EX-10.6






Exhibit 10.6








 




 




 




 




AutoNation, Inc.

Deferred Compensation Plan




Amended and Restated, Effective January 1, 2009




      



      



      



      








 









 







AutoNation, Inc. Deferred Compensation Plan




	 	 	 	 	 
	Article I
	 	 	 	 
	Establishment and Purpose
	 	 	1	 
	 
	 	 	 	 
	Article II 

	 	 	 	 
	Definitions
	 	 	1	 
	 
	 	 	 	 
	Article III
	 	 	 	 
	Eligibility and Participation
	 	 	7	 
	 
	 	 	 	 
	Article IV
	 	 	 	 
	Deferrals
	 	 	8	 
	 
	 	 	 	 
	Article V
	 	 	 	 
	Company Contributions
	 	 	10	 
	 
	 	 	 	 
	Article VI
	 	 	 	 
	Benefits
	 	 	11	 
	 
	 	 	 	 
	Article VII
	 	 	 	 
	Modifications to Payment Schedules
	 	 	14	 
	 
	 	 	 	 
	Article VIII
	 	 	 	 
	Valuation of Account Balances; Investments
	 	 	14	 
	 
	 	 	 	 
	Article IX
	 	 	 	 
	Administration
	 	 	15	 
	 
	 	 	 	 
	Article X
	 	 	 	 
	Amendment and Termination
	 	 	16	 
	 
	 	 	 	 
	Article XI
	 	 	 	 
	Informal Funding
	 	 	16	 
	 
	 	 	 	 
	Article XII
	 	 	 	 
	Claims
	 	 	17	 
	 
	 	 	 	 
	Article XIII
	 	 	 	 
	General Provisions
	 	 	22	 







 









 








AutoNation, Inc. Deferred Compensation Plan




Article I

Establishment and Purpose



AutoNation, Inc. (the “Company”) hereby amends and restates the AutoNation, Inc. Deferred
Compensation Plan (the “Plan”), effective January 1, 2009. This amendment and restatement applies
to Deferrals credited on and after January 1, 2006.



The purpose of the Plan is to attract and retain key employees by providing each Participant with
an opportunity to defer receipt of a portion of their salary, bonus, and other specified
compensation. The Plan is not intended to meet the qualification requirements of Code Section
401(a), but is intended to meet the requirements of Code Section 409A, and shall be operated and
interpreted consistent with that intent.



The Plan constitutes an unsecured promise by the Company to pay benefits in the future.
Participants in the Plan shall have the status of general unsecured creditors of the Company, as
applicable. The Company shall be solely responsible for payment of the benefits of its employees
and their beneficiaries. The Plan is unfunded for Federal tax purposes and is intended to be an
unfunded arrangement for eligible employees who are part of a select group of management or highly
compensated employees of the Employer within the meaning of Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA. Any amounts set aside to defray the liabilities assumed by the Company will
remain the general assets of the Company and shall remain subject to the claims of the Company’s
creditors until such amounts are distributed to the Participants.



Article II

Definitions




	2.1	 	Account. Account means a bookkeeping account maintained by the Company to record the
payment obligation of the Company to a Participant as determined under the terms of the Plan.
The Company may maintain an Account to record the total obligation to a Participant and
component Accounts to reflect amounts payable at different times and in different forms.
Reference to an Account means any such Account established by the Company, as the context
requires. Accounts are intended to constitute unfunded obligations within the meaning of
Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.
	 
	2.2	 	Account Balance. Account Balance means, with respect to any Account, the total
payment obligation owed to a Participant from such Account as of the most recent Valuation
Date.
	 
	2.3	 	Affiliate. Affiliate means a corporation, trade or business that, together with the
Company, is treated as a single employer under Code Section 414(b) or (c).
	 
	2.4	 	Beneficiary. Beneficiary means a natural person, estate, or trust designated by a
Participant to receive payments to which a Beneficiary is entitled in accordance with
provisions of the Plan. The Participant’s spouse, if living, otherwise the Participant’s
estate, shall be the Beneficiary if: (i) the Participant has failed to properly designate a
Beneficiary, or (ii) all designated Beneficiaries have predeceased the Participant.





 




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AutoNation, Inc. Deferred Compensation Plan





	 	 	A former spouse shall have no interest under the Plan, as Beneficiary or otherwise, unless
the Participant designates such person as a Beneficiary after dissolution of the marriage,
except to the extent provided under the terms of a domestic relations order as described in
Code Section 414(p)(1)(B).
	 
	2.5	 	Business Day. A Business Day is each day on which the New York Stock Exchange
is open for business.
	 
	2.6	 	Cause. Separation from Service for “Cause” means:






	 	(a)	 	Participant’s conviction for commission of a felony or other crime;
	 
	 	(b)	 	the commission by Participant of any act against the Company or its
subsidiaries constituting willful misconduct, dishonesty, fraud, theft or embezzlement;
	 
	 	(c)	 	Participant’s failure, inability or refusal to perform any of the material
services, duties or responsibilities required by him or her by the Company or its
subsidiaries, or to materially comply with the policies or procedures established from
time to time by the Company or its subsidiaries, for any reason other than his or her
illness or physical or mental incapacity;
	 
	 	(d)	 	Participant’s breach of any agreement entered into with the Company or its
subsidiaries prior to or within one year after a Separation from Service;
	 
	 	(e)	 	Participant’s dependence, as determined in good faith by the Company or one of
its subsidiaries, on any addictive substance, including, but not limited to, alcohol or
any illegal or narcotic drugs;
	 
	 	(f)	 	the destruction of or material damage to Company property or property of a
subsidiary caused by Participant’s willful or grossly negligent conduct; or
	 
	 	(g)	 	the willful engaging by Participant in any other conduct which is demonstrably
injurious to the Company or its subsidiaries, monetarily or otherwise.






	2.7	 	Change in Control. Change in Control, with respect to an Employer that is organized
as a corporation, occurs on the date on which any of the following events occur (i) a change
in the ownership of the Employer; (ii) a change in the effective control of the Employer;
(iii) a change in the ownership of a substantial portion of the assets of the Employer.
	 
	 	 	For purposes of this Section, a change in the ownership of the Employer occurs on the date
on which any one person, or more than one person acting as a group, acquires ownership of
stock of the Employer that, together with stock held by such person or group constitutes
more than 50% of the total fair market value or total voting power of the stock of the
Employer. A change in the effective control of the Employer occurs on the date on which
either (i) a person, or more than one person acting as a group, acquires ownership of stock
of the Employer possessing 30% or more of the total voting power of the stock of the
Employer, taking into account all such stock acquired during the 12-





 




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AutoNation, Inc. Deferred Compensation Plan





	 	 	month period ending on the date of the most recent acquisition, or (ii) a majority of the
members of the Employer’s Board of Directors is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a majority of the members of such
Board of Directors prior to the date of the appointment or election, but only if no other
corporation is a majority shareholder of the Employer. A change in the ownership of a
substantial portion of assets occurs on the date on which any one person, or more than one
person acting as a group, other than a person or group of persons that is related to the
Employer, acquires assets from the Employer that have a total gross fair market value equal
to or more than 40% of the total gross fair market value of all of the assets of the
Employer immediately prior to such acquisition or acquisitions, taking into account all such
assets acquired during the 12-month period ending on the date of the most recent
acquisition.
	 
