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EX-10.37
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EXHIBIT 10.37
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EXHIBIT 10.37
ROTO-ROOTER
DEFERRED COMPENSATION PLAN NO. 1
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The purpose of this Plan is to provide certain deferred compensation
benefits to a select group of management and highly compensated employees of
designated affiliates of Roto-Rooter, Inc. This Plan amends and restates in its
entirety the August 1, 1991 Roto-Rooter Management Company Deferred Compensation
Plan.
The Plan's benefits are not insured by the Pension Benefit Guaranty
Corporation. The Plan is intended to provide deferred compensation within the
scope of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement
Income Security Act of 1974 ("ERISA"), as amended. The Plan is intended to be an
unfunded arrangement for purposes of ERISA.
SECTION 1. DEFINITIONS
1.1 "Account" or "Deferred Compensation Account" means the bookkeeping
account maintained for each Participant.
1.2 "Beneficiary" means the person or entity designated by a
Participant in a "Designation of Beneficiary" form prescribed by and filed with
the Committee for this Plan. A "Beneficiary" may include the Participant's
estate or a trust. A Participant may at any time change a designation of a
Beneficiary by filing a new Designation of Beneficiary form with the Employer.
If a Participant has not made an effective designation, or if a Beneficiary does
not survive the Participant, then "Beneficiary" means the Participant's estate.
In the event the Committee has any doubt as to the proper person or entity
entitled to receive payments under the Plan, then the Committee may cause
payments to be withheld until the matter is decided by a court of competent
jurisdiction.
1.3 "Board of Directors" means the Board of Directors of the Company.
1.4 "Code" means the Internal Revenue Code of 1986, as amended.
1.5 "Committee" means the committee designated to administer the Plan
as described in Section 2.
1.6 "Company" means Roto-Rooter Management Company or Roto-Rooter, Inc.
1.7 "Compensation" means, for purposes of this Plan, the amount of
compensation paid to an Employee during each calendar month computed in
accordance with the definition of "Compensation" as set forth in the Retirement
and Savings Plan.
1.8 "Deferred Compensation Benefit(s)" means the benefits described in
this Plan.
1.9 "Deferred Compensation Plan" or "Plan" means this Roto-Rooter
Deferred Compensation Plan No. 1, as amended from time to time.
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1.10 "Eligible Employee" means a management or highly compensated
Employee designated by the Board of Directors from time to time as eligible to
participate in the Plan. The Board of Directors may revoke this designation at
any time.
1.11 "Employee" means any person who is employed by the Employer.
1.12 "Employer" means the Company and any other entity which has
adopted this Plan with the authorization of the Company.
1.13 "Entry Date" means the first day of each calendar month.
1.14 "Participant" means each Eligible Employee who joins the Plan and
participates in the Plan.
1.15 "Permanent Disability" means an Employee's termination of service
with the Employer due to a physical or mental disability which permanently
disables the Employee from performing the customary duties of the Employee's
regular job with the Employer.
1.16 "Plan Year" means the twelve-month period beginning on January 1.
1.17 "Retirement" means (a) normal retirement from employment with the
Employer at age 65; (b) early retirement from employment with the Employer from
age 55 to 65 with no fewer than 10 years of Service; or (c) postponed retirement
from employment with the Employer after age 65.
1.18 "Retirement and Savings Plan" means the Roto-Rooter Retirement and
Savings Plan, as amended from time to time.
1.19 "Valuation Date" means the last business day of each month.
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SECTION 2. ADMINISTRATION
2.1 PLAN ADMINISTRATOR. The Plan shall be administered by a Committee
whose members are designated from time to time by the Company. The Committee
shall consist of no fewer than three individuals.
2.2 DUTIES OF PLAN ADMINISTRATOR. The Committee may establish such
rules and regulations, not inconsistent with the provisions of the Plan, as it
deems necessary for the proper administration of the Plan, and may amend or
revoke any rule or regulation so established. The Committee may make such
determinations and interpretations under or in connection with the Plan as it
deems necessary or advisable. Subject to the provisions of Section 8.5 of this
Plan, all such rules, regulations, determinations and interpretations shall be
binding and conclusive upon the Company, the Employer, their shareholders,
Employees, Participants, and upon their respective legal representatives,
beneficiaries, successors and assigns and upon all other persons claiming under
or through any of them.
2.3 METHOD OF ACTION. Any action required or permitted to be taken by
the Committee under this Plan may be taken in accordance with the applicable
provision(s) of the By-Laws of the Company.
SECTION 3. PARTICIPATION
3.1 GENERAL. Each Eligible Employee who becomes a Participant is
eligible to receive benefits under the Plan.
3.2 PARTICIPATION DATE. Each Employee who becomes an Eligible Employee
becomes a Participant on the Entry Date that coincides with or immediately
follows the date the Employee becomes an Eligible Employee.
SECTION 4. CONTRIBUTIONS
The Employer shall establish on its books of account a reserve fund
equal to the value of all Plan benefits currently accrued in favor of
Participants. The entire cost of this Plan shall be paid from the general assets
of the Employer. It is the intent of the Employer to so pay benefits under the
Plan as they become due; provided, however, that the Employer may, in its sole
discretion, establish or cause to be established a separate trust, pursuant to a
trust agreement, and a separate trust account for each Participant and direct
that some or all of a Participant's benefits under the Plan be paid from the
general assets of the Employer which are transferred to such trust and held in
such trust as property of the Employer subject to the claims of the Employer's
creditors until such time as benefit payments pursuant to the Plan are made from
such assets in accordance with such trust agreement. Until any such payment is
so made, neither the Plan nor any Participant or Beneficiary shall have any
preferred claim on, or any beneficial ownership interest in, such
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assets. No liability for the payment of benefits under the Plan shall be imposed
upon any officer, director, employee, or stockholder of the Employer or Company.
SECTION 5. PARTICIPANT ACCOUNTS; INVESTMENTS
5.1 PARTICIPANT ACCOUNTS. The Committee will establish a separate
Account for each Participant. Each Participant's Account will be credited with
the annual benefit amount described in Sections 6.1, 6.2 and/or 6.3. The
Committee may also establish such Sub-Accounts as may be necessary to reflect
specific investments which are elected by a Participant pursuant to Section 5.3.
5.2 STATEMENTS OF PARTICIPANTS' ACCOUNTS. The Committee shall cause to
be delivered or mailed to each Participant a statement setting forth the status
of the Participant's Account as of the end of the calendar quarter, or more
frequently as shall be determined by the Committee.
5.3 INVESTMENTS. In the event general assets of the Employer are
transferred to a separate trust account for a Participant as permitted under
Section 4, such Participant may make an investment election in the manner and
form prescribed by the Committee directing the manner in which amounts contained
in such separate trust account shall be invested; provided, however, that all
such elections shall be subject to the approval of the Employer and the Employer
has the right to restrict such investment to certain designated investment
funds. The portion of a Participant's trust account, if any, which is not
invested pursuant to the Participant's investment election hereunder shall be
invested in the trust in a manner to be determined by the Employer.
5.4 INVESTMENT EXPERIENCE. In addition to crediting each Participant' s
Account with the annual benefit amount described in Sections 6.1, 6.2 and/or
6.3, each such Account shall be adjusted as of each Valuation Date as follows:
(a) The portion, if any, of a Participant's Account which is
not contained in a separate trust account, shall be credited with interest at a
rate to be established by the Employer from time to time.
(b) The portion, if any, of a Participant's Account which is
contained in a separate trust account shall be credited or debited with the
investment earnings or investment losses, as the case may be, specifically
experienced by such Account.
SECTION 6. ANNUAL BENEFIT AMOUNTS
6.1 EXCESS BENEFITS.
(a) As of each Valuation Date, the Account of each Participant
described in subsection (b) shall be credited with an amount equal to the
difference between (i) Employer contributions allocated to the Participant's
accounts under the Retirement and Savings Plan as of the corresponding
allocation date(s) under the Retirement and Savings
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Plan, and (ii) the amount that would have been allocated under the Retirement
and Savings Plan without regard to (1) the annual contribution limitations as
set forth in Section 415 of the Code and (2) the limitations on compensation as
set forth in Section 401(a)(17) of the Code.
