TYCO INTERNATIONAL LTD.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(a) The name of this plan is the Tyco International Ltd. Supplemental
Executive Retirement Plan. The Plan is intended to make up for contributions
that cannot be made on behalf of certain key employees under the Savings Plan by
reason of the Limitations. The Plan shall be construed consistent with the
purposes described herein, including without limitation, the anti-conditioning
rules of Section 401(k)(4) of the Code.
(b) The Plan is intended to be "a plan which is unfunded and is
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees"
within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.
2. Definitions. Wherever used herein, the following terms have the
meanings set forth below, unless a different meaning is clearly required by the
context. Any capitalized term not defined herein shall have the meaning given
to it in the Savings Plan.
(a) "Account" means the bookkeeping account maintained for each
Participant to which amounts credited on behalf of the Participant under Section
3 shall be recorded.
(b) "Affiliated Entity" means any entity considered to be in the same
controlled group (within the meaning of Section 302(d)(8)(C) of ERISA) as Tyco
(c) "Beneficiary" means the individual(s) designated by the
Participant to receive any benefits due upon or after his or her death pursuant
to Section 8. In the absence of an effective Beneficiary designation at the
time of the Participant's death, the Participant's Beneficiary shall be his or
her spouse, or if the Participant does not have a spouse at the date of his or
her death, then to the Participant's executors or administrators.
(d) "Board of Directors" means the Board of Directors of Tyco
(e) "Code" means the Internal Revenue Code of 1986, as amended, and
any successor code, and related rules, regulations and interpretations.
(f) "Company" means Tyco International Ltd. and any successor to all
or a major portion of its assets or business which assumes the obligations of
Tyco International Ltd.
(g) "Compensation" means, with respect to any Participant, direct
cash compensation paid during the calendar year to that Participant by the
Company or an Affiliated Entity for services rendered, including salaries,
commissions and bonuses, in each case as determined by the Committee, and
including any amount which would have been paid to the Participant but for an
election under the Savings Plan or the Company's Deferred Compensation Plan, or
a cafeteria plan under Section 125 of the Code, but excludes any amounts paid
from this Plan or the Company's Deferred Compensation Plan, income from the
exercise of non-qualified stock options or from the disqualifying disposition of
incentive stock options, income realized when restricted stock becomes fully
transferable or is no longer subject to a substantial risk of forfeiture,
reimbursement for moving expenses and other relocation expenses, mortgage
interest differentials, payment for reimbursement for taxes, international
assignment premiums, allowances and any other reimbursements.
(h) "Committee" means the Company's Retirement Committee.
(i) "Disability" means a Participant's permanent and total incapacity
of engaging in any employment for the Company or any Affiliated Entity for
physical or mental reasons. Disability shall be deemed to exist only when such
Participant meets either the requirements for disability benefits under the
Social Security law then in effect, or the requirements for disability benefits
under a long-term disability plan maintained by the Company or an Affiliated
(j) "Eligible Employee" means each employee of the Company or an
Affiliated Entity with Compensation equal to the limit imposed by Section
401(a)(17) of the Code ($150,000 for 1995) or greater. With regard to the credit
provided by the Section 3(c), the term "Eligible Employee" also means each
Kendall employee who is precluded from receiving the supplemental employer
matching contributions under the terms of the Savings Plan. Notwithstanding the
foregoing, the term "Eligible Employee" does not include an employee who is
covered by an agreement that provides for supplemental retirement benefits or an
employee who is covered by an agreement which provides for severance from
(k) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended and any successor statute, and related rules, regulations and
(l) "Kendall" means The Kendall Company.
(m) "Kendall Plan" means The Kendall Employees' Savings and
(n) "Limitations" means the limitations imposed under Sections
401(a)(17) and 415 of the Code.
(o) "Participant" means any Eligible Employee designated by the
Committee to participate in the Plan. Notwithstanding the foregoing, any
individual who was a Participant in a prior Plan Year but who ceases to be an
Eligible Employee shall continue to be a Participant so long as amounts remain
credited to his or her Account, but he or she shall cease to be a Participant
for purposes of receiving Participant Credits under Section 3.
(p) "Plan" means the Tyco International Ltd. Supplemental Executive
(q) "Plan Year" means the twelve-month period ending on each
(r) "Quarter" means each of the three-month periods ending on March,
June, September and December in each Plan Year.
