RETIREMENT BENEFIT AGREEMENT
Exhibit 10(aq)
This
Retirement Benefit Agreement (the “Agreement”) is made this 4th day of
February, 2008, by and between Invacare Corporation, an Ohio corporation
(the
“Company” or “Invacare”) and A. Xxxxxxx Xxxxx III (the
“Executive”).
WITNESSETH
WHEREAS,
Executive has served
since 1979 as the Chief Executive Officer of the Company and has devoted
many
years of valuable service to the Company;
WHEREAS,
on March 6, 2000, the
Compensation, Management Development and Corporate Governance Committee
(formerly, and hereafter in this Agreement, referred to as the “Compensation
Committee”) of the Board of Directors of the Company received and reviewed a
report from The Xxxxx Organization, an independent compensation consultant,
which described a retirement package for the Executive, as well as a proposed
benefit equalization plan to compensate the Executive for his non-participation
in certain then-existing plans maintained by the Company for the benefit
of
certain senior executives;
WHEREAS,
in reliance on such
report and subject to the satisfaction of the conditions described below,
the
Compensation Committee approved certain retirement benefits and a benefit
equalization plan for Executive (the “Plan”); and
WHEREAS,
certain of the
provisions of the Plan have been completed and, in order to clarify the intent
of the parties and avoid possible uncertainties, the Company and Executive
desire to memorialize the remaining provisions of the Plan in this
Agreement;
NOW
THEREFORE, for good and
valuable consideration, the receipt of which is mutually acknowledged by
Executive and the Company, the parties agree as follows:
1.
Executive Spending
Account.
(a) In
the event of Executive’s death prior to the termination of his full-time
employment with the Company for any reason including, without limitation,
his
voluntary retirement (any such termination other than by death being hereafter
referred to as the “Retirement”), the Company shall not be required to provide
any spending account pursuant to this paragraph 1.
(b)
Upon Retirement, the Executive will be provided with a $1 million spending
account from which he will be entitled to be reimbursed for expenses incurred
by
him, during the five calendar years following the date of Retirement, for:
(i)
office and clerical support; (ii) financial and estate planning; and (iii)
such
other reasonable out
of-pocket
expenses that Executive may incur in connection with providing consulting
services requested by the Company pursuant to paragraph 5 below. In
no event shall the aggregate amount reimbursed to Executive pursuant to this
paragraph 1(b) exceed $200,000 in any single calendar year (the “Annual Spending
Account”). Reimbursement under this paragraph 1(b) shall
occur on the last day of each calendar quarter during which Executive
has submitted reasonable documentation for such expenses.
(c) Upon
the end of each calendar year during which an Annual Spending Account is
available under Section 1(b), any amount remaining in the Annual Spending
Account for such year shall be promptly paid to Executive. In the event of
Executive’s death at any time during the five calendar years following
Retirement, the amount remaining in the Annual Spending Account for the year
of
Executive’s death plus the amounts
of
any Annual Spending Accounts for the balance of the five years remaining
on the
Company’s commitment shall be paid to such beneficiary or beneficiaries as
Executive may designate pursuant to paragraph 13 below.
2.
Reimbursement
of Other
Expenses. In addition to any amounts payable pursuant to
paragraph 1 above, during the five-year period following Retirement (or,
in the
case of subparagraphs (b) and (c) below, following Retirement or Executive’s
death), Executive shall be entitled to reimbursement for the following
expenses:
(a)
The cost of private or first-class airfare for Executive up to a maximum
of
$30,000 per year during each of the five calendar years following the
Executive’s Retirement;
(b)
Home security costs not to exceed $2000 per year for each of the five years;
and
(c)
The annual premium cost for medical insurance (substantially similar to that
maintained by the Company on behalf of Executive immediately prior to his
Retirement or death) covering Executive and his spouse for each of the five
years.
Reimbursement
of the above expenses shall be made on the last day of each calendar quarter
during which Executive has submitted reasonable documentation for such
expenses. In addition, during such five-year period, Executive shall
continue to be eligible to participate, at the Company’s cost, in such personal
umbrella insurance coverage and medical check-up benefit plans as may be
maintained, from time to time, by the Company for its senior
executives. The benefits provided under subparagraphs 2(b) and 2(c)
above shall be payable for five years commencing on the earlier of Retirement
or
Executive’s death and shall continue for the five-year period whether or not
Executive survives for the entire period. The benefits provided by
paragraph 2(a) above and participation in the Company’s personal umbrella
insurance coverage and medical check-up benefit plan shall not be payable
if
Executive dies prior to Retirement and, if otherwise payable, shall terminate
in
any event on the earlier to occur of Executive’s death or the expiration of five
years after Retirement.
3.
Term; Change of
Control. The term of this Agreement shall begin on the date
stated above and shall terminate at the end of the fifth calendar year following
the Executive’s Retirement; provided, however, that this Agreement shall
immediately terminate if, prior to Retirement: (a) a Change of
Control of the Company as defined in the Change of Control Agreement between
Executive and the Company dated as of April 1, 2000, as the same may
be amended
or restated from time to time (“Change of Control Agreement”) occurs; and (b)
Executive’s employment by the Company terminates at a time and under
circumstances in which Executive becomes entitled to receive all
of the benefits provided by the Change of Control
Agreement.
4.
Completed Portions
of
Plan. The parties acknowledge and agree that (i) the “Company
Contribution Offset” to the Company’s SERP plan (including any successor SERP
plan) has been waived by the Company as contemplated by the action of the
Compensation Committee on Xxxxx 0, 0000, (xx) all other portions of the Plan
contemplated by such Committee action (other than those described in paragraphs
1 and 2 above) have been completed, (iii) all applicable conditions have
been
satisfied and (iv) all vesting periods have run.
5.
Consulting
Services. During the five-year period commencing on the date
of Retirement, Executive and the Company may enter into a consulting arrangement
on terms mutually acceptable to each. Executive agrees to negotiate
in good faith the terms of any such arrangement.
6.
Successor to
Invacare. The Company shall not consolidate with or merge into
or with any other corporation, or transfer all or substantially all of its
assets to another corporation, unless such other corporation shall assume
this
Agreement in a signed writing and deliver a copy thereof to
Executive. Upon such assumption, the successor corporation shall
become obligated to perform the obligations of the Company under this Agreement
and the term “Company” as used in his Agreement shall be deemed to refer to such
successor corporation.
7.
Notices. Notices
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered in person or by
confirmed facsimile transmission (Chairman of the Board of the Company in
the
case of notices to the Company and to Executive in the case of notices to
the
Executive) or mailed by United States registered mail, return receipt requested,
postage prepared, addressed as follows (or to such other address as may be
specified in accordance herewith):
If
to Company:
Invacare
Corporation
Xxx
Xxxxxxxx Xxx
X.X.
Xxx 0000
Xxxxxx,
Xxxx 00000
Attention: Senior
Vice
President—Human Resources
If
to Executive:
A.
Xxxxxxx Xxxxx, III
[omitted]
8.
Post-Mortem Payments;
Designation of Beneficiary. In the event that, following the
date of Retirement, the Executive is entitled to receive any payments pursuant
to this Agreement and Executive dies, such payments shall be made to the
Executive’s beneficiary designated hereunder. At any time after the
execution of this Agreement, the Executive may prepare, executive, and file
with
the Secretary of the Company a copy of the Designation of Beneficiary form
attached to this Agreement as Exhibit A. Executive shall thereafter
be free to amend, alter or change such form; provided, however,
that any such amendment, alteration or change shall be made by filing a new
Designation o Beneficiary form with the Secretary of the Company. In
the event Executive fails to designate a beneficiary, following the death
of
Executive all payments of the amounts specified by this Agreement which would
have been paid to the Executive’s designated beneficiary pursuant to this
Agreement shall instead be paid to Executive’s spouse, if any, if she survives
Executive or, if there is no spouse or she does not survive Executive, to
Executive’s estate.
9.
Governing
Law. All questions concerning the construction, validity and
interpretation of this Agreement and the exhibits hereto will be governed
by and
construed in accordance with the internal laws of the State of Ohio, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of Ohio or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of Ohio.
IN
WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written.
/s/
A. Xxxxxxx Xxxxx
III
INVACARE CORPORATION
A.
Xxxxxxx Xxxxx III
APPROVED:
By /s/ Xxxxxx
Xxxx
Senior
Vice
President--
/s/ Xxxxx
X.
Xxxxxx Human
Resources
Chairman,
Compensation, Management
Development
and Corporate Governance
Committee
Exhibit
A
DESIGNATION
OF BENEFICIARY
To:
Invacare Corporation
Attn: Secretary
I,
the undersigned, A. Xxxxxxx Xxxxx,
III, am a party to a certain Retirement Benefit Agreement with Invacare
Corporation, an Ohio corporation, dated as of February 4, 2008 (the
“Agreement”). Pursuant to the agreement, I have the right to
designate a person or persons to receive, in the event of my death, any amounts
that might become payable to me under the Agreement. I hereby
exercise this right and direct that, upon my death, any amounts payable to
me
under the Agreement shall be distributed in the proportions set forth below
to
the following person(s) if he, she or they survive me, namely:
|
Beneficiary
|
Relationship
|
Percent
Share
|
|
Xxxxxxx
Xxxxx
|
Wife
|
100%
|
If
none of the above-designated person
(s) survives me, any amounts payable under the Agreement shall be distributed
to
A. Xxxxxxx Xxxxx XX (50%) and Xxxxxxxxx Xxxx (50%).
Any
and all previous designations of
beneficiary made by me are hereby revoked, and I hereby reserve the right
to
revoke this designation of beneficiary.
|
Date
February 4, 2008
|
|
/s/ A. Xxxxxxx Xxxxx, III | |
| A. Xxxxxxx Xxxxx, III | |||
