EXHIBIT 10.8


 


 


COMMSCOPE,
INC. 


 


SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN


 


 


As
Amended and Restated

Effective December 15, 2004


 





















 


ARTICLE I


 


INTRODUCTION


 


1.1.                              Effective Date.  The effective date of the Plan
is June 8, 1990, and as amended and restated herein, December 15, 2004.


 


1.2.                              Purpose.  The purpose of the Plan is to provide
supplemental retirement benefits for a select group of management and/or highly
compensated employees of CommScope, Inc. and its Subsidiaries. The Plan is an
unfunded arrangement that is not intended to qualify under Section 401(a) of
the Internal Revenue Code of 1986, as amended from time to time, nor be
generally subject to the Employee Retirement Income Security Act of 1974, as
amended from time to time.


 


1.3.                              Legal Effect.  The terms and conditions of the
Plan as restated herein shall amend and supersede, prospectively and in its
entirety, the terms and conditions of the CommScope, Inc. of North Carolina
Supplemental Executive Retirement Plan, originally adopted June 8, 1990 (the “Prior
Plan”), except as expressly stated herein; provided, however, that the
provisions of the Prior Plan shall continue to govern the benefits and rights
of (i) all Participants who were retired under the terms of the Prior Plan as
of December 31, 2000, and, (ii) any other non-retired Participant who was both
actively employed and covered under the terms of the Prior Plan as of December
31, 2000, who elects not to be covered under the Plan as set forth herein in
lieu of coverage under the Prior Plan.  For
the avoidance of doubt, as of and following January 1, 2001, no Participant may
participate in both the Prior Plan and this Plan.


 


1.4.                              Administration.  The Plan shall be administered
by the Board or a Committee appointed by the Board.


 


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ARTICLE
II


 


DEFINITIONS


 


2.1                                 Administrator shall mean the Board, or the Committee appointed by the Board,
responsible for the overall operation and administration of the Plan.


 


2.2                                 Annual Compensation shall mean the Compensation paid to a
Participant by the Company for the Plan Year.


 


2.3                                 Annual Compensation Cap shall mean the lesser of (i) the Participant’s
Annual Compensation up to the limitation amount set forth under Section 401(a)(17) of the Code as applicable to the Plan Year, and (ii)
such Participant’s Annual Compensation up to the specific amounts as set forth
in Appendix A of the Plan herein.


 


2.4                                 Beneficial
Owner, Beneficially Owned and Beneficially Owning shall have
the meanings applicable under Rule
13d-3 promulgated under the 1934 Act.


 


2.5                                 Beneficiary shall mean the person or persons designated by the Participant to
receive a distribution of Plan benefits upon the death of such Participant.


 


2.5.                              Board shall mean the Board of Directors of the Company.


 


2.6.                              Cause shall mean a Participant’s commission of fraud, embezzlement, gross
misconduct, or other felonies against the Company.


 


2.7.                              Change of Control means, any of the
following:


(i)                                     the acquisition by
any person (a “Person”) (within the meaning of Sections 13(d) and 14(d) of the
Securities Act of 1934, as amended (the “1934 Act”)) of Beneficial Ownership of
Voting Securities which, when added to the Voting Securities then Beneficially
Owned by such Person, would result in such Person Beneficially Owning 33% or
more of the combined Voting Power of the Company’s then outstanding Voting
Securities; provided, however, that for purposes of this paragraph (i), a
Person shall not be deemed to have made an acquisition of Voting Securities if
such Person: (1) acquires Voting Securities as a result of a stock split, stock
dividend or other corporate restructuring in which all stockholders of the
class of such Voting Securities are treated on a pro rata basis; (2) acquires
the Voting Securities directly from the Company; (3) becomes the Beneficial
Owner of 33% or more of the combined Voting Power of the Company’s then
outstanding Voting Securities solely as a result of the acquisition of Voting
Securities by the Company or any Subsidiary which, by reducing the number of
Voting Securities outstanding, increases the proportional number of shares
Beneficially Owned by such Person, provided that if (x) a Person would own at
least such percentage as a result of the acquisition by the Company or any
Subsidiary and (y) after such acquisition by the Company or any Subsidiary,
such Person acquires Voting Securities, then an acquisition of Voting
Securities shall have occurred; (4) is the Company or any corporation or other
Person of which a majority of its voting power or its equity securities or
equity interest is owned directly or indirectly by the Company (a “Controlled
Entity”); or (5) acquires Voting Securities in connection with a “Non-Control
Transaction” (as defined in paragraph (iii) below); or


 


