Document:

exv10w1

 

Exhibit 10.1

 

 

 

AMETEK, INC.

2004 EXECUTIVE DEATH BENEFIT PLAN

 

Effective January 1, 2004

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	Article 1. Purpose and Effective Date	 	 	1	 
	1.01.

	 	Purpose
	 	 	1	 
	1.02.

	 	Effective Date
	 	 	1	 
	 
	 	 	 	 	 	 
	Article 2. Definitions and Construction	 	 	2	 
	2.01.

	 	Definitions
	 	 	2	 
	2.02.

	 	Construction
	 	 	5	 
	 
	 	 	 	 	 	 
	Article 3. Eligibility and Participation	 	 	6	 
	3.01.

	 	Eligibility and Participation
	 	 	6	 
	3.02.

	 	Change in Employment Status
	 	 	6	 
	 
	 	 	 	 	 	 
	Article 4. Retirement Benefit	 	 	7	 
	4.01.

	 	Nature of Benefit
	 	 	7	 
	4.02.

	 	Accounts
	 	 	7	 
	4.03.

	 	Timing of Credits; Withholding
	 	 	9	 
	4.04.

	 	Vesting of Accounts
	 	 	9	 
	4.05.

	 	Forfeiture
	 	 	9	 
	4.06.

	 	Statement of Accounts
	 	 	9	 
	 
	 	 	 	 	 	 
	Article 5. Death Benefit	 	 	10	 
	5.01.

	 	Nature of Benefit
	 	 	10	 
	5.02.

	 	Benefit Amounts
	 	 	10	 
	5.03

	 	Vesting of Death Benefit
	 	 	10	 
	 
	 	 	 	 	 	 
	Article 6. Payment of Plan Benefits	 	 	11	 
	6.01.

	 	Timing of Benefit Payments
	 	 	11	 
	6.02.

	 	Form of Payment
	 	 	11	 
	6.03.

	 	Withholding
	 	 	12	 
	6.04.

	 	Payment to Guardian
	 	 	12	 
	6.05.

	 	Effect of Payment
	 	 	13	 
	 
	 	 	 	 	 	 
	Article 7. Beneficiary Designation	 	 	14	 
	7.01.

	 	Beneficiary Designation
	 	 	14	 
	7.02.

	 	Changing Beneficiary
	 	 	14	 
	7.03.

	 	No Beneficiary Designation
	 	 	14	 
	7.04.

	 	Effect of Payment	 	 	14	 
	 
	 	 	 	 	 	 
	Article 8. Administration	 	 	15	 
	8.01.

	 	Committee; Duties
	 	 	15	 

			
	 	 	 
	AMETEK, Inc. 2004 Executive Death Benefit Plan
	 	Table of Contents

 

 

	 	 	 	 	 	 	 
	8.02.

	 	Agents
	 	 	15	 
	8.03.

	 	Binding Effect of Decisions
	 	 	15	 
	8.04.

	 	Indemnity of Committee
	 	 	15	 
	8.05.

	 	Election of Committee After Change in Control
	 	 	15	 
	 
	 	 	 	 	 	 
	Article 9. Claims Procedure	 	 	16	 
	9.01.

	 	Claim
	 	 	16	 
	9.02.

	 	Denial of Claim
	 	 	16	 
	9.03.

	 	Review of Claim
	 	 	16	 
	9.04.

	 	Final Decision
	 	 	16	 
	9.05.

	 	Claims for Disability Benefits
	 	 	17	 
	 
	 	 	 	 	 	 
	Article 10. Amendment and Termination of Plan	 	 	18	 
	10.01.

	 	Amendment
	 	 	18	 
	10.02.

	 	Company’s Right to Terminate
	 	 	18	 
	 
	 	 	 	 	 	 
	Article 11. Miscellaneous	 	 	19	 
	11.01.

	 	Hypothetical Accounts
	 	 	19	 
	11.02.

	 	Company Obligation
	 	 	19	 
	11.03.

	 	Trust Fund
	 	 	19	 
	11.04.

	 	Nonassignability
	 	 	19	 
	11.05.

	 	Note Contract of Employment
	 	 	20	 
	11.06.

	 	Protective Provisions
	 	 	20	 
	11.07.

	 	Governing Law
	 	 	20	 
	11.08.

	 	Sever ability
	 	 	20	 
	11.09.

	 	Notice
	 	 	20	 
	11.10.

	 	Successors
	 	 	20	 

			
	 	 	 
	AMETEK, Inc. 2004 Executive Death Benefit Plan
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ARTICLE 1. PURPOSE AND EFFECTIVE DATE

	1.01.	 	Purpose.
	 
	 	 	This AMETEK, Inc., 2004 Executive Death Benefit Plan (the “Plan”) is intended to provide an
additional benefit to a select group of management and highly compensated employees of
AMETEK, Inc., and certain of its subsidiaries, either in the form of a Retirement Benefit
(as set forth in Article 4) or in the form of a Death Benefit (as set forth in Article 5),
but not both. If a Participant retires from the Company after attaining early or normal
retirement eligibility, he will receive a Retirement Benefit equal to the value of an
Account maintained for the Participant under the Plan. In contrast, if a Participant dies
while actively employed by the Company and otherwise eligible to participate in the Plan
(or after suffering a disability but before attaining eligibility for normal retirement),
his Beneficiary(les) will receive a Death Benefit in the form of fixed monthly installment
payments until the month during which the Participant would have attained age 80.
	 
	 	 	The Retirement Benefit and the Death Benefit are mutually exclusive: no Death Benefit will
be paid on behalf of a Participant who receives a Retirement Benefit, and no Retirement
Benefit will be paid on behalf of a Participant if a Death Benefit is paid on that
Participant’s behalf. A Participant who terminates employment (not on account of his death)
before attaining early or normal retirement eligibility will not receive any benefit under
the Plan and no Plan benefit will be paid on his behalf, unless the Participant is
involuntarily terminated without Cause within two years following a Change in Control of
the Company.
	 
	1.02.	 	Effective Date.
	 
	 	 	The Plan is effective as of January 1, 2004. Because no benefits under the Plan were vested
as of December 31, 2004, all benefits under the Plan are subject to section 409A of the
Code.

			
	 	 	 
	AMETEK, Inc. 2004 Executive Death Benefit Plan
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ARTICLE 2. DEFINITIONS AND CONSTRUCTION

	2.01.	 	Definitions.
	 
	 	 	For the purpose of this Plan, the following terms shall have the meanings set forth below,
unless the context clearly indicates otherwise:

	 	(a)	 	Account. “Account” means the hypothetical account maintained on the
books of the Company, used solely to calculate the Retirement Benefit payable to each
Participant under this Plan, as set forth in Section 4.02.
	 
	 	(b)	 	Actuarially Equivalent. “Actuarially Equivalent” means an equivalence
in value between two (2) or more forms and/or times of payment based on sound actuarial
assumptions as of the time of such determination as determined by the Plan
administrator.
	 
	 	(c)	 	Article. “Article” means an article of this Plan.
	 
	 	(d)	 	Beneficiary. “Beneficiary” means the person, persons or entity
as designated by the Participant, entitled under Article 7 to receive any Plan
benefits payable after the Participant’s death.
	 
	 	(e)	 	Board. “Board” means the Board of Directors of AMETEK, Inc.
	 
	 	(f)	 	Cause. “Cause” means (1) misappropriation of funds, (2) habitual
insobriety or substance abuse, (3) conviction of a crime involving moral turpitude, or (4) gross
negligence in the performance of duties, which gross negligence has had a
material adverse effect on the business, operations, assets, properties, or
financial condition of the Company.
	 
