Exhibit 10.1

ANNALY CAPITAL MANAGEMENT, INC. EXECUTIVE SEVERANCE PLAN

ARTICLE 1

Purpose

Annaly Capital Management, Inc. (the “Plan Sponsor”), on behalf of each
participating entity, hereby establishes the Annaly Capital Management, Inc.
Executive Severance Plan (the “Plan”), effective as of July 1, 2020. The Plan is
established to provide financial assistance to Participants whose Employment is
terminated due to Involuntary Terminations of Employment occurring on or after
the Effective Date.

The Plan, as a “severance pay arrangement” within the meaning of
Section 3(2)(B)(i) of ERISA, is intended to meet all applicable requirements of
ERISA, is administered and maintained as an unfunded “welfare plan” under
Section 3(1) of ERISA and is intended to be exempt from the reporting and
disclosure requirements of ERISA as an unfunded welfare plan for a select group
of management or highly compensated employees.

The establishment of the Plan shall not affect or modify the rights of a
Participant with respect to severance benefits under any individual employment
agreement (each, an “Agreement”). In no event may a Participant receive
severance benefits under both the Plan and an Agreement, or any other
arrangement with the Company or an Affiliate, except to the extent the Company
expressly determines otherwise. If a Participant has an Agreement and such
Agreement provides for the payment of severance benefits in connection with a
Participant’s Involuntary Termination of Employment, to the extent the events
giving rise to the Involuntary Termination of Employment are covered by such
Agreement, such Agreement and not the Plan shall govern the payment of severance
benefits relating to such Involuntary Termination of Employment. In addition,
the establishment of the Plan (a) does not nullify or replace any
non-competition, release of claims or other agreements between the Company or an
Affiliate and any of its employees or former employees entered into in
connection with any such Agreements and (b) does not have any effect on any
outstanding equity awards granted under an equity compensation plan of the
Company.

 

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ARTICLE 2

Definitions

The following terms when used in the Plan have the following meanings, unless a
different meaning is plainly required by the context.

2.1 2018-2019 Average Cash Bonus. For each Participant, the sum of the
Participant’s gross cash bonus received from the Manager with respect to the
2018 calendar year and 2019 calendar year, divided by two.

2.2 Affiliate. All members of any controlled group within the meaning of Code
Sections 414(b) and (c) that includes the Plan Sponsor.

2.3 Base Salary. A Participant’s annualized pre-tax rate of base salary in
effect on his or her Separation Date.

2.4 Board. The Board of Directors of the Plan Sponsor.

2.5 Cause. “Cause” shall be as defined in any employment agreement, offer letter
or similar agreement between the Participant and the Company or an Affiliate,
and if there is no such agreement or definition, “Cause” shall mean a
Participant being reasonably found by the Plan Administrator in good faith to
have:

 

  (a)

committed an act of fraud or dishonesty in the course of Employment;

 

  (b)

been convicted of (or plead no contest with respect to) a crime constituting a
felony or a crime of comparable magnitude under applicable law (as determined by
the Plan Administrator in its sole discretion);

 

  (c)

failed to perform the Participant’s job duties where such failure is materially
injurious to the Company and its Affiliates, or to the business interests or
reputation of the Company and its Affiliates;

 

  (d)

materially breached any written policy applicable to the Participant’s
Employment including, but not limited to, the Company’s Code of Business Conduct
and Ethics; or

 

  (e)

materially breached any employment-related covenants under any agreement with
the Company or an Affiliate;

provided, however, that with respect to any breach or failure that is curable by
the Participant, as determined by the Plan Administrator in good faith, the
Company has provided the Participant written notice of the material breach or
failure and the Participant has not cured such breach or failure, as determined
by the Plan Administrator in good faith, within 15 days following the date the
Company provides such notice.

 

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2.6 CEO. The Chief Executive Officer of the Company who is a Participant in the
Plan.

2.7 Code. The Internal Revenue Code of 1986, as amended from time to time
(including any valid and binding governmental regulations, court decisions and
other regulatory and judicial authority issued or rendered thereunder).

2.8 Company. The Plan Sponsor, its successor and assigns, and any of its
Affiliates that, with the consent of the Plan Sponsor, adopt the Plan for the
benefit of their employees. The Plan Sponsor may act on behalf of any such
adopting Affiliate for purposes of the Plan.

