DEFERRED COMPENSATION CONTRACT
AGREEMENT entered into as of July 15, 1993, between THE
XXXXXX-XXXXX CORPORATION, a New York corporation having its
principal place of business at Norwalk, Connecticut (hereinafter
referred to as the "Company") and Xxxxxxx X. Xxxxx, of 000 Xxxxx
Xxxxx Xxxx, Xxxxxx, Xxxxxxxxxxx 00000 (hereinafter referred to
as the "Employee").
WHEREAS, the Employee has rendered valuable service to the
Company, and it is regarded as essential by the Company that it
shall have the benefit of his services during future years, and
WHEREAS, it is the desire of the Company to assist the
Employee in providing for the contingencies of death and old age
dependency, and
WHEREAS, it appears desirable to provide for retirement at
an age prior to the current normal retirement age of 65 years in
appropriate cases so as to facilitate an orderly succession in
senior management positions of the Company.
NOW, THEREFORE, it is hereby mutually agreed as follows:
(1) Should the Employee still be in the employ of the
Company at age 65, the Company (beginning on a date to be
determined by the Company but within 6 months from the Employee's
retirement date) will pay him $25,000 each year for a continuous
period of 10 years. Payment of this amount shall be made in
quarterly installments on the first day of the fiscal quarters of
the Company.
Should the Employee be in the employ of the Company at age
65 and thereafter die before the entire said 10 annual payments
have been paid, the unpaid balance of the 10 annual payments will
continue to be paid by the Company to that person designated by
the Employee in a written notice of election as the Employee's
beneficiary hereunder (hereinafter referred to as the
"Beneficiary"). The Employee may change such designation at any
time by giving the Company written notice of such intent; and
such change shall become effective only upon being received and
acknowledged by the Company.
If the Beneficiary shall die after receiving benefits under
this Agreement and further payments are payable, such further
payments shall be paid to the estate of the Beneficiary. If the
Employee shall survive the Beneficiary without designating
another Beneficiary, any payments hereunder shall be paid to the
estate of the Employee.
The Employee may elect in writing at any time prior to his
normal retirement date one of the following optional forms of
payment in lieu of the normal form of payment set forth above,
with the annual value of such optional form of payment being
actuarially reduced from such normal form of payment; provided,
however, that such optional forms of payment are not available to
an Employee in the event he dies or terminates his employment and
is covered by Paragraphs (2), (4), (5), or (6) of this Agreement:
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Option 1. Reduced annual payments payable during his life with
the provision that if he shall not survive a period of ten years,
such reduced annual payments shall continue to be paid after the
death of the Employee and during the remainder of such ten-year
period to the Beneficiary.
Option 2. Reduced annual payments payable during his life, with
the provision that after his death such reduced annual payments
shall continue during the life of, and shall be paid to the
Beneficiary (provided the Beneficiary survives the Employee).
Option 3. Reduced annual payments payable during his life, with
the provision that after his death annual payments equal to 50%
of such reduced annual payments shall continue during the life
of, and shall be paid to, the Beneficiary (provided the
Beneficiary survives the Employee).
Option 4. Reduced annual payments payable to the Employee during
his life.
Notwithstanding any contrary provisions herein, the Employee
may not change his Beneficiary in Options 2 and 3, above, after
the Employee has begun to receive payments hereunder.
(2) Should the Employee die before age 65 while in the
employ of the Company, the Company (beginning on a date to be
determined by the Company but within 6 months from the date of
death) will pay the Beneficiary $25,000 each year for a
continuous period of 10 years. Payment of this amount shall be
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made in quarterly installments on the first day of the fiscal
quarters of the Company.
(3) If the Employee shall retire on or after age 60 and
before age 65, with the written consent or at the request of the
Company, payments will be made by the Company in the amount and
in the manner provided in Paragraph (1) to commence within 6
months of the date of retirement.
(4) Should the Employee's employment be terminated at
any time after the date hereof and prior to his attaining age 60,
with the written consent or by the act of the Company, the
Company will make payments in the manner provided in Paragraph
(1) to commence when the Employee attains age 60 or the date of
his prior death in an amount determined by multiplying the
benefit set forth in Paragraph (1) by a fraction, the numerator
of which shall be the number of whole months or major part
thereof from the date hereof to the date of termination of
employment, and the denominator of which shall be the number of
whole months or major part thereof from the date hereof to the
date he attains age 60.
(5) Unless the Company shall consent in writing, the
Employee, if his employment be terminated other than by death or
disability or as provided in Paragraphs (3) or (4) prior to his
attaining age 65, shall forfeit all right to benefits hereunder
and the Company shall have no liability for any payment to the
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Employee or the Beneficiary.
