DEFERRED COMPENSATION AGREEMENT
BETWEEN
JOHNSTOWN AMERICA INDUSTRIES, INC.
AND
XXX
THIS DEFERRED COMPENSATION AGREEMENT ("AGREEMENT") is made and entered
into this 30th day of November, 1997, by and between JOHNSTOWN AMERICA
INDUSTRIES, INC., a Delaware corporation ("CORPORATION") and XXX ("EXECUTIVE").
R E C I T A L S:
A. EXECUTIVE is currently employed by CORPORATION and is considered by
CORPORATION to be a valuable and key employee of the CORPORATION.
B. It is the desire of EXECUTIVE to enter into an arrangement with
CORPORATION whereby EXECUTIVE may defer a portion of the compensation to be paid
to him under the terms of his employment with CORPORATION.
C. The parties desire to set forth the terms and conditions upon which the
CORPORATION shall pay such deferred compensation to EXECUTIVE or his designated
beneficiary under an unfunded arrangement that will be maintained primarily to
provide the deferred compensation benefits for EXECUTIVE who is a member of a
select group of management or highly compensated executives of the CORPORATION,
for purposes of the
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Employee Retirement Income Act of 1974.
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained and in reliance upon the recitals, set forth above and
incorporated by reference herein, the parties hereto agree as follows:
1. DEFERMENT OF COMPENSATION.
EXECUTIVE shall have the option, during the term of his employment with
CORPORATION, to elect to defer all or a portion of his compensation not yet
earned for each TERM (as defined herein) of EXECUTIVE's employment with the
CORPORATION. For purposes of this AGREEMENT, a "TERM" of employment for the
EXECUTIVE will be the 12-month period beginning on January 1st of each year
EXECUTIVE is employed by the CORPORATION and ending on December 31st. EXECUTIVE
shall exercise this option by providing CORPORATION with a written notice
indicating the percentage or dollar amount of EXECUTIVE's compensation that the
EXECUTIVE desires to defer over the following TERM, which notice must be
provided to the CORPORATION on or before December 15th of each year prior to the
subsequent TERM.
2. DEFERRED ACCOUNT.
In order to maintain an accurate record of the cumulative amounts of
compensation deferred by EXECUTIVE, the CORPORATION shall establish a
bookkeeping account in the name of EXECUTIVE ("DEFERRED ACCOUNT"). The amount of
compensation deferred by EXECUTIVE each year shall be credited to the
EXECUTIVE'S
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DEFERRED ACCOUNT.
3. ADDITIONS TO DEFERRED COMPENSATION ACCOUNT.
The balance of the EXECUTIVE'S DEFERRED ACCOUNT shall be deemed to have
been invested in an investment satisfactory to the CORPORATION and offered as a
"deemed" investment to EXECUTIVE. While any part of the EXECUTIVE'S DEFERRED
ACCOUNT is deemed to have been invested in one or more of the above described
accounts, the DEFERRED ACCOUNT shall be deemed to have received (and shall be
credited with) all interest, dividends, stock splits, unrealized gains,
unrealized losses or other property which would have been received with respect
to such investment as if the CORPORATION had actually owned such investment. Any
such amounts or property shall be deemed to have been reinvested in the DEFERRED
ACCOUNT as of the date it would have otherwise been received. The investments
described above shall be deemed to have been made on such dates as are selected
by the CORPORATION at the price then in effect, but in no event later than 60
days after the CORPORATION receives the annual election from EXECUTIVE as to the
amount of compensation to be deferred by EXECUTIVE for the upcoming 12-month
period.
4. ACTUAL INVESTMENT NOT REQUIRED.
Although the DEFERRED ACCOUNT balance that is potentially payable to
EXECUTIVE hereunder shall be measured by the value of and income on the
investments described in Paragraph 3 above, the CORPORATION need not actually
make any such investments. If the CORPORATION, in its discretion, should from
time to time make any
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similar investment, such investment shall be solely for the CORPORATION's own
account, and the EXECUTIVE shall have no right, title or interest in any such
investment. Accordingly, the EXECUTIVE is solely an unsecured creditor of the
CORPORATION with respect to any benefits payable to the EXECUTIVE under its
DEFERRED ACCOUNT or this AGREEMENT.
5. TRIGGERING EVENTS FOR PAYMENT OF DEFERRED COMPENSATION.
Any compensation amounts deferred under this AGREEMENT shall be payable to
the EXECUTIVE upon the FIRST to occur of the following ("TRIGGERING EVENT"):
5.1 RETIREMENT. Upon the EXECUTIVE's reaching his "RETIREMENT AGE," as
defined below, EXECUTIVE shall be entitled to receive the balance of his or her
DEFERRED ACCOUNT in accordance with the PAYOUT OPTION ELECTION (as defined in
Paragraph 6 below) then in effect for EXECUTIVE under the terms of Paragraph 6
below. For purposes of this AGREEMENT, the EXECUTIVE's retirement age shall be
the date upon which EXECUTIVE reaches age 65 UNLESS the EXECUTIVE provides the
CORPORATION with a written notice at least 12 MONTHS in advance that the
EXECUTIVE intends to have his or her "RETIREMENT AGE" defined as the date for
Early Retirement, as that term is defined from time to time by the CORPORATION
policy then in effect, or as the date for Late Retirement, as that term is
defined from time to time by the CORPORATION policy then in effect ("RETIREMENT
ELECTION"). Any
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RETIREMENT ELECTION by EXECUTIVE to the CORPORATION that EXECUTIVE desires to
have his or her RETIREMENT AGE defined as the Early Retirement Age or the Later
Retirement Age (as determined by Company policy from time to time), rather than
age 65, will take effect 12 MONTHS from the date of receipt thereof by the
CORPORATION. If the EXECUTIVE reaches Early Retirement Age or Later Retirement
Age prior to the expiration of 12 months from the receipt of a modification to a
RETIREMENT ELECTION, payment of any DEFERRED ACCOUNT balance hereunder will be
governed by the default definition of "RETIREMENT AGE" (the date upon which
EXECUTIVE reaches age 65).
5.2 TERMINATION OF EMPLOYMENT. In the event EXECUTIVE's employment with the
CORPORATION is terminated for any reason (other than disability, retirement or
death), the CORPORATION shall pay to the EXECUTIVE the entire balance of the
EXECUTIVE's DEFERRED ACCOUNT, payable in a single sum on the first day of the
first month following EXECUTIVE's termination from the CORPORATION.
5.3 DISABILITY. In the event of EXECUTIVE's "DISABILITY" (as defined
herein), the CORPORATION shall pay to EXECUTIVE the balance of his or her
DEFERRED ACCOUNT in accordance with the PAYOUT OPTION ELECTION (as defined in
Paragraph 6 below) then in effect for EXECUTIVE under the terms of Paragraph 6
below. For purposes of this AGREEMENT, the EXECUTIVE shall be considered to be
disabled when a duly licensed physician selected by the CORPORATION determines
that, because of ill health, accident, disability or general inability because
of age, the
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EXECUTIVE is no longer able, properly and satisfactorily, to perform his regular
duties as an EXECUTIVE of the CORPORATION ("DISABILITY").
5.4 DEATH. In the event of EXECUTIVE's death, the CORPORATION shall pay to
the beneficiary designated by EXECUTIVE the entire balance of the EXECUTIVE's
DEFERRED ACCOUNT in a single sum on the first day of the first month following
the EXECUTIVE's death.
