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Exhibit
10.1
SUN HYDRAULICS
CORPORATION
AMENDED AND RESTATED 2004
NONEMPLOYEE DIRECTOR EQUITY
AND DEFERRED COMPENSATION
PLAN
ARTICLE I.
DEFINITIONS
1.1 DEFINITIONS. Whenever the
following terms are used in this Plan they shall have the meanings
specified below unless the context clearly indicates to the
contrary:
(a) “Accounting
Date”: The last day of each fiscal year and the last day of
any fiscal quarter.
(b) “Accounting
Period”: The period beginning on the day immediately
following an Accounting Date and ending on the next following
Accounting Date.
(c)
“Administrator”: The Board.
(d)
“Beneficiary”: The person or persons (natural or
otherwise) designated pursuant to Section 7.6.
(e) “Board”: The
Board of Directors of the Company.
(f) “Code”: The
Internal Revenue Code of 1986, as amended.
(g) “Common
Stock”: The Company’s Common Stock, par value $.001 per
share.
(h) “Common Stock
Unit”: A bookkeeping entry that records the equivalent of one
Share pursuant to Section 5.2.
(i) “Company”:
Sun Hydraulics Corporation or any successor or successors
thereto.
(j) “Deferral
Commitment”: An agreement made by a Nonemployee Director in a
Participation Agreement to have a specified portion of his or her
Share Compensation and/or Fees deferred under the Plan for a
specified period in the future.
(k) “Deferral
Period”: The Plan Year for which a Director has elected to
defer a portion of his or her Share Compensation and/or
Fees.
(l) “Deferred
Account”: The account maintained for each Nonemployee
Director who elects to defer Share Compensation and/or Fees under
Article V.
(m) “Deferred Account
Balance”: The balance of a Nonemployee Director’s
Deferred Account as specified in Section 5.3.
(n) “Fair Market
Value”: With respect to a share of Common Stock, the average
of the high and low selling prices of a share of Common Stock as
reported through the Nasdaq Stock Market (or any other exchange or
over-the-counter market if sales of the Common Stock are no longer
reported through the Nasdaq Stock Market) for a particular date, or
if there was no sale of Common Stock so reported for such day, on
the most recently preceding day on which there was such a
sale.
(o) “Fees”: The
portion of the compensation payable to Nonemployee Directors in
cash for service as a director of the Company (including
compensation for attendance at meetings of the Board and Board
committees).
(p) “Nonemployee
Director”: An individual duly elected or chosen as a Director
of the Company who is not also an employee of the Company or its
subsidiaries.
(q) “Participation
Agreement”: The agreement submitted by a Nonemployee Director
to the Administrator in which a Nonemployee Director may specify a
Voluntary Amount, or may elect to defer receipt of a portion of his
or her Share Compensation and/or Fees for a specified period in the
future.
(r) “Payment
Date”: The date on which Director Fees are payable as such
dates are established by the Board from time to time. Initially,
Director Fees shall be payable at the conclusion of each Board and
Board committee meeting.
(s) “Plan”: The
Plan set forth in this instrument as it may, from time to time, be
amended.
(t) “Plan Year”:
The 12-month period beginning January 1 through
December 31.
(u) “Rule 16b-3”:
Rule 16b-3 promulgated under the Securities Exchange of 1934 (or
any successor rule to the same effect), as in effect from to
time.
(v) “Settlement
Date”: The date on which a Nonemployee Director terminates
his or her service as a Director of the Company. Settlement Date
shall also include with respect to any Deferral Period the date
prior to the date of termination as a Director selected by a
Nonemployee Director in a Participation Agreement for distribution
of all or a portion of the Share Compensation and/or Fees deferred
during such Deferral Period as provided in
Section 7.3.
(w) “Share
Compensation”: Shares payable to a Nonemployee Director for
attendance at a Board or committee meeting pursuant to
Section 3.1.
(x) “Shares”:
Fully paid, non-assessable shares of Common Stock. Shares may be
shares of original issuance or treasury shares or a combination of
the foregoing.
(y) “Trust”: The
meaning set forth in Section 6.2.
(z) “Voluntary
Amount”: The meaning set forth in
Section 3.2(a).
ARTICLE II.
