Exhibit
10.4
Rev.
9/13/06
MATTHEWS
INTERNATIONAL CORPORATION
SUPPLEMENTAL
RETIREMENT PLAN
ORIGINALLY
EFFECTIVE OCTOBER 1, 1987
AMENDED
EFFECTIVE SEPTEMBER 13, 2006
ARTICLE
1
GENERAL
PROVISIONS
1.1 Matthews
International Corporation ("the Company")
originally adopted this Supplemental Retirement Plan ("Supplemental
Plan"
or
"Plan")
effective October 1, 1987. This instrument amends and restates the Plan in
its
entirety, effective as of September 13, 2006.
1.2 As
amended from time to time, this Supplemental Plan shall be deemed to be a
contract between the Company and each Participant. However, nothing contained
in
this Plan shall be deemed to give any Participant the right to be retained
in
service or to interfere with the right of the Company to discharge any
Participant at any time without regard to the effect which such discharge shall
have on such Participant's rights, if any, under this Plan.
1.3 No
Participant shall have the right to assign, transfer, hypothecate, encumber,
commute or anticipate the right to any payments under this Supplemental Plan,
and such payments shall not in any way be subject to any legal processes to
levy
on or attach the same for payment of any claim against any
Participant.
1.4 Defined
Terms: The terms listed below, when used in this Supplemental Plan with (an)
initial capital letter(s), are defined either explicitly or in context in the
provisions identified below:
Accrued
Benefit
|
Article
3
|
|
Active
Participant
|
2.1(a)
|
|
Actuarial
Equivalent
|
4.6
|
|
Board
of Directors
|
2.1(b)
|
|
Company
|
1.1
|
|
Compensation
Committee
|
2.5(d)
|
|
Continuous
Service
|
3.5
|
|
Deferred
Retirement Benefit
|
4.2
|
|
Deferred
Retirement Date
|
2.7(b)
|
|
Delayed
Payment Date
|
4.11(a)
|
|
Early
Retirement Benefit
|
4.3
|
|
Early
Retirement Date
|
2.7(c)
|
|
Early
Retirement Factor
|
4.3(a)
|
|
Early
Retirement Supplement
|
4.3(c)
|
|
Earnings
|
3.4
|
|
Employees
Retirement Plan
|
3.2
|
|
ERISA
|
6.1(b)
|
|
Excise
Tax
|
4.10
|
|
Final
Average Monthly Earnings
|
3.3
|
|
Former
Active Participant
|
2.4
|
|
Gross-Up
|
4.10
|
|
IRC
|
2.7(d)
|
|
Joint
and 50% Surviving Spouse Annuity
|
4.7
|
|
Joint
and 66-2/3% Surviving Spouse Annuity
|
4.8
|
|
Minimum
Officer Service Requirement
|
2.1
|
|
LTD
Benefits
|
2.2(c)
|
|
Normal
Annuity
|
4.5
|
|
Normal
Retirement Benefit
|
4.1
|
|
Normal
Retirement Date
|
2.7(a)
|
|
Officer
|
2.1
|
|
Parachute
Payment
|
4.10
|
|
Participant
|
Article
2, Preamble
|
|
Participant's
Termination Date
|
7.1(b)
|
|
Plan
|
1.1
|
|
Retired
Participant
|
2.7(a)
|
|
Retirement
Date
|
2.7(d)
|
|
Section 9
Event
|
2.2(b)
|
|
Spouse
|
4.4(f)
|
|
Social
Security Primary Insurance Amount
|
3.2
|
|
Social
Security Supplement
|
4.3(b)
|
|
Supplemental
Plan
|
1.1
|
|
Surviving
Spouse
|
4.7,
5.1
|
|
Trust
|
6.4
|
|
Vested
Accrued Benefit
|
2.5(a)
|
|
Vested
Participant
|
6.4(a)
|
|
ARTICLE
2
PARTICIPATION
AND ELIGIBILITY FOR BENEFITS
In
this
Supplemental Plan, the term “Participant”
is
sometimes used to refer to any one, or more, or all, of the following, as the
context requires: Active Participant (2.1), Former Active Participant (2.4),
Retired Participant (2.7), and/or Vested Participant (6.4(a)).
Eligibility
for Participation
2.1
(a) Except
as
otherwise provided in 2.2, each Officer of the Company shall become an
Active
Participant
in this
Supplemental Plan as of the first day of the month next following the date
on
which he or she completes five years of active service as an Officer of the
Company (the "Minimum
Officer Service Requirement").
(b) For
purposes of this Plan, "Officer"
shall
include only those employees whom the Company's Board
of Directors,
acting
pursuant to the Company's Bylaws, have elected as executive officers of Matthews
International Corporation. As such, "Officer" includes, but is not limited
to:
Chairman (if also a salaried employee of the Company), Vice Chairman (if also
such an employee), Chief Executive Officer, President, Chief Financial Officer,
Vice President, Secretary, Treasurer and Controller. However, assistant officers
of the Company, officers of subsidiary companies, or managers of unincorporated
business divisions or business units who hold titles such as "President" or
"Vice President" of such a division or business unit, shall not, solely by
virtue of holding such office or division officer designation, be deemed to
be
Officers of the Company for purposes of this Plan.
2.2 Notwithstanding
2.1:
(a) In
its
sole and absolute discretion and with no obligation to apply its discretion
in a
uniform manner, the Board of Directors may expressly waive the Minimum Officer
Service Requirement with respect to any individual Officer and designate such
Officer an Active Participant in the Plan effective at the time determined
by
the Board.
(b) An
Officer who has not satisfied the Minimum Officer Service Requirement of 2.1
or
who has not been specially designated as an Active Participant pursuant to
2.2(a), shall nevertheless become an Active Participant upon the occurrence
of a
"Section 9
Event",
as
defined in Section 9(A) of the Matthews International Corporation 1992
Stock Incentive Plan (as amended through April 25, 2006 and as it may be amended
hereafter), or similar change-of-control provisions in any successor plan
adopted by the Company in place of the 1992 Stock Incentive Plan.
(c) An
Officer who has not satisfied the Minimum Officer Service Requirement of 2.1(a)
or the special designation requirements of 2.2(a), and who has both attained
age 55 and become eligible to receive long-term disability benefits under
the Company's long-term disability insurance plan ("LTD
Benefits"),
will
become an Active Participant upon the last to occur of his or her (i) becoming
eligible to receive LTD Benefits, or (ii) attainment of age 55 while receiving
LTD Benefits.
2.3 Following
qualification as an Active Participant, an individual shall continue in such
capacity until the earliest to occur of the following events:
(a) The
Participant dies.
(b) The
Participant's employment with the Company terminates, or, in the case of a
Participant who is receiving LTD Benefits (2.2(c)), the Participant ceases
to be
eligible to continue to receive LTD Benefits, whichever occurs
later.
(c) The
Participant becomes a Former Active Participant (2.4) upon termination of his
or
her status as an Officer of the Company.
(d) The
Participant becomes a Retired Participant (2.7).
2.4 In
the
event that an Active Participant ceases to be an Officer of the Company, but
continues to be an active employee of the Company in a non-Officer capacity,
his
or her benefits hereunder shall cease to accrue as of the date such Participant
ceases to be an Officer of the Company. An individual who meets the criteria
of
this paragraph shall be a Former
Active Participant.
