As filed with the Securities and Exchange Commission on August 15, 2017
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
STANLEY BLACK & DECKER, INC.
(Exact Name of Registrant as Specified in Its Charter)
| Connecticut | 1000 Stanley Drive | 06-0548860 | ||
|
(State or Other Jurisdiction of
Incorporation or Organization) |
New Britain, Connecticut 06053 (Address of Principal Executive Offices Including Zip Code) |
(I.R.S. Employer Identification No.) |
Stanley Black & Decker, Inc. Deferred Compensation Plan for Non-Employee Directors
(Full Title of the Plan)
Janet M. Link, Esquire
Stanley Black & Decker, Inc.
1000 Stanley Drive
New Britain, Connecticut 06053
(860) 225-5111
(Name, address and telephone number, including area code, of agent for service)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934, as amended. (Check one):
| Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
| Non-accelerated filer | ☐ (Do not check if a smaller reporting company) | Smaller reporting company | ☐ | |||
| Emerging Growth Company | ☐ | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
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| Title of Securities to be Registered(1) |
Amount to be
Registered(1) |
Proposed Maximum
Offering Price
Per
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Proposed
Maximum
Offering Price |
Amount of
Fee |
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|
Deferred Compensation Obligations(2) |
$40,000,000 | N/A | $40,000,000 | $4,636 | ||||
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| (1) | Pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), this Registration Statement also covers additional securities that may become issuable under the above Plan by reason of certain corporate transactions or events, including any stock dividend, stock split, recapitalization or any other similar transaction effected without the receipt of consideration which results in an increase in the number of the Registrant’s outstanding shares of Common Stock. |
| (2) | The deferred compensation obligations are unsecured obligations of Stanley Black & Decker, Inc. (the “Company”) to pay deferred compensation in the future pursuant to the terms of the Stanley Black & Decker, Inc. Deferred Compensation Plan for Non-Employee Directors. |
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I will be sent or given to participants as specified by Rule 428(b)(1) of the Securities Act of 1933, as amended (the “Securities Act”). In accordance with the rules and regulations of the Commission and the instructions to Form S-8, such documents are not being filed with the Commission either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Registrant hereby incorporates by reference into this Registration Statement the following documents previously filed with the Commission:
| (1) | Annual Report on Form 10-K for the fiscal year ended December 31, 2016; |
| (2) | Quarterly Reports on Form 10-Q for the fiscal quarters ended April 1, 2017 and July 1, 2017 |
| (3) | Current Reports on Form 8-K, filed with the Commission on January 5, 2017, January 19, 2017, March 14, 2017, April 25, 2017 and May 17, 2017; and |
| (4) | the description of the Common Stock contained in the Registrant’s registration statement on Form 8-A, filed with the Commission under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on November 1, 1985, and any amendment or report filed for the purpose of updating such description (including the amendment filed on March 12, 2010). |
In addition, all documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date hereof and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
This registration statement covers deferred compensation obligations (the “Deferred Compensation Obligations”) that may be offered under the Stanley Black & Decker, Inc. Deferred Compensation Plan for Non-Employee Directors (the “Plan”). The Deferred Compensation Obligations under the Plan represent obligations of the Company to pay participants certain compensation amounts that the participants have elected to defer. Subject to the terms and conditions set forth in the Plan, each participating non-employee director may elect to defer eligible compensation, and amounts deferred are credited to each participant’s account. The Deferred Compensation Obligations are payable in cash or in shares of the Company’s Common Stock (valued at the mean between the highest and lowest sales prices of the Common Stock reported as New York Stock Exchange-Composite Transactions for the first business day of the calendar quarter immediately following the quarter in which such compensation is earned), as elected by the participant, and generally will be paid either in a lump-sum or in installments over a certain term upon termination of service, in accordance with the Plan and the applicable deferral election notice.
Cash amounts credited to the participant’s account shall accrue interest commencing on the date such fees would otherwise have been paid, at a rate for each calendar quarter fixed by the Treasurer of the Company at the commencement of each such calendar quarter based upon the yield for five-year U.S. Treasury Notes as reported for the last business day of the preceding calendar quarter. Interest so determined shall be compounded at the end of each calendar quarter and credited to the participant’s account. Amounts credited to the participant’s account shall continue to accrue interest until distributed in accordance with the Plan.
