1
Exhibit 10.4
THE GEON COMPANY
SECTION 401(a)(17)
BENEFIT RESTORATION PLAN
2
TABLE OF CONTENTS
SECTION PAGE
I DEFINITIONS 2
II ELIGIBILITY TO PARTICIPATE 7
III BENEFIT RESTORATION UNDER THE PENSION PLAN 8
IV BENEFIT RESTORATION UNDER THE SAVINGS PLAN 9
V PAYMENT OF BENEFITS 11
VI LIMITATIONS ON BOTH PENSION AND SAVINGS PLANS 14
VII MISCELLANEOUS 15
VIII EFFECTIVE DATE 21
-i-
3
PREAMBLE
The primary purpose of this Plan is to provide deferred compensation to
employees who are determined by the Company to be management or highly
compensated employees. This Plan should be read and construed so as to
accomplish the foregoing objective. This Plan is intended to meet the
requirements of Section 201(2) of the Employee Retirement Income Security Act of
1974, as amended.
4
SECTION I
DEFINITIONS
1.1 Affiliate means any corporation, partnership or other organization
which, during any period of employment of a Participant, was at least
50% controlled by the Company or an affiliate of the Company.
1.2 Annual Addition means, with respect to the Savings Plan, the sum of
employer contributions, employee contributions and forfeitures, as
defined in Section 415(c)(2) of the Code, including the exceptions
described in such Section.
1.3 Basic Pension Plan Benefit means the pension benefit payable from the
Pension Plan to a Participant, computed without regard to the benefit
limitations imposed on the Pension Plan by Sections 415 and 401(a)(17)
of the Code, and, in the case of an MIP/SIP Limited Participant,
computed taking into account the MIP/SIP Limited Participant's MIP/SIP
Limited Compensation as eligible earnings under the Pension Plan.
1.4 Basic Savings Plan Match means the amount of Company matching
contribution which would be credited to the Participant under the
Savings Plan without regard to the limitations imposed on the Savings
Plan by Sections 415, 401(k), 401(m), and 401(a)(17) of the Code,
determined based on the Participant's Current
-2-
5
Maximum Participation Percentage Rate beginning on the date during each
Plan Year in which the Participant's continued ability to make Pre-Tax
Contributions or After-Tax Contributions is first limited by Section
401(a)(17) of the Code and continuing (at the applicable rate) until
the earlier of the last day of such Plan Year or, if earlier, the
termination of the Participant's employment, and, in the case of an
MIP/SIP Limited Participant, treating the MIP/SIP Limited Participant's
MIP/SIP Limited Compensation as eligible earnings under the Savings
Plan.
1.5 Committee means the Compensation Committee of the Board of Directors of
the Company, or any person or entity to whom the Compensation Committee
of the Board of Directors of the Company has delegated any authority or
responsibility under the Plan.
1.6 Code means the Internal Revenue Code of 1986, as amended.
1.7 Company means The Geon Company.
1.8 Current Maximum Participation Percentage Rate means the maximum
aggregate percentage of Earnings which the Participant could elect as
Pre-Tax Contributions and/or After-Tax Contributions for the applicable
portion of the Plan Year under the provisions of the Savings Plan,
determined without regard
-3-
6
to any provisions of the Savings Plan in respect of Sections
401(a)(17), 401(k), 401(m), and 415 of the Code.
1.9 MIP/SIP Limited Compensation means the portion of an award under the
Company's Management Incentive Program and/or Sales Incentive Program,
as applicable, of an MIP/SIP Limited Participant that, after January
31, 1995, would have been paid in cash if the Company's Management
Incentive Program and/or Sales Incentive Program, as applicable, did
not provide for payment of all or a portion of the awards thereunder in
a form other than cash and any portion of an MIP/SIP Limited
Participant's award payable in cash under the Company's Management
Incentive Plan and/or Sales Incentive Program, as applicable, the
receipt of which is deferred at the election of the MIP/SIP Limited
Participant; provided, however, that in no event shall MIP/SIP Limited
Compensation include any premium related to payment of an award in a
form other than cash under the Company's Management Incentive Plan
and/or Sales Incentive Program nor any amount that is eligible earnings
under the Pension Plan and/or Savings Plan; and, provided, however,
that any portion of an MIP/SIP Limited Participant's award payable in
cash under the Company's Management Incentive Plan and/or Sales
Incentive Program, as applicable, that is deferred at the election of
the Participant shall be MIP/SIP Limited Compensation only for the
period in which it would have been received but for the deferral.
