DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT, dated July 1, 1994, by and between WAUSAU PAPER
XXXXX COMPANY (herein referred to as the "Corporation") and SAN X.
XXX, XX., an individual (herein referred to as "Executive").
W I T N E S S E T H:
WHEREAS, the Corporation and Executive entered into a deferred
compensation agreement dated March 2, 1990 and now desire to amend and
clarify certain provisions of that agreement;
NOW, THEREFORE, the parties agree as follows:
1. ELECTION TO DEFER. Executive may, in his discretion, elect to
defer all or any cash compensation (specified by amount or percentage
of such compensation) payable to him by the Corporation from time to
time for service to the Corporation as an employee by executing an
election in the form set forth in Exhibit A hereto (herein referred to
as an "Election") and filing such Election with the secretary of the
Corporation (herein referred to as the "Secretary"). An Election shall
be effective with respect to all cash compensation specified on the
election form filed with the Secretary by Executive which is accrued
and payable after the date the Election is received by the Secretary
and until the Election is amended or revoked. An Election hereunder
may be amended or revoked at any time by filing a subsequent Election
with the Secretary.
-1-
Such amendment or revocation shall be effective with respect to cash
compensation accrued and payable on and after receipt of such new
Election by the Secretary.
2. DEFERRED COMPENSATION ACCOUNT. The Corporation shall maintain
upon its corporate books a deferred compensation account (herein
referred to as the "Account") with respect to any compensation deferred
under this agreement. As of the first day of each calendar month, the
Corporation shall make the following adjustments to the Account: (a)
Subtract amounts paid from the Account during the immediately preceding
month; and (b) Add the amount of compensation Executive has elected to
defer under paragraph 1 which was otherwise payable to Executive during
the immediately preceding month. As of the first day of each calendar
year, the Corporation shall add to the Account simple interest,
calculated at a rate equal to average of the prime rate published in
THE WALL STREET JOURNAL on the first business day of each calendar
quarter in the preceding calendar year, minus one percentage point, on
the average daily balance in the Account during the preceding year.
The Account created hereunder shall not represent any specific assets
of the Corporation, and the Corporation is not obligated by this
provision to set aside any assets in respect of the Account.
3. DISTRIBUTION. Distribution of the amount reflected in the
Account shall be made in 5 annual installments with the first
installment payment to be made within the 60 day period following the
date on which Executive ceases to be a member of the Board of Directors
of the Corporation; provided, however, that in the event of a "Change
in Control" (defined below) or Executive's death, the remaining balance
in the Account shall be distributed within the 60 day period following
the date of such event in a single lump sum payment. The amount of
-2-
each annual installment distribution shall equal the balance in the
Account on the date set for payment of such installment divided by the
number of installment distributions remaining within the distribution
period (including such installment). Interest shall continue to be
credited under paragraph 2 during the installment distribution period.
For purposes of this paragraph 3, a "Change in Control" shall mean:
(a) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act (a "Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either
(i) the then outstanding shares of common stock of the Corporation
(the "Outstanding Corporation Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of the
Corporation entitled to vote generally in the election of directors
(the "Outstanding Corporation Voting Securities"); excluding,
however, the following: (A) any acquisition directly from the
Corporation other than an acquisition by virtue of the exercise of a
conversion privilege unless the security being so converted was
itself acquired directly from the Corporation, (B) any acquisition
by the Corporation, (C) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Corporation or any
entity controlled by the Corporation, (D) any acquisition pursuant
to a transaction which complies with clauses (i), (ii), and (iii) of
subparagraph (c) of this paragraph 3, (E) except as provided in
paragraphs (d) and (e), any acquisition by any of the Xxxxxxx
Entities or any of the Xxxxx Entities, or (F) any increase in the
proportionate number of shares of Outstanding Corporation Common
Stock or Outstanding Corporation Voting
-3-
Securities beneficially owned by a Person to 20% or more of the
shares of either of such classes of stock if such increase was
solely the result of the acquisition of Outstanding Corporation
Common Stock or Outstanding Corporation Voting Securities by the
Corporation; provided, however, that this clause (F) shall not
apply to any acquisition of Outstanding Corporation Common Stock or
Outstanding Corporation Voting Securities not described in clauses
(A), (B), (C), (D), or (E) of this paragraph (a) by the Person
acquiring such shares which occurs after such Person had become the
beneficial owner of 20% or more of either the Outstanding
Corporation Common Stock or Outstanding Corporation Voting
Securities by reason of share purchases by the Corporation; or
(b) A change in the composition of the Board such that the
individuals who, as of the Effective Date, constitute the Board
(such Board shall be hereinafter referred to as the "Incumbent
Board") cease for any reason to constitute at least a majority of
the Board; provided, however, for purposes of the Plan, that any
individual who becomes a member of the Board subsequent to the
Effective Date whose election, or nomination for election by the
Corporation's shareholders, was approved by a vote of at least a
majority of those individuals who are members of the Board and who
were also members of the Incumbent Board (or deemed to be such
