Deferred Compensation Agreement Stamford Industrial Group with Albert W. Weggeman
Stamford
Industrial Group with Xxxxxx X. Xxxxxxxx
Deferred
Compensation Agreement
dated as
of December 27, 2007, between Stamford Industrial Group, Inc., a Delaware
corporation (the “Company”) and Xxxxxx X. Xxxxxxxx (the
"Participant").
Whereas,
the
Participant is the Chief Executive Officer of the Company and a key employee
of
the Company;
Whereas,
the
Company desires to provide additional compensation to the Participant on the
terms set forth herein, and the Participant desires to accept the
same;
Whereas,
the
Company intends to provide deferred compensation primarily to a select group
of
management or highly compensated employees within the meaning of sections
201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income Security
Act
of 1974, as amended (“ERISA”);
Now,
therefore,
in
consideration of the mutual covenants herein contained and other valuable
consideration, it is hereby agreed as follows:
Article
1 - Definitions
The
following capitalized terms, when used herein, shall have the meanings set
forth
below.
“Account”
means the bookkeeping account that records the amount of the Participant’s
initial credit pursuant to Section 2.01 as adjusted pursuant to Section
2.02.
"Adjusted
EBITDA" means 'Adjusted EBITDA' as such term is defined in the Company's 2007
Stock Incentive Plan, it being understood that for purposes of this Agreement,
"Adjusted EBITDA" shall not include capital gains from sales of any assets
of
the Company.
“Board”
means the Board of Directors of the Company.
“Code”
means the Internal Revenue Code of 1986, as amended.
“Committee”
means the individual or individuals appointed by the Board to administer this
Agreement; unless otherwise hereafter determined by the Board of Directors,
the
Committee shall be the Compensation Committee of the Board of
Directors.
“Company”
means Stamford Industrial Group, Inc., a Delaware corporation with its principal
office in Stamford, Connecticut.
“Effective
Date” means December 27, 2007.
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“ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended.
"Fair
Market Value" means the average closing price of one share of the common stock
of the Company over the 30-day period
preceding the applicable date of distribution pursuant to Section
2.04.
“Participant”
means Xxxxxx X. Xxxxxxxx.
Article
2 - Account
2.01 Initial
Account Credit.
As of
the date of this Agreement, the Participant’s Account shall be credited with
$1,519,766 (the "Initial Account Credit").
2.02 Adjustment
to Account.
The
amount to be distributed pursuant to Section 2.04 shall be the lesser of
(a) the Initial Account Credit or (b) 2,491,419 multiplied by (the
Fair Market Value less $0.64).
2.03 Vesting.
The
Participant shall vest in his Account as follows (rounded to the nearest
$1.00):
(a) 19.4%
shall be immediately vested upon crediting to the Participant's
Account.
(b) 30.6%
shall vest in twenty-two equal monthly consecutive tranches commencing on the
date such amount is credited to the Participant's Account, provided that the
Participant is actively employed as of the vesting date.
(c) up
to
50.0% shall vest as follows, provided that the Participant is actively employed
as of the vesting date.
(1) 16.7
percent shall vest as of March 31, 2008, if the Company’s Adjusted EBITDA for
the year ending December 31, 2007 (“Year 1”) is not less than $13,800,000
(the “Year 1 Target”); if the Year 1 Target is not achieved, and if the sum of
the Company’s Adjusted EBITDA for the years ending December 31, 2007 and 2008 is
not less than the sum of the Year 1 Target plus the Year 2 Target (as defined
below), then the such 16.7 percent shall vest as of March 31, 2009.
(2) 16.7
percent shall vest as of March 31, 2009, if the Company’s Adjusted EBITDA for
the year ending December 31, 2008 (“Year 2”) is not less than $15,700,000
(the “Year 2 Target”); if the Year 2 Target is not achieved, and if the sum of
the Company’s Adjusted EBITDA for the years ending December 31, 2008 and 2009 is
not less than the sum of the Year 2 Target plus the Year 3 Target (as defined
below), then such 16.7
percent shall vest as of March 31, 2010.
