Document:

Exhibit 10.1 to General Mills, Inc. Form 8-K dated December 10, 2007

Exhibit 10.1

AIRCRAFT TIME SHARING

AGREEMENT

 

This Aircraft Time Sharing
Agreement (“Agreement”) is entered into this 12th day of December, 2007, between General Mills Sales, Inc.,
whose principal address is Number One General Mills Boulevard, Minneapolis, Minnesota 55426 (hereinafter referred to as
“Operator”) and Kendall J. Powell, whose principal address is Number One General Mills Boulevard, Minneapolis, Minnesota
55426 (hereinafter referred to as “Lessee”).

 

RECITALS

 

WHEREAS, Operator has operational control of certain civil aircraft set forth on Exhibit A of this Agreement (herein after referred to collectively as the “Aircraft” and each individually as an “Aircraft”), and

WHEREAS, Operator employs a fully qualified flight crew to operate the Aircraft, and

WHEREAS, Operator and Lessee desire to lease said Aircraft and flight crew on a Time Sharing basis as defined in Section 91.501(c)(1) of the Federal Aviation Regulations (“FAR”) on such terms and conditions as are mutually satisfactory to both parties.

 

The parties agree as follows:

 

TERM

 

This Agreement shall commence on
December 12, 2007, and continue until such time as Operator or Lessee terminates this Agreement. Either party may at any time
terminate this Agreement upon thirty (30) days’ written notice to the other party.

 

LEASE OF AIRCRAFT

 

Lessee shall pay Operator for expenses related to each flight in the amounts allowed under FAR 91.501(d) for each specific flight. These expenses shall be limited to:

 

	
             
 	
            1)
 	
            Fuel, oil, lubricants and other additives.
 

	
             
 	
            2)
 	
            Travel expenses of the crew, including food, lodging and ground transportation.
 

	
             
 	
            3)
 	
            Hangar and tie down costs away from the Aircrafts’ base of operation.
 

	
             
 	
            4)
 	
            Insurance obtained for the specific flight.
 

	
             
 	
            5)
 	
            Landing fees, airport taxes and similar assessments.
 

	
             
 	
            6)
 	
            Customs, foreign permit, and similar fees directly related to the flight.
 

	
             
 	
            7)
 	
            In-flight food and beverages.
 

	
             
 	
            8)
 	
            Passenger ground transportation.
 

	
             
 	
            9)
 	
            Flight planning and weather contract services.
 

	
             
 	
            10)
 	
            An additional charge equal to up to 100% of the expenses listed in (1) of this paragraph.
 

 

Operator shall pay all expenses related to the operation of the Aircraft and shall provide an invoice and bill to Lessee for the expenses enumerated in the list above by the 15th day of the month following the month in which any flight or flights for the account of the Lessee occur, or with regard to expenses that remain undeterminable as of that date, as soon as practicable thereafter. Lessee shall pay Operator for said expenses within 14 days of receipt of the invoice and bill therefore.

1

 

TAXES

 

Lessee shall pay to Operator the commercial Federal excise tax imposed on the transportation of persons for flights conducted under this Agreement. Amounts due for taxes shall be included on the invoices submitted to Lessee.

 

PILOTS

 

Operator shall employ, pay for and provide to Lessee a qualified flight crew for each flight undertaken under this Agreement. 

 

SCHEDULING

 

Lessee shall provide Operator with requests for flight time and proposed flight schedules as far in advance of any given flight as possible, and in any case, at least 24 hours prior to Lessee’s planned departure. Requests for flight time shall be in a form, whether oral or written, mutually convenient to, and agreed to by the parties. The Lessee shall provide at least the following for each proposed flight prior to scheduled departure:

 

	
             
 	
            1)
 	
            Proposed departure point;
 

	
             
 	
            2)
 	
            Destination;
 

	
             
 	
            3)
 	
            The date and time of flight;
 

	
             
 	
            4)
 	
            The number of anticipated passengers;
 

	
             
 	
            5)
 	
            The nature and extent of luggage;
 

	
             
 	
            6)
 	
            The date and time of a return flight; and
 

	
             
 	
            7)
 	
            Any other information concerning the proposed flight that may be pertinent or required by Operator or Operator’s flight crew.
 

 

Operator shall have final authority over the scheduling of the Aircraft, provided, however, that Operator will use its best efforts to resolve any conflicts in scheduling in a fair and equitable manner. 

