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EXHIBIT 10.59
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MICHAEL ANTHONY JEWELERS, INC.
DEFERRED COMPENSATION PLAN
FOREWORD
Effective as of March 4, 1996, Michael Anthony Jewelers, Inc. adopted the
Michael Anthony Jewelers, Inc. Deferred Compensation Plan to promote the
interest of Michael Anthony Jewelers, Inc. and its affiliates by permitting
Participants (as defined herein) to defer all or a portion of their
compensation.
SECTION 1
DEFINITIONS
As used herein, the following terms shall have the following respective
meanings, unless a different meaning is required by the context:
1.1 "APPROPRIATE FORM" means the written form provided or prescribed by
the Trustees for the particular purpose.
1.2 "BOARD OF DIRECTORS" means the Board of Directors of Michael Anthony
Jewelers, Inc.
1.3 "COMPANY" means Michael Anthony Jewelers, Inc. and any successor by
merger, purchase, reorganization or otherwise. If the Board of
Directors extends the Plan to any subsidiary or affiliate, that
subsidiary or affiliate shall be deemed the Company with respect to
its employees.
1.4 "COMPENSATION" means the total current and deferred cash compensation,
in the form of salary, bonus, and/or commissions payable by the
Company to a Participant.
1.5 "DEFERRAL AGREEMENT" means the Compensation deferral agreement between
the Participant and the Company on the Appropriate Form and which
shall comply with and be subject to the provisions of the Plan.
Deferral Agreements may be executed for the Company by its Chief
Executive Officer, Chief Operating Officer, or Chief Financial
Officer. In any conflict between the terms of the Plan and the
Deferral Agreements, the Plan shall control.
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1.6 "DEFERRED COMPENSATION ACCOUNT" means the account established for the
benefit of the Participant pursuant to Section 3 of the Plan.
1.7 "EFFECTIVE DATE" means March 4, 1996.
1.8 "PARTICIPANT" means an employee who is eligible to participate in the
Plan as provided in Section 2 hereof or a former employee whose
Deferred Compensation Account has not been fully distributed.
1.9 "PLAN" means the Michael Anthony Jewelers, Inc. Deferred Compensation
Plan as herein set forth, or as it may be amended from time to time.
1.10 "TRUSTEES" means the individuals then serving as Trustees under the
Trust Agreement for Michael Anthony Jewelers, Inc. Deferred
Compensation Plan.
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SECTION 2
ELIGIBILITY AND PARTICIPATION
2.1 ELIGIBILITY FOR PARTICIPATION
Upon designation by the President or Chief Executive Officer of the
Company, employees so designated may become Participants by completing
and submitting the Appropriate Form by the appropriate deadline.
The names of employees eligible to become Participants shall be set
forth in an Appendix to the Plan.
2.2 CONTINUATION OF PARTICIPATION
An employee who has become a Participant shall continue as a
Participant as long as he or she continues to be designated as
eligible and while the Plan is in effect, and thereafter as long as he
or she is entitled to benefits under the Plan.
2.3 APPROPRIATE FORM
Participation in the Plan shall be evidenced by a Deferral Agreement
between the Participant and the Company.
2.4 CONTENTS AND EFFECT OF APPROPRIATE FORM
In order to become a Participant, each employee shall complete the
Appropriate Form and:
(a) agree to the terms of the Plan;
(b) designate a beneficiary on the Appropriate Form;
(c) specify the amount or percentage of his or her otherwise
payable Compensation to be deferred in accordance with
Section 3;
(d) specify the investment of his or her
Deferred Compensation Account; and
(e) elect payment under Section 4.2.
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SECTION 3
DEFERRAL OF COMPENSATION
3.1 IN GENERAL
As of the Effective Date, the Company may commence to compensate each
Participant for his or her services as an employee in the form of both
current and deferred cash Compensation. The amount of the
Participant's combined current and deferred cash Compensation may be
adjusted from time to time by agreement of the Participant and the
Company without altering the terms of his or her Deferral Agreement;
however, the amount or percentages of such Compensation which shall be
paid currently and deferred shall be controlled by the terms of the
Deferral Agreement and shall be subject to the approval of the
Company.
3.2 DEFERRALS
(a) Prior to the Effective Date, the Participant shall elect the
amount or percentage, if any, of his or her Compensation to be
earned during the balance of 1996 which shall be deferred.
