Document:

exv4w3

 

EXHIBIT 4.3

DANIELSON HOLDING CORPORATION

EQUITY AWARD PLAN FOR DIRECTORS

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 1.
	 	Purpose; Definitions	 	 	1	 
	(a)
	 	“Administrator”	 	 	1	 
	(b)
	 	“Affiliate”	 	 	1	 
	(c)
	 	“Applicable Laws”	 	 	1	 
	(d)
	 	“Award”	 	 	1	 
	(e)
	 	“Award Agreement”	 	 	1	 
	(f)
	 	“Board” 	 	 	1	 
	(g)
	 	“Cause” 	 	 	1	 
	(h)
	 	“Code”	 	 	1	 
	(i)
	 	“Committee”	 	 	1	 
	(j)
	 	“Common Stock”	 	 	1	 
	(k)
	 	“Company”	 	 	1	 
	(l)
	 	“Director”	 	 	1	 
	(m)
	 	“Disability”	 	 	1	 
	(n)
	 	“Effective Date”	 	 	2	 
	(o)
	 	“Employee”	 	 	2	 
	(p)
	 	“Exchange Act”	 	 	2	 
	(q)
	 	“Fair Market Value”	 	 	2	 
	(r)
	 	“Mature Shares”	 	 	2	 
	(s)
	 	“Non-Qualified Stock Option”	 	 	2	 
	(t)
	 	“Option”	 	 	2	 
	(u)
	 	“Plan”	 	 	2	 
	(v)
	 	“Recipient”	 	 	2	 
	(w)
	 	“Restricted Stock”	 	 	2	 
	(x)
	 	“Stock Appreciation Right”	 	 	2	 
	(y)
	 	“Share”	 	 	2	 
	(z)
	 	“Subsidiary”	 	 	2	 
	SECTION 2.
	 	Stock Subject to the Plan	 	 	3	 
	SECTION 3.
	 	Administration of the Plan	 	 	3	 
	(a)
	 	Administration	 	 	3	 
	(b)
	 	Powers of the Committee	 	 	3	 
	SECTION 4.
	 	Eligibility for Awards	 	 	3	 
	SECTION 5.
	 	Term of Plan	 	 	3	 
	SECTION 6.
	 	Limitations on Options	 	 	4	 
	SECTION 7.
	 	Director Stock Options	 	 	4	 

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TABLE OF CONTENTS

(Continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page
	(a)
	 	Option Awards	 	 	4	 
	(b)
	 	Eligibility	 	 	4	 
	SECTION 8.
	 	Term of Option	 	 	4	 
	SECTION 9.
	 	Option Exercise Price and Consideration	 	 	4	 
	(a)
	 	Exercise Price	 	 	4	 
	(b)
	 	Waiting Period and Exercise Dates	 	 	4	 
	(c)
	 	Form of Consideration	 	 	4	 
	SECTION 10.
	 	Exercise of Option	 	 	5	 
	(a)
	 	Procedure for Exercise; Rights as a Stockholder	 	 	5	 
	(b)
	 	Termination of Relationship as Director	 	 	5	 
	(c)
	 	Death of Recipient	 	 	5	 
	(d)
	 	Cash out Provisions	 	 	5	 
	SECTION 11.
	 	Restricted Stock	 	 	6	 
	(a)
	 	Awards of Restricted Stock	 	 	6	 
	(b)
	 	Awards and Certificates	 	 	6	 
	(c)
	 	Terms and Conditions	 	 	6	 
	(d)
	 	Other Provisions	 	 	7	 
	SECTION 12.
	 	Deferral of Stock Award	 	 	7	 
	SECTION 13.
	 	Other Awards	 	 	7	 
	(a)
	 	Stock Appreciation Right	 	 	7	 
	(b)
	 	Other Stock-Based Awards	 	 	8	 
	SECTION 14.
	 	Non-Transferability of Awards	 	 	8	 
	SECTION 15.
	 	Adjustments Upon Changes in Capitalization	 	 	8	 
	SECTION 16.
	 	Date of Grant	 	 	8	 
	SECTION 17.
	 	Term, Amendment and Termination of the Plan	 	 	8	 
	(a)
	 	Amendment and Termination	 	 	8	 
	(b)
	 	Stockholder Approval	 	 	8	 
	(c)
	 	Effect of Amendment or Termination	 	 	9	 
	SECTION 18.
	 	Conditions Upon Issuance of Shares	 	 	9	 
	(a)
	 	Legal Compliance	 	 	9	 
	(b)
	 	Inability to Obtain Authority	 	 	9	 
	(c)
	 	Grants Exceeding Allotted Shares	 	 	9	 
	SECTION 19.
	 	General Provisions	 	 	9	 
	(a)
	 	Term of Plan	 	 	9	 
	(b)
	 	Severability	 	 	9	 

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TABLE OF CONTENTS

(Continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page
	(c)
	 	Governing Law	 	 	9	 
	(d)
	 	Dividends	 	 	9	 
	(e)
	 	Prohibition on Loans to Participants	 	 	9	 
	(f)
	 	Unfunded Status of Plan	 	 	9	 
	(g)
	 	Liability of Committee Members	 	 	10	 

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DANIELSON HOLDING CORPORATION

EQUITY AWARD PLAN FOR DIRECTORS

SECTION 19. Purpose; Definitions.

     The purposes of this Plan are to promote the interests of the Company
(including any Subsidiaries and Affiliates) and its stockholders by using
equity interests in the Company to attract, retain and motivate its
non-employee directors and to encourage and reward their contributions to the
Company’s performance and profitability.

     The following capitalized terms shall have the following respective
meanings when used in this Plan:

     (a) “Administrator” means the Board or any one of its Committees as shall
be administering the Plan, in accordance with Section 3 of the Plan.

     (b) “Affiliate” means any corporation or other entity controlled by the
Company and designated by the Committee as such.

     (c) “Applicable Laws” means the legal requirements relating to the
administration of plans providing one or more of the types of Awards described
in the Plan and the issuance of Shares thereunder pursuant to U.S. state
corporate laws, U.S. federal and state securities laws, the Code and the
applicable laws of any foreign country or jurisdiction where Awards are, or
will be, granted under the Plan.

     (d) “Award” means a grant of an Option, Restricted Stock, stock
appreciation right or other stock-based Award under the Plan, all on a stand
alone, combination or tandem basis, as described in or granted under the Plan.

     (e) “Award Agreement” means a written agreement between the Company and a
Participant evidencing the terms and conditions of an individual Award. The
Award Agreement is subject to the terms and conditions of the Plan.

     (f) “Board” means the Board of Directors of the Company.

     (g) “Cause” shall mean, unless otherwise determined by the Committee, (i)
the conviction of the Recipient for committing, or the entering of a plea of
nolo contendere by the Recipient with respect to, a felony under federal or
state law or crime involving moral turpitude; (ii) dishonesty in the course of
fulfilling the Recipient’s director duties; or (iii) willful misconduct or the
deliberate failure on the part of the Recipient to perform his or her director
duties in any material respect.

     (h) “Code” means the Internal Revenue Code of 1986, as amended or replaced
from time to time.

     (i) “Committee” means the Compensation Committee of the Board, or another
committee appointed by the Board to administer the Plan, in accordance with
Section 3 of the Plan.

     (j) “Common Stock” means the common stock, par value $0.10, of the
Company.

     (k) “Company” means Danielson Holding Corporation, a Delaware corporation.

     (l) “Director” means a director serving on the Board of the Company who is
not also an Employee of the Company or any Subsidiary or Affiliate thereof and
who has been duly elected to the Board by the stockholders of the Company or by
the Board under applicable corporate law. Neither service as a Director nor
payment of a director’s fee by the Company shall, without more, constitute
“employment” by the Company.

