EXHIBIT 10P
COGNEX CORPORATION
SUPPLEMENTAL RETIREMENT AND
DEFERRED COMPENSATION PLAN
EFFECTIVE AS OF APRIL 1, 1995
This Cognex Corporation Supplemental Retirement and Deferred Compensation Plan
(the "Plan") is adopted by Cognex Corporation (the "Employer") for certain of
its executive employees. The purpose of the Plan is to provide those employees
with supplement retirement income and to offer those employees an opportunity to
elect to defer the receipt of compensation in order to provide termination of
employment and related benefits taxable pursuant to Section 451 of the Internal
Revenue Code of 1986, as amended (the "Code"). The Plan is intended to be a
"top-hat" plan (i.e. an unfunded deferred compensation plan maintained for a
select group management or highly compensated employees) under Sections 201(2),
301(a)(3), and 401(a)(1) of the Employee Retirement Income Security Act of 1974
("ERISA").
Accordingly, the following Plan is adopted.
ARTICLE I -- DEFINITIONS
1.1 ACCOUNT means the balance credited to a Participant's or Beneficiary's Plan
account, including contribution credits and deemed income, gains, and losses (to
the extend realized as determined by the Employer, in its discretion) credited
thereto. A Participant's or Beneficiary's Account shall be determined as of the
date of reference.
1.2 BENEFICIARY means any person or persons so designated in accordance with the
provisions of Article VII.
1.3 CODE means the Internal Revenue Code of 1986 and the regulations thereunder,
as amended from time to time.
1.4 COMPENSATION means the total current cash remuneration paid by the Employer
to an Eligible Employee with respect to his or her service for the Employer (as
determined by the Employer).
1.5 DESIGNATION DATE means the date or dates as of which a designation of deemed
investment directions by an individual pursuant to Section 4.5, or any change in
a prior designation of deemed investment directions by an individual pursuant to
Section 4.5, shall become effective. The Designation Dates in any Plan Year
shall be designated by the Employer.
1.6 EFFECTIVE DATE means the effective date of the Plan, which shall be April 1,
1995.
1.7 ELIGIBLE EMPLOYEE means, for any Plan Year (or applicable portion thereof),
a person employed by the Employer who is determined by the Employer to be a
member of a select group of management or highly compensated employees and who
is designated by the Employer to be an Eligible Employee under the Plan. By each
November 1, the Employer shall notify those individuals, if any, who will be
Eligible Employees for the next Plan Year. If the Employer determines that an
individual first becomes an Eligible Employee during a Plan Year, the Employer
shall notify such individual of its determination and of the date during the
Plan Year on which the individual shall first become an Eligible Employee.
1.8 EMPLOYER means Cognex Corporation and its successors and assigns unless
otherwise herein provided, or any other corporation or business organization
which, with the consent of Cognex Corporation, or its successors or assigns,
assumes the Employer's obligations hereunder, or any other corporation or
business organization which agrees, with the consent of Cognex Corporation, to
become a party to the Plan.
1.9 ENTRY DATE with respect to an individual means the first day of the pay
period following the date on which the individual first becomes an Eligible
Employee.
1.10 PARTICIPANT means any person so designated in accordance with the
provisions of Article II, including, where appropriate according to the context
of the Plan, any former employee who is or may become (or whose Beneficiaries
may become) eligible to receive a benefit under the Plan.
1.11 PARTICIPANT ENROLLMENT AND ELECTION FORM means the form on which a
Participant elects to defer Compensation hereunder and on which the Participant
makes certain other designations as required thereon.
1.12 PLAN means this Cognex Corporation Supplemental Retirement and Deferred
Compensation Plan, as amended from time to time.
1.13 PLAN YEAR means the twelve (12) month period ending on the December 31 of
each year during which the Plan is in effect.
1.14 TRUST means the trust fund established pursuant to the Plan.
1.15 TRUSTEE means the trustee named in the agreement establishing the Trust and
such successor and/or additional trustees as may be named pursuant to the terms
of the agreement establishing the Trust.
1.16 VALUATION DATE means the December 31 of each Plan Year and any other date
that the Employer, in its sole discretion, designates as a Valuation Date.
1.17 YEAR OF SERVICE shall mean a Plan Year in which the Participant has
completed at least 1,000 hours of service with the Employer.
