SUPPLEMENTARY PENSION
PLAN
(As Amended and Restated on
October 16, 2008, effective as of January 1,
2009)
SUPPLEMENTARY PENSION
PLAN
Pall Corporation,
a New York corporation (hereinafter called the
“Corporation”), recognizes the contributions to its
growth and success which have been made by certain key officers
employed by the Corporation and desires to retain the services of
such individuals and to assure the Corporation of the continued
benefit of their experience and advice. Accordingly, the
Corporation has decided to provide such individuals with deferred
compensation payable to or for their benefit which, together with
the other retirement benefits payable to such individuals from the
Corporation and under Title II of the Social Security Act, will
assure such individuals of sufficient funds during
retirement.
As used in this
Pall Corporation Supplementary Pension Plan (hereinafter called the
“Plan”), the following terms shall have the meanings
described in this Article I:
Section 1.1
“ Affiliated Corporation ” means a member of a
controlled group of corporations of which the Corporation is a
member. For purposes hereof, a “controlled group of
corporations” means a controlled group of corporations as
defined in section 1563(a) of the Internal Revenue Code, determined
without regard to Section 1563(b)(2)(C).
Section 1.2
“ Board of Directors ” means the board of
directors of the Corporation.
Section 1.3
“ Committee ” means the Committee appointed and
acting for the time being pursuant to Article VI.
Section 1.4
“ Compensation ” means, for any Plan Year, the
total of all salary, incentive compensation and other bonus
payments (a) payable for such Plan Year to the Member from all
Affiliated Corporations plus (b) amounts which would have been
payable for such Plan Year to the Member from Affiliated
Corporations but for the Member’s election to contribute such
amounts to any employee benefit plan or program (including but not
limited to the Pall Corporation 401(k) Plan, any “cafeteria
plan” and the Management Stock Purchase Plan and Employee
Stock Purchase Plan adopted in 1999) pursuant to a salary reduction
or deduction agreement. The term “Compensation” does
not include any fringe benefits such as, but not limited to the
provision of an automobile or cash in lieu thereof, stock options,
stock appreciation rights, initial award or matching restricted
stock units under the Management Stock Purchase Plan, or other
employer contributions by the Affiliated Corporations to all or any
employee retirement or benefit plans or programs, including but not
limited to the Pall Corporation 401(k) Plan and Supplementary
Profit-Sharing Plan.
Section 1.5
“ Consumer Price Index ” means the
“Consumer Price Index for all Urban Consumers for New York
– Northern New Jersey – Long Island, NY-NJ-CT”
compiled and published by the Bureau of Labor Statistics of the
United States Department of Labor or any successor index
thereto.
Section 1.6
“ Disabled ” means that the Member is, by reason
of physical or mental disability, incapable of performing the
Member’s principal duties for an aggregate of 130 working
days out of any period of twelve consecutive months.
Section 1.7
“ Early Retirement Date ” means the last day of
the month coinciding with or immediately following the later of
(a) the date on which the Member attains age 60 and
(b) the date on which the Member’s pension under the
Plan vests in accordance with Section 2.1.
Section 1.8
“ Effective Date ” means August 1,
1978.
Section 1.9
Except as otherwise provided for specified Members in
Appendix A hereto, “ Final Average Compensation
” means one-third of the aggregate of the Member’s
Compensation for the three (3) Plan Years in which his or her
Compensation was highest out of the last five (5) or fewer Plan
Years in which he or she was a Member. If a person has been a
Member for less than three full Plan Years, Final Average
Compensation means the greater of (a) if he or she was a
Member for only one full Plan Year, then his or her Compensation
for that Plan Year or if he or she was a Member for two full Plan
Years, then the average of his or her Compensation for those two
Plan Years and (b) the average of his or her Compensation for
all Plan Years in which he or she was a Member. In determining
Compensation for a Plan Year for the purpose of the two preceding
sentences, the Member’s Compensation for the entire Plan Year
shall be taken into account even if he or she was not a Member for
the entire Plan Year.
Section 1.10
“ Former Member ” means a person who at the time
he or she ceased to be a Member was entitled to benefits under
Article II or Article III.
