Document:

Exhibit 10.9

 

ACUSHNET EXECUTIVE SEVERANCE PLAN
 (As Amended and Restated Effective April 29, 2016)

 

The Acushnet Executive Severance Plan (the “Plan”) is intended to provide severance benefits to certain executive employees of Acushnet Company (together with its direct parent and direct and indirect subsidiaries, the “Company”).  This Plan supersedes any other severance plan maintained by the Company for executive employees described in the “Eligibility” Section below.

 

Eligibility

 

All domestic (U.S.) full-time salaried employees of the Company in a salary grade 9 or above who are terminated under the circumstances described in paragraphs A or B below are covered by the Plan and eligible for severance benefits.  Notwithstanding the foregoing, any executive employee that has an individual severance or change in control agreement with the Company will not be eligible for benefits under this Plan.

 

A.                                    Involuntary separation from employment by the Company for any reason other than resignation, retirement, death, disability, or cause; provided the employee remains employed until the date designated by the Company as his or her termination date.  The term “cause” includes but is not limited to misconduct, negligence, dishonesty, criminal act, excessive absenteeism, and willful failure to perform job responsibilities and other conduct determined under the Company’s Code of Conduct or other policies to be “cause”.  The term “retirement” means voluntary termination of employment on or after age 55 and completion of at least 10 years of service.  The term “disability” means the employee is considered disabled for purposes of the Company’s long-term disability plan.

 

B.                                    Voluntary separation from employment if an employee’s job location has been relocated more than 35 miles from the employee’s former job location; provided that, not later than 30 days after the notification of relocation of the employee’s job, the employee shall provide notice to the Senior Vice President, Human Resources of the Company of the conditions described in this paragraph B and his or her intent to separate from service; upon receipt of such notice, the Company shall have 80 days during which it may remedy such conditions; and in the event of the Company’s failure to do so, the employee separates from service within the 90 day period following the relocation of his or her job.

 

An employee is not eligible for severance pay if (i) the employee is offered a comparable position (as reasonably determined by the Company) with the Company, an affiliate of the Company, or a successor employer as a result of a reorganization of the Company or the sale of stock or assets of the Company, and (ii) such position is located within a 35 mile radius of the employee’s former job location.  In addition, if an employee is offered and accepts another position with the Company or any affiliate of the Company prior to commencement of severance pay benefits, no severance pay will be provided.  If an employee accepts a position with the Company or any affiliate of the Company after severance pay begins, no further severance pay benefits will be provided under the Plan upon assumption of the new position.

 

 

Amount of Severance Pay — General

 

The amount of severance pay provided for terminations described in paragraphs A and B above (other than such terminations that occur within 18 months following a Change of Control) will be calculated using the following schedule:

 

	
Salary Grade
    	
 
    	
Amount of Severance
    
	
 
    	
 
    	
 
    
	
14 and above
    	
 
    	
18 months of base salary
   plus one year of bonus
    
	
 
    	
 
    	
 
    
	
9-13
    	
 
    	
12 months of base salary
   plus one year of bonus
    

 

For purposes of the above schedule, “base salary” shall be determined as of the date of the employee’s termination of employment and “bonus” shall be based on target bonus for the year of the employee’s termination (to the extent permitted by Section 409A of the Internal Revenue Code, bonus paid as part of severance benefits will be offset by any bonus amount actually paid under the terms of the Company’s annual bonus plan for the year of termination, if any, but not below zero).

 

Amount of Severance Pay — Change of Control

 

If any employee’s employment is terminated within 18 months following a Change of Control of the Company, the Amount of Severance Pay — General section regarding severance pay (above) will not apply and severance pay will be determined under this Amount of Severance Pay — Change of Control section.  After such 18-month period, this section will not apply.  “Change of Control” means a Change of Control as defined in Appendix A to the Plan.

 

A.                                    Payment of severance pay under this Section will be provided if employment terminates under the conditions described in paragraphs A or B under Eligibility above and the employee’s termination occurs within 18 months following a Change of Control.

 

B.                                    Payment of severance pay under this Section also will be provided upon voluntary separation from service if, within 18 months following the Change of Control, there is (i) a material negative change in the employee’s compensation or (ii) a material diminution in the employee’s duties, authority or responsibilities as in effect at the time of the Change of Control, and as determined under Treasury Regulation Section 1.409A-1(n)(2)(ii)(A)(3); provided that, no later than 90 days after such material negative change or material diminution, as applicable, the employee provides notice to the Company of the conditions described in this paragraph B and his or her intent to separate from service; upon receipt of such notice, the Company shall have 30 days during which the Company may remedy such conditions; and in the event of the Company’s failure to do so, the employee separates from service within the 90-day period following the occurrence of the material negative change or material diminution, as applicable (or by the end of the 30(-)day remedy period, if later).

 

 

C.                                    The amount of severance pay provided for terminations following a Change of Control will be calculated using the following schedule:

 

	
Salary Grade
    	
 
    	
Amount of Severance
    
	
 
    	
 
    	
 
    
	
14 and above
    	
 
    	
24 months of base salary
   plus one year of bonus
    
	
 
    	
 
    	
 
    
	
9-13
    	
 
    	
18 months of base salary
   plus one year of bonus
    

 

For purposes of the above schedule, “base salary” shall be determined as of the date of the employee’s termination of employment and “bonus” shall be based on the greater of (i) target bonus for the year of the employee’s termination, or (ii) the bonus that would be paid using the Company’s most recent financial performance outlook report that is available as of the employee’s termination date.  To the extent permitted by Section 409A of the Internal Revenue Code, bonus paid as part of severance benefits will be offset by any bonus amount actually paid under the terms of the Company’s annual bonus plan for the year of termination, if any, but not below zero.

