EXHIBIT 10.18
SPECIMEN AGREEMENT
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT
THIS AGREEMENT, made and entered into this ____ day of ______, 19__, by and
among Knight/Trimark Group (hereinafter referred to as the "Corporation"), a
Corporation organized and existing under the laws of New York, and
________________ (hereinafter referred to as the "Employee").
WHEREAS, the Employee has performed his duties in an efficient and capable
manner; and
WHEREAS, the Corporation is desirous of retaining the services of the
Employee; and
WHEREAS, the Board of Directors has approved the adoption of a Supple
mental Executive Retirement Plan as described in this Agreement (the "Plan");
and
WHEREAS, the Employee has been selected to participate in the Plan,
WHEREAS, the Corporation may, in its sole discretion, elect to purchase a
life insurance policy (the "Policy") on the life of the employee and does
request the full cooperation of the employee in attaining the policy;
NOW, THEREFORE, for value received and in consideration of the mutual
covenants contained herein, the parties agree as follows:
1. NORMAL RETIREMENT SUPPLEMENTAL PENSION.
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a. The corporation hereby agrees to contribute $80,000 annually for the
lesser of five years or the executive's term of employment. [This $80,000
includes $40,000 of compensation deferred by the executive.]
b. The corporation hereby agrees with the Employee that the Employee may
retire upon attaining age sixty-five (65), such age hereinafter being called the
"Normal Retirement Age."
c. Upon the Employee's retirement on or after Normal Retirement Age, the
Corporation shall pay the Employee a supplemental annual pension equal to the
"Normal Retirement Benefit" payable in annual installments and continuing for a
period of fifteen (15) years. The Normal Retirement Benefit is the amount that
can be withdrawn from the policy as determined by the plan administrator
multiplied by the applicable fraction. The applicable fraction is equal to 1/(1-
Corporate Tax Bracket) where the Corporate Tax Bracket is the combined federal,
state and local tax rate for the Corporation. The plan administrator shall
determine the amount that can be withdrawn annually for fifteen years such that
the net death proceeds provide the Corporation with death cost recovery of all
premium outlays through age 85 and such that no additional premium outlays are
projected after age 65 at the time the calculation is completed. The Normal
Retirement Benefit commences on the first day of the month following the normal
retirement.
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2. EARLY RETIREMENT OR TERMINATION.
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a. If the Employee retires or his employment with the Corporation is
otherwise terminated prior to attaining Normal Retirement Age but after
attaining age fifty-five (55), then the Corporation will pay the Employee a
supplemental pension equal to the "Early Retirement Benefit" payable in annual
installments and continuing for a period of fifteen (15) years. The Early
Retirement Benefit is the amount that can be withdrawn from the policy as
determined by be plan administrator multiplied by the applicable fraction. The
applicable fraction is equal to 1/(1 Corporate Tax Bracket) where the Corporate
Tax Bracket is the combined federal, state and local tax rate for the
Corporation. The plan administrator shall determine the amount that can be
withdrawn annually for fifteen years such that the net death proceeds provide
the Corporation with death cost recovery through age 85 of all premium outlays,
and such that no additional premium outlays are projected after retirement at
the time the calculation is completed. The Early Retirement Benefit commences on
the first day of the month following the early retirement.
3. DEATH OR DISABILITY.
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a. Upon the death of the Employee while still actively employed, the
Employee's designated beneficiary shall receive [split dollar benefit to be
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determined].
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b. Upon the death of the Employee while receiving any supplemental
pension benefits as provided in this Agreement, the Employee's designated
beneficiary shall receive the remaining payments which would have been due the
Employee.
c. If the Employee ceases employment because of temporary disability, the
Employee will be treated as actively employed, for purposes of this Agreement,
while such disability continues. In such event, payments hereunder will commence
upon the Employee's attainment of Normal Retirement Age.
d. If the Employee ceases employment because of permanent disability, the
Employee will be as actively employed, for purposes of this Agreement, while
such disability continues. In such event, payments hereunder will commence upon
the Employee's attainment of Normal Retirement Age.
e. If the Employee shall have failed to make an effective designation of
beneficiary, or if the individual or individuals so designated shall die prior
to receiving all payments required to made to them hereunder and there is no
designated alternate beneficiary, then in such event the remaining payments
shall be made first to the Employee's surviving spouse, second the Employee's
surviving children, equally per stirpes if there is no surviving spouse, and
finally to the estate of the Employee if there are neither a surviving spouse
nor surviving children.
