HUNT MANUFACTURING CO.
SUPPLEMENTAL EXECUTIVE BENEFITS PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1996)
AUGUST 1996
TABLE OF CONTENTS
Page
Article I - Purpose............................................................1
1.1 Purpose......................................................1
Article II - Definitions.......................................................2
2.1 Account or Accounts..........................................2
2.2 Accrual Computation Period...................................2
2.3 Accrued Benefit..............................................2
2.4 Actuarial Equivalent.........................................2
2.5 Actuary......................................................2
2.6 Affiliate....................................................2
2.7 Annuity Starting Date........................................3
2.8 Applicable Compensation......................................3
2.9 Applicable Interest Rate.....................................3
2.10 Applicable Mortality Table...................................3
2.11 Appropriate Form.............................................3
2.12 Average Monthly Compensation.................................3
2.13 Base Salary..................................................4
2.14 Beneficiary..................................................4
2.15 Board........................................................4
2.16 Cause........................................................4
2.17 Code.........................................................4
2.18 Committee....................................................4
2.19 Company......................................................4
2.20 Computation Period...........................................4
2.21 Corporate Officer............................................4
2.22 Deferral Account.............................................5
2.23 Deferral Amounts.............................................5
2.24 Deferral Percentage..........................................5
2.25 Disability...................................................5
2.26 Earliest Retirement Age......................................5
2.27 Early Retirement Date........................................5
2.28 Eligible Spouse or Surviving Spouse..........................5
2.29 Employee.....................................................5
2.30 Employer.....................................................5
2.31 Employment Commencement Date.................................5
2.32 ERISA........................................................5
2.33 Executive Officer............................................6
2.34 Hour of Service..............................................6
2.35 Insolvency...................................................8
2.36 Insolvency Creditor..........................................8
2.37 Joint and Survivor Annuity...................................8
2.38 Late Retirement Date.........................................8
2.39 Matching Account.............................................8
2.40 Matching Amounts.............................................8
2.41 Normal Retirement Age........................................8
2.42 Normal Retirement Date.......................................8
2.43 One-Year Break in Service....................................8
2.44 Participant..................................................9
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Page
2.45 Participating Company........................................9
2.46 Pension Plan.................................................9
2.47 Phantom Stock Plan...........................................9
2.48 Plan.........................................................9
2.49 Plan Year....................................................9
2.50 Preretirement Survivor Annuity...............................9
2.51 Present Value...............................................10
2.52 Related Company.............................................10
2.53 Spouse......................................................10
2.54 Trust.......................................................10
2.55 Trustee.....................................................10
2.56 Vesting Computation Period..................................10
2.57 Year of Benefit Service.....................................10
2.58 Year of Vesting Service.....................................10
Article III - Participation...................................................10
3.1 Retirement Benefits.........................................10
3.2 Death Benefits..............................................11
3.3 Salary Deferral Benefits....................................11
Article IV - Retirement Benefits..............................................12
4.1 General Rules...............................................12
4.2 Normal Retirement Pension...................................12
4.3 Early Retirement............................................13
4.4 Late Retirement.............................................13
4.5 Disability Retirement Pension...............................13
4.6 Separation..................................................16
4.7 Preretirement Survivor Annuity..............................16
4.8 Forms of Pension............................................17
4.9 Beneficiary Designation and Proof...........................17
4.10 Divestment for Cause........................................18
4.11 Elective Transfer of Life Insurance Policies Providing
Article IV Benefits........................................18
Article V - Death Benefits....................................................20
5.1 Death Benefits..............................................20
5.2 Divestment for Cause........................................20
Article VI - Salary Deferral Benefits.........................................21
6.1 Participation...............................................21
6.2 Accounts....................................................21
6.3 Vesting.....................................................22
6.4 Valuation of Accounts.......................................22
6.5 Manner and Time of Distribution of Accounts.................22
6.6 Hardship Distributions......................................23
6.7 Distribution on Account of Educational Expenses.............23
6.8 Beneficiary Designation.....................................24
6.9 Divestment for Cause........................................24
6.10 Elective Transfer of Life Insurance Policies Providing
Article VI Benefits........................................24
Article VII - Payment of Benefits.............................................24
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Page
7.1 Plan Unfunded...............................................24
7.2 Review of Funding Status....................................28
7.3 Acceleration of Payments:...................................29
7.4 Creation of Separate Subfund in Trust upon Termination
of Employment..............................................29
Article VIII - Administration.................................................30
8.1 Appointment of Committee....................................30
8.2 Organization................................................30
8.3 Committee Action............................................30
8.4 Claims Procedure............................................30
8.5 Committee Powers and Responsibilities.......................32
8.6 Information from Participating Companies to Committee.......32
8.7 Records.....................................................33
8.8 Determination of Right to Benefits..........................33
8.9 Expert Services.............................................33
Article IX - Amendment and Termination of Plan; Successor Employer............33
9.1 Right of Company to Amend Plan..............................33
9.2 Amendment Procedure.........................................33
9.3 Termination of Plan.........................................33
9.4 Successor Employer..........................................34
Article X - Miscellaneous.....................................................34
10.1 No Right to Employment......................................34
10.2 Right to Withhold...........................................34
10.3 Nonalienation of Benefits...................................34
10.4 Expenses of Plan............................................34
10.5 Incapacitated Beneficiaries.................................34
10.6 Gender and Number...........................................35
10.7 Law Governing Construction..................................35
10.8 Change in Control Agreements................................35
10.9 Headings Not a Part Hereof..................................35
10.10 Severability of Provisions..................................35
10.11 Reporting and Disclosure Requirements.......................35
10.12 Special Provisions Relating to Ronald J. Naples.............35
10.13 Special Provisions Relating to Donald L. Thompson...........35
Article XI - Adoption of Plan by Affiliates ..................................36
11.1 Adoption of Plan............................................36
11.2 Company Appointed Agent of Participating Company............36
11.3 Withdrawal from Plan........................................36
PLAN EXHIBIT A - EARLY RETIREMENT FACTORS....................................A-1
PLAN EXHIBIT B - SPECIAL PROVISIONS FOR RONALD J. NAPLES.....................B-1
PLAN EXHIBIT C - SPECIAL PROVISIONS FOR DONALD L. THOMPSON...................C-1
PLAN EXHIBIT C - APPENDIX A PHANTOM STOCK PLAN FOR DONALD L. THOMPSON.......CA-1
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HUNT MANUFACTURING CO.
SUPPLEMENTAL EXECUTIVE BENEFITS PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1996)
WHEREAS, HUNT MANUFACTURING CO. (the "Company") established the
Supplemental Executive Benefits Plan (the "Plan") effective April 16, 1992; and
WHEREAS, the Company amended and restated the Plan, effective January
1, 1995, in order to permit salary deferrals and Employer matching contributions
for a select group of management or highly compensated employees and to make
certain other changes; and
WHEREAS, the Company again desires to amend and restate the Plan,
effective January 1, 1996, in order to conform the Plan to the requirements of
the Employment Agreement between the Company and Donald L. Thompson, dated April
8, 1996, under which Donald L. Thompson was employed as Chairman and Chief
Executive Officer of the Company effective June 1, 1996; and
WHEREAS, the Company reserved the right to amend the Plan at any time
in Section 9.1;
NOW, THEREFORE, effective January 1, 1996, the Company amends and
restates the HUNT MANUFACTURING CO. SUPPLEMENTAL EXECUTIVE BENEFITS PLAN, as
follows:
Article I - Purpose
1.1 Purpose:
(a) Retirement Benefits: The Plan is to provide for the payment by
the Company of retirement benefits under Article IV to a select group of
management and highly compensated employees within the meaning of section 201(2)
of ERISA that would have been paid under the Pension Plan but for the benefit
limitations imposed by, inter alia, sections 401(a)(17), 401(l), and 415 of the
Code. Moreover, the target benefit under the Plan is to be similar to the
benefit formula under the Pension Plan, prior to its amendment to comply with
the requirements of section 401(l) of the Code and the Treasury regulations
thereunder. However, in order to maintain ease of administration, the target
benefit is not to be integrated with Social Security; accordingly, the
applicable benefit percentages are to apply to all compensation. Except as
otherwise specifically provided herein, the provisions of the Plan are to be
substantially the same as those of the Pension Plan, as amended and restated
effective October 1, 1989.
(b) Death Benefits: The Plan is also intended to provide for the
payment by the Company of death benefits under Article V to the beneficiaries of
a select group of management and highly compensated employees within the meaning
of section 201(2) of ERISA. The amount of the death benefit is to equal three
times the Participant's Base Salary, reduced by the $50,000 death benefit
provided under the Hunt Manufacturing Co. Group Life Insurance Plan.
(c) Salary Deferral Benefits: The Plan is also intended to provide
for the payment by the Company of salary deferral benefits under Article VI to a
select group of management and highly compensated employees within the meaning
of section 201(2) of ERISA.
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(d) Plan Exhibit B and C Benefits: The Plan is also intended to
provide for the payment by the Company of the benefits provided under, or
pursuant to, Plan Exhibits B and C to Ronald J. Naples and Donald L. Thompson,
respectively.
(e) Other: Lastly, the Plan is to be compatible with the Change in
Control Agreements entered into between the Company and the various Participants
in the Plan. The assets from which the benefits are to be paid are to be held in
a grantor trust subject, in the case of Insolvency, to the Insolvency Creditors
of the Company.
Article II - Definitions
Where the following words and phrases appear in this Plan, they shall
have the respective meanings set forth below, unless the context clearly
requires otherwise:
2.1 Account or Accounts: The Deferral Account and/or the Matching
Account maintained on behalf of each Executive Officer Participant under Article
VI, as the context requires.
2.2 Accrual Computation Period: The Computation Period ending
September 30.
2.3 Accrued Benefit: The annual retirement pension which a Participant
shall have earned under Article IV up to any given date, which shall be equal to
the benefit provided by Section 4.2(a) based on the Participant's Years of
Benefit Service and Average Monthly Compensation as of the determination date.
2.4 Actuarial Equivalent: A benefit of equal value, when computed in
accordance with the following actuarial assumptions:
(a) Other than Present Value and Single Sum Calculations:
(1) Interest: 7-1/2 percent per annum.
(2) Mortality: 1984 Unisex Pension Tables with a two-year
set-back for a Participant and a one-year
set-back for the Participant's Spouse or other
Beneficiary.
(b) Present Value and Single Sum Calculations:
(1) Interest: Applicable Interest Rate.
(2) Mortality: Applicable Mortality Rate.
All Actuarial Equivalents shall be determined under Section 2.4(a)
prior to October 1, 1996. On and after October 1, 1996, Actuarial Equivalents
shall be determined under Section 2.4(a) or 2.4(b), as applicable.
2.5 Actuary: The enrolled actuary selected by the Company to provide
actuarial services in connection with the administration of the Plan.
2.6 Affiliate: A member of a group of employers, of which the Company
or other Participating Company is a member and which group constitutes:
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(a) A controlled group of corporations (as defined in section
414(b) of the Code);
(b) Trades or businesses (whether or not incorporated) which are
under common control (as defined in section 414(c) of the Code);
(c) Trades or businesses (whether or not incorporated) which
constitute an affiliated service group (as defined in section 414(m) of the
Code); or
(d) Any other entities required to be aggregated with the Company
or other Participating Company pursuant to section 414(o) of the Code and
Treasury regulations thereunder.
2.7 Annuity Starting Date: The first day of the first period for which
an amount is paid to a Participant as an annuity or in any other form under the
Plan.
2.8 Applicable Compensation: All compensation reported on the
Participant's Form W-2 (Wages, tips, other compensation box) for a calendar
year, including, but not limited to, any overtime and bonuses and cash awards
under the Company's Long Term Incentive Plan (terminated on February 14, 1996)
actually paid by a Participating Company to a Participant during the calendar
year, but adding thereto any amount which is contributed by a Participating
Company pursuant to a salary reduction agreement and which is not includible in
a Participant's gross income under section 125, 402(e)(3), 402(h)(1)(B), or
403(b) of the Code, and excluding therefrom amounts received as stock awards
under the Company's Long Term Incentive Plan (terminated on February 14, 1996),
and excluding therefrom any awards under the Company's Phantom Stock Plan
maintained for the benefit of Donald L. Thompson, and any taxable employee
benefits of any kind (e.g., reimbursements of moving and relocation expenses,
insurance premiums, automobile, health, medical, and dental expenses, the cost
of group-term life insurance, compensation arising from the exercise of a
nonqualified stock option or from a stock grant, and any fringe benefit which is
not excluded from gross income under section 132 of the Code).
2.9 Applicable Interest Rate: For any Plan Year, the interest rate
established on the first day of such Plan Year which shall be the annual rate of
interest on 30-year Treasury securities, as specified by the Commissioner of
Internal Revenue, for the calendar month of July preceding the beginning of such
Plan Year, all as provided under section 417(e)(3) of the Code. This Section 2.9
shall be effective on and after October 1, 1996.
2.10 Applicable Mortality Table: The table described in Rev. Rul. 95-6,
or any successor table prescribed by the Commissioner of Internal Revenue in
revenue rulings, notices or other published guidance, all as provided under
section 417(e)(3) of the Code. This Section 2.10 shall be effective on and after
October 1, 1996.
2.11 Appropriate Form: The form provided or prescribed by the Committee
for a particular purpose.
2.12 Average Monthly Compensation: The total Applicable Compensation
received by a Participant from a Participating Company during the five
consecutive calendar years out of his or her last ten calendar years of
employment ending with the calendar year in which occurs the earlier of the
Participant's retirement or termination of employment, which will produce the
highest Average Monthly Compensation, divided by 60. For purposes of the
preceding sentence, any part-year in which a Participant is employed shall be
included within the five-consecutive-calendar-year period if the inclusion
thereof produces a higher Average Monthly Compensation; in all other cases,
part-years shall be disregarded. If a part-year is included, the Applicable
Compensation received by a Participant during such part-year shall not be
annualized, and the part-year shall be treated, for purposes of the
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calculation, as a full year. For any Participant who has less than five
consecutive calendar years of employment, Average Monthly Compensation shall be
equal to the total Applicable Compensation received by the Participant during
his or her total period of employment with a Participating Company divided by
the number of his or her total months of employment in such period of
employment.
2.13 Base Salary: A Participant's annual base rate of salary,
determined as of a given date.
2.14 Beneficiary:
(a) Retirement Benefits: Such person or persons or legal entity or
entities designated by a Participant to receive benefits under Article IV or
Plan Exhibits B and C after such Participant's death, or the personal or legal
representative of the Participant, all as herein described and provided. If no
Beneficiary is designated by the Participant or if no Beneficiary survives the
Participant, the Beneficiary shall be the Participant's Surviving Spouse if the
Participant has a Surviving Spouse and otherwise the Participant's estate.
(b) Death Benefits: Such person or persons or legal entity or
entities designated by a Participant or otherwise eligible to receive, pursuant
to Article V or Plan Exhibits B and C, death benefits upon the Participant's
death under the Hunt Manufacturing Co. Group Life Insurance Plan.
(c) Salary Deferral Benefits: Such person or persons or legal
entity or entities designated by a Participant or otherwise eligible to receive,
pursuant to Article VI or Plan Exhibits B and C, salary deferral benefits upon
the Participant's death.
(d) Plan Exhibit B Benefits: Such person or persons or legal entity
or entities designated by Ronald J. Naples to receive, pursuant to Plan Exhibit
B, any benefits due under Plan Exhibit B upon Ronald J. Naples' death.
(e) Plan Exhibit C Benefits: Such person or persons or legal entity
or entities designated by Donald L. Thompson to receive, pursuant to Plan
Exhibit C, any benefits due under Plan Exhibit C upon Donald L. Thompson's
death.
