Exhibit 10.1
WAUSAU-MOSINEE PAPER CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
WAUSAU-MOSINEE PAPER CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
1. ADOPTION OF PLAN. Wausau-Mosinee Paper Corporation ("the Company")
hereby adopts the Wausau-Mosinee Paper Corporation Executive Deferred
Compensation Plan (the "Plan") effective as of April 17, 2003.
2. PURPOSE. The purpose of the Plan is to permit Executive Officers
to defer compensation in order to aid the Company and its Subsidiaries in
attracting and retaining persons whose abilities, experience, and judgment can
contribute to the continued success of the Company.
3. DEFINITIONS. As used in this Plan, the following terms shall have
the meaning set forth in this section 3:
(a) "ACCOUNT" means the account established pursuant to section 5(a) to
record the Salary or Incentive Compensation, or both, deferred by a
Participant.
(b) "BENEFICIARY" means such person or persons, or organization or
organizations, as the Participant from time to time may designate by a written
designation filed with the Company during the Participant's life. Any amounts
payable hereunder to a Participant's Beneficiary shall be paid in such
proportions and subject to such trusts, powers, and conditions as the
Participant may provide in such designation. Each such designation, unless
otherwise expressly provided therein, may be revoked by the Participant by a
written revocation filed with the Company during the Participant's life. If
more than one such designation shall be filed by a Participant with the
Company, the last designation so filed shall control over any revocable
designation filed prior to such filing. To the extent that any amounts payable
under this Plan to a Participant's Beneficiary are not effectively disposed of
pursuant to the above provisions of this section 3(b), either because no
designation was in effect at the Participant's death or because a designation
in effect at the Participant's death failed to dispose of such amounts in their
entirety, then for purposes of this Plan, the Participant's "Beneficiary" as to
such undisposed of amounts shall be the Participant's estate.
(c) "COMPENSATION COMMITTEE" means the Compensation Committee of the
Board of Directors of the Company.
(d) "EXECUTIVE OFFICER" means the President, any Vice President, the
Secretary, and the Treasurer of the Company, but shall not include any officer
of any Subsidiary or of any division, group, or other operational unit of the
Company.
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(e) "FISCAL YEAR" means the fiscal year of the Company as from time to
time in effect.
(f) "INCENTIVE COMPENSATION" means all compensation payable in cash
pursuant to the terms of an incentive or bonus compensation plan to an
Executive Officer for services rendered as an Executive Officer.
(g) "INITIAL PAYMENT DATE" means the date determined by section 6 as
the date on which distribution of a Participant's Account is to commence.
(h) "PRIME RATE" means an annual rate of interest equal to the prime
rate published in The Wall Street Journal on the first day of each calendar
quarter. In the event the prime rate is no longer published in The Wall Street
Journal (or in any substitute source as provided for herein), the Compensation
Committee shall select another published standard by which to determine the
prime rate then quoted by the principal banks in the United States and the
Committee's determination in good faith of such rate shall be conclusive and
binding on the Company and all Participants.
(i) "PARTICIPANT" means a Executive Officer who has an undistributed
balance in his Account.
(j) "SALARY" means the base salary of an Executive Officer as from time
to time in effect during a Fiscal Year.
(k) "SUBSIDIARY" means each subsidiary of the Company in which the
Company owns not less than a 50% equity interest.
(l) "TERMINATION OF EMPLOYMENT" means the termination of a
Participant's employment by the Company and each of its Subsidiaries.
4. DEFERRAL OF SALARY AND INCENTIVE COMPENSATION.
(a) Annual Election. Each Executive Officer may elect (i) before May
17, 2003, with respect to the Fiscal Year ending December 31, 2003, and (ii)
before January 1 of any subsequent Fiscal Year, to defer the payment of (x) not
more than 50% of the Executive Officer's Salary for such Fiscal Year, and (y)
all or any portion of the Incentive Compensation attributable to such Fiscal
Year, whether or not payment of such Incentive Compensation would otherwise be
made on or before the last day of such Fiscal Year. An election by an
Executive Officer pursuant to this section 4(a) shall be effective with respect
to
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the Executive Officer's Salary and Incentive Compensation which is
attributable to the performance of future services or which is first
determinable after the date such election is made and shall remain in effect
until revoked or amended, provided, however, that any such revocation or
amendment shall only be effective with respect to Fiscal Years beginning after
the date written notice of such revocation or amendment is first received by
the Company.
