TABLE OF CONTENTS

 

ARTICLE I	GENERAL	1
1.1	Purpose of Plan	1
1.2	Nature of Plan	1
1.3	Continuation of Existing Plan	1
1.4	The Plan Year	2
ARTICLE II	DEFINITIONS	2
2.1	Definitions	2
2.2	Statutory References	4
ARTICLE III	ELIGIBILITY AND PARTICIPATION	4
3.1	Requirements	4
3.2	Enrollment and Participation	4
3.3	Change of Employment Category	5
3.4	Leaves of Absence	5
3.5	Separation from Service	5
3.6	Failure to Participate When First Eligible	5
3.7	Inactive Participation	5
ARTICLE IV	DEFERRAL ELECTIONS	6
4.1	General	6
4.2	Timing of Elections	6
4.3	Irrevocability of Elections	6
4.4	Changes in Deferral Elections	6
4.5	Unforeseeable Emergency	7
ARTICLE V	CONTRIBUTIONS	7
5.1	Nature of Contributions	7
5.2	Compensation Deferral Contributions	7
5.3	Effect of Compensation Deferrals	8
ARTICLE VI	PARTICIPANT ACCOUNTS	8
6.1	Account Established for Each Participant	8
6.2	No Funding Requirement	8
6.3	Value Adjustments	9
ARTICLE VII	ENTITLEMENT TO BENEFITS	10
7.1	Separation from Service	10
7.2	Death	10
7.3	Vesting	10
ARTICLE VIII	DISTRIBUTION OF BENEFITS	10
8.1	Benefits Payable upon Separation from Service	10
8.2	Death Benefits	11
8.3	Payment Option Elections	11
8.4	Administration of Distributions	12
8.5	Compliance with Section 409A	14
8.6	Limitation on Payment Liability	14

 

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ARTICLE IX	ADMINISTRATION		14
9.1	Administrative Authority		14
9.2	Company Administration		14
9.3	Administrative Committee		15
9.4	Third Party Services	16
9.5	Claims Procedure	16
ARTICLE X	AMENDMENT AND TERMINATION	16
10.1	Right to Amend	16
10.2	Amendment Required by Federal Law	16
10.3	Right to Freeze or Terminate	16
10.4	Employer-Level Change	18
10.5	Preservation of Rights	18
10.6	Section 409A Compliance	18
ARTICLE XI	MULTIPLE-EMPLOYER PROVISIONS	19
11.1	Adoption by Other Employers	19
11.2	Separate Plans	19
11.3	Participation	19
11.4	Combined Service	19
11.5	Administration	19
11.6	Amendment	19
11.7	Termination	19
ARTICLE XII	MISCELLANEOUS	19
12.1	Limitations on Liability of Company	19
12.2	Construction	20
12.3	Spendthrift Provision	20
12.4	Date Plan Effective; Termination Date	20
APPENDIX A

 

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LEGG MASON & CO., LLC

 

DEFERRED COMPENSATION/PHANTOM STOCK PLAN

 

( 2009 Amending Restatement )

 

THIS AMENDING RESTATEMENT OF THE LEGG MASON & CO., LLC DEFERRED COMPENSATION/PHANTOM STOCK PLAN (the “Plan”) is adopted by LEGG MASON & CO., LLC (the “Company”) under the terms and conditions hereinafter set forth.

 

RECITALS

 

Legg Mason Wood Walker, Incorporated adopted a deferred compensation/phantom stock plan for the benefit of certain of its employees and maintained the Plan, as amended from time to time, from the effective date of February 1, 1988, until November 15, 2005.

 

Pursuant to the terms of the Transaction Agreement, dated as of June 23, 2005, by and between Legg Mason, Inc. and Citigroup Inc., the Board of Directors of Legg Mason Wood Walker approved certain amendments to the Plan which assigned, effective as of November 15, 2005, all of its rights, duties and obligations under the Plan to the Company.  Thus, effective November 15, 2005, Legg Mason Wood Walker, Incorporated relinquished, and the Company assumed, the sponsorship and maintenance of the Plan.

 

The purpose of this amending restatement is to amend the Plan to clarify its compliance with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder, and to reflect the sponsorship (and name) change resulting from the 2005 corporate reorganization referred to in the preceding paragraph.

