1
EXHIBIT 10 (vii)
BORDEN, INC.
EXECUTIVES EXCESS BENEFITS PLAN
Amended and Restated as of January 1, 1988
As amended through December 9, 1993
2
FOREWORD
Effective as of January l, 1976, Borden, Inc. adopted the Borden, Inc.
Executives Excess Benefits Plan (the "Plan") for the benefit of certain of its
executives. The Plan has been amended from time to time thereafter.
Effective as of January 1, 1988 the Plan has been further amended, and has been
restated as set forth herein.
It is intended that the Plan be an "excess benefits plan" as that term is
defined in Section 3(36) of the Employee Retirement Income Security Act of
1974.
The purpose of the Plan is to (a) provide retired participants and their joint
annuitants and beneficiaries under the Borden, Inc. Employees Retirement Income
Plan ("Borden ERIP") and the Borden, Inc. Retirement Savings Plan ("Borden
RSP") with the amount of company-provided benefits that are not provided under
the Borden ERIP and/or Borden RSP because such amounts exceed the limitations
imposed by Section 415 of the Internal Revenue Code, and (b) effective May 1,
1986 through December 31, 1987, provide for elective salary deferrals by
participants in the Borden RSP who are in the Core Management Group and whose
tax deferrals under the Borden RSP are limited by reason of limitations imposed
by Section 415 of the Internal Revenue Code.
Except to the extent otherwise indicated, and except to the extent otherwise
inappropriate, the Borden ERIP and the Borden RSP and the provisions thereof
are hereby incorporated by reference.
3
SECTION ONE
Definitions
-----------
1.1 Except to the extent otherwise indicated herein, and except to
the extent otherwise inappropriate in the context, the
definitions contained in Section Al of the Borden ERIP and
Section I of the Borden RSP are applicable under the Plan.
1.2 "Accrued ERIP Benefit" means the amount of retirement income
payable to or with respect to a participant on termination of
employment, or earlier date requiring payment under this Plan,
under the Borden ERIP.
1.3 "Accrued Excess Benefit" means the excess, if any, of (i) the
retirement income payable to or with respect to a participant
under the Borden ERIP which would have been accrued by the
participant had the limitation on benefits imposed by Section
C9 of the Borden ERIP not been applicable over (ii) the
participant's Accrued ERIP Benefit.
1.4 "Board of Directors" means the Board of Directors of the
Corporation.
1.5 "Borden ERIP" means the Borden, Inc. Employees Retirement
Income Plan.
1.6 "Borden RSP" means the Borden, Inc. Retirement Savings Plan.
1.7 "Core Management Group" means individuals employed by the
Corporation or a subsidiary thereof in a key executive or
managerial position who are designated as members of the Core
Management Group of the Corporation by the Chief Executive
Officer.
1.8 "Corporation" means Borden, Inc. and any successor to such
corporation by merger, purchase or otherwise.
1.9 "Plan" means the Borden, Inc. Executives Excess Benefits Plan
as from time to time in effect.
- 1 -
4
SECTION TWO
Participation
-------------
Participation in the Plan shall be limited to:
(a) those participants in the Borden ERIP and their joint
annuitants and beneficiaries who, as a result of the limits on
benefits that may be paid under the Borden ERIP (Section C9)
by reason of Section 415 of the Internal Revenue Code, receive
or will receive a lesser amount of retirement income under the
Borden ERIP than otherwise would be paid or payable in the
absence of such limitations,
(b) those participants and their beneficiaries in the Borden RSP
who, as a result of the limits on amounts that may be
contributed under the Borden RSP (Section 4.3) by reason of
Section 415 of the Internal Revenue Code, receive a smaller
matching Employer contribution under the Borden RSP with
respect to their actual contributions thereunder than
otherwise would be paid or payable in the absence of such
limitation, and
(c) those participants in the Borden RSP who are members of the
Core Management Group and who made salary deferral elections
for calendar years before 1988 for amounts which would have
been Tax Deferred Contributions under Section 3.2 of the
Borden RSP but for the limitations imposed by Section 4.3 of
the Borden RSP by reason of Section 415 of the Internal
Revenue Code, and the beneficiaries of such participants.
