EXHIBIT 10.27
[LOGO OF ATL]
ADVANCED TECHNOLOGY LABORATORIES, INC.
SUPPLEMENTAL BENEFIT PLAN B
AMENDED AND RESTATED
EFFECTIVE JANUARY 1, 1996
TABLE OF CONTENTS
Page
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PREAMBLE................................................................... 1
ARTICLE 1 - PURPOSE........................................................ 2
1.1 Purpose.......................................................... 2
ARTICLE 2 - DEFINITIONS.................................................... 3
2.1 Code............................................................. 3
2.2 Company.......................................................... 3
2.3 Compensation Committee........................................... 3
2.4 Disabled......................................................... 3
2.5 Earnings......................................................... 3
2.6 Participant...................................................... 3
2.7 Plan............................................................. 3
2.8 Retirement....................................................... 3
2.9 Retirement Plan.................................................. 3
2.10 Subsidiaries.................................................... 3
2.11 Supplemental Benefit Plan A..................................... 3
2.12 Surviving Spouse................................................ 3
ARTICLE 3 - ADMINISTRATION................................................. 4
3.1 Compensation Committee........................................... 4
3.2 Benefits Committee............................................... 4
3.3 Expenses......................................................... 4
ARTICLE 4 - PARTICIPATION.................................................. 5
4.1 Retirement Plan Participants..................................... 5
4.2 Retirement Plan Benefit.......................................... 5
4.3 Other Participants............................................... 5
4.4 Limitation on Participation...................................... 5
ARTICLE 5 - BENEFITS....................................................... 6
5.1 Supplemental Pension Benefits.................................... 6
5.2 Other Supplemental Pension Benefits.............................. 6
5.3 Spouse's Death Benefits.......................................... 7
5.4 Disability Benefits.............................................. 7
ARTICLE 6 - PAYMENT OF BENEFITS............................................ 8
6.1 Payment of Benefits.............................................. 8
6.2 Commencement of Payment.......................................... 8
ARTICLE 7 - GENERAL PROVISIONS............................................. 9
7.1 Unfunded Obligation.............................................. 9
7.2 Nonassignment.................................................... 9
7.3 No Right to Continued Employment................................. 9
7.4 Withholding Taxes................................................ 9
7.5 Termination and Amendment........................................ 9
7.6 ERISA Exemption..................................................10
7.7 Applicable Law...................................................10
SIGNATURE PAGE............................................................ 10
APPENDIX A................................................................ 11
APPENDIX B................................................................ 12
PREAMBLE
THIS ADVANCED TECHNOLOGY LABORATORIES, INC. SUPPLEMENTAL BENEFIT PLAN B
(the "Plan B") formerly known as the Advanced Technology Laboratories, Inc.
Supplemental Benefit Plan (the "Plan") and now known as the Advanced Technology
Laboratories, Inc. Supplemental Benefits Plan B is amended and restated
effective January 1, 1996, by Advanced Technology Laboratories, Inc. (the
"Company"), a Washington corporation.
WHEREAS, the Plan was adopted by Westmark International Incorporated
effective January 1,1989; and
WHEREAS, effective June 26, 1992, the corporate name of Westmark
International Incorporated was changed to Advanced Technology Laboratories,
Inc., and the Plan was amended and restated as the Advanced Technology
Laboratories, Inc. Supplemental Benefit Plan; and
WHEREAS, effective January 1, 1994, the Plan was amended and restated to
effect certain changes; and
WHEREAS, the Company desires to divide the Plan into two plans in response
to the Pension Income Tax Limits Act effective January 1, 1996, Act of January
10, 1996, Public Law No. 104-95, 109 Stat. 979, 4 U.S.CA Section 114, with
Advanced Technology Laboratories, Inc. Supplemental Benefit Plan A providing
excess benefits in compliance with Section 114(b)(1)(I)(ii) of the Pension
Income Tax Limits Act, and this Plan B providing benefits outside the scope of
the Pension Income Tax Limits Act including benefits resulting from the
recharacterization of some MICP earnings to a subsequent year; and
NOW THEREFORE, the Company does hereby amend and restate the January 1,
1994 Plan as set forth in the following pages, effective January 1, 1996, except
as otherwise specified herein.
1
ARTICLE 1
PURPOSE
1.1 Purpose
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The purpose of this Advanced Technology Laboratories, Inc. Supplemental
Benefit Plan B (the "Plan") is to retain exceptional executives by
providing retirement to key executives.
2
ARTICLE 2
DEFINITIONS
For purposes of this Plan, the following terms shall have the meanings
indicated:
2.1 "Code" means the Internal Revenue Code of 1986 as amended.
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2.2 "Company" means Advanced Technology Laboratories, Inc., a Washington
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Corporation.
2.3 "Compensation Committee" means the committee defined in Section 3.1 of this
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Plan.
2.4 "Disabled" has the same meaning as provided in the
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Retirement Plan.
2.5 "Earnings" has the same meaning as provided in the Retirement Plan except
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as provided in Sections 4.2 and 5.1.
2.6 "Participant" means each individual who participates in the Plan in
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accordance with Article 4.
2.7 "Plan" means the Advanced Technology Laboratories, Inc. Supplemental
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Benefit Plan B as set forth in this document and in any amendments made
from time to time.
2.8 "Retirement", for a Participant who is entitled to a benefit under the
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Retirement Plan, means his or her "Retirement Date" or "Vested Termination
Date" as defined in the Retirement Plan. In the case of a Participant who
is not entitled to a benefit under the Retirement Plan, "Retirement" means
the later of the date the Participant attains age 55 or terminates
employment with the Company and its Subsidiaries.
2.9 "Retirement Plan" means the Advanced Technology Laboratories, Inc.
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Retirement Plan and Trust.
2.10 "Subsidiaries" means (i) wholly owned subsidiaries of the Company and (ii)
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those subsidiaries of which 50% or more is owned by the Company and which
are specifically designated by the Compensation Committee as participating
employers in this Plan.
2.11 "Supplemental Benefit Plan A" means the Advanced Technology Laboratories,
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Inc. Supplemental Benefit Plan A providing benefits in excess of Code
limits.
2.12 "Surviving Spouse" means the spouse of a Participant, provided that the
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Participant was married to the spouse throughout the one-year period ending
on the date of the Participant's death.
3
ARTICLE 3
ADMINISTRATION
3.1 Compensation Committee
----------------------
The Compensation Committee, appointed by the Company's Board of Directors,
shall, except as otherwise authorized by the Board of Directors, consist of
directors who are not employed by the Company or its Subsidiaries. The
Compensation Committee shall have the exclusive authority to:
(a) designate individuals to participate in the Plan pursuant to Section
4.3, in addition to those individuals who automatically become
Participants pursuant to Section 4.1; and
(b) designate non-wholly owned Subsidiaries which shall be participating
employers in the Plan, which shall be listed in Appendix A to this
Plan.
Decisions by the Compensation Committee shall be final and binding upon all
parties. The Chairman of the Compensation Committee is authorized to
execute any documents and amendments to the Plan on behalf of the Company.
3.2 Benefits Committee
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The Benefits Committee appointed by the Compensation Committee to
administer the Retirement Plan shall perform all such duties as are
necessary to supervise the administration of the Plan and to control its
operation in accordance with the terms thereof, including, but not limited
to, the following:
(a) engage such legal, accounting, actuarial and other professional
services as it may deem proper; and
(b) approve documents and amendments to the Plan that may be required from
time to time to keep the Plan in compliance with relevant law or to
facilitate administration of the Plan. The Chairman of the Benefits
Committee is authorized to execute any such documents or amendments on
behalf of the Company.
3.3 Expenses
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All benefits payable under the Plan and all expenses properly incurred in
the administration of the Plan, including all expenses properly incurred by
the Compensation Committee in exercising its duties under the Plan, shall
be borne by the Company.
4
ARTICLE 4
PARTICIPATION
4.1 Retirement Plan Participants
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Each participant in the Retirement Plan who, in 1992, received a Management
Incentive Compensation Plan (MICP) award for performance during the 1992
calendar year shall automatically participate in this Plan.
4.2 Retirement Plan Benefit
-----------------------
For purposes of determining participation in and benefits under this Plan,
the benefit to which an individual is entitled under the Retirement Plan
shall be calculated by including as "Earnings" in the year in which earned
any amounts deferred under a nonqualified deferred compensation plan or
arrangement, which are not otherwise included in Earnings.
4.3 Other Participants
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The Compensation Committee may determine and designate other select
management or highly compensated employees or independent contractors of
the Company and its Subsidiaries to receive additional supplemental pension
benefits under this Plan, as described in Section 5.2, whose names shall be
added to an Appendix B to this Plan. Such individuals shall become
Participants as of the date of designation by the Compensation Committee.