	 	 	An event constitutes a Change in Control with respect to a Participant only if the
Participant performs services for the Employer that has experienced the Change in Control,
or the Participant’s relationship to the affected Employer otherwise satisfies the
requirements of Treasury Regulation Section 1.409A-3(2)(i)(5)(ii).
	 
	 	 	The determination as to the occurrence of a Change in Control shall be based on objective
facts and in accordance with the requirements of Code Section 409A.
	 
	2.8	 	Claimant. Claimant means a Participant or Beneficiary filing a claim under Article
XII of this Plan.
	 
	2.9	 	Code. Code means the Internal Revenue Code of 1986, as amended from time to time.
	 
	2.10	 	Code Section 409A. Code Section 409A means section 409A of the Code, and regulations
and other guidance issued by the Treasury Department and Internal Revenue Service thereunder.
	 
	2.11	 	Committee. Committee means the Deferred Compensation Committee of the Company.
	 
	2.12	 	Company. Company means AutoNation, Inc. and its successors.
	 
	2.13	 	Company Contribution. Company Contribution means a credit by the Company to a
Participant’s Account(s) in accordance with the provisions of Article V of the Plan. Company
Contributions are credited at the sole discretion of the Company and the fact that a Company
Contribution is credited in one year shall not obligate the Company to continue to make such
Company Contribution in subsequent years. Unless the context clearly indicates otherwise, a
reference to Company Contribution shall include Earnings attributable to such contribution.
	 
	2.14	 	Compensation. Compensation means a Participant’s base salary, bonus, commission, and
such other cash or equity-based compensation (if any) approved by the Committee as
Compensation that may be deferred under this Plan. Compensation shall not include any
compensation that has been previously deferred under this Plan or any other arrangement
subject to Code Section 409A.





 




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AutoNation, Inc. Deferred Compensation Plan





	2.15	 	Compensation Deferral Agreement. Compensation Deferral Agreement means an agreement
between a Participant and the Company that specifies (i) the amount of each component of
Compensation that the Participant has elected to defer to the Plan in accordance with the
provisions of Article IV, and (ii) the Payment Schedule applicable to one or more Accounts.
The Committee may permit different deferral amounts for each component of Compensation and may
establish a minimum or maximum deferral amount for each such component. Unless otherwise
specified by the Committee in the Compensation Deferral Agreement, Participants may defer up
to 75% of their base salary and up to 90% of other types of Compensation for a Plan Year. A
Compensation Deferral Agreement may also specify the investment allocation described in
Section 8.4.
	 
	2.16	 	Death Distribution. Death Distribution means the benefit payable under the Plan to a
Participant’s Beneficiary(ies) upon the Participant’s death as provided in Section 6.1 of the
Plan.
	 
	2.17	 	Deferral. Deferral means a credit to a Participant’s Account(s) that records that
portion of the Participant’s Compensation that the Participant has elected to defer to the
Plan in accordance with the provisions of Article IV. Unless the context of the Plan clearly
indicates otherwise, a reference to Deferrals includes Earnings attributable to such
Deferrals.
	 
	 	 	Deferrals shall be calculated with respect to the gross cash Compensation payable to the
Participant prior to any deductions or withholdings, but shall be reduced by the Committee
as necessary so that it does not exceed 100% of the cash Compensation of the Participant
remaining after deduction of all required income and employment taxes, 401(k) and other
employee benefit deductions, and other deductions required by law. Changes to payroll
withholdings that affect the amount of Compensation being deferred to the Plan shall be
allowed only to the extent permissible under Code Section 409A.
	 
	2.18	 	Disability Benefit. Disability Benefit means the benefit payable under the Plan to a
Participant in the event such Participant is determined to be Disabled.
	 
	2.19	 	Disabled. Disabled means that a Participant 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 months, (i) unable
to engage in any substantial gainful activity, or (ii) receiving income replacement benefits
for a period of not less than three months under an accident and health plan covering
employees of the Participant’s employer. The Committee shall determine whether a Participant
is Disabled in accordance with Code Section 409A provided, however, that a Participant shall
be deemed to be Disabled if determined to be totally disabled by the Social Security
Administration.
	 
	2.20	 	Earnings. Earnings means an adjustment to the value of an Account in accordance with
Article VIII.
	 
	2.21	 	Effective Date. Effective Date means January 1, 2009.





 




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AutoNation, Inc. Deferred Compensation Plan





	2.22	 	Eligible Employee. Eligible Employee means an Employee who is a member of a “select
group of management or highly compensated employees” of an Employer within the meaning of
Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, as determined by the Committee from time to
time in its sole discretion.
	 
	2.23	 	Employee. Employee means a full-time, salaried common-law employee of an Employer.
	 
	2.24	 	Employer. Employer means, with respect to Employees it employs, the Company and each
Affiliate.
	 
	2.25	 	ERISA. ERISA means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
	 
	2.26	 	Participant. Participant means an Eligible Employee who has received notification of
his or her eligibility to defer Compensation under the Plan under Section 3.1 and any other
person with an Account Balance greater than zero, regardless of whether such individual
continues to be an Eligible Employee. A Participant’s continued participation in the Plan
shall be governed by Section 3.2 of the Plan.
	 
	2.27	 	Payment Schedule. Payment Schedule means the date as of which payment of an Account
under the Plan will commence and the form in which payment of such Account will be made.
	 
	2.28	 	Performance-Based Compensation. Performance-Based Compensation means Compensation
where the amount of, or entitlement to, the Compensation is contingent on the satisfaction of
pre-established organizational or individual performance criteria relating to a performance
period of at least twelve consecutive months. Organizational or individual performance
criteria are considered pre-established if established in writing by not later than ninety
(90) days after the commencement of the period of service to which the criteria relate,
provided that the outcome is substantially uncertain at the time the criteria are established.
The determination of whether Compensation qualifies as “Performance-Based Compensation” will
be made in accordance with Treas. Reg. Section 1.409A-1(e) and subsequent guidance.
	 
	2.29	 	Plan. Generally, the term Plan means the “AutoNation, Inc. Deferred Compensation
Plan” as documented herein and as may be amended from time to time hereafter. However, to the
extent permitted or required under Code Section 409A, the term Plan may in the appropriate
context also mean a portion of the Plan that is treated as a single plan under Treas. Reg.
Section 1.409A-1(c), or the Plan or portion of the Plan and any other nonqualified deferred
compensation plan or portion thereof that is treated as a single plan under such section.
	 
	2.30	 	Plan Year. Plan Year means January 1 through December 31.
	 
	2.31	 	Separation from Service. An Employee incurs a Separation from Service upon
termination of employment with the Employer. Whether a Separation from Service has occurred
shall be determined by the Committee in accordance with Code Section 409A. Except in the case
of an Employee on a bona fide leave of absence as provided below, an





 




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AutoNation, Inc. Deferred Compensation Plan





	 	 	Employee is deemed to have incurred a Separation from Service if the Employer and the
Employee reasonably anticipated that the level of services to be performed by the Employee
after a date certain would be reduced to 20% or less of the average services rendered by the
Employee during the immediately preceding 36-month period (or the total period of
employment, if less than 36 months), disregarding periods during which the Employee was on a
bona fide leave of absence.
	 
	 	 	An Employee who is absent from work due to military leave, sick leave, or other bona fide
leave of absence shall incur a Separation from Service on the first date immediately
following the later of (i) the six-month anniversary of the commencement of the leave or
(ii) the expiration of the Employee’s right, if any, to reemployment under statute or
contract.
	 
