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Exhibit (10)(h)
SUDBURY, INC.
DIRECTORS' DEFERRAL PLAN
1. PURPOSES OF THIS PLAN.
This Directors' Deferral Plan of Sudbury, Inc., adopted on this 12th day
of September, 1994 is intended to attract and retain qualified Directors and to
provide incentives to these Directors through the ability to defer their
receipt of Directors' fees and to participate in the Company's growth.
2. DEFINITIONS.
(a) "Board" means the Board of Directors of the Company.
(b) "Cash Account" means an account for deferred Fees established
by the Company for a Director which is valued on the basis of cash as
provided in Paragraph 5.
(c) "Common Shares" means units equivalent in value and dividend
rights to Common Stock, $.01 par value per share, of the Company.
(d) "Company" means Sudbury, Inc.
(e) "Deferred Account" means the account established by the
Company for each Director who elects to defer the fees payable to him as
a Director. A Director's Deferred Account shall consist of either a Cash
Account or a Stock Account, or both.
(f) "Director" means any Director of the Company who is not an
employee of the Company.
(g) "Election Agreement" means the written election to defer
Director fees signed by the Director and in the form provided by the
Chief Financial Officer (or person performing similar functions) of the
Company.
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(h) "Fees" means that amount of the fees payable to a Director by
reason of his serving on the Board either (i) as a retainer (without regard to
attendance at meetings); (ii) on a per meeting basis; or (iii) otherwise.
(i) "Market Price" for any day shall be the closing price quoted for a
share of Common Stock of the Company on the NASDAQ National Market System or on
such national securities exchange as the Common Stock may be traded and, if not
so traded, then as the Board in its discretion may determine.
(j) "Member" means any Director who has at any time deferred the
receipt of Director fees in accordance with this Plan.
(k) "Plan" means the Directors Deferral Plan.
(l) "Stock Account" means an account for deferred Fees established by
the Company for a Director which is valued on the basis of the Company's Common
Stock.
(m) "Term" means the duration of the term for which a Director is
elected.
(n) "Full Term" means a term of one (1) year.
(o) "Year" means the calendar year.
(p) Whenever appropriate, words used herein in the singular may be read
as the plural and the plural may be read as the singular.
(q) Masculine pronouns used herein shall be deemed to refer to both
women and men.
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3. ELECTION TO DEFER DIRECTORS' FEES.
(a) ELIGIBILITY.
A Director may elect to defer receipt of all or a portion of his fees for
any Year in accordance with Paragraph 3(b) hereof.
(b) TIME OF ELECTION.
A Director desiring to defer all or a portion of his Fees for the
upcoming Year must submit an Election Agreement to the Chief Financial Officer
(or person performing similar functions) of the Company no later than the last
day of the Year prior to the Year for which the election is to be effective.
Any Director who was not a Director during the previous Year may make an
election to defer all or a portion of the Fees for the Year in which the
Director is elected to the Board of Directors by delivering an Election
Agreement to the Chief Financial Officer (or person performing similar
functions) of the Company within thirty (30) days after such election to the
Board. A Director fulfilling the above requirements shall be considered a
"Member" for purposes of this Plan.
(c) DURATION OF ELECTION.
A Member's election to defer Fees shall be effective from Year to Year
unless modified or revoked by the Member through written notice to the Chief
Financial Officer (or person performing similar functions) of the Company prior
to the beginning of the Year for which the revocation or modification is to
apply.
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(d) ELECTION IRREVOCABLE.
Subject to the provisions of Paragraph 3(e), the terms set forth in
an Election Agreement for any particular Year are irrevocable once the
Year has commenced.
(e) MODIFICATION OF ELECTION.
Notwithstanding the provisions of Paragraph 3(d) a Member may
modify or amend an Election Agreement for a prior Year to modify the
payment schedule of distributions covered by such Election Agreement if
such Director's membership on the Board has been terminated, and he is
not otherwise a reporting person under Section 16 of the Securities
Exchange Act of 1934, as amended, ("Exchange Act") at the time of such
modification or amendment, and he files a new Election Agreement with the
revised distribution schedule at least one year in advance of the date
such distributions were originally scheduled to commence.
4. THE AMOUNT AND DATE OF DEFERRAL.
The Election Agreement of the Member shall indicate the amount of Fees to
be deferred and the date to which the Fees are to be deferred. Deferral shall
be to the earlier to occur of (1) the date indicated by the Member; provided,
however, distributions of deferred fees from Stock Accounts may be no sooner
than six months after the Year for which such deferred fees relate, or (2) the
date of the death of the Member. In the case of the death of the Member,
distribution of the deferred fees shall be made in accordance with Paragraph 7.
A Member may (i) select a lump-sum distribution or a series of distributions or
installments and (ii) choose the date on which the lump sum shall be paid
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or the installments shall commence. The installments may not be more frequent
than annually and may not consist of more than ten (10) annual installments.
5. DEFERRAL ACCOUNTS.
(a) ACCOUNTS.
The Company shall establish and preserve one or more accounts for
each Director. A Member shall designate on the Election Agreement with
respect to each Year's deferred Fees whether to have the account
attributable to such Year's deferred Fees valued on the basis of the
Common Shares of the Company in accordance with Paragraph 5(b) hereof or
on the basis of cash in accordance with Paragraph 5(c) hereof. A Member
may defer a portion of his fees into each type of account. A Member may
not transfer fees from one account to another after he has made an
election for any Year; except that at the time such Member executes an
Election Agreement with respect to a Year's Fees he may elect to have all
amounts attributable to such Year's Fees in his Stock Accounts
automatically transfer into his Cash Account upon the termination of his
membership on the Board as long as such Member is not at that time
otherwise subject to the provisions of Section 16 of the Exchange Act.
The Company may establish separate accounts for a Member to properly
account for amounts deferred under the two alternatives or during
different Years.
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(b) STOCK ACCOUNT.
There shall be credited to a Member's Stock Account, on the last day of
each quarter, the number of Common Shares (whole or fractional, rounded to the
nearest thousandth of a share) equal to the quotient obtained by dividing (i)
the sum of the Fees he elects to defer to his Stock Account which otherwise
would have been paid to him during the quarter and the dividends payable during
such quarter on the Common Shares held in the Stock Account on the first day of
such quarter, by (ii) the Market Price of the Common Stock on the last business
day of such quarter.
(c) CASH ACCOUNT.
If a Member elects to have a portion of his Fees deferred into a Cash
Account, there will be credited to his Cash Account, on the last day of each
quarter, an amount equal to the sum of (i) the Fees he elects to defer to his
Cash Account which otherwise would have been paid to him during the quarter and
(ii) interest on the balance in the Cash Account on the first day of such
quarter at a rate based on the rate of interest paid by the Company on its
senior revolving credit facility (the "Interest Rate"). The Interest Rate
applicable to any Year will be set on the first business day of such Year.
(d) CLAIMS OF GENERAL CREDITORS.
All compensation deferred and amounts credited to the Cash and Stock
Accounts under this Plan shall remain a part of the general assets of the
Company. Accordingly, the compensation deferred under this Plan shall be an
unsecured claim
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against the general assets of the Company and shall be subject to the
claims of the Company's general creditors.
6. PAYMENT OF ACCOUNTS.
The accounts established and maintained for each Director shall be
distributed in a lump sum or installments. The selection of the distribution
date(s) and the method of distribution are to be indicated on the Election
Agreement to be submitted by the Member. The election as to the method of and
time for payment of the amount of an account relating to Fees deferred for a
particular Year may not thereafter be altered with respect to that particular
Year once the Year has commenced except as provided in Paragraph 3(e). Changes
in the method of and time for payment of the amount of an account may be
effected for future Years by notifying the Chief Financial Officer (or person
performing similar functions) in writing prior to the beginning of the Year for
which the modification is to apply in accordance with Paragraph 3 above.
With respect to all distributions to be made under the Plan, the
following rules shall apply:
(i) All distributions whether from a Stock Account or a Cash
Account shall be paid in cash subject to withholding or deduction by the
Company of any taxes, contributions, payments and assessments which the
Company is now or may hereafter be required or authorized by law to
withhold or deduct from distributions;
(ii) The amount of the distribution from the Stock Account shall
be valued based on the Market Price of the Common Stock on the last
business day of the calendar quarter immediately preceding the
distribution date; and
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(iii) The amount of the distribution from the Cash Account shall
be valued based on the value of the Cash Account on the last business day
of the quarter immediately preceding the distribution date.
In the event a Member elects to receive installment payments, the
following rules shall apply:
(i) The balance of the Stock Account shall be credited, pursuant
to Paragraph 5(b) above, with additional Common Shares upon the payment
of dividends until the Stock Account is completely distributed;
(ii) The balance of the Cash Account shall be credited, pursuant
to Paragraph 5(c) above, with interest quarterly until the Cash Account
is completely distributed; and
(iii) The amount of each installment shall be determined by
dividing the value of the Stock Account, the Cash Account, or both, by
the number of installments remaining to be paid to the Member.
7. DEATH OF MEMBER.
A Member may, in the Election Agreement provided in Paragraph 3 above,
provide that, in the event of his death prior to the expiration of the period
during which his account balance is distributable, the account balance shall be
distributed to his estate or designated beneficiary in a single distribution or
in the installments contemplated by Paragraph 6 above. This election shall be
made at the time of the election contemplated by Paragraph 3 above. If no such
election is made the account balance shall be distributed in a single
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distribution six months after the Member's death to his surviving spouse, or if
there be no surviving spouse, then to his estate.
8. VALUATION OF ACCOUNTS.
Each account shall be valued as of the last day of each calendar quarter
until payment of the account in full to the Member in accordance with Paragraph
6. Each Member shall receive a statement of his accounts not less than
annually.
9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
In the event of changes in the outstanding Common Shares of the Company
by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares or a
similar corporate change, the Board of Directors shall, in its sole discretion,
equitably adjust the number of Common Shares held in the Stock Accounts and
such adjustment shall be made by the Company and shall be conclusive and
binding on all Members of the Plan.
10. VESTING IN DEFERRED DIRECTORS' FEES.
All amounts deferred by a Director pursuant to the Plan shall be
immediately and fully vested. Notwithstanding the foregoing, all amounts
deferred under the Plan shall be subject to Paragraph 5(b).
11. ADMINISTRATION.
This Plan shall be administered by the Compensation Committee of the
Board of Directors. The Compensation Committee shall have the sole right and
authority to interpret and construe the provisions of this Plan, and its
decisions on disputes arising from the Plan shall be binding and conclusive
upon the Members. If a Member is part of the
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Compensation Committee that administers this Plan, he shall not participate in
any deliberations or actions of the Compensation Committee relating exclusively
to his membership in this Plan.
12. TERMINATION OR MODIFICATION OF PLAN.
This Plan may be terminated, modified, or amended at the sole discretion
of the Board of Directors; provided, that no amendment of the Plan shall impair
any of the rights of any Member, without the Member's consent, in his Deferred
Account balance. If this Plan is terminated, the remaining Deferred Account
balances will be distributed pursuant to the terms of this Plan and no
additional deferrals will be permitted.
13. NONTRANSFERABILITY OF ACCOUNTS.
Neither any account maintained for a Director under this Plan nor the
Director's right to receive any payment specified herein with respect to any
such account shall be subject in any manner to anticipation, alienation, sale,
transfer (other than by will or the laws of descent or distribution),
assignment, pledge, encumbrance or charge, either voluntary or involuntary, and
any attempt to so alienate, anticipate, sell, transfer, assign, pledge,
encumber or charge the same shall be null and void. No amount payable under
this Plan shall be liable for or be subject to the debts, contracts,
liabilities, engagements or torts of any person to whom such payment is or may
be payable, except as required under applicable law.
14. CLAIMS OF OTHER PERSONS.
The provisions of the Plan shall in no event be construed as giving any
person, firm or corporation any legal or equitable right as against the Company
or any subsidiary, or the
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officers, employees, or Directors of the Company or any subsidiary, except any
such rights as are specifically provided for in the Plan or are hereafter
created in accordance with the terms and provisions of the Plan.
15. SEVERABILITY.
The invalidity and unenforceability of any particular provision of the
Plan shall not affect any other provision hereof, and the Plan shall be
construed in all respects as if such invalid or unenforceable provisions were
omitted herefrom.
16. CAPTIONS. The captions used in the Plan are for convenience only
and shall not affect the meaning of any provision hereof.
17. GOVERNING LAW.
The provisions of the Plan shall be governed and construed in accordance
with the laws of the State of Ohio.
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