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(ii)                                  the individuals
who, as of December 15, 2004, are members of the Board (the “Incumbent Board”)
cease for any reason to constitute at least two-thirds of the Board; provided,
however, that if either the election of any new director or the nomination for
election of any new director by the Company’s stockholders was approved by a
vote of at least two-thirds of the Incumbent Board prior to such election or
nomination, such new director shall be considered as a member of the Incumbent
Board; provided further, however, that no individual shall be considered a
member of the Incumbent Board if such individual initially assumed office as a
result of either an actual or threatened “Election Contest” (as described in
Rule 14a-11 promulgated under the 1934 Act or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board (a “Proxy Contest”) including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest; or


 


(iii)                               approval by stockholders of
the Company of:


 


(A)                              a merger,
consolidation or reorganization involving the Company (a “Business Combination”),
unless


 


(1)                                  the stockholders of
the Company, immediately before the Business Combination, own, directly or
indirectly immediately following the Business Combination, at least a majority
of the combined voting power of the outstanding voting securities of the
corporation resulting from the Business Combination (the “Surviving Corporation”)
in substantially the same proportion as their ownership of the Voting
Securities immediately before the Business Combination, and


 


(2)                                  the individuals who
were members of the Incumbent Board immediately prior to the execution of the
agreement providing for the Business Combination constitute at least a majority
of the members of the Board of Directors of the Surviving Corporation, and


 


(3)                                  no Person (other
than the Company or any Controlled Entity, a trustee or other fiduciary holding
securities under one or more employee benefit plans or arrangements (or any
trust forming a part thereof) maintained by the Company, the Surviving
Corporation or any Controlled Entity, or any Person who, immediately prior to
the Business Combination, had Beneficial Ownership of 33% or more of the then
outstanding Voting Securities) has Beneficial Ownership of 33% or more of the
combined voting power of the Surviving Corporation’s then outstanding voting
securities (a Business Combination satisfying the conditions of clauses (1),
(2) and (3) of this subparagraph (A) shall be referred to as a “Non-Control
Transaction”);


 


(B)                                a complete
liquidation or dissolution of the Company; or


 


(C)                                the sale or other
disposition of all or substantially all of the assets of the Company (other
than a transfer to a Controlled Entity).


 


Notwithstanding
the foregoing, a Change of Control shall not be deemed to occur solely because
33% or more of the then outstanding Voting Securities is Beneficially Owned by
(x) a trustee or other fiduciary holding securities under one or more employee
benefit plans or


 


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arrangements
(or any trust forming a part thereof) maintained by the Company or any
Controlled Entity or (y) any corporation which, immediately prior to its
acquisition of such interest, is owned directly or indirectly by the
stockholders of the Company in the same proportion as their ownership of stock
in the Company immediately prior to such acquisition.


 


2.6.                              Code shall mean the Internal Revenue Code of 1986, as amended from time to
time.


 


2.7.                              Committee shall mean a committee created by
the Board to determine compensation matters involving officers and
directors.  Any function exercisable by
such Committee may also be exercised by the Board if no such Committee is ever
created or is created and subsequently disbanded.  Members of the Committee may be Board members
or other officers of the Company as designated by the Board.


 


2.8.                              Company shall mean CommScope, Inc., and any successor corporation or other legal
entity thereto.


 


2.9.                              Compensation in respect of any Plan Year shall mean the cash salary and wages paid to
the Participant by the Company, including annual bonuses and commissions earned
and accrued in respect of such Plan Year (whether or not actually paid in that
Plan Year), but excluding payments associated with any other employee benefit
plan, profit sharing plan, long term incentive or stock and stock option
programs provided by the Company. 
Compensation shall also include any salary reduction contributions made
by the Company under another Company sponsored employee benefit plan that
satisfies the requirements of Section 125 or Section 401(k) of the Code.


 


2.10.                        Early Retirement Date shall mean, unless determined otherwise by the
Plan Administrator on a case-by-case basis, the first day of the calendar month
coincident with or next following the later of the Participant’s 55th birthday
and the completion of 10 years of Service with the Company.


 


2.11.                        Earnings shall mean the notional
investment amounts periodically credited to each Participant’s Special Account
or Regular Account.


 


2.12.                        ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.


 


2.13.                        Normal Retirement Date shall mean the first day of the calendar month
coincident with or next following the Participant’s 65th birthday.


 


2.14.                        Participant shall mean any individual actively employed by the Company or Subsidiary
who is a member of a select group of management and/or highly compensated
employees and who is designated a Participant by the Board or the Committee.


 


2.15.                        Plan shall mean the CommScope, Inc. Supplemental Executive Retirement Plan as
Amended and Restated Effective December 15, 2004, as amended from time to time.


