Exhibit (3)(10)(iii)
ECHLIN INC.
SUPPLEMENTAL SENIOR EXECUTIVE RETIREMENT PLAN
OCTOBER 25, 1996
Echlin Inc. Supplemental Senior Executive Retirement Plan
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ARTICLE I - Purpose
1.1 There is hereby established the Echlin Inc. Supplemental Senior
Executive Retirement Plan to provide unfunded retirement benefits, to a
selected group of management and highly compensated employees of the
Company.
ARTICLE II - Definitions
Unless the context otherwise indicates, all terms used herein (other
than the Plan) shall have the same meaning as set forth in Article I of
the Pension Plan.
2.1 Applicable Interest Rate shall mean for any month of reference, an
annual interest rate determined from the average of the yields on 10
year U.S. Treasury notes during such month, adjusted for constant
maturity, and as reported by the Federal Reserve Board in the Wall
Street Journal.
2.2 Board of Directors - shall mean the Board of Directors of the Company.
2.3 Company - shall mean Echlin Inc.
2.4 Effective Date - shall mean September 1, 1996 for this amended and
restated Plan.
2.5 Member - shall mean those senior executives of the Company designated
by resolution of the Board of Directors.
2.6 Pension Plan - shall mean the Pension Plan for Echlin Inc. Employees
as now in effect or hereafter amended.
2.7 Qualified Spouse - shall mean the legal spouse of a Member, who has
been married to the Member for at least a one year period ending on the
Member's date of death or Termination, if later.
2.8 SERP Earnings - shall have the meaning of Earnings as defined in the
Pension Plan but shall also include any amounts of base salary or
annual bonus deferred by the employee under the Echlin Inc. Unfunded
Non-qualified Deferred Compensation Plan or any similar plan
established by the Company.
2.9 Termination - shall mean the later of the date the employment
relationship of the Member with the Company is terminated or the date
the Member stops earning additional Credited Service under the Pension
Plan.
2.10 Trust - shall mean the trust fund established pursuant to the Plan.
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2.11 Trustee - shall mean the trustee named in the agreement establishing
the Trust and such successor and/or additional trustees as may be
named pursuant to the terms of the agreement establishing the Trust.
ARTICLE III - Benefits
3.1 Plan Benefit - The Plan Benefit shall be an amount equal to the excess
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of (a) over (b) where both (a) and (b) are determined as monthly
amounts payable at the later of the Member's Normal Retirement Date,
Termination or death prior to Termination as a life annuity and where
(a) is equal to 1/12 of the difference between (i) 60% of the
Member's Final Average Earnings (using SERP Earnings instead
of Earnings) and (ii) 50% of the Member's Primary Social
Security Benefit; and
(b) is equal to the monthly benefit a Member would have received
from the Pension Plan if (1) the limitations imposed by
Sections 401(a)(17) or 415 or both of the Code and regulations
thereunder had not been included therein and (2) in
calculating a Member's benefit under the Pension Plan, SERP
Earnings are used instead of Earnings.
Benefit payments shall commence on the first day of the month following
the date of a Member's Termination, and, if the benefit commencement
date precedes the Member's Normal Retirement Date, the Plan Benefit
shall be adjusted for early commencement as follows: (i) for each of
the first 120 months by which such payment commencement date precedes
such Member's Normal Retirement Date, by 1/2 of 1% for each month by
which the commencement date precedes such Member's Normal Retirement
Date; and (ii) for each month in excess of 120 by which such payment
commencement date precedes the Member's Normal Retirement Date an
additional amount that is the "Actuarial Equivalent" of the amount
payable after the adjustment of (i) above. For this purpose "Actuarial
Equivalent" shall mean an equivalent benefit using accepted actuarial
principles and using the 1983 GAM Mortality Tables and the Applicable
Interest Rate determined using the second month preceding the date of a
Member's Termination.
3.2 Method of Payment - Commencing on the first day of the month following
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the date of a Member's Termination, the Member's Plan Benefit shall be
paid to the Member or her or his Surviving Spouse or beneficiary in the
event of such Member's death prior to such payment, for twelve (12)
months on the first day of each month.
On the first day of the month following twelve months after the
Member's Termination, a final single sum payment shall
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be paid to the Member or Surviving Spouse or beneficiary in the event
of the death of the Member prior to such payment. Such single sum
payment shall be present value of the Plan Benefit assuming the Plan
Benefit is paid to the Member as a single life annuity which commences
on the date of the single sum payment. The value of the single life
annuity shall be calculated using the 1983 GAM Mortality Table and the
Applicable Interest Rate during the 11th month after such Member's
Termination.
