Exhibit 10.8
AVX CORPORATION
DEFERRED COMPENSATION PLAN
FOR ELIGIBLE BOARD MEMBERS
EFFECTIVE AS OF JANUARY 1, 1997
1. Purpose. The purpose of the Plan is to provide
Eligible Board Members of AVX Corporation with an opportunity to
defer payment of certain portions of their compensation, at their
election, in accordance with the provisions hereof.
2. Definitions. As used herein, the following terms shall have the
following meanings:
"Account" shall mean the Account established for a Participant pursuant to
Section 4.
"Beneficiary" shall mean the person or persons designated
by a Participant in accordance with Section 7 to receive any amount, or any
common stock, payable under the Plan by reason of the Eligible Board Member's
death.
"Board of Directors" shall mean the Board of Directors of the Corporation.
"Committee" shall mean the persons appointed the Board of
Directors to administer the Plan in accordance with Section 10.
"Common Stock" shall mean the common stock which the Corporation is currently
authorized to issue or may in the future be authorized to
issue (as long as the Common Stock varies from that currently authorized,
if at all, only in amount of par value).
"Corporation" shall mean AVX Corporation, a Delaware corporation.
"Eligible Board Member" shall mean any individual who is a member of the
Board of Directors and who is entitled to receive compensation for
services rendered in such capacity other than an individual who is also an
employee of the Corporation, its parent, any subsidiary or any affiliate of
the Corporation.
"Eligible Compensation" shall mean, with respect to any Eligible Board
Member for any Plan Year, all fees payable to such Eligible Board Member
during such year for attendance at meetings of the Board of Directors or
committees thereof, and all fees payable to such Eligible Board Member
during such year by way of retainer for service as a member or chairman of
the Board of Directors or committees thereof regardless of the number of
meetings attended.
"Fair Market Value" means the average of the high and the low sales prices of
a share of Common Stock on any specified date (or, if not a trading
day, on the last preceding trading day) as reported on the New York Stock
Exchange Composite Transactions Tape or, if not listed on the New York Stock
Exchange, the principal stock exchange or the NASDAQ National Market on which
the Common Stock is then listed or traded;
provided, however, that if the Common Stock is not so
listed or traded then the Fair
Market Value shall be determined in good faith by the
Board of Directors.
"Participant" shall mean any Eligible Board Member who has
made an election under
Section 3 to defer any portion of his or her Eligible
Compensation for any Plan Year.
"Phantom Share Unit" shall mean a unit of measurement
equivalent to one share of
Common Stock, with none of the attendant rights of a
holder of such share, including,
without limitation, the right to vote such share and the
right to receive dividends thereon, except to the extent
otherwise specifically provided herein.
"Plan" shall mean the AVX Corporation Deferred
Compensation Plan for Eligible Board
Members as set forth herein and as amended from
time to time.
"Plan Year" shall mean the calendar year.
3. Deferral Elections. With respect to each Plan
Year beginning on or after January 1,
1997, an Eligible Board Member may elect to have
payment of any part or all of his or
her Eligible Compensation for such year deferred,
and to have payment of such portion
made under the terms of this Plan. Any such
election shall be made in accordance with
the following rules:
(a) A deferral election shall be made
in writing, on a form provided by the
Committee for such purpose.
(b) In the election form, the Eligible
Board Member shall (i) specify, by percentage
(which must be an even multiple of [5]%), the portion of his or
her Eligible
Compensation that the Eligible Board Member
wishes to defer hereunder (the amounts
so deferred are hereinafter referred to as the
Eligible Board Member's "Deferred
Amounts"), (ii) specify, by percentage (which
must be an even multiple of [5]%), the
portion of his Deferred Amounts that shall be
invested in each investment option
available under the Plan which shall include, but
shall not be limited to, a Phantom Share
Unit Fund, and (iii) specify whether his Deferred
Amount shall become payable upon the
Participant's ceasing to be a member of the Board
of Directors for any reason or as soon
as practicable following the 10th anniversary of
the first day of the Plan Year following
the Plan Year in which the Deferred Amount would
have been paid were it not for the
deferred election (or the later of the two
alternatives).
(c) An Eligible Board Member's election to defer Eligible
Compensation for any Plan
Year shall be filed with the Committee (i) by no later than
January 31, 1997, in the case of
an election to defer Eligible Compensation for the Plan Year
beginning on January), 1,
1997; or (ii) in the case of an election to defer Eligible
Compensation for any Plan Year
beginning on or after January 1, 1998, by no later than
December 31. of the preceding
Plan Year.
(d) Notwithstanding the provisions of paragraph (b)
above, a newly elected Eligible
Board Member may make an initial deferral election
hereunder with respect to Eligible
Compensation for the Plan Year in which he or she is first
elected to serve as a member
of any Board by filing his or her election form with the
Committee by no later than 30
days after the date on which he or she commences to serve
as a member of such Board.