 


2.16.                        Plan Year shall mean the calendar year.


 


2.17.                        Prior Plan shall mean the plan and plan provisions of the CommScope, Inc. of North
Carolina Supplemental Executive Retirement Plan as in effect as of December 31,
2000 and prior to the amendment and restatement of such Plan effective January
1, 2001.


 


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2.18.                        Regular Account shall mean the individual account established for each employee who
first becomes a Participant in the Plan on or after January 1, 2001, or any
other actively employed Participant under the Prior Plan as of December 31,
2000 who elects to be covered under the terms of this Plan, to which the
Company credits an annual Company contribution and Earnings as provided in
Article IV herein.


 


2.19.                        Service shall mean the period of full time employment of a Participant with (i)
the Company, (ii) a prior parent corporation and/or a prior Subsidiary, or
(iii) a Subsidiary or parent corporation. 
Notwithstanding the above, at the complete discretion of the Board or
Committee, Service for purposes of determining any Participant’s Special
Account may include all or any part of a Participant’s continuous full time
employment with the company with whom such Participant was employed immediately
prior to becoming employed by the Company or Subsidiary.


 


2.20.                        Special Account shall mean the initial individual account established for each employee
who first becomes a Participant in the Plan on or after the January 1, 2001, or
any other actively employed Participant under the Prior Plan as of December 31,
2000 who elects to be covered under the terms of this Plan, to which the
Company credits a single lump sum amount and Earnings thereafter as provided in
Article IV herein.


 


2.21.                        Subsidiary shall mean any corporation or other legal entity (whether or not
incorporated), in which the Company directly or indirectly owns either (A)
Voting Securities possessing at least 50% of the Voting Power of such entity,
or (B) if such entity does not issue Voting Securities, at least 50% of the
ownership interests in such entity.


 


2.22.                        Supplemental Retirement Account Balance shall mean the total of the Participant’s
Regular Account and Special Account, including Earnings thereon, as of any
date.


 


2.23.                        Survivor’s Benefit shall mean the Supplemental Retirement Account
Balance payable to the Participant’s Beneficiary in accordance with Article V
herein.


 


2.24.                        Termination of Service shall mean the termination of a Participant’s
active Service with the Company or any Subsidiary, division or unit whether by
voluntary or involuntary separation, retirement, death, or disability.


 


2.25.                        Voting
Power shall mean the combined voting power of the then outstanding Voting
Securities.


 


2.26.                        Voting
Securities shall mean, with respect to the Company or any Subsidiary, any
securities issued by the Company or such Subsidiary, respectively, which
generally entitle the holder thereof to vote for the election of directors of
the Company.


 


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ARTICLE III


 


DESIGNATION OF PARTICIPANTS AND ELIGIBILITY FOR BENEFITS


 


3.1.                              Designation of Participants.   An
actively employed Participant under the Prior Plan as of December 31, 2000 who
elects to be covered under the terms of this Plan shall automatically become a
Participant in this Plan.  Any other
employee shall become a Participant in this Plan when the Board or the
Committee has (i) approved his selection to become a Participant in the Plan,
(ii) determined the amount of any Special Account to be credited to the
employee, and (iii) notified the employee, in writing, that he is a Participant
in the Plan.  Such notice shall be given
to a Participant by the Company with the concurrence of the Board or the
Committee and shall be accompanied by such information as shall be deemed
appropriate to describe the provisions of the Plan and the benefits thereunder.


 


3.2.                              Eligibility for Benefits.  Benefits
shall be payable in respect of a Participant if:


 


(a)
the Participant’s Termination of Service occurs on or after his Normal
Retirement Date.


 


(b)
the Participant’s Termination of Service occurs on or after his Early
Retirement Date.


 


(c)
the Participant’s Termination of Service occurs as a result of (i) his death
while in active Service before his Early Retirement Date or Normal Retirement
Date and he is survived by his Beneficiary, or (ii) his disability as described
in section 5.5 herein.


 


(d)
the Participant’s involuntary Termination of Service by the Company for reasons
other than for Cause.


 


Except
as provided in (c) or (d) above, in section 3.5 below, or upon a complete
termination of the Plan in accordance with section 8.1 below, no benefits shall
be payable hereunder with respect to any Participant whose Termination of
Service occurs prior to the earlier of his Early Retirement Date or his Normal Retirement
Date.


 


3.3.                              Continued Employment after Normal Retirement Date.  In the
event a Participant remains an active employee of the Company or any
Subsidiary, division or unit after his Normal Retirement Date, his right to
benefits under this Plan shall be fully vested, but no benefits shall be
payable to the Participant until the first day of the calendar month following
his Termination of Service for any reason. 
In addition, any such Participant who remains an active employee of the
Company or any Subsidiary, division or unit after his Normal Retirement Date,
shall continue to be eligible to receive (i) annual contributions to his
Regular Account in accordance with Article 4.3 and (ii) Earnings on his Special
Account and Regular Account in accordance with Article 4.5 hereof.


