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Exhibit 10.5
AMENDED AND RESTATED
DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT is made as of the ____ day of __________, 1999 by and
between The Connecticut Water Company (together with any affiliated companies
hereinafter collectively referred to as the "Employer") and Marshall T.
Chiaraluce (hereinafter referred to as the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee is among a select group of management or highly
compensated employees of the Employer who entered into a Deferred Compensation
Agreement with the Employer made as of the first day of January, 1992 (the
"Deferred Compensation Agreement"); and
WHEREAS, the Employer and the Employee desire to amend and restate the
Deferred Compensation Agreement on the terms herein set forth; and
WHEREAS, the Employer and the Employee are willing to enter into this
Amended and Restated Deferred Compensation Agreement (the "Agreement") on the
terms herein set forth.
NOW, THEREFORE, in consideration of the premises and the mutual and
dependent promises herein, the parties hereto agree as follows:
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1. DEFERRED COMPENSATION. The Employee may file a written election with
the Employer in the form attached to this Agreement or such other form as may be
approved by the Employer to defer up to 12 percent (12%) of the Employee's
salary. Such amount shall be credited to a Deferred Compensation Account as
provided in Section 2 hereof. This election to defer the receipt of salary must
be made before the beginning of the calendar year for which the salary is
payable and shall remain in effect, unless terminated or changed, or until the
date the Employee ceases to be an employee of the Employer. Any termination or
change of a deferral election must be made on a form provided by the Employer
for such purpose and may only be made with respect to salary which will be
earned on and after the January 1 following the Employer's receipt of such form
provided that such form is received at least seven (7) days prior to the
applicable January 1.
2. DEFERRED COMPENSATION ACCOUNT. The Employer shall maintain on its
books and records a Deferred Compensation Account to record its liability for
future payments of deferred compensation and interest thereon required to be
paid to the Employee or his beneficiary pursuant to this Agreement. However, the
Employer shall not be required to segregate or earmark any of its assets for the
benefit of the Employee or his beneficiary. The amount reflected in said
Deferred Compensation Account shall be available for the Employer's general
corporate purposes and shall be available to the Employer's general creditors.
The amount reflected in said Deferred Compensation Account shall not be subject
in any manner to anticipation, alienation, transfer or assignment by the
Employee or his beneficiary, and any attempt to anticipate, alienate, transfer
or assign the same shall be void. Neither the Employee
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nor his beneficiary may assert any right or claim against any specific assets of
the Employer. The Employee or his beneficiary shall have only a contractual
right against the Employer for the amount reflected in said Deferred
Compensation Account. Notwithstanding the foregoing, in order to pay amounts
which may become due under this Agreement, the Employer may establish a grantor
trust (hereinafter the "Trust") within the meaning of Section 671 of the
Internal Revenue Code of 1986, as amended. The assets in such Trust shall at all
times be subject to the claims of the general creditors of the Employer in the
event of the Employer's bankruptcy or insolvency, and neither the Employee nor
any beneficiary shall have any preferred claim or right, or any beneficial
ownership interest in, any such assets of the Trust prior to the time such
assets are paid to an Employee or beneficiary pursuant to this Agreement.
The Employer shall credit to said Deferred Compensation Account the
amount of any salary to which the Employee becomes entitled and which is
deferred pursuant to Section 1 hereof, such amount to be credited as of the
first business day of each month. The Employer shall also credit to said
Deferred Compensation Account an Interest Equivalent in the amount and manner
set forth in Section 3 hereof.
3. PAYMENT OF DEFERRED COMPENSATION
(a) Termination of Employment On or After Attainment of Age 65. If the
Employee's employment should terminate on or after his attainment of age
sixty-five (65) for any reason other than death or on account of "Cause" as
defined in subsection (d) below, he shall be entitled to receive payment of the
entire amount of his Deferred Compensation Account
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including an Interest Equivalent, as described below, in the form of an
actuarially equivalent life annuity providing for equal annual payments for the
life of the Employee with a guarantee that fifteen (15) annual payments will be
made. Such actuarially equivalent life annuity shall be computed on the basis of
a mortality table that assumes a life expectancy of age eighty (80) and uses the
Interest Factor described below.
There shall be credited to the Employee's Deferred Compensation Account
as of each January 1 and July 1, commencing with January 1, 1992 until payment
of such account is made or begins, as additional deferred compensation, an
Interest Equivalent equal to fifty percent (50%) of the product of (i) the AAA
Corporate Bond Yield Averages published by Moody's Bond Survey for the Friday
ending on or immediately preceding the applicable January 1 and July 1 plus two
(2) percentage points (the "Interest Factor"), multiplied by (ii) the balance of
the Employee's Deferred Compensation Account, including the amount of Interest
Equivalent previously credited to such Employee's account, as of the preceding
day (i.e., December 31 or June 30). The Interest Factor used to compute the
annuity payable upon the Employee's termination of employment on or after his
attainment of age sixty-five (65) shall be calculated based upon the Interest
Factor as of the January 1 or July 1 immediately preceding the date of the
Employee's termination of employment, whichever shall fall nearer to the date of
the Employee's termination of employment. The first annuity payment under this
subsection shall be paid within sixty (60) days after the commencement of the
calendar year following the Employee's termination of employment.
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Notwithstanding the foregoing, if provided by the Board of Directors of
the Employer, in its sole discretion, the Employee shall instead receive payment
in a lump sum of the entire amount of his Deferred Compensation Account,
including an Interest Equivalent, as described above. The lump sum shall be paid
within sixty (60) days after the Employee's termination of employment or, at the
discretion of the Board of Directors of the Employer, within sixty (60) days
after the commencement of the calendar year following the Employee's termination
of employment.
(b) Termination of Employment After Attainment of Age 55 and Prior to
Attainment of Age 65. If the Employee's employment should terminate after his
attainment of age fifty-five (55) and prior to his attainment of age sixty-five
(65) for any reason other than death or on account of "Cause" as defined in
subsection (d) below, he shall be entitled to receive payment of the entire
amount of his Deferred Compensation Account including an Interest Equivalent, as
described below, in the form of equal annual installments over a period equal to
the Employee's remaining life, assuming a life expectancy of age eighty (80).
There shall be credited to the Employee's Deferred Compensation Account as of
each January 1 and July 1, commencing with January 1, 1992 until payment of said
annual installments are completed, as additional deferred compensation, an
Interest Equivalent as described in subsection (a) above. The first installment
payment under this subsection shall be paid within sixty (60) days after the
commencement of the calendar year following the Employee's termination of
employment.
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Notwithstanding the foregoing, if provided by the Board of Directors of
the Employer, in its sole discretion, the Employee shall instead receive payment
in a lump sum of the entire amount of his Deferred Compensation Account,
including an Interest Equivalent, as described in subsection (a) above. The lump
sum shall be paid within sixty (60) days after the Employee's termination of
employment or, at the discretion of the Board of Directors of the Employer,
within sixty (60) days after the commencement of the calendar year following the
Employee's termination of employment.
(c) Termination of Employment Prior to Attainment of Age 55. If the
Employee's employment should terminate prior to his attainment of age fifty-five
(55) for any reason other than death or on account of "Cause" as defined in
subsection (d) below, the Employee shall be entitled to receive payment in a
lump sum of the entire amount of his Deferred Compensation Account, including
the same Interest Equivalent as described in subsection (a) above. Payment under
this subsection shall be made within sixty (60) days after the Employee's
termination of employment or, at the option of the Board of Directors of the
Employer, in its sole discretion, within sixty (60) days after the commencement
of the calendar year following the Employee's termination of employment.
(d) Termination of Employment for Cause. If the employment of the
Employee is terminated by the Employer for Cause, the Employee shall be entitled
only to a return of amounts deferred pursuant to Section 1 hereof, and this
Agreement and all payments provided for in this Agreement, including any
obligation to pay interest on deferred compensation, shall terminate.
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Said deferred amounts shall be paid in a lump sum within sixty (60) days after
the commencement of the calendar year following the Employee's termination of
employment. As used in this Agreement, the term "Cause" shall mean:
(i) the Employee's rendering, while employed by the
Employer, of any services, assistance or advice,
either directly or indirectly, to any person, firm or
organization competing with, or in opposition to, the
Employer;
(ii) the Employee's allowing, while employed by the
Employer, any use of his name by any person, firm or
organization competing with, or in opposition to, the
Employer; or
(iii) willful misconduct by the Employee, including, but
not limited to, the commission by the Employee of a
felony or the perpetration by the Employee of a
common law fraud upon the Employer.
(e) Death While Employed. Notwithstanding anything to the contrary
contained in the foregoing, if the Employee should die while employed by the
Employer, his beneficiary, designated pursuant to Section 4 hereof, shall
receive in a lump sum, in lieu of the amount(s) otherwise payable to the
Employee under this Agreement, a death benefit equal to the greater of (i) the
Hypothetical Death Benefit, as defined in subsection (g) hereof, and (ii) the
entire amount of his Deferred Compensation Account at the date of his death,
assuming that an Interest
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Equivalent were credited to such account as of each January 1 and July 1,
commencing with January 1, 1992, until the date of death at the rate set forth
in subsection (a) hereof. Such beneficiary shall be entitled to receive such
death benefit within ninety (90) days after the Employer has been notified in
writing of the death of the Employee and has been provided with any additional
information, forms or other documents it may reasonably request.
(f) Death After Termination of Employment. If the Employee should die
after the termination of his employment with the Employer and prior to the date
on which payment of his Deferred Compensation Account has commenced in the form
of an annuity as provided in subsection (a), or has been made in the form of a
lump sum as provided in subsections (a), (b), (c) or (d), or has been fully
distributed in the event of payment in the form of installments as provided in
subsection (b), his beneficiary, designated pursuant to Section 4 hereof, shall
receive in a lump sum, in lieu of the amount(s) otherwise payable to the
Employee under this Agreement, a death benefit equal to the entire amount of the
Employee's Deferred Compensation Account at the date of his death (or the entire
remaining amount of the Employee's Deferred Compensation Account at the date of
his death in the event that payment has commenced in the form of installments as
provided in subsection (b)) and, provided that the Employee's employment shall
not have terminated on account of "Cause" as provided in subsection (d) hereof,
an Interest Equivalent credited to such account as of each January 1 and July 1,
commencing with January 1, 1992, until the date of death at the rate set forth
in subsection (a) hereof. No Interest Equivalent shall be credited to the
Employee's Deferred Compensation Account in the event of the Employee's death
after his termination on account of "Cause" as
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provided in subsection (d) hereof. The Employee's beneficiary shall be entitled
to receive such death benefit within ninety (90) days after the Employer has
been notified in writing of the death of the Employee and has been provided with
any additional information, forms or other documents it may reasonably request.
If the Employee should die after the termination of his employment with
the Employer and after the date on which payment of his Deferred Compensation
Account and the Interest Equivalent set forth in subsection (a) hereof has
commenced in the form of an annuity as provided in subsection (a), no additional
benefits shall be payable under this Agreement after the Employee's death except
to the extent that the Employee did not receive prior to his death the
guaranteed fifteen (15) annual payments provided in subsection (a), in which
case the unpaid guaranteed payments shall be paid to the Employee's beneficiary,
designated pursuant to Section 4, in annual payments for the remainder of said
guaranteed fifteen (15)-year term.
If the Employee should die after the termination of his employment with
the Employer and after the date on which payment of his Deferred Compensation
Account and, with respect to payments made in accordance with subsections (a),
(b) or (c) hereof, the Interest Equivalent set forth in subsection (a) hereof,
has been paid in the form of a lump sum as provided in subsections (a), (b), (c)
or (d) or has been fully distributed in the form of installments as provided in
subsection (b), no additional benefits shall be payable upon the Employee's
death.
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(g) Hypothetical Death Benefit. For purposes of this Agreement, the
term "Hypothetical Death Benefit" shall mean a lump sum benefit equal to the
proceeds of any policy of key-man life insurance on the life of the Employee, of
which the Employer is owner and beneficiary, and which policy is designated by
the Employer as subject to the provisions hereof, reduced by (i) the amount of
any tax imposed on the Employer with respect to such proceeds and (ii) the cost
to the Employer of any tax deductions postponed as a result of salary deferrals
pursuant to Section 1 hereof and increased by (iii) the tax deduction to the
Employer which would result from payment of the Hypothetical Death Benefit to a
beneficiary of the Employee. For purposes of (ii) above, an opportunity cost
factor of six (6) percent pre-tax interest will be applied during the period of
postponed deductions under (ii). The calculation of the Hypothetical Death
Benefit shall be done by the Employer, whose calculation shall be final and
binding on the Employee and his beneficiary. Anything herein to the contrary
notwithstanding, the Employer shall not be required to purchase a policy of
key-man life insurance on the life of any Employee, and any such policy
purchased by the Employer, and all proceeds thereof, shall remain at all times
available to the Employer's general creditors.
4. BENEFICIARY. The Employee has notified or will in the future notify
the Employer of the person or persons entitled to receive payments on the death
of the Employee. For the purposes of this Agreement, such person or persons are
herein referred to collectively as the "beneficiary." The person whom an
Employee designates as his beneficiary for this purpose must be one of the
following: the Employee's spouse, father, mother, sister, brother, son or
daughter. The beneficiary may also be a legal ward living with and dependent on
the Employee
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at the time of his death. If the Employee dies and has not designated a
beneficiary, his beneficiary shall be his spouse, if living; otherwise, his
beneficiary shall be deemed to be his estate. An Employee's beneficiary
designation may be changed at any time by the Employee giving written notice to
the Employer of such change. The rights of any beneficiary presently or
hereafter designated are subject to any changes made in this Agreement by the
Employee and the Employer.
5. WITHHOLDING. The Employer shall be permitted to withhold from any
payment to the Employee or his beneficiary hereunder all federal, state or other
taxes which may be required with respect to such payment.
6. ARBITRATION. In the event that a dispute shall arise with respect to
any of the provisions of this Agreement, either the Employer or the Employee or
his beneficiary, as the case may be, may give written notice to the other
stating the claims that said party desires to arbitrate, and naming an
arbitrator. Within ten (10) days after the receipt of such notice, the party
receiving same shall appoint a second arbitrator by written notice to be sent to
the party who requested arbitration. Within ten (10) days after receipt of such
notice of appointment of the second arbitrator, the two (2) arbitrators so
appointed shall meet to select a third arbitrator and shall give written notice
of such selection to the Employer and the Employee or his beneficiary. The
decision of a majority of the arbitrators shall be conclusive and binding upon
the Employer and the Employee or his beneficiary. All notices hereunder shall be
by registered mail addressed to the last known address of the party entitled to
receive notice. The Employer and the Employee
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shall each pay their own costs incurred in the arbitration proceeding; provided,
however, that the arbitrators may require that the losing party reimburse the
prevailing party for its costs if it shall be determined that the claim which
gave rise to the dispute was without substantial foundation.
7. MISCELLANEOUS.
(a) This Agreement shall be binding upon the parties hereto, their
heirs, executors, administrators, successors and assigns. The Employer agrees
that it will not be a party to any merger, consolidation or reorganization
unless and until its obligations hereunder shall be expressly assumed by its
successor or successors.
(b) This Agreement may be amended at any time by mutual written
agreement of the parties hereto, but no amendment shall operate to give the
Employee, or any beneficiary designated by him, either directly or indirectly,
any interest whatsoever in any funds or assets of the Employer, except the right
to receive the payments herein provided.
(c) This Agreement may be terminated by the Employer at any time that
tax or other laws are enacted or interpreted which result or will result in
costs to the Employer significantly in excess of those contemplated at the time
of the execution hereof. In the event of such termination, the Employer's sole
obligation shall be to pay to the Employee in a lump sum the amount of his
Deferred Compensation Account, including an Interest Equivalent as determined by
Section 3(a), as if the effective date of termination of this Agreement were
considered to be
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the date of termination of the Employee's employment. Such payment shall be made
to the Employee within ninety (90) days after the effective date of termination
of this Agreement.
(d) This Agreement shall not supersede any contract of employment,
whether oral or written, between the Employer and the Employee, nor shall it
affect or impair the rights and obligations of the Employer and the Employee,
respectively, thereunder. Nothing contained herein shall impose any obligation
on the Employer to continue the employment of the Employee.
(e) If Moody's Bond Survey shall cease to publish the Corporate Bond
Yield Averages referred to in Section 3 hereof, a similar average selected by
the Board of Directors of the Employer, in its sole discretion, shall be used.
(f) This Agreement shall be executed in duplicate, and each executed
copy of this Agreement shall be deemed an original.
(g) This Agreement shall be construed in all respects under the laws of
the State of Connecticut.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
THE CONNECTICUT WATER COMPANY
___________________________ By__________________________________
Marshall T. Chiaraluce Its
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Notice of Election to Defer Compensation
Pursuant to the terms of the Deferred Compensation Agreement (the
"Agreement") by and between The Connecticut Water Company (the "Company") and
Marshall T. Chiaraluce, made as of the first day of January, 1992 and amended
and restated as of the ____ day of ____________, 1999, I hereby elect to defer,
pursuant to Section 1 thereof, ____% of my salary payable in connection with the
performance of my services as an employee of the Company beginning __________,
____. This election shall be effective for calendar years beginning after the
date hereof until the calendar year next beginning after the date on which I
notify the Company to change or terminate future deferrals pursuant to the terms
of Section 1 of the Agreement on a form provided by the Company.
I understand that this election to defer shall be continued as to the
salary which is earned for each calendar year for which this election to defer
is effective until distribution of such deferred compensation to me upon my
termination of services as an employee, or to my beneficiary in the event of my
death, as provided in the Agreement. I also understand that I may change the
amount deferred (including terminating deferrals) with respect to salary earned
for calendar years commencing after my delivery to the Company of a written
notice of change, provided such written notice is delivered to the Company on a
form approved by the Company at least seven (7) days before the commencement of
such calendar year. Further, I understand that if I terminate deferrals I may
make a new election to again defer my salary pursuant to the Agreement and that
any new election to defer payment of my salary must be made and delivered to the
Company at least seven (7) days before the beginning of the calendar year for
which the salary is payable.
In the event of my death, any payment to which I am entitled under the
terms of the Agreement which has not been made to me at the date of my death
shall be distributed to:
Primary Beneficiary(ies):
Name:______________________________
Address:___________________________
Relationship:______________________
Percentage Share:__________________
Contingent Beneficiary(ies):
Name:______________________________
Address:___________________________
Relationship:______________________
Percentage Share:__________________
in accordance with the provisions of Section 3 of the Agreement.
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Notwithstanding the foregoing to the contrary, in the event of payment
of the "Hypothetical Death Benefit" pursuant to Section 3(g) of the Agreement,
any beneficiary designation made by me in connection with a key-man life
insurance policy on my life shall supersede the beneficiary designation made
hereinabove.
- ------------------------- ------------------------------
Date Marshall T. Chiaraluce
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Exhibit 10.5
AMENDED AND RESTATED
DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT is made as of the ____ day of ________, 1999 by and
between The Connecticut Water Company (together with any affiliated companies
hereinafter collectively referred to as the "Employer") and David C.
Benoit (hereinafter referred to as the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee is among a select group of management or highly
compensated employees of the Employer who entered into a Deferred Compensation
Agreement with the Employer made as of the first day of July, 1996 (the
"Deferred Compensation Agreement"); and
WHEREAS, the Employer and the Employee desire to amend and restate the
Deferred Compensation Agreement on the terms herein set forth; and
WHEREAS, the Employer and the Employee are willing to enter into this
Amended and Restated Deferred Compensation Agreement (the "Agreement") on the
terms herein set forth.
NOW, THEREFORE, in consideration of the premises and the mutual and
dependent promises herein, the parties hereto agree as follows:
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1. DEFERRED COMPENSATION. The Employee may file a written election with
the Employer in the form attached to this Agreement or such other form as may be
approved by the Employer to defer up to 12 percent (12%) of the Employee's
salary. Such amount shall be credited to a Deferred Compensation Account as
provided in Section 2 hereof. This election to defer the receipt of salary must
be made before the beginning of the calendar year for which the salary is
payable and shall remain in effect, unless terminated or changed, or until the
date the Employee ceases to be an employee of the Employer. Any termination or
change of a deferral election must be made on a form provided by the Employer
for such purpose and may only be made with respect to salary which will be
earned on and after the January 1 following the Employer's receipt of such form
provided that such form is received at least seven (7) days prior to the
applicable January 1.
2. DEFERRED COMPENSATION ACCOUNT. The Employer shall maintain on its
books and records a Deferred Compensation Account to record its liability for
future payments of deferred compensation and interest thereon required to be
paid to the Employee or his beneficiary pursuant to this Agreement. However, the
Employer shall not be required to segregate or earmark any of its assets for the
benefit of the Employee or his beneficiary. The amount reflected in said
Deferred Compensation Account shall be available for the Employer's general
corporate purposes and shall be available to the Employer's general creditors.
The amount reflected in said Deferred Compensation Account shall not be subject
in any manner to anticipation, alienation, transfer or assignment by the
Employee or his beneficiary, and any
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attempt to anticipate, alienate, transfer or assign the same shall be void.
Neither the Employee nor his beneficiary may assert any right or claim against
any specific assets of the Employer. The Employee or his beneficiary shall have
only a contractual right against the Employer for the amount reflected in said
Deferred Compensation Account. Notwithstanding the foregoing, in order to pay
amounts which may become due under this Agreement, the Employer may establish a
grantor trust (hereinafter the "Trust") within the meaning of Section 671 of the
Internal Revenue Code of 1986, as amended. The assets in such Trust shall at all
times be subject to the claims of the general creditors of the Employer in the
event of the Employer's bankruptcy or insolvency, and neither the Employee nor
any beneficiary shall have any preferred claim or right, or any beneficial
ownership interest in, any such assets of the Trust prior to the time such
assets are paid to an Employee or beneficiary pursuant to this Agreement.
The Employer shall credit to said Deferred Compensation Account the
amount of any salary to which the Employee becomes entitled and which is
deferred pursuant to Section 1 hereof, such amount to be credited as of the
first business day of each month. The Employer shall also credit to said
Deferred Compensation Account an Interest Equivalent in the amount and manner
set forth in Section 3 hereof.
3. PAYMENT OF DEFERRED COMPENSATION
(a) Termination of Employment On or After Attainment of Age 65. If the
Employee's employment should terminate on or after his attainment of age
sixty-five (65) for any reason other than death or on account of "Cause" as
defined in subsection (d) below, he shall be
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entitled to receive payment of the entire amount of his Deferred Compensation
Account including an Interest Equivalent, as described below, in the form of an
actuarially equivalent life annuity providing for equal annual payments for the
life of the Employee with a guarantee that fifteen (15) annual payments will be
made. Such actuarially equivalent life annuity shall be computed on the basis of
a mortality table that assumes a life expectancy of age eighty (80) and uses the
Interest Factor described below.
There shall be credited to the Employee's Deferred Compensation Account
as of each January 1 and July 1, commencing with July 1, 1996 until payment of
such account is made or begins, as additional deferred compensation, an Interest
Equivalent equal to fifty percent (50%) of the product of (i) the AAA Corporate
Bond Yield Averages published by Moody's Bond Survey for the Friday ending on or
immediately preceding the applicable January 1 and July 1 plus three (3)
percentage points (the "Interest Factor"), multiplied by (ii) the balance of the
Employee's Deferred Compensation Account, including the amount of Interest
Equivalent previously credited to such Employee's account, as of the preceding
day (i.e., December 31 or June 30). The Interest Factor used to compute the
annuity payable upon the Employee's termination of employment on or after his
attainment of age sixty-five (65) shall be calculated based upon the Interest
Factor as of the January 1 or July 1 immediately preceding the date of the
Employee's termination of employment, whichever shall fall nearer to the date of
the Employee's termination of employment. The first annuity payment under this
subsection shall be paid within sixty (60) days after the commencement of the
calendar year following the Employee's termination of employment.
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Notwithstanding the foregoing, if provided by the Board of Directors of
the Employer, in its sole discretion, the Employee shall instead receive payment
in a lump sum of the entire amount of his Deferred Compensation Account,
including an Interest Equivalent, as described above. The lump sum shall be paid
within sixty (60) days after the Employee's termination of employment or, at the
discretion of the Board of Directors of the Employer, within sixty (60) days
after the commencement of the calendar year following the Employee's termination
of employment.
(b) Termination of Employment After Attainment of Age 55 and Prior to
Attainment of Age 65. If the Employee's employment should terminate after his
attainment of age fifty-five (55) and prior to his attainment of age sixty-five
(65) for any reason other than death or on account of "Cause" as defined in
subsection (d) below, he shall be entitled to receive payment of the entire
amount of his Deferred Compensation Account including an Interest Equivalent, as
described below, in the form of equal annual installments over a period equal to
the Employee's remaining life, assuming a life expectancy of age eighty (80).
There shall be credited to the Employee's Deferred Compensation Account as of
each January 1 and July 1, commencing with July 1, 1996 until payment of said
annual installments are completed, as additional deferred compensation, an
Interest Equivalent as described in subsection (a) above. The first installment
payment under this subsection shall be paid within sixty (60) days after the
commencement of the calendar year following the Employee's termination of
employment.
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Notwithstanding the foregoing, if provided by the Board of Directors of
the Employer, in its sole discretion, the Employee shall instead receive payment
in a lump sum of the entire amount of his Deferred Compensation Account,
including an Interest Equivalent, as described in subsection (a) above. The lump
sum shall be paid within sixty (60) days after the Employee's termination of
employment or, at the discretion of the Board of Directors of the Employer,
within sixty (60) days after the commencement of the calendar year following the
Employee's termination of employment.
(c) Termination of Employment Prior to Attainment of Age 55. If the
Employee's employment should terminate prior to his attainment of age fifty-five
(55) for any reason other than death or on account of "Cause" as defined in
subsection (d) below, the Employee shall be entitled to receive payment in a
lump sum of the entire amount of his Deferred Compensation Account, including
the same Interest Equivalent as described in subsection (a) above. Payment under
this subsection shall be made within sixty (60) days after the Employee's
termination of employment or, at the option of the Board of Directors of the
Employer, in its sole discretion, within sixty (60) days after the commencement
of the calendar year following the Employee's termination of employment.
(d) Termination of Employment for Cause. If the employment of the
Employee is terminated by the Employer for Cause, the Employee shall be entitled
only to a return of amounts deferred pursuant to Section 1 hereof, and this
Agreement and all payments provided for in this Agreement, including any
obligation to pay interest on deferred compensation, shall terminate.
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Said deferred amounts shall be paid in a lump sum within sixty (60) days after
the commencement of the calendar year following the Employee's termination of
employment. As used in this Agreement, the term "Cause" shall mean:
(i) the Employee's rendering, while employed by the
Employer, of any services, assistance or advice,
either directly or indirectly, to any person, firm or
organization competing with, or in opposition to, the
Employer;
(ii) the Employee's allowing, while employed by the
Employer, any use of his name by any person, firm or
organization competing with, or in opposition to, the
Employer; or
(iii) willful misconduct by the Employee, including, but
not limited to, the commission by the Employee of a
felony or the perpetration by the Employee of a
common law fraud upon the Employer.
(e) Death While Employed. Notwithstanding anything to the contrary
contained in the foregoing, if the Employee should die while employed by the
Employer, his beneficiary, designated pursuant to Section 4 hereof, shall
receive in a lump sum, in lieu of the amount(s) otherwise payable to the
Employee under this Agreement, a death benefit equal to the greater of (i) the
Hypothetical Death Benefit, as defined in subsection (g) hereof, and (ii) the
entire amount of his Deferred Compensation Account at the date of his death,
assuming that an Interest
24
-8-
Equivalent were credited to such account as of each January 1 and July 1,
commencing with July 1, 1996, until the date of death at the rate set forth in
subsection (a) hereof. Such beneficiary shall be entitled to receive such death
benefit within ninety (90) days after the Employer has been notified in writing
of the death of the Employee and has been provided with any additional
information, forms or other documents it may reasonably request.