Shares credited to the participant’s account shall accrue amounts equivalent to cash or stock dividends. Such amounts shall accrue interest or amounts equivalent to dividends in the same manner as other amounts which may be credited to a participant’s account.
The obligation to pay the vested balance of each Plan participant’s account shall at all times be an unfunded and unsecured obligation of the Company. Benefits are payable solely from the Company’s general funds and are subject to the risk of corporate insolvency. Participants will not have any interest in any particular assets of the Company by reason of any obligation created under the Plan.
The summary and description above does not purport to be complete and should be read in conjunction with, and is qualified in its entirety by reference to, the Plan.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
The validity of the Common Stock and Deferred Compensation Obligations being registered pursuant to this Registration Statement has been passed upon by Janet M. Link, Senior Vice President, General Counsel and Secretary of the Registrant. Ms. Link owns shares of the Registrant’s Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Connecticut Business Corporations Act . Sections 33-770 through 33-776 of the Connecticut Business Corporation Act provide that a corporation in the Company’s circumstances may indemnify a director or officer against judgments, fines, penalties, amounts paid in settlement and reasonable expenses actually incurred by him, including attorneys’ fees, for actions brought against him in his capacity as a director or officer, when it is determined by certain disinterested parties that he acted in good faith in a manner he reasonably believed to be in the corporation’s best interest (or in the case of conduct not in his official capacity, at least not opposed to the best interests of the corporation). In any criminal action or proceeding, it also must be determined that the director or officer had no reasonable cause to believe that his conduct was unlawful. The director or officer must be indemnified when he is wholly successful on the merits or otherwise in the defense of a proceeding or in circumstances where a court determines that he is entitled to indemnification or that it is fair and reasonable that the director or officer be indemnified. In connection with shareholder derivative suits, the director or officer may not be indemnified except for reasonable expenses incurred in connection with the proceeding (and then only if it is determined that he met the relevant standard of conduct described above), subject, however, to courts’ power under Section 33-774 to order indemnification. Unless ordered by a court under Section 33-774, a corporation may not indemnify a director with respect to conduct for which he was adjudged liable on the basis that he received a financial benefit to which he was not entitled, whether or not he was acting in his official capacity.
Certificate of Incorporation and Bylaws . The Stanley Black & Decker, Inc. Certificate of Incorporation provides that no director of the Company will be personally liable to the Company or any of its shareholders for monetary damages in an amount greater than the compensation received by that director for serving the Company during the year of the violation to the extent permitted by applicable law, which permits such limitation provided that such violation must not involve a knowing and culpable violation of law, enable the director or an affiliate to receive an improper personal gain, show a lack of good faith and a conscious disregard for the director’s duty to the corporation, amount to an abdication of the director’s duty to the corporation, or create liability for an unlawful distribution. The Company’s bylaws also provide for the indemnification of directors and officers to the extent permitted by applicable law.
Directors & Officers Insurance . The Company has purchased insurance providing officers and directors of the Company (and their heirs and other legal representatives) coverage against certain liabilities arising from any negligent act, error, omission or breach of duty claimed against them solely by reason of their being such officers and directors, and providing coverage for the Company against its obligation to provide indemnification as required by the above-described statute.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The exhibits to this Registration Statement are listed in the Exhibit Index, which appears at the end of this Registration Statement and is incorporated by reference herein.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
| (i) | to include any prospectus required by Section 10(a)(3) of the Securities Act; |
| (ii) | to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; |
| (iii) | to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; |
provided, however , that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement;
(2) that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New Britain, State of Connecticut, on this fifteenth day of August, 2017.
| STANLEY BLACK & DECKER, INC. | ||||
| By: |
/s/ Janet M. Link |
|||
| Name: | Janet M. Link | |||
| Title: | Senior Vice President, General Counsel and Secretary | |||
Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities indicated on this fifteenth day of August, 2017.
