EXHIBIT 56
AMENDMENT TO
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
AGREEMENT by and between AMERICAN PRECISION INDUSTRIES INC., a
Delaware corporation with its principal office at 0000 Xxxxxx Xxxxxx, Xxxxxxx,
Xxx Xxxx 00000 (the "Company"), and XXXXXXX X. XXXXXXX (the "Employee"),
residing at 000 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxx 00000, dated as of April 24,
1998.
W I T N E S S E T H
WHEREAS, the Company and the Employee entered into an agreement entitle
the Executive Supplemental Retirement Plan (the "Plan") as of June 1, 1983, and
entered into an agreement amending and restating the Plan as of January 4, 1997;
and
WHEREAS, the Board of Directors of the Company has authorized the
following amendment to the Plan as so amended and restated, and the Employee has
agreed to the amendment,
NOW, THEREFORE, the Plan is amended as follows, effective April 24, 1998:
1. The first two lines of Schedule A to the Plan are amended to read as
follows:
SCHEDULE A
As Amended Effective as of April 24, 1998
2. Part I of Schedule A is deleted and the following paragraph is
substituted in its place:
I. Normal Retirement Benefit. The Normal Retirement Benefit as in
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effect on May 1, 1998, is $1,200,000. The Normal Retirement Benefit shall be
adjusted automatically as of May 1 of each year after 1998 to reflect changes in
the cost of living, using the following procedure:
The Normal Retirement Benefit in effect as of the immediately
preceding May 1 shall be increased or decreased by a factor derived from the
Consumer Price Index for All Urban Consumers (1982-84 = 100) published by the
United States Bureau of Labor Statistics for the month of April preceding the
date as of which the adjustment is being made. The Normal
Retirement Benefit to be used as the basis for the calculation of any benefit
payable under this Agreement is the Normal Retirement Benefit in effect as of
the May 1 preceding (of, if applicable coincident with) the date the Employee
ceases to be employed by the Company.
3. The Schedule A appended to this Agreement, which has been restated to
include the amendments described above, shall be executed and attached to the
Plan in place of the Schedule A that was designated "Effective as of January 4,
1997."
IN WITNESS WHEREOF, the Employee has executed this Agreement, and the
Company, pursuant to the authorization of its Board of Directors, has caused
this Agreement to be executed, as of the day and year first above written.
AMERICAN PRECISION INDUSTRIES INC.
By /s/ Xxxxx McH. Xxxxxxxx
-----------------------------------------------
Xxxxx McH. Xxxxxxxx
Vice President and Chief Financial Officer
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, individually
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EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
SCHEDULE A
As Amended Effective as of April 24, 1998
IV. Normal Retirement Benefit.
-------------------------
The Normal Retirement Benefit as in effect on May 1, 1998, is $1,200,000.
The Normal Retirement Benefit shall be adjusted automatically as of May 1
of each year after 1998 to reflect changes in the cost of living, using the
following procedure:
The Normal Retirement Benefit in effect as of the immediately preceding May
1 shall be increased or decreased by a factor derived from the Consumer
Price Index for All Urban Consumers (1982-84 = 100) published by the United
States Bureau of Labor Statistics for the month of April preceding the date
as of which the adjustment is being made. The Normal Retirement Benefit to
be used as the basis for the calculation of any benefit payable under this
Agreement is the Normal Retirement Benefit in effect as of the May 1
preceding (of, if applicable coincident with) the date the Employee ceases
to be employed by the Company.
V. After-Tax Rate
--------------
The After-Tax Rate is the percentage that is the remainder after the
subtraction from (i) 100 percent of (ii) the effective marginal tax rate
applicable to the Employee on the date as of which a calculation is being
made. The Company shall determine the effective marginal tax rate
applicable to the Employee as of the calculation date, taking into account
federal, state, and local income tax rates; the hospital insurance tax rate
under the Federal Insurance Contribution Act; the deduction (for income tax
purposes) for state and local income taxes; and no income other than income
attributable to the Company. An amount shall be converted to an after-tax
amount by multiplying it by the After-Tax Rate in effect for the
calculation date.
VI. Applicable Annual Rate
----------------------
The Applicable Annual Rate is the annual rate of interest determined for a
given calendar year as follows: For each calendar year, the Company shall
obtain quotes from the Guardian Life Insurance Company and two other A+
rated life insurance companies on the single premium that would be required
in January of that year to purchase an
immediate annuity policy paying a fixed monthly benefit for a term certain
of 180 months. The premiums quoted shall be translated into discount rates.
The highest of the three discount rates shall be the Applicable Annual Rate
in effect for calculations made as of any date during the given calendar
year.
AMERICAN PRECISION INDUSTRIES INC.
by /s/ Xxxxx McH. Xxxxxxxx
--------------------------------------------
Xxxxx McH. Xxxxxxxx,
Vice President and Chief Financial
Officer
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
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