EXHIBIT 10(i)
Rev. 10/28/96
STANDEX INTERNATIONAL CORPORATION
EXECUTIVE SECURITY PROGRAM
STANDEX INTERNATIONAL CORPORATION
EXECUTIVE SECURITY PROGRAM
WHEREAS, STANDEX INTERNATIONAL CORPORATION, a Delaware
corporation with its executive offices at 6 Manor Parkway,
Salem, New Hampshire 03079 (hereinafter referred to as the
"Corporation") is desirous of assisting certain key
executives in saving for their retirement and in providing
benefits to their families in the event of death;
WHEREAS, the executives have unique and outstanding
abilities and have performed their duties in a capable and
efficient manner; and
WHEREAS, the Corporation desires to retain the services
of the executives;
NOW, THEREFORE, the following program of benefits is
hereby established for certain executives of the Corporation:
1. DEFINITIONS
The following words and phrases are used in the Program
and shall have the meanings set forth in this Section unless
a different meaning is clearly required by the context:
1.01 "Age" shall mean age at nearest birthday.
1.02 "Annual Earnings" shall mean all earnings and/or
net commissions of the Executive from the
Corporation paid or made available which are
reportable for Federal income tax purposes on Form
W-2, or its successor, but not including, any
reimbursement for expenses, or any income
attributable to any of the following:
(i) payment made by the Corporation in connection
with a relocation;
(ii) premiums paid by the Corporation for life
insurance coverage from the Corporation;
(iii) the exercise of any stock appreciation rights;
(iv) the exercise of any stock option;
(v) interest on a home purchase loan;
(vi) the use of any Corporation-leased automobile.
1.03 "Beneficiary" shall mean any individual(s) or legal
entity designated by an Executive to receive any
benefit arising under this Program upon the death
of such Executive.
1.04 "Change of Control" shall mean the purchase or
other acquisition by any person, entity or group of
persons, within the meaning of section 13(d) or
14(d) of the Securities Exchange Act of 1934 (the
"Act"), or any comparable successor provisions, of
beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Act) of 20 percent or
more of either the outstanding shares of common
stock or the combined voting power of the
Corporation's then outstanding voting securities
entitled to vote generally, or the approval by the
stockholders of the Corporation of a
reorganization, merger, or consolidation, in each
case, with respect to which persons who were
stockholders of the Corporation immediately prior
to such reorganization, merger or consolidation do
not, immediately thereafter, own more than 50
percent of the combined voting power entitled to
vote generally in the election of directors of the
reorganized, merged or consolidated Corporation's
then outstanding securities, or during any period
of twelve consecutive calendar months, individuals,
who were directors of the Corporation on the first
day of such period shall cease to constitute a
majority of the Board of Directors of the
Corporation, or a liquidation or dissolution of the
Corporation or of the sale of all or substantially
all of the Corporation's assets.
1.05 "Effective Date" shall mean January 1, 1982.
1.06 "Executive" shall mean any person who was either a
Division President or Senior Corporate officer of
the Corporation on the Effective Date or was an
Executive Vice President of the Corporation on
September 1, 1989 and who serves the Corporation in
one of these capacities up to his date of
retirement or death.
1.07 "Fiduciary" shall mean and include the Corporation
and any other entity or person who:
(a) exercises any discretionary authority or
exercises any authority or control respecting
management or disposition of assets under
this Program;
(b) renders investment advice for a fee or other
compensation, direct or indirect, with
respect to any monies or other property which
is an asset under this Program, or has any
authority or responsibility to do so; or
(c) is described as a "Fiduciary" in Section
3(14) or (21) of the Employee Retirement
Income Security Act of 1974 or is designated
to carry out Fiduciary responsibilities
pursuant to this Program.
1.08 "Program" shall mean this Executive Security
Program and the benefits for Executives
provided hereunder.
1.09 "Trust" shall mean any trust which is the
owner of one (or more) life insurance
contracts on the life of an Executive, which
contract(s) originally was purchased by the
Corporation.