Eligibility
for Benefits (Vesting, etc.)
2.5 Vesting
under Circumstances Other than a Section 9 Event
(a) Except
as
provided in 2.5(f), 2.6 or 2.7, an Active Participant or Former Active
Participant (1) who voluntarily terminates employment or (2) whose employment
with the Company is terminated involuntarily or by mutual agreement, shall
have
vested rights in his or her Accrued Benefit (Article 3) according to the
following schedule:
Participant's
Completed Years
of
Continuous Service (3.5(b))
|
Vested
Percentage
|
Less
than 10
|
0%
|
10
but
less than 15
|
50%
|
15
or
more
|
100%
|
A
positive amount determined hereunder shall be such Participant's Vested
Accrued Benefit.
(b) Except
as
provided in 2.5(d), a Participant with
a
vested percentage of 0% whose employment terminates, shall
forfeit all rights under the Plan and no
benefits of any kind shall be due or payable under the Plan to, or with respect
to, such Participant, such Participant's Surviving Spouse, or such Participant's
estate.
(c) Except
as
provided in 2.5(d), a Participant with a vested percentage of 50% whose
employment terminates shall forfeit the remaining 50% of his or her Accrued
Benefit. Such Participant shall be eligible to receive, and the Plan shall
commence payment of, such Participant’s 50% Vested Accrued Benefit as provided
in 2.8.
(d) In
the
case of any particular Participant described in 2.5(b) or 2.5(c), the
Compensation
Committee
of the
Company's Board of Directors, in the Committee’s sole and absolute discretion
and with no obligation to apply its discretion in a uniform manner, shall have
full authority to waive such Participant's satisfaction of the requirement
of
performing future Continuous Service with the Company in order to achieve either
a 50% Vested Accrued Benefit or a 100% Vested Accrued Benefit, and, in any
such
case, the Participant shall be deemed to be described in 2.5(c) or 2.5(e),
as
applicable under the action taken by the Committee. Solely for purposes of
determining his or her eligibility to retire on an Early Retirement Date, a
Participant who achieves a 100% Vested Accrued Benefit because of the
Committee's action hereunder shall be deemed to have 15 years of Continuous
Service.
(e) A
Participant whose employment terminates with a vested percentage of 100%, shall
be eligible to receive, and the Plan shall commence payment of, his or her
100%
Vested Accrued Benefit on the first applicable Retirement Date under 2.8 to
occur following the Participant's termination of employment. For example, such
a
Participant who has attained the actual age of 55 or higher shall be eligible
to
receive, and the Plan shall commence payment of, his or her 100% Vested Accrued
Benefit, on the first day of the month following his or her termination of
employment.
(f) Notwithstanding
2.5(a) through (e), if
(i) an
involuntary or mutually-agreed-upon termination of employment occurred by reason
of the Participant engaging in (1) a felonious act involving the Company or
another employee of the Company, or (2) competition with, or conduct detrimental
to, the Company as described in 4.9, or
(ii) at
any
time following a voluntary termination of employment it comes to the attention
of the Compensation Committee that the Participant had engaged in such felonious
act, competition or detrimental conduct prior to his or her voluntary
termination of employment,
then,
in
any such case, such Participant shall forfeit all rights under the Plan and
no
benefit (or further benefit) of any kind shall be due or payable under the
Plan
to, or with respect to, such Participant, such Participant's Surviving Spouse,
or such Participant's estate.
2.6 Vesting
Upon a Section 9 Event
(a) An
Active
Participant or Former Active Participant who terminates employment with the
Company, whether voluntarily, involuntarily, or by mutual agreement, at any
time
following the occurrence of a Section 9 Event, shall have a 100% Vested
Accrued Benefit and become a Retired Participant (2.8), and
the
Plan shall commence distribution of such Participant's benefits, effective
on
the first applicable Retirement Date occurring under 2.8 after such termination
of employment. Further, and solely for purposes of such benefits commencing
at
an Early Retirement Date, such Participant shall be deemed to have had 15 years
of Continuous Service at the date of such termination.
Moreover, if such Participant was an Active Participant at the time of such
Section 9 Event, he or she shall thereafter be deemed to be five years
older than his or her actual age, solely for purposes of
(i) determining
his or her eligibility to commence receipt of benefits at an Early Retirement
Date and the applicable Early Retirement Factor under 4.3(a), or
(ii)
determining his or her eligibility to commence receipt of benefits or at his
or
her Normal Retirement Date or a Deferred Retirement Date (without application
of
an Early Retirement Factor).
(b) The
following examples illustrate the effect, pursuant to 2.6(a), of attributing
to
an Active Participant additional five years of age:
(i) An
Active
Participant who terminated employment following a Section 9 Event and who,
exactly coincident with such date of termination, attained the actual age of
60
years, would be deemed to have attained Normal Retirement Age and, therefore,
would be eligible to commence to receive benefits, and the Plan would commence
distribution of such Participant's Normal Retirement Benefit, on the first
day
of the month immediately following such Participant's termination of employment
(such date being deemed to be the Participant’s Normal Retirement
Date).
(ii) An
Active
Participant who terminated employment following a Section 9 Event and who,
at the date of such termination, had attained the actual age of 62 years, would
be deemed to have attained Normal Retirement Age and, therefore, would be
eligible to commence to receive benefits, and the Plan would commence
distribution of such Participant's Normal Retirement Benefit, on the first
day
of the month immediately following such Participant's termination of employment
(such date being deemed to be a Deferred Retirement Date).
(iii) An
Active
Participant who terminated employment following a Section 9 Event and who,
exactly coincident with the date of such termination, attained the actual age
of
50 years old would be deemed to have attained Early Retirement Age and,
therefore, would be eligible to commence to receive benefits, and the Plan
would
commence distribution of such Participant's Early Retirement Benefit, on the
first day of the month immediately following such date of termination (such
date
being deemed to be an Early Retirement Date), with an Early Retirement Factor
of
70% under 4.3(a).
(iv) An
Active
Participant who terminated employment following a Section 9 Event, but who,
at such date of termination, had not yet attained age 50 years, would be
eligible to commence to receive benefits, and the Plan would commence
distribution of such Participant's Early Retirement Benefit, on the first day
of
the month immediately following the date of the Participant’s 50th
birthday
(at which time he or she with be deemed to have attained Early Retirement Age),
with an Early Retirement Factor of 70% under 4.3(a).
However,
any such Participant who is deemed to be five years older than such
Participant’s actual age for purposes of eligibility for commencement of
benefits (and, if applicable, determination of the appropriate Early Retirement
Factor), shall not be deemed to be five years older for any other purpose
relevant to the Plan (such as, e.g., the period during which a Social Security
Supplement would be payable to such Participant under 4.3(b)), except as
expressly provided in this instrument.
2.7 Vesting
Upon Eligibility for LTD Benefits
Notwithstanding
2.5, an Officer who becomes an Active Participant pursuant to 2.2(c), or an
Active Participant or Former Active Participant who becomes disabled and
eligible to receive LTD Benefits under the Company's long-term disability
insurance plan, shall have a 100% Vested Accrued Benefit.
