EXHIBIT 10.20
THE EZENIA! INC. DEFERRED
COMPENSATION PLAN
The Ezenia! Inc. Deferred
Compensation Plan (the “Plan”) adopted effective as of
March 31, 2006 by Ezenia! Inc. (the “Employer”) to
permit Eligible Employees to defer receipt of certain compensation
pursuant to the terms and provisions set forth below is hereby
amended and restated this 11 th day of December, 2008, to be effective as
of January 1, 2009.
The Plan is intended (1) to
comply with Code Section 409A and official guidance issued
thereunder, and (2) to be “a plan which is unfunded and
is maintained by the Employer primarily for the purpose of
providing deferred compensation for a select group of management or
highly compensated employees” within the meaning of Sections
201(2), 301(a)(3) and 401(a)(1) of ERISA.
Notwithstanding any other provision of the Plan, the Plan shall be
interpreted, operated and administered in a manner consistent with
these intentions.
ARTICLE I
DEFINITIONS
Wherever used herein the following
terms shall have the meanings hereinafter set forth:
“ Affiliate ”
means any corporation or other entity that is treated with the
Employer as a single employer under Code
Section 414.
“ Base Pay ”
means an Employee’s annual base compensation but excluding
Incentive Awards or any other additional compensation.
“ Beneficiary ”
means the person or persons or trust designated by a Participant to
receive any amounts payable under the Plan in the event of the
Participant’s death. Notwithstanding the foregoing, if
any payment due a person remains unpaid at his death, the payment
will be made to (i) that person’s spouse; (ii) if
no spouse is living at the time of such payment, then his living
children, in equal shares; (iii) if neither a spouse nor
children are living, then his living parents, in equal shares;
(iv) if neither spouse, nor children, nor parents are living,
then his living brothers and sisters, in equal shares; and
(v) if none of the individuals described in (i) through
(iv) are living, to his estate.
“ Code ” means
the Internal Revenue Code of 1986, as amended.
“ Change in Control
” means the date on which there is a (i) change of the
majority ownership of the Employer, (ii) change in the
effective control of the Employer, or (iii) change in the
ownership of a substantial portion of the assets of the Employer,
as determined in accordance with Code Section 409A and
official guidance issued thereunder.
For purposes of (i), a “change
in the ownership of the Employer” means the date of a change
in ownership of more than 50% of the total fair market value or
total voting power of the outstanding stock of the
Employer.
For purposes of (ii), a
“change in the effective control of the Sponsor” means
the date (a) any one person or a group acquires 35% or more of
the total voting power of the outstanding stock of the Employer (as
determined over a 12-month period); or (b) a majority of the
members of the Employer’s Board of Directors is replaced
during any 12-month period by directors whose appointment or
election is not endorsed by a majority of the members of the
Employer’s Board of Directors prior to the date of the
appointment or election.
For purposes of (iii), a
“change in the ownership of a substantial portion of the
assets of the Employer” means the date of a change in
ownership of assets of the Employer with a value more than 40% of
the total gross fair market value of the Sponsor’s assets
immediately prior to such acquisition(s).
Notwithstanding anything herein to
the contrary, a Change in Control of one member of a group of
commonly owned companies will not create a distribution event for
Participants working for other members of the group.
“ Deferral Form ”
means a written form provided by the Employer pursuant to which an
Eligible Employee may elect to defer Eligible Income under the
Plan.
“ Deferral Account
” means an account established by the Employer for each
Participant electing to defer Base Pay and Incentive Awards under
the Plan.
“ Disability ”
means a Participant’s physical or mental impairment that can
be expected to result in death or to continue for at least 12
months or, because of such impairment, the Participant is receiving
income replacement benefits for a period of at least three months
under an accident and health plan maintained by the
Employer.
“ Eligible Employee
” means an individual who is an Employee who is a member of a
“select group of management or highly compensated
employees,” as that phrase is used in Section 201, 301
and 401 of ERISA and as designated by the Employer.
“ Eligible Income
” means Base Pay and Incentive Awards.
“ Employee ”
means an individual who is a regular employee on the U.S. payroll
of the Employer or its Affiliates, other than a temporary or
intermittent employee. The term “Employee” shall
not include a person hired as an independent contractor, leased
employee, consultant, or a person otherwise designated by the
Employer or an Affiliate as not eligible to participate in the
Plan, even if such person is determined to be an
“employee” of the Employer or an Affiliate by any
governmental or judicial authority.
“ Employer ”
means Ezenia! Inc. and any successor corporation or other
entity. In addition, the term Employer shall include any
Participating Employer which shall adopt this Plan in accordance
with Section 6.3 of the Plan.
“ ERISA ” means
the Employee Retirement Income Security Act of 1974, as
amended.
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“ Incentive Award
” means an amount payable to an Eligible Employee under a
cash bonus or incentive compensation plan of the Employer or an
Affiliate that the Employer has deemed eligible for
deferral.
“ Investment Options
” means the investment options, as determined from time to
time by the Employer, used to credit earnings, gains and losses on
Deferral Account balances.
“ Participant ”
means an Eligible Employee who elects or has elected to defer
amounts under the Plan.
“ Participating
Employer ” means any other corporation or entity that
adopts this Plan in accordance with Section 6.3 of the
Plan.
“ Plan ” means
the Ezenia! Inc. Deferred Compensation Plan, as set forth herein
and as amended from time to time.
“ Plan Year ”
means January 1 st
through
December 31 st
.
