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HARLEY-DAVIDSON PENSION BENEFIT RESTORATION PLAN

Employee Benefits Plan Agreement

HARLEY-DAVIDSON PENSION BENEFIT RESTORATION PLAN | Document Parties: HARLEY DAVIDSON INC | HARLEY-DAVIDSON MOTOR COMPANY GROUP, INC You are currently viewing:
This Employee Benefits Plan Agreement involves

HARLEY DAVIDSON INC | HARLEY-DAVIDSON MOTOR COMPANY GROUP, INC

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Title: HARLEY-DAVIDSON PENSION BENEFIT RESTORATION PLAN
Governing Law: Wisconsin     Date: 2/17/2009
Industry: Recreational Products     Sector: Consumer Cyclical

HARLEY-DAVIDSON PENSION BENEFIT RESTORATION PLAN, Parties: harley davidson inc , harley-davidson motor company group  inc
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Exhibit 10.9

HARLEY-DAVIDSON

PENSION BENEFIT RESTORATION PLAN

(As Amended and Restated Effective January 1, 2009)

HARLEY-DAVIDSON MOTOR COMPANY GROUP, INC., a Wisconsin corporation, maintains the Harley-Davidson Pension Benefit Restoration Plan (the “Plan”) to provide benefits as follows:

 

1.

Purpose .

The purpose of the Plan is to provide the benefits which a Participant would have been entitled to receive under the Funded Plan except for (a) the statutory maximum annual benefit limitations of Code Section 415, (b) the statutory maximum limitations on pensionable pay provided for in Code Section 401(a)(17), and (c) the exclusion from the definition of pensionable compensation in the Funded Plan for amounts contributed as a pretax contribution to a nonqualified plan of deferred compensation.

 

2.

Definitions .

The following terms have the following meanings unless the context clearly indicates otherwise:

(a) “Affiliate” means each corporation, trade or business that, with the Company, constitutes a controlled group of corporations, or group of trades or businesses under common control, within the meaning of Code Sections 414(b) or (c); provided that for purposes of determining when a Participant has incurred a Separation from Service, the phrase “at least 50 percent” shall be used in place of “at least 80 percent” each place it appears in Code Section 414(b) and (c) and the regulations thereunder.

(b) “Applicable Interest Rate” means the product of (i) one (1.0) minus the applicable maximum tax rate at the Participant’s Determination Date, with such rate expressed as a decimal, and (ii) the discount rate used by the Company to value the obligations of the Funded Plan, as set forth in the Company’s disclosure for purposes of Statement of Financial Accounting Standard No. 87 (or any successor) for the fiscal year of the Company that includes the first day of the month coincident with or next following the Participant’s Separation from Service for any reason other than death, with such rate also expressed as a decimal. The product shall then be rounded up to the nearest hundredth. The “applicable maximum tax rate” means the total of the maximum federal individual income tax, the maximum State of Wisconsin individual income tax, and the Hospital Insurance (Medicare) payroll tax, taking into account the deductibility of state income taxes for federal income tax purposes, to the extent permitted by law and tax rates as they are legally in effect at the Participant’s Determination Date. Any subsequent adjustments which may be made to tax rates or to the Funded Plan’s expected rate of return on plan assets, even if having retroactive effect to such date, shall be disregarded.


(c) “Board” means the Board of Directors of Harley-Davidson, Inc.

(d) “Change of Control Event” means a “change in control event” (as such term is defined for purposes of Code Section 409A) with respect to Harley-Davidson, Inc.

(e) “Code” means the Internal Revenue Code of 1986, and the ruling and regulations issued thereunder, all as amended and in effect from time to time.

(f) “Committee” means the Retirement Plans Committee appointed by the Board or, if such Committee is unable to fulfill its duties under the Plan, the Board.

(g) “Company” means Harley-Davidson Motor Company Group, Inc., or any successor thereto.

(h) “Determination Date” means:

(1) With respect to a vested Participant whose benefit is payable as a monthly annuity benefit, the later to occur of (i) the first day of the month coincident with or next following the Participant’s attainment of age fifty-five (55), or (ii) the first day of the month coincident with or next following the Participant’s Separation from Service; or

(2) With respect to a vested Participant whose benefit is payable as a single sum, the first day of the month coincident with or next following the Participant’s Separation from Service for any reason other than death.

(i) “Employee” means a common-law employee of the Company or an Affiliate who was hired prior to August 1, 2006 and who is a participant in the Funded Plan.

(j) “Funded Plan” means the Retirement Annuity Plan for Salaried Employees of Harley-Davidson, as from time to time amended and in effect.

