EX-10.1 Non-Employee Directors Compensation Plan



 






Exhibit 10.1




COOPER TIRE & RUBBER COMPANY

1998 NON-EMPLOYEE DIRECTORS COMPENSATION DEFERRAL PLAN

(AS AMENDED AND RESTATED AS OF JANUARY 1, 2005)




     1. Purpose. The purpose of the Plan is to provide qualified individuals who are not
employees of the Company who serve as members of the Board with equity compensation in
addition to their Director’s Fees and with an opportunity to defer payment of a portion of
their Director’s Fees in accordance with the terms and conditions set forth herein.



     2. Definitions. For the purposes of the Plan, the following capitalized words shall
have the meanings set forth below:



     “Annual Fees” means the cash portion of (i) any annual fee payable to a Non- Employee Director
for service on the Board; (ii) any other fee determined on an annual basis and payable for service
on, or for acting as chairperson of, any committee of the Board, and (iii) any similar annual fee
or fees payable in respect of service on the board of directors of any Subsidiary or any committee
of any such board of directors.



     “Annual Meeting” means an annual meeting of the Company’s stockholders.



     “Annual Units” means Phantom Stock Units to be awarded to Non-Employee Directors as additional
compensation for service on the Board pursuant to Section 5(b).



     “Beneficiary” or “Beneficiaries” means an individual or entity designated by a Non-Employee
Director on a Beneficiary Designation Form to receive Deferred Benefits in the event of the
Non-Employee Director’s death; provided, however, that, if no such individual or entity is
designated or if no such designated individual is alive at the time of the Non-Employee Director’s
death, Beneficiary shall mean the Non-Employee Director’s estate.



     “Beneficiary Designation Form” means a document, in a form approved by the Committee to be
used by Non-Employee Directors to name their respective Beneficiaries. No Beneficiary Designation
Form shall be effective unless it is signed by the Non-Employee Director and received by the
Committee prior to the date of death of the Non-Employee Director.



     “Board” means the Board of Directors of the Company.



     “Code” means the Internal Revenue Code of 1986, as amended, and the applicable rules and
regulations promulgated thereunder.



     “Committee” means the committee of the Board that has been appointed to administer the Plan
or, if no committee has been appointed, the Board.



     “Common Stock” means the common stock, par value $1.00 per share, of the Company.



     “Companies” means the Company and each Subsidiary.



     “Company” means Cooper Tire & Rubber Company, a Delaware corporation, or any successor to
substantially all of its business.













 





     “Deferral Election Form” means a document, in a form approved by the Committee, pursuant to
which a Non-Employee Director makes a deferral election under the Plan.



     “Deferral Period” means each period commencing on the date of an Annual Meeting and ending on
the date immediately preceding the next Annual Meeting. The first Deferral Period under the Plan
shall commence on the first day of the first fiscal quarter of the Company to begin after May 5,
1998. If an individual becomes eligible to participate in the Plan after the commencement of a
Deferral Period, the Deferral Period for the individual shall be the remainder of such Deferral
Period.



     “Deferred Benefit” means the sum of (i) any amount that will be paid on a deferred basis under
the Plan to a Non-Employee Director who has made a deferral election pursuant to Section 5 plus
(ii) the amount payable with respect to the Annual Units.



     “Deferred Compensation Account” means the bookkeeping record established for each Non-Employee
Director. A Deferred Compensation Account is established only for purposes of measuring a Deferred
Benefit and not to segregate assets or to identify assets that may be used to pay a Deferred
Benefit.



     “Director’s Fees” means the aggregate of a Non-Employee Director’s Annual Fees and Per Diem
Fees.



     “Effective Date” means May 5, 1998, which was the original Effective Date of the Plan.



     “Election Date” means the December 31st immediately preceding the commencement of a Deferral
Period. If an individual first becomes eligible to participate in the Plan on an Annual Meeting
date or after the start of a Deferral Period, the Election Date shall be the thirtieth day
following such Annual Meeting date or initial participation date, as the case may be.



     “Fair Market Value” means the average of the highest and the lowest quoted selling price of a
share of Common Stock as reported on the composite tape for securities listed on the New York Stock
Exchange, or such other national securities exchange as may be designated by the Committee, or, in
the event that the Common Stock is not listed for trading on a national securities exchange but is
quoted on an automated system, on such automated system, in any such case on the valuation date
(or, if there were no sales on the valuation date, the average of the highest and the lowest quoted
selling prices as reported on said composite tape or automated system for the most recent day
during which a sale occurred).



     “Non-Employee Director” means a member of the Board who is not, and has not been, an employee
of the Company or any of its Subsidiaries.



     “Per Diem Fees” means a fee paid for attendance at or participation in (i) each meeting of the
Board, (ii) each meeting of a committee of the Board when such meeting is held on a day other than
a day for which a fee is paid for a meeting of the Board, (iii) each day of services to the Company
requested by the chairman of the Board, and (iv) services similar to those specified in (i), (ii),
or (iii) above, provided to any Subsidiary.



     “Phantom Stock Unit” means a bookkeeping unit representing one share of Common Stock credited
to a Deferred Compensation Account in accordance with Section 5(d).



2









 





     “Plan” means the Cooper Tire & Rubber Company 1998 Non-Employee Director Compensation Deferral
Plan as herein set forth or as duly as amended.



     “Investment Funds” means the investment funds available from time to time under the Company’s
Spectrum Investment Savings Plan, or such other funds as the Committee may designate from time to
time.



     “Subsidiary” means a corporation or other entity with respect to which the Company, directly
or indirectly, has the power, whether through the ownership of voting securities, by contract or
otherwise, to elect at least a majority of the members of such corporation’s board of directors or
analogous governing body.



     “Termination of Service” or “termination of service” means a separation from service as
defined under Section 409A of the Code.



     3. Administration.



          (a) The Plan shall be administered by the Committee.




          (b) The Committee shall be authorized to interpret the Plan, to establish, amend
and rescind any rules and regulations relating to the Plan, to make factual
determinations in connection with the administration or interpretation of the Plan, and
to make any other determinations that it believes are necessary or advisable for the
administration of the Plan. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any Deferral Election Form to
the extent the Committee deems desirable to carry the Plan into effect. Any decision
of the Committee in the administration of the Plan, as described herein, shall be final
and conclusive. The Committee may act only by a majority of its members, except that
the members thereof may authorize any one or more of the Committee members to execute
and deliver documents on behalf of the Committee.




          (c) The Committee shall be entitled to rely in good faith upon any report or other
information furnished to it by any officer or employee of the Companies or from the
financial, accounting, legal or other advisers of the Companies. Each member of the
Committee, each individual designated by the Committee to administer the Plan and each
other person acting at the direction of or on behalf of the Committee shall not be
liable for any determination or anything done or omitted to be done by him or by any
other member of the Committee or any other such individual in connection with the Plan,
except for his own willful misconduct or as expressly provided by statute, and to the
extent permitted by law and the bylaws of the Company, shall be fully indemnified and
protected by the Company with respect to such determination, act or omission.




     4. Shares Available. The Company is authorized to issue up to 200,000 shares of Common
Stock under the Plan (the “Plan Limit”). Such shares of
Common Stock may be newly issued shares of Common Stock or reacquired shares of Common Stock held in the treasury of the
Company. The amount of any Annual Units paid in cash shall not be treated as issued under the
Plan.



3









 





     5. Deferral of Director’s Fees and Crediting of Annual Units.



          (a) Deferral Elections.





          (i) General Provisions. Non-Employee Directors may elect
to defer all or a specified percentage of their Director’s Fees with respect to
a Deferral Period in the manner provided in this Section 5. A Non-Employee
Director’s Deferred Benefit is at all times nonforfeitable.




