FLUKE CORPORATION
SUPPLEMENTAL RETIREMENT INCOME PLAN
This Agreement is entered into between Fluke Corporation, a Washington
corporation (the "Company"), and each individual listed in the attached
Appendix A (the "Participants"), as amended from time to time pursuant to
Article IV.
Whereas, the Participants are valued employees of the Company, and it is the
desire of the Company to continue the employment of each of the Participants
because of their respective experience, reputation and contacts in the
industry, and knowledge of the affairs of the Company; and
Whereas, the Company wants the Participants to concentrate their efforts on
the development and growth of the Company; and
Whereas, the Company desires the Participants to remain in its service as
consultants and wishes to receive the benefit of their knowledge, experience,
reputation and contacts during their retirement; and
Whereas, the Company is desirous of the Participants retaining a friendly
interest in the business of the Company and not entering into any business
which might be competitive after retirement from active employment; and
Whereas, the Company wants to provide each Participant the financial security
of a competitive level of retirement income; and
Whereas, the Company, in consideration of each Participant's past and current
service and such Participant's agreement to be available after retirement as a
consultant, and not to enter into a competitive business, is willing to offer
the respective Participants a Supplemental Retirement Income Plan; and
Whereas, the Company and the Participants have previously entered into a
Supplemental Retirement Income Plan dated November 14, 1991, which was amended
on June 22, 1994, and it is deemed in the best interests of the Company and
the Participants to amend and restate said Agreement;
Therefore, effective September 11, 1996, the parties agree as follows:
ARTICLE I
Definitions
For purposes of this Agreement, the following words shall have the indicated
meaning:
A. Plan - This Supplemental Retirement Income Plan as amended and restated as
of September 11, 1996.
B. Supplemental Retirement Income Fund - The aggregate of the annual
allocations and allocated earnings set aside as a matter of record upon the
books of the Company for purposes of this Plan and representing an unsecured
contractual liability of the Company but not a particular asset or pool of
assets.
C. Participant - An employee or former employee of the Company who has entered
into this Agreement, as amended from time to time, and who has been credited
with an allocated share of an annual allocation by the Company to the
Supplemental Retirement Income Fund.
D. Participant/Beneficiary - A Participant who becomes entitled to a
distribution of such Participant's allocated credits under this Plan due to
retirement or inability to continue gainful employment by reason of sickness
and disability.
E. Beneficiary - One to whom the distributions of allocated credits and/or
life insurance proceeds pursuant to Article VI shall be paid in the event of
the death of a Participant or Participant/Beneficiary.
F. Retirement Date - The last day of the month following the later of: the
date the Participant reaches his fifty-fifth birthday or the date the
Participant retires from employment with the Company.
G. Fiscal Year - The annual accounting period adopted by the Company.
ARTICLE II
Company Contributions
The Company agrees to establish a corporate liability for amounts credited
under the Plan in a manner determined by the Board of Directors of the Company
in its sole discretion, which will adequately provide for the accrual of
Participant benefits at the times, in the amounts and subject to the
conditions hereinafter set forth.
ARTICLE III
Covenants by Participants
Each Participant, individually and not jointly, agrees as follows:
A. During Active Employment. During the period of such Participant's active
employment, to faithfully perform assigned duties to the best of such
Participant's ability and in accordance with directions of the Company; and to
devote to the performance of such duties full time and attention, and not
become associated with or engage in or render service to any other business,
except that such Participant may invest in and have an interest in a
noncompeting business so long as it does not appreciably interfere with such
Participant's active service with the Company.
B. Services During Retirement or Other Termination of Employment. During the
period of a Participant's retirement, or after the termination of employment
with the Company for any reason, to render to the Company such services of an
advisory or consultive nature as the Company may reasonably request so that
the Company may continue to have the benefit of the Participant's experience
and knowledge of the affairs of the Company and reputation and contacts in the
industry. The Participant shall be available for advice and counsel to the
Company at all reasonable times by telephone, letter or in person; provided,
however, a failure to render such service or to give such service or counsel
by reason of illness or other incapacity shall not affect the Participant's
right to receive supplemental retirement income hereunder during any such
period.
C. Noncompetition and Investment During Retirement. During the period of a
Participant's retirement or after the termination of employment with the
Company for any reason, not to become associated with or engage in or render
any service to any other business competitive to the business of the Company
for a period of three (3) years without the prior written approval of the
Company's Board of Directors; provided, however, that this shall not prohibit
the Participant from purchasing stock or other securities of any corporation
and, provided further, that the Participant shall not be prohibited hereunder
from making any investment in a noncompeting business or from becoming a
director of any corporation conducting a noncompeting business.
