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EXHIBIT 15
EXECUTIVE SUPPLEMENTAL BENEFIT AGREEMENT
THIS AGREEMENT, made and entered into this 30th day of May, 1988, by and
between Elco Industries, Inc., a corporation organized and existing under the
laws of the State of Delaware hereinafter called the Corporation, and August X.
XxXxxx, hereinafter called the Executive.
WITNESSETH:
WHEREAS, the Executive is serving the Corporation as its Chief Financial
Officer; and
WHEREAS, the Corporation desires to provide Executive with a supplemental
benefit subject to all of the terms and conditions set forth below.
NOW THEREFORE, in consideration of services performed in the past and to be
performed in the future as well as of the mutual promises and covenants herein
contained, it is agreed as follows:
ARTICLE I
1.1 Supplemental Benefit. If the Executive shall continue in the employment
of the Corporation until he attains the age of sixty-five (65), the date of such
occurrence is hereby established to be 10/10/2008 for purposes hereof (the
"Benefit Date"), and he retires from active daily employment no later than the
first day of the month next following the Benefit Date, then the Corporation
agrees that it will pay to the Executive the sum of Twenty-One Thousand Six
Hundred ($21,600.00) Dollars on the first day of the second month following the
Benefit Date and on each of the successive fourteen anniversary dates of the
date of such first payment, until he has received a total of fifteen (15)
payments of such amount. The aggregate amount of such fifteen (15) payments is
hereinafter referred to as the "Supplemental Benefit." The timing of the
payments of the Supplemental Benefit may be accelerated by the Board of
Directors in its sole discretion. In the event of retirement at any earlier or
later time, no benefit shall be payable except in such amount and upon such
terms as may be determined by the Board of Directors of the Corporation ("Board
of Directors") in its sole discretion. In the event that the Executive so
retires, but dies before receiving the entire Supplemental Benefit, then the
remaining payments shall be made in accordance with the foregoing schedule to
such individual or individuals as the Executive may have designated in writing,
filed with and been approved by the Corporation. In the absence of any effective
designation of
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beneficiary, any such remaining amounts shall be payable to the Executive's duly
qualified executor or administrator.
ARTICLE II
2.1 Death Prior to Benefit Date. In the event the Executive should die
while actively employed by the Corporation at any time after the date of this
Agreement but prior to the Benefit Date, the Corporation will pay the
Supplemental Benefit to such individual or individuals as the Executive may have
designated in writing, filed with and been approved by the Corporation. Payment
of the Supplemental Benefit shall be made in accordance with the schedule
provided in Section 1.1 except that the date of the Executive's death shall be
substituted for the Benefit Date. In the absence of any effective designation of
beneficiary, any such remaining amounts shall be payable to the Executive's duly
qualified executor or administrator.
ARTICLE III
3.1 Disability Prior to Benefit Date. In the event that during the period
of active daily employment prior to termination of his employment with the
Corporation, the Executive shall become permanently and totally disabled,
mentally or physically, which disability renders him unable to perform his
duties as determined by the Board of Directors in its sole discretion, the
Corporation will pay the Supplemental Benefit to the Executive or his legal
representative in accordance with the schedule provided in Section 1.1 except
that the date of disability as so determined by the Board of Directors shall be
substituted for the Benefit Date. In the event that the Executive becomes
disabled within the terms of this section, but dies before receiving the entire
Supplemental Benefit, then the remaining payments shall be made in accordance
with the foregoing schedule to such individual or individuals as the Executive
may have designated in writing, filed with and been approved by the Corporation.
In the absence of any effective designation of beneficiary, any such remaining
amounts shall be payable to his duly qualified executor or administrator.
ARTICLE IV
4.1 Voluntary Termination of Service or Discharge. In the event that the
Executive shall voluntarily terminate his employment with the Corporation or be
discharged by the Corporation with or without cause, this Agreement shall
terminate upon the date of voluntary termination of employment or discharge and
no benefits or payments of any kind are to be made hereunder, except as provided
under Section 8.1.
