Exhibit 10.3
BARNES GROUP INC.
SUPPLEMENTAL SENIOR OFFICER
RETIREMENT PLAN
as amended and restated effective
January 1, 2009
PREAMBLE
Barnes Group Inc. adopted the
Supplemental Senior Officer Retirement Plan (the
“SSORP”) effective April 3, 1996 and amended it
effective December 31, 2007 and further amended it effective
May 30, 2008, and effective January 1, 2009.
To the extent that, prior to
December 31, 2007, any benefits under the SSORP as modified or
supplemented (if at all) by any written individual agreement with a
participant were “grandfathered” from Section 409A
of the Internal Revenue Code (i.e., were compensation to which
Section 409A of the Code does not apply, according to Treasury
Regulation section 1.409A-6 or any other applicable Treasury
Department guidance), such benefits shall be determined in
accordance with, and be governed exclusively by, the provisions of
the SSORP as in effect before December 31, 2007 and such
individual agreement (if applicable).
To the extent that any benefits
accrued under the SSORP before December 31, 2007 were not
“grandfathered” from Section 409A of the Internal
Revenue Code prior to December 31, 2007, and to the extent
that any benefits are accrued under the SSORP on and after that
date, then effective January 1, 2009, such benefits shall be
determined in accordance with, and be governed by, the provisions
of the SSORP as amended effective January 1, 2009, which are
set forth below.
Notwithstanding the preceding
sentence, the provisions of this Plan document (i.e., as amended
effective January 1, 2009) applicable to the computation of
benefits, to the commencement date of such benefits, to the time
and form of payment, and to the selection of an optional form and a
contingent annuitant or beneficiary, as well as any other
provisions of this Plan document that are impossible or
impracticable to apply to benefits already in pay status, shall not
apply to benefits in pay status prior to January 1, 2009, to
the extent such provisions are not required to apply pursuant to
guidance prescribed by the Treasury Department under
Section 409A of the Internal Revenue Code (including, but not
limited, to, section XII.F of the preamble to the final regulations
under such Section 409A and section 3.02 of IRS Notice
2007-86); rather, the applicable terms
Page 1 of 24
of the Plan in effect prior to January 1,
2009, as modified or supplemented (if at all) by any written
individual agreement with a participant in accordance with
Section 409A of the Internal Revenue Code and Treasury
Department guidance thereunder, construed and supplemented as
necessary in accordance with applicable provisions of
Section 409A of the Internal Revenue Code and Treasury
Department guidance thereunder, shall apply to such benefits. To
the extent permissible under applicable provisions of
Section 409A of the Internal Revenue Code and Treasury
Department guidance thereunder, this paragraph also shall apply to
benefits not yet in pay status prior to January 1, 2009 but
with respect to which all events necessary to receive the payment
have occurred before January 1, 2009. For the avoidance of
doubt, this paragraph shall not apply to any benefits to which the
second sentence of this Preamble (relating to
“grandfathered” benefits) applies.
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SECTION 1
DEFINITIONS
The words and phrases defined
hereinafter shall have the following meaning unless a different
meaning is clearly required by the context of the Plan.
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1.1
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“
Benefits Committee ” shall mean the Benefits
Committee appointed by the Board or its successor.
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1.2
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“
Board ” shall mean the Board of Directors of
Barnes Group Inc., or its successor.
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1.3
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“
Code ” shall mean the Internal Revenue Code of
1986, as amended, or as it may be amended from time to
time.
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1.4
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“
Committee ” shall mean the Compensation and
Management Development Committee of the Board or its
successor.
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1.5
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“
Company ” shall mean Barnes Group Inc. and each
subsidiary and affiliated corporation that has adopted the Plan for
the benefit of one or more employees.
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1.6
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“
Compensation ” with respect to any period in
which the Participant earns Credited Service, shall mean the sum of
(a) the Participant’s “Compensation”, as
defined by the Qualified Plan, for such period, except that any
such “Compensation” that is attributable to any period
after a Participant’s Separation from Service on or after
May 30, 2008 shall be excluded, and (b) bonuses paid
pursuant to the Management Incentive Compensation Plan and the
Performance-Linked Bonus Plan for Selected Executive Officers, or
any successor plans, in all cases subject to any special rules on
Compensation set forth in other provisions of this Plan. A bonus
described herein shall be attributed to months of the year in which
the bonus was earned, by prorating the bonus over the number of
months worked by the Participant in that calendar year. In
determining the benefits provided under this Plan, the limits of
Code Section 401(a)(17) shall not apply.
