EXHIBIT 10.37
ONEIDA LTD.
RESTORATION PLAN
Effective January 1, 2000
Amended and Restated as of July 28, 2004
Oneida Ltd.
Restoration Plan
1. Purpose.
The Plan is maintained by the Company for the purpose of providing Participants
with a means of supplementing the retirement benefits provided to them under the
other retirement plans and programs sponsored or recognized by the Company. The
Plan is intended to be a plan which is unfunded within the meaning of ERISA and
the Code and maintained by the Company primarily for the purpose of providing
deferred compensation to a select group of management or highly compensated
employees within the meaning of Section 201(2) of ERISA.
2. Definitions and Construction.
(a) Definitions. As used in the Plan, the following capitalized words
shall have the meanings set forth below:
"Actuarial Equivalent" has the meaning set forth in Section 14.
"Actuary" means the actuary for the Retirement Plan, as selected by
the Plan Administrator from time to time.
"Beneficiary" means the individual designated by a Participant to
receive survivor benefits under the Plan. A Beneficiary designation shall
be in writing on a form approved by the Plan Administrator for this
purpose. No Beneficiary designation shall be effective unless it is signed
by the Participant and received by the Plan Administrator prior to the date
of the Participant's death. If a Participant is married at the time of
death, the Participant's Beneficiary shall be the Participant's surviving
Spouse, unless such Spouse has previously consented in writing, on such
form and in accordance with such procedures as the Plan Administrator shall
specify for this purpose, to the designation of an individual other than
such Spouse as the Participant's Beneficiary for purposes of the Plan.
"Board" means the Board of Directors of the Company.
"Cause" shall mean (a) on or after a Change of Control, "cause" as
defined in an Employee Security Agreement applicable to the Participant or
(b) prior to the occurrence of a Change of Control or, in the case of a
Participant who does not have an Employee Security Agreement that defines
"cause" or for whom the term of the Employee Security Agreement has
expired, (i) a Participant's willfully engaging in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Companies,
(ii) a Participant's willful and continued failure substantially to perform
his duties with the Companies (other than any such failure resulting from
the Participant's incapacity due to a Disability) or (iii) a violation of
the provisions of Section 5(c).
"CEO" shall mean the Chief Executive Officer of the Company.
"Change of Control" shall mean a change of control of the Company of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act, whether
or not the Company is then subject to such reporting requirement; provided,
however, that, anything in this Agreement to the contrary notwithstanding,
a Change of Control shall be deemed to have occurred if:
(a) any individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity or person, or any
syndicate or group deemed to be a person under Section 14(d)(2) of the
Exchange Act is or becomes the "beneficial owner" (as defined in Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
directly or indirectly, of securities of the Company representing 20%
or more of the combined voting power of the Company's then outstanding
securities entitled to vote in the election of directors of the
Company,
provided, however, that for purposes of this clause (a), any person
who becomes the direct or indirect beneficial owner of securities
representing 20% or more of the combined voting power of the Company's
then outstanding securities in connection with an exchange, conversion
or discharge of the debt or equity securities or other indebtedness of
the Company in a transaction or series of transactions pursuant to the
recapitalization plan of the Company, dated as of June 26, 2004 (the
"Recapitalization"), shall be disregarded;
(b) during any period of two consecutive years (not including any
period prior to the effective date of this Plan), individuals who at
the beginning of such period constituted the Board and any new
directors, whose election by the Board or nomination for election by
the Company's stockholders was approved by a vote of at least
three-fourths 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, cease for any
reason to constitute a majority thereof, provided however, that the
replacement of any director of the Company serving as of July 12, 2004
with a director designated by a person who has entered into an
agreement to effect the Recapitalization will not be taken into
account for purposes of this clause (b);
(c) there occurs a reorganization, merger, consolidation or other
corporate transaction involving the Company (a "Business
Combination"), in each case with respect to which the stockholders of
the Company immediately prior to such transaction do not, immediately
after such transaction, own directly or indirectly more than 50% of
the combined voting power of the Company or other corporation
resulting from such Business Combination in substantially the same
proportions as their ownership, immediately prior to such Business
Combination, of the voting securities of the Company;
(d) all or substantially all of the assets of the Company are
sold, liquidated or distributed; or
(e) there occurs a transaction that constitutes a change in the
(i) ownership of the Company, (ii) effective control of the Company or
(iii) effective ownership of a substantial portion of the assets of
the Company, as determined pursuant to Code Section 280G and the
regulations promulgated thereunder.
"Code" means the Internal Revenue Code of 1986, as amended, and the
applicable rulings and regulations thereunder.
"Companies" means the Company and each of its Subsidiaries.
"Company" means Oneida Ltd., a New York corporation, and any successor
to all or substantially all of the business or assets thereof.
"Compensation Committee" means the Compensation Committee of the
Board, as constituted from time to time.
"Continuous Employment" means the period beginning on a Participant's
employment commencement date with the Companies and ending on his severance
date from the Companies, as determined by the Plan Administrator in
accordance with rules and procedures promulgated by the Compensation
Committee.
"Deferred Compensation Plan" means the Oneida Ltd. Deferred
Compensation Plan for Key Employees, as amended from time to time by the
Company.
"Disability" means any physical or mental injury or disorder of a
Participant which precludes the continued active employment of a
Participant and which is evidenced by the Participant's eligibility to
receive disability benefits under the Company Long-Term Disability Plan (or
a determination by the Plan
Administrator that such Participant would be eligible to receive disability
benefits if then participating in such plan).
"Early Retirement Date" means the first day of the month following a
Participant's termination of Continuous Employment prior to his Normal
Retirement Date that is coincident with or next following the date he (i)
has attained age fifty-five while in Continuous Employment and (ii) has
completed at least five Years of Vesting Service.