-4-
7
1.10 MIP/SIP Limited Participant means a Participant whose award under the
Company's Management Incentive Program and/or Sales Incentive Program,
as applicable, is mandatorily paid in a form other than cash at a
percentage that exceeds twenty percent (20%) of the award (excluding
any premium).
1.11 Participant means any employee or former employee who is receiving any
of the benefits provided by this Plan.
1.12 Plan means The Geon Company Section 401(a)(17) Benefit Restoration
Plan.
1.13 Plan Account means a book reserve account maintained under the Plan on
behalf of a Participant, to which the amounts to which such Participant
is entitled under Articles 4.1, 4.2, and 4.3 are credited.
1.14 Pension Plan means The Geon Pension Plan.
1.15 Pension Plan Benefit means the pension benefit payable from the Pension
Plan to a Participant (taking into account and including the
limitations contained in Sections 415 and 401(a)(17) of the Code).
1.16 Savings Plan means The Geon Retirement Savings Plan.
-5-
8
1.17 Savings Plan Match means the amount of Company matching contribution
actually credited to the Participant under the Savings Plan for the
Plan Year.
1.18 Supplemental Restoration Benefit means an amount which is determined by
subtracting the Participant's Pension Plan Benefit from the
Participant's Basic Pension Plan Benefit.
1.19 Valuation Date means the last day on which the New York Stock Exchange
is open for trading occurring in the calendar month immediately
preceding the calendar month in which the Participant's employment
covered under the Plan terminates.
1.20 Words and phrases used herein with initial capital letters which are
defined in the Savings Plan or the Pension Plan shall have the
definitions given to them in such Plans.
-6-
9
SECTION II
ELIGIBILITY TO PARTICIPATE
2.1 All participants in the Pension Plan shall participate in this Plan
whenever their Basic Pension Plan Benefit exceeds the amount of their
Pension Plan Benefit. All employees eligible to participate in the
Savings Plan shall participate in this Plan whenever any part of their
Annual Addition would be unavailable due to the limitations imposed by
Section 401(a)(17) of the Code.
-7-
10
SECTION III
BENEFIT RESTORATION UNDER THE PENSION PLAN
3.1 The Company shall pay to each Participant in the Pension Plan who is
participating in this Plan a Supplemental Restoration Benefit. Such
Supplemental Restoration Benefit shall be paid in accordance with
Article 5.1.
-8-
11
SECTION IV
BENEFIT RESTORATION UNDER THE SAVINGS PLAN
4.1 The Company shall maintain a Plan Account for each Participant whose
Annual Additions to the Savings Plan have been restricted by the
limitations of Section 401(a)(17) of the Code. The Company shall credit
the Plan Account of such a Participant for a Plan Year with the
difference between the Basic Savings Plan Match and the Savings Plan
Match.
4.2 A Participant with respect to whom the limitation of Section 401(a)(17)
of the Code applicable under the Savings Plan has been reached may
elect to reduce his or her compensation in excess of such limitation at
a percentage rate of earnings elected by the Participant on a form
provided by the Company, but in no event more than 6% of the
Participant's Earnings under the Savings Plan in excess of the
limitation of Section 401(a)(17) of the Code, and have the amount by
which the Participant's compensation is reduced credited to the
Participant's Plan Account. Such election shall be made at such time
and in such manner as the Company shall require, but such election
shall be made prior to the date on which the compensation to which it
relates is earned and shall be irrevocable for the period to which it
relates.
