COASTCAST CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
This Supplemental Executive Retirement Plan (the "Plan") is hereby
established by Coastcast Corporation, a California corporation (the "Company"),
effective September 1, 1996, for the purpose of attracting high quality
employees and promoting in its employees increased efficiency and an interest in
the successful operation of the Company by providing selected employees with
benefits upon retirement.
ARTICLE I
DEFINITIONS
1.1 ADMINISTRATIVE COMMITTEE shall mean the Benefits Committee appointed
by the Board of Directors of the Company to administer the Plan pursuant to
Article 5 of the Plan.
1.2 BENEFICIARY shall mean the person(s) or entity designated as such in
accordance with Article 7 of the Plan.
1.3 DISABILITY shall mean any cessation of the Participant's employment
with the Company as a result of a physical or mental condition which prevents
the Participant from performing important duties of his or her current
employment. The Administrative Committee, in its complete and sole discretion,
shall determine a Participant's Disability. At all times during the period of
Disability, the Participant must be receiving regular and personal medical care
from a competent physician unless the Participant provides the Administrative
Committee with written proof acceptable to the Administrative Committee
indicating that further medical care would be of no benefit. The Administrative
Committee may require that the Participant submit to an examination by a
competent physician or medical clinic selected by the Administrative Committee
on an annual basis to confirm Disability. On the basis of such medical
evidence, the determination of the Administrative Committee as to whether or not
a condition of Disability exists or continues shall be conclusive.
1.4 CHANGE IN CONTROL shall mean either: (a) the dissolution or
liquidation of Company; (b) a reorganization, merger or consolidation of Company
with one or more corporations as a result of which Company is not the surviving
corporation; (c) approval by the stockholders of Company of any sale, lease,
exchange or other transfer (in one or a series of transactions) of all or
substantially all of the assets of Company; or (d) approval by the stockholders
of Company of any merger or consolidation of Company in which the holders of the
voting stock of Company immediately before the merger or consolidation will not
own fifty percent (50%) or more of the voting shares of the continuing or
surviving corporation immediately after such merger or consolidation.
EXHIBIT 10.1
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1.5 EARLY RETIREMENT DATE shall mean the date on which the Participant
attains age fifty-five (55) having completed at least five (5) Years of
Participation.
1.6 ELIGIBLE EMPLOYEE shall mean a management level or highly compensated
employee of the Company designated by the Administrative Committee to be
eligible to participate in the Plan.
1.7 ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended.
1.8 FINAL AVERAGE SALARY shall mean the Participant's average annual
salary (excluding bonuses and other non-regular forms of compensation) earned
from the Company (before adjustments for contributions to Company sponsored
employee benefit plans) during the three (3) highest salary years of the
five (5) year period ending on the December 31st next preceding the earlier of
Termination of Employment or the Normal Retirement Date.
1.9 FINANCIAL HARDSHIP shall mean an unexpected need for cash arising from
illness, casualty loss, sudden financial reversal, or other such unforeseeable
occurrence which is not covered by insurance and which is determined to qualify
as a Financial Hardship by the Administrative Committee. Cash needs arising
from foreseeable events such as the purchase of a residence or education
expenses for children shall not, alone, be considered a Financial Hardship.
1.10 NORMAL RETIREMENT DATE shall mean the date on which the Participant
attains age sixty-five (65).
1.11 PARTICIPANT shall mean an Eligible Employee who has become a
participant in the Plan in accordance with Article 2 of the Plan.
1.12 PLAN YEAR shall mean the calendar year except that the first Plan Year
shall begin on the effective date of the Plan and end on December 31, 1996.
1.13 TARGET RETIREMENT BENEFIT shall mean the Target Retirement Benefit as
defined in paragraph 3.1 of the Plan.
1.14 TERMINATION FOR CAUSE shall mean (a) a breach of the Participant's
fiduciary duty to the Company by reason of receipt of personal profits,
(b) conviction of a felony, or (c) any other willful and gross misconduct
committed by the Participant.
