Exhibit 10.20
WAUSAU-MOSINEE PAPER CORPORATION
2005 EXECUTIVE DEFERRED COMPENSATION PLAN
WAUSAU-MOSINEE PAPER CORPORATION
2005 EXECUTIVE DEFERRED COMPENSATION PLAN
1. ADOPTION OF PLAN. Wausau-Mosinee Paper Corporation ("the Company")
hereby adopts the Wausau-Mosinee Paper Corporation 2005 Executive Deferred
Compensation Plan (the "Plan") effective December 17, 2004.
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 accounts 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) "CODE" means the Internal Revenue Code of 1986, as amended,
and reference to any section of the Code shall be deemed to include any
successor section or sections. Any reference to a section of the Code shall
also be deemed to incorporate any regulation promulgated thereunder.
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(d) "COMMITTEE" means the Compensation Committee of the Board of
Directors of the Company.
(e) "CONTROLLED GROUP" means the Company and each other member of
the controlled group of corporations or other entities under common control to
which the Company belongs for purposes of determining whether a separation from
service has occurred pursuant to Code Section 409A and the regulations
promulgated thereunder.
(f) "DISABILITY" means the inability of a Participant to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months, or the
receipt by the Participant, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected
to last for a continuous period of not less than 12 months, of income
replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Company or any Subsidiary.
(g) "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.
(h) "FISCAL YEAR" means the fiscal year of the Company as from
time to time in effect.
(i) "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.
(j) "INITIAL PAYMENT DATE" means the date determined by section 6
as the date on which distribution of a Participant's Account is to commence.
(k) "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
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.
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(l) "PARTICIPANT" means an Executive Officer who has filed an
election to participate in the Plan or has an undistributed balance in his
Account.
(m) "SALARY" means the base salary of an Executive Officer as
from time to time in effect during a Fiscal Year.
(n) "SUBSIDIARY" means each subsidiary of the Company in which
the Company owns not less than a 50% equity interest.
(o) "TERMINATION OF EMPLOYMENT" means the termination of a
Participant's employment with the Company and each member of the Controlled
Group.
4. DEFERRAL OF SALARY AND INCENTIVE COMPENSATION.
(a) Annual Election. Each Executive Officer may elect before
January 1 of any Fiscal Year, to defer the payment of (i) not more than 50% of
the Executive Officer's Salary for such Fiscal Year, and (ii) 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 only with respect to the
Executive Officer's Salary and Incentive Compensation which is attributable to
the performance of future services 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).
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(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.
(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) 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 ACCOUNTS.
(a) Election of Initial Payment Date. At the same time as the
Participant's initial election to participate is filed pursuant to section 4,
the Participant shall file a written election with the Company to specify the
Initial Payment Date for his Account; provided, however, that (i) if not the
last day of a calendar month, the date so specified shall be adjusted to the
last day of the month in which the specified date occurs (but such adjustment
shall not be deemed to render the Participant's election to be invalid), (ii)
in no event shall the date so specified be a date later than the last day of
the month in which the Participant's 65th birthday occurs if the Participant
incurs a Termination of Employment prior to attaining age 65, and (iii)
notwithstanding the date specified in such election, the Initial Payment Date
of a Participant shall be adjusted by the
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Committee, if necessary, to the later of (A) last day of the first calendar
month in which occurs the first date which is six months subsequent to the
Participant's Termination of Employment, and (B) February 15 of the year
following the year in which the Participant's Termination of Employment occurs
(but such adjustment shall not be deemed to render the Participant's election
to be invalid). In the event that a Participant has not made a valid election
as to his Initial Payment Date or has not incurred a Termination of Employment
prior to the date specified by him as his Initial Payment Date, the Initial
Distribution Date of such Participant shall be the later of (i) the last day
of the calendar month in which the Participant's Termination of Employment
occurs by reason of Disability, (ii) the date which is six months subsequent
to the Participant's Termination of Employment for reasons other than
Disability, and (iii) February 15 of the year following the year in which the
Participant's Termination of Employment occurs. Subsequent to a Participant
having filed his election to participate in the Plan pursuant to section 4, the
Participant may modify his Initial Payment Date (or change a previous election)
only if (i) such election will not be effective until 12 months after the date
on which it is received by the Company, (ii) such election is made not less
than 12 months prior to the Initial Payment Date otherwise then in effect,
and (iii) such election defers the Initial Payment Date to a date which is not
less than five years subsequent to the Initial Payment Date otherwise then in
effect;
(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) Elective Distribution. At the same time as the Participant's
initial election to participate is filed pursuant to section 4, the Participant
shall file a written election with the Company that, subject to the provisions