-9-
12
4.3 The Plan Accounts hereunder will be credited on a monthly basis with
earnings: (1) for periods prior to January 1, 1995, and for periods
after February 28, 1997, at a rate equal to the monthly rate of
earnings paid under the Fixed Income Fund of the Savings Plan; and (2)
for periods after December 31, 1994 but prior to March 1, 1997, at a
rate equal to the monthly rate of earnings paid under the Fixed Income
Fund of the Savings Plan, rounded up to the next whole percent (if
applicable), for the last full calendar month of the Plan Year ending
most recently prior to the month for which the crediting is being done.
In the event that the Fixed Income Fund of the Savings Plan no longer
exists, the Company shall, in its sole discretion, establish an
alternate rate of return for the immediately preceding sentence, which
alternate rate of return shall be intended by the Company to provide a
rate of return comparable to that of the Fixed Income Fund.
Notwithstanding the foregoing provisions of this Article 4.3: The
Committee may establish rules and procedures whereunder a Participant
may elect that the Participant's Account be credited or debited with
earnings and losses equal to the earnings and losses on a specified
investment or specified investments other than the Fixed Income Fund of
the Savings Plan (or alternative rate of return, if applicable). Such
election shall be made at such time(s) and in such manner as the
Committee's rules and procedures shall require, shall be prospective
only, and shall be irrevocable with respect to the period to which it
relates.
-10-
13
SECTION V
PAYMENT OF BENEFITS
5.1 Pension. The Supplemental Restoration Benefit shall be payable in the
same form as elected under the Pension Plan and in accordance with and
subject to all of the terms and conditions applicable to the
Participant's benefits under the Pension Plan including the actuarial
equivalents of, as provided in the Pension Plan, the optional benefits
he or she has elected or is deemed to have elected.
5.2 Savings.
(a) The Company shall distribute in a lump sum to each Participant in
this Plan or his or her designated beneficiary under the Savings Plan,
upon the termination of employment of such Participant under
circumstances entitling him or her or such beneficiary to a
distribution of the Participant's interest in the Savings Plan, except
as provided below, an amount in cash equal to (i) the value of his or
her Plan Account attributable to the deemed matching contribution of
the Company, as provided in paragraph 4.1 herein, to the extent vested
determined in accordance with the terms of the Savings Plan, at the
time of termination of employment, valued as of the close of business
on the Valuation Date, and (ii) the value of his or her Plan Account
attributable to contributions made pursuant to an election under
Article 4.2, as of the close of business on the Valuation Date.
-11-
14
A Participant employed by a Successor Company may, subject to Committee
approval, be considered to have terminated employment with the Company
for purposes of this Article 5.2 only.
(b) Notwithstanding Article 5.2(a) hereof, with respect to employment
terminations occurring on and after November 1, 1996 and prior to
February 6, 1997, a Participant who is subject to the provisions of
Section 16 of the Securities Exchange Act of 1934, as amended (a
"Section 16 Insider") at the time of employment termination, and who
with respect to any portion of his or her Plan Account which, if not
held for six months, would subject the Participant to short-swing
liability under Section 16 of such Act, shall not be entitled to a
distribution under the Plan of any portion of such Participant's Plan
Account as to which the Participant has elected to be credited or
debited with earnings and losses equal to the earnings and losses on a
specified investment which derives its return from the value of the
equity securities of the Company (a "Company Equity Fund") until such
date that is six months and one day following the termination of such
Participant's employment under circumstances entitling him or her or
his or her designated beneficiary to a distribution of the
Participant's interest in the Savings Plan. Any amounts distributed in
accordance with this Article 5.2(b) shall be valued as of the close of
business on the last day on which the New York Stock Exchange is open
for trading occurring in the calendar month immediately preceding the
calendar month in which the Participant is
-12-
15
entitled to a distribution under this Article 5.2(b), rather than as of
the Valuation Date.
