EXHIBIT 10.24
DEFERRED COMPENSATION PLAN
OF CAMBREX CORPORATION
(AS AMENDED AND RESTATED AS OF MARCH 1, 2001)
1. ELIGIBILITY
Each officer or other key employee (a "Key Employee") shall be eligible to
participate in the Deferred Compensation Plan of Cambrex Corporation (the
"Plan"), provided that, notwithstanding any other provision of the Plan to the
contrary, the Vice President of Administration may impose such terms, conditions
or limitations on the participation of any Key Employee or any class of Key
Employees that he deems necessary or appropriate for the proper administration
of the Plan. The Vice President of Administration shall provide a copy of the
Plan to each Key Employee together with a form of letter which may be used by
the Key Employee to notify Cambrex Corporation (the "Corporation") of his
election to participate in the Plan.
2. PARTICIPATION
a. Bonus Deferral Election. On or before December 31st of any calendar
year, a Key Employee may elect to defer receipt of all or any part of any annual
bonus payable in United States currency for services performed during such year
which, but for such election, is expected to be paid to him in the next
following calendar year.
b. Salary Deferral Election. On or before December 31st of any calendar
year, a Key Employee may elect to defer receipt of all or any part of that
portion of his annual base salary payable in United States currency in the
following calendar year which exceeds the sum of (i) the Social Security wage
base with respect to old age, survivor and disability income taxes in effect for
such following calendar year and (ii) $10,000. Notwithstanding the foregoing, a
Key Employee who (x) receives an annual base salary in United States currency in
excess of the sum of (i) and (ii) above and (v) is not subject to withholding
for old age survivor and disability employment taxes under U.S. law may elect to
defer receipt of all or a portion of his annual base salary in excess of Ten
Thousand Dollars ($10,000) for the following calendar year which is payable in
United States currency.
c. Stock Option Deferral Election. With the approval of the Vice President
of Administration, a Key Employee may elect, on or before December 31st of any
calendar year, to defer receipt of all or a portion of the Corporation's common
stock ("Common Stock") which would otherwise be issued upon exercise in the
following calendar year of a stock option under a Corporate stock option plan,
provided that in each case such election must be made (i) within 30 days of the
effective date of this subsection, or (ii) more than six months prior to the
date on which the Common Stock is to be issued.
d. Form and Duration of Deferral Election. An election to defer bonus,
salary or Common Stock issued upon an option exercise shall be made by written
notice filed on a designated form with the Vice President of Administration. The
minimum dollar amount that each Key Employee may defer under the Plan for each
year shall be (i) with respect to annual bonuses, Ten Thousand Dollars
($10,000); (ii) with respect to base salary, Ten Thousand Dollars ($10,000); and
(iii) with respect Common Stock, One Hundred Thousand Dollars ($100,000) at
closing market price on the date of deferral, provided that in each case the
Vice President of Administration may determine a greater or lesser minimum
deferral amount. Except with respect to elections to defer receipt of Common
Stock, any such election shall continue in effect with respect to cash
compensation payable for subsequent calendar years unless and until the Key
Employee revokes or modifies such election by written notice on a designated
form filed with the Vice President of Administration. Any such revocation or
modification of a deferral election shall become effective only with respect to
compensation payable in the calendar year following receipt of such revocation
or modification by the Vice President of Administration.
e. Renewal. A Key Employee who has revoked an election to participate in
the Plan may file a new election to defer compensation payable in the calendar
year following the year in which such election is filed.
3. KEY EMPLOYEE'S ACCOUNT
a. Establishment of Account. The Corporation shall maintain a separate
memorandum account (the "Account") for each Key Employee who has elected to
participate in the Plan, and shall make additions to and subtractions from such
Account as provided in this Section 3.
b. Additions to Account. Compensation allocated to a Key Employee's
Account pursuant to this Section 3 shall be credited to such Account as of the
date such compensation would otherwise have been paid to the Key Employee. A Key
Employee electing to defer the receipt of Common Stock pursuant to Section 2(c),
will be deemed to have invested in a stock unit fund (the "Stock Unit Fund") and
such Key Employee's Account will be credited, as of the date of exercise of the
stock option, with a hypothetical number of units ("Stock Units") equal to the
number of shares of Common Stock which would otherwise have been issued upon
exercise of the stock option if such deferral election had not been made.
