EX-10.1



 





Exhibit 10.1




DSW INC.




NONQUALIFIED DEFERRED COMPENSATION PLAN




Effective August 1, 2007




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE I Purpose and Effective Date	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	1.1.	 	 	Purpose
	 	 	1	 
	 

	 	 	1.2.	 	 	Effective Date
	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE II Definitions	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.1.	 	 	Account.
	 	 	1	 
	 

	 	 	2.2.	 	 	Affiliates
	 	 	1	 
	 

	 	 	2.3.	 	 	Beneficiary
	 	 	1	 
	 

	 	 	2.4.	 	 	Board
	 	 	1	 
	 

	 	 	2.5.	 	 	Bonus Deferral Commitment
	 	 	1	 
	 

	 	 	2.6.	 	 	Change in Control
	 	 	1	 
	 

	 	 	2.7.	 	 	Code
	 	 	2	 
	 

	 	 	2.8.	 	 	Company
	 	 	2	 
	 

	 	 	2.9.	 	 	Company Contribution Account
	 	 	2	 
	 

	 	 	2.10.	 	 	Compensation
	 	 	2	 
	 

	 	 	2.11.	 	 	Compensation Deferral
	 	 	3	 
	 

	 	 	2.12.	 	 	Director’s Fees Deferral Commitment
	 	 	3	 
	 

	 	 	2.13.	 	 	Disability
	 	 	3	 
	 

	 	 	2.14.	 	 	Discretionary Contribution
	 	 	3	 
	 

	 	 	2.15.	 	 	Elective Deferral Account
	 	 	3	 
	 

	 	 	2.16.	 	 	Employer
	 	 	3	 
	 

	 	 	2.17.	 	 	Matching Contribution
	 	 	3	 
	 

	 	 	2.18.	 	 	Measurement Funds
	 	 	4	 
	 

	 	 	2.19.	 	 	Participant.
	 	 	4	 
	 

	 	 	2.20.	 	 	Participation Agreement
	 	 	4	 
	 

	 	 	2.21.	 	 	Plan
	 	 	4	 
	 

	 	 	2.22.	 	 	Plan Administrator
	 	 	4	 
	 

	 	 	2.23.	 	 	Plan Year
	 	 	4	 
	 

	 	 	2.24.	 	 	Related Group
	 	 	4	 
	 

	 	 	2.25.	 	 	Retirement
	 	 	4	 
	 

	 	 	2.26.	 	 	Salary Deferral Commitment
	 	 	4	 
	 

	 	 	2.27.	 	 	Termination
	 	 	5	 
	 

	 	 	2.28.	 	 	Reserved
	 	 	5	 
	 

	 	 	2.29.	 	 	Unforeseeable Emergency
	 	 	5	 
	 

	 	 	2.30.	 	 	Valuation Date
	 	 	5	 
	 

	 	 	2.31.	 	 	Year of Credited Service
	 	 	5	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE III Eligibility and Participation	 	 	5	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.1.	 	 	Eligibility
	 	 	5	 
	 

	 	 	3.2.	 	 	Participation
	 	 	5	 
	 

	 	 	3.3.	 	 	Partial Year Participation
	 	 	5	 






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	 	 	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE IV Elective Deferrals	 	 	6	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.1.	 	 	Amount of Deferral Election
	 	 	6	 
	 

	 	 	4.2.	 	 	Deferral Limits
	 	 	6	 
	 

	 	 	4.3.	 	 	Period of Commitment
	 	 	7	 
	 

	 	 	4.4.	 	 	Change of Status
	 	 	7	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE V	 	Participant Accounts	 	 	7	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.1.	 	 	Establishment of Accounts
	 	 	7	 
	 

	 	 	5.2.	 	 	Crediting Compensation Deferrals to Elective Deferral Account
	 	 	7	 
	 

	 	 	5.3.	 	 	Crediting Matching Contributions to Company Contribution Account
	 	 	7	 
	 

	 	 	5.4.	 	 	Crediting Discretionary Contributions to Company Contribution Account
	 	 	7	 
	 

	 	 	5.5.	 	 	Investment Designations and Earnings (or Losses) on Account
	 	 	7	 
	 

	 	 	5.6.	 	 	Valuation of Account
	 	 	8	 
	 

	 	 	5.7.	 	 	Vesting of Accounts
	 	 	8	 
	 

	 	 	5.8.	 	 	Discharge for Cause
	 	 	8	 
	 

	 	 	5.9.	 	 	Statement of Account
	 	 	9	 
	 

	 	 	5.10.	 	 	Payments from Account
	 	 	9	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE VI Payments to Participants	 	 	9	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.1.	 	 	Distributions.
	 	 	9	 
	 

	 	 	6.2.	 	 	Timing of Benefit Payments
	 	 	9	 
	 

	 	 	6.3.	 	 	Form of Payment
	 	 	9	 
	 

	 	 	6.4.	 	 	Disability
	 	 	10	 
	 

	 	 	6.5.	 	 	Death
	 	 	10	 
	 

	 	 	6.6.	 	 	Unforeseeable Emergency
	 	 	10	 
	 

	 	 	6.7.	 	 	Change in Election
	 	 	11	 
	 

	 	 	6.8.	 	 	Small Accounts
	 	 	11	 
	 

	 	 	6.9.	 	 	Valuation of Payments
	 	 	11	 
	 

	 	 	6.10.	 	 	Delay of Payment for Specified Employees
	 	 	11	 
	 

	 	 	6.11.	 	 	Effect of Code Section 4999
	 	 	11	 
	 

	 	 	6.12.	 	 	Effect of Payment
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE VII Beneficiary Designation	 	 	12	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.1.	 	 	Beneficiary Designation
	 	 	12	 
	 

	 	 	7.2.	 	 	Changing Beneficiary
	 	 	12	 
	 

	 	 	7.3.	 	 	Community Property
	 	 	12	 
	 

	 	 	7.4.	 	 	No Beneficiary Designation
	 	 	12	 
	 

	 	 	7.5.	 	 	Effect of Payment
	 	 	12	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE VIII Administration	 	 	12	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	8.1.	 	 	Plan Administrator
	 	 	12	 
	 

	 	 	8.2.	 	 	Agents
	 	 	13	 
	 

	 	 	8.3.	 	 	Binding Effect of Decisions
	 	 	13	 
	 

	 	 	8.4.	 	 	Indemnification of Plan Administrator
	 	 	13	 






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	 	 	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE IX Claims Procedures	 	 	13	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.1.	 	 	Claim
	 	 	13	 
	 

	 	 	9.2.	 	 	Claim Decision Not Involving Determination of Disability.
	 	 	13	 
	 

	 	 	9.3.	 	 	Claim Decision Involving Determination of Disability
	 	 	14	 
	 

	 	 	9.4.	 	 	Request for Review
	 	 	15	 
	 

	 	 	9.5.	 	 	Review of Decision Not Involving Determination of Disability
	 	 	15	 
	 

	 	 	9.6.	 	 	Review of Decision Involving Determination of Disability
	 	 	16	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE X Miscellaneous	 	 	17	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.1.	 	 	Unfunded Plan
	 	 	17	 
	 

