National Dentex Corporation
Supplemental Executive Retirement Plan VI
-----------------------------------------
This Plan is effective as of the eleventh (11th) day of August 2006, and is
established by National Dentex Corporation, organized and existing under the
laws of the Commonwealth of Massachusetts (hereinafter referred to as the
"Company"), and is binding upon the Company and any person who is designated by
the Committee (as defined below) as being eligible to become a Participant (as
defined below) hereunder and has elected to do so by executing a Participation
Agreement (as defined below).
WITNESSETH THAT, the Board of Directors of the Company has determined
that:
WHEREAS, such Participant is employed by the Company as a senior
executive officer of the Company; and
WHEREAS, such Participant has performed his duties in a capable and
efficient manner, resulting in the growth and progress of the Company; and
WHEREAS, as a result of the experience of such Participant, assurance
of his continued service, beyond the customary age for retirement from service
with the Company, is desirable to the Company; and
WHEREAS, the Company's existing retirement and death benefits available
to such Participant would not adequately and equitably compensate such
Participant for his contributions to the Company, and the Board of Directors
desires to supplement such benefits as provided herein.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements hereinafter contained, and other good and valuable consideration,
the receipt of which is hereby acknowledged, the Company hereby establishes the
National Dentex Corporation Supplemental Executive Retirement Plan VI as
follows:
ARTICLE I
Definitions
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(1) Defined Terms. As used in this Plan, unless the context clearly indicates to
the contrary, the following terms shall have the respective meanings ascribed to
them in this Article I:
"Beneficiary" shall mean any person, trust, partnership, limited
liability company, corporation or other combination of these, last designated in
writing by a Participant to receive benefits provided under Article II of this
Plan in the event of the Participant's death, as provided in Article II, Section
(3). Such designation shall be filed with the Company and shall be revocable at
any time through written instruments similarly filed without consent of any
"Beneficiary." In the absence of any such designation, the payments to be made
under Article II, Section (3) shall be delivered by the Company to the
executor(s) or administrator(s) of the Participant's estate.
"Board of Directors" shall mean the Board of Directors of the Company.
"Cause" is defined in Article VII of this Plan.
"Change of Control" is defined in Article III, Section (3) of this
Plan.
"Committee" shall mean the Compensation Committee of the Board of
Directors.
"Company" shall mean National Dentex Corporation.
"Participant" shall mean any person designated as eligible by the
Committee who elects to participate in the Plan through execution of a
Participation Agreement.
"Participation Agreement" shall mean the form of written agreement,
attached hereto as Schedule A, which is entered into by and between the Company
and a Participant as a condition to participation in the Plan.
"Payout Trigger Date" shall mean the date of a Participant's 75th
birthday, regardless of whether or not the Participant is then rendering Service
to the Company as an employee, officer, director, consultant or otherwise.
"Plan" shall mean and include this Supplemental Executive Retirement
Plan VI and attached Schedule A.
"Retirement" shall mean the date on which a Participant who has
attained the age of at least sixty-five (65) ceases to provide Service to the
Company as an employee.
"Retirement Benefit" shall mean the monthly benefit a Participant
receives following the Payout Trigger Date, as provided in Article II, Section
(1).
"Service" shall mean work performed by the Participant for the Company,
whether as an employee, officer, director, consultant or otherwise, for any
period beginning on or after January 1, 2007.
(2) Rules of Construction. As used herein, the masculine gender shall be
deemed to include the feminine gender, and the singular shall include the
plural, unless the context clearly indicates to the contrary.
ARTICLE II
Retirement Benefit
------------------
(1) Payout Upon Attaining Age 75. Beginning with the first full calendar
month following the Payout Trigger Date, the Company shall pay to the
Participant 120 equal monthly installments, each in an amount equal to the
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"Monthly Retirement Benefit" set forth in such Participant's Participation
Agreement. The monthly payment provided for by this Section (1), subject to and
as may be adjusted for vesting as provided in Section (2) below, may hereinafter
be referred to as the "Retirement Benefit".