5.5 HARDSHIP. In the event the EXECUTIVE incurs a "HARDSHIP" (as defined
herein) as a result of an unforeseeable emergency, the CORPORATION shall pay to
the EXECUTIVE such sums from the EXECUTIVE's DEFERRED ACCOUNT, payable in a
single sum, as the CORPORATION determines reasonably needed to satisfy the
emergency need. For purposes of this AGREEMENT, a "HARDSHIP" shall be defined as
a severe financial hardship to the EXECUTIVE resulting from a sudden and
unexpected illness or accident of the EXECUTIVE or of a dependent [as defined in
Internal Revenue Code Section 152(a)] of the EXECUTIVE, loss of the EXECUTIVE's
property due to casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the EXECUTIVE.
The circumstances that will constitute an unforeseeable emergency will depend
upon the facts of each case, but, in any case, payment may not be made to the
extent that such hardship is or may be relieved:
(a) Through reimbursement or compensation by
insurance or otherwise,
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(b) By liquidation of the EXECUTIVE's assets, to the
extent the liquidation of such assets would not itself cause severe
financial hardship, or
(c) By cessation of deferrals under the plan.
6. PAYMENT OF DEFERRED COMPENSATION.
Upon the commencement of this AGREEMENT, the EXECUTIVE shall provide the
CORPORATION with an initial Payout Option Election which will set forth the
EXECUTIVE's desired payment option from among the options described below
("PAYOUT OPTION ELECTION"). In the event the EXECUTIVE fails to provide the
CORPORATION with a written PAYOUT OPTION ELECTION, any DEFERRED ACCOUNT balances
due to EXECUTIVE hereunder will be paid in a lump sum under subparagraph (a)
below.
Notwithstanding the foregoing, the EXECUTIVE may modify his or her PAYOUT
OPTION ELECTION by providing the CORPORATION with a written modification to his
or her previous PAYOUT OPTION ELECTION at least 12 MONTHS prior to a TRIGGERING
EVENT. Any modification to a PAYOUT OPTION ELECTION will take effect 12 MONTHS
from the date of receipt thereof by the CORPORATION. If a TRIGGERING EVENT
occurs prior to the expiration of 12 months from the receipt of a modification
to a PAYOUT OPTION ELECTION, payment of any DEFERRED ACCOUNT balance hereunder
will be governed by the PAYOUT OPTION ELECTION in effect prior to any
modifications submitted by EXECUTIVE.
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Unless otherwise provided in Paragraph 5 above, upon the occurrence of the
first "TRIGGERING EVENT" as set forth in Paragraph 5 above, the CORPORATION
shall pay to EXECUTIVE the balance of his or her DEFERRED ACCOUNT in accordance
with one of the following payout options which EXECUTIVE has selected by the
valid PAYOUT OPTION ELECTION then on file for the EXECUTIVE with the
CORPORATION. In the event there is no valid PAYOUT OPTION ELECTION on file with
the CORPORATION upon the occurrence of the first TRIGGERING EVENT, the balance
of the EXECUTIVE's DEFERRED ACCOUNT shall be paid out in a lump sum in
accordance with subparagraph (a) below.
(a) LUMP SUM. The entire balance of the EXECUTIVE's
DEFERRED ACCOUNT shall be payable in a single sum on the first day of
the first month following the TRIGGERING EVENT.
(b) INSTALLMENT WITH STATED INTEREST. The entire
balance of the EXECUTIVE's DEFERRED ACCOUNT, together with interest
from the date of the TRIGGERING EVENT on the balance of the DEFERRED
ACCOUNT remaining from time to time unpaid at the standard prime rate
as stated in the WALL STREET JOURNAL from time to time, shall be
payable in equal monthly installments over the period of time
determined by EXECUTIVE in his or her PAYOUT OPTION ELECTION (not to
exceed 15 years), commencing with the first day of the first month
following the TRIGGERING EVENT.
