Attached files
file | filename |
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10-K - FORM 10-K - PENTAIR plc | c56440e10vk.htm |
EX-32.2 - EX-32.2 - PENTAIR plc | c56440exv32w2.htm |
EX-31.2 - EX-31.2 - PENTAIR plc | c56440exv31w2.htm |
EX-32.1 - EX-32.1 - PENTAIR plc | c56440exv32w1.htm |
EX-21 - EX-21 - PENTAIR plc | c56440exv21.htm |
EX-23 - EX-23 - PENTAIR plc | c56440exv23.htm |
EX-31.1 - EX-31.1 - PENTAIR plc | c56440exv31w1.htm |
EX-10.21 - EX-10.21 - PENTAIR plc | c56440exv10w21.htm |
EX-24 - EX-24 - PENTAIR plc | c56440exv24.htm |
Exhibit
10.14
PENTAIR,
INC.
COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
As Amended and Restated
Through December 16, 2009
COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
As Amended and Restated
Through December 16, 2009
SECTION 1
BACKGROUND
AND PURPOSE
1.1 Background. Effective as
of January 17, 1986, Pentair, Inc. adopted a Compensation
Plan for Non-Employee Directors. The Plan has been amended and
restated several times since its adoption, with the last such
restatement made effective January 1, 2008.
Pentair is again amending the Plan, by way of restatement, to
permit Non-Employee Directors to defer grants of equity awards
in addition to cash fees.
1.2 Purpose. Pentair has
created this Plan to permit its non-employee directors to defer
all or a portion of their retainer and meeting fees, whether to
be paid in the form of cash or Equity Awards, for future payment
in shares of Pentair common stock, together with earnings on
such deferred compensation as measured by changes in the value
of said stock.
SECTION 2
DEFINITIONS
Unless the context clearly requires otherwise, when capitalized
the terms listed below shall have the following meanings when
used in this Section or other parts of the Plan:
(a) Account is an account maintained
under the Plan by the Plan Agent to record a Directors
Share Units.
(b) Administrator is Pentair.
(c) Board is the Board of Directors of
Pentair, as elected from time to time.
(d) Change in Control is any one of the
following:
(i) When a Person, or more than one Person acting as a
group, acquires more than fifty percent (50%) of the total fair
market value or total voting power of Pentairs stock;
(ii) When a Person, or more than one Person acting as a
group, acquires within a twelve (12) month consecutive
period, ending with the date of the most recent stock
acquisition, stock of Pentair possessing at least thirty percent
(30%) of the total voting power of Pentairs stock;
(iii) When a majority of the members of Pentairs
Board is replaced within a twelve (12) month period by
directors whose appointment or election is not endorsed by a
majority of the members of such Board as constituted before such
appointment or election; or
(iv) When a Person, or more than one Person acting as a
group, acquires within a twelve (12) month consecutive
period assets from Pentair or an entity controlled by Pentair
that have a total gross fair market value equal to seventy-five
percent (75%) of the total fair market value of the assets of
Pentair and all such entities.
Once a Person or group acquires stock meeting the thresholds set
forth in paragraphs (i) and (ii) immediately
preceding, additional acquisitions of such stock by that Person
or group shall be ignored in determining whether another Change
in Control has occurred. Asset transfers between or among
controlled entities as determined before such transfers shall
not be considered in applying paragraph (iv) immediately
preceding.
(e) Code is the Internal Revenue Code of
1986, as amended.
(f) Deferred Compensation is an amount
of Fees, meeting attendance fees and Equity Awards, the payment
of which a Director has elected to receive at some future time
pursuant to the terms of the Plan, together with any matching
contributions made by Pentair with respect to Fees deferred.
(g) Director is a member of the Board
who is neither simultaneously also an employee of Pentair or a
related company, nor an individual rendering other services to
Pentair or a related company as an independent contractor.
(i) Equity Awards are awards granted to
a Director under the Omnibus Incentive Plan that are designated
as eligible to be deferred under this Plan in the award letter
or other document evidencing such award.
(ii) Fair Market Value has the meaning
ascribed in the Omnibus Incentive Plan.
