Exhibit 10.4
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New England Business Service, Inc.
Supplemental Executive Retirement Plan
____________________________________________________________
Effective January 4, 1999
As amended and restated effective April 25, 2003
NEW ENGLAND BUSINESS SERVICE, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
TABLE OF CONTENTS
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ARTICLE I ESTABLISHMENT OF THE PLAN
1.1 Name of Plan ...................................... 2
1.2 Effective Date...................................... 2
1.3 Purpose ........................................... 2
1.4 Restricted Coverage ................................ 2
1.5 Plan Unfunded ...................................... 2
ARTICLE II DEFINITIONS
2.1 "Accrued Benefit" ................................. 2
2.2 "Affiliate" ...................................... 3
2.3 "Average Final Compensation" ...................... 3
2.4 "Beneficial Owner" ................................ 3
2.5 "Benefit Commencement Date" ........................ 3
2.6 "Board" ........................................... 3
2.7 "Change in Control" ................................ 3
2.8 "Code" .......................................... 4
2.9 "Committee" ...................................... 4
2.10 "Company" .......................................... 4
2.11 "Disability (and "Disabled")........................ 4
2.12 "Early Retirement Date" ............................ 4
2.13 "Effective Date" ................................ 5
2.14 "Entry Date" ..................................... 5
2.15 "ERISA" .......................................... 5
2.16 "Exchange Act" ..................................... 6
2.17 "Executive" ....................................... 5
2.18 "Good Cause" ....................................... 5
2.19 "Normal Retirement Date" ........................... 6
2.20 "Participant" ..................................... 7
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TABLE OF CONTENTS
(continued)
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2.21 "Person" .......................................... 6
2.22 "Plan" ........................................... 6
2.23 "Plan Administrator" ............................. 6
2.24 "Plan Year" ...................................... 6
2.25 "Separation from Service" .......................... 6
2.26 "Service" .......................................... 6
2.27 "Surviving Spouse" ................................ 6
2.28 "Trust" .......................................... 6
2.29 "Vested Benefit" ................................. 6
2.30 "Vesting Percentage" ............................... 6
2.31 "Year of Benefit Service" .......................... 7
ARTICLE III PARTICIPATION
3.1 Eligibility Requirements............................ 7
3.2 Entry and Re-Entry Into the Plan ................... 7
ARTICLE IV RETIREMENT BENEFITS
4.1 Amount, Timing and Form of Benefits ............... 7
ARTICLE V VESTING AND FORFEITURES
5.1 Vesting Percentage ................................. 8
5.2 Vested Benefits .................................. 8
5.3 Forfeitures ..................................... 8
5.4 Amendment of Vesting Provisions .................... 8
5.5 Forfeiture of Vested Benefit ....................... 9
ARTICLE VI RETIREMENT BENEFIT
6.1 Normal Retirement Benefit ..........................10
6.2 Determination of Accrued Benefit ...................12
6.3 Adjustment for Early Retirement ....................10
6.4 Adjustment for Late Retirement ....................12
6.5 Disability Retirement ...........................13
ARTICLE VII PAYMENT OF BENEFIT
7.1 Eligibility for Payment ...........................13
7.2 Benefit Commencement Date ......................14
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Table of Contents
(continued)
ARTICLE VIII BENEFIT FORMS AVAILABLE
8.1 Forms of Benefits for Participants .................15
8.2 Life Annuity Benefit Election ......................15
ARTICLE IX DEATH BENEFITS
9.1 Death Prior to Benefit Commencement ................15
9.2 Death After Benefit Commencement .................16
ARTICLE X CHANGE IN CONTROL ELECTIONS
10.1 One Time Opportunity to Elect to Receive Lump Sum
Benefit Payment ....................................16
10.2 Calculation of Lump Sum Benefit Payment.............17
ARTICLE XI ADMINISTRATION
11.1 Plan Administration ................................17
11.2 Indemnification ................................18
11.3 Ownership of Assets ................................16
11.4 Expenses ..........................................16
ARTICLE XII TRUST AGREEMENT; LIQUIDITY FUND
12.1 Trust Fund .....................................17
12.2 Liquidity Fund .....................................17
ARTICLE XIII AMENDMENT OF THE PLAN
13.1 Amendment ..........................................17
13.2 Effect of Amendments on Vesting ...................17
ARTICLE XIV TERMINATION OF THE PLAN
14.1 Termination .....................................18
14.2 Benefits After Plan Termination .................18
ARTICLE XV MISCELLANEOUS
15.1 Limitations of Rights; Employment Relationship .....18
15.2 Determination of Benefits, Claims Procedure, and
Administration .....................................18
15.3 Arbitration ........................................20
15.4 NonAssignability of Benefits ......................20
15.5 Facility of Payments ............................21
15.6 Obligations to Withhold and Pay Taxes...............21
15.7 Representations ................................ 21
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Table of Contents
(continued)
15.8 Severability .....................................21
15.9 Applicable Law .....................................21
15.10 Successor Employers ...............................21
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ARTICLE I
ESTABLISHMENT OF THE PLAN
1.1 Name of Plan
The Plan shall be known as the New England Business
Service, Inc. Supplemental Executive Retirement Plan.
1.2 Effective Date
The Effective Date of the Plan is January 4, 1999 and
the Plan was amended and restated effective April 25,
2003.
