in
Section 152 of the Code, without regard to Sections 152(b)(1), (b)(2), and
(d)(1)(B) of the Code);

 

  (b) the loss of the Participant’s property due to casualty (including the need
to rebuild a home following damage to a home not otherwise covered by
insurance); or

 

  (c) other similar extraordinary circumstances arising as a result of events
beyond the control of the Participant, including, without limitation, (i) the
imminent foreclosure of or eviction from the Participant’s primary residence,
(ii) the payment of funeral expenses of the Participant’s spouse, the
Participant’s Beneficiary, or the Participant’s dependent (as defined in
Section 152 of the Code, without regard to Sections 152(b)(1), (b)(2), and
(d)(1)(B) of the Code);

 

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which would, if no cessation of deferrals were made in accordance with
Section 2.2, result in severe financial burden to the Participant. Also, a
Financial Hardship does not exist to the extent that the hardship may be
relieved by (a) cessation of such Participant’s deferrals of the bonus portion
of his Compensation pursuant to Section 2.2, (b) reimbursement or compensation
by insurance or otherwise, or (c) liquidation of the Participant’s other assets
(to the extent such liquidation would not itself cause severe financial
hardship), but disregarding any additional compensation that due to the
Financial Hardship is available under another nonqualified deferred compensation
plan but has not actually been paid, or that is available due to the Financial
Hardship under another plan that would provide for deferred compensation (within
the meaning of Section 409A of the Code) except due to the application of the
effective date provisions under Treasury Regulation §1.409A-(6).

1.17  “401(k) Plan” shall mean the Actuant Corporation 401(k) Plan, as amended
from time to time.

1.18  “Grandfathered Amounts” shall mean the portion of the Participant’s
Account balance under the Plan as of December 31, 2004, the right to which was
earned and vested (within the meaning of Treasury Regulation §1.409A-6(a)(2)) as
of December 31, 2004, plus the right to future contributions to the Account the
right to which was earned and vested (within the meaning of Treasury Regulation.
§1.409A-6(a)(2)) as of December 31, 2004, to the extent such contributions are
actually made, each determined by reference to the terms of the Plan in effect
as of October 3, 2004, but only to the extent such Plan terms have not been
materially modified (within the meaning of Treasury Regulation §1.409A-6(a)(4))
after October 3, 2004. Grandfathered Amounts shall include any earnings (within
the meaning of Treasury Regulation. §1.409A-1(o)) attributable thereto.

1.19  “Investment Options” shall mean the funds or other investment vehicles
designated pursuant to Section 4.1.

1.20  “Non-Grandfathered Amounts” shall mean the Participant’s Account balance
under the Plan less any portion of the Participant’s Account balance under the
Plan constituting Grandfathered Amounts.

1.21  “Non-Qualified Core Contributions” shall mean the contributions made by
Employers pursuant to Section 3.2.

1.22  “Participant” shall mean an Eligible Employee who (a) has become a
Participant in the Plan pursuant to Section 2.1 and (b) has not ceased to be a
Participant pursuant to Section 2.3.

 

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1.23  “Participant’s Account” or “Account” shall mean as to any Participant the
separate account maintained on the records of the Employers in order to reflect
his or her interest under the Plan. Such Account shall include any amounts
transferred from the Applied Power Inc. Executive Deferred Compensation Plan.

1.24  “Plan” shall mean the Actuant Corporation Deferred Compensation Plan, as
set forth in this instrument and as hereafter amended from time to time, and, to
the extent (and only to the extent) required under Section 409A of the Code with
respect to a Participant’s Non-Grandfathered Amounts under the Plan, any other
plan with which the Plan is required to be aggregated under Section 409A of the
Code. This Plan is intended to constitute an account balance plan, as defined in
Treasury Regulation §1.409A-1(c)(2)(i)(A).

1.25  “Plan Year” shall mean each 12-month period beginning January 1 and ending
the following December 31. “Effective Date” shall mean September 1, 2004.

1.26  “Termination of Employment” shall mean (a) with respect to a Participant’s
Grandfathered Amounts, the date on which the Participant ceases to perform
services with all Employers and Affiliates, and (b) with respect to a
Participant’s Non-Grandfathered Amounts under the Plan, the date of the
Participant’s separation from service (within the meaning of Treasury Regulation
§§1.409A-1(h) and 1.409A-2(i)(2)) for any reason, including by reason of death
or Disability, with the Employer, except that in applying Sections 1563(a)(1),
(2), and (3) of the Code for purposes of determining the controlled group of
corporations under Section 414(b) of the Code, the language “at least 50
percent” is used instead of “at least 80 percent” each place it appears in
Section 1563(a)(1), (2), and (3) of the Code, and in applying Treasury
Regulation §1.414(c)-2 for purposes of determining trades or businesses (whether
or not incorporated) that are under common control for purposes of
Section 414(c) of the Code, “at least 50 percent” is used instead of “at least
80 percent” each place it appears in Treasury Regulation §1.414(c)-2. For
purposes of subsection (b), above, (i) the employment relationship is treated as
continuing intact while the Participant is on military leave, sick leave, or
other bona fide leave of absence if the period of any such leave does not exceed
six months, or if longer, so long as the Participant retains the right to
reemployment with the Employer under an applicable statute or by contract,
(ii) a leave of absence constitutes a bona fide leave of absence only if there
is a reasonable expectation that the Participant will return to perform services
for the Employer, and (iii) if the period of leave exceeds six months and the
Participant does not retain a right to reemployment under an applicable law or
by contract, the employment relationship is deemed to terminate on the first
date immediately following such six-month period.

 

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SECTION 2

Participation

 

2.1 Participation

Each Eligible Employee who was a Participant in the Plan immediately before the
Effective Date shall continue as a Participant on and after the Effective Date,
subject to the terms and provisions of the Plan. Each other Eligible Employee
shall become a Participant in the Plan as of the earlier of the date on which an
Eligible Employee’s initial deferral election to make Compensation Deferrals
becomes irrevocable under Section 3.1(b) or the date on which an Eligible
Employee first becomes eligible to receive Non-Qualified Core Contributions
under Section 3.2.

 

2.2 Suspension of Bonus Deferrals Due to Hardship

The Committee, in its sole discretion, may cancel the Participant’s Compensation
Deferrals for the bonus portion of his or her Compensation due to a Financial
Hardship or a hardship distribution pursuant to Treasury Regulation
§1.401(k)-1(d)(3). However, an election to make Compensation Deferrals under
Section 3.1 shall be irrevocable as to amounts deferred as of the effective date
of any cancellation in accordance with this Section 2.2. Following any such
cancellation of the Participant’s Compensation Deferrals for the bonus portion
of his or her Compensation, any later election by such Participant to make
Compensation Deferrals will be subject to the provisions of Section 3.1(b)
governing initial deferral elections.