Section 1.11
“ Member ” means:
(a) each
person who on the Effective Date (i) had a written contract in
effect with the Corporation concerning his or her performance of
services for the Corporation, (ii) was an officer of the
Corporation and (iii) was a member of the Qualified Pension
Plan;
(b) each
person who on February 10, 1982 or on any subsequent date
prior to January 1, 1997 meets all of the following three
conditions: (i) has a written contract in effect with the
Corporation concerning his or her performance of services for the
Corporation which contract does not provide that membership in the
Plan is waived, (ii) is an officer of the Corporation (either
a corporate officer elected by the Board of Directors or a
divisional or non-corporate officer appointed by the President or
the chief executive officer of the Corporation pursuant to the
by-laws), and (iii) is a member of the Qualified Pension
Plan;
(c) Each
person who on January 1, 1997 or on any date thereafter meets
all of the following three conditions: (i) is an officer of
the Corporation residing in the United States (either a corporate
officer elected by the Board of Directors or a divisional or
non-corporate officer appointed by the chief executive officer
pursuant to the by-laws), (ii) is a member of the Qualified
Pension Plan; and (iii) has been approved in writing by the
chief executive officer for membership in the Plan; and
(d) Each
other person specified in Appendix B hereto.
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A person who is
ineligible to Retire under Article III shall cease to be a
Member on the day his or her employment with the Corporation and
all other Affiliated Corporations terminates. A person shall also
cease to be a Member on the date he or she Retires under
Article III or dies.
Section 1.12
“ Normal Retirement Date ” means the last day of
the month coinciding with or immediately following the date a
Member attains age 65.
Section 1.13
“ Other Retirement Program ” means (i) the
Qualified Pension Plan; (ii) the Pall (UK) Pension Fund;
(iii) in the case of a person who becomes a Member or after
August 1, 2003, the Pall Supplementary Pension Scheme and the
Pall Executive Pension Scheme; and (iv) in the case of a
person who becomes a Member after July 11, 2000 and who is
subsequently transferred to an Affiliated Corporation outside the
United States, any pension or retirement benefit, plan or program
(including government sponsored pension programs) covering
employees of such Affiliated Corporation in which such Member
accrues a vested benefit.
Section 1.14
“ Plan Year ” means the twelve consecutive month
period beginning on August 1 and ending on July 31 of the
following year.
Section 1.15
“ Primary Social Security Benefit ” means the
following:
(a) in the
case of a Member entitled to a pension under Section 3.1 or
Section 3.4, the annual old-age insurance benefit payable to
the Member on his or her Normal Retirement Date, as computed under
the provisions of Title II of the Social Security Act in effect on
his or her Normal Retirement Date and, in the case of a person who
becomes a Member on or after August 1, 2003, as computed under
the provisions of any similar governmental old-age insurance
benefit program of any country other than the United States
(including but not limited to the UK State Pension Scheme) if and
to the extent applicable to such Member;
(b) in the
case of a Member entitled to a pension under Section 2.2 or
Section 3.2, the annual old-age insurance benefit payable to
the Member on his or her Normal Retirement Date, as computed under
the provisions of Title II of the Social Security Act in effect on
the date his or her pension commences under Section 2.2 or
Section 3.2 and, in the case of a person who becomes a Member
on or after August 1, 2003, as computed under the provisions
of any similar governmental old-age insurance benefit program of
any country other than the United States (including but not limited
to the UK State Pension Scheme) if and to the extent applicable to
such Member; in making such computation in the case of a Member
entitled to a pension under Section 2.2, it will be assumed
that the Member will continue to receive “ wages
” as defined in Title II of the Social Security Act in each
Plan Year until his or her Normal Retirement Date in the same
amount as the Compensation he or she received in the last Plan Year
during which he or she was a Member for the entire Plan Year;
and
(c) in the
case of a Member entitled to a pension under Section 3.3, the
annual disability benefit payable to the Member under the
provisions of Title II of the Social Security Act in effect on the
date his or her pension commences under Section 3.3 and, in
the case of a person who becomes a Member on or after
August 1, 2003, as computed under the provisions of any
similar governmental old-age insurance benefit program of any
country other than the
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United States
(including but not limited to the UK State Pension Scheme) if and
to the extent applicable to such Member.
The Committee may
adopt rules governing the computation of the Primary Social
Security Benefit which shall be uniformly applicable to all persons
similar situated. The non-receipt by a Former Member of his or her
Primary Social Security Benefit because of failure to apply for the
same, continued employment, or for any other reason, shall be
disregarded.
