Exhibit 10.1

HENRY SCHEIN, INC.

2020 STOCK INCENTIVE PLAN

As Amended and Restated Effective as of May 21, 2020

 

1.

Purposes of the Plan

The purposes of this Henry Schein, Inc. 2020 Stock Incentive Plan, as amended
and restated effective as of May 21, 2020, are to enable HSI and its
Subsidiaries (each as defined herein) to attract, retain and motivate the Key
Employees and Consultants (each as defined herein) who are important to the
success and growth of the business of HSI and to create a long-term mutuality of
interest between the Key Employees and Consultants and the stockholders of HSI
by granting the Key Employees and Consultants options (which, in the case of Key
Employees, may be either incentive stock options (as defined herein) or
non-qualified stock options and, in the case of Consultants, shall be
non-qualified options) to purchase HSI Common Stock (as defined herein), Stock
Appreciation Rights (as defined herein), Restricted Stock (as defined herein)
and restricted stock units.

 

2.

Definitions

(a)          “Acquisition Event” means:

(i)          a merger or consolidation in which HSI is not the surviving entity,
excluding, solely with respect to Awards granted on or after the date of the
Company’s 2020 annual stockholders’ meeting, any such transaction pursuant to
which (A) all or substantially all of the individuals and entities who are the
beneficial owners, respectively, of the outstanding Shares and Outstanding HSI
Voting Securities immediately prior to such transaction will beneficially own,
directly or indirectly, more than 60% of, respectively, the outstanding common
securities of the Person resulting from such transaction and the combined voting
power of the outstanding voting securities of such Person entitled to vote
generally in the election of directors (or similar members of a governing body),
in substantially the same proportions as their ownership, immediately prior to
such transaction, of the outstanding Shares and Outstanding HSI Voting
Securities, as the case may be, (B) no Person (other than the Company, any
employee benefit plan (or related trust) of the Company or the Person resulting
from such transaction, and any Person beneficially owning, immediately prior to
such transaction, directly or indirectly, 33% or more of the outstanding Shares
or Outstanding HSI Voting Securities, as the case may be) will beneficially own,
directly or indirectly, 33% or more of, respectively, the outstanding common
securities of the Person resulting from such transaction or the combined voting
power of the then outstanding securities of such Person entitled to vote
generally in the election of directors (or similar members of a governing body)
and (C) individuals who were members of the Incumbent Board will constitute at
least a majority of the members of the board of directors (or an equivalent
governing body) of the Person resulting from such transaction; or

(ii)          any transaction that results in the acquisition of all or
substantially all of HSI’s outstanding Common Stock by a single person or entity
or by a group of persons and/or entities acting in concert, or the sale or
transfer of all or substantially all of HSI’s assets, excluding, solely with
respect to Awards granted on or after the date of the Company’s 2020 annual
stockholders’ meeting, in each case, such a sale or other disposition to a
Person with respect to which, following such sale or other disposition, (A) more
than 60% of, respectively, the then outstanding common securities of such Person
and the combined voting power of the then outstanding voting securities of such
Person entitled to vote generally in the election of directors (or similar
members of a governing body) will be then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the outstanding Shares and Outstanding
HSI Voting Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such
sale or other disposition, of the outstanding Shares and Outstanding HSI Voting
Securities, as the case may be, (B) no Person (other than the Company, any
employee benefit plan (or related trust) of the Company or such Person, and any
Person beneficially owning, immediately prior to such sale or other disposition,
directly or indirectly, 33% or more of the outstanding Shares or Outstanding HSI
Voting Securities, as the case may be) will beneficially

 

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own, directly or indirectly, 33% or more of, respectively, the then outstanding
common securities of such Person and the combined voting power of the then
outstanding voting securities of such Person entitled to vote generally in the
election of directors (or similar members of a governing body) and
(C) individuals who were members of the Incumbent Board will constitute at least
a majority of the members of the board of directors (or an equivalent governing
body) of such Person.

(b)          “Act” means the Securities Exchange Act of 1934, as amended and the
rules and regulations promulgated thereunder.

(c)          “Award” means any award under this Plan of any Option, Stock
Appreciation Rights, Restricted Stock or restricted stock units. All Awards
shall be evidenced by an Award Agreement.

(d)          “Award Agreement” means an Option Agreement or any other agreement
between HSI and a Participant or a grant letter issued by HSI evidencing the
terms and conditions of an Award. The Award Agreement is subject to the terms
and conditions of the Plan.

(e)          “Board” means the Board of Directors of HSI.

(f)          ”Cause” has the meaning set forth in Section 7(b).

(g)          “Change of Control” has the meaning set forth in Section 6(f).

(h)          “Code” means the Internal Revenue Code of 1986, as amended.

(i)          “Committee” means such committee (or subcommittee), if any,
appointed by the Board to administer the Plan, consisting of two or more
directors as may be appointed from time to time by the Board, each of whom shall
qualify as (i) a “non-employee director” within the meaning of Rule 16b-3
promulgated under the Act, (ii) an “independent director” (within the meaning of
Nasdaq Rule 5605(a)(2) or such other applicable stock exchange rule), and
(iii) solely to the extent necessary or advisable with respect to Awards
intended to be “performance-based compensation” under Prior 162(m), an “outside
director” as defined under Section 162(m) of the Code. If the Board does not
appoint a committee for this purpose, “Committee” means the Board.

(j)          “Common Stock” means the voting common stock of HSI, par value
$.01, any Common Stock into which the Common Stock may be converted and any
Common Stock resulting from any reclassification of the Common Stock.

(k)          “Company” means HSI and its Subsidiaries, any of whose Key
Employees or Consultants are Participants in the Plan, and their successors by
operation of law.

(l)          “Consultant” means any individual (or any wholly-owned corporate
alter ego of any individual) who provides key bona fide consulting or advisory
services to the Company, as determined by the Committee, which services are not
in connection with the offer and sale of securities in a capital-raising
transaction.

(m)          “Corporate Transaction” has the meaning set forth in
Section 6(f)(i).

(n)          “Disability” means a permanent and total disability, as determined
by the Committee in its sole discretion, provided that in no event shall any
disability that is not a permanent and total disability within the meaning of
Section 22(e)(3) of the Code be treated as a Disability. A Disability shall be
deemed to occur at the time of the determination by the Committee of the
Disability. Notwithstanding the foregoing, for Awards that are subject to
Section 409A of the Code, Disability shall mean that a Participant is disabled
under Section 409A(a)(2)(C)(i) or (ii) of the Code.

(o)          “Fair Market Value” means the value of a Share (as defined herein)
on a particular date, determined as follows:

 

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(i)          If the Common Stock is listed or admitted to trading on such date
on a national securities exchange or quoted through The Nasdaq Stock Market
(“Nasdaq”), the closing sales price of a Share as reported on the relevant
composite transaction tape, if applicable, or on the principal such exchange
(determined by trading value in the Common Stock) or through Nasdaq, as the case
may be, on such date, or in the absence of reported sales on such day, the mean
between the reported bid and asked prices reported on such composite transaction
tape or exchange or through Nasdaq, as the case may be, on such date; or

(ii)          If the Common Stock is not listed or quoted as described in the
preceding clause, but bid and asked prices are quoted through Nasdaq, the mean
between the bid and asked prices as quoted by Nasdaq on such date; or

(iii)          If the Common Stock is not listed or quoted on a national
securities exchange or through Nasdaq or, if pursuant to (i) and (ii) above the
Fair Market Value is to be determined based upon the mean of the bid and asked
prices and the Committee determines that such mean does not properly reflect the
Fair Market Value, by such other method as the Committee determines to be
reasonable and consistent with applicable law; or

(iv)          If the Common Stock is not publicly traded, such amount as is set
by the Committee in good faith taking into account Section 409A or 422 of the
Code, as applicable.

For purposes of the exercise of any Stock Appreciation Right, the applicable
date shall be the date a notice of exercise is received by the Committee or, if
not a day on which the applicable market is open, the next day that it is open.

(p)          ”Family Member” means, with respect to any Participant, any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law, including adoptive relationships, trusts for the exclusive
benefit of such individuals, and any other entity owned solely by such
individuals.

(q)          “HSI” means Henry Schein, Inc.

(r)          “Incentive Stock Option” means any Option which is intended to
qualify as an “incentive stock option” as defined in Section 422 of the Code.

(s)          “Incumbent Board” has the meaning set forth in Section 6(f)(ii).

(t)          “Key Employee” means any person who is an executive officer or
other valuable staff, managerial, professional or technical employee of the
Company, as determined by the Committee, including those individuals described
in Section 5(d)(iv). A Key Employee may, but need not, be an officer or director
(with the exception of a non-employee director) of the Company.

(u)          “Option” means the right to purchase one Share at a prescribed
Purchase Price on the terms specified in the Plan and the Option Agreement. An
Option may be an Incentive Stock Option or a non-qualified option.

(v)          “Option Agreement” means an Award Agreement evidencing an Option.

(w)          “Outstanding HSI Voting Securities” has the meaning set forth in
Section 6(f)(i).

(x)          “Participant” means a Key Employee or Consultant of the Company who
is granted Awards under the Plan.

(y)          “Performance Goal” means the performance goals described on
Exhibit A, attached hereto.

