EXHIBIT 10.12
XXXXX INTERNATIONAL, INC.
DIRECTORS' DEFERMENT OF COMPENSATION AGREEMENT
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AGREEMENT dated November __, 1997, between Xxxxx International, Inc., a
Delaware corporation (hereinafter the "Company") and ________________________,
(the "Director").
WHEREAS, the Director is or is about to become a member of the Board of
Directors of the Company, and
WHEREAS, the Company has agreed to pay fees to the Director for his
services as a director of the Company; and
WHEREAS, the Director desires to defer the receipt of his fees as set forth
in this Agreement;
NOW, THEREFORE, the Company and the Director agree as follows:
1. Election of Deferment. The Director may file with the Company at any
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time an election to defer all or a portion of his annual director's fee payable
with respect to any fiscal year of the Company. Such election shall be
substantially in the form of Exhibit 1 of this Agreement. Such election shall be
effective with respect to all fees that have not been paid during the year of
such election and for all fees for all subsequent years until terminated in
accordance with Section 2.1 hereof or revoked. The Director may revoke an
election by filing with the Company a revocation substantially in the form of
Exhibit 2.
2. Director's Deferment Account. The Company shall maintain a Deferment
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Account to which the fees the Director has elected to defer will be credited as
of the last day of each quarter of the Company's fiscal year.
2.1 Maturity of the Deferment Account. The Director's Deferment Account
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shall mature on the first to occur of the following events:
(a) The last day of the Company's fiscal year in which the Director
dies;
(b) The last day of the Company's fiscal year in which the Director,
for any reason other than death, ceases to be a member of the
Company's Board of Directors; or
(c) The effective date of (i) the dissolution, liquidation or
winding up of the affairs of the Company, or (ii) the sale,
conveyance or transfer of all or substantially all of the
assets of the Company.
3. Phantom Shares. The amount of fees credited to the Director's Deferment
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Account shall be converted into Phantom Shares of the Company's Common Stock. A
Phantom Share is the equivalent of one share of such Common Stock.
3.1. Number of Phantom Shares. The number of Phantom Shares credited
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to the Director's Deferment Account shall be determined by dividing the amount
of fees credited to such Account during a fiscal quarter by the market value of
one share of Common Stock, which shall be the average closing price during the
last twenty (20) trading days of such fiscal quarter. No fractional shares shall
be credited, and any amount of fees that cannot be so credited as Phantom Shares
shall be retained as credits for later conversion into Phantom Shares.
3.2. Dividend Credits. The Director's Deferment Account shall be
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credited with an amount equal to the dividend that would have been paid on the
same number of shares of the Company's Common Stock as the number of Phantom
Shares in the Deferment Account as of the dividend payment date. The amount of
such dividend credits shall be converted as of the last day of each quarter of
the Company's fiscal year into Phantom Shares in the same manner as the
Director's fees are converted.
3.3 Dilution Adjustments. In the event of a stock split or stock
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dividend, the number of Phantom Shares held in the Deferment Account shall be
adjusted in the same manner as the outstanding shares of the Company's Common
Stock are adjusted. In the event of the Company's merger or conversion of its
Common Stock into other securities, the Director's Deferment Account shall be
adjusted to reflect Phantom Shares in such other securities equivalent to those
that would have been received by a shareholder holding the number of shares of
the Company's Common Stock equal to the number of Phantom Shares in the
Director's Deferment Account at the effective date of such merger or conversion
into other securities.
3.4 Payment Upon Maturity. The Director may elect to receive payment
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upon the maturity of the Deferment Account in shares of the Company's Common
Stock equal to the number of Phantom Shares in the Deferment Account, in cash
equal to the market value of such Phantom Shares or in a combination of both.
Such election shall be made substantially in the form of Exhibit 3, no later
than fifteen days after the maturity date. In the absence of such an election,
the form of payment shall be made in the discretion of the Company. The market
value of the Phantom
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Shares shall be the average closing price of the Common Stock during the last
twenty (20) trading days of the quarter of the Company's fiscal year ended
immediately before the maturity date. If the Deferment Account matures by reason
of the Director's death, the election of the form of payment shall be made by
the Director's beneficiary designated substantially in the form of Exhibit 4, or
in the absence of such designation by the personal representative of the
Director's estate and payment shall be made to such beneficiary or personal
representative.
4. Nature of Claim for Payments. Nothing contained in this Agreement and no
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action taken pursuant to the provisions hereof shall be construed to create a
trust of any kind or a fiduciary relationship between the Company and the
Director. The Company shall not be required to set aside or segregate any
assets of any kind to meet any of its obligations hereunder. All obligations of
the Company hereunder shall be reflected by book entries only, and the Director
shall have no rights on account of this Agreement in or to any specific assets
of the Company. Any rights that the Director may have on account of this
Agreement shall be those of a general, unsecured creditor of the Company.
Phantom Shares credited to the Director's Deferment Account shall be
hypothetical and not actual shares and such Phantom Shares shall not be
considered outstanding shares and the Director shall have no rights as a
shareholder with respect to such Phantom Shares.
5. Taxes. The Company shall have the right to deduct from all amounts paid
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in cash any taxes required by law to be withheld with respect to such cash
amounts and, in the case of amounts paid in the form of the Company's shares of
Common Stock, the Director or other person receiving such shares shall pay to
the Company the amount of any taxes which the Company is required to withhold
with respect to such shares before such shares are distributed.
6. Rights Non-Assignable. Neither the Director nor any beneficiary shall
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have any right to assign or otherwise alienate the right to receive payments
hereunder, in whole or in part, which payments are expressly agreed to be
non-assignable and non-transferable, whether voluntarily or involuntarily.
7. Reports to Participating Directors. Within 30 days following the close
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of each fiscal year, the Company shall furnish to such Director a statement of
account reflecting all transactions in such Director's Deferment Account during
the preceding fiscal year, including the balance of such Deferment Account as of
the close of the year.
8. Successors. This Agreement shall be binding upon and shall inure to the
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benefit of the Company, its successors and assigns, the Director and his
personal representatives.
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9. Governing Law. This Agreement shall be construed in accordance with and
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governed by the laws of the State of Delaware.
Signed and sealed on the date first above written.
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Director
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Street and Number
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City and Town
XXXXX INTERNATIONAL, INC.
By:
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Title: Chairman and Chief Executive Officer
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Exhibit 1
ELECTION OF DEFERMENT
Date
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Xxxxx International, Inc.
0000 Xxxxxxxxx Xxx., X.X., 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Gentlemen:
In accordance with the provisions of the Deferment Of Compensation Agreement
dated between the Company and the undersigned, I hereby
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elect to defer % of the annual Director's fee payable to me during the fiscal
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year ending . I understand that this election is
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irrevocable as to that fiscal year and as to each succeeding fiscal year until
revoked in writing filed not later than the last day of the fiscal year
preceding that with respect to which said revocation is to be effective.
Yours truly,
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Receipt of this election is hereby acknowledged this day of
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, 19 .
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XXXXX INTERNATIONAL, INC.
By
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Chairman and Chief Executive Officer
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Title
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