 

MAINTENANCE

 

Operator shall be solely responsible for securing maintenance, preventative maintenance and required or otherwise necessary inspections on the Aircraft. The Aircraft shall be inspected in accordance with and maintained in an airworthy condition in accordance with applicable rules and regulations of FAR Part 91 during the term of this Agreement. No period of maintenance, preventative maintenance or inspection shall be delayed or postponed for the purpose of scheduling the Aircraft for Lessee. The pilot in command shall have final and complete authority to cancel any flight for any reason or condition, which in his judgment would compromise the safety of the flight.

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OPERATIONAL CONTROL

 

At any time during which a flight is made by or on behalf of Lessee under this Agreement, Operator shall have possession, command and control of the Aircraft. Operator shall have complete and exclusive responsibility for (i) scheduling, dispatching and flight of the Aircraft on all flights conducted pursuant to this Agreement, (ii) the physical and technical operation of the Aircraft and (iii) the sole performance of all flights. Operator shall have operational control of the Aircraft for all purposes of the Federal Aviation Regulations. Notwithstanding the foregoing, the pilot-in-command of each flight shall have the final authority with respect to (i) the initiation or termination of any flight, (ii) selection of the routing of any flight, (iii) determination of the load to be carried and (iv) all decisions relating to the safety of any flight. The parties further agree that Operator shall
not be liable for delay or failure to furnish the Aircraft and crew pursuant to this Agreement for any reason.

 

WARRANTIES

 

Operator makes no representations or warranties, whether expressed or implied, other than those set forth in this Agreement, including, but not limited to, any warranty of merchantability or fitness for a particular purpose with respect to the services to be performed hereunder or the use of the Aircraft. 

 

LIMITATION OF LIABILITY

 

Operator shall not be liable for any special, incidental, indirect or consequential damages or for lost profits or revenues in connection with the furnishing, performance or use of the services to be performed hereunder, in the absence of gross negligence or willful misconduct on its part or that of its officers, employees or agents. 

 

INSURANCE

 

Operator may maintain such insurance coverage with respect to the Aircraft and any flights made under this Agreement as Operator may elect in its sole discretion, including aircraft physical damage coverage (hull insurance) and liability coverage for bodily injury and property damage. Operator shall retain all rights and benefits with respect to the proceeds payable under the hull insurance as a result of any incident or occurrence while an Aircraft is being operated on behalf of Lessee under this Agreement. Lessee shall be named as an additional insured on liability insurance policies maintained by Operator on the Aircraft with respect to flights conducted pursuant to this Agreement. Any hull insurance maintained by Operator on the Aircraft shall include a waiver of any rights of subrogation of the insurers against Lessee. Notwithstanding the foregoing and subject to the limitations of FAR
91.501(d), upon Operator’s request, Lessee shall, at Operator’s request, reimburse Operator for the cost and expense of any additional insurance obtained for any specific flight. 

 

USE OF AIRCRAFT

 

Use of Aircraft by Lessee shall be for Lessee’s own account and shall be subject to the use limitations set forth in FAR Sections 91.501 and 91.321. Lessee is hereby expressly prohibited from using the Aircraft for the transportation of passengers or cargo for compensation or hire. 

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Lessee shall refrain from incurring any mechanics or other lien in connection with inspection, preventative maintenance, maintenance or storage of the Aircraft, whether permissible or impermissible under this Agreement, and shall not attempt to convey, mortgage, assign, lease or in any way alienate the Aircraft or create any kind of security interest involving the Aircraft or do anything or take any action that might mature into such a lien.

 

During the term of this Agreement, Lessee will abide by and conform to all applicable laws, governmental and airport orders, rules and regulations.

 

GENERAL PROVISIONS

 

	
             
 	
            A.
 	
            This Agreement and all the rights of the parties hereunder shall be construed and enforced in accordance with the laws of the State of Minnesota without giving effect to its conflicts of laws and principles.
 

 

	
             
 	
            B.
 	
            This Agreement supersedes all prior written agreements and understandings between the parties with respect to the subject matter hereof, and no modification, termination or attempted waiver shall be valid unless in writing and signed by both parties below.
 

 

	
             
 	
            C.
 	
            The Aircraft are and all times shall remain the owned or leased property of the Operator, and Lessee shall have no right, title or interest therein or in the proceeds thereof except as expressly permitted hereunder.
 

 

	
             
 	
            D.
 	
            If any clause or provision herein shall be adjudged to be invalid or unenforceable by a court of competent jurisdiction or by operation of any applicable law, such adjudication shall not affect the validity of any other clause or provision, which shall remain in full force and effect.
 

 

	
             
 	
            E.
 	
No party shall have the
right to assign its interest or rights under this Agreement, in whole or part, without the prior written consent of the other
party, except that the Operator may assign its interest to a wholly-owned affiliate without the consent of Lessee.
 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.