1.3 Purpose
The Company intends this Plan to provide certain
retirement income benefits (as described herein) to
certain Executives (as identified from time to time in
the Appendix hereto or who otherwise become
Participants in accordance with the provisions of the
Plan). Such benefits are intended to supplement the
retirement income benefits provided to such
Participants by the Company through its other broad-
based retirement programs and Social Security benefits.
1.4 Restricted Coverage
Participation in this Plan shall be limited to
Executives, so that for purposes of Title I of ERISA
the Plan shall at all times cover only employees who
make up a select group of management or highly
compensated employees whose positions with the Company
allow them to have a significant effect on the
Company's results of operations by the performance of
services of major importance in the management,
operation, and development of the Company's business.
1.5 Plan Unfunded
This Plan is intended to be unfunded for purposes of
(a) Title I of ERISA and (b) taxation of vested accrued
benefits pursuant to the Code.
ARTICLE II
DEFINITIONS
The following terms shall have the meanings specified below
unless the context otherwise requires:
2.1 "Accrued Benefit"shall mean the portion of a Participant's
normal retirement benefit that has accrued as of any date
pursuant to Section 6.2.
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2.2 "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act.
2.3 "Average Final Compensation" shall mean the sum of (a)
the Participant's highest base salary during his final
five Plan Years of Service and (b) the average of a
Participant's bonuses for the three Plan Years in which
the Participant's greatest bonus is received during his
final five Plan Years of Service.
2.4 "Beneficial Owner" shall have the meaning set forth in Rule
13d-3 under the Exchange Act.
2.5 "Benefit Commencement Date" shall mean the date as of which
benefits hereunder first become payable, in accordance with
the provisions of Article VII, to or with respect to a
Participant.
2.6 "Board" shall mean the Board of Directors of the Company.
2.7 "Change in Control" shall be deemed to have occurred if any
of the events set forth in any one of the following paragraphs
shall have occurred:
(a) any Person is or becomes the Beneficial Owner, directly
or indirectly, of securities of the Company representing 35%
or more of either the then outstanding shares of common
stock of the Company or the combined voting power of the
Company's then outstanding securities, excluding any Person
who becomes such a Beneficial Owner in connection with a
transaction described in Section 2.7(c)(i);
(b) the following individuals cease for any reason to
constitute a majority of the number of directors then
serving: individuals who, on April 25, 2003 constitute the
Board and any new director (other than a director whose
initial assumption of office is in connection with an actual
or threatened election contest, including but not limited to
a consent solicitation, relating to the election of
directors of the Company) whose appointment or election by
the Board or nomination for election by the Company's
stockholders was approved or recommended by a vote of at
least two-thirds (2/3) of the directors then in office who
either were directors on April 25, 2003 or whose
appointment, election or nomination for election was
previously so approved or recommended;
(c) there is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company
with any other corporation, other than (i) a merger or
consolidation which would result in the voting securities of
the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity or any parent thereof) at least 60% of
the combined voting power of the securities of the Company
or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (ii) a
merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in
which no Person is or becomes the Beneficial Owner, directly
or indirectly, of securities of the Company (not including
in the securities Beneficially Owned by such Person any
securities acquired directly from the Company or its
Affiliates) representing 35% or more of the combined voting
power of the Company's then outstanding securities; or
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(d) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there
is consummated an agreement for the sale or disposition by
the Company of all or substantially all of the Company's
assets, other than a sale or disposition by the Company of
all or substantially all of the Company's assets to an
entity, at least 60% of the combined voting power of the
voting securities of which are owned by stockholders of the
Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.
(e) Notwithstanding the foregoing definition, a Change in
Control shall not be deemed to occur with respect to an
Executive or Participant if the Change in Control results in
the Executive or Participant, or a group of Persons which
includes the Executive or Participant, acquiring, directly
or indirectly, 35% or more of either the then outstanding
shares of common stock of the Company or the combined voting
power of the Company's then outstanding securities. An
Executive described in the preceding sentence who is not a
Participant shall not automatically become a Participant
pursuant to Section 3.1.
2.8 "Code" shall mean the Internal Revenue Code of 1986 as amended,
and including all regulations thereunder.
2.9 "Committee" shall mean the Organization and Compensation Committee of
the Board of Directors of the Company (or such other
committee appointed by the Board to administer the
Plan).
2.10 "Company" shall mean New England Business Service, Inc. and, in the
event of a Change in Control (but not for purposes of
the definition of Change in Control), each successor to
and assign of New England Business Service, Inc.
2.11 "Disability (and "Disabled") shall mean a Participant's inability,
on account of a physical or mental impairment or condition,
substantially to perform the material duties of his
position as an Executive despite reasonable
accommodations made or proposed by the Company,
provided that (a) such inability and impairment or
condition are established to the satisfaction of the
Board, and (b) the Participant is receiving benefits
under a Company Disability Plan.
2.12 "Early Retirement Date" shall mean the first day of any
month following the later of (a) the Participant's 55th
birthday and (b) either (i) the completion of his fifth
Year of Benefit Service, or (ii) his separation from
service either (A) upon or following the occurrence of
a Change in Control or (B) as the result of either a
Disability or an involuntary termination without Good Cause.
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2.13 "Effective Date" shall mean the date specified as such in
Section 1.2 above.
2.14 "Entry Date" shall mean the date on which an Executive becomes a
Participant in the Plan as provided in Article III.