2.8 Retirement
and Commencement of Benefits
(a) An
Active
Participant (or Former Active Participant) who has attained a Vested Accrued
Benefit on or prior to the date of his or her 65th birthday
may
retire from active employment with the Company on the first day of the month
following his or her 65th birthday (which is such Participant's "Normal
Retirement Date"),
shall
become a Retired
Participant,
and the
Plan shall commence distribution of his or her Vested Accrued Normal Retirement
Benefit.
(b) If
an
Active Participant (or Former Active Participant) shall not
have
attained a 50% or 100% Vested Accrued Benefit on
or
prior to the date of his or her 65th birthday,
he or
she may become a Retired Participant pursuant to 2.8(c) at any time after he
or
she has accumulated sufficient additional Continuous Service (see 3.5(b)) to
attain a 50% or 100% Vested Accrued Benefit.
(c) An
Active
Participant (or Former Active Participant) (1) who has attained a Vested Accrued
Benefit on or prior to the date of his or her 65th birthday, or (2) who
(pursuant to 2.8(b)) attains a Vested Accrued Benefit after his or her Normal
Retirement Date; and who, in either case, retires from active employment with
the Company on a “Deferred
Retirement Date”
(being
the first day of the month following the month in which his or her Normal
Retirement Date occurred), shall become a Retired Participant, and the Plan
shall commence distribution of his or her Vested Accrued Normal Retirement
Benefit.
(d) An
Active
Participant (or Former Active Participant) who retires from active employment
with the Company prior to his or her 65th birthday, but on or after the first
day of any month following the occurrence of both (1) the Participant's 55th
birthday, and (2) his or her completion of at least 15 years of Continuous
Service (or his or her being expressly deemed in this Plan to have completed
15
years of Continuous Service solely for purposes of eligibility for Early
Retirement), which first day of any month is an "Early
Retirement Date",
shall
become a Retired Participant, and
the
Plan shall commence distribution of his or her Early
Retirement Benefit.
(e) An
Active
Participant (or Former Active Participant) whose employment terminates, or
whose
employment previously terminated, under circumstances described in 2.5(a)
through 2.5(e), or in 2.6, shall become a Retired Participant, and the Plan
shall commence distribution of his or her Vested Accrued Benefit, effective
at
the Participant’s Early, Normal, or Deferred, Retirement Date, whichever applies
under 2.5 or 2.6, and 2.8, to such Participant. (Hereinafter in this Plan,
the
term “Retirement
Date”
is
sometimes used to refer to the Early, Normal, or Deferred, Retirement Date
on
which a Participant’s Early, Normal, or Deferred Retirement Benefit commenced
(or would have commenced).
(f) A
Participant who is receiving LTD Benefits (2.7) shall become a Retired
Participant, and the Plan shall commence distribution of his or her Vested
Accrued Benefit, effective at the Participant’s Early, Normal, or Deferred,
Retirement Date, whichever shall first occur following the later to occur of
(a)
the Participant's termination of employment, or (b) the cessation of the
Participant's eligibility to continue to receive LTD Benefits. Solely for
purposes of the Participant's eligibility to commence to receive benefits at
an
Early Retirement Date, such Participant shall be deemed to have 15 years of
Continuous Service upon the later to occur of (a) the Participant's termination
of employment, or (b) the cessation of the Participant's eligibility to continue
to receive LTD Benefits.
2.9 Notwithstanding
any provision in this Article II regarding the date on which the Plan shall
commence to pay a Participant’s Retirement or Vested Accrued Benefit, the
commencement of payment of any benefit under the Plan is subject to the
provisions of 4.11 regarding the requirement of Internal Revenue Code
(“IRC”)
§ 409A(a)(2)(B)(i)
that payment of benefits be delayed for six months under specified
circumstances.
ARTICLE
3
BENEFIT
ACCRUAL
In
this
Supplemental Plan, the term “Accrued
Benefit”
means
the benefit determined pursuant to the application of the provisions of 3.1
through 3.5.
3.1 Gross
Accrued Benefit.
Each
Active Participant shall accrue a gross monthly benefit (subject to reduction
as
provided in 3.2 below), stated as a Normal Annuity beginning on his or her
Normal Retirement Date, equal to the product of (a) multiplied by
(b):
(a) 1.85%
of
his or her Final Average Monthly Earnings;
(b) his
or
her years of Continuous Service, subject to a maximum of
35 years.
The
gross
monthly Accrued Benefit thus determined shall be reduced as provided in 3.2
to
determine the net monthly benefit payable under this Supplemental Plan to the
Participant who retires on or after his or her Normal Retirement
Date.
Notwithstanding
the foregoing, in the case of a Former Active Participant described in 2.4,
the
gross monthly Accrued Benefit shall be calculated based on Final Average Monthly
Earnings and Continuous Service as of the date such Participant ceased to be
an
Active Participant.
The
gross
monthly Accrued Benefit determined above shall be subject to recalculation
in
the event the Participant's Final Average Earnings are recalculated as described
in 3.3.
3.2 Offsets
to the Accrued Benefit.
The
gross Accrued Benefit determined in 3.1 shall be reduced by the sum of (a)
plus
(b):
(a) The
Participant's "Accrued Benefit" under the Matthews International Corporation
Employees Retirement Plan ("Employees
Retirement Plan")
payable in the Normal Annuity form (under Section 7.5 of the Employees
Retirement Plan) commencing at his or her actual Early or Normal Retirement
Date
under this Supplemental Plan (or, if applicable, commencing as soon after the
Participant's Early Retirement Date under this Supplemental Plan as such benefit
can commence under the early retirement rules of the Employees Retirement Plan).
If a portion of a Participant's Continuous Service under 3.5 relates to service
with a wholly-owned subsidiary when such subsidiary did not participate as
an
employer in the Employees Retirement Plan, the Participant's Employees
Retirement Plan "Accrued Benefit" shall nevertheless be calculated, solely
for
purposes of this 3.2(a), as if such service with the subsidiary were counted
as
Continuous Service for calculating benefits under the Employees Retirement
Plan.
(That is, the offset amount under this 3.2(a) will include an imputed Employees
Retirement Plan benefit attributable to such service with the wholly-owned
subsidiary.)
(b) The
maximum anticipated Social Security Primary Insurance Amount that would be
payable to the Participant beginning the month after his or her actual
65th birthday on the assumption that his or her earnings for FICA purposes
had always been in excess of the FICA wage base in any particular year up to
and
including the year in which his or her actual 65th birthday occurs.
However, where a Participant's benefits commence under this Supplemental Plan
at
an Early Retirement Date, it will be assumed, in calculating such Social
Security Primary Insurance Amount, that the Participant has no FICA wages after
such Early Retirement Date.
3.3 "Final
Average Monthly Earnings"
means
an amount equal to the average of the Participant's monthly "Earnings" for
the
highest 60 consecutive months during the 120 consecutive months
immediately preceding the earliest to occur of the events described in 2.3
or
the Participant's Normal Retirement Date. However, if a Participant's Earnings
are recalculated under 3.4 to reflect a reduction in deferred Management
Incentive Plan credits actually paid to such Participant, his or her
Final
Average Monthly Earnings
shall be
recalculated at the same time. Nevertheless, no such recalculation shall be
performed in any case following the occurrence of a Section 9
Event.
