EXHIBIT 10.4
AMENDED AND RESTATED LITTELFUSE
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
ARTICLE I
PURPOSE OF THE PLAN
The purpose of the Littelfuse Deferred Compensation Plan for Non-employee
Directors (the "Plan") is to promote the ownership by non-employee directors of
Littelfuse, Inc., a Delaware corporation (the "Company"), of shares of common
stock, $.01 par value, of the Company (the "Company Common Stock"), by allowing
them to elect to receive shares of the Company Common Stock in lieu of their
receiving some or all of the cash compensation which they would otherwise be
entitled to receive as payment for their services as directors of the Company.
The Company believes that ownership of the Company Common Stock by its
non-employee directors aligns the interests of such non-employee directors more
closely with the interests of the stockholders of the Company and that the Plan
will also assist the Company in attracting and retaining highly qualified
persons to serve as non-employee directors of the Company.
The Plan was originally adopted effective March 17, 2005, and has since
been amended. This Plan is hereby amended and restated in its entirety, in order
to incorporate all prior amendments and to make certain additional amendments
required to comply with Section 409A of the Internal Revenue Code of 1986 (the
"Code").
ARTICLE II
ELECTIONS BY ELIGIBLE DIRECTORS
Section 2.1. Eligibility. Any person who is serving as a director of the
Company and who is not an employee of the Company or any of its subsidiaries
shall be eligible to participate under the Plan (hereinafter referred to
individually as an "Eligible Director" and collectively as the "Eligible
Directors").
Section 2.2. Compensation. As used herein, the term "Compensation" shall
mean any and all fees and retainers payable in cash to an Eligible Director by
the Company for his or her services as a director, including, without
limitation, his or her annual retainer and meeting fees. A Director shall be
deemed to have earned one-fourth of his or her annual retainer fee on the date
of each of the four regularly scheduled Board of Directors meetings, whether or
not he or she attends such meeting.
Section 2.3. Compensation Deferral for 1995. Not later than June 30, 1995,
an Eligible Director may, by filing a written election with the Secretary of the
Company, direct the Company (a) to defer some or all of his or her Compensation
for 1995 which has not theretofore been earned by such Eligible Director in such
amount or percentage as specified by such Eligible Director and (b) to credit
the amount of such deferral to an account maintained on the books of the Company
for such Eligible Director (the
"Deferred Compensation Account"), such credit to be made as of the date that
such Compensation is deemed to have been earned by such Eligible Director.
Section 2.4. Compensation Deferral for 1996. Not later than June 30, 1995,
an Eligible Director may, by filing a written election with the Secretary of the
Company, direct the Company (a) to defer some or all of his or her Compensation
for 1996 in such amount or percentage as specified by such Eligible Director and
(b) to credit the amount of such deferral to such Eligible Director's Deferred
Compensation Account, such credit to be made as of the date that such
Compensation is deemed to have been earned by such Eligible Director.
Section 2.5. Compensation Deferral for 1997 and Later Years. An Eligible
Director may, by filing a written election with the Secretary of the Company
from time to time, direct the Company (a) to defer some or all of his or her
Compensation which is payable to him or her on or after January 1, 1997, in such
amount or percentage as specified by such Eligible Director and (b) to credit
the amount of such deferral to such Eligible Director's Deferred Compensation
Account, such credit to be made as of the date that such Compensation is deemed
to have been earned by such Eligible Director. Effective for Compensation paid
on or after January 1, 2005, such election may be made within 30 days after an
Eligible Director is first elected to the Board. If not made during such 30 day
period, the election may be made prior to the beginning of any subsequent year,
and shall take effect on the first day of such subsequent year.
Section 2.6. Interest. The Company shall credit the Deferred Compensation
Account for each Eligible Director with interest at the rate of eight percent
(8%) per annum on the balance of the Deferred Compensation Account from time to
time, such credit to be made on a monthly basis.
Section 2.7. Elections. Once an election by an Eligible Director to defer
some or all of his or her Compensation becomes effective pursuant to this
Article, such election shall remain in effect until written notice terminating
or amending said election is delivered by said Eligible Director to the
Secretary of the Company. Effective as of January 1, 2005, any termination or
amendment of an election shall take effect on the first day of the year
following the year in which the notice is delivered to the Secretary.
