exv10w1






Exhibit 10.1




THE TIMKEN COMPANY




1996 DEFERRED COMPENSATION PLAN



(AS AMENDED AND RESTATED EFFECTIVE DECEMBER 31, 2008)


The Timken Company (the “Company”) hereby amends and restates, effective December 31, 2008, its
1996 Deferred Compensation Plan (the “Plan”), which was originally established on November 3, 1995,
amended and restated effective as of April 20, 1999, and further amended by Amendment No. 1 and No.
2. The Plan provides key executives with the opportunity to defer base salary, incentive
compensation payments payable in cash or Common Shares, and certain Company contributions, in
accordance with the provisions set forth below.




ARTICLE I




DEFINITIONS


For the purposes of the Plan, the following words and phrases shall have the meanings indicated in
this Article I. Certain other words and phrases are defined throughout the Plan and shall have the
meaning so ascribed to them.




          1. “Account” shall mean a bookkeeping account maintained on behalf of each
Participant pursuant to Section 4 of Article II that is comprised of the Base Salary Subaccount
that is credited with Base Salary deferred by a Participant, the Incentive Compensation Subaccount
that is credited with cash Incentive Compensation deferred by a Participant, a Vested Excess Core
Contribution Subaccount that is credited with Vested Excess Core Contributions deferred by a
Participant, and an Unvested Excess Core Contributions Subaccount that is credited with Unvested
Excess Core Contributions deferred (or deemed deferred) by a Participant. A separate subaccount
shall be maintained for Incentive Compensation payable in the form of Common Shares. A
Participant’s Account(s) shall be further divided into the following subaccounts: (a) a “Pre-2005
Subaccount” for amounts deferred by a Participant as of December 31, 2004 (and earnings and losses
thereon) as determined under Treasury Regulation Section 1.409A-6(a) or any successor provision,
and (b) a “Post-2004 Subaccount” for amounts deferred for purposes of Section 409A of the Code by a
Participant after December 31, 2004 (and earnings and losses thereon). Amounts in the Pre-2005
Subaccounts are intended to qualify for “grandfathered” status pursuant to Treasury Regulation
Section 1.409A-6(a) and therefore they shall be subject to the terms and conditions





 









 







specified in the Plan as in effect prior to January 1, 2005. A Participant’s Account(s) shall
be credited with earnings as described in Section 4 of Article II of the Plan.




          2. “Base Salary” shall mean the annual fixed or base compensation, payable monthly or
otherwise to a Participant.




          3. “Beneficiary” or “Beneficiaries” shall mean the person or persons designated by a
Participant in accordance with the Plan to receive payment of the remaining balance of the
Participant’s Account(s) in the event of the death of the Participant prior to receipt of the
entire amount credited to the Participant’s Account(s).




          4. “Board” shall mean the Board of Directors of the Company.




          5. “Code” shall mean the Internal Revenue Code of 1986, as
amended.




          6. “Change in Control” shall mean that:





     (i) All or substantially all of the assets of the Company are sold or
transferred to another corporation or entity, or the Company is merged, consolidated or
reorganized into or with another corporation or entity, with the result that upon
conclusion of the transaction less than 51 percent of the outstanding securities entitled
to vote generally in the election of directors or other capital interests of the acquiring
corporation or entity is owned, directly or indirectly, by the shareholders of the Company
generally prior to the transaction; or




     (ii) There is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report thereto), as promulgated pursuant to the Securities
Exchange Act of 1934 (the “Exchange Act”), disclosing that any person (as the term “person”
is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the
beneficial owner (as the term “beneficial owner” is defined under Rule 13d-3 or any
successor rule or regulation thereto under the Exchange Act) of securities representing 30
percent or more of the combined voting power of the then-outstanding voting securities of
the Company; or




     (iii) The Company shall file a report or proxy statement with the Securities
and Exchange Commission (the “SEC”) pursuant to the Exchange Act disclosing in response to
Item 1 of Form 8-K thereunder or Item 5(f) of Schedule 14A thereunder (or any successor
schedule, form, report or item thereto) that a change in control of the Company has or may
have occurred, or will or may occur in the future, pursuant to any then-existing contract
or transaction; or



 









 






     (iv) The individuals who constituted the Board at the beginning of any period
of two consecutive calendar years cease for any reason to constitute at least a majority
thereof unless the nomination for election by the Company’s shareholders of each new member
of the Board was approved by a vote of at least two-thirds of the members of the Board
still in office who were members of the Board at the beginning of any such period.



