Exhibit 10.1

LEAR CORPORATION

2009 LONG-TERM STOCK INCENTIVE PLAN

(Amended and Restated as of September 11, 2013)

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LEAR CORPORATION

2009 LONG-TERM STOCK INCENTIVE PLAN

TABLE OF CONTENTS

 

         Page  

Article 1.

 

Establishment, Objectives and Duration

     1   

Article 2.

 

Definitions

     1   

Article 3.

 

Administration

     7   

Article 4.

 

Shares Subject to the Plan and Maximum Awards

     7   

Article 5.

 

Eligibility and Participation

     8   

Article 6.

 

Stock Options

     9   

Article 7.

 

Stock Appreciation Rights

     10   

Article 8.

 

Restricted Stock, Restricted Stock Units and Restricted Units

     11   

Article 9.

 

Performance Units, Performance Shares and Other Awards

     13   

Article 10.

 

Performance Measures

     14   

Article 11.

 

Beneficiary Designation

     15   

Article 12.

 

Deferrals

     16   

Article 13.

 

Rights of Employees

     16   

Article 14.

 

Change in Control

     16   

Article 15.

 

Amendment, Modification and Termination

     20   

Article 16.

 

Withholding

     21   

Article 17.

 

Indemnification

     21   

Article 18.

 

Successors

     22   

Article 19.

 

Legal Construction

     22   

 

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LEAR CORPORATION

2009 LONG-TERM STOCK INCENTIVE PLAN

Article 1. Establishment, Objectives and Duration

1.1 Establishment of the Plan. Lear Corporation, a Delaware corporation, hereby
establishes its long-term stock incentive compensation plan, to be known as the
“2009 Lear Corporation Long-Term Stock Incentive Plan” as set forth in this
document. Capitalized terms used but not otherwise defined herein will have the
meanings given to them in Article 2. The Plan permits the grant of Nonqualified
Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted
Stock, Restricted Units, Restricted Stock Units, Performance Shares, Performance
Units and other cash and equity incentive awards.

The Plan is effective as of November 9, 2009, and will remain in effect as
provided in Section 1.3 hereof. The Plan was most recently amended and restated
as of September 11, 2013.

1.2 Objectives of the Plan. The objectives of the Plan are to optimize the
profitability and growth of the Company through long-term incentives that are
consistent with the Company’s objectives and that link the interests of
Participants to those of the Company’s shareholders; to provide Participants
with an incentive for excellence in individual performance; to promote teamwork
among Participants; and to give the Company a significant advantage in
attracting and retaining officers, key employees and directors.

The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract and retain the services of Participants who make
significant contributions to the Company’s success, and to allow Participants to
share in the success of the Company.

1.3 Duration of the Plan. The Plan will commence on the Effective Date, as
defined in Article 2, and will remain in effect, subject to the right of the
Committee to amend or terminate the Plan at any time pursuant to Article 15,
until all Shares subject to it pursuant to Article 4 have been issued or
transferred according to the Plan’s provisions. In no event may an Award be
granted under the Plan on or after the ten year anniversary of the Effective
Date.

Article 2. Definitions

Whenever used in the Plan, the following terms have the meanings set forth
below, and when the meaning is intended, the initial letter of the word is
capitalized:

“Affiliates” means any corporation (or partnership, limited liability company,
joint venture, or other enterprise) of which the Company owns or controls,
directly or indirectly, at least fifty percent of the outstanding shares of
stock normally entitled to vote for the election of directors (or comparable
equity participation and voting power). Notwithstanding the foregoing, for
purposes of determining whether an employee has terminated employment with the
Company and all Affiliates, “Affiliates” means any corporation (or partnership,
limited liability company, joint venture, or other enterprise) of which the
Company owns or controls, directly or indirectly,

 

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at least ten percent of the outstanding shares of stock normally entitled to
vote for the election of directors (or comparable equity participation and
voting power). The minimum percentage of ownership or control in the previous
sentence shall be raised from ten percent to twenty percent for purposes of
determining timing of payment of an Award, or amount payable with respect to an
Award, that is “deferred compensation” for purposes of Code Section 409A, if
payment of such Award or amount would be accelerated or otherwise triggered by
the employee’s termination of employment.

“Award” means, individually or collectively, a grant under this Plan to a
Participant of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Units, Restricted Stock Units,
Performance Shares, Performance Units or other types of equity-based or
cash-based incentives hereafter approved by the Committee.

“Award Agreement” means an agreement entered into by the Company and a
Participant setting forth the terms and provisions applicable to an Award or
Awards granted to the Participant.

“Beneficial Owner” or “Beneficial Ownership” has the meaning ascribed to that
term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

“Board” or “Board of Directors” means the Board of Directors of the Company.

“Cause” has the meaning set forth in any unexpired employment or severance
agreement between the Participant and the Company or an Affiliate. If there is
no such agreement, “Cause” means:

 

  (a) the willful and continued failure of the Participant substantially to
perform his or her duties with or for the Company or an Affiliate;

 

  (b) the Participant’s engaging in conduct that is significantly injurious to
the Company or an Affiliate, monetarily or otherwise;

 

  (c) the Participant’s commission of a crime that is significantly injurious to
the Company or an Affiliate, monetarily, reputationally or otherwise;

 

  (d) the Participant’s abuse of illegal drugs or other controlled substances;
or

 

  (e) the Participant’s habitual intoxication.

Unless otherwise defined in the Participant’s employment or severance agreement,
an act or omission is “willful” for the purpose of determining whether a
termination of employment was made for “cause” if it was knowingly done, or
knowingly omitted to be done, by the Participant not in good faith and without
reasonable belief that the act or omission was in the best interest of the
Company or an Affiliate. For purposes of this Plan, if a Participant is
convicted of a crime or pleads nolo contendere to a criminal charge, he or she
will conclusively be deemed to have committed the crime. The Committee has the
discretion, in other circumstances, to determine in good faith, from all the
facts and circumstances reasonably available to it, whether a Participant who is
under investigation for, or has been charged with, a crime will be deemed to
have committed it for purposes of this Plan.

 

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“Change in Control” of the Company will be deemed to have occurred (as of a
particular day, as specified by the Board) as of the first day any one or more
of the following paragraphs is satisfied.

 

  (a) Any Person (other than the Company or a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or a corporation owned
directly or indirectly by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company) becomes the
Beneficial Owner, directly or indirectly, of securities of the Company,
representing more than twenty percent of the combined voting power of the
Company’s then outstanding securities.

 

  (b) During any period of twenty-six consecutive months beginning on or after
the Effective Date, individuals who at the beginning of the period constituted
the Board cease for any reason (other than death, Disability or voluntary
Retirement) to constitute a majority of the Board. For this purpose, any new
Director whose election by the Board, or nomination for election by the
Company’s shareholders, was approved by a vote of at least two-thirds of the
Directors then still in office, and who either were Directors at the beginning
of the period or whose election or nomination for election was so approved, will
be deemed to have been a Director at the beginning of any twenty-six month
period under consideration.