 

2.3 Termination of Participation

An Eligible Employee who has become a Participant shall remain a Participant
until his or her entire vested Account balance is distributed. However, an
Eligible Employee who has become a Participant may or may not be an active
Participant making Compensation Deferrals for a particular Plan Year, depending
upon whether he or she has elected to make Compensation Deferrals for such Plan
Year.

 

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SECTION 3

Contributions

 

3.1 Compensation Deferrals

At the times and in the manner prescribed in this Section 3.1, each Eligible
Employee may elect to defer portions of his or her Compensation and to have the
amounts of such deferrals credited to his or her Account under the Plan on the
records of the Employer in accordance with such rules as the Committee may
establish. The Administrator may establish rules and regulations regarding
Compensation Deferrals, including minimum and maximum deferral requirements. An
Eligible Employee’s decision to make Compensation Deferrals under the Plan shall
be entirely voluntary.

 

  (a) Election to Defer Compensation Bonuses. Each Eligible Employee who makes
an election to make Compensation Deferrals under this Section 3.1 shall make a
separate Compensation Deferral election with respect to the salary portion and
the bonus portion of his or her Compensation.

 

  (b)

Specific Timing and Method of Election. The Administrator, in its sole
discretion, shall determine the manner and deadlines for Participants to make
Compensation Deferral elections. Any employee designated as first becoming
eligible to participate in the Plan may become a Participant by making a
Compensation Deferral election in the time and manner determined by the
Administrator. Such election shall apply only to the Participant’s Compensation
beginning on such eligibility date. Notwithstanding any provision of the Plan to
the contrary, with respect to a Participant’s Non-Grandfathered Amounts
attributable to Compensation Deferrals, a Participant’s election to make
Compensation Deferrals for a Plan Year under this Section 3.1 shall be made by
filing the appropriate deferral election form(s) with the Administrator before
the end of whichever of the following periods applies to the Participant:
(i) within the first 30 days after the employee “first becomes eligible to
participate in the Plan” (within the meaning of Treasury Regulation
§1.409A-2(a)(7)(ii)) with respect to Compensation paid for services to be
performed after the election, or (ii) if that 30-day period has expired, no
later than the later of either (A) the December 31 preceding the year in which
the Eligible Employee will earn the Compensation (other than Performance-Based
Compensation, as defined below) to be deferred (or such earlier date as
determined by the Administrator), or (B) in the case of any

 

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  Performance-Based Compensation (as defined in Treasury Regulation
§1.409A-1(e)), the date that is six months before the end of the performance
period (or such earlier date as determined by the Administrator), provided that
for purposes of this subsection (b)(ii)(B) the Eligible Employee performed
services continuously from the later of the beginning of the performance period
or the date the performance criteria are established through the date the
Eligible Employee made his or her election to defer such Performance-Based
Compensation, and provided further that in no event may an election to defer
Performance-Based Compensation be made after such Compensation has become
readily ascertainable. In the case of an Eligible Employee who previously ceased
being an Eligible Employee, the phrase ‘first becomes eligible to participate in
the Plan’ in subsection (b)(i) above shall be interpreted to apply only where
the Eligible Employee either (i) previously received payment of his or her total
Account balance under the Plan, and on or before the date of the last payment
was not eligible to continue (or elect to continue) to participate in the Plan
for periods after the last payment (other than through an election of a
different form and time of payment with respect to the amounts paid), or
(ii) regardless of whether such Eligible Employee previously received payment of
his or her total Account balance under the Plan, had not been eligible to
participate in the Plan (other than the accrual of notional investment earnings
under Section 4) at any time during the 24-month period ending on the date the
Eligible Employee again becomes eligible to participate in the Plan. If an
Eligible Employee fails to timely elect to make Compensation Deferrals for a
Plan Year pursuant to and in accordance with this Section 3.1(b), he or she may
not later elect to make Compensation Deferrals for that Plan Year. To the extent
an Eligible Employee does timely elect to make Compensation Deferrals for a Plan
Year pursuant to and in accordance with this subsection (b), such election shall
be irrevocable upon the expiration of the applicable election period prescribed
under this subsection (b).

 

  (c) Crediting of Compensation Deferrals Other Than RSU Deferrals. The amounts
deferred pursuant to this Section 3.1 shall reduce the Participant’s
Compensation during the Plan Year and shall be credited to the Participant’s
Compensation Deferral Account as of the last day of the month in which the
amounts (but for the deferral) would have been paid to the Participant. For each
Plan Year, the exact dollar amount to be deferred from each Compensation payment
shall be determined by the Administrator under such formulae as it shall adopt
from time to time.

 

  (d)

Special Rules for RSU Deferrals. Notwithstanding the foregoing, an Eligible
Employee as defined in Subsection 1.13 may make an election to defer into the
Plan amounts attributable to RSUs (as defined in Section 1.3 above) granted to

 

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  such Participant which are eligible for deferral into this Plan, as determined
by the Company. RSUs are eligible for deferral into this Plan to the extent that
the RSUs are scheduled to become vested no earlier than twelve months (and no
later than the maximum number of months determined in the sole discretion of the
Administrator) following the date such deferral election is effective. The
Administrator, in its sole discretion, shall determine the manner and deadlines
for Participants to make RSU Deferral elections, provided that any such election
shall comply with the requirements of Section 409A of the Code and the
regulations thereunder. To the extent an Eligible Employee timely elects to make
RSU Deferrals for a Plan Year pursuant to and in accordance with this subsection
(d), such election shall be irrevocable upon the expiration of the applicable
election period determined by the Administrator. Because deferrals of RSUs are
deemed under Section 409A of the Code to constitute subsequent changes in the
timing of payment of such RSUs, (i) such RSU Deferral Election shall not take
effect until at least 12 months after the date on which the election is
effective; and (ii) in the case of an election related to a payment not on
account of Disability, death, or Financial Hardship, the payment with respect to
which the election is made must be deferred for a period of not less than five
years from the date such payment would otherwise have been paid (i.e., the
vesting date). RSUs shall be invested only in the Company Stock Fund Option
described in Subsection 4.1(b). The amounts deferred pursuant to this Subsection
(d) shall be credited to the Participant’s RSU Deferral Account as of the date
upon which the underlying RSUs would have vested. In the event that the
Participant experiences a Termination of Employment, death or Disability during
the period which begins on the date the Participant’s RSU Deferral election
becomes effective and ends on the day before the date the Participant’s
underlying RSUs would become vested, or in the event that the vesting of the
RSUs is accelerated during such period (for example, as a result of a change of
control or other applicable event), such RSU Deferral Election shall become null
and void, and disposition of the attributable RSUs shall be made as if such RSU
Deferral Election had never been made.

