Document:

BOD Nonqualified Deferred Compensation Plan

 

EXHIBIT 10.4

THE ROYAL CARIBBEAN CRUISES LTD. ET AL

BOARD OF DIRECTORS NONQUALIFIED

DEFERRED COMPENSATION PLAN

AMENDED AND RESTATED THROUGH DECEMBER 6, 2005

 

 

THE ROYAL CARIBBEAN CRUISES LTD ET AL

BOARD OF DIRECTORS

NONQUALIFIED DEFERRED COMPENSATION PLAN

TABLE OF CONTENTS

	 	 	 	 	 
	Article	 	Page	 
	 
	1. PURPOSE
	 	 	1	 
	 
	 	 	 	 
	2. DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	2.1 Annual Retainer
	 	 	2	 
	2.2 Beneficiary
	 	 	2	 
	2.3 Board
	 	 	2	 
	2.4 Code
	 	 	2	 
	2.5 Company
	 	 	2	 
	2.6 Effective Date
	 	 	2	 
	2.7 Eligible Earnings
	 	 	2	 
	2.8 ERISA
	 	 	2	 
	2.9 Meeting Fees
	 	 	2	 
	2.10 Participant
	 	 	2	 
	2.11 Participant Account
	 	 	2	 
	2.12 Participant Deferral Contributions
	 	 	2	 
	2.13 Plan
	 	 	2	 
	2.14 Plan Year
	 	 	2	 
	2.15 Termination of Employment
	 	 	2	 
	2.16 Valuation Date
	 	 	3	 
	 
	 	 	 	 
	3. ELIGIBILITY TO PARTICIPATE
	 	 	4	 
	 
	 	 	 	 
	3.1 Determination of Participant Status
	 	 	4	 
	3.2 Commencement of Participation
	 	 	4	 
	3.3 Cessation of Participation
	 	 	4	 
	 
	 	 	 	 
	4. PARTICIPANT DEFERRALS
	 	 	5	 
	 
	 	 	 	 
	4.1 Participant Deferral Contributions
	 	 	5	 
	4.2 Changes in Contributions
	 	 	5	 
	4.3 Suspension of Contributions
	 	 	5	 
	 
	 	 	 	 
	5. INVESTMENTS AND PARTICIPANT ACCOUNTS
	 	 	6	 
	 
	 	 	 	 
	5.1 Establishment of Accounts
	 	 	6	 
	5.2 Obligation of the Company
	 	 	6	 
	5.3 Establishment of Investment Funds
	 	 	6	 
	5.4 Crediting Investment Results
	 	 	6	 
	 
	 	 	 	 
	6. DISTRIBUTIONS
	 	 	8	 
	 
	 	 	 	 
	6.1 Form and Timing of Distribution
	 	 	8	 
	6.2 Distribution after Death
	 	 	8	 
	6.3 Early Distribution
	 	 	9	 

 

 

THE ROYAL CARIBBEAN CRUISES LTD ET AL

BOARD OF DIRECTORS

NONQUALIFIED DEFERRED COMPENSATION PLAN

TABLE OF CONTENTS

	 	 	 	 	 
	Article	 	Page	 
	 
	7. ADMINISTRATION
	 	 	10	 
	 
	 	 	 	 
	7.1 Administration
	 	 	10	 
	7.2 Plan Expenses
	 	 	10	 
	7.3 Liability
	 	 	10	 
	7.4 Claims Procedure
	 	 	10	 
	7.5 Claims Review Procedure
	 	 	10	 
	7.6 Notices
	 	 	10	 
	 
	 	 	 	 
	8. AMENDMENT AND TERMINATION
	 	 	11	 
	 
	 	 	 	 
	8.1 Plan Amendment
	 	 	11	 
	8.2 Termination of the Plan
	 	 	11	 
	 
	 	 	 	 
	9. GENERAL PROVISIONS
	 	 	12	 
	 
	 	 	 	 
	9.1 Non-Alienation of Benefits
	 	 	12	 
	9.2 Limitation of Rights
	 	 	12	 
	9.3 Participant’s Rights Unsecured
	 	 	12	 
	9.4 Withholding
	 	 	12	 
	9.5 Severability
	 	 	12	 
	9.6 Controlling Law
	 	 	12	 
	 
	 	 	 	 
	SIGNATURE
	 	 	13	 

ii 

 

THE ROYAL CARIBBEAN CRUISES LTD. et al.

