Exhibit 10.13
Thermo Electron Corporation
Deferred Compensation Plan
Master Plan Document
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Effective November 1, 2001
Copyright (C) 2001
By Clark/Bardes Consulting - Compensation Resource Group,
A division of Clark/Bardes, Inc.
All Rights Reserved
Thermo Electron Corporation
Deferred Compensation Plan
Master Plan Document
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TABLE OF CONTENTS
Purpose 1
ARTICLE 1 Definitions....................................................................................1
ARTICLE 2 Selection, Enrollment, Eligibility.............................................................6
2.1 Selection by Committee.........................................................................6
2.2 Enrollment Requirements........................................................................6
2.3 Eligibility; Commencement of Participation.....................................................6
2.4 Termination of Participation and/or Deferrals..................................................6
ARTICLE 3 Deferral Commitments/Company Contribution/Crediting/Taxes......................................7
3.1 Minimum Deferrals..............................................................................7
3.2 Maximum Deferral...............................................................................7
3.3 Election to Defer; Effect of Election Form.....................................................7
3.4 Withholding of Annual Deferral Amounts.........................................................8
3.5 Annual Company Contribution Amount.............................................................8
3.6 Investment of Trust Assets.....................................................................8
3.7 Vesting........................................................................................8
3.8 Crediting/Debiting of Account Balances.........................................................9
3.9 FICA and Other Taxes..........................................................................10
ARTICLE 4 Short-Term Payout; Unforeseeable Financial Emergencies; Withdrawal Election...................11
4.1 Short-Term Payout.............................................................................11
4.2 Other Benefits Take Precedence Over Short-Term................................................11
4.3 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies.........................11
4.4 Withdrawal Election...........................................................................11
ARTICLE 5 Retirement Benefit............................................................................12
5.1 Retirement Benefit............................................................................12
5.2 Payment of Retirement Benefit.................................................................12
5.3 Death Prior to Completion of Retirement Benefit...............................................12
ARTICLE 6 Pre-Retirement Survivor Benefit...............................................................12
6.1 Pre-Retirement Survivor Benefit...............................................................12
6.2 Payment of Pre-Retirement Survivor Benefit....................................................12
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ARTICLE 7 Termination Benefit...........................................................................13
7.1 Termination Benefit...........................................................................13
7.2 Payment of Termination Benefit................................................................13
ARTICLE 8 Disability Waiver and Benefit.................................................................13
8.1 Disability Waiver.............................................................................13
8.2 Continued Eligibility; Disability Benefit.....................................................13
ARTICLE 9 Beneficiary Designation.......................................................................14
9.1 Beneficiary...................................................................................14
9.2 Beneficiary Designation; Change...............................................................14
9.3 Acknowledgement...............................................................................14
9.4 No Beneficiary Designation....................................................................14
9.5 Doubt as to Beneficiary.......................................................................14
9.6 Discharge of Obligations......................................................................14
ARTICLE 10 Leave of Absence..............................................................................15
10.1 Paid Leave of Absence.........................................................................15
10.2 Unpaid Leave of Absence.......................................................................15
ARTICLE 11 Termination, Amendment or Modification........................................................15
11.1 Termination...................................................................................15
11.2 Amendment.....................................................................................15
11.3 Plan Agreement................................................................................16
11.4 Effect of Payment.............................................................................16
ARTICLE 12 Administration................................................................................16
12.1 Committee Duties..............................................................................16
12.2 Administration Upon Change In Control.........................................................16
12.3 Agents........................................................................................17
12.4 Binding Effect of Decisions...................................................................17
12.5 Indemnity of Committee........................................................................17
12.6 Employer Information..........................................................................17
ARTICLE 13 Other Benefits and Agreements.................................................................17
13.1 Coordination with Other Benefits..............................................................17
ARTICLE 14 Claims Procedures.............................................................................17
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14.1 Presentation of Claim.........................................................................17
14.2 Notification of Decision......................................................................18
14.3 Review of a Denied Claim......................................................................18
14.4 Decision on Review............................................................................18
14.5 Legal Action..................................................................................19
ARTICLE 15 Trust.........................................................................................19
15.1 Establishment of the Trust....................................................................19
15.2 Interrelationship of the Plan and the Trust...................................................19
15.3 Distributions From the Trust..................................................................19
ARTICLE 16 Miscellaneous.................................................................................19
16.1 Status of Plan................................................................................19
16.2 Unsecured General Creditor....................................................................19
16.3 Employer's Liability..........................................................................19
16.4 Nonassignability..............................................................................20
16.5 Not a Contract of Employment..................................................................20
16.6 Furnishing Information........................................................................20
16.7 Terms.........................................................................................20
16.8 Captions......................................................................................20
16.9 Governing Law.................................................................................20
16.10 Notice........................................................................................20
16.11 Successors....................................................................................21
16.12 Spouse's Interest.............................................................................21
16.13 Validity......................................................................................21
16.14 Incompetent...................................................................................21
16.15 Court Order...................................................................................21
16.16 Distribution in the Event of Taxation.........................................................21
16.17 Insurance.....................................................................................22
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Thermo Electron Corporation
Deferred Compensation Plan
Master Plan Document
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THERMO ELECTRON CORPORATION
DEFERRED COMPENSATION PLAN
Effective November 1, 2001
Purpose
The purpose of this Plan is to provide specified benefits to a select group
of management or highly compensated Employees who contribute materially to the
continued growth, development and future business success of Thermo Electron
Corporation, a Delaware corporation, and its subsidiaries. This Plan shall be
unfunded for tax purposes and for purposes of Title I of ERISA.
ARTICLE 1
Definitions
For the purposes of this Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:
1.1 "Account Balance" shall mean, with respect to a Participant, a credit on
the records of the Employer equal to the sum of (i) the Deferral Account
balance and (ii) the Company Contribution Account balance. The Account
Balance, and each other specified account balance, shall be a bookkeeping
entry only and shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to a Participant, or his or her
designated Beneficiary, pursuant to this Plan.
1.2 "Annual Company Contribution Amount" shall mean, for any one Plan Year, the
amount determined in accordance with Section 3.5.
1.3 "Annual Deferral Amount" shall mean that portion of a Participant's Base
Salary and Annual Incentive that a Participant elects to have and is
deferred in accordance with Article 3 for any one Plan Year. In the event
of a Participant's Retirement, Disability (if deferrals cease in accordance
with Section 8.1), death or a Termination of Employment prior to the end of
a Plan Year, such year's Annual Deferral Amount shall be the actual amount
withheld prior to such event.
1.4 "Annual Incentive" shall mean any compensation, in addition to Base Salary
relating to services performed during any calendar year, whether or not
paid in such calendar year or included on the Federal Income Tax Form W-2
for such calendar year, payable to a Participant as an Employee under any
Employer's annual bonus and cash incentive plans, or any other bonus
arrangement designated by the Committee, excluding stock options and
restricted stock.
1.5 "Annual Installment Method" shall be an annual installment payment over the
number of years selected by the Participant in accordance with this Plan,
calculated as follows: the vested Account Balance of the Participant shall
be calculated as of the close of business on the last business day of the
year. The annual installment shall be calculated by multiplying this
balance by a fraction, the numerator of which is one and the denominator of
which is the remaining number of annual payments due the Participant. By
way of example, if the Participant elects a ten (10) year Annual
1
Installment Method, the first payment shall be 1/10 of the vested Account
Balance, calculated as described in this definition. The following year,
the payment shall be 1/9 of the vested Account Balance, calculated as
described in this definition. Each annual installment shall be paid no
later than sixty (60) days after the last business day of the applicable
year.
