exv10w16



 


Exhibit 10.16



CHS, INC.

SPECIAL SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN



ARTICLE I

INTRODUCTION



     Section 1.1. Adoption. CHS, Inc. (“CHS”) hereby adopts the CHS, Inc.
Special Supplemental Executive Retirement Plan (the “Plan”) effective this          day
of          , 2003, for the purpose of providing benefits for certain of
its employees who are part of a select group of management or highly
compensated employees.


     Section 1.2. Purpose. The purpose of this Plan is to provide specified
benefits to a select group of senior management and highly compensated
employees who contribute materially to the continued growth, development and
future business success of CHS. This Plan shall be unfunded for tax purposes
and for purpose of Title I of the Employee Retirement Income Security Act of
1974, as amended from time to time (ERISA).


ARTICLE II

DEFINITIONS AND INTERPRETATION



     Section 2.1. Definitions. When used in this Plan document, the following
terms have the meanings indicated unless a different meaning is plainly
required by the context.


     “Account” means an account established for a Participant under the terms
of the Plan.


     “Administrator” means the person or persons appointed by CHS (or its
Board) to administer the Plan. If CHS does not appoint an Administrator, the
Board will be the Administrator.


     “Annual Incentive Pay” means the annual incentive pay paid to a
Participant pursuant to the Annual Incentive Plan.


     “Annual Incentive Plan” means the Cenex Harvest States Cooperatives Annual
Incentive Plan dated                          ,
                          .


     “Base Pay” means the annual compensation, excluding bonuses, commissions,
overtime, relocation expenses, incentive payments, non-monetary awards, fringe
benefits, retainers, directors fees and other fees, severance allowances, pay
in lieu of vacations, insurance premiums paid by CHS, insurance benefits paid
to the Participant or his Beneficiary, CHS contributions to qualified or
nonqualified plans, automobile and other allowances paid to a Participant for
services rendered. Base Pay will be calculated prior to reduction for
compensation voluntarily deferred or contributed by the Participant for
qualified or nonqualified plans and will include amounts not otherwise


 







 


included in the Participant’s gross income under Code Sections 125, 401(k),
402(e)(3), 402(h), or 403(b).



     “Beneficiary” means the person, persons or entity designated in writing by
the Participant on forms provided by the Administrator to receive distribution
of certain death benefits under the Plan in the event of the Participant’s
death. A Participant may change the designated Beneficiary from time to time
by filing a new written designation with the Administrator, and such
designation shall be effective upon receipt by the Administrator. If a
Participant has not designated a Beneficiary, or if a designated Beneficiary is
not living or in existence at the time of a Participant’s death, any death
benefits payable under the Plan shall be paid to the Participant’s spouse, if
then living, and if the Participant’s spouse is not then living, to the
Participant’s estate.


     “Board” means the Board of Directors of CHS.


     “Change of Control” means the first to occur of either of the following
events:


     (a) Date that any one person, or group of persons acting as a group,
acquires ownership of shares of CHS that, together with shares already held by
the person or group, possesses more than fifty percent (50%) of the total
voting power of CHS shares. However, the acquisition of additional shares by
the same person or group is not considered a change of control.


     (b) CHS sells to an unrelated third party or parties (at one time or
within any two-year period) one third of the fair market value of its assets
and the assets of its wholly owned subsidiaries.


     “CHS” means CHS, Inc.


     “Code” means the Internal Revenue Code of 1986, as amended.


     “Committee” means the committee of CHS as described in Section 6.3 of the
Plan.


     “ERISA” means the Employee Retirement Income Security At of 1974, as
amended.


     “Participant” means a person who has satisfied the requirements of Section
2.1.


     “Plan” means the CHS, Inc. Special Supplemental Executive Retirement Plan
as it may be amended from time to time.


     “Plan Year” means the twelve (12) month period that begins on                          ,
and ends on                          .


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     “Total Disability” means total disability as defined by CHS long-term
disability plan.


     “Year of Service” means a Plan Year during which a Participant is
continuously employed by CHS.


     Section 2.2. Performance of Obligations. CHS agrees to perform its
obligations in accordance with the Plan.


     Section 2.3. Gender and Number. The singular form of any word will
include the plural and the masculine gender will include the feminine wherever
necessary for the proper interpretation of this Plan.


ARTICLE III

PARTICIPATION



     Section 3.1. Eligibility and Participation. The Chief Executive Officer
of CHS as of the effective date of this Plan will be eligible to participate in
this Plan on the date designated by the Board. The Board may from time to time
designate additional executives for inclusion in the Plan in its sole
discretion.


