EXHIBIT 10(b)
PARKER-HANNIFIN CORPORATION
SAVINGS RESTORATION PLAN
Parker-Hannifin Corporation, an Ohio corporation, (the "Company"),
established this Savings Restoration Plan (the "Plan"), effective October 1,
1994, for the purpose of attracting high quality executives and promoting in its
executives increased efficiency and an interest in the successful operation of
the Company by restoring some of the deferral opportunities and
employer-provided benefits that are lost under The Parker Retirement Savings
Plan due to legislative limits. The benefits provided under the Plan shall be
provided in consideration for services to be performed after the effective date
of the Plan, but prior to the executive's retirement. The Plan is hereby amended
and restated as of January 1, 2002, except as may be otherwise specifically set
forth hereinafter.
ARTICLE 1
Definitions
1.1 Administrator shall mean the Company or, if applicable, the
committee appointed by the Board of Directors of the Company to administer the
Plan pursuant to Article 13 of the Plan.
1.2 Annual Deferral shall mean the amount of Compensation which the
Participant elects to defer for a Plan Year pursuant to Articles 2 and 3 of the
Plan.
1.3 Beneficiary shall mean the person or persons or entity designated
as such in accordance with Article 14 of the Plan.
1.4 Change in Control means the occurrence of one of the following
events:
(i) any "person" (as such term is defined in Section 3(a)(9) of
the Securities Exchange Act of 1934 (the "Exchange Act") and as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company's then outstanding securities eligible to vote for the election
of the Board of Directors of the Company (the "Board") (the "Company Voting
Securities"); provided, however, that the event described in this paragraph
shall not be deemed to be a Change in Control by virtue of any of the following
situations: (A) an acquisition by the Company or any corporation or other entity
in which the Company has a direct or indirect ownership interest of 50% or more
of the total combined voting power of the then outstanding securities or
interests of such corporation or other entity (a "Subsidiary"); (B) an
acquisition by any employee
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benefit plan sponsored or maintained by the Company or any Subsidiary; (C) an
acquisition by any underwriter temporarily holding securities pursuant to an
offering of such securities; (D) a Non-Control Transaction (as defined in
paragraph (iii)); (E) as pertains to a Participant, any acquisition by the
Participant or any group of persons (within the meaning of Sections 13(d)(3) and
14(d)(2) of the Exchange Act) including the Participant (or any entity in which
the Participant or a group of persons including the Participant, directly or
indirectly, holds a majority of the voting power of such entity's outstanding
voting interests); or (F) the acquisition of Company Voting Securities from the
Company, if a majority of the Board approves a resolution providing expressly
that the acquisition pursuant to this clause (F) does not constitute a Change in
Control under this paragraph (i);
(ii) individuals who, at the beginning of any period of
twenty-four (24) consecutive months, constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority thereof;
provided, that (A) any person becoming a director subsequent to the beginning of
such twenty-four (24) month period, whose election, or nomination for election,
by the Company's shareholders was approved by a vote of at least two-thirds of
the directors comprising the Incumbent Board who are then on the Board (either
by a specific vote or by approval of the proxy statement of the Company in which
such person is named as a nominee for director, without objection to such
nomination) shall be, for purposes of this paragraph (ii), considered as though
such person were a member of the Incumbent Board; provided, however, that no
individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to directors or
any other actual or threatened solicitation of proxies or consents by or on
behalf of any person other than the Board shall be deemed to be a member of the
Incumbent Board;
(iii) the consummation of a merger, consolidation, share exchange
or similar form of corporate reorganization of the Company or any Subsidiary
that requires the approval of the Company's stockholders, whether for such
transaction or the issuance of securities in connection with the transaction or
otherwise (a "Business Combination"), unless (A) immediately following such
Business Combination: (1) more than 50% of the total voting power of the
corporation resulting from such Business Combination (the "Surviving
Corporation") or, if applicable, the ultimate parent corporation which directly
or indirectly has beneficial ownership of 100% of the voting securities eligible
to elect directors of the Surviving Corporation (the "Parent Corporation"), is
represented by Company Voting Securities that were outstanding immediately prior
to the Business Combination (or, if applicable, shares into which such Company
Voting Securities were converted pursuant to such Business Combination), and
such voting power among the holders thereof is in substantially the same
