HOG » Topics » Distribution of Post-2004 Deferred Benefit Account

This excerpt taken from the HOG 10-Q filed Oct 30, 2008.

Distribution of Post-2004 Deferred Benefit Account

Upon a nonemployee director’s Separation from Service for any reason, or upon the occurrence of a Change of Control Event, the Company will make payments to the nonemployee director (or, in the case of the death of the nonemployee director, to his or her beneficiary designated in accordance with the Plan or, if no such beneficiary is designated, to his or her estate), as compensation for prior service as a director, in respect of the nonemployee director’s Post-2004 Deferred Benefit Account.

a. Form of Payments: At the time that a nonemployee director first makes a post-2004 deferral election under this Plan or first makes a post-2004 deferral election under the Stock Plan, whichever occurs earlier, the nonemployee director shall make a payment election which shall govern distribution of both the nonemployee director’s Post-2004 Deferred Benefit Account under this Plan and the nonemployee director’s Post-2004 Deferral Share Account under the Stock Plan. In such payment election, the nonemployee director may elect to have payments made either in (i) a single payment, or (ii) annual installments. Under the installment payment option, the nonemployee director may select the number of years over which benefits are to be paid to the nonemployee director, up to a maximum of 5 years. The payment option elected shall apply to the nonemployee director’s entire Post-2004 Deferred Benefit Account under this Plan and the nonemployee’s director’s entire Post-2004 Deferral Share Account under the Stock Plan. The installment payment option does not apply upon the occurrence of a Change of Control Event. A nonemployee director who fails to make a payment election shall be deemed to have elected the single payment option. Prior to January 1, 2009, a nonemployee director may change his or her payment election by filing a revised payment election form, properly completed and signed, with the Treasurer of the Company; provided that a revised election submitted during calendar

 

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year 2006, 2007 or 2008 may not operate to defer into a subsequent calendar year the distribution of amounts that otherwise would have been paid in the calendar year in which the revised election is submitted, or to accelerate into the calendar year in which the revised election is submitted amounts that otherwise were scheduled for distribution in a subsequent calendar year. Changes in a payment election are not permitted on or after January 1, 2009.

b. If the nonemployee director has elected the single payment option, then the Company will make payment to the nonemployee director in respect of the nonemployee director’s Post-2004 Deferred Benefit Account within 30 days after the end of the calendar quarter in which occurs the nonemployee director’s Separation from Service. In addition, the Company will make payment to the nonemployee director in respect of the nonemployee director’s Post-2004 Deferred Benefit Account within 30 days following the occurrence of a Change of Control Event.

c. If the nonemployee director has elected the installment payment option, then the first installment will be made within 30 days after the end of the calendar quarter in which occurs the nonemployee director’s Separation from Service, and each subsequent installment shall be paid in July of each calendar year following the calendar year in which the first installment is paid to the nonemployee director during the installment period. The annual installment payment amount for any calendar year shall be determined by dividing the value of the nonemployee director’s Post-2004 Deferred Benefit Account as of January 1 of the year for which the payment is being made by the number of installment payments remaining to be made, and then rounding the quotient obtained for all but the final installment to the next lowest whole dollar; provided that the final installment shall be the entire undistributed balance in the nonemployee director’s Post-2004 Deferred Benefit Account.

The Post-2004 Deferred Benefit Account shall remain subject to participant investment direction (and adjustment for deemed investment gain or loss) during the installment payment period.

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