          (ii) Deferral Election Forms. Before the Election Date
applicable to a Deferral Period, each Non-Employee Director will be provided
with a Deferral Election Form and a Beneficiary Designation Form. In order for
a Non-Employee Director to participate in the deferral portion of the Plan for
a given Deferral Period, a Deferral Election Form, completed and signed by him,
must be delivered to the Company on or prior to the applicable Election Date.
A Deferral Election Form submitted by a Non-Employee Director for a Deferral
Period shall be deemed to be a continuing deferral election for all subsequent
Deferral Periods, unless the Non-Employee Director completes and files a
subsequent Deferral Election Form with the Company prior to the Election Date
applicable to that Deferral Period. A Non-Employee Director electing to
participate in the Plan for a given Deferral Period shall indicate on his
Deferral Election Form:




          (A) the percentage of the Director’s Fees earned
during the Deferral Period to be deferred which shall be in multiples
of 10%;




          (B) if the Deferral Election Form is the first such
form filed by the Non-Employee Director, the Non-Employee Director’s
election, in accordance with Sections 5(f) and 5(g), as to the timing,
form and manner of payment of the Deferred Benefits; and




          (C) the Non-Employee Director’s investment
election, with respect to the deemed investment of the deferred
Director’s Fees and Annual Units, in accordance with Section 5(d).




A Non-Employee Director’s election as to the timing, form and manner of payment of Deferred
Benefits in the initial Deferral Election Form shall govern the timing, form and manner of
payment of all subsequent deferrals under the Plan and may not be changed or revoked without
the prior written consent of the Committee, provided that a Non-Employee
Director, with the prior written consent of the Committee, may change the time of the
commencement of payment(s) or the form of payment with regard to Deferred Benefits for a
subsequent Deferral Period by completing and filing a subsequent Deferral Election Form with
the Company prior to the Election Date applicable to that Deferral Period. Notwithstanding
the foregoing, the Deferral Election Form that is filed by an individual who first becomes
eligible to participate in the Plan on an Annual Meeting date or after the start of a
Deferral Period by the applicable Election Date shall be
effective only with respect to Director’s Fees earned and Annual Units awarded following the
filing of such Deferral Election Form.



4









 






          (iii) Effect of No Deferral Election. A Non-Employee
Director who does not have a completed and signed Deferral Election Form on
file with the Company on or prior to the applicable Election Date for a
Deferral Period may not defer his Director’s Fees for such Deferral Period.




          (iv) Subsequent Payment Elections. With the prior written
consent of the Committee as described in Section 5(a)(ii) of the Plan, a
Non-Employee Director may make a subsequent election to change the time of the
commencement of payment(s) of the portion of the Non-Employee Director’s
Deferred Benefit representing deferred Director’s Fees, the form of payment of
the Non-Employee Director’s Deferred Benefit, or both, with respect to the
amount of such Deferred Benefits that were previously deferred if all of the
following requirements are met:




          (A) Such subsequent payment election may not take
effect until at least twelve months after the date on which the
subsequent payment election is made;




          (B) In the case of a subsequent payment election
related to a payment not described in Section 5(i) of the Plan, the
first payment under such subsequent payment election shall in all cases
be deferred for a period of not less than five years from the date such
payment would otherwise have been made (or, in the case of installment
payments, which shall be treated as a single payment for purposes of
this Section 5(a)(iv), five years from the date the first installment
payment was scheduled to be paid); and




          (C) Any subsequent payment election related to a
distribution that is to be made at a specified date or pursuant to a
fixed schedule pursuant to Section 5 of the Plan must be made not less
than twelve months prior to the date the payment was scheduled to be
made under the prior payment election (or, in the case of installment
payments, which shall be treated as a single payment for purposes of
this Section 5(a)(iv), twelve months prior to the date the first
installment payment was scheduled to be paid).



          (b) Award of Annual Units. Annual Units shall be awarded to each
Non-Employee Director in December of each year (or at such other time as may be
determined by the Committee) as follows:





          (i) for the calendar year ended December 31, 2004, the number of
Annual Units to be so awarded to each Non-Employee Director shall be 500 per
year; and




          (ii) for the calendar year beginning January 1, 2005 and for all
calendar years thereafter, the number of Annual Units to be so awarded to
each Non-Employee Director will be the number of Annual Units having a Fair
Market Value on the day of the Annual Meeting equal to $30,000, unless and
until a greater or lesser number is specified by the Committee.