(z)          “Person” means an individual, entity or group within the meaning of
Section 13d-3 or 14d-1 of the Act.

 

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(aa)          “Plan” means the Henry Schein, Inc. 2020 Stock Incentive Plan, as
amended from time to time (formerly referred to as the Henry Schein, Inc. 2013
Stock Incentive Plan).

(bb)          “Prior 162(m)” means Section 162(m) of the Code, as in effect
prior to the enactment of the Tax Cuts and Jobs Act.

(cc)          “Purchase Price” means purchase price per Share.

(dd)          “Restricted Stock” means an award of Shares under this Plan that
is subject to Section 9.

(ee)           “Restriction Period” shall have the meaning set forth in
Section 9(a) with respect to Restricted Stock granted to Participants.

(ff)           “Securities Act” means the Securities Act of 1933, as amended.

(gg)          “Share” means a share of Common Stock.

(hh)          “Stock Appreciation Right” shall mean the right pursuant to an
Award granted under Section 8. A Tandem Stock Appreciation Right shall mean the
right to surrender to the Company all (or a portion) of an Option in exchange
for an amount in cash and/or Common Stock equal to the difference between
(i) the Fair Market Value on the date such Option (or such portion thereof) is
surrendered, of the Common Stock covered by such Option (or such portion
thereof), and (ii) the aggregate exercise price of such Option (or such portion
thereof). A Non-Tandem Stock Appreciation Right shall mean the right to receive
an amount in cash and/or Common Stock equal to the difference between (x) the
Fair Market Value of a share of Common Stock on the date such right is
exercised, and (y) the aggregate exercise price of such right.

(ii)          “Subsidiary” means each of the following: (i) any “subsidiary
corporation” within the meaning of Section 424(f) of the Code; (ii) any entity,
trade or business (including, without limitation, a partnership or limited
liability company) that is directly or indirectly controlled 50% or more
(whether by ownership of stock, assets or an equivalent ownership interest or
voting interest) by HSI or one of its Subsidiaries; and (iii) any other entity
in which HSI or any of its Subsidiaries has a material equity interest and which
is designated as a “Subsidiary” by resolution of the Committee; provided that,
unless otherwise determined by the Committee, the Common Stock subject to any
Award constitutes “service recipient stock” for purposes of Section 409A of the
Code or otherwise does not subject the Award to Section 409A of the Code. An
entity shall be deemed a Subsidiary of HSI only for such periods as the
requisite ownership relationship is maintained unless otherwise determined by
the Committee.

(jj)          “Substantial Stockholder” means any Participant who at the time of
grant owns directly or is deemed to own by reason of the attribution rules set
forth in Section 424(d) of the Code, Shares possessing more than 10% of the
total combined voting power of all classes of stock of HSI.

(kk)          “Termination of Employment” means termination of the relationship
with HSI and its Subsidiaries so that an individual is no longer an employee of
HSI or any of its Subsidiaries or unless otherwise determined by the Committee
in its sole discretion, consultant or director of HSI or any of its
Subsidiaries. In the event an entity shall cease to be a Subsidiary of HSI, any
individual who is not otherwise an employee of HSI or another Subsidiary of HSI
shall incur a Termination of Employment at the time the entity ceases to be a
Subsidiary. A Termination of Employment shall not include a leave of absence
approved for purposes of the Plan by the Committee.

(ll)          “Termination of Consultancy” means termination of the relationship
with HSI and its Subsidiaries so that an individual is no longer a Consultant of
HSI or any of its Subsidiaries. In the event an entity shall cease to be a
Subsidiary of HSI, any individual who is not otherwise a Consultant of HSI or
another Subsidiary of HSI shall incur a Termination of Consultancy at the time
the entity ceases to be a Subsidiary. In the event that a Consultant becomes a
Key Employee or a director of HSI or any of its Subsidiaries upon his
Termination of Consultancy, unless otherwise determined by the Committee in its
sole discretion, no Termination of Consultancy shall be deemed to occur until
such later time as such Consultant ceases to be a Key Employee, Consultant or
director of HSI or any of its

 

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Subsidiaries. A Termination of Consultancy shall not include a leave of absence
approved for purposes of the Plan by the Committee.

 

3.

Effective Date/Expiration of Plan

The Plan became as originally adopted effective as of September 30, 1994, and
was amended and restated effective as of June 6, 2001, April 1, 2003, April 1,
2004, March 27, 2007, May 14, 2013 and was subsequently amended. The Plan is
hereby renamed the Henry Schein, Inc. 2020 Stock Incentive Plan and is amended
and restated in the form set forth herein, effective upon the approval of the
amended and restated Plan by the stockholders of the Company in accordance with
the requirements of the laws of the State of Delaware at the Company’s 2020
annual stockholders’ meeting to be held on May 21, 2020. If stockholder approval
of the Plan is obtained, no Award shall be granted under the Plan on or after
March 31, 2030, but Awards previously granted may extend beyond that date.

 

4.

Administration

(a)          Duties of the Committee. The Plan shall be administered by the
Committee. The Committee shall have full authority to interpret the Plan and to
decide any questions and settle all controversies and disputes that may arise in
connection with the Plan; to establish, amend, and rescind rules for carrying
out the Plan; to administer the Plan, subject to its provisions; to select
Participants in, and grant Awards under, the Plan; to determine the terms,
exercise price and form of exercise payment for each Option granted under the
Plan; to determine which Options granted under the Plan to Key Employees shall
be Incentive Stock Options; to prescribe the form or forms of instruments
evidencing Awards and any other instruments required under the Plan (which need
not be uniform) and to change such forms from time to time; to determine the
terms and conditions, not inconsistent with the terms of the Plan, of any Award
granted hereunder (including, but not limited to, the exercise or Purchase Price
(if any), any restriction or limitation, any vesting schedule or acceleration
thereof, or any forfeiture restrictions or waiver thereof, regarding any Award
and the Shares relating thereto, based on such factors, if any, as the Committee
shall determine, in its sole discretion); to determine whether, to what extent
and under what circumstances grants of Options and other Awards under the Plan
are to operate on a tandem basis and/or in conjunction with or apart from other
awards made by the Company outside of the Plan; to determine whether, to what
extent and under what circumstances Shares and other amounts payable with
respect to an Award under the Plan shall be deferred either automatically or at
the election of the Participant in any case, subject to, and in accordance with,
Section 409A of the Code; and to make all other determinations and to take all
such steps in connection with the Plan and the Awards as the Committee, in its
sole discretion, deems necessary or desirable; provided, that all such
determinations shall be in accordance with the express provisions, if any,
contained in the Award Agreement and the Plan. The Committee shall not be bound
to any standards of uniformity or similarity of action, interpretation or
conduct in the discharge of its duties hereunder, regardless of the apparent
similarity of the matters coming before it. The determination, action or
conclusion of the Committee in connection with the foregoing shall be final,
binding and conclusive. The Committee shall also have authority to delegate its
responsibilities hereunder (to the extent permitted by applicable law). The
Committee may, in its sole discretion, correct any defect, supply any omission
or reconcile any inconsistency in the Plan or in any agreement relating thereto
in the manner and to the extent it shall deem necessary to effectuate the
purpose and intent of the Plan. The Committee may, in its sole discretion, adopt
special guidelines and provisions for persons who are residing in or employed
in, or subject to, the taxes of, any domestic or foreign jurisdictions to comply
with applicable tax and securities laws of such domestic or foreign
jurisdictions. The Plan is intended to comply with the applicable requirements
of Rule 16b-3 and with respect to Awards intended to be “performance-based,” the
applicable provisions of Prior 162(m), and the Plan shall be limited, construed
and interpreted in a manner so as to comply therewith.

(b)          Advisors. The Committee may designate the Secretary of HSI, other
employees of the Company or competent professional advisors to assist the
Committee in the administration of the Plan, and may grant authority to such
persons (other than professional advisors) to grant Awards and execute Award
Agreements (as defined herein) or other documents on behalf of the Committee;
provided, that no Participant may execute any Award Agreement granting Awards to
such Participant. The Committee may employ such legal counsel, consultants and
agents as it may deem desirable for the administration of the Plan, and may rely
upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent. Expenses incurred by the
Committee in the engagement of such counsel, consultant or agent shall be paid
by the Company.

 

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(c)          Indemnification. No officer, member or former member of the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Award granted under it. To the maximum extent
permitted by applicable law or the Certificate of Incorporation or By-Laws of
HSI and to the extent not covered by insurance, each officer, member or former
member of the Committee or of the Board shall be indemnified and held harmless
by HSI against any cost or expense (including reasonable fees of counsel
reasonably acceptable to HSI) or liability (including any sum paid in settlement
of a claim with the approval of HSI), and advanced amounts necessary to pay the
foregoing at the earliest time and to the fullest extent permitted, arising out
of any act or omission to act in connection with the Plan, except to the extent
arising out of such officer’s, member’s or former member’s own fraud or bad
faith. Such indemnification shall be in addition to any rights of
indemnification the officers, members or former members may have as directors
under applicable law or under the Certificate of Incorporation or By-Laws of HSI
or any Subsidiary of HSI.