 

3.2 Non-Qualified Core Contributions

Employers shall make a Non-Qualified Core Contribution to the Plan for a Plan
Year for each Eligible Employee designated by the Committee under Section 1.13
as being eligible to receive Non-Qualified Core Contributions, provided that
such employee is employed by an Employer on the last day of the Plan Year or
incurred a termination of employment with all Employers and Affiliates prior to
the last day of such Plan Year by reason of Normal Retirement (as defined in the
401(k) Plan), death, or Disability. The

 

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Employer’s Non-Qualified Core Contribution for the Plan Year with respect to an
Eligible Employee will equal the difference between the Actuant Corporation Core
Contribution allocable for the Plan Year for the Eligible Employee as described
in Section 3.01 of the 401(k) Plan calculated based on such Eligible Employee’s
Eligible Compensation under this Plan and without regard to any benefit
limitations imposed on such Eligible Employee’s annual additions pursuant to
Section 415 of the Code, minus the Actuant Corporation Core Contribution
allocable for such Eligible Employee under the 401(k) Plan for the Plan Year.
The Plan shall hold a Participant’s Non-Qualified Core Contributions in his or
her Non-Qualified Core Contribution Account. Participants shall not be eligible
to elect the timing or form of payment of their Non-Qualified Core
Contributions. Non-Qualified Core Contributions shall be paid in a lump sum
within ninety days of Termination of Employment.

SECTION 4

Notional Investment of Contributions

 

4.1 Investment Options

The Administrator has designated two Investment Options, the Deemed Interest
Crediting Option and the Company Stock Fund Option, for the notional investment
of Participants’ Accounts. The Investment Options are for recordkeeping purposes
only and do not allow Participants to direct any Employer assets (or, if
applicable, the assets of any trust related to the Plan). Each Participant’s
Account shall be adjusted pursuant to the Participant’s notional investment
elections made in accordance with this Section 4.

 

  (a)

Deemed Interest Crediting Option. Compensation Deferrals (other than RSU
Deferrals) and Non-Qualified Core Contributions invested in the Deemed Interest
Crediting Option shall be credited with deemed interest as of the end of each
month. A Participant’s monthly interest credit with respect to the portion of
the Participant’s Account that is attributable to the Participant’s service with
the Employers during a particular Plan Year and that is invested in the Deemed
Interest Crediting Option shall be equal to: (a) such portion of the
Participant’s Account as of the first day of the month, less any distributions
of such portion of the Participant’s Account during the month pursuant to
Section 6, multiplied by (b) a rate equal to one-twelfth of the applicable
“Deemed Interest Rate.” The “Deemed Interest Rate” shall be a rate of interest
determined annually by the Committee prior to the beginning of each Plan Year.
The Deemed Interest Rate shall be announced to Participants prior to the
deadline for election of Compensation Deferrals for that Plan Year. The Deemed
Interest Rate for a Plan Year shall apply to all Compensation Deferrals and
Non-Qualified Core Contributions attributable to service with the Employers
during the applicable Plan Year for as long as those

 

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  deferrals and contributions are maintained under the Plan; provided, however,
that if the Participant elects a short-term payout for a Plan Year’s
Compensation Deferrals pursuant to and in accordance with Section 6.3, and
thereafter elects to defer payment pursuant to and in accordance with
Section 6.4, the Deemed Interest Rate on such Compensation Deferrals for Plan
Years (or partial Plan Years) commencing after the effective date of the
subsequent deferral election shall be the Deemed Interest Rate in effect for the
date on which the Participant’s subsequent deferral election is effective.

 

  (b) Company Stock Fund Option. Compensation Deferrals and Non-Qualified Core
Contributions made to each Participant’s Account and invested in the Company
Stock Fund Option shall be deemed to be invested in Class A Common Shares of
Actuant Corporation commencing as of the “Share Purchase Date” next following
the date such deferrals or contributions are contributed to the Plan. “Share
Purchase Date” shall mean the “Trading Day” or days designated by the Committee
following the end of each calendar month. “Trading Day” shall mean a day on
which the New York Stock Exchange is open for trading. Notwithstanding the
foregoing, RSU Deferrals made to each Participant’s Account shall be deemed to
be invested in Class A Common Shares of Actuant Corporation commencing as of the
date such RSUs would otherwise have vested but for the contribution of such RSU
Deferrals into the Plan. An amount equal to the number of Class A Common Shares
of Actuant Corporation a Participant is deemed to own under the Company Stock
Fund Option multiplied by the dividend (if any) paid on such Class A Common
Shares on each dividend payment date shall be credited to the Participant’s
Account as soon as practicable following the dividend payment date and shall be
deemed to be invested in additional Class A Common Shares of Actuant Corporation
as though such dividends were a Compensation Deferral or a Non-Qualified Core
Contribution the Participant elected to invest in the Company Stock Fund Option.
The Company may, but is not required to, set aside Class A Common Shares in
anticipation of its obligation to pay certain benefits under the Plan in the
form of Class A Common Shares.

 

4.2 Investment Option Elections

A Participant may elect one or both of the Investment Options (allocated in
specified whole percentages) for the notional investment of his or her
Compensation Deferrals (other than RSU Deferrals) in accordance with the rules
established from time to time by the Committee. Amounts attributable to RSUs
deferred into this Plan and Non-Qualified Core Contributions made to this Plan
shall be invested only in the Company Stock Fund Option described in Subsection
4.1(b). A Participant may change his or her

 

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investment election with respect to future Compensation Deferrals in accordance
with the rules of the Committee. A Participant’s investment election shall
remain in effect until later changed in accordance with the rules of the
Committee. If a Participant does not make an investment election, all
Compensation Deferrals by the Participant (other than RSU Deferrals) made to the
Plan in the Plan Year in which no investment election by the Participant is
applicable will be deemed to be invested in the Deemed Interest Crediting
Option.

 

4.3 One-Time Election to Change Investment Option

Each Eligible Employee who was a Participant in the Plan immediately before
September 1, 2004 was given a one-time irrevocable election,, during the time
period designated by the Committee and announced to Participants, to transfer
all or a specified whole percentage of his or her notional interest in the
Deemed Interest Crediting Option as of August 31, 2004, plus any Compensation
Deferrals and Non-Qualified Core Contributions made to the Plan on his or her
behalf on or after September 1, 2004 but attributable to his or her service with
an Employer prior to September 1, 2004, to the Company Stock Fund Option in
accordance with rules established by the Committee for such purpose.

