Exhibit 10.25
Exhibit 10.25
W. R. GRACE & CO.
SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN
AS ADOPTED BY
W. R. GRACE & CO.,
A CONNECTICUT CORPORATION,
EFFECTIVE OCTOBER 4, l984
AND AMENDED
EFFECTIVE MAY 25, l988
-------------------------------------------------
AS ADOPTED AND CONTINUED BY
W. R. GRACE & CO.,
A NEW YORK CORPORATION,
EFFECTIVE MAY 25, l988
AND AMENDED
EFFECTIVE JANUARY l, l993
W. R. GRACE & CO. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
INTRODUCTION
Effective October 4, l984, W. R. Grace & Co., a Connecticut corporation
("Grace Connecticut"), adopted a supplemental executive retirement plan which
constitutes in part an "excess benefit plan" under section 3(36) of the Employee
Retirement Income Security Act of l974, as amended ("ERISA"), and which
constitutes in part an unfunded deferred compensation arrangement for a select
group of highly compensated or management employees under section 20l(2) of
ERISA, for the Eligible Persons described in the Plan.
The W. R. Grace & Co. Supplemental Executive Retirement Plan (the "Plan")
was amended effective May l, l988 for all Eligible Persons who terminate service
on or after such date.
As a result of a corporate reorganization whereby Grace Connecticut became
a subsidiary of W. R. Grace & Co., a New York corporation ("Grace New York")
(and was renamed "W. R. Grace & Co.-Conn."), Grace Connecticut amended the Plan
(as set forth herein), effective May 25, l988, and Grace New York adopted and
assumed the sponsorship of the Plan, as amended, as of such date, for the
benefit of all Eligible Persons and other persons who, on the immediately
preceding date, were participants in the Plan (as maintained by Grace
Connecticut) and all other employees of Grace New York or its subsidiaries who
on or after May 25, l988 become Eligible Persons or otherwise covered under the
Plan.
Grace New York last amended the Plan, effective as of January l, l989, with
respect to all Eligible Persons who terminate service on or after such date.
Grace New York now desires to amend the Plan, effective as of January 1,
1993, with respect to all Eligible Persons who terminate service on or after
such date, to provide for vesting of benefits that is consistent with vesting
under the Salaried Retirement Plan.
* * *
SECTION 1
DEFINITIONS
When used herein, the words and phrases defined hereinafter shall have the
following meanings unless a different meaning is clearly required by the context
of the Plan.
1.01 Affiliate:
Any corporation or trade or business (other than the
Company) that is treated under the first sentence of
section 4l4(b) or under section 4l4(c) of the Code as
constituting the same "employer" as the Company,
during the period of controlled status thereunder.
1.02 Board of Directors:
The Board of Directors of the Company.
1.03 Code:
The Internal Revenue Code of l986, as amended.
1.04 Committee:
The Salary, Incentive Compensation and Employee
Benefits Committee of the Board of Directors.
1.05 Company:
W. R. Grace & Co., a New York corporation. Prior to
May 25, l988, the term "Company" meant W. R. Grace &
Co., a Connecticut corporation.
-2-
1.06 Effective Date:
October 4, l984.
1.07 Eligible Person:
A person who is described in Section 2 as eligible to
receive benefits under the Plan.
1.08 Employee:
An Employee of the Company or an Affiliate under the
Plan.
1.09 Employing Unit:
Any employing unit described in Section l.l4 of the
Grace Salaried Plan.
1.10 Grace Salaried Plan:
W. R. Grace & Co. Retirement Plan for Salaried
Employees (including the "old plans" and "predecessor
plans" defined therein and the plans merged therein).
Any reference to a section of the Grace Salaried Plan
shall include the corresponding section of any future
text thereof.
1.11 Plan:
W. R. Grace & Co. Supplemental Executive Retirement
Plan.
-3-
1.12 Masculine pronouns used herein shall refer to men or women or both
and nouns and pronouns when stated in the singular shall include
the plural and when stated in the plural shall include the
singular, wherever appropriate.
1.13 Any reference in the Plan to a "Section" shall refer to a Section
of the Plan unless otherwise specified.
