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:
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.
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.
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.
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