Exhibit 10.6

 

HORMEL FOODS CORPORATION
NONEMPLOYEE DIRECTOR DEFERRED STOCK PLAN
(Plan Adopted October 4, 1999; Amended and Restated Effective January 1, 2008)

 

1.                                       INTRODUCTION.

 

1.1.          PLAN HISTORY.  THE HORMEL FOODS CORPORATION NONEMPLOYEE DIRECTOR
DEFERRED STOCK PLAN (THE “PLAN”) WAS FIRST ADOPTED OCTOBER 4, 1999 AND FIRST
RESTATED NOVEMBER 24, 2003 (COLLECTIVELY, THE “PRIOR PLAN DOCUMENTS”).  THE PLAN
WAS AGAIN AMENDED AND RESTATED SEPTEMBER 18, 2006 TO COMPLY WITH SECTION 409A OF
THE INTERNAL REVENUE CODE, BUT ONLY WITH RESPECT TO DEFERRED COMPENSATION
CREDITED UNDER THE PLAN WHICH RELATES ALL OR IN PART TO SERVICES PERFORMED ON OR
AFTER JANUARY 1, 2005 (“NON-GRANDFATHERED DEFERRALS”).  DEFERRED COMPENSATION
CREDITED UNDER THE PLAN WHICH RELATES ENTIRELY TO SERVICES PERFORMED ON OR
BEFORE DECEMBER 31, 2004 CONTINUES TO BE GOVERNED BY THE TERMS OF THE PRIOR PLAN
DOCUMENTS (“GRANDFATHERED DEFERRALS”).  WITH RESPECT TO NON-GRANDFATHERED
DEFERRALS, THE PLAN IS HEREBY AMENDED AND RESTATED, EFFECTIVE JANUARY 1, 2008,
TO BRING THE PLAN INTO COMPLIANCE WITH FINAL TREASURY REGULATIONS ISSUED UNDER
SECTION 409A OF THE INTERNAL REVENUE CODE, AND TO ALLOW PARTICIPANTS, DURING A
LIMITED PERIOD ENDING DECEMBER 31, 2008, AN OPPORTUNITY TO CHANGE THE FORM OF
PAYMENT FOR DISTRIBUTION ELECTIONS FROM ONE FORM OF PAYMENT PERMITTED UNDER THE
PLAN TO A DIFFERENT FORM OF PAYMENT PERMITTED UNDER THE PLAN FOR ALL AMOUNTS
CREDITED TO THE PLAN THAT ARE SUBJECT TO SECTION 409A OF THE CODE (WITH SPECIAL
TRANSITION RULES ISSUED BY THE IRS AND THE U.S. DEPARTMENT OF TREASURY IN
CONNECTION WITH THE IMPLEMENTATION OF SECTION 409A OF THE CODE).

 

1.2.          PURPOSE.  THE PURPOSE OF THE PLAN IS TO PROVIDE AN OPPORTUNITY FOR
NONEMPLOYEE MEMBERS OF THE BOARD OF DIRECTORS (THE “BOARD”) OF HORMEL FOODS
CORPORATION (THE “COMPANY”) TO INCREASE THEIR OWNERSHIP OF THE COMMON STOCK, PAR
VALUE $.0586 PER SHARE, OF THE COMPANY (“COMMON STOCK”), AND THEREBY ALIGN THEIR
INTEREST IN THE LONG-TERM SUCCESS OF THE COMPANY WITH THAT OF THE OTHER
STOCKHOLDERS OF THE COMPANY.  THIS WILL BE ACCOMPLISHED BY ALLOWING EACH
PARTICIPATING DIRECTOR TO ELECT VOLUNTARILY TO DEFER ALL OR A PORTION OF HIS OR
HER RETAINER AND MEETING FEES INTO THE RIGHT TO RECEIVE SHARES OF COMMON STOCK
AT A LATER DATE PURSUANT TO ELECTIONS MADE BY SUCH DIRECTOR UNDER THIS PLAN.