 

Payment of Severance

 

Upon separation from employment, an employee shall be transferred from active to terminated employee status.  Eligible separated employees will receive payment of severance in regular pay intervals through the entire severance period.  No severance shall be paid under this Plan unless an employee first executes and does not revoke a waiver and release of claims as described below under Employee Waiver and Release within 60 days following the date of termination.  The severance payments shall be paid or commence on the first payroll period following the date the waiver and release of claims becomes effective (the “Payment Date”).  Notwithstanding the foregoing, if the 60th day following the date of termination occurs in the calendar year following the termination, then the Payment Date shall be no earlier than January 1 of such subsequent calendar year.  Each severance payment is intended to comply with or be .exempt from the requirements of Section 409A of the Internal Revenue Code and, for this purpose, each severance payment hereunder shall be considered a separate payment.  Notwithstanding the foregoing, payment of severance for “specified employees” (as described in Appendix B) will be determined in accordance with the requirements of Section 409A of the Internal Revenue Code.  The payment procedure for specified employees is described in Appendix B.

 

Payment is subject to normal payroll taxes and required withholding, and deductions for applicable medical, dental and flexible spending account coverage, and may be reduced by any amounts the employee owes the Company, subject to state laws and in compliance with Section 409A of the Internal Revenue Code.  If an employee dies after signing a separation letter along with a waiver and release of claims, but before receipt of severance pay, any remaining payments will be made in a lump sum to the employee’s estate within 90 days of the employee’s death.

 

If, following the employee’s termination of employment, the Company discovers information that, in the Company’s reasonable judgment, would have provided a basis for termination of the employee for cause (as defined in the “Eligibility” Section above), then the Company will have

 

 

no further obligations to make payments under the Plan.  In such event, the Company will have the right to recover all amounts previously paid under the Plan, as well as attorneys’ fees incurred in connection with such recovery.

 

Benefit Coverage

 

Medical, dental, employee life insurance, and healthcare flexible spending account coverage will cease on the last day of employment.  Medical, dental and healthcare flexible spending account coverage may then be continued pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) for the severance period on the same terms and conditions and at the same contribution rates that apply to employees except to the extent that state or federal law requires a lower or other contribution amount.  For severance periods in excess of 18 months, coverage may be continued for the remainder of the severance period on the same terms and conditions and at the same contribution rates that apply to employees.  If COBRA coverage is available after the severance period, such coverage will be at the standard coverage rates.  Severance payments will not be considered as pensionable earnings, and the period of time that severance payments are made will not count toward credited service and vesting service under the Company’s pension plans.  Payments under the Plan are not eligible for contributions to the Company’s 401(k)/profit sharing plans.  All other employee benefit plans terminate on the separated employee’s last day of work.

 

Notwithstanding anything to the contrary in the foregoing, the Company shall not be required to provide such benefits, may require employee to pay an amount greater than active employee rates, or may impute tax to the employee on the value of Company-provided coverage, if the Company reasonably determines that the Company or such welfare plan could be subjected to any excise tax or penalty for failure to comply with any law applicable to group health plans.

 

If during a period of severance a former employee accepts employment with a new employer, any health benefits provided under the Company’s plans will be discontinued when the former employee commences qualifying coverage under the new employer’s plans.  A former employee must notify the Human Resources Department in writing when he or she obtains coverage under a new employer’s plans.

 

Vacation

 

Employees will receive pay for all unused and accrued vacation for the year of termination as a part of their final regular pay.  Payment will be made in conformance with prevailing state laws.

 

Other Company Payments

 

Notwithstanding any provision of this Plan to the contrary and to the extent permitted under Section 409A of the Internal Revenue Code, the severance pay under this Plan shall be reduced by the severance benefits then payable to an employee under any other agreement, understanding, plan, policy, program or arrangement of the Company or a subsidiary or affiliate of the Company.

 

 

Employee Waiver and Release

 

An employee will forfeit all severance payments under this Plan if the employee fails to timely sign a separation letter along with a waiver and release of claims in the form proposed by the Company or if such waiver and release of claims is revoked within the applicable revocation period.  Employees will be required to agree to terms concerning non-solicitation.  Such terms will include, without limitation, that for a period of twelve (12) months after separation from employment, an employee will not, personally or on behalf of another party, whether directly or indirectly solicit for employment any person employed by the Company in a salaried position during the year before separation from employment.

 

Administration

 

This Plan is administered by Acushnet Company (the “Plan Administrator”).  The Plan Administrator may designate persons to carry out its responsibilities under this Plan.  The Plan Administrator reserves absolute discretionary authority to determine all matters arising in connection with the administration, interpretation and application of this Severance Plan, including all questions of coverage, facts, eligibility and methods of providing and arranging for any benefits.  Benefits will he paid under this Plan only if the Plan Administrator decides in its discretion that an individual is entitled to them.

 

Amendment and Termination

 

The statements contained in this Plan are not intended to create nor are they to be construed to constitute conditions of employment or a contract of employment between the Company and any employee.  The Company reserves the right to modify, suspend or terminate the Plan or the benefits provided at any time without prior notice to employees; provided, however, (i) no such amendment may adversely affect the rights of any employee who is then receiving benefits under the Plan and (ii) solely with respect to the provisions under “Amount of Severance Pay - Change of Control”, no amendment of such provisions will be effective until 27 months following the date a notice of such amendment is provided to employees of the Company.

 

Benefit Claim Process

 

The Company will notify eligible employees of any amounts of severance benefits payable under this Plan. If an employee does not receive severance pay benefits within 60 days of his or her date of termination, he or she may assume that the Plan Administrator has determined that such employee is not eligible for severance pay benefits. If any employee believes that he or she has been denied severance pay benefits to which he or she may be entitled, the employee or his or her representative should submit a written claim for severance pay benefits to Acushnet Company, Human Resources Department, 333 Bridge Street, Fairhaven, MA 02719-0965.

 

The Plan Administrator will notify the employee of any claim for severance pay that is denied, in whole or in part, within 90 days of the date the claim is received (unless special circumstances required additional time for processing the claim). The notice will contain:

 

·                  the specific reason(s) why the claim was denied;

 

·                  the specific Plan provision(s) on which the denial was based;

 

 

·                  a description of additional information required by the Company in order to approve the claim and the reasons why such information is needed; and

 

·                  the procedure for review of the denial.

 

Benefit Claim Appeal Process

 

If a claim is denied, the employee and/or his or her authorized representative may file a written appeal with the Senior Vice President Human Resources, Acushnet Company, 333 Bridge Street, Fairhaven, MA 02719-0965 within 60 days of the date the notice of denial is received. The employee and/or his or her authorized representative may review Plan documents and other documents that affect the claim. The request for a review should state the reason(s) why the employee feels the claim was improperly denied. Additional data, questions or comments should also be submitted.

 

The Senior Vice President Human Resources has the full discretion of the Plan Administrator in deciding claims for benefits. A decision will be rendered on the appeal within 60 days after receipt of a request for review unless special circumstances require an extension of time for review, in which case the time limit will not be later than 120 days after receipt. The decision will be in writing, will include the specific reasons for the decision and specific references to the pertinent Plan provisions on which the decision is based, will include a statement that the employee is entitled to receive upon request and free of charge reasonable access to and copies of all documents, records and other information relevant to the employee’s claim for benefits, as well as a statement of the employee’s right to bring an action under Section 502(a) of ERISA. If an employee does not receive the appeal decision by the date it is due, the employee may deem his or her appeal to have been denied.

 

The Plan Administrator will adopt procedures by which initial claims will be considered and appeals will be resolved; different procedures may be established for different claims. All procedures will be designed to afford an employee full and fair consideration of his or her claim.

 

OTHER TERMS

 

No Vesting

 

Neither the use of service time in calculating severance nor any other provision of this Plan shall be construed as giving rise to or granting any vested right to receive severance benefits.

 

Merger/Acquisition

 

For purposes of this Plan, in no event does a merger or acquisition of Acushnet Holdings Corp. or its subsidiaries by or with another company constitute termination of employment when employment continues with the merged or acquiring company.

 

GENERAL INFORMATION

 

	
Plan Sponsor and   Plan Administrator:
    	
Acushnet   Company
    
	
 
    	
333   Bridge Street
    
	
 
    	
Fairhaven,   MA 02719-0965
    
	
 
    	
 
    

 

 

	
Type of Plan:
    	
Severance   Pay Employee Welfare Benefit Plan
    

 

Funding

 

Severance pay provided under this Plan is payable solely from the general assets of the Company.

 

	
Employer   Identification Number:
    	
04-2691836
    
	
 
    	
 
    
	
Plan Number:
    	
567
    
	
 
    	
 
    
	
Plan Year:
    	
January 1   through December 31
    
	
 
    	
 
    
	
Agent for Service   of Legal Process:
    	
Acushnet   Company
    
	
 
    	
333   Bridge Street
    
	
 
    	
Fairhaven,   MA 02719-0965
    

 

YOUR RIGHTS UNDER ERISA

 

As a participant in the Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all Plan participants shall be entitled to:

 

·                  Examine, free of charge, in the Plan Administrator’s office or at other specified locations, all official documents related to the Plan such as documents filed by the Plan with the U.S. Department of Labor, such as annual reports and Plan descriptions.

 

·                  Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan and updated summary plan description. The Plan Administrator may make a reasonable charge for the copies.

 

·                  Obtain upon written request to the Plan Administrator information as to whether a particular employer or employer organization is a sponsor of the Plan and the address of any employer or employer organization that is a plan sponsor. Your beneficiaries also have a right to obtain this information upon written request to the Plan Administrator.

 

·                  Receive a written explanation of why a claim for benefits has been denied, in whole or in part, and a review and reconsideration of the claim.

 

·                  Continue health care coverage for yourself, spouse or dependent if there is a loss of coverage as a result of a qualifying event. You or your dependents may have to pay for such coverage. Review this Plan and summary plan description on the rules governing your COBRA continuation coverage rights.

 

In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. These people, called the “fiduciaries” of the Plan, have a duty to handle their responsibilities prudently and in the best interests of you, the other

 

 

Plan participants, and your beneficiaries.  No one, including the Company or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a welfare benefit or exercising your right under ERISA. However, this rule neither guarantees continued employment, nor affects the Company’s right to terminate your employment for other reasons.

 

Enforce Your Rights

 

If your claim for severance benefits is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

 

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of plan documents or the latest annual report from the Plan and do not receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court. If you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

 

Assistance with Your Questions

 

If you have any questions about your Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, NW, Washington, DC 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

 

 

APPENDIX A

 

“Change in Control” means:

 

(i) the acquisition (whether by purchase, merger, consolidation, combination or other similar transaction) by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended, and any successor thereto (the “Exchange Act”)) of more than 50% (on a fully diluted basis) of either (A) the then outstanding shares of Common Stock, taking into account as outstanding for this purpose such Common Stock issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the exercise of any similar right to acquire such Common Stock; or (B) the combined voting power of the then outstanding voting securities of Acushnet Holdings Corp., a Delaware corporation (including any successor thereto, “Acushnet Holdings”) entitled to vote generally in the election of directors; provided, however, that for purposes of this Plan, the following acquisitions shall not constitute a Change in Control: (I) any acquisition by Acushnet Holdings or any of its Subsidiaries; (II) any acquisition by any employee benefit plan sponsored or maintained by Acushnet Holdings or any of its Subsidiaries; (III) any acquisition following which the Investor Group, in the aggregate, hold, directly or indirectly, 50% or more of either (A) the then outstanding shares of Common Stock, taking into account as outstanding for this purpose such Common Stock issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the exercise of any similar right to acquire such Common Stock; or (B) the combined voting power of the then outstanding voting securities of Acushnet Holdings entitled to vote generally in the election of directors; or (IV) the Conversion Event;

 

(ii) following Acushnet Holdings’ initial public offering, during any period of twelve (12) months, individuals who, at the beginning of such period, constitute the Board of Directors of Acushnet Holdings (the “Board” and such directors, the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof, whose election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest, as such terms are used in Rule 14a-12 of Regulation 14A promulgated under the Exchange Act, with respect to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director; or

 

(iii) the sale, transfer or other disposition of all or substantially all of the assets of the Company Group (taken as a whole) to any Person that is not an Affiliate of the Company.

