EXHIBIT 10.3
LITTELFUSE, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(AMENDED AND RESTATED AS OF JANUARY 1, 2008)
LITTELFUSE, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(AMENDED AND RESTATED AS OF JANUARY 1, 2008)
TABLE OF CONTENTS
PAGE
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Article I. Establishment and Purpose................................... 1
1.1 Establishment and Purpose................................... 1
1.2 Application of Supplemental Plan............................ 1
Article II. Definitions and Construction................................ 2
2.1 Definitions................................................. 2
2.2 Gender and Number........................................... 6
2.3 Employment Rights........................................... 6
2.4 Severability................................................ 6
2.5 Applicable Law.............................................. 6
Article III. Supplemental Plan Benefits.................................. 7
3.1 Eligibility for Participation............................... 7
3.2 Participation............................................... 7
3.3 Target Benefit.............................................. 7
3.4 Allocation Formula.......................................... 7
3.5 Actuarial Assumptions....................................... 8
3.6 Vesting..................................................... 9
3.7 Payment of Benefits......................................... 9
3.8 Forms of Distribution....................................... 11
3.9 Beneficiary Designation..................................... 12
Article IV. General Provisions.......................................... 13
4.1 Action by the Employer...................................... 13
4.2 Administration.............................................. 13
4.3 Expenses.................................................... 13
4.4 Indemnification and Exculpation............................. 13
4.5 Funding..................................................... 13
4.6 Change in Control........................................... 13
4.7 Interests not Transferable.................................. 14
4.8 Cessation of Business....................................... 14
4.9 Effect on Other Benefit Plans............................... 15
4.10 Claims and Appeals Procedure................................ 15
4.11 Arbitration................................................. 16
4.12 Notice...................................................... 16
4.13 Tax Liability............................................... 17
4.14 Successors.................................................. 17
Article V. Amendment and Termination................................... 18
5.1 Amendment................................................... 18
5.2 Termination................................................. 18
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LITTELFUSE, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(AMENDED AND RESTATED AS OF JANUARY 1, 2008)
ARTICLE I. ESTABLISHMENT AND PURPOSE
1.1 Establishment and Purpose. Effective as of October 1, 1993, Littelfuse,
Inc. (the "Employer") established the LITTELFUSE, INC. SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN (the "Supplemental Plan"), a non-qualified supplemental
executive retirement plan to provide certain executive employees of the Employer
with competitive retirement benefits. The Supplemental Plan is an unfunded
supplemental executive retirement plan within the meaning of Sections 201(2),
301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA for a select group of highly
compensated employees or management employees. The Supplemental Plan is hereby
amended and restated, effective as of January 1, 2008, to incorporate all prior
amendments and to comply with the requirements of Section 409A of the Internal
Revenue Code (the "Code").
1.2 Application of Supplemental Plan. The terms of this Supplemental Plan
are applicable only to eligible employees under Section 3.1 hereof who are in
the active employ of the Employer on or after October 1, 1993.
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ARTICLE II. DEFINITIONS AND CONSTRUCTION
2.1 Definitions. The following terms shall have the meanings stated below
unless the context clearly indicates otherwise.
(a) "Account" means the bookkeeping account maintained by the Employer in
the name of each Participant reflecting amounts credited to the
Participant's Account each Plan Year pursuant to Section 3.4.
(b) "Beneficiary" means the person or persons designated by the
Participant in writing to receive any benefits otherwise payable under
this Plan on behalf of the Participant after the Participant's death.
To be effective, such Beneficiary designation must be filed with the
Employer prior to the Participant's death. The Beneficiary shall be
the person or persons last so designated by the Participant, or, if
there is no such designation filed with the Employer at the time of
the Participant's death, the Participant's estate.
(c) "Board" means the Board of Directors of the Employer.
(d) "Change in Control" means the occurrence of any of the following
events:
(1) a business combination, including a merger or consolidation,
of the Employer and the shareholders of the Employer prior to the
combination do not continue to own, directly or indirectly, more than
fifty-one percent (51%) of the equity of the combined entity;
(2) a sale, transfer, or other disposition in one or more
transactions (other than in transactions in the ordinary course of
business or in the nature of a financing) of the assets or earning
power aggregating more than forty-five percent (45%) of the assets or
operating revenues of the Employer to any person or affiliated or
associated group of persons (as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 (the "Exchange Act") in effect as of
the date hereof);
(3) the liquidation of the Employer;
(4) one or more transactions which result in the acquisition by
any person or associated group of persons (other than the Employer,
any employee benefit plan whose beneficiaries are Employees of the
Employer or TCW Special Credits or any of its affiliates) of the
beneficial ownership (as defined in Rule 13d-3 of the Exchange Act, in
effect as of the date hereof) of forty percent (40%) or more the
common stock of the Employer, securities representing forty percent
(40%) or more of the combined voting power of the voting securities of
the Employer which affiliated persons owned less than forty percent
(40%) prior to such transaction or transactions; or
(5) the election or appointment, within a twelve (12) month
period, of any person or affiliated or associated group, or its or
their nominees, to the Board such that such persons or nominees, when
elected or appointed, constitute a majority of
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the Board and whose appointment or election was not approved by a
majority of those persons who were members of the Board at the
beginning of such period or whose election or appointment was made at
the request of an Acquiring Person.
