Exhibit 10.23
DEFERRAL AGREEMENT
Deferral Agreement (this "Deferral Agreement") made as of the 2nd day
of June 2000 by and between CONCORD CAMERA CORP., a New Jersey corporation (the
"Employer"), and Xxxxx X. Xxxxxxx (the "Executive").
The Executive is presently an executive of the Employer. The Executive
and the Employer desire to make provisions to permit the Executive to defer the
payment of certain compensation in connection with that employment on the terms
hereinafter provided.
In consideration of the premises and the mutual covenants hereinafter
contained, the parties hereto hereby agree as follows:
ARTICLE I. Deferred Compensation
1. The Employer agrees to defer the payment of certain compensation
earned by the Executive during each calendar year, and such deferred
compensation shall be paid to the Executive as hereinafter provided. The amount
of compensation to be deferred in respect of any year shall be that portion or
all of the Executive's annual compensation including salary, cash bonus and/or
any other compensation earned during such year as the Executive elects to defer
by written notice given to the Employer prior to the first day of such year;
provided, however, that:
(a) with respect to compensation to be earned and paid in 2000 after
the execution of an election made pursuant to this Deferral Agreement,
such election may be made within 30 days of the execution of this
Deferral Agreement;
(b) with respect to a cash bonus to be paid in relation to any prior
fiscal year which ended on or about June 30th such election may be made
either: (i) on or before the last day of the calendar year in which the
bonus is to be paid, provided that the election is made at least 90
days before the bonus becomes payable; or (ii) prior to the last day
of the fiscal year to which the bonus relates;
(c) with respect to any increase in the Executive's annual salary made
during the year and payable after an election made pursuant to this
Deferral Agreement, such election may be made within 30 days of the
date when the amount and effective date of the increase are first made
known to the Executive; and
(d) with respect to any compensation newly awarded to the Executive
during the year and payable after an election made pursuant to this
Deferral Agreement, such election may be made within the later of: (i)
30 days from the date when the amount and effective date of the new
compensation are first made known to the Executive; or (ii) 30 days
before any portion of such compensation will first be carried by the
Executive.
2. The Employer shall establish and credit to a special account on its
books (hereinafter referred to as an "Account") the amount of deferred
compensation specified pursuant to paragraph 1 of this Article I. The Employer
shall keep separate Accounts for deferred compensation in respect of particular
years to the extent necessary to account for differing elections and
designations hereunder regarding investments, benefit distributions and
beneficiaries for such years. If a portion or all of the Executive's annual
salary for a year is deferred under paragraph 1, one-twelfth (or in the case of
2000, a fraction, the denominator of which is 1 and the numerator of which is
the number of full months remaining in 2000 that are covered by the election) of
such deferred amount shall be credited to the appropriate Account on the last
day of each month during such year. If a portion or all of the Executive's bonus
for a year is deferred under paragraph 1, such deferred amount shall be credited
to the appropriate Account on the later of: (a) the last day of the month in
which the Executive would have received the bonus in cash had he not elected the
deferral under paragraph 1; or (b) five business days after the Company received
the Executive's election to defer such bonus (or a portion thereof).
3. The balance in each Account shall be deemed for purposes of this
Deferral 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 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 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 5 of this Article I, as though such investments and
reinvestments had actually been made.
4. Title to and beneficial ownership of any direct or indirect
investments the Employer may make in connection with this Deferral 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.
5. 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 II. Benefit Distributions
1. The 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. The Executive's election and designation referred to in the previous
sentence with respect to an Account shall be made by a written notice to the
Employer at the time of his deferral election for the year or years to which the
Account relates. The Executive may make different elections and designations
with respect to the deferred compensation of each year, with any such different
elections and designations accounted for through the creation of separate
Accounts as contemplated by paragraph 2 of Article I. In the event that the
Executive fails to make an election pursuant to this paragraph I with respect to
an Account, except as otherwise provided in Article IV and paragraph 5 of this
Article II the 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.
2. All payments to be made pursuant to paragraph 1 of this Article II
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.