BOARD OF DIRECTORS

NONQUALIFIED DEFERRED COMPENSATION PLAN

AMENDED AND RESTATED THROUGH DECEMBER 6, 2005

ARTICLE 1. PURPOSE

     Royal Caribbean Cruises Ltd. has established The Royal Caribbean Cruises Ltd. et al. Board of
Directors Nonqualified 401(k) Plan, effective July 1, 2003. The Royal Caribbean Cruises Ltd. et al.
Board of Directors Nonqualified Deferred Compensation Plan is a nonqualified deferred compensation
plan for the members of the Board of Directors of Royal Caribbean Cruises Ltd. as a means of
deferring a portion of an eligible individual’s current income and to accumulate resources for
future investments.

     With respect to amounts deferred hereunder that are subject to Section 409A of the Internal
Revenue Code of 1986, as amended and any regulations and other official guidance (the “Code”)
(generally, amounts deferred on and after January 1, 2005), applicable provision of the Plan
document shall be interpreted to permit the deferral of compensation in accordance with Code
Section 409A, and any provision that would conflict with such requirements shall not be valid or
enforceable. In addition, with respect to amounts deferred hereunder that are not subject to
Section 409A (generally, amounts deferred before January 1, 2005) (“grandfathered funds”), it is
intended that the rules applicable under the Plan as of December 31, 2004, and not Code Section
409A and related official guidance, shall apply with respect to such grandfathered funds.

1

 

ARTICLE 2. DEFINITIONS

     For the purpose of this Plan the following terms shall have the meanings as set forth below
unless the context requires otherwise:

     2.1 Annual Retainer means cash compensation payable to Board members for service on the Board
and on Board committees.

     2.2 Beneficiary means the person, persons, trust or other entity a Participant designates by
written revocable designation filed with the Company to receive payments in the event of his or her
death.

     2.3 Board means the Board of Directors of the Company.

     2.4 Code means the Internal Revenue Code of 1986, as amended from time to time.

     2.5 Company means Royal Caribbean Cruises Ltd. et al and any successor thereto.

     2.6 Effective Date means July 1, 2003.

     2.7 Eligible Earnings shall, for purposes of a Participant’s Deferral Contributions, consist
of the Participant’s Annual Retainer and Meeting Fees.

     2.8 ERISA means the Employee Retirement Income Security Act of 1974, as amended.

     2.9 Meeting Fees means cash compensation payable to Board members for attendance at Board
meetings and at Board committee meetings.

     2.10 Participant means any non-employee Board member who elects to participate in the Plan.

     2.11 Participant Deferral Contributions means the deferred contributions made at the direction
of a Participant by the Company pursuant to Section 4.1.

     2.12 Participant Account means a separate account established and maintained by the Company in
accordance with the terms of the Plan in the name of each Participant consisting of the amounts set
forth in Section 5.1.

     2.13 Plan means the Royal Caribbean Cruises Ltd. et al Board of Directors Nonqualified
Deferred Compensation Plan, the Plan set forth herein, as amended from time to time.

     2.14 Plan Year means a 12-consecutive month period commencing January 1st and ending on the
following December 31st.

     2.15 Termination of Service means a Participant’s termination of service on the Board.

2

 

     2.16 Valuation Date means any day on which the New York Stock Exchange or any successor to its
business is open for trading, or such other date as may be designated by the Company.

3

 

ARTICLE 3. ELIGIBILITY TO PARTICIPATE

     3.1 Determination of Participant Status: Upon adoption of the Plan, the Company will notify
the Board of their eligibility to participate in the Plan. Thereafter, except as otherwise
provided in Section 3.2, prior to each calendar quarter, the Company will notify those new members
of the Board of their eligibility to participate.

