Document:

exhibit_10-60.htm

 

Exhibit 10.60

 

PERFORMANCE UNIT AWARD AGREEMENT

 

This instrument is issued as of the 17th day of February, 2011, by ONEOK, Inc., an Oklahoma corporation, (hereinafter referred to as “Corporation”), to «Officer Name» (hereinafter referred to as “Grantee”), an employee of the Corporation or a division or subsidiary thereof, pursuant to the terms of the ONEOK, Inc. Equity Compensation Plan, effective February 17, 2005, as amended (hereinafter referred to as the “Plan”).

 

1. Performance Unit Award.  This instrument and that certain Notice of Performance Unit Award and Agreement, dated February 17, 2011, a copy of which is attached hereto and incorporated herein by reference (the “Notice of Performance Unit Award and Agreement”), constitute evidence of the issuance and grant of a Performance Unit Award (hereinafter referred to as “Award”) of «No of Perf Units» Performance Units to the Grantee by the Corporation that shall entitle the Grantee to receive shares of the Corporation’s Common Stock (hereinafter also referred to as “Common Stock”) or cash, all pursuant and subject to the terms, provisions, and conditions of this instrument (including, without limitation, the conditions, restrictions and limitations stated in paragraph 5, below) and the terms and provisions of the Plan, which are incorporated herein by reference.  This instrument, when executed by the Grantee, together with the Notice of Performance Unit Award and Agreement constitute an agreement between the Corporation and the Grantee.  Notwithstanding the foregoing, should there be any inconsistency between the provisions of this instrument and the terms and provisions of the Award stated in the resolutions and records of the Board of Directors of the Corporation providing for the Award or provisions of the Plan, the provisions of such resolutions and records and of the Plan shall control.  The grant of such Performance Units to the Grantee shall be effective in the manner and to the extent provided in this instrument and the Plan as to all or any part of the shares of Common Stock subject to the grant from time to time during the period stated herein.

 

2. Plan.  The Award is made to the Grantee pursuant to the terms and provisions of the Plan, as approved by the Shareholders of the Corporation, which Plan provides that a specific aggregate number of shares of Common Stock of the Corporation may be issued or transferred pursuant to Stock Incentives under the Plan.  The Plan specifies the authority of the Corporation, its Board of Directors, and a committee of the Board of Directors to select employees to be granted Stock Incentives under the Plan.   The Executive Compensation Committee of the Board of Directors (hereinafter referred to as the “Committee”) is authorized to administer the Plan with respect to this instrument and the grant of the Award made to the Grantee pursuant to the Plan.  Except where expressly stated or clearly indicated otherwise by the terms of this instrument, all terms, words and phrases used herein shall have the same meaning and effect as stated in the Plan.  The Grantee has been provided a complete copy of the Plan with this instrument.

 

3. Grantee’s Agreement Concerning Award and Employment.  In consideration of the Corporation’s granting of the Award of Performance Units and entitlement to shares of Common Stock, as incentive compensation to Grantee pursuant to this instrument, the Grantee, by acceptance thereof, and signing this instrument evidencing its terms, agrees to such terms and to continue to contribute and perform service in the employ of the Corporation or a division or subsidiary thereof, at the direction, will and pleasure of the Corporation and the Board of 

 

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Directors.  Provided, however, neither the foregoing agreement of the Grantee in this paragraph 3, nor any other provision in this instrument shall confer on the Grantee any right to continue in the employ of the Corporation (or a division or Subsidiary thereof), or interfere in any way with the right of the Corporation (or such division or Subsidiary) to terminate the Grantee’s employment at any time.

 

4. Registration of Stock; Grantee’s Representation With Respect To Acquiring for Investment.  It is intended by the Corporation that the Plan and the shares of Common Stock covered by the Award issued and granted to the Grantee referred to in paragraph 1, above, are to be registered under the Securities Act of 1933, as amended, prior to the date of the grant; provided, that in the event such registration is for any reason not made effective for such shares, the Grantee agrees, for the Grantee, and for the Grantee’s permissible assignees, heirs and legal representatives by inheritance or bequest, that all shares acquired pursuant to the grant will be acquired for investment and not with a view to, or for sale or tender in connection with the distribution of any part thereof, including any transfer or distribution of such shares by the Grantee pursuant to the grant and this instrument or as otherwise allowed by the Plan.

 

5. Terms and Conditions of Award; Transfer of Stock to Grantee.  The issue and grant of the Award of Performance Units to the Grantee stated in paragraph 1, above, shall be subject to the following terms and conditions:

 

(a) The right to ownership and transfer of the Performance Units granted to the Grantee shall be subject to the Award during the period beginning February 17, 2011, the date of the grant thereof (hereinafter referred to as “Grant Date”), and ending on  February 17, 2014, (which period is hereinafter referred to as “Performance Period”), as herein provided.

 

(b) The Grantee shall earn and become entitled to receive a percentage of the number of Performance Units granted under paragraph 1, above, at the expiration of the Performance Period as provided for in Exhibit A and Exhibit B, attached hereto, based upon the Corporation’s ranking for Total Stockholder Return in the ONEOK Peer Group listed in Exhibit C attached hereto, all as determined by the Committee, in its sole discretion (the “Performance Goal”).

 

(c) Upon expiration of the Performance Period, the Grantee shall be entitled to receive one (1) share of Common Stock for each Performance Unit that becomes earned by and vested in the Grantee pursuant to the Award; provided, no fractional shares shall be issued and any amount attributable to a fractional share shall be paid to the Grantee in cash.

 

(d) All Common Stock the Grantee becomes entitled to receive pursuant to the Award and any other compensation payable to the Grantee under the Award shall be paid, distributed, transferred  and issued by the Corporation to the Grantee at the expiration of the Performance Period, or as soon as practicable after the determination that the Grantee has earned and become entitled to Performance Units and to receive such Common Stock and cash, as determined by the Committee,  and in no event later than the 15th day of the third month after the date of expiration of the Performance Period, and the Grantee shall not be permitted, directly or indirectly, to designate the time of payment, distribution or transfer or the taxable year in which it is to be made. Provided, that if the Grantee elects pursuant to paragraph 6, below, to 

 

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defer the receipt of all Performance Units, Common Stock and cash for each Performance Unit that becomes earned by and vested in the Grantee pursuant to the Award, the payment, distribution and transfer of such Performance Units, Common Stock and cash shall be deferred and thereafter paid, distributed and transferred by the Corporation to the Grantee at the specified time and in accordance with the method of payment, distribution and transfer that is elected in by the Grantee in accordance with the election provisions set forth therein.

 

(e) The Grantee shall not be entitled to vote any shares of Common Stock of the Corporation, or otherwise have any right or interest as a Common Stock shareholder by reason of the Performance Unit Award granted under the Award during the Performance Period, and prior to the actual transfer of Common Stock to the Grantee pursuant to the Award.

 

(f) No dividends or any similar amounts shall be payable or paid with respect to Performance Units, Common Stock earned under the Award, or the Award during or for the Performance Period.

 

(g) The Grantee shall have no right to receive cash or acquire shares of Common Stock of the Corporation under the Award other than the cash and Common Stock attributable to the Performance Units earned by the Grantee to the extent provided for herein.

 

(h) The Common Stock or cash to which the Grantee becomes entitled shall be paid and transferred to the Grantee only upon the determination of the Performance Units earned by the Grantee at the expiration of the Performance Period.  The payment and transfer of such Common Stock or cash to the Grantee shall be made as soon as reasonably practicable after the expiration of the Performance Period, as determined and directed by the Committee, in its sole discretion.

