Exhibit 10(i)
PARKER-HANNIFIN
CORPORATION
AMENDED AND RESTATED
SAVINGS RESTORATION PLAN
Adopted: 07/21/2008
Effective: 07/21/2008
Parker-Hannifin Corporation, an Ohio
corporation, (the “Company”), established this Savings
Restoration Plan (the “Plan”), originally effective
October 1, 1994, for the purpose of attracting high quality
executives and promoting in its executives increased efficiency and
an interest in the successful operation of the Company by restoring
some of the deferral opportunities and employer-provided benefits
that are lost under The Parker Retirement Savings Plan due to
legislative limits. The Plan was amended during December 2005 to
provide for certain transitional rules and is hereby amended and
restated as of July 21, 2008 and such other dates as specified
herein to reflect the requirements of the American Jobs Creation
Act (“the Act”) with respect to the terms and
conditions applicable to amounts that are deferred under the
Savings Restoration Plan after December 31, 2004 and subject
to Section 409A of the Code. Except as otherwise specifically
provided in Sections 4.1(i), 6.2(iii) and 8.4 of this Plan,
all benefits deferred and vested under the Plan prior to
January 1, 2005 and any additional amounts that are not
subject to Section 409A of the Code, including the portion of
a Participant’s Excess RIA Account that was vested under the
terms of the Plan in effect on December 31, 2004 and earnings
thereon, (the “Grandfathered Amounts”) shall continue
to be subject solely to the terms of the separate Plan as in effect
on December 31, 2004. The Plan will be administered in a
manner consistent with the Act and Section 409A of the Code
and any Regulations or other guidance thereunder and any provision
in the Plan that is inconsistent with Section 409A of the Code
shall be void and without effect. Notwithstanding anything else in
the Plan to the contrary, nothing herein shall be read to preclude
the Plan from using any transition rules permitted under the Act,
provided that no action will be permitted with respect to the
Grandfathered Amounts that will subject such amounts to
Section 409A of the Code.
ARTICLE 1 DEFINITIONS
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1.1.
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Account shall mean the notional account established for
record-keeping purposes for a Participant pursuant to Article
5 . The term Account shall include the Restoration Account
and/or the Excess RIA Account, as applicable.
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1.2.
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Adjusted
Matching Percentage shall
mean the sum of 100% of the first 3% of a Participant’s Total
Deferral Percentage, plus 50% of the next 2% of the
Participant’s Total Deferral Percentage. The maximum Adjusted
Matching Percentage for any Plan Year shall be 4%.
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1.3.
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Administrator shall mean the Company or, if applicable, the
committee appointed by the Board of Directors of the Company to
administer the Plan pursuant to Article 13 .
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1.4.
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Affiliated Group
shall mean the Company and all
entities with which the Company would be considered a single
employer under Sections 414(b) and 414(c) of the Code, provided
that in applying Section 1563(a)(1), (2), and (3) of the
Code for purposes of
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determining a controlled group of
corporations under Section 414(b) of the Code, the language
“at least 50 percent” is used instead of “at
least 80 percent” each place it appears in
Section 1563(a)(1), (2), and (3) of the Code, and in
applying Section 1.414(c)-2 of the Treasury Regulations for
purposes of determining trades or businesses (whether or not
incorporated) that are under common control for purposes of
Section 414(c) of the Code, “at least 50 percent”
is used instead of “at least 80 percent” each place it
appears in that regulation. Such term shall be interpreted in a
manner consistent with the definition of “service
recipient” contained in Section 409A of the
Code.
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1.5.
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Annual
Deferral shall mean the
amount of Compensation which the Participant elects to defer for a
Plan Year pursuant to Articles 2 and 3 .
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1.6.
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Annualized
Base Salary shall mean a
Participant’s annualized base salary, determined by the
Administrator as of November 1 of the calendar year
immediately preceding the Plan Year for which the Matching Limit is
being determined.
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1.7.
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Applicable
Dollar Amount shall mean
the “applicable dollar amount” determined under
Section 402(g)(1)(B) of the Code for the Plan Year for which
the Matching Limit is being determined.
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1.8.
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Beneficiary shall mean the person or persons or entity
designated as such in accordance with Article 14
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1.9.