(k) “Normal Retirement Date” means, with respect to any Participant, the Participant’s normal retirement date for purposes of the Funded Plan.

(l) “Participant” means an Employee who becomes a Participant in accordance with Section 3. Where the context so requires, a Participant also means a former employee entitled to receive a benefit hereunder.

(m) “Payment Date” means the date on which payment of a Participant’s vested benefit is made (if a single sum) or commences (if a monthly annuity), as determined in accordance with Sections 6 and 7.

 

2


(n) “Pension Restoration Benefit” means the benefit described in Section 5. The fact that a Participant has accrued a Pension Restoration Benefit under this Plan does not suggest or require that a contract from an insurance company will be obtained to provide such benefit.

(o) “Separation from Service” means the date on which a Participant separates from service (within the meaning of Code Section 409A) from the Company and all Affiliates. A Separation from Service occurs when the Company and the Participant reasonably anticipate that no further services will be performed by the Participant for the Company and its Affiliates after that date or that the level of bona fide services the Participant will perform after such date as an employee of the Company or an Affiliate will permanently decrease to no more than 20% of the average level of bona fide services performed by the Participant (whether as an employee or independent contractor) for the Company and its Affiliates over the immediately preceding 36-month period (or such lesser period of services). The Participant is not considered to have incurred a Separation from Service if the Participant is absent from active employment due to military leave, sick leave or other bona fide reason if the period of such leave does not exceed the greater of (i) six months, or (ii) the period during which the Participant’s right to reemployment by the Company or an Affiliate is provided either by statute or by contract; provided that if the leave of absence is due to a medically determinable physical or mental impairment that can be expected to result in death or last for a continuous period of not less than six months, where such impairment causes the Participant to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, the leave may be extended for up to 29 months without causing the Participant to have incurred a Separation from Service.

(p) “Spouse” means the surviving spouse of a deceased Participant.

(q) “Unrestricted Benefit” means the hypothetical benefit to which a Participant would be entitled under the Funded Plan if the Funded Plan benefit were calculated in accordance with the assumptions set forth in Section 5.

Other terms, if not defined herein but defined in the Funded Plan, shall have the same meaning as under the Funded Plan.

 

3.

Participation .

An Employee, if then still employed by the Company or an Affiliate, will become a Participant in this Plan on January 1 of the calendar year following the calendar year in which the Employee’s Unrestricted Benefit is greater than the Employee’s actual benefit accrued under the Funded Plan. Notwithstanding the foregoing, the Committee shall limit the group of employees who become Participants in the Plan to a select group of management and highly compensated employees, as determined by the Committee in accordance with ERISA.

 

4.

Vesting .

A Participant’s entitlement to Pension Restoration Benefits hereunder vests and becomes nonforfeitable concurrently, to the extent accrued hereunder, with the vesting in the Participant’s benefit entitlement under the Funded Plan. If a Participant is not vested under the Funded Plan, the Participant is not vested under this Plan.

 

3


5.

Pension Restoration Benefit .

(a) Eligibility . A Pension Restoration Benefit is payable to the Participant only if (1) the Employee has become a Participant in accordance with Section 3, (2) the Participant is vested in accordance with Section 4, and (3) the Participant is living on the Determination Date. Following the Participant’s death, the only benefits payable shall be those, if any, payable in accordance with Sections 10 and 11.

(b) Formula Benefit . The amount of a Participant’s Pension Restoration Benefit, when expressed in the form of a monthly single life annuity, without survivor benefits, with payment commencing on the Participant’s Normal Retirement Date, is equal to the difference between (1) and (2) below:

(1) Unrestricted Benefit . The monthly benefit to which the Participant would have been entitled under the Funded Plan, if (A) such benefit was expressed in the form of a single life annuity, without survivor benefits, with payment commencing on the Participant’s Normal Retirement Date, (B) such benefit was calculated (i) by disregarding the maximum compensation limitation of Code Section 401(a)(17), (ii) by disregarding the maximum benefit limitation of Code Section 415, and (iii) by assuming that all amounts voluntarily deferred by the Participant into a non-qualified deferred compensation plan of the Company or an Affiliate were instead paid to the Participant, in the year of the deferral, as current cash compensation; and

(2) Actual Funded Plan Benefit . The monthly benefit to which the Participant is actually entitled under the Funded Plan, when such benefit is expressed in the form of a single life annuity, without survivor benefits, with payment commencing on the Participant’s Normal Retirement Date. The form or time of payment actually applicable to the Participant under the Funded Plan is disregarded.

 

6.

Initial Payment Election .

