Document:

acme_10k123110ex1010.htm

Exhibit 10.10

LOAN AGREEMENT

 

 

Wells Fargo Bank, N.A.

4 Corporate Drive

Shelton, Connecticut  06484

(Hereinafter referred to as the "Bank")

Acme United Corporation

60 Round Hill Road

Fairfield, Connecticut 06824

(Hereinafter referred to as "Borrower")

 

This Loan Agreement ("Agreement") is entered into as of February 18, 2011, by and between Bank and Borrower.

This Agreement amends and restates in its entirety that certain Revolving Loan and Security Agreement by and between Borrower and Bank, as successor in interest by merger to Wachovia Bank, N.A., dated August 2, 2002, and applies to the loan or loans (individually and collectively, the "Loan") evidenced by one or more promissory notes dated of even date herewith or other notes subject hereto, as modified from time to time (whether one or more, the "Note") and all Loan Documents.  The terms "Loan Documents" and "Obligations," as used in this Agreement, are defined in the Note.

Relying upon the covenants, agreements, representations and warranties contained in this Agreement, Bank is willing to extend credit to Borrower upon the terms and subject to the conditions set forth herein, and Bank and Borrower agree as follows:

REPRESENTATIONS.  Borrower represents that from the date of this Agreement and until final payment in full of the Obligations:  Accurate Information.  All information now and hereafter furnished to Bank is and will be true, correct and complete in all material respects.  Any such information relating to Borrower's financial condition will accurately reflect Borrower's financial condition as of the date(s) thereof, (including all contingent liabilities of every type), and Borrower further represents that its financial condition has not changed materially or adversely since the date(s) of such documents.  Authorization; Non-Contravention.  The execution, delivery and performance by Borrower and any guarantor, as applicable, of this Agreement and other Loan Documents to which it is a party are within its power, have been duly authorized as may be required and, if necessary, by making appropriate filings with any governmental agency or unit and are the legal, binding, valid and enforceable obligations of Borrower and any guarantors; and do not (i) contravene, or constitute (with or without the giving of notice or lapse of time or both) a violation of any provision of applicable law, a violation of the organizational documents of Borrower or any guarantor, or a default under any agreement, judgment, injunction, order, decree or other instrument binding upon or affecting Borrower or any guarantor, (ii) result in the creation or imposition of any lien (other than the lien(s) created by the Loan Documents) on any of Borrower's or any guarantor's assets, or (iii) give cause for the acceleration of any obligations of Borrower or any guarantor to any other creditor.  Asset Ownership.  Borrower has good and marketable title to all of the properties and assets reflected on the balance sheets and financial statements supplied Bank by Borrower, and all such properties and assets are free and clear of mortgages, security deeds, pledges, liens, charges, and all other encumbrances, except as otherwise disclosed to Bank by Borrower in writing and approved by Bank ("Permitted Liens").  To Borrower's knowledge, no default has occurred under any Permitted Liens and no claims or interests adverse to Borrower's present rights in its properties and assets have arisen.  Discharge of Liens and Taxes.  Borrower has duly filed, paid and/or discharged all taxes or other claims that may become a lien on any of its property or assets, except to the extent that such items are being appropriately contested in good faith and an adequate reserve for the payment thereof is being maintained.  Sufficiency of Capital.  Borrower is not, and after consummation of this Agreement and after giving effect to all indebtedness incurred and liens created by Borrower in connection with the Note and any other Loan Documents, will not be, insolvent within the meaning of 11 U.S.C. § 101, as in effect from time to time.  Compliance with Laws.  Borrower and any subsidiary and affiliate of Borrower and any guarantor are in compliance in all material respects with all federal, state and local laws, rules and regulations applicable to its properties, operations, business, and finances, including, without limitation, all applicable federal, state and local laws and regulations intended to protect the environment; and the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), if applicable. None of Borrower, or any subsidiary or affiliate of Borrower or any guarantor is a Sanctioned Person or has any of its assets in a Sanctioned Country or does business in or with, or derives any of its operating income from investments in or transactions with, Sanctioned Persons or Sanctioned Countries in violation of economic sanctions administered by OFAC.  The proceeds from the Loan will not be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Country. “OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control. “Sanctioned Country” means a country subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/programs/index.shtml, or as otherwise published from time to time.  “Sanctioned Person” means (i) a person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/enforcement/ofac/sdn/index.shtml, or as otherwise published from time to time, or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or (C) a person resident in a Sanctioned Country to the extent subject to a sanctions program administered by OFAC.  Organization and Authority.  Each corporation, partnership or limited liability company Borrower and/or guarantor, as applicable, is duly created, validly existing and in good standing under the laws of the state of its organization, and has all powers, governmental licenses, authorizations, consents and approvals required to operate its business as now conducted.  Each corporation, partnership or limited liability company Borrower and/or guarantor, as applicable, is duly qualified, licensed and in good standing in each jurisdiction where qualification or licensing is required by the nature of its business or the character and location of its property, business or customers, and in which the failure to so qualify or be licensed, as the case may be, in the aggregate, could have a material adverse effect on the business, financial position, results of operations, properties or prospects of Borrower or any such guarantor.  No Litigation.  There are no material pending or threatened suits, claims or demands against Borrower or any guarantor that have not been disclosed to Bank by Borrower in writing, and approved by Bank.   Indemnity. Borrower will indemnify Bank and its affiliates from and against any losses, liabilities, claims, damages, penalties or fines imposed upon, asserted or assessed against or incurred by Bank arising out of the inaccuracy or breach of any of the representations contained in this Agreement or any other Loan Documents.

