Document:

Exhibit 10.12

 

NATIONAL MENTOR, INC.

EXECUTIVE DEFERRED COMPENSATION PLAN

 

(Effective March
9, 2001)

 

 

CERTIFICATE

 

I,                     ,
the                         
of National Mentor., Inc., do hereby certify that the attached is a true and
correct copy of the National Mentor, Inc. Executive Deferred Compensation Plan
as in effect on March 9, 2001.

 

 

	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
						

 

 

Dated this 9th day of March, 2001.

 

 

NATIONAL MENTOR, INC, 

EXECUTIVE DEFERRED COMPENSATION PLAN

 

(Effective March 9,2001)

 

Table of Contents

 

	
   

  	
   

  	
  Page

  
	
  ARTICLE I

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  Introduction

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Name

  	
  1

  
	
  1.2

  	
  Purpose

  	
  1

  
	
  1.3

  	
  Administration of the Plan

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  Plan Participation

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Eligibility

  	
  3

  
	
  3.2

  	
  Participation

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
  4

  
	
   

  	
   

  	
   

  
	
  Contributions

  	
   

  	
  4

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Deferral Contributions

  	
  4

  
	
  4.2

  	
  Deferral Contributions Account

  	
  4

  
	
  4.3

  	
  Discretionary Contributions

  	
  4

  
	
  4.4

  	
  Discretionary Contributions Account

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
  4

  
	
   

  	
   

  	
   

  
	
  Earnings on Account Balances

  	
   

  	
  4

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Investments

  	
  4

  
	
  5.2

  	
  Crediting of Contributions

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  Establishment of Trust

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Establishment of Trust

  	
  5

  
									

 

i

 

	
  6.2

  	
  Status of Trust

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  	
  6

  
	
   

  	
   

  	
   

  
	
  Distribution of Account Balances

  	
   

  	
  6

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Vesting

  	
  6

  
	
  7.2

  	
  Timings of Distributions

  	
  6

  
	
  7.3

  	
  (Illegible)

  	
  6

  
	
  7.4

  	
  Involuntary Distributions

  	
  6

  
	
  7.5

  	
  Designation of Beneficiaries

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  Amendment and Termination

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Amendment

  	
  7

  
	
  8.2

  	
  Plan Termination

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  General Provisions

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Non-Alienation of Benefits

  	
  7

  
	
  9.2

  	
  Withholding for Taxes

  	
  8

  
	
  9.3

  	
  Immunity of Committee Members

  	
  8

  
	
  9.4

  	
  Plan not to Affect Employment Relationship

  	
  8

  
	
  9.5

  	
  Assumption of Company Liability

  	
  8

  
	
  9.6

  	
  Subordination of Rights

  	
  8

  
	
  9.7

  	
  Notices

  	
  8

  
	
  9.8

  	
  Gender and Number: Headings

  	
  9

  
	
  9.9

  	
  Controlling Law

  	
  9

  
	
  9.10

  	
  Successors

  	
  9

  
	
  9.11

  	
  Severability

  	
  9

  
	
  9.12

  	
  Action by Company

  	
  9

  
	
  9.13

  	
  Review of Benefit Determinations

  	
  9

  
						

 

ii

 

NATIONAL MENTOR, INC.

 

EXECUTIVE DEFERRED
COMPENSATION PLAN

 

ARTICLE I

Introduction

 

1.1         Name. The name of this plan shall
be the “National Mentor, Inc. Executive Deferred Compensation Plan”
Unless otherwise expressly provided herein, the capitalized terms used in this
Plan shall have the meanings set forth in Article II.

 

1.2         Purpose. This Plan shall
constitute an unfunded nonqualified deferred compensation, arrangement
established for the purpose of providing deferred compensation to a select
group of management or highly compensated employees (as defined for purposes of
Title 1 of ERISA) of the Company
or its Subsidiaries or Affiliates.

 

1.3         Administration of the Plan. The
Plan shall be administered by the Committee; The duties and authority of the
Committee under the Plan shall include (i) the interpretation of the provisions
of the Plan, (ii) the adoption of any rules and regulations which may become
necessary or advisable in the operation of the Plan, (iii) the making of such
determinations as may be permitted or required pursuant to the Plan, and (iv)
the taking of such other actions as may be required for the proper
administration of the Plan in accordance with its terms. Any decision of the
Committee with respect to any matter within the authority of the Committee
shall be final, binding and conclusive upon the Company and Participant, former
Participant, designated beneficiary, and each person claiming under or through
any Participant or designated beneficiary; and no additional authorization or
ratification by the Board of Directors or stockholders of the Company shall be
required. Any action taken by the Committee with respect, to any one or more
Participants shall not be binding on the Committee as to any action to be taken
with respect to any other Participant. A member of the Committee may be a
Participant, but no member of the Committee may participate in any decision
directly affecting his rights or the computation of his benefits as an
individual Participant under the Plan. Each determination required or permitted
under the Plan shall be made by the Committee in the sole and absolute
discretion of the Committee.

 

ARTICLE II

Definitions

 

2.1        “Account” means a bookkeeping
account maintained by the Company for a Participant under the Plan.

 

2.2        “Account Balance” means the
value, as of a specified date, of any of the Accounts of a Participant.

 

2.3        “Affiliate” of any particular
Person means any other Person controlling, controlled by or under common
control with such particular Person, where “control” means the possession,
directly or indirectly, of the power to direct the management and policies of a
Person whether through the

 

 

ownership of voting securities, contract or otherwise,
and if such Person is a partnership, “Affiliate” shall also mean each general
partner and limited partner of such Person. With respect to the Company, the
term Affiliate shall include, without limitation, each professional
corporation, association or other entity which has entered into a management,
billing, or other services agreement with the Company or any Subsidiary
thereof.

 

2.4        “Code.” means the Internal] Revenue Code
of 1986, as amended.