(b) Prior to the first day of each calendar year after 1996 during
which the Deferral Agreement is in effect, the Participant
shall elect the amount or percentage, if any, of his or her
Compensation to be earned (or, with respect to bonuses, to be
paid) during such succeeding calendar year which shall be
deferred.
(c) Any election executed prior to the Participant's commencement
of employment as an employee shall be effective as of such
commencement date. Upon being designated as eligible to
become a Participant, an employee shall be given 30 days to
make a deferral election with respect to Compensation to be
earned during his or her first year of Plan participation.
(d) Notwithstanding the preceding provisions of this Section 3.2,
the deferral percentage or amount in effect for the preceding
calendar year shall remain in effect with respect to any
calendar year for which no prior election has been filed.
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3.3 DEFERRED COMPENSATION ACCOUNTS
The deferred portion of a Participant's Compensation will not be paid
by the Company as it is earned by or becomes payable to the
Participant. Instead, the Company shall, pursuant to Section 3.4,
credit to such Participant's Deferred Compensation Account the amounts
of deferred Compensation as such amounts are earned or become payable,
and such deferred Compensation shall be paid in accordance with the
previous election of the Participant, under the provisions of Section
4.
3.4 "GRANTOR TRUST"
(a) The Company shall establish a "grantor trust" within the
meaning of Sections 671 through 679 of the Code) to satisfy its
obligations under Section 3.3.
(b) Each Deferred Compensation Account established pursuant to
Section 3.3 above shall be invested in such mutual fund(s) as
are designated by the Participant (from among a selection of
mutual funds made available by the Trustees from time to
time).
(c) Benefits under the Plan will be paid from the general assets
of the Company. The "grantor trust" established by the
Company shall not under any circumstances be deemed to be an
asset of this Plan but, at all times, shall remain a part of
the general assets of the Company, subject to claims of the
Company's creditors. Neither a Participant nor his or her
beneficiary shall have any interest in any specific asset of
the Company as a result of the Plan.
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SECTION 4
PAYMENT OF DEFERRALS
4.1 PAYMENT OF DEFERRALS
All amounts contributed to the Participant's Deferred Compensation
Account shall be payable to the Participant (or, upon his death, to
his beneficiary under such Deferred Compensation Account) upon the
earliest to occur of the following:
(a) The Participant's termination of employment due to retirement,
death or any other reason; or
(b) Pursuant to the Participant's election, January 1st of the
third full calendar year beginning after the calendar year of
the deferral (e.g., after a deferral of two full calendar
years for years after the first year).
4.2 SUBSEQUENT DEFERRAL
At the end of each two year deferral period, amounts previously
deferred by a Participant shall automatically be re-deferred for an
additional two year deferral period unless the Participant elects on
the Appropriate Form to receive the deferred amounts as a lump sum.
This election must be made prior to January 1st of the calendar year
prior to the time they would be re-deferred under the prior sentence.
There is no limit on how many times previous deferrals may be
re-deferred.
4.3 FORM OF PAYMENT
(a) All distributions pursuant to Section 4 to or on behalf of a
Participant shall be paid in a lump sum in cash as soon as
administratively possible after the date as of which the
distribution is payable.
(b) If a Participant dies before receiving payment of any amounts
credited to his or her Deferred Compensation Account, the
unpaid balance will be paid to his or her designated
beneficiary. If both the Participant and his or her
designated beneficiary die before such payment, the total
amount standing to his or her credit in the Deferred
Compensation Account shall be determined as of the date of the
death of the designated beneficiary and shall be paid as
promptly as possible in one lump sum to the estate of such
designated beneficiary.
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If no such beneficiary has been designated, or if no
designated beneficiary survives the Participant, the total
amount standing to his or her credit in the Deferred
Compensation Account shall be determined as of the date of the
Participant's death and shall be paid as promptly as possible
in one lump sum to the Participant's estate.
4.4 SPECIAL RULES UPON FINANCIAL HARDSHIP
(a) Subject to the approval of the Trustees, a Participant who has
incurred a "Financial Hardship" (as described below) may:
(i) Reduce the amount or percentage, if any, of his or
her Compensation to be earned during the current
calendar year which shall be deferred; and/or
(ii) Request distribution of an amount not in excess of
the sum of the amounts credited to the Deferred
Compensation Account to the extent that such
distribution is necessary to meet the Financial
Hardship.