 

  (c) Consummation of: (i) an agreement for the sale or disposition of all or
substantially all the Company’s assets; or (ii) a merger, consolidation or
reorganization of the Company with or involving any other corporation, other
than a merger, consolidation or reorganization that results in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least fifty percent of the combined
voting power of the voting securities of the Company (or such surviving entity)
outstanding immediately after such merger, consolidation, or reorganization.

 

  (d) The shareholders of the Company approve a plan of complete liquidation or
dissolution of the Company.

Notwithstanding the foregoing, if an Award, or amount payable with respect to an
Award, is “deferred compensation” for purposes of Code Section 409A, and if a
payment of such Award or amount would be accelerated or otherwise triggered upon
a “Change in Control,” then the foregoing definition is modified, to the extent
necessary to avoid the imposition of an excise tax under Code Section 409A, to
mean a “change in control event” as such term is defined for purposes of Code
Section 409A. For purposes of clarity, if an Award would, for example, vest and
be paid on a “Change in Control” as defined herein but payment of such Award
would violate the provisions of Code Section 409A, then the Award shall vest but
will be paid only in compliance with its terms and Code Section 409A (i.e., upon
a permissible payment event).

 

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“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Committee” means, as specified in Article 3, the Compensation Committee of the
Board or such other committee as may be appointed by the Board to administer the
Plan.

“Company” means Lear Corporation, a Delaware corporation, and any successor
thereto as provided in Article 18.

“Director” means any individual who is a member of the Board of Directors.

“Disability” means (a) long-term disability as defined under the long-term
disability plan of the Company or an Affiliate that covers that individual, or
(b) if the individual is not covered by such a long-term disability plan,
disability as defined for purposes of eligibility for a disability award under
the Social Security Act. Notwithstanding the foregoing, for purposes of
determining the period of time after termination of employment during which a
Participant may exercise an ISO, “Disability” will have the meaning set forth in
Section 22(e)(3) of the Code, which is, generally, that the Participant is
unable to engage in any substantial gainful activity by reason of a medically
determinable physical or mental impairment that can be expected to result in
death or that has lasted or can be expected to last for a continuous period of
at least twelve months.

Notwithstanding the foregoing, if an Award, or amount payable with respect to an
Award, is “deferred compensation” for purposes of Code Section 409A, and if a
payment of such Award or amount would be accelerated or otherwise triggered upon
a “Disability,” then the foregoing definition is modified, to the extent
necessary to avoid the imposition of an excise tax under Code Section 409A, to
refer to a Participant who is “disabled,” as such term is defined for purposes
of Code Section 409A. For purposes of clarity, if an Award would, for example,
vest and be paid on a “Disability” as defined herein but payment of such Award
would violate the provisions of Code Section 409A, then the Award shall vest but
will be paid only in compliance with its terms and Code Section 409A (i.e., upon
a permissible payment event).

“Effective Date” means November 9, 2009.

“Eligible Employee” or “Employee” means any employee of the Company or any of
its Affiliates. Directors who are not employed by the Company or its Affiliates
will also be considered Eligible Employees and Employees under this Plan.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, or any successor act thereto.

“Exercise Price” means the price at which a Share may be purchased by a
Participant pursuant to an Option.

“Fair Market Value” means:

 

  (a) the closing trading price of the Shares on the New York Stock Exchange or,
if the Shares are not traded on the New York Stock Exchange, on the NASDAQ Stock
Market or any other exchange on which they are traded; or

 

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  (b) if the Shares are not traded on any exchange, the mean between the closing
bid and asked prices of the Shares in the over-the-counter market; or

 

  (c) if those bid and asked prices are not available, then the fair market
value as reported by any nationally recognized quotation service selected by the
Committee or as determined in good faith by the Committee.

Notwithstanding the foregoing, for purposes of Awards intended to be exempt from
Code Section 409A, the Fair Market Value shall be no less than the “fair market
value,” as such term is defined for purposes of Code Section 409A.

“Freestanding SAR” means an SAR that is granted independently of any Options, as
described in Article 7.

“Grandfathered Award” means an Award granted prior to September 11, 2013, other
than an Award which by its terms expressly provides that the Award is not to be
treated as a Grandfathered Award.

“Incentive Stock Option” or “ISO” means an option to purchase Shares granted
under Article 6 that is designated as an Incentive Stock Option and that is
intended to meet the requirements of Code Section 422.

“Nonqualified Stock Option” or “NQSO” means an option to purchase Shares granted
under Article 6 that is not intended to meet the requirements of Code Section
422.

“Option” means an Incentive Stock Option or a Nonqualified Stock Option, as
described in Article 6.

“Participant” means an Eligible Employee who has been selected by the Committee
to participate in the Plan pursuant to Section 5.2 and who has outstanding an
Award granted under the Plan. The term “Participant” will also include Directors
who are not employees of the Company or an Affiliate for purposes of Awards
under the Plan.

“Performance-Based Exception” means the performance-based exception from the tax
deductibility limitations of Code Section 162(m) and any regulations promulgated
thereunder.

“Performance Period” means the time period during which performance objectives
must be met in order for a Participant to earn Performance Units or Performance
Shares granted under Article 9.

“Performance Share” means an award with an initial value equal to the Fair
Market Value on the date of grant which is based on the Participant’s attainment
of performance objectives, as described in Article 9.

“Performance Unit” means an award with an initial value established by the
Committee at the time of grant which is based on the Participant’s attainment of
performance objectives, as described in Article 9.

 

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“Person” has the meaning ascribed to that term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group”
as defined in Section 13(d) thereof.

“Plan” means the Lear Corporation 2009 Long-Term Stock Incentive Plan, as set
forth in this document.

“Replacement Award” means an Award resulting from the exchange or substitution
specified in Section 14.2 upon a Change in Control and meeting the applicable
conditions specified in Section 14.2, provided that such Award is issued by a
company (foreign or domestic) the majority of the equity of which is listed
under and in compliance with the domestic company listing rules of the New York
Stock Exchange or with a similarly liquid exchange which has comparable
standards to the domestic listing standards of the New York Stock Exchange.

“Restriction Period” means the period during which the transfer of Shares of
Restricted Stock is limited in some way (based on the passage of time, the
achievement of performance objectives, or the occurrence of other events as
determined by the Committee, at its discretion) or the Restricted Stock is not
vested.

“Restricted Stock” means a contingent grant of stock awarded to a Participant
pursuant to Article 8.