1.6 "Base Salary" shall mean the annual cash compensation relating to services
performed during any calendar year, whether or not paid in such calendar
year or included on the Federal Income Tax Form W-2 for such calendar year,
excluding bonuses, commissions, overtime, fringe benefits, stock options,
restricted stock, relocation expenses, Annual Incentive, non-monetary
awards, directors fees and other fees, and automobile and other allowances
paid to a Participant for employment services rendered (whether or not such
allowances are included in the Employee's gross income). Base Salary shall
be calculated before reduction for compensation voluntarily deferred or
contributed by the Participant pursuant to all qualified or non-qualified
plans of any Employer and shall be calculated to include amounts not
otherwise included in the Participant's gross income under Code Sections
125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any
Employer; provided, however, that all such amounts will be included in
compensation only to the extent that had there been no such plan, the
amount would have been payable in cash to the Employee.
1.7 "Beneficiary" shall mean one or more persons, trusts, estates or other
entities, designated in accordance with Article 9, that are entitled to
receive benefits under this Plan upon the death of a Participant.
1.8 "Beneficiary Designation Form" shall mean the form established from time to
time by the Committee that a Participant completes, signs and returns to
the Committee to designate one or more Beneficiaries.
1.9 "Board" shall mean the board of directors of the Company.
1.10 "Change in Control" shall mean an event or occurrence set forth in any one
or more of subsections (a) through (d) below (including an event or
occurrence that constitutes a Change in Control under one of such
subsections but is specifically exempted from another such subsection):
(a) The acquisition by an individual, entity or group (within the meaning
of Section 13(d)(3) and 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial
ownership of any capital stock of the Company if, after such
acquisition, such Person beneficially owns (within the meaning of Rule
13d-3 promulgated under the Exchange Act) 40% or more of either (i)
the then-outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power
of the then-outstanding securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a
Change in Control: (i) any acquisition by the Company, (ii) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the
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Company, or (iii) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i) and (ii) of subsection (c)
of this Section 1.10; or
(b) Such time as the Continuing Directors (as defined below) do not
constitute a majority of the Board (or, if applicable, the board of
directors of a successor corporation to the Company), where the term
"Continuing Director" means at any date a member of the Board (i) who
was a member of the Board on the date of the execution of this Plan
document or (ii) who was nominated or elected subsequent to such date
by at least a majority of the directors who were Continuing Directors
at the time of such nomination or election or whose election to the
Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination
or election; provided, however, that there shall be excluded from this
clause (ii) any individual whose initial assumption of office occurred
as a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or threatened
solicitation of proxies or consents, by or on behalf of a person other
than the Board; or
(c) The consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving the Company or
a sale or other disposition of all or substantially all of the assets
of the Company in one or a series of transactions (a "Business
Combination"), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (i)
all or substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 60% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding securities entitled to
vote generally in the election of directors, respectively, of the
resulting or acquiring corporation in such Business Combination (which
shall include, without limitation, a corporation which as a result of
such transaction owns the Company or substantially all of the
Company's assets either directly or through one or more subsidiaries)
(such resulting or acquiring corporation is referred to herein as the
"Acquiring Corporation") in substantially the same proportions as
their ownership, immediately prior to such Business Combination, of
the Outstanding Company Common Stock and Outstanding Company Voting
Securities, respectively; and (ii) no person (excluding the Acquiring
Corporation or any employee benefit plan (or related trust) maintained
or sponsored by the Company or by the Acquiring Corporation)
beneficially owns, directly or indirectly, 40% or more of the then
outstanding shares of common stock of the Acquiring Corporation, or of
the combined voting power of the then-outstanding securities of such
corporation entitled to vote generally in the election of directors;
or
(d) Approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.
1.11 "Claimant" shall have the meaning set forth in Section 14.1.
1.12 "Code" shall mean the Internal Revenue Code of 1986, as it may be amended
from time to time.
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1.13 "Committee" shall mean the committee described in Article 12.
1.14 "Company" shall mean Thermo Electron Corporation, a Delaware corporation,
and any successor to all or substantially all of the Company's assets or
business.
1.15 "Company Contribution Account" shall mean (i) the sum of the Participant's
Annual Company Contribution Amounts, plus (ii) amounts credited or debited
in accordance with all the applicable crediting and debiting provisions of
this Plan that relate to the Participant's Company Contribution Account,
less (iii) all distributions made to the Participant or his or her
Beneficiary pursuant to this Plan that relate to the Participant's Company
Contribution Account.
1.16 "Deduction Limitation" shall mean the following described limitation on a
benefit that may otherwise be distributable pursuant to the provisions of
this Plan. Except as otherwise provided, this limitation shall be applied
to all distributions that are "subject to the Deduction Limitation" under
this Plan. If an Employer determines in good faith prior to a Change in
Control that there is a reasonable likelihood that any compensation paid to
a Participant for a taxable year of the Employer would not be deductible by
the Employer solely by reason of the limitation under Code Section 162(m),
then to the extent deemed necessary by the Employer to ensure that the
entire amount of any distribution to the Participant pursuant to this Plan
prior to the Change in Control is deductible, the Employer may defer all or
any portion of a distribution under this Plan. Any amounts deferred
pursuant to this limitation shall continue to be credited/debited with
additional amounts in accordance with Section 3.8 below, even if such
amount is being paid out in installments. The amounts so deferred and
amounts credited thereon shall be distributed to the Participant or his or
her Beneficiary (in the event of the Participant's death) at the earliest
possible date, as determined by the Employer in good faith, on which the
deductibility of compensation paid or payable to the Participant for the
taxable year of the Employer during which the distribution is made will not
be limited by Section 162(m) or, if earlier, the effective date of a Change
in Control. Notwithstanding anything to the contrary in this Plan, the
Deduction Limitation shall not apply to any distributions made after a
Change in Control.
1.17 "Deferral Account" shall mean (i) the sum of all of a Participant's Annual
Deferral Amounts, plus (ii) amounts credited in accordance with all the
applicable crediting and debiting provisions of this Plan that relate to
the Participant's Deferral Account, less (iii) all distributions made to
the Participant or his or her Beneficiary pursuant to this Plan that relate
to his or her Deferral Account.
1.18 "Disability" shall mean a period of disability during which a Participant
qualifies for disability benefits under the Participant's Employer's
long-term disability plan, or, if a Participant does not participate in
such a plan, a period of disability during which the Participant would have
qualified for disability benefits under such a plan had the Participant
been a participant in such a plan, as determined in the sole discretion of
the Committee. If the Participant's Employer does not sponsor such a plan,
or discontinues to sponsor such a plan, Disability shall be determined by
the Committee in its sole discretion.
1.19 "Disability Benefit" shall mean the benefit set forth in Article 8.
4
1.20 "Election Form" shall mean the form established from time to time by the
Committee that a Participant completes, signs and returns to the Committee
to make an election under the Plan.
1.21 "Employee" shall mean a person who is an employee of any Employer.
1.22 "Employer(s)" shall mean the Company and/or any of its subsidiaries (now in
existence or hereafter formed or acquired) that have been selected by the
Board to participate in the Plan.