(a) Payment Election as to Form of Payment . Each Employee who becomes a Participant prior to January 1, 2009 shall make a payment election whether to receive his or her vested benefit as (1) a single sum cash payment, or (2) an annuity distribution. A Participant who has elected (or is deemed to have elected) the annuity payment option is not required to elect the specific form of annuity at the time of making the initial payment election, so long as the available forms of annuity distribution are actuarially equivalent, with actuarial equivalence determined using factors that are reasonable for purposes of Code Section 409A. If the available forms of annuity distribution are actuarially equivalent for purposes of Code Section 409A, the Participant may choose the specific form of monthly annuity prior to the Determination Date, in accordance with rules prescribed by the Committee.

 

4


(b) Date of Initial Payment Election .

(i) In the case of an Employee who became a Participant prior to January 1, 2009, the initial payment election must be made on or before December 31, 2008. Except as provided in Section 7, the last election on file with the Company on December 31, 2008 shall be irrevocable.

(ii) In the case of an Employee who becomes a Participant after December 31, 2008, the Participant shall be deemed to have elected a single sum cash payment.

(c) Default Initial Payment Election . If an Employee who became a Participant prior to January 1, 2009 has not made an initial payment election within the prescribed period, the Participant will be deemed to have elected to receive an annuity distribution.

(d) Payment Date . If payment is being made pursuant to a Participant’s initial payment election, i.e., the Participant has not submitted an effective revision to his or her initial payment election, then:

(1) If payment is being made in a single sum, the Payment Date will be the first day of the seventh (7 th ) month following the month in which occurs the Participant’s Separation from Service.

(2) If payment is being made as a monthly annuity, the Payment Date will be the later to occur of (A) the first date of the month coincident with or next following the Participant’s attainment of age fifty-five (55), or (B) the first day of the seventh (7 th ) month following the month in which occurs the Participant’s Separation from Service.

 

7.

Revised Payment Election .

In its sole discretion, the Committee may (but need not) permit a Participant who has in effect a payment election (or deemed election) to receive a single sum distribution to elect the annuity payment option, or a Participant who has in effect a payment election of the annuity payment option to elect the single sum payment option. However, the Participant’s revised election will be given effect only if (1) the Participant’s revised payment election is submitted and accepted by the Committee at least twelve (12) months prior to what would have been the Payment Date under the Participant’s immediately prior valid election, and (2) the revised Payment Date is the later of (i) five years from the Payment Date under the Participant’s immediately prior valid election, or (ii) the Payment Date that would otherwise apply under Section 6(d) above if the Participant’s revised benefit election were the Participant’s initial payment election. For purposes of Code Section 409A, an annuity payment option is considered to be a single payment rather than a series of independent payments.

 

5


8.

Distribution of Single Sum Benefits (For Participants Electing the Single Sum Form of Payment) .

(a) Time of Payment . The single sum benefit will be calculated as of the Determination Date but paid on the Payment Date.

(b) Amount of Single Sum Payment . The amount of the Participant’s single sum cash payment shall be equal to (A) the present value of the Participant’s monthly Pension Restoration Benefit as of the Determination Date, and (B) interest for the period from Determination Date through the last day of the month preceding the Payment Date. The present value determination shall be made on the assumption that two hundred forty (240) consecutive monthly Pension Restoration Benefit payments in the form of a single life annuity would otherwise have been made to the Participant and further assuming that payment of the benefit commenced on the later of the first day of the month following the Participant’s attainment of age fifty-five (55) or the Participant’s Determination Date. The Applicable Interest Rate shall be used to determine present value, including, when the assumed benefit commencement date is later than the Determination Date, discounting the present value determined as of the assumed commencement date to the Determination Date, and for crediting interest from the Determination Date to the Payment Date.

 

9.

Distribution of Monthly Annuity Benefits (For Participants Electing the Annuity Form of Payment) .

(a) Monthly Benefits Commencing Prior to January 1, 2009 . The Pension Restoration Benefit of a Participant whose benefit commences to be paid, in an annuity form, prior to January 1, 2009, will be paid in the same form of payment applicable to the payment of benefits to the Participant under the Funded Plan and such payments shall commence at the same time as payments commence to the Participant under the Funded Plan; provided that to the extent required under Code Section 409A, any distribution of the Pension Restoration Benefit that would otherwise occur during the six month period following the Participant’s Separation from Service shall be withheld and paid to the Participant (with interest at the Applicable Interest Rate) upon the conclusion of such six month period. If a periodic payment method other than a single life annuity form of payment is in effect under the Funded Plan, the Participant’s benefit under this Plan shall be converted to an actuarially equivalent benefit in the form in which payment is being made under the Funded Plan on the basis of the Funded Plan’s method of determining actuarial equivalency. In addition, if the Particip


 
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