proportion as the voting power of such Company Voting Securities among the
holders thereof immediately prior to the Business Combination, (2) no person
(other than any employee benefit plan sponsored or maintained by the Surviving
Corporation or the Parent Corporation) is or becomes the beneficial owner,
directly or indirectly, of 20% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the Parent
Corporation (or, if
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there is no Parent Corporation, the Surviving Corporation), and (3) at least a
majority of the members of the board of directors of the Parent Corporation (or,
if there is no Parent Corporation, the Surviving Corporation), following the
Business Combination, were members of the Incumbent Board at the time of the
Board's approval of the execution of the initial agreement providing for such
Business Combination (a "Non-Control Transaction") or (B) the Business
Combination is effected by means of the acquisition of Company Voting Securities
from the Company, and a majority of the Board approves a resolution providing
expressly that such Business Combination does not constitute a Change in Control
under this paragraph (iii); or
(iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or the sale or other disposition of
all or substantially all of the assets of the Company and its Subsidiaries.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any person acquires beneficial ownership of more than
20% of the Company Voting Securities as a result of the acquisition of Company
Voting Securities by the Company which, by reducing the number of Company Voting
Securities outstanding, increases the percentage of shares beneficially owned by
such person; provided, that if a Change in Control would occur as a result of
such an acquisition by the Company (if not for the operation of this sentence),
and after the Company's acquisition such person becomes the beneficial owner of
additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, a
Change in Control shall then occur.
Notwithstanding anything in this Plan to the contrary, if the
Participant's employment is terminated prior to a Change in Control, and the
Participant reasonably demonstrates that such termination was at the request of
a third party who has indicated an intention or taken steps reasonably
calculated to effect a Change in Control (a "Third Party"), then for all
purposes of this Plan, the date immediately prior to the date of such
termination of employment shall be deemed to be the date of a Change in Control
for such Participant.
1.5 Compensation shall mean the sum of the Participant's base salary
and regular bonuses (including profit-sharing, RONA, and executive compensation,
but excluding payments under any long term incentive plan, volume incentive
plan, or other extraordinary bonus or incentive plan) for a Plan Year before
reductions for deferrals under the Plan, or the Executive Deferral Plan, or the
Savings Plan, or the Parker Select program. Compensation shall not include any
amounts payable on account of Termination of Employment, whether paid
periodically or in a lump sum.
1.6 Crediting Rate shall mean: (i) the amount described in Section
1.6.1 to the extent the Restoration Account balance represents either Annual
Deferrals under Article 3 or earnings previously credited on such deferrals
under Section 5.2; or (ii) the amount described in Section 1.6.2 to the extent
the Restoration Account balance represents either
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Matching Credits under Article 4 or interest previously credited on such
Matching Credits under Section 5.2:
1.6.1 Crediting Rate for Annual Deferrals shall mean any notional
gains or losses equal to those generated as if the Restoration Account
balance attributable to Annual Deferrals under Article 3 had been invested
in one or more of the investment portfolios designated as available by the
Administrator, less separate account fees and less applicable
administrative charges determined annually by the Administrator.
A Participant (or after his death, his Beneficiary) may elect to
allocate his Restoration Account among the available portfolios. The gains
or losses shall be credited based upon the daily unit values for the
portfolio(s) selected by the Participant. The rules and procedures for
allocating the Restoration Account balance among the portfolios shall be
determined by the Administrator. The Participant's allocation is solely for
the purpose of calculating the Crediting Rate. Notwithstanding the method
of calculating the Crediting Rate, the Company shall be under no obligation
to purchase any investments designated by the Participant.
1.6.2 Crediting Rate for Matching Credits shall mean any notional
gains or losses equal to those generated as if the Restoration Account
balance attributable to Matching Credits under Article 4 had been invested
in the Common Stock of the Company, including reinvestment of dividends.
The rules and procedures for determining the value of the Common Stock of
the Company shall be determined by the Administrator. The rules and
procedures for re-allocating the Restoration Account balance attributable
to the Matching Credits among the other portfolios offered under the Plan
shall be determined by the Administrator.