          7. “Committee” shall mean the Compensation Committee of the Board or such other
Committee as may be authorized by the Board to administer the Plan.




          8. “Common Shares” shall mean shares of common stock without par value of the Company
or any security into which such Common Shares may be changed by reason of any transaction or event
of the type referred to in Section 8 of Article II of the Plan.




          9. “Company” shall mean The Timken Company and its successors, including, without
limitation, the surviving corporation resulting from any merger or consolidation of The Timken
Company with any other corporation or corporations.




          10. “Deferral Election” shall mean the Election Agreement (or portion thereof)
completed by a Participant and filed with the Company that indicates the percentage or dollar
amount of his or her Base Salary, Incentive Compensation and/or Excess Core Contributions that is
or will be deferred under the Plan for the Deferral Period.




          11. “Deferral Period” shall mean the Year that commences after each Election Filing
Date, provided that a Deferral Period with respect to Performance Units granted
under the Long-Term Incentive Plans may be a period of more than one Year.




          12. “Election Agreement” shall mean an agreement in the form that the Company may
designate from time to time that is consistent with the terms of the Plan.




          13. “Election Filing Date” shall mean December 31 of the Year immediately prior to
the first day of the Year (or other Deferral Period described in Section 11 of this Article) for
which Base Salary, Incentive Compensation and/or Excess Core Contributions would otherwise be
earned.




          14. “Eligible Associate” shall mean an associate of the Company (or a Subsidiary that
has adopted the Plan) who is a participant in the Management Performance Plan of the Company. In
the case of associates who are residents of the United States, an Eligible Associate shall include
only those associates whose position with the Company has a mid-point compensation of at least
$100,000 and who is





 









 







a participant in the Management Performance Plan of the Company. Unless otherwise determined
by the Committee, an Eligible Associate shall continue as such until Termination of Employment.




          15. “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.




          16. “Excess Core Contributions” shall mean “Excess Company Contributions” (other than
the Company contributions that are made with respect to a Participant’s “Excess Deferrals”) as
defined in The Timken Company Post-Tax Savings Plan.




          17. “Incentive Compensation” shall mean (i) cash incentive compensation earned as an
associate pursuant to an incentive compensation plan now in effect or hereafter established by the
Company, including, without limitation, the Management Performance Plan, the Long-Term Incentive
Plans, and “Excess Deferrals” and “Excess Company Contributions” (other than Excess Core
Contributions) as defined in The Timken Company Post-Tax Savings Plan and (ii) incentive
compensation payable in the form of Common Shares pursuant to the Long-Term Incentive Plans (other
than restricted shares or options) or any similar plan approved by the Committee for purposes of
the Plan.




          18. “Incentive Filing Date” shall mean the date six months prior to the end of a
performance period with respect to which certain Incentive Compensation is earned.




          19. “Long-Term Incentive Plans” shall mean The Timken Company Long-Term Incentive
Plan or other similar long-term incentive plans, as amended from time to time.




          20. “Participant” shall mean any Eligible Associate who has at any time elected to
defer the receipt of Base Salary, Incentive Compensation, or Excess Core Contributions in
accordance with the Plan.




          21. “Payment Election” shall mean the Election Agreement (or portion thereof)
completed by a Participant and filed with the Company that indicates the time of the commencement
of a payment and the form of a payment of that portion of the Participant’s Base Salary, Incentive
Compensation and/or Excess Core Contributions that is deferred pursuant to a Deferral Election
under the Plan.




          22. “Plan” shall mean this deferred compensation plan, which shall be known as the
1996 Deferred Compensation Plan for The Timken Company.




          23. “Specified Employee” shall mean a “specified employee” with respect to the
Company (or a controlled group member) determined pursuant to procedures adopted by the Company in




 









 




compliance with Section 409A of the Code and Treasury Regulation Section 1.409A-1(i) or any
successor provision.




          24. “Subsidiary” shall mean any corporation, joint venture, partnership,
unincorporated association or other entity in which the Company has a direct or indirect ownership
or other equity interest and directly or indirectly owns or controls more than 50 percent of the
total combined voting or other decision-making power.




          25. “Termination of Employment” means a separation from service within the meaning of
Treasury Regulation Section 1.409A-1(h)(1).