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4.2 Other Termination of Benefits. The Corporation reserves the right to
terminate this Agreement at any time in the sole discretion of the Board of
Directors. In the event that Executive is actively employed by the Corporation
at the time of such termination, he shall be entitled to the cash surrender
value of any insurance policy obtained pursuant to Article VII and then in
effect. The amount of such cash surrender value and the timing and other terms
of payment thereof to Executive shall be determined by the Board of Directors in
its sole discretion provided that in the event that full payment is deferred
more that 30 days after such termination the Corporation shall pay Executive
interest compounded annually from the date of termination on the unpaid balance
at a floating rate equal to the prime rate as then announced from time to time
by The First National Bank of Chicago. Full payment of the cash surrender shall
be made no later than three years after such termination.
ARTICLE V
5.1 Alienability. Neither the Executive, his widow, nor any other
beneficiary under this Agreement shall have any power or right to transfer,
assign, anticipate, hypothecate, mortgage, commute, modify, or otherwise
encumber in advance any of the benefits payable hereunder, nor shall any of said
benefits be subject to seizure for the payment of any debts, judgments, alimony
or separate maintenance, owned by the Executive or his beneficiary or any of
them, or be transferable by operation of law in the event of bankruptcy,
insolvency, or otherwise. In the event the Executive or any beneficiary attempts
assignment, commutation, hypothecation, transfer, or disposal of the benefit
hereunder the Corporation's liabilities shall forthwith cease and terminate.
ARTICLE VI
6.1 Participation in Other Plans. Nothing contained in this Agreement shall
be construed to alter, abridge, or in any manner affect the rights and
privileges of the Executive to participate in and be covered by any pension,
profit-sharing, group insurance, bonus stock or similar employee plans which the
Corporation may now or hereafter have.
ARTICLE VII
7.1 Insurance Policies. The Corporation reserves the right in its sole
discretion to purchase an insurance policy or policies relating to the Executive
to allow the Corporation to recover the costs of providing the benefits
hereunder, in whole or in part. Should the Corporation elect to purchase such an
insurance policy or policies, the Corporation shall be the owner and beneficiary
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thereof. The Corporation reserves the absolute right, in its sole discretion, to
terminate any such policy or policies, at any time, either in whole or in part.
At no time shall the Executive be deemed to have any right, title, or interest
in or to any specified asset or assets of the Corporation, including, but not by
way of restriction, any such insurance policy or policies or the proceeds
therefrom.
Any such policy shall not in any way be considered to be security for the
performance of the obligations of this Agreement. It shall be, and remain, a
general, unpledged, unrestricted asset of the Corporation.
If the Corporation purchases a life insurance or annuity policy on the life
of the Executive, he agrees to sign any papers that may be required for that
purpose and to undergo any medical examination or tests which may be necessary.
7.2 This Article shall not be construed as giving the Executive or his
beneficiary any greater rights than those of any other unsecured creditor of the
Corporation.
ARTICLE VIII
8.1 Change of Control. In the event of any change of control of the
Corporation while the Executive is actively employed by the Corporation, then
notwithstanding any provision in this Agreement to the contrary, the Corporation
shall pay the Supplemental Benefit to Executive in the event of (i) termination
of his employment with the Corporation, (ii) discharge by the Corporation, or
(iii) such other event as would require payment hereunder, whichever is
earliest. Payment of the Supplemental Benefit shall be made in accordance with
the schedule provided in Section 1.1 except that the date of such earliest event
shall be substituted for the Benefit Date. In the event that the Executive
becomes so entitled to the Supplemental Benefit but dies before receiving the
entire amount thereof, then the remaining payments shall be made in accordance
with the foregoing schedule to such individual or individuals as the Executive
may have designated in writing, filed with and been approved by the Corporation.
In the absence of any effective designation of beneficiary, any such remaining
amounts shall be payable to the Executive's duly qualified executor or
administrator. For purposes of this Article, "change of control" shall mean the
acquisition by any person or group of persons of direct or indirect control or
beneficial ownership of 30% or more of the common stock $5.00 par value, of the
Corporation.