An "Acquiring Person" is any person who, or which, together with
all affiliates or associates of such person, is the beneficial owner
of twenty percent (20%) or more of the common stock of the Employer
then outstanding, except that an Acquiring Person does not include the
Employer or any employee benefit plan of the Employer or any person
holding common stock of the Employer for or pursuant to such plan. For
the purpose of determining who is an Acquiring Person, the percentage
of the outstanding shares of the common stock of which a person is a
beneficial owner shall be calculated in accordance with Rule 13d-e of
the Exchange Act.
(e) "Code" means the Internal Revenue Code of 1986, as now in effect or
hereafter amended.
(f) "Committee" means the Compensation Committee of the Board.
(g) "Compensation" means (i) an Employee's base salary paid and any other
cash incentive compensation paid during a Plan Year from the Employer
except the annual bonus, (ii) bonuses attributable to a Plan Year
regardless of whether paid during such Plan Year, and (iii) any salary
reduction contributions made on behalf of, or compensation deferrals
elected by, the Participant during a Plan Year to or under any plan
maintained by the Employer under Code Sections 401(k) or 125 and under
any nonqualified savings plan of the Employer which permits the
Participant to accumulate amounts in excess of the limits of Section
402(g) of the Code, but shall exclude any amount includible in income
by reason of participation in this Supplemental Plan and the amount of
any payment, or accrual, of deferred bonuses (i.e., bonuses for which
payment is deferred for more than one year from the date for which the
services relating to such bonus were performed).
(h) "Competitor" means any corporation, partnership, sole proprietorship,
joint venture, association or any other business organization (i) that
offers any product or product category offered by the Employer and
which product or product category exceeds 10% of the gross revenues or
10% of the pre-tax earnings of the Employer for the Employer's most
recently ended fiscal year, and (ii) that conducts business in any
location within North America.
(i) "Disability" means any accidental bodily injury or sickness.
(j) "Disability Retirement Date" means the last day of the month
coincident with or next following the date on which a Participant
terminates employment due to Total Disability.
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(k) "Early Retirement Date" means the last day of the month coincident
with or next following the date the Participant has attained age 55
and completed 10 Years of Service with the Employer.
(l) "Employee" means an individual who is in the employ of the Employer
and who is either a highly compensated employee or a management
employee.
(m) "Employer" means Littelfuse, Inc. and any of its wholly-owned
subsidiaries.
(n) "Employment Termination Date" means, with respect to any Participant,
the date on which the Participant's employment with the Employer is
terminated whether because or retirement, resignation, dismissal,
Total Disability, or death. Anything else contained in the
Supplemental Plan to the contrary notwithstanding, a Participant shall
be considered to have terminated employment, or to have retired, if,
and only if, the Participant has incurred a separation from service
with the Employer as defined in Section 409A of the Code. By way of
illustration, and without limiting the generality of the foregoing,
the following principals shall apply:
(1) A Participant shall not be considered to have separated from
service so long as the Participant is on military leave, sick leave,
or other bona fide leave of absence if the period of such leave does
not exceed six months, or if longer, so long as a Participant retains
a right to reemployment with the Employer under an applicable statute
or by contract.
(2) Regardless of whether his employment has been formally
terminated, a Participant will be considered to have separated from
service only as of the date it is reasonably anticipated that no
further services will be performed by the Participant for the
Employer, or that the level of bona fide services the Participant will
perform after such date will permanently decrease to no more than 20
percent of the average level of bona fide services performed over the
immediately preceding 36-month period (or the full period of
employment if the Participant has been employed for less than 36
months). For purposes of the preceding test, during any paid leave of
absence the Participant shall be considered to have been performing
services at the level commensurate with the amount of compensation
received, and unpaid leaves of absence shall be disregarded.
(3) For purposes of determining whether a Participant has
separated from service, all services provided for the Employer, or for
any other entity that is part of a controlled group that includes the
Employer as defined in Section 414(b) or (c) of the Code, shall be
taken into account, whether provided as an employee or as a consultant
or other independent contractor; provided that a Participant shall not
be considered to have not separated from service solely by reason of
service as a non-employee director of the Employer or any other such
entity.
(o) "ERISA" means the Employee Retirement Income Security Act of 1974, as
now in effect or hereafter amended.
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(p) "Final Average Compensation" means the average annual Compensation
paid to the Participant by the Employer during the five consecutive
calendar year period preceding his termination of employment with the
Employer.
(q) "Normal Retirement Age" means age 62.
(r) "Normal Retirement Date" means the last day of the month coincident
with or next following the date the Participant attains Normal
Retirement Age.
(s) "Participant" means a person who has satisfied the requirements of
Sections 3.1 and 3.2.
(t) "Plan Year" means the calendar year; provided the initial Plan Year
means the period beginning October 1, 1993 and ending December 31,
1993.
(u) "Targeted Retirement Benefit" means with respect to each Participant
the amount determined under the formula set forth in Section 3.3.
