Exhibit 10.45
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AND AGREEMENT
FOR
XXXXXXX X. XXXXXXXXXX
This Supplemental Executive Retirement Plan and Agreement for XXXXXXX
X. XXXXXXXXXX, made as of July 22, 2002 by and between CONCORD CAMERA CORP., a
New Jersey corporation (the "Employer") and XXXXXXX X. XXXXXXXXXX (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 performed by the Executive for the
Employer in the past and to be performed 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 eight accounts established by the Employer for the
benefit of the Executive, each reflecting the initial credit described in
Section 1 of Article III and adjustments for income, expenses, gains or losses
and any payments from the accounts.
Plan and Agreement - this Supplemental Executive Retirement Plan and
Agreement for Xxxxxxx X.
Xxxxxxxxxx.
Article III. Deferred Compensation
1. The Employer agrees to credit as of July 22, 2002: $12,500 to each
of Account I, Account II, Account III, Account IV, Account V, Account VI,
Account VII and Account VIII, 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's 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 after the day of 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 deemed 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.
For the avoidance of doubt, the Employer in its sole discretion shall
determine the manner in which the balances in each Account are actually invested
and whether or not to actually invest the balances at all. Regardless of whether
any such investment is actually made by the Employer, the investments and
reinvestments shall be "deemed" to have been made as described in the preceding
paragraph and the balances in each Account shall be increased or decreased
pursuant to paragraph 4 of this Article III, as though such investments and
reinvestments had actually been made.
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.
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Article IV. Vesting
1. The balances in the Accounts shall vest as follows:
Account Vesting Date
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Account I July 22, 2003
Account II July 22, 2004
Account III July 22, 2005
Account IV July 22, 2006
Account V July 22, 2003
Account VI July 22, 2004
Account VII July 22, 2005
Account VIII July 22, 2006
In the event that the Executive's employment is terminated by the Employer
without "Cause," the balances in Accounts V, VI, VII and VIII shall immediately
vest. In the event the Executive's employment with the Employer is terminated
for any other reason (or no reason) prior to the vesting of the balance in one
or more Accounts, the balance in such Accounts shall be immediately forfeited
and the Executive shall have no further interests in such balance. For purposes
of this Agreement, "Cause" shall mean "cause" as defined in the most recent
employment agreement between the Executive and the Employer.
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 provided for in paragraph 1 of Article III, the
Executive 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, the vested balance in each Account shall be
paid to the Executive in one of the two following methods at the election of the
Executive: (a) a lump-sum payment to be paid at such time as is designated by
the Executive or (b) annual installment payments over such period of years as
may be designated by the Executive; provided, however, no payment shall be
payable pursuant to this Article V prior to the earlier of July 22, 2006 or the
termination of the Executive's employment with the Employer.
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2. The Executive's election and designation referred to in Paragraph 1
of this Article V with respect to an Account shall be made by a written notice
to the Employer prior to August 21, 2002. The Executive may make different
elections and designations with respect to each Account.
3. In the event that the Executive fails to make an election pursuant
to paragraph 1 of this Article V with respect to an Account, except as otherwise
provided in Article VII and paragraph 7 of this Article V, 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, and (b) to the extent investments have actually been made 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.
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 4 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
Account, 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 of this Article V with respect to an Account 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, the Executive may:
(a) delay the date on which a lump-sum payment from such
Account shall be made;
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(b) subject to the last sentence of paragraph 1 of this
Article V, accelerate the date on which 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) subject to the last sentence of paragraph 1 of this
Article V, 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 any other provision of this Plan and Agreement to
the contrary and notwithstanding any elections made by the Executive, in the
event of the termination of the Executive's employment with the Employer for any
reason (or no 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.
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 and paid 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 the balance in an Account
is 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 (except for the last sentence of paragraph 1 of this Article V) and
notwithstanding any elections made by the Executive, subject to the last
sentence of paragraph 1 of this Article V 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.
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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. Notwithstanding any other provision of this Plan and Agreement to
the contrary and notwithstanding any elections made by the Executive, in the
event of the Executive's death prior to the payment of all of the vested
balances in the Accounts the Employer shall pay all remaining vested balances in
the Accounts, not later than 30 days following the Executive's death, in one
lump-sum to the 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.
2. Notwithstanding any other provision of this Plan and Agreement to
the contrary and notwithstanding any elections made by the Executive, in the
event of the Executive's disability prior to the payment of all of the vested
balances in the Accounts, the Employer shall pay all remaining vested balances
in the Accounts in one lump-sum to the Executive not later than 30 days
following the Executive's disability.
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.
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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.
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 provision of this Plan and Agreement
on any occasion shall not be deemed to be a further or continuing waiver of any
such provision.
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 at: 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxxxxx Xxxxxx -
Xxxxx 000X, Xxxxxxxxx, Xxxxxxx 00000; Attention: Treasurer.
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
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Xxx X. Xxxxxxx
Chairman, Chief Executive Officer
and President
Witness:
/s/ Xxxxxxxx X. Xxxxxxxx /s/ Xxxxxxx X. Xxxxxxxxxx
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XXXXXXX X. XXXXXXXXXX
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