AMENDED AND RESTATED
SUPPLEMENTAL PENSION AGREEMENT
AMENDED AND RESTATED SUPPLEMENTAL PENSION AGREEMENT (the "Agreement"),
effective as of the 1st day of June, 2001, by and between THE TOPPS COMPANY,
INC., a Delaware corporation (the "Company"), and XXXXXX X. XXXXXX, a resident
of New York (the "Executive").
WHEREAS, the Executive and the Company are parties to a Supplemental
Pension Agreement, dated May 19, 1986, as amended by certain provisions of
Executive's Amended and Restated Employment Agreement, dated March 1, 1999
(collectively, the "Original Agreement");
WHEREAS, the Executive and the Company wish to amend and restate the
Original Agreement and incorporate all of the terms into a single document;
NOW, THEREFORE, the parties hereto agree that the Original Agreement shall
be amended and restated in its entirety to provide as follows:
Section 1. Benefits
(a) Supplemental Retirement Benefit. On the Date of Termination (as defined
in the Amended and Restated Employment Agreement between the Company and the
Executive, dated concurrently with this Agreement (the "Employment Agreement")),
the Executive shall be entitled to receive, and the Company shall provide to the
Executive, or his Beneficiary, as applicable, a supplemental retirement benefit
equal to the greater of: (i) his Actual Service Benefit (as defined in
subsection 1(b) hereof), or (ii) his Age 65 Benefit (as defined in subsection
1(c) hereof) increased to its Actuarial Equivalent (as defined in subsection
1(g) hereof) value from the Executive's attainment of age 65 ("Normal Retirement
Age") until his Date of Termination. The supplemental retirement benefit
determined hereunder shall be paid to the Executive in the form of an Actuarial
Equivalent single lump sum payment within the number of days following the Date
of Termination and in the manner prescribed by the Employment Agreement. For
purposes of determining the amount required to be contributed to the Rabbi Trust
for any fiscal year of the Company pursuant to Section 3 hereof, the Executive's
accrued supplemental retirement benefit ("Accrued Benefit") as of the end of the
calendar year which ends within such fiscal year ("Date of Determination") shall
be the benefit to which the Executive would have been entitled under this
subsection 1(a) hereof had his Date of Termination occurred on the January 1
immediately following the Date of Determination, and had his termination
occurred on account of Retirement under the Employment Agreement (but
disregarding any requirement under the Employment Agreement that he retire as of
a date that is later than the Date of Determination).
(b) Actual Service Benefit. For purposes of this Agreement, the Executive's
"Actual Service Benefit" shall mean the excess of (A) minus (B), where (A) is
equal to the normal retirement benefit, in the form of a single life annuity,
that would be payable to the Executive on his Date of Termination under the
terms of The Topps Company, Inc. Retirement Plan, subject to the last sentence
of subsection 1(e) hereof, as most recently amended prior to the Date of
Termination (the "Retirement Plan"), but (i) determined without regard to any
Statutory Limits (as defined in subsection 1(d) hereof) or any retirement
benefit offset attributable to amounts described in Schedule B of the Retirement
Plan, and (ii) determined on the basis of the Executive's actual service and
compensation credited under the Retirement Plan through the Date of Termination,
plus any additional service and compensation (including any payments of
severance) that are required to be taken into account under the Employment
Agreement for purposes of determining the Executive's Actual Service Benefit,
and (B) is equal to the Executive's Qualified Plan Benefit (as defined in
subsection 1(f) hereof) determined as of his Date of Termination.
(c) Age 65 Benefit. For purposes of this Agreement, the Executive's "Age 65
Benefit" shall mean the excess of (A) minus (B), where (A) is equal to the
normal retirement benefit, in the form of a single life annuity, that would be
payable to the Executive as of his Normal Retirement Age under the terms of the
Retirement Plan, but determined without regard to any Statutory Limits or any
retirement benefit offset attributable to amounts described in Schedule B of the
Retirement Plan, and (B) is equal to the Executive's Qualified Plan Benefit
determined as of his Normal Retirement Age.
(d) Statutory Limits. For purposes of this Agreement, the term "Statutory
Limits" shall mean any current or future statutory or regulatory limitation
relating to the maximum permissible benefits, compensation or similar factor
that may be taken into account when determining the retirement benefits that may
be paid from the Retirement Plan by reason of the Employee Retirement Income
Security Act of 1974, as amended, or the Internal Revenue Code of 1986, as
amended (the "Code"), including, but not limited to, the limitations imposed by
Section 401(a)(17) of the Code and Section 415 of the Code.
