NN EX 10.1 10Q 09-30-06


    EXHIBIT
      10.1

     

     

    
      NN,
        INC.

      ELECTIVE
        DEFERRED COMPENSATION PLAN

      


      Preamble

      


      This
        plan
        which shall be known as the NN, Inc. Elective Deferred Compensation Plan
        (the
“Plan”), is adopted as of the 1st
        day of
        January, 2005, by NN, Inc., a Tennessee corporation with principal offices
        and
        place of business at Building C, Suite 12, 2000 Waters Edge Drive, Johnson
        City,
        Tennessee 37604 (the “Company”). The Plan is an amendment and restatement of the
        NN, Inc. Elective Deferred Compensation Plan originally effected February
        26,
        1999 and subsequently amended effective January 1, 2002. The Company intends
        that the Plan shall at all times be administered and interpreted in such
        a
        manner as to constitute an unfunded Plan for the members of the Board of
        Directors of the Company who contribute materially to the continued growth
        of
        the Company, so as to qualify for all available exemptions from the provisions
        of Title I of ERISA.

      


      ARTICLE
        I

      ELIGIBILITY
        AND PARTICIPATION

      


      Section
        1
        .1     All outside members
        of the Board of Directors of the Company are eligible to become and remain
        participants in the Plan.

      


      Section
        1
        .2     The individuals
        described in Section 1.1 shall be eligible to participate in the Plan and
        may do
        so by filing a written election with the Company in the form attached or
        other
        form approved by the Company. In the first year in which a participant becomes
        eligible to participate in the Plan, the newly eligible participant may make
        an
        election to defer directors fees for services to be performed subsequent
        to the
        election within 30 days after the date the person becomes eligible. Except
        as
        otherwise provided herein, elections to defer payment of directors fees must
        be
        made before the beginning of the calendar year for which the directors fees
        are
        payable.

       

      Section
        1
        .3     For each individual
        electing to participate in the Plan, the Company shall establish and maintain
        a
        deferred compensation account. The amount of each participant's deferred
        compensation shall be credited to this account as of the date such directors
        fees otherwise would be payable. No amount shall actually be set aside for
        payment under the Plan. Any participant to whom an amount is credited under
        the
        Plan shall be deemed a general, unsecured creditor of the Company.

      


      Section
        1.4     Any participant may
        defer all or any portion of his or her directors fees otherwise payable to
        him
        or her by the Company for the calendar year beginning after the date of said
        election as he or she may specify in said written election to the Company,
        and
        the amounts so deferred shall be paid only as provided in this Plan. Any
        new
        election to defer payment of directors fees must be made before the beginning
        of
        the calendar year for which the directors fees are payable. The election
        to
        defer shall be irrevocable as to the deferred-compensation for the period
        for
        which the election is made.


      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        II

      


      DEFERRED
        COMPENSATION

      


      All
        amounts credited under the terms of the Plan to a deferred compensation account
        maintained in the name of a participant by the Company shall be invested
        in any
        investment option acceptable to the Company.

      


      Such
        investiment election shall be made on a form approved by the
        Company.

      


      ARTICLE
        III

      


      DISTRIBUTION

      


      Section
        3.1     On the first day of
        the month next following the date on which a participant ceases to be a member
        of the Company~s Board of Directors for any reason including death, distribution
        of the amount credited to the participant’s account in accordance with this plan
        shall commence to or with respect to the participant in a lump sum.

      


      Section
        3.2     If a participant
        should die before distribution has been made to the participant, the account
        shall be distributed to the participant’s beneficiary designated by the
        participant in writing and delivered to the Company at the time the participant
        first elected to become a participant in the Plan. If a participant has not
        designated a beneficiary, or if no designated beneficiary is living on the
        date
        of distribution, then, notwithstanding any provision herein to the contrary,
        such amounts shall be distributed to such participant’s estate in a lump sum
        distribution as soon as administratively feasible following such participant's
        death.

