EXHIBIT 10(q) One Price Clothing Stores, Inc. Deferred Compensation Plan
effective January 1, 2000 and the related Trust Agreement effective January 27,
2000, between Carolina First Bank as Trustee and the Registrant.
One Price Clothing Stores, Inc.
Deferred Compensation Plan
One Price Clothing Stores, Inc., a Delaware corporation (the
"Company"), hereby establishes this Deferred Compensation Plan (the "Plan"),
effective January 1, 2000, to enable Participants covered under the Plan to
enhance their retirement security by permitting them to enter into agreements
with the Company to defer compensation and receive benefits at retirement,
death, separation from service, and as otherwise provided under the Plan.
ARTICLE 1
DEFINITIONS
1.1 Annual Deferral: shall mean the amount of Compensation, which the
Participant elects to defer under his or her Deferral Election pursuant to
Article 3 of the Plan.
1.2 Beneficiary: shall mean the person or persons or entity designated as such
in accordance with Article 10 of the Plan.
1.3 Change in Control: shall mean the occurrence of either of the following two
events:
1. A change in the Board of Directors of the Company, with the
result that members of the Board, as elected by the
stockholders of the Company on June 10, 1998 ("Incumbent
Directors"), no longer constitute a majority of such Board,
provided that any person who becomes a director whose
appointment or election was supported by a majority of the
Incumbent Directors shall be considered an Incumbent Director
for purposes hereof; or
2. The occurrence of a Section 11(a)(ii) Event, as defined in the
Shareholders Rights Agreement, dated November 3, 1994, between
Wachovia Bank of North Carolina, N.A., as Rights Agent, and
the Company ("Rights Agreement") as amended.
1.4 Committee: shall mean the Committee appointed by the Company to administer
the Plan pursuant to Article 9 of the Plan.
1.5 Company: shall mean One Price Clothing Stores, Inc., and any successor(s)
in interest.
1.6 Compensation: shall mean a Participant's salary and bonuses, before
reductions for deferral.
1.7 Crediting Rate: shall mean the gain or loss on certain investment
alternatives designated by the Committee from time to time for determining
adjustments of amounts credited to the Deferral Accounts of Participants.
The Committee, in its sole discretion, will establish administrative rules
for applying the Crediting Rate.
1.8 Deferral Account: shall mean the bookkeeping device used by the Company to
measure and determine the amounts to be paid to a Participant under the
Plan. One Deferral Account will be established for amounts deferred by a
Participant under the Plan. No assets will actually be placed into this
account in the Participant's name.
1.9 Deferral Contribution Period: shall mean the period of one (1) Plan Year,
or such other period as the Committee may permit in its discretion, over
which the Participant has elected to defer Compensation pursuant to Article
3 of the Plan. A Plan Year shall be January 1 through December 31.
1.10 Deferral Commitment: shall mean a commitment made by a Participant to defer
Compensation pursuant to Articles 2 and 3 of the Plan for which a Deferral
Election Form has been submitted by the Participant.
1.11 Deferral Election Form: shall mean a written agreement between the Company
and the Participant, in the form attached as Exhibit A hereto, entered into
pursuant to Section 2.1 of the Plan, by which the Participant elects to
participate in the Plan and makes a Deferral Commitment. Participants must
state the percentage or dollar amount to be deferred, and elect how and
when the account will be distributed, pursuant to the Deferral Election
Form.
1.12 Disability: shall mean a physical or mental condition that prevents a
Participant from performing his or her normal duties of employment. A
Participant shall be presumed to be disabled if the Participant makes
application for, or is otherwise eligible for disability benefits under the
long term disability plan of the Employer and qualifies for such benefits.
If the Participant is not covered by an Employer sponsored long term
disability plan, then the Participant may be considered disabled if the
Committee so determines upon review of one or more medical opinions
acceptable to the Committee.
1.13 Eligible Employee: To be eligible, an employee must be a member of a
"select group of management or highly compensated employees" for purposes
of ERISA; shall be an employee of the Company or an affiliate of the
Company; shall have been determined to be eligible by the Committee to
participate in the Plan; shall meet the definition of "highly compensated
employee" as defined by the Internal Revenue Code at the time of employee's
eligibility; and must be a participant in and make the maximum allowable
contribution to the Company's 401(k) Savings Plan unless excluded from the
401 (k) Savings Plan for the sole reason that he has not met the one year
of service required to participate in such 401(k) Savings Plan.
1.14 Employer: shall mean the Company.
1.15 ERISA: shall mean the Employee Retirement Income Security Act of 1974, as
amended.
1.16 Hardship: shall mean an unforeseeable emergency, such as a sudden or
unexpected illness, accident, or loss of property due to casualty, as
determined in the Plan. An occurrence shall not be deemed to be an
unforeseeable emergency to the extent that the associated hardship may be
relieved by the liquidation of assets. Cash needs arising from foreseeable
events such as the purchase of a residence or education expenses for
children shall not, alone, be considered a Hardship.
1.17 Participant: shall mean an Eligible Employee, as defined in Section 1.13,
who is participating in the Plan as provided in Article 2
1.18 Plan: shall mean the One Price Clothing Stores, Inc. Deferred Compensation
Plan, as set forth in this document and as the same may be amended,
supplemented and/or restated from time to time and any successor plan.
