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REEBOK
EXECUTIVE DEFERRED COMPENSATION PLAN
AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2004
1. PURPOSE AND SCOPE OF PLAN; EFFECTIVE DATE.
The purpose of this Plan is to reward key executives and to provide a
select group of managerial and highly compensated employees with
unfunded nonqualified deferred compensation, as more fully described
herein. This Plan incorporates by reference each of the Compensation
Deferral Plan ("Deferral Plan"), the Excess Benefit Plan ("Excess
Benefit Plan") and the Supplemental Executive Retirement Plan ("SERP")
previously established and maintained by the Company for the benefit of
eligible employees, which plans are made a part hereof and are subject
to all of the terms and conditions hereof, effective as of the
Effective Date.
The "Effective Date" of this Plan is January 1, 2004.
2. DEFINITIONS.
The following terms shall have the meanings specified below, unless a
different meaning is clearly indicated by the context.
2.1 "Account" means, for each Participant, the account established for
his or her benefit under the Deferral Plan or the Excess Benefit Plan.
2.2 "Administrator" means the Committee, or the executive officer(s) to
whom the Committee has delegated its authority pursuant to Section 3.1
herein.
2.3 "Board" means the Board of Directors of Reebok International Ltd.
2.4 "Code" means the Internal Revenue Code of 1986, as from time to
time in effect. Reference to any section or subsection of the Code
includes reference to any comparable or succeeding provisions of any
legislation which amends, supplements or replaces such section or
subsection.
2.5 "Committee" means the Management Development and Compensation
Committee of the Board.
2.6 "Company" means Reebok International Ltd., any affiliates that
adopt the Plan with the knowledge and consent of the Administrator,
and any successor to all or a major portion of the Company's assets or
business which assumes the obligations of the Company generally.
2.7 "Employee" means an employee of the Company or its subsidiaries.
2.8 "Participant" means an Employee who participates in the Plan.
2.9 "Plan" means the Reebok International Ltd. Executive Deferred
Compensation Plan set forth herein, as amended from time to time.
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2.10 "Plan Year" means each 12 month period ending each December 31.
2.11 "SERP Participant" means a key executive of the Company
selected by the Committee to participate in the SERP.
3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR. The Plan will be administered by the
Committee, provided that the Committee has the authority to delegate
any aspect of the Plan's administration to any person or persons.
References in the Plan to the Committee shall mean references to the
delegee, where appropriate.
3.2 PLAN ADMINISTRATION. The Committee has the full discretionary power
and authority to interpret the Plan, select employees to participate in
the Plan, determine benefit amounts, make all other decisions relating
to the administration and operation of the Plan, and may promulgate
rules and regulations governing the administration and operation of the
Plan and its own acts and proceedings. The decisions of the Committee
relating to the Plan will be final and conclusive on all persons.
4. ACCELERATION OF PAYMENT
4.1 ELECTION TO ACCELERATE. Notwithstanding any other provisions of the
Plan to the contrary, with respect to any or all of the benefits
payable under the Deferral Plan or the Excess Benefit Plan, a
Participant may elect at any time prior to the commencement of the
calendar year in which a "Payment Event" (as hereinafter defined)
occurs, to have the vested and non forfeitable benefits credited to the
Participant's Account (including Interest), paid in the form of a
single lump sum cash payment coincident with or as soon as reasonably
practicable following the occurrence of such Payment Event. In
addition, the Committee may, in its sole discretion, extend this
election to any SERP Participant who is otherwise eligible to receive
the payment of a benefit but for the fact that he or she remains
employed by the Company or is presently in pay status; in that case,
the payment will be in the form of the lump sum actuarial equivalent of
the accrued benefit determined in accordance with the SERP. To the
extent that a the payment of a benefit is accelerated hereunder, the
Participant shall cease participation under the Deferral Plan, the
Excess Plan or the SERP, as the case may be, and shall be entitled to
no further payments under such plan with respect to which the
acceleration election has been made.
4.2 PAYMENT EVENTS. For purposes of the Plan, a "Payment Event" shall
occur upon the earliest of (a) a Change in Control or (b) a
Downgrade Event.
4.2.1 A Change of Control will occur for purposes of
this Agreement if (i) any Person (other than Paul Fireman)
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Act) of securities of the Company representing more than
30% of the combined voting power of the Company's
then-outstanding securities, (ii) there is a change of control
of the Company of a kind which would be required to be reported
under Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Act (or a similar item in a similar schedule or
form), whether or not the
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Company is then subject to such reporting requirement, (iii)
the Company is a party to a merger, consolidation, sale of
assets or other reorganization, or a proxy contest, as a
consequence of which members of the Board in office
immediately prior to such transaction or event constitute
less than a majority of the Board thereafter, or (iv)
individuals who, at the date hereof, constitute the Board
(the "Continuing Directors") cease for any reason to
constitute a majority thereof, provided, however, that any
director who is not in office at the date hereof but whose
election by the Board or whose nomination for election by
the Company's shareholders was approved by a vote of at
least two-thirds of the directors then still in office who
either were directors at the date hereof or whose election
or nomination for election was previously so approved shall
be deemed to be a Continuing Director for purposes of this
Plan.
Notwithstanding the foregoing provisions of this paragraph
4.2.1, a "Change of Control" will not be deemed to have
occurred solely because of the acquisition of securities of the
Company (or any reporting requirement under the Act relating
thereto) by an employee benefit plan maintained by the Company
for its employees.
4.2.2 A "Downgrade Event" will occur if the Company's
credit rating is lower than (a) BBB-, as defined by Standard &
Poors, or (b) Baa3, as defined by Moody's Investment Services,
or (c) if the Company is notified that it is on negative watch
for possible down grade to a rating below that set forth in (a)
or (b) herein.
4.3 ELECTION. Any election to accelerate the payment of any benefit
hereunder shall be made on a form approved or prescribed by the
Administrator, and shall be irrevocable by the Participant for the Plan
Year in which the election is made.
5. MISCELLANEOUS
5.1 PLAN NOT FUNDED.
5.1.1 Nothing herein shall be construed as requiring
the Company or any subsidiary to establish a trust or otherwise
to set aside assets to fund the benefits hereunder, and nothing
herein shall be construed as giving any Participant any rights
to particular assets of the Company or any subsidiary. The
rights of the Participant under this Plan are those of the
general creditor only.
5.1.2 The Company may, but is not required to,
establish a trust of which the Company is treated as the owner
under subpart E, part I, subchapter J, chapter 1, subtitle A of
the Internal Revenue Code of 1986, as amended, (a "grantor
trust") and may deposit funds with the trustee of the grantor
trust (the "Trustee") sufficient to satisfy the benefits
provided under the Plan. If the Company establishes such a
grantor trust for the benefit of the SERP Participants and, if
at the time of a "Change of Control," as defined in Section
4.2.1, the grantor trust has not been fully funded, the Company
shall, within the time and manner specified under
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such trust, deposit in such trust amounts sufficient to satisfy
all obligations under the SERP as of the date of deposit. In
all events, however, the Company shall remain ultimately liable
for the benefits payable under the SERP, and to the extent the
assets at the disposal of the Trustee are insufficient to
enable the Trustee to satisfy all benefits, the Company shall
pay all such benefits necessary to meet its obligations under
the SERP.
5.2 BENEFITS INALIENABLE. A Participant's right to a benefit under the
Plan cannot be assigned, pledged, hypothecated or otherwise alienated,
except that a Participant may designate a beneficiary under the
Deferral Plan or the Excess Benefit Plan to receive the balance to the
credit of the Participant's Account (as such amount is determined in
accordance with the Deferral Plan or the Excess Benefit Plan, as the
case may be) in the event of the Participant's death. Such beneficiary
designation must be on a form prescribed or approved by the
Administrator; absent any effective beneficiary designation, the
beneficiary will be deemed to be the Participant's estate. The Plan
shall be binding upon the heirs, executors, administrators, successors
and assigns of the parties, including each Participant and beneficiary,
present and future.
5.3 NO CONTINUING EMPLOYMENT. Nothing in the Plan shall be construed as
conferring on any Employee rights to continued employment with the
Company or any of its subsidiaries, or as constraining the right of the
Company or its subsidiaries to terminate the employment of any
Employee.
5.4 AMENDMENT AND TERMINATION. This Plan may be terminated at any time
by the Board and may be amended at any time by the Board or the
Committee, PROVIDED, that no such amendment or termination shall
deprive any Participant of the right to vested amounts then credited to
his or her Excess Benefit Plan Account hereunder. Except as otherwise
specified by the Board, upon termination of the Plan all accounts
hereunder shall be promptly distributed. This Plan may be amended or
terminated at any time and in any respect by the Committee or the
Company, and the Committee may, in its sole discretion, at any time
amend individual arrangements with Participants.
5.5 LEGAL FEES AND EXPENSES. The Company shall pay all legal fees and
expenses, including but not limited to counsel fees, stenographer fees,
printing cost, etc. reasonably incurred by a Participant in obtaining
any benefit to which the Participant is entitled under this Plan.
5.6 GOVERNING LAW. This Plan shall be construed and applied in
accordance with the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, Reebok International Ltd. has caused this Plan to
be executed by its officer hereunto duly authorized this 11th day of February,
2004.
REEBOK INTERNATIONAL LTD.
/s/ David A. Pace
By: ________________________________