(2) Vesting. The Participant's entitlement to the full amount of the
Retirement Benefit shall vest over a period of years as set forth in the
Participation Agreement and this Section (2). The Participation Agreement sets
forth a vesting schedule applicable to the Participant. In the event the
Participant shall cease rendering Service to the Company prior to the Retirement
Benefit becoming 100% vested, the monthly Retirement Benefit payable beginning
after the Payout Trigger Date shall be reduced to the percentage that shall have
become vested prior to such cessation of Service in accordance with the schedule
provided in the Participation Agreement.
(3) Death of Participant.
(i) In the event of the death of the Participant on or following the
Payout Trigger Date, the Company shall continue to pay to the Participant's
Beneficiary the Monthly Retirement Benefit as and when provided for in Section
(1) above.
(ii) In the event of the death of the Participant prior to the Payout
Trigger Date but following the full vesting of the Monthly Retirement Benefit as
provided in Section (2), the Company shall pay to the Participant's Beneficiary
the Monthly Retirement Benefit as and when provided for in Section (1) above,
beginning after the Payout Trigger Date.
(iii) In the event of the death of the Participant prior to the full
vesting of the Retirement Benefit as provided in Section (2), then such Section
(2) shall be operative, and the Company shall pay the Participant's Beneficiary
the reduced monthly Retirement Benefit that would have been payable to the
Participant thereunder, paid as and when provided for in Section (1), beginning
after the Payout Trigger Date.
(4) Cooperation by Participant. The Company may, at its own discretion,
utilize one or more life insurance policies or any other investment vehicle or
other means of meeting its obligations under this Plan. Each Participant shall
cooperate with the Company by furnishing any and all information requested by
the Company in order to facilitate the payment of benefits hereunder, taking
such physical examination as the Company may deem necessary and taking such
other relevant action as may be reasonably requested by the Company. If a
Participant refuses to cooperate, the Company shall have no further obligation
to the Participant under the Plan.
(5) Unfunded Obligation. For purposes of this Plan, regardless of any
actions that may be taken by the Company pursuant to Section (4) above or
otherwise, a Participant or his Beneficiary shall have solely the rights of an
unsecured general creditor of the Company to payment of any amounts and benefits
including but not limited to the Retirement Benefit hereunder.
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ARTICLE III
Change of Control
-----------------
(1) Acceleration of Vesting Upon Change of Control. If a Change of Control
of the Company (as defined in Section (3) below) occurs prior to the vesting in
full of the Retirement Benefit under Article II, Section (2), and the
Participant is rendering Service to the Company immediately prior to the date of
such Change of Control, then notwithstanding any change in the Participant's
Service status that may occur in connection with, upon or subsequent to such
Change of Control, the Retirement Benefit provided in Article II, Section (1)
shall be deemed to be vested in full, notwithstanding the provisions of Article
II, Section (2), as of the date of such Change of Control. Such benefits shall
be payable, as and when provided for in Article II, Section (1), beginning after
the Payout Trigger Date, upon the terms and on the monthly schedule provided
therein.
(2) Obligations of Successor Entity. In furtherance and not in limitation
of Section (1) above and Article XVIII below, the Company agrees that it will
not permit to occur any Change of Control (to the extent within the Company's
control), nor merge or consolidate with any other corporation or organization,
nor sell substantially all of its assets to, or permit its business activities
to be taken over by, another corporation or organization, unless and until the
succeeding or continuing corporation or other organization shall expressly
assume the rights and obligations of the Company herein set forth and as amended
from time to time. The Company further agrees that it will not cease business
activities, dissolve, liquidate or terminate its existence, other than as
heretofore set forth in this Article III, without having made adequate provision
for the fulfilling of its obligations hereunder.
