AMENDMENT NUMBER ONE TO THE
FINLAY ENTERPRISES, INC.
DIRECTOR DEFERRED COMPENSATION AND STOCK PURCHASE
PLAN
WHEREAS,
Finlay Enterprises, Inc. (the “Corporation”)
maintains the Finlay Enterprises, Inc. Director Deferred
Compensation and Stock Purchase Plan (the
“Plan”);
WHEREAS,
pursuant to Section 12 of the Plan, the Corporation may amend
the Plan at any time; and
WHEREAS,
the Corporation wishes to amend the Plan to (1) provide that
no future deferrals may be made under the Plan; (2) provide
that cash awards shall be issued under the Plan in lieu of
RSUs for eligible director fees deferred pursuant to the Plan
with respect to the third and fourth quarters of the fiscal
year ending January 31, 2009, and that no matching RSUs will
be payable with regard to such amounts; (3) provide that, in
accordance with the transition relief provided under Internal
Revenue Service Notice 2007-86, 2007-46 IRB 990 (the
“Transition Relief”), eligible director fees that
relate to the third and fourth quarters of the fiscal year
ending January 31, 2009 will be paid on February 2, 2009; and
(4) make such amendments to the Plan as necessary to comply
with the requirements of Section 409A of the Internal Revenue
Code of 1986, as amended, and the guidance promulgated
thereunder (“Code Section 409A”).
NOW,
THEREFORE, the Plan is hereby amended effective as of the
22
nd day
of May, 2008 as set forth below.
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1.
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Article
3 of the Plan is hereby amended to include the following language
at the end thereof:
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“Accordingly,
with respect to the May 5, 2008 Award Date, a reduced amount
of RSUs equal to the shares available for issuance under the
Long Term Incentive Plans, shall be credited to Accounts on
May 5, 2008 and the remaining amount of RSUs due to be
credited shall be credited as soon as practicable after shares
of Common Stock become available for issuance under the Long
Term Incentive Plans, based on the value of the RSUs on May 5,
2008. Notwithstanding the foregoing, regardless of when such
RSUs become available for issuance, vesting with regard to
such awards shall begin as of the May 5, 2008 Award Date, in
accordance with Section 7.1 hereof.”
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2.
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Section
6.1 of the Plan is hereby amended to include the following language
at the end thereof:
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“In
the event the aggregate number of shares of Common Stock that
are issuable or being used for reference purposes under the
Plan for any applicable period exceeds the maximum number of
shares of Common Stock available for issuance under the Finlay
Enterprises, Inc. 2007 Long Term Incentive Plan, solely with
respect to Eligible Director Fees otherwise payable with
respect to the third and fourth quarters of the fiscal year
ending January 31, 2009, a cash amount equal to the amount of
the Eligible Director Fees deferred pursuant to Section 6.2
below shall be credited to the Participant’s Account, on
a book entry basis (the ‘Cash Award’), in lieu of
RSUs. Such Cash Award shall be credited to the
Participant’s Account as soon as practicable following
the Award Date, and shall be credited with interest from the
Award Date through the fiscal year ending January 31, 2009.
Interest shall be calculated based on the Fidelity Managed
Income Portfolio II interest rate on January 31, 2009. Cash
Awards (including interest) shall be subject to the terms of
the Plan to the extent not inconsistent with this
paragraph.
In
the event that Cash Awards are issued pursuant to this Section
6.1, all references herein to ‘RSU’ shall mean
‘Cash Award,’ to the extent not inconsistent with
the t
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