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1.7
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“ Credited
Service ” shall mean “Credited Service”
as defined by the Qualified Plan, excluding any such
“Credited Service” that is attributable to any period
after a Separation from Service on or after May 30, 2008, in
all cases subject to any special rules on Credited Service set
forth in other provisions of this Plan. Notwithstanding the
foregoing, the determination of a Participant’s Credited
Service also shall take into account the provisions of any
applicable written employment or other individual agreement between
the Company and that
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Page 3 of 24
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Participant, including, but not
limited to, any distinctions under such an agreement between credit
for purposes of eligibility to receive a benefit and credit for
purposes of computation of a benefit, provided that no credit shall
be provided pursuant to such an agreement for any period after a
Separation from Service on or after May 30, 2008.
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1.8
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“
Early Retirement Date ” shall mean the date on
which a Participant has a Separation from Service (other than by
reason of death) that is (a) before the date the Participant
reaches age 62 and completes 10 years of Credited Service, and
(b) on or after the date the Participant has attained age 55
and completed 5 years of Credited Service.
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1.9
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“
Effective Date ” shall be January 1,
1996.
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1.10
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“
Final Average Compensation ” shall mean the
product of (a) and (b), where (a) equals the amount
determined when the Participant’s highest 60 months of
Compensation, whether or not consecutive, during his last 120
months of employment (or all months of employment, if fewer than
120) are averaged, and (b) equals 12.
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1.11
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“Group I Participant”
means an individual designated as
such in Appendix A.
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1.12
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“Group II
Participant” means an individual designated as such in
Appendix A.
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1.13
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“
Normal Retirement Date ” shall mean the date on
which a Participant has a Separation from Service (other than by
reason of death) that is on or after the date the Participant has
attained age 62 and completed 10 years of Credited
Service.
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1.14
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“
Participant ” shall mean a Group I Participant
or a Group II Participant.
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1.15
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“
Plan ” shall mean the Barnes Group Inc.
Supplemental Senior Officer Retirement Plan, as amended and set
forth herein or in any amendment hereto.
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1.16
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“
Prior Employer Benefit ” shall have the meaning
set forth in Section 3.
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1.17
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“
Qualified Plan ” shall mean the Barnes Group
Inc. Salaried Retirement Income Plan as amended and in effect from
time to time, a pension plan which is intended to satisfy the
requirements for qualification under Section 401(a) of the
Code.
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1.18
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“
Qualified Plan Benefit ” shall have the meaning
set forth in Section 3.
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1.19
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“ Separation from
Service ” shall mean a “separation from
service” from the Company and all corporations and other
trades or businesses aggregated with the Company, as determined
under rules set forth in Treasury Regulation section
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Page 4 of 24
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1.409A-1(h), as in effect from time
to time, or a successor thereto. If there is a question as to
whether a Participant’s employment has been terminated or his
employment relationship remains intact on account of the types of
absences described in (a), (b), and (c) below, the following
rules (to be interpreted consistent with Treasury Regulation
section 1.409A-1(h)) shall apply:
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(a) The employment relationship
shall be treated as continuing intact while the Participant is on
military leave, sick leave, or other bona fide leave of absence if
the period of such leave does not exceed six months, or if longer,
so long as the Participant retains a right to reemployment with the
Company under an applicable statute or by contract. If the period
of leave exceeds six months and the Participant does not retain a
right to reemployment under an applicable statute or by contract,
the employment relationship is deemed to terminate on the first
date immediately following such six-month period.
(b) For purposes of this
Section 1.19, a leave of absence constitutes a “bona
fide” leave of absence only if there is a reasonable
expectation that the Participant will return to perform services
for the Company.
(c) Notwithstanding the foregoing,
where (i) a leave of absence is due to any medically
determinable physical or mental impairment that can be expected to
last for a continuous period of not less than six months, and
(ii) such impairment causes the Participant to be unable to
perform the duties of his position of employment or any
substantially similar position of employment, a 29-month period of
absence shall be substituted for the six-month period described in
paragraph (a) hereof, regardless of whether the Participant
retains a contractual right to reemployment, unless the employment
relationship is otherwise terminated by the Company or the
Participant.
The foregoing provisions, including
but not limited to paragraph (c) hereof, shall apply to
determine whether there has been a termination of employment and,
therefore, a Separation from Service, and shall have no effect on
whether a Participant incurs a Disability within the meaning of
Section 6 hereof and thereby becomes subject to the provisions
of Section 6.
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1.20
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“
Social Security Benefit ” shall have the
meaning set forth in Section 3.
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1.21
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“Specified Employee”
shall mean a “Specified
Employee” within the meaning of Treasury Regulation section
1.409A-1(i) as in effect from time to time, as determined in
accordance with Section 7 below.
