Document:

Exhibit 10.3

 

Ingredion Incorporated

Restricted Stock Units Award Agreement

 

Ingredion Incorporated (the “Company”) has granted you an  award of Restricted Stock Units (the “Award”)  under the Ingredion Incorporated Stock Incentive Plan (the “Plan”).  The Award represents the right to receive shares of Company Common Stock in the future.  The grant date of the Award and the number of Restricted Stock Units covered by this Award are set forth in the document you have received entitled “Notice of Grant of Restricted Stock Units”.  The Notice of Grant of Restricted Stock Units and these terms and conditions collectively constitute the Award Agreement for the Award.  This Award Agreement and the Plan together govern your rights under the Plan and set forth all of the conditions and limitations affecting such rights.

 

Capitalized terms used in this Award Agreement shall have the meanings ascribed to them in the Plan or in this Award Agreement. If there is any inconsistency between the terms of this Award Agreement and the terms of the Plan, except as otherwise expressly provided in the Plan, the Plan’s terms shall supersede and replace the conflicting terms of this Award Agreement.

 

Overview of Your Grant

 

1.              General.  Except as provided below, you shall not be entitled to any privileges of ownership with respect to the shares of Common Stock subject to the Award unless and until, and only to the extent, the Restricted Stock Units subject to the Award are settled and you become a stockholder of record with respect to such shares as provided herein.  The Company agrees to reserve and keep available, either in treasury or out of its authorized but unissued shares of Common Stock, the full number of shares subject to the Award.

 

2.              Vesting Period. The Restricted Stock Units awarded and/or credited under this Award Agreement will become fully vested on            , 20   (the “Vesting Date”).  During the period beginning on the Grant Date and ending on the Vesting Date (the “Vesting Period”) the Restricted Stock Units awarded and/or credited under this Award Agreement may not be sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or disposed of, except as provided in the Plan or this Agreement.  If all of the terms and conditions of the Award Agreement and the Plan are met on the Vesting Date, subject to Section 10 of this Award Agreement, then you will be issued certificates for the number of shares of Common Stock subject to the Restricted Stock Units then held by you which were issued and/or credited to you under this Award Agreement.  The issuance shall occur upon the Vesting Date or as soon as administratively practicable thereafter (but in no event later than thirty (30) days following the Vesting Date).

 

3.               Termination of Employment: In the event that you terminate employment with the Company, its affiliates, and/or its Subsidiaries for any reason, or in the event that the Company, its affiliates, and/or its Subsidiaries terminates your employment with or without Cause, all of the unvested Restricted Stock Units you hold at the time your employment terminates shall be forfeited to the Company, subject to Section 3.3 of the Plan and provided, that in the event your employment with the Company is terminated due to (a) death, (b) disability or (c) retirement (i) on or after age 55 with a minimum of 10 years employment with or service to the Company or its Subsidiaries or affiliates or (ii) on or after age 62, a prorated portion of the Restricted Stock Units awarded and/or credited under this Award Agreement shall vest.  Such proration shall be calculated by multiplying the number of Restricted Stock Units awarded and/or credited under this Award Agreement by a fraction, the numerator of which is the number of full months that have elapsed between the Grant Date and your termination date and the denominator of which is 36.

 

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4.               Voting Rights and Dividends.  You do not have the right to vote any shares of Common Stock or to receive dividends on them prior to the date such shares are to be issued to you pursuant to the terms of this Award Agreement.  As of each date on which dividends are paid on the Common Stock, the Company shall credit to the Award additional Restricted Stock Units, the number of which shall be determined by multiplying the amount of such dividend per share of Common Stock by the number of shares of Common Stock then subject to the Award, and dividing the product thereof by the Fair Market Value of a share of Common Stock on the applicable dividend payment date.

 

5.              Income Tax and Social Insurance Contribution Withholding: Prior to the issuance or delivery of any shares of Common Stock, the Company or the Subsidiary or affiliate that employs you (the “Employer”) (if applicable) shall have the right to require you to pay any U.S. Federal, state, local or other taxes (including non-U.S. taxes, social insurance, payroll tax, payment on account or other tax-related withholding) (“Tax-Related Items”) which may be required to be withheld or paid in connection with the Restricted Stock Units.  Such obligation shall be satisfied either:

 

(a)                                                  by the Company by withholding whole shares of Common Stock which would otherwise be delivered to you, having an aggregate Fair Market Value determined as of the date the obligation to withhold or pay taxes arises in connection with the Restricted Stock Units (the “Tax Date”), or by the Company or Employer withholding an amount of cash which would otherwise be payable to you, in the amount necessary to satisfy any such obligation; or

 

(b)                                    by you by any of the following means: (A) a cash payment to the Company or the Employer in the amount necessary to satisfy any such obligation, (B) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of shares of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation, (C) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to you, equal to the amount necessary to satisfy any such obligation, or (D) any combination of (A), (B) and (C).

 

Shares of Common Stock to be delivered or withheld may not have an aggregate Fair Market Value, determined as of the Tax Date, in excess of the amount determined by applying the minimum statutory withholding rate (as determined by the Company in good faith and in its sole discretion).  Any fraction of a share of Common Stock which would be required to satisfy such an obligation shall be disregarded and you shall pay the remaining amount in cash.

 

Regardless of any action the Company or the Employer (if applicable) takes with respect to any or all Tax-Related Items, you acknowledge and agree that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or the Employer (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Units or the shares of Common Stock issued upon vesting of the Units, and (b) do not commit to structure the terms of the Award (or any aspect of the Units) to reduce or eliminate your liability for Tax-Related Items.

 

6.                     Change of Capitalization:  If, prior to the time the restrictions imposed by Section 2 of this Award Agreement on the Restricted Stock Units awarded hereunder lapse, the Company shall be reorganized or consolidated or merged with another corporation, the appropriate amount of any stock, securities or other property exchangeable for shares of Common Stock pursuant to such reorganization, consolidation or merger shall be appropriately substituted for the shares of Common Stock then subject to the Restricted Stock Units issued and/or credited hereunder.

 

7.                     Continuation of Employment: This Award Agreement shall not confer upon you any right to continuation of employment by the Company, its affiliates, and/or its Subsidiaries, nor shall this Award Agreement interfere in any way with the Company’s, its affiliates’, and/or its Subsidiaries’ right to

 

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terminate your employment at any time, except to the extent expressly provided otherwise in a written agreement between you and the Company, an affiliate or Subsidiary or prohibited by law.

 

8.                     No Right to Future Grants; No Right of Employment; Extraordinary Item: In accepting the grant, you acknowledge that:  (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, suspended or terminated by the Company at any time, as provided in the Plan and this Award Agreement; (b) the grant of the Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future grants of Restricted Stock Units, or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units have been granted repeatedly in the past; (c) all decisions with respect to future grants, if any, will be at the sole discretion of the Company; (d) your participation in the Plan is voluntary; (e) the Restricted Stock Units and any Common Stock subject to the Restricted Stock Units are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (f) the grant of Restricted Stock Units is provided for future services to the Company and its Affiliates and is not under any circumstances to be considered compensation for past services; (g) in the event that you are an employee of an affiliate or Subsidiary of the Company, the grant will not be interpreted to form an employment contract or relationship with the Company; and furthermore, the grant will not be interpreted to form an employment contract with the affiliate or Subsidiary that is your employer; (h) the future value of the underlying shares of Common Stock is unknown and cannot be predicted with certainty; (i) no claim or entitlement to compensation or damages arises from forfeiture or termination of the Restricted Stock Units or diminution in value of the Restricted Stock Units or the shares of Common Stock and you irrevocably release the Company, its affiliates and/or its Subsidiaries from any such claim that may arise; and (j) in the event of involuntary termination of your employment, your right to receive Restricted Stock Units and vest in Restricted Stock Units and/or Common Stock under the Plan, if any, will terminate in accordance with the terms of the Plan and will not be extended by any notice period mandated under local law; furthermore, your right to vest in the Restricted Stock Units after such termination of employment, if any, will be measured by the date of termination of your active employment and will not be extended by any notice period mandated under local law.

 

9.                     Requirements of Law: The granting of Restricted Stock Units under the Plan, and the issuance or delivery of any certificate or certificates for Common Stock upon the vesting of Restricted Stock Units shall be subject to, and conditioned upon, satisfaction of all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

 

10.              Alternative Form of Settlement in Non-U.S. Jurisdictions:  Notwithstanding anything in the Agreement to the contrary, if you are resident or employed outside of the United States, the Company may, in its sole discretion, settle the Restricted Stock Units in the form of a cash payment to the extent settlement in shares of Common Stock: (i) is prohibited under local law; (ii) would require you, the Company and/or its Subsidiaries or affiliates to obtain the approval of any governmental and/or regulatory body in your country of residence (or country of employment, if different); (iii) would result in adverse tax consequences for you or the Company; or (iv) is administratively burdensome.  Alternatively, the Company may, in its sole discretion, settle the Restricted Stock Units in the form of shares of Common Stock but require you to immediately sell such shares (in which case, this Award Agreement shall give the Company the authority to issue sales instructions on your behalf).

 

11.              Compliance with Local Law:  If you are resident or employed outside of the United States, as a condition to the grant of Restricted Stock Units, you agree to repatriate all payments attributable to the shares of Common Stock and/or cash acquired under the Plan in accordance with local foreign exchange rules and regulations in your country of residence (and country of employment, if different).  In addition, you agree to take any and all actions, and consent to any and all actions taken by the Company and the Company’s Subsidiaries and affiliates, as may be required to allow the Company and the Company’s Subsidiaries and affiliates to comply with local laws, rules and regulations in your country of residence 

 

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                               (and country of employment, if different).  Finally, you agree to take any and all actions as may be required to comply with your personal legal and tax obligations under local laws, rules and regulations in your country of residence (and country of employment, if different).

 

12.              Employee Data Privacy. You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this document by and among, as applicable, the Company, its affiliates and its Subsidiaries for the exclusive purpose of implementing, administering and managing your participation in the Plan.