- 2 -
5
SECTION THREE
Amount of Excess Benefits and Excess Contributions
--------------------------------------------------
3.1 Excess Benefits
---------------
The aggregate amount, if any, of retirement income payable
under the Borden ERIP to a participant therein, or to his or
her joint annuitant or beneficiary, which is not paid under
the Borden ERIP on account of the limitations on benefits
imposed by Section C9 of the Borden ERIP, shall be termed an
"Excess Benefit" and shall be paid directly to such
participant, or to his or her joint annuitant or beneficiary,
as applicable, from the general assets of the Corporation in
accordance with Section 3.3.
3.2 Excess Contributions
--------------------
(a) Excess Company Contributions Account
The aggregate amount, if any, of matching Employer
contributions which would have been contributed with
respect to a participant pursuant to Section 4.1 of
the Borden RSP on account of the participant's actual
contributions thereto but for the limitation imposed
by Section 4.3 of the Borden RSP, together with
"deemed earnings" on such contributions, shall be
termed Excess Company Contributions and shall be paid
to the participant or his or her beneficiary, as
applicable, from the general assets of the
Corporation in accordance with Section 3.3. "Deemed
earnings" for Excess Company Contributions shall be
earnings at the rate of investment return on Fund A
under the Borden RSP. A bookkeeping account ("Excess
Company Contributions Account") shall be maintained
for each affected participant to record the amount of
such Excess Company Contributions.
(b) Excess Salary Deferrals Account
The aggregate of the amounts, if any, of salary
deferral elected by a participant in the RSP who is a
member of the Core Management Group pursuant to a
salary reduction agreement or agreements for amounts
which would otherwise have been Tax Deferred
Contributions on the participant's behalf pursuant to
Section 3.2 of the Borden RSP for calendar years
before 1988 but for the limitation imposed by Section
4.3 of the Borden RSP, together with "deemed
earnings" on such amounts, shall be termed Excess
Salary Deferrals and shall be paid to the participant
or his or her beneficiary, as applicable, from the
- 3 -
6
general assets of the Corporation in accordance
with Section 3.3. "Deemed earnings" for Excess
Salary Deferrals shall be earnings at the rate of
investment return on Fund A under the Borden RSP. A
bookkeeping account ("Excess Salary Deferrals
Account") shall be maintained for each affected
participant to record the amount of such Excess
Salary Deferrals.
(c) Excess Contributions Account
The term Excess Contributions Account shall
mean the sum of a participant's Excess Company
Contributions Account, if any, and that participant's
Salary Deferrals Account, if any.
3.3 General Provisions
------------------
(a) The Corporation shall make no provision for the
funding of any Excess Benefits or Excess
Contributions Accounts payable hereunder that (i)
would cause the Plan to be a funded plan for purposes
of section 404(a)(5) of the Internal Revenue Code of
1986, as amended ("Code"), or Title I of the Employee
Retirement Income Security Act of 1974 ("ERISA") or
(ii) would cause the Plan to be other than an
"unfunded and unsecured promise to pay money or other
property in the future" under Treasury Regulations
section 1.83-3(e); and shall have no obligation to
make any arrangement for the accumulation of funds to
pay any amounts under this Plan. Subject to the
restrictions of the preceding sentence and paragraph
(c) below, the Corporation, in its sole discretion,
may establish a grantor trust described in Treasury
Regulations sections 1.677(a)-1(d) to accumulate
funds to pay amounts under this Plan, provided that
the assets of the trust shall be required to be used
to satisfy the claims of the Corporation's general
creditors in the event of the Corporation's
bankruptcy or insolvency.
(b) In the event that the Corporation shall decide to
establish an advance accrual reserve on its books
against the future expense of Accrued Excess Benefit
payments or Excess Contributions Accounts, such
reserve shall not under any circumstances be deemed
to be an asset of this Plan but, at all times, shall
remain a part of the general assets of the
Corporation, subject to claims of the Corporation's
creditors.
(c) A person entitled to any amount under this Plan shall
be a general unsecured creditor of the Corporation
with respect to such amount. Furthermore:
(i) Subject to the provisions of subsections (e),
(f), (g) and (h)
- 4 -
7
below, a person entitled to an Accrued
Excess Benefit shall have a claim upon the
Corporation only to the extent of the monthly
payments thereof, if any, due up to and
including the then current month and shall
not have a claim against the Corporation for
any subsequent monthly payment unless and
until such payment shall become due and
payable; and
(ii) Subject to the provisions of subsections (e),
(f) and (h) below, a person entitled to
Excess Contributions shall have a claim upon
the Corporation only to the extent of the
Excess Contributions Account, and the amount
of such Account shall be paid to the
participant or beneficiary in the same manner
as the distribution of the participant's
accounts under the Borden RSP.
