Exhibit 10
LINDBERG CORPORATION
SUPPLEMENTAL PENSION PLAN
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(As Amended and Restated
Effective as of
September 5, 2000)
Mayer, Brown & Platt
Chicago
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TABLE OF CONTENTS
PAGE
SECTION 1 General . . . . . . . . . . . . . . . . . . . . . . .1
1.1. History, Purpose and Effective Date . . . . . . . . .1
1.2. Plan Administration; Plan Year. . . . . . . . . . . .1
1.3. Source of Benefits. . . . . . . . . . . . . . . . . .1
1.4. Indemnification and Exculpation . . . . . . . . . . .2
1.5. Applicable Laws . . . . . . . . . . . . . . . . . . .2
1.6. Gender and Number . . . . . . . . . . . . . . . . . .2
1.7. Action by Company . . . . . . . . . . . . . . . . . .2
1.8. Severability of Plan Provisions . . . . . . . . . . .2
1.9. Notices . . . . . . . . . . . . . . . . . . . . . . .3
1.10. Defined Terms . . . . . . . . . . . . . . . . . . . .3
SECTION 2 Participation . . . . . . . . . . . . . . . . . . . .3
2.1. Participation . . . . . . . . . . . . . . . . . . . .3
2.2. Plan Not Contract of Employment . . . . . . . . . . .3
SECTION 3 Supplemental Benefit. . . . . . . . . . . . . . . . .3
SECTION 4 Vesting and Payment of Supplemental Benefits. . . . .5
4.1. Vesting . . . . . . . . . . . . . . . . . . . . . . .5
4.2. Time of Payment of Supplemental Benefit to
Participant . . . . . . . . . . . . . . . . . . .5
4.3. Form of Payment to Participant. . . . . . . . . . . .5
4.4. Payment of Plan Benefits to Beneficiaries . . . . . .6
4.5. Facility of Payment . . . . . . . . . . . . . . . . .6
4.6. Benefits May Not Be Assigned or Alienated . . . . . .6
4.7. Tax Liability . . . . . . . . . . . . . . . . . . . .6
4.8. Company Discretion to Accelerate. . . . . . . . . . .7
SECTION 5 Administration. . . . . . . . . . . . . . . . . . . .7
5.1. Committee Membership and Authority. . . . . . . . . .7
5.2. Allocation and Delegation of Committee
Responsibilities and Powers. . . . . . . . . . .8
5.3. Information to be Furnished to Committee. . . . . . .8
5.4. Committee's Decision Final. . . . . . . . . . . . . .8
SECTION 6 Amendment and Termination . . . . . . . . . . . . . .9
6.1. Amendment and Termination . . . . . . . . . . . . . .9
6.2. Merger. . . . . . . . . . . . . . . . . . . . . . . .9
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SECTION 7 Change of Control . . . . . . . . . . . . . . . . . .9
7.1. Definition. . . . . . . . . . . . . . . . . . . . . .9
7.2. Effect of Change of Control . . . . . . . . . . . . 10
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LINDBERG CORPORATION
SUPPLEMENTAL PENSION PLAN
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SECTION 1
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General
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1.1. History, Purpose and Effective Date. Lindberg
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Corporation (the "Company"), has established the Lindberg
Corporation Supplemental Pension Plan (the "Plan"),to enable the
eligible employees of the Company to receive retirement income
and other benefits in addition to the retirement income and other
benefits payable under the qualified plans of the Company. The
following provisions constitute an amendment, restatement and
continuation of the Plan as in effect immediately prior to
September 5, 2000, the effective date of the Plan as set forth
herein. The Plan is not intended to qualify under section 401(a)
of the Internal Revenue Code of 1986, as amended (the "Code"), or
to be subject to Parts 2, 3 or 4 of Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
The Plan is maintained primarily for the purpose of providing
deferred compensation for a select group of management or highly
compensated employees within the meaning of section 301(a)(3) of
ERISA.