(v) "Terminated for Cause" means an Employee's termination of employment
due to any one of the following:
(i) The Employee's felonious theft from the Employer, embezzlement of
Employer funds, or any other fraud or dishonesty in any dealings
with the Employer.
(ii) The Employee's acceptance of any bribe, kick-back or other item
of value from any person as consideration for acting or failing
to act on behalf of the Employer.
(iii) The Employee fails or refuses to competently perform the duties
that the Employee is reasonably expected to perform, occasioned
other than by reason of the Total Disability of the Employee, and
such failure or refusal is not cured within sixty (60) calendar
days after receipt of written notice from the Employer specifying
said failure or refusal, such notice being given pursuant to a
resolution adopted by the Board.
(iv) The Employee is convicted of any felony or crime involving moral
turpitude.
(w) Total Disability means that the Participant has been determined to
suffer from a Disability which entitles him to benefits under the long
term disability plan of the Employer in which the Participant
participates (or would be eligible to participate but for an election
not to do so), or if the Employer does not maintain any such plan,
means that the Participant has been determined to have been disabled
by the Social Security Administration as of his Employment Termination
Date.
(x) "Valuation Date" means the last day of each Plan Year and the date the
Supplemental Plan is terminated.
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(y) "Year of Service" means each twelve (12) consecutive month period
during which the Participant is a full-time Employee of the Employer,
commencing on the Employee's date of hire and each subsequent
anniversary of such date.
(z) "Late Retirement Date" means the earlier of (i) the last day of the
month coincident with or next following the date on which the
Participant terminates employment after his Normal Retirement Date, or
(ii) the last day of the Plan Year during which the Participant
attains age 70-1/2.
In addition, other terms are defined in Article III which are used in the
calculation of benefits.
2.2 Gender and Number. Except when otherwise indicated by the context,
words in the masculine gender shall include the feminine and neuter genders, the
plural shall include the singular, and the singular shall include the plural.
2.3 Employment Rights. Establishment of this Supplemental Plan shall not be
construed to give any Participant the right to be retained by the Employer or
the right to any benefits not specifically provided by this Supplemental Plan.
2.4 Severability. In the event any provision of this Supplemental Plan
shall be held invalid or illegal for any reason, any illegality or invalidity
shall not affect the remaining parts of this Supplemental Plan, but this
Supplemental Plan shall be construed and enforced as if the illegal or invalid
provision had never been inserted, and the Employer shall have the privilege and
opportunity to correct and remedy such questions of illegality or invalidity by
amendment as provided in this Supplemental Plan.
2.5 Applicable Law. This Plan is intended to be exempt from Title IV of
ERISA. This Plan shall be governed and construed in accordance with Title I of
ERISA (including the exclusion for plans of this type contained therein) and the
laws of the State of Illinois to the extent not preempted by ERISA. This
Supplemental Plan is also intended to comply with the requirements of Section
409A of the Code and shall be so interpreted and administered. To the maximum
extent possible, the provisions of this Supplemental Plan shall be construed in
such a manner that no amounts payable to a Participant are subject to the
additional tax and interest provided in Section 409A(a)(1)(B) or Section 409A(b)
of the Code.
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ARTICLE III. SUPPLEMENTAL PLAN BENEFITS
3.1 Eligibility for Participation. From time to time the Board, by
resolution, shall name the Employee or Employees who are eligible to participate
in the Supplemental Plan.
3.2 Participation. Any Employee shall become a Participant as of the date
the Board specifies that the Employee is eligible to participate in the
Supplemental Plan pursuant to Section 3.1.
3.3 Target Benefit.
(a) Targeted Retirement Benefit. The amount of a Participant's Targeted
Retirement Benefit shall equal the excess, if any, of: (i) 65% of the
Participant's Final Average Compensation (determined as of the
Valuation Date) multiplied by a fraction (not in excess of one), the
numerator of which equals the Participant's anticipated Years of
Service with the Employer beginning on the Participant's date of hire
by the Employer (or such other date as is specified for the
Participant in the Board resolution initially naming such Employee as
eligible to participate in this Supplemental Plan) and ending on his
Normal Retirement Date or, if later, the Valuation Date, and the
denominator of which is 12; over (ii) the Offset Amount as defined in
subsection (b).
(b) Offset Amount. A Participant's Offset Amount is (i) the value of the
Participant's accrued benefit under any qualified retirement plan
(existing or to be adopted) sponsored by the Employer attributable to
'employer contributions' within the meaning of Section 411(c)(1) of
the Code (other than employer contributions made pursuant to an
employee's election that meets the requirements of Section 401(k)(2)
of the Code), and (ii) 50% of the amount of the Participant's Social
Security retirement benefit. For purposes of determining a
Participant's Offset Amount under this subsection (b), the value of
each of the benefits described in the preceding sentence shall be
projected to the Participant's Normal Retirement Date or, if later,
the Valuation Date, and converted to a 50% joint and survivor annuity
commencing on the Participant's Normal Retirement Date or, if later,
the Valuation Date. The conversion, if any, shall utilize the
actuarial assumptions set forth in Section 3.5(d). The projection of
any defined contribution plan account balance shall be based upon the
value of the Participant's plan accounts on the Valuation Date with
earnings projected until the Participant's Normal Retirement Date or,
if later, the Valuation Date based on the interest rate set forth in
Section 3.5(a).
