Exhibit 10.07
SUPPLEMENTAL BENEFIT PLAN
FOR
KEY EMPLOYEES OF R.P. SCHERER CORPORATION
R.P. SCHERER CORPORATION, a Delaware corporation (the "Corporation"),
established a supplemental benefit plan, effective January 1, 1994, for certain
key management employees to provide benefits supplemental to those provided
under the R.P. Scherer Corporation Employees' Retirement Income Plan (the
"Retirement Plan"), known as the Supplemental Benefit Plan For Key Employees of
R.P. Scherer Corporation effective January 1, 1994.
Section 1. Purpose. The purpose of this Plan is to provide retirement
benefit payments to certain key management employees of the Corporation as
designated by the Committee, and their Beneficiaries, to the extent retirement
benefits are, or will be, reduced by the amendments made to the Retirement Plan
by the Corporation effective January 1, 1994, including amendments required by
applicable laws from the general assets of the Corporation.
Section 2. Definitions. Whenever used herein, the following terms shall
have the following meanings unless the context requires otherwise:
(a) "Beneficiary" means the person or persons designated by a
Participant who is or may be entitled to a benefit hereunder, subject to Section
3.
(b) "Board of Directors" means the Board of Directors of the
Corporation.
(c) "Committee" means the Compensation Committee of the Board of
Directors.
(d) "Corporation" means R.P. Scherer Corporation and R.P. Scherer.
International Corporation; provided, however, that whenever this Plan indicates
that the "Corporation" may or shall take any action under the Plan, such action
shall be taken by R.P. Scherer Corporation for itself and as agent for R.P.
Scherer International Corporation.
(e) "Participant" means any key management employee who is
designated to be a Participant in the Plan in accordance with Section 3.
(f) "Plan" means the Supplemental Benefit Plan For Key Employees of
R.P. Scherer Corporation, as described herein or hereafter amended.
(g) "Retirement Plan" means the R.P. Scherer Corporation Employees'
Retirement Income Plan, as from time to time amended.
Section 3. Eligibility. Eligibility for participation shall be limited to
those key management employees who, in the sole discretion of the Committee, are
designated by the Committee; provided however, that benefits under this Plan
shall be payable to a Participant who qualifies for a benefit under the
Retirement Plan upon Normal Retirement, Early Retirement, Disability Retirement
or termination of employment, and to his Spouse or designated Beneficiary if
such Spouse or designated Beneficiary is paid a survivor benefit under the
Retirement Plan, but only provided such Participant attains Normal Retirement
Age as defined in the Retirement Plan while an employee of the Corporation or
upon a final determination by the Committee at retirement or termination, and in
its sole discretion, entitling a Participant and his Spouse to such benefits. In
no event shall any benefits be payable under this Plan under any other
circumstances. If the Committee designates a key management employee to be a
Participant at any time other than effective as of January 1, 1994, then such
Participant shall be deemed to be a Participant in this Plan only as of the date
designated by the Committee.
Section 4. Administration of the Plan. The Plan shall be administered by
the Committee which shall have full and exclusive power to interpret the Plan,
to determine the amount and manner of any payments and to adopt such rules and
regulations as are necessary for its administration. A member of the Committee
who is a Participant shall not vote on any question relating specifically to
himself; and, in the event the remaining members of the Committee are unable to
come to a determination of any question, the same shall be determined by the
Board of Directors. The decisions of the Committee shall be final and conclusive
on all persons and the Committee shall not be subject to liability thereon. The
Committee may delegate specific responsibilities it assumes under this Plan
which are administrative or ministerial in nature by notifying a delegate as to
the duties and responsibilities delegated.
Section 5. Benefits.
(a) Benefits are payable, provided such Participant attains Normal
Retirement Age as defined in the Retirement Plan while an Employee of the
Corporation or there has been a determination by the Committee in its sole
discretion pursuant to Section 3, upon commencement of retirement benefits
under the Retirement Plan, and shall be equal to the excess, if any, of:
(1) The amount of benefit which would be payable to or on
behalf of such Participant under the Retirement Plan computed under
the provisions of the Retirement Plan, taking into account the
amendments to the Retirement Plan effective January 1, 1994, and all
subsequent amendments but computed as if:
(A) The limitations contained in Section 415 of the
Internal Revenue Code of 1986, as amended from time to time
(the "Code") were inapplicable; and
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(B) The limitation of "$150,000, multiplied by the
Adjustment Factor" (as defined in the Retirement Plan) on the
amount of Compensation to be taken into account for all
Retirement Plan purposes in any Plan Year was inapplicable
and, instead, the limitation in effect under the Retirement
Plan on the amount of Compensation to be taken into account is
$242,286 for the 1994 Plan Year, adjusted each Plan Year
thereafter by the lesser of (i) the percentage increase in the
Consumer Price Index for All Urban Consumers as published by
the U.S. Department of Labor (CPI-U) from January of the Prior
Plan Year to January of the Present Plan Year or (ii) 4%;
provided, however, that the limitation on Compensation taken
into account shall not be decreased from year to year;
over
(2) The amount payable to or on behalf of such Participant
under said Retirement Plan computed under the provisions of said
Retirement Plan, taking into account the amendments to the
Retirement Plan effective January 1, 1994, and all subsequent
amendments.
