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ASHLAND INC. NONQUALIFIED EXCESS BENEFIT PENSION PLAN

Employee Benefits Plan Agreement

ASHLAND INC. NONQUALIFIED EXCESS BENEFIT

PENSION PLAN | Document Parties: ASHLAND INC. You are currently viewing:
This Employee Benefits Plan Agreement involves

ASHLAND INC.

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Title: ASHLAND INC. NONQUALIFIED EXCESS BENEFIT PENSION PLAN
Governing Law: Kentucky     Date: 11/26/2008
Industry: Fabricated Plastic and Rubber     Sector: Basic Materials

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EXHIBIT 10.6

ASHLAND INC. NONQUALIFIED EXCESS BENEFIT

PENSION PLAN

Effective January 1, 2005  


WHEREAS , the Employee Retirement Income Security Act of 1974 (“ERISA”) establishes maximum limitations on benefits and contributions for retirement plans which meet the requirements of Section 401(a) of the Internal Revenue Code of 1986, as amended (“Code”);

WHEREAS , Ashland Inc. (“Ashland” or the “Company”) maintains certain pension plans which are subject to the aforesaid limitations on benefits and contributions;

WHEREAS , new rules were enacted effective January 1, 2005 affecting certain nonqualified plans;

WHEREAS , Ashland desires to comply with those new rules;

NOW, THEREFORE , effective January 1, 2005, except as may otherwise be provided, Ashland does hereby amend and restate the Ashland Inc. Nonqualified Excess Benefit Plan in accordance with the following terms and conditions:

1.            Designation and Purpose of Plan .  The Plan is designated the “Ashland Inc. Nonqualified Excess Benefit Pension Plan” (“Plan”).  The purpose of the Plan is to provide benefits for certain employees in excess of the limitations on contributions, benefits, and compensation imposed by Sections 415 and 401(a)(17) of the Code (including successor provisions thereto) on the plans to which those Sections apply.  The portion of the Plan providing benefits in excess of the Section 415 limits is an “excess benefit plan” as that term is defined in Section 3(36) of ERISA.  It is intended that the portion, if any, of the Plan that is not an excess benefit plan shall be maintained primarily for a select group of management or highly compensated employees.

 

This Plan is effective January 1, 2005, except as may otherwise be provided.  Amendment No. 1 to the Plan that was effective December 31, 2004 shall be null and void and treated as though never adopted.  For purposes of the Plan, the terms “Specified Employee,” “Termination of Employment” and “Effective Retirement Date” shall have the same definitions as they have in the Ashland Inc. Supplemental Early Retirement Plan for Certain Employees, or its successor (“SERP”); provided, however, effective on and after October 1, 2008, and for Terminations of Employment occurring thereafter, such term shall be applied by substituting “three years” for “five years.”

2.            Eligibility .  Subject to Section 11, the Plan shall apply to those employees (referred to as eligible employees) -

(i)           who have retired as an early, normal, or deferred normal retiree under the provisions of the Ashland Inc. and Affiliates Pension Plan (“Ashland Pension Plan”), as it may be amended, from time to time, or under provisions of any other retirement plan, as such other plan may be

 

 

 

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amended from time to time, which, from time to time, is specifically designated by Ashland for purposes of eligibility and benefits under the Plan (all such plans, including the Ashland Pension Plan, are hereinafter referred to jointly and severally as “Affected Plans”) with a benefit as computed under Section 3; and

(ii)           who have not been terminated from employment due to Cause.  Cause shall mean the willful and continuous failure of an employee to substantially perform his or her duties to Ashland (other than any such failure resulting from incapacity due to physical or mental illness), or the willful engaging by an employee in gross misconduct materially and demonstrably injurious to Ashland, each to be determined by Ashland in its sole discretion.

 

Notwithstanding anything to the contrary contained herein, any employee who would be entitled to participate in this Plan, but who is not a member of a select group of management or a highly compensated employee, shall be entitled to a benefit amount payable under the Plan based solely on the limitations on benefits imposed under Section 415 of the Code.  The potential benefit of an eligible employee before such employee becomes a retiree may be computed under Section 3 at any point in time using assumptions deemed reasonable or convenient by Ashland.  Participation in the Plan is not subject to an election by an eligible employee.  Participation is automatic and is based on the employee’s status on Ashland’s records at the applicable time.  An eligible employee hereunder is referred to as a retiree at the time such eligible employee would have his or her benefit hereunder commence pursuant to the terms of Section 3(iii).