1.23 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
1.24 "First Plan Year" shall mean the period beginning January 1, 2002 and
ending December 31, 2002.
1.25 "Participant" shall mean any Employee (i) who is selected to participate in
the Plan, (ii) who elects to participate in the Plan, (iii) who signs a
Plan Agreement, an Election Form and a Beneficiary Designation Form, (iv)
whose signed Plan Agreement, Election Form and Beneficiary Designation Form
are accepted by the Committee, (v) who commences participation in the Plan,
and (vi) whose Plan Agreement has not terminated. A spouse or former spouse
of a Participant shall not be treated as a Participant in the Plan or have
an account balance under the Plan, even if he or she has an interest in the
Participant's benefits under the Plan as a result of applicable law or
property settlements resulting from legal separation or divorce.
1.26 "Plan" shall mean the Company's Deferred Compensation Plan, which shall be
evidenced by this instrument and by each Plan Agreement, as they may be
amended from time to time.
1.27 "Plan Agreement" shall mean a written agreement, as may be amended from
time to time, which is entered into by and between an Employer and a
Participant. Each Plan Agreement executed by a Participant and the
Participant's Employer shall provide for the entire benefit to which such
Participant is entitled under the Plan; should there be more than one Plan
Agreement, the Plan Agreement bearing the latest date of acceptance by the
Employer shall supersede all previous Plan Agreements in their entirety and
shall govern such entitlement. The terms of any Plan Agreement may be
different for any Participant, and any Plan Agreement may provide
additional benefits not set forth in the Plan or limit the benefits
otherwise provided under the Plan; provided, however, that any such
additional benefits or benefit limitations must be agreed to by both the
Employer and the Participant.
1.28 "Plan Year" shall mean a period beginning on January 1 of each calendar
year and continuing through December 31 of such calendar year, beginning
with the First Plan Year.
1.29 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in
Article 6.
1.30 "Retirement", "Retire(s)" or "Retired" shall mean, with respect to an
Employee, severance from employment from all Employers for any reason other
than a leave of absence, death or Disability on or after the earlier of the
attainment of (a) age sixty-five (65) or (b) age fifty-five (55) with ten
(10) Years of Service.
1.31 "Retirement Benefit" shall mean the benefit set forth in Article 5.
1.32 "Short-Term Payout" shall mean the payout set forth in Section 4.1.
5
1.33 "Termination Benefit" shall mean the benefit set forth in Article 7.
1.34 "Termination of Employment" shall mean the severing of employment with all
Employers, voluntarily or involuntarily, for any reason other than
Retirement, Disability, death or an authorized leave of absence.
1.35 "Trust" shall mean one or more trusts established pursuant to that certain
Master Trust Agreement, dated as of November 1, 2001 between the Company
and the trustee named therein, as amended from time to time.
1.36 "Unforeseeable Financial Emergency" shall mean an unanticipated emergency
that is caused by an event beyond the control of the Participant that would
result in severe financial hardship to the Participant resulting from (i) a
sudden and unexpected illness or accident of the Participant or a dependent
of the Participant, (ii) a loss of the Participant's property due to
casualty, or (iii) such other extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant, all as
determined in the sole discretion of the Committee.
1.37 "Years of Service" shall mean the total number of full years in which a
Participant has been employed by one or more Employers. For purposes of
this definition, a year of employment shall be a 365 day period (or 366 day
period in the case of a leap year) that, for the first year of employment,
commences on the Employee's date of hiring and that, for any subsequent
year, commences on an anniversary of that hiring date. Any partial year of
employment shall not be counted.
ARTICLE 2
Selection, Enrollment, Eligibility
2.1 Selection by Committee. Participation in the Plan shall be limited to a
select group of management and highly compensated Employees of the
Employers, as determined by the Committee in its sole discretion. From that
group, the Committee shall select, in its sole discretion, Employees to
participate in the Plan.
2.2 Enrollment Requirements. As a condition to participation, each selected
Employee shall complete, execute and return to the Committee a Plan
Agreement, an Election Form and a Beneficiary Designation Form, all within
thirty (30) days after he or she is selected to participate in the Plan. In
addition, the Committee shall establish from time to time such other
enrollment requirements as it determines in its sole discretion are
necessary.
2.3 Eligibility; Commencement of Participation. Provided an Employee selected
to participate in the Plan has met all enrollment requirements set forth in
this Plan and required by the Committee, including returning all required
documents to the Committee within the specified time period, that Employee
shall commence participation in the Plan on the first day of the month
following the month in which the Employee completes all enrollment
requirements. If an Employee fails to meet all such requirements within the
period required, in accordance with Section 2.2, that Employee shall not be
eligible to participate in the Plan until the first day of the Plan Year
following the delivery to and acceptance by the Committee of the required
documents.
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2.4 Termination of Participation and/or Deferrals. If the Committee determines
in good faith that a Participant no longer qualifies as a member of a
select group of management or highly compensated employees, as membership
in such group is determined in accordance with Sections 201(2), 301(a)(3)
and 401(a)(1) of ERISA, the Committee shall have the right, in its sole
discretion, to (i) terminate any deferral election the Participant has made
for the remainder of the Plan Year in which the Participant's membership
status changes, (ii) prevent the Participant from making future deferral
elections and/or (iii) immediately distribute the Participant's then vested
Account Balance as a Termination Benefit and terminate the Participant's
participation in the Plan.
ARTICLE 3
Deferral Commitments/Company Contribution/Crediting/Taxes
3.1 Minimum Deferrals.
(a) Base Salary and Annual Incentive. For each Plan Year, a Participant
may elect to defer, as his or her Annual Deferral Amount, an aggregate
minimum of $5,000 of Base Salary and/or Annual Incentive. If an
election is made for less than the stated minimum amounts, or if no
election is made, the amount deferred shall be zero.
(b) Short Plan Year. Notwithstanding the foregoing, if a Participant first
becomes a Participant after the first day of a Plan Year, the minimum
Annual Deferral Amount shall be an amount equal to the minimum set
forth above, multiplied by a fraction, the numerator of which is the
number of complete months remaining in the Plan Year and the
denominator of which is 12.
3.2 Maximum Deferral.
(a) Base Salary and Annual Incentive. For each Plan Year, a Participant
may elect to defer, as his or her Annual Deferral Amount, Base Salary
and/or Annual Incentive up to the following maximum percentages for
each deferral elected:
- -------------------------------------- ----------------------------------
Deferral Maximum Amount
- -------------------------------------- ----------------------------------
Base Salary 90%
- -------------------------------------- ----------------------------------
- -------------------------------------- ----------------------------------
Annual Incentive 100%
- -------------------------------------- ----------------------------------
(b) Short Plan Year. Notwithstanding the foregoing, if a Participant first
becomes a Participant after the first day of a Plan Year, the maximum
Annual Deferral Amount, with respect to Base Salary and Annual
Incentive shall be limited to the amount of compensation not yet
earned by the Participant as of the date the Participant submits a
Plan Agreement and Election Form to the Committee for acceptance.
3.3 Election to Defer; Effect of Election Form.
(a) First Plan Year. In connection with a Participant's commencement of
participation in the Plan, the Participant shall make an irrevocable
deferral election for the Plan Year in which the Participant commences
7
participation in the Plan, along with such other elections as the
Committee deems necessary or desirable under the Plan. For these
elections to be valid, the Election Form must be completed and signed
by the Participant, timely delivered to the Committee (in accordance
with Section 2.2 above) and accepted by the Committee.
