Exhibit 10.10
-------------
FORM OF
DEFERRED PAYMENT AGREEMENT FOR DIRECTOR
---------------------------------------
THIS AGREEMENT is hereby made this _____ day of _________________________, by
SPECIALTY PRODUCTS & INSULATION CO. (the "Employer") and ___________________
(the "Director").
W I T N E S E T H:
WHEREAS, the Employer believes that a greater interest in and loyalty to it
would result from providing to the Director an opportunity to defer director
fees in the manner set forth below; and
WHEREAS, the Board of Directors of the Employer has adopted resolutions
approving this Agreement and authorizing the officers of the Employer to execute
this Agreement.
NOW, THEREFORE, intending to be legally bound, the parties each agree as
follows:
Section 1. Deferrals.
--------- ---------
(a) In accordance with rules established by the Employer, the Director may
elect to defer all or a portion of the fees (whether in the form of cash or
Employer stock) which are due to be earned and which would otherwise be paid to
the Director for service as a Director. Cash fees so deferred will be considered
a Director's "Fee Deferrals" and fees in the form of Employer stock so deferred
will be considered a Director's "Stock Deferrals."
(b) A deferral election is made by executing and delivering to the Employer
an election form in the form acceptable to the Employer. Once made, the election
shall continue in force indefinitely, until changed by the Director on a
subsequent election form. A change to a deferral election shall be made on a
prospective basis only, and shall not be applied retroactively under any
circumstances.
Section 2. Deferral Accounts. There shall be established and maintained for
--------- -----------------
each Director a Fee Deferral Account to which shall be credited amounts equal to
the Director's Fee Deferrals, together with the deemed earnings described in
Section 3. There shall also be established and maintained for each Director a
Stock Deferral Account to which shall be credited the number of shares of
Employer stock equal to the Director's Stock Deferrals, as adjusted pursuant to
section 3(b). A Director shall always be one hundred percent (100%) vested in
his Fee Deferral Account (and the interest deemed credited thereto) and his
Stock Deferral Account.
1
Section 3. Deemed Earnings/Stock Adjustments.
--------- ---------------------------------
(a) Each amount credited to a Director's Fee Deferral Account shall be deemed
to bear interest from the date it is credited to the Director's Fee Deferral
Account until the date it is distributed to the Director. The rate of interest
shall be equal to such money market (or comparable) rate as the Employer may
from time to time determine. Such interest shall be credited to the Directors'
Fee Deferral Account as of the end of each calendar year; provided, however,
that in the year in which the Director's benefit hereunder becomes payable,
interest shall be credited for that portion of the year ending on the last day
of the calendar quarter immediately preceding payment of such benefit.
(b) Amounts credited to the Director's Stock Deferral Account shall not be
credited with interest, dividends, or other earnings. Notwithstanding the
foregoing, in the event of a change in the number of issued and outstanding
shares of Employer stock resulting from a stock split, reverse stock split,
stock dividend or other change in the capital structure of the Employer, the
number of shares of Employer stock then credited to the Director's Stock
Deferral Account shall be proportionately adjusted in such manner as the
Employer, in its discretion, deems appropriate.
Section 4. Accounts. The Accounts maintained hereunder for the Director
--------- --------
shall be maintained for recordkeeping purposes only. The existence of these
Accounts shall not require any segregation of funds or issuance of shares of
Employer stock. All amounts credited to the Accounts shall constitute general
assets of the Employer and may be disposed of by the Employer at such time(s)
and for such purpose(s) as it may deem appropriate.
Section 5. Payment of Benefits. A Director's benefit shall become payable
--------- -------------------
when the Director attains age ___ or, if later, upon the termination of the
Director's service as a member of the Employer's Board of Directors for any
reason (whether by reason of death, disability, resignation, expiration of term,
or removal). The Director (or his Beneficiary) shall then be entitled to a
benefit as follows:
(a) a cash benefit equal to the amount (if any) then credited to the
Director's Fee Deferral Account; and
(b) a benefit in the form of shares of Employer stock, equal to the number of
shares of Employer stock (if any) then credited to the Director's Stock Deferral
Account.
Said benefit (less any amounts required to be withheld for tax purposes) shall
be distributed in accordance with Section 6.
2
Section 6. Method of Payment.
--------- -----------------
(a) Distribution of a Director's benefit shall be made in a single, lump sum
payment on the first day of the second month following the date the benefit
becomes payable pursuant to section 5.
(b) In the event the Director dies before the payment of his benefit
commences, the Director's benefit shall be paid to his Beneficiary. For this
purpose, the term "Beneficiary" shall mean the person or persons designated by
the Director on a beneficiary designation form acceptable to the Employer or, if
there should be no designation or if the designated person(s) should predecease
the Director, the spouse, children, parents, brothers and sisters, and estate of
the Director, in the order listed.
Section 7. Rights as a Shareholder. The Director shall not have any rights
--------- -----------------------
as a shareholder with respect to any shares of Employer stock credited to the
Director's Stock Deferral Account unless and until certificates for such shares
are issued to him.
Section 8. Amendment. The Employer shall have the right to amend this
--------- ---------
Agreement at such time or times and in such manner as it deems advisable.
Notwithstanding the foregoing, no amendment shall affect the amount of the
Director's accrued but unpaid benefit (including the amount of the deemed
earnings that have accrued thereon), or the right of the Director to receive his
accrued but unpaid benefit, at the time the amendment becomes effective.
Section 9. Termination. The Employer shall have the right to terminate
--------- -----------
this Agreement at any time. No termination, however, shall affect the amount of
the Director's accrued but unpaid benefit, or the right of the Director to
receive his accrued, but unpaid benefit, prior to the termination of this
Agreement.
Section 10. No Assignment. No Director (or Beneficiary thereof) shall have
---------- -------------
the power to pledge, transfer, assign, anticipate, mortgage or otherwise
encumber or dispose of in advance any interest in amounts payable hereunder or
any of the payments provided for herein, nor shall any interest in amounts
payable hereunder or in any payments be subject to seizure for payments of any
debts, judgments, alimony or separate maintenance, or be reached or transferred
by operation of law in the event of bankruptcy, insolvency or otherwise.
Section 11. No Guarantee of Service/Director's Rights Unsecured. Nothing
---------- ---------------------------------------------------
contained in this Agreement shall be construed as a contract of service on the
Employer's Board of Directors or deemed to give any Director the right to be
retained in the service of the Employer or any equity or other interest in the
assets, business or affairs of the Employer. No Director (or his Beneficiary)
shall have a security interest in assets of the Employer used (or to be used) to
pay benefits. The right of the Director (or his Beneficiary) to receive
benefits hereunder shall be an unsecured claim against the general assets of the
Employer.
3
IN WITNESS WHEREOF, the Employer and the Director have executed this Agreement
as of the day, month and year first above written.
ATTEST: SPECIALTY PRODUCTS & INSULATION CO.
By:
- --------------------- --------------------------------
WITNESS:
By:
- --------------------- --------------------------------
Director
4