(d)          Meetings of the Committee. The Committee shall select one of its
members as a Chairman and shall adopt such rules and regulations as it shall
deem appropriate concerning the holding of its meetings and the transaction of
its business. Any member of the Committee may be removed at any time either with
or without cause by resolution adopted by the Board, and any vacancy on the
Committee may at any time be filled by resolution adopted by the Board. All
determinations by the Committee shall be made by the affirmative vote of a
majority of its members. Any such determination may be made at a meeting duly
called and held at which a majority of the members of the Committee were in
attendance in person or through telephonic communication. Any determination set
forth in writing and signed by all of the members of the Committee shall be as
fully effective as if it had been made by a majority vote of the members at a
meeting duly called and held.

 

5.

Shares; Adjustment Upon Certain Events

(a)          Shares to be Delivered; Fractional Shares. Shares to be issued
under the Plan shall be made available at the discretion of the Board, either
from authorized but unissued Shares or from issued Shares reacquired by HSI and
held in treasury. No fractional Shares will be issued or transferred upon the
exercise or vesting of any Award and all fractional shares shall be rounded
down.

(b)          Number of Shares. Subject to adjustment as provided in this
Section 5, the maximum aggregate number of Shares that may be issued pursuant to
all Awards under the Plan shall be 70,942,657 Shares. The balance of the Shares
reserved for issuance under the Plan shall be covered by Options, Stock
Appreciation Rights and Restricted Stock (including restricted stock units). Any
Shares that have been or will be issued pursuant to Options or Stock
Appreciation Rights shall be counted against the foregoing limit as one Share
for every Share granted. Any Shares that are issued pursuant to Awards of
Restricted Stock (including restricted stock units) granted on or after the date
of the Company’s 2009 annual stockholders’ meeting shall be counted against the
foregoing limit as two Shares for every Share granted. If any Shares subject to
an Option or Stock Appreciation Right granted under this Plan are forfeited,
cancelled, exchanged or surrendered without having been exercised in full or
terminate or expire without a distribution of Shares to the Participant, the
number of Shares underlying any such unexercised Award shall again be available
for the purpose of granting Awards under the Plan as one Share for every Share
granted. If any Shares that were issued pursuant to Awards of Restricted Stock
(including restricted stock units) granted on or after the date of the Company’s
2009 annual stockholders’ meeting are forfeited for any reason, two Shares for
every Share granted shall again be available for the purpose of granting Awards
under the Plan. If a Tandem Stock Appreciation Right or a Limited Stock
Appreciation Right is granted in tandem with an Option, such grant shall only
apply once against the maximum number of shares of Common Stock which may be
issued under this Plan. Notwithstanding any other provision of the Plan to the
contrary, the number of Shares available for the purpose of granting Awards
under the Plan shall be reduced by (i) the total number of Options or Stock
Appreciation Rights exercised, regardless of whether any of the Shares
underlying such Awards are not actually issued to the Participant as the result
of a net settlement, (ii) any Shares used to pay any Purchase Price or tax
withholding obligation with respect to any Award and (iii) any Shares
repurchased by the Company on the open market with the proceeds of the Purchase
Price of an Option.

(c)          Individual Participant Limitations. The maximum number of Shares
subject to any Option and/or Stock Appreciation Right which may be granted under
this Plan to each Participant shall not exceed 500,000 Shares (subject to any
adjustment pursuant to Section 5(d)) during each fiscal year of HSI during the
entire term of the Plan. The maximum number of Shares subject to Awards of
Restricted Stock or restricted stock units which may be granted under the Plan
to each Participant shall not exceed 500,000 Shares (subject to any adjustment
pursuant to Section 5(d))

 

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during each fiscal year of HSI during the entire term of the Plan. To the extent
that Shares for which Awards are permitted to be granted to a Participant
pursuant to Section 5(c) during a fiscal year are not covered by a grant of an
Award to a Participant issued in such fiscal year, such Shares shall
automatically increase the number of Shares available for grant of Awards to
such Participant in the subsequent fiscal year during the term of the Plan.

(d)          Adjustments; Recapitalization, etc. The existence of the Plan and
the Awards granted hereunder shall not affect in any way the right or power of
the Board or the stockholders of HSI to make or authorize any adjustment,
recapitalization, reorganization or other change in HSI’s capital structure or
its business, any merger or consolidation of HSI, any issue of bonds,
debentures, preferred or prior preference stocks ahead of or affecting Common
Stock, the dissolution or liquidation of HSI or any of its Subsidiaries, or any
sale or transfer of all or part of its assets or business or any other corporate
act or proceeding. If and whenever HSI takes any such action, however, the
following provisions, to the extent applicable, shall govern:

(i)          If and whenever HSI shall effect a stock split, stock dividend,
subdivision, recapitalization or combination of Shares or other changes in HSI’s
Common Stock, (x) the Purchase Price (as defined herein) per Share and the
number and class of Shares and/or other securities with respect to which
outstanding Awards thereafter may be exercised or vested, and (y) the total
number and class of Shares and/or other securities that may be issued under this
Plan, shall be proportionately adjusted by the Committee. The Committee may also
make such other adjustments as it deems necessary to take into consideration any
other event (including, without limitation, accounting changes) if the Committee
determines that such adjustment is appropriate to avoid distortion in the
operation of the Plan.

(ii)          Subject to Section 5(d)(iii), if HSI merges or consolidates with
one or more corporations, then from and after the effective date of such merger
or consolidation, upon exercise or vesting of Awards theretofore granted, the
Participant shall be entitled to purchase or receive under such Awards, in lieu
of the number of Shares as to which such Awards shall then be exercisable or
vested but on the same terms and conditions applicable to such Awards, the
number and class of Shares and/or other securities or property (including cash)
to which the Participant would have been entitled pursuant to the terms of the
agreement of merger or consolidation if, immediately prior to such merger or
consolidation, the Participant had been the holder of record of the total number
of Shares receivable upon exercise or vesting of such Awards (whether or not
then exercisable or vested).

(iii)          In the event of an Acquisition Event, if the successor does not
assume or substitute outstanding Awards on a substantially equivalent basis as
provided in Section 5(d)(ii), the Committee may, in its discretion, and without
any liability to any Participant, terminate all outstanding Awards as of the
consummation of the Acquisition Event and (i) with respect to Awards other than
Options and Stock Appreciation Rights, make payment to the Participant for such
Award (whether vested or unvested) following such Acquisition Event, and
(ii) with respect to Options and Stock Appreciation Rights, deliver notice of
termination to each Participant at least 20 days prior to the date of
consummation of the Acquisition Event; provided that, during the period from the
date on which such notice of termination is delivered to the consummation of the
Acquisition Event, each Participant shall have the right to exercise in full all
of the Options and Stock Appreciation Rights that are then outstanding (without
regard to limitations on exercise otherwise contained in the Options and Stock
Appreciation Rights), but any such exercise shall be contingent on the
consummation of the Acquisition Event, and provided that, if the Acquisition
Event does not occur within a specified period after giving such notice for any
reason whatsoever, the notice and exercise pursuant thereto shall be null and
void. If an Acquisition Event occurs and the Committee does not terminate the
outstanding Awards pursuant to the preceding sentence, then the provisions of
Section 5(d)(ii) shall apply.

(iv)          Subject to Sections 5(b) and (c), the Committee may grant Awards
under the Plan in substitution for awards held by employees or consultants of
another corporation who concurrently become employees or consultants of the
Company as the result of a merger or consolidation of the employing or engaging
corporation with the Company, or as the result of the acquisition by the Company
of property or stock of the employing or engaging corporation. The Company may
direct that substitute awards be granted on such terms and conditions as the
Committee considers appropriate in the circumstances.

 

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(v)          If, as a result of any adjustment made pursuant to the preceding
paragraphs of this Section 5, any Participant shall become entitled upon
exercise or vesting of an Award to receive any securities other than Common
Stock, then the number and class of securities so receivable thereafter shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common Stock set
forth in this Section 5, as determined by the Committee in its discretion.

(vi)          Except as hereinbefore expressly provided, the issuance by HSI of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash, property, labor or services, upon direct sale, upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or other securities, and in any case whether or not for fair value, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number and class of Shares and/or other securities or property subject to
Awards theretofore granted or the Purchase Price per Share.

(e)          Early Vesting Share Limit. The Committee may, in its sole
discretion, grant Awards of Options, Stock Appreciation Rights, Restricted Stock
or restricted stock units on or after the date of the Company’s 2020 annual
stockholders’ meeting with a vesting schedule that provides for earlier vesting
or lapse of restrictions than the applicable minimum vesting and lapse of
restriction dates set forth under Section 6(d), 8(d)(ii) or 9(a), as applicable,
for up to an aggregate of five percent (5%) of the Shares that may be the
subject of Awards under the Plan pursuant to Section 5(b).

 

6.

Awards and Terms of Options

(a)           Grant. The Committee may grant Options to Key Employees and
Consultants of the Company. Notwithstanding the foregoing, Options intended to
be Incentive Stock Options shall be granted only to Key Employees of HSI or any
Subsidiary that constitutes a “subsidiary corporation” within the meaning of
Section 424(f) of the Code.

(b)          Exercise Price. The Purchase Price deliverable upon the exercise of
an Option shall be determined by the Committee, provided that, the Purchase
Price shall not be less than 100% (110% for an Incentive Stock Option granted to
a Substantial Stockholder) of the Fair Market Value per Share on the date the
Option is granted.

