Exhibit 10-D

 

DONALDSON COMPANY, INC.

ESOP RESTORATION PLAN

(2003 Restatement)

 

As Amended and Restated Effective as of August 1, 2003

 

 

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DONALDSON COMPANY, INC.

ESOP RESTORATION PLAN

(2003 Restatement)

 

TABLE OF CONTENTS

 

Page     

 

SECTION 1.

ESTABLISHMENT AND PURPOSE

1

 

 

 

 

 

1.1.

Establishment

 

 

1.2.

Purpose

 

 

 

 

 

SECTION 2.

DEFINITIONS

1

 

 

 

 

 

2.1.

Account

 

 

2.2.

Affiliate

 

 

2.3.

Beneficiary

 

 

2.4.

Board

 

 

2.5.

Change of Control

 

 

 

2.5.1.

Affiliate

 

 

 

2.5.2.

Beneficial Owner

 

 

 

2.5.3.

Exchange Act

 

 

 

2.5.4.

Person

 

 

2.6.

Code

 

 

2.7.

Committee

 

 

2.8.

Company

 

 

2.9.

Disability, Disabled

 

 

2.10.

Effective Date

 

 

2.11.

Eligible Employee

 

 

2.12.

ERISA

 

 

2.13.

ESOP

 

 

2.14.

Participant

 

 

2.15.

Plan

 

 

2.16.

Stock Units

 

 

2.17.

Termination of Employment

 

 

2.18.

Vested

 

 

 

 

 

SECTION 3.

PARTICIPATION

4

 

 

 

 

 

3.1.

Participation

 

 

3.2.

Termination of Participation

 

 

3.3.

Overriding Exclusion

 

 

 

 

 

 

 

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SECTION 4.

STOCK UNITS

5

 

 

 

 

 

4.1.

Stock Units

 

 

4.2.

Adjustment

 

 

4.3.

Dividend Units

 

 

4.4.

Vesting

 

 

 

 

 

SECTION 5.

TIME AND MANNER OF PAYMENTS

6

 

 

 

 

 

5.1.

Time of Payment

 

 

5.2.

Manner of Payment

 

 

5.3.

Changes in Time and Manner of Payment

 

 

5.4.

Change in Control Distributions

 

 

5.5.

Acceleration of Payments

 

 

 

5.5.1.

When Available

 

 

 

5.5.2.

Forfeiture

 

 

5.6.

Death Benefit

 

 

5.7.

Beneficiary Designation

 

 

 

 

 

SECTION 6.

STOCK UNIT ACCOUNT

8

 

 

 

 

 

6.1.

Participant Accounts

 

 

6.2.

Charges Against Accounts

 

 

 

 

 

SECTION 7.

FUNDING

8

 

 

 

 

 

7.1.

Funding

 

 

7.2.

Corporate Obligation

 

 

 

 

 

SECTION 8.

FORFEITURE OF BENEFITS

8

 

 

 

 

SECTION 9.

ADMINISTRATION

9

 

 

 

 

 

9.1.

Authority

 

 

9.2.

Liability

 

 

9.3.

Procedures

 

 

9.4.

Claim for Benefits

 

 

9.5.

Claims Procedure

 

 

 

9.5.1.

Original Claim

 

 

 

9.5.2.

Claims Review Procedure

 

 

 

9.5.3.

General Rules

 

 

9.6.

Payments upon Imposition of Federal or State Taxes

 

 

9.7.

Legal Fees

 

 

9.8.

Errors in Computations

 

 

 

 

 

 

 

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SECTION 10.

MISCELLANEOUS

12

 

 

 

 

 

10.1.

Not an Employment Contract

 

 

10.2.

Nontransferability

 

 

10.3.

Tax Withholding

 

 

10.4.

Expenses

 

 

10.5.

Governing Law

 

 

10.6.

Amendment and Termination

 

 

10.7.

Rules of Interpretation

 

 

 

 

 

APPENDIX A

ESOP RESTORATION PLAN PARTICIPANTS

A-1

 

 

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DONALDSON COMPANY, INC.