(b) Subsequent Plan Years. For each succeeding Plan Year, an irrevocable
deferral election for that Plan Year, and such other elections as the
Committee deems necessary or desirable under the Plan, shall be made
by timely delivering to the Committee, in accordance with its rules
and procedures, before the end of the Plan Year preceding the Plan
Year for which the election is made, a new Election Form. If no such
Election Form is timely delivered for a Plan Year, the Annual Deferral
Amount shall be zero for that Plan Year.
3.4 Withholding of Annual Deferral Amounts. For each Plan Year, the Base Salary
portion of the Annual Deferral Amount shall be withheld from each regularly
scheduled Base Salary payroll in equal amounts, as adjusted from time to
time for increases and decreases in Base Salary. The Annual Incentive
portion of the Annual Deferral Amount shall be withheld at the time the
Annual Incentive is or otherwise would be paid to the Participant, whether
or not this occurs during the Plan Year itself.
3.5 Annual Company Contribution Amount. For each Plan Year, an Employer, in its
sole discretion, may, but is not required to, credit any amount it desires
to any Participant's Company Contribution Account under this Plan, which
amount shall be for that Participant the Annual Company Contribution Amount
for that Plan Year. The amount so credited to a Participant may be smaller
or larger than the amount credited to any other Participant, and the amount
credited to any Participant for a Plan Year may be zero, even though one or
more other Participants receive an Annual Company Contribution Amount for
that Plan Year. The Annual Company Contribution Amount, if any, shall be
credited as of the last day of the Plan Year. If a Participant is not
employed by an Employer as of the last day of a Plan Year other than by
reason of his or her Retirement or death while employed, the Annual Company
Contribution Amount for that Plan Year shall be zero.
3.6 Investment of Trust Assets. The Trustee of the Trust shall be authorized,
upon written instructions received from the Committee or investment manager
appointed by the Committee, to invest and reinvest the assets of the Trust
in accordance with the applicable Trust Agreement, including the
disposition of stock and reinvestment of the proceeds in one or more
investment vehicles designated by the Committee.
3.7 Vesting.
(a) A Participant shall at all times be 100% vested in his or her Deferral
Account.
(b) The Committee, in its sole discretion, will determine over what period
of time and in what percentage increments a Participant shall vest in
his or her Company Contribution Account. The Committee may credit some
Participants with larger or smaller vesting percentages than other
Participants, and the vesting percentage credited to any Participant
8
for a Plan Year may be zero, even though one or more other
Participants have a greater vesting percentage credited to them for
that Plan Year.
(c) Notwithstanding anything to the contrary contained in this Section
3.7, in the event of a Change in Control and/or a Participant's
Retirement, a Participant's Company Contribution Account shall
immediately become 100% vested (if it is not already vested in
accordance with the above vesting schedules).
(d) Notwithstanding subsection (c), the vesting schedule for a
Participant's Company Contribution Account shall not be accelerated to
the extent that the Committee determines that such acceleration would
cause the deduction limitations of Section 280G of the Code to become
effective. In the event that all of a Participant's Company
Contribution Account is not vested pursuant to such a determination,
the Participant may request independent verification of the
Committee's calculations with respect to the application of Section
280G. In such case, the Committee must provide to the Participant
within 15 business days of such a request an opinion from a nationally
recognized accounting firm selected by the Participant (the
"Accounting Firm"). The opinion shall state the Accounting Firm's
opinion that any limitation in the vested percentage hereunder is
necessary to avoid the limits of Section 280G and contain supporting
calculations. The cost of such opinion shall be paid for by the
Company.
3.8 Crediting/Debiting of Account Balances. In accordance with, and subject to,
the rules and procedures that are established from time to time by the
Committee, in its sole discretion, amounts shall be credited or debited to
a Participant's Account Balance in accordance with the following rules:
(a) Election of Measurement Funds. A Participant, in connection with his
or her initial deferral election in accordance with Section 3.3(a)
above, shall elect, on the Election Form, one or more Measurement
Fund(s) (as described in Section 3.8(c) below) to be used to determine
the amounts to be credited or debited to his or her Account Balance.
The Participant may (but is not required to) elect, by submitting an
Election Form to the Committee that is accepted by the Committee, to
add or delete one or more Measurement Fund(s) to be used to determine
the amounts to be credited or debited to his or her Account Balance,
or to change the portion of his or her Account Balance allocated to
each previously or newly elected Measurement Fund. If an election is
made in accordance with the previous sentence, it shall apply as of
the first business day deemed reasonably practicable by the Committee,
in its sole discretion, and continue thereafter for each subsequent
day in which the Participant participates in the Plan, unless changed
in accordance with the previous sentence. The Participant may make no
more than four (4) such elections in any Plan Year.
(b) Proportionate Allocation. In making any election described in Section
3.8(a) above, the Participant shall specify on the Election Form, in
increments of five percentage points (5%), the percentage of his or
her Account Balance to be allocated to a Measurement Fund (as if the
Participant was making an investment in that Measurement Fund with
that portion of his or her Account Balance).
9
(c) Measurement Funds. A Participant may elect one or more of the
measurement funds selected by the Committee in its sole discretion
(the "Measurement Funds"), based on certain mutual funds, for the
purpose of crediting or debiting additional amounts to his or her
Account Balance. As necessary, the Committee may, in its sole
discretion, discontinue, substitute or add a Measurement Fund. Each
such action will take effect as of the first day of the calendar
quarter that follows by thirty (30) days the day on which the
Committee gives Participants advance written notice of such change.
(d) Crediting or Debiting Method. The performance of each elected
Measurement Fund (either positive or negative) will be determined by
the Committee, in its reasonable discretion, based on the performance
of the Measurement Funds themselves. A Participant's Account Balance
shall be credited or debited on a daily basis based on the performance
of each Measurement Fund selected by the Participant, such performance
being determined by the Committee in its sole discretion.
(e) No Actual Investment. Notwithstanding any other provision of this Plan
that may be interpreted to the contrary, the Measurement Funds are to
be used for measurement purposes only, and a Participant's election of
any such Measurement Fund, the allocation to his or her Account
Balance thereto, the calculation of additional amounts and the
crediting or debiting of such amounts to a Participant's Account
Balance shall not be considered or construed in any manner as an
actual investment of his or her Account Balance in any such
Measurement Fund. In the event that the Company or the Trustee (as
that term is defined in the Trust), in its own discretion, decides to
invest funds in any or all of the Measurement Funds, no Participant
shall have any rights in or to such investments themselves. Without
limiting the foregoing, a Participant's Account Balance shall at all
times be a bookkeeping entry only and shall not represent any
investment made on his or her behalf by the Company or the Trust; the
Participant shall at all times remain an unsecured creditor of the
Company.
3.9 FICA and Other Taxes.
(a) Annual Deferral Amounts. For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the
Participant's Employer(s) shall withhold from that portion of the
Participant's Base Salary and Annual Incentive that is not being
deferred, in a manner determined by the Employer(s), the Participant's
share of FICA and other employment taxes on such Annual Deferral
Amount. If necessary, the Committee may reduce the Annual Deferral
Amount in order to comply with this Section 3.9.
(b) Company Contribution Amounts. When a participant becomes vested in a
portion of his or her Company Contribution Account, the Participant's
Employer(s) shall withhold from the Participant's Base Salary and/or
Annual Incentive that is not deferred, in a manner determined by the
Employer(s), the Participant's share of FICA and other employment
taxes. If necessary, the Committee may reduce the vested portion of
the Participant's Company Contribution Account in order to comply with
this Section 3.9.
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(c) Distributions. The Participant's Employer(s), or the trustee of the
Trust, shall withhold from any payments made to a Participant under
this Plan all federal, state and local income, employment and other
taxes required to be withheld by the Employer(s), or the trustee of
the Trust, in connection with such payments, in amounts and in a
manner to be determined in the sole discretion of the Employer(s) and
the trustee of the Trust.
ARTICLE 4
Short-Term Payout; Unforeseeable Financial Emergencies;
Withdrawal Election
4.1 Short-Term Payout. In connection with each election to defer an Annual
Deferral Amount, a Participant may irrevocably elect to receive a future
"Short-Term Payout" from the Plan with respect to all or a portion of such
Annual Deferral Amount, including amounts credited or debited in the manner
provided in Section 3.8 above on that amount. Subject to the Deduction
Limitation, the Short-Term Payout shall be a lump sum payment in an amount
that is equal to the portion of the Annual Deferral Amount the Participant
elected to have distributed to him or her as a Short-Term Payout plus
amounts credited or debited in the manner provided in Section 3.8 above on
that amount, determined at the time that the Short-Term Payout becomes
payable. Subject to the Deduction Limitation and the other terms and
conditions of this Plan, each Short-Term Payout elected shall be paid out
during a sixty (60) day period commencing immediately after the last day of
any Plan Year designated by the Participant that is at least three Plan
Years after the Plan Year in which the Annual Deferral Amount is actually
deferred. By way of example, if a three year Short-Term Payout is elected
for Annual Deferral Amounts that are deferred in the Plan Year commencing
January 1, 2002, the three year Short-Term Payout would become payable
during a sixty (60) day period commencing January 1, 2006.
4.2 Other Benefits Take Precedence Over Short-Term. Should an event occur that
triggers a benefit under Article 5, 6, 7 or 8, any Annual Deferral Amount,
plus amounts credited or debited thereon, that is subject to a Short-Term
Payout election under Section 4.1 shall not be paid in accordance with
Section 4.1 but shall be paid in accordance with the other applicable
Article.
4.3 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies. If
the Participant experiences an Unforeseeable Financial Emergency, the
Participant may petition the Committee to (i) suspend any deferrals
required to be made by a Participant and/or (ii) receive a partial or full
payout from the Plan. The payout shall not exceed the lesser of the
Participant's vested Account Balance, calculated as if such Participant
were receiving a Termination Benefit, or the amount reasonably needed to
satisfy the Unforeseeable Financial Emergency. If, subject to the sole
discretion of the Committee, the petition for a suspension and/or payout is
approved, suspension shall take effect upon the date of approval and any
payout shall be made within sixty (60) days of the date of approval. The
payment of any amount under this Section 4.3 shall not be subject to the
Deduction Limitation.
4.4 Withdrawal Election. Provided a Participant's vested Account Balance is
$25,000 or greater, a Participant (or, after a Participant's death, his or
her Beneficiary) may elect, at any time, to withdraw all of his or her
vested Account Balance, calculated as if there had occurred a Termination
11
of Employment as of the day of the election, less a withdrawal penalty
equal to 10% of such amount (the net amount shall be referred to as the
"Withdrawal Amount"). A Participant (or, after a Participant's death, his
or her Beneficiary) may also elect, at any time, to withdraw a minimum of
$25,000 or a larger portion of his or her vested Account Balance,
calculated as if there had occurred a Termination of Employment as of the
day of the election, less a withdrawal penalty equal to 10% of such amount
(the net amount shall be referred to as the "Withdrawal Amount"). This
election can be made at any time, before or after Retirement, Disability,
death or Termination of Employment, and whether or not the Participant (or
Beneficiary) is in the process of being paid pursuant to an installment
payment schedule. The Participant (or his or her Beneficiary) shall make
this election by giving the Committee advance written notice of the
election in a form determined from time to time by the Committee. The
Participant (or his or her Beneficiary) shall be paid the Withdrawal Amount
within sixty (60) days of his or her election. Once the Withdrawal Amount
is paid, the Participant's participation in the Plan shall be suspended for
the remainder of the Plan Year in which the withdrawal is elected. The
payment of this Withdrawal Amount shall not be subject to the Deduction
Limitation.
ARTICLE 5
Retirement Benefit
5.1 Retirement Benefit. Subject to the Deduction Limitation, a Participant who
Retires shall receive, as a Retirement Benefit, his or her vested Account
Balance.
5.2 Payment of Retirement Benefit. A Participant, in connection with his or her
commencement of participation in the Plan, shall elect on an Election Form
to receive the Retirement Benefit in a lump sum or pursuant to an Annual
Installment Method of 5, 10 or 15 years. The Participant may annually
change his or her election to an allowable alternative payout period by
submitting a new Election Form to the Committee, provided that any such
Election Form is submitted at least 13 months prior to the Participant's
Retirement and is accepted by the Committee in its sole discretion. The
Election Form most recently accepted by the Committee shall govern the
payout of the Retirement Benefit. If a Participant does not make any
election with respect to the payment of the Retirement Benefit, then such
benefit shall be payable in a lump sum. The lump sum payment shall be made,
or installment payments shall commence, no later than sixty (60) days after
the earlier of (i) the March 1st immediately following the Participant's
Retirement, or (ii) the September 1st immediately following the
Participant's Retirement. Any payment made shall be subject to the
Deduction Limitation.
5.3 Death Prior to Completion of Retirement Benefit. If a Participant dies
after Retirement but before the Retirement Benefit is paid in full, the
Participant's Beneficiary shall receive a lump sum payment that is equal to
the Participant's unpaid remaining vested Account Balance.
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ARTICLE 6
Pre-Retirement Survivor Benefit
6.1 Pre-Retirement Survivor Benefit. Subject to the Deduction Limitation, the
Participant's Beneficiary shall receive a Pre-Retirement Survivor Benefit
equal to the Participant's vested Account Balance if the Participant dies
before he or she Retires, experiences a Termination of Employment or
suffers a Disability.
6.2 Payment of Pre-Retirement Survivor Benefit. If a Participant dies before he
or she Retires, experiences a Termination of Employment or suffers a
Disability, the Pre-Retirement Survivor Benefit shall be paid to the
Participant's Beneficiary in a lump sum payment no later than sixty (60)
days after the last day of the Plan Year in which the Committee is provided
with proof that is satisfactory to the Committee of the Participant's
death. Any payment made shall be subject to the Deduction Limitation.
ARTICLE 7
Termination Benefit
7.1 Termination Benefit. Subject to the Deduction Limitation, the Participant
shall receive a Termination Benefit, which shall be equal to the
Participant's vested Account Balance if a Participant experiences a
Termination of Employment prior to his or her Retirement, death or
Disability.
7.2 Payment of Termination Benefit. The Participant's Termination Benefit shall
be paid in a lump sum payment; provided, however, that the Committee, in
its sole discretion, may pay a Participant's Termination Benefit pursuant
to an Annual Installment Method, over a number of years to be determined by
the Committee, but not to exceed five (5) years. The lump sum payment shall
be made, or installment payments shall commence, no later than sixty (60)
days after the last day of the Plan Year in which the Participant
experiences the Termination of Employment. Any payment made shall be
subject to the Deduction Limitation.
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ARTICLE 8
Disability Waiver and Benefit
8.1 Disability Waiver.
(a) Waiver of Deferral. A Participant who is determined by the Committee
to be suffering from a Disability shall be excused from fulfilling
that portion of the Annual Deferral Amount commitment that would
otherwise have been withheld from a Participant's Base Salary and/or
Annual Incentive for the Plan Year during which the Participant first
suffers a Disability. During the period of Disability, the Participant
shall not be allowed to make any additional deferral elections, but
will continue to be considered a Participant for all other purposes of
this Plan.
(b) Return to Work. If a Participant returns to employment with an
Employer after a Disability ceases, the Participant may elect to defer
an Annual Deferral Amount for the Plan Year following his or her
return to employment or service and for every Plan Year thereafter
while a Participant in the Plan; provided such deferral elections are
otherwise allowed and an Election Form is delivered to and accepted by
the Committee for each such election in accordance with Section 3.3
above.
8.2 Continued Eligibility; Disability Benefit. A Participant suffering a
Disability shall, for benefit purposes under this Plan, continue to be
considered to be employed and shall be eligible for the benefits provided
for in Articles 4, 5, 6 or 7 in accordance with the provisions of those
Articles. Notwithstanding the above, the Committee shall have the right to,
in its sole and absolute discretion and for purposes of this Plan only, and
must in the case of a Participant who is otherwise eligible to Retire, deem
the Participant to have experienced a Termination of Employment, or in the
case of a Participant who is eligible to Retire, to have Retired, at any
time (or in the case of a Participant who is eligible to Retire, as soon as
practicable) after such Participant is determined to be suffering a
Disability, in which case the Participant shall receive a Disability
Benefit equal to his or her vested Account Balance at the time of the
Committee's determination; provided, however, that should the Participant
otherwise have been eligible to Retire, he or she shall be paid in
accordance with Article 5. The Disability Benefit shall be paid in a lump
sum within sixty (60) days of the Committee's exercise of such right. Any
payment made shall be subject to the Deduction Limitation.
ARTICLE 9
Beneficiary Designation
9.1 Beneficiary. Each Participant shall have the right, at any time, to
designate his or her Beneficiary(ies) (both primary as well as contingent)
to receive any benefits payable under the Plan to a beneficiary upon the
death of a Participant. The Beneficiary designated under this Plan may be
the same as or different from the Beneficiary designation under any other
plan of an Employer in which the Participant participates.
14
9.2 Beneficiary Designation; Change. A Participant shall designate his or her
Beneficiary by completing and signing the Beneficiary Designation Form, and
returning it to the Committee or its designated agent. A Participant shall
have the right to change a Beneficiary by completing, signing and otherwise
complying with the terms of the Beneficiary Designation Form and the
Committee's rules and procedures, as in effect from time to time. Upon the
acceptance by the Committee of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be canceled. The Committee
shall be entitled to rely on the last Beneficiary Designation Form filed by
the Participant and accepted by the Committee prior to his or her death.
9.3 Acknowledgment. No designation or change in designation of a Beneficiary
shall be effective until received and acknowledged in writing by the
Committee or its designated agent.
9.4 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if all
designated Beneficiaries predecease the Participant or die prior to
complete distribution of the Participant's benefits, then the Participant's
designated Beneficiary shall be deemed to be his or her surviving spouse.
If the Participant has no surviving spouse, the benefits remaining under
the Plan to be paid to a Beneficiary shall be payable to the executor or
personal representative of the Participant's estate.
9.5 Doubt as to Beneficiary. If the Committee has any doubt as to the proper
Beneficiary to receive payments pursuant to this Plan, the Committee shall
have the right, exercisable in its discretion, to cause the Participant's
Employer to withhold such payments until this matter is resolved to the
Committee's satisfaction.
9.6 Discharge of Obligations. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to the
Participant, and that Participant's Plan Agreement shall terminate upon
such full payment of benefits.
ARTICLE 10
Leave of Absence
10.1 Paid Leave of Absence. If a Participant is authorized by the Participant's
Employer for any reason to take a paid leave of absence from the employment
of the Employer, the Participant shall continue to be considered employed
by the Employer and the Annual Deferral Amount shall continue to be
withheld during such paid leave of absence in accordance with Section 3.3.
10.2 Unpaid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take an unpaid leave of absence
from the employment of the Employer, the Participant shall continue to be
considered employed by the Employer and the Participant shall be excused
from making deferrals until the earlier of the date the leave of absence
expires or the Participant returns to a paid employment status. Upon such
expiration or return, deferrals shall resume for the remaining portion of
the Plan Year in which the expiration or return occurs, based on the
deferral election, if any, made for that Plan Year. If no election was made
for that Plan Year, no deferral shall be withheld.
15
ARTICLE 11
Termination, Amendment or Modification
11.1 Termination. Although each Employer anticipates that it will continue the
Plan for an indefinite period of time, there is no guarantee that any
Employer will continue the Plan or will not terminate the Plan at any time
in the future. Accordingly, each Employer reserves the right to discontinue
its sponsorship of the Plan and/or to terminate the Plan at any time with
respect to any or all of its participating Employees. Upon the termination
of the Plan with respect to any Employer, the Plan Agreements of the
affected Participants who are employed by that Employer shall terminate and
their Account Balances determined (i) as if they had experienced a
Termination of Employment on the date of Plan termination; or (ii) if Plan
termination occurs after the date upon which a Participant was eligible to
Retire, then with respect to that Participant as if he or she had Retired
on the date of Plan termination. Such benefits shall be paid to the
Participants as follows: (i) prior to a Change in Control, an Employer
shall have the right, in its sole discretion, and notwithstanding any
elections made by the Participant, to pay such benefits in a lump sum or
pursuant to an Annual Installment Method of up to five (5) years, with
amounts credited and debited during the installment period as provided
herein; or (ii) after a Change in Control, the Employer shall be required
to pay such benefits in a lump sum. The termination of the Plan shall not
adversely affect any Participant or Beneficiary who has become entitled to
the payment of any benefits under the Plan as of the date of termination;
provided however, that the Employer shall have the right to accelerate
installment payments without a premium or prepayment penalty by paying the
vested Account Balance in a lump sum or pursuant to an Annual Installment
Method using fewer years.
11.2 Amendment. Any Employer may, at any time, amend or modify the Plan in whole
or in part with respect to that Employer; provided, however, that: (i) no
amendment or modification shall be effective to decrease or restrict the
value of a Participant's vested Account Balance in existence at the time
the amendment or modification is made, calculated as if the Participant had
experienced a Termination of Employment as of the effective date of the
amendment or modification or, if the amendment or modification occurs after
the date upon which the Participant was eligible to Retire, the Participant
had Retired as of the effective date of the amendment or modification, and
(ii) no amendment or modification of this Section 11.2 or Section 12.2 of
the Plan shall be effective. The amendment or modification of the Plan
shall not affect any Participant or Beneficiary who has become entitled to
the payment of benefits under the Plan as of the date of the amendment or
modification; provided, however, that the Employer shall have the right to
accelerate installment payments by paying the vested Account Balance in a
lump sum or pursuant to an Annual Installment Method using fewer years.
