Exhibit 10.52
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AND AGREEMENT
FOR
XXXX XXXXXXXXX
This Supplemental Executive Retirement Plan and Agreement for
Xxxx Xxxxxxxxx, made as of the 15th day of September, 2003 by and between
CONCORD CAMERA CORP., a New Jersey corporation (the "Employer") and XXXX
XXXXXXXXX (the "Executive").
In consideration for the premises and the mutual covenants
hereinafter contained, the parties hereto hereby agree as follows:
Article I. Introduction
In consideration of the services to be performed by the
Executive for the Employer in the future, the Employer hereby agrees to pay, in
addition to other consideration to be provided by the Employer, deferred
compensation to him under the terms and conditions hereinafter set forth. This
Agreement creates an unfunded, nonqualified plan maintained for the purposes of
providing deferred compensation for the Executive, a member of senior management
and a highly compensated Executive, and shall be construed and administered
accordingly.
Article II. Definitions
When used herein with initial capital letters, the following
words have the following meanings:
"Accounts" - the three accounts established by the Employer
for the benefit of the Executive, each reflecting the initial credit described
in paragraph 1 of Article III, and adjustments for income, expenses, gains or
losses and any payments from the accounts.
"Change in Control" - the occurrence of any one of the
following events:
(i) any "person," as such term is used in Sections
3(a)(9) and 13(d) of the Securities Exchange Act of 1934 (other than Executive
or Xxx X. Xxxxxxx), becomes a "beneficial owner," as such term is used in Rule
13d-3 promulgated under that act, of 25% or more of the capital stock of any
class or classes having general voting power under ordinary circumstances, in
the absence of contingencies, to elect the directors of a corporation ("Voting
Stock");
(ii) the majority of the Board of Directors of the
Employer ("Board") consists of individuals other than Incumbent Directors,
which term means the members of the Board on the date of this Plan and
Agreement; provided that any person becoming a director subsequent to such date
whose election or nomination for election was supported by two-thirds of the
directors who then comprised the Incumbent Directors shall be considered to be
an Incumbent Director;
(iii) the Employer adopts any plan of liquidation
providing for the distribution of all or substantially all of its assets;
(iv) all or substantially all of the assets or
business of the Employer is disposed of pursuant to a merger, consolidation or
other transaction (unless the shareholders of the Employer immediately prior to
such merger, consolidation or other transaction beneficially own, directly or
indirectly, in substantially the same proportion as they owned the Voting Stock
of the Employer, the Voting Stock or other ownership interests of the entity or
entities, if any, that succeed to the business of the Employer); or
(v) the Employer combines with another company and is
the surviving corporation but, immediately after the combination, the
shareholders of the Employer immediately prior to the combination hold, directly
or indirectly, 50% or less of the Voting Stock of the combined company (there
being excluded from the number of shares held by such shareholders, but not from
the Voting Stock of the combined company, any shares received by affiliates of
such other company in exchange for stock of such other company).
"Disability" - permanent and total disability as defined by
the Employer's employee welfare benefit plan offering a long term disability
benefit, or, if no such benefit is offered, it shall mean the absence of the
individual from his duties with the Employer on a full-time basis for 180
consecutive business days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician selected by
the Employer or its insurers and reasonably acceptable to the Executive or the
Executive's legal guardian.
"Plan and Agreement" - this Supplemental Executive Retirement
Plan and Agreement for Xxxx Xxxxxxxxx.
Article III. Deferred Compensation
1. The Employer agrees to credit as of September 15, 2003: (a)
$33,334 to Account I; and (b) $33,333 to each of Account II and Account III, and
such deferred compensation shall be paid to the Executive as provided in this
Plan and Agreement.