“Restricted Stock Unit” means a Restricted Unit granted to a Participant, as
described in Article 8, that is payable in Shares.

“Restricted Unit” means a notional account established pursuant to an Award
granted to a Participant, as described in Article 8, that is (a) credited with
amounts equal to Shares or some other unit of measurement specified in the Award
Agreement, (b) subject to restrictions and (c) payable in cash or Shares.

“Retirement” means termination of employment on or after (a) reaching the age
established by the Company as the normal retirement age in any unexpired
employment or severance agreement between the Participant and the Company or an
Affiliate, or, in the absence of such an agreement, the normal retirement age
under the tax-qualified defined benefit retirement plan or, if none, the
tax-qualified defined contribution retirement plan, sponsored by the Company or
an Affiliate in which the Participant participates, or (b) reaching age
fifty-five with ten years of service with the Company or an Affiliate.

“Shares” means the shares of common stock, $0.01 par value, of the Company,
including their associated preferred share purchase rights, if applicable.

“Stock Appreciation Right” or “SAR” means an Award, granted alone or in
connection with a related Option, designated as an SAR pursuant to the terms of
Article 7.

“Tandem SAR” means an SAR that is granted in connection with a related Option
pursuant to Article 7, the exercise of which requires forfeiture of the right to
purchase a Share under the related Option (and when a Share is purchased under
the Option, the Tandem SAR will similarly be canceled).

 

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Article 3. Administration

3.1 The Committee. The Plan will be administered by the Compensation Committee
of the Board, or by any other Committee appointed by the Board, which Committee
(unless otherwise determined by the Board) will satisfy the “nonemployee
director” requirements of Rule 16b-3 under the Exchange Act and the regulations
of Rule 16b-3 under the Exchange Act and the “outside director” provisions of
Code Section 162(m), or any successor regulations or provisions, so long as the
Company is subject to the registration requirements of the Exchange Act. The
members of the Committee will be appointed from time to time by, and serve at
the discretion of, the Board of Directors. The Committee will act by a majority
of its members at the time in office and eligible to vote on any particular
matter, and Committee action may be taken either by a vote at a meeting or in
writing without a meeting.

3.2 Authority of the Committee. Except as limited by law and subject to the
provisions of this Plan, the Committee will have full power to: select Eligible
Employees to participate in the Plan; determine the sizes and types of Awards;
determine the terms and conditions of Awards in a manner consistent with the
Plan; construe and interpret the Plan and any agreement or instrument entered
into under the Plan; establish, amend or waive rules and regulations for the
Plan’s administration; and (subject to the provisions of Article 15) amend the
terms and conditions of any outstanding Award to the extent they are within the
discretion of the Committee as provided in the Plan. Further, the Committee will
make all other determinations that may be necessary or advisable to administer
the Plan. As permitted by law and consistent with Section 3.1, the Committee may
delegate some or all of its authority under the Plan.

3.3 Decisions Binding. All determinations and decisions made by the Committee
pursuant to the provisions of the Plan will be final, conclusive and binding on
all persons, including, without limitation, the Company, its Board of Directors,
its shareholders, all Affiliates, employees, Participants and their estates and
beneficiaries.

Article 4. Shares Subject to the Plan and Maximum Awards

4.1 Number of Shares Available for Grants. Subject to adjustment as provided in
Sections 4.2 and 4.3, the number of Shares that may be issued or transferred to
Participants under the Plan is 11,815,748 [POST-SPLIT]. Subject to adjustment as
provided in Section 4.3, the maximum number of Shares and Share equivalent units
that may be granted during any calendar year to any one Participant under
Options, Freestanding SARs, Restricted Stock, Restricted Units, Restricted Stock
Units, Performance Shares or any other Award is 1,000,000 [POST-SPLIT], which
limit will apply regardless of whether the compensation is paid in Shares or in
cash. The maximum number of Shares that may be issued by Options intended to be
ISOs is 5,000,000 [POST-SPLIT]. The maximum aggregate dollar amount that may be
paid to any one Participant during any calendar year under Performance Units or
any cash incentive Award granted under Section 9.9 is $7,500,000.

 

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The Shares with respect to which Awards may be made will include authorized but
unissued Shares, and Shares that are currently held or subsequently acquired by
the Company as treasury Shares, including Shares purchased in the open market or
in private transactions.

4.2 Lapsed Awards. If any Award granted under this Plan is canceled, terminates,
expires or lapses for any reason, any Shares subject to the Award will again be
available for the grant of an Award under the Plan. In addition, if a Share
subject to an Award is not delivered because the award is settled in cash or
because the Share is used to satisfy a tax withholding obligation or used to pay
the Exercise Price of an Option, then that Share will thereafter be deemed to be
available for grant. The number of Shares subject to a SAR in excess of the
number of Shares that are delivered to the Participant upon exercise of the SAR
will not be treated as having been issued under the Plan and will be available
for grant under the Plan.

4.3 Adjustments in Authorized Shares.

 

  (a) If the Shares, as currently constituted, are changed into or exchanged for
a different number or kind of shares of stock or other securities of the Company
or of another corporation (whether because of merger, consolidation,
recapitalization, reclassification, split, reverse split, combination of shares,
or other similar change in the corporate structure of the Company affecting the
Shares) or if the number of Shares is increased through the payment of a stock
dividend, then the Committee will substitute for or add to each Share previously
appropriated, later subject to, or which may become subject to, an Award, the
number and kind of shares of stock or other securities into which each
outstanding Share was changed for which each such Share was exchanged, or to
which each such Share is entitled, as the case may be. Outstanding Awards will
also be appropriately adjusted as to price and other terms, to the extent
necessary to reflect the events described above.

 

  (b) Fractional Shares resulting from any adjustment in Awards pursuant to this
section may be settled in cash or otherwise as the Committee determines. The
Company will give notice of any adjustment to each Participant who holds an
Award that has been adjusted and the adjustment (whether or not that notice is
given) will be effective and binding for all Plan purposes.

Article 5. Eligibility and Participation

5.1 Eligibility. All Eligible Employees, including Eligible Employees who are
members of the Board, are eligible to participate in this Plan.

5.2 Actual Participation. Subject to the provisions of the Plan, the Committee
will, from time to time, select those Eligible Employees to whom Awards will be
granted, and will determine the nature and amount of each Award.

 

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Article 6. Stock Options

6.1 Grant of Options. Subject to the terms and provisions of the Plan, Options
may be granted to Eligible Employees in the number, and upon the terms, and at
any time and from time to time, as determined by the Committee.

6.2 Award Agreement. Each Option grant will be evidenced by an Award Agreement
that specifies the Exercise Price, the duration of the Option, the number of
Shares to which the Option pertains, the manner, time and rate of exercise or
vesting of the Option, and such other provisions as the Committee determines.
The Award Agreement will also specify whether the Option is intended to be an
ISO or an NQSO.