ARTICLE II -- ELIGIBILITY AND PARTICIPATION
2.1 REQUIREMENTS. Every Eligible Employee on the Effective Date shall be
eligible to become a Participant on the Effective Date. Every other Eligible
Employee shall be eligible to become a Participant on the first Entry Date
occurring on or after the date on which he or she becomes an Eligible Employee.
No individual shall become a Participant, however, if he or she is not an
Eligible Employee on the date his or her participation is to begin.
Participation in the Plan is voluntary. In order to participate, an otherwise
eligible Employee must make written application in such manner as may be
required by Section 3.1 and by the Employer and must agree to make Compensation
Deferrals as provided in Article III.
2.2 RE-EMPLOYMENT. If a Participant whose employment with the Employer is
terminated is subsequently re-employed, he or she shall become a Participant in
accordance with the provisions of Section 2.1.
2.3 CHANGE OF EMPLOYMENT CATEGORY. During any period in which a Participant
remains in the employ of the Employer, but ceases to be an Eligible Employee, he
or she shall not be eligible to make Compensation Deferrals hereunder.
ARTICLE III -- CONTRIBUTIONS AND CREDITS
3.1 PARTICIPANT COMPENSATION DEFERRALS. In accordance with rules established by
the Employer, a Participant may elect to defer Compensation which is due to be
earned and which would otherwise be paid to the Participant, in a lump sum or in
any fixed periodic dollar amounts designated by the Participant. Amounts so
deferred will be considered a Participant's "Compensation Deferrals."
Ordinarily, a Participant shall make such an election with respect to a coming
twelve (12) month Plan Year during the period beginning on the November 1 and
ending on the November 30 of the prior Plan Year, or during such other period
established by the Employer.
Compensation Deferrals shall be made through regular payroll deductions or
through an election by the Participant to defer the payment of a bonus not yet
payable to him or her at the time of the election. The Participant may reduce
his or her payroll deduction Compensation Deferral amount as of, and by written
notice delivered to the Employer at least thirty (30) days prior to, the
beginning of any regular payroll period, with such reduction being first
effective for Compensation to be earned in that payroll period. Once made, a
Compensation Deferral payroll deduction election shall continue in force
indefinitely, until changed by the Participant on a subsequent Participant
Enrollment and Election Form provided by the Employer. Compensation Deferrals
shall be deducted by the Employer from the pay of a deferring Participant and
shall be credited to the Account of the deferring Participant.
There shall be established and maintained by the Employer a separate Plan
Account in the name of each Participant, which shall at all times be one hundred
percent (100%) vested in the Participant, and to which shall be credited or
debited: (a) amounts equal to the Participant's
Compensation Deferrals, and (b) amounts equal to any deemed income, gains, or
losses (to the extent realized, based upon deemed fair market value of the
Account's deemed assets, as determined by the Employer, in its discretion)
attributable or allocable to (a). The Employer shall have the discretion to
allocate such deemed income, gains, or losses among Plan Accounts pursuant to
such allocation rules as the Employer deems to be reasonable and
administratively practicable.
Amounts equal to the Compensation Deferrals will be paid by the Employer to the
Trust with reasonable promptness after the total of such Compensation Deferrals
during any month or other period has been determined.
ARTICLE IV -- ALLOCATION OF FUNDS
4.1 ALLOCATION OF DEEMED EARNINGS OR LOSSES ON ACCOUNTS. Pursuant to Section
4.5, each Participant shall have the right to direct the Employer as to how
amounts in his or her Plan Account shall be deemed to be invested. In such a
case, the Employer shall direct the Trustee to invest the Account maintained in
the Trust on behalf of the Participant pursuant to the direction the Employer
has received from that Participant. The Participant's Plan Account will be
credited or debited with the increase or decrease in the realizable net asset
value or credited interest, as applicable, of the designated deemed investments,
as follows. As of each Valuation Date, an amount equal to the net increase or
decrease in realizable net asset value or credited interest, as applicable (as
determined by the employer), of each deemed investment option within the Trust
since the preceding Valuation Date shall be allocated among all Participant's
Accounts deemed to be invested in that investment option in accordance with the
ratio which the portion of the Account of each Participant which is deemed to be
invested within that investment option, determined as provided herein, bears to
the aggregate of all amounts deemed to be invested that investment option.
