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EXHIBIT 10.26
DEFERRED COMPENSATION AGREEMENT
BY AND BETWEEN
XXXXX XXXXXX GROUP, INC.
AND
XXXXXX X. XXXXXX
THIS AGREEMENT, made as of this 29 day of August, 1988 by and between
Xxxxx Xxxxxx Group, Inc., a corporation organized and existing under the laws of
the State of Delaware and having its principal place of business at 0000 Xxxxxx
xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Xxxxx Xxxxxx") and Xxxxxx X. Xxxxxx
of 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Xxxxxx");
WITNESSETH
WHEREAS, Xxxxxx is Chairman of the Board of Directors and Chief Executive
Officer of Xxxxx Xxxxxx;
WHEREAS, Xxxxxx'x services to Xxxxx Xxxxxx are vital and unique; and
WHEREAS, as consideration for Xxxxxx'x continued employment, Xxxxx Xxxxxx
desires to provide Xxxxxx with deferred compensation in addition to current and
deferred compensation otherwise or subsequently agreed to between the parties;
NOW, THEREFORE, the parties hereto agree as follows, to wit:
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ARTICLE I
ELIGIBILITY AND RELATION TO COMPENSATION AND OTHER BENEFITS
1.1 Xxxxxx shall be eligible for deferred compensation in accordance with this
deferred compensation agreement and as further provided in the Xxxxx Xxxxxx
Group, Inc. Supplemental Employee's Retirement Plan for Certain Senior
Officers (the "Plan"). In case of any conflict between the provisions of
this deferred compensation agreement and the Plan, the provisions of the
Plan shall govern.
1.2 The deferred compensation benefits herein provided shall be in addition to,
and not in degradation of, any and all amounts of compensation, emoluments,
perquisites and other remuneration previously agreed to between the parties
or to be agreed to between the parties subsequent to the execution of this
deferred compensation agreement; including, but not by way of limitation,
any such compensation, emoluments, perquisites and other remuneration
previously agreed to or to be agreed to between Xxxxxx and Xxxxx Xxxxxx
Incorporated, a wholely-owned subsidiary of Xxxxx Xxxxxx, or any other
subsidiary or affiliate of Xxxxx Xxxxxx.
DEFERRED COMPENSATION BENEFITS
2.1 If Xxxxxx shall retire from the employ of Xxxxx Xxxxxx (or of any
subsidiary or affiliated thereof including, but not limited to, Xxxxx
Xxxxxx Incorporated) upon or after attaining the age of sixty-five (65),
then, in addition to all other retirement income, he shall receive a
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monthly retirement allowance payable as long as he shall live, with each
such monthly retirement allowance equal to one-twelfth of the difference
between item one below and item two below:
1. Xxxxxx'x base compensation immediately prior to retirement, less
2. Xxxxxx'x annual retirement income under the Xxxxx Xxxxxx Pension
Plan plus Xxxxxx'x annual Primary Insurance Amount under the
Social Security Act of 1935, as amended (49 Stat 620).
2.2 At the sole election of Xxxxxx (or his spouse, contingent annuitant or
beneficiary then entitled to commence pension payments), which election
shall be made in writing during a onetime election period which shall
commence ninety (90) days prior to commencement of a monthly retirement
allowance under any of the sections of this agreement and end on the day
that such monthly retirement allowance commences, he shall make all of the
specific investment directions and instructions with respect to his aliquot
share of the trust estate, but only with respect to that period on and
after his monthly retirement allowance commences. Xxxxxx may also designate
an investment manager to issue such directions on his behalf. If Xxxxxx
shall elect this option, the amount of each monthly retirement allowance
shall be adjusted and determined as follows:
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(a) The monthly retirement allowance shall be equal to the amount
otherwise determined under this agreement during the calendar year in
which such monthly retirement allowance commences.
(b) Thereafter, the monthly retirement allowance payable during each
calendar year shall be equal to the monthly retirement allowance
payable during the previous calendar year multiplied by a fraction,
the numerator of which shall be Xxxxxx'x aliquot share of the trust
estate immediately following distribution of the retirement allowance
of the preceding December and the denominator of which is the
actuarially expected assets if the actuarially assumed investment
assumption for the calendar year used by the actuary in valuing the
Plan was exactly realized.