(h) Fees are a Directors annual
Board and committee retainer and committee chair and lead
director fees and other similar amounts, excluding meeting
attendance fees, paid in cash periodically by Pentair.
(i) Omnibus Incentive Plan is the
Pentair, Inc. 2008 Omnibus Stock Incentive Plan, or any
successor thereto, as it may be amended from time to time.
(i) Pentair is Pentair, Inc., a
Minnesota corporation.
(j) Person is any individual, firm,
partnership, corporation or other entity, including any
successor (by merger or otherwise) of such entity, or a group of
any of the foregoing acting in concert.
(k) Plan is the Pentair, Inc.
Compensation Plan for Non-Employee Directors as described in
this plan document effective December 16, 2009, and as it
may be amended from time to time thereafter.
(l) Plan Agent is the entity duly
appointed by Pentair to (i) receive funds resulting from a
Directors deferral of Fees, meeting attendance fees and
cash-based Equity Awards, from Pentair matching contributions
and from dividends declared on Stock; (ii) purchase shares
of Stock with such funds; and (iii) maintain Plan Accounts.
(m) Share Unit is a unit equal in value
to one share of Stock.
(n) Stock is Pentair common stock, par
value $0.162/3 per share.
(o) Year is the twelve
(12) consecutive month period beginning January 1 and
ending December 31.
SECTION 3
DEFERRAL OF
FEES AND EQUITY AWARDS
3.1 Eligibility. Upon
becoming a member of the Board, a Director may elect to defer
receipt of payment of some or all of the Fees paid, or Equity
Awards granted, on account of service as a Director until such
future time as the Director shall designate. A Director may also
make a deferral election with respect to meeting attendance
fees. If a Director does not make a timely deferral election
with respect to the Fees or meeting attendance fees payable for
a Year, then all such amounts shall be paid in cash to the
Director. If a Director does not make a timely deferral election
with respect to an Equity Award, then all such amounts shall be
paid in the time and manner provided by such Equity Award.
3.2 Deferral Election.
(a) General Rule. Each Year a Director may
elect to defer receipt of (i) a designated dollar amount or
percentage of Fees and meeting attendance fees, with any
percentage designation being made in ten percent (10%)
increments up to one hundred percent (100%) of such amounts, and
(ii) a percentage of Equity Awards, with any such
percentage designation being made in ten percent (10%)
increments up to one hundred percent (100%), and to receive such
amount or percentage as Deferred Compensation. No election to
receive Deferred Compensation shall be valid unless entered into
by the date prescribed by the Administrator. Generally, a
deferral election must be made prior to the first day of the
Year in which the amounts to be deferred are earned or the
Equity Award is to be granted; but for individuals who first
become Directors during a Year, the deferral election for such
first Year may be made no later than thirty (30) days
following the date such individuals Board service begins
and shall apply to Fees, meeting attendance fees and Equity
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Awards earned or granted after the date of such election. A
deferral election is irrevocable with respect to the Year or the
Equity Award for which such election is made. Once the time for
making a timely election has passed, a Director who did not
timely make a deferral election for a Year or an Equity Award
shall be deemed to have elected to not participate in the Plan.
Notwithstanding the foregoing, if an Equity Award is subject to
a substantial risk of forfeiture, a Director may elect to defer
that portion of the Equity Award that will vest at least twelve
(12) months after the date of the deferral election;
provided that such deferral election must be made no later than
the first thirty (30) days after the date such Equity Award
is granted (or such earlier time as is prescribed by the
Administrator); and provided further that if the Equity Award
actually vests prior to such twelve (12) month period by
reason of the Directors death, disability, or a Change in
Control, then the deferral election shall be cancelled.
The Administrator also may permit deferrals of Fees, meeting
attendance fees and Equity Awards at such other times as are
permitted by Code section 409A.
(b) Former Director. A Director who was
eligible to participate in the Plan, who loses such eligibility
by reason of ceasing to serve on the Board or otherwise, and who
again becomes eligible to participate in the Plan, shall be able
to again make an election to defer payment of Fees, meeting
attendance fees and Equity Awards as provided in Code
section 409A. If the individual can instead qualify as a
newly elected Director, then the election rule for such
Directors will apply.