(s) "Retirement" or "Retires" shall mean severance from employment
from the Company and all Affiliated Entities for any reason other than a leave
of absence or death on or after the earlier of the attainment of (i) age 65 or
(ii) age 55 and ten Years of Service.
(t) "Savings Plan" means the Tyco International Ltd. Retirement
Savings and Investment Plan.
(u) "Year of Service" means each "Year of Vesting Service" credited
to the Participant under the Savings Plan.
3. Participant Credits.
(a) Effective as of the last day of each Quarter, the Company shall
credit to each Participant's Account an amount equal to the maximum employer
matching contributions which would have been credited to the account of the
Participant under the Savings Plan pursuant to the plan formula contained
therein, but utilizing the definition of "Compensation" used in this Plan and
disregarding the Limitations, regardless of the Participant's actual level of
participation in the Savings Plan, less the maximum employer matching
contributions permitted by the Limitations.
(b) With respect to each Participant who is a Kendall employee,
effective as of July 1, 1995, the Company shall credit to such Participant's
Account an amount equal to the maximum employer matching contributions which
would have been credited to the account of the Participant under the Kendall
Plan for the period July 1, 1995 through December 31, 1995 pursuant to the plan
formula contained therein (but without regard to the plan provision precluding
certain employees from receiving the supplemental match) and utilizing the
definition of "Compensation" used in the Kendall Plan and disregarding the
Limitations, regardless of the Participant's actual level of participation in
the Kendall Plan, less the sum of the maximum employer matching contributions
permitted by the Limitations for the same period and the amount credited to the
Participant's cash balance account in The Kendall Company and Subsidiaries
Pension Plan for the period January 1, 1995 through June 30, 1995. Such credit
shall be made as of the last day of each Quarter beginning July 1, 1995 and
October 1, 1995.
(c) With respect to each Participant who is a Kendall employee and
who is precluded by the terms of the Kendall Plan from receiving a supplemental
employer matching contribution, the Company shall credit to such Participant's
Account an amount equal to the maximum supplemental employer matching
contributions (i.e., the additional employer matching contributions for
participants with ten or more Years of Service) which would have been credited
to the account of such Participant under the Kendall Plan for the period July 1,
1995 through December 31, 1995 but for such preclusion. Such credit shall be
made as of the last day of each Quarter beginning July 1, 1995 and October 1,
(d) Notwithstanding the foregoing, the Company reserves the right to
adjust the credits to any Participant's Account if the Participant's
Compensation for the Plan Year is less than the limit imposed by Section
401(a)(17) of the Code.
4. Crediting Earnings and Losses.
(a) Except as otherwise provided in Section 7(c) with respect to
installment payments, as of the last day of each Quarter and as of any other
date designated by the Committee for the revaluation and adjustment of Accounts,
each Participant's Account shall be adjusted to reflect an amount of earnings or
losses to be credited on the amount previously credited to such Account. The
Committee shall, from time to time and in its sole discretion select one or more
investment vehicles to be used as the measuring standards for crediting earnings
or losses standing to the credit of each Participant. The earnings or losses to
be credited to each Participant's Account for any period shall be equivalent to
the amount of earnings or losses which would have been credited to the Account
if such Account had actually been invested in such vehicle during such period.
(b) Notwithstanding the foregoing, the Committee may change the
method of crediting earnings or losses to Accounts under the Plan, by written
notice to each Participant, which notice shall specify the new method for
crediting earnings or losses to be used and the effective date of such change.
(a) A Participant shall become fully vested in the full value of the
amount credited to his or her Account upon attainment of age 55, death,
Disability, or completion of at least five Years of Service.
(b) A Participant whose employment with the Company or any Affiliated
Entity terminates prior to attainment of age 55 (for any reason other than death
or Disability) with fewer than five Years of Service will forfeit all amounts in
his or her Account upon his or her termination of employment.
6. Timing of Distribution
Upon initial enrollment in the Plan, a Participant shall irrevocably elect
on a form prescribed by the Company to commence distribution of his or her
vested Account balance either (a) upon his or her Retirement or other
termination of employment, or (b) in any calendar year that is at least five
years from initial participation in the Plan as may be selected by the
Participant, but not later than the year in which the Participant attains age 70
(the "Distribution Year"). If no election is made, the distribution will
commence upon the Participant's termination of employment.