2
(3) 16.6
percent shall vest as of March 31, 2010, if the Company’s Adjusted EBITDA for
the year ending December 31, 2009 (“Year 3”) is not less than $17,200,000
(the “Year 3 Target”); if (i) the Year 3 Target is not achieved, and
(ii) the Company renews the employment agreement of the Participant for
another three-year term, and (iii) the sum of the Company’s Adjusted EBITDA
for the years ending December 31, 2009 and 2010 is not less than the sum of
the
Year 3 Target plus the Year 4 Target (as defined hereinafter), then such 16.6
percent shall vest as of March 31, 2011. “Year 4 Target” means an amount of the
Company’s Adjusted EBITDA for the year ending December 31, 2010 that will be
agreed upon by the parties in the renewed employment agreement, if
any.
2.04 Distribution.
The
vested portion, if any, of the Participant’s Account, as adjusted pursuant to
Section 2.02, which vests on or before October 1, 2009, shall be paid in the
form of a single sum to the Participant not later than October 31, 2009. The
vested portion, if any, of the Participant’s Account, as adjusted pursuant to
Section 2.02, which vests after October 1, 2009, shall be distributed promptly
after vesting. The Committee shall have the discretion to make a distribution
in
the form of cash or common stock of the Company, valued at the Fair Market
Value
as of the business day prior to distribution, or a combination of cash and
common stock.
Article
3 - Administration
3.01 Duties
and Powers of the Committee.
The
Agreement shall be administered by the Committee. The Committee shall establish
such rules and procedures as it deems appropriate for the administration of
the
Agreement. The Committee shall have the full power, discretion and authority
to
interpret, construe and administer the terms of the Agreement, and all decisions
made by the Committee shall be final and binding. The Committee may employ
legal
counsel, consultants, actuaries, and others as it deems desirable in the
administration of the Agreement.
3.02. The
amounts credited to the Account pursuant to Sections 2.03(c)(2) and 2.03(c)(3)
hereunder to the Participant, to the extent he qualifies as a "covered employee"
for purposes of Section 162(m) of the Code, are intended to be exempt from
the
application of Section 162(m) of the Code to the extent so designated by the
Committee. The exemption is based on Treasury Regulation Section 1.162-27 as
in
effect on date hereof. The Committee may, without stockholder approval (unless
otherwise required to comply with Rule 16b-3 under the Exchange Act or in
accordance with applicable market or exchange requirements), amend this
Agreement retroactively and/or prospectively to the extent it determines
necessary to comply with any subsequent clarification of Section 162(m) of
the
Code required to preserve the Company’s Federal income tax deduction for
compensation paid pursuant to this Agreement.
3.03 No
Contract of Employment.
Nothing in this Agreement shall confer on Participant any right to continue
in
the employ of, or other relationship with, the Company or any subsidiary of
the
Company, or limit in any way the right of the Company or any affiliate or
subsidiary of the Company to terminate Participant's employment or other
relationship at any time, with or without cause. This Agreement does not
constitute an employment contract. This Agreement does not guarantee employment
for the length of time of the vesting schedule or for any portion
thereof.
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3.04 Funding.
The
amounts payable under this Agreement shall constitute general, unsecured
obligations of the Company, payable solely out of the general assets of the
Company, and no Participant shall have any rights to any specific assets of
the
Company. Account balances under this Agreement represent mere promises to pay
amounts in the future. In the event the Company becomes subject to an insolvency
or bankruptcy proceeding, the Participant shall only have the rights of a
general, unsecured creditor of the Company for any distributions due under
the
Agreement. This Agreement is intended to be an unfunded program for purposes
of
the Code and for purposes of Title I of ERISA.
3.05 Liability
of Company.
Subject
to its obligation to pay the balance in the Account pursuant to the terms of
this Agreement, neither the Company nor anyone acting on behalf of the Company
shall be liable for any act performed or the failure to perform any act with
regard to this Agreement, except as otherwise required by law.
3.06 Notices.
The
Participant shall be responsible for furnishing the Committee with the current
and proper address for the mailing of notices. Any notice required or permitted
to be given shall be deemed given if directed to the person to whom addressed
at
such address and mailed by United States mail, first-class and
prepaid.
3.07 Choice
of Law.
The
Agreement shall be construed in accordance with and governed by the laws of
the
State of Connecticut, without regard to its conflicts of laws provisions, to
the
extent such law is not preempted by federal law.
3.08 Binding
Effect.
The
terms of this Agreement shall be binding on the Participant, his beneficiaries
and estate, and their legal representatives, and on the Company, and its
successors, assigns, and legal representatives.
3.09 Non-alienation.
None of
the payments, benefits or rights of the Participant, his beneficiary or estate
shall be subject to the claim of any creditor, and, in particular, to the
fullest extent permissible by law, all such payments, benefits and rights shall
be free from attachments, garnishment, trustee’s process or any other legal or
equitable process available to any creditor of such Participant, his beneficiary
or estate.
3.10 Incapacity.
If the
Committee determines that the Participant or beneficiary is incompetent by
reason of legal minority or physical or mental disability, the Committee shall
have the power to cause the payments becoming due to such person to be made
to
another for the benefit of the minor or incompetent, without responsibility
of
the Company or the Committee to see to the application of such payment. Payments
made in accordance with the application of such power shall operate as a
complete discharge of all obligations of the Company and the Committee to the
extent of such payment.
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3.11 Amendment
or Termination.
This
Agreement may not be amended except in a writing signed by the party against
whom such amendment is to be enforced.
3.12 Other
Plans and Agreements.
Nothing
contained in this Agreement shall preclude the Participant, to the extent he
is
otherwise eligible, from participation in any group insurance, pension, savings,
or other employee benefit plans or programs which the Company in its discretion
may make available to its employees, but the Company shall not be required
to
establish, maintain or continue any such plan or program by reason of this
Agreement. Any amounts payable under this Agreement shall not be deemed to
be
salary, bonus or other compensation paid to the Participant for purposes of
computing contributions to or benefits under any other employee benefit plan
or
program, unless specifically required pursuant to such other plan or
program.
3.13 Integrated
Agreement.
This
Agreement represents the entire agreement between the Company and the
Participant concerning the payment of deferred compensation to the Participant
under this Agreement.
3.14 Severability.
If any
provision of this Agreement shall be held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provision hereof,
and
this Agreement shall be construed and enforced as if such provision had not
been
included.
3.15 Tax.
The
Company may withhold any federal, state or local taxes from any payment due
the
Participant, his beneficiary or estate or from the Participant’s compensation as
it or the Committee determines pursuant to applicable law. The Agreement is
intended to comply with the provisions of Code Section 409A and guidance issued
thereunder.
3.16 Construction.
The
masculine gender includes the feminine, and the singular the plural, and vice
versa, unless the context clearly requires otherwise. The headings and captions
contained herein are provided for convenience only, shall not be considered
part
of the Agreement, and shall not be employed in construction of the
Agreement.
3.17 Claims
and Appeals.
The
Participant may file claims and appeals of denied claims with the Committee,
and
the Committee shall decide such claims and appeals, in accordance with Section
503 of the Employee Retirement Income Security Act of 1974, as amended, and
Department of Labor Regulation Section 2560.503-1.
[Signature
Page Follows:]
5
In
Witness Whereof,
and
intending to be legally bound hereby, the parties have executed this Agreement
as of the date first above written.
| Stamford Industrial Group, Inc. | |||
| By: | |||
|
Xxxxxx
X. Xxxxxxxx, the Participant
|
Xxxxxxxx
XxXxxxx
|
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|
Chief
Financial Officer
|
|||
| Title: | |||
|
|
Attest: |
|
|
| Name: | |||
| Title: | |||
