Exhibit 10.6
DEFERRED COMPENSATION AGREEMENT
THIS DEFERRED COMPENSATION AGREEMENT (the "Agreement") is made and
entered into on December 8, 1998 by and between LEUCADIA NATIONAL CORPORATION, a
New York corporation (the "Company"), and Xxxxxx X. Xxxxxxxxx (the "Executive"),
collectively the parties ("Parties").
WITNESSETH:
WHEREAS, Executive is employed by the Company as President; and
WHEREAS, in connection with the provision of services to the Company
in his capacity as President the Executive desires to defer the receipt of
certain compensation from the Company to which in the future he may become
entitled, and the Company agrees to do so, in accordance with the terms and
provisions herein contained;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the Parties hereby agree as follows:
1. Deferral of Payments.
The Company, commencing January 1, 1999 for the calendar year
ending December 31, 1999, shall defer the payment of all compensation to be paid
to the Executive by the Company attributable to services performed or to be
performed by the Executive for the Company at any time. Each deferred payment
shall accrue simple interest (on the basis of a 360-day year), from the first
day of the month immediately following the date on which payment otherwise would
have been made if no deferral had existed (the "First New Month Date") until the
date of actual payment, at a rate of interest equal to the 1-year Treasury xxxx
rate in effect at each First New Month Date, and the rate of interest shall be
reset on the first day of each subsequent quarter. For purposes hereof, the
quarters for calendar year 1999 shall begin January 1, April 1, July 1, and
October 1.
All amounts deferred pursuant to this Agreement, including interest, shall
be payable to the Executive in calendar year 2000 by no later than March 15th of
that year. Notwithstanding the preceding sentence, to the extent that the
aggregate deferred payments hereunder (including interest) exceed the maximum
annual amount deductible as compensation by the Company under applicable U.S.
federal
NYFS04...:\30\76830\0198\1651\AGRD018J.41B
tax laws, the Company may make such payments in two or more installments in
different taxable years to permit the Company to obtain the maximum annual
deduction available.
The Executive shall fully reimburse the Company for the dollar value
of any benefits provided by the Company to the Executive during calendar year
1999 which, in the absence of such reimbursement obligation, would be taxable as
compensation to the Executive if made available to him by the Company without
such obligation. Such benefits would include, without limitation, the personal
use by the Executive of a Company car, Company airplane, life insurance
premiums, etc. This reimbursement shall include an interest component equal to
the minimum rate permitted to avoid the imposition of any interest under Section
7872 of the Internal Revenue Code of 1986, as amended. Amounts to be reimbursed
to the Company under this paragraph shall be paid by Executive upon demand
therefor by the Company, which shall be made in 2000 as promptly as practicable
following availability of the Company's audited financial statements for the
fiscal year ended December 31, 1999.
The rights of the Executive to the payment of the amounts pursuant
to this Agreement shall be no greater than the rights of an unsecured general
creditor of the Company and may not be assigned, pledged or otherwise
transferred by him during his lifetime to any person, whether by operation of
law or otherwise, and shall not be subject to execution, attachment or similar
proceeding. By written notice delivered to the Company, the Executive may
designate (or change a prior designation of) one or more beneficiaries (or his
estate) to receive payment hereunder in the event of his death.
2. Withholding.
The Executive acknowledges and agrees that the Company shall
be entitled to withhold from his compensation all federal, state, local or other
taxes which the Company determines are required to be withheld on amounts
payable to the Executive pursuant to this Agreement or otherwise. The Executive
further agrees to indemnify the Company and hold it harmless from and against
any and all taxes (and penalties thereon) and interest with respect thereto
arising out of the Executive's failure to pay fully his tax liability pursuant
to any present or future law, regulation or ordinance of the United States of
America or any state, city or municipality therein.
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3. Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
4. Entire Agreement.
This Agreement constitutes the entire agreement between the
Parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, understandings and arrangements, both oral and written,
between the Parties hereto with respect to such subject matter. This Agreement
may not be modified in any manner, except by a written instrument signed by both
the Company and the Executive.
5. Notices.
Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered by hand or facsimile transmission or when deposited in the United
States mail by registered or certified mail, return receipt requested, postage
prepaid, as follows:
If to the Company: Leucadia National Corporation
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
with a copy to: Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
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If to Executive: Xxxxxx X. Xxxxxxxxx
c/o Leucadia National
Corporation
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other addresses as either the Company or the Executive may from time
to time specify to the other.
6. Notice of Termination; Applicability of Agreement.
Amounts deferred pursuant to this Agreement shall be paid to the
Executive only as provided herein. At any time, by notice in writing from the
Executive to the Company, the Executive may terminate this Agreement whereupon
any compensation earned by the Executive subsequent to such notification shall
not be subject to the provisions hereof. Amounts earned prior to any such
notification shall remain subject to the terms hereof even after such
termination.
7. Benefit; Binding Effect.
This Agreement shall be for the benefit of and binding upon the
Parties hereto and their respective heirs, personal representatives, legal
representatives, successors and, where applicable, assigns.
IN WITNESS WHEREOF, the Parties hereto have executed and delivered
this Agreement as of the day and year first above written.
LEUCADIA NATIONAL CORPORATION
By: /s/ Xxxxxx X. Orlando
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XXXXXX X. ORLANDO
/s/ Xxxxxx X. Xxxxxxxxx
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XXXXXX X. XXXXXXXXX
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