ESOP RESTORATION PLAN

(2003 Restatement)

 

SECTION 1

 

ESTABLISHMENT AND PURPOSE

 

1.1.      Establishment. Effective as of August 1, 1990, Donaldson Company, Inc.
established a nonqualified, unfunded supplemental deferred compensation plan for
a select group of highly compensated employees known as the “DONALDSON COMPANY,
INC. ESOP RESTORATION PLAN.” Effective as of August 1, 2003, the Plan document
is amended and restated to be as set forth herein.

 

1.2.      Purpose. The purposes of this Plan are to enable the Company to
supplement the benefits for a select group of management or highly compensated
employees under the Donaldson Company, Inc. Employee Stock Ownership Plan which
will be reduced because of the compensation limitation under section 401(a)(17)
of the Code; to provide a means whereby certain amounts payable by the Company
to a select group of management or highly compensated employees may be deferred
to some future period; and to attract and retain certain executive employees of
outstanding competence.

 

SECTION 2

 

DEFINITIONS

 

The following words and phrases shall have the following meanings, unless a
different meaning is plainly required by the context. Any masculine terminology
used in the Plan shall also include the feminine gender and the definition of
any terms in the singular shall also include the plural.

 

2.1.      Account— the bookkeeping account established under this Plan for a
Participant pursuant to Section 6.1.

 

2.2.      Affiliate — a business entity which is under “common control” with the
Company or which is a member of an “affiliated service group” that includes the
Company, as those terms are defined in section 414(b), (c) and (m) of the Code.
A business entity shall also be treated as an Affiliate if, and to the extent
that, such treatment is required by regulations under section 414(o) of the
Code. In addition to said required treatment, the Committee may, in its
discretion, designate as an Affiliate any business entity which is not such a
“common control” or “affiliated service group” business entity but which is
otherwise affiliated with the Company, subject to such limitations as the
Committee may impose.

 

2.3.      Beneficiary — any person or entity validly designated by the
Participant in accordance with Section 5 to receive the benefits, if any,
payable from the Participant’s Account after the Participant’s death. Designated
persons or entities shall not be considered Beneficiaries until the death of the
Participant.

 

 

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2.4.      Board — the Board of Directors of the Company.

 

2.5.      Change Of Control— a “Change in Control” shall be deemed to have
occurred if the event set forth in any one of the following paragraphs shall
have occurred:

 

 

(a)

any Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of the Company’s then outstanding securities, excluding any Person who becomes
such a Beneficial Owner in connection with a transaction described in clause (i)
of paragraph (c) below; or

 

 

(b)

the following individuals cease for any reason to constitute 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 the Company) whose appointment or election by the Board
or nomination for election by the Company’s stockholders was approved or
recommended by a vote of at least two-thirds (2/3) 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 or recommended;
or

 

 

(c)

there is consummated a merger or consolidation of the Company or any direct or
indirect subsidiary of the Company with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Company 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), in combination with
the ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any subsidiary of the Company, at least
60% of the combined voting power of the securities of the Company 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 the Company (or similar transaction) in which no Person is
or becomes the Beneficial Owner, directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of the Company’s
then outstanding securities; or

 

 

(d)

the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or there is consummated an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets,
other than a sale or disposition by the Company of all or substantially all of
the Company’s assets to an entity, at least 60% of the combined voting power of
the voting securities of which are owned by stockholders of the Company in
substantially the same proportions as their ownership of the Company immediately
prior to such sale.

 

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Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions. Solely for
purposes of this Section 2.5, the following words and phrases shall have the
following meanings:

 

2.5.1.   Affiliate — an “affiliate” within the meaning of Rule 12b-2 promulgated
under Section 12 of the Exchange Act.

 

2.5.2.   Beneficial Owner — a “beneficial owner” within the meaning of Rule
13d-3 under the Exchange Act.

 

2.5.3.   Exchange Act — the Securities Exchange Act of 1934, as amended from
time to time.

 

2.5.4.   Person — a “person” within the meaning of Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its Affiliates, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.

 

2.6.      Code — the Internal Revenue Code of 1986, including applicable
regulations for the specified section of the Code. Any reference in this Plan
Statement to a section of the Code, including the applicable regulation, shall
be considered also to mean and refer to any subsequent amendment or replacement
of that section or regulation.