 

2.                                       ELIGIBILITY.  INDIVIDUALS WHO ARE
MEMBERS OF THE BOARD OF THE COMPANY (“DIRECTORS”) AND WHO ARE NOT ALSO OFFICERS
OR OTHER EMPLOYEES OF THE COMPANY OR ITS SUBSIDIARIES ARE ELIGIBLE TO
PARTICIPATE IN THIS PLAN (“ELIGIBLE DIRECTORS”).

 

3.                                       ADMINISTRATION.  THIS PLAN WILL BE
ADMINISTERED BY THE COMPENSATION COMMITTEE OF THE BOARD (THE “COMMITTEE”), WHICH
IS COMPOSED SOLELY OF TWO OR MORE NONEMPLOYEE DIRECTORS (AS DEFINED IN
RULE 16B-3 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
(THE “EXCHANGE ACT”)).  ALL QUESTIONS OF INTERPRETATION OF THIS PLAN WILL BE
DETERMINED BY THE COMMITTEE, AND EACH DETERMINATION, INTERPRETATION OR OTHER
ACTION THAT THE COMMITTEE MAKES OR TAKES PURSUANT TO THE PROVISIONS OF THIS PLAN
WILL BE CONCLUSIVE AND BINDING FOR ALL PURPOSES AND ON ALL PERSONS.  THE
COMMITTEE WILL NOT BE LIABLE FOR ANY ACTION OR DETERMINATION MADE IN GOOD FAITH
WITH RESPECT TO THIS PLAN.

 

1

--------------------------------------------------------------------------------

 

4.                                       ELECTION TO DEFER RECEIPT OF RETAINER
AND FEES.

 

4.1.          ELECTION TO DEFER CASH COMPENSATION.  EACH ELIGIBLE DIRECTOR WHO
DECIDES TO PARTICIPATE IN THIS PLAN (A “PARTICIPATING DIRECTOR”) MAY IRREVOCABLY
ELECT TO DEFER RECEIPT OF CASH EQUAL TO 25%, 50%, 75% OR 100% OF THE ANNUAL CASH
RETAINER (“RETAINER”) PAYABLE TO THAT DIRECTOR FOR SERVICES TO BE RENDERED AS A
DIRECTOR IN THE “PLAN YEAR” (AS DEFINED BELOW) FOLLOWING SUCH ELECTION AND 25%,
50%, 75% OR 100% OF THE MEETING FEES PAYABLE FOR ATTENDANCE AT BOARD MEETINGS OR
MEETINGS OF COMMITTEES OF THE BOARD (“MEETING FEES”) OTHERWISE PAYABLE TO SUCH
DIRECTOR FOR SERVICES PERFORMED AFTER THE EFFECTIVE DATE OF THE DEFERRAL
ELECTION (AS DEFINED IN SECTION 4.2).  AS OF THE DATE OF ADOPTION OF THIS
AMENDED AND RESTATED PLAN, ELIGIBLE DIRECTORS ARE CUSTOMARILY PAID THE RETAINER
ONE-HALF ON FEBRUARY 1 AND ONE-HALF ON AUGUST 1 OF EACH YEAR, AND MEETING FEES
ARE PAID ON THE DAY OF THE MEETING.  AS USED HEREIN, “PLAN YEAR” MEANS THE
12-MONTH PERIOD WHICH RUNS FROM JANUARY 1 THROUGH DECEMBER 31.  THE AMOUNTS TO
BE DEFERRED WILL BE IN THE FORM OF COMMON STOCK UNITS CREDITED TO AN ACCOUNT FOR
THE PARTICIPATING DIRECTOR (A “DEFERRED STOCK ACCOUNT”).  NO SHARES OF COMMON
STOCK WILL BE ISSUED TO A PARTICIPATING DIRECTOR UNTIL HE OR SHE RECEIVES A
PAYMENT UNDER THE PLAN PURSUANT TO SECTION 6.

