COOPER TIRE & RUBBER
COMPANY
1998 NON-EMPLOYEE DIRECTORS COMPENSATION DEFERRAL PLAN
(AS AMENDED AND RESTATED AS OF JANUARY 1, 2005)
Amended for Section 409A Changes effective as of May 7,
2008
1.
Purpose. The purpose of the Plan is to provide qualified
individuals who are not employees of the Company who serve as
members of the Board with equity compensation in addition to their
Director’s Fees and with an opportunity to defer payment of a
portion of their Director’s Fees in accordance with the terms
and conditions set forth herein.
2.
Definitions. For the purposes of the Plan, the following
capitalized words shall have the meanings set forth
below:
“Annual
Fees” means the cash portion of (i) any annual fee
payable to a Non- Employee Director for service on the Board;
(ii) any other fee determined on an annual basis and payable
for service on, or for acting as chairperson of, any committee of
the Board, and (iii) any similar annual fee or fees payable in
respect of service on the board of directors of any Subsidiary or
any committee of any such board of directors.
“Annual
Meeting” means an annual meeting of the Company’s
stockholders.
“Annual
Units” means Phantom Stock Units to be awarded to
Non-Employee Directors as additional compensation for service on
the Board pursuant to Section 5(b).
“Beneficiary”
or “Beneficiaries” means an individual or entity
designated by a Non-Employee Director on a Beneficiary Designation
Form to receive Deferred Benefits in the event of the Non-Employee
Director’s death; provided, however, that, if no such
individual or entity is designated or if no such designated
individual is alive at the time of the Non-Employee
Director’s death, Beneficiary shall mean the Non-Employee
Director’s estate.
“Beneficiary
Designation Form” means a document, in a form approved by the
Committee to be used by Non-Employee Directors to name their
respective Beneficiaries. No Beneficiary Designation Form shall be
effective unless it is signed by the Non-Employee Director and
received by the Committee prior to the date of death of the
Non-Employee Director.
“Board”
means the Board of Directors of the Company.
“Code”
means the Internal Revenue Code of 1986, as amended, and the
applicable rules and regulations promulgated thereunder.
“Committee”
means the committee of the Board that has been appointed to
administer the Plan or, if no committee has been appointed, the
Board.
“Common
Stock” means the common stock, par value $1.00 per share, of
the Company.
“Companies”
means the Company and each Subsidiary.
“Company”
means Cooper Tire & Rubber Company, a Delaware corporation, or
any successor to substantially all of its business.
“Deferral
Election Form” means a document, in a form approved by the
Committee, pursuant to which a Non-Employee Director makes a
deferral election under the Plan.
“Deferral
Period” means each period commencing on the date of an Annual
Meeting and ending on the date immediately preceding the next
Annual Meeting. The first Deferral Period under the Plan shall
commence on the first day of the first fiscal quarter of the
Company to begin after May 5, 1998. If an individual becomes
eligible to participate in the Plan after the commencement of a
Deferral Period, the Deferral Period for the individual shall be
the remainder of such Deferral Period.
“Deferred
Benefit” means the sum of (i) any amount that will be
paid on a deferred basis under the Plan to a Non-Employee Director
who has made a deferral election pursuant to Section 5 plus
(ii) the amount payable with respect to the Annual
Units.
- 1 -
“Deferred
Compensation Account” means the bookkeeping record
established for each Non-Employee Director. A Deferred Compensation
Account is established only for purposes of measuring a Deferred
Benefit and not to segregate assets or to identify assets that may
be used to pay a Deferred Benefit.
“Director’s
Fees” means the aggregate of a Non-Employee Director’s
Annual Fees and Per Diem Fees. “Effective Date” means
May 5, 1998, which was the original Effective Date of the
Plan.
“Election
Date” means the December 31st immediately preceding the
commencement of a Deferral Period. If an individual first becomes
eligible to participate in the Plan on an Annual Meeting date or
after the start of a Deferral Period, the Election Date shall be
the thirtieth day following such Annual Meeting date or initial
participation date, as the case may be.
“Fair Market
Value” means the average of the highest and the lowest quoted
selling price of a share of Common Stock as reported on the
composite tape for securities listed on the New York Stock
Exchange, or such other national securities exchange as may be
designated by the Committee, or, in the event that the Common Stock
is not listed for trading on a national securities exchange but is
quoted on an automated system, on such automated system, in any
such case on the valuation date (or, if there were no sales on the
valuation date, the average of the highest and the lowest quoted
selling prices as reported on said composite tape or automated
system for the most recent day during which a sale
occurred).
