EXHIBIT 10.16
ITT INDUSTRIES
EXCESS SAVINGS PLAN
AS AMENDED AND RESTATED AS OF JULY 13,2004
INTRODUCTION
The ITT Excess Savings Plan (the "Plan") was effective as of January 1, 1987.
The purpose of the Plan was to provide a means of restoring the contributions
lost under the ITT Investment and Savings Plan for Salaried Employees due to the
application of the limitations imposed on qualified plans by Section 415 of the
Internal Revenue Code.
As of January 1, 1989, the Plan was amended to provide (i) a means for
restoring, for an employee participating in the ITT Investment and Savings Plan
for Salaried Employees (the "Savings Plan"), the matching and other employer
contributions lost under said Plan due to the application of the limitations
imposed on qualified plans by Section 401(a)(17) and Section 402(g)(1) of the
Internal Revenue Code (the "Code") and (ii) a means of providing such employees
with an opportunity to defer a portion of their salary in accordance with the
terms of said Plan as hereinafter set forth.
As of January 1, 1995, the Plan was further amended to provide a means of
restoring for an employee participating in the ITT Investment and Savings Plan
for Salaried Employees matching and other employer contributions lost due to the
deferral of base compensation under another nonqualified deferred compensation
program. As of December 19, 1995, the Plan was renamed and continued as the ITT
Industries Excess Savings Plan.
As of January 1, 1996, the Plan was further amended to solely provide to
individuals who are designated as Eligible Employees under the Plan on and after
January 1, 1996, a means to restoring the contributions lost under the Savings
Plan due to the application of the limitations imposed by Section 415 and
401(a)(17) of the Code and providing such employees with an opportunity to defer
a portion of their base salary and to transfer any liabilities not attributable
to such benefits to the ITT Industries Deferred Compensation Plan. The Plan was
further amended, effective as of (i) January 1, 1997 to provide additional
optional forms of distributions and to revise the participation requirements,
(ii) July 1, 1997 to revise the eligibility requirements to permit an Eligible
Employee to participate in his first year of employment, and (iii) September 1,
1997 to further expand the distribution options available under the Plan.
As of July 13, 2004, the Plan was amended and restated to make certain changes
regarding the effect of an Acceleration Event and to unify the definition of
Acceleration Event with other employee benefit plans of ITT Industries, and to
make certain other technical amendments.
ITT INDUSTRIES
EXCESS SAVINGS PLAN
TABLE OF CONTENTS
PAGE
----
ARTICLE I. DEFINITIONS ......................................................... 1
ARTICLE II. PARTICIPATION ...................................................... 5
2.01 Eligibility ............................................................ 5
2.02 Participation .......................................................... 5
2.03 Termination of Membership .............................................. 7
ARTICLE III. EXCESS SAVINGS PLAN CONTRIBUTIONS ................................. 8
3.01 Amount of Contributions ................................................ 8
3.02 Investment of Accounts ................................................. 9
3.03 Vesting of Accounts .................................................... 10
3.04 Individual Accounts ................................... ................ 10
3.05 Valuation of Accounts .................................................. 10
ARTICLE IV. PAYMENT OF CONTRIBUTIONS ........................................... 11
4.01 Commencement of Payment ................................................ 11
4.02 Method of Payment ...................................................... 11
4.03 Payment upon the Occurrence of an Acceleration Event ................... 12
ARTICLE V. GENERAL PROVISIONS .................................................. 13
5.01 Funding ................................................................ 13
5.02 No Contract of Employment .............................................. 13
5.03 Unsecured Interest ..................................................... 13
5.04 Facility of Payment .................................................... 13
5.05 Withholding Taxes ...................................................... 14
5.06 Nonalienation .......................................................... 14
5.07 Transfers .............................................................. 14
5.08 Claims Procedure ....................................................... 15
5.09 Construction ........................................................... 16
ARTICLE VI. AMENDMENT OR TERMINATION ........................................... 17
6.01 Right to Terminate ..................................................... 17
6.02 Right to Amend ......................................................... 17
ARTICLE VII. ADMINISTRATION .................................................... 18