7. Method of Distribution
(a) Upon initial enrollment in the Plan, a Participant shall
irrevocably elect on a form prescribed by the Company to receive his or her
vested Account balance pursuant to one of the following payment options:
(i) A single lump sum to be paid within 60 days following the
quarter in which the Participant Retires or otherwise
terminates his or her employment with the Company or an
Affiliated Entity or within the first 60 days of the
(ii) Annual equal installments over a period not to exceed 15
years, beginning no later than 60 days of the calendar year
next following the year in which the Participant Retires or
otherwise terminates his or her employment with the Company
or an Affiliated Entity or March 1 of the Distribution Year.
If no election is made, the distribution will be made in a lump sum
pursuant to (i) above.
(b) All amounts credited to each Participant's Account which become
payable hereunder shall be paid by the Company or an Affiliated Entity in cash.
Each such Account shall be charged with the amount distributed with respect
thereto as of the date of payment.
(c) In the event a benefit is paid in installments, installment
payment amounts shall be determined in the following manner:
(i) The interest rate to be used to calculate installment
payment amounts shall be a fixed interest rate that is
determined by averaging the rates of earnings or losses for
the five Plan Years preceding the initial year of
distribution. If a Participant has participated in the Plan
for fewer than five Plan Years, this average shall be
determined by averaging the rates of earnings or losses for
the Plan Years during which he or she participated in the
(ii) Based on the interest rate determined in (i) above, the
Participant's Account balance shall be amortized in equal
annual installment payments over the term of the specified
8. Payments Upon Death.
(a) In the event of a Participant's death prior to his or her
termination of employment with the Company or an Affiliated Entity, the full
value of the amount credited to the Participant's Account shall be paid to the
Participant's Beneficiary in a single lump sum as soon as practicable after such
(b) In the event of a Participant's death after his or her
termination of employment but before full distribution of the amounts to be paid
to him or her pursuant to Section 7 has been completed, the value of the amounts
payable under Section 7 shall be paid to the Participant's Beneficiary in a
single lump sum as soon as is practicable after such Participant's death.
(c) Each Participant may designate, from time to time, a Beneficiary
or Beneficiaries (who may be named contingently or successively) to whom any
amounts which remain credited to the Participant's Account at the time of his or
her death shall be paid. Each such designation shall revoke all prior
designations by the same Participant, except to the extent otherwise
specifically noted, shall be in a form prescribed by the Company and shall be
effective only when filed by the Participant in writing with, and acknowledged
by, the Company during his or her lifetime.
9. No Funding Required.
(a) Nothing in this Plan will be construed to create a trust or to
obligate the Company or any other person to segregate a fund, purchase an
insurance contract, or in any other way to fund currently the future payment of
any benefits hereunder, nor will anything herein be construed to give any
Participant or any other person rights to any specific assets of the Company or
of any other person. Except as described in (b) below, any benefits which
become payable hereunder shall be paid from the general assets of the Company.
(b) The Company in its sole discretion may establish a grantor or
other trust of which the Company is treated as the owner under the Code, to
provide for the payment of benefits hereunder, subject to the claims of the
Company's general creditors in the event of insolvency, and subject to such
other terms and conditions as the Company may deem necessary or advisable to
ensure (i) that benefits are not includible, by reason of the establishment or
funding of such trust, in the income of trust beneficiaries prior to actual
distribution and (ii) that the existence of such trust does not cause the Plan
or any other arrangement to be considered funded for purposes of Title I of
10. Plan Administration and Interpretation. The Company shall have
complete control over the administration of the Plan and complete control and
authority to determine, in its sole discretion, the rights and benefits and all
claims, demands and actions arising out of the provisions of the Plan of any
Participant, Beneficiary, or other person having or claiming to have any
interest under the Plan and the Company's determinations shall be conclusive and
binding on all such parties. The Company shall be deemed to be the Plan
Administrator with the responsibility for complying with any reporting and
disclosure requirements of ERISA. The rights of the Company hereunder shall be
exercised by the Committee. To the extent that the Committee is unable or
unwilling to exercise any right hereunder or make any determination hereunder,
however, the Board of Directors shall exercise such right or make such
11. Claims Procedure.
(a) Any Participant or Beneficiary of a deceased Participant (such
Participant or Beneficiary being referred to below as a "Claimant") may deliver
to the Committee a written claim for a determination with respect to the amounts
distributable to such Claimant from the Plan. If such a claim relates to the
contents of a notice received by the Claimant, the claim must be made within 60
days after such notice was received by the Claimant. All other claims must be
made within 180 days of the date on which the event that caused the claim to
arise occurred. The claim must state with particularity the determination
desired by the Claimant.
