Document:

exv4w2

 

CHS
Inc.

Deferred Compensation Plan

Master Plan Document

 

FIRST AMENDMENT

OF

CHS INC.

DEFERRED COMPENSATION PLAN

     WHEREAS, CHS Inc. (the “Company”) has heretofore established and maintains a nonqualified
deferred compensation plan which is embodied in a document effective December 30, 2004 and entitled
“CHS Inc. Deferred Compensation Plan, Master Plan Document (the “Plan document”);

     WHEREAS, the Company has reserved to itself the power to make further amendments of the Plan
document;

     NOW, THEREFORE, the Plan document is hereby amended as follows:

1. APPENDIX A – SHARE OPTION PLAN. Effective December 9, 2005, the Plan document is amended by the
addition of the Appendix A attached hereto.

2. ACCOUNT BALANCE. Effective December 9, 2005, Section 1.1 of the Plan document shall be amended
to read in full as follows:

	1.1	 	“Account Balance” shall mean, with respect to a Participant, an entry on the records of the
Employer equal to the sum of (i) the Deferral Account balance, (ii) the Company Contribution
Account balance, (iii) the Company Restoration Matching Account balance, and (iv) the SOP
Account balance, if any, transferred to this Plan in accordance with Appendix A. The Account
Balance shall be a bookkeeping entry only and shall be utilized solely as a device for the
measurement and determination of the amounts to be paid to a Participant, or his or her
designated Beneficiary, pursuant to this Plan.

 

 

CHS
Inc.

Deferred Compensation Plan

Master Plan Document

 

CHS INC.

DEFERRED COMPENSATION PLAN

APPENDIX A

Share Option Plan Accounts

	 	 	Except where expressly defined in this Appendix, the capitalized terms used herein shall
have the same meanings as the same terms in the Plan document.
	 
	1.1	 	History. Since January 1, 1998, the Company has sponsored the CHS Inc. Share Option
Plan (the “SOP”) for the purpose of providing stock options to certain key individuals. The
options granted under the SOP are in shares of a private investment company established by the
Company as well as shares of certain regulated investment companies. The Company has
determined to discontinue the grant of additional options under the SOP effective December 9,
2005 and to amend the terms of all outstanding options as of December 31, 2005 to comply with
Section 409A of the Code.
	 
	1.2	 	Right to Exercise in 2005. On or before December 9, 2005, each Participant in the
SOP shall have the right to exercise all or any portion of such Participant’s vested options.
	 
	1.3	 	Conversion of Options. Effective December 10, 2005, options which are not exercised
on or prior to December 9, 2005 shall be converted into an account balance (the “SOP Account”)
which shall become part of the Participant’s Account Balance under the CHS Inc. Deferred
Compensation Plan (the “Plan”). The initial SOP Account shall consist of two parts: (i) the
difference of the value of the securities underlying the option less the exercise price (the
“Option Spread”); and (ii) the exercise price of the option (the “Exercise Price Credit”).
The Participant shall not be entitled to payment of the Exercise Price Credit; provided,
however, that the Participant shall have a right to deemed earnings, if any, which accrue on
the portion of the SOP Account representing the Exercise Price Credit.
	 
	1.4	 	Vesting. A Participant shall continue to vest in all options converted into an SOP
Account (excluding the portion of the SOP Account representing the Exercise Price Credit) in
accordance with the vesting schedule applicable to such options under the SOP.
	 
	1.5	 	Crediting/Debiting of SOP Account. Following the conversion, the Participant’s
Option Spread shall no longer be tied to the value of the securities underlying the option
immediately prior to conversion, but shall instead be credited or debited with earnings, gains
or losses under one or more Measurement Funds elected by the Participant, in accordance with
Section 3.9 of the Plan. The Participant’s Exercise Price Credit shall no longer be tied to
the value of the securities underlying the option immediately prior to the conversion, but
shall instead be credited or debited with earnings, gains or losses under one or more
Measurement Funds selected by the Committee. With respect to a Participant who receives an
installment or other partial distribution of the SOP Account in accordance with a Scheduled
Distribution elected pursuant to Section 1.6 below, the portion of the SOP Account
representing the Exercise Price Credit shall be reduced by a pro rata amount. Upon a complete distribution of the SOP Account, the
Exercise Price
Credit shall be reduced to zero (0).

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CHS
Inc.

