EXHIBIT 10.3
EXECUTIVE DEATH BENEFIT AGREEMENT
This agreement (the "Agreement") is made and effective as of between
DOW XXXXX & COMPANY, INC., a Delaware corporation (the "Company") and
"First Name" "Last Name" ("Executive")
W I T N E S S E T H:
THAT WHEREAS Executive is a valued employee of the Company;
WHEREAS the Company would like to provide death benefit protection to
Executive on a self-insured, unfunded basis; and
WHEREAS, the Company would like to permit Executive to convert the
value of his or her death benefit at retirement to deferred compensation
annuity payments;
NOW, THEREFORE, in consideration of the premises, it is agreed as
follows:
1. Payment of Death Benefit. Upon the death of Executive (i) while
in full-time active employment with the Company or a subsidiary all of the
voting stock of which is owned directly or indirectly by the Company (a
"Subsidiary"), or (ii) following termination of his or her employment by
the Company or a Subsidiary because of his or her disability or
retirement, or (iii) following termination of his or her employment by the
Company or a Subsidiary, after his or her attainment of age 60, for any
reason,
(a) if death occurs prior to Executive's attainment of age 70, the
Company shall pay to his or her Beneficiary (as hereinafter defined) a
death benefit equal to 200% of his or her Total Compensation (as
hereinafter defined); or
(b) if death occurs upon or subsequent to Executive's attainment of
age 70, the Company shall pay to his or her Beneficiary a death benefit
equal to 100% of his or her Total Compensation. Such death benefit shall
be paid in a lump sum as soon as practicable, but in no event more than 60
days following Executive's death. No interest shall be paid with respect
to such death benefit. "Total Compensation" means the sum of (i)
Executive's current annual salary for the year in which Executive's death
occurs, or, following his or her termination of employment, Executive's
final annual salary, plus (ii) the highest annual cash bonus awarded to
Executive in the three most recently completed calendar years prior to
Executive's death, or, following his or her termination of employment, the
three years immediately preceding the year in which he or she terminated
service; provided, however, that if Executive continues in full-time
employment beyond his or her attainment of age 65, his or her Total
Compensation shall be determined by reference to the year in which he or
she attains such age.
2. Reduction of Benefits. Upon 30 days' prior written notice to
Executive, the Company may reduce the death benefit otherwise payable under
Section 1 to reflect a reduction in Federal income tax rates,
(a) if Executive's death occurs prior to his or her attainment of
age 70, to the product obtained by multiplying Total Compensation by a
fraction whose numerator is one and whose denominator is the difference
between one and the highest marginal individual Federal income tax rate
then applicable, or
(b) if such death occurs upon or subsequent to Executive's
attainment of age 70, to one half the amount determined under subsection
(a) of this Section 2.
3. Deferred Compensation Election. By filing written notice (the
"Notice of Election") with the Company, Executive may elect to terminate
his or her right to a death benefit pursuant to Sections 1 or 2 hereof, and
to receive in lieu thereof as an amount credited to Executive's deferred
compensation account, to be governed by the terms of the deferred
compensation agreement between Executive and the Company, the actuarial
-2-
value, as determined by the Company, of Executive's death benefit as of the
effective date of the election. The Notice of Election may be filed either
(i) during the 30-day period immediately following the effective date of
this Agreement, in which case the election shall be effective upon the
later to occur of Executive's retirement or the first anniversary of the
filing of the Notice of Election, or (ii) during December of any year,
provided that such election is made at least five years before the
effective date of Executive's retirement, in which case the election shall
be effective upon Executive's retirement. Such election shall in no event
be effective prior to the effective date of Executive's retirement and
shall have no effect if Executive dies on or prior to the effective date of
his or her retirement.
4. Income Tax Withholding. The Company shall deduct from all
amounts paid under this Agreement all federal, state, local and
other taxes required by law to be withheld with respect to such
payments.
-3-
5. Designation and Change of Beneficiary.
(a) Executive shall file with the Company a written designation of
one or more persons as the beneficiary (the "Beneficiary") who shall be
entitled to receive the death benefit payable upon his or her death under
Section 1 or 2 hereof. Executive may, from time to time, revoke or change
his or her Beneficiary designation without the consent of any Beneficiary
named therein by filing a new designation with the Company. The last such
designation received by the Company shall be controlling, provided that no
designation, or change or revocation thereof, shall be effective unless
received by the Company prior to Executive's death, and in no event shall
it be effective as of a date prior to such receipt.
