Right Management Consultants, Inc.
Plan Document and SERP Agreement
Right Management Consultants, Inc.
Supplemental Executive Retirement Plan ("SERP")
Table of Contents
Section 1 - Statement of Purpose 2
Section 2 - Definitions 2
Section 3 - Eligibility and Participation 4
Section 4 - Retirement Benefit 5
Section 5 - Survivor Benefit 6
Section 6 - Change in control; Termination of Employment 6
Section 7 - Disability Benefit and Authorized Leave of Absence 7
Section 8 - Restrictive Covenant 7
Section 9 - Administration 8
Section 10 - Company-Owned Life Insurance ("COLI") 9
Section 11 - Miscellaneous 9
Section 12 - Construction 11
Exhibit A - Specimen SERP Agreement 13
Exhibit B - Board of Directors Plan Summary 15
Exhibit C - Board of Directors Adoption Resolution 17
Exhibit D - Participant Beneficiary Designation 18
Exhibit E - U.S. Department of Labor Notification 19
Exhibit F - Proxy Disclosure 20
1
Section 1 - Statement of Purpose
This Plan (as herein defined) is designed and implemented for the purpose of
providing to a limited group of key management or highly compensated employees
of the Company (as herein defined) who are largely responsible for the Company's
success the opportunity to receive deferred compensation in the form of
supplemental executive retirement benefits, thereby increasing the incentive for
such key employees to remain in the employ of the Company and to make the
Company more profitable. Special payments shall be made to Participants (as
herein defined) upon retirement or death and are intended to provide
Participants with additional financial security.
Section 2 - Definitions
2.1 "Accrued Benefit" means a Participant's retirement benefit, as described in
Section 4 hereof.
2.2 "Actuarial Equivalent" means, with respect to a given benefit, any other
benefit provided under the terms of the Plan which has the same present or
equivalent value on the date the given benefit payment commences, based on the
use of actuarial equivalent factors adopted by the Company and being used to
value the Plan liabilities at the time of the calculation.
2.3 "Beneficiary" means any person or persons designated by a Participant in
writing on a form satisfactory to the Company. In the absence of any living
designated beneficiary, a deceased Participant's Beneficiary shall be the
deceased Participant's then living spouse, if any, for his or her life; if none,
or from and after such spouse's death, then the living children of the deceased
Participant, if any, in equal shares, for their joint and survivor lives; and if
none, or after their respective joint and survivor lives, the estate of the
deceased Participant.
2.4 "Board" means the Board of Directors of the Company, or any committee of
such Board that is authorized to oversee, administer and amend the Plan.
2.5 "Change of Control" means the purchase or other acquisition by any person,
entity or group of persons, within the meaning of section 13(d) or 14(d) of the
Securities Exchange Act of 1934 (hereinafter called "Act"), or any comparable
successor provisions, of beneficial ownership (within the meaning of Rule 13e-3
promulgated under the Act) of 30-percent or more of either the outstanding
shares of common stock or the combined voting power of the Company's then
outstanding voting securities entitled to vote generally, or the approval by the
shareholders of the Company of a reorganization, merger, or consolidation, in
each case, with respect to which persons who were shareholders of the Company
immediately prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than 50-percent of the combined voting power
entitled to vote generally in the election of directors of the reorganized,
merged or consolidated the Company's then outstanding securities, or a
liquidation or dissolution of the Company or of the sale of all or substantially
all of the Company's assets.
2.6 "Company" means Right Management Consultants, Inc., including any
subsidiaries, successors and assigns thereto. The Company is a corporation.
2
2.7 "Disability" means a physical or mental condition of a Participant resulting
from bodily injury, disease or mental disorder, which renders him or her
incapable of continuing his or her usual and customary employment with the
Company. The Disability of a Participant shall be determined by a licensed
physician selected by the Company.
2.8 "Early Retirement Date" means a date on which a Participant retires from the
Company on or after attaining age fifty-five (55) and at least one (1) year of
Participation in the Plan, then having completed at least ten (10) years of
employment service with the Company.
2.9 "Effective Date" means December 31, 1999.
2.10 "High Average Recognized Compensation" means the Recognized Compensation
(as defined herein) of a Participant for each of the three (3) consecutive
calendar years of his or her employment service with the Company which produce
the highest annual average. If a Participant has been in the employ of the
Company for more than one (1) calendar year but less than three (3) calendar
years, then the High Average Recognized Compensation for that Participant shall
be based upon that Participant's actual calendar years of service. If a
Participant has served with the Company for less than one (1) year, then the
High Average Recognized Compensation for that Participant shall be equal to the
Participant's Recognized Compensation.
2.11 "Normal Retirement Date" means the date on which a Participant retires from
the Company on or after attaining age sixty-five (65) and at least one (1) year
of Participation in the Plan.
2.12 "Participant" means an employee of the Company selected by the Board for
participation in the Plan in accordance with Section 3 hereof, and who has not
for any reason become ineligible to participate further in this Plan. An
individual shall be deemed to continue as a Participant until all benefits
payable to the Participant under this Plan have been distributed.
2.13 "Plan" means the Right Management Consultants, Inc. Supplemental Executive
Retirement Plan ("SERP") as contained in this document, including all amendments
thereto.
2.14 "Plan Year" means the twelve month period commencing on January 1 of each
year and ending the following December 31.
2.15 "Recognized Compensation" means the annual compensation level to be used
for purposes of the Plan in determining the amount of benefits to which a
Participant is entitled. Each Participant's Recognized Compensation shall be
that amount listed in that Participant's SERP Agreement (as herein defined).
2.16 "SERP Agreement" means a written agreement between a Participant and the
Company in substantially the form attached hereto as Exhibit A.
2.17 "Termination for Cause" means the termination of a Participant's employment
with the Company for any one or more of the following reasons: (a) embezzlement
or theft from the Company, or other acts of dishonesty in dealing with the
Company; (b) use by the Participant of alcohol, drugs, narcotics, or other
controlled substances to such an extent that the Participant's ability to
perform his or her duties as an employee of the Company is materially impaired;
(c) conviction of a crime amounting to a felony under the laws of the United
States of America or any of the several states; (d) when the seriousness of an
initial infraction is of such gravity that termination is warranted; or, (e)
when prior attempts through corrective counseling have failed to
3
improve performance, attendance, conduct or any combination thereof. The
determination of whether or not there has been a Termination for Cause shall be
made by the Board provided that, if the terminated Participant is a member of
the Board, he or she shall not participate in the determination.
2.18 "Year of Service" means a period of twelve consecutive months during which
a Participant is employed by the Company. Unless otherwise provided in his or
her SERP Agreement, in determining a Participant's Years of Service, he or she
shall receive credit for service from and after his or her most recent
employment commencement date.
Section 3 - Eligibility and Participation
3.1 Eligibility. The Board, in its sole discretion, shall select the employees
of the Company who are eligible to become Participants. The Board, in its sole
discretion, shall designate for each selected Participant, whether he or she
shall be a Category 1 or a Category 2 Participant.
3.2 Participation. The Board, or its designee shall notify those employees
selected for participation of the Category they have been selected for and of
the benefits available under the Plan. An eligible employee becomes a
Participant in the Plan upon the execution and delivery by him or her and the
Company of a SERP Agreement. Thereafter, a Participant shall remain a
Participant as long as he or she is continuously employed by the Company.
3.3 Suicide. Notwithstanding any other term or provision of this Plan or any
SERP Agreement, this Plan and the applicable SERP Agreement shall be void and of
no force or effect with respect to any Participant who dies by reason of suicide
within two (2) years after the date of his or her SERP Agreement, and no benefit
of any kind shall be payable under this Plan to such Participant, his or her
Beneficiary or any other person claiming under him or her.
4
Section 4 - Retirement Benefit
4.1 Normal Retirement Benefit. If a Participant is continually employed by the
Company until his or her Normal Retirement Date, he or she shall be entitled to
receive as a normal retirement benefit annual payments equal to that percentage
of his or her High Average Recognized Compensation specified in his or her SERP
Agreement. This normal retirement benefit shall be payable in equal monthly
installments commencing on the first day of the month following the
Participant's Normal Retirement Date and continuing for the remainder of the
Participant's life. Upon attaining a Participant's Normal Retirement Date, a
Participant shall be 100% vested in his or her normal retirement benefit. The
percentage of his or her High Average Recognized Compensation shall be
determined as follows:
4.1.a. A Category 1 Participant's normal retirement benefit shall be equal to
40% of his or her High Average Recognized Compensation.