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ARTICLE IX
9.1 Named Fiduciary. The Corporation is hereby designated as the named
fiduciary under this Agreement. The named fiduciary shall have authority to
control and manage the operation and administration of this Agreement and to
employ or designate any person or organization to advise or perform services
with respect to the Corporation's responsibilities under this Agreement and to
allocate to such person or organization all, or part of, the responsibility for
the operation and administration of this Agreement.
ARTICLE X
10.1 Benefits and Burdens. This Agreement shall be binding upon and inure
to the benefit of the Executive and his personal representatives, and the
Corporation, and any successor organization which shall succeed to substantially
all of its assets and business.
ARTICLE XI
11.1 Amendment. This Agreement shall not be amended, altered or modified
except by written agreement signed by the parties hereto, or their respective
successors or permitted assigns.
ARTICLE XII
12.1 Communications. Any notice or communication required of either party
with respect to this Agreement shall be made in writing and may either be
delivered personally or sent by first class mail to:
If to the Company:
Elco Industries, Inc.
0000 Xxxxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxx 00000
If to the Executive:
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Each party shall have the right by written notice to change the place to which
any notice may be addressed.
ARTICLE XIII
13.1 Not a Contract of Employment. This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Corporation to discharge the
Executive, or restrict the right of the Executive to terminate his employment.
13.2 Not in Lieu of Other Compensation. The salary continuation benefits
provided by this Agreement are granted by the Corporation as a fringe benefit to
the Executive and are not part of any salary reduction plan or an arrangement
deferring a bonus or a salary increase. The Executive has no option to take any
current payment or bonus in lieu of these salary continuation benefits.
ARTICLE XIV
14.1 Claims Procedure. If an Executive or the Executive's beneficiary
fails to receive benefits to which such Executive or beneficiary feels entitled
under this Plan, such Executive or beneficiary shall submit a claim for such
benefits in writing to the Corporation within 60 days of the date the Executive
or beneficiary would have received such benefits if so entitled. Such claim
shall be reviewed by the Corporation. If the claim is denied, in full or in
part, the Corporation shall provide a written notice in a manner calculated to
be understood by the claimant within 90 days setting forth the specific reasons
for denial, specific reference to the provisions of this Agreement upon which
the denial is based, and any additional material or information necessary to
perfect the claim, if any, and an explanation of why such material or
information is necessary. Also, such written notice shall indicate the steps to
be taken if a review of the denial is desired.
If a claim is denied in full or in part and a review is desired, the
Executive or his beneficiary shall so notify the Corporation in writing within
60 days after receiving a denial of claim and a claim shall be deemed denied if
the Corporation does not take any action within the aforesaid 90-day period. In
requesting a review, the Executive or his beneficiary may review this Plan
Agreement or any documents relating to it and submit any written issues and
comments he or she may feel appropriate. In its sole discretion, the Corporation
shall then review the claim and provide a written decision within 60 days after
receipt of the request for review unless special circumstances require an
extension of time for processing in which case a decision shall be rendered as
soon as possible, but no later than 120 days after
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receipt of a request for review. This decision shall state the specific reasons
for the decision and shall include reference to specific provisions of this Plan
Agreement on which the decision is based and be written in a manner calculated
to be understood by the claimant.
ARTICLE XV
15.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws (other than the conflict of laws rules) of the State of
Illinois.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be duly
executed and the Executive has hereunto set his hand and seal at Rockford (town
& state) Illinois the day and year first above written.
ELCO INDUSTRIES, INC.
By: /s/ X. X. Xxxxx, V.P.
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/s/ August X. XxXxxx
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Executive
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DESIGNATION OF BENEFICIARY
Pursuant to the terms of an Executive Supplemental Benefit Agreement dated
May 30, 1988, between myself and Elco Industries, Inc., I hereby designate the
following beneficiary(ies) to receive any payments which may be due under such
Agreement after my death:
Primary Beneficiary August X. XxXxxx Trust, dated 10/7/82
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Secondary Beneficiary(ies) ----------------------------------------------------
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The Primary Beneficiary named above shall be the designated beneficiary
referred to in Article II of said Agreement if he or she is living at the time a
death benefit payment thereunder becomes due and payable, and the Secondary
Beneficiary named above shall be the designated beneficiary referred to in
Article II of said Agreement only if he or she is living at the time a death
benefit payment becomes payable and the Primary Beneficiary is not then living.
