THOR INDUSTRIES, INC.
SELECT EXECUTIVE INCENTIVE PLAN
EFFECTIVE SEPTEMBER 29, 1997
Thor Industries, Inc.
419 West Pike Street
Jackson Center, Ohio 45334
SECTION 1. PURPOSE.
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1.1. THOR Industries, Inc., a Delaware corporation, (the "Company"),
hereby establishes this THOR Industries, Inc. Select Executive Incentive Plan
(the "Plan") for the purpose of providing its eligible executives with
supplemental deferred compensation in addition to the current compensation
earned under the Company's Management Incentive Plan ("MIP"). It is intended
that the Plan shall constitute an unfunded deferred compensation arrangement for
the benefit of a select group of management or highly compensated employees of
the Company and its designated subsidiaries and affiliates for purposes of the
federal income tax laws and the Employee Retirement Income Security Act of 1974
("ERISA") and all documents, agreements or instruments made or given pursuant to
the Plan shall be interpreted so as to effect such intent.
SECTION 2. ELIGIBILITY.
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2.1. ELIGIBLE EXECUTIVES. Each employee of the Company or member of the
board of directors, who is designated by the Compensation Committee of the board
of directors of the Company (the "Compensation Committee") as an eligible
executive (the "Eligible Executive") shall participate in the Plan effective as
of the later of the following:
(a) The date determined by the Compensation Committee.
(b) The date the Eligible Executive is formally notified that the
Eligible Executive is a participant.
2.2. DESIGNATED SUBSIDIARIES AND AFFILIATES. For purposes of this Plan,
the term "Company" shall include any subsidiary or affiliate of the Company
which is designated by the Compensation Committee as an employer whose
executives will be eligible to participate in this Plan.
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SECTION 3. DEFERRED COMPENSATION AMOUNTS.
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3.1. DEFERRED COMPENSATION CREDITS. For each Plan year of
participation, an Eligible Executive employed by the Company shall be credited
with the amount(s), if any, determined by the Compensation Committee. The amount
to be credited to any Eligible Executive shall be determined in the sole
discretion of the Compensation Committee, and may be $0 for any Plan year.
3.2. TIMING OF DEFERRED COMPENSATION CREDITS. The Company may, in its
sole discretion, determine the date or dates that the deferred compensation
amounts shall be credited to the Eligible Executives' accounts.
3.3. MID-YEAR PARTICIPATION. If an Eligible Executive becomes a
participant during the year, the Company may, in its sole discretion, credit
pro-rata amounts to the Eligible Executive.
SECTION 4. CREDITING OF DEFERRED COMPENSATION.
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4.1. ACCOUNT FOR PARTICIPANT. All amounts determined pursuant to
Section 3 shall be credited to an account for such Eligible Executive. Such
accounts shall also be credited with earnings and losses in accordance with
Section 5. The amount to be paid to an Eligible Executive from the Plan in
accordance with Section 7 shall be based on an amount equal to the Vested
Balance of the Eligible Executive's account, as determined under Section 6, at
the time of payment.
SECTION 5. INVESTMENT CREDIT.
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5.1. CREDIT BASED ON INDEX FUNDS. Subject to Section 5.2, any Company
contributions pursuant to Section 4.1, shall be credited with earnings as if the
amounts were invested in specific investment funds selected by the
Administrative Committee (index funds). The Administrative Committee, in its
sole discretion, may establish a procedure allowing any Eligible Executive to
request that earnings be credited for his or her account with respect to the
results of one or more of the index funds selected by the Administrative
Committee, and the basis upon which such earnings credits shall be determined.
The procedure may specify the frequency with which Eligible Executives may
change their investment index requests. If the Eligible Executive fails to
request one or more of the index funds, a default index fund, as selected by the
Administrative Committee, will provide the earnings credits.
5.2. COMPANY DISCRETION TO FOLLOW INSTRUCTIONS. The Administrative
Committee shall not be obligated to comply
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with, nor be liable for any failure to comply with, the investment request of
any Eligible Executive. The Administrative Committee shall have sole discretion
whether or not to credit earnings with regard to the results of one or more of
the index funds to the account of any Eligible Executive in the manner requested
by the Eligible Executive under this Section 5.
5.3. INFORMAL FUNDING. The Company may informally fund its obligations
under the Plan in any manner that it chooses and shall not be required to invest
any amounts in any particular investment, including any index fund. The Company
may, without limitation, purchase life insurance or any security or other
property to fund its obligations under the Plan.
SECTION 6. VESTING OF ACCOUNT BALANCE.
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6.1. VESTED BALANCE. The amount payable to the Eligible Executive at
any time shall be equal to the vested portion of the Eligible Executives account
(the "Vested Balance"). The Vested Balance at any time shall be equal to the
Eligible Executive's account balance multiplied by the Vesting Percentage
determined under Section 6.2 and further reduced by the non-competition
forfeiture determined under Section 6.3, if any.