	 	 	For purposes of determining whether a Separation from Service has occurred, the Employer
means the Employer as defined in Section 2.24 of the Plan, except that for purposes of
determining whether another organization is an Affiliate of the Company for this purpose,
common ownership of at least 50% shall be determinative.
	 
	 	 	The Committee specifically reserves the right to determine whether a sale or other
disposition of substantial assets to an unrelated party constitutes a Separation from
Service with respect to a Participant providing services to the seller immediately prior to
the transaction and providing services to the buyer after the transaction. Such
determination shall be made in accordance with the requirements of Code Section 409A.
	 
	2.32	 	Specified Date Account. A Specified Date Account means an Account established
pursuant to Section 4.3 that will be paid (or that will commence to be paid) at a future date
as specified in the Participant’s Compensation Deferral Agreement. Unless otherwise determined
by the Committee, a Participant may maintain no more than five (5) Specified Date Accounts. A
Specified Date Account may be identified in enrollment materials as an “In-Service Account”.
	 
	2.33	 	Specified Date Benefit. Specified Date Benefit means the benefit payable to a
Participant under the Plan in accordance with Section 6.1(b).
	 
	2.34	 	Specified Employee. Unless otherwise specified by the Committee in accordance with
Code Section 409A, Specified Employee means an Employee who, at any time during the 12-month
period ending on the Specified Employee Identification Date was a Corporate, Region or Market
Vice President or above of the Company or any Affiliate, provided any stock of the Company or
an Affiliate is actively traded on an established securities market or otherwise. Such
Employee shall be treated as a Specified Employee for the entire 12-month period beginning on
the Specified Employee Effective Date.
	 
	 	 	In the event of corporate transactions described in Treas. Reg. Section 1.409A-1(i)6), the
identification of Specified Employees shall be determined in accordance with the default
rules described therein, unless the Employer elects to utilize the available alternative
methodology through designations made within the timeframes specified therein.





 




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AutoNation, Inc. Deferred Compensation Plan





	2.35	 	Specified Employee Identification Date. Specified Employee Identification Date means
December 31, unless the Employer has elected a different date through action that is legally
binding with respect to all nonqualified deferred compensation plans maintained by the
Employer.
	 
	2.36	 	Specified Employee Effective Date. Specified Employee Effective Date means the first
day of the fourth month following the Specified Employee Identification Date, or such earlier
date as is selected by the Committee.
	 
	2.37	 	Substantial Risk of Forfeiture. Substantial Risk of Forfeiture shall have the
meaning specified in Treas. Reg. Section 1.409A-1(d).
	 
	2.38	 	Termination Account. Termination Account means an Account established by the Company
to record the amounts payable to a Participant upon Separation from Service. Unless the
Participant has established a Specified Date Account, all Deferrals and Company Contributions
shall be allocated to a Termination Account on behalf of the Participant.
	 
	2.39	 	Termination Benefit. Termination Benefit means the benefit payable to a Participant
under the Plan following the Separation from Service of the Participant for any reason other
than death or Disability.
	 
	2.40	 	Unforeseeable Emergency. An Unforeseeable Emergency means a severe financial hardship
to the Participant resulting from an illness or accident of the Participant, the Participant’s
spouse, the Participant’s dependent (as defined in Code Section 152, without regard to section
152(b)(1), (b)(2), and (d)(1)(B)), or a Beneficiary; loss of the Participant’s property due to
casualty (including the need to rebuild a home following damage to a home not otherwise
covered by insurance, for example, as a result of a natural disaster); or other similar
extraordinary and unforeseeable circumstances arising as a result of events beyond the control
of the Participant. The types of events which may qualify as an Unforeseeable Emergency shall
be specified by the Committee in administrative documents or forms.
	 
	2.41	 	Valuation Date. Valuation Date shall mean each Business Day.





Article III

Eligibility and Participation




	3.1	 	Eligibility and Participation. An Eligible Employee becomes a Participant upon the
receipt of notification of eligibility to participate.
	 
	3.2	 	Duration. A Participant shall be eligible to defer Compensation and receive
allocations of Company Contributions, subject to the terms of the Plan, for as long as such
Participant remains an Eligible Employee. A Participant who is no longer an Eligible Employee
but has not incurred Separation from Service may not defer Compensation under the Plan (except
for deferrals elected for the year in which he ceases to be an Eligible Employee) but may
otherwise exercise all of the rights of a Participant under the Plan with respect to his or
her
Account(s). On and after a Separation from Service, a





 




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AutoNation, Inc. Deferred Compensation Plan





	 	 	Participant shall remain a Participant as long as his or her Account Balance is greater than
zero and during such time may continue to make allocation elections as provided in Section
8.4. An individual shall cease being a Participant in the Plan when all benefits under the
Plan to which he or she is entitled have been paid.
	 
	3.3	 	Revocation of Future Participation. Notwithstanding the provisions of Section 3.2, the
Committee may, in its discretion, revoke such Participant’s eligibility to make future
Deferrals under this Plan. Such revocation will not affect in any manner a Participant’s
Accounts or any deferral election in place for the year of such revocation.





Article IV

Deferrals




	4.1	 	Deferral Elections, Generally.






	 	(a)	 	A Participant may elect to defer Compensation by submitting a Compensation
Deferral Agreement during the enrollment periods established by the Company and in the
manner specified by the Company, but in any event, in accordance with Section 4.2. A
Compensation Deferral Agreement that is not timely filed with respect to a service
period or component of Compensation shall be considered void and shall have no effect
with respect to such service period or Compensation. The Company may modify any
Compensation Deferral Agreement prior to the date the election becomes irrevocable
under the rules of Section 4.2.
	 
	 	(b)	 	The Participant shall specify on his or her Compensation Deferral Agreement
whether to allocate Deferrals to a Termination Account or to a Specified Date Account.
If no designation is made, all Deferrals shall be allocated to the Termination Account.
A Participant may also specify in his or her Compensation Deferral Agreement the
Payment Schedule applicable to his or her Plan Accounts. If the form of payment is not
specified in a Compensation Deferral Agreement, the form of payment shall be the form
of payment specified in Section 6.2.






	4.2	 	Timing Requirements for Compensation Deferral Agreements.






	 	(a)	 	First Year of Eligibility. In the case of the first year in which an Eligible
Employee becomes eligible to participate in the Plan, he has up to 30 days following
his initial eligibility to submit a Compensation Deferral Agreement with respect to
Compensation to be earned during such year. The Compensation Deferral Agreement
described in this paragraph becomes irrevocable upon the end of such 30-day period. The
determination of whether an Eligible Employee may file a Compensation Deferral
Agreement under this paragraph shall be determined in accordance with the rules of Code
Section 409A, including the provisions of Treas. Reg. Section 1.409A-2(a)(7).
	 
	 	 	 	A Compensation Deferral Agreement filed under this paragraph applies to Compensation
earned on and after the date the Compensation Deferral Agreement becomes
irrevocable.





 




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	 	(b)	 	Prior Year Election. Except as otherwise provided in this Section 4.2,
Participants may defer Compensation by filing a Compensation Deferral Agreement no
later than December 31 of the year prior to the year in which the Compensation to be
deferred is earned. A Compensation Deferral Agreement described in this paragraph shall
become irrevocable with respect to such Compensation as of January 1 of the year in
which such Compensation is earned.
	 
