1
Exhibit 10.4
GENICOM CORPORATION
RETIREMENT INCOME AGREEMENT
WITH XX. XXXX X. XXXX
2
TABLE OF CONTENTS
Page
Section 1. Purpose...................................................... 1
Section 2. Definitions.................................................. 1
Section 3. SRI Formula.................................................. 3
Section 4. SRI Eligibility.............................................. 3
Section 5. Payment of SRI .............................................. 4
Section 6. Form of SRI Payment.......................................... 4
Section 7. No Competition............................................... 4
Section 8. Pre-Retirement Survivor Annuity Coverage..................... 5
Section 9. Effective Date............................................... 5
Section 10. Unfunded Agreement.......................................... 5
Section 11. Non-Guarantee of Employment................................. 6
Section 12. Amendment................................................... 6
Section 13. Non-Assignability........................................... 6
Section 14. Withholding of Taxes........................................ 6
Section 15. Successor Company........................................... 6
Section 16. Governing Law............................................... 6
i
3
GENICOM CORPORATION
RETIREMENT INCOME AGREEMENT WITH
XX. XXXX X. XXXX
AGREEMENT between XXXX X. XXXX (the "Executive") and GENICOM
CORPORATION ("GENICOM").
Section 1. Purpose. The purpose of this Agreement is to provide
supplemental retirement income to Xx. Xxxx X. Xxxx, President & Chief Executive
Officer of GENICOM Corporation ("GENICOM") whose regular retirement benefits are
in the opinion of the Board of Directors insufficient in comparison to his
Terminal Compensation, as hereinafter defined.
Section 2. Definitions. The following terms will have the following
meanings unless otherwise clearly required by the context:
(a) "Actuarial Equivalent" will mean an equivalent value
determined by an actuary employed by GENICOM based on the actuarial assumptions
provided in Exhibit A, as it may be revised from time to time.
(b) "Agreement" will mean this GENICOM Corporation Retirement
Income Agreement with Xx. Xxxx X. Xxxx, as amended from time to time.
(c) "Cause" will mean: (i) the Executive's material
misappropriation with respect to the business or assets of GENICOM, (ii) the
Executive's conviction, guilty plea or nolo contendere of a felony involving
moral turpitude, (iii) the Executive's use of drugs or alcohol that interferes
materially with the Executive's performance of his duties for a substantial
period, or (iv) any act determined by a majority of GENICOM's Board of Directors
to materially and adversely affect the business, affairs or reputation of
GENICOM. In connection with any consideration by the Board of whether Cause
exists, the Executive shall have the opportunity to make a presentation to the
Board and any determination by the Board shall be made in good faith.
(d) "Change of Control" will mean the occurrence of any of the
following events:
(i) A third person, including a "group" as defined in
Section 13(d)(3) of the Act, becomes, or obtains the right
to become, the beneficial owner of the common stock of the
Company ("Company Stock") having 25% or more of the combined
voting power of the then outstanding securities of the
Company that may be cast for the election of directors to
the Board of the Company. An acquisition shall be excluded
if made by the Company, a subsidiary or a Company employee
benefit plan;
3
4
(ii) A reorganization, merger or consolidation in which the
beneficial owners of the Company Stock and voting securities of the
Company immediately prior thereto do immediately thereafter
beneficially own, directly or indirectly, more than 75% of the
outstanding shares of common stock and the combined voting power of the
outstanding voting securities of the corporation resulting from such
organization, merger or consolidation;.
(iii) A complete liquidation or dissolution of the Company or the
sale or other disposition of all or substantially all of the assets of
the Company.
(e) "Compensation" will mean the actual periodic salary
compensation and annual bonuses payable in cash, including amounts deducted
therefrom such as, but not limited to, deductions for withheld taxes, paid to
the Executive by GENICOM for personal services, as reported on IRS form W-2.
Compensation will not include any compensation from stock options or the amount
paid in 1998 to the Executive in connection with taxes incurred on the exercise
of stock options. In computing Compensation, any payment for accumulated
vacation that is paid after termination of employment, severance or similar
payments will be excluded.