 


3.4.                              Continued Eligibility for Benefits. 
Notwithstanding the above, the Participant’s rights to receive, or
continue to receive, his Supplemental Executive Retirement Plan Account Balance
as defined in section 4.1 of this Plan, shall be contingent on his


 


(a)
rendering reasonable business consulting and advisory services after a
Termination of Service as the Company may reasonably request from time to time;
provided:


 


(i) It is understood that such services shall not
require the Participant to be active in the day-to-day activities of the
Company, and that the Participant shall perform such services as an independent
contractor.


 


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(ii)
It is further understood that the Participant shall be reasonably compensated
for such services in an amount to be then agreed upon, and he shall be
reimbursed for all expenses incurred in performing such services.


 


(b)  not performing
services similar to the services performed by the Participant for the Company
or any affiliate of the Company, in any capacity, for any business enterprise
which competes in a substantial degree with the Company, nor engaging in any
activity, including the solicitation of the Company’s employees, that involves
substantial competition with the Company, without the prior written consent of
the Company, during the greater of (i) the period during which the Participant
is entitled to payments hereunder, and (ii) two (2) years immediately following
the Participant’s Termination of Service.


 


3.5.                              Special Provision Upon
Change in Control.  In the event of a Change of Control, other
provisions of this Article III notwithstanding, each Participant employed by
the Company immediately prior to such Change of Control shall be eligible to
receive the full value of his Supplemental Retirement Account Balance in the
form of a single lump sum as soon as practicable following his Termination of
Service for any reason other than by the Company for Cause within the two (2)
years after the date of such Change of Control, and the requirements set forth
in Articles 3.2 and 3.4 shall not be applicable.


 


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ARTICLE IV


 


SUPPLEMENTAL RETIREMENT BENEFITS


 


4.1.                              Supplemental Retirement Account Balance.  All benefits
under this Plan shall be provided to each Participant from such Participant’s
Supplemental Retirement Account Balance as established, maintained, and
distributed by the Company in accordance with the terms of the Plan. Each
Participant’s Supplemental Account Balance shall be equal to the sum of such
Participant’s Special Account and Regular Account including Earnings thereon,
as described herein.


 


4.2.                              Special Account.   The Company shall establish for
each Participant in the Plan an individual Special Account.  The Special Account for each actively
employed Participant under the Prior Plan as of December 31, 2000, who elects
to be covered under the terms of this Plan, shall be the lump sum actuarial
equivalent of the retirement benefit accrued by such Participant under the
terms of that Prior Plan as of December 31, 2000.  Such Special Account shall be credited with
Earnings beginning January 1, 2001, and accumulated balances thereunder shall
continue to be credited with Earnings until completely distributed to the
Participant, or his Beneficiary, if applicable.


 


The
Special Account for each other Participant who was not a Participant in the
Prior Plan shall, unless the Board or the Committee determines in its sole
discretion with respect to any Participant to increase the amount of such
Special Account, be equal to the product of 5% of such Participant’s Annual
Compensation as earned over the Plan Year immediately preceding the Plan Year
in which the employee first becomes a Participant,  multiplied by the number of whole and
fractional years of Service completed by the Participant while employed by the
Company in a salary grade 17 or higher, as rendered prior to the January 1 of
the Plan Year in which the employee first becomes a Participant.  Such Special Account shall be credited with
Earnings beginning with the Plan Year in which the Special Account is first
established, and accumulated balances thereunder shall continue to be credited
with Earnings until completely distributed to the Participant, or his
Beneficiary, if applicable.


 


4.3.                              Regular Account.  The Company shall establish for
each Participant in the Plan an individual Regular Account to which the Company
shall credit an annual contribution beginning December 31, 2001 and each
subsequent December 31, thereafter, to each Participant who as of such December
31, is both a Participant in this Plan and is actively employed by the Company
or a Subsidiary. The annual contribution credited to the Regular Account of any
Participant who is in a salary grade above grade 17 as of December 31 of the
Plan Year for which the contribution is determined, shall, unless the Board or
the Committee determines in its discretion with respect to any Plan Year to
increase the amount of such contribution, be equal to 5% of such Participant’s
Annual Compensation up to such Participant’s Annual Compensation Cap, plus 15%
of such Participant’s Annual Compensation in excess of such Participant’s
Annual Compensation Cap as applicable to the Plan Year.