Notwithstanding any other provision of this Agreement, if
within three years of a Change in Control the employment of the
Employee is terminated by the Employee for Good Reason or by the
Company without Cause, then the Company will pay Employee the
amount referred to in Paragraph (1) of this Agreement within 60
days of such termination of employment. For purposes hereof:
(a) A "Change in Control" shall have occurred if (i) any
"person" within the meaning of Section 14 (d) of the Securities
Exchange Act of 1934 becomes the "beneficial owner" as defined in
Rule 13d-3 thereunder, directly or indirectly, of more than 25%
of the Company's Common Stock, (ii) any "person" acquires by
proxy or otherwise, other than pursuant to solicitations by the
Incumbent Board (as hereinafter defined), the right to vote more
than 35% of the Company's Common Stock for the election of
directors, for any merger or consolidation of the Company or for
any other matter or question, (iii) during any two-year period,
individuals who constitute the Board of Directors of the Company
(the "Incumbent Board") as of the beginning of the period cease
for any reason to constitute at least a majority thereof,
provided that any person becoming a director during such period
whose election or nomination for election by the Company's
stockholders was approved by a vote of at least three-quarters
of the Incumbent Board (either by a specific vote or by approval
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of the proxy statement of the Company in which such person is
named as a nominee for director without objection to such
nomination) shall be, for purposes of this clause (iii),
considered as though such person were a member of the Incumbent
Board, or (iv) the Company's Stockholders approve the sale of all
or substantially all of the assets of the Company.
(b) Termination by the Company of the employment of the
Employee for "Cause" shall mean termination upon (i) the willful
and continued failure by the Employee to perform substantially his
duties with the Company (other than any such failure resulting
from the Employee's incapacity due to physical or mental illness)
after a demand for substantial performance is delivered to the
employee by the Chairman of the Board or President of the Company
which specifically identifies the manner in which such executive
believes that the Employee has not substantially performed his
duties, or (ii) the willful engaging by the Employee in illegal
conduct which is materially and demonstrably injurious to the
Company. For purposes of this subparagraph (b), no act or failure
to act on the part of the Employee shall be considered "willful"
unless done, or omitted to be done, by the Employee in bad faith
and without reasonable belief that the Employee's action or
omission was in, or not opposed to, the best interests of the
Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or based upon
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the advice of counsel for the Company shall conclusively presumed
to be done, or omitted to be done, by the Employee in good faith
and in the best interests of the Company. Notwithstanding the
foregoing, the Employee shall not be deemed to have been
terminated for Cause unless and until there shall have been
delivered to the Employee a copy of a resolution, duly adopted by
the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called
and held for that purpose (after reasonable notice to the
employee and an opportunity for him, together with his counsel,
to be heard before the Board), finding that in the good faith
opinion of the Board the Employee was guilty of the conduct set
forth in sections (i) or (ii) of this subparagraph (b) and
specifying the particulars thereof in detail.
(c) Termination by the employee of employment for "Good
Reason" shall mean termination based on:
(i) an adverse change in the status of the Employee (other
than any such change primary attributable to the fact that the
Company may no longer be publicly owned) or the Employee's
position(s) as an officer of the Company as in effect immediately
prior to the Change in Control, or the assignment to the Employee
of any duties or responsibilities which, in his reasonable
judgment, are inconsistent with such status or position(s), or
any removal of the Employee from, or any failure to reappoint
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or reelect him to, such position(s) (except in connection with
the termination of the Employee's employment for Cause, total
disability, or retirement on or after attaining age 65 or as a
result of death or by the Employee other than for Good Reason);
(ii) a reduction by the Company in the Employee's base
salary as in effect immediately prior to the Change in Control;
(iii) a material reduction in the Employee's total annual
compensation; a reduction for any year of over 10% of total
compensation measured by the preceding year without a
substantially similar reduction to other executives shall be
considered "material"; provided, however, the failure of the
Company to adopt or renew a stock option plan or to grant stock
options to the Employee shall not be considered a reduction; and
(iv) the Company's requiring the employee to be more than
fifty miles from Norwalk, Connecticut, except for required travel
on the Company's business to an extent substantially consistent
with the business travel obligations which he undertook on behalf
of the Company prior to the Change in Control.
(6) In the event the Employee shall become disabled so that
he is unable to perform his duties as an employee and so that he
is entitled to benefits under a long range disability insurance
program made available by the Company, or so that he would have
been eligible for such benefits had he elected to insure himself
thereunder, the Company will make payments as provided in
Paragraph (1) above to commence at age 65.
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In the event the Employee should die at any time after
becoming disabled and before attaining age 65, payments as
provided in this Paragraph (6) will be made to the Beneficiary
commencing as of the date of the Employee's death.
(7) The Company has or may procure a policy or policies of
life insurance upon the life of the Employee to aid it in meeting
its obligations under this Agreement. It is understood, however,
that such policy or policies held by the Company and the proceeds
therefrom shall be treated as the general assets of the Company;
that they shall in no way represent any vested, secured, or
preferred interest of the Employee or his beneficiaries under
this Agreement; and that the Company shall be under no obligation
either to procure or to continue life insurance in force upon the
life of the Employee.