 

4.2.          MANNER OF MAKING DEFERRAL ELECTION.  A PARTICIPATING DIRECTOR MAY
ELECT TO DEFER PAYMENT OF RETAINER AND MEETING FEES PURSUANT TO THIS PLAN BY
FILING, NO LATER THAN DECEMBER 31 OF EACH YEAR (OR BY SUCH EARLIER DATE AS THE
COMMITTEE SHALL DETERMINE), AN IRREVOCABLE ELECTION WITH THE COMMITTEE ON A FORM
PROVIDED FOR THAT PURPOSE (“DEFERRAL ELECTION”).  THE DEFERRAL ELECTION SHALL BE
EFFECTIVE WITH RESPECT TO THE RETAINER AND MEETING FEES OTHERWISE PAYABLE FOR
SERVICES PERFORMED DURING THE FOLLOWING PLAN YEAR UNLESS THE PARTICIPATING
DIRECTOR SHALL REVOKE OR CHANGE THE ELECTION IN ACCORDANCE WITH THE PROCEDURE
SET FORTH IN SECTION 4.6.  THE DEFERRAL ELECTION FORM SHALL SPECIFY AN AMOUNT TO
BE DEFERRED EXPRESSED AS A PERCENTAGE OF THE PARTICIPATING DIRECTOR’S RETAINER
AND MEETING FEES.

 

4.3.          CREDITS TO DEFERRED STOCK ACCOUNT FOR DEFERRALS.  ON THE LAST
BUSINESS DAY OF EACH CALENDAR QUARTER OF THE PLAN YEAR (THE “CREDIT DATE”), A
PARTICIPATING DIRECTOR SHALL RECEIVE A CREDIT TO HIS OR HER DEFERRED STOCK
ACCOUNT.  THE AMOUNT CREDITED SHALL BE IN THE FORM OF STOCK UNITS IN A NUMBER
EQUAL TO THE NUMBER OF SHARES OF COMMON STOCK (ROUNDED TO THE NEAREST
ONE-HUNDREDTH OF A SHARE) DETERMINED BY DIVIDING (I) THE PRODUCT OF AN AMOUNT
EQUAL TO THE RETAINER AND MEETING FEES SPECIFIED FOR DEFERRAL THAT WOULD
OTHERWISE HAVE BEEN PAID TO THE PARTICIPATING DIRECTOR FOR THE APPLICABLE
CALENDAR QUARTER MULTIPLIED BY 105% BY (II) THE FAIR MARKET VALUE OF ONE SHARE
OF COMMON STOCK ON THE CREDIT DATE.

 

4.4.          DIVIDEND CREDIT.  EACH TIME A DIVIDEND IS PAID ON THE COMMON
STOCK, THE PARTICIPATING DIRECTOR SHALL RECEIVE A CREDIT OF STOCK UNITS TO HIS
OR HER DEFERRED STOCK ACCOUNT EQUAL TO EITHER THE NUMBER OF SHARES (IF A STOCK
DIVIDEND IS PAID) OR THAT NUMBER OF SHARES OF COMMON STOCK (ROUNDED TO THE
NEAREST ONE-HUNDREDTH OF A SHARE) HAVING A FAIR MARKET VALUE ON THE DIVIDEND
PAYMENT DATE (IF A CASH DIVIDEND IS PAID) EQUAL TO THE AMOUNT OF THE DIVIDEND
THAT WOULD HAVE BEEN PAYABLE ON THE NUMBER OF SHARES OF COMMON STOCK EQUAL TO
THE NUMBER OF STOCK UNITS CREDITED TO THE PARTICIPATING DIRECTOR’S DEFERRED
STOCK ACCOUNT ON THE DIVIDEND RECORD DATE.