	 	(c)	 	Performance-Based Compensation. Participants may file a Compensation Deferral
Agreement with respect to Performance-Based Compensation no later than the date that is
six months before the end of the performance period, provided that:






	 	i.	 	the Participant performs services continuously from the later
of the beginning of the performance period or the date the criteria are
established through the date the Compensation Deferral Agreement is submitted;
and
	 
	 	ii.	 	the Compensation is not readily ascertainable as of the date
the Compensation Deferral Agreement is filed.






	 	 	 	A Compensation Deferral Agreement becomes irrevocable with respect to
Performance-Based Compensation as of the day immediately following the latest date
for filing such election. Any election to defer Performance-Based Compensation that
is made in accordance with this paragraph and that becomes payable as a result of
the Participant’s death or Disability or upon a Change in Control prior to the
satisfaction of the performance criteria, will be void unless it would be considered
timely under another rule described in this Section.
	 
	 	(d)	 	Sales Commissions. Sales commissions (as defined in Treas. Reg. Section
1.409A-2(a)(12)(i)) are considered to be earned in the taxable year of the Participant
in which the sale occurs. The Compensation Deferral Agreement must be filed before the
last day of the year preceding the year in which the sales commissions are earned and
becomes irrevocable after that date.
	 
	 	(e)	 	Certain Forfeitable Rights. With respect to a legally binding right to a
payment in a subsequent year that is subject to a forfeiture condition requiring the
Participant’s continued services for a period of at least twelve months from the date
the Participant obtains the legally binding right, an election to defer such
Compensation may be made on or before the 30th day after the Participant obtains the
legally binding right to the Compensation, provided that the election is made at least
twelve months in advance of the earliest date at which the forfeiture condition could
lapse. The Compensation Deferral Agreement described in this paragraph becomes
irrevocable after such 30th day. If the forfeiture condition applicable to the payment
lapses before the end of the required service period as a result of the Participant’s
death or disability (as defined in Treas. Reg. Section 1.409A-3(i)(4)) or upon a Change
in Control (as defined in Treas. Reg. Section 1.409A-3(i)(5)), the Compensation
Deferral Agreement will be void unless it would be considered timely under another rule
described in this Section.





 




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	 	(f)	 	Company Awards. The Company may unilaterally provide for deferrals of Company
awards prior to the date of such awards. Deferrals of severance pay may be negotiated
with a Participant prior to the date the Participant has a legally binding right to
such Compensation.
	 
	 	(g)	 	“Evergreen” Deferral Elections. The Committee, in its discretion, may provide
in the Compensation Deferral Agreement that such Compensation Deferral Agreement will
continue in effect for each subsequent year or performance period. Such “evergreen”
Compensation Deferral Agreements will become effective with respect to an item of
Compensation on the date such election becomes irrevocable under this Section 4.2. An
evergreen Compensation Deferral Agreement may be terminated or modified prospectively
with respect to Compensation for which such election remains revocable under this
Section 4.2. A Participant whose Compensation Deferral Agreement is cancelled in
accordance with Section 4.6 will be required to file a new Compensation Deferral
Agreement under this Article IV in order to recommence Deferrals under the Plan.






	4.3	 	Allocation of Deferrals. A Compensation Deferral Agreement may allocate Deferrals to
one or more Specified Date Accounts and/or to the Termination Account. The Committee may, in
its discretion, establish a minimum deferral period for the establishment of a Specified Date
Account (for example, the third Plan Year following the year Compensation is allocated to such
accounts).
	 
	4.4	 	Deductions from Pay. The Committee has the authority to determine the payroll
practices under which any component of Compensation subject to a Compensation Deferral
Agreement will be deducted from a Participant’s Compensation.
	 
	4.5	 	Vesting. Participant Deferrals shall be 100% vested at all times.
	 
	4.6	 	Cancellation of Deferrals. The Committee may cancel a Participant’s Deferrals: (i)
for the balance of the Plan Year in which an Unforeseeable Emergency occurs, (ii) if the
Participant receives a hardship distribution under the Employer’s qualified 401(k) plan,
through the end of the Plan Year in which the six month anniversary of the hardship
distribution falls, and (iii) during periods in which the Participant is unable to perform the
duties of his or her position or any substantially similar position due to a mental or
physical impairment that can be expected to result in death or last for a continuous period of
at least six months, provided cancellation occurs by the later of the end of the taxable year
of the Participant or the 15th day of the third month following the date the
Participant incurs the disability (as defined in this paragraph).





Article V

Company Contributions




	5.1	 	Discretionary Company Contributions. The Company may, from time to time in its sole
and absolute discretion, credit Company Contributions to any Participant in any amount
determined by the Company. Such contributions will be credited to a Participant’s Termination
Account.





 




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	5.2	 	Vesting. Company Contributions described in Section 5.1, above, and the Earnings
thereon, shall vest in accordance with the vesting schedule(s) established by the Committee at
the time that the Company Contribution is made. All Company Contributions shall become 100%
vested upon the occurrence of the earliest of: (i) the death of the Participant while actively
employed; (ii) the Disability of the Participant, or (iii) attainment of age sixty (60) with
at least six (6) Years of Service, as determined under the Company 401(k) plan. The Committee
may, at any time, in its sole discretion, increase a Participant’s vested interest in a
Company Contribution. The portion of a Participant’s Accounts that remains unvested upon his
or her Separation from Service after the application of the terms of this Section 5.2 shall be
forfeited.
	 
	 	 	Notwithstanding the foregoing, in the event of a Separation from Service for Cause, (i) a
Participant’s vested interest in Company Contributions (other than “matching” contributions)
will be determined without regard to any accelerated vesting due to age and service and (ii)
amounts (other than “matching contributions”) to which a Participant otherwise would have
attained a vested interest in the year of Separation from Service and the three immediately
preceding Plan Years will be forfeited.





Article VI

Benefits




	6.1	 	Benefits, Generally. A Participant shall be entitled to the following benefits under
the Plan:






	 	(a)	 	Termination Benefit. Upon the Participant’s Separation from Service for reasons
other than death or Disability, he or she shall be entitled to a Termination Benefit.
The Termination Benefit shall be equal to the vested portion of the Termination Account
and the vested portion of any Specified Date Accounts with respect to which payments
have not yet commenced. The Termination Benefit shall be based on the value of that
Account(s) as of the end of the month following the month in which Separation from
Service occurs or such later date as the Committee, in its sole discretion, shall
determine. Payment of the Termination Benefit will be made or begin the first day of
the second month following the month in which Separation from Service occurs, provided,
however, that with respect to a Participant who is a Specified Employee as of the date
such Participant incurs a Separation from Service, payment will be made or begin on the
first day of the seventh month following the month in which such Separation from
Service occurs. If the Termination Benefit is to be paid in the form of installments,
any subsequent installment payments to a Specified Employee will be paid on the
anniversary of the date it would have been paid had the Participant not been a
Specified Employee.
	 
	 	(b)	 	Specified Date Benefit. If the Participant has established one or more
Specified Date Accounts, he or she shall be entitled to a Specified Date Benefit with
respect to each such Specified Date Account. The Specified Date Benefit shall be equal
to the vested portion of the Specified Date Account, based on the value of that Account
as of the end of the month designated by the Participant at the time the





 




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	 	 	 	Account was established. Payment of the Specified Date Benefit will be made or begin
the first day of the month following the designated month.
	 
	 	(c)	 	Disability Benefit. Upon a determination by the Committee that a Participant is
Disabled, he or she shall be entitled to a Disability Benefit. The Disability Benefit
shall be equal to the vested portion of the Termination Account and the vested portion
of any Specified Date Accounts with respect to which payments have not yet commenced.
The Disability Benefit shall be based on the value of the Accounts as of the last day
of the month following the month in which Disability occurs and will be paid the first
day of the second month following the month in which Disability occurs.
	 
