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Exhibit (10)(r)
FRISCH'S RESTAURANTS, INC.
NONDEFERRED CASH BALANCE PLAN
Original Edition
Effective January 1, 2000
This document prepared by
Taft, Stettinius & Hollister LLP
1800 Firstar Tower
425 Walnut Street
Cincinnati, Ohio 45202-3957
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FRISCH'S RESTAURANTS, INC.
NONDEFERRED CASH BALANCE PLAN
(Original Edition)
Effective January 1, 2000, FRISCH'S RESTAURANTS, INC.,
hereinafter referred to as the "Company", adopts the following Nondeferred Cash
Balance Plan under which current retirement-type benefits will be paid into
trust for the Company's Highly Compensated Employees in lieu of future accruals
of those employees under the Company's Pension Plan for Managers, Office and
Commissary Employees and the Company's Executive Retirement Plan. This Plan
document was written by the law firm of Taft, Stettinius & Hollister LLP.
ARTICLE I
DEFINITIONS
For purposes of this Plan and any amendments to it, the
following terms when capitalized shall have the meanings specified below, unless
a different meaning is plainly required by the context:
1.1 "Beneficiary" means any person or legal entity designated
by a Highly Compensated Employee to receive distribution of the balance of his
Trust Fund in the event he should die before complete distribution thereof. If
neither the Highly Compensated Employee nor the Trust established by him under
this Plan specifies who is his Beneficiary in the event of his death, or if for
any reason his designation shall be legally ineffective, or if no Beneficiary or
successor Beneficiary named
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Exhibit (10)(r)
by him is living or in existence at the time any amounts are payable under that
Trust, then his Beneficiary shall be deemed to be his surviving spouse, or if
none, his living lawful issue, per stirpes, or if none, the Highly Compensated
Employee's estate.
1.2 "Board of Directors" means the FRISCH'S RESTAURANTS, INC.
Board of Directors.
1.3 "Code" means the Internal Revenue Code of 1986, as it is
now or may hereafter be amended.
1.4 "Continuous Service" means the Highly Compensated
Employee's Continuous Service as determined under the Managers Pension Plan.
1.5 "Effective Date" means January 1, 2000.
1.6 "Executive Retirement Plan" means the Company's Executive
Retirement Plan, as amended and restated effective December 1, 1994--a
nonqualified, unfunded supplemental retirement plan for employees subject to
Code limitations on compensation counted for them under the Managers Pension
Plan.
1.7 "Highly Compensated Employee" means any employee of the
Company who meets the requirements to be a "Highly Compensated Employee" under
the provisions of the ERISA and Subchapter D Rules Governing Qualified Defined
Benefit Pension Plans as in effect under the Company's Managers Pension Plan;
provided, however, that such term shall not include any person whose service
with the Company ended before December 31, 2000.
1.8 "Managers Pension Plan" means the Company's Pension Plan
for Managers, Office and Commissary Employees.
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Exhibit (10)(r)
1.9 "Plan" means the nondeferred cash balance plan as herein
provided and as hereafter amended or revised.
1.10 "Plan Year" means the calendar year.
1.11 "Trust" means the trust established by a Highly
Compensated Employee under this Plan.
1.12 "Trust Fund" means the trust fund held by the Trustee
under a Highly Compensated Employee's Trust.
1.13 "Trustee" means the trustee holding and managing a Highly
Compensated Employee's Trust Fund.
1.14 Any words in this Plan document (or amendments to it)
which are used in one gender shall be read and construed to mean or include the
other gender wherever they would so apply. Any words in this Plan document (or
amendments to it) which are used in the singular shall be read and construed to
mean or include the plural wherever they would so apply, and vice versa.
ARTICLE II
ELIGIBILITY
2.1 Qualifications for Eligibility
Each Highly Compensated Employee who would accrue a benefit or
an additional benefit under the Company's Managers Pension Plan and/or under the
Company's Executive Retirement Plan but for being a Highly Compensated Employee
shall be eligible for a Company contribution to his Trust Fund beginning with
Plan Year 2000. The amount of such Company contribution shall be determined in
the manner described in Section 3.1.