 


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The
annual contribution credited to the Regular Account of any Participant who is
in a salary grade 17, or below, as of December 31 of the Plan Year for which
the contribution is determined, shall, unless the Board or the Committee
determines in its discretion with respect to any Plan Year to increase the
amount of such contribution, be equal to 5% of such Participant’s Annual
Compensation up to such Participant’s Annual Compensation Cap, plus 10% of such
Participant’s Annual Compensation in excess of such Participant’s Annual
Compensation Cap as applicable to the Plan Year.  Contributions credited to the Regular Account
shall be credited with Earnings beginning with the Plan Year immediately
following its determination, and accumulated balances thereunder shall continue
to be credited with Earnings until completely distributed to the Participant,
or his Beneficiary, if applicable.


 


In
addition, the Board or the Committee may at its discretion credit to a
Participant’s Regular Account, at any time or from time to time, a special lump
sum contribution.  Such special lump sum
contributions to a Participant’s Regular Account shall be credited with
Earnings beginning with the Plan Year in which the contribution is determined,
and accumulated balances thereunder shall continue to be credited with Earnings
until completely distributed to the Participant, or his Beneficiary, if
applicable.


 


4.4.                              Determination of Regular Account Credit in Year
of Termination of Service.  If a Participant first experiences a
Termination of Service other than as of December 31 of a Plan Year and
qualifies for benefits under Article III of this Plan, he shall be eligible for
a partial contribution credit to his Regular Account. The partial credit shall
be determined as of the date of his Termination of Service by first computing
the annualized value of the Participant’s Compensation and Annual Compensation
Cap, then multiplying such amounts by the applicable contribution percentage
factors set forth in section 4.3 above, and then multiplying the resulting
amount by a prorated factor equal to the number of completed months of Service
as of the Termination of Service date divided by 12.


 


For
purposes of this section 4.4, the portion of the Participant’s Annual Compensation
considered attributable to his bonus or commission shall be his target bonus or
commission (deemed achieved at a 100% level of performance, if applicable) as
in effect as for the year during which the Termination of Service occurs .  If it is subsequently determined that his
actual bonus or commission attributable to the year of his Termination of
Service is other than such target bonus or commission amount, then the
Administrator may recalculate the partial contribution credit to his Regular Account
to reflect such difference and may adjust the remaining balance of the
Participant’s Supplemental Executive Retirement Plan Account Balance
accordingly.  Such recalculations and
adjustments shall be completed as soon as practicable following the determination
of the actual bonus or commission amounts payable, and any resulting
adjustments shall be credited with Earnings as set forth herein.


 


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4.5.                              Determination and Crediting of Earnings.  The
Earnings credited to each Participant’s Special Account and Regular Account for
each Plan Year shall be determined by the Administrator prior to the beginning
of such Plan Year and shall be communicated to each Participant.  For the Plan Year beginning January 1, 2001,
and for each subsequent Plan Year thereafter until changed by the
Administrator, the Earnings credited to each Participant’s Special Account and
Regular Account shall be at a rate of seven percent (7%) per annum; provided,
however, that the Earnings to be credited shall be reviewed on or before
December 31, 2005 and reset if the Administrator determines that it is
appropriate to do so and shall be further reviewed (and reset if appropriate)
not less frequently than every five (5) years. 
Earnings shall be credited to each Participant’s Special Account or
Regular Account from time to time during each Plan Year in which the
Participant retains an undistributed amount in his Supplemental Retirement
Account Balance.


 


4.6.                              Computation of Actuarial Equivalents.  To the
extent that actuarial calculations under this Plan are required pursuant to the
development of the Special Accounts set forth in section 4.2 above, actuarial
equivalents shall be determined on the basis of mortality tables and interest
factors that are reasonable. Such tables and factors shall be developed with
the assistance of an independent actuary selected by the Plan Administrator.


 


ARTICLE V


 


PAYMENT OF BENEFITS


 


5.1.                              Commencement of Benefit Payments.  The
payment of benefits to a Participant who becomes eligible for payments due to a
Termination of Service described in Article III of the Plan shall commence on
the January 31st or July 31st next following such Participant’s Termination of
Service.  All subsequent payments shall
be made as of the yearly anniversary date of the first payment and on each
subsequent yearly anniversary date until such time as the Participant’s
Supplemental Retirement Account Balance has been completely distributed.


 


5.2.                              Form of Benefit Payments.    (a) The Participant may elect to have his
Supplemental Retirement Account Balance distributed to him in annual
installments covering a period of 5, 10 or 15 years.  At least twelve (12) months prior to the date
that the first installment is scheduled to be made, the Participant shall elect
his installment period on forms provided by the Administrator.  In the absence of a timely election, the
distribution shall be in annual installments over a 5 year period.  Except as indicated herein, once the first
installment has been made, no further changes in the duration of the
installment period will be permitted.