“ Separation from
Service ” or “ Separates from Service
” occurs when the Employer and the Participant reasonably
anticipate that no further services would be performed by the
Participant for the Employer or any affiliates of the Employer
after a certain date, that the level of bona fide services the
Participant would perform for the Employer after such date (whether
as an Employee or as an independent contractor) would permanently
decrease to no more than 20 percent of the average level of bona
fide services performed by the Participant for the Employer over
the immediately preceding 36-month period (or period of employment,
if less than 36 months).
“ Trust ” means
the irrevocable, non-qualified grantor trust (rabbi trust)
described in Section 3.5 and established pursuant to the Trust
Agreement under The Ezenia! Inc. Deferred Compensation
Plan.
ARTICLE II
PARTICIPATION
Participation in the Plan shall be
limited to Eligible Employees. The Employer shall notify any
Employee of his status as an Eligible Employee at such time and in
such manner as the Employer shall determine. An Eligible
Employee shall become a Participant by making a deferral election
under Article III.
ARTICLE III
DEFERRAL ACCOUNTS
3.1
Deferral Elections . Deferrals may be made
by an Eligible Employee with respect to his Eligible Income, as
permitted by the Employer:
(a)
An Eligible Employee may elect to defer:
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(i)
The percentage or amount of his Base Pay.
(ii)
The deferral amount designated by an Eligible Employee will be
deducted in equal installments over the pay periods falling within
the Plan Year to which the election pertains.
In order to elect to defer Base Pay
earned during a Plan Year, an Eligible Employee shall submit an
irrevocable Deferral Form with the Employer before the beginning of
such Plan Year.
(b)
Incentive Awards . An Eligible Employee may elect to
defer any portion of his Incentive Award up to 100%, expressed as
whole percentage points or as a specific dollar amount. In
order to elect to defer an Incentive Award, an Eligible Employee
shall submit an irrevocable Deferral Agreement with the Employer
before the beginning of the calendar year in which the performance
period to which Incentive Award pertains.
(c)
Newly Eligible Participant . Notwithstanding the
foregoing, within thirty (30) days after being designated by the
Employer for participation in the Plan, the Participant shall make
an irrevocable deferral election for the remaining term of the Plan
Year in which the Participant commences participation, along with
such other elections as the Employer deems necessary under the
Plan. Such deferral election may apply only to Base Pay and
Incentive Awards for services performed after the effective date of
the deferral election.
3.2
Crediting of Deferrals . Eligible Income
deferred by a Participant under the Plan shall be credited to the
Participant’s Deferral Account as soon as administratively
practicable after the amounts would have otherwise been paid to the
Participant.
3.3
Vesting . A Participant shall
at all times be 100% vested in any amounts credited to his Deferral
Account.
3.4
Earnings . The Employer shall
credit deemed gains, losses and earnings to a Participant’s
Deferral Account at the end of each fiscal quarter, until the
balance of the Participant’s Deferral Account is distributed
in accordance with Article IV. Any deemed earnings or
losses (net appreciation or net depreciation) shall be allocated to
Participants’ Deferral Accounts in the same proportion that
each Participant’s Deferral Account bears to the total of all
Participants’ Deferral Accounts as of the last day of the
previous fiscal quarter. Payments in accordance with
Article IV shall be based on all amounts credited to the
Participant’s Deferral Account as of the date the Deferral
Account is paid to the Participant. The Employer shall
specify procedures to allow Participants to make elections as to
the deemed investment of amounts newly credited to their Deferral
Account, as well as the deemed investment of amounts previously
credited to their Deferral Account. Without limiting the
foregoing, a Participant’s Deferral Account shall at all
times be a bookkeeping entry only and the Participant shall at all
times remain an unsecured creditor of the Employer.
3.5
Funding . The Employer shall be
under no obligation to establish a fund or reserve in order to pay
the benefits under the Plan except in the event of a Change in
Control. The Employer shall be required to make payments only
as benefits become due and payable. No person shall have any
right, other than the right of an unsecured general creditor,
against the Employer with respect to the benefits payable
hereunder, or which may be payable hereunder, to
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any Participant or
Beneficiary. Notwithstanding the foregoing, in order to pay
benefits under the Plan, the Employer may establish an irrevocable
non-qualified grantor trust (hereinafter the “Trust”)
within the meaning of Sections 402(b) and 671-677 of the
Code. The assets in such Trust shall at all times be subject
to the claims of the general creditors of the Employer in the event
of the Employer’s bankruptcy or insolvency, and neither the
Plan nor any Participant or Beneficiary shall have any preferred
claim or right to, or any beneficial ownership interest in, any
such assets of the Trust prior to the time such assets are paid to
a Participant or Beneficiary, and all rights created under the Plan
and said Trust shall be unsecured contractual rights of a
Participant or Beneficiary against the Employer. The Employer
will pay annual income taxes on the Trust earnings and may in any
year use the Trust earnings to pay such taxes. The Employer
will be entitled to take an income tax deduction for benefits
actually paid each year from the Trust.
3.6
Prefunding . Notwithstanding
anything herein to the contrary, the Employer may prefund the Trust
in order to fund benefits that become payable under the Plan.
Such assets will be used solely to fund benefits payable under the
Plan and prefunding the Trust will not affect the contractual
obligations of the Employer under Section 3.5. In the
event of a Change in Control, the amount the Employer is obligated
to contribute to the Trust will be offset by the then current
balance of the Trust resulting from prior funding of the
Trust.
ARTICLE IV
DISTRIBUTION OF DEFERRAL ACCOUNTS
4.1
Time and Form of Payment Elections .
(a)
The Deferral Agreement . On the initial Deferral
Agreement, a Participant may