3.            Benefit Amount .

(i)            Computation if not Eligible for Retirement Growth Account .  The computation described in this paragraph (i) applies to the portion of a retiree’s benefit that is not eligible for the Retirement Growth Account in the Ashland Inc. and Affiliates Pension Plan.  At any particular time, the benefit payable to a retiree eligible to participate in this Plan pursuant to the provisions in Section 2 shall be computed by subtracting from (A) the sum of (B) and (C) where -

(A)           shall be the single life annuity that would be payable at age 62 to such retiree under the Affected Plans -

(1)           with the benefit so payable thereunder calculated by disregarding any salary deferrals that may have been made by such retiree under the Ashland Inc. Deferred Compensation Plan and thereby restoring any salary that may have been so deferred to such retiree’s compensation for purposes of the Affected Plans, and

(2)           prior to any reductions made because of the limits imposed by Sections 415 and 401(a)(17) of the Code;

provided that the single life annuity that would be so payable under the Ashland Pension Plan shall be computed without applying any offset attributable to the Ashland Inc. Leveraged Employee Stock

 

 

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Ownership Plan (“LESOP”), and such single life annuity shall be actuarially adjusted to be equivalent to a single life annuity payable at the particular time applicable based upon the applicable actuarial assumptions and other relevant provisions used for the same in the Affected Plans;

(B)           shall be the single life annuity that would be payable at age 62 to such retiree under the Affected Plans after reducing the amount so payable for the limits imposed by Sections 415 and 401(a)(17) of the Code, provided that such single life annuity that would be so payable under the Ashland Pension Plan shall be computed after first applying the offset attributable to the Offset Account (as that term is defined under the LESOP) in the LESOP, and each such single life annuity shall be actuarially adjusted to be equivalent to a single life annuity payable at the particular time applicable based upon the applicable actuarial assumptions and other relevant provisions used for the same in the Affected Plans; and

(C)           shall be the single life annuity that would be actuarially equivalent to such retiree’s non-forfeitable portion of the Offset Account under the LESOP as of the valuation date thereunder coincident with or next preceding such retiree’s termination of employment using the actuarial assumptions prescribed for this purpose in the Ashland Pension Plan.

(ii)            Computation if Eligible for Retirement Growth Account .  The computation described in this paragraph (ii) applies to the portion of a retiree’s benefit that is eligible for the Retirement Growth Account in the Ashland Pension Plan.  At any particular time, the benefit payable to a retiree eligible to participate in this Plan pursuant to the provisions in Section 2 shall be computed by subtracting from (A) the sum of (B) and (C) where -

(A)           shall be the balance of the Retirement Growth Account added to the actuarially equivalent lump sum of any single life annuity that would be payable at age 62 to such retiree under the Affected Plans (other than the Ashland Pension Plan) based upon the applicable actuarial assumptions and other relevant provisions used for the same in the Affected Plans -

(1)           with the benefit so payable thereunder calculated by disregarding any salary deferrals that may have been made by such retiree under the Ashland Inc. Deferred Compensation Plan and thereby restoring any salary that may have been so deferred to such retiree’s compensation for purposes of the Affected Plans, and

(2)           prior to any reductions made because of the limits imposed by Sections 415 and 401(a)(17) of the Code;

provided that the Retirement Growth Account balance that would be so payable under the Ashland Pension Plan shall be computed without applying any offset attributable to the Ashland Inc. Leveraged Employee Stock Ownership Plan (“LESOP”);

(B)           shall be the balance of the Retirement Growth Account added to the actuarially equivalent lump sum of any single life annuity that would be payable at age 62 to such retiree under the Affected Plans (other than the Ashland Pension Plan) based upon the applicable actuarial assumptions

 

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and other relevant provisions used for the same in the Affected Plans after reducing the amount so payable for the limits imposed by Sections 415 and 401(a)(17) of the Code, provided that such Retirement Growth Account balance that would be so payable under the Ashland Pension Plan shall be computed after first applying the offset attributable to the Offset Account (as that term is defined under the LESOP) in the LESOP; and

(C)           shall be such retiree’s non-forfeitable portion of the Offset Account under the LESOP as of the valuation date thereunder coincident with or next preceding such retiree’s termination of employment.