 

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SECTION 5

Accounting

 

5.1 Participants’ Accounts

For each Plan Year, at the direction of the Administrator, there shall be
established and maintained on the records of the Employer, the following
accounts for each Participant (to the extent applicable):

 

  (a) A “Compensation Deferral Account” to reflect the Compensation Deferrals
(other than RSU Deferrals) made by the Participant during such Plan Year and the
notional income, dividends, appreciation, and depreciation attributable thereto.

 

  (b) A “Non-Qualified Core Contribution Account” to reflect the Non-Qualified
Core Contributions credited on behalf of the Participant and the notional
income, dividends, appreciation, and depreciation attributable thereto.

 

  (c) An “RSU Deferral Account” to reflect RSU Deferrals made by the Participant
effective for such Plan Year and the notional income, dividends, appreciation,
and depreciation attributable thereto.

Except as expressly modified, all accounts maintained for a Participant are
referred to collectively as the Participant’s “Account.”

 

5.2 Participants Remain Unsecured Creditors

All amounts credited to a Participant’s Account under the Plan shall continue
for all purposes to be a part of the general assets of the Employer. Each
Participant’s interest in the Plan shall make him or her only a general,
unsecured creditor of the Employer. In the event that an Employer (other than
the Company) becomes insolvent and therefore unable to make a payment or
payments owed by it under the Plan, the Company shall make such payments;
provided, however, that nothing in this sentence shall make any Participant
anything other than a general, unsecured creditor of the Company.

 

5.3 Accounting Methods

The accounting methods or formulae to be used under the Plan for the purpose of
maintaining the Participants’ Accounts, including the calculation and crediting
of notional income, dividends, appreciation, and depreciation, shall be
determined by the Administrator, in its sole discretion. The accounting methods
or formulae selected by the Administrator may be revised from time to time. No
Participant or Beneficiary shall have any right to examine books, records, or
account of the Employers in connection with amounts payable under the Plan.

 

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5.4 Reports

Each Participant shall be furnished with periodic statements of his or her
Account, reflecting the status of his or her interest in the Plan, at least
annually.

 

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SECTION 6

Distributions

 

6.1 General Timing of Distributions

 

  (a) In General. Except as otherwise provided in this Section 6, payment of a
Participant’s Account shall commence within ninety days of the Participant’s
Termination of Employment, provided that with respect to a Participant’s
Non-Grandfathered Amounts, the Participant shall under no circumstances be
permitted, directly or indirectly, to designate the taxable year of payment
(other than an election that complies with the subsequent deferral election
rules under Section 6.2(c) and the payment of RSU Deferrals described in
Section 3.1(d)). Notwithstanding the foregoing, payments in any Plan Year shall
only be made to the extent the Administrator reasonably anticipates that such
payments are deductible for such Plan Year under Section 162(m) of the Code as
of the date specified in Section 6.1. If, pursuant to the foregoing sentence,
any amounts are not paid when originally scheduled, such amounts shall be paid
in the first taxable year which the Administrator reasonably anticipates (or
should reasonably anticipate) that such payments would be deductible under
Section 162(m) of the Code. (During any such delay in payment, unpaid amounts
shall continue to be credited with notional income, dividends, appreciation, and
depreciation.) Notwithstanding the foregoing, distribution of a Participant’s
Account shall be made without regard to the deductibility of the payments under
Section 162(m) of the Code if the time for distribution is accelerated pursuant
to Section 6.5 (Change of Control) or Section 6.6 (Death or Disability).

 

  (b)

Special Timing Rule for Specified Employees. Notwithstanding any provision in
the Plan to the contrary, with respect to a Participant’s Non-Grandfathered
Amounts, payment as a result of a Participant’s Termination of Employment to any
Participant who is a Specified Employee (as of his or her Termination of
Employment) shall not be made or commence before the date that is not less than
six months after such Participant’s Termination of Employment (or, if earlier,
such Participant’s date of death). For this purpose, a ‘Specified Employee’
shall have the meaning assigned to such term in Treasury Regulation §1.409A-1(i)
at any time during the 12-month period, as determined by the Administrator
ending with the annual date upon which key employees are identified by the
Administrator (the ‘Specified Employee Identification Date). If a Participant is
a Specified Employee as of the Specified Employee

 

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  Identification Date, such Participant shall be treated as a Specified Employee
for the entire 12-month period beginning on the effective date, as determined by
the Administrator ending with the annual date following the Specified Employee
Identification Date (but no later than the first day of the fourth month
following the Specified Employee Identification Date) (the ‘Specified Employee
Effective Date’). In lieu of applying the foregoing definition of a Specified
Employee, the Administrator may apply the alternative method described in
Treasury Regulation §1.409A-1(i)(5) in good faith with respect to any payment
under the Plan as belonging to the group of identified Specified Employees, to a
maximum of 200 such Specified Employees, regardless of whether such employee is
subsequently determined by the Employer, any governmental agency, or a court not
to be a Specified Employee, as defined above by reference to Section 416 of the
Code. In the event amounts under the Plan are payable to a Specified Employee in
installments, the first annual installment shall be delayed not less than six
months after such Participant’s Termination of Employment, with all other annual
installment payments payable as originally scheduled. During any delay in
payment under this subsection (b), unpaid amounts shall continue to be credited
with notional income, dividends, appreciation, and depreciation. To the extent
not otherwise designated by the Employer in a separate document forming a part
of the Plan applicable to all its nonqualified deferred compensation plans, the
Specified Employee Identification Date for determining the Employer’s Specified
Employees is each December 31 and the Specified Employee Effective Date is each
subsequent April 1 following the applicable Specified Employee Identification
Date. To the extent not otherwise designated by the Employer in a separate
document forming a part of the Plan, the definition of compensation used to
determine Specified Employee status shall be determined under Treasury
Regulation §1.415(c)-2(a).

 

6.2 Form of Payment

 

  (a)

Form of Payment for Notional Investments in Deemed Interest Crediting Option.
This subsection (a) applies to the portion of a Participant’s Account that is
invested in the Deemed Interest Crediting Option only. Payment (or installment
payments) of a Participant’s notional investment in the Deemed Interest
Crediting Option shall be made in cash. Each Participant shall indicate on his
or her benefit election form the form of payment (i.e., installments or lump
sum) for the Compensation Deferrals other than RSU Deferrals (and the notional
income attributable thereto) to be made for the specific Plan Year covered by
such benefit election form and invested in the Deemed Interest Crediting Option.
Subject to any acceleration of payments required under this Section 6, a
Participant may elect to receive such

 

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  payment in one of the following forms of payment upon such Participant’s
Termination of Employment commencing as of the date specified in Section 6.1
(i) a lump sum payment, (ii) five annual installment payments, or (iii) ten
annual installment payments; provided, however, that a Participant who elects to
receive annual installments for five or ten years shall instead receive payment
in a lump sum equal to the balance then credited to his or her Account pursuant
to and in accordance with the applicable provisions of this Section 6 if:
(A) such Participant’s Termination of Employment occurs due to his or her death
or Disability, or (B) distribution to such Participant is accelerated due to a
Change of Control. Except as permitted under Section 6.2(c) or as otherwise
permitted under Section 409A of the Code, a Participant’s election as to the
form of payment shall be irrevocable as of the date coinciding with the date on
which the initial deferral election becomes irrevocable under Section 3.1(b) or
3.2, as the case may be, and shall apply to all amounts credited to the
Participant’s Account that are (iii) attributable to service with the Employers
during the Plan Year with respect to which the election relates and
(iv) invested in the Deemed Interest Crediting Option. If the Participant
elected to receive five or ten annual installment payments, subject to any
acceleration of payments required under this Section 6, his or her first
installment shall be equal to 1/5th or 1/10th (respectively) of the balance then
credited to his or her Account that is (v) attributable to service with the
Employers during the Plan Year with respect to which the election relates and
(vi) invested in the Deemed Interest Crediting Option. Each subsequent annual
installment shall be paid to the Participant in each of the Participant’s
subsequent taxable years commencing with such Participant’s second taxable year
following the taxable year in which his or her Termination of Employment
occurred and ending in the Participant’s taxable year in which the final annual
installment is due. The amount of each subsequent installment shall be equal to
the balance then credited to the Participant’s Account that is
(vii) attributable to service with the Employers during the Plan Year with
respect to which the election relates and (viii) invested in the Deemed Interest
Crediting Option, divided by the number of annual installments remaining to be
made. While a Participant’s Account is in installment payout status, the unpaid
balance credited to the Participant’s Account shall continue to be credited with
notional income.

 

  (b)

Form of Payment for Notional Investments in Company Stock Fund Option. Subject
to any acceleration of payments required under this Section 6, payment of a
Participant’s notional investment in the Company Stock Fund Option upon such
Participant’s Termination of Employment shall commence as of the date specified
in Section 6.1 and, except as

 

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  provided below, shall be paid in the form of a lump sum in whole Class A
Common Shares of Actuant Corporation plus cash in an amount equal to the value
of any fractional interest in a Class A Common Share of Actuant Corporation.
Notwithstanding the foregoing, with respect to Compensation Deferrals invested
in the Company Stock Fund Option other than RSU Deferrals, each Participant may
indicate on his or her benefit election form the form of payment (i.e.,
installments or lump sum) for the Compensation Deferrals invested in the Company
Stock Fund (and the notional income attributable thereto), to be made for the
specific Plan Year covered by such benefit election form. Subject to any
acceleration of payments required under this Section 6, a Participant may elect
to receive such payment in one of the forms of payment (i.e., installments or
lump sum) described in subsection (a), above, but subject to the acceleration of
payment and subsequent deferral of payment provisions therein, upon such
Participant’s Termination of Employment commencing as of the date specified in
Section 6.1. Except as permitted under Section 6.2(c) or as otherwise permitted
under Section 409A of the Code, a Participant’s election as to the form of
payment shall be irrevocable as of the date coinciding with the date on which
the initial deferral election becomes irrevocable under Section 3.1(b) or 3.2,
as the case may be, and shall apply to all amounts credited to the Participant’s
Account that are (i) attributable to service with the Employers during the Plan
Year with respect to which the election relates, and (ii) attributable to
Compensation Deferrals invested in the Company Stock Fund Option. . The amount
of annual installment payments from the Company Stock Fund Option shall be
determined in a manner substantially similar to the methodology applied to
determine annual installment payments from the Deemed Interest Crediting Option,
as described in subsection (a), above, except that payment of any annual
installment shall be made in the form of whole Class A Common Shares of Actuant
Corporation plus cash in an amount equal to the value of any fractional interest
in a Class A Common Share of Actuant Corporation. Notwithstanding the foregoing,
RSU Deferrals, which are always notionally invested in the Company Stock Fund,
shall be paid only in the form of a lump sum. Non-Qualified Core Contributions,
which are always notionally invested in the Company Stock Fund, shall be paid
only in a lump sum within 90 days of the Participant’s Termination of
Employment.

 

  (c)

Subsequent Change in Form or Timing of Payment. Except to the extent otherwise
permitted under Section 409A of the Code, notwithstanding any provision of the
Plan to the contrary, including without limitation Section 6.4, with respect to
a Participant’s Non- Grandfathered Amounts, a Participant or the Employer, as
the case may be, shall not be

 

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  permitted to change or revoke the form or timing of payment with respect to
the Participant’s Compensation Deferrals (including RSU Deferrals) and/or
Non-Qualified Core Contributions on or after the date on which such election
would otherwise be irrevocable under Section 3.1(b), 3.1(d) or 3.2, as the case
may be. Notwithstanding the foregoing, a Participant or the Employer shall be
permitted to change or revoke, in the case of Compensation Deferrals other than
RSU deferrals, the form (i.e., lump sum or installments) or timing of payment of
such deferrals, or, in the case of RSU Deferrals, to change the timing of
payment of the Participant’s RSU Deferrals, provided that all of the following
requirements are satisfied with respect to such Participant’s or the Employer’s
subsequent election to change the form or timing of payment, but only to the
extent such subsequent election to change the form or timing of payment is so
authorized under rules established by the Administrator and approved by the
Committee: (i) such election shall not take effect until at least 12 months
after the date on which the election is made; (ii) in the case of an election
related to a payment not on account of Disability, death, or Financial Hardship,
the payment with respect to which the election is made must be deferred for a
period of not less than five years from the date such payment would otherwise
have been paid (or in the case of an installment payments treated as a single
payment within the meaning of Treasury Regulation §1.409A-2(b)(2), five years
from the date the first amount was scheduled to be paid); and (iii) in the case
of an election related to a payment at a specified time or pursuant to a fixed
schedule, such as a short-term payout election under Section 6.3, the election
be made not less than 12 months before the date the payment is scheduled to be
paid (or in the case of installment payments treated as a single payment within
the meaning of Treasury Regulation §1.409A-2(b)(2), 12 months before the date
the first amount was scheduled to be paid).

 

6.3 Short-Term Payout

A Participant may elect, on his or her Compensation Deferral election for any
Plan Year, to receive a short-term payout of the Participant’s Compensation
Deferrals other than RSU Deferrals (and the notional income, dividends,
appreciation, and depreciation attributable thereto) for that Plan Year. The
short-term payout shall be a lump sum payment in cash (for notional investments
in the Deemed Interest Crediting Option) or in whole Class A Common Shares of
Actuant Corporation plus cash in an amount equal to the value of any fractional
interest in a Class A Common Share of Actuant Corporation (for notional
investments in the Company Stock Fund Option), as applicable. Subject to the
other terms and conditions of this Plan, the short-term payout of Compensation
Deferrals other than RSU Deferrals shall be paid within 90 days of the earlier
of (a) the date selected by the Participant (which must be at least three years
after the date on which the Participant’s initial Compensation Deferral election
for a Plan Year becomes irrevocable under Section 3.1(b)), or (b) the
Participant’s Termination of Employment.

 

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6.4 Subsequent Deferral Elections for Short-Term Payouts

By filing a deferral election with the Committee at least six (6) months prior
to the date any short-term payout becomes payable, a Participant may defer
payment of all or any portion of a short-term payout or an amount payable
pursuant to a prior deferral election for a one-year period (or such longer
period as is approved by the Committee); provided that any such deferral
election shall be effective only with the consent of the Committee. As it is in
the Company’s interest to defer payments of Compensation, the Committee shall be
deemed to consent to a deferral election unless the Committee notifies the
Participant in writing, within thirty business days after receipt of the
deferral election, that consent is not given. Notwithstanding the foregoing,
with respect to a Participant’s Non-Grandfathered Amounts attributable to the
portion of his or her Compensation Deferrals other than RSU Deferrals that are
subject to a short-term payout deferral election pursuant to and in accordance
with Section 6.3, or with respect to a Participant’s RSU Deferrals, a
Participant shall not be permitted to revoke the timing of payments with respect
to Non-Grandfathered Amounts on or after the date on which the initial
short-term deferral or RSU payment election for a Plan Year would otherwise be
irrevocable under Sections 3.1(b) or 3.1(d), nor permitted to change the timing
of such payments unless all of the following requirements are satisfied with
respect to such Participant’s subsequent election to change the timing of
payment, but only to the extent such subsequent election is so authorized under
rules established by the Administrator and approved by the Committee: (i) such
election shall not take effect until at least 12 months after the date on which
the election is made; (ii) in the case of an election related to a payment not
on account of Disability, death, or Financial Hardship, the payment with respect
to which the election is made must be deferred for a period of not less than
five years from the date such payment would otherwise have been paid (or in the
case of an installment payments treated as a single payment within the meaning
of Treasury Regulation §1.409A-2(b)(2), five years from the date the first
amount was scheduled to be paid); and (iii) the election be made not less than
12 months before the date the payment is scheduled to be paid (or in the case of
installment payments treated as a single payment within the meaning of Treasury
Regulation §1.409A-2(b)(2), 12 months before the date the first amount was
scheduled to be paid).

 

6.5 Change of Control

If there is a Change of Control, the balance then credited to a Participant’s
Account shall be distributed to him or her in a lump sum within 90 days after
the date of the Change of Control.

 

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6.6 Special Rule for Death or Disability

If a Participant dies or becomes Disabled, the balance then credited to his or
her Account shall be distributed to the Participant (or his or her Beneficiary)
in a lump sum within 90 days after the date of death or Disability.

 

6.7 Beneficiary Designations

Each Participant may, pursuant to such procedures as the Administrator may
specify, designate one or more Beneficiaries. A Participant may designate
different Beneficiaries (or may revoke a prior Beneficiary designation) at any
time by delivering a new designation (or revocation of a prior designation) in
like manner. Any designation or revocation shall be effective only if it is
received by the Administrator. However, when so received, the designation or
revocation shall be effective as of the date the notice is executed (whether or
not the Participant still is living), but without prejudice to the Administrator
on account of any payment made before the change is recorded. The last effective
designation received by the Administrator shall supersede all prior
designations. If a Participant dies without having effectively designated a
Beneficiary, or if no Beneficiary survives the Participant, the Participant’s
Account shall be payable to his or her surviving spouse, or, if the Participant
is not survived by his or her spouse, the Account shall be paid to his or her
estate.

 

6.8 Financial Hardship

In the event that a Participant incurs a Financial Hardship, the Committee or
its delegate, in its sole discretion and notwithstanding any contrary provision
of the Plan, may determine that all or part of the Participant’s Compensation
Deferral Account shall be paid to him or her within 90 days of such Participant
incurring such Financial Hardship; provided, however, that the amount paid to
the Participant pursuant to this Section 6.8 shall be limited to the amount
reasonably necessary to alleviate the Participant’s Financial Hardship (which
may include amounts necessary to pay any Federal, state, local, or foreign
income taxes or penalties reasonably anticipated to result from the
distribution).

 

6.9 Payments to Incompetents

If any individual to whom a benefit is payable under the Plan is a minor or
legally incompetent, the Committee shall determine whether payment shall be made
directly to the individual, any person acting as his or her custodian or legal
guardian under the Uniform Transfers to Minors Act, his or her legal
representative or a near relative, or directly for his or her support,
maintenance or education.

 

6.10 Undistributable Accounts

Each Participant and (in the event of death) his or her Beneficiary shall keep
the Administrator advised of his or her current address. If the Administrator is
unable to locate a Participant to whom a Participant’s Account is payable under
this Section 6, the

 

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Participant’s Account shall be held in suspense pending location of the
Participant, without any prejudice to the Committee, the Administrator, or the
Company (and each of their respective authorized delegates), as the case may be,
including, without limitation, for any additional tax liability resulting from
such delay in payment, provided that such unpaid amounts shall continue to be
credited with notional income, dividends, appreciation, and depreciation. If the
Administrator is unable to locate a Beneficiary to whom a Participant’s Account
is payable under this Section 6 within six (6) months (or, with respect to a
Participant’s Non-Grandfathered Amounts, such other period during which payment
must commence under this Section 6 or, if later, such other period permitted
under Section 409A of the Code) of the Participant’s death, the Participant’s
Account shall be paid to the Participant’s estate.

 

6.11 Committee Discretion

Within the specific time periods described in this Section 6, the Committee
shall have sole discretion to determine the specific timing of the payment of
any Account balance under the Plan. In addition and notwithstanding any contrary
provision of the Plan, the Committee, in its sole discretion, may cause the
balance credited to a Participant’s Account to be paid to him or her in a lump
sum at any time following the Participant’s termination of employment with all
Employers and Affiliates. Notwithstanding the foregoing, the Committee shall
retain and exercise such discretion reserved hereunder only to the extent such
retention and exercise of discretion does not violate the requirements of
Section 409A of the Code with respect to a Participant’s Non-Grandfathered
Amounts.

