Exhibit 10.13


 


NATIONAL MENTOR, INC. EXECUTIVE DEFERRAL PLAN


 


Effective as of November 1, 2003


 


 


ARTICLE 1: Establishment and Purpose


 


1.1           Establishment.  National Mentor, Inc. (the “Company”)
hereby establishes the National Mentor, Inc. Executive Deferral Plan (the “Plan”),
effective as of October 1, 2003.


 


1.2           Purpose.  The purpose of the Plan is to permit
designated executives of the Company to accumulate additional retirement income
through a nonqualified deferred compensation plan that enables them to make
Elective Deferrals in excess of those permitted under the Mentor Networks
401(k) Retirement Plan and to receive matching contributions that are otherwise
precluded by the provisions of that plan or by applicable law.  This Plan is intended to be unfunded and
maintained by the Company primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
within the meaning of §§201(2), 301(a)(3) and 401(a)(1) of the
Employee Retirement Income Security Act of 1974 (“ERISA”).


 


ARTICLE 2: Participation


 


2.1           Commencement of
Participation.  An Eligible
Employee will become a Participant on the earliest Entry Date on which he or
she (i) is eligible to participate in the Qualified Plan, (ii) is
designated as a Participant by written action of the Committee, and (iii) executes
and delivers a valid Salary Reduction Agreement to the Committee.


 


2.2           Cessation of Participation.  If a Participant ceases to satisfy any of the
conditions of Section 2.1, his or her participation in this Plan
immediately terminates, except that the Participant’s Account will continue to
be held for his or her benefit and will be distributed to him or her in
accordance with Article 7.  A former
Participant may resume participation as of any Entry Date on which he or she
again satisfies the conditions of Section 2.1.


 


ARTICLE 3: Accounts


 


3.1           Establishment of Accounts.  The Company hereby establishes, for each
Participant (i) a Salary Reduction Accrual Account (for the purpose of
recording the current value of his or her Salary Reduction Accruals) and (ii) a
Matching Contribution Accrual Account (for the purpose of recording the value
of his or her Matching Contribution Accruals). 
All Accounts are established and maintained for the purpose of
reflecting the liability of the Company to Participants.  The Company is under no obligation to
segregate any assets to provide for the liabilities reflected by these
Accounts.  If the Company elects to
segregate assets pursuant to Section 4.4, the Funding Vehicle must
establish and maintain separate Salary Reduction Accrual Accounts and Matching
Contribution Accrual Accounts.


 

















 


3.2           Valuation of Accounts.  All Accounts must be valued as of each
Allocation Date and as of any other Valuation Date designated by the Committee.


 


ARTICLE 4: Accrual of Benefits


 


4.1           Types of Contribution.  For any Plan Year, Participants will accrue
benefits in the manner described in this Section 4.1.


 


(a)            For each Plan Year,
the Company will credit each Participant’s Salary Reduction Accrual Account
with the amount specified in his or her Salary Reduction Agreement for such
year.


 


(b)           For each Plan Year,
the Company will credit Matching Contribution Accruals to the Matching
Contribution Accrual Account of each Participant in an amount equal to the “matching
contribution rate” (as defined below) multiplied by the portion of such
Participant’s Salary Reduction Accrual not in excess of the then current
limitation under Code Section 402(g). 
For purposes of this Section 4.1(b), the phrase, “matching
contribution rate” means the contribution rate and compensation percentage
limits for matching contributions under the Qualified Plan for the Plan Year.


 


(c)            In addition to the
mandatory Matching Contribution Accruals described in Section 4.1(b), the
Company may credit additional Matching Contribution Accruals to the Matching
Contribution Accrual Accounts of all Participants in any Plan Year at such
rate, and at such times, as the Board determines in the sole exercise of its
discretion.


 


4.2           Timing of Accruals.  Salary Reduction Accruals under Section 4.1(a) are
deemed to accrue on the date on which the Participant would otherwise have
received the Compensation that he or she elected to defer.  Matching Contribution Accruals described in Section 4.1(b) are
deemed to accrue on the date of the Salary Reduction Accruals to which they
relate.  Matching Contribution Accruals
described in Section 4.1(c) are deemed to accrue on the date
designated (or, if no accrual date is specified, then on the date voted) by the
Board.


