DEFERRED COMPENSATION AGREEMENT EXHIBIT 10.1
AGREEMENT, made this _____ day of _________________, 1997,
between XXXXXX'X, INC., a Wisconsin corporation ("Xxxxxx'x") and
_________________ ("Employee").
RECITALS:
1. Employee is employed by Xxxxxx'x (or one of its
subsidiaries or affiliates) in a managerial or officer capacity.
Employee's skills and experience are of great value to Xxxxxx'x
(and/or such subsidiary or affiliate) in the conduct of its
business.
2. Xxxxxx'x and employee acknowledge that a change in the
ownership or control of Xxxxxx'x or its business could result in
a displacement of certain key employees and/or a material change
in the methods of operation of Xxxxxx'x business.
3. In order to help secure Employee's continued commitment
to Xxxxxx'x, Xxxxxx'x is willing to enter into this Agreement and
thereby provide certain financial benefits to Employee in the
event of the termination of Employee's employment following a
Change of Control (as hereinafter defined) of Xxxxxx'x.
AGREEMENT:
In consideration of the premises and Employee's continued
employment with Xxxxxx'x, Xxxxxx'x and Employee hereby agree as
follows:
1. Payment Upon Change Of Control and Termination of
Employment. Xxxxxx'x will pay to Employee the "Deferred
Compensation Amount" (determined pursuant to Section 3 below) if,
at any time within three (3) years after (or substantially
concurrently with) the occurrence of a "Change of Control" (as
hereinafter defined) of Xxxxxx'x, Employee's employment with
Xxxxxx'x (or its subsidiaries or affiliates) is either (a)
terminated by Xxxxxx'x (or the subsidiary or affiliate of
Xxxxxx'x by which Employee is then employed), other than for
"Good Cause" (as that term is hereinafter defined), or (b)
terminated by Employee for "Good Reason" (as that term is
hereinafter defined); provided, that the termination of
Employee's employment by Xxxxxx'x or one of its subsidiaries or
affiliates will not constitute a termination for purposes of this
Agreement if Employee thereafter becomes employed by another
Xxxxxx'x subsidiary or affiliate. The date on which the
termination of employment described in either clause (a) or (b)
above occurs is referred to herein as the "Termination Date."
The Deferred Compensation Amount shall be paid to Employee in
full within thirty (30) days after the Termination Date.
2. Continuation of Certain Fringe Benefits. If the
Employee becomes entitled to the payment of any Deferred
Compensation Amount pursuant to the preceding Section 1, Xxxxxx'x
will (in addition to the payment of the Deferred Compensation
Amount) continue to provide to Employee, at no cost to Employee,
those health and/or life insurance benefits (if any) to which the
Employee was entitled or which were provided or made available to
the Employee by Xxxxxx'x (or the subsidiary or affiliate by which
Employee was employed) as of the Termination Date, for that
number of months following the Termination Date which is equal to
the "Monthly Multiplier" (as determined under the following
Section 3).
3. Deferred Compensation Amount. If the Termination Date
occurs within two (2) years after the date on which a Change of
Control occurs, the "Deferred Compensation Amount" means the
"Monthly Benefit Amount" (as hereinafter defined) times twenty-
four (24). If the Termination Date occurs more than two (2)
years, but not more than three (3) years, after the date on which
a Change of Control occurs, the "Deferred Compensation Amount"
means the "Monthly Benefit Amount" times twenty-four (24) minus
the number of calendar months between the date two years after
the date on which a Change of Control occurs (the "Second
Anniversary Date") and the Termination Date. For this purpose,
in determining the number of months between the Second
Anniversary Date and the Termination Date, the month in which the
Termination Date falls will be included and the month in which
the Second Anniversary Date occurs will be excluded. If the
Termination Date occurs more than three (3) years after the date
on which a Change of Control occurs, the "Deferred Compensation
Amount" shall be zero. The number by which the Monthly Benefit
Amount is multiplied to determine the Deferred Compensation
Amount, pursuant to the first two sentences of this Section 3, is
referred to herein as the "Monthly Multiplier."
4. Monthly Benefit Amount. For purposes of this Agreement,
the "Monthly Benefit Amount" means one-twelfth (1/12) of
Employee's annual base salary as established and in effect as of
the Termination Date (unless such base salary in effect as of the
date of the Change of Control is greater, in which event the
latter will apply)
5. Definition of Change of Control. For purposes of this
Agreement, a "Change of Control" of Xxxxxx'x shall be deemed to
occur:
(a) If any person or group of persons (as defined in Rule
13d-5 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), together with its
affiliates (but not including the Xxxxxx'x, Inc. Voting
Trust), becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or
indirectly, of thirty percent (30%) or more of the then
outstanding Common Stock of Xxxxxx'x, or thirty percent
(30%) of more of the then outstanding securities of
Xxxxxx'x entitled generally to vote for the election of
Directors of Xxxxxx'x ("Voting Securities"); provided,
that if the person so acquiring such Common Stock or
Voting Securities is itself a corporation or other
entity, such acquisition will constitute a Change of
Control only if less than 70% of the outstanding common
stock or voting securities of such corporation or other
entity are held by persons who, immediately before such
acquisition, held beneficially Common Stock or Voting
Securities of Xxxxxx'x; or
(b) Upon the merger or share exchange of Xxxxxx'x with
any other corporation, the sale or other disposition of
substantially all of the assets of Xxxxxx'x, or the
liquidation or dissolution of Xxxxxx'x, unless, in any
such case, immediately thereafter at least 70% of the
outstanding Common Stock and 70%of the outstanding
Voting Securities of the corporation or entity
surviving such merger or share exchange, or acquiring
such assets, is held beneficially by persons who,
immediately before such merger or share exchange or
acquisition of assets, held beneficially Common Stock
or Voting Securities of Xxxxxx'x; or
(c) If the Board of Directors of Xxxxxx'x (by the
affirmative vote of at least 2/3 of the directors then
in office), immediately prior to any other action
proposed to be taken by Xxxxxx'x or by the stockholders
of Xxxxxx'x, determines that such proposed action, if
taken, would constitute a Change of Control of
Xxxxxx'x, and such action is thereafter taken.
6. Definitions of "Good Cause" and "Good Reason."
(a) For purposes of this Agreement, the term "Good
Cause" means only (i) the wilful commission by the
Employee of a material act of dishonesty or moral
turpitude involving Xxxxxx'x (or one or more of its
subsidiaries or affiliates) (ii) the Employee's
conviction of a felony, or his pleading guilty or nolo
contendere to the same; (iii) the Employee's gross
negligence in the performance of his duties and
responsibilities as an officer of Xxxxxx'x (or one or
more of its subsidiaries or affiliates); (iv) the
wilful and continuing failure of the Employee to carry
out the duties and responsibilities of his office, or
to follow a specific and lawful directive of the Board
of Directors of Xxxxxx'x (or one or more of its
subsidiaries or affiliates) or an officer of Xxxxxx'x
(or one or more of its subsidiaries or affiliates) to
whom he or she reports (provided such directive is
consistent with the Employee's office or position); (v)
the Employee's wilful disclosure of material
proprietary confidential information of Xxxxxx'x (or
one or more of its subsidiaries or affiliates) to or
for the benefit of a competitor of Xxxxxx'x, to the
extent such information was not available publicly; or
(vi) any intentional misrepresentation by the Employee
to the directors of Xxxxxx'x. For purposes of the
preceding definition, no act, failure to act, or
omission on the part of the Employee will be deemed to
have been "wilful" or "intentional" if done or omitted
to be done in good faith and in the reasonable belief
that it was in or not opposed to the best interests of
Xxxxxx'x. Any such act or omission or failure to act
based upon the advice of counsel for Xxxxxx'x will be
conclusively deemed to have been done or omitted to be
done in good faith and in the best interests of
Xxxxxx'x.