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Change in
Control means the
occurrence of one of the following events:
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(a)
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A change in
ownership of the Company, which occurs on the date that any one
person or more than one person acting as a group (within the
meaning of the Regulations under Section 409A of the Code)
acquires ownership of stock of the Company that, together with
stock held by such person or group, constitutes more than 50% of
the total voting power of the stock of the Company. Notwithstanding
the foregoing, if any one person or group is considered to own more
than 50% of the total voting power of the stock of the Company, the
acquisition of additional stock by the same person or group is not
considered to cause a change in the ownership of the Company or a
change in the effective control of the Company (within the meaning
of Section 1.9(b) of this Plan). Notwithstanding the
foregoing, a Change in Control shall not be deemed to occur solely
because any person acquires ownership of more than 50% of the total
voting power of the stock of the Company as a result of the
acquisition by the Company of stock of the Company which, by
reducing the number of shares outstanding, increases the percentage
of shares beneficially owned by such person; provided, that if a
Change in Control would occur as a result of such an acquisition by
the Company (if not for the operation of this sentence), and after
the Company’s acquisition such person becomes the beneficial
owner of additional stock of the Company that increases the
percentage of outstanding shares of stock of the Company owned by
such person, a Change in Control shall then occur.
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(b)
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A change in
effective control of the Company, which occurs on either of the
following dates:
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(i)
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The date that
any one person or more than one person acting as a group (within
the meaning of the Regulations under Section 409A of the Code)
acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such person or group)
ownership of stock of the Company possessing 30% or more of the
total voting power of the Company. Notwithstanding the foregoing,
if any one person or group is considered to own 30% or more of the
total voting power of the stock of the Company, the acquisition of
additional stock by the same person or group is not considered to
cause a change in the effective control of the Company or a change
in ownership of the Company (within the meaning of
Section 1.9(a) of this Plan). Notwithstanding the
foregoing, a Change in Control shall not be deemed to occur solely
because any person acquires ownership of more than 30% of the total
voting power of the stock of the Company as a result of the
acquisition by the Company of stock of the Company which, by
reducing the number of shares outstanding, increases the percentage
of shares beneficially owned by such person; provided, that if a
Change in Control would occur as a result of such an acquisition by
the Company (if not for the operation of this sentence), and after
the Company’s acquisition such person becomes the beneficial
owner of additional stock of the Company that increases the
percentage of outstanding shares of stock of the Company owned by
such person, a Change in Control shall then occur.
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(ii)
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The date that a
majority of the Company’s board of directors is replaced
during any 12-month period by directors whose appointment or
election was not endorsed by a majority of the members of the board
prior to the date of such appointment or election.
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(c)
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a change in the
ownership of a substantial portion of the Company’s assets,
which occurs on the date that any one person or more than one
person acting as a group (within the meaning of the Regulations
under Section 409A of the Code) acquires (or has acquired
during the 12-month period ending on the date of the most recent
acquisition by such person or group) assets that have a total gross
fair market value equal to or more than 65% of the total gross fair
market value of all the assets of the Company immediately before
such acquisition or acquisitions. The gross fair market value of
assets shall be determined without regard to liabilities associated
with such assets. Notwithstanding the foregoing, a transfer of
assets shall not result in a change in ownership of a substantial
portion of the Company’s assets if such transfer is to:
(i) a shareholder of the Company (immediately before the asset
transfer) in exchange for or with respect to its stock,
(ii) an entity 50% or more of the total value or voting power
of which is owned, directly or indirectly, by the Company,
(iii) a person or group (within the meaning of the Regulations
under Section 409A of the Code) that owns, directly or
indirectly, 50% or more of the total value or voting power of the
stock of the Company, or (iv) an entity, at least 50% of the
total value or voting power of which is owned, directly or
indirectly by a person or group described in
Section 1.9(c)(iii) of this Plan.
