Exhibit 99.1
DEFINED CONTRIBUTION DEFERRED COMPENSATION PLAN
AGREEMENT, made and entered into this 21st day of March, 2001, by and between
Investors Capital Holdings, Ltd., a corporation organized under the laws of the
Commonwealth of Massachusetts, having its principal place of business at
Lynnfield, Massachusetts ("Employer") and Xxxxxxxx X. Xxxxxxx, of Gloucester,
Massachusetts ("Executive").
WITNESSETH THAT:
WHEREAS, Employer employs Executive in the position of Chief Executive Officer;
WHEREAS, Executive has provided and continues to provide valuable services to
Employer;
WHEREAS, the Board of Directors believes that it is in Employer's best interest
to retain Executive's services; and
WHEREAS, Executive wishes to defer a portion of his current and future
compensation and enter into an agreement that will provide him with compensation
in the future.
NOW, THEREFORE, in consideration of the promises contained herein, and for other
good and valuable consideration, receipt of which both parties hereby
acknowledge, Employer and Executive mutually agree as follows:
ARTICLE I
CONTRIBUTIONS
A. Beginning on April 1, 2001 and continuing thereafter on or about the 1st day
of each month ("Contribution Date"), Executive will defer and Employer will
credit the sum of $8,333.33 ("Deferred Amount") to a deferred compensation
account ("Deferred Account") established for Executive. Unless otherwise elected
by Employer, no amount will be credited to the Deferred Account on or after any
Contribution Date if Executive was not employed on a full-time basis during the
entire period between Contribution Dates.
B. Deferred amounts will be invested in such assets, including single and/or
joint life insurance policies, as Employer may select. To the extent feasible,
Employer will confer with Executive prior to making or changing any investments,
and Executive may, from time to time, submit investment recommendations to the
Plan Administrator. This fact notwithstanding, Employer retains the right to
make all investment decisions in its sole discretion. All such assets ("Account
Assets") will be identified and allocated to the Deferred Account for the sole
purpose of measuring the Deferred Account's value, and will remain part of
Employer's general assets and subject to the claims of Employer's creditors.
Deferred Account assets shall be valued at their fair market value without
regard to any liens, security interests or loan, except for loans used to pay
benefits pursuant to the terms of this Agreement. Any life insurance policy will
be valued at its cash surrender value until a death benefit is payable, at which
point the value of the
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Deferred Account will be based on the death benefit received by Employer rather
than the policy's cash surrender value.
C. It is understood and agreed that Employer will have all right, title and
interest in all assets used to measure the value of the Deferred Account, and
that neither Executive nor any heirs, beneficiaries or creditors shall have any
right, title or interest in any of Employer's assets as a result of this
Agreement, whether or not the asset is used to measure the value of the Deferred
Account. Employer is free to select the source of the payment of any benefits
under this Agreement, without any obligation to use any particular asset or
assets. At no time will the creditor status of Executive, or of any person or
entity claiming benefits under this Agreement, be greater than that of an
unsecured general creditor. This Agreement constitutes an unsecured promise by
Employer to pay benefits. It is the intention of the parties that, in form,
substance and operation, this Agreement will constitute an "unfunded" deferred
compensation plan under the Employee Retirement Income Security Act of 1974, as
amended, and the United States Internal Revenue Code of 1986, as amended.
ARTICLE II
RETIREMENT BENEFIT
A. A retirement benefit will be paid upon Executive's retirement on or after
attaining age sixty (60).
B. The Deferred Account will be paid either in a single payment, in cash or in
kind, or in installments, over a period of ten (10) years. The first installment
or single payment will be made thirty (30) days following the date of
Executive's retirement.
C. No later than ninety (90) days prior to retiring, Executive may elect to have
the Deferred Account paid in a single payment, in cash or in kind, or in
installments,. If installment payments are elected, Executive must also choose
one of the following installment options: (1) annual, (2) quarterly or (3)
monthly. In default of Executive's election, Employer will elect the form of
payment.
D. The amount of each installment shall be calculated as follows. For the first
year of retirement, the value of the Deferred Account on the date of retirement
shall be divided by ten (10) to determine the annual benefit ("Annual Benefit")
for that year. On each respective yearly anniversary date of Executive's
retirement, the divisor shall be reduced by one (1) to arrive at a particular
year's Annual Benefit. As a result of this annual divisor reduction, the divisor
for the last Annual Benefit will be one (1). To arrive at the amount of each
installment, each year's Annual Benefit shall be divided by the number of
installments for that year. This fact notwithstanding, the final installment
payment shall equal the remaining balance of the Deferred Account.
E. If Executive dies before the Deferred Account has been paid in full, the
single payment in cash or in kind, or if applicable, any remaining installments,
will be made to Executive's designated beneficiary; or if there is no designated
beneficiary, to Executive's estate.
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ARTICLE III
PRE-RETIREMENT DEATH BENEFIT
A. A pre-retirement death benefit will be paid if Executive dies prior to
retirement under Article II, provided Executive is employed by Employer at the
time of his death.