	 	(d)	 	Death Distribution. In the event of the Participant’s death prior to Separation
from Service, his or her designated Beneficiary(ies) shall be entitled to a Death
Distribution. The Death Distribution shall be equal to the vested portion of the
Termination Account and the vested portion of any unpaid balances in any Specified Date
Accounts. The Death Distribution shall be based on the value of the Accounts as of the
end of the month following the month in which death occurred, with payment made the
first day of the second month following the month in which death occurred.
	 
	 	(e)	 	Unforeseeable Emergency Payments. A Participant who experiences an
Unforeseeable Emergency may submit a written request to the Committee to receive
payment of all or any portion of his or her vested Accounts. Whether a Participant or
Beneficiary is faced with an Unforeseeable Emergency permitting an emergency payment
shall be determined by the Committee based on the relevant facts and circumstances of
each case, but, in any case, a distribution on account of Unforeseeable Emergency may
not be made to the extent that such emergency is or may be reimbursed through insurance
or otherwise, by liquidation of the Participant’s assets, to the extent the liquidation
of such assets would not cause severe financial hardship, or by cessation of Deferrals
under this Plan. If an emergency payment is approved by the Committee, the amount of
the payment shall not exceed the amount reasonably necessary to satisfy the need,
taking into account the additional compensation that is available to the Participant as
the result of cancellation of deferrals to the Plan, including amounts necessary to pay
any taxes or penalties that the Participant reasonably anticipates will result from the
payment. The amount of the emergency payment shall be subtracted first from the vested
portion of the Participant’s Termination Account until depleted and then from the
vested Specified Date Accounts, beginning with the Specified Date Account with the
latest payment commencement date. Emergency payments shall be paid in a single lump sum
within the 90-day period following the date the payment is approved by the Committee.






	6.2	 	Form of Payment.






	 	(a)	 	Termination Benefit. A Participant who is entitled to receive a Termination
Benefit shall receive payment of such benefit in a single lump sum, unless the
Participant elects on his or her initial Compensation Deferral Agreement to have





 




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	 	 	 	such benefit paid in a series of substantially equal annual installments paid over
two (2) to ten (10) years.
	 
	 	(b)	 	Specified Date Benefit. The Specified Date Benefit shall be paid in a single
lump sum, unless the Participant elects on the Compensation Deferral Agreement with
which the account was established to have the Specified Date Account paid in
substantially equal annual installments over a period of two (2) to five (5) years, as
elected by the Participant.
	 
	 	 	 	Notwithstanding any election of a form of payment by the Participant, upon a
Separation from Service the unpaid balance of a Specified Date Account with respect
to which payments have not commenced shall be paid in accordance with the form of
payment applicable to the Termination, Disability or Death Benefit, as applicable.
If such benefit is payable in a single lump sum, the unpaid balance of all Specified
Date Accounts (including those in pay status) will be paid in a lump sum.
	 
	 	(c)	 	Disability Benefit. A Participant who is entitled to receive a Disability
Benefit shall receive payment of such benefit according to the Payment Schedule in
effect for the Termination Benefit at the time the Disability arises.
	 
	 	(d)	 	Death Distribution. A Designated Beneficiary who is entitled to receive a Death
Distribution shall receive payment of such benefit in a single lump sum.
	 
	 	(e)	 	Small Account Balances. Notwithstanding any Participant election or other
provisions of the Plan, a Participant’s Accounts will be paid in a single lump sum if,
upon the commencement of his or her Termination, Death or Disability Benefit, the
combined value of his or her Accounts is not greater than $25,000.
	 
	 	(f)	 	Rules Applicable to Installment Payments. If a Payment Schedule specifies
installment payments, annual payments will be made beginning as of the payment
commencement date for such installments and shall continue on each anniversary thereof
until the number of installment payments specified in the Payment Schedule has been
paid. The amount of each installment payment shall be determined by dividing (a) by
(b), where (a) equals the Account Balance as of the Valuation Date and (b) equals the
remaining number of installment payments.
	 
	 	 	 	For purposes of Article VII, installment payments will be treated as a single form
of payment. If a lump sum equal to less than 100% of the Termination Account is
paid, the payment commencement date for the installment form of payment will be the
first anniversary of the payment of the lump sum.






	6.3	 	Acceleration of or Delay in Payments. The Committee, in its sole and absolute
discretion, may elect to accelerate the time or form of payment of a benefit owed to the
Participant hereunder, provided such acceleration is permitted under Treas. Reg. Section
1.409A-3(j)(4). The Committee may also, in its sole and absolute discretion, delay the time
for payment of a benefit owed to the Participant hereunder, to the extent permitted under
Treas. Reg. Section 1.409A-2(b)(7). If the Plan receives a domestic relations order





 




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	 	 	 	 (within the meaning of Code Section 414(p)(1)(B)) directing that all or a portion of a
Participant’s Accounts be paid to an “alternate payee,” any amounts to be paid to the
alternate payee(s) shall be paid in a single lump sum.





Article VII

Modifications to Payment Schedules




	7.1	 	Participant’s Right to Modify. A Participant may modify any or all of the
alternative Payment Schedules with respect to an Account, consistent with the permissible
Payment Schedules available under the Plan, provided such modification complies with the
requirements of this Article VII.
	 
	7.2	 	Time of Election. The date on which a modification election is submitted to the
Committee must be at least twelve months prior to the date on which payment is scheduled to
commence under the Payment Schedule in effect prior to the modification.
	 
	7.3	 	Date of Payment under Modified Payment Schedule. Except with respect to
modifications that relate to the payment of a Death Distribution or a Disability Benefit, the
date payments are to commence under the modified Payment Schedule must be no earlier than five
years after the date payment would have commenced under the original Payment Schedule. Under
no circumstances may a modification election result in an acceleration of payments in
violation of Code Section 409A.
	 
	7.4	 	Effective Date. A modification election submitted in accordance with this Article VII
is irrevocable upon receipt by the Committee and becomes effective 12 months after such date.
	 
	7.5	 	Effect on Accounts. An election to modify a Payment Schedule is specific to the
Account or payment event to which it applies, and shall not be construed to affect the Payment
Schedules of any other Accounts.





Article VIII

Valuation of Account Balances; Investments




	8.1	 	Valuation. Deferrals shall be credited to appropriate Accounts on the date such
Compensation would have been paid to the Participant absent the Compensation Deferral
Agreement. Company Contributions shall be credited to the Termination Account at the times
determined by the Committee. Valuation of Accounts shall be performed under procedures
approved by the Committee.
	 
	8.2	 	Earnings Credit. Each Account will be credited with Earnings on each Business Day,
based upon the Participant’s investment allocation among a menu of investment options selected
in advance by the Committee, in accordance with the provisions of this Article VIII
(“investment allocation”).
	 
	8.3	 	Investment Options. Investment options will be determined by the Committee. The
Committee, in its sole discretion, shall be permitted to add or remove investment options





 




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	 	 	from the Plan menu from time to time, provided that any such additions or removals of
investment options shall not be effective with respect to any period prior to the effective
date of such change.
	 
