Exhibit 10 (H)
ARVIN INDUSTRIES, INC.
DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective January 1, 1997)
ARVIN INDUSTRIES, INC.
DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective January 1, 1997)
TABLE OF CONTENTS
Page
ARTICLE I ESTABLISHMENT AND PURPOSE 1
1.1. Establishment 1
1.2. Purpose 1
ARTICLE II DEFINITIONS 1
2.1. Accounting Date 1
2.2. Administrator 1
2.3. Board 2
2.4. Code 2
2.5. Committee 2
2.6. Company 2
2.7. Participant 2
2.8. Plan 2
2.9. Plan Year 2
2.10. Qualified Plan 2
2.11. Qualified Plan Company Matching Contribution 2
2.12. Qualified Plan Limits 2
2.13. Qualified Plan Salary Reduction Contribution 2
2.14. Salary Reduction Agreement 2
2.15. Supplemental Company Matching Contribution 3
2.16. Supplemental Salary Reduction Agreement 3
2.17. Supplemental Salary Reduction Contribution 3
2.18. Supplemental Subaccount 3
ARTICLE III ELIGIBILITY 3
ARTICLE IV SUPPLEMENTAL CONTRIBUTIONS 3
4.1. Supplemental Salary Reduction Contributions 3
4.2. Supplemental Salary Reduction Agreement 4
4.3. Supplemental Company Matching Contributions 4
ARTICLE V INVESTMENT OF SUPPLEMENTAL CONTRIBUTIONS 5
5.1. Deemed Investment 5
5.2. Actual Investment 5
ARTICLE VI DISTRIBUTIONS 6
6.1. Distributions 6
6.2. Accelerated Distributions 6
6.3. Financial Emergency 6
ARTICLE VII ADMINISTRATION OF THE PLAN 7
7.1. Administrator 7
7.2. General Powers of Administration 7
ARTICLE VIII AMENDMENT OR TERMINATION 7
8.1. Amendment or Termination 7
8.2. Effect of Amendment or Termination 7
ARTICLE IX GENERAL PROVISIONS 8
9.1. Participant's Rights Unsecured 8
9.2. General Conditions 8
9.3. No Guarantee of Benefits 8
9.4. No Enlargement of Employee Rights 8
9.5. Spendthrift Provision 8
9.6. Applicable Law 9
9.7. Incapacity of Recipient 9
9.8. Corporate Successors 9
9.9. Unclaimed Benefit 9
9.10. Limitations on Liability 9
9.11. Construction 9
ARVIN INDUSTRIES, INC.
DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective January 1, 1997)
Pursuant to rights reserved under Section 11.1 of the Arvin
Industries, Inc. Deferred Compensation Plan (the "Plan"), Arvin
Industries, Inc. hereby amends and completely restates the Plan,
effective as of January 1, 1997, to provide, in its entirety, as
follows:
ARTICLE I
ESTABLISHMENT AND PURPOSE
1.1. Establishment. Effective as of February 26, 1987, Arvin
Industries, Inc. (hereinafter "Company") established the ARVIN
INDUSTRIES, INC. DEFERRED COMPENSATION PLAN for executives
described herein.
1.2. Purpose. The Company maintains a profit sharing plan
known as the Arvin Savings Plan which is intended to meet the
requirements of a tax qualified defined contribution plan under
Section 401(a) of the Internal Revenue Code of 1986 (the "Code")
and a qualified cash or deferred arrangement under Code Section
401(k). Code Sections 401(a)(17), 401(k), 401(m) and 415 places
limitations on the maximum amount which may be credited to a
participant's account under a qualified defined contribution
plan. It is the purpose of this Plan to provide selected
executives with benefits that are reasonably comparable to the
benefits they would have received under the Savings Plan if it
were not for the limitations imposed by the Code. It is intended
that the Plan meet applicable exemption under Sections 201(2),
301(a)(3), 401(a)(1) and 4021(b)(6) of the Employee Retirement
Income Security Act of 1974 and under Department of Labor
Regulation 2520.104-23.
ARTICLE II
DEFINITIONS
Wherever used herein the following terms shall have the
meanings hereinafter set forth:
2.1. "Accounting Date" means the last day of each calendar
month.
