Kennametal Inc. Restoration Plan Adoption Agreement
Exhibit 10.2
ADOPTION AGREEMENT
1.01 | PREAMBLE |
By the execution of this Adoption Agreement the Plan Sponsor hereby [complete (a) or (b)] |
(a) | ☒ | adopts a new plan as of January 1, 2018 [month, day, year] | ||
(b) | ☐ | amends and restates its existing plan as of [month, day, year] which is the Amendment Restatement Date. Except as otherwise provided in Appendix A, all amounts deferred under the Plan prior to the Amendment Restatement Date shall be governed by the terms of the Plan as in effect on the day before the Amendment Restatement Date. | ||
Original Effective Date: [month, day, year] | ||||
Pre-409A Grandfathering: ☐ Yes ☐ No |
1.02 | PLAN |
Plan Name: Kennametal Inc. Restoration Plan |
Plan Year: December 31 |
1.03 | PLAN SPONSOR |
Name: | Kennametal Inc. | |
Address: | 1600 Technology Way, Latrobe, PA 15650 | |
Phone # : | 724 ###-###-#### | |
EIN: | 25-0900168 | |
Fiscal Yr: | June 30 |
Is stock of the Plan Sponsor, any Employer or any Related Employer publicly traded on an established securities market? |
☒ Yes ☐ No |
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1.04 | EMPLOYER |
The Plan Sponsor and any Related Employers, as selected and approved by the Administrator have been authorized by the Plan Sponsor to participate in the Plan. |
1.05 | ADMINISTRATOR |
The Plan Sponsor has designated the following party or parties to be responsible for the administration of the Plan: |
Name: | The Compensation Committee of the Board | |
Address: | 1600 Technology Way, Latrobe, PA 15650 |
Note: | The Administrator is the person or persons designated by the Plan Sponsor to be responsible for the administration of the Plan. Neither Fidelity Employer Services Company nor any other Fidelity affiliate can be the Administrator. |
1.06 | KEY EMPLOYEE DETERMINATION DATES |
The Employer has designated June 30 as the Identification Date for purposes of determining Key Employees. |
In the absence of a designation, the Identification Date is December 31. |
The Employer has designated July 1 as the effective date for purposes of applying the six month delay in distributions to Key Employees. |
In the absence of a designation, the effective date is the first day of the fourth month following the Identification Date. |
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2.01 | PARTICIPATION |
(a) | ☒ | Employees [complete (i), (ii) or (iii)] | ||||
(i) | ☐ | Eligible Employees are selected by the Employer. | ||||
(ii) | ☒ | Eligible Employees are those employees of the Employer who satisfy the following criteria: | ||||
Those Employees whos Compensation is anticipated to exceed
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the Internal Revenue Code Sec. 401(a)(17) limit in effect as of
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the 1st day of the applicable Plan Year (or $270,000 for the 1st
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Plan Year) based upon the Employees Compensation earned in
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the prior calendar year and those Employees who have
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previously met the requirements for initial eligibility.
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(iii) | ☐ | Employees are not eligible to participate. | ||||
(b) | ☒ | Directors [complete (i), (ii) or (iii)] | ||||
(i) | ☐ | All Directors are eligible to participate. | ||||
(ii) | ☐ | Only Directors selected by the Employer are eligible to participate. | ||||
(iii) | ☒ | Directors are not eligible to participate. |
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3.01 | COMPENSATION |
For purposes of determining Participant contributions under Article 4 and Employer contributions under Article 5, Compensation shall be defined in the following manner [complete (a) or (b) and select (c) and/or (d), if applicable]: |
(a) | ☐ | Compensation is defined as: | ||||
(b) | ☒ | Compensation as defined in the Kennametal Thrift Plus Plan without regard to the limitation in Section 401(a)(17) of the Code for such Plan Year plus, for purposes of any Employer Contributions provided under Section 5.01, any amounts deferred as Participant Contributions to this Plan for the applicable Plan Year. | ||||
(c) | ☐ | Director Compensation is defined as: | ||||
(d) | ☐ | Compensation shall, for all Plan purposes, be limited to $ . | ||||
(e) | ☐ | Not Applicable. |
3.02 | BONUSES |
Compensation, as defined in Section 3.01 of the Adoption Agreement, includes the following type of bonuses that will be the subject of a separate deferral election: |