 

2

--------------------------------------------------------------------------------

 

4.5.          FAIR MARKET VALUE.  FOR PURPOSES OF CONVERTING DOLLAR AMOUNTS INTO
SHARES OF COMMON STOCK, THE FAIR MARKET VALUE OF EACH SHARE OF COMMON STOCK
SHALL BE EQUAL TO THE CLOSING PRICE OF ONE SHARE OF THE COMPANY’S COMMON STOCK
ON THE NEW YORK STOCK EXCHANGE-COMPOSITE TRANSACTIONS (OR SUCH OTHER PRINCIPAL
STOCK EXCHANGE ON WHICH THE COMMON STOCK MAY THEN BE LISTED) ON THE LAST
BUSINESS DAY OF THE APPLICABLE CALENDAR QUARTER OF THE PLAN YEAR FOR CREDITS
UNDER SECTION 4 OR THE APPLICABLE PAYMENT DATE PURSUANT TO SECTION 6.

 

4.6.          CHANGE IN ELECTION.  PRIOR TO THE FIRST DAY OF THE PLAN YEAR FOR
WHICH A DEFERRAL ELECTION IS TO BECOME EFFECTIVE, EACH PARTICIPATING DIRECTOR
MAY IRREVOCABLY ELECT IN WRITING TO CHANGE A DEFERRAL ELECTION, EITHER TO CHANGE
THE PERCENTAGE OF SUCH DIRECTOR’S RETAINER AND MEETING FEES TO BE DEFERRED OR TO
DISCONTINUE MAKING DEFERRALS AND CURRENTLY RECEIVE THE ENTIRE RETAINER AND
MEETING FEES IN CASH (AN “AMENDED ELECTION”).  ONCE A DEFERRAL ELECTION BECOMES
EFFECTIVE AS OF THE FIRST DAY OF A PLAN YEAR, SUCH ELECTION SHALL BE
IRREVOCABLE, AND AN AMENDED ELECTION MAY ONLY BE MADE WITH RESPECT TO RETAINER
AND MEETING FEES PAID FOR SERVICES PERFORMED ON OR AFTER THE FIRST DAY OF THE
PLAN YEAR COMMENCING AFTER THE DATE OF RECEIPT OF SUCH AMENDED ELECTION BY THE
COMPANY.

 

4.7.          TERMINATION OF SERVICE AS A DIRECTOR.  IF A PARTICIPATING DIRECTOR
LEAVES THE BOARD BEFORE THE CONCLUSION OF ANY PLAN YEAR CALENDAR QUARTER, HE OR
SHE WILL BE PAID THE QUARTERLY INSTALLMENT OF THE RETAINER AND MEETING FEES
ENTIRELY IN CASH, NOTWITHSTANDING THAT A DEFERRAL ELECTION OR AMENDED ELECTION
IS ON FILE WITH THE COMMITTEE.  THE DATE OF TERMINATION OF A PARTICIPATING
DIRECTOR’S SERVICE AS A DIRECTOR OF THE COMPANY WILL BE DEEMED TO BE THE DATE OF
TERMINATION RECORDED ON THE PERSONNEL OR OTHER RECORDS OF THE COMPANY OR THE
BOARD.

 

5.                                       SHARES AVAILABLE FOR ISSUANCE.

 

5.1.          MAXIMUM NUMBER OF SHARES AVAILABLE.  SUBJECT TO ADJUSTMENT
PURSUANT TO SECTION 5.2, THE MAXIMUM NUMBER OF SHARES OF COMMON STOCK THAT SHALL
BE AVAILABLE FOR ISSUANCE UNDER THIS PLAN SHALL BE 300,000.  SHARES ISSUABLE
UNDER THIS PLAN MAY BE EITHER AUTHORIZED BUT UNISSUED SHARES, SHARES HELD IN THE
TREASURY OF THE COMPANY OR SHARES ACQUIRED ON THE OPEN MARKET OR OTHERWISE.

 

5.2.          ADJUSTMENTS TO SHARES.  IN THE EVENT OF ANY REORGANIZATION,
MERGER, CONSOLIDATION, RECAPITALIZATION, LIQUIDATION, RECLASSIFICATION, STOCK
DIVIDEND, STOCK SPLIT, COMBINATION OF SHARES, RIGHTS OFFERING, DIVESTITURE OR
EXTRAORDINARY DIVIDEND, AN APPROPRIATE ADJUSTMENT WILL BE MADE IN THE NUMBER
AND/OR KIND OF SECURITIES AVAILABLE FOR ISSUANCE UNDER THIS PLAN TO PREVENT
EITHER THE DILUTION OR THE ENLARGEMENT OF THE RIGHTS OF THE ELIGIBLE DIRECTORS
AND PARTICIPATING DIRECTORS.