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Signature |
Title |
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* |
Director and President and Chief Executive Officer (Principal Executive Officer) |
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| James M. Loree | ||
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* |
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
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| Donald Allan Jr. | ||
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* |
Vice President and Chief Accounting Officer (Principal Accounting Officer) |
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| Jocelyn S. Belisle | ||
|
* |
Director | |
| Andrea J. Ayers | ||
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* |
Director | |
| George W. Buckley | ||
|
* |
Director | |
| Patrick D. Campbell | ||
|
* |
Director | |
| Carlos M. Cardoso | ||
|
* |
Director | |
| Robert B. Coutts | ||
|
Signature |
Title |
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|
* |
Director | |
| Debra A. Crew | ||
|
* |
Director | |
| Michael D. Hankin | ||
|
* |
Director | |
| Marianne M. Parrs | ||
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* |
Director | |
| Robert L. Ryan | ||
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* By: /s/ Janet M. Link Janet M. Link Attorney-in-Fact |
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EXHIBIT INDEX
| 3.1 | Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed on May 2, 2012). | |
| 3.2 | Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2A to the Company’s Annual Report on Form 10-K filed February 15, 2017). | |
| 4.1 | Specimen of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3 dated November 6, 2003). | |
| 5.1* | Opinion of Janet M. Link as to legality. | |
| 23.1* | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm. | |
| 23.2* | Consent of Janet M. Link (included in Exhibit 5.1). | |
| 24.1* | Stanley Black & Decker, Inc. Power of Attorney. | |
| 99* | Stanley Black & Decker Deferred Compensation Plan for Non-Employee Directors. | |
| * | Filed herewith. |
Exhibit 5.1
[Letterhead of Stanley Black & Decker, Inc.]
August 15, 2017
Stanley Black & Decker, Inc.
1000 Stanley Drive
New Britain, Connecticut 06053
RE: Stanley Black & Decker, Inc. — Registration Statement on Form S-8
Ladies and Gentlemen:
I am the Senior Vice President, General Counsel and Secretary of Stanley Black & Decker, Inc., a Connecticut corporation (the “ Corporation ”), and have assisted the Corporation in connection with the filing by the Corporation of a Registration Statement on Form S-8 (the “ Registration Statement ”) relating to the registration of an aggregate of $40,000,000 of unsecured obligations of the Company to pay deferred compensation in the future (the “ Deferred Compensation Obligations ”) pursuant to the Corporation’s Deferred Compensation Plan for Non-Employee Directors (the “ Plan ”).
I have examined the originals, or copies certified or otherwise identified to my satisfaction, of the Plan and such other corporate records, documents, certificates or other instruments as in my judgment are necessary or appropriate to enable me to render the opinion set forth below. In rendering such opinion, I have assumed that grants of shares of the Corporation’s Common Stock, par value $2.50 per share (the “ Common Stock ”) subject to restrictions on transferability pursuant to the Plan will be made only for past services to the Corporation having an aggregate value not less than the aggregate par value of the Common Stock so granted.
Based on the foregoing, I am of the opinion that the Deferred Compensation Obligations which may be incurred pursuant to the Plan will constitute valid and legally binding obligations of the Corporation, enforceable against the Corporation in accordance with their terms, except to the extent that enforcement thereof may be limited by (a) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity) and (c) public policy considerations which may limit the rights of the parties to obtain further remedies.
Stanley Black & Decker, Inc.