2.2. "Administrator" means the administrative committee
appointed by the Company Board as administrator of the Qualified
Plan.
2.3. "Board" means the Board of Directors of the Company.
2.4. "Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any regulations promulgated
thereunder.
2.5. "Committee" means the Compensation Committee of the
Board.
2.6. "Company" means Arvin Industries, Inc. or, to the
extent provided in Section 9.8 below, any successor corporation
or other entity resulting from a merger or consolidation into or
with the Company or a transfer or sale of substantially all of
the assets of the Company.
2.7. "Participant" means an executive employee of the
Company who is a participant under the Qualified Plan and who is
covered under the Arvin Industries, Inc. Supplemental Retirement
Plan for Designated Management Employees as of the last day of
the Plan Year immediately preceding the Plan Year for which the
Salary Reduction Agreement relates.
2.8. "Plan" means this Arvin Industries, Inc. Deferred
Compensation Plan.
2.9. "Plan Year" means each calendar year.
2.10. "Qualified Plan" means the Arvin Savings Plan and
any successor or replacement cash or deferred arrangement.
2.11. "Qualified Plan Company Matching Contribution"
means the total of all matching contributions made by the Company
for the benefit of a Participant under and in accordance with the
terms of the Qualified Plan in any Plan Year.
2.12. "Qualified Plan Limits" mean the limits imposed,
at any time and from time to time, upon the amount of Qualified
Plan Salary Reduction Contributions or Qualified Plan Company
Matching Contributions that may be made on behalf of a
Participant by Section 401(a)(17), Section 401(k) (including any
limits imposed by the Company and Administrator to ensure
compliance with Section 401(k)), Section 401(m), Section 402(g)
and Section 415 of the Code.
2.13. "Qualified Plan Salary Reduction Contribution"
means the salary reduction contribution made by the Company for
the benefit of a Participant under and in accordance with the
terms of the Qualified Plan in any Plan Year.
2.14. "Salary Reduction Agreement" means the written
salary reduction agreement entered into by a Participant with a
Company pursuant to the Qualified Plan.
2.15. "Supplemental Company Matching Contribution" means
the matching contribution made by a Company for the benefit of a
Participant under and in accordance with the terms of this Plan
in any Plan Year.
2.16. "Supplemental Salary Reduction Agreement" means
the written agreement described in Section 4.2.
2.17. "Supplemental Salary Reduction Contribution" means
the salary reduction contribution made by a Company for the
benefit of a Participant under and in accordance with the terms
of this Plan in any Plan Year.
2.18. "Supplemental Subaccount" means the account
maintained by the Company under the Plan for a Participant that
is credited with amounts contributed under Section 4.1 and
Section 4.3 of the Plan. To the extent a Participant makes
different distribution elections in his Supplemental Salary
Reduction Agreements, the Administrator shall maintain two (2)
Supplemental Subaccounts for the Participant, one for his lump
sum elections and one for his installment elections.
ARTICLE III
ELIGIBILITY
A Participant who makes Qualified Plan Salary Reduction
Contributions and receives Qualified Plan Company Matching
Contributions, the total amounts of which are reduced by reason
of the application of the Qualified Plan Limits, shall be
eligible to participate in the Plan.
ARTICLE IV
SUPPLEMENTAL CONTRIBUTIONS
4.1. Supplemental Salary Reduction Contributions. The
Supplemental Salary Reduction Contribution to be made by the
Company for the benefit of a Participant for any Plan Year shall
be in an amount equal to (a) minus (b) where:
(a) equals the Qualified Plan Salary Reduction
Contribution that would have been allocated to the Qualified
Plan on behalf of the Participant for the Plan Year based on
the percentage (not in excess of 16%) salary reduction
designated by the Participant in his Supplemental Salary
Reduction Agreement for such Plan Year, without giving
effect to the Qualified Plan Limits; and
(b) equals the amount of the Qualified Plan Salary
Reduction Contribution actually allocated to the Qualified
Plan on behalf of the Participant for the Plan Year.
Supplemental Salary Reduction Contributions made for the
benefit of a Participant for any Plan Year shall be credited to
such Participant's Supplemental Subaccount as soon as practicable
after the last day of each calendar month during which the
deferred salary was earned.
