Document:

exv10w12

Exhibit 10.12

COOPER INDUSTRIES

MANAGEMENT INCENTIVE COMPENSATION

DEFERRAL PLAN

POST-2004 PART

(Effective January 1, 2005)

Background

     In order to comply with the requirements of Section 409A of the Internal Revenue Code of 1986,
as amended, and the Treasury regulations and rulings thereunder (collectively, “Section 409A”) and
to facilitate administration of deferrals under Section 409A, the Cooper Industries Management
Incentive Compensation Deferral Plan has been bifurcated into pre-409A and post-2004 parts.

     The terms of the Cooper Industries Management Incentive Compensation Deferral Plan as in
effect on October 3, 2004 (“Pre-409A Part”), have been frozen and shall not be modified except as
permitted under Section 409A so as to preserve the grandfathered status of deferrals and related
earnings thereunder. Deferrals retained under the Pre-409A Part are those employee deferrals that
were earned and vested as of December 31, 2004, and income attributable to such grandfathered
deferrals.

     The terms of the Cooper Industries Management Incentive Compensation Deferral Plan, as amended
and restated effective January 1, 2005, for compliance with Section 409A shall constitute the
“Post-2004 Part.” Deferrals that were earned or vested after December 31, 2004, including those
for Award Years 2004, 2005, 2006, and 2007, although technically made under the Pre-409A Part, were
made and administered in good faith in accordance with the requirements of Section 409A. Such
non-grandfathered deferrals and related earnings have been transferred to, and have become part of,
Accounts under the Post-2004 Part. Deferrals of Participants for Award Year 2008 and later Award
Years shall be made under the Post-2004 Part.

     The Pre-409A Part and the Post-2004 Part shall together constitute the Cooper Industries
Management Incentive Compensation Deferral Plan (“Plan”).

ARTICLE 1

Purposes of the Plan

     The Plan is intended to provide a method for attracting and retaining key employees of Cooper
Industries, Ltd. (the “Company”) and its subsidiaries, and to encourage them to remain with and
devote their best efforts to the business of the Company, thereby advancing the interests of the
Company and its shareholders.

 

 

ARTICLE II

Definitions

     The following are defined terms wherever they appear in this Post-2004 Part:

     “Account” shall mean the bookkeeping account established for a Participant or former
Participant under Article 4.

     “Affiliate” shall mean all employers, present and future, with whom the Company is considered
a single employer under Sections 414(b) and 414(c) of the Code.

     “Award Year” shall mean the initial calendar year beginning January 1, 2004, and each calendar
year thereafter, for which an Incentive Award would become payable in one lump sum in the calendar
year immediately following the Award Year. The term “Award Year” shall not be changed to a period
that is not the calendar year unless appropriate changes are made to the Post-2004 Part, including
those dealing with Participant elections, to conform with the requirements of Section 409A.

     “Change in Control” shall mean a change in control in the ownership or effective control of
the Company, or in the ownership of a substantial portion of the assets of the Company, within the
meaning of Section 409A.

     “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

     “Committee” shall mean a committee of not less than three directors of the Company who shall
be appointed by and serve at the pleasure of the Board of Directors of the Company to administer
the Plan, including the Post-2004 Part.

     “Company” shall mean Cooper Industries, Ltd.

     “Deduction Limitation” shall mean, to the extent allowed under Section 409A, the following
described limitation on a distribution that is otherwise payable pursuant to the provisions of the
Post-2004 Part. If the Company determines in good faith that there is a reasonable likelihood that
a distribution under the Post-2004 Part would not be deductible by the Company when paid solely by
reason of the limitation under Section 162(m) of the Code, the Company may defer that amount of the
distribution to the extent deemed necessary to ensure deductibility; provided, however,
that the Deduction Limitation shall not be applied to any distributions made after a Change in
Control and provided further that the amounts deferred (and amounts credited thereon)
because of Section 162(m) shall be distributed to the Participant (or designated beneficiary in the
event of the Participant’s death) at the earlier of (i) the earliest possible date that they are
deductible or (ii) a Change in Control. Any amounts deferred pursuant to the Deduction Limitation
shall continue to be credited with interest equivalents in accordance with Section 4(b).

     “Deferred Compensation” shall mean, for any particular Award Year, an Incentive Award that has
been deferred for that Award Year pursuant to the terms of the Post-2004 Part and the interest
equivalents related to such Incentive Award. Deferred Compensation shall

 

 

include Incentive Awards deferred for Award Years 2004, 2005, 2006, and 2007, which were
administered in good faith pursuant to the transitional rules of Section 409A.

     “Employee” shall mean an individual carried on and paid through the payroll of the Company or
an Affiliate as an employee.

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

     “Incentive Award” shall mean, for any particular Award Year, the annual incentive compensation
or bonus awarded to Employees under the Cooper Industries Annual Management Incentive Plan or
another annual bonus plan for key Employees of the Company or an Affiliate and payable (or
otherwise payable but for deferral under the Post-2004 Part) on or before March 15 of the
immediately succeeding calendar year (or any other later time during such calendar year specified
in the Cooper Industries Annual Management Incentive Plan or other bonus plan).

     “Participant” shall mean each Employee who participates in the Post-2004 Part in accordance
with its terms and conditions. To the extent required by the context, a Participant shall include
an inactive or former Participant.

     “Performance-Based Compensation” shall mean compensation that is not equity-based compensation
and that is contingent on the satisfaction of pre-established organizational or individual
performance criteria relating to a performance period of at least twelve (12) consecutive months in
which Participants perform services. Performance criteria shall be established in writing not
later than ninety (90) days after the commencement of the period of service to which the criteria
relate. Compensation shall not be Performance-Based Compensation if any amount or portion will be
paid regardless of performance or is based upon a level of performance that is substantially
certain to be met at the time the criteria are established.

     “Plan” shall mean the Cooper Industries Management Incentive Compensation Deferral Plan,
which, effective January 1, 2005, consists of the Pre-409A Part and the Post-2004 Part.

     “Post-2004 Part” shall mean the terms of the Cooper Industries Management Incentive
Compensation Deferral Plan, as amended and restated, effective January 1, 2005, for compliance with
Section 409A, and as amended from time to time.

     “Pre-409A Part” shall mean Cooper Industries Management Incentive Compensation Deferral Plan,
as in effect on October 3, 2004.

     “Section 409A” shall mean Section 409A of the Internal Revenue Code of 1986, as amended, and
the Treasury regulations and rulings thereunder.

     “Separation from Service” shall mean the termination of employment of an Employee with the
Company and all Affiliates for any reason other than death; provided, however, that a
Company-approved leave of absence shall not be considered a termination of employment if the leave
does not exceed six (6) months or, if longer, so long as the Employee’s right to reemployment is
provided either by statute or by contract. Whether an Employee has incurred a Separation from
Service shall be determined in accordance with Section 409A.

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ARTICLE 2

Administration of the Plan

     The Plan shall be administered by the Committee. Members of the Committee shall not be
eligible, and shall not have been eligible at any time within one year prior to their appointment
to the Committee, to participate in the Plan. The Committee is authorized to interpret the Plan
and may from time to time adopt such rules and regulations, consistent with the provisions of the
Plan, as it may deem advisable to carry out the Plan. All decisions made by the Committee shall be
final. All expenses incurred in connection with the administration of the Plan shall be borne by
the Company.

ARTICLE 3

Participation in the Plan

     (a) Eligible Class. All key Employees of the Company and its Affiliates who are
eligible to earn an Incentive Award during a calendar year shall be within the class of employees
eligible to participate in the Post-2004 Part with respect to that Incentive Award. The Plan,
including the Post-2004 Part, is intended to benefit only a select group of executive management
and highly compensated executive employees within the meaning of Sections 201(2), 301(a)(3), and
401(a)(1) of ERISA.