(b) For purposes of this Agreement, the term "Good Reason"
means a material diminution or adverse change (effected
by Xxxxxx'x (or the subsidiary or affiliate by which
the Employee is employed), without the Employee's
voluntary concurrence) in the nature or scope of the
Employee's authority, powers, functions, duties or
responsibilities or any other material aspect of his
employment, including, without limitation, the
Employee's ceasing to hold the office or offices (if
any) which he or she held prior to the Change of
Control (or the substantial equivalent thereof) (other
by than by reason of the Employee's voluntary
resignation from such office or offices).
7. No Contract of Employment. Nothing herein contained
shall be construed or interpreted to impose on Xxxxxx'x any
obligation to continue the employment of Employee, or confer on
Employee any rights to any such continued employment.
8. Notices. All notices under this Agreement shall be in
writing and any notice shall be considered to be given and
received in all respects on the day it is personally delivered or
deposited in the United States mail, first class, postage
prepaid, addressed as follows or to such other address as may be
designated by one party to the other by notice duly given
(provided, that written notice given in any other manner shall
nonetheless be effective when actually received by the party
entitled to receive it):
If to Xxxxxx'x: Xxxxxx'x, Inc.
00000 Xxxxxx Xxxxx
X.X. Xxx 000
Xxxxxxxx, XX 00000
Attn: Secretary
If to the Employee:
At his or her address as it
appears from time to time in
the employment records of Xxxxxx'x.
9. Miscellaneous.
(a) Assignment. The right of Employee or any other
person to the payment of the Deferred Compensation
Amount or other benefits under this Agreement shall not
be assigned, transferred, pledged or encumbered,
voluntarily or by operation of law; provided that in
the event of Employee's death after the Termination
Date and before the Deferred Compensation Amount has
been paid to Employee, the Deferred Compensation Amount
shall be payable to Employee's estate.
(b) Effect on Retirement Plans. Any amounts payable
to Employee under this Agreement shall not be deemed
salary or other compensation to Employee for the
purpose of computing benefits to which he or she may be
entitled under any profit sharing plan, pension plan,
or other arrangement of the corporation for the benefit
of its employees.
(c) Amendment. This Agreement may only be amended by
an agreement in writing signed by the parties hereto.
(d) Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the parties hereto,
Xxxxxx'x successors and assigns, and the Employee's
heirs and legal representatives. If Xxxxxx'x merges or
consolidates with or into any other corporation or
entity (whether or not Xxxxxx'x is the surviving entity
in such transaction), or transfers all or substantially
all of its business or assets to another corporation or
other form of business or other entity, all references
herein to Xxxxxx'x shall be deemed references to the
corporation or other entity surviving such merger or
consolidation or to which such assets or business are
transferred (as well as to Xxxxxx'x, if it remains in
existence).
(e) Governing Law. This Agreement shall be construed
in accordance with and governed by the laws of the
State of Wisconsin.
(f) Costs of Enforcement. In the event of any
litigation arising between the parties in connection
with the interpretation or enforcement of this
Agreement, the prevailing party in such litigation
shall be entitled to recover its costs and expenses of
such litigation, including attorney's fees, from the
non-prevailing party.
(g) Termination of Existing Agreement. This Agreement
is intended to supersede in its entirety that certain
Deferred Compensation Agreement between Xxxxxx'x and
Employee dated ______________, 199__ (as amended on
November __, 1993) (the "Prior Agreement"). By their
execution of this Agreement, the parties agree that the
Prior Agreement is hereby terminated and extinguished
in all respects, effective immediately upon such
execution.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
XXXXXX'X, INC.
By: ----------------------------------
Xxxxxx X. Xxxxxxx, President & CEO
Attest: ----------------------------------
Xxxxxx X. Xxxx, Vice President,
Secretary & Treasurer
----------------------------------
------------------------, Employee
