EXHIBIT 10(b)
X.X. XXXXXXXXX & SONS COMPANY
NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION AGREEMENT
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This AGREEMENT made this _____ day of ________________, _____, by and between
X.X. XXXXXXXXX & SONS COMPANY, a Delaware corporation (hereinafter called the
"Company"), and ___________________________ (hereinafter called "Director").
W I T N E S S E T H
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WHEREAS, the Director is a member of the Board of Directors of the Company (the
"Board"), or has been nominated for election as a member of the Board;
WHEREAS, the Director is not an employee of the Company or any subsidiary of the
Company; and
WHEREAS, the Company and the Director desire to enter into this Agreement with
respect to compensation earned by the Director from the Company for the period
commencing with the calendar quarter beginning immediately after the date hereof
and continuing so long as the Director shall continue to serve as a director of
the Company or until terminated by the Board in accordance with Section 3 or by
the Director in accordance with Section 4;
NOW, THEREFORE, in consideration of the Director's service as a member of the
Board, it is agreed:
1. As compensation for such services, the Company agrees to pay to the
Director during the periods specified in Section 2(d) and Section 2(e), as
applicable, the aggregate amounts specified pursuant to Section 2.
2. (a) The Company shall set up on its books an interest account and/or
a stock equivalent account in the name of the Director as set forth in
Section 2(b) (the "Interest Account") and Section 2(c) (the "Stock
Equivalent Account") , respectively:
(b) The Company shall credit to the Interest Account:
(i) An amount equal to ____ percent (____%) of the annual retainer
fee for services as a director of the Company, to be credited
quarterly for each month or part thereof during which the
Director serves as a director of the Company subsequent to the
effective date of this Agreement;
(ii) An amount equal to ____ percent (____%) of any fees for
attendance at meetings of the Board or any committee of the
Board and any fees for serving as a member or chairman of any
committee of the Board, as from time to time determined by the
Board, in respect of services performed subsequent to the
effective date of this Agreement; and
(iii) An amount equivalent to interest on the balance (including
interest theretofore credited) from time to time credited to
such account, to be credited quarterly at a rate equal to the
then current yield obtainable on United States government bonds
having a maturity date of approximately five years.
The amounts properly to be credited to the Interest Account shall in the
event of dispute be determined by the Board, and such determination shall
be binding and conclusive.
(c) The Company shall credit to the Stock Equivalent Account:
(i) An amount equal to ____ percent (____%) of the annual retainer
fee for services as a director of the Company, to be credited
quarterly for each month or part thereof during which the
Director serves as a director of the Company subsequent to the
effective date of this Agreement;
(ii) An amount equal to ____ percent (____%) of any fees for
attendance at meetings of the Board or any committee of the
Board and any fees for serving as a member or chairman of any
committee of the Board, as from time to time determined by the
Board, in respect of services performed subsequent to the
effective date of this Agreement; and
(iii) On the applicable dividend payment date, an amount equal to the
dividend paid per share of Company common stock for each Share
Equivalent (as defined below) in the Stock Equivalent Account as
of the applicable record date.
The dates upon which amounts are credited to the Stock Equivalent
Account shall be "Credit Dates." Amounts credited to the Stock
Equivalent Account shall be converted into Company common stock
equivalents ("Share Equivalents") on each Credit Date. The number of
Share Equivalents shall be determined by dividing the amount credited
to the Stock Equivalent Account on each Credit Date by the average of
the high and low transaction prices for the Company common stock
reported in the New York Stock Exchange Composite Transactions report
for such day ("Fair Market Value"). Fractional Share Equivalents will
be computed to four decimal places.
The amounts and number of Share Equivalents properly to be credited to
the Stock Equivalent Account shall in the event of dispute be
determined by the Board, and such determination shall be binding and
conclusive.
(d) Commencing with the first day of the calendar month next following (i)
termination of the Director's service as a director of the Company or
(ii) the Director attaining age 65, whichever later occurs, the
Company shall pay to the Director the amount then credited to the
Interest Account, in either (x) a lump sum amount or (y) equal (as
nearly as possible) annual installments, the number of which shall be
the lesser of ten and the number of years during which the Director
served as a director of the Company after the date of this Agreement,
as designated by the Director in writing.