          26. “Unforeseeable Emergency” means an event that results in severe financial
hardship to a Participant resulting from (a) an illness or accident of the Participant or his or
her spouse, dependent (as defined in Section 152(a) of the Code), or Beneficiary, (b) loss of the
Participant’s property due to casualty, or (c) other similar extraordinary and unforeseeable
circumstances arising as of result of events beyond the control of the Participant.




          27. “Unvested Excess Core Contribution” shall mean an Excess Core Contribution made
with respect to an Eligible Associate who has less than three Years of Service as of the date such
contribution is made.




          28. “Vested Excess Core Contribution” shall mean an Excess Core Contribution made
with respect to an Eligible Associate who has at least three Years of Service as of the date such
contribution is made.




          29. “Year” shall mean a calendar year.




          30. “Years of Service” shall mean “Years of Service” as defined in and determined
under The Timken Company Savings and Investment Plan.




ARTICLE II




ELECTION TO DEFER



          1. Eligibility. An Eligible Associate may make an annual Deferral Election
to defer receipt of all or a specified part of his or her Base Salary, Incentive Compensation, or
Vested or Unvested Excess Core Contributions for any Deferral Period in accordance with Section 2
of this Article. Subject to Section 3(iv) of this Article, an Eligible Associate who makes a
Deferral Election must also make a Payment Election with respect to the amount deferred in
accordance with Section 3 of this Article. An Eligible





 









 







Associate’s entitlement to defer shall cease on the last day of the Deferral Period in which
he or she ceases to be an Eligible Associate.




          2. Deferral Elections. All Deferral Elections, once effective, shall be
irrevocable, shall be made on an Election Agreement filed with the Director – Total Rewards of the
Company (or other Company administrative representative as may be designated by the Committee), and
shall comply with the following requirements:





     (i) The Deferral Election on the Election Agreement shall specify the
percentage or the dollar amount of a Participant’s Base Salary, Incentive Compensation
and/or Excess Core Contributions that is to be deferred.




     (ii) The Deferral Election shall be made by, and shall be effective as of,
the applicable Election Filing Date; provided, however, that to the extent
permitted by Section 409A of the Code, the Company may permit Participants to make a
Deferral Election with respect to Incentive Compensation that constitutes
“performance-based compensation” (within the meaning of Section 409A(a)(4)(B)(iii) of the
Code) at a time later than the Election Filing Date but no later than the Incentive Filing
Date, and in such event, the Deferral Election shall be effective as of such Incentive
Filing Date. Notwithstanding the foregoing, an employee who first becomes an Eligible
Associate during the course of a Year, rather than as of the applicable Election Filing
Date, shall make such Deferral Election with respect to Base Salary, Incentive Compensation
and/or Excess Core Contributions within thirty days following the date the employee first
becomes eligible to participate in the Plan. Such Deferral Election shall be effective on
the date made and, unless the proviso in the first sentence of this Section 2(ii) applies,
shall be effective with regard to Base Salary, Incentive Compensation and/or Excess Core
Contributions (whichever is elected for deferral by the Participant) earned during such
Year following the filing of the Election Agreement with the Company, as determined
pursuant to the pro-ration method permitted under Section 409A of the Code. For purposes
of the preceding sentence, where an individual has ceased being eligible to participate in
the Plan (other than the accrual of earnings), regardless of whether all amounts deferred
under the Plan have been paid, and subsequently becomes eligible to participate in the Plan
again, the individual shall be treated as being initially eligible to participate in the
Plan if the individual had not been eligible to participate in the Plan (other than the
accrual of earnings) at any time during the twenty-four month period ending on the date the
individual again becomes eligible to participate in the Plan.



 









 






     (iii) Notwithstanding the foregoing provisions of Section 2 of this Article,
an Eligible Associate with less than three Years of Service as of the date of an Excess
Core Contribution shall elect, or (in the absence of a properly filed Election Agreement
shall be deemed to have elected), to defer all of his or her Unvested Excess Core
Contribution for a Year (and any Election Agreement to the contrary shall be disregarded
and treated as not properly filed hereunder).




     (iv) Subject to Section 3(iv) of this Article, in order to revoke or modify
a Deferral Election with respect to Base Salary, Incentive Compensation and/or Excess Core
Contributions for any particular Year, a revocation or modification must be delivered to
the Director – Total Rewards of the Company (or other Company administrative representative
as was previously designated by the Committee) prior to the Election Filing Date or the
Incentive Filing Date (as applicable).



