Exhibit 10.09
DIMON
INCORPORATED
SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN
Amended March 1, 2005
Effective January 1, 1997
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
1
1.01.
Accounting Firm
1
1.02.
Administrator
1
1.03.
Affiliate
1
1.04.
Board
1
1.05.
Cash Balance Plan
1
1.06.
Capped Parachute Payments
1
1.07.
Cause
1
1.08.
Change in Control
2
1.09.
Code
3
1.10.
Committee
3
1.11.
Compensation
3
1.12.
Competes
3
1.13.
Control Change Date
3
1.14.
Corporation
3
1.15.
Credited Compensation
3
1.16.
Employee
4
1.17.
Executive
4
1.18.
Fiscal Year
4
1.19.
Foreign Social Security
Benefit
4
1.20.
Good Reason
4
1.21.
Joint and Survivor Annuity
5
1.22.
Net After-Tax Amount
5
1.23.
Normal Retirement Allowance
5
1.24.
Normal Retirement Date
5
1.25.
Offset Amount
5
1.26.
Parachute Payment
6
1.27.
Participant
6
1.28.
Pension Equalization Plan
6
1.29.
Plan
6
1.30.
Profit Sharing Account
6
1.31.
Pro Ration Percentage
6
1.32.
Retirement, Retire or Retires
7
1.33.
Surviving Spouse
7
1.34.
Years of Service
7
ARTICLE II
PARTICIPATION
8
2.01.
Beginning Participation
8
2.02.
Change in Status
8
TABLE OF CONTENTS
(continued)
Page
ARTICLE III
RETIREMENT ALLOWANCES
9
3.01.
Normal Retirement Allowance
9
3.02.
Pre-Retirement Death Benefit
10
ARTICLE IV
VESTING
11
4.01.
Normal Vesting
11
4.02.
Change in Control
11
4.03.
Competition
11
ARTICLE V
ADMINISTRATION OF THE PLAN
12
5.01.
Generally
12
5.02.
Indemnification
12
5.03.
Determining Benefits
12
5.04.
Cooperation
12
5.05.
Claims
12
5.06.
Review of Claims
13
5.07.
Delegation of Committee
Responsibilities
14
ARTICLE VI
TERMINATION, AMENDMENT OR MODIFICATION
OF
PLAN
15
6.01.
Reservation of Rights
15
6.02.
Limitation on Actions
15
6.03.
Effect of Termination
15
ARTICLE VII
MISCELLANEOUS
16
7.01.
Limitation on Benefits
16
7.02.
Unfunded Plan
17
7.03.
Other Benefits and Agreements
18
7.04.
Restrictions on Transfer of
Benefits
18
7.05.
No Guarantee of Employment
18
7.06.
Successors
18
7.07.
Construction
18
7.08.
Governing Law
18
DIMON INCORPORATED
SUPPLEMENTAL EXECUTIVE RETIREMENT
PLAN
INTRODUCTION
The Board of Directors of DIMON
Incorporated (the Corporation) determined that the adoption of the
DIMON Incorporated Supplemental Executive Retirement Plan (the
Plan) should assist it in attracting and retaining those employees
whose judgment, abilities and experience will contribute to its
continued progress and success. The Board of Directors also
determined that the Plan should further those objectives by
providing retirement and related benefits that supplement the
amounts payable under the deferred compensation plans and
arrangements currently maintained by the Corporation.
The Plan is effective January 1, 1997 and
was amended August 25, 2004. The Plan is intended to provide
an unfunded supplemental retirement benefit to a select group of
management and highly compensated employees as such terms are used
in sections 201, 301, and 501 of the Employee Retirement Income
Security Act of 1974. The Plan must be interpreted and
administered in a manner that is consistent with that
intent.
ARTICLE I
DEFINITIONS
1.01.
Accounting Firm
Accounting Firm means the accounting firm
most recently approved by the Corporation’s shareholders as
the Corporation’s auditor; provided, however, that if such
accounting firm declines to undertake the determinations assigned
to it under this Agreement, then the “Accounting Firm”
shall mean such other accounting firm designated by the
Corporation.
1.02.
Administrator
Administrator means the Committee and any
delegate of the Committee appointed in accordance with Section
5.07.
1.03.
Affiliate
Affiliate means any corporation which,
when considered with the Corporation, would constitute a controlled
group of corporations within the meaning of Code section 1563(a)
determined without reference to Code sections 1563(a)(4) and
1563(e)(3)(C) and any entity, whether or not incorporated, which
would be under common control with the Corporation within the
meaning of Code section 414(c).
1.04.
Board
Board means the Board of Directors of the
Corporation.
1.05.
Cash Balance
Plan
Cash Balance Plan means the DIMON
Incorporated Cash Balance Plan, and any successor
thereto.
1.06.
Capped Parachute
Payments
Capped Parachute Payments means the
largest amount of Parachute Payments that may be paid to the
Participant without liability under Code section 4999.
1.07.
Cause
(a) If on the date of the
Participant’s separation from service the Participant and the
Corporation are parties to an employment agreement or change in
control agreement that defines the term “Cause” (or a
variation thereof), then Cause has the same meaning as set forth in
that agreement.