 

2.5        “Committee” means the persons who
have been designated by the Board of Directors of the Company to administer the
Plan. If no persons have been designated by the Board of Directors of the
Company to administer the Plan, the full Board of Directors of the Company
shall constitute the Committee for purposes of this Plan.

 

2.6        “Company” means National Mentor,
Inc., a Delaware corporation, or its successors or assigns under the Plan.

 

2.7        “Deferral Contributions” means
the contributions made on behalf of a Participant pursuant to Section 4.1 of
this Plan.

 

2.8        “Deferral Contributions Account”
means the account maintained on behalf of each Participant which will represent
the amount of the Deferral Contributions made on behalf of such Participant
pursuant to Section 4.3 of the Plan.

 

2.9        “Discretionary Contributions”
means the contributions made on behalf of a Participant pursuant to Section 4.3
of this Plan.

 

2.10      “Discretionary Contributions Account”
means the account maintained on behalf of each Participant which will represent
the amount of the Deferral Contributions made on behalf of such Participant
pursuant to Section 4.3 of the Plan.

 

2.11      “Effective Date” means March 9,
2001.

 

2.12      “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended.

 

2.13      “Participant” means any eligible
employee of the Company or its Subsidiaries or Affiliates who is participating
under the Plan pursuant to Article III.

 

2.14      “Permitted Investment” means such
funds, investments or other assets as may be approved by the Committee from
time to time for purposes of this Plan.

 

2

 

2.15      “Person” means an individual, a
partnership, a corporation, a limited liability company, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization
and a governmental entity of any department, agency or political subdivision
thereof.

 

2.16      “Plan” means this “National mentor,
Inc. Executive Deferred Compensation Plan,” as amended from time to time.

 

2.17      “Plan Year” means the calendar
year, provided, however, that the initial Plan Year shall be the period from
March 9, 2001 through December 31, 2001.

 

2.18      “Sale of the Company” means the
sale of the Company to an independent third party or group of independent third
parties (as the term “group” is used under the Securities Exchange Act of 1934,
as amended) pursuant to which such party or parties acquire (i) capital stock
of the Company possessing the voting power under normal circumstances to elect
a majority of the Company’s Board of Directors (whether by merger,
consolidation, sale or transfer of the Company’s capital stock),or (ii) more
than 50% of the Company’s assets determined on a consolidated basis.

 

2.19      “Subsidiary” means, with
respect to any Person, any corporation, limited liability company, partnership,
association or other business entity, of which (i) if a corporation, a majority
of the total voting power of shares of stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (ii) if a limited liability company, partnership,
association or other business entity, a majority of the limited liability
company, partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity if
such Person or Persons shall be allocated a majority of limited liability
company, partnership, association or other business entity gains or losses or
shall be or control the managing director or general partner of such limited
liability company, partnership, association or other business entity.

 

ARTICLE III

Plan Participation

 

3.1         Eligibility. The Committee shall
designate, in writing, each person that is eligible to receive a benefit under
this Plan (a “Participant”). The initial Participants shall be the
executives of the Company or its Subsidiaries or Affiliates listed on Exhibit
A attached hereto. Only those employees who are in a select group of
management or are highly compensated (within the meaning of Title I of ERISA)
may be designated as eligible to participate under this Plan.

 

3.2         Participation. Each employee of
the Company or its Subsidiaries or Affiliates who has been designated by the
Committee as eligible to participate in this Plan for a Plan Year shall become

 

3

 

a Participant hereunder by timely executing a deferral
election form with the Committee in accordance with the
requirements of Article IV.

 

ARTICLE IV

Contributions

 

4.1         Deferral Contributions. Each
employee of the Company or its Subsidiaries or Affiliates who is eligible to
participate in this Plan may elect to defer a portion of his salary, bonuses or
other compensation. Each Participant desiring to defer compensation hereunder
shall file an election with the Committee in such form and at such time as the
Committee may determine. The completion of such an election shall evidence the
Participant’s authorization of the Company to reduce his Compensation and shall
thereafter be irrevocable.

 

4.2         Deferral Contributions Account.
The Committee shall establish and maintain an account (the “Deferral
Contributions Account”) with respect to each Participant who has elected to
make Deferral Contributions under this Article IV. The Participant’s
Deferral Contributions Account shall be a bookkeeping account maintained by the
Company and shall reflect the amount of compensation the Participant has
elected to defer under the Plan. The amount of any deemed investment earnings
and losses on the amounts reflected in a Participant’s Deferral Contributions
Account shall be credited or charged to his Deferral Contributions Account in
accordance with Article V.

 

4.3         Discretionary Contributions. With
respect to each Plan Year, the Committee may in its sole and absolute
discretion, credit a Participant’s Discretionary Contributions Account with a
Discretionary Contribution. The Committee may designate Discretionary
Contributions indifferent amounts for each Participant or groups of
Participants and may choose to make no Discretionary Contribution for any
Participant or any group of Participants, in its discretion.

 

4.4         Discretionary Contriburtorts Account.
The Committee shall establish and maintain an account (the “Discretionary
Contributions Account”) with respect to each Participant with respect to whom
Discretionary Contributions have been made on his or her behalf. The amount of
any deemed investment earnings and losses on the amounts reflected in a
Participant’s Discretionary Contributions Account shall be credited at charged
to his Discretionary Contributions Account in accordance with Article V.

 

ARTICLE V

Earnings On
Account Balances

 

5.1         Investments.

 

(a)          Permitted Investments. The
Committee may designate from time to time, that all or a portion of a
Participant’s Accounts be deemed to be invested in one or more Permitted

 

4

 

Investments. Such amounts shall be deemed to be
Invested as of such dates as may be specified by the Committee.

 

(b)         Receipts. Each Account shall be
deemed to receive all interest, dividends, earnings and other property which
would have been received with respect to a Permitted Investment deemed to be
held in such Account if such Account was actually invested
in such Permitted Investment. Cash deemed received with respect to a Permitted
Investment shall be credited to the Account as of the date it would have been
available for reinvestment if the Account was actually invested in the
Permitted Investment.