-4-
SECTION 2
ELIGIBILITY AND VESTING
2.01 Any Employee who (i) is accruing credited service (as defined in
section 4.0l of the Grace Salaried Plan) under the Grace Salaried
Plan on or after the Effective Date of the Plan, (ii) has an
annual base salary of at least $75,000 at any time during the
period that he is accruing such credited service under the Grace
Salaried Plan, and (iii) satisfies the provisions of Section 2.04
shall be eligible to receive benefits under this Plan in
accordance with Section 3 of the Plan.
2.02 If so designated by the Board of Directors, (A) an Employee who
(i) accrued credited service (as defined in Section 2.0l above)
under the Grace Salaried Plan prior to (but not on or after) the
Effective Date of the Plan (and whose benefits under the Grace
Salaried Plan have not commenced prior to such designation), (ii)
has an annual base salary of at least $75,000 on or after the
Effective Date of the Plan while still employed by the Company or
an Affiliate, and (iii) satisfies the provisions of Section 2.04,
or (B) an Employee who (i) is accruing credited service (as
defined in Section 2.0l above) under the Grace Salaried Plan on or
after the Effective Date of the Plan, (ii) has an annual base
salary of at least $75,000 at any time after (but not during) the
period that he is accruing credited service (as defined in Section
2.0l above) under the Grace Salaried Plan, and (iii) satisfies the
provisions of Sec tion 2.04 shall be eligible to receive benefits
under the Plan in accordance with Section 3 of the Plan.
-5-
2.03 If so designated by the Board of Directors, an Employee who (i) is
not accruing and never has accrued credited service (as defined in
Section 2.0l above) under the Grace Salaried Plan, (ii) is an
Employee of the Company or an Affiliate on or after the Effective
Date of the Plan, (iii) has an annual base salary of at least
$75,000 at any time while employed by the Company or an Affiliate,
and (iv) satisfies the provisions of Section 2.04 shall be
eligible to receive benefits under the Plan in accordance with
Section 3 of the Plan.
2.04 An Eligible Person must terminate service with the Company and its
Affiliates on or after the earliest of (i) the date he attains age
55, (ii) the date he completes at least ten (l0) years of vesting
service, effective January 1, 1988 (or, effective January l, l989,
the date he completes at least five (5) years of vesting service)
(as defined in Section l.38 of the Grace Salaried Plan) or (iii)
the date as of which he otherwise becomes vested under the Grace
Salaried Plan, in order to be eligible to receive benefits, if
any, under the Plan. The benefits, if any, provided under the
Plan to an Eligible Person shall vest upon the earliest of (i) his
attainment of age 55, (ii) his completion of at least ten (l0)
years of vesting service (effective January l, l989, five (5)
years of vesting service) (as defined in Section l.38 of the Grace
Salaried Plan) or (iii) the date as of which he otherwise becomes
vested under the Grace Salaried Plan. In the event that an
Eligible Person terminates service with the Company and its
Affiliates prior to the date his benefits become vested in
accordance with this Section 2.04, he shall be entitled to no
benefits under the Plan. Notwithstanding the foregoing, in the
event that an
-6-
Eligible Person terminates service with the Company and its Affiliates by reason
of death prior to the date his benefits become vested in accordance with this
Section 2.04, benefits under the Plan will be payable in respect of him to the
extent provided in Section 3.05 or Section 3.09.
-7-
SECTION 3
BENEFITS
3.01 The monthly benefit payable to an Eligible Person under the Plan
shall be equal to the excess, if any, of
(a) The amount of the monthly benefit which would be
payable to such Eligible Person under the Grace
Salaried Plan if the provisions set forth in the Grace
Salaried Plan to comply with the benefit limitations
of section 4l5 of the Code, the compensation
limitations of section 40l(a)(l7) of the Code and any
other Code provisions that become effective after
December 3l, l988 which similarly limit the amount of
retirement benefit that may be accrued under the Grace
Salaried Plan were inapplicable, and determined in
accordance with the following additional principles:
(i) credited service (as defined in section
4.0l of the Grace Salaried Plan) shall
include any period of employment, or
period of disability which satisfies the
provisions of section 6 of the Grace
Salaried Plan, not otherwise credited
under the Grace Salaried Plan, prior to
the date he attains age 70 in the case of
an Eligible Person who terminates service
with the Company and its affiliates prior
to January l, l988 and any period of
employment after the date he attains age
70, in the case of an Eligible Person who
terminates service with the Company and
its Affiliates after
-8-
December 3l, l987, with a division of the
Company or an Affiliate, which does not
participate in the Grace Salaried Plan
(other than (A) any period during which
the Eligible Person was satisfying the
eligibility requirements of the Grace
Salaried Plan, (B) any period that an
Eligible Person declined to contribute to
the Grace Salaried Plan (while eligible to
do so), (C) any period that an Eligible
Person waived participation in the Grace
Salaried Plan, or (D) any period that
service was interrupted in the case of
authorized leave of absence for a reason
other than for disability). Subject to the
foregoing, an Eligible Person will be
credited with a month of credited service
for any calendar month during any part of
which he was employed or disabled as
described above; provided, however, that
in the event that an Eligible Person
terminates service with the Company and
all Affiliates during or after such period
of employment and is subsequently
re-employed by the Company or an
Affiliate, any period of such employment
or disability prior to such re-employment
shall be restored as credited service
hereunder, but if an Eligible Person so
terminates service (whether or not prior
to January l, l976) and is not vested to
any extent in an employer-derived accrued
benefit under the Grace Salaried Plan at
the time of such termination and his
number of one-year breaks in service (as
defined in section l.22 of the Grace
Salaried Plan)
-9-
following such termination equal or exceed
his years of vesting service (as defined
in section l.38 of the Grace Salaried
Plan) rendered prior to re-employment,
such period shall not be restored as
credited service hereunder, and provided
further that any credited service
hereunder in respect of a period of
employment during which the Grace Salaried
Plan was contributory shall be reduced by
30% thereof;
(ii) compensation (as defined in section l.07
of the Grace Salaried Plan) shall include
any amount of (A) incentive compensation
(not otherwise included thereunder) which
an Eligible Person elected to defer (and
hence did not receive on a current basis)
at any time after the effective date of
the Grace Salaried Plan, (B) "regular" or
base salary (not otherwise included
thereunder) which an Eligible Person
elected to defer (and hence did not
receive on a current basis) with respect
to periods after December 3l, l987 and (C)
annual compensation in excess of $200,000
that would otherwise be recognized under
the Grace Salaried Plan but for the
limitations of Section 40l(a)(l7) of the
Code with respect to periods after
December 3l, l988; provided, however, that
in the event that an Eligible Person
terminates service with the Company and
all Affiliates and is subsequently
re-employed by the Company or an
Affiliate, any such incentive compensation
and "regular" or base
-10-
salary which an Eligible Person elected,
prior to such re-employment, to defer and
any such annual compensation in excess of
$200,000 shall be credited hereunder only
to the extent that the month in which such
incentive compensation and "regular" or
base salary would otherwise have been paid
and the month in which such excess
compensation was paid would be restored as
credited service under the re-employment
rules set forth in Section 3.0l(a)(i);
(iii) in the case of an Eligible Person
described in Section 2.03, the provisions
of Section 3.0l(a) shall be applied as if
a monthly benefit were payable to the
Eligible Person under the Grace Salaried
Plan (even though he was never employed by
the Company or an Employing Unit) and as
if such Eligible Person were required to
satisfy the eligibility provisions of the
Grace Salaried Plan.