          (c) Establishment of Deferred Compensation Accounts. A Non-Employee
Director’s deferrals and the Annual Units will be credited to a Deferred Compensation
Account set up for that Non-Employee Director by the Company in accordance with the
provisions of this




5









 







Section 5. A Participant’s Deferred Compensation Account shall be
further divided into the following sub-accounts: (i) a sub-account which shall be the
record of the Non-Employee Director’s deferrals and the Annual Units that were earned
and vested prior to January 1, 2005 (the “Grandfathered Deferred Benefits”) and which
are governed by the law applicable to nonqualified deferred compensation prior to the
addition of Section 409A of the Code and shall be subject to the terms and conditions
specified in the Plan as in effect prior to January 1, 2005 and (ii) a sub-account
which shall be the record of the Non-Employee Director’s deferrals and the Annual Units
that were earned and vested on or after January 1, 2005 (the “Non-Grandfathered
Deferred Benefits”) and which are subject to the requirements of Section 409A of the
Code.




          (d) Crediting of Deferred Director’s Fees and Annual Units to Deferred
Compensation Accounts.





          (i) Deferred Director’s Fees. The portion of the
Director’s Fees that a Non-Employee Director elects to defer shall be credited
to the Deferred Compensation Account as of the last business day of the fiscal
quarter in which such portion of the Director’s Fees would otherwise have been
payable to the Non-Employee Director. Amounts of Director’s Fees credited to
the Deferred Compensation Account of a Non-Employee Director shall be deemed
invested in accordance with such Non-Employee Director’s investment election
among the Phantom Stock Units and the Investment Funds. Any amounts credited
to a Non-Employee Director’s Deferred Compensation Account with respect to
which such Non-Employee Director does not provide an investment election shall
be deemed invested in Phantom Stock Units. A Non-Employee Director may change
his investment election either prospectively or with respect to amounts
previously credited to his Deferred Compensation Account in accordance with
procedures specified by the Committee; provided, however, a
Non-Employee Director may not make an election to transfer or reallocate
amounts deemed invested in any Investment Fund into Phantom Stock Units. The
number of Phantom Stock Units to be so credited to the Deferred Compensation
Account shall be determined by dividing (1) the amount of the Director’s Fees
over such quarter by (2) the Fair Market share of Common Stock as of the date
of crediting. Any partial Phantom Stock Unit that results from the application
of the previous sentence shall be rounded to the nearest whole Phantom Stock
Unit.




          (ii) Annual Units. The Annual Units awarded to a
Non-Employee Director shall be credited to the Deferred Compensation Account as
of the date of grant. After the initial crediting of the Annual Units to a
Non-Employee Director’s Deferred Compensation Account, a Non-Employee Director
may elect to reallocate any or all of such amounts from Phantom Stock Units to
a deemed investment among the Phantom Stock Units and the Investment Funds. A
Non-Employee Director may not make an election to transfer or reallocate
amounts deemed invested in any Investment Fund into Phantom Stock Units.




          (iii) Dividend Equivalents and Other Gains and Losses. In
the event that the Company pays any cash or other dividend or makes any other
distribution in respect of the Common Stock, with respect to any Phantom Stock
Units deemed credited to the Deferred Compensation Account of a Non-Employee
Director, such Deferred



6









 






Compensation Account will be credited with additional
Phantom Stock Units determined by dividing (A) the amount of cash, or the value
(as determined by the Committee) of any securities or other property, paid or
distributed in respect of a corresponding number of shares of Common Stock by
(B) the Fair Market Value of a share of Common Stock as of the date of such
payment or distribution. Any partial Phantom Stock Unit that results from the
application of the previous sentence shall be rounded up to a whole Phantom
Stock Unit. Such credit shall be made effective as of the date of the dividend
or other distribution in respect of the Common Stock. A Non-Employee
Director’s Deferred Compensation Account will be credited with other gains,
losses, interest and other earnings based on investment elections made by such
Non-Employee Director, in accordance with investment deferral crediting options
and procedures established by the Committee, which shall include procedures for
prospective investment elections with respect to Director’s Fees that are to be
deferred under the Plan and for the reallocation of Director’s Fees (and gains,
losses, interest and other earnings thereon) credited to a Non-Employee
Director’s Deferred Compensation Account. The Committee specifically retains
the right in its sole discretion to change the investment deferral crediting
options and procedures from time to time.