 

(c)          Actual Investment Not Required.
The Company need not actually make any permitted Investment. If the Company
should from time to time make any investment similar to a Permitted Investment,
such investment shall be solely for the Company’s own account and the
Participant shall have no right, title or interest therein. Accordingly, each
Participant is solely an unsecured creditor of the Company with respect to any
amount distributable to him under the Plan.

 

5.2         Crediting of Contributions. The
Company shall credit all Deferral Contributions to a Participant’s Deferral
Contributions Account within a reasonable period following the date on which
such deferred amounts would have been paid to the Participant if the
Participant had not made a deferral election under Article IV. The Company
shall credit Discretionary Contributions (if any) to a Participant’s
Discretionary Contributions Account within a reasonable period following the
last day of each Plan Year.

 

ARTICLE VI

Establishment of
Trust

 

6.1         Establishment of Trust. The
Company may, in its sole discretion, establish a grantor trust (as described in
Section 671 of the Code) for the purpose of accumulating assets to provide for
the obligations hereunder. The assets, and income of such trust shall be
subject to the claims of the general creditors of the Company. The
establishment of such a trust shall not affect the Company’s liability to pay
benefits hereunder except that any such liability shall
be offset by any payments actually made to a Participant under such a trust. In
the event such a trust is established, the amount to be contributed thereto
shall be determined by the Company and the investment of such assets shall be
made in accordance with the trust document.

 

6.2         Status of Trust. Participants
shall have no direct or secured claim in any asset of the trust or in specific
assets of the Company and will have the status of general unsecured creditors
of the Company for any amounts due under this Plan. The assets and income of
the trust will be subject to the claims of the Company’s creditors as provided
in the trust document.

 

5

 

ARTICLE VII

Distribution of
Account Balances

 

7.1         Vesting. A Participant’s Account
Balance shall be 100% vested and nonforfeitable and shall be distributable to
the Participant or, in the event of the Participant’s death, to his
beneficiary, as provided in Section 7.2 below, subject however, to the
provisions of this Plan (including those provisions limiting a Participant’s
rights to those of an unsecured creditor of the Company).

 

7.2         Timing of Distributions.

 

Illegible
be distributable as soon as administratively practicable following the
earliest of:

 

(i)          the first day of the month following
the date that the Participant retires or terminates from employment of the
Company and its Affiliates;

 

(ii)         at the time provided in Section 7.4; or

 

(iii)        the date specified by the Participant on
his deferral election form.

 

(b)         Election to Defer. Notwithstanding
subsection (a) above, at any time before the first to occur of the events
listed in subsection (i) to (iii) of subsection (a), the Participant may elect
to defer the time when his Account Balance would be payable to him to a
subsequent date (not later than the first, business day of the calendar year
following the calendar year of his retirement or other termination of
employment with the Company). If such election becomes effective as provided in
the next sentence, then the Participant’s Account Balance will be payable at
the time specified in such election. The Participant’s election under this
subsection (b) will become effective only if the Participant remains an
Employee of the Company or its Subsidiaries or Affiliates for at least one year
after making such election.

 

Notwithstanding subsections (a) and (b), as
provided in Section 7.4, the Committee in its discretion (which the Committee
will not be obligated to exercise in any instance or instances) may accelerate
the distribution of the Account Balance of any Participant who has terminated
employment to such date as the Committee determines; and such distribution will
be made on or as soon as administratively practicable following such date.

 

7.3         Form of Distribution of Account
Balances. Each Participant’s Account Balance will be distributed to him in
cash (and not in kind) as a lump sum payment. The lumpsum payment will be made
on the date provided in Section 7.2.

 

7.4         Involuntary Distributions.
Notwithstanding the foregoing provisions of this Article VII, the Committee may
on its own initiative authorize and direct the Company to distribute to any
Participant, (or to a designated beneficiary in the event of the Participant’s
death) all or any portion of the Participant’s Account Balance. Such payment
would be specifically authorized and directed in the event that there is a
change in tax law, a published ruling or similar announcement issued by the
Internal Revenue Service, a regulation issued by the Secretary of the Treasury,
a decision by a court of competent jurisdiction involving a Participant or a
beneficiary, or a closing agreement made under Section 7121 of the

 

6

 

Code that is approved by the Internal Revenue Service
and involves a Participant, and the Committee determines that a Participant has
or will recognize income for federal income tax purposes with respect to
amounts deferred under this Plan prior to the time such amounts otherwise would
be paid to the Participant.

 

7.5         Designation of Beneficiaries.
Each Participant may name any person (who may be named concurrently,
contingently or successively) to whom the Participant’s Account Balance under
the Plan is to be paid if the Participant dies before such Account Balance is
fully distributed. Each such beneficiary designation will revoke all prior
designations by the Participant, shall not require the consent of any
previously named beneficiary, shall be in a form prescribed by or otherwise
acceptable to the Committee and will be effective only when filed with the
Committee during the Participant’s lifetime. If a Participant fails to
designate a beneficiary before his death, as provided above, or if the
beneficiary designated by a Participant dies before the date o f the
Participant’s death or before complete payment of the Participant’s Account
Balance, the Committee, in its discretion, may pay the Participant’s Account
Balance to either (i) one, or mote of the Participant’s relatives by blood
(Illegible) marriage and in such proportions as the (Illegible) determines,
(Illegible) of the estate (Illegible) of the Participant and his designated
beneficiary.

 

ARTICLE VIII

Amendment and Termination

 

8.1         Amendment. The Company, in its
discretion, shall have the right to amend the Plan from time to time, except
that no such amendment shall, without the consent of the
Participant to whom deferred compensation has been credited to any Account
under this Plan, adversely affect the right of the Participant (or his
beneficiary) to receive payments of such(1) deferred compensation under the
terms of this Plan.