2.15 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and including all regulations
thereunder.
2.16 "Exchange Act"shall mean the Securities Exchange Act of 1934,
as amended from time to time.
2.17 "Executive" shall mean any employee or corporate officer of the Company
who is a member of a select group of management or
highly compensated employees of the Company and who is,
except under the circumstances set forth in the second
sentence of Section 3.1, recommended for participation
in the Plan by the Chief Executive Officer of the
Company and approved by the Committee.
2.18 "Good Cause" shall mean a Participant's:
(a) Willful and continuing failure substantially to perform
duties assigned in good faith from time to time by the
Company, provided that such failure is not solely the result
of
(i) A Disability;
(ii) A leave of absence either granted in writing by the
Company or guaranteed by applicable law; or
(iii) Some other reason agreed to in advance by the
Board.
(b) Willful conduct which is demonstrably and materially
injurious to the Company.
(c) Conviction of a felony or a misdemeanor involving the
theft, misappropriation, or embezzlement of property of the
Company.
For purposes of this Section 2.18, the term "Board"
shall include the board of directors (or body with a
similar function) of the Company's successor following
a Change in Control. Notwithstanding the foregoing
definition, if a Participant is a party to an effective
written employment, change in control or similar
agreement that defines "cause" (or words of similar
meaning) and termination of employment "for cause"
gives rise to the denial or forfeiture of any benefit
under such agreement (or results in the Participant
being ineligible for a benefit under such agreement),
such termination shall be deemed to be a Separation
from Service for Good Cause for purposes of the Plan
with respect to such Participant.
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2.19 "Normal Retirement Date" shall mean the first day of the
month coincident with or next following a Participant's
65th birthday.
2.20 "Participant" shall mean any Executive who is covered by
this Plan in accordance with the provisions of Article III.
2.21 "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d)
and 14(d) thereof, except that such term shall not
include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of
its Affiliates, (iii) an underwriter temporarily
holding securities pursuant to an offering of such
securities and (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership
of stock of the Company.
2.22 "Plan" shall mean the New England Business Service, Inc.
Supplemental Executive Retirement Plan, as amended or
supplemented from time to time.
2.23 "Plan Administrator" shall mean the Committee.
2.24 "Plan Year" shall mean the Company's fiscal year, ending on the last
Friday of each June following the Effective Date while
this Plan remains in effect, provided that for purposes
of the definitions of "Average Final Compensation" and
"Year of Benefit Service," "Plan Year" shall include
all such periods before or after the Effective Date of
the Plan.
2.25 "Separation from Service" shall mean the termination of a
Participant's Service for any reason, including the death
of the Participant.
2.26 "Service" shall mean a Participant's period of employment with the
Company and its subsidiaries.
2.27 "Surviving Spouse" shall mean the spouse of a Participant
as of the earlier of (a) the Participant's Benefit Commencement
Date or (b) his date of death, entitled to received benefits under
the Plan as provided in Sections 8.1 and 9.2 of the
Plan.
2.28 "Trust" shall mean, in the event of a Change in Control, the trust
created under the New England Business Service, Inc.
Supplemental Executive Retirement Plan Trust Agreement.
2.29 "Vested Benefit" shall mean the portion of a Participant's
Accrued Benefit calculated in accordance with Article V of this Plan.
2.30 "Vesting Percentage" shall mean the percentage determined in
accordance with Section 5.1 of this Plan.
2.31 "Year of Benefit Service" shall mean, except as otherwise
specified in the appendix hereto, each Plan Year subsequent
to June 29, 1992 in which the Participant has any Service.
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In all instances throughout this document, the masculine
pronoun shall include the feminine pronoun, and the singular
shall include the plural.
ARTICLE III
PARTICIPATION
3.1 Eligibility Requirements
Only Executives shall be eligible to become and remain
Participants in the Plan. Except as provided in the
next sentence, an Executive shall become a Participant
only upon designation as a Participant in the Appendix
hereto by the Committee after recommendation by the
Chief Executive Officer. Notwithstanding the
foregoing, upon the occurrence of a Change in Control,
each Executive who is then a party to an effective
written change in control severance agreement with the
Company shall automatically become a Participant,
without further action by the Committee. A Participant
shall continue as a Participant for the purpose of
accruing additional benefits under the Plan only as
long as he remains in Service as an Executive of the
Company; provided that the Committee may allow a
Participant who is no longer an Executive of the
Company to continue as a Participant as long as the
Participant remains in Service. A Disabled Participant
remains a Participant as long as he is continuing to
accrue Benefit Service while Disabled under the
provisions of Section 6.5.
3.2 Entry and Re-Entry Into the Plan
An Executive shall become a Participant on the earlier
of (i) the effective date of his designation as a
Participant in the appendix hereto and (ii) the date of
a Change in Control (if such participation is provided
for on a Change in Control pursuant to Section 3.1).
If a Participant's Service is subsequently broken and
he is later re-employed as an Executive, he shall
resume his participation in the Plan only if he is
again designated as a Participant by the Committee on
an amended Appendix hereto and only on the effective
date of such new designation (or, if applicable, upon a
Change in Control subsequent to such re-employment).
