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EXECUTIVE'S DEFERRED COMPENSATION AGREEMENT
AGREEMENT, made as of the _____ day of ___________________, 19_____,
between X.X. XXXXX CO., a Wisconsin corporation ("Company") and
________________________ ("Executive").
WITNESSETH:
WHEREAS, Executive is now serving or has previously served as an executive
of the Company in a position of importance and responsibility, and the Company
desires to provide such Executive with a tax deferral opportunity in the form
of Company common stock; and
WHEREAS, on December 17, 1971, the Board of Directors of the Company
adopted a resolution creating a plan permitting Executives of the Company
(amended effective as of August 1, 1975, to relate to additional employees) to
elect to defer portions of their base salary and/or portions of the amounts
payable to them under the Company's Executive Additional Compensation Plan, or
any amendment of the Plan, or any bonus plan which replaces the Plan, (the
"Plan") so as to be payable on the basis, at the times and upon the terms and
conditions of that Plan; and
WHEREAS, the terms of such deferrals are reflected in individual deferral
agreements that have been executed from time to time with the Executives of the
Company, and
WHEREAS, the parties desire to execute a new agreement to reflect recent
changes adopted by the Board of Directors,
NOW, THEREFORE, in consideration of the premises and the mutual benefits
to be derived herefrom, IT IS AGREED AS FOLLOWS:
1. DEFERRED COMPENSATION ACCOUNT
There shall be created on the books of the company an Executive's
Deferred Compensation Account (the "Account"), which shall be credited
with the amounts specified in Executive's elections under this Deferred
Compensation Agreement (the "Election").
Elections shall be in writing, made prior to the beginning of the year,
or partial year, in which the compensation would otherwise be paid, and
filed with the Corporate Controller of the Company. Such election shall
be effective with respect to pay periods occurring in the following year,
or, with respect to the Plan, for amounts which would become payable in
years beginning after the date of filing.
Elections with respect to base salary shall be in an amount of $50 or a
multiple thereof. Elections with respect to the Plan shall be in an
amount of $100 or a multiple thereof, but in no event less than $500 per
anum.
An Election shall be irrevocable with respect to the period to which it
relates and shall continue in effect each like period thereafter until
revoked or amended in writing with respect to periods beginning after the
filing with the Company of such written revocation or amendment.
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2. VALUATION OF ACCOUNT
Whenever amounts are withheld from the Executive's compensation, the
Executive's Account shall be credited with a number of stock units,
calculated by converting the amount withheld into a number of whole and
fractional stock units as if the amounts had been used to purchase Class
A non-voting common stock of the Company at the price determined under
paragraph 5 of this Agreement. The Account shall also be credited with
additional stock units whenever dividends are paid on the Class A
non-voting common stock of the Company, calculated by assuming that such
dividends were used to purchase additional stock units at the price
determined under paragraph 5 of this Agreement. The Account shall be
credited from time to time with additional shares of stock units equal in
number to the number of shares granted in any stock dividend or split to
which the holder of a like number of shares of Class A non-voting common
stock would be entitled. The Account shall likewise be credited with the
stock unit equivalent of all other distributions made with respect to
shares of Class A non-voting common stock; in the event of a distribution
of preferred stock, such preferred stock shall be valued at its par value
(or its voluntary liquidating price, if it does not have a par value).
The foregoing provisions are intended as a formula for computing the
number of shares of stock to be distributed as provided in paragraphs 3
and 4 hereof, and neither Executive nor his Beneficiary (hereinafter
defined) shall be deemed a shareholder by virtue of the existence of the
Account nor have any rights of any nature whatsoever as a shareholder
prior to the distribution of such shares.
3. DISTRIBUTIONS TO EXECUTIVE FOLLOWING TERMINATION OF EMPLOYMENT
(a) If the Executive's employment is terminated due to any reason,
including his retirement, disability, or death, and if no application and
approval under 3(b) has been made, the Company shall distribute to
Executive, or his Beneficiary, each year for a fixed period of ten years,
shares of the Class A non-voting common stock equal to the allocable part
of the number of stock units of his Account determined as of end of each
fiscal year. Thus, the first distribution shall be one-tenth of the
number of stock units then credited to such account, the second one-ninth
of the then number of stock units, etc. Such distributions shall be made
within 75 days following the end of the Company_s fiscal year, commencing
with the first fiscal year end after the date of termination of
employment. The number of stock units in the Account shall be reduced by
the number of shares of Class A non-voting common stock distributed in
each distribution.
(b) Upon application of the Executive (or Executive's Beneficiary if
Executive dies prior to termination of employment), the Company may in
its uncontrolled discretion and upon such terms and conditions as the
Board of Directors determines, pay Executive the amount credited to their
Account in smaller installments or in a lump sum on a discount or other
basis.