 

6.                                       DEFERRAL PAYMENT.

 

6.1.          DEFERRAL PAYMENT ELECTION.  AT THE TIME OF MAKING THE DEFERRAL
ELECTION, EACH PARTICIPATING DIRECTOR SHALL ALSO COMPLETE A DEFERRAL PAYMENT
ELECTION SPECIFYING ONE OF THE PAYMENT OPTIONS DESCRIBED IN SECTIONS 6.2 AND
6.3, AND THE YEAR FOLLOWING SEPARATION FROM SERVICE (AS THAT TERM IS DEFINED
UNDER SECTION 409A OF THE INTERNAL REVENUE CODE) IN WHICH AMOUNTS CREDITED TO
THE PARTICIPATING DIRECTOR’S DEFERRED STOCK ACCOUNT SHALL BE PAID IN A LUMP SUM
PURSUANT TO SECTION 6.2, OR IN WHICH INSTALLMENT PAYMENTS SHALL COMMENCE
PURSUANT TO

 

3

--------------------------------------------------------------------------------

 

SECTION 6.3.  THE DEFERRAL PAYMENT ELECTION SHALL BE IRREVOCABLE AS TO ALL
AMOUNTS CREDITED TO THE PARTICIPATING DIRECTOR’S DEFERRED STOCK ACCOUNT.  THE
PARTICIPATING DIRECTOR MAY CHANGE THE DEFERRAL PAYMENT ELECTION BY MEANS OF A
SUBSEQUENT DEFERRAL PAYMENT ELECTION IN WRITING THAT WILL TAKE EFFECT FOR
DEFERRALS CREDITED FOR PLAN YEARS AFTER THE DATE THE COMPANY RECEIVES SUCH
SUBSEQUENT DEFERRAL PAYMENT ELECTION.

 

6.2.          PAYMENT OF DEFERRED STOCK ACCOUNTS IN A LUMP SUM.  UNLESS A
PARTICIPATING DIRECTOR ELECTS TO RECEIVE PAYMENT OF HIS OR HER DEFERRED STOCK
ACCOUNT IN INSTALLMENTS AS DESCRIBED IN SECTION 6.3, CREDITS TO A PARTICIPATING
DIRECTOR’S DEFERRED STOCK ACCOUNT SHALL BE PAYABLE IN FULL ON FEBRUARY 15 OF THE
YEAR FOLLOWING THE PARTICIPATING DIRECTOR’S SEPARATION FROM SERVICE (OR THE
FIRST BUSINESS DAY THEREAFTER) OR SUCH OTHER LATER DATE AS ELECTED BY THE
PARTICIPATING DIRECTOR PURSUANT TO SECTION 6.1.  ALL PAYMENTS SHALL BE MADE IN
SHARES OF COMMON STOCK, WITH ONE SHARE OF COMMON STOCK ISSUED FOR EACH STOCK
UNIT CREDITED TO THE PARTICIPATING DIRECTOR’S DEFERRED STOCK ACCOUNT, PLUS CASH
IN LIEU OF ANY FRACTIONAL SHARE.