4.2 ACCOUNTING FOR DISTRIBUTIONS. As of the date of any distribution hereunder,
the distribution to a Participant or his or her Beneficiary or Beneficiaries
shall be charged to such Participant's Account.
4.3 SEPARATE ACCOUNTS. A separate account under the Plan shall be established
and maintained by the Employer to reflect the Account for each Participant with
sub-accounts to show separately the deemed earnings and losses credited or
debited to such Account and the applicable deemed investments of the Account.
4.4 INTERIM VALUATIONS. If it is determined by the Employer that the value of
the Trust as of any date on which distributions are to be made differs
materially from the value of the Trust on the prior Valuation Date upon which
the distribution is to be based, the Employer, in its discretion, shall have the
right to designate any date in the interim as a Valuation Date for the purpose
of revaluing the Trust so that the Account from which the distributions being
made will, prior to the distribution, reflect its share of such material
difference in value.
4.5 DEEMED INVESTMENT DIRECTIONS OF PARTICIPANTS. Subject to such limitations
as may from time to time be required by law, imposed by the Employer or the
Trustee, or contained elsewhere in the Plan, and subject to such operating rules
and procedures as may be imposed from time to time by the Employer or the
Trustee, prior to and effective for each Designation Date, each Participant may
communicate to the Employer a direction as to how his or her Account should be
deemed to be invested among such categories as deemed investments as may be made
available by the Employer hereunder. Such direction shall designate the
percentage (in ten percent multiples) of each portion of the Participant's
Account which is requested to be deemed to be invested in such categories as
deemed investments, and shall be subject to the following rules:
(a) Any initial or subsequent deemed investment direction shall be in
writing, or on a form supplied by and filed with the Employer, and
shall be effective as of the next Designation Date which is at least
ten (10) business days after such filing.
(b) All amounts credited to the Participant's Account shall be deemed
to be invested in accordance with the then effective deemed
investment direction, and as of the effective date of any new deemed
investment direction, all or a portion of the Participant's Account
at that date shall be reallocated among the designated deemed
investment funds according to the percentages specified in the new
deemed investment direction shall be filed and become effective. An
election concerning deemed investment choices shall continue
indefinitely as provided in the Participant's most recent
Participant Enrollment and Election Form, or other form specified by
the Employer.
(c) If the Employer receives an initial or revised deemed investment
direction which it deems to be incomplete, unclear, or improper, the
Participant's investment direction then in effect shall remain in
effect (or, in the case of deficiency in an initial deemed
investment direction, the Participant shall be deemed to have filed
no deemed investment direction) until the next Designation Date,
unless the Employer provides for, and permits the application of,
corrective action prior thereto.
(d) If the Employer possesses at any time directions as to the deemed
investment of less than all of a Participant's Account, the
Participant shall be deemed to have directed that the undesignated
portion of the Account be deemed to be invested in a money market,
fixed income, or similar fund made available under the Plan as
determined by the Employer in its discretion.
(e) Each Participant hereunder, as a condition to his or her
participation hereunder agrees to indemnify and hold harmless the
Employer and its agents and representatives from any losses or
damages of any kind relating to the deemed investment of the
Participant's Account hereunder.
(f) Each reference in this Section to a Participant shall be deemed to
include, where applicable, a reference to a Beneficiary.
ARTICLE V -- ENTITLEMENT TO BENEFITS
5.1 TERMINATION OF EMPLOYMENT. If a Participant terminates employment with the
Employer for any reason, the Participant's Plan Account at the date of
termination shall be valued and payable according to the provisions of Article
VI.
5.2 CHANGE OF CONTROL. If a Change of Control of the Employer occurs, the
participant's Plan Account at the date of the Change of Control shall be valued
and payable according to the provisions of Article VI. For purposes of this
Section, a "Change of Control" shall occur when there is a purchase or other
acquisition by any person, entity or group of persons, within the meaning of
section 13(d) of the Securities Exchange Act of 1934 ("Act"), or any comparable
successor provisions, or beneficial ownership (within the meaning of Rule 13d-3.
promulgated under the Act) of 30 percent or more of either the outstanding
shares of common stock or the combined voting power of Employer's then
outstanding voting securities entitled to vote generally, or the approval by the
stockholders of Employer of a reorganization, merger, or consolidation, in each
case, with respect to which persons who were stockholders of Employer
immediately prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than 50 percent of the combined voting power
entitled to vote generally in the election of directors of the reorganized,
merged or consolidated Employer's then outstanding securities, or a liquidation
or dissolution of Employer or of the sale of all or substantially all of
Employer's assets.