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Exhibit (10)(r)
ARTICLE III
CONTRIBUTIONS TO TRUST FUND
3.1 Annual Company Contribution
Each Plan Year the actuary acting under the Company's Managers
Pension Plan shall determine with respect to each Highly Compensated Employee
the actuarial present value of the benefits lost by that Highly Compensated
Employee for that Year by virtue of the exclusion of Highly Compensated
Employees from benefit accruals under the Managers Pension Plan after 1999. To
that amount the actuary shall add the actuarial present value of any benefit
lost that Year by the Highly Compensated Employee under the Company's Executive
Retirement Plan by virtue of the Highly Compensated Employee exclusion
(including any lost benefit related to compensation deferrals made under the
Company's Executive Savings Plan). Such actuarial present value determinations
shall be made using the 1983 Group Annuity Mortality Table (weighted 50% male,
50% female), and a 7% per annum interest rate. For each Highly Compensated
Employee having 5 or more years of Continuous Service the Company shall
contribute to his Trust Fund, by the end of that Plan Year, 111% of the sum of
such actuarial present values, less the portion thereof that is required to be
paid by the Company as tax withholdings to the appropriate taxing authorities.
For each other Highly Compensated Employee the actuary shall determine the
manner of the Company's contributing those actuarial present values per Plan
Year so that 111% of them (less the portions
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Exhibit (10)(r)
thereof that are required to be paid by the Company as tax withholdings to the
appropriate taxing authorities) will be contributed to the Highly Compensated
Employee's Trust Fund by the end of the respective Plan Years in accordance with
the following schedule:
Full Years of Aggregate Contributions
Highly Compensated and Tax Withholdings on
Employee's 111% of that Employee's
Continuous Service Present Value Amounts
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Fewer than 2 0%
2 25%
3 50%
4 75%
5 or more 100%
In the event of the death of a Highly Compensated Employee
during a Plan Year the Company shall nevertheless make the contribution and tax
withholding payments described above with respect to that Highly Compensated
Employee for that Year.
3.2 Additional Company Contribution
At the time a Highly Compensated Employee having 5 or more
years of Continuous Service retires or otherwise separates from service with the
Company the actuary acting under the Company's Managers Pension Plan shall
determine the tax-adjusted actuarial present value of all benefits lost by the
Highly Compensated Employee since 1999 under the Managers Pension Plan and the
Executive Retirement Plan by virtue of the exclusion of Highly Compensated
Employees from benefit accruals under those Plans. The actuarial assumptions
specified in Section 3.1 and
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Exhibit (10)(r)
the tax factors approved by the Chief Financial Officer of the Company shall be
used for these determinations. If the tax-adjusted actuarial present value of
all such lost benefits exceeds the tax-adjusted value of the assets held in the
Highly Compensated Employee's Trust Fund at that time (including the
tax-adjusted value of any assets previously withdrawn from his Trust Fund, plus
tax-adjusted imputed earnings thereon), the Company shall contribute the amount
of the excess to his Trust Fund by the end of the Plan Year in which his
retirement or other separation from service with the Company occurs, less the
portion thereof that is required to be paid by the Company as tax withholdings
to the appropriate taxing authorities. No such additional Company contribution
shall be made with respect to a Highly Compensated Employee having less than 5
years of Continuous Service. By April 30 of each year each Highly Compensated
Employee shall furnish to the Company a written account setting forth the dates
and amounts of all investments, receipts, disbursements and other transactions
that occurred with respect to his Trust Fund during the preceding calendar year,
and showing all cash, securities and other property held in the Trust Fund at
the end of such year.
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Exhibit (10)(r)
ARTICLE IV
RIGHTS OF THE COMPANY TO DISCONTINUE OR AMEND
4.1 Rights of Termination Reserved
It is the expectation of the Company that it will continue
this Plan and the payment of contributions hereunder indefinitely, but
continuance of the Plan and the payment of its contributions by the Company as
herein provided is not assumed as a contractual obligation by the Company; and
the right is reserved by the Company at any time to terminate this Plan and its
contributions hereunder. However, the termination of the Plan may not cause a
decrease in any benefits accrued under the Plan at the time of such termination.
4.2 Amendments
The Company by written instrument shall have the right to
amend this Plan at any time to any extent deemed advisable, and upon such
amendment all individuals having any interest under this Plan shall be bound
thereby. However, no amendment to the Plan shall be effective to the extent that
it would result in decreasing any benefits accrued under the Plan before such
amendment.