(c)          Number of Shares. The Option Agreement shall specify the number of
Options granted to the Participant, as determined by the Committee in its sole
discretion, subject to Section 5(c) hereof.

(d)          Exercisability. At the time of grant, the Committee shall specify
when and on what terms the Options granted shall be exercisable. In the case of
Options not immediately exercisable in full, the Committee may at any time
accelerate the time at which all or any part of the Options may be exercised and
may waive any other conditions to exercise, subject to the terms of the Option
Agreement and the Plan. No Option shall be exercisable after the expiration of
ten (10) years from the date of grant (five (5) years in the case of an
Incentive Stock Option granted to a Substantial Stockholder). Each Option shall
be subject to earlier termination as provided in Section 7 below.
Notwithstanding any other provision of the Plan to the contrary, effective on
the date of the Company’s 2020 annual stockholders’ meeting, the vesting
schedule with respect to any Award of Options shall be no less than one year
(with no Options subject thereto vesting prior to the first anniversary of the
date of grant); provided, that, subject to the terms of the Plan, the Committee
shall be authorized (at the time of grant or thereafter) to provide for the
earlier vesting in the event of a Change of Control or a Participant’s
retirement, death or Disability (“Permitted Events”) or to the extent permitted
under Section 5(e).

(e)          Special Rule for Incentive Options. If required by Section 422 of
the Code, to the extent the aggregate Fair Market Value of the Shares with
respect to which Incentive Stock Options are exercisable for the first time by a
Key Employee during any calendar year (under all plans of his or her employer
corporation and its parent and subsidiary corporations) exceeds $100,000, such
Options shall not be treated as Incentive Stock Options. Nothing in this special
rule shall be construed as limiting the exercisability of any Option, unless the
Committee expressly provides for such a limitation at time of grant. Any
Incentive Stock Option will not qualify as such, among other events (i) if the
Key Employee disposes of the Common Stock acquired pursuant to the Incentive
Stock Option at any time during the two (2) year period following the grant date
or the one (1) year period following the date on which the Incentive Stock
Option is exercised, or (ii) except in the event of the Key Employee’s death or
disability, as defined

 

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in Section 22(e)(3) of the Code, if the Key Employee is not employed by the HSI
or any Subsidiary that constitutes a “subsidiary corporation” within the meaning
of Section 424(f) of the Code at all times during the period beginning on the
grant date and ending three months before the date of exercise of the Incentive
Stock Option. To the extent that any Option does not qualify as an Incentive
Stock Option (whether because of its provisions or the time or manner of its
exercise or otherwise), it shall not affect the validity of the Option and such
Option or the portion thereof which does not qualify shall constitute a separate
non-qualified option.

(f)          Acceleration of Exercisability on Change of Control. Upon a Change
of Control (as defined herein) of HSI: (A) all Options granted prior to the date
of the Company’s 2013 annual stockholders’ meeting and not previously
exercisable shall become fully exercisable on the occurrence of a Change of
Control in accordance with the terms of the Plan as in effect prior to such
date; and (B) all Options granted on or after the date of the Company’s 2013
annual stockholders’ meeting and not previously exercisable shall become fully
exercisable upon a Participant’s Termination of Employment without Cause (as
defined in Section 7(b)) occurring on or after a Change of Control or upon such
other events specified in a written agreement between the Participant and the
Company. For this purpose, a “Change of Control” shall be deemed to have
occurred upon:

(i)          an acquisition by any Person of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Act) of 33% or more of either
(A) the then outstanding Shares or (B) the combined voting power of the then
outstanding voting securities of HSI entitled to vote generally in the election
of directors (the “Outstanding HSI Voting Securities”); excluding, however, the
following: (w) any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the Company,
(x) any acquisition by the Company, (y) any acquisition by an employee benefit
plan (or related trust) sponsored or maintained by the Company or (z) any
acquisition by any corporation pursuant to a reorganization, merger,
consolidation or similar corporate transaction (in each case, a “Corporate
Transaction”), if, pursuant to such Corporate Transaction, the conditions
described in clauses (A), (B) and (C) of paragraph (iii) of this Section 6(f)
are satisfied; or

(ii)          a change in the composition of the Board such that the individuals
who, as of April 1, 2003, constitute the Board (the Board as of the date hereof
shall be hereinafter referred to as the “Incumbent Board”) cease for any reason
to constitute at least a majority of the Board; provided that for purposes of
this Subsection any individual who becomes a member of the Board subsequent to
the date hereof whose election, or nomination for election by HSI’s
stockholders, was approved by a vote of at least a majority of those individuals
who are members of the Board and who are also members of the Incumbent Board (or
deemed to be such pursuant to this proviso) shall be considered as though such
individual were a member of the Incumbent Board; but, provided further, that any
such individual whose initial assumption of office occurs as a result of either
an actual or threatened election contest (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board shall not be so considered as a member of the Incumbent Board; or

(iii)          the consummation of a Corporate Transaction or, if consummation
of such Corporate Transaction is subject to the consent of any government or
governmental agency, the obtaining of such consent (either explicitly or
implicitly by consummation); excluding, however, such a Corporate Transaction
pursuant to which (A) all or substantially all of the individuals and entities
who are the beneficial owners, respectively, of the outstanding Shares and
Outstanding HSI Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 60% of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Corporate Transaction and the combined voting power of the
outstanding voting securities of such corporation entitled to vote generally in
the election of directors, in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of the outstanding
Shares and Outstanding HSI Voting Securities, as the case may be, (B) no Person
(other than the Company, any employee benefit plan (or related trust) of the
Company or the corporation resulting from such Corporate Transaction and any
Person beneficially owning, immediately prior to such Corporate Transaction,
directly or indirectly, 33% or more of the outstanding Shares or Outstanding HSI
Voting Securities, as the case may be) will beneficially own, directly or
indirectly, 33% or more of, respectively, the outstanding shares of common stock
of the corporation resulting from such

 

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Corporate Transaction or the combined voting power of the then outstanding
securities of such corporation entitled to vote generally in the election of
directors and (C) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of directors of the
corporation resulting from such Corporate Transaction; or

(iv)          the approval of the stockholders of HSI of (A) a complete
liquidation or dissolution of HSI or (B) the sale or other disposition of all or
substantially all of the assets of HSI, provided that, solely with respect to
Awards granted on or after the date of the Company’s 2020 annual stockholders’
meeting, such complete liquidation or dissolution or sale or other disposition
is consummated; excluding, however, such a sale or other disposition to a
corporation with respect to which, following such sale or other disposition,
(x) more than 60% of, respectively, the then outstanding shares of common stock
of such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors will be then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the outstanding Shares and Outstanding HSI Voting
Securities immediately prior to such sale or other disposition in substantially
the same proportion as their ownership, immediately prior to such sale or other
disposition, of the outstanding Shares and Outstanding HSI Voting Securities, as
the case may be, (y) no Person (other than the Company and any employee benefit
plan (or related trust) of the Company or such corporation and any Person
beneficially owning, immediately prior to such sale or other disposition,
directly or indirectly, 33% or more of the outstanding Shares or Outstanding HSI
Voting Securities, as the case may be) will beneficially own, directly or
indirectly, 33% or more of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election
of directors and (z) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of directors of such
corporation.

(g)          Exercise of Options.

(i)          A Participant may elect to exercise one or more Options by giving
written notice to the Committee at any time of such election and of the number
of Options such Participant has elected to exercise, accompanied by payment in
full of the aggregate Purchase Price for the number of shares for which the
Options are being exercised.

(ii)          Shares purchased pursuant to the exercise of Options shall be paid
for at the time of exercise as follows:

(A)          in cash or by check, bank draft or money order payable to the order
of HSI;

(B)          if so permitted by the Committee: (x) through the delivery of
unencumbered Shares (including Shares being acquired pursuant to the Options
then being exercised), provided such Shares (or such Options) have been owned by
the Participant for such period as may be required by applicable accounting
standards to avoid a charge to earnings, (y) through a combination of Shares and
cash as provided above, (z) to the extent permitted by applicable law, by
delivery of a promissory note of the Participant to HSI, such promissory note to
be payable on such terms as are specified in the Option Agreement (except that,
in lieu of a stated rate of interest, the Option Agreement may provide that the
rate of interest on the promissory note will be such rate as is sufficient, at
the time the note is given, to avoid the imputation of interest under the
applicable provisions of the Code), or by a combination of cash (or cash and
Shares) and the Participant’s promissory note; provided, that, if the Shares
delivered upon exercise of the Option is an original issue of authorized Shares,
at least so much of the exercise price as represents the par value of such
Shares shall be paid in cash or by a combination of cash and Shares; or

(C)          on such other terms and conditions as may be acceptable to the
Committee and in accordance with applicable law. Except as provided in
subsection (h) below, upon receipt of payment, HSI shall deliver to the
Participant as soon as practicable a certificate or certificates for the Shares
then purchased.

 

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(h)          Deferred Delivery of Common Stock. The Committee may, in its
discretion, permit Participants to defer delivery of Common Stock acquired
pursuant to a Participant’s exercise of an Option in accordance with the terms
and conditions established by the Committee, provided, however, that such
deferral shall be designed in a manner intended to comply with Section 409A of
the Code.