 

(i) The Performance Units or any Common Stock or cash to be paid or transferred to Grantee pursuant to the Award may not be sold, assigned, transferred, pledged, encumbered or otherwise disposed of by Grantee or any other person except as provided in the Award and the Plan until the expiration of the Performance Period and payment and transfer of Common Stock or cash pursuant to the Agreement and Plan.

 

(j) The Grantee shall become entitled to receive Performance Units earned, and shall become owner of the shares of Common Stock or cash paid and transferred to the Grantee pursuant to the Award free and clear of all terms, conditions and restrictions imposed by the Award if the Grantee’s employment by the Corporation does not terminate during the Performance Period; provided, that the Grantee shall become entitled to a prorated amount of Performance Units and the terms and conditions imposed by the Award shall partially cease to apply in certain events to the extent described in paragraph 7(d), below.

 

(k) If the Grantee’s employment with the Corporation (or a division or Subsidiary thereof) terminates prior to the end of the Performance Period other than by reason of Retirement, Total Disability or death, the Grantee shall forfeit all of the Grantee’s right, title or interest in the Performance Units; and the Grantee shall forfeit such right, title and interest in the Performance Units regardless of the reason for such termination of employment.  Any such termination of employment of the Grantee described in the preceding sentence shall not be 

 

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deemed to occur by reason of transfer of employment of the Grantee by or between the Corporation and any division or Subsidiary of the Corporation.  Upon a forfeiture the Performance Units forfeited shall be cancelled for all purposes.

 

6. Deferral of Payment, Distribution and Transfer of Stock.

 

(a)           The Grantee may irrevocably elect to defer the time of  payment, distribution and transfer of Performance Units , Common Stock and cash that the Grantee becomes entitled to receive under this Agreement and Award from the end of the Performance Period generally provided for in paragraph 5, above, to a specified time by filing with the Committee, on or before the deferral election date (hereinafter referred to as "Election Date") described in paragraph 6(b), below, a signed written irrevocable election (hereinafter referred to as "Election") which shall be in the form substantially the same as attached hereto as Exhibit D, or as otherwise prescribed by the Committee.

(b)           An Election of the Grantee to defer the payment, distribution and transfer of Performance Units, Common Stock and cash that the Grantee becomes entitled to receive under this Agreement and Award shall be filed by the Grantee with the Committee on or before the Election Date, which shall be August 17, 2013, the date that is six (6) months before the end of the Performance Period, provided that the Grantee performs services for the Corporation continuously from the later of the beginning of the Performance Period or the date the performance criteria are established through the date the Election is made under this paragraph 6(b), and provided, further, that in no event may the Grantee make an Election to defer the payment, distribution and transfer of Performance Units, Common Stock or cash after such compensation has become readily ascertainable; and in this regard for purposes of this paragraph 6(b), if the amount of Performance Units, Common Stock and cash, or other compensation, as performance-based compensation, is a specified or calculable amount, then it shall be considered compensation that is readily ascertainable if and when the amount is first substantially certain to be paid, distributed and transferred to the Grantee. If the amount of Performance Units, Common Stock and cash, or other compensation, is performance-based compensation that is not a specified or calculable amount because, for example, the amount may vary based upon the level of performance, such compensation, or any portion of the compensation, shall be considered readily ascertainable when the amount is first both calculable and substantially certain to be paid. For this purpose, such performance-based compensation is to be bifurcated between the portion that is readily ascertainable and the amount that is not readily ascertainable, and, in general, any minimum amount that is both calculable and substantially certain to be paid shall be treated as readily ascertainable.

 

(c)           A Grantee that makes an Election to defer payment, distribution and transfer of Performance Units, Common Stock and cash that the Grantee becomes entitled to receive under this Agreement and Award may irrevocably elect to have payment, distribution and transfer made to the Grantee at a Specified Time, that shall be either (i) the later of (A) the date of the Grantee's separation from service with the Corporation, or (B) a specified calendar date, or (ii) the date of the Grantee's separation from service with the Corporation; and may elect to have payment made in a specified form of payment that shall be either (i) a single lump sum payment, distribution and transfer, or (ii) a payment, distribution and transfer in two, three, four 

 

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or five equal annual installments commencing at the Specified Time elected by the Grantee hereunder and thereafter on each anniversary thereof, until fully paid, transferred and distributed.

 

(d)           The Award shall be subject to such other rules and requirements as the Committee, in its sole discretion, may determine to be appropriate with respect to administration thereof and the restrictions made applicable to the Grantee and the Performance Units during the Performance Period.  This instrument and the rights and obligations of the parties involved, shall be subject to interpretation and construction by the Committee to the same extent and with the same effect as the Committee actions under pertinent provisions of the Plan.  The Grantee shall take all actions and execute and deliver all documents as may from time to time be requested by the Committee in connection with such restrictions and in furtherance hereof.  The Grantee agrees to pay to the Corporation any applicable federal, state, or local income, employment, social security, Medicare, or other withholding tax obligation arising in connection with the grant of the Award to the Grantee; and the Corporation shall have the right, without the Grantee’s prior approval or direction, to satisfy such withholding tax by withholding all or any part of the Common Stock that would otherwise be transferred and delivered to the Grantee, with any shares of Common Stock so withheld to be valued at the Fair Market Value (as defined in the Plan) on the date of such withholding. The Grantee, with the consent of the Corporation, may satisfy such withholding tax by delivery and transfer to the Corporation of shares of Common Stock previously owned by the Grantee, with any shares so delivered and transferred to be valued at the Fair Market Value on the date of such delivery.

 

(e)           The provisions of this instrument providing for the deferral of payment, distribution, transfer or issuance of Performance Units, Common Stock or cash shall be applicable solely and exclusively to the Grantee and the Award Agreement and Award referred to herein, and shall not apply to any other stock incentive or other grant, award or transfer provided for or made under the Plan.

 

(f)           Notwithstanding anything otherwise provided under the Plan or in the Award Agreement and Award, the following requirements shall apply to this Award Agreement and the Award, to all elections or subsequent elections made by the Grantee, and to all distributions and payments made to the Grantee pursuant to this Award Agreement and Award:

 

(1)           Any compensation for services performed by the Grantee during a taxable year may be deferred at the Grantee's election or the Corporation's election or determination only if the election to defer such compensation is made not later than the close of the preceding taxable year or such other time as provided in Treasury Regulations under section 409A of the Internal Revenue Code of 1986, as amended ("Code"), but in all events any deferral of the payment, distribution, transfer or issuance of Performance Units, Common Stock or cash pursuant to the Award and Award Agreement may be made only by an election that is made on or before the Election Date.

 

(2)           Any compensation deferred under the Plan shall not be distributed earlier than

 

(i)           Separation from Service of the Grantee,

 

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(ii)            the date the Grantee becomes Disabled,

 

(iii)           death of the Grantee,

 

                   (iv)           a Specified Time (or pursuant to a Fixed Schedule) specified under the plan under which the compensation is deferred at the date of deferral of such compensation,

 

(v)            a Change in Ownership or Control, or

 

(vi)           the occurrence of an Unforeseeable Emergency.

 

(3)           If the Grantee is a Specified Employee, no payment or distribution shall be made before the date which is six (6) months after the date of the Grantee's Separation from Service, or, if earlier, the date of death of the Grantee.

 

(4)           No acceleration of the time or schedule of any distribution or payment under the plan under which compensation is deferred shall be permitted or allowed, except to the extent provided in Treasury Regulations issued under Code section 409A.