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4. ASSIGNMENT.
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Except as otherwise provided herein, it is understood that neither the Employee,
nor any person designated by him pursuant to this Agreement, shall have any
right to commute, sell, assign, transfer or otherwise convey the right to
receive payments to be made hereunder, which payments and the right thereto are
expressly declared to be non-assignable and non-transferable. If such
assignment or transfer is attempted, the Corporation may disregard it and
continue to discharge its obligations hereunder as though such assignment or
transfer were not attempted.
5. INDEPENDENT ARRANGEMENT.
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The benefits payable under this Agreement shall be independent of, and in
addition to, any other agreement which may exist from time to time between the
parties hereto, or any other compensation payable by the Employee's employer.
This Agreement shall not be deemed to constitute a contract of employment
between the parties hereto, nor shall any provisions hereof restrict the right
of the Employee's employer to discharge the Employee or restrict the right of
the Employee to terminate his or her employment.
6. NON-TRUST OR FIDUCIARY OBLIGATION.
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a. The rights of the Employee under this Agreement and of any
beneficiary of the Employee or of any other person who may acquire such rights
shall be
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solely those of an unsecured creditor of the Corporation. Any insurance policy
on the life of the Employee or any other asset acquired by the Corporation in
connection with the obligations assumed by it hereunder shall not be deemed to
be held under any trust for the benefit of the Employee or his or her
beneficiaries or to be security for the performance of the obligations of the
Corporation, but shall be, and remain, a general, unpledged, unrestricted asset
of the Corporation. The employee or his or her beneficiaries have no rights in
any asset which may be purchased by the Corporation in connection with the
obligations of this agreement.
b. Nothing contained in the Agreement and no action taken pursuant to the
provisions of the Agreement shall create or be construed to create a trust of
any kind, or a fiduciary relationship between the Corporation and the Employee
or his or her beneficiaries.
7. CHANGE CONTROL.
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a. If the Employee's employment with the Corporation is involuntarily
terminated within two years after a "Change in Control" (as defined below) of
the Employee's employer, successor management will continue the annual
contributions for the remainder of the five year period described in Article 1.
b. As used herein, the term "Change of Control" shall mean that any
"person" or "group" within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Act") has become the
"beneficial
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owner" as defined in Rule 13d-3 under the Act, of 20% or more of the then
outstanding voting securities of the Corporation, exclusive of any Initial
Public Offering of shares on any stock exchange.
8. ARBITRATION.
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a. Any controversy or claim arising out of or relating to this Agreement
shall be settled by arbitration in accordance with Rules of the American
Arbitration Association, and judgment upon the award rendered by an arbitrator
may be entered in any court having jurisdiction thereof.
b. The parties hereby submit themselves and consent to the jurisdiction
of the Courts of the State of New York further consent that any process or
notice of motion, or other application of the Court, or any Judge thereof, may
be served outside the State of New York by certified mail or by personal service
provided that a reasonable time for appearance is allowed. The arbitrators in
any such controversy shall have no authority or power to modify or alter any
express condition or provision of this Agreement or to render an award which has
the effect of altering or modifying any express condition or provision hereof.
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9. MISCELLANEOUS PROVISIONS.
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a. This Agreement shall be binding upon and inure to the benefit of any
successor of the Corporation and any such successor shall be deemed substituted
for the Corporation under the terms of this Agreement.
b. This instrument contains the entire Agreement of the parties. It may
be amended only by a writing signed by both of the parties hereto.
c. This Agreement shall be governed and construed in accordance with the
law of the State of New York.
IN WITNESS WHEREOF, the parties have hereunto set their hands and
seals, the Corporation by it duly authorized officer, on the day and year first
above written.
_______________________________ (L.S.)
Employee
(Corporation by)
_______________________________ (L.S.)
Corporate Officer
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BENEFICIARY STATEMENT
I, ___________________, do hereby name as a beneficiary under the Supplemental
Executive Retirement Plan Agreement dated ____________ as follows:
Primary: /
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Name Relationship
Secondary: /
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Name Relationship
Signed:_______________________
Dated:________________________
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