ITT EXCESS PENSION PLAN
IIA
Effective as of January 1,
1988
As Amended and Restated as of December 31, 2008
ITT EXCESS PENSION PLAN
IIA
The ITT Excess
Benefit Plan II (the “Plan”) was effective as of
January 1, 1988. The purpose of the Plan was to provide those
employees participating in the Retirement Plan for Salaried
Employees of ITT Corporation or any successor plan thereto (the
“Retirement Plan”) benefits which would have been
payable under the Retirement Plan but for the limitations imposed
on qualified plans by Section 415 of the Internal Revenue
Code.
Effective as of
January 1, 1988, the ITT Select Management Plan II was
authorized by the Board of Directors of ITT Corporation to pay
supplemental benefits to certain select management highly
compensated employees who have qualified for benefits under the
Retirement Plan. As of December 19, 1995, the ITT Select Management
Plan II was merged into the ITT Excess Benefit Plan II and the
surviving Plan was amended to accept the liabilities under ITT
Industries Excess Pension Plan I attributable to all participants
thereunder other than former or current Presidents, Chairmen, Chief
Executive Officers, Chief Operating Officers or Executive Vice
Presidents of ITT Industries, Inc. and was renamed the ITT
Industries Excess Pension Plan II.
The Plan was
amended, effective as of January 1, 2000, to reflect the
changes in the Retirement Plan formula.
Effective as of
July 13, 2004, the Plan was amended and restated to make
certain administrative changes and to unify the definition of
Acceleration Event with other employee benefit plans of ITT
Corporation (formerly known as ITT Industries, Inc.) (the
“Corporation”).
As of
January 1, 2008, the Plan was amended to solely provide to
individuals who are designated Eligible Employees under the Plan on
and after January 1, 2008 benefits which would have been
payable on their behalf under the Retirement Plan but for the
limitations on benefits imposed by Section 415 and 401(a)(17)
of the Internal Revenue Code (the “Code”), to transfer
all liabilities not attributable to such excess benefits into the
ITT Excess Pension Plan IIB (which is authorized to be effective as
of January 1, 2008) and to rename the Plan, as amended, the
ITT Excess Pension Plan IIA.
i
With respect to
a Participant who (i) terminated employment with the ITT
Corporation (the “Corporation”) and all its Associated
Companies by December 31, 2008 or (ii) was employed by
ITT Corporation or one of its Associated Companies on
October 1, 2008 and signs and submits his signed
acknowledgement of termination to the ITT HQ Compensation
Department on or before December 31, 2008 formalizing his date
of Termination of Employment in 2009, the portion of his benefit,
if any, payable under the provisions of this Plan equal to his
Grandfathered Pre-2005 Benefit (as defined herein) shall be subject
to the provisions of the Plan as in effect on October 3, 2004
(attached hereto as Appendix C and made part hereof) without
regard to any Plan amendments after October 3, 2004 which
would constitute a material modification for Code Section 409A
purposes, unless otherwise provided in Appendix A.
All benefits
payable under this Plan, which is intended to constitute both an
unfunded excess benefit plan under Section 3(36) of Title I of
the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and a nonqualified, unfunded deferred
compensation plan for a select group of management employees under
Title I of ERISA, shall be paid out of the general assets of the
Corporation. The Corporation may establish and fund a trust in
order to aid it in providing benefits due under the
Plan.
ii
ITT EXCESS PENSION PLAN
IIA
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Page
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1
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ARTICLE II. PARTICIPATION; AMOUNT AND PAYMENT
OF BENEFITS
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8
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8
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2.02 Amount of
Supplemental Benefits
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8
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10
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10
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2.05 Payment Upon the
Occurrence of a Change in Control
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17
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2.06 Reemployment of
Former Participant or Retired Participant
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19
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ARTICLE III. GENERAL PROVISIONS
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20
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20
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3.02 Duration of
Benefits
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21
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3.03 Discontinuance and
Amendment
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21
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21
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3.05 Plan Not a
Contract of Employment
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22
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23
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3.09 Forfeiture for
Cause
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23
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23
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3.11 Acceleration of or
Delay in Payments
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24
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24
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25
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26
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ARTICLE IV. PLAN ADMINISTRATION
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28
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4.01 Responsibility for
Benefit Determination
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28
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28
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4.03 Procedure for
Payment of Benefits Under the Plan
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29
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30
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33
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34
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ITT EXCESS PENSION PLAN
IIA
The following
terms when capitalized herein shall have the meanings assigned
below.