2. PRE-RETIREMENT_BENEFITS
In the event of the death of an Executive while employed
by the Corporation, the Beneficiary shall be entitled to
receive a death benefit which is calculated by multiplying
the Annual Earnings of the Executive by a Death Benefit
Factor derived from the following schedule:
Age of Death
Executive Benefit
at Death Factor
Less than 45 years 4.5
45 to 49 years 4.0
50 to 54 years 3.5
55 and over years 3.0
The Annual Earnings of the Executive used in the above
calculation shall depend on whether the Executive's date of
death occurs before March 1st of any calendar year or on or
after March 1st. If the date of death is before March 1st in
any calendar year, the Annual Earnings used in the
calculation shall be the Annual Earnings of the calendar year
in which falls the day which is exactly two years prior to
the date of death. If the date of death is on or after March
1st in any calendar year, the Annual Earnings shall be those
of the immediately preceding calendar year.
Such pre-retirement death benefit shall be payable
pursuant to a life insurance contract maintained by the
Corporation or a Trust, only if and to the extent that the
life insurance contract provides for such payment, and any
balance of the pre-retirement death benefit shall be payable
directly by the Corporation and not pursuant to the life
insurance contract.
3. POST-RETIREMENT BENEFITS
In the event that the Executive's employment with the
Corporation shall terminate by reason of his retirement as
defined in Section 4 hereof, the post-retirement death
benefit payable to the Beneficiary in the event of the
Executive's subsequent death shall be an amount equal to
three times the Executive's Annual Earnings in either the
calendar year in which he retires or in the immediately
preceding calendar year (whichever year results in the
greater Annual Earnings).
The post-retirement death benefit shall be payable
pursuant to the life insurance contract only to the extent
that the life insurance contract provides for such payment.
The balance of the post-retirement death benefit shall be
payable directly by the Corporation and not pursuant to the
life insurance contract.
The Corporation in its sole and absolute discretion may
determine that, in lieu of the post-retirement death benefit
set forth in the immediately preceding two paragraphs, the
Executive shall receive supplemental retirement income
payable to the Executive in 120 equal monthly installments
commencing within 30 days after the Executive begins to
receive his pension under the Standex Retirement Plan. The
total amount of such retirement income shall equal the
post-retirement death benefit without discount to present
value. The amount of each monthly installment shall be the
post-retirement death benefit divided by 120.
In the event of the Executive's death while receiving
such supplemental retirement income, any unpaid monthly
payments shall be paid to the Beneficiary from the
Corporation or Trust in an undiscounted lump sum, if the
Beneficiary shall have survived the Executive. If the
Beneficiary shall not have survived the Executive, any unpaid
monthly payments shall be paid in an undiscounted lump sum to
the estate of the Executive.
4. RETIREMENT
For purposes of this Program, the date of retirement
shall mean the date an Executive has terminated employment
with the Corporation such that, under the Standex
International Corporation Retirement Plan, he is considered
as retired and receiving a pension. In addition, for
purposes of this Program, an Employee shall be deemed to have
retired on the date of a Change of Control of the Corporation
when within six months of the Change of Control the Executive
chooses to terminate his employment because of:
(i) a change in the Executive's general area of
responsibility, title or place of employment; or
(ii) the Executive's salary or benefits are lessened or
diminished.
5. DISTRIBUTION OF BENEFIT UPON A CHANGE OF CONTROL.
Upon a Change of Control of the Corporation, the
Corporation must pay within 5 calendar days, directly or
indirectly to the Insurer the maximum amount the Insurer will
accept as premium payments on the Policy existing on the
Participant's life. If the Corporation, in its reasonable
discretion determines that more funding is likely to be
necessary to pay the anticipated premiums on the Policy than
the Insurer will accept at that time, then these additional
sums will be paid by the Corporation into any trust which is
the owner of the Policy and exists at the relevant time. The
Trustee of the trust shall hold these additional sums and
invest them and pay from them to the Insurer annually or more
often, in the Trustee's discretion.