Deferred Compensation Plan

Master Plan Document

 

	 
	1.6	 	Scheduled Distributions. A Participant who does not exercise all of such
Participant’s options pursuant to Section 1.2 of this Appendix A shall, on or before December
31, 2005, irrevocably elect on an Election Form to receive one or more (not to exceed five
(5)) Scheduled Distributions with respect to the Participant’s SOP Account (minus the Exercise
Price Credit). For purposes of this Section 1.6, the following special rules shall apply:

	 	(a)	 	Subject to the limitations described this paragraph (a), the Participant may
elect to receive or commence a Scheduled Distribution as of any fixed date selected by
the Participant (e.g., January 1, 2007). No more than one (1) Scheduled Distribution
as of a fixed date may be made or commenced in any Plan Year, and the Plan Year
designated by the Participant for the first Scheduled Distribution must be at least one
(1) Plan Year after the end of the Plan Year ending December 31, 2005.
	 
	 	(b)	 	The Participant may elect on an Election Form to receive each Scheduled
Distribution in a lump sum or pursuant to an Annual Installment Method of up to ten
(10) years. If a Participant does not make any election with respect to the form of
payment, then such Participant’s Scheduled Distribution shall be distributed in a
single lump sum.
	 
	 	(c)	 	A Scheduled Distribution of the SOP Account may be postponed in accordance with
Section 4.2 of the Plan. If the Participant has elected to receive multiple Scheduled
Distributions, each Scheduled Distribution shall be treated as a separate payment, each
of which may be postponed through a separate election. If the Participant has elected
to receive a Scheduled Distribution in installments, the installments shall be treated
as a single payment which must be postponed through a single election that applies to
the entire payment.
	 
	 	(d)	 	Notwithstanding the foregoing, if the Participant experiences an Unforeseeable
Financial Emergency, the Participant may petition the Committee for a payout in
accordance with Section 4.4 of the Plan.
	 
	 	(e)	 	With respect to a Participant who is not actively employed with the Company as
of December 9, 2005, if the Participant fails to make a Scheduled Distribution election
with respect to any portion of the SOP Account, that portion of the SOP Account shall
be paid (minus the Exercise Price Credit) as a Scheduled Distribution during the sixty
(60) day period commencing immediately after the Plan Year ending December 31, 2006.
With respect to a Participant who is actively employed with the Company as of December
9, 2005, if the Participant fails to make a Scheduled Distribution election with
respect to any portion of the SOP Account, that portion of the SOP Account shall be
paid (minus the Exercise Price Credit) upon the occurrence of a Benefit Distribution
Date on account of the Participant’s Termination of Employment, Retirement or
Disability, in accordance with the terms of the Plan.

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CHS
Inc.

Deferred Compensation Plan

Master Plan Document

 

	1.7	 	Elections for Retirement or Disability Benefit. With respect to each Participant who
is actively employed by the Company as of December 9, 2005 and who does not exercise all of
such Participant’s options pursuant to Section 1.2 of this Appendix A, such Participant must
complete a Retirement Benefit election in accordance with Article 6 and a Disability Benefit
election in accordance with Article 8.
	 
	1.8	 	Certain Benefits Take Precedence Over Scheduled Distributions.

	 	(a)	 	Change in Control. On or before December 31, 2005, a Participant may
irrevocably elect to receive a single lump sum Change in Control Benefit upon the
occurrence of a Change in Control in accordance with Article 5 of the Plan. If the
Participant elects to receive a Change in Control Benefit, the Change in Control shall
trigger payment of the entire SOP Account (minus the Exercise Price Credit)
notwithstanding any other election to receive one or more Scheduled Distributions. If
a Participant does not make any election with respect to the payment of the Change in
Control Benefit, then such Participant’s SOP Account shall remain in the Plan upon a
Change in Control and shall be subject to the terms one or more Scheduled
Distributions.
	 
	 	(b)	 	Termination, Retirement or Disability Benefit. In accordance with Section 4.3
of the Plan, the occurrence of a Benefit Distribution Date on account of the
Participant’s Termination of Employment or Disability that triggers a Termination or
Disability Benefit shall take precedence over one or more Scheduled Distribution
elections with respect to the SOP Account; provided, however, that the provisions of
this Section 1.8 shall not be applicable to any Participant who was not actively
employed with the Company at the time such Participant elects a Scheduled Distribution
in accordance with Section 1.6 above. The occurrence of a Benefit Distribution Date
that triggers a Retirement Benefit under Article 6 shall not take precedence over any
SOP Account that is subject to a Scheduled Distribution election; the SOP Account shall
be paid in accordance with the applicable Scheduled Distribution election.
	 
