_________________________________________________________________
New England Business Service, Inc.
Supplemental Executive Retirement Plan
_________________________________________________________________
Effective January 4, 1999
<PAGE
NEW ENGLAND BUSINESS SERVICE, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
TABLE OF CONTENTS
_____________________________________________________________
ARTICLE I - ESTABLISHMENT OF THE PLAN
1.1 Name of Plan 1
1.2 Effective Date 1
1.3 Purpose 1
1.4 Restricted Coverage 1
1.5 Plan Unfunded 1
ARTICLE II - DEFINITIONS
2.1 Accrued Benefit 2
2.2 Average Final Compensation 2
2.3 Benefit Commencement Date 2
2.4 Board 2
2.5 Change in Control 2
2.6 Code 6
2.7 Committee 6
2.8 Company 6
2.9 Compensation 6
2.10 Disability 7
2.11 Early Retirement Date 7
2.12 Effective Date 7
2.13 Entry Date 7
2.14 ERISA 7
2.15 Executive 7
2.16 Good Cause 7
2.17 Incumbent Board 8
2.18 Normal Retirement Date 8
2.19 Participant 8
2.20 Plan 8
2.21 Plan Administrator 8
2.22 Plan Year 8
2.23 Separation from Service 8
2.24 Service 9
2.25 Surviving Spouse 9
TABLE OF CONTENTS
(continued)
_______________________________________________________________
ARTICLE II - DEFINITIONS (continued)
2.26 Trust 9
2.27 Vested Benefit 9
2.28 Vesting Percentage 9
2.29 Year of Benefit Service 9
ARTICLE III - PARTICIPATION
3.1 Eligibility Requirements 10
3.2 Entry and Re-Entry Into the Plan 10
ARTICLE IV - RETIREMENT BENEFITS
4.1 Amount, Timing, and Form of Benefits 11
ARTICLE V - VESTING AND FORFEITURES
5.1 Vesting Percentage 12
5.2 Vested Benefit 12
5.3 Forfeitures 12
5.4 Amendment of Vesting Provisions 12
5.5 Forfeiture of Vested Benefits 13
ARTICLE VI - RETIREMENT BENEFITS
6.1 Normal Retirement Benefit 15
6.2 Determination of Accrued Benefit 15
6.3 Adjustment for Early Retirement 16
6.4 Adjustment for Late Retirement 16
6.5 Disability Retirement 16
ARTICLE VII - BENEFIT COMMENCEMENT DATE
7.1 Eligibility for Payment 17
7.2 Benefit Commencement Date 17
ARTICLE VIII - BENEFIT FORMS AVAILABLE
8.1 Forms of Benefits for Participants 19
8.2 Life Annuity Benefit Election 19
TABLE OF CONTENTS
(continued)
_____________________________________________________________
ARTICLE IX - DEATH BENEFITS
9.1 Death Prior to Benefit Commencement 20
9.2 Death After Benefit Commencement 20
ARTICLE X - ADMINISTRATION
10.1 Plan Administration 21
10.2 Indemnification 21
10.3 Ownership of Assets 22
10.4 Expenses 22
ARTICLE XI - TRUST AGREEMENT; LIQUIDITY FUND
11.1 Trust Fund 23
11.2 Liquidity Fund 23
ARTICLE XII - AMENDMENT OF THE PLAN
12.1 Amendment 24
12.2 Effect of Amendment on Vesting 24
ARTICLE XIII - TERMINATION OF THE PLAN
13.1 Termination 25
13.2 Benefits after Plan Termination 25
ARTICLE XIV - MISCELLANEOUS
14.1 Limitations of Rights; Employment
Relationship 26
14.2 Determination of Benefits, Claims
Procedure, and Administration 26
14.3 Arbitration 27
14.4 Non-Assignability of Benefits 28
14.5 Facility of Payments 28
14.6 Obligations to Withhold and Pay Taxes 29
14.7 Representations 29
14.8 Severability 29
14.9 Applicable Law 29
14.10 Successor Employers 30
APPENDIX - DESIGNATION OF PARTICIPANTS 31
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.
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) of
the Company. Such benefits are intended to supplement the
retirement income benefits provided to a Participant 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.