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1.22
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“Spouse” shall mean the individual to whom the
Participant is legally married by civil or religious ceremony under
the laws of the state in which the Participant is legally domiciled
on the date the determination of whether there is a Spouse is being
made. After a Participant’s death, his “Spouse”
shall be the individual, if any, who met these criteria as of the
date of the Participant’s death.
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SECTION 2
PURPOSE OF PLAN
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2.1
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Purpose . The Plan is designed to provide supplemental
retirement benefits to selected executives of the Company. Such
benefits shall be payable out of the general assets of the Company.
Notwithstanding the foregoing, in the discretion of the Committee,
the Company may enter into one or more grantor trusts (sometimes
known as “rabbi trusts”) for the purpose of financing
part or all of its obligations under the Plan.
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Page 6 of 24
SECTION 3
RETIREMENT BENEFITS FOR GROUP I
PARTICIPANTS
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3.1
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Retirement Benefit Conditions.
Subject to Section 8.8, a Group
I Participant shall be entitled to a benefit under the Plan if his
Separation from Service occurs on a Normal Retirement Date. A Group
I Participant also shall be entitled to a benefit under the Plan if
(a) his Separation from Service occurs on an Early Retirement
Date, and (b) his retirement was either requested by the
President and Chief Executive Officer of the Company and approved
by the Committee or was requested and approved by the Committee;
provided, however, that the provisions of (b) hereof shall not
apply to a Participant with at least 10 years of Credited Service.
A Group I Participant who has a Separation from Service under
conditions other than those described above (disregarding for this
purpose death and any cessation of work on account of Disability,
as defined in Section 6) shall not be entitled to any benefits
under the Plan.
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3.2
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Benefit
for Normal Retirement. A Group I Participant who is entitled to a
benefit on account of a Normal Retirement Date pursuant to
Section 3.1 and who has not incurred a Disability shall be
entitled to receive a lifetime monthly “Normal Retirement
Benefit” payable as of the first day of the month following
the Participant’s Normal Retirement Date (the “
Benefit Commencement Date ”) which benefit shall
actually commence within the 90-day period beginning on the
Participant’s Benefit Commencement Date (but subject to
Section 7.1) and continue on the first day of each month after
actual commencement (with regard to Section 7.1) during the
lifetime of the Group I Participant. The Participant’s
monthly Normal Retirement Benefit shall be equal to one-twelfth of
the amount determined under the following steps.
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Step 1 . Multiply 55% of the Participant’s Final
Average Compensation by the ratio (not to exceed 1.0) of his
Credited Service to fifteen (15).
Step 2 . Subtract the Participant’s Social
Security Benefit.
Step 3 . Subtract the Participant’s Prior
Employer Benefit.
Step 4 . Subtract the Participant’s Qualified
Plan Benefit.
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3.3
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Benefit for Early
Retirement. A Group I
Participant who is entitled to a benefit on account of an Early
Retirement Date pursuant to Section 3.1 and who has not
incurred a Disability shall be entitled to receive a lifetime
“Early Retirement Benefit” payable as of the first day
of the month following the Participant’s Early
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Page 7 of 24
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Retirement Date (the “
Benefit Commencement Date ”), which benefit shall
actually commence within the 90-day period beginning on the
Participant’s Benefit Commencement Date (but subject to
Section 7.1) and continue on the first day of each month after
actual commencement (with regard to Section 7.1) during the
lifetime of the Group I Participant. Computation of the benefit
shall be the same as for the Normal Retirement Benefit under
Section 3.2, except as follows:
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(a) In Step 1, 55% of the
Participant’s Final Average Compensation shall be multiplied
by the ratio (not to exceed 1.0) of the Group I Participant’s
Credited Service to the greater of (i) fifteen (15), or
(ii) the Credited Service the Participant would have completed
had Credited Service continued to age 62.
(b) Between Steps 3 and 4, insert a
Step 3A under which the amount obtained at the end of Step 3 is
multiplied by the appropriate factor from the following table,
based on the Participant’s age as of his Benefit Commencement
Date (without regard to Section 7.1), with factors for ages
not shown interpolated:
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Factor
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61
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96.4
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%
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60
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92.8
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%
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59
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89.2
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%
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58
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85.6
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%
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57
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82.0
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%
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56
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78.4
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%
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55
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74.8
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%
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3.4
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Definition of Terms. For purposes of determining the benefits payable
to Group I Participants pursuant to this Section 3, the
following terms shall have the following meanings:
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(a) “Qualified Plan
Benefit” shall mean the annual amount of pension
benefit under the Qualified Plan that is or would be payable
immediately as a single life annuity as of the Participant’s
Benefit Commencement Date (without regard to Section 7.1),
using the Qualified Plan’s actuarial assumptions or factors
relating to forms of benefit and early commencement, as the case
may be. Notwithstanding the foregoing, the Qualified Plan Benefit
shall be computed by excluding any portion of the benefit under the
Qualified Plan attributable to (i) any period after the
Participant’s Separation from Service on or after
May 30, 2008, and (ii) any compensation in any period
after the Participant’s Separation from Service on or after
May 30, 2008. If amendments or other modifications that have
been made to the Qualified Plan would, but for this sentence,
result in an impermissible acceleration or deferral of the
Participant’s benefits under this Plan under
Section 409A of the Code and Treasury Regulations thereunder,
such Qualified Plan amendment or other modification shall be
disregarded in computing the benefits due the Participant under
this Plan.
