EXHIBIT 4
CORINTHIAN COLLEGES, INC.
EXECUTIVE DEFERRAL PLAN
1. PURPOSE OF PLAN
The purpose of
this Plan is to promote the success of the Company by
providing a select group of management and
highly compensated employees an
opportunity to defer the payment of bonuses
and certain stock unit awards as an
additional means to attract, motivate and
retain such employees and to further
align the interests of participants with
those of the Company's stockholders
generally. Only Eligible Employees (as
defined herein) may participate in this
Plan.
2. DEFINITIONS
Whenever the
following words and phrases are used in this Plan, with
the first letter capitalized, they shall
have the meanings specified below.
"Award
Agreement" shall mean any writing setting forth the terms of
Stock Units credited under Section 4.2 of
this Plan that has been authorized by
the Administrator.
"Beneficiary" or
"Beneficiaries" as to a Participant shall mean the duly
appointed and currently acting personal
representative of the Participant's
estate (which shall include either the
Participant's probate estate or living
trust). In any case where there is no such
personal
representative of the
Participant's estate duly appointed and acting
in that capacity within ninety
(90) days after the Participant's death (or
such extended period as the
Committee determines is reasonably
necessary to allow such personal
representative to be appointed, but not to
exceed one hundred eighty (180) days
after the Participant's death), then the
Participant's
Beneficiary shall be
deemed to be the person or persons who can
verify by court order that they are
legally entitled to receive the benefits
specified hereunder.
If the Committee
has any doubt as to the proper Beneficiary
to receive payments pursuant to this
Plan, the Committee shall have the right,
exercisable in its reasonable
discretion, to cause the Participating
Affiliate that employs the Participant
to withhold such payments until this matter
is resolved to the Committee's
reasonable satisfaction. The payment of benefits under this
Plan to a
Beneficiary shall fully and completely
discharge all Participating Affiliates
and the Committee from all further
obligations under this Plan with respect to
the Participant.
"Board of
Directors" or "Board" shall mean the Board of Directors of
the Company.
"Cash
Bonus" shall mean the amount of incentive compensation (in
addition to base salary) payable to a
Participant by a Participating Affiliate
with respect to a particular Plan Year
that, but for any deferral election made
by such Participant under this Plan, would
have been payable in cash to such
Participant, as determined by the
Committee; provided, however, that the maximum
amount of Cash Bonus that may be taken into
account for purposes of a
Participant's deferral election under this
Plan for any Plan Year is 100 percent
of the amount of the Participant's Target
Bonus for such Plan Year.
"Change in Control Event" shall mean any of the following:
(a)
The acquisition by any
individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act
(a "Person")) of beneficial ownership (within the meaning of
Rule
13d-3 promulgated under the Exchange Act) of 30% or more of
either
(1) the then-outstanding shares of common stock of the Company
(the
"Outstanding Company Common Stock") or (2) the combined voting
power
of the then-outstanding voting securities of the Company
entitled
to vote generally in the election of directors of the Company
(the
"Outstanding Company Voting Securities"); provided, however,
that,
for purposes of this definition, the following acquisitions
shall
not constitute a Change in Control Event; (A) any acquisition
directly from the Company, (B) any acquisition by the Company,
(C) any acquisition by any employee benefit plan (or related
trust)
sponsored or maintained by the Company or any affiliate of the
Company or a successor, or (D) any acquisition by any entity
pursuant to a transaction that complies with clauses (c)(1),
(2)
and (3) below;
(b)
Individuals who, as of
the date this Plan is adopted by the Board
(the "Adoption Date"), constitute the Board (the "Incumbent
Board")
cease for any reason to constitute at least a majority of the
Board;
provided, however, that any individual becoming a director of
the
Company subsequent to the Adoption Date whose election, or
nomination for election by the Company's stockholders, was
approved
by a vote of at least three-fourths of the directors of the
Company
then comprising the Incumbent Board (including for these
purposes,
the new members whose election or nomination was so approved,
without counting the member and his predecessor twice) shall be
considered as though such individual were a member of the
Incumbent
Board, but excluding, for this purpose, any such individual
whose
initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or
removal
of directors of the Company or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board;
(c)
Consummation of a
reorganization, merger, statutory share exchange
or consolidation or similar corporate transaction involving the
Company or any of its Subsidiaries, a sale or other disposition