3.4 "Earnings":
Except
as provided in the second and third sentences of this 3.4, Earnings
means
regular basic salary and incentive compensation at the time it is earned and
paid in the ordinary course, or, if payment of any earned amount is deferred,
at
the time such salary or incentive compensation would have been paid in the
ordinary course had payment of such amount not been deferred. As such, Earnings
includes the principal amount of any deferred credits assigned to the
Participant under the Company's Management Incentive Program as of the date
on
which such principal amount of deferred credits is assigned. However, if the
said principal amount assigned to the Participant is reduced pursuant to the
provisions for negative adjustments under the Management Incentive Program,
then
the Participant's Earnings shall be reduced, for purposes of this Supplemental
Plan, to reflect the reduction of said principal amount of such deferred credits
as of the date on which the reduction under the Management Incentive Plan is
made. "Earnings" shall not
include
severance payments or allowances, profit-sharing distributions, expense
allowances, directors' fees, stock-related rights (both stock options and stock
appreciation rights) or any other form of additional compensation.
3.5 "Continuous
Service"
means
(a) For
purposes of calculating the Accrued Benefit pursuant to 3.1(b), the sum (in
full
years and months, with partial months rounded up) of all periods of an
Employee's service with the Company from his or her employment date (including
periods during which an Employee is receiving LTD Benefits) to the earliest
to
occur of the events described in 2.3 or his or her Normal Retirement Date.
However, upon the occurrence of a Section 9 Event, each Active Participant
(including each Officer who becomes an Active Participant, pursuant to 2.2(b)
upon occurrence of such Section 9 Event) shall be credited with additional
service equal to the lesser of (i) five years, or (ii) the period of
years between the Section 9 Event and such Active Participant's Normal
Retirement Date. An Employee's service with a wholly-owned subsidiary of the
Company shall be counted as Continuous Service for purposes of the Plan
effective with the later of (a) the Employee's employment date, or (b) the
date
the Company acquired 100% ownership of such subsidiary. (Nevertheless, not
more
than 35 years of Continuous Service shall be counted under 3.1
(b).)
(b) Solely
for purposes of determining the Participant's vested percentage under 2.5(a),
an
Employee's service with the Company (as otherwise described in 3.5(a)) after
his
or her Normal Retirement Date shall be counted in the computation of his or
her
completed years of Continuous Service.
3.6 Application
of Vested Percentage.
If
applicable, a Participant’s Vested Accrued Benefit shall be determined pursuant
to 2.5, and the Accrued Benefit determined pursuant to 3.1 and 3.2 shall be
reduced to the Vested Accrued Benefit as 2.5 may provide.
ARTICLE
4
AMOUNT
AND PAYMENT OF BENEFITS
4.1 Amount
of Normal Retirement Benefit.
(a) The
Normal
Retirement Benefit
payable
to a Retired Participant whose monthly benefits commence on his or her Normal
Retirement Date shall initially be the monthly amount equal to such
Participant's Accrued Benefit as initially determined under 3.1 less the
reductions determined under 3.2, and multiplied by the Participant's vested
percentage under 3.6.
(b) Notwithstanding
4.1(a), should a Retired Participant's Vested Accrued Normal Retirement Benefit
be recalculated pursuant to 3.1, and the result of such recalculation is a
reduction of more than $100 in the monthly benefit, the Vested Accrued Normal
Retirement Benefit payable to the Retired Participant shall be accordingly
reduced prospectively.
(c) A
Participant's Accrued Normal Retirement Benefit shall not increase by reason
of
additional Continuous Service or Earnings after his or her Normal Retirement
Date. (See 3.5(b), however, regarding post-Normal Retirement Date Continuous
Service being counted for purposes of determining a Participant's vested
percentage in his or her Accrued Normal Retirement Benefit.)
4.2 Amount
of Deferred Retirement Benefit.
The
Deferred
Retirement Benefit
payable
to a Retired Participant who retires any time after his or her Normal Retirement
Date shall be equal to the monthly amount of such Participant's Accrued Normal
Retirement Benefit determined pursuant to 4.1 at his or her Normal Retirement
Date, but multiplied by his or her vested percentage at his or her Deferred
Retirement Date. Deferred Retirement Benefits shall not be actuarially increased
to account for the fact that the Participant continued in active service beyond
his or her Normal Retirement Date and did not retire until a later
date.
4.3 Amount
of Early Retirement Benefit.
(a) The
Early
Retirement Benefit
payable
to a Retired Participant who is entitled to receive benefits commencing at
an
Early Retirement Date shall be the monthly amount equal to: his or her Accrued
Benefit determined under 3.1 less the reductions determined under 3.2, the
result multiplied by the appropriate percentage in accordance with the following
schedule:
|
Schedule
of Early Retirement Factors
|
|
|
Number
of Whole Years Between Early
Retirement
Date and Normal Retirement
Date
|
Percentage
|
|
|
0
|
100%
|
|
|
1
|
97
|
|
|
2
|
94
|
|
|
3
|
91
|
|
|
4
|
88
|
|
|
5
|
85
|
|
|
6
|
82
|
|
|
7
|
79
|
|
|
8
|
76
|
|
|
9
|
73
|
|
|
10
|
70
|
|
Straight-line
interpolation of these percentages will be employed for fractional years. In
the
case of an Active Participant who, pursuant to 2.6, is presumed to be five
years
older than his or her actual age for purposes of eligibility to commence receipt
of benefits, the foregoing schedule shall be applied based on such Participant's
attributed age. (Thus, for example, an Active Participant who, pursuant to
2.6,
becomes eligible to receive benefits commencing on the first day of the month
following his or her actual 57th birthday, would be presumed to have
attained age 62, and to have commenced benefits, three whole years prior to
his or her Normal Retirement Date, with an applicable Early
Retirement Factor
of
91%.).
(b) In
addition to the Early Retirement Benefit paid to a Retired Participant under
4.3(a), such Retired Participant (other than one who retired from the status
of
Former Active Participant) shall also receive, until (but including) the month
in which his or her actual 65th birthday occurs (or earlier death), a
Social Security Supplement equal to the maximum anticipated Social Security
Primary Insurance Amount that would be payable to the Participant beginning
the
month following the month of his or her actual 65th birthday, as the same
is calculated pursuant to 3.2. Thus, for example, an Active Participant who
retired immediately following his or her 55th
birthday
would receive an Early Retirement Benefit of 70% of the amount calculated
pursuant to 3.1 and 3.2, plus a Social Security Supplement equal to 100% of
the
reduction for the maximum anticipated Social Security Primary Insurance Amount
calculated pursuant to 3.2.
(c) Where,
pursuant to 2.6, an Active Participant's benefits commence under this
Supplemental Plan at an Early Retirement Date but prior to the Participant's
actual attainment of age 55, so that the Participant is not then eligible
to commence to receive an immediate early retirement pension under
Section 4.3 or 4.4 of the Employees Retirement Plan, then, in addition to
the Early Retirement Benefit under 4.3(a) and the Social Security Supplement
under 4.3(b), the Participant shall also receive an Early Retirement Supplement
equal to the early retirement benefit that would have been payable to such
Participant under the Employees Retirement Plan (based on the Participant’s
accrued benefit under the Employees Retirement Plan as of the actual date of
termination of employment) if the Participant had attained the actual age of
55.
