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DIRECTOR'S DEFERRED COMPENSATION AGREEMENT
AGREEMENT, made as of the _____ day of ____________, 19____, between X.X.
XXXXX CO., a Wisconsin corporation ("Company") and _________________________
("Director").
WITNESSETH:
WHEREAS, Director is now serving or has previously served as a director of
the Company, and the Company desires to provide such Director with a tax
deferral opportunity in the form of Company common stock; and
WHEREAS, the Board of Directors of the Company has adopted a plan
permitting Directors of the Company to elect to defer portions of their fees at
the times and upon the terms and conditions of that plan;
WHEREAS, the terms of such deferrals are reflected in individual deferral
agreements that have been executed from time to time with the Directors of the
Company, and
WHEREAS, the parties desire to execute a new agreement to reflect recent
changes adopted by the Board of Directors,
NOW, THEREFORE, in consideration of the premises and the mutual benefits
to be derived herefrom, IT IS AGREED AS FOLLOWS:
1. DEFERRED COMPENSATION ACCOUNT
There shall be created on the books of the Company a Director's Deferred
Compensation Account (the "Account"), which shall be credited with the
amounts specified in Director's elections under this Deferred
Compensation Agreement (the "Election").
Elections shall be in writing, made prior to the beginning of the year,
or partial year, in which the fees would otherwise be paid, and filed
with the Corporate Controller of the Company. Such election shall be
effective with respect to fees to be paid in fee periods occurring in the
following year.
Elections with respect to fees shall be in an amount of $________ or a
multiple thereof.
An Election shall be irrevocable with respect to the period to which it
relates and shall continue in effect each like period thereafter until
revoked or amended in writing with
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respect to periods beginning after the filing with the Company of such
written revocation or amendment.
2. VALUATION OF ACCOUNT
Whenever amounts are withheld from the Director's fees, the Director's
Account shall be credited with a number of stock units, calculated by
converting the amount withheld into a number of whole or fractional stock
units as if the amounts had been used to purchase Class A non-voting
common stock of the Company at the price determined under paragraph 5 of
this Agreement. The Account shall also be credited with additional stock
units whenever dividends are paid on the Class A non-voting common stock
of the Company, calculated by assuming that such dividends were used to
purchase additional stock units at the price determined under paragraph 5
of this Agreement. The Account shall be credited from time to time with
additional shares of stock units equal in number to the number of shares
granted in any stock dividend or split to which the holder of a like
number of shares of Class A non-voting common stock would be entitled.
The Account shall likewise be credited with the stock unit equivalent of
all other distributions made with respect to shares of Class A non-voting
common stock; in the event of a distribution of preferred stock, such
preferred stock shall be valued at is par value (or its voluntary
liquidating price, if it does not have a par value).
3. DISTRIBUTIONS TO DIRECTOR FOLLOWING TERMINATION OF EMPLOYMENT
(a) If the Director's service as a director is terminated due to
any reason, including his retirement, disability, or death, and if
no application and approval under 3(b) has been made, the Company
shall distribute to Director, or his Beneficiary, each year for a
fixed period of ten years, shares of the Class A non-voting common
stock equal to the allocable part of the number of stock units of
his Account determined as of end of each fiscal year. Thus, the
first distribution shall be one-tenth of the number of stock units
then credited to such account, the second one-ninth of the then
number of stock units, etc. Such distributions shall be made within
75 days following the end of the Company's fiscal year, commencing
with the first fiscal year end after the date of termination of
employment. The number of stock units in the Account shall be
reduced by the number of shares of Class A non-voting common stock
distributed in each distribution.
(b) Upon application of the Director the Company may in its
uncontrolled discretion and upon such terms and conditions as the
Board of Directors determines, pay Director the amount credited to
the Director's Account in a different number of installments (but
not to exceed ten) or in a lump sum on a discount or other basis,
provided, however, that Director shall not be thereby
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released from any of the terms and conditions hereof prior to the
expiration of the period which would apply if the manner of payment
had not been changed.
4. DISTRIBUTION TO BENEFICIARY OR ESTATE OF DIRECTOR
(a) In the event of the Director's death, annual distributions
will be made to the Director's beneficiary as follows:
(1) If the Director dies prior to termination of
employment, the distributions will be in the same annual
amounts and for the same number of years as the distribution
would have been received had the Director terminated
employment on the date of death and lived for the shorter of
10 years or the term permitted under 3(b) or the elected term
years thereafter;
(2) If the Director dies after employment has
terminated, the distributions will be in the same annual
amounts as were being made or were distributable at the date
of death for the remaining period that distributions would
have been made had the Director lived.
(b) The term "Beneficiary" as used herein includes the plural and
means any person(s), including corporation or individual
beneficiary(s), designated by Director in a written instrument in a
form acceptable to and filed with the Company or by a specific
appointment in Director's will referring to this Agreement.
Director may designate a primary beneficiary and a contingent
beneficiary provided, however, that the Company may reject any such
instrument tendered for filing if it contains successive
beneficiaries or contingencies unacceptable to it. In the absence
of an acceptable designation or if the Beneficiary so designated
predeceases Director, the payments shall be paid to Director's
estate. If all Beneficiaries who survive Director shall die before
receiving the full amounts payable hereunder, then the payments
shall be paid to the estate of the Beneficiary last to die. The
Company shall not be charged with notice of the appointment of a
personal representative of Director until it shall have received a
certified copy of the appointment.