 


4.3           Salary Reduction
Agreements


 


(a)            By executing a
Salary Reduction Agreement with respect to a Plan Year, a Participant may elect
to have Salary Reduction Accruals credited under the Plan on his or her
behalf.  The current salary and bonus of
a Participant who executes a Salary Reduction Agreement will be reduced by the
amount specified in the election, and an equal amount will be credited to and
accrue under the Plan in accordance with Section 4.1.  Salary Reduction Agreements must separately
designate the amount of reduction of Compensation to be taken from base salary
and bonuses for the Plan Year. 
Reductions may be expressed as a percentage or dollar amount of salary
or bonuses.  Salary Reduction
Contributions may not be made with respect to Compensation other than salary
and bonuses.  A Salary Reduction
Agreement becomes irrevocable as of the date specified in Section 4.3(b).


 


(b)           A Salary Reduction
Agreement with respect to any Plan Year after the Plan’s initial year must be
executed no later than the last day of the preceding Plan Year.  A Salary Reduction Agreement for the initial
Plan Year must be executed before the Effective


 


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Date. 
No Salary Reduction Agreement may be amended or revoked after the last
day on which it could have been executed, except that an agreement is
automatically revoked if the Participant who executed it ceases to be eligible
to participate in the Plan.  An employee
who first becomes an Eligible Employee within a Plan Year may execute a Salary
Reduction Agreement to become effective upon the next Entry Date.


 


(c)            With respect to any
Plan Year, the amount deferred by a Participant in accordance with Section 4.3
may not exceed 100% of his or her Compensation for the year, less his or her
salary reduction contributions under the Qualified Plan and any other of the
Company’s fringe or other benefit plans.


 


4.4           Contributions to Funding
Vehicle.  The Company may, but
is not required to, establish and make contribution of any or all amounts
accrued under Section 4.1 to a Funding Vehicle.  Contributions will be credited with income,
expense, gains and losses in accordance with the investment experience of the
Funding Vehicle.  The Committee may
permit Participants to direct the allocation of their Account balances among
these funds established with a Funding Vehicle in accordance with rules prescribed
by the Committee.  The Committee may
alter the available funds or the procedures for allocating Account balances
among them at any time.


 


4.5           Status of the Funding
Vehicle.  Despite any other
provision of this Plan, all assets held in a Funding Vehicle (including any
insurance policy established or acquired for funding purposes) will at all
times be and remain the property of the Company and subject to the claims of
the Company’s creditors.  No Participant
will have any priority claim on, or security interest or other right in, any
such assets or insurance policy that is superior to the rights of the Company’s
general creditors.


 


4.7           Non-alienability.  A Participant’s rights under this Plan may
not be voluntarily or involuntarily assigned or alienated.  If a Participant attempts to assign his or
her rights or enters into bankruptcy proceedings, his or her right to receive
payments under the Plan will terminate, and the Committee may apply them in
whatever manner will, in its judgment, serve the best interests of the
Participant.


 


ARTICLE 5: Vesting


 


Vesting
Standards.  A
Participant’s interest in his or her Salary Reduction Accrual Account and
Matching Contribution Accrual Account is fully vested at all times.


 


ARTICLE 6: Transfers and Adjustments


 


6.1           Transfers to Qualified
Plan.  As soon as practicable
after the end of each Plan Year, the Committee will determine (on a percentage
basis) each Participant’s “transfer amount,” which equals the excess of (i) the
Elective Deferrals that the Participant could have made under the Qualified
Plan without causing elective deferrals and matching contributions under the Qualified
Plan to exceed the limitations of Code §§401(k)(3), 402(g), or §401(m)(2) of
the Code, over (ii) any elective deferrals he or she actually contributed
directly to the Qualified Plan for such year. 
No later than two and one-half (21⁄2) months after the end of each Plan
Year, each Participant’s Salary Reduction Accrual Account will be debited by
his or her transfer amount,


 


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and the Company will transfer a like amount
to the Participant’s elective deferral account under the Qualified Plan.  The Company shall have no discretion to
retain the transfer amount in this Plan or to modify the calculation of the
transfer amount for any Participant.


 


6.2           Debit to Matching
Contribution Accrual Account. 
Each Participant’s Matching Contribution Accrual Account will be reduced
by an amount equal to the matching contributions made on his behalf under the
Qualified Plan on account of the transfer amount.


 


ARTICLE 7: Distributions


 


7.1           Distributions.


 


(a)            The vested portion
of a Participant’s Account will be distributed to him or her as a result of (i) his
or her Termination of Employment for any purpose (including his or her Normal
Retirement Date or Early Retirement Date), (ii) his or her death or
Disability, or (iii) the termination of the Plan, whichever first
occurs.  Vesting will be determined in
the manner prescribed by Article 5, and the dollar amount of the
distribution will be determined as of the Valuation Date coincident with or
first preceding the date of distribution.