     (m) “Disability” means permanent and total disability as determined under
procedures established by the Committee for the purposes of the Plan.

 

 

     (n) “Effective Date” means the date described in Section 19(a) of the
Plan.

     (o) “Employee” means any person, including an officer, employed by the
Company or any Subsidiary or Affiliate of the Company; provided, however, that
a person serving solely as an interim officer of the Company or any Subsidiary
or Affiliate of the Company shall not be deemed an Employee for the purposes of
the Plan. Neither service as a Director nor payment of a director’s fee by the
Company shall, without more, constitute “employment” by the Company.

     (p) “Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto, or the rules and regulations
promulgated thereunder.

     (q) “Fair Market Value” means, as of any date, the value of Common Stock
determined as follows:

	 	 	     (A)  If the Common Stock is listed on the American Stock Exchange
Composite Tape, its Fair Market Value shall be either the mean of the
highest and lowest reported sale prices of the stock (or, if no sales
were reported, the average of the closing bid and asked price) or the
last reported sale price of the stock, as determined by the Committee in
its discretion, on the American Stock Exchange for any given day or, if
not listed on such exchange, on any other national securities exchange on
which the Common Stock is listed or on the NASDAQ Stock Market, as
reported in The Wall Street Journal or such other source as the Committee
deems reliable;
	 
	 	 	     (B)  If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market
Value of a Share of Common Stock shall be either the mean between the
high bid and low asked prices or the last asked price, as determined by
the Committee for the Common Stock on any given day, as reported in The
Wall Street Journal or such other source as the Committee deems reliable;
	 
	 	 	     (C)  In the absence of an established regular public market for the
Common Stock, the Fair Market Value shall be determined in good faith by
the Committee.

     (r) “Mature Shares” means any shares held by the Recipient for a minimum
period of six (6) months.

     (s) “Non-Qualified Stock Option” means any Option that is not an incentive
stock option (i.e., an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated
thereunder).

     (t) “Option” means a stock option granted pursuant to the Plan.

     (u) “Plan” means this Equity Award Plan for Directors.

     (v) “Recipient” means a Director or former Director, if applicable, who
holds an outstanding Award.

     (w) “Restricted Stock” means shares of Common Stock acquired pursuant to
an Award granted pursuant to Section 11 of the Plan.

     (x) “Stock Appreciation Right” means an Award granted pursuant to Section
13(a) of the Plan.

     (y) “Share” means a share of the Common Stock, as adjusted in accordance
with Section 15 of the Plan.

     (z) “Subsidiary” means a “subsidiary corporation,” whether now or
hereafter existing, as defined in Section 424(f) of the Code.

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SECTION 20. Stock Subject to the Plan.

     Subject to the provisions of Section 15 of the Plan, the maximum aggregate
number of Shares available for grants of Awards under the Plan is 400,000
Shares. The Shares subject to an Award under the Plan may be authorized but
unissued, or reacquired Common Stock or treasury shares. In determining the
number of Shares with respect to which a Recipient may be granted an Award in
any calendar year, any Award which is cancelled shall count against the maximum
number of Shares for which an Award may be granted to a Recipient.

     If an Award expires or becomes unexercisable without having been exercised
in full, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued
under the Plan, whether upon exercise of an Option or other Award, shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if Shares of Restricted Stock are repurchased by
the Company at their original purchase price, and the original Recipient of
such Shares did not receive any benefits of ownership of such Shares, such
Shares shall become available for future grant under the Plan. For purposes of
the preceding sentence, voting rights shall not be considered a benefit of
Share ownership.

SECTION 21. Administration of the Plan.

     (a) Administration. The Plan shall be administered by the Compensation
Committee of the Board or another Committee that may be appointed by the Board
for this purpose in accordance with Applicable Laws. Such Committee shall
consist of two or more members of the Board each of whom is a “disinterested
person,” as defined in Rule 16b-3(c)(2)(i) of the General Rules and Regulations
promulgated under the Exchange Act. Committee members shall serve for such
term(s) as the Board may determine, subject to removal by the Board at any
time. The Committee shall act by a majority of its members, or, if there are
only two members of such Committee, by unanimous consent of both members. If at
any time there is no Committee in office, the functions of the Committee
specified in the Plan shall be carried out by the Board.

     (b) Powers of the Committee. Except for the terms and conditions
explicitly set forth in the Plan, the Committee shall have exclusive authority,
in its discretion, to determine the Fair Market Value of the Common Stock in
accordance with Section 1(q) of the Plan and to determine all matters relating
to Awards under the Plan, including the selection of individuals to be granted
an Award, the type of Award, the number of shares of Common Stock subject to an
Award, all terms, conditions, restrictions and limitations, if any, including,
without limitation, vesting, acceleration of vesting, exercisability,
termination, substitution, cancellation, forfeiture or repurchase of an Award
and the terms of any instrument that evidences the Award. The Committee shall
also have exclusive authority to interpret the Plan and its rules and
regulations, and to make all other determinations deemed necessary or advisable
under or for administering the Plan, subject to Section 17 of the Plan. All
actions taken and determinations made by the Committee pursuant to the Plan
shall be conclusive and binding on all parties involved or affected. The
Committee may, by a majority of its members, authorize any one or more of its
members or any Officer of the Company to execute and deliver documents on
behalf of the Committee. No Director who is a member of the Committee shall
participate in any action of the Committee with respect to any claim or dispute
involving such Director.

SECTION 22. Eligibility for Awards.

     Directors shall be eligible for Awards under the Plan in accordance with the terms of the Plan.

SECTION 23. Term of Plan.

     The Plan shall become effective upon the approval by the stockholders of
the Company as described in Section 17 of the Plan. It shall continue in
effect for a term of ten (10) years unless terminated earlier under Section 17
of the Plan.

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SECTION 24. Limitations on Options.

     Each Option shall be designated in the written Award Agreement for an
individual Director as a Non-Qualified Stock Option. The Fair Market Value of
the Shares shall be determined as of the time the Option with respect to such
Shares is granted.

SECTION 25. Director Stock Options.

     (a) Option Awards. The Committee in its sole discretion, but subject to
the terms of the Plan, may grant Options under this Plan either alone, in
combination or in tandem with any other Awards under this Plan.

     (b) Eligibility. An Option described under Section 7(a) of the Plan shall
be granted hereunder only if, as of each date of grant (or, in the case of any
initial grant, from and after the effective date of the Plan), the Director (i)
is not otherwise an Employee of the Company or any Subsidiary or Affiliate, and
(ii) has served on the Board continuously since the commencement of his or her
term.

SECTION 26. Term of Option.

     The term of each Option shall be stated in the Award Agreement but shall
be no later than ten (10) years from the date of grant or such shorter term as
may be provided in the Award Agreement. An Option may not be exercised until
six months after the date the Option is granted.

SECTION 27. Option Exercise Price and Consideration.

     (a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the Committee,
but shall be not less than 100% of the Fair Market Value per Share on the
effective date of grant.

     (b) Waiting Period and Exercise Dates. The Committee shall have the
authority, subject to the terms of the Plan, to determine any vesting
restriction or limitation or waiting period with respect to any Option granted
to a Recipient or the Shares acquired pursuant to the exercise of such Option.