 

2.7.      Committee — the Human Resources Committee of the Board of Directors of
the Company.

 

2.8.      Company — Donaldson Company, Inc. and, except in determining under
Section 2.5 hereof whether or not any Change in Control has occurred, shall
include any successor by merger, purchase or otherwise.

 

2.9.      Disability, Disabled — a physical or mental impairment which
constitutes total and permanent disability and during which the Eligible
Employee is not receiving any payments of an Early Retirement Pension or a
Vested Benefit under the Pension Plan, and the Eligible Employee either:

 

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(a)

is eligible to receive long-term disability benefits under the Company’s
separate long-term disability insurance plan (which program shall be
administered on a uniform and nondiscriminatory basis); if such separate
long-term disability coverage is elected by the Eligible Employee, or

 

 

(b)

is eligible to receive and is actually receiving (after the applicable waiting
period) benefits under the federal Social Security Act as in effect at the time
of the Disability.

 

2.10.    Effective Date — August 1, 1990, the original effective date of the
Plan. The amended Plan document as set forth herein is effective as of August 1,
2003.

 

2.11.    Eligible Employee — an executive employee of the Company or its
Affiliates.

 

2.12.    Erisa — the Employee Retirement Income Security Act of 1974, including
applicable regulations for the specified section of ERISA. Any reference in this
Plan to a section of ERISA, including the applicable regulation, shall be
considered also to mean and refer to any subsequent amendment or replacement of
that section or regulation.

 

2.13.    Esop — the tax-qualified, stock bonus plan known as the “Donaldson
Company, Inc. Employee Stock Ownership Plan (1987 Restatement),” as amended from
time to time.

 

2.14.    Participant — an Eligible Employee or a former Eligible Employee of the
Company or its Affiliates who has any amount credited to his or her Account in
this Plan.

 

2.15.    Plan — the Donaldson Company, Inc. ESOP Restoration Plan as set forth
herein, and as the same may be amended from time to time.

 

2.16.    Stock units — the units (previously referred to as “Performance Units”)
credited to a Participant’s Account as provided in Section 4.1.

 

2.17.    Termination of Employment — the complete severance of an employee’s
employment relationship with the Company and all Affiliates, if any, for any
reason other than the employee’s death or Disability.

 

2.18.

Vested — nonforfeitable.

 

SECTION 3

 

PARTICIPATION

 

3.1.      Participation. Participation in the Plan on and after August 1, 2003
shall be limited to the persons listed on Appendix A.

 

3.2.      Termination of participation. A person shall cease to be a Participant
as soon as all amounts credited to the Participant’s Account have been paid in
full.

 

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3.3.      Overriding exclusion. Notwithstanding anything apparently to the
contrary in this Plan or in any written communication, summary, resolution or
document or oral communication, no individual shall be a Participant in this
Plan, develop benefits under this Plan or be entitled to receive benefits under
this Plan (either for the employee or his or her survivors) unless such
individual is a member of a select group of management or highly compensated
employees (as that expression is used in ERISA). If a court of competent
jurisdiction, any representative of the U.S. Department of Labor or any other
governmental, regulatory or similar body makes any direct or indirect, formal or
informal, determination that an individual is not a member of a select group of
management or highly compensated employees (as that expression is used in
ERISA), such individual shall not be (and shall not have ever been) a
Participant in this Plan at any time. If any person not so defined has been
erroneously treated as a Participant in this Plan, upon discovery of such error
such person’s erroneous participation shall immediately terminate AB INITIO and
upon demand such person shall be obligated to reimburse the Company for all
amounts erroneously paid to him or her.

 

SECTION 4

 

STOCK UNITS

 

4.1.      Stock units. The number of Stock Units credited to a Participant’s
Account shall equal the number credited as of that date under the terms of this
Plan then in effect, subject to any:

 

 

(a)

adjustment pursuant to Section 4.2;

 

 

(b)

increase pursuant to Section 4.3; or

 

 

(c)

reduction due to payments made, as provided in Section 6.2.