-13-
16
SECTION VI
LIMITATIONS ON BOTH PENSION AND SAVINGS PLANS
6.1 Where Section 415 of the Code places combined limits on both the
Pension Plan and the Savings Plan, the Savings Plan will be the primary
qualified plan.
-14-
17
SECTION VII
MISCELLANEOUS
7.1 Administration. The Committee shall have full discretionary authority
to administer the Plan, determine all questions arising in connection
with the Plan, interpret the provisions of the Plan, adopt procedural
rules, and employ and rely on such legal counsel, actuaries,
accountants and agents as it may deem advisable to assist in the
administration of the Plan. Decisions of the Committee shall be
conclusive and binding on all persons.
7.2 Termination. This Plan may be terminated at any time by the Board of
Directors of the Company, in which event the rights of Participants to
their accrued and vested Supplemental Restoration Benefits and to the
balances in their Plan Accounts established under this Plan (if any)
shall become nonforfeitable. If the Company shall terminate the Pension
Plan or the Savings Plan, any Supplemental Restoration Benefits or Plan
Accounts payable to the Participants in accordance with this Plan shall
be payable to them in accordance with all of the terms and conditions
applicable to employee benefits under the Pension Plan in the event of
its termination, as applicable, and, if applicable, the amounts to the
credit of Participants in their Plan Accounts shall be distributed to
such Participants as provided herein, but in accordance with any of the
terms and conditions of the
-15-
18
Savings Plan then applicable providing for earlier distribution, as
applicable. Notwithstanding the immediately preceding sentence, a
Participant who is subject to the provisions of Section 16 of the
Securities Exchange Act of 1934, as amended shall not be entitled to a
distribution under the Plan of any portion of such Participant's Plan
Account as to which the Participant has elected to be credited or
debited with earnings and losses equal to the earnings and losses on a
specified investment which derives its return from the value of the
equity securities of the Company until such time as is provided in
Article 5.2.
7.3 No Assignability. The right of an employee or any other person to a
benefit payment pursuant to this Plan shall not be assigned,
transferred, pledged or encumbered except by will or the laws of
descent and distribution.
7.4 Rights. Nothing in this Plan shall be construed as giving any employee
the right to be retained in the employ of the Company as an executive
or in any other capacity. The Company expressly reserves the right to
dismiss any employee at any time without regard to the effect which
such dismissal might have upon him or her under the Plan.
7.5 Amendment. This Plan may be amended at any time by or pursuant to
action of the Committee, except that no such amendment shall: (1)
deprive any Participant of his or her Supplemental Restoration Benefit
accrued at the time of such
-16-
19
amendment; (2) reduce the amount then credited to a Participant's Plan
Account (if any); (3) if approved or adopted after August 1, 1996,
amend the Plan in any other manner that would not be permitted under
Section 411(d)(6) of the Internal Revenue Code of 1986, as in effect on
August 1, 1996, or the regulations thereunder as in effect on August 1,
1996, but not including any regulation in respect of Section 204(h) of
the Employee Retirement Income Security Act of 1974, as amended (if the
Plan were a plan subject to Section 411(d)(6) of the Internal Revenue
Code of 1986, as in effect on August 1, 1996), except to the extent
that a Participant who would be affected by the amendment consents in
writing thereto; or (4) if approved or adopted after August 1, 1996,
change the method of crediting hypothetical earnings (or losses) under
Article 4.3 of the Plan to a method that would not be permissible under
a plan qualified under Section 401(a) of the Internal Revenue Code of
1986, as in effect on August 1, 1996, except that the provisions of
Article 4.3 of the Plan as in effect prior to August 1, 1996 and any
provisions substantially similar to the provisions of Article 4.3 of
the Plan as in effect on August 1, 1996 shall be deemed a method or
methods permissible under Section 401(a) of the Internal Revenue Code
of 1986, as in effect on August 1, 1996, and that a provision shall not
be deemed impermissible under a plan qualified under Section 401(a) of
the Internal Revenue Code of 1986, as in effect on August 1, 1996,
because the provision credits hypothetical (as opposed to actual)
earnings (or losses), and except to the
-17-
20
extent that a Participant who would be affected by the amendment
consents in writing thereto.