2.3 If Xxxxxx shall terminate his employment with Xxxxx Xxxxxx (or of all of
the subsidiaries and affiliates thereof, including but not limited to Xxxxx
Xxxxxx Incorporated), or his employment shall be terminated by Xxxxx Xxxxxx
(or the relevant subsidiary or affiliate) prior to his attaining age
fifty-five (55), then, in addition to all other retirement income he may
elect to have his benefit payable in accordance with subparagraphs (a) or
(b) below (but not both such subparagraphs):
(a) A monthly retirement allowance payable as long as he shall live to
commence on the first of the month on or after attainment of age
fifty-five, or on the first of any month thereafter prior to his
attainment of age sixty-five, with such monthly retirement allowance
determined in accordance with Section 2.1 hereof, except
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that the offsets provided by Section 2.1(2) hereof shall be subtracted
only when, and if, actually paid (subject to the rebuttable
presumption of the payment of Social Security benefits commencing at
age sixty-two) and shall be reduced for early retirement by
multiplying the result by a percentage equal to one hundred percent
(100%) less
(i) One-half percent (0.5%) multiplied by the number of months by
which the later of (1) the initial payment date or (2) the first
day of the month coincident with or next following Xxxxxx'x
attainment of age sixty (60) precedes the first day of the month
coincident with or next following the date that Xxxxxx attains
age sixty-five (65), plus
(ii) Twenty-five one hundredths percent (0.25%) multiplied by the
number of months, if any, by which the initial payment date
precedes the first day of the month coincident with or next
following the date that Xxxxxx attains age sixty (60).
(b) A monthly retirement allowance payable as long as he shall live to
commence on the first day of the month coincident with or next
following the date that Xxxxxx attains his sixty-fifth (65th)
birthday, with such monthly retirement allowance determined in
accordance with Section 2.1 hereof, except that the offsets provided
by Section 2.1(2) hereof shall be subtracted only when, and if,
actually paid (subject to the rebuttable presumption of the payment of
Social Security benefits commencing at age sixty-two).
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2.4 If Xxxxxx shall retire from the employ of Xxxxx Xxxxxx (or of any
subsidiary or affiliate thereof including, but not limited to, Xxxxx Xxxxxx
Incorporated), after attaining the age of fifty-five (55) but prior to
attaining the age of sixty-five (65), then, in addition to all other
retirement income, he shall receive a monthly retirement allowance, payable
as long as he shall live, which, at his election shall be payable in
accordance with subparagraphs (a) or (b) below (but not both such
subparagraphs):
(a) A monthly retirement allowance to commence on the first day of the
month coincident with or next following his date of retirement, or the
first day of any month thereafter prior to his attainment of age
sixty-five (65), with each such monthly retirement allowance
determined in the same manner as for Section 2.3(a) hereof.
(b) A monthly retirement allowance to commence on the first day of the
month coincident with or next following the date that Xxxxxx attains
his sixty-fifth (65th) birthday, with each such monthly retirement
allowance determined in the same manner as for Section 2.3(b) hereof.
2.5 Notwithstanding anything to the contrary, if Xxxxxx shall retire or
terminate his employment with Xxxxx Xxxxxx (or any affiliate or subsidiary
thereof) subsequent to a change in control (as defined in the Plan), then,
in addition to all other retirement income his monthly retirement allowance
hereunder shall commence on the first day of the month coincident with or
next following his termination of employment
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and shall be payable as long as he shall live but the amount of monthly
retirement allowance so payable shall be determined as for retirement at or
after age sixty-five (65), in accordance with Section 2.1 hereof, except
that the offsets provided by Section 2.1(2) hereof shall be subtracted
when, and if, actually paid (subject to the rebuttable presumption of the
payment of Social Security benefits commencing at age sixty-two).
2.6 If Xxxxxx shall retire from the employ of Xxxxx Xxxxxx (or of any
subsidiary or affiliate thereof including, but not limited to, Xxxxx Xxxxxx
Incorporated) as a result of permanent and total disability (as defined in
the Plan) then, in addition to all other retirement income, his monthly
retirement allowance shall commence on the first day of the month
coincident with or next following his termination of employment and shall
be payable as long as he shall live, but the amount of monthly retirement
allowance as payable shall be determined as for retirement at or after age
sixty-five (65), in accordance with Section 2.1 hereof, except that the
offsets provided by Section 2.1(2) hereof shall be subtracted when, and if,
actually paid (subject to the rebuttable presumption of the payment of
Social Security benefits commencing at age sixty-two).
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2.7 Notwithstanding anything to the contrary, in the sole discretion of the
Compensation Committee of the Board of Directors of Xxxxx Xxxxxx, all
benefits hereunder shall be forfeited, or all remaining benefits shall be
forfeited, if Xxxxxx shall, at any time prior to the earliest of (1) one
(1) year after termination of employment with Xxxxx Xxxxxx, (2) attainment
of age sixty (60) or (3) the occurrence of a Change in Control (as defined
in the Plan), become an owner, principal, officer, employee, consultant or
investor in a financial services organizations which is determined by the
Compensation Committee of the Board of Directors of Xxxxx Xxxxxx to be in
substantial and direct competition with the then core or basic lines of
business of Xxxxx Xxxxxx. Upon request, within two (2) weeks, or a
reasonable extension of that time for good cause, the Compensation
Committee will rule as to whether employment with a specific organization
will trigger the forfeiture herein provided. However, a passive investment
of less than one percent (1%) of the stock of a publicly held company shall
not, per se, be deemed engaging in substantial competition for this
purpose.