4. DISTRIBUTION TO BENEFICIARY OR ESTATE OF EXECUTIVE
(a) In the event of the Executive's death, annual distributions will be
made to the Executive_s beneficiary as follows:
(1) If the Executive dies prior to termination of employment, the
distributions will
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be in the same annual amounts and for the same number
of years as the distribution would have been received had the
Executive terminated employment on the date of death and lived
for the shorter of 10 years or the term permitted under 3(b);
(2) If the Executive dies after employment has terminated, the
distributions will be in the same annual amounts as were being
made or were distributable at the date of death for the
remaining period that distributions would have been made had
the Executive lived.
(b) The term "Beneficiary" as used herein includes the plural and means
any person(s), including corporate or individual beneficiary(s),
designated by Executive in a written instrument in a form acceptable to
and filed with the Company or by specific appointment in Executive's will
referring to this Agreement. Executive may designate a primary
beneficiary and a contingent beneficiary provided, however, that the
Company may reject any such instrument tendered for filing if it contains
successive beneficiaries or contingencies unacceptable to it. In the
absence of an acceptable designation or if the Beneficiary so designated
predeceases Executive, the payments shall be paid to Executive's estate.
If all Beneficiaries who survive Executive shall die before receiving the
full amounts payable hereunder, then the payments shall be paid to the
estate of the Beneficiary last to die. The Company shall not be charged
with notice of the appointment of a personal representative of Executive
until it shall have received a certified copy of the appointment.
5. ACCOUNTING AND VALUATION DETERMINATIONS
For the purpose of determining the amounts credited to the Account
pursuant to paragraph 2, the value of a stock unit shall be set equal to
the Fair Market Value of the Class A non- voting common stock. Fair
Market Value on any date shall mean, with respect to the Company_s Class
A non-voting common stock or any other stock of the Company, if the stock
is then listed and traded on a registered national securities exchange,
or is quoted in the NASDAQ National Market System, the average of the
high and low sale prices reported in composite transactions as reported
in The Wall Street Journal (Midwest Edition) for such date or, if such
date is not a business day or if no sales of Company stock shall have
been reported with respect to such date, the next preceding date with
respect to which sales were reported. In the absence of reported sales
or if the stock is not so listed or quoted, but is traded in the
over-the-counter market, Fair Market Value shall be the average of the
closing bid and asked prices for such shares on the relevant date.
6. CONVERSION FROM PRIOR AGREEMENT
(a) As of the earlier of the date of election to convert under paragraph
6(b) or August 1, 1998, deferrals under the prior deferral agreement
shall no longer be available. Any new amounts deferred shall be under
the terms of this Agreement, but such prior agreement shall remain in
effect with respect to amounts previously deferred, unless a conversion
is made under the terms of paragraph 6(b) hereof. Any remaining
unconverted balances under any prior agreement will continue to be valued
as described in such agreement until July 31, 2002, after which date any
increase in value for the following year will be based on the closing
yield rate on a 30-year U.S. Treasury Bond as of July 31 of each year.
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(b) If Executive elects in writing, the amount contained in the
Executive's Account under the terms of the prior agreement can be
converted into amounts deferred under the terms of this Agreement, and
distributions will thereafter be made solely under the terms of this
Agreement except that distributions to Executives to whom distributions
have commenced prior to the date hereof shall continue to be made at the
times provided in the prior Agreement. Such conversion may only be
elected on November 19, 1997. The number of stock units credited to the
Executive's Account shall be determined as of the date of such conversion
by valuing the Executive's account as of such date under the terms of the
prior agreement, and then converting such value into an equivalent number
of stock units under this Agreement by dividing such sum by the transfer
price as determined under paragraph 6(c).
(c) The transfer price for the conversion of amounts held under the
Executive's prior deferral agreement shall be the Fair Market Value of a
stock unit as determined under the provisions of Paragraph 5 for the date
of conversion. A one-time discount of 10%, as shall be determined by the
Board of Directors of the Company, may be offered to the Executive if the
Executive converts amounts at the conversion date offered by the Company.
7. GENERAL PROVISIONS
(a) This Agreement shall not be subject to termination, modification or
amendment by the Company with respect to any rights which have accrued
hereunder, the Company reserving the right, however, to terminate, modify
or amend this Agreement effective prospectively as of the first day of
any fiscal year upon not less than 15 days prior written notice to
Executive.
(b) The Company shall have the right to assign all of its right, title
and obligation in and under this Agreement upon a merger or consolidation
in which the Company is not the surviving entity or to the purchaser of
substantially its entire business or assets or the business or assets
pertaining to a major product line, provided such assignee or purchaser
assumes and agrees to perform after the effective date of such assignment
all of the terms, conditions and provisions imposed by this Agreement
upon the Company. Upon such assignment, all of the rights, as well as
all obligations, of the Company under this Agreement shall thereupon
cease and terminate.