2.15 Board: The Board of Directors of the Company.
2.16 Cause: The Participant's:
(a) Dishonesty, fraud, willful malfeasance, gross negligence or
other gross misconduct, which is materially injurious to the Company or other
Employer, or
(b) Conviction of or plea of guilty to a felony.
2.17 Code: The Internal Revenue Code of 1986, as it may be amended from
time to time.
2.18 Committee: The Pension Committee appointed under the provisions of
Article VIII to administer the Plan.
2.19 Company: HUNT MANUFACTURING CO.
2.20 Computation Period: Any 12-consecutive-month period.
2.21 Corporate Officer: Any Employee of the Company designated by the
Company as a Corporate Officer to receive benefits under Section 3.2, provided
he or she is a member of a select
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group of management or highly compensated employees within the meaning of
section 201(2) of ERISA.
2.22 Deferral Account: An account established under Article VI, and
maintained under this Plan solely as a bookkeeping entry for each Executive
Officer Participant, to which Deferral Amounts, and earnings on such amounts,
are credited, and from which distributions to the Executive Officer Participant
or his or her Beneficiary are debited.
2.23 Deferral Amounts: Amounts credited to an Executive Officer
Participant's Deferral Account pursuant to Section 6.2(b)(1).
2.24 Deferral Percentage: The percentage of an Executive Officer
Participant's Applicable Compensation that the Executive Officer Participant has
elected to defer to his or her Deferral Account. An Executive Officer
Participant's Deferral Percentage may be any whole number as elected by the
Executive Officer Participant on the Appropriate Form.
2.25 Disability: A physical or mental condition enduring for a period
of six months or more, if the affected Participant submits evidence to the
Committee that he or she is totally and permanently disabled and is eligible to
receive disability benefits under the Federal Social Security Act.
2.26 Earliest Retirement Age: The earliest date on which, under the
Plan, the Participant could elect to receive retirement benefits.
2.27 Early Retirement Date: The first day of any month coincident with,
or immediately following, the earlier of:
(a) The Participant's 55th birthday, provided he or she has
completed 15 or more Years of Vesting Service with a Participating Company on
such date, or
(b) The Participant's 52nd birthday, provided he or she has
completed 20 or more Years of Vesting Service with a Participating Company on
such date, and further provided, in either case, that he or she has not reached
his or her Normal Retirement Date.
2.28 Eligible Spouse or Surviving Spouse: The spouse or surviving
spouse of a Participant, provided, however, that for purposes of determining
whether such spouse is eligible for survivor benefits under Section 4.7, such
spouse must have been married to the Participant throughout the one-year period
preceding the Participant's death.
2.29 Employee: Any person employed by a Participating Company.
2.30 Employer: The entity that establishes or maintains the Plan; any
other organization which has adopted the Plan with the consent of such
establishing employer; and any successor of such employer.
2.31 Employment Commencement Date: The date on which the Employee first
performs an Hour of Service for a Participating Company, a Related Company, or
an Affiliate.
2.32 ERISA: The Employee Retirement Income Security Act of 1974, as
amended from time to time.
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2.33 Executive Officer: Any Employee who is an officer or director (as
such terms are defined in Section 16 of the Securities Exchange Act of 1934 and
the rules, regulations and interpretations thereunder) of the Company or of HUNT
MANAGEMENT COMPANY, INC. ("HMC") or of any other Participating Company, or who
is an officer of the Company or HMC of the rank of Vice President or above,
provided he or she is a member of a select group of management or highly
compensated employees within the meaning of section 201(2) of ERISA.
2.34 Hour of Service: An hour of service determined as follows:
(a) Each hour for which:
(1) An Employee is paid, or entitled to payment, for the
performance of duties for the Employer;
(2) An Employee is paid, or entitled to payment, by the
Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence; or
(3) Back pay, irrespective of mitigation of damages, is either
awarded or agreed to by the Employer, provided that the same Hours of
Service shall not be credited under Section 2.34(a)(1) or Section
2.34(a)(2) and under this Section 2.34(a)(3).
(b) Effective for Plan Years beginning after December 31, 1984,
solely for purposes of determining whether a One-Year Break in Service has
occurred during a Vesting Computation Period, an Employee who is absent from
work for maternity or paternity reasons shall receive credit for the Hours of
Service which would otherwise have been credited to such Employee but for such
absence, or in any case in which such Hours of Service cannot be determined,
eight Hours of Service per day of such absence. For purposes of this Section
2.34(b), an absence from work for maternity or paternity reasons means an
absence:
(1) By reason of the pregnancy of the Employee;
(2) By reason of a birth of a child of the Employee;
(3) By reason of the placement of a child with the Employee in
connection with the adoption of such child by such Employee; or
(4) For purposes of caring for such child for a period
beginning immediately following such birth or placement.
The Hours of Service credited under this Section 2.34(b) shall be
credited (i) in the Vesting Computation Period in which the absence begins if
the crediting is necessary to prevent a One-Year Break in Service in that
Computation Period, or (ii) in all other cases, in the following Vesting
Computation Period.
(c) Notwithstanding Section 2.34(a)(2):
(1) No more than 501 Hours of Service shall be credited under
Section 2.34(a)(2) to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not
such period occurs in a single Computation Period);
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(2) Hours of Service shall not be credited under Section
2.34(a)(2) to an Employee for payments made or due under a plan
maintained solely for the purpose of complying with any applicable
workers' compensation, unemployment compensation, or disability
insurance laws;
(3) Hours of Service shall not be credited under Section
2.34(a)(2) to an Employee for any payment which solely reimburses him
or her for medical or medically related expenses he has incurred; and
(4) Hours of Service shall not be credited under Section
2.34(a)(2) to an Employee for any payments made or due to him or her
under this Plan or under any other pension or profit-sharing plan
maintained by the Employer.
(d) In the case of a payment which is made, or due, on account of a
period during which an Employee performs no duties, and which results in the
crediting of Hours of Service under Section 2.34(a)(2), or in the case of an
award or agreement for back pay, to the extent that such award or agreement is
made with respect to a period described in Section 2.34(a)(2), the number of
Hours of Service to be credited shall be determined in accordance with the
applicable regulations prescribed by the Secretary of Labor and set forth in 29
CFR Section 2530.200b-2(b).
(e) Hours of Service described in Section 2.34(a)(1), Section
2.34(a)(2), and Section 2.34(a)(3) shall be credited to Computation Periods in
accordance with the applicable regulations prescribed by the Secretary of Labor
and set forth in 29 CFR Section 2530.200b-2(c).
(f) This Section 2.34 shall not be construed so as to alter, amend,
modify, invalidate, impair, or supersede any law of the United States or any
rule or regulation issued under any such law. The nature and extent of credit
for Hours of Service recognized under this Section 2.34 shall be determined
under such law.
(g) In the case of an Employee who is on leave of absence for
service on active duty in the Armed Forces of the United States, such Employee
shall receive, upon return to the service of the Employer, in addition to credit
for Hours of Service to which such Employee is entitled under this Section 2.34,
such other credit as may be prescribed by Federal laws relating to military
service and veterans' reemployment rights.
(h) The number of Hours of Service to be credited to an Employee in
a Computation Period shall be determined in the following manner:
(1) In the case of an Employee for whom the Employer maintains
records of his or her hours worked and hours for which payment is made
or due, the number of Hours of Service to be credited to such Employee
in a Computation Period shall be determined from such records.
(2) In the case of an Employee for whom the Employer does not
maintain records of his or her hours worked and hours for which
payment is made or due, the number of Hours of Service to be credited
to such Employee in a Computation Period shall be determined on the
basis of periods of employment which shall be the payroll periods of
the Employer applicable to such Employee. An Employee shall be
credited with a number of Hours of Service, determined in accordance
with the following table, for each of his or her payroll periods in
which he or she actually has at least one Hour of Service:
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PAYROLL PERIOD HOURS OF SERVICE CREDITED
---------------- ---------------------------
Daily 10
Weekly 45
Semimonthly 95
Monthly 190
(i) This Section 2.34 shall be administered and interpreted in a
manner which complies with regulations prescribed by the Secretary of Labor and
set forth in 29 CFR Section 2530.200b-2(a), (b), and (c).
(j) Service prior to October 1, 1987, shall be calculated in
accordance with the provisions of the Pension Plan as in effect from time to
time prior to October 1, 1989.
2.35 Insolvency: The Company's becoming insolvent within the meaning of
13 PA. CONS. STAT. ANN. Section 1201 (1984) as presently enacted (i.e., when the
Company either has ceased to pay its debts in the ordinary course of business or
cannot pay its debts as they become payable) or the Company's becoming insolvent
within the meaning of the Federal bankruptcy law, or becoming a debtor in a
proceeding under the Federal bankruptcy code.
2.36 Insolvency Creditor: Any creditor of the Company to whom a
distribution may be made in the event of the Company's Insolvency in accordance
with State and Federal bankruptcy laws to the same effect that unencumbered
assets held by the Company are available to satisfy such claims.
2.37 Joint and Survivor Annuity: An annuity described in Section
4.8(b).
2.38 Late Retirement Date: Any first day of the month following a
Participant's Normal Retirement Date.
2.39 Matching Account: An account established under Article VI, and
maintained under this Plan solely as a bookkeeping entry for each Executive
Officer Participant, to which Matching Amounts, and earnings on such amounts,
are credited, and from which distributions to the Executive Officer Participant
or his or her Beneficiary are debited.
2.40 Matching Amounts: Amounts credited to an Executive Officer
Participant's Matching Account pursuant to Section 6.2(b)(2).
2.41 Normal Retirement Age: The later of:
(a) The date a Participant attains age 65; or
(b) The fifth anniversary of the date a Participant commenced
participation in the Plan. The participation commencement date is the
first day of the first Plan Year in which the Participant commenced
participation in the Plan.
2.42 Normal Retirement Date: The first day of the month coincident
with, or immediately following, the Participant's Normal Retirement Age.
2.43 One-Year Break in Service: Any applicable Vesting Computation
Period in which the Employee completes not more than 500 Hours of Service.
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2.44 Participant:
(a) Retirement Benefits: An Executive Officer participating in the
Plan in accordance with the provisions of Section 3.1, Article IV, Plan Exhibit
C or any former Executive Officer having deferred vested rights under Article IV
and/or Plan Exhibit B.
(b) Death Benefits: A Corporate Officer or former Corporate Officer
participating in the Plan in accordance with the provisions of Section 3.2,
Article V, Plan Exhibit B and Plan Exhibit C.
(c) Salary Deferral Benefits: An Executive Officer participating in
the Plan in accordance with the provisions of Section 3.3, Article VI and Plan
Exhibit C.
(d) Plan Exhibit B Benefits: Ronald J. Naples.
(e) Plan Exhibit C Benefits: Donald L. Thompson.
2.45 Participating Company: The Company and each Affiliate which adopts
the Plan in accordance with Article XI.
2.46 Pension Plan: The Hunt Manufacturing Co. Pension Plan.
2.47 Phantom Stock Plan: The Hunt Manufacturing Co. Phantom Stock Plan
maintained for the benefit of Donald L. Thompson and set forth in Plan Exhibit C
- - Appendix A.
2.48 Plan: The HUNT MANUFACTURING CO. SUPPLEMENTAL EXECUTIVE BENEFITS
PLAN, as set forth herein, which plan is intended to be a plan solely covering a
select group of management or highly compensated employees within the meaning of
section 201(2) of ERISA and the DOL regulations thereunder.
2.49 Plan Year: The fiscal period adopted by the Company for filing its
Federal income tax return.
2.50 Preretirement Survivor Annuity: Under Article IV, a survivor
annuity for the life of the Participant's Surviving Spouse, under which annuity
the payments to the Surviving Spouse are equal to the amounts which would be
payable as a survivor annuity under the Joint and Survivor Annuity if:
(a) In the case of a Participant who dies after his or her Earliest
Retirement Age, such Participant had retired with an immediate Joint and
Survivor Annuity providing a 50 percent survivor annuity on the day before the
Participant's date of death; or,
(b) In the case of a Participant who dies on or before his or her
Earliest Retirement Age, such Participant had:
(1) Separated from service on his or her date of death or, if
earlier, his or her actual date of separation;
(2) Survived to his or her Earliest Retirement Age;
(3) Retired with an immediate Joint and Survivor Annuity
providing a 50 percent survivor annuity at his or her Earliest
Retirement Age; and
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(4) Died on the day after his or her Earliest Retirement Age.
2.51 Present Value: The present value of a benefit determined on the
basis of the Applicable Interest Rate and the Applicable Mortality Table.
2.52 Related Company: Any predecessor in interest to the Company or to
any Affiliate.
2.53 Spouse: The Eligible Spouse of a Participant under Article IV.
2.54 Trust: The grantor trust (within the meaning of section 671 of the
Code) established pursuant to the HUNT MANUFACTURING CO. SUPPLEMENTAL EXECUTIVE
BENEFITS PLAN TRUST AGREEMENT.
2.55 Trustee: CORESTATES BANK, N.A., or any corporate successor thereto
appointed by the Committee to administer the Trust.
2.56 Vesting Computation Period: Under Article IV, the 12-month period
beginning on an Employee's Employment Commencement Date and successive
anniversaries thereof.
2.57 Year of Benefit Service: Under Article IV, a Year of Benefit
Service as defined in the Pension Plan.
2.58 Year of Vesting Service: Under Articles IV and VI, a Year of
Vesting Service as defined in the Pension Plan.
Article III - Participation
3.1 Retirement Benefits:
(a) Eligibility to Participate:
(1) Any Executive Officer participating in the Plan on December
31, 1995, with respect to the retirement benefits provided under
Article IV, shall continue to be eligible to participate in the Plan
on January 1, 1996, provided he or she is an Executive Officer on such
date.
(2) Any Employee who becomes an Executive Officer on January 1,
1996, shall be eligible to participate in the Plan, with respect to
the retirement benefits provided under Article IV, on January 1, 1996.
Any other Employee who becomes an Executive Officer after January 1,
1996, shall be eligible to participate in the Plan, with respect to
the retirement benefits provided under Article IV, as of the date such
Employee becomes an Executive Officer.
(b) Participation: Any Executive Officer participating in the Plan
on December 31, 1995, with respect to retirement benefits provided under Article
IV, shall continue to participate in the Plan on January 1, 1996, provided he or
she is still an Executive Officer on such date. Any other Employee who meets the
eligibility requirements of Section 3.1 shall become a Participant in the Plan,
with respect to the retirement benefits provided under Article IV, as of the
latest of:
(1) January 1, 1996,
(2) The date he or she meets such eligibility requirements, or
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(3) The date he or she becomes a participant in the Pension
Plan.
3.2 Death Benefits:
(a) Eligibility to Participate:
(1) Any Corporate Officer participating in the Plan on December
31, 1995, with respect to the death benefits provided under Article V,
shall continue to be eligible to particpate in the Plan on January 1,
1996, provided he or she is a Corporate Officer on such date.
(2) Any Employee who becomes a Corporate Officer on January 1,
1996, shall be eligible to participate in the Plan, with respect to
the death benefits provided under Article V, on January 1, 1996. Any
other Employee who is designated by the Company as a Corporate Officer
after January 1, 1996, shall be eligible to participate in the Plan,
with respect to the death benefits provided under Article V, as of the
date such Employee is designated by the Company as a Corporate
Officer.
(b) Participation: Any Corporate Officer participating in the Plan
on December 31, 1995, with respect to the death benefits provided under Article
V, shall continue to participate in the Plan on January 1, 1996, provided he or
she is still a Corporate Officer on such date. Any other Employee who meets the
eligibility requirements of Section 3.2 shall become a Participant in the Plan,
with respect to the death benefits provided under Article V, as of the later of
(1) January 1, 1996, or
(2) The date he or she meets such eligibility requirements.