4.2. Supplemental Salary Reduction Agreement. As a condition
to the Company's obligation to make a Supplemental Salary
Reduction Contribution for the benefit of a Participant pursuant
to Section 4.1, that Participant must execute a Supplemental
Salary Reduction Agreement. In the Supplemental Salary Reduction
Agreement, the Participant shall designate whether distribution
of the deferred amount shall be made in a single lump sum or in
substantially equal annual installments over ten (10) years. The
Supplemental Salary Reduction Agreement for any Plan Year shall
be made before the beginning of that Plan Year and shall remain
in full force and effect for subsequent Plan Years unless revoked
or modified by a Participant by written instrument delivered to
the Administrator prior to the beginning of the Plan Year in
which such revocation or modification is to be effective.
4.3. Supplemental Company Matching Contributions. The
Supplemental Company Matching Contribution to be made by the
Company for the benefit of a Participant for any Plan Year shall
be in an amount equal to (a) minus (b) where:
(a) equals the Qualified Plan Company Matching
Contribution that would have been allocated to the Qualified
Plan on behalf of the Participant for the Plan Year without
giving effect to any reduction in the Participant's
Qualified Plan Salary Reduction Contribution required by the
Qualified Plan Limits; and
(b) equals the amount of the Qualified Plan Company
Matching Contribution actually allocated to the Qualified
Plan on behalf of the Participant for the Plan Year.
Supplemental Company Matching Contributions made for the
benefit of a Participant for any Plan Year shall be credited to
such Participant's Supplemental Subaccount as soon as practicable
after the last day of each calendar month.
ARTICLE V
INVESTMENT OF SUPPLEMENTAL CONTRIBUTIONS
5.1. Deemed Investment. Unless actual investment options are
provided to Participants under Section 5.2 of this Plan, amounts
credited hereunder to the Supplemental Subaccount of a
Participant shall be treated as if they were actually invested in
the Qualified Plan Subaccount of the Participant and shall be
subject to the same Participant investment elections, and
credited with gains and losses at the same time and in the same
manner, as are applicable to amounts invested in the Qualified
Plan Subaccount of such Participant; provided, however, that the
adjustments shall only be required to be made on the Accounting
Dates. A change by a Participant in the investment election
applicable to amounts in his Qualified Plan Subaccount, or a
direction to transfer amounts in his Qualified Plan Subaccount
among investment funds maintained under the Qualified Plan, shall
also apply to amounts credited to his Supplemental Subaccount and
shall be effective at the same time that such change in election
or direction to transfer is applicable to his Qualified Plan
Subaccount.
5.2. Actual Investment. In lieu of crediting earnings and
losses under Section 5.1 of this Plan, the Administrator may
provide for investment funds into which Participants may direct
the investment of their Supplemental Subaccount balances. To the
extent such investment funds are provided to Participants:
(a) each Participant shall be required to elect in
writing the manner and extent to which his Supplemental
Subaccount shall be invested in each of the available
investment funds; and
(b) such Participant's Supplemental Subaccount shall
be credited with income, gain or loss as though it had been
invested in the investment fund or funds as directed by that
Participant.
Except as may otherwise be communicated by the Administrator
to the Participants, the rules regarding the timing and manner of
electing investment funds (including changing elections or
transferring amounts from one investment fund to another) and of
allocating income, gains and losses to Supplemental Subaccounts
shall be the same as is set forth in the Qualified Plan from time
to time; provided, however, that the adjustments shall only be
required to be made on the Accounting Dates. Notwithstanding
anything in this Section 5.2 to the contrary, each Participant's
interest in his Supplemental Subaccount shall be unfunded,
neither the Company, the Administrator nor the Trustee of the
Arvin Industries, Inc. Employee Benefit Trust shall be under any
legal obligation to actually invest a Participant's Supplemental
Subaccount as directed by that Participant, and that Participant
shall have no right, title or interest in or to his Supplemental
Subaccount except as may otherwise be provided under the Arvin
Industries, Inc. Employee Benefit Trust.
ARTICLE VI
DISTRIBUTIONS
6.1. Distributions. All amounts credited to a Participant's
Supplemental Subaccount, including gains and losses credited in
accordance with Section 5.1 or Section 5.2 of the Plan, shall be
distributed to that Participant (or, in the event that
Participant's termination of employment is caused by his death,
to his beneficiary under the Qualified Plan) as soon as is
practicable in the calendar year immediately following the
calendar year during which occurred the termination of the
Participant's employment with the Company for any reason. The
manner of distribution shall be determined in accordance with the
Participant's Supplemental Salary Reduction Agreements.