 

Capitalized terms used in this Appendix A shall have the following meanings:

 

 

“Affiliate” means any Person that directly or indirectly controls, is controlled by or is under common control with Acushnet Holdings.  The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting or other securities, by contract or otherwise.

 

“Common Stock” means the common stock Acushnet Holdings, par value $0.001 per share (and any stock or other securities into which such Common Stock may be converted or into which it may be exchanged).

 

“Company Group” means, collectively, Acushnet Holdings and its Subsidiaries.

 

“Conversion Event” means the conversion of the Acushnet Holdings’ redeemable convertible preferred stock, 7.5% convertible bonds and/or 7.5% bonds with warrants, issued on July 29, 2011 and January 20, 2012 in connection with the acquisition of the Acushnet Company and its Subsidiaries or any dividends paid in connection therewith.

 

“Investor Group” means, collectively, FILA Korea Ltd. and any Person controlled by or under common control with FILA Korea Ltd.

 

“Person” means any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).

 

“Subsidiary” means, with respect to any specified Person:

 

(i) any corporation, association or other business entity of which more than 50% of the total voting power of shares of such entity’s voting securities (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

 

(ii) any partnership (or any comparable foreign entity) (A) the sole general partner (or functional equivalent thereof) or the managing general partner of which is such Person or Subsidiary of such Person or (B) the only general partners (or functional equivalents thereof) of which are that Person or one or more Subsidiaries of that Person (or any combination thereof

 

 

APPENDIX B

 

“Specified employees” shall be determined in accordance with the Procedures for Determining Specified Employees under Code Section 409A, as adopted, and as amended from time to time, by Acushnet Holdings Corp. or a person or committee authorized by the Board of Directors of Acushnet Holdings Corp. for this purpose.  For “specified employees”, the following rules shall apply:

 

A.                                    To the extent an employee’s severance benefit otherwise payable in the first six months following the employee’s separation from service is equal to or less than the lesser of the amounts described in Treasury Regulations Sections 1.409A-1(b)(9)(iii)(A)(1) and (2), qualifies under the short-term deferral exception to Section 409A, or otherwise does not constitute “nonqualified deferred compensation” subject to Section 409A, such severance benefit shall be paid in regular pay intervals through the entire severance period.

 

B.                                    Any portion of the employee’s severance benefit that constitutes “nonqualified deferred compensation” subject to Section 409A shall be delayed until the first payroll date of the 7th month following the employee’s separation date.  Any delayed payments shall then be paid in a lump sum without interest.  Thereafter, the remainder of an employee’s severance benefit shall be payable in installments according to the normal payroll schedule of the Company.

 

C.                                    Each severance payment hereunder shall be considered a separate payment in accordance with Section 409A of the Internal Revenue Code.

 

D.                                    A termination of employment shall not be deemed to have occurred for purposes of any provision of this Plan providing for the payment of any amounts or benefits that constitute “nonqualified deferred compensation” under Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A, and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment,” “date of termination” or like terms shall mean or refer to “separation from service.Exhibit 10.10

 

ACUSHNET COMPANY SUPPLEMENTAL RETIREMENT PLAN

 

(As Amended and Restated Effective as of December 31, 2015)

 

Purpose

 

The Acushnet Company Supplemental Retirement Plan (the “Plan”) is an unfunded excess benefit plan maintained by Acushnet Company (herein referred to as the “Company”) for the purpose of providing deferred compensation for a select group of management or highly compensated employees as referred to in Sections 201(a)(2), 301(a)(3) and 401(a)(1) of ERISA, to induce employees of outstanding ability to join or continue in the employ of the Company and to increase their efforts for its welfare by providing them with retirement benefits to supplement the benefits payable under the Acushnet Company Pension Plan (the “Pension Plan”). The Plan is amended and restated, effective as of December 31, 2015.

 

The provisions of the Plan as set forth herein shall apply to eligible employees in the employ of the Company on and after December 31, 2015. On and after such date, employees who do not meet the 50/70 Rule no longer earn additional Plan benefits. The Plan benefits for any employee whose employment with the Company terminated shall, except as otherwise specifically provided in the Plan,  be governed in all respects by the terms of the Plan in effect as of the date of the employee’s termination of employment.

 

Section 409A of the Code shall apply to all Plan benefits payable to or on behalf of eligible employees, including benefits earned and vested prior to January 1, 2005. The rights of an employee who terminated employment with the Company or terminated Affiliated Employment before 2005 shall be determined under the terms of the Plan as in effect on the date of the employee’s termination of employment and shall not be subject to Section 409A of the Code.

 

Definitions

 

As used in this Plan, the following words shall have the following meanings:

 

“Actuarial Equivalent” or “Actuarially Equivalent” shall be determined using the actuarial assumptions applied under the Pension Plan when calculating lump sum benefits.

 

“Affiliated Employment” means employment by a corporation which, at the time of such employment, is or was an affiliate of the Company, or thereafter becomes or became an affiliate of the Company. An affiliate means any corporation or other business entity which is included in a controlled group of corporations within which the Company is also included, as provided in Section 414(b) of the Code (as modified by Section 415(h) of the Code), or which is a trade or business under common control with the Company, as provided in Section 414(c) of the Code (as modified by Section 415(h) of the Code), or which constitutes a member of an affiliated service group within which the Company is also included, as provided

 

2

 

in Section 414(m) of the Code, or which is required to be aggregated with the Company pursuant to regulations issued under Section 414(o) of the Code.