1.19 Plan Year: shall mean the 12-month period from January 1 through December
31.
1.20 Retirement: shall mean the date of the cessation of the Participant's
employment with the Company, after the Participant attains normal
retirement (age 65), or an early retirement (age 50 - 64 with 5 years of
continuous service), or such other date as the Committee may determine in
its discretion.
1.21 Termination of Employment: shall mean the date of the cessation of the
Participant's employment with the Company for any reason whatsoever,
whether voluntary or involuntary, other than as a result of the
Participant's Retirement, or death.
1.22 Valuation Date: shall mean the last day of each Plan Year calendar quarter,
or such other dates as the Committee may determine in its discretion, which
must be at least annually, for the valuation of a Participant's Deferral
Account.
ARTICLE 2
PARTICIPATION
2.1 Deferral Election Form. Any Eligible Employee may elect to participate in
the Plan and to make a Deferral Commitment by submitting a Deferral
Election Form, as defined in Section 1.11 herein, to the Committee prior to
the beginning of the Deferral Contribution Period. Except as otherwise
provided in this Plan, the Participant's Deferral Commitment shall be
irrevocable.
2.2 Continuation of Participation. A Participant who has elected to participate
in the Plan by making a Deferral Commitment shall continue as a Participant
in the Plan for purposes of such Deferral Commitment even though in any
Plan Year after such Deferral Commitment such Participant elects not to
make a new Deferral Commitment or ceases to be an Eligible Employee. A
Participant shall not be eligible to make a new Deferral Commitment unless
the Participant is an Eligible Employee with respect to the Plan Year for
which the election is made.
ARTICLE 3
FORM OF DEFERRAL COMMITMENTS
3.1 Deferral Commitment. Subject to Sections 3.2 and 3.3, a Participant may
elect in the Deferral Election Form to defer an amount of up to 15% of the
Participant's Compensation, as defined in Section 1.6, less the
Participant's 401(k) contribution, so long as the amount of Compensation
net of the amount deferred does not fall below any applicable thresholds
determined by the Committee in its sole discretion.
3.2 Minimum Deferral Commitment. A Participant may not elect to defer less than
$2,500 in any one Plan Year.
3.3 Maximum Deferral Commitment. The maximum Deferral Commitment allowed in any
Deferral Contribution Period shall be as set forth in Section 3.1;
provided, however, the Committee, in its sole discretion, may establish a
different maximum Deferral Commitment limit for the purpose of controlling
the Company's financial obligations under the Plan or for any other reason
deemed necessary.
3.4 Incomplete Deferral. Notwithstanding anything contained herein to the
contrary, if the Participant has not or will not actually defer the amount
specified in such Participant's Deferral Election Form during the Deferral
Contribution Period, the Participant shall, nevertheless, be permitted to
continue participation in the Plan. No new deferral will be accepted by the
Company until the previously incomplete deferral is fulfilled by the
Participant.
3.5 Withholding. The Committee shall make arrangements for satisfying any
federal, state or local income tax withholding requirements and Social
Security or other employee tax requirements applicable to deferral of
Compensation under the Plan.
ARTICLE 4
DEFERRAL ACCOUNTS
4.1 Deferral Accounts. A Deferral Account, as defined in Section 1.8 herein,
shall be established for each Participant. The Deferral Account shall be
credited with the applicable portion of the Annual Deferral as of the
approximate date such amounts would otherwise have been paid to the
Participant. Deferral Accounts shall, except as otherwise provided in the
Plan, be adjusted by the Crediting Rate in effect for each Plan Year, from
the approximate date such deferrals would have been paid through the
earlier of the Participant's date of death or the following Valuation Date.
Notwithstanding anything in this paragraph to the contrary, the Committee
may, in its sole discretion, establish administrative rules for the purpose
of crediting Deferral Accounts.
4.2 Statements of Account. The Committee shall provide periodically (but no
less frequently than annually) to each Participant a statement setting
forth the balance of the Deferral Account maintained for such Participant.
4.3 Vesting of Accounts & Company Contributions. Each Participant shall be one
hundred percent (100%) vested at all times in the portion of his Deferral
Account derived from Annual Deferrals and gains or losses actually credited
to such Participant's Deferral Account.
The Company may from time to time, in its discretion, credit additional
matching contributions to Participants which shall be allocated to
their Deferral Accounts. This "Company Match" is discretionary and is
determined annually by the Board of Directors. The Board of Directors,
in its sole discretion, may make changes in the Company Match and
Participants will be notified by the Plan Administrator of any such
changes.
The anticipated amount of the Company Match under this Plan, if any,
shall be 50% of the first 5% of the Participant's Compensation deferred
under this Plan and the Company's 401(k) plan less the amount of
Company Match actually made to the Company's 401(k). The combined
Company Match to both this Plan and the Company's 401(k), however,
shall not exceed the maximum Company Match that would otherwise be
available under the Company's 401(k) if the Participant could defer to
the Company's 401(k) plan the maximum amount allowed under Internal
Revenue Code Section 402(g) (e.g., $10,500 for Plan Year 2000).