(b) Benefits payable under this Plan shall be payable to a Participant in
the same manner and subject to all the same options, conditions, privileges and
restrictions as are applicable to the benefits payable to the Participant and to
his Spouse or designated Beneficiary if such Spouse or designated Beneficiary is
paid a benefit under the Retirement Plan, and taking into consideration any
adjustment in benefits payable to the Participant under the Retirement Plan by
reason of any modification in the application of the Section 5(a)(1)(A)
limitations due to the form of benefit elected by the Participant. The amounts
determined by Section 5(a), as so adjusted, shall be converted to the form of
benefit elected based upon the same actuarially equivalent factors as used under
the Retirement Plan.
(c) Benefits Upon Termination of Participation. If a Participant ceases to
be a Participant in the Retirement Plan, he shall immediately cease to be a
Participant in this Plan. Thereafter, subject to Section 3 and Section 5, the
amounts determined under Section 5(a)(1)(A), 5(a)(1)(B) and 5(a)(2) of this Plan
shall continue to be adjusted from time to time in accordance with applicable
law and the terms of the Retirement Plan, respectively.
(d) Benefits Unfunded. The undertakings of the Corporation herein
constitute merely the unsecured promise of the Corporation. The benefits under
this Plan shall be paid by the Corporation out of its general assets and shall
not be funded in any manner. If the Corporation shall acquire any assets in
connection with the liabilities assumed by it hereunder, it is expressly
understood and agreed that no Participant or Beneficiary of the Participant
shall have any right with respect to, or claim against, such assets. Such assets
shall not be held in any way
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as collateral security for fulfilling the obligations of the Corporation under
this Agreement, and shall be subject to the claims of creditors of the
Corporation.
(e) Allocation of Payments. R.P. Scherer Corporation shall,
after consultation with its actuary, determine the actuarial method
and assumptions to be used in determining the amount to be paid by
R.P. Scherer International Corporation and R.P. Scherer Corporation
and when such amounts shall be paid.
Section 6. Rights of Participants. The Plan shall not in any manner be
liable for or subject to or for the debts of any Participant or Beneficiary. No
right or benefit at any time under the Plan shall be subject in any manner to
alienation, sale, transfer, assignment, pledge or encumbrance of any kind. If a
Participant or beneficiary shall attempt to or shall alienate, sell, transfer,
assign, pledge or otherwise encumber his rights or benefits under the Plan or
any part thereof or if by reason of his bankruptcy or other event such benefits
would otherwise be received by anyone else or would not be enjoyed by him, the
Committee in its discretion may terminate his interest in any such benefit and
hold or apply such benefit to or for the benefit of such person, his spouse,
children or other dependents, or any of them as the Committee shall determine.
Neither the establishment of this Plan nor any provisions of the Plan or
modifications thereof shall be held or construed as giving any Participant in
the Plan the right to be retained in the service of the Corporation and the
Corporation expressly reserves its right to discharge any such Participant
whenever the interests of the Corporation may so require.
Section 7. Representations and Warranties. No Employee shall at any time
have a right to be selected to be a Participant in the Plan, and no person shall
have any authority to enter into any agreement assuring such selection or making
any warranty or representation with respect thereto.
Section 8. Indemnification. To the extent permitted by applicable law, the
Corporation shall indemnify any person who was or is a party to or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative by reason
of the fact that he is or was a member of the Committee, against any and all
losses, costs, expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Corporation or its shareholders, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation or its shareholders and, with respect to any
criminal action or proceeding, had reasonable cause to believe his conduct was
unlawful. This right of indemnification shall not be deemed
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exclusive of any other rights to which any Committee member may be entitled as a
matter of law or otherwise, to the extent permitted by law.
Section 9. Amendment. The Board of Directors shall have the power to amend
the Plan or to terminate the Plan at any time; provided, however, that such
power shall not affect the obligation of the Corporation to pay the benefits
accrued under the Plan to the extent they have been accrued as of the date of
any such amendment or termination.
Section 10. Governing Law. This Plan and all determinations made and
actions taken pursuant thereto shall be governed by the laws of the State of
Michigan, where it is made and where it shall be enforced. Any amendment to this
Plan shall be valid only if made in the State of Michigan.
IN WITNESS WHEREOF, the Corporation has adopted this Plan, which amends
and supersedes any and all prior versions of the Plan, this 16th day of
December, 1994, effective as of January 1, 1994.
ATTEST: R.P. SCHERER CORPORATION
/s/ Nicole S. Williams By: /s/ Aleksandar Erdeljan
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Secretary Its: President
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