          (iv) Deemed Investment. By electing to defer any amount
pursuant to the Plan, each Non-Employee Director shall thereby acknowledge and
agree that the Company is not and shall not be required to make any investment
in connection with the Plan, nor is it required to follow the Non-Employee
Director’s investment directions in any actual investment it may make or
acquire in connection with the Plan.




          (v) No Rights as Stockholder. The crediting of Phantom
Stock Units to a Non-Employee Director’s Deferred Compensation Account shall
not confer on the Non-Employee Director any rights as a stockholder of the
Company.




          (vi) Effective Date of Investment Election. Except as
otherwise specified by the Committee or by the Non-Employee Director in his
Deferral Election Form, the Non-Employee Director’s investment election shall
be effective as soon as practicable after receipt by the Committee. Without
limiting the generality of the foregoing, any Non-Employee Director may
provide, with respect to elections to transfer amounts invested in Phantom
Stock into any Investment Fund, for future effectiveness of such investment
election on a specified date or dates for the purpose of creating a Rule 10b5-1
trading plan under the Securities Exchange Act of 1934, subject to compliance
with the Company’s insider trading policy and any further procedures the
Committee may adopt from time to time.



          (e) Written Statements of Account. The Company will furnish each
Non-Employee Director with a statement setting forth the value of such Non-Employee
Director’s Deferred Compensation Account as of the end of each Deferral Period and all
credits to and payments from the Deferred Compensation Account during the Deferral
Period. Such statement shall separately detail the portion of the Deferred Benefit
representing deferred Director’s Fees and the portion of the Deferred Benefit
representing Annual Units and will further separately detail amounts deemed invested in
Phantom Stock Units and amounts deemed invested in any Investment Fund, as provided in
Section 5(d) of this Plan. Such statement shall also separately detail the portion of
the Deferred Benefit representing Grandfathered Deferred Benefits (if any)




7









 







and the
portion of the Deferred Benefit representing Non-Grandfathered Deferred Benefits. Such
statement will be furnished no later than sixty days after the end of the Deferral
Period.




          (f) Manner and Form of Payment of Deferred Benefit.





          (i) Payment of any portion of the Deferred Benefit representing
deferred Director’s Fees shall be in cash or in shares of Common Stock at the
Non-Employee Director’s election; provided,
however, that shares of Common Stock shall only be distibutable with respect to that portion
of a Non-Employee Director’s Deferred Compensation Account that is deemed
invested in Phantom Stock Units at the time of the distribution. If the
Non-Employee Director fails to make a timely election prior to distribution,
the deferred Director’s Fees will be paid in Common Stock to the extent the
portion of the Non-Employee Director’s Deferred Compensation Account
representing deferred Director’s Fees is deemed invested in Phantom Stock Units
and otherwise will be paid in cash. Payment shall be made in one of the
following forms as elected by the Non-Employee Director: in a single lump sum
or in a series of five or fewer annual installments. The amount of each
installment payment to a Non-Employee Director shall be determined in
accordance with the formula B/(N — P), where “B” is the value of the Deferred
Compensation Account representing deferred Director’s Fees as of the
installment calculation date, “N” is the number of installments elected by the
Non-Employee Director and “P” is the number of installments previously paid
to the Non-Employee Director. The same formula shall be applied to
determine the amount of cash and shares of Common Stock, as applicable,
payable to the Non-Employee Director. For purposes of this paragraph, the
value of the Phantom Stock Units shall be the Fair Market Value of the
Common Stock (i) on the installment calculation date, in the case of
installment payments and (ii) on the day preceding the date of distribution,
in the case of lump sum payments. If the Non-Employee Director elects to
receive payment of the deferred Director’s Fees in Common Stock, any partial
unit resulting in the calculation above will be settled in cash.




