Exhibit 10.4

 
STARBUCKS CORPORATION
2005 LONG-TERM EQUITY INCENTIVE PLAN
(Effective February 9, 2005, as amended and restated effective March 20, 2013
and as restated on April 9, 2015 to reflect adjustments for the 2-for-1 forward
stock split effective on such date)

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STARBUCKS CORPORATION
2005 LONG-TERM EQUITY INCENTIVE PLAN
TABLE OF CONTENTS  
 
 
Page 
 
 
 
 
 
PART I PURPOSE, ADMINISTRATION AND RESERVATION OF SHARES
 
 
 
 
Section 1.
Purpose of the Plan
A-1
Section 2.
Definitions
A-1
(a)
Active Status
A-1
(b)
ASC 718
A-1
(c)
Award
A-1
(d)
Award Agreement
A-1
(e)
Beneficial Ownership
A-1
(f)
Board
A-1
(g)
Change of Control
A-2
(h)
Code
A-2
(i)
Committee
A-2
(j)
Common Stock
A-2
(k)
Company
A-2
(l)
Consultant
A-2
(m)
Director
A-2
(n)
Disability
A-2
(o)
Exchange Act
A-2
(p)
Executive Officers
A-2
(q)
Fair Market Value
A-2
(r)
FLSA
A-3
(s)
Prior Plans
A-3
(t)
Incentive Stock Option
A-3
(u)
Independent Director
A-3
(v)
Maximum Annual Participant Award
A-3
(w)
Misconduct
A-3
(x)
Nasdaq
A-3
(y)
Nominating and Corporate Governance Committee
A-3
(z)
Non-Employee Director
A-3
(aa)
Nonqualified Stock Option
A-3
(bb)
Option
A-3
(cc)
Optionee
A-4
(dd)
Original Effective Date
A-4
(ee)
Parent
A-4
(ff)
Participant
A-4
(gg)
Partner
A-4
(hh)
Performance Criteria
A-4
(ii)
Plan
A-4
 
 
 

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(jj)
Plan Minimum Vesting or Issuance Requirements
A-4
(kk)
Reprice
A-4
(ll)
Resignation (or Resign) for Good Reason
A-4
(mm)
Restated Effective Date
A-4
(nn)
Restricted Stock
A-4
(oo)
Restricted Stock Units
A-4
(pp)
Retirement
A-4
(qq)
SAR
A-5
(rr)
SEC
A-5
(ss)
Share
A-5
(tt)
Stand-Alone SARs
A-5
(uu)
Subcommittee
A-5
(vv)
Subsidiary
A-5
(ww)
Tandem SARs
A-5
Section 3.
Administration of the Plan
A-5
(a)
Authority
A-5
(b)
Powers of the Committee
A-5
(c)
Effect of Committee’s Decision
A-6
(d)
Delegation
A-6
(e)
Administration
A-6
Section 4.
Shares Subject to the Plan
A-6
(a)
Reservation of Shares
A-6
(b)
Time of Granting Awards
A-7
(c)
Securities Law Compliance
A-7
(d)
Substitutions and Assumptions
A-7
Section 5.
Adjustments to Shares Subject to the Plan
A-7
 
 
 
 
PART II TERMS APPLICABLE TO ALL AWARDS
 
 
 
 
Section 6.
General Eligibility
A-7
(a)
Awards
A-7
(b)
Maximum Annual Participant Award
A-7
(c)
No Employment/Service Rights
A-8
Section 7.
Procedure for Exercise of Awards; Rights as a Shareholder
A-8
(a)
Procedure
A-8
(b)
Method of Payment
A-8
(c)
Withholding Obligations
A-8
(d)
Shareholder Rights
A-8
(e)
Non-Transferability of Awards
A-8
Section 8.
Expiration of Awards
A-9
(a)
Expiration, Termination or Forfeiture of Awards
A-9
(b)
Extension of Term
A-9
 
 
 

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Section 9.
Effect of Change of Control
A-9
(a)
Acceleration
A-9
(b)
Definition
A-9
 
 
 
 
PART III SPECIFIC TERMS APPLICABLE TO OPTIONS, STOCK AWARDS AND SARS
 
 
 
 
Section 10.
Grant, Terms and Conditions of Options
A-10
(a)
Designation
A-10
(b)
Term of Options
A-10
(c)
Option Exercise Price
A-10
(d)
Vesting
A-10
(e)
Substitution of SARs for Options
A-10
(f)
Exercise
A-11
(g)
One-Time Option Exchange Offer
A-11
Section 11.
Grant, Terms and Conditions of Stock Awards
A-11
(a)
Designation
A-11
(b)
Performance Criteria
A-11
(c)
Vesting
A-11
(d)
Plan Minimum Vesting or Issuance Requirements
A-12
(e)
Exception to Plan Minimum Vesting or Issuance Requirements
A-12
Section 12.
Grant, Terms and Conditions of SARs
A-12
(a)
Grants
A-12
(b)
Tandem SARs
A-12
(c)
Stand-Alone SARs
A-13
(d)
Exercised SARs
A-13
 
 
 
 
PART IV TERM OF PLAN AND SHAREHOLDER APPROVAL
 
 
 
 
Section 13.
Term of Plan
A-13
Section 14.
Amendment and Termination of the Plan
A-13
(a)
Amendment and Termination
A-13
(b)
Participants in Foreign Countries
A-13
(c)
Effect of Amendment or Termination
A-13
Section 15.
Shareholder Approval
A-13
 
 
 
 
PART V OTHER PROVISIONS
 
 
 
 
Section 16.
No Liability of Company
A-14
Section 17.
Non-Exclusivity of Plan
A-14
Section 18.
Governing Law
A-14

