Exhibit 10.7
AVX NONQUALIFIED SUPPLEMENTAL
RETIREMENT PLAN
Restated as of January 1, 1998
AGREEMENT made as of January 1, 1998 by AVX Corporation (hereinafter referred
to as the "Company").
WI T N E S S E T H:
WHEREAS, the Company implemented the AVX Corporation Deferred Compensation
Plan (the "Original Plan") for the benefit of certain management or highly
compensated employees, effective August 1, 1994; and
WHEREAS, the Company restated the Original Plan, effective July 1, 1995;
and
WHEREAS, the restated Original Plan has been amended four times;
and
WHEREAS, it is now desired to again amend and restate the Original Plan,
effective January 1, 1998;
NOW, THEREFORE, the Original Plan is hereby amended and renamed the AVX
Nonqualified Supplemental Retirement Plan (the "Plan") effective January 1,
1998 to read as follows:
Section 1 Purpose of the Plan
The purpose of the Plan is to provide certain management or highly
compensated employees of the Company with supplemental retirement benefits
that would otherwise be lost due to the limitation on covered compensation
under plans intended to qualify under Section 401(a) of the Internal Revenue
Code of 1986, as amended (the "Code").
Section 2 Eligibility to Participate
Each employee of the Company on January 1, 1998 who at any time participated
in the Original Plan shall continue to be eligible to participate in this
Plan. Every other employee of the Company on January 1, 1998 and thereafter
who is eligible to participate in the AVX Corporation Stock Bonus Plan and
whose annual compensation is in excess of $160,000 (or such higher amount as
determined under Section 401(a)(17) of the Code), shall participate in the
Plan as of the date his/her annual compensation exceeds $160,000 (or such
higher amount as determined under Section 401(a)(17) of the Code). An
eligible employee who participates in the Plan is hereinafter referred to as
a "Participant."
Section 3 Benefits
3.1 Each Participant shall be entitled to make an irrevocable election,
as specified in Section 3.2, to defer receipt of compensation otherwise
payable by the Company to such Participant for the calendar year commencing
January 1, 1998, and each calendar year thereafter. The deferred amount may
range from 1% of compensation to 3% of compensation in excess of $160,000 (or
such higher amount as determined under Section 401(a)(17) of the Code). For
purposes of the Plan, compensation shall include any amounts not includible
in the gross income of the Participant due to any salary reduction agreement
maintained with the Company under Sections 125 or 401(k) of the Code and any
compensation deferred under the AVX Corporation SERP (the "SERP").
3.2 A Participant may elect to defer compensation pursuant to Section 3.1
by giving written notice to the Company. Such notice must be received by the
Company prior to January 1, 1998, and thereafter prior to the first day of
the calendar year to which such election is applicable.
Notwithstanding anything contained in Sections 3.1 or 3.2 to the contrary,
for each employee who enters the Plan after January 1, 1998, in the first
year in which such employee becomes eligible to participate, such newly
eligible employee may make an election to defer compensation for services to
be performed subsequent to such election within 30 days after the date such
employee becomes eligible.
Any compensation deferred under this Section 3.2 shall be invested
in accordance with Section 4.2.
A Participant's initial election to defer compensation shall also include an
election as to the manner of payment which shall be (i) a lump sum
distribution, or (ii) installment payments over a period of years (not to
exceed 10 years). The time of payment shall be in accordance with Section
5.2.
3.3 In addition to any compensation deferred by a Participant under
Section 3.2, the Company shall also defer an amount for each Participant,
which amount shall be equal to the sum of the following:
a. A Company matching contribution equal to 100% of the amount deferred
under Section 3.2 by such Participant on compensation between $160,000 and
$600,000; and
b. Provided such Participant is an employee of the Company on December
31 of such year (unless employment terminated during such year due to
retirement, disability or death as determined under the AVX Corporation
Retirement Plan), an amount equal to the aggregate amount that would have
been contributed on such Participant's compensation between $160,000 and
$300,000 under profit sharing and between $160,000 and $600,000 under money
purchase of the AVX Corporation Retirement Plan (had there been no limit on
compensation in said plan, as required by Section 401(a)(17) of the Code).
For the purpose of determining the Company's contribution under this Section
3.3, the $160,000 shall be increased in order to reflect any cost-of-living
adjustment for each calendar year pursuant to Code Section 401(a)(17).
Section 4 Deferred Compensation Accounts
4.1 In furtherance of the purposes of this Plan, the Company has
established the Trust Under the AVX Corporation Deferred Compensation Plans
(the "Trust") which is intended to be a "grantor trust" within the meaning of
Subpart E, Part I, Subchapter J, Chapter 1, Subtitle A of the Code.
The trustee of the Trust (the "Trustee") shall hold, invest and distribute
any assets contributed to the Trust in accordance with the provisions thereof.
The AVX Stock Fund is an investment option under the Trust. Notwithstanding
anything contained in the Plan or Trust to the contrary, the purchase price
to be paid for shares of AVX Stock acquired by the Trust shall be equal to
the fair market value of such shares and the maximum number of such shares
that may be purchased during the existence of the Plan shall not exceed one
(1) million shares.