"Effective Date" means January 1, 2000.
"Employee Security Agreement" means any written contract between a
Participant and the Company that becomes effective upon the occurrence of a
Change of Control and which provides specified severance and other
protections to the Participant following the Change of Control.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the applicable rulings and regulations thereunder.
"ESOP" means the Oneida Ltd. Employee Stock Ownership Plan, as amended
and restated form time to time.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the applicable rulings and regulations thereunder.
"FICA and HI Taxes" means the employee portion of Social Security tax
under the Federal Insurance Contribution Act and Medicare tax.
"Good Reason" shall mean (a) on or after a Change of Control, "good
reason" as defined in an Employee Security Agreement applicable to the
Participant or (b) prior to the occurrence of a Change of Control or, in
the case of a Participant who does not have an Employee Security Agreement
that defines "good reason" or for whom the term of the Employee Security
Agreement has expired,
(i) a meaningful and detrimental alteration in the Participant's
position, titles, or nature or status of responsibilities (including
reporting responsibilities) from those in effect immediately prior to the
Change of Control;
(ii) a reduction by the Company in the Participant's annual base
salary as in effect immediately prior to the Change of Control or as the
same may be increased from time to time thereafter; a failure by the
Company to increase the Participant's base salary at a rate commensurate
with that of other key employees of the Company; a failure by the Company
to increase the Participant's base salary on an annual basis to reflect the
percentage increase in the cost of living (as determined in accordance with
such statistics or indices as the Board shall reasonably consider
appropriate for such purposes); or a reduction in the Participant's target
annual bonus (expressed as a percentage of base salary) below the target in
effect for the Participant immediately prior to the Change of Control;
(iii) the relocation of the office of the Company where the
Participant is employed at the time of the Change of Control (the "CIC
Location") to a location which in the Participant's good faith assessment
is an area not generally considered conducive to maintaining the executive
offices of a company such as the Company because of hazardous or
undesirable conditions, including, without limitation, a high crime rate or
inadequate facilities, or to a location which is more than 25 miles away
from the CIC Location or the Company's requiring the Participant to be
based more than 25 miles away from the CIC Location (except for required
travel on the Company's business to an extent substantially consistent with
your customary business travel obligations in the ordinary course of
business immediately prior to the Change of Control);
(iv) the failure by the Company to continue to provide the Participant
with benefits at least as favorable in the aggregate to those enjoyed by
such Participant under the Company's Retirement Plan,
ESOP, savings, life insurance, medical, health and accident, disability,
and fringe benefit plans and arrangements in which the Participant was
participating immediately prior to the Change of Control; or the failure by
the Company to provide the Participant with the number of paid vacation
days to which such Participant is entitled on the basis of years of service
with the Company in accordance with the Company's normal vacation policy in
effect immediately prior to the Change of Control;
(v) the failure of the Company to obtain an agreement from any
successor to assume and agree to perform the Company's obligations under
this Plan, as contemplated in Section 17(g) hereof; or
(vi) a material breach by the Company of the provisions of this Plan.
"Government Restoration Benefit" means the monthly benefit of a
Participant determined in accordance with Section 9.
"Hour of Service" shall have the same meaning as set forth in Article
2 of the Retirement Plan.
"Initial Participants" means the individuals named in Section 3(a).
"Normal Retirement Date" means the first day of the month following a
Participant's termination of Continuous Employment that is coincident with
or next following the date he (i) has attained age sixty-two while in
Continuous Employment and (ii) has completed at least five Years of Vesting
Service.
"Other Participants" means such other key employees and individuals
who are designated by the CEO and are approved by the Compensation
Committee to participate in the Plan in accordance with Section 3(b).
"Other Retirement Income" has the meaning set forth in Section 10 with
regard to each of the following: (i) a Participant's Government Restoration
Benefit, (ii) fifty percent of a Participant's Social Security benefit as
calculated in the manner set forth in Section 10(a), (iii) the benefits
payable in respect of a Participant pursuant to the Retirement Plan, the
ESOP, the Company Long-Term Disability Plan and the Terminated Pension Plan
and (iv) the benefits payable to the Participant under any other retirement
plan or arrangement of a prior employer that is designated by the
Compensation Committee as a source of Other Retirement Income.
"Participants" means the Initial Participants and the Other
Participants.
"Plan" means this Oneida Ltd. Restoration Plan, as may be amended from
time to time.
"Plan Administrator" means the person serving from time to time as the
Vice President of Human Resources of the Company or such other person
designated as the Plan Administrator by the Compensation Committee.
"Plan Agreement" means a written agreement between a Participant and
the Company providing for a Participant's participation in the Plan.
"Plan Benefit" means the monthly benefit of a Participant determined
in accordance with Section 6, Section 7 or Section 8, or the monthly
benefit payable to a Beneficiary under Section 11.
"Plan Earnings" means for each calendar year (i) the base salary paid
to a Participant for personal services actually rendered to the Companies
for such year and the annual cash incentive bonus paid to the Participant
pursuant to the Company's annual incentive bonus plan and (ii) the
Participant's elective deferrals under any cafeteria plan maintained by the
Companies under Section 125 of the Code, the Deferred Compensation Plan,
the Oneida Ltd. 401(k) Savings Plan or any similar pension, welfare,
deferred compensation plan or other plan designated by the Plan
Administrator.
"Plan Year" means the calendar year.
"Retirement" means a Participant's termination of Continuous
Employment under circumstances under which the Participant is eligible for
an immediate Plan Benefit under Section 6 or 7.
"Retirement Plan" means the Retirement Plan for Employees of Oneida
Ltd., as amended from time to time.
"Social Security Act" or "Social Security" means the Social Security
Act of 1935, as amended, and the applicable rulings and regulations
thereunder.