pursuant to this proviso) shall be deemed to be and shall be
considered as though such individual were a member of the Incumbent
Board, but provided, further, that any such individual whose
initial assumption of office occurs as a result of either an actual
or threatened election contest (as such terms are used in Rule
14a-11 of Regulation 14A promulgated under
-4-
the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the
Board shall not be so deemed or considered as a member of the
Incumbent Board; or
(c) Consummation of a reorganization, merger or
consolidation, or sale or other disposition of all or substantially
all of the assets of the Corporation or the acquisition of the
assets or securities of any other entity (a "Corporate
Transaction"); excluding, however, such a Corporate Transaction
pursuant to which (i) all or substantially all of the individuals
and entities who are the beneficial owners, respectively, of the
Outstanding Corporation Common Stock and Outstanding Corporation
Voting Securities immediately prior to such Corporate Transaction
will beneficially own, directly or indirectly, more than 60% of,
respectively, the outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Corporate
Transaction (including, without limitation, a corporation which as
a result of such transaction owns the Corporation or all or
substantially all of the Corporation's assets either directly or
through one or more subsidiaries) (the "Resulting Corporation") in
substantially the same proportions as their ownership, immediately
prior to such Corporate Transaction, of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities, as the
case may be, (ii) no Person (other than the Corporation, any
employee benefit plan (or related trust) of the Corporation, any
Xxxxxxx Entity, any Xxxxx Entity, or such Resulting Corporation)
-5-
will beneficially own, directly or indirectly, 20% or more of,
respectively, the outstanding shares of common stock of the
Resulting Corporation or the combined voting power of the then
outstanding voting securities of such Resulting Corporation
entitled to vote generally in the election of directors except to
the extent that such ownership existed with respect to the
Corporation prior to the Corporate Transaction, and (iii)
individuals who were members of the Incumbent Board will constitute
at least a majority of the members of the board of directors of the
Resulting Corporation; or (d) The Xxxxxxx Entities acquire
beneficial ownership of more than 35% of the Outstanding
Corporation Common Stock or Outstanding Corporation Voting
Securities or of the outstanding shares of common stock or the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the Resulting Corporation; or (e) The Xxxxx
Entities acquire beneficial ownership of more than 35% of the
Outstanding Corporation Common Stock or Outstanding Corporation
Voting Securities or of the outstanding shares of common stock or
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the Resulting Corporation; or (f) The approval by
the shareholders of the Corporation of a complete liquidation or
dissolution of the Corporation.
4. RECIPIENT OF DISTRIBUTION. Each payment to be made by the
Corporation hereunder shall be made to Executive if he is living on the
date such payment is made, and, if he is not, to such person or persons
(the "Beneficiary" or "Beneficiaries") as Executive shall designate on
-6-
the form set forth in Exhibit A or in such other writing signed by the
Executive. Executive may change or revoke any such designation
previously made by filing a new designation with the Secretary. Such
new designation shall be effective for purposes of this paragraph
immediately upon filing. If no designation hereunder is in effect or
no designated Beneficiary is living when payment is to be made, payment
shall be made to the estate of the last to die of Executive or, if a
Beneficiary has been designated and such designation has not been
revoked, the Beneficiary.
5. MISCELLANEOUS.
(a) Neither Executive nor any Beneficiary shall have any
right or title to or interest in any specific assets of the
Corporation in respect of this agreement. Any person entitled to
payment under the agreement shall be an unsecured general creditor
of the Corporation in respect of such payment.
(b) Except as may otherwise be required by law, no amount
payable under this agreement may be alienated in any manner by
Executive or any Beneficiary or be subject to the debts or
liabilities of Executive or any Beneficiary. Any attempt by
Executive or any Beneficiary to alienate any amount payable under
the agreement shall be void.
(c) This agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legatees,
personal representatives and successors.
-7-
IN WITNESS WHEREOF, the parties hereto have caused this agreement
to be executed on the date and year first above written.
WAUSAU PAPER XXXXX COMPANY
By: XXXXXX X XXXXXXX
Xxxxxx X. Xxxxxxx
Vice President Finance,
Treasurer & Secretary
SAN X. XXX XX.
San X. Xxx, Xx., Executive
-8-
EXHIBIT A
WAUSAU PAPER XXXXX COMPANY
DEFERRED COMPENSATION AGREEMENT ELECTION
Date: _________________, 1994
Pursuant to the provisions of the Deferred Compensation Agreement
dated July 1, 1994 (the "Agreement"), I hereby elect to defer the
payment of the following compensation otherwise payable to me by Wausau
Paper Xxxxx Company.
(1) The amount or percentage of such compensation to be deferred
under the Agreement shall be as follows:
Dollar Amount or
TYPE OF COMPENSATION DEFERRAL PERCENTAGE
Salary __________________________________
Bonus __________________________________
(2) This election shall remain in effect until I amend or revoke
it by subsequent election, or until the time set for distribution of
deferred amounts under the Agreement.
(3) In the event of my death before the amounts payable to me
under the Agreement have been distributed to me, I hereby direct that
such amounts be paid in a lump sum to:
(NOTE: If no beneficiary is named, any amounts payable will be paid to
your estate or personal representative. You must notify the Secretary
of the Corporation of any change in your beneficiary's address.)
___________________________________
San X. Xxx, Xx.
