1
Exhibit No. (10)(v)
DEFERRED COMPENSATION AGREEMENT
THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") is made and entered
into this 1st day of December , 1992, by and between GREAT LAKES CHEMICAL
CORPORATION, a Delaware corporation (the "Corporation"), and XXXXXX X.
XXXXXXXX, now residing in West Lafayette, Indiana ("Xxxxxxxx").
RECITALS
1. Xxxxxxxx is an executive and the Chief Financial Officer of the
Corporation. In order to assure the Corporation of the continued benefit of
Xxxxxxxx' services until his ultimate retirement, the Corporation has decided to
provide certain deferred compensation benefits to Xxxxxxxx as an incentive to
his continued employment with the Corporation.
2. In recognition of the foregoing, the Board of Directors of the
Corporation has resolved that, effective January 1, 1991, Xxxxxxxx shall be
credited with a $40,000 annual compensation increase (in addition to other
compensation adjustments that may be decided upon by the Board of Directors from
time to time) for the ten (10) year period beginning January 1, 1991 and ending
December 31, 2000, and that such increase shall not be paid to Xxxxxxxx
currently, but instead the Corporation shall provide the deferred compensation
benefits set forth in this Agreement in lieu of annual $40,000 cash bonuses
during such ten (10) year period.
AGREEMENT
In consideration of the foregoing and for other good and valuable
consideration, the parties hereby agree as follows:
1. Benefits Upon Termination of Employment for Reason Other than Death.
Upon the termination of the employment of Xxxxxxxx with the Corporation for any
reason other than death
1
2
(whether voluntary or involuntary, or with or without cause), the Corporation
shall pay to Xxxxxxxx, in addition to any other amounts payable by the
Corporation to Xxxxxxxx under the Corporation's other compensation and benefit
programs, annual benefits in the amount set forth below commencing in the month
of January 2001 and continuing each January thereafter until fifteen (15) annual
installments have been paid, with the last annual installment being due and
payable in the month of January 2015. The amount of the said annual benefits
shall be determined by reference to the year in which the termination of
Xxxxxxxx' employment occurs in accordance with the following schedule:
Year of Termination Annual Benefit
------------------- --------------
1992 $ 32,700
1993 $ 43,600
1994 $ 54,500
1995 $ 65,400
1996 $ 76,300
1997 $ 87,200
1998 $ 98,100
1999 $103,500
2000 $109,000
In the event Xxxxxxxx dies after commencement of benefits hereunder but
prior to payment of all fifteen (15) annual installments, the remaining
installments shall be paid to his beneficiary as designated pursuant to Section
4 below. If Xxxxxxxx dies after termination of his employment with the
Corporation but prior to January 1 of the calendar year in which his benefits
are to commence, then his said designated beneficiary shall receive the death
benefits provided for in Section 3 below in lieu of the benefits described in
this Section 1.
If Xxxxxxxx terminates employment with the Corporation as a result of
"Disability" (as defined below), then subject to the last paragraph of Section 2
below, Xxxxxxxx' termination shall,
2
3
for purposes of this Agreement, be deemed to occur on the date on which Xxxxxxxx
ceases to perform full-time services for the Corporation as a result of such
Disability, regardless of when his termination otherwise may be deemed to occur
for purposes of the Corporation's other compensation and benefit programs.
As used in this Agreement, "Disability" shall mean the inability of
Xxxxxxxx to perform the full-time duties of his position with the Corporation as
a result of injury or illness suffered by him for which he is entitled to
receive (presently or after a designated waiting period) short term or long term
disability benefits under any disability program sponsored by the Corporation.
The "Disability" of Xxxxxxxx shall, for purposes of this Agreement, be deemed to
end at such time as Xxxxxxxx is no longer entitled to receive short term or long
term disability benefits under any disability program sponsored by the
Corporation.