ARTICLE IV
Eligible Employees
A. Current Eligible Employees. The current eligible employees shall be the
Participants listed in Appendix A.
B. Additional Eligible Employees. Additional employees may be approved from
time to time by the Board of Directors of the Company for eligibility
hereunder as Participants, provided that the Company and each employee
thereafter execute a copy of an agreement to participate in this Plan. Such
additional Participants shall have no interest in allocations already credited
hereunder to other Participants.
C. Removal From List of Eligible Employees. Any present or future Participant
may be removed from the list of employees eligible for participation in this
Plan at any time at the sole discretion of the Board of Directors of the
Company, subject to a Participant's right to allocated amounts already
credited or accrued at the time of such removal.
ARTICLE V
Allocation of Contribution
A. Record Keeping. The Company shall maintain a separate record to which it
shall credit each Participant's annual allocation and allocated earnings
thereon, as defined below, adding the same to the individual Participant's
previously allocated and credited account. At least once each fiscal year the
Company shall furnish each Participant with a statement of such Participant's
current account balance.
B. Participant Allocations.
1.Each Participant's account balance is the aggregate sum of all contributions
credited to such Participant's account which have been authorized by the Board
of Directors in their sole discretion and all allocated earnings thereon.
2.With the fiscal year beginning April 30, 1994, the amount credited annually
on the last day of the fiscal year to each Participant's account shall be:
a) the lesser of twenty-one percent (21%) of the Participant's base salary on
November 1 of such fiscal year, or the annual contribution limitation amount
pursuant to Article VI, section D of the Plan, and
b) the allocated earnings on the Participant's aggregate account balance
during such fiscal year which shall be computed using an assumed interest rate
of one (1) percent over the average three-month Treasury bill rate for the
fiscal year.
3. The amount credited to a Participant's account for the fiscal year during
which the Participant retires shall be prorated based upon the number of days
of participation during the fiscal year.
4. Once a Participant becomes entitled under the provisions of Article VI
hereof to distribution of the credits allocated to such Participant under the
provisions of this Article V, such Participant shall no longer be entitled to
annual allocations for future years, but as a Participant/Beneficiary shall be
entitled to the allocated earnings defined in 2 b) above.
5. For those Participants who retire prior to the end of fiscal 1999, a
calculation of the present value of the Company's pension benefit will be made
as if the maximum amount of annual compensation which could be taken into
account in the computation of pension benefits is $235,840, the maximum level
prior to the enactment of the Revenue Reconciliation Act of 1993. Any
difference between the present value of the actual pension benefit to be paid
and the present value of the pension benefit using the $235,840 limit (the
equalization amount) will be accrued as an additional allocation to the
Participant's account in such Participant's year of retirement. The Company
has increased by 1% the annual allocation to each Participant's account
beginning in fiscal 1995. This additional 1% allocation will be deducted from
any equalization amount paid to a Participant pursuant to this paragraph.
6. The foregoing allocations may be modified for future years at any time at
the sole discretion of the Board of Directors of the Company to meet corporate
objectives.
ARTICLE VI
Distribution of Allocated Credit
A. Conditions
1. Attainment of Retirement Date, Termination of Employment or Disability.
Except as provided in section C.5. of this Article VI, no amounts credited to
a Participant shall be distributed to such Participant or to any other person
or entity on such Participant's behalf or as designated by such Participant to
receive the same unless the Participant shall have reached the Retirement Date
and ceased employment with the Company, died, or become disabled, as herein
provided.
2. Forfeitures. The balance in the Participant's account shall be forfeited
and, if applicable, any distribution or continued distribution of a
Participant's or Participant/Beneficiary's account shall stop if the
Participant or Participant/Beneficiary shall:
a)engage in a business within the three (3) year covenant period (described in
Article III, section C hereof) which, in the opinion of the Board of Directors
of the Company, competes with the Company;
b) be terminated by the Company for violation of any corporate policies to
which such Participant is subject;
c) engage in business practices which, in the opinion of the Board of
Directors of the Company, are detrimental to the interests of the Company;
d) fail to be available for consultation and advice after retirement from or
termination of employment with the Company; or
e) encumber or seek to encumber such Participant's interest in or benefit in
this Plan.
3. Disbursement of Forfeited Account. No Participant shall have any rights
whatsoever to the balance of any forfeited account. Any forfeited balance
shall reduce the Company's liability under the Plan.
B. Vesting. Distributions to all Participant/ Beneficiaries under this Plan
shall be further limited to those amounts allocated to each Participant which
have been vested according to the number of years such Participant shall have
been continuously employed by the Company or its subsidiaries as of the end of
the fiscal year in which such Participant becomes entitled to such
distribution or terminates employment with the Company, whichever occurs
first, and according to the following schedule:
Number of Years
Employed Percent Vested
less than 1 year 0%
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years 100%
Upon termination of employment with the Company, a Participant's aggregate
account balance shall be adjusted according to the above schedule. Any non-
vested balance shall reduce the Company's liability under the Plan.