3.4 Allocation Formula.
(a) As of each Valuation Date that occurs coincident with or prior to a
Participant's Normal Retirement Date, the Account of a Participant
shall be credited with an amount which would be necessary to fund such
Participant's Targeted Retirement Benefit, determined as of each
Valuation Date, through level annual contributions. As of each
Valuation Date that occurs after a Participant's Normal
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Retirement Date but coincident with or prior to his Late Retirement
Date, the Account of each Participant shall be credited with an amount
which would be necessary to fund the difference between (i) the
Participant's Targeted Retirement Benefit determined as of the
Valuation Date and (ii) the Participant's Targeted Retirement Benefit
determined as of the immediately preceding Valuation Date; provided,
however that in no event shall the difference be less than zero. The
determination of the amount necessary to fund a Targeted Retirement
Benefit shall be based on (i) the individual level premium method, and
(ii) the actuarial assumptions set forth in Section 3.5. For a Plan
Year, a Participant's Account shall be credited in accordance with
this Section 3.4(a); provided, that the Participant is an Employee on
the last day of the Plan Year. The immediately preceding sentence
shall not apply for a Plan Year during which (i) the Supplemental Plan
is terminated, or (ii) a Participant has terminated employment on or
after attainment of Normal Retirement Age or due to death or Total
Disability.
(b) As of each Valuation Date, the Account of each Participant shall be
credited with interest at the rate set forth in Section 3.5 that has
accrued on the Account since the immediately preceding Valuation Date.
Each Plan Year, a Participant's Account shall be credited in
accordance with this Section 3.4(b) until the Plan Year during which
the Participant's benefits commence pursuant to Section 3.7, except as
otherwise provided.
3.5 Actuarial Assumptions. Actuarial assumptions used under this
Supplemental Plan shall be as follows:
(a) Post-retirement interest rate of 8.00% with post-retirement mortality
based on the 1983 Group Annuity Mortality Table.
(b) A pre-retirement interest rate of 8.00% and no pre-retirement
mortality.
(c) For purposes of determining the Offset in Section 3.3(b), the
projection of Social Security retirement benefits shall be based upon
the law as in effect on the Valuation Date, and shall assume (i) no
cost of living increases in Social Security retirement benefits, and
(ii) no increase in Participant Compensation (based on the
Participant's Compensation for the full calendar year ending on or
immediately prior to a Valuation Date) through the Participant's
Normal Retirement Date or, if later, the Valuation Date.
(d) For purposes of converting a Participant's benefits under a qualified
defined benefit plan as required under Section 3.3(b), the actuarial
assumptions under such plan shall be used.
(e) For purposes of accruing interest under Section 3.8(b)(ii), the rate
of interest as of a Valuation Date shall be the average annual rate of
interest charged on long-term debt (including the current portion) of
the Employer for the calendar year immediately preceding the Valuation
Date.
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3.6 Vesting.
(a) A Participant shall vest in his Account balance pursuant to the
following table:
If a Participant's The Participant's vested
Years of Service is percentage in his Account shall be
- ------------------- ----------------------------------
1 0
2 0
3 30
4 40
5 50
6 60
7 70
8 80
9 90
10 100
(b) Notwithstanding the vesting schedule specified in Section 3.6(a), a
Participant's vested percentage in his Account balance shall be 100%
upon his death, Total Disability or attainment of Normal Retirement
Age.
(c) Notwithstanding the vesting schedule specified in Section 3.6(a), a
Participant shall forfeit his entire Account balance if (i) he is
Terminated for Cause, or (ii) he is employed by a Competitor within
two years of his Employment Termination Date. If the Employer or the
Committee determines that a Participant has become employed by a
Competitor within two years from the Participant's Employment
Termination Date, the Employer or Committee shall send to the
Participant a written demand (the "Demand") for the Participant to
repay to the Employer any amounts paid to the Participant under this
Supplemental Plan. The Participant shall make such repayment within
thirty (30) calendar days after the date the Demand is mailed to the
Participant. The repayment shall be made by certified check, cashiers
check, wire transfer or such other method as required by the Employer.
The Demand must be mailed within one year from the date the
Participant started employment with the Competitor; otherwise such
Demand shall be without force and effect and the Participant shall not
be required to repay any amounts to the Employer under this subsection
(c). If a Participant fails to repay on a timely basis all or some
portion of the amount due the Employer under this subparagraph (c),
the Employer shall be entitled to receive from the Participant any
attorneys' fees and costs that it incurs in connection with the
collection of such amount.
3.7 Payment of Benefits. A Participant's benefit under this Supplemental
Plan shall be based on his vested Account balance and shall commence pursuant to
the rules specified in this Section 3.7 and Section 3.8.
(a) Termination of Employment. Except as otherwise provided below,
distribution of a Participant's benefit shall commence on the first
business day that is at least six
9
months after his Employment Termination Date. Such benefit shall be
paid in the form specified in Section 3.8.