1
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.
2.2 "Average Final Compensation" shall mean the sum of (a) the
Participant's annual base salary at the time of his
Separation from 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.
2.3 "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.
2.4 "Board" shall mean the Board of Directors of the Company.
2.5 "Change in Control" shall mean:
(a) The acquisition by any individual, entity, or group
(within the meaning of Sections 13(d)(3) or 14(d)(2) of the
Act) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Act) of 35% or
more of either
(i) the then outstanding shares of the
Company's common stock (the "Common Stock"), or
(ii) the combined voting power of the then
outstanding voting securities of the Company
entitled to vote generally in the election of
the directors (the "Outstanding Company Voting
Securities"); provided, however, that the
following acquisitions shall not constitute a
Change in Control:
(A) any acquisition directly from the
Company (excluding an acquisition by virtue
of the exercise of a conversion privilege);
2
(B) any acquisition by the Company or by
any corporation controlled by the Company;
(C) any acquisition by any employee
benefit plan (or related trust) sponsored
or maintained by the Company or any
corporation controlled by the Company; or
(D) any acquisition by any corporation
pursuant to a consolidation or merger, if,
following such consolidation or merger, the
conditions described in clauses (i), (ii),
and (iii) of subsection (c) of this Section
are satisfied; or
(b) Individuals who, as of the Effective Date,
constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to the Effective Date whose election, or
nomination for election by the Company's shareholders, was
approved by a vote or resolution of at least a majority of
the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a
result of either an actual or a threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(c) Adoption by the Board of a resolution approving an
agreement of consolidation of the Company with or merger of
the Company into another corporation or business entity in
each case, unless, following such consolidation or merger,
(i) more than 60% of, respectively, the then
outstanding shares of common stock of the
corporation resulting from such consolidation or
merger and/or the combined voting power of the
then outstanding voting securities of such cor
poration or business entity entitled to vote
generally in the election of directors (or other
persons having the general power to direct the
affairs of such entity) is then beneficially
owned, directly or indirectly, by all or sub
stantially all of the individuals and entities
who were the beneficial owners, respectively, of
the Common Stock and Outstanding Company Voting
Securities immediately prior to such
consolidation or merger in substantially the same
proportions as their ownership immediately prior
to such consolidation or merger of the
Common Stock and/or Outstanding Company Voting
Securities, as the case may be;
(ii) no Person, excluding
(A) the Company;
(B) any employee benefit plan (or related
trust) of the Company;
(C) such corporation or other business
entity resulting from such consoli
dation or merger, and
(D) any Person beneficially owning,
immediately prior to such consoli
dation or merger, directly or
indirectly, 35% or more of the Common
Stock and/or Outstanding Company
Voting Securities, as the case may
be,
beneficially owns, directly or indirectly,
35% or more of the then outstanding shares
of common stock of the corporation resulting
from such consolidation or merger, or the
combined voting power of the then out
standing voting securities of such
corporation or business entity entitled to
vote generally in the election of its
directors (or other persons having the
general power to direct the affairs of such
entity), and
(iii)at least a majority of the members of
the board of directors (or other group
of persons having the general power to direct
the affairs of the corporation or other
business entity) resulting from such
consolidation or merger were members of the
Incumbent Board at the time of the execution
of the initial agreement providing for such
consolidation or merger, provided that any
right which shall vest by reason of the
action of the Board pursuant to this
paragraph (c) shall be divested, with respect
to any such right not already exercised, upon
(A) the rejection of such agreement of
consolidation or merger by the stockholders
of the Company, or
(B) its abandonment by either party
thereto in accordance with its terms.