 


(b)  
Notwithstanding the above, a Participant who is eligible for an initial
distribution, or has commenced his distribution but has not received all
applicable payments, may request that the Administrator distribute to him in a
single lump sum, his remaining Supplemental Retirement Account Balance.  Upon the approval of the Administrator, such
distribution requested pursuant to this Article 5.2(b) shall be made in a single
lump sum, provided that the lesser of $50,000, or ten percent (10%) of the
amount remaining in the Supplemental Retirement Account Balance as of the date
of such distribution shall be forfeited prior to the payment of the remainder
to the Participant.  Any such lump sum
payments shall be made as soon as practicable following the approval of such
distribution by the Administrator without regard to the provisions of section
5.1 herein.


 


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5.3.                              Payment of Survivor’s Benefit.  In the
event of the Participant’s death prior to the complete distribution of his
Supplemental Retirement Account Balance, distribution of any remaining amounts
shall be made to the Participant’s Beneficiary in a single lump sum as soon as
practicable following the death of the Participant and the determination of the
Beneficiary.  If no Beneficiary
designation is in effect at the time of the Participant’s death, or if the
Beneficiary is missing or has predeceased the Participant, the Survivor’s
Benefit shall be made to the personal representative of the Participant’s
estate in accordance with applicable state law.


 


5.4.                              Designation of Beneficiary. 
Immediately upon becoming a Participant , each Participant shall
designate in writing the Beneficiary who shall receive the Survivor’s Benefit
upon his death.  The Participant may
change his Beneficiary from time to time, at his discretion, by notifying the
Administrator in writing.


 


5.5.                              Payments in the Event of Disability.  In the
event that a Participant has a physical or mental disability which renders him
totally and permanently incapable of performing his duties for the Company on a
substantially full-time basis, he shall be entitled to his Supplemental
Retirement Account Balance.   The payment
of the Supplemental Retirement Account Balance shall be made in a single lump
sum as soon as practicable following the determination of the Participant’s
total and permanent disability. Such determination of disability shall be made
by the Administrator based on medical evidence deemed acceptable by the
Administrator. Such evidence may include the Participant’s qualification for
disability payments under Social Security, and/or payments under a Company
sponsored long term disability insurance program.


 


5.6.                              Valuation of Benefit Payments. 
All distributions under this Plan shall be based upon the amount
credited to the Participant’s Supplemental Retirement Account Balance as
determined as of the business day immediately preceding the date of
distribution.  In the event that the
benefit payments are in the form of annual installments, each installment shall
be determined by dividing the amount of the Supplemental Retirement Account
Balance, determined as of the business day immediately preceding the date of
such installment, by the remaining number of installments, including the
current installment, to be paid.


 


5.7                                 Investment to Facilitate Payment of Benefits.  Although
the Company is not obligated to invest any specific asset or fund, or purchase
any insurance contract in order to provide a means for the payment of any
liabilities under this Plan, the Company may elect to do so at any time, but
without any obligation to continue such investment or other payment vehicles
for any particular period of time.


 


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ARTICLE VI


 


FUNDING AND PARTICIPANT’S INTEREST


 


6.1                                 Supplemental Executive Retirement Plan Unfunded.  The Plan
shall at all times be considered entirely unfunded for both federal and state
income tax purposes and for purposes of Title I of the Employee Retirement
Income Security Act of 1974, as amended, and no trust shall be created by or
for the Plan.  The crediting to each
Participant’s Special Account or Regular Account, as the case may be, shall be
made through recordkeeping entries.  No
actual funds shall be set aside; provided, however, that nothing herein shall
prevent the Company from establishing one or more grantor trusts from which
benefits due under this Plan may be paid in certain instances.  All distributions shall be paid by the
Company from its general assets and a Participant (or his or her beneficiary)
shall have the rights of a general unsecured creditor against the Company for
any distributions due hereunder.  The
Plan constitutes a mere promise by the Company to make benefit payments in the
future.


 


6.2                                 Participant’s Interest in Plan.  A
Participant has an interest only in the total value of the amount credited to
his accounts.


 


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ARTICLE VII


 


ADMINISTRATION AND INTERPRETATION


 


7.1                                 Administration.  The Administrator shall be in
charge of the overall operation and administration of this Plan.  The Administrator to the extent appropriate
and in addition to the powers described elsewhere in this Plan, has full
discretionary authority to construe and interpret the terms and provisions of
the Plan; to perform all acts, including the delegation of its administrative
responsibilities to advisors or other persons who may or may not be employees
of the Company; and to rely upon the information or opinions of legal counsel
or experts selected to render advice with respect to the Plan, as it shall deem
advisable, with respect to the administration of the Plan.