over
(b) (i) in the case of an Eligible Person
described in Section 2.0l or 2.02, the
amount of the monthly benefit actually
payable to such Eligible Person under the
Grace Salaried Plan (including any
increase provided for in section 5.03(6)
of the Grace Salaried Plan), and
-11-
(ii) in the case of an Eligible Person
described in Section 2.0l, 2.02, or 2.03,
the amount deemed payable for purposes of
the Plan under any other defined benefit
plan (as defined in section 3(35) of
ERISA) or defined contribution plan (as
defined in section 3(34) of ERISA)
maintained by the Company or an Affiliate
(except the W. R. Grace & Co. Salaried
Employees Savings and Investment Plan and
the Dearborn Chemical Company Salaried
Employees Savings and Investment Plan), or
any deferred compensation agreement or
arrangement entered into by such Eligible
Person and the Company or an Affiliate, or
maintained by the Company or an Affiliate
(other than (A) the deferral of incentive
compensation referred to in Section
3.0l(a)(ii), (B) the Incentive
Compensation Plan for Key Employees of El
Torito-La Fiesta Restaurants, Inc., (C)
the Natural Resources Group Long Term
Incentive Plan, (D) the W. R. Grace & Co.
Performance Incentive Plan, (E) the Teal
Incentive Compensation Plan, (F) any other
plan, program, arrangement or contract
which by its terms provides that
compensation thereunder should not be an
offset under the Plan, and (G) any other
agreement or arrangement which the Board
of Directors or the Committee determines
should not be an offset under the Plan in
whole or in part).
3.02 In the case of an Eligible Person described in Section 2.0l or
2.02, the calculation of the monthly benefit
-12-
described in Section 3.0l(a) above shall be based upon the same
form of benefit, benefit commencement date, and other factors and
assumptions actually used to calculate the monthly benefit
described in Section 3.0l(b)(i) above. If the benefit payable
under any other defined benefit plan is aggregated with the
benefit payable under the Grace Salaried Plan for purposes of
applying the limitations of section 4l5 of the Code, then the
benefit payable under any such defined benefit plan shall be
aggregated with the benefit payable under the Grace Salaried Plan
in the calculation of Section 3.0l(a) and Section 3.0l(b)(i)
above.
3.03 In the case of an Eligible Person described in Section 2.0l, 2.02,
or 2.03, the amount deemed payable for purposes of the Plan under
any defined benefit plan described in Section 3.0l(b)(ii) shall be
the amount that would be payable thereunder in respect of years of
credited service taken into account under Section 3.0l(a) in the
form of benefit applicable to the Eligible Person under Section
3.0l(a) commencing at the age that the benefit under Section
3.0l(a) commences. The amount deemed payable under any defined
contribution plan described in Section 3.0l(b)(ii) shall be the
amount that would be payable thereunder at the date that the
benefit under Section 3.0l(a) commences, multiplied by a fraction
whose numerator is the number of years that the Eligible Person
participated in such defined contribution plan and that are
credited under Section 3.0l(a) concurrently, and whose denominator
is the number of years that the Eligible Person participated in
such defined contribution plan, converted to the form of benefit
applicable to the Eligible Person under Section 3.0l(a) commencing
at the
-13-
age that the benefit under Section 3.0l(a) commences using the
UP-84 mortality table and an interest rate equal to the rate, as
of the first day of the calendar quarter in which the benefit
under Section 3.0l(a) commences, used by the Pension Benefit
Guaranty Corporation to value immediate annuities under trusteed
pension plans which terminate as of such date. The amount deemed
payable under any deferred compensation agreement or arrangement
described in Section 3.0l(b)(ii) shall be the amount that would be
payable thereunder at the date that the benefit under Section
3.0l(a) commences, converted to the form of benefit applicable to
the Eligible Person under Section 3.0l(a) commencing at the age
that the benefit under Section 3.0l(a) commences using the
actuarial assumptions set forth in section 5.06(a) and (b) of the
Grace Salaried Plan if the amount payable under such agreement or
arrangement is in the form of periodic payments or using the
actuarial assumptions applicable in the case of a defined
contribution plan if the amount payable under such agreement or
arrangement is in the form of a lump sum.
3.04 In the case of an Eligible Person described in Section 2.0l or
2.02, the monthly benefit under the Plan shall be payable
coincident with the payment of a monthly benefit under the Grace
Salaried Plan, provided that no monthly benefit under the Plan
shall be payable in respect of any period prior to the Effective
Date of the Plan.