1.7 Disability shall mean any long term disability as defined under
the Company's long term disability plan. The Administrator, in its complete and
sole discretion, shall determine a Participant's Disability. The Administrator
may require that the Participant submit to an examination on an annual basis, at
the expense of the Company, by a competent physician or medical clinic selected
by the Administrator to confirm Disability. On the basis of such medical
evidence, the determination of the Administrator as to whether or not a
condition of Disability exists or continues shall be conclusive.
1.8 Early Retirement Date shall mean age 55 with ten or more years of
employment with the Company.
1.9 Eligible Executive shall mean a key employee of the Company or any
of its subsidiaries who: (i) is designated by the Administrator as eligible to
participate in the Plan (subject to the restriction in Sections 10.2, 11.2 and
12.2 of the Plan); and (ii) qualifies as a member of the "select group of
management or highly compensated employees" under ERISA.
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1.10 ERISA shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.11 Executive Deferral Plan shall mean the Parker-Hannifin
Corporation Executive Deferral Plan as it currently exists and as it may
subsequently be amended.
1.12 Financial Hardship shall mean an unexpected need for cash arising
from an illness, casualty loss, sudden financial reversal, or other such
unforeseeable occurrence as determined by the Administrator. Cash needs arising
from foreseeable events such as the purchase of a residence or education
expenses for children shall not, alone, be considered a Financial Hardship.
1.13 Matching Credit shall mean the Company's credit to the
Participant's Restoration Account under Article 4.
1.14 Normal Retirement Date shall mean the date on which a Participant
attains age 65.
1.15 Participant shall mean an Eligible Executive who has elected to
participate and has completed a Participation Agreement pursuant to Article 2 of
the Plan.
1.16 Participation Agreement shall mean the Participant's written
election to participate in the Plan.
1.17 Plan Year shall mean the calendar year.
1.18 Restoration Account shall mean the notional account established
for record-keeping purposes for a Participant pursuant to Article 5 of the Plan.
1.19 Retirement shall mean a termination of employment following
Normal or Early Retirement Date.
1.20 Savings Plan shall mean the Parker Retirement Savings Plan,
formerly known as The Parker-Hannifin Employees' Savings Plus Stock Ownership
Plan, as it currently exists and as it may subsequently be amended.
1.21 Termination of Employment shall mean the Participant's employment
with the Company ceases for any reason whatsoever, whether voluntary or
involuntary, other than Retirement or death.
1.22 Unscheduled Withdrawal shall mean a distribution of all or a
portion of the entire amount credited to the Participant's Restoration Account
requested by the Participant pursuant to the provisions of Article 11 of the
Plan.
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1.23 Valuation Date shall mean each day on which the New York Stock
Exchange is open, except that for purposes of determining the value of a
distribution under Articles 6, 7, 8, 9 or 15, it shall mean the 24th day of each
month (or the most recent business day preceding such date) immediately
preceding the month in which a distribution is to be made.
ARTICLE 2
Participation
2.1 Participation Agreement / Annual Deferral. An Eligible Executive
shall become a Participant in the Plan on the first day of the Plan Year
coincident with or next following the date the individual becomes an Eligible
Executive, provided such Eligible Executive has submitted to the Administrator a
Participation Agreement. To be effective, the Eligible Executive must submit the
Participation Agreement to the Administrator during the enrollment period
designated by the Administrator. In the Participation Agreement, and subject to
the restrictions in Article 3, the Eligible Executive shall designate the Annual
Deferral for the covered Plan Year.
2.2 Continuation of Participation. An Eligible Executive who has
elected to participate in the Plan by making an Annual Deferral shall continue
as a Participant in the Plan for purposes of such Annual Deferral even though
such executive ceases to be an Eligible Executive. However, a Participant shall
not be eligible to elect a new Annual Deferral unless the Participant is an
Eligible Executive for the Plan Year for which the election is made.
ARTICLE 3
Executive Deferrals
3.1 Deferral Election. A Participant may elect an Annual Deferral
under this Plan to defer all or a portion of the Compensation that he or she
cannot defer under the Savings Plan due to the Statutory Limit. Such election
shall designate a specified percentage of Compensation to be deferred. Annual
Deferrals under this Plan shall be irrevocable.
3.2 Maximum Annual Deferral. The Annual Deferral for a Plan Year shall
be determined as:
(i) For a Participant who is not eligible to participate in the
Executive Deferral Plan, any whole percentage between 1 and 15% of Compensation
up to $25,000.
(ii) For a Participant who is eligible to participate in the
Executive Deferral Plan, any whole percentage between 1 and 5% of Compensation
up to $7,600.
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3.3 Vesting. The Participant's right to receive Compensation deferred
(and gains or losses thereon) under this Article 3 shall be 100% vested at all
times.
ARTICLE 4
Company Matching Credits
4.1 Amount. The Company's Matching Credit in each Plan Year shall
equal one hundred percent (100%) of the first three percent (3%) of Compensation
deferred and fifty percent (50%) of the next two (2%) of Compensation deferred,
reduced by the maximum matching contributions that would have been credited to
the Participant's account under the Savings Plan if he had elected to make the
maximum permitted deferral to the Savings Plan, whether or not he actually does
so. Notwithstanding the foregoing, the maximum Matching Credit allocated to any
Participant's Restoration Account in a Plan Year shall be $17,000, less the
maximum matching contributions that would have been credited to the
Participant's account under the Savings Plan if he had elected to make the
maximum permitted deferral to the Savings Plan.
4.2 Vesting. Subject to Section 12.4, the Participant's right to
receive Matching Credits (and gains or losses thereon) credited to the
Participant's Restoration Account shall be one hundred percent (100%) vested.
ARTICLE 5
Restoration Accounts
5.1 Restoration Accounts. Solely for record keeping purposes, the
Company shall maintain a Restoration Account for each Participant.
5.2 The Timing of Credits.
(i) Annual Deferrals made under Article 3 shall be credited to
the Restoration Account on the same day the deferrals would otherwise have been
paid to the Participant but for the deferral election;
(ii) Matching Credits under Article 4 shall be credited to the
Restoration Account as of the day the corresponding Annual Deferrals are
credited to the Restoration Account; and
(iii) gains or losses shall be credited to the Restoration
Account as of the close of business on each Valuation Date, based on the
Crediting Rate in effect for the day under Section 1.6.
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5.3 Terminations. Following a Participant's Termination of Employment,
Retirement or death, gains or losses shall continue to be credited to the
Restoration Account through the final Valuation Date.
5.4 Statement of Accounts. The Administrator shall provide
periodically to each Participant a statement setting forth the balance of the
Restoration Account maintained for such Participant.
ARTICLE 6
Retirement Benefits
6.1 Amount. Upon Retirement, the Company shall pay to the Participant
the value of his Restoration Account at the time and in the manner selected by
the Participant pursuant to the rules set forth in Sections 6.2 and 6.3.
6.2 Form of Retirement Benefits. The retirement benefit shall be paid
monthly over a period of fifteen (15) years or the number of whole years
required to result in a monthly benefit of at least one thousand dollars
($1,000), if less; provided, however, that the Participant may elect to have
payment made in one of the following options:
(i) a single lump sum payment in cash;
(ii) monthly installments over 5, 10 or 15 years; provided, that
if a monthly benefit is less than $1,000, the Administrator may shorten the
payout period in whole year increments to assure that each monthly payment is at
least $1,000; or
(iii) an annual lump sum amount payable as of January 1 of each
year equal to a specified whole number percentage (1-8%) of the account balance
as of the Valuation Date preceding each such annual payment, plus monthly
installments of the remaining balance of the account over 5, 10 or 15 years;
provided, that if a monthly benefit is less than $1,000, the Administrator may
shorten the payout period in whole year increments to assure that each monthly
payment is at least $1,000.
Payments shall be made or shall begin as of the first day of the month
no later than the date sixty (60) days after the Participant's Retirement,
unless the Participant has elected to have payments begin as of January l of a
later year. However, in no event shall payments commence later than the January
1 occurring five (5) years after Retirement or, if earlier, the January 1
following the date the Participant attains age seventy (70). Notwithstanding the
foregoing, the Company may postpone all or a portion of any scheduled payment
until the next fiscal year to avoid loss of the corporate tax deduction under
Internal Revenue Code Section 162(m). Except as provided in Article 7, 10, 11 or
15, the Participant may change the election of the form of payment at any time,
except that if the election is not filed at least thirteen (13) months prior to
the Participant's
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scheduled date of commencement of payment, the election shall be ineffective
unless the Participant agrees to take a ten percent (10%) reduction in the value
of the Restoration Account.
6.3 Small Benefit Exception. Notwithstanding any of the foregoing, if
the sum of all benefits payable to the Participant is less than or equal to ten
thousand dollars ($10,000), the Company shall pay such benefits in a single lump
sum.
ARTICLE 7
Termination Benefits
7.1 Amount. As of the first day of the month beginning no later than
sixty (60) days after Termination of Employment, the Company shall pay to the
Participant a termination benefit equal to the balance of the Restoration
Account as of the Valuation Date.
7.2 Form of Termination Benefits. The Company shall pay the
termination benefits in a single lump sum; provided, however, that except
following a Change in Control the Company may, in its sole discretion, elect to
pay the termination benefits over a period of three (3) years in monthly
installments, in which event the Restoration Account shall continue to be
credited with gains or losses based on the Crediting Rate(s) elected by the
Participant from time to time.
ARTICLE 8
Survivor Benefits
8.1 Pre-Commencement Survivor Benefit. If the Participant dies prior
to the commencement of installment payments, the Company shall pay the balance
of the Restoration Account to the Participant's Beneficiary in one of the
following forms, based on the Participant's election:
(i) a single lump sum payment in cash;
(ii) monthly installments over 5, 10 or 15 years; provided, that
if a monthly benefit is less than $1,000, the Administrator may shorten the
payout period in whole year increments to assure that each monthly payment is at
least $1,000; or
(iii) an annual lump sum amount equal to a specified percentage
(1-8%) of the account balance as of the Valuation Date preceding each such
annual payment, plus monthly installments of the remaining balance of the
account over 5, 10 or 15 years; provided, that if a monthly benefit is less than
$1,000, the Administrator may shorten the payout period in whole year increments
to assure that each monthly payment is at least
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$1,000.
Payments shall be made or shall begin as of the first day of the month
no later than the date sixty (60) days after the Participant's death unless the
Participant has elected to have payments begin as of January l of a later year.
However, in no event shall payments commence later than the January 1 occurring
five (5) years after death or, if earlier, the January 1 following the date the
Participant would have attained age seventy (70). Except as provided in Article
7, 10, 11 or 15, the Participant (or after his death, his Beneficiary) may
change the election of the form of payment at any time, except that if the
election is not filed at least thirteen (13) months prior to the Participant's
death, the election shall be ineffective unless the Beneficiary agrees to take a
ten percent (10%) reduction in the value of the Restoration Account.
8.2 Post-Commencement Survivor Benefit. If the Participant dies after
the time installment payments have commenced, the Company shall pay the
remaining balance of the Restoration Account to the Participant's Beneficiary in
accordance with the following rules, based on the Participant's election:
(i) continue in the form in effect before the Participant's
death; or
(ii) a single lump sum in cash to be paid the first of the month
no later than the date 60 days after the Participant's death.
8.3 Small Benefit Payment. Notwithstanding any of the foregoing, in
the event the sum of all benefits payable to the Beneficiary is less than or
equal to ten thousand dollars ($10,000), the Company shall pay such benefits in
a single lump sum.
ARTICLE 9
Disability
If a Participant suffers a Disability, the Company shall pay the
benefit described in Article 6 to the Participant as if the date of the
Participant's Termination of Employment for Disability were the Participant's
Normal Retirement Date.
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ARTICLE 10
Change in Control
10.1 Election. At the time the Participant is completing his initial
Participation Agreement, the Participant may elect that, if a Change in Control
occurs, the Participant (or after the Participant's death the Participant's
Beneficiary) shall receive a lump sum payment of the balance of the Restoration
Account within thirty (30) days after the Change of Control. Such balance shall
be determined as of the end of the month sixty (60) days prior to the month in
which the Change in Control occurs.
10.2 Benefit Reduction on Withdrawal. If a Participant has not made
the election described in Section 10.1 above and, within thirty (30) days after
a Change of Control, the Participant (or Beneficiary) elects to receive a
distribution of the balance of the Restoration Account (determined as described
in Section 10.1), the lump sum payment shall be reduced by an amount equal to
five percent (5%) of the total balance of the Restoration Account (instead of
the ten percent (10%) reduction otherwise provided for in Section 11.2). If a
Participant elects such a withdrawal, any on-going Annual Deferral shall cease,
and the Participant may not make any further Annual Deferrals until one entire
Plan Year following the Plan Year in which such withdrawal was made has elapsed.