(b) A Participant is eligible to receive the allocations
described in subsection (a) if (i) the Participant is otherwise eligible to
receive an allocation of an Employer contribution under the Retirement and
Savings Plan as of the applicable allocation date(s) under the Retirement and
Savings Plan and this Plan and (ii) the Participant's designation as an Eligible
Employee under Section 1.10 is in effect as of the applicable allocation date(s)
hereunder.
6.2 DEFERRED COMPENSATION BENEFITS.
(a) As of the last day of each month, there will be credited
to the Account of each Participant described in subsection (b) an amount equal
to 6% of the Participant's Compensation, plus 5% of the Participant's
Compensation in excess of the maximum wage base under the Social Security Act
(determined as of the first day of the Plan Year).
(b) The amount described in subsection (a) will be credited to
the Accounts of Participants who are Participants on the last day of the month
or who lost their status as a Participant before the last day of the month
because of death, Permanent Disability or Retirement.
(c) As of August 7, 1995, and each subsequent July 1, there
shall be credited to the Account of each Participant listed in Exhibit A
attached hereto the amount of $7,000, such amount to be increased at a rate of
five percent (5%) per annum. Such contribution shall cease as of the July 1 next
following the Participant's termination of employment with the Employer.
6.3 ELECTIVE AND MATCHING BENEFITS.
(a) Each Participant who is a participant in the Retirement
and Savings Plan shall be entitled to make a salary reduction election as
described below. As of each Valuation Date, there will be credited to the
Account of each such Participant the amount elected by the Participant pursuant
to a salary reduction agreement executed by the Participant.
(b) The election under subsection (a) shall be made before the
beginning of each Plan Year. Such salary reduction contributions shall commence
with the first payment of Compensation made after the date on which such salary
reduction election is effective.
(c) As of each Valuation Date, the Account of each Participant
who makes the election under subsection (a) shall be credited with an amount
equal to the contribution
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which would have been allocated as a matching contribution to the account of
such Participant under the Retirement and Savings Plan (without regard to the
limitations under Code Section 401(m)) had the Participant's salary reduction
amount under subsection (a) been contributed to the Retirement and Savings Plan.
(d) As soon as practicable after the end of each Plan Year,
but not later than January 31 of the next ensuing year, the Employer shall
determine the maximum amount of salary reduction contributions which could have
been made by such Participant for such Plan Year under the Retirement and
Savings Plan consistent with the limitations under Code Sections 402(g) and
401(k)(3). The lesser of (i) such maximum amount or (ii) the amount of the
salary reduction contribution made by such Participant for such Plan Year under
subsection (a) shall be distributed to such Participant by no later than March
15 of such next ensuing year, unless such Participant makes the election
pursuant to subsection (e).
(e) As part of the election under subsection (a), a
Participant may also elect to have the amount described in subsection (d)
contributed to the Retirement and Savings Plan in which case the Employer shall
cause such amount (exclusive of any earnings thereon) to be contributed directly
to the Retirement and Savings Plan. In addition, the Employer's matching
contribution made pursuant to subsection (c) (exclusive of any earnings thereon)
attributable to the amount of salary reduction contributions contributed
directly to the Retirement and Savings Plan under subsection (d) shall be
contributed directly to the Retirement and Savings Plan, subject to the
limitations under Code Section 401(m).
(f) Notwithstanding any provision herein to the contrary, a
Participant shall not be eligible to make a salary reduction contribution
hereunder for any Plan Year unless such Participant has first elected to make
the maximum salary reduction contribution equal to 5% of Compensation under the
Retirement and Savings Plan for such Plan Year.
(g) For the Plan Year ending December 31, 1995, the Account of
each Participant shall be credited with the discretionary matching contribution
which would have been made on behalf of such Participant under the Retirement
and Savings Plan, but which the Participant has elected to be contributed to
this Plan.
6.4 VESTING.
(a) A Participant shall at all times have a fully vested
interest in amounts credited to his Account which are attributable to salary
reduction contributions made by such Participant pursuant to Section 6.3(a). In
addition, a Participant will have a fully vested interest in all amounts
credited to his Account hereunder upon Retirement, severance while eligible for
Retirement, Permanent Disability or upon death prior to Retirement or Permanent
Disability.
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(b) Except as provided in subsection (a), a Participant shall
have a vested interest in amounts credited to the Participant's Account
hereunder equal to the Participant's vested percentage of the Participant's
Employer Contributions Account under the Retirement and Savings Plan.
(c) All amounts forfeited hereunder shall revert to the credit
of the Employer. A Participant shall be credited with a year of service for
vesting purposes for each Plan Year during which he completes at least 1,000
hours of service with the Employer.
SECTION 7. DISTRIBUTION OF BENEFITS
7.1 TIME OF PAYMENT.
(a) The Participant shall elect the date on which the payment
of the vested portion of the Deferred Compensation Benefits shall commence
("Payment Date"). The vested portion of the Deferred Compensation Benefits shall
be valued and paid to the Participant or his Beneficiary commencing as of the
Valuation Date coinciding with or next following the Payment Date. The Payment
Date shall not be subject to modification unless one of the following events
occurs:
(1) The Participant makes an election to change the
Payment Date which is then in effect ("Modified Payment Date") provided that any
such subsequent election must occur (i) no earlier than 1 year after the date on
which the election then in effect was made and (ii) no less than 2 years prior
to the Payment Date then in effect.
(2) The Committee, in its sole and absolute
discretion, consents to the Participant's election of a Modified Payment Date.
(3) Section 7.3 applies.
(4) The Participant elects a Modified Payment Date
and the election does not satisfy (1), (2) or (3) above. In such event, the
Participant's Account shall be reduced by an amount equal to 10% of the value of
the Account as of the Valuation Date coincident with or next following the
Modified Payment Date.
(b) In no event shall the Payment Date or Modified Payment
Date be later than the date on which the Participant attains age 70.
(c) All elections available to the Participant hereunder shall
also be available to the Participant's Beneficiary upon the Participant's death.
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7.2 FORM OF PAYMENTS.
(a) The vested portion of the Deferred Compensation Benefits
will be paid to the Participant or his Beneficiary according to one of the
following methods, as elected by the Participant on or before the effective date
of the Participant's participation in the Plan ("Form of Payment Election"):
(1) A single lump sum payment.
(2) Annual installments over a period not to exceed
the life expectancy of the Participant as of the Payment Date or Modified
Payment Date, whichever is applicable. The amount of each installment shall be
determined by dividing the Participant's Account balance as of the Valuation
Date immediately preceding the applicable installment payment date by the
remaining number of installment payments. Installment payments will be adjusted
for the Account's share of earnings or losses described in Section 5.4. If a
Participant dies before receiving all of the installment payments, then his
Beneficiary will receive the remaining installments.
(b) The Participant's Form of Payment Election shall not be
subject to modification unless one of the following events occurs:
(1) The Participant makes an election to change the
Form of Election Payment which is then in effect provided that any such
subsequent election must occur (i) no earlier than 1 year after the date on
which the election then in effect was made and (ii) no less than 2 years prior
to the Payment Date then in effect.
(2) The Committee, in its sole and absolute
discretion, consents to the Participant's election to change the Form of
Election Payment.
(3) Section 7.3 applies.
(4) The Participant elects to change the Form of
Election Payment and the election does not satisfy (1), (2) or (3) above. In
such event, the Participant's Account shall be reduced by an amount equal to 10%
of the value of the Account as of the Valuation Date coincident with or next
following the Payment Date or Modified Payment Date, whichever is applicable.
(c) All elections available to the Participant hereunder shall
also be available to the Participant's Beneficiary upon the Participant's death.