6.2. Accelerated Distributions. Notwithstanding anything
contained in this Plan to the contrary, the Committee may, in its
sole and absolute discretion, direct an immediate distribution of
the amounts credited to a Participant's Supplemental Subaccount
if the Committee determines that such action is in the best
interest of the Company, the Participants and their
beneficiaries.
6.3 Financial Emergency. The Committee, at its sole discre
tion, may alter the timing or manner of payment of deferred
amounts in the event that the Participant establishes, to the
satisfaction of the Committee, severe financial hardship. In
such event, the Committee may --
(a) provide that all, or a portion of, the amount
previously deferred by the Participant immediately be
paid in a lump sum cash payment;
(b) provide that all, or a portion of, installments payable
over a period of time be paid in a lump sum; or
(c) provide for such-other installment payment schedules as
it deems appropriate under the circumstances;
as long as the amount distributed shall not be in excess of that
amount which is necessary for the Participant to meet the
financial hardship.
Severe financial hardship will be deemed to have occurred in
the event of the Participant's impending bankruptcy, a
dependent's long and serious illness, or other events of similar
magnitude. The Committee's decision in passing on the severe
financial hardship of the Participant and the manner in which, if
at all, the payment of deferred amounts shall be altered or
modified shall be final, conclusive, and not subject to appeal.
ARTICLE VII
ADMINISTRATION OF THE PLAN
7.1. Administrator. The Administrator shall be responsible
for the general operation and administration of the Plan and for
carrying out the provisions thereof.
7.2. General Powers of Administration. All provisions set
forth in the Qualified Plan with respect to the administrative
powers and duties of the Administrator, expenses of
administration, and procedures for filing claims shall also be
applicable with respect to this Plan. The Administrator shall be
entitled to rely conclusively upon all tables, valuations,
certificates, opinions and reports furnished by any actuary,
accountant, counsel or other person employed or engaged by the
Administrator with respect to this Plan or the Qualified Plan.
ARTICLE VIII
AMENDMENT OR TERMINATION
8.1. Amendment or Termination. The Company intends the Plan
to be permanent but reserve the right to amend or terminate the
Plan when, in the sole opinion of the Company, such amendment or
termination is advisable. Any such amendment or termination shall
be made pursuant to a resolution of the Board and shall be
effective as of the date of such resolution.
8.2. Effect of Amendment or Termination. No amendment or
termination of this Plan shall directly or indirectly reduce the
balance of any Supplemental Subaccount held hereunder as of the
effective date of such amendment or termination. Upon termination
of this Plan, distribution of amounts in each Supplemental
Subaccount shall be made to the Participant or his beneficiary in
the manner and at the time described in Article VI of the Plan.
No additional credits of Supplemental Salary Reduction
Contributions or Supplemental Company Matching Contributions
shall be made to the Supplemental Subaccount of a Participant
after termination of the Plan, but the Company shall continue to
credit gains and losses to each Supplemental Subaccount pursuant
to Section 5.1 or Section 5.2, until the balance of such
Supplemental Subaccount has been fully distributed to each
Participant or his beneficiary.
ARTICLE IX
GENERAL PROVISIONS
9.1. Participant's Rights Unsecured. The Plan at all times
shall be entirely unfunded and, except as provided under the
Arvin Industries, Inc. Employee Benefit Trust, no provision shall
at any time be made with respect to segregating any assets of the
Company for payment of any distributions hereunder. The right of
a Participant or his designated beneficiary to receive a
distribution hereunder shall be an unsecured claim against the
general assets of the Company, and neither the Participant nor
his designated beneficiary shall have any rights in or against
any specific assets of the Company. Except as provided under the
Arvin Industries, Inc. Employee Benefit Trust, all amounts
credited to the Supplemental Subaccount of a Participant shall
constitute general assets of the Company and may be disposed of
by the Company at such time and for such purposes as they may
deem appropriate.
