Exhibit 4.2


 


COMPASS MINERALS INTERNATIONAL, INC.


DIRECTORS’ DEFERRED COMPENSATION PLAN


 


Effective as of October 1, 2004


 


The Compass Minerals
International, Inc. Directors’ Deferred Compensation Plan (as it may be amended
from time to time, the “Plan”) has been adopted by Compass Minerals
International, Inc., a corporation organized under the laws of the state of
Delaware (the “Company”), effective as of October 1, 2004, for the
benefit of its eligible non-employee directors.


 


ARTICLE I.

DEFINITIONS


 


Section 1.1                                      “Account”
shall mean the bookkeeping account created by the Company pursuant to
Article III of this Plan in accordance with an election by a Director to
receive deferred cash compensation under Article II hereof.


 


Section 1.2                                      “Affiliate”
shall mean with respect to any Person, any other Person that, directly or
indirectly through one or more intermediaries Controls, is Controlled by, or is
under common Control with, such Person and/or one or more Affiliates
thereof.  The term “Control” includes,
without limitation, the possession, directly or indirectly, of the power to
direct the management and policies of a Person, whether through the ownership
of voting securities, by contract or otherwise. 
The term “Affiliate” shall not include at any time any portfolio
companies of Apollo Management V, L.P. or its Affiliates.


 


Section 1.3                                      “Board”
shall mean the Board of Directors of the Company.


 


Section 1.4                                      “Change
in Control” shall mean a change in ownership or control of the Company
effected through a transaction or series of transactions (other than an
offering of Common Stock to the general public through a registration statement
filed with the Securities and Exchange Commission) whereby any “person” or
related “group” of “persons” (as such terms are used in Sections 13(d) and
14(d)(2) of the Exchange Act) (other than the Company, any of its subsidiaries,
an employee benefit plan maintained by the Company or any of its subsidiaries,
a Principal Stockholder or a “person” that, prior to such transaction, directly
or indirectly controls, is controlled by, or is under common control with, the
Company or a Principal Stockholder) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company possessing more than 25% of the total combined voting
power of the Company’s securities outstanding immediately after such
acquisition.


 


Section 1.5                                      “Common
Stock” shall mean the common stock of the Company, par value $0.01 per
share.


 


Section 1.6                                      “Company”
shall have the meaning set forth in the recitals hereto.


 


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Section 1.7                                      “Deferred
Stock Unit” shall mean the right of a Director to receive one share of
Common Stock upon a distribution of his Account in accordance with
Article IV.


 


Section 1.8                                      “Deferred
Fees” shall have the meaning set forth in Section 3.1.


 


Section 1.9                                      “Director”
shall mean a member of the Board who is not an employee of the Company or any
of its subsidiaries.


 


Section 1.10                                “Exchange Act” means
the Securities Exchange Act of 1934, as amended.


 


Section 1.11                                “Fair
Market Value” of a share of Common Stock as of any date shall be the
average of the high and low trading prices for a share of Common Stock as
reported on the New York Stock Exchange (or on any national securities exchange
on which the Stock is then listed) for the immediately preceding date or, if no
such prices are reported for that date, the average of the high and low trading
prices on the next preceding date for which such prices were reported.


 


Section 1.12                                “Fees”
shall mean amounts payable to a Director for serving as a member of the Board,
including without limitation any (a) annual or other periodic retainer
payments; (b) fees payable for meeting attendance; (c) fees payable for
committee membership; and (d) fees payable for Board or committee chairmanship.


 


Section 1.13                                “Fund”
shall have the meaning set forth in Section 3.4.


 


Section 1.14                                “Plan”
shall have the meaning set forth in the recitals hereto.


 


Section 1.15                                “Principal
Stockholders” shall mean Apollo Investment Fund V, L.P., Apollo Overseas
Partners V, L.P., or any investment fund managed by Apollo Management V, L.P.
or any of its Affiliates, and any of their successors and assigns.


 


Section 1.16                                “Year”
shall mean calendar year.


 


ARTICLE II.

ELECTION TO DEFER


 


Section 2.1                                      A
Director may elect, on or before December 31 of any Year, to defer payment
of all or a specified part of all Fees earned during the Year following such
election and in any succeeding Years (until the Director ceases to be a
Director); provided, however, that with respect to Year 2004 a Director may
elect, within thirty days after the effective date of this Plan, to defer all
or a specified part of all Fees payable on or after the effective date of this
Plan.  Any person who shall become a
Director during any Year, and who was not a Director of the Company on the
preceding December 31, may elect, no later than seven days after the
Director’s term begins, to defer payment of all or a specified part of such
Fees payable during the remainder of such Year and for any succeeding
Years.  Any Fees deferred pursuant to
this Paragraph shall be paid to the Director at the time(s) and in the manner
specified in Article IV hereof, as designated by the Director.


 


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Section 2.2                                      The
election to participate in the Plan and manner of payment shall be designated
by submitting a deferral election form in substantially the form attached
hereto as Exhibit A to the Chief Financial Officer of the Company.


 


Section 2.3                                      The
election shall continue from Year to Year unless the Director terminates it by
written request delivered to the Secretary of the Company prior to the
commencement of the Year for which the termination is first effective.


 


ARTICLE III.

DEFERRED COMPENSATION ACCOUNTS


 


Section 3.1                                      The
Company shall maintain separate bookkeeping accounts for the Fees deferred by
each Director (the “Deferred Fees”).