1

 

AFFIRMATIVE COVENANTS.  Borrower agrees that from the date hereof and until final payment in full of the Obligations, unless Bank shall otherwise consent in writing, Borrower will:  Access to Books and Records.  Allow Bank, or its agents, during normal business hours, access to the books, records and such other documents of Borrower as Bank shall reasonably require, and allow Bank, at Borrower’s expense, to inspect, audit and examine the same and to make extracts therefrom and to make copies thereof.  Business Continuity.  Conduct its business in substantially the same manner and locations as such business is now and has previously been conducted.  Compliance with Other Agreements.  Comply with all terms and conditions contained in this Agreement, and any other Loan Documents, and swap agreements, if applicable, as defined in 11 U.S.C. § 101, as in effect from time to time.  Estoppel Certificates.  Furnish, within 15 days after request by Bank, a written statement duly acknowledged of the amount due under the Loan and whether offsets or defenses exist against the Obligations.  Insurance.  Maintain adequate insurance coverage with respect to its properties and business against loss or damage of the kinds and in the amounts customarily insured against by companies of established reputation engaged in the same or similar businesses including, without limitation, commercial general liability insurance, workers compensation insurance, and business interruption insurance; all acquired in such amounts and from such companies as Bank may reasonably require.  Maintain Properties.  Maintain, preserve and keep its property in good repair, working order and condition, making all replacements, additions and improvements thereto necessary for the proper conduct of its business, unless prohibited by the Loan Documents.  Non-Default Certificate From Borrower.  Deliver to Bank, with the Financial Statements required below, a certificate signed by a principal financial officer of Borrower, in the form attached hereto as Exhibit A, warranting that no "Default" as specified in the Loan Documents nor any event which, upon the giving of notice or lapse of time or both, would constitute such a Default, has occurred and demonstrating Borrower’s compliance with the financial covenants contained herein.  Notice of Default and Other Notices.  (a) Notice of Default.  Furnish to Bank immediately upon becoming aware of the existence of any condition or event which constitutes a Default (as defined in the Loan Documents) or any event which, upon the giving of notice or lapse of time or both, may become a Default, written notice specifying the nature and period of existence thereof and the action which Borrower is taking or proposes to take with respect thereto.  (b) Other Notices.  Promptly notify Bank in writing of (i) any material adverse change in its financial condition or its business; (ii) any default under any material agreement, contract or other instrument to which it is a party or by which any of its properties are bound, or any acceleration of the maturity of any indebtedness owing by Borrower; (iii) any material adverse claim against or affecting Borrower or any part of its properties; (iv) the commencement of, and any material determination in, any litigation with any third party or any proceeding before any governmental agency or unit affecting Borrower; and (v) at least 30 days prior thereto, any change in Borrower's name or address as shown above, and/or any change in Borrower's structure.  Other Financial Information.  Deliver promptly such other information regarding the operation, business affairs, and financial condition of Borrower which Bank may reasonably request.  Payment of Debts.  Pay and discharge when due, and before subject to penalty or further charge, and otherwise satisfy before maturity or delinquency, all obligations, debts, taxes, and liabilities of whatever nature or amount, except those which Borrower in good faith disputes.  Reports and Proxies.  With the exception of  financial statements, reports, notices and proxy statements posted on EDGAR, deliver to Bank, promptly, a copy of all other financial statements, reports, notices, and proxy statements, sent by Borrower to stockholders, and all other regular or periodic reports required to be filed by Borrower with any governmental agency or authority.

