HENRY SCHEIN, INC.
NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective
as of January 1, 2005)
HENRY SCHEIN, INC.
NON-EMPLOYEE DIRECTOR DEFERRED
COMPENSATION PLAN
(As Amended and Restated Effective
as of January 1, 2005)
Table Of Contents
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Article 1 - Introduction
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1
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Article 2 - Definitions
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1
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Article 3 - Shares
Reserved
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6
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Article 4 -
Administration
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6
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Article 5 - Eligibility
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7
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Article 6 - Timing and Manner of
Deferrals
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7
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Article 7 - Vesting and
Distribution
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8
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Article 8 - Dividends
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9
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Article 9 - Designation of
Beneficiary
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9
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Article 10 - Adjustments
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9
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Article 11 - Amendment or
Termination of Plan
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10
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Article 12 - Miscellaneous
Provisions
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10
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HENRY
SCHEIN, INC.
NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective as of January 1,
2005)
Article 1 -
Introduction
The purpose of the Henry Schein,
Inc. Non-Employee Director Deferred Compensation Plan is to provide
incentives to directors of Henry Schein, Inc. who are not employees
of Henry Schein, Inc. or a Subsidiary (as defined in Section 2.29)
through the ability to defer any Eligible Director Fees (as defined
in Section 2.16). Participants in the Plan are permitted to defer
all or a portion of their Eligible Director Fees into the Cash
Account or Phantom Share Account (as defined in Sections 2.5 and
2.23, respectively), as elected by a Participant. The Company
believes that the Plan creates a means to provide deferred
compensation to such directors and to raise the level of stock
ownership in the Company by such directors thereby strengthening
the mutuality of interests between such directors and the
Company’s stockholders.
The shares of Common Stock available
for issuance under this Plan are funded from shares of Common Stock
that are available under the 1996 Director Incentive Plan, and such
awards under this Plan constitute an “Other Stock-Based
Award” under the 1996 Director Incentive Plan.
Article 2 -
Definitions
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2.1
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Account – means, with respect to each Participant,
the total of a Participant’s Cash Account and Phantom Share
Account.
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2.2
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Award Date – means the date that Eligible Director
Fees would otherwise be paid to a Participant if a Participant did
not elect to participate in the Plan.
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2.3
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Beneficiary - a beneficiary or beneficiaries designated by
the Participant under Article 9.
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2.4
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Board of Directors - the Board of Directors of the
Company.
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2.5
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Cash Account – means the account to which the Company
will make a book entry to credit the portion of Eligible Director
Fees that a Participant elects to defer under the Plan and deem
invested in cash equivalents based on the Company’s long-term
borrowing rate under the Company’s principal credit
facility.
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2.6
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Chair Fees
– means cash fees received by
a Participant for services as a chair of any committee of the Board
of Directors during a Plan Year.