 


7.2                                 Interpretation.  The Administrator may take
action, correct any defect, supply any omission or reconcile any inconsistency
in the Plan, or in any election hereunder, in the manner and to the extent it
shall deem necessary to carry the Plan into effect or to carry out the Company’s
purposes in adopting the Plan.  Any
decision, interpretation or other action made or taken in good faith by or at
the direction of the Company or the Administrator arising out of, or in
connection with, the Plan, shall be within the absolute discretion of each of
them, and shall be final, binding and conclusive on the Company, and all
Participants and Beneficiaries and their respective heirs, executors,
administrator, successors and assigns. 
The Administrator’s determinations hereunder need not be uniform, and
may be made selectively among eligible employees whether or not they are
similarly situated.


 


7.3                                 Records and Reports.  The
Administrator and its designees shall keep a record of proceedings and actions
and shall maintain or cause to be maintained all such books of account,
records, and other data as shall be necessary for the proper administration of
the Plan.  Such records shall contain all
relevant data pertaining to individual Participants and their rights under this
Plan.  The Administrator shall have the
duty to carry into effect all rights or benefits provided hereunder to the
extent assets of the Company are properly available.


 


7.4                                 Payment of Expenses.  The Company shall bear all expenses incurred
by the Administrator in administering this Plan.  If a claim or dispute arises concerning the
rights of a Participant or Beneficiary to amounts deferred under this Plan,
regardless of the party by whom such claim or dispute is initiated, the Company
shall, upon presentation of appropriate vouchers, pay all legal expenses,
including reasonable attorney’s fees, court costs, and ordinary and necessary
out-of-pocket costs of attorneys, billed to and payable by the Participant or
by anyone claiming under or through the Participant (such person being
hereinafter referred to as the “Participant’s Claimant”), in connection with
the bringing, prosecuting, defending, litigating, negotiating, or settling of
such claim or dispute; provided that:


 


(a) 
The Participant or the Participant’s Claimant shall repay the Company
any such expenses theretofore paid or advanced by the Company if and to the
extent that the party disputing the Participant’s rights obtains a final
judgment in its favor from a court of competent jurisdiction from which no
appeal may be taken, whether because the time to do so has expired or
otherwise, and it is determined by the court that such expenses were not
incurred by the Participant or the Participant’s Claimant while acting in good
faith; provided further, that


 


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(b)  In the case of any
claim or dispute initiated by a Participant or the Participant’s Claimant, such
claim shall be made, or notice of such dispute given, with specific reference
to the provisions of this Plan, to the Administrator within two (2) years,
(three (3) years in the event of a Change of Control) after the occurrence of
the event giving rise to such claim or dispute.


 


7.5                                 Indemnification for Liability.  The
Company shall indemnify the Administrator and the employees of the Company to whom
the Administrator delegates duties under this Plan against any and all claims,
losses, damages, expenses and liabilities arising from their responsibilities
in connection with this Plan, unless the same is determined to be due to gross
negligence or willful misconduct.


 


7.6                                 Claims Procedure.  If a
claim for benefits or for participation under this Plan is denied in whole or
in part, the claimant will receive written notification from the Company within
ninety (90) days following receipt of such claim by the Administrator.  The notification will include specific
reasons for the denial, specific reference to pertinent provisions of this
Plan, a description of any additional material or information necessary to
process the claim and why such material or information is necessary, and an
explanation of the claims review procedure.


 


7.7                                 Review Procedure.  Within
ninety (90) days after the claim is denied, a claimant (or his duly authorized
representative) may file a written request with the Administrator for a review
of his denied claim.  The claimant may
review pertinent documents that were used in processing his claim, submit
pertinent documents, and address issues and comments in writing to the
Administrator.  The Administrator will
notify the claimant of the final decision in writing within forty-five (45)
days following receipt of such written request by the Administrator.  In this response, the Administrator will
explain the reason for the decision, with specific references to pertinent Plan
provisions on which the decision was based.


 


7.8                                 Legal Claims.  In no event may a claimant commence legal
action for benefits the claimant believes are due the claimant until the
claimant has exhausted all of the remedies and procedures afforded the claimant
by this Article VII.  No such legal
action may be commenced more than two (2) years after the date of the
Administrator’s final review decision, described in Section 7.7 above.


 


7.9.                              Participant and Beneficiary Information.  Each Participant shall keep the Administrator
informed of his current address and the current address of his designated
Beneficiary or Beneficiaries.  The
Administrator shall not be obligated to search for any person.  If such person is not located within two (2)
years after the date on which payment of the Participant’s benefits payable
under this Plan may first be made, payment may be made as though the
Participant or his Beneficiary had died at the end of such two (2) year period.