of
all or substantially all of the assets of the Company, or the
acquisition of assets or stock of another entity by the Company
or
any of its Subsidiaries (each, a "Business Combination"), in
each
case unless, following such Business Combination, (1) all or
substantially all of the individuals and entities that were the
beneficial owners of the Outstanding Company Common Stock and
the
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly,
more
than 50% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding voting securities
entitled to vote generally in the election of directors, as the
case
may be, of the entity resulting from such Business Combination
(including, without limitation, an entity that, as a result of
such
transaction, owns the Company or all or substantially all of
the
Company's assets directly or through one or more subsidiaries
(a
"Parent")) in substantially the same proportions as their
ownership
immediately prior to such Business Combination of the
Outstanding
Company Common Stock and the Outstanding Company Voting
Securities,
as the case may be, (2) no Person (excluding any entity
resulting
from such Business Combination or a Parent or any employee
benefit
plan (or related trust) of the Company or such entity resulting
from such Business Combination or Parent) beneficially owns,
directly or indirectly, 30% or more of, respectively, the then-
outstanding shares of common stock of the entity resulting from
such Business Combination or the combined voting power of the
then-outstanding voting securities of such entity, except to
the
extent that the ownership in excess of 30% existed prior to the
Business Combination, and (3) at least a majority of the members
of
the board of directors or trustees of the entity resulting from
such Business Combination or a Parent were members of the
Incumbent
Board at the time of the execution of the initial agreement or
of
the action of the Board providing for such Business Combination;
or
(d)
Approval by the
stockholders of the Company of a complete
liquidation or dissolution of the Company other than in the
context
of a transaction that does not constitute a Change in Control
Event
under clause (c) above.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Committee" shall mean the Compensation Committee of the Board,
which
shall administer the Plan in accordance
with Section 8 of this Plan.
"Common Stock" shall mean
the common stock of the Company, par value
$0.0001 per share, subject to adjustment
pursuant to Section 6 of this Plan.
"Company" shall mean Corinthian Colleges, Inc., and any
successor
corporation.
"Company Contribution Account" shall mean the bookkeeping
account
maintained by the Company on behalf of each
Participant that is credited with
Stock Units in accordance with Section
5.1.2 and Dividend Equivalents thereon in
accordance with Section 5.2.
"Crediting Date" with respect to a Participant shall mean the date
on
which the Board or the Committee (or other
person acting within his or her
delegated authority), as applicable,
approves the amount of the annual bonus
payable to such Participant with respect to
a particular fiscal year. With
respect to any Participant whose bonus
payments are made on a basis more
frequent than annually, such Participant's
Crediting Date for a fiscal year
shall be the date on which the Board or the
Committee (or its delegate) approves
the amount of the annual bonus payment to
such Participant with respect to such
fiscal year. In the event that any such
Participant is not entitled to an annual
bonus payment with respect to such fiscal
year, such Participant's Crediting
Date shall be the date on which the Board
or the Committee (or its delegate)
determines that such Participant is not
entitled to such annual bonus payment
or, if no such determination is made, the
date on which the Board or the
Committee (or its delegate) considers
officer-level annual bonuses generally
with respect to such fiscal year.
"Deferral Account" shall mean the bookkeeping account maintained by
the
Company on behalf of each Participant that
elects to defer his or her Cash Bonus
under this Plan and is credited with Stock
Units in accordance with Section
5.1.1 and Dividend Equivalents thereon in
accordance with Section 5.2.
"Dividend Equivalent" shall mean the amount of cash dividends or
other
cash distributions paid by the Company on
that number of shares of Common Stock
equal to the number of Stock Units credited
to a Participant's Stock Unit
Account as of the applicable record date
for the dividend or other distribution,
which amount shall be credited in the form
of additional Stock Units to the
Participant's Stock Unit Account, as
provided in Section 5.2.
"Eligible Employee" shall mean any officer or salaried key employee
of
a Participating Affiliate.
"Employer" means the Participating Affiliate that employed the
Participant with respect to deferred Cash
Bonus at the time the Participant
deferred such Cash Bonus.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974,
as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as
amended from time to time.