4.2 Any compensation deferred by a Participant pursuant to Section 3.2
and the matching Company contribution thereon shall be invested in the AVX
Stock Fund.
Section 5 Distribution of Benefits
5.1 Each Participant shall be fully vested and shall have a
nonforfeitable interest in his/her account.
5.2 Benefits under the Plan shall be payable to a Participant or
beneficiary, as the case may be, upon the earlier of such Participant's
termination of employment (for any reason), or death.
5.3 In the event a Participant dies before all amounts credited to such
Participant's account have been distributed to him/her, then the beneficiary
designated by the Participant shall be paid the balance of such account. If
a Participant shall fail to designate a beneficiary or if the beneficiary
designated does not survive the Participant, then the beneficiary shall be
deemed to be one of the following, in the order named: (i) spouse, (ii)
children, per stirpes and (iii) estate of the Participant. Such designation
of beneficiary may be changed from time to time by the Participant filing a
new designation with the Company.
5.4 The Trustee shall deduct from each payment under the Plan, any
federal, state or local withholding or other taxes or charges which the
Trustee may be required to deduct under applicable laws.
5.5 Notwithstanding anything contained in this Plan or Trust to the
contrary, if at any time the Trust is determined by the Internal Revenue
Service ("IRS") not to be a "grantor trust" with the result that the income
of the Trust is not treated as income of the Company pursuant to Subpart E of
Subchapter J of the Code, or if a tax is finally determined by the IRS to be
payable by the Participants or their beneficiaries in respect of any vested
interests in their accounts prior to payment of such interest to the
Participants or their beneficiaries, then the Board of Directors of the
Company or the Chief Executive Officer of the Company shall have the right
in its or his sole and complete discretion (i) to permit the distribution of
the amount of such tax or (ii) terminate the Plan and Trust and the full fair
market value of the assets in the Trust distributed to the Participants. For
purposes of this Section 5.5, a final determination of the IRS shall be a
decision rendered by the IRS which is no longer subject to administrative
appeal within the IRS.
5.6 Notwithstanding anything contained herein to the contrary, a
"derivative security" (as defined in rules issued by the Securities and
Exchange Commission under Section 16 of the Securities Exchange Act of 1934)
issued under the Plan shall not be transferrable by a Participant other than
by will or the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined under the Code.
Section 6 Status of Plan Assets
6.1 The Trust assets are and shall remain at all time subject to the
claims of the general creditors of the Company. Accordingly, the Company
shall not create a security interest in the Trust assets in favor of the
Participants (or their beneficiaries).
6.2 Except insofar as applicable law may otherwise require and subject
to the provisions of the Trust, (i) no amount payable to or in respect of
the Participants or their beneficiaries at any time under the Plan shall be
subject in any manner to alienation by anticipation, sale, transfer,
assignment, bankruptcy, pledge, attachment, charge or encumbrance of any
kind, and any attempt to so alienate, sell, transfer, assign, pledge, attach,
charge or otherwise encumber any such amount, whether presently or thereafter
payable, shall be void; and (ii) the Plan shall in no manner be liable for
or subject to the debts or liabilities of the Participants or their
beneficiaries.
Section 7 Amendment and Termination
The Plan may, at any time or from time to time, be amended, modified or
terminated by the Company. However, no amendment, modification or
termination of the Plan shall, without the consent of a Participant,
adversely affect such Participant's rights with respect to amounts then
accrued in his/her account.
Section 8 Miscellaneous
8.1 If the Company shall find that any person to whom any payment is
payable under the Plan is unable to care for his affairs because of illness
or accident, or is a minor, any payment due (unless a prior claim therefore
shall have been made by a duly appointed guardian, committee or other legal
representative) may be paid to a spouse, a child, a parent, or a brother or
sister, or to any person deemed by the Company to have incurred expense for
such person otherwise entitled to payment, in such manner and proportions as
the Company may determine. Any such payment shall be a complete discharge of
the liabilities of the Company under the Plan.
8.2 Nothing contained herein shall be construed as conferring upon a
Participant the right to continue in the employ of the Company as an employee
or in any other capacity.
8.3 The Company (or such party or committee as the Company may designate)
shall have full power and authority to interpret, construe and administer the
Plan (except to the extent authority has been explicitly granted to the
Trustee under the Trust) and such interpretation, construction, and actions
hereunder, shall be binding and conclusive on all persons for all purposes.
The Company (or such party or committee as the Company may designate) shall
not be liable to any person for any action taken or omitted in connection
with the interpretation and administration of this Plan unless attributable
to willful misconduct or lack of good faith.
8.4 Titles to the Sections of the Plan are included for convenience only
and shall not control the meaning or interpretation of any provision of the
Plan.
8.5 Except to the extent preempted by federal law, this Plan and the
Trust established hereunder shall be governed by and construed, enforced,
and administered in accordance with the laws of the State of New York and
the Trustee shall be liable to account only in the courts of the State of
New York.
8.6 All expenses of administering the Plan and Trust shall be borne by
the Company.
8.7 For Participants of the Plan who are subject to Section 16(b) of the
Securities Exchange Act of 1934, the Company (or such party or committee as
the Company may designate) may adopt such rules and procedures as it
considers appropriate.