(d) Adoption by the requisite majority of the whole Board, or
by the holders of such majority of stock of the Company as
is required by law or by the Certificate of Incorporation
or By-Laws of the Company as then in effect, of a
resolution or consent authorizing
4
(i) the dissolution of the Company, or
(ii) the sale or other disposition of all or
substantially all of the assets of the Company,
other than to a corporation or other business
entity with respect to which following such sale
or other disposition,
(A) more than 60% of, respectively, the then
outstanding shares of common stock of such
corporation and/or the combined voting power
of the outstanding voting securities of
such corporation or other business entity
entitled to vote generally in the election
of directors (or other persons having the
general power to direct the affairs of such
entity) is then beneficially owned, directly
or indirectly, by all or substantially all
of the individuals and entities who were the
beneficial owners, respectively, of the
Stock and Outstanding Company Voting
Securities immediately prior to such sale or
other disposition in substantially the same
proportions as their ownership immediately
prior to such sale or other disposition of
the Stock and/or Outstanding Company Voting
securities, as the case may be,
(B) no Person (excluding the Company and any
employee benefit plan (or related trust) of
the Company or such corporation or other
business entity, and any Person
beneficially owning, immediately prior to
such sale or other disposition, directly or
indirectly, 35% or more of, the Common Stock
and/or Outstanding Company Voting
Securities, as the case may be) beneficially
owns, directly or indirectly, 35% or more
of the then outstanding shares of common
stock of such corporation and/or the
combined voting power of the then
outstanding voting securities of such
corporation or other business entity
entitled to vote generally in the election
of directors (or other persons having the
general power to direct the affairs of such
entity); and
(C) at least a majority of the members of the
board of directors (or other group of
persons having the general power to direct
the affairs of such corporation or other
entity) were members of the Incumbent Board
at the time of the execution of the initial
agreement or action
5
of the Board providing for such sale or
other disposition of assets of the Company;
provided that any right which shall vest by
reason of the action of the Board or the
stockholders pursuant to this paragraph (d)
shall be divested, with respect to any such
right not already exercised, upon the
abandonment of the Company of such
dissolution, or such sale or other
disposition of assets, as the case may be.
A Change in Control shall not occur upon the mere re-incorporation
of the Company in another state.
2.6 "Code" shall mean the Internal Revenue Code of 1986 as amended,
and including all regulations thereunder.
2.7 "Committee" shall mean the Organization and Compensation
Committee of the Board of Directors of the Company.
2.8 "Company" shall mean New England Business Service, Inc. and, in
the event of a Change in Control, each successor to and assign of New
England Business Service, Inc.
2.9 "Compensation" shall mean those elements of a Participant's
total remuneration from the Company which are pensionable under this
Plan.
(a) Compensation shall include only base salary and bonuses
earned by a Participant for personal services rendered to
the Company for any Plan Year, regardless of when such
remuneration is actually paid (or would be paid if not
deferred pursuant to any deferred compensation plan).
Compensation shall include:
(i) amounts deferred under any deferred compensation
plan, and
(ii) amounts contributed from the Participant's
remuneration under any plan maintained by the
Company pursuant to Code Sections 125, 132, or
401(k).
(b) Compensation shall not include:
(i) employer contributions to any employee benefit
plan (including without limitation this Plan) and
all benefits provided under any such plan, and
6
(ii) the value of or any income from any types of
equity-based compensation programs (including
without limitation stock options, stock
appreciation rights, and restricted stock)
except for the portion of any bonus paid in the
medium of Company Stock.
2.10 "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.
2.11 "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.
2.12 "Effective Date" shall mean the date specified as such in
Section 1.2 above.
2.13 "Entry Date" shall mean the date on which an Executive becomes
a Participant in the Plan as provided in Article III.
2.14 "ERISA" shall mean Public Law No. 93-406, the Employee
Retirement Income Security Act of 1974, as amended, and including all
regulations thereunder.
2.15 "Executive" shall mean any employee of the Company who is a
member of a select group of management or highly compensated employees
of the Company, and who is recommended for participation in the Plan by
the Chief Executive Officer of the Company and approved by the
Committee.
2.16 "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
7
(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 2.16, 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.
2.17 "Incumbent Board" shall mean the Board, as defined in Section
2.5, which is in place as of the Effective Date of this Plan.
2.18 "Normal Retirement Date" shall mean the first day of the month
coincident with or next following a Participant's 65th birthday.
2.19 "Participant" shall mean any Executive who is covered by this
Plan in accordance with the provisions of Article III.
2.20 "Plan" shall mean the New England Business Service, Inc.
Supplemental Executive Retirement Plan, as stated herein and as amended
or supplemented from time to time.