      


      Section
        3.3     In the event a
        participant incurs an unforeseeable emergency, the participant may make a
        written request to the Company for a hardship withdrawal from his or her
        account
        established under the Plan. An unforeseeable emergency is a severe financial
        hardship to the participant resulting from a sudden and unexpected illness
        or
        accident of the participant or of a dependent (as defined in Section 152(a)
        of
        the Internal Revenue Code of 1986, as amended) 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. Withdrawals of amounts because of an unforeseeable emergency
        are only permitted to the extent reasonably needed to satisfy the emergency
        need. This section shalL be interpreted in a manner consistent with Sections
        1
        .457-2(h)(4) and 1 .457-2(h)(5) of the Treasury Regulations.

      


      Section
        3.4     Anything herein to
        the contrary notwithstanding, if, at any time, a court or the Internal Revenue
        Service determines that an amount in a participant’s account is includable in
        the gross income of the participant and subject to tax, the Board of Directors
        of the Company may, in its sole discretion, permit a lump sum distribution
        of an
        amount equal to the amount determined to be includable in the participants
        gross
        income.

      


       

       

       

       

       

       

       

       


      
        
          
          

        

        
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      ARTICLE
        IV

      


      AMENDMENT
        AND TERMINATION OF PLAN

      


      The
        Company reserves the right to amend or terminate the Plan at any time. Any
        such
        termination shall be effective as of the end of the calendar year during
        which
        notification is given to each participant. Notification will be by first
        class
        mail, addressed toeach
        participant at the participant’s last known address, or by other notice
        acknowledged in writing by the participant. Any amounts credited to an account
        of any participant shall remain subject to the provisions of the Plan and
        distribution will not be accelerated because of the termination of the Plan.
        No
        amendment or termination shall directly or indirectly reduce the balance
        of any
        account described in this Plan as of the effective date of such amendment
        or
        termination - No additional credits or contributions will be made to the
        accounts of the participants under the Plan after termination of the Plan,
        but
        interest may continue to be credited to the accounts of the participants
        under
        the Plan until all benefits are distributed to the participants or to their
        beneficiaries. Upon termination of the Plan, distribution of amounts credited
        to
        the accounts of the participants shall be made to the participants or their
        beneficiaries in accordance with Article III of this Plan.

       

      
        ARTICLE
          V

      

      


      CLAIMS
        PROCEDURE

      


      Section
        5.1     For purposes of
        handling claims with respect to this Plan, the “Claims Reviewer” shall be the
        Company, unless another person or organizational
        unit is designated by the Company as Claims Reviewer.

       

      Section
        5.2     This Section shall
        apply to claims not involving a determination of disability

      


      An
        initial claim for benefits under the Plan must be made by the participant
        or his
        or her beneficiary in accordance with the terms of the Plan through which
        the
        benefits are provided.

      


      No
        later
        than 90 days after receipt of such a claim, the Claims Reviewer will render
        a
        written decision on the claim to the claimant, unless special circumstances
        require the extension of such 90 day period. If such extension is necessary,
        the
        Claims Reviewer shall provide the participant or the participant’s beneficiary
        with written notification of such extension before the expiration of the
        initial
        90 day period. Such notice shall specify the reason or reasons for such
        extension and the date by which a final decision can be expected. In no event
        shall such extension exceed a period of 90 days from the end of the initial
        90
        day period.

      


      In
        the
        event the Claims Reviewer denies the claim of a participant or the beneficiary
        in whole or in part, the Claims Reviewer’s written notification shall specify,
        in a manner calculated to be understood by the claimant:

       

      (a) the
        specific reason for the denial;

      


       

      



      
        
          
            


          

          
          

        

        
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      (b) a
        reference to the Plan or other document or form that is the basis for the
        denial;

      


      (c) a
        description of any additional material or information necessary for the claimant
        to perfect the claim and an explanation of why it is needed;

      


      (d) an
        explanation of the applicable review procedures and the time limits applicable
        to such procedures; and

      


      (e) a
        statement of the claimant’s right to bring a civil action under ERISA Section
        502(a) following an adverse benefit determination on review.