5.3 HARDSHIP DISTRIBUTIONS. In the event of financial hardship of the
Participant, as hereinafter defined, the Participant may apply to the Employer
for the distribution of all or any part of his or her Account. The Employer
shall consider the circumstances of each such case, and the best interests of
the Participant and his or her family, and shall have the best interests of the
Participant and his or her family, and shall have the right, in its sole
discretion, if applicable, to allow such distribution, or, if applicable, to
direct a distribution of part of the amount requested, or to refuse to allow any
distribution. Upon a finding of financial hardship, the Employer shall instruct
the Trustee to make the appropriate distribution to the Participant from amounts
contributed to the Trust by the Employer in respect of the Participant's
Account. In no event shall the aggregate amount of the distribution exceed
either the full value of the Participant's Account or the amount determined by
the Employer to be necessary to alleviate the Participant's financial hardship
(which financial hardship may be considered to include any taxes due because of
the distribution occurring because of this Section), and which is not reasonably
available from other resources of the Participant. For purposes of this Section,
the value of the Participant's Account shall be determined as of the date of
the distribution. "Financial hardship" means (a) a severe financial hardship to
the Participant resulting from a sudden and unexpected illness or accident of
the Participant or of a dependent (as defined in Code Section 152(a)) of the
Participant, (b) loss of the Participant's property due to casualty, or (c)
other similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the
Participant, each as determined to exist by the Employer. A distribution may be
made under Section 5.3 only with the consent of the Employer's board of
directors.
5.4 DISABILITY. In the event that the Participant incurs a Disability, as
hereinafter defined, the Participant may apply to the Employer for the
distribution of all or any part of his or her Account. Upon a finding of a
Disability, the Employer shall instruct the Trustee to make the appropriate
distribution to the Participant from amounts contributed to the Trust by the
Employer in respect of the Participant's Account. For purposes of this Section
5.4, a "Disability" means a physical impairment which would be expected to
prevent the Participant from performing the duties of his job with the Employer
for a period of at least six months as determined by a physican which is
selected by the Employer. A distribution may be made under this Section 5.4 only
with the consent of the Employer's board of directors.
5.5 RETIREMENT. A Participant who has attained his or her Retirement Date, as
hereinafter defined, may apply to the Employer for the distribution of all or
any part of his or her Account. For purposes of this Section 5.5, "Retirement
Date," shall mean the date on which the Participant has attained age fifty (50)
and has completed at least five Years of Service with the Employer.
5.6 RE-EMPLOYMENT OF RECIPIENT. If a Participant receiving installment
distributions pursuant to Section 6.2 is re-employed by the Employer, the
remaining distributions due to the Participant shall be suspended until such
time as the Participant (or his or her Beneficiary) once again becomes eligible
for benefits under Article V, at which time such distribution shall commence,
subject to the limitations and conditions contained in this Plan.
ARTICLE VI -- DISTRIBUTION OF BENEFITS
6.1 AMOUNT. A Participant (or his or her Beneficiary) shall become entitled to
receive, on or about the date of the Participant's termination of employment
with the Employer, a distribution in an aggregate amount equal to the
Participant's Account, which amount, depending on (a) the performance of the
deemed investments elected from time to time by the Participant, the
Beneficiary, and/or the Employer, as applicable, and (b) the extent to which the
investments of the Trust relating to the Participant's deemed investments under
Sections 4.1 and 4.5 actually are realized by the Trust, may be less than, equal
to, or greater than the aggregate amount of the Participant's Compensation
Deferrals. Any payment due hereunder from the Trust which is not paid by the
Trust will be paid by the Employer from its general assets.
6.2 METHOD OF PAYMENT.
(a) Cash Payments. All payments under the Plan shall be made in cash.