     (c) Form of Consideration. The Committee shall determine the acceptable
form of consideration for exercising an Option, including the method of
payment. Such consideration may consist entirely of:

	 	 	     (A) cash (in the form of a certified or bank check or such other
instrument as the Company may accept);
	 
	 	 	     (B) other Mature Shares owned by the Recipient on the date of
exercise of the Option (and Restricted Stock subject to an Award
hereunder) based on the Fair Market Value of the Common Stock on the date
the Option is exercised; provided, however, that if payment is made in
the form of Restricted Stock, the number of equivalent shares of Common
Stock to be received shall be subject to the same forfeiture restrictions
to which such Restricted Stock was subject, unless otherwise determined
by the Committee;
	 
	 	 	     (C) any combination of (i) and (ii) above;
	 
	 	 	     (D) at the discretion of the Committee, by delivery of a properly
executed exercise notice together with such other documentation as the
Committee and a qualified broker, if applicable, shall require to effect
an exercise of the Option, and delivery to the Company of the sale or
loan proceeds required to pay the exercise price; or
	 
	 	 	     (E) such other consideration and method of payment for the issuance
of Shares to the extent permitted by the Committee and Applicable Laws.

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SECTION 28. Exercise of Option.

     (a) Procedure for Exercise; Rights as a Stockholder. Except as otherwise
authorized by the Committee, any Option granted hereunder shall be exercisable
according to the terms of the Plan and at such times and under such conditions
as determined by the Committee and set forth in the Award Agreement. If the
Committee provides that any Option is exercisable only in installments, the
Committee may at any time waive such installment exercise provisions, in whole
or in part, based on such factors as the Committee may determine. The
Committee may at any time, in whole or in part, accelerate the exercisability
of any Option.

     An Option shall be deemed exercised when the Company receives: (i) written
notice of exercise (in accordance with the Award Agreement) from the person
entitled to exercise the Option, and (ii) full payment for the Shares with
respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Committee in accordance
with Section 9(c) of the Plan and permitted by the Award Agreement and the
Plan. Shares issued upon exercise of an Option shall be issued in the name of
the Recipient. Until the stock certificate evidencing such Shares is issued
(as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to such
Shares, notwithstanding the exercise of the Option. The Company shall issue
(or cause to be issued) such stock certificate promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the stock certificate is issued, except as
provided in Section 15 of the Plan.

     Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.

     (b) Termination of Relationship as Director. Except as otherwise
authorized by the Committee, if a Recipient ceases to be a Director, other than
for Cause, the Recipient, subject to the restrictions of this Section 10(b) and
to the extent that the Option is vested on the date of termination of service
as a Director, including any acceleration of vesting granted by the Committee,
may exercise his or her Option for the lesser of the remaining term of the
Option or three (3) years from the date of such termination of the service as a
Director. If, on the date of termination, the Recipient is not vested as to
his or her entire Option and the Committee has not granted any acceleration of
vesting, the Shares covered by the unvested portion of the Option shall revert
to the Plan. If, on the date of termination, the Recipient is not vested as to
his or her entire Option and the Committee has not granted any acceleration of
vesting, the Shares covered by the unvested portion of the Option shall revert
to the Plan. If a Recipient ceases to be a Director for Cause, the Option
shall immediately terminate, and the Shares covered by such Option shall revert
to the Plan. If, after termination, the Recipient does not exercise his or her
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

     (c) Death of Recipient. If a Recipient dies while a Director, the Option
may be exercised subject to the restrictions of this Section 10(c) and within
such period of time as is specified in the Award Agreement (but in no event
later than the earlier of three (3) years or the expiration of the term of such
Option as set forth in the Award Agreement), but only to the extent that the
Option is vested on the date of death, including any acceleration of vesting
granted by the Committee, and has not yet expired as set forth in the Award
Agreement. If, at the time of death, the Recipient is not vested as to his or
her entire Option and the Committee has not granted any acceleration of
vesting, the Shares covered by the unvested portion of the Option shall
immediately revert to the Plan. The Option may be exercised by the executor or
administrator of the Recipient’s estate or, if none, by the person(s) entitled
to exercise the Option under the Recipient’s will or the applicable laws of
descent or distribution. If the Option is not so exercised within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan

     (d) Cash out Provisions. On receipt of written notice of exercise, the
Committee may elect to, but shall not be required to, cash out all or any part
of the shares of Common Stock for which an Option is being exercised by paying
the Recipient an amount, in cash, equal to the excess of the Fair Market Value
of the Common Stock over the option price times the number of shares of Common
Stock for which an Option is being exercised on the effective date of such cash
out. Cash outs pursuant to this Section 10(c) shall comply with the provisions
of Section 16 of the Exchange Act and the rules promulgated thereunder, to the
extent applicable.

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SECTION 29. Restricted Stock.

     (a) Awards of Restricted Stock. Shares of Restricted Stock may be issued
either alone, in addition to, or in tandem with other Awards granted under the
Plan and/or cash awards made outside of the Plan. The Committee shall
determine the individuals to whom it will award Restricted Stock under the
Plan, and it shall advise the Recipient in writing, by means of an Award
Agreement, of the terms, conditions and restrictions related to the Award,
including the number of Shares to be awarded to the Recipient, the time or
times within which such Awards may be subject to forfeiture and any other terms
and conditions of the Awards, in addition to those contained in this Section
11. The Committee may condition the grant or vesting of Restricted Stock upon
the attainment of specified performance goals of the Company, or upon such
other factors as the Committee shall determine. The provisions of an Award
need not be the same with respect to each Recipient. The terms of the Award of
Restricted Stock shall comply in all respects with Applicable Laws and the
terms of the Plan.

     (b) Awards and Certificates. Each Award shall be confirmed by, and
subject to the terms of, an Award Agreement. Shares of Restricted Stock shall
be evidenced in such manner as the Committee may deem appropriate, including
book-entry registration or issuance of one or more stock certificates. The
Committee may require that the certificates evidencing such Shares be held in
custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of Restricted Stock, the Recipient shall have
delivered to the Company a stock power, endorsed in blank, relating to the
Common Stock covered by such Award. Any certificate issued with respect to
Shares of Restricted Stock shall be registered in the name of such Recipient
and shall bear an appropriate legend referring to the terms, conditions and
restrictions applicable to such Award, substantially in the following form:

     “The transferability of this certificate and the shares of Stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the Danielson Holding Corporation Equity Award Plan for
Directors and an Award Agreement. Copies of such Plan and Award Agreement are
on file at the office of the Secretary of Danielson Holding Corporation.”

     If and when the Restriction Period (hereinafter defined) expires without a
prior forfeiture of the Restricted Stock subject to such Restriction Period,
the Recipient may request that unlegended certificates for such Shares shall be
delivered to the Recipient.

     (c) Terms and Conditions. Shares of Restricted Stock shall be subject to
the following terms and conditions:

     (A) Restriction Period. Subject to the provisions of the Plan and
the terms of the Award Agreement, during a period set by the Committee,
commencing with the date of such Award (the “Restriction Period”), the
Recipient shall not be permitted to sell, assign, transfer, pledge or
otherwise encumber Shares of Restricted Stock (the “Restrictions”). The
Committee may provide for the lapse of such Restrictions in installments
or otherwise and may accelerate or waive such Restrictions, in whole or
in part, in each case based on period of service, performance of the
Company or such other factors or criteria as the Committee may determine.

Notwithstanding the foregoing, if the Recipient of a Restricted Stock
Award is subject to the provisions of Section 16 of the Exchange Act,
 shares of Common Stock subject to the grant may not, without the written
consent of the Committee, be sold or otherwise disposed of within six (6)
months following the date of grant. The Committee may, in its
discretion, impose a limit on the number of Shares that a Recipient may
receive in any twelve (12)-month period in an Award of Restricted Stock.

     (B) Rights. Except as provided in Section 11(c) of the Plan, the
Award Agreement and Applicable Law, the Recipient shall have, with
respect to the Shares of Restricted Stock, all of the rights of a
stockholder of the Company holding the class or series of Common Stock
that is the subject of the Award Agreement, including, if so provided in
the Award Agreement, the right to vote the Shares and the right to
receive any cash dividends. Unless otherwise determined by the Committee
in the applicable Award Agreement and subject to Section 19(d) of the
Plan, for the Restriction Period, (A) cash dividends on the Shares of
Common Stock that are the subject of the Award Agreement shall be
automatically deferred and reinvested in additional Restricted Stock and
(B) dividends payable in Common Stock shall be paid in the

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form of Restricted Stock. If there is a pro rata distribution of
warrants or other rights to acquire shares of Common Stock, then the
Recipient shall have the right to participate in or receive such warrants
or other rights, provided, however, that any shares of Common Stock
acquired pursuant to the exercise of such warrants or other rights shall
be subject to the same vesting requirements and restrictions as the
underlying Common Stock.

     (C) Termination of Service as a Director. Except to the extent
otherwise provided in the applicable Award Agreement or the Plan, if a
Recipient ceases to be a Director for any reason during the Restriction
Period, all Shares still subject to restriction shall be forfeited by the
Recipient.

     (d) Other Provisions. The Award Agreement shall contain such other terms,
provisions and conditions not inconsistent with the Plan as may be determined
by the Committee in its sole discretion, including, without limitation,
provisions relating to tax matters; prohibitions on elections by the Recipient
under Section 83(b) of the Code. In addition, the terms of the Award
Agreements for Restricted Stock need not be the same with respect to each
Recipient.

SECTION 30. Deferral of Stock Award.

     (a) The Committee may, in its sole discretion, authorize a Director to
elect to defer the ownership of the Shares of Common Stock otherwise issuable
pursuant to Section 11. Any such election shall be made in writing in the form
prescribed by the Committee, and shall be subject to such rules and procedures
as shall be determined by the Committee in its sole discretion. In no event,
however, shall any deferral be permitted to the extent prohibited by Applicable
Laws.

     (b) An election to defer pursuant to (a) above with respect to Shares of
Restricted Stock issuable in a calendar year must be made on or prior to
December 31st of the year that precedes the year in which such Restricted Stock
would otherwise be issued. Notwithstanding the foregoing, a Director may make
an election to defer pursuant to this Section 12 no later than 30 days after
the Effective Date, for the year in which the Directors Plan is first
effective, or, if later, within 30 days after the date the Director first
becomes eligible to participate.

     (c) At the time of deferral, a Director may select the date for the
issuance or receipt of the deferred Shares. If a Director does not select a
date for the issuance of deferred Shares, the deferred Shares will be issued
upon termination of his or her service as a Director.

SECTION 31. Other Awards.

     The Committee, in its sole discretion, but subject to the terms of the
Plan, may grant the following types of Awards (in addition to or in combination
with the Awards of Options and Restricted Stock described above) under this
Plan on a stand alone, combination or tandem basis:

     (a) Stock Appreciation Right. The Committee may grant a right to receive
the excess of the Fair Market Value of a Share on the date the stock
appreciation right is exercised over the Fair Market Value of a Share on the
date the stock appreciation right was granted (the “Spread”). The Spread with
respect to a stock appreciation right may be payable in cash, Shares with a
total Fair Market Value equal to the Spread or a combination of these two.
With respect to stock appreciation rights that are subject to Section 16 of the
Exchange Act, however, the Committee shall retain sole discretion (i) to
determine the form in which payment of the stock appreciation right will be
made (cash, Shares or any combination thereof) or (ii) to approve an election
by a Recipient to receive cash in full or partial settlement of stock
appreciation rights. Each Award Agreement for stock appreciation rights shall
provide that stock appreciation rights under the Plan may not be exercised
earlier than six (6) months from the date of grant and shall specify the effect
of a termination of service as a Director on the exercisability of the stock
appreciation rights. The terms of the Award Agreements granting stock
appreciation rights need not be the same with respect to each Recipient. A
stock appreciation right shall be subject to adjustment as provided in Section
15 of the Plan.

-7-

 

     (b) Other Stock-Based Awards. The Committee may, in its discretion, grant
other Share-based Awards which are related to or serve a similar function to
those Awards set forth in this Section 13.

SECTION 32. Non-Transferability of Awards.

     Unless otherwise specified by the Committee in the Award Agreement, an
Award may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by (i) will or by the laws of descent or
distribution or (ii) pursuant to a qualified domestic relations order (as
defined in the Code or Title I of the Employee Retirement Income Security Act
of 1974, as amended, or the rules thereunder). Options and other Awards may be
exercised, during the lifetime of the Participant, only by the Participant or
by the guardian or legal representative of the Participant or by an alternate
payee pursuant to a qualified domestic relations order. If the Committee makes
an Award transferable, such Award shall contain such additional terms and
conditions as the Committee deems appropriate. Any attempt to assign, pledge
or otherwise transfer any Award or of any right or privileges conferred
thereby, contrary to the Plan, or the sale or levy or similar process upon the
rights and privileges conferred hereby, shall be void.

SECTION 33. Adjustments Upon Changes in Capitalization.

     Subject to any required action by the stockholders of the Company, the
number of shares of Common Stock covered by each outstanding Award, and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but as to which no Awards have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Award, as well as
the price per share of Common Stock covered by each such outstanding Award,
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock, or
any other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that (a) conversion of any convertible securities of the Company shall not be
deemed to have been “effected without receipt of consideration”; (b) the
dilution effect of the Shares authorized, plus the shares reserved for issuance
pursuant to all other stock-related plans of the Company, shall not exceed 10%;
and (c) no adjustment shall be made below par value and no fractional shares of
Common Stock shall be issued. Such adjustment shall be made by the Board in its
sole discretion, whose determination in that respect shall be final, binding
and conclusive. In the event of an extraordinary cash dividend, the Committee
may, in its sole discretion, equitably adjust the aggregate number of Shares
available under the Plan, as well as the exercise price, number of Shares and
other appropriate terms of any outstanding Award in order to preserve the
intended benefits of the Plan. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Award.

SECTION 34. Date of Grant.

     The date of grant of an Award shall be, for all purposes, the date on
which the Committee makes the determination granting such Award, or such other
later date as is determined by the Committee. Notice of the determination
shall be provided to each Director receiving such Award within a reasonable
time after the date of such grant.

SECTION 35. Term, Amendment and Termination of the Plan.

     (a) Amendment and Termination. Subject to this Section 17 and Section
19(e), the Board may at any time amend, alter, suspend or terminate the Plan,
including without limitation to provide for the transferability of any or all
Options to comply with or take advantage of rules governing registration of
shares. Subject to Section 19(e) and the other terms of the Plan, the Committee
may amend the terms of any Option theretofore granted, prospectively or
retroactively, but no such amendment shall impair the rights of any Recipient
without the Recipient’s consent.

     (b) Stockholder Approval. The Company shall obtain stockholder approval
of any material Plan amendment and any amendment to the extent necessary and
desirable to comply with Section 422 of the Code (or

-8-

 

any successor rule or statute or other applicable law, rule or regulation,
including the requirements of any exchange or quotation system on which the
Common Stock is listed or quoted). Such stockholder approval, if required,
shall be obtained in such a manner and to such a degree as is required by
Applicable Laws, rules or regulations.

     (c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Recipient,
unless mutually agreed otherwise between the Recipient and the Committee, which
agreement must be in writing and signed by the Recipient and the Company.

SECTION 36. Conditions Upon Issuance of Shares.

     (a) Legal Compliance. Shares shall not be issued pursuant to the exercise
of an Award unless the exercise of such Award and the issuance and delivery of
such Shares shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, Applicable Laws, and the
requirements of any stock exchange or quotation system upon which the Shares
may then be listed or quoted and shall be further subject to the approval of
counsel for the Company with respect to such compliance. The Committee may
cause a legend or legends to be placed on any certificates for Shares or other
securities delivered under the Plan as it may deem appropriate to make
reference to such legal rules and restrictions, or to impose any restrictions
on transfer.