	 	 	10.2.	 	 	Unsecured General Creditor
	 	 	17	 
	 

	 	 	10.3.	 	 	Trust Fund
	 	 	17	 
	 

	 	 	10.4.	 	 	Protective Provisions
	 	 	17	 
	 

	 	 	10.5.	 	 	Inability to Locate Participant or Beneficiary
	 	 	18	 
	 

	 	 	10.6.	 	 	No Contract of Employment
	 	 	18	 
	 

	 	 	10.7.	 	 	Withholding Taxes
	 	 	18	 
	 

	 	 	10.8.	 	 	No Limitation on Employer Actions
	 	 	18	 
	 

	 	 	10.9.	 	 	Obligations to Employer
	 	 	18	 
	 

	 	 	10.10.	 	 	No Liability for Action or Omission.
	 	 	18	 
	 

	 	 	10.11.	 	 	Nonalienation of Benefits
	 	 	18	 
	 

	 	 	10.12.	 	 	Liability for Benefit Payments
	 	 	19	 
	 

	 	 	10.13.	 	 	Governing Law.
	 	 	19	 
	 

	 	 	10.14.	 	 	Severability of Provisions
	 	 	19	 
	 

	 	 	10.15.	 	 	Headings and Captions
	 	 	19	 
	 

	 	 	10.16.	 	 	Gender, Singular and Plural
	 	 	19	 
	 

	 	 	10.17.	 	 	Participating Employers
	 	 	19	 
	 

	 	 	10.18.	 	 	Notice
	 	 	19	 
	 

	 	 	10.19.	 	 	Amendment and Termination
	 	 	20	 







iii











 





DSW INC.

NONQUALIFIED DEFERRED COMPENSATION PLAN




Effective August 1, 2007




ARTICLE I




Purpose and Effective Date




     1.1. Purpose. This plan is intended to allow a select group of key management or
other highly compensated employees of the Employer and directors of the Company to defer the
receipt of compensation that would otherwise be payable to them and to provide supplemental
retirement benefits for those employees. This Plan shall be unfunded for tax purposes and for
purposes of Title I of ERISA. The terms of this Plan are intended to, and shall be shall be
operated and interpreted and applied so as to, comply in all respects with applicable law and the
provisions of Internal Revenue Code Section 409A and regulations and rulings thereunder.



     1.2. Effective Date. This Plan shall be effective as of August 1, 2007.



ARTICLE II




Definitions




     For ease of reference, the following definitions will be used in the Plan:



     2.1. Account. “Account” means the account maintained on the books of the Employer
used solely to calculate the amount payable to each Participant who defers Compensation under this
Plan and shall not constitute or be treated as a separate fund of assets.



     2.2. Affiliates. “Affiliate” or “Affiliates” shall mean a group of entities including
the Company which constitutes a controlled group of corporations (as defined in Code Section
414(b)), a group of trades or businesses (whether or not incorporated) under common control (as the
defined Code Section 414(c)), and members of an affiliated service group (within the meaning of
Code Section 414(m)).



     2.3. Beneficiary. “Beneficiary” means the person, persons or entity designated by
the Participant to receive payments under this Plan in the event of the Participant’s death as
provided in Article VII.



     2.4. Board. “Board” means the Board of Directors of DSW Inc.



     2.5. Bonus Deferral Commitment. “Bonus Deferral Commitment” means that portion of
bonus compensation for which a Participant has made an election to defer receipt pursuant to
Article IV.



     2.6. Change in Control. “Change in Control” means the following:



1









 





          (a) Any of the following events, as provided under Code Section 409A(a)(2)(A)(v) and any
guidance issued thereunder.




               (1) A change in ownership of the Company, which occurs if a person or several persons acting
as a group acquires more than 50% of the stock of the Company measured by voting power or value.



               (2) A change in effective control of the Company, which occurs if either (1) a person, or
group of persons acting together acquires at least 30% of the stock of the Company, measured by
voting power, over a 12-month period, or (2) a majority of the Board is replaced by directors not
endorsed by prior members of the Board.



               (3) A change in ownership of a substantial portion of the Company’s assets, which occurs if a
person or group of persons acquires 40% or more of the gross fair market value of the assets of the
Company over a 12-month period.



          (b) Notwithstanding any provision in Section 2.6(a) to the contrary, in no event shall a
spin-off from Retail Ventures, Inc. or any corporation, partnership or other form of unincorporated
entity of which Retail Ventures, Inc. owns directly or indirectly, 50% or more of the total
combined total voting power of all classes of stock, if the entity is a corporation or of the
capital or profit interests, if the entity is a partnership or another form of unincorporated
entity be considered a Change in Control.




     2.7. Code. “Code” means the Internal Revenue Code of 1986, as amended (and any
regulations thereunder).



     2.8. Company. “Company” means DSW Inc., an Ohio corporation, and any successor
thereto.



     2.9. Company Contribution Account. “Company Contribution Account” means the Account
maintained in accordance with Section 5.3 with respect to Matching Contributions and Section 5.4
and with respect to any Discretionary Contributions made under this Plan. A Participant’s Company
Contribution Account shall be utilized solely as a device for the determination and measurement of
amounts to be paid to the Participant pursuant to this Plan and shall not constitute or be treated
as a separate fund of assets.



     2.10. Compensation. “Compensation” means compensation for services performed,
including salary and bonus. This includes a Participant’s (i) base salary payable during a Plan
Year; (ii) bonuses payable by the Employer for services performed in the period that begins during
a Plan Year; and (iii) long-term incentive plan amounts paid in either cash or shares.
Compensation also includes all fees payable to non-employee members of the Board, including the
retainer for service as a member of the Board or any committees thereof and meeting fees. In no
event shall any of the following items be treated as Compensation hereunder: (i) payments from
this Plan or any other Employer nonqualified deferred compensation plan; (ii) with the exception of
long-term incentive plan amounts paid in shares as described above, any form of non-cash
compensation or benefits, including short and long term disability payments, group life insurance
premiums, income from the exercise of non-qualified stock options, from the disqualifying
disposition of incentive stock options, or realized upon vesting of restricted stock



2









 




or the delivery of shares in respect of restricted stock units (or
other similar items of income related to equity compensation grants or exercises); (iii) expense
reimbursements; (iv) severance payments; or (v) any other payments or benefits other than normal
Compensation as determined by the Plan Administrator in its sole discretion. Notwithstanding
anything to the contrary, Compensation shall include amounts deferred on a pre-tax basis under this
Plan, any tax-qualified retirement plan, any Code Section 125 plan, and any other nonqualified
deferred compensation plan of the Employer.




     2.11. Compensation Deferral. “Compensation Deferral” means that portion of
Compensation as to which a Participant has made an annual irrevocable election to defer receipt
pursuant to Article IV. A Participant’s Compensation Deferral may consist of a Salary Deferral
Commitment, a Bonus Deferral Commitment, a Director’s Fees Deferral Commitment, or a combination,
as applicable to the Participant.