"Fair Market Value" on any date means (a) if the stock is listed
or
admitted to trade on a national securities
exchange, the closing price of the
stock on the Composite Tape, as published
in the Western Edition of The Wall
Street Journal, of the principal national
securities exchange on which the stock
is so listed or admitted to trade, on such
date, or, if there is no trading of
the stock on such date, then the closing
price of the stock as quoted on such
Composite Tape on the next preceding date
on which there was trading in such
shares; (b) if the stock is not listed or
admitted to trade on a national
securities exchange, the last/closing price
for the stock on such date, as
furnished by the National Association of
Securities Dealers, Inc. ("NASD")
through the NASDAQ National Market
Reporting System or a similar organization if
the NASD is no longer reporting such
information; (c) if the stock is not listed
or admitted to trade on a national
securities exchange and is not reported on
the National Market Reporting System, the
mean between the bid and asked price
for the stock on such date, as furnished by
the NASD or a similar organization;
or (d) if the stock is not listed or
admitted to trade on a national securities
exchange, is not reported on the National
Market Reporting System and if bid and
asked prices for the stock are not
furnished by the NASD or a similar
organization, the value as reasonably
established by the Committee at such time
for purposes of this Plan. Any
determination as to fair market value made
pursuant to this Plan shall be determined
without regard to any restriction
other than a restriction which, by its
terms, will never lapse, and shall be
conclusive and binding on all persons. The
Committee may, however, provide that
the Fair Market Value shall equal the last
closing price of a share of Common
Stock as reported on the composite tape for
securities listed on a national
securities exchange or as furnished by the
NASD and available on the date in
question or the average of the high and low
prices of a share of Common Stock as
reported on the composite tape for
securities listed on a national securities
exchange or as furnished by the NASD for
the date in question or the most recent
trading day.
"Participant" shall
mean any Eligible Employee who is selected for
participation in the Plan and who elects to
defer Cash Bonus in accordance with
Section 4.1 and/or receives a credit of
Stock Units from the Company pursuant to
Section 4.2.
"Participating Affiliate" shall mean the Company or a Subsidiary
that
elects to adopt this Plan for the benefit
of its employees. "Participating
Affiliates" means, collectively, the
Company and such Subsidiaries that have
elected to adopt this Plan.
"Payment Period" shall mean the period between October 1 and
November
30, inclusive, of a Plan Year.
"Plan" shall mean this Corinthian Colleges, Inc. Executive
Deferral
Plan as set forth herein and as amended
from time to time.
"Plan Year" shall mean the 12 consecutive month period beginning
July 1
each year.
"Stock Unit" shall mean a non-voting unit of measurement which
is
deemed solely for bookkeeping purposes to
be equivalent to one outstanding share
of Common Stock (subject to Section 6)
solely for purposes of this Plan.
"Stock Unit Account" shall refer collectively to a
Participant's
Deferral Account and Company Contribution
Account (if any).
"Subsidiary" shall mean each corporation, which is a member of
a
controlled group of corporations (within
the meaning of Section 414(b) of the
Code) of which the Company is a component
member.
"Target Bonus" shall mean the "target bonus" established for a
Participant by the Committee for each Plan
Year as announced to the Participant
at the beginning of such Plan Year.
"Termination Date" with respect to a Participant shall mean the
first
date that the Participant is no longer
employed by the Company or one of its
Subsidiaries and, if applicable, is no
longer a member of the Board of
Directors.
"Trust" means a grantor trust maintained under the terms of the
related
Trust Agreement.
"Trust Agreement" means a trust agreement entered into by and
between a
Participating Affiliate and the related
Trustee with respect to this Plan, as
amended from time to time.
"Trustee" means the entity, which has entered into the related
Trust
Agreement as trustee of the Trust
thereunder, and any duly appointed successor.
3.
PARTICIPATION
The
Committee shall select from the class of Eligible Employees
those
particular Eligible Employees who will be
eligible to defer all or a portion of
their Cash Bonuses in accordance with
Section 4.1. If the Committee determines
in its sole discretion that a Participant
no longer qualifies as a member of a
select group of management or highly
compensated employees, as membership in
such group is determined in accordance with
Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA, or that the inclusion
of any Eligible Employee in this Plan
could violate any applicable law or
jeopardize the status of this Plan as a plan
intended to be "unfunded" and "maintained
by an employer primarily for the
purpose of providing deferred compensation
for a select group of management or
highly compensated employees" within the
meaning of ERISA Sections 201(2),
301(a)(3) and 401(a)(1), the Committee
shall have the right, in its sole
discretion, to (i) terminate any deferral
election the Participant has made for
the remainder of the Plan Year in which the
Committee takes such action, (ii)
prevent the Participant from making future
deferral elections, (iii) immediately
distribute the Participant's then vested
Stock Units and (other than the payment
when vested of any of the Participant's
unvested Stock Units) terminate the
Participant's participation in this Plan,
and/or (iv) take such further
reasonable action that the Committee deems
appropriate in the circumstances.
4.
CONTRIBUTIONS
4.1 Elections to Defer Cash
Bonuses.
4.1.1 General Rule.
Subject to the minimum
deferral provisions in
Section 4.1.2 below, an Eligible Employee selected in
accordance
with Section 3 may elect to defer any percentage or dollar
amount of his or her Cash Bonus with respect to a Plan Year up
to
90% of the amount of such Cash Bonus; provided, however, that
(a)
such Eligible Employee must file a Cash Bonus deferral election
with the Committee, on a form and in a manner prescribed by the
Committee, by the earlier of (i) the later of the last business
day immediately preceding the Plan Year with respect to which
such election is effective or, as to any newly eligible
employee, the 30th day following the employee's employment
commencement date, or (ii) such other deadline as may be
established by the Committee with respect to that Plan Year;
and
(b) no election shall be effective to reduce the Cash Bonus
payable to an Eligible Employee for a Plan Year to an amount
which is less than the amount that the Company or a Subsidiary
is required to withhold from such Eligible Employee's Cash
Bonus
for such Plan Year for purposes of federal, state and local (if
any) income tax, employment tax (including without limitation
Federal Insurance Contributions Act (FICA) tax), and other tax
withholdings.
4.1.2 Minimum
Deferrals. For each Plan Year during which an Eligible
Employee is a Participant, the Committee may establish a
minimum
amount that must be elected by a Participant pursuant to his or
her deferral election in order for the deferral election to be
valid with respect to that Plan Year.
4.1.3 Duration
of Cash Bonus Deferral Election. Any Cash Bonus deferral
election made under this Section 4.1 shall be irrevocable and
shall apply only to the Cash Bonus payable with respect to the
Plan Year to which the election relates.
4.1.4 Suspension
of Deferral Elections. Notwithstanding anything else
contained herein to the contrary, if a Participant receives a
hardship distribution under any plan described in Section
401(k)
of the Code maintained
by the Company or any of its affiliates,
the Participant may not make any deferrals to this Plan during
the period required under the hardship distribution rules of
the
applicable 401(k) plan. Accordingly, any deferral election
under
this Plan shall be suspended for such period of time.
4.2 Company Contributions.
The Company may
determine at any time, in its
sole and complete discretion, to grant an award of Stock Units
with
respect to a Plan Year to one or more Participants under this Plan.
Any
Stock Units awarded under this Section 4.2 shall be evidenced by
an
Award Agreement and awarded under the Company's 2003 Performance
Award
Plan or any similar successor stock plan of the Company.
Stock Units
credited under this Section 4.2 shall be allocated to the
Participant's
Company Contribution Account and shall be subject to vesting and
the
other provisions of the applicable Award Agreement. As to such Stock
Units, this Plan
is subject to and shall be construed consistently with
the applicable terms of the stock plan under which the award was
granted
and the applicable Award Agreement. Nothing contained in this
Section
4.2 shall be deemed to impose or constitute any obligation on
the
Committee, the Company or any Subsidiary to make any award
hereunder.
5. STOCK UNIT
ACCOUNTS
5.1 Crediting of Stock Units. The
Committee shall establish and maintain a
Deferral Account for each Participant who has elected under
Section
4.1.1 to defer a portion of his or her Cash Bonus and a Company
Contribution Account for each Participant who has received an award
of
Stock Units under Section 4.2.
5.1.1 Deferrals.
On or as soon as administratively practical after
the applicable Crediting Date for a Participant who has elected
to defer his or her Cash Bonus under this Plan with respect to
a particular fiscal year, the Committee shall credit such
Participant's Deferral Account with a number of Stock Units
determined by dividing the amount of such Cash Bonus deferred
by the Participant to this Plan by the Fair Market Value of a
share of Common Stock as of that Crediting Date.
5.1.2 Company
Contributions. As of the date specified in the
applicable Award Agreement, the Committee shall credit the
Participant's Company Contribution Account with the number of
Stock Units subject to the particular award.
5.1.3
Subaccounts. The Committee shall establish separate subaccounts
under a Participant's Stock Unit Account as necessary or
advisable to separately account for Stock Units that are
subject
to different vesting schedules or different distribution
elections.
5.2 Dividend Equivalents.
As of the date on
which the Company pays a
dividend on its Common Stock (the "Dividend Payment Date"), the
Participant's Stock Unit Account shall be credited with
additional
Stock Units equal in number to (i) the amount of the Dividend
Equivalents representing cash dividends paid on that number of
shares
equal to the aggregate number of Stock Units in the Participant's
Stock
Unit Account at the start of business as of the relevant
dividend
record date, divided by (ii) the Fair Market Value of a share of
Common
Stock as of the Dividend Payment Date.
