INSITUFORM EAST, INCORPORATED
SUPPLEMENTAL EXECUTIVE RETIREMENT INCOME AGREEMENT
THIS AGREEMENT is made by and between Insituform East, Incorporated, a
Delaware corporation ("INSITUFORM") and Xxxx X. Xxxxxxx ("Executive").
RECITALS
A. This Agreement's purpose is to provide certain supplemental
retirement and death benefits to the Executive and his Beneficiary in
consideration of his services to INSITUFORM and its subsidiaries.
B. This Agreement has been approved on INSITUFORM's behalf by
resolution of INSITUFORM's Board of Directors.
C. The benefits provided under this Agreement are to be determined by
aggregating the Executive's employment by INSITUFORM and any one or more of its
parent, affiliates or subsidiaries as though the employment by these companies
were employment by INSITUFORM, and by aggregating the Executive's salaries paid
by INSITUFORM and any one or more of its parent, affiliates or subsidiaries as
though those salaries were all paid by INSITUFORM.
NOW, THEREFORE, INSITUFORM and the Executive agree as follows:
1. Retirement Income: Beginning on the first day of the month next
following the month in which occurs the Executive's Normal Retirement Date or,
if later, his Termination Date, INSITUFORM shall pay to the Executive a monthly
benefit (the "Supplemental Benefit") for the Executive's life equal to 25% of
the Executive's Final Monthly Salary, multiplied by the ratio (not to exceed 1)
of
(i) his completed years (and any fractional year) of
employment by INSITUFORM after 1997;
(ii) the total number of years (and any fractional year) of
employment by INSITUFORM after 1997 that he would have completed if he
had continued in employment to his Normal Retirement Date.
If the Executive's Termination Date occurs prior to his Normal
Retirement Date, the Executive shall begin receiving his Supplemental Benefit
payments as of the first day of the month next following the month in which
occurs his 62nd birthday or, if later, his Termination Date, without actuarial
reduction for early payment. In no event shall the Supplemental Benefit payments
begin prior to the later of the Executive's 62nd birthday or his Termination
Date.
2. Death Benefit:
A. After Retirement.
If the Executive dies after the commencement of his
Supplemental Benefit payments but before he has received 180 monthly
Supplemental Benefit payments, INSITUFORM shall pay to his Beneficiary a monthly
Death Benefit beginning on the first day of the month next following the
Executive's death and continuing until the combined number of monthly payments
under this Agreement received by the Executive and his Beneficiary equals 180.
Each monthly Death Benefit payment under this paragraph 2A is to be equal to the
monthly Supplemental Benefit payment that the Executive was receiving at his
death.
B. Before Retirement.
If the Executive dies before the commencement of his
Supplemental Benefit payments hereunder, INSITUFORM shall pay to his Beneficiary
a one-time, lump sum Death Benefit in the amount of Seven Hundred Thousand
Dollars ($700,000.00) in lieu of all other benefits provided under this
Agreement. This lump sum death benefit is to be paid from the proceeds of a life
insurance policy on the Executive's life, which policy is to be acquired by or
on behalf of INSITUFORM and subject to a split-dollar agreement to provide the
death benefit under this paragraph. The lump sum death benefit shall be paid to
the Executive's beneficiary within 90 days after the Date of the Executive's
death.
3. Funding: INSITUFORM's obligations under this Agreement are intended
to be unfunded for tax purposes and for purposes of Title I of the Employee
Retirement Income Security Act of 1974, as amended, and shall not be secured in
any manner. No asset of INSITUFORM shall be placed in trust or in escrow or
otherwise physically or legally segregated for the benefit of the Executive or
his Beneficiary, other than under a funding vehicle intended not to cause the
plan to be funded for such purposes. The eventual payment of the payments
described in this Agreement to the Executive, his Beneficiary or any other
person shall not be secured to him or them by the issuance of any negotiable
instrument or other evidence of indebtedness of INSITUFORM or its subsidiaries.
Neither the Executive, his Beneficiary, nor any other person shall be deemed to
have any property interest, legal or equitable, in any specific asset of
INSITUFORM or its subsidiaries, and, to the extent that any person acquires any
right to receive payments under this Agreement, that right shall be no greater
than, nor shall it have any preference or priority over, the rights of any
unsecured general creditor.
4. Assignment: No payments, benefits or rights under this Agreement
shall be subject in any manner to anticipation, sale, transfer, assignment,
mortgage, pledge, encumbrance, charge or alienation by the Executive, his
Beneficiary or any other person who could or might possibly receive payments
under this Agreement. In the event of any attempted assignment, alienation,
encumbrance or transfer, INSITUFORM shall have no further liability under this
Agreement.
