1
EXHIBIT 10(c)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ NONQUALIFIED DEFERRED COMPENSATION AGREEMENT
DATED AS OF JUNE 14, 1999
This ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ NONQUALIFIED DEFERRED COMPENSATION AGREEMENT
(the "Deferral Agreement"), dated as of June 14, 1999, is made and entered into
by and between M.A. ▇▇▇▇▇ COMPANY, a Delaware corporation (the "Company") and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (the "Participant").
1. Purpose. The purpose of this Deferral Agreement is to provide for
the deferral of the payments due to be made to Participant, President and Chief
Executive Officer of the Company, pursuant to Section 6.1.1 of the Employment
Agreement dated as of June 14, 1999, by and between the Company and Participant
(the "Employment Agreement"), in a manner such that Section 162(m) of the
Internal Revenue Code of 1986, as amended ("Section 162(m)") does not apply to
disallow a deduction to the Company for such payments.
2. Administration. The Compensation and Organization Committee of the
Company's Board of Directors (the "Compensation Committee") will administer this
Deferral Agreement, resolve any ambiguities or inconsistencies, and decide all
questions arising in its administration, interpretation or application. Any
decision of the Compensation Committee will be conclusive and binding upon the
Participant or other persons having or claiming an interest in this Deferral
Agreement.
3. Initial Deferral. Subject to Section 8(c), each payment due to be
made to Participant on the dates specified in Section 6.1.1 of the Employment
Agreement will be deferred. The amounts so deferred will be paid in accordance
with the terms of this Deferral Agreement.
4. Deferred Compensation Accounts. As of the first calendar day of each
calendar month specified in Section 6.1.1 of the Employment Agreement, the
amounts that would have been paid to Participant but for this Deferral Agreement
will be credited in equal portions (subject to Section 5(a)) to a Stock Account
and an Investment Account.
5. Amounts Credited to Stock Account.
(a) The number of shares of the Company's common stock ("Stock")
credited to the Stock Account will be equal to the dollar amount of the payment
deferred by the Participant into such account, divided by the closing price of a
share of Stock on the New York Stock Exchange on February 1 of the year the
payment was due to be made. The value of any fractional share will be credited
to the Investment Account, subject to Section 6. The Company will cause to be
transferred to the trust described in
2
Section 9(b) a number of shares of Stock equal to the number credited to the
Stock Account. To the extent necessary for such purpose, the amounts credited to
the Stock Account will be used to acquire shares of Stock through (i) open
market purchases or (ii) purchases from the Company or the Trustee of the
Associates Ownership Trust.
(b) In the event that a cash dividend is paid with respect to the
Stock, the Stock Account will be credited with that number of additional shares
of Stock equal to (i) the cash dividend that would have been received by a
holder of shares of Stock equal to the number of shares previously credited to
the Stock Account, divided by (ii) the closing price of a share of the Stock on
the date the dividend is paid. In the event of a stock dividend (or other
distribution) to the holders of Stock, an appropriate adjustment to the Stock
Account will be made to reflect such dividend. Fractional shares will not be
credited but will be accumulated until equal to a whole share.
6. Amounts Credited to Investment Account. The amounts credited to the
Investment Account will be credited as designated by Participant to one or more
subaccounts. Except as the Compensation Committee may otherwise determine, each
subaccount will correspond to an investment option offered at such time under
the M.A. ▇▇▇▇▇ Company 401(k) and Retirement Plan. Such designations will be
made pursuant to forms and procedures prescribed for such purpose by the
Compensation Committee.
7. Vesting. Participant will be 100% vested in the Stock Account and
the Investment Account (referred to collectively as the "Accounts").
8. Distributions and Payments.
(a) Subject to Section 8(d), the amounts maintained in the Accounts
will be distributed to Participant (i) at the earliest time a corresponding
deduction would not be disallowed by Section 162(m), or (ii) if earlier, upon a
Change in Control (as such term is defined in Participant's Change in Control
Agreement described in Section 9.1 of the Employment Agreement (a "Change in
Control")).
(b) If Participant is a "covered employee," as such term is defined
by Section 162(m), at the end of a taxable period of the Company, the Company
will determine by the 15th day of the second month of the Company's next
succeeding taxable period whether and to what extent any amount may be
distributed to Participant under the Deferral Agreement, the deduction for which
would not be disallowed by Section 162(m). Such amount will promptly be paid to
Participant. Any such distribution will be debited first, to the Investment
Account (to such subaccounts and in such amounts as may be designated by
Participant), and then, to the extent necessary, to the Stock Account. For such
purpose, all Accounts will be valued as near as possible to the date of
distribution.
(c) In the event a Change in Control or an involuntary termination
of employment described in Section 7.4.1 of the Employment Agreement occurs
prior to
3
the due date specified for a payment in Section 6.1.1 of the Employment
Agreement, such payment will promptly be made entirely in cash to Participant.
(d) Notwithstanding Sections 8(a), 8(b) and 8(c), Participant may
defer receipt of an amount otherwise due to be distributed or paid under Section
8(a), 8(b) or 8(c) by making an election in writing in such form and at such
time as may be prescribed for such purpose by the Compensation Committee.
(e) Distributions will be made to the extent practicable in the
form of the assets that correspond to the respective Accounts or subaccounts.
9. Deferral Agreement to be Unfunded; Trust to be Established.
(a) Subject to Section 9(b), (i) the Company will be under no
obligation to segregate or reserve any funds or other assets for purposes
relating to this Deferral Agreement and Participant will have no rights
whatsoever in or with respect to any funds or other assets held by the Company
for purposes of this Deferral Agreement or otherwise; and (ii) the Accounts
maintained for purposes of this Deferral Agreement will merely constitute
bookkeeping records of the Company and will not constitute any allocation
whatsoever of any assets of the Company or be deemed to create any trust or
special deposit with respect to any of the Company's assets.
(b) The Company's obligations under this Deferral Agreement will be
secured by a trust agreement for the benefit of Participant in substantially the
form as Exhibit A hereto. The Company will maintain assets in such trust at
least equal in value to the aggregate obligations of Company to Participant
under the terms of this Deferral Agreement and will follow Section 5(a)
regarding transfers of shares of Stock relating to the Stock Account.
Participant may request that the Compensation Committee direct the trustee of
the trust regarding the investment of the amounts credited to the subaccounts of
the Investment Account; provided, however, that the Compensation Committee may,
but is under no obligation to, so direct the trustee.
10. Miscellaneous Provisions.
10.1 BINDING ON SUCCESSORS; ASSIGNMENT. This Deferral Agreement
will be binding upon and inure to the benefit of the Company, the Participant
and each of their respective successors, assigns, personal and legal
representatives, executors, administrators, heirs, distributees, devisees, and
legatees, as applicable; provided, however, that neither this Deferral Agreement
nor any rights or obligations hereunder will be assignable or otherwise subject
to hypothecation by Participant (except by will or by operation of the laws of
intestate succession) or by the Company, except that the Company may assign this
Deferral Agreement to any successor (whether by merger, purchase or otherwise)
to all or substantially all of the stock, assets or businesses of the Company,
if such successor expressly agrees to assume the obligations of the Company
hereunder.
4
10.2 GOVERNING LAW. This Deferral Agreement will be governed,
construed, interpreted and enforced in accordance with the substantive laws of
the State of Ohio, without regard to conflicts of law principles.
10.3 ENTIRE AGREEMENT. The terms of this Deferral Agreement are
intended by the parties to be the final expression of their agreement with
respect to the subject matter hereof. In the event of any contradiction or
inconsistency between the terms of this Deferral Agreement and any other
agreement with Participant, including, without limitation, the Employment
Agreement, the terms of this Deferral Agreement will control.
10.4 AMENDMENTS. This Deferral Agreement may not be modified, amended,
or terminated except by an instrument in writing, approved by the Company and
signed by the Participant and the Company.
10.5 HEADINGS AND SECTION REFERENCES. The headings used in this
Deferral Agreement are intended for convenience or reference only and will not
in any manner amplify, limit, modify or otherwise be used in the construction or
interpretation of any provision of this Deferral Agreement. All section
references are to sections of this Deferral Agreement, unless otherwise noted.
10.6 BENEFICIARIES. Participant will be entitled to select (and change,
to the extent permitted under any applicable law) a beneficiary or beneficiaries
to receive any amount payable hereunder following Participant's death, and may
change such election, in either case by giving the Company written notice
thereof. In the event of Participant's death or a judicial determination of his
incompetence, reference in this Deferral Agreement to "Participant" will be
deemed, where appropriate, to his beneficiary, estate or other legal
representative.
10.7 WITHHOLDING. The Company will be entitled to withhold from payment
of any amount due hereunder or from any other form of compensation from the
Company any amount of withholding required by law. Participant hereby
acknowledges that he may be liable for certain employment taxes with respect to
amounts deferred pursuant to this Deferral Agreement prior to any payments
hereunder and that, consequently, the Company may be required to deduct and
withhold such employment taxes from amounts otherwise due to Participant or may
request Participant to make other withholding arrangements satisfactory to the
Company.
10.8 CONSTRUCTION. This Deferral Agreement is intended to qualify as a
plan maintained for the benefit of a select group of management or highly
compensated employees within the meaning of the Employee Retirement Income
Security Act of 1974, as amended, and will be construed in accordance with such
intention.
5
IN WITNESS WHEREOF, the parties have executed this Deferral Agreement
as of the year and date first above written.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
M.A. ▇▇▇▇▇ COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
-----------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: Vice President, General Counsel
and Secretary