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STARBUCKS CORPORATION
2005 LONG-TERM EQUITY INCENTIVE PLAN
PART I
PURPOSE, ADMINISTRATION AND RESERVATION OF SHARES
Section 1. Purpose of the Plan. The purposes of this Plan are (a) to attract and
retain the most talented Partners, officers and Directors available, and (b) to
promote the growth and success of the Company’s business, (i) by aligning the
long-term interests of Partners, officers and Directors with those of the
shareholders by providing an opportunity to acquire an interest in the Company
and (ii) by providing both rewards for exceptional performance and long term
incentives for future contributions to the success of the Company and its
Subsidiaries.
The Plan permits the grant of Incentive Stock Options, Nonqualified Stock
Options, Restricted Stock, Restricted Stock Units, or SARs, at the discretion of
the Committee. Each Award will be subject to conditions specified in the Plan
and in the terms of the Award Agreement, such as continued employment or
satisfaction of performance criteria.
This Plan will serve as a framework for the Committee to establish sub-plans or
procedures governing the grants to Partners, Directors and Consultants and
Partners working outside of the United States. The awards granted under the
Prior Plans shall continue to be administered under the Prior Plans until such
time as those options are exercised, expire or become unexercisable for any
reason.
Section 2. Definitions. As used herein, the following definitions shall apply:
(a) “Active Status” shall mean (i) for Partners, the absence of any interruption
or termination of service as a Partner, (ii) for Directors, that the Director
has not been removed from the Board for cause (as determined by the Company’s
shareholders), and (iii) for Consultants, the absence of any interruption,
expiration, or termination of such person’s consulting or advisory relationship
with the Company or any Subsidiary or the occurrence of any termination event as
set forth in such person’s Award Agreement. Active Status shall not be
considered interrupted (A) for a Partner in the case of sick leave, maternity
leave, infant care leave, medical emergency leave, military leave, or any other
leave of absence properly taken in accordance with the policies of the Company
or any applicable Subsidiary as may be in effect from time to time, and (B) for
a Consultant, in the case of any temporary interruption in such person’s
availability to provide services to the Company or any Subsidiary which has been
granted in writing by an authorized officer of the Company. Whenever a mandatory
severance period applies under applicable law with respect to a termination of
service as a Partner, Active Status shall be considered terminated upon such
Partner’s receipt of notice of termination in whatever form prescribed by
applicable law.
(b) “ASC 718” shall mean Accounting Standards Codification (ASC) Topic 718,
“Stock Compensation”, as promulgated by the Financial Accounting Standards
Board.
(c) “Award” shall mean any award or benefits granted under the Plan, including
Options, Restricted Stock, Restricted Stock Units, and SARs.
(d) “Award Agreement” shall mean a written or electronic agreement or other
instrument as may be approved from time to time by the Committee setting forth
the terms of the Award. An Award Agreement may be in the form of an agreement to
be executed by both the Participant and the Company (or an authorized
representative of the Company) or certificates, notices or similar instruments
as approved by the Committee.
(e) “Beneficial Ownership” shall have the meaning set forth in Rule 13d-3
promulgated under the Exchange Act.
(f) “Board” shall mean the Board of Directors of the Company.
(g) “Change of Control” shall mean the first day that any one or more of the
following conditions shall have been satisfied:
(i) the sale, liquidation or other disposition of all or substantially all of
the Company’s assets in one or a series of related transactions;

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(ii) an acquisition (other than directly from the Company) of any outstanding
voting securities by any person, after which such person (as the term is used
for purposes of Section 13(d) or 14(d) of the Exchange Act) has Beneficial
Ownership of twenty-five percent (25%) or more of the then outstanding voting
securities of the Company, other than a Board approved transaction;
(iii) during any 12-consecutive month period, the individuals who, at the
beginning of such period, constitute the Board (“Incumbent Directors”) cease for
any reason other than death to constitute at least a majority of the members of
the Board; provided however that except as set forth in this Section 2(g)(iii),
an individual who becomes a member of the Board subsequent to the beginning of
the 12-month period, shall be deemed to have satisfied such 12-month requirement
and shall be deemed an Incumbent Director if such Director was elected by or on
the recommendation of or with the approval of at least two-thirds of the
Directors who then qualified as Incumbent Directors either actually (because
they were Directors at the beginning of such period) or by operation of the
provisions of this section; if any such individual initially assumes office as a
result of or in connection with either an actual or threatened solicitation with
respect to the election of Directors (as such terms are used in Rule 14a-12(c)
of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitations of proxies or consents by or on behalf of a person
other than the Board, then such individual shall not be considered an Incumbent
Director; or
(iv) a merger, consolidation or reorganization of the Company, as a result of
which the shareholders of the Company immediately prior to such merger,
consolidation or reorganization own directly or indirectly immediately following
such merger, consolidation or reorganization less than fifty percent (50%) of
the combined voting power of the outstanding voting securities of the entity
resulting from such merger, consolidation or reorganization.
(h) “Code” shall mean the Internal Revenue Code of 1986, as amended.
(i) “Committee” shall mean the Compensation and Management Development Committee
appointed by the Board.
(j) “Common Stock” shall mean the common stock of the Company, par value $0.001
per share, subject to adjustment as provided in Section 5.
(k) “Company” shall mean Starbucks Corporation, a Washington corporation, and
any successor thereto.
(l) “Consultant” shall mean any person, except a Partner, engaged by the Company
or any Subsidiary of the Company, to render personal services to such entity,
including as an advisor, pursuant to the terms of a written agreement.
(m) “Director” shall mean a member of the Board.
(n) “Disability” shall mean (i) in the case of a Participant whose employment
with the Company or a Subsidiary is subject to the terms of an employment or
consulting agreement that includes a definition of “Disability,” the term
“Disability” as used in this Plan shall have the meaning set forth in such
employment or consulting agreement during the period that such employment or
consulting agreement remains in effect; and (ii) in all other cases, the term
“Disability” as used in this Plan shall have the same meaning as set forth under
the Company’s long-term disability plan applicable to the Participant as may be
amended from time to time, and in the event the Company does not maintain any
such plan with respect to a Participant, a physical or mental condition
resulting from bodily injury, disease or mental disorder which renders the
Participant incapable of continuing his or her usual and customary employment
with the Company or a Subsidiary, as the case may be, for a period of not less
than 120 days or such other period as may be required by applicable law.
(o) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
(p) “Executive Officers” shall mean the officers of the Company as such term is
defined in Rule 16a-1 under the Exchange Act.
(q) “Fair Market Value” shall mean the closing price per share of the Common
Stock on Nasdaq as to the date specified (or the previous trading day if the
date specified is a day on which no trading occurred), or if Nasdaq shall cease
to be the principal exchange or quotation system upon which the shares of Common
Stock are listed or quoted, then such exchange or quotation system as the
Company elects to list or quote its shares of Common Stock and that the
Committee designates as the Company’s principal exchange or quotation system.