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1.01
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Acceleration Event
shall mean
“Acceleration Event” as that term is defined under the
provisions of the Plan as in effect on October 3,
2004.
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1.02
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Annuity Starting Date
shall mean, unless the
Plan expressly provides otherwise, the first day of the first
period for which an amount is due as an annuity or any other form.
However, if a Change in Control occurs, the Annuity Starting Date
of a Participant with regard to his 409A Supplemental Benefit shall
be the date such Change in Control occurs.
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1.03
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Associated Company
shall mean any division,
subsidiary or affiliated company of the Corporation not
participating in the Plan which is an Associated Company, as
defined in the Retirement Plan.
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1.04
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Beneficiary shall mean the person designated
pursuant to the provisions of the Retirement Plan to receive
benefits under said Retirement Plan after a Participant’s
death. In the absence of a beneficiary designation under the
provisions of the Retirement Plan, the Participant’s
Beneficiary shall be his spouse (or Registered Domestic Partner),
if any, otherwise his estate. Notwithstanding the foregoing, with
respect to any survivor benefit payable pursuant to the provision
of Section 2.04(c)(ii) based on the Participant’s 409A
Supplemental Benefit attributable to the Traditional Pension Plan
(“TPP”) formula (as defined in Section 4.01(b) of
the Retirement Plan), in the absence of a beneficiary designation
under the provisions of the Retirement Plan, the
Participant’s Beneficiary shall be his spouse (or Registered
Domestic Partner), if any, otherwise the person or persons named as
his beneficiary (or beneficiaries) under the ITT Salaried
Investment and Savings Plan, if any, or if none, then the person or
persons named as his beneficiary (or beneficiaries) under the
Company’s life insurance program. For purposes of the
Plan,
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a
Registered Domestic Partner shall have the same meaning as set
forth in the Retirement Plan.
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1.05
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Board of Directors
shall mean the Board of
Directors of ITT Corporation or any successor thereto.
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1.06
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Change in Control
shall mean an event
which shall occur if there is: (i) a change in the ownership
of the Corporation; (ii) a change in the effective control of
the Corporation; or (iii) a change in the ownership of a
substantial portion of the assets of the Corporation.
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For
purposes of this Section, a change in the ownership occurs on the
date on which any one person, or more than one person acting as a
group (as defined in Treasury Regs. 1.409A-3(i)(5)(v)(B)), acquires
ownership of stock that, together with stock held by such person or
group constitutes more than 50% of the total fair market value or
total voting power of the stock of the Corporation.
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A
change in the effective control occurs on the date on which either
(i) a person, or more than one person acting as a group (as
defined in Treasury Regs. 1.409A-3(i)(5)(v)(B)), acquires ownership
of stock possessing 30% or more of the total voting power of the
stock of the Corporation, taking into account all such stock
acquired during the 12-month period ending on the date of the most
recent acquisition, or (ii) a majority of the members of the
Board of Directors is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a
majority of the members of such Board of Directors prior to the
date of the appointment or election, but only if no other
corporation is a majority shareholder.
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A
change in the ownership of a substantial portion of assets occurs
on the date on which any one person, or more than one person acting
as a group (as defined in Treasury Regs. 1.409A-3(i)(5)(v)(B)),
other than a person or group of persons that is related to the
Corporation, acquires assets that have a total gross fair market
value equal to or more than 40% of the total gross fair market
value of all of the assets of the Corporation
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immediately prior to such
acquisition or acquisitions, taking into account all such assets
acquired during the 12-month period ending on the date of the most
recent acquisition.
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The
determination as to the occurrence of a Change in Control shall be
based on objective facts and in accordance with the requirements of
Code Section 409A and the regulations promulgated
thereunder.
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1.07
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Code shall mean the Internal Revenue Code
of 1986, as amended from time to time.
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1.08
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Committee shall mean the Benefits
Administration Committee under the Retirement Plan.
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1.09
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Company shall mean the Corporation with
respect to its employees and any Participating Unit (as that term
is defined in the Retirement Plan) authorized by the Corporation to
participate in the Plan with respect to its employees.
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1.10
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Company Pension Plan
shall mean any tax
qualified defined benefit plan other than the Retirement Plan
maintained by the Company or an Associated Company.
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1.11
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Corporation shall mean ITT Corporation, an
Indiana corporation, (successor by merger to and formerly known as
ITT Industries, Inc.), or any successor by merger, purchase or
otherwise.