Any deferral election so made shall be effective only with
respect to Eligible
Compensation earned for services performed after the date
on which the Eligible Board
Member's deferral election has been filed with the
Committee.
(e) Any deferral election made by an
Eligible Board Member with respect to his or
her Eligible Compensation (including the date of
distribution) for a Plan Year shall be
irrevocable.
4. Accounts. For each Participant,
there shall be established on the books and
records of the Corporation, for bookkeeping purposes
only, an Account, to reflect the
Participant's interest under the Plan. The Account
so established for each Participant shall
be maintained in accordance with the following
provisions:
(a) Each Participant's Account shall be credited with
the Participant's Deferred
Amounts as of the first day of the calendar month following the
month in which the
amounts in question would have been paid to the Participant had
the Participant not
elected under Section 3 to have payment of such amounts deferred
under this Plan
(hereafter referred to as the "Credit Date").
(b) Each Participant's Account shall be credited (or
debited) as of the. last
business day of each calendar quarter with gains, income (or
loss) based on a
hypothetical investment in any one or more of the! investment
options available under
the Plan, as determined and applied in the manner deemed
appropriate by the Committee.
(c) If a Participant elects to invest all or any
port-ion of his or her Deferred
Amounts in the Phantom Share Unit Fund, that portion of the
Participant's Account
shall be credited on each Credit Date with Phantom Share Units
equal to the number of shares of Common Stock (including
fractions of a share) that could have been purchased
with such Deferred Amounts at the Fair Market Value on the
Credit Date. As of any
dividend payment date for the Common Stock, the portion of a
Participant's Account
invested in the Phantom Share Unit Fund as of the dividend
record date shall be credited
with additional Phantom Share Units. The number of Phantom
Share Units credited to
the Phantom Share Unit Fund will be determined by dividing (i)
the product of (a) the
dollar value of the dividend declared in respect of a share of
Common Stock multiplied
by (b) the number of Phantom Shares Units credited to the
Participant's Phantom Share
Unit Fund account as of the dividend record date by (ii) the
Fair Market Value of a share
of Common Stock on the dividend payment date.
(d) A Participant's interest in his or her Account
shall be fully vested and
nonforfeitable at all times.
5. Adjustment of Phantom Share Units. In the event
of any change in the
Corporation's common shares by reason of any stock dividend,
recapitalization,
reorganization, merger, consolidation, split-up, combination or
exchange of shares, or
any rights offering to purchase such shares at a price
substantially below fair market
value, or any similar change affecting the Corporation common
shares, the number
and kind of shares represented by Phantom Share Units shall be
appropriately adjusted
consistent with such change in such manner as the Committee, in
its sole discretion,
may deem equitable to prevent substantial dilution or
enlargement of the rights granted
to, or available for, the Participants hereunder. The
Committee shall give notice to each
Participant of any adjustment made pursuant to this Section 5
and, upon such notice,
such adjustment shall be effective and binding for all purposes
of the Plan.
6. Payment of Account Balances. Payment
with respect to a Participant's Account
shall be made in accordance with the following
provisions:
(a) The balance of a Participant's Account shall
become payable upon the
Participant's ceasing to be a member of the Board of
Directors, for any reason, or as
soon as practicable following the tenth anniversary of the
first day of the Plan Year
following the Plan Year in which the Deferred Amounts would
have been paid were it not
for the deferral election (or the later of the two
alternatives) in accordance with the
Participant's election made under Section 3.
(b) Amounts credited to a Participant's Account
shall be paid in a lump sum to the
Participant or, in the event of his death, to his
Beneficiary. All distributions shall be made
in cash except that payment with respect to the portion of
the Participant's Account that is
invested in the Phantom Share Unit Fund shall be made in
the form of (i) a number of
shares of Common Stock equal to the number of whole Phantom
Share Units credited to
such portion of the Account as of the last day of the month
preceding the month in which
such payment is made, and (ii) a cash payment in an amount
determined by multiplying (x) the fractional part of
a Phantom Share Unit credited to such balance as of such last
day by
(y) the Fair Market Value of one share of Common Stock as
of such last day. In the event
of the Participant's death, the payments to be made
hereunder to the Participant's
Beneficiary shall be made as soon as practicable after the
date of the Participant's death.
(c) Notwithstanding any other provision in this
Section 6 to the contrary, payment
with respect to any part or all of the Participant's
Account may be matched to the
Participant on any date earlier than the date on which such
payment is to be made
pursuant to such other provisions of this Section 6 if (i)
the Participant requests such early
payment in writing and (ii) the Committee, in its sole
discretion, determines that such early
payment is necessary to help the Participant meet an
"unforeseeable mergency" within the
meaning of Section 1.457-2(h)(4) of the Federal Income Tax
Regulations. The amount
that may be so paid may not exceed the amount necessary to
meet such emergency. The
committee may request that the Participant provide such
evidence of the unforeseeable
emergency as it deems appropriate.