 

“Affiliated Plan” means a tax-qualified defined benefit pension plan by which an employee of the Company had been covered during Affiliated Employment.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Committee” means the Committee administering the Pension Plan.

 

“Company” means Acushnet Company, a Delaware corporation, and its successors and assigns.

 

“Disability” means a condition such that the employee is determined to be totally disabled by the Social Security Administration.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Executive Participant” means a Member who, during the current Plan Year or the prior Plan Year, was a participant in an executive incentive plan covering employees of the Company.

 

“415 Limitations” means the Pension Plan provisions adopted pursuant to Section 415 of the Code to limit annual Pension Plan benefits pursuant to Section 415(b) thereof.

 

“401(a)(17) Limitations” means the Pension Plan provisions adopted pursuant to Section 401(a)(17) of the Code to limit the annual compensation considered for purposes of computing Pension Plan benefits as required by said Section.

 

“50/70 Rule” is met by a Member if as of December 31, 2015 the Member has satisfied either of the following requirements:

 

The Member has attained age 50 years and completed at least 10 years of Service, or

 

The sum of the Member’s age plus years of Service totals 70 or more.

 

For this purpose, “Service” shall have the meaning set forth in the Pension Plan.

 

3

 

“Grantor Trust” means a trust for the benefit of an Executive Participant established pursuant to Section 6 to provide for the payment of benefits under this Plan and which is intended to result in income to the Executive Participant subject to tax for the period during which the contributions are made.

 

“Member” means (i) an employee of the Company whose benefits under the Pension Plan are limited due to the 415 Limitations or 401(a)(17) Limitations; and (ii) any other employee who met the 50/70 Rule and whose Earnings (as defined in the Pension Plan) exceed $150,000 in any Plan Year after 2015.

 

“Normal Retirement Date” shall have the meaning set forth in the Pension Plan.

 

“Pension Plan” means the Acushnet Company Pension Plan, as amended from time to time.

 

“Plan Year” means the calendar year.

 

“Retirement Date” means the later of the Member’s Separation from Service or his 50th birthday.

 

“Section 409A” means Section 409A of the Code and applicable regulations and other guidance issued under such Section.

 

“Segregated Account” means an account established with a bank or other financial institution approved by the Committee, or other form of segregated account approved by the Committee, established pursuant to Section 6 by or for the benefit of an Executive Participant to provide for the payment of benefits under this Plan.

 

“Separation from Service” means the employee’s termination of employment with the Company and the termination of all Affiliated Employment by reason of resignation, discharge, or retirement. The term “Separation from Service” shall be interpreted consistent with the requirements of Section 409A of the Code and shall be determined by substituting “at least 50 percent” for “at least 80 percent” when identifying the members of the controlled group as permitted by Treasury regulations section 1.409A-1(h)(3). For purposes of determining whether a Separation from Service has occurred, an individual’s employment relationship with the Company will be treated as continuing intact while the individual is on military leave, sick leave, or other bona fide leave of absence if the period of the leave does not exceed six months or, if longer, so long as the individual retains the right to reemployment with the Company under an applicable statute or contract.

 

“Specified Employee” means an employee identified as a specified employee pursuant to the “Procedures for Determining Specified Employees under Code Section 409A” as adopted, and as amended from time to time, by the Board of Directors of the Company, by the Committee, or by an individual authorized by said Board of Directors for this purpose.

 

4

 

“Surviving Spouse” means the surviving husband or wife of an employee of the Company. Effective as of June 26, 2013, the term “Surviving Spouse” includes, but is not limited to, a person of the same sex as the employee, provided the couple was legally married in a jurisdiction that authorizes same-sex marriage (even if the couple resides in a jurisdiction that does not recognize same-sex marriage).

 

Supplemental Retirement Benefits

 

Each Member to whom benefits are payable under the Pension Plan shall be paid a supplemental retirement benefit under this Plan as follows, with the Plan benefit of a Member who does not meet the 50/70 Rule determined under Section 3(a)(i), and the Plan benefit of a Member who meets the 50/70 Rule determined under Section 3(a)(ii).

 

The Plan benefit shall equal the difference between (A) the single life annuity benefit accrued under the Pension Plan as of December 31, 2015 and payable at the Member’s Normal Retirement Date, and (B) the single life annuity benefit, payable at the Member’s Normal Retirement Date, that would have been accrued under the Pension Plan as of December 31, 2015 if the 401(a)(17) Limitations and the 415 Limitations did not apply to the Pension Plan.

 

The Plan benefit shall equal the difference between (A) the single life annuity benefit payable under the Pension Plan at the Member’s Normal Retirement Date, and (B) the single life annuity benefit that would have been payable under the Pension Plan at the Member’s Normal Retirement Date if the 401(a)(17) Limitations and the 415 Limitations did not apply to the Pension Plan and if the Pension Plan benefit was determined without regard to changes in the benefit formula that would otherwise be effective for benefits earned after December 31, 2015.

 

Except as provided in Section 6, the supplemental retirement benefit provided by this Plan shall be paid to the Member in an Actuarially Equivalent lump sum during the 60-day period following the Member’s Retirement Date. In the case of a Specified Employee, however, no payment may be made before the end of the six-month period following the Specified Employee’s Separation from Service, except in the event of the Specified Employee’s death before the end of such period. Upon expiration of the six-month period (or the Specified Employee’s death), the Specified Employee (or his spouse or beneficiary, as applicable) will receive payment of the Specified Employee’s Plan benefit, adjusted with interest from the Specified Employee’s Retirement Date using the applicable interest rate described in Section 2(a) for the month in which the Specified Employee’s Retirement Date occurs, except that effective as of January 1, 2008 only the first segment rate determined pursuant to Section 417(e)(3)(C) of the Code shall be applicable.