 

6.3.          PAYMENT OF DEFERRED STOCK ACCOUNTS IN INSTALLMENTS.  A
PARTICIPATING DIRECTOR MAY ELECT TO HAVE HIS OR HER DEFERRED STOCK ACCOUNT PAID
IN ANNUAL INSTALLMENTS COMMENCING THE YEAR FOLLOWING SEPARATION FROM SERVICE OR
COMMENCING IN A LATER YEAR AS ELECTED BY THE PARTICIPATING DIRECTOR PURSUANT TO
SECTION 6.1.  ALL PAYMENTS SHALL BE MADE IN SHARES OF COMMON STOCK, WITH ONE
SHARE OF COMMON STOCK ISSUED FOR EACH STOCK UNIT CREDITED TO THE PARTICIPATING
DIRECTORS DEFERRED STOCK ACCOUNT, PLUS CASH IN LIEU OF ANY FRACTIONAL SHARE. 
ALL INSTALLMENT PAYMENTS SHALL BE MADE ANNUALLY ON FEBRUARY 15 OF EACH YEAR (OR
THE FIRST BUSINESS DAY THEREAFTER).  THE AMOUNT OF EACH INSTALLMENT PAYMENT
SHALL BE COMPUTED AS THE NUMBER OF SHARES CREDITED TO THE PARTICIPATING
DIRECTOR’S DEFERRED STOCK ACCOUNT ON THE RELEVANT INSTALLMENT PAYMENT DATE,
MULTIPLIED BY A FRACTION, THE NUMERATOR OF WHICH IS ONE AND THE DENOMINATOR OF
WHICH IS THE TOTAL NUMBER OF INSTALLMENTS ELECTED (NOT TO EXCEED TEN) MINUS THE
NUMBER OF INSTALLMENTS PREVIOUSLY PAID.  AMOUNTS PAID PRIOR TO THE FINAL
INSTALLMENT PAYMENT SHALL BE ROUNDED TO THE NEAREST WHOLE NUMBER OF SHARES; THE
FINAL INSTALLMENT PAYMENT SHALL BE FOR THE WHOLE NUMBER OF STOCK UNITS THEN
CREDITED TO THE PARTICIPATING DIRECTOR’S DEFERRED STOCK ACCOUNT, TOGETHER WITH
CASH IN LIEU OF ANY FRACTIONAL SHARE.

 

6.4.          CHANGE OF CONTROL.  NOTWITHSTANDING THE FOREGOING, IN THE EVENT OF
A PARTICIPATING DIRECTOR’S SEPARATION FROM SERVICE WITHIN SIX MONTHS FOLLOWING A
CHANGE OF CONTROL (AS DEFINED IN SECTION 11), CREDITS TO A PARTICIPATING
DIRECTOR’S DEFERRED STOCK ACCOUNT SHALL BE PAID IN A LUMP SUM (NOTWITHSTANDING
ANY PRIOR ELECTION TO THE CONTRARY) TO THE PARTICIPATING DIRECTOR OR THE
PARTICIPATING DIRECTOR’S BENEFICIARY OR ESTATE, AS THE CASE MAY BE, IN WHOLE
SHARES OF COMMON STOCK (TOGETHER WITH CASH IN LIEU OF A FRACTIONAL SHARE).

 

6.5.          SPECIFIED EMPLOYEES.  NOTWITHSTANDING THE FOREGOING, IF A
PARTICIPATING DIRECTOR IS A “SPECIFIED EMPLOYEE” (AS THAT TERM IS DEFINED UNDER
SECTION 409A), THE DIRECTOR’S DEFERRED STOCK ACCOUNT FOLLOWING SEPARATION FROM
SERVICE SHALL BE PAYABLE NO EARLIER THAN SIX MONTHS AFTER SUCH SEPARATION FROM
SERVICE.

 

6.6.          TRANSITION BENEFITS.  PARTICIPANTS SHALL BE AFFORDED AN
OPPORTUNITY TO CHANGE THE FORM OF PAYMENT FOR DISTRIBUTION ELECTIONS FROM ONE
FORM OF PAYMENT PERMITTED UNDER THE PLAN TO A DIFFERENT FORM OF PAYMENT
PERMITTED UNDER THE PLAN FOR ALL AMOUNTS CREDITED TO THE PLAN THAT ARE SUBJECT
TO SECTION 409A OF THE CODE (I.E., GENERALLY, AMOUNTS DEFERRED OR

 

4

--------------------------------------------------------------------------------

 

CONTRIBUTED INTO THE PLAN ON OR AFTER JANUARY 1, 2005).  SUCH CHANGE MUST BE
MADE ON OR BEFORE DECEMBER 31, 2008 AND MUST COMPLY IN ALL OTHER RESPECTS WITH
SPECIAL TRANSITION RULES ISSUED BY THE IRS AND THE U.S. DEPARTMENT OF TREASURY
IN CONNECTION WITH THE IMPLEMENTATION OF SECTION 409A OF THE CODE.

