EXHIBIT 10.1
AMENDMENT OF
DEFERRED COMPENSATION AGREEMENT
THIS AMENDMENT OF DEFERRED COMPENSATION AGREEMENT ("Amendment") is made
and entered into this December ___, 2002, by and between Nebraska Book Company,
Inc., a Kansas corporation ("NBC"), and
____________________________________________ (the "Employee").
Reference is hereby made to the Deferred Compensation Agreement dated
___________________, 199__, between NBC and the Employee (the "Agreement"). The
parties hereby amend the Agreement to include terms as set forth herein. For the
purposes of this Amendment, "Deferred Compensation" shall mean the reserve
established by NBC for deferred compensation of Employee, including all interest
accrued thereon.
1. Deferral Limit. The amount of the deferral shall not reduce the
Employee's annual compensation below the taxable wage base for Old Age,
Survivors and Disability Insurance (OASDI) of the Federal Insurance Contribution
Act (FICA), as such amount is adjusted each year.
2. Payment of Benefits. The second sentence of paragraph 1 and paragraph
3 of the Agreement are hereby amended and superseded to provide that the
Deferred Compensation shall be distributed as follows:
a. Termination of Employment. Except as provided in subsection
2.c below, if Employee voluntarily ceases to be employed by NBC, or ceases to be
employed because of death, disability, or a change in controlling ownership of
NBC, NBC shall pay to Employee or to the beneficiary(ies) designated by Employee
(in the event of death), in five (5) approximately equal annual installments of
principal and interest, or such longer or shorter period as determined by the
parties at the time of execution of this Agreement in a separate written
instrument, the total amount reserved as his/her Deferred Compensation. If
Employee should die before all of the annual payments are made, NBC will pay the
remaining annual installments to the beneficiary(ies) designated by Employee.
Annual installment payments shall commence on January 2 of the year following
the year that Employee terminates under this provision, and subsequent payments
shall be due on January 2 of each following year.
b. Involuntary Termination of Employment. If Employee
involuntarily ceases to be employed by NBC for any reason other than death,
disability, or a change in controlling ownership of NBC, the Deferred
Compensation shall be paid to Employee in one lump sum within sixty (60) days
after Employee ceases to be employed.
c. Change of Controlling Ownership. If Employee either
voluntarily or involuntarily terminates employment within two (2) years after a
change of controlling ownership for reasons other than death, disability or
retirement, the Employee may request to be paid the entire amount of Deferred
Compensation in one lump sum within sixty (60) days after the date of
termination; provided, however, that if NBC does not consent to the lump sum
payment, NBC shall establish an irrevocable "Rabbi Trust" administered by a
third party trustee and in substantially the form set forth in Rev. Proc. 92-64
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issued by the Internal Revenue Service. Within said sixty (60)-day period, NBC
shall fund the "Rabbi Trust" in an amount equal to the Deferred Compensation,
and the assets in such trust shall be subject only to the rights of creditors in
a bankruptcy or insolvency of NBC.
d. Death of all Beneficiaries. If both the Employee and his or
her designated beneficiary(ies) should die before all remaining annual
installments are completed pursuant to this Section 2, subsequent installments
of the unpaid Deferred Compensation shall be paid to the estate of the last to
die of the Employee or the designated beneficiary(ies).
e. Beneficiary or Beneficiaries. For purposes of this Agreement,
"beneficiary" or "beneficiaries" shall mean those persons designated by the
Employee on the form provided for that purpose by NBC and delivered to NBC prior
to Employee's death. In the absence of an effective designation, the beneficiary
shall be the Employee's surviving spouse, if any, and if none, then the
beneficiary shall be the Employee's surviving lineal descendants, per stirpes,
and if there be no surviving spouse or lineal descendants, then his or her
estate. The designation may be changed from time to time by the Employee by
submitting a revocation of the prior designation in a form accepted by NBC and
naming the new beneficiary(ies).
f. Change of Controlling Ownership. For purposes of this
Agreement, "change in controlling ownership" shall mean: (i) the acquisition by
any person, entity or group of persons (other than the current majority
stockholder in NBC) of fifty percent (50%) or more of the combined voting power
of NBC or the parent entity of NBC; (ii) the approval by the stockholders of NBC
or its parent company of a reorganization, merger, or consolidation, after which
the current majority stockholder does not own more than fifty percent (50%) of
the combined voting power of the reorganized, merged or consolidated then
outstanding securities of NBC or the parent entity of NBC; or (iii) a
liquidation or dissolution of NBC or a sale of substantially all of NBC's
assets.
g. Disability. For purposes of this Agreement, "disability" shall
mean a diagnosed physical or mental illness or condition which prevents
Employee, for a period of six (6) or more consecutive months, from reasonably
performing his or her duties in an active capacity.
3. Exclusions.
a. Not a Contract of Employment. Nothing contained in the
Agreement, as amended, shall be construed to be a contract of employment for any
term of years, nor as conferring upon the Employee the right to continue in the
employ of NBC in his or her present capacity, or in any other capacity. It is
expressly understood by the parties hereto that the Agreement, as amended,
relates exclusively to deferred compensation for the Employee's services, and is
not intended to be an employment contract.
b. Not a Trust. Nothing contained in the Agreement, as amended,
and no action taken pursuant to its provisions by either party hereto shall
create, nor to be construed to create, a trust of any kind, or a fiduciary
relationship between NBC and the Employee, his or her designated beneficiary or
any other person.
c. Participation in Other Plans. Nothing contained in the
Agreement, as amended, shall be construed to alter, abridge, or in any manner
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affect the rights and privileges of Employee to participate in and be covered by
any pension, profit-sharing, group insurance, bonus or other similar employee
plans which NBC may now or hereafter have.
4. Amendment of Paragraph 4. Paragraph 4 of the Agreement is amended to
clarify that no person, other than NBC, shall have any interest in the Deferred
Compensation until distributed as provided in the Agreement, as amended. To the
extent that any person acquires a right to receive payments from NBC under the
provisions hereof after expiration of all contingencies, such right shall be no
greater than the right of any unsecured general creditor of NBC.
5. Alienability. The Agreement is amended to include the following
provision: Neither the Employee nor his or her designated beneficiary(ies) shall
have any power or right to transfer, assign, anticipate, hypothecate or
otherwise encumber any part or all of the amounts of Deferred Compensation, nor
shall such amounts be subject to seizure by any creditor thereof, by a
proceeding of law or in equity, and no such benefit shall be transferable by
operation of law in the event of bankruptcy, insolvency or death of the Employee
or his or her designated beneficiary(ies). Any such attempted assignment or
transfer shall be void and shall terminate the Agreement, and NBC shall
thereupon have no further liability hereunder.
6. Ratification of Agreement. Except as expressly amended herein, the
parties hereby ratify and affirm the terms and provisions of the Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto affixed their
signatures on the day and year first above written.
NEBRASKA BOOK COMPANY, INC. EMPLOYEE:
By:
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Its
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December 31, 2002
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