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(r) “FLSA” shall mean the Fair Labor Standards Act of 1938, as amended.
(s) “Prior Plans” shall mean the Starbucks Corporation Company-Wide 1991 Stock
Option Plan, as amended, the Starbucks Corporation Amended and Restated Key
Employee Stock Option Plan-1994, as amended, and the Starbucks Corporation
Amended and Restated 1989 Stock Option Plan for Non-Employee Directors.
(t) “Incentive Stock Option” shall mean any Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(u) “Independent Director” shall mean a Director who: (1) meets the independence
requirements of Nasdaq, or if Nasdaq shall cease to be the principal exchange or
quotation system upon which the shares of Common Stock are listed or quoted,
then such exchange or quotation system as the Company elects to list or quote
its shares of Common Stock and that the Committee designates as the Company’s
principal exchange or quotation system; (2) qualifies as an “outside director”
under Section 162(m) of the Code; (3) qualifies as a “non-employee director”
under Rule 16b-3 promulgated under the Exchange Act; and (4) satisfies
independence criteria under any other applicable laws or regulations relating to
the issuance of Shares to Partners.
(v) “Maximum Annual Participant Award” shall have the meaning set forth in
Section 6(b).
(w) “Misconduct” shall mean any of the following; provided, however, that with
respect to Non-Employee Directors “Misconduct” shall mean subsection
(viii) only:
(i) any material breach of an agreement between the Participant and the Company
or any Subsidiary which, if curable, has not been cured within twenty (20) days
after the Participant has been given written notice of the need to cure such
breach, or which breach, if previously cured, recurs;
(ii) willful unauthorized use or disclosure of confidential information or trade
secrets of the Company or any Subsidiary by the Participant;
(iii) the Participant’s continued willful and intentional failure to
satisfactorily perform Participant’s essential responsibilities, provided that
the Participant has been given at least thirty (30) days’ written notice of the
need to cure the failure and cure has not been effected within that time period,
or which failure, if previously cured, recurs;
(iv) material failure of the Participant to comply with rules, policies or
procedures of the Company or any Subsidiary as they may be amended from time to
time, provided that the Participant has been given at least thirty (30) days’
written notice of the need to cure the failure, if such failure is curable, and
cure has not been effected within that time period, or which failure, if
previously cured, recurs;
(v) Participant’s dishonesty, fraud or gross negligence related to the business
or property of the Company or any Subsidiary;
(vi) personal conduct that is materially detrimental to the business of the
Company or any Subsidiary;
(vii) conviction of or plea of nolo contendere to a felony; or
(viii) in the case of Non-Employee Directors, the removal from the Board for
cause (as determined by the Company’s shareholders).
(x) “Nasdaq” shall mean The Nasdaq Stock Market, Inc.
(y) “Nominating and Corporate Governance Committee” shall mean the Nominating
and Corporate Governance Committee appointed by the Board.
(z) “Non-Employee Director” shall mean a Director who is not a Partner.
(aa) “Nonqualified Stock Option” shall mean an Option that does not qualify or
is not intended to qualify as an Incentive Stock Option.
(bb) “Option” shall mean a stock option granted pursuant to Section 10 of the
Plan.

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(cc) “Optionee” shall mean a Participant who has been granted an Option.
(dd) “Original Effective Date” shall mean February 9, 2005, the date on which
the Company’s shareholders first approved this Plan in accordance with
applicable Nasdaq rules.
(ee) “Parent” shall mean a “parent corporation,” whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(ff) “Participant” shall mean a Partner, Director or Consultant granted an
Award.
(gg) “Partner” shall mean any person, including an officer, who is a common law
employee of, receives remuneration for personal services to, is reflected on the
official human resources database as an employee of, and is on the payroll of
the Company or any Subsidiary of the Company. A person is on the payroll if he
or she is paid from or at the direction of the payroll department of the
Company, or any Subsidiary of the Company. Persons providing services to the
Company, or to any Subsidiary of the Company, pursuant to an agreement with a
staff leasing organization, temporary workers engaged through or employed by
temporary or leasing agencies, and workers who hold themselves out to the
Company, or a Subsidiary to which they are providing services as being
independent contractors, or as being employed by or engaged through another
company while providing the services, and persons covered by a collective
bargaining agreement (unless the collective bargaining agreement applicable to
the person specifically provides for participation in this Plan) are not
Partners for purposes of this Plan and do not and cannot participate in this
Plan, whether or not such persons are, or may be reclassified by the courts, the
Internal Revenue Service, the U. S. Department of Labor, or other person or
entity as, common law employees of the Company, or any Subsidiary, either solely
or jointly with another person or entity.
(hh) “Performance Criteria” shall have the meaning set forth in Section 11(b).
(ii) “Plan” shall mean this Starbucks Corporation 2005 Long-Term Equity
Incentive Plan, including any amendments thereto.
(jj) “Plan Minimum Vesting or Issuance Requirements” shall mean the minimum
vesting requirements for Restricted Stock or Restricted Stock Units under Plan
Section 11(d) hereunder.
(kk) “Reprice” shall mean the reduction of the exercise price of Options or SARs
previously awarded, and, at any time when the exercise price of Options or SARs
is above the Fair Market Value of a share of Common Stock, the cancellation and
re-grant or the exchange of such outstanding Options or SARs for either cash or
a new Award with a lower (or no) exercise price.
(ll) “Resignation (or Resign) for Good Reason” shall mean any voluntary
termination by written resignation of the Active Status of any Partner after a
Change of Control because of: (1) a material reduction in the Partner’s
authority, responsibilities or scope of employment; (2) an assignment of duties
to the Partner inconsistent with the Partner’s role at the Company (including
its Subsidiaries) prior to the Change of Control, (3) a reduction in the
Partner’s base salary or total incentive compensation; (4) a material reduction
in the Partner’s benefits unless such reduction applies to all Partners of
comparable rank; or (5) the relocation of the Partner’s primary work location
more than fifty (50) miles from the Partner’s primary work location prior to the
Change of Control; provided that the Partner’s written notice of voluntary
resignation must be tendered within one (1) year after the Change of Control,
and shall specify which of the events described in (1) through (5) resulted in
the resignation.
(mm) “Restated Effective Date” shall mean the date on which the Company’s
shareholders approved this amendment and restatement of the Plan in accordance
with applicable Nasdaq rules.
(nn) “Restricted Stock” shall mean a grant of Shares pursuant to Section 11 of
the Plan.
(oo) “Restricted Stock Units” shall mean a grant of the right to receive Shares
in the future or their cash equivalent (or both) pursuant to Section 11 of the
Plan.
(pp) “Retirement” shall mean, (i) with respect to any Partner, voluntary
termination of employment after attainment of age 55 and at least ten (10) years
of credited service with the Company or any Subsidiary (but only during the time
the Subsidiary was a Subsidiary), as determined by the Committee in its sole
discretion, and (ii) with respect to any Non-Employee Director, ceasing to be a
Director pursuant to election by the Company’s