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2.7
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Change in Control – shall be deemed to occur upon any of the
following:
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(i)
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an acquisition by any Person of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Act of 1933, as amended) of 33% or more of either (A)
the then outstanding Common Stock or (B) the combined voting power
of the then outstanding voting securities of the
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Company entitled to vote generally
in the election of directors (the “Outstanding HSI Voting
Securities”); excluding, however, the following: (w) any
acquisition directly from the Company, other than an acquisition by
virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the
Company, (x) any acquisition by the Company, (y) any acquisition by
an employee benefit plan (or related trust) sponsored or maintained
by the Company or (z) any acquisition by any corporation pursuant
to a reorganization, merger, consolidation or similar corporate
transaction (in each case, a “Corporate Transaction”),
if, pursuant to such Corporate Transaction, the following
conditions are satisfied: (A) all or substantially all of the
individuals and entities who are the beneficial owners,
respectively, of the outstanding Common Stock and Outstanding HSI
Voting Securities immediately prior to such Corporate Transaction
will beneficially own, directly or indirectly, more than 60% of,
respectively, the outstanding shares of common stock of the
corporation resulting from such Corporate Transaction and the
combined voting power of the outstanding voting securities of such
corporation entitled to vote generally in the election of
directors, in substantially the same proportions as their ownership
immediately prior to such Corporate Transaction, of the outstanding
Common Stock and Outstanding HSI Voting Securities, as the case may
be, (B) no Person (other than the Company, any employee benefit
plan (or related trust) of the Company or the corporation resulting
from such Corporate Transaction and any Person beneficially owning,
immediately prior to such Corporate Transaction, directly or
indirectly, 33% or more of the outstanding Common Stock or
Outstanding HSI Voting Securities, as the case may be) will
beneficially own, directly or indirectly, 33% or more of,
respectively, the outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the
combined voting power of the then outstanding securities of such
corporation entitled to vote generally in the election of directors
and (C) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of
directors of the corporation resulting from such Corporate
Transaction; or
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(ii)
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within any 12-month period, a change in the
composition of the Board of Directors such that the individuals who
as of the commencement of such 12-month period constitute the Board
of Directors (the “Incumbent Board”) cease for any
reason to constitute at least a majority of the Board of Directors;
provided that for purposes of this subsection any individual who
becomes a member of the Board of Directors subsequent to the
Effective Date whose election, or nomination for election by the
Company’s stockholders, was approved by a vote of at least a
majority of those individuals who are members of this proviso)
shall be considered as though such individual were a member of the
Incumbent Board; but,
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provided further, that any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the
Securities Act of 1933, as amended) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board shall not be so considered as a member of the
Incumbent Board; or
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(iii)
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the sale or other disposition of all or
substantially all of the assets of the Company; excluding, however,
such sale or other disposition to a corporation with respect to
which, following such sale or other disposition, (x) more than 60%
of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors will be then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the outstanding Common Stock and Outstanding HSI
Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their
ownership, immediately prior to such sale or other disposition, of
the outstanding Common Stock and Outstanding HSI Voting Securities,
as the case may be, (y) no Person (other than the Company and any
employee benefit plan (or related trust) of the Company or such
corporation and any Person beneficially owning, immediately prior
to such sale or other disposition, directly or indirectly, 33% or
more of the outstanding Common Stock or Outstanding HSI Voting
Securities, as the case may be) will beneficially own, directly or
indirectly, 33% or more of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and (z)
individuals who were members of the Incumbent Board will constitute
at least a majority of the members of the board of directors of
such corporation.
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2.8
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Code -
the Internal Revenue Code of 1986, as amended from time to
time.
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2.9
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Committee – the Compensation Committee of the Board
of Directors. If the Board of Directors removes the Committee for
any reason, “Committee” means the Board of Directors.
If for any reason the appointed Committee does not meet the
requirements of Rule 16b-3, such noncompliance shall not affect the
validity of the Plan or any interpretations or other actions of the
Committee.
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2.10
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Common Stock - Common Stock of the Company, par value $.01
per share.
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2.11
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Company – Henry Schein, Inc., a corporation
organized under the laws of the State of Delaware (or any
successor).
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2.12
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Deemed Dividends – means the amount of dividends (whether
stock or cash), if any, which are declared on a share of Common
Stock multiplied by the number of Phantom Shares credited to a
Participant’s Phantom Share Account.
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2.13
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Deferral Agreement - an agreement executed by a Participant setting
forth his or her election to defer receipt of his or her Eligible
Director Fees and an authorization for the Company to credit such
amount to a book-entry Account maintained by the Company on behalf
of the Participant. A Deferral Agreement shall contain such
provisions, consistent with the provisions of the Plan, as may be
established from time to time by the Company or
Committee.
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2.14
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Disability – means that a Participant is disabled
within the meaning of Section 409A(a)(2)(C) of the Code (and the
guidance issued thereunder).