1
(b) If on the date of the
Participant’s separation from service the Participant and the
Corporation are not parties to an employment agreement or change in
control agreement that defines the term “Cause” (or a
variation thereof), then Cause means (i) the Participant’s
commission of an act constituting fraud, theft, misappropriation of
funds of the Corporation, embezzlement or material dishonesty; (ii)
the Participant’s engaging in conduct that constitutes
willful gross neglect or willful gross misconduct in carrying out
the Participant’s duties to the Corporation, resulting, in
either case, in material harm to the Corporation’s financial
condition or reputation; (iii) the Participant’s engaging in
conduct prohibited by Section 4.03; (iv) the Participant’s
conviction, or plea of nolo contendre to, any felony or (v) the
Participant’s refusal or failure to substantially perform the
Participant’s material duties, responsibilities and
obligations to the Corporation. Any act or failure to act on
the Participant’s part shall be considered
“willful” if done or omitted to be done by the
Participant not in good faith, and shall not include any act or
failure to act resulting from the Participant’s
incapacity.
1.08.
Change in
Control
(a) Change in Control means that
(i) any “person” (as such term is used in Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended) becomes the beneficial owner, directly or indirectly, of
securities of the Corporation representing more than 30% of the
aggregate voting power of all classes of the Corporation’s
voting securities on a fully diluted basis, after giving effect to
the conversion of all outstanding warrants, options and other
securities of the Corporation convertible into or exercisable for
voting securities of the Corporation (whether or not such
securities are then exercisable); (ii) the shareholders of the
Corporation approve (A) a plan of merger, consolidation or share
exchange between the Corporation and an entity other than a direct
or indirect wholly-owned subsidiary of the Corporation or (B) a
proposal with respect to the sale, lease, exchange or other
disposal of all, or substantially all, of the Corporation’s
property; or (iii) during any period of two consecutive years
(which period may be deemed to begin prior to the date of this
agreement), individuals who at the beginning of such period
constituted the Board, together with any new members of the Board
whose election by the Board or whose nomination for election by the
shareholders of the Corporation was approved by a majority of the
members of the Board then still in office who either were directors
at the beginning of such period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute a majority of the Board.
(b) Section 1.08(a) to the contrary
notwithstanding, a Change in Control shall not occur by reason of
the consummation of the transactions described in the Agreement and
Plan of Reorganization between the Corporation and Standard
Commercial Corporation.
2
1.09.
Code
Code means the Internal Revenue Code of
1986, as amended, or any successor thereto, as in effect at the
relevant time.
1.10.
Committee
Committee means a committee of the Board
appointed to administer the Plan.
1.11.
Compensation
Compensation means the taxable earnings
for services rendered as an Employee and paid in cash by the
Corporation to the Participant, excluding commissions, extra pay
for temporary foreign service, amounts paid as special incentive
bonuses in connection with the transaction described in Section
1.08(b) and severance or similar benefits paid by the Corporation
on account of termination of employment, plus amounts deferred
under Code sections 401(k) and 125 pursuant to the
Participant’s salary reduction agreement.
1.12.
Competes
Competes means that Participant, either
directly or indirectly, either as principal, agent, employee,
employer, owner, stockholder (owning more than 5% of the value of a
corporation’s outstanding stock), partner, contractor,
consultant or in any other individual or representative capacity,
engages in the business of a tobacco or flower dealer, importer or
exporter or any other business in which the Corporation or an
Affiliate is engaged at such time. If any provision of the
preceding sentence or Section 4.03 is ever deemed to exceed the
time, geographic area, or activity limitations permitted by
applicable law, the Corporation and Participant (by virtue of his
participation in the Plan), agree that such provisions must be and
are reformed to the maximum time, geographic area and activity
limitations permitted by applicable law, and expressly authorize a
court having jurisdiction to reform the provisions to the maximum
time, geographic area and activity limitations permitted by
applicable law.
1.13.
Control Change
Date
Control Change Date means the date on
which all of the events necessary for a Change in Control have
occurred.
1.14.
Corporation
Corporation means DIMON Incorporated and
any successor corporation.
1.15.
Credited
Compensation
Credited Compensation means fifty percent
(50%) of the average of the Compensation paid to the Executive with
respect to periods of employment with the
3
Corporation or an Affiliate during the
three Fiscal Years occurring during the last ten Fiscal Years that
the Participant was employed by the Corporation that yields the
highest number.
1.16.
Employee
Employee means a person who is an
employee of the Corporation or an Affiliate.
1.17.
Executive
Executive means an Employee who is
compensated at Grade 23 or above.
1.18.
Fiscal Year
Fiscal Year means the Corporation’s
taxable year for Federal income tax purposes.
1.19.
Foreign Social Security
Benefit
Foreign Social Security Benefit means the
excess, if any of (a) the benefit payable to a Participant at
normal retirement age under a retirement program maintained or
established by a foreign government over (b) the benefit that would
have been payable to the Participant at normal retirement age under
the United States Social Security program had the Participant been
covered by such program.
1.20.
