Exhibit 10.7
Xxxx X. Xxxxxxx Company
Supplemental Retirement Agreement
THIS AGREEMENT (the "Agreement"), dated as of January 1, 2002, between Xxxx X.
Xxxxxxx Company, a Georgia corporation (the "Company"), and Xxxxxxx X. Xxxx (the
"Employee").
WHEREAS, the Employee serves as Chairman and Chief Executive Officer of the
Company, and is in a position to contribute materially to the continued growth,
development and future business of the Company; and
WHEREAS, the Company desires to provide supplemental retirement and life
insurance benefits to the Employee, in accordance with the employment letter
dated January __, 2002;
NOW, THEREFORE, the Company and the Employee agree as follows:
A. Supplemental Retirement Benefits.
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(1) Normal Retirement Benefit: Upon retirement from the Company
after attaining age 65, the Employee shall be eligible to
receive from the Company an annual benefit of $186,288,
payable in equal monthly installments of $15,524, for a period
of 10 consecutive years.
(2) Payment of the benefit described in Section A.(1) shall
commence on the first day of the month following the later of
the Employee's 65th birthday or his termination of employment
with the Company.
(3) Early Retirement: If the Employee's employment with the
Company terminates (for reasons other than death) at any time
before age 65, the benefit described in Section A.(1) will be
payable to him beginning on the first day of the month
following his 65th birthday.
(4) Optional Form and Timing: Alternatively, the Employee may
elect at least six months prior to termination of employment
and in a calendar year prior to the date as of which benefits
commence to
(a) receive a single lump sum payment of $1,400,000 on
the first day of the month following the later of
the Employee's 65th birthday or his termination of
employment, or
(b) begin receiving reduced installment benefits (as
compared to the normal benefit) or a reduced lump sum
payment (as compared to Section A.(4)(a)) on the
first day of any month following his termination of
employment and prior to age 65 in the amount
described in the schedule below based on his age at
the time benefits commence.
Employee may change his election as to the form of benefit and
the time benefits are scheduled to commence at any time before
his termination of employment, but the form and timing of
payment will be governed by the most recent such election made
at least six months prior to his termination and benefits
(other than the normal benefit described in Section A.(1) paid
at the time described in Section A.(2)) may not be paid before
the first day of January in the calendar year following the
calendar year during which such election was made. Benefits
that begin before Employee's 65th birthday will be reduced as
follows based on the Employee's age on the benefit
commencement date:
Birthday in Month
Preceding Benefit
Commencement Lump Sum Amount of Annual Benefit
55 $ 257,600 $34,277
56 $ 360,640 $47,988
57 $ 463,680 $61,699
58 $ 566,720 $75,410
59 $ 699,760 $89,120
60 $ 772,800 $102,831
61 $ 875,840 $116,542
62 $ 978,880 $130,253
63 $1,176,000 $156,482
64 $1,288,000 $171,385
If benefits commence as of the first day of any month other
than the month immediately following the Employee's birthday,
the amount of such benefits will be adjusted to reflect the
number of calendar months that have elapsed since the
Employee's last birthday.
(5) Death Prior to Commencement of Benefit Payments: In the event
the Employee dies prior to commencement of benefit payments,
his designated beneficiary shall receive a lump sum payment as
soon as practicable following the Employee's death equal to
the lump sum payment that would have been made to the Employee
if he had elected to receive a lump sum payment under Section
A.(4) as of the first day of the month following his death.
(6) Death following Commencement of Benefit Payments: In the event
the Employee dies following commencement of monthly retirement
benefit payments under this Agreement, his designated
beneficiary shall receive a lump sum payment equal to the
excess of (a) the lump sum amount that would have been payable
to the Employee under Section A.(4) if he had elected to
receive a lump sum payment in lieu of monthly installments at
the time benefits commenced to him over (b) the sum of the
payments made to Employee prior to his death.
(7) The Employee's Beneficiary shall be the person designated by
the Employee on a form acceptable to the Company. The Employee
may at any time change such designation upon written notice to
the Company in a form acceptable to the Company. Any change of
Beneficiary will be effective only upon written
acknowledgement by the Company, a copy of which shall be
promptly returned to the Employee after execution by the
Company.
(9) This Agreement is intended to be an unfunded plan of deferred
compensation maintained for the Employee. The obligation of
the Company to make payments hereunder shall constitute a
general unsecured obligation of the Company to the Employee.