3.3 Salary Deferral Benefits:
(a) Eligibility to Participate:
(1) Any Employee who is an Executive Officer (other than Robert
B. Fritsch) on January 1, 1996, shall be eligible to participate in
the Plan, with respect to the salary deferral benefits provided under
Article VI, on January 1, 1996.
(2) Any Employee who becomes an Executive Officer after January
1, 1996, shall be eligible to participate in the Plan, with respect to
the salary deferral benefits provided under Article VI, as of the date
such Employee becomes an Executive Officer.
(b) Participation: An Employee who meets the eligibility
requirements of Section 3.3 shall become a Participant in the Plan, with respect
to the salary deferral benefits provided under Article VI, as of the latest of:
(1) January 1, 1996,
(2) The date he or she meets such eligibility requirements, or
(3) The date he or she meets the requirements of Section 6.1.
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Article IV - Retirement Benefits
4.1 General Rules:
(a) Eligibility: Only those Participants who are Executive Officers
meeting the requirements of Section 3.1 shall be entitled to the retirement
benefits provided by this Article IV.
(b) Retirement Dates: Subject to the provisions of the Plan, an
Executive Officer Participant's Early, Normal, or Late Retirement Date, as the
case may be, shall occur on the date provided by the Plan, provided the
Executive Officer Participant is living on that date. An Executive Officer
Participant who does not retire or otherwise separate from service on or before
his or her Normal Retirement Date shall continue to participate in the Plan
until he or she retires on his or her Late Retirement Date.
(c) Amount and Manner of Payment of Retirement Benefits: All
retirement benefits shall be in the amount provided by the benefit formula under
Section 4.2 and as determined in accordance with the provisions of this Plan,
and shall, except as otherwise specifically provided herein, be paid in monthly
installments. At least 30 days prior to the Executive Officer Participant's
retirement date, the Committee and Trustee shall take all necessary steps and
shall execute or have requested execution by the Executive Officer Participant
of all documents required to provide for the payment of the Executive Officer
Participant's retirement benefit.
4.2 Normal Retirement Pension:
(a) In General: Each Executive Officer Participant shall accrue a
monthly retirement pension payable at his or her Normal Retirement Date in the
form of a single life annuity (normal retirement pension) equal to the
following:
(1) 2% of such Executive Officer Participant's Average Monthly
Compensation, multiplied by such Executive Officer Participant's Years
of Benefit Service not in excess of 25 Years of Benefit Service; plus
(2) 1% of the Executive Officer Participant's Average Monthly
Compensation, multiplied by such Executive Officer Participant's Years
of Benefit Service in excess of 25 Years of Benefit Service, up to a
maximum of 10 such excess Years of Benefit Service; reduced by
(3) The monthly retirement pension payable to the Executive
Officer Participant at his or her Normal Retirement Date in the form
of a single life annuity under the Pension Plan.
(b) Vested Benefit: An Executive Officer Participant shall have a
nonforfeitable (vested) right to his or her normal retirement pension when he or
she attains his or her Normal Retirement Age.
(c) Monthly Pension: An Executive Officer Participant who retires
on his or her Normal Retirement Date shall be entitled to receive his or her
normal retirement pension, as calculated under Section 4.2(a), in accordance
with the provisions of Section 4.1(b), commencing on his or her Normal
Retirement Date (except as otherwise provided in Section 4.11) and payable for
his or her lifetime.
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(d) Normal Form of Payment: The form of benefit paid under Section
4.2(c) (i.e., payment of the benefit calculated under Section 4.2(a) to the
Executive Officer Participant for his or her life as a single life annuity) is
the normal form of benefit under this Article IV.
4.3 Early Retirement: An Executive Officer Participant may retire on
his or her Early Retirement Date. An Executive Officer Participant retiring
under this Section 4.3 shall be entitled to receive the benefit described in
Section 4.2 commencing, except as otherwise provided below, as of the date which
would have been his or her Normal Retirement Date,unless he or she irrevocably
elects, no later than the later of:
(a) 30 days prior to his or her termination of employment with the
Participating Companies, or
(b) 30 days prior to the beginning of his or her taxable year in
which occurs the Annuity Starting Date, to have payment of a reduced pension
commence on a date specified by him or her. Such date must be:
(1) After the date he or she terminates employment with the
Participating Companies,
(2) No earlier than the first day of his or her taxable year
following the date of his or her election, and
(3) Prior to the date which would have been his or her Normal
Retirement Date.
If payment of a reduced pension commences prior to the date the
Executive Officer Participant attains Normal Retirement Age, said reduced
pension shall be equal to the Executive Officer Participant's Accrued Benefit
reduced by the factors set forth in Table I of Plan Exhibit A.
4.4 Late Retirement: An Executive Officer Participant who retires after
his or her Normal Retirement Date shall receive a monthly pension commencing as
of the first day of the month coincident with or next following the date on
which he or she actually retires, which shall be his or her Late Retirement
Date. Such pension shall be in an amount based on his or her Years of Benefit
Service with a Participating Company (up to 35), as calculated under Section
4.2, rendered up to his or her actual retirement date, without actuarial
increase to reflect the Executive Officer Participant's shorter life expectancy.
4.5 Disability Retirement Pension:
(a) Eligibility and Commencement Date: Subject to Section 4.5(c),
an Executive Officer Participant who separates from service by reason of
Disability shall be eligible for a retirement pension in accordance with (1) or
(2) below:
(1) Executive Officer Participant Ineligible to Receive
Benefits under Long-Term Disability Plan of a Participating Company:
(A) Eligibility for Disability Benefit: If the Executive
Officer Participant is not eligible for benefits under a long-term
disability plan maintained by a Participating Company, such
Executive Officer Participant shall be eligible for a Disability
retirement pension if he or she retires on or after the first day
of the month coincident with or next following the determination by
the Committee of the Executive
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Officer Participant's eligibility for a Disability retirement
pension. Such pension shall commence on the date which would have
been the Executive Officer Participant's Normal Retirement Date,
unless he or she irrevocably elects, no later than 30 days prior to
the first day of his or her taxable year in which occurs the
Annuity Starting Date, to have payment commence on a date specified
by him or her which date must be:
(i) After the date he or she terminates employment with
the Participating Companies by reason of Disability,
(ii) No earlier than the first day of his or her
taxable year following the date of his or her election, and
(iii) Prior to the date which would have been his or
her Normal Retirement Date.
(B) Cessation of Disability: Disability shall be considered
to have ended, and entitlement to a Disability retirement pension
shall cease, if, prior to his or her Normal Retirement Date, the
Executive Officer Participant:
(i) Is reemployed by a Participating Company;
(ii) Engages in any substantially gainful activity,
except for such employment as is found by the Committee to be
for the primary purpose of rehabilitation or not incompatible
with a finding of total and permanent disability;
(iii) Has sufficiently recovered in the opinion of the
Committee, based on a medical examination by a doctor or
clinic appointed by the Committee, to be able to engage in
regular employment with a Participating Company and refuses an
offer of employment by a Participating Company; or
(iv) Refuses to undergo any medical examination
requested by the Committee, provided that a medical
examination shall not be required more frequently than twice
in any calendar year.
If entitlement to a Disability retirement pension ceases in accordance
with the provisions of this Section 4.5(a)(1)(B), such Executive Officer
Participant shall not be prevented from qualifying for a benefit under another
provision of the Plan, and the Disability retirement pension payments received
shall be disregarded in computing the amount of such benefit. However, the
Executive Officer Participant shall not be credited with either Years of Vesting
Service or Years of Benefit Service during the period he or she receives or
could have received a Disability retirement pension pursuant to this Section
4.5(a)(1).
(2) Executive Officer Participant Eligible to Receive Benefits
under Long-Term Disability Plan of Participating Company: If the
Executive Officer Participant is eligible for benefits under a
long-term disability plan maintained by a Participating Company, he or
she shall not be entitled to receive a pension under Section
4.5(a)(1), but shall be deemed to continue to be an Executive Officer
Participant in this Plan and shall continue to be credited with Years
of Vesting Service and Years of Benefit Service during the period of
his or her Disability, provided, however, that no Years of Benefit
Service shall be credited after such Executive Officer Participant
attains his or her Normal Retirement Date. If such Executive
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Officer Participant continues in Disability status until his or her
Normal Retirement Date, he or she shall be eligible for a Disability
retirement pension at his or her Normal Retirement Date and payment of
such pension shall commence on his or her Normal Retirement Date.
If an Executive Officer Participant's Disability ends prior to his or
her Normal Retirement Date for any of the reasons specified in Section
4.5(a)(1)(B) above and he or she is reemployed by a Participating Company within
a reasonable period of time as specified by the Committee, he or she shall
continue to be an Executive Officer Participant, and the period during which he
or she was on Disability, even if such period exceeds one year, shall not be
deemed to be a One-Year Break in Service. Such Executive Officer Participant
shall, upon his or her reemployment by a Participating Company, be credited with
Years of Vesting Service and Years of Benefit Service during his or her period
of Disability, and, for purposes of determining his or her retirement pension
under the Plan, his or her Applicable Compensation earned in the calendar year
immediately preceding his or her Disability shall be assumed to remain constant
until his or her Disability ends. If the Executive Officer Participant does not
become an Employee within the period specified by the Committee, he or she will
not be credited with any additional Years of Vesting Service or Years of Benefit
Service for the period of his or her Disability, and his or her right to any
benefits under the Plan shall be determined in accordance with the provisions of
the Plan without regard to this Section 4.5.
(b) Amount and Manner of Payment:
(1) Amount: The amount of the Disability retirement pension, on
a single-life basis, shall be determined in the same manner as the
normal retirement pension under Section 4.2, based upon:
(A) In the case of an Executive Officer Participant
described in Section 4.5(a)(1), his or her Years of Benefit Service
rendered to the date of Disability, calculated in the same manner
as set forth in Section 4.2, without actuarial reduction.
(B) In the case of an Executive Officer Participant
described in Section 4.5(a)(2), the Executive Officer Participant's
Average Monthly Compensation, determined as though he or she
continued to earn, in each calendar year of his or her Disability,
the greater of the following amounts:
(i) The Applicable Compensation earned during the
calendar year which includes his or her first date of absence
due to Disability; or
(ii) The Applicable Compensation earned during the
calendar year immediately preceding the calendar year which
includes his or her first date of absence due to Disability.
(2) Manner of Payment: Payment shall be made in accordance with
the provisions of Section 4.1(b).
(c) Prior Election of Early Retirement Pension: An Executive
Officer Participant who has attained his or her Early Retirement Date and has
elected an early retirement pension under either the Plan or the Pension Plan
shall not be eligible for a Disability retirement pension under the Plan unless
such Executive Officer Participant separated from service with the Participating
Companies by reason of Disability and payment of an early retirement pension was
made solely on an interim basis until a determination could be made, by the
Federal Social Security Administration, of the
-15-
eligibility of such Executive Officer Participant to receive disability benefits
under the Federal Social Security Act as a result of such Executive Officer
Participant's incurring a Disability prior to the termination of such Executive
Officer Participant's service with the Participating Companies. Any Disability
payments under this Section 4.5 shall be made retroactive to the date payment of
the Executive Officer Participant's early retirement pension commenced but shall
be reduced by any early retirement pension payments previously made to such
Executive Officer Participant. No further early retirement pension payments
shall be made after the determination of the Executive Officer Participant's
eligibility for a Disability pension.
4.6 Separation: An Executive Officer Participant shall be fully vested
in his or her Accrued Benefit under the Plan when he or she completes 15 Years
of Vesting Service. Except as otherwise provided in the Plan, such Executive
Officer Participant shall have no vested interest in benefits under this Article
IV until he or she completes 15 Years of Vesting Service. Any Executive Officer
Participant who separates from the service of a Participating Company (other
than for purposes of transferring to another Participating Company) after he or
she has completed 15 Years of Vesting Service but before his or her Early
Retirement Date shall be entitled to a deferred pension commencing at the date
which would have been his or her Normal Retirement Date, unless the Executive
Officer Participant irrevocably elects no later than the later of (a) 30 days
prior to his or her termination of employment with the Participating Companies,
or (b) 30 days prior to the beginning of his or her taxable year in which occurs
his or her Annuity Starting Date, to have payment commence on a date specified
by him or her which date must be (i) after the date he or she terminates
employment with the Participating Companies, (ii) no earlier than the first day
of his or her taxable year following the date of his or her election, (iii) no
earlier than the date on which he or she attains age 55, and (iv) prior to the
date which would have been his or her Normal Retirement Date. The amount of the
deferred pension shall be in accordance with the Executive Officer Participant's
vested Accrued Benefit calculated as of the date of his or her separation from
service, but reduced, if payment commences prior to Normal Retirement Date, by
the factors set forth in Table II of Plan Exhibit A.
4.7 Preretirement Survivor Annuity:
(a) Death of Executive Officer Participant after Earliest
Retirement Age: If an Executive Officer Participant dies after his or her
Earliest Retirement Age, the Executive Officer Participant's Surviving Spouse
(if any) shall receive a Preretirement Survivor Annuity as determined under
Section 2.50(a).
(b) Death of Executive Officer Participant on or before Earliest
Retirement Age: If an Executive Officer Participant dies on or before the
Earliest Retirement Age, the Executive Officer Participant's Surviving Spouse
(if any) shall receive a Preretirement Survivor Annuity as determined under
Section 2.50(b).
(c) Commencement Date of Payments: Payments to an Executive Officer
Participant's Surviving Spouse under a Preretirement Survivor Annuity shall
begin within 60 days following the later of the date of the Executive Officer
Participant's death or the date which would have been the Executive Officer
Participant's Earliest Retirement Age unless the Executive Officer Participant
elected, prior to his or her death, to have payment commence at a later date
specified by him or her but a date which is no later than the date which would
have been his or her Normal Retirement Date. Benefits commencing after the later
of the Executive Officer Participant's date of death or Earliest Retirement Age
shall be the Actuarial Equivalent of the benefit to which the Surviving Spouse
would have been entitled if benefits had commenced at the later of the Executive
Officer Participant's date of death or Earliest Retirement Age under an
immediate Joint and Survivor Annuity in accordance with Section 4.8(b).
-16-
4.8 Forms of Pension: An Executive Officer Participant's benefit under
this Article IV may be paid in any one of the following forms, each of which
shall be the Actuarial Equivalent of the vested Accrued Benefit (i.e., the
single life annuity under Section 4.2(d)) to which such Executive Officer
Participant would otherwise be entitled:
(a) Single Life Annuity: A single life annuity for the Executive
Officer Participant's life commencing on his or her Annuity Starting Date and
ending on the date of his or her death.
(b) Joint and Survivor Annuity: An immediate annuity for the life
of the Executive Officer Participant with a survivor annuity for the life of his
or her Surviving Spouse which is equal to 50 percent or 100 percent of the
amount of the annuity payable during the joint lives of the Executive Officer
Participant and his or her Spouse.
(c) Period Certain and Life Annuity: An annuity payable to the
Executive Officer Participant for life in equal monthly payments, but, in the
event of his or her death within the period of ten years after commencement of
benefits, the same reduced amount to be paid for the remainder of such ten-year
period to the Executive Officer Participant's Beneficiary. In the event of the
death of the Executive Officer Participant and his or her Beneficiary before the
full value of the pension has been paid out, the commuted value of the balance
of the payments, as determined by the Committee, shall be paid in a lump sum to
the following relatives of the Executive Officer Participant, if living, in the
order set forth:
(1) Spouse;
(2) Children and their issue, per stirpes;
(3) Parents, in equal shares;
(4) Brothers and sisters, in equal shares; and
(5) Nephews and nieces, in equal shares.
If no such relatives are living, the commuted value shall be paid to
the Executive Officer Participant's estate.
A single Executive Officer Participant's pension under this Article IV
shall be paid in the form of a single life annuity, and a married Executive
Officer Participant's pension under this Article IV shall be paid in the form of
a Joint and 50% Survivor Annuity. Notwithstanding the foregoing, an Executive
Officer Participant shall be entitled to elect (with the consent of his or her
spouse if he or she is married), no later than the later of (A) 30 days prior to
his or her termination of employment with the Participating Companies, or (B) 30
days prior to the beginning of his or her taxable year in which occurs his or
her Annuity Starting Date, to receive his or her benefit under this Article IV
in any of the optional forms provided above.
4.9 Beneficiary Designation and Proof:
(a) Designation of Beneficiary: At any time, and from time to time,
each Executive Officer Participant and former Executive Officer Participant
shall have the unrestricted right to designate the Beneficiary to receive the
benefits due such Executive Officer Participant or former Executive Officer
Participant under this Article IV upon his or her death, and to revoke any such
designation. Each such designation, or revocation thereof, shall be evidenced on
the Appropriate Form signed by the Executive Officer Participant and filed with
the Committee. If no such
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designation is on file with the Committee at the time of the death of an
Executive Officer Participant or former Executive Officer Participant, or if
such designation is not effective for any reason, as determined by the
Committee, then the executor of the will or administrator of the estate of such
Executive Officer Participant or former Executive Officer Participant shall be
conclusively deemed to be the Beneficiary designated to receive such death
benefit.
(b) Documentary Proof: The Committee and the Trustee may require
the execution and delivery of such documents, papers, and receipts as they may
deem reasonably necessary in order to be assured that the payment of any death
benefit is made to the person or persons entitled thereto.
4.10 Divestment for Cause: Notwithstanding any provision in the Plan to
the contrary, any benefit payable under this Article IV shall be forfeited in
the event Participant's employment with a Participating Company is terminated
for Cause or in the event it is found by the Committee that a Participant
hereunder, following termination of employment with a Participating Company,
willfully engaged in any activity which is determined by the Committee to be an
activity which might reasonably be considered by the Committee to constitute
Cause. If the Committee so finds, it may suspend such benefits to such retired
Participant or his or her Beneficiary and, after furnishing notice to the
retired Participant, may terminate such benefits under this Plan. The Committee
shall consider in its deliberation relative to this provision any explanation or
justification submitted to it in writing by the retired Participant or his or
her Beneficiary within 60 days following the giving of said notice.
Except as heretofore provided for in this Section 4.10, the acceptance
by a retired Participant of any benefit under this Article IV shall constitute
an agreement with the provisions of this Plan and a representation that he or
she is not engaged or employed in any activity serving as a basis for suspension
or forfeiture of benefits hereunder. The Committee may require each retired
Participant eligible for a benefit under this Article IV to acknowledge in
writing prior to payment of such benefit that he or she will accept payment of
benefits under this Article IV only if there is no basis for such suspension or
forfeiture.
4.11 Elective Transfer of Life Insurance Policies Providing Article IV
Benefits:
(a) Retirement. Any Participant who retires on or after his or her
Early Retirement Date may elect, upon such retirement, or thereafter, in the
manner provided in Section 4.11(e), to have transferred to him or her the life
insurance policies held by the Trust under the Plan to provide benefits to such
Participant under this Article IV of the Plan. In the event of such transfer,
such retired Participant shall be entitled to no further benefits under this
Article IV.
(b) Disability: Any Participant who separates from service by
reason of Disability under Section 4.5 may elect, at the time such Participant
is entitled to receive a retirement pension under Section 4.5, or thereafter, in
the manner provided in Section 4.11(e), to have transferred to him or her the
life insurance policies held by the Trust under the Plan to provide benefits to
such Participant under this Article IV of the Plan. In the event of such
transfer, such Participant shall be entitled to no further benefits under this
Article IV.
(c) Death: This Section 4.11 shall not apply to any Participant or
his or her beneficiary if such Participant dies before the transfer of the life
insurance policies held by the Trust under the Plan to provide benefits to such
Participant under this Article IV of the Plan.
(d) Termination of Employment for Reasons Other than Retirement,
Disability or Death: The following provisions apply to a Participant whose
employment terminates for any reason other than retirement, Disability or death:
-18-
(1) Voluntary Termination of Employment:
(A) Voluntary Termination with Less than 15 Years of
Vesting Service: Any Participant who voluntarily terminates his or
her employment with the Participating Companies with less than 15
Years of Vesting Service shall not be entitled to elect to have
transferred to him or her the life insurance policies held by the
Trust under the Plan to provide benefits to such Participant under
this Article IV of the Plan. Such Participant shall be entitled to
no benefits under this Article IV.
(B) Voluntary Termination with 15 or More Years of Vesting
Service: Any Participant who voluntarily terminates his or her
employment with the Participating Companies with 15 or more Years
of Vesting Service may elect, upon his or her termination of
employment, or thereafter, in the manner provided in Section
4.11(e), to have transferred to him or her the life insurance
policies held by the Trust under the Plan to provide benefits to
such Participant under this Article IV of the Plan. In the event of
such transfer, such Participant shall be entitled to no further
benefits under this Article IV.
(2) Involuntary Termination of Employment:
(A) Involuntary Termination for Any Reason Other than Cause
or Performance Limitations: Any Participant whose employment is
involuntarily terminated for any reason other than Cause or
performance limitations may elect, without regard to the number of
Years of Vesting Service he or she has completed, upon his or her
involuntary termination of employment, or thereafter, in the manner
provided in Section 4.11(e), to have transferred to him or her the
life insurance policies held by the Trust under the Plan to provide
benefits to such Participant under this Article IV of the Plan
subject to the following conditions:
(i) If such Participant is entitled to receive "Salary
Continuation Benefits" under the Hunt Manufacturing Co.
Officers' Severance Plan (the "Severance Plan"), such
Participant must sign a "Separation Agreement" under the
Severance Plan; and
(ii) Such elective transfer shall not occur until the
end of the "Severance Period" under the Severance Plan.
In the event of such transfer, such Participant shall be entitled to no
further benefits under this Article IV.
(B) Involuntary Termination of Participant with 15 or more
Years of Vesting Service for Performance Limitations: If the
employment of a Participant who has completed 15 or more Years of
Vesting Service is involuntarily terminated for performance
limitations, such Participant may elect, upon his or her
involuntary termination of employment for performance limitations,
or thereafter, in the manner provided in Section 4.11(e), to have
transferred to him or her the life insurance policies held by the
Trust under the Plan to provide benefits to such Participant under
this Article IV of the Plan subject to the following conditions:
(i) If such Participant is entitled to receive "Salary
Continuation Benefits" under the Hunt Manufacturing Co.
Officers' Severance
-19-
Plan (the "Severance Plan"), such Participant must sign a
"Separation Agreement" under the Severance Plan; and
(ii) Such elective transfer shall not occur until the
end of the "Severance Period" under the Severance Plan.
In the event of such transfer, such Participant shall be entitled to no
further benefits under this Article IV.
(C) Involuntary Termination of Participant with Less than
15 Years of Vesting Service for Performance Limitations: This
Section 4.11 shall not apply to any Participant whose employment is
terminated for performance limitations if such Participant has not
completed at least 15 Years of Vesting Service. Such Participant
shall not be entitled to any benefits under this Article IV.
(D) Involuntary Termination for Cause: This Section 4.11
shall not apply to any Participant whose employment is terminated
for Cause regardless of the number of Years of Vesting Service such
Participant has completed. Such Participant shall not be entitled
to any benefits under this Article IV.
(e) Manner and Effect of Election: Any election under this Section
4.11 to have transferred to the Participant his or her life insurance policies
held by the Trust under the Plan to provide such Participant benefits under this
Article IV must be made at least 60 days before the beginning of the
Participant's taxable year in which such transfer is to be made. In the event of
such transfer, such Participant shall be entitled to no further benefits under
this Article IV.
Article V - Death Benefits
5.1 Death Benefits: Upon the death of a Corporate Officer Participant
while employed by a Participating Company or during the period such Corporate
Officer Participant is receiving "Salary Continuation Benefits" under the Hunt
Manufacturing Co. Officers Severance Plan, a death benefit shall be payable to a
Corporate Officer Participant's Beneficiary within a reasonable period of time
following the death of the Corporate Officer Participant. The amount of the
death benefit shall be:
(a) Three times the Corporate Officer Participant's Base Salary
(determined as of the date of his or her death); reduced by
(b) $50,000.
The death benefit payable under this Section 5.1 shall be automatically
adjusted to reflect any increase or decrease in the Corporate Officer
Participant's Base Salary. No death benefit shall be payable if the death of the
Corporate Officer Participant occurs after his or her retirement or other
termination of employment with the Company or Participating Company.
5.2 Divestment for Cause: There shall be no divestment for Cause of any
benefits under this Article V.
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Article VI - Salary Deferral Benefits
6.1 Participation:
(a) An Executive Officer (other than Robert B. Fritsch) may elect
to participate in the salary deferral portion of the Plan by filing an election
stating his or her desired Deferral Percentage on the Appropriate Form with the
Committee. An Executive Officer's participation in the salary deferral portion
of the Plan shall commence on January 1 of the calendar year immediately
following the year in which the Executive Officer files the election, except
that when an Executive Officer files an election within 30 days of first
becoming eligible to participate in the Plan, participation shall commence on
the date of such filing.
(b) Participation in the salary deferral portion of the Plan shall
continue until the Executive Officer Participant furnishes written notice to the
Committee of the Executive Officer Participant's election to terminate his or
her participation in the salary deferral portion of the Plan or until such time
as the Company terminates the Plan pursuant to Section 9.3 below. An Executive
Officer Participant's election to terminate participation shall be made by
written notice delivered or mailed to the Committee no later than December 31 of
the calendar year preceding the calendar year in which such termination is to
take effect.
(c) An Executive Officer Participant who has terminated his or her
participation in the salary deferral portion of the Plan may subsequently elect
to participate in the Plan by filing a new election in accordance with Section
6.1(a).
(d) An Executive Officer Participant may alter his or her Deferral
Percentage for any future calendar year by filing a new election with the
Committee on or before December 31 of the calendar year preceding the calendar
year for which the new Deferral Percentage is to take effect.
6.2 Accounts:
(a) Establishment of Accounts: For each Executive Officer
Participant, the Committee shall establish, on the books of the Participating
Company, a Deferral Account and a Matching Account, to record Deferral Amounts
and Matching Amounts credited to the Executive Officer Participant, as well as
the periodic adjustments made to such amounts in accordance with Section 6.4(a).
(b) Crediting of Accounts:
(1) Deferral Amounts: While an Executive Officer Participant
participates in the Plan pursuant to an election on an Appropriate
Form, the Participating Company shall credit a Deferral Amount to the
Executive Officer Participant's Deferral Account each payroll period.
The Deferral Amount shall equal the Executive Officer Participant's
Applicable Compensation for the payroll period multiplied by his or
her Deferral Percentage.
(2) Matching Amounts: For each payroll period in which a
Deferral Amount is credited to an Executive Officer Participant's
Deferral Account, the Participating Company shall credit a Matching
Amount to the Executive Officer Participant's Matching Account. The
Matching Amount shall equal twenty-five percent (25%) of the Allowed
Deferral Amount. For purposes of this subsection, the Allowed Deferral
Amount shall be the lesser of the Executive Officer Participant's
Deferral Amount for the payroll period, or six percent (6%) of the
Executive Officer Participant's Applicable Compensation for the
payroll period.
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(3) Earnings on Accounts: An Executive Officer Participant
shall request that amounts credited to his or her Accounts be
allocated among the investment options available under the Plan by
submitting a written request to the Committee on the Appropriate Form
prior to the date deferrals are scheduled to begin. The Committee
shall specify from time to time the investment options available under
the Plan. The Executive Officer Participant may request that the
investment allocation of his or her Accounts as well as that of future
amounts credited to his or her Accounts be changed by submitting a
written request to the Committee on the Appropriate Form. Such changes
shall become effective as soon as administratively feasible after the
Committee receives such request.
The Executive Officer Participant's Accounts will be credited with any
income, gains, and losses that would have been realized if amounts equal to the
Deferral and Matching Amounts had been invested in accordance with the Executive
Officer Participant's allocation request on the date such amounts were credited
to the Executive Officer Participant's Accounts and reinvested in accordance
with any subsequent investment allocation requests. For this purpose, any
amounts that would have been received from a chosen investment option as
interest, dividends, distributions, or otherwise, had the amounts actually been
invested as described above, will be treated as if reinvested in that option on
the date such amounts would have been received.
6.3 Vesting:
(a) Deferral Account: Each Executive Officer Participant will be
one-hundred percent (100%) vested in the balance in his or her Deferral Account
at all times.
(b) Matching Account: Each Executive Officer Participant will
become vested in the balance in his or her Matching Account after completing the
number of Years of Vesting Service set forth in the following table:
YEARS OF VESTING SERVICE PERCENT VESTED
-------------------------- ----------------
Less than 1 0
1 20
2 40
3 60
4 80
5 or more 100
6.4 Valuation of Accounts:
(a) Quarterly Valuations: At least quarterly, the Committee shall
adjust the Accounts of each Executive Officer Participant to reflect
distributions and income earned since the previous valuation date.
(b) Statement of Accounts: At least once each Plan Year, the
Committee shall furnish each Executive Officer Participant with a written
statement of his or her Accounts.
6.5 Manner and Time of Distribution of Accounts:
(a) Normal Manner and Time of Distribution: The vested balance in
an Executive Officer Participant's Accounts shall be paid in a single sum as
soon as practicable after the Executive
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Officer Participant separates from service with the Participating Companies and
all their Affiliates for any reason.
(b) Election of Distribution Dates: An Executive Officer
Participant may choose a date of distribution for the amounts credited to his or
her Accounts in future calendar years, other than the date specified in Section
6.5(a), by filing an election with the Committee on or before December 31 of the
calendar year preceding the calendar year in which Deferral Amounts and Matching
Amounts subject to the new date of distribution are to be credited. Each time an
Executive Officer Participant so changes the date of distribution, a new
Deferral Account and a new Matching Account may be established to track future
Deferral Amounts and Matching Amounts and earnings thereon.
(c) Election of Manner of Distribution: An Executive Officer
Participant may elect any of the distribution methods provided under Section
6.5(d), rather than the single sum manner of distribution provided under Section
6.5(a), for amounts credited to his or her Accounts in future calendar years, by
filing an election with the Committee on or before December 31 of the calendar
year preceding the calendar year in which Deferral Amounts and Matching Amounts
subject to the new manner of distribution are to be credited. Each time an
Executive Officer Participant so changes the manner of distribution, a new
Deferral Account and a new Matching Account may be established to track future
Deferral Amounts and Matching Amounts and earnings thereon.
(d) Methods of Distribution: Distribution of vested Account
balances under this Article VI may be made in a single sum or in installments,
payable monthly, quarterly or annually, over a period not to exceed ten years,
as elected by the Participant in accordance with Section 6.5(c).
(e) Death of Executive Officer Participant: Notwithstanding any
elections under Sections 6.5(b) or 6.5(c), if an Executive Officer Participant
dies prior to the complete distribution to him or her of his or her Accounts,
the remaining vested balance in such Accounts shall be paid to the Beneficiary
of the Executive Officer Participant in a single sum as soon as practicable
after the Executive Officer Participant's death.
6.6 Hardship Distributions: The Committee may at any time make a
payment to an Executive Officer Participant in an amount up to the Executive
Officer Participant's vested balance in his or her Accounts upon a showing of an
unforeseeable emergency. An unforeseeable emergency is a severe financial
hardship to the Executive Officer Participant resulting from a sudden and
unexpected illness or accident of the Executive Officer Participant or of a
dependent (as defined in section 152(a) of the Code) of the Executive Officer
Participant, loss of property due to casualty, or other similar extraordinary
and unforeseeable circumstances arising as a result of events beyond the control
of the Executive Officer Participant. The need to send an Executive Officer
Participant's child to college or the desire to purchase a home are not
unforeseeable emergencies. Payments may not be made to the extent the hardship
is or may be relieved (1) through reimbursement or compensation by insurance or
otherwise, or (2) by liquidation of the Executive Officer Participant's assets,
to the extent such liquidation would not itself cause severe financial hardship.
The determination of whether an unforeseeable emergency within the
meaning of this Section exists shall be made at the sole discretion of the
Committee. The amount of any such emergency distribution shall be limited to the
amount necessary to meet the emergency.
6.7 Distribution on Account of Educational Expenses: An Executive
Officer Participant may request a distribution in an amount up to the Executive
Officer Participant's vested balance in his or her Accounts for tuition, related
educational fees, and room and board for the next 12 months of post-secondary
education for the Executive Officer Participant, his or her spouse or children
or dependents.
-23-
Such request must be made on or before December 31 of the calendar year
preceding the calendar year of distribution. The Committee may grant such
request in its sole discretion.
6.8 Beneficiary Designation: Each Executive Officer Participant shall
designate on the Appropriate Form the Beneficiary or Beneficiaries to whom the
vested balance of his or her Accounts shall be paid in the event of his or her
death prior to the complete distribution of his or her Accounts to him. Each
Beneficiary designation shall be effective only when filed with the Committee
during the Executive Officer Participant's lifetime.
Any Beneficiary designation may be changed by an Executive Officer
Participant without the consent of any designated Beneficiary or any other
person by the filing of a new Beneficiary designation with the Committee. The
filing of a new Beneficiary designation shall cancel all Beneficiary
designations previously filed.
If any Executive Officer Participant fails to designate a Beneficiary
in the manner provided above, if the Beneficiary designated by an Executive
Officer Participant predeceases the Executive Officer Participant, or if the
Beneficiary designated by an Executive Officer Participant dies after the
Executive Officer Participant dies, but before receiving distribution of the
Executive Officer Participant's Accounts, the Committee shall direct such
Executive Officer Participant's Accounts (or the balance thereof) to be
distributed:
(a) To the Executive Officer Participant's surviving spouse; or
(b) If the Executive Officer Participant has no surviving spouse,
then to the Executive Officer Participant's estate.
6.9 Divestment for Cause: There shall be no divestment for Cause of any
benefits under this Article VI.
6.10 Elective Transfer of Life Insurance Policies Providing Article VI
Benefits: Any Participant who has a vested interest in his or her Accounts may
elect, upon his or her termination of employment, or thereafter in the manner
provided in this Section 6.10, to have transferred to him or her the life
insurance policies held by the Trust under the Plan to provide benefits to such
Participant under this Article VI, after removing from such life insurance
policies the portion of such Participant's Accounts which is not vested and any
insurance company charges and fees related thereto. Such election must be made
at least 90 days before the beginning of the Participant's taxable year in which
such transfer is to be made. In the event of such a transfer, such Participant
shall be entitled to no further benefits under this Article VI.
Article VII - Payment of Benefits
7.1 Plan Unfunded:
(a) General: It is the intention of the Company and the
Participants that the Plan be unfunded for tax purposes and for purposes of
Title I of ERISA. Benefits under this Plan shall be paid out of the general
assets of the Company. However, the Company shall establish a grantor trust (the
"Trust") within the meaning of section 671 of the Code under the HUNT
MANUFACTURING CO. SUPPLEMENTAL EXECUTIVE BENEFITS PLAN TRUST AGREEMENT (the
"Trust Agreement"), to which the Company may make contributions in order to
provide for the payment of benefits under the Plan. Such contributions may
consist of cash, annuity contracts, insurance policies or other property
acceptable to the Trustee. The Trustee shall be responsible for the investment
of all Trust assets; however, the Trustee may follow any investment directions
or guidelines given the Trustee
-24-
by the Company. Such directions or guidelines may reflect investment allocation
requests made by Participants. Notwithstanding the foregoing, Trust assets shall
be treated as assets of the Company and shall remain, in the event of the
Company's Insolvency, subject to the Company's Insolvency Creditors. Moreover,
no Participant, former Participant, Spouse, or Beneficiary shall have any
property interest whatsoever in any specific assets of the Trust or of the
Company. A Participant, former Participant, Spouse, or Beneficiary shall have
only the rights of a general, unsecured creditor against the Company for any
distributions due under this Plan, and the Plan shall constitute a mere promise
by the Company to make benefit payments in the future. To the extent that the
assets of the Trust are insufficient to pay any benefits which are due under the
Plan, such benefits may, at the direction of the Compensation Committee of the
Board, be paid out of other general assets of the Company.
(b) Purchase of Insurance Contracts: The Company shall purchase a
separate insurance contract on the life of each Participant in the Plan. The
Company shall retain all ownership rights in such contracts but such contracts
shall be held by the Trustee for the sole benefit of the Company. No Participant
shall have any rights in such contracts.
(c) Change in Control:
(1) Article IV Benefit: In the event of a "Change in Control"
(as defined in Section 7.1(d)(1)), the Compensation Committee of the
Board (as it is constituted on the day preceding the date of the
Change in Control) may cause the Accrued Benefit payable under Article
IV to an Executive Officer Participant, as determined on the date of
the Change in Control, to be paid from the Trust to such Executive
Officer Participant. Moreover, in the event of a Change in Control, if
the Compensation Committee of the Board (as it is constituted on the
day preceding the date of the Change in Control) does not exercise its
discretion to cause said payment to the Executive Officer Participant,
the Trustee, at the request of 51% of the Participants or in the
Trustee's discretion, may cause the Accrued Benefit payable under
Article IV to an Executive Officer Participant, as determined on the
date of the Change in Control, to be paid from the Trust to such
Executive Officer Participant. To the extent there are sufficient
assets in the Trust, any distribution under this Section 7.1(c)(1)
shall be increased by the amount necessary to pay all Federal, state,
and local income taxes and any excise taxes imposed by section 4999 of
the Code and other taxes resulting from the distribution (including
any additional taxes resulting from the increase under this sentence).
All payments made pursuant to this Section 7.1(c)(1) shall be made in
one lump sum and shall equal the Present Value of the Accrued Benefit
payable to the Executive Officer Participant under Article IV as
determined on the date of the Change in Control, plus any additional
amount described in the preceding sentence. The intent of this Section
7.1(c)(1) is that, in the event distribution is made under this
Section 7.1(c)(1), the recipient Executive Officer Participant shall
be paid, to the extent there are sufficient assets in the Trust, by
the Trust, an additional amount (the "Gross Up") such that the net
amount retained by the recipient Executive Officer Participant after
deduction of Federal, state and local income taxes and any excise
taxes imposed by section 4999 of the Code and any other taxes
resulting from the distribution shall be equal to the Present Value of
the Accrued Benefit payable to the Executive Officer Participant under
Article IV as determined on the date of the Change in Control. For
purposes of determining the amount of the Gross Up, the Executive
Officer Participant shall be deemed to pay Federal, state and local
income taxes at the highest marginal rate of taxation in the calendar
year in which the distribution is to be made. The determination of
whether an excise tax under section 4999 of the Code is payable and
the amount thereof shall be based upon the opinion of tax counsel
selected by the Trustee and acceptable to the Executive Officer
Participant. If such opinion is not finally accepted by the Internal
Revenue Service upon audit, then appropriate adjustments shall be
computed (without interest but with Gross Up, if applicable) by such
tax
-25-
counsel based upon the final amount of the excise tax so determined.
The amount shall be paid by the appropriate party in one lump-sum cash
payment within 30 days of such computation.
(2) Article V Benefit: In the event of a "Change in Control"
(as defined in Section 7.1(d)(1)), the Compensation Committee of the
Board (as it is constituted on the day preceding the date of the
Change in Control) may cause all or a portion of the assets allocated
to the Trust Account of a Corporate Officer Participant, as of the
date of the Change in Control, to be used to purchase a paid-up
insurance contract providing a death benefit equal to the benefit
determined under Article V with respect to such Corporate Officer
Participant as of the date of the Change in Control, or such lesser
amount as the Actuary determines may be purchased with the Trust
assets allocated to the Corporate Officer Participant's Trust Account.
Moreover, in the event of a Change in Control, if the Compensation
Committee of the Board (as it is constituted on the day preceding the
date of the Change in Control) does not exercise its discretion to
cause the purchase of such paid-up insurance contract, the Trustee, at
the request of 51% of the Participants or in the Trustee's discretion,
may cause all or a portion of the assets allocated to the Trust
Account of a Corporate Officer Participant, as of the date of the
Change in Control, to be used to purchase a paid-up insurance contract
providing a death benefit equal to the benefit determined under
Article V with respect to such Corporate Officer Participant, as of
the date of the Change in Control, or such lesser amount as the
Actuary determines may be purchased with the Trust assets allocated to
the Corporate Officer Participant's Trust Account. In addition, to the
extent there are sufficient assets in the Trust, an amount shall be
paid to each Corporate Officer Participant receiving a distribution
under this Section 7.1(c)(2) as necessary to pay all Federal, state,
and local income taxes and any excise taxes imposed by section 4999 of
the Code and other taxes resulting from the distribution (including
any additional taxes resulting from the increase under this sentence).
Any paid-up contract described in this Section 7.1(c)(2), plus any
additional amount described in the preceding sentence, shall be
distributed to the Corporate Officer Participant as soon as
practicable. The intent of this Section 7.1(c)(2) is that in the event
distribution is made under this Section 7.1(c)(2) the recipient
Corporate Officer Participant shall be paid, to the extent there are
sufficient assets in the Trust, by the Trust, an additional amount
(the "Gross Up") such that the net amount deemed to be received by the
recipient Corporate Officer Participant (i.e., the fair market value
of the paid-up insurance contract) after deduction of Federal, state
and local income taxes and any excise taxes imposed by section 4999 of
the Code and any other taxes resulting from the distribution shall be
equal to the fair market value of the paid-up insurance contract
purchased for the Corporate Officer Participant pursuant to this
Section 7.1(c)(2). For purposes of determining the amount of the Gross
Up, the Corporate Officer Participant shall be deemed to pay Federal,
state and local income taxes at the highest marginal rate of taxation
in the calendar year in which the distribution is to be made. The
determination of whether an excise tax under section 4999 of the Code
is payable and the amount thereof shall be based upon the opinion of
tax counsel selected by the Trustee and acceptable to the Corporate
Officer Participant. If such opinion is not finally accepted by the
Internal Revenue Service upon audit, then appropriate adjustments
shall be computed (without interest but with Gross Up, if applicable)
by such tax counsel based upon the final amount of the excise tax so
determined. The amount shall be paid by the appropriate party in one
lump-sum cash payment within 30 days of such computation.
(3) Article VI Benefits: In the event of a "Change in Control"
(as defined in Section 7.1(d)(1)), the Compensation Committee of the
Board (as it is constituted on the day preceding the date of the
Change in Control) may cause the balance in an Executive Officer
Participant's Accounts under Article VI, as determined on the date of
the Change in Control, to be paid from the Trust to such Executive
Officer Participant. Moreover, in the event of a
-26-
Change in Control, if the Compensation Committee of the Board (as it is
constituted on the day preceding the date of the Change in Control)
does not exercise its discretion to cause said payment to the Executive
Officer Participant, the Trustee, at the request of 51% of the
Participants or in the Trustee's discretion, may cause the balance in
an Executive Officer Participant's Accounts under Article VI, as
determined on the date of the Change in Control, to be paid from the
Trust to such Executive Officer Participant. To the extent there are
sufficient assets in the Trust, any distribution under this Section
7.1(c)(1) shall be increased by the amount necessary to pay all
Federal, state, and local income taxes and any excise taxes imposed by
section 4999 of the Code and other taxes resulting from the
distribution (including any additional taxes resulting from the
increase under this sentence). All payments made pursuant to this
Section 7.1(c)(1) shall be made in one lump sum. The intent of this
Section 7.1(c)(1) is that, in the event distribution is made under this
Section 7.1(c)(1), the recipient Executive Officer Participant shall be
paid, to the extent there are sufficient assets in the Trust, by the
Trust, an additional amount (the "Gross Up") such that the net amount
retained by the recipient Executive Officer Participant after deduction
of Federal, state and local income taxes and any excise taxes imposed
by section 4999 of the Code and any other taxes resulting from the
distribution shall be equal to the balance in the Executive Officer
Participant's Accounts under Article VI, as determined on the date of
the Change in Control. For purposes of determining the amount of the
Gross Up, the Executive Officer Participant shall be deemed to pay
Federal, state and local income taxes at the highest marginal rate of
taxation in the calendar year in which the distribution is to be made.
The determination of whether an excise tax under section 4999 of the
Code is payable and the amount thereof shall be based upon the opinion
of tax counsel selected by the Trustee and acceptable to the Executive
Officer Participant. If such opinion is not finally accepted by the
Internal Revenue Service upon audit, then appropriate adjustments shall
be computed (without interest but with Gross Up, if applicable) by such
tax counsel based upon the final amount of the excise tax so
determined. The amount shall be paid by the appropriate party in one
lump-sum cash payment within 30 days of such computation.
(d) Definition:
(1) Change in Control: As used in Sections 7.1(c)(1), (2), and
(3), a "Change in Control" of the Company shall be deemed to have
occurred if:
(A) Any person (a "Person"), as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (other than (i) the Company and/or its
wholly-owned subsidiaries, (ii) any ESOP or other employee benefit
plan of the Company, and any trustee or other fiduciary in such
capacity holding securities under such plan, (iii) any corporation
owned, directly or indirectly, by the shareholders of the Company
in substantially the same proportions as their ownership of stock
of the Company or (iv) the Participant or any group of Persons of
which he or she voluntarily is a part), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the
Company's then outstanding securities, or such lesser percentage of
voting power, but not less than 15%, as the Board shall determine;
provided, however, that a Change in Control shall not be deemed to
have occurred under the provisions of this Section 7.1(d)(1)(A) by
reason of the beneficial ownership of voting securities by members
of the Bartol Family (as defined below) unless and until the
beneficial ownership of all members of the Bartol Family (including
any other individuals or entities who or which, together with any
member or members of the Bartol Family, are deemed under Sections
-27-
13(d) or 14(d) of the Exchange Act to constitute a single Person)
exceeds 50% of the combined voting power of the Company's then
outstanding securities.
(B) During any two-year period beginning after September
12, 1990, Directors of the Company in office at the beginning of
such period plus any new Director (other than a Director designated
by a Person who has entered into an agreement with the Company to
effect a transaction within the purview of Section 7.1(d)(1)(A) or
(C)) whose election by the Board, or whose nomination for election
by the Company's shareholders, was approved by a vote of at least
two-thirds of the Directors then still in office who either were
Directors at the beginning of the period or whose election or
nomination for election was previously so approved, shall cease for
any reason to constitute at least a majority of the Board; or
(C) The Company's shareholders or the Board shall approve
(i) any consolidation or merger of the Company in which the Company
is not the continuing or surviving corporation or pursuant to which
the Company's voting common shares (the "Common Shares") would be
converted into cash, securities and/or other property, other than a
merger of the Company in which holders of Common Shares immediately
prior to the merger have the same proportionate ownership of common
shares of the surviving corporation immediately after the merger as
they had in the Common Shares immediately before, (ii) any sale,
lease, exchange or other transfer (in one transaction or a series
of related transactions) of all or substantially all the assets or
earning power of the Company, or (iii) the liquidation or
dissolution of the Company.
As used in this Section 7.1(d)(1), "members of the Bartol Family" shall
mean the wife, children and descendants of such children of the late George E.
Bartol III, their respective spouses and estates, any trusts primarily for the
benefit of any of the foregoing and the administrators, executors and trustees
of any such estates or trusts.
Whether a Change in Control has occurred shall be determined by the
Compensation Committee of the Board (as it is constituted on the day preceding
the date of the Change in Control) subject to the provisions of Section 3.7(d)
of the Trust Agreement.
7.2 Review of Funding Status: At least annually, the Compensation
Committee of the Board shall make a determination as to whether the Trust
described in Section 7.1 provides adequate security to Participants. The
Chairman of the Company may also call upon the Compensation Committee of the
Board to make such a determination at any time.
(a) Determination of Inadequate Security: If the Compensation
Committee of the Board determines that the Trust does not provide adequate
security, the Compensation Committee of the Board shall cause:
(1) A single sum payment equal to the Present Value of the
Accrued Benefit payable under Article IV to an Executive Officer
Participant, as determined on the date of the Compensation Committee
of the Board's determination, to be paid from the Trust to such
Executive Officer Participant;
(2) All or a portion of the assets allocated to the Trust
Account of a Corporate Officer Participant, as of the date of the
Compensation Committee of the Board's determination, to be used to
purchase a paid-up insurance contract providing a death benefit equal
to the death benefit determined under Article V with respect to the
Corporate Officer Participant; and
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(3) The balance in the Executive Officer Participant's Accounts
under Article VI, as determined on the date of the Compensation
Committee of the Board's determination, to be paid from the Trust to
such Executive Officer Participant.
If the assets in the Trust are not adequate to pay the amounts payable
under this Section 7.2, the Company shall be liable for and shall pay the
deficiency to the Participant.
(b) Gross Up: To the extent there are sufficient assets in the
Trust, any distribution under Section 7.2(a) shall be increased by the amount
necessary to pay all Federal, state, and local income taxes and any other taxes
resulting from the distribution (including any additional taxes resulting from
the increase under this sentence). All payments made pursuant to this Section
7.2(b) shall be made in one lump sum. The intent of this Section 7.2(b) is that,
in the event distribution is made under Section 7.2(a), the recipient
Participant shall be paid, to the extent there are sufficient assets in the
Trust, by the Trust, an additional amount (the "Gross Up") such that the net
amount retained by the recipient Participant after deduction of Federal, state
and local income taxes and any other taxes resulting from the distribution (all
as determined on the date of distribution) shall be equal to the sum of the
following:
(1) The amount payable under Section 7.2(a)(1);
(2) The amount payable under Section 7.2(a)(2); and
(3) The amount payable under Section 7.2(a)(3).
For purposes of determining the amount of the Gross Up, the recipient
Participant shall be deemed to pay Federal, state and local income taxes at the
highest marginal rate of taxation in the calendar year in which the distribution
is to be made.
7.3 Acceleration of Payments: Notwithstanding any other provision of
the Plan or Trust Agreement, if the Trustee determines, based on a change in the
tax or revenue laws of the United States of America, a published ruling or
similar announcement issued by the Internal Revenue Service, a regulation issued
by the Secretary of the Treasury or his delegate, a decision by a court of
competent jurisdiction involving a Participant, or a closing agreement involving
a Participant made under section 7121 of the Code that is approved by the
Commissioner, that such Participant or Beneficiary has recognized or will
recognize income for Federal income tax purposes with respect to retirement
benefits that are or will be payable to the Participant under Article IV, the
death benefits that are or will be payable to the Participant or Beneficiary
under Article V, or the salary deferral benefits that are or will be payable to
the Participant or Beneficiary under Article VI before they otherwise would be
paid to the Participant or the Beneficiary (as applicable), upon the request of
the Participant or Beneficiary, the Trustee shall immediately make distribution
from the Trust to the Participant or Beneficiary of the amount so taxable.
Moreover, in the event of a Change in Control, payment of retirement benefits
provided under Article IV (and any additional amounts provided under Section
7.1(c)(1)) shall be made in accordance with Section 7.1(c)(1), payment of death
benefits provided under Article V (and any additional amounts provided under
Section 7.1(c)(2)) shall be made in accordance with Article V and Section
7.1(c)(2), and payment of salary deferral benefits provided under Article VI
(and any additional amounts provided under Section 7.1(c)(3)) shall be made in
accordance with Section 7.1(c)(3). Moreover, in the event of a determination of
inadequate security under Section 7.2(a), payment shall be made in accordance
with Section 7.2(a) (and any additional amounts provided under Section 7.2(b)
shall be made in accordance with Section 7.2(b)).
7.4 Creation of Separate Subfund in Trust upon Termination of
Employment: Upon the termination of a Participant's employment with the
Participating Companies (except for Cause), a
-29-
separate subfund in the Trust under the Plan shall be established to hold all
insurance contracts which will provide benefits for the Participant under the
Plan.
Article VIII - Administration
8.1 Appointment of Committee: To supervise and administer the Plan, the
Board shall appoint a Committee consisting of not less than three persons who
shall serve without compensation and at the pleasure of the Board. Any member of
the Committee may be removed at any time by the Board, which shall fill all
vacancies in the Committee, however occurring (if there are less than three
persons remaining on the Committee; if there are more than three persons
remaining on the Committee the Board may, but is not required to, fill such
vacancy or vacancies). Until a new appointment is made, the Committee shall have
full authority to act. The Company shall notify the Trustee of the appointment
of the Committee and of any subsequent changes in its membership.
8.2 Organization: The Committee shall enact such rules and regulations
consistent with the Plan as it may consider desirable for the conduct of its
business and for the administration of the Plan. Its members shall elect a
chairman, who shall be a member of the Committee, and a secretary who may, but
need not, be a member of the Committee.
8.3 Committee Action: A majority of the members of the Committee shall
constitute a quorum for the transaction of business. All resolutions or other
actions taken by the Committee at any meeting shall be by vote of the majority
of the Committee members present at such meeting. Resolutions may be adopted or
other action taken without a meeting upon written consent signed by all of the
members of the Committee. No member of the Committee shall act on any matter
which involves his or her personal interest or benefit under the Plan as
distinguished from the general interest of all Participants. The Committee shall
maintain full and complete records of its deliberations and decisions, and the
minutes of its proceedings shall be conclusive proof of the facts stated
therein.
8.4 Claims Procedure:
(a) Filing Claim for Benefits: If an individual (hereinafter
referred to as the "Applicant," which reference shall include the legal
representative, if any, of the individual) does not receive the timely payment
of the benefits to which the Applicant believes he or she is entitled under the
terms of the Plan, the Applicant may make a claim for benefits in the manner
hereinafter provided.
All claims for benefits under the Plan shall be made in writing and
shall be signed by the Applicant. Claims shall be submitted to a representative
designated by the Committee and hereinafter referred to as the "Claims
Coordinator." The Claims Coordinator may, but need not, be a member of the
Committee. If the Applicant does not furnish sufficient information with the
claim for the Claims Coordinator to determine the validity of the claim, the
Claims Coordinator shall furnish the Applicant with forms prescribed by the
Committee within ten days of receipt of the initial claim, indicating any
additional information which is necessary for the Claims Coordinator to
determine the validity of the claim.
Each claim hereunder shall be acted on and approved or disapproved by
the Claims Coordinator within 60 days following the receipt by the Claims
Coordinator of the information necessary to process the claim.
In the event the Claims Coordinator denies a claim for benefits, in
whole or in part, the Claims Coordinator shall notify the Applicant in writing
of the denial of the claim and notify such
-30-
Applicant of his or her right to a review of the Claims Coordinator's decision
by the Committee. Such notice by the Claims Coordinator shall also set forth, in
a manner calculated to be understood by the Applicant, the specific reason for
such denial, the specific Plan provisions on which the denial is based, a
description of any additional material or information necessary to perfect the
claim, with an explanation of why such material or information is necessary, and
an explanation of the Plan's claim review procedure as set forth in this Section
8.4.
If no action is taken by the Claims Coordinator on an Applicant's claim
within 60 days after receipt by the Claims Coordinator, such application shall
be deemed to be denied for purposes of the following appeals procedure.
(b) Appeals Procedure: Any Applicant whose claim for benefits is
denied in whole or in part (such Applicant being hereinafter referred to as the
"Claimant") may appeal from such denial to the Committee for a review of the
decision by the entire Committee. Such appeal must be made within six months
after the Claimant has received written notice of the denial as provided above.
An appeal must be submitted in writing within such period and must:
(1) Request a review by the entire Committee of the claim for
benefits under the Plan;
(2) Set forth all of the grounds upon which the Claimant's
request for review is based and any facts in support thereof; and
(3) Set forth any issues or comments which the Claimant deems
pertinent to the appeal.
The Committee shall regularly review appeals by Claimants. The
Committee shall act upon each appeal within 60 days after receipt thereof unless
special circumstances require an extension of the time for processing the
Claimant's request for review. If such an extension of time for processing is
required, written notice of the extension shall be forwarded to the Claimant
prior to the commencement of the extension. In no event shall such extension
exceed a period of 120 days after the request for review is received by the
Committee.
The Committee shall make a full and fair review of each appeal and any
written materials submitted by the Claimant or a Participating Company in
connection therewith. The Committee may require the Claimant or a Participating
Company to submit such additional facts, documents, or other evidence as the
Committee in its discretion deems necessary or advisable in making its review.
The Claimant shall be given the opportunity to review pertinent documents or
materials upon submission of a written request to the Committee, provided the
Committee finds the requested documents or materials are pertinent to the
appeal.
On the basis of its review, the Committee shall make an independent
determination of the Claimant's eligibility for benefits under the Plan. The
decision of the Committee on any claim for benefits shall be final and
conclusive upon all parties thereto.
In the event the Committee denies an appeal, in whole or in part, the
Committee shall give written notice of the decision to the Claimant, which
notice shall set forth in a manner calculated to be understood by the Claimant
the specific reasons for such denial and which shall make specific reference to
the pertinent Plan provisions on which the Committee decision was based.
It is intended that the claims procedure of this Plan be administered
in accordance with the claims procedure regulations of the Department of Labor
set forth in 29 CFR Section 2560.503-1.
-31-
8.5 Committee Powers and Responsibilities: Except as otherwise provided
in the Plan and Trust Agreement, the Committee shall have sole responsibility
for administration of the Plan and shall supervise and control the operation of
the Plan in accordance with its terms. Except as otherwise provided in the Plan
and Trust Agreement, the Committee shall have the responsibility, the power, the
authority, and discretion to do all things necessary to accomplish that purpose,
including, but not limited to, the responsibility, power, authority, and
discretion to do the following:
(a) To construe and interpret the Plan, decide all questions of
eligibility, and determine the amount, manner, and time of payment of any
benefits hereunder;
(b) To prescribe procedures to be followed by Participants or
Beneficiaries filing applications for benefits;
(c) To prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan;
(d) To require a Participant to complete and file with the
Committee an application for a benefit and all other forms approved by the
Committee, and to furnish all pertinent information requested by the Committee
(the Committee may rely upon all such information so furnished, including the
Participant's current mailing address);
(e) To furnish the Participating Companies, upon request, such
annual reports with respect to the administration of the Plan as are reasonable
and appropriate;
(f) To appoint or employ, at the expense of the Participating
Companies, persons to carry out administrative duties under the Plan and any
other agents it deems advisable, including, but not limited to, actuaries,
accountants, and legal counsel, and to rely in good faith upon the opinion of
any professional or specialist so employed;
(g) To adopt such rules and make such determinations as are
appropriate to the administration of the Plan, provided that all rules of the
Committee shall be uniformly and consistently applied to all Participants in
similar circumstances, and that, when making a determination or calculation, the
Committee shall be entitled to rely upon information furnished by a Participant
or Beneficiary, a Participating Company, the legal counsel of a Participating
Company, the Trustee, or other appropriate persons;
(h) To bring suit in a court of competent jurisdiction, or to take
any other action necessary either to ascertain the proper actions to be taken in
the event that a reasonable interpretation of applicable law precludes the
Committee from satisfying its requirements under the Plan and Trust or to
enforce the rights of the Participants under the Plan and Trust;
(i) To delegate certain of its responsibilities relating to the
administration of the Plan to responsible persons;
(j) To supervise the investment of assets held in the grantor
trust; and
(k) To do such other acts as may be necessary or desirable in order
to administer the Plan.
8.6 Information from Participating Companies to Committee: To enable
the Committee to perform its functions, the Participating Companies shall supply
full and timely information to the Committee on all matters relating to the pay
and service of Participants, their retirement, Disability,
-32-
death, or other cause for separation from service, and such other pertinent
facts as the Committee may require; and the Committee shall advise the Trustee
of such of the foregoing facts as may be pertinent to the Trustee's duties.
8.7 Records: The Committee shall maintain records containing all
relevant data pertaining to Participants and Beneficiaries and their rights
under the Plan. Records pertaining solely to a particular Participant or
Beneficiary shall be made available to him or her for examination during
business hours.
8.8 Determination of Right to Benefits: Except as otherwise provided in
the Plan and Trust Agreement, the Committee shall make all determinations as to
the right of any person to a benefit under the Plan. The procedures relating to
the submission of claims for benefits, their review, and the appeal of denied
claims are set forth in Section 8.4.
8.9 Expert Services: The Committee may, in accordance with Section
8.5(f), contract for actuarial, legal, accounting, clerical, trustee, custodial,
investment and other services necessary to carry out its responsibilities under
the Plan.
Article IX - Amendment and Termination of Plan; Successor Employer
9.1 Right of Company to Amend Plan:
(a) General: Subject to the limitations set forth in this Section
9.1, the Company reserves the right to amend the Plan with respect to all
Participating Companies by action of the Board at any time and from time to
time, to the extent it may deem advisable or appropriate.
(b) Limitations: No amendment shall cause or permit the duties or
liabilities of the Committee or Trustee to be increased without the written
consent of the party affected. In addition, no amendment to the Plan (including
a change in the actuarial basis for determining optional or early retirement
benefits) shall be effective to the extent that it has the effect of decreasing
a Participant's Accrued Benefit under Article IV , death benefit under Article
V, or vested salary deferral benefits under Article VI (all as determined as of
the date on which the amendment becomes effective). No amendment shall be
permitted on or after the day preceding the date of a Change in Control (within
the meaning of Section 7.1(d)(1)) without the consent of at least 51% of the
Participants participating in the Plan on the day before the date of such Change
in Control.
9.2 Amendment Procedure: Any amendment shall be made only pursuant to
written resolution adopted by the Board at a duly held meeting of said Board or
by unanimous written consent of the Board. A certified copy of the resolutions
adopting any amendment and a copy of the adopted amendment as executed by the
Company shall be delivered to the Committee and to the Trustee.
Upon the taking of such action by the Board, the Plan shall be deemed
amended as of the date specified as the effective date by such Board action or
in the instrument of amendment. The effective date of any amendment may be
before, on, or after the date of such Board action.
9.3 Termination of Plan: The Company reserves, with respect to all
Participating Companies, the right to terminate the Plan at any time by written
resolution adopted by the Board at a duly held meeting of said Board or by
unanimous written consent of the Board. Moreover, each other Participating
Company reserves the right, by written resolution adopted by the Board at a duly
held meeting of said Board or by unanimous written consent of the Board, to
terminate the Plan as to such Participating Company as provided herein. Upon
termination of the Plan, each Executive Officer
-33-
Participant shall continue to have the right to receive his or her vested
Accrued Benefit under Article IV , each Corporate Officer Participant shall
continue to have the right to have his or her Beneficiary receive a death
benefit under Article V, and each Executive Officer Participant shall continue
to have the right to receive vested salary deferral benefits under Article VI
(all as determined as of the date on which the Plan is terminated) in accordance
with the terms of the Plan as in effect immediately prior to its termination.
Moreover, upon the termination of the Plan, life insurance in an amount equal to
three times his or her Base Salary shall be restored to each Corporate Officer
Participant under the group term life insurance plan of his or her Participating
Company, at the expense of the Participating Company.