     (b) Eligible Employees. Employees eligible to participate in the Plan shall be those
Employees within the eligible class described in paragraph (a) above who either are officers of the
Company or who have been selected for eligibility by the Chief Executive Officer of the Company.

     (c) Election to Participate. An eligible Employee may elect to become a Participant
with respect to the Incentive Award to be earned by such Employee during any Award Year by filing
an election to defer the receipt of a portion or all of such Employee’s Incentive Award for that
Award Year in the form specified by the Committee within the time permitted for making elections.
Subject to the terms of the Post-2004 Part, the election shall specify the amount to be deferred
for the Award Year, the date or dates for payment, and the form of payment.

     (d) Terms of Initial Election. A Participant shall elect the amount of an Incentive
Award to be deferred for the Award Year, which may be (i) an integral percentage from 1% to 100%,
(ii) a certain dollar amount or (iii) the amount in excess of a certain dollar amount of the
Participant’s Incentive Award for the Award Year. A Participant shall also elect the time and form
of payment of Deferred Compensation at the time the election to defer an Incentive Award is made.

     Subject to the “Deduction Limitation,” a Participant may elect (x) a single lump sum payment
or (y) a series of substantially equal installments over a period certain of up to fifteen (15)
years; provided that, if payment in installments is elected by a Participant, the number of
such installments shall be automatically reduced (at the time payment of the Participant’s Account
commences), if necessary, to the largest number of installments that will result in an annual
payment to such Participant of $25,000 or more. If Deferred Compensation is payable in
installments, the amount of each such installment shall be equal to a fraction of the amount of the

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Account remaining to be paid with respect to the Deferred Compensation for that Award Year,
the numerator of which is one and the denominator of which is the number of installments of the
Deferred Compensation for that Award Year remaining to be paid. The installments of the Deferred
Compensation remaining to be paid shall continue to earn interest equivalents as provided in
Section 4(b).

     Subject to the terms of the Post-2004 Part, the election shall specify the calendar year in
which the payment of the Deferred Compensation for that Award Year shall be made or shall commence.
Subject to any limitations imposed by the Committee and/or Section 409A, the specified calendar
year may be a calendar year during the Participant’s active employment; the earlier or later of the
calendar year in which a Participant incurs a Separation from Service or attains a specified age;
or the earliest of the Participant’s death, Separation from Service, a specified calendar year, or
a Change in Control; provided that, notwithstanding anything in the Post-2004 Part to the
contrary, no payment upon a Separation from Service shall be made until the first day of the
seventh (7th) month following a Participant’s Separation from Service.

     (e) Time of Making Initial Elections.

     (i) Non-Performance-Based Compensation. An election by a Participant to defer
all or a portion of an Incentive Award that is not Performance-Based Compensation shall be
made not later than the December 31 immediately preceding the Award Year for which the
election is made. Such election shall be irrevocable as of the end of the December 31
immediately prior to the Award Year for which it is made.

     (ii) Performance-Based Compensation. An election by a Participant to defer all
or a portion of an Incentive Award that is Performance-Based Compensation and that relates
to services to be performed in the Award Year shall be made not later than the June 30 of
the applicable Award Year; provided that the Participant has continuously performed
services from a date no later than ninety (90) days after the commencement of the
performance period through a date no earlier than the date on which the deferral election is
made and provided, further that, in no event shall such election be made after such
Incentive Award has become both substantially certain to be paid and readily ascertainable.
Such election shall be irrevocable as of the end of each June 30 with respect to an
Incentive Award payable with respect to services to be performed in the Award Year for which
the election has been made.

     (iii) New Hires and Promotions. Notwithstanding Sections 3(e)(i) and (e)(ii),
in the first Award Year in which an Employee becomes eligible to participate in the Plan
(taking into consideration eligibility under all other nonqualified account balance plans of
the Company, as well as such plans of any Affiliate required to be aggregated with the Plan
under Section 409A in determining whether such Award Year is in fact the first year of
eligibility under a “plan” that includes the Plan), such Employee may make an irrevocable
initial deferral election within thirty (30) days of becoming first eligible with respect to
that portion of an Incentive Award that relates to services to be performed subsequent to
the election and ending on December 31 of that Award Year; provided that the maximum
portion of such Incentive Award that can be deferred under the Post-2004 Part shall be the
total Incentive Award for the Award Year multiplied by the ratio of the

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number of days remaining in the Award Year over the total number of days in the Award
Year.

     (f) Annual Elections. A deferral election made by a Participant (i) shall be
irrevocable for the Award Year to which it applies and (ii) shall not remain in effect for future
Award Years. Each Participant shall be required to make a separate election for each Award Year in
which the Participant participates in this Plan.

     (g) Subsequent Election as to Time and Form of Payment. Subject to acceptance by the
Committee and the Deduction Limitation, a Participant may elect to delay payment or to change the
form of payment previously elected if all the following conditions are met:

     (i) Such election shall not take effect until at least twelve (12) months after the
date on which the election is made; and

     (ii) The payment with respect to which such election is made is deferred for a period
of not less than five (5) years from the date such payment would otherwise be made; and

     (iii) Any election for a “specified time (or pursuant to a fixed schedule),” within the
meaning of Section 409A, shall not be made less than twelve (12) months prior to the date of
the first scheduled payment.

To the extent permitted under Section 409A, payments previously elected as installments shall be
treated as a right to a series of separate payments.

     (h) Special Election. On or before December 31, 2008, a Participant may make an
election to change the time and form of payment of that portion of his Account credited for Award
Years 2004, 2005, 2006, 2007, and 2008; provided that:

     (i) The requirements for transition relief under Section 409A are met, including the
requirements that no amount subject to the election shall otherwise be payable in 2008 and
that the election shall not cause an amount to be paid in 2008 that would not otherwise be
payable in such year; and

     (ii) The special election shall be subject to Article 5 and the Deduction Limitation.

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ARTICLE 4

Crediting of Deferred Compensation to Accounts

     (a) Establishment of Accounts. There shall be established for each Participant an
Account. An Account shall also be established for any participant or former participant in the
Pre-409A Part with undistributed deferrals under the Pre-409A Part not eligible for grandfathered
treatment under Section 409A.

     The Account of a Participant, as well as any participant or former participant in the Pre-409A
Part, shall be credited with that portion, if any, of his undistributed account balance under the
Pre-409A Part not eligible for grandfathered treatment under Section 409A, as well as Deferred
Compensation related to Award Years 2005 and 2006, and a corresponding debit shall be made to the
applicable account balance under the Pre-409A Part.

     Deferred Compensation attributable to Participant deferral elections shall be allocated to a
Participant’s Account at the time that the Incentive Award would otherwise have been paid to such
Participant had no election to defer been made. Participant’s Accounts shall be credited with
interest equivalents as provided in Section 4(b).

     To facilitate the operation of the Plan, the Committee may direct the establishment and
maintenance of subaccounts within a Participant’s Account. Accounts shall continue to be
maintained until paid out pursuant to the terms of the Post-2004 Part.

     (b) Crediting of Interest Equivalents. Each calendar year, the Committee shall credit
Accounts with interest equivalents equal to simple interest, at a rate of interest equal to the
average of the Chase Manhattan Bank Average Quarterly Prime Rates for the preceding calendar year,
on the value (including any interest previously credited pursuant to this paragraph) of a
Participant’s Account as of the valuation date in the prior calendar year.

ARTICLE 5

Payment of Deferred Compensation Amounts

     (a) Payment Generally. Subject to the Deduction Limitation and except as otherwise
provided in this Article 5, the Deferred Compensation credited to a Participant’s Account with
respect to an Award Year shall be paid in cash to the Participant pursuant to his deferral
election.

     Notwithstanding a Participant’s election, subject to Section 409A, if the Deferred
Compensation credited to a Participant’s Account at the earliest of death or Separation from
Service is equal to or less than $15,000 (taking into consideration the Pre-409A Part and all other
nonqualified account balance plans of the Company and any Affiliate required to be aggregated with
the Account in determining permissible cash outs under Section 409A), the Participant’s Account
shall be paid in a single sum; provided that the Deduction Limitation shall apply.

     Notwithstanding any other provision of the Post-2004 Part, no payment upon a Separation from
Service shall be made until the expiration of six months following a Participant’s Separation from
Service (the “Six-Month Delay”) and such payments shall

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commence on the first March 15th, June 15th, September 15th, or December 15th following the
expiration of such six month period. If installments are elected and effective, the second
installment and any other subsequent installments shall be paid on the anniversary of the first
installment.

     If a Participant elects to receive payment over a period certain (and not upon Separation from
Service), the Participant may choose payment to begin on a particular March 15th, June 15th,
September 15th, or December 15th, and, if installments are elected and effective, the second
installment and any other subsequent installments shall be paid on the anniversary of the first
installment.

     (b) Simultaneous Payments. It is recognized that the payment of Deferred Compensation
with respect to more than one Award Year may become payable to the Participant in the same year.

     (c) Unforeseeable Emergency. Upon the written request of a Participant and the
showing of an Unforeseeable Emergency, the Committee may, within thirty (30) days of its
determination that such an emergency exists, direct that an amount of such Participant’s Account be
paid to him. The amount that can be paid shall not exceed the amount necessary to satisfy the
Unforeseeable Emergency, plus an amount necessary to pay taxes reasonably anticipated because of
such distribution, after taking into account the extent to which such emergency 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 would not itself cause severe financial
hardship).

     For purposes of this Section 5(c), “Unforeseeable Emergency” shall mean a severe financial
hardship of the Participant resulting from an illness or accident of the Participant, the
Participant’s spouse, or the Participant’s dependent (as defined in Section 152(a) of the Internal
Revenue Code); loss of the Participant’s property due to casualty (including the need to rebuild a
home following damage to the home by natural disaster not otherwise covered by insurance); or other
similar or extraordinary and unforeseeable circumstances arising as a result of events beyond the
control of the Participant. Except as otherwise permitted under Section 409A, the purchase of a
home is not an Unforeseeable Emergency, nor is payment of college tuition.

     (d) Section 409A Violation. If the Plan fails to meet the requirements of Section 409A
with respect to a Participant, the Committee will distribute the amount required to be included in
such Participant’s gross income as a result of such failure.

     (e) Change in Control. Unless the Committee has permitted Participants to make
initial elections as to distributions upon a Change in Control, the Committee shall direct upon a
Change in Control that all remaining Deferred Compensation then credited to Participants’ Accounts
shall be distributed to such Participants in a lump sum cash payment within ten (10) days after the
Change in Control.

     (f) Death of Participant. Any undistributed Deferred Compensation credited to a
Participant’s Account at his death shall be paid in a lump sum within ninety (90) days of death
provided that, if such ninety-day period begins in one taxable year and ends in another taxable

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year, neither Participant’s estate nor any beneficiary of Participant’s Account may choose in
which taxable year such lump sum will be paid. A Participant, by written instrument filed with the
Committee in such manner and form as it may prescribe, may designate one or more beneficiaries to
receive payment of the Participant’s Deferred Compensation in the event of his death. Any such
beneficiary designation may be changed from time to time prior to the death of the Participant. If
no beneficiary designation is in effect at a Participant’s death, payment shall be made to his
estate.

     (g) No Forfeiture. Deferred Compensation credited to a Participant’s Account shall,
in all cases, be nonforfeitable.

     (h) Debiting of Accounts. Once an amount of Deferred Compensation has been paid, such
amount shall be debited from the Participant’s Account and shall cease to exist.

     (i) No Acceleration. Except as permitted under Section 409A, no acceleration of the
time or form of payment of a Participant’s Account shall be permitted.

ARTICLE 6

Prohibition Against Assignment or Encumbrance

     No right, title, interest or benefit under the Plan shall ever be liable for or charged with
any of the torts or obligations of a Participant or any person claiming under a Participant, or be
subject to seizure by any creditor of a Participant or any person claiming under a Participant. No
Participant or any person claiming under a Participant shall have the power to anticipate or
dispose of any right, title, interest, or benefit under the Post-2004 Part in any manner until the
same shall have been actually distributed free and clear of the terms of the Post-2004 Part.

ARTICLE 7

Nature of the Plan

     The Company at its election may fund the payment of Deferred Compensation under all or a
portion of the Plan, including the Post-2004 Part, by setting aside and investing, in an account on
the Company’s books, such funds as the Company may from time to time determine. Neither the
establishment of the Plan, the crediting of Deferred Compensation, nor the setting aside of any
funds shall be deemed to create a trust. Legal and equitable title to any funds set aside pursuant
to the Plan shall remain in the Company, and no Participant shall have any security or other
interest in such funds. Any funds so set aside or acquired shall remain subject to the claims of
the creditors, present and future, of the Company and, to the extent required by the Code or other
applicable law, of the Affiliates employing Participants in the Plan.

ARTICLE 8

Employment Relationship

     Subject to the requirements of Section 409A, a Participant shall be considered to be in the
employment of the Company as long as he remains an employee of the Company or of any Affiliate,
including any corporation to which substantially all of the assets and business of the Company are
transferred.

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     Nothing in the adoption of the Plan nor the crediting of Deferred Compensation shall confer on
any Participant the right to continued employment by the Company or any Affiliate, or affect in any
way the right of the Company or any Affiliate to terminate his employment at any time. Any
question as to whether and when there has been a termination of a Participant’s employment (whether
or not such termination constitutes a Separation from Service) for purposes other than Plan
distributions, and the cause of such termination shall be determined by the Committee, and its
determination shall be final.

ARTICLE 9

Effective Date, Amendment and Termination of Plan

     The Post-2004 Part shall be effective as of January 1, 2005. The Committee or the Board of
Directors of the Company may amend, modify, suspend, or terminate (individually or in the
aggregate, a “Change”) the Post-2004 Part for any purpose except that: (i) neither the Committee
nor the Board of Directors of the Company shall make any Change which would impair the rights of a
Participant with respect to Deferred Compensation theretofore credited to that Participant’s
Account; and (ii) following a Change in Control, the terms and conditions of deferrals under the
Post-2004 Part may not be changed to the detriment of any Participant without such Participant’s
written consent. If not sooner terminated under the provisions of the Post-2004 Part, the
Post-2004 Part shall terminate as of the date on which all Deferred Compensation theretofore
credited to Accounts has been paid.

ARTICLE 10

Laws Governing

     The Post-2004 Part shall be construed in accordance with and governed by the laws of the State
of Texas, without giving effect to its conflict of law provisions, and applicable federal law.

ARTICLE 11

Miscellaneous

     (a) Tax Withholding. The Company and/or an employing Affiliate (and any agent of the
Company or such Affiliate) is authorized to withhold from any payment under the Post-2004 Part the
amount of withholding taxes due, in the opinion of the Company and/or Affiliate, in respect of such
payment and to take any other action as may be necessary, in the opinion of the Company and/or
Affiliate, to satisfy all obligations for the payment of such taxes. Any employee taxes due upon
deferrals may be deducted, in accordance with Section 409A, from Participant’s Account.