3.3 Vesting - A Member shall be vested on his Normal Retirement Date. In
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the event of a Member's Termination prior to his being vested, all
benefits under this Plan shall be forfeited; provided that, in the
event of his rehire and subsequently becoming vested, his Plan Benefits
shall be reinstated.
3.4 Death Benefits - In the event of the death of a Member after
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Termination and prior to payment of such Member's full benefit in
accordance with the provisions of Section 3.2, such unpaid amount shall
be paid to the Member's beneficiary designated in a form provided by,
and filed with, the Board of Directors or its designate. If no such
form has been filed, such unpaid benefits shall be paid to the Member's
Qualified Spouse and if there is no such Qualified Spouse, to the legal
representative of the Member's estate.
In the event of the death of a Member prior to Termination who is
survived by a Qualified Spouse, such Qualified Spouse shall be entitled
to 50% of the Member's accrued Plan Benefit Payable according to
Section 3.2.
Except as provided in this Section 3.4, no benefits shall be payable
under this Plan as a result of a Member's death.
ARTICLE IV - Change In Control
4.1 If there is an event which constitutes a Change In Control (as
hereinafter defined) of Echlin Inc., and the Board of Directors
declares, in its sole discretion, that such event qualifies or will
qualify as a Change In Control under this Plan, and a Member's
employment is terminated without cause or the Member voluntarily
terminates employment for "good reason" (as hereinafter defined) within
two (2) years after the Change In Control has occurred, the Member
shall be deemed to have 'Terminated Employment Upon Change In Control'.
The Company agrees that it will pay to a Member who is deemed to have
"Terminated Employment Upon Change In Control", whether or not vested
immediately prior to having "Terminated Employment Upon Change In
Control", his or her Plan Benefit according to the provisions of
Section 3.2 hereof.
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Also, if there is an event which constitutes a Change In Control (as
hereinafter defined) of Echlin Inc., and the Board of Directors
declares, in its sole discretion, that such event qualifies or will
qualify as a Change In Control under this Plan, the Company will
contribute to the Trust, as soon as practical after the determination
by the Board of Directors that a Change In Control has occurred, an
amount determined by the Plan's actuary which together with the
existing assets of the Trust is sufficient to insure that all vested
Plan Benefits for all Members as of the date the Board of Directors
determined a Change In Control has occurred can be paid from the Trust.
An event constituting a "Change In Control" shall occur when (and only
when) Echlin Inc. obtains actual knowledge that: (a) any person within
the meaning of Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934 (the '1934 Act'), other than Echlin Inc. or any of its
subsidiaries, has become the beneficial owner, within the meaning of
Rule 13d-3 under the 1934 Act, of thirty percent (30%) or more of the
combined voting power of Echlin Inc.'s then outstanding voting
securities; or (b) the expiration of a tender offer or exchange offer,
other than an offer by Echlin Inc., to which twenty percent (20%) or
more of the combined voting power of Echlin Inc.'s then outstanding
shares of common stock have been purchased; or (c) the stockholders of
Echlin Inc. have approved an agreement to merger or consolidate with or
into another corporation and Echlin Inc. is not the surviving
corporation or an agreement to sell or otherwise dispose of all or
substantially all of Echlin Inc.'s assets (including a plan of
liquidation); or (d) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of Echlin Inc. would cease for any reason to constitute at
least a majority thereof, unless the election or the nomination for the
election by Echlin Inc.'s stockholders of each new director was
approved by a vote of at least two-thirds (2/3) of the directors then
still in office who were directors at the beginning of the period.