ARTICLE IV
RETIREMENT BENEFITS
4.1 Amount, Timing and Form of Benefits
Except as set forth in Article X, a Participant who has
a Separation from Service after his Entry Date shall be
entitled to receive his Vested Benefit, as determined
in accordance with Articles V and VI, commencing on the
Participant's Benefit Commencement Date as determined
in accordance with Article VII, and payable in the form
provided in Article VIII.
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ARTICLE V
VESTING AND FORFEITURES
5.1 Vesting Percentage
Subject to Section 5.5, a Participant's Vesting
Percentage as of any date shall be 0% until the date on
which the first of the following events occurs and
thereafter it shall be 100%.
(a) A Change in Control occurs.
(b) The Participant incurs a Separation from Service,
either involuntarily without Good Cause or on account of
Disability or death.
(c) The Participant attains his Early Retirement Date.
(d) This Plan is terminated or is amended to materially
reduce the rate or amount of future benefit accruals
available to the Participant under Article VI or any
successor provision of the Plan; provided that in case of
such an amendment, only the Participant's Accrued Benefit as
of the effective date of the amendment shall become fully
vested, and the Participant's Vesting Percentage in any
subsequent benefit accruals shall not be affected.
5.2 Vested Benefits
Subject to Section 5.5, a Participant's Vested Benefit
under this Plan shall be the product of his Accrued
Benefit multiplied by his Vesting Percentage.
5.3 Forfeitures
Any portion of a Participant's Accrued Benefit that is not
included in his Vested Benefit at the time of his
Separation from Service shall be immediately forfeited.
If a Participant's Vested Benefit is reduced to zero
pursuant to Section 5.5, his Accrued Benefit shall be
forfeited immediately. Any amounts forfeited by a
Participant shall remain the sole and exclusive
property of the Company and shall not increase the
benefits of any other Participant.
5.4 Amendment of Vesting Provisions
No amendment to the Plan shall reduce a Participant's
Vested Benefit under the Plan. An amendment made prior
to a Change in Control may, however, increase the
Service required or impose or change any other
requirements or conditions that a Participant must meet
in order to become vested or further vested in any
Accrued Benefit to the extent not already vested as of
the date that the amendment is adopted. No such
amendment shall be permitted following a Change in
Control.
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5.5 Forfeiture of Vested Benefit
Notwithstanding anything to the contrary in this Plan,
the Vesting Percentage and the Vested Benefit of any
Participant shall be reduced to zero if, during the
period ending on the fifth anniversary of his
Separation from Service, the Participant either
provides Services to or obtains an Interest in any
Entity (other than a member of the Company Group) which
at the time of the Participant's Separation from
Service directly Competed with any member of the
Company Group. For purposes of this Section 5.5, the
following terms shall have the following meanings:
(a) "Compete" shall mean the offer or sale of the same
products and/or services as are offered or sold by any
member of the Company Group or the offer or sale of any
products and/or services that reasonably may be used in
substitution of any products and/or services offered or sold
by any member of the Company Group.
(b) "Company Group" shall mean the Company and all of its
direct and indirect "parent corporations" and "subsidiary
corporations" within the meaning of Code Sections 424(e) and
424(f) respectively.
(c) "Entity" shall refer to every possible type of entity,
whether organized as a proprietorship, partnership, limited
liability company, corporation or otherwise.
(d) "Interest" shall refer to every type of ownership
interest of a Participant in an Entity, whether as a
proprietor, partner, member, shareholder or otherwise.
(e) "Services" shall mean the provision of any type of
services to an Entity by a Participant, whether acting as a
director, officer, employee, proprietor, partner, member,
independent contractor, or otherwise.
Notwithstanding anything to the contrary in this
Section 5.5 with respect to any Participant the five-
year forfeiture period referred to above in this
section shall be reduced to the maximum lesser period
that an arbitrator or a court of competent jurisdiction
determines (in a final award or judgment all appeals
for which have either been exhausted or waived) to be
enforceable with respect to such Participant. No other
rights or obligations under this Plan of the Company or
of the prevailing Participant and no rights or
obligations under this Plan of any other Participant
shall be affected by operation of this paragraph with
respect to a Participant. Notwithstanding anything to
the contrary in this Section 5.5, the provisions of
this Section 5.5 shall not be effective with respect to
a Participant whose Separation from Service occurs
following a Change in Control in a manner which
entitles the Participant to severance payments and
benefits pursuant to an effective written change in
control Severance Agreement with the Company.
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ARTICLE VI
RETIREMENT BENEFIT
6.1 Normal Retirement Benefit
A Participant who retires on or after his Normal
Retirement Date shall be entitled to an annual
retirement income, paid monthly and continuing for the
Participant's lifetime, equal to the sum of (a) 2.75%
of his Average Final Compensation for each of his first
ten Years of Benefit Service, and (b) 2.00% of his
Average Final Compensation for each of his next five
Years of Benefit Service.
6.2 Determination of Accrued Benefit
A Participant's Accrued Benefit as of any date shall be
that benefit, commencing on his Normal Retirement Date,
determined as follows, based on his Average Final
Compensation as of the date of determination.
(a) If the Participant is eligible for Early Retirement
The benefit shall be calculated as provided in Section
6.1, but based on his Years of Benefit Service as
of the date of determination, except as may be
otherwise provided in a change in control severance
agreement between the Company and a Participant.