(f) Death After Termination of Employment. If the Employee should die
after the termination of his employment with the Employer and prior to the date
on which payment of his Deferred Compensation Account has commenced in the form
of an annuity as provided in subsection (a), or has been made in the form of a
lump sum as provided in subsections (a), (b), (c) or (d), or has been fully
distributed in the event of payment in the form of installments as provided in
subsection (b), his beneficiary, designated pursuant to Section 4 hereof, shall
receive in a lump sum, in lieu of the amount(s) otherwise payable to the
Employee under this Agreement, a death benefit equal to the entire amount of the
Employee's Deferred Compensation Account at the date of his death (or the entire
remaining amount of the Employee's Deferred Compensation Account at the date of
his death in the event that payment has commenced in the form of installments as
provided in subsection (b)) and, provided that the Employee's employment shall
not have terminated on account of "Cause" as defined in subsection (d) hereof,
an Interest Equivalent credited to such account as of each January 1 and July 1,
commencing with July 1, 1996, until the date of death at the rate set forth in
subsection (a) hereof. No Interest Equivalent shall be credited to the
Employee's Deferred Compensation Account in the event of the Employee's death
after his termination on account of "Cause" as provided in subsection (d)
25
-9-
hereof. The Employee's beneficiary shall be entitled to receive such death
benefit within ninety (90) days after the Employer has been notified in writing
of the death of the Employee and has been provided with any additional
information, forms or other documents it may reasonably request.
If the Employee should die after the termination of his employment with
the Employer and after the date on which payment of his Deferred Compensation
Account and the Interest Equivalent set forth in subsection (a) hereof has
commenced in the form of an annuity as provided in subsection (a), no additional
benefits shall be payable under this Agreement after the Employee's death except
to the extent that the Employee did not receive prior to his death the
guaranteed fifteen (15) annual payments provided in subsection (a), in which
case the unpaid guaranteed payments shall be paid to the Employee's beneficiary,
designated pursuant to Section 4, in annual payments for the remainder of said
guaranteed fifteen (15)-year term.
If the Employee should die after the termination of his employment with
the Employer and after the date on which payment of his Deferred Compensation
Account and, with respect to payments made in accordance with subsections (a),
(b) or (c) hereof, the Interest Equivalent set forth in subsection (a) hereof,
has been paid in the form of a lump sum as provided in subsections (a), (b), (c)
or (d) or has been fully distributed in the form of installments as provided in
subsection (b), no additional benefits shall be payable upon the Employee's
death.
26
-10-
(g) Hypothetical Death Benefit. For purposes of this Agreement, the
term "Hypothetical Death Benefit" shall mean a lump sum benefit equal to the
proceeds of any policy of key-man life insurance on the life of the Employee, of
which the Employer is owner and beneficiary, and which policy is designated by
the Employer as subject to the provisions hereof, reduced by (i) the amount of
any tax imposed on the Employer with respect to such proceeds and (ii) the cost
to the Employer of any tax deductions postponed as a result of salary deferrals
pursuant to Section 1 hereof and increased by (iii) the tax deduction to the
Employer which would result from payment of the Hypothetical Death Benefit to a
beneficiary of the Employee. For purposes of (ii) above, an opportunity cost
factor of six (6) percent pre-tax interest will be applied during the period of
postponed deductions under (ii). The calculation of the Hypothetical Death
Benefit shall be done by the Employer, whose calculation shall be final and
binding on the Employee and his beneficiary. Anything herein to the contrary
notwithstanding, the Employer shall not be required to purchase a policy of
key-man life insurance on the life of any Employee, and any such policy
purchased by the Employer, and all proceeds thereof, shall remain at all times
available to the Employer's general creditors.
4. BENEFICIARY. The Employee has notified or will in the future notify
the Employer of the person or persons entitled to receive payments on the death
of the Employee. For the purposes of this Agreement, such person or persons are
herein referred to collectively as the "beneficiary." The person whom an
Employee designates as his beneficiary for this purpose must be one of the
following: the Employee's spouse, father, mother, sister, brother, son or
daughter. The beneficiary may also be a legal ward living with and dependent on
the Employee
27
-11-
at the time of his death. If the Employee dies and has not designated a
beneficiary, his beneficiary shall be his spouse, if living; otherwise, his
beneficiary shall be deemed to be his estate. An Employee's beneficiary
designation may be changed at any time by the Employee giving written notice to
the Employer of such change. The rights of any beneficiary presently or
hereafter designated are subject to any changes made in this Agreement by the
Employee and the Employer.
5. WITHHOLDING. The Employer shall be permitted to withhold from any
payment to the Employee or his beneficiary hereunder all federal, state or other
taxes which may be required with respect to such payment.
6. ARBITRATION. In the event that a dispute shall arise with respect to
any of the provisions of this Agreement, either the Employer or the Employee or
his beneficiary, as the case may be, may give written notice to the other
stating the claims that said party desires to arbitrate, and naming an
arbitrator. Within ten (10) days after the receipt of such notice, the party
receiving same shall appoint a second arbitrator by written notice to be sent to
the party who requested arbitration. Within ten (10) days after receipt of such
notice of appointment of the second arbitrator, the two (2) arbitrators so
appointed shall meet to select a third arbitrator and shall give written notice
of such selection to the Employer and the Employee or his beneficiary. The
decision of a majority of the arbitrators shall be conclusive and binding upon
the Employer and the Employee or his beneficiary. All notices hereunder shall be
by registered mail addressed to the last known address of the party entitled to
receive notice. The Employer and the Employee
28
-12-
shall each pay their own costs incurred in the arbitration proceeding; provided,
however, that the arbitrators may require that the losing party reimburse the
prevailing party for its costs if it shall be determined that the claim which
gave rise to the dispute was without substantial foundation.
7. MISCELLANEOUS.
(a) This Agreement shall be binding upon the parties hereto, their
heirs, executors, administrators, successors and assigns. The Employer agrees
that it will not be a party to any merger, consolidation or reorganization
unless and until its obligations hereunder shall be expressly assumed by its
successor or successors.
(b) This Agreement may be amended at any time by mutual written
agreement of the parties hereto, but no amendment shall operate to give the
Employee, or any beneficiary designated by him, either directly or indirectly,
any interest whatsoever in any funds or assets of the Employer, except the right
to receive the payments herein provided.
(c) This Agreement may be terminated by the Employer at any time that
tax or other laws are enacted or interpreted which result or will result in
costs to the Employer significantly in excess of those contemplated at the time
of the execution hereof. In the event of such termination, the Employer's sole
obligation shall be to pay to the Employee in a lump sum the amount of his
Deferred Compensation Account, including an Interest Equivalent as determined by
Section 3(a), as if the effective date of termination of this Agreement were
considered to be
29
-13-
the date of termination of the Employee's employment. Such payment shall be made
to the Employee within ninety (90) days after the effective date of termination
of this Agreement.
(d) This Agreement shall not supersede any contract of employment,
whether oral or written, between the Employer and the Employee, nor shall it
affect or impair the rights and obligations of the Employer and the Employee,
respectively, thereunder. Nothing contained herein shall impose any obligation
on the Employer to continue the employment of the Employee.
(e) If Moody's Bond Survey shall cease to publish the Corporate Bond
Yield Averages referred to in Section 3 hereof, a similar average selected by
the Board of Directors of the Employer, in its sole discretion, shall be used.
(f) This Agreement shall be executed in duplicate, and each executed
copy of this Agreement shall be deemed an original.
(g) This Agreement shall be construed in all respects under the laws of
the State of Connecticut.
30
-14-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
THE CONNECTICUT WATER COMPANY
____________________________ By__________________________________
David C. Benoit Its
31
-15-
Notice of Election to Defer Compensation
Pursuant to the terms of the Deferred Compensation Agreement (the
"Agreement") by and between The Connecticut Water Company (the "Company") and
David C. Benoit, made as of the first day of July, 1996 and amended and restated
as of the ____ day of ____________, 1999, I hereby elect to defer, pursuant to
Section 1 thereof, ____% of my salary payable in connection with the performance
of my services as an employee of the Company beginning __________, ____. This
election shall be effective for calendar years beginning after the date hereof
until the calendar year next beginning after the date on which I notify the
Company to change or terminate future deferrals pursuant to the terms of Section
1 of the Agreement on a form provided by the Company.
I understand that this election to defer shall be continued as to the
salary which is earned for each calendar year for which this election to defer
is effective until distribution of such deferred compensation to me upon my
termination of services as an employee, or to my beneficiary in the event of my
death, as provided in the Agreement. I also understand that I may change the
amount deferred (including terminating deferrals) with respect to salary earned
for calendar years commencing after my delivery to the Company of a written
notice of change, provided such written notice is delivered to the Company on a
form approved by the Company at least seven (7) days before the commencement of
such calendar year. Further, I understand that if I terminate deferrals I may
make a new election to again defer my salary pursuant to the Agreement and that
any new election to defer payment of my salary must be made and delivered to the
Company at least seven (7) days before the beginning of the calendar year for
which the salary is payable.
In the event of my death, any payment to which I am entitled under the
terms of the Agreement which has not been made to me at the date of my death
shall be distributed to:
Primary Beneficiary(ies):
Name:______________________________
Address:___________________________
Relationship:______________________
Percentage Share:__________________
Contingent Beneficiary(ies):
Name:______________________________
Address:___________________________
Relationship:______________________
Percentage Share:__________________
in accordance with the provisions of Section 3 of the Agreement.
32
-16-
Notwithstanding the foregoing to the contrary, in the event of payment
of the "Hypothetical Death Benefit" pursuant to Section 3(g) of the Agreement,
any beneficiary designation made by me in connection with a key-man life
insurance policy on my life shall supersede the beneficiary designation made
hereinabove.