 

You understand that the Company (and/or the Employer, if applicable) holds certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, email address, family size, marital status, sex, beneficiary information, emergency contacts, passport/visa information, age, language skills, drivers license information, nationality, C.V. (or resume), wage history, employment references, social insurance number or other identification number, salary, job title, employment or severance contract, current wage and benefit information, personal bank account number, tax related information, plan or benefit enrollment forms and elections, option or benefit statements, any shares of stock or directorships in the company, details of all options or any other entitlements to shares of stock awarded, canceled, purchased, vested, unvested or outstanding for purpose of managing and administering the Plan (“Data”).

 

You understand that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country.  You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting Corporate Human Resources.

 

You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom you may elect to deposit any shares of Common Stock acquired.  You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan.

 

You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Corporate Human Resources.

 

You understand, however, that refusing or withdrawing your consent may affect your ability to participate in the Plan.  For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact Corporate Human Resources.

 

13.             Compliance with Section 409A of the Code.  It is intended that this Award Agreement and the Plan be exempt from the provisions of section 409A of the Code to the maximum extent permissible under law.  To the extent section 409A of the Code applies to this Award Agreement and the Plan, it is intended that this Award Agreement and the Plan comply with the provisions of section 409A of the Code.  This Award Agreement and the Plan shall be administered and interpreted in a manner consistent with this intent.  In the event that this Award Agreement or the Plan does not comply with section 409A of the Code (to the extent applicable thereto), the Company shall have the authority to amend the terms of this Award Agreement or the Plan (which amendment may be retroactive to the extent permitted by section 409A of the Code and may be made by the Company without your consent) to avoid excise taxes and other penalties under section 409A of the Code, to the extent possible. Notwithstanding the foregoing, no particular tax result for you with respect to any income recognized by you in connection with this Award Agreement is guaranteed, and you solely shall be responsible for any taxes, penalties, interest or other losses or expenses incurred by you under section 409A of the Code in connection with this Award

 

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Agreement.  To the extent any amounts under this Award Agreement are payable by reference to your “termination of employment,” such term shall be deemed to refer to your “separation from service,” within the meaning of section 409A of the Code.  Notwithstanding any other provision in this Plan, if you are a “specified employee,” as defined in section 409A of the Code, as of the date of your separation from service, then to the extent any amount payable under this Award Agreement (i) constitutes the payment of nonqualified deferred compensation, within the meaning of section 409A of the Code, (ii) is payable upon your separation from service and (iii) under the terms of this  Award Agreement would be payable prior to the six-month anniversary of your separation from service, such payment shall be delayed until the earlier to occur of (a) the six-month anniversary of your separation from service or (b) the date of your death.

 

14.              Administration: This Award Agreement and your rights hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Board or the Committee may adopt for administration of the Plan.

 

15.              Not a Public Offering in Non-U.S. Jurisdictions:  If you are resident or employed outside of the United States, neither the grant of the Restricted Stock Units under the Plan nor the issuance of the underlying shares of Common Stock upon vesting of the Restricted Stock Units is intended to be a public offering of securities in your country of residence (and country of employment, if different).  The Company has not submitted any registration statement, prospectus or other filings to the local securities authorities in jurisdictions outside of the United States unless otherwise required under local law.

 

16.              Governing Law:  All questions concerning the construction, validity and interpretation of this Award Agreement and the Plan shall be governed and construed according to the laws of the State of Delaware, without regard to the application of the conflicts of laws provisions thereof.  Any disputes regarding this Award or the Plan shall be brought only in the state or federal courts of the State of Delaware.

 

17.              Addendum to Award Agreement:  Notwithstanding any provisions of this Award Agreement to the contrary, the Restricted Stock Units shall be subject to such special terms and conditions for your country of residence (and country of employment, if different), as the Company may determine in its sole discretion and which shall be set forth in an addendum to these terms and conditions (the “Addendum”).  If you transfer your residence and/or employment to another country, any special terms and conditions for such country will apply to the Restricted Stock Units to the extent the Company determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable in order to comply with local laws, rules and regulations, or to facilitate the operation and administration of the Award and the Plan (or the Company may establish additional terms and conditions as may be necessary or advisable to accommodate your transfer). In all circumstances, the Addendum shall constitute part of these terms and conditions.

 

18.              Electronic Delivery:  The Company may, in its sole discretion, decide to deliver any documents related to the Restricted Stock Units or other awards granted to you under the Plan by electronic means.  You hereby consent to receive such documents be electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party-designated by the Company.

 

19.              English Language:  If you are resident and/or employed outside of the United States, you acknowledge and agree that it is your express intent that the Award Agreement, the Plan and all other documents, notices and legal proceedings entered into, given or instituted pursuant to the Restricted Stock Units, be drawn up in English.  If you have received the Award Agreement, the Plan or any other documents related to the Restricted Stock Units translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.

 

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20.       Additional Requirements:  The Company reserves the right to impose other requirements on the Restricted Stock Units, any shares of Common Stock acquired pursuant to the Restricted Stock Units, and your participation in the Plan, to the extent the Company determines, in its sole discretion, that such other requirements are necessary or advisable in order to comply with local laws, rules and regulations, or to facilitate the administration of the Award and the Plan.  Such requirements may include (but are not limited to) requiring you to sign any agreements or undertakings that may be necessary to accomplish the foregoing.

 

	
Ingredion   Incorporated
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Title:
    	
 
    

 

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Ingredion Incorporated

Addendum to the Restricted Stock Units Award Agreement

 

In addition to the terms of the Plan and the Award Agreement, the Restricted Stock Units are subject to the following additional terms and conditions.  All defined terms contained in this Addendum shall have the same meaning as set forth in the Plan and the Award Agreement.  Pursuant to Section 17 of the Award Agreement, if you transfer your residence and/or employment to another country reflected in an Addendum, the additional terms and conditions for such country (if any) will apply to you to the extent the Company determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable in order to comply with local laws, rules and regulations, or to facilitate the operation and administration of the Award and the Plan (or the Company may establish additional terms and conditions as may be necessary or advisable to accommodate your transfer).

 

AUSTRALIA

 

Shareholder Approval Requirement.  To the extent you are an individual whose termination benefits are subject to Sections 200 to 200J of the Corporations Act 2001, the Award is contingent upon the Company’s satisfaction of the shareholder approval requirements thereunder.  To the extent the Company does not or is unable to satisfy such requirements, your Award will be null and void, and you will not have any claims against the Company to receive any payment or other benefits in lieu of the Award.

 

CANADA

 

1.                                      Settlement in Shares.  Notwithstanding anything to the contrary in the Award Agreement, Addendum or the Plan, your Award shall be settled only in shares of Common Stock (and may not be settled in cash).

 

2.                                      Use of English Language.  You acknowledge and agree that it is your express wish that this Award Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.  Vous reconnaissez et consentez que c’est votre souhait exprès qui cet accord, de meme que tous documents, toutes notifications et tous procédés légaux est entré dans, donné ou instituté conformément ci-annexé ou relatant directement ou indirectement ci-annexé, est formulé dans l’anglais.

 

CHILE

 

Private Placement.  In accordance with Circular 99 of 2001, from Chile’s Superintendence of Securities, the grant of the Restricted Stock Units hereunder is not intended to be a public offering of securities in Chile but instead is intended to be a private placement.  As a private placement, the Company has not submitted any registration statement, prospectus or other filings with the local securities authorities, and the Plan is not subject to the supervision of the local securities authorities.

 

FRANCE

 

Use of English Language.  You acknowledge and agree that it is your express wish that this Award Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.  Vous reconnaissez et consentez que c’est votre souhait exprès qui cet accord, de meme que tous documents, toutes notifications et tous procédés légaux est entré dans, donné ou instituté conformément ci-annexé ou relatant directement ou indirectement ci-annexé, est formulé dans l’anglais.

 

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MEXICO

 

1.                                      Commercial Relationship.  You expressly recognize that your participation in the Plan and the Company’s grant of Restricted Stock Units does not constitute an employment relationship between you and the Company.  You have been granted the Restricted Stock Units as a consequence of the commercial relationship between the Company and the Company’s affiliate in Mexico that employs you, and the Company’s local affiliate in Mexico is your sole employer.  Based on the foregoing, (a) you expressly recognize the Plan and the benefits you may derive from your participation in the Plan does not establish any rights between you and the Company’s affiliate in Mexico that employs you, (b) the Plan and the benefits you may derive from your participation in the Plan are not part of the employment conditions and/or benefits provided by the Company’s affiliate in Mexico that employs you, and (c) any modifications or amendments of the Plan by the Company, or a termination of the Plan by the Company, shall not constitute a change or impairment of the terms and conditions of your employment with the Company’s affiliate in Mexico that employs you.

 

2.                                      Extraordinary Item of Compensation.  You expressly recognize and acknowledge that your participation in the Plan is a result of the discretionary and unilateral decision of the Company, as well as your free and voluntary decision to participate in the Plan in accordance with the terms and conditions of the Plan, the Award Agreement and this Addendum.  As such, you acknowledge and agree that the Company may, in its sole discretion, amend and/or discontinue your participation in the Plan at any time and without any liability.  The value of this Award is an extraordinary item of compensation outside the scope of your employment contract, if any.  This Award is not part of your regular or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits, or any similar payments, which are the exclusive obligations of the Employer.

 

SINGAPORE

 

Securities Law Information.  The grant of the Award under the Plan is being made pursuant to the “Qualifying Person” exemption under section 273(1)(f) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (the “SFA”).  The Plan has not been and will not be lodged or registered as a prospectus with the Monetary Authority of Singapore and is not regulated by any financial supervisory authority pursuant to any legislation in Singapore.  Accordingly, statutory liability under the SFA in relation to the content of prospectuses would not apply.  You should note that, as a result, the Award is subject to section 257 of the SFA and you will not be able to make: (a) any subsequent sale of the shares of Common Stock underlying the Award in Singapore; or (b) any offer of such subsequent sale of the shares of Common Stock subject to the Award in Singapore, unless such sale or offer is made pursuant to the exemptions under Part XIII Division 1 Subdivision (4) (other than section 280) of the SFA.