7.6 Funding. Benefits payable under this Plan shall not be funded and shall
be paid out of the general funds of the Company. The Company shall not
be required to segregate any assets with respect to this Plan. Nothing
contained in this Plan shall create or be construed to create a trust
of any kind, or a fiduciary relationship between the Company and any
employee, former employee or any designated beneficiary of any
Participant or any other person. Any amounts credited to a Participant
under the provisions of this Plan shall continue for all purposes to be
part of the general funds of the Company, and no person other than the
Company shall by virtue of the provisions of this Plan have any
interest in such funds. No person shall have any property interest
whatsoever in any specific assets of the Company by reason of the Plan.
Any right to receive payments pursuant to the Plan shall be no greater
than the right of any unsecured creditor of the Company.
7.7 Benefit Claims and Appeal Procedure. The Committee shall have full
discretionary authority to make all determinations as to the right of
any person to a Supplemental Restoration Benefit. The Committee shall
have full discretionary authority to make all determinations as to the
right of any person to the amounts described in Articles 4.1, 4.2, and
4.3.
-18-
21
Any Participant or beneficiary, or a duly authorized representative
thereof whose claim for a benefit made pursuant to the Plan is denied,
may request the Committee to review such denial. Such request must be
in writing and must be made within 60 days after receipt of the written
notice that his or her claim has been denied. Participants or
beneficiaries making such a request may review pertinent documents and
may submit issues and comments in writing. Upon receipt of the written
request, the Committee shall render a decision on the request within 60
days.
The Committee shall have full discretionary authority to make a
determination on any matter relating to the Plan on which it is asked
to make a determination pursuant to the foregoing procedures. The
decision of the Committee shall be final, shall be provided in writing,
and shall include specific reasons for the decision, written in a
manner calculated to be understood by the person making the claim and
with specific references to the pertinent provisions of the Plan on
which the decision is based.
7.8 Continuation of Portion of Goodrich Plan. The Plan shall provide all
payments in respect of similar benefits provided for under a similar
plan (the "Goodrich Plan") of The B.F. Goodrich Company ("Goodrich")
owed after April 29, 1993 to those persons who were last employed by
Goodrich in the Geon Vinyl Division and those employees who were last
employed by Goodrich in a
-19-
22
department which became a part of the Geon Vinyl Division when the Geon
Vinyl Division was formed, who were receiving such benefits under the
Goodrich Plan as of April 29, 1993 or who would have commenced
receiving such benefits under the Goodrich Plan on or after April 29,
1993 because of events occurring prior to April 29, 1993, all in
accordance with the provisions of the Goodrich Plan (as in effect on
April 28, 1993 or such prior date(s) as applicable to the time(s) at
which such person accrued such benefits), if any. The Plan is a
continuation of the Goodrich Plan with respect to those employees of
the Company who were participants in the Goodrich Plan immediately
prior to April 29, 1993. Whenever in this Plan it is necessary to
calculate any compensation or earnings of any such Participant for any
period prior to April 29, 1993, or to use any period of service prior
to that date for any purpose in the Plan, such Participant's period of
service, compensation, and/or earnings taken into account under the
Goodrich Plan prior to April 29, 1993 shall be taken into account under
the Plan.
-20-
23
SECTION VIII
EFFECTIVE DATE
8.1 This Plan shall be construed, administered and enforced according to
applicable federal law, and to the extent not preempted thereby, the
laws of the State of Delaware.
8.2 This Plan was established and became effective April 29, 1993.
IN WITNESS WHEREOF, the undersigned has executed this document as of April 29,
1993.
THE GEON COMPANY
By:
----------------------------------
Name:
Title: