Exhibit 10.3
THOMAS & BETTS CORPORATION
EXECUTIVE RETIREMENT PLAN
As Amended and Restated Effective January 1, 2005
(Including amendments adopted through September 5, 2007)
TABLE OF CONTENTS
Page
INTRODUCTION...................................................................1
ARTICLE 1. DEFINITIONS.......................................................1
1.01 "Actuarial Equivalent"............................................1
1.02 "Affiliated Company"..............................................1
1.03 "Average Monthly Compensation" ...................................1
1.04 "Beneficiary".....................................................2
1.05 "Benefit".........................................................2
1.06 "Board of Directors"..............................................2
1.07 "Code"............................................................2
1.08 "Committee".......................................................2
1.09 "Company".........................................................2
1.10 "Compensation"....................................................2
1.11 "Credited Service"................................................2
1.12 "Early Retirement Date"...........................................3
1.13 "Effective Date"..................................................3
1.14 "Eligible Employee"...............................................3
1.15 "Grandfathered Benefit"...........................................3
1.16 "Normal Retirement Date"..........................................3
1.17 "Plan"............................................................3
1.18 "Retiree".........................................................3
1.19 "Retirement Plan".................................................3
1.20 "Section 409A Benefit"............................................3
1.21 "Separation from Service".........................................3
1.22 "10-Year Certain and Life Annuity"................................4
ARTICLE 2. AMOUNT AND PAYMENT OF BENEFITS....................................4
2.01 Payment of Benefit................................................4
2.02 Amount of Normal Retirement Benefit...............................4
2.03 Amount of Early Retirement Benefits...............................5
2.04 Form and Time of Payment for a Grandfathered Benefit..............5
2.05 Form and Time of Payment for Section 409A Benefit - Termination
On Or After Early Retirement Date.................................6
2.06 Termination Prior to Early Retirement Date........................7
2.07 Pre-Retirement Death Benefit......................................8
2.08 Restoration of Service............................................8
2.09 Designation of Beneficiary........................................8
2.10 Receipt of Single-Sum Payment.....................................9
ARTICLE 3. GENERAL PROVISIONS................................................9
3.01 Administration....................................................9
3.02 Funding...........................................................9
3.03 No Contract of Employment.........................................9
3.04 Competency.......................................................10
3.05 Withholding Taxes................................................10
-i-
TABLE OF CONTENTS
(continued)
3.06 Nonalienation....................................................10
3.07 Forfeiture for Cause.............................................10
3.08 Mergers/Transfers................................................11
3.09 Change of Control................................................11
3.10 Calculations.....................................................11
3.11 Elections........................................................12
3.12 Acceleration of Payment..........................................12
3.13 Construction.....................................................12
3.14 Insurance Products...............................................13
3.15 Nature of Obligation.............................................13
3.16 Legal Fees.......................................................13
3.17 Tax Gross-Up.....................................................13
ARTICLE 4. AMENDMENT, TERMINATION, OR PARTICIPANT REMOVAL...................15
-ii-
THOMAS & BETTS CORPORATION
EXECUTIVE RETIREMENT PLAN
As Amended and Restated Effective January 1, 2005
INTRODUCTION
------------
Thomas & Betts Corporation (the "Company") has adopted and maintained this
Executive Retirement Plan ("Plan"), originally effective as of September 2,
1992, and as subsequently amended on December 16, 1993, February 5, 1997, June
4, 1997, December 1, 1999, June 7, 2000, December 5, 2000, September 3, 2003 and
February 4, 2004, to provide additional retirement income and death benefit
protection to certain officers of the Company in recognition of their
contribution to the Company in carrying out senior management responsibilities.
The Company now desires to amend the Plan further in order to comply with
section 409A of the Internal Revenue Code of 1986, as amended. The terms and
conditions of participation and benefits under this Plan, as amended, are set
out in this document.
All benefits payable under this Plan, which is intended to constitute a
non-qualified, unfunded deferred compensation plan for a select group of
management employees under Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), shall be paid out of the general assets of
the Company.
ARTICLE 1. DEFINITIONS
----------------------
1.01 "Actuarial Equivalent" shall mean the equivalent value when computed
based on the UP-84 Mortality Table and an interest rate equal to 100
percent of the interest rate which would be used by the Pension
Benefit Guaranty Corporation (under the pre-November 1, 1993
methodology) for valuing immediate annuities for single employer plans
that terminate on the first day of the month in which the Eligible
Employee's Benefit payments commence (the "PBGC Interest Rate").
1.02 "Affiliated Company" shall mean any company not participating in the
Plan which is a member of a controlled group of corporations (as
defined in Section 414(b) of the Code) which also includes as a member
the Company; any trade or business under common control (as defined in
Section 414(c) of the Code) with the Company; any organization
(whether or not incorporated) which is a member of an affiliated
service group (as defined in Section 414(m) of the Code) which
includes the Company; and any other entity required to be aggregated
with the Company pursuant to regulations under Section 414(o) of the
Code.
1.03 "Average Monthly Compensation" shall mean the average monthly
Compensation of an Eligible Employee during any sixty (60) consecutive
months during his employment with the Company or an Affiliated Company
affording the highest such average. For purposes of determining
Average Monthly Compensation, noncontiguous months of employment
interrupted by periods of fewer than twelve (12) months in which the
Employee is not employed shall be treated as consecutive. If the
Eligible Employee has fewer than 60 consecutive full months of
employment, Average Monthly Compensation shall mean the monthly
average for all full months of employment completed by such Eligible
Employee. Notwithstanding the foregoing, if an Eligible Employee has
noncontiguous periods of employment and his most recent period of
employment commenced at least twelve (12) full calendar months after
the last day of his immediate prior period of employment, his Average
Monthly Compensation shall be determined solely on the basis of his
most recent period of employment.
1.04 "Beneficiary" shall mean the person or persons designated by an
Eligible Employee as beneficiary in a time and manner determined by
the Committee. If the Eligible Employee fails to designate a
Beneficiary or if the Beneficiary predeceases the Eligible Employee,
the Eligible Employee's spouse shall be the Beneficiary or if no
spouse survives the Eligible Employee, the Eligible Employee's estate
shall be the Beneficiary. An Eligible Employee may change his
designated Beneficiary in a time and manner determined by the
Committee.
1.05 "Benefit" shall mean the amounts payable under Article 2 of this Plan
including the Grandfathered Benefit and the Section 409A Benefit.
1.06 "Board of Directors" shall mean the Board of Directors of Thomas &
Betts Corporation.
1.07 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
1.08 "Committee" shall mean the Company's Compensation Committee of the
Board of Directors, any successor or substitute committee thereto, or,
during any period of time when no such committee is in existence, the
Company's entire Board of Directors.
1.09 "Company" shall mean the Thomas & Betts Corporation or any successor
by merger, purchase or otherwise, with respect to its employees and
such Affiliated Companies authorized by the Board of Directors, on
such terms and conditions as the Board may determine, to participate
in the Plan.
1.10 "Compensation" shall mean the base cash compensation paid to an
Eligible Employee in respect of each month for services rendered to
the Company by such Eligible Employee, plus the amount paid pursuant
to the provisions of the Executive Incentive Plan and the Management
Incentive Plan or such substitute or similar plans, determined prior
to any pre-tax contributions under a "qualified cash or deferred
arrangement" (as defined under Section 401(k) of the Code and its
applicable regulations) or under a "cafeteria plan" (as defined under
Section 125 of the Code and its applicable regulations) and prior to
any amount which an Eligible Employee has elected to defer under the
Thomas & Betts Supplemental Executive Investment Plan.
1.11 "Credited Service" shall mean with respect to an Eligible Employee
service determined pursuant to the provisions of Section 2.9 (or any
successor thereto) of the Retirement Plan. If an Eligible Employee,
who either has received a lump sum distribution from the Plan or is
receiving a monthly payment from the Plan is subsequently rehired and
resumes participation in the plan, his Credited Service attributable
to his employment prior to his rehire shall be disregarded in
determining the amount of his Benefit which accrues subsequent to his
rehire. His Credited Service attributable to employment both before
and after his rehire shall, however, be taken into account in
determining whether he has satisfied the service eligibility
requirements for a Benefit under the Plan. Notwithstanding the
foregoing, an Eligible Employee may, subject to the approval by the
Committee, be granted additional months or years of age or of Credited
Service for purposes of determining the amount of Benefit under the
Plan or for purposes of satisfying the service eligibility
requirements necessary for a Benefit under the Plan or both. The
number of months or years of age or of Credited Service so granted, if
any, shall be set forth in Appendix A.
- 2 -
1.12 "Early Retirement Date" shall mean the first day of the calendar month
following an Eligible Employee's 55th birthday, or the Eligible
Employee's 50th birthday if such Eligible Employee commenced
employment with the Company prior to December 1, 1997. For purposes of
determining whether employment commenced prior to December 1, 1997,
"Company" shall not include Augat Inc. or any Affiliated Company which
became authorized to participate in this Plan after November 30, 1997.
1.13 "Effective Date" shall mean September 2, 1992, for the Plan as
originally effective, and January 1, 2005 for the Plan as amended and
restated herein.
1.14 "Eligible Employee" shall mean an employee who occupies a position of
senior management with the Company who has been approved by the
Committee and who is listed on Appendix A, as amended from time to
time by the Committee.
1.15 "Grandfathered Benefit" shall mean that portion of the Benefit under
the Plan as in effect on October 3, 2004 which was earned and vested
(within the meaning of Treas. Reg. ss.1.409A-6(a) or any successor
thereto) as of December 31, 2004.
1.16 "Normal Retirement Date" shall mean the first day of the calendar
month following an Eligible Employee's 65th birthday.
1.17 "Plan" shall mean the Thomas & Betts Corporation Executive Retirement
Plan, as amended from time to time.
1.18 "Retiree" shall mean an Eligible Employee who (i) has completed five
or more years of Credited Service, (ii) has reached either his Early
Retirement Date or his Normal Retirement Date, and (iii) either
voluntarily or upon the Company's request or demand terminates
employment with the Company and all Affiliated Companies, or with
respect to any Section 409A Benefit, has a Separation from Service.
1.19 "Retirement Plan" shall mean Part A of the Thomas & Betts Pension
Plan, as amended from time to time.
1.20 "Section 409A Benefit" shall mean that portion of the Benefit under
this Plan in excess of the Grandfathered Benefit.
1.21 "Separation from Service" shall mean an Eligible Employee's
termination of employment within the meaning of Treas. Reg.
ss.1.409A-1(h) or any successor thereto.
- 3 -
1.22 "10-Year Certain and Life Annuity" shall mean an annuity which
provides monthly payments to the Retiree for his lifetime with a
guaranteed minimum of one hundred twenty (120) monthly payments, and
if the Retiree dies prior to receiving the full one hundred twenty
(120) monthly payments, the remainder of the guaranteed payments shall
be commuted and paid in one lump sum to the Beneficiary in full
discharge of the obligation of the Plan.
ARTICLE 2. AMOUNT AND PAYMENT OF BENEFITS
-----------------------------------------
2.01 Payment of Benefit
Except as otherwise provided, a Benefit shall be payable by the
Company only with respect to an Eligible Employee who becomes a
Retiree, subject to the provisions of Section 3.07. Such Benefit shall
be payable from the general assets of the Company.
2.02 Amount of Normal Retirement Benefit
The monthly amount of the Benefit payable in the form of a 10-Year
Certain and Life Annuity on or after an Eligible Employee's Normal
Retirement Date shall be equal to:
(a) 2.5 percent of the Eligible Employee's Average Monthly
Compensation multiplied by the first 20 years of his Credited
Service plus 1.5 percent of the Eligible Employee's Average
Monthly Compensation multiplied by the next 15 years of his
Credited Service
minus
(b) The sum of (i) and (ii) where
(i) equals the monthly amount of benefit which is or would be
payable to the Eligible Employee pursuant to the provisions
of the Retirement Plan, assuming such benefit commenced at
the same time as the commencement of his Plan Benefit, in
the form of a 100% Joint and Survivor Annuity, as described
in Section 2.04(a)(i) (an Eligible Employee who is unmarried
at the time the Benefit is determined shall be deemed, for
purposes of the Plan, to have a survivor annuitant born on
the same date as the Eligible Employee), and
(ii) equals the monthly amount of benefit payable under a prior
employer's retirement program as set forth in Appendix A.
The Committee shall determine, in good faith, the appropriate
amount of offset under Section 2.02(b)(ii) to be used in
calculating any Benefit under this Plan (including, without
limitation, converting such monthly benefit under Section
2.02(b)(ii) to an appropriate benefit form) and each Eligible
Employee shall cooperate with the Committee by providing any
information (certifiable or otherwise) necessary to make such
determination.
- 4 -
2.03 Amount of Early Retirement Benefits
(a) Unless the provisions of Section 2.03(b) below are applicable,
the Benefit payable to a Retiree whose employment terminates for
any reason prior to his Normal Retirement Date shall be equal to
the Benefit determined under the provisions of Section 2.02 on
the basis of his Average Monthly Compensation and Credited
Service on the date of his termination of employment; provided,
however, the portion of his Benefit determined under the
provisions of Section 2.02(a) shall be reduced by 3.6% for each
year and 1/12 of 3.6% for each month of a fractional year by
which the date the Retiree's Benefit begins precedes the 60th
anniversary of his birth.
(b) An Eligible Employee who has completed at least five years of
Credited Service and who terminates employment at the Company's
request prior to his Normal Retirement Date shall, subject to the
approval of the Committee and the provisions of Section 3.07,
receive a special early Benefit. The special early Benefit shall
solely be at the discretion of the Committee and may reflect
(without limitation) the grant of additional months or years of
Credited Service and/or age.
2.04 Form and Time of Payment for a Grandfathered Benefit
(a) The automatic form of payment under this Plan deemed to have been
elected with respect to a Grandfathered Benefit by a Retiree at
the time he became an Eligible Employee shall be a 10-Year
Certain and Life Annuity unless the Retiree elected one of the
following optional forms of payment at the time he became an
Eligible Employee.
(i) Payment in the form of a 100% Joint and Survivor Annuity of
Actuarial Equivalent value to the Grandfathered Benefit
otherwise payable under Section 2.04(a) above, providing for
a reduced monthly benefit during his lifetime with 100% of
such reduced monthly benefit continuing to his surviving
spouse to whom he was married on the date his Grandfathered
Benefit payments commenced for the remainder of such
spouse's lifetime. If the Retiree and the spouse to whom he
was married on the date his Grandfathered Benefit payments
commenced die before receiving one hundred twenty (120)
monthly payments, the remainder of the one hundred twenty
(120) guaranteed payments will be commuted and paid in one
lump sum to the named beneficiary of the last surviving
annuitant in full discharge of the obligation of the Plan
with respect to the Grandfathered Benefit. This optional
form of benefit shall become effective on the first day of
the month for which the Retiree's Grandfathered Benefit is
first payable. If the Retiree's spouse dies before the first
day of the month for which the Retiree's Grandfathered
Benefit is first payable, this optional form of payment
shall be revoked and payments shall be made as a 10-Year
Certain and Life Annuity.
- 5 -
(ii) In one single payment to him (or his Beneficiary if he dies
prior to payment under paragraph (b) below) of the Actuarial
Equivalent value of the Grandfathered Benefit otherwise
payable under Section 2.04(a) above. Notwithstanding the
foregoing or any provision of the Plan to the contrary, the
lump sum factor to be used in determining the present value
of the Grandfathered Benefit of a Retiree who terminates
employment after his Normal Retirement Date shall be the
same lump sum factor as would be used with respect to an age
65 Retiree receiving a lump sum payment of his Grandfathered
Benefit as of the same date.
(b) Payments shall commence as of the first day of the month
following the Eligible Employee becoming a Retiree or as soon as
administratively practicable thereafter.
(c) Any Eligible Employee may change his payment form election with
respect to his Grandfathered Benefit by making a new payment form
election at any time; provided, however, that no such election
shall be effective unless it shall have been made and submitted
to the Committee prior to the last day of the calendar year prior
to the calendar year in which the Eligible Employee terminates
employment with the Company and each Affiliated Company.
2.05 Form and Time of Payment for Section 409A Benefit - Termination On Or
After Early Retirement Date
(a) All elections by an Eligible Employee under this Section 2.05
shall apply to his Section 409A Benefits hereunder and his
benefits accrued under the Thomas & Betts Pension Restoration
Plan which, in both cases, are payable upon a Separation from
Service on or after such Eligible Employee's Early Retirement
Date (jointly referred to under this Section 2.05 as "Aggregate
Section 409A Benefits").
(b) Unless the Eligible Employee has made an effective election with
respect to Aggregate Section 409A Benefits as provided below, for
payments which commence after 2004 and prior to 2008, the form of
payment election made with respect to Benefits prior to 2005
shall apply to such Aggregate Section 409A Benefits, provided,
however, that the Aggregate Section 409A Benefits shall commence
on the first business day of the month following the six-month
anniversary of the Eligible Employee's Separation from Service as
a Retiree. In the absence of a prior affirmative election by the
Eligible Employee, the Aggregate Section 409A Benefits shall be
paid in one single payment on the first business day of the month
following the six-month anniversary of the Eligible Employee's
Separation from Service as a Retiree. The portion of the single
payment attributable to Section 409A Benefits shall be equal to
the Actuarial Equivalent Value of the Section 409A Benefit
otherwise payable to the Eligible Employee in the form of a
10-Year Certain and Life Annuity. The lump sum factor shall be
the same as in Section 2.04(a)(ii) above.
- 6 -
(c) Effective January 1, 2008, unless the Eligible Employee has made
an effective election under Section 2.05(d) or (e) below, the
Eligible Employee's Aggregate Section 409A Benefit shall be paid
in one single payment on the first business day of the month
following the six-month anniversary of the Eligible Employee's
Separation from Service as a Retiree. The portion of the single
payment attributable to Section 409A Benefits shall be equal to
the Actuarial Equivalent Value of the Section 409A Benefit
otherwise payable to the Eligible Employee in the form of a
10-Year Certain and Life Annuity. The lump sum factor shall be
the same as in Section 2.04(a)(ii) above.
(d) An Eligible Employee may elect during 2005, 2006 and 2007, to
have his Aggregate Section 409A Benefit paid in the form of a
10-Year Certain and Life Annuity or a 100% Joint and Survivor
Annuity in lieu of the lump sum payment or may change a prior
election of an annuity form of payment to a lump sum payment but
such election shall be effective only for a Separation from
Service after the year of the election and shall commence to be
paid on the first business day of the month following the
six-month anniversary of the Eligible Employee's Separation from
Service as a Retiree.
(e) An Eligible Employee may make an election after 2007 to change
the form of payment as set forth in 2.05(c) or as elected under
2.05(d) with respect to the Aggregate Section 409A Benefit,
provided that any such election shall be effective only after
twelve months from the date of the election and must be made at
least twelve months prior to the date payment would otherwise
have been made or have commenced to be made. In the event of such
election, payment shall be made or commence to be made on the
first business day of the month following the five-year
anniversary of the date specified as the payment date in Section
2.05(b) above. Only one such election shall be permitted except
as otherwise provided in Section 2.05(f).
(f) An Eligible Employee who has elected an annuity form may elect
the other annuity form (provided such form is actuarially
equivalent to such prior elected annuity form) with respect to
the Aggregate Section 409A Benefit at any time without regard to
the 12-month and 5-year rules.
(g) All elections under this Section 2.05 shall be irrevocable upon
delivery of such election to the Committee or its designee. All
benefits subject to such election and payable as a result of the
Employee's Separation from Service shall be paid or commence to
be paid at the time and in the form elected by the Eligible
Employee to such Employee or in the event of such Employee's
death prior to commencement, to the designated beneficiary or
joint annuitant.
2.06 Termination Prior to Early Retirement Date
Notwithstanding any other provision of the Plan, the Committee in its
sole discretion may elect to pay a Benefit in one single payment that
is the Actuarial Equivalent value of the Benefit accrued by an
Eligible Employee who Separates from Service after completing five or
more years of Credited Service but prior to reaching his Early
Retirement Date. Payment shall be made on the first business day of
the month following the six-month anniversary of such Separation from
Service.
- 7 -
2.07 Pre-Retirement Death Benefit
If an Eligible Employee dies prior to his termination of employment
or, with respect to a Section 409A Benefit, prior to his Separation
from Service and after he has completed five or more years of Credited
Service with the Company, a spouse's benefit shall be payable to his
surviving spouse. Such spouse's benefit shall be a lump sum payment
which is the Actuarial Equivalent value of the amount of monthly
benefit the spouse would have received if the benefit which the
Eligible Employee would have received under Section 2.02 of this Plan,
reduced pursuant to the provisions of Section 2.03(a) of this Plan,
had commenced on the later of the month following (A) the Eligible
Employee's date of death or (B) the Eligible Employee's Early
Retirement Date, in the form of a 100% Joint and Survivor Annuity and
the Eligible Employee had died immediately thereafter. Such spouse's
Grandfathered Benefit shall be paid as soon as practicable following
such Eligible Employee's date of death and the Section 409A Benefit
shall be paid on the last business day of the first month following
the month in which death occurs. For purposes of this Section 2.07,
"Company" shall not include Augat Inc. or any other Affiliated Company
which became authorized to participate in this Plan after November 30,
1997.
2.08 Restoration of Service
If an Eligible Employee who retired or otherwise terminated employment
is restored to employment with the Company or an Affiliated Company,
the Grandfathered Benefit shall be suspended and upon a subsequent
termination of employment with the Company and all Affiliated
Companies shall resume in the same amount and in the same form. The
Section 409A Benefit accrued prior to the Eligible Employee's
reemployment shall continue to be paid if in pay status or shall be
paid or commence to be paid at the time specified under Section 2.05
without regard to such reemployment. The Eligible Employee shall be
entitled to an additional Section 409A Benefit calculated under
Section 2.02, taking into account only his Credited Service subsequent
to his rehire date, and the provisions of Section 2.05 shall apply
with respect to the form and time of payment of this additional
Section 409A Benefit.
2.09 Designation of Beneficiary
Each Eligible Employee shall file a written designation of Beneficiary
with the Committee upon qualifying for participation hereunder. Such
designation shall remain in force until revoked by the Eligible
Employee by filing a new beneficiary form with the Committee.
- 8 -
2.10 Receipt of Single-Sum Payment
If any Retiree has received a single sum payment, such Retiree's
Beneficiary shall have no further interest in the Plan or any benefit
payable thereunder.
ARTICLE 3. GENERAL PROVISIONS
-----------------------------
3.01 Administration
The administration of the Plan, the exclusive power to interpret it,
and the responsibility for carrying out its provisions are vested in
the Committee. The Committee shall have full discretionary authority
to interpret the Plan and resolve all matters arising in connection
with the Plan. The Committee may adopt procedural rules and may 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. The expenses of the Committee attributable to the
administration of this Plan shall be paid directly by the Company.
3.02 Funding
(a) All amounts payable in accordance with this Plan shall constitute
a general unsecured obligation of the Company. Such amounts, as
well as any administrative costs relating to the Plan, shall be
paid out of the general assets of the Company, unless the
provisions of paragraph (b) below are applicable.
(b) The Board of Directors may, for administrative reasons, establish
a grantor trust for the benefit of Eligible Employees in the
Plan. The assets of said trust will be held separate and apart
from other Company funds and shall be used exclusively for the
purposes set forth in the Plan and the applicable trust
agreement, subject to the following conditions:
(i) the creation of said trust shall not cause the Plan to be
other than "unfunded" for purposes of Title I of ERISA;
(ii) the Company shall be treated as the "grantor" of said trust
for purposes of Section 671 and 677 of the Internal Revenue
Code; and
(iii) said trust agreement shall provide that its assets may be
used to satisfy claims of the Company's general creditors,
provided that the rights of such general creditors are
enforceable under federal and state law.
3.03 No Contract of Employment
The establishment of the Plan shall not be construed as conferring any
legal right upon any person for a continuation of employment, nor
shall it interfere with the right of the Company to discharge any
employee.