 

 

	
             
 	
             
 	
            OPERATOR
 
General Mills Sales, Inc.
 
	
              
 	
             
 	
            By: 
 	
            
 /s/ John G. Smith
 
	
             
 	
             
 	
             
 	
            John G. Smith, Vice President
 

 

 

	
             
 	
             
 	
            LESSEE
 
	  
	
             
 	
             
 	
            /s/ Kendall J. Powell
 
	
             
 	
             
 	
            Kendall J. Powell
 

 

 

 

Exhibit A

 

AIRCRAFT 

 

	
            Year, Make & Model
 	
            Serial Number
 	
            Registration Number
 	
            Registered Owner
 
	
            1993 Cessna Citation VII
 	
            650-7023
 	
            N6110
 	
            AESR, LLC

(leased to General Mills
Sales, Inc.)
 
	
            1999 Cessna Citation X
 	
            750-0066
 	
            N750GM
 	
            General Mills Sales, Inc.
 
	
            2003 Cessna Citation X
 	
            750-0207
 	
            N751GM
 	
            General Mills Sales, Inc.
 

 

 

TRUTH IN LEASING

STATEMENT

 

THE AIRCRAFT, 1993 CESSNA CITATION VII, SERIAL #650-7023, CURRENTLY REGISTERED WITH THE FEDERAL AVIATION ADMINISTRATION AS N6110, HAS BEEN MAINTAINED AND INSPECTED UNDER FAR PART 91 DURING THE 12 MONTH PERIOD PRECEDING THE DATE OF THIS LEASE.

 

THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER FAR PART 91 FOR OPERATIONS TO BE CONDUCTED UNDER THIS LEASE.

 

DURING THE DURATION OF THIS LEASE, GENERAL MILLS SALES, INC., A DELAWARE CORPORATION WHOSE PRINCIPAL ADDRESS IS NUMBER ONE GENERAL MILLS BOULEVARD, MINNEAPOLIS, MINNESOTA  55426, IS CONSIDERED RESPONSIBLE FOR THE OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THIS LEASE.

 

AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE.

 

THE “INSTRUCTIONS FOR COMPLIANCE WITH TRUTH IN LEASING REQUIREMENTS” ATTACHED HERETO ARE INCORPORATED HEREIN BY REFERENCE.

 

I, THE UNDERSIGNED, ON BEHALF OF GENERAL MILLS SALES, INC., A DELAWARE CORPORATION WHOSE PRINCIPAL ADDRESS IS NUMBER ONE GENERAL MILLS BOULEVARD, MINNEAPOLIS, MINNESOTA  55426, CERTIFY THAT I AM RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT AND THAT I UNDERSTAND MY RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.

 

General Mills Sales, Inc. (Operator)

 

	
            
 /s/ John G. Smith
 	
             
 	
             
 	
            
 12/12/07
 
	
            John G. Smith, Vice President
 	
             
 	
             
 	
            Date and time of execution
 

 

 

Kendall J. Powell (Lessee)

 

	
            
 /s/ Kendall J. Powell
 	
             
 	
             
 	
            
 12/12/07
 
	
             
 	
             
 	
             
 	
            Date and time of execution
 

 

TRUTH IN LEASING

STATEMENT

 

THE AIRCRAFT, 1999 CESSNA CITATION X, SERIAL #750-0066, CURRENTLY REGISTERED WITH THE FEDERAL AVIATION ADMINISTRATION AS N750GM, HAS BEEN MAINTAINED AND INSPECTED UNDER FAR PART 91 DURING THE 12 MONTH PERIOD PRECEDING THE DATE OF THIS LEASE.

 

THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER FAR PART 91 FOR OPERATIONS TO BE CONDUCTED UNDER THIS LEASE.

 

DURING THE DURATION OF THIS LEASE, GENERAL MILLS SALES, INC., A DELAWARE CORPORATION WHOSE PRINCIPAL ADDRESS IS NUMBER ONE GENERAL MILLS BOULEVARD, MINNEAPOLIS, MINNESOTA  55426, IS CONSIDERED RESPONSIBLE FOR THE OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THIS LEASE.

 

AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE.

 

THE “INSTRUCTIONS FOR COMPLIANCE WITH TRUTH IN LEASING REQUIREMENTS” ATTACHED HERETO ARE INCORPORATED HEREIN BY REFERENCE.

 

I, THE UNDERSIGNED, ON BEHALF OF GENERAL MILLS SALES, INC., A DELAWARE CORPORATION WHOSE PRINCIPAL ADDRESS IS NUMBER ONE GENERAL MILLS BOULEVARD, MINNEAPOLIS, MINNESOTA  55426, CERTIFY THAT I AM RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT AND THAT I UNDERSTAND MY RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.