6.3 Exercise Price. The Exercise Price for each share subject to an Option will
be at least one hundred percent of the Fair Market Value on the date the Option
is granted.

6.4 Duration of Options. Each Option will expire at the time determined by the
Committee at the time of grant, but no later than the tenth anniversary of the
date of its grant.

6.5 No Dividend Equivalents. Subject to Section 4.3, the Committee may not grant
payments in connection with Options that are equivalent to dividends declared
and paid on the Shares underlying the Options.

6.6 Exercise of Options. Options will be exercisable at such times and be
subject to such restrictions and conditions as the Committee in each instance
approves, which need not be the same for each Award or for each Participant.

6.7 Payment. The holder of an Option may exercise the Option only by delivering
a written notice of exercise to the Company setting forth the number of Shares
as to which the Option is to be exercised, together with full payment at the
Exercise Price for the Shares and any withholding tax relating to the exercise
of the Option.

The Exercise Price and any related withholding taxes will be payable to the
Company in full either: (a) in cash, or its equivalent, in United States
dollars; (b) by tendering Shares owned by the Participant and duly endorsed for
transfer to the Company, Shares issuable to the Participant upon exercise of the
Option, or any combination of cash, certified or cashier’s check and Shares
described in this clause (b); or (c) by any other means the Committee determines
to be consistent with the Plan’s purposes and applicable law. Cashless exercise
must meet the requirements of the Federal Reserve Board’s Regulation T and any
applicable securities law restrictions. For this purpose, “cashless” exercise
will mean that the Participant notifies the Company it will exercise, and the
Company is instructed to deliver the Share issuable on exercise to a broker, who
sells the Shares and holds back the exercise price (and, often, the federal and
state withholdings). No more than the minimum required withholding may be
satisfied by the tender of Shares.

6.8 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired through exercise of an Option as it deems
necessary or advisable, including, without limitation, restrictions under
applicable federal securities laws, under the requirements of any stock exchange
or market upon which the Shares are then listed or traded, and under any blue
sky or state securities laws applicable to the Shares.

 

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6.9 Termination of Employment. Each Option Award Agreement will set forth the
extent to which the Participant has the right to exercise the Option after his
or her termination of employment with the Company and all Affiliates. These
terms will be determined by the Committee in its sole discretion, need not be
uniform among all Options, and may reflect, among other things, distinctions
based on the reasons for termination of employment.

6.10 Nontransferability of Options. Except as otherwise provided in a
Participant’s Award Agreement, no Option granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution, or pursuant to a
domestic relations order (as defined in Code Section 414(p)). Further, except as
otherwise provided in a Participant’s Award Agreement, all Options will be
exercisable during the Participant’s lifetime only by the Participant or his or
her guardian or legal representative. The Committee may, in its discretion,
require a Participant’s guardian or legal representative to supply it with the
evidence the Committee deems necessary to establish the authority of the
guardian or legal representative to act on behalf of the Participant.

Article 7. Stock Appreciation Rights

7.1 Grant of SARs. Subject to the terms and conditions of the Plan, SARs may be
granted to Participants at any time and from time to time, as determined by the
Committee. The Committee may grant Freestanding SARs, Tandem SARs or any
combination of the two.

Within the limits of Article 4, the Committee will have sole discretion to
determine the number of SARs granted to each Participant and, consistent with
the provisions of the Plan, to determine the terms and conditions pertaining to
SARs.

The grant price of a SAR will equal the Fair Market Value on the date of grant
of the SAR.

7.2 Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the
Shares subject to the related Option, upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.

7.3 Exercise of Freestanding SARs. Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, imposes.

7.4 Award Agreement. Each SAR grant will be evidenced by an Award Agreement that
specifies the grant price, the term of the SAR and such other provisions as the
Committee determines.

7.5 Term of SARs. The term of an SAR will be determined by the Committee, in its
sole discretion, but may not exceed ten years.

 

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7.6 Payment of SAR Amount. Upon exercise of an SAR, a Participant will be
entitled to receive payment from the Company in an amount determined by
multiplying:

 

  (a) the excess (or some portion of the excess as determined at the time of the
grant by the Committee) if any, of the Fair Market Value on the date of exercise
of the SAR over the grant price specified in the Award Agreement; by

 

  (b) the number of Shares as to which the SAR is exercised.

The payment upon SAR exercise may be made in cash, in Shares of equivalent Fair
Market Value or in some combination of the two, as specified in the Award
Agreement.

7.7 Termination of Employment. Each SAR Award Agreement will set forth the
extent to which the Participant has the right to exercise the SAR after his or
her termination of employment with the Company and all Affiliates. These terms
will be determined by the Committee in its sole discretion, need not be uniform
among all SARs issued under the Plan, and may reflect, among other things,
distinctions based on the reasons for termination of employment.

7.8 Nontransferability of SARs. Except as otherwise provided in a Participant’s
Award Agreement, no SAR may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution, or pursuant to a domestic relations order (as defined
in Code Section 414(p)). Further, except as otherwise provided in a
Participant’s Award Agreement, all SARs will be exercisable during the
Participant’s lifetime only by the Participant or the Participant’s guardian or
legal representative. The Committee may, in its discretion, require a
Participant’s guardian or legal representative to supply it with evidence the
Committee deems necessary to establish the authority of the guardian or legal
representative to act on behalf of the Participant.

7.9 No Dividend Equivalents. Subject to Section 4.3, the Committee may not grant
payments in connection with SARs that are equivalent to dividends declared and
paid on the Shares underlying the SARs.

Article 8. Restricted Stock, Restricted Stock Units and Restricted Units

8.1 Grant of Restricted Stock, Restricted Stock Units or Restricted Units.
Subject to the terms and provisions of the Plan, the Committee may, at any time
and from time to time, grant Restricted Stock, Restricted Stock Units or
Restricted Units to Participants in such amounts as it determines.

8.2 Award Agreement. Each grant of Restricted Stock, Restricted Units or
Restricted Stock Units will be evidenced by an Award Agreement that specifies
the Restriction Periods, the number of Shares or Share equivalent units granted,
and such other provisions as the Committee determines.

8.3 Nontransferability. Restricted Stock, Restricted Units and Restricted Stock
Units granted herein may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution, or pursuant to a

 

11

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domestic relations order (as defined in Code Section 414(p)), until the end of
the applicable Restriction Period as specified in the Award Agreement, or upon
earlier satisfaction of any other conditions specified by the Committee in its
sole discretion and set forth in the Award Agreement. All rights with respect to
Restricted Stock, Restricted Units and Restricted Stock Units will be available
during the Participant’s lifetime only to the Participant or the Participant’s
guardian or legal representative. The Committee may, in its discretion, require
a Participant’s guardian or legal representative to supply it with evidence the
Committee deems necessary to establish the authority of the guardian or legal
representative to act on behalf of the Participant.

8.4 Other Restrictions. Subject to Article 11, the Committee may impose such
other conditions or restrictions on any Restricted Stock, Restricted Units or
Restricted Stock Units as it deems advisable including, without limitation,
restrictions based upon the achievement of specific performance objectives
(Company-wide, business unit, individual, or any combination of them),
time-based restrictions on vesting following the attainment of the performance
objectives, and restrictions under applicable federal or state securities laws.
The Committee may provide that restrictions established under this Section 8.4
as to any given Award will lapse all at once or in installments.

The Company will retain the certificates representing Shares of Restricted Stock
in its possession until all conditions and restrictions applicable to the Shares
have been satisfied.

8.5 Payment of Awards. Except as otherwise provided in this Article 8, Shares
covered by each Restricted Stock grant will become freely transferable by the
Participant after the last day of the applicable Restriction Period, and Share
equivalent units covered by a Restricted Unit or Restricted Stock Unit will be
paid out in cash or Shares to the Participant following the last day of the
applicable Restriction Period, or on a later date provided in the Award
Agreement.

8.6 Voting Rights. During the Restriction Period, Participants holding Shares of
Restricted Stock may exercise full voting rights with respect to those Shares.

8.7 Dividends and Other Distributions. During the Restriction Period,
Participants awarded Shares of Restricted Stock, Restricted Units or Restricted
Stock Units hereunder will be credited with regular cash dividends or dividend
equivalents paid on those Shares or with respect to those Share equivalent
units. Dividends may be paid currently, accrued as contingent cash obligations,
or converted into additional Shares of Restricted Stock, upon such terms as the
Committee establishes.

The Committee may apply any restrictions it deems advisable to the crediting and
payment of dividends and other distributions. Without limiting the generality of
the preceding sentence, if the grant or vesting of Restricted Stock is designed
to qualify for the Performance-Based Exception, the Committee may apply any
restrictions it deems appropriate to the payment of dividends declared with
respect to the Restricted Stock, so that the dividends and the Restricted Stock
continue to be eligible for the Performance-Based Exception.

 

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8.8 Termination of Employment. Each Award Agreement will set forth the extent to
which the Participant has the right to retain unvested Restricted Stock,
Restricted Stock Units or Restricted Units after his or her termination of
employment with the Company or an Affiliate. These terms will be determined by
the Committee in its sole discretion, need not be uniform among all Awards of
Restricted Stock, and may reflect, among other things, distinctions based on the
reasons for termination of employment.

Article 9. Performance Units, Performance Shares and Other Awards

9.1 Grant of Performance Units or Performance Shares. Subject to the terms of
the Plan, Performance Units or Performance Shares may be granted to Participants
in such amounts and upon such terms, and at any time and from time to time, as
the Committee determines.

9.2 Value of Performance Units and Performance Shares. Each Performance Unit
will have an initial value established by the Committee at the time of grant.
Each Performance Share will have an initial value equal to the Fair Market Value
on the date of grant. The Committee will set performance objectives in its
discretion which, depending on the extent to which they are met, will determine
the number or value (or both) of Performance Units or Performance Shares that
will be paid out to the Participant. For purposes of this Article 9, the time
period during which the performance objectives must be met will be called a
“Performance Period” and will be set by the Committee in its discretion.

9.3 Earning of Performance Units and Performance Shares. Subject to the terms of
this Plan, after the applicable Performance Period has ended, the holder of
Performance Units or Performance Shares will be entitled to receive payout on
the number and value of Performance Units or Performance Shares earned by the
Participant over the Performance Period, to be determined as a function of the
extent to which the corresponding performance objectives have been achieved.

9.4 Award Agreement. Each grant of Performance Units or Performance Shares will
be evidenced by an Award Agreement specifying the material terms and conditions
of the Award (including the form of payment of earned Performance Units or
Performance Shares), and such other provisions as the Committee determines.

9.5 Form and Timing of Payment of Performance Units and Performance Shares.
Except as provided in Article 12, payment of earned Performance Units and
Performance Shares will be made as soon as practicable after the close of the
applicable Performance Period, in a manner determined by the Committee in its
sole discretion. The Committee will pay earned Performance Units and Performance
Shares in the form of cash, in Shares, or in a combination of cash and Shares,
as specified in the Award Agreement. Performance Shares may be paid subject to
any restrictions deemed appropriate by the Committee.

9.6 Termination of Employment Due to Death or Disability. Unless determined
otherwise by the Committee and set forth in the Participant’s Award Agreement,
if a Participant’s employment is terminated by reason of death or Disability
during a Performance Period, the Participant will receive a prorated payout of
the Performance Units or Performance Shares, as specified by the Committee in
its discretion in the Award Agreement. Payment of earned Performance Units and
Performance Shares will be made at a time specified by the Committee in its sole
discretion and set forth in the Participant’s Award Agreement.

 

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9.7 Termination of Employment for Other Reasons. If a Participant’s employment
terminates during a Performance Period for any reason other than death or
Disability, the Participant will forfeit all Performance Units and Performance
Shares to the Company, unless the Participant’s Award Agreement provides
otherwise.

9.8 Nontransferability. Except as otherwise provided in a Participant’s Award
Agreement, Performance Units and Performance Shares may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution, or pursuant to a
domestic relations order (as defined in Code Section 414(p)). Further, except as
otherwise provided in a Participant’s Award Agreement, a Participant’s rights
under the Plan will be exercisable during the Participant’s lifetime only by the
Participant or Participant’s guardian or legal representative. The Committee
may, in its discretion, require a Participant’s guardian or legal representative
to supply it with evidence the Committee deems necessary to establish the
authority of the guardian or legal representative to act on behalf of the
Participant.

9.9 Other Awards. In addition to the Awards described in Articles 6 through 8
and Sections 9.1 through 9.8 above, and subject to the terms of the Plan, the
Committee may grant other incentives payable in cash or Shares under the Plan as
it determines to be in the best interests of the Company and subject to such
other terms and conditions as it deems appropriate.

Article 10. Performance Measures

Unless and until the Committee proposes and the Company’s shareholders approve a
change in the general performance measures set forth in this Article 10, the
performance measure(s) to be used for purposes of Awards designed to qualify for
the Performance-Based Exception will be chosen from among the following
alternatives:

 

  (a) net earnings;

 

  (b) operating earnings or income;

 

  (c) earnings growth;

 

  (d) net sales growth;

 

  (e) net income (absolute or competitive growth rates comparative);

 

  (f) net income applicable to common stock;

 

  (g) cash flow, including operating cash flow, free cash flow, discounted cash
flow return on investment, and cash flow in excess of cost of capital;

 

  (h) earnings per share of common stock;

 

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  (i) return on shareholders equity (absolute or peer-group comparative);

 

  (j) stock price (absolute or peer-group comparative);

 

  (k) absolute and/or relative return on common shareholders equity;

 

  (l) absolute and/or relative return on capital;

 

  (m) absolute and/or relative return on assets;

 

  (n) economic value added (income in excess of cost of capital);

 

  (o) customer satisfaction;

 

  (p) quality metrics;

 

  (q) expense reduction; and

 

  (r) ratio of operating expenses to operating revenues.