 

6.12 Withholding; Reporting

To the extent required by law in effect at the time any distribution is made
from the Plan, the Employers shall withhold any taxes and such other amounts
required to be withheld. Further, to the extent required by law, the Employer
shall report amounts deferred and/or amounts taxable under the Plan to the
appropriate governmental authorities, including, without limitation, to the
United States Internal Revenue Service.

 

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SECTION 7

Participant’s Interest in Account

Subject to Sections 5.2 (relating to creditor status) and 9.2 (relating to
amendment and/or termination of the Plan), a Participant’s interest in the
balance credited to his or her Account at all times shall be 100% vested and
nonforfeitable.

 

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SECTION 8

Administration of the Plan

 

8.1 Plan Administrator

The Company is hereby designated as the administrator of the Plan (within the
meaning of Section 3(16)(A) of ERISA).

 

8.2 Committee

The Committee shall have the authority to control and manage the operation and
administration of the Plan. Any member of the Committee may resign at any time
by notice in writing mailed or delivered to the Secretary of the Company.

 

8.3 Actions by Committee

Each decision of a majority of the members of the Committee then in office shall
constitute the final and binding act of the Committee. The Committee may act
with or without a meeting being called or held and shall keep minutes of all
meetings held and a record of all actions taken by written consent.

 

8.4 Powers of Committee

The Committee shall have all powers and discretion necessary or appropriate to
supervise the administration of the Plan and to control its operation in
accordance with its terms, including, but not by way of limitation, the
following powers:

 

  (a) To interpret and determine the meaning and validity of the provisions of
the Plan and to determine any question arising under, or in connection with, the
administration, operation or validity of the Plan or any amendment thereto;

 

  (b) To determine any and all considerations affecting the eligibility of any
employee to become a Participant or remain a Participant in the Plan;

 

  (c) To cause one or more separate Accounts to be maintained for each
Participant;

 

  (d) To cause Compensation Deferrals, Non-Qualified Core Contributions, and
notional income, dividends, appreciation, and depreciation to be credited to
Participants’ Accounts;

 

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  (e) To establish and revise an accounting method or formula for the Plan, as
provided in Section 5.3;

 

  (f) To determine the manner and form in which any distribution is to be made
under the Plan;

 

  (g) To determine the status and rights of Participants and their spouses,
Beneficiaries or estates;

 

  (h) To employ such counsel, agents and advisers, and to obtain such legal,
clerical and other services, as it may deem necessary or appropriate in carrying
out the provisions of the Plan;

 

  (i) To establish, from time to time, rules for the performance of its powers
and duties and for the administration of the Plan;

 

  (j) To arrange for annual distribution to each Participant of a statement of
benefits accrued under the Plan;

 

  (k) To establish a claims and appeal procedure satisfying the minimum
standards of Section 503 of ERISA pursuant to which individuals or estates may
claim Plan benefits and appeal denials of such claims;

 

  (l) To delegate to any one or more of its members or to any other person,
severally or jointly, the authority to perform for and on behalf of the
Committee one or more of the functions of the Committee under the Plan; and

 

  (m) To decide all issues and questions regarding Account balances, and the
time, form, manner, and amount of distributions to Participants.

 

8.5 Decisions of Committee

Benefits under the Plan will be paid to a person only if the Committee or its
delegate decides in its discretion that the person is entitled to such benefits.
All actions, interpretations, and decisions of the Committee or its delegate
shall be conclusive and binding on all persons, and shall be given the maximum
possible deference allowed by law. No action at law or in equity shall be
brought to recover benefits under this Plan until the appeal rights herein
provided have been exercised and the Plan benefits requested in such appeal have
been denied in whole or in part. After exhaustion of the Plan’s claim
procedures, any further legal action taken against the Plan or its fiduciaries
by the Participant or other claimant must be filed in a court of law no later
than 120 days after the Committee’s final decision regarding the claim.

 

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8.6 Administrative Expenses

Expenses incurred in the administration of the Plan by the Committee or
otherwise, including legal fees and expenses, shall be paid by the Employers in
such proportions and allocations as the Committee determines.

 

8.7 Eligibility to Participate

No member of the Committee who is also an employee of an Employer shall be
excluded from participating in the Plan if otherwise eligible, but he or she
shall not be entitled, as a member of the Committee, to act or pass upon any
matters pertaining specifically to his or her own Account under the Plan.

 

8.8 Indemnification

Each of the Employers shall, and hereby does, indemnify and hold harmless the
members of the Committee, from and against any and all losses, claims, damages
or liabilities (including attorneys’ fees and amounts paid, with the approval of
the Board of Directors, in settlement of any claim) arising out of or resulting
from the implementation of a duty, act or decision with respect to the Plan, so
long as such duty, act or decision does not involve gross negligence or willful
misconduct on the part of any such individual.

 

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SECTION 9

Modification or Termination of Plan

 

9.1 Employers’ Obligations Limited

The Employers intend to continue the Plan indefinitely, and to maintain each
Participant’s Account until it is scheduled to be paid to him or her in
accordance with the provisions of the Plan. However, the Plan is voluntary on
the part of the Employers, and the Employers do not guarantee to continue the
Plan. The Company at any time may, by amendment of the Plan, suspend
Compensation Deferrals or Non-Qualified Core Contributions or may discontinue
Compensation Deferrals or Non-Qualified Core Contributions, with or without
cause.

 

9.2 Right to Amend or Terminate

The Board of Directors reserves the right to alter, amend or terminate the Plan,
or any part thereof, in such manner as it may determine, at any time and for any
reason. The Company, in its sole discretion, may seek a private letter ruling
from the Internal Revenue Service regarding the tax consequences of the Plan. If
such a ruling is sought, the Committee shall have the right to adopt such
amendments to the Plan, including retroactive amendments, as the Internal
Revenue Service may require as a condition to the issuance of such ruling.

 

9.3 Effect of Termination

If the Plan is terminated pursuant to this Section 9, the balances credited to
the Accounts of the affected Participants shall be distributed to them at the
time and in the manner set forth in Section 6; provided, however, that the
Committee, in its sole discretion, may authorize accelerated distribution of
Participants’ Accounts as of any earlier date; provided that with respect to
Non-Grandfathered Amounts, such discretion reserved to the Committee to
accelerate the form and timing of the distribution of Participants’ Accounts
shall be exercised only to the extent the termination of the Plan arises
pursuant to and in accordance with one of the following provisions:

 

  (a) Corporate Dissolution or Bankruptcy. The Plan is terminated and liquidated
by the Employer within 12 months of a corporate dissolution taxed under
Section 331 of the Code, or with the approval of a bankruptcy court pursuant to
Section 503(b)(1)(A) of the Bankruptcy Code, provided such amounts are included
in the Participants’ gross incomes in the latest of the following years (of, if
earlier, the taxable year in which such amounts are actually or constructively
received) (i) the calendar year in which the Plan is terminated and liquidated,
(ii) the first calendar year in which amounts are no longer subject to a
substantial risk of forfeiture, or (iii) the first calendar year in which the
payment is administratively practicable.