"Spouse" means the spouse of a Participant who is legally married to
the Participant under the laws of the jurisdiction in which the marriage
was contracted prior to the Participant's death or his Retirement.
"Subsidiary" means any corporation of which the Company directly or
indirectly controls 50% or more of the total combined voting power entitled
to vote in the election of directors.
"Terminated Pension Plan" means the Pension Plan of Oneida Ltd. (USA).
"Trust" means the grantor trust established by written agreement
between the Company and the Trustee for the purpose of accumulating funds
to assist the Company in meeting its obligations under the Plan, of which
the Company is the grantor, within the meaning of subpart E, part I,
subchapter J, chapter 1, subtitle A of the Code. The establishment of the
Trust is not intended in any way to affect the status of the Plan as
"unfunded" for purposes of ERISA and the Code.
"Trust Agreement" means the written agreement between the Company and
the Trustee, as amended from time to time.
"Trust Fund" means the assets of the Trust.
"Trustee" means any bank or trust company (i) that is not affiliated
with any of the Companies and that has, at the time of appointment, trust
assets under management of at least $10 billion and (ii) with which the
Company has entered into the Trust Agreement pursuant to which such
institution has agreed to administer the Trust and to hold and distribute
the assets of the Trust Fund.
"Year of Vesting Service" means each calendar year in which a
Participant completes 1,000 Hours of Service beginning with the calendar
year in which such Participant's employment commencement date with the
Companies occurs and ending with the calendar year in which his termination
of employment with the Companies occurs. In addition, if a Participant does
not complete at least 1,000 Hours of Service during the calendar year in
which his employment commencement date with the Companies occurs, but does
complete at least 1,000 Hours of Service during the twelve-consecutive
month period beginning on his employment commencement date, then such
Participant shall be credited with a Year of Vesting Service for such
twelve-consecutive month period. For purposes of calculating the amount of
a Participant's Years of Vesting Service, to the extent provided by the
Compensation Committee, employment with a prior employer or corporation or
other entity acquired by any of the Companies may be taken into account.
(b) Construction. When used herein, unless the context clearly
requires otherwise, the masculine pronoun shall be deemed to include the
feminine, and a singular noun or pronoun shall be deemed to include the plural
form.
3. Eligibility.
(a) Initial Participants. The following individuals shall be the
Initial Participants in the Plan: Allan Conseur, Harold DeBarr, Thomas Fetzner,
J. Peter Fobare, Robert Houle, Peter Kallet, Robert Lupica, Matthew Smith,
Catherine Suttmeier and Edward Thoma. The Initial Participants shall commence
participation in the Plan as of the Effective Date.
(b) Other Participants. Other key employees and senior executives of
any of the Companies shall become Participants in the Plan if designated by the
CEO and approved by the Compensation Committee. Such Other Participants shall
participate in the Plan as of the date specified by the CEO and approved by the
Compensation Committee.
(c) Reemployment. If a Participant terminates Continuous Employment
without a vested right to receive a benefit under this Plan and subsequently
resumes Continuous Employment, he shall not again become a Participant under the
Plan, unless designated by the CEO and approved by the Compensation Committee on
or after the date of such reemployment. Any such designated Participant shall
resume participation in the Plan as of the date and pursuant to the terms
specified by the CEO and approved by the Compensation Committee.
(d) Plan Agreement. In order to be eligible to receive a Plan Benefit,
each Participant shall execute a Plan Agreement with the Company. The Plan
Agreement shall contain such terms and provisions as required by the
Compensation Committee and the Plan Administrator.
4. Administration.
(a) General Authority. The general supervision of the Plan shall be
the responsibility of the Compensation Committee, which, in addition to such
other powers as it may have as provided herein, shall have the power: (i) to
make and enforce such rules and regulations as it shall deem necessary or proper
for the efficient administration of the Plan; (ii) to interpret and construe the
Plan and the rules and regulations of the Compensation Committee, to resolve
ambiguities, inconsistencies or omissions in the text of the Plan and to take
such other action as may be necessary or advisable for the orderly
administration of the Plan; (iii) to make any and all factual determinations in
connection with the administration and implementation of the Plan; (iv) to
delegate to any person the authority to carry out such administrative duties,
powers and authority relative to the administration of the Plan as the
Compensation Committee may determine; and (v) to review actions taken by the
Plan Administrator or any other person to whom authority is delegated under the
Plan.
(b) Plan Administrator. The Plan Administrator shall be responsible
for the day-to-day operation of the Plan, having the power (except to the extent
such power is reserved to the Compensation Committee) to take all action and to
make all decisions necessary or proper in order to carry out his duties and
responsibilities under the provisions of the Plan. If the Plan Administrator is
a Participant, the Plan Administrator shall not resolve, or participate in the
resolution of, any question which relates directly or indirectly to him and
which, if applied to him, would significantly vary his eligibility for, or the
amount of, any benefit to him under the Plan. The Plan Administrator shall
report to the Compensation Committee at such times as the Compensation Committee
shall request concerning the operation of the Plan.
(c) Actions; Indemnification. The members of the Compensation
Committee, the Plan Administrator and any officer or employee of the Company to
whom responsibilities are delegated by the Compensation Committee or the Plan
Administrator shall not be liable for any actions or failure to act hereunder.
The Company shall indemnify and hold harmless, to the fullest extent permitted
by law, the Compensation Committee (and each member thereof), the Plan
Administrator and any officer or employee of any of the Companies to whom
responsibilities are delegated by the Compensation Committee or the Plan
Administrator from and against any liabilities, damages, costs and expenses
(including attorneys' fees and amounts paid in settlement of any claims approved
by the Company) incurred by or asserted against it or him by reason of its or
his duties performed in connection with the operation or administration of the
Plan.