	8.4	 	Investment Allocations. A Participant’s investment allocation constitutes a deemed,
not actual, investment among the investment options comprising the investment menu. At no time
shall a Participant have any real or beneficial ownership in any investment option included in
the investment menu, nor shall the Company or any trustee acting on its behalf have any
obligation to purchase actual securities as a result of a Participant’s investment allocation.
A Participant’s investment allocation shall be used solely for purposes of adjusting the value
of a Participant’s Account Balances.
	 
	 	 	A Participant shall specify an investment allocation for each of his Accounts in accordance
with procedures established by the Committee. Allocation among the investment options must
be designated in increments of 1%. The Participant’s investment allocation will become
effective on the same Business Day or, in the case of investment allocations received after
a time specified by the Committee, the next Business Day.
	 
	 	 	A Participant may change an investment allocation on any Business Day, both with respect to
future credits to the Plan and with respect to existing Account Balances, in accordance with
procedures adopted by the Committee. Changes shall become effective on the same Business Day
or, in the case of investment allocations received after a time specified by the Committee,
the next Business Day, and shall be applied prospectively.
	 
	8.5	 	Unallocated Deferrals and Accounts. If the Participant fails to make an investment
allocation with respect to an Account, such Account shall be invested in an investment option,
the primary objective of which is the preservation of capital, as determined by the Committee.





Article IX

Administration




	9.1	 	Plan Administration. This Plan shall be administered by the Committee which shall
have discretionary authority to make, amend, interpret and enforce all appropriate rules and
regulations for the administration of this Plan and to utilize its discretion to decide or
resolve any and all questions, including but not limited to eligibility for benefits and
interpretations of this Plan and its terms, as may arise in connection with the Plan. Claims
for benefits shall be filed with the Committee and resolved in accordance with the claims
procedures in Article XII.
	 
	9.2	 	Withholding. The Employer shall have the right to withhold from any payment due
under the Plan (or with respect to any amounts credited to the Plan) any taxes required by law
to be withheld in respect of such payment (or credit). Withholdings with respect to amounts
credited to the Plan shall be deducted from Compensation that has not been deferred to the
Plan.
	 
	9.3	 	Indemnification. The Employers shall indemnify and hold harmless each employee,
officer, director, agent or organization, to whom or to which are delegated duties,





 




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	 	 	responsibilities, and authority under the Plan or otherwise with respect to administration
of the Plan, including, without limitation, the Committee and its agents, against all
claims, liabilities, fines and penalties, and all expenses reasonably incurred by or imposed
upon him or it (including but not limited to reasonable attorney fees) which arise as a
result of his or its actions or failure to act in connection with the operation and
administration of the Plan to the extent lawfully allowable and to the extent that such
claim, liability, fine, penalty, or expense is not paid for by liability insurance purchased
or paid for by the Employer. Notwithstanding the foregoing, the Employer shall not indemnify
any person or organization if his or its actions or failure to act are due to gross
negligence or willful misconduct or for any such amount incurred through any settlement or
compromise of any action unless the Employer consents in writing to such settlement or
compromise.
	 
	9.4	 	Delegation of Authority. In the administration of this Plan, the Committee 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 legal counsel who shall be legal counsel to the
Company.
	 
	9.5	 	Binding Decisions or Actions. The decision or action of the Committee in respect of
any question arising out of or in connection with the administration, interpretation and
application of the Plan and the rules and regulations thereunder shall be final and conclusive
and binding upon all persons having any interest in the Plan.





Article X

Amendment and Termination




	10.1	 	Amendment and Termination. The Company may at any time and from time to time amend
the Plan or may terminate the Plan as provided in this Article X.
	 
	10.2	 	Amendments. The Company may at any time amend the Plan, provided that such amendment
shall not cancel, reduce, or otherwise adversely affect the amount of benefits of any
Participant accrued (and any form of payment elected) as of the date of any such amendment,
without the consent of the Participant.
	 
	10.3	 	Termination. The Company, by action taken by its Board of Directors, may terminate
the Plan and pay Participants and Beneficiaries their Account Balances in a single lump sum at
any time, to the extent and in accordance with Treas. Reg. Section 1.409A-3(j)(4)(ix).





Article XI

Informal Funding




	11.1	 	General Assets. Obligations established under the terms of the Plan may be satisfied
from the general funds of the Company, or a trust described in this Article XI. No
Participant, spouse or Beneficiary shall have any right, title or interest whatever in assets
of the Company. Nothing contained in this Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind, or a fiduciary
relationship, between the Employers and any Employee, spouse, or Beneficiary. To the





 




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	 	 	extent that any person acquires a right to receive payments hereunder, such rights are no
greater than the right of an unsecured general creditor of the Company.
	 
	11.2	 	Rabbi Trust. The Company may, in its sole discretion, establish a grantor trust, commonly
known as a rabbi trust, as a vehicle for accumulating assets to pay benefits under the Plan.
Payments under the Plan may be paid from the general assets of the Company or from the assets
of any such rabbi trust. Payment from any such source shall reduce the obligation owed to the
Participant or Beneficiary under the Plan.





Article XII

Claims




	12.1	 	Filing a Claim. Any controversy or claim arising out of or relating to the Plan
shall be filed in writing with the Committee which shall make all determinations concerning
such claim. Any claim filed with the Committee and any decision by the Committee denying such
claim shall be in writing and shall be delivered to the Participant or Beneficiary filing the
claim (the “Claimant”).






	 	a.	 	In General. Notice of a denial of benefits (other than Disability benefits)
will be provided within ninety (90) days of the Committee’s receipt of the Claimant’s
claim for benefits. If the Committee determines that it needs additional time to review
the claim, the Committee will provide the Claimant with a notice of the extension
before the end of the initial ninety (90) day period. The extension will not be more
than ninety (90) days from the end of the initial ninety (90) day period and the notice
of extension will explain the special circumstances that require the extension and the
date by which the Committee expects to make a decision.
	 
	 	b.	 	Disability Benefits. Notice of denial of Disability benefits will be provided
within forty-five (45) days of the Committee’s receipt of the Claimant’s claim for
Disability benefits. If the Committee determines that it needs additional time to
review the Disability claim, the Committee will provide the Claimant with a notice of
the extension before the end of the initial forty-five (45) day period. If the
Committee determines that a decision cannot be made within the first extension period
due to matters beyond the control of the Committee, the time period for making a
determination may be further extended for an additional thirty (30) days. If such an
additional extension is necessary, the Committee shall notify the Claimant prior to the
expiration of the initial thirty (30) day extension. Any notice of extension shall
indicate the circumstances necessitating the extension of time, the date by which the
Committee expects to furnish a notice of decision, the specific standards on which such
entitlement to a benefit is based, the unresolved issues that prevent a decision on the
claim and any additional information needed to resolve those issues. A Claimant will be
provided a minimum of forty-five (45) days to submit any necessary additional
information to the Committee. In the event that a thirty (30) day extension is
necessary due to a Claimant’s failure to submit information necessary to decide a
claim, the period for furnishing a notice of decision shall be tolled from the date on
which the notice of the extension is





 




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	 	 	 	sent to the Claimant until the earlier of the date the Claimant responds to the
request for additional information or the response deadline.
	 
	 	c.	 	Contents of Notice. If a claim for benefits is completely or partially denied,
notice of such denial shall be in writing and shall set forth the reasons for denial in
plain language. The notice shall (i) cite the pertinent provisions of the Plan document
and (ii) explain, where appropriate, how the Claimant can perfect the claim, including
a description of any additional material or information necessary to complete the claim
and why such material or information is necessary. The claim denial also shall include
an explanation of the claims review procedures and the time limits applicable to such
procedures, including a statement of the Claimant’s right to bring a civil action under
Section 502(a) of ERISA following an adverse decision on review. In the case of a
complete or partial denial of a Disability benefit claim, the notice shall provide a
statement that the Committee will provide to the Claimant, upon request and free of
charge, a copy of any internal rule, guideline, protocol, or other similar criterion
that was relied upon in making the decision.