	 	(g)	 	Change In Control. A “Change in Control” shall occur if:

	 	(1)	 	Any one person, or group of owners of another corporation who acting
together through a merger, consolidation, purchase, acquisition of stock or
the like (a “group”), acquires ownership of stock of the Company (or a
majority-controlled subsidiary of the Company) that, together with the stock
held by such person or group, constitutes more than 50 percent of the total
fair market value or total voting power of the stock of the Company. However,
if such person or group is considered to own more than 50 percent of the
total fair market value or total voting power of the stock of the
corporation before this transfer of the Company’s stock, the acquisition of
additional stock by the same person or person shall not be considered to
cause a Change in Control of the Company; or

			
	 	 	 
	AMETEK, Inc. 2004 Executive Death Benefit Plan
	 	Page 2

 

 

	 	(2)	 	Any one person or group (as described in Section 2.01 (g)(1),
above) acquires (or has acquired during the 12-month period ending on the date of
the most recent acquisition by such person or persons) ownership of stock
of the Company (or a majority-owned subsidiary of the Company)
possessing 35 percent or more of the total voting power of the stock of the
Company where such person or group is not merely acquiring additional
control of the Company; or
	 
	 	(3)	 	A majority of members of the Company’s Board (other than the
Board of a majority-controlled subsidiary of the Company) is replaced during any 12-month period by directors whose appointment or election is not endorsed
by a majority of the members of the Company’s Board prior to the date of
the appointment or election; or
	 
	 	(4)	 	Any one person or group (as described in 2.01(g)(1), above)
acquires (or has acquired during the 12-month period ending on the date of the most
recent acquisition by such person or group) assets from the Company (or a
majority-controlled subsidiary of the Company) that have a total gross fair
market value equal to or more than 40 percent of the total fair market value
of all assets of the Company immediately prior to such acquisition or
acquisitions. For this purpose, gross fair market value means the value of
the assets of the Company, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets. A
transfer of assets by the Company will not result in a Change in Control
under this Section 2.01(g)(4), if the assets are transferred to:

	 	(A)	 	A shareholder of the Company (immediately
before the asset transfer) in exchange for or with respect to its stock;
	 
	 	(B)	 	An entity, 50 percent or more of the total value
or voting power of which is owned, directly or indirectly, by the Company immediately
after the transfer of assets;
	 
	 	(C)	 	A person, or more than one person acting as a
group (as described in 2.01(g)(1), above), that owns, directly or indirectly, 50 percent
or more of the total value or voting power of all the outstanding stock of the Company; or
	 
	 	(D)	 	An entity, at least 50 percent of the total value
or voting power of which is owned directly or indirectly, by a person described in
Section 2.01(g)(4)(C), above.

	 	 	 	The term “Change on Control” is intended to comply with section 409A of the Code and
shall be interpreted such that a Change in Control (1) shall occur for purposes of
the Plan in any circumstance that would constitute a “Change in Control Event”
(within the meaning of Q&A 11 of Notice 2005-1, issued by the Treasury Department
and the Internal Revenue Service on January 5, 2005) and (2) shall not occur for
purposes of the Plan in any circumstance that would not constitute such a Change in
Control Event

			
	 	 	 
	AMETEK, Inc. 2004 Executive Death Benefit Plan
	 	Page 3

 

 

	 	(h)	 	Code. “Code” means the Internal Revenue Code of 1986, as amended.
	 
	 	(i)	 	Committee. “Committee” means the Committee appointed by the
Board (or its delegee) to administer the Plan pursuant to Article 8.
	 
	 	(j)	 	Company. “Company” means AMETEK, Inc., a Delaware corporation,
and any directly or indirectly affiliated subsidiary corporations, any other affiliate
designated by the Board, or any successor to the business thereof.
	 
	 	(k)	 	Death Benefit. “Death Benefit” means the monthly installment
payments made on behalf of a Participant who dies while actively employed by the
Company in a position that enables him to be eligible to participate in the Plan, as
described in Article 5.
	 
	 	(l)	 	Determination Date. “Determination Date” means the last
business day of each Plan Year.
	 
	 	(m)	 	Disability. “Disability” means a medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months that (1) renders a Participant
unable to engage in any substantial gainful activity or (2) results in a Participant
receiving income replacement benefits for a period of not less than three (3) months
under an accident and health plan covering employees of the Company. The term
“Disability” is intended to comply with section 409A(a)(2)(C) of the Code and shall
be interpreted to permit a Participant to take a distribution in any circumstance
that would be permitted under section 409A(a)(2)(C) of the Code. The Committee shall
determine the existence of Disability, in its sole discretion, and may rely on
advice from a medical examiner satisfactory to the Committee in making the
determination.
	 
	 	(n)	 	Early Retirement. “Early Retirement” means the termination of
employment with the Company by the Participant after attaining age fifty-five (55) with
at least five (5) Years of Service.
	 
	 	(o)	 	ERISA. “ERISA” means the Employee Retirement Income Security Act
of 1974, as amended.
	 
	 	(p)	 	Life Insurance Policies. “Life Insurance Policies” means the life insurance
policies identified on Exhibit A of the Plan. Such Life Insurance Policies shall be
owned by and payable to the Company; the Participants shall have no rights or
interest in the Policies or any benefits therefrom (even if a Policy is payable
upon the death of the Participant) The Life insurance Policies shall be used solely
as method to measure the Retirement Benefits, if any, payable under this Plan, and
the Participants shall have no greater interest in any benefit under this Plan than
that of an unsecured creditor of the Company.
	 
	 	(q)	 	Limited Participant. “Limited Participant” means a Participant
whose benefits under the Plan are limited pursuant to Section 3.02 after the Committee

			
	 	 	 
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	 	Page 4

 

 

	 	 	 	determines that the Participant’s employment position is no longer at a
level that warrants full participation in the Plan.
	 
	 	(r)	 	Normal Retirement. “Normal Retirement” means the termination of
employment with the Company of the Participant on or after attaining age sixty-five
(65), or as otherwise determined by the Board in its sole discretion.
	 
	 	(s)	 	Participant. “Participant” means any employee who is eligible
and has become a participant pursuant to Section 3.01. Such employee shall remain a
Participant in this Plan until such time as all benefits payable under this Plan have
been paid in accordance with the provisions hereof.
	 
	 	(t)	 	Plan. “Plan” means this AMETEK, Inc., 2004 Executive Death Benefit
Plan, as it may be amended from time to time.
	 
	 	(u)	 	Retirement Benefit. “Retirement
Benefit” means the account-based benefit payable to a Participant at Early Retirement or Normal Retirement, as described in
Article 4.
	 
	 	(v)	 	Section. “Section” means a section of this Plan.
	 
	 	(w)	 	Year of Service. “Year of Service” means the performance of
services with the Company for a period of twelve full, consecutive months commencing on
the Participant’s hire date. No partial year of service or employment shall be counted.

	2.02.	 	Construction.
	 
	 	 	For purposes of the Plan, unless the contrary is clearly indicated by the context.

	 	(a)	 	the use of the masculine gender shall also include within its meaning the
feminine and vice versa.
	 
	 	(b)	 	the use of the singular shall also include within its meaning the plural and
vice versa, and
	 
	 	(c)	 	the word “include” shall mean to include without limitation.

			
	 	 	 
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ARTICLE 3. ELIGIBILITY AND PARTICIPATION

	3.01.	 	Eligibility and Participation.
	 
	 	 	Eligibility to participate in the Plan shall be limited to that select group of
management and/or highly compensated employees of the Company whom the Committee designated
as eligible to participate in the Plan as of January 1, 2004. Eligibility and participation
shall be frozen to new participants after that date.
	 
	3.02.	 	Change in Employment Status.
	 
	 	 	If the Committee determines that a Participant’s position is no longer at a level
that warrants reward through participation in this Plan, but does not terminate the
Participant’s employment with Company, the Participant shall become a Limited Participant
whose benefits under this Plan shall be limited to the Account balance as of the date so
specified by the Committee, which shall be adjusted each subsequent year that the
Participant remains an active employee of the Company (and does not again become employed in
a position that warrants full participation in the Plan) by the lesser of (a) the amount of
the Annual Allocation that the Participant would have received had he remained in his former
position or (b) the interest that the Participant would have received had he terminated his
employment.
	 
