Exhibit 10.19
XXXXX CORPORATION
SUPPLEMENTAL PAYMENT AGREEMENT
FOR 2001 SERVICE AS DIRECTOR
This Supplemental Payment Agreement is entered into effective as of
March 9, 2001 between ______________ (the "Director") and Xxxxx Corporation, a
Delaware corporation with its principal offices at 000 Xxxxxxxx Xxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000 (the "Company").
1. REASON FOR SUPPLEMENTAL PAYMENTS. As part of the compensation to the
Director for his services as a member of the Board of Directors of the Company
(the "Board") in the year ending with the Company's Annual Meeting of
Stockholders following the close of the Company's 2001 fiscal year, the Company
hereby agrees to pay deferred incentive compensation in the form of the payments
as provided in this Agreement.
2. PHANTOM SHARES. Amounts payable under this Agreement ("Supplemental
Payments") shall be computed as if the Director had certain rights with respect
to 420.17 shares of the Company's Common Stock, par value $0.01 per share
("Common Stock"). For convenience, these shares are referred to herein as
"Phantom Shares." It is understood that the Phantom Shares are merely
bookkeeping entries used to compute Supplemental Payments to be paid to the
Director hereunder and do not constitute actual shares of Common Stock for any
purpose.
3. ADJUSTMENTS IN NUMBER OF PHANTOM SHARES. In the event that there is
after March 9, 2001 any change in the Common Stock through merger,
consolidation, reorganization or recapitalization or in the event of any stock
split or dividend to holders of such stock payable in stock of the same class or
the issuance to such holders of rights to subscribe to stock of the same class,
or in the event of any change in the capital structure of the Company, the
number of Phantom Shares allocated to the Director immediately prior thereto
shall be adjusted so that the Director shall have allocated to him a number of
Phantom Shares that bears the same relation to the number of shares of Common
Stock (or shares into which shares of Common Stock are converted, as the case
may be) outstanding immediately after the happening of any such event as
immediately before the happening of such event.
4. INTERIM PAYMENTS WITH RESPECT TO PHANTOM SHARE. So long as a final
payment pursuant to paragraph 5 ("Final Payment") has not been made with respect
to a Phantom Share, the Company shall pay to the Director from time to time with
respect to the Phantom Share an interim payment ("Interim Payment") equal to the
amount of the dividend in cash or property (but not shares of Common Stock) paid
per share to holders of shares of Common Stock. Each such Interim Payment shall
be paid at the same time as the payment of the dividend to which the Interim
Payment relates.
5. FINAL PAYMENT WITH RESPECT TO PHANTOM SHARES. The Company shall make
a Final Payment with respect to the Phantom Shares in the amount determined
under paragraph 6 and at the time determined under paragraph 7. Upon the payment
of the Final Payment calculated as provided in paragraph 6 with respect to a
Phantom Share, the Phantom Share shall be treated as terminated for all purposes
and the Director and his successors in interest shall have no further rights of
any kind with respect to the Phantom Share.
6. AMOUNT OF FINAL PAYMENT. The amount of the Final Payment with
respect to a Phantom Share shall equal the Applicable Value (as defined below)
of a share of Common Stock with respect to a date (the "Valuation Date") which
shall be either (a) the date that the Director ceases to serve as a member of
the Board for any reason other than resignation or (b) the date of the Company's
Annual Meeting of Stockholders that first occurs after the Director resigns as a
Director of the Company. The "Applicable Value" shall be the average, over the
20 trading days ending 5 trading days before the Valuation Date, of the daily
trading prices for shares of Common Stock as reported on the composite tape for
securities listed on the stock exchange on which the Common Stock is listed or
over the counter. However, if no sales of Common Stock were reported on said
composite tape for more than 3 days during the 20-trading-day period referred to
above, the Applicable Value shall be calculated using the average of the
reported trading prices on said composite tape for the most recent 7 trading
days before the Valuation Date on which trading in shares of Common Stock
occurred. In case there is more than one trading price on a day, the mean of the
high and low trading prices for the day shall be used as the daily trading price
for calculations under this paragraph.
7. TIME FOR FINAL PAYMENT. The Final Payment with respect to all
Phantom Shares of the Director shall be made by check, in the amount per Phantom
Share determined under paragraph 6, within 40 days after the Valuation Date.
8. AUTHORITY OF BOARD TO ADMINISTER AND INTERPRET AGREEMENT. The Board
(or a committee designated by the Board) shall have complete authority to
construe, interpret and administer this Agreement. The determination,
interpretation and construction made by the Board or the committee designated by
the Board with respect to any aspect of this Agreement shall be final and
conclusive.
9. RIGHT OF COMPANY TO MAKE FINAL PAYMENTS TO TERMINATE PHANTOM SHARES
IN CERTAIN CIRCUMSTANCES. Notwithstanding any other provision of this Agreement,
the Company shall have the right to terminate the Phantom Shares held by the
Director by making a Final Payment with respect to the remaining Phantom Shares
if (i) at any time the Board determines, in its reasonable judgment, that a
termination of the Phantom Shares is necessary or desirable in order for the
Company to comply appropriately with applicable government regulations or in
order to facilitate a transaction (other than simply the termination of the
Phantom Shares) that the Board determines to be in the best interest of the
Company or (ii) the Common Stock permanently ceases to be traded on a national
exchange or over the counter. The amount paid per Phantom Share pursuant to this
paragraph 9 shall be computed as provided in paragraph 6 using as the Valuation
Date the date of the Board determination (in the case of the circumstance listed
in (i) of the preceding sentence) or the date that trading in the Common Stock
permanently ceases (in the case of the circumstance listed in (ii) of the
preceding sentence). Any payment pursuant to this paragraph 9 shall be made
within 40 days after the Valuation Date determined in accord with the preceding
sentence.
10. BENEFIT OF THE AGREEMENT. This Agreement shall be binding upon, and
inure to the benefit of and be enforceable by, the Director and the Director's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees, and legatees and the Company and its successors in
interest.
11. RIGHTS NOT TRANSFERABLE. The interest of the Director or his
beneficiary under this Agreement is not subject to the claims of creditors and
may not be voluntarily or involuntarily sold, transferred, assigned, alienated
or encumbered.
12. BENEFICIARIES; PAYMENTS TO INCOMPETENTS. If the Director dies
before receiving all amounts due hereunder, the unpaid amount shall be paid to
the beneficiary designated by the Director. No beneficiary designation shall be
valid unless it is in writing, signed by the Director, dated and filed with the
Company prior to death. Any beneficiary designation may be revoked and a new
designation may be made, as long as the new designation is in writing, signed by
the Director, dated and filed with the Company prior to death. If no beneficiary
has been designated under this Agreement, or there is no surviving designated
beneficiary or contingent beneficiary, any unpaid amounts will be paid to the
Director's estate as soon as administratively possible. Any amounts payable
hereunder to any person under legal disability or who, in the judgment of the
Board (or a committee designated by the Board), is unable to properly manage his
financial affairs may be paid to the legal representative of such person or may
be applied for the benefit of such person in any manner that the Board or the
committee designated by the Board may select.
13. ENTIRE AGREEMENT. This Agreement constitutes and expresses the
whole agreement of the parties in reference to deferred compensation payments to
the Director for services as a member of the Board for the period ending with
the Company's Annual Meeting of Stockholders following the close of the
Company's 2001 fiscal year.
14. AMENDMENTS. This Agreement may not be amended, modified, or
supplemented except by a writing signed by both of the parties hereto which
expressly refers to this paragraph 14.
15. EFFECT OF INVALID TERM. If any term, provision, covenant, or remedy
of this Agreement or the application thereof to any person or circumstances
shall, to any extent, be construed to be invalid or unenforceable in whole or in
part, then such term, provision, covenant, or remedy shall be construed in a
manner so as to permit its enforceability under the applicable law and to
accomplish its intent to the fullest extent permitted by law. In any such case,
the remaining provisions of this Agreement, other than those which have been
held invalid or unenforceable, shall remain in full force and effect.
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16. AGREEMENT DOES NOT CREATE PROPERTY RIGHTS. Amounts payable under
this Agreement shall be unfunded. Any liability of the Company to the Director
with respect to this Agreement shall be based solely upon the contractual
obligations created by this Agreement and no such obligation of the Company
shall be deemed to be secured by any pledge or other encumbrance on any property
of the Company. Although accounts may be established with respect to the rights
of the Director under this Agreement, any such accounts shall be used merely as
a bookkeeping convenience. The Company shall not be required to segregate any
assets that may at any time be represented by cash, shares of Common Stock or
rights thereto, nor shall this Agreement be construed as providing for such
segregation, nor shall the Company be deemed to be a trustee of any cash, shares
of Common Stock or property under this Agreement. The Company shall not be
required at any time to provide any reports (other than as required for purposes
of income tax or securities law reporting purposes) or to give any security or
bond for the performance of any obligation that may be created by this
Agreement. Nothing contained in this Agreement, and no action taken pursuant to
its provisions, shall create or be construed to create a trust or a fiduciary
relationship of any kind between the Company and the Director or any other
person. Neither the Director nor any successor in interest shall acquire any
interest in any assets of the Company or in any investment reserves, accounts,
or funds that the Company may purchase, establish or accumulate for the purpose
of paying benefits hereunder.
17. NO RIGHTS TO CONTINUE TO SERVE AS DIRECTOR OR TO BE STOCKHOLDER.
The Director recognizes that this Agreement constitutes only an unsecured
promise by the Company to make future cash payments in certain circumstances and
that the Agreement confers no right for the Director to continue to serve as a
member of the Board or in any other capacity for the Company and confers no
rights as a stockholder in the Company.
18. TAX MATTERS. The Company shall withhold any amounts from payments
made to the Director under this Agreement and deduct such amounts from income as
the Company determines to be necessary or desirable to ensure compliance with
applicable federal, state and local tax laws and to ensure that the Company may
properly deduct under applicable federal, state and local tax laws all amounts
paid pursuant to this Agreement.
19. RELATIONSHIP OF AGREEMENT TO OTHER PLANS. No amount payable
hereunder shall be deemed compensation to the Director for the purpose of
computing benefits to which the Director may be entitled under any other
compensation agreement or arrangement or any benefit plan or arrangement of the
Company.
20. COOPERATION IN COMPLIANCE WITH LEGAL REQUIREMENTS. The Company and
the Director each agree to file such reports with applicable governmental
authorities and to supply such information to the other party as may be
reasonably necessary to comply with or obtain the benefit of government
regulations that may apply to or with respect to the rights of and payments to
the Director under this Agreement.
21. EFFECT OF HEADINGS. The paragraph headings of this Agreement are
not part of this Agreement and shall have no effect upon its construction or
interpretation.
22. TEXAS LAW APPLICABLE. THIS AGREEMENT SHALL BE DEEMED TO BE MADE
UNDER AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
IN WITNESS WHEREOF, the parties have signed and sealed this Agreement
as of the 9th day of March 2001.
XXXXX CORPORATION
By
Xxxxxxx X. Xxxxxxx
President
[Name]
Director
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