 

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  (b) Change of Control Event. The Employer takes irrevocable action to
terminate and liquidate the Plan within the 30 days before or 12 months after
the occurrence of a Change of Control, provided that all other plans sponsored
by the Employer after the Change of Control with which the Plan is required to
be aggregated under Section 409A of the Code are terminated and liquidated with
respect to each Participant that experienced the Change of Control, so that all
such Participants are required to receive a distribution of the amounts deferred
under the Plan and such aggregated plans within 12 months of the date the
Employer took such irrevocable action to terminate and liquidate all such
aggregated plans.

 

  (c) Termination of All Similar Arrangements. The Plan is terminated and
liquidated by the Employer, provided (i) the termination and liquidation does
not occur proximate to a downturn in the financial health of the Employer;
(ii) the Employer terminates and liquidates all other plans required to be
aggregated under Section 409A if the same Employer had deferrals of compensation
under all such aggregated plans, (iii) no payments are made on account of the
terminations (other than payments that would have been payable in the absence of
the plan terminations) within 12 months of the date the Employer takes
irrevocable action to terminate and liquidate all such aggregated plans,
(iv) all payments are made within 24 months of the of the date the Employer
takes irrevocable action to terminate and liquidate all such aggregated plans,
and (vi) within three years following the date the Employer takes irrevocable
action to terminate and liquidate all such aggregated plans, the Employer does
not establish any new nonqualified deferred compensation plans that would
otherwise have been aggregated with the Plan under Section 409A of the Code if
the same Participant participated in both plans.

 

  (d) Other. The Plan is terminated and liquidated pursuant to and in accordance
such other events and conditions prescribed under Section 409A of the Code.

.

 

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SECTION 10

General Provisions

 

10.1 Inalienability

In no event may either a Participant, a former Participant or his or her
Beneficiary, spouse or estate sell, transfer, anticipate, assign, hypothecate,
or otherwise dispose of any right or interest under the Plan; and such rights
and interests shall not at any time be subject to the claims of creditors nor be
liable to attachment, execution or other legal process. Accordingly, for
example, a Participant’s interest in the Plan is not transferable pursuant to a
domestic relations order.

 

10.2 Successors, Acquisitions, Mergers, Consolidations

The terms and conditions of the Plan shall inure to the benefit of and bind the
Employers, the Participants, their successors, assigns and personal
representatives.

 

10.3 Rights and Duties

Neither the Employers nor the Committee shall be subject to any liability or
duty under the Plan except as expressly provided in the Plan, or for any action
taken, omitted or suffered in good faith.

 

10.4 No Right to Employer Assets

No participant or other person shall acquire by reason of the Plan any right in
or title to any assets, funds or property of the Employers whatsoever,
including, without limiting the generality of the foregoing, any specific funds,
assets, or other property which the Employers, in their sole discretion, may set
aside in anticipation of liability hereunder. Any benefit which become payable
hereunder shall be paid from the general assets of the Employers. A Participant
shall have only a contractual right to the amounts, if any, payable hereunder to
that Participant. The Employer’s obligations under this Plan are not secured or
funded in any manner, even if the Company elects to establish a trust with
respect to the Plan. Even though benefits provided under the Plan are not
funded, the Company may establish a trust to assist in the payment of benefits.
All investments under this Plan are notional and do not obligate the Company (or
its delegates) to invest the assets of the Company or of any such trust in a
similar manner.

 

10.5 No Enlargement of Employment Rights

Neither the establishment or maintenance of the Plan, the making of any
Compensation Deferrals nor any action of any Employer or the Committee, shall be
held or construed to confer upon any individual any right to be continued as an
employee of the Employer nor, upon dismissal, any right or interest in any
specific assets of the Employers other than as provided in the Plan. Each
Employer expressly reserves the right to discharge any employee at any time.

 

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10.6 Apportionment of Costs and Duties

All acts required of the Employers under the Plan may be performed by the
Company for itself and its Affiliates, and the costs of the Plan may be
equitably apportioned by the Committee among the Company and the other
Employers. Whenever an Employer is permitted or required under the terms of the
Plan to do or perform any act, matter or thing, it shall be done and performed
by any officer or employee of the Employer who is thereunto duly authorized by
the board of directors of the Employer.

 

10.7 Compensation Deferrals Not Counted Under Other Employee Benefit Plans

Compensation Deferrals under the Plan will not be considered for purposes of
contributions or benefits under any other employee benefit plan sponsored by the
Employers.

 

10.8 Applicable Law

The provisions of the Plan shall be construed, administered and enforced in
accordance with applicable Federal law, and to the extent not preempted thereby
or inconsistent therewith, with the laws of the State of Wisconsin, without
regard to the conflicts of laws provisions of that State or any other
jurisdiction. Without limiting the generality and applicability of the foregoing
and notwithstanding any provision in the Plan to the contrary, if and to the
extent that the payment of any Non-Grandfathered Amounts would otherwise violate
the requirements of Section 409A of the Code, such Non-Grandfathered Amounts
shall be paid under such other conditions determined by the Administrator or the
Committee, as the case may be, that cause the payment of such Non-Grandfathered
Amounts to comply with Section 409A of the Code and the Plan shall be construed
and administered accordingly to achieve that objective.

 

10.9 Responsibility for Legal Effect

No representations or warranties, express or implied, are made by the Employers
or the Committee and neither the Employers nor the Committee assumes any
responsibility concerning the legal, tax, or other implications or effects of
the Plan.

 

10.10 Severability

If any provision of the Plan is held invalid or unenforceable, its invalidity or
unenforceability shall not affect any other provisions of the Plan, and in lieu
of each provision which is held invalid or unenforceable, there shall be added
as part of the Plan a provision that shall be as similar in terms to such
invalid or unenforceable provision as may be possible and be valid, legal, and
enforceable.

 

10.11 Captions

The captions contained in and the table of contents prefixed to the Plan are
inserted only as a matter of convenience and for reference and in no way define,
limit, enlarge or describe the scope or intent of the Plan nor in any way shall
affect the construction of any provision of the Plan.

 

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