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shareholders or by voluntary resignation with the approval of the Board’s chair
after having attained the age of 55 years and served continuously on the Board
for at least six years.
(qq) “SAR” shall mean a stock appreciation right awarded pursuant to Section 12
of the Plan.
(rr) “SEC” shall mean the Securities and Exchange Commission.
(ss) “Share” shall mean one share of Common Stock, as adjusted in accordance
with Section 5 of the Plan.
(tt) “Stand-Alone SARs” shall have the meaning set forth in Section 12(c) of the
Plan.
(uu) “Subcommittee” shall have the meaning set forth in Section 3(d).
(vv) “Subsidiary” shall mean (1) in the case of an Incentive Stock Option a
“subsidiary corporation,” whether now or hereafter existing, as defined in
Section 424(f) of the Code, and (2) in the case of a Nonqualified Stock Option,
Restricted Stock, a Restricted Stock Unit or a SAR, in addition to a subsidiary
corporation as defined in (1), (A) a limited liability company, partnership or
other entity in which the Company controls fifty percent (50%) or more of the
voting power or equity interests, or (B) an entity with respect to which the
Company possesses the power, directly or indirectly, to direct or cause the
direction of the management and policies of that entity, whether through the
Company’s ownership of voting securities, by contract or otherwise.
(ww) “Tandem SARs” shall have the meaning set forth in Section 12(b) of the
Plan.
Section 3. Administration of the Plan.
(a) Authority. The Plan shall be administered by the Committee. The Committee
shall have full and exclusive power to administer the Plan on behalf of the
Board, subject to such terms and conditions as the Committee may prescribe.
Notwithstanding anything herein to the contrary, the Committee’s power to
administer the Plan, and actions the Committee takes under the Plan, shall be
subject to the limitation that certain actions may be subject to review and
approval by either the full Board or a panel consisting of all of the
Independent Directors of the Company.
(b) Powers of the Committee. Subject to the other provisions of this Plan, the
Committee shall have the authority, in its discretion:
(i) to grant Incentive Stock Options, Nonqualified Stock Options, Restricted
Stock, Restricted Stock Units, and SARs to Participants and to determine the
terms and conditions of such Awards, including the determination of the Fair
Market Value of the Shares and the exercise price, and to modify or amend each
Award, with the consent of the Participant when required;
(ii) to determine the Participants, to whom Awards, if any, will be granted
hereunder, the timing of such Awards, and the number of Shares to be represented
by each Award;
(iii) to construe and interpret the Plan and the Awards granted hereunder;
(iv) to prescribe, amend, and rescind rules and regulations relating to the
Plan, including the forms of Award Agreement and manner of acceptance of an
Award, and to take or approve such further actions as it determines necessary or
appropriate to the administration of the Plan and Awards, such as correcting a
defect or supplying any omission, or reconciling any inconsistency so that the
Plan or any Award Agreement complies with applicable law, regulations and
listing requirements and so as to avoid unanticipated consequences or address
unanticipated events (including any temporary closure of Nasdaq, disruption of
communications or natural catastrophe) deemed by the Committee to be
inconsistent with the purposes of the Plan or any Award Agreement, provided that
no such action shall be taken absent shareholder approval to the extent required
under Section 14;
(v) to establish performance criteria for Awards made pursuant to the Plan in
accordance with a methodology established by the Committee, and to determine
whether performance goals have been attained;
(vi) to accelerate or defer (with the consent of the Participant) the exercise
or vested date of any Award;

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(vii) to authorize any person to execute on behalf of the Company any instrument
required to effectuate the grant of an Award previously granted by the
Committee;
(viii) to establish sub-plans, procedures or guidelines for the grant of Awards
to Partners, Directors, Consultants and Partners working outside of the United
States; and
(ix) to make all other determinations deemed necessary or advisable for the
administration of the Plan;
provided that, no consent of a Participant is necessary under clauses (i) or
(vi) if a modification, amendment, acceleration, or deferral, in the reasonable
judgment of the Committee confers a benefit on the Participant or is made
pursuant to an adjustment in accordance with Section 5.
(c) Effect of Committee’s Decision. All decisions, determinations, and
interpretations of the Committee shall be final and binding on all Participants,
the Company (including its Subsidiaries), any shareholder and all other persons.
(d) Delegation. Consistent with the Committee’s charter, as such charter may be
amended from time to time, the Committee may delegate (i) to one or more
separate committees consisting of members of the Committee or other Directors
(any such committee a “Subcommittee”), or (ii) to an Executive Officer of the
Company, the ability to grant Awards and take the other actions described in
Section 3(b) with respect to Participants who are not Executive Officers, and
such actions shall be treated for all purposes as if taken by the Committee;
provided that the grant of Awards shall be made in accordance with parameters
established by the Committee. Any action by any such Subcommittee or Executive
Officer within the scope of such delegation shall be deemed for all purposes to
have been taken by the Committee.
(e) Administration. The Committee may delegate the administration of the Plan to
an officer or officers of the Company, and such administrator(s) may have the
authority to directly, or under their supervision, execute and distribute
agreements or other documents evidencing or relating to Awards granted by the
Committee under this Plan, to maintain records relating to the grant, vesting,
exercise, forfeiture or expiration of Awards, to process or oversee the issuance
of Shares upon the exercise, vesting and/or settlement of an Award, to interpret
the terms of Awards and to take such other actions as the Committee may specify.
Any action by any such administrator within the scope of its delegation shall be
deemed for all purposes to have been taken by the Committee and references in
this Plan to the Committee shall include any such administrator, provided that
the actions and interpretations of any such administrator shall be subject to
review and approval, disapproval or modification by the Committee.
Section 4. Shares Subject to the Plan.
(a) Reservation of Shares. Subject to the provisions of Sections 5 of the Plan,
the number of shares authorized for issuance under the Plan pursuant to Awards
granted on or after September 30, 2012 shall be 139,224,716 (as adjusted to
reflect the 2-for-1 forward stock split effective on April 9, 2015) plus any
shares that on September 30, 2012 are subject to outstanding awards under the
Plan or the Prior Plans that after such date cease to be subject to such awards
for any reason other than such awards having been exercised. Subject to the
provisions of Sections 5 of the Plan, the maximum aggregate number of Shares
(adjusted, proportionately, in the event of any stock split or stock dividend
with respect to the Shares) which may be granted as Incentive Stock Options
under the Plan shall not exceed 139,224,716. The aggregate number of Shares
available for issuance under the Plan will be reduced by 2.1 Shares for each
Share delivered in settlement of any award of Restricted Stock or Restricted
Stock Unit and one Share for each Share delivered in settlement of an Option or
a SAR. If an Award expires, is forfeited, is settled in cash or becomes
unexercisable for any reason without having been exercised in full, the
undelivered Shares which were subject thereto shall, unless the Plan shall have
been terminated, become available for future Awards under the Plan.
Notwithstanding the foregoing, Shares subject to an Award under this Plan may
not again be made available for issuance under this Plan if such Shares are:
(i) shares that were subject to a stock-settled SAR and were not issued upon the
net settlement or net exercise of such SAR, (ii) shares used to pay the exercise
price of an Option, (iii) shares delivered to or withheld by the Company to pay
the withholding taxes related to an Option or a Stock Appreciation Right, or
(iv) shares repurchased on the open market with the proceeds of an Option
exercise. Shares available for issuance under the Plan shall be increased by any
shares of Common Stock subject to outstanding awards under the Prior Plans on
the date of shareholder approval of the Plan that later cease to be subject to
such awards for any reason other than such awards having been exercised, subject
to adjustment from time to time as provided in Section 5, which shares of Common
Stock shall, as of the date such shares cease to be subject to such awards,
cease to be available for grant and issuance under the Prior Plans, but shall be
available for issuance under the Plan. Any