- ------------------------- ------------------------------
Date David C. Benoit
33
-1-
Exhibit 10.5
AMENDED AND RESTATED
DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT is made as of the ____ day of ___________, 1999 by and
between The Connecticut Water Company (together with any affiliated companies
hereinafter collectively referred to as the "Employer") and James R. McQueen
(hereinafter referred to as the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee is among a select group of management or highly
compensated employees of the Employer who entered into a Deferred Compensation
Agreement with the Employer made as of the first day of January, 1989 (the
"Deferred Compensation Agreement"); and
WHEREAS, the Employer and the Employee desire to amend and restate the
Deferred Compensation Agreement on the terms herein set forth; and
WHEREAS, the Employer and the Employee are willing to enter into this
Amended and Restated Deferred Compensation Agreement (the "Agreement") on the
terms herein set forth.
NOW, THEREFORE, in consideration of the premises and the mutual and
dependent promises herein, the parties hereto agree as follows:
34
-2-
1. DEFERRED COMPENSATION. The Employee may file a written election with
the Employer in the form attached to this Agreement or such other form as may be
approved by the Employer to defer up to 12 percent (12%) of the Employee's
salary. Such amount shall be credited to a Deferred Compensation Account as
provided in Section 2 hereof. This election to defer the receipt of salary must
be made before the beginning of the calendar year for which the salary is
payable and shall remain in effect, unless terminated or changed, or until the
date the Employee ceases to be an employee of the Employer. Any termination or
change of a deferral election must be made on a form provided by the Employer
for such purpose and may only be made with respect to salary which will be
earned on and after the January 1 following the Employer's receipt of such form
provided that such form is received at least seven (7) days prior to the
applicable January 1.
2. DEFERRED COMPENSATION ACCOUNT. The Employer shall maintain on its
books and records a Deferred Compensation Account to record its liability for
future payments of deferred compensation and interest thereon required to be
paid to the Employee or his beneficiary pursuant to this Agreement. However, the
Employer shall not be required to segregate or earmark any of its assets for the
benefit of the Employee or his beneficiary. The amount reflected in said
Deferred Compensation Account shall be available for the Employer's general
corporate purposes and shall be available to the Employer's general creditors.
The amount reflected in said Deferred Compensation Account shall not be subject
in any manner to anticipation, alienation, transfer or assignment by the
Employee or his beneficiary, and any attempt to anticipate, alienate, transfer
or assign the same shall be void. Neither the Employee
35
-3-
nor his beneficiary may assert any right or claim against any specific assets of
the Employer. The Employee or his beneficiary shall have only a contractual
right against the Employer for the amount reflected in said Deferred
Compensation Account. Notwithstanding the foregoing, in order to pay amounts
which may become due under this Agreement, the Employer may establish a grantor
trust (hereinafter the "Trust") within the meaning of Section 671 of the
Internal Revenue Code of 1986, as amended. The assets in such Trust shall at all
times be subject to the claims of the general creditors of the Employer in the
event of the Employer's bankruptcy or insolvency, and neither the Employee nor
any beneficiary shall have any preferred claim or right, or any beneficial
ownership interest in, any such assets of the Trust prior to the time such
assets are paid to an Employee or beneficiary pursuant to this Agreement.
The Employer shall credit to said Deferred Compensation Account the
amount of any salary to which the Employee becomes entitled and which is
deferred pursuant to Section 1 hereof, such amount to be credited as of the
first business day of each month. The Employer shall also credit to said
Deferred Compensation Account an Interest Equivalent in the amount and manner
set forth in Section 3 hereof.
3. PAYMENT OF DEFERRED COMPENSATION
(a) Termination of Employment On or After Attainment of Age 65. If the
Employee's employment should terminate on or after his attainment of age
sixty-five (65) for any reason other than death or on account of "Cause" as
defined in subsection (d) below, he shall be entitled to receive payment of the
entire amount of his Deferred Compensation Account
36
-4-
including an Interest Equivalent, as described below, in the form of an
actuarially equivalent life annuity providing for equal annual payments for the
life of the Employee with a guarantee that fifteen (15) annual payments will be
made. Such actuarially equivalent life annuity shall be computed on the basis of
a mortality table that assumes a life expectancy of age eighty (80) and uses the
Interest Factor described below.
There shall be credited to the Employee's Deferred Compensation Account
as of each January 1 and July 1, commencing with January 1, 1989, until payment
of such account is made or begins, as additional deferred compensation, an
Interest Equivalent equal to fifty percent (50%) of the product of (i) the AAA
Corporate Bond Yield Averages published by Moody's Bond Survey for the Friday
ending on or immediately preceding the applicable January 1 and July 1 plus one
and one-half (1 1/2) percentage points (the "Interest Factor"), multiplied by
(ii) the balance of the Employee's Deferred Compensation Account, including the
amount of Interest Equivalent previously credited to such Employee's account, as
of the preceding day (i.e., December 31 or June 30). The Interest Factor used to
compute the annuity payable upon the Employee's termination of employment on or
after his attainment of age sixty-five (65) shall be calculated based upon the
Interest Factor as of the January 1 or July 1 immediately preceding the date of
the Employee's termination of employment, whichever shall fall nearer to the
date of the Employee's termination of employment. The first annuity payment
under this subsection shall be paid within sixty (60) days after the
commencement of the calendar year following the Employee's termination of
employment.
37
-5-
Notwithstanding the foregoing, if provided by the Board of Directors of
the Employer, in its sole discretion, the Employee shall instead receive payment
in a lump sum of the entire amount of his Deferred Compensation Account,
including an Interest Equivalent, as described above. The lump sum shall be paid
within sixty (60) days after the Employee's termination of employment or, at the
discretion of the Board of Directors of the Employer, within sixty (60) days
after the commencement of the calendar year following the Employee's termination
of employment.
(b) Termination of Employment After Attainment of Age 55 and Prior to
Attainment of Age 65. If the Employee's employment should terminate after his
attainment of age fifty-five (55) and prior to his attainment of age sixty-five
(65) for any reason other than death or on account of "Cause" as defined in
subsection (d) below, he shall be entitled to receive payment of the entire
amount of his Deferred Compensation Account including an Interest Equivalent, as
described below, in the form of equal annual installments over a period equal to
the Employee's remaining life, assuming a life expectancy of age eighty (80).
There shall be credited to the Employee's Deferred Compensation Account as of
each January 1 and July 1, commencing with January 1, 1989 until payment of said
annual installments are completed, as additional deferred compensation, an
Interest Equivalent as described in subsection (a) above. The first installment
payment under this subsection shall be paid within sixty (60) days after the
commencement of the calendar year following the Employee's termination of
employment.
38
-6-
Notwithstanding the foregoing, if provided by the Board of Directors of
the Employer, in its sole discretion, the Employee shall instead receive payment
in a lump sum of the entire amount of his Deferred Compensation Account,
including an Interest Equivalent, as described in subsection (a) above. The lump
sum shall be paid within sixty (60) days after the Employee's termination of
employment or, at the discretion of the Board of Directors of the Employer,
within sixty (60) days after the commencement of the calendar year following the
Employee's termination of employment.
(c) Termination of Employment Prior to Attainment of Age 55. If the
Employee's employment should terminate prior to his attainment of age fifty-five
(55) for any reason other than death or on account of "Cause" as defined in
subsection (d) below, the Employee shall be entitled to receive payment in a
lump sum of the entire amount of his Deferred Compensation Account, including
the same Interest Equivalent as described in subsection (a) above. Payment under
this subsection shall be made within sixty (60) days after the Employee's
termination of employment or, at the option of the Board of Directors of the
Employer, in its sole discretion, within sixty (60) days after the commencement
of the calendar year following the Employee's termination of employment.
(d) Termination of Employment for Cause. If the employment of the
Employee is terminated by the Employer for Cause, the Employee shall be entitled
only to a return of amounts deferred pursuant to Section 1 hereof, and this
Agreement and all payments provided for in this Agreement, including any
obligation to pay interest on deferred compensation, shall terminate.
39
-7-
Said deferred amounts shall be paid in a lump sum within sixty (60) days after
the commencement of the calendar year following the Employee's termination of
employment. As used in this Agreement, the term "Cause" shall mean:
(i) the Employee's rendering, while employed by the Employer, of
any services, assistance or advice, either directly or
indirectly, to any person, firm or organization competing
with, or in opposition to, the Employer;
(ii) the Employee's allowing, while employed by the Employer, any
use of his name by any person, firm or organization
competing with, or in opposition to, the Employer; or
(iii) willful misconduct by the Employee, including, but not
limited to, the commission by the Employee of a felony or
the perpetration by the Employee of a common law fraud upon
the Employer.
(e) Death While Employed. Notwithstanding anything to the contrary
contained in the foregoing, if the Employee should die while employed by the
Employer, his beneficiary, designated pursuant to Section 4 hereof, shall
receive in a lump sum, in lieu of the amount(s) otherwise payable to the
Employee under this Agreement, a death benefit equal to the greater of (i) the
Hypothetical Death Benefit, as defined in subsection (g) hereof, and (ii) the
entire amount of his Deferred Compensation Account at the date of his death,
assuming that an Interest
40
-8-
Equivalent were credited to such account as of each January 1 and July 1,
commencing with January 1, 1989, until the date of death at the rate set forth
in subsection (a) hereof. Such beneficiary shall be entitled to receive such
death benefit within ninety (90) days after the Employer has been notified in
writing of the death of the Employee and has been provided with any additional
information, forms or other documents it may reasonably request.
(f) Death After Termination of Employment. If the Employee should die
after the termination of his employment with the Employer and prior to the date
on which payment of his Deferred Compensation Account has commenced in the form
of an annuity as provided in subsection (a) or has been made in the form of a
lump sum as provided in subsections (a), (b), (c) or (d) or has been fully
distributed in the event of payment in the form of installments as provided in
subsection (b), his beneficiary, designated pursuant to Section 4 hereof, shall
receive in a lump sum, in lieu of the amount(s) otherwise payable to the
Employee under this Agreement, a death benefit equal to the entire amount of the
Employee's Deferred Compensation Account at the date of his death (or the entire
remaining amount of the Employee's Deferred Compensation Account at the date of
his death in the event that payment has commenced in the form of installments as
provided in subsection (b)) and, provided that the Employee's employment shall
not have terminated on account of "Cause" as provided in subsection (d) hereof,
an Interest Equivalent credited to such account as of each January 1 and July 1,
commencing with January 1, 1989, until the date of death at the rate set forth
in subsection (a) hereof. No Interest Equivalent shall be credited to the
Employee's Deferred Compensation Account in the event of the Employee's death
after his termination on account of "Cause" as
41
-9-
provided in subsection (d) hereof. The Employee's beneficiary shall be entitled
to receive such death benefit within ninety (90) days after the Employer has
been notified in writing of the death of the Employee and has been provided with
any additional information, forms or other documents it may reasonably request.
If the Employee should die after the termination of his employment with
the Employer and after the date on which payment of his Deferred Compensation
Account and the Interest Equivalent set forth in subsection (a) hereof has
commenced in the form of an annuity as provided in subsection (a), no additional
benefits shall be payable under this Agreement after the Employee's death except
to the extent that the Employee did not receive prior to his death the
guaranteed fifteen (15) annual payments provided in subsection (a), in which
case the unpaid guaranteed payments shall be paid to the Employee's beneficiary,
designated pursuant to Section 4, in annual payments for the remainder of said
guaranteed fifteen (15)-year term.
If the Employee should die after the termination of his employment with
the Employer and after the date on which payment of his Deferred Compensation
Account and, with respect to payments made in accordance with subsections (a),
(b) or (c) hereof, the Interest Equivalent set forth in subsection (a) hereof,
has been paid in the form of a lump sum as provided in subsections (a), (b), (c)
or (d) or has been fully distributed in the form of installments as provided in
subsection (b), no additional benefits shall be payable upon the Employee's
death.
42
-10-
(g) Hypothetical Death Benefit. For purposes of this Agreement, the
term "Hypothetical Death Benefit" shall mean a lump sum benefit equal to the
proceeds of any policy of key-man life insurance on the life of the Employee, of
which the Employer is owner and beneficiary, and which policy is designated by
the Employer as subject to the provisions hereof, reduced by (i) the amount of
any tax imposed on the Employer with respect to such proceeds and (ii) the cost
to the Employer of any tax deductions postponed as a result of salary deferrals
pursuant to Section 1 hereof and increased by (iii) the tax deduction to the
Employer which would result from payment of the Hypothetical Death Benefit to a
beneficiary of the Employee. For purposes of (ii) above, an opportunity cost
factor of six (6) percent pre-tax interest will be applied during the period of
postponed deductions under (ii). The calculation of the Hypothetical Death
Benefit shall be done by the Employer, whose calculation shall be final and
binding on the Employee and his beneficiary. Anything herein to the contrary
notwithstanding, the Employer shall not be required to purchase a policy of
key-man life insurance on the life of any Employee, and any such policy
purchased by the Employer, and all proceeds thereof, shall remain at all times
available to the Employer's general creditors.
4. BENEFICIARY. The Employee has notified or will in the future notify
the Employer of the person or persons entitled to receive payments on the death
of the Employee. For the purposes of this Agreement, such person or persons are
herein referred to collectively as the "beneficiary." The person whom an
Employee designates as his beneficiary for this purpose must be one of the
following: the Employee's spouse, father, mother, sister, brother, son or
daughter. The beneficiary may also be a legal ward living with and dependent on
the Employee
43
-11-
at the time of his death. If the Employee dies and has not designated a
beneficiary, his beneficiary shall be his spouse, if living; otherwise, his
beneficiary shall be deemed to be his estate. An Employee's beneficiary
designation may be changed at any time by the Employee giving written notice to
the Employer of such change. The rights of any beneficiary presently or
hereafter designated are subject to any changes made in this Agreement by the
Employee and the Employer.
5. WITHHOLDING. The Employer shall be permitted to withhold from any
payment to the Employee or his beneficiary hereunder all federal, state or other
taxes which may be required with respect to such payment.
6. ARBITRATION. In the event that a dispute shall arise with respect to
any of the provisions of this Agreement, either the Employer or the Employee or
his beneficiary, as the case may be, may give written notice to the other
stating the claims that said party desires to arbitrate, and naming an
arbitrator. Within ten (10) days after the receipt of such notice, the party
receiving same shall appoint a second arbitrator by written notice to be sent to
the party who requested arbitration. Within ten (10) days after receipt of such
notice of appointment of the second arbitrator, the two (2) arbitrators so
appointed shall meet to select a third arbitrator and shall give written notice
of such selection to the Employer and the Employee or his beneficiary. The
decision of a majority of the arbitrators shall be conclusive and binding upon
the Employer and the Employee or his beneficiary. All notices hereunder shall be
by registered mail addressed to the last known address of the party entitled to
receive notice. The Employer and the Employee
44
-12-
shall each pay their own costs incurred in the arbitration proceeding; provided,
however, that the arbitrators may require that the losing party reimburse the
prevailing party for its costs if it shall be determined that the claim which
gave rise to the dispute was without substantial foundation.
7. MISCELLANEOUS.
(a) This Agreement shall be binding upon the parties hereto, their
heirs, executors, administrators, successors and assigns. The Employer agrees
that it will not be a party to any merger, consolidation or reorganization
unless and until its obligations hereunder shall be expressly assumed by its
successor or successors.
(b) This Agreement may be amended at any time by mutual written
agreement of the parties hereto, but no amendment shall operate to give the
Employee, or any beneficiary designated by him, either directly or indirectly,
any interest whatsoever in any funds or assets of the Employer, except the right
to receive the payments herein provided.
(c) This Agreement may be terminated by the Employer at any time that
tax or other laws are enacted or interpreted which result or will result in
costs to the Employer significantly in excess of those contemplated at the time
of the execution hereof. In the event of such termination, the Employer's sole
obligation shall be to pay to the Employee in a lump sum the amount of his
Deferred Compensation Account, including an Interest Equivalent as determined by
Section 3(a), as if the effective date of termination of this Agreement were
considered to be
45
-13-
the date of termination of the Employee's employment. Such payment shall be made
to the Employee within ninety (90) days after the effective date of termination
of this Agreement.
(d) This Agreement shall not supersede any contract of employment,
whether oral or written, between the Employer and the Employee, nor shall it
affect or impair the rights and obligations of the Employer and the Employee,
respectively, thereunder. Nothing contained herein shall impose any obligation
on the Employer to continue the employment of the Employee.
(e) If Moody's Bond Survey shall cease to publish the Corporate Bond
Yield Averages referred to in Section 3 hereof, a similar average selected by
the Board of Directors of the Employer, in its sole discretion, shall be used.
(f) This Agreement shall be executed in duplicate, and each executed
copy of this Agreement shall be deemed an original.
(g) This Agreement shall be construed in all respects under the laws of
the State of Connecticut.
46
-14-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
THE CONNECTICUT WATER COMPANY
___________________________ By__________________________________
James R. McQueen Its
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Notice of Election to Defer Compensation
Pursuant to the terms of the Deferred Compensation Agreement (the
"Agreement") by and between The Connecticut Water Company (the "Company") and
James R. McQueen, made as of the first day of January, 1989 and amended and
restated as of the ____ day of ____________, 1999, I hereby elect to defer,
pursuant to Section 1 thereof, ____% of my salary payable in connection with the
performance of my services as an employee of the Company beginning __________,
____. This election shall be effective for calendar years beginning after the
date hereof until the calendar year next beginning after the date on which I
notify the Company to change or terminate future deferrals pursuant to the terms
of Section 1 of the Agreement on a form provided by the Company.
I understand that this election to defer shall be continued as to the
salary which is earned for each calendar year for which this election to defer
is effective until distribution of such deferred compensation to me upon my
termination of services as an employee, or to my beneficiary in the event of my
death, as provided in the Agreement. I also understand that I may change the
amount deferred (including terminating deferrals) with respect to salary earned
for calendar years commencing after my delivery to the Company of a written
notice of change, provided such written notice is delivered to the Company on a
form approved by the Company at least seven (7) days before the commencement of
such calendar year. Further, I understand that if I terminate deferrals I may
make a new election to again defer my salary pursuant to the Agreement and that
any new election to defer payment of my salary must be made and delivered to the
Company at least seven (7) days before the beginning of the calendar year for
which the salary is payable.
In the event of my death, any payment to which I am entitled under the
terms of the Agreement which has not been made to me at the date of my death
shall be distributed to:
Primary Beneficiary(ies):
Name:_________________________________
Address:______________________________
Relationship:_________________________
Percentage Share:_____________________
Contingent Beneficiary(ies):
Name:_________________________________
Address:______________________________
Relationship:_________________________
Percentage Share:_____________________
in accordance with the provisions of Section 3 of the Agreement.
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Notwithstanding the foregoing to the contrary, in the event of payment
of the "Hypothetical Death Benefit" pursuant to Section 3(g) of the Agreement,
any beneficiary designation made by me in connection with a key-man life
insurance policy on my life shall supersede the beneficiary designation made
hereinabove.
- ------------------------- ------------------------------
Date James R. McQueen
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Exhibit 10.5
AMENDED AND RESTATED
DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT is made as of the ____ day of _____________, 1999 by and
between The Connecticut Water Company (together with any affiliated companies
hereinafter collectively referred to as the "Employer") and Kenneth W. Kells
(hereinafter referred to as the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee is among a select group of management or highly
compensated employees of the Employer who entered into a Deferred Compensation
Agreement with the Employer made as of the first day of January, 1989 (the
"Deferred Compensation Agreement"); and
WHEREAS, the Employer and the Employee desire to amend and restate the
Deferred Compensation Agreement on the terms herein set forth; and
WHEREAS, the Employer and the Employee are willing to enter into this
Amended and Restated Deferred Compensation Agreement (the "Agreement") on the
terms herein set forth.
NOW, THEREFORE, in consideration of the premises and the mutual and
dependent promises herein, the parties hereto agree as follows:
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1. DEFERRED COMPENSATION. The Employee may file a written election with
the Employer in the form attached to this Agreement or such other form as may be
approved by the Employer to defer up to 12 percent (12%) of the Employee's
salary. Such amount shall be credited to a Deferred Compensation Account as
provided in Section 2 hereof. This election to defer the receipt of salary must
be made before the beginning of the calendar year for which the salary is
payable and shall remain in effect, unless terminated or changed, or until the
date the Employee ceases to be an employee of the Employer. Any termination or
change of a deferral election must be made on a form provided by the Employer
for such purpose and may only be made with respect to salary which will be
earned on and after the January 1 following the Employer's receipt of such form
provided that such form is received at least seven (7) days prior to the
applicable January 1.
2. DEFERRED COMPENSATION ACCOUNT. The Employer shall maintain on its
books and records a Deferred Compensation Account to record its liability for
future payments of deferred compensation and interest thereon required to be
paid to the Employee or his beneficiary pursuant to this Agreement. However, the
Employer shall not be required to segregate or earmark any of its assets for the
benefit of the Employee or his beneficiary. The amount reflected in said
Deferred Compensation Account shall be available for the Employer's general
corporate purposes and shall be available to the Employer's general creditors.
The amount reflected in said Deferred Compensation Account shall not be subject
in any manner to anticipation, alienation, transfer or assignment by the
Employee or his beneficiary, and any attempt to anticipate, alienate, transfer
or assign the same shall be void. Neither the Employee
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nor his beneficiary may assert any right or claim against any specific assets of
the Employer. The Employee or his beneficiary shall have only a contractual
right against the Employer for the amount reflected in said Deferred
Compensation Account. Notwithstanding the foregoing, in order to pay amounts
which may become due under this Agreement, the Employer may establish a grantor
trust (hereinafter the "Trust") within the meaning of Section 671 of the
Internal Revenue Code of 1986, as amended. The assets in such Trust shall at all
times be subject to the claims of the general creditors of the Employer in the
event of the Employer's bankruptcy or insolvency, and neither the Employee nor
any beneficiary shall have any preferred claim or right, or any beneficial
ownership interest in, any such assets of the Trust prior to the time such
assets are paid to an Employee or beneficiary pursuant to this Agreement.
The Employer shall credit to said Deferred Compensation Account the
amount of any salary to which the Employee becomes entitled and which is
deferred pursuant to Section 1 hereof, such amount to be credited as of the
first business day of each month. The Employer shall also credit to said
Deferred Compensation Account an Interest Equivalent in the amount and manner
set forth in Section 3 hereof.
3. PAYMENT OF DEFERRED COMPENSATION
(a) Termination of Employment On or After Attainment of Age 65. If the
Employee's employment should terminate on or after his attainment of age
sixty-five (65) for any reason other than death or on account of "Cause" as
defined in subsection (d) below, he shall be entitled to receive payment of the
entire amount of his Deferred Compensation Account
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including an Interest Equivalent, as described below, in the form of an
actuarially equivalent life annuity providing for equal annual payments for the
life of the Employee with a guarantee that fifteen (15) annual payments will be
made. Such actuarially equivalent life annuity shall be computed on the basis of
a mortality table that assumes a life expectancy of age eighty (80) and uses the
Interest Factor described below.
There shall be credited to the Employee's Deferred Compensation Account
as of each January 1 and July 1, commencing with January 1, 1989, until payment
of such account is made or begins, as additional deferred compensation, an
Interest Equivalent equal to fifty percent (50%) of the product of (i) the AAA
Corporate Bond Yield Averages published by Moody's Bond Survey for the Friday
ending on or immediately preceding the applicable January 1 and July 1 plus two
(2) percentage points (the "Interest Factor"), multiplied by (ii) the balance of
the Employee's Deferred Compensation Account, including the amount of Interest
Equivalent previously credited to such Employee's account, as of the preceding
day (i.e., December 31 or June 30). The Interest Factor used to compute the
annuity payable upon the Employee's termination of employment on or after his
attainment of age sixty-five (65) shall be calculated based upon the Interest
Factor as of the January 1 or July 1 immediately preceding the date of the
Employee's termination of employment, whichever shall fall nearer to the date of
the Employee's termination of employment. The first annuity payment under this
subsection shall be paid within sixty (60) days after the commencement of the
calendar year following the Employee's termination of employment.
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Notwithstanding the foregoing, if provided by the Board of Directors of
the Employer, in its sole discretion, the Employee shall instead receive payment
in a lump sum of the entire amount of his Deferred Compensation Account,
including an Interest Equivalent, as described above. The lump sum shall be paid
within sixty (60) days after the Employee's termination of employment or, at the
discretion of the Board of Directors of the Employer, within sixty (60) days
after the commencement of the calendar year following the Employee's termination
of employment.
(b) Termination of Employment After Attainment of Age 55 and Prior to
Attainment of Age 65. If the Employee's employment should terminate after his
attainment of age fifty-five (55) and prior to his attainment of age sixty-five
(65) for any reason other than death or on account of "Cause" as defined in
subsection (d) below, he shall be entitled to receive payment of the entire
amount of his Deferred Compensation Account including an Interest Equivalent, as
described below, in the form of equal annual installments over a period equal to
the Employee's remaining life, assuming a life expectancy of age eighty (80).
There shall be credited to the Employee's Deferred Compensation Account as of
each January 1 and July 1, commencing with January 1, 1989 until payment of said
annual installments are completed, as additional deferred compensation, an
Interest Equivalent as described in subsection (a) above. The first installment
payment under this subsection shall be paid within sixty (60) days after the
commencement of the calendar year following the Employee's termination of
employment.
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Notwithstanding the foregoing, if provided by the Board of Directors of
the Employer, in its sole discretion, the Employee shall instead receive payment
in a lump sum of the entire amount of his Deferred Compensation Account,
including an Interest Equivalent, as described in subsection (a) above. The lump
sum shall be paid within sixty (60) days after the Employee's termination of
employment or, at the discretion of the Board of Directors of the Employer,
within sixty (60) days after the commencement of the calendar year following the
Employee's termination of employment.
(c) Termination of Employment Prior to Attainment of Age 55. If the
Employee's employment should terminate prior to his attainment of age fifty-five
(55) for any reason other than death or on account of "Cause" as defined in
subsection (d) below, the Employee shall be entitled to receive payment in a
lump sum of the entire amount of his Deferred Compensation Account, including
the same Interest Equivalent as described in subsection (a) above. Payment under
this subsection shall be made within sixty (60) days after the Employee's
termination of employment or, at the option of the Board of Directors of the
Employer, in its sole discretion, within sixty (60) days after the commencement
of the calendar year following the Employee's termination of employment.
(d) Termination of Employment for Cause. If the employment of the
Employee is terminated by the Employer for Cause, the Employee shall be entitled
only to a return of amounts deferred pursuant to Section 1 hereof, and this
Agreement and all payments provided for in this Agreement, including any
obligation to pay interest on deferred compensation, shall terminate.
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-7-
Said deferred amounts shall be paid in a lump sum within sixty (60) days after
the commencement of the calendar year following the Employee's termination of
employment. As used in this Agreement, the term "Cause" shall mean:
(i) the Employee's rendering, while employed by the Employer, of
any services, assistance or advice, either directly or
indirectly, to any person, firm or organization competing
with, or in opposition to, the Employer;
(ii) the Employee's allowing, while employed by the Employer, any
use of his name by any person, firm or organization
competing with, or in opposition to, the Employer; or
(iii) willful misconduct by the Employee, including, but not
limited to, the commission by the Employee of a felony or
the perpetration by the Employee of a common law fraud upon
the Employer.
(e) Death While Employed. Notwithstanding anything to the contrary
contained in the foregoing, if the Employee should die while employed by the
Employer, his beneficiary, designated pursuant to Section 4 hereof, shall
receive in a lump sum, in lieu of the amount(s) otherwise payable to the
Employee under this Agreement, a death benefit equal to the greater of (i) the
Hypothetical Death Benefit, as defined in subsection (g) hereof, and (ii) the
entire amount of his Deferred Compensation Account at the date of his death,
assuming that an Interest
56
-8-
Equivalent were credited to such account as of each January 1 and July 1,
commencing with January 1, 1989, until the date of death at the rate set forth
in subsection (a) hereof. Such beneficiary shall be entitled to receive such
death benefit within ninety (90) days after the Employer has been notified in
writing of the death of the Employee and has been provided with any additional
information, forms or other documents it may reasonably request.
(f) Death After Termination of Employment. If the Employee should die
after the termination of his employment with the Employer and prior to the date
on which payment of his Deferred Compensation Account has commenced in the form
of an annuity as provided in subsection (a), or has been made in the form of a
lump sum as provided in subsections (a), (b), (c) or (d) or has been fully
distributed in the event of payment in the form of installments as provided in
subsection (b), his beneficiary, designated pursuant to Section 4 hereof, shall
receive in a lump sum, in lieu of the amount(s) otherwise payable to the
Employee under this Agreement, a death benefit equal to the entire amount of the
Employee's Deferred Compensation Account at the date of his death (or the entire
remaining amount of the Employee's Deferred Compensation Account at the date of
his death in the event that payment has commenced in the form of installments as
provided in subsection (b)) and, provided that the Employee's employment shall
not have terminated on account of "Cause" as provided in subsection (d) hereof,
an Interest Equivalent credited to such account as of each January 1 and July 1,
commencing with January 1, 1989, until the date of death at the rate set forth
in subsection (a) hereof. No Interest Equivalent shall be credited to the
Employee's Deferred Compensation Account in the event of the Employee's death
after his termination on account of "Cause" as
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-9-
provided in subsection (d) hereof. The Employee's beneficiary shall be entitled
to receive such death benefit within ninety (90) days after the Employer has
been notified in writing of the death of the Employee and has been provided with
any additional information, forms or other documents it may reasonably request.
If the Employee should die after the termination of his employment with
the Employer and after the date on which payment of his Deferred Compensation
Account and the Interest Equivalent set forth in subsection (a) hereof has
commenced in the form of an annuity as provided in subsection (a), no additional
benefits shall be payable under this Agreement after the Employee's death except
to the extent that the Employee did not receive prior to his death the
guaranteed fifteen (15) annual payments provided in subsection (a), in which
case the unpaid guaranteed payments shall be paid to the Employee's beneficiary,
designated pursuant to Section 4, in annual payments for the remainder of said
guaranteed fifteen (15)-year term.
If the Employee should die after the termination of his employment with
the Employer and after the date on which payment of his Deferred Compensation
Account and, with respect to payments made in accordance with subsections
(a),(b) or (c) hereof, the Interest Equivalent set forth in subsection (a)
hereof, has been paid in the form of a lump sum as provided in subsections (a),
(b), (c) or (d) or has been fully distributed in the form of installments as
provided in subsection (b), no additional benefits shall be payable upon the
Employee's death.
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(g) Hypothetical Death Benefit. For purposes of this Agreement, the
term "Hypothetical Death Benefit" shall mean a lump sum benefit equal to the
proceeds of any policy of key-man life insurance on the life of the Employee, of
which the Employer is owner and beneficiary, and which policy is designated by
the Employer as subject to the provisions hereof, reduced by (i) the amount of
any tax imposed on the Employer with respect to such proceeds and (ii) the cost
to the Employer of any tax deductions postponed as a result of salary deferrals
pursuant to Section 1 hereof and increased by (iii) the tax deduction to the
Employer which would result from payment of the Hypothetical Death Benefit to a
beneficiary of the Employee. For purposes of (ii) above, an opportunity cost
factor of six (6) percent pre-tax interest will be applied during the period of
postponed deductions under (ii). The calculation of the Hypothetical Death
Benefit shall be done by the Employer, whose calculation shall be final and
binding on the Employee and his beneficiary. Anything herein to the contrary
notwithstanding, the Employer shall not be required to purchase a policy of
key-man life insurance on the life of any Employee, and any such policy
purchased by the Employer, and all proceeds thereof, shall remain at all times
available to the Employer's general creditors.
4. BENEFICIARY. The Employee has notified or will in the future notify
the Employer of the person or persons entitled to receive payments on the death
of the Employee. For the purposes of this Agreement, such person or persons are
herein referred to collectively as the "beneficiary." The person whom an
Employee designates as his beneficiary for this purpose must be one of the
following: the Employee's spouse, father, mother, sister, brother, son or
daughter. The beneficiary may also be a legal ward living with and dependent on
the Employee
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-11-
at the time of his death. If the Employee dies and has not designated a
beneficiary, his beneficiary shall be his spouse, if living; otherwise, his
beneficiary shall be deemed to be his estate. An Employee's beneficiary
designation may be changed at any time by the Employee giving written notice to
the Employer of such change. The rights of any beneficiary presently or
hereafter designated are subject to any changes made in this Agreement by the
Employee and the Employer.
5. WITHHOLDING. The Employer shall be permitted to withhold from any
payment to the Employee or his beneficiary hereunder all federal, state or other
taxes which may be required with respect to such payment.
6. ARBITRATION. In the event that a dispute shall arise with respect to
any of the provisions of this Agreement, either the Employer or the Employee or
his beneficiary, as the case may be, may give written notice to the other
stating the claims that said party desires to arbitrate, and naming an
arbitrator. Within ten (10) days after the receipt of such notice, the party
receiving same shall appoint a second arbitrator by written notice to be sent to
the party who requested arbitration. Within ten (10) days after receipt of such
notice of appointment of the second arbitrator, the two (2) arbitrators so
appointed shall meet to select a third arbitrator and shall give written notice
of such selection to the Employer and the Employee or his beneficiary. The
decision of a majority of the arbitrators shall be conclusive and binding upon
the Employer and the Employee or his beneficiary. All notices hereunder shall be
by registered mail addressed to the last known address of the party entitled to
receive notice. The Employer and the Employee
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-12-
shall each pay their own costs incurred in the arbitration proceeding; provided,
however, that the arbitrators may require that the losing party reimburse the
prevailing party for its costs if it shall be determined that the claim which
gave rise to the dispute was without substantial foundation.
7. MISCELLANEOUS.
(a) This Agreement shall be binding upon the parties hereto, their
heirs, executors, administrators, successors and assigns. The Employer agrees
that it will not be a party to any merger, consolidation or reorganization
unless and until its obligations hereunder shall be expressly assumed by its
successor or successors.
(b) This Agreement may be amended at any time by mutual written
agreement of the parties hereto, but no amendment shall operate to give the
Employee, or any beneficiary designated by him, either directly or indirectly,
any interest whatsoever in any funds or assets of the Employer, except the right
to receive the payments herein provided.
(c) This Agreement may be terminated by the Employer at any time that
tax or other laws are enacted or interpreted which result or will result in
costs to the Employer significantly in excess of those contemplated at the time
of the execution hereof. In the event of such termination, the Employer's sole
obligation shall be to pay to the Employee in a lump sum the amount of his
Deferred Compensation Account, including an Interest Equivalent as determined by
Section 3(a), as if the effective date of termination of this Agreement were
considered to be
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-13-
the date of termination of the Employee's employment. Such payment shall be made
to the Employee within ninety (90) days after the effective date of termination
of this Agreement.
(d) This Agreement shall not supersede any contract of employment,
whether oral or written, between the Employer and the Employee, nor shall it
affect or impair the rights and obligations of the Employer and the Employee,
respectively, thereunder. Nothing contained herein shall impose any obligation
on the Employer to continue the employment of the Employee.
(e) If Moody's Bond Survey shall cease to publish the Corporate Bond
Yield Averages referred to in Section 3 hereof, a similar average selected by
the Board of Directors of the Employer, in its sole discretion, shall be used.
(f) This Agreement shall be executed in duplicate, and each executed
copy of this Agreement shall be deemed an original.
(g) This Agreement shall be construed in all respects under the laws of
the State of Connecticut.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
THE CONNECTICUT WATER COMPANY
___________________________ By__________________________________
Kenneth W. Kells Its
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Notice of Election to Defer Compensation
Pursuant to the terms of the Deferred Compensation Agreement (the
"Agreement") by and between The Connecticut Water Company (the "Company") and
Kenneth W. Kells, made as of the first day of January, 1989 and amended and
restated as of the ____ day of ____________, 1999, I hereby elect to defer,
pursuant to Section 1 thereof, ____% of my salary payable in connection with the
performance of my services as an employee of the Company beginning __________,
____. This election shall be effective for calendar years beginning after the
date hereof until the calendar year next beginning after the date on which I
notify the Company to change or terminate future deferrals pursuant to the terms
of Section 1 of the Agreement on a form provided by the Company.
I understand that this election to defer shall be continued as to the
salary which is earned for each calendar year for which this election to defer
is effective until distribution of such deferred compensation to me upon my
termination of services as an employee, or to my beneficiary in the event of my
death, as provided in the Agreement. I also understand that I may change the
amount deferred (including terminating deferrals) with respect to salary earned
for calendar years commencing after my delivery to the Company of a written
notice of change, provided such written notice is delivered to the Company on a
form approved by the Company at least seven (7) days before the commencement of
such calendar year. Further, I understand that if I terminate deferrals I may
make a new election to again defer my salary pursuant to the Agreement and that
any new election to defer payment of my salary must be made and delivered to the
Company at least seven (7) days before the beginning of the calendar year for
which the salary is payable.
In the event of my death, any payment to which I am entitled under the
terms of the Agreement which has not been made to me at the date of my death
shall be distributed to:
Primary Beneficiary(ies):
Name:_________________________________
Address:______________________________
Relationship:_________________________
Percentage Share:_____________________
Contingent Beneficiary(ies):
Name:_________________________________
Address:______________________________
Relationship:_________________________
Percentage Share:_____________________
in accordance with the provisions of Section 3 of the Agreement.
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Notwithstanding the foregoing to the contrary, in the event of payment
of the "Hypothetical Death Benefit" pursuant to Section 3(g) of the Agreement,
any beneficiary designation made by me in connection with a key-man life
insurance policy on my life shall supersede the beneficiary designation made
hereinabove.
- ------------------------- ------------------------------
Date Kenneth W. Kells