Exhibit 10.2


 


TOWER TECH
HOLDINGS INC.


DEFERRED
COMPENSATION PLAN


 


ARTICLE 1.


PURPOSE


 


1.1                                 Deferred
Compensation.  The purpose of the Tower Tech Holdings, Inc.
Deferred Compensation Plan (the “Plan”) is to provide incentives and rewards to
certain key employees and nonemployee directors of Tower Tech Holdings, Inc.
(“Company”) in the form of deferred compensation. The Plan is an unfunded
deferred compensation arrangement for a select group of management or highly
compensated employees within the meaning of Sections 201(2), 301(a)(3), and
401(a)(1) of the Employee Retirement Income Security Act of 1974 (“ERISA”)
and 29 C.F.R. § 2520.104-23(b)(2), and is intended to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and the regulations issued thereunder.


 


ARTICLE 2.


ADMINISTRATION


 


2.1                                 Administration
and Delegation of Authority. The Plan shall be administered by
the Board of Directors of the Company (the “Board”). Hereafter, the Board may be
referred to as the “Administrator.”  No
member of the Board shall participate in any decisions concerning the payments
to be made to him or her, or other matters relating to his or her benefits
hereunder. All actions of the Board shall be determined by a majority of its
members at a meeting at which a quorum is present, or by a majority of all
members in writing signed by all members, whether or not voting in favor of
such determination. A majority of all of the members shall constitute a quorum.


 


2.2                                 Powers.
Except as otherwise provided, and subject to the provisions of the Plan,
the Administrator shall have full power and authority to administer and
interpret the Plan, to adopt and revise rules, regulations and guidelines
relating to the Plan and, to make all other determinations necessary or
advisable for the administration of the Plan. Decisions and determinations by
the Administrator shall be final and binding on all parties including, but not
limited to, the Company and its employees and officers, whether or not they
participate in the Plan.


 


ARTICLE 3.


PARTICIPATION


 


3.1                                 Selection
of Participants and Plan Entry. The Administrator shall, from
time to time, designate those key employees who shall be eligible to
participate in the Plan. Any key employee selected to participate in the Plan
shall continue to participate each plan year until otherwise determined by the
Administrator. The Administrator shall periodically review its selection of
participants and make any changes as the Administrator, in its sole discretion,
deems appropriate. The Administrator may, in its sole discretion, designate
certain key employees as being ineligible to participate in the Plan; provided,
however, that the discontinuation of a key employee’s eligibility shall not
alter, impair or reduce the value of any deferred compensation 


 


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benefits earned by such key employee without his or her consent. In
addition, nonemployee directors shall be eligible to participate in the Plan.


 


ARTICLE 4.


DEFERRED
COMPENSATION BENEFITS


 


4.1.                              Deferred
Compensation Through Salary Deferrals. A key employee or
nonemployee director who is participating or will participate for a plan year
and who the Administrator determines is eligible or is expected to be eligible to
participate in the Plan may file, on a form prescribed by the
Administrator, prior to the later of (i) the first day of such plan year,
and (ii) the 31st day after the employee first becomes a participant, an
irrevocable election to defer the receipt of all or a portion of the salary
and/or bonus compensation payable to such key employee or all or a portion of
the directors’ fees payable to such nonemployee director during such plan year.
Such election shall apply only to compensation or fees earned for services
performed after the election is filed. Amounts so deferred shall be credited to
the key employee’s or nonemployee director’s Salary Deferral Account.


 


4.2                                 Deferred
Compensation Through Company Contributions. For any plan year in
which a key employee or nonemployee director is a participant of the Plan, the
Company may, in its sole discretion, credit additional amounts to the key
employee’s or the nonemployee director’s Company Contribution Account.


 


4.3                                 Value
of Deferred Compensation Accounts. The value of a participant’s
Deferred Compensation Account at any time shall be the sum of the Salary
Deferral Account and Company Contribution Account, adjusted as described in
this Section 4.3.