 

4.2.      Adjustment. In the event of any change in the outstanding shares of
common stock of the Company by reason of any stock split or stock dividend in
the form of a split, the Committee shall adjust the number of Stock Units in a
Participant’s Account so that such number equals the number of Stock Units in
the Account prior to the event, multiplied by a fraction, the denominator of
which is the number of Stock Units in the Account prior to the event, and the
numerator of which is the number of shares of Common Stock the Participant would
have had after the event if the Participant had shares of Common Stock
immediately prior to the event equal in number to the number of Stock Units in
the Participant’s Account immediately prior to the event. In the event of any
dividend (other than a stock dividend in the form of a split), recapitalization,
merger, consolidation, spinoff, reorganization, combination or exchange of
shares or other similar corporate change, then if the Committee, or the board of
directors of a successor corporation, shall determine, in its sole discretion,
that such change equitably requires an adjustment in the number of Stock Units
then held in the Participant’s Account, such adjustment shall be made by the
Committee or said board and shall be conclusive and binding for all purposes of
the Plan.

 

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4.3.      Dividend Units. The number of Stock Units in a Participant’s Account
shall be automatically increased as of each Common Stock dividend payment date
in an amount equal to the number of shares of Common Stock that could be
purchased on such dividend payment date with the cash dividends that would be
paid on a number of shares of Common Stock equal to the number of Stock Units in
the Participant’s Account on the record date for such dividend.

 

4.4.      Vesting. Subject to the forfeiture provisions of Section 8, the
Accounts of all Participants shall be 100% Vested at all times.

 

SECTION 5

 

TIME AND MANNER OF PAYMENTS

 

5.1.      Time of payment. Payment of a Participant’s Account under the Plan
will commence as soon as administratively feasible (but no more than twenty (20)
days) following the occurrence of the earliest of the following events:

 

 

(a)

death,

 

 

(b)

Disability, or

 

 

(c)

the date of distribution selected by the Participant in writing at a time and on
a form prescribed by the Committee.

 

Payment of a Participant’s Account may not begin prior to the Participant’s
Termination of Employment.

 

5.2.      Manner of Payment. A Participant’s Account will be paid to the
Participant in either a single lump-sum payment or in annual installments of not
more than twenty (20) years. The Participant must elect a manner of payment at
the time the Participant elects his or her date of distribution pursuant to
Section 5.1(c). In the event no election was made by the Participant, payment
shall be in a single lump-sum. Payment to the Participant shall be made, net of
withholding taxes, exclusively in shares of Common Stock, one share for each
Stock Unit distributed. For purposes of determining any tax withholding on a
payment, the value of Common Stock will be the market price of such Common Stock
as of the close of business on the day prior to the date as of which the payment
is made.

 

5.3.      Changes in Time and Manner of Payment. Notwithstanding the foregoing,
a Participant may make a new election concerning selection of the time and form
of payment authorized pursuant to this Section 5 (the “New Election”) in
accordance with the following terms and conditions, unless waived or modified by
the Committee:

 

 

(a)

A New Election shall only be permitted once and must be made and become
effective as hereinafter provided, if at all, prior to the Participant’s
Termination of Employment, death or Disability, whichever happens first;

 

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(b)

A New Election shall become effective twelve months after it is received by the
Company; and

 

 

(c)

If any of the events set forth in Section 5.1 of the Plan occur prior to the
effective date of a New Election with respect to previously credited deferrals,
then payments shall be paid hereunder to or with respect to the Participant
according to the elections in effect at the time of the event.

 

5.4.      Change in Control Distributions. Notwithstanding any other provision
of this Section 5, a Participant or Beneficiary will receive a distribution of
his or her entire Account if a Change in Control occurs. Distribution of the
entire Account shall be made on the date of the Change in Control. Such
distribution shall be made in a single lump-sum cash payment.

 

5.5.      Acceleration of Payments.

 

5.5.1.   When Available. A Participant or Beneficiary whose Termination of
Employment has occurred may receive an accelerated payment of his or her entire
Account (after reduction for the forfeiture described in Section 5.5.2). To
receive such an accelerated payment, the Participant or Beneficiary must file a
written payment application with the Committee. Payment of the accelerated
payment (after reduction for the forfeiture described in Section 5.5.2) shall be
made as soon as administratively feasible (but no more than twenty (20) days)
following the approval of a completed application by the Committee. Such
accelerated payment shall be made in a lump-sum stock distribution. The amount
of the accelerated payment shall be equal to the value of the Account as of such
distribution date (after reduction for the forfeiture described below).