Such Early Retirement Supplement shall be payable until the earliest month
for
which the corresponding early retirement benefit is actually payable under
the
Employees Retirement Plan (or would be payable upon timely application
therefor). Thus, for example, a Participant, entitled under 2.6, who commenced
to receive an Early Retirement Benefit under this Plan commencing immediately
following his or her 50th
birthday
(but assumed age 55) would initially receive: (i) an Early Retirement
Benefit of 70% of the amount calculated pursuant to 3.1 and 3.2 (including,
in
the 3.2 reduction, the amount of the Employees Retirement Plan early retirement
benefit), plus (ii) a Social Security Supplement equal to 100% of the
reduction for the maximum anticipated Social Security Primary Insurance Amount
calculated pursuant to 3.2, plus (iii) an Early Retirement Supplement equal
to 100% of the early retirement benefit that would be payable, commencing at
the
Participant's actual age 55, under the Employees Retirement
Plan.
4.4 Election
of Form of Payment.
In
advance of initially satisfying the requirements of 2.1 or 2.2 to become an
Active Participant in this Supplemental Plan, an Officer may, but is not
required to, irrevocably elect the form of payment that will apply to him or
her
at Retirement.
(a)
(i) A
Participant who is married at the time he or she makes an election of the form
of payment, may elect the Normal Annuity Form, provided that his or her Spouse,
at the time such election is made, shall have filed with the Compensation
Committee, accompanying the Participant's election, the Spouse's irrevocable
written consent to such election, which irrevocable written consent such Spouse
shall have acknowledged under oath before a notary public or other person
officially empowered to administer oaths and attest to the same.
(ii) If
such
Participant has so elected the Normal Annuity Form, and at his or her Retirement
Date is married to the Spouse who so consented to such Participant's election
of
the Normal Annuity Form, then benefits will be paid to such Participant in
the
Normal Annuity form. Benefits will also be paid to such Participant in the
Normal Annuity form if such Participant is unmarried on his or her Retirement
Date. If, on his or her Retirement Date, such Participant is married to a Spouse
other than the individual who consented to the election of the Normal Annuity
form, then benefits will be paid to such Participant in the Joint and 50%
Surviving Spouse Annuity Form.
(b) If
a
Participant has elected the Joint and 66-2/3 Surviving Spouse Annuity Form,
such
Participant will receive benefits in the Joint and 66-2/3 Surviving Spouse
Annuity Form if married at the Retirement Date. If such Participant is unmarried
on his or her retirement Date, benefits will be paid in the Normal Annuity
Form.
(c) Any
Participant's election or consent of the Participant's Spouse to an election
made hereunder shall be made on such forms or otherwise as the Compensation
Committee shall prescribe.
(d) Pursuant
to IRS Notice 2005-1, Q&A 19(c) and the Preamble to Proposed Treasury
Regulation § 1.409A-1 et seq., XI.C. (70 Fed. Reg. 57957, col. 3), an
individual who is an Active or Former Active Participant as of September 13,
2006, may irrevocably elect, on a form prescribed by and filed with the
Compensation Committee, another
form of payment with respect to his or her retirement benefit under the Plan,
irrespective of whether or not the Participant shall have earlier filed,
pursuant to 4.4(a) or (b), such an election prior to the effective date of
his
participation in the Plan. However, to make an election pursuant to this 4.4(d),
the Participant must file the election form with the Committee no later than
December 31, 2006.
(e) An
Officer who does not make an election, pursuant to 4.4 (a), (b) or (d), of
the
form of payment, shall receive benefits under the Normal Annuity Form or the
Joint and 50% Surviving Spouse Annuity Form, whichever applies under 4.5 or
4.6
at his or her Retirement Date.
(f) For
purposes of the Plan, the term "Spouse" means the individual to whom a
Participant is lawfully married at the time such Participant elects the form
of
payment pursuant to 4.4(a), (b) or (d), or the individual to whom such
Participant is lawfully married at his or her Retirement Date, whichever the
context so requires. Thus, for example, where a Participant who is married
on
his or her Retirement Date receives benefits in the Joint and 50% Surviving
Spouse Annuity Form, and the Participant later dies while either unmarried
or
married to an individual who was not his or her Spouse on the Participant's
Retirement Date, but is survived by the individual who was his or her Spouse
on
the Participant's Retirement Date, then the 50% Surviving Spouse Annuity would
be payable to such individual (who was his or her Spouse on the Participant's
Retirement Date) after the death of such Participant (whether or not the
Participant and such individual were still married at the time of the
Participant's death).
4.5 Normal
Annuity Form.
If a
Participant is unmarried on his or her Retirement Date, such Retired
Participant's Vested Accrued Benefit shall be paid on the Normal Annuity Form
(irrespective of any prior election by the Participant). The Normal Annuity
Form
shall be a life annuity which provides for monthly payments to the Participant
beginning on his or her Normal, Early or Deferred Retirement Date or, as
provided in 4.11, beginning six months after such Retirement Date, and
continuing to the first day of the month in which his or her death occurs.
The
monthly payments to the Retired Participant shall be level in amount except
for
(i) any months for which the additional temporary Social Security
Supplement under 4.3(b) is payable to the Participant, (ii) any month for
which the additional temporary Early Retirement Supplement under 4.3(c) is
payable to the Participant, (iii) any month in which an Excise Tax Gross-Up
payment is made under 4.10, (iv) prospective reduction in the level monthly
payment pursuant to 4.1(b), or (v) if 4.11 applies to delay commencement of
payment for six months, the first month's payment pursuant to the provisions
of
4.11(a).
4.6 Actuarial
Equivalent.
Where,
pursuant to 4.7 or 4.8, benefits are paid in the Joint and 50% Surviving Spouse
Annuity Form or the Joint and 66-2/3% Surviving Spouse Annuity Form, the amount
of benefits payable under either such Form shall be the Actuarial Equivalent
of
the Normal Annuity Form. For purposes of this Supplemental Plan, Actuarial
Equivalent means an annuity benefit of equal value to another benefit on the
basis of eight percent (8%) interest per annum and mortality under the 1984
Unisex Pension Mortality Table.
4.7 Joint
and 50% Surviving Spouse Annuity Form.
If a
Participant is married on his or her Retirement Date, and shall not have elected
a different form of payment pursuant to 4.4, such Retired Participant's Vested
Accrued Benefit shall be paid on the Joint
and
50% Surviving Spouse Annuity Form,
which
shall be the Actuarial Equivalent of the Normal Form. Such form provides for
monthly payments to the Participant beginning on his or her Normal, Early or
Deferred Retirement Date or, as provided in 4.11, beginning six months after
such Retirement Date and continuing to the first day of the month in which
occurs the death of the survivor of the Participant and his or her Spouse.
The
monthly payments shall be payable during the lifetime of the Participant and
upon his or her death, 50% of such monthly payment shall be payable to his
Spouse, if then living (the “Surviving
Spouse”),
for
the Spouse's lifetime. The monthly payments to the Retired Participant and/or
Surviving Spouse shall be level in amount except for (i) any months for
which the additional temporary Social Security Supplement under 4.3(b) is
payable to the Participant, (ii) any month for which the additional
temporary Early Retirement Supplement under 4.3(c) is payable to the Participant
or Surviving Spouse, (iii) any month in which an Excise Tax Gross-Up
payment is made under 4.10, (iv) prospective reduction in the level monthly
payment pursuant to 4.1(b), or (v) if 4.11 applies to delay commencement of
payment for six months, the first month's payment pursuant to the provisions
of
4.11(a).
