AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLANEmployee Benefits Plan Agreement |
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AMENDED
AND RESTATED
SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN
This
is
an AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("SERP") made
as
of the 2nd day of August, 2007, by and between Harris & Harris Group, Inc.,
a corporation organized under the laws of the State of New York (the "Company"),
and Charles E. Harris (the "Executive"). The SERP was originally effective
February 2, 2000 and was at that time called "Deferred Compensation Agreement",
and is hereby amended and restated effective January 1, 2005, but actually
on
the date first shown above, for compliance with Internal Revenue Code (the
"Code") Section 409A.
WHEREAS,
the Company and the Executive are parties to an employment
agreement;
WHEREAS,
the employment agreement obligates the Company to maintain a supplemental
executive retirement plan for the benefit of the Executive, and the Company
and
the Executive wish to enter into this Amended and Restated SERP to bring
it into
compliance with Code Section 409A.
NOW,
THEREFORE, in consideration of the premises and covenants hereinafter contained,
the parties hereto agree as follows:
Section
1.
Deferred Compensation Account; Contributions to Trust.
(1) The
Company shall credit to a book reserve (the "Deferred Compensation Account
commencing as of October 19, 1999 and for each month thereafter, an amount
equal
to 1/12th
of the
Executive's Base Salary (as defined in the employment agreement in effect
from
time to time between the Company and the Executive (the "Employment Agreement"))
for such month; provided that the Executive is employed with the Company
on the
last business day of such month. The Deferred Compensation Account shall
be
debited with amounts representing all losses and distributions from the Trust
(as hereinafter defined) and shall be credited with all earnings of and deposits
to the Trust or amounts otherwise contributed to the Trust.
(2) Any
amounts represented by credits made to the Deferred Compensation Account
in
accordance with the first sentence of paragraph (a) above shall be contributed
by the Company on the last business day of each month to the trust (the "Trust")
established under the Trust Agreement substantially in the form of Exhibit
A
annexed hereto (the "Trust Agreement"). Amounts contributed to the Trust
shall
be invested and reinvested in accordance with the provisions of the Trust
Agreement in such investments as are requested by the Executive and agreed
to by
the Company, which agreement shall not be unreasonably withheld. To the extent
that the Company is required to withhold hospital insurance tax or other
taxes
in respect of credits to the Deferred Compensation Account representing earnings
of the Trust prior to distribution of such earnings to the Executive pursuant
to
Section 2 below, as provided in Amendment No. 3 to this SERP made in December,
2005 (i) for taxes owed in 2005, such taxes shall be paid from the Trust,
and
(ii) for taxes owed in 2006 and later years, such taxes shall be paid from
amounts otherwise payable by the Company to Executive that are not paid under
this Agreement.
1
(3) The
Executive agrees on behalf of himself and his designated beneficiary to assume
all risk in connection with any debits or credits made to him under the Trust
by
reason of losses or earnings on investments made in accordance with the
provisions of the Trust Agreement.
Section
2. Benefit
Payments.
(1) In
accordance with Amendment No. 3 made in 2005, the Executive was paid the
sum of
$125,000 of the Deferred Compensation Account in December, 2005 and the
remainder of the Deferred Compensation Account was scheduled to be paid on
December 31, 2008 regardless of whether the Executive has then separated
from
service. In accordance with Amendment No. 4, the Executive was permitted
to make
a new payment timing election in 2006 in accordance with Code Section 409A
transition rules, and the Executive elected payment on January 6, 2009. The
Executive may make a new payment timing election on or before December 31,
2007,
provided that such election cannot be for payment to be made in 2007. If
Executive does not make a new payment timing election by December 31, 2007,
the
balance of the Deferred Compensation Account will be paid to Executive on
January 6, 2009. Notwithstanding the Executive's payment timing election,
if the
Executive dies before his entire Deferred Compensation Account has been paid
to
him, the remainder of the Deferred Compensation Account shall be paid on
the
90th
day
after his date of death, and further provided that if the Executive separates
from service with the Company the meaning of Code Section 409A within six
months
prior to the date after 2007 when payments are to be paid or begin to be
paid,
no payment shall not be made until six months and one day after separation
from
service, and then all payments that would have been made in that six month
period shall be made.
(2) The
beneficiary referred to in paragraph (a) above may be designated or changed
by
the Executive (without the consent of any prior beneficiary) on a form provided
by the Company and delivered to the Company before the Executive's death.
If no
such beneficiary shall have been designated, or if no designated beneficiary
shall survive the Executive, the lump sum payment payable under paragraph
(a)
above shall be payable to the Executive's estate.
(3) This
SERP
shall be administered by the Compensation Committee of the Board of Directors
of
the Company (the "Committee"). The Committee shall perform the duties required,
and shall have the powers necessary, to administer the Plan and carry out
the
provisions thereof. Specifically, the Committee shall have the power:
(a) To
determine any question arising in connection with the SERP, including factual
matters, and its decision or action in respect thereof shall be final,
conclusive and binding upon the Company and the Executive and any other
individual interested herein; and
(b) To
engage
the services of counsel or attorney (who may be counsel or attorney for the
Company) and an actuary, if it deems necessary, and such other agents or
assistants as it deems advisable for the proper administration of the SERP.