 


4.3.1                        Deemed
Investment in Company Stock. A participant’s Deferred
Compensation Account shall be deemed to be invested in shares of the Company’s
Common Stock. The number of shares of Common Stock deemed credited to the
participant’s Deferred Compensation Account shall be determined by dividing the
dollar amount of the participant’s salary deferrals and company contributions
by the per share fair market value of the Company’s Common Stock as of the
valuation date coinciding with the date such deferrals or contributions are
credited to the participant’s Deferred Compensation Account. As of each
valuation date, and at such other times as may be required by the Plan,
the value of the participant’s Deferred Compensation Account shall be adjusted
for increases or decreases in the per share fair market value of the Company’s Common
Stock. Nothing in this Section 4.3.1 shall require the Company to issue
any shares in connection with the Plan or with respect to a participant’s
Deferred Compensation Account.


 


4.4                                 Vesting.
All amounts credited to a participant’s Deferred Compensation Account under
this Plan shall be fully vested and nonforfeitable at all times.


 


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4.5                                 Payment.


 


4.5.1                        General. The value of a
participant’s Deferred Compensation Account shall be paid to the participant (or,
in the event of the participant’s death, to the participant’s beneficiary) in a
single lump-sum payment, in cash, on the earliest of the following events:  (i) within thirty (30) days following
the date of the participant’s separation from service, (ii) within thirty
(30) days following the date of the participant’s death, or (iii) within
thirty (30) days following a effective date of the change of control. Notwithstanding
anything in this Section 4.5.1 to the contrary, if the Company determines
that the participant is a “specified employee” as defined in Code Section 409A
as of the date of the participant’s separation from service, payment of the
participant’s Deferred Compensation Account shall not be made earlier than the
first day of the seventh month following the participant’s separation from
service or, if earlier, within thirty (30) days of the date of the participant’s
death.


 


4.5.2                        Unforeseeable Emergency. The Administrator may, in its sole
discretion, approve a distribution request if it determines that such
withdrawal is necessary to meet an unforeseeable emergency. The authorized
distribution may not exceed the amount reasonably required to satisfy the
unforeseeable emergency. Further, a distribution shall not be approved if the
unforeseeable emergency is or may be relieved through reimbursement or
compensation from insurance or otherwise; by liquidation of the participant’s
assets, to the extent such liquidation would not cause severe financial
hardship; or by cessation of deferrals under this Plan. Distribution for an
unforeseeable emergency shall be paid to the participant within thirty (30)
days following the Administrator’s approval of the participant’s request for
such distribution.


 


ARTICLE 5.


DEFINITIONS


 


5.1                                 Beneficiary.
“Beneficiary” means the person or persons, natural or otherwise, designated
by a participant to receive benefits in the event of the participant’s death. A
participant may revoke or change his or her beneficiary designation at any
time without the consent of the beneficiary. To be effective, such designation,
revocation or alteration shall be in writing, in a form approved by the
Administrator, and shall be filed with and accepted by the Administrator. The
most recently dated beneficiary designation form which is validly filed
with the Administrator by a participant shall revoke all previously dated
beneficiary designation forms filed by such participant. If a participant fails
to designate a beneficiary or if no beneficiary designated by the participant
survives the participant, any remaining payments shall be paid to the
participant’s estate. If a beneficiary dies before receiving all of the
payments to which such beneficiary is entitled, any remaining payments shall be
paid to such beneficiary’s estate.


 


5.2                                 Change of Control. “Change of control”
means:


 


5.2.1                        The purchase or other
acquisition by any one person, or more than one person acting as a group, of
stock of the Company that, together with stock held by such person or group,
constitutes more than fifty percent (50%) of the total combined value or total
combined voting power of all classes of stock issued by the Company; provided,
however, that if any one 


 


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person or more than one person acting as a group is considered to own
more than 50% of the total combined value or total combined voting power of
such stock, the acquisition of additional stock by the same person or persons
shall not be considered a change of control;


 


5.2.2                        A merger or consolidation to
which the Company is a party if the individuals and entities who were
shareholders of the Company immediately prior to the effective date of such
merger or consolidation have, immediately following the effective date of such
merger or consolidation, beneficial ownership (as defined in Rule 13d-3
under the Securities Exchange Act of 1934) of less than fifty percent (50%) of
the total combined voting power of all classes of securities issued by the
surviving entity for the election of directors of the surviving entity;


 


5.2.3                        Any one person, or more than
one person acting as a group, acquires 
or has acquired during the twelve (12) month period ending on the date
of the most recent acquisition by such person or persons, direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934) of stock of the Company constituting more thirty-five
percent (35%) or more of the total combined voting power of all classes of
stock issued by the Company;


 