4.8 Joint
and 66-2/3% Surviving Spouse Annuity Form.
If a
Participant is married on his or her Retirement Date, and shall have so elected
pursuant to 4.4, such Retired Participant's Vested Accrued Benefit shall be
paid
on the Joint and 66-2/3% Surviving Spouse Annuity Form, which shall be the
Actuarial Equivalent of the Normal Form. Such form provides for monthly payments
to the Participant beginning on his or her Normal, Early or Deferred Retirement
Date or, as provided in 4.11, beginning six months after such Retirement Date
and continuing to the first day of the month in which occurs the death of the
survivor of the Participant and his or her Spouse. The monthly payments shall
be
payable during the lifetime of the Participant and upon his or her death,
66-2/3% of such monthly payment shall be payable to his Spouse, if then living,
for the Spouse's lifetime. The monthly payments to the Retired Participant
and/or Spouse shall be level in amount except for (i) any months for which
the additional temporary Social Security Supplement under 4.3(b) is payable
to
the Participant, (ii) any month for which the additional temporary Early
Retirement Supplement under 4.3(c) is payable to the Participant, (iii) any
month in which an Excise Tax Gross-Up payment is made under 4.10,
(iv) prospective reduction in the level monthly payment pursuant to 4.1(b),
or (v) if 4.11 applies to delay commencement of payment for six months, the
first month's payment pursuant to the provisions of 4.11(a).
4.9 Termination
of Benefits for Competition or Detrimental Conduct.
Notwithstanding 4.4 or otherwise, except as provided below in this 4.9, a
Retired Participant's benefit payments hereunder shall permanently cease and
be
forfeited if the Compensation Committee determines:
(a) that
such
Retired Participant:
1.
has
entered into competition with the Company or any of its subsidiaries, including,
without limiting the generality of the foregoing, acts of direct competition,
soliciting customers or employees, or working as an employee, agent or
consultant for a competitor or customer; or
2.
has
engaged in other conduct detrimental to the Company, including, but not limited
to, disclosing the Company's specific operating practices, product formulas,
customer information, pricing formulas and/or technical know-how developed
by
the Company;
and
(b) that
such
competition or other detrimental conduct occurred within five years after the
Retired Participant's Retirement Date.
(c) However,
the foregoing provisions shall not apply in the case of any Participant whose
employment terminates, whether voluntarily, involuntary, or by mutual agreement,
at any time following the occurrence of a Section 9 Event.
4.10 Excise
Tax Gross-Up.
In the
event that any payment made to a Participant by or for the Company under this
Supplemental Plan, or under any other plan or compensation program maintained
by
the Company (including, for example but without limitation, the Management
Incentive Program, the 1992 Stock Incentive Plan, or any successor plan or
program), is subject to the excise tax imposed by IRC § 4999 (the
"Excise
Tax")
(any
such payment, or part thereof, subject to Excise Tax being a "Parachute
Payment"),
then
the Company or the Trust shall pay such Participant an additional amount (the
"Gross-Up") to compensate the Participant for the economic cost of (i) the
Excise Tax on the Parachute Payment, (ii) the U.S., state and local income
tax (as applicable) on the Gross-Up, and (iii) the Excise Tax on the
Gross-Up. The calculation shall insure that the Participant, after receipt
of
the Parachute Payment and the Gross-Up and the payment of taxes thereon, will
be
in approximately the same economic position after all taxes as if the Parachute
Payment had been subject only to income tax at the marginal rate. For purposes
of determining the amount of the Gross-Up, the Participant shall be deemed
to
pay U.S., state and local income taxes at the highest marginal rate of taxation
in the calendar year in which the Parachute Payment is to be made. State and
local taxes shall be determined based upon the state and locality of the
Participant's domicile on the date of the Participant's termination of service
with the Company. The determination of whether such Excise Tax is payable and
the amount thereof shall be based upon the opinion of tax counsel selected
by
the Company and acceptable to the Participant. If such opinion is not accepted
by the Internal Revenue Service upon audit, then appropriate adjustments shall
be computed (without interest but with Gross-Up, if applicable) by such tax
counsel based on the final amount of the Excise Tax so determined.
4.11 Six
Month Delay in Commencement of Payment of Benefits.
(a) Except
as
provided in 4.11(c) or (d), the Plan may in no event commence payment of
benefits to, or with respect to, a Participant earlier than the first day of
seventh (7th) calendar month following the date on which the Participant's
termination of employment occurs (such first day of the seventh month being
the
"Delayed
Payment Date").
If,
under the circumstances of a Participant's termination employment, the
Participant's benefits would otherwise have commenced prior to the Delayed
Payment Date, the first payment of benefits made by the Plan shall include
all
payments that would, but for this 4.11, otherwise already have been made prior
to the Delayed Payment Date. For example, a Participant retires effective June
30, having attained age 65 on June 18. Her Normal Retirement Date is July 1,
when monthly benefit payments would normally commence. However, under this
4.11,
her Delayed Payment Date is the following January 1. The monthly payment made
on
January 1 would equal the sum of seven monthly payments (the January payment
and
the delayed payments from July through December, inclusive).
(b) If
a
Participant to whom 4.11(a) applies dies after his or her Retirement Date but
before the Delayed Payment Date, any payments that, but for 4.11(a), would
have
been made to the Participant prior to his or her death, shall be disposed of
as
follows:
(i) If
the
Participant's benefits were to be paid in either of the Joint and Surviving
Spouse Annuity Forms, the delayed payments due the Participant, as well as
any
delayed payments due to the surviving Spouse, will be paid to the Surviving
Spouse as part of the first monthly benefit payment made to the Spouse in the
month of the Delayed Payment Date.
(ii) If
the
Participant's benefits were to be paid in the Normal Annuity Form, the payments
due the Participant will be paid to the personal representative of the
Participant's estate.
(c) Notwithstanding
4.11(a), payment of benefits shall not be delayed for six months where the
Participant's termination of employment was by reason of his or her
death.
(d) Also
notwithstanding 4.11(a), payment of benefits shall not be delayed if, at the
time of termination of employment, the Participant is not classified as a
"specified employee" within the meaning IRC § 409A(2)(B)(i) and the
regulations issued thereunder.1
ARTICLE
5
PRERETIREMENT
SURVIVING SPOUSE BENEFITS
5.1
(a) If
an
Active Participant or Former Active Participant shall terminate employment
because of death after he or she shall have attained at least ten (10) Years
of
Continuous Service, or any other Participant who, pursuant to 2.5 2.6 or 2.7,
has terminated employment but is entitled to receive a Vested Accrued Benefit
under the Plan, shall die prior to the date on which such benefits would have
commenced; and, in any case, such Participant is survived by a Spouse (also
a
“Surviving
Spouse”),
then
such Surviving Spouse shall be entitled to receive a Surviving Spouse Benefit.
Such Surviving Spouse Benefit shall commence to be paid beginning on the
earliest Retirement Date (i.e., an Early, Normal, or Deferred, Retirement Date,
as the case may be) on which the Participant's benefits would have commenced
had
the Participant terminated employment on the date of his or her death survived
until such Retirement Date, provided the Surviving Spouse is living on such
Retirement Date.