	 	 	If the Committee determines that a Participant’s position has risen to a level that warrants
additional reward under the Plan, the Committee may, in its sole discretion, adjust the
Participant’s benefits under this Plan pursuant to Section 4.02(a)(1) by increasing the
Participant’s Percentage Allocation for that Plan Year and each subsequent year.
	 
	 	 	If the Committee, in its sole discretion, determines that the Participant no longer
qualifies as a member of a select group of management or highly compensated employees, as
determined in accordance with ERISA, the Committee may, in its sole discretion, take such
action as it deems necessary to preserve the status of the Plan as a “top hat” plan under
ERISA.

			
	 	 	 
	AMETEK, Inc. 2004 Executive Death Benefit Plan
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ARTICLE 4. RETIREMENT BENEFIT

	4.01.	 	Nature of Benefit.
	 
	 	 	A Participant’s Retirement Benefit under the Plan shall be equal to the value of an Account
that shall be maintained for his benefit on the Company’s records. A Participant’s Account
shall be only hypothetical in nature, and nothing in this Plan shall be construed to grant
any rights or interests in any asset of the Company, including the Life Insurance Policies,
to any Participant. The Life Insurance Policies (even if payable on the death of the
Participant) are used solely as a method to measure the Annual Allocations to be added to
Participants’ accounts. The Participants shall at all times remain general, unsecured
creditors of the Company with respect to the benefits payable under this Plan.
	 
	 	 	The Retirement Benefit under the Plan is mutually exclusive with the Death Benefit under the
Plan (which is described in Article 5). No Retirement Benefit shall be paid to or on behalf
of any Participant if a Death Benefit has been or will be paid on behalf of such
Participant.
	 
	4.02.	 	Accounts.
	 
	 	 	The Company shall maintain a hypothetical account on behalf of each Participant in the
Plan. The opening balance in each Participant’s Account shall be zero dollars, and the
balance in each Participant’s Account shall increase or decrease
each year as follows—

	 	(a)	 	Annual Allocations. Each Participant shall receive an Annual Allocation on
each Determination Date on which the Participant is either (1) actively employed by the
Company and otherwise eligible to participate in the Plan, (2) an inactive employee of
the Company by reason of a Disability and not yet eligible for Normal Retirement, or
(3) a former employee who terminated service with the Company under the Early or Normal
Retirement provisions and has not yet had payments commence under this Plan. As
provided in Section 3.02, if the Participant is actively employed by the company but is
not otherwise eligible to participate in the Plan, the Participant shall
receive an Annual Allocation only if the amount of the Participant’s Annual Allocation
is less than the amount of interest he could receive pursuant to Section 4.02(b).
	 
	 	 	 	The amount of the Annual Allocation for each Participant entitled to receive an
Annual Allocation shall be the product of the Participant’s Percentage Allocation
and the Aggregate Policy Gain for the Plan Year that ends on the applicable
Determination Date For this purpose—

	 	(1)	 	A Participant’s “Percentage Allocation” means the percentage
identified for such Participant at the time he commences participation in the
Plan. Once a Participant’s Percentage Allocation is established, it shall not be
changed unless the Participant is notified in writing that his Percentage
Allocation is being changed because—

	 	(A)	 	the Participant’s employment responsibilities have changed such that an adjustment of the
Participant’s Percentage Allocation is warranted to reflect the
Participant’s new level of responsibilities; or

			
	 	 	 
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	 	Page 7

 

 

	 	(B)	 	the number of Participants in the Plan or the Life Insurance
Policies listed on Exhibit A have changed or are about to change in such a
manner that it is necessary to modify the Participant’s Percentage
Allocation in order to maintain his level of benefits.

	 	 	 	If an individual ceases to be a Participant in the Plan (by reason of termination
of employment, death, or otherwise), his Percentage Allocation for all years after
he ceases to be a Participant shall revert to the Company and shall not be
reallocated among some or all of the remaining Plan Participants unless the
Committee determinates that a reallocation is appropriate.
	 
	 	(2)	 	The “Aggregate Policy Gain” for any given Plan Year
means the sum of—

	 	(A)	 	the annual gains or losses on all of the Life Insurance
Policies listed on Exhibit A determined as of the most recent policy anniversary
date of each of the Life Insurance Policies in accordance with FASB
Technical Bulletin 85-4, and
	 
	 	(B)	 	any death benefits received by the Company from the
Policies during the Plan Year, which are in excess of the sum of (1) and (2),
minus (3) where:

	 	(1)	 	the greater of the premiums paid or the cash value of
the Life Insurance Policy related to the deceased Participant as
of the most recent Determination Date;
	 
	 	(2)	 	the present value of the benefits to be
received under this Plan by the deceased Participant’s beneficiaries, as
determined by the Committee in its sole discretion; and,
	 
	 	(3)	 	the Account balance of the deceased Participant as of the
most recent Determination Date.

	 	 	 	(By way of example: if the anniversary date of a Life Insurance Policy is December
28th, the gain/loss on the policy will be determined as of each December 27th; the
amount of that gain/loss shall be added to the gain/loss of all other listed
policies to determine the Aggregate Policy Gain on December 31st, the end of the
Plan Year. Such amount will then be used to determine the Annual Allocation as of
December 31st. If, in that same year, a death benefit of $500,000 has been paid to
the Company as a result of the death of an insured Participant, the cash value on
that Participant’s policy as of the most recent Determination Date was $100,000,
the Participant’s Account balance at that time was $50,000, and the Committee
determines that, under the terms of this Plan, the beneficiaries of that
Participant are entitled to a benefit of $300,000 on a present value basis, then
$150,000 shall be included in the Aggregate Policy Gain.)

	 	(b)	 	Interest. Each Participant shall receive interest on each Determination Date on

			
	 	 	 
	AMETEK, Inc. 2004 Executive Death Benefit Plan
	 	Page 8

 

 

	 	 	 	which he does not receive an Annual Allocation. The amount of interest for each
such Participant shall be the product of the Participant’s Account balance on
the applicable Determination Date and the interest rate in effect under
section 417(e) of the Code on such Determination Date.
	 
	 	(c)	 	Distributions. Each Account shall be reduced by the
amount of each benefit payment made from that Account since the prior
Determination Date.

	4.03.	 	Timing of Credits; Withholding.
	 
	 	 	Any Annual Allocations, interest, and distributions shall be credited to (or debited
from) the appropriate Account at the time and as provided by the
Committee. Any
withholding of taxes or other amounts that is, in the discretion of the Committee,
required by local, state or federal law shall be withheld from compensation otherwise
payable to the Participant to the maximum extent possible, and any remaining amount
shall reduce the amount credited to the Participant’s Account in a manner specified
by the Committee.
	 
	4.04.	 	Vesting of Accounts.
	 
	 	 	Each Participant shall become 100% vested in his Account upon the earliest to occur
of the following—

	 	(a)	 	retiring from the Company pursuant to either an Early
Retirement or a Normal Retirement;
	 
	 	(b)	 	dying while actively employed by the Company as a Limited Participant; or
	 
	 	(c)	 	incurring an involuntary termination of employment from the
Company for any reason other than for Cause within two (2) years
following a Change in Control.

	 	 	A Participant whose employment terminates for any reason before he has become 100%
vested in his Account in accordance with this Section 4.04 (Including the
Participant’s death while actively employed by the Company or while disabled and not
yet eligible for Normal Retirement) shall forfeit his entire interest in his Account.
If a Participant dies while actively employed by the Company, he shall receive a
Death Benefit pursuant to Article 5; however, if the Participant dies while actively
employed by the Company as a Limited Participant, he shall receive a Retirement
Benefit pursuant to Section 3.02.
	 
	4.05.	 	Forfeiture.
	 
	 	 	The Committee may cause a forfeiture with respect to all or any portion of the
Participant’s Retirement Benefit (whether or not vested) if the Committee determines
that the Participant has been terminated for Cause.
	 
	4.06.	 	Statement of Accounts.
	 
	 	 	The Committee shall give to each Participant a statement showing the
balance in the Participant’s Account on an annual basis.

			
	 	 	 
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ARTICLE 5. DEATH BENEFIT

	5.01.	 	Nature of Benefit.
	 
	 	 	A Participant’s Death Benefit under the Plan shall be a series of equal monthly
installment payments that are payable if the Participant dies (a) while actively employed by
the Company if the Participant is not a Limited Participant or (b) before reaching
eligibility for Normal Retirement if the Participant has a Disability. A Participant’s right
to a Death Benefit shall not be construed to grant any rights or interests in any asset of
the Company, including the Life Insurance Policies, to any Participant. The Life Insurance
Policies (even if payable on the Participant’s death) are used solely as a method to measure
the Annual Allocations to be added to Participants’ Accounts for purposes of valuing their
Retirement Benefits and have no relationship with the Death Benefit provided under the Plan.
The Participants shall at all times remain general, unsecured creditors of the Company with
respect to the benefits payable under this Plan.
	 
	 	 	The Death Benefit under the Plan is mutually exclusive with the Retirement Benefit under the
Plan (as described in Article 4). No Death Benefit shall be paid on behalf of any
Participant if a Retirement Benefit has been or will be paid to or on behalf of such
Participant.
	 
	5.02.	 	Benefit Amounts.
	 
	 	 	The Death Benefit payable upon the death of a Participant shall be a monthly benefit equal
to four thousand, one hundred and sixty-six dollars and sixty seven cents ($4,166.67) per
month beginning in the month after the month during which the Participant dies and ending in
the month during which the Participant would have attained age eighty (80).
	 
	5.03.	 	Vesting of Death Benefit.
	 
	 	 	Each Participant shall become 100% vested in his Death Benefit upon his death (a)
while actively employed by the Company if the Participant is not a Limited Participant or
(b) before reaching eligibility for Normal Retirement if the Participant has a Disability.

			
	 	 	 
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ARTICLE 6. PAYMENT OF PLAN BENEFITS

	6.01.	 	Timing of Benefit Payments.

	 	(a)	 	Retirement Benefit.

	 	(1)	 	Retirement. A Participant who retires from the Company (whether
pursuant to an Early Retirement or a Normal Retirement) shall receive his
distribution as soon as practicable after his retirement but in no event
earlier than the earlier of (A) the date that the Participant attains age 65
or (B) the date that is six (6) months after the date of the Participant’s
retirement. The Participant may request a later distribution in accordance
with Section 6.02(a). If a Participant requests a later distribution, Annual
Allocations shall be credited to his Account in accordance with Section
4.02(a) until he begins to receive his distribution, and then interest shall
be credited to his Account in accordance with Section 4.02(b) until his
Account is fully distributed.
	 
	 	(2)	 	Disability. A Participant who has suffered a Disability before
his eligibility for Normal Retirement shall receive the Retirement Benefit as soon as
practicable after he attains eligibility for Normal Retirement, but in no
event later than 90 days after such date. The Participant may request a later
distribution in accordance with Section 6.02(a). If a Participant requests a
later distribution, interest shall be credited to his Account in accordance
with Section 4.02(b) until his Account is fully distributed.
	 
	 	(3)	 	Change in Control. A Participant whose employment is
involuntary terminated for any reason other than for Cause within two (2) years
following a Change in Control shall receive his distribution as soon as
practicable after his termination but in no event later than the later of (A)
30 days after his termination of employment or (B) the earliest date a
distribution may commence in accordance with section 409A of the Code.
	 
	 	(4)	 	Death of a Limited Participant. The Beneficiaries of a
Participant who is actively employed as a Limited Participant on the date of his death shall
receive the Limited Participant’s Account balance in the form of a lump sum
as soon as practicable after the Limited Participant’s death.

	 	(b)	 	Death Benefit.
	 
	 	 	 	The Death Benefit payable on behalf of a Participant shall be paid monthly beginning
with the month after the month during which the Participant dies and ending in the
month during which the Participant would have attained age eighty (80).

	6.02.	 	Form of Payment.

	 	(a)	 	Retirement Benefit.

			
	 	 	 
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	 	Page 11

 

 

	 	 	 	The Retirement Benefit payable to any Participant shall be paid in a lump sum
unless the Participant elects to receive his Retirement Benefit in annual
installments and such election—

	 	(1)	 	is not effective until at least twelve (12) months after the
date on which the election is made,
	 
	 	(2)	 	defers the first payment with respect to which such election is
made for a period of not less than five (5) years from the date such payment would
otherwise have been made,
	 
	 	(3)	 	is not made less than twelve (12) months before the date
of the first scheduled payment,
	 
	 	(4)	 	does not result in the Participant’s Retirement Benefit
commencing after the later of (A) the Participant’s termination of employment or (B) the
Participant’s attaining age 70; and
	 
	 	(5)	 	does not result in any part of a Participant’s Retirement
Benefit being paid after the earlier of (A) the fifteenth (15th) year after the Participant’s
termination of employment or (B) the Participant’s attaining age 85.

	 	 	 	If the Participant dies after his retirement under this Plan, the Company shall pay
to the Participant’s Beneficiaries the remaining unpaid Account balance at the same
time and in the same manner as if the Participant had survived, except that the
Committee may, in its sole discretion, approve a request made by the Beneficiaries
for payment in an Actuarially Equivalent form.
	 
	 	(b)	 	Death Benefit.
	 
	 	 	 	The Death Benefit payable on behalf of any Participant shall be paid in equal
monthly installments.

	6.03.	 	Withholding.
	 
	 	 	The Company shall withhold from any payment made pursuant to this Plan any taxes the Company
reasonably believes are required to be withheld from such payments under local, state, or
federal law.
	 
	6.04.	 	Payment to Guardian.
	 
	 	 	If a Plan benefit is payable to a minor or a person declared incompetent or to a person
incapable of handling the disposition of the property, the Committee may direct payment to
the guardian, legal representative or person having the care and custody of such minor,
incompetent or person. The Committee may require proof of incompetency, minority, incapacity
or guardianship as it may deem appropriate prior to distribution. Such distribution shall
completely discharge the Committee and Company from all liability with respect to such
benefit.

			
	 	 	 
	AMETEK, Inc. 2004 Executive Death Benefit Plan
	 	Page 12

 

 

	6.05.	 	Effect of Payment.
	 
	 	 	The full payment of the applicable benefit under this Article 6 shall completely
discharge all obligations on the part of the Company to the Participant (and the
Participant’s Beneficiary) with respect to the operation of this Plan, and the Participant’s
(and Participant’s Beneficiary’s) rights under this Plan shall terminate.

			
	 	 	 
	AMETEK, Inc. 2004 Executive Death Benefit Plan
	 	Page 13

 

 

ARTICLE 7. BENEFICIARY DESIGNATION

	7.01.	 	Beneficiary Designation.
	 
	 	 	Each Participant shall have the right, at any time, to designate one (1) or more
persons or entity as Beneficiary (both primary as well as secondary) to whom benefits under
this Plan shall be paid in the event of the Participant’s death prior to complete
distribution of the Participant’s vested Account. Each Beneficiary designation shall be in a
written form prescribed by the Committee and shall be effective only when filed with the
Committee during the Participant’s lifetime.
	 
	7.02.	 	Changing Beneficiary.
	 
	 	 	Any Beneficiary designation may be changed without the consent of the previously named
Beneficiary by the filing of a new Beneficiary designation with the Committee.
	 