4.3 No Reversion to the Company
Under no circumstances, whether by amendment to or termination
of this Plan, may any contributions or tax withholdings made by the Company
under this Plan ever revert to, or be used or enjoyed by, the Company.
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Exhibit (10)(r)
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1 Right to Discharge Participant
The establishment of the Plan shall not be construed as
conferring any rights upon any participant or any other person for a
continuation of employment, nor shall it be construed as limiting in any way the
right of the Company to discharge any participant or other employee.
5.2 Applicable Law
The Plan shall be construed and administered in accordance
with and governed by the laws of the United States and of the State of Ohio.
IN WITNESS WHEREOF, FRISCH'S RESTAURANTS, INC. has caused this
instrument to be executed this 15th day of December, 2000.
FRISCH'S RESTAURANTS, INC.
By /s/ Donald H. Walker
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Exhibit (10)(r)
DONALD H. WALKER TRUST
UNDER THE
FRISCH'S RESTAURANTS, INC.
NONDEFERRED CASH BALANCE PLAN
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DONALD H. WALKER TRUST
Under the
FRISCH'S RESTAURANTS, INC.
NONDEFERRED CASH BALANCE PLAN
This Trust Agreement made this 29th day of December, 2000, by
and between DONALD H. WALKER (the "Grantor") and FIRSTAR BANK, N.A. (the
"Trustee"), WITNESSETH:
(a) WHEREAS, the Grantor is establishing this Trust in
connection with the Nondeferred Cash Balance Plan (hereinafter called the
"Plan") established by Frisch's Restaurants, Inc. (hereinafter called the
"Company") relating to contributions to be made hereto by the Company in lieu of
future accruals under the Company's Pension Plan for Managers, Office and
Commissary Employees and the Company's Executive Retirement Plan; and
(b) WHEREAS, it is the intention of the Grantor and the
Company that this Trust shall constitute a fully vested nonqualified funded
arrangement to which after-tax contributions can be made by the Company for
future distribution to the Grantor or his beneficiaries;
NOW, THEREFORE, the Grantor and the Trustee do hereby
establish this Trust and agree that the Trust shall be comprised, held and
disposed of as follows:
Section 1. Establishment of Trust
(a) The Grantor hereby establishes with the Trustee a general
Trust Fund consisting of such property delivered from time to time to the
Trustee to be held under the terms of this Trust Agreement, and all earnings,
additions and appreciations of
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Exhibit (10)(r)
such Trust Fund as may accrue from time to time, less disbursements and
expenses paid therefrom.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be, and to be construed as, a
grantor trust within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, of which the
Grantor is grantor. The Grantor shall be treated as the owner of 100% of the
Trust Fund assets; and the income of the Trust shall be held and accumulated for
distribution to the Grantor or his beneficiaries in accordance with the
provisions of this Trust Agreement, without the approval of any adverse party.
The Grantor (or after his death, his beneficiaries) shall be liable for all
taxes imposed on the Trust Fund or on the income thereof.
(d) The Trust Fund principal and all earnings thereon shall be
held exclusively for the uses and purposes of the Grantor and his beneficiaries
pursuant to the terms of this Trust Agreement. In no event shall any of the
Trust Fund principal or any of the earnings thereon be subject to the claims of
the Company or any of its creditors. The Trust created hereunder shall
constitute a spendthrift trust; and to the full extent permitted by law, none of
the Trust Fund assets shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge; and any
attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber or
charge shall be utterly void; nor shall any such benefits be subject to the
claims of creditors or others, nor to action in
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Exhibit (10)(r)
bankruptcy or other legal process, prior to actual payment to the Grantor or
his beneficiaries.
(e) The Trustee shall be entitled to receive from the Company
only such amounts as the Company shall pay to the Trustee; and the Trustee shall
not have the right and shall not be subject to any duty to demand or collect
from the Company any other sums of money or other property.
Section 2. Payments from the Trust
(a) The Grantor shall be entitled to withdraw any part of the
principal and/or income of the Trust Fund at any time after his retirement or
other separation from service with the Company. In addition, with the consent of
the Company the Grantor may periodically withdraw from the Trust Fund such
amounts as may be required to pay the taxes on the income of the Trust Fund.