6. OFFSET FOR OBLIGATIONS TO CORPORATION.
If, at such time as the Participant becomes entitled to
receive Supplemental Retirement Income Benefit payments
pursuant to this Article 4, the Participant has any debt,
obligation or other liability representing an amount due and
owing to the Corporation, the Corporation may offset the
amount owed it against the amount of benefits otherwise
distributable hereunder.
7. LIFE INSURANCE
The Corporation or a Trust shall pay all premiums for
the life insurance contract mentioned in Sections 2 and 3
hereof.
The Corporation may, in its sole discretion, purchase
and be the owner of permanent insurance policies on the life
of an Executive. Any proceeds payable pursuant to such
corporate-owned insurance policies shall be payable to the
Corporation. By accepting this Program, the Executive agrees
to take any action required to enable the Corporation to
purchase and maintain such insurance.
8. NON-SECURED_PROMISE
Any asset or investment held by the Corporation or a
Trust in connection with the liabilities assumed by the
Corporation it hereunder shall be a general asset of the
Corporation, and shall not be pledged for the payment or to
secure any obligation of the Corporation, and the promise to
pay any benefit hereunder is a non-secured, general liability
of the Corporation. This Plan is intended to be unfunded
both for income tax purposes and for purposes of Title I of
the Employee Retirement Income Security Act of 1974.
9. ASSIGNMENT
No Executive nor any Beneficiary shall have any right to
commute, sell, assign, transfer, pledge or hypothecate or
otherwise convey the right to receive any payment hereunder
(whether by operation of law or otherwise) nor shall any such
rights be subject to execution, attachment or similar process.
Such payments and the right thereto are expressly declared to
be non-assignable and non-transferable. Any such attempted
assignment, transfer, levy of any attachment or similar process
shall have no effect or validity.
10. INDEPENDENCE OF PROGRAM
The benefits provided under this Program shall be
independent of, and in addition to, any other benefits provided
by the Corporation or any compensation payable by the
Corporation to the Executive. This Program shall not be deemed
to constitute a contract for services between the Corporation
and any Executive, nor shall any provision hereof restrict the
right of the Corporation to discharge an Executive or restrict
the right of an Executive to terminate his services.
11. NO VESTING OF BENEFITS
All benefits and all rights of each Executive covered
under this Program shall terminate in the event that the
Executive's employment with the Corporation shall terminate for
any reason other than death or retirement as provided in
Section 4.
12. RELATED TRUST(S).
If any Trust exists, the Trust itself and the
administration of all assets held by the Trust shall be
consistent with the terms of the model trust provided in
Internal Revenue Service Revenue Procedure 92-64.
13. WRITTEN MATERIALS.
Unless the Participant advises the Corporation in writing
that he does not want such material, the Corporation must give
a copy of all written materials received regarding the Policy
on the Participant's life to the Participant within thirty (30)
days of the Corporation's receipt of such material.
14. MODIFICATION OR REVOCATION OF PROGRAM
The Corporation reserves the right to modify or revoke
this Program in whole or in part at any time, provided that no
such modification or revocation shall reduce or terminate any
pre-retirement benefits or post-retirement benefits to an
Executive or his Beneficiary.
15. NAMED FIDUCIARY
15.01 THOMAS H. DEWITT, is hereby designated as the Named
Fiduciary of the Program, in accordance with the
Employee Retirement Income Security Act of 1974
(ERISA), and shall serve in such capacity until
resignation or removal by the Board of Directors of
the Corporation and appointment of a successor by
duly adopted resolution of the Board.
15.02 The Named Fiduciary shall have the authority to
control and manage the operation and administration
of the Program. However, the Named Fiduciary may in
his discretion allocate his responsibilities for the
operation and administration of the Program,
including the designation of persons who are not
Named Fiduciaries to carry out fiduciary
responsibilities. The Named Fiduciary shall effect
such allocation of his responsibilities by delivering
to the Corporation a written instrument signed by him
that specifies the nature and extent of the
responsibilities allocated, including, if
appropriate, the persons, not Named Fiduciaries, who
are designated to carry out fiduciary
responsibilities under the Program.