          3. Payment Elections. Subject to Sections 3(iv), 5, 6, and 7 of this
Article, all Payment Elections are irrevocable, shall be made on an Election Agreement filed with
the Director – Total Rewards of the Company (or other Company administrative representative as may
be designated by the Committee), and shall comply with the following requirements:





     (i) Each Participant shall make a separate Payment Election with respect to
his or her Base Salary, Incentive Compensation, and Excess Core Contributions that the
Participant defers for the Deferral Period pursuant to the applicable Deferral Election.




     (ii) Each Payment Election shall contain the Participant’s elections
regarding the time at which the payment of amounts deferred pursuant to the specific
Deferral Election shall commence.




               (1) A Participant may elect to commence payment upon either (A) the
date the Participant incurs a Termination of Employment for any reason (other than
by reason of death), including, without limitation, by reason of retirement or (B)
the date otherwise specified by the Participant in the Election Agreement,
including a date determined by reference to the date the Participant incurs a
Termination of Employment for any reason (other than by reason of death),
including, without limitation, by reason of retirement; provided,
however, that with respect to the deferral of any Unvested Excess Core
Contributions, payment shall not commence any sooner than the date on which the
Eligible Associate has achieved three Years of Service.



 









 






               (2) Subject to Section 3(vi) of this Article, payments made in
accordance with the Participant’s election under Section 3(ii)(1)(A) of this
Article shall be paid or commence to be paid within 90 days following the
Termination of Employment and payments made in accordance with the Participant’s
election under Section 3(ii)(1)(B) of this Article shall be paid or commence to be
paid within 90 days following the date specified in the Election Agreement,
provided that, in either case, the Participant shall not have the
right to designate the year of payment.




     (iii) Each Payment Election shall contain the Participant’s elections
regarding the form of payment of the amount of his or her Base Salary, Incentive
Compensation, and Excess Core Contributions that the Participant deferred for the Deferral
Period pursuant to his or her Deferral Election.




               (1) A Participant may elect to receive payment in one of the
following forms: (A) a single, lump sum payment; (B) in a number of approximately
equal quarterly installments, not to exceed 40, as designated by the Participant in
his or her Election Agreement; or (C) subject to the approval of the Director -
Total Rewards of the Company (or other Company administrative representative as may
be designated by the Committee) at the time the Participant makes his or her
Payment Election, pursuant to an alternate payment schedule designated by the
Participant in his or her Election Agreement.




               (2) In the event that a Participant’s deferral of Base Salary,
Incentive Compensation, and Excess Core Contributions pursuant to his or her
Payment Election is payable in quarterly installments, all of the quarterly
installments during the installment period shall be approximately equal in amount.
The amount of the unpaid installment payments remaining in the Participant’s
Account(s) that is (a) attributable to the deferral of cash compensation shall
continue to bear interest as provided in Section 4(i) of this Article and (b)
attributable to the deferral of Incentive Compensation payable in the form of
Common Shares shall continue to be credited with dividends, distributions and
interest thereon as provided in Section 4(iv) of this Article.




     (iv) If in the case of a Vested Excess Core Contribution an Eligible
Associate fails to timely file an Election Agreement, the Company, within 2 1/2 months after
the close of the Year during which the Vested Excess Core Contribution was earned, shall
pay to the Eligible Associate



 









 







in a lump sum an amount equal to the Vested Excess Core Contribution without interest.
If in the case of an Unvested Core Contribution an Eligible Associate fails to file
properly an Election Agreement, the Eligible Associate nevertheless shall be deemed as if
the Eligible Associate had timely filed an Election Agreement electing a lump sum payment
to be made within 2 1/2 months after the close of the Year during which the Eligible
Associate achieved three Years of Service, or if earlier, the close of the Year during
which the Eligible Associate incurs a Termination of Employment due to death, Disability
(as defined in the Savings and Investment Pension Plan) or Retirement (as defined in the
Savings and Investment Pension Plan).




     (v) Subject to Section 3(iv) of this Article, if the Payment Elections are
not made by the applicable Election Filing Date or Incentive Filing Date, as the case may
be, or are insufficient to be deemed effective as of such date, then a Participant’s
Deferral Election shall be null and void.




     (vi) Notwithstanding the foregoing provisions of Section 3 of this Article,
if the Participant is a Specified Employee, then any payment on account of Termination of
Employment that was scheduled to commence during the six-month period immediately following
the Participant’s Termination of Employment shall commence on the first day of the seventh
month after such Termination of Employment (or, if earlier, the date of death). Any
payments on account of Termination of Employment that are scheduled to be paid more than
six months after such Participant’s Termination of Employment shall not be delayed and
shall be paid in accordance with provisions of Section 3(iii) of this Article.



 









 





          4. Accounts.





     (i) Cash compensation that a Participant elects to defer shall be treated as
if it were set aside in an Account on the date the Base Salary or Incentive Compensation
would otherwise have been paid to the Participant. The Base Salary and Incentive
Compensation Subaccounts will be credited with interest computed quarterly (based on
calendar quarters) on the lowest balance in such Subaccounts during each quarter at such
rate and in such manner as determined from time to time by the Committee. Unless otherwise
determined by the Committee, interest to be credited hereunder shall be credited at the
prime rate in effect according to the Wall Street Journal on the last day of each calendar
quarter plus one percent. Interest for a calendar quarter shall be credited to the Base
Salary and Incentive Compensation Subaccounts as of the first day of the following quarter.




     (ii) An Excess Core Contribution that a Participant defers under the Plan
shall be treated as if it was credited to the Participant’s Account on the date the Excess
Core Contribution is made. An Excess Core Contributions Subaccount shall be credited with
interest computed quarterly (based on calendar quarters) on the lowest balance in the
Excess Core Contributions Subaccount during each quarter at such rate and in such manner as
determined from time to time by the Committee. Unless otherwise determined by the
Committee, interest to be credited hereunder shall be credited at the prime rate in effect
according to the Wall Street Journal on the last day of each calendar quarter plus one
percent. Interest for a calendar quarter shall be credited to the Excess Core
Contributions Subaccount as of the first day of the following quarter.




     (iii) If as of the date of a Participant’s Termination of Employment the
Participant has not achieved three Years of Service, the Participant shall forfeit his or
her Unvested Excess Core Contributions Subaccount, including any interest credited to such
Subaccount. Notwithstanding the preceding sentence, a Participant shall not forfeit his or
her Unvested Excess Core Contributions Subaccount if the Participant’s Termination of
Employment is due to death, Disability (as defined in the Savings and Investment Pension
Plan) or Retirement (as defined in the Savings and Investment Pension Plan).




     (iv) Incentive Compensation payable in the form of Common shares that a
Participant elects to defer shall be reflected in a separate Account, which shall be
credited with the number of Common Shares that would otherwise have been issued or
transferred and delivered to the Participant. Such Account, following any applicable
vesting period, shall be credited from time



 









 







to time with amounts equal to dividends or other distributions paid on the number of
Common Shares reflected in such Account, and such Account shall be credited with interest
on cash amounts credited to such Account from time to time in the manner provided in
Subsection (i) above.




     (v) Except as described in Section 4(iii) of this Article, a Participant’s
Account shall be nonforfeitable.



          5. Death of a Participant. In the event of the death of a Participant, the
amount of the Participant’s Account(s) shall be paid to the Beneficiary or Beneficiaries designated
in a writing on a form that the Company may designate from time to time (the “Beneficiary
Designation”), in a lump sum within 90 days of the day of death; provided that the
Beneficiary or Beneficiaries shall not have the right to designate the year of payment. A
Participant’s Beneficiary Designation may be changed at any time prior to his or her death by the
execution and delivery of a new Beneficiary Designation. The Beneficiary Designation on file with
the Company that bears the latest date at the time of the Participant’s death shall govern. In the
absence of a Beneficiary Designation or the failure of any Beneficiary to survive the Participant,
the amount of the Participant’s Account(s) shall be paid to the Participant’s estate in a lump sum
within 90 days of the day of death; provided that the representative of the estate
shall not have the right to designate the year of payment. In the event of the death of the
Beneficiary or Beneficiaries after the death of a Participant, the remaining amount of the
Account(s) shall be paid in a lump sum to the estate of the last Beneficiary to receive payments
within 90 days of the day of death; provided that the representative of the estate
shall not have the right to designate the year of payment.




          6. Small Payments. Notwithstanding the foregoing provisions of this Article
II, if upon the applicable distribution date the Participant’s total balance in his or her
Account(s), in addition to the balances and accounts under and any other agreements, methods,
programs, plans or other arrangements with respect to which deferrals of compensation are treated
as having been deferred under a single nonqualified deferred compensation plan with the account
balances under the Plan under Treasury Regulation Section 1.409A-1(c)(2) (the “Aggregate Account
Balance”), is less than $5,000, then the amount of the Participant’s Aggregate Account Balance may,
at the discretion of the Company, be paid in a lump sum.




          7. Accelerations. Notwithstanding the foregoing provisions of this Article
II:





     (i) If a Change in Control occurs, the total amount of each Participant’s
Base Salary Subaccount, Incentive Compensation Subaccount, and Vested Excess Core
Contribution



 









 







Subaccount shall immediately be paid to the Participant in the form of a single, lump
sum payment, provided that if such Change in Control does not constitute a
“change in the ownership or effective control” or a “change in the ownership of a
substantial portion of the assets” of the Company within the meaning of Section
409A(a)(2)(A)(v) of the Code and Treasury Regulation Section 1.409A-3(i)(5), or any
successor provision, then payment shall be made, to the extent necessary to comply with the
provisions of Section 409A of the Code, to the Participant on the date (or dates) the
Participant would otherwise be entitled to a distribution (or distributions) in accordance
with the provisions of the Plan.




     (ii) In the event of an Unforeseeable Emergency and at the request of a
Participant or Beneficiary, the Committee may in its sole discretion accelerate the payment
to the Participant or Beneficiary of all or a part of his or her Account(s). Payments of
amounts as a result of an Unforeseeable Emergency may not exceed the amount necessary to
satisfy such Unforeseeable Emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution(s), after taking into account the extent to
which the hardship is or may be relieved through reimbursement or compensation by insurance
or otherwise by liquidation of the Participant’s assets (to the extent the liquidation of
such assets would not itself cause severe financial hardship).



          8. Adjustments. The Committee may make or provide for such adjustments in
the numbers of Common Shares credited to Participants’ Account, and in the kind of shares so
credited, as the Committee in its sole discretion, exercised in good faith, may determine is
equitably required to prevent dilution or enlargement of the rights of Participants that otherwise
would result from (i) any stock dividend, stock split, combination of shares, recapitalization or
other change in the capital structure of the Company, or (ii) any merger, consolidation, spin-off,
split-off, spin-out, split-up, reorganization, partial or complete liquidation or other
distribution of assets, issuance of rights or warrants to purchase securities, or (iii) any other
corporate transaction or event having an effect similar to any of the foregoing. Moreover, in the
event of any such transaction or event, the Committee, in its discretion, may provide in
substitution for any or all Common Shares deliverable under the Plan such alternative consideration
as it, in good faith, may determine to be equitable in the circumstances.




          9. Fractional Shares. The Company shall not be required to issue any
fractional Common Shares pursuant to the Plan. The Committee may provide for the elimination of
fractions or for the settlement of fractions in cash.





 









 








ARTICLE III




ADMINISTRATION



          1. Administration. The Company, through the Committee, shall be responsible
for the general administration of the Plan and for carrying out the provisions hereof. The
Committee shall have all such powers as may be necessary to carry out the provisions of the Plan,
including the power to (i) determine all questions relating to eligibility for participation in the
Plan and the amount in the Account or Accounts of any Participant and all questions pertaining to
claims for benefits and procedures for claim review, (ii) resolve all other questions arising under
the Plan, including any questions or construction, and (iii) take such further action as the
Company shall deem advisable in the administration of the Plan. The actions taken and the
decisions made by the Committee hereunder shall be final and binding upon all interested parties.
It is intended that all Participant elections hereunder shall comply with Section 409A of the Code.
The Committee is authorized to adopt rules or regulations deemed necessary or appropriate in
connection therewith to anticipate and/or comply with the requirements thereof (including any
transition rules thereunder).