 

SOUTH AFRICA

 

1.                                      Award Conditioned on South African Reserve Bank Approval.  If you are a local national employed in South Africa, the grant of the Award is conditioned upon the Company obtaining the approval for the grant of Restricted Stock Units under the Plan from the South African Reserve Bank.

 

2.                                      Withholding Taxes.  The following provision supplements Section 5 of the Award Agreement:

 

By accepting the Restricted Stock Units, you agree to notify the Employer of the amount of any gain realized upon vesting of the Restricted Stock Units.  If you fail to advise the Employer of the gain realized upon vesting of the Restricted Stock Units, you may be liable for a fine.  You will be responsible for paying any difference between the actual tax liability and the amount withheld.

 

3.                                      Exchange Control Obligations.  You are solely responsible for complying with applicable exchange control regulations and rulings (the “Exchange Control Regulations”) in South Africa.  As the Exchange Control Regulations change frequently and without notice, you should consult your legal advisor prior to the

 

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acquisition or sale of Shares under the Plan to ensure compliance with current Exchange Control Regulations.  Neither the Company nor any of its Subsidiaries or affiliates will be liable for any fines or penalties resulting from your failure to comply with applicable laws.

 

SPAIN

 

1.                                      Acknowledgement of Discretionary Nature of the Plan; No Vested Rights.  In accepting the Award, you acknowledge that you consent to participation in the Plan and have received a copy of the Plan.  You understand that the Company has unilaterally, gratuitously and in its sole discretion granted the Restricted Stock Units under the Plan to individuals who may be employees of the Company or its Subsidiaries throughout the world.  The decision is a limited decision that is entered into upon the express assumption and condition that any grant will not economically or otherwise bind the Company or any of its Subsidiaries on an ongoing basis.  Consequently, you understand that the Restricted Stock Units are granted on the assumption and condition that the Restricted Stock Units and the shares of Common Stock acquired upon vesting of the Restricted Stock Units shall not become a part of any employment contract (either with the Company or any of its Subsidiaries) and shall not be considered a mandatory benefit, salary for any purposes (including severance compensation) or any other right whatsoever.  In addition, you understand that this grant would not be made to you but for the assumptions and conditions referenced above. Thus, you acknowledge and freely accept that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, the Award shall be null and void.

 

You understand and agree that, as a condition of the grant of the Restricted Stock Units, subject to Section 3 of the Award Agreement, any unvested portion of the Restricted Stock Units as of the date you cease active employment will be forfeited without entitlement to the underlying shares of Common Stock or to any amount of indemnification in the event of the termination of employment by reason of, but not limited to, (i) material modification of the terms of employment under Article 41 of the Workers’ Statute or (ii) relocation under Article 40 of the Workers’ Statute.  You acknowledge that you have read and specifically accept the conditions referred to in the Award Agreement regarding the impact of a termination of employment on your Restricted Stock Units.

 

2.                                      Termination for Cause.  Notwithstanding anything to the contrary in the Plan or your Award Agreement, “Cause” shall be defined in the Plan, irrespective of whether the termination is or is not considered a fair termination (i.e., “despido procedente”) under Spanish legislation.

 

UNITED KINGDOM

 

1.                                      Income Tax and Social Insurance Contribution Withholding.  The following provision supplements Section 5 of the Award Agreement:

 

If payment or withholding of the income tax due in connection with the Restricted Stock Units is not made within ninety (90) days of the event giving rise to the income tax liability or such other period specified in Section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003 (the “Due Date”), the amount of any uncollected income tax paid by the Employer shall constitute a loan owed by you to the Employer, effective as of the Due Date.  You agree that the loan will bear interest at the then-current official rate of Her Majesty’s Revenue & Customs (“HMRC”), it shall be immediately due and repayable, and the Company or the Employer may recover it at any time thereafter by any of the means referred to in Section 5 of the Award Agreement.  Notwithstanding the foregoing, if you are a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities and Exchange Act of 1934, as amended), you shall not be eligible for a loan from the Company or the Employer to cover the income tax liability.  In the event that you are a director or executive officer of the Company and the income tax is not collected from or paid by you by the Due Date, the payment of any uncollected income tax and employee national insurance contributions (“NICs”) by the

 

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Employer may constitute a benefit  to you (the “Tax Benefit”) on which additional income tax and NICs will be payable.  If you are a director or executive officer of the Company, you will be responsible for paying and reporting any income tax due on the Tax Benefit directly to HMRC under the self-assessment regime, and the Employer will hold you liable for the Tax Benefit and the cost of any employee NICs due on the Tax Benefit that the Company or the Employer was obligated to pay and paid.  The Company or the Employer (as applicable) may recover the Tax Benefit and the cost of any such employee NICs from you at any time by any of the means referred to in Section 5 of the Award Agreement.

 

2.                                      Exclusion of Claim. You acknowledge and agree that you will have no entitlement to compensation or damages insofar as such entitlement arises or may arise from your ceasing to have rights under or to be entitled to the Award, whether or not as a result of the termination of your employment with the Company or its Subsidiaries or affiliates for any reason whatsoever (whether the termination is in breach of contract or otherwise), or from the loss or diminution in value of the Award.  Upon the grant of the Restricted Stock Units, you shall be deemed irrevocably to have waived any such entitlement.

 

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10Exhibit 10.1

 

CUBIC CORPORATION

 

2005 DEFERRED COMPENSATION PLAN

 

EFFECTIVE JANUARY 1, 2005,

 

AMENDED AND RESTATED JANUARY 1, 2013

 

 

Table of Contents

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 1 Definitions
    	
1
    
	
 
    	
 
    
	
1.1
    	
“Account Balance”
    	
1
    
	
1.2
    	
“Annual Deferral Amount”
    	
1
    
	
1.3
    	
“Annual Installment Method”
    	
1
    
	
1.4
    	
“Base Annual Salary”
    	
2
    
	
1.5
    	
“Beneficiary”
    	
2
    
	
1.6
    	
“Beneficiary Designation Form”
    	
2
    
	
1.7
    	
“Board”
    	
2
    
	
1.8
    	
“Bonus”
    	
2
    
	
1.9
    	
“Change in Control”
    	
2
    
	
1.10
    	
“Claimant”
    	
3
    
	
1.11
    	
“Code”
    	
3
    
	
1.12
    	
“Committee”
    	
3
    
	
1.13
    	
“Company”
    	
3
    
	
1.14
    	
“Compensation”
    	
3
    
	
1.15
    	
“Deferral Account”
    	
3
    
	
1.16
    	
“Deferral Amount”
    	
3
    
	
1.17
    	
“Director”
    	
3
    
	
1.18
    	
“Director Fees”
    	
3
    
	
1.19
    	
“Disability”
    	
3
    
	
1.20
    	
“Distribution Date”
    	
3
    
	
1.21
    	
“Election Form”
    	
4
    
	
1.22
    	
“Employee”
    	
4
    
	
1.23
    	
“Employers”
    	
4
    
	
1.24
    	
“ERISA”
    	
4
    
	
1.25
    	
“Fiscal Year”
    	
4
    
	
1.26
    	
“Inactive Participant”
    	
4
    
	
1.27
    	
“In-Service Distribution”
    	
4
    
	
1.28
    	
“Key Employee”
    	
4
    
	
1.29
    	
“Participant”
    	
4
    

 

i

 

	
1.30
    	
“Plan”
    	
4
    
	
1.31
    	
“Plan Agreement”
    	
4
    
	
1.32
    	
“Plan Year”
    	
5
    
	
1.33
    	
“Re-Deferral Election”
    	
5
    
	
1.34
    	
“Separation from Service”
    	
5
    
	
1.35
    	
“Termination Benefit”
    	
5
    
	
1.36
    	
“Unforeseeable Financial Emergency”
    	
5
    
	
 
    	
 
    
	
ARTICLE 2 Eligibility,   Selection, Enrollment
    	
5
    
	
 
    	
 
    
	
2.1
    	
Selection by Committee
    	
5
    
	
2.2
    	
Enrollment Requirements
    	
5
    
	
2.3
    	
Termination of Participation and/or Deferrals
    	
5
    
	
 
    	
 
    
	
ARTICLE 3 Deferral   Elections/Crediting of Interest
    	
6
    
	
 
    	
 
    
	
3.1
    	
Deferred Compensation
    	
6
    
	
3.2
    	
Election to Defer Compensation
    	
6
    
	
3.3
    	
Time and Form of Payment
    	
7
    
	
3.4
    	
Withholding of Deferral Amounts
    	
8
    
	
3.5
    	
Interest
    	
8
    
	
3.6
    	
FICA and Other Taxes
    	
8
    
	
3.7
    	
Vesting
    	
8
    
	
 
    	
 
    
	
ARTICLE 4 In-Service   Distribution; Unforeseeable Financial Emergencies
    	
8
    
	
 
    	
 
    
	
4.1
    	
In-Service Distribution
    	
8
    
	
4.2
    	
Withdrawal Payout/Suspensions for Unforeseeable Financial   Emergencies
    	
9
    
	
 
    	
 
    
	
ARTICLE 5 Termination   Benefit
    	
9
    
	
 
    	
 
    
	
5.1
    	
Termination Benefits
    	
9
    
	
5.2
    	
Payment of Termination Benefit
    	
9
    
	
 
    	
 
    
	
ARTICLE 6 Death Benefit
    	
10
    
	
 
    	
 
    
	
6.1
    	
Death Prior to Distribution of Account Balance
    	
10
    
	
 
    	
 
    
	
ARTICLE 7 Disability
    	
10
    
	
 
    	
 
    
	
7.1
    	
General
    	
10
    
	
 
    	
 
    
	
