Exhibit 10.12



 







Exhibit 10.12




MILACRON INC.



DIRECTOR DEFERRED COMPENSATION PLAN




     Milacron Inc. (the “Company”) hereby establishes, effective as of May 4, 2005, the
Milacron Inc. Director Deferred Compensation Plan (the “Plan”) on the terms and conditions
hereinafter set forth. Such Plan provides certain members of the Company’s Board of Directors the
opportunity to receive deferred compensation in accordance with the provisions of the Plan.



     1. Definitions. For the purposes hereof, the following words and phrases shall have
the meanings set forth below, unless their context clearly requires a different meaning:



          “Account” means the bookkeeping account maintained by the Company on behalf of each
Participant as provided herein. The sum of each Participant’s Deferral Sub-Account and Restricted
Sub-Account, in the aggregate, shall constitute his Account.




          “Beneficiary” means the Participant’s estate.




          “Board” means the board of directors of the Company.




          “Code” means the Internal Revenue Code of 1986, as amended.




          “Company” means Milacron Inc. and its successors, including, without limitation, the surviving
corporation resulting from any merger or consolidation of Milacron Inc. with any other corporation,
limited liability company, joint venture, partnership or other entity or entities.




          “Common Stock” means the common stock of the Company or any security into which such Common
Stock may be changed by reason of any transaction or event of the type referred to in Section 5
hereof.




          “Deferral Sub-Account” means the bookkeeping sub-account maintained by the Company on behalf
of each Participant pursuant to Section 2 hereof.




          “Exchange Act” means the Securities Exchange Act of 1934 and the rules and regulations
thereunder, as such law, rules and regulations may be amended from time to time.




          “Fair Market Value per Share” means, as of any particular date, (i) the average of the high
and low prices of Common Stock on the date on which it is to be valued hereunder as reported on the
New York Stock Exchange, or if there are no sales on such day, on the next preceding trading day
during which a sale occurred, or (ii) if the shares of Common Stock are not traded on an exchange,
the fair market value of the Common Stock as determined by the Board.




          “Participant” means any member of the Board who is not an employee of the Company or any of
its subsidiaries or affiliates.




          “Plan” means this Milacron Inc. Director Deferred Compensation Plan.




          “Restricted Sub-Account” means the bookkeeping sub-account maintained by the Company on behalf
of each Participant pursuant to Section 2 hereof.




     2. Accounts. The Company shall establish a Deferral Sub-Account and Restricted
Sub-Account for each Participant. The Balance in each such sub-account shall reflect the shares of
Common Stock, if any, credited by the Company under Section 3 hereof, and adjustments thereto,
including dividend equivalents, in accordance with Section 5 hereof. The Company may, in its sole
discretion, establish and name such additional sub-accounts as may be
appropriate or necessary to facilitate proper recordkeeping, provided that the terms of such
additional sub-accounts are consistent with the Plan.



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Exhibit 10.12

     3. Credits of Common Stock




(a) On May 4, 2005, each Participant serving on the Board as of the preceding day shall
receive a credit to his Deferral Sub-Account of a number of shares of Common Stock equal to
(i) $10,000 divided by (ii) the Fair Market Value per Share as of January 1, 2005. Each
Participant joining the Board during 2005 but after May 3 shall receive, on the fifth
business day after such Participant becomes a member of the Board, a number of credits to
his Deferral Sub-Account calculated in accordance with the prior sentence, but prorated for
the amount of the calendar year 2005 during which the Participant is expected to be a
member of the Board. On January 5, 2006, and on each January 5th thereafter (unless such
day is not a business day, in which event on the next succeeding business day), each
Participant serving on the Board as of such date shall receive a credit to his Deferral
Sub-Account of a number of shares of Common Stock equal to (i) $10,000 divided by (ii) the
Fair Market Value per Share as of the immediately preceding January 1. Each Participant
joining the Board after January 1 of 2006 or after the first day of any subsequent calendar
year shall receive, on the fifth business day after such Participant becomes a member of
the Board, a number of credits to his Deferral Sub-Account calculated in accordance with
the prior sentence, but prorated for the amount of such calendar year during which the
Participant is expected to be a member of the Board.




(b) The Company may from time to time, in its discretion, credit shares of Common Stock to
the Restricted Sub-Account of one or more Participants. The amount of such credits, if
any, shall be determined by the Board in its sole discretion.