Type | Will be treated as Performance Based Compensation | |||||
Yes |
No | |||||
Annual Incentive Plan | ☒ | ☐ | ||||
Sales Incentive Plan | ☒ | ☐ | ||||
☐ | ☐ | |||||
☐ | ☐ | |||||
☐ | ☐ |
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4.01 | PARTICIPANT CONTRIBUTIONS |
If Participant contributions are permitted, complete (a), (b), and (c). Otherwise complete (d). |
(a) | Amount of Deferrals |
A Participant may elect within the period specified in Section 4.01(b) of the Adoption Agreement to defer the following amounts of remuneration. For each type of remuneration listed, complete dollar amount and / or percentage amount. |
(i) Compensation Other than Bonuses [do not complete if you complete (iii)] |
Type of Remuneration | Dollar Amount | % Amount | Increment | |||||||
Min | Max | Min | Max | |||||||
(a) Base Compensation | 0% | 50% | 1% | |||||||
(b) | ||||||||||
(c) |
Note: The increment is required to determine the permissible deferral amounts. For example, a minimum of 0% and maximum of 20% with a 5% increment would allow an individual to defer 0%, 5%, 10%, 15% or 20%. |
(ii) Bonuses [do not complete if you complete (iii)] |
Type of Bonus | Dollar Amount | % Amount | Increment | |||||||
Min | Max | Min | Max | |||||||
(a) Annual Incentive Bonus | 0% | 100% | 1% | |||||||
(b) Sales Incentive Bonus | 0% | 100% | 1% | |||||||
(c) |
(iii) Compensation [do not complete if you completed (i) and (ii)] |
Dollar Amount | % Amount | Increment | ||||||
Min | Max | Min | Max | |||||
(iv) Director Compensation |
Type of Compensation | Dollar Amount | % Amount | Increment | |||||||
Min | Max | Min | Max | |||||||
Annual Retainer | ||||||||||
Meeting Fees | ||||||||||
Other: | ||||||||||
Other: |
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(b) | Election Period |
(i) Performance Based Compensation |
A special election period
☒ Does ☐ Does Not
apply to each eligible type of performance based compensation referenced in Section 3.02 of the Adoption Agreement.
The special election period, if applicable, will be determined by the Employer.
(ii) Newly Eligible Participants |
An employee who is classified or designated as an Eligible Employee during a Plan Year
☐ May ☒ May Not
elect to defer Compensation earned during the remainder of the Plan Year by completing a deferral agreement within the 30 day period beginning on the date he is eligible to participate in the Plan.
(c) | Revocation of Deferral Agreement |
A Participants deferral agreement |
☒ Will |
☐ Will Not |
be cancelled for the remainder of any Plan Year during which he receives a hardship distribution of elective deferrals from a qualified cash or deferred arrangement maintained by the Employer to the extent necessary to satisfy the requirements of Reg. Sec. 1.401(k)-1(d)(3). If cancellation occurs, the Participant may resume participation in accordance with Article 4 of the Plan. |
(d) | No Participant Contributions |
☐ Participant contributions are not permitted under the Plan. |
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5.01 | EMPLOYER CONTRIBUTIONS |
If Employer contributions are permitted, complete (a) and/or (b). Otherwise complete (c). |
(a) Matching Contributions |
(i) | Amount |
For each Plan Year, the Employer shall make a Matching Contribution on behalf of each Participant who defers Compensation for the Plan Year and satisfies the requirements of Section 5.01(a)(ii) of the Adoption Agreement equal to [complete the ones that are applicable]: |
(A) | ☐ | [insert percentage] of the Compensation the Participant has elected to defer for the Plan Year | ||||||
(B) | ☐ | An amount determined by the Employer in its sole discretion | ||||||
(C) | ☐ | Matching Contributions for each Participant shall be limited to $ and/or % of Compensation. | ||||||
(D) | ☐ | Other: | ||||||
(E) | ☒ | Not Applicable [Proceed to Section 5.01(b)] |
(ii) | Eligibility for Matching Contribution |
A Participant who defers Compensation for the Plan Year shall receive an allocation of Matching Contributions determined in accordance with Section 5.01(a)(i) provided he satisfies the following requirements [complete the ones that are applicable]: |
(A) | ☐ | Describe requirements: | ||||||
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(B) | ☐ | Is selected by the Employer in its sole discretion to receive an allocation of Matching Contributions | ||||||
(C) | ☐ | No requirements |
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(iii) | Time of Allocation |
Matching Contributions, if made, shall be treated as allocated [select one]: |