ARTICLE 8 Beneficiary   Designation
    	
10
    
	
 
    	
 
    
	
8.1
    	
Beneficiary
    	
10
    
	
8.2
    	
Beneficiary Designation; Change; Spousal Consent
    	
10
    
	
8.3
    	
Acknowledgement
    	
11
    

 

ii

 

	
8.4
    	
No Beneficiary Designation
    	
11
    
	
8.5
    	
Doubt as to Beneficiary
    	
11
    
	
8.6
    	
Discharge of Obligations
    	
11
    
	
 
    	
 
    
	
ARTICLE 9 Termination,   Amendment, or Modification
    	
11
    
	
 
    	
 
    
	
9.1
    	
Termination
    	
11
    
	
9.2
    	
Amendment
    	
11
    
	
9.3
    	
Effect of Payment
    	
12
    
	
 
    	
 
    
	
ARTICLE 10 Administration
    	
12
    
	
 
    	
 
    
	
10.1
    	
Committee Duties
    	
12
    
	
10.2
    	
Agents
    	
12
    
	
10.3
    	
Binding Effect of Decisions
    	
12
    
	
10.4
    	
Indemnity of Committee
    	
12
    
	
10.5
    	
Employer Information
    	
12
    
	
10.6
    	
Electronic Administration
    	
13
    
	
 
    	
 
    
	
ARTICLE 11 Claims Procedure
    	
13
    
	
 
    	
 
    
	
11.1
    	
Presentation of Claim
    	
13
    
	
11.2
    	
Notification of Decision
    	
13
    
	
11.3
    	
Requests for a Review of a Denied Claim
    	
14
    
	
11.4
    	
Decision on Review
    	
14
    
	
11.5
    	
Rules and Procedures
    	
15
    
	
11.6
    	
Exhaustion of Remedies
    	
15
    
	
11.7
    	
Optional Arbitration
    	
15
    
	
 
    	
 
    
	
ARTICLE 12 Miscellaneous
    	
17
    
	
 
    	
 
    
	
12.1
    	
Unsecured General Creditor
    	
17
    
	
12.2
    	
Employer’s Liability
    	
17
    
	
12.3
    	
Non-Assignability
    	
17
    
	
12.4
    	
Coordination with Other Benefits
    	
17
    
	
12.5
    	
Not a Contract of Employment
    	
18
    
	
12.6
    	
Furnishing Information
    	
18
    
	
12.7
    	
Terms
    	
18
    
	
12.8
    	
Captions
    	
18
    
	
12.9
    	
Governing Law
    	
18
    
	
12.10
    	
Notice
    	
18
    

 

iii

 

	
12.11
    	
Successors
    	
18
    
	
12.12
    	
Spouse’s Interest
    	
19
    
	
12.13
    	
Validity
    	
19
    
	
12.14
    	
Incompetent
    	
19
    
	
12.15
    	
Court Order
    	
19
    
	
12.16
    	
Effect on Employee Benefits
    	
19
    
	
12.17
    	
Legal Fees to Enforce Rights Upon a Change in Control
    	
19
    
	
12.18
    	
Code Section 409A
    	
20
    

 

iv

 

PURPOSE

 

The purpose of this Plan is to provide specified benefits to a select group of management or highly compensated employees, or independent directors, who contribute materially to the continued growth, development and future business success of Cubic Corporation, a Delaware corporation, and its subsidiaries, if any.  This Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA, and is intended to comply, in form and operation, with the requirements of Code Section 409A so as to avoid the inclusion of deferred compensation in the gross income of participants until actual receipt.  In the event of any inconsistency between the provisions of the Plan and the requirements of Code Section 409A, as interpreted by the Treasury Department and the Internal Revenue Service in guidance issued thereunder, the provisions of the Plan shall be applied in a manner consistent with the requirements of Section 409A.

 

In order to transition to the requirements of Code Section 409A and related Treasury Regulations, the Committee may make available to Participants certain transition relief provided under Treasury guidance as described more fully in Appendix A of this Plan.

 

This Plan has been adopted by the Board of Directors of Cubic Corporation effective January 1, 2005, as a successor to the Cubic Corporation Restated Deferred Compensation Plan for Designated Directors, Officers and Key Employees (the “Prior Plan”).  The provisions of the Prior Plan shall continue to apply to the deferred compensation account balances earned and vested under the Prior Plan as of December 31, 2004, and subsequent earnings thereon, to the extent such amounts are not subject to Section 409A.   The provisions of this Plan shall supersede the provisions of the Prior Plan with respect to amounts deferred after December 31, 2004, that are subject to Section 409A.

 

ARTICLE 1

 

Definitions

 

For purposes hereof, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:

 

1.1          “Account Balance” shall mean, with respect to a Participant, the balance of his or her Deferral Account.  This account shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to or in respect of a Participant pursuant to the Plan.

 

1.2          “Annual Deferral Amount” shall mean that portion of a Participant’s Base Annual Salary or Bonus, or Director Fees, that a Participant elects to have, and is, deferred in accordance with Article 3 for any one Plan Year or Fiscal Year, as applicable.  An Annual Deferral Amount shall also mean that portion of a Participant’s Bonus payable with respect to more than one Fiscal Year which a Participant elects to have, and is, deferred under the Plan.

 

1.3          “Annual Installment Method” shall mean the payment of a Participant’s benefit in annual installments to be paid, if so elected by a Participant, as follows:  (i) during the calendar year in which payment begins, such payment shall equal (a) the Account Balance as of the Termination Date; divided by (b) the total number of installment payments to be made; and

 

1

 

(ii) during the benefit payment period, the amount of each installment to be paid during each calendar year thereafter shall be recalculated, and shall be equal to (a) the remaining amount payable to the Participant as of such January 1; divided by (b) the number of installment payments to be made in or after such subsequent calendar year.  The first such installment shall be made as of the Termination Date and subsequent installments shall be made on the 15th of the first January following the Termination Date and subsequent installments shall be made on the 15th of each subsequent January of each subsequent calendar year. The final installment payment shall be equal to the remaining amount payable to the Participant.  In no event shall the amount of any installment payment exceed the remaining amount payable to the Participant.

 

1.4          “Base Annual Salary” shall mean the annual compensation (excluding bonuses, commissions, overtime, incentive payments, non-monetary awards, stock options and grants, restricted stock, severance or termination payments, foreign service payments, payments for consulting services, and such other unusual or extraordinary payments as the Committee may determine) paid to a Participant for services rendered to any Employer, before reduction for compensation deferred pursuant to all tax-qualified, non-qualified and Code Section 125 plans (other than compensation deferred under individual employment contracts) of any Employer.  The Committee may, in its discretion, with respect to any one or more Participants establish for any Plan Year a limit on the amount of Base Annual Salary to be taken into account under this Plan.

 

1.5          “Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated in accordance with Article 8, that are entitled to receive benefits under the Plan upon death of a Participant.

 

1.6          “Beneficiary Designation Form” shall mean the form established from time to time by the Committee that a Participant completes, signs, and returns to the Committee to designate one or more Beneficiaries.

 

1.7          “Board” shall mean the Board of Directors of the Company.

 

1.8          “Bonus” shall mean any compensation, in addition to Base Annual Salary, paid in respect of one or more Fiscal Years to a Participant as an Employee under the Company’s Bonus Plan, or any other incentive plan of the Company.  The Committee may, in its discretion, with respect to any one or more Participants establish for any Fiscal Year or Years a limit on the amount of Bonus to be taken into account under this Plan.

 

1.9          “Change in Control” shall mean a change in ownership or control of the Company effected through any of the following transactions:  (i) a merger, consolidation or other reorganization approved by the Company’s stockholders, UNLESS securities representing fifty percent (50%) or more of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by the persons who beneficially owned the Company’s outstanding voting securities immediately prior to such transaction; (ii) the sale, transfer or other disposition of all or substantially all of the Company’s assets in complete liquidation or dissolution of the Company; or (iii) the acquisition, directly or indirectly by any person or related group of persons (other than the Company or a person that directly or indirectly controls, is

 

2

 

controlled by, or is under common control with, the Company), of beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended from time to time), of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities.

 

1.10        “Claimant” shall have the meaning set forth in Section 11.1.

 

1.11        “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

1.12        “Committee” shall mean the administrative committee appointed to manage and administer the Plan in accordance with its provisions pursuant to Article 10.

 

1.13        “Company” shall mean Cubic Corporation, a Delaware corporation.

 

1.14        “Compensation” refers to Base Annual Salary and Bonus, and Director Fees, as may be designated by the Committee.

 

1.15        “Deferral Account” shall mean the sum of (a) a Participant’s Deferral Amount, plus (b) interest credited in accordance with Section 3.5, net of all distributions from such Account.  This account shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to the Participant pursuant to the Plan.

 

1.16        “Deferral Amount” shall mean the sum of all of a Participant’s Annual Deferral Amounts.

 

1.17        “Director” shall mean a non-employee member of the Board.

 

1.18        “Director Fees” shall mean retainer fees and meeting fees payable to Directors.  The Committee may, in its discretion, with respect to any one or more Participants, establish for any Plan Year a limit on the amount of Director Fees taken into account under this Plan.

 

1.19        “Disability” shall mean a Participant is (1) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (2) by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer.

 

1.20        “Distribution Date” shall mean the date or dates on which Compensation being deferred will be distributed, as selected by the Participant on the Election Form.  The term Distribution Date does not include other dates on which amounts may be distributed to a Participant under the Plan such as upon Disability, death, Unforeseeable Financial Emergency, or Separation from Service.

 

3

 

1.21        “Election Form” shall mean the form established from time to time by the Committee that a Participant completes, signs, and returns to the Committee to make an election under the Plan.

 

1.22        “Employee” refers to any employee, within the meaning of Section 3121(d) of the Code, who is highly compensated, has the title of Vice President, President or Chief Executive Officer, or is otherwise a member of management, selected by the Committee to participate in this Plan.  The Committee shall determine whether an employee is to be considered highly compensated, applying a definition with a dollar threshold at least as high as that set under Section 414(q) of the Code from time to time with respect to qualified plans.