	7.03.	 	No Beneficiary Designation.
	 
	 	 	If any Participant fails to designate a Beneficiary in the manner provided above, if the
designation is void, or if the Beneficiary designated by a deceased Participant dies before
the Participant or before complete distribution of the Participant’s benefits, the
Participant’s Beneficiary shall be the person in the first of the following classes in which
there is a survivor:

	 	(a)	 	the Participant’s surviving spouse;
	 
	 	(b)	 	the Participant’s children in equal shares, except that if any of the children
predeceases the Participant but leaves surviving issue, then such issue shall take
by right of representation the share the deceased child would have taken if living;
or
	 
	 	(c)	 	the Participant’s estate.

	7.04.	 	Effect of Payment.
	 
	 	 	Payment to the Beneficiary shall completely discharge the Company’s obligations under this
Plan.

			
	 	 	 
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	 	Page 14

 

 

ARTICLE 8. ADMINISTRATION

	8.01.	 	Committee Duties.
	 
	 	 	This Plan shall be administered by the Committee, which shall consist of not less
than three (3) persons, who may also be Participants in this Plan, and are named as the
initial Committee in this Plan or as subsequently appointed by the Board or its delegee,
except in the event of a Change in Control as provided in Section 8.05 below. The Committee
shall have the full discretionary authority to (a) make, amend, interpret and enforce all
appropriate rules and regulations for the administration of the Plan and decide or resolve
any and all questions, including interpretations of the Plan, as they may arise in such
administration, and (b) establish and maintain an investment policy for the Life insurance
Policies listed on Exhibit A, select appropriate investment options to implement the
investment policy, monitor the performance of such investment options, and change the
selection of investment options from time to time in a manner consistent with the
objectives of the investment policy. A Committee member who is also a Participant in this
Plan shall be prohibited from voting on any matter which may, in the opinion of the balance
of the Committee, directly affect the Committee member’s rights or benefits under this
Plan. A majority vote of the Committee members permitted to vote shall control any
decision.
	 
	8.02.	 	Agents.
	 
	 	 	The Committee may, from time to time, employ agents and delegate to them such
administrative duties as it sees fit, and may from time to time consult with counsel who may
be counsel to the Company.
	 
	8.03.	 	Binding Effect of Decisions.
	 
	 	 	The decision or action of the Committee with respect to any question arising out of
or in connection with the administration, interpretation and application of the Plan and the
rules and regulations promulgated hereunder shall be final, conclusive and binding upon all
persons having any interest in the Plan.
	 
	8.04.	 	Indemnity of Committee.
	 
	 	 	The Company shall indemnify and hold harmless the members of the Committee against
any and all claims, loss, damage, expense (including counsel fees) or liability (including
any amounts paid in settlement of any claim or any other matter with the consent of the
Board) arising from any action or failure to act with respect to this Plan on account of
such member’s service on the Committee, except in the case of gross negligence or willful
misconduct.
	 
	8.05.	 	Election of Committee After Change in Control.
	 
	 	 	After a Change in Control, vacancies on the Committee shall be filled by majority
vote of the remaining Committee members and Committee members may be removed only by such a
vote. If no Committee members remain, a new Committee shall be elected by majority vote of
the Participants in the Plan immediately preceding such Change in Control. No amendment
shall be made to Article 8 or other Plan provisions regarding Committee authority with
respect to the Plan without prior approval by the Committee.

			
	 	 	 
	AMETEK, Inc. 2004 Executive Death Benefit Plan
	 	Page 15

 

 

ARTICLE 9. CLAIMS PROCEDURE

	9.01.	 	Claim.
	 
	 	 	Any person or entity claiming a benefit, requesting an interpretation or ruling
under the Plan (hereinafter referred to as “Claimant”), or requesting information under the
Plan shall present the request in writing to the Corporate Human Resources Department,
which shall respond in writing as soon as practical, but not later than ninety (90) days
after receipt of the claim, unless the Corporate Human Resources Department notifies the
Claimant that special circumstances require an additional period of time (not to exceed 90
days) to review the claim properly.
	 
	9.02.	 	Denial of Claim.
	 
	 	 	If the claim or request is denied, the written notice of denial shall state:

	 	 	 	 
	 	(a)	 	the reasons for denial, with specific reference to the Plan provisions on
which the denial is based;
	 
	 	(b)	 	a description of any additional material or information required and an
explanation of why it is necessary; and
	 
	 	(c)	 	an explanation of the Plan’s claim review procedure, including a statement of
the Claimant’s right to bring a civil action under section 502(a) of ERISA if the claim
denial is denied (in whole or in part) on appeal.

	9.03.	 	Review of Claim.
	 
	 	 	Any Claimant whose claim or request is denied or who has not received a response within the
time limits set forth above may request a review by notice given in writing to the
Committee. Such request must be made within sixty (60) days after receipt by the Claimant of
the written notice of denial, or, in the event Claimant has not received a timely response,
within 60 days after the date the Corporate Human Resources Department was required to
respond to the claim under Section 9.01. The claim or request shall be reviewed by the
Committee which may, but shall not be required to, grant the Claimant a hearing. On review,
the claimant may have representation, examine pertinent documents, and submit issues and
comments in writing.
	 
	9.04.	 	Final Decision.
	 
	 	 	The decision on review shall normally be made within sixty (60) days after the Committee’s
receipt of claimant’s claim or request. If an extension of time is required for a hearing or
other special circumstances, the Claimant shall be notified and the time limit shall be one
hundred twenty (120) days. The decision shall be in writing and shall state the reasons and
the relevant Plan provisions. All decisions on review shall be final and bind all parties
concerned.

			
	 	 	 
	AMETEK, Inc. 2004 Executive Death Benefit Plan
	 	Page 16

 

 

	9.05.	 	Claims for Disability Benefits.
	 
	 	 	To the extent required by law, the Committee shall develop alternative claims procedures
that shall apply with respect to claims for Disability benefits.

			
	 	 	 
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	 	Page 17

 

 

ARTICLE 10. AMENDMENT AND TERMINATION OF PLAN

	10.01.	 	Amendment.
	 
	 	 	The Committee may at any time amend the Plan by written instrument executed by all Committee
members, notice of which shall be given to all Participants and to any Beneficiary receiving
installment payments, subject to the following:

	 	(a)	 	Preservation of Account Balance. No amendment shall reduce the
amount accrued in any Account as of the date such notice of the amendment is given.
	 
	 	(b)	 	Changes in Interest Rate. No amendment shall retroactively reduce the
rate of interest which had been credited to a Participant’s Account.
	 
	 	(c)	 	Change in Control. Notwithstanding the foregoing, the Plan may not be
amended in any material respect, except as is provided below in Section 10.02, during the
two (2) year period following a Change in Control.

	10.02.	 	Company’s Right to Terminate.
	 
	 	 	The Committee may at any time partially or completely terminate the Plan. The Committee may
completely terminate the Plan by written instrument executed by the Committee and approved
by the Board. In the event of complete termination, the Plan shall cease to operate and the
Company shall distribute the Account to the appropriate Participant in a lump sum (if
permitted under section 409A of the Code) or pursuant to the Participant’s distribution
election in effect at the time of the termination.

			
	 	 	 
	AMETEK, Inc. 2004 Executive Death Benefit Plan
	 	Page 18

 

 

ARTICLE 11. MISCELLANEOUS

	11.01.	 	Hypothetical Accounts.
	 
	 	 	Each account and investment established under the Plan shall be hypothetical in nature and
shall be maintained for bookkeeping purposes only. The accounts established under the Plan
shall hold no actual funds or assets. Any liability of the Company to any Participant,
former Participant, or Beneficiary with respect to a right to payment shall be based solely
upon contractual obligations created by the Plan. Neither the Company, the Board, nor any
other person shall be deemed to be a trustee of any amounts to be paid under the Plan.
Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create
or be construed to create a trust of any kind, or a fiduciary relationship, between or
among the Company, a Participant, or any other person.
	 
