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Exhibit 10.27
DIRECTORS' DEFERRED COMPENSATION PLAN
DAIRY MART CONVENIENCE STORES, INC. (the "Company") desires to
establish a Directors' Deferred Compensation Plan (the "Plan") to assist it in
attracting and retaining persons of competence and stature to serve as outside
directors by enabling them to defer receipt of the fees payable to them by the
Company for their services as directors.
Therefore, the Company hereby adopts the Plan as hereinafter set forth:
1. EFFECTIVE DATE. The Plan shall apply to all elections to defer made
after its adoption and shall apply to all directors' fees payable with respect
to periods commencing with the Company's fiscal quarter which begins November 1,
1998.
2. PARTICIPATION. Each director of the Company (a) who is duly elected
or appointed to the Company's Board of Directors and (b) who receives fees for
services as a director, may elect to defer receipt of fees otherwise payable to
him, as provided for in the Plan. Each such director who elects to defer fees
shall be a Participant in the Plan.
3. ADMINISTRATION. The Company's Board of Directors appoints Robert B.
Stein, Jr. and Gregory G. Landry, each of whom is a director or officer of the
Company who is not eligible to become a Participant, to act as the Administrator
of the Plan ("Administrators"). The Administrators shall serve at the pleasure
of the Board of Directors and shall administer, construe and interpret the Plan.
The Administrators shall not be liable for any act done or determination made in
good faith. The Board of Directors shall have the power to designate additional
or replacement Administrators at its discretion.
4. DEFERRALS.
(a) DEFERRAL ELECTION. Any eligible director may file with the
Administrators of the Plan, prior to January 1 of each year an election in
writing to participate in the Plan for
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that year or for that year and succeeding years. Each director who first becomes
eligible to participate after the date of the adoption of this Plan may make an
election for the portion of the year in which he first become eligible with
respect to fees for services to be rendered after the date of such election.
When a deferral election is filed, no fees will be paid for services so
designated for that year (or portion thereof) or, if the election so provides,
for that year and for succeeding years. If an election has been filed to
participate in the Plan for succeeding years and a Participant wishes to
discontinue deferral, an election to terminate participation in the Plan for any
year must be filed prior to January 1 of that year.
(b) ACCOUNTING. The Company shall maintain appropriate records which
shall list and reflect each Participant's credits and valuations ("Deferral
Accounts"). The Company shall credit to each Participant's Deferral Account an
amount equal to the fees that would have been paid to him if he had not elected
to participate in the Plan. The credit shall be made on the date on which the
fee would have been paid absent a deferral election. No funds shall be
segregated into the Deferral Account of Participants; said accounts shall
represent a general unsecured obligation of the Company.
(c) VALUATION. Until the first distribution is made to a Participant,
amounts credited to a Deferral Account of such Participant shall be increased or
decreased as measured by the market value of the Company's Class A Common Stock
(the "Common Stock") plus the value of dividends or other distributions on the
Company's Common Stock. Each amount credited to a Deferral Account shall be
assigned a number of Share Units (including fractions of a Share) determined by
dividing the amount credited to the Deferral Account, whether in lieu of payment
of fees for service as a director or as a dividend or other distribution
attributable to such Share Units, by the fair market value of a share of the
Company's Common Stock on the date of
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credit. Fair market value shall be the mean between the high and low selling
price of a share of the Company's Common Stock on the American Stock Exchange on
the applicable date or, if no sales occurred on such date, on the most recent
earlier date on which sales occurred. Each Share Unit shall have the value of a
Common Stock of the Company. The number of Share Units shall be adjusted to
reflect stock splits, stock dividends or other capital adjustments effected
without receipt of consideration by the Company.
5. DISTRIBUTION. A Participant shall elect in writing, at the time he
makes each deferral election under subparagraph 4(a), the year in which
distribution of the credits to his Deferral Account to which the deferral
election relates shall commence, and whether distribution will be made in a lump
sum or in installments, as permitted in the second succeeding sentence of this
Section 5. Payment shall commence not earlier than the January 1 following the
year in which the Participant attains age 55 and not later than the January 1
following the year in which the Participant attains age 72. Commencing
immediately prior to the first distribution to a Participant and continuing
thereafter, amounts credited to the Deferral Account of such Participant shall
be credited with interest, compounded quarterly, calculated at a rate per annum
for each fiscal quarter of the Company equal to the prime rate of interest
published in THE WALL STREET JOURNAL on the first business day of that quarter.
Payment may be made in one lump sum, or in five or ten equal annual installments
of the Deferral Account balance allocated to such installment payments
determined as of the December 31 immediately preceding commencement of
distribution, with each payment accompanied by any interest credited during the
period preceding payment of the installment. The time and method of distribution
of benefits may vary with each separate election, but each election shall be
irrevocable. The Deferral Accounts do not represent rights to acquire the
Company's Common Stock; payment shall only be made in cash.
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6. DEATH OR DISABILITY.
(a) If a Participant's service is terminated by reason of death or
disability prior to the distribution of any portion of his benefits, the Company
shall, within ninety (90) days of the date of service termination, commence
distribution of benefits to the Participant (or to the beneficiary or the
beneficiaries in the event of death). Distribution shall be made in accordance
with the method of distribution elected by the Participant pursuant to paragraph
5 hereof. If a Participant's death or disability occurs after distribution of
benefits hereunder has begun, the Company shall continue to make distributions
to the Participant (or to the beneficiary or beneficiaries in the event of
death) in accordance with the methods of distribution elected by the Participant
pursuant to paragraph 5 hereof.
(b) Each Participant may designate one or more beneficiaries to receive
distributions in the event of Participant's death by filing with the Company a
beneficiary designation on a form provided. The designated beneficiary or
beneficiaries may be changed by a Participant at any time prior to his death by
the delivery to the Company of a new beneficiary designation form. If no
beneficiary shall have been designated, or if no designated beneficiary shall
survive the Participant, distributions pursuant to this provision shall be made
to the Participant's estate.
7. ASSIGNMENT AND ALIENATION OF BENEFITS. To the extent permitted by
law, the right of any Participant to any account, benefit or payment hereunder
shall not be subject in any manner to attachment or other legal process for the
debts of such Participant, and no account, benefit or payment shall be subject
to anticipation, alienation, sale, transfer, assignment or encumbrance.
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8. AMENDMENT OR TERMINATION. The Board of Directors of the Company may
terminate this Plan at any time or amend it at any time and from time to time.
No amendment or termination of this Plan shall affect the rights of a
Participant accrued prior thereto.
9. TAXES. The Company shall not be responsible for the tax consequences
under federal, state or local law of any election made by any Participant under
the Plan. All payments under the Plan shall be subject to withholding and
reporting requirements to the extent permitted by applicable law.
10. APPLICABLE LAW. This Plan shall be interpreted under the laws of
the State of Ohio.
IN WITNESS WHEREOF, the Company has caused this Plan to be adopted, and
executed by its President, this 1ST day of July, 1998.
DAIRY MART CONVENIENCE STORES, INC.
/s/ Robert B. Stein, Jr.
By:_______________________________
Robert B. Stein, Jr., President
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