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Notwithstanding Sections 1.9(a),
1.9(b)(i) and 1.9(c) above, the consummation of a merger,
consolidation, share exchange or similar form of corporate
reorganization of the Company or any Subsidiary that requires the
approval of the Company’s stockholders, whether for such
transaction or the issuance of securities in connection with the
transaction or otherwise (a “Business Combination”),
shall not be deemed a Change in Control if, immediately following
such Business Combination: (a) more than 50% of the total
voting power of the corporation resulting from such Business
Combination (the “Surviving Corporation”) or, if
applicable, the ultimate parent corporation which directly or
indirectly has beneficial ownership of 100% of the voting
securities eligible to elect directors of the Surviving Corporation
(the “Parent Corporation”), is represented by
securities of the Company eligible to vote for the election of the
Board (the “Company Voting Securities”) that were
outstanding immediately prior to the Business Combination (or, if
applicable, shares into which such Company Voting Securities were
converted pursuant to such Business Combination), and such voting
power among the holders thereof is in substantially the same
proportion as the voting power of such Company Voting Securities
among the holders thereof immediately prior to the Business
Combination, (b) no person (other than any employee benefit
plan sponsored or maintained by the Surviving Corporation or the
Parent Corporation) is or becomes the beneficial owner, directly or
indirectly, of 20% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the
Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation), and (c) at least a majority of the
members of the board of directors of the Parent Corporation (or, if
there is no Parent Corporation, the Surviving Corporation),
following the Business Combination, were members of the
Company’s Board at the time of the Board’s approval of
the execution of the initial agreement providing for such Business
Combination.
Notwithstanding the foregoing, an
acquisition of stock of the Company described in
Section 1.9(a) or 1.9(b)(i) above shall not be deemed
to be a Change in Control by virtue of any of the following
situations: (a) an acquisition by the Company or any
Subsidiary; (b) an acquisition by any employee benefit plan
sponsored or maintained by the Company or any Subsidiary;
(c) an acquisition by any underwriter temporarily holding
securities pursuant to an offering of such securities; or
(d) the acquisition of stock of the Company from the
Company.
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1.10.
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Code shall mean the Internal Revenue Code of 1986, as
amended, or any successor statute, and regulations or other
guidance issued thereunder.
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1.11.
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Compensation shall mean:
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(a)
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For amounts
that are due and payable before January 1, 2007, the sum of
the Participant’s base salary and regular bonuses (including
profit-sharing, the Company’s Return on Net Assets (RONA)
Plan, and target incentive bonus, but excluding sales commissions,
payments under any long term incentive plan, volume incentive plan,
or other extraordinary bonus or incentive plan) for a Plan Year
before reductions for deferrals under the Plan, or the Executive
Deferral Plan, or the Savings Plan, or the Parker-Hannifin
Corporation Cafeteria Plan, or the Group Insurance Plan for Hourly
and Salaried Employees of Parker-Hannifin Corporation.
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(b)
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For Plan Years
beginning on and after January 1, 2007, Compensation shall
mean a Participant’s base salary before reductions for
deferrals under the Plan, or the Executive Deferral Plan, or the
Savings Plan, or the Parker-Hannifin Corporation Cafeteria Plan, or
the Group Insurance Plan for Hourly and Salaried Employees of
Parker-Hannifin Corporation. Compensation shall not include any
amounts payable on account of Termination of Employment, whether
paid periodically or in a lump sum.
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1.12.
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Crediting
Rate shall mean:
(a) the amount described in Section 1.12.1 to the
extent the Account balance represents either Annual Deferrals under
Article 3 or earnings previously credited on such deferrals
under Section 5.2(d) , or Excess RIA Contributions
under Section 4.1(b) or earnings previously credited on
such Excess RIA Contributions under Section 5.2(d) ; or
(b) the amount described in Section 1.12.2 to the
extent the Restoration Account balance represents either Matching
Credits under Section 4.1(a) or interest previously
credited on such Matching Credits under Section 5.2(d)
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1.12.1 Crediting Rate for Annual
Deferrals and Excess RIA Contributions shall mean any notional
gains or losses equal to those generated as if the Restoration
Account balance attributable to Annual Deferrals under Article
3 and the Excess RIA Account Balance attributable to Excess RIA
Contributions under Section 4.1(b) had been invested in
one or more of the investment portfolios designated as available by
the Administrator, less separate account fees and less applicable
administrative charges determined annually by the
Administrator.
A Participant may elect to allocate
his or her Restoration Account and Excess RIA Account among the
available portfolios. The gains or losses shall be credited based
upon the daily unit values for the portfolio(s) selected by the
Participant. The rules and procedures for allocating the
Restoration Account and Excess RIA Account balance among the
portfolios shall be determined by the Administrator. The
Participant’s allocation is solely for the purpose of
calculating the Crediting Rate. Notwithstanding the method of
calculating the Crediting Rate, the Company shall be under no
obligation to purchase any investments designated by the
Participant.