2. Acceleration Election. Notwithstanding the provisions of Section 1
above, Xxxxxxxx shall be entitled to elect (by written election filed in
accordance with this Section 2) to reduce his annual benefits in accordance with
the schedule set forth below and to accelerate the payment of such reduced
annual benefits so that such benefits shall commence in the month of January of
the year following the year in which Xxxxxxxx terminates employment with the
Corporation and shall continue each January thereafter until fifteen (15) annual
installments have been paid; provided, however, that if such termination of
employment results from the Disability of Xxxxxxxx, then the fifteen (15) annual
installments payable hereunder pursuant to Xxxxxxxx' said acceleration election
shall not commence until the earlier of (a) January 2001, or (b) January of the
year following the year in which such Disability ends.
In the event Xxxxxxxx has filed a valid election to accelerate the
payment of his annual benefits pursuant to this Section 2, then the amount of
such annual benefits shall be determined
3
4
by multiplying the applicable annual benefit for the year of Xxxxxxxx'
termination under the schedule set forth in Section 1 above times the following
reduction factor based upon the year in which such benefits are to commence:
Year of Benefit Commencement Reduction Factor
---------------------------- ----------------
1993 .6768
1994 .7107
1995 .7462
1996 .7835
1997 .8227
1998 .8638
1999 .9070
2000 .9524
2001 1.0000
For example, if Xxxxxxxx terminates employment with the Corporation in
1995 for a reason other than Disability and he has filed a valid acceleration
election with the Corporation, then his annual benefit would be $51,241 per year
($65,400 times .7835) commencing in January 1996 and continuing each January
thereafter until fifteen (15) annual installments have been paid. If, instead,
Xxxxxxxx' termination in 1995 results from Disability and his Disability ends in
1998, then his annual benefits would be $59,318 per year ($65,400 times .9070)
commencing in January 1999.
To constitute a valid acceleration election under this Section 2, such
election must be made in writing, must specifically refer to and affirmatively
elect the right of acceleration provided for in this Section 2, and must be
filed with the Corporation's Director of Human Resources either (a) upon the
execution of this Agreement, or (b) at least one (1) year prior to the date on
which Xxxxxxxx' termination of employment occurs. Any election not meeting these
requirements shall be invalid and, in such event, the annual benefits payable to
Xxxxxxxx hereunder shall be paid as if no election had been made. Xxxxxxxx may
revoke any acceleration
4
5
election filed by him hereunder at any time prior to one (1) year preceding his
termination of employment (but not thereafter), by filing a notice of revocation
with the Director of Human Resources which specifically refers to and
affirmatively revokes the prior election.
Notwithstanding anything contained in this Section 2 to the contrary,
if Xxxxxxxx terminates employment as a result of Disability and returns to
active, full-time employment with the Corporation on or before the last day of
the calendar year in which such Disability ends (but prior to January 2001),
then (a) any acceleration election theretofore filed by Xxxxxxxx shall not be
given effect until Xxxxxxxx suffers a subsequent termination of employment, and
(b) for purposes of determining the amount of the benefit ultimately payable to
Xxxxxxxx hereunder, if Xxxxxxxx shall remain in active, full-time employment of
the Corporation for a period of one (1) year following his return to employment,
then it shall be deemed as though Xxxxxxxx' employment with the Corporation had
continued uninterrupted during the period of his Disability and he shall be
entitled to receive full benefits hereunder (when such benefits become payable)
as though his period of Disability had not occurred. If Xxxxxxxx returns to
full-time employment with the Corporation on or before the last day of the
calendar year in which such Disability ends but does not complete one (1) year
of fulltime employment following his return, then Xxxxxxxx' benefits shall be
calculated by reference to the year in which he first terminated employment as a
result of Disability.