 

8.2         Plan Termination. The Company
may, in its discretion, terminate the Plan at any time, however, no termination
of this plan shall alter the right of a PARTICIPANT (or (illegible) Notwithstanding
the preceding sentence or Section 8.1, in connection with the Plan’s
termination (or in any amendment adopted in connection with such termination),
as provided in Section 7.4, the Company may provide that each Participant’s
Account Balance under the Plan will be distributed as soon as my be practicable
to the Participant (or, if applicable, beneficiary).

 

ARTICLE IX

General Provisions

 

9.1         Non-Alienation of Benefits. A
Participant’s rights to the Amounts credited: to his Accounts under the
Plan shall not be grantable, transferable, pledgeable or otherwise assignable, in whole
or in part, by the voluntary or involuntary acts of any person, or by operation
of law, and shall not be liable

 

7

 

or taken for any obligation of such person. Any such
attempted grant, transfer, pledge or assignment shall be null and void and
without any legal effect.

 

9.2         Withholding for Taxes.
Notwithstanding anything contained in this Plan to the contrary, the Company
shall withhold from any distribution made under the Plan such amount or amounts
as may be required for purposes of complying with the tax withholding
provisions of the Code or any State income tax act for purposes of paying any
income, estate, inheritance or other tax attributable to any amounts
distributable or creditable under the Plan.

 

9.3         Immunity of Committee Members.
The members of the Committee may rely upon any information, report or opinion
supplied to them by any officer of the Company or any legal counsel, independent
public accountant or actually, and shall be fully protected in relying upon any
such information, report or opinion. No member of the Committee shall have any
liability to the Company or any Participant, former Participant, designated
beneficiary, person claiming under or through any Participant or designated
beneficiary or other person interested or concerned in connection with any
decision made by such member of the Committee pursuant to the Plan which was
based upon any such information, report or opinion if such member of the
Committee relied thereon in good faith, or for any other action or
omission of the Committee member made in good faith in connection with the
operation of this Plan.

 

9.4         Plan Not to Affect Employment
Relationship. Neither the adoption of the Plan nor its operation shall in
any way affect the right and power of the Company or its Subsidiaries or
Affiliates to dismiss or otherwise terminate the employment or change the terms
of the employment or amount of compensation of any Participant at anytime for
any reason or without cause. By accepting any payment under this
Plan, each Participant, former Participant, designated beneficiary and each
person claiming under or through such person, shall be conclusively bound by
any action or decision taken or made under the Plan by the Committee.

 

9.5         Assumption of Company Liability.
The obligations of the Company under the Plan . may be assumed by any affiliate
of the Company, in which case such affiliate shall be obligated to satisfy all
of the Company’s obligations under the Plan and the Company shall be released
from any continuing obligation under the Plan. At the Company’s request, a
Participant or designated beneficiary shall sign such documents as the Company
may require in order to effectuate the purposes of this Section.

 

9.6        Subordination
of Rights. At the Committee’s request, each Participant or designated
beneficiary shall sign such documents as the Committee may require in order to
subordinate such Participant’s or designated beneficiary’s rights under the
Plan to the rights of such other creditors of the Company as may be specified
by the Committee.

 

9.7         Notices. Any notice required to
be given by the Company or the Committee hereunder shall be in writing and
shall be delivered in person or by registered or certified mail, return receipt
requested. Any notice given by registered mail shall be deemed to have been
given upon the date of registration or certification by the Post Office,
correctly addressed to the last known address (as appearing in the records of
the Committee or the Company) of the person to whom such notice is to be given.

 

8

 

9.8         Gender and Number Headings.
Wherever any words are used herein in the masculine gender they shall be
construed as though they were also used in the feminine gender in all cases
where they would so apply; and wherever any words are used herein in the
singular form they shall be construed as though they were also used in the
plural form in all cases where they would so apply. Headings of sections and
subsections of the Plan are inserted for convenience of reference and are not
part of the Plan and are not to be considered in the construction thereof.

 

9.9         Controlling Law. The Plan shall
be constructed in accordance with the laws of the State of Delaware, to
the extent not preempted by any applicable federal law.

 

9.10       Successors. The Plan is binding on
all persons entitled to benefits hereunder and their respective heirs and legal
representatives, on the Committee and its successor and on any Employer and its
successor, whether by way of merger, consolidation, purchase or otherwise.

 

9.ll         Severability. If any provision of
the Plan shall be held illegal or invalid for any reason, such illegality or
invalidity shall not affect the remaining provisions of the Plan, and the Plan
shall be enforced as if the invalid provisions had never been set forth
therein.

 

9.12       Action by Company. Any action
required or permitted by the Company under the Plan shall be by resolution of
its Board of Directors or by a duly authorized committee of its Board of
Directors, or by a person or persons authorized by resolution of its Board of
Directors or such committee.

 

9.13       Review of Benefit Determinations. If
a claim for benefits made by a Participant or his or her beneficiary is denied,
the Committee shall within 90 days (or  180 days if special
circumstances require an extension of time) after the claim is made furnish the
person making the claim with a written notice specifying the reasons for the
denial. Such notice shall also refer to the pertinent Plan provisions on which
the denial is based, describe any additional material or information necessary
for properly completing the claim and explain why such material or information
is necessary, and explain the Plan’s claim review procedures. If requested in
writing, the Committee shall afford each claimant whose claim has been denied a
full and fair review of the Committee’s decision and, within 60 days (120 days
if special circumstances require additional time) of the request for
reconsideration of the denied claim, the Committee shall notify the claimant in
writing of the Committee’s final decision.

 

*  *  *  *  *

 

9

 

EXHIBIT
A

 

Initial
Participants

 

Greg Torres 

Elizabeth Hopper 

Don Monack

 

 

National Mentor, Inc.

