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SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
This Supplemental Executive Retirement Plan (the "SERP") is entered
into this 14th day of May, 1997, between X. X. XXXXX CO. (the "Company") and
XXXXXXX X. XXXX ("Executive"):
1. Objectives. This SERP is intended to provide for a payment
after retirement to the Executive, who is currently a Group Vice President of
X. X. Xxxxx Co., in recognition of his past and future years of service with
the Company and the limitations imposed on his and the Company's contributions
to the Company's Profit Sharing Plan.
2. Bookkeeping Account. The Company shall cause a bookkeep-ing
reserve account (the "Account") to be established for the Executive solely as a
device for determining the amounts which may become payable to the Executive
hereunder. Such Account shall not constitute or be treated as a trust fund of
any kind, it being expressly provided that the amounts credited to the Account
shall at all times be and remain the sole property of the Company. The
Executive shall have no proprietary rights of any nature with respect thereto,
unless and until such time as a payment thereof is made to the Executive (or
beneficiary) as provided herein. Amounts shall be credited to the Executive's
Account as follows:
(a) Provided only that the Executive is in the employ-ment of the
Company as of August 1, 1997, $200,000 shall be credited to the Account. If the
Executive is in the employment of the Company as of August 1, 1998, an
additional $200,000 shall be credited to the Account and an additional $200,000
shall be credited to the Account as of August 1, 1999, 2000 and 2001 if the
Executive is in the employment of the Company as of those dates.
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(b) Interest shall accrue on the balance in the Executive's
Account at the prime rate (base rate on corporate loans) in effect August 1 of
each year as reported by the principal bank or financial institution with which
the Company is doing busi-ness, and shall be credited to the Account annually as
of August 1 of each year, until all distributions to which the Executive, the
Executive's estate or beneficiary is entitled, shall have been made. However,
the interest rate used shall never be less than six percent (6%) or more than
ten percent (10%). If a lump sum amount distribution is made as of a date other
than August 1, interest shall be credited to the Account as of such payment date
based on the interest rate for the prior August 1.
(c) Notwithstanding paragraph (a), if the Executive dies or is
disabled prior to August 1, 2001 while in the employment of the Company, his
Account shall be credited with the entire $1,000,000. Disability means that the
Executive is disabled as a result of sickness or injury, such that he is unable
to satisfactorily perform the material duties of his job, as determined by the
Board of Directors, on the basis of medical evidence satisfactory to it.
3. Vesting. The Executive shall at all times have a 100% vested
interest in the Account balance established for the Executive under this SERP.
4. Benefit Payment.
(a) Payment shall be made over a 10 year period commenc-ing
on August 1 of the year following the Executive's termination of employment with
the Company (the "First Payment Date"), with the first payment being one-tenth
of the amount credited to the Executive's Account, and thereafter an amount
shall be paid to the Executive as of the first day of each August thereafter in
an
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amount equal, as nearly as possible, to the amount paid on the First Payment
Date plus any interest credited to the Account in the period intervening since
the last payment, until a total of ten payments have been made. Such 10
payments, regardless of the total amount thereof, shall constitute full
payment of all amounts due the Executive under this SERP.
(b) The Executive shall have the right to designate a beneficiary
or beneficiaries to receive a distribution with respect to any potion of such
Executive's Account remaining unpaid at the Executive's death. Such designation
shall be effected by filing written notification with the Company in the form
prescribed by it and may be changed from time to time by similar action. If the
Executive fails to make such a designation, any such distribution shall be paid
to the Executive's estate or its successors. The amount remaining in the
Account shall be paid to the beneficiary or the Executive's estate for the
balance of the applicable ten year period in the same manner and amount as it
would have been paid to the Executive.
(c) The Company may, in its uncontrolled discretion, and in lieu
of the annual payments provided for in this paragraph and upon such terms and
conditions as the Board of Directors of the Company may determine, pay the
Executive or his beneficiary the amount credited to the Account (1) in larger
installments, includ-ing a lump sum, or (2) in some other manner; provided,
however, that the payments cannot be made in smaller amounts or over a period
longer than provided in paragraph 4(a), without the Executive's consent.