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2.15
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Effective Date – the effective date of the Plan as
provided in Section 12.13.
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2.16
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Eligible Director Fees – any of the following amounts received by
a Participant in connection with service on the Board of Directors:
(i) Retainer Fees; (ii) Meeting Fees; (iii) Chair Fees; or (iv) any
other amounts determined by the Committee in its sole discretion
(including, Common Stock or restricted stock units). Eligible
Director Fees shall not include expense reimbursements.
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2.17
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Exchange Act - the Securities Exchange Act of 1934, as
amended.
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2.18
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Fair Market Value – as applied to any date,
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(i)
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if the Common Stock is listed or admitted to
trading on such date on a national securities exchange or quoted
through the NASDAQ Stock Market, Inc. (“NASDAQ”), the
closing sales price of a Share as reported on the relevant
composite transaction tape, if applicable, or on such principal
exchange (determined by trading value in the Common Stock) or
through NASDAQ, as the case may be, on such date, or in the absence
of reported sales on such day, the mean between the reported bid
and asked prices reported on such composite transaction tape or
exchange or through NASDAQ, as the case may be, on such date;
or
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(ii)
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if the Common Stock is not listed or quoted as
described in the preceding clause, but bid and asked prices are
quoted through NASDAQ, the mean between the bid and asked prices as
quoted by NASDAQ on such date; or
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(iii)
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if the Common Stock is not listed or quoted on a
national securities exchange or through NASDAQ or, if pursuant to
(i) and (ii) above the Fair Market Value is to be determined based
upon the mean of the bid and asked prices and the Committee
determines that such mean does not properly reflect the Fair Market
Value, by such other method as the Committee determines to be
reasonable and consistent with applicable law and taking into
account Section 409A of the Code; or
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(iv)
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if the Common Stock is not publicly traded, such
amount as is set by the Committee in good faith taking into account
Section 409A of the Code.
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2.19
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Meeting Fees
– cash fees paid for
attendance at Board of Director meetings or meetings of any
committee thereof in which the Participant is a member.
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2.20
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1996 Director Incentive Plan
– the Henry Schein, Inc. 1996
Non-Employee Director Stock Incentive Plan, as amended from time to
time.
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2.21
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Participant – a director of the Company who satisfies
the eligibility requirements under Article 5 of the Plan and elects
to participate in the Plan in accordance with its terms.
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2.22
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Phantom Share – a unit of measurement equivalent to one
share of Common Stock but with none of the attendant rights of a
stockholder of a share of Common Stock, including the right to vote
(if any); except that a Phantom Share shall have the right to
Deemed Dividends as described in Article 8. The Fair Market Value
of a Phantom Share on any date shall be deemed to be the Fair
Market Value of a share of Common Stock on that date.
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2.23
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Phantom Share Account – means the account to which the Company
will make a book entry to credit the portion of Eligible Director
Fees that a Participant elects to defer under the Plan and deem
invested in the Phantom Share Fund. The Phantom Share Account shall
represent each Participant’s proportionate interest in the
Phantom Share Fund. Notwithstanding anything in the Plan to the
contrary, a Participant’s proportionate interest in the
Phantom Share Fund shall be expressed as units, and shall be
determined using unit accounting.
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2.24
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Phantom Share Fund – means the fund to which the Company will
credit the aggregate Eligible Director Fees that all Participants
elect to defer in their Phantom Share Account, which shall be
deemed to be primarily invested in Phantom Shares.
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2.25
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Plan -
the Henry Schein, Inc. Non-Employee Director Deferred Compensation
Plan, as amended from time to time.
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2.26
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Plan Year – the calendar year.
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2.27
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Retainer Fees
– retainer fees received by a
Participant for service on the Board of Directors as a director
during a Plan Year.
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2.28
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Rule 16b-3 - means the “short-swing” profit
recovery rule pursuant to Rule 16b-3 promulgated under Section
16(b) of the Exchange Act
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