Item 14 - Exhibit 10(e)
DEFERRED COMPENSATION AGREEMENT
Dated as of
M. A. HANNA COMPANY, a Delaware corporation ("Hanna"), and
_________________________ ("Executive") hereby agree as follows:
1. Upon the retirement of the Executive from the employ of
Hanna on or after his having reached sixty (60) years of age, Hanna
shall, subject to the terms and conditions of this Agreement and
commencing with the later of (a) the Executive's retirement or (b)
five (5) years from the date of this Agreement, pay to him each
month the sum set forth in Appendix I opposite his age at his
retirement. Payments shall be made for the period shown in
Appendix I.
2. If the Executive leaves the employ of Hanna before he
reaches the later of (a) sixty (60) years of age or (b) five (5)
years from the date of this Agreement for any reason other than his
death or his permissible early retirement under one of Hanna's
early retirement plans, Hanna shall have no obligation under this
Agreement except to allow the Executive to purchase the Policy as
specified in paragraph 6 hereof.
If the Executive dies before he reaches the later of (a)
or (b) in this paragraph 2, the proceeds specified in the Policy
(as defined in paragraph 6 hereof) shall be paid to the beneficiary
designated as described in paragraph 5 hereof (or, if no
beneficiary is designated, pursuant to the provisions of paragraph
5), and Hanna shall have no obligation under this Agreement.
If the Executive takes permissible early retirement under
one of Hanna's early retirement plans before he reaches sixty (60)
years of age and provided that he makes the premium payments
specified in paragraph 7 hereof, then for purposes of this
Agreement he shall be deemed to have retired at sixty (60) years of
age and Hanna shall make payments to him as specified in paragraph
1 hereof commencing on the later of (a) or (b) in this paragraph 2.
3. If the Executive shall die prior to his retirement but on
or after the later of (a) his having reached sixty (60) years of
age or (b) five years from the date of this Agreement, Hanna shall
pay each month to the Executive's designated beneficiary, the sum
set forth in Appendix I that would have been paid if the Executive
had retired at age 65. Payments shall begin as soon as practicable
after the Executive's death and shall continue for a period of
fifteen (15) years.
If the Executive shall die prior to his retirement, but
before the later of (a) or (b) in this paragraph 3, the proceeds
specified in the Policy (as defined in paragraph 6 hereof) shall be
paid to the beneficiary designated as described in paragraph 5
hereof (or, if no beneficiary is designated, pursuant to the
provisions of paragraph 5), and Hanna shall have no obligation
under this Agreement.
4. If the Executive shall die after becoming eligible for
payments as specified in paragraph 1 above, but prior to receiving
the last monthly installment, the remaining installments shall be
paid as they become due to the Executive's designated beneficiary.
5. The Executive shall designate his beneficiary in a writing
filed with and acceptable to Hanna which may be modified by the
Executive at any time. If the Executive fails to designate a
beneficiary, installments otherwise payable to the designated
beneficiary shall be paid as they become due to the duly appointed
executor, administrator or other personal representative of the
Executive's estate.
6. Hanna will purchase an insurance policy (the "Policy") on
the life of the Executive and will be the sole owner of the Policy.
If the Executive leaves Hanna for any reason other than death or
retirement or if the Company wishes to terminate the Policy, the
Executive may purchase the Policy from Hanna for its cash surrender
value at that time, provided that the employee has worked for Hanna
for at least five (5) years from the Policy issuance date.
7. The Executive will contribute to the cost of the benefits
under this Agreement and the Policy by making premium payments as
notified by Hanna but in no case greater than the amount shown in
Appendix II. During the Executive's employment with Hanna, premium
payments will be deducted by Hanna twice each month from the
Executive's compensation. When the Executive is no longer employed
by Hanna, he will make payments once per year in the amount shown.
If for any reason the Executive fails to make a premium
payment when it is due, Hanna shall notify him of that fact. If
Hanna has sent him a second notice, by registered mail, and the
Executive still fails to make such premium payment, Hanna shall be
entitled to terminate this Agreement and the Policy, and be
relieved of all further obligations under this Agreement, sixty
(60) days after sending the second notice.