c. Designation of Phantom Investment Funds. The Benefits Administration
Committee shall select one or more mutual funds or other investment vehicles in
addition to the Stock Unit Fund, (the "Phantom Funds") which shall be used to
determine the hypothetical investment experience of each Key Employee's Account
under the Plan; provided, however, that unless the Benefits Administration
Committee otherwise determines the Phantom Funds shall be the investment funds
available to employees as investment options from time to time under the
Company's qualified savings plan (the "Savings Plan").
d. Investment Election. Each Key Employee shall from time to time
designate on a form approved by the Vice President of Administration the Phantom
Fund or Funds that shall determine the investment experience with respect to
such Key Employee's Account; provided, however, that the Vice President of
Administration may require that the Key Employee's Account be credited or
debited as though such Account were invested in the same Phantom Funds, and in
the same percentages, as such Key Employee's account balance is invested from
time to time under the Savings Plan. The Vice President of Administration may,
in his discretion, (i) establish minimum amounts (in terms of dollar amounts or
a percentage of a Key Employee's Account), which may be allocated to any Phantom
Fund, (ii) preclude any Key Employee who is an executive officer of the Company
from designating any Phantom Fund which invests primarily in securities issued
by the Company, (iii) establish rules regarding the time at which any such
election (or any change in such election permitted under Section 3(e) shall
become effective, and (iv) permit different designations with respect to a Key
Employee's existing Account balance and amounts to be credited to such Account
under Section 3(e) after the date the election form is filed with the Vice
President of Administration. If a Key Employee fails to make a valid election
with respect to any portion of his Account (or if any such election ceases to be
effective for any reason), such Key Employee shall be deemed to have elected to
have his entire Account deemed invested in the Phantom Fund which the Vice
President of Administration determines generally to have the least risk of loss
of principal.
e. Change in Designation of Phantom Fund. Effective as of the first
business day of the calendar quarter commencing more than ten (10) business days
after the proper form is filed with the Vice President of Administration (or
such other time as the Vice President of Administration shall permit), a Key
Employee may change the Phantom Funds designated with respect to all or any
portion of his Account. Any such change shall comply with all rules applicable
with respect to any initial designation of such Phantom Funds. Notwithstanding
the foregoing, unless otherwise approved by the Vice President of
Administration, a Key Employee will be permitted only four (4) transfers from
his or her Stock Unit Fund to another Phantom Fund in any calendar year, and the
minimum value of such transfer shall be One Hundred Thousand Dollars ($100,000),
provided that after September 30, 1998, no transfer from the Stock Unit Fund to
another Phantom Fund shall be permitted.
f. Crediting of Phantom Investment Experience. (i) As of the last day of
each calendar quarter (or such other time as the Vice President of
Administration shall establish from time to time), each Key Employee's Account
shall be credited or debited, as the case may be, with an amount equal to the
net investment gain or loss which such Key Employee would have realized had he
actually invested in each Phantom Fund an amount equal to the portion of his
Account designated as deemed invested in such Phantom
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Fund during that calendar quarter (or such other period as may have been
established by the Vice President of Administration).
(ii) Whenever a dividend is declared with respect to the Common Stock, a
Key Employee's Account shall also be credited as of the payment date with a
number of additional Stock Units computed as follows: (x) the number of Stock
Units in the Key Employee's Account multiplied by any dividend payable in cash
or property other than Common Stock declared by the Corporation on a share of
Common Stock, divided by the closing market price of the Common Stock on the
related dividend record date and/or (y) the number of Stock Units in the Key
Employee's Account multiplied by any stock dividend declared by the Corporation
on a share of Common Stock, provided that the Vice President of Administration
may determine another method of crediting dividends to a Key Employee's Account.
(iii) In the event of any change in the Common Stock by reason of any
merger, consolidation, reorganization, recapitalization, stock split,
combination or exchange of shares, or any other similar change affecting the
Common Stock, other than a stock dividend as provided above, the number of Stock
Units credited to a Key Employee's Account shall be appropriately adjusted in
such manner as determined by the Vice President of Administration.
g. Valuation of Stock Units on Transfer. In the event a Key Employee
elects to transfer all or a portion of his or her Stock Unit Fund to another
Phantom Fund prior to September 30, 1998 as provided in Section 3(e), the amount
transferred shall be determined by multiplying the number of Stock Units subject
to the election by the fair market value of the Common Stock as determined in
accordance with procedures established by the Vice President of Administration
reduced by any expenses directly related to the transfer.
h. No Actual Investment. Notwithstanding anything else in this Section 3
to the contrary, no amount standing to the credit of any Key Employee's Account
shall be set aside or invested in any actual fund on behalf of such Key
Employee; provided, however, that nothing in this Section 3(h) shall be deemed
to preclude the company from making investments for its own account in any
Phantom Funds (whether directly or through a grantor trust) to assist it in
meeting its obligations to the Key Employees hereunder.
4. DISTRIBUTION FROM ACCOUNT
a. Distribution Election. Each Key Employee shall file with the Vice
President of Administration a written election (a "Distribution Election") with
respect to the timing and manner of distribution of the aggregate cash amount,
if any, as well as any Stock Units credited to his Account at any time. A Key
Employee may elect to receive a distribution from his Account in one lump-sum
payment, or in such number of annual installments (not to exceed ten) as the Key
Employee may designate. Subject to such limitations as the Vice President of
Administration shall impose, a Key Employee may, while he is an employee, also
elect to receive all or a portion of the aggregate amount credited to his
Account, payment to be made in accordance with Section 4(b) during the month of
January, or, if payment cannot be made during the month of January, payment
shall be made as soon as administratively possible thereafter. If a distribution
election is not made during active employment or if such election does not apply
to the entire balance in such Account, the balance in the Key Employee's Account
shall be distributed in a single lump-sum payment during the month of January or
as soon as administratively possible thereafter, during the calendar year
immediately following the year of separation from employment. In the case of any
distribution being made in annual installments, each installment after the first
installment shall be paid during the month of January or as soon as
administratively possible thereafter during the calendar year following the year
in which such first installment is paid until the entire amount subject such
installment Distribution Election shall have been paid.
b. Amendment of Distribution Election. A Key Employee may, at any time
during active employment, elect to change the time at which distributions from
his Account will commence; provided, however, that unless the Vice President of
Administration shall otherwise determine, no such election shall be effective
unless at least one full calendar year elapses between (i) the date as of which
such election is filed and (ii) (A) the date as of which a distribution would
otherwise have commenced and (B) the date as which such distribution will
commence under such election. If a Key Employee receives any distribution from
his Account while still eligible to make deferrals hereunder, the Vice President
of Administration may suspend
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the Key Employee's right to defer additional amounts Account during such
calendar year in accordance with Section 2.
c. Amount of Installment Payments. Where the Key Employee receives the
balance of his Account in annual installments, the amount of each installment
shall be approximately equal to the product of (i) the cash balance and/or the
number of Stock Units credited to such Account on the date of such payment and
(ii) a fraction, the numerator of which is one (1) and the denominator of which
is the total number of installments remaining to be paid at that time, provided
that if the Key Employee elects to receive installments, and the value of the
any installment remaining at the time of distribution of any installment is One
Hundred Thousand Dollars ($100,000) or less, a minimum of $100,000 or balance
shall be distributed as such installment.
d. Form of Distribution. Distribution of any amount credited to a Key
Employee's Account on a cash basis shall be made in cash. Distributions of Stock
Units in such Key Employee's Account shall be made in whole shares of Common
Stock; fractional shares shall be paid in an amount equal to the number of
fractional shares multiplied by the fair market value of the Common Stock as
determined in accordance with procedures established by the Vice President of
Administration reduced by the amount of any expense directly related to such
distribution.
e. Change of Control. Notwithstanding the foregoing, upon a Change of
Control (as defined below), a Key Employee's Account shall immediately be
distributed to a Key Employee in a lump sum distribution within ten (10) days
following the occurrence of such Change of Control (as defined below) unless all
the Trustees then serving unanimously determine that such acceleration of
distributions should not occur. A "Change of Control" for purposes of this Plan
shall mean:
(i) the acquisition (other than from the Corporation) by any person,
entity or "group" (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934 (the "Exchange Act") but excluding for
this purpose the Corporation or its subsidiaries or any employee benefit
plan of the Corporation or its subsidiaries which acquires beneficial
ownership of voting securities of the Corporation) of "beneficial
ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of Twenty Percent (20%) of more of the then outstanding shares of
common stock or the combined voting power of the Corporation's then
outstanding voting securities entitled to vote generally in the election of
directors; or
(ii) individuals who, as of the date hereof, constitute the Board (as
of the date hereof the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided that any person
becoming a member of the Board subsequent to the date hereof whose election
or nomination for election by the Corporation's stockholders (other than an
election or nomination of an individual whose initial assumption of office
is in connection with an actual or threatened election contest relating to
the election of the directors of the Corporation, as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) was
approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be, for purposes of this provision, considered a
member of the Incumbent Board; or
(iii) approval by the stockholders of the Corporation of either a
reorganization, or merger, or consolidation, with respect to which persons
who were the shareholders of the Corporation immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own
more than fifty percent (50%) of the combined voting power entitled to vote
generally in the election of directors of the reorganized, merged or
consolidated entity's then outstanding voting securities, or a liquidation
or dissolution of the Corporation, or the sale of all or substantially all
of the assets of the Corporation; or
(iv) any other event or series of events which, notwithstanding any of
the foregoing provisions of this Section 4(e) to the contrary, is
determined by a majority of the Incumbent Board to constitute a Change of
Control for the purposes of this Plan.
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5. DISTRIBUTION ON DEATH
If a Key Employee shall die before payment of all amounts credited to the
Key Employee's Account has been completed, the total unpaid balance then
credited to such Key Employee's Account shall be paid to the Key Employee's
designated beneficiaries or estate in a single lump-sum payment as of the first
business day of the first calendar month commencing after the date of the Key
Employee's death or as soon, thereafter, or administratively possible.
6. DESIGNATION OF A BENEFICIARY
A Key Employee may designate a beneficiary or beneficiaries (which may be
an entity other than a natural person) to receive any payments to be made upon
the Key Employee's death pursuant to Section 5 hereof. At any time, and from
time to time, any such designation may be changed or canceled by the Key
Employee without the consent of any beneficiary. Any such designation, change or
cancellation must be made by written notice filed with the Vice President of
Administration. If a Key Employee designates more than one beneficiary, any
payments to such beneficiaries made pursuant to Section 5 shall be made in equal
shares unless the Key Employee has designated otherwise, in which case the
payments shall be made in the shares designated by the Key Employee. If no
beneficiary has been named by a Key Employee, payment shall be made to the Key
Employee's spouse or, if the Key Employee has no spouse at the time of his
death, to the Key Employee's estate.
7. AMENDMENT AND TERMINATION.
The Benefits Administration Committee may, at any time, amend or terminate
the Plan; provided no such amendment or termination shall impair the rights of a
Key Employee with respect to amounts then credited to his Account under the
Plan.
8. MISCELLANEOUS
a. Unfunded Plan. The Corporation shall not be obligated to fund its
liabilities under the Plan, the Account established for each Key Employee
electing deferment shall not constitute trusts, and a Key Employee shall have no
claim against the corporation or its assets other than as an unsecured general
creditor. Without limiting the generality of the foregoing, the Key Employee's
claim at any time shall be for the amount credited to such Key Employee's
Account at such time. Notwithstanding the foregoing, the Corporation may
establish a grantor trust or purchase securities to assist it in meeting its
obligations hereunder; provided, however, that in no event shall any Key
Employee have any interest in such trust or property other than as an unsecured
general creditor.
b. Non-alienation. The right of a Key Employee to receive a distribution
of the value of such Key Employee's Account payable pursuant to the Plan shall
not be subject to assignment or alienation.
c. No Right to Continued Employment. Nothing in this Plan shall be
construed to give any Key Employee the right to continue in the employ of the
Corporation or any of its subsidiaries.
d. Legal Fees. In the event that any Key Employee (or the beneficiary or
legal representative of such Key Employee) shall make demand for payment of
benefits due under the terms of the plan and prevail as to any material aspect
of such claim, the Corporation shall pay all of the Key Employee's expenses in
conjunction with pursuing such claim (including, without limitation, legal fees)
and interest on the amount due from the date of such demand in an amount equal
to the greater of (i) the amount of earnings credited to the Key Employee's
Account hereunder or (ii) 10% per annum compounded semi-annually.
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