          2. Claims Procedures. Whenever there is denied, whether in whole or in part,
a claim for benefits under the Plan filed by any person (herein referred to as the “Claimant”), the
Committee shall transmit a written notice of such decision to the Claimant within 90 days of
receiving the claim from the Claimant, which notice shall be written in a manner calculated to be
understood by the Claimant and shall contain a statement of the specific reasons for the denial of
the claim, a reference to the relevant Plan provisions, a description and explanation of additional
information needed, and a statement advising the Claimant that, within 60 days of the date on which
he or she receives such notice, he or she may obtain review of such decision in accordance with the
procedures hereinafter set forth. Within such 60-day period, the Claimant or the Claimant’s
authorized representative may request that the claim denial be reviewed by filing with the
Committee a written request therefor, which request shall contain the following information:





     (i) the date on which the Claimant’s request was filed with the Committee;
provided, however, that the date on which the Claimant’s request for review
was in fact filed with the Committee shall control in the event that the date of the actual
filing is later than the date stated by the Claimant pursuant to this paragraph;




     (ii) the specific portions of the denial of the claim which the Claimant
requests the Committee to review;



 









 






     (iii) a statement by the Claimant setting forth the basis upon which the
Claimant believes the Committee should reverse the previous denial of the Claimant’s claim
for benefits and accept the claim as made; and




     (iv) any written material (offered as exhibits) which the Claimant desires
the Committee to examine in its consideration of the Claimant’s position as stated pursuant
to clause (iii) above.


Within 60 days of the date determined pursuant to clause (i) above, the Committee shall conduct a
full and fair review of the decision denying the Claimant’s claim for benefits. Within 60 days of
the date of such hearing, the Committee shall render its written decision on review, written in a
manner calculated to be understood by the Claimant and including the reasons and Plan provisions
upon which its decision was based, a statement that the Claimant is entitled to receive, upon
request and free of charge, reasonable access to and copies of all documents and other information
relevant to the claim, and a statement describing the Claimant’s right to bring an action under
Section 502(a) of ERISA.




ARTICLE IV




AMENDMENT AND TERMINATION


The Company reserves the right to amend or terminate the Plan at any time by action of the Board;
provided, however, that no such action shall adversely affect any Participant or
Beneficiary who has an Account, or result in the acceleration of payment of the amount of any
Account (except as otherwise permitted under the Plan), without the consent of the Participant or
Beneficiary; (provided, however, that the consent requirement of Participants or
Beneficiaries to certain actions shall not apply to any amendment or termination made by the
Company pursuant to Section 8(iii) of Article V). Notwithstanding the preceding sentence, the
Committee, in its sole discretion, may terminate the Plan to the extent and in circumstances
described in Treasury Regulation Section 1.409A-3(j)(4)(ix), or any successor provision.




ARTICLE V




MISCELLANEOUS



          1. Non-alienation of Deferred Compensation. Except as permitted by the Plan
and subject to Section 8(ii) of this Article V, no right or interest under the Plan of any
Participant or Beneficiary shall, without the written consent of the Company, be (i) assignable or
transferable in any manner, (ii) subject to alienation, anticipation, sale, pledge, encumbrance,
attachment, garnishment or other legal process or (iii) in any manner liable for or subject to the
debts or liabilities of the Participant or Beneficiary.





 









 








          2. Participant by Associates of Subsidiaries. An Eligible Associate who is
employed by a Subsidiary and elects to participate in the Plan shall participate on the same basis
as an associate of the Company. The Account or Accounts of a Participant employed by a Subsidiary
shall be paid in accordance with the Plan solely by such Subsidiary to the extent attributable to
Base Salary or Incentive Compensation that would have been paid by such Subsidiary in the absence
of deferral pursuant to the Plan.




          3. Interest of Associate. The obligation of the Company under the Plan to
make payment of amounts reflected in an Account merely constitutes the unsecured promise of the
Company to make payments from its general assets or in the form of its Common Shares, as the case
may be, as provided herein, and no Participant or Beneficiary shall have any interest in, or a lien
or prior claim upon, any property of the Company. Further, no Participant or Beneficiary shall
have any claim whatsoever against any Subsidiary for amounts reflected in an Account. Nothing in
the Plan shall be construed as guaranteeing future employment to Eligible Associates and nothing in
the Plan shall be considered in any manner a contract of employment. It is the intention of the
Company that the Plan be unfunded for tax purposes of Title I of ERISA. The Company may create a
trust to hold funds, Common Shares or other securities to be used in payment of its obligations
under the Plan, and may fund such trust; provided, however, that any funds
contained therein shall remain liable for the claims of the Company’s general creditors and
provided, further, that no amount shall be transferred to trust if, pursuant to
Section 409A of the Code, such amount would, for purposes of Section 83 of the Code, be treated as
property transferred in connection with the performance of services.