7.3 WITHDRAWALS IN THE CASE OF UNFORESEEABLE EMERGENCIES.
Notwithstanding the preceding, a Participant may, during his employment with the
Employer, apply in the form and manner determined by the Committee to withdraw
any portion of his vested Account by reason of an unforeseeable emergency. An
unforeseeable emergency is a severe financial hardship to the Participant
resulting from a sudden and unexpected illness or accident of the Participant or
of a dependent (as defined in Code Section 152(a)) of the
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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. Withdrawals hereunder shall not be
made to the extent that such hardship is or may be relieved through
reimbursement or compensation by insurance or otherwise, by liquidation of the
Participant's assets, to the extent the liquidation of such assets would not
itself cause severe financial hardship, or by cessation of deferrals under the
Plan. Withdrawals of amounts because of an unforeseeable emergency must only be
permitted to the extent reasonably needed to satisfy the emergency need.
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SECTION 8. GENERAL PROVISIONS
8.1 Nothing in the Plan shall confer upon any Employee any right to
continue in the employ of the Employer, or shall affect the right of the
Employer to terminate the employment of any Employee with or without cause.
8.2 The Employer may make such provisions as it may deem appropriate
for the withholding of any taxes which the Employer determines it is required to
withhold in connection with any Deferred Compensation Benefit.
8.3 Nothing in the Plan is intended to be a substitute for, or shall
preclude or limit the establishment or continuation of, any other plan, practice
or arrangement for the payment of compensation or fringe benefits to Employees
generally, or to any class or group of Employees, which the Employer now has or
may hereafter lawfully put into effect, including, without limitation, any
retirement, pension, thrift, group insurance, stock purchase, stock bonus or
stock option plan.
8.4 The Plan may be amended or terminated by the Board of Directors at
any time in whole or in part; provided, however, that no such amendment or
termination shall adversely affect any Participant Account hereunder. Upon
termination of the Plan, each Participant will be entitled to a Deferred
Compensation Benefit equal to the Deferred Compensation Benefit to which the
Participant would be entitled had he been eligible for and retired on the date
the Plan terminated. Participants and Beneficiaries who, as of the date of Plan
termination, are otherwise entitled to receive Deferred Compensation Benefits
but have not yet received them will be entitled to receive those Deferred
Compensation Benefits. The Deferred Compensation Benefits described in this
Section will be paid at the time the Participant or Beneficiary would have been
entitled to receive them if the Plan had not terminated; provided, however, that
the Employer may accelerate the payment of all but not less than all of the
Deferred Compensation Benefits under the Plan, the payment of which would
otherwise be deferred.
8.5 The Employer shall have all the powers and authorities as may be
necessary to carry out the provisions of the Plan, including the power and
authority to interpret and construe the provisions of the Plan, to make benefit
determinations and to resolve any disputes which arise under the Plan. Whenever
there is denied, whether in whole or in part, a claim for benefits under the
Plan filed by any person (herein referred to as the "Claimant"), the Committee
shall transmit a written notice of such decision to the Claimant, which notice
shall be written in a manner calculated to be understood by the Claimant and
shall contain a statement of the specific reasons for the denial of the claim
and a statement advising the Claimant that, within 60 days of the date on which
he receives such notice, he may obtain review of such decision in accordance
with the procedures hereinafter set forth. Within such 60-day period, the
Claimant or his authorized representative may request that the claim denial be
reviewed by the Board of Directors by filing with the Committee a written
request therefor, which request shall contain the following information:
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(a) the date on which the Claimant's request was filed with
the Committee; provided, however, that the date on which the Claimant's request
for review was in fact filed with the Committee shall control in the event that
the date of the actual filing is later than the date stated by the Claimant
pursuant to this paragraph;
(b) the specific portions of the denial of his claim which the
Claimant requests the Board of Directors to review;
(c) a statement by the Claimant setting forth the basis upon
which he believes the Board of Directors should reverse the previous denial of
his claim for benefits and accept his claim as made; and
(d) any written material (offered as exhibits) which the
Claimant desires the Board of Directors to examine in its consideration of his
position as stated pursuant to (c) above.
Within 60 days of the date determined pursuant to (a) above, the Company shall
conduct a full and fair review of the decision denying the Claimant's claim for
benefits. Within 60 days of the date of such hearing, the Company shall render
its written decision on review, written in a manner calculated to be understood
by the Claimant, specifying the reasons and Plan provisions upon which its
decision was based.
8.6 No Participant or Beneficiary shall encumber or dispose of his
right to receive any Deferred Compensation Benefits.
