ENDO PHARMACEUTICALS HOLDINGS INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
(Effective January 1, 2008)
ARTICLE I
INTRODUCTION
1.1. Purpose. The purpose of the Plan is to promote the interests of the Company and the stockholders of the Company by providing Executives the opportunity to defer incentive compensation and restricted stock units.
1.2. Effective Date. The effective date of the Plan is January 1, 2008.
1.3 Type of Plan. The Plan is intended to be an unfunded plan of non-qualified deferred compensation established for a select group of management or highly compensated Employees that meets the requirements of Code Section 409A. In the event that any provision of the Plan is inconsistent with Code Section 409A, the applicable provisions of Code Section 409A shall be deemed to automatically supersede such inconsistent provision and the Plan shall be administered to comply with Code Section 409A.
ARTICLE II
DEFINITIONS
Where used in the Plan, the following initially capitalized words and terms shall have the meanings specified below, unless the context clearly indicates to the contrary:
2.1. “Account” means the recordkeeping account established by the Administrator for each Participant to which Deferrable Compensation, and earnings thereon, are credited in accordance with Article VI of the Plan. An Account may consist of one or more sub-accounts established by the Administrator, as deemed necessary for efficient operation of the Plan.
2.2. “Administrator” means the Committee or such individuals or entity designated by the Committee to administer the Plan.
2.3. “Affiliate” means an entity, more than fifty percent (50%) of the total voting power of which is owned, directly or indirectly, by the Company.
2.4. “Base Salary” means the annual rate of base salary paid by the Employer or an Affiliate to a Participant, determined before reduction for compensation deferred pursuant to this Plan or any other plan of deferred compensation maintained by the Employer or an Affiliate, including but not limited to any such plan maintained in accordance with Code Section 401(k), 125, or 132(f), as determined by the Administrator.
2.5. “Beneficiary” means such person(s) or legal entity that is designated by a Participant under Section 8.9 to receive benefits hereunder after such Participant’s death.
2.6. “Board” means the board of directors of the Company.
2.7. “Change in Control” means and shall be deemed to occur upon a Change in Ownership, a Change in Effective Control, or a Change in Ownership of Substantial Assets. For this purpose:
(i) A “Change in Ownership” means that a person or group acquires more than fifty percent (50%) of the aggregate fair market value or voting power of the capital stock of the Company, including for this purpose capital stock previously acquired by such person or group; provided, however, that a Change in Ownership shall not be deemed to occur hereunder if, at the time of any such acquisition, such person or group owns more than fifty percent (50%) of the aggregate fair market value or voting power of the Company’s capital stock.
(ii) A “Change in Effective Control” means that (a) a person or group acquires (or has acquired during the immediately preceding twelve (12)-month period
ending on the date of the most recent acquisition by such person or group) ownership of the capital stock of the Company possessing thirty percent (30%) or more of the total voting power of the Company, or (b) a majority of the members of the Board of the Company is replaced during any twelve (12)-month period, whether by appointment or election, without endorsement by a majority of the members of the Board prior to the date of such appointment or election.
(iii) A “Change in Ownership of Substantial Assets” means that any person or group acquires (or has acquired during the immediately preceding twelve (12)-month period ending on the date of the most recent acquisition) assets of the Company with an aggregate gross fair market value of not less than forty percent (40%) of the aggregate gross fair market value of the assets of the Company immediately prior to such acquisition. For this purpose, gross fair market value shall mean the fair value of the affected assets determined without regard to any liabilities associated with such assets.
The Board shall determine whether a Change in Control has occurred hereunder in a manner consistent with the provisions of Code Section 409A and the regulations and applicable guidance promulgated thereunder.
2.8. “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any regulations and applicable guidance promulgated thereunder. References in the Plan to specific sections of the Code shall be deemed to include any successor provisions thereto.
2.9. “Committee” means the committee appointed by the Board, which shall consist of two or more persons, each of whom, unless otherwise determined by the Board, is an “outside director” within the meaning of Code Section 162(m) and a “non-employee director” within the meaning of Rule 16b-3.
2.10. “Company” means Endo Pharmaceuticals Holdings Inc., a Delaware corporation.
2.11. “Company Stock” means the common stock of the Company, par value $0.1 per share.
2.12. “Deferrable Compensation” means fifty percent (50%) of a Participant’s Incentive Compensation and 100% of a Participant’s Restricted Stock Units that would be payable to a Participant during a Plan Year but for the Participant’s election to defer such Deferrable Compensation on his or her Election Form in accordance with Article IV of this Plan. Deferrable Compensation shall not include any compensation payable to the Participant that is designated by the Administrator as Base Salary.