(b) Election of Later Date. A Participant may elect to commence his
benefit on the later of the date specified in paragraph (a) or the day
the Participant attains a specified age. Such election must be made
not later than December 31, 2007, for a Participant who is a
Participant on such date, or within 30 days after the date on which
the Participant is first designated as eligible to participate
pursuant to Section 3.2 (provided that the Participant did not
previously participate in any nonaccount balance plan required to be
aggregated with the Plan pursuant to Code Section 409A). Any election
pursuant to this paragraph (a) shall be made in writing in accordance
with procedures established by the Committee, and shall be irrevocable
after the last day for making the election.
(c) Termination of Employment Due to Total Disability. Distribution of a
Participant's benefit who terminates employment by reason of Total
Disability shall commence as soon as administratively feasible, but in
no event more than 90 days, following the Participant's Disability
Retirement Date.
(d) Termination of Employment Due to Death. If a Participant dies prior to
termination of employment, or after termination of employment but
prior to the commencement date determined under paragraph (a) or (b),
distribution of benefits shall be made to the Participant's
Beneficiary as soon as administratively feasible, but in no event more
than 90 days, following the date of the Participant's death.
(e) Nondeductible Payments. If the Employer reasonably anticipates that
any payment to a Participant for a taxable year of the Employer would
not be deductible by the Employer solely by reason of the limitation
under Section 162(m) of the Code, the Employer shall limit the benefit
to the amount which is deductible by the Employer. The amount by which
the Participant's benefit is reduced shall be retained in the
Participant's Account shall be distributed to the Participant or his
or her Beneficiary (in the event of the Participant's death) in the
first calendar year in which the Employer reasonably anticipates that
the deductibility of such distribution will not be limited by Section
162(m) or, if earlier, during the period that commences on the day
that is specified in paragraph (a) or (b) and ends on the later of the
last day of the year in which the day specified in paragraph (a) or
(b) occurs or the 15th day of the third month following the day
specified in paragraph (a) or (b); provided that all other
distributions of deferred compensation the deductibility of which
would also be limited by Section 162(m) are also deferred.
(f) Inclusion in Income. Anything else contained herein to the contrary
notwithstanding, if any portion of a Participant's Account is included
in his taxable income by reason of Section 409A of the Code, the
portion so included shall be distributed to him as soon as
administratively feasible."
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3.8 Forms of Distribution. A Participant's benefit payment under this
Supplemental Plan shall be based on the value of the Participant's vested
Account balance, determined as of the Valuation Date immediately preceding the
date benefit payments commence. The conversion of a benefit payment to an
annuity form shall be based on the actuarial assumptions set forth in Section
3.5. A Participant's benefit shall automatically be paid in the normal form
specified in paragraph (a) below, unless the Participant elects an optional form
of payment specified in paragraph (b) or (c) below.
(a) Normal Form of Payment. A Participant's benefit shall be paid in a
lump sum equal to the Participant's vested Account balance unless the
Participant elects to receive an optional form of payment as provided
in paragraph (b). Such election must be made not later than December
31, 2007, for a Participant who is a Participant on such date, or
within 30 days after the date on which the Participant is first
designated as eligible to participate pursuant to Section 3.2
(provided that the Participant did not previously participate in any
nonaccount balance plan required to be aggregated with the Plan
pursuant to Code Section 409A). Notwithstanding the foregoing, a
Participant who has elected payment in the form of a life annuity may
elect a different form of life annuity that is actuarially equivalent
(but not any other form of payment) at any time until payment
commences. Any election pursuant to this paragraph (a) shall be made
in writing in accordance with procedures established by the Committee,
and shall be irrevocable after the last day for making the election.
(b) Optional Forms of Payment. In lieu of the normal form of benefit, a
Participant may elect one of the following optional forms of benefit:
(i) For a Participant who is married on the date his benefits start,
a monthly benefit payable for the lifetime of the Participant and
upon the Participant's death a monthly benefit equal to fifty
percent (50%) of the Participant's monthly benefit payable to the
Participant's surviving spouse for the spouse's lifetime.
(ii) A monthly benefit payable for the lifetime of the Participant,
with no benefits payable after the death of the Participant.
(iii) A monthly benefit payable for the lifetime of the Participant
with a guaranteed payment period of up to 120 months (as selected
by the Participant). If a Participant dies prior to the end of
the guaranteed payment period, the monthly benefit for the
remaining portion of such period shall be paid to the
Participant's designated Beneficiary with no benefits payable
after the end of such period. If a Participant dies after the end
of the guaranteed payment period, no monthly benefit shall be
paid thereafter. As of each Valuation Date occurring during the
guaranteed payment period, the Account of such Participant shall
be credited with interest at the rate set forth in Section 3.5(e)
that has accrued since the immediately preceding Valuation Date
(or, if occurring at a later date, since the date benefit
payments commenced) if the payment period is less
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than 48 months. If the guaranteed payment period is in excess of
47 months, the Account of such Participant shall be credited with
interest that has accrued since the immediately preceding
Valuation Date (or, if occurring at a later date, since the date
benefit payments commenced) at the greater of (x) the rate set
forth in Section 3.5(e) plus two percentage points, or (y) the
rate set forth in Section 3.5(b). The Participant's monthly
benefit payment shall be adjusted on each Valuation Date
occurring during the guaranteed payment period to reflect changes
in the Participant's Account due to the accrual of interest.