The portion of the Participant's Deferral Account created by Company
Matches (including any earnings on the Participant's Company Match)
will vest at the rate of 20% per full year of vested service as
follows: less than 1 year - 0%; 1 year - 20%; 2 years - 40%; 3 years -
60%; 4 years - 80%; and 5 years or more - 100%.
In the event Participant dies while in service, incurs a Disability as
determined in Section 1.12 herein, the Plan is terminated, or the
Company experiences a Change in Control, the benefits calculated under
Articles 5 and 6 of the Plan shall assume that the Participant became
one hundred percent (100%) vested in any interest credited to his
Deferral Account, any balance created by Company Matches, and any
earnings on any Company Match, credited to his Deferral Account as of
the day prior to his date of death or Disability, or the date of Plan
termination or Change in Control.
ARTICLE 5
PAYMENT OF BENEFITS
5.1 Retirement Benefits. Upon Retirement, as defined in Section 1.20 herein,
the Company shall pay to the Participant a benefit in the form provided in
Section 5.2 of the Plan, based on the balance of the Participant's Deferral
Account.
5.2 Form of Benefit. The retirement benefit attributable to a Deferral Account
shall be paid in accordance with the Participant's direction as found on a
Deferral Election Form prescribed by the Committee for designation of form
of payment; such payment election shall be made at the time the Deferral
Commitment election is made, and may be changed up to 6 months prior to
Retirement. If no other election is made, the retired Participant will
receive 15 annual retirement distributions in January of each year
following Retirement. Alternate distribution options are as follows:
(a) Lump Sum. A lump sum payment equal to the balance of the
applicable Deferral Account as of the Valuation Date
following Retirement. Payment will commence no earlier than
the first month following Retirement.
(b) Installment Payments. Annual installment payments in
substantially equal amounts over a period of five or ten
years. Installment payments shall be made in January of each
year following Retirement. Interest will be credited to the
unpaid balance in the Deferral Account at a rate in effect for
each Plan Year. The Committee, in its sole discretion, may
establish rules for making payments and crediting interest to
the unpaid Deferral Account balance.
5.3 Termination of Employment Benefits. Subject to the Retirement provisions in
Section 5.2, upon Termination of Employment prior to age 65, the Company
shall pay the Participant a benefit in the form of a lump sum payment equal
to the balance of the Participant's Deferral Account as of the date the
Participant terminated employment. Such payment shall be made as soon as
administratively possible after said termination date.
5.4 In-Service Distributions. A Participant can elect to receive a lump sum
payment of benefits created and generated by the contribution for a given
Plan Year without terminating employment. The benefit payment will be
received by January of a chosen year at least five (5) years after the end
of the Plan Year in which the contribution was made. This election must be
made at the time of deferral.
5.5 Small Benefit Exception. Notwithstanding any of the foregoing, in the event
the sum of all benefits payable to the Participant is less than or equal to
ten thousand dollars ($10,000), the Company may, in its sole discretion,
elect to pay such benefits in a single lump sum payment on the date such
benefits first become payable.
5.6 Constructive Receipt. In the event the Committee determines that amounts
deferred under the Plan have been constructively received by a Participant
and must be recognized as income for federal income tax purposes, such
amounts shall be distributed to the Participant. The determination of the
Committee under this Section 5.6 shall be binding and conclusive.
ARTICLE 6
SURVIVOR BENEFITS
6.1 Pre-Retirement Survivor Benefit. If a Participant dies prior to Retirement
or Termination of Employment, the Company shall pay to the Participant's
Beneficiary a lump sum benefit equal to the balance of the Participant's
Deferral Account as of the date of the Participant's last Valuation Date.
6.2 Post-Retirement Survivor Benefit. If a Participant dies after Retirement,
the Company shall pay to the Participant's Beneficiary the remaining
benefits payable to the Participant under the Plan for the remainder of the
benefit period that such benefits would have been paid to the Participant.
6.3 Small Benefit Exception. Notwithstanding any of the foregoing, in the event
the sum of all benefits payable to the Beneficiary is less than or equal to
ten thousand dollars ($10,000), the Company may, in its sole discretion,
elect to pay such benefits in a single lump sum payment on the date such
benefits first become payable.
ARTICLE 7
DISABILITY
If a Participant is determined to have a Disability, as defined in Section 1.12
of the Plan, the Participant shall, effective as of the date such Participant is
no longer paid his Compensation by the Company, cease deferrals under the Plan
except for any Deferral Commitment regarding any Compensation which is earned or
payable subsequent to the Disability. The Participant's Deferral Account shall
continue to be credited with interest at the Crediting Rate until such time as
the Participant's benefits under the Plan are distributed in accordance with the
Participant's election.
ARTICLE 8
CONDITIONS RELATED TO BENEFITS
8.1 Nonassignability. The benefits provided under the Plan may not be
alienated, assigned, transferred, pledged or hypothecated by or to any
person or entity, at any time or in any manner whatsoever. These
benefits shall be exempt from the claims of creditors or other
claimants of any Participant and from all orders, decrees, levies,
garnishment or executions against any Participant to the fullest extent
allowed by law.
