COOPER INDUSTRIES, LTD.
DIRECTORS DEFERRED COMPENSATION PLAN
(As Amended and Restated as of
November 4, 2008)
In order to comply
with the requirements of Section 409A of the Internal Revenue
Code of 1986, as amended, and the Treasury regulations and rulings
thereunder (collectively, “Section 409A”) and to
facilitate administration of deferrals under Section 409A, the
Cooper Industries, Ltd. Directors Deferred Compensation Plan is
being amended and restated as of November 4, 2008, with such
amendment and restatement being effective January 1, 2005.
Deferrals that were earned or vested after December 31, 2004,
including those for 2005, 2006, and 2007, and 2008 were made and
administered in good faith in accordance with the requirements of
Section 409A.
1.1
Definitions . Except as otherwise required by the context,
the terms used shall have the meanings hereinafter set
forth.
(a) “
Affiliate ” shall mean all employers, present and
future, with whom the Company is considered a single employer under
Sections 414(b) and 414(c) of the Code.
(b) “
Beneficiary ” shall mean the person who, in accordance
with the provisions of Article VII, shall be entitled to
receive a distribution of a Participant’s interest, or
portion thereof, under the Plan if a Participant dies prior to
receiving distribution of his entire interest.
(c) “
Board ” shall mean the Board of Directors of Cooper
Industries, Ltd.
(d) “
Change in Control ” shall mean a change in control in
the ownership or effective control of the Company, or in the
ownership of a substantial portion of the assets of the Company,
within the meaning of Section 409A.
(e) “
Code ” shall mean the Internal Revenue Code of 1986,
as amended from time to time.
(f) “
Committee ” shall mean the Committee on Nominations
and Corporate Governance of the Board.
(g) “
Company ” shall mean Cooper Industries, Ltd., a
Bermuda corporation, its corporate successors, and the surviving
corporation resulting from any merger of Cooper Industries, Ltd.
with any other corporation or corporations.
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(h) “
Cooper Deferral Plan ” shall mean the Cooper
Industries Management Incentive Compensation Deferral Plan, as
amended from time to time.
(i) “
Deferred Account ” shall mean the account established
pursuant to Article IV to which a Participant’s deferred
Fees and interest deemed to be earned thereon are
credited.
(j) “
Director ” shall mean any member of the Board who is
not an employee of the Company or an Affiliate.
(k) “
Fees ” shall mean the total cash fees, including
annual Board and committee retainers, the annual retainer fee (if
any) for serving as a chairperson of a Board committee or as the
presiding non-management Director, and any fees payable for
attendance at meetings of the Board or any of its committees,
payable to a Director during a Plan Year from the Company for
services as a Director.
(l) “
Participant ” shall mean any Director who participates
in the Plan. To the extent required by the context, Participant
shall include an inactive or former Participant.
(m) “
Plan ” shall mean the Cooper Industries, Ltd.
Directors Deferred Compensation Plan.
(n) “
Plan Year ” shall mean the 12-month period commencing
each May 1 and ending on the following April 30.
(o) “
Secretary ” shall mean the Secretary of the
Company.
(p) “
Section 409A ” shall mean Section 409A of
the Internal Revenue Code of 1986, as amended, and the Treasury
regulations and rulings thereunder.
(q) “
Separation from Service ” shall mean the termination
of service as a director, and the termination of all employment (if
any), with the Company and all Affiliates for any reason other than
death. Whether a Director has incurred a Separation from Service
shall be determined in accordance with
Section 409A.
1.2
Construction . Where necessary or appropriate to the meaning
hereof, the singular shall be deemed to include the plural, the
plural to include the singular, the masculine to include the
feminine, and the feminine to include the masculine.
ARTICLE II
ELIGIBILITY FOR PARTICIPATION
All Directors are
eligible to participate in the Plan.