5. Amendment and Termination: This Agreement may be amended or
terminated at any time and in any respect by the written agreement of INSITUFORM
and the Executive. Notwithstanding the foregoing, INSITUFORM's Board of
Directors may amend or terminate this Agreement at any time without the
Executive's consent by advance written notice delivered to the Executive,
provided that the Board may not unilaterally: (i) reduce or modify the
Executive's accrued benefit determined as of the date written notice of the
amendment or termination is received by the Executive or (ii) amend or terminate
this Agreement in any respect after a Change in Control has occurred. The
Executive's accrued benefit as of any date is the Supplemental Benefit (and
Death Benefit) that he and his Beneficiary would receive, under this Agreement,
if that date were his Termination Date (but the Supplemental Benefit or Death
Benefits payments are to be deferred until the earlier of the first day of the
month next following the Executive's death, or the first day of the month next
following the month in which occurs his 62nd birthday or, if later, his actual
Termination Date, without actuarial increase).
6. Vesting and Forfeiture for Cause: The Executive's benefits under
this Agreement (including any benefits payable to his Beneficiary) shall be
fully vested unless his employment by INSITUFORM is terminated by INSITUFORM for
Cause. If the Executive is terminated for Cause, all benefits under this
Agreement shall be forfeited. Termination of the Executive's employment by
INSITUFORM for "Cause" means termination upon:
(i) the willful and continued failure by Executive to
substantially perform his duties with INSITUFORM (other than any such
failure resulting from his incapacity due to physical or mental
illness) after a written demand for substantial performance is
delivered to Executive by INSITUFORM's Board of Directors, which demand
specifically identifies the manner in which the Board believes that the
Executive has not substantially performed his duties,
(ii) the willful engaging by the Executive in conduct
that is demonstrably and materially injurious to INSITUFORM or its
subsidiaries, monetarily or otherwise, or
(iii) the Executive's conviction of, or plea of guilty or nolo
contendere to, a felony in a court of competent jurisdiction in the
U.S.
No act or failure to act on the Executive's part shall be deemed
"willful" unless done, or omitted to be done, by the Executive not in good faith
and without reasonable belief that his action or omission was in INSITUFORM's
and/or its subsidiaries' best interest. The Executive shall not be deemed to
have been terminated for Cause unless and until there shall have been delivered
to him a copy of a resolution duly adopted by the affirmative vote of not less
than three-quarters of the entire membership of INSITUFORM's Board at a meeting
called and held for that purpose (after reasonable notice to the Executive and
an opportunity for the Executive and his counsel to be heard before the Board),
finding that in the good faith opinion of the Board the Executive engaged in
conduct described under clauses (i), (ii) or (iii) above and specifying the
particulars thereof.
7. Other Retirement Benefits: This Agreement supersedes any other plan
or agreement adopted prior to this Agreement that provides retirement benefits
to the Executive, except (i) any retirement or other deferred compensation plan
intended to qualify under Section 401 or 403 of the Internal Revenue Code of
1986, (ii) any plan or agreement that expressly provides that its benefits are
not to be superseded by this Agreement and (iii) any nonqualified plan or
agreement to which the Executive has made contributions directly or by salary
reduction.
8. Construction: This Agreement shall be, construed according to the
laws of Maryland, except where superseded by Federal law. Use of the masculine
gender includes the feminine gender, use of the singular case includes the
plural, and vice versa. The invalidity of any portion of this Agreement shall
not invalidate the remainder of the Agreement, which shall continue in full
force and effect. The Supplemental Benefits and the Death Benefits are to be
payable in the same manner as salary payments are made by INSITUFORM to its
executives. All payments are subject to applicable withholding and other taxes
required by law. INSITUFORM's Board of Directors shall adopt procedures for
consideration of, and action with respect to, any claims made hereunder.
9. Successors: This Agreement shall be binding upon the Executive and
INSITUFORM and their successors, assigns, heirs, executors and beneficiaries.
10. Definitions: When used in this Agreement, the following terms have
the meanings indicated below, unless a different meaning is clearly indicated by
the context:
"Beneficiary" means the person or persons (who may be named
contingently or successively) designated by the Executive from time to
time to receive the Death Benefits as may be payable under this
Agreement upon or after the Executive's death. Any such beneficiary
designation may be changed from time to time by the Executive by filing
a new designation. Each designation by the Executive will revoke all
prior designations by the Executive, shall be in the form prescribed by
INSITUFORM and will be effective only when filed in writing with
INSITUFORM during the Executive's lifetime. In the absence of a valid
Beneficiary designation or, if at the time any Death Benefit payment is
due to a Beneficiary, there is no living Beneficiary validly named by
the Participant, INSITUFORM shall pay any such benefit to the
Executive's spouse, if his spouse is then surviving or, if the spouse
is not surviving or the Executive has no spouse, to the Executive's
estate.
"Change in Control" means the occurrence of either of the
following events: (1) a change of a nature that would be required to be
reported, by persons or entities subject to the reporting requirements
of Section 13(d) of the Securities and Exchange Act of 1934
(hereinafter called the "Exchange Act"), in Schedule 13D of Regulation
13D-G, or any successor provisions thereto, promulgated under the
Exchange Act; provided that a Change in Control shall be deemed to have
occurred only if (a) any "person" (as that term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 issued under the Exchange Act),
directly or indirectly, of securities of INSITUFORM representing ten
percent (10%) or more of the combined voting power of INSITUFORM's then
outstanding securities; and (b) at any time during the period of
thirty-six (36) months subsequent to the ownership change described
above, individuals who at the beginning of such period constitute
INSITUFORM's Board cease for any reason to constitute at least a
majority thereof unless the election, or the nomination for election by
INSITUFORM's shareholders, of each new Director was approved by a vote
of at least two-thirds of the Directors still in office who were
Directors at the beginning of such thirty-six (36) month period; or (2)
any "person", as described above, is or becomes the "beneficial owner,"
directly or indirectly, of securities of INSITUFORM representing forty
percent (40%) or more of the combined voting power of INSITUFORM's then
outstanding securities.
"Final Monthly Salary" means the monthly equivalent of the
Executive's highest combined rate of base annual salary earned by him
from INSITUFORM and all of its parent, affiliates and subsidiaries,
before any salary reductions elected by the Executive; provided,
however, that the Executive's "Final Monthly Salary" shall not exceed
the amount of his monthly base salary rate in effect on December 31,
1997, increased by 2% (compounded annually) for each full calendar year
that elapses between December 31, 1997 and the Executive's Termination
Date.
"Normal Retirement Date" means the Executive's 65th birthday.
"Termination Date" means the date that the Executive's
employment by the INSITUFORM group terminates for any reason,
voluntarily or involuntarily.
IN WITNESS WHEREOF, the Executive and INSITUFORM have entered into this
Agreement, effective as of January 1, 1998.
ATTEST: INSITUFORM EAST, INCORPORATED
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
Assistant Secretary Vice President of Administration
[Corporate Seal]
WITNESS: EXECUTIVE
/s/ X. Xxxxxx /s/ Xxxx X. Xxxxxxx
FIRST AMENDMENT TO THE
INSITUFORM EAST, INCORPORATED
SUPPLEMENTAL EXECUTIVE RETIREMENT INCOME AGREEMENT
WITH XXXX X. XXXXXXX
THIS AGREEMENT is made by and between Insituform East, Incorporated, a
Delaware corporation ("INSITUFORM"), and Xxxx X. Xxxxxxx ("Executive").
A. WHEREAS, INSITUFORM and Executive entered into a Supplemental
Executive Retirement Income Agreement, effective as of January 1, 1998 (the
"Agreement"), to provide certain supplemental retirement and death benefits to
the Executive and his beneficiary in consideration of his services to
INSITUFORM.
B. WHEREAS, INSITUFORM and the Executive now desire to amend the
Agreement to provide for the payment of the Executive's or his beneficiary's
legal expenses incurred in obtaining any benefit under the Agreement.
NOW THEREFORE, INSITUFORM and the Executive agree as follows:
The following new Section 11 "Legal Fees" shall be added immediately at
the end of Section 10:
11. Legal Fees: INSITUFORM shall reimburse the Executive or
his Beneficiary all reasonable legal fees and expenses incurred by the
Executive or his Beneficiary to obtain or enforce any right or benefit
provided under this Agreement, unless it is determined by a court (or,
if applicable, another binding decision maker) that the Executive or
his Beneficiary has not brought the claim for such right or benefit in
good faith.
The Agreement, as amended by the foregoing change, is hereby ratified
and confirmed in all respects.
IN WITNESS WHEREOF, the Executive and INSITUFORM have entered into this
Agreement on this 11th day of June, 1999.
ATTEST: INSITUFORM EAST, INCORPORATED
/s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
Secretary Its: President
[Corporate Seal]
WITNESS: EXECUTIVE
/s/ Xxxxxx Xxxxxxx /s/ Xxxx Xxxxxxx