          (ii) Payment of the portion of the Deferred Benefits representing
Annual Units shall be in cash or in shares of Common Stock at the Non-Employee
Director’s election; provided, however, that shares of Common
Stock shall only be distibutable with respect to that portion of a Non-Employee
Director’s Deferred Compensation Account that is deemed invested in Phantom
Stock Units at the time of the distribution. If the Non-Employee Director
fails to make a timely election prior to distribution, the Annual Units will be
paid in Common Stock to the extent the portion of the Non-Employee Director’s
Deferred Compensation Account representing Annual Units is deemed invested in
Phantom Stock Units and otherwise will be paid in cash. Payment shall be made
in one of the following forms as elected by the Non-Employee Director: in a
single lump sum or in a series of five or fewer annual installments. The
amount of each installment payment to a Non-Employee Director shall be
determined in accordance with the formula B/(N — P), where “B” is the value of
the Deferred Compensation Account representing deferred Annual Units as of the
installment calculation date, “N” is the number of installments elected by the
Non-Employee Director and “P” is the number of installments previously paid to
the Non-Employee Director. The same formula shall be applied to determine the
amount of cash and shares of Common Stock, as applicable, payable to the
Non-Employee Director. For purposes



8









 






of this paragraph, the value of the
Phantom Stock Units shall be the Fair Market Value of the Common Stock (i) on
the installment calculation date, in the case of installment payments and (ii)
on the day preceding the date of distribution, in the case of lump sum
payments. If the Non-Employee Director elects to receive payment of the Annual
Units in Common Stock, any partial unit resulting in the calculation above will
be settled in cash.



          (g) Commencement of Payment of Deferred Benefit Attributable to Deferred
Director’s Fees. Payment of a Non-Employee Director’s Deferred Benefit
attributable to any portion of the Deferred Benefit representing Director’s Fees shall
commence thirty days after the earlier to occur of:





          (i) termination of service as a member of the Board; and




          (ii) the date specified in the Deferral Election Form executed by
the Non-Employee Director. For the avoidance of doubt, if the Non-
Employee Director’s termination of service as a member of the Board occurs
prior to the date specified in the Deferral Election Form executed by the
Non-Employee Director, payment of the portion of the Non-Employee Director’s
Deferred Benefit representing Director’s Fees shall commence thirty days
after such termination of service as a member of the Board.



          (h) Commencement of Payment of Annual Units. Payment of a Non-Employee
Director’s Annual Units shall commence thirty days after termination of service as a
member of the Board.




          (i) Death. In the event of a Non-Employee Director’s death, the
Non-Employee Director’s entire Deferred Benefit (including any unpaid portion thereof
corresponding to installments not yet paid at the time of death), to the extent not
distributed earlier pursuant to Section 5(g), will be distributed in a lump sum to the
Non-Employee Director’s Beneficiary sixty days after the Non-Employee Director’s date
of death.




          (j) Restrictions on Transfer. The Company shall pay all Deferred Benefits
payable under the Plan only to the Non-Employee Director or Beneficiary designated
under the Plan to receive such amounts. Neither a Non-Employee Director nor his
Beneficiary shall have any right to anticipate, alienate, sell, transfer, assign,
pledge, encumber or change any benefits to which he may become entitled under the Plan,
and any attempt to do so shall be void. A Deferred Benefit shall not be subject to
attachment, execution by levy, garnishment, or other legal or aquitable process for a
Non-Employee Director’s or Beneficiary’s debts or other obligations.