8. This Agreement may not be terminated by Hanna after the
Executive's death. It may be terminated by Hanna prior to the
later of (a) the Executive's reaching sixty (60) years of age or
(b) five (5) years from the date of this Agreement, by written
notice sent to the Executive, as of a date not less than thirty
(30) days after the date of sending that notice, but only on the
following terms and conditions:
(i) Hanna terminates identical or similar deferred
compensation agreements with respect to all other
living employees who have not yet attained the
later of (a) or (b) in this paragraph 8; and
(ii) If such termination occurs at any time after three
(3) full years following the date of this
Agreement, the Executive shall be eligible for, and
entitled to, irrevocably vested deferred
compensation, commencing on or after the
Executive's retirement as stipulated in this
Agreement, in an amount as set forth in paragraph 1
above, and any amendments thereto, multiplied by a
fraction of which the numerator is the number of
full years from the date of this Agreement to the
date of such termination and the denominator is the
number of full years from the date of this
Agreement to the date when the Executive has
fulfilled his obligation to make premium payments
required under this Agreement.
Notwithstanding any provision to the contrary herein, Hanna
shall not have the right to amend or terminate this Agreement or
the Policy after a change in control of Hanna, as hereinafter
defined, occurs except for nonpayment of premiums by the Executive
as specified in paragraph 7 above.
For purposes of this Agreement, the term "change in control"
of Hanna shall have occurred if and when any of the following
events shall have occurred:
(a) Hanna enters into an agreement to merge,
consolidate or reorganize into or with another
corporation or other legal person, and as a result
of such merger, consolidation or reorganization
less than 75% of the combined voting power of the
then-outstanding securities of such corporation or
person immediately after such transaction are held
in the aggregate by the holders of Voting Stock (as
that term is defined in subparagraph (c) below) of
Hanna immediately prior to such transaction;
(b) Hanna enters into an agreement to sell or otherwise
transfer all or substantially all of its assets to
any other corporation or other legal person, and as
a result of such sale or transfer less than 75% of
the combined voting power of the then-outstanding
securities of such corporation or person
immediately after such sale or transfer is held in
the aggregate by the holders of Voting stock of
Hanna immediately prior to such sale or transfer;
(c) The filing on Schedule 13D or schedule 14D-1 (or
any successor schedule, form or report), each as
promulgated pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"),
disclosing that any person (as the term "person" is
used in Section 13 (d) (3) or Section 14 (d) (2) of
the Exchange Act) has become, the beneficial owner
(as the term "beneficial owner" is defined under
Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of securities
representing 30% or more of the combined voting
power of the then-outstanding securities entitled
to vote generally in the election of directors of
Hanna ("Voting Stock");
(d) Hanna files a report or proxy statement with the
Securities and Exchange Commission pursuant to the
Exchange Act disclosing in response to Form 8-K or
Schedule 14A (or any successor schedule, form or
report or item therein) that a change in control of
Hanna has or may have occurred or will or may occur
in the future pursuant to any then-existing
contract or transaction; or
(e) During any period of two consecutive years,
individuals who constitute the Directors of Hanna
at the beginning of any such period cease for any
reason to constitute at least a majority thereof,
unless the election, or the nomination for election
by Hanna's stockholders, of each new Director was
approved by a vote of at least two-thirds of the
Directors of Hanna then still in office who were
Directors of the Company at the beginning of such
period.
Notwithstanding the foregoing provisions of subparagraphs (c)
or (d) above hereof a "Change in Control" shall not be deemed to
have occurred for purposes of this Agreement solely because (i)
Hanna, (ii) an entity in which Hanna directly or indirectly
beneficially owns 50% or more of the voting securities, or (iii)
any Hanna-sponsored employee stock ownership plan or other employee
benefit plan of Hanna, either files or becomes obligated to file a
report or a proxy statement under or in response to Schedule 13D,
Schedule 14D-1, Form 8-K or Schedule 14A (or any successor
schedule, form or report or item therein) under the Exchange Act,
disclosing beneficial ownership by it of shares of Voting Stock,
whether in excess of 30% or otherwise, or because Hanna reports
that a change in control of Hanna has or may have occurred or will
or may occur in the future by reason of such beneficial ownership.
In the event that any such agreement to merge, consolidate,
reorganize or sell or otherwise transfer assets referred to in
subparagraphs (a) or (b) above is terminated without such merger,
consolidation, reorganization or sale or transfer having been
consummated, or the person filing such Schedule 13D or Schedule
14D-1 referred to in subparagraph (c) above files an amendment to
such Schedules disclosing that it no longer is the beneficial owner
of securities representing 30% or more of the Voting Stock of
Hanna, or Hanna reports that the change of control which it
reported in the filing referred to in subparagraph (d) above will
not in fact occur, any executive officer of Hanna may be notice to
the Executive nullify the operation of this Agreement by reason of
such Change in Control, without prejudice to any exercise by the
Executive of his rights under this Agreement that may have occurred
prior to such nullification.
In the event a change in control of Hanna occurs, the rights
and benefits of the Executive hereunder will continue in full force
and effect, subject only to payment by the Executive on a timely
basis of his share of the premiums stipulated in this Agreement.
The Executive shall receive timely notice of all premium payments
due after a change in control of Hanna.
9. Except as permitted by this Agreement or in accordance
with a qualified domestic relations order as defined in Section
414(p) of the Internal Revenue Code, no rights of any kind under
this Agreement shall, without the written consent of Hanna, be
transferable or assignable by the Executive, any designated
beneficiary or any other person, or be subject to alienation,
encumbrance, garnishment, attachment, execution or levy of any
kind, voluntary or involuntary.
If the Executive or any other person attempts to assign,
transfer, alienate or encumber his rights to receive payments
hereunder (except as permitted by this Agreement) or permits the
same to be subject to alienation, garnishment, attachment,
execution or levy of any kind, Hanna shall have no further
obligation under this Agreement.
10. If the Executive shall, at any time while he is receiving
payments pursuant to the Agreement, acquire five percent (5%) or
more of the voting stock of a competing business or be employed by
a competing business, or shall take any action inimical to the
interest of Hanna, Hanna shall be relieved of all further
obligations hereunder. A competing business shall be any business
which is (i) substantially similar to the whole or any significant
part of the business then being conducted by Hanna and its
subsidiaries and (ii) conducted within twenty-five (25) miles of
any place of business maintained by Hanna and its subsidiaries.
11. This Agreement is not nor does it contain an offer or
commitment by Hanna to continue the Executive's employment with
Hanna for any period of time.
12. All questions of interpretation, construction or
application arising under this Agreement shall be decided by the
Board of Directors or a Committee of the Board of Directors of
Hanna, whose decision shall be final and conclusive upon all
persons.
13. The undertakings of Hanna herein constitute merely the
unsecured promise of Hanna to make the payments as provided for
herein. No property of Hanna is or shall be, by reason of this
Agreement, held in trust for the Executive, any designated
beneficiary or other person, and neither the Executive nor any
designated beneficiary or any other person shall have by reason of
this Agreement, any right, title or interest of any kind in or to
any property of Hanna.
14. Hanna will not consolidate or merge into or with another
corporation, or transfer all or substantially all of its assets to
another corporation or entity, unless such other corporation or
entity shall assume this Agreement and upon such assumption the
Executive and the successor corporation or entity shall become
obligated to perform the terms and conditions hereunder. This
provision shall continue to apply in the event of any subsequent
merger, consolidated or transfer of assets.
15. This Agreement shall be effective as of ________________.
IN WITNESS WHEREOF, M. A. Hanna Company has caused this
Agreement to be duly executed and the Executive has executed this
Agreement, in triplicate, on this _______ day of _______________,
______.
M. A. HANNA COMPANY
By
________________________
Executive