(b) New Executive Officer. Notwithstanding any other provision of
section 4(a), if a person first becomes an Executive Officer during a Fiscal
Year, such Executive Officer may, within 30 days of his election or
appointment, elect to become a Participant with respect to 50% of the Executive
Officer's Salary and all or any portion of the Incentive Compensation
attributable to such Fiscal Year, whether or not payment of such Incentive
Compensation would otherwise be made on or before the last day of such Fiscal
Year. An election by an Executive Officer pursuant to this section 4(b) shall
be effective with respect to the Executive Officer's Salary and Incentive
Compensation which is attributable to the performance of future services or
which is first determinable after the date such election is made and shall
remain in effect until revoked or amended, provided, however, that any such
revocation or amendment shall only be effective with respect to Fiscal Years
beginning after the date written notice of such revocation or amendment is
first received by the Company. Any election other than the initial election of
an Executive Officer under this section 4(b) shall be governed by the
provisions of section 4(a).
(c) Payment of Deferred Amounts. Salary or Incentive Compensation
deferred pursuant to this section 4 shall be distributable in accordance with
section 6 only after such Participant's Termination of Employment. Any portion
of an Executive Officer's Salary or Incentive Compensation not subject to an
election made in accordance with this section 4 shall be paid to the Executive
Officer in cash in accordance with the Company's usual and customary pay
practices for such type of compensation.
5. ACCOUNTING AND ELECTIONS.
(a) Accounts. The Company shall establish an Account in the name of
each Executive Officer who has elected to defer the payment of Salary or
Incentive Compensation, or both, pursuant to section 4.
(b) Crediting of Deferred Amounts. As of each date on which the
Company would otherwise make a payment of a Participant's Salary or Incentive
Compensation, as the case may be, that portion of the Participant's Salary or
Incentive Compensation which is subject to a valid deferral election pursuant
to section 4 shall be credited by the Company to the Participant's Account.
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(c) Crediting Interest. On the last day of each calendar month, up to
and including a Participant's Initial Payment Date, interest at the Prime Rate
shall be credited to the Participant's Account based on the average daily
balance in the Account during the month and the number of days in the month.
(d) Discretionary Company Contributions. The Compensation Committee
may, in its sole discretion, authorize the Company to make contributions to the
Account of one or more Participants in such amounts, at such time or times, and
on such additional terms and conditions as the Committee deems appropriate to
further the purposes of the Plan and the Company's compensation policies for
Executive Officers. Any such contributions shall be credited to the
Participant's Account as of the date specified for such contribution.
(e) Annual Report. Within 60 days of the end of each Fiscal Year in
which this Plan is in effect, the Company shall furnish each Participant a
statement of the year-end balance in such Participant's Account.
6. DISTRIBUTION OF DEFERRED AMOUNTS.
(a) Initial Payment Date. The Initial Payment Date of a Participant
shall be the later of (i) the last day of the calendar month in which occurs
the Participant's Termination of Employment (the "Basic Initial Payment Date")
and (ii) the last day of any month specified by the Participant as the
Participant's Initial Payment Date in a written election filed with the Company
not less than one year prior to his Termination of Employment, but in no event
shall the Initial Payment Date specified pursuant to this clause (ii) be a date
later than the last day of the month in which the Participant's 65th birthday
occurs.
(b) Ending Balance. The "Ending Balance" of a Participant's Account
means the balance of the Account determined as of the Initial Payment Date.