 

5

 

Notwithstanding the foregoing, in the event a Member’s employment terminates due to Disability, he shall continue to accrue Plan benefits until he attains age 65 or until his earlier death or the cessation of his Disability, provided he met the 50/70 Rule. If the Member did not meet the 50/70 Rule, then Plan benefits shall cease to accrue as of December 31, 2015. Subject to Section 6, the Member’s Plan benefits shall be paid in an Actuarially Equivalent lump sum on the 60th day following the Member’s 65th birthday. In the event of the Member’s death before age 65, benefits may be payable to his Surviving Spouse or other designated beneficiary pursuant to Section 3(d).

 

In the event of a Member’s death before Plan benefits have been paid, the Plan may provide a pre-retirement death benefit to the Member’s Surviving Spouse, or other beneficiary designated or deemed designated by the Member in accordance with the Pension Plan. If a pre-retirement death benefit is payable under the Pension Plan on behalf of a Member entitled to a supplemental retirement benefit under Section 3(a), then the Member’s Surviving Spouse or beneficiary shall be paid a pre-retirement death benefit based on the supplemental retirement benefit determined under Section 3(a). Payment of a pre-retirement death benefit shall be made to the Surviving Spouse or beneficiary in the form of an Actuarially Equivalent lump sum on the 60th day following the date that would have been the Member’s Retirement Date.

 

If a Member has a Separation from Service after becoming entitled to a Plan benefit (or becomes entitled to a benefit pursuant to Section 3(c)) and is reemployed by the Company before the applicable payment date, his Plan benefit based on his prior period of employment shall be paid at the applicable payment date even if he is then employed by the Company. If a reemployed Member becomes a Plan participant again following his reemployment, his Plan benefit determined as of his subsequent Separation from Service shall be adjusted to reflect Plan benefits previously paid with respect to prior periods of employment, to avoid duplication of benefits.

 

In the event that a Member earns a right to benefits under more than one non- qualified defined benefit pension plan of the Company and its affiliates (as defined in Section 2(b)), benefits shall be determined and paid under the terms of the respective plans, except as provided below:

 

If, on or before December 31, 2008, a Member is transferred from employment with an affiliate of the Company to employment with the Company and liability for the Member’s benefits earned under the affiliate’s non-qualified defined benefit pension plan is transferred to this Plan, then all non-qualified benefits earned through December 31, 2008 shall be provided by this Plan, at the time and in the form specified in this Section 3.

 

If, after December 31, 2008, a Member is transferred from employment with an affiliate of the Company to employment with the Company and liability

 

6

 

for the Member’s benefits earned under the affiliate’s non-qualified defined benefit pension plan is also transferred to this Plan, such benefits shall be provided by this Plan, but at the time and in the form specified in the non-qualified defined benefit pension plan under which such benefits were earned.

 

No benefit shall be provided by this Plan to the extent that liability for such benefit has been transferred to another non-qualified defined benefit plan maintained by the Company or an affiliate.

 

If a benefit payable to or on behalf of a Member under the Plan is required to be offset by benefits provided under an Affiliated Plan, the amount of such offset shall be determined as of the date the sponsor of the Affiliated Plan ceases to be an affiliate (as defined in Section 2(b) but without regard to the provisions of Section 415(h) of the Code).

 

Funding

 

Except as provided in Section 6, benefits under this Plan shall be payable only from the general assets of the Company, which assets may be held in a trust or other arrangement established by the Company for such purpose; provided that, no funds shall be set aside or reserved in a trust or other such arrangement: (a) in connection with a change in the financial health of the Company or an affiliate; or (b) during any restricted period with respect to a qualified defined benefit plan maintained by the Company or an affiliate. The Committee or its delegate shall maintain records for the calculation of supplemental retirement benefits.

 

Payment of Taxes

 

If a Member has a grantor trust, as described in Section 6, and receives a contribution or payment under that Section, the employee shall also receive payment of an amount equal to the Federal Insurance Contributions Act (FICA) tax imposed on the Member as a result of receiving such award, contribution or payment, plus the additional amount of federal and state income taxes imposed on the Member as a result of the Company’s payment of the FICA tax. Payment shall be made to the Member under this Section 5 during the calendar year in which the FICA tax is imposed on the Member.

 

In the event of the Plan’s failure to satisfy Code Section 409A, payment of a Member’s benefit under this Plan may be accelerated in an amount equal to the amount required to be included in the Member’s income as a result of said failure.

 

Grantor Trusts and Segregated Accounts

 

Notwithstanding Section 4 of this Plan, the Company may provide for the establishment of Grantor Trusts and Segregated Accounts by or for the benefit of individual Executive Participants to provide for the payment of benefits under this Plan, consistent with the following provisions:

 

7

 

The Trustee of the Grantor Trusts shall be a bank or trust company approved by the Committee and established under the laws of the United States or a state within the United States and having either total assets of at least $15 billion or trust assets of at least $25 billion. Each Grantor Trust shall be established pursuant to a trust agreement having terms and provisions approved by the Company and consistent with this Section. The Grantor Trust shall be for the purpose of providing benefits under the Plan with respect to the Executive Participant, and neither the Company nor any creditors of the Company shall have any interest in the assets of the Grantor Trust. The Committee shall be the administrator of the Grantor Trust, and shall have such powers as are granted by the trust agreement.

 

Each Segregated Account shall be a savings or other type of account approved by the Committee established with a bank or trust company approved by the Committee and established under the laws of the United States or a state within the United States and having either total assets of at least $15 billion or trust assets of at least $25 billion, or other form of segregated account with such a bank or trust company or other financial institution approved by the Committee , in each case with such terms and provisions as are approved by the Committee and consistent with this Section.