2.9 Disabled or Disability. An incapacity that has resulted in qualification of
a Participant to receive long-term disability benefits under the Company’s Long
Term Disability Insurance Plan. If the Participant is not covered by the
Company’s Long Term Disability Insurance Plan, the Participant is considered to
have a Disability if the Participant’s incapacity results in a determination by
the Social Security Administration that the Participant is entitled to a Social
Security disability benefit. The Plan Administrator may establish uniform and
nondiscriminatory time limits for such determination by the Social Security
Administration and for notice of such determination to be provided to the Plan
Administrator in order for such incapacity to be a Disability under the Plan.

2.10 Effective Date. The Plan is effective as of July 1, 2020.

2.11 Employment. A Participant’s employment with the Company, beginning on the
Participant’s original date of hire (including the date of hire with the
Manager, if applicable) and ending on the last official workday for which the
Participant receives pay for service with the Company.

2.12 ERISA. The Employee Retirement Income Security Act of 1974, as amended from
time to time (including any valid and binding governmental regulations, court
decisions and other regulatory and judicial authority issued or rendered
thereunder).

2.13 Involuntary Termination of Employment. A Participant’s termination of
Employment by the Company without Cause, other than by reason of death or
Disability.

2.14 Manager. Annaly Management Company LLC and members of any controlled group
within the meaning of Code Sections 414(b) and (c) that includes the Manager.

2.15 Other Executive. Any employee other than the CEO who the Board has
determined is an executive officer of the Company and who is a Participant in
the Plan.

2.16 Participant. Any individual selected by the Plan Administrator to
participate in the Plan pursuant to Article 3.

2.17 Plan. The Annaly Capital Management, Inc. Executive Severance Plan, as
stated herein and as may be amended from time to time.

 

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2.18 Plan Administrator. The Compensation Committee of the Board, or any
committee or other person or persons designated by the Board to administer the
Plan pursuant to Section 5.2.

2.19 Plan Sponsor. Annaly Capital Management, Inc.

2.20 Plan Year. The calendar year. However, the first Plan Year shall begin on
the Effective Date and end on December 31, 2020.

2.21 Prorated Bonus Payment. The portion of the Severance Benefit determined in
accordance with Section 4.1(c).

2.22 Section 409A. Section 409A of the Code.

2.23 Separation Date. A Participant’s last day of active Employment (i.e., the
last day the Participant works for the Company) due to an Involuntary
Termination of Employment that entitles the Participant to benefits from the
Plan.

2.24 Severance Benefits. Benefits paid to a Participant pursuant to Article 4.

 

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ARTICLE 3

Eligibility for Severance Benefits

3.1 Participation Requirements. The Plan Administrator may designate, in its
sole discretion and from time to time, one or more employees of the Company to
participate in the Plan as Participants. As of the Effective Date, the
Participants are the CEO and each Other Executive.

3.2 Notice of Participation. The Plan Administrator or its delegate shall
provide each Participant selected to participate in the Plan with a letter
notifying the Participant of his or her participation in the Plan.

3.3 Eligibility for Severance Benefits. A Participant shall be eligible for
Severance Benefits, as determined pursuant to Article 4, if the Participant:

 

  (a)

incurs an Involuntary Termination of Employment;

 

  (b)

executes and returns to the Plan Administrator a general written release and
waiver of claims, in such form as determined by the Plan Administrator from time
to time;

 

  (c)

is in compliance with the covenants set forth in Section 4.5 on the Separation
Date;

 

  (d)

returns to the Company any property of the Company that has come into the
Participant’s possession; and

 

  (e)

performs all transition and other matters required of the Participant by the
Company following his or her Involuntary Termination of Employment.

The actions required under this Section must be performed within 60 days after
the Participant’s Involuntary Termination of Employment unless a shorter time
period is provided in the applicable release, agreement, waiver or other
document required to be provided as a condition of receipt of Severance
Benefits.

3.4 Ineligibility for Benefits. A Participant shall not be eligible to receive
Severance Benefits in the event of any of the following:

 

  (a)

the Participant’s termination of Employment for any reason other an Involuntary
Termination of Employment (for example, termination of Employment by the Company
for Cause, due to the Participant’s death or Disability or a voluntary
termination of Employment by the Participant); or

 

  (b)

the amendment or termination of the Plan to eliminate a Participant’s
eligibility to receive Severance Benefits prior to his or her Separation Date,
in accordance with Section 6.1.