(d) In the event that the Borden ERIP shall be terminated
in accordance with Section C6 thereof, Accrued Excess
Benefits shall continue to be paid directly by the
Corporation but only to the same extent and for the
same duration as that part of the payee's benefit
from the Pension Fund of the Borden ERIP, which is
directly related to such Accrued Excess Benefit, is
continued to be provided by the assets of the Pension
Fund of the Borden ERIP; but such continued payment
of Accrued Excess Benefit shall still be subject to
the conditions specified in subsections (a), (b) and
(c) above.
In the event that the Borden RSP shall be terminated
in accordance with Section 13 thereof, Excess
Contributions Accounts shall be paid directly by the
Corporation in the same manner as the distribution of
the participant's accounts under the Borden RSP.
(e) Notwithstanding any other provision hereof, there
shall become immediately due and payable to or with
respect to a participant a lump sum equal to the
Excess Contributions Account plus the present
actuarial value (determined as hereinafter provided)
of the participant's Accrued Excess Benefit if: (i)
the Corporation refuses to make any payments due
hereunder to any participant, unless refusal to make
payment to a particular participant is based on facts
and circumstances with respect to such participant
which reasonably justifies such refusal, based on the
participant engaging in conduct harmful to the
interest of the Corporation; (ii) the Corporation
makes a general assignment for the benefit of
creditors; (iii) any proceedings under the Bankruptcy
Act are instituted by the Corporation, or if
instituted against the Corporation, is consented to
or acquiesced in by it or remains undismissed for 60
days; or (iv) a receiver or trustee in
- 5 -
8
bankruptcy is appointed for the Corporation.
In addition, in the event of any such proceeding by
or against the Corporation under the Bankruptcy Act,
or any such assignment, a participant or his or her
joint annuitant or beneficiary shall be entitled to
prove a claim for any unpaid portion of the benefit
provided hereunder and, if the claim is not
discharged in full in any such proceeding, or
assignment, it will survive any discharge of the
Corporation under any such proceeding or assignment.
The present actuarial value of the Accrued
Supplemental Benefit shall be calculated on the basis
of the 1976-80 Basic GAM Mortality Table and an
interest rate, compounded monthly, equal to the yield
of the most recently issued 30-year maturity U.S
Treasury issue as reported as of the business day on
which the valuation is performed as published in the
Midwest edition of the Wall Street Journal. If the
valuation is not performed on a business day, the
immediately preceding business day report shall be
used for the purposes of determining the interest
rate to be used in the valuation.
(f) In the event of the application of subsection (e)
above, the affected participants (or, in the case of
deceased participants, their joint annuitants and
beneficiaries) (the "Claimants") shall appoint a
single representative to pursue their respective
claims against the Corporation. Such representative
shall be a person or entity selected by, or agreed
upon, by Claimants with unpaid benefits under the
Plan equal to more than fifty percent (50%) of the
total amount of unpaid benefits under the Plan.
(g) A participant's Accrued Excess Benefit shall be paid
to the participant in the same form and at the same
time as the participant's Accrued ERIP Benefit.
(h) The participant's beneficiary or joint annuitant
under this Plan with respect to his or her Accrued
Excess Benefit shall be the person who is entitled to
benefit payments under the Borden ERIP on account of
the death of the participant.
The participant's beneficiary under this Plan with
respect to his or her Excess Contributions Account
shall be the person who is entitled to benefit
payments under the Borden RSP on account of the death
of the participant.
(i) A participant's benefit in the Plan shall be vested
to the same extent that his or her corresponding
benefit under the Borden ERIP or Borden RSP is
vested. The minimum benefit under the Plan shall
equal the value of the vested accrued benefit as of
December 31, 1993.
- 6 -
9
SECTION FOUR
Administration
--------------
4.1 Plan Administrator
------------------
The Corporation shall be the "administrator" of the Plan
within the meaning of ERISA.
4.2 Pension Committee
-----------------
Subject to the provisions of Section 4.1, the Pension
Committee of the Board of Directors shall be vested with the
general administration of the Plan. The Pension Committee
shall have the exclusive right to interpret the Plan. The
decisions, actions and records of the Pension Committee shall
be conclusive and binding upon the Corporation and all persons
having or claiming to have any right or interest in or under
the Plan.