 

5.5.2.   Forfeiture. Upon the approval of an accelerated payment, there shall be
irrevocably forfeited from the Account of the Participant or Beneficiary an
amount equal to ten percent (10%) of the Account.

 

5.6.      Death Benefit. In the event of a Participant’s death, the Company
shall pay the amount of the Participant’s Account as of the date of death (as
adjusted from time to time pursuant to Section 6.2) in a lump-sum or in
installments, as previously elected by the Participant, to the Participant’s
designated Beneficiary as soon as administratively feasible. In the event no
election was made by the Participant, payment shall be in a single lump-sum
stock distribution (and cash for fractional shares).

 

5.7.       Beneficiary Designation. A Participant shall submit to the Company
upon initial designation as an Eligible Employee in the Plan, and at such other
times as the Participant desires, on a form provided by the Committee, a written
designation of the beneficiary or beneficiaries to whom payment of the
Participant’s Account under the Plan shall be made in the event of the
Participant’s death. Beneficiary designations shall become effective only when
received by the Company. Beneficiary designations first received by the Company
after the Participant’s death, and any designations in effect at the time a
valid subsequent designation is received by the Company, shall be invalid and
have no effect. If a Participant has not designated a Beneficiary, or if no
designated Beneficiary is living on the date of distribution, the Participant’s
Account shall be distributed to those persons entitled to receive the
Participant’s benefit under the Donaldson Company, Inc. Salaried Employees’
Pension Plan (1997 Restatement), as amended from time to time.

 

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SECTION 6

 

STOCK UNIT ACCOUNT

 

6.1.      Participant Accounts. The Committee shall cause a bookkeeping account
to be kept in the name of each Participant which shall reflect the Stock Units
credited to a Participant.

 

6.2.      Charges Against Accounts. There shall be charged against each
Participant’s bookkeeping account any payments made to the Participant or the
Participant’s Beneficiary in accordance with Section 5.

 

SECTION 7

 

FUNDING

 

7.1.      Funding. The Company and its Affiliates shall be responsible for
paying all benefits due hereunder. For the purpose of facilitating the payment
of benefits due hereunder, the Company may (but shall not be required to)
establish and maintain a grantor trust pursuant to an Agreement between the
Company and a trustee selected by the Company; provided, however, that any such
grantor trust must be structured so that it does not result in any federal
income tax consequences to any Participant until distributions under Section 5
are actually received. The Company may contribute to a grantor trust thereby
created such amounts as it may from time to time determine.

 

7.2.      Corporate Obligation. Neither the officers nor any member of the Board
of Directors of the Company or any of its Affiliates in any way secures or
guarantees the payment of any benefit or amount which may become due and payable
hereunder to or with respect to any Participant. Each Participant and other
person entitled at anytime to payments hereunder shall look solely to the assets
of the Company and its Affiliates for such payments as an unsecured, general
creditor. Nothing herein shall be construed to give a Participant, Beneficiary
or any other person or persons any right, title, interest or claim in or to any
specific asset, fund, reserve, account or property of any kind whatsoever owned
by the Company or in which it may have any right, title or interest now or in
the future. After benefits shall have been paid to or with respect to a
Participant and such payment purports to cover in full the benefit hereunder,
such former Participant or other person or persons, as the case may be, shall
have no further right or interest in the other assets of the Company and its
Affiliates in connection with this Plan.

 

SECTION 8

 

FORFEITURE OF BENEFITS

 

All unpaid benefits under this Plan shall be permanently forfeited if the
Participant is discharged from employment with the Company for cause, or if the
Committee determines that the Participant:

 

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(a)

engaged in competition with the Company during, or within two years following,
his termination of employment with the Company; or

 

 

(b)

performed acts of willful malfeasance or gross negligence in a matter of
material importance to the Company.

 

SECTION 9

 

ADMINISTRATION

 

9.1.      Authority. The Plan shall be administered by the Committee, which
shall have full discretionary power and authority to administer and interpret
the Plan and to determine all factual and legal questions under the Plan,
including but not limited to the entitlement of Participants and Beneficiaries,
and the amount of their respective interests.

 

9.2.      Liability. No member of the Committee and no director or member of the
management of the Company or its Affiliates shall be liable to any persons for
any actions taken under the Plan, or for any failure to effect any of the
objective or purposes of the Plan, by reason of insolvency or otherwise.