3. Payment of Benefits upon Death. If Xxxxxxxx shall die (either during
his employment or after his employment has terminated) prior to January 1 of the
calendar year in which the annual benefits payable under Section 1 or Section 2
above are to commence, then in lieu of the benefits otherwise payable under
Sections 1 or 2, the Corporation shall pay annual benefits to Xxxxxxxx'
beneficiary in the amount of $109,000 per year (without regard to the number of
years of
5
6
Xxxxxxxx' employment with the Corporation as of the time of his death),
commencing in the calendar month following Xxxxxxxx' death and continuing in the
same calendar month of each year thereafter until a total of fifteen (15) annual
installments have been paid. Notwithstanding the foregoing, however, if
Xxxxxxxx' death shall occur prior to January 1, 1994 as a result of suicide,
then in lieu of the annual benefits described in the preceding sentence and the
benefits otherwise payable under Sections 1 or 2 above, the Corporation shall
pay a single lump sum benefit to Xxxxxxxx' beneficiary in the amount of (a)
$92,000 if Xxxxxxxx' death occurs prior to January 1, 1993, or (b) $145,000 if
Xxxxxxxx' death occurs after December 31, 1992 but prior to January 1, 1994.
4. Designation of Beneficiary. Xxxxxxxx may, from time to time,
designate one or more persons, trusts, or entities (primarily, contingently, or
successively) to whom the Corporation shall pay the annual benefits hereunder in
the event of his death. Such designation shall be in writing, shall specifically
refer to this Agreement, and shall be effective upon the filing thereof with the
Director of Human Resources of the Corporation. If Xxxxxxxx fails to designate a
beneficiary in accordance with this Section or if the beneficiary named by
Xxxxxxxx predeceases him (and no contingent beneficiary has been designated),
then the Corporation shall pay the annual benefits hereunder to:
(a) Xxxxxxxx' spouse; or if he has no spouse who shall survive
him, then
(b) Xxxxxxxx' estate.
Benefit Claims Procedures. Any claim by Xxxxxxxx or his
beneficiary (the "Claimant") for the payment of annual benefits under this
Agreement shall be filed in writing with, and shall be reviewed and decided by,
the Corporation's Director of Human Resources (the "Claims Manager"). If for any
reason a claim for annual benefits is denied by the Claims
6
7
Manager, then the Claims Manager shall deliver to the Claimant, within ninety
(90) days of the date the claim is filed with the Claims Manager, a written
explanation of such denial, pertinent references to the provisions of this
Agreement on which the denial is based, any other relevant data or materials,
and information regarding the procedures to be followed by the Claimant in
obtaining a review of his claim, all in a manner calculated to be understood by
the Claimant.
Upon receipt of the Claim Manager's denial of the claim, the Claimant
shall have sixty (60) days following such receipt to file a written appeal with
the Claims Manager requesting a review of the denial. Such appeal may include
pertinent documents and written issues, arguments, and other comments. Within
sixty (60) days following receipt of such appeal, the Claims Manager shall
review and decide upon the appeal and shall issue a written decision on the
appeal which shall include specific reasons for the decision and pertinent
provisions of this Agreement on which the decision is based. Such decision shall
be written in a manner calculated to be understood by the Claimant, and a copy
thereof shall be furnished to the Claimant. If the Claimant does not receive a
copy of the said decision within the said sixty (60) day period, then the appeal
shall be deemed denied upon review.
6. Arbitration of Denied Claims. Any claim or controversy arising out
of or relating to the Claim Manager's final review of an appeal pursuant to
Section 5 above shall be settled by binding arbitration in West Lafayette,
Indiana in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. Any decision of the arbitrator shall be final and
conclusive on the parties; there shall be no appeal therefrom other than for
fraud or misconduct; and judgment upon such decision may be entered in any court
having jurisdiction over the matter, or application may be made to any such
court for confirmation of such decision, for a judicial acceptance thereof, for
an order of enforcement, or for any other legal remedies which
7
8
may be necessary to effectuate such decision. All attorneys' fees incurred by
the parties in connection with such arbitration shall be awarded in such manner
as the arbitrator shall deem just and appropriate under the circumstances. Any
claim or controversy submitted to arbitration hereunder shall be subject to all
applicable statutes of limitation that would apply if such claim or controversy
were brought as a suit in a United States District Court under the Employee
Retirement Income Security Act of 1974, as amended.