5.3 Account Not Funded; No
Stockholder Rights. A
Participant's Stock Unit
Account shall be a memorandum account on the books of the Company.
The Stock Units credited to a Participant's Stock Unit Account
shall
be used solely as a device for the determination of the number
of
shares of Common Stock to be eventually distributed to such
Participant
in
accordance with this Plan. The Stock Units shall not be treated
as
property or (subject to Section 9.2) as a trust fund of any kind.
No
Participant shall be entitled to any voting or other
stockholder
rights with respect to Stock Units granted or credited under this
Plan.
The number of Stock Units credited and the Common Stock to which
the
Participant is entitled under this Plan) shall be subject to
adjustment
in accordance with Section 6 of this Plan.
5.4 Reduction in Stock
Units. A Participant's Stock Unit Account shall be
reduced by the number of Stock Units with respect to which
payment,
distribution or a withdrawal is made, or which are
extinguished.
5.5 Vesting of Stock
Units. Stock Units credited to a Participant's
Deferral Account are 100 percent vested at all times. Stock
Units
credited to a Participant's Company Contribution Account shall
vest
as provided in the applicable Award Agreement. Stock Units credited
as
Dividend Equivalents shall vest at the same time as the Stock Units
to
which they relate.
6. ADJUSTMENTS IN CASE OF
CHANGES IN COMMON STOCK
Upon the
occurrence of an Event (as defined below), the Committee shall
make adjustments as it deems appropriate in
the number and kind of securities or
other consideration that may become payable
with respect to the Stock Units
credited under this Plan. If an Event shall
occur and any Stock Units have not
been fully vested and paid upon such Event
or prior thereto, such Stock Units
may become payable in securities or other
consideration (the "Restricted
Property") rather than in the Common Stock
otherwise payable in respect of such
Stock Units. Such Restricted Property shall
become payable at such time or times
(if any) as the related Stock Units become
payable in accordance with the
applicable Award Agreement and this Plan
and shall be subject to the same
vesting conditions as such related Stock
Units. Notwithstanding the foregoing,
to the extent that the Restricted Property
includes any cash, the commitment
hereunder shall become an unsecured promise
to pay an amount equal to such cash
(with earnings attributable thereto as if
such amount had been invested,
pursuant to policies established by the
Committee, in interest bearing, FDIC
insured (subject to applicable insurance
limits) deposits of a depository
institution selected by the Committee) at
such times and in such proportions as
the related Stock Units become payable in
accordance with the applicable Award
Agreement and this Plan. Notwithstanding
the foregoing, the Stock Units and any
Common Stock or other securities or
property payable in respect of the Stock
Units shall continue to be subject to
proportionate and equitable adjustments
(if any) under this Section 6 consistent
with the effect of such events on
stockholders generally (but without
duplication of benefits if Dividend
Equivalents are credited), as the Committee
determines to be necessary or
appropriate, and in the number, kind and/or
character of shares of Common Stock
or other securities, property and/or rights
payable in respect of Stock Units
granted under this Plan. For purposes of
this Section 6, "Event" means a
liquidation, dissolution, Change in Control
Event, merger, consolidation, or
other combination or reorganization, or a
recapitalization, reclassification,
extraordinary dividend or other
distribution (including a split up or a spin off
of the Company or any significant
Subsidiary), or a sale or other distribution
of substantially all the assets of the
Company as an entirety.
7.
DISTRIBUTIONS
7.1 In-Service Distribution Elections
for Deferrals. At the time of making
the
election to defer Cash Bonus for a Plan Year pursuant to
Section
4.1,
the Participant shall designate, on a form and in a manner
prescribed by the Committee, the time and manner in which the
Stock
Units credited with respect to such deferred Cash Bonus will be
paid.
A Participant may make
only one payment election for all Cash Bonus
deferred pursuant to that election. A payment election pursuant to
this
Section 7.1 shall apply only to the Cash Bonus for the Plan Year
with
respect to which the related deferral election is effective. A
Participant must make a new election pursuant to this Section 7.1
by the
deferral election deadline for the related Plan Year, with respect
to
each
Plan Year for which the Participant wants to elect an
in-service
distribution.
7.1.1 Timing of
In-Service Distributions. The Participant may elect the
Plan Year in which payment of the Stock Units credited pursuant
to his or her deferrals will be made (or, if installments are
elected, that such installment payments will commence);
provided,
however, that (a) the Participant may not elect a Plan Year
that
begins le