(b) Timing and Manner of Payment. In the case of distributions to a
Participant or his or her Beneficiary by virtue of an entitlement
pursuant to Section 5.1, 5.2, 5.3, or 5.4 an aggregate amount equal
to the Participant's Account will be paid by the Trust or the
Employer, as provided by Section 6.1, in a single lump sum. In the
event a Participant becomes entitled to benefits under Section 5.5,
an aggregate amount equal to the Participant's Account will be paid
by the Trust or the Employer, as provided by Section 6.1, in a lump
sum, on or about the date of the Participant's termination, or in
annual installments made over a period elected by the Participant
but not to exceed five years, provided such election is made at
least 12 months prior to his Retirement Date or termination of
employment. If such election is not made in accordance with the
preceding sentence, the Participant's Account will be paid in a lump
sum. If a Participant fails to designate properly the manner of
payment of the Participant's benefit under the Plan, such payment
will be in a lump sum on or about the date of the Participant's
termination of employment with the Employer.
If the whole or any part of a payment hereunder by the Trust of the Employer is
to be in installments, the total to be so paid shall continue to be deemed to be
invested pursuant to Sections 4.1 and 4.5 under such procedures as the Employer
may establish, in which case, subject to limitations of Section 6.1, any deemed
income, gain, or loss attributable thereto (to the extent realized, as
determined by the Employer, in its discretion) shall be reflected in the
installment payments, in such equitable manner as the Employer shall determine.
6.3 DEATH BENEFITS. If a Participant dies before terminating his or her
employment with the Employer and before the commencement of payments to the
Participant hereunder, the Participant's Account shall be distributed in a
single lump sum payment, as provided in Section 6.2, to the person or persons
designated in accordance with Section 7.1.
Upon the death of a Participant after payments hereunder have begun but before
he or she has received all payments to which he or she is entitled under the
Plan, the remaining benefit payments shall be paid to the person or persons
designated in accordance with Section 7.1, in the form of a single lump sum.
ARTICLE VII -- BENEFICIARIES; PARTICIPANT DATA
7.1 DESIGNATION OF BENEFICIARIES. Each Participant from time to time may
designate any person or persons (who may be named contingently or successively)
to receive such benefits as may be payable under the Plan upon or after the
Participant's death, and such designation may be changed from time to time by
the Participant by filing a new designation. Each designation will revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Employer, and will be effective only when filed in writing with the Employer
during the Participant's lifetime.
In the absence of a valid Beneficiary designation, or if, at the time any
benefit payment is due to a Beneficiary, there is no living Beneficiary validly
named by the Participant, the Employer shall pay any such benefit payment to the
Participant's spouse, if then living, but otherwise to the Participant's living
descendants, if any, per stripes, but, if none, to the Participant's estate. In
determining the existence or identity of anyone entitled to a benefit payment,
the Employer may rely conclusively upon information supplied by the
Participant's personal representative,
executor, or administrator. If a question arises as to the existence or identity
of anyone entitled to receive a benefit payment as aforesaid, or if a dispute
arises with respect to any such payment, then notwithstanding the foregoing, the
Employer, in its sole discretion, may distribute such payment to the
Participant's estate without liability for any tax or other consequences which
might flow therefrom, or may take such other action as the Employer deems to be
appropriate.
7.2 INFORMATION TO BE FURNISHED BY PARTICIPANTS AND BENEFICIARIES; INABILITY TO
LOCATE PARTICIPANTS OR BENEFICIARIES. Any communication, statement, or notice
addressed to a Participant or to a Beneficiary at his or her last post office
address as down on the Employer's records shall be binding on the Participant or
Beneficiary for all purposes of the Plan. The Employer shall not be obliged to
search for any Participant or Beneficiary beyond the sending of a registered
letter to such last known address. If the Employer notifies any Participant or
Beneficiary that he or she is entitled to an amount under the Plan and the
Participant or Beneficiary fails to claim such amount or make his or her
location known to the Employer within three (3) years thereafter, then, except
as otherwise required by law, if the location of one or more of the next of kin
of the Participant is known to the Employer, the Employer may direct
distribution of such amount to any one or more or all of such next of kin, and
in such proportions as the Employer determines. If the location of none of the
foregoing persons can be determined, the Employer shall have the right to direct
that the amount payable shall be deemed to be a forfeiture, except that the
dollar amount of the forfeiture, unadjusted for deemed gains or losses in the
interim, shall be paid by the Employer if a claim for the benefit subsequently
is made by the Participant or the Beneficiary to whom it was payable. If a
benefit payable to an unlocated Participant or Beneficiary is subject to escheat
pursuant to applicable state law, the Employer shall not be liable to any person
for any payment made in accordance with such law.