3.05 In the case of an Eligible Person described in Section 2.0l or
2.02, such Eligible Person's joint annuitant, beneficiary, or
surviving spouse referred to in section 7.02 of the Grace Salaried
Plan shall become entitled to benefits as provided under Section 3
if such joint
-14-
annuitant, beneficiary, or surviving spouse shall become entitled
to benefits (in such capacity) under the Grace Salaried Plan.
Notwithstanding any provision of the Plan, in the event that an
Eligible Person's joint annuitant, beneficiary, or surviving
spouse referred to above shall become entitled to benefits (in
such capacity) under the Grace Salaried Plan, and the provisions
of the Grace Salaried Plan do not preclude such joint annuitant,
beneficiary, or surviving spouse from receiving all or part of the
benefit provided thereunder for such person, then the Grace
Salaried Plan shall pay such benefit to the extent permitted under
the Grace Salaried Plan (and no amount duplicating such benefit
shall be payable under the Plan).
3.06 In the case of an Eligible Person described in Section 2.0l or
2.02, in the event that such an Eligible Person (or his joint
annuitant, beneficiary, or surviving spouse referred to in section
7.02 of the Grace Salaried Plan) ceases to receive benefits under
the Grace Salaried Plan for any reason, he (or she) shall cease to
be eligible to receive benefits under the Plan.
3.07 In the case of an Eligible Person described in Section 2.03, the
monthly benefit under the Plan shall be based upon the form of
benefit, benefit commencement date, and other factors and
assumptions which would have been applicable to him under the
Grace Salaried Plan if he were a participant in the Grace Salaried
Plan (as defined in section l.24 of the Grace Salaried Plan).
3.08 In the case of an Eligible Person described in Section 2.03, the
monthly benefit under the Plan shall be payable
-15-
coincident with the payment of a monthly benefit which would have
been made under the Grace Salaried Plan if he were a participant
in the Grace Salaried Plan (as defined in section l.24 of the
Grace Salaried Plan).
3.09 In the case of an Eligible Person described in Section 2.03, such
Eligible Person's joint annuitant, beneficiary, or surviving
spouse referred to in section 7.02 of the Grace Salaried Plan
shall become entitled to benefits as provided under Section 3 if
such joint annuitant, beneficiary, or surviving spouse would have
become entitled to benefits (in such capacity) under the Grace
Salaried Plan if such Eligible Person had been a participant in
the Grace Salaried Plan (as defined in section l.24 of the Grace
Salaried Plan).
3.10 In the case of an Eligible Person described in Section 2.03, in
the event that such an Eligible Person (or his joint annuitant,
beneficiary, or surviving spouse referred to in section 7.02 of
the Grace Salaried Plan) would cease to receive benefits under the
Grace Salaried Plan if he were a participant in the Grace Salaried
Plan (as defined in section l.24 of the Grace Salaried Plan), he
(or she) shall cease to be eligible to receive benefits under the
Plan.
3.11 The monthly benefits described in Sections 3.01(a) and 3.01(b)(i)
are payable in the form of a straight life annuity commencing as
of or after the first day of the month after an Eligible Person
attains age 65 (except to the extent that a different form of
benefit, or benefit commencement date, or both, is applicable, or
would be
-16-
applicable, to the Eligible Person under the Grace Salaried Plan).
3.12 The benefits payable under the Plan shall be paid by the Company
or a subsidiary of the Company, as the case may be, out of its
general assets and shall not be funded in any manner.
3.13 In the event that an Eligible Person who has terminated service
with the Company and its Affiliates elects to defer the
commencement of his benefits under the Grace Salaried Plan, he may
apply to the Committee for a deferral of his benefits under the
Plan in order to prevent constructive receipt of such benefits,
provided that the Committee shall in its sole discretion decide
whether to grant such application. The grant or denial of any
such application shall not alter or limit the provisions of
Sections 3.04 and 3.08 of the Plan.