Board Resolution

Modifications to:

National Mentor, Inc. Executive Deferred

Compensation Plan

 

Be it resolved that:

 

Effective May 1, 2003 the following modifications
shall he made to the National Mentor Executive
Deferred Compensation Plan (the Plan).

 

•                             That
henceforth the contributions for the CEO shall be thirteen percent (13%) of
annual base compensation (not including bonus);

 

•                             That
henceforth, contribution for each of the Executive Vice Presidents shall be
eleven percent (11%) of annual base compensation (not
including bonus);

 

•                             That,
henceforth the following employees shall be admitted into the Plan and
contributions shall be nine percent (9%) of base compensation (not including
bonus): Julie Fay, John Green, Denis Holler, Tripp Jones, Bob Longo, Bruce
Nardella and Dave Peterson.

 

All such “contributions” are not funded (backed by any
specific asset) and are general liabilities of National Mentor, Inc. The
account balances accrue interest at a rate set by the board of National Mentor,
Inc. at the beginning of the calendar year and are compounded annually an the
end of the fiscal year. For fiscal 2003 the interest rate has been set at six
percent (6%)

 

 

	
   

  	
  Voted and Approved; September 22, 2003

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Denis M. Holler

  	
   

  
	
   

  	
  Denis M. Holler

  
	
   

  	
  Assistant SecretaryExhibit 10.13

 

NATIONAL MENTOR, INC. EXECUTIVE DEFERRAL PLAN

 

Effective as of November 1, 2003

 

 

ARTICLE 1: Establishment and Purpose

 

1.1           Establishment.  National Mentor, Inc. (the “Company”)
hereby establishes the National Mentor, Inc. Executive Deferral Plan (the “Plan”),
effective as of October 1, 2003.

 

1.2           Purpose.  The purpose of the Plan is to permit
designated executives of the Company to accumulate additional retirement income
through a nonqualified deferred compensation plan that enables them to make
Elective Deferrals in excess of those permitted under the Mentor Networks
401(k) Retirement Plan and to receive matching contributions that are otherwise
precluded by the provisions of that plan or by applicable law.  This Plan is intended to be unfunded and
maintained by the Company primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
within the meaning of §§201(2), 301(a)(3) and 401(a)(1) of the
Employee Retirement Income Security Act of 1974 (“ERISA”).

 

ARTICLE 2: Participation

 

2.1           Commencement of
Participation.  An Eligible
Employee will become a Participant on the earliest Entry Date on which he or
she (i) is eligible to participate in the Qualified Plan, (ii) is
designated as a Participant by written action of the Committee, and (iii) executes
and delivers a valid Salary Reduction Agreement to the Committee.

 

2.2           Cessation of Participation.  If a Participant ceases to satisfy any of the
conditions of Section 2.1, his or her participation in this Plan
immediately terminates, except that the Participant’s Account will continue to
be held for his or her benefit and will be distributed to him or her in
accordance with Article 7.  A former
Participant may resume participation as of any Entry Date on which he or she
again satisfies the conditions of Section 2.1.

 

ARTICLE 3: Accounts

 

3.1           Establishment of Accounts.  The Company hereby establishes, for each
Participant (i) a Salary Reduction Accrual Account (for the purpose of
recording the current value of his or her Salary Reduction Accruals) and (ii) a
Matching Contribution Accrual Account (for the purpose of recording the value
of his or her Matching Contribution Accruals). 
All Accounts are established and maintained for the purpose of
reflecting the liability of the Company to Participants.  The Company is under no obligation to
segregate any assets to provide for the liabilities reflected by these
Accounts.  If the Company elects to
segregate assets pursuant to Section 4.4, the Funding Vehicle must
establish and maintain separate Salary Reduction Accrual Accounts and Matching
Contribution Accrual Accounts.

 

 

3.2           Valuation of Accounts.  All Accounts must be valued as of each
Allocation Date and as of any other Valuation Date designated by the Committee.

 

ARTICLE 4: Accrual of Benefits

 

4.1           Types of Contribution.  For any Plan Year, Participants will accrue
benefits in the manner described in this Section 4.1.

 

(a)            For each Plan Year,
the Company will credit each Participant’s Salary Reduction Accrual Account
with the amount specified in his or her Salary Reduction Agreement for such
year.

 

(b)           For each Plan Year,
the Company will credit Matching Contribution Accruals to the Matching
Contribution Accrual Account of each Participant in an amount equal to the “matching
contribution rate” (as defined below) multiplied by the portion of such
Participant’s Salary Reduction Accrual not in excess of the then current
limitation under Code Section 402(g). 
For purposes of this Section 4.1(b), the phrase, “matching
contribution rate” means the contribution rate and compensation percentage
limits for matching contributions under the Qualified Plan for the Plan Year.

 

(c)            In addition to the
mandatory Matching Contribution Accruals described in Section 4.1(b), the
Company may credit additional Matching Contribution Accruals to the Matching
Contribution Accrual Accounts of all Participants in any Plan Year at such
rate, and at such times, as the Board determines in the sole exercise of its
discretion.

 

4.2           Timing of Accruals.  Salary Reduction Accruals under Section 4.1(a) are
deemed to accrue on the date on which the Participant would otherwise have
received the Compensation that he or she elected to defer.  Matching Contribution Accruals described in Section 4.1(b) are
deemed to accrue on the date of the Salary Reduction Accruals to which they
relate.  Matching Contribution Accruals
described in Section 4.1(c) are deemed to accrue on the date
designated (or, if no accrual date is specified, then on the date voted) by the
Board.

 

4.3           Salary Reduction
Agreements

 

(a)            By executing a
Salary Reduction Agreement with respect to a Plan Year, a Participant may elect
to have Salary Reduction Accruals credited under the Plan on his or her
behalf.  The current salary and bonus of
a Participant who executes a Salary Reduction Agreement will be reduced by the
amount specified in the election, and an equal amount will be credited to and
accrue under the Plan in accordance with Section 4.1.  Salary Reduction Agreements must separately
designate the amount of reduction of Compensation to be taken from base salary
and bonuses for the Plan Year. 
Reductions may be expressed as a percentage or dollar amount of salary
or bonuses.  Salary Reduction
Contributions may not be made with respect to Compensation other than salary
and bonuses.  A Salary Reduction
Agreement becomes irrevocable as of the date specified in Section 4.3(b).