(3) Definition of Change of Control. As used in this Plan, the term "Change
of Control" shall mean either a change in ownership, change in effective
control, or change in a substantial portion of the Company's assets, as follows:
(i) Change in Ownership. A change in ownership occurs if a person,
or multiple persons acting as a group, acquires more than 50% of the capital
stock of the Company, measured by voting power or value.
(ii) Change in Effective Control. A change in effective control
occurs if either:
(a) A person (or group of persons) acquires 35% of the capital
stock of the Company measured by voting power over a
12-month period; or
(b) A majority of the Board of Directors of the Company is
replaced by directors not endorsed by the prior members of
the board.
(iii) Change in a Substantial Portion of the Company's Assets. A
Change of Control based on the sale of assets occurs if a person (or group of
persons) acquires 40% or more of the gross fair market value of the assets of
the Company over a 12-month period.
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ARTICLE IV
Retirement
----------
The date of the Participant's Retirement shall have no effect on the amount or
timing of the benefits to be payable under this Plan, except to the extent that
Retirement constitutes a cessation of Service for purposes of Article II,
Section (2) above prior to the date the Retirement Benefit shall have vested in
full.
ARTICLE V
Death
-----
In accordance with Article II, Section (3), the death of the Participant shall
have no effect on the amount or timing of the benefits to be payable under this
Plan, except to the extent that, for purposes of Article II, Section (2), the
Participant's Service terminates as a result of his death prior to the date the
Retirement Benefit shall have vested in full.
ARTICLE VI
Disability
----------
In the event that the Participant becomes disabled, on the basis of any standard
established by the Board of Directors, such disability shall have no effect on
the amount or timing of the benefits to be payable under this Plan, except to
the extent that, for purposes of Article II, Section (2), the Participant's
Service terminates as a result of such disability prior to the date the
Retirement Benefit shall have vested in full.
ARTICLE VII
Termination of Service by Company
---------------------------------
If the Company terminates the Service of the Participant, without Cause, prior
to the date the Retirement Benefit shall have vested in full, the Company's
obligation to the Participant shall remain in full force and effect, and the
Retirement Benefit provided in Article II, Section (1) shall be deemed to be
vested in full, notwithstanding the provisions of Article II, Section (2), as of
the date of termination. In such case, the Company shall pay the Participant or
his Beneficiary the full monthly Retirement Benefit as and when provided for in
Article II, Section (1), beginning after the Payout Trigger Date. As used
herein, the term "Cause" shall mean that the Board of Directors has determined
that any one or more of the following has occurred:
(i) the Participant shall have been convicted of, or shall have
pleaded guilty or nolo contendere to, any felony (other than a conviction
arising solely under a statutory provision imposing criminal liability on the
Participant on a per se basis due to the position held by the Participant, so
long as any act or omission of the Participant with respect to such matter was
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not taken or omitted in contravention of any applicable policy or directive of
the Board of Directors);
(ii) the Participant shall have failed or refused to perform the duties
and obligations of the Participant's employment or engagement at an acceptable
level (other than as a result of illness or disability), and such failure or
refusal shall have continued for a period of ten (10) days following written
notice from the Board of Directors, it being understood that the Company's
failure to achieve its business plan or projections shall not itself be
considered such a failure or refusal;
(iii) the Participant shall have refused to follow the lawful
directions of the Board of Directors, and such refusal shall have continued for
a period of ten (10) days following written notice from the Board of Directors;
(iv) the Participant shall have breached any provision of any
employment, non-solicitation, non-competition or non-disclosure agreement with
the Company; or
(v) the Participant shall have committed any fraud, embezzlement,
misappropriation of funds, breach of fiduciary duty or other act of dishonesty
or disloyalty against the Company.