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1.12
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Deferred Compensation
Program shall
mean any nonqualified deferred compensation plan maintained by the
Company or an Associated Company.
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1.13
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Disability or Disabled
shall mean
“Disability” as defined under Treasury Regs. Section
1.409A-3(i)(4)(i) and (ii) and any subsequent guidance
thereto.
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1.14
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Eligible Employee
shall mean a member of
the Retirement Plan who is not eligible to participate in the ITT
Excess Pension Plan IA or IB.
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1.15
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ERISA shall mean the Employee Retirement
Income Security Act of 1974, as amended from time to
time.
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1.16
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Excess Benefit Portion
shall mean the portion
of the Plan which is intended to constitute an unfunded excess
benefit plan under Sections 3(36) and 4(b)(5) of Title I of
ERISA which provides benefits not otherwise payable under the
Retirement Plan due to restrictions imposed by Section 415 of
the Code.
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1.17
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Grandfathered Pre-2005
Benefit shall
mean, with respect to a Participant who (i) terminated
employment on or prior to December 31, 2008 or (ii) was
employed by the Company or an Associated Company on October 1,
2008 and signs and submits his acknowledgement of termination to
ITT HQ Compensation Department on or before December 31, 2008
formalizing his date of Termination of Employment in 2009, the
portion of such Participant’s Supplemental Benefit, if any,
that was accrued and vested before January 1, 2005, determined
under the provisions of the Plan without regard to any amendments
after October 3, 2004 which would cause a material
modification for Code Section 409A purposes, the provisions of
Section 409A, the regulations promulgated thereunder and other
applicable guidance, adjusted for the passage of time based on
actuarial equivalent assumptions and procedures established by the
Committee in accordance with the provisions of Treasury Regs.
1.409A-6(a)(3)(iv).
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1.18
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Participant shall mean an Eligible Employee who
is participating in the Plan pursuant to Section 2.01
hereof.
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1.19
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Plan shall mean the ITT Excess Pension
Plan IIA, as set forth herein or as amended from time to
time.
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1.20
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Plan Year shall mean the calendar
year.
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1.21
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Retirement Plan
shall mean the ITT
Salaried Retirement Plan (formerly known as the ITT Industries
Salaried Retirement Plan), as amended from time to time.
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1.22
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Select Management Portion
shall mean the portion
of the Plan, other than the Excess Benefit Portion, which is
intended to constitute an unfunded deferred compensation plan for a
select group of management or highly compensated employees under
Title I of ERISA.
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1.23
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Specified Employee
shall mean a
“specified employee” as such term is defined in the
Income Tax Regulations under Section 409A as modified by the
rules set forth below:
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(a)
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For
purposes of determining whether a Participant is a Specified
Employee, the compensation of the Participant shall be determined
in accordance with the definition of compensation provided under
Treas. Reg. Section 1.415(c) 2(d)(3) (wages within the meaning
of Code section 3401(a) for purposes of income tax withholding at
the source, plus amounts excludible from gross income under
Section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k) or
57(b), without regard to rules that limit the remuneration included
in wages based on the nature or location of the employment or the
services performed).
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(b)
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The
“Specified Employee Identification Date” means
December 31, unless the Compensation Committee of the Board
has elected a different date through action that is legally binding
with respect to all nonqualified deferred compensation plans
maintained by the Company or any Associated Company.
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(c)
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The
“Specified Employee Effective Date” means the first day
of the fourth month following the Specified Employee Identification
Date or such earlier date as is selected by the Compensation
Committee of the Board.
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1.24
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Supplemental Benefit
shall mean the monthly
benefit payable to a Participant as determined under
Section 2.02.
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1.25
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409A Supplemental Benefit
shall mean the portion
of a Participant’s Supplemental Benefit, if any, in excess of
his Grandfathered Pre-2005 Benefit.