 

(b)           A Salary Reduction
Agreement with respect to any Plan Year after the Plan’s initial year must be
executed no later than the last day of the preceding Plan Year.  A Salary Reduction Agreement for the initial
Plan Year must be executed before the Effective

 

2

 

Date. 
No Salary Reduction Agreement may be amended or revoked after the last
day on which it could have been executed, except that an agreement is
automatically revoked if the Participant who executed it ceases to be eligible
to participate in the Plan.  An employee
who first becomes an Eligible Employee within a Plan Year may execute a Salary
Reduction Agreement to become effective upon the next Entry Date.

 

(c)            With respect to any
Plan Year, the amount deferred by a Participant in accordance with Section 4.3
may not exceed 100% of his or her Compensation for the year, less his or her
salary reduction contributions under the Qualified Plan and any other of the
Company’s fringe or other benefit plans.

 

4.4           Contributions to Funding
Vehicle.  The Company may, but
is not required to, establish and make contribution of any or all amounts
accrued under Section 4.1 to a Funding Vehicle.  Contributions will be credited with income,
expense, gains and losses in accordance with the investment experience of the
Funding Vehicle.  The Committee may
permit Participants to direct the allocation of their Account balances among
these funds established with a Funding Vehicle in accordance with rules prescribed
by the Committee.  The Committee may
alter the available funds or the procedures for allocating Account balances
among them at any time.

 

4.5           Status of the Funding
Vehicle.  Despite any other
provision of this Plan, all assets held in a Funding Vehicle (including any
insurance policy established or acquired for funding purposes) will at all
times be and remain the property of the Company and subject to the claims of
the Company’s creditors.  No Participant
will have any priority claim on, or security interest or other right in, any
such assets or insurance policy that is superior to the rights of the Company’s
general creditors.

 

4.7           Non-alienability.  A Participant’s rights under this Plan may
not be voluntarily or involuntarily assigned or alienated.  If a Participant attempts to assign his or
her rights or enters into bankruptcy proceedings, his or her right to receive
payments under the Plan will terminate, and the Committee may apply them in
whatever manner will, in its judgment, serve the best interests of the
Participant.

 

ARTICLE 5: Vesting

 

Vesting
Standards.  A
Participant’s interest in his or her Salary Reduction Accrual Account and
Matching Contribution Accrual Account is fully vested at all times.

 

ARTICLE 6: Transfers and Adjustments

 

6.1           Transfers to Qualified
Plan.  As soon as practicable
after the end of each Plan Year, the Committee will determine (on a percentage
basis) each Participant’s “transfer amount,” which equals the excess of (i) the
Elective Deferrals that the Participant could have made under the Qualified
Plan without causing elective deferrals and matching contributions under the Qualified
Plan to exceed the limitations of Code §§401(k)(3), 402(g), or §401(m)(2) of
the Code, over (ii) any elective deferrals he or she actually contributed
directly to the Qualified Plan for such year. 
No later than two and one-half (21⁄2) months after the end of each Plan
Year, each Participant’s Salary Reduction Accrual Account will be debited by
his or her transfer amount,

 

3

 

and the Company will transfer a like amount
to the Participant’s elective deferral account under the Qualified Plan.  The Company shall have no discretion to
retain the transfer amount in this Plan or to modify the calculation of the
transfer amount for any Participant.

 

6.2           Debit to Matching
Contribution Accrual Account. 
Each Participant’s Matching Contribution Accrual Account will be reduced
by an amount equal to the matching contributions made on his behalf under the
Qualified Plan on account of the transfer amount.

 

ARTICLE 7: Distributions

 

7.1           Distributions.

 

(a)            The vested portion
of a Participant’s Account will be distributed to him or her as a result of (i) his
or her Termination of Employment for any purpose (including his or her Normal
Retirement Date or Early Retirement Date), (ii) his or her death or
Disability, or (iii) the termination of the Plan, whichever first
occurs.  Vesting will be determined in
the manner prescribed by Article 5, and the dollar amount of the
distribution will be determined as of the Valuation Date coincident with or
first preceding the date of distribution.

 

(b)           Distributions to a
Participant or, in the case of a Participant’s death, his or her Beneficiary,
will be made or commence to be made at the Participant’s election either (i) in
cash, in a single lump sum, or (ii) in substantially equal monthly
installments for either 5 years (60 installments) or 10 years (120
installments).  The Participant must make
his or her election regarding the form of distribution under this Section 7.1
when the Participant first commences or resumes Participation in the Plan.  A Participant may change his or her election
as to the form of distribution under the first sentence of this Section 7.1(b) by
filing and amended election form with the Committee, but not such change may be
made at any time during the 12-month period ending on the date that
distributions commence.

 

(c)            All distributions
from the Plan to Participants and Beneficiaries must be made within a
reasonable time following the occurrence of the event that triggers the
distribution and will be made in cash, unless the Committee determines that
other property should be distributed.

 

7.2           Manner of Distribution to
Minors or Incompetents.  If at
any time any distributee is, in the judgment of the Committee, legally,
physically or mentally incapable of receiving any distribution due to him or
her, the distribution will be made to the guardian or legal representative of
the distributee, or, if none exists, to any other person or institution that,
in the Committee’s judgment, will apply the distribution in the best interests
of the intended distributee.