     4. Vesting. Credits to a Participant’s Deferral Sub-Account shall vest daily in equal
increments during the period beginning on January 1 of the calendar year in which such credits are
made pursuant to Section 3 and ending on December 31 of such year. Notwithstanding the previous
sentence, for those Participants joining the Board after January 1 of a given calendar year, daily
vesting shall begin the day the Participant joins the Board, and for those Participants who cease
to be members of the Board prior to December 31 of a given calendar year, daily vesting shall end
on the date the Participant ceases to be a member of the Board. Thus, if a Participant joins the
Board after January 1 or ceases to be a member of the Board prior to December 31 of a given year,
the amount payable from Participant’s Deferral Sub-Account during such calendar year shall be
prorated for the number of days during the calendar year in which the Participant served as a
member of the Board. Credits, if any, to a Participant’s Restricted Sub-Account shall be subject
to such vesting schedule as may be determined by the Board at the time such credits are approved.



     5. Adjustments. The amount credited to the Accounts in accordance with Section 3
hereof, plus dividend equivalents thereon, shall be deemed to be invested at all times in shares of
Common Stock, in accordance with procedures established from time to time by the Board.
Notwithstanding the preceding sentence, the Company is not and shall not be required to make any
investment in shares of Common Stock in connection with this Plan. The Board may make or provide
for such adjustments in the number of shares of Common Stock credited to the Accounts as the Board,
in its sole discretion exercised in good faith, may determine is equitably required in order to
prevent dilution or enlargement of a Participant’s rights that otherwise would result from (i) any
stock dividend, stock split, combination of shares, recapitalization, or other change in the
capital structure of the Company, (ii) any merger, consolidation, spin-off, split-off, spin-out,
split-up, reorganization, partial or complete liquidation, or other distribution of assets or
issuance of rights or warrants to purchase securities, or (iii) any other corporate transaction or
event having an effect similar to any of the foregoing. In the event of any such transaction or
event, the Board, in its sole discretion exercised in good faith, may provide, in substitution for
the shares of Common Stock credited to the Accounts, such alternative consideration as it may
determine to be equitable in the circumstances.



     6. Distribution of Accounts




(a) The vested amounts then-credited to a Participant’s Deferral Sub-Account and Restricted
Sub-Account shall be distributed to him or his Beneficiary within 20 days following the
date on which the Participant ceases to be a member of the Board. Such distribution shall
discharge all obligations of the Company (and any affiliates) to the Participant or
Beneficiary under this Plan with respect to such sub-accounts. Notwithstanding
the preceding sentence, the Board may, at the time that an amount is credited to a
Participant’s Restricted Sub-Account, provide that such amount shall be distributed to him
or his Beneficiary within 20 days following the date on which such amount becomes vested.



          (b) Subject to Section 14 hereof, a Participant may elect, on a form provided by the
Company, to receive distributions from his Deferral Sub-Account or Restricted Sub-Account
in cash, shares of Common Stock, or a



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Exhibit 10.12


combination of the foregoing. Notice of the election
shall be delivered to the Secretary of the Company no less than 10 days prior to the
distribution. To the extent that an amount is to be distributed in the form of cash, the
amount of cash shall be calculated based on the Fair Market Value per Share as of the date
of the event that gave rise to the distribution. Any shares of Common Stock distributed
under the Plan may be shares of original issuance, treasury shares or a combination of the
foregoing. The Company shall not be required to issue any fractional shares of Common
Stock pursuant to this Plan and may provide for the elimination of fractions. In the event
that a Participant does not file a distribution election as provided in this Section 6(b),
the distribution shall be made in the form of cash. Any distribution shall be made in a
single lump sum.




(c) Notwithstanding anything in this Section 6 to the contrary, (i) the date on which a
Participant ceases to be a member of the Board shall be deemed to have not occurred for
purposes of this Plan unless such cessation constitutes a “separation from service” within
the meaning of Section 409A of the Code, and (ii) if a Participant is a “specified
employee” within the meaning of Section 409A of the Code, then any distribution on account
of his separation from service may not commence before the date that is 6 months after the
date of such separation from service (or, if earlier, the date of death).



7. Administration





(a) This Plan shall be administered by the Board, which may from time to time delegate all
or any part of its authority under this Plan to a committee of the Board (or subcommittee
thereof), consisting of not less than two directors appointed by the Board, each of whom
shall be a “non-employee director” as defined in Rule 16b-3 of the Exchange Act. To the
extent of any such delegation, references in this Plan to the Board shall be deemed to be
references to any such committee or subcommittee. A majority of the committee (or
subcommittee) shall constitute a quorum, and the action of the members of the committee (or
subcommittee) present at any meeting at which a quorum is present, or acts unanimously
approved in writing, shall be the acts of the committee (or subcommittee).




(b) The Board shall have all such powers as may be necessary to carry out the provisions of
the Plan, including the power to (i) resolve all questions pertaining to claims for
benefits and procedures for claim review, (ii) resolve all other questions arising under
the Plan, including any factual questions and questions of construction, and (iii) take
such further action as the Company shall deem advisable in the administration of the Plan.
The actions taken and the decisions made by the Board hereunder shall be final and binding
upon all interested parties.