(c) Distribution. Subject to the provisions of section 8 concerning a
change of control, on a Participant's Initial Payment Date, distribution of the
Ending Balance shall be made in cash in accordance with the following:
(i) Automatic Form of Payment. In 120 monthly installments
(beginning on the Initial Payment Date) in an amount which is determined
in accordance with the following:
(A) the monthly payment for the first twelve months shall
be equal to the amount necessary to amortize in 120 equal monthly
payments a loan in
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an amount equal to the Ending Balance bearing interest at the Prime
Rate which is or would then be used to credit interest pursuant to
section 4(c); and
(B) on each anniversary of the Initial Payment Date, the
amount of each of the next twelve monthly payments shall be
recalculated and shall, for the twelve-month period beginning on
each such anniversary, be equal to the amount necessary to amortize
a loan in an amount equal to the then unpaid Ending Balance at the
Prime Rate which is or would then be used to credit interest
pursuant to section 4(c) in monthly payments over the Remaining
Payment Period. As of any such anniversary, the "Remaining Payment
Period" shall be equal to the remainder of (1) 120, minus (2) the
number of payments which have then been made.
(ii) Elective Forms of Distribution. A Participant may elect that
payment of the Participant's Ending Balance shall be made in one of the
following forms, provided, however, that such election shall be effective
only on the first anniversary of the date on which it has been filed by
the Participant with the Secretary of the Company, and only then if the
Participant's Termination of Employment has not yet occurred.
(A) Even Installment Payments. In a specified number of
monthly installments, each of which shall be a multiple of 12 and
the total of which shall not exceed 108 (the "Number of
Installments"), beginning on the Participant's Initial Payment Date
and in monthly amounts determined in accordance with the following:
(1) The monthly payment for the first twelve months
shall be equal to the amount necessary to amortize in the
Number of Installments a loan in an amount equal to the
Ending Balance at the Prime Rate which is or would then be
used to credit interest pursuant to section 4(c); and
(2) on each anniversary of the Initial Payment Date,
the amount of each of the next twelve monthly payments shall
be recalculated and shall, for the twelve-month period
beginning on each such anniversary, be equal to the amount
necessary to amortize a loan in an amount equal to the then
unpaid Ending Balance at the Prime Rate which is or would
then be used to credit interest pursuant to section 4(c) in
monthly payments over the Remaining Payment Period. As of
any
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anniversary, the "Remaining Payment Period" shall be
equal to the remainder of (1) the Number of Installments,
minus (2) the number of payments which have then been made.
(B) Uneven Installment Payments. In monthly installments,
not in excess of 120, equal to the sum of:
(1) the Participant's Ending Balance divided by the total
number of installments; plus
(2) Interest at the Prime Rate computed on the average
balance in the Account from and including the day next
succeeding (a) the Initial Payment Date (with respect to the
second installment), and (b) the next preceding payment date,
in the case of the third and any subsequent installment, to
and including such payment date.
(C) Lump Sum. In a lump sum, payable on the date specified
by the Participant, but in no event later than the last day of the
month in which the Participant's 65th birthday occurs.
Any election made pursuant to this section 6(c)(ii) shall remain in
effect until a subsequent election becomes effective.
(iii) Death Benefit. In the event that a Participant dies before
receiving payment of the entire amount to which he is entitled under this
Agreement, the unpaid balance shall be paid as specified in the
Participant's most recent election, if any, otherwise pursuant to section
6(c)(i), to the Beneficiary of such Participant. If a Beneficiary dies
after the Participant's death, but before receiving the entire payment of
the Beneficiary's portion of the amount to which the Participant was
entitled under this Agreement, the portion of the unpaid balance which
such Beneficiary would have received if he had not died shall be paid in
a lump sum to such Beneficiary's estate unless the Participant designated
otherwise.
(d) Modification of Payments. After a Participant's Termination of
Employment occurs, neither such Participant or his Beneficiary shall have any
right to modify in any way the schedule for the distribution of amounts
credited to such Participant's Account under this Plan as specified in the last
effective election filed by the Participant. However, upon a written request
submitted to the Secretary of the Company by the person then entitled to
receive payments under this Plan (who may be the Participant or a Beneficiary),
the
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Compensation Committee may in its sole discretion, accelerate the time for
payment of any one or more installments or amounts remaining unpaid.
7. FORM FOR ELECTIONS. The Secretary of the Company shall provide
election forms for use by Executive Officers in making an initial election to
become a Participant and for making all other elections or designations
permitted or required by the Plan.
