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EXHIBIT 10.13
Deferred Compensation Agreement for
Xxxxxx X. Xxxxx
Xxxxxxxxxxx Paper Company (the "Company") hereby agrees to pay Xxxxxx X. Xxxxx
("Xxxxx") as deferred compensation on August 31, 2005, $230,000 and any unpaid
income credits in his deferred compensation account. The deferred compensation
account shall be credited with income quarterly on each March 31, June 30,
September 30 and December 31 in each year commencing December 31, 1996 at a per
annum rate of interest equal to the Applicable Rate (as defined below) which
interest credit shall be paid out quarterly on each such date. The "Applicable
Rate" shall mean on any date as to which income credits are to be calculated the
per annum rate applicable to borrowings from the principal revolving credit
facility of the Company on such day, or if no such facility shall then exist,
the principal revolving credit facility of any successor to substantially all of
the assets of the Company (a "Successor") on such day, or if no such facility
shall then exist, the prime lending rate announced by Xxxxxx Trust & Savings
Bank is applicable on such day. Interest shall be computed on the basis of the
number of days actually elapsed and a 365- or 366-day year, as applicable. The
Company may, from time to time, at its discretion, accelerate the date of
payment of all or any portion of this deferred compensation in its sole
exclusive discretion.
The obligations of the Company and/or any Successor to make any payment
hereunder shall be subordinate and junior to all principal and interest on any
Indebtedness (as defined below) of the Company and/or any Successor. Upon the
maturity of any Indebtedness of the Company and/or any Successor by lapse of
time, acceleration or otherwise, then all principal of and interest on all such
matured Indebtedness shall first be paid in full before any payment on account
of the obligations of the Company hereunder is made by the Company and/or any
Successor hereunder. In the event of insolvency, bankruptcy, liquidation,
reorganization or other similar proceedings, or any receivership proceedings in
connection therewith, relative to the Company and/or any Successor, and in the
event of any proceedings for voluntary liquidation, dissolution or other winding
up the Company and/or any Successor, whether or not involving insolvency or
bankruptcy proceedings, then all principal of and interest on all Indebtedness
of the Company and/or any Successor shall have been paid in full before any
payment on account of the Company's obligations hereunder. Furthermore, Xxxxx
irrevocably agrees to such additional terms of subordination as requested by any
lender (or other party providing non-equity financing) to the Company and/or any
Successor, any of their respective affiliates or any holder of 10% or more of
the then outstanding shares and/or interests of the Company and/or any
Successor.
For the purposes hereof, "Indebtedness" of an entity shall mean the
principal of (and premiums, if any) and unpaid interest on:
(i) indebtedness of such entity which is for money borrowed from
others;
(ii) indebtedness guaranteed, directly or indirectly, in any manner by
such entity, or in effect guaranteed, directly or indirectly, by such
entity through an agreement, contingent or otherwise, to supply funds
to or in any manner invest in the debtor or to purchase indebtedness,
or to purchase property or services primarily for the purpose of
enabling the debtor to make payment of the indebtedness or of assuring
the owner of the indebtedness against loss;
(iii) all indebtedness secured by any mortgage, lien, pledge, charge or
other encumbrance upon property owned by such corporation, even if such
entity has not in any manner become liable for the payment of such
indebtedness;
(iv) all obligations of such entity created or arising under any
conditional sale, lease or other title agreement with respect to
property acquired by such entity even though the rights and remedies of
the seller, lessor or lender under such agreement or lease in the event
of default are limited to repossession or sale of such property to the
extent that such obligations are required to be capitalized for
financial accounting purposes in accordance with generally accepted
accounting principles, consistently applied; and
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(v) renewals, extensions and refunding of any such indebtedness.
Xxxxx'x rights under this Deferred Compensation Agreement shall not be
transferable voluntarily or involuntarily and shall not be subject to pledge or
any claim of its creditors. Any purported transfer of this interest shall be
void.
This Deferred Compensation Agreement shall not be construed as
conferring any rights to continued employment. Employer's rights with respect to
the continuation or termination of Xxxxx'x employment shall be unchanged by this
Deferred Compensation Agreement.
Agreed to this 23rd day of December, 1996.
Xxxxxxxxxxx Paper Company
By: /s/ Xxxxx Xxxxxxxx
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Its: Vice President
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