     Section 3.2. Status as Participant. A person who becomes a Participant
will remain a Participant in the Plan until all benefits payable to such person
under the Plan have been distributed.


ARTICLE IV

SUPPLEMENTAL RETIREMENT BENEFIT



     Section 4.1. Amount of Benefit. A supplemental retirement benefit will be
payable to a Participant under this Article IV. The amount of the
Participant’s benefit under the Plan shall be the sum of all amounts credited
to an Account established in the Participant’s name under this Article IV.


     Section 4.2. Account. CHS shall establish and maintain an Account for
each Participant to which amounts will be credited under this Section 4.2.
Each Participant’s Account shall be a separate bookkeeping account established
and maintained for the Participant representing separate unfunded and unsecured
general obligations of CHS with respect to the Participant and to which are
credited the amounts determined in accordance with this Section 4.2.


     (a) Base Benefit Amount. As of the end of each Plan Year for which a
Participant completes a Year of Service, an amount will be credited to the
Participant’s Account equal to the amount set forth in Schedule A, which shall
be attached to this Plan and incorporated herein, for the Plan Year for which
such Year of Service was completed. Any amounts not so credited to the
Participant’s Account for any Plan Year due to the Participant’s death, Total
Disability, termination of employment or a Change of Control will be forfeited.
After the amounts set forth in Schedule A have been so


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credited to the Participant’s Account or forfeited pursuant to this subsection
(a), no further amounts shall be credited to the Participant’s Account under
this subsection (a).



     (b) Performance-based Amount. As of the end of each Plan Year for which a
Participant completes a Year of Service, an amount will be credited to the
Participant’s Account equal to an amount not to exceed the amount set forth in
Schedule B, which shall be attached to this Plan and incorporated herein, for
the Plan Year for which such Year of Service was completed. If an amount shall
be credited to a Participant’s Account for any Plan Year pursuant to this
subsection (b), such amount will be determined by the Board or Committee,
provided the authority for making such determination has been so delegated to
the Committee, based on the Participant’s performance for the Plan Year for
which such determination is made pursuant to the performance standards under
the Annual Incentive Plan. By way of example, if a Participant receives sixty
percent (60%) of his or her maximum Annual Incentive Pay for a particular year
pursuant to the Annual Incentive Plan, an amount equal to sixty percent (60%)
of the amount set forth in Schedule B for the Plan Year for which such
determination is made will be credited to the Participant’s Account under this
Plan. Any amounts not so credited to the Participant’s Account for any Plan
Year due to the Participant’s death, Total Disability, termination of
employment or a Change of Control will be forfeited. After the appropriate
percentage of the amounts set forth in Schedule B have been so credited to the
Participant’s Account or forfeited pursuant to this subsection (b), no further
amounts shall be credited to the Participant’s Account under this subsection
(b).


     (c) Earnings. As of the end of each Plan Year, the amount credited to
each Participant’s Account will be adjusted by an amount equal to the product
of: (i) an interest rate of eight percent (8%), and (ii) the balance in the
Participant’s Account prior to the credit of any amounts for the immediately
following Plan Year pursuant to Section 4.2 (a) or (b) (i.e., the opening
account balance).


     Section 4.3. Vesting. For purposes of conceptually determining the
benefit that may be payable to a Participant under the Plan, the Participant’s
interest in the Plan shall at all times be fully vested.


ARTICLE V

DISTRIBUTIONS



     Section 5.1. Commencement of Benefits. Subject to Sections 5.3, 5.4 and
5.6 of this Plan, benefits under the Plan will be distributed beginning on the
first day of the sixth (6th) month of the Plan Year following the earliest to
occur of the Participant’s death, Total Disability, or termination of
employment.


     Section 5.2. Form of Distribution. CHS shall pay the Participant or his
Beneficiaries the vested portion of the Participant’s Account in one of the
following methods elected by the Participant or the Participant’s Beneficiary
in writing:


     (a) One lump sum payment; or


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     (b) A series of annual payments made over a period of years not to exceed
ten (10); or


     (c) One of the following annuity options:


     (1) Single life annuity (with level payments made for the
annuitant’s lifetime that cease upon the annuitant’s death).


     (2) Joint life and one-half survivor annuity (with full level
payments made as long as both the annuitant and joint annuitant are
alive, and upon the death of either the annuitant or joint annuitant,
fifty percent (50%) reduced, level payments to continue to the survivor
for as long he or she is alive).


Any benefits payable under the Plan in the form of an annuity shall be payable
from the assets of CHS. No annuity contract shall be required to be purchased
or distributed to or on behalf of the Participant pursuant to this subsection
(c).