4.4 Limitation on Participation
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Employees designated for benefits under the Plan shall be members of a
select group of top management or highly compensated employees pursuant to
Section 7.6 of the Plan.
5
ARTICLE 5
BENEFITS
5.1 Supplemental Pension Benefits
-----------------------------
Upon the Retirement of a Participant, the Company shall pay to such
Participant supplemental pension benefits which when combined with the
amounts he or she is entitled to receive under the Retirement Plan and the
Supplemental Benefit Plan A (if any) shall equal the retirement pension
benefits which would have been payable to the Participant had the
Retirement Plan's formula been applied without regard to the limitations of
Sections 401(a)(17) and 415 of the Code.
For years before calendar year 1994, the supplemental pension benefits for
a Participant who received a salesman commissions or service
commissions/incentives during the calendar year shall be determined, as to
that year, by disregarding any such commissions and incentives which exceed
the dollar limitation of Section 401(a)(17) of the Code.
For all years subsequent to calendar year 1993, the supplemental pension
benefits for a Participant who is not the Chief Executive Officer or one of
the other four most highly compensated executive officers of the Company
who were serving as executive officers at the end of the last completed
fiscal year, as specified in Item 401 of Regulation S-K of the Securities
and Exchange Act of 1934 and reported in the Company's proxy statement for
the applicable year (the "Five Highest Compensated Officers") shall be
determined, as to such years subsequent to 1993, by disregarding any
Earnings which are in excess of the average of the Earnings of the Five
Highest Compensated Officers for such year.
Effective January 1, 1992, supplemental pension benefits for a Participant
who received a Management Incentive Compensation Plan (MICP) award for
performance during the 1992 calendar year shall be determined as though the
1992 MICP award is included in Earnings for the 1993 calendar year.
Notwithstanding the above, in the case of a Participant who is not entitled
to a benefit under the Retirement Plan, the Participant shall not be
entitled to a benefit under this Plan except as provided under Section 5.2
below.
5.2 Other Supplemental Pension Benefits
-----------------------------------
The Compensation Committee in its discretion may establish other
supplemental pension benefits and designate the Participants who will be
entitled to receive such benefits. Any such additional supplemental pension
benefits shall be described in an Appendix to this Plan, and, unless
otherwise specified in such Appendix, shall be payable as provided in
Article 6.
6
5.3 Spouse's Death Benefits
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Upon the death of a Participant prior to Retirement, the Company shall pay
to the Surviving Spouse (if any) of such Participant a death benefit which
when combined with the death benefit which he or she is entitled to receive
under the Retirement Plan and the Supplemental Benefit Plan A shall equal
the death benefit that would have been payable to the Surviving Spouse had
the Retirement Plan's benefit provisions been applied as provided in
Section 5.1 or 5.2 above, as applicable.
5.4 Disability Benefits
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In the event a Participant becomes Disabled, the Company shall pay to such
Participant supplemental pension benefits which when combined with the
amounts he or she is entitled to receive under the Retirement Plan and the
Supplemental Benefit Plan A shall equal the retirement pension benefits
which would have been payable to the Participant had the Retirement Plan's
benefit provisions been applied as provided in Section 5.1 or 5.2 above, as
applicable.
7
ARTICLE 6
PAYMENT OF BENEFITS
6.1 Payment of Benefits
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Upon the Retirement of a Participant who is also a participant in the
Retirement Plan, the Company shall pay to such Participant the benefit
provided in Section 5 in the form of payment selected by the Participant
under the Retirement Plan. If a Participant in this Plan is not also a
participant in the Retirement Plan, the Company shall pay to such
Participant the benefit provided in Section 5 in the form of a monthly
annuity payable from the commencement date as provided in Section 6.2 to
the first of the month preceding death. Upon the death of a Participant,
the Company shall pay any death benefit provided in Section 5 to the
Surviving Spouse in the same form of payment which death benefits under the
Retirement Plan are payable to the Surviving Spouse.
Notwithstanding the above, the Compensation Committee in its discretion may
direct payment of the benefit for a Participant or Surviving Spouse in the
form of a lump sum cash payment if the Compensation Committee determines
that such payment is in the best interest of the Company.
The amount of any such lump sum payment shall be determined by calculating
the benefit according to the terms of the Retirement Plan as a whole life
annuity, then calculating the present value of such benefit using the
actuarial assumptions specified in the Retirement Plan for determining
benefits of equivalent value, without regard to the provision for use of
Pension Benefit Guarantee Corporation rates for calculating lump sums.