(A) | ☐ | As of the last day of the Plan Year | ||||
(B) | ☐ | At such times as the Employer shall determine in its sole discretion | ||||
(C) | ☐ | At the time the Compensation on account of which the Matching Contribution is being made would otherwise have been paid to the Participant | ||||
(D) | ☐ | Other: | ||||
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(b) Other Contributions |
(i) | Amount |
The Employer shall make a contribution on behalf of each Participant who satisfies the requirements of Section 5.01(b)(ii) equal to [complete the ones that are applicable]: |
(A) | ☐ | An amount equal to [insert number] % of the Participants Compensation | ||||||
(B) | ☒ | An amount determined by the Employer in its sole discretion | ||||||
(C) | ☐ | Contributions for each Participant shall be limited to $ | ||||||
(D) | ☒ | Other: | ||||||
The same contribution percentage that the Participant would receive as either a Company Matching and/or Discretionary Contribution in the Kennametal Thrift Plus Plan offset by the maximum Contribution the Participant could have received under such Thrift Plus Plan for the applicable Plan Year | ||||||||
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(E) | ☐ | Not Applicable [Proceed to Section 6.01] |
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(ii) | Eligibility for Other Contributions |
A Participant shall receive an allocation of other Employer contributions determined in accordance with Section 5.01(b)(i) for the Plan Year if he satisfies the following requirements [complete the one that is applicable]: |
(A) | ☐ | Describe requirements: | ||||||
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(B) | ☒ | Is selected by the Employer in its sole discretion to receive an allocation of other Employer contributions | ||||||
(C) | ☐ | No requirements |
(iii) | Time of Allocation |
Employer contributions, if made, shall be treated as allocated [select one]: |
(A) | ☐ | As of the last day of the Plan Year | ||||||
(B) | ☒ | At such time or times as the Employer shall determine in its sole discretion | ||||||
(C) | ☐ | Other: | ||||||
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(c) No Employer Contributions |
☐ | Employer contributions are not permitted under the Plan. |
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6.01 | DISTRIBUTIONS |
The timing and form of payment of distributions made from the Participants vested Account shall be made in accordance with the elections made in this Section 6.01 of the Adoption Agreement except when Section 9.6 of the Plan requires a six month delay for certain distributions to Key Employees of publicly traded companies. |
(a) Timing of Distributions |
(i) | All distributions shall commence in accordance with the following [choose one]: | |||||
(A) | ☒ | As soon as administratively feasible following the distribution event but in no event later than the time prescribed by Treas. Reg. Sec. 1.409A-3(d). | ||||
(B) | ☐ | Monthly on specified day [insert day] | ||||
(C) | ☐ | Annually on specified month and day [insert month and day] | ||||
(D) | ☐ | Calendar quarter on specified month and day [ month of quarter (insert 1,2 or 3); day (insert day)] | ||||
(ii) | The timing of distributions as determined in Section 6.01(a)(i) shall be modified by the adoption of: | |||||
(A) | ☐ | Event Delay Distribution events other than those based on Specified Date or Specified Age will be treated as not having occurred for months [insert number of months]. | ||||
(B) | ☐ | Hold Until Next Year Distribution events other than those based on Specified Date or Specified Age will be treated as not having occurred for twelve months from the date of the event if payment pursuant to Section 6.01(a)(i) will thereby occur in the next calendar year or on the first payment date in the next calendar year in all other cases. | ||||
(C) | ☐ | Immediate Processing The timing method selected by the Plan Sponsor under Section 6.01(a)(i) shall be overridden for the following distribution events [insert events]: | ||||
(D) | ☐ | Not applicable. |
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(b) Distribution Events |
Participants may elect the following payment events and the associated form or forms of payment. If multiple events are selected, the earliest to occur will trigger payment. For installments, insert the range of available periods (e.g., 5-15) or insert the periods available (e.g., 5, 7, 9). For purposes of the Specified Date event, this event can only be selected for Participant Contributions as indicated in Section 4.01.
