DEFERRED COMPENSATION AGREEMENT
EXHIBIT
10.7
THIS DEFERRED COMPENSATION
AGREEMENT (the "Agreement") is entered into this 27th day of January,
2007, by and between WMS INDUSTRIES, INC., a Delaware corporation (the
"Employer") and Xxxxx X. Xxxxx("Executive") and shall be effective as of
February 1, 2007 (the “Effective Date”).
WHEREAS, the Executive is
employed by the Employer as its Senior Vice President – Product Development
pursuant to an Employment Agreement dated September 7, 2005 (the "Employment
Agreement"); and
WHEREAS, the Employer
maintains the WMS Industries, Inc. Nonqualified Deferred Compensation Plan (the
"Nonqualified Plan") for the benefit of certain of its management and highly
compensated employees; and
WHEREAS, the Employer desires
to retain the services of the Executive for an extended period of time and is
willing to provide the Executive with additional Nonqualified Plan benefits in
order to encourage the Executive to remain in the employ of the
Employer;
NOW, THEREFORE, the parties
agree as follows:
1. Employer Contributions
Account. The Employer agrees that Executive shall be eligible
to receive Employer Contributions to his Account under the Nonqualified Plan,
which Employer Contributions shall be subject to the terms and conditions set
forth in this Agreement and the Nonqualified Plan. Employer
Contributions made on Executive's behalf shall be credited to a subaccount
established under Executive's Account under the Nonqualified Plan, which
subaccount will be known as the "Employer Contributions Account."
2. Contributions to Employer
Contributions Account. Subject to the provisions of Section 6
below, the Employer will credit Executive's Account under the Nonqualified Plan
with Employer Contributions in such amounts and at such times as the Employer,
in its sole discretion, shall determine, provided that the aggregate
contributions for each Contract Year (as defined below) will equal One Hundred
Thousand Dollars ($100,000). For purposes of this Agreement, the term
“Contract Year” means each 12 month period commencing on the Effective Date or
any anniversary thereof during the term of the Agreement.
3. Investment of Employer
Contributions. The balance in Executive’s Employer
Contributions Account shall be invested as directed by Executive in accordance
with the terms of the Nonqualified Plan.
4. Vesting. Subject
to the provisions of Section 6 below, Executive shall not vest in any portion of
his Employer Contributions Account unless he remains continuously employed by
the
Employer until the tenth anniversary of the Effective Date (the "Vesting Date"),
at which time he shall be 100 percent vested in his Employer Contributions
Account.
5. No Guaranteed Account
Balance. Executive acknowledges that Employer does not
guarantee the balance that will available in Executive’s Employer Contributions
Account on the Vesting Date or on any other date.
6. Impact of Involuntary
Termination of Employment. In the event Executive's employment
with the Employer shall terminate prior to the Vesting Date as a result of
death, Disability (as defined below) or termination of employment by the
Employer for reasons other than Cause (as defined in the Nonqualified Plan),
Executive shall become 100 percent vested in his Employer Contributions Account
on the date of such termination of employment (the "Early Vesting Date") and
will be entitled to receive the full balance then available in the Employer
Contributions Account. In event of the occurrence of an Early Vesting
Date, Employer shall have no obligation to continue making contributions to such
account provided that, for the Contract Year in which the Early Vesting Date
occurs, Employer shall have contributed at least a pro rata amount of the
contribution amount specified in Section 2 for the Contract Year in which the
Early Vesting Date occurs. For purposes of this Section 6, the term "Disability"
shall mean the absence of Executive from Executive’s duties with the Employer on
a full-time basis for 90 consecutive business days, or for six months in any
12-month period, as a result of incapacity due to mental or physical illness
which is determined to be total and permanent by a physician selected by the
Employer or its insurers and acceptable to Executive or Executive’s legal
representative.
7. Distribution of Employer
Contributions Account. Executive's Employer Contributions
Account shall be distributed to him following the Vesting Date or Early Vesting
Date at the time and in the form elected by Executive pursuant to the terms of
the Nonqualified Plan.
8. Entire
Understanding. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior statements, representations or negotiations with
respect to the subject matter hereof. Notwithstanding the foregoing,
(i) this Agreement shall not supersede any provisions of the Employment
Agreement and (ii) all applicable terms of the Nonqualified Plan shall apply to
Executive's Employer Contributions Credit Account.
9. Governing
Law. To the extent not preempted by ERISA, this Agreement
shall be governed by and construed in accordance with the substantive law of the
State of Illinois.
10. Amendment. This
Agreement may be amended only by an instrument in writing signed by the parties
hereto.
IN WITNESS WHEREOF, the
Employer has caused this Agreement to be executed by its duly authorized
officer, and Executive has signed this Agreement, all as of the date first above
written.
WMS
INDUSTRIES, INC.
By: /s/ Xxxxx X.
Xxxxxxxxxxxx
Its:
Executive Vice President and Chief
Financial
Officer and Treasurer
EXECUTIVE
/s/ Xxxxx X.
Xxxxx
Xxxxx X.
Xxxxx