(b) A "Financial Hardship" will be deemed to occur upon the
demonstration by the Participant that the funds are necessary
because of:
(i) Medical expenses described in Code Section 213(d)
previously incurred by the Participant, the
Participant's spouse, or any dependents of the
Participant (as defined in Code Section 152) or
necessary for those persons to receive medical care
as described in Code section 213(d);
(ii) The purchase (excluding mortgage payments) of a
principal residence for the Participant;
(iii) Payment of tuition and related fees and room and
board for the next 12 months for post-secondary
education for the Participant, his or her spouse,
children, or dependents;
(iv) The need to prevent the eviction of the Participant
from his or her principal residence or foreclosure on
the mortgage of the Participant's principal
residence; or
(v) Such other Financial Hardship as may be determined by
the Trustees.
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SECTION 5
MISCELLANEOUS
5.1 PARTICIPANTS 100% VESTED - UNFUNDED PLAN
Each Participant shall have a 100% nonforfeitable right to receive
payments from the Company under the Deferral Agreement, such payments
to be contributed or credited to his or her designated Deferred
Compensation Account.
Nothing contained in the Plan or Deferral Agreement and no action
taken pursuant to the provisions of the Plan or Deferral Agreement
shall create or be construed to create a "funded plan" for purposes of
the Employee Retirement Income Security Act of 1974.
Any Compensation deferred under the provisions of the Deferral
Agreement (and any earnings thereon) shall continue for all purposes
to be a part of the general funds of the Company, subject to the
claims of creditors. To the extent that any person acquires a right
to receive payments from the Company under the Deferral Agreement,
such right shall be no greater than the right of any unsecured general
creditor of the Company.
5.2 RESTRICTION AGAINST ASSIGNMENT
It is a condition of the Plan, and all rights of each Participant and
beneficiary shall be subject thereto, that no right or interest of any
Participant or beneficiary in the Plan and no benefit payable under
the Plan shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, or charge, and any
action by way of anticipating, alienating, selling, transferring,
assigning, pledging, encumbering, or charging the same shall be void
and of no effect; nor shall any such right, interest or benefit be in
any manner liable for or subject to the debts, contracts, liabilities,
engagements, or torts of the person entitled to such right, interest
or benefit, except as specifically provided in this Plan.
5.3 NO EMPLOYMENT RIGHTS
The establishment of the Plan shall not be construed as conferring any
rights upon any employee for employment or continuation of employment,
nor shall it be construed as limiting in any way the right of the
Company to discharge any employee or to treat him or her without
regard to the effect which such treatment might have upon him or her
as a Participant under the Plan.
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5.4 DISCHARGE OF PLAN OBLIGATIONS
The determination of the Trustees as to the identity of the proper
payee of any benefit payment and the amount properly payable shall be
conclusive, and payments in accordance with such determination shall
constitute a complete discharge of all obligations of the Company with
respect to such payment under the Plan.
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SECTION 6
ADMINISTRATION OF THE PLAN
6.1 ADMINISTRATION OF THE PLAN
Administration of the Plan shall be the responsibility of the Trustees
except to the extent that authority to act for it has otherwise been
reserved to the Board of Directors.
6.2 RESPONSIBILITY OF TRUSTEES
Subject to Section 6.1, the Trustees shall be responsible for the
administration, operation and interpretation of the Plan. The
Trustees shall establish rules from time to time for the
administration of the Plan. They shall have the exclusive right to
interpret the Plan and to decide any and all matters arising
thereunder or in connection with the administration of the Plan, and
they shall endeavor to act, whether by general rules or by particular
decisions, so as not to discriminate in favor of any person or class
of person. Such decisions, actions and records of the Trustees shall
be conclusive and binding upon it and all persons having or claiming
to have any right or interest in or under the Plan.
The Trustees shall maintain accounts to the extent they deem necessary
or appropriate showing the fiscal transactions of the Plan.