2.13. “Deferral Period” means the period of deferral elected by the Participant on his or her Election Form for the payment of his or her Account, which period shall be a period of whole years that is no less than two (2) years and no more than ten (10) years measured from January 1 of the Plan Year in which the Incentive Compensation otherwise would have been paid or the Restricted Stock Unit granted but for the deferral
2.14. “Election Form” means such document(s) or form(s), which may be electronic, as prescribed and made available from time to time by the Administrator, whereby an Eligible Employee enrolls in the Plan as a Participant , elects to defer Deferrable Compensation pursuant to Article IV of this Plan, and/or makes investment elections pursuant to Section 6.2 of the Plan.
2.15. “Eligible Employee” means an Employee designated by the Committee as eligible to participate in the Plan. Initially, Eligible Employees are limited to Employees whose total annual rate of Base Salary and target incentive compensation at the time of the deferral election exceed the indexed limit under Code Section 401(a)(17), as determined by the Committee. Notwithstanding the foregoing, the Committee, in its sole discretion, may establish such other eligibility criteria as it deems desirable from time to time.
2.16. “Employee” means a common law employee of the Employer.
2.17. “Employer” means the Company, and any Affiliate that has been approved by the Board as a participating Employer under the Plan.
2.18 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
2.19. “Fair Market Value” means (determined as of the applicable distribution or valuation date hereunder) (i) the closing sales price per share of Company Stock on the national securities exchange on which such stock is principally traded on the last preceding date on which there was a sale of such stock on such exchange, or (ii) if the shares of Company Stock are not listed or admitted to trading on any such exchange, the closing price as reported by the NASDAQ Stock Market for the last preceding date on which there was a sale of such stock on such exchange, or (iii) if the shares of Company Stock are not then listed on a national securities exchange or traded in an over-the-counter market or the value of such shares is not otherwise determinable, such value as determined by the Committee in good faith upon the advice of a qualified valuation expert.
2.20. “Incentive Compensation” means a bonus or incentive award provided by the Employer for a calendar year that is not part of a Participant’s Base Salary and that qualifies as Performance-Based Compensation.
2.21. “Installment Payment” means a series of substantially equal annual payments of the Participant’s Account paid over a period ranging from two (2) whole years to ten (10) whole years, as elected by the Participant, commencing as of the applicable payment date under the plan. For purposes of Section 4.6, an Installment Payment is treated as a single payment.
2.22. “Leave of Absence” means a military, sick, or other bona fide leave of absence provided that such leave does not exceed six (6) months, or if longer, continues so long as the Participant has a right to reemployment with the Employer and there is a reasonable expectation that the Participant will return to such employment. A Leave of Absence is deemed to terminate on the first date immediately following the end of the six-month period, or the date on with the Participant no longer has any right or expectation to return to employment, whichever is later.
2.23. “Lump Sum Payment” means a single sum distribution of the entire value of a Participant’s Account.
2.24. “Participant” means any Eligible Employee who defers Deferrable Compensation to this Plan by filing an Election Form and for whom an Account is maintained under the Plan.
2.25. “Payment Date” means January 1 of the calendar year next following expiration of the Deferral Period elected by the Participant.
2.26. “Performance-Based Compensation” means performance-based compensation within the meaning Section 409A of the Code that is paid solely on account of the attainment of one or more objective Employer or Participant performance goals established in writing by the Committee not later than ninety (90) days after the commencement of the twelve (12)-month period of service to which it relates and that is not readily ascertainable within the meaning of Code Section 409A.
2.27. “Plan” means the Endo Pharmaceuticals Holdings Inc. Executive Deferred Compensation Plan.
2.28. “Plan Year” means the calendar year.
2.29. “Restricted Stock Unit” means a unit representing a share of Company Stock that has been granted to a Participant pursuant to the terms of a separate agreement or plan maintained by the Company or an Affiliate, and that is subject to a vesting schedule or other substantial risk of forfeiture.
2.30 “Specified Employee” means a Participant who is determined to be a “specified employee” within the meaning of Code Section 409A with respect to a Termination of Employment occurring in any twelve (12)-month period commencing on April 1 based on the Participant’s compensation with the Employer, as defined in Code Section 416(i)(1)(D), and his or her status at the end of the immediately preceding Plan Year. For purposes of the determining whether a Participant is classified as a Specified Employee, compensation from a nonresident alien’s gross income under Section 1.415(c)-2(g)(5)(ii) on account of the location of the services or the identify of an Employer that is not effectively connected with the conduct of a trade or business within the United States shall be excluded.