August 15, 2017
Page 2
I hereby consent to the filing of this opinion as an exhibit to the Corporation’s Registration Statement. In giving such consent, I do not thereby admit that I am within the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the rules and regulations of the Securities and Exchange Commission thereunder. Very truly yours,
|
/s/ Janet M. Link |
| Janet M. Link |
| Senior Vice President, General Counsel and Corporate Secretary |
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Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the Deferred Compensation Plan for Non-Employee Directors of Stanley Black & Decker, Inc. of our reports dated February 15, 2017, with respect to the consolidated financial statements and schedule of Stanley Black & Decker, Inc. and subsidiaries (the “Company”) and the effectiveness of internal control over financial reporting of the Company included in its Annual Report (Form 10-K) for the year ended December 31, 2016, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Hartford, Connecticut
August 15, 2017
Exhibit 24.1
POWER OF ATTORNEY
Each of the undersigned officers and/or directors of Stanley Black & Decker, Inc., a Connecticut corporation (the “Registrant”), does hereby make, constitute and appoint each of Janet M. Link and Donald J. Riccitelli, with full power of substitution and resubstitution, for him or her in his or her name, place and stead, in any and all capacities, to execute (a) a Registration Statement on Form S-8 (the “Form S-8 Registration Statement”) under the Securities Act of 1933 concerning (i) the Registrant’s common stock, par value $2.50 per share, to be offered in connection with certain equity compensation plans of the Registrant and its subsidiaries including, the Stanley Black & Decker, Inc. Deferred Compensation Plan for Non-Employee Directors (the “Plan”) and (ii) unsecured obligations of the Registrant to pay deferred compensation in the future pursuant to the Plan, (b) any and all amendments and supplements to the Form S-8 Registration Statement, including post-effective amendments, and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933 and (c) other instruments necessary or appropriate in connection therewith, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary or desirable to be done, and to take or cause to be taken any and all such further actions in connection with such registration statement as such attorney-in-fact and agent, in his or her sole discretion, deems necessary or appropriate, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this power of attorney has been signed by the following persons in the capacities listed below on August 15, 2017.
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Signature |
Title |
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/s/ James M. Loree |
Director and President and Chief Executive Officer (Principal Executive Officer) |
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| James M. Loree | ||
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/s/ Donald Allan Jr. |
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
|
| Donald Allan Jr. | ||
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/s/ Jocelyn S. Belisle |
Vice President and Chief Accounting Officer (Principal Accounting Officer) |
|
| Jocelyn S. Belisle | ||
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/s/ Andrea J. Ayers |
Director | |
| Andrea J. Ayers | ||
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/s/ George W. Buckley |
Director | |
| George W. Buckley | ||
|
Signature |
Title |
|
|
/s/ Patrick D. Campbell |
Director | |
| Patrick D. Campbell | ||
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/s/ Carlos M. Cardoso |
Director | |
| Carlos M. Cardoso | ||
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/s/ Robert B. Coutts |
Director | |
| Robert B. Coutts | ||
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/s/ Debra A. Crew |
Director | |
| Debra A. Crew | ||
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/s/ Michael D. Hankin |
Director | |
| Michael D. Hankin | ||
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/s/ Marianne M. Parrs |
Director | |
| Marianne M. Parrs | ||
|
/s/ Robert L. Ryan |
Director | |
| Robert L. Ryan | ||
Exhibit 99
As Amended through July 19, 2017
STANLEY BLACK & DECKER, INC.
Deferred Compensation Plan For
Non-Employee Directors (the “Plan”)
1. Eligibility . Each member of the Board of Directors of Stanley Black & Decker, Inc. (the “Corporation”) who is not an employee of the Corporation or any of its subsidiaries is eligible to participate in the Plan.
2. Participation . (a) Time of Election . Prior to the beginning of any calendar year, commencing with calendar year 1981, each eligible Director may elect to participate in the Plan by directing that all or any part of the compensation (including fees payable for services as chairman or a member of a committee of the Board) which otherwise would have been payable currently for services as a Director during such calendar year and succeeding calendar years shall be credited to a deferred compensation account (the “Director’s account”). Any person who shall become a Director during any calendar year, and who was not a Director of the Corporation prior to the beginning of such calendar year, may elect, within 30 days of the date the Director becomes eligible to participate in the Plan, to defer payment of all or any part of the Director’s compensation for the remainder of such calendar year following the election and for succeeding calendar years.