The Committee may specify any reasonable definition of the performance measures
it uses. Such definitions may provide for reasonable adjustments and may include
or exclude items, including but not limited to: investment gains and losses;
extraordinary, unusual or non-recurring items; gains or losses on the sale of
assets; effects of changes in accounting principles or the application thereof;
asset impairment charges; effects of currency fluctuations; acquisitions,
divestitures, or financing activities; recapitalizations, including stock splits
and dividends; expenses for restructuring or productivity initiatives;
discontinued operations; and other non-operating items.

The Committee will have the discretion to adjust targets set for preestablished
performance objectives; however, Awards designed to qualify for the
Performance-Based Exception may not be adjusted upward, except to the extent
permitted under Code Section 162(m), to reflect accounting changes or other
events.

If Code Section 162(m) or other applicable tax or securities laws change to
allow the Committee discretion to change the types of performance measures
without obtaining shareholder approval, the Committee will have sole discretion
to make such changes without obtaining shareholder approval. In addition, if the
Committee determines it is advisable to grant Awards that will not qualify for
the Performance-Based Exception, the Committee may grant Awards that do not so
qualify.

Article 11. Beneficiary Designation

Each Participant may, from time to time, name any beneficiary or beneficiaries
(who may be named contingently or successively) to whom any benefit under the
Plan is to be paid in case the Participant should die before receiving any or
all of his or her Plan benefits. Each beneficiary designation will revoke all
prior designations by the same Participant, must be in a form prescribed by the
Committee, and must be made during the Participant’s lifetime. If the

 

15

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Participant’s designated beneficiary predeceases the Participant or no
beneficiary has been designated, benefits remaining unpaid at the Participant’s
death will be paid to the Participant’s estate or other entity described in the
Participant’s Award Agreement.

Article 12. Deferrals

The Committee may, consistent with the requirements of Code Section 409A, permit
a Participant to defer receipt of cash or Shares that would otherwise be due to
him or her by virtue of an Option or SAR exercise, the lapse or waiver of
restrictions on Restricted Stock, Restricted Stock Units, Restricted Units or
other Awards, or the satisfaction of any requirements or objectives with respect
to Performance Units, Performance Shares or other Awards. If any such deferral
election is permitted, the Committee will, in its sole discretion, establish
rules and procedures for such deferrals consistent with the requirements of Code
Section 409A.

Article 13. Rights of Employees

13.1 Employment. Nothing in the Plan will interfere with or limit in any way the
right of the Company or any affiliate of the Company (as defined in federal
securities laws) to terminate any Participant’s employment at any time, or
confer upon any Participant any right to continue in the employ of the Company
or any Affiliate.

13.2 Participation. No Eligible Employee will have the right to receive an Award
under this Plan, or, having received any Award, to receive a future Award.

Article 14. Change in Control

14.1 Grandfathered Awards. With respect to Grandfathered Awards, upon the
occurrence of a Change in Control, unless otherwise specifically prohibited
under applicable laws, or by the rules and regulations of any governing
governmental agencies or national securities exchanges:

 

  (a) any and all outstanding Options and SARs will become immediately
exercisable (and will deemed to be exercisable immediately prior to the Change
in Control), and will remain exercisable throughout their entire term (the
“Vested Options and SARs”); provided, however, that, with respect to Vested
Options and SARs that are not exercised in connection with the Change in
Control, such Vested Options and SARs will be subject to the provisions of
Section 14.1(e) below, as applicable;

 

  (b) any Restriction Periods or other restrictions imposed on Restricted Stock,
Restricted Stock Units and Restricted Units will lapse, except that the degree
of vesting associated with those awards that is conditioned on the achievement
of performance conditions will be determined as set forth in Section 14.1(c) or
Section 14.1(d), as applicable;

 

  (c)

except as otherwise provided in the Award Agreement, the vesting of all
Performance Units and Performance Shares will be accelerated as of the effective
date of the Change in Control, and Participants will be paid in cash, within
thirty

 

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  days after the effective date of the Change in Control, a pro rata amount
based on an assumed achievement of all relevant performance objectives at target
levels, and upon the length of time within the Performance Period that elapsed
prior to the effective date of the Change in Control;

 

  (d) notwithstanding the foregoing, if the Committee determines that actual
performance to the effective date of the Change in Control exceeds target
levels, the prorated payouts made pursuant to Sections 14.1(b) and (c) will be
made at levels commensurate with the actual performance (determined by
extrapolating the actual performance to the end of the Performance Period) based
on the length of time within the Performance Period that elapsed prior to the
Change in Control; and

 

  (e) (i) if the Company is a party to an agreement that is reasonably likely to
result in a Change in Control, such agreement may provide for: (A) the
continuation of the Vested Options and SARs by the Company, if the Company is
the surviving corporation; (B) the assumption of the Vested Options and SARs by
the surviving corporation or its parent or subsidiary; (C) the substitution by
the surviving corporation or its parent or subsidiary of equivalent awards for
the Vested Options and SARs; or (D) settlement of the Vested Options and SARs
for the Change in Control Price (less, to the extent applicable, the per share
exercise or grant price), or, if the per share exercise or grant price equals or
exceeds the Change in Control Price, such Vested Options and SARs shall
terminate and be canceled.

(ii) to the extent that Restricted Stock, Restricted Units and Restricted Stock
Units settle in Shares in accordance with their terms upon a Change in Control,
such Shares shall be entitled to receive as a result of the Change in Control
transaction the same consideration as the Shares held by shareholders of the
Company as a result of the Change in Control transaction.

For purposes of this Section 14.1(e), Change in Control Price shall mean the
Fair Market Value of a Share upon a Change in Control. To the extent that the
consideration paid in any such Change in Control transaction consists all or in
part of securities or other non-cash consideration, the value of such securities
or other non-cash consideration shall be determined in good faith by the
Committee.

14.2 Awards Other than Grandfathered Awards. Upon the occurrence of a Change in
Control, the following provisions of this Section 14.2 shall apply to Awards
that are not Grandfathered Awards, unless the Committee shall determine
otherwise at the time of grant with respect to a particular Award and unless
otherwise specifically prohibited under applicable laws, or by the rules and
regulations of any governing governmental agencies or national securities
exchanges:

 

17

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  (a) Options and SARs.