The Pension Committee may delegate to such officers, employees
or departments of the Corporation such authority, duties, and
responsibilities of the Pension Committee as it, in its sole
discretion, considers necessary or appropriate for the proper
and efficient operation of the Plan, including, without
limitation, (i) interpretation of the Plan, (ii) approval and
payment of claims, and (iii) establishment of procedures for
administration of the Plan.
- 7 -
10
SECTION FIVE
Amendment and Termination
-------------------------
5.1 Amendment of the Plan
---------------------
Subject to the provisions of Section 5.3, the Plan may be
wholly or partially amended or otherwise modified at any time
by the Board of Directors.
5.2 Termination of the Plan
-----------------------
Subject to the provisions of Section 5.3, the Plan may be
terminated at any time by the Board of Directors.
5.3 No Impairment of benefits
-------------------------
Notwithstanding the provisions of Sections 5.1 and 5.2, no
amendment to or termination of the Plan shall impair any
rights to benefits which have accrued hereunder.
- 8 -
11
BORDEN, INC.
SPECIAL RETIREMENT WINDOW PROGRAM
The Borden, Inc. Special Retirement Window Program (SRWP) is a non-qualified
plan that has been designed and adopted to provide special benefits for certain
employees who have elected to retire under the Borden, Inc. Employees
Retirement Income Plan (ERIP) as of November 1, 1985. Such special benefits
and those employees to whom they will be paid are as specified on the schedule
and copies of employee communications attached hereto.
The SRWP is designed to operate in conjunction with the ERIP and, in connection
with the adoption of the SRWP, the ERIP was amended to provide special
provisions applicable to those employees who elected to retire under the SRWP.
3.3 General Provisions
------------------
(a) The Corporation shall make no provision for the
funding of any Excess Benefits or Excess
Contributions Accounts payable hereunder that (i)
would cause the Plan to be a funded plan for purposes
of section 404(a)(5) of the Internal Revenue Code of
1986, as amended ("Code"), or Title I of the Employee
Retirement Income Security Act of 1974 ("ERISA") or
(ii) would cause the Plan to be other than an
"unfunded and unsecured promise to pay money or other
property in the future" under Treasury Regulations
section 1.83-3(e); and shall have no obligation to
make any arrangement for the accumulation of funds to
pay any amounts under this Plan. Subject to the
restrictions of the preceding sentence and paragraph
(c) below, the Corporation, in its sole discretion,
may establish a grantor trust described in Treasury
Regulations sections 1.677(a)-1(d) to accumulate
funds to pay amounts under this Plan, provided that
the assets of the trust shall be required to be used
to satisfy the claims of the Corporation's general
creditors in the event of the Corporation's
bankruptcy or insolvency.
(c) A person entitled to any amount under this Plan shall
be a general unsecured creditor of the Corporation
with respect to such amount. Furthermore:
(i) Subject to the provisions of subsections (e),
(f), (g) and (h) below, a person entitled to
an Accrued Excess Benefit shall have a claim
upon the Corporation only to the extent of
the monthly payments thereof, if any, due up
to and including the then current month and
shall not have a claim against the
Corporation for any subsequent monthly
payment unless and
- 9 -
12
until such payment shall become due and
payable; and
(ii) Subject to the provisions of subsections (e),
(f) and (h) below, a person entitled to
Excess Contributions shall have a claim upon
the Corporation only to the extent of the
Excess Contributions Account, and the amount
of such Account shall be paid to the
participant or beneficiary in the same manner
as the distribution of the participant's
accounts under the Borden RSP.
- 10 -
13
Schedule 1
WHEREAS, Richard Walrack was employed in the
Corporate Group as a result of the acquisition of the Meadow Gold Dairies from
the Beatrice Companies on December 16, 1986; and
WHEREAS, Mr. Walrack also had a continuing employment
consulting agreement with the Beatrice Company dated June 26, 1984, which
continued from December 16, 1986 through August 31, 1989; and
WHEREAS, Mr. Walrack also had another employment
agreement dated December 3, 1985 with Beatrice U.S. Foods (Foods) which
guaranteed that his re-employment in the Dairy Unit of Foods would not affect
his status under the 1984 agreement; and
WHEREAS, Beatrice, in connection with the acquisition
of Meadow Gold Dairies, did not disclose to Borden the existence of either of
the above described agreements and transferred to the Company's pension plan an
amount woefully inadequate to fund Mr. Walrack's pension; and
WHEREAS, Mr. Walrack has asserted through legal
action pension rights from Beatrice:
NOW, THEREFORE, Mr. Richard Walrack is excluded as a
Participant of this Plan for any and all purposes.
- 11 -