 

(5)           This instrument shall not permit a subsequent election unless authorized and agreed upon in writing by the Corporation and Grantee, and if the Plan or this instrument permits under any subsequent election by the Grantee a delay in a payment or a change in the form of payment of compensation deferred under this Award Agreement and Award, such subsequent election shall not take effect until at least twelve (12) months after the date on which it is made.  In the case of a subsequent election related to a payment to be made upon Separation from Service of the Grantee, at a Specified Time or pursuant to a Fixed Schedule, or upon a Change in Ownership or Control, the first payment with respect to which such subsequent election is made shall be deferred for a period of not less than five (5) years from the date such payment would otherwise have been made; and any such subsequent election related to a payment at a Specified Time or pursuant to a Fixed Schedule may not be made less than twelve (12) months prior to the date of the first scheduled payment to which it relates.

 

(6)           For purposes of the Plan and this instrument and the Award, the following terms and definitions shall apply with respect to deferral of compensation and the time of payment of any deferred compensation:

 

(i)           "Change of Ownership or Control" means to the extent provided by Treasury Regulations issued under Code Section 409A, a change in the ownership or effective control of the Corporation, or in the ownership of a substantial portion of the assets of the Corporation, which shall be if (i) a Person acquires more than 50% of the  Corporation’s stock; (ii) a Person acquires during a 12-month period at least 30% (or a higher percentage specified under the Plan) of the Corporation’s stock; (iii) a majority of the members of the Board of Directors of the Corporation are replaced during a 12-month period; or (iv) a  Person acquires during a 12-month period at least 40% of the gross fair market value of the Corporation’s assets.

 

(ii)             "Disabled" means that an individual (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental 

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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 (ii)  is, 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 3 months under an accident and health plan covering employees of the individual's employer.

 

(iii)           "Fixed Schedule" means the distribution or payment of compensation deferred under this instrument and Award in a fixed schedule of distributions or payments that are determined and fixed at the time the deferral of such compensation is first elected by the Grantee or the Corporation.

 

(iv)           "Specified Employee" means a key employee (as defined in Code section 416(i) without regard to paragraph (5) thereof) of the Corporation.

 

(v)           "Specified Time" means a specified date at which deferred compensation deferred by or for the Grantee pursuant to this instrument and Award is required to be distributed or paid and which is specified at the time of the election of deferral of such deferred compensation

 

(vi)           “Unforeseeable Emergency” means a severe financial hardship to the participant resulting from an illness or accident of the participant, the participant's spouse, or a dependent (as defined in Code section 152(a)) of the participant, loss of the participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant. As determined under Treasury Regulations under Code section 409A, the amounts distributed with respect to an emergency shall not exceed the amounts necessary to satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the participant's assets (to the extent the liquidation of such assets would not itself cause severe financial hardship)."

 

7. Transferability of Performance Units; Termination of Employment.

 

(a)           Except as provided in subparagraph (b) of this paragraph 7, below, the Award, the Grantee’s rights and obligations hereunder and the Performance Units granted hereunder shall not be transferable by the Grantee otherwise than by will or the laws of descent and distribution which apply to the Grantee’s estate.

(b)           Notwithstanding the foregoing, the Grantee may transfer any part or all of the Grantee’s rights in and to the Performance Units to members of the Grantee’s immediate family, or to one or more trusts for the benefit of such immediate family members, or partnerships in which such immediate family members are the only partners if the Grantee does not receive any consideration for the transfer.  In the event of any such transfer, Performance Units shall continue to be subject to the same terms and conditions otherwise applicable hereunder and under the Plan immediately prior to its transfer, except that this stock shall not be further transferable by the transferee inter vivos, except for transfer back to the original Grantee.  

 

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For any such transfer to be effective, the Grantee must provide prior written notice thereof to the Committee, unless otherwise authorized and approved by the Committee, in its sole discretion; and the Grantee shall furnish to the Committee such information as it may request with respect to the transferee and the terms and conditions of any such transfer.  For purposes of transfer of this grant under this subparagraph (b), “immediate family” shall mean the Grantee’s spouse, children and grandchildren.

(c)           Notwithstanding anything to the contrary expressed or implied herein (including without limitation, the restrictions stated in paragraph 5, above, applicable to the Performance Units), all rights and interest of the Grantee in the Performance Units shall become invalid and wholly terminated and forfeited upon the termination of the Grantee’s employment with the Corporation (or a division or Subsidiary), during the Performance Period other than a termination by reason of Retirement, Total Disability or death of the Grantee.

 

(d)           Notwithstanding the foregoing provisions, in the event of termination of the Grantee’s employment with the Corporation (or a division or Subsidiary) during the Performance Period by reason of (i) the Retirement of the Grantee, (ii) the Total Disability of the Grantee, or (iii) the Grantee’s death while still employed by the Corporation (or a division or Subsidiary), then an adjusted and prorated entitlement to Performance Units shall be allowed as provided in this paragraph 7(d). The Grantee shall become vested in and entitled to receive, in the event of any such Retirement or Total Disability, and the legatees, designated Beneficiary, or personal representatives or heirs of the Grantee shall be vested in and entitled to receive, in the event of the Grantee’s death, a prorated award of Performance Units earned in the Performance Period following such Retirement, Total Disability or death.  The award shall be a prorated amount of Performance Units equal to the total of Performance Units earned under the Award at the end of the Performance Period for the Grantee, multiplied by a fraction of which the numerator shall be the number of full months which have elapsed under the Performance Period at the time of such termination of employment by reason of Retirement, Total Disability or death, and the denominator of which shall be the total number of months in the Performance Period. The Grantee, legatees, designated Beneficiary, or personal representatives or heirs of the Grantee, as the case may be, shall become entitled to receive such prorated award at the expiration of the Performance Period and following application of the performance criteria as provided in the Award and determined by the Committee.

The prorated award of Performance Units earned in the Performance Period to which the Grantee or the legatees, a designated Beneficiary, or the personal representative or heirs of the Grantee shall become vested in and entitled to receive under the foregoing provisions in event of Retirement, Total Disability or death of the Grantee, is to be qualified performance-based compensation paid solely on account of attainment of the Performance Goal,  as provided for in Treas. Reg. §1.162-27(e)(2)(i).  The Retirement, Total Disability or death of the Grantee during the Performance Period in and of itself alone shall in no case vest the Grantee in Performance Units or any part of thereof. A prorated vesting and entitlement to Performance Units or a part thereof, hereunder by reason of such events shall in all cases remain subject to and dependent solely upon the attainment of the Performance Goal as provided herein.

(e)           The Grantee may designate a Beneficiary to receive any rights of the Grantee which may become vested in the event of the death of the Grantee under procedures and 

 

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in the form established by the Committee; and in the absence of such designation of a Beneficiary, any such rights shall be deemed to be transferred to the estate of the Grantee.

(f)           For purposes of the Award and this instrument, "Retirement" shall mean a voluntary termination of employment of the Grantee with the Corporation and/or a division or subsidiary thereof by the Grantee if at the time of such termination of employment the Grantee has both completed five (5) years of service with the Corporation and/or a division or subsidiary thereof and attained age fifty (50), and “voluntary termination” shall mean that the Grantee had an opportunity to continue employment with the Corporation and/or a division or subsidiary thereof, but did not do so; and except as provide for in paragraph 6 with respect to deferred compensation payments, “Total Disability” shall mean that the Grantee is permanently and totally disabled and unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months, and has established such disability to the extent and in the manner and form as may be required under the provisions of Section 22(e) of the Internal Revenue Code of 1986, as amended (or corresponding section of any future federal tax code), and regulations thereunder.