 

7.                                       LIMITATION ON RIGHTS OF ELIGIBLE AND
PARTICIPATING DIRECTORS.

 

7.1.          SERVICE AS A DIRECTOR.  NOTHING IN THIS PLAN WILL INTERFERE WITH
OR LIMIT IN ANY WAY THE RIGHT OF THE COMPANY’S BOARD OR ITS STOCKHOLDERS TO
REMOVE AN ELIGIBLE DIRECTOR OR PARTICIPATING DIRECTOR FROM THE BOARD.  NEITHER
THIS PLAN NOR ANY ACTION TAKEN PURSUANT TO IT WILL CONSTITUTE OR BE EVIDENCE OF
ANY AGREEMENT OR UNDERSTANDING, EXPRESS OR IMPLIED, THAT THE COMPANY’S BOARD OR
ITS STOCKHOLDERS HAVE RETAINED OR WILL RETAIN AN ELIGIBLE DIRECTOR OR
PARTICIPATING DIRECTOR FOR ANY PERIOD OF TIME OR AT ANY PARTICULAR RATE OF
COMPENSATION.

 

7.2.          NONEXCLUSIVITY OF THE PLAN.  NOTHING CONTAINED IN THIS PLAN IS
INTENDED TO EFFECT, MODIFY OR RESCIND ANY OF THE COMPANY’S EXISTING COMPENSATION
PLANS OR PROGRAMS OR TO CREATE ANY LIMITATIONS ON THE BOARD’S POWER OR AUTHORITY
TO MODIFY OR ADOPT COMPENSATION ARRANGEMENTS AS THE BOARD MAY FROM TIME TO TIME
DEEM NECESSARY OR DESIRABLE.

 

8.                                       PLAN AMENDMENT, MODIFICATION AND
TERMINATION.  THE BOARD MAY SUSPEND OR TERMINATE THIS PLAN AT ANY TIME.  THE
BOARD MAY AMEND THIS PLAN FROM TIME TO TIME IN SUCH RESPECTS AS THE BOARD MAY
DEEM ADVISABLE IN ORDER THAT THIS PLAN WILL CONFORM TO ANY CHANGE IN APPLICABLE
LAWS OR REGULATIONS OR IN ANY OTHER RESPECT THAT THE BOARD MAY DEEM TO BE IN THE
COMPANY’S BEST INTERESTS.  IF THERE IS A TERMINATION OF THE PLAN WITH RESPECT TO
ALL PARTICIPANTS, THE BOARD SHALL HAVE THE RIGHT, IN ITS SOLE DISCRETION, AND
NOTWITHSTANDING ANY ELECTIONS MADE BY THE PARTICIPANT, TO AMEND THE PLAN TO
IMMEDIATELY PAY ALL BENEFITS IN A LUMP SUM FOLLOWING SUCH PLAN TERMINATION, TO
THE EXTENT PERMISSIBLE UNDER SECTION 409A OF THE INTERNAL REVENUE CODE.

 

9.                                       EFFECTIVE DATE AND DURATION OF THE
PLAN.  THIS PLAN SHALL BECOME EFFECTIVE AS OF THE DATE THE BOARD APPROVES THIS
PLAN AND WILL CONTINUE UNTIL THE EARLIER TO OCCUR OF (I) THE TERMINATION OF THE
PLAN BY BOARD OR (II) THE TENTH ANNIVERSARY OF THE DATE OF APPROVAL OF THIS PLAN
BY THE BOARD.

