exv10w4






EXHIBIT 10.4




ASSISTED LIVING CONCEPTS, INC.




EXECUTIVE RETIREMENT PROGRAM




EFFECTIVE JANUARY 1, 2005, AS AMENDED AND RESTATED DECEMBER 16, 2008




ARTICLE I




INTRODUCTION




     This document replaces the Extendicare Health Services, Inc. Executive Retirement Program as
amended and restated effective January 1, 2005 with respect to employees of Assisted Living
Concepts, Inc. No benefits shall be payable to Assisted Living Concepts, Inc. employees under the
terms of the Extendicare Health Services, Inc. Executive Retirement Program, as amended and
restated effective January 1, 2005, but, instead, the benefits previously provided by that Program
are provided for herein. This document applies only to amounts earned or first vested after
calendar year 2004. Separately, Assisted Living Concepts, Inc. has adopted a document to replace
the document which it had jointly maintained with Extendicare Health Services, Inc. with respect to
amounts earned and vested prior to 2005. That replacement document is referred to herein as the
“Frozen Plan”. No further amounts shall be earned and vested under the Frozen Plan. All amounts
credited under the Frozen Plan prior to January 1, 2005 which were not yet vested as of January 1,
2005 and all contributions to the Plan for periods on or after January 1, 2005 shall be governed by
the terms and provisions of this document. Nothing in this document shall apply to amounts earned
and vested prior to 2005 and past and future interest earnings thereon. This document is intended
to comply with the provisions of Section 409A of the Internal Revenue Code and shall be interpreted
accordingly. If any provision or term of this document would be prohibited by or inconsistent with
the requirements of Section 409A of the Code, then such provision or term shall be deemed to be
reformed to comply with Section 409A of the Code.



ARTICLE II




DEFINITIONS




     The following definitions shall be applicable throughout the Plan:



     2.1 “Account” means the account credited from time to time with bookkeeping amounts
equal to contributions on behalf of the Participant pursuant to Section 3.2 and earnings credited
on such amounts in accordance with Article IV. The Account shall also hold those contributions
(and earnings thereon) which had been credited to the account of the Participant under the Frozen
Plan prior to 2005 which were not vested prior to 2005.



     2.2 “Administrator” means the committee designated by the Corporation’s Board of
Directors under Plan Section 7.1, which shall be responsible for administering and interpreting the
Plan.



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     2.3 “Base Salary” means the base salary paid to a Participant by the Corporation in a
specified period prior to elective deferrals under any deferred compensation plan or agreement
between the Participant and the Corporation and exclusive of bonuses, fringe benefits, imputed
income, or any other form of extra compensation.



     2.4 “Beneficiary” means the person, persons, or entity designated by the Participant
to receive any benefits payable under the Plan on or after the Participant’s death. Each
Participant shall be permitted to name, change or revoke the Participant’s designation of a
Beneficiary in writing on a form and in the manner prescribed by the Corporation; provided,
however, that the designation on file with the Corporation at the time of the Participant’s death
shall be controlling. Should a Participant fail to make a valid Beneficiary designation or leave
no named Beneficiary surviving, any benefits due shall be paid to such Participant’s spouse, if
living; or if not living, then any benefits due shall be paid to such Participant’s estate.



     2.5 “Code” means the Internal Revenue Code of 1986, including any subsequent
amendments.



     2.6 “Corporation” means Assisted Living Concepts, Inc., and each of its affiliates
which has adopted the Plan or may adopt the Plan; provided, however, that for purposes of the power
to amend or terminate the Plan or take any other action under or with respect to the Plan, except
for the payment of benefits, the term “Corporation” shall refer only to Assisted Living Concepts,
Inc.



     2.7 “Effective Date” means January 1, 2005.



     2.8 “ERISA” means the Employee Retirement Income Security Act of 1974, including any
subsequent amendments.



     2.9 “Participant” means a key management or highly compensated employee designated as
eligible to participate in the Plan for a Plan Year under Section 3.1 (who shall be known as
“Active Participants” for such Plan Year) and any person who previously participated in the Plan
and is entitled to benefits.



     2.10 “Plan” means the Assisted Living Concepts, Inc. Executive Retirement Program, as
set forth herein, and as may be amended from time to time.



     2.11 “Plan Year” means the calendar year.