(e) Commencing with the first day of the calendar month next following (i)
termination of the Director's service as a director of the Company or
(ii) the Director attaining age 65, whichever later occurs, the
Company shall pay to the Director the Cash Value (as defined below) of
the Share Equivalents in the Stock Equivalent Account, in either (x) a
lump sum amount or (y) annual installments, the number of which shall
be the lesser of ten and the number of years during which the Director
served as a director of the Company after the date of this Agreement,
as designated by the Director in writing. The "Cash Value" of the
Stock Equivalent Account as of any determination date shall be equal
to the product of the number of Share Equivalents accumulated in the
Stock Equivalent Account multiplied by the Fair Market Value on such
determination date. In the event the Cash Value is to be paid in
annual installments, the Company shall pay to the Director the Cash
Value as of the most recent determination date, divided by the total
number of payments to be
made (or remaining to be paid).
(f) Upon the death of the Director prior to complete distribution to the
Director of the amount credited to the Director's Interest Account
and/or Stock Equivalent Account, any undistributed amount shall be
paid, as soon as practicable after the Director's death, in a lump sum
to such beneficiaries and in such proportions among them as the
Director shall have designated in the latest instrument in writing
filed by the Director with the Company; provided, however, that the
Director may specify that such undistributed amount (together with
interest or dividend equivalents to be thereafter credited to such
account as above provided) shall be paid to the Director's spouse in
annual installments (substantially as provided in (d) and (e) above),
commencing as soon as practicable after the Director's death, the
aggregate number of which (including installments, if any, paid to the
Director before the Director's death) shall be the lesser of ten and
the number of years during which the Director served as a director
after the date of this Agreement. If there shall be no beneficiary
designated or in existence at the Director's death, any undistributed
amount shall be paid to the executor or administrator of the
Director's estate. If payments are being made in installments to the
Director's spouse, then upon the spouse's death, any amount then
undistributed shall be paid as soon as practicable after such spouse's
death, in one lump sum to the executor or administrator of the
spouse's estate.
3. The Board may, by action taken before any annual meeting of the
stockholders of the Company, terminate the continued effectiveness of
Section 2 of this Agreement, so that no further amounts (other than
interest as provided in Section 2(b)(iii) and dividend equivalents as
provided in Section 2(c)(iii)) are credited to the account of the
Director from and after such annual meeting date.
4. The Director may, by filing with the Company a written direction to such
effect, terminate the continued effectiveness of Section 2 of this
Agreement so that no further amounts (other than interest as provided in
Section 2(b)(iii) and dividend equivalents as provided in Section
2(c)(iii)) are credited to the account of the Director from and after the
calendar quarter beginning after the filing of such direction. No
termination pursuant to this Section shall adversely affect the rights of
the Director, the Director's personal representative or designated
beneficiary, to receive the amounts theretofore credited to the Director's
account, with interest or dividend equivalents thereon, as applicable, as
provided in this Agreement.
5. The Director shall have no power to commute, encumber, sell or otherwise
dispose of the rights provided herein and such rights shall be
nonassignable and nontransferable.
6. The Company shall not be obligated to set aside any assets to satisfy its
obligations hereunder. Neither the Director nor any spouse or other
beneficiary shall have any claim against any specific assets of the
Company, but shall have only the rights of a general creditor of the
Company.
7. In the event of any stock split, stock dividend, spin-off, split-up,
recapitalization, merger, consolidation, combination or exchange of shares,
liquidation or the like, the number and class of Share Equivalents credited
to the Stock Equivalent Account shall be appropriately adjusted by the
Board or a committee designated by the Board.
8. This Agreement shall be construed and interpreted in accordance with the
laws (other than those pertaining to conflicts of law) of the State of
Illinois, and shall be binding
upon and inure to the benefit of the Director, the Company and the heirs,
executors, administrators, assigns and successors of each.
IN WITNESS WHEREOF, the parties have signed this Agreement on the day and year
first above written.
X.X. XXXXXXXXX & SONS COMPANY
By By
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Director Title