	11.02.	 	Company Obligation.
	 
	 	 	The Company shall not be required to fund any obligations under the Plan. Except as provided
in Section 11.03, any assets that may be accumulated by the Company to meet its obligations
under the Plan shall for all purposes be part of the general assets of the Company. To the
extent that any Participant or Beneficiary acquires a right to receive payments under the
Plan for which the Company is liable, such rights shall be no greater than the rights of any
unsecured general creditor of the Company.
	 
	11.03.	 	Trust Fund.
	 
	 	 	The Company shall be responsible for the payment of all benefits provided under the Plan.
Before a Change in Control, at its discretion, the Company may establish one (1) or more
trusts, with such trustees as the Committee may approve, for the purpose of assisting in the
payment of such benefits. Following a Change in Control, the Company shall establish one
(1) or more trusts, with such trustees as the Committee may approve, for the purpose of
assisting in the payment of such benefits. Although such a trust may be irrevocable, its
assets shall be held for payment of all Company’s general creditors in the event of
insolvency. To the extent any benefits provided under the Plan are paid from any such trust,
Company shall have no further obligation to pay them. If not paid from the trust, such
benefits shall remain the obligation of Company.
	 
	11.04.	 	Nonassignability.
	 
	 	 	Neither a Participant nor any other person shall have any right to commute, sell, assign,
transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or
convey in advance of actual receipt the amounts, if any, payable hereunder, or any part
thereof, which are, and all rights to which are, expressly declared to be unassignable and
non-transferable. No part of the amounts payable shall, prior to actual payment, be subject
to seizure or sequestration for the payment of any debts, judgements, alimony or separate
maintenance owed by a Participant or any other person, nor be transferable by operation of
law in the event of a Participant’s or any other person’s bankruptcy or insolvency.

			
	 	 	 
	AMETEK, Inc. 2004 Executive Death Benefit Plan
	 	Page 19

 

 

	11.05.	 	Not a Contract of Employment.
	 
	 	 	This Plan shall not constitute a contract of employment between Company and the
Participant. Nothing in this Plan shall give a Participant the right to be retained in the
service of Company or to interfere with the right of the Company to discipline or discharge
a Participant at any time.
	 
	11.06.	 	Protective Provisions.
	 
	 	 	A Participant will cooperate with Company by furnishing any and all information
requested by Company, in order to facilitate the payment of benefits hereunder, and by
taking such physical examinations as Company may deem necessary and taking such other
action as may be requested by Company.
	 
	11.07.	 	Governing Law.
	 
	 	 	The Plan shall be construed and enforced in accordance with applicable federal law
and, to the extent not preempted by federal law, the laws of the Commonwealth of
Pennsylvania (without regard to the legislative or judicial conflict of laws rules of any
state or other jurisdiction).
	 
	11.08.	 	Severability.
	 
	 	 	If any provision of the Plan shall be held unlawful or otherwise invalid or
unenforceable in whole or in part, the unlawfulness, invalidity, or unenforceability shall
not affect any other provision of the Plan or part thereof, each of which shall remain in
full force and effect. In addition, if any provision of the Plan shall be found to violate
section 409A of the Code or otherwise result in benefits under the Plan being subject to
income tax prior to distribution, such provision shall be void and unenforceable, and the
Plan shall be administered without regard to such provision.
	 
	11.09.	 	Headings.
	 
	 	 	Headings are inserted in this Plan for convenience of reference only and are to be
ignored in the construction of the provisions of the Plan.
	 
	11.10.	 	Notice.
	 
	 	 	Any notice required or permitted under the Plan shall be sufficient if in writing and
hand delivered or sent by registered mail, certified mail, or reputable overnight delivery
service. Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail or overnight delivery, as of the date shown on the postmark on the receipt for
registration or certification or on the records of the overnight delivery company. Mailed
notice to the Committee shall be directed to the Company’s address. Mailed notice to a
Participant or Beneficiary shall be directed to the individual’s last known address in
Company’s records.
	 
	11.11.	 	Successors.
	 
	 	 	The provisions of this Plan shall bind and inure to the benefit of Company and its
successors and assigns. The term successors as used herein shall include any corporate or
other business entity which shall, whether by merger, consolidation, purchase or otherwise
acquire

			
	 	 	 
	AMETEK, Inc. 2004 Executive Death Benefit Plan
	 	Page 20

 

 

	 	 	all or substantially all of the business and assets of Company, and successors of any such
corporation or other business entity.

	 	 	 	 	 	 	 
	 	 	AMETEK, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	BY:
	 	Henry J. Policare	 	 
	 

	 	 	 	 	 	 
	 

	 	BY:
	 	/s/ Henry J. Policare	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	DATED: 10/26/05	 	 

			
	 	 	 
	AMETEK, Inc. 2004 Executive Death Benefit Plan
	 	Page 21exv10w1

 

MARITRANS INC.

ANNUAL INCENTIVE PLAN

 

 

Adopted by Maritrans Inc.

Board of Directors on November 2, 2005.

Approved by Maritrans Inc.

Stockholders on                                         

 

 

MARITRANS INC.

ANNUAL INCENTIVE PLAN

	1.	 	Purpose

     The purpose of the Maritrans Inc. Annual Incentive Plan (the “Plan”) is to enhance the ability
of Maritrans Inc. (the “Company”) to attract, reward and retain employees, to strengthen employee
commitment to the Company’s success and to align employee interests with those of the Company’s
stockholders by providing variable compensation, based on the achievement of performance
objectives. To this end, the Plan provides a means of annually rewarding participants based on the
performance of the Company and its Business Units (as defined below) and, where appropriate, on a
participant’s personal performance.

	2.	 	Definitions

     (a) “Award” shall mean the incentive award earned by a Participant under the Plan for any
Performance Period.

     (b) “Base Salary” shall mean the Participant’s annual base salary rate in effect on May
1st of a Performance Period. Base Salary does not include Awards under this Plan or any
other short-term or long-term incentive plan; imputed income from such programs as group-term life
insurance; or non-recurring earnings, such as moving expenses, but is based on salary earnings
before reductions for such items as deferrals under Company-sponsored deferred compensation plans,
contributions under Code section 401(k) and contributions to flexible spending accounts under Code
section 125.

     (c) “Board” shall mean the Maritrans Inc. Board of Directors, as constituted from time to
time.

     (d) “Business Unit” shall mean a strategic business unit, central function, regional group or
other unit of classification of the Company, as specified by the Committee or the CEO, as
applicable.

     (e) “CEO” shall mean the Chief Executive Officer of the Company or the person to whom the CEO
delegates any function required of the CEO under the Plan.

     (f) “Code” shall mean the Internal Revenue Code of 1986, as amended or any successor statute
thereto.

     (g) “Committee” shall mean the Compensation Committee of the Board. The Committee shall
consist of two or more persons appointed by the Board, all of whom shall be “outside directors” as
defined under Code section 162(m) and related Treasury regulations. The Committee may delegate its
responsibilities for administering the Plan to the CEO as it deems appropriate, except that it may
not delegate its responsibilities under the Plan relating to Tier I Officers or its authority to
amend or terminate the Plan.

1

 

     (h) “Company” shall mean Maritrans Inc., any successor corporation and each corporation which
is a member of a controlled group of corporations (within the meaning of Code section 414(b)) of
which Maritrans Inc. is a component member.

     (i) “Disabled” or “Disability” shall mean that a Participant is considered totally and
permanently disabled for purposes of the Company’s long-term disability plan.

     (j) “Effective Date” shall mean January 1, 2006.