This designation hereby revokes any prior designation which may have been
in effect.
Date: May 30, 1988
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X. X. Xxxxx /s/ August X. XxXxxx
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(Witness) (Executive)
Acknowledged By: X. X. Xxxxx V.P.
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(Corporation Officer) (Title)
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AMENDMENT NUMBER ONE
TO THE
EXECUTIVE SUPPLEMENTAL BENEFIT AGREEMENT
Elco Industries, Inc. ("Corporation") entered into the Executive
Supplemental Benefit Agreement ("Agreement") with August X. Xxxxxx ("Executive")
on May 30, 1988 . The parties to the Agreement hereby amend the Agreement as
provided under Section 11.1 as follows:
1. This amendment shall be known as Amendment Number One.
2. The introductory material following the term "Witnesseth" shall be
amended in its entirety to read as follows:
WHEREAS, the Executive is serving the Corporation as its Chief
Financial Officer ; and
WHEREAS, the Corporation desires to provide the Executive with a
supplemental benefit subject to all of the terms and conditions set
forth below; and
WHEREAS, the Corporation has determined the amount of such
supplemental benefit based on the assumption that the Executive will
have completed 25 years of service with the Corporation at the
Executive's retirement.
NOW THEREFORE, in consideration of services performed in the past
and to be performed in the future as well as of the mutual promises
and covenants herein contained, it is agreed as follows:
3. Section 8.1 of Article VIII shall be amended in its entirety to read as
follows:
(a) In the event of any change of control of the Corporation while the
Executive is actively employed by the Corporation, then
notwithstanding any provision in this Agreement to the contrary, the
Corporation shall make a lump sum distribution, calculated as provided
below, to the Executive upon the occurrence of the earliest of the
following events: (i) the Executive's voluntary termination of
employment with the Corporation, (ii) the Executive's discharge by the
Corporation,
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Amendment Number One
Executive Supplemental Benefit Agreement
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or (iii) such other event as would require payment hereunder ("Benefit
Date"). The amount of the lump-sum distribution shall be the present
value of the fifteen (15) annual payments provided for in Section 1.1,
determined as of the Benefit Date, using as a discount rate the yield
on U.S. Treasury Bonds with a maturity date that is approximately
fifteen (15) years after the Benefit Date as reported in the Wall
Street Journal or other similar financial publication on the business
day coinciding with or next preceding the Benefit Date. Such
distribution shall be made to the Executive within fourteen (14) days
of the Benefit Date. If the executive dies after becoming entitled to
such lump-sum distribution, but before the distribution is made, such
distribution shall be made to such individual or individuals as the
Executive may have designated in writing, filed with and approved by
the Corporation. In the absence of an effective designation of
beneficiary, any such distribution shall be payable to the Executive's
duly qualified executor or administrator. For purposes of this
Article, "change of control" shall mean the acquisition by any person
or group of persons of direct or indirect control or beneficial
ownership of 30% or more of the common stock $5.00 par value, of the
Corporation.
(b) If the Executive's employment is terminated after a change of
control, with or without cause, for any reason other than death or on
or after the Executive attains age sixty-five (65), then, during the
three-year period after such termination, the Executive shall be
included to the extent eligible thereunder in any and all then
existing plans providing general benefits of the Corporation's
employees, including but not limited to, group life, hospitalization,
disability, medical and dental insurance at the expense of the
Corporation, or if such termination renders the Executive ineligible
to participate in any group plan, the Corporation will purchase such
individual insurance policies or other plans providing benefits at
least as favorable to the Executive as those provided prior to the
termination.
4. Except as hereby amended, the Agreement shall remain in full force and
effect.
DATE: May 30 , 1988 ELCO INDUSTRIES, INC.
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By /s/ X X Xxxxx, V.P.
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Vice President
/s/ August X. XxXxxx
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Executive