9.2. General Conditions. Except as otherwise expressly
provided herein, all terms and conditions of the Qualified Plan
applicable to a Qualified Plan Salary Reduction Contribution or a
Qualified Plan Company Matching Contribution shall also be
applicable to a Supplemental Salary Reduction Contribution or a
Supplemental Company Matching Contribution to be made hereunder.
Any Qualified Plan Salary Reduction Contribution or Qualified
Plan Company Matching Contribution, or any other contributions to
be made under the Qualified Plan, shall be made solely in
accordance with the terms and conditions of the Qualified Plan
and nothing in this Plan shall operate or be construed in any way
to modify, amend or affect the terms and provisions of the
Qualified Plan.
9.3. No Guarantee of Benefits. Nothing contained in this
Plan shall constitute a guaranty by the Company or any other
person or entity that the assets of the Company will be
sufficient to pay any benefit hereunder.
9.4. No Enlargement of Employee Rights. No Participant shall
have any right to receive a distribution of contributions made
under this Plan except in accordance with the terms of the Plan.
Establishment of this Plan shall not be construed to give any
Participant the right to be retained in the service of the
Company.
9.5. Spendthrift Provision. No interest of any person or
entity in, or right to receive a distribution under, the Plan
shall be subject in any manner to sale, transfer, assignment,
pledge, attachment, garnishment, or other alienation or
encumbrance of any kind; nor may such interest or right to
receive a distribution be taken, either voluntarily or
involuntarily for the satisfaction of the debts of, or other
obligations or claims against, such person or entity, including
claims for alimony, support, separate maintenance and claims in
bankruptcy proceedings.
9.6. Applicable Law. Except to the extent preempted by the
Employee Retirement Income Security Act of 1974, as amended, the
Plan shall be construed and administered under the laws of the
State of Indiana.
9.7. Incapacity of Recipient. If any person entitled to a
distribution under the Plan is deemed by the Administrator to be
incapable of personally receiving and giving a valid receipt for
such payment, then, unless and until claim therefor shall have
been made by a duly appointed guardian or other legal
representative of such person, the Administrator may provide for
such payment or any part thereof to be made to any other person
or institution then contributing toward or providing for the care
and maintenance of such person. Any such payment shall be a
payment for the account of such person and a complete discharge
of any liability of the Company and the Plan therefor.
9.8. Corporate Successors. The Plan shall not be
automatically terminated by a transfer or sale of assets of the
Company or by the merger or consolidation of the Company into or
with any other corporation or other entity, but the Plan shall be
continued after such sale, merger or consolidation with respect
to that transferee, purchaser or successor entity only if and to
the extent that the transferee, purchaser or successor entity
agrees to continue the Plan. In the event that the Plan is not
continued by the transferee, purchaser or successor entity, then
the Plan shall terminate with respect to that transferee,
purchaser or successor entity, subject to the provisions of
Section 8.2.
9.9. Unclaimed Benefit. Each Participant shall keep the
Administrator informed of his current address and the current
address of his designated beneficiary. The Administrator shall
not be obligated to search for the whereabouts of any person. If
the location of a Participant is not made known to the
Administrator within three (3) years after the date on which
payment of the Participant's Supplemental Subaccount may first be
made, payment may be made as though the Participant had died at
the end of the three-year period. If, within one additional year
after such three-year period has elapsed, or, within three years
after the actual death of a Participant, the Administrator is
unable to locate any designated beneficiary of the Participant,
then the Company shall have no further obligation to pay any
benefit hereunder to such Participant or designated beneficiary
and such benefit shall be irrevocably forfeited.
9.10. Limitations on Liability. Notwithstanding any of
the preceding provisions of the Plan, neither the Company, the
Administrator, nor any individual acting as employee or agent of
either shall be liable to any Participant, former Participant,
beneficiary or other person for any claim, loss, liability or
expense incurred in connection with the Plan.
9.11. Construction. Words in the masculine gender shall
include the feminine and the singular shall include the plural,
and vice versa, unless qualified by the context. Any headings
used herein are included for ease of reference only, and are not
to be construed so as to alter the terms hereof.
IN WITNESS WHEREOF, the Company has adopted this amended and
restated Plan on this day of
, 1996 to be effective as of
January 1, 1997.
ARVIN INDUSTRIES, INC.
By
Its Chairman of the Compensation
Committee