3.3 Matching
Contribution. Pentair shall make a matching
contribution each month on behalf of each Director who has
elected to defer payment of some or all of the Fees otherwise
payable in cash to the Director. Said matching contribution
shall be equal to fifteen percent (15%) of such amount of the
Fees as the Director shall have elected to defer hereunder.
3.4 Accounting for Deferred
Compensation. (a) The Administrator
shall cause the Plan Agent to establish an Account for each
Director who elects to participate in the Plan. All Deferred
Compensation shall be allocated to Accounts as Share Units.
(b) The Plan Agent shall purchase Stock on the open market
with the Deferred Compensation funds received from Pentair. The
Plan Agent shall make all such purchases over one (1) or
more business days each month, as agreed to by the Plan Agent
and Pentair. All Stock so purchased shall be allocated to
Accounts based on the average purchase price obtained over said
monthly purchase period and held in a street name or a nominee
name; no Director shall have voting or other ownership rights
with respect to any Stock acquired for purposes of the Plan.
Stock purchased under the Plan by the Plan Agent shall be held
by Pentair as an investment to assist Pentair in meeting its
obligation to pay Deferred Compensation to Directors.
(c) If a deferred Equity Award relates to shares or is
valued in relation to the Fair Market Value of a share, the
Directors Account shall be credited with a number of Share
Units equal to the number of shares or share-related Equity
Awards so deferred. If a deferred Equity Award is valued in
relation to cash (such as dividend equivalents), such deferred
cash amount shall be used to purchase Stock as provided in
subsection (b).
(d) Share Units allocated to Accounts shall be adjusted to
reflect Stock dividends or splits or other similar adjustments.
Cash dividends paid with respect to Stock purchased for purposes
of the Plan shall be used to purchase Stock and allocated to
Accounts as Share Units.
(e) The portion of an Account attributable to a deferred
Equity Award shall vest at the same time as the related Equity
Award vests. All other Deferred Compensation shall be
immediately vested. Only vested Deferred Compensation shall be
payable hereunder.
3.5 Time of Distribution of Deferred
Compensation.
(a) General. Except as otherwise
provided for in the Plan, or as designated by the Director at
the time a deferral election is made, the Director shall receive
his or her entire vested Account balance allocable to a Year
within ninety (90) days of the first to occur of the
Directors (i) ceasing to be a member of the Board for
any reason other than death, (ii) death, or (iii) a
Change in Control. For purposes hereof, a deferred Equity Award
shall be allocable to the Account established for the Year in
which the Equity Award is granted.
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(b) Specific Dates of Distribution. A
Director may timely elect to receive distribution of his or her
entire vested Account balance allocable to a Year as of one
specific future date or one objectively determinable future
event date (e.g., a Directors sixty-fifth (65th)
birthday). Such an election, once finally effective, cannot be
changed by the Director. In the event of a Change in Control, a
Director who has elected a specific future date or an
objectively determinable future event date shall remain entitled
to payment on such date, regardless of whether a Change in
Control shall first occur. In the event of the death of a
Director prior to the date elected hereunder for a distribution,
the entire vested Account balance shall be paid within ninety
(90) days of the date of such Directors death.
(c) Distribution in Event of Death. In
the event of a Directors death, the vested Deferred
Compensation allocated to such Directors Account will be
distributed to the beneficiary designated by the Director, or
(if there shall be no such beneficiary designated) to the person
who would have a right to receive such distribution by will or
(if there shall be no will) by the laws of descent and
distribution of the state in which the Director was domiciled at
death. Such distribution shall be made in a single payment and,
except as otherwise described herein, in Stock. The Plan Agent
shall deliver to the beneficiary a number of whole shares of
Stock equal to the whole number of vested Share Units allocated
to such Directors Account. Any fractional Share Units
allocated to such Directors Account shall be converted to
cash using the then Fair Market Value, and the cash shall be
delivered to the beneficiary.
