Document:

ex10b.htm

EXHIBIT 10(b)

 

 

KEY EMPLOYEES’ DEFERRED COMPENSATION PROGRAM OF

THE BRINK’S COMPANY

(Amended and Restated as of February 3, 2012)

 

 

PREAMBLE

 

The Key Employees’ Deferred Compensation Program of The Brink’s Company, as amended and restated (the “Program”), provides an opportunity to certain employees to defer receipt of (a) all or part of their cash incentive payments awarded under the Key Employees Incentive Plan of The Brink’s Company; (b) up to 50% of their base salary; (c) any or all amounts that are prevented from being deferred as a matched contribution (and the related matching contribution) under The Brink’s Company 401(k) Plan as a result of limitations imposed by Sections 401(a)(17), 401(k)(3), 402(g) and 415
of the Internal Revenue Code of 1986, as amended (the “Code”); and (d) all or part of their amounts payable under The Brink’s Company Management Performance Improvement Plan.

 

In order to align the interests of participants more closely to the long term interests of The Brink’s Company (the “Company”) and its shareholders, the Program also (a) provides matching contributions with respect to certain cash incentive awards and salary deferrals and (b) allocates under the Program an amount equivalent to matching contributions that are not eligible to be made under The Brink’s Company 401(k) Plan as a result of limitations imposed by Code Section 401(m)(2).

 

The Program is an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees, within the meaning of Section 201(2) of the Employee Retirement Income Security Act of 1974, as amended.

 

 

ARTICLE 1

Definitions

 

Section 1.01 . Definitions.

 

Wherever used in the Program, the following terms shall have the meanings indicated:

 

“Board”  The Board of Directors of the Company.

 

  

  

  

“Brink’s Stock”  The Brink’s Company Common Stock, par value $1.00 per share.

 

“Cause”  (a) Embezzlement, theft or misappropriation by the Employee of any property of the Company, (b) the Employee’s willful breach of any fiduciary duty to the Company, (c) the Employee’s willful failure or refusal to comply with laws or regulations applicable to the Company and its business or the policies of the Company governing the conduct of its employees, (d) the Employee’s gross incompetence in the performance of the Employee’s job duties, (e) commission by the Employee of a felony or of any crime involving moral turpitude, fraud or misrepresentation, (f)
the failure of the Employee to perform duties consistent with a commercially reasonable standard of care or (g) any gross negligence or willful misconduct of the Employee resulting in a loss to the Company.

 

“Change in Control”  A Change in Control shall mean the occurrence of:

 

(a) (i) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which the shares of Brink’s Stock would be converted into cash, securities or other property other than a consolidation or merger in which holders of the total voting power in the election of directors of the Company of Brink’s Stock outstanding (exclusive of shares held by the Company’s affiliates) (the “Total Voting Power”) immediately prior to the consolidation or merger will have the same proportionate ownership of the total voting power in the
election of directors of the surviving corporation immediately after the consolidation or merger, or (ii) any sale, lease, exchange or other transfer (in one transaction or a series of transactions) of all or substantially all the assets of the Company; provided, however, that with respect to any Units credited to an Employee’s Incentive Account as of November 16, 2007 that are attributable to Matching Incentive Contributions, Matching Salary Contributions or dividends related thereto, a “Change in Control” shall be deemed to occur upon the approval of the shareholders of the Company (or if
such approval is not required, the approval of the Board) of any of the transactions set forth in clauses (i) or (ii) of this sub-paragraph (a);

 

(b) any “person” (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Act”)) other than the Company, its affiliates or an employee benefit plan or trust maintained by the Company or its affiliates, shall become the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of more than 20% of the Total Voting Power; or

 

(c) at any time during a period of two consecutive years, individuals who at the beginning of such period constituted the Board shall cease for any reason to constitute at least a majority thereof, unless the election by the Company’s shareholders of each new director during such two-year period was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such two-year period.

 

“Code”  The Internal Revenue Code of 1986, as amended from time to time.

 

 

  

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“Committee”  The Compensation and Benefits Committee of the Board, which shall consist of members of the Board who qualify as “nonemployee directors” as described in Rule 16b-3(b)(3)(i) promulgated under the Securities Exchange Act of 1934, as amended.

 

“Company”  The Brink’s Company.

 

“Disability”  Unless otherwise required by Code Section 409A and the regulations or guidance thereunder, an Employee shall be deemed to be disabled if the Employee meets at least one of the following requirements: (a) the Employee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (b) the Employee is, by reason of any medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under a disability benefit plan covering employees of the Company.

 

“Employee”  Any resident of the United States of America who is in the employ of the Company or a Subsidiary whose principal place of business is located in the United States of America or any other individual designated by the Committee.

 

“Equity Incentive Plan”  The Brink’s Company 2005 Equity Incentive Plan, as the same may be amended from time to time, and any successor plan thereto.

 

“Foreign Subsidiary”  Any corporation that is not incorporated in the United States of America more than 80% of the outstanding voting stock of which is owned by the Company, by the Company and one or more Subsidiaries and/or Foreign Subsidiaries or by one or more Subsidiaries and/or Foreign Subsidiaries.

 

“Incentive Account”  The account maintained by the Company for an Employee to document the amounts deferred under the Program by such Employee and any other amounts credited hereunder and the Units into which such amounts shall be converted.

 

“Program”  This Key Employees’ Deferred Compensation Program of The Brink’s Company, as in effect from time to time.

 

“Retirement”  With respect to any Employee, any termination of such Employee’s employment on or after the date on which the Employee has (i) attained age 65 and completed at least five years of service with the Company or any of its Subsidiaries or (ii) attained age 55 and completed at least ten years of service with the Company or any of its Subsidiaries; provided that the Employee’s employment is not terminated for Cause.

 

“Salary”  The base salary paid to an Employee by the Company, a Subsidiary or a Foreign Subsidiary for personal services determined prior to reduction for any contribution made on a salary reduction basis.

 

 

  

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“Shares”  Brink’s Stock.

 

“Subsidiary”  Any corporation incorporated in the United States of America more than 80% of the outstanding voting stock of which is owned by the Company, by the Company and one or more Subsidiaries or by one or more Subsidiaries.

 

“Termination of Employment”  An Employee’s “Termination of Employment” under this Program shall occur when the Employee ceases to provide services to the Company or any of its affiliates in any capacity or when the Employee continues to provide services to the Company or any of its affiliates whether as an employee or independent contractor, but such continued services in the aggregate do not exceed 49% of the level of services the Employee provided to the Company and its affiliates prior to such decrease in the level of services provided by the Employee to the Company and
its affiliates, all as determined in accordance with the regulations under Code Section 409A.

 

“Unit”  The equivalent of one share of Brink’s Stock credited to an Employee’s Incentive Account.

 

“Year”  With respect to the benefits provided pursuant to Articles 3, 4, 5 and 6, the calendar year; provided, however that if a newly-hired Employee becomes eligible to participate in the benefits provided pursuant to Articles 4 and/or 5, on a day other than the first day of the Year, the Year for purposes of Articles 4 and 5 shall be the portion of the calendar year during which the Employee is first
eligible to participate in the benefits provided thereunder.

 

 

ARTICLE 2

available shares; Administration

 

Section 2.01.  Available Shares.  The maximum number of Shares available for issuance under the Program is subject to, and shall be counted against, the maximum number of Shares available for issuance under the Equity Incentive Plan.  Each Unit standing to the credit of an Employee’s Incentive Account shall be counted against the maximum Share limit under the Equity Incentive Plan in the manner set forth under the Equity Incentive Plan. Notwithstanding the foregoing, this Section 2.01 shall only apply to
Units credited to an Employee’s Incentive Account on or after May 7, 2010.

 

Section 2.02.  Administration.  The Committee is authorized to construe the provisions of the Program and to make all determinations in connection with the administration of the Program including, but not limited to, the Employees who are eligible to participate in the benefits provided under Articles 3 or 4.  All such determinations made by the Committee shall be final, conclusive and binding on all parties, including Employees participating in the Program.  All authority of the Committee provided
for in, or pursuant to, this Program may also be exercised by the Board.  In the event of any conflict or inconsistency between determinations, orders, resolutions or other actions of the Committee and the Board taken in connection with 

 

 

  

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this Program, the actions of the Board shall control.  In addition, other than with respect to the Share counting provision addressed by Section 2.01 above, in the event of any conflict or inconsistency between the provisions of the Program and the provisions of the Equity Incentive Plan, the provisions of the Program shall control.