     (b) Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

     (c) Grants Exceeding Allotted Shares. If the Stock covered by an Award
exceeds, as of the date of grant, the number of Shares which may be issued
under the Plan without additional stockholder approval, such Award shall be
void with respect to such excess Shares, unless stockholder approval of an
amendment sufficiently increasing the number of Shares subject to the Plan is
timely obtained in accordance with Applicable Law and Section 17(b) of the
Plan.

SECTION 37. General Provisions.

     (a) Term of Plan. This Plan shall become effective upon its approval by
the stockholders of the Company (“Effective Date”), subject to the approval of
the Company’s stockholders on or before the first anniversary of the date of
its adoption by the Board. Such stockholder approval shall be obtained in the
manner and to the degree required under Applicable Laws and the rules of any
stock exchange upon which the Common Stock is listed. It shall continue in
effect for a term of ten (10) years unless terminated earlier under Section 17
of the Plan.

     (b) Severability. In the event that any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.

     (c) Governing Law. The Plan and all Awards made and actions thereunder
shall be governed by and construed in accordance with the laws of the state of
Delaware.

     (d) Dividends. The reinvestment of dividends in additional Restricted
Stock at the time of any dividend payment shall be permissible only if
sufficient shares of Common Stock are available under the Plan for such
reinvestment (taking into account then outstanding Options and other Awards).

     (e) Prohibition on Loans to Participants. The Company shall not lend
funds to any Director for the purpose of paying the exercise or base price
associated with any Award or for the purpose of paying any taxes associated
with the exercise or vesting of an Award.

     (f) Unfunded Status of Plan. It is intended that the Plan constitute an
“unfunded” plan for incentive and deferred compensation. The Committee may
authorize the creation of trusts or other arrangements to meet the

-9-

 

obligations created under the Plan to deliver Common Stock or make
payment; provided, however, that, unless the Committee otherwise determines,
the existence of such trusts or other arrangements is consistent with the
“unfunded” status of the Plan.

     (g) Liability of Committee Members. Except as provided under Applicable
Law, no member of the Board or the Committee will be liable for any action or
determination made in good faith by the Board or the Committee with respect to
the Plan or any Award under it.

-10-Amended & Restated Non- Employee Director Deferred

 

Exhibit 10.1

JACUZZI BRANDS, INC.

AMENDED AND RESTATED

NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN

Effective October 1, 2004

 

 

JACUZZI BRANDS, INC.

AMENDED AND RESTATED

NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN

(Effective October 1, 2004)

Table Of Contents

	 	 	 	 	 
	Article 1 - Introduction
	 	 	1	 
	Article 2 - Definitions
	 	 	1	 
	Article 3 - Shares Reserved
	 	 	4	 
	Article 4 - Administration
	 	 	5	 
	Article 5 - Eligibility
	 	 	6	 
	Article 6 - Timing and Manner of Deferrals
	 	 	6	 
	Article 7 - Vesting and Distribution
	 	 	8	 
	Article 8 - Dividends
	 	 	9	 
	Article 9 - Designation of Beneficiary
	 	 	9	 
	Article 10 - Amendment or Termination of Plan
	 	 	10	 
	Article 11 - Miscellaneous Provisions
	 	 	10	 

i

 

JACUZZI BRANDS, INC.

AMENDED AND RESTATED

NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN

(Effective October 1, 2004)

Article 1 — Introduction

     The Plan was originally adopted, effective as of June 5, 2003. This
Amended and Restated Plan is effective October 1, 2004. The purpose of the
Plan is to provide incentives to directors of Jacuzzi Brands, Inc. who are not
employees of Jacuzzi Brands, Inc. or a Subsidiary (as defined in Section 2.22)
through the ability to defer any Director Fees (as defined in Section 2.13).
Participants in the Plan are permitted to defer all or a portion of their
Director Fees in the form of Stock Units (as defined in Section 2.21). Stock
Units are distributed in the form of shares of Common Stock (as defined in
Section 2.9). The Company believes that the Plan creates a means to provide
deferred compensation to such directors and to raise the level of equity
ownership in the Company by such directors thereby strengthening the mutuality
of interests between such directors and the Company’s stockholders.

     The Stock Units and shares of Common Stock utilized under this Plan are
funded from shares of Common Stock that are available under the 2004 Stock
Incentive Plan (as defined in Section 2.24), and awards of Stock Units under
this Plan constitute a “Stock Unit” under the 2004 Stock Incentive Plan.

Article 2 — Definitions

	2.1	 	Account – means, with respect to each Participant, the account to which
Stock Units awarded under the Plan will be credited.
	 
	2.2	 	Annual Retainer Fee —  means the retainer fee paid in cash for services
on the Board of Directors as a director during a Plan Year.
	 
	2.3	 	Award Date – means the date that Director Fees would otherwise be paid to
a Participant if a Participant did not elect to defer Director Fees under
the Plan.
	 
	2.4	 	Beneficiary — a beneficiary or beneficiaries designated by the
Participant under Article 9.
	 
	2.5	 	Board of Directors — the Board of Directors of the Company.
	 
	2.6	 	Cash Director Fees – means any of the following amounts received by a
Participant in connection with service on the Board of Directors: (i)
Annual Retainer Fee, (ii) Committee Retainer Fee, and (iii) Meeting Fees.
Cash Director Fees shall not include expense reimbursements or any amounts
paid to a Participant.
	 
	2.7	 	Change in Control – shall be deemed to have occurred if:

 

 

	 	(i)	 	any “person” as such term is used in Sections 13(d) and 14(d)
of the Exchange Act (other than the Company, any trustee or other
fiduciary holding securities under any employee benefit plan of the
Company, or any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as
their ownership of Common Stock of the Company), is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the
Company’s then outstanding securities;
	 
	 	(ii)	 	during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board of Directors,
and any new director (other than a director designated by a person
who has entered into an agreement with the Company to effect a
transaction described in paragraph (i), (iii), or (iv) of this
section) whose election by the Board of Directors or nomination for
election by the Company’s stockholders was approved by a vote of at
least two-thirds of the directors then still in office who either
were directors at the beginning of the two-year period or whose
election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority of the Board
of Directors;
	 
	 	(iii)	 	a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the
voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation;
provided, however, that a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction)
in which no person acquires more than 25% of the combined voting
power of the Company’s then outstanding securities shall not
constitute a Change in Control of the Company; or
	 
	 	(iv)	 	the stockholders of the Company approve a plan of complete
liquidation of the Company or the consummation of the sale or
disposition by the Company of all or substantially all of the
Company’s assets other than (x) the sale or disposition of all or
substantially all of the assets of the Company to a person or
persons who beneficially own, directly or indirectly, at least 50%
or more of the combined voting power of the outstanding voting
securities of the Company at the time of the sale or (y) pursuant to
a spinoff type transaction, directly or indirectly, of such assets
to the stockholders of the Company.

	2.8	 	Code — the Internal Revenue Code of 1986, as amended from time to time.
	 
	2.9	 	Committee – the Compensation Committee or such other committee (or
subcommittee), if any, appointed by the Board of Directors to administer
the Plan. If the Board of Directors removes the then Committee for any reason and does not appoint a new

2

 

	 	 	Committee (or subcommittee) to administer the Plan, “Committee” means the
Board of Directors.
	 
	2.10	 	Committee Retainer Fee – means the retainer fee paid in cash for services
as a chair or member of any committee of the Board of Directors during a
Plan Year.
	 
	2.11	 	Common Stock — Common Stock of the Company, par value $.01 per share.
	 
	2.12	 	Company – Jacuzzi Brands, Inc., a Company organized under the laws of the
State of Delaware (or any successor).
	 
	2.13	 	Deemed Dividends – means the amount of dividends (whether stock or cash),
if any, which are declared on a share of Common Stock multiplied by the
number of Stock Units credited to a Participant’s Account.
	 
	2.14	 	Deferral Agreement — an agreement executed by a Participant setting forth
his or her election to defer receipt of his or her Director Fees in
accordance with the Plan, and an authorization for the Company to credit
such amount to a book-entry Account maintained by the Company on behalf of
the Participant. A Deferral Agreement shall contain such provisions,
consistent with the provisions of the Plan, as may be established from
time to time by the Company or Committee.
	 
	2.15	 	Director Fees – means Cash Director Fees and Equity Director Fees.
	 
	2.16	 	Distribution Date — means the date a Participant becomes entitled to a
distribution pursuant to an election in accordance with Section 6.4.
	 
	2.17	 	Effective Date – the effective date of the Plan as provided in Section
11.10.
	 
	2.18	 	Equity Director Fees –the retainer fees received by the Participant that
is paid in Common Stock for service on the Board of Directors as a
director during a Plan Year pursuant to Sections 7.1(b) and 7.3 of the
2004 Stock Incentive Plan. Equity Director Fees shall not include any
initial awards of Common Stock granted to a Participant under the 2004
Stock Incentive Plan or otherwise upon the date the Participant begins
service as a non-employee director for the Company, expense
reimbursements, amounts realized upon the exercise of a stock option,
restricted stock or any other amounts paid to a Participant.
	 
	2.19	 	Exchange Act — the Securities Exchange Act of 1934, as amended.
	 
	2.20	 	Fair Market Value – as applied to any date, the last sales price reported
for the Common Stock on the applicable date: (i) as reported by the
principal national securities exchange in the United States on which it is
then traded or The Nasdaq Stock Market, Inc.; or (ii) if not traded on any
such national securities exchange or The Nasdaq Stock Market, Inc., as
quoted on an automated quotation system sponsored by the National
Association of Securities Dealers, Inc., or if the Common Stock shall not
have been reported or quoted on such date, on the first day prior thereto
on which the Common Stock was reported or quoted; provided, that the
Committee may modify the definition of Fair Market Value to

3

 

	 	 	reflect any changes in the trading practices of any exchange on which the
Common Stock is listed or traded.
	 
	2.21	 	Financial Hardship — means (a) a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of
the Participant or of a dependent (as defined in Code Section 152(a)) of
the Participant, (b) loss of the Participant’s property due to casualty,
or (c) other similar extraordinary and unforeseeable circumstances arising
as a result of events beyond the control of the Participant, each as
determined to exist by the Committee.
	 
	2.22	 	Meeting Fees — means cash fees in cash paid for attendance at Board of
Director meetings or meetings of any committee thereof which the
Participant is a member.
	 
	2.23	 	Participant – a director of the Company who satisfies the eligibility
requirements under Article 5 of the Plan and elects to participate in the
Plan in accordance with its terms.
	 
	2.24	 	Plan — the Jacuzzi Brands, Inc. Non-Employee Director Deferred
Compensation Plan, as amended from time to time.
	 
	2.25	 	Plan Year – the fiscal year of the Company; the initial Plan Year shall
commence with the Company’s 2004 fiscal year.
	 
	2.26	 	Stock Unit – a unit of measurement equivalent to one share of Common
Stock but with none of the attendant rights of a stockholder of a share of
Common Stock, such as the right to vote, except that a Stock Unit shall
have the dividend equivalent right described in Article 8. The Fair Market
Value of a Stock Unit on any date shall be deemed to be the Fair Market
Value of the underlying shares of Common Stock on that date.
	 
	2.27	 	Subsidiary – means any “subsidiary corporation” within the meaning of
Section 424(f) of the Code. An entity shall be deemed a Subsidiary of the
Company only for such periods as the requisite ownership relationship is
maintained.
	 
	2.28	 	Termination of Directorship – means termination of a Participant’s
directorship with the Company for any reason whatsoever, including, but
not limited to, death, retirement, resignation, disability or dismissal
(with or without cause).
	 
	2.29	 	2004 Stock Incentive Plan – the Company’s 2004 Stock Incentive Plan (or
any successor), as amended from time to time.

Article 3 — Shares Reserved

     Shares of Common Stock that may be issued or used for reference purposes
under the Plan with respect to Stock Units are funded from shares of Common
Stock that are available for issuance under the 2004 Stock Incentive Plan. The
aggregate number of shares of Common Stock that may be issued or used for
reference purposes under the Plan with respect to Stock Units may not exceed
the maximum number of shares of Common Stock available for issuance

4

 

under the 2004 Stock Incentive Plan, subject to adjustment as provided in
Section 4.2 of the 2004 Stock Incentive Plan.

Article 4 — Administration

	4.1	 	The Plan shall be administered by the Committee. The Committee may
select an administrator or any other person to whom its duties and
responsibilities hereunder may be delegated. The Committee shall have
full power and authority, subject to the provisions of the Plan, to
promulgate such rules and regulations as it deems necessary for the proper
administration of the Plan, to interpret the provisions and supervise the
administration of the Plan, and to take all actions in connection
therewith or in relation thereto as it deems necessary or advisable. All
interpretations, determinations and decisions of the Committee shall be
made in its sole and absolute discretion based on the Plan document and
shall be final, conclusive and binding on all parties with respect to all
matters relating to the Plan.
	 
	4.2	 	The Committee may employ such legal counsel, consultants, brokers and
agents as it may deem desirable for the administration of the Plan and may
rely upon any opinion received from any such counsel or consultant and any
computation received from any such consultant, broker or agent. The
Committee may, in its sole discretion, designate an agent to administer
the Plan, keep records, send Account statements to Participants and to
perform other duties relating to the Plan, as the Committee may request
from time to time. The Committee may adopt, amend or repeal any
guidelines or requirements necessary for the delivery of the Common Stock.
	 
	4.3	 	The Company shall, to the fullest extent permitted by law, the
Certificate of Incorporation and By-laws of the Company and, to the extent
not covered by insurance, indemnify each director or employee of the
Company and its Subsidiaries (including the heirs, executors,
administrators and other personal representatives of such person) and each
member of the Committee against all expenses, costs, liabilities and
losses (including attorneys’ fees, judgments, fines, excise taxes or
penalties, and amounts paid or to be paid in settlement) actually and
reasonably incurred by such person in connection with any threatened,
pending or actual suit, action or proceeding (whether civil,
administrative or investigative in nature or otherwise) in which such
person may be involved by reason of the fact that he or she is or was
serving this Plan in any capacity at the request of the Company or a
Subsidiary, except in instances where any such person engages in willful
misconduct, a crime or fraud. Such right of indemnification shall include
the right to be paid by the Company for expenses incurred or reasonably
anticipated to be incurred in defending any such suit, action or
proceeding in advance of its disposition; provided, however, that the
payment of expenses in advance of the settlement or final disposition of a
suit, action or proceeding shall be made only upon delivery to the Company
of an undertaking by or on behalf of such person to repay all amounts so
advanced if it is ultimately determined that such person is not entitled
to be indemnified hereunder. Such indemnification shall be in addition to
any rights of indemnification the person may have as a director or
employee or under the Certificate of Incorporation of the Company or the
By-Laws of the Company.

5

 

	 	 	Expenses incurred by the Committee or the Board
of Directors in the engagement of any such counsel, consultant or agent
shall be paid by the Company.
	 
	4.4	 	Notwithstanding anything herein to the contrary, the administration
provisions provided in the 2004 Stock Incentive Plan shall control with
respect to any provision in the Plan that involves a Stock Unit or Common
Stock.

Article 5 — Eligibility

     Any director of the Company who is not an active employee of the Company
or any of its Subsidiaries shall be eligible to participate in the Plan.