5. Vesting of Benefits.
(a) Vesting. Subject to Section 13(a), the Plan Benefit of each
Participant shall be fully vested and nonforfeitable following the Participant's
completion of five Years of Vesting Service and the occurrence of any of the
following events: (i) death while in Continuous Employment; (ii) Disability
while in Continuous Employment; or (iii) attainment of age fifty-five while in
Continuous Employment. Notwithstanding the foregoing, the Compensation Committee
may accelerate the vesting of any Participant's Plan Benefit, if it determines
such actions are in the best interests of the Company.
(b) Forfeiture. Unless otherwise determined by the Compensation
Committee, any Participant who (i) terminates Continuous Employment prior to
vesting in his Plan Benefit or (ii) is terminated by the Company for Cause at
any time, shall forfeit all rights to payments and benefits under the Plan.
(c) Forfeiture upon Certain Other. In order to protect the Company's
interest in non-public, confidential and proprietary information and products
and other commercial interests, unless the Compensation Committee determines
otherwise, the Participant shall forfeit any Plan Benefit, whether or not
vested, if, while in Continuous Employment, or, following the severance of the
Participant's Continuous Employment for any reason, any of the following events
shall occur:
(i) the Participant, while employed by the Companies or within two
years following the termination of his Continuous Employment, directly or
indirectly, whether as principal or investor or as an employee, officer,
director, manager, partner, consultant, agent or otherwise, alone or in
association with any other person, firm, corporation or other business
organization, carries on a Competing Business (as defined in Section 5(d))
in any geographic area in which any of the Companies has engaged, or will
engage during such period (including, without limitation, any area in which
any customer of any of the Companies may be located), without the prior
written consent of the Company;
(ii) the Participant discloses Proprietary Information (as defined in
Section 5(d)) to any unauthorized person outside the Companies or uses
Proprietary Information other than in connection with the business of the
Companies where such disclosure or use may be adverse to the interests of
the Companies;
(iii) the Participant, while employed by the Companies or within one
year following the termination of his Continuous Employment, directly or
indirectly hires or attempts to hire any person who is, or during the six
month period preceding termination of the Participant's Continuous
Employment was, employed by the Companies; or
(iv) the Participant, while employed by the Companies, or within one
year following the termination of his Continuous Employment, solicits any
business of any person or entity who is or was a customer or client of the
Companies.
(d) Definitions
(i) "Proprietary Information" means any information that may have
intrinsic value to any of the Companies, any clients or other parties with
which any of the Companies has a relationship, or that may provide any of
the Companies with a competitive advantage, including, without limitation,
any trade secrets, formulas, flow charts, computer programs, access codes
or other systems information, algorithms, business, product, or marketing
plans; sales and other forecasts, financial information, client lists, and
information relating to compensation and benefits; provided, however, that
such Proprietary Information does not include any information which is
available to the general public or is generally available within the
relevant business or industry other than as a result of the Participant's
actions. Proprietary Information may be in any medium or form, including,
without limitation, physical documents, computer files or discs,
videotapes, audiotapes, and oral communications.
(ii) "Competing Business" means to engage in the manufacture of table
top products or kitchen cutlery products or any other business engaged in
by the Companies after the Effective Date; provided, however, that nothing
herein shall limit the right of the Participant to own not more than one
percent of any of the debt or equity securities of any business
organization that is then filing reports with the Securities and Exchange
Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934.
6. Normal Retirement Benefit.
(a) Eligible Participants. A Participant who has a vested Plan Benefit
shall be entitled to retire under the Plan on his Normal Retirement Date and
receive a monthly benefit in the form of a life annuity in accordance with
Section 12 commencing on his Normal Retirement Date.
(b) Amount of Normal Retirement Benefit. The monthly amount payable
under this Section 6 shall be equal to one-twelfth of the annual amount
determined in accordance with the formula [G + ((P x C) - R)] x E, except that
the result of ((P x C) - R) shall not be less than zero, where:
G equals the Participant's Government Restoration Benefit, as
determined in accordance with Section 9;
P equals (i) .5 for Mr. Kallet: (ii) .4 for each other Initial
Participant; and (iii) .3 for each Other Participant or such
other percentage as specified by the Compensation Committee at
the time of such Other Participant's initial Plan participation.
The Compensation Committee may, from time to time, increase (but
not decrease) the percentage applicable to any Participant;
provided, however, that such increase shall be made prior to the
date of such Participant's Retirement;
C equals the Participant's average Plan Earnings for the three
consecutive Plan Years during the ten consecutive Plan Years
immediately preceding the termination of his Continuous
Employment that produce the highest average; provided, however,
that if the Participant's Plan Earnings for the Plan Year that
includes the date of his termination of Continuous Employment
would result in such Participant having the highest average Plan
Earnings, then such Plan Year shall be included in the
determination;
R equals the Participant's Other Retirement Income, as determined
in accordance with Section 10; and
E equals 1.0.
(c) Increase of Retirement Income Formula. The Compensation Committee
shall, in its sole discretion, have the authority to increase the retirement
income formula in Section 6(b); provided, however, that such increase shall be
made prior to the date of such Participant's Retirement;. Any such increase may
be limited to one Participant or to one group of Participants and shall not
create any obligation on the Compensation Committee with respect to any Other
Participants in the Plan, whether or not such Participants are similarly
situated to those Participants benefitting from the increase.
7. Early Retirement Benefit.
(a) Eligible Participants. A Participant who terminates Continuous
Employment with a vested Plan Benefit on or after attaining age fifty-five, but
prior to attaining age sixty-two, shall begin receiving an early retirement
benefit hereunder in the form of a single-life annuity commencing on the first
day of the month following his termination of Continuous Employment.