     2.12 “Separation from Service”




     (a) In General. The Participant shall have a Separation from Service with the
Corporation if the Participant dies, retires, or otherwise has a termination of employment
with the Corporation. However, for purposes of this Section 2.12, the employment
relationship is treated as continuing intact while the individual is on military leave,
sick leave, or other bona fide leave of absence if the period of such leave does not exceed
six months, or if longer, so long as the individual retains a right to reemployment with
the Corporation under an applicable statute or by contract. For purposes of this paragraph
(a) of this Section 2.12, a leave of absence constitutes a bona fide leave of absence only
if there is a reasonable expectation that the Participant will return to perform services
for the Corporation. If the period of leave exceeds six months and the individual does not
retain a right to reemployment under an applicable statute or by contract, the employment



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relationship is deemed to terminate on the first date immediately following such six-month
period. Notwithstanding the foregoing, where a leave of absence is due to any medically
determinable physical or mental impairment that can be expected to result in death or can
be expected to last for a continuous period of not less than six months, where such
impairment causes the Participant to be unable to perform the duties of his or her position
of employment or any substantially similar position of employment, a 29-month period of
absence may be substituted for such six-month period.




     (b) Termination of Employment. Whether a termination of employment has
occurred is determined based on whether the facts and circumstances indicate that the
Corporation and Participant reasonably anticipated that no further services would be
performed after a certain date or that the level of bona fide services the Participant
would perform after such date (whether as an employee or as an independent contractor)
would permanently decrease to no more than 20 percent of the average level of bona fide
services performed (whether as an employee or an independent contractor) over the
immediately preceding 36-month period (or, the full period of services to the Corporation
if the Participant has been providing services to the Corporation less than 36 months).
Facts and circumstances to be considered in making this determination include, but are not
limited to, whether the Participant continues to be treated as an employee for other
purposes (such as continuation of salary and participation in employee benefit programs),
whether similarly situated service providers have been treated consistently, and whether
the Participant is permitted, and realistically available, to perform services for other
service recipients in the same line of business. The Participant is presumed to have
Separated from Service where the level of bona fide services performed decreases to a level
equal to 20 percent or less of the average level of services performed by the employee
during the immediately preceding 36-month period. The Participant will be presumed not to
have Separated from Service where the level of bona fide services performed continues at a
level that is 50 percent or more of the average level of service performed by the
Participant during the immediately preceding 36-month period. No presumption applies to a
decrease in the level of bona fide services performed to a level that is more than 20
percent and less than 50 percent of the average level of bona fide services performed
during the immediately preceding 36-month period. The presumption is rebuttable by
demonstrating that the Corporation and the Participant reasonably anticipated that as of a
certain date the level of bona fide services would be reduced permanently to a level less
than or equal to 20 percent of the average level of bona fide services provided during the
immediately preceding 36-month period or the full period of services to the Corporation if
the Participant has been providing services to the Corporation less than 36 months (or that
the level of bona fide services would not be so reduced). For example, the Participant may
demonstrate that the Corporation and the Participant reasonably anticipated that the
Participant would cease providing services, but that, after the original cessation of
services, business circumstances such as termination of the Participant’s replacement
caused the Participant to return to employment. Although the Participant’s return to
employment may cause the Participant to be presumed to have continued in employment because
the Participant is providing services at a rate equal to the rate at which the Participant
was providing services before the termination of employment, the facts and circumstances in
this case would demonstrate that at the time the Participant originally ceased to provide
services, the Corporation reasonably anticipated that the Participant would not provide
services in the future. For purposes of this paragraph (b), for periods during which the
Participant is on a paid bona fide leave of absence (as defined in paragraph (a) of this
Section 2.12) and has not otherwise terminated employment pursuant to paragraph (a) of this
Section 2.12, the Participant is



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treated as providing bona fide services at a level equal to the level of services that the
Participant would have been required to perform to receive the compensation paid with
respect to such leave of absence. Periods during which the Participant is on an unpaid bona
fide leave of absence (as defined in paragraph (a) of this Section 2.12) and has not
otherwise terminated employment pursuant to paragraph (a) of this Section 2.12, are
disregarded for purposes of this paragraph (b) of this Section 2.12 (including for purposes
of determining the applicable 36-month (or shorter) period).




     (c) Asset Purchase Transactions. Where as part of a sale or other disposition
of assets by the Corporation as seller to an unrelated service recipient (buyer), a
Participant of the Corporation would otherwise experience a Separation from Service with
the Corporation, the Corporation and the buyer may retain the discretion to specify, and
may specify, whether a Participant providing services to the Corporation immediately before
the asset purchase transaction and providing services to the buyer after and in connection
with the asset purchase transaction has experienced a Separation from Service, provided
that the asset purchase transaction results from bona fide, arm’s length negotiations, all
service providers providing services to the Corporation immediately before the asset
purchase transaction and providing services to the buyer after and in connection with the
asset purchase transaction are treated consistently (regardless of position at the
Corporation) for purposes of applying the provisions of any nonqualified deferred
compensation plan, and such treatment is specified in writing no later than the closing
date of the asset purchase transaction. For purposes of this paragraph (c), references to
a sale or other disposition of assets, or an asset purchase transaction, refer only to a
transfer of substantial assets, such as a plant or division or substantially all the assets
of a trade or business.