ARTICLE VIII
Continuation of Medical and Dental Benefits
-------------------------------------------
From the effective date of this Plan as provided in Article XIX, for the
remainder of their lives without regard to the Participant's employment status,
and regardless of any Change of Control of the Company, the Participant and his
spouse and, following the Participant's death, the surviving spouse of the
Participant, shall be entitled to participation in and coverage under the
Company's medical and dental insurance plans and programs as may be applicable
to senior executives of the Company (or its successor entity) and their families
from time to time, in accordance with the terms of such plans and programs,
including any required co-payment or employee contribution; provided, however,
that in the event that the Participant or his spouse or surviving spouse shall
no longer be eligible under such plans or programs, the Company shall
nonetheless be obligated, and hereby agrees, to provide substantially equivalent
coverage at the Company's expense, less the amount of any required co-payment or
employee contribution that would have been applicable under such plans, and
supplemental to any other coverage, such as Medicare, that is obtained. The
provisions of this Article VIII shall be independent of, and shall not be
affected by, the provisions regarding the amount or timing of the payment of the
Retirement Benefit provided under Article II of this Plan.
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ARTICLE IX
Assignment
----------
It is agreed that, except for the provisions of this Plan providing for the
designation of, and payment to, any Beneficiary, neither the Participant nor his
spouse nor any Beneficiary shall have any right to sell, assign, transfer or
otherwise convey the right to receive any payments or benefits hereunder, which
payments and rights thereto are expressly declared to be nonassignable and
nontransferable.
ARTICLE X
Retention of Services
---------------------
The benefits payable under this Plan shall be independent of, and in addition
to, any other arrangement that may exist from time to time between the parties
hereto, or any other compensation payable by the Company to the Participant.
This Plan shall not be deemed to constitute an employment contract between the
parties hereto, nor shall any provision hereof restrict the right of the Company
to terminate the Service of the Participant, or restrict the right of the
Participant to terminate his Service to the Company.
ARTICLE XI
Rights of Participant
---------------------
The rights of the Participant under this Plan and of any Beneficiary of the
Participant shall be solely those of an unsecured creditor of the Company. Any
insurance contract or any other asset acquired or held by the Company in
connection with the liabilities assumed by it hereunder shall not be deemed to
be held under any trust for the benefit of the Participant or his Beneficiary or
to constitute security for the performance of the obligations of the Company,
but shall be, and remain, a general, unpledged, unrestricted asset of the
Company.
ARTICLE XII
Ownership of Insurance Contracts
--------------------------------
The Company shall be the sole owner of any insurance contract or contracts
acquired on the life of a Participant, with incidents of ownership therein,
including, but not limited to, the right to cash and loan values, dividends, if
any, death benefits, and the right to termination thereof.
ARTICLE XIII
Amendments
----------
This Plan may be revoked or be amended in whole or in part by a written
amendment, supplement or agreement signed by the Company and by each Participant
to be bound by the same, and, solely as to such Participants, this Plan shall be
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deemed to be so revoked or amended. Following the death of the Participant, his
Beneficiary shall be entitled to act in his stead in respect of any such
revocation or amendment.
ARTICLE XIV
Applicable Law
--------------
This Plan shall be construed and governed in all respects under and by the
substantive laws of the Commonwealth of Massachusetts, without regard to choice
of law principles.
ARTICLE XV
Headings
--------
Headings and subheadings in this Plan are inserted for convenience and reference
only and constitute no part of this Plan.
ARTICLE XVI
Counterparts
------------
This Plan may be executed in an original and any number of counterparts, each of
which shall constitute an original of one and the same instrument.
ARTICLE XVII
Disputes
--------
In the event of any dispute under this Plan, the Company and Participant shall
submit the matter to binding arbitration to be conducted by a single arbitrator
under the rules of the American Arbitration Association in Boston,
Massachusetts. The Participant shall be entitled to recover from the Company his
reasonable legal and other fees, costs and expenses incurred in enforcing his
rights under this Plan.
ARTICLE XVIII
Binding Effect
--------------
The provisions of this Plan shall be binding upon the parties and their
respective successors and assigns. If any provisions herein are deemed invalid
or unenforceable, the remaining provisions shall remain in full force and
effect.