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Shares that become available for grant pursuant to this Section 4(a) shall be
added back as one Share if such shares were subject to Options or SARs granted
under this Plan or options or stock appreciation rights granted under a Former
Plan, and as 2.1 Shares if such shares were subject to Awards other than Options
or SARs granted under this Plan or subject to awards other than options or stock
appreciation rights granted under a Former Plan. The Shares may be authorized
but unissued, or reacquired shares of Common Stock.
(b) Time of Granting Awards. The date of grant of an Award shall, for all
purposes, be the date on which the Company completes the corporate action
relating to the grant of such Award and all conditions to the grant have been
satisfied, provided that conditions to the exercise of an Award shall not defer
the date of grant. Notice of a grant shall be given to each Participant to whom
an Award is so granted within a reasonable time after the determination has been
made.
(c) Securities Law Compliance. Shares shall not be issued pursuant to the
exercise of an Award unless the exercise of such Award and the issuance and
delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated under either
such Act, and the requirements of any stock exchange or quotation system upon
which the Shares may then be listed or quoted, and shall be further subject to
the approval of counsel for the Company with respect to such compliance.
(d) Substitutions and Assumptions. The Board or the Committee shall have the
right to substitute or assume Awards in connection with mergers,
reorganizations, separations, or other transactions to which Section 424(a) of
the Code applies, provided such substitutions and assumptions are permitted by
Section 424 of the Code and the regulations promulgated thereunder. The number
of Shares reserved pursuant to Section 4(a) may be increased by the
corresponding number of Awards assumed and, in the case of a substitution, by
the net increase in the number of Shares subject to Awards before and after the
substitution.
Section 5. Adjustments to Shares Subject to the Plan. If any change is made to
the Shares by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Shares as a class without the Company’s receipt of consideration,
appropriate adjustments shall be made to (i) the maximum number and/or class of
securities issuable under the Plan, (ii) the number and/or class of securities
and/or the price per Share covered by outstanding Awards under the Plan,
(iii) the Maximum Annual Participant Award, and (iv) the maximum number of
Shares that can be granted as Incentive Stock Options under the Plan. The
Committee may also make adjustments described in (i)-(iv) of the previous
sentence in the event of any distribution of assets to shareholders other than a
normal cash dividend. In determining adjustments to be made under this
Section 5, the Committee may take into account such factors as it deems
appropriate, including the restrictions of applicable law and the potential tax
consequences of an adjustment, and in light of such factors may make adjustments
that are not uniform or proportionate among outstanding Awards. Adjustments, if
any, and any determinations or interpretations, including any determination of
whether a distribution is other than a normal cash dividend, made by the
Committee shall be final, binding and conclusive. For purposes of this
Section 5, conversion of any convertible securities of the Company shall not be
deemed to have been “effected without receipt of consideration.”
Except as expressly provided herein, no issuance by the Company of shares of any
class, or securities convertible into shares of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of Shares subject to an Award.
PART II
TERMS APPLICABLE TO ALL AWARDS
Section 6. General Eligibility.
(a) Awards. Awards may be granted to Participants who are Partners, Directors or
Consultants; provided however that Incentive Stock Options may only be granted
to Partners.
(b) Maximum Annual Participant Award. Subject to adjustment pursuant to
Section 5, the aggregate number of Shares with respect to which an Award or
Awards may be granted to any one Participant in any one taxable year of the
Company (the “Maximum Annual Participant Award”) shall not exceed 10,000,000
shares of Common Stock. If an Option is in tandem with a SAR, such that the
exercise of the Option or SAR with respect to a Share cancels

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the tandem SAR or Option right, respectively, with respect to each Share, the
tandem Option and SAR rights with respect to each Share shall be counted as
covering but one Share for purposes of the Maximum Annual Participant Award.
(c) No Employment/Service Rights. Nothing in the Plan shall confer upon any
Participant the right to an Award or to continue in service as a Partner or
Consultant for any period of specific duration, or interfere with or otherwise
restrict in any way the rights of the Company (or any Subsidiary employing or
retaining such person), or of any Participant, which rights are hereby expressly
reserved by each, to terminate such person’s services at any time for any
reason, with or without cause.
Section 7. Procedure for Exercise of Awards; Rights as a Shareholder.
(a) Procedure. An Award shall be exercised when written, electronic or verbal
notice of exercise has been given to the Company, or the brokerage firm or firms
approved by the Company to facilitate exercises and sales under this Plan, in
accordance with the terms of the Award by the person entitled to exercise the
Award and full payment for the Shares with respect to which the Award is
exercised has been received by the Company or the brokerage firm or firms, as
applicable. The notification to the brokerage firm shall be made in accordance
with procedures of such brokerage firm approved by the Company. Full payment
may, as authorized by the Committee, consist of any consideration and method of
payment allowable under Section 7(b) of the Plan. The Company shall issue (or
cause to be issued) such share certificate promptly upon exercise of the Award.
In the event that the exercise of an Award is treated in part as the exercise of
an Incentive Stock Option and in part as the exercise of a Nonqualified Stock
Option pursuant to Section 10(a), the Company shall issue a share certificate
evidencing the Shares treated as acquired upon the exercise of an Incentive
Stock Option and a separate share certificate evidencing the Shares treated as
acquired upon the exercise of a Nonqualified Stock Option, and shall identify
each such certificate accordingly in its share transfer records. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the share certificate is issued, except as provided in Section 5 of the
Plan.
(b) Method of Payment. The consideration to be paid for any Shares to be issued
upon exercise or other required settlement of an Award, including the method of
payment, shall be determined by the Committee and which forms may include:
(i) with respect to an Option, a request that the Company or the designated
brokerage firm conduct a cashless exercise of the Option; (ii) cash;
(iii) tender of shares of Common Stock owned by the Participant; and
(iv) withholding of shares of Common Stock that otherwise would be issued upon
exercise or settlement of the Award, in each case, in accordance with rules
established by the Committee from time to time. Shares used to pay the exercise
price shall be valued at their Fair Market Value on the exercise date.
(c) Withholding Obligations. To the extent required by applicable federal,
state, local or foreign law, the Committee may and/or a Participant shall make
arrangements satisfactory to the Company for the satisfaction of any withholding
tax obligations that arise with respect to any Incentive Stock Option,
Nonqualified Stock Option, SAR, Restricted Stock or Restricted Stock Units, or
any sale of Shares. The Company shall not be required to issue Shares or to
recognize the disposition of such Shares until such obligations are satisfied.
These obligations may be satisfied by having the Company withhold a portion of
the Shares that otherwise would be issued to a Participant under such Award or
by tendering Shares previously acquired by the Participant in accordance with
rules established by the Committee from time to time. The value of the Shares so
withheld or tendered may not exceed the employer’s minimum required tax
withholding rate.
(d) Shareholder Rights. Except as otherwise provided in this Plan, until the
issuance (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company) of the share certificate
evidencing such Shares, no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Shares subject to the
Award, notwithstanding the exercise of the Award.
(e) Non-Transferability of Awards. An Award may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in exchange for consideration, except
that an Award may be transferred by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Participant, only
by the Participant; unless the Committee permits further transferability, on a
general or specific basis, in which case the Committee may impose conditions and
limitations on any permitted transferability.