- 9 -
3.04 Competency
If the Committee shall find that any person to whom any amount is or
was payable hereunder is unable to care for his affairs because of
illness or accident, or has died, then the Company, if it so elects,
may direct that any payment due him or his estate (unless a prior
claim therefore has been made by a duly appointed legal
representative) or any part thereof be paid or applied for the benefit
of such person or for the benefit of his spouse, children or other
dependents, an institution maintaining or having custody of such
person, any other person deemed by the Committee to be a proper
recipient on behalf of such person otherwise entitled to payment, or
any of them, in such manner and proportion as the Company may deem
proper, provided, however, that any Section 409A Benefit shall be paid
at the same time and in the same form as payment would have been made
to the Eligible Employee. Any such payment shall be in complete
discharge of the liability of the Company therefor.
3.05 Withholding Taxes
The Company shall have the right to deduct from each payment to be
made under the Plan any required withholding taxes.
3.06 Nonalienation
Except insofar as may otherwise be required by law, no amount payable
at any time under the Plan shall be subject in any manner to
alienation by anticipation, sale, transfer, assignment, bankruptcy,
pledge, attachment, charge or encumbrance of any kind nor in any
manner be subject to the debts or liabilities of any person and any
attempt to so alienate or subject any such amount, whether presently
or thereafter payable, shall be void. With respect to the
Grandfathered Benefit only, if any person shall attempt to, or shall
alienate, sell, transfer, assign, pledge, attach, charge or otherwise
encumber any amount payable under the Plan, or any part thereof, or if
by reason of his bankruptcy or other event happening at any such time
such amount would be made subject to his debts or liabilities or would
otherwise not be enjoyed by him, then the Committee, if it so elects,
may direct that the Grandfathered Benefit be withheld and that the
same or any part thereof be paid or applied to or for the benefit of
such person, his spouse, children or other dependents, or any of them,
in such manner and proportion as the Committee may deem proper.
3.07 Forfeiture for Cause
In the event that an Eligible Employee or Retiree shall at any time be
convicted for a crime involving dishonesty or fraud on the part of
such Eligible Employee or Retiree in his relationship with the Company
or an Affiliated Company, all benefits that would otherwise be payable
to him under the Plan shall be forfeited. If a Retiree shall at any
time be under indictment for any such crime, any Grandfathered Benefit
amounts payable to such Retiree shall be suspended pending conviction,
dismissal or acquittal in respect thereof. If the Retiree is not
convicted, the suspended amounts shall be paid to him (with simple
interest accruing at the PBGC Interest Rate) within thirty days after
the date of the dismissal or acquittal. For this purpose, any
so-called Alford plea or plea of nolo contendere shall be deemed to
constitute an acquittal.
- 10 -
3.08 Mergers/Transfers
This Plan shall be binding upon and inure to the benefit of the
Company and its successors and assignees and the Eligible Employee,
his designees and his estate. Nothing in this Plan shall preclude the
Company from consolidating or merging into or with, or transferring
all or substantially all of its assets to, another corporation which
assumes this Plan and all obligations of the Company hereunder. Upon
such a consolidation, merger or transfer of assets and assumption, the
term "Company" shall refer to such other corporation and this Plan
shall continue in full force and effect.
3.09 Change of Control
Notwithstanding any other provision of the Plan, in the case of an
Eligible Employee who has an agreement with the Company which provides
for benefits following a change of control ("Termination Protection
Agreement"), the following provisions shall apply in the event that
such Eligible Employee's employment with the Company is terminated
under the circumstances described in Section 3 of his or her
Termination Protection Agreement.
(a) Such Eligible Employee, if not a Retiree as defined in Section
1.18, shall be deemed to be a Retiree and shall be entitled to a
Benefit determined in accordance with Section 2.02;
(b) For purposes of Section 2.02 such Eligible Employee's age and
years of Credited Service shall be increased by three (3) years;
(c) The Actuarial Equivalent value of such Eligible Employee's
Grandfathered Benefit, if any, shall be paid to him or her in a
lump sum within 30 days after the date of termination of his or
her employment; and
(d) The Eligible Employee's Section 409A Benefit shall be paid in
accordance with the foregoing provisions of this Plan unless such
change of control is a change in control event as defined in
Treas. Reg. ss.1.409A-3(i)(5) (or any successor thereto) and the
Separation from Service occurs within two years following such
change of control, in which case payment shall be made in a lump
sum (equal to the Actuarial Equivalent value of such Eligible
Employee's Section 409A Benefit) on the first business day of the
month following the six-month anniversary of such Separation from
Service.
3.10 Calculations
Whenever, under this Plan, it is necessary to determine whether one
benefit is less than, equal to, or larger than another, whether or not
such benefits are provided under this Plan, such determination shall
be made by the Company's independent consulting actuary, using
mortality and interest (unless otherwise specified in this Plan) and
any other assumptions normally used at the time by such actuary in
determining actuarial equivalents under the Retirement Plan.
- 11 -
3.11 Elections
All elections, designations, requests, notices, instructions, and
other communications from an Eligible Employee, Retiree, or other
person to the Committee that are required or permitted under the Plan
shall be in such form as is prescribed from time to time by the
Committee, shall be mailed by Certified or Registered Mail, Return
Receipt Requested, or personally delivered to the principal offices of
the Company, and shall be deemed to have been given and delivered only
upon actual receipt thereof at such location.