     3.2 Commencement of Participation: Each Participant shall be provided an opportunity to
designate the percentage of his or her Eligible Earnings to be deferred under Section 4.1. Any
Participant who makes such a designation in the second calendar quarter of 2003 shall become a
Participant on the first day of the following month, with respect to Eligible Earnings earned on or
after the Effective Date only, provided the Eligible Participant is a member of the Board as of
such date. Thereafter through December 31, 2004, any such Participant who makes such a designation
shall become a Participant on the first day of the following calendar month. Effective on and
after January 1, 2005, in the case of the first year in which a Board member becomes eligible to
participate in the Plan, the Board member may make a deferral election with respect to services to
be performed subsequent to the election provided the election is made within 30 days after the date
the Board member becomes eligible to participate. In the case of all other Board members,
including any newly eligible Board member who fails to make an election within the 30-day period
described above, deferral elections must be made no later than December 31 (or such other prior
date designated by the Company) of the year before the year the services related to the deferral
election are to be performed.

     Any such designation must be made in the manner authorized by the Company and must be
accompanied by:

(a) an authorization by the Participant for the Company to make deductions to cover
the amount of such deferrals elected pursuant to Section 4.1;

(b) an investment election with respect to any Participant Deferral Contributions;

(c) a designation of Beneficiary; and

(d) a designation as to the form and timing of the distribution of his or her
Participant Account.

     3.3 Cessation of Participation: A Participant shall cease to be a Participant on the earliest
of:

(a) the date on which the Plan terminates; or

(b) the date on which he or she receives a complete distribution of his or her
Participant Account.

4

 

ARTICLE 4. PARTICIPANT DEFERRALS

     4.1 Participant Deferral Contributions: Each Participant may authorize the Company, in the
manner described in Section 3.2, to have a Participant Deferral Contribution made on his or her
behalf. Such election shall apply to the Participant’s Eligible Earnings attributable to services
performed during the designated period covered by the election, as provided in Section 3.2. Such
Participant Deferral Contribution shall be a stated whole percentage of the Participant’s Eligible
Earnings, equal to not less than 10% nor more than 100%, as designated by the Participant. The
percentage of Eligible Earnings designated by a Participant to measure the Participant Deferral
Contributions to be made on the Participant’s behalf shall remain in effect, notwithstanding any
change in his or her Eligible Earnings, until he or she elects to change or suspend such percentage
in accordance with Section 4.2 or Section 4.3, below.

     4.2 Changes in Contributions: A Participant may change his or her contribution percentage
election under Section 4.1 by applying to make such change in the manner prescribed by the Company.
Prior to January 1, 2005, any such change shall become effective no earlier than the first day of
the month following the date on which the Participant applies to make such change. On and after
January 1, 2005, any such change shall become effective no earlier than the first day of the year
following the date on which the Participant applies to make such change.

     4.3 Suspension of Contributions: A Participant may suspend his or her Participant Deferral
Contributions at any time by applying for a suspension in writing to the Company. Prior to January
1, 2005, any such suspension request shall become effective as soon as administratively practicable
following the date the Participant applies for the suspension. On and after January 1, 2005, any
such suspension request shall not become effective before the first day of the year following the
date the Participant applies for the suspension. A Participant whose Deferral Contributions have
been suspended under this section may resume having Deferral Contributions made on his or her
behalf by applying to change his or her contribution percentage election in accordance with Section
4.2.

5

 

ARTICLE 5. INVESTMENTS AND PARTICIPANT ACCOUNTS

     5.1 Establishment of Accounts: The Company shall establish a Participant Account to which
shall be credited the Participant’s Deferral Contributions and any earnings and losses credited
thereto.

Each Participant shall receive a quarterly statement reflecting his or her Participant Account
balance.

     5.2 Obligation of the Company: Individual benefits under the Plan are payable as they become
due solely from assets allocated to individual Participant Accounts in a rabbi trust or from the
general assets of the Company. To the extent a Participant or any person acquires a right to
receive payments from the Company under this Plan, such right shall be no greater than the right of
any unsecured creditor of the Company. Neither this Plan nor any action taken pursuant to the
terms of this Plan shall be considered to create a fiduciary relationship between the Company and
the Participants or any other persons or to require the establishment of a trust in which the
assets are beyond the claims of any unsecured creditor of the Company.

     5.3 Establishment of Investment Funds: The Company will establish one or more Investment
Funds which will be maintained for the purpose of determining the investment return to be credited
to each Participant’s Account. The Company may change the number, identity or composition of the
Investment Funds from time to time. Each Participant will indicate the Investment Funds based on
which amounts allocated in accordance with Articles 4 and 5 are to be adjusted. Each Participant’s
Account will be increased or decreased by the net amount of investment earnings or losses that it
would have achieved had it actually been invested in the deemed investments. The Company is not
required to purchase or hold any of the deemed investments. Investment Fund elections must be made
in a minimum of 1% increments and in such manner as the Company will specify. A Participant may
change his or her Investment Fund election periodically by completing a revised Participant
Election Form and delivering it to the Vice President of Human Resources. Any such change shall
become effective as of the first business day coincident with or immediately following the date the
Participant applies to make such change. As the Participant’s Account increases, the investment of
such amounts shall remain invested in the deemed investment previously designated until the
Participant requests a change in accordance with this Section or the Company no longer includes
that deemed investment as one of the available Investment Funds. If a Participant fails to make an
Investment Fund election, the amount in the Participant’s Account will be deemed to have been
invested in a money market fund or any other fund as determined by the Company.

     5.4 Crediting Investment Results: No less frequently than as of each Valuation Date, each
Participant Account will be increased or decreased to reflect deemed investment results. Each
Participant Account will be credited with the deemed investment return of the Investment Funds in
which the Participant elected to be deemed to participate. The credited investment return is
intended to reflect the actual
performance of the Investment Funds net of any applicable investment management fees or
administrative expenses determined by the Company. Notwithstanding the above, the amount of any
payment of Plan benefits pursuant to

6

 

Article 6 or upon Plan termination shall be determined as of
the Valuation Date preceding the date of payment.

7

 

ARTICLE 6. DISTRIBUTIONS

     6.1 Form and Timing of Distribution: Each Participant shall elect the form and timing of the
distribution with respect to his or her Participant Account in the manner authorized by the
Company.

(a) Form of Payment: The Participant’s election shall indicate the form of
distribution of his or her entire Participant Account in a lump sum or in monthly
installments as selected by the Participant.

(b) Time of Payment: The Participant’s election shall indicate that payment shall
be made (in the case of a lump sum election) or shall commence (in the case of an
installment election):

(1) as soon as administratively practicable following the Participant’s
Termination of Service as a member of the Board which shall in no event
exceed 21 days beyond such Termination of Service;

(2) as soon as administratively practicable following the calendar year of
the Participant’s Termination of Service as a member of the Board which
shall in no event exceed 21 days beyond the end of such calendar year; or

(3) in a specific month and year.

Notwithstanding the foregoing, if a Participant elects his or her distribution to be made or
commenced in accordance with paragraph 3 above, and such date falls before the Participant’s
Termination of Service, the Participant’s distribution shall be made or commenced in
accordance with paragraph 1 above. Further, if a Participant elects his or her distribution
to be made or commenced in accordance with paragraph 3 above, and such date falls before the
Participant’s Termination of Service, the Participant must complete new designations and
authorizations pursuant to Section 3.2 in order to continue making Participant Deferral
Contribution.