8.2 Hardship Distribution. Upon finding that the Participant or the
Beneficiary has suffered a Hardship, the Committee may, in its sole
discretion and upon written petition by the Participant or Beneficiary,
accelerate distributions of benefits under the Plan in the amount
reasonably necessary to alleviate such Hardship or as requested by the
Participant or the Beneficiary. If a distribution is to be made to a
Participant on account of Hardship, the Participant may not make
subsequent Deferral Commitments under the Plan for the balance of the
Plan Year and the following Plan Year. Any Deferral Commitment in
effect at the time such distribution is made under this section shall
be canceled.
8.3 No Right to Company Assets. The benefits paid under the Plan shall be
paid from the general funds of the Company, and the Participant and any
Beneficiary shall be no more than unsecured general creditors of the
Company with no special or prior right to any assets of the Company for
payment of any obligations hereunder. Subject to the preceding
sentence, the Company shall establish an irrevocable trust to
separately hold and maintain assets for the sole purpose of satisfying
the Company's obligations under the Plan. To enable the Company to
meets its financial commitment under the Plan, insurance may be
purchased on each Participant's life. This insurance is owned by and
payable to Company for the benefit of Plan participants. As a condition
of being eligible to participate, Participants agree to execute any
document and cooperate with the Company in obtaining insurance.
8.4 Protective Provisions. The Participant shall cooperate with the Company
by furnishing any and all information requested by the Committee in
order to facilitate the payment of benefits hereunder, taking such
physical examinations as the Committee may deem necessary, and taking
such other actions as may be requested by the Committee. If the
Participant refuses to cooperate or makes any material misstatement or
nondisclosure of information, then no benefits will be payable
hereunder to such Participant or his Beneficiary.
8.5 Withholding. The Participant or the Beneficiary shall make appropriate
arrangements with the Company for satisfaction of any federal, state or
local income tax withholding requirements and Social Security or other
employee tax requirements applicable to the payment of benefits under
the Plan. If no such arrangements are made, the Company may provide, at
its discretion, for such withholding and tax payments as may be
required.
8.6 Loans. Loans of account balances are not permitted under this Plan.
8.7 Unscheduled Withdrawal. At any time prior to commencement of payments,
the Participant may request a payment in a lump sum of all or a portion
of the balance of Participant's Deferral Account for any reason with a
ten percent (10%) penalty. If the Participant exercises this option,
the Participant may not participate in the Plan for the balance of the
Plan Year and the following Plan Year.
ARTICLE 9
ADMINISTRATION OF THE PLAN
The Committee shall administer the Plan and interpret, construe and apply its
provisions in accordance with its terms. The Committee shall determine in its
sole discretion those who are eligible to participate in the Plan and shall have
the right to set guidelines for participation under the Plan including, but not
limited to, the type, manner and level of Deferral Commitments. The Committee
shall further establish, adopt or revise such other rules and regulations as it
may deem necessary or advisable for the administration of the Plan. All
decisions of the Committee shall be final and binding. The individuals serving
on the Committee shall, except as prohibited by law, be indemnified and held
harmless by the Company from any and all liabilities, costs, and expenses
(including legal fees), to the extent not covered by liability insurance,
arising out of any action taken by any member of the Committee with respect to
the Plan, unless such liability arises from the individual's own gross
negligence or willful misconduct.
ARTICLE 10
BENEFICIARY DESIGNATION
10.1 Beneficiary Designation. The Participant must designate one or more
beneficiaries to receive any unpaid Plan benefits upon their death. The
Participant shall have the right, at any time, to designate any person
or persons as a Beneficiary (both primary and contingent) to whom
payment under the Plan shall be made in the event of the Participant's
death. The Beneficiary designation shall be effective when it is
submitted in writing and delivered to the Committee during the
Participant's lifetime on a form prescribed by the Committee.
10.2 New Beneficiary Designation. The Participant shall have the right to
change or revoke any such designation from time to time by filing a new
designation or notice of revocation with the Company, and no notice to
any Beneficiary or consent by any Beneficiary shall be required to
effect any such change or revocation.
10.3 Failure to Designate Beneficiary. If a Participant fails to designate a
Beneficiary before his death, the Beneficiary shall be the
Participant's surviving spouse. If no designated Beneficiary or spouse
survives the Participant, the Committee shall direct the Company to pay
the balance of the Participant's Deferral Account in a lump sum to the
executor or administrator for his estate; provided, however, if no
executor or administrator shall have been appointed, and actual notice
of the death was given to the Committee within sixty (60) days after
the Participant's death, and if his Deferral Account balance does not
exceed ten thousand dollars ($10,000), the Committee may direct the
Company to pay the Deferral Account balance to such person or persons
as the Committee determines may be entitled to it, and the Committee
may require such proof of right and/or identity of such person or
persons as the Committee may deem appropriate and necessary.
ARTICLE 11
AMENDMENT AND TERMINATION OF THE PLAN
11.1 Amendment of the Plan. The Company may at any time amend the Plan in
whole or in part, provided however, that such amendment (i) shall not
decrease the vested balance of the Participant's Deferral Account at
the time of such amendment and (ii) shall not retroactively decrease
the applicable Crediting Rates of the Plan prior to the time of such
amendment. The Company or Committee may amend the Crediting Rates of
the Plan prospectively.
11.2 Termination of the Plan. The Company may at any time terminate the
Plan as to all or any group of Participants. In the event of such
termination, the Company shall pay to the Participant the benefits
the Participant is entitled to receive as soon as administratively
possible following termination of the Plan. The Crediting Rate will
be applied to the Participant's Deferral Account until distribution
under this section.