          (k) Special Election. Notwithstanding any other provision of the Plan, in
accordance with Question and Answer 19(c) of Internal Revenue Service Notice 2005-1 on
or before December 31, 2005, a Non-Employee Director may make a new payment election
with respect to the form of payment of the portion of the Non-Employee Director’s
Deferred Benefits representing deferred Director’s Fees earned, and Annual Units
awarded, between January 1, 2005 and the date such new payment election is effective.
Any such new payment election shall specify the form of payment, single lump sum or
installments, as described in Section 5(f)(ii) and

9









 








shall govern the form of payment of
Director’s Fees earned and Annual Units awarded during all subsequent Deferral Periods
unless changed in accordance with Section 5(a)(ii).




     6. Designation of Beneficiary.



          (a) Beneficiary Designations. Each Non-Employee Director may designate a
Beneficiary to receive any Deferred Benefit due under the Plan on the Non-Employee
Director’s death by executing a Beneficiary Designation Form.




          (b) Change of Beneficiary Designation. A Non-Employee Director may change
an earlier Beneficiary designation by executing a later Beneficiary
Designation Form and delivering it to the Committee. The execution of a Beneficiary
Designation Form and its receipt by the Committee revokes and rescinds any prior
Beneficiary Designation Form.




     7. Recapitalization or Reorganization.



          (a) Authority of the Company and Stockholders. The existence of the Plan
shall not affect or restrict in any way the right or power of the Company or the
stockholders of the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company’s capital structure or its business, any
merger or consolidation of the Company, any issue of stock or of options, warrants or
rights to purchase stock or of bonds, debentures, preferred or prior preference stocks
having rights superior to or affecting the Common Stock or the rights thereof or which
are convertible into or exchangeable for Common Stock, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar character or
otherwise.




          (b) Change in Capitalization. Notwithstanding any other provision of the
Plan, in the event of any change in the outstanding Common Stock by reason of a stock
dividend, recapitalization, reorganization, merger, consolidation, stock split,
combination or exchange of shares (a “Change in Capitalization”): (i) such
proportionate adjustments as may be necessary (in the form determined by the Committee
in its sole discretion) to reflect such change shall be made to prevent dilution or
enlargement of the rights of Non-Employee Directors under the Plan with respect to the
aggregate number of shares of Common Stock authorized to be awarded under the Plan, the
number of Phantom Stock Units credited to a Non-Employee Director’s Deferred
Compensation Account and the number of Annual Units to be awarded pursuant to Section
5(b), and (ii) the Committee may make such other adjustments, consistent with the
foregoing, as it deems appropriate in its sole discretion.




          (c) Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, all Deferred Benefits credited to the Non-Employee
Director’s Deferred Compensation Account as of the date of the consummation of a
proposed dissolution or liquidation shall be paid in cash to the Non-Employee Director
or, in the event of death of the Non-Employee Director prior to payment, to the
Beneficiary thereof on the date of the consummation of such proposed action. The cash
amount paid for each Phantom Stock Unit shall be the Fair Market Value of a share of
Common Stock as of the date of the consummation of such proposed action.




     8. Termination and Amendment of the Plan.



10









 





          (a) Termination. Unless terminated earlier in accordance with Section
8(b), the Plan shall terminate on the tenth anniversary of the Effective Date.
Following the tenth anniversary of the Effective Date, no further Director’s Fees or
Annual Units may be deferred by a Non-Employee Director but any amounts deferred
prior to the date of such termination shall be paid in accordance with the Deferral
Election Form.




          (b) General Power of Board. Notwithstanding anything herein to the
contrary, the Board may at any time and from time to time terminate, modify, suspend or
amend the Plan in whole or in part and settle all Phantom Stock Units in shares of
Common Stock; provided, however, that no such termination, modification, suspension or
amendment shall be effective without stockholder approval if such approval is required
to comply with any applicable law or stock exchange rule; and, provided further, that
the Board may not, without stockholder approval, increase the maximum number of shares
issuable under the Plan, except as provided in Section 7(b) above.




     9. Miscellaneous.



          (a) No Right to Reelection. Nothing in the Plan shall be deemed to create
any obligation on the part of the Board to nominate any of its members for reelection
by the Company’s stockholders, nor confer upon any Non-Employee Director the right to
remain a member of the Board for any period of time, or at any particular rate of
compensation.