ARTICLE 11
Withdrawals
11.1 Election. A Participant (or Beneficiary if the Participant is
deceased) may request an Unscheduled Withdrawal of all or a portion of the
entire amount credited to the Participant's Restoration Account as of the
Valuation Date on which the written request is received by the Administrator,
which shall be paid in a single lump sum as soon as practicable following
receipt of the request; provided, however, that (i) the minimum withdrawal shall
be twenty-five percent (25%) of the Restoration Account balance, and (ii) an
election to withdraw seventy-five percent (75%) or more of the balance shall be
deemed to be an election to withdraw the entire balance.
11.2 Withdrawal Penalty. There shall be a penalty deducted from the
Restoration Account prior to an Unscheduled Withdrawal equal to ten percent
(10%) of the Unscheduled Withdrawal. If a Participant elects such a withdrawal,
any on-going Annual Deferral shall cease, and the Participant may not make
further Annual Deferrals until one entire Plan Year following the Plan Year in
which such withdrawal was made has elapsed.
11.3 Financial Hardship Distribution. Upon a finding that the
Participant or the Beneficiary has suffered a Financial Hardship, the
Administrator may in its sole discretion permit the Participant to cease any
on-going deferrals and accelerate
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distributions of benefits under the Plan in the amount reasonably necessary to
alleviate such Financial Hardship. If a distribution is made to a Participant on
account of Financial Hardship, the Participant may not make further Annual
Deferrals under the Plan until one entire Plan Year following the Plan Year in
which a distribution based on Financial Hardship was made has elapsed; however,
there shall be no withdrawal penalty assessed.
11.4 Small Benefit Exception. Notwithstanding any of the foregoing, if
the sum of all benefits payable to the Participant or Beneficiary who has
requested the Unscheduled Withdrawal or Financial Hardship withdrawal is less
than or equal to ten thousand dollars ($10,000), the Company shall pay out the
entire Restoration Account balance (reduced by the ten percent (10%) penalty, if
applicable) in a single lump sum.
11.5 Limit on Withdrawals. Notwithstanding any of the foregoing, no
Participant in a position described in Section 162(m) of the Internal Revenue
Code (or who the Company reasonably believes will be in such a position) shall
be permitted to take any distribution from the Plan in any year in which he is
in or is believed to be in such a position.
ARTICLE 12
Conditions Related to Benefits
12.1 Nonassignability. The benefits provided under the Plan may not be
alienated, assigned, transferred, pledged or hypothecated by or to any person or
entity, at any time or any manner whatsoever. These benefits shall be exempt
from the claims of creditors of any Participant or other claimants and from all
orders, decrees, levies, garnishment or executions against any Participant to
the fullest extent allowed by law.
12.2 No Right to Company Assets. The benefits paid under the Plan
shall be paid from the general funds of the Company, and the Participant and any
Beneficiary shall be no more than unsecured general creditors of the Company
with no special or prior right to any assets of the Company for payment of any
obligations hereunder.
12.3 Protective Provisions. The Participant shall cooperate with the
Company by furnishing any and all information requested by the Administrator, in
order to facilitate the payment of benefits hereunder, taking such physical
examinations as the Administrator may deem necessary and taking such other
actions as may be requested by the Administrator. If the Participant refuses to
cooperate, the Company shall have no further obligation to the Participant under
the Plan. If the Participant makes any material misstatement of information or
nondisclosure of medical history, then no benefits shall be payable to the
Participant or the Participant's Beneficiary or estate under the Plan beyond the
sum of the Participant's Annual Deferrals.
12.4 Withholding. The Participant or the Beneficiary shall make
appropriate arrangements with the Company for satisfaction of any federal, state
or local income tax
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withholding requirements and Social Security or other employee tax requirements
applicable to the payment of benefits under the Plan. If no other arrangements
are made, the Company may provide, at its discretion, for such withholding and
tax payments as may be required.
ARTICLE 13
Administration of Plan
The Company shall administer the Plan, provided, however, that the
Company may elect to appoint a committee of three (3) or more individuals to
administer the Plan. All references to the Administrator herein shall refer to
the Company or, if such committee has been appointed, the committee.