(iii)            Commencement .  The benefit computed under paragraph (i) or (ii) of this Section 3 shall commence or otherwise be paid or transferred on or after the eligible employee’s Effective Retirement Date pursuant to the eligible employee’s election as to the time of payment, as provided in Section 4.  Notwithstanding anything contained in the Plan to the contrary, an eligible employee who is a Specified Employee shall have the distribution of his or her benefit which is made on account of a Termination of Employment commence on a date that is not earlier than six months after his or her Termination of Employment.

(iv)            Vesting .  Unless an eligible employee is terminated due to Cause as defined in Section 2 and subject to Section 10, an eligible employee who has a benefit hereunder shall have a non-forfeitable right to that benefit to the extent such an employee has a non-forfeitable benefit under an Affected Plan.

4.            Payment Options .

(i)

Election .  Subject to applicable transition rules under guidance issued by the Treasury under section 409A of the Code, eligible employees will have 30 days following the earlier of January 1, 2005 or the date they are first eligible for the Plan to elect a form of distribution from among those available under Section 4(ii).  For this purpose, an eligible employee is first eligible for the Plan on the first day of the calendar year following the calendar year during which the eligible employee first accrued a benefit hereunder.  Any subsequent change to that election shall be subject to the provisions of this paragraph (i), sub-parts (A), (B) and (C), as applicable.  In all other events, an eligible employee’s election is irrevocable.  Notwithstanding anything in the foregoing to the contrary, any eligible employee who elects to change his or her election must meet the following requirements, as applicable –

(A)  

The election may not take effect until at least 12 months after it is made;

 

(B)  

If the distribution relates to a Termination of Employment, the first payment that would be made pursuant to the election would be at least five years after the amount otherwise would have been distributed but for this election, except in the event of the eligible employee’s death; and

 

 

 

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(C)  

The election must be made at least 12 months before the first scheduled payment that would have been payable at a specified time or pursuant to a fixed schedule.

An eligible employee may not accelerate the time or schedule of any payment under the Plan, except as provided in guidance from the Treasury under Internal Revenue Code section 409A as may be allowed by Ashland in a manner consistent therewith.  A retiree eligible under Section 2 for the benefit under Section 3 shall elect the form in which such benefit shall be paid from among those identified in this Section 4 consistent with time for making such an election in this paragraph (i).

(ii)            Optional Forms of Payment .

(A)            Lump Sum Option .  All benefits provided by the Plan shall be payable in a single lump sum payment, computed under the applicable provisions of Section 3.  A retiree’s benefit is payable as a lump sum at the time specified under Section 3(iii) (or as soon thereafter as reasonably possible), in a manner pursuant to the election under Section 4(i) under an option identified in one of the following sub-paragraphs of this Section 4(ii), but only if the retiree was eligible for the Ashland Inc. Deferred Compensation Plan for Employees (2005), or its successor.  In all other events, the retiree’s benefit shall be distributed as a lump sum at the time specified under Section 3(iii) (or as soon thereafter as reasonably possible).  A lump sum benefit payment of a benefit under Section 3(i) shall be computed on the basis of the actuarially equivalent present value of such retiree’s benefit under Section 3(i) of the Plan payable at the particular time applicable based upon such actuarial assumptions (including the interest rate) as determined from time to time by the Personnel and Compensation Committee of Ashland’s Board of Directors (Committee).

(B)            Default Lump Sum Deferral Option .  If the eligible employee fails to make an election under Section 4(i) then the benefit shall be transferred at the time specified under Section 3(iii) (or as soon thereafter as reasonably possible) to the Ashland Inc. Deferred Compensation Plan for Employees (2005), or its successor, and held pursuant to the terms of such plan and thereafter distributed as provided thereunder.  Notwithstanding the foregoing, if an eligible employee fails to make an election under this Plan, but does make an effective election for the distribution of a benefit under the SERP, then the distribution of the benefit hereunder shall be made in the same manner as the eligible employee had elected under the SERP.  In all events, an eligible employee who is a Specified Employee shall have the transfer or other distribution of his or her benefit which is made on account of a Termination of Employment commence on a date that is not earlier than six months after his or her Termination of Employment.

(C)            Lump Sum Payment Option.   An eligible employee may elect to have his or her benefit paid as a single lump sum at the time specified under Section


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