A beneficiary designation made by a Director shall remain in
effect until such time as a Director files a new beneficiary
designation with the Administrator. Prior to distribution, the
Administrator will verify the identity of the Directors
named beneficiary and such beneficiary will establish the right
to receive distribution of any unpaid vested Deferred
Compensation.
3.6 Form of Distribution of Deferred
Compensation. A Directors vested
Account shall be distributed in a single payment and, except as
otherwise described herein, in Stock. The Stock so distributed
shall be either (i) deposited into the Directors
dividend reinvestment account, if any, in which case any
fractional shares shall also be allocated to such account, or
(ii) delivered directly to said Director, in which case the
Plan Agent shall deliver a number of whole shares of Stock equal
to the whole number of Share Units allocated to such
Directors Account, and any fractional Share Units
allocated to such Account shall be converted to cash using the
then Fair Market Value, and the cash shall be delivered to the
Director. Shares delivered in payment of any deferred Equity
Award shall be issued under the Omnibus Incentive Plan.
SECTION 4
PLAN
ADMINISTRATION
4.1 Reporting. The Plan
Agent shall periodically report the following information to
Pentair:
(a) the total number of Share Units allocated to Accounts;
(b) the total shares of Stock purchased by the Plan Agent
since its last report; and
(c) the number of shares of Stock into which Share Units
then allocated to Accounts may be converted.
4.2 Accounting. The
Administrator and the Plan Agent shall assure that the following
records are kept under the Plan for each Year for each Director:
(a) whether the Director made an election to defer Fees,
meeting attendance fees or Equity Awards for the Year;
(b) the amount or percentage of Fees, meeting attendance
fees or Equity Awards deferred;
(c) the matching contribution made with respect to the Fees
deferred;
(d) the distribution election, if any, made by the
Director; and
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(e) the Year in which the Fees and meeting attendance fees
deferred were earned and the Year in which the Equity Awards
were granted.
4.3 Costs. Pentair shall pay
all commissions, service charges or other costs incurred with
respect to the purchase of Stock for purposes of the Plan. When
any such Stock is sold, the Director is responsible for payment
of any commissions, service charges or other costs incurred on
account of such sale.
SECTION 5
MISCELLANEOUS
5.1 Term of Plan. This
restated Plan shall be effective December 16, 2009, and
shall remain in effect until April 30, 2014, which
represents the end of the ten (10) year term approved by
shareholders effective as of May 1, 2004, unless earlier
terminated by the Board.
5.2 Board Tenure. The fact
that a Director has elected to participate in the Plan shall not
affect or qualify the right of the Board or of Pentair
shareholders to remove such individual from the Board,
consistent with the provisions of the Pentair Articles of
Incorporation or By-Laws, or applicable provisions of Minnesota
law.
5.3 Code
Section 409A. The Plan shall be
administered in a manner consistent with Code section 409A
and Treasury Regulations thereunder. Any permissible discretion
to accelerate or defer a Plan distribution under such
Regulations, the power to exercise which is not otherwise
described expressly in the Plan, shall be exercised solely by
the Administrator. The distribution provisions of
Section 3.6 are subject to exceptions or overrides in the
discretion of the Administrator or its delegate, but not in the
discretion of the Director concerned, as otherwise provided in
the Plan or as allowed under Code section 409A and Treasury
Regulations thereunder.
5.4 Delegation. To the
extent permitted under Minnesota law, the Administrator or the
Board may delegate to officers of Pentair any or all of their
duties, power and authority under the Plan, subject to such
conditions or limitations as the Administrator or the Board, as
applicable, may establish. Notwithstanding the prior sentence,
the Board may not delegate the power to amend or terminate the
Plan.
5.5 Funding. The Plan is a
non-qualified, unfunded and unsecured deferred compensation
arrangement. Pentair shall not establish, nor is it required to
establish, a trust to fund benefits provided to Directors
hereunder, or to earmark or segregate assets to provide for such
benefits. In the event of default of payment hereunder by
Pentair, the Directors shall have no greater entitlements or
security than does an unsecured general creditor of Pentair.