1.15 TERMINATION OF EMPLOYMENT shall mean the Participant's ceasing to
be employed by the Company for any reason whatsoever, voluntary or involuntary,
including by reason of the Participant's death or, to the extent provided in
paragraph 3.7 of the Plan, the Participant's Disability.
1.16 YEARS OF PARTICIPATION shall mean the number of complete Plan Years
that the Participant has been a Participant in the Plan while employed with the
Company, beginning with the first Plan Year in which the Participant commenced
participation in the Plan pursuant to Article 2 of
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the Plan. Participants beginning participation in the Plan on the effective
date of the Plan shall receive a full Year of Participation for the first
short Plan Year. Notwithstanding the foregoing, in no event shall a
Participant's total Year of Participation for purpose of this Plan exceed ten
(10) years.
ARTICLE 2
PARTICIPATION AND ELIGIBILITY
All Eligible Employees are automatically enrolled in the Plan as of the
date designated by the Administrative Committee.
ARTICLE 3
BENEFITS
3.1 TARGET RETIREMENT BENEFIT. The Target Retirement Benefit shall be
an annual amount, payable over the lifetime of the Participant, equal to the
Participant's Years of Participation multiplied by seven percent (7%) multiplied
by the Participant's Final Average Salary. The Target Retirement Benefit shall
be paid in monthly installments over the lifetime of the Participant unless the
Participant elects up to thirteen (13) months prior to Termination of Employment
to receive actuarially adjusted benefits (based on reasonable actuarial
assumptions) payable over the joint lives of the Participant and his or her
spouse.
3.2 NORMAL RETIREMENT BEGINNING DATE. In the event of the Participant's
Termination of Employment on or after the Normal Retirement Date, the
Participant shall be entitled to receive the Target Retirement Benefit beginning
sixty (60) days following the Normal Retirement Date.
3.3 EARLY RETIREMENT BENEFIT. In the event of the Participant's
Termination of Employment prior to the Normal Retirement Date but on or after
completing at least five (5) Years of Participation, if the Termination of
Employment was not a Termination for Cause and if the Participant has fully
complied with the provisions of paragraph 3.4 of the Plan, the Participant
shall be entitled to receive the Target Retirement Benefit beginning sixty (60)
days after the Normal Retirement Date. Notwithstanding the foregoing, the
Participant may elect up to thirteen (13) months prior to Termination of
Employment to receive actuarially reduced benefits (based on reasonable
actuarial assumptions) beginning on or after the Early Retirement Date.
3.4 REQUIREMENT NOT TO COMPETE. Prior to the Participant's Normal
Retirement Date, the Participant shall, in exchange for the right to continued
benefits under this Plan, not engage or participate (as a partner, shareholder,
director, officer, employee, agent, representative or independent contractor,
or in any other capacity calling for the making of an investment or the
performance of services) in any business which is competitive with the business
of the Company.
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For this purpose, a business which is competitive with the Company shall mean
any business involved in the casting of golf club heads for manufacturers of
premium price golf clubs.
3.5 PRE-RETIREMENT SURVIVOR BENEFIT. In the event of the Participant's
death prior to Termination of Employment the Participant's designated
Beneficiary shall be entitled to receive the Target Retirement Benefit
actuarially adjusted using reasonable actuarial assumptions to be paid in the
form of a single lump sum ninety (90) days after the death of the Participant.
3.6 POST-RETIREMENT SURVIVOR BENEFIT. In the event of the Participant's
death after Termination of Employment, no further benefits shall be payable
under the Plan unless the Participant has elected to have benefits payable
over the joint lives of the Participant and his or her spouse, in which case
benefit payments shall continue over the life of the Participant's spouse.