Lump Sum | Installments | |||||||||||||
(i) | ☒ | Specified Date | X | years | ||||||||||
(ii) | ☐ | Specified Age | years | |||||||||||
(iii) | ☐ | Separation from Service | years | |||||||||||
(iv) | ☒ | Separation from Service plus 6 months | X | 2-10 years | ||||||||||
(v) | ☐ | Separation from Service plus months [not to exceed months] | years | |||||||||||
(vi) | ☐ | Retirement | years | |||||||||||
(vii) | ☐ | Retirement plus 6 months | years | |||||||||||
(viii) | ☐ | Retirement plus months [not to exceed months] | years | |||||||||||
(ix) | ☐ | Disability | years | |||||||||||
(x) | ☐ | Death | years | |||||||||||
(xi) | ☐ | Change in Control | years | |||||||||||
The minimum deferral period for Specified Date or Specified Age event shall be one (1) year. | ||||||||||||||
Installments may be paid [select each that applies] | ||||||||||||||
☐ | Monthly | |||||||||||||
☐ | Quarterly | |||||||||||||
☒ | Annually |
(c) | Specified Date and Specified Age elections may not extend beyond age Not Applicable [insert age or Not Applicable if no maximum age applies]. |
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(d) Payment Election Override |
Payment of the remaining vested balance of the Participants Account will automatically occur at the time specified in Section 6.01(a) of the Adoption Agreement in the form indicated upon the earliest to occur of the following events [check each event that applies and for each event include only a single form of payment]:
EVENTS | FORM OF PAYMENT | |||
☐ | Separation from Service | Lump sum Installments | ||
☐ | Separation from Service before Retirement | Lump sum Installments | ||
☒ | Death | X Lump sum Installments | ||
☒ | Disability | X Lump sum Installments | ||
☐ | Not Applicable |
(e) Involuntary Cashouts |
☐ | If the Participants vested Account at the time of his Separation from Service does not exceed $ distribution of the vested Account shall automatically be made in the form of a single lump sum in accordance with Section 9.5 of the Plan. | |
☒ | There are no involuntary cashouts other than those permitted under Section 9.9 of the Plan. |
(f) Retirement |
☐ | Retirement shall be defined as a Separation from Service that occurs on or after the Participant [insert description of requirements]: | |||
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☒ | No special definition of Retirement applies. |
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(g) Distribution Election Change |
A Participant
☒ | Shall | |
☐ | Shall Not |
be permitted to modify a scheduled distribution date and/or payment option in accordance with Section 9.2 of the Plan.
A Participant shall generally be permitted to elect such modification two (2) number of times.
Administratively, allowable distribution events will be modified to reflect all options necessary to fulfill the distribution change election provision.
(h) Frequency of Elections |
The Plan Sponsor
☒ | Has | |
☐ | Has Not |
Elected to permit annual elections of a time and form of payment for amounts deferred under the Plan. If a single election of a time and/or form of payment is required, the Participant will make such election at the time he first completes a deferral agreement which, in all cases, will be no later than the time required by Reg. Sec. 1.409A-2.
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7.01 | VESTING |
(a) | Matching Contributions |
The Participants vested interest in the amount credited to his Account attributable to Matching Contributions shall be based on the following schedule:
☐ | Years of Service | Vesting | % | |||||
0 | (insert 100 if there is immediate vesting) | |||||||
1 | ||||||||
2 | ||||||||
3 | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
7 | ||||||||
8 | ||||||||
9 | ||||||||
☐ | Other: | |||||||
☐ | Class year vesting applies. | |||||||
☒ | Not applicable. |
(b) | Other Employer Contributions |
The Participants vested interest in the amount credited to his Account attributable to Employer contributions other than Matching Contributions shall be based on the following schedule unless such Participant has a Separation from Service for Cause as defined in Section 8.1 of the Plan and Appendix A to this Adoption Agreement:
☒ | Years of Service | Vesting | % | |||||
0 | 100 | (insert 100 if there is immediate vesting) | ||||||
1 | ||||||||
2 | ||||||||
3 | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
7 | ||||||||
8 | ||||||||
9 | ||||||||
☐ | Other: | |||||||
☐ | Class year vesting applies. | |||||||
☐ | Not applicable. |
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(c) Acceleration of Vesting |
A Participants vested interest in his Account will automatically be 100% upon the occurrence of the following events: [select the ones that are applicable]:
(i) | ☐ Death |
(ii) | ☐ Disability |
(iii) | ☐ Change in Control |
(iv) | ☐ Eligibility for Retirement |
(v) | ☐ Other: |
(vi) | ☒ Not applicable. |
(d) Years of Service |
(i) | A Participants Years of Service shall include all service performed for the Employer and |
☐ | Shall |
☐ | Shall Not |
include service performed for the Related Employer.