(b) The Committee shall consider a Claimant's claim within 90 days,
and shall notify the Claimant in writing:
(i) that the Claimant's requested determination has been made,
and that the claim has been allowed in full; or
(ii) that the Committee has reached a conclusion contrary, in
whole or in part, to the Claimant's requested determination, and such notice
must set forth in a manner calculated to be understood by the Claimant:
(A) the specific reason(s) for the denial of the claim, or
any part of it;
(B) specific reference(s) to pertinent provisions of the
Plan upon which such denial was based;
(C) a description of any additional material or information
necessary for the Claimant to perfect the claim, and an explanation of why such
material or information is necessary; and
(D) an explanation of the claim review procedure set forth
in this Section 11.
(c) Within 60 days after receiving a notice from the Committee that a
claim has been denied, in whole or in part, a Claimant (or the Claimant's duly
authorized representative) may file with the Committee a written request for a
review of the denial of the claim. Thereafter, but not later than 30 days after
the review procedure began, the Claimant (or the Claimant's duly authorized
(i) may review pertinent documents;
(ii) may submit written comments or other documents; and/or
(iii) may request a hearing, which the Committee, in its sole
discretion, may grant.
(d) The Committee shall render its decision on review promptly, and
not later than 60 days after the filing of a written request for review of the
denial, unless a hearing is held or other special circumstances require
additional time, in which case the Committee's decision must be rendered within
120 days after such date. Such decision must be written in a manner calculated
to be understood by the Claimant, and it must contain:
(i) specific reasons for the decision;
(ii) specific reference(s) to the pertinent Plan provisions upon
which the decision was based; and
(iii) such other matters as the Committee deems relevant.
(e) A Claimant's compliance with the foregoing provisions of this
Section 11 is a mandatory prerequisite to a Claimant's right to commence any
legal action with respect to any claim for benefits under this Plan.
12. Non-Assignable. Amounts payable under this Plan shall not be subject
to alienation, assignment, garnishment, execution or levy of any kind, and any
attempt to cause any such amount to be so subjected shall be null, void and of
no effect and shall not be recognized by the Company.
13. Termination and Modification. The Company may, by action of the
Committee, terminate or amend this Plan by written notice to each Participant
participating therein. A termination of the Plan shall have no effect other
than to eliminate the right of each Participant to have additional amounts
credited to his or her Account pursuant to Section 3. Except for such
"prospective" termination, the Plan may not be amended, modified, waived,
discharged or terminated, except by mutual consent of the Company and the
Participant or Participants affected thereby, which consent shall be evidenced
by an instrument in writing, signed by the party against which enforcement of
such amendment, modification, waiver, discharge or termination is sought.
14. Parties. The terms of this Plan shall be binding upon the Company,
its successors or assigns and each Participant participating herein and his or
her spouse, Beneficiaries, heirs, executors and administrators.
15. Liability of Company. Subject to its obligation to pay the amount
credited to the Participant's Account at the time distribution is called for by
this Plan, neither the Company nor any person acting in behalf of the Company
shall be liable to any Participant or any other person for any act performed or
the failure to perform any act with respect to the Plan.
16. Notices. Notices, elections or designations by a Participant to the
Company hereunder shall be addressed to the Company to the attention of the
Treasurer of the Company. Notices by the Company to a Participant shall be
addressed to the Participant at his or her most recent home address as reflected
in the records of the Company.
17. Withholding. All payments under this Plan shall be net of tax
withholding required by applicable Federal and state laws.
18. Unsecured General Creditors. No Participant or his or her legal
representative or any Beneficiary designated by him or her shall have any right,
other than the right of an unsecured general creditor, against the Company in
respect of the Account of such Participant established hereunder.
19. Effective Date. This Plan shall be effective as of January 1, 1995,
and shall continue in existence thereafter until terminated pursuant to Section
13. Notwithstanding the foregoing, this Plan shall be effective as of July 1,
1995 with respect to the Kendall employees.
20. Governing Law. This Plan shall be construed and enforced in
accordance with, and governed by, the laws of the State of New Hampshire.
IN WITNESS WHEREOF, this Plan has been duly signed for and on behalf of the
Company by its duly authorized officer on the 25TH day of July, 1995.
TYCO INTERNATIONAL LTD.
By: THE RETIREMENT COMMITTEE