(c) Any action to be taken by the Company under the provisions of this
Agreement shall require the affirmative vote of the majority of the Board
of Directors.
(d) Neither Executive nor Executive_s Beneficiary or estate shall have
power to transfer, assign, anticipate, mortgage or otherwise encumber any
rights or any amounts payable hereunder; nor shall any such rights or
payments be subject to seizure for the payment of any debts, judgments,
alimony, or separate maintenance, or be transferable by operation of law
in event of bankruptcy, insolvency, or otherwise.
(e) The Company will withhold any necessary shares from the distribution
to satisfy its Federal and State withholding tax obligations as a result
of the distribution or from other amounts paid to such individual by the
Company. Further, to the extent required by law, FICA taxes may be
withheld from amounts deferred hereunder, thereby reducing the amount of
the deferral to the extent not withheld from other amounts paid to the
Executive by the Company.
(f) This Agreement shall not supersede any other service, retainer, or
employment contract,
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whether oral or in writing, between the Company and Executive, nor affect
or impair the rights and obligations of the Company and Executive,
respectively, under any other contract, arrangement, or voluntary
pension, profit-sharing or other compensation plan of the Company, and
the benefits and payments under this Agreement shall be in addition to
any and all of Executive's benefits to which he may be entitled under any
other such contract, arrangement or voluntary plan. No amounts credited
to any participant hereunder and no amounts paid hereunder will be taken
into account as wages, salary, base pay or any other type of compensation
when determining the amount of any payment or allocation or for any other
purpose, under any other qualified or non-qualified pension or profit
sharing plan of the Company, except as otherwise may be specifically
provided by such plan. Nothing contained herein shall impose any
obligation on the Company to continue the tenure or employment of
Executive.
(g) The Company shall have the right to transfer its rights and
obligations hereunder to the trustees of a grantor trust established by
the Company and shall have the right to transfer sufficient shares of
common stock to such trust to satisfy its obligations hereunder.
(h) If the scheduled payments under this Agreement would result in
disallowance of any portion of the Company's deduction therefore under
Section 162(m) of the Code, the payments shall be limited to the amount
which is deductible, with the balance to be paid as soon as deductible by
the Company. However, in such event, the Company shall pay the Executive
on a quarterly basis an amount of interest based on the prime rate
recomputed each quarter on the unpaid scheduled payments.
(i) This Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company. The Committee shall have all
authority that may be appropriate for administering the Plan, including
the authority to adopt rules and regulations for implementing, amending
and carrying out the Plan, interpreting the provisions of the Plan and
determining the eligibility of employees to participate in the Plan and
an eligible employee's entitlement to benefits hereunder.
The Committee shall have full and complete discretionary authority to
determine eligibility for benefits under the Plan, to construe the terms
of the Plan and to decide any matter presented through the claims
procedure. Any final determination by the Committee shall be binding on
all parties. If challenged in court, such determination shall not be
subject to de novo review.
(j) If the Executive or the Executive's Beneficiary (hereinafter refereed
to as "claimant") believes he is being denied any benefit to which he is
entitled under this Plan for any reason, he may file a written claim with
the Committee. The Committee shall review the claim and notify the
claimant of his decision within 90 days of receipt of such claim, unless
the claimant receives written notice prior to the end of the 90 day
period stating that special circumstances require an extension of the
time for decision. The Committee's decision shall be in writing, sent by
first class mail to the claimant's last known address, and if a denial of
the claim, shall contain the specific reasons for the denial, reference
to pertinent provisions of the Plan on which the denial is based, a
description of any additional information or material necessary to
perfect the claim, and an explanation of the claims review procedure.
A claimant is entitled to request the entire Committee to review any
denial by written request to the Committee within 60 days of receipt of
the denial. Absent a request for review within the
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60-day period, the claim will be deemed to be conclusively denied.
The Committee shall afford the claimant or his authorized representative
the opportunity to review all pertinent documents and submit issues and
comments in writing and shall render a review decision in writing, all
within 60 days after receipt of a request for review (provided that in
special circumstances the Committee may extend the time for decision by
not more than 60 days upon written notice to the claimant). The
Committee's review decision shall contain specific reasons for the
decision and reference to the pertinent provisions of the Plan.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by
its Officers thereunto duly authorized and its corporate seal to be hereunto
affixed, and Executive has hereunto set his hand and seal as of the day and
year first above written.
X. X. XXXXX CO.
By: (SEAL)
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Xxxxxxxxx X. Xxxxxx
President Executive
Attest:
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Xxxxxx X. Xxxxxxx
Assistant Secretary
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