8. Administration of Performance Unit Award.  The grant of the Award shall be subject to such other rules and requirements as the Committee, in its sole discretion, may determine to be appropriate with respect to administration thereof and the terms and conditions made applicable to the Grantee and the Performance Units during the Performance Period.  The Award, this instrument, and the rights and obligations of the parties thereto shall be subject to interpretation and construction by the Committee to the same extent and with the same effect as the Committee actions under pertinent provisions of the Plan.  The Grantee shall take all actions and execute and deliver all documents as may from time to time be requested by the Committee in connection with such restrictions and in furtherance hereof.  The Grantee agrees to pay to the Corporation any applicable federal, state, or local income, employment, social security, medicare, or other withholding tax obligation arising in connection with the grant of the Award to the Grantee; and the Corporation shall have the right, without the Grantee’s prior approval or direction, to satisfy such withholding tax by withholding all or any part of the shares of Common Stock or cash that would otherwise be paid and transferred to the Grantee, with any shares of Common Stock so withheld to be valued at the Fair Market Value (as defined in the Plan) on the date of such withholding. The Grantee, with the consent of the Corporation, may satisfy such withholding tax by delivery and transfer to the Corporation of shares of Common Stock previously owned by the Grantee, with any shares so delivered and transferred to be valued at the Fair Market Value on the date of such delivery.

 

9. Adjustment Provisions.  It is understood that, prior to the expiration of the Performance Period certain changes in capitalization of the Corporation may occur.  It is, therefore, understood and agreed with respect to changes in capitalization that:

 

(a)      If a stock dividend is declared on the Common Stock of the Corporation, there shall be added to the number of Performance Units provided for under the Award and stated in paragraph 1 of this instrument, the number of Performance Units equal to the number of Performance Units which would have been granted to the Grantee had the Grantee been the fully vested and unrestricted owner of the number of Performance Units then provided for under the 

 

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Award granted, but not theretofore received without restriction; provided, however, that the additional Performance Units shall be subject to all terms and provisions of this instrument (including, without limitation, the terms and conditions stated in paragraph 5, above), and in making such adjustments, no fractional units, shares, or scrip certificates in lieu thereof, shall be granted or issuable by the Corporation, and the Grantee shall be entitled to only the number of full Performance Units to which the Grantee may be entitled by reason of such adjustment at the adjusted grant.

(b)      In the event of an increase in the outstanding shares of Common Stock of the Corporation, effectuated for the purpose of acquiring properties or securities of another corporation or business enterprise, there shall be no increase in the number of Performance Units which are the subject matter of the Award under this instrument as a result of such acquisition.

(c)      In the event of an increase or decrease in the number of outstanding shares of Common Stock of the Corporation through recapitalization, reclassification, stock split-ups, consolidation of shares, changes in par value and the like, an appropriate adjustment shall be made in the number of Performance Units provided for under the Award and stated in Section 1 of this instrument, by increasing or decreasing the number of Performance Units, as may be required to enable the Grantee to acquire the same proportionate stockholdings as the grant of the Award would originally have provided.  Provided, however, that any additional Performance Units shall be subject to all terms and provisions of this instrument (including, without limitation, the restrictions stated in paragraph 5, above), and that in making such adjustments, no fractional Performance Units shall be awarded, and the Grantee shall be entitled to receive only the number of full Performance Units to which the Grantee may be entitled by reason of such adjustment.

(d)           Except as otherwise provided for with respect to the payment of any deferred compensation in paragraph 6, above,  to the extent Performance Units are still not vested in Grantee at the time of a Change in Control with respect to the Corporation, then pursuant to the provisions of the Plan, they shall become fully vested and completely free and clear of any conditions or restrictions stated herein at that time; provided, that if such Change in Control occurs less than six (6) months after the date of the grant of the Award hereunder to the Grantee, then Performance Units shall become fully vested and completely free and clear of any conditions or restrictions stated herein at the time of such Change in Control only if the Grantee agrees in writing, if requested by the Corporation in writing, to remain in the employ of the Corporation or a division or subsidiary of the Corporation at least through the date which is six (6) months after the date the grant was made with substantially the same title, duties, authority, reporting relationships, and compensation as on the day immediately preceding the Change in Control.  The provisions of this subparagraph (d) shall be applied in addition to, and shall not reduce, modify, or change any other obligation or right of the Grantee otherwise provided for in paragraph 3, above, concerning the Grantee’s continued employment with the Corporation or the termination thereof.  If the Performance Units become subject to this subparagraph (d), they shall become fully vested in the Grantee and nonforfeitable.  The Performance Units are subject to the provisions of the Plan authorizing the Corporation, or a committee of its Board of Directors, to provide in advance or at the time of a Change in Control for cash to be paid in actual settlement of the shares of Common Stock for earned Performance Units, all subject to such terms and 

 

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conditions as the Corporation or the Committee, in its sole discretion, may determine and impose.  For purposes of this subparagraph (d), the term “Change in Control” shall have the same meaning as provided in the definition of that term stated in the Plan, including any amendments thereof which may be made from time to time in the future pursuant to the provisions of the Plan, with any amended definition of such term to apply to all events thereafter coming within the amended meaning.

10. Required Grantee Repayment/Reduction Provision.  Notwithstanding anything in the  Plan, the Award or this instrument to the contrary, all or a portion of the Award made to the Grantee  under this instrument  is subject to being called for repayment to the Corporation or reduced in any situation where the Board of Directors of the Corporation or a Committee thereof determines that fraud, negligence, or intentional misconduct by the Grantee  was a contributing factor to the Corporation having to restate all or a portion of its financial statement(s). The Committee may determine whether the Corporation  shall effect any such repayment or reduction : (i) by seeking repayment from the Grantee , (ii) by reducing (subject to applicable law and the terms and conditions of the Plan or any other applicable plan, program, or arrangement) the amount that would otherwise be awarded or payable to the Grantee  under the Award, the Plan or any other compensatory plan, program, or arrangement maintained by the Corporation , (iii) by withholding payment of future increases in compensation (including the payment of any discretionary bonus amount) or grants of compensatory awards that would otherwise have been made in accordance with the Corporation's  otherwise applicable compensation practices, or (iv) by any combination of the foregoing. The determination regarding the Grantee’s conduct, and repayment or reduction under this provision shall be within the sole discretion of the Committee and shall be final and binding on the Grantee and the Corporation. The Grantee, in consideration of the grant of the Award, and by the Grantee's execution of this instrument, acknowledges the Grantee's understanding of and agreement to this provision, and hereby agrees to make and allow an immediate and complete repayment or reduction in accordance with this provision in the event of a call for repayment or other action by the Corporation or Committee to effect its terms with respect to the Grantee, the Award and/or any other compensation described herein.

 

11. Stock Reserved.  The Corporation shall at all times during the term of the Award reserve and keep available such number of shares of its Common Stock as will be sufficient to satisfy the Award issued and granted to Grantee and the requirements thereof as evidenced by this instrument, and shall pay all original issue taxes, if any, on the transfer of Common Stock to the Grantee, and all other fees and expenses necessarily incurred by the Corporation in connection therewith.

 

12. Rights of Shareholder.  Except as otherwise provided in the Award and this instrument, the Grantee shall have no rights as a shareholder of the Corporation in respect of the Performance Units or Common Stock for which the Award is granted; and the Grantee shall not be considered or treated as a record owner of shares with respect to the Common Stock until the Performance Units are fully vested and no longer subject to any of the conditions, performance requirements, or restrictions imposed under the Award, and Common Stock is actually issued and transferred to the Grantee.

 

13. Entire Agreement.  This instrument contains the entire terms of the Award, and may not be changed orally or other than by a written instrument issued and approved by the 

 

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Corporation pursuant to the Plan.  This instrument supersedes any agreements or understandings that may previously have existed, and there are no other agreements or understandings, relating to its subject matter.

 

14. Successors and Assigns.  The Award shall inure to the benefit of and be binding upon the heirs, legatees, legal representatives, successors, and assigns of the parties thereto.

 

The Grantee hereby acknowledges receipt of this instrument, the Notice of Performance Unit Award and a copy of the Plan, and accepts the Award under the terms and conditions stated in this instrument, subject to all terms and provisions of the Plan, by signing this instrument in duplicate originals, as of the date first above written.

