FORM OF DIRECTOR DEFERRED FEE AGREEMENT
Exhibit
10.3
FORM
OF DIRECTOR
THIS AGREEMENT, dated as of
_________________, is by and between MAXXAM Inc., a Delaware corporation (the
“Company”), and _________________ (the “Director”),
currently residing at _________________, _________________.
WITNESSETH:
WHEREAS, the Director currently
serves as a member of the Board of Directors of the Company (the “Board”) and
receives remuneration (“Director’s Fees”) from the Company in that capacity;
and
WHEREAS, the Director desires
to enter into an arrangement providing for the deferral of Director’s Fees;
and
WHEREAS, the Company is
agreeable to such an arrangement;
NOW, THEREFORE, it is agreed
as follows:
1. The
Director irrevocably elects to defer receipt, subject to the provisions of this
Agreement, of ______ percent of any Director’s Fees which may otherwise become
payable to the Director for the calendar year _____ [may not be the current
year] and which relate to services performed after January 1,
_____. Such election shall continue in effect with respect to any
Director’s Fees which may otherwise become payable to the Director for any
calendar year subsequent to _____ unless, prior to January 1 of such year, the
Director shall have delivered to the Secretary of the Company a written
revocation of such election with respect to Director’s Fees for services
performed after the date of such revocation. Until such time as the
election made under this paragraph is revoked, the percentage specified in the
first sentence hereof shall apply on each occasion on which Director’s Fees
would otherwise be paid to the Director. Director’s Fees with respect
to which the Director shall have elected to defer receipt are hereinafter
referred to as “Deferred Director’s Fees.” The foregoing election
shall not be valid unless it is submitted, with paragraph 6 properly completed,
before the end of the calendar year preceding the calendar year in which the
fees to be deferred are earned.
2. The
Company shall credit the amount of Deferred Director’s Fees to a book account
(the “Deferred Fee Account”) as of the date such fees would have been paid to
the Director had this Agreement not been in effect. Director’s Fees which would
otherwise be payable for attending a meeting of the Board or of a committee
thereof shall be credited to the Deferred Fee Account as of the first business
day following such meeting; Director’s Fees which would otherwise be payable as
a retainer shall be credited to the Deferred Fee Account as of the first
business day of the period to which they relate.
|
|
3.
|
Earnings
shall be credited to the Deferred Fee Account as follows: (NOTE: (a) and (b) below must add up
to 100%)
|
|
(a)
|
_____ None _____
25% _____ 50% _____
75%
_____100%
|
of the
amount credited to the Deferred Fee Account pursuant to paragraph 2 shall be
deemed invested in a number of phantom shares (including any fractional share)
of the Company’s Common Stock equal to the quotient of (a) such
amount divided
by (b)
the closing market price (the “Closing Price”) of a share of Common Stock as
reported for the date such amount is credited to the Deferred
Fee Account. Whenever a cash dividend is paid on Common Stock, the Deferred Fee
Account shall be credited as of the payment date with a number of phantom shares
(including any fractional share) equal to the quotient of (y) an amount equal to
the cash dividend payable on a number of shares of Common Stock equal to the
number of phantom shares (excluding any fractional share) standing credited to
such Account at the record date divided by (z) the
Closing Price on such payment date. In the event of a stock dividend or
distribution, stock split, recapitalization or the like, the Deferred Fee
Account shall be credited as of the payment date with a number of phantom shares
(including any fractional share) equal to the number of shares (including any
fractional share) of Common Stock payable in respect of shares of Common Stock
equal in number to the number of phantom shares (excluding any fractional share)
standing credited to such Account at the record date. At the time any
payment is to be made from the Deferred Fee Account pursuant to paragraph 6, the
number of phantom shares then standing credited
thereto shall be valued at the Closing Price on the first business day
of the month in which such payment is to be made, and such
payment shall be made in cash.
|
(b)
|
_____ None
_____
25% _____ 50% _____
75%
_____100%
|
of the
standing balance credited to the Deferred Fee Account as of the last business
day of each month shall be increased to an amount reflecting interest on such
balance for such month calculated using one-twelfth of the sum of (i) the Prime
Rate on the first day of such month plus (ii)
2%. For this purpose, the “Prime Rate” shall mean the highest prime
rate (or base rate) reported for such date in the Money Rates column or section
of The Wall Street Journal as the
rate in effect for corporate loans at large U.S. money center commercial banks
(whether or not such rate has actually been charged by any such bank) as of such
date. In the event The Wall Street
Journal ceases publication of such rate, the “Prime Rate” shall mean
the prime rate (or base rate) reported for such date in such other publication
that publishes such prime rate information as the Company may choose to rely
upon.
4. The
Company shall provide an annual statement to the Director showing such
information as is appropriate, including the aggregate amount standing credited
to the Deferred Fee Account, as of a reasonably current date.