5.6 Nonalienability. Except
as otherwise expressly provided herein or as otherwise required
by law, no right or interest of any Director or the beneficiary
named by a Director under the Plan shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, charge, attachment, garnishment, execution,
levy, bankruptcy or any other disposition of any kind, either
voluntarily or involuntarily, prior to actual receipt of payment
by the person entitled to such right or interest under the
provisions hereof, and any such disposition or attempted
disposition shall be void.
5.7 Facility of Payment. If
the Administrator shall determine a Director or a
Directors named beneficiary entitled to a distribution
hereunder is incapable of caring for his or her own affairs
because of illness or otherwise, it may direct any distribution
from such Directors Account be made, in such amounts as it
shall determine, to the spouse, child, parent or other blood
relative of such Director or beneficiary, or any of them, or to
such other person or persons as the Administrator may determine,
until such date as the Administrator shall determine such
incapacity no longer exists; provided, however, the exercise of
this discretion shall not cause an acceleration or delay in the
time of distribution of Plan benefits except to the extent, and
only for the duration of, the time reasonably necessary to
resolve such matters or otherwise protect the interests of the
Plan. The Administrator shall be under no obligation to see to
the proper application of the distributions so made to such
person or persons and any such distribution shall be a complete
discharge of any liability under the Plan to such Director or
beneficiary, to the extent of such distribution.
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5.8 Default. In the event
Pentair shall fail to pay when due any Deferred Compensation,
and such failure to pay continues for a period of thirty
(30) days from receipt of written notice of nonpayment from
the affected Director, Pentair shall be in default hereunder and
shall reimburse the Director for expenses incurred in the
collection of such amount, including reasonable attorneys
fees. Pursuant to applicable provisions of Code
section 409A, any such reimbursement must be paid to the
affected Director not later than the end of the year following
the year in which such expenses are incurred. Failure to timely
submit a claim for reimbursement of any such expenses shall
result in the forfeiture of the claim.
5.9 Amendment or
Termination. The Plan may be amended or
terminated at any time by the Board; provided that the rights of
Directors or former Directors accrued under the Plan through the
date of such amendment or termination shall not be affected by
such action without the express written consent of those
individuals. Nothing herein shall be construed to prevent any
modification, alteration or amendment of the Plan which is
required to comply with the provision of any applicable law or
regulations relating to the establishment or maintenance of this
Plan.
5.10 Federal Securities and Other
Laws. Notwithstanding anything in the Plan to
the contrary, and to the extent and for the time reasonably
necessary to comply with federal securities laws (or other
applicable laws or regulations), distribution dates under the
Plan may be suspended, changed or delayed as necessary to comply
with such laws or regulations; provided, however, any
distributions so delayed shall be paid to the Director, or a
beneficiary named by a Director, as of the earliest date the
Administrator determines such distribution will not cause a
violation of any laws or regulations.
5.11 Applicable Law. To the
extent not preempted by applicable federal law, the Plan shall
be interpreted and construed in accordance with the substantive
laws of the State of Minnesota, but without regard to any choice
or conflict of laws provisions thereof.
5.12 Construction. The
Administrator shall have full power and authority to interpret
and construe any provision of the Plan, to adopt rules and
regulations not inconsistent with the Plan for purposes of
administering the Plan with respect to matters not specifically
covered in the Plan document and to amend and revoke any rules
and regulations so adopted. Except as otherwise provided in the
Plan, any interpretation of the Plan and any decision on any
matter within the discretion of the Administrator which is made
in good faith by the Administrator shall be final and binding.
5.13 Indemnification. To the
extent permitted by law, members of the Board shall be
indemnified and held harmless by Pentair with respect to any
loss, cost, liability or expense that may reasonably be incurred
in connection with any claim, action, suit or proceeding which
may arise by reason of any act or omission under the Plan which
is taken within the scope of the Plan. Such indemnification
shall cover any and all reasonable attorneys fees and
expenses, judgments, fines and amounts paid on settlement, but
only to the extent such amounts are (i) actually and
reasonably incurred, (ii) not otherwise paid or
reimbursable under an applicable Pentair paid insurance policy,
and (iii) not duplicative of other payments made or
reimbursements due under other indemnity agreements. In no event
shall this Section 5.13 be construed to require Pentair to
indemnify third parties with whom it may contract to perform
administrative duties with respect to the Plan.