     2.12. Director’s Fees Deferral Commitment. “Director’s Fees Deferral Commitment”
means that portion of director’s fees for which a Participant has made an election to defer receipt
pursuant to Article IV.



     2.13. Disability. “Disability” means that a Participant either (i) is unable to
engage in any substantial gainful activity by reason of any medically determineable physical or
mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months, receiving income
replacement benefits for a period of not less than three (3) months under an accident or health
plan covering employees of the Participant’s Employer. A Participant who has been determined to be
eligible for Social Security disability benefits shall be presumed to have a Disability as defined
herein.



     2.14. Discretionary Contribution. “Discretionary Contribution” means any amount
credited to a Participant’s Account under Section 5.4.



     2.15. Elective Deferral Account. “Elective Deferral Account” means the Account
maintained in accordance with Section 5.2 with respect to any elective Compensation Deferrals made
under this Plan. A Participant’s Elective Deferral Account shall be utilized solely as a device
for the determination and measurement of the amounts to be paid to the Participant pursuant to this
Plan and shall not constitute or be treated as a separate fund of assets.



     2.16. Employer. “Employer” means the Company and any parent, subsidiary, or other
affiliate designated by the Plan Administrator to participate in this Plan, as provided under
Section 10.17.



     2.17. Matching Contribution. “Matching Contribution” means the amount that equals the
following:



          (a) Any Matching Contribution not paid into the Participant’s 401(k) plan account by the
Employer due to the Participant’s participation in this Plan or any other plan of an Employer; plus




3









 








          (b) Any other amount determined by the Employer, and in its sole discretion, to be appropriate
for the Plan Year. Such an amount may be larger or smaller than the amount credited to any other
Participant and may defer from the amount credited to such participant in the preceding Plan Year.




     Notwithstanding the above, in no event shall a Participant who is a member of the Board of
Directors of the Company be eligible for a Matching Contribution.



     2.18. Measurement Funds. “Measurement Funds” means one or more of the independently
established funds or indices that are identified by the Plan Administrator. These Measurement
Funds are used solely to calculate the earnings that are credited to each Participant’s Account(s)
in accordance with Article V below, and do not represent any beneficial interest on the part of the
Participant in any asset or other property of the Company. The determination of the increase or
decrease in the performance of each Measurement Fund shall be made by the Plan Administrator in its
reasonable discretion. Measurement Funds may be replaced, new funds may be added, or both, from
time to time in the discretion of the Plan Administrator.



     2.19. Participant. “Participant” means any employee who satisfies the eligibility
requirements set forth in Article III. In the event of the death or incompetency of a Participant,
the term means his or her beneficiary, personal representative or guardian.



     2.20.  Participation Agreement. “ “Participation Agreement” means the authorization
form that an eligible employee files with the Plan Administrator to elect a Compensation Deferral
under the Plan for a Plan Year.



     2.21. Plan. “Plan” means this Plan, entitled the DSW Inc. Nonqualified Deferred
Compensation Plan, as amended from time to time.



     2.22. Plan Administrator. “Plan Administrator” means the committee appointed by the
Company to administer this Plan pursuant to Article VIII.



     2.23. Plan Year. “Plan Year” means (a) for the 2007 Plan Year, August 1, 2007 through
December 31, 2007, and (b) for each year thereafter, the twelve (12) month period beginning on each
January 1 and ending on the following December 31.



     2.24. Related Group. “Related Group” means the Company and all Affiliates of the
Company.



     2.25. Retirement. “Retirement” means separation of service from the Related Group
after attaining age fifty-five (55) and completing at least five years of service.



     2.26. Salary Deferral Commitment. “Salary Deferral Commitment” means that portion of
salary compensation for which a Participant has made an election to defer receipt pursuant to
Article IV.



4









 





     2.27. Termination. “Termination” means a Participant’s separation from service with
the Related Group, including termination of service as a member of the Board, for any reason other
than Disability or death.



     2.28. Reserved.



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



     2.30. Valuation Date. “Valuation Date” means the last day of the Plan Year and any
other date or dates that the Employer, in its sole discretion, reasonably chooses to calculate the
value of the Participant’s Accounts and treat as a Valuation Date.



     2.31. Year of Credited Service. “Year of Credited Service” means a twelve (12) month
consecutive period in which the Participant has been employed by Employer.



ARTICLE III




Eligibility and Participation




     3.1. Eligibility. An employee of an Employer shall be eligible to participate in this
Plan if the employee is part of a select group of management or highly compensated employee and is
named by the Plan Administrator to be a Participant in this Plan. All non-employee Board members
shall also be eligible to participate in this Plan. An individual shall remain a Participant until
that individual has received full payment of all amounts credited to the Participant’s Accounts.



     3.2. Participation. An eligible employee or Board member may elect to enter into a
Salary Deferral Commitment and/or a Director’s Fees Deferral Commitment with respect to any Plan
Year by submitting a Participation Agreement to the Plan Administrator by December 31 (or such
earlier date established by the Plan Administrator) of the calendar year immediately preceding the
Plan Year. An eligible employee may elect to enter into a Bonus Deferral Commitment by submitting
a Participation Agreement to the Plan Administrator no later than six (6) months prior to the end
of the period in which the performance-based compensation that is the subject of the Bonus Deferral
Commitment is earned (or such earlier date established by the Plan Administrator), provided such
bonus is determined based upon a period of least 12 months. Such Participation Agreement shall
only be effective if entered into in a manner consistent with the provisions of Code section 409A.



     3.3. Partial Year Participation. If an employee or director first becomes eligible to
participate during a calendar year, the employee or director must submit a Participation Agreement
to the Plan Administrator no later than thirty (30) days following the date the employee or
director becomes eligible to participate. Such Participation Agreement shall be effective only
with respect to Compensation for services to be performed subsequent to the election and deferred
in a manner consistent with the provisions of Code section 409A. For



5









 




bonus or incentive compensation earned in the initial Plan Year that is based upon a specified
performance period, the Participant’s deferral election may apply only to the portion of such
Compensation that is equal to i) the total amount of compensation for the performance period,
multiplied by ii) a fraction, the numerator of which is the number of days remaining in the service
period after the Participant’s deferral election is made, and the denominator of which is the total
number of days in the performance period.




ARTICLE IV




Elective Deferrals




     4.1. Amount of Deferral Election. A Participant may elect a Compensation Deferral in
the Participation Agreement as follows:



          (a) Salary Deferral Commitment. A Salary Deferral Commitment shall be related to the
salary payable by the Employer to the Participant for services performed during the Plan Year. The
amount to be deferred shall be stated as a percentage of the salary to be earned during the Plan
Year, as a flat dollar amount from any salary earned during the Plan Year, or in such other form as
allowed by the Plan Administrator. Any deferral elections under the 401(k) Plan or changes thereto
shall have no impact on the Salary Deferral Commitment under the Plan.