(b) Form and Duration of Election . An election to participate in the Plan shall be made by written notice executed by the Director and filed with the Secretary of the Corporation. Such election shall continue until the Director terminates such election by written notice filed with the Secretary of the Corporation. Any such termination shall become effective as of the end of the calendar year in which such notice is given and only with respect to fees payable for services as a Director thereafter. Amounts credited to the Director’s account prior to the effective date of termination shall not be affected by such termination and shall be distributed only in accordance with the terms of the Plan. Notwithstanding the foregoing, a Director may cancel his or her election 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 6 months, provided that the cancellation occurs by the later of the end of the Director’s taxable year or the 15 th day of the third month following the date on which the Director incurs such impairment.
(c) Adjustment of Amount to be Deferred . Prior to the beginning of any calendar year, a Director participating in the Plan may file another written notice with the Secretary of the Corporation electing to change the amount of compensation to be credited to the Director’s account for services as a Director commencing with such calendar year. Amounts credited to the Director’s account prior to the effective date of such change shall not be affected by such change and shall be distributed only in accordance with the terms of the Plan.
(d) Renewal . A Director who has terminated his election, or a newly elected Director who failed to make an initial election to participate may thereafter file an election to participate for the calendar year subsequent to the filing of such election and succeeding calendar years.
3. The Director’s Account . All compensation which a Director has elected to defer under the Plan shall be credited to the Director’s account, either in cash or in shares of the Corporation’s Common Stock (valued at the mean between the highest and lowest sales prices of the Common Stock reported as New York Stock Exchange-Composite Transactions for the first business day of the calendar quarter immediately following the quarter in which such compensation is earned), as elected by the Director. The Director shall not have any interest in the cash or Common Stock until distributed in accordance with the Plan.
Cash amounts credited to the Director’s account shall accrue interest commencing on the date such fees would otherwise have been paid, at a rate for each calendar quarter fixed by the Treasurer of the Corporation at the commencement of each such calendar quarter based upon the yield for five-year U.S. Treasury Notes as reported for the last business day of the preceding calendar quarter. Interest so determined shall be compounded at the end of each calendar quarter and credited to the Director’s account. Amounts credited to the Director’s account shall continue to accrue interest until distributed in accordance with the Plan.
Shares credited to the Director’s account shall accrue amounts equivalent to cash or stock dividends. Such amounts shall accrue interest or amounts equivalent to dividends in the same manner as other amounts which may be credited to a Director’s account.
4. Distribution from Accounts . (a) Form of Election . An election made pursuant to paragraph 2(b) to participate in the Plan shall also include a Director’s election with respect to the distribution of the amount of cash and shares credited to the Director’s account with respect to such election. A Director may elect to receive such amount in one lump-sum payment or in a number of approximately equal installments (not to exceed 10 installments) as set forth in the applicable election form. The lump-sum payment or the first installment shall be paid on the payment date specified in the election form, which date shall fall within the first twelve months following the date on which the Director separates from service. Each payment shall be considered a “separate payment” and not of a series of payments for purposes of Section 409A (as defined in paragraph 9). The first payment shall be made on the date specified in the applicable election form and any subsequent installments shall be paid on the first business day of each succeeding calendar year during the installment period until the entire amount credited to the Director’s account shall have been paid. If shares have been credited to the Director’s account, cash payment will be made with the final installment for any fraction of a share credited to the Director’s account.
(b) Adjustment of Method of Distribution . Once made, an election may not be changed either in amount or method of payment if the effect of such change is to accelerate the distribution of cash and shares credited to the Director’s account, provided that a Director may make a subsequent election to delay a distribution or to change the method of distribution with respect to previously deferred amounts by filing a written notice changing the election with the Secretary of the Corporation as long as such election (i) will not take effect until at least twelve months after the date on which the election is made; (ii) defers the distribution with respect to which such election is made (other than an election made on account
2
of “disability,” “death” or an “unforeseeable emergency,” each within the meaning of Section 409A) for a period of not less than five years from the date such distribution would otherwise have been paid; and (iii) is made not less than twelve months before the date the distribution is scheduled to be paid. Notwithstanding the foregoing, the Corporation may, in its sole discretion, authorize the acceleration of a payment in accordance with paragraphs (j)(4)(ii) through (xiv) of Treasury Regulation §1.409A-3.