 


(b)           Distributions to a
Participant or, in the case of a Participant’s death, his or her Beneficiary,
will be made or commence to be made at the Participant’s election either (i) in
cash, in a single lump sum, or (ii) in substantially equal monthly
installments for either 5 years (60 installments) or 10 years (120
installments).  The Participant must make
his or her election regarding the form of distribution under this Section 7.1
when the Participant first commences or resumes Participation in the Plan.  A Participant may change his or her election
as to the form of distribution under the first sentence of this Section 7.1(b) by
filing and amended election form with the Committee, but not such change may be
made at any time during the 12-month period ending on the date that
distributions commence.


 


(c)            All distributions
from the Plan to Participants and Beneficiaries must be made within a
reasonable time following the occurrence of the event that triggers the
distribution and will be made in cash, unless the Committee determines that
other property should be distributed.


 


7.2           Manner of Distribution to
Minors or Incompetents.  If at
any time any distributee is, in the judgment of the Committee, legally,
physically or mentally incapable of receiving any distribution due to him or
her, the distribution will be made to the guardian or legal representative of
the distributee, or, if none exists, to any other person or institution that,
in the Committee’s judgment, will apply the distribution in the best interests
of the intended distributee.


 


7.3           Election of Beneficiary


 


(a)           When an Eligible
Employee qualifies for participation in the Plan, the Committee will provide
him or her with a Beneficiary designation form for the purpose of designating
one or more Beneficiaries and successor Beneficiaries.  A Participant may change his Beneficiary
designation at any time by filing the prescribed form with the Committee.  The consent of the Participant’s current
Beneficiary is not required for a change of Beneficiary and no


 


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Beneficiary has any rights under this Plan
except as provided by its terms.  The
rights of a Beneficiary who predeceases the Participant will terminate as of
the Beneficiary’s death.


 


(b)           Unless a different
Beneficiary has been designated in accordance with Section 7.3(a), the
Beneficiary of any Participant who is lawfully married on the date of his death
is his surviving spouse.  The Beneficiary
of any other Participant who dies without having designated a Beneficiary is
his estate.


 


7.4           Unforeseeable Emergencies.  A Participant may request a withdrawal of all
or a portion of his or her Account derived from Salary Reduction Accruals (but
not from Matching Accruals) as necessary to satisfy an immediate and heavy
financial need in the case of an Unforeseeable Emergency.  For purposes of this Section 7.4, “Unforeseeable
Emergency” means a severe financial hardship to the Participant resulting from
a sudden and unexpected illness or accident of the Participant or of a
dependent 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.  The circumstances that will constitute an
Unforeseeable Emergency will depend upon the facts of each case, but, in any
case, payment may not be made in the event that the resulting financial
hardship is or may be relieved (i) through reimbursement or compensation
by insurance or otherwise, or (ii) by liquidation of the Participant’s
assets, to the extent that liquidation of such assets would not itself cause
severe financial hardship.  The need to
send a Participant’s child to college or the desire to purchase a home will not
be an Unforeseeable Emergency.  The
Committee will determine the existence of an Unforeseeable Emergency and the
manner of withdrawal in accordance with applicable law.  Withdrawals made pursuant to this Section 7.4
will begin within 30 days after the date on which the Committee approves the
Participant’s request for withdrawal.


 


ARTICLE 8: Amendment or Termination of
the Plan


 


8.1           Company’s Right to Amend
Plan.  Subject to Section 8.2,
the Board of Directors may, at any time and from time to time, amend, in whole
or in part, any of the provisions of this Plan or may terminate it as a whole
or with respect to any Participant or group of Participants.  Any such amendment is binding upon all
Participants, Beneficiaries, the Committee and all other parties in interest.  A resolution amending or terminating the Plan
becomes effective as of the date specified therein.


 


8.2           Restriction on Retroactive
Amendments.  No amendment may
retroactively deprive a Participant of any benefit accrued under the Plan
before the date of the amendment.


