EXHIBIT 10.1
EXECUTIVE DEFERRED COMPENSATION AGREEMENT
This agreement (the "Agreement") is made and effective as of between DOW
JONES & COMPANY, INC., a Delaware corporation having its principal office at
200 Liberty Street, New York, New York (hereinafter referred to as the
"Company", which term shall include its successors and assigns), and
hereinafter referred to as "Executive"),
W I T N E S S E T H
WHEREAS, the Company and Executive wish to enter into an agreement with
respect to Executive's employment by the Company and providing for the
elective deferral of compensation;
NOW, THEREFORE, in consideration of the premises, the Company and
Executive agree as follows:
1. Period of Service. Executive will, except in the event of his
earlier death or disability, serve the Company on a full-time basis for such
period as the Company shall request, doing such work of the type for which he
is qualified as the Company may request and at such compensation as is
specified in paragraph 2 below. Neither party is under any obligation to
continue Executive's employment nor will either party have any liability under
this Agreement arising out of the termination, with or without cause, of
Executive's employment.
2. Compensation and Election to Defer.
(a) Election. The Company will pay Executive as compensation a base
salary of not less than $ a year and such bonus, if any, as the
Company may decide to award him. By filing written notice (the "Notice of
Deferral") with the Company at any time prior to the December 31 preceding the
commencement of any year, Executive may elect that all or part of any bonus
which may be awarded to him for such year shall be paid to him as Deferred
Compensation at such later date as he may become entitled thereto pursuant to
the provisions of this Agreement. To the extent that Executive makes no such
election, his bonus shall be paid to him at such time, in such manner and in
such amounts as the Company shall determine.
(b) Expenses. The Company will pay or reimburse Executive for all
reasonable expenses paid or incurred by him in performing his obligations
under paragraph 1 of this Agreement.
3. Calculation of Deferred Compensation.
Executive shall also elect in his Notice of Deferral whether to have his
Deferred Compensation account credited with (i) dollar amounts equal to the
deferred bonus (the "Deferred Cash Election") or (ii) units ("Stock
Equivalents") equivalent to shares of Dow Jones common stock (the "Deferred
Stock Election").
(a) Deferred Cash Election. To the extent that Executive makes
the Deferred Cash Election, then, for purposes of paragraph 4 below, the
aggregate amount allocable to Executive's account as Deferred Compensation as
of the date on which he receives his first installment (or lump sum payment)
of Deferred compensation shall be the sum of
(i) the amount of each annual bonus that Executive is entitled
to receive as Deferred Compensation pursuant to paragraph 2 above and with
respect to which Executive made a Deferred Cash Election pursuant to this
paragraph 3(a), each such amount being credited to Executive's account as of
the first day following the end of the year for which the bonus was awarded,
and
(ii) for each year, or part thereof, from the date as of which
an amount is first credited to Executive's account pursuant to subparagraph
3(a)(i) to the end of the month preceding the month in which Executive becomes
entitled to his first installment (or lump sum payment) of Deferred
Compensation pursuant to paragraph 4 below, interest on the amount, if any, of
Deferred Compensation allocated to Executive's account as of the beginning of
each such year (including, as of any such date, any amount previously
allocated thereto pursuant to this subparagraph (ii)), calculated at an annual
interest rate equal to the DJ 20 Bond Index rate in effect on the first
business day of such year.
(b) Deferred Stock Election.
(i) Annual Election. To the extent that Executive makes a Deferred
Stock election, his account shall be credited, as of the first business day
following the end of the year to which the Deferred Stock election relates,
with the number of Stock Equivalents equal to that whole number obtained by
dividing (x) the amount of the deferred bonus for such year to which the
Deferred Stock Election relates by (y) the fair market value of a share of
Common Stock of the Company ("Common Stock") on such date. For purposes of
this Agreement, the fair market value of a share of Common Stock as of any
date shall be the closing sale price of a share of Common Stock on the New
York Stock Exchange on such date, or, if no sales were quoted on such date, on
the most recent preceding date on which sales
were quoted. Any amount of deferred bonus remaining after such division,
which is less than the fair market value of a single share of Common Stock on
such date, shall be credited to Executive's account and retained there,
without accruing interest, until Stock Equivalents are next credited to
Executive's account, at which time the retained amount shall be added to any
deferred bonus and Dividend Equivalents, as hereinafter defined, for purposes
of computing the number of Stock Equivalents to be so credited.