3.12 Acceleration of Payment
Notwithstanding any other provision of the Plan to the contrary, the
Company shall make payments of any Grandfathered Benefit hereunder to
a Retiree or Beneficiary before such payments are otherwise due if the
Committee determines, based on a change in the tax or revenue laws of
the United States of America, a published ruling or similar
announcement issued by the Internal Revenue Service, a regulation
issued by the Secretary of the Treasury or his delegate, a decision by
a court of competent jurisdiction involving an Eligible Employee,
Retiree or Beneficiary, or a closing agreement made under Code Section
7121 that is approved by the Internal Revenue Service and involves an
Eligible Employee, Retiree or Beneficiary, that an Eligible Employee,
Retiree or Beneficiary has recognized or will recognize income for
federal income tax purposes with respect to amounts that are or will
be payable to him under the Plan before they are paid to him. In such
cases, any such Retiree or Beneficiary so affected shall receive the
remaining Grandfathered Benefit payments payable to him and, where
appropriate, his Beneficiary in one single payment of Actuarial
Equivalent value to such remaining payments. Upon receipt of such
accelerated payment the provisions of Section 2.10 shall apply to any
Beneficiary of such Retiree. Notwithstanding any other provision of
the Plan to the contrary, the Company shall make payment of any
Section 409A Benefit hereunder to a Retiree or Beneficiary before such
payments are due if, and only to the extent such amount becomes
taxable as a result of a failure to comply with Code Section 409A
requirements in accordance with Treas. Reg. ss.1.409A-3(j)(4)(vii) (or
any successor thereto). Any such payment shall offset the Section 409A
Benefit otherwise due hereunder.
3.13 Construction
(a) The Plan is intended to constitute an unfunded deferred
compensation arrangement for a select group of management or
highly compensated employees and therefore exempt from the
requirements of Sections 201, 301 and 401 of ERISA. All rights
hereunder shall be governed by and construed in accordance with
Code Section 409A and regulations thereunder and, to the extent
such Section and regulations are inapplicable, in accordance with
the laws of the State of Tennessee (without reference to
principles of conflicts of law) and, except to the extent
otherwise herein provided, in accordance with the provisions of
the Retirement Plan.
- 12 -
(b) The masculine pronoun shall mean the feminine wherever
appropriate.
(c) The captions preceding the sections and articles hereof have been
inserted solely as a matter of convenience and in no way define
or limit the scope or intent of any provisions of the Plan.
3.14 Insurance Products
The Company may require each Eligible Employee to assist it in
obtaining life insurance policies on the lives of each Eligible
Employee, which policies would be owned by, and be payable to, the
Company. The Eligible Employee may be required to complete an
application for life insurance, furnish underwriting information
including medical examinations by a life insurance company-approved
examiner, and authorize release of medical history to the life
insurance company's underwriter, as designated by the Company. An
Eligible Employee shall have no right or interest in such policies or
the proceeds thereof.
3.15 Nature of Obligation
No Eligible Employee, Retiree or Beneficiary shall have any interest
in any specific asset of the Company or any Affiliated Company as a
result of the Plan. Nothing contained herein shall be deemed to create
a trust of any kind or any fiduciary relationship between the Company
(or any Affiliated Company) and any Eligible Employee, Retiree or
Beneficiary. Any right to receive any Benefit under the Plan shall
only be the right of a general unsecured creditor.
3.16 Legal Fees
In the event that any claim by an Eligible Employee for payment of any
benefit under the Plan is disputed by the Company or the trustee of
any "rabbi" trust created in connection therewith, or any other
dispute in respect of the Plan or any such trust arises between any
Eligible Employee, the Company and/or such trustee, any such Eligible
Employee shall be promptly reimbursed for all reasonable attorney fees
and expenses incurred by any such Eligible Employee during his or her
lifetime (i) in pursuing any such claim, or (ii) in connection with
any such other dispute. All reimbursements shall be made by the end of
the calendar year following the calendar year in which the expense is
incurred and reimbursement in any year shall not affect the amount of
reimbursement in a subsequent year, provided, however, that no such
payment due with respect to a claim or dispute arising as a result of
a Separation from Service shall be made prior to the six month
anniversary of Separation from Service.
3.17 Tax Gross-Up
(a) Payment. Subject to the requirements stated in this Section 3.17,
in the event that amounts hereunder become subject to the
additional tax and interest under Code section 409A ("409A
additional tax") as a result of a plan document failure or an
operational failure caused solely by the action or inaction of
the Company (and not at the request of the Eligible Employee),
the Company shall pay to the Eligible Employee an amount equal to
such 409A additional tax and any additional taxes imposed upon
the Eligible Employee due to the Company's payment of such 409A
additional tax (a "409A Gross-Up Payment"). In no event, however,
shall any amounts become payable under this Section 3.17 as a
result of compensation required to be included in gross income by
reason of Code section 409A(b)(3). The 409A Gross-Up Payment
shall be paid to the Eligible Employee within five business days
of the date such taxes are remitted to the applicable taxing
authority, subject to the notification requirements set forth in
Section 3.17(b) in the event such taxes are not remitted by
withholding, but in no event later than the end of the Eligible
Employee's taxable year next following the Eligible Employee's
taxable year in which the Eligible Employee remits such taxes.