ARTICLE VIII -- THE TRUST
8.1 ESTABLISHMENT OF TRUST. The Employer shall establish the Trust with the
Trustee, pursuant to such terms and conditions as are set forth in the Trust
agreement to be entered into between the Employer and the Trustee. The Trust is
intended to be treated as a "grantor" trust under the Code, and the
establishment of the Trust is not intended to cause Participants to realize
current income on amounts contributed thereto, and the Trust shall be so
interpreted.
ARTICLE IX -- ADMINISTRATION
9.1 ADMINISTRATIVE AUTHORITY. Except as otherwise specifically provided herein,
the Employer shall have the sole responsibility for and the sole control of the
operation and administration of the Plan, and shall have the power and authority
to take all action and to make all decisions and interpretations which may be
necessary or appropriate in order to administer and operate the Plan, including,
without limiting the generality of the foregoing, the power, duty, and
responsibility to:
(a) Resolve and determine all disputes or questions arising under the
Plan, including the power to determine the rights of Eligible
Employees, Participants, and Beneficiaries, and their respective
benefits, and to remedy any ambiguities, inconsistencies, or
omissions in the Plan.
(b) Adopt such rules of procedure and regulations as in its opinion may
be necessary for the proper and efficient administration of the Plan
and as are consistent with the Plan.
(c) Implement the Plan in accordance with its terms and the rules and
regulations adopted as above.
(d) Make determinations with respect to the eligibility of any Eligible
Employee as a Participant and make determinations concerning the
crediting and distribution of Plan Accounts.
(e) Appoint any persons or firms, or otherwise act to secure specialized
advice or assistance, as it deems necessary or desirable in
connection with the administration and operation of the Plan, and
the Employer shall be entitled to rely conclusively upon, and shall
be fully protected in any action or omission taken by it in good
faith reliance upon, the advice or opinion of such firms or persons.
The Employer shall have the power and authority to delegate from
time to time by written instrument all or any part of its duties,
powers, or responsibilities under the Plan, both ministerial and
discretionary, as it deems appropriate, to any person or committee,
and in the same manner to revoke any such delegation of duties,
powers, or responsibilities. Any action of such person or committee
in the exercise of such delegated duties, powers, or
responsibilities shall have the same force and effect for all
purposes hereunder as if such action had been taken by the Employer.
Further, the Employer may authorize one or more persons to execute
any certificate or document on behalf of the Employer, in which
event any person notified by the Employer of such authorization
shall be entitled to accept and conclusively rely upon any such
certificate or document executed by such person as representing
action by the Employer until such third person shall have been
notified of the revocation of such authority.
9.2 MUTUAL EXCLUSION OF RESPONSIBILITY. Neither the Trustee nor the Employer
shall be obliged to inquire into or be responsible for any act or failure to
act, or the authority therefor, on the part of the other.
9.3 UNIFORMITY OF DISCRETIONARY ACTS. Whenever in the administration or
operation of the Plan discretionary actions by the Employer are required or
permitted, such actions shall be consistently and uniformly applied to all
persons similarly situated, and no such action shall be taken which shall
discriminate in favor of any particular person or group of persons.
9.4 LITIGATION. Except as may be otherwise required by law, in any action or
judicial proceeding affecting the Plan, no Participant or Beneficiary shall be
entitled to any notice or service of process, and any final judgment entered in
such action shall be binding on all persons interested in, or claiming under,
the Plan.
9.5 PAYMENT OF ADMINISTRATION EXPENSES. All expenses incurred in the
administration and operation of the Plan and the Trust, including any taxes
payable by the Employer in respect of the Plan or Trust or payable by or from
the Trust pursuant to its terms, shall be paid by the Employer.
9.6 CLAIMS PROCEDURE. Any person claiming a benefit under the Plan
(a "Claimant") shall present the claim, in writing, to the Employer, and the
Employer shall respond in writing. If the claim is denied, the written notice of
denial shall state, in a manner calculated to be understood by the Claimant:
(a) The specific reason or reasons for the denial, with specific
references to the Plan provisions on which the denial is based;
(b) A description of any additional material or information for the
Claimant to perfect his or her claim and an explanation of why such
material or information is necessary; and
(c) An explanation of the Plan's claims review procedure.