ARTICLE 12
MISCELLANEOUS
12.1 Successors of the Company. The rights and obligations of the Company under
the Plan shall inure to the benefit of, and shall be binding upon, the
successors and assigns of the Company.
12.2 ERISA Plan. The Plan is intended to be an unfunded plan maintained
primarily to provide deferred compensation benefits for "a select group of
management or highly compensated employees" within the meaning of Sections
201, 301, and 401 of ERISA and therefore to be exempt from Parts 2, 3, and
4 of Title I of ERISA. Notwithstanding any provisions of this Plan to the
contrary, if any Participant is determined not to be a "member of a select
group of management or highly compensated employee" within the meaning of
ERISA or applicable regulations thereunder at the time a Deferral
Commitment is elected, such Participant will not be eligible to complete
such Deferral Commitment and shall receive an immediate lump sum payment
equal to the unpaid balance of the Deferral Account as of the most recent
Valuation Date. Upon such payment, no survivor benefit or other benefit
shall thereafter be payable under this Plan either to the Participant or
any Beneficiary of the Participant, with respect to said Deferral Account.
12.3 Employment Not Guaranteed. Nothing contained in the Plan nor any action
taken hereunder shall be construed as a contract of employment or as giving
any Participant any right to continued employment with the Company.
12.4 Gender, Singular and Plural. All pronouns and variations thereof shall be
deemed to refer to the masculine or feminine, as the identity of the person
or persons may require. As the context may require, the singular may be
read as the plural and the plural as the singular.
12.5 Captions. The captions of the articles and sections of the Plan are for
convenience only and shall not control or affect the meaning or
construction of any of its provisions.
12.6 Validity. In the event any provision of the Plan is held invalid, void or
unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provisions of the Plan.
12.7 Waiver of Breach. The waiver by the Company of any breach of any provision
of the Plan by the Participant shall not operate or be construed as a
waiver of any subsequent breach by the Participant.
12.8 Applicable Law. The Plan shall be governed and construed in accordance with
the laws of the State of South Carolina except where the laws of the State
of South Carolina are preempted by ERISA.
12.9 Notice. Any notice or filing required or permitted to be given to the
Company under the Plan shall be sufficient if in writing or hand delivered,
or sent by registered or certified mail, return receipt requested, to the
principal office of the Company, directed to the attention of the
Committee. Such notice shall be deemed given as of the date of delivery, or
if delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
12.10Arbitration. Any claim, dispute or other matter in question of any kind
relating to this Plan shall be settled by arbitration in accordance with
the Rules of the American Arbitration Association. Notice of demand for
arbitration shall be made in writing to the opposing party and to the
American Arbitration Association within a reasonable time after the claim,
dispute or other matter in question has arisen. In no event shall a demand
for arbitration be made after the date when the applicable statute of
limitations would bar the institution of a legal or equitable proceeding
based on such claim, dispute or other matter in question. The decision of
the arbitrators shall be final and may be enforced in any court of
competent jurisdiction.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed
this 23rd day of December, 1999, effective as of January 1, 2000.
ONE PRICE CLOTHING STORES, INC.
By: /s/ C. Xxxx Xxxxx
C. Xxxx Xxxxx
Title: Vice President & Treasurer
TRUST UNDER ONE PRICE CLOTHING STORES, INC.
DEFERRED COMPENSATION PLAN
This Trust Agreement made this 27th day of January, 2000 by and between One
Price Clothing Stores, Inc. (Company) and Carolina First Bank (Trustee);
WHEREAS, the Company has adopted the One Price Clothing Stores, Inc.
Deferred Compensation Plan ("Plan"), a nonqualified deferred compensation Plan;
and
WHEREAS, the Company has incurred or expects to incur liability under the
terms of the Plan with respect to the individuals participating in the Plan; and
WHEREAS, the Company wishes to establish a trust (hereinafter called
"Trust") and to contribute to the Trust assets that shall be held therein,
subject to the claims of the Company's Insolvency, as herein defined, until paid
to Plan participants and their beneficiaries in such manner and at such times as
specified in the Plan; and
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plan
as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974;
and
WHEREAS, it is the intention of the Company to make contributions to the
Trust to provide itself with a source of funds to assist it in the meeting of
its liabilities under the Plan.
NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held, and disposed of as follows:
Section 1. Definitions
(a) "Bankruptcy Code" means Title II of the United States Code,
as amended.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Insolvency" or "Insolvent" means the inability to pay debts
as they come due, or being subject to a pending proceeding as
a debtor under the Bankruptcy Code.
(d) "Participant" means an individual participating in the Plan.
(e) "Plan" means the One Price Clothing Stores, Inc. Deferred
Compensation Plan.
Section 2. Establishment of Trust
(a) The Company hereby deposits with the Trustee in trust the
assets listed in Exhibit A, which shall become the principal
of the Trust to be held, administered, and disposed of by the
Trustee as provided in this Trust Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which the
Company is the grantor, within the meaning of subpart E, part
I, subchapter J, chapter 1, subtitle A of the Internal Revenue
Code of 1986, as amended, and shall be construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be
held separate and apart from other funds of the Company and
shall be used exclusively for the uses and purposes of
Participants and general creditors as herein set forth.