(b) The
following examples illustrate the application of 5.1(a):
(i) An
Active
Participant dies at age 57 with 15 years of Continuous Service, and leaves
a
Surviving Spouse. A Surviving Spouse Benefit shall be paid to such Surviving
Spouse beginning on the first day of the month following the Participant's
death
(such date, had the Participant terminated employment on the date of his or
her
death, being the Participant's Early Retirement Date).
(ii) An
Active
Participant dies at age 52 with 15 years of Continuous Service, and leaves
a
Surviving Spouse. A Surviving Spouse Benefit shall be paid to such Surviving
Spouse beginning on the first day of the month following the date the
Participant would have attained age 55 had he or she survived to that date
(such
date being the Participant's Early Retirement Date), provided that such
Surviving Spouse is alive on such benefit commencement date.
(iii) An
Active
Participant dies at age 57 with 10 years of Continuous Service, and leaves
a
Surviving Spouse. A Surviving Spouse Benefit shall be paid to such Surviving
Spouse beginning on the Participant's Normal Retirement Date, provided that
such
Surviving Spouse is alive on such benefit commencement date. Having died prior
to his or her Normal Retirement Date with less than 15 years of Continuous
Service, the Participant would not have been eligible to have benefits commence
at an Early Retirement Date. Likewise, the Surviving Spouse Benefit would be
calculated based the on Participant's 50% Vested Accrued Benefit because the
Participant was not 100% vested at the time of his or her death.
(iv) An
Active
Participant dies on his or her 65th birthday with six (6) years of Continuous
Service and leaves a Surviving Spouse. Inasmuch as the Participant had less
than
ten (10) years of Continuous Service at the time of his death and, therefore,
had no Vested Accrued Benefit, no Surviving Spouse Benefit is payable to the
Surviving Spouse.
5.2 If
the
Participant described in 5.1(a) had elected, pursuant to 4.4, the Joint and
66-2/3% Surviving Spouse Annuity Form, then the Plan shall pay the 66-2/3%
Surviving Spouse Annuity to the Participant's Surviving Spouse.
5.3 In
any
other such case, the Plan shall pay the 50% Surviving Spouse Annuity to the
Participant's Surviving Spouse.
ARTICLE
6
ADMINISTRATION
FINANCING
OF BENEFITS
6.1
(a) This
Supplemental Plan shall be administered by the Compensation Committee, which
shall have responsibility and authority to manage and control the operation
and
administration of the Plan. The Committee shall have complete and absolute
discretion to interpret and apply the terms and provisions of the
Plan.
(b) The
Company intends this Supplemental Plan to be an unfunded, nonqualified plan
primarily for the purpose of providing benefits for a select group of highly
compensated management employees of the Company, and is intended to qualify
as a
“top hat” plan under Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), §§ 201(2), 301(a)(3) and 401(a)(1). As such, the Plan is not
required to, and is not intended to be subject to, or be interpreted and
administered according to, inter alia, the provisions of ERISA, Title I, Parts
2, 3 and 4, nor the rules applicable to tax-qualified retirement plans set
forth
at IRC §§ 401
et
seq.
(c) The
following procedures shall govern the administration of claims under the
Plan.
(i) The
Compensation Committee shall determine the rights of any Participant to any
benefits hereunder. Any Participant who believes that he or she has not received
the benefits to which he is entitled under the Plan may file a claim in writing
with the Committee. The Committee shall, no later than 90 days after the receipt
of a claim (plus an additional period of 90 days if required for processing,
provided that notice of the extension of time is given to the claimant within
the first 90-day period), either allow or deny the claim in writing. If a
claimant does not receive written notice of the Committee’s decision on his
claim within the above-mentioned period, the claim shall be deemed to have
been
denied in full.
(ii) A
denial
of a claim by the Committee, wholly or partially, shall be written in a manner
calculated to be understood by the claimant and shall include:
(A) |
the
specific reasons for the denial;
|
(B) |
specific
reference to pertinent Plan provisions on which the denial is
based;
|
(C) |
a
description of any additional material or information necessary for
the
claimant to perfect the claim and an explanation of why such material
or
information is necessary; and
|
(D) |
an
explanation of the claim review procedure and the time limits applicable
to such procedures, including a statement of the claimant's right
to bring
a civil action under ERISA
§ 502(a).
|
(iii) A
claimant whose claim is denied (or his duly authorized representative) may
within 60 days after receipt of denial of a claim file with the Committee a
written request for a review of such claim. Prior
to the occurrence of a Section 9 Event,
if the
claimant does not file a request for review of his claim within such 60-day
period, the claimant shall be deemed to have acquiesced in the original decision
of the Committee on his claim, the decision shall become final and the claimant
will not be entitled to bring a civil action under ERISA § 502(a),
provided that after
the occurrence of a Section 9 Event,
the
claimant shall not be deemed to have acquiesced in the original decision of
the
Committee, nor shall the claimant be in any way limited in bringing a civil
action under ERISA § 502(a).
(iv) If
such
an appeal is so filed within such 60-day period, the Committee (or its delegate)
shall conduct a full and fair review of such claim. During such review, the
claimant (or the claimant's authorized representative) shall be given the
opportunity to review all documents that are pertinent to his claim and to
submit issues and comments in writing.
(v) The
Committee (or its delegate) shall mail or deliver to the claimant a written
decision on the matter based on the facts and the pertinent provisions of the
Plan within 60 days after the receipt of the request for review (unless special
circumstances require an extension of up to 60 additional days, in which case
written notice of such extension shall be given to the claimant prior to the
commencement of such extension). Such decision shall be written in a manner
calculated to be understood by the claimant, shall state the specific reasons
for the decision and the specific Plan provisions on which the decision was
based and shall, to the extent permitted by law, be final and binding on all
interested persons. If the decision on review is not furnished to the claimant
within the above-mentioned time period, the claim shall be deemed to have been
denied on review.
(vi) If
a
Participant's claim for benefits is denied in whole or in part prior
to the occurrence of a Section 9 Event,
such
Participant may file suit only in a state court located in Allegheny County,
Pennsylvania or federal court located in Allegheny County, Pennsylvania.
Notwithstanding, before such Participant may file suit in a state or federal
court, Participant must exhaust the Plan's administrative claims procedure.
If
any such judicial or administrative proceeding is undertaken, the evidence
presented will be strictly limited to the evidence timely presented
to
the Committee. In addition, any such judicial or administrative proceeding
must
be filed within six months after the Committee's final
decision.
(vii) If
the
claim for benefits of a Vested Participant(6.4(a)) is denied in whole or in
part
after
the occurrence of a Section 9 Event,
such
Participant shall not be in any way restricted by the provisions of 6.1(c)(vi)
in taking any steps to enforce his or her rights under the Plan. Further, the
Company shall be liable to reimburse any Vested Participant (6.4(a)) for
attorneys fees and other costs related to any litigation (or other proceeding),
or counsel and advice short of or preparatory to litigation (or other
proceeding), which the Vested Participant undertakes to enforce his or her
right
to receive benefits under the Plan following a refusal (in any form) by the
Company to pay such benefits.
6.2 The
Company shall bear the entire cost of benefits under this Supplemental Plan
as
well as the entire cost of administering the Plan.