      


      Should
        the claim be denied in whole or in part and should the claimant be dissatisfied
        with the Claims Reviewer’s disposition of the claimant’s claim, the claimant may
        have full and fair review of the claim by the Company upon written request
        therefore submitted by the claimant or the claimant’s duly authorized
        representative and received by the Company within 60 days after the claimant
        receives written notification that the claimant’s claim has been denied. In
        connection with such review, the claimant or the claimant~s duly authorized
        representative shall be entitled to submit written comments, documents, records
        and other information relating to the claim. The Company shall also provide
        the
        claimant or his duly authorized representative, upon request and free of
        charge,
        reasonable access to, and copies of, all documents, records and other
        information relevant to the claimant’s claim for benefits.

      


      In
        considering the review, the Company shall take into account all materials
        and
        information the claimant submits relating to the claim, without regard to
        whether such information was submitted or considered in the initial benefit
        determination.

      


      The
        Company shall act to deny or accept the claim within 60 days after the
        claimant’s written request for review unless special circumstances require the
        extension of such 60 day period. The notice of extension shall set forth
        the
        special circumstances and the date by which the Company expects to render
        its
        decision. In all events, the Company shall act to deny or accept the claim
        within 120 days of the receipt of the claimant’s request for review. The action
        of the Company shall be in the form of a written notice to the claimant and
        its
        contents shall include:

      


      (a) the
        specific reason for the denial;

      


      (b) a
        reference to the Plan or other document or form that is the basis for the
        denial;

      


      (c) a
        statement that the claimant is entitled to receive, upon request and free
        of
        charge, reasonable access to, and copies of, all documents,
        records and

           
other
        informaiton
        relevant to the claimant's claims for benefits; and


       


      
        
          
          

        

        
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      (d) a
        statement of the claimant’s right to bring a civil action under ERISA Section
        502(a) following an adverse benefit determination on review.

       

      In
        no
        event may a claimant commence legal action for benefits the claimant believes
        are due the claimant until the claimant has exhausted all of the remedies
        and   procedures afforded the claimant by this Article V.

      


      Section
        5.3        This
        Section shall apply to claims involving a determination of disability.


       

       An
        initial claim for disability benefits under the Plan must be made by the
        participant or his or her beneficiary in accordance with the terms of the
        Plan
        through which the benefits are provided.

       

      No
        later than 45 days after receipt of such a claim, the
        Claims Reviewer will render a written decision on the claim to the claimant,
        unless special circumstances require a 30 day extension of such 45 day
        period.  If a 30 day extension is necessary, the Claims Reviewer shall
        provide the participant or the participant's beneficiary with written
        notification of such extension before the expiration of the initial 45 day
        period. 

       

      Such
        notice shall specify the reason or reasons for such etension and the date
        by
        which a final decision can be expected. If, prior to the end of the first
        30 day
        extension period, the Claims Reviewer determines that, due to maters beyond
        the
        control of the Claims Reviewer, a decision cannot be rendered within that
        extension period, the period for making a decision may be extended for up
        to an
        additional 30 days, provided that the Claims Reviewer notifies the claimant,
        prior to the expiration of the first 30 day extension period, of the
        circumstances requiring the extension and the date as of which the Plan expects
        to render a decision. The notice of extension shall specifically explain
        the
        standards on which entitlement to a benefit is based, the unresolved issues
        preventing a decision on the claim and the additional information needed
        to
        resolve those issues, and the claimant shall be afforded at least 45 days
        within
        which to provide the specified information.