The written notice denying or granting the Claimant's claim shall be provided to
the Claimant within ninety (90) days after the Employer's receipt of the claim,
unless special circumstances require an extension of time for processing the
claim. If such an extension is required, written notice of the extension shall
be furnished by the Employer to the Claimant within the initial ninety (90) day
period and in no event shall such an extension exceed a period of ninety(90)
days from the end of the initial ninety (90) day period. Any extension notice
shall indicate the special circumstances requiring the extension and the date on
which the Employer expects to render decision on the claim. Any claim not
granted or denied within the period noted above shall be deemed to have been
denied.
Any Claimant whose claim is denied, or deemed to have been denied under the
preceding sentences (or such Claimant's authorized representative), may, within
sixty (60) days after the Claimant's receipt of notice of the denial, or after
the date of the deemed denial, request a review of the denial by notice given,
in writing, to the Employer. Upon such a request for review, the claim shall be
reviewed by the Employer (or its designated representative), which may, but
shall not be required to, grant the Claimant a hearing. In connection with the
review, the Claimant may have representation, may examine pertinent documents,
and may submit issues and comments in writing.
The decision on review normally shall be made within sixty (60) days of the
Employer's receipt of the request for review. If an extension of time is
required due to special circumstances, the Claimant shall be notified, in
writing, by the Employer, and the time limit for the decision on review shall be
extended to one hundred twenty (120) days. The decision on review shall be in
writing and shall state, in a manner calculated to be understood by the
Claimant, the specific
reasons for the decision and shall include references to the relevant Plan
provisions on which the decision is based. The written decision on review shall
be given to the Claimant within the sixty (60) day (or, if applicable, the one
hundred twenty (120) day) time limit discussed above. If the decision on review
is not communicated to the Claimant within the sixty (60) day (or, if
applicable, the one hundred twenty (120) day) period discussed above, the claim
shall be deemed to have been denied upon review. All decisions on review shall
be final and binding with respect to all concerned parties.
ARTICLE X -- AMENDMENT
10.1 RIGHT TO AMEND. The Employer, by written instrument executed by the
Employer, shall have the right to amend the Plan, at any time and with respect
to any provisions hereof, and all parties hereto or claiming any interest
hereunder shall be bound by such amendment; provided, however, that no such
amendment shall deprive a Participant or a Beneficiary of a right accrued
hereunder prior to the date of the amendment.
10.2 AMENDMENTS TO ENSURE PROPER CHARACTERIZATION OF PLAN. Notwithstanding the
provisions of Section 10.1, the Plan and the Trust agreement may be amended by
the Employer at any time, retroactively if required, if found necessary, in the
opinion of the Employer, in order to ensure that the Plan is characterized as
"top-hat" plan of deferred compensation maintained for a select group of
management or highly compensated employees as described under ERISA Sections
201(2), 301(a)(3), and 401(a)(1), and to conform the Plan to the provisions and
requirements of any applicable law (including ERISA and the Code). No such
amendment shall be considered prejudicial to any interest of a Participant or a
Beneficiary hereunder.
ARTICLE XI -- TERMINATION
11.1 EMPLOYER'S RIGHT TO TERMINATE OR SUSPEND PLAN. The Employer reserves the
right, at any time, to terminate the Plan and/or its obligation to make further
credits to Plan accounts. The Employer also reserves the right, at any time, to
suspend the operation of the Plan for a fixed or indeterminate period of time.
11.2 AUTOMATIC TERMINATION OF PLAN. The Plan, but not the Trust, automatically
shall terminate upon the dissolution of the Employer, or upon its merger into or
consolidation with any other corporation or business organization if there is a
failure by the surviving corporation or business organization to adopt
specifically and agree to continue the Plan.
11.3 SUSPENSION OF DEFERRALS. In the event of a suspension of the Plan, the
Employer shall continue all aspects of the Plan, other than Compensation
Deferrals under Section 3.1 during the period of the suspension, in which event
payments hereunder will continue to be made during the period of the suspension
in accordance with Articles V and VI.
11.4 ALLOCATION AND DISTRIBUTION. This Section shall become operative upon a
complete termination of the Plan. The provisions of this Section also shall
become operative in the event of a partial termination of the Plan, as
determined by the Employer, but only with respect to that portion of the Plan
attributable to the Participants to whom the partial termination is applicable.