5.14 Tax Withholdings and Consequences.
(a) Tax Withholdings. Benefits
earned under the Plan and payment of such benefits shall be
subject to tax reporting and withholding as required by law. The
amount of such withholding may be determined by treating such
benefits as being paid in the nature of supplemental wages.
(b) Tax Consequences. Pentair
does not represent or guarantee that any particular federal,
foreign, state or local income, payroll or other tax consequence
will result from participation in this Plan or payment of
benefits under the Plan.
5.15 Savings Clause. If any
term, covenant or condition of this Plan, or the application
thereof to any person or circumstance, shall to any extent be
held to be invalid or unenforceable, the remainder of this Plan,
or the application of any such term, covenant or condition to
persons or circumstances other than those as to which it has
been held to be invalid or unenforceable, shall not be affected
thereby, and, except to the extent
6
of any such invalidity or unenforceability, this Plan and each
term, covenant and condition hereof shall be valid and shall be
enforced to the fullest extent permitted by law.
5.16 Interpretation. Section
and subsection headings are for convenience of reference and not
part of this Plan, and shall not influence its interpretation.
Whenever any words are used in the Plan in the singular,
masculine, feminine or neuter form, they shall be construed as
though they were also used in the plural, feminine, masculine or
non-neuter form, respectively, in all cases where such
interpretation is reasonable.
5.17 Communications. Pentair
or the Plan Agent may, unless otherwise prescribed by any
applicable state or federal law or regulation, provide the
Plans prospectus, and any notices, forms or reports by
using either paper or electronic means.
SECTION 6
TRANSITIONAL
RULES
6.1 Introduction. This Plan
document is effective on December 16, 2009 (i.e., the
effective date) and, except as otherwise provided
herein, shall apply to only those Directors who are eligible to
actively participate in the Plan on or after the effective date
and to only such Fees, meeting attendance fees and Equity Awards
as are earned or granted on or after the effective date. The
provisions of the Plan document as in effect prior to the
effective date shall continue to govern the rights and
entitlements of persons and Fees and meeting attendance fees not
described in the immediately preceding sentence except to the
extent application of this Plan document does not materially
diminish or enlarge such rights and entitlements.
6.2 Grandfathered Deferred
Compensation. (a) Equity
Grants. The Plan as in effect prior to
January 1, 2008 (i.e., the prior plan) provided
for grants of Equity Compensation, as such term was defined in
the prior plan. No such grants have been made to Directors since
2002, meaning all Equity Compensation which was payable under
applicable provisions of the prior plan are grandfathered
amounts and are not subject to the provisions of Code
section 409A.
(b) Deferred Compensation. All
Fees and meeting attendance fees earned prior to January 1,
2005 and subject to an election to defer payment made by a
Director under applicable provisions of the prior plan are
grandfathered amounts and are not subject to the provisions of
Code section 409A. Any Fees and meeting attendance fees
earned on or after January 1, 2005 with respect to which an
election to defer payment has been made shall be subject to
applicable provisions of Code section 409A. Since
January 1, 2005, the prior plan was operated in accordance
with applicable provisions of Code section 409A, which
provisions are reflected in the Plan. Therefore, the Plan shall
govern elections to defer Fees and meeting attendance fees made
on or after January 1, 2005, even though the Plan does not
so retroactively amend the prior plan.
6.3 Separate Accounting. For
purposes of tracking Deferred Compensation which is treated as
grandfathered for purposes of Code section 409A, the
Administrator and the Plan Agent shall assure that records as
defined in Section 4.2 are kept in a manner as will clearly
differentiate between Fees and meeting attendance fees earned
and deferred prior to January 1, 2005, and Fees, meeting
attendance fees and Equity Awards earned or granted, and
deferred, on or after January 1, 2005.
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