Notwithstanding the foregoing, a Participant may change his or her form and timing election
applicable to the distribution of his or her Participant Account, provided that such request for
change is made (i) at least twelve (12) consecutive months prior to the date on which such
distribution would otherwise have been made or commenced, (ii) at least twelve (12) consecutive
months prior to the date on which such distribution will be made or commence, and (iii) solely with
respect to amounts deferred under the Plan which are subject to Code Section 409A (generally,
amounts deferred on and after January 1, 2005), such that the payment with respect to an amended
distribution election is deferred for a period of not less than 5 years from the date such payment
would otherwise have been paid (or, in the case of installment payments, 5 years from the date the
first amount was scheduled to be paid).

     6.2 Distribution after Death: Notwithstanding the foregoing, if a Participant dies prior to
receiving the entire amounts in his or
her Participant Account, the remaining amounts

8

 

shall be paid in a lump sum to the
Participant’s Beneficiary designated by the Participant as soon as practicable following the
Participant’s death. The amount of any such distribution shall be determined as of the most recent
Valuation Date preceding the month in which the Company is notified of the Participant’s death.

     6.3 Early Distribution: Notwithstanding any other provision of the Plan, including Sections
6.1 and 6.3, and effective solely with respect to amounts deferred under the Plan prior to January
1, 2005 and not otherwise subject to Code Section 409A, a Participant may, one time per year, make
a written request to the Company to immediately receive a lump sum distribution equal to ninety
percent (90%) of the entire applicable portion of his or her Participant Account as adjusted under
Section 9.4. The remaining applicable balance of his or her Participant Account from which a
payment has been made pursuant to this Section 6.3 shall be forfeited by the Participant.
Following receipt of written notice by the Company the Participant shall be precluded from
participating in the Plan for one year following such distribution.

9

 

ARTICLE 7. ADMINISTRATION

     7.1 Administration: The Plan shall be administered by the Company. The Company shall have the
full and exclusive discretionary authority to administer the Plan, and any responsibilities and
duties under this Plan which are not specifically delegated to anyone else. Responsibility for
determining the eligibility of Participants and establishing the requirements for participation
shall be vested in the Company, which shall be responsible for any interpretation of the Plan that
may be required. Notwithstanding the foregoing, the Company may delegate any of its administrative
duties as necessary.

     7.2 Plan Expenses: The expenses of administering the Plan shall be borne by the Company.

     7.3 Liability: The Company shall not be liable to any person for any action taken or omitted
in connection with the administration of this Plan unless attributable to the fraud or willful
misconduct on the part of a director, officer or agent of the Company.

     7.4 Claims Procedure: Any person claiming a benefit, requesting an interpretation or ruling
under the Plan, or requesting information under the Plan shall present the request in writing to
the Company’s Vice President and Chief Human Resource Officer, who shall respond in writing as soon
as practicable. If the claim or request is denied, the written notice of denial shall state:

(a) The reasons for denial, with specific reference to the Plan provisions on which
the denial is based.

(b) A description of any additional material or information required and an
explanation of why it is necessary.

(c) An explanation of the Plan’s claim review procedure.

     7.5 Claims Review Procedure: Any person whose claim or request is denied or who has not
received a response within 30 calendar days may request review by notice given in writing to the
Company’s Vice President and Chief Human Resource Officer. The claim or request shall be reviewed
by the Company’s Vice President and Chief Human Resource Officer, who may, but shall not be
required to, grant the claimant a hearing. On review, the claimant may have representation,
examine pertinent documents, and submit issues and comments in writing.

     The decision on review shall normally be made within 60 calendar days. If an extension of
time is required for a hearing or other special circumstances, the claimant shall be notified and
the time limit shall be 120 calendar days. The decision shall be in writing and shall state the
reasons and the relevant Plan provisions. All decisions on review shall be final and binding on
all parties concerned.

     7.6 Notices: Any notices, designations or other communications to be given to the Company by
any Eligible Participant or Beneficiary shall only be effective if delivered to the Company’s Vice
President and Chief Human Resource Officer.

10

 

ARTICLE 8. AMENDMENT AND TERMINATION

     8.1 Plan Amendment: The Plan may be amended or otherwise modified by the Board, in whole or in
part, provided that no amendment or modification shall divest any Participant of any amount
previously credited to his or her Participant Account under Article 4 or of the amount and method
of crediting earnings to such Participant Account under Article 5 of the Plan as of the date of
such amendment. Notwithstanding anything herein to the contrary, in no event shall any amendment
be made in a manner that is inconsistent with the requirements to avoid adverse federal tax
consequences under Section 409A of the Code.

     8.2 Termination of the Plan: The Board reserves the right to terminate the Plan at any time in
whole or in part. In the event of any such termination, the Company shall pay a benefit to the
Participant or the Beneficiary of any deceased Participant, in lieu of other benefits hereunder,
equal to the value of the Participant’s Account in the form and at the benefit commencement date
elected by the Participant pursuant to Article 6 of the Plan. Earnings shall continue to be
allocated under Article 5 of the Plan after the termination of the Plan until the Participant’s
benefits have been paid in full notwithstanding the termination of the Plan. Notwithstanding the
above, the Company reserves the right to pay out Participants in a lump sum their Participant
Account as soon as practicable following the termination of the Plan. Notwithstanding
anything herein to the contrary, in no event shall any termination be made in a manner that is
inconsistent with the requirements to avoid adverse federal tax consequences under Section 409A of
the Code.

11

 

ARTICLE 9. GENERAL PROVISIONS

     9.1 Non-Alienation of Benefits: No benefit under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge and any such
action shall be void for all purposes of the Plan. No benefit shall in any manner be subject to
the debts, contracts, liabilities, engagements or torts of any person, nor shall it be subject to
attachments or other legal process for or against any person, except to such extent as may be
required by law.

     9.2 Limitation of Rights: Neither the establishment of this Plan, nor any modification
thereof, nor the creation of an account, nor the payment of any benefits shall be construed as
giving

(a) any Participant, Beneficiary, or any other person whomsoever, any legal or
equitable right against the Company, unless such right shall be specifically
provided for in the Plan or conferred by affirmative action of the Administrator in
accordance with the terms and provisions of the Plan; or

(b) any Participant, or other person whomsoever, the right to be retained in the
service of the Company.

     9.3 Participant’s Rights Unsecured: The right of any Participant or Beneficiary to receive
payment under the provisions of the Plan shall be as an unsecured claim against Company, as the
case may be, and no provisions contained in the Plan shall be construed to give any Participant or
Beneficiary at any time a security interest in the Participant’s Account or any asset of the
Company. The liabilities of the Company to any Participant or Beneficiary pursuant to the Plan
shall be those of a debtor pursuant to such contractual obligations as are created by the Plan.
Accounts, if any, which may be set aside by the Company for accounting purposes shall not in any
way be held in trust for, or to be subject to the claims of a Participant or Beneficiary.

     9.4 Withholding: There shall be deducted from all payments under this Plan the amount of any
taxes required to be withheld by any Federal, state or local government. The Participants and
their Beneficiaries, distributees, and personal representatives will bear any and all Federal,
foreign, state, local or other income or other taxes imposed on amounts paid under this Plan.

     9.5 Severability: Should any provision of the Plan or any regulations adopted thereunder be
deemed or held to be unlawful or invalid for any reason, such fact shall not adversely affect the
other provisions or regulations unless such invalidity shall render impossible or impractical the
functioning of the Plan and, in such case, the appropriate parties shall adopt a new provision or
regulation to take the place of the one held illegal or invalid.

     9.6 Controlling Law: The Plan shall be governed by the laws of the State of Florida, except
to the extent preempted by ERISA and any other law of the United States.

12

 

SIGNATURE

     IN WITNESS WHEREOF, an officer of the Company hereby executes this Plan, as amended and
restated through December 6, 2005, as of the 6th day of December 2005.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	ROYAL CARIBBEAN CRUISES LTD.  
	 
	 	 	 	 	 	 	 	 	 	 
	Attest:

	 	/s/ BRADLEY H. STEIN
	 	 	 	By:
	 	/s/ THOMAS F. MURRILL	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 	 	Bradley H. Stein	 	 	 	Thomas F. Murrill
	 	 	Assistant Secretary	 	 	 	Vice President and
	 	 	 	 	 	 	Chief Human Resources Officer

13<PAGE>
                                                                  EXHIBIT (10)b.