Section 2.8. Maximum Number of Shares. The maximum number of shares of
Company Common Stock which may be issued pursuant to the Plan shall be 160,000
shares.
ARTICLE III
ESTABLISHMENT OF AND CONTRIBUTIONS TO TRUST
Section 3.1. Establishment of Trust. The Company shall establish a trust
(the "Trust") with an independent third party trustee approved by the Board of
Directors of the Company (the "Trustee") pursuant to a trust agreement approved
by the Board of Directors of the Company (the "Trust Agreement") for the purpose
of holding shares of the Company Common Stock for the benefit of the Eligible
Directors.
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Section 3.2. Establishment of Trust Accounts. The Trustee shall establish a
separate account under the Trust (a "Trust Account" and, collectively with all
other Trust Accounts, the "Trust Fund") for any Eligible Director who elects to
defer Compensation pursuant to the Plan.
Section 3.3. Contribution of Shares to Trust Accounts. Commencing on May
16, 2005, and continuing on each business day which is closest to each
subsequent August 15, November 15, February 15 and May 15 during the term of the
Plan, the Company shall issue in the name of the Trustee and deliver to the
Trustee stock certificates representing that number of shares of Company Common
Stock which is equal to the balance of the Eligible Director's Deferred
Compensation Account on the Valuation Date divided by the Current Market Price;
provided, however, that no fractional shares shall be issued. The Company shall
reduce such Eligible Director's Deferred Compensation Account by the amount
thereof which was used to purchase said shares of Company Common Stock and the
Trustee shall credit the Trust Account of such Eligible Director with such
number of shares of Company Common Stock. As used herein, the term "Valuation
Date" with respect to each such issuance of shares shall mean the date the
Company issues said shares and the term "Current Market Price" with respect to
each such issuance of shares shall mean the average of the closing prices for
shares of the Company Common Stock on The Nasdaq Stock Market on the five days
immediately preceding the Valuation Date upon which shares of the Company Common
Stock were traded on The Nasdaq Stock Market.
Section 3.4. Dividends and Distributions. All dividends payable in cash
with respect to any shares of Company Common Stock held in the Trust for the
benefit of an Eligible Director which are received by the Trustee shall be
reinvested by the Trustee in shares of Company Common Stock, either pursuant to
purchases from the Company or from third parties, credited to the Trust Account
of such Eligible Director and held by the Trustee for the benefit of such
Eligible Director and distributed to such Eligible Director pursuant to Article
IV hereof. All non-cash dividends or other distributions with respect to any
shares of Company Common Stock held in the Trust for the benefit of an Eligible
Director which are received by the Trustee, or any shares of stock or other
securities of another entity into which such shares of Company Common Stock
shall be converted or exchanged pursuant to a merger, consolidation, exchange
offer or other transaction which are received by the Trustee, shall be credited
to such Eligible Director's Trust Account and held by the Trustee for the
benefit of such Eligible Director and distributed to such Eligible Director
pursuant to Article IV hereof.
Section 3.5. Voting of Shares. All shares of Company Common Stock or other
voting securities credited to an Eligible Director's Trust Account shall be
voted by and in the discretion of the Trustee.
Section 3.6. Trustee's Fees. All fees and expenses of the Trustee under the
Trust Agreement shall be paid by the Company.
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Section 3.7. Vesting. Except as otherwise provided in Article V hereof, the
interests of the Eligible Directors in their respective Deferred Compensation
Accounts and Trust Accounts shall at all times be fully vested and
non-forfeitable.