 

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ARTICLE 4

Severance Benefits

4.1 Amount of Severance Benefits.

 

  (a)

CEO Severance Benefits. The amount of the CEO’s Severance Benefits shall equal
the aggregate amounts determined under this Section 4.1(a) and Section 4.1(c):

 

  (i)

2020 Plan Year: If the CEO is entitled to Severance Benefits for an Involuntary
Termination of Employment that occurs during the 2020 Plan Year, the CEO shall
be entitled to a Severance Benefit equal to the sum of (A) 1.0 times the CEO’s
Base Salary and (B) 1.0 times the 2018-2019 Average Cash Bonus.

 

  (ii)

Plan Years after the 2020 Plan Year: If the CEO is entitled to Severance
Benefits for an Involuntary Termination of Employment that occurs after the 2020
Plan Year, the CEO shall be entitled to a Severance Benefit equal to the sum of
(A) 1.5 times the CEO’s Base Salary and (B) 1.5 times the CEO’s target cash
bonus for the Plan Year in which the Involuntary Termination of Employment
occurs.

 

  (b)

Other Executives’ Severance Benefits. The amount of the Severance Benefits for
any Other Executive shall equal the aggregate amounts determined under this
Section 4.1(b) and Section 4.1(c):

 

  (i)

2020 Plan Year: If an Other Executive is entitled to Severance Benefits for an
Involuntary Termination of Employment that occurs during the 2020 Plan Year, the
Other Executive shall be entitled to a Severance Benefit equal to the sum of (A)
0.75 times the Other Executive’s Base Salary and (B) 0.75 times the Other
Executive’s 2018-2019 Average Cash Bonus.

 

  (ii)

Plan Years after the 2020 Plan Year: If an Other Executive is entitled to
Severance Benefits for an Involuntary Termination of Employment that occurs
after the 2020 Plan Year, the Other Executive shall be entitled to a Severance
Benefit equal to the sum of (A) 1.25 times the Other Executive’s Base Salary and
(B) 1.25 times the Other Executive’s target cash bonus for the Plan Year in
which the Involuntary Termination of Employment occurs.

 

  (c)

Prorated Bonus Payment. Each Participant whose Separation Date is on or after
March 31st of a calendar year and who received a cash bonus from the Company for
the immediately preceding calendar year, may receive an additional Severance
Benefit equal to the gross cash bonus earned by the Participant for the
immediately preceding calendar year, pro-rated based on the number of weeks in
the calendar year through the Separation Date divided by 52; provided, however,
that the Plan Administrator retains the discretion to adjust the amount of the
Prorated Bonus Payment to account for performance in for the calendar year in
which the Separation Date occurs.

 

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  (d)

Additional Severance Benefits. The Plan Administrator, in its sole discretion,
may provide for such other Severance Benefits, such as outplacement services, as
may be expressly communicated to a Participant, subject to any conditions or
limitations as may be determined by the Plan Administrator and subject to the
provisions of Section 6.1.

4.2 Payment of Severance Benefits. The Severance Benefits payable to a
Participant shall be paid in a single lump sum as soon as practicable following
the expiration period described in the waiver required under Section 3.3 and in
no event later than 75 days after the Separation Date, subject to all applicable
deductions and withholdings required by law; provided, however, that payment of
the Prorated Bonus Payment may be paid during the normal bonus cycle for the
applicable performance year but in no event later than March 15 following the
calendar year in which the Participant’s Involuntary Termination of Employment
occurs.

4.3 Payment of Severance Benefits Upon Death of Participant. If a Participant
dies after Severance Benefits become payable under the Plan but prior to the
date payment of Severance Benefits is completed, the Severance Benefits shall be
paid in a single lump sum no later than March 15 following the calendar year in
which the Participant’s death occurs to the Participant’s legal surviving
spouse, or if none, to the Participant’s estate. Notwithstanding any provision
of the Plan to the contrary, no Severance Benefits shall be paid following the
death of the Participant unless the Company receives any release, agreement,
waiver or other document required to be provided by the Participant’s surviving
spouse or estate, as applicable, as a condition of receipt of Severance Benefits
within the time frame required under the applicable release, agreement, waiver
or other document but no later than 75 days following the Participant’s death,
to the extent required by the Plan Administrator.

4.4 Repayment of Benefits. The Company reserves the right to recover Severance
Benefits in the event a Participant violates any covenant to which he or she is
subject under Section 4.5 or if the Plan Administrator determines within three
years after the Separation Date that the Participant engaged in conduct that
constitutes “Detrimental Conduct” as defined in the Annaly Capital Management,
Inc. Policy on Recovery (Clawback) of Incentive Compensation from Executives.