                            NON-EMPLOYEE DIRECTOR AND
                      NAMED EXECUTIVE OFFICER COMPENSATION

                   NON-EMPLOYEE DIRECTOR COMPENSATION SUMMARY

Effective as of the beginning of Fiscal 2007, directors who are not employees of
the Company will receive a retainer of $30,000 per year and a fee of $1,500 for
each board meeting they attend in person, $1,000 for each committee meeting they
attend in person and $750 for each meeting they attend by telephone. Each
committee chairman other than the chairman of the audit committee will receive
an additional retainer of $4,000 per year. The audit committee chairman will
receive an additional retainer of $11,500 per year. The Company also pays the
premiums for non-employee directors on $50,000 of coverage under the Company's
group term life insurance policy plus additional cash compensation to offset
taxes on their imputed income from such premiums. Directors who are full-time
Company employees do not receive any extra compensation for serving as
directors.

Pursuant to the terms of the Company's 2005 Equity Incentive Plan, the Board may
provide that all or a portion of a non-employee director's annual retainer
and/or retainer fees or other awards or compensation as determined by the Board
be payable in non-qualified stock options, restricted shares, restricted share
units and/or other stock-based awards, including unrestricted shares, either
automatically or at the option of the non-employee directors. The Board will
determine the terms and conditions of any such awards, including those that
apply upon the termination of a non-employee director's service as a member of
the Board. Non-employee directors are also eligible to receive other awards
pursuant to the terms of the 2005 Equity Incentive Plan, including options and
SARs, restricted shares and restricted share units, and other stock-based awards
upon such terms as the Company's Compensation Committee may determine; provided,
however, that with respect to awards made to members of the Compensation
Committee, the 2005 Equity Incentive Plan will be administered by the Board.

                  NAMED EXECUTIVE OFFICER COMPENSATION SUMMARY

Fiscal 2007 salaries for the Company's named executive officers are as follows:

<TABLE>
<CAPTION>

Name                                      Title                                              Salary
----                                      -----                                              ------
<S>                      <C>                                                            <C>
Hal N. Pennington        Chairman, President and Chief Executive Officer                $   720,000
Robert J. Dennis         Executive Vice President and Chief Operating Officer               500,000
James S. Gulmi           Senior Vice President and Chief Financial Officer                  350,000
Jonathan D. Caplan       Senior Vice President                                              290,000
James C. Estepa          Senior Vice President                                              495,000

</TABLE>

Target incentive awards for Fiscal 2007 performance for the named executive
officers pursuant to the EVA Incentive Plan are as follows:

<TABLE>
<CAPTION>

Name                                      Title                                      Target Incentive
----                                      -----                                      ----------------

<S>                      <C>                                                         <C>
Hal N. Pennington        Chairman, President and Chief Executive Officer                $     575,000
Robert J. Dennis         Executive Vice President and Chief Operating Officer                 350,000
James S. Gulmi           Senior Vice President and Chief Financial Officer                    165,000
Jonathan D. Caplan       Senior Vice President                                                130,000
James C. Estepa          Senior Vice President                                                300,000

</TABLE>

The named executive officers also receive long-term incentive awards pursuant to
the Company's shareholder approved equity incentive plans.

In addition, certain of the named executive officers are eligible to receive
matching contributions to their 401(k) Plan accounts, tax preparation fees,
financial planning fees, club dues, and/or auto allowances. The Company's named
executive officers are also eligible to participate in the Company's broad-based
benefit programs generally available to its salaried employees, including
health, disability and life insurance programs and 401(k) Plan.

                             ADDITIONAL INFORMATION

The foregoing information is summary in nature. Additional information regarding
director and named executive officer compensation will be provided in the
Company's proxy statement to be filed in connection with the 2006 annual meeting
of shareholders.

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