15.03 The Named Fiduciary designated or appointed under the
terms of Paragraph 15.01 above, is hereby designated
as the Plan Administrator of the Program.
16. CLAIMS PROCEDURE
The following Claims Procedure shall control the
determination of benefit payments under this Program:
16.01 Filing of a Claim for Benefits
If the Executive or his Beneficiary believes he is
entitled to receive benefits under the Program, he
must submit a written claim for benefits, on a form
supplied by said Fiduciary, to the Named Fiduciary.
The Named Fiduciary's independent decision on the
claimant's claim for benefits shall be
determinative of whether or not the Executive or
his Beneficiary shall be entitled to receive
benefits under this Program.
16.02 Denial of Claim
A claim for benefits under the Program will be
denied if the Named Fiduciary determines that the
claimant is not entitled to receive benefits under
the Program. Notice of a denial shall be furnished
to the claimant within a reasonable period of time
after receipt of the claim for benefits by the
Named Fiduciary.
16.03 Content of Notice
The Named Fiduciary shall provide to every claimant
who is denied a claim for benefits written notice
setting forth, in a manner reasonably calculated to
be understood by the claimant, the following:
(i) The specific reason or reasons for the
denial;
(ii) Specific reference to pertinent Program
provisions on which the denial is based;
(iii) A description of any additional material or
information necessary to the claimant to
perfect the claim, and an explanation of why
such material or information is necessary;
and
(iv) An explanation of the Program's Claim Review
Procedure as set forth below.
16.04 Review Procedure
The purpose of this Review Procedure is to provide
a method by which a claimant may have a reasonable
opportunity to appeal a denial of a claim to the
Named Fiduciary for a full and fair review. To
accomplish that purpose, the claimant or his duly
authorized representative:
(i) May request a review upon written application
to the Named Fiduciary;
(ii) May review pertinent Program documents; and
(iii) May submit issues and comments in writing.
A claimant (or his duly authorized representative)
shall request a review by filing a written
application for review with the Named Fiduciary at
any time within 60 days after receipt by the
claimant of written notice of the denial of his
claim.
16.05 Decision on Review
A decision on review of a denied claim shall be
made in the following manner:
(i) The decision on review shall be made by the
Salary and Employee Benefits Committee of the
Board of Directors of the Corporation, which
may in its discretion hold a hearing on the
denied claim. Such decision shall be made
promptly, and not later than 60 days after
receipt of the request for review, unless
special circumstances (such as the
determination to hold a hearing) make an
extension of time for processing helpful, in
which case a decision shall be rendered as
soon as possible, but not later than 120 days
after receipt of the request for review.
(ii) The decision on review shall be in writing
and shall include specific reasons for the
decision, written in a manner reasonably
calculated to be understood by the claimant,
and specific references to the pertinent
Program provisions upon which the decision is
based.
17. MISCELLANEOUS
The singular where used in this Program shall include
the plural and vice versa, wherever the context so requires.
Any provision in the masculine gender shall be defined where
appropriate to include the feminine or neuter gender.
18. GOVERNING LAW
It is the intention of the parties that this Program and
the performance of the parties hereunder and all suits and
special proceedings hereunder be construed in accordance with
and under and pursuant to the laws of the State of New
Hampshire and that in any action, special proceeding or other
proceeding that may be brought arising out of, in connection
with, or by reason of this Program, the laws of such State
shall be applicable and shall govern to the exclusion of the
law of any other forum, without regard to the jurisdiction in
which any action or special proceeding may be instituted. If
any provision of this Program shall be held invalid or
illegal for any reason, such determination shall not affect
the remaining provisions of this Program, and it shall be
construed as if said invalid or illegal provision had never
been included.