     (d) Dual Status. If a Participant provides services both as an employee of
the Corporation and as an independent contractor of the Corporation, the Participant must
separate from service both as an employee and as an independent contractor to be treated as
having Separated from Service. If a Participant ceases providing services as an
independent contractor and begins providing services as an employee, or ceases providing
services as an employee and begins providing services as an independent contractor, the
Participant will not be considered to have a Separation from Service until the Participant
has ceased providing services in both capacities. Notwithstanding the foregoing, if a
Participant provides services both as an employee of the Corporation and a member of the
board of directors of the Corporation, the services provided as a director are not taken
into account in determining whether the Participant has a Separation from Service as an
employee for purposes of this Plan unless this Plan is aggregated with any plan in which
the Participant participates as a director under IRS Regulation Section 1.409A-1(c)(2)(ii).



     2.13 “Unforeseeable Emergency” means a severe financial hardship to a Participant
resulting from an illness or accident of the Participant or the Participant’s spouse, beneficiary
or dependent (as defined in Section 152(a) of the Code without regard to Section 151 (b)(1), (b)(2)
and (d)(1)(B)), 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. For example, the imminent foreclosure of
or eviction from the Participant’s primary residence may constitute an Unforeseeable Emergency. In
addition, the need to pay for medical expenses, including non-refundable deductibles, as well



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as for the costs of prescription drug medication, may constitute an Unforeseeable Emergency.
Finally, the need to pay for funeral expenses of a spouse, beneficiary or a dependent (as defined
in Code section 152(a) without regard to Section 151 (b)(1), (b)(2) and (d)(1)(B)) may also
constitute an Unforeseeable Emergency. Except as otherwise provided above, the purchase of a home
and the payment of college tuition are not Unforeseeable Emergencies. Whether a Participant is
faced with an Unforeseeable Emergency is to be determined based on the relevant facts and
circumstances of each case.



ARTICLE III




PARTICIPATION AND CONTRIBUTIONS




     3.1 Determination of Participants. Within a reasonable period of time prior to the
beginning of a Plan Year or at any time during a Plan Year, the Administrator will designate
employees who will be eligible to become Active Participants in the Plan for that Plan Year (or the
remainder of such Plan Year). An employee designated as an Active Participant for a Plan Year
shall remain an Active Participant until the employee’s Separation from Service or the
Administrator or the Board of Directors of the Corporation takes action to terminate such
employee’s participation effective on the first day of any Plan Year subsequent to the date of such
action by the Administrator or the Board.



     3.2 Amount of Contributions. For each month, beginning with the month in which falls
the Participant’s effective date of participation, the Corporation shall make a contribution to the
Account of the Participant equal to 10% of the Participant’s Base Salary for that month. The
contribution for a month shall be credited to the Participant’s Account as of the last day of the
month for which it is made. No contributions will be made for a Participant for the calendar month
in which occurs the date of his Separation from Service with the Corporation or in any subsequent
calendar month.



     3.3 Contributions Are Hypothetical. The contributions under this Plan are
hypothetical contributions only.



ARTICLE IV




ACCOUNTS; EARNINGS




     4.1 Credits to Accounts. Bookkeeping amounts equal to the amounts contributed by the
Corporation pursuant to Section 3.2 shall be credited to such Participant’s Account at the time
specified in Section 3.2.



     4.2 Valuation of Account.




     (a) The Participant’s Account shall be credited or charged with deemed earnings or
losses as if it were invested in accordance with paragraph (b) below.




     (b) (i) The investment funds available hereunder for the deemed investment of the
Account shall be such funds as the Administrator shall from time to time determine.
However, in no event shall the Corporation be required to make any investment in any such
fund and, to the extent such investments are made, such



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investments shall remain an asset of the Corporation subject to the claims of its general
creditors.




     (ii) On the date credited to the Participant’s Account, contributions shall be
deemed to be invested in one or more of the investment funds designated by the
Participant for such deemed investment. Once made, the Participant’s investment
designation shall continue in effect for all future contributions until changed by
the Participant. Any such change may be prospectively elected by the Participant
at the times established by the Administrator, which shall be no less frequently
than quarterly, and shall be effective only for contributions, credited from and
after its effective date.