11.3 Plan Agreement. Despite the provisions of Sections 11.1 and 11.2 above, if
a Participant's Plan Agreement contains benefits or limitations that are
not in this Plan document, the Employer may only amend or terminate such
provisions with the consent of the Participant.
11.4 Effect of Payment. The full payment of the applicable benefit under
Articles 4, 5, 6, 7 or 8 of the Plan shall completely discharge all
obligations to a Participant and his or her designated Beneficiaries under
this Plan and the Participant's Plan Agreement shall terminate.
16
ARTICLE 12
Administration
12.1 Committee Duties. Except as otherwise provided in this Article 12, this
Plan shall be administered by a Committee which shall consist of the Board,
or such other person(s) as the Board shall appoint. Members of the
Committee may be Participants under this Plan. The Committee shall also
have the discretion and authority to (i) make, amend, interpret, and
enforce all appropriate rules and regulations for the administration of
this Plan and (ii) decide or resolve any and all questions including
interpretations of this Plan, as may arise in connection with the Plan. Any
individual serving on the Committee who is a Participant shall not vote or
act on any matter relating solely to himself or herself. When making a
determination or calculation, the Committee shall be entitled to rely on
information furnished by a Participant or the Company.
12.2 Administration Upon Change In Control. For purposes of this Plan, the
Company shall be the "Administrator" at all times prior to the occurrence
of a Change in Control. Upon and after the occurrence of a Change in
Control, the "Administrator" shall be an independent third party selected
by the Trustee and approved by the individual who, immediately prior to
such event, was the Company's Chief Executive Officer or, if not so
identified, the Company's highest ranking officer (the "Ex-CEO"). The
Administrator shall have the discretionary power to determine all questions
arising in connection with the administration of the Plan and the
interpretation of the Plan and Trust including, but not limited to benefit
entitlement determinations; provided, however, upon and after the
occurrence of a Change in Control, the Administrator shall have no power to
direct the investment of Plan or Trust assets or select any investment
manager or custodial firm for the Plan or Trust. Upon and after the
occurrence of a Change in Control, the Company must: (1) pay all reasonable
administrative expenses and fees of the Administrator; (2) indemnify the
Administrator against any costs, expenses and liabilities including,
without limitation, attorney's fees and expenses arising in connection with
the performance of the Administrator hereunder, except with respect to
matters resulting from the gross negligence or willful misconduct of the
Administrator or its employees or agents; and (3) supply full and timely
information to the Administrator on all matters relating to the Plan, the
Trust, the Participants and their Beneficiaries, the Account Balances of
the Participants, the date of circumstances of the Retirement, Disability,
death or Termination of Employment of the Participants, and such other
pertinent information as the Administrator may reasonably require. Upon and
after a Change in Control, the Administrator may be terminated (and a
replacement appointed) by the Trustee only with the approval of the Ex-CEO.
Upon and after a Change in Control, the Administrator may not be terminated
by the Company.
12.3 Agents. In the administration of this Plan, the Committee may, from time to
time, employ agents and delegate to them such administrative duties as it
sees fit (including acting through a duly appointed representative) and may
from time to time consult with counsel who may be counsel to any Employer.
12.4 Binding Effect of Decisions. The decision or action of the Administrator
with respect to any question arising out of or in connection with the
17
administration, interpretation and application of the Plan and the rules
and regulations promulgated hereunder shall be final and conclusive and
binding upon all persons having any interest in the Plan.
12.5 Indemnity of Committee. The Company shall indemnify and hold harmless the
members of the Committee, any Employee to whom the duties of the Committee
may be delegated, and the Administrator against any and all claims, losses,
damages, expenses or liabilities arising from any action or failure to act
with respect to this Plan, except in the case of willful misconduct by the
Committee, any of its members, any such Employee or the Administrator.
12.6 Employer Information. To enable the Committee and/or Administrator to
perform its functions, the Company and each Employer shall supply full and
timely information to the Committee and/or Administrator, as the case may
be, on all matters relating to the compensation of its Participants, the
date and circumstances of the Retirement, Disability, death or Termination
of Employment of its Participants, and such other pertinent information as
the Committee or Administrator may reasonably require.
ARTICLE 13
Other Benefits and Agreements
13.1 Coordination with Other Benefits. The benefits provided for a Participant
and Participant's Beneficiary under the Plan are in addition to any other
benefits available to such Participant under any other plan or program for
employees of the Participant's Employer. The Plan shall supplement and
shall not supersede, modify or amend any other such plan or program except
as may otherwise be expressly provided.
ARTICLE 14
Claims Procedures
14.1 Presentation of Claim. Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below as a
"Claimant") may deliver to the Committee a written claim for a
determination with respect to the amounts distributable to such Claimant
from the Plan. If such a claim relates to the contents of a notice received
by the Claimant, the claim must be made within sixty (60) days after such
notice was received by the Claimant. All other claims must be made within
180 days of the date on which the event that caused the claim to arise
occurred. The claim must state with particularity the determination desired
by the Claimant.
14.2 Notification of Decision. The Committee shall consider a Claimant's claim
within a reasonable time, and shall notify the Claimant in writing:
(a) that the Claimant's requested determination has been made, and that
the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in whole or in
part, to the Claimant's requested determination, and such notice must
set forth in a manner calculated to be understood by the Claimant:
18
(i) the specific reason(s) for the denial of the claim, or any part
of it;
(ii) specific reference(s) to pertinent provisions of the Plan upon
which such denial was based;
(iii)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
(iv) an explanation of the claim review procedure set forth in Section
14.3 below.
14.3 Review of a Denied Claim. Within sixty (60) days after receiving a notice
from the Committee that a claim has been denied, in whole or in part, a
Claimant (or the Claimant's duly authorized representative) may file with
the Committee a written request for a review of the denial of the claim.
Thereafter, but not later than thirty (30) days after the review procedure
began, the Claimant (or the Claimant's duly authorized representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole discretion,
may grant.
14.4 Decision on Review. The Committee shall render its decision on review
promptly, and not later than sixty (60) days after the filing of a written
request for review of the denial, unless a hearing is held or other special
circumstances require additional time, in which case the Committee's
decision must be rendered within 120 days after such date. Such decision
must be written in a manner calculated to be understood by the Claimant,
and it must contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon which the
decision was based; and
(c) such other matters as the Committee deems relevant.
14.5 Legal Action. A Claimant's compliance with the foregoing provisions of this
Article 14 is a mandatory prerequisite to a Claimant's right to commence
any legal action with respect to any claim for benefits under this Plan.
ARTICLE 15
Trust
15.1 Establishment of the Trust. The Company shall establish the Trust, and each
Employer shall at least annually transfer over to the Trust such assets as
the Employer determines, in its sole discretion, are necessary to provide,
on a present value basis, for its respective future liabilities created
with respect to the Annual Deferral Amounts and Annual Company Contribution
Amounts for such Employer's Participants for all periods prior to the
transfer, as well as any debits and credits to the Participants' Account
Balances for all periods prior to the transfer, taking into consideration
the value of the assets in the trust at the time of the transfer.
19
15.2 Interrelationship of the Plan and the Trust. The provisions of the Plan and
the Plan Agreement shall govern the rights of a Participant to receive
distributions pursuant to the Plan. The provisions of the Trust shall
govern the rights of the Employers, Participants and the creditors of the
Employers to the assets transferred to the Trust. Each Employer shall at
all times remain liable to carry out its obligations under the Plan.