1.2. Plan Administration; Plan Year. The Plan shall be
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administered by the Lindberg Corporation Pension and Employee
Benefits Committee (the "Committee"), as more fully described in
Section 5. The "Plan Year" means the 12-consecutive-month period
beginning on each January 1 and ending on the following
December 31.
1.3. Source of Benefits. The amount of any benefit payable
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under the Plan will be paid in cash from the general assets of
the Company. Such amounts payable shall be reflected on the
accounting records of the Company but shall not be construed to
create, or require the creation of, a trust, custodial or escrow
account. No employee or other individual entitled to benefits
under the Plan shall have any right, title or interest whatever
in any assets of the Company or to any investment reserves,
accounts or funds that the Company may purchase, establish or
accumulate to aid in providing the benefits under the Plan.
Nothing contained in the Plan and no action taken pursuant to its
provisions shall create a trust or fiduciary relationship of any
kind between the Company and an employee or any other person.
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Neither an employee or beneficiary of an employee shall acquire
any interest greater than that of an unsecured creditor.
1.4. Indemnification and Exculpation. The members of the
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Committee, and its agents, and the officers, directors, and
employees of the Company and its affiliates shall be indemnified
and held harmless by the Company against and from any and all
loss, costs, liability, or expense that may be imposed upon or
reasonably incurred by them in connection with or resulting from
any claim, action, suit, or proceeding to which they may be a
party or in which they may be involved by reason of any action
taken or failure to act under the Plan and against and from any
and all amounts paid by them in settlement (with the Company's
written approval) or paid by them in satisfaction of a judgment
in any such action, suit, or proceeding. The foregoing
provisions shall not be applicable to any person if the loss,
costs, liability, or expense is due to such person's gross
negligence or willful misconduct.
1.5. Applicable Laws. The Plan shall be construed and
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administered in accordance with the internal laws of the State of
Illinois to the extent that such laws are not preempted by the
laws of the United States of America.
1.6. Gender and Number. Where the context admits, words in
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any gender shall include any other gender, words in the singular
shall include the plural and the plural shall include the
singular.
1.7. Action by Company. Except as specified herein, any
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action required of or permitted by the Company under the Plan
shall be by approval of the Committee or any person or persons
authorized by the Committee.
1.8. Severability of Plan Provisions. In the event any
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provision of the Plan shall be held invalid or illegal for any
reason, any invalidity or illegality shall not affect the
remaining parts of the Plan, but the Plan shall be construed and
enforced as if the invalid or illegal provision had never been
inserted, and the Company shall have the right to correct and
remedy such questions of invalidity or illegality by amendment as
provided in the Plan.
1.9. Notices. Any notice or document required to be filed
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with the Committee under the Plan will be properly filed if
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delivered or mailed by registered mail, postage prepaid, to the
Committee (or its delegate), in care of the Company, at its
principal executive offices. Any notice required under the Plan
may be waived by the person entitled to notice.
1.10. Defined Terms. Terms used frequently with the
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same meaning are indicated by initial capital letters, and are
defined throughout the Plan.
SECTION 2
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Participation
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2.1. Participation. The Company by resolution of its Board
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of Directors from time to time shall designate those employees of
the Company who are "Participants" in the Plan. The Committee
shall maintain a record of all such actions, including the dates
thereof and the names of affected employees.
2.2. Plan Not Contract of Employment. The Plan does not
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constitute a contract of employment, and participation in the
Plan will not give any employee the right to be retained in the
employ of the Company nor any right or claim to any benefit under
the Plan, unless such right or claim has specifically accrued
under the terms of the Plan.
SECTION 3
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Supplemental Benefit
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A Participant's "Supplemental Benefit", payable in the form of a
ten year certain and life annuity, shall be a monthly amount
equal to:
(a) the product of .0334 times the Participant's Final
Average Pay times his Years of Benefit Service not
in excess of 15 and, if a Participant's benefit
commences prior to his attainment of age 62,
reduced by .3% for each month that payment
precedes his 62nd birthday;
LESS
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(b) the amount of the Accrued Benefit payable under
the Lindberg Corporation Pension Plan, as such
plan may be amended from time to time (the
"Pension Plan"), expressed in the form of a ten-
year certain and life annuity, and reduced to the
amount that would be payable to the Participant
from the Pension Plan if he elected commencement
in that form at the same time payment of his
Supplemental Benefit commences.