     (k) “Employee” shall mean an employee of the Company (including an officer or director who is
also an employee), but excluding any individual (a) employed in a casual or temporary capacity
(i.e., those hired for a specific job of limited duration), (b) whose terms of employment
are governed by a collective bargaining agreement that does not provide for participation in this
Plan, (c) characterized as a “leased employee” within the meaning of Code section 414, or (d)
classified by the Company as a “contractor” or “consultant,” no matter how characterized by the
Internal Revenue Service, other governmental agency or a court. Any change of characterization of
an individual by any court or government agency shall have no effect upon the classification of an
individual as an Employee for purposes of this Plan, unless the Committee determines otherwise.

     (l) “Executive” shall mean an officer, business leader or other Employee of the Company, who
is designated as an Executive for purposes of the Plan by the Committee, upon the recommendation of
the CEO.

     (m) “Participant” for any Performance Period, shall mean an Employee designated by the
Committee to participate in the Plan.

     (n) “Performance Goals” for any Performance Period, shall mean:

          (i) For Target Awards designated as “qualified performance-based compensation” pursuant to
Section 5, the Performance Goals of the Company or a Business Unit, as specified by the Committee,
shall be based on one or more of the following objective criteria, either in absolute terms or in
comparison to publicly available industry standards or indices: earnings, revenue, operating
margins and statistics, operating or net cash flows, financial return and leverage ratios, total
stockholder returns, market share, and safety statistics.

          (ii) For Target Awards not designated as “qualified performance-based compensation” pursuant
to Section 5, the Performance Goals of the Company, a Business Unit and/or the Participant, as
specified by the Committee, based on one or more of the criteria listed in (i) above and/or such
other performance measures or goals, whether quantitative or qualitative, developed pursuant to the
Company’s operating plan for the Performance Period.

          (iii) The Committee may also establish Performance Goals that relate to a Participant’s
individual performance or a combination of a Participant’s individual performance and Company
performance as the Committee deems appropriate.

2

 

          (iv) To the extent applicable, the Committee, in determining whether and to what extent a
Performance Goal has been achieved, shall use the information set forth in the Company’s audited
financial statements. The Performance Goals established by the Committee may be (but need not be)
different each Performance Period and different Performance Goals may be applicable to different
Participants.

          (v) The Performance Goals may be weighted in such manner as the Committee may allocate, as
determined at the beginning of the Performance Period.

          (vi) The Performance Goals for each Performance Period, as determined by the Committee, are
set forth in Attachment A.

     (o) “Performance Period” shall mean the fiscal year of the Company or any other period
designated by the Committee with respect to which an Award may be earned.

     (p) “Plan” shall mean this Maritrans Inc. Annual Incentive Plan, as from time to time amended
and in effect.

     (q) “Retirement” shall mean retirement from active employment or service with the Company at
or after age 62.

     (r) “Target Award Percentage” shall mean the percentage of the Participant’s Base Salary that
the Participant would earn as an Award for that Performance Period if the targeted level of
performance was achieved for each of the Performance Goals set by the Committee for that
Participant for the Performance Period. A Participant’s Target Award Percentage shall be
determined by the Committee in its sole discretion based on the Participant’s responsibility level
or the position or positions held during the Performance Period; provided, however, that if any
Participant other than a Tier I Officer held more than one position during the Performance Period,
then the Committee may designate different Target Award Percentages with respect to each position
and the Award will be pro-rated to reflect (to the nearest semi-monthly increment) the period
during which such Participant had each Target Award Percentage.

     (t) “Target Award” for any Participant with respect to any Performance Period, shall mean the
dollar amount based on the Participant’s Target Award Percentage and Base Salary that the
Participant would be eligible to earn as an Award for that Performance Period.

     (u) “Tier I Officer” shall mean the Chief Executive Officer of the Company and such other
executive officers (within the meaning of the Securities Exchange Act of 1934, as amended) who are
among the top six most highly compensated Employees of the Company as may be deemed Tier I Officers
by the Committee as of the beginning of a Performance Period.

	3.	 	Eligibility

     Subject to the limitations contained in this Section 3, all Executives of the Company are
eligible to participate in the Plan. The Committee shall determine, upon the recommendation of the
CEO of the Company, each Executive of the Company who shall be eligible to participate in

3

 

the Plan for each Performance Period, each Participant’s Target Award Percentage for that
Performance Period and the Performance Goal or Goals (and how they are weighted, if applicable) for
that Performance Period. In making its determinations, the Committee shall take into account the
Company’s overall compensation policy, the Executive’s present and potential contribution to the
success of the Company and such other factors as the Committee may in its sole discretion deem
proper and relevant.

     To be eligible to receive an Award with respect to any Performance Period, an Employee must be
actively employed by the Company on the date payment of the Award is made (except as provided in
Section 8). Newly hired Employees shall be eligible to receive a prorated Award for a Performance
Period provided that their date of hire occurs on or before September 30 or such other date as the
Committee may specify.

     Employees shall participate in only one annual incentive plan for any specific period in time.
An Employee may participate in this Plan and another plan sequentially during any Performance
Period because of promotion or reassignment, provided that participation in each such plan is
prorated to reflect (to the nearest semi-monthly increment) the period during which he or she
participated in each plan.

	4.	 	Administration

     The administration of the Plan shall be consistent with the purpose and the terms of the Plan.
The Plan shall be administered by the Committee. The Committee shall have full authority to
establish the rules and regulations relating to the Plan, to interpret the Plan and those rules and
regulations, to select Participants in the Plan, to determine each Participant’s Target Award
Percentage, to approve all of the Awards, to decide the facts in any case arising under the Plan
and to make all other determinations, including factual determinations, and to take all other
actions necessary or appropriate for the proper administration of the Plan, including the
delegation of such authority or power, where appropriate; provided, however, that only the
Committee shall have authority to amend or terminate the Plan and the Committee shall not be
authorized to increase the amount of the Award payable to a Tier I Officer that would otherwise be
payable pursuant to the terms of the Plan. All powers of the Committee shall be executed in its
sole discretion, in the best interest of the Company, not as a fiduciary, and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated individuals.

     All Awards shall be made conditional upon the Participant’s acknowledgement, in writing or by
acceptance of the Award, that all decisions and determinations of the Committee shall be final and
binding on the Participant, his or her beneficiaries and any other person having or claiming an
interest under such Award. Awards need not be uniform as among Participants. The Committee’s
administration of the Plan, including all such rules and regulations, interpretations, selections,
determinations, approvals, decisions, delegations, amendments, terminations and other actions,
shall be final and binding on the Company and all employees of the Company, including, the
Participants and their respective beneficiaries.

4

 

	5.	 	Determination of Awards

     (a) Setting Target Awards. As soon as practicable, but no later than the earlier of (i) 90
days after the beginning of the Performance Period or (ii) the date on which 25% of the Performance
Period has been completed, or such other date as may be required or permitted under applicable
regulations under Code section 162(m), the Committee shall determine the Employees who shall be
Participants during that Performance Period and determine each Participant’s Target Award
Percentage, each of which shall be set forth in the Committee’s minutes. The Committee may also
specify, at the same time, Award percentages above or below the Target Award Percentage depending
upon the level of achievement of the Performance Goals. The minutes shall set forth (A) the
Participants during that Performance Period (which may be amended during the Performance Period for
new Participants), (B) each Participant’s Target Award Percentage for that Performance Period and
(C) the Performance Goal or Goals (and how they are weighted, if applicable,) for that Performance
Period. The Company shall notify each Participant of the Participant’s Target Award Percentage and
the applicable Performance Goals for the Performance Period.