	 	(c)	 	Death Benefit. The occurrence of the Participant’s death that triggers an
automatic Death Benefit under Section 9 of the Plan shall take precedence over one or
more Scheduled Distribution elections with respect to the SOP Account; the SOP Account
(minus the Exercise Price Credit) shall be paid in a single lump sum in accordance with
Article 9 of the Plan.

A-3exv4w3

 

Action Required: Must be returned by December 9, 2005

CHS Inc.

Share Option Plan Participants

2005 Plan Agreement and Election Form

Deferred Compensation Plan

	 	 	 
	Name (Last, First, Middle Initial)	 	Social Security Number

You may use this form to:

	 	 	 	 	 
	 

	 	¿
	 	Indicate the amount, if any, of vested Options you wish to exercise during the 2005 Plan Year.
	 
	 	 	 	 
	 

	 	¿
	 	Elect to receive one or more (not to exceed 5) Scheduled Distributions or installment payments (Election required if you are not an active CHS employee; optional election if you are still an active employee)
	 
	 	 	 	 
	 

	 	¿
	 	Allocate your SOP Account among the available investment options.

Section 1: 

Share Option Deferral Election

Please select all that apply; fill in the appropriate blanks with whole percentages.

	 	 	 
	o Payment in 2005

	 	I elect to exercise                     % of my vested Options and receive payment in 2005.
	 
	 	 
	o Defer Payment

	 	With respect to Options not exercised in 2005, I elect to receive payment of such
Options in accordance with the terms of the CHS Inc. Deferred Compensation Plan and
my applicable payment elections made below.
	 
	 	 
	 

	 	If you are not an active CHS employee and you elect to defer payment, you must
complete a Scheduled Distribution election below. If you fail to make a Scheduled
Distribution election, your SOP Account shall be paid (minus the Exercise Price
Credit) during the sixty (60) day period commencing immediately after December 31,
2006.
	 
	 	 
	 

	 	If you are still an active CHS employee and you elect to defer payment, you may
(but need not) complete a Scheduled Distribution election. If you fail to make a
Scheduled Distribution election, your SOP Account shall be paid (minus the Exercise
Price Credit) following your Termination of Employment, Retirement or Disability,
in accordance with the terms of the CHS Inc. Deferred Compensation Plan (and the
form of Retirement Benefit or Disability Benefit payment you elected under the
Plan, as applicable).

			
	 	 	 
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Action Required: Must be returned by December 9, 2005

CHS Inc.

Share Option Plan Participants

2005 Plan Agreement and Election Form

Deferred Compensation Plan

	 	 	 
	 

	 	 

	 

	 	Name (Last, First, Middle Initial)

Section 2:

Scheduled Distribution Election*

Please complete this section if you wish to receive a Scheduled Distribution.

Former Employees: If you are a former employee of CHS Inc. with an SOP
Account, you must make a Scheduled Distribution Election if you do not wish
to receive payment of your SOP Account in 2007.

Active Employees: This section is optional and should be completed if you
desire a scheduled distribution. If you do not make an election under this
section, your account balance will be paid out at termination of employment,
retirement, disability, or death in accordance with the terms of the plan
and your election form.

Please elect one of the following:

	o	 	 Series of Payments. I irrevocably elect to receive one or more (not to exceed 5) Scheduled Distributions of my SOP
Account, as well as any investment gains or losses attributable to such amounts, in the manner indicated below. If you are an active
employee and you elect to receive a Scheduled Distribution on a date following your Retirement, the Scheduled Distribution will be paid on
the date you have elected below, rather than as part of your Retirement Benefit.

	 	1.	 	                    %
payable within 60 days of January 1,
                     (must be 2007 or later)
	 
	 	2.	 	                    % payable within 60 days of January 1,                     
	 
	 	3.	 	                    % payable within 60 days of January 1,                     
	 
	 	4.	 	                    % payable within 60 days of January 1,                     
	 
	 	5.	 	                    % payable within 60 days of January 1,                     

	o	 	Single Lump Sum: I irrevocably elect to receive one Scheduled Distribution of my SOP Account, as well as any investment
gains or losses attributable to such amounts, in the manner indicated below. If you are an active employee and you elect to receive a
Scheduled Distribution on a date following your Retirement, the Scheduled Distribution will be paid on the date you have elected below,
rather than as part of your Retirement Benefit.
	 
	 	 	A lump sum payment within 60 days of January 1,
___ (Must be 2007 or later)
	 
	o	 	Annual installments: I irrevocably elect to receive annual installments of my SOP Account, as well as any investment
gains or losses attributable to such amounts, in the manner indicated below. If you are an active employee and you elect to receive a
Scheduled Distribution on a date following your Retirement, the Scheduled Distribution will be paid on the date you have elected below,
rather than as part of your Retirement Benefit.
	 