       

      In
        the
        event the Claims Reviewer denies the claim of a participant or the beneficiary
        in whole or in part, the Claims Reviewer~s written notification shall specify,
        in a manner calculated to be understood by the claimant:

       

      (a) the
        specific reason for the denial;

       

                  (b) a
        reference to the Plan or other document or form that is the basis for the
        denial;

       

      (c) a
        description of any additional material or information necessary for the claimant
        to perfect the claim and an explanation of why it is needed;

       

      (d) an
        explanation of the applicable review procedures and the time limits applicable
        to such procedures;

       

                  (e) a
        statement of the claimant’s right to bring a civil action under ERISA Section
        502(a) folLowing an adverse benefit determination on review;

      




      
        
          
            


          

          
          

        

        
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      (f) if
        an internal rule, guideline, protocol or other similar criterion was relied
        upon
        in making the adverse determination, 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
        benefit determination and that a copy of such rule, guideline, protocol or
        other
        criterion will be provided free of charge to the claimant upon request;
        and

      


      (g) if
        the adverse benefit determination is based on 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.

      


      Should
        the claim be denied in who~ or in part and should the claimant be dissatisfied
        with the Claims Reviewer’s disposition of the claimant’s claim, the claimant may
        have full and fair review of the claim by the Company upon written request
        therefore submitted by the claimant or the claimant’s duly authorized
        representative and received by the Company within 180 days after the claimant
        receives written notification that the claimant’s claim has been denied. The
        review will not afford deference to the initial adverse benefit determination
        and will neither be conducted by the individual who made the initial adverse
        benefit determination nor the subordinate of such individual. If the adverse
        benefit determination is based in whole or in part on a medical judgment,
        the
        Claims Reviewer will consult with a health care professional who has appropriate
        training and experience in the field of medicine involved in the medical
        judgment. The health care expert will neither be the individual who was
        consulted in connection with the adverse benefit determination nor the
        subordinate of such individual. The Claims Reviewer will provide the claimant
        with the identification of the medical expert whose advice was obtained on
        behalf of the Plan in connection with the claimant’s adverse benefit
        determination whether or not such advice was relied upon in making the benefit
        determination.

      


      In
        connection with such review, the claimant or the claimant’s duly authorized
        representative shall be entitled to submit written comments, documents, records
        and other information relating to the claim. The Company shall also provide
        the
        claimant or his duly authorized representative, upon request and free of
        charge,
        reasonable access to, and copies of, all documents, records and other
        information relevant to the claimant’s claim for benefits.

      


      In
        considering the review, the Company shall take into account all materials
        and
        information the claimant submits relating to the claim, without regard to
        whether such information was submitted or considered in the initial benefit
        determination.

      


      The
        Company shall act to deny or accept the claim within 45 days after the
        claimant's written request for review unless special circumstances require
        the
        extension of such 45 day period. The notice of extension

      


       

      



      
        
          
            


          

          
          

        

        
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      shall
        set
        forth the special circumstances and the date by which the Company expects
        to
        render its decision. In all events, the Company shall act to deny or accept
        the
        claim within 90 days of the receipt of the claimant’s request for review. The
        action of the Company shall be in the form of a written notice to the cLaimant
        and its contents shall include:

       

              
(a)  the
        specific reason for the denial;

      


                  
(b)
 a
        reference to the Plan or other document or form that is the basis for the
        denial;

      


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

       

      (d) 
        a statement of the claimant’s right to bring a civil action under ERISA Section
        502(a) following an adverse benefit determination on review;

       

                 (f) 
if
        an
        internal rule, guideline, protocol or other similar criterion was relied
        upon in
        making the adverse determination, 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 benefit
        determination and that a copy of such rule, guideline, protocol or other
        criterion will be provided free of charge to the claimant upon
        request;

      


                
 (g)  if
        the
        adverse benefit determination is based on 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; and

      


                  (h)  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 .”

      


      In
        no
        event may a claimant commence legal action for benefits the claimant believes
        are due the claimant until the claimant has exhausted all of the remedies
        and
        procedures afforded the claimant by this Article V.