 

 

ARTICLE 3

Deferral of Cash Incentive Payments

 

Section 3.01.  Definitions.  Whenever used in this Article 3, the following terms shall have the meanings indicated:

 

“Cash Incentive Payment”  A cash incentive payment awarded to an Employee for any Year under the Incentive Plan.  Notwithstanding anything contained herein to the contrary, any compensation, bonuses, or incentive payments approved by the Committee payable pursuant to The Brink’s Company Management Performance Improvement Plan, and any special recognition bonus payable to any highly compensated employees, shall be excluded for purposes of defining or determining the Cash Incentive Payment for which an Employee may make an elective deferral, and for which employer contributions
are made, pursuant to the terms of this Program.

 

“Incentive Plan”  The Key Employees Incentive Plan of The Brink’s Company, as in effect from time to time or any successor thereto.

 

“Matching Incentive Contributions”  Matching contributions allocated to an Employee’s Incentive Account pursuant to Section 3.04.

 

Section 3.02.  Eligibility.  The Committee shall designate the key management, professional or technical Employees who may defer all or part of their Cash Incentive Payments for any Year pursuant to this Article 3.

 

Section 3.03.  Deferral of Cash Incentive Payments.  Each Employee whom the Committee has selected to be eligible to defer a Cash Incentive Payment for any Year pursuant to this Article 3 may make an election to defer all or part (in multiples of 10%) of any Cash Incentive Payment which may be made to him or her for such Year.  Such Employee’s election for any Year shall be made prior
to the beginning of the Year with respect to which the Cash Incentive Payment is earned.  An Incentive Account (which may be the same Incentive Account established pursuant to Articles 4, 5 and/or 6) shall be established for each Employee making such election and Units in respect of such deferred payment shall be credited to such Incentive Account as provided in Section 3.06.

 

Section 3.04.  Matching Incentive Contributions.  Each Employee who is eligible to receive Matching Incentive Contributions pursuant to Section 3.02 shall have a Matching Incentive Contribution allocated to his or her Incentive Account.  Such Matching Incentive Contribution shall be equal to the amount of his or her Cash Incentive Payment that he or she has elected to defer but not in excess
of 10% of his or

 

 

  

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her Cash Incentive Payment.  The dollar amount of each Employee’s Matching Incentive Contributions shall be credited to his or her Incentive Account and Units in respect of such amounts shall be credited to such Incentive Account as provided in Section 3.06 below.

 

Section 3.05.  Irrevocability of Election.  An election to defer Cash Incentive Payments under the Program for any Year shall be irrevocable on and after the first day of such Year.

 

Section 3.06. Conversion of New Deferrals and Matching Incentive Contributions to Units.  The amount of an Employee’s deferred Cash Incentive Payment (and related Matching Incentive Contributions) for any Year shall be converted to Units and shall be credited to such Employee’s Incentive Account as of the first business day of the month in which the Cash Incentive Payment was
made.  The number (computed to the second decimal place) of Units so credited shall be determined by dividing the aggregate amount of the deferred Cash Incentive Payment and related Matching Incentive Contributions credited to the Employee’s Incentive Account for such Year by the average of the high and low per share reported sale prices of Brink’s Stock as reported on the New York Stock Exchange Composite Transaction Tape on each trading day during the calendar month immediately preceding the date the deferred Cash Incentive Payment is credited.

 

Section 3.07. Adjustments.  The Committee shall determine such equitable adjustments in the Units credited to each Incentive Account as may be appropriate to reflect any stock split, stock dividend, recapitalization, merger, consolidation, reorganization, combination, or exchange of shares, split-up, split-off, spin-off, liquidation or other similar change in capitalization or any distribution to common
shareholders other than cash dividends.

 

Section 3.08. Dividends and Distributions.  Whenever a cash dividend or any other distribution is paid with respect to shares of Brink’s Stock, the Incentive Account of each Employee will be credited with an additional number of Units, equal to the number of shares of Brink’s Stock including fractional shares (computed to the second decimal place), that could have been purchased had such
dividend or other distribution been paid to the Incentive Account on the payment date for such dividend or distribution based on the number of shares represented by Units in such Incentive Account as of such date and assuming the amount of such dividend or value of such distribution had been used to acquire additional Units.  Such additional Units shall be deemed to be purchased at the average of the high and low per share quoted sale prices of Brink’s Stock, as reported on the New York Stock Exchange Composite Transaction Tape on the payment date for the dividend or other distribution.  The value of any distribution in property will be determined by the Committee.

 

Section 3.09.  Minimum Distribution.  Distributions shall be made in accordance with Article 7; provided, however, that the aggregate value of the Brink’s Stock and cash distributed to an Employee (and his or
her beneficiaries) in respect of all Units standing to his or her credit in his or her Incentive Account attributable to deferrals of Cash 

 

 

  

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Incentive Payments otherwise payable in respect to services rendered prior to January 1, 2007 (including dividends relating to such Units but not Matching Incentive Contributions) shall not be less than the aggregate amount of Cash Incentive Payments and dividends (credited to his or her Incentive Account pursuant to Section 3.08) in respect of which such Units were initially so credited.  The value of the Brink’s Stock, so distributed shall be considered equal to the average of the high and low per share quoted sale prices of Brink’s Stock, as reported on the New York Stock Exchange Composite Transaction Tape for the last trading day of the month preceding the month
of distribution.

 

 

ARTICLE 4

Deferral of Salary

 

Section 4.01. Definitions.  Wherever used in this Article 4, the following term shall have the meaning indicated:

 

“Matching Salary Contributions”  Matching contributions allocated to an Employee’s Incentive Account pursuant to Section 4.04.

 

Section 4.02. Eligibility.  An Employee may participate in the benefits provided pursuant to this Article 4 for any Year only if he or she is so designated by the Committee.

 

Section 4.03. Deferral of Salary.  Each Employee who is eligible to defer Salary for any Year pursuant to this Article 4 may elect to defer up to 50% (in multiples of 5%) of his or her Salary for such Year; provided,
however, that in the case of a newly hired Employee who is eligible to participate for his or her initial Year of employment, only up to 50% of Salary earned after he or she files a deferral election with the Committee may be deferred.  Such Employee’s initial election hereunder for any Year shall be made prior to the later of (a) the first day of such Year or (b) the expiration of the 30 day period following (and including) his or her initial date of employment.  An election to defer Salary shall remain in effect for subsequent Years unless and until a new election is filed with the Committee by the December 31 preceding the Year for which the new election is to be effective.  An Incentive Account (which may be the same Incentive Account established pursuant
to Articles 3, 5 and/or 6) shall be established for each Employee making such election and such Incentive Account shall be credited as of the last day of each month with the dollar amount of deferred Salary for such month pursuant to such election.  Units in respect of such amounts shall be credited to such Incentive Account as provided in Section 4.06 below.

 

Section 4.04. Matching Salary Contributions.  Each Employee who has deferred a percentage of his or her Salary for a Year pursuant to Section 4.02 shall have Matching Salary Contributions allocated to his or her Incentive Account.  Such Matching Salary Contributions shall be equal to 100% of the first 10% of his or her Salary that he or she has elected to defer for the Year.  The dollar amount of each Employee’s Matching Salary Contributions credited to his or her Incentive Account and Units in

 

 

  

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respect of such amounts shall be credited to such Incentive Account as provided in Section 4.06 below.

 

Section 4.05.  Irrevocability of Election.  An election to defer Salary under the Program for any Year shall be irrevocable (a) on and after the first day of such Year or (b) in the case of an election made by a newly hired Employee for his or her initial Year of employment, after the date such an election is made.

 

Section 4.06. Conversion of New Deferrals and Matching Salary Contributions to Units.  The amount of an Employee’s deferred Salary (and related Matching Salary Contributions) for any Year shall be converted to Units and shall be credited to such Employee’s Incentive Account as of the first business day of the month next following the month in which such Salary was earned.  The number
(computed to the second decimal place) of Units so credited shall be determined by dividing the aggregate amount of all such deferred Salary (and related Matching Salary Contributions) credited to his or her Incentive Account for such month by the average of the high and low per share reported sale prices of Brink’s Stock as reported on the New York Stock Exchange Composite Transaction Tape for each trading day during the calendar month immediately preceding the crediting of such Units.

 

Upon the Employee’s Termination of Employment, any cash amounts not converted into Units credited to his or her Incentive Account shall be converted into Units in the manner described in this Section 4.06 based on the reported sales prices (including any sale prices determined on a when issued basis) of Brink’s Stock as reported on the New York Stock Exchange Composite Transaction Tape for each trading day during the portion of the month preceding the date of termination.

 

Section 4.07.  Adjustments.  The Committee shall determine such equitable adjustments in the Units credited to each Incentive Account as may be appropriate to reflect any stock split, stock dividend, recapitalization, merger, consolidation, reorganization, combination, or exchange of shares, split up, split-off, spin-off, liquidation or other similar change in capitalization or any distribution to
common shareholders other than cash dividends.