(b) In the event any amounts remain in the Trust Fund after
the Grantor's death they shall immediately be payable in full (subject to any
required tax withholdings) to his designated beneficiary or beneficiaries. If
the Grantor shall have failed to designate one or more beneficiaries, or if for
any reason his designation shall be legally ineffective, or if no beneficiary or
successor beneficiary named by him is living or in existence at the time any
amounts are payable hereunder, then his beneficiary shall be deemed to be his
surviving spouse, or if none, his living lawful issue, per stirpes, or if none,
the Grantor's estate.
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Exhibit (10)(r)
Section 3. No Reversion to the Company
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 Fund assets, or
to grant a security interest in or otherwise encumber any of the assets of the
Trust Fund.
Section 4. Investment Authority
(a) To the extent permitted under subsection (b)(1) below, the
Trustee may invest in the common stock of the Company, or rights to acquire such
stock, or obligations issued by the Company. All rights associated with assets
of the Trust Fund shall be exercised by the Trustee or the person designated by
the Trustee, except as provided in subsection (c) of this Section 4.
(b) The Trustee shall have the following powers and authority
with respect to the assets of the Trust Fund:
(1) To invest and reinvest the principal and the
income of the Trust Fund in any fund or
funds permitted as investment options to
participants under the Company's Employee
401(k) Savings Plan, without being limited
to what are commonly known as legal
investments for trust funds, or by the
proportion which the investments so made,
either alone or with any other property of
the same or similar character then held or
thereafter acquired, may bear to the entire
amount of the Trust Fund. To the extent that
investments are directed to be made in
interests in registered investment companies
maintained by the Trustee or its affiliates,
the Trustee or its affiliates may receive
compensation from such registered investment
companies for providing investment advisory,
transfer agency, custodial or other
services;
(2) To retain cash in the Trust Fund to meet
contemplated payments, or temporarily
awaiting investment, without liability for
interest thereon; or to invest part or all
of
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Exhibit (10)(r)
such amounts in bonds, in certificates of
deposit or savings accounts maintained with
any banking department (whether or not
related to a corporate trustee), a
money-market fund, or the like;
(3) To sell any portion of the Trust Fund at any
time at either public or private sale for
cash or on credit at such time or times as
may seem appropriate to the Trustee, and to
exchange such property and grant options for
the purchase or exchange thereof;
(4) To consent to and participate in any plan of
reorganization, consolidation, merger,
combination or other similar plan; to
consent to any contract, lease, mortgage,
purchase, sale or other action by any
corporation pursuant to such plan and to
accept and retain any property issued under
any plan of reorganization;
(5) To exercise all conversion and subscription
rights pertaining to any investment held in
the Trust Fund;
(6) To exercise all voting rights with respect
to any investment held in the Trust Fund and
in connection therewith to grant proxies,
discretionary or otherwise;
(7) To cause any securities or other property
held in the Trust Fund to be registered and
held in the name of one or more nominees, or
retain them unregistered or in form
permitting transfer by delivery, but the
books and records of the Trustee shall at
all times show that all such investments are
part of the Trust Fund; and
(8) Generally to do all such acts, execute and
deliver all such instruments, take all such
proceedings and exercise all such rights and
privileges with relation to Trust Fund
assets as the Trustee may deem necessary or
proper for the purpose of carrying out its
powers and duties hereunder.
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Exhibit (10)(r)
(c) To the limit of the powers granted it under (b) above the
Trustee shall follow any investment directions made by the Grantor. To the
extent the Trustee receives direction from the Grantor with respect to
investments, the Trustee shall not be responsible for the management and control
of those Trust Fund assets other than to serve as custodian thereof.
Section 5. Accounting by Trustee
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 Grantor and the Trustee. Within thirty (30) 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 Grantor and to the Company a
written account of its administration of the Trust Fund 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, and showing all cash, securities and
other property held in the Trust Fund at the end of such year or as of the date
of such removal or resignation, as the case may be. Upon the expiration of
ninety (90) days from the date of filing any such account or upon the earlier
specific approval thereof by the Grantor and the Company, the Trustee shall be
forever released and discharged from all liability and accountability to the
Grantor and to the Company with respect to any nonfraudulent acts and
transactions shown in such account except to the extent that the Grantor or the
Company, within such 90-day period, files written objections
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Exhibit (10)(r)
with the Trustee as to specific acts or transactions shown in the account.
Nothing herein contained, however, shall be deemed to preclude the Trustee of
its right to have its accounts judicially settled by a court of competent
jurisdiction; nor shall anything herein contained be deemed to excuse, release
or discharge the Trustee for liability and responsibility with regard to any
fraudulent acts committed by its employees.