     (b) Earning An Award. Generally, a Participant earns an Award for a Performance Period based
on the level of achievement of the Performance Goals established by the Committee for that period.
Except for Awards to Tier I Officers designated as “qualified performance-based compensation,” the
amount of the Award may be increased above the Target Annual Percentage or other levels set under
subsection (a), as specified by the Committee. An Award may also be reduced below the Target Award
Percentage to the extent the level of achievement of the Performance Goals is below target, but at
or above the minimum level for that Performance Period, as specified by the Committee at the time
the Performance Goals are established or for other reasons specified by the Committee. A
Participant will receive no Award if the level of achievement of all Performance Goals is below the
minimum required to earn an Award for the applicable Performance Period, as specified by the
Committee at the time the Performance Goals are established.

     (c) Eligibility Change During the Performance Period. The Committee shall have full power
and authority to decide, in its sole discretion, that a prorated Award shall be paid to a
Participant due to a change in the Participant’s job title or position during the Performance
Period. Any such decision shall be final, conclusive and binding on the Company, Participants and
any other persons having or claiming an interest hereunder.

     (d) Maximum Award Amount. The maximum Award payable to any Tier I Officer for any
Performance Period shall not exceed $1,000,000.

     (e) Special Rules for Tier I Officers. Unless the Committee determines otherwise, the Target
Awards of Tier I Officers shall be based on Performance Goals for each Performance Period that
shall satisfy the requirements for “qualified performance-based compensation” under Code section
162(m), including the requirement that the achievement of the Performance Goals be substantially
uncertain at the time they are established and that the Performance Goals be established in such a
way that a third party with knowledge of the relevant facts could determine whether and to what
extent the Performance Goals have been met. To the extent that an Award

5

 

designated as “qualified performance-based compensation” under Code section 162(m) is made, no
award may be made as an alternative to any other award that is not designated as “qualified
performance-based compensation” but instead must be separate and apart from all other awards made.
To the extent an Award is designated as “qualified performance-based compensation,” the Committee
is authorized to reduce the Award payable to a Tier I Officer for any Performance Period based upon
its assessment of personal performance or other factors, but not to increase the Award beyond the
Target Award Percentage, or the percentage set under subsection (a) for that Tier I Officer. Any
reduction of a Tier I Officer’s Target Award shall not result in an increase in any other Tier I
Officer’s Target Award.

	6.	 	Changes to the Target

     Except with respect to Awards to Tier I Officers, the Committee may at any time prior to the
final determination of Awards change the Target Award Percentage of any Participant or assign a
different Target Award Percentage to a Participant to reflect any change in the Participant’s
responsibility level or position during the course of the Performance Period.

     In addition, the Committee may, but only to the extent consistent with the requirements of
Code section 162(m) permitting a federal income tax deduction for Awards if a Target Award is
designated as “qualified performance-based compensation,” at any time prior to the financial
determination of Awards, change the performance measures or Performance Goals to reflect a change
in corporate capitalization, such as a stock split or stock dividend, or a corporate transaction,
such as a merger, consolidation, separation, reorganization or partial or complete liquidation, or
to equitably reflect the occurrence of any extraordinary event, any change in applicable accounting
rules or principles, any change in the Company’s method of accounting, any change in applicable
law, any change due to any merger, consolidation, acquisition, reorganization, stock split, stock
dividend, combination of shares or other changes in the Company’s corporate structure or shares, or
any other change of a similar nature.

	7.	 	Payment of Awards

     The Committee shall certify and announce the Awards that will be paid by the Company to each
Participant as soon as practicable following the final determination of the Company’s financial
results for the relevant Performance Period. Subject to the provisions of Section 8, payment of
the Awards certified by the Committee shall normally be made, in a single lump sum cash payment on
or before March 15 following the end of the Performance Period in which such Award was earned.

	8.	 	Limitations on Rights to Payment of Awards

     (a) Employment. No Participant shall have any right to receive payment of an Award under the
Plan for a Performance Period unless the Participant is actively employed by the Company on the
date payment of the Award is made; provided, however, that if a Participant’s employment with the
Company terminates prior to the end of the Performance Period (including but not limited to
termination on account of Retirement, Disability or death), the Committee may provide that the
Participant shall remain eligible to receive a prorated portion of any earned

6

 

Award, based on the number of days that the Participant was actively employed and performed
services during such Performance Period in such circumstances as are deemed appropriate.

     (b) Leaves of Absence. If a Participant is on an authorized leave of absence during the
Performance Period, the Committee shall have full power and authority to decide, in its sole
discretion, that such Participant shall be eligible to receive a prorated portion of any Award that
would have been earned, based on the number of days that the Participant was actively employed and
performed services during such Performance Period. If payments are to be made under the Plan after
a Participant’s death, such payments shall be made to the personal representative of the
Participant’s estate.

     (c) Accelerated Payment. In no event will payment be made to a Tier I Officer or, unless the
Committee determines otherwise, to any other Participant, with respect to an Award prior to the end
of the Performance Period to which it relates.

	9.	 	Amendments

     The Committee may at any time amend (in whole or in part) this Plan; provided, however, that
the Committee shall not amend the Plan without stockholder approval if such approval is required by
Code section 162(m). No such amendment which adversely affects any Participant’s rights to or
interest in an Award earned prior to the date of the amendment shall be effective unless the
Participant shall have agreed thereto.

	10.	 	Termination

     The Committee may terminate this Plan (in whole or in part) at any time. In the case of such
termination of the Plan, the following provisions of this Section 10 shall apply notwithstanding
any other provisions of the Plan to the contrary:

     (a) Amount of Award. The Committee shall promulgate administrative rules applicable to Plan
termination, pursuant to which each affected Participant (other than a Tier I Officer) shall
receive, with respect to each Performance Period which has commenced on or prior to the effective
date of the Plan termination (the “Termination Date”) and for which the Award has not yet been
paid, the amount described in such rules and each Tier I Officer shall receive an amount equal to
the amount the Award would have been had the Plan not been terminated (prorated for the Performance
Period in which the Termination Date occurred), subject to reduction in the discretion of the
Committee.

     (b) Time of Payment. Each Award payable under this Section 10 shall be paid as soon as
practicable, but in no event later than 90 days after the Termination Date.

	11.	 	Miscellaneous Provisions

     (a) No Employment Right. This Plan is not a contract between the Company and the Employees
or the Participants. Neither the establishment of this Plan, nor any action taken hereunder, shall
be construed as giving any Employee or any Participant any right to be retained

7

 

in the employ of the Company. The Company is under no obligation to continue the Plan. Nothing
contained in the Plan shall limit or affect in any manner or degree the normal and usual powers of
management, exercised by the officers and the Board of Directors or committees thereof, to change
the duties or the character of employment of any employee of the Company or to remove the
individual from the employment of the Company at any time, all of which rights and powers are
expressly reserved.

     (b) No Assignment. A Participant’s right and interest under the Plan may not be assigned or
transferred, except as provided in Section 8 of the Plan, and any attempted assignment or transfer
shall be null and void and shall extinguish, in the Company’s sole discretion, the Company’s
obligation under the Plan to pay Awards with respect to the Participant.

     (c) Unfunded Plan. The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund, or to make any other segregation of assets, to assure
payment of Awards.

     (d) Withholding Taxes. The Company shall have the right to deduct from Awards paid any taxes
or other amounts required by law to be withheld.

     (e) Stockholder Approval. Notwithstanding any provision of the Plan to the contrary, Awards
to Tier 1 Officers, if made, will be made contingent upon, and subject to, stockholder approval of
the Plan at the April 2006 stockholders’ meeting.

     (f) Compliance with 162(m). It is the intent of the Company that the Plan and Awards under
the Plan for Tier I Officers comply with the applicable provisions of Code section 162(m). To the
extent that any legal requirement of Code section 162(m) as set forth in the Plan ceases to be
required under Code section 162(m), that Plan provision shall cease to apply.

     (g) Governing Law. The validity, construction, interpretation and effect of the Plan shall
exclusively be governed by and determined in accordance with the law of the State of Florida.

8

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