(i)          Repricings and Buyouts of Options Prohibited. Notwithstanding any
other provision of the Plan to the contrary, an outstanding Option may not be
modified to reduce the Purchase Price thereof nor may an Option be surrendered,
cancelled, converted, exchanged, replaced or bought out in exchange for cash,
another award or Option or Stock Appreciation Right with a Purchase Price that
is less than the Purchase Price of the Option (other than adjustments or
substitutions in accordance with Section 5(d) hereof), unless such action is
approved by the stockholders of the Company.

(j)          No Dividends or Dividend Equivalents. Until the shares of Common
Stock are issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends (except as provided in Section 5(d)) or any other rights as
a stockholder will exist with respect to the shares of Common Stock subject to
an Option, notwithstanding the exercise of the Option. Subject to the terms of
the Plan, including, without limitation, Section 18, the Company will issue (or
cause to be issued) such shares of Common Stock promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the shares of Common Stock are issued,
except as provided in Section 5(d) of the Plan. No dividend equivalents shall be
issued or paid with respect to any Option.

 

7.

Effect of Termination of Employment or Termination of Consultancy on Options

(a)          Death, Disability; Retirement, etc. Except as otherwise provided in
the Participant’s Option Agreement, upon Termination of Employment or
Termination of Consultancy, all outstanding Options then exercisable and not
exercised by the Participant prior to such Termination of Employment or
Termination of Consultancy (and any Options not previously exercisable but made
exercisable by the Committee at or after the Termination of Employment or
Termination of Consultancy) shall remain exercisable by the Participant to the
extent not theretofore exercised for the following time periods (subject to
Section 6(d)):

(i)          In the event of the Participant’s death, such Options shall remain
exercisable (by the Participant’s estate or by the person given authority to
exercise such Options by the Participant’s will or by operation of law) for a
period of one (1) year from the date of the Participant’s death, provided that
the Committee, in its discretion, may at any time extend such time period for up
to three (3) years from the date of the Participant’s death, but in no event
beyond the expiration of the stated term of such Options.

(ii)          In the event the Participant retires at or after age 65 (or, with
the consent of the Committee or under an early retirement policy of the Company,
before age 65), or if the Participant’s employment or Consultancy terminates due
to Disability, such Options shall remain exercisable for one (1) year from the
date of the Participant’s Termination of Employment or Termination of
Consultancy, provided that the Committee, in its discretion, may at any time
extend such time period for up to three (3) years from the date of the
Participant’s Termination of Employment or Termination of Consultancy, but in no
event beyond the expiration of the stated term of such Options.

(b)          Cause or Voluntary Termination. Upon the Termination of Employment
or Termination of Consultancy of a Participant for Cause (as defined herein) or
by the Participant in violation of an agreement between the Participant and HSI
or any of its Subsidiaries, or if it is discovered after such Termination of
Employment or Termination of Consultancy that such Participant had engaged in
conduct that would have justified a Termination of Employment or Termination of
Consultancy for Cause, all outstanding Options shall immediately be canceled,
provided that with respect to Options granted on or after April 1, 2003, upon
any such termination the Committee may, in its discretion, require the
Participant to promptly pay to the Company (and the Company shall have the right
to recover) any gain the Participant realized as a result of the exercise of any
Option that occurred within one (1) year prior to such Termination of Employment
or Termination of Consultancy or the discovery of conduct that would have
justified a Termination of Employment or Termination of Consultancy for Cause.
Termination of Employment or Termination of Consultancy shall be deemed to be
for “Cause” for purposes of this Section 7(b) if (i) the Participant shall have
committed fraud or any felony in connection with the Participant’s duties as an
employee or consultant (as

 

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applicable) of HSI or any of its Subsidiaries, or willful misconduct or any act
of disloyalty, dishonesty, fraud or breach of trust or confidentiality as to HSI
or any of its Subsidiaries or the commission of any other act which causes or
may reasonably be expected to cause economic or reputational injury to HSI or
any of its Subsidiaries or (ii) such termination is or would be deemed to be for
Cause under any employment or consulting agreement between HSI or any of its
Subsidiaries and the Participant, or is expressly provided for under an Award
Agreement.

(c)          Other Termination. In the event of Termination of Employment or
Termination of Consultancy for any reason other than as provided in Section 7(a)
or in 7(b), all outstanding Options not exercised by the Participant prior to
such Termination of Employment or Termination of Consultancy shall remain
exercisable (to the extent exercisable by such Participant immediately before
such termination) for a period of three (3) months after such termination,
provided that the Committee in its discretion may extend such time period to up
to one (1) year from the date of the Participant’s Termination of Employment or
Termination of Consultancy, but in no event beyond the expiration of the stated
term of such Options, and provided further that unless otherwise determined by
the Committee at grant, no Options that were not exercisable during the period
of employment shall thereafter become exercisable.

 

8.

Awards and Terms of Stock Appreciation Rights

(a)           Tandem Stock Appreciation Rights. Stock Appreciation Rights may be
granted to any Participant in conjunction with all or part of any Option (a
“Reference Stock Option”) granted under this Plan (“Tandem Stock Appreciation
Rights”), provided that such rights may be granted only at the time of the grant
of such Reference Stock Option.

(b)          Terms and Conditions of Tandem Stock Appreciation Rights. Tandem
Stock Appreciation Rights granted hereunder shall be subject to the same terms
and conditions of the Reference Stock Option, not inconsistent with the
provisions of this Plan, as shall be determined from time to time by the
Committee, including, without limitation, Section 6(b) pursuant to which the
Purchase Price of a Stock Appreciation Right shall not be less than 100% of the
Fair Market Value per Share on the date the Stock Appreciation Right is granted,
Section 7 and the following:

(i)          Term. A Tandem Stock Appreciation Right or applicable portion
thereof granted with respect to a Reference Stock Option shall terminate and no
longer be exercisable upon the termination or exercise of the Reference Stock
Option, except that, unless otherwise determined by the Committee, in its sole
discretion, at the time of grant, a Tandem Stock Appreciation Right granted with
respect to less than the full number of shares covered by the Reference Stock
Option shall not be reduced until and then only to the extent the exercise or
termination of the Reference Stock Option causes the number of shares covered by
the Tandem Stock Appreciation Right to exceed the number of shares remaining
available and unexercised under the Reference Stock Option.

(ii)          Exercisability. Tandem Stock Appreciation Rights shall be
exercisable only at such time or times and to the extent that the Reference
Stock Options to which they relate shall be exercisable in accordance with the
provisions of Section 6 and shall be subject to Section 7(b).

(iii)          Method of Exercise. A Tandem Stock Appreciation Right may be
exercised by the Participant by surrendering the applicable portion of the
Reference Stock Option. Upon such exercise and surrender, the Participant shall
be entitled to receive an amount determined in the manner prescribed in this
subsection (b). Options which have been so surrendered, in whole or in part,
shall no longer be exercisable to the extent the related Tandem Stock
Appreciation Rights have been exercised.

(iv)          Payment. Except as otherwise provided in an Award Agreement or
subject to the terms of an Award Agreement, upon the exercise of a Tandem Stock
Appreciation Right a Participant shall be entitled to receive up to, but no more
than, an amount in cash and/or Common Stock (as chosen by the Committee in its
sole discretion) equal in value to the excess of the Fair Market Value of one
share of Common Stock over the Option exercise price per share specified in the
Reference Stock Option agreement multiplied by the number of shares in respect
of which the Tandem Stock Appreciation Right shall have been exercised, with the
Committee having the right to determine the form of payment.

 

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(v)          Deemed Exercise of Reference Stock Option. Upon the exercise of a
Tandem Stock Appreciation Right, the Reference Stock Option or part thereof to
which such Stock Appreciation Right is related shall be deemed to have been
exercised for the purpose of the limitation set forth in Section 5 on the number
of shares of Common Stock to be issued under the Plan.

(vi)           Non-Transferability. Tandem Stock Appreciation Rights shall be
transferable only when and to the extent that the underlying Option would be
transferable under the Plan.

(c)          Non-Tandem Stock Appreciation Rights. Non-Tandem Stock Appreciation
Rights may also be granted without reference to any Options granted under this
Plan.

(d)          Terms and Conditions of Non-Tandem Stock Appreciation Rights.
Non-Tandem Stock Appreciation Rights granted hereunder shall be subject to such
terms and conditions, not inconsistent with the provisions of this Plan, as
shall be determined from time to time by the Committee, including, without
limitation, Section 6(b) pursuant to which the Purchase Price of a Non-Tandem
Stock Appreciation Right shall not be less than 100% of the Fair Market Value
per Share on the date the Stock Appreciation Right is granted, the
post-termination exercise periods provided in Section 7 (unless otherwise
provided in the Award Agreement) and the following:

(i)          Term. The term of each Non-Tandem Stock Appreciation Right shall be
fixed by the Committee, but shall not be greater than 10 years after the date
the right is granted.

(ii)          Exercisability. Non-Tandem Stock Appreciation Rights shall be
exercisable at such time or times and subject to such terms and conditions as
shall be determined by the Committee at grant, including, without limitation,
Section 7(b). If the Committee provides, in its discretion, that any such right
is exercisable subject to certain limitations (including, without limitation,
that it is exercisable only in installments or within certain time periods), the
Committee may waive such limitations on the exercisability at any time at or
after grant in whole or in part (including, without limitation, waiver of the
installment exercise provisions or acceleration of the time at which such right
may be exercised), based on such factors, if any, as the Committee shall
determine, in its sole discretion. Notwithstanding any other provision of the
Plan to the contrary, effective on the date of the Company’s 2020 annual
stockholders’ meeting, the vesting schedule with respect to any Award of
Non-Tandem Stock Appreciation Rights shall be no less than one year (with no
Non-Tandem Stock Appreciation Rights subject thereto vesting prior to the first
anniversary of the date of grant); provided, that, subject to the terms of the
Plan, the Committee shall be authorized (at the time of grant or thereafter) to
provide for the earlier vesting in the event of a Permitted Event or to the
extent permitted under Section 5(e).

(iii)          Method of Exercise. Subject to whatever installment exercise and
waiting period provisions apply under subsection (ii) above, Non-Tandem Stock
Appreciation Rights may be exercised in whole or in part at any time in
accordance with the applicable Award agreement, by giving written notice of
exercise to the Company specifying the number of Non-Tandem Stock Appreciation
Rights to be exercised.

(iv)          Payment. Upon the exercise of a Non-Tandem Stock Appreciation
Right a Participant shall be entitled to receive, for each right exercised, up
to, but no more than, an amount in cash and/or Common Stock (as chosen by the
Committee in its sole discretion) equal in value to the excess of the Fair
Market Value of one share of Common Stock on the date the right is exercised
over the Fair Market Value of one share of Common Stock on the date the right
was awarded to the Participant.

(v)           Non-Transferability. No Non-Tandem Stock Appreciation Rights shall
be Transferable by the Participant otherwise than by will or by the laws of
descent and distribution, and all such rights shall be exercisable, during the
Participant’s lifetime, only by the Participant.

(e)          Limited Stock Appreciation Rights. The Committee may, in its sole
discretion, grant Tandem and Non-Tandem Stock Appreciation Rights either as a
general Stock Appreciation Right or as a Limited Stock Appreciation Right.
Limited Stock Appreciation Rights may be exercised only upon the occurrence of a
Change of Control or such other event as the Committee may, in its sole
discretion, designate at the time of grant or thereafter. Upon the exercise of
Limited Stock Appreciation Rights, except as otherwise provided in an Award
agreement, the

 

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Participant shall receive in cash and/or Common Stock, as determined by the
Committee, an amount equal to the amount: (i) set forth in Section 8(b)(iv) with
respect to Tandem Stock Appreciation Rights; or (ii) set forth in
Section 8(d)(iv) with respect to Non-Tandem Stock Appreciation Rights.

(f)          Repricings of Stock Appreciation Rights Prohibited. Notwithstanding
any other provision of the Plan to the contrary, an outstanding Stock
Appreciation Right may not be modified to reduce the Purchase Price thereof nor
may a Stock Appreciation Right be surrendered, cancelled, converted, exchanged,
replaced or bought out in exchange for cash, another award or Option or Stock
Appreciation Right with a Purchase Price that is less than the Purchase Price of
the Stock Appreciation Right (other than adjustments or substitutions in
accordance with Section 5(d) hereof), unless such action is approved by the
stockholders of the Company.

(g)          No Dividends or Dividend Equivalents. A Stock Appreciation Right
does not confer upon a Participant the same rights as a shareholder, and
therefore, no dividends will be issued or paid to a Participant with respect to
such Stock Appreciation Right, except as provided in Section 5(d). No dividend
equivalents shall be issued or paid with respect to any Stock Appreciation
Right, except as provided in Section 5(d).

 

9.

Awards and Terms of Restricted Stock

(a)          Awards of Restricted Stock. Restricted Stock may be issued to Key
Employees or Consultants either alone or in addition to Options granted under
the Plan. The Committee shall determine the eligible Participants to whom, and
the time or times at which, grants of Restricted Stock will be made, the number
of shares to be awarded, the purchase price (if any) to be paid by the
Participant (subject to subsection (b) below), the time or times at which such
Awards may be subject to forfeiture (if any), the vesting schedule (if any) and
rights to acceleration thereof, and all other terms and conditions of the
Awards. The Committee may condition the grant or vesting of Restricted Stock
upon the attainment of specified performance targets (including, the Performance
Goals specified in Exhibit A hereto) or such other factors as the Committee may
determine, in its sole discretion. Unless otherwise determined by the Committee,
the Participant shall not be permitted to transfer shares of Restricted Stock
awarded under this Plan during a period set by the Committee (if any) (the
“Restriction Period”) commencing with the date of such Award, as set forth in
the applicable Award Agreement. Notwithstanding any other provision of the Plan
to the contrary, effective on the date of the Company’s 2020 annual
stockholders’ meeting, the Restriction Period with respect to any Award of
Restricted Stock (including an Award in the form of a restricted stock unit)
shall be no less than one year (with no restrictions on the Shares subject
thereto lapsing prior to the first anniversary of the date of grant); provided,
that, subject to the terms of the Plan, the Committee shall be authorized (at
the time of grant or thereafter) to provide for the earlier lapsing of
restrictions in the event of a Permitted Event or to the extent permitted under
Section 5(e). Notwithstanding any other provision of the Plan to the contrary,
effective as of the date of the Company’s 2009 annual stockholders’ meeting, the
Committee shall not be authorized to provide for the earlier lapsing of
restrictions with respect to any Award of Restricted Stock (including an Award
in the form of a restricted stock unit) for any reason except as permitted with
respect to Permitted Events as provided in the preceding sentence, or to the
extent permitted under Section 5(e).

(b)          Objective Performance Goals, Formulae or Standards. Notwithstanding
the foregoing, if the grant of Restricted Stock or the lapse of restrictions is
based on the attainment of Performance Goals, the Committee shall establish the
objective Performance Goals and the applicable number of shares of Restricted
Stock to be granted or the applicable vesting percentage of the Restricted Stock
applicable to each Participant or class of Participants in writing prior to the
beginning of the applicable fiscal year or at such later date as otherwise
determined by the Committee and while the outcome of the Performance Goals are
substantially uncertain. Such Performance Goals may incorporate provisions for
disregarding (or adjusting for) changes in accounting methods, corporate
transactions (including, without limitation, dispositions and acquisitions) and
other similar type events or circumstances. The Performance Goals are set forth
in Exhibit A hereto.

(c)          Awards and Certificates. A Participant selected to receive
Restricted Stock shall not have any rights with respect to such Award, unless
and until such Participant has delivered a fully executed copy of the Award
Agreement evidencing the Award to the Company and has otherwise complied with
the applicable terms and conditions of such Award. Further, such Award shall be
subject to the following conditions:

 

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(i)          Purchase Price. The purchase price of Restricted Stock shall be
determined by the Committee, but shall not be less than as permitted under
applicable law.

(ii)          Acceptance. Awards of Restricted Stock must be accepted within a
period of sixty (60) days (or such shorter period as the Committee may specify
at grant) after the grant date, by executing an Award Agreement and by paying
whatever price (if any) the Committee has designated thereunder.

(iii)          Legend. Each Participant receiving Restricted Stock shall be
issued a stock certificate in respect of such shares of Restricted Stock, unless
the Committee elects to use another system, such as book entries by the transfer
agent, as evidencing ownership of Restricted Stock. Such certificate shall be
registered in the name of such Participant, and shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such Award,
substantially in the following form:

“The anticipation, alienation, attachment, sale, transfer, assignment, pledge,
encumbrance or charge of the shares of stock represented hereby are subject to
the terms and conditions (including forfeiture) of the Henry Schein, Inc. (the
“Company”) 2020 Stock Incentive Plan, as amended from time to time, and an Award
Agreement entered into between the registered owner and the Company dated
[insert date]. Copies of such Plan and Award Agreement are on file at the
principal office of the Company.”

(iv)          Custody. The Committee may require that any stock certificates
evidencing such shares be held in custody by the Company until the restrictions
thereon shall have lapsed, and that, as a condition of any Restricted Stock
Award, the Participant shall have delivered a duly signed stock power, endorsed
in blank, relating to the Common Stock covered by such Award.

(v)          Rights as Stockholder. Except as provided in this subsection and
subsection (iv) above and as otherwise determined by the Committee, the
Participant shall have, with respect to the shares of Restricted Stock, all of
the rights of a holder of shares of Common Stock of the Company including,
without limitation, the right to receive any dividends, the right to vote such
shares and, subject to and conditioned upon the full vesting of shares of
Restricted Stock, the right to tender such shares. Notwithstanding the
foregoing, the payment of dividends, whether they are paid in cash or Common
Stock, shall be deferred until, and conditioned upon: (A) the expiration of the
applicable Restriction Period; and (B) with respect to Awards of Restricted
Stock described in Section 9(b), the attainment of the Performance Goals
established by the Committee with respect to such Award, and shall, in each
case, be subject to the same restrictions on transferability and forfeitability
as the shares of Restricted Stock with respect to which they were paid.

(vi)          Lapse of Restrictions. Subject to Sections 17 and 18, if and when
the Restriction Period expires without a prior forfeiture of the Restricted
Stock subject to such Restriction Period, the certificates for such shares shall
be delivered to the Participant. All legends shall be removed from said
certificates at the time of delivery to the Participant except as otherwise
required by applicable law.