6.2. VESTING PERCENTAGES. The Eligible Executive's account balance
shall be vested based upon the Eligible Executive's plan years of participation,
as follows:
COMPLETED PLAN YEARS VESTING PERCENTAGE
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Less than six 0%
Six or more 100%
Provided that the Vesting Percentage shall be 100% for any participant
who attains age 65 or dies.
6.3. NON-COMPETE AND FORFEITURE.
(a) NON-COMPETE, NON-SOLICITATION AND NON-DISCLOSURE FORFEITURE. If,
during the Eligible Executive's participation in this Plan, and for a period of
eighteen (18) months after termination of employment with the Company for any
reason, the Eligible Executive competes with the Company (as defined in Section
6.3(b)), or violates the non-solicitation or non-disclosure provisions of 6.3(b)
hereof, the Eligible Executive shall forfeit one-hundred percent (100%) of his
or her Vested Balance under the Plan.
(b) NON-COMPETITION DEFINITION. For purposes of this Plan, the Eligible
Executive shall be deemed to have competed with the Company if, in the sole
discretion of the Compensation Committee, the Eligible Executive, within the
United States or Canada, directly or indirectly, (1) owns (as a proprietor,
partner, shareholder, or
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otherwise) an interest in, or (2) participates (as an officer, director, or in
any other capacity) in the management, operation, or control of, or (3) performs
services as or acts in the capacity of an employee, independent contractor,
consultant, or agent of, any enterprise engaged, directly or indirectly, in the
business of production and/or marketing recreation vehicles and buses by the
Company except with prior written consent of the Company. The Eligible Executive
will not, directly or indirectly, employ or solicit the employment by any
employee of the Company who was such an employee at the time of termination of
the Eligible Executive's employment hereunder or within six (6) months prior
thereto, nor will the Eligible Executive disclose to any third party any
confidential matter not readily available to the public.
(c) ADDITIONAL FORFEITURE PROVISIONS. The Eligible Executive may, in
the sole discretion of the Compensation Committee, forfeit his or her entire
Vested Balance under the Plan if convicted or plead guilty in a court involving
a felony or misdemeanor relating to the Company or its business or which
negatively affects the Company's reputation. In addition, the Compensation
Committee may cause the forfeiture of the Vested Balance if it is determined by
a court that the Eligible Executive has breached his or her fiduciary duty to
the Company.
SECTION 7. PAYMENT OF DEFERRED COMPENSATION.
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7.1. PAYOUT ELECTION. At the time an Eligible Executive first
participates in the Plan, such participant shall file a Payout Election Form
designating the form in which payment of benefits shall be made following
termination of employment. Such election shall apply to the Eligible Executive's
entire Vested Balance. Payment shall be made in a lump sum unless the
participant requests one of the following forms, as specified in the Payout
Election Form:
(a) Substantially equal annual installments for five years.
(b) Substantially equal annual installments for ten years.
(c) Any other actuarially equivalent form of payment that the
Administrative Committee may approve.
7.2. CHANGE IN FORM OF PAYMENT. An Eligible Executive may change the
form of payment specified in the Payout Election Form by submitting to the
Administrative Committee an amended Payout Election Form that adequately
identifies the Payout Election Form that is to be changed and specifies the form
of payment, as amended. To be effective, the amended Payout Election Form must
be received by the Administrative Committee at least twelve (12) months before
the date of termination of employment. Payment dates may not be changed.
7.3. PAYMENT TO EXECUTIVE. Except as provided in Sections 6.3(c), 7.4,
7.6 and 8, the Vested Balance of an Eligible Executive's account under the Plan
shall be paid after
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the end of the eighteenth (18th) complete calendar month following the Eligible
Executive's termination of employment with the Company.
7.4. HARDSHIP WITHDRAWALS. The Administrative Committee may, in its
sole discretion, allow an Eligible Executive to be paid an amount equal to all
or any portion of the Eligible Executive's Vested Balance in the event of an
unforeseen emergency caused by an event beyond the control of the Eligible
Executive that would result in severe financial hardship to the Eligible
Executive, such as the following:
(a) Illness or accident of the Eligible Executive or a
dependent under Internal Revenue Code section 152(a).
(b) Loss of the Eligible Executive's property due to casualty.
(c) Other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Eligible Executive.
The payment will be limited to the amount necessary to meet such
unforeseen emergency. Financial hardship and the amount necessary to meet the
emergency will take into consideration all available assets of the Eligible
Executive, including but not limited to, assets that can be liquidated,
available credit, insurance and other reimbursements, and termination of
deferral of compensation to the extent allowable. Payments to the Eligible
Executive under this Section 7.4 shall reduce the Eligible Executive's account
balance under the Plan.