     (iii) A Participant may prospectively elect to reallocate his Account balance
among the investment funds at the times established by the Administrator, which
shall be no less frequently than quarterly.




     (iv) The valuation of the funds held in the Account shall be accomplished in
the same manner as though the deemed investment in such funds had actually been
made and are valued at their fair market value price on valuation dates hereunder.




     (v) A Participant’s Account shall be valued as of December 31 each year and at
such other times established by the Administrator, which shall be no less
frequently than quarterly.




     (vi) All elections and designations under this section shall be made in
accordance with procedures prescribed by the Administrator. The Administrator may
prescribe uniform percentages for such elections and designations.




     (vii) The earnings (or losses) provided for in this Section 4.2 shall continue
to accrue on the balance remaining in the Account during any period of installment
payments.




     (c) The Corporation shall provide annual reports to each Participant showing (a) the
value of the Account as of the most recent December 31st, (b) the amount of
deferral made by the Participant for the Plan Year ending on such date and (c) the amount
of any investment gain or loss and the costs of administration credited or debited to the
Participant’s Account.



     4.3 Bookkeeping Accounts Only. Each Participant’s Account shall be utilized solely as
a device for the measurement and determination of the amounts to be paid to such Participant under
the Plan. Participant Accounts shall be bookkeeping accounts only and no Participant or
Beneficiary shall have any proprietary rights in any assets held by the Corporation, whether or not
held for the purpose of funding the Corporation’s obligation under this Plan. This Plan
constitutes the mere promise of the Corporation to make benefit payments in the future and the
right of any Participant or Beneficiary to receive benefits under this Plan shall be an unsecured
claim against the general assets of the Corporation. Notwithstanding the foregoing, the
Corporation may choose to finance some or all of its obligations hereunder via a trust intended to
be a grantor trust.



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ARTICLE V




VESTING




     5.1 In General. A Participant’s vested interest in his Account shall be the
percentage of his Account based on his completed years of continuous employment with the group
consisting of the Corporation and its affiliates from the date he first became employed with that
group determined as follows:



	 	 	 	 	 
	Completed Years Of Continuous Employment:	 	Vested Percentage:
	Less than 2 years
	 	 	0	%
	At least 2 years, but less than 3
	 	 	20	%
	At least 3 years, but less than 4
	 	 	40	%
	At least 4 years, but less than 5
	 	 	70	%
	5 or more years
	 	 	100	%






     5.2 Death or Disability. Notwithstanding Section 5.1 above, the Participant shall be
fully vested in his Account if the Participant’s Separation from Service is by reason of death or
disability. For this purpose, the Participant shall be considered to be disabled if the
Administrator finds the Participant, on the basis of a written medical opinion, furnished by a
licensed physician appointed by the Administrator, to be incapable of engaging in the Participant’s
regular occupation with the Corporation at the location where the Participant last worked, and
that, to a reasonable medical probability, such incapacity will continue to exist during the
remainder of the Participant’s life.



ARTICLE VI




MANNER AND TIMING OF DISTRIBUTION




     6.1 Payment of Benefits.




     (a) After a Participant’s Separation from Service for any reason (including
retirement, death, disability or other termination), the Participant’s vested interest in
his Account will be determined and paid to the Participant (or in the event of the
Participant’s death, to the Participant’s Beneficiary). Payment shall be made in one of
the following forms as specified in the Participant’s payment election pursuant to Section
6.2:




     (i) A single sum distribution of the vested balance of the Account on the
first day of the seventh month following the Participant’s Separation from Service;
or




     (ii) The total value of the vested balance of the Account shall be paid in
five (5) annual installments with the first of such installments to be paid on the
first day of the seventh month following the Participant’s Separation from Service.
The amount of each installment shall be the Participant’s vested Account balance
as determined on the day prior to distribution multiplied by a fraction of which
the numerator is one and the denominator is the number of



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payments remaining to be made to the Participant (including the payment being made
currently).




     (iii) The total value of the vested balance of the Account shall be paid in
ten (10) annual installments with the first of such installments to be paid on the
first day of the seventh month following the Participant’s Separation from Service.
The amount of each installment shall be the Participant’s vested Account balance
as determined on the day prior to distribution multiplied by a fraction of which
the numerator is one and the denominator is the number of payments remaining to be
made to the Participant (including the payment being made currently).