(c) Payment on Death. Payment to a Participant's Beneficiary pursuant to
Section 3.7(c) shall be paid in a lump sum, unless the Participant
elects payment in accordance with paragraph (b)(ii) or (b)(iii)
(substituting the life of the Beneficiary for that of the
Participant). The form of payment to the Beneficiary need not be the
same as the form of payment to the Participant. Election of a form of
payment to the Beneficiary may be made either at the time described in
paragraph (a) or at least one year prior to the Participant's death,
and any election made after the time specified in paragraph (a) shall
be null and void if the Participant dies within one year after making
the election.
3.9 Beneficiary Designation. The Participant shall have the right, at any
time, to submit to the Employer a written designation of a Beneficiary to whom
payment of the Participant's benefit under the Plan shall be made in the event
of the Participant's death prior to complete distribution of the Participant's
benefit in accordance with the provisions hereunder. The designation of a
Beneficiary shall be made at such time and in such manner as the Committee may
require.
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ARTICLE IV. GENERAL PROVISIONS
4.1 Action by the Employer. Any action required of or permitted by the
Employer under this Supplemental Plan shall be by resolution of the Board or any
person or persons authorized by resolution of the Board, including, but not
limited to, the Committee.
4.2 Administration. This Supplemental Plan shall be administered by the
Committee. The Committee shall have, to the extent appropriate, the same powers,
rights, duties, and obligations with respect to this Supplemental Plan as it
would have if it were charged with the duties of the Plan Administrator of any
retirement plan qualified under Section 401(a) of the Code. The Committee is
specifically granted the authority to interpret, in its sole discretion, all
terms and provisions of this Supplemental Plan.
4.3 Expenses. The expenses of administering this Supplemental Plan shall be
borne by the Employer.
4.4 Indemnification and Exculpation. The members of the Committee, its
agents and officers, directors and employees of the Employer shall be
indemnified and held harmless by the Employer against and from any and all loss,
cost, liability, or expense that may be imposed upon or reasonably incurred by
them in connection with or resulting from any claim, action, suit, or proceeding
to which they may be party or in which they may be involved by reason of any
action taken or failure to act under this Supplemental Plan and against and from
any and all amounts paid by them in settlement (with the Employer's written
approval) or paid by them in satisfaction of a judgment in any such action,
suit, or proceeding. The foregoing provision shall not be applicable to any
person if the loss, cost, liability, or expense is due to such person's gross
negligence or willful misconduct. The rights of indemnification contained in
this Section 4.4 are in addition to and in no way affect any rights to
indemnification otherwise provided under the Employer's by-laws.
4.5 Funding. All benefits paid under this Plan shall be paid from the
general assets of the Employer subject to Section 4.6. Such amounts shall be
reflected on the accounting records of the Employer but shall not be construed
to create or require the creation of a trust, custodial, or escrow account. Any
amounts credited to a Participant's Account under the Plan and any earnings
thereon shall remain the property of the Employer. To the extent that any person
acquires a right to receive payments under the Plan, such right shall be no
greater than the right of any unsecured general creditor of the Employer.
Nothing contained in this Plan, and no action taken pursuant to its provisions,
shall create a trust or fiduciary relationship of any kind between the Employer
and an Employee, his Beneficiary, or any other person.
4.6 Change in Control.
(a) Contemporaneous with the execution of this Supplemental Plan, the
Employer shall establish and execute an irrevocable grantor trust
("Rabbi Trust") within the meaning of Sections 671 through 679 of the
Code with corpus and income of the Rabbi Trust to be treated as assets
and income, respectively, of the Employer for purposes of federal,
state and local income tax laws. The Rabbi Trust shall be executed on
behalf of the Employer by an authorized officer of the Employer and
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on behalf of the trustee of the Rabbi Trust by an authorized officer
of the trustee (the "Trustee"). The Trustee shall be selected by the
Board and shall be a financial institution with assets of at least
$500,000,000 and with offices located within the United States. At the
time of its execution, the Employer shall initially contribute to the
Rabbi Trust the amount of $1,000. The Rabbi Trust shall be a means of
segregating and accumulating funds to be used to pay benefits pursuant
to the terms of the Supplemental Plan and no part of the assets of the
Rabbi Trust shall be recoverable by the Employer until all benefits
payable under the Plan have been paid to Participants and
Beneficiaries; provided, however, that the assets of the Rabbi Trust
shall be subject at all times to the claims of the Employer's
creditors. The Employer shall be relieved of any obligation to pay any
benefits under this Supplemental Plan to the extent that obligation
has been discharged through payments made under the Rabbi Trust.
Except as otherwise provided in this Section 4.6, the Employer shall
be under no obligation to contribute funds to the Rabbi Trust.