Page 8 of 24
(b) “Social Security
Benefit” shall mean a Participant’s estimated
annual Social Security Benefit, which reflects any reduction for
commencement prior to a Participant’s Social Security
Retirement Age or any delayed retirement credit for commencement
after his Social Security Retirement Age, as determined under the
Social Security Act in effect on the January 1 preceding the
Participant’s Benefit Commencement Date (without regard to
Section 7.1), and based upon the following
assumptions:
(i) The Participant had no earnings
during the calendar year which includes the date his employment
with the Company terminates or, if earlier, the date of his
Separation from Service on or after May 30, 2008, or in any
subsequent calendar year.
(ii) The Participant’s
earnings in each prior year are equal to the maximum amount of
wages subject to old age survivor and disability insurance tax
under the Federal Insurance Contributions Act.
(iii) Benefits
commence on the Participant’s Benefit Commencement Date if
the Participant’s Benefit Commencement Date occurs on or
after the Participant’s 62 nd birthday.
(iv) In the event the
Participant’s Benefit Commencement Date is prior to age 62,
his Social Security Benefit shall equal the Social Security Benefit
otherwise payable at age 62.
(c) “Prior Employer
Benefit” shall mean the annual benefit, if any, to
which a Participant is entitled from a Code Section 401(a)
tax-qualified defined benefit plan (including, for this purpose,
any cash balance or other hybrid plan treated as a defined benefit
plan under the Code’s tax-qualification rules) maintained by
the employer that, immediately prior to the Participant’s
employment with the Company, employed the Participant, computed in
the form of a single life annuity commencing upon the
Participant’s attainment of age 62 (or the actuarial
equivalent thereof, determined by the Company’s actuary
pursuant to actuarial assumptions or factors used under the
Qualified Plan, if a Participant’s Separation from Service
occurs after age 62).
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3.5
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Normal
Form of Payment. The
normal form of payment under this Plan for a Group I Participant is
a single life annuity: a benefit payable monthly for the lifetime
of the Participant, with the first payment to be due on the Benefit
Commencement Date specified in Section 3.2 or 3.3, as the case
may be, and the last payment to be due on the first day of the
calendar month in which death occurs. Consistent with
Section 7.1, any payment due for a month prior to the month in
which benefits actually commence shall be paid when benefits
actually commence, with no adjustment for interest.
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Page 9 of 24
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3.6
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Optional
Forms of Payment. In
lieu of the normal form of payment, a Participant may elect to
receive his benefit in one of the following optional forms, subject
to the provisions of this Section 3:
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(a) Joint and Contingent Annuity. In
lieu of the normal form of payment, a Participant may elect to
receive his benefit in a joint and contingent annuity form, which
is a benefit payable monthly for the lifetime of the Participant
with a benefit equal to 25%, 50%, 75%, or 100% (as selected by the
Participant) of such benefit payable monthly to the Contingent
Annuitant, commencing after the death of the Participant, for the
lifetime of the Contingent Annuitant.
(b) Ten Year Certain and Continuous
Annuity. In lieu of the normal form of payment, a Participant may
elect to receive his benefit as a Ten Year Certain and Continuous
Annuity, which is a benefit payable monthly for the lifetime of the
Participant and, in the event of the Participant’s death
prior to receiving 120 monthly payments, payable monthly to a named
Beneficiary until the Participant and Beneficiary together have
received 120 monthly payments. If both the Participant and the
Beneficiary die before 120 payments have been made, payments shall
be made to the Participant’s estate until a total of 120
monthly payments have been made.
A Participant’s election of an
optional form generally shall be effective only if made by the
close of the 30-day period beginning on the Participant’s
Benefit Commencement Date; provided, however, that the Committee
may prescribe another period for electing an optional form. In the
event that a Participant elects a Joint and Contingent Annuity and
the Contingent Annuitant designated by the Par