(b) If the Participant is not eligible for Early Retirement
The benefit shall be calculated as provided in Section 6.1,
but based on the Years of Benefit Service he is projected to
have earned as of his earliest Early Retirement Date
(assuming he remains in full time employment until that
date), multiplied by a fraction (not to exceed 1.0) whose
numerator is his Years of Benefit Service as of the date of
determination, and whose denominator is his projected Years
of Benefit Service as of his earliest Early Retirement Date.
Notwithstanding the above, following a Change in
Control, the Accrued Benefit of all Participants in the
Plan on the date of the Change in Control (including
those Executives who become Participants as a result of
the Change in Control pursuant to the second sentence
of Section 3.1) shall be determined under the
provisions of Section 6.2(a) only.
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6.3 Adjustment for Early Retirement
If a Participant retires on an Early Retirement Date,
his benefit from his Plan shall be his Accrued Benefit.
If the Participant elects to receive his retirement
benefit prior to his 62nd Birthday (other than pursuant
to Article X hereof), it shall be reduced one-half of
one percent for each month by which his Benefit
Commencement Date precedes his 62nd Birthday.
6.4 Adjustment for Late Retirement
If a Participant retires after his Normal Retirement
Date (the date of such retirement, the "Late Retirement
Date"), he shall receive a benefit calculated in
accordance with the provisions of Section 6.1, but
based upon his Benefit Service and his Average Final
Compensation as of his Late Retirement Date.
6.5 Disability Retirement
A Participant who is Disabled as provided in Section
2.11 shall be considered to be a retired employee on a
Disability Retirement.
(a) As long as the Participant is receiving benefits under
the Company's Long Term Disability Plan, he shall receive no
benefit payments from this Plan but shall continue to earn
credit for Years of Benefit Service.
(b) Upon reaching his Normal Retirement Date (or upon the
cessation of Long Term Disability Benefits, if later), he
shall cease earning credit for Years of Benefit Service and
shall commence receiving his Normal Retirement Benefit.
Such benefit shall be based upon his Average Final
Compensation as of his date of Disability, and Years of
Benefit Service accumulated through his Benefit Commencement
Date.
(c) A Participant on Disability Retirement who is
continuing to earn credit for Years of Benefit Service under
paragraph (a) above may, upon attainment of his Early
Retirement Date, elect to retire early. He shall thereafter
cease receiving credit for additional Service under
paragraph (a), and shall instead commence receiving an Early
Retirement benefit as determined under Section 6.3, based on
his Average Final Compensation as of his date of Disability,
and his Years of Benefit Service accumulated through his
date of Early Retirement.
ARTICLE VII
PAYMENT OF BENEFIT
7.1 Eligibility for Payment
Except as set forth in Article X hereof, a
Participant's benefits shall be paid from the Plan only
after both of the following conditions are met:
(a) The occurrence of a Participant's Separation from
Service.
(b) The Participant's attainment of his Early Retirement
Date.
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7.2 Benefit Commencement Date
(a) Time of Commencement
Except as set forth in Article X hereof, unless a
Participant or Surviving Spouse (as the case may be) has
made a timely election to defer payment with the approval of
the Committee pursuant to the provisions of paragraph (b) of
this Section 7.2, the Participant's Vested Benefit under
this plan shall be paid beginning 60 days after the date on
which the conditions of Section 7.1 are first met.
Notwithstanding the foregoing, at any time after a
Participant's Separation from Service and prior to the
earlier of
(i) payment or commencement of the Participant's benefit
pursuant to this Section 7.2, or
(ii) the date on which a Change in Control occurs,
the Company may elect unilaterally to defer payment or
commencement of all or any portion of the Participant's
Benefit until the next July following the Participant's
Separation from Service date if the Participant was a
"covered employee" within the meaning of Code Section
162(m) at the time of his Separation from Service. Any
such election by the Company may be made by the Board,
the Committee, or the Company's chief executive
officer, and shall be evidenced in writing and sent to
the Participant at his last known address.
(b) Benefit Commencement Election
Subject to the approval of the Committee, a Participant or
Surviving Spouse may make a one-time irrevocable election to
defer payment of benefits to a postponed Benefit
Commencement Date on any determinable date beyond the
Participant's initial Benefit Commencement Date determined
pursuant to paragraph (a) of this Section 7.2, provided that
such election is made on the form prescribed by the
Committee and is received by the Committee not later than 30
days before such initial Benefit Commencement Date. The
Committee shall have absolute discretion to approve,
disapprove, or modify before approving any such election to
defer benefits.
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ARTICLE VIII
BENEFIT FORMS AVAILABLE
8.1 Forms of Benefits for Participants
(a) If a Participant is Married on his Benefit Commencement
Date
Unless a Participant has made a timely election with the
approval of the Committee pursuant to Section 8.2 below to
waive the 50% joint and survivor benefit, the Participant's
benefit shall be paid as a 50% joint and survivor benefit,
under which the Participant shall receive an actuarially
reduced benefit for his lifetime, with 50% of that reduced
benefit continuing after his death to his Surviving Spouse
for the remainder of the Surviving Spouse's life.
(b) If the Participant is Not Married on his Benefit
Commencement Date
His benefit shall be paid as a life annuity, under which his
benefit as described in Section 6 shall be paid to him as
long as he shall survive, with no payments due after his
death.
