Exhibit 10.5
DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT is made and entered into this 4th day of May, 1998, by
and between STEELCASE INC., a Michigan corporation ("Company") and XXXXXXX X.
XXXXXXXX ("Executive").
WHEREAS, the Executive is presently an employee of the Company;
WHEREAS, the Executive has elected to defer a portion of his future
compensation until after his retirement or death and may do so again in the
future; and
WHEREAS, the Company has agreed to pay deferred compensation to the
Executive in consideration of such deferral and may do so in the future; and
WHEREAS, the parties wish to substitute the following agreement for
any and all prior agreements relating to such deferrals and to provide hereby
for future deferrals;
NOW THEREFORE, the parties agree as follows:
1. Deferral Election and Amount. Attachment A sets forth amounts deferred
by Executive under one or more prior agreements. Any future deferrals agreed to
between Executive and Company will be evidenced by separate Attachments,
executed by or on behalf of both parties. Any election to defer is irrevocable
and the compensation which is deferred must be compensation payable for services
to be performed on or after the date of execution of the election to defer. In
consideration of such deferral, the Company agrees to pay benefits as set forth
in the Attachment.
2. Source of Amounts Deferred. The Company shall deduct compensation
deferred hereunder equally from the Executive's bi-weekly payroll, unless
otherwise specified in the Attachment.
3. Account. The Company shall maintain a bookkeeping account indicating
the cumulative amount of compensation deferred by the Executive.
4. Payments.
a. General. Each Attachment will describe the amount of payments to
be made by the Company in respect of the deferral, and any vesting
requirements.
In the event deferrals cease before completion for any reason
other than Executive's death, the Company will only make those payments
identified in the Appendix in the event of less than complete deferral.
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b. Discharge for Cause. If the Executive is discharged for cause, an
amount equal to the compensation actually deferred, if any, shall be paid
to the Executive, without interest, in five equal annual payments
commencing in the month of March following the discharge. Amounts payable
under this subparagraph may be prepaid at the option of the Company. For
purposes of this Agreement, discharge "for cause" shall mean discharge by
reason of gross insubordination, proven dishonesty injurious to the
Company, the commission of a felony or misdemeanor injurious to the
Company, or the engagement in business or practice in competition with the
Company without the Company's prior written consent.
c. Competition. If the Executive enters into competition with the
Company, without prior approval of the Board of Directors of the Company,
and the benefits paid to the Executive hereunder exceed the amount of
compensation actually deferred, no further payments shall be made to the
Executive or a designated beneficiary. If the amount of compensation
actually deferred exceeds the benefits paid to the Executive hereunder, the
difference between such amounts shall be paid to the Executive, without
interest, in five equal annual payments commencing in the month of March
following the entry of the Executive into competition with the Company.
Amounts payable under this subparagraph may be prepaid at the option of the
Company.
d. Suicide. If the Executive dies by suicide within one year of the
onset of any deferral period, the amount of compensation actually deferred,
if any, pursuant to that deferral election shall be paid to the beneficiary
designated by the Executive, without interest, within 60 days of the date
of death.
e. Minimum Payments. The Executive, together with his designated
beneficiary shall in no event receive an aggregate amount which is less
than the total which has been deferred by the Executive.
f. Payment by Company or Trust. If a trust is established as
described in Section 7 below and funds have been set aside in the trust,
amounts payable under this agreement may be paid by the Company or from the
trust. The Company shall determine the source of the payments.
Establishment of the trust shall not relieve the Company of its obligations
under this agreement except to the extent that payments are actually made
from the trust.
5. Beneficiary Designation. The Executive may designate a beneficiary to
receive the benefits as set forth above, including the benefits provided under
Paragraphs 4(d) and 4(e), following his death. Such designation shall be
substantially in the form attached hereto. In the absence of a designation by
the Executive, the Executive shall be deemed to have designated that any unpaid
installments shall be payable to his surviving spouse, and that installments
remaining unpaid upon the spouse's death shall be paid to the spouse's estate.