Such payments shall be from the general assets of the Company,
and the Company shall not be required to establish or maintain
any special or separate fund or otherwise segregate assets to
assure that such payments shall be made. Neither the Employee
nor his estate shall have any interest in any particular asset
of the Company by reason of the Company's obligations
hereunder. Nothing contained herein shall create or be
construed as creating a trust or any other fiduciary
relationship between the Company and the Employee or any other
person. To the extent that any person acquires a right to
receive payments from the Company hereunder, such right shall
be no greater than the right of an unsecured creditor of the
Company.
(10) No portion of the retirement benefit of the Employee shall be
subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, and any
attempt to do so shall be void. No portion of such retirement
benefit in any manner shall be payable to any assignee,
receiver or trustee; be liable for the Employee's debts,
contracts or other liabilities; or be subject to any legal
process.
B. Supplemental Life Insurance Benefits.
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(1) The Company agrees to maintain in force supplemental life
insurance coverage for the Employee in the amount of $750,000
(the "Policy"). Until attaining age 66, the Employee's
coverage amount shall be $750,000. Beginning with Employee's
66th birthday, such death benefit shall decrease by $75,000
each year until Employee attains the age of 75, at which time
all coverage will terminate.
(2) The Company shall have no obligation of any nature whatsoever
to Employee or his beneficiaries if the circumstances of the
Employee's death preclude payment of death proceeds under the
Policy.
(3) The Employee shall execute a beneficiary designation on the
form approved by the Company and the Insurer and may change
his beneficiary designation at any time by executing a new
form. Such change will be effective only upon written
acknowledgement by the Company, a copy of which shall be
promptly returned to the Employee after execution by the
Company.
(4) The Company shall be responsible for paying the annual
premiums on the Policy to the Insurer. The amount of annual
premium attributable to the Employee shall be equal to the
"current term rate" for the Employee's age multiplied by the
Employee's endorsed death benefit. This amount should be added
to the Employee's annual W-2. "Current term rate" shall be
defined as the lesser of (i) the Insurer's current published
rates available for all standard risks for initial issue
one-year term insurance or (ii) the rates specified in Table
2001 in IRS Notice 2002-8. The Company will reimburse Employee
(on a fully-grossed up basis) to offset the tax expense
associated with such imputed income.
C. General.
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(1) If any individual entitled to receive any payment under this
Agreement shall be physically, mentally or legally incapable
of receiving or acknowledging receipt of such payment, the
Company, upon the receipt of satisfaction evidence (i) of his
incapacity, (ii) that another person or institution is
maintaining him, and (iii) that no guardian or committee has
been appointed for him, may cause any payment otherwise
payable to him to be made to such person or institution.
Payment to such person or institution shall be in full
satisfaction of all claims by or through the Employee to the
extent of the amount thereof.
(2) A benefit shall be deemed forfeited if the Company is unable
after a reasonable period of time to locate the Employee or
any party claiming under or through him to whom payment is
due; provided, however, that such benefit shall be reinstated
if a valid claim is made by or on behalf of such person for
the forfeited benefit.
(3) This Agreement shall be administered by the Governance
Committee of the Board of Directors of the Company any may be
amended, modified or terminated only in writing executed by
the Employee and a representative of the Governance Committee.
The Governance Committee may appoint other persons to assist
it in performing its duties and responsibilities hereunder.
(4) Nothing contained in this Agreement shall be construed as a
contract of employment between the Company and the Employee,
or as a right of the Employee to be continued in the
employment of the Company, or as a limitation on the right of
the Company to discharge the Employee at any time, with or
without cause.
(5) Any notice under this Agreement shall in writing and shall be
mailed by United States first class mail, postage prepaid, as
follows:
To the Company:
Xxxx X. Xxxxxxx Company
0000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Vice President, Human Resources
To the Employee:
Xxxxxxx X. Xxxx
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Either party may change the address to which notices shall be
mailed upon written notice.
(6) This Agreement shall be binding upon the Company and its
successors and assigns, and upon the Employee, his
beneficiaries, heirs, executors and administrators.
(7) This Agreement shall be construed and governed in all respect
under and by the laws of the State of Georgia. If any
provision of this Agreement shall be held by a court of
competent jurisdiction to be invalid or unenforceable, the
remaining provisions hereof shall continue to be fully
effective.
(8) This Agreement is intended by the parties hereto to be the
final expression of their agreement with respect to the
subject matter hereof and is the complete and exclusive
statement thereof notwithstanding any prior representation or
statements to the contrary. This Agreement shall supersede and
cancel the Supplemental Retirement Agreement between the
Company and the Employee dated as of January 14, 1999.
(9) This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
Attest: Xxxx X. Xxxxxxx Company
By:-------------------------------
G. Xxxxxx Xxxxxxxx
Chair, Governance Committee
of the Board of Directors
Witness: Employee
Xxxxxxx X. Xxxx
