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Exhibit 10.2    
    

SCOTT'S LIQUID GOLD & AFFILIATED COMPANIES

EMPLOYEE BENEFIT HEALTH AND WELFARE PLAN

AMENDMENT #1-2004  

        Effective April 14, 2004 Scott's Liquid Gold & Affiliated Companies Employee Benefit Health and
Welfare Plan is hereby amended. 

	1)
	Table
of Contents page, a section entitled HIPAA Privacy Information is hereby ADDED.

	2)
	The
following definitions are hereby ADDED to the Definitions section beginning on page 66. 

"Covered Entity" means (1) health plans; (2) health care clearinghouses; and (3) health care providers that conduct certain types
of transactions in electronic form in relation to HIPAA's administrative simplification rules. 

"Health Information" means any information, whether oral or recorded in any form or medium, that: 

	1.
	is
created or received by a health care provider, health plan; public health authority, employer, life insurer, school or university, or health care clearinghouse; and

	2.
	relates
to the past, present or future physical or mental health or condition of an individual; the provision of health care to an individual; or the past, present, or future payment
for the provision of health care to an individual. 

"Health Plan" means any individual or group plan that provides or pays the cost of medical care (as defined in Section 2791 (a)(2)of the PHS Act,
42 U.S.C. § 300gg-91(a)(2). 

"Individually Identifiable Health Information" means a subset of health information, including demographic information collected from an individual,
and: 

	1.
	is
created or received by a health care provider, health plan, employer, or health care clearinghouse; and

	2.
	relates
to the past, present, or future physical or mental health or condition of an individual; the provision of health care to an individual; or the past, present, or future payment
for the provision of health care to an individual; and

	a.
	that
identifies the individual; or

	b.
	with
respect to which there is a reasonable basis to believe the information can be used to identify the individual. 

"Protected Health Information (PHI)" means individually identifiable health information: 

	1.
	Except
as provided in paragraph (2) of this definition, that is:

	a.
	transmitted
by electronic media;

	b.
	maintained
in any media described in the definition of electronic media at 42 CFR § 162.103; or

	c.
	transmitted
or maintained in any other form or medium.

	2.
	Protected
health information excludes individually identifiable health Information in:

	a.
	education
records covered by the Family Educational Rights and Privacy Act, as amended, 20 U.S.C., § 1232g; 

1

 

	b.
	records
described at 20 U.S.C. § 1232g(a)(4)(B)(iv); and

	c.
	employment
records held by a covered entity in its role as employer. 

"Summary Health Information" means information that summarizes the claims history, claims expenses or the type of claims experienced by individuals in
the Plan, but it excludes all identifiers that must be removed for the information to be de-identified, except that it may contain geographic information to the extent that it is
aggregated by five-digit zip code. 

"Transaction" means the transmission of information between two parties to carry out financial or administrative activities related to health care. 

	3)
	Page
74, Definitions section, "HIPAA" IS CURRENTLY: 

"HIPAA" means The Health Insurance Portability and Accountability Act of 1996, enacted on August 21, 1996. HIPAA amends the Public Health Service
Act (PHS Act), the Employee Retirement Income Security Act of 1974 (ERISA), and the Internal Revenue Code of 1986 (CODE), significantly expanding employee access to health care coverage. 

IS AMENDED TO:

"HIPAA" means The Health Insurance Portability and Accountability Act of 1996, enacted on August 21, 1996, including Title II, the Administrative
Simplification Compliance Act. HIPAA amends the Public Health Service Act (PHS Act), the Employee Retirement Income Security Act of 1974 (ERISA), and the Internal Revenue Code of 1986 (CODE),
significantly expanding employee access to health care coverage. 

	4)
	The
following section entitled HIPAA Privacy Information is hereby ADDED to the Plan: 

HIPAA PRIVACY INFORMATION  

DISCLOSURE OF SUMMARY HEALTH INFORMATION TO THE PLAN SPONSOR  

In accordance with the Privacy Standards, the Plan may disclose summary health information to the Plan Sponsor, if the Plan Sponsor requests the summary health information for the purpose of
(a) obtaining premium bids from stop loss carriers, excess loss carriers or managing general underwriters (MGUs) for providing health coverage under this Plan or (b) modifying, amending
or terminating the Plan. 

"Summary
health information" may be individually identifiable health information and it summarizes the claims history, claims expenses or the type of claims experienced by individuals in the plan, but
it excludes all identifiers that must be removed for the information to be de-identified,
except that it may contain geographic information to the extent that it is aggregated by five-digit zip code. 

DISCLOSURE OF PROTECTED HEALTH INFORMATION ("PHI") TO THE PLAN SPONSOR FOR PLAN ADMINISTRATION PURPOSES

In
order that the Plan Sponsor may receive and use PHI for Plan Administration purposes, the Plan Sponsor agrees to: 

	1.
	Not
use or further disclose PHI other than as permitted or required by the Plan Documents or as Required by Law (as defined in the Privacy Standards);

	2.
	Ensure
that any agents, including a subcontractor, to whom the Plan Sponsor provides PHI received from the Plan agree to the same restrictions and conditions that apply to the Plan
Sponsor with respect to such PHI; 

2

 

	3.
	Not
use or disclose PHI for employment-related actions and decisions or in connection with any other benefit or employee benefit plan of the Plan Sponsor,  except pursuant to an authorization which meets the
requirements of the Privacy Standards;

	4.
	Report
to the Plan any PHI use or disclosure that is inconsistent with the uses or disclosures provided for of which the Plan Sponsor becomes aware;

	5.
	Make
available PHI in accordance with Section "164.524 of the Privacy Standards (45 CFR 164.524);

	6.
	Make
available PHI for amendment and incorporate any amendments to PHI in accordance with Section 164.526 of the Privacy Standards (45 CFR 164.526);

	7.
	Make
available the information required to provide an accounting of disclosures in accordance with Section 164.528 of the Privacy Standards (45 CFR 164.528);

	8.
	Make
its internal practices, books end records relating to the use and disclosure of PHI received from the Plan available to the Secretary of the U.S. Department of Health and Human
Services ("HHS"), or any other officer or employee of HHS to whom the authority involved has been delegated, for purposes of determining compliance by the Plan with Part 164, Subpart E, of the
Privacy Standards (45 CFR 164.500 etseq);

	9.
	If
feasible, return or destroy all PHI received from the Plan that the Plan Sponsor still maintains in any form and retain no copies of such PHI when no longer needed for the purpose
for which disclosure was made, except that, if such return or destruction is not feasible, limit further uses and disclosures to those purposes that make the return or destruction of the PHI
infeasible; and

	10.
	Ensure
that adequate separation between the Plan and the Plan Sponsor, as required in Section "164.504(f)(2)(iii) of the Privacy Standards (45 CFR 164.504(f)(2)(iii)), is
established as follows:

	a.
	The
following employees, or classes of employees, or other persons under control of the Plan Sponsor, shall be given access to the PHI to be disclosed:

	i.
	The
Health Benefit Committee

	ii.
	Chief
Financial Officer

	iii.
	Controller

	iv.
	Benefits
Manager

	v.
	Health
Plan Financial Clerk

	vi.
	Accounts
Payable Clerk

	vii.
	Human
Resource Manager

	b.
	The
access to and use of PHI by the individuals described in subsection 10(a) above shall be restricted to the Plan Administration functions that the Plan Sponsor performs for the
Plan.

	c.
	In
the event any of the individuals described in subsection 10(a) above do not comply with the provisions of the Plan Documents relating to use and disclosure of PHI, the Plan
Administrator shall impose reasonable sanctions as necessary, in its discretion, to ensure that no further non-compliance occurs. Such sanctions shall be imposed progressively (for
example, an oral warning, a written warning, time off without pay and termination), if 

3

 

appropriate,
and shall be imposed so that they are commensurate with the severity of the violation. 

"Plan
Administration" activities are limited to activities that would meet the definition of payment or health care operations, but do not include functions to modify, amend or terminate the Plan or
solicit bids from prospective issuers. "Plan Administration" functions include quality assurance, claims processing, auditing, monitoring and management of carve-out plans, such as
prescription drugs. It does not include any employment-related functions or functions in connection with any other benefit or benefit plans. 

The
Plan shall disclose PHI to the Plan Sponsor only upon receipt of a certification by the Plan Sponsor that (a) the Plan Documents have been amended to incorporate the above provisions and
(b) the Plan Sponsor agrees to comply with such provisions. 

DISCLOSURE OF CERTAIN ENROLLMENT INFORMATION TO THE PLAN SPONSOR

Pursuant
to Section 164.504(f)(1)(iii) of the Privacy Standards (45 CFR 164.504(f)(1)(iii)), the Plan may disclose to the Plan Sponsor information on whether an individual is
participating in the Plan or is enrolled in or has disenrolled from coverage under the Plan to the Plan Sponsor. 

DISCLOSURE OF PHI TO OBTAIN STOP-LOSS OR EXCESS LOSS COVERAGE

The
Plan Sponsor hereby authorizes and directs the Plan, through the Plan Administrator or Mountain States Administration Company Inc. to disclose PHI to stop-loss carriers, excess
loss carriers or managing general underwriters (MGUs) for underwriting and other purposes in order to obtain and maintain stop-loss or excess loss coverage related to benefit claims under
the Plan. Such disclosures shall be made in accordance with the Privacy Standards. 

OTHER DISCLOSURES AND USES OF PHI

With
respect to all other uses and disclosures of PHI, the Plan shall comply with the Privacy Standards. 

	4)
	Page
101, Coordination of Benefits section, Right to Receive or Release Necessary Information IS CURRENTLY:

RIGHT TO RECEIVE OR RELEASE NECESSARY INFORMATION

For
the purposes of determining the applicability of and implementing the terms of this coordination of benefits provision of this Plan or any provision of similar purpose of any other plan, the Plan
may, without consent of or notice to any person, release to or obtain from any insurance company or other organization or person any information, with respect to any person, which the Plan deems to be
necessary for such purposes. Any person claiming benefits under this Plan shall furnish to the Plan such information as may be necessary to implement this provision. A covered person, by receipt of
benefits under this Plan, agrees to cooperate fully with the Plan and shall provide any information requested by the Plan within five (5) days of request. 

IS AMENDED TO:

RIGHT TO RECEIVE OR RELEASE NECESSARY INFORMATION

For
the purposes of determining the applicability of and implementing the terms Of this coordination of benefits provision of this Plan or any provision of similar purpose of any other plan, the Plan
may, without consent of or notice to any person, release to or obtain from any insurance company or other organization or person any information, with respect to any person, which the Plan deems to be
necessary for such purposes. Any person claiming benefits under this Plan shall furnish to the Plan such information as may be necessary to implement this provision. A 

4

 

covered
person, by receipt of benefits under this Plan, agrees to cooperate fully with the Plan and shall provide any information requested by the Plan within five (5) days of request. The
release and handling of any Protected Health Information (PHI) and/or Transactions will be administered in compliance with the Plan's HIPAA Privacy information provisions. 

	REVIEWED AND ACCEPTED:

SCOTT'S LIQUID GOLD-INC.	 	/s/  JEFFRY B. JOHNSON      
 SIGNATURE
	

 	
 	

Jeffry B. Johnson
 NAME (please print)
	

 	
 	

Chief Financial Officer
 TITLE
	

 	
 	

6/3/04
 DATE

5

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Exhibit 10.2QuickLinks
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EXHIBIT 10.4    
    

 
 

2005
  KEY EXECUTIVE INCENTIVE BONUS PLAN
  SCOTT'S LIQUID GOLD-INC.    
    

 
  Purpose of the Plan    
    

        The purpose of the Key Executive Incentive Bonus Plan (the "Plan") is to provide incentive to the Company's key executives to maximize corporate earnings for 2005
and to reward such executives based upon performance. 

 
 

Structure of the Plan    
    

        This Plan is constructed to reserve exclusively to the shareholders the first $1 million in pre-tax earnings. Thereafter, a bonus equal to 10%
of pre-tax earnings in excess of $1 million will be paid as an incentive bonus to key executives. 

        This
Plan is also constructed so as to encourage Management to expend every effort possible to increase pre-tax earnings in excess of $1 million. The more
pre-tax profit the Company makes, the greater the bonus and the greater the return to the Company's shareholders. Further, by not capping bonuses to be paid under this Plan, the Board of
Directors believes that the incentives to the Company's executives to make larger and larger profits will not be limited. 

 
 

Plan Provisions    
    

	1.
	For
2005, a bonus pool equal to 10% of pre-tax earnings in excess of $1 million will be set aside for distribution to the Company's key executives who are employed
by the Company at December 31, 2005.

	2.
	Partial
distributions of the bonus pool may be made in December of 2005, but the final distribution is only to be made after the close of the year, based upon audited
pre-tax profits, during the quarter following the close of the fiscal year.

	3.
	Bonuses,
if any, for 2005, will be divided among the Company's four executive officers as follows: President and Chief Executive Officer, 31%; Vice President-Marketing and Sales, 25%;
Treasurer and Chief Financial Officer, 22%; and Vice President-Operations and Corporate Secretary, 22%.

	4.
	For
purposes of this Plan, net pre-tax earnings and pre-tax profits shall be determined without the deduction or addition of gains or losses from infrequent or
unusual events or transactions or from extraordinary items. The exclusion of any such event, transaction or item shall be determined by action of the Compensation Committee of the Board of Directors
of the Company after reviewing the proposed or final statements of income of the Company for the relevant period and reviewing the accounting treatment of any such event, transaction or item by the
Company's independent accountants. 

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EXHIBIT 10.4

2005 KEY EXECUTIVE INCENTIVE BONUS PLAN SCOTT'S LIQUID GOLD-INC.

Purpose of the Plan

Structure of the Plan

Plan Provisions

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