 

7.3           Election of Beneficiary

 

(a)           When an Eligible
Employee qualifies for participation in the Plan, the Committee will provide
him or her with a Beneficiary designation form for the purpose of designating
one or more Beneficiaries and successor Beneficiaries.  A Participant may change his Beneficiary
designation at any time by filing the prescribed form with the Committee.  The consent of the Participant’s current
Beneficiary is not required for a change of Beneficiary and no

 

4

 

Beneficiary has any rights under this Plan
except as provided by its terms.  The
rights of a Beneficiary who predeceases the Participant will terminate as of
the Beneficiary’s death.

 

(b)           Unless a different
Beneficiary has been designated in accordance with Section 7.3(a), the
Beneficiary of any Participant who is lawfully married on the date of his death
is his surviving spouse.  The Beneficiary
of any other Participant who dies without having designated a Beneficiary is
his estate.

 

7.4           Unforeseeable Emergencies.  A Participant may request a withdrawal of all
or a portion of his or her Account derived from Salary Reduction Accruals (but
not from Matching Accruals) as necessary to satisfy an immediate and heavy
financial need in the case of an Unforeseeable Emergency.  For purposes of this Section 7.4, “Unforeseeable
Emergency” means a severe financial hardship to the Participant resulting from
a sudden and unexpected illness or accident of the Participant or of a
dependent of the Participant, loss of the Participant’s property due to
casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant.  The circumstances that will constitute an
Unforeseeable Emergency will depend upon the facts of each case, but, in any
case, payment may not be made in the event that the resulting financial
hardship is or may be relieved (i) through reimbursement or compensation
by insurance or otherwise, or (ii) by liquidation of the Participant’s
assets, to the extent that liquidation of such assets would not itself cause
severe financial hardship.  The need to
send a Participant’s child to college or the desire to purchase a home will not
be an Unforeseeable Emergency.  The
Committee will determine the existence of an Unforeseeable Emergency and the
manner of withdrawal in accordance with applicable law.  Withdrawals made pursuant to this Section 7.4
will begin within 30 days after the date on which the Committee approves the
Participant’s request for withdrawal.

 

ARTICLE 8: Amendment or Termination of
the Plan

 

8.1           Company’s Right to Amend
Plan.  Subject to Section 8.2,
the Board of Directors may, at any time and from time to time, amend, in whole
or in part, any of the provisions of this Plan or may terminate it as a whole
or with respect to any Participant or group of Participants.  Any such amendment is binding upon all
Participants, Beneficiaries, the Committee and all other parties in interest.  A resolution amending or terminating the Plan
becomes effective as of the date specified therein.

 

8.2           Restriction on Retroactive
Amendments.  No amendment may
retroactively deprive a Participant of any benefit accrued under the Plan
before the date of the amendment.

 

ARTICLE 9: Plan Administration

 

9.1           The Committee.  A Committee consisting of one or more persons
appointed by the Board of Directors will administer the Plan.  The Board may remove any member of the
Committee at any time, with or without cause, and may fill any vacancy.  If a vacancy occurs, the remaining member or
members of the Committee have full authority to act.  Any member of the Committee may resign by delivering
his or her written resignation to the Board and the Committee.  Any such resignation will become effective
upon its receipt by the Board or on such other date as is agreed to by the
Board and the resigning Committee member. 
The Committee

 

5

 

acts by a majority of its members at the time
in office and may take action either by vote at a meeting or by consent in
writing without a meeting.  The Committee
may adopt such rules as it deems desirable for the conduct of its affairs
and the administration of the Plan.

 

9.2           Powers of the Committee.  In carrying out its duties with respect to
the general administration of the Plan, the Committee has, in addition to any
other powers conferred by the Plan or by law, the following; powers:

 

(i) To determine all questions relating
to eligibility to participate in the Plan;

 

(ii) To compute and certify the amount
and kind of distributions payable to Participants and their Beneficiaries;

 

(iii) To maintain all records necessary
for the administration of the Plan;

 

(iv) To interpret the provisions of the
Plan and to make and publish such rules for the administration of the Plan
as are not inconsistent with the terms thereof;

 

(v) To establish and modify the method
of accounting for the Plan;

 

(vi) To employ counsel, accountants and
other consultants to aid in exercising its powers and carrying out its duties
hereunder; and

 

(vii) To perform any other acts
necessary and proper for the administration of the Plan.

 

9.3           Indemnification.  The Company agrees to indemnify and hold
harmless each member of the Committee against any and all expenses and
liabilities arising out of his action or failure to act in such capacity,
excepting only expenses and liabilities arising out of his own willful
misconduct.  This right of
indemnification is in addition to any other rights to which any member of the
Committee may be entitled.  Liabilities
and expenses against which a member of the Committee is indemnified hereunder
include, without limitation, the amount of any settlement or judgment, costs,
counsel fees and related charges reasonably incurred in connection with a claim
asserted or a proceeding brought against him or the settlement thereof.  The Company may, at its own expense, settle
any claim asserted or proceeding brought against any member of the Committee
when such settlement appears to be in the best interests of the Company.

 

9.4           Claims Procedure.  If a dispute arises between the Committee and
a Participant or Beneficiary over the amount of benefits payable under the
Plan, the Participant or Beneficiary may file a claim for benefits by notifying
the Committee in writing of his claim. 
The Committee will review and adjudicate the claim.  If the claimant and the Committee are unable
to reach a mutually satisfactory resolution of the dispute, it will be submitted
to arbitration under the rules of the American Arbitration
Association.  Each Participant agrees, by
the execution of a Salary Reduction Agreement, that arbitration will be the
sole means of resolving disputes arising under the Plan and waives, on behalf
of himself and his Beneficiary, any fight to litigate any such dispute in a
court of law.

 

6

 

9.5           Expenses of the Committee.  The members of the Committee serve without
compensation for services as such.  The
Company pays the expenses of the Committee.

 

9.6           Expenses of the Plan.  The Company pays the expenses of
administering the Plan.

 

ARTICLE 10: Definitions

 

10.1         Definitions.  As used in this Plan, the following
capitalized words and phrases have the meanings indicated, unless the context
requires a different meaning:

 

(a)            “Account” means amounts credited to
a Participant under the Plan, as described in Article 3.