ITT INDUSTRIES
EXCESS SAVINGS PLAN
ARTICLE I. DEFINITIONS
1.01 "ACCELERATION EVENT" shall mean an event which shall occur if:
(i) a report on Schedule 13D shall be filed with the Securities and Exchange
Commission pursuant to Section 13(d) of the Securities Exchange Act of
1934 (the "Act") disclosing that any person (within the meaning of Section
13(d) of the Act), other than the Corporation or a subsidiary of the
Corporation or any employee benefit plan sponsored by the Corporation or a
subsidiary of the Corporation, is the beneficial owner directly or
indirectly of twenty percent (20%) or more of the outstanding Common Stock
$1 par value of the Corporation (the "Stock");
(ii) any person (within the meaning of Section 13(d) of the Act), other than
the Corporation or a subsidiary of the Corporation or any employee benefit
plan sponsored by the Corporation or a subsidiary of the Corporation,
shall purchase shares pursuant to a tender offer or exchange offer to
acquire any Stock of the Corporation (or securities convertible into
Stock) for cash, securities or any other consideration, provided that
after consummation of the offer, the person in question is the beneficial
owner (as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, of twenty percent (20%) or more of the outstanding Stock of
the Corporation (calculated as provided in paragraph (d) of Rule 13d-3
under the Act in the case of rights to acquire Stock);
(iii) the stockholders of the Corporation shall approve (A) any consolidation,
business combination or merger involving the Corporation, other than a
consolidation, business combination or merger involving the Corporation in
which holders of Stock immediately prior to the consolidation, business
combination or merger (x) hold fifty percent (50%) or more of the combined
voting power of the Corporation (or the corporation resulting from the
merger or consolidation or the parent of such corporation) after the
merger and (y) have the same proportionate ownership of common stock of
the Corporation (or the corporation resulting from the merger or
consolidation or the parent of such corporation) relative to other holders
of Stock immediately prior to the merger, business combination or
consolidation, immediately after the merger as immediately before, or (B)
any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all the assets of
the Corporation;
Page 2
(iv) there shall have been a change in a majority of the members of the Board
of Directors of the Corporation within a 12-month period unless the
election or nomination for election by the Corporation's stockholders of
each new director during such 12-month period was approved by the vote of
two-thirds of the directors then still in office who (x) were directors at
the beginning of such 12-month period or (y) whose nomination for election
or election as directors was recommended or approved by a majority of the
directors who were director at the beginning of such 12-month period; or
(v) any person (within the meaning of Section 13(d) of the Act) (other than
the Corporation or any subsidiary of the Corporation or any employee
benefit plan (or related trust) sponsored by the Corporation or a
subsidiary of the Corporation) becomes the beneficial owner (as such term
is defined in Rule 13d-3 under the Act) of twenty percent (20%) or more of
the Stock.
1.02 "ACCOUNTS" shall mean the Deferral Account, the Floor Contribution Account
and the Matching Contribution Account.
1.03 "ASSOCIATED COMPANY" shall mean any division, unit, or subsidiary of the
Company not participating in the Savings Plan.
1.04 "BENEFICIARY" shall mean the person or persons designated pursuant to the
provisions of the Savings Plan to receive benefits under said Savings Plan
after a Member's death.
1.05 "CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
1.06 "COMMITTEE" shall mean the Plan Committee under the Savings Plan.
1.07 "COMPANY" shall mean the Corporation with respect to its employees or any
Participating Corporation or Participating Division (as such terms are
defined in the Savings Plan) authorized to participate in the Plan by the
Corporation, with respect to each of its employees.
1.08 "CORPORATION" shall mean ITT Industries, Inc., an Indiana corporation,
(formerly known as ITT Corporation, a Delaware corporation) or any
successor by merger, purchase or otherwise.
1.09 "DEFERRAL ACCOUNT" shall mean the bookkeeping account maintained for each
Member to record the amounts credited on his behalf under Section 3.01 (a)
and earnings on those amounts pursuant to Section 3.02.
1.10 "DEFERRED COMPENSATION" shall mean the amount of Salary deferred under any
nonqualified deferred compensation program maintained by the Company other
than the Plan.
Page 3
1.11 "EFFECTIVE DATE" shall mean January 1, 1987.
1.12 "ELIGIBLE EMPLOYEE" shall mean an Employee of the Company who is eligible
to participate in the Plan as provided in Section 2.01.
1.13 "EMPLOYEE" shall have the meaning set forth in the Savings Plan.