 

Section 4.08.  Dividends and Distributions.  Whenever a cash dividend or any other distribution is paid with respect to shares of Brink’s Stock, the Incentive Account of each Employee will be credited with an additional number of Units equal to the number of shares of Brink’s Stock, including fractional shares (computed to the second decimal place), that could have been purchased had such
dividend or other distribution been paid to the Incentive Account on the payment date for such dividend or distribution based on the number of shares represented by the Units in such Incentive Account as of such date and assuming the amount of such dividend or value of such distribution had been used to acquire additional Units.  Such additional Units shall be deemed to be purchased at the average of the high and low per share quoted sale prices of Brink’s Stock, as the case may be, as reported on the New York Stock Exchange Composite  

 

 

  

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Transaction Tape on the payment date for the dividend or other distribution.  The value of any distribution in property will be determined by the Committee.

 

Section 4.09. Minimum Distribution.  Distributions shall be made in accordance with Article 7; provided,
however, the aggregate value of the Brink’s Stock and cash distributed to an Employee (and his or her beneficiaries) in respect of all Units standing to his or her credit in his or her Incentive Account attributable to the deferral of Salary otherwise payable for services rendered prior to January 1, 2007 (including dividends relating to such Units but not Matching Salary Contributions) shall not be less than the aggregate amount of Salary and dividends in respect of which Units were initially so credited.  The value of the Brink’s Stock so distributed shall be considered equal to the average of the high and low per share quoted sale prices of Brink’s Stock, as reported on the New York Stock Exchange Composite
Transaction Tape for the last trading day of the month preceding the month of distribution.

 

 

ARTICLE 5

Supplemental Savings Plan

 

Section 5.01.  Definitions.  Whenever used in this Article 5, the following terms shall have the meanings indicated:

 

“Compensation”  The regular wages received during any pay period by an Employee while a participant in the Savings Plan for services rendered to the Company or any Subsidiary that participates in the Savings Plan, including any commissions or bonuses, but excluding any overtime or premium pay, living or other expense allowances, or contributions by the Company or such Subsidiaries to any plan of deferred compensation, and determined without regard to the application of any salary reduction election under the Savings Plan.  Bonuses paid pursuant to the Incentive Plan shall be
considered received in the Year in which they are payable whether or not such bonus is deferred pursuant to Article 3 hereof.

 

“Incentive Plan”  The Key Employees Incentive Plan of The Brink’s Company, as in effect from time to time or any successor thereto.

 

“Matching Contributions”  Amounts allocated to an Employee’s Incentive Account pursuant to Section 5.04.

 

“Savings Plan”  The Brink’s Company 401(k) Plan, as in effect from time to time.

 

Section 5.02.  Eligibility.  An Employee may participate in the benefits provided pursuant to this Article 5 for any Year only if he or she is so designated by the Committee.

 

Section 5.03.  Deferral of Compensation. Each eligible Employee who is not permitted to defer the maximum percentage of his or her Compensation that may be contributed as a matched contribution under the Savings Plan for any Year as a result 

 

 

  

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of limitations imposed by Sections 401(a)(17), 401(k)(3), 402(g) and/or 415 of the Code may elect to defer the excess of (a) such maximum percentage (four percent for 2012) of his or her Compensation for such Year (without regard to any limitation on such amount imposed by Code Section 401(a)(17)) over (b) the amount actually contributed on his or her behalf under the Savings Plan for such Year as a matched contribution.  In order to be permitted to defer any portion of his or her Compensation pursuant to this Section 5.03, the Employee must elect to defer the maximum amount permitted as a matched contribution for the Year under the Savings Plan.  Such Employee’s
initial election hereunder for any Year shall be made prior to the first day of such Year or, if later, within 30 days after his or her initial date of employment but only with respect to Compensation for services performed after the date of such election.  Such election shall remain in effect for subsequent Years unless and until a new election is filed with the Committee by the December 31 preceding the Year for which the new election is to be effective.  An Incentive Account (which may be the same Incentive Account established pursuant to Article 3, 4 and/or 6) shall be established for each Employee making such election and such Incentive Account shall be credited as of the last day of each month with the dollar amount of the Compensation deferred for such month pursuant to such election;
provided, however, that in the event an Employee is not permitted to defer the maximum percentage of his or her Compensation that may be contributed as a matched contribution under the Savings Plan for any year as a result of the limitation imposed by Code Section 401(k)(3), such excess contribution shall be distributed to the Employee, his or her Compensation paid after the date of the distribution shall be reduced by that amount and such amount shall be allocated to his or her Incentive Account as of the January 1 next following the Year for which the excess contribution was made under the Savings Plan.  Units in respect of such amounts shall be credited to such Incentive Account as
provided in Section 5.06 below.

 

Section 5.04.  Matching Contributions.  Each Employee who elects to defer a portion of his or her Compensation for a Year pursuant to Section 5.03 shall have a Matching Contribution allocated to his or her Incentive Account equal to the rate of matching contributions in effect for such Employee under the Savings Plan for such Year multiplied by the amount elected to be deferred pursuant to Section 5.03
above for each month in such Year.  The dollar amount of each Employee’s Matching Contribution for each month shall be credited to his or her Incentive Account pursuant to Section 5.06 below.

 

If an Employee is participating in this portion of the Program pursuant to Section 5.02 and his or her matching contribution under the Savings Plan for any year will be reduced as a result of the nondiscrimination test contained in Code Section 401(m)(2), (a) to the extent such matching contribution is forfeitable, it shall be forfeited and that amount shall be allocated to his or her Incentive Account as a Matching Contribution or (b) to the extent such matching contribution is not forfeitable, it shall be distributed to the Employee, his or her Compensation paid after the date of the distribution shall be reduced by that amount and such amount shall be allocated to his or her Incentive Account as a
Matching Contribution.  The dollar amount of such Matching Contribution shall be allocated to each Employee’s Incentive Account as of the January 1 next following the Year for which the matching contribution was made under the Savings 

 

 

  

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Plan.  Units in respect of such contribution shall be credited to the Employee’s Incentive Account as provided in Section 5.06 below.

 

Section 5.05. Irrevocability of Election.  An election to defer amounts under the Program for any Year shall be irrevocable (a) on and after the first day of such Year or (b) in the case of an election made by a newly hired Employee for his or her initial Year of employment, after the date such an election is made.

 

Section 5.06. Conversion of New Deferrals and Matching Contributions to Units.  The amount of an Employee’s deferred Compensation and Matching Contributions for any Year shall be converted to Units and shall be credited to such Employee’s Incentive Account as of the first business day of the month next following the month in which such Compensation was earned or for which the Matching
Contribution was made.  The number (computed to the second decimal place) of Units so credited shall be determined by dividing the aggregate amount of all such amounts credited to the Employee’s Incentive Account for such month attributable to (a) the deferral of amounts awarded under the Incentive Plan (including related Matching Contributions) by the average of the high and low per share reported sale prices of Brink’s Stock, as reported on the New York Stock Exchange Composite Transaction Tape on each trading day during the calendar month immediately preceding the crediting of such Units, (b) Compensation and Matching Contributions allocated to the Employee’s Incentive Account as a result of failing to satisfy the tests included in Code Sections 401(k)(3) or 401(m)(2) under the Savings Plan, by the average of the high and low per share reported sales
prices of Brink’s Stock, as reported on the New York Stock Exchange Composite Transaction Tape on each trading day during the calendar month immediately preceding the month in which such Units are credited to the Employee’s Incentive Account (which shall be the first business day of the month following the date that the Company has been notified of the failure to satisfy such tests) and (c) the deferral of all other Compensation (including related Matching Contributions) by the average of the high and low per share reported sale prices of Brink’s Stock as reported on the New York Stock Exchange Composite Transaction Tape (i) on each trading day during the period commencing on the first business day of the month after the Employee’s salary (as such term is defined in the Savings Plan) equals the maximum amount of considered compensation for such Year pursuant to
Code Section 401(a)(17) and ending the last business day of such month and each month thereafter until December 31 or (ii) in the event the Employee’s salary equals the maximum amount of considered compensation in December, on the first trading day in the following January.

 

Upon the Employee’s Termination of Employment, any cash amounts not converted into Units credited to his or her Incentive Account shall be converted into Units in the manner described in this Section 5.06 based on the reported sale prices (including any sale prices determined on a when issued basis) of Brink’s Stock, as reported on the New York Stock Exchange Composite Transaction Tape for each trading day during the portion of the month preceding the date of termination.

 

Section 5.07.  Adjustments.  The Committee shall determine such equitable adjustments in the Units credited to each Incentive Account as may be appropriate to 

 

  

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reflect any stock split, stock dividend, recapitalization, merger, consolidation, reorganization, combination, or exchange of shares, split up, split-off, spin-off, liquidation or other similar change in capitalization or any distribution to common shareholders other than cash dividends.

 

Section 5.08. Dividends and Distributions.  Whenever a cash dividend or any other distribution is paid with respect to shares of Brink’s Stock, the Incentive Account of each Employee will be credited with an additional number of Units equal to the number of shares of Brink’s Stock, including fractional shares (computed to the second decimal place), that could have been purchased had such
dividend or other distribution been paid to the Incentive Account on the payment date for such dividend or distribution based on the number of shares represented by the Units in such Incentive Account as of such date and assuming that the amount of such dividend or value of such distribution had been used to acquire additional Units of the class giving rise to the dividend or other distribution.  Such additional Units shall be deemed to be purchased at the average of the high and low per share quoted sale prices of Brink’s Stock, as reported on the New York Stock Exchange Composite Transaction Tape on the payment date for the dividend or other distribution.  The value of any distribution in property will be determined by the Committee.

 

 

ARTICLE 6

Deferral of Performance Awards

 

Section 6.01.  Definitions.  Whenever used in this Article 6, the following terms shall have the meanings indicated:

 

“Cash Performance Payment”  A cash incentive payment due to an Employee in any Year under the Management Performance Improvement Plan.

 

“Management Performance Improvement Plan”  The Brink’s Company Management Performance Improvement Plan, as in effect from time to time or any successor thereto.

 

“Performance Measurement Period”  A performance cycle of one or more fiscal Years of the Company under the Management Performance Improvement Plan.

 

Section 6.02.  Eligibility.  An Employee may participate in the benefits provided pursuant to this Article 6 for any Year only if he or she is so designated by the Committee.

 

Section 6.03.  Deferral of Cash Performance Payments.  Each Employee who is eligible to defer his or her Cash Performance Payment for any Performance Measurement Period pursuant to this Article 6 may make an election to defer all or part (in multiples of 10%) of any Cash Performance Payment which may be made to him or her for such Performance Measurement Period.  If the Committee determines that a Cash Performance Payment relating to any Performance Measurement Period is 

 

 

  

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“performance-based compensation” under Code Section 409A, such Employee’s election shall be made prior to January 1 of the last Year in the Performance Measurement Period.  If the Committee determines that a Cash Performance Payment relating to any Performance Measurement Period is not “performance-based compensation” under Code Section 409A, such Employee’s election shall be made prior to the beginning of the Performance Measurement Period or by such other time as the Committee determines will satisfy Code Section 409A and Treasury Regulations issued thereunder.  An Incentive Account (which may be the same Incentive Account
established pursuant to Articles 3, 4 and/or 5) shall be established for each Employee making such election and Units in respect of such deferred payment shall be credited to such Incentive Account as provided in Section 6.05 below.

 

Section 6.04.  Irrevocability of Election.  An election to defer Cash Performance Payments under the Program for any Performance Measurement Period shall be irrevocable after the last date for making such an election, as specified in the second or third sentence of Section 6.03, above, as applicable.

 

Section 6.05.  Conversion to Units.  The amount of an Employee’s deferred Cash Performance Payment for any Performance Measurement Period shall be converted to Units and shall be credited to such Employee’s Incentive Account as of the first business day of the month in which the Cash Performance Payment is made.  The number (computed to the second decimal place) of Units so credited shall be determined by dividing the aggregate amount of the deferred Cash Performance Payment credited to the
Employee’s Incentive Account for such Performance Measurement Period by the average of the high and low per share quoted sale prices of Brink’s Stock, as reported on the New York Stock Exchange Composite Transaction Tape on each trading day during the month preceding the crediting of Units.

 

Section 6.06.  Adjustments.  The Committee shall determine such equitable adjustments in the Units credited to each Incentive Account as may be appropriate to reflect any stock split, stock dividend, recapitalization, merger, consolidation, reorganization, combination, or exchange of shares, split up, split-off, spin-off, liquidation or other similar change in capitalization or any distribution to common shareholders other than cash dividends.

 

Section 6.07.  Dividends and Distributions.  Whenever a cash dividend or any other distribution is paid with respect to shares of Brink’s Stock, the Incentive Account of each Employee will be credited with an additional number of Units equal to the number of shares of Brink’s Stock, including fractional shares (computed to the second decimal place), that could have been purchased had such dividend or other distribution been paid to the Incentive Account on the payment date for such dividend or distribution
based on the number of shares represented by Units in such Incentive Account as of such date and assuming the amount of such dividend or value of such distribution had been used to acquire additional Units.  Such additional Units shall be deemed to be purchased at the average of the high and low per share quoted sale prices of Brink’s Stock, as reported on the New York Stock Exchange Composite Transaction Tape on 

 

 

  

13

  

 

the payment date for the dividend or other distribution.  The value of any distribution in property will be determined by the Committee.

 

Section 6.08. Minimum Distribution.  Distributions shall be made in accordance with Article 7; provided, however, that the aggregate value of the Brink’s Stock and cash distributed to an Employee (and his or her
beneficiaries) in respect of all Units standing to his or her credit in his or her Incentive Account attributable to deferrals of Cash Performance Payments otherwise payable with respect to Performance Measurement Periods ending prior to January 1, 2007 (including dividends relating to such Units) shall not be less than the aggregate amount of Cash Performance Payments and dividends (credited to his or her Incentive Account pursuant to Section 6.07) in respect of which such Units were initially so credited.  The value of the Brink’s Stock, so distributed shall be considered equal to the average of the high and low per share quoted sale prices of Brink’s Stock, as reported on the New York Stock Exchange Composite Transaction Tape for the last trading day of the month preceding the month of distribution.

 

 

ARTICLE 7

Distributions

 

Section 7.01.  Certain Payments on Termination of Employment.  Each Employee shall receive a distribution in Brink’s Stock in respect of all Units standing to the credit of such Employee’s Incentive Account (other than Units attributable to Matching Incentive Contributions, Matching Salary Contributions and dividends related thereto) as of the date of the Employee’s Termination of
Employment, in a single-lump sum distribution on the first day that is more than six months after the date of the Employee’s Termination of Employment; provided, however, that for purposes of this Article 7, no employee of any Subsidiary shall be considered to have terminated employment as a result of a spinoff of such Subsidiary from the Company, except as may be permitted under Section 409A of the Code.  An Employee may elect, at least 12 months prior to his or her Termination of Employment, to receive distribution of the Shares represented by the Units credited to his or her Incentive Account in equal annual installments (not more than ten) commencing not earlier than the last day of
the sixth month following the fifth anniversary of the date of his or her Termination of Employment (for any reason) or as promptly as practicable thereafter.  Any such election shall become effective on the 12-month anniversary of the date the election is made.

 

The number of shares of Brink’s Stock to be included in each installment payment shall be determined by multiplying the number of Units in the Employee’s Incentive Account, as applicable, as of the first day of the month preceding the initial installment payment and as of each succeeding anniversary of such date by a fraction, the numerator or which is one and the denominator of which is the number of remaining installments (including the current installment).

 

Any fractional Units shall be converted to cash based on the average of the high and low per share quoted sale prices of the Brink’s Stock, as reported on the New York 

 

 

  

14

  

 

Stock Exchange Composite Transaction Tape, on the last trading day of the month preceding the month of distribution and shall be paid in cash.

 

Section 7.02.  Payments Attributable to Matching Incentive Contributions and Matching Salary Contributions on Termination of Employment.  In the event of an Employee’s (a) death, (b) Retirement, (c) Disability or (d) Termination of Employment for any reason within three years following a Change in Control (other than a Termination of Employment by the Company for Cause), the Employee shall
receive a distribution of Brink’s Stock in respect of all Units standing to the credit of such Employee’s Incentive Account attributable to Matching Incentive Contributions, Matching Salary Contributions and dividends related thereto in the same manner as provided in Section 7.01 for the distribution of other Units standing to the credit of such Employee’s Incentive Account.

 

In the event of a Termination of Employment for a reason not described in the preceding paragraph, the Employee shall forfeit the Units in his or her Incentive Account attributable to Matching Incentive Contributions, Matching Salary Contributions and dividends related thereto for the Year in which the termination occurs.  Other than in connection with a Termination of Employment by the Company for Cause, such Employee shall be vested in the remaining Units standing to the credit of such Employee in his or her Incentive Account attributable to Matching Incentive Contributions, Matching Salary Contributions and dividends related thereto in accordance with the following schedule:

 

	
Months of Participation

	
Vested Percentage

	  	  
	
less than 36

	
0

	
at least 36 but less than 48

	
50%

	
at least 48 but less than 60

	
75%

	
60 or more

	
100%

 

An Employee shall receive credit for one “month of participation” for each calendar month during which a deferral election is in effect pursuant to Section 3.03 or Section 4.03.  Brink’s Stock, in respect of the vested Units standing to the credit of such Employee attributable to Matching Incentive Contributions, Matching Salary Contributions and dividends related thereto, shall be distributed in the same manner as provided in Section 7.01 for the distribution of other Units standing to the credit of such Employee’s Incentive Account.

 

Section 7.03 .  One Time Distribution Under Code Section 409A Transition Relief.  Pursuant to rules and procedures established by the Company, a participant under the Program may elect on or before December 31, 2007 to receive on February 15, 2008 a single lump-sum distribution in
Brink’s Stock in respect of all vested Units standing to the credit of his or her Incentive Account as of December 31, 2007; provided, however, that such election shall not apply to amounts, if any, that would have otherwise been distributed to the participant in 2007.

 

 

  

15

  

 

 

Section 7.04 .  Termination of Employment by the Company for Cause.  In the event of a Termination of Employment by the Company for Cause, the Employee shall forfeit all of the Units standing to the credit of the Employee’s Incentive Account attributable to Matching Incentive
Contributions, Matching Salary Contributions and dividends related thereto.

 

 

ARTICLE 8

Designation of Beneficiary

 

An Employee may designate in a written election filed with the Company a beneficiary or beneficiaries (which may be an entity other than a natural person) to receive all distributions and payments under the Program after the Employee’s death.  Any such designation may be revoked, and a new election may be made, at any time and from time to time, by the Employee without the consent of any beneficiary.  If the Employee designates more than one beneficiary, any distributions and payments to such beneficiaries shall be made in equal percentages unless the Employee has designated otherwise, in which case the distributions and payments shall be made in the percentages designated by the
Employee.  If no beneficiary has been named by the Employee or no beneficiary survives the Employee, the remaining Shares (including fractional Shares) in the Employee’s Incentive Account shall be distributed or paid in a single sum to the Employee’s estate.  In the event of a beneficiary’s death after installment payments to the beneficiary have commenced, the remaining installments will be paid to a contingent beneficiary, if any, designated by the Employee or, in the absence of a surviving contingent beneficiary, the remaining Shares (including fractional Shares) shall be distributed or paid to the primary beneficiary’s estate in a single distribution.  All distributions shall be made in Shares except that fractional Shares shall be paid in cash.

 

 

ARTICLE 9

Miscellaneous

 

Section 9.01 . Nontransferability of Benefits.  Except as provided in Article 8, Units credited to an Incentive Account shall not be transferable by an Employee or former Employee (or his or her beneficiaries) other than by will or the laws of descent and distribution or pursuant to a domestic
relations order.  No Employee, no person claiming through such Employee, nor any other person shall have any right or interest under the Program, or in its continuance, in the payment of any amount or distribution of any Shares under the Program, unless and until all the provisions of the Program, any determination made by the Committee thereunder, and any restrictions and limitations on the payment itself have been fully complied with.  Except as provided in this Section 9.01, no rights under the Program, contingent or otherwise, shall be transferable, assignable or subject to any pledge or encumbrance of any nature, nor shall the Company or any of its Subsidiaries be obligated, except as otherwise required by law, to recognize or give effect to any such transfer, assignment, pledge or encumbrance.

 

 

  

16

  

 

Section 9.02 .  Notices.  The Company may require all elections contemplated by the Program to be made on forms provided by it.  All notices, elections and other communications pursuant to the Program shall be in writing and shall be effective when received by the Company at the
following address:

 

	 	
The Brink’s Company

1801 Bayberry Court

P. O. Box 18100

Richmond, VA 23226-8100

 

Attention of Vice President -- Human Resources

 

Section 9.03. Limitation on Rights of Employee.  Nothing in this Program shall be deemed to create, on the part of any Employee, beneficiary or other person, (a) any interest of any kind in the assets of the Company or (b) any trust or fiduciary relationship in relation to the Company.  The right of an Employee to receive any Shares shall be no greater than the right of any unsecured general
creditor of the Company.

 

Section 9.04.  No Contract of Employment.  The benefits provided under the Program for an Employee shall be in addition to, and in no way preclude, other forms of compensation to or in respect of such Employee.  However, the selection of any Employee for participation in the Program shall not give such Employee any right to be retained in the employ of the Company or any of its Subsidiaries for any period.  The right of the Company and of each such Subsidiary to terminate the employment of any
Employee for any reason or at any time is specifically reserved.

 

Section 9.05.  Withholding.  All distributions pursuant to the Program shall be subject to withholding in respect of income and other taxes required by law to be withheld.  The Company shall establish appropriate procedures to ensure payment or withholding of such taxes.  Such procedures may include arrangements for payment or withholding of taxes by retaining Shares otherwise
issuable in accordance with the provisions of this Program or by accepting already owned Shares, and by applying the fair market value of such Shares to the withholding taxes payable.

 

Section 9.06.  Amendment and Termination.  The Committee may from time to time amend any of the provisions of the Program, or may at any time terminate the Program.  No amendment or termination shall adversely affect any Units (or distributions in respect thereof) which shall theretofore have been credited to any Employee’s Incentive Account.  On the termination of the
Program, distributions from an Employee’s Incentive Account shall be made in compliance with Code Section 409A and Treasury Regulations issued thereunder.

 

 

  

17exhibit10_37.htm

 

2009 ROWAN COMPANIES, INC. INCENTIVE PLAN

 

2011 STOCK APPRECIATION RIGHT NOTICE

 

	
1.  

	
Grant of SAR.  To carry out the purposes of the 2009 Rowan Companies, Inc. Incentive Plan (the “Plan”), and subject to the conditions described in this Notice and the Plan, Rowan Companies, Inc., a Delaware corporation (the “Company”) hereby grants to you (the “Participant”) a stock appreciation right (“SAR”) with respect to ______ shares of Common Stock, effective as of February __, 2011 (the “Grant Date”).  All capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan; the Plan is incorporated herein by reference as a part of this Notice.

 

	
2.  

	
Exercise Price.  The exercise price of Common Stock purchased pursuant to the exercise of this SAR shall be $            per share.

 

	
3.  

	
Exercise of SAR.  This SAR shall be exercisable in the manner described below for one-third of the aggregate number of SARs on and after the first anniversary of the Grant Date and an additional one-third on and after each of the second and third anniversaries of the Grant Date; provided, however, a SAR may be exercised only prior to its expiration date and, except as otherwise provided below, only while the Participant remains an Employee of the Company.  This SAR shall not be exercisable in any event after the expiration of ten years from the Grant Date hereof.  The SAR will terminate and cease to be exerciseable upon the Participant’s termination of employment with the Company, except that:

 

	
(a)  

	
If the Participant’s employment with the Company terminates by reason of Retirement, the Participant may exercise this SAR at any time during the period of five years following the date of such termination, but only as to the number of SARs that the Participant was entitled to purchase hereunder as of the date his employment so terminates, plus such additional number of SARs, if any, that the Committee, in its sole discretion, determines to be exercisable as of such Retirement.

 

	
(b)  

	
If the Participant dies within the five-year period following the date of the Participant’s termination of employment by reason of Retirement, the legal representative of the Participant’s estate, or the person who acquires this SAR by bequest or inheritance or otherwise by reason of the death of the Participant, may exercise this SAR at any time during the period of two years following the date of the Participant’s death, but only as to the number of SARs the Participant was entitled to purchase hereunder as of the date the Participant’s employment terminated by reason of Retirement.

 

	
(c)  

	
If the Participant’s employment with the Company terminates by reason of Disability, the Participant may exercise this SAR in full at any time during the period of five years following the date of such termination, but only as to the number of SARs that the Participant was entitled to purchase hereunder as of the date his employment so terminates, plus such additional number of SARs, if any, that the Committee, in its sole discretion, determines to be exercisable as of such Disability.

 

	
(d)  

	
If the Participant dies while in the employ of the Company or within the five-year period following the date of the Participant’s termination of employment by reason of Disability, the legal representative of the Participant’s estate, or the person who acquires this SAR by bequest or inheritance or by reason of the death of the Participant, may exercise this SAR in full at any time during the period of two years following the date of the Participant’s death.

 

	
(e)  

	
If the Participant’s employment with the Company terminates other than by reason of Retirement, Disability, or death, this SAR (to the extent vested as of the date of termination and not exercised prior thereto) shall terminate upon the expiration of 90 days following the date the Participant’s employment so terminates.

 

	
4.  

	
Exercise.  Subject to the limitations set forth herein and in the Plan, this SAR may be exercised by written notice provided to the Company, and may only be exercised with respect to a number of shares of Common Stock with respect to which the SAR is then exercisable.  Upon exercise of the SAR, the product of the number of the shares of Common Stock as to which the SAR is exercised multiplied by the excess of the Fair Market Value (determined in accordance with the terms of the Plan) over the Exercise Price shall become payable to the Participant in shares of Common Stock, or, in the sole discretion of the Committee, in cash.  Such Common Stock issuance or single lump-sum cash payment shall be made as soon as practicable after the date of exercise, but no later than 45 days thereafter. Notwithstanding anything to the contrary contained herein, the Participant agrees that he will not exercise the SAR granted pursuant hereto, and that the Company will not be obligated to issue any Common Stock pursuant to this Notice, if the exercise of the SAR or the issuance of such Common Stock would constitute a violation by the Participant or by the Company of any provision of any law or regulation of any governmental authority or any stock exchange or transaction quotation system.

 

	
5.  

	
Retirement.  For purposes of this Notice, “Retirement” of an Employee shall have occurred if, as of the Employee’s date of termination of employment:

 

(a) in the case of an Employee who is an employee of the Company or one of its subsidiaries (other than LeTourneau, Inc. or its subsidiaries, the employees of which are covered in (b) below), the Employee is a minimum of 60 years old and has satisfied the requirements for normal retirement pursuant to the policies of the Company in place at the time of termination; or

 

(b) in the case of an Employee who is an employee of LeTourneau, Inc. or one of its subsidiaries, the Employee has satisfied the requirements for either normal or late retirement pursuant to the polices of LeTourneau, Inc. in place at the time of termination.

 

Determination of the date of termination of employment by reason of Retirement and the satisfaction of the requirements for Retirement shall be based on such evidence as the Committee may require and a determination by the Committee of such date of termination and satisfaction shall be final and controlling on all interested parties.

 

	
6.  

	
Disability.  For purposes of this Notice, “Disability” means the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than 12 months, receiving disability benefits under the applicable disability plan of the Company (or its subsidiaries).

 

Determination of the date of termination of employment by reason of Disability and the satisfaction of the requirements for Disability shall be based on such evidence as the Committee may require and a determination by the Committee of such date of termination and satisfaction shall be final and controlling on all interested parties.

 

	
7.  

	
Employment Relationship.  For purposes of this Notice, the Participant shall be considered to be in the employment of the Company as long as the Participant remains an Employee of either the Company, a parent or subsidiary corporation (as defined in Code Section 424) of the Company, or a corporation or a parent or subsidiary of such corporation assuming this Notice.  Any question as to whether and when there has been a termination of such employment, and the cause and date of such termination, shall be based on such evidence as the Committee may require and a determination by the Committee as to the cause and date of such termination shall be final and controlling on all interested parties.

 

	
8.  

	
Withholding of Tax.  Upon an exercise of this SAR, the Company is authorized in its discretion to satisfy any withholding requirement out of any cash payable or shares of Common Stock distributable to the Participant upon such exercise.

 

	
9.  

	
Reorganization of the Company.   The existence of this Notice shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business; any merger or consolidation of the Company; any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof; the dissolution or liquidation of the Company; any sale or transfer of all or any part of its assets or business; or any other corporate act or proceeding, whether of a similar character or otherwise.

 

	
10.  

	
Recapitalization Events.   In the event of stock dividends, spin-offs of assets or other extraordinary dividends, stock splits, combinations of shares, recapitalizations, mergers, consolidations, reorganizations, liquidations, issuances of rights or warrants and similar transactions or events involving the Company (“Recapitalization Events”), then for all purposes references herein to Common Stock shall mean and include all securities or other property (other than cash) that holders of Common Stock are entitled to receive in respect of Common Stock by reason of each successive Recapitalization Event, and the exercise price of the SAR shall be adjusted as deemed necessary or appropriate in the sole discretion of the Committee to prevent enlargement or dilution of the Participant’s rights under this Notice.

 

	
11.  

	
Status of Common Stock.  The Company intends to register for issuance under the Securities Act of 1933, as amended (the “Act”), the shares of Common Stock acquirable upon exercise of this SAR and to keep such registration effective throughout the period that this SAR is exercisable.  In the absence of such effective registration or an available exemption from registration under the Act, issuance of shares of Common Stock acquirable upon exercise of the SAR will be delayed until registration of such shares is effective or an exemption from registration under the Act is available.  In the event exemption from registration under the Act is available upon an exercise of this SAR, the Participant (or the person permitted to exercise this SAR in the event of the Participant’s Disability or death), if requested by the Company to do so, will execute and deliver to the Company in writing an agreement containing such provisions as the Company may require assuring compliance with applicable securities laws.  The Company shall incur no liability to the Participant for failure to register the Common Stock or maintain the registration.

 

The shares of Common Stock which the Participant may acquire by exercising this SAR will not be sold or otherwise disposed of in any manner that would constitute a violation of any applicable securities laws, whether federal or state.  The Participant is hereby notified (i) that the certificates representing the shares of Common Stock purchased under this SAR may bear such legend or legends as the Committee deems appropriate in order to assure compliance with applicable securities laws, (ii) that the Company may refuse to register the transfer of the shares of Common Stock purchased under this SAR on the stock transfer records of the Company if such proposed transfer would in the opinion of counsel satisfactory to the Company constitute a violation of any applicable securities law and (iii) that the Company may give related instructions to its transfer agent, if any, to stop registration of the transfer of such shares.

 

	
12.  

	
Transfer of SAR.  Except as provided herein, all rights granted hereunder shall not be transferable other than by will or the laws of descent and distribution and shall be exercisable during the Participant’s lifetime only by the Participant or, in the case of the Participant’s death, the legal representative of the Participant’s estate or the person who acquires this SAR by bequest or inheritance or by reason of the death of the Participant, or in the case of the Participant’s Disability, by the Participant’s guardian (if applicable).  Any purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance of this SAR that does not satisfy the requirements set forth hereunder shall be void and unenforceable against the Company.

 

	
13.  

	
Severability.   In the event that any provision of this Notice shall be held illegal, invalid, or unenforceable for any reason, such provision shall be fully severable and shall not affect the remaining provisions of this Notice, and this Notice shall be construed and enforced as if the illegal, invalid or unenforceable provision had never been included herein.

 

	
14.  

	
Certain Restrictions.   By accepting the SARs granted under this Notice, the Participant acknowledges that he will enter into such written representations, warranties and Notices and execute such documents as the Company may reasonably request in order to comply with the terms of this Notice or the Plan, or securities laws or any other applicable laws, rules or regulations.

 

	
15.  

	
Recoupment.   Notwithstanding any provision of this Notice to the contrary, the Committee may, in its sole discretion:

 

	
(a)  

	
recoup from the Participant all or a portion of the Common Stock issued or cash paid under this Notice if the Company’s reported financial or operating results are materially and negatively restated within five years of the issuance or payment of such amounts and may cancel any SARs not yet exercised (whether or not vested); and

 

	
(b)  

	
recoup from the Participant if, in the Committee’s judgment, the Participant engaged in conduct which was fraudulent, negligent or not in good faith, and which disrupted, damaged, impaired or interfered with the business, reputation or Employees of the Company or its Affiliates or which caused a subsequent adjustment or restatement of the Company’s reported financial statements, all or a portion of the Common Stock issued or cash paid under this Notice within five years of such conduct and may cancel any SARs not yet exercised (whether or not vested).

 

	
16.  

	
Stockholder Rights.   Prior to exercise and receipt of any underlying Common Stock, a Participant shall have no rights of a stockholder with respect to the shares of Common Stock subject to the SAR.

 

	
17.  

	
Amendment and Termination.   Except as otherwise provided in the Plan or this Notice, no amendment of this Notice that adversely affects the Participant’s rights hereunder in any material respect or termination of this Notice shall be made by the Company without the written consent of the Participant.

 

	
18.  

	
Code Section 409A; No Guarantee of Tax Consequences.   This award of SARs is intended to be exempt from Code Section 409A and the provisions hereof shall be interpreted and administered consistently with such intent.  The Company makes no commitment or guarantee to the Participant that any federal or state tax treatment will apply or be available to any person eligible for benefits under this Notice.

 

	
19.  

	
Binding Effect.  This Notice shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Participant.

 

	
20.  

	
Governing Law and Venue.  This Notice shall be governed by, and construed in accordance with, the laws of the State of Texas.  The courts in Harris County, Texas shall be the exclusive venue for any dispute regarding the Plan or this Notice.

 

 

  

  

  

2009 ROWAN COMPANIES, INC. INCENTIVE PLAN

 

2011 RESTRICTED STOCK NOTICE

 

	
1.  

	
Grant of Restricted Shares.     To carry out the purposes of the 2009 Rowan Companies, Inc. Incentive Plan (the “Plan”), and subject to the conditions described in this Notice and the Plan, Rowan Companies, Inc., a Delaware corporation (the “Company”) hereby grants to you (the “Participant”) all right, title and interest in the record and beneficial ownership of ______ shares (the “Restricted Shares”) of Common Stock, effective as of February __, 2011 (the “Grant Date”).  All capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan; the Plan is incorporated herein by reference as part of this Notice.

 

	
2.  

	
Issuance and Transferability.   The Restricted Shares may be evidenced in such a manner as the Committee shall deem appropriate.  Any certificates representing the Restricted Shares granted hereunder shall be issued in the name of the Participant as of the Grant Date and shall be marked with the following legend:

 

“The shares represented by this certificate have been issued pursuant to the terms of the 2009 Rowan Companies, Inc. Incentive Plan and may not be sold, pledged, transferred, assigned or otherwise encumbered in any manner except as is set forth in the terms of such award dated February __, 2011.”

 

Until restrictions lapse, the Restricted Share certificates shall be left on deposit with the Company along with a stock power (substantially in the form attached hereto as Exhibit A) endorsed in blank and shall not be transferable except by will or the laws of descent and distribution.  No right or benefit hereunder shall in any manner be liable for or subject to any debts, contracts, liabilities, or torts of the Participant.  Any purported assignment, alienation, pledge, attachment, sale, transfer or other encumbrance of the Restricted Shares, prior to the lapse of restrictions, that does not satisfy the requirements hereunder shall be void and unenforceable against the Company.  Notwithstanding the foregoing, in the case of the Participant’s Disability or death, the Participant’s rights under this Notice may be exercised by the Participant’s guardian or the legal representative of his estate (or the person who acquires the rights under this Notice by bequest or inheritance or by the reason of the death of the Participant), as applicable.

	
3.  

	
Vesting/Forfeiture.   The Participant shall vest in his rights under the Restricted Shares, and any accumulated dividends described in Paragraph 6 hereof, and the Company’s right to reclaim such shares or dividends shall lapse with respect to one-third of the Restricted Shares on the first anniversary of the Grant Date and an additional one-third of the Restricted Shares on each of the second and third anniversaries of the Grant Date (each anniversary, a “Vesting Date”), provided that the Participant remains continuously employed by the Company from the Grant Date to such Vesting Date.  Notwithstanding the foregoing, however, all Restricted Shares not then vested shall vest immediately upon termination if the Participant’s employment with the Company terminates by reason of the Participant’s Disability or death.  In the event of the Participant’s Retirement (as defined in Paragraph 4 below) prior to vesting, the Committee may, in its sole discretion, accelerate vesting.  If the Participant’s employment with the Company terminates other than by reason of Retirement, Disability or death, the Restricted Shares (to the extent not then vested) shall be forfeited as of the date the Participant’s employment so terminates.  As soon as administratively feasible following the vesting of the Restricted Shares, a stock certificate evidencing the vested Restricted Shares, less the amount of Common Stock withheld pursuant to Paragraph 8 hereof, if any, shall be delivered without charge to the Participant, or his designated representative, without restrictive legend.  If, for any reason, the restrictions imposed by the Committee upon the Restricted Shares are not satisfied at the end of the Restricted Period, any Restricted Shares remaining subject to such restrictions shall be forfeited by the Participant.

 

	
4.  

	
Retirement.  For purposes of this Notice, “Retirement” of an Employee shall have occurred if, as of the Employee’s date of termination of employment:

 

(a) in the case of an Employee who is an employee of the Company or one of its subsidiaries (other than LeTourneau, Inc. or its subsidiaries, the employees of which are covered in (b) below), the Employee is a minimum of 60 years old and has satisfied the requirements for normal retirement pursuant to the policies of the Company in place at the time of termination; or

 

(b) in the case of an Employee who is an employee of LeTourneau, Inc. or one of its subsidiaries, the Employee has satisfied the requirements for either normal or late retirement pursuant to the polices of LeTourneau, Inc. in place at the time of termination.

 

Determination of the date of termination of employment by reason of Retirement and the satisfaction of the requirements for Retirement shall be based on such evidence as the Committee may require and a determination by the Committee of such date of termination and satisfaction shall be final and controlling on all interested parties.

 

	
5.  

	
Disability.  For purposes of this Notice, “Disability” means the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than 12 months, receiving disability benefits under the applicable disability plan of the Company (or its subsidiaries).

 

Determination of the date of termination of employment by reason of Disability and the satisfaction of the requirements for Disability shall be based on such evidence as the Committee may require and a determination by the Committee of such date of termination and satisfaction shall be final and controlling on all interested parties.

 

	
6.  

	
Dividends.   Any cash dividends that may be paid on the Restricted Shares after the Grant Date shall be accumulated and held in an account or in escrow by the Company until such time as the Participant shall vest in the Restricted Shares to which such dividends are attributable as described in Paragraph 3 above.  The Participant shall receive a cash payment equal to the pro rata portion of the accumulated dividends paid (reduced by the amount of any taxes required to be withheld with respect to such payment) with respect to the Restricted Shares as they become vested.  All accumulated dividends attributable to unvested Restricted Shares shall be forfeited, if and to the extent that the underlying Restricted Shares are forfeited.

 

	
7.  

	
Employment Relationship.  For purposes of this Notice, the Participant shall be considered to be in the employment of the Company as long as the Participant remains an Employee of either the Company, a parent or subsidiary corporation (as defined in Code Section 424) of the Company, or a corporation or a parent or subsidiary of such corporation assuming this Notice.  Any question as to whether and when there has been a termination of such employment, and the cause and date of such termination, shall be based on such evidence as the Committee may require and a determination by the Committee as to the cause and date of such termination shall be final and controlling on all interested parties.

 

	
8.  

	
Taxes.  The Company shall have the right to take any action as may be necessary or appropriate to satisfy any international, federal, state or local tax withholding obligations, including, but not limited to, the right to withhold cash or shares of Common Stock sufficient to pay the amount required to be withheld and to cause such Common Stock to be sold and the proceeds remitted to the Company.  The Participant agrees that, if he makes an election under Code Section 83(b) with regard to the Restricted Shares, he will so notify the Company in writing within two days after making such election.

 

	
9.  

	
Reorganization of the Company.   The existence of this Notice shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business; any merger or consolidation of the Company; any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof; the dissolution or liquidation of the Company; any sale or transfer of all or any part of its assets or business; or any other corporate act or proceeding, whether of a similar character or otherwise.

 

	
10.  

	
Recapitalization Events.   In the event of stock dividends, spin-offs of assets or other extraordinary dividends, stock splits, combinations of shares, recapitalizations, mergers, consolidations, reorganizations, liquidations, issuances of rights or warrants and similar transactions or events involving the Company (“Recapitalization Events”), then for all purposes references herein to Common Stock or to Restricted Shares shall mean and include all securities or other property (other than cash) that holders of Common Stock are entitled to receive in respect of Common Stock by reason of each successive Recapitalization Event, which securities or other property (other than cash) shall be treated in the same manner and shall be subject to the same restrictions as the underlying Restricted Shares.

 

	
11.  

	
Status of Common Stock.  The Company intends to  register for issuance under the Securities Act of 1933, as amended (the “Act”), the shares of Common Stock acquired pursuant to this Notice and to keep such registration effective.  In the absence of such effective registration or an available exemption from registration under the Act, issuance of shares of Common Stock acquired pursuant to this Notice will be delayed until registration of such shares is effective or an exemption from registration under the Act is available.  In the event exemption from registration under the Act is available, the Participant (or the person permitted to receive the Participant’s shares in the event of the Participant’s Disability or death), if requested by the Company to do so, will execute and deliver to the Company in writing an agreement containing such provisions as the Company may require assuring compliance with applicable securities laws.  The Company shall incur no liability to the Participant for failure to register the Common Stock or maintain the registration.

 

The shares of Common Stock which the Participant may acquire pursuant to this Notice will not be sold or otherwise disposed of in any manner that would constitute a violation of any applicable securities laws, whether federal or state.  The Participant is hereby notified (i) that the certificates representing the shares of Common Stock may bear such legend or legends as the Committee deems appropriate in order to assure compliance with applicable securities laws, (ii) that the Company may refuse to register the transfer of the shares of Common Stock acquired pursuant to this Notice on the stock transfer records of the Company if such proposed transfer would in the opinion of counsel satisfactory to the Company constitute a violation of any applicable securities law and (iii) that the Company may give related instructions to its transfer agent, if any, to stop registration of the transfer of such shares.

	
12.  

	
Severability.   In the event that any provision of this Notice shall be held illegal, invalid, or unenforceable for any reason, such provision shall be fully severable and shall not affect the remaining provisions of this Notice, and this Notice shall be construed and enforced as if the illegal, invalid, or unenforceable provision had never been included herein.

 

	
13.  

	
Certain Restrictions.   By accepting the Restricted Shares granted under this Notice, the Participant acknowledges that he will enter into such written representations, warranties and Notices and execute such documents as the Company may reasonably request in order to comply with the terms of this Notice or the Plan, or securities laws or any other applicable laws, rules or regulations.

 

	
14.  

	
Recoupment.   Notwithstanding any provision of this Notice to the contrary, the Committee may, in its sole discretion:

 

(a) recoup from the Participant all or a portion of the Common Stock issued or cash paid under this Notice if the Company’s reported financial or operating results are materially and negatively restated within five years of the grant or payment of such amounts; and

 

(b) recoup from the Participant if, in the Committee’s judgment, the Participant engaged in conduct which was fraudulent, negligent or not in good faith, and which disrupted, damaged, impaired or interfered with the business, reputation or Employees of the Company or its Affiliates or which caused a subsequent adjustment or restatement of the Company’s reported financial statements, all or a portion of the Common Stock issued or cash paid under this Notice within five years of such conduct.

 

	
15.  

	
Amendment and Termination.  Except as otherwise provided in the Plan or this Notice, no amendment of this Notice that adversely affects the Participant’s rights hereunder in any material respect or termination of this Notice shall be made by the Company without the written consent of the Participant.

 

	
16.  

	
Code Section 409A; No Guarantee of Tax Consequences.   This award of Restricted Shares is intended to be exempt from Code Section 409A and the provisions hereof shall be interpreted and administered consistently with such intent.  The Company makes no commitment or guarantee to the Participant that any federal or state tax treatment will apply or be available to any person eligible for benefits under this Notice.

 

	
17.  

	
Binding Effect.  This Notice shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Participant.

 

	
18.  

	
Governing Law and Venue.  This Notice shall be governed by, and construed in accordance with, the laws of the State of Texas.  The courts in Harris County, Texas shall be the exclusive venue for any dispute regarding the Plan or this Notice.

 

  

  

  

 

Exhibit A

STOCK POWER

 

FOR VALUE RECEIVED, ___________ (“Transferor”) hereby sells, assigns and transfers unto Rowan Companies, Inc., ____________ shares of the common stock, $.125 par value (“Common Stock”), of Rowan Companies, Inc., a Delaware corporation (the “Company”), which shares of Common Stock are represented by certificate no(s).____________, and hereby irrevocably appoints __________________ as attorney-in-fact to transfer such shares of Common Stock on the books of the Company, with full power of substitution on the premises.

 

Dated:  ____________, 20__

 

TRANSFEROR:

Printed Name:

 

HOU01:1180839.1                                                              

  

  

  

2009 ROWAN COMPANIES, INC. INCENTIVE PLAN

 

2011 NON-EMPLOYEE DIRECTOR RESTRICTED STOCK UNIT NOTICE

 

	
1.  

	
Grant of Restricted Stock Units.  To carry out the purposes of the 2009 Rowan Companies, Inc. Incentive Plan (the “Plan”), and subject to the conditions described in this Notice and the Plan, Rowan Companies, Inc., a Delaware corporation (the “Company”) hereby grants to you, (the “Participant”), _____ Restricted Stock Units (“RSUs”), effective as of April 28, 2011 (the “Grant Date”), with respect to the Participant’s annual service period commencing April 28, 2011 (the “2011 Grant”).  All capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan; the Plan is incorporated herein by reference as a part of this Notice.

 

	
2.  

	
Vesting.  The 2011 Grant shall be fully vested and nonforfeitable as of the earlier of (i) the date of the next following annual meeting of stockholders or (ii) one year from the date of the 2011 Grant; provided, however, that if the Participant resigns or is removed from the Board prior to such date, such 2011 Grant shall be forfeited.

 

	
3.  

	
Establishment of Accounts.  The Company shall maintain an appropriate bookkeeping record (the “RSU Account”) that from time to time will reflect the Participant’s name, the number of vested and unvested RSUs credited to the Participant and the Fair Market Value of the RSUs credited to the Participant.  Fair Market Value of a RSU shall be deemed to be equal to the Fair Market Value of one share of Common Stock.  The 2011 Grant shall be credited to the Participant’s RSU Account effective as of the Grant Date.

 

	
4.  

	
Dividends.  As of each date on or after the Grant Date that cash dividends are paid with respect to Common Stock, to the extent that the Participant has any outstanding RSUs credited to his or her RSU Account, the Participant shall have an additional amount credited to his or her RSU Account equal to the number of RSUs (rounded up to the nearest whole number) having a Fair Market Value equal to the dollar amount of dividends paid per share of Common Stock multiplied by the number of RSUs credited to the Participant’s RSU Account as of the payment date of such dividend.

 

	
5.  

	
Reorganization of the Company.  The existence of this Notice shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business; any merger or consolidation of the Company; any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof; the dissolution or liquidation of the Company; any sale or transfer of all or any part of its assets or business; or any other corporate act or proceeding whether of a similar character or otherwise.

 

	
6.  

	
Recapitalization Events.  In the event of stock dividends, spin-offs of assets or other extraordinary dividends, stock splits, combinations of shares, recapitalizations, mergers, consolidations, reorganizations, liquidations, issuances of rights or warrants and similar transactions or events involving the Company (“Recapitalization Events”), then for all purposes references herein to Common Stock or to RSUs shall mean and include all securities or other property (other than cash) that holders of Common Stock are entitled to receive in respect of Common Stock by reason of each successive Recapitalization Event, which securities or other property (other than cash) shall be treated in the same manner and shall be subject to the same restrictions as the underlying RSUs.

 

	
7.  

	
Amount of Payment.  As of the final termination date of the Participant’s service on the Board, the aggregate Fair Market Value of all vested RSUs then credited to the Participant’s RSU Account shall be calculated by multiplying the Fair Market Value of a share of Common Stock on such date times the number of RSUs then credited to the Participant’s RSU Account.

 

	
8.  

	
Time and Form of Payment.  Payment to the Participant of amounts due hereunder shall be made in Common Stock, or at the discretion of the Committee in cash in a lump sum, on the 30th day following the final termination date of the Participant’s services on the Board.

 

	
9.  

	
Death Prior to Payment.  In the event that the Participant dies prior to payment, all RSUs shall become fully vested and immediately payable to the legal representative of the Participant’s estate or the person who acquires rights under this Notice by bequest or inheritance or by reason of the death of the Participant.

 

	
10.  

	
Transfer of RSUs.  Except as provided herein, all rights granted hereunder shall not be transferable other than by will or the laws of descent and distribution.  Any purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance of the RSUs that does not satisfy the requirements set forth hereunder shall be void and unenforceable against the Company.

 

	
11.  

	
Severability.  In the event that any provision of this Notice shall be held illegal, invalid, or unenforceable for any reason, such provision shall be fully severable and shall not affect the remaining provisions of this Notice, and this Notice shall be construed and enforced as if the illegal, invalid, or unenforceable provision had never been included herein.

 

	
12.  

	
Certain Restrictions.   By accepting the RSUs granted under this Notice, the Participant acknowledges that he or she will enter into such written representations, warranties and agreements and execute such documents as the Company may reasonably request in order to comply with the terms of this Notice or the Plan, or securities laws or any other applicable laws, rules or regulations.

 

	
13.  

	
Recoupment.   Notwithstanding any provision of this Notice to the contrary, the Committee may, in its sole discretion:

 

	
(a)  

	
recoup from the Participant all or a portion of the Common Stock issued or cash paid under this Notice if the Company’s reported financial or operating results are materially and negatively restated within five years of the grant or payment of such amounts; and

 

	
(b)  

	
recoup from the Participant if, in the Committee’s judgment, the Participant engaged in conduct which was fraudulent, negligent or not in good faith, and which disrupted, damaged, impaired or interfered with the business, reputation or Employees of the Company or its Affiliates or which caused a subsequent adjustment or restatement of the Company’s reported financial statements, all or a portion of the Common Stock issued or cash paid under this Notice within five years of such conduct.

 

	
14.  

	
Amendment and Termination.  Except as otherwise provided in the Plan or this Notice, no amendment of this Notice that adversely affects the Participant’s rights hereunder in any material respect or termination of this Notice shall be made by the Company without the written consent of the Participant.

 

	
15.  

	
Code Section 409A; No Guarantee of Tax Consequences.   This award of RSUs is intended to comply with Code Section 409A and the provisions hereof shall be interpreted and administered consistently with such intent.  The Company makes no commitment or guarantee to the Participant that any federal or state tax treatment will apply or be available to any person eligible for benefits under this Notice.

 

	
16.  

	
Binding Effect.  This Notice shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Participant.

 

	
17.  

	
Governing Law and Venue.  This Notice shall be governed by, and construed in accordance with, the laws of the State of Texas.  The courts in Harris County, Texas shall be the exclusive venue for any dispute regarding the Plan or this Notice.

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