(ii) Dividend Equivalents. With respect to each Stock Equivalent
credited to Executive's account, said account shall be credited further with
an amount equal to any dividend paid with respect to each outstanding share of
Common Stock at the same time any such dividend is paid ("Dividend
Equivalents"). Any such Dividend Equivalents so credited shall not accrue
interest and shall thereafter be treated as Deferred Compensation to be
converted into Stock Equivalents on the date on which the Dividend Equivalents
are credited to Executive's account in the manner described in subparagraph
(b) (i) hereof.
(iii) Antidilution Adjustments. In the event of any change
in the Common Stock by reason of any stock dividend, recapitalization,
reorganization, merger, consolidation, split-up, combination or exchange of
shares, or rights offering to purchase Common Stock at a price substantially
below fair market value, or of any similar change affecting the Common Stock,
the value and attributes of each Stock Equivalent shall be appropriately
adjusted consistent with such change to the same extent as if such Stock
Equivalents were, instead, issued and outstanding shares of Common Stock.
4. Payment of Deferred Compensation Under Deferred Cash Election. The
aggregate amount allocable to Executive as Deferred Compensation, determined
pursuant to the Deferred Cash Election under paragraph 3(a) above, shall be
payable to Executive in the form of an annuity commencing on the first day of
the third month following the month in which Executive retires or otherwise
ceases to be actively employed by the Company for whatever cause. The annuity
shall be payable by the Company in the greater of (i) (*1) equal annual
installments or (ii) the smallest number of installments that shall be not
less than half the number of years remaining in Executive's life expectancy,
determined as of the date on which Executive receives his first installment of
Deferred Compensation or as of the date of his death, if earlier. For
purposes of the preceding sentence, Executive's life expectancy shall be equal
to the expected return multiple shown for Executive's age in the table
entitled "Table V-Ordinary Life Annuities-One Life-Expected Return Multiples,"
promulgated under section 1.72-9 of the Federal Income Tax Regulations, as in
effect on the date of such determination. The annuity shall also include an
assumed interest factor, as calculated by the Company, equal to the average
rate of interest applicable under subparagraph 3(a)(ii) for the last three
complete calendar years during which Executive rendered services as an
executive under paragraph 1.
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(*1) Insert appropriate number up to 10.
5. Payment of Deferred Compensation Under Deferred Stock Election.
Each Stock Equivalent credited to Executive's account pursuant to the Deferred
Stock Election under paragraph 3(b) above, shall be deemed to have a value
equal to the fair market value of a share of Common Stock as of the date
immediately preceding the date on which payment commences, i.,e., the last
business day of the second month following the month in which Executive
retires or otherwise ceases to be actively employed by the Company for
whatever cause. The aggregate value of the Stock Equivalents as so determined
shall be payable to Executive in the form of an annuity commencing on the
first day of the third month following the month in which Executive retires or
otherwise ceases to be actively employed by the Company for whatever cause.
The annuity shall be payable by the Company in the greater of (i) (*2) ------
- ----equal annual installments or (ii) the smallest number of installments that
shall be not less than half the number of years remaining in Executive's life
expectancy, determined as of the date on which Executive receives his first
installment of Deferred Compensation or as of the date of his death, if
earlier. For purposes of the preceding sentence, Executive's life expectancy
shall be equal to the expected return multiple shown for Executive's age in
the table entitled "Table V-Ordinary Life Annuities-One Life--Expected Return
Multiples," promulgated under section 1.72-9 of the Federal Income Tax
Regulations, as in effect on the date of such determination. The annuity
shall also include an assumed interest factor, as
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(*2) Insert appropriate number up to 10.
calculated by the Company, equal to the average rate of interest applicable
under subparagraph 3(a)(ii) for the last three complete calendar years during
which Executive rendered services as an executive under paragraph 1.