(b) Amount of Early Retirement Benefit. The monthly amount of a
Participant's early retirement benefit payable under this Section 7 shall be
equal to one-twelfth of the amount determined in accordance with the formula [G
+ ((P x C) - R)] x E, where G, P and C are as defined in Section 6, where R is
as determined in Section 10, and where:
E equals the applicable early retirement factor specified in
Appendix A.
8. Disability Benefit.
(a) Eligible Participants. If a Participant who has completed at least
five Years of Vesting Service terminates active employment prior to his Normal
Retirement Date by reason of a Disability, such Participant shall be eligible to
receive a monthly Disability retirement benefit under the Plan in the amount
specified under Section 8(b), beginning on the first day of the month following
the month in which the Participant incurs a Disability and ending as of the
first day of the month in which occurs the earliest of (i) the Participant's
Death, (ii) the end of the Participant's Disability, (iii) the Participant's
return to active employment with the Companies or any other employer, (iv) the
Participant's Retirement or (v) the Participant's Normal Retirement Date.
(b) Amount of Disability Retirement. The monthly amount of a
Participant's Disability retirement benefit payable under this Section 8 shall
be equal to one-twelfth of the amount determined in accordance with the formula
(P x C) - R, where P and C are as defined in Section 6, and where R is as
determined in Section 10.
(c) Vesting Service During Disability. A Participant's Years of
Vesting Service shall include each month for which the Participant received a
Disability benefit under this Section 8 plus all Years of Vesting Service
otherwise credited under the Plan (other than by operation of this Section 8).
(d) Death During Disability. If a Participant (i) terminates active
employment with the Company by reason of Disability, (ii) dies prior to
recovering from such Disability and (iii) is survived by a Beneficiary, then
such surviving Beneficiary shall be entitled to a death benefit in accordance
with the terms of Section 11.
(e) Normal Retirement Date. A Participant whose Disability retirement
benefit terminates as a result of the Participant attaining his Normal
Retirement Date shall be eligible to receive a Plan Benefit under Section 6;
provided, however, that "R" in the retirement income formula shall not include
any amount payable to him under the Company Long-Term Disability Plan after the
Participant's Normal Retirement Date.
9. Government Restoration Benefit.
For purposes of determining the Plan Benefit payable under Section 6,
Section 7 and Section 11, "G" in the retirement income formula in each such
section shall be calculated in accordance with Section 5.1 of the Retirement
Plan in an amount equal to A minus B (provided that the difference is greater
than zero) where:
A equals the benefit that would be payable to the Participant
pursuant to Section 5.1 of the Retirement Plan if the limitations
imposed by Section 415 and Section 401(a)(17) of the Code are not
imposed; and
B equals the benefit that is actually payable to the Participant
pursuant to Section 5.1 of the Retirement Plan.
The Government Restoration Benefit will be payable at the time and in accordance
with the terms and conditions of Section 6, Section 7 and Section 11, as
applicable.
10. Other Retirement Income.
(a) From Retirement Plan, ESOP, Terminated Pension Plan, Government
Restoration Benefit and Company Long-Term Disability Plan. For purposes of
determining the Plan Benefit payable under Section 6, Section 7, Section 8 and
Section 11, "R" in the retirement income formula in each such section shall
include the aggregate annual amount of the Other Retirement Income a Participant
would be entitled to receive as a single-life annuity from the Retirement Plan,
the ESOP, the Terminated Pension Plan, Government Restoration Benefit, the
Company Long-Term Disability Plan and, if designated by the Compensation
Committee, the benefits payable to the Participant under any other retirement
plan or arrangement of a prior employer as follows:
1. Calculations for Early Retirement, Normal Retirement and Death.
For purposes of determining the retirement benefits payable under
Section 6, Section 7 or Section 11,
Other Retirement Income shall be equal to the amount of the
retirement income a Participant is entitled to receive at Normal
Retirement Age under the Retirement Plan, the ESOP, the
Terminated Pension Plan and such other retirement plan or
arrangement of a prior employer as designated by the Compensation
Committee (calculated, in each case, as if any prior
distributions under such plans had not occurred), in each case
payable in the form of a single life annuity; provided, however,
that if a Participant is entitled to receive at the time of his
termination of Continuous Employment a supplemental retirement
payment under Section 3 of the Employee Security Agreement
applicable to the Participant, then "R" for purposes of the
Retirement Plan shall be determined as if the retirement benefit
payable under Section 3 of the Employee Security Agreement were
calculated and payable at Normal Retirement Age under the
Retirement Plan. For purposes of Section 6, Section 7 and Section
11, R shall also include the Government Restoration Benefit in
the form of a single life annuity commencing at Normal Retirement
Date.
2. Calculations for Disability Retirement. For purposes of
determining the Disability benefit paid under Section 8, Other
Retirement Income shall equal the actual amounts paid to the
Participant from time to time during the period of Disability
under the Retirement Plan, the Terminated Pension Plan, the
Company's Long-Term Disability Plan and such other retirement
plan or arrangement of a prior employer as designated by the
Compensation Committee, but shall not include amounts paid under
the ESOP. In addition, the Government Restoration Benefit shall
not be included in R for purposes of calculating the benefit
payable under Section 8.
With respect to the ESOP, the Actuary shall compute the single-life annuity
which is the Actuarial Equivalent of the ESOP's normal form of benefit. If
amounts determined under this Section 10(a) arise out of more than one plan, the
provisions of this Section 10(a) shall be applied separately with respect to
each such plan.