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Section 8. Expiration of Awards.
(a) Expiration, Termination or Forfeiture of Awards. Unless otherwise provided
in this Plan or in the applicable Award Agreement or any severance or employment
agreement, unvested Awards granted under this Plan shall expire, terminate, or
otherwise be forfeited immediately upon termination of a Participant’s Active
Status for any reason, and vested Awards granted under this Plan shall expire,
terminate, or otherwise be forfeited as follows:
(i) three (3) months after the date the Company delivers a notice of termination
of Active Status for a Participant other than a Non-Employee Director, other
than in circumstances covered by (ii), (iii), (iv) or (v) below; or thirty-six
(36) months after the date a Non-Employee Director ceases to be a Director,
other than in circumstances covered by (ii) and (iv) below;
(ii) immediately upon termination of a Participant’s Active Status for
Misconduct;
(iii) twelve (12) months after the date on which a Participant other than a
Non-Employee Director ceased performing services as a result of his or her total
and permanent Disability;
(iv) twelve (12) months after the date of the death of a Participant whose
Active Status terminated as a result of his or her death; and
(v) thirty-six (36) months after the date on which the Participant ceased
performing services as a result of Retirement.
(b) Extension of Term. Notwithstanding subsection (a) above, the Committee shall
have the authority to extend the expiration date of any outstanding Option,
other than an Incentive Stock Option, or SAR in circumstances in which it deems
such action to be appropriate (provided that no such extension shall extend the
term of an Option or SAR beyond the date on which the Option or SAR would have
expired if no termination of the Partner’s Active Status had occurred).
Section 9. Effect of Change of Control. Notwithstanding any other provision in
the Plan to the contrary, the following provisions shall apply unless otherwise
provided in the most recently executed agreement between the Participant and the
Company, or specifically prohibited under applicable laws, or by the rules and
regulations of any applicable governmental agencies or national securities
exchanges or quotation systems.
(a) Acceleration. Awards of a Participant shall be Accelerated (as defined in
Section 9(b) below) as follows:
(i) With respect to Non-Employee Directors, upon the occurrence of a Change of
Control;
(ii) With respect to any Partner, upon the occurrence of a Change of Control
described in Section 2(g)(i);
(iii) With respect to any Partner who Resigns for Good Reason or whose Active
Status is terminated within one year after a Change of Control described in
Section 2(g)(ii) or (iii);
(iv) With respect to any Partner, upon the occurrence of a Change of Control
described in Section 2(g)(iv) in connection with which each Award is not assumed
or an equivalent award substituted by such successor entity or a parent or
subsidiary of such successor entity; and
(v) With respect to any Partner who Resigns for Good Reason or whose Active
Status is terminated within one year after a Change of Control described in
Section 2(g)(iv) in connection with which each Award is assumed or an equivalent
award substituted by the successor entity or a parent or subsidiary of such
successor entity.
(b) Definition. For purposes of this Section 9, Awards of a Participant being
“Accelerated” means, with respect to such Participant:
(i) any and all Options and SARs shall become fully vested and immediately
exercisable, and shall remain exercisable throughout their entire term;
(ii) any restriction periods and restrictions imposed on Restricted Stock or
Restricted Stock Units that are not performance-based shall lapse;

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(iii) any restriction periods and restrictions imposed on Restricted Stock or
Restricted Stock Units that are performance-based (and for which the performance
period has not yet been completed) shall lapse, with such performance-based
criteria deemed achieved at the target level specified in the Award Agreement;
and
(iv) the restrictions and deferral limitations and other conditions applicable
to any other Awards shall lapse, and such other Awards shall become free of all
restrictions, limitations or conditions and become fully vested and transferable
to the full extent of the original grant.
PART III
SPECIFIC TERMS APPLICABLE TO OPTIONS, STOCK AWARDS AND SARS
Section 10. Grant, Terms and Conditions of Options.
(a) Designation. Each Option shall be designated in an Award Agreement as either
an Incentive Stock Option or a Nonqualified Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Partner during any calendar
year (under all plans of the Company) exceeds $100,000, such excess Options
shall be treated as Nonqualified Stock Options. Options shall be taken into
account in the order in which they were granted.
(b) Terms of Options. The term of each Incentive Stock Option shall be no more
than ten (10) years from the date of grant. However, in the case of an Incentive
Stock Option granted to a Participant who, at the time the Option is granted,
owns Shares representing more than ten percent (10%) of the voting power of all
classes of shares of the Company or any Parent or Subsidiary, the term of the
Option shall be no more than five (5) years from the date of grant. The term of
all Nonqualified Stock Options shall be no more than ten (10) years from the
date of grant.
(c) Option Exercise Prices.
(i) The per Share exercise price under an Incentive Stock Option shall be as
follows:
(A) If granted to a Partner who, at the time of the grant of such Incentive
Stock Option, owns shares representing more than ten percent (10%) of the voting
power of all classes of shares of the Company or any Parent or Subsidiary, the
per Share exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of grant.
(B) If granted to any other Partner, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the date of grant.
(ii) The per Share exercise price under a Nonqualified Stock Option or SAR shall
be no less than one hundred percent (100%) of the Fair Market Value per Share on
the date of grant.
(iii) In no event shall the Board or the Committee be permitted to Reprice an
Option after the date of grant without shareholder approval.
(d) Vesting. Unless otherwise provided in the applicable Award Agreement or any
written severance or employment agreement between the Company and the Optionee,
to the extent Options vest and become exercisable in increments, such Options
shall cease vesting as of the date of the Optionee’s Disability or termination
of such Optionee’s Active Status (or, for Directors, as of the date the Director
ceases to serve as a Director) for reasons other than Retirement or death, and,
in case of such Optionee’s termination of Active Status (or, for Directors, the
Director’s ceasing to serve as a Director) due to Retirement or death, such
Options shall become fully vested and immediately exercisable.
(e) Substitution of SARs for Options. Notwithstanding anything in this Plan to
the contrary, if the Company is required to or elects to record as an expense in
its consolidated statements of earnings the cost of Options pursuant to ASC 718
or a similar accounting requirement, the Committee shall have the sole
discretion to substitute, without receiving Participants’ permission, SARs paid
only in stock for outstanding Options; provided, the terms of the substituted
SARs are the same as the terms of the Options, the number of shares underlying
the number of SARs equals the number of shares underlying the Options and the
difference between the Fair Market Value of the underlying Shares and the grant
price of the SARs is equivalent to the difference between the Fair Market Value
of the underlying shares and the exercise price of the Options.