6. Payment Upon Early Termination of Employment. Notwithstanding the
foregoing paragraphs 4 and 5, if (i) Executive terminates employment with the
Company prior to attaining age 55 and (ii) the Deferred Compensation payable
to him upon such termination, valued as of the date immediately preceding the
date on which payment commences, is less than $25,000, then such Deferred
Compensation shall be paid to him or his Beneficiary in one lump sum on the
first day of the third month following the month in which the Executive ceases
to be actively employed by the Company.
7. Acceleration of Payment. Notwithstanding the foregoing paragraphs 4,
5 and 6, the Company, in its sole discretion, may accelerate the payment of
all or part of the balance of Executive's Deferred Compensation if so
requested by the Executive or, after Executive's death, by his Beneficiary;
provided, however, that any such accelerated payment may be permitted only in
case of an unforeseeable emergency (within the meaning of Section 457 of the
Internal Revenue Code and the regulations promulgated thereunder) that is
caused by an event beyond the control of the Executive or Beneficiary and that
would result in severe financial hardship to such person if accelerated
payment were not permitted. Any such accelerated payment shall be limited to
the amount necessary to meet or satisfy the emergency. Notwithstanding
anything in this paragraph 7 to the contrary, this paragraph 7 shall not
apply, and payments shall not be accelerated hereunder, if Executive is an
"insider" subject to the restrictions on short-swing profits imposed by Rule
16 of the Securities Exchange Act of 1934.
8. Payment of Deferred Compensation Following Executive's Death.
(a) Payment to Beneficiary. If Executive should die before
receiving any or all of the payments of Deferred Compensation to which he is
entitled, any unpaid amounts shall be paid [as they become due]
[in a lump sum] (*3) to such Beneficiary or Beneficiaries and in such
proportions as Executive shall designate pursuant to this paragraph.
(b) Designation of Beneficiary. Executive shall file with the
Company a written designation of one or more persons as the Beneficiary who
shall be entitled to receive the amounts, if any, payable hereunder after
Executive's death. Executive may, from time to time, revoke or change his
Beneficiary designation without the consent of any prior Beneficiary by filing
a new designation with the Company. The last such designation received by the
Company shall be controlling; provided, however, that no designation, or
change or revocation thereof, shall be effective unless received by the
Company prior to Executive's death, and in no event shall it be effective as
of a date prior to such receipt. If no such Beneficiary designation is in
effect at the time of Executive's death, or if no designated
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(*3) Delete one bracketed clause.
Beneficiary survives Executive, Executive's estate shall be deemed to have
been designated his Beneficiary and the executor or administrator thereof
shall receive the amount, if any, payable hereunder after Executive's death.
If the Company is in doubt as to the right of any person to receive all or
part of such amount, the Company may retain such amount until the rights
thereto are determined, or the Company may pay such amount into any court of
appropriate jurisdiction and such payment shall be a complete discharge of the
liability of the Company therefor.
9. Administration of the Agreement and Claims.
(a) Administration. This Agreement shall be administered by a
committee composed of the Vice President, Employee Relations, the Chief
Financial Officer and the Treasurer of the Company ("the Committee") which
shall have full power, discretion and authority to interpret, construe and
administer this Agreement and any part thereof. The Committee's
interpretation and construction of the Agreement, and actions thereunder,
shall be binding and conclusive on all persons for all purposes.
(b) Claims for Benefits. Any claim for benefits by Executive or
anyone claiming through Executive under this Agreement shall be delivered in
writing by the claimant to the Committee. The claim shall identify the
benefits being requested and shall include a statement of the reasons why the
benefits should be granted. The Committee shall grant or deny the claim. If
the claim is denied in whole or in part, the Committee shall give written
notice to the claimant setting forth:
(a) the reasons for the denial, (b) specific reference to pertinent provisions
of the Agreement on which the denial is based, (c) a description of any
additional material or information necessary to request a review of the claim
and an explanation of why such material or information is necessary, and (d)
an explanation of the Agreement's claim review procedure. The notice shall be
furnished to the claimant within a period of time not exceeding 90 days after
receipt of the claim, except that such period of time may be extended, if
special circumstances should require, for an additional 90 days commencing at
the end of the initial 90-day period. Written notice of any such extension
shall be given to the claimant before the expiration of the initial 90-day
period and shall indicate the special circumstances requiring the extension
and the date by which the final decision is expected to be rendered.
(c) Appeals Procedure. A claimant who has been denied a claim
for benefits, in whole or in part, may, within a period of 60 days following
his/her receipt of the denial, request a review of such denial by filing a
written notice of appeal with the Committee. In connection with an appeal,
the claimant (or his/her authorized representative) may review pertinent
documents and may submit evidence and arguments in writing to the Committee.
The Committee may decide the questions presented by the appeal, either with or
without holding a hearing, and shall issue to the claimant a written notice
setting forth: (a) the specific reasons for the decision and (b) specific
reference to the pertinent provisions of the Agreement on which the decision
is based. The notice shall be issued within a period of time not exceeding 60
days after receipt of the request for review; except that such period of time
may be extended, if special circumstances (including, but not limited to, the
need to hold a hearing) should require, for an additional 60 days commencing
at the
end of the initial 60-day period. Written notice of any such extension shall
be provided to the claimant prior to the expiration of the initial 60-day
period. The decision of the Committee shall be final and conclusive.
10. Executive is Unsecured Creditor. Executive shall be a general
unsecured creditor of the Company with respect to his right to receive
payments of Deferred Compensation hereunder. This Agreement represents a mere
promise by the Company to make payments of Deferred Compensation in the
future. All payments of Deferred Compensation to be made hereunder shall be
paid from the general funds of the Company and no special or separate fund
shall be established and no segregation of assets shall be made to assure
payment of such amounts. It is the intention of the Company and Executive
that this Agreement and the Company's obligation to make payments of Deferred
Compensation hereunder be unfunded both for tax purposes and for purposes of
Title I of ERISA.
11. Termination of Agreement. Either Executive or the Company may
terminate this Agreement, with or without cause, on written notice to the
other, in which case the provisions of this Agreement as to payments shall
apply.
12. No Assignment of Rights. This Agreement shall be binding upon and
inure to the benefit of the Company and its successors and assigns, and
Executive, his Beneficiary and his estate. The rights of Executive, his
Beneficiary and his estate to payments of Deferred Compensation hereunder are
expressly declared not to be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of Executive, his Beneficiary
or his estate. Any attempted disposition of such rights shall be null and
void.
13. Facility of Payment. If the Committee shall find that any person to
whom any payment is payable under the Agreement is unable to care for his/her
affairs because of illness or accident, or is a minor, then any payment due
(unless a prior claim therefor shall have been made by a duly appointed
guardian, committee or other legal representative) may, if the Committee so
elects, be paid to his/her spouse, a child, a parent, or a brother or sister,
or any other person deemed by the Committee to have incurred expenses for such
person otherwise entitled to payment, in such manner and proportions as the
Committee may determine. Any such payment shall be a complete discharge of
the liabilities of the Company under the Agreement.
14. Governing Law. This Agreement shall be governed by the laws of the
State of New York from time to time in effect.
15. Unless either party notifies the other to the contrary, any notice
required hereunder shall be duly given if delivered in person or by registered
first class mail (a) if to the Company, to the Treasurer, Route #1 & Ridge
Road, South Brunswick, New Jersey 08852, and (b) if to Executive, to ---------
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date set forth above.
DOW JONES & COMPANY, INC.
By:------------------------
Vice President, Human Resources
----------------------
Executive