 


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ARTICLE VIII


 


AMENDMENT AND TERMINATION


 


8.1                                 Amendment and Termination.  The
Company shall have the right, at any time, to amend or terminate the Plan in
whole or in part provided that such amendment or termination shall not
adversely affect the right of any Participant or Beneficiary to a payment under
the Plan on the basis of contributions and Earnings to the Participant’s
Regular Account and/or Special Account. 
The Company, upon review of the effectiveness of the Plan, may at any
time recommend amendments to, or termination of, the Plan to the
Administrator.  The Company reserves the
right, in its sole discretion, to discontinue, or completely terminate, the
Plan at any time.  If the Plan is
discontinued with respect to future credits to the Participant’s Regular Account,
the Participant’s Supplemental Retirement Account Balance shall be distributed
in accordance with the provisions of Article V, unless the Company designates
that distributions shall be made on an earlier date.  If the Company designates such earlier date,
each Participant shall receive distribution of his entire Supplemental
Retirement Account Balance as specified by the Administrator for such
event.  If the Plan is completely
terminated by the Company, each Participant shall receive distribution of his
entire Supplemental Retirement Account Balance in one lump sum cash payment as
of the date of the Plan termination as designated by the Administrator.


 


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ARTICLE IX


 


MISCELLANEOUS PROVISIONS


 


9.1                                 Right of the Company to Take Employment Actions.  The
adoption and maintenance of this Plan shall not be deemed to constitute a
contract between the Company and any Participant, nor to be a consideration
for, nor an inducement or condition of, the employment of any person.  Nothing herein contained, or any action taken
hereunder, shall be deemed to give any Participant the right to be retained in
the employee of the Company or to interfere with the right of the Company to discharge
any Participant at any time, nor shall it be deemed to give to the Company the
right to require the Participant to remain in its employ, nor shall it
interfere with the Participant’s right to terminate his or her employment at
any time.  Nothing in this Plan shall
prevent the Company from amending, modifying, or terminating any other benefit
plan.


 


9.2                                 Alienation or Assignment of Benefits.  A
Participant’s rights and interest under the Plan shall not be assigned or
transferred except as otherwise provided herein, and the Participant’s rights
to benefit payments under this Plan shall not be subject to alienation, pledge
or garnishment by or on behalf of creditors (including heirs, beneficiaries, or
dependents) of the Participant or of a Beneficiary.  Notwithstanding the preceding, the Administrator
may direct distributions pursuant to the Plan to an alternate payee pursuant to
a Qualified Domestic Relations Order (QDRO), as defined in Section 414(p) of
the Internal Revenue Code of 1986, as amended, prior to any distribution date
described in the Plan.


 


9.3                                 Right to Withhold.  To the
extent required by law in effect at the time a distribution is made from the
Plan, the Company or its agents shall have the right to withhold or deduct from
any distributions or payments any taxes required to be withheld by federal,
state or local governments.


 


9.4                                 Construction.  All legal questions pertaining
to the Plan shall be determined in accordance with the laws of the State of
North Carolina, to the extent such laws are not superseded by the Employee
Retirement Income Security Act of 1974, as amended, or any other federal law.


 


9.5                                 Headings.  The headings of the
Articles and Sections of this Plan are for reference only.  In the event of a conflict between a heading
and the contents of an Article or Section, the contents of the Article or
Section shall control.


 


9.6                                 Number and Gender.  Whenever
any words used herein are in the singular form, they shall be construed as
though they were also used in the plural form in all cases where they would so
apply, and references to the male gender shall be construed as applicable to
the female gender where applicable, and vice versa.


 


9.7                                 Severability.  If any provision of the Plan is
invalid, in whole or in part, such provision shall to that extent be severable
and shall not affect the remainder of such provision or any other provision of
the Plan.


 


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APPENDIX A


 




	
  Projected Pay Cap at 3.00%

  
	
  Year

  	
   

  	
  Pay Cap

  
	
  2001

  	
   

  	
  170,000

  
	
  2002

  	
   

  	
  180,000

  
	
  2003

  	
   

  	
  180,000

  
	
  2004

  	
   

  	
  190,000

  
	
  2005

  	
   

  	
  190,000

  
	
  2006

  	
   

  	
  200,000

  
	
  2007

  	
   

  	
  210,000

  
	
  2008

  	
   

  	
  210,000

  
	
  2009

  	
   

  	
  220,000

  
	
  2010

  	
   

  	
  230,000

  






 


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