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(f) Exercise. Any Option granted hereunder shall be exercisable at such times
and under such conditions as determined by the Committee at the time of grant,
and as are permissible under the terms of the Plan. An Option may not be
exercised for a fraction of a Share.

(g) One-Time Option Exchange Offer. Notwithstanding any other provision of the
Plan to the contrary, upon approval of the Company’s shareholders, the Committee
may provide for, and the Company may implement, a one-time-only option exchange
offer, pursuant to which certain outstanding Options could, at the election of
the person holding such Option, be tendered to the Company for cancellation in
exchange for the issuance of a lesser amount of Options with a lower exercise
price, provided that such one-time-only option exchange offer is commenced
within six months of the date of such shareholder approval.
Section 11. Grant, Terms and Conditions of Stock Awards.
(a) Designation. Restricted Stock or Restricted Stock Units may be granted
either alone, in addition to, or in tandem with other Awards granted under the
Plan. Restricted Stock or Restricted Stock Units may include dividend or
dividend equivalent rights, as may be specified in the Award Agreement;
provided, however, that dividends or dividend equivalent rights shall not be
paid currently with respect to any Shares underlying awards of Restricted Stock
or Restricted Stock Units that vest or are earned on the basis of Performance
Criteria, except to the extent that such Shares are earned. After the Committee
determines that it will offer Restricted Stock or Restricted Stock Units, it
will advise the Participant in writing or electronically, by means of an Award
Agreement, of the terms, conditions and restrictions, including vesting, if any,
related to the offer, including the number of Shares that the Participant shall
be entitled to receive or purchase, the price to be paid, if any, and, if
applicable, the time within which the Participant must accept the offer. The
offer shall be accepted by execution of an Award Agreement or as otherwise
directed by the Committee. Payment, if any, of Restricted Stock and Restricted
Stock Units may be made as permitted by Section 7(b). Restricted Stock Units can
be settled in Shares valued at Fair Market Value on the settlement date, in
cash, or partly in Shares and partly in cash, as the Committee shall deem
appropriate. The term of each award of Restricted Stock or Restricted Stock
Units shall be at the discretion of the Committee.
(b) Performance Criteria. Restricted Stock and Restricted Stock Units granted
pursuant to the Plan that are intended to qualify as “performance based
compensation” under Section 162(m) of the Code shall be subject to the
attainment of performance goals relating to the Performance Criteria selected by
the Committee and specified at the time such Restricted Stock and Restricted
Stock Units are granted. For purposes of this Plan, “Performance Criteria” means
one or more of the following (as selected by the Committee): (i) cash flow;
(ii) earnings per share, as adjusted for any stock split, stock dividend or
other recapitalization; (iii) earnings measures; (iv) return on equity;
(v) total shareholder return; (vi) share price performance, as adjusted for any
stock split, stock dividend or other recapitalization; (vii) return on capital;
(viii) revenue; (ix) income; (x) profit margin; (xi) return on operating
revenue; (xii) brand recognition/acceptance; (xiii) customer satisfaction;
(xiv) productivity; (xv) expense targets; (xvi) market share; (xvii) cost
control measures; (xiii) inventory turns or cycle time; (xix) balance sheet
metrics; or (xx) strategic initiatives; provided, however, that “Performance
Criteria” shall include any derivations of these Performance Criteria (e.g.,
income shall include pre-tax income, net income, operating income, etc.). Any of
these Performance Criteria may be used to measure the performance of the Company
as a whole or any business unit or division of the Company. Performance Criteria
may be stated in absolute terms or relative to comparison companies or indices
to be achieved during a period of time.
The Committee may provide, at the time it establishes performance goals for any
award, that any evaluation of performance shall include or exclude any one or
more of the following events that occurs during a performance period:
(i) significant acquisitions or dispositions of businesses or assets by the
Company, (ii) litigation or claim judgments or settlements; (iii) the effect of
changes in tax laws, accounting principles, or other laws or provisions
affecting reported results; (iv) any reorganization and restructuring programs;
(v) extraordinary items as described in Accounting Standards Codification
section 225-20-20; (vi) significant, non-recurring charges or credits; and
(vii) foreign exchange rates. To the extent such inclusions or exclusions affect
Awards to Covered Employees, they shall be prescribed in a form that satisfies
the requirements for “performance-based compensation” within the meaning of
Section 162(m)(4)(C) of the Code, or any successor provision thereto.
(c) Vesting. Unless the Committee determines otherwise, the Award Agreement
shall provide for the forfeiture of the non-vested Shares underlying Restricted
Stock or Restricted Stock Units upon the termination of a Participant’s Active
Status. To the extent that the Participant purchased the Shares granted under
such Restricted

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Stock or Restricted Stock Units and any such Shares remain non-vested at the
time the Participant’s Active Status terminates, the termination of Active
Status shall cause an immediate sale of such non-vested Shares to the Company at
the original price per Share paid by the Participant.
(d) Plan Minimum Vesting or Issuance Requirements. Subject to the exceptions in
Section 11(e), all Restricted Stock or Restricted Stock Units granted to
Executive Officers that are subject to vesting or issuance solely based on such
Participant’s continuing in Active Status may not vest in full or be issued
earlier (except if accelerated pursuant to (A) Change of Control as described in
Section 9 (including vesting acceleration in connection with employment
termination following such event), (B) the death of the Participant, (C) the
Disability of the Participant, or (D) the Participant’s Retirement) than the
three-year anniversary of the grant date, and all Restricted Stock or Restricted
Stock Units granted to Executive Officers that are subject to vesting or
issuance based in whole or in part on performance conditions and/or the level of
achievement versus such performance conditions shall be subject to a performance
period of not less than one year.
(e) Exception to Plan Minimum Vesting or Issuance Requirements.
(i) Restricted Stock or Restricted Stock Units that result in issuing up to 5%
of the maximum aggregate number of Shares authorized for issuance under the Plan
(the “5% Limit”) may be granted to any one or more Executive Officers without
respect to the Plan Minimum Vesting or Issuance Requirements.
(ii) All Restricted Stock or Restricted Stock Units granted to Executive
Officers that have their vesting or issuance discretionarily accelerated, other
than pursuant to (A) Change of Control as described in Section 9 (including
vesting acceleration in connection with employment termination following such
event), (B) the death of the Participant, (C) the Disability of the Participant,
or (D) the Participant’s Retirement, are subject to the 5% Limit.
(iii) Notwithstanding the foregoing, the Committee may accelerate the vesting of
Restricted Stock or Restricted Stock Units such that the Plan Minimum Vesting
Requirements are still satisfied, without such vesting acceleration counting
toward the 5% Limit.
(iv) The 5% Limit applies in the aggregate to Restricted Stock or Restricted
Stock Unit grants that do not satisfy Plan Minimum Vesting or Issuance
Requirements and to the discretionary acceleration of Awards.
Section 12. Grant, Terms and Conditions of SARs.
(a) Grants. The Committee shall have the full power and authority, exercisable
in its sole discretion, to grant SARs to selected Participants. The Committee is
authorized to grant both tandem stock appreciation rights, consisting of SARs
with underlying Options (“Tandem SARs”), and stand-alone stock appreciation
rights (“Stand-Alone SARs”) as described below. The terms of SARs shall be at
the discretion of the Committee. In no event shall the Board or the Committee be
permitted to Reprice a SAR after the date of grant without shareholder approval.
(b)
Tandem SARs.