 

ARTICLE I

 

General

 

1.1                                Purpose of Plan — The Plan is established to provide supplemental retirement income benefits to executives who, by virtue of statutory restrictions within the Internal Revenue Code, are likely to be prevented from contributing in an Election Year as much to the Legg Mason Profit Sharing and 401(k) Plan and Trust as they otherwise might contribute.

 

1.2                                Nature of Plan — The Plan is intended to be a non-qualified, unfunded plan maintained to provide deferred compensation to a select group of management and/or highly compensated employees, and is not intended to be subject to ERISA (other than Title I, Subtitle B, Part 1, Reporting and Disclosure, and Title I, Subtitle B, Part 5, Administration and Enforcement”)). The Plan is intended to comply in form and operation with Section 409A and shall be so interpreted.

 

1.3                                Continuation of Existing Plan - The adoption of this Amending Restatement by the Company constitutes the continuation of the existing plan as in effect immediately prior to the Effective Date of this Amending Restatement (the “Pre-Existing Plan”).  Notwithstanding any other Plan provisions to the contrary, the following shall be applicable:

 

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(a)                                   Subject to the conditions and limitations of this Amending Restatement, each person who is a participant under the Pre-Existing Plan immediately prior to the Effective Date will continue as a Participant under this Amending Restatement.

 

(b)                                  Amounts being paid to a former participant or beneficiary in accordance with the provisions of the Pre-Existing Plan shall continue to be paid in accordance with such provisions.

 

(c)                                   Any election or beneficiary designation in effect under the Pre-Existing Plan immediately before its amendment and continuation in the form of this Amending Restatement shall be deemed to be a valid election or designation filed with the Company under this Amending Restatement, to the extent consistent with the provisions of this Amending Restatement, unless and until (subject to the limitations set forth in this Amending Restatement) the Participant revokes such election or designation or makes a new election or designation under this Amending Restatement.

 

1.4                                The Plan Year — To the extent necessary for accounting or reporting purposes, the Plan shall have a fiscal year (or “Plan Year”) which shall be the calendar year.

 

ARTICLE II

 

Definitions

 

2.1                                Definitions — The following terms, as used herein, unless a different meaning is implied by the context, shall have the following meanings:

 

Account — The account established for each Participant pursuant to Section 6.1.

 

Administrator — The person, group or entity designated in accordance with the provisions of ARTICLE IX to administer and operate the Plan.

 

Affiliate — Any member of the Employer Group other than the Sponsor.

 

Beneficiary — Any person or persons so designated in accordance with the provisions of Section 8.2.

 

Common Stock — The common stock of LMI or any successor corporation.

 

Company — LEGG MASON & CO., LLC, a limited liability company duly organized and existing under the laws of the State of Maryland, and its successors and assigns, unless otherwise herein provided, or any other business organization which, as hereinafter provided, shall assume the obligations hereunder, or which shall agree to become a party to the Plan.

 

Compensation — A Participant’s compensation as defined under the 401(k) Plan for the purpose of calculating the Participant’s elective pre-tax deferrals thereunder, but subject to clause (iii) of Section 4.1.1.1 (of this Plan).

 

Compensation for an  Election Year shall be limited to amounts attributable to services performed during the Election Year and any bonus payable during the Election Year.

 

Compensation Deferral Agreement — The written or electronic agreement whereby an Employee or Participant elects to commence or resume participation in the Plan and to defer Compensation pursuant to the terms of the Plan, the filing of which may be accomplished by physical or electronic receipt thereof by the Company.

 

Compensation Deferral Agreement Deadline — June 30 of the Election Year preceding the Election Year for which a Compensation Deferral Agreement is to be effective.

 

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Compensation Deferral Amendment — A Compensation Deferral Agreement in which a Participant changes a previously-made election.

 

Covered Employee — Any Employee who is a participant in the 401(k) Plan and who is determined by the Company, in its sole and absolute discretion, to be a member of “a select group of management or highly compensated employees” within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

 

Distribution Date — The date of a Participant’s Distribution Event or any later date or dates which the Participant’s distribution is made pursuant to the terms of the Plan.  Thus, a Participant who has elected an installment distribution shall have three Distribution Dates.

 

Distribution Event - The sixth business day following the date of a Participant’s Separation from Service or death, or following the date of any other event by reason of which the Participant becomes entitled to a benefit distribution under the terms of the Plan.

 

Effective Date — The effective date of this Amending Restatement, which is January 1, 2008 (or such earlier date as may be required in order for the Plan to comply with Section 409A).

 

Election Year - The twelve month period to which a deferral election applies, as described in ARTICLE IV.  The Election Year shall be the calendar year in all cases, except that, if the Company’s fiscal year is other than the calendar year, then, solely with respect to an election to defer fiscal year Compensation ( i.e. , Compensation relating to a period of service coextensive with one or more fiscal years of the Company, of which no amount is paid or payable during the service period), the Election Year shall be the Company’s fiscal year.

 

Employee — Any person employed by the Company.

 

Employer Group - A group of employers consisting of the Company and all other employers who are treated as a single employer under Section 414(b) and/or (c) of the Internal Revenue Code; provided, however, that, in any use of the term in connection with a Separation from Service, “at least 50%” shall be substituted for “at least 80%” in each place it appears in Section 1563(a)(1), (2) and (3) for purposes of applying Section 414(b), and in §1.414(c)-2 of the Regulations.

 

ERISA — The Employee Retirement Income Security Act of 1974, or any provision or section thereof herein specifically referred to, as such Act, provision or section may from time to time be amended or replaced.

 

401(k) Plan — The Legg Mason Profit Sharing and 401(k) Plan and Trust (as amended from time to time), and any other tax-qualified profit sharing plan maintained by the Company or an Affiliate pursuant to Sections 401(a) and 401(k) of the Internal Revenue Code.

 

Internal Revenue Code — The Internal Revenue Code of 1986, or any provision or section thereof herein specifically referred to, as such Code, provision or section may from time to time be amended or replaced.

 

Leave of Absence — An authorized absence from active employment under circumstances which are not treated by the Company as a Separation from Service, and with respect to which there is a reasonable expectation that the Participant will return to perform further services for the Employer Group.  ( The second paragraph of the definition of Separation from Service in this Section 2.1 is relevant to this definition .)

 

LMI — Legg Mason, Inc.

 

Participant — Any person so designated in accordance with the provisions of ARTICLE III, including, where appropriate according to the context of the Plan, any former Employee who has an Account (with an undistributed balance) under the Plan.

 

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Payment Option Election — A written election, on a form provided or approved by the Company, whereby a Participant elects the form and/or timing of the distribution of the Participant’s Account.

 

Plan — The plan set forth herein, as amended from time to time.

 

Regulations - Regulatory guidance promulgated by the Treasury Department with respect to Section 409A and, where appropriate, other sections of the Internal Revenue Code (as such regulations are presently written or subsequently proposed, finalized, amended, supplemented or replaced).

 

Section 409A - Section 409A of the Internal Revenue Code (as now or hereafter amended or replaced) and the Regulations and other Internal Revenue Service guidance issued thereunder.

 

Separation from Service — A retirement or other termination of employment with the Employer Group under circumstances which do not constitute a Leave of Absence, and in which the Company and the Participant reasonably anticipate that no further services will be performed.  For this purpose, a permanent reduction in the Participant’s services to the Employer Group after a specified date, which is less than a complete cessation of services, shall not constitute a Separation from Service.  Where appropriate to the context, a Participant’s termination of employment by reason of death shall be deemed to be a Separation from Service.

 

Notwithstanding the foregoing, a Leave of Absence shall be deemed to constitute a Separation from Service if the period of leave exceeds six months (or such longer period for which the Participant retains re-employment rights with the Employer Group under an applicable statute or contract).  However, if the Leave of Absence is due to a medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, which impairment causes the Participant to be unable to perform the duties of his position of employment or any substantially similar position of employment, a 29-month period of absence shall be substituted for such six-month period.

 

Sponsor — The Company and its successors and assigns.

 

Value — The fair market value of a share of Common Stock, equal to the average of the closing prices on the principal exchange on which the shares are traded for the five business days preceding the Distribution Date or other applicable date, or, if the shares are not then traded on an exchange, as such value is determined by the Company using any reasonable method of valuation (including the mean of the high and low quotations of the shares as reported by NASDAQ for the applicable date, or, in the absence of any reported sales on such date, the first preceding date on which there were such sales).

 

2.2                                Statutory References — Statutory references in this Plan shall incorporate by reference all regulations, rulings, procedures, releases and other position statements issued by the relevant governmental agency with respect to such statutory provision.

 

ARTICLE III

 

Eligibility and Participation

 

3.1                                Requirements — A Covered Employee shall be eligible to become a Participant on the January 1 on which both of the following requirements are met:

 

3.1.1                         The Covered Employee is individually approved by the Company, in its sole and absolute discretion, for participation in the Plan; and

 

3.1.2                         The Covered Employee is notified of his eligibility to participate in the Plan.

 

3.2                                Enrollment and Participation — Participation in the Plan is voluntary.  Each Covered Employee who has met the requirements of Section 3.1 may elect to participate in the Plan by filing a Compensation Deferral Agreement with the Company in accordance with Section 4.2.  However, he shall not become a Participant

 

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until the effective date of a timely filed Compensation Deferral Agreement, as determined in accordance with Section 4.2 (so that participation may only begin on a January 1, and only if the January 1 is at least six calendar months after the Covered Employee has filed the relevant Compensation Deferral Agreement with the Company).  The election to become a Participant shall be made by, and only by, completing and delivering to the Company a Compensation Deferral Agreement.

 

Subject to the right of the Company to prospectively terminate the status of any Participant as a Covered Employee, once an Employee has become a Participant, the Employee shall remain a Participant (without regard to whether or not a Compensation Deferral Agreement is in effect) throughout the Participant’s tenure as an Employee.

 

3.3                                Change of Employment Category — During any period in which a Participant remains in the employ of the Employer Group, but ceases to be a Covered Employee:  (i) the Participant will continue his Plan participation, and the Participant’s Account will continue to be credited with earnings, so long as the Participant’s Account has an undistributed balance, but (ii) the Participant’s Account shall not be credited with, nor shall the Participant be entitled to make, any deferral contributions based upon Compensation payable with respect to such period.  However, if, at the time the Participant ceases to be a Covered Employee, the Participant has a Compensation Deferral Agreement in effect, the Participant’s deferral contributions thereunder shall continue until such time as the Compensation Deferral Agreement would lapse by its terms or be subject to modification by the Participant pursuant to ARTICLE IV.

 

In the event that a Participant who ceased to be a Covered Employee subsequently becomes a Covered Employee, the Participant shall be eligible to defer Compensation only after again meeting all of the requirements of Section 3.1 (including, without limitation, being notified by the Company of his eligibility to resume participation in the Plan) and filing a new Compensation Deferral Agreement pursuant to Section 3.2.

 

3.4                                Leaves of Absence — During any authorized absence from active service that constitutes a Leave of Absence, a Participant shall continue to participate in the Plan to the same extent as if he had not taken the leave of absence, and any Compensation Deferral Agreement shall remain in effect.

 

3.5                                Separation from Service -Upon a Participant’s Separation from Service with the Company, the Participant’s participation in the Plan shall terminate (except as provided in Section 3.7). If an Employee (whether or not a Participant) who has a Separation from Service is subsequently re-employed by the Company, the Employee shall be treated as a new Employee who shall be eligible to become a Participant only after again meeting all of the requirements of Section 3.1 and filing a new Compensation Deferral Agreement pursuant to Section 3.2.

 

3.6                                Failure to Participate When First Eligible - In the event that a Covered Employee who, pursuant to Section 3.1, is eligible to commence or resume participation fails to elect to participate when he first becomes eligible to become a Participant in the Plan, the Employee shall not again be eligible to participate until the first day of the next, or any subsequent, Election Year (provided the Employee is still then otherwise eligible for participation). If the Employee does so elect, the Employee’s participation shall be effective as of the date determined in accordance with Section 4.2.

 

3.7                                Inactive Participation - In the event that a Participant’s active participation in the Plan’s ceases, as described in Section 3.2, 3.3 or 3.5, or he ceases to make Section 5.2 deferral contributions or ceases to be a Covered Employee, the Participant shall nevertheless be deemed to remain as a Participant for all purposes other than the crediting of further Section 5.2 contributions to the Participant’s Account, until such time as there is no longer an undistributed balance in the Participant’s Account.

 

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ARTICLE IV

 

Deferral Elections

 

4.1                                General - The election by any Participant to defer Compensation pursuant to the terms of the Plan shall be made by, and only by, the filing of a completed Compensation Deferral Agreement (or Compensation Deferral Amendment) with the Company.  Subject to the remainder of this ARTICLE IV, deferral elections shall be made at the time, in the manner, and subject to the conditions specified by the Administrator.

 

4.1.1                      401(k) Deferral a Condition Precedent — Regardless of what may be set forth in a Participant’s Compensation Deferral Agreement with respect to a particular Election Year, the Participant’s Compensation deferrals for that Election Year shall not commence until he has reached his 401(k) Deferral Threshold Date for that Election Year.  Once the Participant’s 401(k) Deferral Threshold Date for the Election Year has been reached, his Compensation deferrals for the remainder of that Election Year shall commence in accordance with the terms of his Compensation Deferral Agreement in effect for that Election Year (and which had been filed with the Company on or before the Compensation Deferral Agreement Deadline for that Election Year).

 

For purposes of this Section 4.1.1:

 

4.1.1.1                The Participant’s “401(k) Deferral Threshold Date” for any Election Year is the date during that Election Year on which it is projected that he will have reached his 401(k) Maximum for that Election Year, as calculated by the Company based solely upon his deferral election in effect under the 401(k) Plan as of the Compensation Deferral Agreement Deadline, without regard to:  (i) his actual 401(k) deferrals during that (or any other) Election Year, (ii) any subsequent changes in his 401(k) deferral election, or (iii) any subsequent changes in the terms or operation of the 401(k) Plan.

 

4.1.1.2                The “401(k) Maximum” for any Election Year is the lesser of:  (A) the maximum amount of elective deferrals permitted under the terms of the 401(k) Plan as of the first day of that Election Year (without regard to any return of elective deferrals that may be required as a result of a failure of the 401(k) Plan to pass the ADP test), or (B) the maximum amount of elective deferrals permitted under Section 402(g) of the Internal Revenue Code for that Election Year, including, if applicable, the maximum amount of catch-up elective deferrals permitted under Section 414(v) of the Internal Revenue Code for that Election Year (for individuals who have reached age 50).

 

4.1.1.3                The provisions of this Section 4.1.1 shall apply separately with respect to each Election Year.

 

4.2                                Timing of Elections - An election to defer Compensation for any Election Year shall not be effective unless made on or before the Compensation Deferral Agreement Deadline for the Election Year to which the election relates.

 

4.3                                Irrevocability of Elections — Except as provided in Section 4.5, an election to defer Compensation for an Election Year becomes irrevocable on, and may not be changed or revoked after, the Compensation Deferral Agreement Deadline for that Election Year.  A deferral election may be changed for future Election Years in accordance with (and only in accordance with) Section 4.4.

 

Notwithstanding anything herein to the contrary, any changes in the form or operation of the 401(k) Plan after the Compensation Deferral Agreement Deadline for an Election Year (or any other changes that that would cause a Compensation Deferral Agreement to be treated as being revocable for purposes of Section 409A, or which would otherwise cause the Compensation Deferral Agreement or the terms of the Plan to violate Section 409A) shall not be effective under this Plan before the first day of the first Election Year for which a Compensation Deferral Agreement (or Compensation Deferral Amendment) could be effective under Section 4.4.

 

4.4                                Changes in Deferral Elections — Once a Compensation Deferral Agreement has become irrevocable pursuant to Section 4.3, a Participant may make changes in a deferral election (including a revocation of further deferrals), but only with respect to subsequent Election Years, by filing a completed Compensation Deferral Amendment on or before the Compensation Deferral Agreement Deadline for the subsequent Election Year to which the Compensation Deferral Amendment is to relate.  If a Participant fails to file a completed Compensation Deferral Amendment on or before the Compensation Deferral Agreement Deadline for any subsequent Election Year, and is

 

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still eligible to defer, the Participant shall be deemed to have elected to keep the prior election (if any) in force for that Election Year.

 

4.5                                Unforeseeable Emergency - Notwithstanding the provisions of Sections 4.2, 4.3 and 4.4, in the event of a Participant’s unforeseeable emergency, or in the event of a hardship withdrawal by a Participant under the 401(k) Plan (but only if the hardship withdrawal meets the requirements of §1.401(k)-1(d)(3) of the Regulations), the Participant may apply to the Company for permission to cancel (not merely postpone or delay) Section 5.2 Compensation deferral contributions for the remainder of the Election Year.  The Company shall have the sole discretion (subject to Section 9.5) to determine whether the Participant’s circumstances meet the applicable standards.

 

“Unforeseeable emergency” shall be defined in accordance with §1.409A-3(i)(3) of the Regulations and, to the extent not inconsistent therewith, the following summary thereof:  a severe financial hardship to the Participant resulting from an illness or accident of the Participant, his spouse or his dependent (as defined in Section 152 of the Internal Revenue Code without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B)), or any Beneficiary he has designated pursuant to Section 8.2.2 (and which designation is in effect when the unforeseeable emergency occurs), loss of the Participant’s property due to casualty (whether or not resulting from a natural disaster), or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, but only to the extent such emergency is not and may not be relieved: (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship); or (iii) by cessation of deferrals under the Plan.  However, determination of amounts reasonably necessary to satisfy the emergency need is not required to take into account any additional compensation that, due to the unforeseeable emergency, is available under another nonqualified deferred compensation plan but has not actually been paid.  Examples of circumstances that may (under all relevant facts and circumstances) constitute an unforeseeable emergency are:  (i) imminent foreclosure of or eviction from the Participant’s primary residence, (ii) the need to pay prescription drugs or other medical expenses (including non-refundable deductibles) of the Participant, spouse, dependent or Beneficiary, or (iii) funeral expenses of a spouse, dependent or Beneficiary; provided, however, that home purchase or college tuition will not, under normal circumstances, constitute an unforeseeable emergency.

 

ARTICLE V

 

Contributions

 

5.1                                Nature of Contributions — Contributions described in this ARTICLE V shall not represent actual deposits to a separate fund or trust, but shall be bookkeeping entries in the form of credits to the Accounts of the Participants on whose behalf the contributions are made.

 

5.2                                Compensation Deferral Contributions —

 

5.2.1                         By so electing in his Compensation Deferral Agreement, each Participant may elect to defer Compensation (which would otherwise have been paid to the Participant) in any whole percentage amount designated by the Participant, provided that such amount is not less than 1%, nor more than 13%, of the Participant’s Compensation for the Election Year.  In no event, however, shall any Participant’s deferrals for an Election Year:  (i) begin until the Participant has reached his 401(k) Deferral Threshold Date (as defined in Section 4.1.1.1) for the Election Year, or (ii) exceed $60,000.

 

5.2.2                         The Company may establish such procedures with respect to timing and amount of individual deferrals by each Participant as it deems appropriate to implement the limitations described in ARTICLE IV or this ARTICLE V (other than any procedure which would require or permit the Company to pay to the Participant any Compensation previously deferred by the Participant pursuant to this Section 5.2 during the current or any preceding Election Year, or which would permit a change or discontinuation of deferrals under the Plan that would violate Section 409A).

 

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be located or transferred outside of the United States (except to a foreign jurisdiction in which substantially all of the services giving rise to the benefits accruing hereunder are performed).

 

6.3                                Value Adjustments -

 

6.3.1                         For purposes of this Section 6.3, the following definitions shall be utilized:

 

Contribution Credit — A dollar amount equal to a contribution credit made to the Account of a Participant pursuant to ARTICLE V.

 

Credit Date Value — The Value of a share of Common Stock on the third business day after the date as of which a Contribution Credit is made pursuant to Section 6.3.

 

Dividend Unit — The equivalent of that number of shares of Common Stock obtained by dividing the amount of any dividend or other distribution paid or made by LMI with respect to a share of Common Stock (but not including a distribution in Common Stock) by 95% of the Value of a share of Common Stock on the sixth business day after the payment date of the dividend or other distribution.

 

Share Unit — The equivalent of one share of Common Stock.

 

Units — Share Units and Dividend Units, collectively.

 

6.3.2                        Units (calculated to four decimal places) shall be credited to the Account of each Participant as follows:

 

6.3.2.1                As of the date on which any Contribution Credit is made to the Account, any Contribution Credit shall be converted to a number of Share Units equal to the Contribution Credit divided by 90% of the Credit Date Value.

 

6.3.2.2                Whenever, prior to a Distribution Date ( i.e. , whenever there are undistributed Units in an Account), LMI shall pay any dividend (other than in Common Stock) upon issued and outstanding Common Stock, or shall make any distribution (other than in Common Stock) with respect thereto, there shall be credited to the Account such number of Dividend Units as shall be allocable to the Units credited to the Account as of the record date of the dividend or other distribution.

 

6.3.3                        In the event that, prior to a Distribution Date ( i.e. , whenever there are undistributed Units in an Account): (i) the number of outstanding shares of Common Stock shall be changed by reason of a stock split, combination of shares, recapitalization, stock dividend or otherwise, or (ii) the Common Stock is converted into or exchanged for other shares as a result of a merger, consolidation, sale of assets, or other reorganization or recapitalization, the number of Units then credited or to be credited to the Account shall be appropriately adjusted so as to reflec