 

10.                                 PARTICIPANTS ARE GENERAL CREDITORS OF THE
COMPANY.  THE PARTICIPATING DIRECTORS AND BENEFICIARIES THEREOF SHALL BE
GENERAL, UNSECURED CREDITORS OF THE COMPANY WITH RESPECT TO ANY PAYMENTS TO BE
MADE PURSUANT TO THIS PLAN AND SHALL NOT HAVE ANY PREFERRED INTEREST BY WAY OF
TRUST, ESCROW, LIEN OR OTHERWISE IN ANY SPECIFIC ASSETS OF THE COMPANY. 
ALTHOUGH THE COMPANY EXPECTS TO SET ASIDE MONIES OR OTHER ASSETS TO MEET ITS
OBLIGATIONS HEREUNDER (THERE BEING NO OBLIGATION TO DO SO), THE SAME SHALL,
NEVERTHELESS, BE REGARDED AS A PART OF THE GENERAL ASSETS OF THE COMPANY SUBJECT
TO THE CLAIMS OF ITS GENERAL CREDITORS, AND NEITHER ANY PARTICIPATING DIRECTOR
NOR ANY BENEFICIARY THEREOF SHALL HAVE A LEGAL, BENEFICIAL OR SECURITY INTEREST
THEREIN.

 

11.                                 CHANGE OF CONTROL.  “CHANGE OF CONTROL”
MEANS THE OCCURRENCE OF A “CHANGE IN THE OWNERSHIP OF THE COMPANY,” “CHANGE IN
EFFECTIVE CONTROL OF THE COMPANY,” AND/OR A “CHANGE IN THE OWNERSHIP OF A
SUBSTANTIAL PORTION OF THE COMPANY’S ASSETS” AS DEFINED UNDER TREASURY
REGULATION § 1.409A-3(I)(5).

 

5

--------------------------------------------------------------------------------

 

12.                                 MISCELLANEOUS.

 

12.1.        SECURITIES LAW AND OTHER RESTRICTIONS.  NOTWITHSTANDING ANY OTHER
PROVISION OF THIS PLAN OR ANY DEFERRAL ELECTION OR AMENDED ELECTION DELIVERED
PURSUANT TO THIS PLAN, THE COMPANY WILL NOT BE REQUIRED TO ISSUE ANY SHARES OF
COMMON STOCK UNDER THIS PLAN AND A PARTICIPATING DIRECTOR MAY NOT SELL, ASSIGN,
TRANSFER OR OTHERWISE DISPOSE OF SHARES OF COMMON STOCK ISSUED PURSUANT TO THIS
PLAN, UNLESS (A) THERE IS IN EFFECT WITH RESPECT TO SUCH SHARES A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION
UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS AND (B) THERE HAS
BEEN OBTAINED ANY OTHER CONSENT, APPROVAL OR PERMIT FROM ANY OTHER REGULATORY
BODY THAT THE COMMITTEE, IN ITS SOLE DISCRETION, DEEMS NECESSARY OR ADVISABLE. 
THE COMPANY MAY CONDITION SUCH ISSUANCE, SALE OR TRANSFER UPON THE RECEIPT OF
ANY REPRESENTATIONS OR AGREEMENTS FROM THE PARTIES INVOLVED, AND THE PLACEMENT
OF ANY LEGENDS ON CERTIFICATES REPRESENTING SHARES OF COMMON STOCK, AS MAY BE
DEEMED NECESSARY OR ADVISABLE BY THE COMPANY, IN ORDER TO COMPLY WITH SUCH
SECURITIES LAW OR OTHER RESTRICTION.

 

12.2.        GOVERNING LAW.  THE VALIDITY, CONSTRUCTION, INTERPRETATION,
ADMINISTRATION AND EFFECT OF THIS PLAN AND ANY RULES, REGULATIONS AND ACTIONS
RELATING TO THIS PLAN WILL BE GOVERNED BY AND CONSTRUED EXCLUSIVELY IN
ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES) OF THE STATE OF DELAWARE.

 

6

--------------------------------------------------------------------------------