(i) Participants may be granted a Tandem SAR, exercisable upon such terms and
conditions as the Committee shall establish, to elect between the exercise of
the underlying Option for Shares or the surrender of the Option in exchange for
a distribution from the Company in an amount equal to the excess of (A) the Fair
Market Value (on the Option surrender date) of the number of Shares in which the
Participant is at the time vested under the surrendered Option (or surrendered
portion thereof) over (B) the aggregate exercise price payable for such vested
Shares.
(ii) No such Option surrender shall be effective unless it is approved by the
Committee, either at the time of the actual Option surrender or at any earlier
time. If the surrender is so approved, then the distributions to which the
Participant shall become entitled under this Section 12(b) may be made in Shares
valued at Fair Market Value (on the Option surrender date), in cash, or partly
in Shares and partly in cash, as the Committee shall deem appropriate.
(iii) If the surrender of an Option is not approved by the Committee, then the
Participant shall retain whatever rights he or she had under the surrendered
Option (or surrendered portion thereof) on the Option surrender date and may
exercise such rights at any time prior to the later of (A) five (5) business
days after the receipt of the rejection notice or (B) the last day on which the
Option is otherwise exercisable in accordance with the terms of the

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instrument evidencing such Option, but in no event may such rights be exercised
more than ten (10) years after the date of the Option grant.
(c) Stand-Alone SARs.
(i) A Participant may be granted a Stand-Alone SAR not tied to any underlying
Option under Section 10 of the Plan. The Stand-Alone SAR shall cover a specified
number of Shares and shall be exercisable upon such terms and conditions as the
Committee shall establish. Upon exercise of the Stand-Alone SAR, the holder
shall be entitled to receive a distribution from the Company in an amount equal
to the excess of (A) the aggregate Fair Market Value (on the exercise date) of
the Shares underlying the exercised right over (B) the aggregate base price in
effect for those Shares.
(ii) The number of Shares underlying each Stand-Alone SAR and the base price in
effect for those Shares shall be determined by the Committee at the time the
Stand-Alone SAR is granted. In no event, however, may the base price per Share
be less than the Fair Market Value per underlying Share on the grant date.
(iii) The distribution with respect to an exercised Stand-Alone SAR may be made
in Shares valued at Fair Market Value on the exercise date, in cash, or partly
in Shares and partly in cash, as the Committee shall deem appropriate.
(iv) The term of all Stand-Alone SARs shall be no more than ten (10) years from
the date of grant.
(d) Exercised SARs. The Shares issued in settlement of any SARs exercised under
this Section 12, and the Shares underlying any exercised SARs that were not
issued in settlement of the SAR, shall not be available for subsequent issuance
under the Plan.
PART IV
TERM OF PLAN AND SHAREHOLDER APPROVAL
Section 13. Term of Plan. The Plan was originally effective as of the Original
Effective Date. It shall continue in effect until the tenth anniversary of the
Restated Effective Date or until terminated under Section 14 of the Plan or
extended by an amendment approved by the shareholders of the Company pursuant to
Section 14(a).
Section 14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board or the Committee may amend or terminate
the Plan from time to time in such respects as the Board may deem advisable
(including, but not limited to amendments which the Board deems appropriate to
enhance the Company’s ability to claim deductions related to stock option
exercises); provided that to the extent required by the Code or the rules of
Nasdaq or the SEC, shareholder approval shall be required for any amendment of
the Plan. Subject to the foregoing, it is specifically intended that the Board
or Committee may amend the Plan without shareholder approval to comply with
legal, regulatory and listing requirements and to avoid unanticipated
consequences deemed by the Committee to be inconsistent with the purpose of the
Plan or any Award Agreement.
(b) Participants in Foreign Countries. The Committee shall have the authority to
adopt such modifications, procedures, and sub-plans as may be necessary or
desirable to comply with provisions of the laws of foreign countries in which
the Company or its Subsidiaries may operate to assure the viability of the
benefits from Awards granted to Participants performing services in such
countries and to meet the objectives of the Plan.
(c) Effect of Amendment or Termination. Any amendment or termination of the Plan
shall not impair the rights of holders of Awards and such Awards shall remain in
full force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Participant and the Committee, which
agreement must be in writing and signed by the Participant and the Company.
Section 15. Shareholder Approval. The effectiveness of the Plan is subject to
approval by the shareholders of the Company in accordance with applicable Nasdaq
rules.

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PART V
OTHER PROVISIONS
Section 16. No Liability of Company. The Company and any Subsidiary that is in
existence or hereafter comes into existence shall not be liable to a Participant
or any other person as to: (i) the non-issuance or sale of Shares as to which
the Company has been unable to obtain from any regulatory body having
jurisdiction the authority deemed by the Company’s counsel to be necessary to
the lawful issuance and sale of any Shares hereunder; and (ii) any tax
consequence expected, but not realized, by any Participant or other person due
to the receipt, exercise or settlement of any Award granted hereunder.
Section 17. Non-Exclusivity of Plan. Neither the adoption of this Plan by the
Board nor the submission of this Plan to the shareholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board or the Committee to adopt such other incentive arrangements as either may
deem desirable, including without limitation, the granting of Restricted Stock,
Restricted Stock Units, or Options otherwise than under this Plan or an
arrangement not intended to qualify under Code Section 162(m), and such
arrangements may be either generally applicable or applicable only in specific
cases.
Section 18. Governing Law. This Plan and any agreements or other documents
hereunder shall be interpreted and construed in accordance with the laws of the
state of Washington and applicable federal law. Any reference in this Plan or in
the agreement or other document evidencing any Award to a provision of law or to
a rule or regulation shall be deemed to include any successor law, rule or
regulation of similar effect or applicability.
 

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