5. Distribution on Death . If a Director should die before all amounts credited to the Director’s account shall have been paid in accordance with the election referred to in paragraph 4, the balance in such account shall be paid as soon as administratively practicable, but in no event later than 60 days, following the date of the Director’s death (a) to the beneficiary designated in writing by the Director or (b) to the Director’s estate in the event that the designated beneficiary has predeceased the Director or no beneficiary designation has been made by the Director.
6. Miscellaneous . (a) The right of a Director to receive any amount in the Director’s account shall not be transferable or assignable by the Director, except by will or by the laws of descent and distribution, and no part of such amount shall be subject to attachment or other legal process.
(b) The Corporation shall not be required to reserve or otherwise set aside funds or shares of Common Stock for the payment of its obligations hereunder. The Corporation shall make available as and when required a sufficient number of shares of Common Stock to meet the needs of the Plan, either by the issuance of treasury shares, new shares of Common Stock of the Corporation, or the purchase of shares of Common Stock on the open market or through private purchases, as the Corporation may determine. To the extent that registration of such shares under the Securities Act of 1933 shall be required prior to their resale, the Corporation undertakes to either file a registration statement relating to such shares or include such shares in another registration statement to be filed within a reasonable time.
(c) The Corporate Governance Committee of the Board of Directors shall administer and interpret the Plan and make all determinations deemed necessary or desirable for the Plan’s implementation.
(d) The Board of Directors may at any time amend or terminate the Plan. No amendment or termination (other than an amendment or termination as necessary to comply with Section 409A) shall impair the rights of a Director with respect to amounts then in the Director’s account.
(e) Each Director participating in the Plan will receive an annual statement indicating the amount of cash and number of shares credited to the Director’s account as of the end of the preceding calendar year.
(f) If adjustments are made to outstanding shares of Common Stock or to the capital structure of the Corporation as a result of stock dividends, stock splits or combinations, recapitalizations, mergers, consolidations, exchange offers, issuer tender offers, extraordinary cash dividends, or similar events or transactions, an appropriate adjustment will also be made in the number of shares credited to the Director’s account.
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7. Definition of Change in Control . For purposes of this Plan, a “Change in Control of the Corporation” shall mean a “change in the ownership” or the “effective control” of the Corporation or a “change in the ownership of a substantial portion of the Corporation’s assets” (each within the meaning of Section 409A).
8. Accelerated Payment Following a Change in Control . Notwithstanding any of the preceding provisions of this Plan, as soon as possible following any Change in Control of the Corporation, but in no event later than 30 days following such Change in Control, a lump-sum payment shall be made, in cash, of the entire account hereunder of any current or former Director. For purposes of calculating the amount of such payment, any shares of the Corporation’s common stock credited to, or accrued in, any Director’s account shall be valued at the higher of (i) the closing price of such shares as reported on the New York Stock Exchange - Composite Transactions on the date preceding and nearest the date the Change in Control occurred and (ii) the highest per share price for the common stock of the Corporation actually paid in connection with such Change in Control.
9. Section 409A . Reference to “Section 409A” is to section 409A of the Internal Revenue Code of 1986, as amended, and any proposed, temporary or final regulations, or any other guidance, promulgated with respect to section 409A by the U.S. Department of Treasury or the Internal Revenue Service. The Plan is intended to provide for the deferral of compensation in full compliance with Section 409A. The Plan shall be construed in a manner to give effect to such intention. Notwithstanding any other provision of this Plan, if payment of benefits under this Plan to a Director who is a “Specified Employee” (as defined below) would be deemed to be on account of his separation from service under Section 409A, no payments shall be made to such Specified Employee within six months after such Specified Employee’s separation from service (or, if earlier, the date of his death). Any amounts subject to delayed payment under the preceding sentence shall be paid on the first business day after the expiration of such six-month period, together with any earnings accrued in the Director’s account on such amounts during such six-month period. For purposes of this Plan, the term “Specified Employee” shall mean a Specified Employee of the Corporation or any affiliate, as defined in Treasury Regulations Section 1.409A-1(i).
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