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NEGATIVE COVENANTS.  Borrower and each guarantor agree that from the date hereof and until final payment in full of the Obligations, unless Bank shall otherwise consent in writing, Borrower and each guarantor will not:   Change in Fiscal Year.  Change its fiscal year.  Change of Control.  Make or suffer a change of ownership that effectively changes control of Borrower from current ownership.   Default on Other Contracts or Obligations.  Default on any material contract with or obligation when due to a third party or default in the performance of any obligation to a third party incurred for money borrowed.  Guarantees.  Guarantee or otherwise become responsible for obligations of any other person or entity, without the written consent of the Bank. Government Intervention.  Permit the assertion or making of any seizure, vesting or intervention by or under authority of any governmental entity, as a result of which the management of Borrower or any guarantor is displaced of its authority in the conduct of its respective business or such business is curtailed or materially impaired.  Judgment Entered.  Permit the entry of any monetary judgment or the assessment against, the filing of any tax lien against, or the issuance of any writ of garnishment or attachment against any property of or debts due Borrower or any guarantor, in an amount in excess of $175,000.00, that is not discharged or execution is not stayed within 60 days of entry.  Limitation on Debt.  Directly or indirectly, create, incur, assume or become liable for, any debt, contingent or direct, other than the indebtedness evidenced by the Note and the Permitted Debt shown on Exhibit B attached hereto and made a part hereof.  Encumbrances.  Except as previously disclosed to Bank, create, assume, or permit to exist any mortgage, security deed, deed of trust, pledge, lien, charge or other encumbrance on any of its assets, whether now owned or hereafter acquired, other than Permitted Liens shown on Exhibit B attached hereto and made a part hereof.  Loans and Advances.  During any fiscal year, make loans or advances, excepting loans and advances to any subsidiary, suppliers or vendors in the ordinary course of business, and ordinary course of business travel and expense advances, to any person or entity.

ANNUAL FINANCIAL STATEMENTS.  Borrower shall deliver to Bank, within ninety (90) days after the end of each fiscal year, a detailed audited financial report of Borrower and its subsidiaries containing a consolidated and consolidating balance sheet at the end of that period and a consolidated and consolidating income statement and statement of cash flows for that period, setting forth in comparative form the figures for the preceding fiscal year, together with all supporting schedules and footnotes, and containing an audit opinion of independent certified public accountants acceptable to Bank that the financial statements were prepared in accordance with GAAP.  Borrower shall obtain such written acknowledgments from Borrower's independent certified public accountants as Bank may require permitting Bank to rely on such annual financial statements.  In addition, promptly upon receipt, one copy of each written report submitted to Borrower by independent accountants for any other annual, quarterly or special audit will be provided to Bank.

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PERIODIC FINANCIAL STATEMENTS.  Borrower shall deliver to Bank, within forty-five (45) days after the end of each quarter, a consolidated and consolidating balance sheet of Borrower and its subsidiaries at the end of that period and a consolidated and consolidating income statement and statement of cash flows for that period (and for the portion of the fiscal year ending with such period), together with all supporting schedules, setting forth in comparative form the figures for the same period of the preceding fiscal year, and certified by the chief financial officer of Borrower as true and correct and fairly representing the financial condition of Borrower and its subsidiaries and that such statements are prepared in accordance with GAAP, except without footnotes and subject to normal year-end audit adjustments.