     (iv) The total value of the vested balance of the Account shall be paid in
twenty (20) annual installments with the first of such installments to be paid on
the first day of the seventh month following the Participant’s Separation from
Service. The amount of each installment shall be the Participant’s vested Account
balance as determined on the day prior to distribution multiplied by a fraction of
which the numerator is one and the denominator is the number of payments remaining
to be made to the Participant (including the payment being made currently).




In the case of the installment payments, subsequent installments shall be made on an
anniversary of the first installment.




     (b) Notwithstanding paragraph (a) above, in the case of a Participant whose Separation
from Service was due to death, payment shall commence under the applicable payment option
on the first day of the first month following the Participant’s Separation from Service
rather than on the first day of the seventh month following the Participant’s Separation
from Service.



     6.2 Payment Election. An individual who first becomes an Active Participant at the
beginning of a Plan Year shall, prior to his date of participation, complete a payment election
form specifying the form of payment applicable to such Participant’s Account under the Plan.
Absent an actual election by such Participant by the effective date of participation, the
Participant shall be deemed to have elected payment in the single sum payment form. An individual
who first becomes an Active Participant other than on the first day of a Plan Year shall, no later
than 30 days after the effective date of participation, complete a payment election form specifying
the form of payment applicable to such Participant’s Account. In the event such a Participant does
not make an actual election within such 30 day period, payment will be made in the single sum
payment form; provided, however, that if such Participant is already a Participant in any other
nonqualified plan or plans sponsored by the Corporation of the account balance type, the most
recent payment election with respect to any one of those plans shall be the payment election form
deemed elected under this Plan regardless of whether the individual elects a different payment
election form during that initial 30 day period. A Participant may change the form of payment by
completing and filing a new payment election form with the Corporation, and the payment election
form on file with the Corporation as of the date of the Participant’s Separation from Service shall
be controlling. Notwithstanding the foregoing, a payment election form changing the Participant’s
form of payment shall not be effective if the Participant has a Separation from Service within
twelve months after the date on which the election change is filed with the Corporation. Any
change in payment method must have the effect of delaying the commencement of payments to a date
which is at least five (5) years following the initially



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scheduled commencement date of payment previously in effect. For purposes of compliance with
Section 409A of the Internal Revenue Code, a series of five year installment payments, ten year
installment payments and twenty year installment payments are each designated as a single payment
rather than a right to a series of separate payments; therefore, a Participant who has elected (or
is deemed to have elected) any option under Section 6.1 may substitute any of the other options for
the option originally elected as long as the foregoing one-year and five year rules are satisfied.
The five year delay rule does not apply if the revised payment method applies only upon the
Participant’s death.



     6.3 Financial Hardship. A partial or total distribution of the Participant’s Account
shall be made prior to Separation from Service upon the Participant’s request and a demonstration
by the Participant of severe financial hardship as a result of an Unforeseeable Emergency. Such
distribution shall be made in a single sum as soon as administratively practicable following the
Administrator’s determination that the foregoing requirements have been met. In any case, a
distribution due to Unforeseeable Emergency may not be made to the extent that such emergency is or
may be relieved through reimbursement or compensation from 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 elected by the Participant under any other
nonqualified deferred compensation plan sponsored by the Corporation of the account balance type.
Distributions because of an Unforeseeable Emergency must be limited to the amount reasonably
necessary to satisfy the emergency need (which may include amounts necessary to pay any Federal,
state, or local income taxes or penalties reasonably anticipated to result from the distribution).
Determinations of amounts reasonably necessary to satisfy the emergency need must take into account
any additional compensation that is available because of cancellation of a deferral election under
any deferred compensation plan sponsored by the Corporation. The payment may be made from any
arrangement in which the Participant participates that provides for payment upon an Unforeseeable
Emergency, provided that the arrangement under which the payment was made must be designated at the
time of payment.



     6.4 Delayed Distribution.




     (a) A payment otherwise required to be made pursuant to the provisions of this Article
VI shall be delayed if the Corporation reasonably anticipates that the Corporation’s
deduction with respect to such payment would be limited or eliminated by application of
Code Section 162(m); provided, however that such payment shall be made on the earliest date
on which the Corporation anticipates that the deduction of the payment of the amount will
not be limited or eliminated by application of Code Section 162(m). In any event, such
payment shall be made no later than the last day of the calendar year in which occurs the
six month anniversary of the date on which the Participant has a Separation from Service.




     (b) A payment otherwise required under this Article VI shall be delayed if the
Corporation reasonably determines that the making of the payment will jeopardize the
ability of the Corporation to continue as a going concern; provided, however, that payments
shall be made on the earliest date on which the Corporation reasonably determines that the
making of the payment will not jeopardize the ability of the Corporation to continue as a
going concern.