5. Claim Procedure. The Company shall provide adequate notice in
writing to the Executive or the Executive's beneficiary (a "Claimant") if any
claim for benefits under this SERP has been
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denied setting forth specific reasons for such denial and advising the Claimant
of the procedures to be followed to obtain a full and fair review by the
Company or some other fiduciary named by it of the decision denying the claim.
The Company or such other named fiduciary, acting as administrator for this
SERP, shall have full and complete discretionary authority to construe and
interpret this SERP, to adopt and modify claim procedure rules, and to decide
any matter presented through the claim review procedure. Any final decision on
review by such administrator in good faith and in the exercise of its
discretionary authority shall be final and binding on all parties and not
subject to reversal if challenged in litigation unless proven to be arbitrary
and capricious based on the evidence considered by the administrator at the
time of such final decision.
6. Miscellaneous.
(a) Neither the Company nor the Executive nor any beneficiary
shall have the power to transfer, assign, encumber, commute or anticipate any
amounts payable hereunder.
(b) The Company shall have the right to withhold from any amounts
payable hereunder, or any amounts otherwise payable, any taxes or other amounts
required by any governmental authority to be withheld.
(c) Every person receiving or claiming payments under this SERP
shall be conclusively presumed to be mentally competent until the date on which
the Company receives a written notice, in a form and manner acceptable to it,
that such person is incompetent and that a guardian, conservator, or other
person legally vested with the care of such person's estate has been appointed.
In the event a guardian or conservator of the estate of any person receiving or
claiming payments under this SERP shall be appointed
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by a court of competent jurisdiction, payments may be made to such guardian or
conservator provided that proper proof of appointment and continuing
qualification is furnished in a form and manner acceptable to the Company. Any
such payment so made shall be a complete discharge of any liability therefor.
(d) Participation in this SERP or the payment of any benefits
hereunder, shall not be construed as giving to the Executive any right to be
retained in the service of the Company or its subsidiaries, limiting in any way
the right of the Company or its subsidiaries to terminate the Executive's
employment at any time, evidencing any agreement or understanding, express or
implied, that the Company or its subsidiaries will employ the Executive in any
particular position or at any particular rate of compensation and/or
guaranteeing the Executive any right to receive a salary increase in any year,
such increase being granted only at the sole discretion of the Board.
(e) None of the payments made hereunder shall be taken into
account under any other pension, profit sharing or welfare benefit plan or
program of the Company.
(f) The schedule attached is an example of the antici-pated
Contributions, Interest and Payments to be made provided that the Executive's
employment terminates on July 31, 2005.
X. X. XXXXX CO.
By Xxxxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
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X. X. XXXXX CO.
XXXXXXX X. XXXX-SERP
Fiscal
Year Contribution 8% Interest Payment Balance
------ ------------ ----------- ------- -------
8/01/97 $ 200,000 - $ $ 200,000
8/01/98 200,000 $ 16,000 416,000
8/01/99 200,000 33,280 649,280
8/01/00 200,000 51,942 901,222
8/01/01 200,000 72,098 1,173,320
8/01/02 93,865 1,267,185
8/01/03 101,375 1,368,560
8/01/04 109.485 1,478,045
8/01/05 118,244 1,596,289
8/01/05 - 159,629 1,436,660
8/01/06 114,933 274,562 1,277,031
8/01/07 102,162 261,791 1,117,402
8/01/08 89,392 249,021 957,773
8/01/09 76,622 236,251 798,144
8/01/10 63,852 223,481 638,515
8/01/11 51,081 210,710 478,886
8/01/12 38,311 197,940 319,257
8/01/13 25,541 185,170 159,628
8/01/14 12,770 172,398 -0-
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$1,000,000 $1,170,953 $ 2,170,953
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