     (b) Section 409A. Although the Company shall use its best efforts to avoid the
imposition of taxation, penalties, and/or interest under Section 409A, tax treatment of deferrals
and other credits under the Plan (whether the Pre-409A Part or the Post-2004 Part) is not warranted
or guaranteed. No liability shall attach to the Company, any Affiliate, the Committee, the Board
of Directors of the Company, or any delegatee for any taxes, penalties, interest, or other monetary
amounts owed by any Participant, Employee, beneficiary, or other person as a

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result of the deferral or payment of any amounts under the Plan (whether the Pre-409A Part or
the Post-2004 Part) or as a result of the administration of amounts subject to the Plan (whether
the Pre-409A Part or the Post-2004 Part).

     (c) Claims Procedures. Generally payments will be made under the Post-2004 Part
without the necessity of filing a claim. An employee, Participant, beneficiary, or other person
who believes he is entitled to a benefit under the Post-2004 Part (hereinafter referred to as the
“Claimant”) may file a written claim with the Committee. A claim must state with specificity the
determination desired by the Claimant.

     The Committee shall consider the Claimant’s claim within a reasonable time, but no later than
ninety (90) days of receipt of the claim. If the Committee determines that special circumstances
require an extension of time for processing the claim, the Committee shall notify the Claimant in
writing of the extension before the end of the initial ninety (90)-day period and the written
notice shall indicate the special circumstances requiring an extension of time and the date by
which the Committee expects to make a decision. The extension of time shall not exceed ninety (90)
days from the end of the initial ninety (90)-day period.

     The Committee shall notify the Claimant (in writing or electronically) that a determination
has been made and that the claim is either allowed in full or denied in whole or in part. If the
claim is denied in whole or in part, the Committee shall notify (in writing or electronically) such
Claimant or an authorized representative of the Claimant, as applicable, of any adverse benefit
determination within ninety (90) days of receipt of the claim. Any adverse benefit determination
notice shall describe the specific reason or reasons for the denial, refer to the specific Plan
provisions on which the determination was based, describe any additional material or information
necessary for the Claimant to perfect his claim and explain why that material or information is
necessary, describe the Plan’s review procedures and the time limits applicable to those
procedures, including a statement of the Claimant’s right to bring a civil action under ERISA
Section 502(a), following a denial upon review. If the notification is made electronically, it
must comply with applicable Department of Labor Regulations.

     Upon receipt of an adverse benefit determination, a Claimant may, within sixty (60) days after
receiving notification of that determination, submit a written request asking the Company to review
the Claimant’s claim. Each Claimant, when making his request for review of his adverse benefit
determination, shall have the opportunity to submit written comments, documents, records, and any
other information relating to the claim for benefits. Each Claimant shall also be provided, upon
request and free of charge, reasonable access to, and copies of, all documents, records, and other
information relevant to such Claimant’s claim for benefits. The review shall take into account all
comments, documents, records, and other information submitted by the Claimant relating to the
claim, regardless of whether the information was submitted or considered in the initial benefit
determination. If a Claimant does not submit his request for review in writing within the sixty
(60)-day period described above, his claim shall be deemed to have been conclusively determined for
all purposes of the Plan and the adverse benefit determination will be deemed to be correct.

     If the Claimant submits in writing a request for review of the adverse benefit determination
within the sixty (60)-day period described above, the Company (or its designee)

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shall notify (in writing or electronically) him of its determination on review within a
reasonable period of time but not later than sixty (60) days from the date of receipt of his
request for review, unless the Company (or its designee) determines that special circumstances
require an extension of time. If the Company (or its designee) determines that an extension of
time for processing a Claimant’s request for review is required, the Company (or its designee)
shall notify him in writing before the end of the initial sixty (60)-day period and inform him of
the special circumstances requiring an extension of time and the date by which the Company (or its
designee) expects to render its determination on review. The extension of time will not exceed
sixty (60) days from the end of the initial sixty (60)-day period.

     If the Company (or its designee) confirms the adverse benefit determination upon review, the
notification will describe the specific reason or reasons for the adverse determination, refer to
the specific Plan provisions on which the benefit determination is based, include a statement that
the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to the Claimant’s claim and
include a statement describing the Claimant’s right to bring an action under ERISA Section 502(a),
and any other required information under applicable Department of Labor Regulations. The claims
procedure described above shall be administered in a manner not inconsistent with ERISA Section 503
and applicable Department of Labor Regulations.

     A Claimant’s compliance with the foregoing claims procedures shall be a mandatory prerequisite
to the Claimant’s right to commence any legal action with respect to any claim for benefits under
the Plan.

     (d) Genders and Numbers. Whenever permitted by the context each pronoun shall include
other genders or numbers.

     (e) Captions. The captions at the beginnings of the several sections of the Post-2004
Part are not part of the context, but are merely labels to assist in locating those sections, and
shall be ignored in construing the Post-2004 Part.

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Exhibit 10.13

COOPER INDUSTRIES, LTD.

AMENDED AND RESTATED

STOCK INCENTIVE PLAN

(As Amended and Restated for Non-Deferral Terms as of February 12, 2008)

(As Amended and Restated in connection with Section 409A as of January 1, 2005)

I. Purpose of the Plan

     The Cooper Industries Stock Incentive Plan is intended to provide Cooper US, Inc. (the
“Company”) and its affiliates a means by which such companies can engender and sustain a sense of
proprietorship and personal commitment on the part of the executives, managers and other key
employees in the continued growth, development and financial success of the publicly-traded parent,
Cooper Industries, Ltd. (“CBE”) and encourage them to remain with and devote their best efforts to
the business of the Company and its affiliates, thereby advancing the interests of the Company, its
affiliates and CBE shareholders. Accordingly, the Company may award to certain employees shares of
the Common Stock of CBE, on the terms and conditions established herein.

     This amended and restated Stock Incentive Plan, Post-2004 Part, applies only to Awards that
were not vested as of December 31, 2004, and is intended to comply with Section 409A of the Code
and the regulations thereunder. All provisions of the Plan shall be construed in a manner
consistent with such intention. All Awards (or portions thereof) that were vested on or prior to
December 31, 2004 shall be governed by the Cooper Industries Amended and Restated Stock Incentive
Plan, as amended and restated February 9, 2005.

II. Definitions

     2.1 “Affiliate” shall mean any employer, present and future, with which the Company is
considered a single employer under Sections 414(b) and 414(c) of the Code.

     2.2 “Award” means any form of Stock Option, Restricted Stock or Performance Share granted
under the Plan, whether singly or in combination, to a Participant by the Committee pursuant to
such terms, conditions, restrictions and limitations, if any, as the Committee may establish by the
Award Agreement or otherwise.

     2.3 “Award Agreement” means a written agreement with respect to an Award between the Company
and a Participant establishing the terms, conditions, restrictions and limitations applicable to an
Award. To the extent an Award Agreement is inconsistent with the terms of the Plan, the Plan shall
govern the rights of the Participant thereunder.

     2.4 “Board” shall mean the Board of Directors of CBE.

     2.5 “Change in Control” shall mean a change in the ownership or effective control of CBE, or
in the ownership of a substantial portion of the assets of CBE, within the meaning of Section 409A
of the Code.

 

 

     2.6 “Code” means the Internal Revenue Code of 1986, as amended from time to time.

     2.7 “Commission” shall mean the Securities and Exchange Commission.

     2.8 “Committee” means the Management Development and Compensation Committee of the Board, or
such other committee designated by the Board to administer the Plan, provided that the Committee
shall consist of three or more persons, each of whom is an “outside director” within the meaning of
Section 162(m) of the Code and a “disinterested person” within the meaning of Rule 16b-3 under the
Exchange Act.

     2.9 “Common Stock” or “Shares” shall mean the Class A common shares, par value $0.01 a share,
of CBE and other such securities of CBE as the Committee may from time to time determine.

     2.10 “Dividend Equivalent” shall mean any right granted pursuant to Section X hereof.