5.2.4                        The purchase or other acquisition
by any one person, or more than one person acting as a group, of substantially
all of the total gross value of the assets of the Company during the twelve
(12) month period ending on the date of the most recent purchase or other
acquisition by such person or persons. For purposes of this Section 5.2.4,
“gross value” means the value of the assets of the Company or the value of the
assets being disposed of, as the case may be, determined without regard to
any liabilities associated with such assets; or


 


5.2.5                        A change
in the composition of the Board of the Company at any time during any
consecutive twelve (12) month period such that the “Continuity Directors” no
longer constitute at least a seventy percent (70%) majority of the Board. For
purposes of this event, “Continuity Directors” means those members of the Board
who were directors at the beginning of such consecutive twelve (12) month
period or were elected by, or on the nomination or recommendation of, at least
a two thirds (2/3) majority of the then-existing Board of Directors.


 


In all cases, the determination of whether a change of control has
occurred shall be made in accordance with Code Section 409A and the
regulations, notices and other guidance of general applicability issued
thereunder.


 


5.3                                 Effective
Date . The effective date of the Plan shall be October 24,
2007.


 


5.6                                 Plan Year.
“Plan year” means the twelve-month period beginning January 1st
and ending December 31st of each year.


 


5.7                                 Separation from Service. “Separation
from service” shall mean the participant’s termination of employment or
retirement with, or termination as a director of, the Company. A participant
shall not be deemed to have a separation from service while the participant is
on military leave, sick leave or other bona fide leave of absence if the period
of the leave does not exceed six (6)


 


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months or, if longer, the participant’s right to reemployment with the
Company provided either by statute or contract. If the period of leave exceeds
six (6) months and the participant’s right to reemployment is not provided
either by statute or contract, the participant shall be deemed to have a
separation from service on the first day immediately following such six (6) month
period. A termination of employment shall occur if, based on the facts and
circumstances, the participant and the Company reasonably anticipate that no
further services would be performed by the participant (whether as an employee
or an independent contractor) after the termination date or that the level of
the participant’s services would permanently decrease to no more than 20% of
the average level of bona fide services performed by the participant (whether
as an employee or an independent contractor) over the immediately preceding
36-month period (or the period of time that the participant performed services
for the Company, if less than 36 months). Such determination shall be made in
accordance with Code Section 409A and the regulations, notices and other
guidance of general applicability issued thereunder.


 


5.8                                 Trust.
“Trust” means a grantor trust, if any, established in connection with the
Plan, which conforms to the terms of the model trust agreement set forth in
Revenue Procedure 92-64, I.R.B. 1992-33.


 


5.9                                 Unforeseeable
Emergency. “Unforeseeable emergency” means the participant’s
severe financial hardship resulting from an illness or accident of the
participant or his or her spouse or dependents (as defined in Code Section 152,
without regard to Code Sections 152(b)(1), (b)(2) and (d)(1)(B)); 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, such as
from a natural disaster); or similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
participant, including, but not limited to, imminent foreclosure or eviction
from the participant’s primary residence, medical expenses, or funeral expenses
for a spouse or dependent (as defined in Code Section 152, without regard
to Code Sections 152(b)(1), (b)(2) and (d)(1)(B)). The determination of
whether the Participant is faced with an unforeseeable emergency shall be based
on the relevant facts and circumstances and shall be made in accordance with
Code Section 409A and the regulations, notices and other guidance of
general applicability issued thereunder.


 


5.10                           Valuation
Date. “Valuation Date” means each day of the plan year during
which the New York Stock Exchange is open for business.


 


ARTICLE 6.


MISCELLANEOUS
PROVISIONS


 


6.1                                 Nontransferability.
 No participant or the estate or
heirs at law of any participant shall have any right to assign, encumber or
otherwise anticipate the right to receive payment hereunder, and the value of
the participant’s Deferred Compensation Account under the Plan shall not be
subject to garnishment, attachment or any other legal process by the creditors
of any participant or the estate or heirs at law of any participant hereunder.


 


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6.2                                 Liability
of Company. The Company shall have no liability in connection
with the Plan except to pay any nonforfeitable benefits in accordance with the
terms of the Plan. The Company has made no representations to any participant
with respect to the tax implications of any transactions contemplated by the
Plan. Each participant shall obtain his or her own counsel to advise the
participant with respect to the tax effect of the Plan.


