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Exhibit 10.3
THE LUBRIZOL CORPORATION
2005 Deferred Compensation Plan For
Directors
(As Amended, October 1, 2008)
1. Purpose . The purpose of this 2005 Deferred
Compensation Plan For Directors (the "Plan") is to continue to
permit any member of the Board of Directors (the "Participant") of
The Lubrizol Corporation (the "Company"), to defer all or a portion
of the compensation earned as a director in calendar years
beginning on or after January 1, 2005, until after the
Participant separates from service as a director, all as provided
in the Plan.
2. Administration . The Plan shall be administered by the
Organization and Compensation Committee of the Board of Directors
of the Company (the "Committee"). The Committee’s
interpretation and construction of all provisions of this Plan
shall be binding and conclusive. In the event that a Participant is
a member of the Committee, such Participant shall not participate
in any decision of the Committee relating to that
Participant’s participation in this Plan.
3. Right to Defer Compensation .
(a) Any director of the Company may, at any time prior to
January 1 of a given calendar year, elect to defer under this
Plan all, or such portion as the director may designate, of
(i) that director’s annual retainer fee, (ii) the
attendance fees for attending directors’ meetings or
committees thereof and/or (iii) stock compensation under The
Lubrizol Corporation 2005 Stock Incentive Plan. All compensation
deferred shall be deferred on the day that such compensation would
otherwise have been paid to the director.
(b) The election described in paragraph (a) shall be made
by written notice delivered to the Vice President, Human Resources,
of the Company specifying (i) the portion of designated
compensation to be deferred for such year, (ii) time of
distribution, and (iii) if applicable, the payment option.
(c) The election under this Section 3 shall take effect on
the first day of the calendar year following the year in which the
election is made. A new election must be made for each calendar
year.
(d) Notwithstanding paragraphs (a), (b) and (c), the first
year a Participant becomes eligible to participate in the Plan, he
may make an initial deferral election within 30 days after he
becomes eligible to participate but only with respect to
compensation paid for services performed after the election.
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4. Deferral of Cash Compensation
.
(a) On the date the cash compensation (and effective
January 1, 2008, stock compensation) deferred under the Plan
would have become payable to the Participant in the absence of an
election under the Plan to defer payment thereof, the amount of
such deferred compensation shall be credited to a Stock Deferral
Account and/or any of the Cash Deferral Account investment
portfolios designated as available by the Committee from time to
time. All Deferral Accounts shall be established and maintained for
each Participant in the Company’s accounting books and
records and the Company shall be under no obligation to purchase
any investments designated by the Participant.
(b) Participant’s Cash Deferral Accounts shall be credited
with any gains or losses equal to those generated as if the
Participant’s Cash Deferral Account balances had been
invested in the applicable investment portfolio(s) selected by the
Participant
(c) A Participant’s deferred cash compensation (and
effective for deferrals after January 1, 2008, stock
compensation) credited to a Participant’s Stock Deferral
Account shall be used to determine the number of full and
fractional units ("Units") representing Company Common Shares
("Shares") which the deferred amount would purchase at the closing
price for the Shares on the New York Stock Exchange ("NYSE")
composite transactions reporting system on the date that the
deferred amount is credited pursuant to paragraph (a) and if
Shares were not traded on that date on the NYSE, then such
computation shall be made as of the first preceding day on which
Shares were so traded. The Company shall credit the
Participant’s Stock Deferral Account with the number of full
and fractional Units so determined. A Participant’s Stock
Deferral Account shall be administered in accordance with
Section 5(b) through (e).
(d) A Participant may elect pursuant to rules established by the
Committee to transfer a portion or all of the balance of any
Deferral Account established under this Section 4 to any other
such Deferral Account; provided, however, that effective
April 28, 2008, any stock compensation deferred into the Plan
will be allocated to a Stock Fund Account where it must remain for
more than six months after deferral.
5. Deferral of Stock Compensation.
(a) Prior to January 1, 2008, at the time that Shares are
distributable to a Participant, who has elected to defer the
receipt thereof under Section 3, in lieu of Shares being
issued, there shall be credited to a separate Stock Deferral
Account for the Participant, full stock equivalent units ("Units")
which shall be established and maintained on the Company’s
records. One Unit shall be allocated to the Stock Deferral Account
for each such Share. The balance of a Stock Deferral Account
established under this Section 5(a) pursuant to deferrals
under Section 3 may not be transferred to any other Deferral
Account.
(b) As of each dividend payment date established by the Company
for the payment of cash dividends with respect to its Shares, the
Company shall credit each separate Stock Deferral Account of a
Participant with an additional number of whole and/or fractional
Units equal to:
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(i)
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the product of (x) the dividend
per Share which is payable with respect to such dividend payment
date, multiplied by (y) the number of whole and fractional
Units credited to the separate Stock Deferral Account of a
Participant as of such payment date;
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divided by
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(ii)
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The closing price of a Share on the
dividend payment date (or if Shares were not traded on that date,
on the next preceding day on which Shares were so traded), as
reported on the NYSE-composite tape.
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(c) At no time prior to actual delivery of Shares
pursuant to the Plan, shall the Company be obligated to purchase or
reserve Shares for delivery of a Participant and the Participant
shall not be a shareholder nor have any of the rights of a
shareholder with respect to the Units credited to the
Participant’s Stock Deferral Accounts.
(d) In the event of any change in the number of outstanding
Shares by reason of any stock dividend, stock split up,
recapitalization, merger, consolidation, exchange of shares or
other similar corporate change, the number of Units in each
separate Stock Deferral Account of a Participant shall be
appropriately adjusted to take into account any such event.
6. Payment of Deferred Compensation .
(a) In the event a Participant separates from service prior to
commencing to receive scheduled withdrawal payments of the
Participant’s Deferral Accounts, such scheduled withdrawal
payments, if any, that have not commenced pursuant to
Section 7, and the amount selected by Participant to be paid
upon a separation from service, shall be to the Participant in:
(i) a single lump sum; (ii) annual, semi-annual or
quarterly substantially equal installments over a period, not
exceeding twenty (20) years; or (iii) a specified
percentage in a lump sum followed by annual, semi-annual or
quarterly substantially equal installments over a period, not
exceeding twenty (20) years, as the Participant shall have
selected pursuant to Section 3(b). Such periodic payments
shall begin or the lump sum payment shall be made, as the case
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