	 	 	Annual installments for (___) years (up to 10 years) beginning January 1,                      (Must be 2007 or later)

	 	*	 	If you choose not to elect a Scheduled Distribution, or you elect to receive less than 100% of your SOP Account as a
Scheduled Distribution, the remainder of your SOP Account (minus the Exercise Price Credit), and any related investment gains or
losses, will be paid to you along with the rest of your vested Account Balance pursuant to the Plan. If you are a former employee
of CHS Inc. and you fail to make a Scheduled Distribution Election as to 100% of your SOP Account, the remainder of your SOP Account
(minus the Exercise Price Credit) will be paid to you in 2007. You may elect to postpone the distribution of a previously
designated Scheduled Distribution, provided (i) you submit a properly completed Scheduled Distribution Change Form to the Committee
at least one year prior to your previously designated Scheduled Distribution date, (ii) the new Scheduled Distribution date you
select is at least five years after your previously designated Scheduled Distribution date, and (iii) the election of the new
Scheduled Distribution date is not effective until at least one year after the date the election is made. You may postpone each
scheduled distribution no more than three times.

			
	 	 	 
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Action Required: Must be returned by December 9, 2005

CHS Inc.

Share Option Plan Participants

2005 Plan Agreement and Election Form

Deferred Compensation Plan

Name (Last, First, Middle Initial)

Section 3: 

Allocation Election

Please select in whole percentage increments; the total must equal 100%.

You must make an allocation election. Any portion of your SOP Account (excluding the Exercise Price
Credit) for which you do not select a Measurement Fund will be deemed allocated to the Vanguard Prime Money
Market Fund.

I elect to allocate my SOP Account (excluding the Exercise Price Credit) to the following Measurement Funds:

	 	 	 	 	 
	 

	 	o Vanguard Prime Money Market Fund
	 	                    %
	 
	 	 	 	 
	 

	 	o Vanguard LifeStrategy Income Fund
	 	                    %
	 
	 	 	 	 
	 

	 	o Vanguard LifeStrategy Conservative Growth Fund
	 	                    %
	 
	 	 	 	 
	 

	 	o Vanguard LifeStrategy Moderate Growth Fund
	 	                    %
	 
	 	 	 	 
	 

	 	o Vanguard LifeStrategy Growth Fund
	 	                    %
	 
	 	 	 	 
	 

	 	o Ten-Year T-Note Fund
	 	                    %

			
	 	 	 
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Action Required: Must be returned by December 9, 2005

CHS Inc.

Share Option Plan Participants

2005 Plan Agreement and Election Form

Deferred Compensation Plan

Unless otherwise provided in this Agreement, the capitalized terms in this Agreement shall have
the same meaning as under the Plan’s master plan document (the “Plan Document”) a copy of which
has been made available to the Participant. Effective December 10, 2005, options under the CHS
Inc. Share Option Plan which are not exercised on or prior to December 9, 2005 shall be
converted into an account balance (the “SOP Account”) which shall become part of the
Participant’s Account Balance under the CHS Inc. Deferred Compensation Plan (the “Plan”). The
Plan Document (including Appendix A thereto relating to SOP Accounts) is hereby incorporated
into and made a part of this Agreement as though set forth in full in this Agreement. The
Participant’s SOP Account shall be governed by the terms of the Plan Document (including
Appendix A thereto), and upon conversion of the options into the SOP Account, the Company shall
have no further obligations under the terms of the Share Option Plan. The Participant hereby
acknowledges that he or she has read and understands this Agreement and the Plan Document and as
a condition to participation in the Plan, the Participant must complete, sign, date and return
to the Committee an original copy of this Agreement, various Election Forms as required by the
Committee, and a Beneficiary Designation.

This Agreement shall inure to the benefit of, and be binding upon the Employer, its successors
and assigns, and the Participant. Subject to ERISA, the provisions of this Plan shall be
construed and interpreted according to the internal laws of the State of Minnesota without
regard to its conflicts of laws principles.

	 	 	 	 	 
	ACKNOWLEDGED AND AGREED:

	 	 	 	ACCEPTED:
	 
	 	 
	 
	 	 
	Signature of Participant

	 	Date	 	For the Committee
                  
            Date
	 
	 	 	 	
	 
	 	 
	Name (Last, First, Middle Initial)
	 	 	 	 

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