 

General Mills Sales, Inc. (Operator)

 

	
            
 /s/ John G. Smith
 	
             
 	
             
 	
            
 12/12/07
 
	
            John G. Smith, Vice President
 	
             
 	
             
 	
            Date and time of execution
 

 

 

Kendall J. Powell (Lessee)

 

	
            
 /s/ Kendall J. Powell
 	
             
 	
             
 	
            
 12/12/07
 
	
             
 	
             
 	
             
 	
            Date and time of execution
 

 

TRUTH IN LEASING

STATEMENT

 

THE AIRCRAFT, 2003 CESSNA CITATION X, SERIAL #750-0207, CURRENTLY REGISTERED WITH THE FEDERAL AVIATION ADMINISTRATION AS N751GM, HAS BEEN MAINTAINED AND INSPECTED UNDER FAR PART 91 DURING THE 12 MONTH PERIOD PRECEDING THE DATE OF THIS LEASE.

 

THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER FAR PART 91 FOR OPERATIONS TO BE CONDUCTED UNDER THIS LEASE.

 

DURING THE DURATION OF THIS LEASE, GENERAL MILLS SALES, INC., A DELAWARE CORPORATION WHOSE PRINCIPAL ADDRESS IS NUMBER ONE GENERAL MILLS BOULEVARD, MINNEAPOLIS, MINNESOTA  55426, IS CONSIDERED RESPONSIBLE FOR THE OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THIS LEASE.

 

AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE.

 

THE “INSTRUCTIONS FOR COMPLIANCE WITH TRUTH IN LEASING REQUIREMENTS” ATTACHED HERETO ARE INCORPORATED HEREIN BY REFERENCE.

 

I, THE UNDERSIGNED, ON BEHALF OF GENERAL MILLS SALES, INC., A DELAWARE CORPORATION WHOSE PRINCIPAL ADDRESS IS NUMBER ONE GENERAL MILLS BOULEVARD, MINNEAPOLIS, MINNESOTA  55426, CERTIFY THAT I AM RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT AND THAT I UNDERSTAND MY RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.

 

General Mills Sales, Inc. (Operator)

 

	
            
 /s/ John G. Smith
 	
             
 	
             
 	
            
 12/12/07
 
	
            John G. Smith, Vice President
 	
             
 	
             
 	
            Date and time of execution
 

 

 

Kendall J. Powell (Lessee)

 

	
            
 /s/ Kendall J. Powell
 	
             
 	
             
 	
            
 12/12/07
 
	
             
 	
             
 	
             
 	
            Date and time of execution
 

 

INSTRUCTIONS FOR COMPLIANCE WITH

TRUTH IN LEASING REQUIREMENTS

 

	
            1.
 	
            Mail a copy of the Agreement to the following address via certified mail, return receipt requested, immediately upon execution of the Agreement. (14 CFR 91.23 requires that the copy be sent within twenty-four hours after it is signed):
 

 

Federal Aviation Administration

Aircraft Registration Branch 

ATTN: Technical Section

POB 25724

Oklahoma City, OK   73125

 

	
            2.
 	
            Telephone the nearest Flight Standards District Office at least forty-eight hours prior to first flight under this Agreement and inform them of the following:
 

 

	
             
 	
            a.
 	
            The location of the airport of departure;
 

	
             
 	
            b.
 	
            The departure time; and 
 

	
             
 	
            c.
 	
            The registration number of the Aircraft involved. 
 

 

	
            3.
 	
            Carry a copy of the Agreement in the Aircraft at all times.Exhibit 10.2 to Flexsteel Industries, Inc. Form 8-K dated December 10, 2007

Exhibit 10.2

 

FORM OF SECOND AMENDMENT TO FLEXSTEEL INDUSTRIES, INC.

 SENIOR OFFICER SUPPLEMENTAL RETIREMENT PLAN 

FOR EACH OF RONALD J. KLOSTERMAN, THOMAS D. BURKART AND JAMES R. RICHARDSON

 

WHEREAS, a certain Senior Officer Supplemental Retirement Plan (“Agreement”) was entered into on the 7th day of December, 2000, by and between FLEXSTEEL INDUSTRIES, INC., a Minnesota corporation (the “Corporation”) and [INSERT OFFICER NAME], (“Employee”); and

 

WHEREAS, the Agreement was subsequently amended on November 13, 2006 for the purpose of complying with Internal Revenue Code section 409A; and

 

WHEREAS, pursuant to paragraph 9 of the Agreement, the Agreement may be amended from time to time with the signed written consent of both the Corporation and the Employee; and

 

WHEREAS, the Corporation and the Employee wish to amend the Agreement; and

 

WHEREAS, the Corporation and the Employees are adopting this Amendment in good faith compliance with Section 409A;

 

NOW, THEREFORE, pursuant to the provisions of paragraph 9 of the Agreement, the Agreement is hereby amended as follows:

 

	
            I. 
 	