B. The Deferred Account will be paid in a single payment or in installments over
a period of ten (10) years. If the value of the Deferred Account is measured by
a life insurance policy or policies insuring Executive's life, and a death
benefit is payable as a result of Executive's death, the first installment or
single payment will be made thirty (30) days following Employer's receipt of the
life insurance death benefit. Otherwise, the first installment or single payment
will be made thirty (30) days after Executive's death. Notwithstanding, the
foregoing provisions of this Article, Employer will retain any benefit payable
to Executive's estate until the appointment of an executor or administrator.
C. Executive may elect to have the Deferred Account paid in a single payment or
installments. If installment payments are elected, Executive must also choose
one of the following options: (1) annual, (2) quarterly or (3) monthly. In
default of Executive's election, Employer will elect the form of payment.
D. The provisions of Article II shall apply to the calculation of each
installment payable under this Article III, except that the value of the
Deferred Account shall be calculated on the date of Executive's death with
adjustments as provided in Article I, Section B, for life insurance death
benefits.
E. Payments shall be made to Executive's designated beneficiary, or, if there is
no designated beneficiary, to Executive's estate.
ARTICLE IV
TERMINATION OF EMPLOYMENT
A. If Executive's employment terminates, other than as a result of death, prior
to retiring as provided in Article II, Executive will be paid a termination of
employment benefit equal to the total cumulative Deferred Amounts compounded at
an average annual rate of eight percent (8.00%). If Executive's employment
terminates as a result of death, no benefits will be paid under this Article IV.
B. Employer will pay the benefit under this Article IV in a single payment
thirty (30) days following the date of termination.
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ARTICLE V
HARDSHIP DISTRIBUTIONS
A. While employed by Employer, Executive may apply to the Plan Administrator for
a hardship distribution. Any such distribution is subject to Employer's sole
discretion, and can be made only for an unforeseeable emergency. The term
"unforeseeable emergency" means a severe financial hardship to Executive or his
dependents resulting from a sudden and unexpected illness or accident, loss of
Executive's property due to a casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of circumstances beyond
Executive's control. No payment will be made to the extent other options to
relieve the hardship are reasonably available to Executive.
B. The value of the Deferred Account will be reduced by any such hardship
distribution.
ARTICLE VI
CLAIMS PROCEDURE
A. Executive or beneficiary ("Claimant"), or duly authorized representative,
must file a claim for benefits with C. Xxxxx Xxxxxx ("Plan Administrator").
Employer reserves the right to change the Plan Administrator from time to time,
and will notify Executive of any such change.
B. If the claim is denied in whole or in part, written notice of the decision
will be furnished to Claimant within a reasonable time after receipt of the
claim. The notice will be prepared in a manner calculated to be understood by
Claimant and will (1) state the specific reason or reasons for the denial; (2)
refer specifically to the pertinent provisions of this Agreement on which the
denial is based; (3) describe any additional material or information necessary
for Claimant to perfect a claim and an explanation as to why such material or
information is necessary; and (4) provide appropriate information as to the
steps to be taken by Claimant if Claimant wishes to submit the claim for review.
C. A denied claim is appealable to Xxxxxxx X. Xxxxxx ("Named Fiduciary") for
review. Employer reserves the right to change the Named Fiduciary from time to
time. Claimant, or Claimant's duly authorized representative, must request
review in writing no later than sixty (60) days after receipt of notice of
denial of the claim. Claimant, or Claimant's duly authorized representative, may
review pertinent documents and submit issues and comments in writing. Named
Fiduciary may, at his discretion, hold a hearing. Named Fiduciary will make a
written decision promptly following receipt of the request for review. Absent
special circumstances, this decision will be made no later than sixty (60) days
following receipt of the request for review. The decision on review will include
specific reasons for the decision and will be written in a manner calculated to
be understood by Claimant. The decision will also include specific references to
the pertinent provisions of this Agreement on which the decision is based.
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ARTICLE VII
MISCELLANEOUS
A. Neither Executive nor any beneficiary or creditor of Executive shall have any
right or anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment or garnishment. In the event of an attempted assignment,
alienation, sale, pledge or transfer, Employer shall have no further liability
or responsibility for the payment of benefits hereunder.
B. The term "beneficiary" includes any person, trust or other entity, including
the plural, last designated in writing by Executive and filed with Plan
Administrator. Executive may revoke or change any beneficiary designation, in
whole or in part, without the beneficiary's consent.
C. Named Fiduciary and Plan Administrator shall have the discretionary authority
to interpret the terms of this Agreement.
D. This Agreement may be amended or revoked, in whole or in part, only by the
written agreement of both Employer and Executive.
E. This Agreement is binding on the parties, as well as their beneficiaries,
heirs and successors.
F. This Agreement will be executed in duplicate, with one copy retained by each
party. Both copies shall be considered an original copy and together shall
constitute one and the same Agreement.
G. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts.
INVESTORS CAPITAL HOLDINGS, LTD.
By: /s/ XXXXXXX X. XXXXXX Date: MARCH 21, 2001
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Xxxxxxx X. Xxxxxx,
Executive Vice President
/s/ XXXXXXXX X. XXXXXXX Date: MARCH 21, 2001
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Xxxxxxxx X. Xxxxxxx
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