 

1.23        “Employers” shall mean the Company and/or any of its subsidiaries that have been selected by the Board to participate in the Plan.

 

1.24        “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

1.25        “Fiscal Year” shall mean the Employer’s tax year, which is currently the 12-month period ending on September 30.

 

1.26        “Inactive Participant” shall mean any Participant who has elected to defer Compensation under the Plan during a previous Plan Year but who does not defer any Compensation payable during the current Plan Year.

 

1.27        “In-Service Distribution” shall mean the payout set forth in Section 4.1.

 

1.28        “Key Employee” shall mean an employee as defined in Code Section 416(i) without regard to paragraph (5) thereof.

 

1.29        “Participant” shall mean any Employee or Director (a) who is selected to participate in the Plan, (b) who elects to participate in the Plan, (c) who signs a Plan Agreement and an Election Form, (d) whose signed Plan Agreement and Election Form are accepted by the Committee, (e) who commences participation in the Plan, and (f) whose Plan Agreement has not terminated.

 

1.30        “Plan” shall mean the Company’s 2005 Deferred Compensation Plan which shall be evidenced by this instrument and, with respect to each Participant, by his or her Plan Agreement, as each may be amended from time to time.

 

1.31        “Plan Agreement” shall mean a written agreement, as may be amended from time to time, which is entered into by and between one or more Employers and a Participant.  Each Plan Agreement executed by a Participant shall provide for the entire benefit to which such Participant is entitled under the Plan, and shall specify the Employer or Employers liable for the Participant’s benefits hereunder and the magnitude or extent of such liability.  The Plan Agreement bearing the latest date of acceptance by the Committee shall govern such entitlement and each Employer’s liability.  Upon the complete payment of a Participant’s Account Balance, each individual’s Plan Agreement and his or her status as a Participant shall terminate.

 

4

 

1.32        “Plan Year” shall be the calendar year, starting with 2005.

 

1.33        “Re-Deferral Election” shall mean a Participant’s irrevocable election to extend a Distribution Date.

 

1.34        “Separation from Service” means a termination of employment or service that constitutes a  “separation from service” within the meaning of Code Section 409A(a)(2)(A)(i).  A Separation from Service shall not occur merely by reason of the transfer of employment of a Participant from an Employer to any entity directly or indirectly controlled by or under common control with the Company and which is not an Employer, unless otherwise provided under Section 409A.  A Participant will not be considered to have a termination of employment while the individual is on a military leave, sick leave, or other bona fide leave of absence if the period of the leave does not exceed six months or, if longer, so long as the individual’s right to reemployment with the Employer is provided either by statute or by contract.

 

1.35        “Termination Benefit” shall mean the benefit set forth in Article 7.

 

1.36        “Unforeseeable Financial Emergency” shall mean an “unforeseeable emergency” within the meaning of Section 409A(2)(B)(ii) of the Code, including a severe financial hardship to the Participant resulting from illness or accident of the Participant, the Participant’s spouse or a dependent (as defined in Section 152(a) of the Code) of the Participant, loss of the Participant’s property due to casualty or other similar extraordinary unforeseeable circumstances arising as a result of events beyond the control of the Participant.  Further, to qualify for distribution on account of an “Unforeseeable Emergency,” the amounts distributed with respect to the unforeseeable emergency cannot exceed the amounts necessary to satisfy the emergency and pay taxes reasonably anticipated as a result of the distribution. The amount needed is determined after taking into account amounts that would be received by the Participant through reimbursement or compensation by insurance or otherwise, or that could be obtained, without severe financial hardship, through the liquidation of the Participant’s assets.

 

ARTICLE 2

 

Eligibility, Selection, Enrollment

 

2.1          Selection by Committee.  Participation in the Plan shall be limited to employees of an Employer who are part of a select group of management or highly compensated employees, and non-employee members of the Board of Directors of the Company.  From the foregoing, the Committee shall select, in its sole and absolute discretion, individuals eligible to participate in the Plan.

 

2.2          Enrollment Requirements.  As a condition to participation, each selected individual shall complete, execute, and return to the Committee a Plan Agreement and an Election Form.  In addition, the Committee shall establish from time to time such other enrollment requirements as it determines in its sole and absolute discretion are necessary.

 

2.3          Termination of Participation and/or Deferrals.  If the Committee determines in its sole discretion that a Participant no longer meets the requirement of Section 2.1 hereof, the Committee shall prevent the Participant from making future deferral elections.

 

5

 

ARTICLE 3

 

Deferral Elections/Crediting of Interest

 

3.1          Deferred Compensation.

 

(a)           Minimum.  For each Plan Year or Fiscal Year, as applicable, a Participant may elect to defer Compensation paid in respect of such year the following minimum amounts for each deferral elected:

 

	
Deferral
    	
 
    	
Minimum Amount
    
	
 
    	
 
    	
 
    
	
Base Annual Salary
    	
 
    	
 
    	
1% per Plan Year
    
	
 
    	
 
    	
 
    	
 
    
	
Annual Bonus
    	
 
    	
 
    	
5% per Fiscal Year
    
	
 
    	
 
    	
 
    	
 
    
	
Director Fees
    	
 
    	
 
    	
1% per Plan Year
    

 

If no election is made, the amount deferred shall be zero.

 

(b)           Short Plan Year.  If a Participant first becomes a Participant after the first day of a Plan Year, the minimum Base Annual Salary or Director Fees shall be an amount equal to the minimum set forth above, multiplied by a fraction, the numerator of which is the number of complete months remaining in the Plan Year and the denominator of which is 12.

 

(c)           Maximum. For each Plan Year or Fiscal Year, as applicable, a Participant may elect to defer Base Annual Salary and/or Bonus up to the following maximum amounts:

 

	
Deferral
    	
 
    	
Maximum Amount
    
	
 
    	
 
    	
 
    
	
Base Annual Salary
    	
 
    	
 
    	
90% per Plan Year
    
	
 
    	
 
    	
 
    	
 
    
	
Bonus
    	
 
    	
 
    	
100% per Fiscal Year
    
	
 
    	
 
    	
 
    	
 
    
	
Director Fees
    	
 
    	
 
    	
100% per Plan Year
    

 

3.2          Election to Defer Compensation.

 

(a)           General. An individual selected to participate must deliver to the Committee a completed and signed Election Form, which Election Form must be accepted by the Committee, for a valid election to exist.  Except as otherwise provided under this Section 3.2, an election to defer Compensation must be made and accepted (i) no later than the close of the Plan Year preceding the Plan Year in which any of the services for which the Compensation would be paid are performed, or (ii) within 30 days after the date the Participant first becomes eligible to participate in this Plan (and any other plan that would be aggregated with the Plan to the extent required under Section 409A), with respect to services to be performed subsequent to the election.

 

6

 

(b)           Special Rule for First Year of Eligibility.  For purposes of Section 3.2(a) above, and to the extent permitted under Section 409A, if a deferral election is made with respect to a Bonus during the first year of eligibility, but after the beginning of the service period with respect to which the Bonus is payable, the election is deemed to apply to compensation paid for services performed subsequent to the election if the election applies to a portion of the Bonus that is no greater than the total amount of the Bonus for the performance period multiplied by the ratio of the number of days remaining in the performance period after the election over the total number of days in the performance period.

 

(c)           Special Rule for Fiscal Year Compensation.  To the extent permitted under Section 409A, the Committee may permit a Participant to defer a Bonus based on service to be performed during one or more consecutive Fiscal Years by making an election no later than the close of the Fiscal Year preceding the first Fiscal Year in which the services for which the Bonus is payable are to be performed, provided that no portion of the Bonus is paid or payable during the Fiscal Year(s) in which the services are to be performed.

 

(d)           Special Rule for Performance-Based Compensation.  The Committee may permit a Participant to make an initial election to defer a Bonus based on a performance period of one or more Fiscal Years, provided that the Participant has performed services continuously from the date the performance criteria were established through the date of the election, on any date that is at least six months prior to the end of the performance period and before the Bonus has become both substantially certain to be paid and readily ascertainable.  This Section 3.2(e) shall apply only to the extent the Bonus qualifies as “performance-based compensation” within the meaning of Section 409A(a)(4)(B)(iii) of the Code and as otherwise permitted under Section 409A.

 

(e)           Subsequent Elections.  For each service period (that is, a Plan Year or one or more consecutive Fiscal Years with respect to which a Bonus is payable), a new Election Form must be delivered to the Committee in accordance with its rules and procedures and the requirements of this Section 3.2.  If no Election Form is timely delivered for a service period, no Annual Deferral Amount shall be withheld for that service period. Notwithstanding the foregoing, the Committee may provide that deferral elections shall remain in effect with respect to subsequent service periods until changed or revoked, provided that the elections become irrevocable with respect to compensation for service performed in a service period as of the last day on which the Participant would be required to make a deferral election for that service period.

 

3.3          Time and Form of Payment.  At the time of each election to defer an Annual Deferral Amount, the Committee may permit the Participant to elect the time and form of payment of the Annual Deferral Amount in accordance with the provisions of Section 4.1, with respect to In-Service Distributions, and in accordance with such other rules and procedures as the Committee may prescribe consistent with the requirements of Section 409A of the Code with respect to a payment method for Termination Benefits.  The Committee may permit the Participant to change an election of a payment method for Termination Benefits by submitting a new Election Form to the Committee, provided that any such Election Form is submitted at least 12 months prior to the scheduled payment date and is not effective for 12 months, and the first payment with respect to which the election is made is deferred for a period of not less than five

 

7

 

years from the earliest date such payment would otherwise have been made or commenced if payable in installments (unless payment is on account of death, Disability or Unforeseeable Financial Emergency), subject to compliance with Code Section 409A.