ARTICLE XIX
Effective Date
--------------
The effective date of this Plan shall be August 11, 2006.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the Company has caused this Supplemental Executive
Retirement Plan VI to be signed in its corporate name by its duly authorized
officer.
NATIONAL DENTEX CORPORATION
By: /s/ RICHARD F. BECKER, JR.
--------------------------
Name: Richard F. Becker, Jr.
Title: Executive Vice President, Treasurer, and
Chief Financial Officer
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SCHEDULE A
National Dentex Corporation
Supplemental Executive Retirement Plan VI
-----------------------------------------
PARTICIPATION AGREEMENT
-----------------------
Part I - Participant Information
David L. Brown
- ------------------------------------------- --------------------------
First Name, Middle Initial, Last Name Social Security #
- -------------------------------------------
Street Address
- -------------------------------- ---------- ------------
City State Zip Code
/ / / / ( ) -
- ----- ----- ----- ----- ------ ------ ---- ----- --------
Date of Birth Date of Hire Telephone Number
Part II - Selection of Beneficiary
Your beneficiary(ies) would receive payments of the Retirement Benefit under
this Plan in the event of your death. If you have more than one primary
beneficiary, payments of the Retirement Benefit under the Plan will be divided
as you specify below. In the event a primary beneficiary does not survive you,
such payments will be divided among your contingent beneficiary(ies). The total
of both primary and contingent beneficiary(ies) must equal 100%. If you wish to
add more than one beneficiary, please utilize the space provided in Part III
below.
PRIMARY BENEFICIARY CONTINGENT BENEFICIARY
- ---------------------------- --------------------------------
Name Name
- ---------------------------- ---------------------------------
Street Address Street Address
- --------------- -------- -------- --------------- -------- --------
City State Zip Code City State Zip Code
- ----------------- ----------- ----------------- -----------
Social Security # % of Assets Social Security # % of Assets
- ------------------------------- -------------------------------
Relationship Relationship
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Part III - Additional Beneficiaries
If you wish to name additional beneficiaries, please provide the information
requested in Part II above for each. Attach additional sheets as necessary.
ADDITIONAL ADDITIONAL
PRIMARY BENEFICIARIES: CONTINGENT BENEFICIARIES:
Part IV - Exhibit 1 Incorporated
The provisions of the attached Exhibit 1, setting forth the applicable
Retirement Benefit and vesting schedule, among other things, are hereby
incorporated by reference into this Participation Agreement as though set forth
in full herein.
Part V - Authorization by Participant
I have read and I understand the National Dentex Corporation Supplemental
Executive Retirement Plan VI and by execution of this Participation Agreement
elect to participate in such Plan.
================================================================================
/s/ David L. Brown August 11, 2006
- ------------------------------------------- --------------------------
Participant's Signature Date
================================================================================
Part VI - Company Acknowledgment
By the signature of its duly authorized officer below, National Dentex
Corporation hereby acknowledges, accepts and agrees to the provisions of this
Participation Agreement and its attached Exhibit 1.
NATIONAL DENTEX CORPORATION
By: /s/ RICHARD F. BECKER, JR.
--------------------------
Name: Richard F. Becker, Jr.
Title: Executive Vice President, Treasurer, and
Chief Financial Officer
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EXHIBIT 1 TO PARTICIPATION AGREEMENT
National Dentex Corporation
Supplemental Executive Retirement Plan VI
-----------------------------------------
Benefits Provided:
Vesting Schedule
Participant Date of Birth Retirement Benefit* ----------------
- ----------- ------------- -------------------
Monthly Annual Date Percentage
------- ------ ---- ----------
David L. Brown 1/22/1941 $10,417 $125,000 As of January 22, 2007 20%
As of January 22, 2008 40%
As of January 22, 2009 60%
As of January 22, 2010 80%
As of January 22, 2011 100%
*Assuming full vesting.
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