 

 

	______________________________________________	___________________________________________
	Date	«Officer_Name»
	 	Grantee

 

-12-

  

  

Exhibit A

Performance Units Criteria

2011-2014 Performance Period

 

	
Total Stockholder Return (TSR):vs. ONEOK Peer Group

 

	
ONEOK TSR Ranking vs. ONEOK Peer Group

	
Percentage of Performance Units Earned

	
90th percentile and above

75th percentile

50th percentile

25th percentile

Below 25th percentile

	
200%

150%

100%

50%

0%

IF ONEOK’s TSR ranking at the end of the performance period is between the stated percentile levels in the above table, the percentage of the performance units earned will be interpolated between the earning levels.  No Performance Units are earned if ONEOK’s TSR ranking at the end of the performance period is below the 25th percentile.

  

  

  

Exhibit B

Illustration of Hypothetical 2011-2014 Performance Period

Performance Unit Award Calculation

 

Illustration assumes 1,000 Performance Units Granted in February 2011

 

	
Total Stockholder Return (TSR) vs. ONEOK Peer Group

	
 

Hypothetical 2011-2014 ONEOK TSR Ranking = 40th percentile

 

A 40th percentile TSR ranking earns 80% of Performance Units granted (i.e., 1,000 units)

as interpolated between 50% and 100% from Table A (see chart below)

 

800 units earned

 

	
Total Performance Units Earned

	
 

TR 800 Performance Units

 

800 performance units earned out of 1,000 units granted = 80.0% “earn-out” [80% (1,000 shares) paid and distributed in the form of Common Stock as provided in section 5.c.]

 

  

  

  

 

Exhibit C

	
ONEOK PEER GROUP – 2011

	  	  	  
	
Company Name

	
Sym

	  
	  	  	  
	
AGL Resources Inc.

	
ATG

	  
	
ATMOS Energy

	
ATO

	  
	
CenterPoint Energy Inc.

	
CNP

	  
	
DCP Midstream Partners LP

	
DPM

	  
	
Enbridge Inc.

	
ENB

	  
	
Energy Transfer Partners LP

	
ETP

	  
	
Enterprise Prods Prtner LP

	
EPD

	  
	
Kinder Morgan Energy LP

	
KMP

	  
	
OGE Energy CP

	
OGE

	  
	
National Fuel Gas Company

	
NFG

	  
	
New Jersey Resources Corp

	
NJR

	  
	
NICOR Inc.

	
GAS

	  
	
NiSource Inc.

	
NI

	  
	
ONEOK, Inc.

	
OKE

	  
	
Piedmont Natural Gas Company

	
PNY

	  
	
SEMPRA Energy

	
SRE

	  
	
Southern Union Company

	
SUG

	  
	
Southwest Gas Corporation

	
SWX

	  
	
Spectra Energy Corporation

	
SE

	  
	
Transcanada Corporation

	
TRP

	  
	
UGI Corporation

	
UGI

	  
	
Vectren Corporation

	
VVC

	  
	
WGL Holdings Inc.

	
WGL

	  
	
Wisconsin Energy Corp

	
WEC

	  

 

  

  

  

Exhibit D

ONEOK, INC. EQUITY COMPENSATION PLAN

PERFORMANCE UNIT AWARD AGREEMENT

DEFERRAL ELECTION

This Election is made by the undersigned Grantee pursuant to that certain Performance Unit Award granted to me under the ONEOK, Inc. Equity Compensation Plan, on the 17th day of February 2011, a copy of which is attached hereto (the "Award").

This Election is made on or before the date of August 17, 2013, which is six (6) months before the end of the Performance Period on February 18, 2013.

I hereby irrevocably elect to defer the payment, distribution and transfer and my receipt of all Performance Units, Common Stock and cash that I may earn and become entitled to receive from the regularly scheduled time of payment, distribution and transfer provided for in Section 5(d) of the Award, until a later date as follows:

A.           Election of Specified Time of Payment  (Initial one election of time of payment)

___           I elect to have all Common Stock, cash or other compensation which I earn or become entitled to receive under the Award and Award Agreement deferred and paid, distributed, transferred and issued to me on the later of (i) the date of my separation from service as an employee of the Corporation , or (ii) _________________, 20__ in the form specified below.

___           I elect to have all Common Stock, cash or other compensation which I earn or become entitled to receive under the Award and Award Agreement deferred and paid, distributed, transferred and issued to me on the date of my separation from service as an employee of the Corporation.

B.           Election of Form of Payment  (Initial one election of form of payment)

___           I elect to receive payment, transfer and distribution of all Common Stock, cash or other compensation which I earn or become entitled to receive under the Award or Award Agreement in a single lump sum payment.

___           I elect to receive payment, transfer and distribution of all Common Stock, cash or other compensation which I earn or become entitled to receive under the Award or Award Agreement in ______(specify 2, 3, 4 or 5) equal annual installments commencing on the specified date of payment elected above, and thereafter on each anniversary thereof until fully paid and transferred. The number of shares of Common Stock or cash received in each installment will equal the number and amount that have not been settled, paid, transferred and distributed (as of the date immediately preceding the installment payment date) divided by the number of installments remaining to be paid (as of the date immediately preceding the installment payment date) rounded down to the next whole number except that the final installment shall be rounded up to the next whole number.

  

  

  

C.            Election for Death Prior to Specified Time of Payment   (Put initials by your choice)

___           In the event of my death prior to the Specified Time of Payment that I have elected above, I elect to have my named beneficiaries receive payment and transfer of the Common Stock, cash or other deferred compensation in a single lump sum within 60 days following my death.

___           In the event of my death prior to the Specified Time of Payment that I have elected above, I elect to have my named beneficiaries receive payment and transfer of the Common Stock, cash or other deferred compensation be paid and transferred in ______ (specify 2, 3, 4 or 5) equal annual installments commencing within 60 days following my death, and thereafter on each anniversary of the commencement date until fully paid and transferred. The number of shares of Common Stock or cash received in each installment will equal the number and amount that have not been paid (as of the date immediately preceding the installment payment date) divided by the number of installments remaining to be paid (as of the date immediately preceding the installment payment date) rounded down to the next whole number except that the final installment shall be rounded up to the next whole number.

D.           Election for Death After Specified Time of Payment (Put initials by your choice)

___           In the event of my death after the Specified Time of Payment elected above, I elect to have my named beneficiaries receive payment and transfer of the Common Stock, cash or other deferred compensation in a single lump sum within 60 days following my death.

___           In the event of my death after the Specified Time of Payment that I have elected above, I elect to have my named beneficiaries receive payment of any remaining Common Stock, cash or other compensation in accordance with the installment schedule elected above.

E.           Designation of Beneficiary (List each beneficiary and percentage)

I designate the following individuals (entities) as my beneficiaries to receive the following share(s) of my Common Stock, cash or other deferred compensation, as indicated below:

Name of Beneficiary                                                                                                Percent

_______________________________________                                     __________

_______________________________________                                     __________

_______________________________________                                     __________

_______________________________________                                     __________

_______________________________________                                     __________

100% (total must equal 100%)

F.           Change in Ownership or Control

Notwithstanding the foregoing, immediately following a Change in Ownership or Control the Common Stock, cash or other deferred compensation that have not been paid and transferred will be paid and transferred.  In the event shares of Common Stock no longer exist at the time of payment and transfer, each of the deferred Performance Units shall be converted in a manner that is consistent with the manner in which shareholders of Common Stock were treated with respect to the Change in Ownership or Control.