8. CHANGE OF CONTROL.
(a) Form of Distribution. In the event a Participant incurs a
Termination of Employment within the one-year period subsequent to, a Change of
Control, payment of the Ending Balance shall be made in a lump sum on the last
day of the month in which such Termination of Employment occurs.
(b) A "Change of Control" means the happening of any of the following
events:
(i) The acquisition by any individual, entity, or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (A) the then
outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally
in the election of directors (the "Outstanding Company Voting
Securities"); excluding, however, the following: (1) any acquisition
directly from the Company other than an acquisition by virtue of the
exercise of a conversion privilege unless the security being so converted
was itself acquired directly from the Company, (2) any acquisition by the
Company, (3) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any entity controlled by
the Company, (4) any acquisition pursuant to a transaction which complies
with clauses (A), (B), and (C) of section (iii) of this section 8(b),
(5) except as provided in sections (iv) and (v), any acquisition by any
of the Woodson Entities or any of the Smith Entities, or (6) any increase
in the proportionate number of shares of Outstanding Company Common Stock
or Outstanding Company Voting Securities beneficially owned by a Person
to 20% or more of the shares of either of such classes of stock if such
increase was solely the result of the acquisition of Outstanding Company
Common Stock or Outstanding Company Voting Securities by the Company;
provided, however, that this clause (6) shall not apply to any
acquisition of Outstanding Company Common Stock or Outstanding Company
Voting Securities not described in clauses (1), (2), (3), (4), or (5) of
this section 8(b)(i) by the Person acquiring such
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shares which occurs after such Person had become the beneficial owner of
20% or more of either the Outstanding Company Common Stock or Outstanding
Company Voting Securities by reason of share purchases by the Company; or
(ii) A change in the composition of the Board of Directors of the
Company (the "Board") such that the individuals who, as of the Effective
Date, constitute the Board (such Board shall be hereinafter referred to
as the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, for purposes of the Plan, that
any individual who becomes a member of the Board subsequent to the
Effective Date whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of
those individuals who are members of the Board and who were also members
of the Incumbent Board (or deemed to be such pursuant to this proviso)
shall be deemed to be and shall be considered as though such individual
were a member of the Incumbent Board, but provided, further, that any
such individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board shall not be so deemed or
considered as a member of the Incumbent Board; or
(iii) Consummation of a reorganization, merger or consolidation, or
sale or other disposition of all or substantially all of the assets of
the Company or the acquisition of the assets or securities of any other
entity (a "Corporate Transaction"); excluding, however, such a Corporate
Transaction pursuant to which (A) all or substantially all of the
individuals and entities who are the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of, respectively,
the outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from such Corporate Transaction (including, without limitation, a
corporation which as a result of such transaction owns the Company or all
or substantially all of the Company's assets either directly or through
one or more subsidiaries) (the "Resulting Corporation") in substantially
the same proportions as their ownership, immediately prior to such
Corporate Transaction, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (B) no Person
(other than the Company, any employee benefit plan (or related trust) of
the Company, any Woodson Entity, any Smith Entity, or such Resulting
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Corporation) will beneficially own, directly or indirectly, 20% or more
of, respectively, the outstanding shares of common stock of the Resulting
Corporation or the combined voting power of the then outstanding voting
securities of such Resulting Corporation entitled to vote generally in
the election of directors except to the extent that such ownership
existed with respect to the Company prior to the Corporate Transaction,
and (C) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of directors
of the Resulting Corporation; or
(iv) The Woodson Entities acquire beneficial ownership of more
than 35% of the Outstanding Company Common Stock or Outstanding Company
Voting Securities or of the outstanding shares of common stock or the
combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may be, of
the Resulting Corporation; or
(v) The Smith Entities acquire beneficial ownership of more than
35% of the Outstanding Company Common Stock or Outstanding Company Voting
Securities or of the outstanding shares of common stock or the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the
Resulting Corporation; or
(vi) The approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
(c) For purposes of section 8(b), the term "Woodson Entities" shall
mean Aytchmonde P. Woodson, Leigh Yawkey Woodson, and Alice Richardson Yawkey,
members of their respective families and their respective descendants (the
"Woodson Family"), heirs or legatees of any of the Woodson Family members,
transferees by will, laws of descent or distribution, or by operation of law of
any of the foregoing (including any such transferees) (including any executor
or administrator of any estate of any of the foregoing), any trust established
by any of Aytchmonde P. Woodson, Leigh Yawkey Woodson, or Alice Richardson
Yawkey, whether pursuant to last will or otherwise, any partnership, trust, or
other entity established primarily for the benefit of, or any other Person the
beneficial owners of which consist primarily of, any of the foregoing or any
Affiliates or Associates of any of the foregoing or any charitable trust or
foundation to which any of the foregoing transfers or may transfer securities
of the Company (including any beneficiary or trustee, partner, manager, or
director of any of the foregoing, or any other Person serving any such entity
in a similar capacity).
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(d) For purposes of section 8(b), the term "Smith Entities" shall mean
David B. Smith and Katherine S. Smith, members of their respective families and
their respective descendants (the "Smith Family"), heirs or legatees of any of
the Smith Family members, transferees by will, laws of descent or distribution,
or by operation of law of any of the foregoing (including of any such
transferees) (including any executor or administrator of any estate of any of
the foregoing), any trust established by either of David B. Smith or Katherine
S. Smith, whether pursuant to last will or otherwise, any partnership, trust,
or other entity established primarily for the benefit of, or any other Person
the beneficial owners of which consist primarily of, any of the foregoing or
any Affiliates or Associates of any of the foregoing or any charitable trust or
foundation to which any of the foregoing transfers or may transfer securities
of the Company (including any beneficiary or trustee, partner, manager, or
director of any of the foregoing, or any other Person serving any such entity
in a similar capacity).
(e) For purposes of section 8(b), the terms "Affiliate" and "Associate"
shall have the meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act as in effect on the date of this
Plan.
9. MISCELLANEOUS.
(a) No Assignment. No Participant's rights nor any amounts payable
hereunder may be voluntarily or involuntarily sold or assigned, and shall not
be subject to any attachment, levy or garnishment.
(b) No Right of Employment. This Plan is not a contract of employment
and does not limit in any way the right of the Company or any Subsidiary to
terminate the employment of any Executive Officer or Participant, with or
without cause, subject, however to the terms of any employment agreement then
in effect.
(c) Unsecured Claims. The Company shall not be obligated to reserve or
otherwise set aside funds for the payment of its obligations hereunder, and the
rights of any Participant under the Plan shall be an unsecured claim against
the general assets of the Company. All amounts due Participants or
Beneficiaries under this Plan shall be paid out of the general assets of the
Company.
(d) Plan Administration. The Company shall have all powers necessary
to administer this Plan, including all powers of Plan interpretation, of
determining eligibility, and the effectiveness of elections, and of deciding
all other matters relating to the Plan; provided, however, that no Participant
shall take part in any discussion of, or vote with respect to, a
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matter of Plan administration which is personal to him, and not of general
applicability to all Participants. All decisions of the Company shall be final
as to any Participant under this Plan.
(e) Claims Procedure. The claims procedure set forth in the Company's
principal defined contribution plan qualified under Section 401(a) of the Code,
or any successor to such plan, is incorporated herein by this reference as the
claims procedure for this Plan; provided, however, that the Company shall be
substituted as the plan administrator under such procedure and the Compensation
Committee shall be substituted for any person with the authority to review the
decisions of the plan administrator under such procedure.
(f) Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the amounts to be paid under this Plan.
(g) Amendment and Termination. The Compensation Committee may amend
this Plan in any and all respects at any time, or from time to time, or may
terminate this Plan at any time, but any such amendment or termination shall
not, without the consent of the Participant, reduce the interest rate to be
credited on the unpaid balance of the Participant's Account, accelerate the
payment of the Participant's Account, or prejudice or reduce the Participant's
right to receive amounts previously credited to such Participant's Account.
(h) Applicable Law. The Plan and all rights hereunder, to the extent
not preempted by the Employee Retirement Income Security Act of 1974, as
amended, shall be governed by the internal laws of the state of Wisconsin
without application of the principles of conflicts of law.
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