          (b) Bonus Deferral Commitment. The amount to be deferred shall be stated as a
percentage or as a flat dollar amount of any bonus payable by the Employer for services performed
in the period that begins during the Plan Year, or in such other form as allowed by the Plan
Administrator.




          (c) Director’s Fees Deferral Commitment. The amount to be deferred shall be stated as
a percentage of any fees earned during the Plan Year, as a flat dollar amount from any fees earned
during the Plan Year, or in such other form as allowed by the Plan Administrator.




     4.2. Deferral Limits. The following limitations shall apply to Compensation
Deferrals:



          (a) Minimum. The minimum deferral amount for a Salary, Bonus or Director’s Fees
Deferral Commitment shall be two thousand dollars ($2,000) per Plan Year.




          (b) Maximum. The maximum deferral amount for a Salary Deferral Commitment shall be
eighty percent (80%). The maximum deferral amount for a Bonus Deferral Commitment shall be ninety
percent (90%) of any such bonus payable by the Employer for services performed in the period that
begins during the Plan Year. The maximum deferral amount for a Director’s Fees Deferral Commitment
shall be one hundred percent (100%) of any such fees to be earned during the Plan Year. Such
deferrals shall be limited to the extent necessary to accommodate all income tax withholding
obligations, deferral elections under the 401(k) Plan and contribution obligations for group health
and other benefit plans.




          (c) Changes in Minimum or Maximum. The Plan Administrator may amend the Plan to
change the minimum or maximum deferral amounts from time to time by giving
written notice to all Participants. No such change may affect a Compensation Deferral made
prior to the Plan Administrator’s action unless otherwise required by law.




6









 








     4.3. Period of Commitment. A Participant’s Participation Agreement as to a
Compensation Deferral shall remain in effect only for the immediately succeeding Plan Year (or the
remainder of the current year, as applicable). After a Plan Year has begun, the Participation
Agreement shall be irrevocable for the remainder of that Plan Year. Notwithstanding the above, the
Participation Agreement shall be terminated if a distribution is made to a Participant as a result
of an Unforeseeable Emergency pursuant to Section 6.7 or if such termination is required for the
Participant to be able to obtain a hardship distribution under a qualified plan with a qualified
cash or deferred arrangement under Code section 401(k). Any resumption of the Participant’s
deferrals under this Plan shall be made only at the election of the Participant in accordance with
Article III herein.



     4.4. Change of Status. Participation in a Plan Year does not guarantee active
participation in any future Plan Year. If a Participant no longer meets the eligibility criteria
set forth in Section 3.1 during a Plan Year, the Participant’s most recent Compensation Deferral
should remain in effect for the remainder of the Plan Year and shall not terminate unless such
termination of the Compensation Deferral is required for the Plan to continue to be maintained
primarily for the purpose of providing deferred compensation for a select group of management or
highly compensated employees within the meaning of ERISA Sections 201(2), 301(a), and 401(a)(1).



ARTICLE V




Participant Accounts




     5.1. Establishment of Accounts. For record keeping purposes only, separate accounts
shall be maintained for each Participant to reflect his or her Elective Deferral Account and
Company Contribution Account (collectively referred to as “Accounts.”) Separate sub-accounts shall
be maintained to the extent necessary to properly reflect the Participant’s election of Measurement
Funds, distribution elections and vesting.



     5.2. Crediting Compensation Deferrals to Elective Deferral Account. The Plan
Administrator shall credit Compensation Deferrals to the Participant’s Elective Deferral Account as
soon as practicable after the date on which such Compensation would otherwise have been paid, in
accordance with the Participant’s election.



     5.3. Crediting Matching Contributions to Company Contribution Account. The Employer
shall credit Matching Contributions to the Participant’s Company Contribution Account as determined
as by the Employer in its discretion.



     5.4. Crediting Discretionary Contributions to Company Contribution Account. The
Employer may make Discretionary Contributions to the Participant’s Company Contribution Account, in
accordance with Section 2.9 at such times as the Plan Administrator in its sole discretion shall
determine.



     5.5. Investment Designations and Earnings (or Losses) on Account. Participants must
designate, on a Participation Agreement or by such other means as may be established by the Plan
Administrator, the portion of the contributions to their Accounts that shall be allocated



7









 




among the various Measurement Funds. In default of such designation, contributions to a Participant’s
Accounts shall be allocated to one or more default Measurement Funds as determined by the Plan
Administrator in its sole discretion. A Participant’s Account shall be credited with all deemed
earnings (or losses) generated by the Measurement Funds, as elected by the Participant, on each
business day for the sole purpose of determining the amount of earnings to be credited or debited
to such Account as if the designated balance of the Account had been invested in the applicable
Measurement Fund. Notwithstanding that the rates of return credited to Participant’s Accounts are
based upon the actual performance of the corresponding Measurement Funds, the Employer shall not be
obligated to invest any amount credited to a Participant’s Account under this Plan in such
Measurement Funds or in any other investment funds. Upon notice to the Plan Administrator in the
manner it prescribes, a Participant may reallocate the Funds to which his or her Account is deemed
to be allocated. Changes made while the New York Stock Exchange is open will be effective at the
end of the day on which the change was made. Changes made when the New York Stock Exchange is
closed will be effective at the end of the next day on which the New York Stock Exchange is open.




     5.6. Valuation of Account. The value of a Participant’s Account as of any date shall
equal the amounts theretofore credited to such Account, including any earnings (positive or
negative) deemed to be earned on such Account in accordance with Section 5.5, less any payments
made to the Participant or the Participant’s Beneficiary pursuant to this Plan, and any
forfeitures.



     5.7. Vesting of Accounts. Participants shall be vested in their Accounts as follows:



          (a) Compensation Deferrals, and earnings credited thereon, shall be one hundred percent (100%)
vested at all times.




          (b) Matching Contributions, and earnings credited thereon, and Discretionary Contributions
shall vest in accordance with a schedule to be determined in the sole discretion of the Plan
Administrator, with such schedule to be provided to the Participant at the time such contributions
are credited to the Participant’s Company Contribution Account. Notwithstanding the above, the
Company Contribution Account shall become one hundred percent (100%) vested upon the occurrence of
any of the following events to the extent permitted under Code section 409A:





	 	(i)	 	The Participant’s Retirement,
	 
	 	(ii)	 	The Participant’s Disability,
	 
	 	(iii)	 	The Participant’s death,
	 
	 	(iv)	 	A Change in Control of the Company.





     5.8. Discharge for Cause. Notwithstanding any other provision of this Plan to the
contrary, a Participant’s Company Contribution Account shall be forfeited and no benefit shall be
paid from that Account if a Participant’s employment with Employer is terminated for “cause.” A
termination for cause is, subject to any cure provision included in any written agreement between
the Participant and the Company, a termination based upon the Participant’s:



8









 





          (a) Material failure to substantially perform his or her position or duties;




          (b) Engaging in illegal or grossly negligent conduct that is materially injurious to the
Company or an Affiliate;




          (c) Material violation of any law or regulation governing the Company or any Affiliate;




          (d) Commission of a material act of fraud or dishonesty which has had or is likely to have a
material adverse effect upon the Company’s (or an Affiliate’s) operations or financial conditions;
or




          (e) Material breach of the terms of any other agreement (including any employment agreement)
with the Company or any Affiliate.