4.1.b. A Category 2 Participant's normal retirement benefit shall be equal to
20% of his or her High Average Recognized Compensation, reduced
proportionately for total service less than 20 years, and for Plan
participation less than 5 years.
4.2 Early Retirement Benefit. If a Participant is employed by the Company until
his or her Early Retirement Date, he or she shall be entitled to receive an
early retirement benefit equal to the Actuarial Equivalent amount of his or her
Accrued Benefit which is vested, in accordance with Section 6.2, at such Early
Retirement Date. This early retirement benefit shall be payable in equal monthly
installments commencing on the first day of the month following the
Participant's actual retirement, continuing for the remainder of the
Participant's life.
4.3 Death After Commencement of Retirement Benefit. If a Participant should die
prior to the completion of one-hundred-twenty (120) monthly payments, such
monthly payments shall be continued to the Participant's Beneficiary until the
completion of one-hundred-twenty (120) combined monthly payments.
4.4 Alternate Form of Payment. The Company may, in its sole and absolute
discretion, approve a retiring Participant's request of an alternate form of
payment of the benefit, in which case such payments shall be in the amount of
the Actuarial Equivalent of the normal form of benefit hereunder.
4.5 Forfeiture of Benefits. Notwithstanding the foregoing provisions of this
Section 4, a Participant shall forfeit all benefits under the Plan if his or her
employment with the Company terminates by reason of a Termination for Cause or
if he or she violates the restrictive covenant set forth in Section 8 hereof.
5
Section 5 - Survivor Benefit
5.1 Survivor Benefit. If a Participant dies while employed by the Company, the
Company shall pay to the Beneficiary of the Participant the survivor benefit
specified in the Participant's SERP Agreement. This survivor benefit shall be
equal to that percentage of his or her Recognized Compensation specified in his
or her SERP Agreement. .
Section 6 -Change in Control; Termination of Employment
6.1 Termination Benefit. If a Participant terminates employment with the Company
prior to attaining his or her Early Retirement Date, other than by reason of
death or Disability, said Participant shall be entitled to his or her vested
percentage of his or her Accrued Benefit as determined in Section 6.2 herein,
payable commencing upon the Participant's attaining Normal Retirement Date.
6.2 Vested Percentage. (1) A Participant's vested percentage shall be determined
in accordance with the following schedule:
(A) Category 1 Participants - The vested percentages shall be 5% for each year
of service with the Company plus 10% for each year of Plan participation.
For example, if prior to reaching his Early Retirement Date a Category 1
employee terminates employment with 5 years of total service with the
Company and 3 years of Plan participation, the employee would be 55% vested
(5 times 5% plus 3 times 10%)
(B) Category 2 Participants.
Completed Years of Plan Participation Participant Vested Percentage
1 20.00
2 40.00
3 60.00
4 80.00
5 or more 100.00%
(2) If a Participant terminates employment with the Company prior to attaining
his or her Early Retirement Date by reason of a Termination for Cause, he or she
shall not be entitled to any benefits under the Plan.
6.3 Change of Control (1) Notwithstanding anything to the contrary herein, upon
a Change of Control of the Company, then, for purposes of this Plan, for each of
the individuals who was a Participant in the Plan and employed by the Company
immediately prior to such change, it shall be deemed that the Participant has
remained in the employ of the Company and continued as a participant in the Plan
until the earlier to occur of: (a) the Participant's death; or (b) the
Participant's attaining his or her Normal Retirement Date. In such case, the
Participant, at his or her sole discretion, shall be entitled to commence
receipt of the Actuarial Equivalent amount of his or her normal retirement
benefit at any time after termination of employment.