FINANCIAL COVENANTS.  Borrower agrees to the following provisions from the date hereof until final payment in full of the Obligations, unless Bank shall otherwise consent in writing, using the financial information for Borrower, its subsidiaries, affiliates and its holding or parent company, as applicable:

Deposit Relationship.  Borrower shall maintain its primary depository account and cash management account with Bank. 

Tangible Net Worth.   Borrower on a consolidated basis shall, at all times, maintain a Tangible Net Worth of not less than $18,000,000.00.  "Total Liabilities" shall mean all liabilities of Borrower, including capitalized leases and all reserves for deferred taxes and other deferred sums appearing on the liabilities side of a balance sheet of Borrower, in accordance with GAAP applied on a consistent basis.  "Tangible Net Worth" shall mean the  total assets minus Total Liabilities.  For purposes of this computation, the aggregate amount of any intangible assets of Borrower including, without limitation, goodwill, franchises, licenses, patents, trademarks, trade names, copyrights, service marks, prepaid pension costs and brand names, shall be subtracted from total assets.  This covenant shall be tested quarterly.

Total Liabilities to Tangible Net Worth Ratio.  Borrower, on a consolidated basis,  shall, at all times, maintain a ratio of Total Liabilities divided by Tangible Net Worth of not more than 1.75 to 1.00.  "Total Liabilities" shall mean all liabilities of Borrower, including capitalized leases and all reserves for deferred taxes and other deferred sums appearing on the liabilities side of a balance sheet of Borrower, in accordance with GAAP applied on a consistent basis.  "Tangible Net Worth" shall mean the  total assets minus Total Liabilities.  For purposes of this calculation, the aggregate amount of any intangible assets of Borrower including, without limitation, goodwill, franchises, licenses, patents, trademarks, trade names, copyrights, service marks, prepaid pension costs and brand names, shall be subtracted from total assets.  This covenant shall be tested quarterly.

Fixed Charge Coverage Ratio.  Borrower, on a consolidated basis, shall maintain a Fixed Charge Coverage Ratio of not less than 2.0 to 1.0, to be calculated at the end of each fiscal quarter on a rolling four quarter basis.  “Fixed Charge Coverage Ratio” shall mean the sum of earnings before interest, taxes, depreciation and amortization, less Unfinanced Capital Expenditures, dividends, and funds used for stock repurchases, divided by the sum of interest expense plus current maturities of long-term debt paid during the prior four quarters.  “Unfinanced Capital Expenditures” shall mean increases in fixed assets over a rolling four quarter basis, less financing associated with the purchase of such fixed assets.

CONDITIONS PRECEDENT.  The obligations of Bank to make the loan and any advances pursuant to this Agreement are subject to the following conditions precedent: Additional Documents.  Receipt by Bank of such additional supporting documents as Bank or its counsel may reasonably request.

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CONNECTICUT PREJUDGMENT REMEDY WAIVER.  BORROWER ACKNOWLEDGES THAT THE TRANSACTIONS REPRESENTED BY THIS AGREEMENT ARE COMMERCIAL TRANSACTIONS AND HEREBY VOLUNTARILY AND KNOWINGLY WAIVES ANY RIGHTS TO NOTICE OF AND HEARING ON PREJUDGMENT REMEDIES UNDER CHAPTER 903A OF THE CONNECTICUT GENERAL STATUTES OR OTHER STATUTES AFFECTING PREJUDGMENT REMEDIES, AND AUTHORIZES THE BANK'S ATTORNEY TO ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT COURT ORDER, PROVIDED THE COMPLAINT SHALL SET FORTH A COPY OF THIS WAIVER.

IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above, have caused this Agreement to be duly executed under seal.