PURPOSE
2.1 PURPOSE. The purpose of
this Plan is to secure for the Company and its shareholders the
benefits of the incentive inherent in increased ownership of Common
Stock of the Company by members of the Board of Directors of the
Company who are not employees of the Company or any of its
Subsidiaries, by providing for the payment of a portion of each
Nonemployee Director’s Fees in shares of Common Stock or
Common Stock Units, and permitting each Nonemployee Director to
receive some or all of the remainder of his or her Fees in shares
of Common Stock or Common Stock Units. It is expected that such
ownership will further align the interests of such Nonemployee
Directors with the shareholders of the Company, thereby promoting
the long-term profits and growth of the Company, and will encourage
such Nonemployee Directors to remain directors of the Company and
provide them an opportunity to defer the receipt of some or all of
such Fees. It is also expected that the Plan will encourage
qualified persons to become directors of the Company.
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ARTICLE III. AUTOMATIC AND
VOLUNTARY SHARE COMPENSATION AMOUNTS
3.1 AUTOMATIC
AMOUNT.
(a) As compensation for the
attendance of each Nonemployee Director at each meeting of the
Board, and each meeting of each committee of the Board on which
such Nonemployee Director serves when the committee meeting is not
held within one day of a meeting of the Board, each Nonemployee
Director shall be paid Shares with a Fair Market Value of Two
Thousand Five Hundred Dollars ($2,500.00).
(b) ISSUANCE OF SHARES.
Promptly following each Board or committee meeting for which Share
Compensation is payable pursuant to Section 3.1(a), the
Company shall issue to each Nonemployee Director a number of whole
Shares equal to Two Thousand Five Hundred Dollars ($2,500.00)
divided by the Fair Market Value on the date of the meeting. To the
extent that the application of the foregoing would result in the
issuance of a fractional Share, no fractional Share shall be
issued, but instead, the Company shall maintain a separate
noninterest bearing account for such Nonemployee Director, which
account shall be credited with the Fair Market Value of such
fractional Share as of such meeting date, and which amount shall be
combined with similar amounts so credited to such account with
respect to fractional Shares otherwise issuable with respect to the
Share Compensation subsequently payable to such Nonemployee
Director. When whole Shares are issued by the Company to the
Nonemployee Director under this Section 3.1(b) or
Section 3.2(b) below and the amount then in such account is in
excess of the Fair Market Value of the Shares then being issued,
the Company shall issue an additional Share to such Nonemployee
Director and debit such account by such Fair Market Value. The
Nonemployee Director shall hold the Shares issued by the Company
under this Plan for a period of six months and one day from the
date of the meeting with respect to which such Shares were issued
unless the issuance of such Shares is exempt under Rule 16b-3. The
Company shall pay any and all fees and commissions incurred in
connection with the payment of Share Compensation to a Nonemployee
Director.
3.2 VOLUNTARY
AMOUNT.
(a) ELECTION. For any Plan
Year, a Nonemployee Director may elect to have up to 100% of his or
her Fees payable during such Plan Year (the amount so elected
referred to as a “Voluntary Amount”) paid by the
Company in the form of Shares and in lieu of cash payment of such
Voluntary Amount. For any Plan Year other than the Plan Year in
which this Plan is adopted, and with respect to each Nonemployee
Director elected to the Board thereafter, for any Plan Year other
than the Plan Year in which such Nonemployee Director is elected,
such election shall be made by the execution and delivery to the
Administrator of a Participation Agreement, which shall become
effective with respect to all Fees payable on Payment Dates
occurring more than six months after the delivery of the
Participation Agreement to the Administrator, including Fees
payable in all subsequent Plan Years unless such Participation
Agreement shall be subsequently modified by the Nonemployee
Director upon not less than six months advance notice to the
Administrator. Any modification shall be made through the execution
and delivery of a subsequent Participation Agreement, which shall
become effective six months after the delivery of the new
Participation Agreement to the Administrator.