6.3 This
Supplemental Plan will not be funded. The benefits under this Plan shall be
paid
from the general assets of the Company as due. Nevertheless, in the event the
Company creates an executive benefit security trust, "rabbi" trust, or similar
entity through which to set aside assets to provide for the payment of benefits
under this Supplemental Plan (or other benefits), whether pursuant to 6.4 or
otherwise, each monthly benefit payment made to a Retired Participant or
Surviving Spouse from such trust with respect to any benefit payable to such
Participant or Surviving Spouse under this Plan, shall reduce and discharge,
dollar for dollar, the Company's obligation hereunder to make such monthly
benefit payment to such Participant or Surviving Spouse. Similarly, any Gross-Up
payment made to a Retired Participant or Surviving Spouse from such trust shall
reduce and discharge, dollar for dollar, the Company's obligation hereunder
to
make such Gross-Up payment.
6.4
(a) Notwithstanding
6.3 but subject to the restriction in 6.4(b), prior to or immediately upon
the
occurrence of a Section 9 Event, the Company shall take the following
measures: The Company shall establish a trust of the kind and nature
contemplated under 6.3 (the "Trust").
The
trust agreement establishing such Trust shall provide that, prior to the payment
of all benefit liabilities under this Supplemental Plan, the Trust shall be
irrevocable except upon the bankruptcy or insolvency of the Company. Such trust
agreement shall also provide that initial trustee of the Trust, and any
successor trustee, shall at the time of appointment be one of the
50 largest banking institutions in the United States. The Company shall
transfer to the Trust liquid assets equal to the present value of all benefits
accrued under the Plan to the end of the calendar month in which the
Section 9 Event occurred or is expected to occur (whether or not such
benefits are otherwise then subject to future forfeiture under the terms of
the
Plan), with respect to all persons who are or were, on the date of the
Section 9 Event, Active Participants (including those who will become or
became Active Participants on the date of the Section 9 Event pursuant to
2.2(b), Former Active Participants, Retired Participants; and Surviving Spouses
who are receiving Surviving Spouse benefits, plus the additional present value
of benefits that could accrue to Active Participants, and be payable earlier,
from the attribution of five additional years of service, described in 3.5,
and
five additional years of age, described in 2.6 and 4.3; plus the present value
of the accrued benefits that would have accrued by any person who, by reason
of
then-current disabled status and operation of 2.2(c) could in the future qualify
as a Participant pursuant to 2.2(c), determined as such person had already
qualified for such benefit. (Such disabled persons and such persons who are
or
were, on the date of the Section 9 Event, Active Participants, Former Active
Participants, Retired Participants, and Surviving Spouses who are receiving
Surviving Spouse benefits, are hereinafter referred to collectively as
"Vested
Participants").
The
present value of the benefits described above shall be calculated by assuming
that retirement shall occur either immediately or at actual (or attributed)
age 55 (whichever occurs, or shall have occurred, first), no mortality or
turnover prior to retirement, post-retirement mortality based on the "applicable
mortality table" determined under IRC § 417(e)(3)(A)(ii)(I), and
interest at the "applicable interest rate" determined under
IRC § 417(e)(3)(A)(ii)(II) for the month in which the Section 9
Event occurs. The Company shall also transfer to the Trust liquid assets equal
to the present value of any Gross-Up payments it reasonably estimates shall
or
may become due by reason of the occurrence of the Section 9 Event, as well
as present value of the estimated costs of administering the Trust (including
trustee fees and expenses) and of administering the Plan through engagement
of
an independent administrator if deemed appropriate by the trustee. The Company
shall also provide the trustee with accurate and complete data regarding all
matters necessary to identify Vested Participants, calculate their accrued
benefits, and pay them, including (without limiting the generality of the
foregoing) data regarding the name, birthdate, current address, Social Security
number, employment date with the Company, and compensation in the current and
prior years of each such Vested Participant, as well as any information
necessary to enable the trustee to calculate or verify any Gross-Up payments
that may be due pursuant to 4.10.
(b) Notwithstanding
6.4(a), no amount shall be transferred to a trust or otherwise set aside for
the
purposes of providing benefits during any "restricted period" (as defined in
IRC
§ 409A(B(3)) with respect to the Employees Retirement Plan or any other
single-employer defined benefit plan sponsored by the Company or any member
of a
controlled group (within the meaning of IRC § 414(b) or (c)) that includes
the Company.
ARTICLE
7
AMENDMENT
OR TERMINATION OF THE PLAN
7.1 Amendment
of the Plan.
(a) The
Company reserves the right to modify or amend this Supplemental Plan from time
to time and to any extent that it may deem advisable. Any amendment shall be
made pursuant to a resolution duly adopted by the Compensation Committee. No
amendment shall in any manner (i) reduce the right to the present or future
receipt of an Accrued Benefit, Vested Accrued Benefit, or other benefit under
the Plan of any Participant to the extent that such right had accrued prior
to
the date the Compensation Committee approved such amendment, (ii) alter the
amount or payment of benefits under the Plan to any Participant who had become
a
Retired Participant prior to the date the Compensation Committee approved such
amendment, or (iii) otherwise apply to former Officers whose employment
with the Company had terminated without entitlement to a Plan benefit prior
to
the date the Compensation Committee approved such amendment. Otherwise, all
Participants claiming any interest under this Plan shall be bound by any
amendments.
(b) The
rights and benefits of each Participant or of any Surviving Spouse claiming
through such Participant, shall be determined in accordance with the provisions
of this Supplemental Plan in effect on the date (1) the Participant's employment
terminates, or (2) in the case of a Participant who is receiving LTD Benefits,
the Participant ceases to be eligible to continue to receive LTD Benefits,
whichever of (1) or (2) occurs later (such date being the "Participant's
Termination Date").
Except as otherwise specifically provided, any amendment to the Plan shall
have
no effect on, or application to, a Participant (or Surviving Spouse) where
such
Participant's Termination Date occurred prior to the effective date of such
amendment (including the 9/13/06 amendment date of this amended and restated
Supplemental Plan). Thus, any benefit being paid to a Retired Participant or
Surviving Spouse, and any Vested Accrued Benefit or Surviving Spouse Benefit
due
to be paid hereafter, pursuant to the terms of this Supplemental Plan, shall
continue to be paid, or shall be commenced, in accordance with all applicable
terms and provisions (including the amount, date of commencement and form of
payment thereof) of this Supplemental Plan as such plan was in effect on the
date of the Participant's Termination Date.
7.2 Termination
of the Plan.
This
Supplemental Plan may be terminated by the Company at any time. Such termination
shall be effected pursuant to a resolution duly adopted by the Board of
Directors. No such termination may impair the benefits of Participants. In
particular, no such termination shall in any manner (i) reduce the right to
the present or future receipt of an Accrued Benefit or other benefit under
the
Plan of any Participant to the extent that such right had accrued prior to
the
date the Board of Directors approved such termination, or (ii) alter the
amount or payment of benefits under the Plan to any Participant who had become
a
Vested Participant or Retired Participant prior to the date the Board of
Directors approved such termination. Benefits shall cease to accrue under the
Plan effective on the termination, but the Plan shall otherwise remain in force
for the purpose of administering the benefits accrued prior to the termination
according to the provisions of the Plan in force immediately prior to the
termination.
_________________________
1
In the
Company's case, it is almost certain that current Active Participants (Officers)
would be "specified employees" subject to delay in commencement of payment.
Non-specified employees would likely include only Former Active Participants