 

Effective beginning with the 2009 Plan Year, the Company may from time to time make a contribution to an Executive Participant’s Grantor Trust, or Segregated Account if directed by the Executive Participant, in an amount determined by the Company, or its delegate, before the beginning of the Plan Year to which the contribution relates. Any contribution payable pursuant to this Section 6(c) shall be made during the Plan Year immediately following the end of the Plan Year to which the contribution relates. Contributions may be made under this Section 6(c) for Plan Years through the Plan Year in which the Executive Participant’s Separation from Service occurs. In the event of the Executive Participant’s Disability, however, contributions may be made with respect to the Executive Participant’s supplemental retirement benefit for Plan Years through the Plan Year in which the Executive Participant attains age 65, but only so long as his Disability continues.

 

For the 2005 through 2008 Plan Years, the Company made contributions to Executive Participants’ Grantor Trusts in an amount equal to the excess, if any, of the lesser of the amounts determined under (i) and (ii) below, over the balance of the Executive Participant’s Grantor Trust and Segregated Account, increased by any amounts previously withdrawn therefrom (with earnings credited on the withdrawn amounts as computed in accordance with Section 6(f)).

 

The “full grantor trust funding requirement,” which shall be equal to (A) the Executive Participant’s accrued supplemental retirement benefit determined under Section 3, payable as a single life annuity at the Executive Participant’s earliest possible retirement age or immediately if the Executive Participant has attained retirement age; (B) reduced by the assumed applicable federal and state income taxes, calculated using the

 

8

 

maximum individual federal tax rate and the appropriate state tax rate; (C) with the resulting amount converted to its after-tax present value using a 7.00% interest rate (adjusted to its after-tax equivalent using the assumed federal and state tax rates described in (B) above) and the mortality table used for the Pension Plan’s accrued liability valuation.

 

The “grantor trust funding limit,” which shall be equal to (A) the Executive Participant’s projected age 65 supplemental retirement benefit determined under Section 3 and payable as a single life annuity, with such benefit calculated by assuming a 3.50% annual salary increase until the Executive Participant’s age 65; (B) reduced by the assumed applicable federal and state income taxes (calculated in the same manner as described in (i)(B) above); (C) with the resulting amount first converted to the 100% joint and survivor annuity form using the applicable factor specified in the Pension Plan; then converted to its after-tax present value at age 65 in the same manner as described in (i)(C) above, and finally converted to its present value as of the end of the applicable Plan Year using a 7.00% interest rate and with no mortality assumed.

 

After an Executive Participant’s Separation from Service or death (or in the case of an Executive Participant whose employment terminated due to Disability, after the Executive Participant’s attainment of age 65 or his earlier death), the Company shall make a final contribution to the Executive Participant’s Grantor Trust, or Segregated Account if directed by the Executive Participant, in an amount determined as of the Executive Participant’s Separation from Service or death (or age 65 for an Executive Participant then entitled to benefits due to Disability) (the “determination date”), which amount, when added to the existing balance in the Executive Participant’s Grantor Trust and Segregated Account (including contributions payable under Section 6(c) or (d) above), shall be equal to (i) the present value of the after-tax equivalent of the Executive Participant’s supplemental retirement benefit under Section 3 (which present value shall be equal to the full grantor trust funding requirement determined under Section 6(d)(i) as of the applicable determination date, except that the rate specified in Section 6(f) shall be used instead of the 7.00% interest rate referenced in Section 6(d)(i)(C)); offset by (B) any amounts previously withdrawn by the Executive Participant from his Grantor Trust or Segregated Account, plus income earned thereon, calculated as provided in Section 6(f). The contribution determined under this Section 6(e) shall be paid within 60 days after the Executive Participant’s Separation from Service or death, as the case may be, or, in the case of an Executive Participant with a Disability, within 60 days after his 65th birthday or his earlier death.

 

Amounts previously withdrawn from an Executive Participant’s Grantor Trust or Segregated Account shall be adjusted by the amounts of income which would have been earned on such withdrawn amounts from the time of withdrawal until the applicable determination date, calculated by applying an earnings rate that is the after-tax equivalent of an interest rate equal to the average monthly yield on

 

9

 

ten-year coupon U.S. Treasury bonds (as published by the Federal Reserve) for the month of termination of service and the prior five months.

 

Notwithstanding any Plan provision to the contrary, in the event of a contribution payable on behalf of a Specified Employee due to his Separation from Service, the contribution shall not be paid before the date that is six months after the Specified Employee’s Separation from Service, except in the event of the Specified Employee’s death before the end of such period. Any payment that is delayed pursuant to the foregoing shall be adjusted with interest at the rate specified in Section 6(f).

 

Supplemental retirement benefit amounts invested in a Grantor Trust shall be invested solely in the Northern Trust Institutional Funds Intermediate Bond Portfolio to the extent practicable and otherwise in the Northern Trust Institutional Funds Diversified Assets Portfolio. As soon as practicable after the Executive Participant’s 60th birthday, one-half of the amounts held in the Northern Trust Institutional Funds Intermediate Bond Portfolio, and as soon as practicable after the Executive Participant’s 63rd birthday, the remainder of the amounts held in the Northern Trust Institutional Funds Intermediate Bond Portfolio, shall be invested solely in the Northern Trust Institutional Funds Diversified Asset Portfolio, provided that amounts shall not be transferred from the Northern Trust Institutional Funds Intermediate Bond Portfolio to the Northern Trust Institutional Funds Diversified Asset Portfolio after the Executive Participant’s 60th birthday or the Executive Participant’s 63rd birthday if the amount held in the Northern Trust Institutional Funds Intermediate Bond Portfolio is in a “loss position.” The amount held in the Northern Trust Institutional Funds Intermediate Bond Portfolio shall be in a “loss position” on the Executive Participant’s 60th birthday if the current market value thereof at the Executive Participant’s 60th birthday is less than 95% of the actuarial present value of the Executive Participant’s supplemental retirement benefit calculated as of the end of the prior calendar year. The amount held in the Northern Trust Institutional Funds Intermediate Bond Portfolio shall be in a “loss position” on the Executive Participant’s 63rd birthday if the current market value thereof at the Executive Participant’s 63rd birthday is less than 50% of 95% of the actuarial present value of the Executive Participant’s supplemental retirement benefit calculated as of the end of the prior calendar year. The Committee shall notify the Trustee promptly after the end of each calendar year of the actuarial present value of the Executive Participant’s supplemental retirement benefit. In the event that transfers cannot be made as soon as practicable after the Executive Participant’s 60th or 63rd birthday because the amount of the Northern Trust Institutional Funds Intermediate Bond Portfolio is then in a “loss position,” the amounts shall be transferred as soon as practicable after the amount of the Northern Trust Institutional Funds Intermediate Bond Portfolio is no longer in a “loss position.” Supplemental retirement benefit amounts invested in a Segregated Account shall be invested solely in the Northern Trust Institutional Funds Diversified Asset Portfolio.