2.31 “Termination of Employment” means the date the Participant ceases to be an Employee on account of a voluntary or involuntary separation from service with the Company and all Affiliates, within the meaning of Code Section 409A, for any reason other than death. Notwithstanding the foregoing, a Termination of Employment shall not be deemed to occur so long as the Participant is on a Leave of Absence or the Participant continues to perform services for the Company or an Affiliate at a level in excess of 20% of the level of services performed by the Participant during the 36-month period (or the Employee’s full period of service if the Employee has worked less than 36 months) immediately preceding the date of separation from service.
2.32 “Unforeseeable Emergency” means with respect to a Participant, his or her spouse, dependents (as defined in Code Section 152, without regard to Sections 152(b)(1), (b)(2), and (d)(1)(B)) or Beneficiary, a non-reimbursable severe financial hardship attributable to (i) a sudden and unexpected illness or accident or (ii) funeral expenses, and also means with respect to the Participant (i) a property loss due to casualty that is not otherwise covered by insurance, (ii) imminent foreclosure or eviction from the Participant’s primary residence, or (iii) a similar extraordinary and unforeseeable circumstance beyond the control of the Participant, as determined by the Administrator. For purposes of this Plan, the purchase of a home and the payment of college tuition are not Unforeseeable Emergencies.
ARTICLE III
PARTICIPATION BY ELIGIBLE EMPLOYEES
3.1. Participation. Participation in this Plan is voluntary and is limited to Eligible Employees who file Election Forms in accordance with Article IV.
3.2. Cessation of Participation. Once an Employee is designated by the Committee as an Eligible Employee, such Eligible Employee shall remain eligible to file deferral elections under the Plan until the earlier of (i) the date the Committee informs the Eligible Employee that he or she is no longer eligible to participate in the Plan, i.e., “Ineligible Status,” or (ii) the date such Eligible Employee incurs a Termination of Employment.
3.3. Ineligible Status. If the Committee determines that a Participant ceases to qualify as an Eligible Employee, effective as of the date of such determination, said ineligible Participant shall no longer be eligible to file deferral elections under the Plan. The Account of an ineligible Participant shall be paid in accordance with Sections 5.1 and 5.2 of the Plan, except to the extent all or part of such Account is eligible for distribution of accelerated payment as permitted in Sections 5.3 and 5.4.
ARTICLE IV
PARTICIPANT DEFERRALS
4.1. Deferral Elections – General. A Participant’s deferral election for a Plan Year is irrevocable for such Plan Year; except to the extent a cessation of deferrals hereunder is required under Section 4.5. Amounts deferred under the Plan shall not be distributed to a Participant except as expressly provided in Article V or as otherwise permitted under Code Section 409A. A deferral election hereunder shall be made on an Election Form and comply with the applicable requirements of this Article IV. A Participant’s initial deferral election under the Plan shall designate: (i) the amount of Deferrable Compensation that is being deferred, (ii) the time of the distribution (as permitted in Section 5.1(a)), and (iii) the form of distribution (as permitted in Section 5.2(a)). Once effective under the Plan, a Participant’s deferral election shall remain in effect under the Plan until it is terminated by operation of the Plan or changed by the Participant in accordance with Section 4.6 herein. The Administrator may establish procedures for deferral elections as it deems necessary to comply with the requirements of this Article IV and Code Section 409A.
4.2. First Year of Eligibility. Notwithstanding the timing requirements of Sections 4.3 and 4.4, an Eligible Employee may elect to defer Deferrable Compensation by completing and executing an Election Form that specifies the amount or percentage of compensation to be deferred within the thirty (30) day period immediately following the date he or she first becomes an Eligible Employee, provided, that the compensation deferred relates to services performed after the date of such election.
4.3. Deferral of Incentive Compensation. An Eligible Employee may elect to defer Deferrable Compensation that is Incentive Compensation by completing and executing an Election Form that specifies the amount or percentage of Incentive Compensation to be deferred and filing it with the Administrator before expiration of the election period establish by the Administrator, which period shall end no later than June 30 of the calendar year during which the Incentive Compensation is earned, provided that (i) as of the date of such deferral election the Eligible Employee has performed services continuously from the later of the beginning of said calendar year or the date the performance criteria for said calendar year are established by the Committee.