(i) Any outstanding Options and SARs, unless exchanged by the Company for a
Replacement Award, will become immediately exercisable (and will deemed to be
exercisable immediately prior to the Change in Control), and will remain
exercisable throughout the remainder of their term (the “Vested Options and
SARs”); provided, however, that, with respect to Vested Options and SARs that
are not exercised upon the Change in Control, such Vested Options and SARs will
be subject to the provisions of Section 14.2(d) below, as applicable.

(ii) Any Option or SAR may be exchanged by the Company upon the Change in
Control for a Replacement Award that satisfies the conditions of this
Section 14.2(a)(ii). The Replacement Award shall have equivalent value and vest
and become exercisable in accordance with the vesting schedule and term for
exercisability, in each case that applied to the corresponding Option or SAR for
which it is being exchanged, provided, however, that if within twenty-four
(24) months of such Change in Control, the Participant’s employment with the
Company is terminated by the Company without Cause or by the Participant for
Good Reason (as defined in the Participant’s employment agreement for
Participants who are party to an employment agreement with the Company), such
Award, to the extent then outstanding, shall become fully vested and exercisable
upon such termination of employment.

 

  (b) Restricted Stock, Restricted Stock Units and Restricted Units.

(i) Any Restriction Periods or other restrictions imposed on Restricted Stock,
Restricted Stock Units and Restricted Units that are not exchanged by the
Company for a Replacement Award will lapse, except that the degree of vesting
associated with those Awards that is conditioned on the achievement of
performance conditions will be determined as set forth in Section 14.2(c).

(ii) Any Restricted Stock, Restricted Stock Unit, or Restricted Unit may be
exchanged by the Company upon the Change in Control for a Replacement Award that
satisfies the conditions of this Section 14.2(b)(ii). The Replacement Award
shall have equivalent value to the Award for which it is being exchanged and
shall vest in accordance with the vesting schedule that applied to the
corresponding Award for which it is being exchanged, provided, however, that if
within twenty four (24) months of such Change in Control, the Participant’s
employment with the Company is terminated by the Company without Cause or by the
Participant for Good Reason (as defined in the Participant’s employment
agreement for Participants who are party to an employment agreement with the
Company), such Award, to the extent then outstanding, shall become free of all
contingencies, restrictions and limitations and become vested and transferable
(or paid) upon such termination of employment.

 

  (c) Performance Shares and Performance Units.

(i) Except as otherwise provided in the Award Agreement, the vesting of all
Performance Units and Performance Shares that are not exchanged by the Company
for a Replacement Award will be accelerated as of the effective date of the
Change in Control, and Participants will be paid, within thirty days after the
effective date of the Change in Control, an amount in cash based on an assumed
achievement of all relevant performance objectives at target levels.

 

18

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(ii) Any Performance Share or Performance Unit may be exchanged by the Company
upon a Change in Control for a Replacement Award that satisfies the conditions
of this Section 14.2(c)(ii). The Replacement Award shall not be subject to any
performance condition referred to in Article 10 above or otherwise, but instead
shall be subject solely to the restrictions, if any, of the Award for which it
is being exchanged that are based on the passage of time through the expiration
date of the performance period utilized in the Award for which it is being
exchanged. The number or value of such Replacement Award shall be determined
based on the assumed achievement of all of the relevant performance objectives
of the Award for which it is being exchanged at their target levels.
Notwithstanding the foregoing in this Section 14.2(c)(ii), if within twenty four
(24) months of such Change in Control, the Participant’s employment with the
Company is terminated by the Company without Cause or by the Participant for
Good Reason (as defined in the Participant’s employment agreement for
Participants who are party to an employment agreement with the Company), such
Replacement Award, to the extent then outstanding, shall become free of all
contingencies, restrictions and limitations and become vested and transferable
(or paid) upon such termination of employment.

 

  (d) (i) If the Company is a party to an agreement that is reasonably likely to
result in a Change in Control, such agreement may provide for settlement of the
Vested Options and SARs for the Change in Control Price (less, to the extent
applicable, the per share exercise or grant price), or, if the per share
exercise or grant price equals or exceeds the Change in Control Price, such
Vested Options and SARs shall terminate and be canceled.

(ii) To the extent that Restricted Stock, Restricted Units and Restricted Stock
Units settle in Shares in accordance with their terms upon a Change in Control,
such Shares shall be entitled to receive as a result of the Change in Control
transaction the same consideration as the Shares held by shareholders of the
Company as a result of the Change in Control transaction.

For purposes of this Section 14.2(d), Change in Control Price shall mean the
Fair Market Value of a Share upon a Change in Control. To the extent that the
consideration paid in any such Change in Control transaction consists all or in
part of securities or other non-cash consideration, the value of such securities
or other non-cash consideration shall be determined in good faith by the
Committee.

14.3 Termination, Amendment and Modifications of Change in Control Provisions.
Notwithstanding any other provision of this Plan or any provision in an Award
Agreement, this Article 14 may not be terminated, amended or modified on or
after the effective date of a Change in Control in a way that would adversely
affect any Award in any material way theretofore granted to a Participant,
unless the Participant gives his or her prior written consent to the
termination, amendment or modification.

 

19

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Article 15. Amendment, Modification and Termination

15.1 Amendment, Modification and Termination. Subject to Section 14.3, the
Committee or Board may at any time and from time to time, alter, amend, modify
or terminate the Plan in whole or in part. The Committee or Board will not,
however, increase the number of Shares that may be issued or transferred to
Participants under the Plan, as described in the first sentence of Section 4.1
(and subject to adjustment as provided in Sections 4.2 and 4.3).

Subject to the terms and conditions of the Plan, the Committee may modify,
extend or renew outstanding Awards under the Plan, or accept the surrender of
outstanding Awards (to the extent not already exercised) and grant new Awards in
substitution of them (to the extent not already exercised). Except as provided
in Sections 4.3 and 15.2, the Committee will not, however, modify any
outstanding Option or SAR so as to specify a lower Exercise Price or grant price
(and will not cancel an Option or SAR and substitute for it an Option or SAR
with a lower Exercise price or grant price), without the approval of the
Company’s shareholders. In addition, except as provided in Sections 4.3 and
15.2, the Committee may not cancel an outstanding Option or SAR whose Exercise
Price or grant price is equal to or greater than the current Fair Market Value
of a Share and substitute for it another Award without the prior approval of the
Company’s shareholders. Notwithstanding the foregoing, no alteration,
modification or termination of an Award will, without the prior written consent
of the Participant, adversely alter or impair any rights or obligations under
any Award already granted under the Plan.