     (c) A payment otherwise required under this Article VI shall be delayed if the
Corporation reasonably anticipates that the making of the payment will violate federal
securities laws or other applicable law; provided, however, that payments shall



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nevertheless be made on the earliest date on which the Corporation reasonably anticipates
that the making of the payment will not cause such violation. (The making of a payment
that would cause inclusion in gross income or the applicability of any penalty provision or
other provision of the Code is not treated as a violation of applicable law.)




     (d) A payment otherwise required under this Article VI shall be delayed upon such
other events and conditions as the Internal Revenue Service may prescribe in generally
applicable guidance published in the Internal Revenue Bulletin.



     6.5 Inclusion in Income Under Section 409A. Notwithstanding any other provision of
this Article VI, in the event this Plan fails to satisfy the requirements of Code Section 409A and
regulations thereunder with respect to any Participant, there shall be distributed to such
Participant as promptly as possible after the Administrator becomes aware of such fact of
noncompliance such portion of the Participant’s Account balance hereunder as is included in income
as a result of the failure to comply, but no more.



     6.6 Domestic Relations Order. Notwithstanding any other provision of this Article VI,
payments shall be made from an account of a Participant in this Plan to such individual or
individuals (other than the Participant) and at such times as are necessary to comply with a
domestic relations order (as defined in Code Section 414(p)(1)(B)).



     6.7 De Minimis Amounts. Notwithstanding any other provision this Article VI, a
Participant’s entire Account balance under this Plan and all other nonqualified deferred
compensation plans of the account balance type shall automatically be distributed to the
Participant on or before the later of December 31 of the calendar year in which occurs the
Participant’s Separation from Service or the 15th day of the third month following the
Participant’s Separation from Service if the total amount in such Account balance at the time of
distribution, when aggregated with all other amounts payable to the Participant under all
arrangements benefiting the Participant described in Section 1.409A-1(c) or any successor thereto,
do not exceed the amount described in Code Section 402(g)(1)(B). The foregoing lump sum payment
shall be made automatically and any other distribution elections otherwise applicable with respect
to the individual in the absence of this provision shall not apply.



ARTICLE VII




ADMINISTRATION




     7.1 Administrator. The Plan shall be administered by the Administrator, which shall
be a committee designated or created by the Corporation’s Board of Directors for this purpose. The
Administrator shall have all authority that may be appropriate for administering the Plan,
including the authority to adopt rules and regulations for the conduct of its affairs and for
implementing, amending and carrying out the Plan, interpreting the provisions of the Plan and
determining a Participant’s entitlement to benefits hereunder. The Administrator shall be entitled
to rely upon the Corporation’s records as to information pertinent to calculations or
determinations made pursuant to the Plan.



     The Administrator may also delegate any of its clerical or other administrative duties to one
or more officers or employees of the Corporation, who may assist the Administrator in the
performance of any of its functions hereunder. In the event of such delegation, a reference to the
Administrator shall be deemed to refer to such officer(s) or employee(s).



31









 





     7.2 Authority of Administrator. The Administrator shall have full and complete
discretionary authority to determine eligibility for benefits under the Plan, to construe the terms
of the Plan and to decide any matter presented through the claims procedure. Any final
determination by the Administrator shall be binding on all parties and afforded the maximum
deference allowed by law. If challenged in court, such determination shall not be subject to
de novo review and shall not be overturned unless proven to be arbitrary and capricious
based upon the evidence considered by the Administrator at the time of such determination.



     7.3 Administrator Actions. The Administrator may authorize one or more of its members
to execute on its behalf instructions or directions to any interested party, and any such
interested party may rely upon the information contained therein. The members may also act at a
meeting or by unanimous written consent. A majority of the members shall constitute a quorum for
the transaction of business and shall have full power to act hereunder. All decisions shall be
made by vote of the majority present at any meeting at which a quorum is present, except for
actions in writing without a meeting, which must be unanimous.



     7.4 Conflict of Interest. Any person who is on the committee which has been
designated by the Corporation’s Board of Directors as the Administrator who is covered under the
Plan may not vote or decide upon any matter relating solely to himself or vote in any case in which
his individual right to any benefit under the Plan is particularly involved. Decisions shall be
made by remaining members. Any such person shall not become an Active Participant the Plan unless
and until designated as a member by the Corporation’s Board of Directors. Further, any such person
shall not be removed from active participation in the Plan except pursuant to action taken by the
Board of Directors.



     7.5 Minor or Incompetent Payees. If a person to whom a benefit is payable is a minor
or is otherwise incompetent by reason of a physical or mental disability, the Corporation may cause
the payments due to such person to be made to another person for the first person’s benefit without
any responsibility to see to the application of such payment. Such payments shall operate as a
complete discharge of the obligations to such person under the Plan.



     7.6 No Liability. Except as otherwise provided by law, neither the Administrator, nor
any member thereof, nor any director, officer or employee of the Corporation involved in the
administration of the Plan shall be liable for any error of judgment, action or failure to act
hereunder or for any good faith exercise of discretion, excepting only liability for gross
negligence or willful misconduct. The Corporation shall hold harmless and defend any individual in
the employment of the Corporation and any director of the Corporation against any claim, action or
liability asserted against him in connection with any action or failure to act regarding the Plan,
except as and to the extent that any such liability may be based upon the individual’s own gross
negligence or willful misconduct. This indemnification shall not duplicate but may supplement any
coverage available under any applicable insurance.



     7.7 Plan Expenses. All costs and expenses incurred in connection with the
administration and operation of the Plan shall be borne by the Corporation and/or any trust
established by the Corporation to assist it in meeting its obligations under the Plan.



     7.8 Claims Procedure.




     (a) If the Participant or the Participant’s Beneficiary (hereinafter referred to as a
“Claimant”) is denied all or a portion of an expected benefit under the Plan for any
reason, he or she may file a claim with the Administrator or its designee. The



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Administrator or its designee shall notify the Claimant within 60 days of allowance or
denial of the claim, unless the Claimant receives written notice prior to the end of the
sixty (60) day period stating that special circumstances require an extension of the time
for decision and specifying the expected date of decision. The notice of the such decision
shall be in writing, sent by mail to the Claimant’s last known address, and if a denial of
the claim, must contain the following information:




     (i) the specific reasons for the denial;




     (ii) specific reference to pertinent provisions of the Plan on which the
denial is based; and




     (iii) if applicable, a description of any additional information or material
necessary to perfect the claim, an explanation of why such information or material
is necessary, and an explanation of the claims review procedure.




     (iv) a description of the Plan’s claims review procedure, including a
statement of the Claimant’s right to bring a civil action under Section 502 of
ERISA if the Claimant’s claim is denied upon review.




     (b) A Claimant is entitled to request a review of any denial of his claim. The
request for review must be submitted in writing to the Administrator within 60 days after
receipt of the notice of the denial. The timely filing of such a request is necessary to
preserve any legal recourse which may be available to the Claimant and, absent the
submission of request for review within the 60-day period, the claim will be deemed to be
conclusively denied. Upon submission of a written request for review, the Claimant or his
representative shall be entitled to review all pertinent documents, and to submit issues
and comments in writing for consideration by the Administrator.




The Administrator shall fully and fairly review the matter and shall consider all
information submitted in the review request, without regard to whether or not such
information was submitted or considered in the initial claim determination. The
Administrator shall promptly respond to the Claimant, in writing, of its decision within 60
days after receipt of the review request. However, due to special circumstances, if no
response has been provided within the first 60 days, and notice of the need for additional
time has been furnished within such period, the review and response may be made within the
following 60 days. The Administrator’s decision shall include specific reasons for the
decision, including references to the particular Plan provisions upon which the decision is
based, notification that the Claimant can receive or review copies of all documents,
records and information relevant to the claim, and information as to the Claimant’s right
to file suit under Section 502(a) of ERISA.




     (c) If a determination of disability for purposes of Section 5.2, 6.1(b) or 6.2
becomes necessary and if such determination is considered to be with respect to a claim for
benefits based on disability for purposes of 29 CFR Section 2560.503-1, then the
Administrator shall adopt and administer a special procedure for considering such
disability claims meeting the requirements of 29 CFR Section 2560.503-1 for disability
benefit claims.



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ARTICLE VIII




MISCELLANEOUS




     8.1 Amendment or Termination. The Corporation (through its Board of Directors or
authorized officers or employees) reserves the right to alter or amend the Plan, or any part
thereof, in such manner as it may determine, at any time and for any reason. Further, the Board of
Directors of the Corporation reserves the right to terminate the Plan, at any time and for any
reason. Notwithstanding the foregoing, in no event shall any amendment or termination deprive any
Participant or Beneficiary of any amounts credited to him under this Plan as of the date of such
amendment or termination; provided, however, that the Corporation may prospectively change the
deemed investment funds available hereunder or discontinue the crediting of earnings and losses
and, further, the Corporation may make any amendment it deems necessary or desirable for purposes
of compliance with the requirements of Code Section 409A and regulations thereunder.