9.4 Successor Employer: In the event of the dissolution, merger,
consolidation, or reorganization of a Participating Company, provision may be
made by which the Plan and Trust will be continued by the successor to such
Participating Company; and, in that event, such successor shall be substituted
for the Participating Company under the Plan. The substitution of the successor
shall constitute an assumption of Plan liabilities by the successor and the
successor shall have all of the powers, duties, and responsibilities of the
Participating Company under the Plan. Neither the Company nor any Participating
Company nor Affiliate shall have any further liability with respect to the
making of contributions on behalf of the employees of any such Participating
Company which continues the Plan and Trust for its employees.
Article X - Miscellaneous
10.1 No Right to Employment: Participation in the Plan shall not be
deemed to be consideration for, an inducement to, or a condition of the
employment of any Employee. The establishment of the Plan shall not confer upon
any Employee or Participant the right to be continued in the employ of a
Participating Company, and the Participating Company expressly reserves the
right to terminate the employment of any Employee, whether or not a Participant,
whenever the interest of the Participating Company, in its sole judgment, may so
require.
10.2 Right to Withhold: The Company shall have the right to withhold
from all distributions from the Plan any Federal, state, or local taxes required
by law to be withheld with respect to such distributions.
10.3 Nonalienation of Benefits: Except as otherwise required by
applicable law, the right of any Participant or Beneficiary to any benefit or
interest under any of the provisions of this Plan shall not be subject to
encumbrance, attachment, execution, garnishment, assignment, pledge, alienation,
sale, transfer, or anticipation, either by the voluntary or involuntary act of
any Participant or his or her Beneficiary or by operation of law, nor shall such
payment, right, or interest be subject to any other legal or equitable process.
10.4 Expenses of Plan: All expenses of the Plan shall be paid by the
Participating Companies.
10.5 Incapacitated Beneficiaries: If any person entitled to receive
benefits hereunder shall at any time be mentally or physically incapacitated, or
for any other reason shall be incapable of properly or legally receipting for,
receiving, and dispensing the benefits to which he or she is entitled hereunder,
the payments to which such person shall be entitled under this Plan during such
period of incapacity may, at the direction of the Committee, be used, expended,
or applied by the Participating Companies for the maintenance, education, or
support of such person or his or her dependents without the intervention of a
guardian or committee.
-34-
10.6 Gender and Number: Whenever any words are used herein in any
specific gender, they shall be construed as though they were also used in any
other applicable gender. The singular form, whenever used herein, shall mean or
include the plural form, and vice versa, as the context may require.
10.7 Law Governing Construction: The construction and administration of
the Plan, the Trust Agreement, and the Trust maintained thereunder, and all
questions pertaining thereto, shall be governed by ERISA and other applicable
Federal law and, to the extent not governed by Federal law, by Pennsylvania law.
10.8 Change in Control Agreements: To the extent possible, this Plan
shall be construed in a manner compatible with any applicable change in control
agreement between a Participating Company and a Participant and in accordance
with Section 7.1(c).
10.9 Headings Not a Part Hereof: Any headings preceding the text of the
several Articles, Sections, subsections, or paragraphs hereof are inserted
solely for convenience of reference and shall not constitute a part of the Plan,
nor shall they affect its meaning, construction, or effect.
10.10 Severability of Provisions: If any provision of this Plan is
determined to be void by any court of competent jurisdiction, the Plan shall
continue to operate and, for the purposes of the jurisdiction of that court
only, shall be deemed not to include the provision determined to be void.
10.11 Reporting and Disclosure Requirements: In order to comply with
the requirements of Title I of ERISA, the Committee shall:
(a) File a statement with the Secretary of Labor that includes
the name and address of the employer, the employer identification number
assigned by the Internal Revenue Service, a declaration that the employer
maintains the Plan primarily for the purpose of providing deferred compensation
for a select group of management or highly compensated employees and a statement
of the number of such plans and the number of employees in each; and
(b) Provide plan documents, if any, to the Secretary of Labor
upon request as required by section 104(a)(1) of ERISA. It is intended that this
provision comply with the requirements of DOL Reg. Section 2520.104-23.
This method of compliance is available to the Plan only so long as the
Plan is maintained by an employer primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees and for which benefits are paid as needed solely from the general
assets of the employer or are provided exclusively through insurance contracts
or policies, the premiums for which are paid directly by the employer from its
general assets, issued by an insurance company or similar organization which is
qualified to do business in any State, or both.
10.12 Special Provisions Relating to Ronald J. Naples: Notwithstanding
any other provision of the Plan, the provisions of Plan Exhibit B shall apply to
the benefits provided hereunder for Ronald J. Naples, formerly Chief Executive
Officer of the Company.
10.13 Special Provisions Relating to Donald L. Thompson:
Notwithstanding any other provision of the Plan, the provisions of Plan Exhibit
C shall apply to the benefits provided hereunder for Donald L. Thompson,
Chairman and Chief Executive Officer of the Company, effective June 1, 1996.
-35-
Article XI - Adoption of Plan by Affiliates
11.1 Adoption of Plan: The Plan may be adopted by any Affiliate
provided:
(a) The Company consents to such adoption;
(b) The Board of Directors or other governing entity of the
Affiliate adopts the Plan by appropriate action; and
(c) The adopting Affiliate executes such documents as may be
required to make such Affiliate a party to the Plan as a Participating Company.
An Affiliate which adopts the Plan shall thereafter be a Participating
Company with respect to its Employees for purposes of the Plan.
11.2 Company Appointed Agent of Participating Company: Each
Participating Company appoints the Company as its agent to exercise on its
behalf all of the powers and authority conferred upon the Company by this Plan,
including, without limitation, the power to amend the Plan or to terminate the
Plan.
11.3 Withdrawal from Plan: Any Participating Company may, at any time,
withdraw from the Plan upon giving the Company and the Committee at least 30
days' notice in writing of its intention to withdraw.
IN WITNESS WHEREOF, HUNT MANUFACTURING CO. has caused these presents to
be duly executed, under seal this ___________ day of ____________________, 1996.
[CORPORATE SEAL] HUNT MANUFACTURING CO.
Attest:
_______________________ By:__________________________________
Dennis S. Pizzica, John W. Carney, Vice President,
Assistant Secretary Human Resources
CORESTATES BANK, N.A. hereby agrees to assume all duties and
responsibilities imposed on it under this amended and restated Plan and
therefore has caused these presents to be duly executed, under seal this _______
day of __________________, 1996.
TRUSTEE:
[CORPORATE SEAL] CORESTATES BANK, N.A.
Attest:
_______________________ By:__________________________________
Trust Officer Vice President
-36-
PLAN EXHIBIT A - EARLY RETIREMENT FACTORS
TABLE I
Participants Who Terminate Employment on or
After Early Retirement Date
Age at Benefit Early Commencement
Commencement Reduction Factor
- -------------- ---------------------
62 and over 1.0000
61 0.9333
60 0.8667
59 0.8000
58 0.7333
57 0.6667
56 0.6333
55 0.6000
54 0.5666
53 0.5333
52 0.5000
TABLE II
Participants Who Terminate Employment Prior to
Early Retirement Date
Age at Benefit Early Commencement
Commencement Reduction Factor
- -------------- ---------------------
65 and over 1.0000
64 0.9333
63 0.8667
62 0.8000
61 0.7333
60 0.6667
59 0.6333
58 0.6000
57 0.5667
56 0.5333
55 0.5000
IN NO EVENT SHALL BENEFITS BE ACTUARIALLY INCREASED FOR COMMENCEMENT OF BENEFITS
SUBSEQUENT TO AGE 62 (FOR TABLE I) OR SUBSEQUENT TO AGE 65 (FOR TABLE II).
A-1
PLAN EXHIBIT B - SPECIAL PROVISIONS FOR RONALD J. NAPLES
I. Continued Participation in Plan by Naples. In accordance with the terms of
the Transition Agreement (the "Agreement") entered into on June 13, 1995,
between the Company and Ronald J. Naples, formerly Chief Executive Officer of
the Company ("Naples"), Naples shall continue to participate in the Plan, which
provides supplemental retirement benefits under Article IV of the Plan, life
insurance benefits under Article V of the Plan, and salary deferral benefits
(including matching employer contributions) under Article VI of the Plan,
subject to, and in accordance with, the terms of the Plan and this Plan Exhibit
B.
II. Calculation and Payment of Benefit under Article IV of Plan.
(A) Calculation of Benefit. For purposes of calculating Naples's benefit
under Article IV of the Plan, Naples shall be credited with Years of Benefit
Service from July 20, 1995, through July 19, 1998, and with Applicable
Compensation during such time at the rate of $565,000 per year (without regard
to any mitigation pursuant to Section 4(b) of the Agreement during the period
from July 20, 1997, through July 19, 1998). Notwithstanding the preceding
sentence, Naples's Applicable Compensation for computing benefits under Article
IV of the Plan for calendar year 1995 shall include, in addition to the
$565,000, any pro rata bonuses for 1995.
(B) Payment of Benefit. Under the Plan, any Participant (including Naples)
who retires after age 52 with at least 20 Years of Vesting Service shall be able
to commence receiving payments under Article IV of the Plan at such time. Such
payments shall be actuarially reduced in accordance with the terms of the Plan.
III. Naples's Life Insurance Benefit and Determination of Base Salary under
Article V.
(A) Life Insurance Benefit. Life insurance benefits (three times Naples's
Base Salary as determined under III(B) of this Plan Exhibit B) for Naples under
Article V of the Plan shall continue until July 19, 1997, or, if later, until
the termination of his employment with the Company.
(B) Base Salary. Naples's Base Salary for purposes of Article V of the
Plan from July 20, 1995, through July 19, 1998, shall be at the rate of $565,000
per year (without regard to any mitigation pursuant to Section 4(b) of the
Agreement during the period from July 20, 1997, through July 19, 1998).
IV. Application to Naples of Article VI and Determination of Applicable
Compensation under Article VI.
(A) Application of Article VI to Naples. Naples may continue to make
Deferral Amounts and be credited with Matching Amounts thereon in accordance
with Section 6.2 of the Plan until his employment with the Company is
terminated. Moreover, Naples may continue to make Deferral Amounts but without
Matching Amounts with respect to consulting payments as provided under the terms
of the Agreement.
(B) Applicable Compensation. Naples's Applicable Compensation for purposes
of Article VI of the Plan from July 20, 1995, through July 19, 1998, shall be at
the rate of $565,000 per year (without regard to any mitigation pursuant to
Section 4(b) of the Agreement during the period from July 20, 1997, through July
19, 1998).
B-1
V. Election to Take Ownership of Certain Insurance Policies under Article VI
of Plan. Pursuant to the terms of Article VI of the Plan, Naples shall be
entitled to elect to take ownership of certain life insurance policies held by
the Trust under the Plan for benefits under Article VI of the Plan, in lieu of
receiving such benefits under the Plan. Such election shall be made in
accordance with the terms of Section 6.9 of the Plan.
VI. Use of Cash Value of Separate Insurance Contracts Purchased on Naples's
Life. Under the Plan, the cash value of any separate insurance contracts
purchased on Naples's life shall be used solely for the payment of benefits
under the Plan to Naples (to the extent such cash value does not exceed the
Company's obligation to Naples under the Plan). Upon Naples's termination of
employment, a separate subfund shall be established within the Trust pursuant to
Section 7.4 of the Plan for such contracts. The Company agrees to pay the
premiums on such contracts as they come due, until June 1, 1998, and expects to
continue to make contributions to the Trust thereafter in accordance with the
normal funding procedures of the Plan.
Notwithstanding the foregoing, the proceeds of any death benefit received
pursuant to such contracts may be used for any purpose under the Plan and Trust.
Naples shall have only the rights of a general, unsecured creditor against the
Company for any distributions due under the Plan and Trust, and shall not have
any property interest in such insurance contracts or any other assets of the
Plan and Trust.
VII. Section 4.10 (Divestment for Cause) not Applicable to Naples. Section
4.10 of the Plan (Divestment for Cause) shall not be applicable to Naples.
B-2
PLAN EXHIBIT C - SPECIAL PROVISIONS FOR DONALD L. THOMPSON
I. Participation in Plan. In accordance with the Employment Agreement (the
"Agreement") between the Company and Donald L. Thompson ("Executive") dated
April 8, 1996, Executive shall participate in the Plan which provides
supplemental retirement benefits under Article IV of the Plan, life insurance
benefits under Article V of the Plan, and salary deferral benefits (including
matching employer contributions) under Article VI of the Plan, subject to, and
in accordance with, the terms of the Plan and this Plan Exhibit C.
II. Phantom Stock Plan. In accordance with the Agreement, the Company
established a Phantom Stock Plan for Executive effective June 1, 1996. A copy of
the Phantom Stock Plan is attached hereto as Appendix A. Although the Phantom
Stock Plan is unfunded, in order to enable Company to provide for the payment of
benefits under the Phantom Stock Plan as they become due, Company shall
establish a separate Phantom Stock Account under the Trust to which it shall
make contributions at such times and in such amounts as the Board, in its sole
discretion, shall determine.
III. Death of Executive. In the event Executive's death occurs while employed
by Employer, notwithstanding any provision of the Plan to the contrary,
Executive shall be fully vested in all benefits to which he is entitled under
the terms of the Plan, and if Executive has not become fully vested in his
accrued benefit under the Company's Pension Plan on the date of his death, the
Company shall provide for such accrued benefit to be paid pursuant to the Plan.
IV. Disability of Executive. In the event of Executive's "Disability", as such
term is defined in Section 4.2 of the Agreement, notwithstanding any provision
of the Plan to the contrary, Executive shall be fully vested in all benefits to
which he is entitled under the terms of the Plan, and if Executive has not
become fully vested in his accrued benefit under the Company's Pension Plan on
the date of his "Disability", the Company shall provide for such accrued benefit
to be paid pursuant to the Plan.
V. Executive's Resignation or Termination without Cause.
(A) Resignation or Retirement. Upon Executive's resignation or retirement
pursuant to Section 4.4(a) of the Agreement, Executive shall be entitled only to
those benefits under the Plan which are provided by the express terms of the
Plan and by the express terms of the Phantom Stock Plan.
(B) Termination of Executive's Employment without Cause. Upon the
termination by the Board of Executive's employment under the Agreement without
Cause (as such term is defined in Section 4.3 of the Agreement) pursuant to
Section 4.4(b) of the Agreement or upon Executive's resignation from his
employment pursuant to a material reduction in the nature or scope of his
authority, power, functions or duties, all as described in Section 4.3(b) of the
Agreement, any shares of phantom stock which have not become vested by the
passage of time shall become fully vested upon the date of such termination of
employment and, to the extent not otherwise paid, shall be paid by the Plan in
accordance with the terms of the Agreement and the Phantom Stock Plan. Executive
shall also be entitled to receive all pension benefits accrued under the
Company's Pension Plan and the Plan to the date of termination and during the
two-year period thereafter during which Executive receives payments under
Section 4.4(b) of the Agreement. If Executive is not fully vested in the Pension
Plan on the date of his termination of employment, such accrued benefit shall be
paid pursuant to the Plan and, likewise, additional pension accruals under the
Company's Pension Plan subsequent to the termination of Executive's termination
of employment shall be paid from the Plan.
C-1
VI. Executive's Termination for Cause. In the event of Executive's termination
of employment for "Cause" (within the meaning of Section 4.3 of the Agreement),
Executive shall be entitled to no further accruals under the Plan, all as
provided in Section 4.3 of the Agreement.
VII. Change in Control. The Change in Control provisions of the Plan shall
apply to Executive except to the extent that any such provisions conflict with
the terms of the Agreement in which case the terms of the Agreement shall
control.
VIII. Agreement to Control. This Plan Exhibit C is in all respects to be
governed by the terms of the Agreement and in the event of any conflict between
the terms of the Agreement and the terms of this Plan Exhibit C, the terms of
the Agreement shall control.