 

10

 

The Executive Participant may designate a beneficiary to receive amounts held in his Grantor Trust in the event of his death. The designation shall be made in a writing filed with the Committee or its delegate on a form approved by it and signed by the Executive Participant. The Committee or its delegate shall notify the Trustee as to any such designation or changes therein. Section 3(d) shall not apply to amounts in the Executive Participant’s Grantor Trust or Segregated Account.

 

The Company shall make payments to the Executive Participant (or his beneficiary), in the amount and at the time set forth below in this Section 6(j), of amounts intended to compensate the Executive Participant (or his beneficiary) for additional federal and state taxes on income resulting from the inclusion in the Executive Participant’s or beneficiary’s taxable income of:

 

Contributions to the Executive Participant’s Grantor Trust and Segregated Account (including amounts payable directly to the Executive Participant or his beneficiary pursuant to Section 6(m)); and

 

The income of the Grantor Trust and Segregated Account for periods prior to the Executive Participant’s termination of employment.

 

Amounts payable to an Executive Participant (or his beneficiary) under this Section 6(j) shall be determined using the assumed applicable federal and state income tax rates specified in Section 6(d)(i)(B). Payments shall be made on or before the last day of the taxable year in which the respective amounts described above are includible in the individual’s income.

 

An Executive Participant may elect to transfer all or any portion of the funds in his Grantor Trust to his Segregated Account, or to transfer all or any portion of the funds in his Segregated Account to his Grantor Trust, upon written notice of not less than 60 days to the Committee and the Trustee and the financial institution with which the Segregated Account is established.

 

An Executive Participant may withdraw all or any portion of the funds in his Grantor Trust or Segregated Account at any time upon not less than 60 days’ written notice to the Committee and to the Trustee, or the financial institution with which the Segregated Account is established, as the case may be.

 

The Grantor Trust shall terminate upon the expiration of 60 days following the termination of employment of the Executive Participant, unless continued by agreement between the Executive Participant and the Trustee. In the event that the Executive Participant’s Grantor Trust is terminated before all required payments have been made to the Grantor Trust under this Section 6, any remaining payments shall be made directly to the Executive Participant or his Surviving Spouse, estate or other beneficiary, as applicable, at the time specified under this Section 6.

 

Upon the making of all payments required by this Section 6, the Committee and the Company shall have no further liability for benefits otherwise payable under

 

11

 

Section 3 to the Executive Participant or his Surviving Spouse, estate or other beneficiaries.

 

The provisions of this Section 6 shall supersede the provisions of any other Section of this Plan to the extent such other provisions might be considered to conflict with the provisions of this Section 6.

 

Administration

 

This Plan shall be administered by the Committee or its delegate. The Committee or its delegate shall have the sole discretionary authority to make such rules and regulations, to find facts, and to take such actions, as may be necessary to carry out the provisions of the Plan. The Committee or its delegate shall have sole discretionary authority to decide any questions arising in the administration, interpretation and application of the Plan (including remedy of inconsistencies or omissions in the Plan), which decisions shall be conclusive and binding on all persons. Any claim for supplemental retirement benefits under the Plan shall be handled by the Committee or its delegate, pursuant to the claims procedures applicable under the Pension Plan, and such procedures are incorporated herein by this reference. No action at law or in equity shall be brought to recover benefits under the Plan until the Member has exercised all appeal rights and the Plan benefits requested in such appeal have been denied in whole or in part. Benefits under the Plan shall be paid only if the Committee or its delegate, in its discretion, determines that a claimant is entitled to them.

 

If any judicial proceeding is undertaken to appeal the denial of a claim or bring any other action under ERISA other than a breach of fiduciary duty claim, the evidence presented will be strictly limited to the evidence timely presented to the Committee or its delegate. In addition, any such judicial proceeding must be filed within 90 days after the final decision of the Committee or its delegate.

 

Amendment and Termination

 

The Plan may be amended or terminated by the Board of Directors of the Company at any time; provided, however, that no such amendment or termination shall deprive any Member of supplemental retirement benefits accrued to the date of such amendment or termination. Any amendment or termination of the Plan shall comply with the restrictions of Section 409A. Specifically, no amendment or termination of the Plan may accelerate a scheduled payment unless permitted by Treasury regulations section 1.409A-3(j)(4), nor may any amendment permit a subsequent deferral unless such amendment complies with the requirements of Treasury regulations section 1.409A-2(b).

 

Nonassignability

 

Subject to Section 6, no Member shall have the right to assign, pledge or otherwise dispose of any benefits payable to him under the Plan nor shall any benefit under the Plan be subject to garnishment, attachment, transfer by operation of law, or any legal process. This Section shall also apply to the creation, assignment or recognition of a right to any benefit payable pursuant to a domestic relations order, unless such order meets the requirements of Section 414(p)(1)(B) of the Code as determined by the Committee or its delegate.

 

12

 

IN WITNESS WHEREOF, the Company has caused this restated document to be executed this 30th day of December, 2015.

 

	
 
    	
ACUSHNET   COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Dennis D. Doherty
    
	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
SR Vice   President, Human Resources

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00259-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00259-of-00352.parquet"}]]