HNI CORPORATION DIRECTORS DEFERRED COMPENSATION PLAN DEFERRAL ELECTION AGREEMENT Applies Only to Fees Earned in ________
Exhibit
10.6
HNI
CORPORATION
DIRECTORS
DEFERRED COMPENSATION PLAN
Applies
Only to Fees Earned in ________
This Deferral Election Agreement (this
"Agreement") is made by and between HNI Corporation (the "Corporation") and
_____________________________ (print name) (the "Director")
on the date below. The Corporation has established a nonqualified
deferred compensation plan, the HNI Corporation Directors Deferred Compensation
Plan (the "Plan"), for the benefit of the Corporation's outside
Directors. The Plan permits the Director to defer a percentage of the
Director's annual retainer, including any common stock grant, meeting fees (if
any) and any other amounts payable to the Director by the Corporation for
services performed as a Director (collectively, "Fees"). The deferral
for the Plan year commencing ______________ (the "Current Election Year") is
made by entering into this Agreement with the Corporation.
The Corporation and the Director agree
as follows:
1. Fee Reduction
Election. The Corporation will reduce the amount of the
Director's Fees otherwise payable to the Director for services performed in the
Current Election Year and will credit these amounts to the Director's account
under the Plan according to the Director's elections in Section 4
below.
2. Accounts. The
Corporation will maintain two accounts under the Plan, the Cash Account and the
Stock Account. The Cash Account will be credited with interest at
prime rate plus one percentage point. The Stock Account will be held
in stock units. Each stock unit will be equal to a share of common
stock of the Corporation ("Stock") and will be credited with reinvested
dividends as if actually held in the form of Stock. The Director may
elect to have Fees that otherwise (but for this Agreement) would have been paid
to the Director in the form of cash, credited to the Stock Account and held in
the form of stock units or credited to the Cash Account. Fees
deferred under this Agreement that would otherwise be paid to the Director in
the form of Stock will automatically be credited to the Stock Account and held
in stock units.
3. Manner of Distribution of
Accounts. All distributions from the Cash Account will be made
in cash. All distributions from the Stock Account will be made in
Stock. The Director may elect when and how amounts credited under
this Agreement will be distributed. Distributions may be made in a
lump sum or annual installments over a period of years, elected by the
Director.
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4.
Director's Election for Current Election
Year. Please fill
in all applicable blanks (showing "0" if no amount will be deferred) and check
all applicable boxes below to complete the election.
a.
Amount Deferred
i. Deferral
from Cash Fees
The
Director elects to defer Fees payable in cash for services performed in the
Current Election Year to be credited to the Director's Cash Account and/or Stock
Account as follows:
Cash
Account: _____% (Insert percent)
Stock
Account: _____% (Insert percent)
(together,
can be no more than 100%)
ii. Deferral
from Stock Fees
The
Director elects to defer Fees payable in Stock (common stock grant) for services
performed in the Current Election Year to be credited to the Director's Stock
Account as follows:
Stock
Account: _____% (Insert percent)
b. When/How
Distributions Are Made
Distribution
from the Cash Account will be made in the form of cash. Distributions
from the Stock Account will be made in the form of Stock, which will be
delivered to the Corporation's transfer agent and placed in a direct
registration account in the Director's name unless the Director notifies the
Corporation in sufficient time to coordinate a different share delivery
method. All distributions from the Plan will be made on the 3rd
Monday of January. Distributions from both
the Cash Account and the Stock Account will be made as follows:
i.
Distribution
Date: [Select one]
o
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Separation
from Service (as defined in the
Plan)
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o
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Commencement
date: Distribution from the Cash Account and/or Stock Account
will commence in _____ [Specify year in which
distributions will begin, may be no earlier than
______.]
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ii.
Form
of Distribution: [Select one]
o
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Lump
sum
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o
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Substantially
equal annual installments over ___ years [Insert number of years, not
to exceed 15.]
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Note: You may change the
time and form of distribution of an account only under limited circumstances,
generally requiring an additional 5-year deferral of your benefit commencement
date.
The Corporation reserves the right to
amend the Plan in any manner and to terminate the Plan and, to the extent
permitted by Section 409A of the Internal Revenue Code and other applicable law,
require an immediate distribution of all accounts.
5. The
above deferral elections are based on the assumption the Corporation will, in
_____, continue its established practice of paying 50% of director compensation
in cash and 50% in Stock. If actual _____ director
compensation varies (for example, 100% cash and 0% Stock), the Corporation
will adjust the amount deferred in Stock or cash (as the case may be) under
this Agreement so the dollar amount of the total deferral is the same as if the
Corporation paid compensation according to the 50%-50% established
practice.
6. The
Director understands this Agreement is subject to all of the terms and
conditions of the Plan, and acknowledges the Director has either read, or been
given the opportunity to read, the Plan. In particular, the Director
understands there are some exceptions to the payment terms described
above. For example, if the Director Separates from Service for
reasons other than Retirement (as defined in the Plan), payment of the
Director's account will generally be made in a lump sum when the Director
Separates from Service, and a single lump-sum distribution will be made to the
Director in the event of a Change in Control (as defined in the
Plan).
7. The
Director acknowledges in making the decision to defer Fees under the Plan, the
Director has not relied upon any financial or tax advice provided by the
Corporation, and the Director understands the Corporation has not received a
ruling or determination from the Internal Revenue Service as to the effect of
the deferral on the Director's income or employment tax liability.
8. Except
as permitted by the Plan and applicable law or deemed advisable by the
Corporation in order to preserve the intended tax consequences of the Plan, this
Agreement, once made, may not be revoked. It is binding upon, and
will inure to the benefit of, the Director, the Director's beneficiaries, heirs
and personal representatives, the Corporation and its successors and
assigns.
Dated this ____ day of _______________,
_______.
DIRECTOR:
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Received and accepted by HNI
Corporation this______day of_________________, ______.
HNI
Corporation
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By:
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Name:
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Title:
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