The Administrator shall administer the Plan and shall have
discretionary authority to interpret, construe and apply its provisions in
accordance with its terms. The Administrator shall further establish, adopt or
revise such rules and regulations as it may deem necessary or advisable for the
administration of the Plan. All decisions of the Administrator shall be final
and binding. The individuals serving on the committee shall, except as
prohibited by law, be indemnified and held harmless by the Company from any and
all liabilities, costs, and expenses (including legal fees), to the extent not
covered by liability insurance arising out of any action taken by any member of
the committee with respect to the Plan, unless such liability arises from the
individual's own gross negligence or willful misconduct.
ARTICLE 14
Beneficiary Designation
The Participant shall have the right, at any time, to designate any
person or persons as Beneficiary (both primary and contingent) to whom payment
under the Plan shall be made in the event of the Participant's death. The
Beneficiary designation shall be effective when it is submitted in writing to
the Administrator during the Participant's lifetime on a form prescribed by the
Administrator.
The submission of a new Beneficiary designation shall cancel all prior
Beneficiary designations. Any finalized divorce or marriage of a Participant
subsequent to the date of a Beneficiary designation shall revoke such
designation, unless in the case of divorce the previous spouse was not
designated as Beneficiary and unless in the case of marriage the Participant's
new spouse has previously been designated as Beneficiary. The spouse of a
married Participant shall consent to any designation of a Beneficiary other than
the spouse, and the spouse's consent shall be witnessed by a notary public.
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If a Participant fails to designate a Beneficiary as provided above,
or if the Beneficiary designation is revoked by marriage, divorce, or otherwise
without execution of a new designation, or if every person designated as
Beneficiary predeceases the Participant or dies prior to complete distribution
of the Participant's benefits, then the Administrator shall direct the
distribution of such benefits to the Participant's estate.
ARTICLE 15
Amendment and Termination of Plan
15.1 Amendment of Plan. Except as provided in Section 15.3, the
Company may at any time amend the Plan in whole or in part, provided, however,
that such amendment: (i) shall not decrease the balance of the Participant's
Restoration Account at the time of such amendment; and (ii) shall not
retroactively decrease the applicable Crediting Rate of the Plan prior to the
time of such amendment. The Company may amend the Crediting Rate or Fixed
Crediting Rate of the Plan prospectively, in which case the Company shall notify
the Participant of such amendment in writing within thirty (30) days after such
amendment.
15.2 Termination of Plan. Except as provided in Section 15.3, the
Company may at any time terminate the Plan. If the Company terminates the Plan,
the date of such termination shall be treated as the date of Retirement or
Termination of Employment for the purpose of calculating Plan benefits, and the
Company shall pay to the Participant the benefits the Participant is entitled to
receive under the Plan in monthly installments over a thirty-six (36) month
period. Interest at an annualized rate equal to 90% of the Ten-Year United
States Treasury Note rate as of January 1 of the year in which the Plan is
terminated will be credited to the Participant's Restoration Account commencing
as of the date of the Plan's termination and continuing until distribution under
this Section is completed.
15.3 Amendment or Termination After Change in Control. Notwithstanding
the foregoing, the Company shall not amend or terminate the Plan without the
prior written consent of affected Participants for a period of two calendar
years following a Change in Control and shall not thereafter amend or terminate
the Plan in any manner which affects any Participant (or Beneficiary of a
deceased Participant) who commences receiving payment of benefits under the Plan
prior to the end of such two year period following a Change in Control.
15.4 Company Action. Except as provided in Section 15.3 or 15.5, the
Company's power to amend or terminate the Plan shall be exercisable by the
Company's Board of Directors or by the committee or individual authorized by the
Company's Board of Directors to exercise such powers.
15.5 Constructive Receipt Termination. In the event the Administrator
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determines that amounts deferred under the Plan have been constructively
received by Participants and must be recognized as income for federal income tax
purposes, the Plan shall terminate and distributions shall be made to
Participants in accordance with the Provisions of Section 15.2 or as may be
determined by the Administrator. The determination of the Administrator under
this Section 15.5 shall be binding and conclusive.