Article 6 — Timing and Manner of Deferrals

	6.1	 	General
	 
	 	 	As of the applicable Award Date, Stock Units shall be credited to a
Participant’s Account on a book entry basis calculated in the manner
provided under Section 6.3.
	 
	6.2	 	Deferral Elections
	 
	 	 	No later than the last day of the prior Plan Year (September 27, 2003 in
the case of the initial Plan Year), Participants may voluntarily elect to
defer (i) all or a portion of their Cash Director Fees that would
otherwise be payable to a Participant during the following Plan Year, in
accordance with the Deferral Agreement; provided, that the amount of the
Cash Directors Fees elected to be deferred must be in increments of 25%,
and/or (ii) 100% of their Equity Director Fees that would otherwise be
payable to the Participant during the following Plan Year, as elected by
the Participant in a Deferral Agreement. If a Participant first becomes
eligible to participate in the Plan during a Plan Year, such Participant
may elect to participate in the Plan with respect to Director Fees that
would otherwise be payable during that Plan Year no later than 30 days
following the date such director first becomes a Participant.
	 
	 	 	Other than with respect to a Participant who first becomes eligible to
participate in the Plan during a Plan Year, Deferral Agreements must be
received by the Company no later than the last day of the Plan Year prior
to the Plan Year in which the Director Fees will be earned. With respect
to any Plan Year, a Deferral Agreement is irrevocable on and after the
date the Deferral Agreement must be submitted to the Company in
accordance with procedures established by the Committee, and is valid
solely for the Plan Year to which the election relates. If no new
Deferral Agreement is timely made or filed in accordance with procedures
established by the Committee with respect to any subsequent Plan Year,
Director Fees may not be deferred under the Plan for such Plan Year.
	 
	6.3	 	Election to Receive Stock Units in Lieu of Director Fees
	 
	 	 	If a Participant elects to defer all or a portion of his or her Cash
Director Fees in the form of Stock Units, the Company shall credit the
applicable number of Stock Units to each 

6

 

	 	 	account on each applicable Award Date in accordance with the
provisions of this Section 6.3.
	 
	 	 	If a Participant elects to defer all or a portion of his or her Annual
Retainer Fees in the form of Stock Units, the Company shall credit the
Participant’s Account with a number of Stock Units (in whole and
fractional Stock Units) determined by dividing (i) the amount of the
Participant’s Annual Retainer Fee that the Participant elects to defer in
the form of Stock Units in accordance with the Participant’s Deferral
Agreement by (ii) the Fair Market Value of a share of Common Stock on the
first business day of the Plan Year.
	 
	 	 	If a Participant elects to defer all or a portion of his or her Committee
Retainer Fees in the form of Stock Units, the Company shall credit the
Participant’s Account with a number of Stock Units (in whole and
fractional Stock Units) determined by dividing (i) the amount of the
Participant’s Committee Retainer Fee that the Participant elects to defer
in the form of Stock Units in accordance with the Participant’s Deferral
Agreement by (ii) the Fair Market Value of a share of Common Stock on the
first business day of the Plan Year.
	 
	 	 	If a Participant elects to defer all or a portion of his or her Meeting
Fees in the form of Stock Units, the Company shall credit the
Participant’s Account with a number of Stock Units (in whole and
fractional Stock Units) determined by dividing (i) the amount of the
Participant’s Meeting Fees that the Participant elects to defer in the
form of Stock Units in accordance with the Participant’s Deferral
Agreement by (ii) the Fair Market Value of a share of Common Stock on
each of the Applicable Award Date.
	 
	 	 	If a Participant elects to defer Equity Director Fees under the Plan, the
Participants Account shall be credited with a number of Stock Units in
accordance with Section 11(a)(ii) and (iii) of the 2004 Stock Incentive
Plan on the first business day of the Plan Year.
	 
	6.4	 	Election of Distribution Date
	 
	 	 	A Participant may elect to receive a distribution of his Account on a
fixed date in the future, or upon a Termination of Directorship, provided
that an initial election of the Participant’s Distribution Date shall not
be effective until the next Plan Year. Such election shall be made on a
Deferral Agreement provided to the Company in accordance with Section
6.2. If a Participant does not elect a Distribution Date, the
Distribution Date shall be deemed the Distribution Date elected on the
Participant’s most recent Deferral Agreement on which the Participant
made an election with respect to his or her Distribution Date. If a
Participant has not yet made an election as to his or her Distribution
Date, the Distribution Date shall be deemed the date on which a
Termination of Directorship occurs. A Participant’s election under this
Section 6.4 may differ from year to year. A Participant may amend
previously elected Distribution Dates at any time by providing notice to
the Company on such form as may be required by the Company, provided
that such amendments shall not be effective until the second anniversary
after the date such amendment is delivered to the Company.

7

 

	6.5	 	Election of Form of Distribution of Deferred Cash Director Fees.
	 
	 	 	Notwithstanding anything to the contrary, a Participant may elect to
receive installment payments of his or her Account that consists of Stock
Units as a result of the deferral of Cash Director Fees; provided, that a
Participant may elect only four (4) equal installments over a four (4)
year period, or two (2) equal installments over a two (2) year period.
Such election shall be made on a Deferral Agreement provided to the
Company in accordance with Section 6.2. If a Participant does not elect
installments under this Section 6.5, distributions of the Participant’s
Account that consists of Stock Units as a result of the deferral of Cash
Director Fees shall be made in accordance with the Participant’s most
recent Deferral Agreement on which an election was made with respect to
the form of distribution of the Participant’s Account. If a Participant
has not yet made an election as to form of distribution, his or her
Account that consists of Stock Units as a result of the deferral of Cash
Director Fees shall be distributed in the form of a lump sum payment. A
Participant’s election under this Section 6.5 may differ from year to
year. A Participant may amend any previously elected forms of payment at
any time by providing notice to the Company on such form as may be
required by the Company, provided that such amendment shall not be
effective until the second anniversary after the date such amendment is
delivered to the Company.

Article 7 — Vesting and Distribution

	7.1	 	Vesting
	 
	 	 	A Participant’s Account shall be fully vested at all times.
	 
	7.2	 	Distribution of Account
	 
	 	 	Except as otherwise provided in this Article and Article 10, any portion
of a Participant’s Account that consists of Stock Units as a result of
the deferral of Cash Director Fees shall be distributed to the
Participant (or, in the case of a Participant’s death, his or her
Beneficiary) as soon as practicable after the earliest to occur of: (i) a
Participant’s Distribution Date; or (ii) a Change in Control.
Notwithstanding the foregoing, to the extent a Participant has made an
election for installment payments under Section 6.5, any portion of a
Participant’s Account that consists of Stock Units as a result of the
deferral of Cash Director Fees shall be distributed to the Participant in
yearly installments, in accordance with the applicable election, if any,
made by a Participant in accordance with Section 6.5.
	 
	 	 	Except as otherwise provided in this Article and Article 10, any portion
of a Participant’s Account that consists of Stock Units as a result of
the deferral of Equity Director Fees shall be distributed to the
Participant (or, in the case of a Participant’s death, his or her
Beneficiary) as follows: (1) 50% shall be distributed as soon as
practicable after the Participant’s Distribution Date; and (2) 50% shall
be distributed one year thereafter.

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	 	 	Notwithstanding the provisions of this Section 7.2, the Participant’s
Account shall be distributed to the Participant in a lump-sum payment as
soon as practicable after a Change in Control.
	 
	 	 	The forgoing distribution provisions shall be limited by any legal
requirements affecting the timing of distributions, including but not
limited to, any that would affect the non-recognition of such deferrals
for income tax purposes.
	 