7. Designation and Change of Beneficiary. Each
Participant shall file with the
Committee a written designation of one or more persons as the
Beneficiary who shall be
entitled to receive any amount, or any Common :stock payable
under the Plan by reason
of his or her death. A Participant may, from time to time,
revoke or change his or her
Beneficiary designation without the consent of any previously
designated Beneficiary by
filing a new designation with the Committee. The last such
designation received by the
Committee shall be controlling; provided, however, that no
designation, or change or
revocation thereof, shall be effective unless received by the
Committee prior to the
Participant's death, and in no event shall it be effective as of
a date prior to such receipt.
If at the date of a Participant's death, there is no designation
of a Beneficiary in effect for
the Participant pursuant to the provisions of this Section 7, or
if no Beneficiary
designated by the Participant in accordance with the provisions
hereof survives to
receive any amount payable under the Plan by reason of the
Participant's death, the
Participant's estate shall be treated as the Participant's
Beneficiary for purposes of the
Plan.
8. Payments to Persons Other Than
Participants.
If the Committee shall find that any Participant
or Beneficiary to whom any amount (or
any Common Stock) is payable under the Plan is
unable to care for his or her affairs
because of illness, accident or legal incapacity,
then, if the Committee so directs, such
amount, or such Common Stock, may be paid to such
Participant's or Beneficiary's
spouse, child or other relative, an institution
maintaining or having custody of such
person, or any person deemed by the Committee to
be a proper recipient on behalf of
such Participant or Beneficiary, unless prior
claim therefor has been made by a duly
appointed legal representative of the Participant
or Beneficiary.
Any payment made under this Section 8 shall he a complete
discharge of the liability of
the Corporation with respect to such payment.
9. Rights of Participants. A
Participant's rights and interests under the Plan shall
be subject to the following provisions:
(a) A Participant shall have the status of a, general
unsecured creditor of the
Corporation with, respect to his or her right to receive any
payment. under the Plan.
The Plan shall constitute a mere promise by the Corporation to
make payments in the
future of the benefits provided for herein. It is intended
that the arrangements reflected
in this Plan be treated as unfunded for tax purposes.
(b) A Participant's rights to payments
under- the Plan shall not be subject in any
manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors of the
Participant or his or her Beneficiary.
10. Administration. The Plan shall be administered by a
Committee composed of at
least two members of the Board of Directors who are not
Eligible Board Members and
who shall be appointed by the Board of Directors. If at any
time there are less than two
such members on the Board of Directors, additional members of
the Committee shall
be appointed from among those members of the Board of Directors
who have never
participated in the Plan or, in the absence of any such members
of the Board of
Directors, from among any senior officers of the Corporation or
any of its affiliated
companies.
All decisions, actions or interpretations of the Committee under
the Plan shall be final,
conclusive and binding upon all parties.
No member of the Committee shall be personally liable by reason
of any contract or
other instrument executed by such member or on his or her behalf
in his or her capacity
as a member of the Committee nor for any mistake of judgment
made in good faith, and
the Corporation shall indemnify and hold harmless each member of
the Committee, and
each employee, officer, director or trustee of the Corporation
or any of its affiliated
companies to whom any duty or power relating to the
administration or interpretation
of the Plan may be delegated, against any cost or expense
(including counsel fees) or
liability (including any sum paid in settlement of a claim with
tie approval of the Board
of Directors) arising out of any act or omission to act in
connection with the Plan unless
arising out such person's own fraud or bad faith.
11. Amendment or Termination. The Board of Directors
may, with prospective or
retroactive effect, amend, suspend or terminate the Plan or any
portion thereof at any
time; provided, however, that no amendment of the Plan shall
deprive any Participant of
any rights to receive payment of any amounts due him or her
under the terms of the Plan
as in effect prior to such amendment without his or her written
consent.
Any amendment that the Board of Directors would be
permitted to make pursuant to
the preceding paragraph may also be made by the Committee where
appropriate to
facilitate the administration of the Plan or to comply with
applicable law or any
applicable rules and regulations of governing authorities
provided that the cost of the
Plan to the Corporation is not materially increased by such
amendment.
12. Successor Corporation. The obligations
of the Corporation under the Plan shall be binding
upon any successor corporation or organization resulting from
the merger,
consolidation or other reorganization of the
Corporation, or upon any successor
corporation or organization succeeding to
substantially all of the assets and business of
the Corporation. The Corporation agrees that it
will make appropriate provision for the
preservation of Participants' rights under the Plan
in any agreement or plan which it may
enter into or adopt to effect any such merger,
consolidation, reorganization or transfer of
assets.
13. Governing Law. The provisions of the Plan shall be
governed by and construed
in accordance with the laws of the State of (New York].
14. Withholding Taxes. If required by applicable law, the
Committee shall withhold
from any payment such amount as shall be legally required to pay
any Federal, state or
local taxes.