C. Payments to Participant/Beneficiary or Beneficiaries.
1. Retirement. Upon Participant's Retirement Date, the Company, subject to
the conditions and vesting provisions set forth in sections A and B of this
Article VI, shall pay to the Participant/Beneficiary in approximately equal
monthly installments over a ten year period an amount equal to the
Participant's aggregate account balance. The first installment must be paid
within the first month after such Participant's Retirement Date, unless the
Participant requests a deferral of such first payment for a period not
exceeding twelve months and such deferral is approved by the Board. During
each fiscal year following the first year of distributions to a
Participant/Beneficiary, the allocated earnings on the remaining balance of
the Participant/Beneficiary's aggregate account balance from the prior fiscal
year shall be divided by twelve and paid out to the Participant/Beneficiary as
equal additions to the normal monthly installments.
2. Death. Each Participant shall designate a Beneficiary or Beneficiaries on
a form to be filed with the Company. If a Participant is married when the
Beneficiary designation is made and such designation is someone other than the
spouse, the designation will not be valid without the written consent of the
spouse. If no designation is filed with the Company or if the designated
Beneficiary shall not survive such Participant, then the payments from the
account of the deceased Participant shall be paid to the surviving spouse, if
any, or, if none, then to the Participant's personal legal representative.
If a Participant dies while still in the Company's employ before reaching his
Retirement Date, the Beneficiary or Beneficiaries named by the Participant
prior to his death shall receive a life insurance death benefit from the Fluke
Corporation Pre-Retirement Death Benefit Plan. However, if the Participant's
current aggregate account balance plus $250,000 is greater than the life
insurance benefit, the difference shall be paid to the Beneficiary or
Beneficiaries by the Company. The Participant's aggregate account balance at
death shall be computed as if such Participant was fully vested pursuant to
paragraph B of this Article VI. If the Participant is not an employee of the
Company at the time of death or dies after retirement but before distribution
of all benefits to which such Participant/Beneficiary may have been entitled,
the aggregate account balance at the time of death shall be paid to the
Beneficiary or Beneficiaries named by the Participant in installment payments
as described in section C.1 of this Article VI. The first of such installment
payments must be paid to the Beneficiary or Beneficiaries within three (3)
months after the date of the Participant's death, if none have been paid
before such death, but the first installment payment shall be paid within one
(1) month after the Participant/Beneficiary's death, if payments under Article
VI had already commenced prior to such death.
3. Disability
a) In the event a Participant, prior to reaching such Participant's Retirement
Date and still in the employ of the Company, becomes disabled so such
Participant is no longer able to continue in gainful employment, the aggregate
amount credited to the Participant's account as of the occurrence of the
disability shall be paid to such Participant in installments pursuant to
section C.1 of this Article VI as if such Participant is fully vested pursuant
to section B of this Article VI.
b) Disability shall be established by the certificate of a physician selected
by the Participant and approved by the Company, that the Participant, by
reason of mental or physical disability, is incapable of further gainful
employment. In the event the Participant becomes disabled as defined herein,
and thereafter again becomes capable of gainful employment, the Participant
may be reemployed by the Company on such terms and with such participation
under this Agreement as the Board of Directors, in its sole discretion, shall
then determine.
4. Distribution to Minors or Incompetents. Distribution to minors or in
competents may be made by the Company, at its sole discretion, a) directly to
said persons, b) to the legal guardians of said persons, or c) to the parent
of said minor. The Company shall not be required to see to the application of
any such distributions so made to any of said persons and such payments shall
be a full discharge of the Company's liability under this Plan.
5. Lump Sum or Periodic Payments. Upon a Participant's termination of
employment with the Company, the Board of Directors may, in its discretion,
regardless of the Participant's reaching Retirement Date, allow the
Participant to receive such Participant's account balance in a lump sum or in
the form of periodic installments payable over any fixed or contingent period
not exceeding the life expectancy of the Participant and the Participant's
spouse, if any. The Board may, under these circumstances, require the
repayment of such distributions if the Participant violates the terms of
Article VI, section A.2.
D. Annual Contribution Limitation. The maximum annual contribution to a
Participant's account under this Agreement shall be limited at each attained
age to the amount which, when added to the Participant's current account
balance and to the lump sum value of the Participant's accrued pension from
the Fluke Corporation Pension Plan, so as not to exceed the following
percentage of the Participant's compensation.