For purposes of the foregoing, "Pay" shall have the same meaning
as the identical term in the Pension Plan without regard to any
limitation imposed by section 401(a)(17) of the Code, "Final
Average Pay" shall mean the monthly average of a Participant's
Pay for the period of three calendar years during which he
received the largest total amount of Pay within the 10 years
preceding his termination of employment, and "Years of Benefit
Service" shall have the same meaning as the identical term in the
Pension Plan. Notwithstanding the foregoing, in the event any
Participant becomes entitled to benefits pursuant to the terms of
an individual agreement (including, but not limited to, an
employment agreement or severance agreement) (each an "Individual
Agreement") as a result of a Change of Control (as defined in
subsection 7.1):
(1) any compensation payable to the Participant pursuant to
an Individual Agreement for periods after his
termination of employment ("Post-Termination
Compensation") shall be considered "Pay" for purposes
of the Plan to the extent such compensation would have
been considered "Pay" if the compensation had been paid
to the Participant in the normal course of employment
with the Company;
(2) any period to which Post-Termination Compensation
relates shall be considered Years of Benefit Service
for purposes of the Plan to the extent such period
would have been included in the Participant's Years of
Benefit Service if he remained employment during such
period; and
(3) any period to which Post-Termination Compensation
relates shall be taken into account as years prior to
the Participant's termination of employment for
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purposes of determining his Final Average Pay for
purposes of the Plan.
SECTION 4
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Vesting and Payment of Supplemental Benefits
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4.1. Vesting. Subject to subsection 4.5, a Participant
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shall become vested and have a nonforfeitable interest in his
Supplemental Benefit on the later of (a) the day he is credited
with 10 Years of Vesting Service (as defined under the Pension
Plan) and (b) the end of his third full year of participation in
this Plan. In addition, a Participant who dies while employed by
the Company shall be fully vested in the Supplemental Benefit
accrued at the time of his death. Notwithstanding the foregoing
provisions of this subsection 4.1, a Participant or his
beneficiary shall have no right to any benefits under the Plan if
the Committee determines that he engaged in a willful, deliberate
or grossly negligent act of commission or omission which is
substantially injurious to the finances or reputation of the
Company.
4.2. Time of Payment of Supplemental Benefit to Participant.
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A Participant's vested Supplemental Benefit shall commence to be
paid as of the first day of the month following the later of the
Participant's fifty-fifth (55th) birthday or the day he
terminates his employment with the Company (with the first such
payment to be made as soon as practical thereafter).
4.3. Form of Payment to Participant. The normal form of
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payment to a Participant is a ten-year certain and life annuity.
A Participant may elect a lump sum, or any form of payment
available under the Pension Plan (which need not be the same form
in which he receives his Pension Plan benefit) which is the
Actuarial Equivalent (as defined in the Pension Plan) of the
normal form, provided that no such election of an alternative
form of payment shall be valid if it has not been in effect for
at least six (6) months prior to the Participant's termination of
employment. Subject to the foregoing condition, a Participant
may make a new election of a different form of payment at any
time, which election will automatically revoke any prior
election. Accordingly, if for example a Participant elects an
alternative form of payment a year prior to his termination of
employment, but during the six-month period immediately preceding
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his termination of employment makes a new election of a different
alternative form, such new election will be invalid because of
the failure to satisfy the six-month rule and he will be paid in
the normal form. If a Participant elects payment in the form of
a lump sum, such lump sum shall be calculated using the
Applicable Treasury Rate and Applicable Mortality Table, as
defined in the Pension Plan.