4.4. Deferral of Restricted Stock Units. An Eligible Employee may elect to defer Restricted Stock Units to the Plan by completing and executing an Election Form that specifies the amount or percentage of Restricted Stock Units to be deferred and filing it with the Administrator on or before expiration of the election period established by the Administrator, which period shall (i) for purposes of the Plan Year beginning January 1, 2008, end no later than December 31, 2007, (ii) for purposes of the Plan Year beginning January 1, 2009, end no later than December 31, 2008, and (iii) for all subsequent Plan Years end no later than December 31 of the calendar year ending before the Plan Year that precedes the Plan Year in which such Restricted Stock Units are granted.
4.5. Cessation of Deferral Elections. To the extent provided for under Code Section 409A or under the terms of a Code Section 401(k) plan maintained by the Employer, a Participant’s deferral election(s) in effect under the Plan for a Plan Year in which a Participant is granted an Unforeseeable Emergency distribution in accordance with Section 5.3(b) hereof or a hardship distribution under such Code Section 401(k) plan may be terminated by the Administrator, effective as soon as practicable following the grant of such hardship or emergency distribution. If a Participant’s deferral elections under the Plan are terminated in accordance with the foregoing sentence, such Participant shall be ineligible to make deferrals of compensation to the Plan, and all other plans maintained by the Company or an Affiliate, for the six (6) month period following his or her receipt of the hardship or emergency distribution. Subject to the foregoing six-month limitation, the Participant may make new deferral elections for Deferrable Compensation payable in subsequent Plan Years in accordance with this Article IV.
4.6. Changes to Deferral Elections. A Participant shall be permitted to elect to change the form of payment or Deferral Period relating to the distribution of his or her Account to the extent permitted by the Administrator and in accordance with the requirements of Code Section 409A(a)(4)(C), including the requirements that such redeferral election (a) may not take effect until at least twelve (12) months after such redeferral election is filed with the Administrator; (b) must result in the first distribution subject to the redeferral election being made at least five (5) years after the Payment Date relating to the previously elected Deferral Period; and (c) must be filed with the Administrator at least twelve (12) months before the first scheduled Payment Date under the previous Deferral Period.
ARTICLE V
DISTRIBUTIONS
5.1. Time of Payment.
a. Except as otherwise provided under the Plan, a Participant’s Account shall be paid on the earlier of the Payment Date relating to the Deferral Period elected by the Participant or upon Termination of Employment, as specified by the Participant on his or her Election Form.
b. In the absence of Participant’s election as to the time of payment, as permitted under subsection a, above, a Participant’s Account shall be distributed upon Termination of Employment.
c. For purposes of Sections 5.1(a) and (b), a payment upon Termination of Employment shall be made on the first (1st) day of the calendar month next following the date of the Participant’s Termination of Employment, provided that with respect to a Specified Employee, a payment upon Termination of Employment shall not be made earlier than the date that is at least six (6) months after the date of such Specified Employee’s Termination of Employment.
5.2. Form of Payment.
a. Except as otherwise provided under the Plan, a Participant’s Account shall be paid as a Lump Sum Payment or an Installment Payment, as elected by the Participant on his or her Election Form.
b. In the absence of Participant’s election as to the form of payment, as permitted under subsection a, above, a Participant’s Account shall be distributed in the form of a Lump Sum Payment.
5.3. Permissible Distributions. No distribution under the Plan shall be permitted except as set forth in this Section 5.3 or as otherwise permitted under the Plan and Code Section 409A(a)(2).
a. Change in Control. Notwithstanding any provision of the Plan or Participant Election Form to the contrary, a Participant who incurs a Termination of Employment within the two (2) year period immediately following a Change in Control shall receive a Lump Sum Payment of his or her Account within thirty (30) days following the date of such Termination of Employment.
b. Unforeseeable Emergency. If a Participant experiences an Unforeseeable Emergency, such Participant shall be permitted to withdraw all or a portion of his or her Account in the form of an immediate single-sum payment, subject to the limitations set forth below:
(i) A request for withdrawal shall be made, in writing, and shall set forth the circumstances surrounding the Unforeseeable Emergency. As a condition of and part of such request, the Participant shall provide to the Committee his or her written representation that (A) the hardship cannot be relieved by insurance or other reimbursement reasonably available to the Participant, (B) the hardship can only be relieved by liquidation of the Participant’s assets and any such liquidation would itself result in severe damage or injury to the Participant, (C) the Participant has no reasonable borrowing capacity to relieve the hardship, and (D) the hardship cannot be relieved by cessation of the Participant’s deferrals under the Plan. The Committee shall be entitled to request such additional information as may be reasonably required to determine whether an Unforeseeable Emergency exists and the amount of the hardship and to establish additional conditions precedent to the review or granting of a request for a withdrawal on account of an Unforeseeable Emergency.