     5.9. Statement of Account. The Plan Administrator shall provide or make available to
each Participant (including electronically), not less frequently than annually, a statement in such
form as the Plan Administrator deems desirable setting forth the balance of his or her Account.



     5.10. Payments from Account. Any payment made to or on behalf of a Participant from
his or her Account in an amount which is less than the entire balance of his or her Account shall
be made pro rata from each of the Measurement Funds to which such Account is then allocated.



ARTICLE VI




Payments to Participants




     6.1. Distributions. Distributions under this Plan may only be made in accordance with
the requirements of Code Section 409A.



     6.2. Timing of Benefit Payments. A Participant may elect the timing of his or her
benefit payments in the Participation Agreement in a manner established by the Plan Administrator.
Such election shall be made in a manner that satisfies Section 409A of the Code with regard to the
timing of Participant elections. All payments of benefits shall be made, or shall commence as soon
as administratively practicable after the Valuation Date immediately following the earliest of any
date designated by the Participant in the applicable Participation Agreement, death, Disability, or
Termination. Notwithstanding the above, if the Participant is re-employed by the Employer before
the date any installment payment under the Plan is payable due to a Retirement, any future payments
shall be suspended until another payment event occurs.



     6.3. Form of Payment. Subject to the requirements of Code Section 409A, benefits
payable under the Plan shall be payable in the following form:



          (a) Prior to Retirement. Benefits payable as a result of a Termination prior to
Retirement, Disability, or death shall be paid in the form of a single lump sum payment.




          (b) Due to Retirement. Benefits payable as a result of a Termination due to
Retirement shall be paid in the form elected by the Participant in his or her Participation





9









 







Agreement. If a Participant fails to make a timely election, benefits shall be paid in the form of
a lump sum. Options for form of payment shall include:




               (i) A lump sum payment, or



               (ii) Annual installments over a period of five (5) or ten (10) years. The Participant’s
Account shall continue to accrue earnings (or losses) as measured by the Measurement Funds during
the payment period on the unpaid balance in the Participant’s Accounts.



     6.4. Disability. Upon the Disability of a Participant, the Participant shall be paid
the balance in his or her Account in the form of a lump sum payment, with such payment to be made
as soon as practicable after the Participant’s Disability has been determined by the Plan
Administrator. Such payment may be made to any legally appointed guardian of the Participant.
Upon the Disability of the Participant after installment benefit payments have commenced, the
Participant shall receive the remaining unpaid balance in the Participant’s Account in the form of
a lump sum payable as soon as administratively practicable after the Participant’s Disability.



     6.5. Death. Upon the death of a Participant, the Employer shall pay to the
Participant’s Beneficiary the balance in his or her Account in the form of a lump sum payment, with
such payment to be made as soon as practicable after the Participant’s death as determined by the
Plan Administrator. Upon the death of a Participant after installment benefit payments have
commenced, the Participant’s Beneficiary shall receive the remaining unpaid balance in the
Participant’s Account in the form of a lump sum payable as soon as administratively practicable
after the Participant’s death.



     6.6. Unforeseeable Emergency. Upon a finding that a Participant has suffered an
Unforeseeable Emergency, the Plan Administrator may, in its sole discretion, make distributions
from the Participant’s Elective Deferral Account and/or from the vested balance of the
Participant’s Company Contribution Account. A Participant requesting a distribution as a result of
an Unforeseeable Emergency shall apply in writing to the Plan Administrator and shall provide such
additional information as the Plan Administrator may require. The amount of the withdrawal shall
be limited to the amount necessary to satisfy such emergency plus amounts necessary to pay taxes
reasonably anticipated as a result of the distribution, after taking into account the extent to
which such hardship is or may be relieved through reimbursement or compensation by insurance or
otherwise or by liquidation of the participant’s assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship). Upon requesting a distribution due to an
Unforeseeable Emergency, the Participant shall be required to change the investment direction of
the Participant’s Accounts to the most conservative Measurement Fund.
Immediately following a distribution due to an Unforeseeable Emergency, or the determination
by the Plan Administrator not to authorize the distribution, the Participant may change the
investment direction pursuant to Section 5.5. If a distribution is made due to an Unforeseeable
Emergency in accordance with this Section 6.6, the Participant’s deferrals under this Plan shall
cease for the remainder of the Deferral Period in which the distribution occurs. Any resumption of
the Participant’s deferrals under this Plan shall be made only at the election of the Participant
in accordance with Article III herein.



10









 





     6.7. Change in Election. A Participant may change the payment date and/or the form of
an existing payment election made under Section 6.2 for a Plan Year by filing a new payment
election, in the form specified by the Plan Administrator, at least twelve (12) months prior to the
original payment date (in the case of installment payments, the date of the first scheduled
installment payment), provided that such new election delays the payment year by at least five (5)
years from the original payment year. In no event shall the new payment election take effect until
at least twelve (12) months after the date on which the election is made. A Participant may not
change the payment date or form of payment with respect to any Accounts payable at Retirement, once
elected.



     6.8. Small Accounts. Notwithstanding any election made under this Plan, if the total
value of the Participant’s Account on the Participant’s Retirement date or any subsequent payment
date does not exceed the limit imposed by Code Section 402(g) in effect on such date, then the
Participant’s Account shall be paid to the Participant in one lump sum as soon as practicable after
the date on which such Account would otherwise have been paid, in accordance with the Participant’s
election.



     6.9. Valuation of Payments. Any lump sum benefit owed under this Article VI shall be
payable in an amount equal to the value of the Participant’s Accounts (or relevant portion thereof)
as of the most recent Valuation Date in the year in which payment is to be made. The first annual
installment payment in a series of installment payments shall be equal to (i) the value of the
Participant’s Accounts (or relevant portion thereof) as of the most recent Valuation Date, divided
by (ii) the number of installment payments elected by the Participant. The remaining installments
shall be paid in an amount equal to the value of such Accounts (or relevant portion thereof) as of
the most recent Valuation Date, divided by the number of remaining unpaid installment payments.



     6.10. Delay of Payment for Specified Employees. Notwithstanding any provision of this
Plan to the contrary, in the case of any Participant who is a “specified employee” within the
meaning of Code Section 409A(a)(2)(B)(i), no distribution under this Plan may be made, or may
commence, before the Valuation Date immediately following the date that is 6 months after the date
of such Participant’s “separation from service” within the meaning of Code Section
409A(a)(2)(A)(i).