(b) Within one business day of a Change in Control, the Employer shall
wire transfer funds to the Trustee in an amount equal to the aggregate
value of all Participants' vested Account balances determined as of
the Valuation Date immediately preceding or coincident with such
Change in Control.
(c) Anything else contained herein to the contrary notwithstanding, (1) no
transfer shall be made to the Rabbi Trust (and no assets of the
Employer shall otherwise be restricted for the payment of benefits
under the Supplemental Plan, whether or not such assets are subject to
the claims or creditors) if such transfer would be considered to be
made in connection with a change in the Employer's financial health
within the meaning of Section 409A(b)(2) of the Code, and (2) no
transfer shall be made to the Rabbi Trust (and no assets of the
Employer shall otherwise be set aside or reserved) for payment of
benefits to a Participant who is either a covered employee as defined
in Section 162(m)(3) of the Code, or subject to Section 16(a) of the
Securities Exchange Act of 1934, during any restricted period with
respect to any defined benefit pension plan as defined in Section
409A(b)(3) of the Code.
4.7 Interests not Transferable. The interests of the Participants and their
beneficiaries under this Supplemental Plan are not subject to the claims of
their creditors and may not be voluntarily or involuntarily transferred,
assigned, alienated, or encumbered.
4.8 Cessation of Business. In the event that the Employer is liquidated in
a corporate dissolution taxed under Section 331 of the Code, or the dissolution
of the Supplemental Plan is approved by a bankruptcy court pursuant to Section
503(b)(1)(A) of the U.S. Bankruptcy Code, the Supplemental Plan shall be
dissolved as soon as possible but not later than 12 months after such corporate
dissolution or court approval, and all Participant's Accounts shall be fully
vested and distributed to them in a lump sum as soon as administratively
feasible after the date of dissolution.
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4.9 Effect on Other Benefit Plans. Amounts credited or paid under this
Supplemental Plan shall not be considered to be compensation for the purposes of
calculating benefits under any other employee benefit plans maintained by the
Employer. Notwithstanding the foregoing, the treatment of such amounts under any
other employee benefit plan or other compensation arrangement may be determined
pursuant to the provisions of such plan.
4.10 Claims and Appeals Procedure. Each person asserting a right to
benefits under the Supplemental Plan (the "Applicant") must submit a written
claim for benefits to the Employer. Such claim shall be filed not more than one
year after the Applicant knows, or with the exercise of reasonable diligence
would know, of the basis for the claim. A formal claim shall not be required for
the distribution of a Participant's Account in the ordinary course of business,
but in any case a claim that relates to a dispute over the amount of a
distribution shall be filed not more than one year after the distribution is
paid.
If a claim for benefits by the Applicant is denied, in whole or in part,
the Employer, shall furnish the Applicant within 90 days after receipt of such
claim, a written notice which specifies the reason for the denial, refers to the
pertinent provisions of the Supplemental Plan on which the denial is based,
describes any additional material or information necessary for properly
completing the claim and explains why such material or information is necessary,
and explains the claim review procedures of this Section 4.10. Such notice will
further describe that the Applicant has a right to bring a civil action under
Section 502 of ERISA if his claim is denied after an appeal and review, subject
to Section 4.11. The 90-day period may be extended by up to an additional 90
days if required by special circumstances, in which event the Applicant shall be
notified in writing by the end of the initial 90-day period of the reason for
the extension and an estimate of when the claim will be processed.
Any Applicant whose claim is denied under the provisions described above
may request a review of the denied claim by written request to the Committee
within 60 days after receiving notice of the denial. If such a request is made,
the Committee shall make a full and fair review of the denial of the claim and
shall make a decision not later than 60 days after receipt of the request,
unless special circumstances (such as the need to hold a hearing) require an
extension of time, in which case a decision shall be made as soon as possible
but not later than 120 days after receipt of the request for review, and written
notice of the reason for the extension and an estimate of when the review will
be complete shall be given to the Applicant before the commencement of the
extension. The decision on review shall be in writing and shall include specific
reasons for the decision and specific references to the pertinent provisions of
the Supplemental Plan on which the decision is based. Such notice will further
describe that the Applicant has a right to bring a civil action under Section
502 of ERISA, subject to Section 4.11.
No person entitled to benefits under the Supplemental Plan shall have any
right to seek review of a denial of benefits, or to bring any action to enforce
a claim for benefits, in any court or administrative agency (including any
arbitration pursuant to Section 4.11) prior to his filing a claim for benefits
and exhausting all of his rights under this Section 4.10, or more than 180 days
after he receives the Committee's decision on review of the denial of his claim.
Although not required to do so, an Applicant, or his representative, may choose
to state the reason or reasons he believes he is entitled to benefits, and may
choose to submit written evidence, during the initial claim process or review of
claim denial process. However, failure to state any such reason
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or submit such evidence during the initial claim process or review of claim
denial process, shall permanently bar the Applicant, and his successors in
interest, from raising such reason or submitting such evidence in any forum at
any later date. An Applicant whose claim is denied initially or on review is
entitled to receive, on request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to such claim
for benefits.