Solely for purposes of this election, a “Change in Ownership or Control” shall mean and shall have occurred if one of the following has occurred: A person acquires more than 50% (or a higher percentage specified under the Plan) of the Corporation’s stock;  a person acquires during a 12-month period at least 30% (or a higher percentage specified under the Plan) of the Corporation’s stock; a majority (or a higher percentage specified under the Plan) of the members of the Board of Directors of the Corporation are replaced during a 12-month period; or a person acquires during a 12-month period at least 40% (or a higher percentage specified under the Plan) of the gross fair market value of the Corporation’s assets.

  

  

  

Made and executed by me as Grantee of the Award pursuant to the terms and provisions of Section 6 thereof, on this _______day of ______________, 20___.

_____________________________________

Grantee

Received this ____day of ____________, 20___,

______________________________________

For the Committeeexhibit10_13.htm

INTERMEC, INC.

DIRECTOR DEFERRED COMPENSATION PLAN

 

(As Amended and Restated November 9, 2010)

 

1. Introduction.

 

(a)      Purpose. The purposes of the Intermec, Inc. Director Deferred Compensation Plan (the "Plan"), which is an amendment and restatement of the 2002 Director Stock Option and Fee Plan), are to further long-term growth of the Company by providing members of the Board of Directors of Intermec, Inc., a Delaware corporation (the "Company"), who are neither officers nor employees of the Company, the ability to defer receipt of their compensation, keeping their financial interests aligned with the Company, thereby providing them with a long-term incentive to remain in the service of the Company and increase their efforts for the success of the Company. The Plan is also intended to assist the Company in attracting experienced and qualified candidates to become members of the Board. The Plan is intended to be a continuation of the deferral components of the 2002 Director Stock Option and Fee Plan, as amended effective November 13, 2007 (the "2002 Plan").

 

(b)      Effective Date. The Plan is effective as of the date of the Company's 2008 Annual Meeting of Stockholders (the "Effective Date"), provided that the Plan will become effective only if Company's stockholders approve the 2008 Omnibus Incentive Plan at that meeting. The Plan is also effective with respect to all amounts under the 2002 Plan deferred on or after January 1, 2005 that remain unpaid as of the Effective Date. All amounts earned and vested as of December 31, 2004 shall continue to be governed by the terms of the 2002 Plan in place as of December 31, 2004 or any earlier applicable date in accordance with then applicable Internal Revenue Service ("IRS") guidance. All amounts earned or vested from January 1, 2005 through the day before the Effective Date shall be governed by this Plan, as modified by the operations of the Plan during such period in accordance with Section 409A and then applicable IRS guidance (including transition relief). No amendment to the Plan on and after January 1, 2005 is intended to, nor shall it be deemed to, apply to other than the terms and conditions of the Plan in effect prior to January 1, 2005 unless expressly provided by such amendment.

 

2. Definitions.

 

"2002 Plan" has the meaning set forth in Section 1(a).

 

"Account" means a Cash Account or a Share Account.

 

"Adverse Tax Consequences under Section 409A" means the accelerated inclusion of taxable income, 20% additional tax rate and associated interest charge that shall apply to any deferred compensation of a Director under Section 409A(a)(1)(B) of the Code.

 

"Affiliated Company" means (a) any corporation that is a member of a controlled group of corporations (as defined in Section 414(b) of the Code) that includes the Company, and (b) any trade or business that is under common control (as defined in Section 414(c) of the Code) with the Company.

 

"Beneficiary" means the person, trust or other entity designated by the Director to receive payment under the Plan in the event of the Director's death.

 

"Board" means the Board of Directors of the Company.

 

"Cash Account" means the bookkeeping account established by the Company for the deferral of Fees by Directors that shall be credited with earnings pursuant to Section 4(b) hereof.

 

"Change of Control" means a change (a) in the ownership of the Company (acquisition by one or more persons acting as a group, of more than 50% of the total voting power or fair market value of the Company); (b) in the effective control of the Company (acquisition or acquisitions during a 12-month period ending on the date of the last acquisition, by one or more persons acting as a group, of 30% or more of the voting power of the Company or replacement of a majority of the members of the Board during any 12-month period, not endorsed by the majority of the Board prior to the appointment or election); or (c) in the ownership of a substantial portion of the assets of the Company, in each case as provided in Section 409A and the regulations thereunder and interpretations thereof, as the same may be applicable from time to time.

 

"Claimant" has the meaning set forth in Section 9(a).

 

"Code" means the Internal Revenue Code of 1986, as amended.

 

"Common Stock" means the common stock, par value $.01 per share, of the Company.

 

"Company" has the meaning set forth in Section 1(a).

 

"Deferral Election" means an election pursuant to Section 3 hereof to defer receipt of Fees into a Share Account or Cash Account and/or to designate the payout timing of a Share Account or Cash Account.

 

"Deferred Amounts" mean the amounts credited to a Director's Share Account or Cash Account pursuant to a Deferral Election or otherwise pursuant to Section 4.

 

"Director" means a member of the Board who is neither an officer nor an employee of the Company. A Director of the Company shall not be deemed to be an employee of the Company solely by reason of the existence of a consulting contract between such Director and the Company or any subsidiary thereof pursuant to which the Director agrees to provide consulting services as an independent consultant to the Company or its subsidiaries on a regular or occasional basis for a stated consideration. The term "Director" as used in the Plan shall include any person who may hereafter become an advisory director of the Company, as that term is used in the Company's By-Laws.

 

"Disability" and its derivations such as "Disabled" mean either of the following: (a) the Director is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than 12 months; or (b) the Director is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or 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 Director's company. Notwithstanding the foregoing, a Director shall be deemed to have a Disability or to be Disabled if the Director (i) has been determined to be totally disabled by the Social Security Administration or (ii) has been determined to be disabled in accordance with the Director's company's disability insurance program, but only if the definition of "disability" under that program complies with the requirements of Treasury Regulation Section 1.409A-3(i)(4).

 

"Effective Date" has the meaning set forth in Section 1(b).

 

"Fair Market Value" or "FMV" means, as of any given date, the closing price reported for the Common Stock during normal business hours on the New York Stock Exchange for such date, if traded thereon, or, if not traded thereon, on a national securities exchange, if traded thereon, or, if not traded thereon, the average of the high and low or closing bid and asked prices reported on another reporting system that provides such information on the applicable date, the preceding trading day, the next succeeding trading day, or an average of trading days, as determined by the Board in its discretion. In the event the Common Stock is not publicly traded at the time a determination of its value is required to be made hereunder, the determination of its Fair Market Value shall be made by the Board in such manner as it deems appropriate.

 

"Fees" means Retainer Fees and Meeting Fees.

 

"Investment Options" means the investment options made available by the Board under the Plan, as may be modified from time to time. The Director may change a selection by submitting a new election to the Board on a form approved by the Board. Any such selection shall take effect in the calendar quarter next succeeding the quarter in which the election form is received by the Board, and shall continue in effect thereafter until changed in accordance with the foregoing sentence. The Director's selection of an Investment Option and the crediting or debiting of amounts to a Director's Cash Account based on such selection shall not be considered or construed as an actual investment in any such Investment Option. A Director's Cash Account balance shall at all times be a bookkeeping entry only.

 

"Meeting Fees" means fees scheduled to be paid to a Director for attendance at Board or committee meetings.

 

"Plan" has the meaning set forth in Section 1(a).

 

"Plan Administrator" means the Board or such delegate as the Board prescribes pursuant to Section 19(a).

 

"Retainer Fees" means the annual retainer scheduled to be paid to a Director for the calendar year and additional annual fees scheduled to be paid to a Director for serving as Chairman of the Board or as Chair of a Board committee.

 

"Section 409A" means Section 409A of the Code.

 

"Share Account" means the bookkeeping account established by the Company for the deferrals of Fees by Directors, and for the restricted deferred stock unit grants under the Director Compensation Program, which account shall be credited with Share Units pursuant to Section 4(a).