Section 6. Responsibility of Trustee
(a) The Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person acting
in like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that the
Trustee shall incur no liability to any person for any action taken in
accordance with the terms of this Trust Agreement or pursuant to a direction,
request or approval given by the Grantor that is contemplated by, and in
conformity with, the terms of this Trust and is given in writing by the Grantor.
(b) The Trustee, at the Grantor's expense, may consult with
legal counsel (who may also be counsel for the Grantor or for the Trustee
generally) with respect to any of its duties or obligations hereunder; and the
Trustee shall have no liability for any action or failure to act in reasonable
reliance upon the advice of such counsel.
(c) The Trustee shall have, without exclusion, all powers
conferred on trustees by applicable law, unless expressly
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Exhibit (10)(r)
provided otherwise herein; provided, however, that if an insurance policy is
held as an asset of the Trust, the Trustee shall have no discretionary authority
or obligation to review, at any time or from time to time, the provisions of
such a policy or the issuer thereof, nor to review such issuer's
creditworthiness, and 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.
Section 7. Compensation and Expenses of the Trustee
(a) Prior to the Grantor's retirement or other separation from
service with the Company, the Company shall pay all administrative expenses and
the Trustee's fees and expenses hereunder. After the Grantor's retirement or
other separation from service with the Company, the Grantor shall pay all
administrative expenses and the Trustee's fees and expenses hereunder. If not so
paid, the fees and expenses shall be paid from the Trust Fund.
(b) No bond or other security for the faithful performance of
duty shall be required of the Trustee at anytime.
Section 8. Resignation and Removal of Trustee
(a) The Trustee may resign at anytime by written notice to the
Grantor, which shall be effective thirty (30) days after receipt of such notice
unless the Grantor and the Trustee agree otherwise.
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Exhibit (10)(r)
(b) Upon 30 days written notice the Trustee may be removed by
joint action of the Company and the Grantor taken in an instrument in writing
delivered to the 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 Grantor
extends the time limit.
(d) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 9 hereof. 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 9. Appointment of Successor
(a) In case the Trustee shall resign or be removed, or shall
otherwise become incapable of acting hereunder, or in case it shall be taken
under the control of any public officer or officers or of a receiver appointed
by a court, a successor Trustee may be appointed by joint action of the Company
and the Grantor. If for any reason they shall fail to appoint a successor
Trustee within thirty (30) days after such resignation or removal, the Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
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Exhibit (10)(r)
(b) Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to its predecessor and also to the Grantor an instrument
in writing accepting such appointment hereunder, and thereupon such successor
shall become fully vested with all the trusts, powers, rights, obligations,
duties, remedies, immunities and privileges of its predecessor. Every
predecessor Trustee shall deliver the Trust Fund assets held by it as Trustee
hereunder to its successor. Should any instrument in writing from the Company
and/or the Grantor be required by any successor Trustee for more fully and
certainly vesting in such successor the trusts, powers, rights, obligations,
duties, remedies, immunities and privileges hereby vested in the predecessor,
any such instrument shall, on request, be executed, acknowledged and delivered
by the Company and/or the Grantor.
(c) Any corporation or association into which the Trustee may
be merged or consolidated, or to which it may sell or transfer its trust
business and assets as a whole or substantially as a whole, or any corporation
or association resulting from any merger, conversion, sale, consolidation or
transfer to which it is a party, shall become successor Trustee hereunder and
shall be vested with all the trusts, powers, rights, obligations, duties,
remedies, immunities and privileges hereunder as was its predecessor, without
the execution or filing of any instrument or any further act on the part of any
of the parties hereto.
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Exhibit (10)(r)
Section 10. Amendment or Termination
This Trust Agreement may be amended by a written instrument
executed jointly by the Trustee, the Company and the Grantor.
Section 11. 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) This Trust Agreement shall be governed by and construed in
accordance with the laws of Ohio.
IN WITNESS WHEREOF, the Grantor, the Company and the Trustee
have caused this Trust Agreement to be executed as of the date first written
above.
GRANTOR:
/s/Donald H. Walker
-----------------------------------
Donald H. Walker
FIRSTAR BANK, N.A.
By: /s/Stephen Lipps
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FRISCH'S RESTAURANTS, INC.
By: /s/Michael E. Conner
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