WW » Topics » Article 2 - Deferred Stock Units; Optional Deferral of Payment

This excerpt taken from the WW DEF 14A filed Oct 17, 2006.

Article 2 - Deferred Stock Units; Optional Deferral of Payment

       Section 2.1. Grants of Deferred Stock Units.

     The Committee shall select and/or approve the Selected Employees who shall be Participants in the Plan and shall authorize each Grant under the Plan by determining or approving the portion or amount of any bonus otherwise payable to any such Participant which shall equal the Unit Portion of the Bonus made to the Participant. Each Participant shall have an Account established in his or her name. In connection with any Grant, there shall be credited to the Participant’s Account as of the Grant Date, the number of Deferred Stock Units obtained by dividing the amount of the Unit Portion of the Bonus made to the Participant by the Current Market Value per share of Common Stock as of the Grant Date, and rounding the result upwards to the nearest whole Deferred Stock Unit. Upon a Grant being made in the name of a Participant, the Participant's rights with respect to the Unit Portion of the Bonus for the Participant shall consist solely of any benefits provided pursuant to the Plan.

     Section 2.2. Vesting of Deferred Stock Units.

     The Company may provide, in a notice given by the Company to the Participant at the time of the Grant, or in an agreement between the Company and the Participant, a vesting schedule for the Deferred Stock Units being credited to the Participant’s Account, such that some or all of the Deferred Stock Units credited to the Participant’s Account shall be forfeited if the Participant does not continue in employment with the Company until the vesting of such Units as specified in such notice or agreement.

     Section 2.3. Termination of Employment.

     Notwithstanding any provision herein to the contrary, in the event that a Participant’s employment is terminated before any (or all) of his or her Deferred Stock Units have become Vested, as provided in the notice or agreement described in Section 2.2, then all such Deferred Stock Units in the Participant’s Account which are not then Vested (including any Units attributable to such Units pursuant to Section 4.1, as determined by the Company) shall be forfeited, and no amount or Common Stock shall be payable with respect to such Units under any provision of this Plan, including any provision of this Article 2.

     Section 2.4. Payment of Shares on Account of Deferred Stock Units.

     Unless deferred at the option of the Participant in accordance with Section 2.5(a), or if otherwise modified pursuant to the provisions of this Plan, the Account Balance with respect to a particular Grant will become payable on the date that the Units become Vested in accordance with Section 2.2, and one share of Common Stock will be delivered in full satisfaction of each Deferred Stock Unit to be paid, after rounding any fractional Deferred Stock Unit upwards to the nearest whole share.

     Section 2.5. Optional Deferral of Payment of Shares.

     (a) Optional Deferral of Payment. As to each Grant, the Committee may allow a Participant the option to defer the payment of all or a portion of any Deferred Stock Units for later payment in accordance with Section 2.6 by submitting to the Committee or its designee such forms as the Committee shall prescribe by such date as the Committee may establish.

     (b) Irrevocability of Deferral Election. Except as provided in Section 2.5(c), an election to defer the payment of all or a portion of a Participant’s Account Balance made pursuant to Section 2.5(a) shall be irrevocable once submitted to the Committee or his or her designee.

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     (c) Rescission of Deferral Election Caused by an Adverse Tax Determination. A deferral election may be rescinded at any time if:

               (i) a final determination is made by a court or other governmental body of competent jurisdiction that the election was ineffective to defer income for purposes of U.S. Federal, state, local or foreign income taxation and the time for appeal from this determination has expired, and

               (ii) the Committee, in its sole discretion, decides, upon the Participant’s request and upon evidence of the occurrence of the events described in clause (i) hereof that it finds persuasive, to rescind the election.

     Upon such rescission, the relevant Account Balance will be paid to the Participant as soon as practicable as provided herein.

     Section 2.6 Payment of Shares Optionally Deferred.

     (a) Deferral Election. If a Participant elects, then his or her Account Balance will be paid by the Company, at the time elected by the Participant in accordance with this Section 2.6. The Account Balance shall be paid in a lump sum at the time specified in this Section 2.6 or, if authorized by the Committee and elected by the Participant on the deferral election form, in annual payments over a period of years. If the Account Balance is to be paid in annual payments, then each payment will be calculated as a number of Deferred Stock Units equal to (i) the number determined by dividing the number of Units allocated to the Participant's Account as of the date of the first payment by the total number of annual payments, plus (ii) the number of any additional Units allocated pursuant to Section 4.1 after the date of the first payment to the Units then payable. The election shall specify the timing of the lump sum payment or (in the case of annual payments) of the first payment, as one of the following: (i) the first day of the month following the month that the Participant’s employment with the Company is terminated or that the Participant dies; (ii) the first day of the month which is any number of whole years selected by the Participant after the date on which the Participant’s Deferred Stock Units become Vested (i.e., without taking into account the possibility of a Participant’s termination of employment, death or Disability); or (iii) in any month in the calendar year following the date on which the Participant's employment with the Company is terminated.

     (b) Form of Payment. One share of Common Stock will be delivered in full satisfaction of each Deferred Stock Unit to be paid, after rounding any fractional Deferred Stock Unit upwards to the nearest whole share.

     (c) Death Prior to Payment. If the Participant dies prior to payment of any or all amounts optionally deferred pursuant to this Section 2.6, then the Account Balance will be paid to the Participant’s beneficiary in accordance with the Participant’s election.

     Section 2.7. Debiting of Deferred Stock Account.

     If and when shares of Common Stock are distributed to a Participant, the Participant’s Account shall be debited with the number of Units equivalent to the number of shares of Common Stock that have been distributed.

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