6
Furthermore, if at the time a Change of Control occurs, the Company had
established a trust in accordance with Section 9.5 hereof, the Company shall be
required to transfer cash and/or other assets to said trust in an amount equal
to the discounted present value of all of the future benefits payable hereunder
to the Participants or Beneficiaries. The discount rate shall be the 5-Year
United States Treasury Note rate as published on the first day of the month
immediately preceding the date on which the determination is made, compounded
annually. If these rates are no longer published, the discount rate shall be
some other similar average selected by the Board in its sole discretion. The
provisions of this paragraph 6.3 shall not apply to any transaction where the
Executive Officers, as designated by the Company, immediately prior to the
Change of Control own 20% or more of the entity after the transaction.
Section 7 - Disability Benefit and Authorized Leave of Absence
7.1 Disability Benefit. Notwithstanding anything to the contrary herein, if a
Participant's employment with the Company is terminated prior to attaining his
or her Early Retirement Date as a result of the Participant's Disability, then,
for purposes of this Plan, it shall be deemed that the Participant has remained
in the employ of the Company until the earliest to occur of: (a) the
Participant's death; (b) the Participant's attaining his or her Early Retirement
Date; or (c) the cessation of the Participant's Disability and the failure of
the Participant to return to active employment with the Company within a
reasonable time after recovery from the Disability.
7.2 Authorized Leave of Absence. A Participant's employment with the Company
shall not be deemed to have terminated for purposes of this Plan during any
authorized leaves of absence.
Section 8 - Restrictive Covenant
8.1 Restrictive Covenant. It shall be a condition to the payment of benefits
under this Plan that, during the first one-year period after termination of
employment or retirement, the Participant does not own, manage, operate, join,
control, be employed by, or participate in the ownership, management, operation,
or control of, or be connected in any manner with, any business that is then in
competition with the Company. If there is a failure of this condition, the
Company may immediately cease all further payments to the Participant under the
Plan, and the Participant and his or her Beneficiary shall be deemed to have
forfeited all further payments otherwise payable.
7
Section 9 - Administration
9.1 General. The Plan shall be administered by the Board or its designee. The
Board shall have the authority, subject to the terms of the Plan, to construe
the provisions of the Plan and to adopt rules and regulations and make all
determinations necessary or advisable for the administration of the Plan. The
Board shall make all determinations as to rights to benefits under the Plan. No
member of the Board shall be liable for any action of determination made in good
faith with respect to the Plan or any SERP Agreement. Any decision by the Board
denying a claim by a Participant or a Beneficiary for benefits under the Plan
shall be stated in writing and delivered or mailed to the Participant or
Beneficiary at his or her last known address. Such decision shall set forth the
specific reasons for the denial of benefits. In addition, the Board shall afford
a reasonable opportunity to the Participant or Beneficiary for a full and fair
review of the decision denying such claim.
9.2 Participant Statement. The Company shall provide each Participant on an
annual basis with a statement showing that Participant's current and projected
Survivor Income Benefit (as defined herein) and Retirement Benefit (as defined
herein) under the Plan.
9.3 Interpretation. The interpretation and construction of the Plan by the
Board, and any action taken hereunder, shall be binding and conclusive upon all
parties in interest. No member of the Board shall be liable to any person for
any action taken or omitted to be taken in connection with the interpretation,
construction or administration of the Plan, so long as such action or omission
be made in good faith.
9.4 Authority to appoint a Committee. The Board, within its discretion, shall
have the authority to appoint a committee of not less than three (3) of its
members which shall have authority over the Plan in lieu of the entire Board.
9.5 Authority to establish a Trust. The Board shall have the right at any time
to establish a trust to which the Company may transfer from time to time certain
assets to be used by said trustee(s) to satisfy some or all of the Company's
obligations and liabilities under the Plan. All assets held by such trust shall
be subject to the claims of the Company's creditors in the event of the
Company's Insolvency (as defined herein). The Company shall be considered
"Insolvent" for purposes of said trust if: (a) the Company is unable to pay its
debts as they become due; and (b) the Company is subject to a pending proceeding
as a debtor under the United States Bankruptcy Code.
9.6 Prepayment. The Board may, in its sole and absolute discretion, prepay all
or any part of the monthly installments remaining to be paid to the Participant
or the Beneficiary under this Plan. The amount of such prepayment shall equal
the Actuarial Equivalent of the remaining monthly installments being prepaid, as
determined by the Board in its discretion, and receipt thereof by the
Participant or Beneficiary shall be in full satisfaction of all remaining
obligations of the Company under the Plan and applicable SERP Agreement.