Age Last Percent of Age Last Percent of
Birthday Compensation Birthday Compensation
35 107% 49 314%
36 115% 50 339%
37 125% 51 366%
38 135% 52 395%
39 145% 53 427%
40 157% 54 461%
41 170% 55 498%
42 183% 56 505%
43 198% 57 511%
44 214% 58 517%
45 231% 59 521%
46 249% 60 525%
47 269% 61 528%
48 291% 62 and older 531%
Compensation for purposes of this limitation shall be the average of a
Participant's highest three fiscal years total of base salary, senior
management variable compensation and semi-annual profit-sharing bonus
(including amounts deferred into the Company's Retirement Plus program, the
non-qualified deferred compensation plan, or any flexible benefit plan).
ARTICLE VII
Provision Against Anticipation
At no time shall any Participant, or Participant/Beneficiary, have the right
or power to alienate, anticipate, commute, pledge, encumber or assign any of
the benefits, proceeds or avails of the funds credited to such Participant
under this Agreement and no such benefits, proceeds or avails shall be subject
to seizure by any creditor of the Participant, or Participant/Beneficiary,
under any writ or proceedings at law or in equity.
ARTICLE VIII
Termination of Employment
Nothing herein provided shall abrogate or modify in any way the Company's
right to terminate the Company's employment of any Participant at any time,
with or without cause.
ARTICLE IX
Unfunded Status
A. Unsecured General Creditor. Participants and their Beneficiaries, heirs,
successors, and assigns shall have no secured legal or equitable rights,
interest or claims in any property or assets of the Company, nor shall they be
Beneficiaries of, or have any rights, claims or interests in any life
insurance policies, annuity contracts or the proceeds therefrom owned or which
may be acquired by the Company. Except as provided in Section B, such
policies, annuity contracts or other assets of the Company shall not be held
under any trust for the benefit of Participants, their Beneficiaries, heirs,
successors or assigns, or held in any way as collateral security for the
fulfilling of the obligations of the Company under this Plan. Any and all of
the Company's assets and policies shall be, and remain, the general,
unpledged, unrestricted assets of the Company. The Company's obligation under
the Plan shall be that of an unfunded and unsecured promise to pay money in
the future.
B. Trust Fund. At its discretion, the Company may establish one (1) or more
trusts, with such trustees as the Board may approve, for the purpose of
providing for the payment of benefits owed under the Plan. Although such a
trust shall be irrevocable, its assets shall be held for payment of all the
Company's general creditors in the event of insolvency. To the extent any
benefits provided under the Plan are paid from any such trust, the Company
shall have no further obligation to pay them. If not paid from the trust,
such benefits shall remain the obligation of the Company. Notwithstanding the
existence of such a trust, it is intended that the Plan be unfunded for tax
purposes and for purposes of Title 1 of ERISA.
ARTICLE X
Amendment and Termination of Agreement
A. Right to Amend and Terminate. The Board of Directors of the Company shall
have the right to terminate this Plan at any time or to modify, alter or amend
it in whole or in part, subject to the Company's obligations to pay all sums
then credited to Participants, Participant/Beneficiaries and Beneficiaries
under the terms of this Plan.
B. Termination of Plan. This Plan shall terminate upon written notice by the
Board of Directors of the Company, upon complete discontinuance of
contributions by the Company for a period of three (3) years, in the event of
the bankruptcy or receivership of the Company or upon the dissolution or
merger of the Company unless a successor to the business agrees to continue
the Plan by executing an appropriate supplemental agreement. In the event
that the Company is taken over by a successor who agrees to continue the Plan,
the employment of any employee who is continued in the employ of such
successor shall not be deemed to have been terminated or severed for any
purpose hereunder.
C. Payment on Termination. Upon termination of this Plan, the aggregate
account balances of all Participants then employed by the Company shall fully
vest. The vested interests of all Participants, Participants/Beneficiaries
and Beneficiaries of former Participants in the Supplemental Retirement Income
Fund shall be distributed to them by the Company or its successors or assigns
in a lump sum within one (1) month of the termination date.
In witness whereof, the parties hereto have caused this Agreement to be
executed this day of , 1996.
Fluke Corporation Participant
George M. Winn, President Signature
Douglas G. McKnight, Secretary Title
Appendix A
Plan Participants
Michael J. Adams
James L. Cavoretto
Linda S. Cheever
William E. Dunn
William R. Hoffman
Elizabeth J. Huebner
David E. Katri
Douglas G. McKnight
Craig T. J. Miller
Patrick J. O'Hara
William G. Parzybok, Jr.
Barry L. Rowan
John R. Smith
Richard W. Van Saun
Ronald R. Wambolt
George M. Winn
As amended December 11, 1996