(c) Notwithstanding any other provision herein, it is intended that the Plan comply with
the provisions of Section 409A of the Code, so as to prevent the inclusion in gross income
of any amounts deferred hereunder in a taxable year that is prior to the taxable year or
years in which such amounts would otherwise actually be distributed or made available to
Participants or Beneficiaries. This Plan shall be construed, administered, and governed in
a manner that effects such intent, and the Board shall not take any action that would be
inconsistent with such intent. Any provisions that would cause any amount deferred or
payable under the Plan to be includible in the gross income of any Participant or
Beneficiary under Section 409A(a)(1) of the Code shall have no force and effect unless and
until amended to cause such amount to not be so includible (which amendment may be
retroactive to the extent permitted by Section 409A of the Code and may be made by the
Board without the consent of the Participant or Beneficiary).



     8. Interest of Participants. The obligation of the Company under the Plan to make
payment of amounts reflected in an Account merely constitutes the unsecured promise of the Company
to make payments from its general assets and no Participant or Beneficiary shall have any interest
in, or a lien or prior claim upon, any property of the Company. This Plan shall not confer upon
any Participant any right with respect to continuance of service with the
Company or any affiliate, nor shall it interfere in any way with any right the Company or any
affiliate would otherwise have to terminate such Participant’s service at any time.



     9. Nonassignment of Benefits. No right or interest under the Plan of any Participant
or Beneficiary shall, without the written consent of the Company, be (i) assignable or transferable
in any manner, (ii) subject to alienation, anticipation, sale, pledge, encumbrance, attachment,
garnishment or other legal process or (iii) in any manner liable for or subject to the debts or
liabilities of the Participant or Beneficiary. Notwithstanding the foregoing, to the extent
permitted by Section 409A of the Code, the Board shall honor a judgment, order or decree from a
state domestic



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Exhibit 10.12


relations court which requires the payment of part or all of a Participants’ or
Beneficiary’s interest under this Plan to an “alternate payee” as defined in Section 414(p) of the
Code.



     10. Amendment and Termination. The Company reserves the right to amend or terminate
the Plan at any time by action of the Board, except that no such action shall reduce the Account
balance of any Participant or his Beneficiary who has an Account, without the consent of the
Participant or Beneficiary. Notwithstanding the foregoing, in the event that the Plan is
terminated, the vested amounts allocated to a Participant’s Account shall be distributed to the
Participant or his Beneficiary on the dates on which the Participant or his Beneficiary would
otherwise receive benefits hereunder without regard to the termination of the Plan;
provided, however, that to the extent permitted by Section 409A of the Code, the
Board may direct that the Participant or his Beneficiary receive an immediate lump sum payment
equal to the vested amount credited to his Account.



     11. Governing Law. Except to the extent preempted by federal law, the provisions of
the Plan shall be governed and construed in accordance with the laws of the State of Delaware.



     12. Successors. This Plan shall be binding upon and inure to the benefit of the
Company and any successor of or to the Company, including without limitation any persons acquiring
directly or indirectly all or substantially all of the business and/or assets of the Company
whether by sale, merger, consolidation, reorganization or otherwise (and such successor shall
thereafter be deemed the “Company” for the purposes of this Plan), and the heirs, beneficiaries,
executors and administrators of each Participant.



     13. No Funding Required. The Company may create a trust to hold funds to be used in
payment of its obligations under the Plan, and may fund such trust; provided,
however, that any funds contained therein shall remain liable for the claims of the
Company’s general creditors.



     14. Compliance with Law. The Company shall make reasonable efforts to comply with all
applicable federal and state securities laws in connection with the Plan; provided,
however, notwithstanding any other provision of this Plan, the Company shall not be
obligated to issue any Common Stock pursuant to this Plan if the issuance thereof would result in a
violation of any such law, in which case the Company shall satisfy its obligations under Section 6
hereof in cash rather than shares of Common Stock.



     15. Headings; Interpretation




(a) Headings in this Plan are inserted for convenience of reference only and are not to be
considered in the construction of the provisions hereof. Unless the context clearly
requires otherwise, the masculine pronoun wherever used herein shall be construed to
include the feminine pronoun.




(b) Any reference in this Plan to Section 409A of the Code will also include any proposed,
temporary or final regulations, or any other guidance, promulgated with respect to such
Section 409A by the U.S. Department of Treasury or the Internal Revenue Service.




(c) For purposes of the Plan, the phrase “permitted by Section 409A of the Code,” or words
or phrases of similar import, shall mean that the event or circumstance shall only be
permitted to the extent it would not cause an amount deferred or payable under the Plan to
be includible in the gross income of a Participant or Beneficiary under Section 409A(a)(1)
of the Code.



[END OF DOCUMENT]





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