 

"Share Unit" means a share of Common Stock credited as a bookkeeping entry to a Director's Share Account. Each Share Unit shall represent the right to receive one share of Common Stock.

 

"Unforeseeable Emergency" means a severe financial hardship to the Director resulting from an illness or accident of the Director, the Director's spouse, the Director's Beneficiary or the Director's dependent (as defined in Code Section 152(a)), without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B)); loss of the Director's property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Director. For example: (a) the imminent foreclosure of or eviction from the Director's primary residence may constitute an Unforeseeable Emergency; (b) the need to pay for medical expenses, including nonrefundable deductibles, as well as for the costs of prescription drug medication may constitute an Unforeseeable Emergency; (c) the need to pay for the funeral expenses of a spouse, a Beneficiary or a dependent (as defined in Code Section 152, without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B)) may constitute an Unforeseeable Emergency. The purchase of a home and the payment of college tuition are not Unforeseeable Emergencies. The determination of whether an Unforeseeable Emergency has occurred shall be based on the facts and circumstances of the individual Director's situation and shall be determined by the Plan Administrator.

 

3. Terms and Conditions of Deferral Elections.

 

(a)      In General. Each Director may irrevocably elect annually to defer receiving all or a portion of (i) the shares of Common Stock that would otherwise be issued in connection with the Director's retainer fees or meeting fees in respect of a calendar year, (ii) the shares of Common Stock that would otherwise be issued upon a Director's election to receive cash retainer fees or meeting fees in shares of Common Stock, or (iii) a Director's cash retainer fees or meeting fees in respect of a calendar year that are not subject to an election to receive such fees in shares of Common Stock (a "Deferral Election"). Each Deferral Election shall state the amount of cash or stock that the Director is electing to defer. A Director who has made a Deferral Election with respect to shares of Common Stock shall have the number of shares of Common Stock that are the subject of the Deferral Election credited to a Share Account in the form of Share Units. A Director who has made a Deferral Election with respect to Meeting Fees that are not subject to a Share Election shall have the amount of deferred fees credited to a Cash Account.

 

(b)      Timing of Deferral Election. The Deferral Election shall be in writing and delivered to the Secretary of the Company on or prior to December 31 of the calendar year preceding the calendar year in which the applicable Fees are to be earned; provided, however, that a Director who commences service on the Board on or subsequent to January 1 of a calendar year may make a prospective Deferral Election during the 30-day period immediately following the commencement of his or her directorship, and, accordingly, such Deferral Election shall apply only with respect to compensation paid for services to be performed subsequent to the Deferral Election. A Deferral Election, once made, shall be irrevocable for the calendar year with respect to which it is made and shall remain in effect for future calendar years unless revoked or modified by a subsequent Deferral Election with respect to future calendar years on or prior to December 31 of the calendar year preceding the calendar year in which such revocation shall take effect and in accordance with the provisions hereof. No subsequent Deferral Election may be made with respect to Fees earned during the current calendar year or prior calendar years.

 

4. Crediting of Accounts.

 

(a)      Share Accounts. Each Share Account shall be deemed to be invested in shares of Common Stock. Whenever regular cash dividends are paid by the Company on outstanding Common Stock, there shall be credited to the Director's Share Account additional Share Units equal to (i) the aggregate dividend that would be payable on outstanding shares of Common Stock equal to the number of Share Units in such Share Account on the record date for the dividend, divided by (ii) the Fair Market Value of the Common Stock on the payment date of the dividend.

 

(b)      Cash Accounts. Each Director's Cash Account shall be credited with earnings, gain or loss, on the last day of each calendar quarter. The earnings on each Cash Account shall be deemed invested in the Investment Options chosen by each Director at the time of his or her Deferral Election and modified thereafter pursuant to such rules and procedures as the Board may establish in its discretion. If no Investment Option is selected, earnings shall be credited based on the default Investment Option designated by the Board.  Earnings shall be calculated on the basis of the average daily balance in the Cash Account during the calendar quarter.

 

(c)      No Account Transfers. A Director may not transfer or convert a Share Account to a Cash Account, or vice versa.

 

(d)      Status of Accounts. The Share Account and Cash Account shall not be funded, and all Deferred Amounts shall be held in the general assets of the Company and be subject to the claims of general creditors of the Company.

 

5. Payment of Deferred Amounts.

 

(a)      Commencement of Payment. Except as otherwise provided in this Section 5, a Director's Deferred Amounts shall become payable in the January following the year in which the Director separates from service as a Director; provided, however, that if a Director is also providing services to the Company or an Affiliated Company as an independent contractor, his or her Deferred Amounts cannot be paid until he or she has separated from service both as a Director and as an independent contractor. Payments from a Cash Account shall be paid in cash. Payments from a Share Account shall be made by converting Share Units into Common Stock on a one-for-one basis, with payment of fractional shares to be made in cash based on the Fair Market Value of such fractional share on the last market day of the preceding calendar quarter.

 

(b)      Timing of Payments. Subject to Sections 5(c) and (d), each Director shall elect in his or her Deferral Election to receive payment of his or her Deferred Amounts in the event the Director separates from service as a Director (for reasons other than death, Disability or Unforeseeable Emergency) either in a lump sum or in two to 15 substantially equal annual installments. Effective January 1, 2009, a Director may elect to change such form of payment only under the following conditions:

 

(i)  The election does not take effect until as least 12 months after the date on which the election is made; and

 

(ii)  The payment with respect to which such election is made shall be deferred for a period of not less than five years from the date such payment would otherwise have been paid (or in the case of any method of installment payments, each of which are treated as a single payment for purposes of Section 409A, five years from the date the first installment was scheduled to be paid).

 

With respect to each of the calendar years that include December 31, 2007 and December 31, 2008, respectively, the Directors were and will be given the ability to elect to change such form of payment without regard to the limitations imposed in the foregoing subsections (i) and (ii) above, to the full extent permitted by applicable all applicable Treasury regulations, IRS rulings and other guidance governing the transition period under Section 409A.  If there is no effective Deferral Election on file with the Plan, payment of Deferred Amounts will be made in a lump sum.

 

 

(c)      Payment Upon Death, Disability or Unforeseeable Emergency. In the event of a Director's death, payment of the remaining portion of the Director's Deferred Amounts shall be made to the Director's Beneficiary (or, if no Beneficiary has been designated, to the Director's estate or other legal representative) in a lump sum. Payment shall be made to a Director in a lump sum in the event of Disability or upon the occurrence of an Unforeseeable Emergency. A Director who experiences a Disability or an Unforeseeable Emergency may request a payment from his or her Accounts under the Plan by submitting a request in writing to the Secretary of the Company for presentation to the Board. Such request shall specify the date of the occurrence of such Disability or Unforeseeable Emergency and the amount of the payment requested. A distribution based on an Unforeseeable Emergency is limited to the amount reasonably necessary to satisfy the emergency need and may include amounts necessary to pay any federal, state or local income tax penalties reasonably anticipated to result from the distribution. Payment under this Section 5(c) shall be made on or before the 90th day immediately following the event that triggers such payment. A Director's Deferral Election shall be cancelled for the remainder of any calendar year in which he or she receives a distribution based on an Unforeseeable Emergency.

 

(d)      Delay in Payments Allowed by Plan Administrator. To the extent permitted by Treasury Regulation Section 1.409A-2(b)(7), a delay in payments shall be allowed under the Plan if the Plan Administrator determines that the amount would not be deductible under Code § 162(m) or if the payment would violate federal securities laws or other applicable laws.