     If the Plan is amended to freeze benefit accruals, no additional contributions shall be
credited to any Participant Account hereunder. Following such a freeze of benefit accruals,
Participants’ Accounts shall be paid at such time and in such form as provided under Article VI of
the Plan. If the Corporation terminates the Plan and if the termination is of the type described
in regulations issued by the Internal Revenue Service pursuant to Code Section 409A, then the
Corporation shall distribute the then existing Account balances of Participants and beneficiaries
in a lump sum within the time period specified in such regulations and, following such
distribution, there shall be no further obligation to any Participant or beneficiary under this
Plan. However, if the termination is not of the type described in such regulations, then following
Plan termination Participants’ Accounts shall be paid at such time and in such form as provided
under Article VI of the plan.



     8.2 Applicable Law. This Plan shall be governed by the laws of the State of
Wisconsin, except to the extent preempted by the provisions of ERISA or other applicable federal
law.



     8.3 Relationship to Other Programs. Participation in the Plan shall not affect a
Participant’s rights to participate in and receive benefits under any other plans of the
Corporation, nor shall it affect the Participant’s rights under any other agreement entered into
with the Corporation, unless expressly provided otherwise by such plan or agreement. Any amount
credited under or paid pursuant to this Plan shall not be treated as wages, salary or any other
type of compensation or otherwise taken into account in the determination of the Participant’s
benefits under any other plans of the Corporation, unless expressly provided otherwise by such
plan.



     8.4 Non-Assignability. No Participant or Beneficiary shall have any right to commute,
sell, assign, pledge, convey, or otherwise transfer any rights or claims to receive benefits
hereunder, nor shall such rights or claims be subject to garnishment, attachment, execution or levy
of any kind except to the extent otherwise required by law.



     8.5 Status of Plan Under ERISA. The Plan is intended to be an unfunded plan
maintained by the Corporation primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees, as described in Section 201(2), Section
301(a)(3), Section 401(a)(1) and Section 4021(b)(6) of ERISA.



     8.6 Withholding. The Corporation shall comply with all applicable tax and
governmental withholding requirements. To the extent required by law, the Corporation shall



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withhold any taxes required to be withheld by the federal or any state or local government from
payments made hereunder or from any other amounts paid to a Participant by the Corporation. If
FICA taxes must be withheld in connection with amounts credited hereunder before payments are
otherwise due hereunder and if there are no other wages from which to withhold them, the
Corporation shall pay such FICA taxes generated by such payment (and taxes under Code Section 3401
triggered thereby and additional taxes under Section 3401 attributable to pyramiding of Section
3401 wages and taxes) but no more and the Participant’s Account hereunder shall be reduced by an
amount equal to the payments made by the Corporation.



     8.7 Limited Liability. In no event will the Corporation’s liability to pay benefits
to a Participant or his Beneficiary under Article VI ever exceed the Participant’s vested interest
in his Account under the Plan.



     8.8 No Right to Continued Employment. Neither participation in this Plan, nor the
payment of any benefit hereunder, shall be construed as giving to a Participant any right to be
retained in the service of the Corporation, or limiting in any way the right of the Corporation to
terminate the Participant’s service at any time. Nor does participation in this Plan guarantee the
Participant the right to be continued in service in any particular position or at any particular
rate of compensation.



     8.9 Special Distribution Election Rules for 2005-2008. Notwithstanding the usual
rules regarding distribution elections, on or before December 31, 2008, a Participant may make an
election as to distribution of his Account from among the choices described at Section 6.1 hereof
without complying with the rules described in Section 6.2 hereof as long as the effect of the
election made in any year is not to accelerate payments into that year or to defer payments which
would otherwise have been made in that year to a subsequent year. In order to subsequently change
any such special election after December 31, 2008, the requirements of Section 6.2 hereof must be
satisfied. (This election will not apply to distribution of the Participant’s accounts holding
amounts earned and vested prior to January 1, 2005, if any, (and earnings credited thereon) since
such accounts are not governed by this document but are governed by the Frozen Plan.)



     8.10 Cessation of Affiliation. Each Corporation sponsors the Plan as to its own
employees and not with respect to the employees of any other Corporation which sponsors the Plan.
If a Corporation which sponsors the Plan ceases to be affiliated with the other Corporations which
sponsor the Plan, then that Corporation shall continue to maintain the Plan with respect to its own
employees, shall adopt replacement documents which are substantively identical to this document by
which to continue its obligations which had been created hereunder and, thereafter, its obligations
to its employees shall be governed by such successor document and this document shall cease to
apply to that Corporation and its employees.




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