This excerpt taken from the OSK 10-K filed Nov 22, 2005.
ARTICLE II. ELIGIBILITY AND PARTICIPATION
Section 2.1. Eligibility. Directors and executive officers elected by the Board are automatically eligible to participate. The Administrator may designate other key executive employees as being eligible to participate, in the Administrators discretion. Key executive employee means, for this purpose, a person who is a member of a select group of management or highly compensated employees of the Company or its affiliates. The Plan is intended to be a top-hat deferred compensation plan, exempt from the eligibility, vesting, and funding requirements of the Employee Retirement Income Security Act of 1974, as amended.
Section 2.2. Participation.
(a) Eligible persons must complete a written agreement in order to participate. This Agreement is called Deferred Compensation Agreement. Deferred Compensation Agreements must be completed and filed with the Administrator before the beginning of the Plan Year for which they are initially effective, or by March 31, 2002, if later, except Deferred Compensation Agreements completed by newly-eligible persons within thirty (30) days of becoming eligible for the first time under the Plan may be effective immediately, but only as to compensation or Retainer Fees earned after the date the Agreement is completed and filed with the Administrator. Notwithstanding these general rules, however, no Deferred Compensation Agreement shall be effective with regard to bonus compensation for services and performance during a Plan Year unless such Deferred Compensation Agreement has been completed and filed with the Administrator before March 31 of the Plan Year to which the services and performance relate or, if later, within thirty (30) days of becoming eligible for bonus consideration.
(b) A person who ceases to be eligible for Plan participation, but remains employed, cannot elect any new deferrals under the Plan. Deferred Compensation Agreements in effect at the time eligibility for Plan participation ceases may remain in effect in accordance with their terms and the rules of the Plan through the end of the Plan Year in which eligibility to participate ended.
(c) The Administrator makes all final decisions regarding eligibility and compliance with the participation requirements.
Section 2.3. Deferred Compensation Agreements.
(a) Deferred Compensation Agreements of Directors must designate the amount of Retainer Fees that is to be deferred in accordance with Administrator rules and procedures, using forms that may be supplied by the Administrator for this purpose. Deferred Compensation Agreements of persons other than Directors must designate the amount of compensation that is to be deferred and indicate whether the deferred amount is to be deducted from salary or bonus, or from both. Salary, for this purpose, refers to base pay before reduction for deferred compensation amounts but exclusive of bonus or incentive compensation, special fees or awards, allowances or amounts designated by the Company as payments toward or for reimbursement of expenses. Bonuses, for this purpose, mean the annual incentive compensation payable in a Plan Year for services and performance during the preceding Plan Year.
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(b) Each Deferred Compensation Agreement shall also specify the initial Plan Year during which the compensation deferral is to take place and the portion of the deferred compensation amount that is to be directed to the Investment Program and the Share Program. Deferred Compensation Agreements shall remain in effect from Plan Year to Plan Year, subject to the right of the Participant to make changes in the Participants Agreement that are prospectively effective as of the first day of the Plan Year commencing after the date the change is completed in accordance with Administrator rules.
(c) The maximum aggregate deferral under each Deferred Compensation Agreement shall not exceed the following limits: Retainer Fees100%; salary25%; bonus100%. The minimum aggregate deferral amount that may be permitted to be elected for a Plan Year shall not be less than five thousand dollars ($5,000). The Administrator may, however, adjust these maximum and minimum limits on a prospective basis in a uniform manner applied to all similarly situated Participants.
(d) The Company, in the case of Directors, and otherwise the Participants employer, will make the corresponding reductions in Retainer Fees or compensation and the Company will credit such amount to the Participants Deferred Benefit Account, making appropriate records to distinguish amounts held under the Investment Program and the Share Program.
Section 2.4. Modifications Due to Hardship. A Participants deferral election for a Plan Year is irrevocable during the Plan Year except for substantial financial need of a Participant due to serious and unanticipated family health, education, or housing needs (hardship). The Administrator, in the Administrators discretion, upon demonstration of hardship, may permit prospective reduction of the Participants compensation deferral election for a Plan Year. A request for reduction in the deferral amount due to hardship must be submitted in writing, with evidence of hardship, to the Administrator. If the Administrator approves the request for change, then it will be prospectively effective only.
Section 2.5. Beneficiary Designations. Each Participant shall complete a designation of beneficiary when initially completing a Deferred Compensation Agreement. The beneficiary designation may subsequently be revised by the Participant. The designated beneficiary of a Participant may include multiple beneficiaries. If the beneficiary dies before receiving all payments due such beneficiary, then any remaining payments will be made to the designated beneficiarys estate unless a contingent beneficiary was designated by the Participant as to such amounts. If there is a contingent beneficiary, then payments will be made to the contingent beneficiary and, if such contingent beneficiary dies, any remaining payments will be made to the contingent beneficiarys estate. If there is no beneficiary designation in force when Plan benefits become payable upon the death of a Participant, payment shall be made to the Participants spouse, or if no spouse is then living, to the Participants estate, as the Participants deemed beneficiary. All beneficiary designations must be made in writing and acknowledged by the Administrator.
Section 2.6. Effect of Change in Control. Upon the occurrence of a Change in Control:
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(a) All deferrals under the Plan of Retainer Fees and compensation shall cease. Amounts that would otherwise be deferred will, instead, be paid to Participants currently as Retainer Fees or compensation.
(b) The Accounts of all Participants (whether employed or terminated, including any whose Accounts are in pay status) shall be paid out in a single lump sum cash payment to all such Participants within ten (10) business days after the Change in Control.
(c) Notwithstanding other Plan provisions regarding the timing of Account valuations, upon the occurrence of a Change in Control, Investment Program subaccounts shall be updated to the date of payment for earnings and Share Program subaccounts shall be valued using the higher of the value of Oshkosh Stock determined on the date of the Change in Control or the highest price per share of Oshkosh Stock paid in the transaction giving rise to the Change in Control. If payment is delayed beyond the payment deadline described in (b) above, for any reason, the balance to be paid out shall become fixed as of such scheduled payment date, except that such amount shall be increased in an amount equivalent to interest on such fixed amount, to the date of actual payment, at a rate equal to two times the Plan Interest Rate.
Section 2.7. Cancellations of Deferred Compensation Agreements. Notwithstanding any other provision of the Plan, a Participant is hereby granted the right to elect to terminate participation in the Plan or cancel an outstanding Deferred Compensation Agreement with regard to amounts subject to Internal Revenue Code Section 409A. This authority is granted pursuant to IRS Notice 2005-1, Q&A-20. An election pursuant to this Section must be delivered in writing to the Administrator by December 31, 2005, in order to be given effect. Any election made pursuant to this Section shall be deemed to be effective as of January 1, 2005. The amount subject to the termination or cancellation election shall be reported by the Company as compensation of the Participant in calendar year 2005.
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