2.21 "Plan Administrator" shall mean the committee appointed to
administer the Plan pursuant to Section 10.1 of this Plan.
2.22 "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.
8
2.23 "Separation from Service" shall mean the termination of a
Participant's Service for any reason, including the death of the
Participant.
2.24 "Service" shall mean a Participant's period of employment with
the Company.
2.25 "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 9.1 of the Plan.
2.26 "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.
2.27 "Vested Benefit" shall mean the portion of a Participant's
Accrued Benefit calculated in accordance with Article V of this Plan.
2.28 "Vesting Percentage" shall mean the percentage determined in
accordance with Section 5.1 of this Plan.
2.29 "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.
In all instances throughout this document, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural.
9
ARTICLE III
PARTICIPATION
_______________________________________________________________________
3.1 Eligibility Requirements
Only Executives shall be eligible to become and remain Participants
in the Plan. 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. 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. 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 effective date of
his designation as a Participant in the Appendix hereto. 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.
10
ARTICLE IV
RETIREMENT BENEFITS
_______________________________________________________________________
4.1 Amount, Timing, and Form of Benefits
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.
11
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, unless such Change in Control
was approved by a resolution adopted by at least a
majority of the members of the Incumbent Board (as defined
in Section 2.5).
(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.
5.2 Vested Benefit
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 may, however, increase the Service
required or impose or change any
12
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.
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 earlier of the fifth
anniversary of his Separation from Service and the effective date of a
Change in Control, the Participant either provides Services to or
obtains an Interest in any Entity 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.
13
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.
14
ARTICLE VI
RETIREMENT BENEFITS
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.
(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 shall he determined under the provisions of Section
6.2(a) only.
15
6.3 Adjustment for Early Retirement
If a Participant retires on an Early Retirement Date, his benefit
from this Plan shall be his Accrued Benefit. If the Participant elects
to receive his retirement benefit prior to his 62nd Birthday, 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, 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 2.10 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.
16
ARTICLE VII
PAYMENT OF BENEFIT
________________________________________________________________________
7.1 Eligibility for Payment
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.
7.2 Benefit Commencement Date
(a) Time of Commencement
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.
17
(b) Benefit Commencement Election
Subject to the approval of the Committee (as defined in
Section 10.1), 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.
18
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 cal-
culated 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 8.1(a).
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ARTICLE X
ADMINISTRATION
_______________________________________________________________________
10.1 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.
10.2 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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10.3 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 10.3,
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.
10.4 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.
22
ARTICLE XI
TRUST AGREEMENT; LIQUIDITY FUND
________________________________________________________________________
11.1 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.
11.2 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, and shall in all respects
remain subject to the provisions of Section 10.3.
23
ARTICLE XII
AMENDMENT OF THE PLAN
______________________________________________________________________
12.1 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 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.
12.2 Effect of Amendments on Vesting
Notwithstanding the provisions of the preceding Section 12.1, 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.
24
ARTICLE XIII
TERMINATION OF THE PLAN
________________________________________________________________________
13.1 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.
13.2 Benefits After Plan Termination
In the event that the Company shall terminate the Plan in whole or
in part, the rights of nonvested Participants to benefits accrued under
the Plan as of the date of such termination shall remain unvested unless
the Plan is specifically amended to provide for additional partial or
full vesting. 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.
25
ARTICLE XIV
MISCELLANEOUS
14.1 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.
14.2 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:
(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;
26
(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.
14.3 Arbitration
27
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 14.2 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 and expenses of
such arbitration shall be paid by the Company.
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.
14.4 Non-Assignability 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.
28
14.5 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.
14.6 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.
14.7 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.
14.8 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.
14.9 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
29
Massachusetts applicable to contracts that are made and to be wholly
performed in such jurisdiction.
30
14.10 Successor Employers
This Plan shall enure to the benefit of and be binding upon the
Company and its successors.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed
under seal by its duly authorized representative this 2nd day of
November, 1998.
NEW ENGLAND BUSINESS SERVICE, INC.
By: /s/ Robert J. Murray
Title: Chairman, President and Chief Executive Officer
(Seal)
31
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