(vii)          Termination. Unless otherwise determined by the Committee at
grant or thereafter, upon a Termination of Employment or Termination of
Consultancy for any reason during the relevant Restriction Period, all
Restricted Stock still subject to restriction shall be forfeited.

(d)          Restricted Stock Units. The Committee may grant an Award of
Restricted Stock in the form of restricted stock units, which grant shall
contain such terms and conditions as the Committee shall determine at grant or
thereafter, subject to the terms of the Plan. A restricted stock unit is a unit
of measurement equivalent to one Share, but with none of the attendant rights of
a stockholder of a Share until shares of Common Stock are ultimately distributed
in payment of the obligation. Notwithstanding the foregoing, the payment of
dividends or dividend equivalents whether they are paid in cash or in shares of
Common Stock on any restricted stock units shall be credited, deferred until,
and conditioned upon, the satisfaction of the vesting and shall be subject to
the same restrictions on transferability and forfeitability as the restricted
stock units with respect to which they were paid.

 

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10.

Nontransferability of Awards

(a)          Except as provided in Section 10(b), no Award shall be transferable
by the Participant otherwise than by will or under applicable laws of descent
and distribution, and during the lifetime of the Participant may be exercised
only by the Participant or his or her guardian or legal representative. In
addition, no Award shall be assigned, negotiated, pledged or hypothecated in any
way (whether by operation of law or otherwise), and no Award shall be subject to
execution, attachment or similar process. Upon any attempt to transfer, assign,
negotiate, pledge or hypothecate any Award, or in the event of any levy upon any
Award by reason of any execution, attachment or similar process contrary to the
provisions hereof, such Award shall immediately become null and void.

(b)          Notwithstanding the foregoing, the Committee may determine, in its
sole discretion, at the time of grant or thereafter that a non-qualified Option
that is not otherwise transferable pursuant to this Section is transferable to a
Family Member in whole or in part and in such circumstances, and under such
conditions, as specified by the Committee. Any Option so transferred may
thereafter be transferred by the transferee to any other Family Member of the
Participant, and may be exercised by any permitted transferee at such times and
to such extent that such Option would have been exercisable by the Participant
if no transfer had occurred.

 

11.

Rights as a Stockholder

A Participant (or a permitted transferee of an Option pursuant to Section 10(b))
shall have no rights as a stockholder with respect to any Shares covered by such
Participant’s Award until such Participant (or a permitted transferee of an
Option pursuant to Section 10(b)) shall have become the holder of record of such
Shares, and no adjustments shall be made for dividends in cash or other property
or distributions or other rights in respect to any such Shares, except as
otherwise specifically provided for in this Plan.

 

12.

Determinations

Each determination, interpretation or other action made or taken pursuant to the
provisions of this Plan by the Committee shall be final, conclusive and binding
for all purposes and upon all persons, including, without limitation, the
Participants, HSI and its Subsidiaries, directors, officers and other employees
of HSI and its Subsidiaries, and the respective heirs, executors,
administrators, personal representatives and other successors in interest of
each of the foregoing.

 

13.

Termination, Amendment and Modification

The Plan shall terminate at the close of business on March 31, 2030, unless
terminated sooner as hereinafter provided, and no Award shall be granted under
the Plan on or after that date. The termination of the Plan shall not terminate
any outstanding Awards which by their terms continue beyond the termination date
of the Plan. At any time prior to March 31, 2030, the Board or the Committee may
amend or terminate the Plan or suspend the Plan in whole or in part.
Notwithstanding the foregoing, however, no such amendment may, without the
approval of the stockholders of HSI, (i) increase the total number of Shares
that may be issued under the Plan or that may be acquired upon exercise or
vesting of Awards granted under the Plan (except by operation of Section 5(d));
(ii) increase the maximum individual Participant limitations for a fiscal year
under Section 5(c) (except by operation of Section 5(d)); (iii) change the types
of employees, consultants or other advisors eligible to be Participants under
the Plan; (iv) reduce the Purchase Price of any outstanding Awards (except
pursuant to Section 5(d)); (v) extend the maximum option period under
Section 6(d); (vi) amend the terms of outstanding Awards to reduce the exercise
price of outstanding Options or Stock Appreciation Rights or to cancel, convert,
exchange, replace, buyout or surrender outstanding Options or Stock Appreciation
Rights in exchange for cash, other Awards or Options or Stock Appreciation
Rights with an exercise price that is less than the exercise price of the
original Option or Stock Appreciation Right (except pursuant to Section 5(d));
(vii) award any Stock Option or Stock Appreciation Right in replacement of a
canceled Stock Option or Stock Appreciation Right with a higher exercise price;
or (viii) effect any change that would require stockholder approval in order for
the Plan to continue to comply, to the extent applicable to Incentive Stock
Options, with the applicable provisions of Section 422 of the Code, or with
respect to any Award, to make any other amendment that would require stockholder
approval under Nasdaq Rule 5635(c) or other such rules of any exchange or system
on which the Company’s securities are listed or traded at the request of the
Company.

 

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Nothing contained in this Section 13 shall be deemed to prevent the Board or the
Committee from authorizing amendments of outstanding Awards, so long as all
Awards outstanding at any one time shall not call for issuance of more Shares
than the remaining number provided for under the Plan and so long as the
provisions of any amended Awards would have been permissible under the Plan if
such Award had been originally granted or issued as of the date of such
amendment with such amended terms; provided, however, that no outstanding Option
may be amended to reduce the Purchase Price specified therein or canceled in
consideration for an award having a lower exercise price without the approval of
the stockholders of HSI; provided further, however, that the foregoing proviso
shall not be deemed to prohibit adjustments related to stock splits, stock
dividends, mergers, recapitalizations or other changes in the capital structure
or business of HSI pursuant to Section 5(d).

Notwithstanding anything to the contrary contained in this Section 13, no
termination, amendment or modification of the Plan may, without the consent of
the Participant or the transferee of such Participant’s Award, alter or impair
the rights and obligations arising under any then outstanding Award.

 

14.

Non-Exclusivity

Neither the adoption of the Plan by the Board nor the submission of the Plan to
the stockholders of HSI for approval shall be construed as creating any
limitations on the power of the Board to adopt such other incentive arrangements
as it may deem desirable, including, without limitation, the granting or
issuance of stock options, Shares and/or other incentives otherwise than under
the Plan, and such arrangements may be either generally applicable or limited in
application.

 

15.

Use of Proceeds

The proceeds of the sale of Shares subject to Awards under the Plan are to be
added to the general funds of HSI and used for its general corporate purposes as
the Board shall determine.

 

16.

General Provisions

(a)          Right to Terminate Employment or Consultancy. Neither the adoption
of the Plan nor the grant of Awards shall impose any obligations on the Company
to continue the employment or engagement as a consultant of any Participant, nor
shall it impose any obligation on the part of any Participant to remain in the
employ of the Company, subject however to the provisions of any agreement
between the Company and the Participant.

(b)          Purchase for Investment. If the Board determines that the law so
requires, the holder of an Award granted hereunder shall, upon any exercise or
conversion thereof, execute and deliver to HSI a written statement, in form
satisfactory to HSI, representing and warranting that such Participant is
purchasing or accepting the Shares then acquired for such Participant’s own
account and not with a view to the resale or distribution thereof, that any
subsequent offer for sale or sale of any such Shares shall be made either
pursuant to (i) a registration statement on an appropriate form under the
Securities Act, which registration statement shall have become effective and
shall be current with respect to the Shares being offered and sold, or (ii) a
specific exemption from the registration requirements of the Securities Act, and
that in claiming such exemption the holder will, prior to any offer for sale or
sale of such Shares, obtain a favorable written opinion, satisfactory in form
and substance to HSI, from counsel approved by HSI as to the availability of
such exception.

(c)          Trusts, etc. Nothing contained in the Plan and no action taken
pursuant to the Plan (including, without limitation, the grant of any Award
thereunder) shall create or be construed to create a trust of any kind, or a
fiduciary relationship, between HSI and any Participant or the executor,
administrator or other personal representative or designated beneficiary of such
Participant, or any other persons. Any reserves that may be established by HSI
in connection with the Plan shall continue to be part of the general funds of
HSI, and no individual or entity other than HSI shall have any interest in such
funds until paid to a Participant. If and to the extent that any Participant or
such Participant’s executor, administrator, or other personal representative, as
the case may be, acquires a right to receive any payment from HSI pursuant to
the Plan, such right shall be no greater than the right of an unsecured general
creditor of HSI.

(d)          Notices. Each Participant shall be responsible for furnishing the
Committee with the current and proper address for the mailing to such
Participant of notices and the delivery to such Participant of agreements,
Shares and payments. Any notices required or permitted to be given shall be
deemed given if directed to the person to whom

 

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addressed at such address and mailed by regular United States mail, first class
and prepaid. If any item mailed to such address is returned as undeliverable to
the addressee, mailing will be suspended until the Participant furnishes the
proper address.

(e)          Severability of Provisions. If any provisions of the Plan shall be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions of the Plan, and the Plan shall be construed and
enforced as if such provisions had not been included.

(f)          Payment to Minors, Etc. Any benefit payable to or for the benefit
of a minor, an incompetent person or other person incapable of receipting
therefor shall be deemed paid when paid to such person’s guardian or to the
party providing or reasonably appearing to provide for the care of such person,
and such payment shall fully discharge the Committee, the Company and their
employees, agents and representatives with respect thereto.