(ii) | Years of Service shall also include service performed for the following entities: |
(iii) | Years of Service shall be determined in accordance with (select one) |
(A) | ☐ | The elapsed time method in Treas. Reg. Sec. 1.410(a)-7 | ||||||||
(B) | ☐ | The general method in DOL Reg. Sec. 2530.200b-1 through b-4 | ||||||||
(C) | ☐ | The Participants Years of Service credited under [insert name of plan] | ||||||||
(D) | ☐ | Other: | ||||||||
(iv) ☒ Not | applicable. |
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8.01 | UNFORESEEABLE EMERGENCY |
(a) A withdrawal due to an Unforeseeable Emergency as defined in Section 2.24: |
☐ Will |
☒ Will Not [if Unforeseeable Emergency withdrawals are not |
permitted, proceed to Section 9.01] |
be allowed. |
(b) | Upon a withdrawal due to an Unforeseeable Emergency, a Participants deferral election for the remainder of the Plan Year: |
☐ Will |
☐ Will Not |
be cancelled. If cancellation occurs, the Participant may resume participation in accordance with Article 4 of the Plan.
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9.01 | INVESTMENT DECISIONS |
Investment decisions regarding the hypothetical amounts credited to a Participants Account shall be made by [select one]: |
(a) ☒ | The Participant or his Beneficiary | |
(b) ☐ | The Employer |
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10.01 | TRUST |
The Employer [select one]: |
☒ Does |
☐ Does Not |
intend to establish a rabbi trust as provided in Article 11 of the Plan.
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11.01 | TERMINATION UPON CHANGE IN CONTROL |
The Plan Sponsor
☒ Reserves |
☐ Does Not Reserve |
the right to terminate the Plan and distribute all vested amounts credited to Participant Accounts upon a Change in Control as described in Section 9.7.
11.02 | AUTOMATIC DISTRIBUTION UPON CHANGE IN CONTROL |
Distribution of the remaining vested balance of each Participants Account
☐ Shall |
☒ Shall Not |
automatically be paid as a lump sum payment upon the occurrence of a Change in Control as provided in Section 9.7.
11.03 | CHANGE IN CONTROL |
A Change in Control for Plan purposes includes the following [select each definition that applies]:
(a) | ☒ | A change in the ownership of the Employer as described in Section 9.7(c) of the Plan. | ||
(b) | ☒ | A change in the effective control of the Employer as described in Section 9.7(d) of the Plan. | ||
(c) | ☒ | A change in the ownership of a substantial portion of the assets of the Employer as described in Section 9.7(e) of the Plan. | ||
(d) | ☐ | Not Applicable. |
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12.01 | GOVERNING STATE LAW |
The laws of Pennsylvania shall apply in the administration of the Plan to the extent not preempted by ERISA. |
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The Plan Sponsor has caused this Adoption Agreement to be executed this day of , 20 .
PLAN SPONSOR: |
| |
By: |
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Title: |
|
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APPENDIX A
For purposes of Sec. 7.01 Cause means that the Participant:
1. | shall be guilty of malfeasance, willful misconduct or gross negligence in the performance of services for the Employer; |
2. | shall not make his or her services available to the Employer on a full time basis for any reason other than arising from Disability or from the Participants incapacity due to physical or mental illness or injury which does not constitute Disability and other than by reason of the fact that the Participants employment has been terminated by the Employer prior to, or within two years following, a Change in Control and other than for Cause; or |
3. | during the period of Participants employment by the Employer, shall, in any geographic area in which Kennametal is offering its services and products, without the prior written consent of the Employer: |
a. | directly or indirectly engage in, or |
b. | assist or have an active interest in (whether as a proprietor, partner, investor, shareholder, officer, director or any type of principal whatsoever), or enter the employ of, or act as agent for, or advisor or consultant to, any person, firm, partnership, association, corporation or business organization, entity or enterprise which is or is about to become directly or indirectly engaged in, |
any business which is competitive with any business of the Employer or any subsidiary or affiliate thereof in which the Participant is or was engaged; provided, however, that the foregoing provisions of this definition are not intended to include (or classify as Cause) the Participants purchasing, for investment, not in excess of 1% of any class of stock or other corporate security of any company which is registered pursuant to Section 12 of the Securities Exchange Act of 1934.
The Committee shall determine whether or not Cause existed for termination of Participants employment unless the Participant has a written employment agreement with the Employer, in which case the determination shall be made in the manner provided under the Participants said employment agreement.
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