(ii) If the Committee determines that an Unforeseeable Emergency exists, the Committee shall authorize the immediate distribution of the amount required to meet the financial need created by such Unforeseeable Emergency, including any taxes payable on such amount, and, if required, the cessation of the Participant’s deferrals to the Plan as permitted in Section 4.5.
c. Death Distribution. Notwithstanding any provision of the Plan or Participant Election Form to the contrary, in the event of a Participant’s death before the complete distribution of his or her Account, the distribution of such Participant’s Account shall be made in a Lump Sum Payment to the Participant’s Beneficiary within sixty (60) days after the date of death.
5.4 Permissible Acceleration of Payments. No acceleration of time or schedule of payments under the Plan shall be permitted except as set forth in this Section 5.4 or as otherwise permitted under the Plan and Code Section 409A(a)(3).
a. Right of Offset. If a Participant is indebted to the Employer, then the Administrator, in its discretion, may accelerate a payment hereunder or withhold the amount of such indebtedness from any distribution to be made to the Participant, his or her Beneficiary or both, provided that (i) such debt was incurred in the ordinary course of the employment relationship between the Employer and the Participant, (ii) the entire amount of reduction for a Plan Year does not exceed $5,000, and (iii) the reduction is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant
b. Distribution for Taxes. The Plan may accelerate payment of all or part of a Participant’s Account to pay or withhold state, local, or foreign tax obligations; taxes imposed under the Federal Insurance Contributions Act or the Railroad Retirement Act; and any related federal income tax thereon, arising from a Participant’s participation in the Plan. Such payment of withholding must be limited to the amount necessary to fulfill such tax obligation.
c. Small Payment. Notwithstanding any provision of the Plan to the contrary, if the total value of a Participant’s Account or death benefit payable hereunder is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), and the Participant is not entitled to a benefit from any other plan that is required to be aggregated with this Plan pursuant to Treasury Regulation Section 1.409A-1(c)(2), the Administrator may distribute such amount to the Participant or Beneficiary in the form of a Lump Sum Payment.
d. Income Inclusion under 409A. Notwithstanding any provision of the Plan to the contrary, in the event that the plan fails to meet the requirements of Code Section 409A, the Administrator may distribute to Participants the portion of their Accounts that is required to be included in income as a result of such failure.
5.5. Permissible Delay of Payment. The Administrator may delay payment to a date after the designated payment date pursuant to any of the following circumstances, provided that payments to similarly situated Participants are made on a reasonably consistent basis.
a. Payments subject to Section 162(m). All scheduled payments to a Participant may be delayed beyond the applicable distribution date under Section 5.1 herein to the extent that the Employer reasonably anticipates that if all or a portion of a payment were made as scheduled, the Company or Employer’s deduction with respect to such payment would not be permitted due to the application of Code Section 162(m). Any payment that is delayed pursuant to this Section 5.5(a), must be made either during the first calendar year in which the Employer reasonably anticipates, or should reasonably anticipate, that if the payment is made during such year, deduction of such payment will not be barred by application of Code Section 162(m), or during the period beginning with the date of the Participant’s Termination of Employment and ending on the later of the last day of the taxable year of the Employer year in which Termination of Employment occurs or the fifteenth (15th) day of the third (3rd) month following the Termination of Employment.
b. Payments that would violate federal securities laws or other applicable law. A payment may be delayed where the Administrator reasonably anticipates that the making of the payment will violate federal securities laws or other applicable law, provided that the payment is made at the earliest date at which the Administrator reasonably anticipates that the making of the payment will not cause such violation. For purposes of this Section 5.5(b), the making of a payment that would cause inclusion in gross income or the application of any penalty provision or other provision of the Code is not treated as a violation of applicable law.
5.6 Payment Deemed Timely. A payment shall be treated as made upon the date specified under the Plan under the following circumstances:
a. If the payment is made at such date or a later date within the same calendar year or, if later, by the fifteenth (15th) day of the third calendar month following the date specified under the Plan.
b. If calculation of the amount of the payment is not administratively practicable due to events “beyond the control” of the Participant, or the Participant’s Beneficiary (as such phrase is defined under Code Section 409A), the payment will be treated as made upon the date specified under the Plan if the payment is made during the first calendar year in which the calculation of the amount of the payment is administratively practicable.
c. If the Employer fails to make a payment, in whole or in part, as of the date specified under the Plan, either intentionally or unintentionally, the payment will be treated as made upon the date specified under the Plan if (i) the Participant accepts the portion (if any) of the payment that the Employer is willing to make (unless such acceptance will result in a relinquishment of the claim to all or part of the remaining amount), (ii) if the Participant files claims pursuant to Sections 8.6 and 8.7 herein to collect the unpaid portion of the payment, and (iii) any further payment (including payment of a lesser amount that satisfies the Employer’s obligation to make the entire payment) is made no later than the end of the first calendar year in which the Employer and the Participant enter into a legally binding settlement of such dispute, the Employer concedes that the amount is payable, or the Employer is required to make such payment pursuant to a final and nonappealable judgment or other binding decision.
5.7. Valuation of Distributions. All distributions under this Plan shall be based upon a daily valuation of the Participant’s Account or, where applicable, the Fair Market Value of the shares of Company Stock that relate to the Restricted Stock Units deferred under the Participant’s Account, as determined by the Administrator.
ARTICLE VI
ACCOUNTS
6.1. Account. The Administrator shall establish and maintain, or cause to be established and maintained, a separate Account for each Participant hereunder who executes an election pursuant to Article IV. Each such Participant’s Deferrable Compensation deferred pursuant to a Election Form under Article IV shall be separately accounted for and credited with earnings or dividends, as applicable, for recordkeeping purposes only, to his or her Account. A Participant’s Account shall be solely for the purposes of measuring the amounts to be paid under the Plan. Except as provided in Article VII, the Company shall not be required to fund or secure a Participant’s Account in any way, the Company’s obligation to Participants hereunder being purely contractual.
6.2. Crediting of Earnings on Non-Stock Compensation. Except as provided in Section 6.3, a Participant may hypothetically invest his Account in one or more investment alternatives made available by the Committee, and earnings or losses thereon shall be credited to the Participant’s Account in accordance with the valuation procedures under such investment alternatives. The Participant shall make his or her investment elections, and changes thereto, on an Election Form in accordance with procedures established by the Administrator. Unless the Committee determines otherwise, the investment alternatives available under the Plan shall mirror the alternatives that are made available under the Code Section 401(k) plan sponsored by the Company.
6.3. Crediting of Earnings on Restricted Stock Units. The portion of a Participant’s Account attributable to Restricted Stock Units shall be deemed invested solely in stock equivalent units of Company Stock, shall be denominated in numbers of stock units, and shall be valued at any time as the stock equivalent units are credited to such Account multiplied by the then-Fair Market Value of the Company Stock. Whenever a dividend is declared and payable on Company Stock, the number of such stock equivalent units in the Participant’s Account shall be increased by the following calculations:
(i) the number of units in the Participant’s Account multiplied by any cash dividend declared by the Company on a share of Company Stock, divided by the Fair Market Value determined as of the related dividend payment date; and/or
(ii) the number of units in the Participant’s Account on the related dividend payment date multiplied by any stock dividend declared by the Company on a share of Company Stock.
In the event of any change in the number or kind of outstanding shares of Company Stock, including a stock split or splits (other than a stock dividend as provided above), an appropriate adjustment shall be made in the number of units credited to the Participant’s Account.
6.4 Statement of Account. As soon as practicable after the end of each Plan Year (and at such additional times as the Administrator may determine), the Administrator shall furnish each Participant with a statement of the balance credited to the Participant’s Account.
6.5. Vesting. A Participant is always one hundred percent (100%) vested in his or her Account.
(i) Such termination and liquidation does not occur proximate to a downturn in the financial health of the Company or the Affiliate, as applicable;
(ii) To the extent the same Participant had deferrals of thereunder, all Aggregated Plans are likewise terminated and liquidated;
(iii) No payments in liquidation of the Plan are made within twelve (12) months of the date the irrevocable action is taken to terminate and liquidate the Plan, other than payments that would be payable under the terms of the Plan if the action to terminate and liquidate the Plan had not occurred;
(iv) All payments are made within twenty-four (24) months of the date the irrevocable action is taken to terminate and liquidate the Plan; and
(v) The Company and Affiliate, as applicable, does not adopt a new plan that would be aggregated with the Plan if the Participant participated in both plans, at any time within three years following the date the irrevocable action is taken to terminate and liquidate the Plan.
d. Any other termination and liquidation event that is permissible under Code Section 409A.
Approved and adopted by the Board of Directors this 13th day of December, 2007.