ARTICLE III
DEATH BENEFITS AND PAYMENT OPTIONS
3.1 Notwithstanding anything to the contrary, at the sole election of Xxxxxx
any monthly retirement allowance provided herein may be paid in any of the
following forms of payment:
a. For the lifetime of Xxxxxx only
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b. For the lifetime of Xxxxxx with a guarantee of a minimum of one
hundred twenty (120) monthly payments (with guaranteed payments to be
paid to the beneficiary designated by Xxxxxx if he shall die prior to
receiving one hundred twenty (120) monthly payments).
c. For the lifetime of Xxxxxx with payment of (as elected by Xxxxxx) one
hundred percent (100%), seventy-five percent (75%) or fifty percent
(50%) of the amount of each payment paid during Xxxxxx'x lifetime
continued after his death to his wife or other contingent annuitant
designated by Xxxxxx.
3.2 If Xxxxxx shall elect any form of payment other than in accordance with
Section 3.1(a) hereof, each monthly payment shall be the actuarial
equivalent (as set forth in the Plan) of the monthly retirement allowance
provided by Section 3.1(a) hereof.
3.3 If Xxxxxx elects, death benefit protection provided by the payment option
pursuant to Section 3.2(c) hereof shall be effective after Xxxxxx'x
termination of employment or retirement but prior to commencement of the
monthly retirement allowance hereunder, so as to protect the spouse or
other contingent annuitant designated by Xxxxxx during the period in which
payments are deferred.
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ARTICLE IV
FUNDING AND ADMINISTRATION
4.1 The Compensation Committee of the Board of Directors shall have the
authority to administer and interpret the provisions of this deferred
compensation agreement and the Plan.
4.2 The obligations herein provided and provided under the Plan shall be
contingently funded by certain assets held by a trustee, in trust, as an
inter vivos trust for this purpose. Xxxxx Xxxxxx and Xxxxxx, however,
recognize that such assets are held in trust for this purpose subject to a
condition precedent that Xxxxx Xxxxxx will not become insolvent (as defined
in the Agreement and Declaration of Trust) prior to any such distribution
becoming due to Xxxxxx. If Xxxxx Xxxxxx does become insolvent prior to that
time, the trust estate will be reverted to Xxxxx Xxxxxx or its creditors
and, in that event, Xxxxxx will have an uninsured claim against Xxxxx
Xxxxxx for all benefits to which he is entitled under this deferred
compensation agreement and the Plan and for which he did not receive a
distribution from the assets held in the inter vivos trust aforesaid.
4.3 In any event Xxxxxx shall have the status of an unsecured creditor of Xxxxx
Xxxxxx with respect to all benefits due to Xxxxxx pursuant to this deferred
compensation agreement and the Plan to the extent that such benefits are
not paid out of the assets held in trust as aforesaid.
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4.4 Benefits herein provided are personal to Xxxxxx (and his beneficiary and
contingent annuitant, if applicable) and may not be assigned, pledged,
alienated, transferred, hypothecated or used for collateral and, to the
extent permitted by law, may not be levied, attached or garnished or made
subject to any proceeding in distraint or creditors' claims in bankruptcy
or insolvency.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE DULY
EXECUTED AS OF THE DATE FIRST ABOVE WRITTEN.
/s/ Xxxxxx X. Xxxxxx (L.S.) XXXXX XXXXXX GROUP, INC.
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Xxxxxx X. Xxxxxx
By /s/ Xxxxxx X. Xxxxxxxxx
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Title President
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Rider A to the Deferred
Compensation Agreement
dated August 29, 1988 By
And Between Xxxxx Xxxxxx
Group Inc. And Xxxxxx X.
Xxxxxx.
The Deferred Compensation Agreement By And Between Xxxxx Xxxxxx Group Inc.
and Xxxxxx X. Xxxxxx dated August 29, 1988 is hereby amended by adding a new
Section 3.4, effective as of January 1, 1990, which reads in its entirety as
follows:
3.4 In the event Xxxxxx dies while employed by Xxxxx Xxxxxx or any affiliate
thereof and with a surviving spouse, such spouse shall be eligible to
receive the Preretirement Spouse's Benefit as provided in Section 6.5 of
the Plan, as amended.
/s/ Xxxxxx X. Xxxxxx (L.S.) Xxxxx Xxxxxx Group Inc.
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Xxxxxx X. Xxxxxx
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
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Title: Vice President
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