	12.2	 	Appeal of Denied Claims. A Claimant whose claim has been completely or partially
denied shall be entitled to appeal the claim denial by filing a written appeal with a
committee designated to hear such appeals (the “Appeals Committee”). A Claimant who timely
requests a review of the denied claim (or his or her authorized representative) may review,
upon request and free of charge, copies of all documents, records and other information
relevant to the denial and may submit written comments, documents, records and other
information relevant to the claim to the Appeals Committee. All written comments, documents,
records, and other information shall be considered “relevant” if the information (i) was
relied upon in making a benefits determination, (ii) was submitted, considered or generated in
the course of making a benefits decision regardless of whether it was relied upon to make the
decision, or (iii) demonstrates compliance with administrative processes and safeguards
established for making benefit decisions. The Appeals Committee may, in its sole discretion
and if it deems appropriate or necessary, decide to hold a hearing with respect to the claim
appeal.






	 	(a)	 	In General. Appeal of a denied benefits claim (other than a Disability benefits
claim) must be filed in writing with the Appeals Committee no later than sixty (60)
days after receipt of the written notification of such claim denial. The Appeals
Committee shall make its decision regarding the merits of the denied claim within sixty
(60) days following receipt of the appeal (or within one hundred and twenty (120) days
after such receipt, in a case where there are special circumstances requiring extension
of time for reviewing the appealed claim). If an extension of time for reviewing the
appeal is required because of special circumstances, written notice of the extension
shall be furnished to the Claimant prior to the commencement of the extension. The
notice will indicate the special circumstances requiring the extension of time and the
date by which the Appeals Committee expects to render the determination on review. The
review will take into account comments, documents, records and other information
submitted by the Claimant relating to the claim without regard to whether such
information was submitted or considered in the initial benefit determination.





 




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	 	(b)	 	Disability Benefits. Appeal of a denied Disability benefits claim must be filed
in writing with the Appeals Committee no later than one hundred eighty (180) days after
receipt of the written notification of such claim denial. The review shall be conducted
by the Appeals Committee (exclusive of the person who made the initial adverse decision
or such person’s subordinate). In reviewing the appeal, the Appeals Committee shall (i)
not afford deference to the initial denial of the claim, (ii) consult a medical
professional who has appropriate training and experience in the field of medicine
relating to the Claimant’s disability and who was neither consulted as part of the
initial denial nor is the subordinate of such individual and (iii) identify the medical
or vocational experts whose advice was obtained with respect to the initial benefit
denial, without regard to whether the advice was relied upon in making the decision.
The Appeals Committee shall make its decision regarding the merits of the denied claim
within forty-five (45) days following receipt of the appeal (or within ninety (90) days
after such receipt, in a case where there are special circumstances requiring extension
of time for reviewing the appealed claim). If an extension of time for reviewing the
appeal is required because of special circumstances, written notice of the extension
shall be furnished to the Claimant prior to the commencement of the extension. The
notice will indicate the special circumstances requiring the extension of time and the
date by which the Appeals Committee expects to render the determination on review.
Following its review of any additional information submitted by the Claimant, the
Appeals Committee shall render a decision on its review of the denied claim.
	 
	 	(c)	 	Contents of Notice. If a benefits claim is completely or partially denied on
review, notice of such denial shall be in writing and shall set forth the reasons for
denial in plain language.
	 
	 	 	 	The decision on review shall set forth (i) the specific reason or reasons for the
denial, (ii) specific references to the pertinent Plan provisions on which the
denial is based, (iii) a statement that the Claimant is entitled to receive, upon
request and free of charge, reasonable access to and copies of all documents,
records, or other information relevant (as defined above) to the Claimant’s claim,
and (iv) a statement describing any voluntary appeal procedures offered by the plan
and a statement of the Claimant’s right to bring an action under Section 502(a) of
ERISA.
	 
	 	(d)	 	For the denial of a Disability benefit, the notice will also include a
statement that the Appeals Committee will provide, upon request and free of charge, (i)
any internal rule, guideline, protocol or other similar criterion relied upon in making
the decision, (ii) any medical opinion relied upon to make the decision and (iii) the
required statement under Section 2560.503-1(j)(5)(iii) of the Department of Labor
regulations.






	12.3	 	Legal Action. A Claimant may not bring any legal action, including commencement of
any arbitration, relating to a claim for benefits under the Plan unless and until the Claimant
has followed the claims procedures under the Plan and exhausted his or her





 




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	 	 	administrative remedies under such claims procedures. Any such legal action must be
commenced within one year of a final determination hereunder with respect to such claim.
	 
	 	 	If a Participant or Beneficiary prevails in a legal proceeding brought under the Plan to
enforce the rights of such Participant or any other similarly situated Participant or
Beneficiary, in whole or in part, the Company shall reimburse such Participant or
Beneficiary for all legal costs, expenses, attorneys’ fees and such other liabilities
incurred as a result of such proceedings.
	 
	12.4	 	Discretion of Appeals Committee. All interpretations, determinations and decisions
of the Appeals Committee with respect to any claim shall be made in its sole discretion, and
shall be final and conclusive.
	 
	12.5	 	Arbitration. If any claim or controversy between the Committee and a Participant or
Beneficiary is not resolved through the claims procedure set forth in Article XII, such claim
shall be submitted to and resolved exclusively by expedited binding arbitration by a single
arbitrator, excluding any claim(s) for which arbitration is not permissible under applicable
law. Arbitration shall be conducted in accordance with the following procedures:






The complaining party shall promptly send written notice to the other party
identifying the matter in dispute and the proposed remedy. Following the giving of
such notice, the parties shall meet and attempt in good faith to resolve the matter.
In the event the parties are unable to resolve the matter within twenty one (21)
days, the parties shall meet and attempt in good faith to select a single arbitrator
acceptable to both parties. If a single arbitrator is not selected by mutual consent
within ten (10) Business Days following the giving of the written notice of dispute,
an arbitrator shall be selected from a list of nine persons each of whom shall be an
attorney who is either engaged in the active practice of law or recognized
arbitrator and who, in either event, is experienced in serving as an arbitrator in
disputes between employers and employees, which list shall be provided by the main
office of either JAMS, the American Arbitration Associate (“AAA”) or the Federal
Mediation and Conciliation Service. If, within three Business Days of the parties’
receipt of such list, the parties are unable to agree on an arbitrator from the
list, then the parties shall each strike names alternatively from the list, with the
first to strike being determined by the flip of a coin. After each party has had
four strikes, the remaining name on the list shall be the arbitrator. If such person
is unable to serve for any reason, the parties shall repeat this process until an
arbitrator is selected.




Unless the parties agree otherwise, within sixty (60) days of the selection of the
arbitrator, a hearing shall be conducted before such arbitrator at a time and a
place agreed upon by the parties. In the event the parties are unable to agree upon
the time or place of the arbitration, the time and place shall be designated by the
arbitrator after consultation with the parties. Within thirty (30) days of the
conclusion of the arbitration hearing, the arbitrator shall issue an award,
accompanied by a written decision explaining the basis for the arbitrator’s award.