8.2 Life Annuity Benefit Election
Subject to the Committee's approval, a married
Participant may make a one-time irrevocable election to
receive his retirement benefit from this Plan as a life
annuity, as described in Section 8.1(b). Any such
election shall be made on the form prescribed by the
Committee and must be received by the Committee no
later than 30 days before the benefit is to be paid
pursuant to Section 7.2 of the Plan (after taking into
account any election made by the Participant under
paragraph (b) of Section 7.2). The Committee shall have
absolute discretion to approve any such election by a
married participant to receive his benefit in the life
annuity form.
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ARTICLE IX
DEATH BENEFITS
9.1 Death Prior to Benefit Commencement
(a) Death On or After Eligibility for Early Retirement
Upon the death of a Participant on or after his eligibility
for an Early Retirement benefit, there shall be paid to his
Surviving Spouse an immediate lifetime income equal to the
benefit the spouse would have received had the Participant
retired on the day before his death, receiving the 50% joint
and survivor benefit described in Section 8.1 (a), and then
died on his actual date of death.
(b) Death Before Eligibility for Early Retirement
If the Participant is not yet eligible for Early Retirement
on his date of death, the benefit shall be the same as
described in Section 9.1 (a), except that it shall be
calculated as if the Participant were then the age at which
he would first have become eligible for Early Retirement had
he not died (but the amount of such benefit shall be
determined by the Participant's actual number of Years of
Benefit Service and his actual Average Final Compensation at
the time of his death). The Surviving Spouse benefit under
this Section 9.1(b) shall commence on the date the
Participant would have attained Early Retirement eligibility
had he survived.
9.2 Death After Benefit Commencement
Upon the death of a Participant after his Benefit
Commencement Date, there shall be no further benefits
due except as may be paid to a Surviving Spouse under
the 50% joint and survivor benefits pursuant to Section
8.l(a).
ARTICLE X
CHANGE IN CONTROL ELECTIONS
10.1 One Time Opportunity to Elect to Receive Lump Sum
Benefit Payment
Notwithstanding anything in the Plan to the contrary
(including, without limitation, the provisions of
Article VIII of the Plan), a Participant (other than a
Participant who has had a Separation from Service or
who has commenced to receive benefit payments
hereunder) may elect to receive the Participant's
Accrued Benefit in the form of a lump sum payment (the
"Lump-Sum Benefit Payment") if the Participant's
Separation from Service occurs following a Change in
Control in a manner which entitles the Participant to
severance payments and benefits pursuant to an
effective written change in control severance agreement
with the Company. Such Lump-Sum Benefit Payment shall
be paid to the Participant within 30 days following
such Participant's Separation from Service and shall be
in lieu of any benefit to which the Participant would
otherwise be entitled to pursuant to the Plan. Any
election to receive a Lump-Sum Benefit Payment shall be
made in writing and submitted by the Participant to the
Company at any time prior to the Participant's
Separation from Service and, unless otherwise provided
by the Committee, shall become effective upon the one
year anniversary of its submission, provided that the
Participant has not experienced a Separation from
Service prior to such effective date.
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10.2 Calculation of Lump Sum Benefit Payment
The Lump Sum Benefit Payment shall be calculated by the
Company's independent actuary and shall equal the
present value of the Participant's Accrued Benefit as
of the date of the Participant's Separation from
Service that would otherwise become payable on the
Participant's Normal Retirement Date (or, if later, the
date of the Participant's Separation from Service)
using, for purposes of such calculation, the 1994 Group
Annual Mortality Table and the annual interest rate on
30 year United States Treasury securities specified by
the Internal Revenue Service for purposes of Section
417(e) of the Code for the month which is two months
prior to the end of the Plan Year immediately preceding
the Plan Year in which such termination occurs.
ARTICLE XI
ADMINISTRATION
11.1 Plan Administration
The Committee shall be the Plan Administrator of this
Plan. Each member shall serve at the pleasure of the
Board. The Committee shall act by majority decision of
its members. The Committee shall have the
responsibility for the operation and administration of
the Plan and shall have the power and authority to:
(a) determine all matters relating to the eligibility of
persons to become Participants in the Plan;
(b) determine whether or not any Executive of the Company
has become a Participant in the Plan;
(c) determine whether and when the employment of any
Participant has been terminated and, to the extent material
to a determination of a benefit hereunder, the cause of such
termination;
(d) decide all questions which may arise from time to time
with respect to the rights under the Plan of Executives of
the Company, Participants, and any other persons who claim
to be entitled to benefits under the plan.
The Committee shall have exclusive discretionary
authority to construe and interpret the Plan document;
provided, however, that in exercising its powers and
duties the Committee shall give the same consideration
to Participants and beneficiaries in like
circumstances.
11.2 Indemnification
The Company agrees to indemnify and save harmless each
member of the Committee or in any other fiduciary
capacity from, against, for, and in respect of any and
all damages, losses, obligations, liabilities, liens,
deficiencies, attorneys' fees, costs and expenses
incident to the performance of such person's duties
unless resulting from the gross negligence, willful
misconduct, or lack of good faith of such individual.
Such indemnification shall apply to any such individual
even though at the time liability is imposed the
individual was no longer acting in a fiduciary capacity
or as a member of the Committee.
