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EXHIBIT 10.3A
AMENDMENT 1997-1
TO THE
FURON COMPANY
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
WHEREAS, Furon Company ("Company") maintains the Furon Company
Supplemental Executive Retirement Plan ("Plan"); and
WHEREAS, the Company has the right to amend the Plan;
NOW, THEREFORE, this Amendment 1997-1 is hereby adopted, as follows,
effective immediately:
1. The definition of "Earnings" in Section 1.6 of the Plan is
amended to read in its entirety as follows:
"1.6 'Earnings' means W-2 compensation, including annual
incentive pay and amounts deferred by the Participant under the Basic
Plan but excluding (a) non-recurring payments such as moving expenses
and (b) long-term incentive plan payments (such as any payout made
from the EVA Bank under the Company's Economic Value Added Incentive
Compensation Plan), and (c) income resulting from the exercise of
stock options. Earnings shall include compensation deferred by the
Participant in the year the compensation would have been paid but for
the election to defer the compensation. Earnings shall not include
compensation which was previously deferred when such previously
deferred compensation is actually paid."
2. The definition of "Event" as set forth in Section 1.7, is amended
to
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read in its entirety as follows:
"1.7 'Event' shall mean any of the following:
(a) The dissolution or liquidation of the Company;
(b) The merger, consolidation, or other reorganization of the Company
with or into one or more entities which are not 'Subsidiaries' (as defined
below), as a result of which 50% or less of the outstanding voting securities of
the surviving or resulting entity are, or are to be, owned by former
shareholders of the Company;
(c) The sale or transfer of substantially all of the Company's
business and/or assets to a person or entity which is not a Subsidiary; or
(d) A Change in Control. A 'Change in Control' shall be deemed to have
occurred if:
(i) any 'person', alone or together with all 'affiliates'
and 'associates' of such person is or becomes (A) an 'Acquiring
Person' as defined in the Rights Agreement, originally dated as of
March 21, 1989, by and between the Company and The Bank of New York,
successor Rights Agent, or (B) the 'beneficial owner' of 20% or more
of the outstanding voting securities of the Company (the terms
'person', 'affiliates', 'associates' and 'beneficial owner' are used
as such terms are used in the Securities Exchange Act of 1934 and the
General Rules and Regulations thereunder); provided, however, that a
'Change in Control' shall not be deemed to have occurred if such
'person' is the Company, any Subsidiary or any employee benefit plan
or employee stock plan of the Company or of any Subsidiary, or any
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trust or other entity organized, established or holding shares of such
voting securities by, for or pursuant to, the terms of any such plan;
or
(ii) individuals who at the beginning of any period of two
consecutive calendar years constitute the Board of Directors of the
Company (the "Board) cease for any reason, during such period, to
constitute at least a majority thereof, unless the election, or the
nomination for election by the Company's shareholders, of each new
Board member was approved by a vote of at least three-quarters of the
Board members then still in office who were Board members at the
beginning of such period.
'Subsidiary' shall mean any corporation or other entity of which more
than 50% of the outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Company. If the
approval of the shareholders of the Company for any of the occurrences
set forth in subsections (a) through (d) is obtained prior to such
occurrence, then such shareholder approval shall constitute the
Event."
3. Section 2.2 is amended to read in its entirety as follows:
"2.2 Except as otherwise specified in this Section 2.2, if a
Participant who is receiving, or may be entitled to receive, a benefit
hereunder engages in activities causing substantial competitive injury
to the Company (without prior authorization given by the Committee in
writing) or is discharged for cause, or performs acts of willful
malfeasance or gross negligence in a matter of material importance to
the Company, payments
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thereafter payable hereunder to such Participant or such Participant's
Surviving Spouse will be forfeited and the Company will have no
further obligation hereunder to such Participant or spouse.
Notwithstanding the foregoing, if an Event occurs, then no forfeiture
shall occur under this Section 2.2, unless, prior to the Event, the
Participant was provided a written notice from the Company containing
the following information:
(a) Such written notice must explicitly state that the
Participant's benefit under this Plan has been forfeited pursuant to
this Section 2.2; and
(b) Such written notice must set forth in reasonable detail
the specific facts leading to the conclusion that a forfeiture under
this Section 2.2 should occur.
If the Event occurs prior to date the Participant is provided the
notice described above, then the forfeiture shall not occur,
regardless of whether the facts which would otherwise have led to a
forfeiture occurred before, on or after the date of the Event."
4. The last sentence of Section 3.3 is amended to read in its entirety
as follows:
"Benefits may be payable in any other form requested by a Participant
and approved by the Committee for the particular Participant involved.
The Committee shall only approve another form of benefit if the
Committee determines that it would be in the best interests of the
Company to approve the other form of benefit. Any approval of a form
of
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benefit by the Committee shall apply only to the particular
Participant involved, and shall not create any right or entitlement of
any other Participant to receive a benefit in the same or a similar
form."
5. The third sentence of Section 7.1 is deleted and replaced with the
following:
"In the case of any other Participant, the cash lump-sum
benefit will equal the benefit the Participant would be entitled to
using (both for purposes of Sections 1.16 and 3.1) years of Service
determined as follows:
a. If the Participant had fewer than five actual years of
Service as of the date of the Event, the Participant will be deemed to
have a total of ten years of Service;
b. If the Participant had five or more actual years of
Service, but fewer than ten actual years of Service as of the date of
the Event, the Participant will be deemed to have the number of years
of Service equal to the Participant's actual years of Service plus
five years of Service; and
c. If the Participant had ten or more actual years of
Service as of the date of the Event, the Participant will be deemed to
have a total of fifteen years of Service."
6. Section 8.1 is amended to read in its entirety as follows:
"The Board of Directors may, at its sole discretion,
terminate, suspend or amend this Plan at any time or from time to
time, in whole or in part, except as specified in this Section 8.1.
Neither the termination of
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the Plan, nor its amendment, nor its suspension, may affect a
Participant's right or the right of a Surviving Spouse to receive any
benefit which had been earned through the date of such amendment,
termination or suspension, based upon Service through such date,
whether or not such benefit is then currently payable. Accordingly, if
the Plan is terminated, suspended, or amended, each Participant (and
the Surviving Spouse of each Participant) shall be entitled to
receive, at a minimum, a benefit calculated under the terms of the
Plan prior to such termination, suspension or amendment, according to
the Participant's Service as of the date of the termination,
suspension or amendment."
7. The following Appendix A is hereby added to the Plan:
"APPENDIX A"
SPECIAL PROVISIONS
Notwithstanding Section 1.16, the Vesting Percentage of
Dominick A. Arena shall be determined according to the following
table:
Completed
----------
Years of Service Vesting Percentage
---------------- ------------------
6 years 50%
7 years 60%
8 years 70%
9 years 80%
10 years 90%
11 years (age 65) 100%
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Should Mr. Arena reach his sixty-fifth birthday while
employed by the Company, his annual retirement income under Section
3.1 shall be calculated as if he had completed fifteen years of
Service.
Should an Event occur while Mr. Arena is employed by the
Company, then Mr. Arena's Vesting Percentage shall be the greater of
(a) 50%, or (b) the percentage determined according to the table above
by adding five years of Service to his actual years of Service."
IN WITNESS WHEREOF, this Amendment 1997-1 is hereby adopted this _____
day of __________________, 1997.
FURON COMPANY
By: _________________________
Its: _________________________