3.l4 Notwithstanding any other provision of the Plan, in the event that
the service of a "participant" in the Grace Salaried Plan (or an
employee described in section 2.0l(2) of the Grace Salaried Plan
who has not yet completed a "year of service" under the Grace
Salaried Plan) is terminated at Company request on account of
layoff during the period from October 3l, l986 to January 3l, l987
(or up to April 30, l987 in case of business necessity), and, as
of the date of his Termination of Service, such participant (or
such employee) (i) has attained age 50, (ii) earns a base salary
of $75,000 or more, and (iii) is employed on the corporate staff
at the main office of W. R. Grace & Co., each such participant or
employee shall receive the following monthly benefits, commencing
as of
-17-
the date that his benefits under the Grace Salaried Plan commence
(or would commence, if no such benefit is payable, or if section
5.l4 of the Grace Salaried Plan applied to him),
(A) a benefit determined with respect to the participant (or
employee) under section 5.02(l)(a) of the Grace Salaried Plan
based on five years of "credited service" under the Grace Salaried
Plan (or the period until his attainment of age 70, if less)
payable in the form applicable to such participant or employee in
accordance with the terms of the Grace Salaried Plan (without
reduction for early commencement);
(B) in the case of such a participant in the Grace Salaried
Plan who has attained age 50 (but not age 55) and has less than l0
years of "vesting service" under the Grace Salaried Plan, a
benefit equal to the benefit accrued by such participant under
section 5.02 of the Grace Salaried Plan which was forfeited by him
upon termination of service payable in the form which would have
been applicable to such participant in accordance with the terms
of the Grace Salaried Plan (without reduction for early
commencement); and
(C) a benefit equal to the amount, if any, by which the
benefit payable to such participant under the Grace Salaried Plan
(without reduction for early commencement) exceeds the benefit
actually payable to such participant under the Grace Salaried
Plan.
-18-
SECTION 4
ADMINISTRATION
4.01 The Plan shall be administered by the Salary, Incentive
Compensation and Employee Benefits Committee (or its designee) in
accordance with its terms and purposes. The Committee (or its
designee) shall determine the amount and manner of payment of the
benefits under the Plan.
4.02 The decisions made and the actions taken by the Committee (and its
designee) in the administration of the Plan shall be final and
conclusive on all persons, and the Committee, its members, and its
designees shall not be subject to liability with respect to the
Plan.
4.03 The Committee shall have the sole responsibility for the
administration of the Plan and shall have the exclusive right to
interpret the provisions of the Plan and to determine any question
arising thereunder or in connection with the administration of the
Plan, including the remedying of any omissions, inconsistency, or
ambiguity, and its decision or action in respect thereof shall be
conclusive and binding on all persons.
-19-
SECTION 5
AMENDMENT AND TERMINATION
5.01 The Board of Directors may amend or terminate the Plan with
respect to future periods at any time for whatever reason it may
deem appropriate. In the event of termination of the Plan, no
person shall be entitled to accrue additional benefits under the
Plan with respect to any period after the effective date of
termination determined by the Board of Directors; provided,
however, that any benefits under the Plan accrued prior to the
effective date of the termination determined by the Board of
Directors shall not be reduced on account of such termination.
Notwithstanding the foregoing, the provisions of Section 2.04
shall continue to be applicable to an Eligible Person, unless the
Board of Directors elects to waive such provisions in order to
vest all Eligible Persons in any such benefits provided under the
Plan even if such an Eligible Person terminates service with the
Company and its Affiliates prior to the date he attains age 55 or,
effective January l, l988, prior to the date he completes at least
ten (l0) years of vesting service (effective January l, l989,
prior to the date he completes at least five (5) years of vesting
service) (as defined in Section l.38 of the Grace Salaried Plan).
-20-
SECTION 6
MISCELLANEOUS
6.01 Nothing contained in the Plan shall be construed as a contract of
employment between the Company and an Eligible Person, or as a
right of any Eligible Person to continue in the employ of the
Company or as a limitation of the right of the Company to
discharge any Eligible Person, with or without cause.
6.02 The benefits payable under the Plan may not be assigned or
alienated.
6.03 The Plan shall be governed, to the extent provided thereunder, by
the Employee Retirement Income Security Act of l974 and to the
extent not preempted, by the laws of the State of New York.