 

9.3.      Procedures. The Committee may from time to time adopt such rules and
procedures as it deems appropriate to assist in the administration of the Plan.

 

9.4.      Claim for benefits. No employee or other person shall have any claim
or right to payment of any amount hereunder until payment has been authorized
and directed by the Committee.

 

9.5.      Claims Procedure. Until modified by the Committee, the claims
procedure set forth in this Section 9.5 shall be the claims procedure for the
resolution of disputes and disposition of claims arising under the Plan.

 

9.5.1.   Original Claim. Any employee, former employee, or Beneficiary of such
employee or former employee may, if the employee, former employee or Beneficiary
so desires, file with the Committee a written claim for benefits under the Plan.
Within ninety (90) days after the filing of such a claim, the Committee shall
notify the claimant in writing whether the claim is upheld or denied in whole or
in part or shall furnish the claimant a written notice describing specific
special circumstances requiring a specified amount of additional time (but not
more than one hundred eighty (180) days from the date the claim was filed) to
reach a decision

on the claim. If the claim is denied in whole or in part, the Committee shall
state in writing:

 

 

(a)

the specific reasons for the denial,

 

 

(b)

the specific references to the pertinent provisions of this Plan on which the
denial is based,

 

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(c)

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, and

 

 

(d)

an explanation of the claims review procedure set forth in this Section.

 

9.5.2.   Claims Review Procedure. Within sixty (60) days after receipt of notice
that the claim has been denied in whole or in part, the claimant may file with
the Committee a written request for a review and may, in conjunction therewith,
submit written issues and comments. Within sixty (60) days after the filing of
such a request for review, the Committee shall notify the claimant in writing
whether, upon review, the claim was upheld or denied in whole or in part or
shall furnish the claimant a written notice describing specific special
circumstances requiring a specified amount of additional time (but not more than
one hundred twenty days (120) from the date the request for review was filed) to
reach a decision on the request for review.

 

 

9.5.3.

General Rules.

 

 

(a)

No inquiry or question shall be deemed to be a claim or a request for a review
of a denied claim unless made in accordance with the claims procedure. The
Committee may require that any claim for benefits and any request for a review
of a denied claim be filed on forms to be furnished by the Committee upon
request.

 

 

(b)

All decisions on original claims shall be made by the Committee and requests for
a review of denied claims shall be made by the Committee.

 

 

(c)

The Committee may, in its discretion, hold one or more hearings on a claim or a
request for a review of a denied claim.

 

 

(d)

Claimants may be represented by a lawyer or other representative at their own
expense, but the Committee reserves the right to require the claimant to furnish
written authorization. A claimant’s representative shall be entitled to copies
of all notices given to the claimant.

 

 

(e)

The decision of the Committee on an original claim or on a request for a review
of a denied claim shall be served on the claimant in writing. If a decision or
notice is not received by a claimant within the time specified, the claim or
request for a review of a denied claim shall be deemed to have been denied.

 

 

(f)

Prior to filing a claim or a request for a review of a denied claim, the
claimant or the claimant’s representative shall have a reasonable opportunity to
review a copy of this Plan Statement and all other pertinent documents in the
possession of the Company and its Affiliates.

 

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9.6.      Payments Upon Imposition of Federal or State Taxes. If any Participant
is determined to be subject to federal or state income tax on any amount accrued
on his or her behalf under this Plan prior to the time of payment hereunder,
federal or state taxes attributable to the amount determined to be so taxable
shall be distributed by the Plan to such Participant. An amount accrued on his
or her behalf under this Plan shall be determined to be subject to federal
income tax upon the earliest of:

 

 

(i)

a final determination by the United States Internal Revenue Service addressed to
the Participant which is not appealed to the courts;

 

 

(ii)

a final determination by the United States Tax Court or any other Federal Court
affirming any such determination by the Internal Revenue Service; or

 

 

(iii)

an opinion by the Tax Counsel of the Company, addressed to the Company that, by
reason of Treasury Regulations, amendments to the Internal Revenue Code,
published Internal Revenue Service rulings, court decisions or other substantial
precedent, amounts accrued on a Participant’s behalf hereunder are subject to
federal or state income tax prior to payment.