	 	 	A Participant’s Account shall be distributed in the form of Common Stock.
At the time of distribution fractional shares of Common Stock shall be
rounded-down for fractions less than one-half and rounded-up for
fractions equal to or greater than one half. No cash settlements shall
be made with respect to fractional shares eliminated by rounding.
	 
	7.3	 	Financial Hardship Distributions
	 
	 	 	In the event of Financial Hardship of the Participant, the Participant
may apply to the Committee for the distribution of all or any part of the
vested balance of his Account. The Committee shall consider the
circumstances of each such case and the best interest of the Participant
and his or her family and shall have the right, in its sole discretion,
if applicable, to allow such distribution, or, if applicable, to direct a
distribution of part of the amount requested or to refuse to allow any
distribution. In no event shall the aggregate amount of the distribution
exceed either the vested balance of the Participant’s Account or the
amount determined by the Committee to be necessary to alleviate the
Participant’s financial hardship (which financial hardship may include
any taxes due because of the distribution occurring because of this
Section), and that is not reasonably available from other resources of
the Participant. For purposes of this Section, the value of the
Participant’s Account shall be determined as of the date of the
distribution.

Article 8 — Dividends

     At such time or times as any dividends on Common Stock shall be
distributed to the Company’s stockholders, the Company shall credit to the
Participant’s Account the Deemed Dividends. Deemed Dividends so credited to
the Participant’s Account which are cash dividends shall be reinvested in Stock
Units, including fractional units, based on the Fair Market Value of such Stock
Units on the date the dividend is paid. Deemed Dividends that are paid in
stock shall be credited to the Participant’s Account in Stock Units, including
fractional units.

Article 9 — Designation of Beneficiary

     A Participant may designate one or more Beneficiaries to receive the
Participant’s benefits under the Plan in the event of his or her death. Such
designation, or any change therein, must be in writing in a form acceptable to
the Committee and shall be effective upon receipt by the Committee. If there
is no effective Beneficiary designation, the Participant’s Beneficiary shall be
the Participant’s estate. Upon the acceptance by the Committee of a new
Beneficiary designation form, all Beneficiary designations previously filed
shall be canceled. The Committee

9

 

shall be entitled to rely on the last
Beneficiary designation form filed by the Participant and accepted by the
Committee prior to his or her death.

Article 10 — Amendment or Termination of Plan

     The Company reserves the right to amend, terminate or freeze the Plan at
any time, by action of its Board of Directors (or a duly authorized committee
thereof) or the Committee, provided that no such action shall adversely affect
a Participant’s rights under the Plan with respect to Director Fees that have
been deferred before the date of such action. Upon termination of the Plan, a
Participant’s Account shall be distributed in accordance with Article 7 of the
Plan, or as soon as practicable following the termination of the Plan, at the
Company’s election. Upon freezing of the Plan, all Director Fees deferred
under the Plan prior to freezing shall continue to be held under the Plan until
the distribution date as provided in Article 7 unless the Board of Directors
(or a duly authorized committee thereof) or the Committee determines to
distribute such deferrals at an earlier date.

     Notwithstanding the foregoing, the 2004 Stock Incentive Plan may only be
amended to the extent permitted under the terms of the 2004 Stock Incentive
Plan.

Article 11 — Miscellaneous Provisions

	11.1	 	No Distribution; Compliance with Legal Requirements
	 
	 	 	The Committee may require each person acquiring Stock Units or shares of
Common Stock under the Plan to represent to, and agree with, the Company
in writing that such person is acquiring the Stock Units and shares
without a view to distribution thereof. No shares of Common Stock shall
be issued until all applicable securities law and other legal and stock
exchange requirements have been satisfied. The Committee may require the
placing of such stop-orders and restrictive legends on certificates for
Common Stock as it deems appropriate.
	 
	11.2	 	Notices; Delivery of Stock Certificates
	 
	 	 	Any notice required or permitted to be given by the Company or the
Committee pursuant to the Plan shall be deemed given when personally
delivered by hand, a nationally recognized overnight courier or deposited
in the United States mail, registered or certified, postage prepaid,
addressed to the Participant at the last address shown for the
Participant on the records of the Company or such other address that the
Participant shall designate in writing to the Company. Delivery of stock
certificates to persons entitled to receive them under the Plan shall be
deemed effected for all purposes when the Company or a share transfer
agent of the Company shall have deposited such certificates in the United
States mail or personally delivered such certificates by hand or by a
nationally recognized overnight courier, addressed to such person at
his/her last known address on file with the Company or such other address
that may be designated in writing to the Company.
	 
	11.3	 	Nontransferability of Rights

10

 

	 	 	Stock Units are not transferable other than by will or by the laws of
descent and distribution. No Stock Unit or other interest under the Plan
shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, garnishment, execution, levy
or charge, and any attempt by a Participant or any Beneficiary under
the Plan to do so shall be void. No interest under the Plan shall in any
manner be liable for or subject to the debts, contracts, liabilities,
engagements or torts of a Participant or Beneficiary entitled thereto.
	 
	11.4	 	Obligations Unfunded and Unsecured
	 
	 	 	The Plan shall at all times be entirely unfunded, and no provision shall
at any time be made with respect to segregating assets of the Company or
any Subsidiary (including Common Stock) for payment of any amounts or
issuance of any shares of Common Stock hereunder. No Participant or
other person shall own any interest in any particular assets of the
Company or any Subsidiary (including Common Stock) by reason of the right
to receive payment under the Plan, and any Participant or other person
shall have only the rights of a general unsecured creditor of the Company
with respect to any rights under the Plan. Nothing contained in this
Plan and no action taken pursuant to the provisions of this Plan shall
create or be construed to create a trust of any kind, or a fiduciary
relationship amongst the Company, any Subsidiary, the Committee, and the
Participants, their designated Beneficiaries or any other person. If the
Company decides to establish any accrued reserve on its books against the
future expense of benefits payable hereunder, or if the Company
establishes a rabbi trust under this Plan, such reserve or trust shall
not under any circumstances be deemed to be an asset of the Plan.
	 
	11.5	 	Governing Law
	 
	 	 	Except to the extent preempted by the Code, this Plan shall be governed,
construed, administered and regulated in accordance with the laws of
Delaware. In the event any provision of this Plan shall be determined to
be illegal or invalid for any reason, the other provisions shall continue
in full force and effect as if such illegal or invalid provision had
never been included herein.
	 
	11.6	 	No Directorship Rights
	 
	 	 	The establishment and operation of this Plan shall not confer any legal
rights upon any Participant or other person for a continuation of
directorship, nor shall it interfere with the rights of the Company or
Subsidiary to terminate a Participant’s directorship and to treat him or
her without regard to the effect which that treatment might have upon him
or her as a Participant or potential Participant under the Plan.
	 
	11.7	 	Severability of Provisions
	 
	 	 	If any provision of the Plan shall be held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provisions
hereof, and the Plan shall be construed and enforced as if such
provisions had not been included.

11

 

	 
	11.8	 	Construction
	 
	 	 	The use of a masculine pronoun shall include the feminine, and the
singular form shall include the plural form, unless the context clearly
indicates otherwise. The headings and captions herein are provided for reference and convenience only, shall
not be considered part of the Plan, and shall not be used in the
construction of the Plan.
	 
	11.9	 	Assignment
	 
	 	 	The Plan shall be binding upon and inure to the benefit of the Company,
its successors and assigns and the Participants and their heirs,
executors, administrators and legal representatives. In the event that
the Company sells all or substantially all of the assets of its business
and the acquiror of such assets assumes the obligations hereunder, the
Company shall be released from any liability imposed herein and shall
have no obligation to provide any benefits payable hereunder.
	 
	11.10	 	Effective Date of Plan
	 
	 	 	The Plan was originally adopted, effective as of June 5, 2003. This
Amended and Restated Plan is effective October 1, 2004.

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