1.12.2 Crediting Rate for
Matching Credits shall mean any notional gains or losses equal
to those generated as if the Restoration Account balance
attributable to Matching Credits under Section 4.1(a)
had been invested in the Common Stock of the Company, including
reinvestment of dividends. The rules and procedures for determining
the value of the Common Stock of the Company shall be determined by
the Administrator. The rules and procedures for re-allocating the
Restoration Account balance attributable to the Matching Credits
among the other portfolios offered under the Plan shall be
determined by the Administrator.
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1.13.
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Disability
shall mean the condition whereby a
Participant is (a) unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12
months; or (b) by reason of 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 12 months, receiving income replacement benefits for a
period of not less than three months under any accident
and
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health plan covering employees of
the Company. The Administrator, in its complete and sole
discretion, shall determine a Participant’s Disability. The
Administrator may require that the Participant submit to an
examination on an annual basis, at the expense of the Company, by a
competent physician or medical clinic selected by the Administrator
to confirm Disability. On the basis of such medical evidence, the
determination of the Administrator as to whether or not a condition
of Disability exists or continues shall be conclusive.
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1.14.
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Disability
Benefit shall mean the
benefit payable pursuant to Article 9 .
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1.15.
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Early
Retirement Date shall
mean age 55 with ten or more years of employment with the
Company.
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1.16.
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Eligible
Executive shall mean a
key employee of the Company or any of its subsidiaries who:
(a) is designated by the Administrator as eligible to
participate in the Plan; and (b) qualifies as a member of the
“select group of management or highly compensated
employees” under ERISA.
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1.17.
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Eligible RIA
Executive shall mean an
employee of the Company or any of its subsidiaries who is entitled
to receive an allocation to the Retirement Income Account portion
of the Savings Plan, and (a) who receives compensation, as
such term is used to determine contributions under the Savings
Plan, in excess of the amount specified in Section 401(a)(17)
of the Code, or (b) whose benefits payable from the Savings
Plan are directly or indirectly limited pursuant to
Section 415(c) of the Code.
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1.18.
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ERISA shall mean the Employee Retirement Income
Security Act of 1974, as amended, or any successor statute, and
regulations or other guidance issued thereunder.
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1.19.
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Estimated
Bonuses shall
mean:
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(a)
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For each Plan
Year beginning before January 1, 2007, the sum of a
Participant’s RONA and Target Incentive bonuses payable
during the Plan Year for which the Matching Limit is being
determined, estimated in good faith by the Administrator as of
November 1 of the immediately preceding calendar
year.
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(b)
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For each Plan
Year beginning on and after January 1, 2007, the sum of a
Participant’s RONA and Target Incentive bonuses payable in
August of the Plan Year for which the Matching Limit is being
determined, estimated in good faith by the Administrator as of
November 1 of the immediately preceding calendar
year.
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1.20.
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Excess RIA
Account shall mean the
Account established pursuant to Section 5.1(b) of this
Plan.
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1.21.
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Excess RIA
Contribution shall mean
the difference between the amount actually contributed to a
Participant’s Retirement Income Account under the Savings
Plan with respect to a Plan Year and the amount that would have
been contributed for such Plan Year but for the application of the
Statutory Limits, as adjusted for cost of living
increases.
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1.22.
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Executive
Deferral Plan shall mean
the Parker-Hannifin Corporation Amended and Restated Executive
Deferral Plan as it currently exists and as it may subsequently be
amended.
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1.23.
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Matching
Credit shall mean the
Company’s credit to the Participant’s Restoration
Account under Section 4.1(a) .
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1.24.
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Matching
Limit shall mean, for any
Plan Year, the excess of: (a) the lesser of: (i) $17,000
or (ii) the product of the Adjusted Matching Percentage times
the sum of the Participant’s Projected Gross Compensation,
over (b) the product of 4% times the lesser of: (i) the
Statutory Limit under Section 401(a)(17) of the Code on
compensation that may be taken into account under the Savings Plan
for the Plan Year, or (ii) the excess of a Participant’s
Projected Gross Compensation over the Participant’s Projected
SRP Deferral and Projected EDP Deferral.
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1.25.
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Matching
Percentage shall mean,
for any Plan Year, the percentage determined by dividing a
Participant’s Matching Limit by the Participant’s
Projected SRP Deferral.