 


ARTICLE 9: Plan Administration


 


9.1           The Committee.  A Committee consisting of one or more persons
appointed by the Board of Directors will administer the Plan.  The Board may remove any member of the
Committee at any time, with or without cause, and may fill any vacancy.  If a vacancy occurs, the remaining member or
members of the Committee have full authority to act.  Any member of the Committee may resign by delivering
his or her written resignation to the Board and the Committee.  Any such resignation will become effective
upon its receipt by the Board or on such other date as is agreed to by the
Board and the resigning Committee member. 
The Committee


 


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acts by a majority of its members at the time
in office and may take action either by vote at a meeting or by consent in
writing without a meeting.  The Committee
may adopt such rules as it deems desirable for the conduct of its affairs
and the administration of the Plan.


 


9.2           Powers of the Committee.  In carrying out its duties with respect to
the general administration of the Plan, the Committee has, in addition to any
other powers conferred by the Plan or by law, the following; powers:


 


(i) To determine all questions relating
to eligibility to participate in the Plan;


 


(ii) To compute and certify the amount
and kind of distributions payable to Participants and their Beneficiaries;


 


(iii) To maintain all records necessary
for the administration of the Plan;


 


(iv) To interpret the provisions of the
Plan and to make and publish such rules for the administration of the Plan
as are not inconsistent with the terms thereof;


 


(v) To establish and modify the method
of accounting for the Plan;


 


(vi) To employ counsel, accountants and
other consultants to aid in exercising its powers and carrying out its duties
hereunder; and


 


(vii) To perform any other acts
necessary and proper for the administration of the Plan.


 


9.3           Indemnification.  The Company agrees to indemnify and hold
harmless each member of the Committee against any and all expenses and
liabilities arising out of his action or failure to act in such capacity,
excepting only expenses and liabilities arising out of his own willful
misconduct.  This right of
indemnification is in addition to any other rights to which any member of the
Committee may be entitled.  Liabilities
and expenses against which a member of the Committee is indemnified hereunder
include, without limitation, the amount of any settlement or judgment, costs,
counsel fees and related charges reasonably incurred in connection with a claim
asserted or a proceeding brought against him or the settlement thereof.  The Company may, at its own expense, settle
any claim asserted or proceeding brought against any member of the Committee
when such settlement appears to be in the best interests of the Company.


 


9.4           Claims Procedure.  If a dispute arises between the Committee and
a Participant or Beneficiary over the amount of benefits payable under the
Plan, the Participant or Beneficiary may file a claim for benefits by notifying
the Committee in writing of his claim. 
The Committee will review and adjudicate the claim.  If the claimant and the Committee are unable
to reach a mutually satisfactory resolution of the dispute, it will be submitted
to arbitration under the rules of the American Arbitration
Association.  Each Participant agrees, by
the execution of a Salary Reduction Agreement, that arbitration will be the
sole means of resolving disputes arising under the Plan and waives, on behalf
of himself and his Beneficiary, any fight to litigate any such dispute in a
court of law.


 


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9.5           Expenses of the Committee.  The members of the Committee serve without
compensation for services as such.  The
Company pays the expenses of the Committee.


 


9.6           Expenses of the Plan.  The Company pays the expenses of
administering the Plan.


 


ARTICLE 10: Definitions


 


10.1         Definitions.  As used in this Plan, the following
capitalized words and phrases have the meanings indicated, unless the context
requires a different meaning:


 


(a)            “Account” means amounts credited to
a Participant under the Plan, as described in Article 3.


 


(b)           “Allocation Date” means the last day
of each Calendar Quarter.


 


(c)            “Beneficiary” means the person or
persons designated by a Participant, or otherwise entitled, to receive any
amount credited to his Account that remains undistributed at his death.


 


(d)           “Board of Directors” or “Board” means
the board of directors of the Company.


 


(e)            “Code” means the Internal Revenue
Code of 1986 as amended.


 


(f)            “Committee” means the committee
appointed in accordance with Section 9.1 to administer the Plan.


 


(g)           “Company” means National Mentor, Inc.
and any subsidiaries, affiliates or successors.


 


(h)           “Compensation” means the aggregate
compensation paid to a Participant by the Company for a Plan Year, including
salary, overtime pay, commissions, bonuses and all other items that constitute
wages within the meaning of Code §3401(a) or are required to be reported
under Code §§6041(d), 6051(a)(3) or 6052. Compensation also includes
Salary Reduction Accruals under this Plan and any Elective Deferrals under
cash-or-deferred arrangements or cafeteria plans that are not includible in
gross income by reason of Code §125 or Code §402(a)(8) but does not
include any other amounts contributed pursuant to, or received under, this Plan
or any other plan of deferred compensation. 
Compensation excludes all stock option transactions, relocation
reimbursements, and automobile allowances.