          4. Claims of Other Persons. The provisions of the Plan shall in no event be
construed as giving any other person, firm or corporation any legal or equitable right as against
the Company or any Subsidiary or the officers, employees or directors of the Company or any
Subsidiary, except any such rights as are specifically provided for in the Plan or are hereafter
created in accordance with the terms and provisions of the Plan.




          5. Severability. The invalidity and unenforceability of any particular
provision of the Plan shall not affect any other provision hereof, and the Plan shall be construed
in all respects as if such invalid or unenforceable provision were omitted herefrom.




          6. Governing Law. Except to the extent preempted by federal law, the
provisions of the Plan shall be governed and construed in accordance with the laws of the State of
Ohio.





 









 








          7. Relationship to Other Plans. The Plan is intended to serve the purposes
of and to be consistent with the Long-Term Incentive Plans and any similar plan approved by the
Committee for purposes of the Plan. The issuance or transfer of Common Shares pursuant to the Plan
shall be subject in all respects to the terms and conditions of the Long-Term Incentive Plans and
any other such plan. Without limiting the generality of the foregoing, Common Shares credited to
the Account(s) of Participants pursuant to the Plan as Incentive Compensation shall be taken into
account for purposes of Section 3 of the Long-Term Incentive Plans (Shares Available Under the
Plans) and for purposes of the corresponding provisions of any other such plan.




          8. Compliance with Section 409A of the Code.





     (i) To the extent applicable, it is intended that the Plan (including all
amendments thereto) comply with the provisions of Section 409A of the Code, so that the
income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the
Participant or a Beneficiary. The Plan shall be administered in a manner consistent with
this intent. In furtherance of, but without limiting the generality of the foregoing,
amounts in the Pre-2005 Subaccounts, which are intended to qualify for “grandfathered”
status pursuant to Treasury Regulation Section 1.409A-6(a), shall not be subject to the
provisions of Section 409A of the Code and shall be governed by the terms and conditions
specified in the Plan as in effect prior to January 1, 2005.




     (ii) Neither a Participant nor any of a Participant’s creditors or
beneficiaries shall have the right to subject any deferred compensation (within the meaning
of Section 409A of the Code) payable under the Plan to any anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment or garnishment, provided
that to the extent permitted by Section 409A of the Code, payment of part or all of
a Participant’s interest under the Plan may be made to an individual other than the
Participant to the extent necessary to fulfill a domestic relations order as defined in
Section 414(p)(1)(B) of the Code. Except as permitted under Section 409A of the Code, any
deferred compensation (within the meaning of Section 409A of the Code) payable to a
Participant or for a Participant’s benefit under the Plan may not be reduced by, or offset
against, any amount owing by a Participant to the Company or any of its affiliates.




     (iii) Notwithstanding any provision of the Plan to the contrary, in light of
the uncertainty with respect to the proper application of Section 409A of the Code, the
Company reserves the right to make amendments to the Plan as the Company deems necessary or
desirable to avoid the imposition of taxes or penalties under Section 409A of the Code. In
any case, a



 









 







Participant shall be solely responsible and liable for the satisfaction of all taxes
and penalties that may be imposed on a Participant or for a Participant’s Account in
connection with the Plan (including any taxes and penalties under Section 409A of the
Code), and neither the Company nor any of its affiliates shall have any obligation to
indemnify or otherwise hold a Participant harmless from any or all of such taxes or
penalties.



          9. Headings; Interpretation.





     (i) Headings in the Plan are inserted for convenience of reference only and
are not to be considered in the construction of the provisions hereof.




     (ii) Any reference in the Plan to Section 409A of the Code will also include
any applicable proposed, temporary, or final regulations or any other applicable formal
guidance promulgated with respect to such Section 409A of the Code by the U.S. Department
of Treasury or the Internal Revenue Service. Further, any specific reference to a Code
section or a Treasury Regulation section shall include any successor provision of the Code
or the Treasury Regulation, as applicable.




     (iii) For purposes of the Plan, the phrase “permitted by Section 409A of the
Code,” or words or phrases of similar import, shall mean that the event or circumstance
that may occur or exist only if permitted by Section 409A of the Code would not cause an
amount deferred or payable under the Plan to be includible in the gross income of a
Participant or Beneficiary under Section 409A(a)(1) of the Code.