(g)          Headings and Captions. The headings and captions herein are
provided for reference and convenience only. They shall not be considered part
of the Plan and shall not be employed in the construction of the Plan.

(h)          Controlling Law. The Plan shall be construed and enforced according
to the laws of the State of New York.

(i)          Section 409A of the Code. To the extent applicable, the Plan is
intended to comply with, or be exempt from, the applicable requirements of Code
Section 409A and shall be limited, construed and interpreted in accordance with
such intent. In the event that any arrangement provided for under the Plan
constitutes a nonqualified deferred compensation arrangement under Code
Section 409A, it is intended that such arrangement be designed in a manner that
complies with Code Section 409A. Any amounts deferred hereunder that are subject
to Code Section 409A and payable to a “specified employee” (within the meaning
of such term under Code Section 409A and determined using any identification
methodology and procedure selected by the Company from time to time, or, if
none, the default methodology and procedure specified under Code Section 409A),
except in the event of death, shall be delayed in accordance with the
requirements of Code Section 409A until the day immediately following the six
month anniversary of such employee’s “separation of service” within the meaning
of Code Section 409A (and the guidance issued thereunder). A termination of
employment shall not be deemed to have occurred for purposes of any provision of
the Plan providing for the payment of any amounts or benefits, which are subject
to Code Section 409A, upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of Code
Section 409A (and the guidance issued thereunder) and, for purposes of any such
provision of the Plan, references to a “resignation,” “termination,”
“termination of employment,” “retirement” or like terms shall mean separation
from service. Notwithstanding the foregoing, the Company does not guarantee, and
nothing in the Plan is intended to provide a guarantee of, any particular tax
treatment with respect to payments or benefits under the Plan, and the Company
shall not be responsible for compliance with, or exemption from, Code
Section 409A and the guidance issued thereunder.

(j)          Participant Loans Prohibited. Notwithstanding any other provision
of the Plan to the contrary, no loans may be made to any Participant (whether on
a recourse or non-recourse basis, or with or without interest) for the purpose
of enabling a Participant to exercise any Option or Stock Appreciation Right or
to otherwise pay any Purchase Price that may be due with respect to an Award.

 

17.

Issuance of Stock Certificates; Legends and Payment of Expenses

(a)          Stock Certificates. Upon any exercise of an Option and payment of
the exercise price as provided in such Option, a certificate or certificates for
the Shares as to which such Option has been exercised shall be issued by HSI in
the name of the person or persons exercising such Option and shall be delivered
to or upon the order of such person or persons.

(b)          Legends. Certificates for Shares issued upon exercise or vesting of
an Award shall bear such legend or legends as the Committee, in its discretion,
determines to be necessary or appropriate to prevent a violation of, or

 

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to perfect an exemption from, the registration requirements of the Securities
Act or to implement the provisions of any agreements between HSI and the
Participant with respect to such Shares.

(c)          Payment of Expenses. The Company shall pay all issue or transfer
taxes with respect to the issuance or transfer of Shares, as well as all fees
and expenses necessarily incurred by the Company in connection with such
issuance or transfer and with the administration of the Plan.

 

18.

Listing of Shares and Related Matters

If at any time the Board shall determine in its sole discretion that the
listing, registration or qualification of the Shares covered by the Plan upon
any national securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the award or sale of Shares
under the Plan, no Shares will be delivered unless and until such listing,
registration, qualification, consent or approval shall have been effected or
obtained, or otherwise provided for, free of any conditions not acceptable to
the Board. If at any time counsel to the Company shall be of the opinion that
any sale or delivery of Shares pursuant to an Award is or may in the
circumstances constitute a violation by the Participant or the Company of any
provisions of any law or of any regulations of any governmental authority or any
national securities exchange or result in the imposition of excise taxes on the
Company under the statutes, rules or regulations of any applicable jurisdiction,
the Company shall have no obligation to make such sale or delivery, or to make
any application or to effect or to maintain any qualification or registration
under the Securities Act or otherwise with respect to Shares or Awards, and the
right to exercise any Option or Stock Appreciation Right shall be suspended
until, in the opinion of said counsel, such sale or delivery will not result in
the violation of any provisions of any law or of any regulation of any
governmental authority or any national securities exchange or imposition of
excise taxes on the Company. Upon termination of any period of suspension under
this Section 18, any Award affected by such suspension which shall not then have
expired or terminated shall be reinstated as to all Shares available before such
suspension and as to Shares which would otherwise have become available during
the period of such suspension, but no such suspension shall extend the term of
any Option.

 

19.

Withholding Taxes

Where a Participant or other person is entitled to receive Shares pursuant to
the exercise or vesting of an Award (as applicable), HSI shall have the right to
require the Participant or such other person to pay to HSI the amount of any
taxes which HSI may be required to withhold before delivery to such Participant
or other person of cash or a certificate or certificates representing such
Shares.

Upon the disposition of Shares acquired pursuant to the exercise of an Incentive
Stock Option, HSI shall have the right to require the payment of the amount of
any taxes which are required by law to be withheld with respect to such
disposition.

Unless otherwise prohibited by the Committee or by applicable law, a Participant
may satisfy any statutorily required withholding tax obligation by any of the
following methods, or by a combination of such methods: (a) securing payment in
cash or property in lieu of withholding; (b) authorizing HSI to withhold from
the Shares otherwise payable to such Participant (1) one or more of such Shares
having an aggregate Fair Market Value, determined as of the date the withholding
tax obligation arises, less than or equal to the amount of the total withholding
tax obligation or (2) cash in an amount less than or equal to the amount of the
total withholding tax obligation; or (c) delivering to HSI previously acquired
Shares (none of which Shares may be subject to any claim, lien, security
interest, community property right or other right of spouses or present or
former family members, pledge, option, voting agreement or other restriction or
encumbrance of any nature whatsoever) having an aggregate Fair Market Value,
determined as of the date the withholding tax obligation arises, less than or
equal to the amount of the total withholding tax obligation.

 

20.

Section 16(b) of the Act

All elections and transactions under the Plan by persons subject to Section 16
of the Act involving Shares are intended to comply with all exemptive conditions
under Rule 16b-3. The Committee may establish and adopt written administrative
guidelines, designed to facilitate compliance with Section 16(b) of the Act, as
it may deem necessary or proper for the administration and operation of the Plan
and the transaction of business thereunder.

 

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EXHIBIT A

PERFORMANCE GOALS

Performance Goals established for purposes of the grant and/or vesting of
Restricted may be based on one or more of the following (“Performance Goals”):
(i) the attainment of certain target levels of, or a specified increase in,
enterprise value or value creation targets of the Company (or any subsidiary,
division, other operational unit of the Company or administrative department);
(ii) the attainment of certain target levels of, or a percentage increase in
after-tax or pre-tax profits of the Company, including without limitation that
attributable to continuing and/or other operations of the Company (or in either
case a subsidiary, division, other operational unit or administrative department
of the Company); (iii) the attainment of certain target levels of, or a
specified increase in, operational cash flow of the Company (or a subsidiary,
division, other operational unit or administrative department of the Company);
(iv) the attainment of a certain level of reduction of, or other specified
objectives with regard to limiting the level of increase in all or a portion of,
the Company’s bank debt or other long-term or short-term public or private debt
or other similar financial obligations of the Company, which may be calculated
net of cash balances and/or other offsets and adjustments as may be established
by the Committee; (v) the attainment of certain target levels of, or a specified
percentage increase in, earnings per share or earnings per share from continuing
operations of the Company (or a subsidiary, division, other operational unit or
administrative department of the Company); (vi) the attainment of certain target
levels of, or a specified percentage increase in, net sales, revenues, net
income or earnings before income tax or other exclusions of the Company (or a
subsidiary, division, other operational unit or administrative department of the
Company); (vii) the attainment of certain target levels of, or a specified
increase in, return on capital employed (including, without limitation, return
on invested capital or return on committed capital of the Company (or any
subsidiary, division, other operational unit or administrative department of the
Company); (viii) the attainment of certain target levels of, or a specified
percentage increase in, after-tax or pre-tax return on stockholder equity of the
Company (or any subsidiary, division, other operational unit or administrative
department of the Company); (ix) the attainment of certain target levels of, or
a specified percentage increase in, market share; (x) the attainment of certain
target levels in the fair market value of the shares of the Company’s Common
Stock; (xi) the growth in the value of an investment in the Company’s Common
Stock assuming the reinvestment of dividends; (xii) the attainment of a certain
level of, reduction of, or other specified objectives with regard to limiting
the level of or increase in, all or a portion of controllable expenses or costs
or other expenses or costs of the Company, subsidiary, parent, division,
operational unit or administrative department; or (xiii) the attainment of
certain target levels of, or a specified increase in, economic value added
targets based on a cash flow return on investment formula.

In addition, such Performance Goals may be based upon the attainment of
specified levels of Company (or subsidiary, division, other operational unit or
administrative department of the Company) performance under one or more of the
measures described above relative to the performance of other corporations. The
Committee may: (i) designate additional business criteria on which the
Performance Goals may be based or (ii) adjust, modify or amend the
aforementioned business criteria.

 

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