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QUEST DIAGNOSTICS INCORPORATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Addendum or Modifications

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Title: QUEST DIAGNOSTICS INCORPORATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Governing Law: New Jersey     Date: 2/17/2009
Industry: Healthcare Facilities     Sector: Healthcare

QUEST DIAGNOSTICS INCORPORATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN, Parties: quest diagnostics incorporated
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Exhibit 10.26

QUEST DIAGNOSTICS INCORPORATED

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(As Amended and Restated Effective November 7, 2008)


QUEST DIAGNOSTICS INCORPORATED

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

TABLE OF CONTENTS

 

 

 

 

 

Page

 

 


 

ARTICLE I DEFINITIONS

 

 

 

 

1.1

Definitions

1

 

 

 

1.2

Rules of Construction

3

 

 

 

ARTICLE II ELIGIBILITY AND PARTICIPATION

 

2.1

Eligibility

4

 

 

 

2.2

Participation

4

 

 

 

ARTICLE III RETIREMENT BENEFIT AND DEATH BENEFIT

 

3.1

Retirement Benefit

5

 

 

 

3.2

Death Benefit

6

 

 

 

ARTICLE IV FORM AND TIMING OF RETIREMENT BENEFIT

 

4.1

Form

8

 

 

 

4.2

Timing

8

 

 

 

ARTICLE V VESTING

 

5.1

Vesting

9

 

 

 

ARTICLE VI ADMINISTRATION

 

6.1

Committee

10

 

 

 

6.2

Claims Procedures

10

 

 

 

ARTICLE VII FUNDING

 

7.1

General Rule

11

 

 

 

ARTICLE VIII AMENDMENT AND TERMINATION

 

8.1

General Rule

12

 

 

 

ARTICLE IX GENERAL PROVISIONS

 

9.1

Payments to Minors and Incompetents

13

 

 

 

9.2

No Contract

13

 

 

 

9.3

Non-Alienation of Benefits

13

 

 

 

9.4

Income Tax Withholding

13

 

 

 

9.5

Governing Law

13

i


 

 

 

9.6

Captions

13

 

 

 

9.7

Severability

13

 

 

 

9.8

Notices

13

 

 

 

Appendix A – Actuarial Assumptions

ii


PREAMBLE

                    Effective December 14, 2004, Quest Diagnostics Incorporated (the “Company”) established this nonqualified defined benefit pension plan referred to as the Supplemental Executive Retirement Plan (the “Plan”) for the benefit of the Chief Executive Officer of the Company.

                    The Plan was amended, effective December 14, 2004, to amend certain definitions and the benefit multiplier.

                    The Plan is hereby amended and restated, effective November 7, 2008, to incorporate the foregoing amendment and to reflect amendments to comply with Section 409A of the Code.

                    The Plan is an unfunded nonqualified pension plan that is intended to qualify as a “top hat plan” for purposes of the Employee Retirement Income Security Act of 1974, as amended. Furthermore, the Plan is intended to satisfy and comply with all requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and shall be interpreted accordingly.


ARTICLE I

DEFINITIONS

                    1.1 Definitions . The following words and phrases when used in the Plan shall have the meanings indicated in this Article I.

                    “ Actuarial Equivalence ” or “ Actuarially Equivalent ” means a benefit of equal value, determined using the actuarial assumptions set forth in Appendix A.

                    “ Annual Bonus ” means the regular annual bonus paid (or which would have been paid but for a deferral election by the Participant) under the Company’s Management Incentive Plan (as amended from time to time and any successor thereto).

                    “ Annuity Forms of Benefit ” means the 50% Joint and Survivor Annuity, the Five-Year Certain Annuity, and the Single Life Annuity. All Annuity Forms of Benefit shall be of Actuarially Equivalent value.

                    “ Base Pay ” means the monthly salary paid to the Participant by the Company (or which would have been paid but for a deferral election by the Participant).

                    “ Beneficiary ” means (a) the Participant’s Spouse if the 50% Joint and Survivor Annuity is elected, or (b) any individual designated in accordance with procedures established by the Committee as the beneficiary, where the Participant has elected the Five-Year Certain Annuity.

                    “ Benefit Starting Date ” means the first day of the calendar month following a Termination from Service Date.

                    “ Board ” means the Board of Directors of the Company.

                    “ Cause ” means “Cause” as defined in Section 10(a) of the Employment Agreement.

                    “ Chief Executive Officer ” or “ Participant ” means Dr. Surya N. Mohapatra.

                    “ Code ” means the Internal Revenue Code of 1986, as amended.

                    “ Committee ” means the committee of the Board designated by the Board to administer the Plan. Unless the Board shall determine otherwise, the Committee shall be the Compensation Committee of the Board.

                    “ Company ” means Quest Diagnostics Incorporated, a Delaware corporation, and any entity that acquires or succeeds to all or substantially all of the Company’s business or assets and any successor to any such entity.

                    “ Credited Service ” means all calendar months of employment with the Company, whether or not consecutive. Calendar months in which a Participant was employed during the month shall be treated as a period of Credited Service.


                    “ Disability ” means “disability” as defined in Section 10(b) of the Employment Agreement.

                    “ Earliest Retirement Date ” means the first day of the calendar month following the completion of 96 months of Credited Service.

                    “ Employment Agreement ” is the Employment Agreement Between Surya N. Mohapatra and Quest Diagnostics Incorporated, as amended and restated effective November 7, 2008, and as may be otherwise amended from time to time thereafter in accordance therewith.

                    “ Employment Term ” means “Employment Term” as defined in the Employment Agreement.

                    “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder.

                    “ 50% Joint and Survivor Annuity ” means a form of payment whereby the benefit is paid in monthly installments commencing on the Benefit Starting Date and continuing for the lifetime of the Participant, with 50% of such amount being paid to the Spouse of such Participant for as long as the Spouse survives after the Participant’s death.

                    “ Final Average Pay ” means an annual amount, determined in accordance with the formula P/Y, where “ P ” is the sum of the Participant’s Base Pay and Annual Bonuses for the highest three complete consecutive calendar years of the Executive’s final five complete calendar years prior to his Termination from Service Date and “ Y ” is three. For this purpose, each Annual Bonus shall be taken into account in the fiscal year for which it is earned, regardless of when paid.

For purposes of determining Final Average Pay, Base Pay and Annual Bonuses shall be determined including amounts that may have been deferred pursuant to any qualified or nonqualified plan of the Company.

                    “ Five-Year Certain Annuity ” means a form of payment whereby the benefit is paid in monthly installments commencing on the Benefit Starting Date and continuing for the longer of (a) the lifetime of the Participant or (b) 60 months.

                    “ Good Reason ” means “Good Reason” as defined in Section 10(d) of the Employment Agreement.

                    “ Lump Sum ” means the single sum benefit that is the Actuarial Equivalent of an immediately commencing Retirement Benefit.

                    “ Normal Retirement Date ” means the first of the month coincident with or next following the Participant’s 62 nd anniversary of birth.

                    “ Plan ” means this Quest Diagnostics Supplemental Executive Retirement Plan, as set forth herein and as amended from time to time in accordance herewith.

                    “ Retirement Benefit ” has the meaning set forth in Section 3.1.

2


                    “ Single Life Annuity ” means a form of payment whereby the benefit is paid in monthly installments commencing on the Benefit Starting Date and continuing for the lifetime of the Participant.

                    “ Spouse ” means the person to whom the Participant is legally married on the Benefit Starting Date.

                    “ Termination from Service Date ” means the date on which the Participant’s employment with the Company terminates; provided, however, for purposes of this Plan with respect to any payment or benefit due upon a termination of the Participant’s employment that represents a “deferral of compensation” within the meaning of Section 409A of the Code, “Termination from Service Date” shall mean the date the Participant has a “separation from service” (within the meaning of Treas. Reg. 1.409A-1(h)).

                    “ Years of Credited Service ” means (a) the number of completed calendar months of Credited Service from the Participant’s original date of hire (taking into account all consecutive and nonconsecutive periods of employment) times 1.13, divided by (b) 12. However, if (a) the Company provides to the Participant a notice of non-renewal of the Employment Agreement (pursuant to Section 2 thereof) which causes the Employment Term to end before he has attained age 60, or (b) the Participant’s employment is otherwise terminated by the Company other than for Cause or is terminated by the Participant for Good Reason before he has attained age 60, then the multiplier shall be 1.29 rather than 1.13. If the Participant’s employment is terminated by the Company other than for Cause or is terminated by the Participant for Good Reason on or after the date the Participant attains age 60 and before the date he attains age 62, then for purposes of calculating the Participant’s “Years of Credited Service” he shall be credited with additional months of Credited Service equal to the excess, if any, of (i) the number of months of severance benefits the Participant is eligible to receive under Section 11(e)(i) of the Employment Agreement (that is 24 months, or 36 months in the case of a CIC Severance Event, as defined therein) over (ii) the number of months of service the Participant has completed from the date he attained age 60 through the Termination from Service Date.

                    1.2 Rules of Construction . The singular form of a word shall be deemed to include the plural form, unless the context requires otherwise. Unless indicated otherwise, references herein to articles and sections are to articles and sections of the Plan.

3


ARTICLE II

ELIGIBILITY AND PARTICIPATION

                  2.1 Eligibility. The Chief Executive Officer is the sole Participant in this Plan.

                  2.2 Participation .

                              (a) Commencement . The Chief Executive Officer shall commence participation on December 14, 2004.

                              (b) Duration . The Participant shall continue to be a Participant as long as he is entitled to a Retirement Benefit under the Plan.

                              (c) Effect of Reemployment .

 

 

 

                         (i) If the Participant incurs a Termination from Service Date for any reason he shall cease to accrue any benefits under this Plan and if he is subsequently reemployed, no Base Salary or Annual Bonus paid after such reemployment nor any Credited Service shall be taken into account in determining any benefit under this Plan.

 

 

 

                         (ii) Notwithstanding anything in the Plan to the contrary, Annuity Forms of Benefit shall not be suspended if the Participant is subsequently reemployed by the Company.

4


ARTICLE III

RETIREMENT BENEFIT AND DEATH BENEFIT

                    3.1 Retirement Benefit .

                              (a) Benefit Starting Date on or After Normal Retirement Date . The annual Retirement Benefit payable to the Participant if his Benefit Starting Date occurs on or after his Normal Retirement Date is a life annuity equal to 1.2% times his Final Average Pay times his Years of Credited Service accrued on or before July 31, 2006, and 2.2% times his Final Average Pay times his Years of Credited Service accrued after July 31, 2006.

                              (b) Benefit Starting Date on or After Earliest Retirement Date . The annual Retirement Benefit payable where the Participant’s Benefit Starting Date occurs on or after his Earliest Retirement Date but before his Normal Retirement Date shall be an immediately commencing life annuity equal to 1.2% times the Participant’s Final Average Pay times his Years of Credited Service accrued on or before July 31, 2006, and 2.2% times his Final Average Pay times his Years of Credited Service accrued after July 31, 2006, reduced by 0.5% for each month that the Benefit Starting Date precedes the Normal Retirement Date.

                             (c) Benefit Starting Date Before Earliest Retirement Date . If the Participant’s employment with the Company is terminated before the Earliest Retirement Date (i) by the Company for Cause, or (ii) by the Participant other than for (x) Good Reason, (y) Disability or (z) death, then no benefit shall be payable from this Plan. If


 
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