7.5. DISABILITY. An Eligible Executive who becomes temporarily disabled
while employed or becomes eligible to receive long-term disability benefits
under a plan maintained by the Company shall be treated as employed, and no
payments will be made under this Plan under elections to receive benefits at
termination of employment. If disability benefits stop and disability continues
the Eligible Executive shall be treated as terminated.
7.6. DEFERMENT IN CASE OF NON-DEDUCTIBILITY. To the extent that the
payment of all or a portion of an Eligible Executive's account would not be
deductible by the Company for federal income tax purposes, the Company may defer
payment of all or a portion of the account to the earliest one or more
subsequent calendar years in which the payment of such amounts would be
deductible by the Company. Deductibility shall not be determined by whether or
not the Company would receive any benefit from the deduction.
7.7. INCAPACITY. If the Administrative Committee finds that any person
to whom any amount is payable hereunder is unable to care for his or her affairs
because of illness or accident, then the Administrative Committee, if it so
elects, may direct that any payment due him or her (unless a prior claim
therefore has been made by a duly appointed legal representative) or any part
thereof, be paid or applied for the benefit of
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such person (or such person's spouse, children or other dependents), to an
institution maintaining or having custody of such person, or any other person
deemed by the Administrative Committee to be a proper recipient on behalf of
such person otherwise entitled to payment, or any of them, in such manner and
proportion as the Administrative Committee may deem proper. Any such payment
shall be in complete discharge of the Company's obligations under this Plan.
7.8 TERMINATION OF DIRECTORS. For Eligible Executives who participate
in the Plan as directors instead of as employees, references to termination of
employment shall mean termination as a director.
SECTION 8. PAYMENT TO BENEFICIARY OR REPRESENTATIVE.
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8.1. If the Eligible Executive dies before receiving all of his or her
Vested Balance, the Company shall pay the remaining balance to the beneficiary
most recently designated by the Eligible Executive (or, if no such beneficiary
shall survive the Eligible Executive or if no beneficiary has been designated,
to the beneficiary designated by the Eligible Executive under the Company's
group term life insurance plan, or if no such beneficiary has been designated
under the group term life insurance plan, to the Eligible Executive's estate)
either by payment of one lump sum or by continuing the schedule of payments in
effect at death, as the Administrative Committee in its sole discretion shall
determine. The provisions of 7.6 shall apply.
SECTION 9. ADMINISTRATION.
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9.1. ADMINISTRATION OF THE PLAN. The Plan shall be administered by an
Administrative Committee (the "Administrative Committee") which shall be
appointed by the Compensation Committee. The Administrative Committee shall have
full power, discretion and authority to interpret, construe and administer this
Plan and any part hereof, and the Administrative Committee's interpretation and
construction thereof, and actions hereunder, shall be binding and conclusive on
all persons for all purposes. The Administrative Committee may employ legal
counsel, consultants, actuaries and agents as it may deem desirable in the
administration of the Plan and may rely on the opinion of such counsel or the
computations of such consultant or other agent. The Administrative Committee
shall provide for the keeping of written minutes of its actions hereunder.
9.2. PARTICIPANT STATEMENTS. The Administrative Committee shall provide
to each Eligible Executive, at least annually, a statement setting forth the
balance to the credit of the account of such Eligible Executive. Such statement
shall be provided no later than 60 days following the end of each Plan year.
9.3. PLAN YEAR. This Plan shall be administered on an annual basis. The
Plan year shall begin August 1 and end July 31 of the subsequent calendar year.
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SECTION 10. CLAIMS PROCEDURE.
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10.1. REQUEST. Any person claiming a benefit under the Plan, requesting
an interpretation or ruling under the Plan, or requesting information under the
Plan shall present the request in writing to the Administrative Committee. The
Chair of the Administrative Committee shall respond in writing as soon as
practicable.
10.2. DENIAL. If the claim or request is denied, the written notice of
denial shall state:
(a) The reasons for denial, with specific reference to the
Plan provisions on which the denial is based.
(b) A description of any additional material or information
required and an explanation of why it is necessary.
(c) An explanation of the Plan's claim review procedure.
The initial notice of denial shall normally be given within 90 days
after receipt of the claim. If special circumstances require an extension of
time, the claimant shall be so notified and the time limit shall be 180 days.
10.3. REVIEW OF DECISION. Any person whose claim or request is denied
or who has not received a response within 30 days may request review by notice
in writing to the full Administrative Committee. The original decision shall be
reviewed by the Administrative Committee. The Administrative Committee may, but
shall not be required to, grant the claimant a hearing. On review, whether or
not there is a hearing, the claimant may have representation, examine pertinent
documents and submit issues and comments in writing. The decision on review
ordinarily shall be made within 60 days. If an extension of time is required for
a hearing or other special circumstances, the claimant shall be so notified and
the time limit shall be 120 days. The decision shall be in writing and shall
state the reasons and the relevant Plan provisions. All decisions on review
shall be final and bind all parties concerned.