6.3 CLAIMS PROCEDURE
In the event that any Participant or other payee claims to be entitled
to a benefit under the Plan, and the Trustees determine that such
claim should be denied in whole or in part, the Trustees shall, in
writing, notify such claimant within 90 days of receipt of such claim
that his or her claim has been denied, setting forth the specific
reasons for such denial. Such notification shall be written in a
manner reasonably expected to be understood by such Participant or
other payee and shall set forth the pertinent sections of the Plan
relied on, and where appropriate, an explanation of how the claimant
can obtain review of such denial. Within 60 days after receipt of
such notice, such claimant may request, by mailing or delivery of
written notice to the Trustees, a review by the Trustees of the
decision denying the claim. If the claimant fails to request such a
review within such 60 day period, it shall be conclusively determined
for all purposes of this Plan that the denial of such claim by the
Trustees is correct. If such claimant requests a review within such
60 day period, the Participant or other payee shall have 30 days after
filing a request for review to submit additional written
material in support of the claim. Within 60
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days after the later of its receipt of the request for review or the
request to submit additional written material, the Trustees shall
determine whether such denial of the claim was correct and shall
notify such claimant in writing of its determination. If such
determination is favorable to the claimant, it shall be binding and
conclusive. If such determination is adverse to such claimant, it
shall be binding and conclusive unless the claimant notifies the
Trustees within 90 days after the mailing or delivery to him or her by
the Trustees of their determination, that the claimant intends to
institute legal proceedings challenging the determination of the
Trustees, and actually institutes such legal proceedings within 180
days after such mailing or delivery.
6.4 LIMITATION ON LIABILITY
The Trustees shall not be liable for any act or omission on their
part, excepting only their own willful misconduct or gross negligence
or except as otherwise expressly provided by applicable law. To the
extent permitted by law, and not otherwise covered by insurance,
Michael Anthony Jewelers, Inc. shall indemnify and save harmless the
Trustees against any and all claims, demands, suits or proceedings in
connection with the Plan that may be brought by Participants or their
beneficiaries, or by any other person, corporation, entity, government
or agency thereof; provided, however that such indemnification shall
not apply with respect to acts or omissions of willful misconduct or
gross negligence. The Board of Directors at the expense of the
Company, may settle such claim or demand asserted, or suit or
proceedings brought, against the Trustees when such settlement appears
to be in the best interest of the Michael Anthony Jewelers, Inc.
6.5 AGENT FOR SERVICE OF PROCESS
The Trustees or such other person as may from time to time be
designated by the Trustees shall be the agent for service of process
under the Plan.
6.6 DELIVERY OF ELECTIONS TO COMPANY
All elections, designation, requests, notices, instructions and other
communications required or permitted under the Plan from a
Participant, beneficiary or other person to the Company shall be on
the Appropriate Form, shall be mailed by first-class mail or delivered
to such address as shall be specified by the Company, and shall be
deemed to have been given or delivered only upon actual receipt
thereof by the Company at such location.
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6.7 DELIVERY OF NOTICE TO PARTICIPANTS
All notices, statements, reports and other communications required or
permitted under the Plan from the Company to any employee,
Participant, beneficiary or other person, shall be deemed to have been
duly given when delivered to, or when mailed by first-class mail,
postage prepaid, and addressed to such person at this address last
appearing on the records of the Company.
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SECTION 7
AMENDMENT OR TERMINATION OF THE PLAN
7.1 AMENDMENT OF THE PLAN
This Plan may be wholly or partially amended or otherwise modified at
any time by the Board of Directors; provided, however, that no
amendment or modification shall have any retroactive effect so as to
deprive any person of any amounts credited to his or her Deferred
Compensation Account.
7.2 TERMINATION OF THE PLAN
The Plan may be terminated at any time by the Board of Directors;
provided, however, that termination of the Plan shall not have any
retroactive effect so as to deprive any person of his or her Deferred
Compensation Account.
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SECTION 8
CONSTRUCTION OF THE PLAN
8.1 CONSTRUCTION OF THE PLAN
The validity of the Plan or any of the provisions thereof shall be
determined under and shall be construed according to the laws of the
State of New York.
8.2 HEADINGS
Headings or titles to sections or paragraphs in this document are for
convenience of reference only and are not part of the Plan for any
other purposes.
IN WITNESS WHEREOF, and as evidence of the adoption of the Plan by the Company,
it has caused the same to be signed by its officer duly authorized, and its
corporate seal to be affixed this 4th day of March, 1996.
ATTEST:
MICHAEL ANTHONY JEWELERS, INC.
By: /s/ Frances Durden By: /s/ FredricWasserspring
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Secretary President
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