5. The
Company’s obligation to make payments from the Deferred Fee Account shall be a
general obligation of the Company and such payments shall be made from the
Company’s general assets. The Director’s relationship to the Company under this
Agreement shall be only that of a general unsecured creditor, and this Agreement
(including any action taken pursuant hereto) shall not, in and of itself, create
or be construed to create a trust or fiduciary relationship of any kind between
the Company and the Director, his or her designated beneficiary or any other
person, or a security interest of any kind in any property of the Company in
favor of the Director or any other person. The arrangement created by
this Agreement is intended to be unfunded
and no trust, security, escrow, or similar account shall be required to be
established for the purposes of payment hereunder. However, the Company may in
its discretion establish a “rabbi trust” (or other arrangement having equivalent
taxation characteristics under the Internal Revenue Code or applicable
regulations or rulings) to hold assets, subject to the claims of the Company’s
creditors in the event of insolvency, for the purpose of making payments
hereunder. If the Company establishes such a trust, amounts paid therefrom shall
discharge the obligations of the Company hereunder to the extent of the payments
so made.
6. Deferred
Director’s Fees, including all earnings credited to the Deferred Fee Account
pursuant to paragraph 3, shall be paid (or commence to be paid) in cash to the
Director on the thirtieth (30th)
business day following the date the Director ceases for any reason to be a
member of the Board. Payment shall be made in the form indicated below (and the
deferral election made pursuant to paragraph 1 above shall be considered null
and void if this paragraph 6 is not properly completed):
☐ in
a lump sum; or
☐ in
_________ installments (not to exceed 10), payable as set forth
herein.
After an
initial installment payment is made in accordance with the foregoing, the
subsequent installment payments shall be made on the next January 31 and each
January 31 thereafter and shall be an amount equal to the balance standing
credited to the Deferred Fee Account as of that date divided by the number of
installments (including the one then due) remaining -to be
paid. Further adjustments between the date the Director ceases to be
a member of the Board and the date of subsequent payments shall be in accordance
with the phantom share account, as set forth in paragraph 3(a), and the cash
account, as set forth in paragraph 3(b), based on the election of the Director
prior to the first installment payment.
Amounts
standing credited to the Deferred Fee Account during the period in which
installments are paid shall be adjusted to reflect the crediting of earnings in
accordance with paragraph 3.
7. Payments
hereunder shall be made to the Director except that:
|
(a)
|
in
the event that the Director shall be determined by a court of competent
jurisdiction to be incapable of managing his financial affairs, and if the
Company has actual notice of such determination, payment shall be made to
the Director’s personal representative(s);
and
|
|
(b)
|
in
the event of the Director’s death, on the thirtieth (30th)
day after the death of the Director, payment shall be made in a lump sum
(even if the Director had elected or commenced receiving installment
payments) to the last beneficiary designated by the Director for purposes
of receiving such payment in such event in a written notice delivered to
the Secretary of the Company; provided, that if such beneficiary has not
survived the Director, or no valid beneficiary designation is in effect,
payment shall instead be made to the Director’s
estate.
|
The
Company shall deduct from any payment hereunder any amounts required for federal
and/or State and/or local withholding tax purposes.
8. Any
balance standing credited to the Deferred Fee Account shall not in any way be
subject to the debts or other obligations of the Director and, except as
provided in paragraph 7(b), shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment,
garnishment or other legal or equitable process.
9. This
Agreement shall not be construed to confer on the Director any right to be or
remain a member of the Board or to receive any, or any particular rate of,
Director’s Fees.
10. Interpretations
of, and determinations related to, this Agreement, including any determinations
of the amount standing credited to the Deferred Fee Account, shall be made by
the Board and shall be conclusive and binding upon all parties. The
Company shall incur no liability to the Director for any such interpretation or
determination so made or for any other action taken by it in connection with
this Agreement in good faith.
11. This
Agreement contains the entire understanding and agreement between the parties
with respect to the subject matter hereof, and may not be amended, modified or
supplemented in any respect except by a subsequent written agreement entered
into by both parties.
12. This
Agreement shall be binding upon, and shall inure to the benefit of, the Company
and its successors and assigns and the Director and his or her heirs, executors,
administrators and personal representatives.
13. This
Agreement shall be governed and construed in accordance with the laws of the
State of Texas, without regard to principles of choice of law. This
Agreement is intended to comply with section 409A of the Internal Revenue Code
and applicable Treasury regulations thereunder, and shall be construed
accordingly. Any payment made hereunder within the grace period
permitted by section 409A shall be deemed made on the specified payment date for
all purposes of this Agreement.
IN WITNESS WHEREOF, the
Company has caused this Agreement to be executed on its behalf by its duly authorized officer, and
the Director has executed this Agreement, on the date first written
above.
MAXXAM
Inc. Director:
By: ________________________________ ___________________________________
<Name,
Title>
<Name>
W:\Corporate\XXXXXX\0175AGT8.BLB.DOC