 


6.3                                 Binding
Effect. The Plan shall be binding upon the participants and the
Company and their heirs, executors and assigns. The Company shall not be a
party to any merger, consolidation or reorganization unless and until its
obligations under the Plan shall be expressly assumed by its successor or
successors.


 


6.4                                 Payment
in Case of Incompetency. If, in the judgment of the
Administrator based upon facts and information readily available to it, any
person entitled to receive a payment hereunder is incapable for any reason of
personally receiving and giving a valid receipt for the payment of a benefit,
the Administrator may cause such payment or any part thereof to be
made to the duly appointed guardian or legal representative of such person, or
to any person or institution contributing to or providing for the care and
maintenance of such person, provided that no prior claim for said payment has
been made by a duly appointed guardian or legal representative of such person. The
Administrator shall not be required to see to the proper application of any
such payment made in accordance with the provisions hereof, and any such
payment shall constitute payment for the account of such person and a full
discharge of any liability or obligation of the Company.


 


6.5                                 Withholding.
The Company shall have the right to deduct from all amounts payable
hereunder any state or federal taxes required by law to be withheld with
respect to such awards. If the Company is unable to withhold such federal and
state taxes, for whatever reason, the participant hereby agrees to pay to the
Company an amount equal to the amount the Company would otherwise be required
to withhold under federal or state law.


 


6.6                                 Right to
Terminate Employment. No employee or other person shall have any
claim or right to receive awards under or otherwise participate in the Plan. Neither
the Plan nor any action taken hereunder shall be construed as giving any
employee any right to be retained in the employment of the Company, interfere
with the right of the Company to discharge any employee at any time, give the
Company the right to require an employee to remain in its employ, or interfere
with the employee’s right to terminate employment at any time.


 


6.7                                 Plan
Shall be Unfunded. The Plan shall at all times be entirely
unfunded, no action shall be taken at any time which would have the effect of
segregating assets of the Company for payment of any benefit hereunder, and no
participant or other person shall have any interest in any particular assets of
the Company by reason of the right to receive a benefit hereunder. Any
participant or other person shall have only the rights of a general unsecured
creditor of the Company with respect to any rights hereunder. The Company may,
in its discretion, establish a Trust to provide for payment of participants’
deferred compensation benefits.


 


6.8                                 Compliance
with Applicable Laws. The Company and participants intend that
the Plan comply with the applicable provisions of the Internal Revenue Code of
1986, as amended from 


 


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time to time, and the regulations thereunder, with the applicable
provisions of ERISA, as amended, and the regulations thereunder, and with any
provisions of the Securities Exchange Act of 1934, as amended, that may be
applicable. If, at a later date, these provisions are construed in such a way
as to make the Plan null and void, the Plan shall be given effect in a manner
that shall best carry this intention.


 


6.9                                 Notices.
Any notice, election or form to be delivered pursuant to the Plan
shall be given in writing and delivered, personally or by first-class mail,
postage prepaid, to the Company, the participant or any other person, as the
case may be, at their last known address.


 


6.10                           Headings.
Headings or titles at the beginning of articles and sections are for
convenience of reference, shall not be considered a part of the Plan, and
shall not influence its construction.


 


6.11                           Amendment
and Termination. The Administrator, and only the Administrator, may alter,
amend or terminate the Plan at any time; provided, however, that no amendment
to the Plan may alter, impair or reduce the value of a participant’s
deferred compensation benefits to the extent vested prior to the effective date
of such amendment, without the written consent of such participant. Notwithstanding
the foregoing, the Company expressly reserves the right to amend the Plan to
the extent necessary or desirable to comply with the requirements of Code Section 409A
and the regulations, notices and other guidance of general applicability issued
thereunder without the consent of any participant.


 


6.12                           Governing
Law. The provisions of the Plan shall be construed and enforced
according to the laws of the State of Wisconsin to the extent that such laws
are not preempted by any applicable federal law.