 

	 	ACME UNITED CORPORATION
	 	 	 	 
	 	 	 	 
	 	By:	   	   
	 	 	Walter C. Johnsen
	 	 	 Its:	Chairman of the Board and 

Chief Executive Officer

	 	 	 Duly Authorized
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	WELLS FARGO BANK, N.A.
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	 	John Mulvey, Senior Vice President
	 	 	 	 
	 	 	 	 

 

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EXHIBIT A

NON-DEFAULT CERTIFICATE

In accordance with the terms of the Loan Documents dated February 18, 2011 by and between Wells Fargo Bank, N. A. and Acme United Corporation (“Borrower”), I hereby certify that:

	
1.

	
I am a principal financial officer of Borrower;

	
2.

	
The enclosed financial statements are prepared in accordance with generally accepted accounting principles;

	
3.

	
No Default (as defined in the Loan Documents) or any event which, upon the giving of notice or lapse of time or both, would constitute such a Default, has occurred.

	
4.

	
Borrower is in compliance with the Financial Covenant(s) set forth in the Loan Documents, as demonstrated by the calculations contained in the Covenant Compliance Certificate attached hereto as Schedule 1.

_______________________________

Walter C. Johnsen

Its: Chairman of the Board and Chief Executive Officer

Duly Authorized

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SCHEDULE 1

COVENANT COMPLIANCE CERTIFICATE

Borrower Name: Acme United Corporation

For the fiscal ________________________ ended ____________________

ALL CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN SHALL HAVE THE MEANINGS GIVEN IN THE LOAN DOCUMENTS.

 

	COVENANT	ACTUAL	REQUIRED
	 	 	 
	Fixed Charge Coverage Ratio	 	not less than 2.00 to 1.00
	 	 	 
	 	 	
Compliance?  Yes    No

	 	 	 
	Total Liabilities to Tangible Net Worth	 	not more than 1.75 to 1.00
	 	 	 
	 	 	Compliance?  Yes    No
	 	 	 
	Tangible Net Worth	 	Not less than $18,000,000.00
	 	 	 
	 	 	Compliance?  Yes    No

 

 

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Exhibit B

 

Permitted Debt

 

1. Debt of any subsidiary to or from Borrower or another subsidiary.

2. Debt associated with equipment leases and real property leases previously disclosed to Bank.

Permitted Liens

1. Liens securing Permitted Debt.

 

 

 

 

 

8acme_10k123110ex1011.htm

Exhibit 10.11

 

ACME UNITED CORPORATION

Change in Control Plan

This Change in Control Plan shall apply to each Officer of the Corporation at the level of Corporate Vice President or above who is designated from time to time by the Board of Directors of the Corporation as a participant in this Plan (a “Participant”).

Change in Control

In the event of the occurrence of a Change in Control, a Participant shall be entitled to benefits under this Plan if the Participant voluntarily or involuntarily separates from service of the Corporation, with or without cause or any reason whatsoever, within one (1) year following such Change in Control event. A Change in Control event shall be deemed to have occurred upon  i) a change in the ownership of the Corporation, or ii) a change in the ownership of a substantial portion of the assets of the Corporation. The occurrence of a Change in Control event shall be acknowledged by the plan administrator or board of directors, by strictly applying these provisions without any discretion to deviate from the objective application of the definitions provided herein.

Except as otherwise provided herein, a change in the ownership of the Corporation occurs on the date that any one person, or more than one person acting as a group acquires ownership of stock of the Corporation that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Corporation. However, if any one person, or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the stock of the Corporation the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the Corporation (or to cause a change in the effective control of the Corporation). An increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the corporation acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this section. This section applies only when there is a transfer of stock of the Corporation (or issuance of stock)  which remains outstanding after the transaction.  

A change in the ownership of a substantial portion of the Corporation’s assets occurs on the date that any one person, or more than one person acting as a group acquires (or has acquired during the 12- month period ending on the date of the most recent acquisition by such person or persons) assets from the Corporation that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the corporation immediately before such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

1

 

Separation from Service

A Participant separates from service with the Corporation if the employment relationship of the Participant with the Corporation is terminated. However, for purposes of this provision, the employment relationship is treated as continuing intact while the Participant is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Participant retains a right to reemployment with the Corporation under an applicable statute or by contract. For purposes of this provision, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Participant will return to perform services for the Corporation. If the period of leave exceeds six months and the Participant does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Participant to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a 29-month period of absence may be substituted for such six month period.

