Exhibit 10.9
CERBCO, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT INCOME AGREEMENT
THIS AGREEMENT is made by and between CERBCO, Inc., a Delaware corporation
("CERBCO") and Xxxxxx X. Xxxxxxx ("Executive").
RECITALS
A. This Agreement's purpose is to provide certain supplemental
retirement and death benefits to the Executive and his Beneficiary in
consideration of his services to CERBCO and its subsidiaries.
B. This Agreement has been approved on CERBCO's behalf by resolution of
CERBCO's Board of Directors.
C. The benefits provided under this Agreement are to be determined by
aggregating the Executive's employment by CERBCO and any one or more of its
subsidiaries as though the employment by these companies were employment by
CERBCO, and by aggregating the Executive's salaries paid by CERBCO and any one
or more of its subsidiaries as though those salaries were all paid by CERBCO.
NOW, THEREFORE, CERBCO and the Executive agree as follows:
1. Retirement Income: Beginning on the first day of the month next
following the month in which occurs the Executive's Normal Retirement Date or,
if later, his Termination Date, CERBCO shall pay to the Executive a monthly
benefit (the "Supplemental Benefit") for the Executive's life equal to 25% of
the Executive's Final Monthly Salary, multiplied by the ratio (not to exceed 1)
of
(i) his completed years (and any fractional year) of employment by
CERBCO after 1992;
(ii) the total number of years (and any fractional year) of employment
by CERBCO after 1992 that he would have completed if he had continued in
employment to his Normal Retirement Date.
If the Executive's Termination Date occurs prior to his Normal
Retirement Date, the Executive shall begin receiving his Supplemental Benefit
payments as of the first day of the month next following the month in which
occurs his 62nd birthday or, if later, his Termination Date, without actuarial
reduction for early payment. In no event shall the Supplemental Benefit payments
begin prior to the later of the Executive's 62nd birthday or his Termination
Date.
2. Death Benefit:
A. After Retirement.
If the Executive dies after the commencement of his
Supplemental Benefit payments but before he has received 180 monthly
Supplemental Benefit payments, CERBCO shall pay to his Beneficiary a monthly
Death Benefit beginning on the first day of the month next following the
Executive's death and continuing until the combined number of monthly payments
under this Agreement received by the Executive and his Beneficiary equals 180.
Each monthly Death Benefit payment under this paragraph 2A is to be equal to the
monthly Supplemental Benefit payment that the Executive was receiving at his
death.
B. Before Retirement.
If the Executive dies before commencement of his Supplemental
Benefit payments, CERBCO shall pay to his Beneficiary a monthly Death Benefit
beginning on the first day of the month next following the Executive's death and
continuing for 180 consecutive monthly payments. Each monthly Death Benefit
payment under this paragraph 2B is to be equal to 25% of the Executive's Final
Monthly Salary.
3. Funding: CERBCO's obligations under this Agreement are intended to
be unfunded for tax purposes and for purposes of Title I of the Employee
Retirement Income Security Act of 1974, as amended, and shall not be secured in
any manner. No asset of CERBCO shall be placed in trust or in escrow or
otherwise physically or legally segregated for the benefit of the Executive or
his Beneficiary, other than under a funding vehicle intended not to cause the
plan to be funded for such purposes. The eventual payment of the payments
described in this Agreement to the Executive, his Beneficiary or any other
person shall not be secured to him or them by the issuance of any negotiable
instrument or other evidence of indebtedness of CERBCO or its subsidiaries.
Neither the Executive, his Beneficiary, nor any other person shall be deemed to
have any property interest, legal or equitable, in any specific asset of CERBCO
or its subsidiaries, and, to the extent that any person acquires any right to
receive payments under this Agreement, that right shall be no greater than, nor
shall it have any preference or priority over, the rights of any unsecured
general creditor.
4. Assignment: No payments, benefits or rights under this Agreement
shall be subject in any manner to anticipation, sale, transfer, assignment,
mortgage, pledge, encumbrance, charge or alienation by the Executive, his
Beneficiary or any other person who could or might possibly receive payments
under this Agreement. In the event of any attempted assignment, alienation,
encumbrance or transfer, CERBCO shall have no further liability under this
Agreement.
5. Amendment and Termination: This Agreement may be amended or
terminated at any time and in any respect by the written agreement of CERBCO and
the Executive. Notwithstanding the foregoing CERBCO's Board of Directors may
amend or terminate this Agreement at any time without the Executive's consent by
advance written notice delivered to the Executive, provided that the Board may
not unilaterally: (i) reduce or modify the Executive's accrued benefit
determined as of the date written notice of the amendment or termination is
received by the Executive or (ii) amend or terminate this Agreement in any
respect after a Change in Control has occurred. The Executive's accrued benefit
as of any date is the Supplemental Benefit (and Death Benefit) that he and his
Beneficiary would receive, under this Agreement, if that date were his
Termination Date (but the Supplemental Benefit or Death Benefits payments are to
be deferred until the earlier of the first day of the month next following the
Executive's death, or the first day of the month next following the month in
which occurs his 62nd birthday or, if later, his actual Termination Date,
without actuarial increase).
6. Vesting and Forfeiture for Cause: The Executive's benefits under
this Agreement (including any benefits payable to his Beneficiary) shall be
fully vested unless his employment by CERBCO is terminated by CERBCO for Cause.
If the Executive is terminated for Cause, all benefits under this Agreement
shall be forfeited. Termination of the Executive's employment by CERBCO for
"Cause" means termination upon:
(i) the willful and continued failure by Executive to substantially
perform his duties with CERBCO (other than any such failure resulting from
his incapacity due to physical or mental illness) after a written demand
for substantial performance is delivered to Executive by CERBCO's Board of
Directors, which demand specifically identifies the manner in which the
Board believes that the Executive has not substantially performed his
duties,
(ii) the willful engaging by the Executive in conduct that is
demonstrably and materially injurious to CERBCO or its subsidiaries,
monetarily or otherwise, or
(iii) the Executive's conviction of, or plead of guilty or nolo
contendere to, a felony in a court of competent jurisdiction in the U.S.
No act or failure to act on the Executive's part shall be deemed
"willful" unless done, or omitted to be done, by the Executive not in good faith
and without reasonable belief that his action or omission was in CERBCO's and/or
its subsidiaries' best interest. The Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to him a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of CERBCO's Board at a meeting called
and held for that purpose (after reasonable notice to the Executive and an
opportunity for the Executive and his counsel to be heard before the Board),
finding that in the good faith opinion of the Board the Executive engaged in
conduct described under clauses (i), (ii) or (iii) above and specifying the
particulars thereof.
7. Other Retirement Benefits: This Agreement supersedes any other plan
or agreement adopted prior to Agreement that provides retirement benefits to the
Executive, except (i) any retirement or other deferred compensation plan
intended to qualify under Section 401 or 403 of the Internal Revenue Code of
1986, (ii) any plan or agreement that expressly provides that its benefits are
not to be superseded by this Agreement and (iii) any nonqualified plan or
agreement to which the Executive has made contributions directly or by salary
reduction.
8. Construction: This Agreement shall be construed according to the
laws of Maryland, except where superseded by Federal law. Use of the masculine
gender includes the feminine gender, use of the singular case includes the
plural, and vice versa. The invalidity of any portion of this Agreement shall
not invalidate the remainder of the Agreement, which shall continue in full
force and effect. The Supplemental Benefits and the Death Benefits are to be
payable in the same manner as salary payments are made by CERBCO to its
executives. All payments are subject to applicable withholding and other taxes
required by law. CERBCO's Board of Directors shall adopt procedures for
consideration of, and action with respect to, any claims made hereunder.
9. Successors: This Agreement shall be binding upon the Executive and
CERBCO and their successors, assigns, heirs, executors and beneficiaries.
10. Definitions: When used in this Agreement, the following terms have
the meanings indicated below, unless a different meaning is clearly indicated by
the context:
"Beneficiary" means the person or persons (who may be named
contingently or successively) designated by the Executive from time to time to
receive the Death Benefits as may be payable under this Agreement upon or after
the Executive's death. Any such beneficiary designation may be changed from time
to time by the Executive by filing a new designation. Each designation by the
Executive will revoke all prior designations by the Executive, shall be in the
form prescribed by CERBCO and will be effective only when filed in writing with
CERBCO during the Executive's lifetime. In the absence of a valid Beneficiary
designation or, if at the time any Death Benefit payment is due to a
Beneficiary, there is no living Beneficiary validly named by the Participant,
CERBCO shall pay any such benefit to the Executive's spouse, if his spouse is
then surviving or, if the spouse is not surviving, or the Executive has no
spouse, to the Executive's estate.
"Change in Control" means the occurrence of either of the following
events: (1) a change of a nature that would be required to be reported, by
persons or entities subject to the reporting requirements of Section 13(d) of
the Securities and Exchange Act of 1934 (hereinafter called the "Exchange Act"),
in Schedule 13D of Regulation 13D-G, or any successor provisions thereto,
promulgated under the Exchange Act; provided that a Change in Control shall be
deemed to have occurred only if (a) any "person" (as that term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 issued under the Exchange Act), directly or
indirectly, of securities of CERBCO representing ten percent (10%) or more of
the combined voting power of CERBCO's then outstanding securities; and (b) at
any time during the period of thirty-six (36) months subsequent to the ownership
change described above, individuals who at the beginning of such period
constitute CERBCO's Board cease for any reason to constitute at least a majority
thereof unless the election, or the nomination for election by CERBCO's
shareholders, of each new Director was approved by a vote of at least two-thirds
of the Directors still in office who were Directors at the beginning of such
thirty-six (36) month period; or (2) any "person", as described above, is or
becomes the "beneficial owner," directly or indirectly, of securities of CERBCO
representing forty percent (40%) or more of the combined voting power of
CERBCO's then outstanding securities.
"Final Monthly Salary" means the monthly equivalent of the Executive's
highest combined rate of base annual salary earned by him from CERBCO and all of
its subsidiaries, before any salary reductions elected by the Executive;
provided, however, that the Executive's "Final Monthly Salary" shall not exceed
the amount of $7,500, increased by 2% (compounded annually) for each full
calendar year that elapses between December 31, 1992 and the Executive's
Termination Date.
"Normal Retirement Date" means the Executive's 65th birthday.
"Termination Date" means the date that the Executive's employment by
the CERBCO group terminates for any reason, voluntarily or involuntarily.
IN WITNESS WHEREOF, the Executive and CERBCO have entered into this Agreement,
effective as of January 1, 1994.
ATTEST: CERBCO, INC.
Xxxxxx X. Xxxxxxx By: Xxxxxx Xx. Xxxxxxx
Assistant Secretary Its Chairman
[Corporate Seal]
WITNESS: EXECUTIVE
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx
FIRST AMENDMENT TO THE CERBCO, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT INCOME AGREEMENT
WITH XXXXXX X. XXXXXXX
THIS AGREEMENT is made by and between CERBCO, Inc., a Delaware
corporation ("CERBCO") and Xxxxxx X. Xxxxxxx ("Executive").
A. WHEREAS, CERBCO and Executive entered into a Supplemental Executive
Retirement Income Agreement, effective as of January 1, 1994 (the "Agreement")
to provide certain supplemental retirement and death benefits to the Executive
and his beneficiary in consideration of his services to CERBCO and its
subsidiaries.
B. CERBCO and the Executive now desire to amend the Agreement to
substitute split-dollar death benefit arrangement for the death benefits
provided under the Agreement.
NOW, THEREFORE, CERBCO and the Executive agree as follows:
Subsection B. (titled "Before Retirement") of Section 2 (titled "Death
Benefit") of the Agreement shall be deleted in its entirety, effective as of
July 1, 1997, and the following new Subsection 2.B is substituted therefor:
B. Before Retirement.
If the Executive dies before the commencement of his
Supplemental Benefit payments hereunder, CERBCO shall pay to his
Beneficiary a one-time, lump sum Death Benefit in the amount of Seven
Hundred Thousand Dollars ($700,000.00) in lieu of all other benefits
provided under this Agreement. The lump sum death benefit shall be paid
to the Executive's beneficiary within 90 days after the date of the
Executive's death.
The Agreement, as amended by the foregoing change, is hereby ratified
and confirmed in all respects.
IN WITNESS WHEREOF, the Executive and CERBCO have entered into this
Agreement effective as of July 1, 1997.
ATTEST CERBCO, INC.
Xxxxxx X. Xxxxxxx By: Xxxxxx Xx. Xxxxxxx
Secretary Its: Chairman
[Corporate Seal]
WITNESS EXECUTIVE
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx
