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EXHIBIT 10.6
THE GEON COMPANY
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
(Effective December 9, 1993)
ARTICLE I
PURPOSE OF THE PLAN
The purpose of The Geon Company (the "Company") Deferred Compensation
Plan for Non-Employee Directors is to provide any Non-Employee Director of the
Company the option to defer receipt of the compensation payable for services as
a Director and to build loyalty to the Company through increased ownership in
the Company's Common Stock.
ARTICLE II
DEFINITIONS
As used herein, the following words shall have the meaning stated
after them unless otherwise specifically provided:
2.1 "Calendar Year" shall mean the twelve month period January 1
through December 31.
2.2 "Change in Control" shall mean the occurrence of either of the
following events:
(1) If any "person" (as such term is used in Sections
13(d) (3) and 14(d) (2) of the Exchange Act) becomes the "beneficial
owner" (as such term is used in Rule 13d-3 under the Exchange Act) of
securities of the Company representing 20 percent or more of the
combined voting power of the Company's then outstanding securities and
exercises, or indicates an intent to exercise, such voting power on
any issue contrary to the recommendations of management; or
(2) When individuals who, at the beginning of any
two-year period, constitute the Board of Directors of the Company
cease for any reason to constitute at least three-fourths thereof
unless the election, or the nomination for election by the
Company's stockholders, of each new director was approved by a vote of
at least two- thirds of the directors then still in office who were
directors at the beginning of such period.
2.3 "Committee" shall mean the Compensation Committee
described in Section 8.1 hereof.
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2.4 "Common Stock" shall mean the Common Stock, par value $0.10
per share, of the Company.
2.5 "Company" shall mean The Geon Company.
2.6 "Director" shall mean any non-employee director of the
Company.
ARTICLE III
ELECTIONS BY DIRECTORS
3.1 ELECTION TO DEFER. A Director may elect to defer receipt of
the compensation payable to him or her for future services as a Director. Such
election shall be made on an election form specified by the Committee
("Election Form"). Such election shall indicate the portion of the Director's
compensation to be invested in an interest-bearing account and the portion of
such compensation to be invested in Common Stock.
3.2 EFFECTIVENESS OF ELECTIONS. Elections shall be effective and
irrevocable upon the delivery of an Election Form to the Committee.
Notwithstanding anything to the contrary set forth herein, the effective date
of any transaction in which amounts deferred hereunder are invested in Common
Stock shall be not less than six months after the date of such election.
Subject to the provisions of Article VI, amounts deferred pursuant to such
elections shall be distributed at the time and in the manner set forth in such
election.
3.3 AMENDMENT AND TERMINATION OF ELECTIONS. A Director may
terminate or amend his or her election to defer receipt of compensation by
written notice delivered to the Committee six months prior to the commencement
of the period with respect to which such compensation will be earned.
Amendments which serve only to change the beneficiary designation shall be
permitted at any time and as often as necessary. Amounts credited to a
Director's Account pursuant to Section 5.2 hereof prior to the effective date
of any termination or amendment shall not be affected thereby and shall be paid
at the time and in the manner specified in the election form in effect when the
deferral occurred.
ARTICLE IV
COMMON STOCK AVAILABLE UNDER THE PLAN
4.1 COMMON STOCK. The aggregate number of shares of Common Stock
that may be granted under this Plan in any fiscal year of the Company during
the term of this Plan will be equal to one tenth of one percent (0.1%) of the
number of shares of Common Stock outstanding as of the first day of that fiscal
year.
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4.2 ADJUSTMENT. In the event of any change in the Common Stock of
the Company by reason of a merger, consolidation, reorganization, or similar
transaction, or in the event of a stock dividend, stock split, or distribution
to shareholders (other than normal cash dividends), the Committee will adjust
the number and class of shares that may be issued under this Plan, the number
and class of shares subject to outstanding deferrals, and the fair market value
of the Common Stock, and other determinations applicable to outstanding
awards.
ARTICLE V
ACCOUNTS
5.1 ACCOUNTS. The Company shall establish and maintain a
Deferred Compensation Account (an "Account") for each Director who elects to
defer compensation under the Plan. If the Director elects to have deferred
compensation invested in an interest-bearing account, the Company shall credit
the Account of the Director with an amount equal to one hundred percent (100%)
of the compensation deferred pursuant to this Plan. In the event that a
Director elects to have some or all of his or her compensation invested in
Common Stock, then the Company shall credit the Account of the Director with an
amount equal to one hundred twenty five percent (125%) of such compensation, in
the form of a number of shares of Common Stock, valued at its Fair Market
Value. As used herein, the Fair Market Value of Common Stock shall be the
average of the high and low prices of the Company's Common Stock as reported on
the composite tape for securities listed on the New York Stock Exchange for the
date immediately preceding the date of crediting the Account, provided that if
no sales of Common Stock were made on said exchange on that date, the Fair
Market Value shall be the average of the high and low prices of Common Stock as
reported on said composite tape for the preceding day on which sales of Common
Stock were made on said Exchange. The Accounts shall be credited as of the
date on which the compensation would otherwise have been paid to the Director,
if not deferred under the Plan.
5.2 ADJUSTMENT OF ACCOUNTS. As of December 31 of each Calendar
Year and on such other dates as the Committee directs, the fair market value of
the Account of each Director shall be determined by crediting to the Account an
amount equal to the income earned during the Calendar Year, or other
appropriate period, the number of shares of Common Stock credited to the
Account, and then determining the fair market value of the shares and other
amounts credited to the Account.
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ARTICLE VI
PAYMENT OF ACCOUNTS
6.1 TIME OF PAYMENT. Payment of the amount credited to a
Director's Account shall commence upon a date which is not more than thirty
days after the earlier of (i) the attainment of the date specified (not
younger than age 55) in his Election Form or (ii) upon a Change in Control.
6.2 METHOD OF PAYMENT. The amount credited to a Director's
Deferred Compensation Account shall be paid, in whole or in part, to the
Director in a lump sum and/or in annual installments over a period of not
more than ten years as specified in each Director's Election Form. Deferred
Compensation Accounts shall be paid in kind, in cash, or shares of Common
Stock, as credited to the Account.
6.3 HARDSHIP DISTRIBUTION. Prior to the time a Director's Account
becomes payable, the Committee, in its sole discretion, may elect to distribute
all or a portion of the Director's Account in the event such Director
requests a distribution on account of severe financial hardship. For purposes
of this Plan, severe financial hardship shall be deemed to exist in the event
the Committee determines that a Director needs a distribution to meet immediate
and heavy financial needs resulting from a sudden or unexpected illness or
accident of the Director or a member of his or her family, loss of the
Director's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Director. A distribution based on financial hardship shall not exceed the
amount required to meet the immediate financial need created by the hardship.
The amount of a Director's Account shall be reduced by the amount of any
hardship distribution to such Director.
6.4 DESIGNATION OF BENEFICIARY. Upon the death of a Director, the
amount credited to his or her Account shall be paid to the beneficiary or
beneficiaries designated by him or her. If there is no designated beneficiary,
or no designated beneficiary surviving at a Director's death, payment of a
Director's Account shall be made to his or her estate. Beneficiary
designations shall be made in writing. A Director may designate a new
beneficiary or beneficiaries at any time by notifying the Committee.
6.5 TAXES. In the event any taxes are required by law to be
withheld or paid from any payments made pursuant to the Plan, the appropriate
amounts shall be deducted from such payments and transmitted to the appropriate
taxing authority.
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ARTICLE VII
CREDITORS
7.1 CLAIMS OF THE COMPANY'S CREDITORS. The rights of a Director
or his or her beneficiaries to any payment under the Plan shall be no greater
than the rights of an unsecured creditor of the Company.
ARTICLE VIII
ADMINISTRATION
8.1 APPOINTMENT OF COMMITTEE. The Board of Directors of the
Company shall appoint a Committee consisting of not less than three persons to
administer the Plan. Members of the Committee shall hold office at the pleasure
of the Board of Directors and may be dismissed at any time with or without
cause. Such persons serving on the Committee need not be members of the Board
of Directors of the Company.
8.2 POWERS OF THE COMMITTEE. The Committee shall administer the
Plan and resolve all questions of interpretation arising under the Plan with
the help of legal counsel, if necessary. Whenever directions,
designations, applications, requests or other notices are to be given by a
Director under the Plan, they shall be filed with the Committee. The Committee
shall have no discretion with respect to Plan contributions or
distributions but shall act in an administrative capacity only.
ARTICLE IX
MISCELLANEOUS
9.1 TERM OF PLAN. The Company reserves the right to amend or
terminate the Plan at any time; provided, however, that no amendment or
termination shall affect the rights of Directors to amounts previously
credited to their Accounts pursuant to Section 5.1 or to future income to
be credited to their Accounts pursuant to Section 5.2.
9.2 ASSIGNMENT. No right or interest of any Director (or any
person claiming through or under such Director) in any benefit or payment
herefrom other than the surviving spouse of such Director after he or she is
deceased, 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
Director. If any Director or any such person (other than the surviving spouse
of such Director after he or she is deceased) shall attempt to or shall
transfer, assign, alienate, anticipate, sell, pledge, or otherwise encumber his
or her benefits hereunder
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or any part thereof, or if by reason of his or her bankruptcy or other event
happening at any time such benefits would devolve upon anyone else or would not
be enjoyed by him or her, then the Committee, in its discretion, may terminate
his or her interest in any such benefit to the extent the Committee considers
necessary or advisable to prevent or limit the effects of such occurrence.
Termination shall be effected by filing a written "termination declaration"
with the Committee records and making reasonable efforts to deliver a copy to
such Director or his or her legal representative.
As long as any Director is alive, any benefits affected by the
termination may, in the Committee's sole and absolute judgment, be paid to or
expended for the benefit of such Director, his or her spouse, his or her
children or any other person or persons in fact dependent upon him or her in
such a manner as the Committee shall deem proper. Upon the death of any
Director, all benefits withheld from him or her and not paid to others in
accordance with the preceding sentence shall be distributed to such
Director's estate or to his or her creditors and if such Director shall have
descendants, including adopted children, then living, distribution shall
be made to such Director's then living descendants, including adopted
children, per stirpes.
9.3 EFFECTIVE DATE OF PLAN. The Plan shall be effective as of
December 9, 1993, subject to approval by the stockholders of the Company. Any
amounts credited to a Director's Deferred Compensation Account prior to such
stockholder approval shall be contingent on such approval.
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Amendment of Deferred Compensation Plan
for Non-Employee Directors
Adopted by the
Board of Directors
on February 1, 1996
NOW, THEREFORE, BE IT RESOLVED, that Section 6.2 of the Company's
Deferred Compensation Plan for Non-Employee Directors (the "Plan") be amended
with respect to amounts deferred under the Plan from and after January 1, 1996,
to read as follows:
"6.2 METHOD OF PAYMENT. The amount credited to a Director's
Deferred Compensation Account shall be paid, in whole or in part, to
the Director in a lump sum and/or in annual installments over a period
of not more than ten years as specified in each Director's Election
Form. A Director may elect to change his or her original payment
period election, as specified in such Director's Election Form;
provided, that (i) such change is approved by the Committee, (ii) the
election to change is made at least 18 months prior to date specified
in the electing Director's Election Form on which payment of the
amount credited to the Director's account is to commence, and (iii) a
Director may make such an election to change only one time, an such
election to change shall apply to all of the Director's Election Forms
with respect to amounts deferred under the Plan from and after January
1, 1996. In the event that a Director who makes an election to change
is a member of the Committee, such Director shall abstain from the
Committee's determination whether or not to approve the change.
Deferred Compensation Accounts shall be paid in kind, in cash, or
shares of Common Stock, as credited to the Account."