Good Reason
(a) If on the date of the
Participant’s separation from service the Participant and the
Corporation are parties to an employment agreement or change in
control agreement that defines the term “Good Reason”
(or a variation thereof), then Good Reason has the same meaning as
set forth in that agreement.
(b) If on the date of the
Participant’s separation from service the Participant and the
Corporation are not parties to an employment agreement or change in
control agreement that defines the term “Good Reason”
(or a variation thereof), then Good Reason means (i) the assignment
to the Participant of any duties that are inconsistent with the
Participant’s position with the Corporation as of the
completion of the transaction described in Section 1.08(b); (ii) a
decrease in the Participant’s annual base salary, target
bonus or aggregate benefit levels from those in effect as of the
completion of the transaction described in Section 1.08(b) or (iii)
any failure to secure the agreement of any successor corporation or
other entity to the Corporation to fully assume the Plan as
provided in Section 7.06.
4
1.21.
Joint and Survivor
Annuity
Joint and Survivor Annuity means an
annuity for the life of the Participant with a survivor annuity for
the life of the Participant’s spouse (the person to whom the
Participant is legally married) which is equal to fifty percent
(50%) of the amount payable during the joint lives of the
Participant and such spouse and which is the actuarial equivalent
(using the actuarial assumptions and methods applicable to the Cash
Balance Plan) of an annuity for the life of the
Participant.
1.22.
Net After-Tax
Amount
Net After-Tax Amount means the amount of
any Parachute Payments or Capped Parachute Payments, as applicable,
net of taxes imposed under Code sections 1, 3101(b) and 4999 and
any State or local income taxes applicable to the Participant as in
effect on the date of the first payment under this Plan after a
Control Change Date. The determination of the Net After Tax
Amount shall be made using the highest combined effective rate
imposed by the foregoing taxes on income of the same character as
the Parachute Payments or Capped Parachute Payments, as applicable,
in effect for the year in which the determination is
made.
1.23.
Normal Retirement
Allowance
Normal Retirement Allowance means the
benefit described in Section 3.01 and which commences on a
Participant’s Normal Retirement Date.
1.24.
Normal Retirement
Date
Normal Retirement Date means the first
day of the month coincident with or next following a
Participant’s attainment of age 65 and on which the
Participant is not an Employee.
1.25.
Offset Amount
Offset Amount means the sum of the
monthly benefits, if any, payable to or on behalf of a Participant
under the Cash Balance Plan, the Pension Equalization Plan, the
Profit Sharing Account, the Foreign Social Security Benefit or any
employment agreement between the Corporation (or any Affiliate or
predecessor thereof) and the Participant, or any other supplemental
executive retirement plan maintained by the Corporation or an
Affiliate and any other benefit plan maintained by the Corporation
or an Affiliate, except to the extent that such plan provides a
benefit attributable to a Participant’s elective deferrals
under Code section 401(k). For purposes of Section 3.01(a),
the Offset Amount shall be determined as a single life
annuity (in the case of a Participant who is not legally married on
the date his benefit commences) and shall be determined as the
amount payable to the Participant during his lifetime under a Joint
and Survivor Annuity (in the case of a Participant who is legally
married on the date his benefit commences). For purposes of
Sections 3.01(b) and 3.02, the Offset Amount shall be
determined as the amount payable to the Surviving Spouse after
the
5
Participant’s death under a Joint
and Survivor Annuity. The Offset Amount shall be
determined using the actuarial assumptions and methods applicable
to the Cash Balance Plan and assuming a benefit commencement date
as of the date that the Participant’s benefit under the Plan
commences.
1.26.
Parachute
Payment
Parachute Payment means a payment that is
described in Code section 280G(b)(2) (without regard to whether the
aggregate present value of such payments exceeds the limit
prescribed by Code section 280G(b)(2)(A)(ii)). The amount of
any Parachute Payment shall be determined in accordance with Code
section 280G and the regulations promulgated thereunder, or, in the
absence of final regulations, the proposed regulations promulgated
under Code section 280G.
1.27.
Participant
Participant means an Executive who
satisfies the requirements of Article II.
1.28.
Pension Equalization
Plan
Pension Equalization Plan means the
Dibrell Brothers, Incorporated Pension Equalization Plan, and any
successor thereto.
1.29.
Plan
Plan means the DIMON Incorporated
Supplemental Executive Retirement Plan.
1.30.
Profit Sharing
Account
Profit Sharing Account means, as of any
date, a Participant’s March 31, 1998 profit sharing account
balance in the DIMON International Profit Sharing Plan as adjusted
for gains and losses as if such March 31, 1998 account balance had
been invested in the Stable Value Fund of the DIMON Incorporated
Savings and Profit Sharing Plan or such successor fund as may be
designated by the Administrator.
1.31.
Pro Ration
Percentage
Pro Ration Percentage means the
percentage determined by adding the “service fraction”
and the “age fraction” and dividing the sum by two.
The “service fraction” is a fraction in which the
numerator is the Years of Service (in whole and fractional
years, but not to exceed twenty) credited to a Participant on the
date of termination of employment with the Corp