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11.3 Ownership of Assets
All amounts accrued under this Plan, all property and rights
purchased with such amounts, and all income
attributable to such amounts, property, or rights shall
remain (until made available to a Participant or
Surviving Spouse) solely the property and rights of the
Company (without being restricted to the provision of
benefits under this Plan), and shall be subject to the
claims of the general creditors of the Company. Except
after a Change in Control, no trust is created under
this Plan and it is not otherwise funded in any manner.
No Participant or Surviving Spouse shall have any
preferred claim on, or any beneficial ownership
interest in, any assets of the Company or any Accrued
Benefit under the Plan prior to the time such assets
are distributed as a Vested Benefit, and all rights
created under the Plan shall be mere unsecured
contractual rights. Notwithstanding the foregoing,
nothing in this Plan shall be construed to prohibit any
one or more Participants or Surviving Spouses from
purchasing insurance to protect against loss on account
of the provisions of this Section 11.3, and the Company
shall reasonably cooperate in any effort to obtain such
insurance, provided that any such insurance shall be
obtained, owned, and paid for solely by the insured
persons and not by the Company.
11.4 Expenses
The Company shall pay:
(a) its share of all fees and expenses incurred in
administering the Plan;
(b) all taxes imposed on the Company in connection with the
Plan; and
(c) all costs and expenses (including reasonable attorneys'
fees) incurred by each Participant and Surviving Spouse to
enforce the terms of the Plan against the Company or to
collect a Vested Benefit under the Plan from the Company.
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ARTICLE XII
TRUST AGREEMENT; LIQUIDITY FUND
12.1 Trust Fund
Except after a Change in Control, no assets of the
Company shall be held in trust for any purposes under
the Plan. Upon the occurrence of a Change in Control,
and from time to time (but at least once each Plan
Year) thereafter, the Company shall contribute to the
Trust assets sufficient actuarially to meet the
Company's liability for all Vested Benefits under the
Plan at each time that assets are contributed.
12.2 Liquidity Fund
The Company at its sole option may from time to time
maintain liquid assets representing all or any portion
of the value of its Participants' Accrued Benefits. Any
such liquidity fund shall be invested at the discretion
of the Committee, shall not be held in trust for any
Participant or Surviving Spouse (except as provided in
Section 12.1) and shall in all respects remain subject
to the provisions of Section 11.3.
ARTICLE XIII
AMENDMENT OF THE PLAN
13.1 Amendment
The Company reserves the right to amend the Plan at any
time and from time to time. Each amendment shall be
approved by the Committee or by the Board of Directors
of the Company. No amendment shall diminish or deprive
a Participant of any benefit already vested. The
Company may amend the Plan, and may do so retroactively
if necessary, to conform the Plan to mandatory
provisions of applicable laws or regulations or as
permitted by the Internal Revenue Service or the
Department of Labor.
13.2 Effect of Amendments on Vesting
Notwithstanding the provisions of the preceding Section
13.1, no amendment to the Plan's vesting provisions
shall reduce a Participant's Vested Benefit, determined
as of the later of (a) the date of execution of such
amendment, or (b) the effective date of such amendment.
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ARTICLE XIV
TERMINATION OF THE PLAN
14.1 Termination
The Company intends to continue the Plan indefinitely,
but it does not assume a contractual obligation to do
so, and the Company may terminate the Plan at any time,
provided that no such action of the Company shall
reduce any Participant's Vested Benefit.
14.2 Benefits After Plan Termination
Each Participant shall have the right to receive
payment of his Vested Benefits upon a complete
termination of the Plan, subject to any deferral
elections which the Participant may make pursuant to
the terms of the Plan. In no event shall any person
have recourse against the Company for any reason upon
termination of the Plan other than for non-payment of
Vested Benefits.
ARTICLE XV
MISCELLANEOUS
15.1 Limitations of Rights; Employment Relationship
The establishment of this Plan or any modification
thereof, or the accrual or vesting of any benefits, or
the creation of any fund or account, or the payment of
any benefits, shall not be construed as giving a
Participant or any other person any legal or equitable
right against the Company except as provided in this
Plan. In no event shall the terms of employment of any
employee be modified or in any way be affected by the
Plan.
15.2 Determination of Benefits, Claims Procedure, and
Administration
(a) Claim
A person who believes that he is being denied a benefit to
which he is entitled under the Plan (hereinafter referred to
as a "Claimant") may file a written request for such benefit
with the Company, setting forth his claim. The request must
be addressed to the Committee in care of the Company at its
then principal place of business.
(b) Decision on Claim
Upon receipt of a claim, the Committee shall advise the
Claimant that a reply will be forthcoming within 90 days and
shall, in fact, deliver such reply within such period. The
Committee may, however, extend the reply period for an
additional 90 days for a reasonable cause.
If the claim is denied in whole or in part, the Committee
shall adopt a written opinion, using language calculated to
be understood by the Claimant, setting forth:
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(i) the specific reason or reasons for such denial;
(ii) the specific reference to pertinent provisions of the
Plan on which such denial is based;
(iii) a description of any additional material or
information necessary for the Claimant to perfect his
claim, and an explanation of why such material or such
information is necessary;
(iv) appropriate information as to the steps to be taken if
the Claimant wishes to submit the claim for review; and
(v) the time limits for requesting a review and for
completing any such review.
(c) Request for Review
Within 60 days after the receipt by the Claimant of the
written opinion described above, the Claimant may request in
writing that the chief executive officer of the Company (or
his designee) review the determination of the Committee.