 

3.4          Withholding of Deferral Amounts.  For each Plan Year, the Base Annual Salary portion of the Annual Deferral Amount shall be withheld each payroll period in equal amounts or percentages from the Participant’s Base Annual Salary.  The Bonus portion of the Annual Deferral Amount shall be withheld at the time the Bonus is or otherwise would be paid to the Participant.  The Director Fees portion of the Annual Deferral Amount shall be withheld at the time that Director Fees are or otherwise would be paid to the Participant.  The Annual Deferral Amount shall be credited to the Participant’s Deferral Account.  A Participant shall at all times have a fully vested and non-forfeitable interest in his or her Deferral Account.

 

3.5          Interest.  The Committee shall credit the Account Balances monthly with an interest rate of return equal to the “Prompt Payment Act” interest rate set by the Secretary of the Treasury semi-annually on January 1st and July 1st, divided by 12.  The crediting of interest shall be for bookkeeping purposes only, and the Company shall not be obligated actually to invest any money credited to the Account Balances.

 

3.6          FICA and Other Taxes.  For each Plan Year in which an Annual Deferral Amount is being withheld, the Participant’s Employer(s) shall ratably withhold from that portion of the Participant’s Base Annual Salary and/or Bonus that is not being deferred, the Participant’s share of FICA taxes on deferred amounts and any other taxes which may be required or appropriate.  If necessary, but only to the extent permitted under Code Section 409A, the Committee shall reduce the Annual Deferral Amount in order to comply with this Section 3.6.

 

3.7          Vesting.  A Participant shall at all times be one hundred percent (100%) vested in his or her Deferral Account and Annual Deferral Amount.

 

ARTICLE 4

 

In-Service Distribution; Unforeseeable Financial Emergencies

 

4.1          In-Service Distribution.  At the time of each election to defer an Annual Deferral Amount, the Committee may permit a Participant to elect to receive a future “In-Service Distribution” from the Plan with respect to that Annual Deferral Amount in a lump sum payment or pursuant to an Annual Installment Method over a period up to five years, as early as five years but no later than ten years, after the year of deferral (as described below), with the portion of the In-Service Distribution payment which is yet to be distributed being credited with interest as set forth in Section 3.5.  The In-Service Distribution shall be an amount that is equal to the Annual Deferral Amount plus interest credited on such amount under Section 3.5.  Subject to the other terms and provisions of this Plan, each In-Service Distribution elected shall be paid or commence as soon as practicable after January 1st of the first calendar year elected by the Participant that occurs at least five years and no more than ten years after the end of the Plan Year or latest Fiscal Year in the service period for which an Annual Deferral Amount would otherwise have been paid.  Subject to compliance with Code Section 409A, the Committee may permit a Participant to change this election to commence distribution on an allowable alternative

 

8

 

Distribution Date by submitting a new Election Form to the Committee, provided that any such Election Form is submitted at least 12 months prior to the scheduled Distribution Date and is not effective for 12 months, and the commencement of the distribution with respect to which the election is made is deferred for a period of not less than five years from the Distribution Date such payment would otherwise have been made or commenced if payable in installments (unless payment is on account of death, Disability or Unforeseeable Financial Emergency). Notwithstanding the foregoing, but subject to compliance with Code Section 409A, should an event occur that triggers a benefit under Articles 5, 6 or 7, any Annual Deferral Amount, plus interest credited on such amount under Section 3.5, that is subject to an In-Service Distribution election under this Section 4.1 shall not be paid in accordance with this Section 4.1, but shall be paid in accordance with the other applicable Article of this Plan.

 

4.2          Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies.  If the Participant experiences an Unforeseeable Financial Emergency, the Participant may petition the Committee to receive partial or full payout from the Plan.  The payout shall not exceed the lesser of the Participant’s Account Balance, calculated as if such Participant were receiving a Termination Benefit, or the amount reasonably needed to satisfy the Unforeseeable Financial Emergency as determined under Section 1.36.  Subject to the approval of the Committee in its sole and absolute discretion, and compliance with Code Section 409A, the payout shall be made in a lump sum no later than 60 days following the date of approval.  In addition, if the Committee approves the payout, the Participant’s outstanding deferral election under the Plan  shall be cancelled. The Committee may also permit a cancellation of a deferral election due to a hardship distribution from the Company’s 401(k) plan to the extent permitted under Section 409A.  The Participant’s ability to make a deferral election following a cancellation of a deferral election under this Section 4.2 shall be subject to the provisions governing initial deferral elections under Section 3.2.

 

ARTICLE 5

 

Termination Benefit

 

5.1          Termination Benefits.  Upon a Participant’s Separation from Service, the Participant shall receive a Termination Benefit equal to the Participant’s Account Balance, credited with interest in accordance with Section 3.5.

 

5.2          Payment of Termination Benefit.  The Termination Benefit shall be paid in accordance with the installment payment method previously elected by the Participant in accordance with Section 3.3 or, if no election of an installment method was timely made, in a lump sum, with the portion of such Termination Benefit yet to be distributed being credited with interest in accordance with Section 3.5.  The lump sum payment shall be made, or installment payments shall commence, no later than 60 days after the Participant’s Separation from Service; provided, however, that if a Participant changes the payment method for the Termination Benefit in accordance with Section 3.3, the payment date shall be determined in accordance with Section 3.3.  Despite the foregoing, if the Participant’s Account Balance at the time of his or her Separation from Service is less than $50,000, payment of the Termination Benefit will be made in a lump sum no later than 60 days after Separation from Service, provided that such distribution may be made without violating Section 409A of the Code.  In addition,

 

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notwithstanding anything in the Plan to the contrary and to the extent required under Section 409A, the distribution of a Termination Benefit to a Participant who is a Key Employee shall not be made or commenced before the date which is six months and one day after the Participant’s Separation from Service (or, if earlier, the Participant’s death) if any stock of the Company (or any affiliate of the Company which would be treated as a “single employer” with the Company for purposes of Section 409A of the Code) is publicly traded on an established securities market or otherwise at such time.  If a delay in the commencement of installment payments is required under the preceding sentence, the suspended installments shall be paid on the first business day following the expiration of the six-month period.

 

ARTICLE 6

 

Death Benefit

 

6.1          Death Prior to Distribution of Account Balance.  If a Participant dies before or after Separation from Service, the Participant’s unpaid Account Balance shall be paid to the Participant’s Beneficiary in a lump sum no later than 90 days following the date of death.  The Committee may require suitable proof of death as a condition of payment.

 

ARTICLE 7

 

Disability

 

7.1          General.  If the Committee determines that the Participant has incurred a Disability, the Participant’s outstanding deferral elections shall be cancelled and the Participant’s unpaid Account Balance shall be paid to the Participant or the Participant’s legal representative in a lump sum no later than 60 days after the date of Disability.  If the Participant returns to employment or service as a director with an Employer after a Disability ceases, the Participant’s ability to make a deferral election following a cancellation of a deferral election under this Section 7.1 shall be subject to the provisions governing initial deferral elections under Section 3.2.

 

ARTICLE 8

 

Beneficiary Designation

 

8.1          Beneficiary.  Each Participant shall have the right, at any time, to designate his or her Beneficiary (both primary as well as contingent) to receive any benefits payable under the Plan to a Beneficiary upon the death of a Participant.  The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other plan of an Employer in which the Participant participates.

 

8.2          Beneficiary Designation; Change; Spousal Consent.  A Participant shall designate his or her Beneficiary by completing and signing the Beneficiary Designation Form, and returning it to the Committee.  A Participant shall have the right to change a Beneficiary by completing, signing, and otherwise complying with the terms of the Beneficiary Designation Form and the Committee’s rules and procedures, as in effect from time to time.  Where required

 

10

 

by law or by the Committee, in its sole and absolute discretion, if the Participant names someone other than his or her spouse as a Beneficiary, a spousal consent, in the form designated by the Committee, must be signed by that Participant’s spouse and returned to the committee.  Upon the acceptance by the Committee of a new Beneficiary Designation Form, all Beneficiary designation previously filed shall be canceled.  The Committee shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Committee prior to his or her death.

 

8.3          Acknowledgement.  No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Committee.

 

8.4          No Beneficiary Designation.  If a Participant fails to designate a Beneficiary as provided in this Article 8 or if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant’s benefits, then the Participant’s designated Beneficiary shall be his or her surviving spouse.  If the Participant has no surviving spouse, the benefits remaining under the Plan shall be paid to the Participant’s issue upon the principle of representation and if there is no such issue, to the Participant’s estate.

 

8.5          Doubt as to Beneficiary.  If the Committee has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, the Committee shall have the right, exercisable in its sole and absolute discretion, to cause the Participant’s Employer to withhold such payments until this matter is resolved to the Committee’s satisfaction.

 

8.6          Discharge of Obligations.  The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge all Employers and the Committee from all further obligations under this Plan with respect to the Participant, and that Participant’s Plan Agreement shall terminate upon such full payment of benefits.

 

ARTICLE 9

 

Termination, Amendment, or Modification

 

9.1          Termination.  Any Employer reserves the right to terminate the Plan at any time with respect to Participants employed by or in service with the Employer.  No distributions shall be made prior to the date or dates otherwise provided under the Plan unless earlier distribution is permitted under Code Section 409A.  The Company shall have discretion to terminate the Plan and make distributions upon termination to the maximum extent permitted under Code Section 409A.

 

9.2          Amendment.  Any Employer may, at any time, amend or modify the Plan in whole or in part with respect to that Employer; provided, however, that no amendment or modification shall be effective to decrease a Participant’s Account Balance at the time of such amendment.  Notwithstanding the foregoing, the Employer may amend the Plan at any time to comply with the provisions of Code Section 409A with respect to any benefits or payments under the Plan.

 

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9.3          Effect of Payment.  The full payment of the applicable benefit under the Plan shall completely discharge all obligations to a Participant under this Plan and the Participant’s Plan Agreement shall terminate.