7. Source of Benefits. The annual benefits payable to Xxxxxxxx (or his
beneficiary) under this Agreement shall not be funded in any respect, but
instead shall be paid solely from the Corporation's general assets. Neither
Xxxxxxxx nor his beneficiary shall have any interest whatever in any specific
assets of the Corporation under the terms of this Agreement. This Agreement
evidences the Corporation's general unsecured promise to pay the benefits
provided for herein, and shall not be considered to create an escrow account,
trust fund, or other funding agreement of any kind or a fiduciary relationship
between the Corporation and Xxxxxxxx.
8. Facility of Payment. If any benefit under this Agreement is payable
to a minor or other person under legal disability, then the Corporation shall
have the right to pay such benefit to the legal guardian of that person or to
such other person or organization as a court of competent jurisdiction may
direct. Acceptance of payment of any benefit by any legal guardian or other
court appointed person or organization under this Section shall be a complete
discharge of any liability the Corporation may have with respect to such
benefit.
9. Effect on Other Benefits. The annual benefits payable under this
Agreement shall constitute deferred compensation and shall not be deemed salary
or other compensation to Xxxxxxxx for the purpose of computing benefits to which
he may be entitled under any qualified pension or profit sharing plan or other
arrangement maintained by the Corporation for the benefit
8
9
of its employees.
10. Contract of Employment. Nothing contained in this Agreement shall
be construed as conferring upon Xxxxxxxx the right to continue in the
Corporation's employ as an executive or in any other capacity. This Agreement
shall not constitute an employment contract for a definite term or in any way
act as a restriction on the Corporation's right to discharge Xxxxxxxx at any
time or on Xxxxxxxx' right to terminate his employment with the Corporation at
any time.
11. Nonalienation of Benefits. Neither Xxxxxxxx nor his beneficiary
shall have any right whatever (other than by will or the laws of descent and
distribution) to anticipate, pledge, alienate, assign, or otherwise transfer any
rights or benefits under this Agreement, and any effort to do so shall be null
and void. The benefits payable to Xxxxxxxx or his beneficiary under this
Agreement shall be exempt from the claims of his (or her) creditors or other
claimants and from all orders, decrees, levies, and executions and any other
legal process to the fullest extent permitted by law.
12. Merger. Consolidation. or Acquisition. In the event of a merger or
consolidation by the Corporation with another corporation, or the acquisition of
all or substantially all of the assets or outstanding capital stock of the
Corporation by another entity, then and in such event the obligations and
responsibilities of the Corporation under this Agreement shall be assumed (and
the Corporation shall cause them to be assumed) by any such successor or
acquiring entity, and all of the rights, privileges, and benefits of Xxxxxxxx
under this Agreement shall continue in full force and effect.
13. Entire Agreement: Amendment. This Agreement contains all of the
terms and provisions of the parties' rights and obligations relating to the
subject of this Agreement and constitutes the entire agreement of the parties
regarding the subject matter hereof, and any
9
10
alleged terms or provisions other than those contained herein shall be of no
effect. This Agreement may not be amended or modified except by a written
document signed by all parties to this Agreement.
14. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Indiana to the extent those laws are
not preempted by the laws of the United States of America.
15. Binding Agreement. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their successors, assigns, personal
representatives, heirs, and any beneficiary of Xxxxxxxx.
16. Section Heading. The section headings of this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
the terms and provisions of this Agreement.
IN WITNESS WHEREOF, Xxxxxxxx and the Corporation have duly executed
this Agreement on the day and year first above written.
GREAT LAKES CHEMICAL CORPORATION
By: ____________________________________
Title: President and CEO
ATTEST:
_______________________________
Secretary
[Corporate Seal]
_________________________________ (Seal)
Xxxxxx X. Xxxxxxxx
10