The employee hereby agrees that he already has or will
submit to a physical examination and answer truthfully and
completely without mental reservation or concealment any question
or request for information by any insurance company in connection
with the issuance of any policy procured by the Company under
this Paragraph. (7). In the event the Employee fails to do soor
in the event the Employee dies by suicide, and the liability of
the insurer under such policy is restricted as a result of such
failure or suicide, then the Company shall thereby be released
from all of its obligations under Paragraph (2) above.
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(8) If the Company shall procure any policy or policies of
life insurance in accordance with Paragraph (7) above and shall
have the option of including in any such policy an accidental
death or so-called "double indemnity" provision, the Company will
so advise the Employee and, if the Employee requests and agrees
to pay any additional premium resulting therefrom, will include
in the policy such accidental death or double indemnity
provisions as may be available and will further provide or cause
to be provided that any benefit payable under or by reason of
such provisions shall be paid as a death benefit to the
beneficiary designated by the Employee hereunder; provided that
in the event the Employee shall cease to pay such additional
premium the Company may cancel any accidental death or double
indemnity provision; and further provided that the inclusion of
such a provision shall in no way affect the Company's right to
cancel or otherwise dispose of the policy, even though such
action may have the effect of terminating such provision.
(9) If during a period of 10 years from the termination of
his employment with the Company the Employee shall: engage in a
business competitive with any business activity engaged in by the
Company at any time while he was employed; enter into the service
of any organization so engaged in such business (or any
subsidiary or affiliate of such an organization); or personally
engage in or enter the service of any organization that is
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engaged in consulting work or research or development or
engineering activities for any organization so engaged in
such business (or any subsidiary or affiliate of such an
organization), then any liability of the Company to make any
further payments hereunder shall cease. The investment of funds
by the Employee in securities of a corporation listed on a
recognized stock exchange shall not be considered to be a breach
of this Paragraph.
(10) The Company may in its sole discretion grant the
Employee a leave of absence for a period not to exceed one year
during which time the Employee will be considered to be still in
the employ of the Company for the purposes of this Agreement.
(11) The Company in its sole discretion and without the
consent of the Employee, his estate, his beneficiaries, or any
other person claiming through or under him, may commute any
payments which are due hereunder at the rate of 4% per annum to a
lump sum and pay such lump sum to the Employee or to the
beneficiary or beneficiaries entitled to receive payment at the
date of commutation, and such payment shall be a full discharge
of the Company's liabilities hereunder. The Company may also in
its sole discretion and without the consent of any other person
accelerate the payment of any of the sums payable hereunder.
(12) The right to receive payments under this Agreement
shall not be assignable or subject to anticipation, nor shall
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such right be subject to garnishment, attachment, or any other
legal process of creditors of the Employee or of any person or
persons designated as beneficiaries hereunder except to the
extent that this provision may be contrary to law.
(13) This Agreement creates no rights in the Employee to
continue in the employ of the Company for any length of time nor
does it create any rights in the Employee or obligations on the
part of the Company other than those set forth herein.
(14) If the Company, or any corporation surviving or
resulting from any merger or consolidation to which the Company
may be a party or to which substantially all the assets of the
Company shall be sold or otherwise transferred, shall at any time
be merged or consolidated with or into any other corporation or
corporations or shall otherwise transfer substantially all its
assets to another corporation, the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the
corporation surviving or resulting from such merger or
consolidation or to which such assets shall be so sold or
otherwise transferred. Except as herein provided, this Agreement
shall not be assignable by the Company or the Employee.
This Agreement is solely between the Company and the
Employee. The Employee and his beneficiaries shall have recourse
only against the Company for enforcement, and the Agreement shall
be binding upon the beneficiaries, heirs, executors, and
administrators of the Employee and upon the successors and
assigns of the Company.
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This Agreement has been made, executed, and delivered in the
State of Connecticut; and shall be governed in accordance with
the laws thereof.
IN WITNESS WHEREOF, the parties hereto have set their hands
and affixed the seal of the Corporation as of the date first
written above.
THE XXXXXX-XXXXX CORPORATION
By: /s/ Gaynor N. Xxxxxx
Xxxxxx X. Xxxxxx
Chairman and Chief Executive
Officer
ATTEST: /s/ Xxxxxxx X. Xxxxxxx
By:
ACCEPTED AND AGREED:
By /s/ X.X. Xxxxx
(B)
kec/208/1
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I hereby designate the estate of Xx X. Xxxxx
, my , as beneficiary under my Deferred
Compensation Contract between The Xxxxxx-Xxxxx Corporation and
myself.
/s/ X.X. Xxxxx
8/4/93
Date