1.14 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.15 "EXCESS MATCHING CONTRIBUTIONS" shall mean the amount of contributions
credited on a Member's behalf under Section 3.01(b).
1.16 "EXCESS FLOOR CONTRIBUTIONS" shall mean the amount of contributions
credited on a Member's behalf under Section 3.01(c).
1.17 "FLOOR CONTRIBUTION ACCOUNT" shall mean the bookkeeping account maintained
for each Member to record all amounts credited on his behalf under Section
3.01(c) and earnings on those amounts pursuant to Section 3.02.
1.18 "MATCHING COMPANY CONTRIBUTION" shall have the meaning set forth in the
Savings Plan.
1.19 "MATCHING CONTRIBUTION ACCOUNT" shall mean the bookkeeping account
maintained for each Member to record all amounts credited on his behalf
under Section 3.01(b) and earnings on those amounts pursuant to Section
3.02.
1.20 "MEMBER" shall mean each Eligible Employee who participates in the Plan
pursuant to Section 2.02.
1.21 "PLAN" shall mean this ITT Industries Excess Savings Plan (formerly known
as the ITT Excess Savings Plan).
1.22 "PLAN YEAR" shall mean the calendar year.
1.23 "REPORTING DATE" shall mean the last business day of each calendar month
following the Effective Date, or such other day as the Committee may
determine. For this purpose, a "business day" is any day in which the New
York Stock exchange is open.
1.24 "RETIREMENT" shall mean the termination of employment by a Member after
the date the Member is eligible for an early, normal or postponed
retirement allowance under the ITT Industries Salaried Retirement Plan
(formerly known as the ITT Corporation Retirement Plan for Salaried
Employees), or would have been eligible had he been a participant in such
Plan.
Page 4
1.25 "SALARY" shall mean an Eligible Employee's "Salary" as such term is
defined in the Savings Plan disregarding any reduction required due to the
application of the Statutory Compensation Limitation. Salary shall be
determined before any reduction pursuant to an Eligible Employee's
election to make Salary Deferrals under this Plan, but after reduction for
deferrals under any other nonqualified deferred compensation program
maintained by the Company.
1.26 "SALARY DEFERRALS" shall mean the amount a Member has elected to defer
pursuant to a Salary Reduction Agreement in accordance with the provisions
of Section 3.01 (a).
1.27 "SALARY REDUCTION AGREEMENT" shall mean the agreement entered into by the
Member pursuant to Section 2.02 under which he elects to defer a portion
of his Salary under this Plan.
1.28 "SAVINGS" shall have the meaning set forth in the Savings Plan.
1.29 "SAVINGS PLAN" shall mean the ITT Industries Investment and Savings Plan
for Salaried Employees (formerly known as the ITT Investment and Savings
Plan for Salaried Employees), as amended from time to time.
1.30 "STATUTORY COMPENSATION LIMITATION" shall means the limitations set forth
in Section 401(a)(17) of the Code as in effect each year for the Savings
Plan.
1.31 "STATUTORY LIMITATIONS" shall mean the limitations set forth in Section
401(a)(17) and Section 402(g)(1) of the Code.
Page 5
ARTICLE II. PARTICIPATION
2.01 ELIGIBILITY
(a) (i) An Employee, whose Salary as of the last day of a calendar year
exceeds the Statutory Compensation Limitation in effect for such
calendar year, shall be an Eligible Employee and thereby eligible to
participate in this Plan with respect to any Plan Year following
such calendar year; provided such Eligible Employee is eligible to
participate in the Savings Plan during such Plan Year.
(ii) Effective for Plan Years ending on and after July 1, 1997, an
Employee whose Salary in the first year of his employment (or
reemployment) with the Company exceeds the Statutory Compensation
Limitation in effect for that year, shall be an Eligible Employee
and thereby eligible to participate in this Plan with respect to
that Plan Year; provided, such Eligible Employee is eligible to
participate in the Savings Plan during such Plan Year.
(iii) Notwithstanding the foregoing, an Eligible Employee shall be
eligible to have Salary Deferrals credited on his behalf pursuant to
Section 3.01(a)(i) with respect to a particular Plan Year if, and
only if, the Eligible Employee's Savings under the Savings Plan for
that Plan Year have been suspended due to the Statutory Compensation
Limitations (or for Plan Years commencing prior to January 1, 1996,
the Statutory Limitations). An Eligible Employee shall be notified
of his eligibility for participation in the Plan prior to the date
the Eligible Employee may first commence participation in the Plan.
