EXHIBIT 10.8
VECTOR GROUP LTD.
SUPPLEMENTAL RETIREMENT PLAN
VECTOR GROUP LTD., a Delaware corporation (the "Company"),
hereby adopts as of the date set forth below the Vector Group Ltd. Supplemental
Retirement Plan for the purpose of providing certain select management
employees of the Company and its affiliates unfunded deferred compensation
benefits payable upon retirement, death or other termination of employment.
SECTION 1
DEFINITIONS
Except as otherwise provided herein, the following terms
shall be defined in accordance with this Section 1:
1.1 "Accrued Benefit" shall mean that amount of
projected annual retirement benefit set forth on Exhibit A hereto that a
Participant who fulfills the terms and conditions of the Plan would receive at
his Normal Retirement Date.
1.2 "Actuarial Equivalent" shall mean a form of benefit
differing in time, period or manner of payout from the normal form of
retirement benefit provided under the Plan but having the same value when
computed using post-retirement mortality table 1983-A (M, F) and pre- and
post-retirement interest rates of 7.5%.
1.3 "Adopting Employer" means (a) any business entity in
which the Company owns a majority interest upon the Effective Date or (b) any
other business entity, which, following the Effective Date, is authorized by
the Board to adopt the Plan.
1.4 "Anniversary Date" shall mean the Effective Date and
each anniversary thereof while the Plan remains in effect.
1.5 "Board" shall mean the Board of Directors of the
Company.
1.6 "Committee" shall mean the person, persons or entity
designated by the Company to administer the Plan on behalf of the Company and
the Adopting Employers.
1.7 "Company" shall mean Vector Group Ltd., a Delaware
corporation.
1.8 "Disability" shall mean the total inability of a
Participant to perform all of the material duties of the Participant's regular
occupation on a full-time basis due to sickness or injury.
1.9 "Disability Retirement Date" shall mean the date
selected by the Committee occurring no later than 30 days following the finding
by the Committee that a Participant who has incurred a Disability is unlikely
to return to active Service prior to attainment of his Normal Retirement Date.
1.10 "Effective Date" shall mean the date set forth in
Section 8.1 of the Plan.
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1.11 "Employer" shall mean the Company and any Adopting
Employer for which a Participant renders service.
1.12 "Employer Contribution" shall mean the contribution
by an Employer to the Fund for each Plan Year described in Section 3.1 hereof.
1.13 "Fiscal Year" shall mean the fiscal year of the
Company.
1.14 "Fund" shall mean the fund established under the
Trust Fund Agreement.
1.15 "Normal Retirement Date" shall mean the January 1
following the Participant's attainment of the later of age 60 or the completion
of 8 Years of Service with the Company or an Adopting Employer following the
Effective Date.
1.16 "Participant" shall mean any key employee of an
Employer who from time to time may be designated on Exhibit A hereto as a
participant in the Plan by the Board and who is an active participant in the
Plan.
1.17 "Participant Payment Date" shall mean the date on
which a Participant's Accrued Benefit shall be paid either in whole or in part
to the Participant. Except as set forth in Section 6.4, such date shall be: (a)
the Disability Retirement Date of a Participant who has incurred a Disability,
(b) that date which falls 30 days following the Normal Retirement Date of a
Participant (as such date may be extended pursuant to Section 5.2 hereof), (c)
that date selected by the Board occurring no later than 6 months following the
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death of a Participant, if the Participant's death takes place prior to any
date described in clauses (a), (b) or (d) of this Section 1.17, or (d) that
date that falls 30 days following the termination of the Service of a
Participant without cause (as defined in Section 4.4 hereof).
1.18 "Participation Ratio" shall mean that percentage
equal to a fraction, the numerator of which consists of that number of full
Years of Participation of the Participant in the Plan that were completed by
the Participant prior to the Participant's termination of Service or incurrence
of a Disability and the denominator of which consists of that total number of
Years of Participation that would have been required on the part of the
Participant for the Participant to attain the Participant's Normal Retirement
Date.
1.19 "Plan" shall mean the Vector Group Ltd. Supplemental
Retirement Plan, as set forth herein and as the same may be amended from time
to time hereafter.
1.20 "Service" shall mean the period of full time
continuous employment of the Participant by the Company or an Adopting
Employer, following the Effective Date.
1.21 "Trust Fund Agreement" shall mean the Vector Group
Ltd. Supplemental Retirement Plan Trust, the purpose of which agreement is to
hold the Fund.
1.22 "Trustee" shall mean the trustee serving in such
capacity under the Trust Fund Agreement.