(b) INITIAL YEAR OF
PARTICIPATION. In the event that during the Plan Year in which this
Plan is first adopted, a Nonemployee Director desires to elect to
have up to 100% of his or her Fees payable during such Plan Year
(the amount so elected referred to as a “Voluntary
Amount”) paid by the Company in the form of Shares in lieu of
the cash payment of such Voluntary Amount, or in the event that an
individual first becomes a Nonemployee Director during a Plan Year
and desires to make such an
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election, a Participation Agreement must
be submitted to the Administrator no later than 30 days following
the date on which this Plan becomes effective, or no later than 30
days following the date on which such individual becomes a
Nonemployee Director, respectively. Any such election made in such
Participation Agreement shall be effective only with regard to Fees
earned following the date the Participation Agreement is submitted
to the Administrator. If a Nonemployee Director does not submit a
Participation Agreement within such period of time, such
Nonemployee Director will not be eligible to elect a Voluntary
Amount except in accordance with Section 3.2(a).
(c) ISSUANCE OF SHARES.
Promptly following each Payment Date for which a Voluntary Amount
has been elected and is effective, the Company shall issue to each
Nonemployee Director a number of whole Shares equal to the
Voluntary Amount divided by the Fair Market Value of a Share on the
Payment Date. To the extent that the application of the foregoing
would result in the issuance of a fractional Share, no fractional
Share shall be issued, but instead, the Company shall maintain a
separate noninterest bearing account for such Nonemployee Director
(which shall be the same account, if any, as may be set up under
Section 3.1(b) above), which account shall be credited with
the Fair Market Value of such fractional Share as of such Payment
Date, and which amount shall be combined with similar amounts so
credited to such account with respect to fractional Shares
otherwise issuable in the future with respect to the Nonemployee
Director’s Voluntary Amount. When whole Shares are issued by
the Company to the Nonemployee Director under this
Section 3.2(b) or Section 3.1(b) above and the amount
then in such account is in excess of the Fair Market Value of the
Shares then being issued, the Company shall issue an additional
Share to such Nonemployee Director and debit such account by such
Fair Market Value. The Nonemployee Director shall hold the Shares
issued by the Company under this Plan for a period of six months
and one day from the date of the meeting with respect to which such
Shares were issued. The Company shall pay any and all fees and
commissions incurred in connection with the payment of Voluntary
Amounts to a Nonemployee Director.
ARTICLE IV. DEFERRAL OF SHARE
COMPENSATION AND/OR FEES
4.1 AMOUNT OF DEFERRAL. With
respect to each Plan Year, a Nonemployee Director may elect to
defer a percentage of his or her Share Compensation and/or Fees by
filing a Participation Agreement with the Administrator prior to
the beginning of such Plan Year. A Nonemployee Director may change
the percentage of his or her Share Compensation or Fees to be
deferred (or reduce such percentage to zero) by filing a subsequent
Participation Agreement with the Administrator. Any such change
shall be effective as of the first day of the Plan Year following
the Plan Year in which such Participation Agreement is filed with
the Administrator. If the percentage of a Nonemployee
Director’s Share Compensation sought to be deferred would
result in a fractional Share being deferred, the deferred Share
Compensation shall be rounded up to the nearest whole number of
Shares.
4.2 INITIAL YEAR OF
PARTICIPATION. In the event that an individual first becomes a
Nonemployee Director during a Plan Year and, if any Nonemployee
Director during the Plan Year in which this Plan is first adopted,
wishes to elect to defer the receipt of any Share Compensation or
Fees earned and payable to the individual with respect to such Plan
Year (a “Deferral Election”), a Participation Agreement
must be submitted to the Administrator no later than 30 days
following the date on which such individual becomes a Nonemployee
Director, or no later than 30 days following the date on which this
Plan becomes effective, respectively. Any Deferral Election made in
such Participation Agreement shall be effective only with regard to
Share Compensation and/or Fees earned following the date the
Participation Agreement is submitted to the Administrator. If a
Nonemployee Director does not submit a Participation Agreement
within such period of time, such Nonemployee Director will not be
eligible to elect to defer Share Compensation and Fees except in
accordance with Section 4.1.
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4.3 TERMINATION OF
PARTICIPATION. Participation in the Plan shall continue as long as
the Nonemployee Director is eligible to receive benefits under the
Plan.
4.4 MODIFICATION OF DEFERRAL
COMMITMENTS. Subject to Sections 7.3 and 7.6 below, a Deferral
Commitment shall be irrevocable with respect to the Plan
Yea
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