     6.11. Effect of Code Section 4999. Notwithstanding any other provision of this Plan
to the contrary, if any payments or any acceleration of the payments made to a Participant from his
Company Contribution Account, alone or together with any other compensation or benefit a
Participant has received or may receive, would result in the Participant’s being subject to an
excise tax under Section 4999 of the Code, the amount payable hereunder may be reduced
or deferred to the extent necessary to ensure that no payment or distribution by the Employer
or any other person to or for the benefit of the Participant will be subject to the excise tax
imposed by Section 4999. Such reduction or deferral shall only be made in compliance with Code
Section 409A.



     6.12. Effect of Payment. The full payment of the applicable benefit under this
Article VI shall completely discharge all obligations on the part of the Employer to the
Participant (and



11









 




each Beneficiary) with respect to the operation of this Plan, and the
Participant’s (and Beneficiary’s) rights under this Plan shall terminate.




ARTICLE VII




Beneficiary Designation




     7.1. Beneficiary Designation. Subject to Section 7.3, each Participant shall have the
right, at any time, to designate one (1) or more persons or an entity as Beneficiary (both primary
as well as contingent) to whom benefits under this Plan shall be paid in the event of such
Participant’s death prior to complete distribution of the Participant’s Accounts. Each Beneficiary
designation shall be in a written form prescribed by the Plan Administrator and shall be effective
only when filed with the Plan Administrator during the Participant’s lifetime.



     7.2. Changing Beneficiary. Subject to Section 7.3, any Beneficiary designation may be
changed by a Participant without the consent of the previously named Beneficiary by the filing of a
new Beneficiary designation with the Plan Administrator. The filing of a new properly completed
Beneficiary designation shall cancel all Beneficiary designations previously filed.



     7.3. Community Property. If the Participant resides in a community property state,
any Beneficiary designation shall be valid or effective only as permitted under applicable law.



     7.4. No Beneficiary Designation. If any Participant fails to designate a Beneficiary
in the manner provided in Section 7.1, if the Beneficiary designation is void under Section 7.3,
or if the Beneficiary designated by a deceased Participant dies before the Participant or before
complete distribution of the Participant’s Accounts, the Participant’s Beneficiary shall be the
person in the first of the following classes in which there is a survivor:



          (a) The Participant’s spouse;




          (b) The Participant’s children in equal shares, except that if any of the children predeceases
the Participant but leaves issue surviving, then such issue shall take, by right of representation,
the share the parent would have taken if living; or




          (c) The Participant’s estate.




     7.5. Effect of Payment. Payment to the deemed Beneficiary shall completely discharge
the Employer’s obligations under this Plan.



ARTICLE VIII




Administration




     8.1. Plan Administrator. The Plan Administrator shall be a committee or entity
appointed by the Company to administer the Plan. The Plan Administrator shall have full
discretionary power and authority to interpret the Plan, to prescribe, amend and rescind any rules,
forms and procedures as it deems necessary or appropriate for the proper administration of the Plan
and to make any other determinations, including factual determinations, and take such



12









 




other actions
as it deems necessary or advisable in carrying out its duties under the Plan. If the Company fails
to appoint a Plan Administrator, the Company shall serve as the Plan Administrator.




     8.2. Agents. The Plan Administrator may, from time to time, employ agents and
delegate to them such administrative duties as it sees fit, and may, from time to time, consult
with counsel who may be counsel to the Employer.



     8.3. Binding Effect of Decisions. All decisions and determinations by the Plan
Administrator shall be final, conclusive and binding on the Employer, Participants, Beneficiaries
and any other persons having or claiming an interest hereunder.



     8.4. Indemnification of Plan Administrator. The Company shall indemnify and hold the
Plan Administrator harmless against any and all claims, loss, damage, expense or liability arising
from any action or failure to act with respect to this Plan due to the Plan Administrator’s service
as such, except in the case of gross negligence or willful misconduct by the Plan Administrator or
as expressly provided by statute.



ARTICLE IX




Claims Procedures




     9.1. Claim. A Participant who believes that he or she is being denied a benefit to
which he or she is entitled under the Plan may file a written request for such benefit with the
Plan Administrator, setting forth his or her claim for benefits.



     9.2. Claim Decision Not Involving Determination of Disability. The Plan Administrator
shall reply to any claim filed under Section 9.1 that does not involve a determination of
disability within a reasonable period of time, but not later than 90 days of receipt of such claim,
unless it determines that special circumstances require an extension of time, not to exceed an
additional 90 days, for processing the claim. Written notice of such extension, indicating the
special circumstances requiring an extension of time and the date by which the Plan Administrator
expects to render a decision on such claim, shall be provided to the Participant before the
expiration of the original 90-day period. If the claim is denied in whole or in part, such reply
shall include a written explanation, using language calculated to be understood by the Participant,
setting forth:



          (a) the specific reason or reasons for such denial;




          (b) the specific reference to relevant provisions of this Plan on which such denial is based;




          (c) a description of any additional material or information necessary for the Participant to
perfect his or her claim and an explanation why such material or such information is necessary;




          (d) appropriate information as to the steps to be taken if the Participant wishes to submit
the claim for review;





13









 








          (e) the time limits for requesting a review under Section 9.4 and for review under Section 9.5
hereof; and




          (f) the Participant’s right to bring an action for benefits under Section 502 of ERISA
following an adverse decision on review.




     9.3. Claim Decision Involving Determination of Disability. The Plan Administrator
shall reply to any claim filed under Section 9.1 that involves a determination of Disability within
a reasonable period of time, but not later than 45 days of receipt of such claim, unless it
determines that an extension of time, not to exceed an additional 30 days, is necessary due to
matters beyond the control of the Plan. Written notice of such extension, indicating the
circumstances requiring the extension of time and the date by which the Plan Administrator expects
to render a decision on such claim, shall be provided to the Participant before the expiration of
the original 45-day period. If, prior to the end of the first 30-day extension period, the Plan
Administrator determines that, due to matters beyond the control of the Plan, a decision cannot be
rendered within that extension period, the period for making a decision shall be extended for up to
an additional 30 days. Written notice of such extension, indicating the circumstances requiring
the extension of time and the date by which the Plan Administrator expects to render a decision on
such claim, shall be provided to the Participant before the expiration of the first 30-day
extension period. In the case of a first or second 30-day extension period, the notice informing
the Participant of such extension period shall also specifically explain the standards on which
entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim, and
the additional information needed to resolve those issues. The Participant shall be afforded at
least 45 days within which to provide the specified information. If the Participant provides
insufficient information or files an incomplete claim, the time for making a decision is tolled
(suspended) from the date the Plan Administrator provides the Participant notice of an extension
until the date it receives the Participant’s response to the request for additional information.
If the claim is denied in whole or in part, such reply shall include a written explanation, using
language calculated to be understood by the Participant, setting forth:



          (a) the specific reason or reasons for such denial;




          (b) the specific reference to relevant provisions of this Plan on which such denial is based;




          (c) a description of any additional material or information necessary for the Participant to
perfect his or her claim and an explanation why such material or such information is necessary;




          (d) appropriate information as to the steps to be taken if the Participant wishes to submit
the claim for review;




          (e) the time limits for requesting a review under Section 9.4 and for review under Section 9.6
hereof;




          (f) the Participant’s right to bring an action for benefits under Section 502 of ERISA
following an adverse decision on review;





14









 








          (g) if an internal rule, guideline, protocol, or other similar criterion was relied upon in
making the adverse decision, either the specific rule, guideline, protocol, or other similar
criterion; or a statement that such a rule, guideline, protocol, or other similar criterion was
relied upon in making the adverse decision and that a copy of such rule, guideline, protocol, or
other criterion will be provided free of charge to the Participant upon request; and




          (h) if the adverse decision is based on a medical necessity or experimental treatment or
similar exclusion or limit, either an explanation of the scientific or clinical judgment for the
determination, applying the terms of the plan to the claimant’s medical circumstances, or a
statement that such explanation will be provided free of charge upon request.