3. For purposes of determining the amount of a payment referred to in
paragraph 1 of this Article II with respect to an Account, (a) the balance in
such Account shall be adjusted by the Employer in the manner provided in
paragraph 5 of Article I 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.
4. Except as provided in this paragraph 4, the Executive shall have no
right to modify in any way his election and designation made pursuant to
paragraph 1 of this Article II with respect to an Account or, in the event of
his failure to make such an election or designation, the default provisions of
paragraph 1. 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;
(b) accelerate the date on which distributions from any Account
shall commence;
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(c) change the form of 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 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.
5. Notwithstanding any other provision of this Deferral 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 prior to the Executive's attainment of age 65, the balance in each
Account shall be paid to the Executive in one lump-sum payment within 30 days of
such termination.
6. Notwithstanding any other provision of this Deferral 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.
7. 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.
ARTICLE III. Hardship
The Employer may, in its sole discretion, distribute all or a portion
of the 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 III shall be limited to the amount
necessary to satisfy such financial need.
ARTICLE IV. Death and Disability
1. Notwithstanding any other provision of this Deferral 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 balances in
the Accounts the Employer shall pay, not later than 30 days following the
Executive's death, all remaining balances in the Accounts 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 Deferral 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 balances
in the Accounts the Employer shall pay all remaining balances in the Accounts in
one lump-sum to the Executive not later than 30 days following the Executive's
disability.
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ARTICLE V. 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 Deferral Agreement 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 V.
Except as to amounts provided for in paragraph 7 of Article II, amounts due to
the Executive hereunder may not be offset by the Employer against amounts
claimed to be due from the Executive to the Employer, whether by withholding by
the Employer of payment or by assertion by the Employer of defenses, claims,
counterclaims or setoffs in a litigation commenced by either party with respect
to this Agreement or any other matters; provided, however, that the Employer
shall have the right to raise any such defenses, claims, counterclaims or
setoffs in a separate action.
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 Deferral Agreement on which the decision is based. A copy of the ruling
shall be forwarded to the claimant.
ARTICLE VI. Miscellaneous
1. Benefits provided in this Deferral 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
Deferral 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 Deferral Agreement constitutes a
mere promise by the Employer to make benefit payments as required by Article II,
III and IV.
3. This Deferral 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.
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4. This Deferral 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 Deferral 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 Deferral Agreement (including, but not limited to, deferral
elections, 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: Senior
Financial Officer.
7. This Deferral 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 Deferral Agreement may be terminated or amended only by a
writing signed by both of the parties hereto.
IN WITNESS WHEREOF, this Deferral 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/ Xxxxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Press
--------------------------------- -----------------------------
Witness:
/s/ Xxxxxxxx Xxxxxx /s/ Xxxxx Xxxxxxx
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Amendment to the
Deferral Agreement
for
Xxxxx X. Xxxxxxx
Amendment dated as of June 1, 2002 (this "Amendment"), to the Deferral
Agreement dated as of June 2, 2000 ("Agreement"), by and between CONCORD CAMERA
CORP., a New Jersey corporation (the "Employer") and XXXXX X. XXXXXXX (the
"Executive").
The Employer and the Executive agree that the Agreement is hereby
amended as follows:
1. The following new paragraph 8 is inserted at the end of Article II:
"8. Notwithstanding any other provision of the 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 7 of this Article II 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 7). Such penalty amount shall
be deemed forfeited and no longer payable to the Executive."
2. Unless otherwise provided herein, all capitalized terms shall have
the meaning assigned to such terms in the Agreement.
3. The foregoing amendment to the Agreement is effective as of June 1,
2002.
IN WITNESS WHEREOF, this Amendment has been duly executed by the
Employer and by the Executive as of the date indicated above.
Witness: CONCORD CAMERA CORP.
/s/ Xxxxxxxx Xxxxxx By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
Senior Executive Vice President
and Chief Operating Officer
Witness:
/s/ Chui Xxx Xxx /s/ Xxxxx X. Xxxxxxx
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XXXXX X. XXXXXXX