Such request must be addressed to the chief executive
officer of the Company at the Company's then principal place
of business. The Claimant or his duly authorized
representative may, but need not, review the pertinent
documents and submit issues and comments in writing for
consideration by the chief executive officer or his
designee. If the Claimant does not request a review of the
Committee's determination by the chief executive officer of
the Company within such 60 day period, he shall be barred
and estopped from challenging the Committee's determination.
(d) Review of Decisions
Within 60 days after receipt of a request for review, the
chief executive officer of the Company or his designee shall
review the Committee's determination. After considering all
materials presented by the Claimant, the chief executive
officer or his designee shall render a written opinion,
written in a manner calculated to be understood by the
Claimant, setting forth the specific reasons for a decision
and containing specific references to the pertinent
provisions of the Plan on which the decision is based. If
special circumstances require that the 60 day time period be
extended, the chief executive officer or his designee shall
so notify the Claimant and shall render the decision as soon
as possible, but not later than 120 days after receipt of
the request for review.
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15.3 Arbitration
Any dispute between any person claiming benefits or any
other rights under the Plan and the Company as to the
interpretation or application of the provisions of the
Plan and amounts payable hereunder that is not finally
resolved under the claims procedure described in
Section 15.2 of the Plan shall be determined
exclusively by binding arbitration in Groton,
Massachusetts in accordance with the Commercial
Arbitration Rules (and not in accordance with the
National Rules for the Resolution of Employment
Disputes) of the American Arbitration Association then
in effect. Judgment may be entered on the arbitrator's
award in any court of competent jurisdiction. All fees
of the arbitration shall be paid as directed by the
arbitrator. The Company shall pay its own expenses of
the arbitration, including reasonable attorney fees as
directed by the arbitrator.
The arbitrator shall be chosen by the parties, provided
however that if the parties cannot agree on a choice
within thirty (30) days after a demand for arbitration
made by either party, the choice of an arbitrator shall
be referred to the American Arbitration Association.
Unless the parties otherwise agree, the arbitrator
shall be a Massachusetts lawyer with at least fifteen
years of experience as a specialist in employee
benefits or employment law. The arbitrator shall
determine the arbitrability of the dispute if it is in
controversy. The arbitrator may consider and rule on
any dispositive motions submitted by the parties.
Discovery shall be limited to such pre-hearing exchange
of information as is explicitly authorized by Chapter
251 of the Massachusetts General Laws. The arbitrator
may further limit discovery to those items that in the
judgment of the arbitrator are essential to the
determination of the matters, in dispute. Except for
any stenographer and the arbitrator, attendance at the
arbitration shall be limited to the parties and their
counsel and witnesses. Except as necessary for
purposes of an action to enforce, modify, or vacate the
arbitration award, all documents and other information
submitted to the arbitrator, including any transcripts
of the proceedings shall be confidential and shall not
be disclosed to anyone other than the parties and their
counsel and other appropriate advisors.
15.4 NonAssignability of Benefits
Neither the Participant nor his Surviving Spouse shall
have any power or right to transfer, assign,
anticipate, hypothecate, or otherwise encumber any part
or all of the amounts payable hereunder, which are
expressly declared to be non-assignable and non-
transferable. Any such attempted assignment or
transfer shall be void. No amount payable under the
Plan shall, prior to actual payment thereof, be subject
to seizure by any creditor of any such person for the
payment of any debt, judgment, or other obligation, by
a proceeding at law or in equity, or be transferable by
operation of law in the event of the bankruptcy,
insolvency, divorce, or death of the Participant or his
Surviving Spouse.
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15.5 Facility of Payments
In the event that the Committee shall determine that
any person to whom a benefit is payable under the Plan
is unable to care for his affairs because of illness or
accident, or is otherwise mentally or physically
incompetent or unable to give a valid receipt, the
Committee may cause the payment becoming due to be paid
to the person's spouse, child, grandchild, parent,
brother or sister, or to any appropriate individual
appointed by a court of competent jurisdiction, or to
any person deemed by the Committee to have incurred
expense for such person otherwise entitled to payment.
15.6 Obligations to Withhold and Pay Taxes
Each Participant or other recipient of benefits under
the Plan shall be liable for all tax obligations, if
any, with respect to any sum received pursuant to the
Plan and for accurately reporting and paying in full
all such taxes to the appropriate federal, state, and
local authorities. The Company shall have the right to
deduct and withhold from any payment due under the Plan
or from other amounts owed to or with respect to the
Participant all withholding taxes and other amounts
required by law or as necessary to set off amounts owed
by the Participant to the Company.
15.7 Representations
The Company hereby does not represent or guarantee that
any particular federal, state or local income, payroll,
personal property, or other tax consequence will result
from participation in this Plan. A Participant should
consult with professional tax advisors to determine the
tax consequences of his participation.
15.8 Severability
If a court of competent jurisdiction holds any provision of
this Plan to be invalid or unenforceable, the remaining
provisions of the Plan shall continue to be fully
effective.
15.9 Applicable Law
This Plan shall be governed by and construed in
accordance with applicable federal law and, to the
extent not preempted by such federal law, the laws of
the Commonwealth of Massachusetts applicable to
contracts that are made and to be wholly performed in
such jurisdiction.
15.10 Successor Employers
This Plan shall enure to the benefit of and be binding
upon the Company and its successors.