 

(b)           “Allocation Date” means the last day
of each Calendar Quarter.

 

(c)            “Beneficiary” means the person or
persons designated by a Participant, or otherwise entitled, to receive any
amount credited to his Account that remains undistributed at his death.

 

(d)           “Board of Directors” or “Board” means
the board of directors of the Company.

 

(e)            “Code” means the Internal Revenue
Code of 1986 as amended.

 

(f)            “Committee” means the committee
appointed in accordance with Section 9.1 to administer the Plan.

 

(g)           “Company” means National Mentor, Inc.
and any subsidiaries, affiliates or successors.

 

(h)           “Compensation” means the aggregate
compensation paid to a Participant by the Company for a Plan Year, including
salary, overtime pay, commissions, bonuses and all other items that constitute
wages within the meaning of Code §3401(a) or are required to be reported
under Code §§6041(d), 6051(a)(3) or 6052. Compensation also includes
Salary Reduction Accruals under this Plan and any Elective Deferrals under
cash-or-deferred arrangements or cafeteria plans that are not includible in
gross income by reason of Code §125 or Code §402(a)(8) but does not
include any other amounts contributed pursuant to, or received under, this Plan
or any other plan of deferred compensation. 
Compensation excludes all stock option transactions, relocation
reimbursements, and automobile allowances.

 

(i)             “Disability” means a mental or
physical condition that, in the opinion of a licensed physician approved by the
Committee, renders a Participant permanently incapable of satisfactorily
performing his usual duties for the Company or the duties of such other
position as the Company may make available to him for which he is qualified by
reason of training, education or experience.

 

7

 

(j)             “Early Retirement Date” means the
later of (i) the date on which a Participant attains age 591⁄2 or (ii) his
or her completion of ten (10) Years of Service.

 

(k)            “Effective Date” means October 1,
2003, the date on which this Plan went into effect.

 

(l)             “Eligible Employee” means an
employee of the Company who is a key member of the Company’s management or a
highly compensated employee within the meaning of ERISA §§201(2), 301(a)(3) and
401(a)(1).

 

(m)           “Entry Date” means the Effective Date
and each January 1st, April 1st, July 1st or October 1st
thereafter.

 

(n)           “Funding Vehicle” means a trust or
insurance polices which are established or acquired by the Company to hold
amounts accrued by the Company in accordance with Section 4.4.

 

(o)           “Matching Contribution Accrual” means
an amount credited to a Participant’s Account in accordance with Section 4.1(b).

 

(p)           “Matching Contribution Accrual
Account” means the account established to record Matching Contribution Accruals
on a Participant’s behalf.

 

(q)           “Normal Retirement Date” means a
Participant’s sixty-fifth (65th) birthday.

 

(r)            “Participant” means any Eligible
Employee who satisfies the conditions for participation in the Plan set forth
in Section 2.1.

 

(s)            “Plan” means the National Mentor, Inc.
Executive Deferral Plan, as set forth in this document and as amended from time-to-time.

 

(t)            “Plan Year” means the accounting
year of the Plan, which ends on December 31st.

 

(u)           “Qualified Plan” means the Mentor
Networks 401(k) Plan, as from time-to-time amended.

 

(v)           “Salary Reduction Accrual” means an
amount credited to the Salary Reduction Accrual Account pursuant to a Salary
Reduction Agreement.

 

(w)           “Salary Reduction Accrual Account”
means the account established to record Salary Reduction Accruals authorized by
Participants under the terms of this Plan.

 

(x)            “Salary Reduction Agreement” means
an agreement between a Participant and the Company, under which the Participant
agrees to a reduction in his Compensation and the Company agrees to credit him
with Salary Reduction Accruals under this Plan.

 

8

 

(y)           “Termination of Employment” means a
Participant’s or former Participant’s separation from the service of the
Company (including all affiliates of the Company) by reason of his or her
resignation, retirement, discharge or death.

 

(z)            “Valuation Date” means any
Allocation Date and any other date as of which the value of Participants’
Accounts is determined.

 

ARTICLE 11: Miscellaneous

 

11.1         Plan Not a Contract of
Employment.  The adoption and
maintenance of the Plan does not constitute a contract between the Company and
any Participant and is not a consideration for the employment of any
person.  Nothing herein contained gives
any Participant the right to be retained in the employ of the Company or
derogates from the right of the Company to discharge any Participant at any
time without regard to the effect of such discharge upon his rights as a
Participant in the Plan.

 

11.2         Undefined Terms.  Unless the context clearly requires another
meaning, any term not specifically defined in this Plan is used in the sense
given to it by the Qualified Plan.

 

11.3         Headings.  The headings of Articles, Sections and
Subsections are for reference only and are not to be utilized in construing the
Plan.

 

11.4         Singular and Plural.  Unless clearly inappropriate, singular terms
refer also to the plural number and vice versa.

 

11.5         Severability.  If any provision of this Plan is held illegal
or invalid for any reason, the remaining provisions are to remain in full force
and effect and to be construed and enforced in accordance with the purposes of
the Plan as if the illegal or invalid provision did not exist.

 

11.6         No Additional Rights Under
Plan.  Nothing in this Plan,
express or implied, is intended, or shall be construed, to confer upon or give
to any person, firm, association, or corporation, other than the parties hereto
and their successors in interest, any right, remedy, or claim under or by
reason of this Plan or any covenant, condition, or stipulation hereof, and all
covenants, conditions and stipulations in this Plan, by or on behalf of any
party, are for the sole and exclusive benefit of the parties.

 

11.7         Governing Law.  The laws of the Commonwealth of Massachusetts
govern the construction and operation of this Plan.

 

EXECUTED this 3rd
day of September 2003.

 

	
   

  	
  National Mentor, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas J. McAuliffe

  	
   

  

 

9

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