For purposes of this Plan, the termination of a Member shall be
considered to be for cause, whether it occurred by resignation or
discharge, if the reason for the termination of employment was the
Member's proven in a court of law or admitted embezzlement, dishonesty,
fraud, conviction on a felonious or other charge involving moral
turpitude, all in connection with the Company's affairs. The Board of
Directors shall make the determination as to whether the termination is
for cause and such determination shall be binding, final and conclusive
on all concerned. For purposes of this Plan, a Member's voluntary
termination shall be considered to be for "good reason" if (a) without
the express written consent of the employee, he is assigned any duties
substantially inconsistent with his positions,
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duties, responsibilities and status with an employer as in effect
before the Change In Control, or his reporting responsibilities, titles
or offices as in effect immediately prior to the Change In Control are
substantially changed or he is removed from or not re-elected to any of
such positions, except as any such change resulting from his
termination of employment for cause, or of his total and permanent
disability or death (for example, without limiting the generality of
the foregoing, should the Chairman of the Board and Chief Executive
Officer not be named as the Chairman and Chief Executive Officer of the
surviving parent corporate entity upon a qualifying Change In Control,
then such Member would have Good Reason to terminate his or her
employment), (b) the compensation or benefit entitlement of the
employee as in effect immediately prior to the Change In Control is
substantially reduced; or (c) the employer requires the employee
without his agreement to be based anywhere other than the employer's
location where the employee is principally employed or another location
that is more than fifty (50) miles from the location where he is
principally employed immediately prior to the Change In Control, except
for required travel on the employer's business to an extent
substantially consistent with his business travel obligations in effect
immediately prior to the Change In Control.
ARTICLE V - Trust and Plan Funding
5.1 The Company will establish a Trust with the Trustee, pursuant to such
terms and conditions as are set forth in the Trust agreement to be
entered into between the Company and the Trustee. The Trust is intended
to be treated as a "grantor" trust under the Code, and the
establishment of the Trust is not intended to cause a Member to realize
income on amounts contributed thereto, and the Trust shall be so
interpreted.
5.2 At the discretion of the Company, Plan Benefits that become payable to
any Member's beneficiary or Qualified Spouse shall first be paid from
the Trust, then to the extent Plan Benefits for any Member are not paid
from the Trust, Plan Benefits shall be paid out of the general assets
of the Company.
ARTICLE VI - Forfeiture of Benefit Entitlement
6.1 Notwithstanding any other provision of this Plan, in the event a
Member's termination is due to his confession to or conviction of theft
or embezzlement from; or any misdemeanor (except a traffic offense) or
felony against the company; or to dishonesty in connection with matters
as determined to exist by the Company; or except as authorized by the
Company, or as may be required by applicable law or a duly constituted
administrative agency, such Member directly or
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indirectly during his service with the Company, or thereafter uses or
permits the use of any trade secrets, customers lists, or other
information of, or relating to, the Company, or divulges such trade
secrets, customers lists and other information to any person, firm or
corporation, then any benefit entitlement otherwise provided under this
Plan to such Member shall be terminated and void.
ARTICLE VII - Miscellaneous
7.1 Nothing contained herein shall confer any right on any Member to be
continued in the employ of the Company or any other company or shall
affect the right of the Member to participate in and receive benefits
under and in accordance with any pension, profit sharing, incentive
compensation or other benefit plan or program of the Company.
7.2 This Plan shall continue in force with respect to the Member until the
termination of the right of such Member or his beneficiary to receive
benefits under this Plan and shall be binding upon any successor to
substantially all the assets of the Company. The Board of Directors
shall, however, have the right, at any time to modify, amend or
terminate the Plan in whole or in part provided no such amendment shall
deprive a Member of any vested Plan Benefit accrued hereunder prior to
the date of the amendment.
Notwithstanding the above, the Board may at any time amend this Plan
retroactively or otherwise if and to the extent that such action is
deemed necessary in light of government regulations or other legal
requirements or to ensure that the Plan continues to be characterized
as "top-hat" plan of deferred compensation maintained for a select
group of management or highly compensated employees as described under
ERISA Section 201(2), 301(a)(3), and 401(a)(l).
7.3 No right or interest of the Member and beneficiary under this Plan
shall be subject to voluntary or involuntary alienation, assignment or
transfer of any kind.
7.4 The administration of this Plan shall be the responsibility of the
Board of Directors or such other person or entity as the Board of
Directors shall designate. Decisions of the Board of Directors shall be
final and binding upon the Company which shall have adopted this Plan,
the Member and the Member's beneficiaries.
7.5 This Plan shall be construed, regulated and administered for all
purposes according to the laws of the State of Connecticut and the
United States of America.
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7.6 Any provision of the Plan deemed in violation of any law or regulation
shall be null and void and of no effect and shall not affect the
validity of any other provision thereof.
Issued as of October 25, 1996.
ECHLIN INC.
/s/Milton J. Makoski
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Vice President - Human
Resources
ATTEST:
/s/Jon P. Leckerling
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Secretary
APPROVED BY:
/s/Trevor O. Jones
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Chairman, Compensation
and Management Development
Committee of the Board
of Directors
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