(b) From Social Security. For purposes of determining the Plan Benefit
under Section 6, Section 7 and Section 11, "R" in the retirement income formula
in each such section shall also include fifty percent of the annual amount of
the Primary Insurance Benefit applicable to a Participant (excluding any benefit
payable on behalf of a spouse or other dependent) under the Social Security Act
as of the Participant's normal retirement age under the Social Security Act. The
Other Retirement Income determined under this Section 10(b) shall be included in
"R" in the applicable retirement formula as of the Retirement Date and shall not
be redetermined subsequent to such date. For purposes of determining the
Disability benefit paid under Section 8, "R" in the retirement income formula
shall also include the annual amount of disability benefit applicable to a
Participant under the Social Security Act as a result of such Participant's
Disability.
1. Use of Participant's Benefit at Social Security Normal Retirement
Age. If a Participant has not delayed his retirement under Social
Security beyond his Social Security normal retirement age, the
Other Retirement Income shall be calculated at the time such
Participant's Plan Benefit is payable and shall include the
amount to be paid to the Participant at such Participant's Social
Security normal retirement age, provided such Participant
provides the Company with a written statement documenting the
amount to be paid at his Social Security normal retirement age.
2. Social Security Benefit Calculated by the Actuary. If a
Participant's Social Security benefit is not determined in
accordance with paragraph 1, the Actuary shall estimate the
amount and specify the commencement date of the Other Retirement
Income as of the time such Participant's Plan Benefit is payable
on the basis of (A) such Participant's actual earnings history
immediately prior to the commencement of his Plan Benefit or (B)
if (i) the Participant provides the Company with a written
acknowledgment that he will not supply the Company with his
actual earnings history or (ii) such Participant does not provide
such earnings history to the Company within 90 days following his
termination of Continuous Employment, reasonable actuarial
assumptions as applied to such Participant's earnings history
with the Company. The Actuary shall assume that the
Participant commences his Social Security benefit at the earlier
of such Participant's Social Security normal retirement age or
the commencement of any Social Security disability benefit to
such Participant. The determination of the Actuary with respect
thereto shall be final and binding on all interested persons
absent manifest error.
11. Death Benefit to Surviving Beneficiary.
(a) Eligibility for Benefit. If (i) a Participant dies while in
Continuous Employment and prior to Retirement with a vested Plan Benefit and
(ii) at the time of such Participant's death, the Participant is survived by a
Beneficiary, then such Participant's surviving Beneficiary shall be entitled to
benefit determined in accordance with this Section 11.
(b) Amount of Benefit Where Beneficiary Is a Surviving Spouse. (i) If
the Participant has ten or fewer Years of Vesting Service at the date of his
death while in Continuous Employment, then the monthly amount of a Plan Benefit
payable under this Section 11 to a Beneficiary of such Participant who is a
surviving Spouse shall be equal to fifty percent of one-twelfth of the amount of
the Plan Benefit which would have been payable to the Participant as if he had
retired on the first day of the month following the month in which his death
occurred with an annuity for the life of such Participant in accordance with the
formula [G + ((P x C) - R)] x E, where G, P, and C are as defined in Section 6
and where:
E is calculated in accordance with Appendix A, based on the age of
the Participant at death; and
R equals the amount determined in accordance with the provisions of
Section 10.
(ii) If the Participant has more than ten Years of Vesting Service at
the time of his death while in Continuous Employment, then the Plan Benefit
payable to a Beneficiary of such Participant who is a surviving Spouse shall be
calculated in accordance with Section 11(b)(i), except that "sixty percent"
shall be substituted for "fifty percent" in the first sentence thereof.
(c) Amount of Benefit Where Beneficiary Is Not a Spouse. (i) If a
Participant has ten or fewer Years of Vesting Services at the date of death
while in Continuous Employment, then the monthly amount of the Plan Benefit
payable to a Beneficiary of such Participant who is not a surviving Spouse shall
be an annuity for the life of such Beneficiary equal the Actuarial Equivalent of
fifty percent of one-twelfth of the Plan Benefit that would have been payable to
the Participant under the Plan if the Participant had retired under Section 7 of
the Plan as of the first day of the month following the month in which the
Participant's date of death occurred (assuming, for this Section 11(c) only,
that the requirement under Section 7 that the Participant have attained age
fifty-five did not apply).
(ii) If the Participant has more than ten Years of Vesting Service at
the time of death while in Continuous Employment, then the Plan benefit payable
to a Beneficiary of such Participant who is not a spouse shall be calculated in
accordance with Section 11(c)(i), except that "sixty percent" should be
substituted for "fifty percent" therein.
(d) Duration of. The payment of the Beneficiary's benefit shall
commence on the first day of the month immediately following the death of the
Participant, with the last payment being made on the first day of the month
coinciding with or preceding the death of the Beneficiary; provided, however,
that the Compensation Committee, may, in its sole discretion, pay the Actuarial
Equivalent of such Beneficiary's death benefit in a single sum payment.
12. Forms of Payment.
(a) Married Participant. The Plan Benefit of a Participant (i) who is
married to a Spouse at the time of Retirement and (ii) who has not made the
election and received the consent of such Spouse as contemplated by Section
12(c) shall be paid as an annuity for the life of the Participant in the amount
determined under Section 6 or 7, as the case may be, and, following the death of
the Participant, in an annuity for the life of the
Participant's surviving Spouse equal to fifty percent of the Plan Benefit paid
to the Participant; provided, however, that if the Participant had more than ten
Years of Vesting Service at the time of Retirement, "sixty percent" shall be
substituted for "fifty percent" in this sentence.
(b) Single Participant. The Plan Benefit of a Participant (i) who is
not married to a Spouse at the time of Retirement and (ii) who has not made the
election contemplated by Section 12(c) shall be paid to the Participant in the
form of a single life annuity calculated in accordance with Section 6 or 7, as
the case may be.