     (d) A Participant must make an election in writing no later than six (6)
months prior to the beginning of the Plan Year in which a distribution is to be
made as to the form or commencement date of a benefit. If no such election is
made as to the form, distribution shall be made in the form of a single lump
sum payment unless the Board or Committee determines otherwise and so informs
the Participant.


     Section 5.3. Death Benefit. Notwithstanding any provision in this Plan to
the contrary, in the event of the death of a Participant prior to the payment
of the entire amount credited to the Participant’s Account, any unpaid amounts
shall be paid to the Participant’s Beneficiary as soon as practicable after the
Participant’s death.


     Section 5.4. Disability. Notwithstanding any provision in this Plan to
the contrary, in the event of the Total Disability of a Participant prior to
the payment of the entire amount credited to the Participant’s Account, any
unpaid amounts shall be paid to the Participant as soon as practicable after
the Participant’s Total Disability.


     Section 5.5. Distribution for Taxes. Anything herein to the contrary
notwithstanding, if, at any time, a court of competent jurisdiction or the
Internal Revenue Service determines that an amount credited to a Participant’s
Account is includable in the gross income of the Participant and subject to
tax, CHS may, in its sole discretion, permit a lump sum distribution of an
amount equal to the amount determined to be includable in the Participant’s
gross income.


     Section 5.6. Change of Control. Notwithstanding any provision in this
Plan to the contrary, in the event of a Change of Control of CHS, all
Participants shall be paid the entire amounts credited to their Accounts as of
that date in the form of single lump sum distributions on the January 1 of the
calendar year following the calendar year in


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which occurs such Change of Control. Amounts not credited to any Participant’s
Account as of the date on which the Change of Control occurs shall be
forfeited.



ARTICLE VI

ADMINISTRATION OF THE PLAN



     Section 6.1. Interpretation. The Plan will be administered by the
Administrator which will have the authority, duty and power to interpret and
construe the provisions of the Plan as it deems appropriate, to resolve all
factual and legal questions concerning the status and rights of a Participant
and a Beneficiary, to determine whether a Participant or Beneficiary is
entitled to any benefits that may be payable under the Plan. The Administrator
will have the duty and responsibility of maintaining records, making the
requisite calculations and dispersing the payments hereunder. The
Administrator’s interpretations, determinations, regulations and calculations
will be final and binding on all persons and parties concerned.


     Section 6.2. General Administration. The Administrator will be
responsible for the general operation and administration of the Plan and for
carrying out the provisions thereof. The Administrator will have the authority
to establish and revise rules, procedures and regulations relating to the Plan
and to make any other determinations which it believes necessary or advisable
for the administration of the Plan. The Administrator will be responsible for
the expenses incurred in the administration of the Plan. The Administrator
will be entitled to rely conclusively upon all tables, valuations,
certificates, opinions and reports furnished by any actuary, accountant,
controller, counsel or other person employed or engaged by the Administrator
with respect to the Plan.


     Section 6.3. Committee. A Committee consisting of one (1) or more members
appointed by the Board will act for CHS under the Plan, unless the Plan
specifically indicates that the Board or other persons are to act for CHS with
respect to a specified matter under the Plan. If such Board does not appoint
anyone to the Committee or if all members resign or otherwise cease to be
members of the Committee, such Board or any officer designated by the Board
will act for CHS until it makes any appointments under this section.


     Section 6.4. Records. The records of the Plan will be maintained on the
Plan Year.


ARTICLE VII

AMENDMENT OR TERMINATION



     Section 7.1. Amendment or Termination. CHS intends the Plan to be
permanent but, subject to Section 5.6 of this Plan, reserves the right to amend
or terminate the Plan at any time. Any such amendment or termination will be
made pursuant to a resolution of CHS’ Board and will be effective as of the
date provided in the resolution. An amendment will be stated in an instrument
in writing signed in the


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name of CHS by a person authorized by the Board and all parties interested
herein will be bound thereby.



     Section 7.2. Impact on Benefits. No amendment or termination of the Plan
will directly or indirectly reduce any benefit described in Article IV of the
Plan as of the effective date of such amendment or termination. Subject to
Section 5.6 of this Plan, a Participant’s Account under the Plan will not be
credited with additional amounts, other than amounts determined under
subsection (c) of Section 4.2, after the termination of the Plan and will be
determined under the appropriate provisions of the Plan as if the Participant
did not accumulate any additional service after the effective date of such
termination and did not have any increase in compensation after that date.
Upon the termination of the Plan, distribution of benefits payable under the
Plan will be made to each Participant or the Participant’s Beneficiary or
surviving spouse in accordance with Article V of the Plan.