5. ACCOUNTING AND VALUATION DETERMINATIONS
For the purpose of determining the amounts credited to the Account
pursuant to paragraph 2, the value of a stock unit shall be set equal to
the Fair Market Value of the Class A non-voting common stock. Fair
Market Value on any date shall mean, with respect to the Company's Class
A non-voting common stock or any other stock of the Company, if the stock
is then listed and traded on a registered national securities exchange,
or is quoted in the NASDAQ National Market System, the average of the
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high and low sale prices reported in composite transactions as reported
in The Wall Street Journal (Midwest Edition) for such date or, if such
date is not a business day or if no sales of Company stock shall have
been reported with respect to such date, the next preceding date with
respect to which sales were reported. In the absence of reported sales
or if the stock is not so listed or quoted, but is traded in the
over-the-counter market, Fair Market Value shall be the average of the
closing bid and asked prices for such shares on the relevant date.
6. CONVERSION FROM PRIOR AGREEMENT
(a) As of the earlier of the date of election to convert under
paragraph 6(b) or August 1, 1998, deferrals under the prior deferral
agreement shall no longer be available. Any new amounts deferred
shall be under the terms of this Agreement, but such prior agreement
shall remain in effect with respect to amounts previously deferred,
unless conversion is made under the terms of paragraph 6(b) hereof.
Any remaining unconverted balances under any prior agreement will
continue to be valued as described in such agreement until July 31,
2002, after which date any increase in value for the following year
will be based on the closing yield rate on a 30-year U.S. Treasury
Bond as of the preceding July 31.
(b) If Director elects in writing, the amount contained in the
Director's Account under the terms of the prior agreement can be
converted into amounts deferred under the terms of this Agreement,
and distributions will thereafter be made solely under the terms of
this Agreement except that distributions to Directors to whom
distributions have commenced prior to the date hereof shall continue
to be made at the times provided in the prior Agreement. Such
conversion may only be elected on November 19, 1997. The number of
stock units credited to the Director's Account shall be determined
as of the date of such conversion by valuing the Director's Account
as of such date under the terms of the prior agreement, and then
converting such value into an equivalent number of stock units under
this Agreement by dividing such sum by the transfer price as
determined under paragraph 6(c).
(c) The transfer price for the conversion of amounts held under
the Director's prior deferral agreement shall be the Fair Market
Value of a stock unit as determined under the provisions of
Paragraph 5 for the date of conversion. A one-time discount of 10%,
as determined by the Board of Directors of the Company, may be
offered to the Director if the Director converts amounts at the
conversion date offered by the Company.
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7. GENERAL PROVISIONS
(a) This Agreement shall not be subject to termination,
modification or amendment by the Company with respect to any rights
which have accrued hereunder, the Company reserving the right,
however, to terminate, modify or amend this Agreement effective
prospectively as of the first day of any fiscal year upon not less
than 15 days prior written notice to Director.
(b) The Company shall have the right to assign all of its right,
title and obligation in and under this Agreement upon a merger or
consolidation in which the Company is not the surviving entity or to
the purchaser of substantially its entire business, provided such
assignee or purchaser assumes and agrees to perform after the
effective date of such assignment all of the terms, conditions and
provisions imposed by this Agreement upon the Company. Upon such
assignment, all of the rights, as well as all obligations, of the
Company under this Agreement shall thereupon cease and terminate.
(c) Any action to be taken by the Company under the provisions of
this Agreement shall require the affirmative vote of the majority of
the Board of Directors.
(d) Neither Director nor Director's Beneficiary or estate shall
have power to transfer, assign, anticipate, mortgage or otherwise
encumber any rights or any amounts payable hereunder; nor shall any
such rights or payments be subject to seizure for the payment of any
debts, judgments, alimony, or separate maintenance, or be
transferable by operation of law in event of bankruptcy, insolvency,
or otherwise.
(e) This Agreement shall not supersede any other service,
retainer, or employment contract, whether oral or in writing,
between the Company and Director, nor affect or impair the rights
and obligations of the Company and Director, respectively, under any
other contract, arrangement, or voluntary pension, profit-sharing or
other compensation plan of the Company, and the benefits and
payments under this Agreement shall be in addition to any and all of
Director's benefits to which he may be entitled under any other such
contract, arrangement or voluntary plan. Nothing contained herein
shall impose any obligation on the Company to continue the tenure
or employment of Director.
(f) The Company shall have the right to transfer its rights and
obligations hereunder to the trustees of a grantor trust established
by the Company and shall have the right to transfer sufficient
shares of common stock to such trust to satisfy its obligations
hereunder.
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(g) If the scheduled payments under this Agreement would
result in disallowance of any portion of the Company's
deduction therefore under Section 162(m) of the Code, the
payments shall be limited to the amount which is
deductible, with the balance to be paid as soon as
deductible by the Company. However, in such event, the
Company shall pay the Director on a quarterly basis an
amount of interest based on the prime rate recomputed each
quarter on the unpaid scheduled payments.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by
its Officers thereunto duly authorized and its corporate seal to be hereunto
affixed, and Director has hereunto set his hand and seal as of the day and year
first above written.
X.X. XXXXX CO.
By: (SEAL)
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Xxxxxxxxx X. Xxxxxx
President Director
Attest:
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Xxxxxx X. Xxxxxxx
Assistant Secretary
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