            Sub-paragraph E of paragraph 4 of the Agreement is hereby deleted and replaced with the following:
 

 

(E)   PAYMENT.  Employee’s Account shall be paid to him beginning upon the date which is six months after the date of Employee’s separation of service with the Corporation, unless the separation of service is due to Employee’s death or disability prior to age 65. In the event Employee dies or becomes disabled prior to attaining age 65, payments shall commence upon the later of the date which is six (6) months after the date of Employee’s separation from service due to death or disability, or the date of Employee’s 65th birthday. Payments shall be made in accordance with the election form signed by Employee and attached hereto as Exhibit “A.”  The Employee may subsequently elect a different method of payment, provided the subsequent election complies with the rules of Section 409A(a)(4)
of the Internal Revenue Code or any other comparable section, and the Regulations thereunder. Additionally, Employee shall have the right to designate a beneficiary to receive the remaining proceeds (see Exhibit “B” attached) if the Employee should die prior to receiving all of his payments. If Employee fails to execute a beneficiary designation or if the beneficiary is not alive at the time of distribution, then the proceeds due Employee will be paid to Employee’s estate. The beneficiary designation may be changed at any time during Employee’s lifetime as long as the Employee is competent or by Employee’s attorney-in-fact who is specifically authorized to make the change.

 

1

Notwithstanding the above, the Corporation may delay a payment due under this Agreement under any of the following circumstances, so long as all payments to similarly situated Employees are treated on a reasonably consistent basis: (1) the Corporation reasonably anticipates that if the payment were made as scheduled, the Corporation’s deduction to such payment would not be permitted under section 162(m) of the Internal Revenue Code, as amended, provided that the payment is made either during the first year in which the Corporation reasonably anticipates, or should reasonably anticipate, that if the payment is made during such year, the deduction of such payment will not be barred by application of Section 162(m) or during the period beginning with the date of Employee’ separation from service and ending on the later of the last day of the Corporation’s fiscal year in which
the Employee has a separation from service, or the 15th day of the third month following the separation from service; (2) the Corporation reasonably anticipates that the making of the payment will violate Federal securities laws or other applicable law, provided that the payment is made at the earliest date at which the Corporation reasonably anticipates that the making of the payment will not cause such violation; or (3) upon such other events as determined by the Corporation and according to such terms as are consistent with Internal Revenue Code section 409A or prescribed by the Commissioner of Internal Revenue.

 

	
            II. 
 	
            Paragraph 9 of the Agreement is hereby deleted and replaced with the following:
 

 

9.   AMENDMENT.  This Agreement may be amended from time to time by the Corporation as necessary to comply with Federal tax laws and regulations to insure that all amounts deferred are deferred for tax purposes. Any such amendments shall be in writing and signed by both parties. 

 

	
            III.
 	
            The following provisions shall be added to the Agreement and numbered as Paragraphs 19-22.
 

 

19.   CHANGE OF CONTROL.  For the purpose of this Agreement, a “Change of Control” shall mean any of the following:

 

	
             
 	
            A.
 	
            When any individual, entity, or group becomes the beneficial owner of 50% or more of either the total fair market value of the then–outstanding shares of stock of the Corporation or the total voting power of the then–outstanding stock of the Corporation entitled to vote generally in the election of directors.
 

 

	
             
 	
            B.
 	
            When individuals who, as of the date hereof, constitute the Board of Directors (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board during any 12-month period; provided however, that any individual becoming a director subsequent to the date hereof whose election or nomination for election by the Company’s shareholders was approved by a vote of at least a majority of the Incumbent Directors then on the Board shall be considered as though such individual was an Incumbent Director, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board.
 

 

2

	
             
 	
            C.
 	