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1.26
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Termination of Employment
shall mean a
“Separation from Service” as such term is defined in
the Treasury Regs. under Section 409A of the Code, as modified
by the rules described below:
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(a)
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An
Employee who is absent from work due to military leave, sick leave,
or other bona fide leave of absence pursuant to Company policies
shall incur a Termination of Employment on the first date
immediately following the later of (i) the six-month
anniversary of the commencement of the leave (eighteen month
anniversary for a disability leave of absence) or (ii) the
expiration of the Employee’s right, if any, to reemployment
under statute or contract or pursuant to Company policies. For this
purpose, a “disability leave of absence” is an absence
due to any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last
for a continuous period of not less than 6 months, where such
impairment causes the employee to be unable to perform the duties
of his job or a substantially similar job.;
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(b)
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For
purposes of determining whether another organization is an
Associated Company of the Corporation, common ownership of at least
50% shall be determinative;
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(c)
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The
Corporation specifically reserves the right to determine whether a
sale or other disposition of substantial assets to an unrelated
party constitutes a Termination of Employment with respect to the
executive providing services to the seller immediately prior to the
transaction and providing services to the buyer after the
transaction. Such determination shall be made in accordance with
the requirements of Code Section 409A.
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Whether Termination of Employment
has occurred shall be determined by the Committee in accordance
with Code Section 409A, the regulations promulgated
thereunder, and other applicable guidance, as modified by rules
described above. The terms or phrases “terminates
employment,” “termination of employment,”
“employment is terminated,” or any other similar
terminology shall have the same meaning as a “Termination of
Employment.”
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ARTICLE II. PARTICIPATION; AMOUNT
AND PAYMENT OF BENEFITS
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(a)
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Each Eligible Employee who is a
Participant in the Plan as of December 31, 2008 shall continue
to be a Participant in the Plan, subject to the provisions of
paragraph (d) below. An Eligible Employee whose retirement
allowance or vested benefit under the Retirement Plan exceeds the
limitations imposed by Code Section 415(b) or Code Section
4019a)(17) shall become a Participant in the Plan.
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(b)
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Each Eligible Employee’s
annual retirement allowance or vested benefit which at the time of
payment under the Retirement Plan exceeds the limitations imposed
by Code Section 415(b) (or prior to January 1, 2000, Code
Section 415(e)) shall be payable from the Excess Benefit
Portion of the Plan.
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(c)
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Each Eligible Employee’s
annual retirement allowance or vested benefit at the time of
payment under the Retirement Plan is limited by reason of the Code
Section 401(a)(17) limitation on Compensation (as that term is
defined in the Retirement Plan) shall be payable from the Select
Management Portion of the Plan.
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(d)
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A
Participant’s participation in the Plan shall terminate upon
the Participant’s death or other Termination of Employment
with the Company and all Associated Companies, unless a benefit is
payable under the Plan with respect to the Participant or his
Beneficiary under the provisions of this
Article II.
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2.02
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Amount of Supplemental
Benefits
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(a)
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A
Participant’s Supplemental Benefit under this Article II
shall be equal to the excess, if any, of (i) over (ii) as
determined below:
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(i)
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the
monthly retirement allowance or vested benefit determined as of
such Participant’s Termination of Employment which would have
been payable to the Participant under Section 4.02, 4.03,
4.04, 4.05 or 4.06 of the Retirement Plan, whichever is applicable,
assuming such benefit commences on the date set forth in
Section 2.04(a)(i), (ii) or (iv), whichever is
applicable, and
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(1)
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prior to the application of any
offset required pursuant to Section 4.10 or to an applicable
Appendix of the Retirement Plan with regard to benefits payable
under any other Company Pension Plan;
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(2)
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without regard to the provisions
contained in Section 415 of the Code relating to the maximum
limitation on benefits, as incorporated into the Retirement Plan;
and
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(3)
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without regard to the annual
limitation on Compensation contained in Section 401(a)(17) of
the Code, as incorporated into the Retirement Plan;
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(ii)
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the
monthly retirement allowance or vested benefit which would have
been payable for the Participant’s lifetime under
Section 4.02, 4.03, 4.04, 4.05 or 4.06 of the Retirement Plan,
whichever is applicable assuming such benefit commences on the date
set forth in Section 2.04(a)(i), (ii) or (iv), whichever
is applicable, and determined
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(1)
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prior to the application of any
offset required pursuant to Section 4.10 or an applicable
Appendix of the Retirement Plan with regard to benefits payable
under any other Company Pension Plan;
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(2)
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with regard to the provisions
contained in Section 415 of the Code relating to maximum
limitation benefits as incorporated into the Retirement Plan;
and
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(3)
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with regard to the annual limitation
on Compensation contained in Section 401(a)(17) of the Code,
as incorporated into the Retirement Plan.