2. The balance in each Account shall be deemed for purposes of
this Plan and Agreement to be invested and reinvested in such securities,
investments, instruments or insurance policies as the Executive, in his sole
discretion, shall direct from time to time, by one day advance written notice
given to the Employer or its designee. With the consent of the Employer, the
Executive may, by giving written notice to the Employer or its designee,
authorize an investment manager to make the directions specified in the
preceding sentence. Any investment direction or change of investment direction
shall be deemed made on the first business day following the Employer's or its
designee's, as the case may be, receipt of the Executive's or the investment
manager's, as the case may be, written notice of investment direction. Any such
investment direction shall remain in effect until affirmatively changed by a
subsequent investment direction given in the same manner, provided that the
proceeds of any investment which matures shall be deemed to be reinvested in
such money market account as the Employer may determine and thereafter until a
new investment direction is made with respect to such proceeds. Notwithstanding
the foregoing, no such deemed investment shall, in the Employer's reasonable
judgment, impose upon the Employer administrative burdens or financial costs
which are inappropriate in view of all of the circumstances. If no applicable
investment direction is given on or before the date on which an amount is
credited to an Account, such amount shall be initially invested in such money
market account as the Employer may reasonably determine. The Employer, in its
discretion and on such terms as it decides, may waive, or reduce the period of,
any notice required under this paragraph.
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3. Title to and beneficial ownership of any direct or indirect
investments the Employer may make in connection with the Plan and Agreement
(including the transfer of funds to a selected investment manager for
discretionary investment and reinvestment in such investments by such investment
manager or the transfer of funds to a so-called rabbi trust) shall at all times
remain with the Employer, and the Executive and his designated beneficiary or
beneficiaries shall not have any property interest whatsoever in such
investments.
4. At the end of every month, each Account shall be increased
or decreased by (a) in the case of each investment actually made directly or
indirectly by the Employer with respect to such Account, the net amount of all
income, gain or loss earned or sustained, whether realized or unrealized, with
respect to such investment, and (b) in the case of each deemed investment with
respect to such Account, the net amount of all income, gain or loss which would
have been earned or sustained, whether realized or unrealized, had the balance
in the Account in fact been invested and reinvested in such investment. Each
Account shall also be charged with all payments or other distributions with
respect to such Account and with all fees and expenses (including brokerage
fees) with respect to such Account, in the case of investments actually made, at
the rates actually paid and, in the case of investments deemed to have been
made, at the rates which would have been paid had the investments actually been
made.
Article IV. Vesting
1. The balances in the Accounts shall vest as follows:
Account Vesting Date
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Account I September 15, 2004
Account II September 15, 2005
Account III September 15, 2006
Upon the event of a Change in Control, the balances in the Accounts shall
immediately vest. In addition, if the Executive's employment is terminated as a
result of the Executive's death or Disability, or by the Employer without Cause,
the balances in the Accounts shall immediately vest. In the event the
Executive's employment with the Employer is terminated prior to the vesting of
the balance in an Account for any other reason, the balance in such Account
shall be immediately forfeited and the Executive shall have no further interests
in such balance.
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For purposes of this Agreement, "Cause" shall mean "cause" as defined in the
Terms of Employment by and between the Executive and the Employer, dated as of
September 15, 2003.
2. Notwithstanding anything herein to the contrary, in the
event of a forfeiture of a balance in an Account, the Executive agrees that to
the extent that the balance in the Account at the time of forfeiture is less
than the amount of the initial credit described in paragraph 1 of Article III
above, he shall immediately pay to the Employer an amount equal to such
deficiency. The Employer, in its discretion, may reduce the amounts otherwise
payable to the Executive under this Plan and Agreement by any deficiency owed to
the Employer pursuant to the immediately preceding sentence.
Article V. Benefit Distributions
1. Except as otherwise provided in paragraph 2 of Article IV
or in this Article V or in Article VI or VII:
(a) the vested balance in Account I shall automatically be
paid to the Executive in a lump-sum payment on September 15, 2004; and
(b) the vested balance in each of Accounts II and III shall be
paid to the Executive in one of the two following methods at the election of the
Executive: (i) a lump-sum payment to be paid at such time as is designated by
the Executive or (ii) annual installment payments over such period of years as
may be designated by the Executive.
2. The Executive's election and designation referred to in
paragraph 1(b) of this Article V with respect to Accounts II and III shall be
made by a written notice to the Employer prior to October 15, 2003.
Alternatively, the Executive may make a modification election pursuant to
paragraph 6 of this Article V. The Executive may make different elections and
designations with respect to each such Account.
3. In the event that the Executive fails to make an election
as described in paragraph 1(b) of this Article V with respect to Account II or
Account III, the vested balance in such Account shall be paid in ten annual
installments commencing on the first day of the month following the termination
of the Executive's employment with the Employer
4. All payments to be made pursuant to paragraph 1 of this
Article V with respect to each Account shall be made in cash, and in furtherance
thereof, all investments actually made with respect to such Account shall be
sold by the Employer at such time or times as the Employer may determine to
effect such payment; provided, that (a) in the case of an installment payment,
unless the Executive provides the Employer with written notice to the contrary
at least five days prior to the date any such payment is due, the Employer may
select the investments to be sold or deemed sold to provide the cash necessary
for such payment, (b) except as provided in clause (c) below, to the extent
investments have actually been made directly or indirectly by the Employer with
respect to such Account, the Executive may elect, subject to the Employer's
approval, to receive payment in kind in lieu of cash by providing written notice
of such election to the Employer at least five days prior to the date of such
payment, and (c) to the extent the investments have actually been made directly
or indirectly by the Employer in common stock of the Employer, the Employer may
make the payment in kind in lieu of cash by delivery of fully registered stock
certificates representing such common stock."
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5. For purposes of determining the amount of a payment
referred to in paragraph 1 of this Article V with respect to an Account, (a) the
balance in such Account shall be adjusted by the Employer in the manner provided
in paragraph 6 of Article III not more than five trading days preceding such
payment, (b) the amount of such payment shall be reduced by the amount of any
expenses actually incurred or deemed to have been incurred in connection with
the sale or deemed sale of investments required to make such payment ("selling
expenses"), and (c) if the installment method is elected with respect to any
year, the amount of each installment shall be equal to the balance in the
appropriate Account as of the date of payment (as adjusted pursuant to clause
(a) of this sentence), divided by the number of annual installments remaining,
including the installment then being paid, and then reduced by the amount of any
applicable selling expenses.
6. Except as provided in this paragraph 6, the Executive shall
have no right to modify in any way his election and designation made pursuant to
paragraph 1(b) of this Article V with respect to Account II or Account III or,
in the event of his failure to make such an election or designation, the default
provisions of paragraph 3. Provided that a modification election is made at
least 12 months prior to it becoming effective, with respect to Account II
and/or Account III the Executive may:
(a) delay the date on which a lump-sum payment from such
Account shall be made;
(b) accelerate the date on which benefit distributions from
any vested portion of an Account shall commence;
(c) change the form of benefit payment from such Account
from a lump-sum payment to annual installment payments
over such period of years as designated by the
Executive;
(d) change the form of benefit payment from such Account
from annual installments to a lump-sum payment which
shall be paid at the time designated by the Executive;
(e) delay the commencement of annual installment payments
from such Account; or
(f) increase the period of years during which annual
installments shall be made out of such Account.
7. Notwithstanding anything in this Plan and Agreement to the
contrary, in the event of the termination of the Executive's employment with the
Employer for any reason prior to the Executive's attainment of age 65, the
vested balance in each Account shall be paid to the Executive in one lump-sum
payment within 30 days of such termination.
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8. Notwithstanding any other provision of this Plan and
Agreement to the contrary, in the event the Executive is determined to be
subject to federal income tax on any balance in an Account prior to the time of
distribution hereunder, an amount equal to the federal, state and local taxes
(including any interest and penalties) owed on such taxable amount, shall be
distributed from such Account to the Executive. A balance in an Account shall be
determined to be subject to federal income tax upon the earliest of: (a) a final
determination by the Internal Revenue Service addressed to the Executive which
is not appealed to the courts; (b) a final determination by the United States
Tax Court or any other federal court affirming any such determination by the
Internal Revenue Service; or (c) a written opinion by the Employer's tax
counsel, addressed to the Employer, to the effect that balance in an Account are
subject to federal income tax prior to distribution.
9. Employer is authorized to withhold from any payments made
hereunder such amounts for income tax, social security, unemployment
compensation and other taxes as shall be necessary or appropriate to comply with
applicable laws and regulations.
10. Notwithstanding any other provision of this Plan and
Agreement to the contrary and notwithstanding any elections made by the
Executive, the Executive may require the immediate distribution to the Executive
of all or a portion of the vested balances in the Accounts less any amounts
required by paragraph 9 of this Article V and subject to a penalty equal to ten
percent (10%) of the amount to be distributed pursuant to this paragraph (prior
to withholding required by paragraph 9). Such penalty amount shall be deemed
forfeited and no longer payable to the Executive.
Article VI. Hardship
The Employer may, in its sole discretion, distribute all or a
portion of the vested balances in the Accounts to the Executive upon a
demonstration by the Executive of an immediate and heavy financial need. The
amount of any distribution made pursuant to this Article VI shall be limited to
the amount necessary to satisfy such financial need.
Article VII. Death and Disability
1. In the event of the Executive's death prior to the payment
of all of the balances in the Accounts, unless the Executive otherwise elected
installment payments with the consent of the Employer, the Employer shall pay
all remaining balances in the Accounts as of the date of such death (as adjusted
for subsequently deemed earnings and losses), not later than 30 days following
the Executive's death, in one lump-sum to such beneficiary or beneficiaries
designated by the Executive in a writing filed by the Executive with the
Employer, or in the absence of such a beneficiary designation, to the
Executive's estate.
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2. In the event of the Executive's Disability prior to the
payment of all of the balances in the Accounts, unless the Executive otherwise
elected installment payments with the consent of the Employer, the Employer
shall pay all remaining balances in the Accounts as of the date of such
Disability (as adjusted for subsequently deemed earnings and losses), not later
than 30 days following such Disability, in one lump-sum to the Executive.
Article VIII. Claims Procedures
1. At any time the Employer makes a determination adverse to
the Executive or his beneficiary with respect to a claim for payment, the
Employer shall notify the claimant in writing of such determination, setting
forth:
(a) the specific reason for such determination;
(b) a reference to the specific provision or provisions of
this Plan on which such determination is based;
(c) a description of any additional material or information
necessary to perfect the claim, and an explanation of
the reason that such material is required, and
(d) an explanation of the rights and procedures set forth
in this Article VIII.
2. A person who receives notice of an adverse determination by
the Employer with respect to a claim may request, within 60 days of receipt of
such notice, that the Employer review its determination. This request may be
made on behalf of a claimant by a duly authorized representative. The claimant
or representative may review pertinent documents and submit issues and comments
with respect to the controversy to the Employer. The Employer shall render a
decision within 60 days of a request for review (or within 120 days under
special circumstances), which decision shall be in writing and shall set forth
the specific reasons for the decision reached and the specific provisions of
this Plan and Agreement on which the decision is based. A copy of the ruling
shall be forwarded to the claimant.
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Article IX. Miscellaneous
1. Benefits provided in this Plan and Agreement will not be
subject to garnishment, attachment, or assignment, or any other legal process by
creditors of the Executive or any person or persons designated as beneficiaries
of this Plan and Agreement or any other payee of the benefits provided herein,
except as specifically provided herein.
2. The Executive and his beneficiaries shall have the status
of unsecured creditors of the Employer and this Plan and Agreement constitutes a
mere promise by the Employer to make benefit payments as required by Articles V,
VI and VII.
3. This Plan and Agreement creates no rights in the Executive
to continue in the employment of the Employer for any length of time, nor does
it create any rights in the Executive or his beneficiaries nor any obligations
on the part of the Employer, other than those specifically provided herein.
4. This Plan and Agreement shall be binding upon and inure to
the benefit of the Employer, its successors and assigns, and the Executive, his
heirs, executors, administrators and legal representatives.
5. The waiver by any party of any term of this Plan and
Agreement on any occasion shall not be deemed to be a further or continuing
waiver of any such term.
6. Written notices which the Executive must provide to the
Employer under this Plan and Agreement (including, but not limited to,
investment directions, benefit distribution elections and beneficiary
designations) shall be addressed to the Employer, Attention: Chief Financial
Officer, at: 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxxxxx Xxxxxx - Xxxxx 000X,
Xxxxxxxxx, Xxxxxxx 00000.
7. This Plan and Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Florida without giving
effect to principles governing choice of law.
8. This Plan and Agreement may be terminated or amended only
by a writing signed by both of the parties hereto.
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IN WITNESS WHEREOF, this Plan and Agreement has been duly
executed by the Employer and by the Executive as of the day and year first above
written.
Witness: CONCORD CAMERA CORP.
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxx X. Xxxxxxx
------------------------------------ ---------------------------------
Xxx X. Xxxxxxx
Chairman and CEO
Witness: EXECUTIVE:
/s/ Xxxx Xxxxxxxxxx By: /s/ Xxxx Xxxxxxxxx
------------------------------------ ---------------------------------
Xxxx Xxxxxxxxx
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