4.4. Payment of Plan Benefits to Beneficiaries. If a
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Participant dies after he has commenced the payment of his
Supplemental Benefit, his Beneficiary shall receive what remains,
if anything, of the payments guaranteed under the form of payment
elected by the Participant. If a vested Participant dies before
he has commenced the payment of his Supplemental Benefit, his
Beneficiary shall receive 120 monthly payments in the amount that
would have been paid to the Participant had he terminated
employment on the day before his death, commencing on the first
day of the month following the later of the date of the
Participant's death or the date he would have attained age 55.
For purposes of this Plan, a Participant's "Beneficiary" shall be
any person or persons he designates in writing, provided that in
the absence of such designation his Beneficiary shall be his
surviving spouse, if the Participant is married at the time of
his death, or if he is not married, his estate.
4.5. Facility of Payment. If, in the Committee's opinion, a
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Participant or other person entitled to benefits under the Plan
is under a legal disability or is in any way incapacitated so as
to be unable to manage his financial affairs, payment will be
made to the conservator or other person legally charged with the
care of his person or his estate or, if no such legal conservator
will have been appointed, then to any individual (for the benefit
of such Participant or other person entitled to benefits under
the Plan) whom the Committee may from time to time approve.
4.6. Benefits May Not Be Assigned or Alienated. The
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Supplemental Benefit payable to, or on account of, any
Participant or Beneficiary under the Plan may not be voluntarily
or involuntarily assigned or alienated, and any attempt to do so
shall cause such Supplemental Benefit to be forfeited.
4.7. Tax Liability. The Company may withhold from any
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payment of Supplemental Benefit hereunder any taxes required to
be withheld and such sum as the Company may reasonably estimate
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to be necessary to cover any taxes for which the Company may be
liable and which may be assessed with regard to such payment.
4.8. Company Discretion to Accelerate. The Company, by
--------------------------------
resolution of its Board of Directors, may accelerate the date of
distribution of any benefits payable under the Plan to or on
behalf of any Participant to the extent that the Company
determines that such acceleration is in the best interests of the
Company because of changes in tax laws or accounting principles,
Department of Labor regulations, or any other reason which
negates or diminishes the continued value of the Plan to the
Company or Participant. The amount distributed pursuant to this
subsection will be paid in the form of a lump sum. In the event
of acceleration in accordance with this subsection, the
Applicable Treasury Rate and Applicable Mortality Table will be
used to determine the present value of the Supplemental Benefit.
SECTION 5
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Administration
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5.1. Committee Membership and Authority. The Committee
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shall have the following discretionary authority, powers, rights
and duties in addition to those vested in it elsewhere in the
Plan:
(a) to adopt and apply in a uniform and
nondiscriminatory manner to all persons similarly
situated, such rules of procedure and regulations
as, in its opinion, may be necessary for the
proper and efficient administration of the Plan
and as are consistent with the provisions of the
Plan;
(b) to enforce the Plan in accordance with its terms
and with such applicable rules and regulations as
may be adopted by the Committee;
(c) to determine conclusively all questions arising
under the Plan, including the power to determine
the eligibility of employees and the rights of
Participants and other persons entitled to
benefits under the Plan and their respective
benefits, to make factual findings and to remedy
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ambiguities, inconsistencies or omissions of
whatever kind;
(d) to maintain and keep adequate records concerning
the Plan and concerning its proceedings and acts
in such form and detail as the Committee may
decide;
(e) to direct all payments of benefits under the Plan;
and
(f) to employ agents, attorneys, accountants or other
persons (who may also be employed by or represent
the Employers) for such purposes as the Committee
considers necessary or desirable to discharge its
duties.
The certificate of a majority of the members of the Committee
that the Committee has taken or authorized any action shall be
conclusive in favor of any person relying on the certificate.
5.2. Allocation and Delegation of Committee Responsibilities
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and Powers. In exercising its authority to control and manage
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the operation and administration of the Plan, the Committee may
allocate all or any part of its responsibilities and powers to
any one or more of its members and may delegate all or any part
of its responsibilities and powers to any person or persons
selected by it. Any such allocation or delegation may be revoked
at any time.