ARTICLE 16
Miscellaneous
16.1 Successors of the Company. The rights and obligations of the
Company under the Plan shall inure to the benefit of, and shall be binding upon,
the successors and assigns of the Company.
16.2 ERISA Plan. The Plan is intended to be an unfunded plan
maintained primarily to provide deferred compensation benefits for "a select
group of management or highly compensated employees" within the meaning of
Sections 201, 301 and 401 of ERISA and therefore to be exempt from Parts 2, 3
and 4 of Title I of ERISA.
16.3 Trust. The Company shall be responsible for the payment of all
benefits under the Plan. At its discretion, the Company may establish one or
more grantor trusts for the purpose of providing for payment of benefits under
the Plan. Such trust or trusts may be irrevocable, but the assets thereof shall
be subject to the claims of the Company's creditors. Benefits paid to the
Participant from any such trust shall be considered paid by the Company for
purposes of meeting the obligations of the Company under the Plan.
16.4 Employment Not Guaranteed. Nothing contained in the Plan nor any
action taken hereunder shall be construed as a contract of employment or as
giving any Participant any right to continued employment with the Company.
16.5 Gender, Singular and Plural. All pronouns and variations thereof
shall be deemed to refer to the masculine, feminine, or neuter, as the identity
of the person or persons may require. As the context may require, the singular
may be read as the plural and the plural as the singular.
16.6 Captions. The captions of the articles and sections of the Plan
are for convenience only and shall not control or affect the meaning or
construction of any of its provisions.
16.7 Validity. If any provision of the Plan is held invalid, void or
unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provisions of the Plan.
16.8 Waiver of Breach. The waiver by the Company of any breach of any
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provision of the Plan by the Participant shall not operate or be construed as a
waiver of any subsequent breach by the Participant.
16.9 Applicable Law. The Plan shall be governed and construed in
accordance with the laws of Ohio except where the laws of Ohio are preempted by
ERISA.
16.10 Notice. Any notice or filing required or permitted to be given
to the Company under the Plan shall be sufficient if in writing and
hand-delivered, or sent by first class mail, facsimile, or electronic mail to
the principal office of the Company, directed to the attention of the
Administrator. Such notice shall be deemed given as of the date of delivery, or,
if delivery is made by mail, as of the date shown on the postmark.
ARTICLE 17
Claims and Review Procedures
17.1 Claims Procedure. The Company shall notify a Participant in
writing, within ninety (90) days after his or her written application for
benefits, of his or her eligibility or noneligibility for benefits under the
Plan. If the Company determines that a Participant is not eligible for benefits
or full benefits, the notice shall set forth: (i) the specific reasons for such
denial; (ii) a specific reference to the provisions of the Plan on which the
denial is based; (iii) a description of any additional information or material
necessary for the claimant to perfect his or her claim, and a description of why
it is needed; and (iv) an explanation of the Plan's claims review procedure and
other appropriate information as to the steps to be taken if the Participant
wishes to have the claim reviewed. If the Company determines that there are
special circumstances requiring additional time to make a decision, the Company
shall notify the Participant of the special circumstances and the date by which
a decision is expected to be made, and may extend the time for up to an
additional ninety-day period.
17.2 Review Procedure. If a Participant is determined by the Company
not to be eligible for benefits, or if the Participant believes that he or she
is entitled to greater or different benefits, the Participant shall have the
opportunity to have such claim reviewed by the Company by filing a petition for
review with the Company within sixty (60) days after receipt of the notice
issued by the Company. Said petition shall state the specific reasons which the
Participant believes entitle him or her to benefits or to greater or different
benefits. Within sixty (60) days after receipt by the Company of the petition,
the Company shall afford the Participant (and counsel, if any) an opportunity to
present his or her position to the Company orally or in writing, and the
Participant (or counsel) shall have the right to review the pertinent documents.
The Company shall notify the Participant of its decision in writing within the
sixty-day period, stating specifically the basis of its decision, written in a
manner calculated to be understood by the Participant and the specific
provisions of the Plan on which the decision is based. If, because of the need
for a hearing, the sixty-day period is not sufficient, the decision may be
deferred for
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up to another sixty-day period at the election of the Company, but notice of
this deferral shall be given to the Participant. In the event of the death of
the Participant, the same procedures shall apply to the Participant's
beneficiaries.
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