8
9.7 Amendment and Termination of the Plan. The Company reserves the right, at
any time and from time to time, by action of the Board, to amend or terminate
the Plan. Notwithstanding the foregoing, no such amendment or termination shall
reduce (a) the benefits (including survivor benefits) of a Participant (or
Beneficiary) to whom payments under this Plan had then commenced, or (b) the
benefits (including survivor benefits) of a Participant who has then attained
his or her Early Retirement Date, or (c) the benefits (including survivor
benefits) of a Participant whose employment with the Company has been
terminated. In addition, each other Participant employed by the Company on the
date of such amendment or termination shall be entitled to benefits (including
survivor benefits) under this Plan, at such time as such benefits would have
been paid absent such amendment or termination, in an amount equal to the amount
that would have been paid under the Plan if he or she had terminated employment
on the day immediately preceding the date of such amendment or termination of
the Plan.
Section 10 - Company-Owned Life Insurance ("COLI")
10.1 Company Owns All Rights. In the event that, in its discretion, the Company
purchases a life insurance policy or policies insuring the life of any
Participant to allow the Company to informally finance and/or recover, in whole
or in part, the cost of providing the benefits hereunder, neither the
Participant nor any Beneficiary shall have any rights whatsoever therein. The
Company shall be the sole owner and beneficiary of any such policy or policies
and shall possess and may exercise all incidents of ownership therein, except in
the event of the establishment of and transfer of said policy or policies to a
trust by the Company as described in Section 9 hereof.
10.2 Participant Cooperation. If the Company decides to purchase a life
insurance policy or policies on any Participant, the Company will so notify each
Participant. Each Participant shall consent to being insured for the benefit of
the Company and shall take whatever actions may be necessary to enable the
Company to timely apply for and acquire such life insurance and to fulfill the
requirements of the insurance carrier relative to the issuance thereof as a
condition of eligibility to participate in the Plan.
10.3 Participant Misrepresentation. If: (a) any Participant is required by this
Plan to submit information to any insurance carrier; and (b) the Participant
makes a material misrepresentation in any application for such insurance; and
(c) as a result of that material misrepresentation the insurance carrier is not
required to pay all or any part of the proceeds provided under that insurance,
then the Participant's (or the Participant's Beneficiary's) rights to any
benefits under this Plan may be, at the sole discretion of the Board, reduced in
proportion to the reduction of proceeds that is paid by the insurance carrier
because of such material misrepresentation.
Section 11 - Miscellaneous
11.1 Nonalienation of Benefits. No right or benefit under this Plan shall be
subject to anticipation, alienation, sale, assignment, pledge, encumbrance, or
charge, and any attempt to
9
anticipate, alienate, sell, assign, pledge, encumber, or charge any right or
benefit under this Plan or any SERP Agreement shall be void. No such right or
benefit shall in any manner be liable for or subject to the debts, contracts,
liabilities or torts of the person entitled thereto. If a Participant or any
Beneficiary hereunder shall become bankrupt, or attempt to anticipate, alienate,
sell assign, pledge, encumber, or charge any right hereunder, then such right or
benefit shall, in the discretion of the Board, cease and terminate, and in such
event, the Board may hold or apply the same or any part thereof for the benefit
of the Participant or his or her Beneficiary, spouse, children, or other
dependents, or any of them in such manner and in such amounts and proportions as
the Board may deem proper.
11.2 Unsecured Company Liability. The obligation of the Company to make payments
hereunder to a Participant shall constitute an unsecured liability of the
Company. Such payments shall be made from the general funds of the Company, and
the Company shall not be required to establish or maintain any special or
separate fund, to purchase or acquire life insurance on a Participant's life, or
otherwise to segregate assets to assure that such payments shall be made.
Neither a Participant nor any other person shall have any interest in any
particular asset of the Company by reason of its obligations hereunder, and the
right of any of them to receive payments under this Plan shall be no greater
than the right of any other unsecured general creditor of the Company. Nothing
contained in the Plan shall create or be construed as creating a trust of any
kind or any other fiduciary relationship between the Company and a Participant
or any other person.