1.23 "Year of Participation" shall mean a Year of Service
in which the Participant participated in the Plan.
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1.24 "Year of Service" shall mean a 12 consecutive month
period, in each month of which a Participant is entitled to Compensation by
reason of Service.
SECTION 2
DESIGNATION OF PARTICIPANTS
AND ELIGIBILITY FOR BENEFITS
2.1 Designation of Participants. The Participants shall
be those key employees of the Company or an Adopting Employer that the Board
designates to participate in the Plan.
2.2 Eligibility for Benefits. Except as otherwise
provided herein, benefits under the Plan shall be payable in respect of a
Participant at the Participant Payment Date applicable to the Participant and
only by reason of the circumstances provided in Sections 4.1 through 4.4
hereof.
SECTION 3
CONTRIBUTION
3.1 Amount of Employer Contribution. For the Fiscal Year
ending with the Effective Date or within which falls the Effective Date and
thereafter for each Fiscal Year (or portion thereof) that the Plan remains in
effect, an Employer may, in the discretion of the Board, make an Employer
Contribution to the Fund in that amount that the Employer shall determine to be
necessary or appropriate to provide the benefits under the Plan.
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SECTION 4
CIRCUMSTANCES OF PAYMENT; EXCLUSIVITY
4.1 Attainment of Normal Retirement Date. Upon the
attainment of a Participant of the Participant's Normal Retirement Date, the
Participant shall be vested in the Participant's Accrued Benefit, which shall
be paid in the manner set forth in Section 5 hereof to the Participant at the
Participant Payment Date of such Participant, as provided in Section 1.16(b)
hereof.
4.2 Disability. A Participant in the Service of an
Employer who incurs a Disability prior to the attainment of the Participant's
Normal Retirement Date shall be vested at the Participant's Disability
Retirement Date in that amount equal to: (i) the Actuarial Equivalent of the
Participant's Accrued Benefit, multiplied by (ii) the Participant's
Participation Ratio, which amount shall be paid in the manner set forth in
Section 5 hereof to the Participant at the Participant Payment Date of such
Participant, as provided in Section 1.16(a) hereof.
4.3 Death. In the event a Participant in the Service of
an Employer dies prior to incurring a Disability or attaining his Normal
Retirement Date, such Participant's beneficiary shall be vested in the
Actuarial Equivalent of the Participant's Accrued Benefit, which shall be paid
in the manner set forth in Section 5 hereof at the Participant Payment Date
provided in Section 1.16(c) hereof.
4.4 Termination of Service. In the event of the
termination of the Service of a Participant hereunder by an Employer without
"cause" (as defined herein)
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such Participant shall be vested upon the effective date of such termination of
Service in that, amount equal to: (i) the Actuarial Equivalent of the
Participant's Accrued Benefit, multiplied by (ii) the Participant's
Participation Ratio, which amount shall be paid in the manner set forth in
Section 5 hereof at the Participant Date provided in Section 1.16(d) hereof.
For purposes of this Section 4.4, the term "cause" shall mean solely an act of
fraud or dishonesty by the Participant which constitutes a violation of the
penal law of the State of New York and which results in gain or personal
enrichment of the Participant at the expense of an Employer or any entity
affiliated therewith.
4.5 Exclusivity. A Participant whose Service is
terminated upon the Participant's own initiative or for any reason other than
as set forth in the foregoing provisions of this Section 4 shall be entitled to
no benefits whatsoever under the Plan.
SECTION 5
METHOD AND RECIPIENTS OF PAYMENTS;
PLAN ADMINISTRATION
5.1 Normal Payment Method and Recipients of Payments.
The normal form of distribution of the benefit payable to a Participant
pursuant to this Section 5.1, commencing upon the Participant Payment Date of
the Participant, shall be a monthly pension, payable, in the case of a
Participant who is married on such date, under a joint and survivor annuity
that represents the Actuarial Equivalent of a single life annuity, and in the
case of a Participant who is unmarried on such date, under a single life
annuity. In the event of the death of a Participant prior to the applicable
Participant Payment Date of the Participant, the amount of the death benefit
payable in accordance with Section 4.3 hereof
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shall be paid in a lump sum to the Participant's beneficiary or beneficiaries
theretofore designated by the Participant by filing with the Participant's
Employer or the Committee a notice in writing in such form as the Committee may
prescribe, and in the absence of such designation, shall be paid to the
executors or administrators of the estate of the Participant. The beneficiaries
named as aforesaid may be changed at any time by the Participant by amending
and forwarding to the Participant's Employer or the Committee a further written
designation.
5.2 Extension of Participant Payment Date. With the
prior approval of the Company or an Adopting Employer, a Participant may elect
to defer the Participant's applicable Participant Payment Date described in
Section 1.16(b) to a date no later than 30 days following the Participant's
actual termination of Service with the Company or an Adopting Employer,
provided such election is entered into prior to the commencement of that
calendar year in which would occur such otherwise applicable Participant
Payment Date. In the case of any extension of a Participant's applicable
Participant Payment Date authorized by this Section 5.2, the Participant shall
be entitled upon his actual Participant Payment Date to the Actuarial
Equivalent of the Participant's Accrued Benefit.
5.3 Exception to Normal Payout Method. Within the
three-month period ending 30 days prior to the applicable Participant Payment
Date of a Participant, a Participant may submit a request to the Committee in
writing to be paid the Accrued Benefit payable to the Participant commencing
upon the applicable Participant Payment Date in the form of a lump sum. The
Committee shall approve or disapprove such request
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in its discretion and notify the Participant of its decision prior to the
applicable Participant Payment Date of the Participant.
5.4 Plan Administration. The general administration of
the Plan shall be the responsibility of the Committee, which is hereby
authorized, in its discretion, to delegate said responsibilities to an
administrator or administrative committee.
SECTION 6
SOURCE OF BENEFITS;
NO GUARANTEE OF EMPLOYMENT;
NO FUNDING; CONSTRUCTIVE RECEIPT
6.1 Source of Benefits. Benefits payable under the Plan
shall be payable either from the general assets of the Company or an Adopting
Employer or, in the discretion of the Board, from the Fund. No one of the
Trustees, officers, agents or shareholders of the Company or an Adopting
Employer, or of the Committee or of any administrator or administrative
committee to which any function is delegated pursuant to Section 5.4 hereof,
assumes any personal liability for obligations incurred on behalf of the
Company or an Adopting Employer or under the Trust Agreement. No Participant's
or beneficiary's interest in a Participant's benefits under the Plan shall be
greater than that of an unsecured creditor of the Company or an Adopting
Employer.
6.2 No Guarantee of Employment. Nothing contained herein
shall be construed as a contract of employment or deemed to give any
Participant the right to be retained in the employ of any Employer.
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6.3 Unfunded Plan. In adopting the Plan and entering
into the Trust Fund Agreement, it is the intention of the Company and the
Adopting Employers that any benefits to be provided under the Plan shall be
deemed unfunded for tax and pension law purposes and that any assets acquired
by or held within the Trust shall not be deemed to constitute funding for the
benefit of the Participant, or the Participant's beneficiary or estate.
Consequently, at all times while the Plan is in effect, the Accrued Benefit of
a Participant shall be understood to reflect only a means for the measurement
and determination of the amounts to be paid to the Participant pursuant to the
terms of the Plan, and a Participant's Accrued Benefit shall not constitute or
be treated as a trust fund of any kind, nor shall any assets held under the
Trust be deemed to represent security for the performance of any obligation of
the Company or an Adopting Employer hereunder but shall at all times be, and
remain, their general, unpledged and unrestricted assets.
6.4 Constructive Receipt. In the event that a final
determination shall be made by the Internal Revenue Service or any court of
competent jurisdiction that by reason of elections made or actions taken
hereunder a Participant has recognized gross income for federal, state or local
income tax purposes prior to the actual payment of benefits to such Participant
to which such gross income is attributable, the Committee shall authorize the
payment to the Participant in one lump sum, within 90 days following such final
determination, of an amount equal to such recognized income. Thereafter, the
Participant may be paid any remaining benefits available to the Participant
under the normal terms and conditions hereof, provided, however, that a
Participant who receives a distribution
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pursuant to the immediately preceding sentence of this Section 6.4 shall have
his future benefits reduced in an amount equal to the Actuarial Equivalent of
such distribution in such manner and at such time as the Committee may
determine.
SECTION 7
NONASSIGNABILITY
7.1 No benefit payable hereunder may be assigned,
pledged, mortgaged or hypothecated and, except to the extent required by
applicable law, no such benefit shall be subject to legal process or attachment
for the payment of any claims of a creditor of a Participant or the beneficiary
of such Participant.
SECTION 8
EFFECTIVE DATE; AMENDMENT AND TERMINATION
8.1 Effective Date. This Plan shall be effective as of
January 1, 2002 and shall remain in effect through its termination, subject to
the provisions of Section 8.2 hereof.
8.2 Amendment and Termination. The Board may at
any time, or from time to time, amend this Plan in any respect on a prospective
basis or terminate this Plan without restriction and without the consent of any
Participant or beneficiary, provided that any such amendment or termination
shall not impair the right of any Participant or any beneficiary to be paid
benefits earned and vested hereunder prior to such amendment or termination. In
the event of the termination of the Plan, each Participant shall be deemed to
have attained the Participant's Normal Retirement Date as of the date of such
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termination, and the Participant's Accrued Benefit shall be paid to the
Participant in accordance with the terms of Sections 4 and 5 hereof.
8.3 Plan Sponsor. The Company shall be the sponsor and
named fiduciary of the Plan, which the Company and Adopting Employers have
adopted for the benefit of certain designated highly compensated and key
management personnel.
SECTION 9
CLAIMS PROCEDURES
9.1 Initial Claim. If the Participant or the
Participant's beneficiary (hereinafter referred to as a "Claimant") is denied
all or any portion of an expected benefit under this Plan for any reason, the
Claimant may file a claim with the Committee. The Committee shall notify the
Claimant within 60 days of its allowance or denial of the claim, unless the
Claimant receives written notice from the Committee prior to the end of the
60-day period stating that special circumstances require an extension of the
time for decision for an additional period not to exceed an additional 60 days.
The notice of the Committee's decision shall be in writing, sent by mail to the
Claimant's last known address, and, if a denial of the claim, must contain the
following information:
(a) the specific reasons for denial;
(b) specific reference to pertinent provisions
of the Plan on which the denial is based; and
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(c) if applicable, a description of any
additional information or material necessary to perfect the claim, an
explanation of why such information or material is necessary, and an
explanation of the claims review procedure.
9.2 Review. A Claimant may request a review by the
Committee of any denial of the Claimant's claim by submitting in writing such a
request within 60 days of the mailing of notice of the denial. The Claimant or
the Claimant's representative shall be entitled to review all pertinent
documents, and to submit issues and comments in writing. Absent a request for
review within such 60-day period, the claim shall be deemed to be conclusively
denied.
SECTION 10
MISCELLANEOUS
10.1 Payment to Representatives. If an individual
entitled to receive any benefits hereunder is determined by the Committee or is
otherwise adjudged to be legally incompetent, they shall be paid to such
individual's duly appointed and acting guardian, if any, and if no such
guardian is appointed and acting, to such persons as the Committee may
designate for the benefit of such individual. Such payment shall, to the extent
made, be deemed a complete discharge for such payments under the Plan.
10.2 Timing of Payments. If the Committee is unable to
make the determinations required under the Plan in sufficient time for payments
to be made when due, the Committee shall make such payments upon the completion
of such determinations with interest at a reasonable rate from such due date
and may, at its option, make
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provisional payments, subject to adjustment, pending the completion of such
determinations.
10.3 Withholding, etc. The Employer shall deduct from
each payment under the Plan any Federal, state or local withholding or other
taxes or charges which an Employer would be required to deduct under applicable
law, and any amount so deducted shall be treated as a payment hereunder to the
Participant or the Participant's beneficiaries.
10.4 Governing Law. The provisions of this Plan shall be
construed according to the laws of the United States and the State of New York,
excluding the provisions of any such laws that would require the application of
the laws of another jurisdiction.
10.5 Gender and Number. The masculine pronoun wherever
used shall include the feminine. Wherever any words are used herein in the
singular, they shall be construed as though they were also used in the plural
in all cases where they shall so apply.
10.6 Binding Effect. This Agreement shall be binding upon
the Company and the Adopting Employers and their successors or assigns.
10.7 Captions. The captions at the head of an article,
section or a paragraph of the Plan are designed for convenience of reference
only and are not to be resorted to for the purposes of interpreting any
provision of the Plan, and in the case of any conflict with the text of the
Plan, the text of the Plan shall control.
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10.8 Severability. The invalidity of any portion of the
Plan shall not invalidate the remainder thereof, which shall continue in full
force and effect.
10.9 Communications. Any election, application, claim,
notice, or other communication required or permitted to be made by a
Participant pursuant to the Plan shall be made in writing and in such form as
the Committee shall prescribe. Such communication or notice shall be effective
upon receipt, if sent by first class mail, postage prepaid, and addressed to
the Committee, c/o the Company's offices at 712 Fifth Avenue, New York, New
York 10019-4108.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed in its name by its duly authorized officers, effective as set forth
above.
VECTOR GROUP LTD.
/s/ Richard J. Lampen
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By: Authorized Signatory
Richard J. Lampen
Executive Vice President
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