(b) If no such Beneficiary designation is in effect at the time of
Executive's death, or if no designated Beneficiary survives Executive, or
if such designation conflicts with law, Executive's estate shall be deemed
to have been designated his or her Beneficiary, and the executor or
administrator thereof shall receive the death benefit payable under this
Agreement following Executive's death. If the Company is in doubt as to
the right of any person to receive all or part of the death benefit, the
Company may retain such amount until the rights thereto are determined, or
the Company may pay such amount into any court of appropriate jurisdiction
and such payment shall be a complete discharge of the liability of the
Company therefor.
6. Payments to Persons Other Than Beneficiary. If the Company shall
find that any person to whom any amount is payable under this Agreement is
unable to care for his or her affairs because of illness or accident, or is
a minor, or has died, then any payment due him or her, or his or her estate
(unless a prior claim therefor has been made by a duly appointed legal
representative), may be paid to his or her spouse, a child, a relative, an
institution maintaining or having custody of such person, or any other
-4-
person deemed by the Company to be a proper recipient on behalf of such
person otherwise entitled to payment. Any such payment shall be a complete
discharge of the liability of the Company therefor.
7. Binding on Successors. The obligations of the Company under this
Agreement shall be binding upon any successor corporation or organization
resulting from the merger, consolidation or other reorganization of the
Company. The Company agrees that it will make appropriate provision for
the preservation of Executive's rights under this Agreement in any
agreement or plan which it may enter into or adopt to effect any such
merger, consolidation or reorganization.
8. No Alienation of Benefits. The rights of Executive, his or her
Beneficiary and his or her estate to any benefits hereunder are not subject
in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by creditors of Executive,
his or her Beneficiary or his or her estate, except as provided in Section
5 above with respect to designations of a Beneficiary hereunder or as may
be otherwise required by law. Any attempted disposition of such rights
shall be null and void.
9. Unsecured Creditor Status. This Agreement represents a mere
promise by the Company to make benefit payments in the future. Executive
and his or her Beneficiary shall have no right, title, or interest
whatsoever in or to any investments which the Company may make to aid it in
meeting its obligations under this Agreement. To the extent that any
person acquires a right to receive a payment from the Company under this
Agreement, such right shall be no greater than the right of any unsecured
general creditor of the Company. It is the intention of the parties hereto
that this Agreement and the Company's obligation to make payments of
benefits hereunder be unfunded both for tax purposes and purposes of Title
I of ERISA.
-5-
10. Unfunded Plan; Governing Law. This Agreement is intended to
constitute an unfunded welfare plan for a select group of management or
highly compensated employees and all rights thereunder shall be governed by
and construed in accordance with the laws of the State of New York.
11. Termination of Agreement. The Company may terminate this
Agreement without cause on 90 days' prior written notice to Executive;
provided, however, that the right of the Beneficiary to receive death
benefits under Section 1 or 2 hereof shall survive such termination if
Executive had attained age 60 on or before the effective date of such
termination. In the latter event, for purposes of determining the amount
of the death benefit, Executive shall be deemed to have terminated
employment in the year in which termination of this Agreement occurs.
12. Amendment. No amendment or modification of this Agreement shall
be deemed effective unless and until executed in writing by the Executive
and the Company.
13. Death Benefit Not Considered Compensation. Neither the right to
have the Company pay a death benefit, or, in lieu thereof, additional
deferred compensation, to his or her Beneficiary nor the actual payment of
a death benefit or additional deferred compensation to such Beneficiary
shall be (i) considered as compensation to Executive under any employee
benefit plan of the Company or a Subsidiary, except as specifically
provided in any such plan or as otherwise determined by the Company or (ii)
offset or in any manner be reduced by any amount payable under any other
employee benefit plan or program of the Company or a Subsidiary.
14. Continuance of Employment. This Agreement shall not confer upon
Executive any right with respect to continuance of employment by the
Company or a Subsidiary, nor shall it interfere in any way with the right
-6-
of the Company or a Subsidiary to terminate his or her employment at any
time with or without cause.
15. Headings. The headings of sections are included solely for
convenience and, if there exists any conflict between such headings and the
text, the text shall control.
16. Notice. Unless either party notifies the other to the contrary,
any notice required hereunder shall be duly given if delivered in person or
by registered first class mail (a) if to the Company, to the Treasurer,
X.X. Xxx 000, Xxxxxxxxx, Xxx Xxxxxx 00000, and (b) if to Executive to
"FIRST NAME" "LAST NAME", "ADDRESS1, "Address2" "City" "state" "Postal
Code".
17. This Agreement has been executed in two counterparts each of
which shall constitute one and the same instrument.
-7-
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date set forth above.
DOW XXXXX & COMPANY, INC.
By:
---------------------------------
Vice President, Human Resources
---------------------------------
Executive
8