“Non-Employee
Director” means a member of the Board who is not, and has not
been, an employee of the Company or any of its
Subsidiaries.
“Per Diem
Fees” means a fee paid for attendance at or participation in
(i) each meeting of the Board, (ii) each meeting of a
committee of the Board when such meeting is held on a day other
than a day for which a fee is paid for a meeting of the Board,
(iii) each day of services to the Company requested by the
chairman of the Board, and (iv) services similar to those
specified in (i), (ii), or (iii) above, provided to any
Subsidiary.
“Phantom
Stock Unit” means a bookkeeping unit representing one share
of Common Stock credited to a Deferred Compensation Account in
accordance with Section 5(d).
“Plan”
means the Cooper Tire & Rubber Company 1998 Non-Employee
Director Compensation Deferral Plan as herein set forth or as duly
as amended.
“Investment
Funds” means the investment funds available from time to time
under the Company’s Spectrum Investment Savings Plan, or such
other funds as the Committee may designate from time to
time.
“Subsidiary”
means a corporation or other entity with respect to which the
Company, directly or indirectly, has the power, whether through the
ownership of voting securities, by contract or otherwise, to elect
at least a majority of the members of such corporation’s
board of directors or analogous governing body.
“Termination
of Service” or “termination of service” means a
separation from service as defined under Section 409A of the
Code.
(a) The
Plan shall be administered by the Committee.
(b) The
Committee shall be authorized to interpret the Plan, to establish,
amend and rescind any rules and regulations relating to the Plan,
to make factual determinations in connection with the
administration or interpretation of the Plan, and to make any other
determinations that it believes are necessary or advisable for the
administration of the Plan. The Committee may correct any defect or
supply any omission or reconcile any inconsistency in the Plan or
in any Deferral Election Form to the extent the Committee deems
desirable to carry the Plan into effect. Any decision of the
Committee in the administration of the Plan, as described herein,
shall be final and conclusive. The Committee may act only by a
majority of its members, except that the members thereof may
authorize any one or more of the Committee members to execute and
deliver documents on behalf of the Committee.
(c) The
Committee shall be entitled to rely in good faith upon any report
or other information furnished to it by any officer or employee of
the Companies or from the financial, accounting, legal or other
advisers of the Companies. Each member of the Committee, each
individual designated by the Committee to administer the Plan and
each other person acting at the direction of or on behalf of the
Committee shall not be liable for any determination or anything
done or omitted to be done by him or by any other member of the
Committee or any other such individual in connection with the Plan,
except for his own willful misconduct or as expressly provided by
statute, and to the extent permitted by law and the bylaws of the
Company, shall be fully indemnified and
- 2 -
protected by
the Company with respect to such determination, act or
omission.
4. Shares
Available. The Company is authorized to issue up to 200,000
shares of Common Stock under the Plan (the “Plan
Limit”). Such shares of Common Stock may be newly issued
shares of Common Stock or reacquired shares of Common Stock held in
the treasury of the Company. The amount of any Annual Units paid in
cash shall not be treated as issued under the Plan.
5.
Deferral of Director’s Fees and Crediting of Annual
Units.
(i)
General Provisions. Non-Employee Directors may elect to
defer all or a specified percentage of their Director’s Fees
with respect to a Deferral Period in the manner provided in this
Section 5. A Non-Employee Director’s Deferred Benefit is
at all times nonforfeitable.
(ii)
Deferral Election Forms. Before the Election Date applicable
to a Deferral Period, each Non-Employee Director will be provided
with a Deferral Election Form and a Beneficiary Designation Form.
In order for a Non-Employee Director to participate in the deferral
portion of the Plan for a given Deferral Period, a Deferral
Election Form, completed and signed by him, must be delivered to
the Company on or prior to the applicable Election Date. A Deferral
Election Form submitted by a Non-Employee Director for a Deferral
Period shall be deemed to be a continuing deferral election for all
subsequent Deferral Periods, unless the Non-Employee Director
completes and files a subsequent Deferral Election Form with the
Company prior to the Election Date applicable to that Deferral
Period. A Non-Employee Director electing to participate in the Plan
for a given Deferral Period shall indicate on his Deferral Election
Form:
(A) the
percentage of the Director’s Fees earned during the Deferral
Period to be deferred which shall be in multiples of
10%;
(B) if
the Deferral Election Form is the first such form filed by the
Non-Employee Director, the Non-Employee Director’s election,
in accordance with Sections 5(f) and 5(g), as to the timing, form
and manner of payment of the Deferred Benefits; and
(C) the
Non-Employee Director’s investment election, with respect to
the deemed investment of the deferred Director’s Fees and
Annual Units, in accordance with Section 5(d).
A Non-Employee
Director’s election as to the timing, form and manner of
payment of Deferred Benefits in the initial Deferral Election Form
shall govern the timing, form and manner of payment of all
subsequent deferrals under the Plan and may not be changed or
revoked without the prior written consent of the Committee,
provided, however, that a Non-Employee Director, with the prior
written consent of the Committee, may change the time of the
commencement of payment(s) or the form of payment with regard to
Deferred Benefits for a subsequent Deferral Period by completing
and filing a subsequent Deferral Election Form with the Company
prior to the Election Date applicable to that Deferral Period.
Notwithstanding the foregoing, the Deferral Election Form that is
filed by an individual who first becomes eligible to participate in
the Plan on an Annual Meeting date or after the start of a Deferral
Period by the applicable Election Date shall be effective only with
respect to Director’s Fees earned and Annual Units awarded
following the filing of such Deferral Election Form.
(iii)
Effect of No Deferral Election. A Non-Employee Director who
does not have a completed and signed Deferral Election Form on file
with the Company on or prior to the applicable Election Date for a
Deferral Period may not defer his Director’s Fees for such
Deferral Period.
(iv)
Subsequent Payment Elections. With the prior written consent
of the Committee as described in Section 5(a)(ii) of the Plan,
a Non-Employee Director may make a subsequent election to change
the time of the commencement of payment(s) of the portion of the
Non-Employee Director’s Deferred Benefit representing
deferred Director’s Fees, the form of payment of the
Non-Employee Director’s Deferred Benefit, or both, with
respect to the amount of such Deferred Benefits that were
previously deferred if all of the following requirements are
met:
(A) Such
subsequent payment election may not take effect until at least
twelve months after the date on which the subsequent payment
election is made;
(B) In
the case of a subsequent payment election related to a payment not
described in Section 5(i) of the Plan, the first payment under such
subsequent payment election shall in all cases be deferred for a
period of not less than five years from the date such payment would
otherwise have been made (or, in the case of installment payments,
which shall be treated as a single payment for purposes of this
Section 5(a)(iv), five years from the date the first
installment payment was scheduled to be paid); and
- 3 -
(C) Any
subsequent payment election related to a distribution that is to be
made at a specified date or pursuant to a fixed schedule pursuant
to Section 5 of the Plan must be made not less than twelve
months prior to the date the payment was scheduled to be made under
the prior payment election (or, in the case of installment
payments, which shall be treated as a single payment for purposes
of this Section 5(a)(iv), twelve months prior to the date the
first installment payment was scheduled to be paid).
(b)
Award of Annual Units. Annual Units shall be awarded to each
Non-Employee Director in December of each year (or at such other
time as may be determined by the Committee) as follows:
(i) for
the calendar year ended December 31, 2004, the number of
Annual Units to be so awarded to each Non-Employee Director shall
be 500 per year; and
(ii) for
the calendar year beginning January 1, 2005 and for all
calendar years thereafter, the number of Annual Units to be so
awarded to each Non-Employee Director will be the number of Annual
Units having a Fair Market Value on the day of the Annual Meeting
equal to $30,000, unless and until a greater or lesser number is
specified by the Committee.
(c)
Establishment of Deferred Compensation Accounts. A
Non-Employee Director’s deferrals and the Annual Units will
be credited to a Deferred Compensation Account set up for that
Non-Employee Director by the Company in accordance with the
provisions of this Section 5. A Participant’s Deferred
Compensation Account shall be further divided into the following
sub-accounts: (i) a sub-account which shall be the record of
the Non-Employee Director’s deferrals and the Annual Units
that were earned and vested prior to January 1, 2005 (the
“Grandfathered Deferred Benefits”) and which are
governed by the law applicable to nonqualified deferred
compensation prior to the addition of Section 409A of the Code
and shall be subject to the terms and conditions specified in the
Plan as in effect prior to January 1, 2005 and (ii) a
sub-account which shall be the record of the Non-Employee
Director’s
|