Participants and their beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets
of the Trust. Any rights created under the Plan and this Trust
Agreement shall be mere unsecured contractual rights of
Participants and their beneficiaries against the Company. Any
assets held by the Trust will be subject to the claims of the
Company's general creditors under federal and state law in the
event of Insolvency, as defined in Section 1(d) herein.
(e) The Company, in its sole discretion, may at any time, or from
time to time, make additional deposits of cash or other
property in trust with the Trustee to augment the principal to
be held, administered, and disposed of by the Trustee as
provided in this Trust Agreement. Neither the Trustee nor any
Participant or beneficiary shall have any right to compel such
additional deposits.
Section 3. Payments to Participants and Their Beneficiaries
(a) The Company shall deliver to the Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable in respect of each
Participant (and his or her beneficiaries), that provides a formula or
other instructions acceptable to the Trustee for determining the amounts so
payable, the form in which such amount is to be paid (as provided for or
available under the Plan), and the time of commencement for payment of such
amounts. Except as otherwise provided herein, the Trustee shall make
payments to the Participants and their beneficiaries in accordance with
such Payment Schedule. The Trustee shall make provision for the reporting
and withholding of any federal, state, or local taxes that may be required
to be withheld with respect to the payment of benefits pursuant to the
terms of the Plan and shall pay amounts withheld to the appropriate taxing
authorities or determine that such amounts have been reported, withheld,
and paid by the Company.
(b) The entitlement of a Participant or his or her beneficiaries to benefits
under the Plan shall be determined by the Company or such party as it shall
designate under the Plan, and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Plan.
(c) The Company may make payment of benefits directly to Participants or their
beneficiaries as they become due under the terms of the Plan. The Company
shall notify the Trustee of its decision to make payment of benefits
directly prior to the time amounts are payable to Participants or their
beneficiaries. In addition, if the principal of the Trust, and any earnings
thereon, are not sufficient to make payments of benefits in accordance with
the terms of the Plan, the Company shall make the balance of each such
payment as it falls due. The Trustee shall notify the Company where
principal and earnings are not sufficient.
Section 4. Trustee Responsibility Regarding Payments to Trust Beneficiary
When Company is Insolvent
(a) The Trustee shall cease payment of benefits to Participants and
their beneficiaries if the Company is Insolvent.
(b) At all times during the continuance of this Trust, as provided in
Section 2(d) hereof, the principal and income of the Trust shall
be subject to claims of general creditors of the Company under
federal and state law as set forth below.
(1) The Board of Directors and the Chief Executive Officer of
the Company shall have the duty to inform the Trustee in
writing of the Company's Insolvency. If a person claiming
to be a creditor of the Company alleges in writing to the
Trustee that the Company has become Insolvent, the Trustee
shall determine whether the Company is Insolvent and,
pending such determination, the Trustee shall discontinue
payment of benefits to Participants or their
beneficiaries.
(2) Unless the Trustee has actual knowledge of the Company's
Insolvency, or has received notice from the Company or a
person claiming to be a creditor alleging that the Company
is Insolvent, the Trustee shall have no duty to inquire
whether the Company is Insolvent. The Trustee may in all
events rely on such evidence concerning the Company's
solvency as may be furnished to the Trustee and that
provides the Trustee with a reasonable basis for making a
determination concerning the Company's solvency.
(3) If at any time the Trustee has determined that the Company
is Insolvent, the Trustee shall discontinue payments to
Participants or their beneficiaries and shall hold the
assets of the Trust for the benefit of the Company's
general creditors. Nothing in this Trust Agreement shall
in any way diminish any Participant's rights as general
creditors of the Company with respect to benefits due
under the Plan or otherwise.
(4) The Trustee shall resume the payment of benefits to
Participants or their beneficiaries in accordance with
Section 3 of this Trust Agreement only after the Trustee
has determined that the Company is not Insolvent (or is no
longer Insolvent).
(c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to
Section 4(b) hereof and subsequently resumes such payments, the
first payment following such discontinuance shall include the
aggregate amount of all payments due to Participants or their
beneficiaries under the terms of the Plan for the period of such
discontinuance, less the aggregate amount of any payments made to
Participants or their beneficiaries by the Company in lieu of the
payments provided for hereunder during any such period
discontinuance.
Section 5. Payments to the Company
Except as provided in Section 4 hereof, after the Trust has become
irrevocable, the Company shall have no right or power to direct the
Trustee to return to the Company or to divert to others any of the Trust
assets before all payment of benefits have been made to Participants and
their beneficiaries pursuant to the terms of the Plan.
Section 6. Investment Authority
In addition to the powers conferred upon the Trustee either expressly
by, or by necessary implication of, the other provisions of this Trust
Agreement, the Trustee shall have all other powers, not inconsistent
with law or equity, as may be necessary and proper to attain the
objectives of this Trust Agreement. All rights associated with assets of
the Trust shall be exercised by the Trustee or the person designated by
the Trustee, and shall in no event be exercisable by or rest with
Participants.