3.7 DISABILITY. For purpose of calculating benefits under the Plan,
Disability shall not be treated as a Termination of Employment and the
Participant shall continue to accrue Years of Participation during Disability,
unless such Disability continues through the Normal Retirement Date. If
Disability continues through such date, Termination of Employment shall be
deemed to occur on the Normal Retirement Date and the Participant shall be
entitled to receive the benefits provided upon normal retirement under this
Plan.
3.8 ADJUSTED BENEFIT ON CHANGE IN CONTROL. Notwithstanding the foregoing,
in the event of the Participant's Termination of Employment for any reason on or
after a Change in Control, the Participant shall be entitled to receive the
Target Retirement Benefit calculated by using ten (10) years of participation
payable beginning sixty (60) days after the Normal Retirement Date. In the
alternative, the Participant may elect up to thirteen (13) months prior to
Termination of Employment to receive actuarially reduced benefits (based on
reasonable actuarial assumptions) beginning on or after Termination of
Employment. In the event of the Participant's Termination of Employment on or
after a Change in Control, the Participant shall no longer be required to comply
with the provisions of paragraph 3.4 of the Plan.
ARTICLE 4
FINANCIAL HARDSHIP DISTRIBUTION
Upon a finding that the Participant or the Beneficiary has suffered a
Financial Hardship, the Administrative Committee may in its sole discretion,
accelerate distributions of benefits under the Plan in the amount reasonably
necessary to alleviate such Financial Hardship. For purposes of determining the
amount available for distribution to a Participant in the event of a Financial
Hardship, Final Average Salary shall be calculated as if a Termination of
Employment occurred on the date the Administrative Committee finds that the
Participant to have suffered such Financial Hardship.
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ARTICLE 5
CONDITIONS RELATED TO BENEFITS
5.1 RIGHTS ON TERMINATION OF EMPLOYMENT. Except as expressly provided
in the Plan, the Company will not be required or be liable to make any
payments under the Plan subsequent to the Participant's (a) Termination for
Cause or (b) Termination of Employment prior to completing five (5) Years of
Participation.
5.2 AMENDMENT OR TERMINATION OF AGREEMENT. The Company may direct the
Administrative Committee to amend or terminate the Plan at any time prior to
Termination of Employment. However, if the Company terminates the Plan or
amends the Plan in any manner resulting in a reduction of accrued benefits or a
delay in vesting of accrued benefits of any Participant, the effective date of
such termination or amendment shall be treated as the Early Retirement Date for
such Participant and such Participant shall be entitled to the benefits provided
under Section 3.3 without regard to the non-competition requirement of Section
3.4 and without regard to such termination or amendment of the Plan. If, after
a Change in Control, the Company terminates the Plan or amends the Plan in any
MANNER resulting in a reduction of accrued benefits or a delay in vesting of
accrued benefits of any Participant, the effective date of such termination or
amendment shall be treated as a Termination of Employment on or after a Change
in Control and such Participant shall be entitled to the benefits provided under
Section 3.8 without regard to such termination or amendment of the Plan. Any
amendment or termination of the Plan after a Participant's Termination of
Employment shall not affect benefits payable to such Participant or his or her
Beneficiary under the Plan.
5.3 NO RIGHT TO COMPANY ASSETS. The benefits paid under the Plan will be
paid from the general funds of the Company, and the Participant and any
Beneficiary will be no more than unsecured general creditors of the Company with
no special or prior right to any assets of the Company for payment of any
obligations hereunder.
5.4 TRUST. The Company shall be responsible for the payment of all
benefits under the Plan. At its discretion, the Company may establish one or
more grantor trusts for the purposes of providing for payment of benefits under
the Plan. Such trust or trusts may be irrevocable, but the assets thereof
shall be subject to the claims of the Company's creditors. Benefits paid to
the Participant from any such trust or trusts shall be considered paid by the
Company for purposes of meeting the obligations of the Company under the Plan.
5.5 PROTECTIVE PROVISIONS. The Participant shall cooperate with the
Company by furnishing any and all information requested by the Administrative
Committee, in order to facilitate the payment of benefits hereunder, taking such
physical examinations as the Administrative Committee may deem necessary and
taking such other actions as may be requested by the Administrative Committee.
If the Participant refuses to so cooperate, the Company shall have no further
obligation to the Participant under the Plan. In the event of the Participant's
suicide during the first two (2) years of participation in the Plan, or if the
Participant makes any material
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misstatement of information or nondisclosure of medical history, then, in the
sole discretion of the Administrative Committee, benefits may be payable in a
reduced amount to account for the Company's losses under any insurance product.
5.6 TAX LIABILITY AND WITHHOLDING. The Participant or Beneficiary shall
make appropriate arrangements with the Company for the satisfaction of any
federal, state or local income tax withholding requirements and Social Security
or other employee tax requirements applicable to the provision of benefits under
this Plan, If no other arrangements are made, the Company may provide, at its
discretion, for such withholding and tax payments as may be required. In the
event that at any time a determination is made by the Internal Revenue Service
that a Participant or Beneficiary is in constructive receipt of any benefits
payable under the Plan, the Company shall accelerate such benefits payable under
the Plan to such Participant or Beneficiary.
ARTICLE 6
ADMINISTRATION/CLAIMS PROCEDURES
6.1 ADMINISTRATION. The Administrative Committee shall administer the Plan
and interpret, construe and apply its provisions in accordance with its terms.
The Administrative Committee shall further establish, adopt or revise such rules
and regulations as it may deem necessary or advisable for the administration of
the Plan. All decisions of the Administrative Committee shall be final and
binding, subject only to a determination otherwise by the Board of Directors of
the Company.
6.2 NOTICE OF RIGHT TO CLAIM BENEFITS. The Administrative Committee shall
notify the Participant and, where appropriate, the Beneficiary, of a right to
claim benefits under the Plan, shall make forms available for filing of such
claims, and shall provide the name of the person or persons with whom such claim
should be filed.
6.3 CLAIMS PROCEDURES. The Administrative Committee shall establish
procedures for action upon claims initially made and the communication of a
decision to the claimant promptly and, in any event, not later than ninety (90)
days after the date of the claim. The claim may be deemed by the claimant to
have been denied for purposes of further review described below in the event a
decision is not furnished to the claimant within such ninety (90) day period.
Every claim for benefits which is denied shall be denied by written notice
setting forth in a manner calculated to be understood by the claimant (i) the
specific reason or reasons for the denial, (ii) specific reference to any
provisions of the Plan on which the denial is based, (iii) description of any
additional material or information that is necessary to process the claim, and
(iv) an explanation of the procedure for further reviewing the denial of the
claim.
6.4 REVIEW PROCEDURES. The Administrative Committee shall establish
procedures for review of claim denials, such review to be undertaken by the
Administrative Committee. The review given after denial of any claim shall be a
full and fair review, with the claimant or his duly
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authorized representative having one hundred eighty (180) days after receipt of
denial of his claim to request such review, having the right to review all
pertinent documents and the right to submit issues and comments in writing.
The Administrative Committee shall establish a procedure for issuance of a
decision by the Administrative Committee not later than sixty (60) days after
receipt of a request for review from a claimant unless special circumstances,
such as the need to hold a hearing, require a longer period of time, in which
case a decision shall be rendered as soon as possible but not later than one
hundred and twenty (120) days after receipt of the claimant's request for
review. The decision on review shall be in writing and shall include specific
reasons for the decision written in a manner calculated to be understood by the
claimant with specific reference to any provisions of the Plan on which the
decision is based.
ARTICLE 7
BENEFICIARY DESIGNATION
The Participant shall have the right, at any time, to designate any person
or persons as Beneficiary (both primary and contingent) to whom payment under
the Plan shall be made in the event of the Participant's death. The Beneficiary
designation shall be effective when it is submitted in writing to the
Administrative Committee during the Participant's lifetime on a form prescribed
by the Administrative Committee.
The submission of a new Beneficiary designation shall cancel all prior
Beneficiary designations. Any finalized divorce or marriage (other than a
common law marriage) of a Participant subsequent to the date of a Beneficiary
designation shall revoke such designation, unless in the case of divorce the
previous spouse was not designated as Beneficiary and unless in the case of
marriage the Participant's new spouse has previously been designated as
Beneficiary.
If a Participant fails to designate a Beneficiary as provided above, or if
the Beneficiary designation is revoked by marriage, divorce, or otherwise
without execution of a new designation, or if every person designated as
Beneficiary predeceases the Participant or dies prior to complete distribution
of the Participant's benefits, then the Administrative Committee shall
direct the distribution of such benefits to the Participant's estate.
ARTICLE 8
MISCELLANEOUS
8.1 SUCCESSORS OF THE COMPANY. The rights and obligations of the
Company under the Plan shall inure to the benefit of, and shall be binding upon,
the successors and assigns of the Company.
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8.2 ERISA PLAN. The Plan is intended to be an unfunded plan maintained
primarily to provide deferred compensation benefits for a select group of
"management or highly compensated employees" within the meaning of Sections 201,
301 and 401 of ERISA and therefore to be exempt from Parts 2, 3 and 4 of Title I
of ERISA.
8.3 EMPLOYMENT NOT GUARANTEED. Nothing the Plan nor any action taken
hereunder shall be construed as a contract of employment or as giving any
Participant any right to be retained in employment with the Company.
8.4 GENDER, SINGULAR AND PLURAL. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, or neuter, as the identity
of the person or persons may require. As the context may require, the singular
may be read as the plural and the plural as the singular.
8.5 CAPTIONS. The captions of the articles and paragraphs of the Plan are
for convenience only and shall not control or affect the meaning or construction
of any of its provisions.
8.6 VALIDITY. In the event any provision of the Plan is held invalid,
void or unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provisions of the Plan.
8.7 NOTICE. Any notice or filing required or permitted to be given to the
Company or the Participant under this Agreement shall be sufficient if in
writing and hand-delivered, or sent by registered or certified mail, in the case
of the Company, to the principal office of the Company, directed to the
attention of the Administrative Committee, and in the case of the Participant,
to the last known address of the Participant indicated on the employment records
of the Company. Such notice shall be deemed given as of the date of delivery or,
if delivery is made by mail, as of the dam shown on the postmark on the receipt
for registration or certification.
8.8 WAIVER OF BREACH. The waiver by the Company of any breach of any
provision of the Plan shall not operate or be construed as a waiver of any
subsequent breach by the Participant.
8.9 ARBITRATION. Any claim, dispute of other matter in question of any
kind relating to the Plan shall be settled by arbitration in accordance with the
California Employment Dispute Resolution Rules of the American Arbitration
Association. Notice of demand for arbitration shall be made in writing to the
opposing party and to the American Arbitration Association within a reasonable
time after the claim, dispute or other matter in question has arisen. In no
event shall a demand for arbitration be made after the date when the applicable
statute of limitations would bar the institution of a legal or equitable
proceeding based on such claim, dispute or other matter in question. The
decision of the arbitrators shall be final and may be enforced in any court of
competent jurisdiction. The arbitrators may award reasonable fees and expenses
to the prevailing party in any dispute hereunder and shall award reasonable fees
and expenses in the event that the
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arbitrators find that the losing party acted in bad faith or with intent to
harass, hinder or delay the prevailing party in the exercise of its rights in
connection with the matter under dispute.
Executed on AUGUST 16, 1996 under the authority and direction of the Board
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of Directors of the Company.
COMPANY: COASTCAST CORPORATION
A California Corporation
By /s/ Richard W. Mora
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Its President & COO
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