     9.4. Request for Review. Within 60 days after the receipt by the Participant of the
written explanation described in Section 9.2 above (in the case of a claim decision not involving a
determination of Disability), or within 180 days after the receipt by the Participant of the
written explanation described in Section 9.3 above (in the case of a claim decision involving a
determination of Disability), the Participant may request in writing that the Plan Administrator
review its determination. The Participant or his or her duly authorized representative shall be
provided, upon request and free of charge, reasonable access to, and copies of, all documents,
records and other information relevant to the Participant’s claim for benefits and may submit
written comments, documents, records and other information relating to the claim for benefits for
consideration by the Plan Administrator. If the Participant does not request a review of the
initial determination within such 60-day or 180-day period, as the case may be, the Participant
shall be barred and estopped from challenging the determination.



     9.5. Review of Decision Not Involving Determination of Disability. After considering
all materials presented by the Participant with respect to a request for review of a claim decision
not involving a determination of Disability, the Plan Administrator will render a written decision,
setting forth



          (a) the specific reasons for the decision;




          (b) specific references to the relevant provisions of this Plan on which the decision is
based;




          (c) a statement that the Participant 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
Participant’s claim for benefits; and




          (d) the Participant’s right to bring an action for benefits under Section 502 of ERISA.



The decision on review shall be communicated to the Participant within a reasonable period of time,
but not later than 60 days after the Plan Administrator’s receipt of the Participant’s request for
review. If the Plan Administrator determines that special circumstances require an extension of
time for processing the claim, written notice shall be furnished to the Participant prior to the
expiration of the initial 60-day period, which notice shall indicate the special circumstances
requiring an extension of time and the date, not later than 60 days after the expiration of the






15









 







initial 60-day period, by which the Plan Administrator expects to render the decision on review.
All decisions on review shall be final and shall bind all parties concerned.




     9.6. Review of Decision Involving Determination of Disability. The review of a claim
decision involving a determination of Disability shall not afford deference to the initial adverse
decision and shall be conducted by an appropriate named fiduciary of the Plan who is neither the
individual who made the initial adverse decision that is the subject of the request for review, nor
the subordinate of such individual. If the initial adverse decision was based in whole or in part
on a medical judgment, the appropriate named fiduciary shall consult with a health care
professional who has appropriate training and experience in the field of medicine involved in the
medical judgment. Any health care professional engaged for purposes of such consultation shall be
an individual who is neither an individual who was consulted in connection with the adverse
decision that is the subject of the request for review, nor the subordinate of any such individual.
The Plan Administrator shall identify medical or vocational experts whose advice was obtained on
behalf of the Plan in connection with the Participant’s adverse decision, without regard to whether
the advice was relied upon in making the claim decision. After considering all materials presented
by the Participant with respect to a request for review of a claim involving a determination of
Disability, the Plan Administrator will render a written decision, setting forth



          (a) the specific reasons for the decision;




          (b) the specific reference to relevant provisions of this Plan on which the decision is based;




          (c) a statement that the Participant 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
Participant’s claims for benefits;




          (d) a statement of the Participant’s right to bring an action for benefits under Section 502
of ERISA;




          (e) if an internal rule, guideline, protocol, or other similar criterion was relied upon in
making the adverse decision, either the specific rule, guideline, protocol, or other similar
criterion; or a statement that such rule, guideline, protocol, or other similar criterion was
relied upon in making the adverse decision and that a copy of the rule, guideline, protocol, or other
similar criterion will be provided free of charge to the Participant upon request;




          (f) if the adverse decision is based on a medical necessity or experimental treatment or
similar exclusion or limit, either an explanation of the scientific or clinical judgment for the
decision, applying the terms of the Plan to the Participant’s medical circumstances, or a statement
that such explanation will be provided free of charge upon request; and




          (g) the following statement: “You and your Plan may have other voluntary alternative dispute
resolution options, such as mediation. One way to find out what may be available is to contact
your local U.S. Department of Labor Office and your State insurance regulatory agency.”






16









 







The decision on review shall be communicated to the Participant within a reasonable period of time,
but not later than 45 days after the Plan Administrator’s receipt of the Participant’s request for
review. If the Plan Administrator determines that special circumstances require an extension of
time for processing the claim, written notice shall be furnished to the Participant prior to the
expiration of the initial 45-day period, which notice shall indicate the special circumstances
requiring an extension of time and the date, not later than 45 days after the expiration of the
initial 45-day period, by which the Plan Administrator expects to render the decision on review.
All decisions on review shall be final and shall bind all parties concerned.




ARTICLE X




Miscellaneous




     10.1. Unfunded Plan. This Plan is intended to be an unfunded plan maintained
primarily to provide deferred compensation benefits for a select group of “management or highly
compensation employees” within the meaning of Sections 201, 301, and 401 of the Employee Retirement
Income Security act of 1974, as amended (“ERISA”), and therefore to be exempt from the provisions
of Parts 2, 3, and 4 of Title I of ERISA. Accordingly, the Plan shall terminate and no further
benefits shall be paid hereunder if it is determined by a court of competent jurisdiction or by an
opinion of counsel that the Plan constitutes an employee pension benefit plan within the meaning of
Section 3(2) of ERISA which is not so exempt.



     10.2. Unsecured General Creditor. Participants and their Beneficiaries, heirs,
successors, and assigns shall have no legal or equitable rights, interest or claims in any property
or assets of the Employer, nor shall they be Beneficiaries of, or have any rights, claims or
interests in any life insurance policies, annuity contracts, or the proceeds therefrom owned or
which may be acquired by the Employer. Except as may be provided in Section 10.3, such policies,
annuity contracts or other assets of the Employer shall not be held under any trust for the benefit
of Participants, their Beneficiaries, heirs, successors or assigns, or held in any way as
collateral security for the fulfilling of the obligations of the Employer under this Plan. Any and
all of the Employer’s assets and policies shall be, and remain, the general, unpledged,
unrestricted assets of the Employer. The Employer’s obligation under the Plan shall be that of an
unfunded and unsecured promise to pay money in the future.