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PLAN EXHIBIT C - APPENDIX A PHANTOM STOCK PLAN FOR DONALD L. THOMPSON
HUNT MANUFACTURING CO.
PHANTOM STOCK PLAN
FOR
DONALD L. THOMPSON
ARTICLE I - Purpose of Plan
1.1 Purpose. The purpose of the HUNT MANUFACTURING CO. PHANTOM STOCK PLAN
FOR DONALD L. THOMPSON (the "Plan") is to further the long-term growth in
earnings of Hunt Manufacturing Co. by offering long-term financial incentives to
the Chairman and Chief Executive Officer of the Company.
ARTICLE II - Definitions
Whenever the following terms are used in the Plan, they shall have the
meanings specified below unless the context clearly indicates to the contrary:
2.1 Beneficiary shall mean such person or persons or legal entity as may
be designated by the Participant to receive benefits hereunder after the
Participant's death, or in the absence of such designation, the personal or
legal representative of the Participant.
2.2 Benefit Account shall mean the account established pursuant to Section
6.2(A).
2.3 Board shall mean the Board of Directors of the Company.
2.4 Code shall mean the Internal Revenue Code of 1986, as amended.
2.5 Committee shall mean the Compensation Committee of the Board.
2.6 Common Stock shall mean shares of Hunt Manufacturing Co. common stock,
par value $.10 per share.
2.7 Company shall mean Hunt Manufacturing Co.
2.8 Dividend Account shall mean the account established by the Committee
for the Participant and to which the undistributed portion of the Participant's
Dividend Amounts and payments attributable thereto are credited or debited.
2.9 Dividend Amount shall mean the amount to which the Participant becomes
entitled at the time that shareholders of Common Stock are paid cash dividends
on such Stock, determined as provided in Article V.
2.10 Effective Date shall mean June 1, 1996, or, if earlier, the date on
which the Participant commences employment with the Company.
2.11 ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended.
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2.12 Interest shall mean the average monthly rate of interest paid on
ten-year bonds on a specified date, as evidenced by the Moody's Ten-Year Bond
Index, multiplied by 1.333.
2.13 Participant shall mean Donald L. Thompson.
2.14 Phantom Stock shall mean the number of shares credited to the
Participant's Stock Account as provided in Article V.
2.15 Plan shall mean the HUNT MANUFACTURING CO. PHANTOM STOCK PLAN FOR
DONALD L. THOMPSON.
2.16 Plan Year shall mean the fiscal year of the Plan ending each
December 31.
2.17 Separation Date shall mean the date on which a Participant terminates
employment with the Company (whether by retirement, death, resignation,
discharge, or otherwise).
2.18 Stock Account shall mean the account established by the Committee for
the Participant and to which the Participant's Phantom Stock and all assumed
appreciation, depreciation, and payments attributable thereto are credited or
debited.
2.19 Valuation Date shall mean June 1, 1996, and the last day of each
calendar month thereafter.
2.20 Vesting Percentage shall mean that percentage of the Participant's
Stock Account to which he has a vested (non-forfeitable) right.
ARTICLE III - Participation
3.1 Participation. Participation shall begin on the Effective Date.
Participation in the Plan shall continue until the Participant's Separation
Date.
ARTICLE IV - Establishment of Stock Account
4.1 Stock Account. The Committee shall establish and maintain, for the
Participant, a Stock Account to record the value of the Participant's interest
under the Plan. On the Effective Date, for the purpose of computing the value of
the cash benefits to which Participant is entitled hereunder, the Participant's
Stock Account shall be credited with 175,000 shares of Phantom Stock which shall
be deemed to be the equivalent of an equal number of shares of Common Stock.
4.2 Valuation of Stock Account. As of each Valuation Date the Committee
shall determine the value of each share of Phantom Stock credited to the Stock
Account by reference to the mean between the highest and lowest quoted selling
prices of the Common Stock on the New York Stock Exchange on the Valuation Date,
as reported in The Wall Street Journal or, if the Valuation Date is not a
regular business day, on the immediately preceding regular business day. Such
value, as determined by the Committee, shall be conclusive.
4.3 Adjustments to Stock Account. In the event of a change in the
outstanding shares of Common Stock by reason of a recapitalization, stock split,
stock dividend, merger, consolidation, reorganization, or similar corporate
change, the Committee shall make equitable adjustments in the
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Stock Account of the Participant so that the number of shares of Phantom Stock
credited to the Stock Account is not diluted as a result of such change.
4.4 No Shareholder Rights. The crediting of Phantom Stock to the
Participant's Stock Account shall not entitle the Participant to voting rights
or any other rights of a shareholder with respect to such Phantom Stock (except
for the crediting to Participant's Dividend Account of an amount equal to the
dividends paid on the Common Stock.)
ARTICLE V - Establishment of Dividend Account and Allocation and Crediting
of Dividend Amounts
5.1 Dividend Account. The Committee shall establish and maintain, for the
Participant, a separate Dividend Account to record the undistributed Dividend
Amounts of the Participant.
5.2 Entitlement to and Calculation of Dividend Amounts. Whenever the
shareholders of Common Stock become entitled to receive cash dividends on such
common stock, the Participant shall become entitled to a Dividend Amount. Such
Dividend Amount shall be determined by multiplying the per share cash dividend
payable to shareholders of the Common Stock by the number of shares of Phantom
Stock allocated to the Participant's Stock Account.
5.3 Distribution of Vested Dividend Amounts. Not later than November 30,
1996, and each November 30 thereafter until the Participant's Separation Date,
the Participant may elect, by filing an appropriate form with the Committee, to
receive a cash distribution of the Dividend Amount otherwise allocable to the
Participant's Dividend Account for the following calendar year, multiplied by
the Participant's Vesting Percentage. Such cash distribution shall be made to
the Participant at the same time that cash dividends are paid to the
shareholders of Common Stock. Such cash distributions shall not be treated as
"compensation" for purposes of benefits pursuant to the Company's benefit plans.
5.4 Treatment of Undistributed Dividend Amounts. That portion of the
Participant's Dividend Amount which is not distributed in accordance with
Section 5.3 shall be credited to his Dividend Account and shall vest in
accordance with Section 6.1(B). Amounts credited to the Participant's Dividend
Account shall be credited with earnings, on the last day of each month, at the
rate of Interest in effect on the first day of the month. The vested amount in
the Participant's Dividend Account shall be distributed in accordance with
Section 6.2.
ARTICLE VI - Distribution of Benefits on Separation
6.1 Vesting.
(A) Stock Account. The Participant's right to the cash value of the
amounts credited to his Stock Account shall become vested (non-forfeitable) in
accordance with the following schedule, provided Participant is employed by the
Company on each of the dates shown:
25% on December 1, 1996
50% on December 1, 1997
75% on December 1, 1998
100% on December 1, 1999
(B) Dividend Account. The Participant shall have a vested
(non-forfeitable) right to the amount credited to his Dividend Account equal to:
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(1) the product of (a) the total of all Dividend Amounts to which
the Participant has become entitled (including portions of such Dividend Amounts
which have been distributed to the Participant), multiplied by (b) the
Participant's Vesting Percentage (as determined under Section 6.1(A); less
(2) the total of all Dividend Amounts which have been distributed
to the Participant.
(C) Special Vesting. The preceding provisions of Section 6.1
notwithstanding, the Participant shall have a vested (non-forfeitable) right to
the amounts credited to his Stock Account and Dividend Account in the event of
(1) the termination of his employment by the Company without Cause, as provided
in Section 4.4 of the Employment Agreement between the Participant and the
Company dated April 8, 1996; (2) a Change in Control of the Company, as defined
in Section 4.5(b) of the Employment Agreement; (3) the Participant's death; or
(4) the Participant's Disability, as determined pursuant to Section 4.2 of the
Employment Agreement.
6.2 Distribution of Benefits on Separation.
(A) Amount of Benefits. The amount of benefits payable to a
Participant (or his Beneficiary) under the Plan, as a distribution after the
Participant's Separation Date, shall be equal to the sum of (a) the
Participant's vested interest in his Dividend Account, such vesting to be
determined pursuant to Section 6.1(B) or (C), plus (b) the product of his
Vesting Percentage (determined as of his Separation Date) multiplied by the
value of the Participant's Stock Account as of the Valuation Date last preceding
such Separation Date. Such valuation shall be determined in accordance with
Section 4.2. Effective as of such Valuation Date, the amount of benefit so
determined shall be credited to the Participant's Benefit Account and shall
thereafter be credited with Interest on the last day of each month at the rate
of Interest determined on the first day of such month.
(B) Method and Timing of Payment. The Participant's Benefit Account,
as determined under Section 6.2(A), shall be distributed to him (or to his
Beneficiary if he has died) in 240 monthly installments, payable on the first of
each month commencing on January 1 of the year following the Participant's
Separation Date. The amount of each installment shall be equal to 1/n multiplied
by the balance credited to the Participant's Benefit Account as of the last day
of the month preceding the payment date, where "n" equals the number of payments
yet to be made. The final payment will equal the balance in the Participant's
Benefit Account on the date of payment. For example, if payments begin on
January 1, 2005, the first payment will be equal to 1/240 of the balance in the
Benefit Account on December 31, 2004, the February 1, 2005 payment will be equal
to 1/239 of the balance in the Benefit Account of January 31, 2005, and so on
until 240 installments have been paid.
6.3 Emergency Distributions.
(A) The Compensation Committee may at any time make a payment to a
Participant in an amount up to the Participant's vested portion of his Stock and
Dividend Accounts upon a showing of an unforeseeable emergency. An unforeseeable
emergency is a severe financial hardship to the Participant resulting from a
sudden and unexpected illness or accident of the Participant or of a dependent
(as defined in section 152(a) of the Code) of the Participant, loss of property
due to casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant. The need to
send a Participant's child to college or the desire to purchase a home are not
unforeseeable emergencies. Payments may not be made to the extent the hardship
is or may be relieved (1) through reimbursement or compensation by insurance or
otherwise, or (2) by liquidation of the Participant's assets, to the extent such
liquidation would not itself cause
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severe financial hardship. The determination of whether an unforeseeable
emergency within the meaning of this Section 6.3(A) exists shall be made at the
sole discretion of the Compensation Committee. The amount of any such emergency
distribution shall be limited to the amount necessary to meet the emergency.
(B) In addition to the distributions permitted under Section 6.3(A),
the Participant may, at any time, request the Compensation Committee to
distribute all or part of the vested portion of his Stock and Dividend Accounts
to him, which distributions shall be reduced by an 8% discount as a restriction
on the availability of distributions pursuant to this Section 6.3(B).
ARTICLE VII - Funding
7.1 Plan Unfunded. The Plan shall be unfunded and no trust shall be
created. The Participant's Stock Account shall be reflected solely through
bookkeeping entries. No actual funds shall be set aside. All benefits shall be
paid by the Company from its general assets, and the Participant (or his
Beneficiary) shall have only the rights of a general, unsecured creditor against
the Company for any distributions due hereunder. The foregoing notwithstanding,
the Company shall establish a grantor or "rabbi" trust for the purpose of
enabling the Company to provide for the payment of benefits hereunder as they
come due. Contributions to the rabbi trust shall be made by the Company at such
times and in such amounts as the Board, in its sole discretion, shall determine.
ARTICLE VIII - Administration
8.1 Compensation Committee. The Compensation Committee of the Board shall
be in charge of the operation and administration of the Plan. The Committee may,
however, delegate specific administrative responsibilities to officers or
employees of the Company or to other individuals, all of whom shall serve at the
pleasure of the Committee and, if full-time employees of the Company, without
additional compensation.
8.2 Powers and Duties of Committee. The Committee shall administer the
Plan in accordance with its terms and shall have all the powers necessary to
carry out such terms. The Committee shall act by a majority of its members at
the time in office, and such action may be taken by a vote at a meeting or in
writing without a meeting. The Chairman, or any member of the Committee
designated by the Chairman, shall execute any certificate, instrument or other
written direction on behalf of the Committee and shall direct the payment of
benefits under the Plan. All interpretations of the Plan, and questions
concerning its administration and application, shall be determined by the
Committee in its sole discretion, and such determination shall be binding on all
Participants and their Beneficiaries.
8.3 Records and Reports. The Committee shall maintain records which shall
contain all relevant data pertaining to the Participant and his rights under the
Plan. It shall have the duty to carry into effect all rights or benefits
provided hereunder to the extent Company assets are properly available therefor.
8.4 Payments of Expenses. The Company shall pay all expenses of
administering the Plan.
8.5 Indemnification for Liability. The Company shall indemnify the members
of the Committee and other employees of the Company to whom the Committee has
delegated administrative or fiduciary duties against any and all claims, losses,
damages, expenses, and liabilities arising from
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their responsibilities in connection with the Plan, unless the same is
determined to be due to gross negligence or willful misconduct.
8.6 Claims Procedure. A claim for benefits under the Plan shall be filed
with the Chairman of the Committee. Written notice of the disposition of a claim
shall be furnished the Participant within 30 days after the application therefor
is filed. In the event the claim is denied, the specific reasons for such denial
shall be set forth, pertinent provisions of the Plan shall be cited and, where
appropriate, an explanation as to how the Participant can perfect his claim will
be provided.
8.7 Claims Review Procedure. The Participant or a Beneficiary who has been
denied a benefit, shall be entitled, upon request to the Chairman of the
Committee, to receive a written notice of such action, together with a full and
clear statement of the reasons for the action. If the Participant or Beneficiary
wishes further consideration of such claimant's position, the claimant may by
written application request a hearing. The written request together with a
written statement of the claimant's position, shall be filed with the Committee
no later than 90 days after receipt of the written notification provided for
above or in Section 8.6. The Committee shall schedule an opportunity for a full
and fair hearing of the issue within 30 days following receipt of the claimant's
written statement. The decision following such hearing shall be made within 30
days of such hearing and shall be communicated in writing to the claimant.
8.8 Reporting and Disclosure Requirements. In order to comply with the
requirements of Title I of ERISA, the Company shall:
(a) File a statement with the Secretary of Labor that includes the
name and address of the employer, the employer identification number assigned by
the Internal Revenue Service, a declaration that the Company maintains the Plan
primarily for the purpose of providing deferred compensation for a management
and highly compensated employee and a statement of the number of such plans and
the number of employees in each; and
(b) Provide plan documents, if any, to the Secretary of Labor upon
request as required by Section 104(a)(1) of ERISA. It is intended that this
provision comply with requirements of DOL Reg. Section 2520.104-23.
ARTICLE IX - Amendment and Termination
9.1 Amendment and Termination. The Board shall have the right, at any
time, by an affirmative vote of a majority thereof, to amend or terminate, in
whole or in part, the Plan, provided that such amendment or termination shall
not adversely affect the right of the Participant to the benefits set forth in
the Plan as effective June 1, 1996, including the right to accrue further
Interest as provided herein.
ARTICLE X - Miscellaneous Provisions
10.1 Alienation or Assignment of Benefits. The Participant's rights and
interest under the Plan may not be assigned or transferred prior to his death,
and then only pursuant to the provisions of this Plan.
10.2 Right to Withhold. The Company shall have the right to deduct from
all cash payments any Federal, state or local taxes required by law to be
withheld with respect to such cash payments.
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10.3 Construction. All legal questions pertaining to the Plan shall be
determined in accordance with the laws of the Commonwealth of Pennsylvania
except as preempted by Federal law.
10.4 Headings. The headings are for reference only. In the event of a
conflict between a heading and the content of an Article or Section, the content
of the Article or Section shall control.
IN WITNESS WHEREOF, HUNT MANUFACTURING CO. has caused this Plan to be duly
executed, under seal, this ___________ day of _________________________, 1996.
[CORPORATE SEAL] HUNT MANUFACTURING CO.
Attest:
___________________________ By:________________________________
Secretary Chief Executive Officer
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