(b) Upon reemployment by the Company, an Employee shall become an Eligible
Employee again only upon completing the eligibility requirement described
in Section 2.01 (a) in a calendar year ending after his reemployment date.
2.02 PARTICIPATION
(a) Any Eligible Employee who has met the eligibility requirements of Section
2.01(a)(i) and who wishes to have salary reduction contributions credited
to his Deferral Account in a Plan Year must, prior to the beginning of
that Plan Year, execute an irrevocable Salary Reduction Agreement with
respect to such Plan Year authorizing Salary Deferrals under this Plan in
accordance with the provisions of Section 3.01 (a). Notwithstanding the
foregoing, any Employee who becomes an Eligible Employee with respect to
his first year of employment (or
Page 6
reemployment) pursuant to the provisions of Section 2.01(a)(ii), and who
wishes to have salary reduction contributions credited to his Deferral
Account in that Plan Year must, prior to the close of the 30th business
day following the date of his employment or reemployment, whichever is
applicable, or if later, the close of the business day immediately
preceding the date he first becomes eligible to participate in the Savings
Plan (or such other date as determined by the Committee), execute an
irrevocable Salary Reduction Agreement with respect to such Plan Year
authorizing Salary Deferrals under this Plan in according with the
provisions of Section 3.01 (a).
(b) Any such salary reduction election made by an Eligible Employee shall
remain in effect for subsequent Plan Years, provided the Member is an
Eligible Employee during such subsequent Plan Year and, with respect to
Salary Deferrals made pursuant to Section 3.01(a)(i), the Eligible
Employee's Savings under the Savings Plan for such Plan Year have been
suspended due to the Statutory Compensation Limitations (or with respect
to Plan Years ending prior to January 1, 1996, the Statutory Limitations),
unless modified or revoked by the Eligible Employee prior to the beginning
of any subsequent Plan Year for which such modification or revocation is
to be effective.
(c) Notwithstanding the foregoing, if a Member receives a hardship withdrawal
of before-tax contributions from the Savings Plan or any other plan which
is maintained by the Company or an Associated Company and which meets the
requirements of Section 401(k) of the Code (or any successor thereof) and
is precluded from making contributions to such 401(k) plan for at least 12
months (six months, effective as of January 1, 2002) after receipt of the
hardship withdrawal, the Member's Salary Reduction Agreement, if any,
shall be suspended during the 12-month period (six months, effective as of
January 1, 2002) commencing on the date the Member receives the hardship
withdrawal distribution from the Savings Plan or any other plan maintained
by the Company. Any Salary payment which would have been deferred pursuant
to the Member's Salary Reduction Agreement, but for the application of
this Section 2.02(c), shall be paid to the Member as if he had not entered
into the Salary Reduction Agreement.
(d) As a condition of participation in the salary reduction portion of the
Plan, a Member may also be required by the Committee to provide such other
information as the Committee may deem necessary to properly administer the
Plan.
(e) An Eligible Employee shall become a Member when contributions are credited
on his behalf pursuant to Article 3.
Page 7
2.03 TERMINATION OF MEMBERSHIP
(a) A Member's participation in the Plan shall terminate when the vested
values of the Member's Accounts under the Plan are totally distributed to
or on behalf of the Member.
(b) Upon reemployment by the Company, a former Member shall become a Member
again only upon completing, subsequent to his reemployment, the
eligibility and participation requirements of Section 2.01 and 2.02,
respectively.