15.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events. The Committee may, using reasonable care, make adjustments in the terms
and conditions of, and the criteria included in, Awards in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan (i) in recognition of unusual or nonrecurring
events (including, without limitation, the events described in Section 4.3)
affecting the Company or its financial statements, (ii) in recognition of
changes in applicable laws, regulations, or accounting principles, or
(iii) whenever the Committee determines that such adjustments are necessary,
equitable and/or appropriate. In the case of an Award designed to qualify for
the Performance-Based Exception, the Committee will take care not to make an
adjustment that would disqualify the Award.

15.3 Awards Previously Granted. No termination, amendment or modification of the
Plan will adversely affect in any material way any Award already granted,
without the written consent of the Participant who holds the Award.

15.4 Compliance with Code Section 162(m) and Code Section 409A. Awards will
comply with the requirements of Code Section 162(m), unless the Committee
determines that such compliance is not desired with respect to an Award
available for grant under the Plan. In addition, if changes are made to Code
Section 162(m) to permit greater flexibility as to any Award available under the
Plan, the Committee may, subject to this Article 15, make any adjustments it
deems appropriate. The Plan and Awards, and all amounts payable with respect to
Awards, are intended to comply with, or be exempt from, Code Section 409A and
the interpretative guidance thereunder and shall be construed, interpreted and
administered accordingly. If an unintentional operational failure occurs with
respect to Code Section 409A, any affected Participant or beneficiary shall
fully cooperate with the Company to correct the

 

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failure to the extent possible in accordance with any correction procedure
established by the U.S. Department of the Treasury. If a Participant is a
“specified employee” (as such term is defined for purposes of Code Section 409A)
at the time of his or her termination of employment, no amount that is subject
to Code Section 409A and that becomes payable by reason of such termination of
employment shall be paid to the Participant before the earlier of (i) the
expiration of the six-month period measured from the date of the Participant’s
termination of employment, and (ii) the date of the Participant’s death. A
termination of employment shall be deemed to occur only if it is a “separation
from service” within the meaning of Code Section 409A, and references in the
Plan and any Award Agreement to “termination,” “termination of employment,” or
like terms shall mean a “separation from service.” A separation from service
shall be deemed to occur if it is anticipated that the level of services the
Participant will perform after a certain date (whether as an employee or as an
independent contractor) will permanently decrease to no more than twenty percent
(20%) of the average level of services provided by the Participant in the
immediately preceding thirty-six (36) months.

Article 16. Withholding

16.1 Tax Withholding. The Company will have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient
to satisfy federal, state, and local taxes, domestic or foreign, required by law
or regulation to be withheld with respect to any taxable event arising under
this Plan. No Award Agreement will permit reload options to be granted in
connection with any Shares used to pay a tax withholding obligation.

16.2 Share Withholding. With respect to withholding required upon the exercise
of Options or SARs, upon the lapse of restrictions on Restricted Stock, or upon
any other taxable event arising as a result of Awards granted hereunder, the
Company may satisfy the minimum withholding requirement for supplemental wages,
in whole or in part, by withholding Shares having a Fair Market Value
(determined on the date the Participant recognizes taxable income on the Award)
equal to the minimum withholding tax required to be collected on the
transaction. The Participant may elect, subject to the approval of the
Committee, to deliver the necessary funds to satisfy the withholding obligation
to the Company, in which case there will be no reduction in the Shares otherwise
distributable to the Participant.

Article 17. Indemnification

Each person who is or has been a member of the Committee or the Board will be
indemnified and held harmless by the Company from and against any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred by him or
her in connection with or as a result of any claim, action, suit or proceeding
to which he or she may be a party or in which he or she may be involved by
reason of any action taken, or failure to act, under the Plan. Each such person
will also be indemnified and held harmless by the Company from and against any
and all amounts paid by him or her in a settlement approved by the Company, or
paid by him or her in satisfaction of any judgment, of or in a claim, action,
suit or proceeding against him or her and described in the previous sentence, so
long as he or she gives the Company an opportunity, at its own expense, to
handle and defend the claim, action, suit or proceeding before he or she
undertakes to handle and defend it. The foregoing right of indemnification will
not be exclusive

 

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of any other rights of indemnification to which a person who is or has been a
member of the Committee or the Board may be entitled under the Company’s
Certificate of Incorporation or By-Laws, as a matter of law, or otherwise, or
any power that the Company may have to indemnify him or her or hold him or her
harmless.

Article 18. Successors

All obligations of the Company under the Plan or any Award Agreement will be
binding on any successor to the Company, whether the existence of the successor
results from a direct or indirect purchase of all or substantially all of the
business or assets of the Company or both, or a merger, consolidation, or
otherwise.

Article 19. Legal Construction

19.1 Number. Except where otherwise indicated by the context, any plural term
used in this Plan includes the singular and a singular term includes the plural.

19.2 Severability. If any provision of the Plan is held illegal or invalid for
any reason, the illegality or invalidity will not affect the remaining parts of
the Plan, and the Plan will be construed and enforced as if the illegal or
invalid provision had not been included.

19.3 Requirements of Law. The granting of Awards and the issuance of Share or
cash payouts under the Plan will be subject to all applicable laws, rules, and
regulations, and to any approvals by governmental agencies or national
securities exchanges as may be required.

19.4 Securities Law Compliance. As to any individual who is, on the relevant
date, an officer, director or ten percent beneficial owner of any class of the
Company’s equity securities that is registered pursuant to Section 12 of the
Exchange Act, all as defined under Section 16 of the Exchange Act, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 under the Exchange Act, or any successor rule. To the extent any provision
of the Plan or action by the Committee fails to so comply, it will be deemed
null and void, to the extent permitted by law and deemed advisable by the
Committee.

19.5 Awards to Foreign Nationals and Employees Outside the United States. To the
extent the Committee deems it necessary, appropriate or desirable to comply with
foreign law or practice and to further the purposes of this Plan, the Committee
may, without amending the Plan, (i) establish rules applicable to Awards granted
to Participants who are foreign nationals, are employed outside the United
States, or both, including rules that differ from those set forth in this Plan,
and (ii) grant Awards to such Participants in accordance with those rules.

19.6 Unfunded Status of the Plan. The Plan is intended to constitute an
“unfunded” plan for incentive and deferred compensation. With respect to any
payments or deliveries of Shares not yet made to a Participant by the Company,
the Participant’s rights are no greater than those of a general creditor of the
Company. The Committee may authorize the establishment of trusts or other
arrangements to meet the obligations created under the Plan, so long as the
arrangement does not cause the Plan to lose its legal status as an unfunded
plan.

 

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19.7 Governing Law. To the extent not preempted by federal law, the Plan and all
agreements hereunder will be construed in accordance with and governed by the
laws of the State of Michigan without giving effect to principles of conflicts
of law.

* * * * *

 

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