 


Section 3.2                                      As
of the date that any Deferred Fees would otherwise have been payable to a
Director, the Company shall credit such Director’s Account with that number of
Deferred Stock Units equal to the ratio of (a) the aggregate value of such
Deferred Fees, to (b) the Fair Market Value per share of Common Stock as of such
date.


 


Section 3.3                                      As
of the date the Company pays any dividend (whether in cash or in kind) on
shares of Common Stock, each Director’s Deferred Compensation Account shall be
credited with that number of Deferred Stock Units equal to the ratio of (a) the
aggregate value of the dividend that would have been payable on the Deferred
Stock Units held by the Director immediately prior to such payment date had the
shares of Common Stock represented by such Deferred Stock Units been
outstanding as of such payment date to (b) the Fair Market Value per share of
Common Stock as of such date.


 


Section 3.4                                      Deferred
Fees and any deemed earnings with respect thereto shall be held in the general
assets of the Company and no separate fund or trust shall be created or moneys
set aside on account of the Account.  To
the extent that any person acquires a right to receive distributions from the
Company under the Plan, such right shall be no greater than the right of any
unsecured general creditor of the Company. 
Notwithstanding the foregoing, the Board, in its discretion, may elect
to establish a fund (the “Fund”) containing assets equal to the amounts
credited to Directors’ Accounts, and may elect in its discretion to designate a
trustee to hold the Fund in trust; provided, however,
that such Fund shall remain a general asset of the Company subject to the
rights of creditors of the Company in the event of the Company’s bankruptcy or
insolvency as defined in any such trust.


 


ARTICLE IV.

PAYMENT OF DEFERRED COMPENSATION


 


Section 4.1                                      Subject
to Section 4.4, amounts contained in a Director’s Account shall be
distributed as the Director’s election (made pursuant to Section 2.2)
shall provide.  Notwithstanding the
foregoing, all distributions from the Plan shall be made in the form of whole
shares of Common Stock with fractional shares paid in cash.


 


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Section 4.2                                      Each
Director shall have the right to designate a beneficiary who is to succeed to
his or her right to receive payments hereunder in the event of death.  Any designated beneficiary shall receive
payments in the same manner as the Director if he or she had lived.  In case of a failure of designation or the
death of a designated beneficiary without a designated successor, the balance
of the amounts contained in the Director’s Account shall be paid, in accordance
with Section 4.1, to the Director’s or former Director’s estate in full on
the first day of the Year following the Year in which he or she dies.  No designation of beneficiary or change in
beneficiary shall be valid unless it is in writing signed by the Director and
filed with the Secretary of the Company.


 


Section 4.3                                      Notwithstanding
the other provisions of the Plan to the contrary, a Director may request an
early withdrawal from his Account at any time by filing a written request with
the Board or its designee.  The Board may
approve or disapprove such request in its discretion.  If any such withdrawal is approved by the
Board, distribution shall be made to the Director within 30 days following the
date of approval.  Any amount withdrawn
under this Section 4.3 shall be charged with a 10% early withdrawal
penalty which shall be withheld from the amount withdrawn and shall be forfeited.  The Company shall have no further obligation
to the Director or any of his beneficiaries with respect to amounts forfeited
pursuant to this Section 4.3.


 


Section 4.4                                      Notwithstanding
the other provisions of the Plan to the contrary, if a Change in Control occurs
prior to the complete distribution of a Director’s Account, then any portion of
such Account that has not theretofore been distributed shall be distributed to
the Director (or, as applicable, his beneficiary) immediately prior to the
Change in Control.


 


ARTICLE V.

ADMINISTRATION; AMENDMENT


 


Section 5.1                                      The
Plan shall be administered by the Board. 
The Board may delegate certain administrative authority to a committee
or subcommittee of the Board or to one or more employees of the Company, but
shall retain the ultimate responsibility for the interpretation of, and
amendments to, the Plan.  Members of the
Board shall not be liable for any of their actions or determinations made in
good faith with respect to the administration of the Plan.  Except to the extent superseded by the laws
of the United States, the laws of the State of Delaware, without regard to its
conflict of laws principles, shall govern in all matters relating to the
Plan.  All expenses related to plan
administration shall be paid by the Company. 
All decisions made by the Board with respect to issues hereunder shall
be final and binding on all parties.


 


Section 5.2                                      In
the event of any stock dividend, stock split, combination or exchange of
shares, merger, consolidation, spin-off, recapitalization or any other
corporate event affecting the Common Stock or the share price of the Common
Stock, the Board may, in its sole discretion, make such equitable adjustments,
if any, with respect to the Directors’ Accounts (including, without limitation,
adjusting the number of Deferred Stock Units credited thereto and/or the kind
of securities represented thereby), as the Board may deem necessary or


 


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appropriate to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under this Plan and to reflect such changes.


 


Section 5.3                                      Except
to the extent required by law, the right of any Director or any beneficiary to
any benefit or to any payment hereunder shall not be subject in any manner to
attachment or other legal process for the debts of such Director or
beneficiary, and any such benefit or payment shall not be subject to
alienation, sale, transfer, assignment or encumbrance.


 


Section 5.4                                      The
Plan may be amended, suspended or terminated in whole or in part from time to
time by the Board except that no amendment, suspension, or termination shall
apply to the payment to any Director or beneficiary of a deceased Director of
any amounts previously credited to a Director’s Account.


 


*  *  * 
*  *


 


I hereby certify that the
Plan was adopted by the Board of Directors of Compass Minerals International,
Inc. on August 12, 2004, effective as of October 1, 2004.


 


Executed on
September 13, 2004.


 


	
   

  	
   

  	
   

  
	
   

  	
  Rodney Underdown

  



 


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