Exhibit 10.5
DEFERRED COMPENSATION
AGREEMENT
THIS AGREEMENT, made the
day of June, 1999, by and between Morris Communications Corporation
(hereinafter the “Company”), and Carl N. Cannon
(hereinafter the (“Employee”).
WHEREAS, the Company desires to
encourage the Employee to serve in an employee capacity until
normal retirement at or after the Employee attains 65 years of age
(hereinafter “retirement”); and
WHEREAS, the Employee intends to
serve the Company until retirement provided the Employer will pay
compensation for his services;
NOW, THEREFORE, in consideration of
the mutual covenants contained herein, it is agreed between the
parties hereto as follows:
ARTICLE I
PURPOSE OF
AGREEMENT
1.1 The Company, by execution of
this Agreement, hereby establishes the Carl N. Cannon Deferred
Compensation Plan (the “Plan”) which shall become
effective as of the date selected by the Company in this Agreement.
The Plan shall be maintained for the exclusive benefit of Carl N.
Cannon.
1.2 The purpose of the Plan is to
enhance the Employee’s retirement security by establishing a
deferred payment account entitling the Employee to earn the right
to receive benefits at retirement, death, or disability.
ARTICLE II
DEFINITIONS
2.1. “Board Committee”
means a committee of the Board of Directors of the Company
designated with responsibility for management of the Plan or, if no
committee is maintained, the entire Board of Directors.
2.2. “Trust” means the
trust created in the Trust Under the Morris Deferred Compensation
Plan, (hereinafter the “Trust Agreement,” attached as
Exhibit A).
2.3. “Trust Account”
means the account established in the Trust reflecting the
Company’s contributions pursuant to the Plan.
2.4. “Designated
Beneficiary” means the person(s) designated by the Employee
who are entitled to receive any funds remaining in the
Employee’s Trust Account after the
Employee’s
death. The Employee may name or change the
Designated Beneficiary by completing and delivering to the Trustee
an election substantially in the form attached as Exhibit
“B”. The Employee may change the Designated Beneficiary
(without the consent of any previously named Designated
Beneficiary) at any time prior to his death. In the absence of a
Designated Beneficiary named by the Employee, the Designated
Beneficiary shall be the Employee’s estate.
2.5. “Disability” is
deemed to occur when the Board Committee shall find on the basis of
medical evidence satisfactory to the Board Committee that the
Employee is totally disabled, mentally or physically, so as to be
prevented from engaging in further employment by the Company and
that such disability will be continuous for a period of at least 6
months.
ARTICLE III
VESTING PERIOD
In accordance with Article IV, the
Company is scheduled to make ten annual contributions to the
Employee’s Trust Account, designated as contributions
numbered 1 through 10. If the Employee terminates employment for
the Company before attaining age 65, for any reason other than
death or Disability, then the Employee shall forfeit and not be
entitled to receive any portion of the Employee’s Trust
Account attributable to the Company’s contributions in
accordance with the following vesting schedule:
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Completed Years of
Service
from Date of
Agreement
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Vested in
Contributions
Numbered:
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Forfeit
Contributions
Numbered:
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Less than 5
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None
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All
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5
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1-2
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3 and higher
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6
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1-3
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4 and higher
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7
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1-4
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5 and higher
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8
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1-5
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6 and higher
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9
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1-6
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7 and higher
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Age 65
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1-10
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None
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2
ARTICLE IV
DEFERRAL OF
COMPENSATION
4.1. The Company shall credit to the
Employee’s Trust Account $200,000 on the date of execution of
this Agreement and on the first day of January in the year 2000 and
each subsequent year during the continuance of the Employee’s
employment for the Company until a total of ten (10) contributions
have been credited to the Employee’s Trust
Account.
4.2 The Company shall also credit to
(or deduct from) the Employee’s Trust Account from time to
time, but at least quarterly, the amount necessary to cause the
Employee’s Trust Account to equal the value that the
Employee’s Trust Account would have attained had it been
invested in one or more of the investment funds listed in Appendix
A of the Plan (the “Valuation Option”). Such Appendix A
may be amended at any time by an action of the Board Committee. If
the Employee does not elect a Valuation Option for his Trust
Account, the Trust Account shall be valued based on the Valuation
Option represented by the performance of Fund A. The Board
Committee shall permit the Employee to change his or her selection
of Valuation Options at such times (but at least quarterly) and to
be effective at such times (but at least quarterly) as the Board
Committee may approve. The Board Committee, in its discretion, may
establish, amend and interpret procedures for changes in Valuation
Options.
4.3. Any such funds so credited to
the Trust shall be held and administered according to the terms of
Trust Agreement.
ARTICLE V
DISTRIBUTION OF
BENEFITS
The Company shall establish and
deliver to the Trustee and the Employee a Payment Schedule that
indicates the amounts payable from the Trust to the Employee (and
his beneficiaries) as deferred compensation. The Payment Schedule
shall be determined as follows:
(1) If the Employee’s
employment is terminated on or after the Employee reaches age 65,
the Trustee shall commence distributions of the Employee’s
Trust Account in “Installment Payments”.
(2) For purposes of this Agreement,
“Installment Payments” shall mean monthly payments in
amounts as determined by the Board Committee, reasonably calculated
to result in approximately equal monthly payments over a period of
10 years, or as modified i