 


(i)             “Disability” means a mental or
physical condition that, in the opinion of a licensed physician approved by the
Committee, renders a Participant permanently incapable of satisfactorily
performing his usual duties for the Company or the duties of such other
position as the Company may make available to him for which he is qualified by
reason of training, education or experience.


 


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(j)             “Early Retirement Date” means the
later of (i) the date on which a Participant attains age 591⁄2 or (ii) his
or her completion of ten (10) Years of Service.


 


(k)            “Effective Date” means October 1,
2003, the date on which this Plan went into effect.


 


(l)             “Eligible Employee” means an
employee of the Company who is a key member of the Company’s management or a
highly compensated employee within the meaning of ERISA §§201(2), 301(a)(3) and
401(a)(1).


 


(m)           “Entry Date” means the Effective Date
and each January 1st, April 1st, July 1st or October 1st
thereafter.


 


(n)           “Funding Vehicle” means a trust or
insurance polices which are established or acquired by the Company to hold
amounts accrued by the Company in accordance with Section 4.4.


 


(o)           “Matching Contribution Accrual” means
an amount credited to a Participant’s Account in accordance with Section 4.1(b).


 


(p)           “Matching Contribution Accrual
Account” means the account established to record Matching Contribution Accruals
on a Participant’s behalf.


 


(q)           “Normal Retirement Date” means a
Participant’s sixty-fifth (65th) birthday.


 


(r)            “Participant” means any Eligible
Employee who satisfies the conditions for participation in the Plan set forth
in Section 2.1.


 


(s)            “Plan” means the National Mentor, Inc.
Executive Deferral Plan, as set forth in this document and as amended from time-to-time.


 


(t)            “Plan Year” means the accounting
year of the Plan, which ends on December 31st.


 


(u)           “Qualified Plan” means the Mentor
Networks 401(k) Plan, as from time-to-time amended.


 


(v)           “Salary Reduction Accrual” means an
amount credited to the Salary Reduction Accrual Account pursuant to a Salary
Reduction Agreement.


 


(w)           “Salary Reduction Accrual Account”
means the account established to record Salary Reduction Accruals authorized by
Participants under the terms of this Plan.


 


(x)            “Salary Reduction Agreement” means
an agreement between a Participant and the Company, under which the Participant
agrees to a reduction in his Compensation and the Company agrees to credit him
with Salary Reduction Accruals under this Plan.


 


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(y)           “Termination of Employment” means a
Participant’s or former Participant’s separation from the service of the
Company (including all affiliates of the Company) by reason of his or her
resignation, retirement, discharge or death.


 


(z)            “Valuation Date” means any
Allocation Date and any other date as of which the value of Participants’
Accounts is determined.


 


ARTICLE 11: Miscellaneous


 


11.1         Plan Not a Contract of
Employment.  The adoption and
maintenance of the Plan does not constitute a contract between the Company and
any Participant and is not a consideration for the employment of any
person.  Nothing herein contained gives
any Participant the right to be retained in the employ of the Company or
derogates from the right of the Company to discharge any Participant at any
time without regard to the effect of such discharge upon his rights as a
Participant in the Plan.


 


11.2         Undefined Terms.  Unless the context clearly requires another
meaning, any term not specifically defined in this Plan is used in the sense
given to it by the Qualified Plan.


 


11.3         Headings.  The headings of Articles, Sections and
Subsections are for reference only and are not to be utilized in construing the
Plan.


 


11.4         Singular and Plural.  Unless clearly inappropriate, singular terms
refer also to the plural number and vice versa.


 


11.5         Severability.  If any provision of this Plan is held illegal
or invalid for any reason, the remaining provisions are to remain in full force
and effect and to be construed and enforced in accordance with the purposes of
the Plan as if the illegal or invalid provision did not exist.


 


11.6         No Additional Rights Under
Plan.  Nothing in this Plan,
express or implied, is intended, or shall be construed, to confer upon or give
to any person, firm, association, or corporation, other than the parties hereto
and their successors in interest, any right, remedy, or claim under or by
reason of this Plan or any covenant, condition, or stipulation hereof, and all
covenants, conditions and stipulations in this Plan, by or on behalf of any
party, are for the sole and exclusive benefit of the parties.


 


11.7         Governing Law.  The laws of the Commonwealth of Massachusetts
govern the construction and operation of this Plan.


 


EXECUTED this 3rd
day of September 2003.


 


	
   

  	
  National Mentor, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas J. McAuliffe

  	
   

  



 


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