      


      



      
        
          
            


          

          
          

        

        
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      ARTICLE
        VI

      ADMINISTRATION

       

      Section
        6.1               
The right of a participant or the participant’s beneficiary to receive a
        distribution hereunder shall be an unsecured claim against the general assets
        of
        the Company, and neither a participant nor his or her designated beneficiary
        shaLl have any rights in or against any amount credited to any accounts under
        this Plan or any other assets of the Company. The Plan at all times shall
        be
        considered entirely unfunded both for tax purposes and for purposes of Title
        I
        of the Employee Retirement Income Security Act of 1974, as amended. Any funds
        invested hereunder shall continue for all purposes to be part of the general
        assets of the Company and available to its general creditors in the event
        of
        bankruptcy or insolvency. Accounts under this Plan and any benefits which
        may be
        payable pursuant to this Plan are not subject in any manner to anticipation,
        sale, alienation, transfer, assignment, pledge, encumbrance, attachment,
        or
        garnishment by creditors of a participant or a participant’s beneficiary. The
        Plan constitutes a mere promise by the Company to make benefit payments in
        the
        future. No interest or right to receive a benefit may be taken, either
        voluntarily or involuntarily, for the satisfaction of the debts of, or other
        obligations or claims against, such person or entity, including claims for
        alimony, support, separate maintenance and claims in bankruptcy
        proceedings.

      


      Section
        6.2               
The Plan shall be administered by the Board of Directors of the Company,
        which
        shall have the authority, duty and power to interpret and construe the
        provisions of the Plan as the Board deems appropriate including the authority
        to
        determine eligibility for benefits under the Plan. The Board shall have the
        duty
        and responsibility of maintaining records, making the requisite calculations
        and
        disbursing the payments hereunder. The interpretations, determinations,
        regulations and calculations of the Board shall be final and binding on all
        persons and parties concerned.

      


      Section
        6.3               
Expenses of administration shall be paid by the Company. The Board of Directors
        of the Company shall be entitled to rely on all tables, valuations,
        certificates, opinions, data and reports furnished by any actuary, accountant,
        controller, counselor other person employed or retained by the Company with’
respect to the Plan.

      


      Section
        6.4                
The Company shall furnish individual annual statements of accrued benefits
        to
        each participant, or current beneficiary, in such form as determined by the
        Company or as required by law.

      


      Section
        6.5                
The sole rights of a participant or beneficiary under this Plan shall be
        to have
        this Plan administered according to its provisions, to receive whatever benefits
        he or she may be entitled to hereunder, and nothing in the Plan shall be
        interpreted as a guaranty that any funds in any trust which may be established
        in connection with the Plan or assets of the Company will be sufficient to
        pay
        any benefit hereunder. Further, the adoption and maintenance of this Plan
        shall
        not be construed as

      


       


      



      
        
          
            


          

          
          

        

        
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        creating any contract of employment between the Company and any
        participant.

      


      Section
        6.6               
The Company may from time to time establish rules and procedures which it
        determines to be necessary for the proper administration of the Plan and
        the
        benefits payable to an individual in the event that individual is declared
        incompetent and a conservator or other person legally charged with that
        individual’s care is appointed. Except as otherwise provided herein, when the
        Company determines that such individual is unable to manage his or her financial
        affairs, the Company may pay such individual’s benefits to such conservator,
        person legally charged with such individual’s care, or institution then
        contributing toward or providing for the care and maintenance of such
        individual. Any such payment shall constitute a complete discharge of any
        liability of the Company and the Plan for such individual.

      


      Section
        6.7               
The Plan may be continued after a sale of assets of the Company, or a merger
        or
        consolidation of the Company into or with another corporation or entity only
        if
        and to the extent that the transferee, purchaser or successor entity agrees
        to
        continue the Plan. In the event that the Plan is not continued by the
        transferee, purchaser or successor entity, then the Plan shall be terminated
        subject to the provisions of Article IV.