Upon the effective date of any such event, notwithstanding any other provisions
of the Plan, no persons who were not theretofore Participants shall be eligible
to become Participants, the value of the interest of all Participants and
Beneficiaries shall be determined and, after deduction of estimated expenses in
liquidating and, if applicable, paying Plan benefits, paid to them as soon as is
practicable after such termination.
11.5 SUCCESSOR TO EMPLOYER. Any corporation or other business organization which
is a successor to the Employer by reason of a consolidation, merger, or purchase
of substantially all of the assets of the Employer shall have the right to
become a party to the Plan by adopting the same resolution of the entity's board
of directors or other appropriate governing body. If, within ninety (90) days
from the effective date of such consolidation, merger, or sale of assets, such
new entity does not become a party hereto, as above provided, the Plan
automatically shall be terminated, and the provisions of Section 10.4 shall
become operative.
ARTICLE XII -- MISCELLANEOUS
12.1 LIMITATIONS ON LIABILITY OF EMPLOYER. Neither the establishment of the Plan
nor any modification thereof, not the creation of any account under the Plan,
not the payment of any benefits under the Plan shall be construed as giving to
any Participant or other person any legal or equitable right against the
Employer, or any officer or employer thereof except as provided by law or by any
Plan provision. The Employer does not in any way guarantee any Participant's
Account from loss or depreciation, whether caused by poor investment performance
of a deemed investment or the inability to realize upon an investment due to an
insolvency affecting an investment vehicle or any other reason. In no event
shall the Employer, or any successor, employee, officer, director, or
stockholder of the Employer, be liable to any person on account of any claim
arising by reason of the provisions of the Plan or of any instrument or
instruments implementing its provisions, or for the failure of any Participant,
Beneficiary, or other person to be entitled to any particular tax consequences
with respect to the Plan, or any credit or distribution hereunder.
12.2 CONSTRUCTION. If any provision of the Plan is held to be illegal or void,
such illegality or invalidity shall not affect the remaining provisions of the
Plan, but shall be fully severable, and the Plan shall be construed and enforced
as if said illegal or invalid provision had never been inserted herein. For all
purposes of the Plan, where the context admits, the singular shall include the
plural, and the plural shall include the singular. Headings of Articles and
Sections herein are inserted only for convenience of reference and are not to be
considered in the construction of the Plan. The laws of the Commonwealth of
Massachusetts shall govern, control, and determine all questions of law arising
with respect to the Plan and interpretation and validity of its respective
provisions, except where those laws are preempted by the laws of the United
States. Participation under the Plan will not give any Participant the right to
be retained in the service of the Employer nor any right or claim to any benefit
under the Plan unless such right or claim has specifically accrued hereunder.
12.3 SPENDTHRIFT PROVISION. No amount payable to a Participant or a Beneficiary
under the Plan will, except as otherwise specifically provided by law, be
subject in any manner to anticipation, alienation, attachment, garnish, sale,
transfer, assignment (either at law or in equity), levy, execution, pledge,
encumbrance, charge, or any other legal or equitable process, and any attempt to
do so will be void; nor will any benefit be in any manner liable for or subject
to the debts, contracts, liabilities, engagements, or torts of the person
entitled thereto. Further (i) the withholding of taxes from Plan benefit
payments, (ii) the recovery under the Plan of overpayments of benefits
previously made to a Participant or Beneficiary, (iii) if applicable, the
transfer of benefit rights from the Plan to another plan, or (iv) the direct
deposit of benefit payments to an account in a banking institution (if not
actually part of an arrangement constituting an assignment or alienation) shall
not be construed as an assignment or alienation.
In the event that any Participant's or Beneficiary's benefits hereunder are
garnished or attached by order of the court, the Employer may bring action or a
declaratory judgment in a court of competent jurisdiction to determine the
proper recipient of the benefits to be paid under the Plan. During the pendency
of said action, any benefits that become payable shall be held as credits to the
Participant's or Beneficiary's Account or, if the Employer prefers, paid into
the court as they become payable, to be distributed by the court to the
recipient as the court deems proper at close of said action.
IN WITNESS THEREOF, the Employer has caused the Plan to be executed and its seal
to be affixed hereto, effective as of the 1st day of the April, 1995.
ATTEST/WITNESS Cognex Corporation
/s/ JoAnn Woodyard By: /s/ John J. Roger Jr.
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Print Name: JoAnn Woodyard Print Name: John J. Roger Jr.
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Date: June 1, 1995
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[SEAL]