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(b)
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Except as otherwise provided below,
if, after a Participant’s Annuity Starting Date, changes to
the Code or ERISA permit the Retirement Plan to provide for payment
of a Participant’s monthly retirement allowance or vested
benefit in an amount greater than that permissible at that
particular Annuity Starting Date, the Participant’s monthly
benefit under this Plan shall be reduced by the portion of his
retirement allowance or vested benefit thereafter paid from the
Retirement Plan. This provision shall not be applicable to any
portion of a Participant’s Supplemental Benefit received in
the form of a lump sum payment.
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(a)
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A
Participant shall be vested in, and have a nonforfeitable right to,
the benefit payable under this Article II to the same extent
as the Participant is vested in his Accrued Benefit (as that term
is defined in the Retirement Plan) under the provisions of the
Retirement Plan.
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(b)
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Notwithstanding any provision of
this Plan to the contrary, in the event of an Acceleration Event,
all Participants and their Beneficiaries shall become fully vested
in the benefits provided under this Plan.
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(i)
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Subject to the provisions of clause
(iii) below, the portion of any Participant’s 409A
Supplemental Benefit payable under Section 2.02 attributable
to the TPP formula (as defined in Section 4.01(b) of the
Retirement Plan), to the extent vested pursuant to
Section 2.03, shall commence as of the first day of the month
following (1) the Participant’s Termination of
Employment or (2) if the Participant is not at least age 50 on
such date of Termination of Employment and his age and service as
of such date does not equal 80 or more, the Participant’s
attainment of age 55, if later.
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(ii)
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Notwithstanding the foregoing
provisions of clause (i) above and subject to the provisions
of clause (iii) below, the portion of any Participant’s
409A Supplemental Benefit payable under Section 2.02
attributable to the PEP formula (as defined in Section 4.01(c)
of the Retirement Plan), to the extent vested pursuant to
Section 2.03, shall commence as of the first day of the month
following the Participant’s Termination of
Employment.
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(iii)
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Notwithstanding the foregoing if a
Participant is classified as a “Specified Employee” on
his date of Termination of Employment, the actual payment of a 409A
Supplemental Benefit payable under Section 2.02 on account of
such Participant’s Termination of Employment for reasons
other than death or Disability shall not commence prior to the
first day of the seventh month following the Participant’s
Termination of Employment. Any payment due the Participant which he
would have otherwise received under Section 2.02 during the
six month period immediately following such Participant’s
Termination of Employment shall be accumulated, with interest, at
the IRS Interest Rate (as defined in the Retirement Plan) in
accordance with procedures established by the Committee. For the
avoidance of doubt, the provisions of this clause (iii) shall
not apply to a 409A Supplemental Benefit payable under
(1) Section 2.04(c) due to the death of the Participant
or (2) Section 2.04(d) due to the Participant’s
Disability.
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(iv)
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Notwithstanding the foregoing, in
the event a Participant who incurred a Termination of Employment
prior to January 1, 2009 has not commence payment of his 409A
Supplemental Benefit as of January 1, 2009, such
Participant’s 409A Supplemental Benefit shall commence as of
April 1, 2009 (January 1, 2009, with respect to a
Participant listed on Appendix B) or, if later, the date
specified in clause (i), (ii) or (iii) above, whichever
is applicable.
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(v)
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A
Participant’s Grandfathered Pre-2005 Benefit shall commence
in accordance with the provisions of the Plan as in effect on
October 3, 2004, modified as set forth in Appendix A and
without regard to any Plan amendments after October 3, 2004
which would constitute a material modification for Code
Section 409A purposes.
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(i)
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Unless a Participant has a valid
election under clause (ii) below in effect, the portion of the
Participant’s 409A Supplemental Benefit determined under
Section 2.02 attributable to the TPP formula (as defined in
Section 4.01(b) of the Retirement Plan) shall be paid in the
form of a single life annuity for the life of the Participant, if
the Participant is not married on his Annuity Starting Date, or in
the form of a 50% joint & survivor annuity, if the Participant
is married (or has a Registered Domestic Partner) on his Annuity
Starting Date.
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(ii)
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Subject to the provisions of clause
(iii) below, a Participant may elect to convert his 409A
Supplemental Benefit payable under Section 2.02 attributable
to the TPP formula (as defined in Section 4.01(b) of the
Retirement Plan) into an optional annuity of equivalent actuarial
value available to that Participant under the provisions of
Section 4.07(b) of the Retirement Plan as of his Annuity
Starting Date, provided said optional annuity satisfies the
definition of “life annuity” as provided in Treasury
Regs. 1.409A-(2)(b)(2)(ii) and any further guidance thereto. Such
eq
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