(c) INSTALLMENT WITH INVESTMENT INTEREST. The entire
balance of the EXECUTIVE's DEFERRED ACCOUNT, together with a credit for
all interest, dividends, stock splits, unrealized gains, unrealized
losses or other property which would have been received from the date
of the TRIGGERING EVENT on the balance of the DEFERRED ACCOUNT
remaining from time to time unpaid as if the unpaid balance of the
DEFERRED ACCOUNT was invested pursuant to the provisions of Paragraph 3
above, shall be payable in fractional monthly installments over the
period of time determined by EXECUTIVE in his or her PAYOUT OPTION
ELECTION (not to exceed 15
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years), the fraction of which shall be one (1) divided by the
difference of the total payout period minus 1 for each month that
EXECUTIVE has received a monthly payment, commencing with the first day
of the first month following the TRIGGERING EVENT. BY WAY OF EXAMPLE,
IF THE EXECUTIVE HAD SELECTED A PAYOUT PERIOD OF 5 YEARS (60 MONTHS),
THE FRACTIONAL PAYMENT FOR THE FIRST MONTH WILL BE THE DEFERRED ACCOUNT
BALANCE X 1/60TH. THE FRACTIONAL PAYMENT FOR THE SECOND MONTH WILL BE
THE DEFERRED ACCOUNT BALANCE X 1/59TH, AND SO ON.
7. UNFUNDED AND UNSECURED
All payments hereunder shall be paid in cash from the general funds of the
CORPORATION and no special or separate fund shall be established and no other
segregation of assets shall be made to assure the payment of benefits hereunder.
Nothing contained in this AGREEMENT, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship, between CORPORATION and EXECUTIVE or any other person,
nor shall any general assets be considered security for the performance of the
obligations of CORPORATION. Any such assets shall remain a general, unpledged,
and unrestricted asset of CORPORATION.
8. EXECUTIVE RIGHTS.
8.1 UNSECURED GENERAL CREDITOR. The rights of EXECUTIVE, or his designated
beneficiary hereunder, shall be solely those of an unsecured general creditor of
the CORPORATION. The right to receive the benefits specified under this
AGREEMENT may be satisfied only from the general assets of the CORPORATION.
Neither the EXECUTIVE nor any beneficiary designated by EXECUTIVE hereunder has
any right to look to any specific or special property separate from the
CORPORATION to satisfy a claim
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for benefit payments.
8.2 NO BENEFICIAL INTEREST. EXECUTIVE acknowledges and agrees that neither
he nor any beneficiary designated by EXECUTIVE hereunder shall have any rights
or beneficial ownership interest in any general asset the CORPORATION may
acquire or use to help support its financial obligations under this AGREEMENT.
8.3 NO INTEREST IN INVESTMENTS. EXECUTIVE shall have no right, title, or
interest whatever in or to any investments which the CORPORATION may make to aid
it in meeting its obligations under the AGREEMENT. The EXECUTIVE also
understands and agrees that his participation, in any way, in the acquisition of
any such general asset for the CORPORATION shall not constitute a representation
to the EXECUTIVE or any beneficiary designated by EXECUTIVE hereunder that any
of them has a special or beneficial interest in such general asset.
9. AMENDMENTS.
This AGREEMENT may be amended at any time and from time to time by the
mutual written consent of the parties to this AGREEMENT.
10. TERMINATION OF DEFERRED COMPENSATION PLAN.
The CORPORATION reserves the right, in its sole and absolute discretion, to
terminate this AGREEMENT at any time so long as the CORPORATION simultaneously
terminates ALL nonqualified deferred compensation plans then in place with the
CORPORATION. In the event of a termination of this AGREEMENT by the
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CORPORATION, the EXECUTIVE's DEFERRED ACCOUNT shall be paid out in a single lump
sum.
11. GOVERNING LAW.
This AGREEMENT shall be construed and enforced in accordance with the laws
of the State of Illinois.
IN WITNESS WHEREOF the parties have signed this AGREEMENT the day and year
first above written.
CORPORATION EXECUTIVE
JOHNSTOWN AMERICA INDUSTRIES, XXX
INC., a Delaware corporation
By:
------------------------------- By: --------------------------
Its President
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