 




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In any arbitration hereunder, the Company shall pay all administrative fees of the
arbitration and all fees of the arbitrator, except that the Participant or
Beneficiary may, if he/she/it wishes, pay up to one-half of those amounts. Each
party shall pay its own attorneys’ fees, costs, and expenses, unless the arbitrator
orders otherwise. The prevailing party in such arbitration, as determined by the
arbitrator, and in any enforcement or other court proceedings, shall be entitled, to
the extent permitted by law, to reimbursement from the other party for all of the
prevailing party’s costs (including but not limited to the arbitrator’s
compensation), expenses, and attorneys’ fees. The arbitrator shall have no authority
to add to or to modify this Plan, shall apply all applicable law, and shall have no
lesser and no greater remedial authority than would a court of law resolving the
same claim or controversy. The arbitrator shall, upon an appropriate motion, dismiss
any claim without an evidentiary hearing if the party bringing the motion
establishes that it would be entitled to summary judgment if the matter had been
pursued in court litigation.




The parties shall be entitled to discovery as follows: Each party may take no more
than three depositions. The Committee may depose the Participant or Beneficiary plus
two other witnesses, and the Participant or Beneficiary may depose the Company or
the Committee, pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure,
plus two other witnesses. Each party may make such reasonable document discovery
requests as are allowed in the discretion of the arbitrator.




The decision of the arbitrator shall be final, binding, and non-appealable, and may
be enforced as a final judgment in any court of competent jurisdiction.




This arbitration provision of the Plan shall extend to claims against any parent,
subsidiary, or affiliate of each party, and, when acting within such capacity, any
officer, director, shareholder, Participant, Beneficiary, or agent of any party, or
of any of the above, and shall apply as well to claims arising out of state and
federal statutes and local ordinances as well as to claims arising under the common
law or under this Plan.




Notwithstanding the foregoing, and unless otherwise agreed between the parties,
either party may apply to a court for provisional relief, including a temporary
restraining order or preliminary injunction, on the ground that the arbitration
award to which the applicant may be entitled may be rendered ineffectual without
provisional relief.




Any arbitration hereunder shall be conducted in accordance with the Federal
Arbitration Act: provided, however, that, in the event of any inconsistency between
the rules and procedures of the Act and the terms of this Plan, the terms of this
Plan shall prevail.




If any of the provisions of this Section 12.6(A) are determined to be unlawful or
otherwise unenforceable, in the whole part, such determination shall not affect the
validity of the remainder of this section and this section shall be reformed to the



 




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extent necessary to carry out its provisions to the greatest extent possible and to
insure that the resolution of all conflicts between the parties, including those
arising out of statutory claims, shall be resolved by neutral, binding arbitration.
If a court should find that the provisions of this Section 12.6(A) are not
absolutely binding, then the parties intend any arbitration decision and award to be
fully admissible in evidence in any subsequent action, given great weight by any
finder of fact and treated as determinative to the maximum extent permitted by law.




The parties do not agree to arbitrate any putative class action or any other
representative action. The parties agree to arbitrate only the claims(s) of a single
Participant or Beneficiary.



Article XIII

General Provisions




	13.1	 	Assignment. No interest of any Participant, spouse or Beneficiary under this Plan and
no benefit payable hereunder shall be assigned as security for a loan, and any such purported
assignment shall be null, void and of no effect, nor shall any such interest or any such
benefit be subject in any manner, either voluntarily or involuntarily, to anticipation, sale,
transfer, assignment or encumbrance by or through any Participant, spouse or Beneficiary.
Notwithstanding anything to the contrary herein, however, the Committee has the discretion to
make payments to an alternate payee in accordance with the terms of a domestic relations order
(as defined in Code Section 414(p)(1)(B)).
	 
	 	 	The Company may assign any or all of its liabilities under this Plan in connection with any
restructuring, recapitalization, sale of assets or other similar transactions affecting a
Participating Employer without the consent of the Participant.
	 
	13.2	 	Accounts Taxable Under Code Section 409A. The Plan is intended to constitute a plan
of deferred compensation that meets the requirements for deferral of income taxation under
Code Section 409A. The Committee, pursuant to its authority to interpret the Plan, may sever
from the Plan or any Compensation Deferral Agreement any provision or exercise of a right that
otherwise would result in a violation of Code Section 409A.
	 
	13.3	 	No Legal or Equitable Rights or Interest. No Participant or other person shall have
any legal or equitable rights or interest in this Plan that are not expressly granted in this
Plan. Participation in this Plan does not give any person any right to be retained in the
service of the Company or an Employer. The right and power of the Company or an Employer to
dismiss or discharge an Employee is expressly reserved. The Company and Committee make no
representations or warranties as to the tax consequences to a Participant or a Participant’s
beneficiaries resulting from a deferral of income pursuant to the Plan.
	 
	13.4	 	No Employment Contract. Nothing contained herein shall be construed to constitute a
contract of employment between an Employee and an Employer.
	 
	13.5	 	Notice. Any notice or filing required or permitted to be delivered to the Committee
under this Plan shall be delivered in writing, in person, or through such electronic means as
is established by the Committee. Notice shall be deemed given as of the date of delivery or,





 




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	 	 	if delivery is made by mail, as of the date shown on the postmark on the receipt for
registration or certification. Written transmission shall be sent by certified mail to:





AUTONATION, INC.

ATTN: MANAGER, RETIREMENT PLANS

110 SE 6TH STREET, 23RD FLOOR

FT. LAUDERDALE, FL 33301





	 	 	Any notice or filing required or permitted to be given to a Participant under this Plan
shall be sufficient if in writing or hand-delivered, or sent by mail to the last known
address of the Participant.
	 
	13.6	 	Headings. The headings of Sections are included solely for convenience of reference,
and if there is any conflict between such headings and the text of this Plan, the text shall
control.
	 
	13.7	 	Invalid or Unenforceable 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 the Committee may elect in its sole discretion to construe such invalid
or unenforceable provisions in a manner that conforms to applicable law or as if such
provisions, to the extent invalid or unenforceable, had not been included.
	 
	13.8	 	Lost Participants or Beneficiaries. Any Participant or Beneficiary who is entitled
to a benefit from the Plan has the duty to keep the Committee advised of his or her current
mailing address. If benefit payments are returned to the Plan or are not presented for payment
after a reasonable amount of time, the Committee shall presume that the payee is missing. The
Committee, after making such efforts as in its discretion it deems reasonable and appropriate
to locate the payee, shall stop payment on any uncashed checks and may discontinue making
future payments until contact with the payee is restored.
	 
	13.9	 	Facility of Payment to a Minor. If a distribution is to be made to a minor, or to a
person who is otherwise incompetent, then the Committee may, in its discretion, make such
distribution (i) to the legal guardian, or if none, to a parent of a minor payee with whom the
payee maintains his or her residence, or (ii) to the conservator or committee or, if none, to
the person having custody of an incompetent payee. Any such distribution shall fully discharge
the Committee, the Company, and the Plan from further liability on account thereof.





 




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	13.10	 	Governing Law. To the extent not preempted by ERISA, the laws of the State of
Florida shall govern the construction and administration of the Plan.





IN
WITNESS WHEREOF, the undersigned executed this Plan as of the
24th day of November,
2008, to be effective as of the Effective Date.



AutoNation, Inc.




By: C.
Coleman Edmunds (Print Name)




Its:
Senior Vice President (Title)




/s/ C.
Coleman Edmunds (Signature)




 




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