 

6. Limitation of Rights.

 

(a)      No Right to Continue as a Director. Neither the Plan nor the making of a Deferral Election nor any other action taken pursuant to the Plan shall constitute or be evidence of any agreement or understanding, express or implied, that the Company shall retain a Director for any period of time or at any particular rate of compensation.

 

(b)      No Stockholder's Rights. A Director who has made a Deferral Election (or his or her representative) shall have no rights as a stockholder with respect to any Share Units with respect to a Deferral Election until the date of the actual issuance to him or her (or such representative) of shares of Common Stock (either through the Company's Direct Registration System or by certification), and, except as expressly provided by the terms of the Plan, no adjustment shall be made for dividends or other rights for which the record date is prior to the date such shares are issued.

 

7. Effect of Certain Changes in Capitalization. In the event of any change in corporate capitalization (such as a stock split), any corporate transaction (such as any merger, consolidation or separation (including a spinoff)), any other distribution of stock or property of the Company, any reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code) or any partial or complete liquidation of the Company, the Board shall equitably adjust the Share Account to reflect any such transaction and shall make such substitution or adjustments in the aggregate number and kind of shares reserved for issuance under the Plan.

 

8. Change of Control. Notwithstanding anything in the Plan to the contrary, upon the occurrence of a Change of Control:

 

(a)      All Share Units credited to a Share Account shall be converted into Common Stock and, together with all Deferred Amounts credited to a Cash Account, shall be transferred within 90 days of the Change of Control to each Director; and

 

(b)      Fees earned in respect of the calendar quarter in which the Change of Control occurs shall be paid in cash as soon as practicable.

 

9. Claims Procedures.

 

(a)      Presentation of Claim. Any Director or Beneficiary (such Director or Beneficiary being referred to in this Section as a "Claimant") may deliver to the Board 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 the Claimant received such notice. 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.

 

(b)      Notification of Decision. The Board shall consider a Claimant's claim within a reasonable time, and shall notify the Claimant in writing:

 

(i)  That the Claimant's requested determination has been made, and that the claim has been allowed in full; or

 

(ii)  That the Board has reached a conclusion contrary, in whole or in part, to the Claimant's requested determination, in which case such notice shall state (1) the specific reason(s) for the denial of the claim, or any part of it, and (2) the specific references to pertinent provisions of the Plan on which such denial was based.

 

(c)      Legal Action. Compliance with the foregoing provisions of this Section 9 is a mandatory prerequisite to a Claimant's right to commence any legal action with respect to any claim for benefits under the Plan.

 

10. Amendment; Termination.

 

(a)      Amendment. The Board may at any time and from time to time alter, amend or suspend the Plan in whole or in part; provided, however, that no amendment which is required by any regulation, law or stock exchange rule to be approved by stockholders shall be effective unless it is approved by the stockholders of the Company entitled to vote thereon. Notwithstanding the foregoing, no amendment shall affect adversely any of the rights of any Director, under any option or under any election theretofore in effect under the Plan, or with respect to Deferred Amounts, without such Director's consent.

 

(b)      Termination. The Plan shall continue for an indefinite period of time unless earlier terminated by the Board. Notwithstanding the Plan's termination, amounts shall be delivered pursuant to any Deferral Election made prior to the Plan's termination in accordance with such election. Deferral Elections may not be made for any Director retainer fees or meeting fees that would be paid following the date of the termination of the Plan.

 

11. Nontransferability. No right or interest of any Director in Deferred Amounts shall be transferable by a Director other than (a) by will or by the laws of descent and distribution, or (b) pursuant to the same rules and procedures that apply to a qualified domestic relations order (as defined in the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended). All rights with respect to Deferred Amounts shall be exercisable, during the Director's lifetime, only by the Director or by the guardian or legal representative of the Director or an alternate payee pursuant to a qualified domestic relations order.

 

12. Beneficiaries. The Board shall establish such procedures as it deems appropriate for a Director to designate a Beneficiary to whom any amounts payable in the event of a Director's death are to be paid. Directors shall make a beneficiary election with respect to Deferred Amounts at the same time that a Deferral Election is made.

 

13. Compliance With Law, Etc. Notwithstanding any other provision of the Plan or agreements made pursuant hereto, the Company shall not be required to issue or deliver any certificate or certificates for shares of Common Stock under the Plan prior to fulfillment of all of the following conditions:

 

(a)      the listing, or approval for listing upon notice of issuance, of such shares on the New York Stock Exchange or such other securities exchange or NASDAQ as may at the time be the principal market for Common Stock;

 

(b)      any registration or other qualification of such shares of the Company under any state or federal law or regulation, or the maintaining in effect of any such registration or other qualification that the Board shall, in its absolute discretion upon the advice of counsel, deem necessary or advisable; and

 

(c)      the obtaining of any other consent, approval or permit from any state or federal governmental agency, which the Board shall, in its absolute discretion after receiving the advice of counsel, determine to be necessary or advisable.

 

14. Compliance With Section 409A. The Plan is intended to comply with the requirements of Section 409A (including all applicable Treasury regulations, IRS rulings and other guidance). Notwithstanding any provision to the Plan or agreements made pursuant to the Plan, the Plan shall be interpreted, operated and administered in a manner consistent with this intention, so as to avoid the Adverse Tax Consequences under Section 409A.

 

15. Notice. Any written notice to the Company required by any of the provisions of the Plan shall be addressed to the Secretary of the Company and shall become effective when it is received.

 

16. Governing Law. The Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the State of Delaware, without reference to principles of conflict of laws, and shall be construed accordingly.

 

17. Headings. The headings of sections and subsections herein are included solely for convenience of reference and shall not affect the meaning of any of the provisions of the Plan.

 

18. Administration.

 

(a)      In General

 

(i)  Administrator. The Plan shall be administered by the Plan Administrator. The Plan Administrator shall have the right to delegate its authority to administer the Plan to the Governance and Nominating Committee or another Board committee consisting solely of independent Directors.

 

(ii)  Discretionary Authority. The Plan Administrator shall have and exercise all discretionary and other authority to control and manage the operation and administration of the Plan, except such authority as is specifically allocated otherwise by or under the terms hereof, and shall have the power to take any action necessary or appropriate to carry out such responsibilities. Without limiting the foregoing, and in addition to the authority and duties specified elsewhere herein, the Plan Administrator shall have the discretionary authority to (1) construe, interpret and apply the terms and provisions of the Plan, (2) prescribe such rules and regulations, and issue such directives, as it deems necessary or appropriate for the administration of the Plan, and (3) make all other determinations and decisions as it deems necessary or appropriate for the administration of the Plan. The Plan Administrator may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent it deems expedient.

 

(iii)  No Conflicts. No Director who represents or is authorized to act on behalf of (or who is a member of) the Administrator or the Board may decide, determine or act on any matter that affects the distribution, nature or method of settlement of solely such Director's retirement benefit under the Plan, except in exercising an election available to that Director in his or her capacity as a Director.

  

 

  

(b)      Finality of Determination. Except as with respect to appeals of claim denials under Section 9, the determination of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan shall be final, binding and conclusive on all persons and shall be given the greatest deference permitted by law. Any determination by the Board in connection with the Plan shall be final, binding and conclusive on all persons and shall be given the greatest deference permitted by law.

 

(c)      Expenses. All expenses that are necessary to operate and administer the Plan shall be paid by the Company; however, such expenses may be allocated across Directors' Accounts if the Company so chooses.

 

(d)      Disputed Payee or Act. If any dispute arises regarding the person to whom payment or delivery of any sums or property should be made by the Company or regarding any act to be performed the Company may, in its sole discretion, retain such payment and postpone the performing of such act until final adjudication of such dispute has been made in a court of competent jurisdiction or otherwise to the satisfaction of the Company or until the Company has been indemnified against loss to its satisfaction.

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