Exhibit 10.32
MOHAWK INDUSTRIES,
INC.
1997 NON-EMPLOYEE DIRECTOR STOCK
COMPENSATION PLAN
(Amended and Restated Effective
as of January 1, 2009)
ARTICLE 1
PURPOSE OF THE PLAN
1.1 Background and Purpose .
Mohawk Industries, Inc. maintains the 1997 Non-Employee Director
Stock Compensation Plan (the “Plan”) to promote the
long-term growth of Mohawk Industries, Inc. by providing a vehicle
for Non-Employee Directors to increase their proprietary interest
in the Corporation and to attract and retain highly qualified and
capable Non-Employee Directors. The Plan was amended and restated
as of October 23, 1997 in order to add a feature whereby
Non-Employee Directors may elect to defer their Annual Retainer
into a phantom stock account the performance and value of which
shall be measured by reference to the performance of the
Corporation’s common stock from time to time. The deferred
compensation feature of the Plan became effective for Annual
Retainer payable in 1998 or thereafter. The Plan was further
amended and restated as of March 31, 2003 to change the timing
of the grant of Shares to annual rather than quarterly grants, so
as to facilitate Participants’ compliance with the filing
requirements under Section 16(a) of the Securities Exchange
Act of 1934, as amended. The Plan was further amended and restated
effective as of January 1, 2009, to bring the Plan into
documentary compliance with Section 409A of the Internal
Revenue Code.
1.2 Status of Plan . Article
7 of the Plan is intended to be a nonqualified, unfunded plan of
deferred compensation under the Internal Revenue Code of 1986, as
amended.
ARTICLE 2
DEFINITIONS
2.1 Defined Terms . Unless
the context clearly indicates otherwise, the following terms shall
have the following meanings:
“Annual Retainer” means
the annual cash retainer fee (excluding any meeting fees) payable
by the Corporation to a Non-Employee Director for services as a
director (and, if applicable, as the chairman of a committee of the
Board) of the Corporation, as such amount may be changed from time
to time.
“Beneficiary” means any
person or persons designated by a Participant, in accordance with
procedures established by the Plan Administrator, to receive
benefits hereunder in the event of the Participant’s death.
If any Participant shall fail to designate a Beneficiary or shall
designate a Beneficiary who shall fail to survive the Participant,
the Beneficiary shall be the Participant’s surviving spouse,
or, if none, the Participant’s surviving descendants (who
shall take per stirpes), and if there are no surviving descendants,
the Beneficiary shall be the Participant’s estate.
“Board” means the Board
of Directors of the Corporation.
“Business Day” shall
mean a day on which the Nasdaq National Market or any national
securities exchange or over-the-counter market on which the Shares
are traded is open for business.
“Cash Election Form”
means a form, substantially in the form attached hereto as
Exhibit A , pursuant to which a Non-Employee Director elects
to receive his Annual Retainer for a particular Service Year in the
form of cash, as provided in Section 6.2.
“Change of Control”
means and includes each of the following:
(1) The acquisition by any
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the 1934 Act) (a
“Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the 1934 Act) of 25% or more of the
combined voting power of the then outstanding voting securities of
the Corporation entitled to vote generally in the election of
directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this
subsection (1), the following acquisitions shall not constitute a
Change of Control: (i) any acquisition by a Person who is on
the Effective Date the beneficial owner of 25% or more of the
Outstanding Company Voting Securities, (ii) any acquisition
directly from the Corporation, (iii) any acquisition by the
Corporation, (iv) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Corporation or
any corporation controlled by the Corporation, or (v) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and(iii) of subsection
(3) of this definition; or
(2) Individuals who, as of the
Effective Date, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Corporation’s
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;
or
(3) Consummation of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Corporation (a “Business Combination”), in each case,
unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own,
directly or indirectly, more
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than 50% of the combined voting
power of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation resulting
from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the
Corporation or all or substantially all of the Corporation’s
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company
Voting Securities, and (ii) no Person (excluding any
corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Corporation or such
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 25% or more of the combined voting
power of the then outstanding voting securities of such corporation
except to the extent that such ownership existed prior to the
Business Combination, and (iii) at least a majority of the
members of the board of directors of the corporation resulting from
such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business
Combination.
“Committee” means the
Compensation Committee of the Board.
“Common Stock” means the
$0.01 par value common stock of the Corporation.
“Corporation” means
Mohawk Industries, Inc.
“Deferral Election Form”
means a form, substantially in the form attached hereto as Exhibit
B, pursuant to which a Non-Employee Director elects to defer his or
her Annual Retainer under the Plan.
“Election Date” means
the date established by the Plan as the date by which a Participant
must submit to the Plan Administrator (i) a valid Shares
Election Form in order to receive Shares in lieu of Annual Retainer
for a Service Year, (ii) a valid Cash Election Form to receive
cash in a subsequent Service Year, or (iii) a valid Deferral
Election Form to defer Annual Retainer pursuant to Article 7. The
Election Date is December 31 of each year with respect to an
election to be effective for the Service Year beginning on the
following annual meeting date. For example, the Election Date with
respect to the Service Year from May 2003 to May 2004 would be
December 31, 2002; provided, however, that the Election Date
for a newly eligible Participant shall be the 30th day following
the date on which such individual becomes a Non-Employee
Director.