By way of illustration, and not by way of limitation, the Trustee shall
have power:
(a) To invest and reinvest in, or exchange assets for, any
securities, insurance policies or other properties as directed by
the Company. In the absence of directions from the Company, the
Trustee, after ten (10) days advance written notice to the
Company, shall have power to invest and reinvest and exchange
assets as the Trustee deems advisable without being limited in
the selection of investments by any statutes, rules of law,
custom or usage.
(b) To have and possess any or all of the rights of an owner with
respect to any life insurance policy held in the Trust,
including, without limiting the generality of the foregoing, the
rights to receive or apply dividends or distributive shares of
surplus, disability benefits, surrender values or proceeds of
matured endowments; to obtain and receive from the issuing
insurance company such advances or loans on account of any such
policy as may be available; to sell, assign or pledge the policy;
to surrender the policy; and to exercise any option or privilege
granted in the policy.
Notwithstanding the foregoing, the Trustee shall have no power to
name a beneficiary of the policy other than the Trust, to assign
the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to
any person the proceeds of any borrowing against such policy.
(c) To sell or exchange any property at any time held by it, and any
sale may be made by a private contract or by public auction, and
for cash or upon credit, or partly for cash and partly upon
credit, as the Trustee may deem best, and no person dealing with
the Trustee shall be bound to see to the application of the
purchase money or inquire into the validity, expediency or
propriety of any such sale or other disposition.
(d) To give and execute powers of attorney for the cancellation of
any mortgages; to continue mortgages beyond and after maturity,
with or without renewal or extension, upon such terms as may seem
to the Trustee advisable; to foreclose, as an incident to
collection of any bond or note, any mortgage or pledge securing
such bond or note, and to purchase the mortgaged or pledged
property or acquire the same by conveyance without foreclosure;
and to retain any property bought in under foreclosure or taken
over without foreclosure for such time as to the Trustee shall
deem best.
(e) To manage, operate, repair, improve, partition, mortgage or lease
for any term or terms of years, whether within or beyond the
duration of the Trust, any real estate or any other property
whatsoever which may at any time be held by the Trustee upon such
terms and conditions as the Trustee deems advisable, using other
trust assets for any of such purposes, if deemed advisable; and
to grant and convey by lease or other instruments for terms
within or beyond the duration of the Trust, the right to explore
for and to produce and remove oil, gas, and minerals on, in or
from any lands at any time held by the Trustee, and to grant
perpetual easement or easements for terms within or beyond the
duration of the Trust on, over and with respect to any such
lands.
(f) To compromise, compound, arbitrate or otherwise adjust and settle
any debt or obligation due to or from it as Trustee hereunder to
reduce the rate of interest on, to extend or otherwise modify, or
to foreclose upon default or otherwise enforce any such
obligation.
(g) To execute any investment directions from the Company with
respect to investment fund elections under any variable
annuities, mutual funds or life insurance contracts held in the
Trust.
(h) To make, execute, acknowledge and deliver any and all deeds,
leases, assignments and any other instruments.
(i) To cause any investments from time to time held by it to be
registered in, or transferred into, its name as Trustee or the
name of its nominee or nominees or to retain them unregistered or
in form permitting transferability by delivery, but the books and
records of the Trustee shall at all times show that all such
investments are part of the Trust.
(j) To borrow or raise money for the purpose of the Plan in such
amount, and upon such terms and conditions, as the Trustee shall
deem advisable; and for any sum so borrowed, to issue a
promissory note as Trustee, and to secure the repayment thereof
by pledging all, or any part, of the Trust assets; and no person
lending money to the Trustee shall be bound to see to the
application of the money lent or to inquire into the validity,
expediency, or propriety of any borrowing.
(k) To keep such portion of the Trust in cash or cash balances as the
Trustee may, from time to time, deem to be reasonable and in the
best interests of the Plan, without liability for interest
thereon.
(l) To accept and retain for such time as it may deem advisable any
securities or other property received or acquired by it as
Trustee hereunder, whether or not such securities or other
property would normally be purchased as investments hereunder.
(m) To do all acts whether or not expressly authorized herein which
it may deem necessary or proper for the protection of the
property held hereunder and to carry out the purposes of the
Plan.
Trust assets shall be invested as directed by the Company. The Trustee
shall not be liable if such directions result in a breach of any duty of
the Trustee to diversify, to maintain liquidity or to meet any other
investment standard. Absent direction from the Company, the Trustee
shall invest the Trust assets, as described above.
Section 7. Disposition of Income
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
Section 8. Accounting by the Trustee
(a) The Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
the Company and the Trustee. Within forty-five (45) days following the
close of each calendar year and within thirty (30) days after the removal
or resignation of the Trustee, the Trustee shall deliver to the Company a
written account of its administration of the Trust during such year or
during the period from the close of the last preceding year to the date of
such removal or resignation, setting forth all investments, receipts,
disbursements, and other transactions effected by it, including a
description of all securities and investments purchased and sold with the
cost or net proceeds of such purchases or sales (accrued interest paid or
receivable being shown separately), and showing all cash, securities, and
other property held in the Trust at the end of such year or as of the date
of such removal or resignation, as the case may be.