 

ARTICLE 10

 

Administration

 

10.1        Committee Duties.  This Plan shall be administered by a Committee, to be known as the Cubic Corporation Deferred Compensation Plan Committee, which shall consist of individuals approved by the Board, or, after the occurrence of a Change in Control, a third party who, before the occurrence of such Change in Control, was appointed by the then CEO to act as the Plan Administrator in the event of a Change in Control, and accepted such appointment.  Members of the Committee may be Participants under this Plan.  The Committee shall also have the discretion and authority to make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan and decide on resolve any and all questions, including but not limited to, interpretations of this Plan and entitlement to or amount of benefits under this Plan, as may arise in connection with the Plan.  Any Committee member must recuse himself or herself on any matter of personal interest to such member that comes before the Committee.

 

10.2        Agents.  In the administration of this Plan, the Committee may, from time to time, and at the expense of the Company, employ agents and delegate to them such administrative duties as it sees fit and may from time to time consult with counsel who may be counsel to any Employer.  Any communications, including, without limitation, designations, writings, notices, and elections, required to be provided to, or filed with, the Committee shall include provision to, or filing with, any person or entity designated by the Committee to be such an agent.  If the Committee employs an agent, any applicable reference to the Committee in the Plan shall be construed as a reference to the agent to whom the Committee has delegated a particular administrative duty.

 

10.3        Binding Effect of Decisions.  The decision or action of the Committee with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.

 

10.4        Indemnity of Committee.  All Employers shall indemnify and hold harmless the members of the Committee against any and all claims, losses, damages, expenses, or liabilities, including attorneys’ fees, arising from any action or failure to act with respect to this Plan, except in the case of gross negligence or willful misconduct by the Committee or any of its members.

 

10.5        Employer Information.  To enable the Committee to perform its functions, each Employer shall supply full and timely information to the Committee on all matters relating to the compensation of its Participants, the date and circumstances of the Disability, death or Separation from Service of its Participants, and such other pertinent information as the Committee may reasonably require.

 

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10.6        Electronic Administration.  The Plan may be administered by use of electronic methods, but only to the extent permitted by law.  It is specifically contemplated that, where the Plan refers to communications, including, without limitation, designations, writings, notices, and elections, these communications may occur electronically, pursuant to such procedures as the Committee may establish.

 

ARTICLE 11

 

Claims Procedure

 

11.1        Presentation of Claim.  Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan.  If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 60 days after such notice was received by the Claimant.  The claim must state with particularity the determination desired by the Claimant.  All other claims must be made within 180 days of the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired by the Claimant.

 

11.2        Notification of Decision.  If the claim is approved, prompt written notice to the Claimant shall be given.

 

In the event a Claimant’s claim for benefits is denied in whole or in part, the Committee shall notify the Claimant of such denial in writing and shall advise the Claimant of the right to a review thereof.  Such written notice shall set forth, in a manner calculated to be understood by the Claimant,

 

(a)           specific reasons for the denial,

 

(b)           specific references to the Plan provisions on which the denial is based,

 

(c)           a description of any information or material necessary for the applicant to perfect the application, including an explanation of why such material is necessary, and

 

(d)           an explanation of the Plan’s claims review procedure, the time limits applicable under the procedures and a statement regarding the claimant’s right to bring a civil action under section 502(a) of ERISA following an adverse benefit determination on appeal.

 

Such written notice shall be given to the applicant within 90 days after the Committee receives the application, unless special circumstances require an extension of time of up to an additional 90 days for processing the application.  If such an extension of time for processing is required, written notice of the extension shall be furnished to the applicant prior to the termination of the initial 90-day period.  This notice of extension shall indicate the special circumstances requiring the extension of time and the date by which the Committee expects to render its decision on the application for benefits.

 

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11.3        Requests for a Review of a Denied Claim.  Any person whose claim is denied in whole or in part, or such person’s authorized representative, may appeal from such denial by submitting to the Committee a request for a review of the application within 60 days after receiving written notice of such denial from the Committee.  The request for a review shall be in writing and shall set forth all of the grounds on which it is based, all facts and documents in support of the request and any other matters which the applicant deems pertinent.  The Committee may require the applicant to submit such additional facts, documents or other material as it may deem necessary or appropriate in making its review.  The Claimant may submit written comments, documents, records and other information related to the benefit claim on appeal.  The Claimant must be provided, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the claim.  A document is considered relevant to the claim if it (i) was relied upon in making the determination on the claim; (ii) was submitted, considered or generated in the course of making the determination, without regard as to whether it was relied upon in making the decision; or (iii) demonstrates compliance in making the decision on the claim with the requirement that the determination must follow the terms of the Plan and be consistent when applied to similarly situated claimants.

 

11.4        Decision on Review.  The Committee on appeal must undertake a full and fair review of the claim and consider all comments, documents, records and other information submitted by the Claimant, without regard to whether such information was submitted or considered in the initial claim determination.  The Committee shall render its decision on review promptly, and not later than 60 days after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require an extension of time of up to an additional 60 days for processing the request.  If such an extension is required, written notice of the extension shall be furnished to the applicant prior to the end of the initial 60-day period.  This notice of extension shall indicate the special circumstances requiring the extension of time and the date by which the Committee expects to render its decision on the application for benefits.  If an extension of time is required due to the claimant’s failure to submit information necessary to review the claim, the period of time that the Committee has to review the claim will be tolled from the date on which the notice of extension is sent to the claimant until the date on which the claimant responds to the request for additional information.

 

Within the time prescribed above, the Committee shall give written notice of its decision to the Claimant and the Company.  In the event that the Committee confirms the denial of the claim in whole or in part, such notice shall set forth, in a manner calculated to be understood by the Claimant:

 

(a)           specific reasons for the denial;

 

(b)           specific reference(s) to the pertinent Plan provisions upon which the decision was based;

 

(c)           a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the benefit claim.  A document is considered relevant to the claim if it (i) was relied upon in making the benefit determination; (ii) was submitted, considered or generated in the course of making the benefit determination, without regard as to whether it was relied upon in making the

 

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decision; or (iii) demonstrates compliance in making the benefit decision with the requirement that the benefit determination must follow the terms of the Plan and be consistent when applied to similarly situated claimants, and

 

(d)           a description of any voluntary appeal procedures offered under the Plan, the claimant’s right to obtain information about such procedures and a statement regarding the claimant’s right to bring a civil action under section 502(a) of ERISA following an adverse benefit determination on appeal.

 

If the Committee is a committee or board that holds regularly scheduled meetings at least quarterly, the determination on appeal must be made no later than the date of the meeting that immediately follows the Plan’s receipt of the appeal request.  However, if the appeal is received within 30 days before the date of the meeting, the determination must be made by the date of the second meeting that immediately follows the Plan’s receipt of the appeal request.  If an extension of the time period for processing the claim is needed, the determination must be made by the date of the third meeting following the Plan’s receipt of the appeal request.  If such an extension for review is required, written notice of the extension shall be furnished to the applicant before the commencement of the extension. This notice of extension shall indicate the special circumstances requiring the extension of time and the date by which the Committee expects to render its decision on the claim.  The Committee must provide the notice of determination on appeal to the Claimant as soon as possible, but no later than 5 days after the determination is made.

 

In the event that the Committee determines that the claim should not have been denied in whole or in part, the Company shall take appropriate remedial action as soon as reasonably practicable after receiving notice of the Committee’s decision.

 

11.5        Rules and Procedures.  The Committee may establish such rules and procedures, consistent with the Plan and with ERISA, as it may deem necessary or appropriate in carrying out its responsibilities under this Article 11.  The Committee may require a Claimant who wishes to submit additional information in connection with an appeal from the denial of a claim in whole or in part to do so at the Claimant’s own expense.

 

11.6        Exhaustion of Remedies.  No legal action for benefits under the Plan shall be brought unless and until the Claimant (i) has submitted a written claim for benefits in accordance with Section 11.1; (ii) has been notified by the Committee that the application is denied; (iii) has filed a written request for a review of the application in accordance with Section 11.3; and (iv) has been notified in writing that the Committee has affirmed the denial of the claim.  However, an action may not be brought by the Claimant under Section 502(a) of ERISA if the Claimant fails to bring such claim within the period prescribed by law, or to the extent the Claimant has agreed to binding arbitration, as provided in Section 11.7.

 

11.7        Optional Arbitration.  Any claim or controversy between the parties arising out of, connected with, or related to the formation, interpretation, performance, or breach of any provision of this Plan shall, at the option of the Claimant, be submitted to and resolved exclusively by expedited arbitration by a single arbitrator in accordance with the following procedures:

 

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(a)           In the event of a claim or controversy subject to this arbitration provision, the complaining party shall promptly send written notice to the other party identifying the matter in dispute and the proposed remedy.  Following the giving of such notice, the parties shall meet and attempt in good faith to resolve the matter.  In the event the parties are unable to resolve the matter within 21 days, the parties shall meet and attempt in good faith to select a single arbitrator acceptable to both parties.  If a single arbitrator is selected, the arbitrator shall proceed in accordance with the Rules of the American Arbitration Association (“AAA”) for Employment Disputes. If a single arbitrator is not selected by mutual consent within 31 days following the giving of the written notice of dispute, either party may file a Demand for Arbitration with the AAA pursuant to its Rules for Employment Disputes.

 

(b)           Unless the parties agree otherwise, within 60 days of the selection of the arbitrator, a hearing shall be conducted before such arbitrator at a time and a place in San Diego County agreed upon by the parties.  In the event the parties are unable to agree upon the time or place of the arbitration, the time and place within San Diego County shall be designated by the arbitrator after consultation with the parties.  Within 30 days of the conclusion of the arbitration hearing, the arbitrator shall issue an award, accompanied by a reasoned written decision explaining the basis for the arbitrator’s award.