(e) Other Limits. Notwithstanding anything herein to the contrary, in
determining the Executive's Actual Service Benefit and his Age 65 Benefit, such
benefit shall be determined without regard to any amount paid to the Executive
as an "extension bonus" pursuant to the terms of the Employment Agreement, and
without taking into account any income that is attributable to any stock options
or stock appreciations rights granted to the Executive, or income attributable
to fringe benefits or executive perquisites. Without the Executive's prior
written consent, no amendment of the Retirement Plan after its restatement
effective as of February 27, 2000 shall be taken into account if it would reduce
the aggregate value, on the day prior to the amendment, of the Qualified Plan
Benefit and the benefit otherwise payable to the Executive under this Agreement
(f) Qualified Plan Benefit. For purposes of this Agreement, the term
"Qualified Plan Benefit" shall mean the sum of: (i) the normal retirement
benefit, in the form of a single life annuity, that is payable to the Executive
under the terms of the Retirement Plan as of any relevant date, and (ii) the
benefits that are payable to the Executive in the form of a single life annuity
as described in Schedule B of the Retirement Plan as of any relevant date.
(g) Actuarial Equivalent. For purposes of this Agreement, the term
"Actuarial Equivalent" shall have the meaning ascribed to that term in Schedule
A of the Retirement Plan.
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Section 2. Taxes
The Company shall deduct from all amounts payable under this Agreement all
federal, state, local and other taxes required by law to be withheld with
respect to such payments.
Section 3. Funding of Benefits
(i) To provide funding for the Executive's benefits, an irrevocable
"rabbi" trust was established on May 20, 1993 with Xxxxxxx X. Xxxxxxxxxx,
Esq. serving as trustee (the "Rabbi Trust"). Such Rabbi Trust includes
provisions that limit access of the Company and the Company's creditors to
assets held thereunder, to the maximum extent permitted without giving the
Executive rights that are greater than those of an unsecured general
creditor of the Company, so that the Executive is in no event in
constructive receipt of income with respect to assets held under the Rabbi
Trust, under prevailing ruling standards of the Internal Revenue Service as
in effect from time to time during the term of this Agreement. Consistent
with the terms of the Original Agreement, the Company shall continue make
an annual cash contribution to the Rabbi Trust prior to the end of the
current and each succeeding fiscal year of the Company in an amount
sufficient to fully fund the present value of the Executive's Accrued
Benefit as of the end of the calendar year which ends within such fiscal
year, based on the lump sum amount that would have been distributable to
the Executive, assuming the Date of Termination had occurred on such date.
The Company shall provide annual written notice to the Executive
identifying the assets held under the Rabbi Trust and stating the fair
market value thereof within 45 days after the making of each such annual
contribution. The amount to be contributed from time to time shall be based
on an actuarial valuation of the Executive's Accrued Benefit prepared by an
independent actuary of a major actuarial consulting firm selected by the
Executive and agreeable to the Company and the fair market value of the
assets held under such trust as of the end of the calendar year for which
such contribution is being made. The trustee shall be instructed to invest
trust assets in a reasonable, prudent and conservative manner consistent
with the preservation of trust corpus.
(ii) Actuarial assumptions used for determining actuarial equivalence
of benefits and the present value of the Executive's Accrued Benefit shall
be consistent with those used in calculating lump sum payments under the
Company's Retirement Plan.
(iii) The parties hereto agree that this Agreement shall not be
amended or terminated without the Executive's and the Company's prior
written consent and that all of the Executive's benefits thereunder,
whether now or hereafter accrued, are fully vested and may not be reduced
or eliminated for any reason, notwithstanding any contrary provision of
this Agreement, without the Executive's prior written consent.
Section 4. Beneficiaries
In the event of the Executive's death prior to completion of the lump sum
distribution required to be paid under subsection 1(a) hereof, the Executive's
supplemental retirement benefit shall in all events be paid in a single lump sum
payment to his beneficiary or beneficiaries named in the most recent Beneficiary
designation filed with the Company prior to his date of death (collectively, his
"Beneficiary"). If no such election has been filed, the Executive's supplemental
retirement benefit shall be paid to his estate.
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Section 5. Successors
This Agreement is personal to the Executive and without the prior written
consent of the Company shall not be assignable by the Executive otherwise than
by will or the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by the Executive's legal representatives. This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns. Unless otherwise occurring by operation of law, the
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company (a "Successor Company") to assume expressly and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform if no such succession had taken place;
provided, however, that no such succession shall relieve the Company of its
obligations hereunder unless the assumption of this Agreement by a Successor
Company is approved in writing by the Executive.
Section 6. Governing Law
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Delaware without giving
effect to the conflict of laws principles thereof.
Section 7. Entire Agreement
Except as provided in the Employment Agreement, the parties hereto agree
that this Agreement contains the entire understanding and agreement between
them, and supersedes all prior understandings and agreements between the parties
respecting the supplemental pension benefits of the Executive, in including,
without limitation, the Original Agreement.
Section 8. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.
* * *
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IN WITNESS WHEREOF, the Company has caused its name to be ascribed to this
Agreement by its duly authorized representative and the Executive has executed
this Agreement as of the date and the year first above written.
THE TOPPS COMPANY, INC.
By: / X. Xxxxxx/
-------------------
Name: Xxxxxxxxx Xxxxxx
Title: Vice President - Chief
Financial Officer
/A. T. Shorin/
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Xxxxxx X. Xxxxxx, Executive
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