(b) If no objection is made to a written account of the Trustee within ninety
(90) days after it is rendered, approval of the account shall be deemed to
have been given. In the event of the resignation or discharge of a Trustee,
the procedures outlined in this Section shall apply with respect to the
rendition by such Trustee of its account, and the approval thereof, for the
accounting period ending with the date of resignation or discharge. It is
provided, however, that this Section shall not be construed to give the
Company the power to alter, amend, revoke or terminate the Trust.
(c) Notwithstanding any provisions hereof, the Trustee shall have the right to
apply to a court of competent jurisdiction for the judicial settlement of
any such accounts and in such action or proceeding it shall be necessary to
join as parties thereto only the Trustee and the Company. Any judgment or
decree which may be entered in any such action or proceeding shall be
conclusive and binding upon all parties having or claiming to have any
interest in the Trust assets.
Section 9. Responsibility of Trustee
(a) The Trustee shall incur no liability to any person for any action
taken pursuant to a direction, request, or approval given by the
Company which is contemplated by, and in conformity with, the
terms of the Plan or this Trust and is given in writing by the
Company. In the event of a dispute between the Company and a
party, the Trustee may apply to a court of competent jurisdiction
to resolve the dispute.
(b) If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Company agrees to indemnify the
Trustee against the Trustee's costs, expenses, and liabilities
(including, without limitation, attorneys' fees and expenses)
relating thereto and to be primarily liable for such payments. If
the Company does not pay such costs, expenses, and liabilities in
a reasonably timely manner, the Trustee may obtain payment from
the Trust.
(c) Trustee may consult with legal counsel (who may also be counsel
for the Company generally) with respect to any of its duties or
obligations hereunder.
(d) The Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants, or other professionals to assist
it in performing any of its duties or obligations hereunder.
(e) The Trustee shall have, without exclusion, all powers conferred
on Trustees by applicable law, unless expressly provided
otherwise herein; provided, however, that if an insurance policy
is held as an asset of the Trust, the Trustee shall have no power
to name a beneficiary of the policy other than the Trust, to
assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to
any person the proceeds of any borrowing against such policy.
(f) Notwithstanding any powers granted to the Trustee pursuant to
this Trust Agreement or to applicable law, the Trustee shall not
have any power that could give this Trust the objective of
carrying on a business and dividing the gains therefrom, within
the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal
Revenue Code.
Section 10. Compensation and Expenses of Trustee
The Company shall pay all administrative and Trustee's fees and
expenses. If the administrative and Trustee's fees and expenses are not
paid within ninety (90) days after such payment is due, the expenses and
fees shall be paid from the Trust.
Section 11. Resignation and Removal of Trustee
(a) The Trustee may resign at any time by written notice to the
Company, which shall be effective thirty (30) days after receipt
of such notice unless the Company and the Trustee agree
otherwise.
(b) The Trustee may be removed by the Company on thirty (30) days
notice or upon shorter notice accepted by Trustee.
(c) Upon resignation or removal of the Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred
to the successor Trustee. The transfer shall be completed within
thirty (30) days after receipt of notice of resignation, removal,
or transfer, unless the Company extends the time limit.
(d) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 12 hereof, by the effective
date or resignation or removal under paragraphs (a) or (b) of
this section. If no such appointment has been made, the Trustee
may apply to a court of competent jurisdiction for appointment of
a successor or for instructions. All expenses of the Trustee in
connection with the proceeding shall be allowed as administrative
expenses of the Trust.
Section 12. Appointment of Successor
If the Trustee resigns or is removed in accordance with Section 11(a) or
(b) hereof, the Company may appoint any third party, such as a bank
trust department or other party that may be granted corporate trustee
powers under state law, as a successor to replace the Trustee upon
resignation or removal. The appointment shall be effective when accepted
in writing by the new Trustee, who shall have all of the rights and
powers of the former Trustee, including ownership rights in the Trust
assets. The former Trustee shall execute any instrument necessary or
reasonably requested by the Company or the successor Trustee to evidence
the transfer.
Section 13. Amendment or Termination
(a) This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Company. Notwithstanding the
foregoing, no such amendment shall conflict with the terms of the
Plan or shall make the Trust revocable after it has become
irrevocable in accordance with Section 2(b) hereof.
(b) The Trust shall not terminate until the date on which
Participants and their beneficiaries are no longer entitled to
benefits pursuant to the terms of the Plan.
(c) Upon written approval of Participants or beneficiaries entitled
to payment of benefits pursuant to the terms of the Plan, the
Company may terminate this Trust prior to the time all benefit
payments under the Plan have been made. All assets in the Trust
at termination shall be returned to the Company.
Section 14. Miscellaneous
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without
invalidating the remaining provisions hereof.
(b) Benefits payable to Participants and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at
law or in equity), alienated, pledged, or encumbered; or
subjected to attachment, garnishment, levy, execution, or other
legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of South Carolina to the extent not
governed by applicable federal law.
Section 15. Effective Date
The effective date of this Trust Agreement shall be January 27, 2000.
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be executed by their duly authorized officers on the date and year first
written above.
COMPANY: TRUSTEE:
One Price Clothing Stores, Inc. Carolina First Bank
By: /s/ C. Xxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxxx, Xx.
----------------- --------------------------
C. Xxxx Xxxxx Xxxxxx X. Xxxxxxx, Xx.
Title: Vice President & Treasurer Title: Vice President
EXHIBIT A
None