5.3. Information to be Furnished to Committee. The Company
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shall furnish the Committee such data and information as may be
required for it to discharge its duties and the records of the
Company shall be conclusive on all persons unless determined to
be incorrect. Participants and other persons entitled to
benefits under the Plan must furnish to the Committee such
evidence, data or information as the Committee considers
desirable to carry out the Plan.
5.4. Committee's Decision Final. Any interpretation of the
--------------------------
Plan and any decision on any matter within the discretion of the
Committee made by the Committee shall be binding on all persons.
A misstatement or other mistake of fact shall be corrected when
it becomes known, and the Committee shall make such adjustment on
account thereof as it considers equitable and practicable.
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SECTION 6
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Amendment and Termination
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6.1. Amendment and Termination. The Company and the
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Committee have the right to amend the Plan from time to time, and
the right to terminate it; provided, however, that no such
amendment or termination of the Plan will:
(a) reduce or impair the interests of Participants in
benefits being paid under the Plan as of the date
of amendment or termination, as the case may be;
or
(b) reduce the amount of Plan benefits payable to or
on account of any employee of an Employer to an
amount which is less than the amount to which he
would be entitled in accordance with the
provisions of the Plan if the employee terminated
employment immediately prior to the date of the
amendment or termination, as the case may be.
6.2. Merger. The Company will not merge or consolidate with
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any other corporation, or liquidate or dissolve, without making
suitable arrangements, satisfactory to the Committee, for the
payment of any benefits payable under the Plan.
SECTION 7
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Change of Control
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7.1. Definition. "Change of Control" means the happening of
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any of the following events:
(a) The Company is merged, consolidated or reorganized into
or with another corporation or other legal person, or
there is an offer to holders of the common stock
generally relating to the acquisition of their shares,
and as a result of such merger, consolidation,
reorganization or offer, less than 75% of the
outstanding voting securities or other capital
interests of the surviving, resulting or acquiring
<PAGE> -9-
corporation or other legal person are owned in the
aggregate by the stockholders of the Company
immediately prior to such merger, consolidation,
reorganization or offer;
(b) The Company sells all or substantially all of its
business and/or assets to any other corporation or
other legal person, less than 75% of the outstanding
voting securities or other capital interests of which
are owned in the aggregate, directly or indirectly, by
the persons who were stockholders of the Company
immediately before or after such sale; or
(c) During any period of two consecutive years, individuals
who at the beginning of any such period constitute the
directors of the Company cease for any reason to
constitute at least a majority thereof, unless the
election, or the nomination for election by the
Company's stockholders, of each new director of the
Company was approved by a vote of at least two thirds
of such directors of the Company then still in office
who were directors of the Company at the beginning of
any such period.
7.2. Effect of Change of Control. Notwithstanding any
---------------------------
other provisions of the Plan to the contrary, in the event of a
Change of Control:
(a) each Participant shall immediately be fully vested in
any benefits accrued under Section 3 and any additional
benefits payable pursuant to the terms of an Individual
Agreement (without regard to whether all conditions for
receipt of such benefits have been satisfied); and
(b) each Participant (or his Beneficiary) shall be paid a
lump sum payment in cash within 30 days of the Change
of Control equal to the actuarially determined present
value of his accrued benefit under Section 3 and, if
applicable, his additional pension benefits payable
under the terms of any Individual Agreement.
For purposes of paragraph (b) next above, the lump sum payment
shall be calculated using the Applicable Treasury Rate and
Applicable Mortality Table, and the benefit to be converted into
the lump sum shall be the normal form under Section 3, determined
<PAGE> -10-
as though the Participant had attained the greater of age 62 or
his actual age as of the date of the Change of Control and the
actuarial present value of the benefits payable to the
Participant shall be computed as of the date of the Change of
Control assuming the Participant commenced benefits at the later
of the Participant's current age or at age 55.
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