6.2 Commencement of Payment
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If a Participant in this Plan is also a participant in the Retirement Plan,
benefits for the Participant or Surviving Spouse under this Plan shall
commence on the same date that benefits commence under the Retirement Plan.
If a Participant in this Plan is not also a participant in the Retirement
Plan, benefits to the Participant shall commence as of the first day of the
month coincident with or next following the date of Retirement. Benefits
to a Surviving Spouse shall commence as of the first of the month following
the Participant's death if the Participant was age 55 or older, or as of
the first of the month following the date on which the Participant would
have reached age 55 if the Participant was younger than age 55 at the time
of death.
8
ARTICLE 7
GENERAL PROVISIONS
7.1 Unfunded Obligation
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The supplemental benefits to be paid to Participants or their Surviving
Spouses pursuant to this Plan are unfunded obligations of the Company, and
shall, until actual payment, continue to be an obligation against the
general funds of the Company. The Company is not required to segregate any
monies from its general funds, or to create any trusts, or to make any
special deposits with respect to these obligations. Nothing contained
herein shall be deemed to create a trust of any kind or create any
fiduciary relationship. To the extent that any person acquires a right to
receive payments from the Company under this Plan, such right shall be no
greater than the right of any unsecured general creditor of the Company.
7.2 Nonassignment
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The right of a Participant or his or her Surviving Spouse to the payment of
any amounts under the Plan may not be assigned, transferred, pledged or
encumbered nor shall such right or other interest be subject to attachment,
garnishment, execution or other legal process.
7.3 No Right to Continued Employment
--------------------------------
Nothing in the Plan shall be construed to confer upon any Participant any
right to continued employment with the Company or a Subsidiary, nor
interfere in any way with the right of the Company or a Subsidiary to
terminate the employment of such Participant at any time without assigning
any reason therefor.
7.4 Withholding Taxes
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Appropriate payroll taxes shall be withheld from cash payments made to
Participants pursuant to this Plan.
7.5 Termination and Amendment
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The Board of Directors of the Company reserves the power at any time to
terminate this Plan and delegates to the Compensation Committee the power
to otherwise amend any portion of the Plan other than this Section 7.5;
provided, however, that no such action shall adversely affect the right of
any Participant (or Surviving Spouse) to a benefit to which he or she has
become entitled under the Plan. Notice of termination or material amendment
of the Plan shall be given in writing to each Participant.
If the Plan is terminated, Participants and Surviving Spouses who have
accrued benefits under the Plan as of the date of termination will receive
payment of such benefits at the times specified in the Plan.
9
7.6 ERISA Exemption
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This Plan is intended to qualify for exemption from Parts II, III, and IV
of ERISA as a plan maintained primarily for the purpose of providing
deferred compensation for a select group of management or highly
compensated employees under Sections 201(2), 301(a)(3) and 401(a)(1) of
ERISA.
7.7 Applicable Law
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The Plan shall be construed and governed in accordance with the laws of the
State of Washington.
Dated: November 7, 1996
ADVANCED TECHNOLOGY LABORATORIES, INC.
By: /s/ Harvey N. Gillis
_______________________________________
Title Sr. Vice Presdident and CFO
_____________________________________
10
APPENDIX A
Pursuant to Section 3.1(b) of the Plan, the following non-wholly owned
Subsidiaries shall be participating employers in the Plan:
Company Beginning Ending
------- --------- ------
ACKNOWLEDGED AND ACCEPTED
By: /s/ Harvey N. Gillis
________________________________
Title: Sr. Vice President and CFO
_____________________________
Date: November 7, 1996
_____________________________
11
APPENDIX B
Pursuant to Section 4.3 of the Plan, the following select management or highly
compensated Participants shall be entitled to receive additional supplemental
pension benefits under the Plan, as described below:
NAME BENEFIT BENEFIT DISTRIBUTION DATE
1.Edward Ray Determined under a
consulting agreement
effective as of
May 10, 1995.
2.Arthur Schenck Determined under an
employment agreement
dated June 23, 1995.
3.Eugene Larson Determined pursuant
to resolutions of
the Board of
Directors of the
Company at a meeting
held on February 18, 1994.
ACKNOWLEDGED AND ACCEPTED
By: /s/ Harvey N. Gillis
________________________________
Title: Sr. Vice President and CFO
_____________________________
Date: November 7, 1996
_____________________________
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