SECTION 11. TRUST; UNSECURED GENERAL CREDITOR.
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11.1. TRUST. The Company may establish a trust with a financial
institution for payment of benefits under this Plan. The trust shall be a
grantor trust for tax purposes. The trust shall provide that any assets
contributed to the trustee shall be used exclusively for payment of benefits
under this Plan except in the event the Company becomes insolvent. In the event
of insolvency, the trust fund shall be available for payment of obligations of
the Company to its creditors.
11.2. PAYMENT OTHER THAN FROM TRUST. Except as provided in Section
11.1, any amounts payable under this Plan shall be paid in cash from the general
funds of the Company. The Eligible Executive and any beneficiary shall have no
right, title or interest
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whatever in or to any investment which the Company may make to aid it in meeting
its obligation hereunder or to any assets of the Company. Nothing contained in
this Plan, and no action taken pursuant to the Plan provisions, shall create or
be construed to create a fiduciary relationship between the Company and the
Eligible Executive or a beneficiary.
11.3. UNSECURED CREDITOR. To the extent that any person acquires a
right to receive payments from the Company hereunder such right shall be no
greater than the right of an unsecured creditor of the Company. Rights to
benefit payments under the Plan are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment or
garnishment by creditors of the Eligible Executive or of the Eligible
Executive's beneficiaries. It is the intention of the Company that the Plan be
unfunded for tax purposes and for purposes of Title I of ERISA.
SECTION 12. WITHHOLDING.
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12.1. WITHHOLDING OF PLAN BENEFITS. The Company shall withhold, or
cause to be withheld, from any benefits payable under this Plan all Federal,
state, city or other taxes as required pursuant to any law or governmental
regulation or ruling.
12.2. WITHHOLDING ON AMOUNTS CREDITED. The Company shall withhold from
current compensation to the Eligible Executive amounts required to be withheld
pursuant to applicable law in respect of amounts credited to the Eligible
Executive under this Plan.
SECTION 13. EMPLOYMENT AND BENEFITS RIGHTS.
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13.1. EFFECT ON OTHER PLANS. Any benefit payable under this Plan shall
not be deemed salary or other compensation for the purpose of computing benefits
under any employee benefit plan or other arrangement of the Company for the
benefit of its employees or directors except to the extent otherwise provided in
such plan or arrangement or required to comply with laws applicable to such plan
or arrangement.
13.2. NOT A CONTRACT OF EMPLOYMENT. This Plan is not a contract of
employment and shall not affect any employment rights of the Eligible Executive
or the right or ability of the Company to terminate the Eligible Executive's
employment with or without cause.
13.3. OTHER BENEFITS. This Plan shall be in addition to any rights of
the Eligible Executive under any other agreement with the Company, if any, and
shall not affect or reduce any benefit or compensation inuring to the Eligible
Executive of a kind not expressly provided for in this Plan.
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SECTION 14. BINDING EFFECT: NONASSIGNABILITY.
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14.1. This Plan shall be binding upon and inure to the benefit of the
Company and its successors and assigns and the Eligible Executive and the
Eligible Executive's designees and estate. Neither the Eligible Executive nor
the Eligible Executive's designees or estate shall commute, encumber, sell or
otherwise dispose of the right to receive the payments provided for in this
Plan, which payments and the rights thereto are expressly declared to be
nontransferable and nonassignable.
SECTION 15. AMENDMENT.
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15.1. This Plan may be amended, suspended or terminated, in whole or in
part, by the Board of Directors of the Company, but no such action shall
retroactively impair or otherwise adversely affect the rights of any person to
benefits under this Plan which have accrued prior to the date of such action, as
determined by the Administrative Committee. Any amendment which materially
impairs or otherwise adversely affects the prospective rights of any person to
benefits under this Plan shall be effective only for calendar years which follow
the year in which notice to Eligible Executives is given.
SECTION 16. GOVERNING LAW.
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16.1. This Plan shall be governed by the laws of the State of Delaware
from time to time in effect.
SECTION 17. MISCELLANEOUS.
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17.1. The captions preceding the Sections hereof have been inserted
solely as a matter of convenience and in no way define or limit the scope or
intent of any provision hereof.
Executed on behalf of the Company, effective as of the date first
written above.
THOR INDUSTRIES, INC.
By: /s/ Wade F.B. Thompson
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Title: Pres
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Date: 10/6/97
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Select Executive Incentive Plan - Thor Industries Inc.
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