       

      Section
        6.9               
Notwithstanding any provision herein to the contrary, neither the Company
        nor
        any individual acting as an employee or agent of the Company shall be liable
        to
        any   participant, former participant, designated beneficiary, or any
        other person for any claim, loss, liability or expense incurred in connection
        with the Plan, unless attributable to fraud or willful misconduct on the
        part of
        the Company or any such employee or agent of the Company.

      


      Section
        6.10             
All questions pertaining to the construction, validity and effect of the
        Plan
        shall be determined in accordance with the laws of the United States and
        to the
        extent not  preempted by such laws, by the laws of the State of
        Tennessee.

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
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    AMENDMENT
      TO

    NN,
      INC. ELECTIVE DEFERRED COMPENSATION PLAN

    


    WHEREAS,
      the NN,
      Inc.
      Elective Deferred Compensation Plan
      (hereinafter referred to as the "Plan") was established effective February
      26,
      1999; and

    


    WHEREAS,
      the Employer desires to amend the Plan under Article IV thereof to provide
      an
      optional form of benefit payment under the terms of the Plan;

    


    NOW
      THEREFORE, the Employer hereby amends the Plan, effective as of the first day
      of
      January, 2005, as follows:

    


    Section
      3.1 of the Plan shall be amended to read, as follows:

    


     

    “On
      the
      first day of the month next following the date on which a participant ceases
      to
      be a member of the Company's Board of Directors for any reason including death,
      distribution of the amount credited to the participant's account in accordance
      with this plan shall commence to or with respect to the participant in either
      (1) a lump sum or (2) three (3) equal annual installments. 

    


    
      	
              (a)

            	
              A
                Participant may make an initial payment election under Section 3.1(b)
                or
                changes to an election under Section 3.1(c). If the Participant fails
                to
                timely elect a payment election, the Plan will pay the affected
                Participant’s Vested Accrued Benefit in a lump-sum cash
                payment.

            


    

    


    
      	
              (b)

            	
              Initial
                Payment Election.
                A
                Participant must make an initial payment election at the time of
                the
                Participant’s election to defer. A payment election may apply to all
                deferred compensation regardless of the time deferred or only to
                specific
                deferred compensation based on date of deferral, as the payment election
                indicates. A Participant must make any permissible initial payment
                election on a form the Employer provides for that purpose.
                

            


    

    


    
      	
              (c)

            	
              Changes
                to Payment Election.
                A
                Participant may change the election. If the Plan permits Participants
                to
                change existing payment elections (initial or change elections) as
                to any
                or all deferred compensation, including any Plan default payment
                applicable in the absence of an election, any such change election
                must
                comply with this Section 3.1(c). A Participant must make any change
                election on a form the Employer provides for such purpose. Any Participant
                change election: (i) may not take effect until at least 12 months
                following the date of the change election; (ii) must result in the
                first
                payment under the change election being made not earlier than 5 years
                following the date upon which the originally-elected payment would
                have
                been made (except if payment is on account of death, Disability or
                Unforeseeable Emergency); and (iii) if the change election relates
                to a
                Participant’s or the Employer’s previous election of a fixed schedule, the
                Participant must make the change election not less than 12 months
                prior to
                the date of the first scheduled payment under the initial election.
                A
                Beneficiary following a Participant’s death may not make a payment change
                election under this Section 3.1(c).

            


    

    


     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, this Amendment has been executed this 2nd day of
      November,
      2006.

    


    


                                                                            
      NN, INC.

    


    


                                                                            
      By: /s/ William C. Kelly,
      Jr.                                                  


                                                                                                                                 
      William C. Kelly, Jr.

                                                                                                                                                                               
      Title:  Vice President and Chief Administrative Officer


    


    Signed,
      sealed and delivered

    in
      the
      presence of:

    


    


    /s/
      James H.
      Dorton                                                     


    Witness

    


     

    
      
        
        

      

      
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