            Upon the consummation of a reorganization, merger, statutory share exchange, or consolidation (or similar corporate transaction) involving the Corporation or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Corporation, or the acquisition of assets or stock of another entity by the Corporation or any of its subsidiaries (each a “Business Combination”), in each case, unless, immediately following such Business Combination:
 

 

	
             
 	
            (i) 
 	
            substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the total fair market value of the then-outstanding shares of stock (or, for a non–corporate entity, equivalent securities) and the total voting power of the then–outstanding voting stock entitled to vote generally in the election of directors (or, for a non–corporate entity, equivalent governing body), as the case may be, of (A) the entity resulting from such Business Combination (the “Surviving Corporation”) or (B) if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of 80% or more of the voting
securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”), in substantially the same proportion as their ownership, immediately prior to the Business Combination, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be;
 

 

	
             
 	
            (ii) 
 	
            no individual, entity, or group, directly or indirectly acquires, or has acquired during the 12-month period ending on the date of the most recent acquisition, ownership of 30% or more of the total voting power of the stock of the Parent Corporation (or if there is no Parent Corporation, the Surviving Corporation); and 
 

 

	
             
 	
            (iii) 
 	
            at least a majority of the members of the board of directors of the Parent Corporation (or if there is no Parent Corporation, the Surviving Corporation) following the consummation of the Business Combination were Incumbent Directors at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination.
 

 

	
             
 	
            D.
 	
            Upon approval by the shareholders of the Corporation of a complete liquidation or dissolution of the company.
 

 

20.   DEFINITION OF “GROUP.”  For purposes of Paragraph 19, above, persons will not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time, or as a result of the same public offering. However, persons will be considered to be acting as a group if they meet the definition set forth in section 13(d)(3) of the Securities Exchange Act of 1934, or if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the corporation. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders only with respect to the ownership in that corporation before the
transaction giving rise to the change and not with respect to the ownership interest in the other corporation. 

 

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21.   DEFINITION OF “BENEFICIAL OWNER.”  For purposes of Paragraph 19, above, the term “beneficial owner” shall be defined by Rule 13d-3 of the Rules promulgated under the Securities Exchange Act of 1934.

 

22.   PAYMENT UPON CHANGE OF CONTROL.  Notwithstanding any other provision of this Agreement to the contrary, in the event of a Change of Control, Employee’s interest in the benefits shall be distributed in a lump sum; provided however, that the amount vested and distributed by reason of this provision shall not exceed the amount which would cause the amount vested and distributed to be considered an “excess parachute payment” under section 280G of the Internal Revenue Code, as amended. 

 

	
            IV.
 	
            The following provision shall be added to the Agreement and numbered as Paragraph 23.
 

 

23.   INTERPRETATION, CONSTRUCTION, AND ADMINISTRATION OF AGREEMENT.  The Corporation’s Chief Financial Officer, or the individual performing comparable duties, shall act as Plan Administrator. The Plan Administrator shall have  full power and authority to interpret, construe and administer this Agreement and the Plan Administrator’s interpretation and construction thereof, and actions thereunder, including any valuation of the Deferred Compensation Account, or the amount or recipient of the payment to be made  therefrom, shall be binding and conclusive on all persons for all purposes, unless review is requested in accordance with the Claims Procedures set forth in paragraphs 24 and 25 below. The review of any decision by the Plan Administrator pursuant to the Claims Procedures shall be performed by the individual or group of individuals appointed by the Nominating and Compensation
Committee of the Board of Directors to act as Plan Fiduciary. Neither the Plan Administrator nor the Plan Fiduciary shall be liable to any person for any action taken or omitted in connection with the  interpretation and administration of this Agreement unless attributable to his or her own willful misconduct or lack of good faith.

 

	
            V. 
 	
            The following provision shall be added to the Agreement and numbered as Paragraph 24.
 

 

	
             
 	
            24.   CLAIMS PROCEDURE.
 

 

A.   NOTICE OF INITIAL DECISION.  Any decision by the Plan Administrator denying a claim by Employee or Employee’s beneficiary for benefits under this Plan shall be stated in writing and delivered or mailed to the Employee or such beneficiary within a reasonable period of time, but no later than ninety (90) days after receipt of the claim by the Plan Administrator. Such decision shall set forth the specific reasons for the denial, with reference to the specific plan provisions on which the denial is based, written to the best of the Plan Administrator’s ability in a manner calculated to be understood without legal or actuarial counsel. The decision shall also provide a description of any additional material or information necessary for Employee or his/her beneficiary to perfect the claim and an explanation of why such material is necessary.
The decision shall contain a description of the Corporation’s review procedures and the time limits applicable to such procedures, and inform Employee or his/her beneficiary of the right to bring a civil action under section 1132 of ERISA following an adverse determination on review. If the Plan Administrator determines there are special circumstances which require additional time to make a decision, the Plan Administrator shall notify Employee or his/her beneficiary of the date by which a decision is expected to be made, and may extend the time for up to an additional ninety (90) days. 