Page 8
ARTICLE III. EXCESS SAVINGS PLAN CONTRIBUTIONS
3.01 AMOUNT OF CONTRIBUTIONS
For any Plan Year, the amount of contributions to be recorded on the books of
the Company on behalf of a Member pursuant to this Article 3 shall be equal to
the sum of the Salary Deferrals, the Excess Matching Contributions and Excess
Floor Contributions determined under (a), (b) and (c) below:
(a) SALARY DEFERRALS
The amount of Salary Deferrals for each Plan Year shall be equal to the
sum of (i) plus (ii) as follows:
(i) the designated percentage of Salary elected by the Member in his
Salary Reduction Agreement, provided that the allocation under the
Plan and the reduction in the Member's Salary corresponding to such
election shall be made only with respect to Salary (A) otherwise
payable to such Member during the Plan Year in excess of the
Statutory Compensation Limitation or (B) with respect to Plan Years
ending prior to January 1, 1996 otherwise payable to such Member
after he has contributed the maximum amount of before-tax
contributions for the Plan Year permitted under Section 402(g)(1) of
the Code; and
(ii) the designated percentage of Deferred Compensation elected by the
Member in his Salary Reduction Agreement, provided that the
allocation under the Plan and the reduction in the Member's Salary
corresponding to such election shall be made on a pro rata basis as
of each payroll period, without regard to whether the Salary payable
to such Member during the Plan Year has exceeded the Statutory
Compensation Limitation (or with respect to Plan Years ending prior
to January 1, 1996, whether such Member has contributed the maximum
amount of before-tax contributions for the Plan Year permitted under
Section 402(g)(1) of the Code).
The designated percentage elected by the Member in his Salary Reduction
Agreement for a Plan Year must be a uniform percentage, not to exceed six
(6%) percent, of both his Deferred Compensation and his Salary, unless and
until changed by the Committee. The total Salary Deferral amount elected
shall reduce the Member's Salary, and shall not be applied against any
amount deferred under any other nonqualified plan maintained by the
Company.
Page 9
(b) EXCESS MATCHING CONTRIBUTIONS
The amount of Excess Matching Contributions for each Plan Year shall be
equal to fifty (50%) percent of the Salary Deferrals by the Member for
such Plan Year, and shall be credited to the Member's Account at the same
time as the Salary Deferrals to which they relate.
(c) EXCESS FLOOR CONTRIBUTIONS
The amount of Excess Floor Contributions for each Plan Year, regardless of
whether or not Salary Deferrals are made on behalf of the Member pursuant
to paragraph (a) above, shall be equal to the result of (i) minus (ii) as
follows:
(i) an amount equal to one half of one percent of the sum of the
Member's Salary and the Member's Deferred Compensation for the Plan
Year, minus
(ii) the amount of Floor Company Contribution (as that term is defined
under the Savings Plan) made by the Company on behalf of the Member
under the Savings Plan for such Plan Year and allocated to the
Member's account under the Savings Plan in such Plan Year.
(d) The contributions recorded on the books of the Company pursuant to
paragraphs (a), (b) and (c) above, to the extent they are determined with
reference to Salary, shall be credited to a Member's Accounts at the same
time as they would have been credited to his accounts under the Savings
Plan if not for the application of the Statutory Compensation Limitations
(or with respect to Plan Years ending prior to January 1, 1996, the
Statutory Limitations).
The contributions recorded on the books of the Company pursuant to
paragraphs (a), (b) and (c) above, to the extent they are determined with
reference to Deferred Compensation, shall be credited to a Member's
Accounts on a pro rata basis as of each payroll period.
(e) Notwithstanding any provisions of the Plan to the contrary, no future
Salary Deferrals by a Member shall be permitted and no future Excess Floor
or Excess Matching Contributions shall be made on behalf of such Member if
such Member is no longer an Eligible Employee.
3.02 INVESTMENT OF ACCOUNTS
A Member shall have no choice or election with respect to the investments
of his Accounts. As of each Reporting Date, there shall be credited or
debited an amount of earnings or losses on the balance of the Member's
Accounts as of such Reporting Date which would have been credited had the
Member's Accounts been invested in the Stable Value Fund maintained under
the Savings Plan.
Page 10
3.03 VESTING OF ACCOUNTS
(a) The Member shall be fully vested in the Salary Deferrals and Excess Floor
Contributions (and earnings thereon) made on his behalf under Section 3.01
(a) and (c) respectively. The Member shall vest in the Excess Matching
Contributions made on his behalf under Section 3.01(b) (and earnings
thereon) at the same rate and under the same conditions at which such
contributions would have vested under the Savings Plan had they been
contributed thereunder.
In the event the Member terminates employment prior to vesting in all or
any part of the Excess Matching Contributions credited on his behalf, such
contributions and earnings thereon shall be forfeited and shall not be
restored in the event the Member is subsequently reemployed by the
Company.
(b) Notwithstanding any provision of this Plan to the contrary, in the event
of an Acceleration Event, each Member who is employed by the Company or an
Associated Company as of the consummation of the Acceleration Event shall
become fully vested in the Excess Matching Contributions made on his
behalf under Section 3.01(b) (and earnings thereon).
3.04 INDIVIDUAL ACCOUNTS
(a) The Committee shall maintain, or cause to be maintained, on the book of
the Company records showing the individual balances of each Member's
Accounts. At least once a year, each Member shall be furnished with a
statement setting forth the value of his Accounts.
(b) Accounts established under this Plan shall be hypothetical in nature and
shall be maintained for bookkeeping purposes only so that hypothetical
earnings or losses on the amounts credited on a Member's behalf under this
Plan can be credited or debited, as the case may be.
3.05 VALUATION OF ACCOUNTS
(a) The Committee shall value or cause to be valued each Member's Accounts at
least quarterly. On each Reporting Date there shall be allocated to the
Accounts of each Member the appropriate amount determined in accordance
with Section 3.02.
(b) Whenever an event requires a determination of the value of a Member's
Accounts, the value shall be computed as of the Reporting Date immediately
preceding the date of the event, except as otherwise specified in this
Plan.
Page 11
ARTICLE IV. PAYMENT OF CONTRIBUTIONS
4.01 COMMENCEMENT OF PAYMENT
(a) A Member shall be entitled to receive payment of his Deferral Account and
his Floor Contribution Account and the vested portion of his Matching
Contribution Account as determined under Section 3.03 upon his termination
of employment with the Company and all Associated Companies for any
reason, other than death. The distribution of such Accounts shall be made
as soon as practicable following such termination of employment.
(b) In the event of the death a Member prior to the full payment of his
Accounts, the unpaid portion of his Accounts shall be paid to his
Beneficiary as soon as practicable following his date of death.
4.02 METHOD OF PAYMENT
(a) Except as otherwise provided in paragraph (b) below, payment of a Member's
Deferral Account and his Floor Contribution Account and the vested portion
of his Matching Contribution Account shall be made in a single lump sum
payment.
(b) Effective on and after January 1, 1997, a Participant may elect by duly
completing, executing and filing with the Committee a written election to
have the vested portion of his Deferral Account, Floor Contribution
Account, and Matching Contribution Account distributed under one of the
following methods of payment, in lieu of a lump sum payment:
(i) ratable annual cash installments for a fixed period of years as
designated on the written election notice not to exceed 20 years
(with respect to distributions commencing on or after September 1,
1997, not to exceed the joint life expectancy of the Member and his
spouse, if any).
(ii) ratable annual cash installments paid over the life expectancy of
the Member (or with respect to distributions first commencing on or
after September 1, 1997, the joint life expectancy of the Member and
his spouse).
However, for this alternate form of payment election to be effective, it
must be made by the Member in a calendar year prior to the calendar year
in which the Member's termination of employment occurs and a full six
months must pass between the date the Member duly makes such election and
the Member's termination of employment. Notwithstanding the foregoing, in
Page 12
the event a Member terminates employment for reasons other than
Retirement, the distribution of the vested portion of his Deferral
Account, Floor Contribution Account, and Matching Contribution Account
shall be made in a single lump sum payment.
During an installment payment period, the Member's Accounts shall continue
to be credited with earnings or losses as described in Section 3.02. The
amount of each installment shall be determined (1) in the same manner as
the applicable installment method is determined under the provisions of
the Savings Plan and (2) with respect to an installment determined under
clause (ii) above, using the same mortality table as utilized in
determining a similar installment under the Savings Plan.
4.03 PAYMENT UPON THE OCCURRENCE OF AN ACCELERATION EVENT
Upon the occurrence of an Acceleration Event, all Members shall
automatically receive the balance of their Accounts in a single lump sum
payment. Such lump sum payment shall be made as soon as practicable on or
after the Acceleration Event. If the Member dies after such Acceleration
Event, but before receiving such payment, it shall be made to his
Beneficiary.
Page 13
ARTICLE V. GENERAL PROVISIONS
5.01 FUNDING
All amounts payable in accordance with this Plan shall constitute a
general unsecured obligation of the Company. Such amounts, as well as any
administrative costs relating to the Plan, shall be paid out of the
general assets of the Company.
5.02 NO CONTRACT OF EMPLOYMENT
The Plan is not a contract of employment and the terms of employment of
any Member shall not be affected in any way by this Plan or related
instruments, except as specifically provided therein. The establishment of
the Plan shall not be construed as conferring any legal rights upon any
person for a continuation of employment, nor shall it interfere with the
rights of the Company to discharge any person and to treat him without
regard to the effect which such treatment might have upon him under this
Plan. Each Member and all persons who may have or claim any right by
reason of his membership shall be bound by the terms of this Plan and all
agreements entered into pursuant thereto.
5.03 UNSECURED INTEREST
Neither the Company nor the Board of Directors nor the Committee in any
way guarantees the performance of the investment fund(s) designated under
Section 3.02. No special or separate fund shall be established, and no
segregation of assets shall be made, to assure the payments thereunder. No
Member hereunder shall have any right, title, or interest whatsoever in
any specific assets of the Company. Nothing contained in this Plan and no
action taken pursuant to its provisions shall create or be construed to
create a trust of any kind or a fiduciary relationship between the Company
and a Member or any other person. To the extent that any person acquires a
right to receive payments under this Plan, such right shall be no greater
than the right of any unsecured creditor of the Company.
5.04 FACILITY OF PAYMENT
In the event that the Committee shall find that a Member is unable to care
for his affairs because of illness or accident or is a minor or has died,
the Committee may direct that any benefit payment due him, unless claim
shall have been made therefore by a duly appointed legal representative,
be paid on his behalf to his spouse, a child, a parent or other blood
relative, or to a
Page 14
person with whom he resides, and any such payment so made shall thereby be
a complete discharge of the liabilities of the Company and the Plan for
that payment.
5.05 WITHHOLDING TAXES
The Company shall have the right to deduct from each payment to be made
under the Plan any required withholding taxes.
5.06 NONALIENATION
Subject to any applicable law, no benefit under the Plan shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, and any attempt to do so shall be void, nor
shall any such benefit be in any manner liable for or subject to
garnishment, attachment, execution or levy, or liable for or subject to
the debts, contracts, liabilities, engagements or torts of a person
entitled to such benefits.
5.07 TRANSFERS
(a) Notwithstanding any Plan provision to the contrary, in the event the
Corporation (i) sells, causes the sale of, or sold the stock or assets of
any employing company in the controlled group of the Corporation to a
third party or (ii) distributes or distributed to the holders of shares of
the Corporation's common stock all of the outstanding shares of common
stock of a subsidiary or subsidiaries of the Corporation, and, as a result
of such sale or distribution, such company or its employees are no longer
eligible to participate hereunder, the liabilities with respect to the
benefits accrued under this Plan for a Member who, as a result of such
sale or distribution, is no longer eligible to participate in this Plan,
shall, at the discretion and direction of the Corporation (and approval by
the new employer), be transferred to a similar plan of such new employer
and become a liability thereunder. Upon such transfer (and acceptance
thereof) the liabilities for such transferred benefits shall become the
obligation of the new employer and the liability under this Plan for such
benefits shall cease.
(b) Notwithstanding any Plan provision to the contrary, at the discretion and
direction of the Corporation, liabilities with respect to benefits accrued
by a Member under a plan maintained by such Member's former employer may
be transferred to this Plan and upon such transfer become the obligation
of the Company.
Page 15
5.08 CLAIMS PROCEDURE
(a) SUBMISSION OF CLAIMS
Claims for benefits under the Plan shall be submitted in writing to the
Committee or to an individual designated by the Committee for this
purpose.
(b) DENIAL OF CLAIM
If any claim for benefits is wholly or partially denied, the claimant
shall be given written notice within 90 days following the date on which
the claim is filed, which notice shall set forth
(i) the specific reason or reasons for the denial;
(ii) specific reference to pertinent Plan provisions on which the denial
is based;
(iii) a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and
(iv) an explanation of the Plan's claim review procedure.
If special circumstances require an extension of time for processing the
claim, written notice of an extension shall be furnished to the claimant
prior to the end of the initial period of 90 days following the date on
which the claim is filed. Such an extension may not exceed a period of 90
days beyond the end of said initial period.
If the claim has not been granted and written notice of the denial of the
claim is not furnished within 90 days following the date on which the
claim is filed, the claim shall be deemed denied for the purpose of
proceeding to the claim review procedure.
(c) CLAIM REVIEW PROCEDURE
The claimant or his authorized representative shall have 60 days after
receipt of written notification of denial of a claim to request a review
of the denial by making written request to the Committee, and may review
pertinent documents and submit issues and comments in writing within such
60-day period.
Not later than 60 days after receipt of the request for review, the
Committee shall render and furnish to the claimant a written decision,
which shall include specific reasons for the decision and shall make
specific references to pertinent Plan provisions on which it is based. If
special circumstances require an extension of time for processing, the
decision shall be rendered as soon as possible, but not later than 120
days after receipt of the request for review, provided that
Page 16
written notice and explanation of the delay are given to the claimant
prior to commencement of the extension. Such decision by the Committee
shall not be subject to further review. If a decision on review is not
furnished to a claimant within the specified time period, the claim shall
be deemed to have been denied on review.
(d) EXHAUSTION OF REMEDY
No claimant shall institute any action or proceeding in any state or
federal court of law or equity or before any administrative tribunal or
arbitrator for a claim for benefits under the Plan until the claimant has
first exhausted the procedures set forth in this section.
5.09 CONSTRUCTION
(a) The Plan is intended to constitute an unfunded deferred compensation
arrangement maintained for a select group of management or highly
compensated employees within the meaning of Section 201(2), Section
301(a)(3), and Section 401(a)(1) of ERISA, and all rights under this Plan
shall be governed by ERISA. Subject to the preceding sentence, the Plan
shall be construed, regulated and administered in accordance with the laws
of the State of New York, to the extent such laws are not superseded by
applicable federal laws.
(b) The masculine pronoun shall mean the feminine wherever appropriate.
(c) The illegality of any particular provision of this document shall not
affect the other provisions and the document shall be construed in all
respects as if such invalid provision were omitted.
(d) The headings and subheadings in the Plan have been inserted for
convenience of reference only and are to be ignored in any construction of
the provisions thereof.
Page 17
ARTICLE VI. AMENDMENT OR TERMINATION
6.01 RIGHT TO TERMINATE
Notwithstanding any Plan provision to the contrary, the Corporation may,
by action of the Board of Directors, terminate this Plan and the related
Deferral Agreements at any time. In the event the Plan and related Salary
Reduction Agreements are terminated, each Member or Beneficiary shall
receive a single sum payment in cash equal to the balance of the Member's
Accounts. The single sum payment shall be made as soon as practicable
following the date the Plan is terminated and shall be in lieu of any
other benefit which may be payable to the Member or Beneficiary under this
Plan.
6.02 RIGHT TO AMEND
The Board of Directors or its delegate may amend or modify this Plan and
the related Salary Reduction Agreements in any way either retroactively or
prospectively. However, except that without the consent of the Member or
Beneficiary, if applicable, no amendment or modification shall reduce or
diminish such person's right to receive any benefit accrued hereunder
prior to the date of such amendment or modification, and after the
occurrence of an Acceleration Event, no modification or amendment shall be
made to Sections 3.03(b) and 4.03.
Page 18
ARTICLE VII. ADMINISTRATION
7.01
(a) The Committee shall have the exclusive responsibility and complete
discretionary authority to control the operation, management and
administration of the Plan, with all powers necessary to enable it
properly to carry out such responsibilities, including, but not limited
to, the power to interpret the Plan and any related documents, to
establish procedures for making any elections called for under the Plan,
to make factual determinations regarding any and all matters arising
hereunder, including, but not limited to, the right to determine
eligibility for benefits, the right to construe the terms of the Plan, the
right to remedy possible ambiguities, inequities, inconsistencies or
omissions, and the right to resolve all interpretive, equitable or other
questions arising under the Plan. The decisions of the Committee on all
matters shall be final, binding and conclusive on all persons to the
extent permitted by law.
(b) To the extent permitted by law, all agents and representatives of the
Committee shall be indemnified by the Corporation and held harmless
against any claims and the expenses of defending against such claims,
resulting from any action or conduct relating to the administration of the
Plan, except claims arising from gross negligence, willful neglect or
willful misconduct.