Section 1.16
“ Qualified Domestic Trust ” means a trust
described in section 2056A of the Internal Revenue Code of 1986, as
amended.
Section 1.17
“ Qualified Pension Plan ” means the plan
qualified under Section 401(a) of the Internal Revenue Code which
was originally known as the Pall Corporation Retirement Plan,
subsequently known as the Pall Corporation Pension Plan and,
effective November 1, 1999, became known as the Pall
Corporation Cash Balance Pension Plan.
Section 1.18
“ Retirement ” (including references to
“Retired” or “Retires”) shall mean the
(i) the cessation of a Member’s employment with the
Corporation and all of its Affiliated Corporations irrespective of
the reason therefor and irrespective of whether initiated by the
Corporation, an Affiliated Corporation, the Member or otherwise,
and (ii) for Members subject to taxation in the United States,
a “separation from service,” as defined in
Section 409A.
Section 1.19
“ Section 409A ” shall mean
Section 409A of the Internal Revenue Code of 1986, as amended,
the regulations promulgated thereunder, and any successor
legislation or regulations.
Section 2.1
(a) Normal Vesting . Each Member who Retires for any reason
(other than his or her death) under circumstances in which he or
she is not entitled to retirement benefits under any of the
provisions of Article III shall, subject to the provisions of
Section 4.3, be entitled to a vested pension in the amount,
and payable at such time, as provided in this Article II,
provided , however , that, notwithstanding the
foregoing, a person who becomes a Member on or after
February 10, 1982 shall not be entitled to a vested pension
under this Article unless he or she is an employee of an Affiliated
Corporation on either
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(i)
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his
or her 60th birthday or, if later, the fifth anniversary of
becoming a Member of the Plan, or
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(ii)
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the
date on which he or she has been employed by an Affiliated
Corporation or Corporations for a period of
25 years.
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In addition, any
Member who has held the position of Executive Vice President of the
Corporation at any time after February 10, 1982 shall be
entitled to a vested pension under this Article.
(b) Upon
Change in Control . In addition to the vesting provided for in
Section 2.1(a), upon the occurrence of a Change in Control (as
hereinafter in this paragraph defined) each Member who
(A) Retires for any reason (other than his or her death) under
circumstances in which he or she is not entitled to retirement
benefits under any of the provisions of Article III and (B)
who was a member of the Executive Management Team of the
Corporation at any time during the 30-day period immediately
preceding the occurrence of such Change in Control shall, subject
to the provisions of Section 4.3, be entitled to a vested
pension in the amount, and payable at such time, as provided in
this Article. A “Change in Control” for purposes of
this Section 2.1(b) shall mean the occurrence of any of the
following:
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(i)
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the
“Distribution Date” as defined in Section 3 of the
Rights Agreement dated as of November 17, 1989 between the
Corporation and United States Trust Company of New York as Rights
Agent, as amended by Amendment No. 1 to Rights Agreement dated
April 20, 1999 and as the same may have been further amended
or extended to the time in question or in any successor agreement
(the “Rights Agreement”); or
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(ii)
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any
event described in Section 11(a)(ii)(B) of the Rights
Agreement; or
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(iii)
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any
event described in Section 13 of the Rights Agreement,
or
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(iv)
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the
date on which the number of duly elected and qualified directors of
the Corporation who were not either elected by the
Corporation’s Board of Directors or nominated by the Board of
Directors or its Nominating Committee for election by the
shareholders shall equal or exceed one-third of the total number of
directors of the Corporation as fixed by its by-laws.
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Section 2.2
Amount and Payment of Vested Pension . The vested pension
shall be a monthly pension commencing on the first day of the month
after such Former Member has attained his or her Early Retirement
Date. The monthly pension under this Section shall be equal to the
amount computed under Section 3.1, without any reduction if
the pension of such Former Member commences prior to his or her
Normal Retirement Date.
Section 2.3
Death Benefit to Spouse . If a Member dies after becoming
entitled to a vested pension but prior to becoming entitled to
retirement benefits under any of the provisions of
Article III, and prior to the commencement of the payment of
his or her pension under this Article, and if such Member is
survived by a spouse to whom he or she has been lawfully married
for at least one year prior to his or her death, then such spouse
shall be entitled to receive a monthly pension for life, commencing
on the first day of the month following the date of the
Member’s death or, if later, the date that would have been
the Member’s Early Retirement Date if he or she had not died.
The monthly pension under this Section shall be equal to fifty
percent (50%) of the pension, computed in accordance with
Section 3.1, the Member would have been
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entitled to
receive if he or she had retired on the later of his or her Early
Retirement Date or the date of his or her death.
Notwithstanding
the foregoing, if a federal estate tax marital deduction is
available for amounts passing to a Member’s spouse only if
such amounts pass in a Qualified Domestic Trust, then the amounts
otherwise payable to such spouse pursuant to this Section 2.3
upon the Member’s death shall not be paid to such spouse but
shall be paid, instead, to a Qualified Domestic Trust, if the
Member has so directed either (x) in a written instrument
executed by the Member and filed with the Committee (and not
revoked by him prior to his or her death) or (y) in the
Member’s last will and testament. Any payments to be made to
a Qualified Domestic Trust pursuant to the preceding sentence shall
be made in the same amounts, and at the same times, as such
payments would have been made if payable directly to the
Member’s spouse in the absence of such direction.
Section 3.1
Normal Retirement Pension . Each Member who Retires on his
or her Normal Retirement Date shall be entitled to receive a
monthly pension commencing on the first day of the month following
his or her Normal Retirement Date. The monthly pension payable
under this Section shall be equal to one-twelfth (1/12) of the
amount determined as follows:
(a) fifty
percent (50%) of the Member’s Final Average Compensation
(seventy percent (70%) as to a Member who on March 16, 1987
held the office of Executive Vice President of the Corporation),
reduced by
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(i)
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the
total annual pension payable to the Member under all Other
Retirement Programs (excluding any portion thereof attributable to
contributions to such Other Retirement Programs by such Member),
and
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(ii)
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the
Member’s Primary Social Security Benefit.
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For purposes of
this Section, the amount of the pension payable to the Member under
any Other Retirement Program shall be deemed to be the amount
payable thereunder to the Member in the form of a single life
annuity for the Member’s life beginning on the date the
monthly pension under this Plan commences (the “Commencement
Date”), whether or not the Member receives payment of such
pension in such form or at such time. In the case of a reduction in
a monthly pension by virtue of clause (b)(i) next above, any
foreign currency in which the annual pension under any Other
Retirement Program is payable shall be translated into U.S. dollars
initially at the exchange rate reported by the Wall Street Journal
in its issue published on or nearest to the Commencement Date and
such exchange rate shall remain in effect until the first
anniversary of the Commencement Date. On such first and each
subsequent anniversary of the Commencement Date, the monthly
pension payable hereunder during the preceding 12 months shall
be recalculated based on the rate in the Wall Street Journal in its
issue published on or nearest to each dates on which a monthly
pension payment hereunder is payable and the
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difference
between the amount deducted during the preceding 12 months and
the recalculated amount, if in favor of the Member, shall be paid
to him or her (or surviving spouse if a surviving spouse is the
payee) with the next monthly payment or, if in favor of the
Corporation, shall be deducted from the next monthly payment or
payments due to the Member (or surviving spouse) hereunder. On each
anniversary of the Commencement Date, the amount of the reduction
in the monthly pension hereunder pursuant to clause (b)(i) next
above shall be recalculated based on the exchange rate reported by
the Wall Street Journal in its issue published on or nearest to
such anniversary and that rate shall be used in determining the
amount of the monthly pension payable hereunder for the ensuing
12 months, until the next annual recalculation provided for
above.
Section 3.2
Early Retirement Pension . A Member who has attained his or
her Early Retirement Date may retire on the last day of any month
which is not less than thirty (30) days after he or she has
filed a written request for Retirement on such day with the
Committee. In such event, a Member shall be entitled to receive a
monthly pension commencing on the first day of the month after his
or her or her Retirement. The monthly pension under this Section
shall be equal to the amount computed under Section 3.1,
without any reduction because payment commences prior to his or her
Normal Retirement Date.
Section 3.3
Disability Retirement Pension . A Member who Retires as a
result of becoming Disabled shall be entitled to receive a monthly
pension commencing on the first day of the month after such
disability has continued for six months and continuing only during
such period during which such Member is Disabled.
Notwithstand
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