Whether a termination of employment has occurred is determined based on whether the facts and circumstances indicate that the Corporation and the Participant reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Participant would perform after such date would permanently decrease to no more than 20 percent of the average level of bona fide services performed over the immediately preceding 36-month period. Facts and circumstances to be considered in making this determination include, but are not limited to, whether the Participant continues to be treated as an employee for other purposes,  whether similarly situated service providers have been treated consistently, and whether the Participant is permitted, and realistically available, to perform services for other service recipients in the same line of business. A Participant will be presumed not to have separated from service where the level of bona fide services performed continues at a level that is 50 percent or more of the average level of service performed by the employee during the immediately preceding 36-month period. No presumption applies to a decrease in the level of bona fide services performed to a level that is more than 20 percent and less than 50 percent of the average level of bona fide services performed during the immediately preceding 36-month period.

2

 

Benefits Payable

Benefits under the Plan shall be payable to a Participant as follows:

Base salary: The monthly salary rate being paid to the Participant on the date of a Change in Control event times the number of  “months of compensation payable” in the schedule below.

Incentive Bonus: The average monthly payment to the Participant for the three taxable years immediately prior to a Change in Control event times the number of “months of compensation payable” in the schedule.

Insurance benefits: Continuation into the future of medical, life and AD&D insurance which was in effect as of the date of a Change in Control event for the number of “months of compensation payable” in the schedule.

Timing of Payments

The amounts due a Participant under the Plan for Base Salary and Incentive Bonus shall be paid in a lump sum no later than thirty (30) days after the Participant separates from service, provided that the Participant is not a Specified Employee, in which case payment cannot be made to such Participant until the passage of six (6) months from the date on which such payment is otherwise due. The term Specified Employee means a Participant who, as of the date of the Participant’s separation from service, is a key employee of the Corporation at a time when the shares of the Corporation are publicly traded on an established securities market or otherwise. For purposes of this provision, a Participant is a key employee if the Participant (1) is an officer of the Corporation with annual compensation of greater than $160,000 (for the 2010 calendar year subject to adjustment for future years), (2) owns 5% of the stock of the Corporation, or (3) owns 1% of the stock of the Corporation and has annual compensation of more than $150,000, at any time during the 12- month period ending on December 31 of each plan year. If a Participant is a key employee as of December 31, the Participant is treated as a key employee for purposes of this provision for the entire 12-month period beginning on December 31. After the passage of such six month period, the affected Participant shall receive all payments which were deferred during the period and then payments will resume according to the schedule set forth in the Plan.

 

Schedule of Benefits

 

	 	Officer Title	 Months of compensation payable
	 	 	 
	 	
Director of the Corporation who is also an Officer

of the Corporation at the level of Executive

Vice President or above

	36 months
	 	 	 
	 	Senior Vice President and Vice President	24 months

                                                                                  

3

 

This Plan will remain in effect until modified or terminated by action of the Board of Directors provided that benefits payable to any Participant shall not be reduced, nor shall any rights accruing to any Participant hereunder be diminished, except that, notwithstanding any provision of this Plan to the contrary, if any amount or benefit to be paid or provided to an Participant under this Plan would be an “excess parachute payment” (within the meaning of Section 280G of the Code, or any successor provision thereto) but for the application of this sentence, then the payments and benefits to be paid or provided to the Participant under this Plan will be reduced to the minimum extent necessary (i.e., so that all potential “parachute payments” to the Participant will not exceed 2.99 times such Participant’s “base amount,” as such terms are used in Section 280G of the Code) so that no portion of any such payment or benefit, as so reduced, constitutes an excess parachute payment.

Nothing contained in the Plan shall be deemed to provide benefits to any such Participant in the event of a Separation from Service in the absence of a Change in Control of the Corporation, nor shall this Plan be deemed an employment contract.

The Corporation shall reimburse any Participant for reasonable legal fees incurred in enforcing the terms of this Plan provided such Participant prevails in such enforcement action.

 

 

Revised Effective as of: December 31, 2010

 

 

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