 


6.13                           Claims
Procedure. The Company has established a procedure for resolving
any disputes or claims arising under the Plan. Unless otherwise established by
the Company, the following is the claims procedure under the Plan:


 


6.13.1                  Filing and Denial of Claim.
Participant or his beneficiary (hereinafter referred to in this section as
the “Claimant”) may file a written claim with Company requesting a benefit
unfder the agreement or objecting to the determination of the benefits payable
hereunder at any time prior to the expiration of 30 days subsequent to the date
payment of benefits is to commence, or would commence if any benefits were
payable. If the Company denies, in whole or in part, any claim so filed, notice
of such denial shall be furnished in writing to the Claimant within 90 days
after the Company’s receipt of the claim unless the Company determines that
special circumstances require an extension of time for processing the claim, in
which case the Company shall provide written notice of the extension to the
Claimant prior to the expiration of the initial 90-day period. Such notice of
extension shall describe the special circumstances requiring an extension of
time and the date by which the Company expects to render the benefit
determination, which date shall not be later than 90 days after the end of the
initial 90-day period. The written denial shall state, in a manner calculated
to be understood by the Claimant:


 


(a)                                  The specific reasons
for denial;


 


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(b)                                 Specific references to
applicable agreement provisions upon which the denial is based;


 


(c)                                  A description of
additional material or information necessary, if any, for the Claimant to
perfect the claim and an explanation of why such material or information is
necessary; and


 


(d)                                 A description of the
agreement’s review procedures and the time limits applicable to such
procedures, including a statement of the Claimant’s right to bring a civil
action under ERISA Section 502 following denial on review.


 


6.13.2                  Review of Denial.
In the event a claim for benefits is denied, in whole or in part, pursuant to
the provisions under Section 6.13.1 above, the Claimant or his or her
authorized representative may request in writing, within 60 days of the
Claimant’s receipt of the Company’s denial, a review of such denial. The
Claimant may submit written comments, documents, records, and other
information relating to his or her claim for benefits. The Claimant shall be
provided, upon request and free of charge, reasonable access to and copies of
all documents, records, and other information relevant to the Claimant’s claim
for benefits. Such review shall consider all comments, documents, records, and
other information submitted by the Claimant relating to the claim, regardless
of what was reviewed and considered in the initial benefit determination. Except
as otherwise provided in 29 C.F.R. § 2560.503-1(i)(1)(ii) (applicable
when a committee or board of trustees is delegated authority to consider the
claim and has regularly scheduled quarterly or more frequent meetings), the
Company must provide to the Claimant, within 60 days after receipt of the
Claimant’s request for review, a written decision of its disposition of the
claim on review; provided, however, that if the Company determines that special
circumstances (such as the need to hold a hearing) require an extension of time
for processing the claim on review, the Company shall provide written notice of
the extension to the Claimant prior to the expiration of the initial 60-day
period. Such notice of extension shall disclose the special circumstances and
the date upon which the Company expects to render the determination, which date
shall not be later than 60 days from the initial 60-day period. The Company may hold
a hearing for the review of any claim if the Claimant so requests in the
Claimant’s written request for review and if the Company , in its sole
discretion, determines such a hearing is necessary due to the complexity of
issues involved or the nature of the claim. The Company shall provide the
Claimant with written notification of the agreement’s benefit determination on
review. If the determination is adverse to the Claimant, the notification shall
set forth, in a manner calculated to be understood by the Claimant:


 


(a)                                  The specific reasons
for denial on review;


 


(b)                                 Specific references to
applicable agreement provisions upon which the denial or review is based;


 


(c)                                  A statement that the
Claimant is entitled to receive, upon request and free of charge, reasonable access
to and copies of all documents, records, and other information relevant to the
Claimant’s claim for benefits; and


 


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(d)                                 A statement of the
Claimant’s right to bring an action under ERISA Section 502(a).


 


6.13.3                  Notice Periods and Legal
Action. The Company shall inform the Claimant in writing,
in a timely fashion, of any time limits with respect to filing claims,
requests, denials, notices or decisions hereunder. If the Claimant fails to
give proper notice or otherwise comply with the rules and procedures set
forth under this Section 6.13, the Claimant shall be barred from any
further legal action, including arbitration proceedings, to contest any
determination made under the agreement with respect to benefits.


 


6.13.4                  Interpretation.
The provisions under Section 6.13 shall be interpreted in a manner that is
consistent with 29 C.F.R. § 2560.503-1, as amended from time to time.


 


Tower Tech Holdings, Inc. has caused
this Plan to be executed by its duly authorized officer as of this 24th
day of October, 2007.


 


 


	
   

  	
  TOWER TECH HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Steven A. Huntington

  	
   

  
	
   

  	
  Steven A. Huntington

  
	
   

  	
  Chief Financial Officer

  



 


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