(f) "Disabled" or "Disability" will mean the inability of a
Participant to perform his normal duties with the Company or any similar duties
due to a physical or mental condition that is expected to last indefinitely. The
Committee shall determine whether a Disability exists and such determination
shall be conclusive.
(g) "Disability Benefit" will mean the value of the Executive's
disability benefits payable under the Federal Social Security Act plus the value
of any disability benefits payable to the Executive under any long-term
disability insurance or program paid for by GENICOM.
(h) "Elective Contributions" will have the same meaning as that
term is defined in Treasury Regulation Section 1.401(k)-1(g)(3).
(i) "Executive's 401(k) Account" will mean the Executive's total
vested benefit in the 401(k) Plan.
(j) "401(k) Benefit" will mean the Actuarial Equivalent of the
value of the benefits payable to the Executive at termination, retirement, death
or permanent disability (as those terms are used in the 401(k) Plan) that are
attributable to GENICOM Contributions and the earnings thereon. Earnings
attributable to GENICOM Contributions will be determined by multiplying the
total earnings realized in the Executive's 401(k) Account by a ratio. The ratio
will be determined by dividing the GENICOM Contributions made to the Executive's
401(k) Account by the total contributions made to the Executive's 401(k)
Account. The date the Executive terminates employment with GENICOM, retires,
dies or becomes
4
5
permanently disabled will be the date for determining total earnings realized in
the Executive's 401(k) Account. The 401(k) Benefit will be calculated in the
form of an Actuarial Equivalent annual single life annuity.
(k) "401(k) Plan" will mean the GENICOM Retirement and Savings
Plan and any other tax-qualified retirement plan or plans sponsored by GENICOM.
(l) "GENICOM Contributions" will mean contributions made by
GENICOM to the Executive's accounts in the 401(k) Plan including any matching
contributions, profit sharing contributions or forfeitures, but excluding
Elective Contributions.
(m) "Social Security Retirement Benefit" will mean the value of
one-half of the Executive's primary insurance amount under the Federal Social
Security Act payable at the Executive's Social Security Retirement Age (as
defined in Internal Revenue Code Section 415(b)(8)), and/or any other comparable
primary insurance amount payable under another governmental retirement program.
The Social Security Retirement Benefit will be calculated in the form of an
Actuarial Equivalent annual single life annuity.
(n) "SRI" will mean the basic supplemental retirement income
payable to the Executive under Section 3(a) of this Agreement.
(o) "Terminal Compensation" will mean an amount equal to one-third
(1/3) of the Executive's Compensation for the three (3) calendar years for which
the Executive received the largest amount of Compensation during the five (5)
consecutive calendar years completed immediately prior to the Executive's
termination, retirement, Disability or death.
(p) "Vested Percentage" will mean the percentage equal to five
percent (5%) times the number of full calendar quarters that have been completed
since April 1, 1998, with the first such calendar quarter ending June 30, 1998,
provided that the Vested Percentage shall be one hundred percent (100%) if the
Executive dies or is Disabled or upon a Change of Control.
Section 3. SRI Formula. The SRI payable to the Executive will equal an
amount in the form of an annual single life annuity determined as follows:
(a) The basic SRI amount (calculated as payable at age 65) is (i)
Seventy Percent (70%) of the Executive's Terminal Compensation reduced by the
sum of the annual amount of: (x) the 401(k) Benefit, (y) the Social Security
Retirement Benefit and (z) the Disability Benefit; times (ii) the Executive's
Vested Percentage. If the basic SRI amount is reduced by a Disability Benefit,
the basic SRI amount shall be increased at any time in the future by the amount
of the Disability Benefit if the Executive ceases to receive the Disability
Benefit for any reason.
(b) If the Executive commences distributions before age 65 for any
reason, the SRI will be the Actuarial Equivalent of the amount calculated under
Section 3(a). The Executive's age will be calculated in years and full months.
5
6
(c) For purposes of offsetting or reducing inflation, the SRI
payments made to the Executive or his surviving spouse will be increased
annually on July 1 by a percentage to reflect the increase in the cost of goods
and services over the previous calendar year and determined in accordance with
the national Consumer Price Index for all goods and services.
(d) The SRI payable to the Executive will also be reduced by any
severance payments made to the Executive under his employment agreement with
GENICOM dated March 26, 1990 or any successor agreement. This SRI reduction will
only apply for periods during which the severance payments are made to the
Executive.
Section 4. SRI Eligibility. The Executive will be eligible to receive
the SRI under the following conditions:
(a) Prior to attaining age 55, the Executive will be eligible to
receive the SRI:
(i) if the Executive is terminated by GENICOM without
Cause, or
(ii) after a Change of Control, upon the Executive's
termination of employment with GENICOM for any reason,
including death, Disability, voluntary termination by the
Executive, or termination by GENICOM for Cause.
(b) Upon attaining age 55, the Executive will be eligible to
receive the vested portion of the SRI upon termination of employment with
GENICOM for any reason, including death, Disability, voluntary termination by
the Executive, or termination by GENICOM for Cause, except for a termination by
GENICOM for Cause prior to a Change of Control.
Section 5. Payment of SRI. One-twelfth (1/12th) of the annual SRI, as
adjusted under Section 3(c), will be payable on the first day of each month
following the Executive's termination, retirement, death or Disability.
Section 6. Form of SRI Payment.
(a) The SRI will be payable as a monthly straight life annuity.
(b) In lieu of the form described in Section 6(a), the Executive
may elect to receive the Actuarial Equivalent of the SRI in a joint and 50%
survivor annuity for the lives of the Executive and his surviving spouse. Under
this form of payment, the Executive will receive reduced payments for his
lifetime and, after his death, a survivor annuity will be payable for the
lifetime of his surviving spouse equal to 50% of the amount of the annuity
payments that were payable to the Executive. If the Executive's spouse dies
after SRI payments begin but before the Executive dies, the SRI will continue to
be paid to the Executive in the same amount that was payable before the death of
his spouse.
6
7
(c) The Executive will be provided suitable forms for the making
of elections under Section 6(b). To be valid, an election or revocation of an
election of the joint and 50% survivor annuity optional benefit form (i) must be
signed by the Executive, (ii) must designate a specific alternate form of
benefit, and (iii) except for an initial election upon participation, will not
be effective until six (6) months after the date of the election. Any election
will remain in effect until six (6) months after a subsequent election is filed
by the Executive.
(d) In lieu of the form described in Section 6(a) or (b), upon a
Change of Control, the Board of Directors of GENICOM, in its sole discretion,
may elect to pay the Executive the Actuarial Equivalent of the SRI in a single
lump sum payment. The lump sum payment may be made at any time within two years
after the Change of Control. After payment of a lump sum to the Executive,
GENICOM will have no further liability to the Executive or his surviving spouse
under this Agreement
Section 7. No Competition. Notwithstanding the provisions of Sections
3, 4, 5 and 6, no SRI will be payable to the Executive if his employment with
GENICOM terminated prior to the date on which the Executive attains the age of
sixty-five (65) years, or to the surviving spouse of the Executive, if within
two (2) years after such termination of employment the Executive, without the
approval of GENICOM as expressed in a resolution by its Board of Directors,
renders services for compensation as an officer, consultant, employee or
otherwise to any corporation or other entity in direct or indirect competition
with GENICOM or any GENICOM subsidiary, or enter into any business or occupation
on a self-employed basis which is in direct or indirect competition with GENICOM
or any GENICOM Subsidiary provided, however, that nothing contained in this
Section 7 will be deemed to require the repayment by the Executive of any SRI
paid to him prior to the time he commences rendering such services or enters
into such business or occupation. This Section 7 shall not apply if the
Executive is terminated by GENICOM without Cause after a Change of Control.
Section 8. Pre-Retirement Survivor Annuity Coverage. The Executive can
elect to have a pre-retirement survivor annuity benefit paid to his surviving
spouse if the Executive dies before the commencement of the SRI payments. If the
Executive is age 55 or older at the time of his death while still in service
with GENICOM or dies after a Change of Control while in service with GENICOM
before age 55, the pre-retirement survivor annuity benefit paid to his surviving
spouse will be the same as the monthly payment which would have been initially
payable pursuant to Section 6 if the Executive had terminated on the date of his
death, had elected to receive the SRI in the form of a joint and 50% survivor
annuity for the lives of the Executive and his surviving spouse, and had died
immediately following such termination. If the Executive dies prior to age 55
while still in service with GENICOM and there has not been a Change of Control,
no pre-retirement survivor annuity benefit will be paid to his surviving spouse.
The pre-retirement survivor annuity benefit will be paid to his surviving spouse
on the first day of each month following the later of the (i) the first month in
which the Executive could have retired and received a SRI payment, or (ii) the
month in which the Executive dies. If the Executive elects pre-retirement
survivor annuity coverage under this Section 8, the SRI payable to the Executive
will be reduced by the Actuarial Equivalent value of the cost of providing
pre-retirement survivor
7
8
annuity coverage. The Executive may elect to have a pre-retirement survivor
annuity benefit paid to his surviving spouse by making an election in the form
and manner described in Section 6(c) for electing the joint and 50% survivor
annuity form of payment.
Section 9. Effective Date. The effective date of the Agreement is
October 23, 1997, the date of approval by the Board of Directors of GENICOM.
Section 10. Unfunded Agreement. There is no fund associated with this
Agreement, except as specifically provided in this Section 10. GENICOM will be
required to make payments only as they become due and payable under the
Agreement. Neither the Executive nor his surviving spouse will have any right,
other than the right of an unsecured general creditor, against GENICOM in
respect to the payments which may be payable, to the Executive or his surviving
spouse hereunder. XXXXXXX agrees to establish a grantor trust to fund its
liability to the Executive. GENICOM shall contribute to the trust assets that
shall be held therein, subject to the claims of GENICOM's creditors in the event
of GENICOM's insolvency until paid to the Executive or his surviving spouse in
such manner and at such times as specified in this Agreement or until all
obligations to the Executive or his surviving spouse under this Agreement has
been terminated. Neither the Executive nor his surviving spouse will have any
right to receive any payment under this Agreement except as and to the extent
expressly provided in this Agreement.
Section 11. Non-Guarantee of Employment. Nothing contained in this
Agreement will be construed as a contract of employment between GENICOM and the
Executive, or as a right of the Executive to be continued in employment or as a
limitation of the right of GENICOM to deal with the Executive, as to his hiring,
discharge, layoff, compensation, and all other conditions of employment in all
respects as though this Agreement did not exist.
Section 12. Amendment. This Agreement may only be amended by a written
instrument signed by the Executive and GENICOM.
Section 13. Non-Assignability. The payments made under this Agreements
will not be subject to alienation, assignment, pledge, garnishment, execution or
levy of any kind and any attempt to cause any such benefits to be so subjected
will not be recognized.
Section 14. Withholding of Taxes. All amounts payable hereunder will be
reduced for the amounts required to be withheld pursuant to any applicable
governmental law or regulation with respect to taxes or any similar provisions.
Section 15. Successor Company. In the event of the dissolution, merger,
consolidation, or reorganization of GENICOM, the successor will have all of the
powers, duties and responsibilities of GENICOM under this Agreement.
Section 16. Governing Law. This Agreement will be construed and
enforced in accordance with, and governed by, the laws of the Commonwealth of
Virginia.
8
9
IN WITNESS WHEREOF, GENICOM Corporation and Xxxx X. Xxxx have caused
this Agreement to be executed the 9th day of March, 1998.
GENICOM CORPORATION
By: /s/ Xxx Xxxxxxxx
(Signature of Officer of Corporation)
------------------------------------------------
XXXX X. XXXX
9