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

     2.12 “Executive Officer” means an executive officer as defined in Rule 3b-7 promulgated under
the Exchange Act.

     2.13 “Fair Market Value” of a share of Common Stock, as of any date, means the closing sales
price of a share of Common Stock as reported on the Stock Exchange on the applicable date or, if no
sales of Common Stock were made on the Stock Exchange on that date, the closing sales price as
reported on the Stock Exchange for the preceding day on which sales of Common Stock were made and
further provided that, in the event of a Change in Control, Fair Market Value shall not be
less than the highest price per share actually paid for the Common Stock in connection with the
Change in Control of CBE.

     2.14 “Incentive Stock Option” shall mean an option granted under Section VII hereof that is
intended to meet the requirements of Section 422 of the Code or any successor provision thereto.

     2.15 “Nonstatutory Stock Option” shall mean an option granted under Section VII hereof that is
not intended to be an Incentive Stock Option.

     2.16 “Option” shall mean any right granted to a Participant under the Plan allowing such
Participant to purchase Shares at such prices and during such Period or Periods as the Committee
shall determine.

     2.17 “Participant” means an officer or key employee of the Company or its affiliates who is
selected by the Committee to participate in the Plan.

     2.18 “Performance Goals” or “Targets” in respect to Awards of Performance Shares are defined
as the performance criterion or criteria established by the Committee, pursuant to Section 9.3
hereof.

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     2.19 “Performance Period” shall mean that period established by the Committee at the time any
Performance Shares are granted, provided that a Performance Period shall be a minimum of one year.

     2.20 “Performance Share” shall mean any grant pursuant to Section IX hereof of a unit valued
by reference to a designated number of Shares, which value may be paid to the Participant by
delivery of such property as the Committee shall determine, including cash, Shares or any
combination thereof, upon achievement of such Performance Goals during the Performance Period as
the Committee shall establish at the time of such grant or thereafter, or as a reward to recognize
significant personal contributions to Company initiatives under the Cooper Star Program as approved
by the Committee.

     2.21 “Plan” shall mean the Cooper Industries Amended and Restated Stock Incentive Plan,
Post-2004 Part, effective January 1, 2005.

     2.22 “Restricted Stock” shall mean any Shares issued pursuant to Section VIII (or any
restricted stock units granted pursuant to Section VIII that are valued by reference to a
designated number of Shares) and which are subject to such terms, conditions and restrictions as
the Committee deems appropriate, including but not limited to restrictions on transferability,
which restrictions may lapse separately or in combination at such time or times, in installments or
otherwise, as the Committee may deem appropriate.

     2.23 “Section 162(m)” means Section 162(m) of the Code and the regulations and rulings
promulgated thereunder.

     2.24 “Section 409A” means Section 409A of the Code and the regulations and rulings promulgated
thereunder.

     2.25 “Separation from Service” shall mean the termination of employment of a Participant with
the Company and all Affiliates for any reason other than death; provided, however, that a
Company-approved leave of absence shall not be considered a termination of employment if the leave
does not exceed six (6) months or, if longer, so long as the Participant’s right to reemployment is
provided either by statute or by contract. Whether a Participant has incurred a Separation from
Service shall be determined in accordance with Section 409A.

     2.26 “Stock Exchange” means the New York Stock Exchange, Inc. (“NYSE”) or, if the Common Stock
is no longer included on the NYSE, then such other market price reporting system on which the
Common Stock is traded or quoted.

     2.27 “Voting Stock” means securities entitled to vote in an election of Directors of CBE.

III. Administration

     3.1 The Plan shall be administered by the Committee.

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     3.2 Subject to the provisions of the Plan, the Committee shall have the authority in its sole
discretion to administer the Plan and to exercise all the powers and authorities either
specifically granted to it under the Plan or necessary or advisable in the administration of the
Plan, including, without limitation, the authority to select the Participants; to determine the
type of Awards to be made to Participants; to determine the Shares subject to any Award and the
terms, conditions and restrictions relating to any Award; to determine whether, to what extent and
under what circumstances any Award may be settled, cancelled, forfeited, exchanged, or surrendered;
to waive or modify any condition applicable to an Award (other than a Performance Share Award to
Executive Officers if inconsistent with Section 162(m)); to make adjustments in the performance
goals of an Award (i) in recognition of unusual or nonrecurring events affecting CBE or the
financial statements of CBE (with respect to Awards made to Executive Officers, to the extent in
accordance with Section 162(m), if applicable) or (ii) in response to changes in applicable laws,
regulations, or accounting principles; to interpret the Plan; to establish, amend or rescind any
administrative policies; to determine the terms and provisions of any agreements entered into
hereunder; and to make all other determinations necessary or advisable for the administration of
the Plan. The Committee may correct any defect, supply any omission or reconcile any inconsistency
in the Plan or in any Award in the manner and to the extent it shall deem desirable to carry it
into effect. The determinations of the Committee in the administration of the Plan, as described
herein, shall be final and conclusive: provided, however, that no action shall be taken which will
prevent Awards granted under the Plan from meeting the requirements for exemption from Section
16(b) of the Exchange Act, or subsequent comparable statute, as set forth in Rule 16b-3 under the
Exchange Act or any subsequent comparable rule; and, provided further, that no action shall be
taken which will prevent Awards hereunder (i) that are intended to provide “performance-based
compensation,” within the meaning of Section 162(m), from doing so or (ii) that are intended to
comply with the requirements of Section 409A, from doing so.

     3.3 In order to enable Participants who are foreign nationals or employed outside the United
States, or both, to receive Awards under the Plan, the Committee may adopt such amendments,
subplans and the like as are necessary or advisable, in the opinion of the Committee, to effectuate
the purposes of the Plan.

     3.4 Notwithstanding the powers and authorities of the Committee set forth in this Section III,

	 	•	 	the Committee shall not permit the repricing of Stock Options by any method,
including by cancellation and reissuance, and
	 
	 	•	 	the Committee may only accelerate the vesting or exercisability of an Award: (i)
upon termination of employment by a Participant subject to the limitations set
forth in Section XII or (ii) upon the death, disability or retirement of a
Participant or a Change in Control.

IV. Eligibility

     Any key employee of the Company or any of its subsidiaries or affiliates is eligible to
receive one or more Awards under the Plan.

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V. Shares Subject to the Plan

     5.1 There shall be available for Awards granted wholly or partly in Common Stock (including
rights or options which may be exercised for or settled in Common Stock) during the term of this
Plan since its inception in 1996 an aggregate of 41,000,000 shares of Common Stock, subject to the
adjustments provided for in Section XIV hereof. The 41,000,000 Shares available for Awards consist
of 34,000,000 Shares (adjusted to reflect the two-for-one stock split completed in March 2007)
previously approved by the Company and CBE shareholders and 7,000,000 Shares approved by
shareholders at the 2008 Annual Meeting. Of the 7,000,000 Shares approved by shareholders at the
2008 Annual Meeting, no more than 2,100,000 Shares are available for Restricted Stock and
Performance Shares.

     5.2 Shares of Common Stock available for issuance under the Plan may be authorized and
unissued Shares, outstanding CBE Class A common shares held by the Company, or CBE Class B common
shares convertible into Class A common shares for issuance under the Plan, as the Company and CBE
may from time to time determine. The Board of Directors and the appropriate officers of CBE shall
from time to time take whatever actions are necessary to file required documents with governmental
authorities and the Stock Exchange to make shares of Common Stock available for issuance pursuant
to Awards. Common Stock related to Awards that are forfeited or otherwise terminated, or expire
unexercised, shall immediately become available for Awards hereunder. If an Award is exchanged for
cash or other property of comparable value, the Common Stock related to the Award will be deducted
from the Shares available for Awards hereunder. Any Shares issued by CBE in respect of the
assumption or substitution of outstanding awards from a corporation or other business entity
acquired by CBE shall not reduce the number of Shares available for Awards under this Plan. The
Committee may from time to time adopt and observe such procedures concerning the counting of shares
against the Plan maximum as it may deem appropriate under Rule 16b-3 issued pursuant to the
Exchange Act.

     5.3 The number of shares of Common Stock subject to Awards granted under the Plan to any
individual who is an Executive Officer shall not exceed the limits set forth below:

	 	•	 	Stock Options — a total of 3,000,000 Shares in a continuous five (5) year
period.
	 
	 	•	 	Restricted Stock and Performance Shares — the greater of 250,000 Shares per
calendar year or a total of 1,000,000 Shares in a continuous four (4) year period.

Determinations under the preceding sentence shall be made in a manner that is consistent with
Section 162(m).

VI. Awards

     Awards under the Plan may consist of: Stock Options (either Incentive Stock Options within the
meaning of Section 422 of the Code or Nonstatutory Stock Options), Restricted Stock, or Performance
Shares. Awards of Performance Shares and Restricted Stock may provide the

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Participant with dividends or Dividend Equivalents and voting rights prior to vesting (whether based on a period of
time or based on attainment of specified performance conditions). The terms, conditions and
restrictions of each Award shall be set forth in an Award Agreement.

VII. Stock Options

     7.1 Grants. Awards may be granted in the form of Stock Options. Stock Options may be
Incentive Stock Options within the meaning of Section 422 of the Code or Nonqualified Stock Options
or a combination of both, or any particular type of tax-advantaged option authorized by the Code
from time to time, and approved by the Committee.

     7.2 Terms and Conditions of Options. A Stock Option shall be exercisable in whole or in such
installments and at such times and upon such terms as may be determined by the Committee: provided,
however, that no Stock Option shall be exercisable more than 10 years after the date of grant
thereof. The option exercise price shall be established by the Committee, but such price shall not
be less than the Fair Market Value on the date of the Stock Option’s grant, subject to adjustment
as provided in Section XIV hereof.

     7.3 Restrictions Relating to Incentive Stock Options. Stock Options issued in the form of
Incentive Stock Options shall, in addition to being subject to all applicable terms, conditions,
restrictions and limitations established by the Committee, comply with Section 422 of the Code.
The aggregate Fair Market Value of stock with respect to which Incentive Stock Options (granted
pursuant to this Plan or any other plan of the Company or any Affiliate) are first exercisable by
any Participant during any calendar year may not exceed One Hundred Thousand Dollars ($100,000).
Incentive Stock Options shall be granted only to key employees of the Company and its
“subsidiaries” within the meaning of Section 424 of the Code.

     7.4 Payment. Upon exercise, a Participant may pay the option exercise price of a Stock Option
in cash or Shares, or a combination of cash and Shares, or such other consideration as the
Committee may deem appropriate. The Committee shall establish appropriate methods for accepting
Common Stock and may impose such conditions as it deems appropriate on the use of Common Stock to
exercise a Stock Option.

     7.5 Additional Terms and Conditions. The Committee may, by way of the Award Agreement or
otherwise, establish such other terms, conditions or restrictions, if any, on any Stock Option
Award, provided they are not inconsistent with the Plan or Section 409A. The Committee may condition
the vesting of Stock Options on the achievement of financial performance criteria established by
the Committee at the time of grant.

VIII. Restricted Stock Awards

     8.1 Grants. Awards may be granted in the form of Restricted Stock (“Restricted Stock
Awards”). Restricted Stock Awards shall be awarded in such numbers and at such times as the
Committee shall determine.

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     8.2 Award Restrictions. Restricted Stock Awards shall be subject to such terms, conditions or
restrictions as the Committee deems appropriate, including, but not limited to, restrictions on
transferability, requirements of continued employment, individual performance or the financial
performance of CBE. The period of vesting and the forfeiture restrictions shall be established by
the Committee at the time of grant, provided that the period of vesting shall be at least three
years from the date of grant, except as provided in Section XVIII.

     8.3 Rights as Shareholders. The Committee may, in its discretion, grant to the Participant to
whom such Restricted Stock has been awarded, all or any of the rights of a shareholder with respect
to such shares of Restricted Stock, including the right to receive dividends or Dividend
Equivalents.

     8.4 Evidence of Award. Any Restricted Stock Award granted under the Plan may be evidenced in
such manner as the Committee deems appropriate, including, without limitation, book entry
registration or issuance of a stock certificate or certificates.

IX. Performance Share Awards

     9.1 Grants. Awards may be granted in the form of Performance Shares.

     9.2 Performance Shares. The Committee may grant an Award of Performance Shares to
Participants as of the first day of each Performance Period. Performance Goals will be established
by the Committee not later than 90 days after the commencement of the Performance Period relating
to the specific Award. At the end of the Performance Period, the Performance Shares shall be
converted into Common Stock (or cash or a combination of Common Stock and cash, as determined by
the Award Agreement) and distributed to Participants based upon such entitlement. The Committee
may also grant Performance Shares as a reward to employees to recognize significant personal
contributions to Company initiatives under the Cooper Star Program. Award payment in respect of
Performance Shares made in cash rather than the issuance of Common Stock shall not, by reason of
such payment in cash, result in additional Shares being available for reissuance pursuant to
Section V hereof.

     9.3 Performance Criteria. Notwithstanding anything to the contrary contained in this Section
IX, Performance Share Awards shall be made to Executive Officers only in
compliance with Section 162(m). Performance criteria used to establish Performance Goals for
Performance Share Awards granted to Executive Officers must include one or any combination of the
following: (i) CBE’s return on equity, assets, capital or investment; (ii) pre-tax or after-tax
profit levels expressed in earnings per share of CBE or any subsidiary or business segment of CBE;
(iii) cash flow or similar measure; (iv) total shareholder return; (v) change in the market price
of the Common Stock; (vi) market share; or (vii) debt ratios or
similar measures. The Performance Goals established by the Committee for
each Performance Share Award will specify achievement targets with respect to each applicable
performance criterion (including a threshold level of performance below which no amount will become
payable with respect to such Award). To the extent applicable, any such Performance Goals shall be
determined in accordance with generally accepted accounting principles. Each Award will specify the amount payable, or the formula for determining the

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amount payable, upon achievement of the various applicable Performance Targets.
The Performance Goals established by the Committee may be
(but need not be) different for each Performance Period and different Performance Goals may be
applicable for Awards to different Executive Officers in the same Performance Period. Payment
shall be made with respect to a Performance Share Award to an Executive Officer only after the
attainment of the applicable Performance Goals has been certified in writing by the Committee.

     9.4 Adjustments. The Committee shall be authorized to make adjustments in the method of
calculating attainment of Performance Goals in recognition of: (i) extraordinary or non-recurring
items; (ii) changes in tax laws; (iii) changes in generally accepted accounting principles or
changes in accounting policies; (iv) charges related to restructured or discontinued operations;
(v) restatement of prior period financial results; and (vi) any other unusual, non-recurring gain
or loss that is separately identified and quantified in CBE’s financial statements.
Notwithstanding the foregoing, the Committee may, at its sole discretion, modify the performance
results upon which Awards are based under the Plan, to offset any unintended result(s) arising from
events not anticipated when the Performance Goals were established, provided, that such adjustment
is permitted by Section 162(m).

     9.5 Additional Terms and Conditions. The Committee may, by way of the Award Agreement or
otherwise, determine the manner of payment of Awards of Performance Shares and other terms,
conditions or restrictions, if any, on any Award of Performance Shares, provided they are
consistent with the Plan.

X. Dividends

     Upon issuance of Performance Shares earned under the Plan, the Company also shall pay to the
Participant an amount equal to the aggregate amount of dividends that the Participant would have
received had the Participant been the owner of record of such earned Performance Shares during the
Performance Period. Upon the grant of restricted stock units, the Committee may, in its
discretion, provide for the accrual or payment of dividends that the Participant would have
received had the Participant been the owner of record of the underlying Shares during the vesting
period.

XI. Deferrals and Settlements of Performance Shares

     The Committee may require or permit Participants to elect to defer the issuance of Shares or
cash pursuant to an Award under such administrative policies as it may establish under the Plan,
provided that such policies are consistent with the requirements of Section 409A. The Committee
also may provide that deferred settlements include the payment or crediting of interest on the
deferred amount, or for the payment or crediting of Dividend Equivalents where the deferral amounts
are denominated in Shares.

     A Participant shall also elect the time and form of payment of deferred Shares at the time the
election to defer Shares is made. A Participant may elect (x) a single lump sum distribution of
Shares and cash or (y) a series of substantially equal installments over a period certain of up to
three (3) years. The Shares remaining to be distributed shall continue to earn Dividend

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Equivalents as provided in Section X. Subject to the terms of the Plan, the election shall specify
the calendar year in which the distribution of the deferred Shares for that Performance Period
shall be made or shall commence. Subject to any limitations imposed by the Committee and/or
Section 409A, the specified calendar year may be a calendar year during the Participant’s active
employment or the earlier or later of the calendar year in which a Participant incurs a Separation
from Service or attains a specified age.

     Notwithstanding any other provision of this Plan or any deferral election filed by a
Participant, in the event any Participant defers the issuance of Shares or cash pursuant to an
Award of Performance Shares, no payment of such Shares or cash may be made to the Participant
before the date that is six (6) months after the date of the Participant’s Separation from Service
from the Company and any Affiliate (or, if earlier, the date of the Participant’s death).

     Any undistributed Shares credited to a Participant at his death shall be distributed in a lump
sum within ninety (90) days of death provided that, if such ninety-day period begins in one taxable
year and ends in another taxable year, neither Participant’s estate nor any beneficiary of
Participant may choose in which taxable year such distribution will be made. A Participant, by
written instrument filed with the Committee in such manner and form as it may prescribe, may
designate one or more beneficiaries to receive payment of the Participant’s deferred Shares in the
event of his death. Any such beneficiary designation may be changed from time to time prior to the
death of the Participant. If no beneficiary designation is in effect at a Participant’s death,
payment shall be made to his estate.

     On or before December 31, 2008, a Participant may make an election to change the time and form
of payment of any deferred Shares credited for the Performance Periods 2002-2003 through 2008-2010;
provided that (i) the requirements for transition relief under Section 409A are met, including the
requirements that no Shares subject to the election shall otherwise be distributable in 2008 and
that the election shall not cause any Shares to be distributed in 2008 that would not otherwise be
distributable in such year and (ii) the special election shall be subject to this Section XI.

XII. Termination of Employment

     Upon the termination of employment by a Participant, any unexercised, deferred or unpaid
Awards shall be treated as provided in the specific Award Agreement evidencing the Award, except
that the Committee may, in its discretion:

	 	•	 	accelerate the vesting or exercisability of an Award, provided the aggregate
number of Shares relating to such accelerated Awards does not exceed 350,000
Shares plus 5% of any additional Shares authorized under the Plan after the date
of the 2008 Annual Shareholders’ Meeting,
	 
	 	•	 	eliminate or make less restrictive any restrictions contained in an Award, or

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	 	•	 	waive any restriction or other provision of this Plan or an Award or otherwise
amend or modify the Award in any manner that is either: (i) not adverse to such
Participant; or (ii) consented to by such Participant.

     Notwithstanding the preceding sentence, the Committee shall not have the power to accelerate
the payment of any Shares or cash deferred pursuant to Article XI hereunder, nor to amend any Award
in any manner, unless such acceleration or amendment is (i) permitted by Section 409A or (ii)
consented to by such Participant.

XIII. Transferability and Exercisability

     Awards granted under the Plan shall not be transferable or assignable other than: (i) by will
or the laws of descent and distribution; (ii) by gift or other transfer of an Award (other than an
Incentive Stock Option unless permitted by the Code) to any trust or estate in which the original
Award recipient or such recipient’s spouse or other immediate relative has a substantial beneficial
interest, or to a spouse or other immediate relative, provided that any such transfer is permitted
subject to Rule 16b-3 issued pursuant to the Exchange Act as in effect when such transfer occurs
and the Board does not rescind this provision prior to such transfer; or (iii) pursuant to a
qualified domestic relations order (as defined by the Code). However, any Award so transferred
shall continue to be subject to all the terms and conditions contained in the Award Agreement.

XIV. Adjustments

     14.1 The existence of outstanding Awards shall not affect in any manner the right or power of
CBE or its shareholders to make or authorize: (i) any adjustments, recapitalizations,
reorganizations or other changes in the capital stock of CBE or its business; (ii) any merger or
consolidation of CBE; (iii) any issuance of bonds, debentures, preferred or prior preference stock
(whether or not such issue is prior to, on a parity with or junior to the Common Stock); (iv) the
dissolution or liquidation of CBE, or any sale or transfer of all or any part of its assets or
business; or (v) any other corporate act or proceeding of any kind, whether or not of a
character similar to that of the acts or proceedings enumerated above.

     14.2 If there is a change in the number of outstanding Shares of Common Stock by reason of any
stock dividend, stock split or reverse stock split, recapitalization, reclassification,
reorganization, merger, consolidation, combination, or exchange of Shares, or similar corporate
change, an equitable substitution or proportionate adjustment shall be made to: (i) the aggregate
number of Shares available for issuance under the Plan; (ii) the number of Shares subject to
outstanding Awards granted under the Plan; (iii) the Option exercise price per Share; (iv) the
number of deferred Shares credited to a Participant’s account pursuant to Section XI; and (v) the
limit on the number of shares subject to Awards pursuant to Section 5.3 hereof. Any substitution
or adjustment of an Award shall be made in a manner consistent with the requirements of Section
409A.

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XV. Withholding Taxes

     The Company shall have the right to deduct from any payment to be made pursuant to the Plan
the amount of any taxes required by law to be withheld therefrom, or to require a Participant to
pay to the Company such amount required to be withheld prior to the issuance or delivery of any
shares of Common Stock or the payment of cash under the Plan. The Committee may, in its
discretion, permit a Participant to elect to satisfy such withholding obligation by (i) having the
Company retain the number of shares of Common Stock, or (ii) tendering the number of shares of
Common Stock, in either case, whose Fair Market Value equals the amount required to be withheld.
Any fraction of a share of Common Stock required to satisfy such obligation shall be disregarded
and the amount due shall instead be paid in cash, to or by the Participant, as the case may be.

XVI. Regulatory Approvals and Listings

     Notwithstanding anything contained in this Plan to the contrary, the Company shall have no
obligation to issue or deliver certificates evidencing Shares under this Plan prior to: (i) the
obtaining of any approval from any governmental agency which the Company shall, in its sole
discretion, determine to be necessary or advisable; (ii) the listing of such Shares on the Stock
Exchange; and (iii) the completion of any registration or other qualification of the Shares under
any state or federal law or ruling of any governmental body which the Company shall, in its sole
discretion, determine to be necessary or advisable.

XVII. No Right to Continued Employment or Grants

     No person shall have any claim or right to be granted an Award, and the grant of an Award
shall not be construed as giving a Participant the right to be retained in the employ of the
Company or its subsidiaries or affiliates. Further, the Company and its subsidiaries and
affiliates expressly reserve the right at any time to terminate the employment of any Participant
free from any liability, or any claim under the Plan, except as provided herein or in any Award
Agreement entered into hereunder.

XVIII. Change in Control

     18.1 Vesting and Deferral.

     (i) Vesting. Immediately upon a Change in Control, all outstanding Awards
shall vest automatically, all forfeiture restrictions shall lapse, and all
Performance Share Awards shall be deemed earned at the commendable Performance Goal
level.

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     (ii) Deferral. Accounts denominated in cash immediately prior to a Change in
Control shall continue to be denominated in cash following a Change in Control.
Accounts denominated in Shares immediately prior to a Change in Control shall,
following such Change in Control, be denominated in (a) such form of consideration
as the Participant would have received had the Participant been the owner of record
of such Shares at the time of such Change in Control, in the case of a Change in
Control With Consideration and (b) Shares, in the case of a Change in Control
Without Consideration.

     (iii) Definitions. “Change in Control With Consideration” shall mean a Change in
Control in which Shares are exchanged or surrendered for shares, cash or other property.
“Change in Control Without Consideration” shall mean a Change in Control pursuant to which
Shares are not exchanged or surrendered for shares, cash or other property.

     18.2 Payment and Rollover.

     (i) Payment of Deferral Accounts Relating to Performance Share Awards. In the
event of a Change in Control, all Deferral Accounts related to Performance Share
Awards shall be paid out in cash to a Participant on the date of such Change in
Control, with the amount of such cash equal to the Fair Market Value of the
Performance Shares held in the Participant’s Account.

     (ii) Payment of Restricted Stock Awards. With respect to outstanding
Restricted Stock Awards, the Company shall, within ten (10) days after the
occurrence of a Change in Control, (a) issue or cause to be issued, for any Shares
covered by such Awards, (i) such form of consideration as the Participant would have
received had the Participant been the owner of record of such Shares at the time of
such Change in Control, in the case of a Change in Control With Consideration and
(ii) Shares, in the case of a Change in Control Without Consideration and (b)
make, or cause to be made, a lump sum cash payment to the
Participant for any accrued interest and Dividend Equivalents.

     (iii) Stock Option Rollover or Cash-Out. With respect to outstanding Stock
Options which have vested pursuant to Section 18.1 of the Plan, unless the Committee has
determined to make an equitable adjustment or substitution of such Stock Options pursuant to
Section 14.2 of the Plan as a result of the Change in Control, upon a Change in Control the
Company shall cancel such Stock Options and, within 10 days thereafter, the Company shall
make or cause to be made a cash payment to each holder thereof in an amount equal to the
excess, if any, of the Fair Market Value of the Shares subject to such Stock Option over the
option exercise price, multiplied by the number of Shares subject to such Stock Option.

     18.3 It is recognized that under certain circumstances: (a) payments or benefits provided to a
Participant might give rise to an “excess parachute payment” within the meaning of Section 280G of
the Code; and (b) it might be beneficial to a Participant to disclaim some

12

 

portion of the payment or benefit in order to avoid such “excess parachute payment” and thereby avoid the imposition of an
excise tax resulting therefrom; and (c) under such circumstances it would not be to the
disadvantage of the Company or CBE to permit the Participant to disclaim any such payment or
benefit in order to avoid the “excess parachute payment” and the excise tax resulting therefrom.

     Accordingly, the Participant may, at the Participant’s option, exercisable at any time or from
time to time, disclaim any entitlement to any portion of the payment or benefits arising under this
Plan which would constitute “excess parachute payments,” and it shall be the Participant’s choice
as to which payments or benefits shall be so surrendered, if and to the extent that the Participant
exercises such option, so as to avoid “excess parachute payments” provided, however, that
Participant must first surrender payments or benefits that are payable in the same calendar year as
the event giving rise to such “excess parachute payment” and, if additional payments or benefits
are surrendered, must then surrender payments or benefits that are payable in the immediately
succeeding calendar year and provided further that no payment or benefit that is
surrendered shall affect the amount of payment or benefit payable in a subsequent calendar year.

     18.4 The granting of Awards under the Plan shall in no way affect the right of the Company or
CBE to adjust, reclassify, reorganize or otherwise change its capital or business structures or to
merge, consolidate, dissolve, liquidate, sell or transfer all or any portion of its business or
assets.

XIX. Amendment, Modification, Suspension

or Termination

     The Board may amend, modify, suspend or terminate (individually or in the aggregate, a
“Change”) this Plan for any purpose except that: (i) no Change that would impair the rights of any
Participant under any Award previously granted to such Participant shall be made without
such Participant’s consent, (ii) no Change shall be effective prior to approval by CBE’s
shareholders to the extent such approval is required: (a) pursuant to Rule 16b-3 in order to
preserve the applicability of any exemption provided by such rule to any Award then outstanding
(unless the holder of such Award consents); (b) pursuant to Section 162(m); or (c) otherwise
required by applicable legal requirements including applicable requirements of the Stock Exchange
on which CBE is listed and (iii) following a Change in Control, the terms and conditions of
deferrals under the Plan may not be changed to the detriment of any Participant without such
Participant’s written consent.

XX. Governing Law

     The validity, construction and effect of the Plan and any actions taken or relating to the
Plan shall be determined in accordance with the laws of the State of Texas and applicable Federal
law.

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XXI. Rights as Shareholder

     Except as otherwise provided in the Award Agreement, a Participant shall have no rights as a
shareholder until he or she becomes the holder of record.

XXII. Other Benefit and Compensation Programs

     Unless otherwise specifically provided to the contrary in the relevant plan, program or
practice, settlements of Awards received by Participants under the Plan shall not be deemed a part
of a Participant’s regular, recurring compensation for purposes of calculating payments or benefits
from any Company or CBE benefit plan, program or practice or any severance pay law of any country.
Further, the Company and CBE may adopt other compensation programs, plans or arrangements as it
deems appropriate or necessary.

XXIII. Unfunded Plan

     Unless otherwise determined by the Committee, the Plan shall be unfunded and shall not create
(or be construed to create) a trust or a separate fund or funds. The Plan shall not establish any
fiduciary relationship between the Company and any Participant or other person. To the extent any
person holds any rights by virtue of an Award granted under the Plan, such rights (unless otherwise
determined by the Committee) shall be no greater than the rights of an unsecured general creditor
of the Company.

XXIV. Use of Proceeds

     The cash proceeds received by the Company from the issuance of Shares pursuant to Awards under
the Plan shall constitute general funds of the Company.

XXV. Successors and Assigns

     The Plan shall be binding on all successors and assigns of a Participant, including,
without limitation, the estate of such Participant and the executor, administrator or trustee of
such estate, or any receiver or trustee in bankruptcy or representative of the Participant’s
creditors.

XXVI. Effective Date

     This Plan shall be effective as of the date it is approved by the Board of Directors of CBE.
Subject to earlier termination pursuant to Section XIX, the Plan shall continue in effect through
November 7, 2015. After termination of the Plan, no future Awards may be granted but previously
granted Awards shall remain outstanding in accordance with their applicable terms and conditions
and the terms and conditions of the Plan.

XXVII. Interpretation

     The Plan as applicable to certain employees is designed and intended to comply with Rule 16b-3
promulgated under the Exchange Act, with Section 162(m), and with Section 409A,

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and all provisions hereof shall be construed in a manner to so comply with respect to such employees. Notwithstanding
any other provision of the Plan, although the Board, the Committee, and any designee of the Board
or Committee shall use their best efforts to avoid the imposition of taxation, penalties, and
interest under Section 409A, the tax treatment of Participant deferrals under the Plan shall not
be, and is not, warranted or guaranteed. Neither the Company, the Board, the Committee, nor any of
their designees shall be held liable for any taxes, penalties, or other monetary amounts owed by a
Participant, Beneficiary, or other person as a result of any deferral or payment under the Plan.

15

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