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EXHIBIT 10.62
DEFERRED COMPENSATION AGREEMENT
Deferred Compensation Agreement ("Agreement"), dated April 2,
1997, by and between Xxxx Xxxxx Financial Corporation (the "Company") and
Xxxxxxx X. Xxxxxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is employed as the Chief Executive
Officer of the Company and is entitled to remuneration from the Company in
connection with such employment; and
WHEREAS, the Company and the Executive acknowledge that the
payment of remuneration to the Executive during 1997 and future years could
result in certain amounts being non-tax deductible by the Company as a result
of the limitations imposed by section 162(m) of the Internal Revenue Code of
1986, as amended ("Section 162(m)"); and
WHEREAS, the parties wish to enter into this Agreement to
defer the payment to the Executive of certain amounts payable under incentive
compensation arrangements of the Company that would, together with other
remuneration of the Executive, exceed the limitations of Section 162(m);
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein and for other good, valuable and sufficient
consideration, the receipt of which is hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:
1. Limitation and Deferral of Payments. In the event
that all or any portion of the Bonus Payments (defined below) to be made to the
Executive during any year would be disallowed as a federal income tax deduction
by the Company under Section 162(m), then the Executive shall receive Bonus
Payments during such year only to the extent such amounts can be paid without
disallowance of the Company's deduction under Section 162(m), as determined in
good faith by the Company in its sole discretion, and the balance of the Bonus
Payments shall be deferred for later payment to the Executive in accordance
with paragraph 3 below. For purposes of determining the amount of any Bonus
Payment that may be paid currently to the Executive in accordance with the
foregoing, it shall be assumed that (i) the Executive will remain in the
Company's employ through the close of the relevant year and be paid at the same
base salary rate as in effect
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on the date the Bonus Payment would otherwise be made and (ii) all remuneration
paid (or assumed to be paid) by the Company to the Executive that constitutes
"applicable employee remuneration" within the meaning of Section 162(m)(4) for
the relevant year shall be applied against the Section 162(m) limitation before
taking into account the applicable Bonus Payment. For purposes hereof, "Bonus
Payments" shall mean all payments to which the Executive becomes entitled
during 1997 and future years, based on services rendered during 1997 and future
years, under all bonus and incentive compensation plans or arrangements of the
Company (including transaction-related and other special purpose bonuses), but
excluding any such payments that qualify for exemption under Section 162(m).
2. Interest Crediting. Any amounts deferred for later
payment pursuant to paragraph 1 above shall accrue interest at a rate equal to
the prime commercial lending rate of The Chase Manhattan Bank, N.A. as in
effect at the beginning of each calendar quarter of the deferral period,
compounded quarterly, from the date the amount would otherwise have been made
to the Executive, but for the provisions of this Agreement, until the business
day prior to the date of payment of the Deferred Amounts pursuant to paragraph
3 below.
3. Payment of Deferred Amounts. Any portion of the
Bonus Payments that is not paid to the Executive as a result of the limitation
imposed by paragraph 1 above, together with interest credits in accordance with
paragraph 2 above (collectively, the "Deferred Amounts"), shall be paid to the
Executive in full within 10 business days of the earlier of (i) his termination
of employment from the Company for any reason or (ii) the occurrence of a
"Change in Control of the Corporation," as defined under the Company's 1997
Long-Term Incentive Plan (or any successor plan); provided, however, that all
or any portion of the Deferred Amounts shall be paid to the Executive in any
earlier year or years to the extent that (i) such amount, together with all
other "applicable employee remuneration" for such year, would not be disallowed
as a federal income tax deduction by the Company for such year because of the
limitation imposed by Section 162(m), as determined in good faith by the
Company in its sole discretion and (ii) the year of payment follows by at least
one complete calendar year the year in which the Bonus Payment would have been
made to the Executive but for the provisions of this Agreement.
4. Tax Withholding. The Company shall be entitled to
withhold for the payment of taxes all amounts required to be withheld under
federal, state and local income and other tax laws, including, without
limitation, all employment taxes that may be required to be paid on the
Deferred Amounts.
5. Unsecured Rights; Nontransferability. The
Executive's rights under this Agreement shall be those of a general unsecured
creditor of the Company, and all payments to the Executive of the Deferred
Amounts shall be made from the general assets of the Company. Notwithstanding
the foregoing, the Company may in its discretion set aside funds to satisfy its
obligations hereunder through the establishment of a grantor trust subject to
the claims of the Company's creditors, or through any other set aside of funds
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that is held in the Company's general assets. The Executive's rights under the
Agreement may not be anticipated, alienated, sold, transferred, assigned,
pledged, encumbered, attached or garnished by creditors of the Executive.
6. Successors; Beneficiary. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of the Company
upon any sale of all or substantially all of the Company's assets, or upon any
merger, consolidation or reorganization of the Company with or into any other
corporation, all as though such successors and assigns of the Company and their
respective successors and assigns were the Company. This Agreement shall inure
to the benefit of and be binding upon the heirs, assigns or designees of the
Executive. The Executive shall be entitled to designate a beneficiary for the
payment of any Deferred Amounts to which the Executive is entitled under this
Agreement upon his death.
7. General. This Agreement shall be construed, interpreted
and enforced in accordance with the laws of the State of Delaware, without
giving effect to the choice of law principles thereof. This Agreement
constitutes the entire agreement between the Company and the Executive with
respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
THE COMPANY
/s/ XXXXX X. XXXXXXX
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By:
Xxxx Xxxxx Financial Corporation
THE EXECUTIVE
/s/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx
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