     10.3. Trust Fund. The Employer shall be responsible for the payment of all benefits
provided under the Plan. At its discretion, the Employer may establish one or more trusts, with
such trustees as the Board may approve, for the purpose of providing for the payment of such
benefits. Such trust or trusts may be irrevocable, but the assets thereof shall be subject to the
claims of the Employer’s creditors. To the extent any benefits provided under the Plan are actually
paid from any such trust, the Employer shall have no further obligation with respect thereto, but
to the extent not so paid, such benefits shall remain the obligation of, and shall be paid by, the
Employer.



     10.4. Protective Provisions. Each Participant and Beneficiary shall cooperate with
the Plan Administrator by furnishing any and all information requested by the Plan Administrator in
order to facilitate the payment of benefits hereunder. Such cooperation includes providing consent
to being insured under a Company owned life insurance policy in which the Company is



17









 




the policy beneficiary. If a Participant or Beneficiary refuses to cooperate with the Plan Administrator, the
Employer shall have no further obligation to the Participant or Beneficiary under the Plan, other
than payment of the then-current balance of the Participant’s Accounts in accordance with prior
elections.




     10.5. Inability to Locate Participant or Beneficiary. If the Plan Administrator is
unable to locate a Participant or Beneficiary within two years following the date the Participant
was to commence receiving payment, the entire amount allocated to the Participant’s Account shall
be forfeited. If, after such forfeiture, the Participant or Beneficiary later claims such benefit,
such benefit shall be reinstated without interest or earnings from the date payment was to commence
pursuant to Article VI.



     10.6. No Contract of Employment. Neither the establishment of the Plan, nor any
modification thereof, nor the creation of any fund, trust or account, nor the payment of any
benefits shall be construed as giving any Participant or any person whosoever, the right to be
retained in the service of the Employer, and all Participants and other employees shall remain
subject to discharge to the same extent as if the Plan had never been adopted.



     10.7. Withholding Taxes. The Plan Administrator and the Employer may make such
provisions and take such action as it may deem necessary or appropriate for the withholding of any
taxes which the Employer is required by any law or regulation of any governmental authority,
whether federal, state or local, to withhold in connection with any contributions or benefits under
the Plan, including, but not limited to, the withholding of appropriate sums from any amount
otherwise payable to the Participant (or his or her Beneficiary). Each Participant, however, shall
be responsible for the payment of all individual tax liabilities relating to any such benefits.



     10.8. No Limitation on Employer Actions. Nothing contained in the Plan shall be
construed to prevent the Employer from taking any action which is deemed by it to be appropriate or
in its best interest. No Participant, Beneficiary, or other person shall have any claim against
the Employer as a result of such action.



     10.9. Obligations to Employer. If a Participant becomes entitled to a payment of
benefits under the Plan, and if at such time the Participant has out-standing any debt, obligation,
or other liability representing an amount owing to the Employer, then the Employer may offset
such amount owed to it against the amount of benefits otherwise distributable. Such determination
shall be made by the Plan Administrator in its sole discretion.



     10.10. No Liability for Action or Omission. Neither the Company nor any director,
officer or employee of the Company shall be responsible or liable in any manner to any Participant,
Beneficiary or any person claiming through them for any benefit or action taken or omitted in
connection with the granting of benefits, the continuation of benefits, or the interpretation and
administration of this Plan.



     10.11. Nonalienation of Benefits. Except as otherwise specifically pro-vided herein,
all amounts payable hereunder shall be paid only to the person or persons designated by the Plan
and not to any other person or corporation. No part of a Participant’s Account shall be liable for



18









 




the debts, contracts, or engagements of any Participant, his or her Beneficiary, or successors in
interest, nor shall such accounts of a Participant be subject to execution by levy, attachment, or
garnishment or by any other legal or equitable proceeding, nor shall any such person have any right
to alienate, anticipate, commute, pledge, encumber, or assign any benefits or payments hereunder in
any manner whatsoever. If any Participant, Beneficiary or successor in interest is adjudicated
bankrupt or purports to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge
any payment from the Plan, voluntarily or involuntarily, the Plan Administrator, in its discretion,
may cancel such payment (or any part thereof) to or for the benefit of such Participant,
Beneficiary or successor in interest in such manner as the Plan Administrator shall direct.
Notwithstanding the foregoing, all or a portion of a Participant’s Account may be awarded to an
“alternate payee” (within the meaning of Section 206(d)(3)(K) of ERISA) if and to the extent so
provided in a judgment, decree or order that, in the Plan Administrator’s sole discretion, would
meet the applicable requirements for qualification as a “qualified domestic relations order”
(within the meaning of Section 206(d)(3)(B)(i) of ERISA) if the Plan were subject to the provisions
of Section 206(d) of ERISA.




     10.12. Liability for Benefit Payments. The obligation to pay or provide for payment
of a benefit hereunder to any Participant or his or her Beneficiary shall, at all times, be the
sole and exclusive liability and responsibility of the Company.



     10.13. Governing Law. This Plan shall be construed in accordance with and governed by
the laws of the State of Ohio to the extent not superseded by federal law, without reference to the
principles of conflict of laws.



     10.14. Severability of Provisions. If any provision of this Plan shall be held
invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions
hereof, and this Plan shall be construed and enforced as if such provisions had not been included.



     10.15. Headings and Captions. The headings and captions herein are provided for
reference and convenience only, shall not be considered part of the Plan, and shall not be employed
in the construction of the Plan.



     10.16. Gender, Singular and Plural. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons
may require. As the context may require, the singular may read as the plural and the plural
as the singular.



     10.17. Participating Employers. If any affiliated or subsidiary entity wishes to
adopt the Plan as an Employer for the benefit of its employees, it shall execute a Participation
Agreement or perform any other act as required by the Plan Administrator.



     10.18. Notice. Any notice or filing required or permitted to be given to the Plan
Administrator under the Plan shall be sufficient if in writing and hand delivered, or sent by
registered or certified mail, to the Plan Administrator, DSW Inc. Nonqualified Deferred
Compensation Plan, c/o DSW Inc. HR Benefits, DSW Inc., 810 DSW Drive, Columbus, Ohio 43219, or to
such other person or entity as the Plan Administrator may designate from time to



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time. Such notice shall be deemed given as to the date of delivery, or, if delivery is made by mail, as of the date
shown on the postmark on the receipt for registration or certification.




     10.19. Amendment and Termination. The Plan may be amended, suspended, or terminated
at any time by Company or by the Plan Administrator in its sole discretion; provided, however, that
no such amendment, suspension or termination shall result in any reduction in the value of a
Participant’s Accounts determined as of the effective date of such amendment. In addition, the
Plan, and/or the terms of any election made hereunder, may be amended at any time and in any
respect by Company or by the Plan Administrator if and to the extent recommended by counsel in
order to conform to the requirements of Code Section 409A and regulations thereunder. In the event
of any suspension or termination of the Plan, payment of Participants’ Accounts shall be made under
and in accordance with the terms of the Plan and the applicable elections (except that the Plan
Administrator may determine, in its sole discretion, to accelerate payments to all Participants if
and to the extent that such acceleration is permitted under Code Section 409A and regulations
thereunder).




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