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CAMBREX CORPORATION
EXHIBIT 10.24
Deferred Compensation Plan
of Cambrex Corporation
Effective January 1, 1994
(As Amended and Restated as of January 1, 1995)
1. Eligibility
Each officer or other key employee (a "Key Employee") who
participates in the annual incentive compensation plan maintained by Cambrex
Corporation (the "Corporation") 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 V.P. 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 V.P.
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
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
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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 (y) 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 for the following calendar year which is payable in United States
currency.
c. Form and Duration of Deferral Election. An election to
defer bonus or salary shall be made by written notice filed on a designated
form with the V.P. of Administration. The minimum amount that each Key
Employee may defer under the Plan for each year shall be $5,000 (or such other
amount as the V.P. of Administration shall determine). Any such election shall
continue in effect (including with
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respect to 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 V.P. 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 V.P. of Administration.
d. 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.
c. Designation of Phantom Investment Funds. The Benefits
Administration Committee shall select one or more
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mutual funds or other investment vehicles (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 V.P. 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 V.P. 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 V.P. 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) estab-
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lish 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 3.2 after the date the
election form is filed with the V.P. 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 V.P. 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 10 business
days after the proper form is filed with the V.P. of Administration (or such
other time as the V.P. 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.
f. Crediting of Phantom Investment Experience. As of the
last day of each calendar quarter (or such other
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time as the V.P. 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 Fund
during that calendar quarter (or such other period as may have been established
by the V.P. of Administration).
g. 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 (g)
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 V.P. of Administration a written election (a "Distribution Election") with
respect to the timing and manner of distribution of the aggregate amount, if
any, credited to his Account at any time. A Key Employee may
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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 V.P. of Administration shall
impose, a Key Employee may also elect to receive all or a portion of the
aggregate amount credited to his Account as of the first day of any calendar
year while he is an employee. If a distribution election is not made 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
as soon as administratively possible after the first business day of 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 as soon as
administratively possible after the first business day of each 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 no such
election shall be
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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 Participant receives any
distribution from his Account while still eligible to make deferrals hereunder,
the V.P. of Administration may suspend the Participant's right to defer
additional amounts Account during such calendar year in accordance with Section
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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 balance
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.
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
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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 V.P. 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 amend-
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ment 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 forgoing, 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
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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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