 

The Company shall undertake at its sole expense to defend any tax claims
described herein which are asserted by the Internal Revenue Service or by any
state revenue authority against any Participant, including attorney fees and
costs of appeal, and shall have the sole authority to determine whether or not
to appeal any determination made by the Internal Revenue Service, by any state
revenue authority or by a lower court. The Company also agrees to reimburse any
Participant for any interest or penalties in respect of federal or state tax
claims hereunder upon receipt of documentation of same.

 

9.7.      Legal Fees. If the Company does not pay the benefits required under
the terms of the Plan for reasons other than the insolvency of the Company, the
Company agrees to reimburse any Participant for all legal fees incurred in
enforcing his or her claim to benefits under the Plan.

 

9.8.      Errors in Computations. The Committee shall not be liable or
responsible for any error in the computation of any benefit payable to or with
respect to any Participant resulting from any misstatement of fact made by the
Participant or by or on behalf of any Beneficiary to whom such benefit shall be
payable, directly or indirectly, to the Committee, and used by the Committee in
determining the benefit. The Committee shall not be obligated or required to
increase the benefit payable to or with respect to such Participant which, on
discovery of the misstatement, is found to be understated as a result of such
misstatement of the Participant. However, the benefit of any Participant which
is overstated by reason of any such misstatement or any other reason shall be
reduced to the amount appropriate in view of the truth (and to recover any prior
overpayment).

 

 

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SECTION 10

 

MISCELLANEOUS

 

10.1.    Not an Employment Contract. This Plan is not and shall not be deemed to
constitute a contract of employment between the Company and any employee or
other person, nor shall anything herein contained be deemed to give any employee
or other person any right to be retained in the Company’s employ or in any way
limit or restrict the Company’s right or power to discharge any employee or
other person at any time and to treat him without regard to the effect which
such treatment might have upon the employee as a Participant in the Plan.

 

10.2.    Nontransferability. A Participant’s rights and interest under the Plan,
including amounts payable, may not be assigned, alienated, pledged or
transferred except, in the event of a Participant’s death to his Beneficiary. No
benefit payable under this Plan shall be subject to attachment, garnishment,
execution following judgment or other legal process before actual payment to the
Participant or Beneficiary.

 

10.3.    Tax Withholding. The Company shall withhold the amount of any federal,
state or local income tax or other tax required to be withheld by the Company
under applicable law with respect to any amount payable under the Plan. Any cash
payable in lieu of fractional shares shall be applied to the payment of tax
withholding. The Participant shall not be liable for any tax withholding.

 

10.4.    Expenses. All expenses of administering the Plan shall be borne by the
Company.

 

10.5.    Governing Law. Except to the extent that federal law is controlling,
the Plan shall be construed and enforced in accordance with and governed by the
laws of the State of Minnesota.

 

10.6.    Amendment and Termination. The Company reserves the power to
unilaterally amend this Plan at any time, either prospectively or retroactively
or both by action of the Committee (with the written concurrence of the Chief
Executive Officer of the Company). The Committee may likewise terminate or
curtail the benefits of this Plan both with regard to persons expecting to
receive benefits in the future and persons already receiving benefits at the
time of such action; provided, however, that the Committee may not amend or
terminate the Plan with respect to benefits that have accrued and are Vested
pursuant to Section 4 in any manner that reduces the amount of such benefits or
alters the effect of any participant election previously filed with the Company.
No modification of the terms of this Plan shall be effective unless it is in
writing and signed on behalf of the Company by a person authorized to execute
such writing. No oral representation concerning the interpretation or effect of
this Plan shall be effective to amend the Plan.

 

10.7.    Rules of Interpretation. The titles given to the various sections of
this Plan are inserted for convenience of reference only and are not part of
this Plan, and they shall not be considered in determining the purpose, meaning
or intent of any provision hereof. This Plan shall be construed and this Plan
shall be administered to create an unfunded plan providing deferred compensation
to a select group of management or highly compensated employees so that it is
exempt from the requirements of Parts 2, 3 and 4 of Title I of ERISA and
qualifies for a form of simplified, alternative compliance with the reporting
and disclosure requirements of Part 1 of Title I of ERISA.

 

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