          (b) Unfunded Plan.





          (i) Generally. This Plan is unfunded. Amounts payable
under the Plan will be satisfied solely out of the general assets of the
Company subject to the claims of the Company’s creditors.




          (ii) Deferred Benefits. A Deferred Benefit represents at
all times an unfunded and unsecured contractual obligation of the Company and
each Non-Employee Director or Beneficiary will be an unsecured creditor of the
Company. No Non-Employee Director, Beneficiary or any other person shall have
any interest in any fund or in any specific asset of the Company by reason of
any amount credited to him hereunder, nor shall any Non-Employee Director,
Beneficiary or any other person have any right to receive any distribution
under the Plan except as, and to the extent, expressly provided in the Plan.
The Company will not segregate any funds or assets for Deferred Benefits or
issue any notes or security for the payment of any Deferred Benefits. Any
reserve or other asset that the Company may establish or acquire to assure
itself of the funds to provide benefits under the Plan shall not serve in any
way as security to any Non-Employee Director, Beneficiary or other person for
the performance of the Company under the Plan.



          (c) Other Compensation Arrangements. Benefits received by a Non-Employee
Director pursuant to the provisions of the Plan shall not be included in, nor have any
effect on, the determination of benefits under any other arrangement provided by the
Company.




          (d) Securities Law Restrictions. All certificates for shares of Common
Stock delivered under the Plan shall be subject to such stock-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations, and
other requirements of the

11









 








Securities and Exchange Commission or any exchange upon which
the Common Stock is then listed, and any applicable federal or state securities law,
and the Committee may cause a legend or legends to be put an any such certificates to
make appropriate reference to such restrictions. No shares of Common Stock shall be
issued hereunder unless the Company shall have determined that such issuance is in
compliance with, or pursuant to an exemption from, all applicable federal and state
securities laws.




          (e) Expenses. The costs and expenses of administering the Plan shall be
borne by the Company.




          (f) Applicable Law. Except as to matters of federal law, the Plan and all
actions taken thereunder shall be governed by and construed in accordance with the laws
of the State of Delaware without giving effect to conflicts of law principles.




          (g) Effective Date. The Plan was effective as of the Effective Date,
subject to the approval thereof by the stockholders of the Company at the Annual
Meeting held on such date. The Plan was amended and restated, effective November 18,
2004, without further approval by the stockholders, to provide for Annual Units. The
Plan was further amended and restated, without approval by the stockholders, effective
January 1, 2005, to allow Non-Employee Directors to make the investment elections
provided for in Section 5(d) hereof and to allow for payment of deferred Director’s
Fees to be made in cash or in shares of Common Stock.




          (h) Compliance with Section 409A of the Code. To the extent applicable, it
is intended that this Plan comply with the provisions of Section 409A of the Code. The
Plan shall be administered in a manner consistent with this intent, and any provision
that would cause the Plan to fail to satisfy Section 409A of the Code shall have no
force and effect until amended to comply with Section 409A (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 Non-Employee Directors). 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 by the
U.S. Department of the Treasury or the Internal Revenue Service. Notwithstanding the
foregoing, any Deferred Benefits under this Plan that qualify for “grandfathered
status” under Section 409A of the Code because such benefits were earned and vested
prior to January 1, 2005 shall continue to be governed by the law applicable to
nonqualified deferred compensation prior to the addition of Section 409A to the Code
and, except as hereinafter provided, shall be subject to the terms and conditions
specified in the Plan as in effect prior to January 1, 2005. The terms and conditions
of the Plan as amended and restated as of January 1, 2005 relating to (i) the deemed
investment of Director’s Fees and Annual Units among Phantom Stock Units and the
Investment Funds and (ii) the Non-Employee Director’s
election to receive payment of any portion of the Deferred Benefit representing
deferred Director’s Fees in cash or shares of Common Stock shall govern any Deferred
Benefits under this Plan that qualify for “grandfathered status” under Section 409A
of the Code.





12