 

4

B.   EMPLOYEE’S RIGHT TO REVIEW.  If the Plan Administrator determines Employee or his/her beneficiary is not eligible for benefits, or if Employee or his/her beneficiary believes he or she is entitled to greater or different benefits, the Employee or his/her beneficiary shall have the opportunity to have his or her claim reviewed by filing a petition for review with the Plan Fiduciary within sixty (60) days after receipt of the Plan Administrator’s written notice of the decision denying benefits. The petition shall state the specific reasons Employee or his/her beneficiary believes he or she is entitled to benefits or greater or different benefits. Within sixty (60) days after the Plan Fiduciary’s receipt of the petition, the Plan Fiduciary shall afford Employee or his/her beneficiary, and his or her legal counsel, if any, an opportunity to present his or her
position to the Plan Fiduciary orally or in writing. The Plan Fiduciary shall inform Employee or his/her beneficiary of its decision in writing within the same sixty (60) day period, stating the specific reasons and specific provisions in the plan on which its decision is based. If the sixty (60) day period is not a sufficient amount of time for holding a hearing and rendering a decision, the Plan Fiduciary may extend the time to render a decision for up to another sixty (60) days, but notice of any such extension shall be given to Employee or his/her beneficiary in writing prior to the expiration of the initial 60-day period. 

 

The failure to file an appeal within the sixty (60) day period will cause Employee or his/her beneficiary to lose the right to appeal the denial and the right to bring a civil action under section 1132 of ERISA. In the event the Plan Fiduciary denies an appeal of a denial of a claim for benefits, any civil action to challenge the denial of such claim must be brought within one year of the date of the Plan Fiduciary’s final decision on the appeal.

 

	
            VI. 
 	
            The following paragraph shall be added to the agreement and numbered as Paragraph 25.
 

 

25.   CLAIM PROCEDURE–DISABILITY BENEFITS.  

 

A.   NOTICE OF INITIAL DECISION.  Any decision by the Plan Administrator denying a claim by Employee or Employee’s beneficiary for disability benefits under this Plan shall be stated in writing and delivered or mailed to the Employee or such beneficiary within a reasonable period of time, but no later than forty-five (45) days after receipt of the claim by the Plan Administrator. Such decision shall set forth the specific reasons for the denial, with reference to the specific plan provisions on which the denial is based, written to the best of the Plan Administrator’s ability in a manner calculated to be understood without legal or actuarial counsel. The decision shall also provide a description of any additional material or information necessary for Employee or his/her beneficiary to perfect the claim and an explanation of why such material is necessary. The
decision shall contain a description of the Company’s review procedures and the time limits applicable to such procedures, and inform Employee or his/her beneficiary of the right to bring a civil action under section 1132 of ERISA following an adverse determination on review. If the Plan Administrator determines there are special circumstances which require additional time to make a decision, the Plan Administrator shall notify Employee or his/her beneficiary prior to the expiration of the initial 45-day period, of the circumstances requiring the extension of time and the date by which a decision is expected to be made, and may extend the time for up to an additional thirty (30) days. If, prior to the end of the first 30-day extension period, the Plan Administrator determines that, due to matters beyond the control of the Plan Administrator, a decision cannot be rendered, the period for making a decision may be extended for up to an additional thirty (30) days, provided that the
Plan Administrator notifies the Employee or his/her beneficiary prior to expiration of the first 30-day extension period, of the circumstances requiring the extension and the date as of which the plan expects to render a decision. In the case of any extension, the notice of extension shall specifically explain the standards on which entitlement to disability benefits is based, the unresolved issues that prevent a decision on the claim, and the additional information needed to resolve those issues. The Employee or his/her beneficiary shall be given at least 45 days after notice of the extension to provide such additional information.

 

5

B.   EMPLOYEE’S RIGHT TO REVIEW.  If the Plan Administrator determines Employee or his/her beneficiary is not eligible for benefits, or if Employee or his/her beneficiary believes he or she is entitled to greater or different benefits, the Employee or his/her beneficiary shall have the opportunity to have his or her claim reviewed by the Plan Fiduciary by filing a petition for review with the Plan Fiduciary within one hundred eighty (180) days after receipt of the Administrator’s written notice of the decision denying benefits. The petition shall state the specific reasons Employee or his/her beneficiary believes he or she is entitled to benefits or greater or different benefits. In conducting the review, the Plan Fiduciary shall not give any deference to the initial adverse benefit determination. In addition, the Plan Fiduciary conducting such review shall not be
the individual who made the initial adverse benefit determination, nor the subordinate of such individual. In deciding an appeal of any adverse benefit determination based on a medical judgment, the Plan Fiduciary shall consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment, and who is neither an individual that was previously consulted in connection with the initial adverse benefit determination that is the subject of review, nor the subordinate of any such individual.