15.3 Distributions From the Trust. Each Employer's obligations under the Plan
may be satisfied with Trust assets distributed pursuant to the terms of the
Trust, and any such distribution shall reduce the Employer's obligations
under this Plan.
ARTICLE 16
Miscellaneous
16.1 Status of Plan. The Plan is intended to be a plan that is not qualified
within the meaning of Code Section 401(a) and that "is unfunded and is
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated
employee" within the meaning of ERISA Sections 201(2), 301(a)(3) and
401(a)(1). The Plan shall be administered and interpreted to the extent
possible in a manner consistent with that intent.
16.2 Unsecured General Creditor. Participants and their Beneficiaries, heirs,
successors and assigns shall have no legal or equitable rights, interests
or claims in any property or assets of an Employer. For purposes of the
payment of benefits under this Plan, any and all of an Employer's assets
shall be, and remain, the general, unpledged unrestricted assets of the
Employer. An Employer's obligation under the Plan shall be merely that of
an unfunded and unsecured promise to pay money in the future.
16.3 Employer's Liability. An Employer's liability for the payment of benefits
shall be defined only by the Plan and the Plan Agreement, as entered into
between the Employer and a Participant. An Employer shall have no
obligation to a Participant under the Plan except as expressly provided in
the Plan and his or her Plan Agreement.
16.4 Nonassignability. Neither a Participant nor any other person shall have any
right to commute, sell, assign, transfer, pledge, anticipate, mortgage or
otherwise encumber, transfer, hypothecate, alienate or convey in advance of
actual receipt, the amounts, if any, payable hereunder, or any part
thereof, which are, and all rights to which are expressly declared to be,
unassignable and non-transferable. No part of the amounts payable shall,
prior to actual payment, be subject to seizure, attachment, garnishment or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, be transferable by
operation of law in the event of a Participant's or any other person's
bankruptcy or insolvency or be transferable to a spouse as a result of a
property settlement or otherwise.
16.5 Not a Contract of Employment. The terms and conditions of this Plan shall
not be deemed to constitute a contract of employment between any Employer
and the Participant. Such employment is hereby acknowledged to be an "at
will" employment relationship that can be terminated at any time for any
reason, or no reason, with or without cause, and with or without notice,
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unless expressly provided in a written employment agreement. Nothing in
this Plan shall be deemed to give a Participant the right to be retained in
the service of any Employer, or to interfere with the right of any Employer
to discipline or discharge the Participant at any time.
16.6 Furnishing Information. A Participant or his or her Beneficiary will
cooperate with the Committee by furnishing any and all information
requested by the Committee and take such other actions as may be requested
in order to facilitate the administration of the Plan and the payments of
benefits hereunder, including but not limited to taking such physical
examinations as the Committee may deem necessary.
16.7 Terms. Whenever any words are used herein in the masculine, they shall be
construed as though they were in the feminine in all cases where they would
so apply; and whenever any words are used herein in the singular or in the
plural, they shall be construed as though they were used in the plural or
the singular, as the case may be, in all cases where they would so apply.
16.8 Captions. The captions of the articles, sections and paragraphs of this
Plan are for convenience only and shall not control or affect the meaning
or construction of any of its provisions.
16.9 Governing Law. Subject to ERISA, the provisions of this Plan shall be
construed and interpreted according to the internal laws of the
Commonwealth of Massachusetts without regard to its conflicts of laws
principles.
16.10Notice. Any notice or filing required or permitted to be given to the
Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address
below:
Deferred Compensation Plan Committee
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Thermo Electron Corporation
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81 Wyman Street
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Waltham, MA 02454
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or such other address as the Company indicates by notice to the
Participants.
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
Any notice or filing required or permitted to be given to a Participant
under this Plan shall be sufficient if in writing and hand-delivered, or
sent by mail, to the last known address of the Participant.
16.11Successors. The provisions of this Plan shall bind and inure to the benefit
of the Participant's Employer and its successors and assigns and the
Participant and the Participant's designated Beneficiaries.
16.12Spouse's Interest. The interest in the benefits hereunder of a spouse of a
Participant who has predeceased the Participant shall automatically pass to
the Participant and shall not be transferable by such spouse in any manner,
including but not limited to such spouse's will, nor shall such interest
pass under the laws of intestate succession.
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16.13Validity. In case any provision of this Plan shall be illegal or invalid
for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if
such illegal or invalid provision had never been inserted herein.
16.14Incompetent. If the Committee determines in its discretion that a benefit
under this Plan is to be paid to a minor, a person declared incompetent or
to a person incapable of handling the disposition of that person's
property, the Committee may direct payment of such benefit to the guardian,
legal representative or person having the care and custody of such minor,
incompetent or incapable person. The Committee may require proof of
minority, incompetence, incapacity or guardianship, as it may deem
appropriate prior to distribution of the benefit. Any payment of a benefit
shall be a payment for the account of the Participant and the Participant's
Beneficiary, as the case may be, and shall be a complete discharge of any
liability under the Plan for such payment amount.
16.15Court Order. The Committee is authorized to make any payments directed by
court order in any action in which the Plan or the Committee has been named
as a party. In addition, if a court determines that a spouse or former
spouse of a Participant has an interest in the Participant's benefits under
the Plan in connection with a property settlement or otherwise, the
Committee, in its sole discretion, shall have the right, notwithstanding
any election made by a Participant, to immediately distribute the spouse's
or former spouse's interest in the Participant's benefits under the Plan to
that spouse or former spouse.
16.16 Distribution in the Event of Taxation.
(a) In General. If, for any reason, all or any portion of a Participant's
benefits under this Plan becomes taxable to the Participant prior to
receipt, a Participant may petition the Committee before a Change in
Control, or the trustee of the Trust after a Change in Control, for a
distribution of that portion of his or her benefit that has become
taxable. Upon the grant of such a petition, which grant shall not be
unreasonably withheld (and, after a Change in Control, shall be
granted), a Participant's Employer shall distribute to the Participant
immediately available funds in an amount equal to the taxable portion
of his or her benefit (which amount shall not exceed a Participant's
unpaid vested Account Balance under the Plan). If the petition is
granted, the tax liability distribution shall be made within 90 days
of the date when the Participant's petition is granted. Such a
distribution shall affect and reduce the benefits to be paid under
this Plan.
(b) Trust. If the Trust terminates in accordance with its terms and
benefits are distributed from the Trust to a Participant in accordance
therewith, the Participant's benefits under this Plan shall be reduced
to the extent of such distributions.
16.17Insurance. The Employers, on their own behalf or on behalf of the trustee
of the Trust, and, in their sole discretion, may apply for and procure
insurance on the life of the Participant, in such amounts and in such forms
as the Employers may choose. The Employers or the trustee of the Trust, as
the case may be, shall be the sole owner and beneficiary of any such
insurance. The Participant shall have no interest whatsoever in any such
policy or policies, and at the request of the Employers shall submit to
medical examinations and supply such information and execute such documents
as may be required by the insurance company or companies to whom the
Employers have applied for insurance.
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IN WITNESS WHEREOF, the Company has signed this Plan document as of
November 1, 2001.
"Company"
Thermo Electron Corporation, a Delaware corporation
By:
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Title:
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