The provisions of this Section 4.10 are intended to comply with the
requirements of Department of Labor Regulations Section 2560.503-1 and shall be
so construed. Consistent with such requirements, each Claimant shall have the
right to be represented by a qualified representative (who need not be an
attorney) and to receive upon written request copies of all documents, records
or other information that are relevant to his claim as defined in Section
2560.503-1(m)(8).
4.11 Arbitration. Subject to Section 4.10, either a Participant or the
Employer shall have the right to elect (in lieu of litigation) within the time
period specified in this Section 4.11 to have any dispute or controversy arising
under or in connection with the Plan settled by arbitration, conducted before a
panel composed of three arbitrators (the "Arbitration Panel"), the Participant
and Employer each selecting one arbitrator and the Chicago office of the
American Arbitration Association ("AAA") selecting one arbitrator with such
Arbitration Panel sitting in a location selected by the Employer within 25 miles
from the location of the Employer's principal place of business. A party must
give written notice (the "Arbitration Notice") to all affected parties and the
Committee of its election to arbitrate a dispute arising under the Supplemental
Plan. The Arbitration Notice shall set forth in detail the party's position as
to the disputed matter or matters. The Arbitration Notice may be provided to the
other party and the Committee at any time; provided, however that the
Arbitration Notice must be provided upon the earlier of (i) sixty (60) calendar
days from the date any party hereunder has filed suit in any court of competent
jurisdiction regarding the disputed matter or matters set forth in the
Arbitration Notice, or (ii) the date the statute of limitations has elapsed for
filing a suit in any court of competent jurisdiction with respect to the
disputed matter or matters set forth in the Arbitration Notice. The Participant
and Employer shall within five (5) calendar days of the date the Arbitration
Notice is given provide written notice to the Committee of the individual
approved by such party to serve as an arbitrator. The Committee shall within
five (5) calendar days of the date the Arbitration Notice is given request that
the AAA select an individual to serve as the third arbitrator. Upon receipt of
the name of the third arbitrator selected by AAA, the Committee shall promptly
deliver to the parties notice of the selection of the three arbitrators to serve
on the Arbitration Panel together with each arbitrator's name and address. The
determination of a majority of the three arbitrators serving on the Arbitration
Panel shall be final and binding upon the parties. To the extent not otherwise
inconsistent with the express provisions of this Plan, the rules of the AAA then
in effect shall apply unless the Participant and the Employer otherwise agree.
Judgment may be entered on the award of the Arbitration Panel in any court
having jurisdiction. The Arbitration Panel, in its sole discretion, may award
attorneys' fees and costs to the party in whose favor the Arbitration Panel
rules.
4.12 Notice. Any notices, requests, demands, elections, or other
communications provided by this Plan shall be sufficient if in writing and sent
by registered or certified mail to the Participant at the last address he has
filed in writing with the Employer, or, in the case of the Employer, at its
principal offices.
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4.13 Tax Liability. The Employer may withhold from any payment of benefits
hereunder any taxes required to be withheld and such sum as the Employer may
reasonably estimate to be necessary to cover any taxes for which the Employer
may be liable to withhold on behalf of a Participant and which may be assessed
with regard to such payment.
4.14 Successors. Any successor to the Employer may adopt this Plan and, in
such event, shall be subject to all of the provisions of the Supplemental Plan
to the same extent as the Employer. As used in this Supplemental Plan, the term
"successor" shall mean any person, firm, corporation, or business entity which
at any time, whether by merger, purchase, or otherwise, acquires all or
essentially all of the assets or business of the Employer.
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ARTICLE V. AMENDMENT AND TERMINATION
5.1 Amendment. The Employer reserves the right to amend this Supplemental
Plan from time to time, except as follows:
(a) No amendment to the Supplemental Plan shall have the effect of
reducing or eliminating any benefits payable or accrued but not yet
payable under the terms of this Supplemental Plan as of the date of
the amendment.
(b) No amendments may be made to Sections 2.1(d) and 4.6 with respect to a
Participant without the express written approval of such Participant.
(c) Article II and Article III may be amended at any time provided,
however, that such amendment shall not take effect until twelve months
after its adoption if less than 75% of the Participants consent in
writing to the amendment. This paragraph (c) shall not apply to
Section 3.5 which may be amended at any time by the Employer.
(d) No amendment by the Employer or any successor shall change the
provisions of Sections 5.1(a), 5.1(b), 5.1(c) and this 5.1(d) hereof.
5.2 Termination. Upon termination, the Accounts of all Participants shall
be fully vested, and shall be paid upon each Participant's Employment
Termination Date in accordance with Article III, unless the Committee determines
that the Supplemental Plan may be amended in connection with such termination to
provide for an immediate distribution of all Participants' Accounts consistently
with Section 409A of the Code.
IN WITNESS WHEREOF, Littelfuse, Inc. has caused this instrument to be
executed by its duly authorized officers pursuant to a resolution of the Board
of Directors, this 26th day of October, 2007.
LITTELFUSE, INC.
By /s/ Gordon Hunter
-------------------------------------
Chairman of the Board of Directors
ATTEST:
By /s/ Mary S. Muchoney
----------------------------------
Corporate Secretary
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