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1.26.
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Normal
Retirement Date shall
mean the date on which a Participant attains age 65.
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1.27.
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Participant shall mean an Eligible Executive who has elected
to participate and has completed a Participation Agreement pursuant
to Article 2 or an Eligible RIA Executive entitled to
receive an Excess RIA Contribution.
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1.28.
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Participation Agreement shall mean the Eligible Executive’s or
Eligible RIA Executive’s written or electronic election to
participate in the Plan and/or to select distribution options in
accordance with Article 6 .
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1.29.
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Plan
Year shall mean the
calendar year.
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1.30.
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Projected
EDP Deferral shall mean
the amount that would be deferred by a Participant under
Section 3.1(a) of the Executive Deferral Plan for the Plan
Year for which the Matching Limit is being determined, if the terms
“Salary” and “Bonuses” used therein
referred to the Participant’s Annualized Base Salary and
Estimated Bonuses, respectively.
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1.31.
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Projected
Gross Compensation shall
mean the sum of a Participant’s RONA and target incentive
bonuses payable during the Plan Year for which the Matching Limit
is being determined, estimated in good faith by the Administrator
as of November 1 of the immediately preceding calendar year,
plus the Participant’s Annualized Base Salary.
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1.32.
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Projected
Savings Plan Deferral shall mean the lesser of (a) the Applicable
Dollar Amount, or (b) 75% of the excess of a
Participant’s Projected Gross Compensation over the
Participant’s Projected SRP Deferral and Projected EDP
Deferral.
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1.33.
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Projected
SRP Deferral shall
mean:
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(a)
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For the Plan
Year beginning January 1, 2005:
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(i)
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For a
Participant who is not eligible to participate in the Executive
Deferral Plan for such Plan Year, the lesser of: (A) $25,000
or (B) the product of the sum of the Participant’s
Annualized Base Salary and Estimated Bonuses times the percentage
of Compensation specified in the Participant’s Annual
Deferral under Section 3.1 for the Plan Year for which
the Matching Limit is being determined.
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(ii)
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For a
Participant who is eligible to participate in the Executive
Deferral Plan for such Plan Year, the lesser of: (A) $7,600 or
(B) the product of the sum of the Participant’s
Annualized Base Salary and Estimated Bonuses times the percentage
of Compensation specified in the Participant’s Annual
Deferral under Section 3.1 for the Plan Year for which
the Matching Limit is being determined.
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(b)
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For the Plan
Year beginning January 1, 2006, the lesser of:
(i) $25,000 or (ii) the product of the sum of the
Participant’s Annualized Base Salary and Estimated Bonuses
times the percentage of Compensation specified in the
Participant’s Annual Deferral under Section 3.1
for the Plan Year for which the Matching Limit is being
determined.
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(c)
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For each Plan
Year beginning on and after January 1, 2007, the lesser of:
(i) $25,000 or (ii) the product of the
Participant’s Annualized Base Salary times the percentage of
Compensation specified in the Participant’s Annual Deferral
under Section 3.1 for the Plan Year for which the
Matching Limit is being determined.
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1.34.
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Regulations shall mean regulations issued under
Section 409A of the Code. Reference to any section of the
Regulations shall be read to include any amendment or revision of
such Regulation.
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1.35.
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Restoration
Account shall mean the
Account established pursuant to Section 5.1(a)
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1.36.
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Retirement shall mean a Separation from Service from the
Affiliated Group that follows Normal or Early Retirement
Date.
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1.37.
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Retirement
Benefit shall mean the
benefit payable pursuant to Article 6 .
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1.38.
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Savings
Plan shall mean the
Parker Retirement Savings Plan, as it currently exists and as it
may subsequently be amended.
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1.39.
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Separation from
Service shall have the
meaning set out in Section 1.409A-1(h) of the Regulations;
provided, that in applying Section 1.409A-1(h)(ii) of the
Regulations, a separation from service shall be deemed to occur if
the Company and the Participant reasonably anticipate that the
level of bona fide services the Participant will perform for the
Affiliated Group after a certain date (whether as an employee or as
an independent contractor) will permanently decrease to less than
50% of the average level of bona fide services performed by the
Participant for the Affiliated Group (whether as an employee or as
an independent contractor) over the immediately preceding 36-month
period (or the full period of services performed for the Affiliated
Group if the Participant has been
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