 

Within forty-five (45) days after the Plan Fiduciary’s receipt of the petition, the Plan Fiduciary shall afford Employee or his/her beneficiary, and his or her legal counsel, if any, an opportunity to present his or her position to the Plan Fiduciary orally or in writing. The Plan Fiduciary shall inform Employee or his/her beneficiary of its decision in writing within the same forty-five (45) day period, stating the specific reasons and specific provisions in the plan on which its decision is based, and identifying any medical or vocational experts whose advice was obtained in connection with the appeal, regardless of whether the Plan Fiduciary relied upon such advice in rendering the decision. If the forty-five (45) day period is not a sufficient amount of time for holding a hearing and rendering a decision, the Plan Fiduciary may extend the time to make a decision up
to another forty-five (45) days, but notice of any such extension shall be given to Employee or his/her beneficiary in writing prior to the expiration of the initial 45-day period. The notice of extension shall indicate the special circumstances requiring an extension and set forth the date by which the Plan Fiduciary expects to render the decision. 

 

The failure to file an appeal within the one hundred eighty (180) day period will cause Employee or his/her beneficiary to lose the right to appeal the denial and the right to bring a civil action under section 1132 of ERISA. In the event the Plan Fiduciary denies an appeal of a denial of a claim for benefits, any civil action to challenge the denial of such claim must be brought within one year of the date of the Plan Fiduciary’s final decision on the appeal.

 

	
            VII. 
 	
            This Amendment shall relate back to the effective date of the Agreement.
 

 

	
            VIII. 
 	
            In all other respects, the Agreement is hereby ratified and confirmed.
 

 

6

IN WITNESS WHEREOF, the Corporation and the Employee have executed this SECOND AMENDMENT TO FLEXSTEEL INDUSTRIES, INC. SENIOR OFFICER SUPPLEMENTAL RETIREMENT PLAN on this 13th day of December, 2007.

 

	
            EXHIBIT ONLY – NOT FOR SIGNATURE
 	
             
 
	
             

FLEXSTEEL INDUSTRIES, INC.
 	
             
 
	
            
By:
 	
             
 	
             
 
	
             
 	
            Ronald J. Klosterman, President
 	
            Date
 
	
             
 	
             
 	
             
 
	
            By:
 	
             
 	
             
 
	
             
 	
            Timothy E. Hall, Secretary
 	
            Date
 
	
             
 	
             
 	
             
 
	
            By:
 	
             
 	
             
 
	
             
 	
            [INSERT OFFICER NAME],Employee
 	
            Date
 

 

 

7

EXHIBIT A

 

FLEXSTEEL INDUSTRIES, INC.

SENIOR OFFICER SUPPLEMENTAL RETIREMENT PLAN

EMPLOYEE’S ELECTION OF METHOD OF PAYMENT

 

Under the Senior Officer Supplemental
Retirement Plan Agreement (the “Agreement”) with Flexsteel Industries, Inc., I [INSERT OFFICER NAME], elect to receive the balance of my Account, when payable under the agreement, as follows: (check one of the boxes below):

 

	
            o
 	
            A.
 	
            In a lump sum within thirty days after the event requiring payment.
 

 

	
            o
 	
            B.
 	
            In two approximately equal payments, the first due within thirty days after the event requiring payment and the second due on January 2nd of the following calendar year.
 

 

	
            o
 	
            C.
 	
            In approximate equal annual installments over a five year period, with the first payment due within thirty days after the event requiring payment.
 

 

	
            o
 	
            D.
 	
            In approximate equal annual installments over a ten year period with the first payment due within thirty days after the event requiring payment.
 

 

	
            o
 	
            E.
 	
In approximate equal
annual installments over a fifteen year period with the first payment due within thirty days after the event requiring
payment.
 

 

	
            o
 	
            F.
 	
            In approximate equal semi-annual installments over a five year period with the first payment due within thirty days after the event requiring payment.
 

 

	
            o
 	
            G.
 	
            In approximate equal semi-annual installments over a ten year period with the first payment due within thirty days after the event requiring payment.
 

 

	
            o
 	
            H.
 	
            In approximate equal semi-annual installments over a fifteen year period with the first payment due within thirty days after the event requiring payment.
 

 

	
            EXHIBIT ONLY – NOT FOR SIGNATURE
 
	 
	
             
 	
             
 	
             
 
	
            [INSERT OFFICER NAME] Employee
 	
             
 	
            Date
 

 

 

 

8

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