(c) Election of Alternate Payment Form. A Participant may, in lieu of
the payment form contemplated by Section 12(a) or 12(b), as the case may be,
elect to receive his Plan Benefit in the form of a single life annuity
determined in accordance with Section 6 or 7, as applicable, or in the form of a
joint and survivor annuity payable over the combined lives of the Participant
and a non-Spouse Beneficiary which is the Actuarial Equivalent of such life
annuity. Any such election shall be made on such form and in accordance with
such procedures as the Plan Administrator shall specify, and, in the case of the
designation of a Beneficiary who is not the surviving Spouse of the Participant
at the time of Retirement, such designation shall not be effective without the
written and signed consent of such surviving Spouse.
13. Change of Control. Anything in the Plan to the contrary
notwithstanding, the provisions of this Section 13 shall apply in the event of a
Change of Control to each Participant who is employed by the Company immediately
prior to the Change of Control.
(a) Changes to the Vesting. As of the date of a Change of Control,
each Participant shall be immediately vested in his Plan Benefit.
(b) Elimination of Early Retirement Factors. If a Participant has at
least five Years of Vesting Service as of the date of the Change of Control, the
following shall apply: (i) "E" in the formula in Section 7 shall equal "one"
(1); and (ii) the Participant shall be eligible to commence receiving his Plan
Benefit under Section 7 regardless of his age as of the first day of any month
following the date his Continuous Employment terminates on or after the date of
the Change of Control.
(c) Effect on Section 5(c). On and after a Change of Control, the
provisions of Sections 5(c)(i) and 5(c)(iii) shall cease to apply.
(d) Single Sum Payment. If, during the two-year period following a
Change of Control, a Participant's employment with the Company is terminated
other than for Cause or a Participant resigns his employment with the Company
for Good Reason, the Actuarial Equivalent of a Participant's Plan Benefit shall
be paid to the Participant in a single sum cash payment within five days
following the date of such termination of employment.
(e) Required Trust Contribution. On the date of a Change of Control,
the Company shall contribute to the Trust a lump sum cash amount that shall be
sufficient to cause the fair market value of the assets of the Trust Fund on the
date of the Change of Control to equal 110% of the amount that would be the
Plan's projected benefit obligation ("PBO") calculated as of such date. For
purposes of the previous sentence, the PBO of the Plan shall be determined by
the Actuary in accordance with the directives of Statement of Financial
Accounting Standards No. 87, and after giving full effect to the provisions of
this Section 13, except that the interest rate assumption used by the Actuary
for purposes of calculating the PBO of the Plan shall be the lesser of (i) the
interest rate utilized for purposes of calculating the PBO in the financial
statements of the Company for the most recently completed fiscal year and (ii)
5%. The determination of the Actuary shall, absent manifest error, be final and
binding on all interested persons. Thereafter, on each anniversary of the date
of the Change of Control, the Company shall make an additional cash contribution
to the Trust Fund in an amount that shall be sufficient to cause the fair market
value of the assets of the Trust Fund as of such anniversary date to equal 110%
of the PBO calculated as of such date, determined in accordance with the
provisions of this Section 13(e).
14. Actuarial Equivalent. For purposes of calculating optional forms
of benefits under the Plan (including the lump-sum payment contemplated by
Section 13(c) above), "Actuarial Equivalent" forms of
benefit shall be determined in accordance with the factors, assumptions and
methodologies applicable to such calculations under the Retirement Plan.
15. Amendment and Termination. The Board or the Compensation Committee
may, at any time and from time to time, amend, modify or terminate the Plan, in
whole or in part, in any manner, whether prospectively or retroactively;
provided, however, that no amendment may reduce the vested accrued benefits of
any Participant without the Participant's written consent.
16. Claims Procedure.
(a) Initial Claim. All claims for benefits under the Plan shall be
submitted in writing to the Plan Administrator on the form prescribed for that
purpose by the Plan Administrator. Written notice of the Plan Administrator's
decision regarding the application for benefits shall be furnished to the
claimant within ninety days after receipt of the claim; provided, however, that,
if special circumstances require an extension of time for processing the claim,
an additional ninety days from the end of the initial period shall be allowed
for processing the claim, in which event the claimant shall be furnished with a
written notice of the extension prior to the termination of the initial
ninety-day period indicating the special circumstances requiring an extension.
Any written notice denying a claim shall set forth the reasons for the denial,
including specific reference to pertinent provisions of the Plan on which the
denial is based, a description of any additional information necessary to
perfect the claim and information regarding review of the claim and its denial.
(b) Appeal to the Compensation Committee. A claimant may review all
pertinent documents and may request a review by the Compensation Committee of a
decision denying the claim. Such a request shall be made in writing and filed
with the Compensation Committee within sixty days after delivery to the claimant
of written notice of the decision of the Plan Administrator. Such written
request for review shall contain all additional information that the claimant
wishes the Compensation Committee to consider. The Compensation Committee may
hold a hearing or conduct an independent investigation, and the decision on
review shall be made as soon as possible after the Compensation Committee's
receipt of the request for review. Written notice of the decision on review
shall be furnished to the claimant within sixty days after receipt by the
Compensation Committee of a request for review, unless special circumstances
require an extension of time for processing, in which event an additional sixty
days shall be allowed for review, and the claimant shall be so notified in
writing. Written notice of the decision on review shall include specific reasons
for the decision.
(c) Finality. For all purposes under the Plan, such decision by the
Plan Administrator on claims (where no review is requested) and decision by the
Compensation Committee on review (where review is requested) shall be final,
conclusive and binding on all interested persons as to participation and
benefits eligibility, the amount of benefits and any other matter of fact or
interpretation relating to the Plan.
17. Miscellaneous.
(a) No Right to Continued Employment. To the extent of any retirement
benefits or other rights accrued hereunder, the Plan shall be deemed to
constitute a contract between the Company and the Participant, and the Plan (to
the extent of such accrued or other benefits) shall be part of the consideration
or inducement for the employment of such Participant by the Company.
Notwithstanding the foregoing, nothing contained in the Plan shall be deemed (i)
to give any person the right to be retained in the employ of the Company or (ii)
to interfere with the right of the Company to discharge any person at any time
without regard to the effect which such discharge shall have upon his rights or
potential rights, if any, under the Plan. The provisions of the Plan are in
addition to, and not a limitation on, any rights which any Participant may have
against the Company by reason of any employment or other agreement with the
Company.
(b) Spendthrift Provision. To fully protect the benefits hereunder
against claims of all kinds, direct or otherwise, none of the retirement
benefits provided hereunder to any person shall be assignable or transferable
voluntarily, nor shall they be subject to the claims of any creditor whatsoever,
nor subject to attachment, garnishment or other legal process by any creditor or
to the jurisdiction of any bankruptcy court or insolvency proceedings by
operation of law or otherwise, and no person shall have any right to alienate,
anticipate, pledge, commute, or encumber any of such benefits voluntarily or
involuntarily; provided, however, that, as long as no
Change of Control has occurred, such payments may be subject to set-off or
counterclaim by, or on behalf of, the Company.
(c) Payment of Expenses. All expenses incurred in connection with the
operation and administration of the Plan or the investment of any assets of the
Trust Fund, if any, including, but not limited to, the compensation of any
Trustee, any Actuary, accountant, counsel, other experts or persons who shall be
employed by the Compensation Committee or the Plan Administrator in connection
with the operation or administration of the Plan, shall be paid by the Company,
unless, if applicable, such expenses are paid from the Trust Fund in accordance
with the provisions of the Trust Agreement.
(d) Payment of Taxes. If any amounts held in the Trust Fund are
found in a "determination," within the meaning of Section 1313(a) of the
Code, to have been includible in the gross income of a Participant or the
Participant's Beneficiary prior to the date such amounts are otherwise payable
to the Participant or the Participant's Beneficiary under the Plan, then the
Company will, as soon as practicable, (i) pay such amounts to the applicable
Participant or Beneficiary or (ii) notify the Trustee to pay such amounts to the
Participant or the Participant's Beneficiary for the assets of the Trust. The
provisions of this Section 17(d) shall not apply to any FICA and HI Taxes owed
by the Participant or the Participant's Beneficiary. Promptly after receipt by
the Participant or the Participant's Beneficiary of written notice of the
assertion of any claim, or the commencement of any suit, action, proceeding,
investigation or audit in respect of which the Participant or the Participant's
Beneficiary could receive a distribution under this Section 17(d), the
Participant or the Participant's Beneficiary shall give written notice to the
Company of the assertion or commencement thereof. The Company shall have the
right (at its own expense) to participate in, assume the defense of and control
any such suit, action, proceeding, investigation or audit. If the Company
assumes the defense of such an action, (a) no compromise or settlement thereof
may be effected by the Company without the Participant's or the Beneficiary's
consent (which shall not be unreasonably withheld) and (b) no compromise or
settlement thereof may be effected by the Participant or the Participant's
Beneficiary without the consent of the Company (which shall not be unreasonably
withheld). If the Company elects to assume the defense of such action, the
Participant or the Participant's Beneficiary may employ his own counsel, at his
own expense, to participate in a secondary role in such defense. If written
notice is given to the Participant or the Participant's Beneficiary of the
assertion of any claim, or the commencement of any suit, action, proceeding,
investigation or audit, and the Company does not, within ten days after the
Participant's or Beneficiary's written notice to the Company together with
reasonably complete details of the claim, suit, action, proceeding,
investigation or audit, give written notice to the Participant or the
Participant's Beneficiary of its election to assume the defense thereof, the
Company shall be bound by any determination made in such claim, suit, action,
proceeding, investigation or audit or any compromise or settlement thereof
effected by the Participant or the Participant's Beneficiary.
(e) Unfunded. It is intended that the Plan shall be unfunded for
purposes of the Code and ERISA.
(f) Unsecured Promise to Pay. The Plan shall constitute an unsecured
promise by the Company to make benefit payments in the future pursuant to the
terms hereof, and each Participant's interest in the Plan shall be solely that
of an unsecured general creditor of the Company.
(g) Successors. The Company shall require any successor to all or
substantially all of its business or assets expressly to assume the Plan and all
of the Company's obligations under the Plan.
(h) Tax Withholding. There shall be deducted and withheld from all
benefit payments (and remitted to the appropriate taxing authority) any taxes
required, in the reasonable judgment of the Plan Administrator, to be deducted
and withheld for payment to any federal, state, local or other taxing authority.
(i) Headings and Captions. The titles to the sections in the Plan are
for convenience of reference only, and, in case of any conflict, the text of
this instrument, rather than such titles or headings, shall control.
(j) Governing Law. This Plan, the Trust Agreement and all provisions
thereof shall be construed and administered according to the laws of the State
of New York without regard to the choice of law principles thereof.
SCHEDULE A
Early Retirement Reduction Factors
The early retirement reduction table is:
Age Benefit % (1)
- --- -------------
62 100
61 90
60 80
59 70
58 65
57 60
56 55
55 50
54 47.5
53 45
52 42.5
51 40
50 37.5
49 35
48 32.5
47 30
46 27.5
45 25
44 24
43 23
42 22
41 21
40 20
NOTE: Early Retirement Reduction Factors for ages less than age 55 are for
certain death provisions only.
(1) Applicable benefit percentages shall be interpolated as necessary based on
the Participant's age in years and completed and partial Years of Vesting
Service.