11.3 No Employment Agreement. Neither the execution of this Plan or any SERP
Agreement nor any other action taken by the Company pursuant to this Plan shall
be held or construed to confer on a Participant any legal right to be continued
as an employee of the Company or to restrict the right of the Company to
terminate his or her employment.
11.4 Designation of Beneficiary. Each Participant shall file with the Company a
notice in writing, in a form acceptable to the Board, designating one or more
Beneficiaries to whom payments becoming due by reason of or after his or her
death shall be made. Participants shall have the right to change the Beneficiary
or Beneficiaries so designated from time to time; provided, however, that no
such change shall become effective until received in writing and acknowledged by
the Company.
11.5 Payment to Incompetents. The Company shall make the payments provided
herein directly to the Participant or Beneficiary entitled thereto or, if such
Participant or Beneficiary has been determined by a court of competent
jurisdiction to be mentally or physically incompetent, then payment shall be
made to the duly appointed guardian, committee or other authorized
representative of such Participant or Beneficiary. The Company shall have the
right to make payment directly to a Participant or Beneficiary until it has
received actual notice of the physical or mental incapacity of such Participant
or Beneficiary and actual notice of the appointment of a duly authorized
representative of his or her estate. Any payment to or for the benefit of a
Participant or Beneficiary shall be a complete discharge of all liability of the
Company therefore.
11.6 Claims for Benefits. Each Participant or other person claiming any benefit
under this Plan must give written notification thereof to the Company. If a
claim is denied, it must be denied within a reasonable period of time, and be
contained in a written notice stating the following: (a) the specific reason for
the denial; (b) specific reference to the Plan provision on which the denial is
based; (c) description of additional information necessary for the claimant to
10
present his or her claim, if any, and an explanation of why such material is
necessary; (d) an explanation of the Plan's claims review procedure. The
claimant will have 60 days to request a review of any denial by the Board. The
request for review must be in writing and delivered to the Board, which will
then provide a full and fair review. The claimant may review pertinent
documents, and he or she may submit issues and comments in writing. The decision
by the Board with respect to the review must be given within 60 days after
receipt of the request, unless special circumstances require an extension (such
as for a hearing). In no event shall the decision be delayed beyond 120 days
after receipt of the request for review. The decision shall be written in a
manner calculated to be understood by the claimant, and it shall include
specific reasons and refer to specific Plan provisions on which it is based.
11.7 Binding Effect. Obligations incurred by the Company pursuant to this Plan
shall be binding upon and inure to the benefit of the Company, its successors
and assigns, and the Participant, his or her Beneficiaries, personal
representatives, heirs, and legatees.
11.8 Entire Plan. This document and any amendments hereto contain all the terms
and provisions of the Plan and shall constitute the entire Plan, any other
alleged terms or provisions being of no effect.
11.9 Merger, Consolidation or Acquisition. In the event of a merger or
consolidation of the Company with another corporation or entity, or the
acquisition of the outstanding stock of the Company by another corporation or
entity, then and in such event the obligation and responsibilities of the
Company under this Plan shall be assumed by any such successor or acquiring
corporation or entity, and all of the rights, privileges and benefits of the
Participant hereunder shall continue.
11.10 Enforceability. If any term or condition of this Plan shall be invalid or
unenforceable to any extent or in any application, then the remainder of the
Plan, and such term or condition except to such extent or in such application,
shall not be affected thereby, and each and every term and condition of the Plan
shall be valid and enforced to the fullest extent and in the broadest
application permitted by law.
Section 12 - Construction
12.1 Governing Law. This Plan shall be construed and governed in accordance with
the laws of the Commonwealth of Pennsylvania.
12.2 Gender. The masculine gender, where appearing in the Plan, shall be deemed
to include the feminine gender, and the singular may include the plural, unless
the context clearly indicates to the contrary.
12.3 Headings, etc. All headings used in this Plan are for convenience of
reference only and are not part of the substance of this Plan.
IN WITNESS WHEREOF, this Plan, having been duly approved and adopted by the
Board of Directors of the Company, is executed by the duly authorized officers
of the Company as of the Effective Date.
11
Right Management Consultants, Inc.
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Chairman and Chief Executive Officer
{Name and Title}
(Corporate Seal)
Attest:
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary
