Exhibit 10(n)
OFFICER LOAN AGREEMENT
Loan Agreement between Farrel Corporation ("Farrel") and Xxxx X.
Xxxxxxxxxxxx ("Officer"), dated as of March 24, 2003 (the "Agreement").
WHEREAS, prior to July 30, 2002, Farrel from time-to-time permitted
Officer to make certain borrowings from Farrel (the "Officer Loan"); and
WHEREAS, as of January 1, 2002, the amount outstanding on the Officer Loan
was $165,176.44; and
WHEREAS, as a result of certain payments to Farrel by Officer, as of
January 1, 2003, the amount outstanding on the Officer Loan was $83,388.99; and
WHEREAS, Farrel and Officer wish to document the terms applicable to the
Officer Loan.
NOW, THEREFORE, Farrel and Officer agree as follows:
1. Interest on the any amounts due from Officer to Farrel as a result
of the Officer Loan shall accrue at a rate (the "Loan Interest
Rate") equal to the rate of interest earned by Farrel on funds
maintained in a money-market account (the "Bank Interest Rate"). The
Loan Interest Rate shall be adjusted quarterly to match the Bank
Interest Rate.
2. Interest shall accrue retroactive to January 1, 2003, and shall be
compound annually if not timely paid by Officer by January 31 of
each year.
3. To the extent Officer is entitled to receive dividends from Farrel
as a result of Officer's ownership of Farrel common stock, such
dividends, net of any taxes payable by Officer as a result of such
declaration of dividends (but limited to 25% of such net dividend
amount in 2003), shall be applied first to any outstanding balance
on the Officer Loan. Such amounts shall be applied first to reduce
accrued and unpaid interest and then to reduce any remaining
principal amounts due. This paragraph 4 shall not be deemed to xxxxx
Xxxxxx a security interest in any Farrel common stock owned or
controlled, directly or indirectly, by Officer and shall not limit
or proscribe Officer's right to sell or otherwise dispose of any
Farrel common stock.
4. To the extent Officer is entitled to receive any bonus payment from
Farrel, such bonus payment, net of any taxes payable by Officer as a
result of such bonus payment, shall be applied first to any
outstanding balance on the Officer Loan.
5. Nothing in this Agreement is intended to modify or alter any other
employment agreement or arrangement between Farrel and Officer.
6. To the extent not otherwise repaid as provided herein, the Officer
Loan and all accrued and unpaid interest thereon shall become due
and payable on the earlier of the date of Officer ceases to be an
employee of Farrel or three years from the date on which this
Agreement is executed.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and effective the day and year first written above.
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XXXX X. XXXXXXXXXXXX XXXXXX CORPORATION
/s/Xxxx X Xxxxxxxxxxxx By: /s/ Xxxxxx X Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx
Its: Chief Financial Officer
duly authorized and empowered
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