ARTICLE IV
DISTRIBUTION OF ACCOUNTS
Section 4.1. Time of Distributions. Distributions of any amounts or assets
credited to an Eligible Director's Deferred Compensation Account and Trust
Account shall commence or be made in the manner described in Section 4.2 hereof
within ten (10) days after the earlier of: (i) the date of the Eligible
Director' termination of service as a director of the Company on account of
resignation, removal, replacement, retirement, death or otherwise; or (ii) the
date the Board of Directors of the Company determines that it is in the best
interests of the Company or such Eligible Director that such distribution shall
be made; provided, however, that such Eligible Director must abstain from voting
on or with respect to, and may not otherwise participate in, any such
determination. The Board of Directors may only direct a distribution pursuant to
clause (ii) of any amount that was deferred on or after January 1, 2005 (or the
income attributable to such amounts) to the extent the Board of Directors
determines that such distribution is necessary to alleviate an unforeseeable
emergency, including any tax imposed on the distribution. For purposes of the
preceding sentence, an unforeseeable emergency means a severe financial hardship
to the Eligible Director resulting from an illness or accident of the Eligible
Director (or the Eligible Director's spouse, Beneficiary, or tax dependent);
loss of the Eligible Director's property due to casualty (including the need to
rebuild a home following damage to a home not otherwise covered by insurance,
for example, not as a result of a natural disaster); or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Eligible Director, determined in accordance with
regulations or other guidance promulgated under Section 409A of the Code. For
purposes of this Section 4.1, an Eligible Director shall not be considered to
have terminated his or her service as a director until he has incurred a
separation from service as defined in Section 409A of the Code.
Section 4.2. Method of Distribution.
(a) At the time of an Eligible Director's initial election described in
Article II, the Eligible Director making such election shall specify in a
written notice delivered to the Secretary of the Company whether the amounts and
assets credited to his or her Deferred Compensation Account and Trust Account
shall be distributed to him or her (or his or her beneficiary) in a single lump
sum distribution at the time described in Section 4.1, or in not more than ten
annual installments. The first such installment shall be paid not more at the
time described in Section 4.1, and subsequent payments shall be made on each
anniversary of such date. The amount of each such installment shall be equal to
the cash balance in his or her Deferred Compensation Account and the number of
shares in his or her Trust Account immediately prior to the distribution divided
by the number of installments remaining to be paid (rounded to the next higher
number of whole shares with respect to the Trust Account). If an Eligible
Director shall fail to make such an election, he or she shall be deemed to have
elected a lump sum distribution.
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(b) The Eligible Director may change such distribution election from time
to time by delivering written notice to the Secretary of the Company, subject to
the following. Effective as of January 1, 2008, no change in a distribution
election may be made within one year before the Eligible Director terminates his
or her service as a director, and if an Eligible Director's service is
terminated within one year after notice of any such change is given to the
Secretary, such change will be null and void. If an Eligible Director changes
his or her distribution election on or after January 1, 2008, then the portion
of his or her Deferred Compensation Account, and the number of shares in his or
her Trust Account. attributable to amounts deferred after December 31, 2004, and
before the first day of the year following the year in which the notice of such
change is given to the Secretary (including amounts attributable to earnings),
shall be distributed (or begin to be distributed in the case of installments) on
the day that is five years after the date it would have been distributed had
such change not been made. For purposes of Section 409A of the Internal Revenue
Code of 1986, payment in installments shall be considered a single payment.
(c) Any amounts or assets credited to an Eligible Director's Deferred
Compensation Account and Trust Account shall be distributed or commence to be
distributed to such Eligible Director or his or her beneficiary at the time
described in Section 4.1 in the manner so specified. If the Company is not
Insolvent (as hereinafter defined) at the time of any distribution, the
distributions shall be made from the Eligible Director's Deferred Compensation
Account and Trust Account (as applicable) and charged to the Eligible Director's
Deferred Compensation Account and Trust Account (as applicable).
Section 4.3. Designation of Beneficiary. Each Eligible Director
participating in the Plan shall designate a beneficiary or beneficiaries to whom
distributions shall be made pursuant to Section 4.2 in the event of the death of
the Director before his or her entire Deferred Compensation Account and Trust
Account is distributed. If there is no designated beneficiary, or no designated
beneficiary surviving at an Eligible Director's death, the Eligible Director's
beneficiary shall be his or her estate. Beneficiary designations shall be made
in writing. An Eligible Director may designate a new beneficiary or
beneficiaries at any time by filing a new election with the Secretary of the
Company.
Section 4.4. Taxes. In the event any taxes are required by law to be
withheld or paid from any distributions made pursuant to the Plan, the Company
or Trustee (as applicable) shall deduct the amount of such taxes from such
distributions and shall transmit the withheld amounts to the appropriate taxing
authority or obtain payment from the appropriate Eligible Director of the amount
of any such taxes prior to any such distributions.
ARTICLE V
CREDITORS AND INSOLVENCY
Section 5.1. Claims of the Company's Creditors. All balances in the
Deferred Compensation Accounts and assets held in the Trust Accounts pursuant to
the Plan, and
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any issuances of shares of Company Common Stock to be made by the
Company and any distribution to be made by the Trustee pursuant to the Plan and
Trust Agreement, shall be subject to the claims of the general creditors of the
Company, including judgment creditors and bankruptcy creditors. The rights of an
Eligible Director or his or her beneficiaries to any assets of the Company or
the Trust Fund shall be no greater than the rights of an unsecured creditor of
the Company.
Section 5.2. Notification of Insolvency. In the event the Company becomes
Insolvent, the Board of Directors of the Company or the President of the Company
shall promptly notify the Trustee of that fact. In the event the Company becomes
Insolvent, the Company shall not issue any further shares of Company Common
Stock under the Plan. The Trustee shall not make any further distributions from
the Trust Fund to any Eligible Director or any beneficiary under the Plan after
such notification that the Company is Insolvent is received or at any time after
the Trustee has knowledge that the Company is Insolvent. Under any such
circumstance, the Trustee shall deliver any property held in the Trust Fund only
as a court of competent jurisdiction may direct to satisfy the claims of the
Company's creditors or otherwise. For purposes of this Plan, the Company shall
be deemed to be "Insolvent" if the Company is subject to a pending voluntary or
involuntary proceeding as a debtor under the United States Bankruptcy Code, as
amended, or is unable to pay its debts as they become due.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Funding. Neither any Eligible Director, nor his or her
beneficiaries, nor his or her heirs, successors or assigns, shall have any
secured interest in or claim on any property or assets of the Company or the
Trust under or pursuant to the Plan or otherwise. The Company's obligation under
the Plan shall be merely that of an unfunded and unsecured promise of the
Company to credit certain amounts to the Deferred Compensation Accounts and to
issue and deliver shares of the Company Common Stock to the Trustee for the
benefit of the Eligible Directors. The Company shall fund the Trust in
accordance with the terms of the Plan, but all assets contained therein shall be
and remain subject to the claims of the Company's general creditors as provided
in Article V hereof.
Section 6.2. Term of Plan. The Board of Directors of the Company reserves
the right to amend the Plan or Trust Agreement or terminate the Plan or Trust at
any time; provided, however, that no amendment or termination shall affect the
rights of Eligible Directors to amounts or assets previously credited to their
Deferred Compensation Accounts or Trust Accounts and, provided further, that the
Plan may not be amended more than once every six months, other than to comport
with changes in the Code or the Employee Retirement Income Security Act, as
amended, or the rules thereunder, if such amendment would cause the Plan not to
be in compliance with Rule 16b-3 under the Securities Exchange Act of 1934.
Notwithstanding the foregoing, the Trust shall remain in effect until such time
as the entire corpus of the Trust Fund has been distributed pursuant to the
terms of the Trust Agreement, and the Plan shall remain in effect until
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such time as all amounts credited to Eligible Directors' Deferred Compensation
Accounts are distributed pursuant to Article IV hereof.
Section 6.3. Assignment. No right or interest of any Eligible Director or
his or her beneficiary (or any person claiming through or under such Eligible
Director or his or her beneficiary) in any benefit or payment under the Plan or
the Trust shall be assignable or transferable in any manner or be subject to
alienation, anticipation, sale, pledge, encumbrance or other legal process or in
any manner be liable for or subject to the debts or liabilities of such Eligible
Director.
Section 6.4. Tax Effect. This Plan is intended to be treated as an unfunded
deferred compensation plan under the Code and, with respect to amounts deferred
on and after January 1, 2005, to comply in all respects with the requirements of
Section 409A of the Code and the regulations thereunder, and, to the maximum
extent permitted by law, the Plan shall be so construed and administered. It is
the intention of the Company that the amounts of Compensation which an Eligible
Director elects to have deferred pursuant to the Plan shall not be included in
the gross income of such Eligible Director or his or her beneficiaries until
such time as the amounts or assets credited to such Eligible Director's Deferred
Compensation Account and Trust Account are distributed to the Eligible Director
or his or her beneficiary under the Plan. If at any time any amount attributable
to the Eligible Directors' Deferred Compensation Accounts or Trust Accounts are
includible in the gross income of any Eligible Director or his or her
beneficiary before distribution pursuant to Article IV hereof, the amount
includible in income shall be immediately distributed to the respective Eligible
Director or beneficiary. Distributions described in the preceding sentence shall
only be made from the Trust if the Company is not Insolvent at the time for such
distribution.
Section 6.5. Compliance with Rule 16b-3. It is the intent of the Company
that the Plan comply in all respects with applicable provisions of Rule 16b-3
under the Securities Exchange Act of 1934. Accordingly, if any provision of the
Plan does not comply with the requirements of said Rule 16b-3 as then applicable
to any such Eligible Director, or would cause any Eligible Director to no longer
be deemed a "disinterested person" within the meaning of said Rule 16b-3, such
provision shall be construed or deemed amended to the extent necessary to
conform to such requirements with respect to such Eligible Director. In
addition, the Board of Directors of the Company shall have no authority to make
any amendment, alteration, suspension, discontinuation or termination of the
Plan or take other action if and to the extent such authority would cause an
Eligible Director's transactions under the Plan not to be exempt or any Eligible
Director no longer to be deemed a "disinterested person," under said Rule 16b-3.
Section 6.6. Governing Law. This Plan shall be governed by and construed in
accordance with the laws of the State of Illinois.
Section 6.7. Successors. The provisions of this Plan shall bind and inure
to the benefit of the Company and its successors and assigns.
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Section 6.8. Effective Date of Plan. The Plan shall be effective as of
March 17, 1995, subject to approval by the stockholders of the Company. Any
Compensation deferral elections, credits to Deferred Compensation Accounts or
contributions to the Trust made prior to such stockholder approval shall be
contingent on such approval, and if such approval is not obtained prior to June
1, 1995, all Compensation deferral elections shall be deemed to be cancelled and
all amounts or assets credited to the Deferred Compensation Accounts and the
Trust Accounts shall be distributed to the Eligible Directors or their
beneficiaries. Distributions described in the preceding sentence shall only be
made if the Company is not Insolvent at the time for such distribution.
Section 6.9. No Right to Continued Service. Nothing contained herein shall
be construed to confer upon any Eligible Director the right to continue to serve
as a Director of the Company or in any other capacity.
Section 6.10. Compliance with Section 409A. Effective January 1, 2005, the
Plan shall be amended as follows:
(i) Distributions. Notwithstanding anything to the contrary contained
in the Plan, no distributions shall be permitted or made under the Plan
which would cause the Plan not to meet, or be deemed to be operated not in
accordance with, the requirements of Section 409A(a)(2) of the Code.
(ii) Acceleration of Benefits. Notwithstanding anything to the
contrary contained in the Plan, the acceleration of the time or schedule of
any payment or distribution under the Plan which would cause the Plan not
to meet, or be deemed to be operated not in accordance with, the
requirements of Section 409A(a)(2) of the Code is prohibited, except as
provided in regulations promulgated from time to time by the Secretary of
the Treasury.
(iii) Elections. Notwithstanding anything to the contrary contained in
the Plan, no elections shall be permitted or made under the Plan which will
cause the Plan to fail to meet, or be deemed to be operated not in
accordance with, the requirements of Section 409A(a)(4) of the Code.
The provisions of this Section 6.10 shall not apply to amounts deferred before
January 1, 2005, except to the extent necessary to prevent the Plan from (i)
failing to meet the requirements of Section 409A(a)(2), (3) and (4) of the Code
or (ii) not being operated in accordance with such requirements.
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