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3.1 Deferral
Requirements and Election Forms
(a)
Deferral Requirements . A Director’s election to defer
Fees for any Plan Year shall be made on a written form prescribed
by the Company that complies with Articles III and V and
specifies:
(i) the type of
Fees being deferred;
(ii) the amount of
each type of Fees to be deferred for a Plan Year, by percentage or
by dollar amount; provided that in the Plan Year of a
Participant’s Separation from Service or death the percentage
or dollar amount shall be the actual amount withheld prior to the
effective date of the Separation from Service or death;
(iii) the date or
dates for payment of the deferred Fees, such that objectively
determinable amounts are payable at a date or dates that are
objectively determinable at the time of deferral in accordance with
Article V; and
(iv) the form of
payment of the deferred Fees.
(a) In
General . A Director may, not later than December 31
immediately preceding a Plan Year, elect, by delivering a properly
executed election form to the Secretary, to participate in the Plan
and to defer all or a portion of his Fees attributable to services
to be performed in the immediately following Plan Year. Such
election shall be irrevocable as of the end of each
December 31 with respect to Fees payable with respect to
services to be performed in the immediately following Plan Year for
which an election has been made (or continues) subject to
Section 5.1(b) and (c).
(b)
Certain First Year Directors . This Section 3.2(b) is
only applicable to a Director who has not previously been eligible
to participate in the Plan or in any other nonqualified account
balance plan of the Company or of any Affiliate that is required to
be aggregated with the Plan under Section 409A (a
“Qualifying Director”).
(i) Prior to
Election or Appointment . A Qualifying Director may elect, by
delivering a properly executed election form to the Secretary prior
to his election or appointment as a Director, to participate in the
Plan and to irrevocably defer all or a portion of his Fees to be
earned during the period starting on his date of election or
appointment and ending on the final day of the Plan Year, subject
to Section 5.1(b). A Qualifying Director may also make an
election within thirty (30) days of election or appointment,
pursuant to the immediately following paragraph.
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(ii) Within 30
Days of Election or Appointment . A Qualifying Director may, by
delivering a properly executed election form to the Secretary,
elect to participate in the Plan and to irrevocably defer all or a
portion of his Fees to be earned for services to be performed
subsequent to the deferral election and ending on the final day of
the Plan Year, subject to Section 5.1(b).
3.3 Duration
of Deferral Elections
Once a Participant
has elected to defer all or a portion of his Fees, such election
shall remain in effect for future Plan Years unless the Participant
changes or terminates the election on or prior to the
December 31 preceding the Plan Year for which the change or
termination is to be effective.
ARTICLE IV
PARTICIPANT ACCOUNTS
4.1
Establishment of Accounts
There shall be
established for each Participant a Deferred Account. Deferred Fees
shall be allocated to a Participant’s Deferred Account at the
time that such Fees would otherwise have been paid to such
Participant had no election to defer been made. To facilitate the
operation of the Plan, the Secretary may direct the maintenance of
sub-accounts within a Participant’s Deferred Account.
Deferred Accounts under the Plan shall continue to be maintained
until paid out pursuant to the terms of the Plan.
The funds
represented by the Deferred Account of a Participant shall be
deemed to earn interest in the manner and rate set forth in the
Cooper Deferral Plan.
4.3
Adjustments for Distributions
Deferred Accounts
shall be reduced for any distributions.
ARTICLE V
PAYMENT OF DEFERRED FEES
(a)
Initial Elections . At the time of making the election to
defer the payment of Fees, a Participant shall elect, on a
Company-approved form, the time and form of payment of such Fees
(and related income).
(i) The date for
the payment, or commencement of payment, shall be a specified
calendar year. Subject to any limitations imposed by the Secretary
and/or
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Section 409A, the specified calendar year
may be during the Participant’s service as a Director; the
earlier or later of the calendar year in which a Participant incurs
a Separation from Service or attains a specified age; or the
earliest of the Participant’s death, Separation from Service,
a specified calendar year, or a Change in Control.
(ii) The form of
the payment shall be either a lump sum or a series of substantially
equal annual installments over a period not t
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