ARTICLE VIII

GENERAL PROVISIONS



     Section 8.1. Responsibility for Benefits and Expenses. CHS will pay
benefits arising under the Plan and all costs, charges and expenses related
thereto. CHS may anticipate its obligations under this Plan by establishing a
trust or purchasing any insurance or other contract; provided, however, that
such “funding” vehicle will not:


     (a) change the status of this Plan as an unfunded plan both for tax
purposes and for purposes of Title I of ERISA; or


     (b) change the rights of a Participant or the Participant’s Beneficiary or
surviving spouse under Section 8.3 of the Plan.


     Section 8.2. Inalienability. The benefits payable hereunder or the right
to receive future benefits under the Plan may not be anticipated, alienated,
sold, transferred, assigned, pledged, encumbered, or subjected to any charge or
legal process; and no interest or right to receive a benefit may be taken,
either voluntarily or involuntarily, for the satisfaction of the debts of, or
other obligations or claims against, such person or entity, including claims
for alimony, support, separate maintenance and claims in bankruptcy
proceedings.


     Section 8.3. Unsecured Claim. The right of a Participant or the
Participant’s Beneficiary or surviving spouse to receive a distribution
hereunder will be an unsecured claim against the general assets of CHS, and
neither a Participant nor his or her Beneficiary or surviving spouse will have
any rights in or against any amount credited to any Account under the Plan or
any other assets of CHS. The Plan will at all times be considered entirely
unfunded both for tax purposes and for purposes of Title I of ERISA.


     Section 8.4. Plan Administered According to Its Terms. No Participant,
Beneficiary or surviving spouse will have any right to a benefit under the Plan
except in accordance with the terms of the Plan. Establishment of the Plan
will not be construed


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to give any Participant the right to be retained in the service of CHS. The
sole rights of a Participant or his or her Beneficiary or surviving spouse
under the Plan will be to have the Plan administered according to its terms,
and to receive whatever benefits he or she may be entitled to hereunder.



     Section 8.5. Impact of Corporate Change. The Plan will not be
automatically terminated by a transfer or sale of assets of CHS or by the
merger or consolidation of CHS into or with any other corporate or other
entity, but the Plan will be continued after such sale, merger or consolidation
only if and to the extent that the transferee, purchaser or successor entity
agrees to continue the Plan. In the event the Plan is not continued by the
transferee, purchaser or successor entity, then the Plan will terminate subject
to the provisions of Article VII and Section 5.6 of the Plan.


     Section 8.6. Governing Law. To the extent not pre-empted by the laws of
the United States of America, the laws of the State of Minnesota shall be the
controlling state law in all matters relating to this Plan.


     Section 8.7. Severability. If any provisions of this Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of this Plan, but this Plan shall be construed and
enforced as if the illegal and invalid provisions never had been included
herein.


     Section 8.8. Taxes. CHS has the right to deduct from all payments made
under the Plan to a Participant, the Participant’s Beneficiary or surviving
spouse any federal, state, local or other taxes required by law to be withheld
with respect to such payments.


     Executed this          day
of                          , 2003.



	 	 	 
	 	 	
CHS, Inc.
	 	 	 
	 	 	
By:
	 	 	


	 	 	 
	 	 	
Title:
	 	 	








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SCHEDULE A



Annual Special SERP Contributions




	 	 	 	 	 	 	 	 	 
	Year	 	Age	 	 	SERP Contribution	 
	
	 	
	 	 	
	 
	2002
	 	 	54	 	 	 	 	 
	2003
	 	 	55	 	 	$	263,663	 
	2004
	 	 	56	 	 	$	263,663	 
	2005
	 	 	57	 	 	$	263,663	 
	2006
	 	 	58	 	 	$	263,663	 
	2007
	 	 	59	 	 	$	263,663	 
	2008
	 	 	60	 	 	$	306,163	 
	2009
	 	 	61	 	 	$	350,428	 
	2010
	 	 	62	 	 	$	395,481	 






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SCHEDULE B



Annual Maximum Performance-Based

Special SERP Contributions




	 	 	 	 	 	 	 	 	 
	Year	 	Age	 	 	SERP Contribution	 
	
	 	
	 	 	
	 
	2002
	 	 	54	 	 	 	 	 
	2003
	 	 	55	 	 	$	83,272	 
	2004
	 	 	56	 	 	$	83,272	 
	2005
	 	 	57	 	 	$	83,272	 
	2006
	 	 	58	 	 	$	83,272	 
	2007
	 	 	59	 	 	$	83,272	 
	2008
	 	 	60	 	 	$	83,272	 
	2009
	 	 	61	 	 	$	83,272	 
	2010
	 	 	62	 	 	$	83,272	 







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