- 13 -
(b) Notification and Right to Contest. An Eligible Employee shall
notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by
the Company of the 409A Gross-Up Payment. Such notification shall
be given as soon as practicable but no later than (10) ten
business days after such Eligible Employee is informed in writing
of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid.
The Eligible Employee shall not pay such claim prior to the
expiration of the 30-day period following the date on which he
gives such notice to the Company (or such shorter period ending
on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Eligible Employee in writing
prior to the expiration of such period that it desires to contest
such claim, or if the Company notifies the Eligible Employee at
the time of payment of the Gross-Up Payment under Section 3.17(a)
that it desires to contest the application of the 409A additional
tax (in either case, a "claim"), the Eligible Employee shall (i)
give the Company any information reasonably requested by the
Company relating to such claim, (ii) take such action in
connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including
,without limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and (iv) permit the Company to
participate in any proceeding relating to such claim; provided,
however, that the Company shall bear and pay directly all costs
and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and
hold such Eligible Employee harmless, on an after-tax basis, for
any income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment
of costs and expenses. All such costs and expenses incurred due
to a tax audit or litigation addressing the existence of or
amount of a tax liability under this Section 3.17 shall be paid
by the Company within thirty (30) days of the date payment of
such expenses is due, but in any event not later than (A)
December 31 of the year following the year in which the taxes are
remitted to the taxing authority, or (B) where as a result of
such audit or litigation no taxes are remitted, December 31 of
the year following the year in which the audit is complete or
there is a final and nonappealable settlement or other resolution
of the litigation. Without limitation on the foregoing provisions
of this Section 3.17(b), the Company shall control all
proceedings taken in connection with such contest and, at its
sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and the Eligible Employee
shall prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and
in one or more appellate courts, as the Company shall determine;
provided, however, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of
the Eligible Employee with respect to which such contested amount
is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a 409A Gross-Up Payment
would be payable hereunder, and the Eligible Employee shall be
entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing
authority.
- 14 -
(c) Refund. If an Eligible Employee becomes entitled to receive one
or more refunds of all or any part of the 409A additional tax
with respect to which a 409A Gross-Up Payment was made, the
Eligible Employee shall pay the refund to the Company within five
business days of the receipt of any such refund.
(d) Delayed Payment Date. Notwithstanding the foregoing provisions of
this Section 3.17, if under Code section 409A any payment under
this Section 3.17 is considered to be due as a result of the
Eligible Employee's Separation from Service and the stock of the
Company (or the stock of any entity considered a single employer
with the Company under Treas. Reg. ss.1.409A-1(g) or any
successor thereto) is publicly traded on an established
securities market or otherwise at the time of the Participant's
Separation from Service, no payment shall be made pursuant to
this Section 3.17 prior to the six-month anniversary of such
Separation from Service.
ARTICLE 4. AMENDMENT, TERMINATION, OR PARTICIPANT REMOVAL
---------------------------------------------------------
The Board of Directors reserves the right to modify or to amend, in whole or in
part, or to terminate this Plan at any time (including with respect to any
Eligible Employee who has had a Separation from Service). However, no
modification, amendment or termination of the Plan shall reduce the Benefit
being paid to a Retiree as of the date of any such amendment or termination. In
respect of any Eligible Employee, no modification or amendment shall adversely
affect such Eligible Employee, unless such Eligible Employee consents to such
modification or amendment in writing, and, if the Plan is terminated by the
Company, each Eligible Employee shall be entitled to a Benefit calculated under
Article 2 above, based on such Eligible Employee's service and compensation to
the date of such plan termination. Notwithstanding the foregoing, the Board of
Directors reserves the right to modify the Plan at any time without the consent
of any Eligible Employee in order to comply with Code Section 409A and the
regulations and other guidance issued thereunder. With respect to Section 409A
Benefits payment may be made upon termination of the Plan only if permitted
under regulations issued under Code Section 409A.
- 15 -
An Eligible Employee who has not completed five or more years of Credited
Service and reached his Early Retirement Date, may be removed as a participant
from the Plan by the Committee if he terminates employment with the Company or
his position changes so that he is no longer considered a member of senior
management. In such case, the former Eligible Employee shall have no rights to
any Benefit under the Plan, but rather such former Eligible Employee shall only
have those rights that are available to such former Eligible Employee under the
Company's other benefit plans.
IN WITNESS WHEREOF, THOMAS & BETTS CORPORATION has caused this Plan, as
amended, to be duly executed this _______ day of _________________, 2007.
Attest: THOMAS & BETTS CORPORATION
_________________________________ By:____________________________________
Name: Name:
Title: Title:
(Corporate Seal)
- 16 -