 

(c)           In any arbitration hereunder, the Company shall pay all administrative fees of the arbitration and all fees of the arbitrator, except that the Participant or Beneficiary may, if he wishes, pay up to one-half of those amounts.  Each party shall pay its own attorneys’ fees, costs, and expenses, unless the arbitrator orders otherwise.  The prevailing party in such arbitration, as determined by the arbitrator, and in any enforcement or other court proceedings, shall be entitled, to the extent permitted by law, to reimbursement from the other party for all of the prevailing party’s costs (including but not limited to the arbitrator’s compensation), expenses, and attorneys’ fees.  The arbitrator shall have no authority to add to or to modify this Plan, shall apply all applicable law, and shall have no lesser and no greater remedial authority than would a court of law resolving the same claim or controversy.  The arbitrator shall, upon an appropriate motion, dismiss any claim without an evidentiary hearing if the party bringing the motion establishes that it would be entitled to summary judgment if the matter had been pursued in court litigation.  The parties shall be entitled to reasonable discovery subject to the discretion of the arbitrator.

 

(d)           The decision of the arbitrator shall be final, binding, and non-appealable, and may be enforced as a final judgment in any court of competent jurisdiction.

 

(e)           This arbitration provision of the Plan shall extend to claims against any parent, subsidiary, or affiliate of each party, and, when acting within such capacity, any officer, director, shareholder, Participant, Beneficiary, or agent of each party, or of any of the above, and shall apply as well to claims arising out of state and federal statutes and local ordinances as well as to claims arising under the common law or under this Plan.

 

(f)            Notwithstanding the foregoing, and unless otherwise agreed between the parties, either party may, in an appropriate matter, apply to a court for provisional relief, including a temporary restraining order or preliminary injunction, on the ground that the arbitration award to which the applicant may be entitled may be rendered ineffectual without provisional relief.

 

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(g)           Any arbitration hereunder shall be conducted in accordance with the employment rules and procedures of the AAA then in effect; provided, however, that, in the event of any inconsistency between the rules and procedures of the AAA and the terms of this Plan, the terms of this Plan shall prevail.

 

(h)           If any of the provisions of this Section 11.7 are determined to be unlawful or otherwise unenforceable, in whole or in part, such determination shall not affect the validity of the remainder of this Section 11.7, and this Section 11.7 shall be reformed to the extent necessary to carry out its provisions to the greatest extent possible and to insure that the resolution of all conflicts between the parties, including those arising out of statutory claims, shall be resolved by neutral, binding arbitration.  If a court should find that the provisions of this Section 11.7 are not absolutely binding, then the parties intend any arbitration decision and award to be fully admissible in evidence in any subsequent action, given great weight by any finder of fact, and treated as determinative to the maximum extent permitted by law.

 

ARTICLE 12

 

Miscellaneous

 

12.1        Unsecured General Creditor.  Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal or equitable right, interest or claim in any property or assets of an Employer.  Any and all of an Employer’s assets shall be, and remain, the general, un-pledged, and unrestricted assets of the Employer.  An Employer’s obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future and the sole interest of a Participant and a Participant’s beneficiaries shall be as a general creditor of the Company and any Employer.

 

12.2        Employer’s Liability.  An Employer’s liability for the payment of benefits shall be defined only by the Plan. An Employer shall have no obligation to a Participant under the Plan except as expressly provided in the Plan.

 

12.3        Non-Assignability.  Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage, or otherwise encumber, transfer, hypothecate, or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be un-assignable and non-transferable.  No part of the amounts payable shall, prior to actual payments be subject to seizure or sequestration for the payment of any debts, judgments, alimony, or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.

 

12.4        Coordination with Other Benefits.  The benefits provided for a Participant and Participant’s Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Participant’s Employer.  The Plan shall supplement and shall not supersede, modify, or amend any other such plan or program except as may otherwise be expressly provided.

 

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12.5        Not a Contract of Employment.  The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between any Employer and the Participant.  Such employment is hereby acknowledged to be an “at will” employment relationship that can be terminated at any time for any reason, with or without cause, unless expressly provided in a written employment agreement.  Nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of any Employer, either as an employee or a director, or to interfere with the right of any Employer to discipline or discharge the Participant at any time.

 

12.6        Furnishing Information.  A Participant or his or her Beneficiary will cooperate with the Committee by furnishing any and all information requested by the Committee and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Committee may deem necessary.

 

12.7        Terms.  Whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.  The masculine pronoun shall be deemed to include the feminine and vice versa, unless the context clearly indicates otherwise.

 

12.8        Captions.  The captions of the articles, sections, and paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

 

12.9        Governing Law.  Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the laws of the State of California.

 

12.10      Notice.  Any notice or filing required or permitted to be given to the Committee under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail to:

 

CUBIC CORPORATION
 9333 BALBOA AVENUE
 SAN DIEGO, CA 92123
 ATTN:  VICE PRESIDENT, HUMAN RESOURCES

 

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

 

Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing and hand-delivered, or sent by First Class United States mail, to the last known address of the Participant.

 

12.11      Successors.  The provisions of this Plan shall bind and inure to the benefit of the Participant’s Employer and its successors and assigns and the Participant, the Participant’s Beneficiaries, and their permitted successors and assigns.

 

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12.12      Spouse’s Interest.  A Participant’s Beneficiary designation shall be deemed automatically revoked if the Participant names a spouse as Beneficiary and the marriage is later dissolved or the spouse dies.  Without limiting the generality of the foregoing, the interest in the benefits hereunder of a spouse of a Participant who has predeceased the Participant or whose marriage with the Participant has been dissolved shall automatically pass to the Participant and shall not be transferable by such spouse in any manner, including but not limited to such spouse’s will, nor shall such interest pass under the laws of intestate succession.

 

12.13      Validity.  In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.

 

12.14      Incompetent.  If the Committee determines in its discretion that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Committee may direct payment of such benefit to the guardian, legal representative, or person having the care and custody of such minor, incompetent, or incapable person.  The Committee may require proof of minority, in competency, incapacity, or guardianship, as it may deem appropriate prior to distribution of the benefit.  Any payment of a benefit shall be a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount.

 

12.15      Court Order.  The Committee is authorized to make any payments as may be necessary to fulfill a domestic relations order (as defined in Section 414(p)(1)(B) of the Code) in any action in which the Plan or Committee has been named as a party.

 

12.16      Effect on Employee Benefits. Amounts deferred under this Plan or distributed to the terms of this Plan are not taken into account in the calculation of an Employee’s benefits under any employee pension or welfare benefit program or under any other compensation practice maintained by the Company, except to the extent provided in such program or practice.

 

12.17      Legal Fees to Enforce Rights Upon a Change in Control.  The Company is aware that upon the occurrence of a Change in Control, the Board (which might then be composed of new members) or a shareholder of the Company, or of any successor corporation might then cause or attempt to cause the Company or such successor to refuse to comply with its obligations under the Plan and might cause or attempt to cause the Company to institute, or may institute, litigation seeking to deny Participant’s the benefits intended under the Plan.  In these circumstances, the purpose of the Plan could be frustrated.  Accordingly, if, following a Change in Control, it should appear to any Participant that the Company or any successor has failed to comply with the provisions of the Plan or any other person takes any action to declare the Plan void or unenforceable or institutes any litigation or other legal action designed to deny, diminish or to recover from any Participant the benefits intended to be provided, then the Company irrevocably authorizes such Participant to retain legal counsel at the Company’s expense in connection with the initiation or defense of any litigation or other legal action, whether by or against the Company or any director, officer, shareholder or other person affiliated with the Company or any successor thereto in any jurisdiction.

 

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12.18      Code Section 409A.  Notwithstanding any provision of the Plan to the contrary, no distributions shall be made under the Plan earlier than permitted under the requirements of Code Section 409A, and no elections to defer Compensation, or to change the time or form of distribution, shall be permitted unless in accordance with the requirements of Code Section 409A.

 

IN WITNESS WHEREOF, the Company has signed this amended and restated Plan Document as of January 1, 2013.

 

	
 
    	
CUBIC CORPORATION,
    
	
 
    	
 
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

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APPENDIX A

 

LIMITED TRANSITION RELIEF FOR DISTRIBUTION ELECTIONS MADE AVAILABLE IN ACCORDANCE WITH NOTICES 2006-79, 2007-86 AND SUBSEQUENT GUIDANCE

 

The capitalized terms below shall have the same meaning as provided in Article 1 of the Plan.

 

Opportunity to Make New (or Revise Existing) Distribution Elections.

 

Notwithstanding the required deadlines for the submission of distribution elections under the Plan, the Committee may, to the extent permitted by Notice 2006-79, provide a limited period in which Participants may make new distribution elections, or revise existing distribution elections, with respect to amounts subject to the terms of the Plan, by submitting an Election Form on or before the deadline established by the Committee, which for amounts that would otherwise be paid to the Participant in 2008 shall in no event be later than December 31, 2007.  If any distribution election submitted by a Participant in accordance with this paragraph either (a) relates to an amount that would otherwise be paid to the Participant in 2007, or (b) would cause an amount to be paid to the Participant in 2007, such election shall not be effective.

 

In addition, notwithstanding the required deadlines for the submission of distribution elections under the Plan, the Committee may, to the extent permitted by Notice 2007-86, provide a limited period in which Participants may make new distribution elections, or revise existing distribution elections, with respect to amounts subject to the terms of the Plan, by submitting an Election Form on or before the deadline established by the Committee, which for amounts that would otherwise be paid to the Participant after 2008 shall in no event be later than December 31, 2008.  If any distribution election submitted by a Participant in accordance with this paragraph either (a) relates to an amount that would otherwise be paid to the Participant in 2008, or (b) would cause an amount to be paid to the Participant in 2008, such election shall not be effective.

 

Any distribution election(s) made by a Participant, and accepted by the Committee, in accordance with this Appendix A shall not be treated as a change in either the form or timing of a Participant’s benefit payment for purposes of Code Section 409A or the Plan.

 

The Committee may provide further transition relief for new distribution elections and changes in existing distribution elections with respect to amounts subject to the terms of the Plan to the extent permitted in future Treasury Department or Internal Revenue Service guidance.

 

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