of section 8 concerning a Change of Control, distribution of the Ending Balance
shall be made in cash in accordance with one of the following alternatives:
(i) 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 120 (the "Number of Installments"), in
amounts determined in accordance with the following:
(A) the monthly payment for the first twelve monthly
installments shall be equal to the amount necessary to amortize in
the Number of Installments a loan in an amount equal to the Ending
Balance with interest at the Prime Rate which is or would then be
used to credit interest pursuant to section 4(c) accruing monthly
on the unpaid Ending Balance; and
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(B) on each anniversary of the Initial Payment Date,
the amount of each of the next twelve monthly installments shall be
recalculated and shall, for the twelve-month period beginning on
each such anniversary, be equal to the amount necessary to
amortize, in monthly installments over the Remaining Payment
Period, a loan in an amount equal to the then unpaid Ending Balance
with interest at the Prime Rate accruing monthly on the unpaid
Ending Balance which is or would then be used to credit interest
pursuant to section 4(c). As of any anniversary, the "Remaining
Payment Period" shall be equal to the remainder of (a) the Number
of Installments, minus (b) the number of installments which have
then been paid.
(ii) Uneven Installment Payments. In a specified number of
monthly installments, not in excess of 120 (the "Number of
Installments"), equal to the sum of:
(A) the Participant's Ending Balance divided by the
total Number of Installments; plus
(B) 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.
(iii) Lump Sum. In a lump sum.
Subsequent to the Participant having filed his election to participate in the
Plan pursuant to section 4, but prior to Participant's Termination of
Employment, an election by a Participant to modify his election pursuant to
this section 6(c) shall be effective only if (i) such election, by its terms,
will be effective not less than 12 months after the date on which it is
received by the Company, (ii) such election is made not less than 12 months
prior to the Initial Payment Date otherwise then in effect, (iii) such election
defers the Initial Payment Date to a date which is not less than five years
subsequent to the Initial Payment Date otherwise then in effect, and (iv) such
election does not result in an acceleration of the distribution of the
Participant's Ending Balance.
(d) Automatic Form of Payment. In the event that a Participant
has not made a valid election as to the form of distribution of the
Participant's Ending Balance, it shall be payable in a lump sum on the
Participant's Initial Distribution Date.
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(e) Death Benefit. In the event that a Participant dies before
receiving payment of the entire Account, the unpaid balance shall be paid to
his Beneficiary as specified in the Participant's most recent effective
election, if any, otherwise pursuant to section 6(d); provided, however, that
for purposes of this section 6(e), the date specified in clause (ii) of the
second sentence of section 6(a) shall be the Participant's Termination of
Employment. If a Beneficiary dies after the Participant's death, but before
receiving the entire payment of the Beneficiary's portion of the Account, 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.
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 first
day which is both (i) the last day of a month, and (ii) if the Participant was
then a "key employee" within the meaning of Code Section 416(i), not less than
six months subsequent to the date on which the Participant's 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
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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 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
was 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
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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 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)
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(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).
(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. SECTION 409A COMPLIANCE. Notwithstanding any other provision of
the Plan or any election made or permitted to be made hereunder, no election as
to the timing or form, or both, of the distribution of a Participant's Account,
and no other distribution otherwise provided for by this Plan, shall be
effective or made, as the case may be, if such timing or form of distribution
would cause the Plan to fail to meet the requirements of Code Section 409A or
cause the Participant to be subject to the interest and additional tax imposed
pursuant to Code Section 409A(a)(1)(B), and any such election or such other
provision shall be modified in the operation of the Plan so that the timing or
form of distribution, or both, as the case may be, corresponds as closely as
possible to such election or other provision, but will then comply with the
requirements of Code Section 409A so as to preclude the application of Code
Section 409A(a)(1)(B).
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10. 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 Committee 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 matter of Plan
administration which is personal to him, and not of general applicability to
all Participants. All decisions of the Committee 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 Code Section
401(a), or any successor to such plan, is incorporated herein by this reference
as the claims procedure for this Plan; provided, however, that the Committee
shall be substituted as the plan administrator under such procedure and the
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 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
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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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