8.7 The obligation of the Employer to pay Deferred Compensation
Benefits merely constitutes the unsecured promise of the Employer to make
payments when due. No Participant or Beneficiary has any security interest in,
or a lien or prior claim upon, any Account or assets of the Employer. No Plan
provisions shall be construed so as to place any Account or other asset in trust
with the Employer for the benefit of a Participant, his Beneficiary, or his
estate.
8.8 The provisions of the Plan shall not be construed as giving any
person, firm or corporation any legal or equitable right as against the
Employer, its officers, employees, or directors, except any rights specifically
provided for in the Plan or created in accordance with the terms of the Plan.
8.9 Any Participant, regardless of age, whose employment with the
Employer is terminated for theft or embezzlement of Employer assets or for
accepting bribes from suppliers, or who resigns during the pendency or carrying
out of an investigation which establishes such conduct, shall forfeit all of his
Plan benefits.
8.10 The invalidity or unenforceability of any particular provision of
the Plan shall not affect any other Plan provision. The Plan shall be construed
in all respects as if the invalid or unenforceable provision were omitted.
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8.11 Masculine pronouns and similar words shall be read as the feminine
gender where appropriate. The singular form of words shall be read as plural
where appropriate.
8.12 The Plan shall be governed and construed in accordance with the
laws of the State of Ohio.
8.13 The Employer, in its sole discretion, may direct that the Account
of a Participant be directly transferred to any other non-qualified deferred
compensation plan and/or trust maintained by the Company or any Employer. The
Employer, in its sole discretion, may also accept the direct transfer from
another non-qualified deferred compensation plan and/or trust maintained by the
Company or any Employer of any cash or other assets held in such plan and/or
trust for the benefit of an Employee. In the event of the acceptance of any such
direct transfer, such cash and/or other assets shall be held in an Account for
the benefit of such Employee.
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EXHIBIT A
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ROTO-ROOTER
DEFERRED COMPENSATION PLAN NO. 1
AMENDMENT NO. 1
The Roto-Rooter Deferred Compensation Plan No. 1 (the "Plan") is hereby
amended effective January 1, 1998 as follows:
1. Section 1 shall be amended by adding the following definitions:
"Chemed Corporation Excess Benefit Plan" means the
Chemed Corporation Excess Benefit Plan, as amended
from time to time.
"ESOP I" means the Chemed Employee Stock Ownership
Plan I, as amended from time to time.
"ESOP II" means the Chemed Employee Stock Ownership
Plan II, as amended from time to time.
2. Section 6.1 shall be rewritten in its entirety as follows:
6.1 EXCESS BENEFITS
(a) As of each Valuation Date, the Account of each
Participant described in subsection (b) shall be credited with
an amount equal to the difference between (i) Employer
contributions allocated to the Participant's accounts under
the Retirement and Savings Plan, ESOP I and ESOP II as of the
corresponding allocation date(s) under each such plan, and
(ii) the amount that would have been allocated under the
Retirement and Savings Plan, ESOP I and ESOP II, without
regard to the annual limitations as set forth in Section 415
of the Code; provided, however, that all or any portion of
such amount may instead be credited to the Participant under
the Chemed Corporation Excess Benefit Plan, as determined in
the sole discretion of the Company.
(b) A Participant is eligible to receive credit for
the amount described in subsection (a) if (i) the Participant
is otherwise eligible to receive an allocation of an Employer
contribution under the Retirement and Savings Plan, ESOP I and
ESOP II as of the applicable allocation date(s) under each
such plan and this Plan and (ii) the Participant's designation
as an Eligible Employee under Section 1.11 is in effect as of
the applicable allocation date(s) hereunder.
3. In all respects, the Plan shall remain in full force and effect.
CERTIFICATE
The undersigned, Secretary of Roto-Rooter, Inc., hereby certifies that
the foregoing is a true and correct copy of Amendment No. 1 to the Roto-Rooter
Deferred Compensation Plan No. 1.
Signed in Cincinnati, Ohio as of this ______ day of ___________________, 1998.
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Naomi Dallob, Secretary