If the Executive dies without a surviving spouse and has failed to make a
designation, remaining unpaid installments shall be paid in equal shares to the
Executive's living children.
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6. Limitations.
a. No Withdrawal. Amounts which have been deferred under this
agreement are not subject to withdrawal by the Executive and shall be paid
only in accordance with the terms hereof.
b. No Assignment. No amount payable under this agreement shall be
subject to assignment, transfer, sale, pledge, encumbrance, alienation or
charge by the Executive or any beneficiary. Any attempt to assign,
transfer, sell, pledge, encumber, alienate or charge any amount hereunder
shall be without effect.
c. Unsecured. Neither the Executive nor any beneficiary, nor any
other person shall be deemed to have, pursuant to this agreement, any
property interest, legal or equitable, in any specific asset of the
Company. The Executive is a general, unsecured creditor with respect to
the promises of the Company made herein.
7. Investment. The Company may use the funds deferred hereunder in any
manner desired by the Company. The Company may but is under no obligation to,
invest the funds, at the Company's convenience, to assist in providing the
benefits promised herein. Any investment, reserve or other funding arrangement
shall belong solely to the Company, shall be subject to the Company's sole
control, and shall be subject to the claims of creditors of the Company.
Neither the Executive nor any beneficiary shall have any legal or equitable
interest in any such investment, reserve or other funding arrangement. If the
Company purchases life insurance in connection with this agreement, the Company
shall be the owner and beneficiary of all such policies.
The Company, in its sole discretion, may determine to establish a
trust to assist in meeting its obligations under this agreement and other
similar agreements. If established, the trust shall conform to the requirements
of Revenue Procedure 92-64, as amended or superseded.
8. Interpretation. The Board of Directors of the Company shall have full
power and authority to interpret, construe and administer this agreement, the
Board's interpretations, constructions, and actions hereunder shall be binding
and conclusive on all persons fore all purposes. No member of the Board shall
be liable to any person for any action taken or omitted in connection with this
agreement, unless attributable to his own willful misconduct or lack of good
faith.
In the event of the Executive disagrees with any determination of the
Board of Directors hereunder the Executive shall have the right and obligation
to make written request to the Board of Directors within 60 days of notice of
their decision to review that decision. The Directors must issue their decision
or review within 120 days after delivery of the request or the request is deemed
denied.
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9. Amendment. The Board of Directors of the Company shall have the power
to amend this agreement; provided, however, that no amendment shall have any
material, adverse effect on the Executive unless he consents to such amendment
in writing. No amendment may be made which would alter the irrevocable nature of
the election to defer compensation.
IN WITNESS WHEREOF, the parties have executed this agreement the 4th
day of May, 1998.
STEELCASE INC.
By /s/ X. Xxxxxxx-Xxxxxxx
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Its Senior Vice President, Chief Financial Officer
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/s/ Xxxxxxx X. Xxxxxxxx
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Executive
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ATTACHMENT A
Executive: Xxxxxxx X. Xxxxxxxx
Date of Deferral
Agreement: February 25, 1988
Deferral Period: 5 Years (3/1/88 - 2/28/93)
Deferred Amount: $25,000/year
Annual Benefit
Payments: $175,000, paid each March for 15 years beginning the
March after Executive attains age 70, provided that he
does attain age 70.
Vesting Schedule: 100%
Death Prior to Attaining
Age 70: $80,000 per year for 15 years, starting March after
death.
Less than Complete Deferral:
Number of Years of
Complete Deferral Payments
------------------ --------
0 $0
1 $25,000 (lump sum)
2 $8,000/year for 10 years
3 $14,000/year for 10 years
4 $20,000/year for 10 years
(Plus refund of any partial year deferral)
Payments will be made (or begin) in the March following cessation of
deferrals.
Acknowledged:
Steelcase, Inc.
By: /s/ X. Xxxxxxx-Xxxxxxx
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/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
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