“Fair Market Value per
Share” as of a particular date means the closing sales price
of one share of Common Stock on such date as reported on the Nasdaq
National Market or any national securities exchange or
over-the-counter market on which the Shares are then traded or, in
the absence of reported sales on such date, the closing sales price
on the immediately preceding date on which sales were
reported.
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“Non-Employee Director”
means a director of the Corporation who is not an employee of the
Corporation or any subsidiary of the Corporation.
“Participant” means any
Non-Employee Director who is participating in the Plan.
“Phantom Stock” means a
hypothetical unit of value equal to the Fair Market Value of one
share of Common Stock. The concept of Phantom Stock is for
bookkeeping purposes only.
“Plan” means the Mohawk
Industries, Inc. 1997 Non-Employee Director Stock Compensation
Plan, as amended and restated.
“Plan Administrator”
means the Committee or the agent(s), if any, appointed by the
Committee pursuant to Section 3.2 to assist in the
administration of the Plan.
“Service Year” means a
year of director service, which is the approximate 12-month period
between annual meetings of the Corporation’s
shareholders.
“Shares” means shares of
Common Stock.
“Shares Election Form”
means a form, substantially in the form attached hereto as Exhibit
C, pursuant to which a Non-Employee Director elects to receive
Shares in lieu of all (but not less than all) of such Non-Employee
Director’s Annual Retainer, as provided in
Section 6.1.
“Stock Account” means
the account established by the Corporation for each Participant for
Annual Retainer deferred pursuant to Article 7 of the Plan, the
performance and value of which shall be measured by reference to
the Fair Market Value of the Common Stock from time to time. The
maintenance of individual Stock Accounts is for bookkeeping
purposes only.
“Termination of Service”
occurs when a Participant ceases to serve as a Non- Employee
Director for any reason.
ARTICLE 3
ADMINISTRATION OF THE PLAN
3.1 Administrator of the Plan
. The Plan shall be administered by the Committee.
3.2 Authority of Committee .
The Committee shall have full power and authority to:
(i) interpret and construe the Plan and adopt such rules and
regulations as it shall deem necessary and advisable to implement
and administer the Plan, and (ii) designate persons other than
members of the Committee or the Board to carry out its
responsibilities, subject to such limitations, restrictions and
conditions as it may prescribe, such determinations to be made in
accordance with the Committee’s best business judgment as to
the best interests of the Corporation and its stockholders and in
accordance with the
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purposes of the Plan. The Committee may delegate
administrative duties under the Plan to one or more agents as it
shall deem necessary or advisable, such agents to be referred to
herein as the Plan Administrator.
3.3 Effect of Committee
Determinations . No member of the Committee or the Board or the
Plan Administrator shall be personally liable for any action or
determination made in good faith with respect to the Plan or as to
any settlement of any dispute between a Non-Employee Director and
the Corporation. Any decision or action taken by the Committee or
the Board with respect to the administration or interpretation of
the Plan shall be conclusive and binding upon all
persons.
ARTICLE 4
ELIGIBILITY
4.1 Eligibility . All active
Non-Employee Directors of the Corporation shall be eligible to
participate in the Plan.
ARTICLE 5
SHARES SUBJECT TO THE PLAN
5.1 Shares Subject to the
Plan . Subject to adjustment as provided in the Plan, the
maximum number of Shares which may be granted under Article 6 or
distributed pursuant to Article 7 under the Plan is 37,500
(post-split) Shares. The Shares distributable under the Plan must
be previously issued and repurchased Shares and may not be original
issue Shares.
ARTICLE 6
ELECTIVE RECEIPT OF SHARES
Each Non-Employee Director shall be
granted Shares subject to the following terms and
conditions:
6.1 Election to Receive
Shares . On the first Business Day of January following each
annual meeting of shareholders of the Corporation, Shares shall be
granted to each Non-Employee Director who either (i) on or
before the Election Date for the then-current Service Year, filed
with the Plan Administrator a written irrevocable Shares Election
Form, indicating such Non-Employee Director’s election to
receive Shares in lieu of all (but not less than all) of his or her
Annual Retainer payable with respect to such Service Year, or
(ii) filed a Shares Election Form for any prior Service Year
and did not file a Cash Election Form (as described in
Section 6.2 below) with respect to the current Service
Year.
6.2 Subsequent Elections to
Receive Cash . Once a Non-Employee Director files a Shares
Election Form or a Deferral Election Form for any Service Year,
that election will carry forward into subsequent Service Years
unless, on or before the Election Date for any subsequent Service
Year, the Non-Employee Director files a Cash Election Form
for
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such subsequent Service Year. A Cash Election
Form shall be valid for one Service Year only. A new Cash Election
Form will be required to be filed for any Service Year in which the
Non-Employee Director desires to receive his or her Annual Retainer
in cash. Once a Non-Employee Director files a Shares Election Form
or a Deferral Election Form for any Service Year, then thereafter
for any Service Year for which a Cash Election Form is not timely
filed, the election will automatically revert to the last-filed
Shares Election Form or Deferral Election Form, as the case may
be.
6.3 Number of Shares . The
payment of t