4.5 Restrictive Covenants. To be eligible to receive Severance Benefits, a
Participant must abide by any post-Employment covenants applicable to the
Participant under any written agreement with the Company or as required by the
Company’s Code of Business Conduct and Ethics.

 

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ARTICLE 5

Plan Administration

5.1 Plan Administrator’s Authority. The Plan Administrator shall have full and
complete authority to enforce the Plan in accordance with its terms and shall
have all powers necessary to accomplish that purpose, including, but not limited
to, the following:

 

  (a)

to apply and interpret the Plan in its absolute discretion, including the
authority to construe disputed provisions;

 

  (b)

to determine all questions arising in its administration, including those
related to the eligibility of persons to become Participants and eligibility for
Severance Benefits, and the rights of Participants;

 

  (c)

to compute and certify the amount of Severance Benefits payable to Participants;

 

  (d)

to authorize all disbursements in accordance with the provisions of the Plan;

 

  (e)

to employ and reasonably compensate accountants, attorneys and other persons to
render advice or perform services for the Plan as it deems necessary;

 

  (f)

to make available to Participants upon request, for examination during business
hours, such records as pertain exclusively to the examining Participant; and

 

  (g)

to appoint an agent for service of legal process.

All decisions of the Plan Administrator based on the Plan and documents
presented to it shall be final and binding upon all persons.

5.2 Appointment of Separate Administrator. The Plan Sponsor may appoint a
separate Plan Administrator which shall be an officer of the Plan Sponsor or a
committee consisting of at least two persons. Members of any such committee may
resign by written notice to the Plan Sponsor and the Plan Sponsor may appoint or
remove members of the committee. A Plan Administrator consisting of more than
one person shall act by a majority of its members at the time in office and may
authorize any one or more of its members to execute any document or documents on
behalf of the Plan Administrator.

5.3 Claims for Benefits. Generally, an obligation of the Plan to provide
Severance Benefits to a Participant arises only when a written offer of
Severance Benefits has been communicated by the Plan Administrator to the
Participant. A Participant not receiving Severance Benefits who believes that he
is eligible for such benefits, or a Participant disputing the amount of
Severance Benefits, or any such Participant’s authorized representative (the
“Claimant”) may file a claim for Severance Benefits in writing with the Plan
Administrator. All such claims for Severance Benefits must be submitted to the
Plan Administrator at the address of the Plan Sponsor’s corporate headquarters
within 60 days after the Claimant’s termination of employment with the Company
and its Affiliates. The review of all claims for Severance Benefits is governed
by the following rules:

 

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  (a)

Time Limits on Decision. Unless special circumstances exist, a Claimant who has
filed a claim shall be informed of the decision on the claim within 90 days of
the Plan Administrator’s receipt of the written claim. This period may be
extended by an additional 90 days if special circumstances require an extension
of time, provided the Claimant is notified of the extension within the initial
90-day period. The extension notice shall indicate:

 

  (i)

the special circumstances requiring the extension of time; and

 

  (ii)

the date, no later than 180 days after receipt of the written claim, by which
the Claimant can expect to receive a decision.

 

  (b)

Content of Denial Notice. If a claim for Severance Benefits is partially or
wholly denied, the Claimant will receive a written notice that:

 

  (i)

states the specific reason or reasons for the denial;

 

  (ii)

refers to the specific Plan provisions on which the denial is based;

 

  (iii)

describes and explains the need for any additional material or information that
the Claimant must supply in order to perfect the claim and an explanation of why
such material or information is necessary; and

 

  (iv)

describes the Plan’s review procedures and the time limits applicable to such
procedures, including a statement of the Claimant’s right to bring a civil
action under Section 502(a) of ERISA following an adverse benefit determination
on review.

5.4 Appeal of Denied Claims. If the Claimant’s claim is denied and he or she
wants to submit a request for a review of the denied claim, the following rules
apply:

 

  (a)

Review of Denied Claim. If a Claimant wants his or her denied claim to be
reconsidered, the Claimant must send a written request for a review of the claim
denial to the Plan Administrator no later than 60 days after the date on which
he or she receives written notification of the denial. The Claimant may include
any written comments, documents, records or other information relating to the
claim for benefits. The Claimant shall be provided, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relating to the claim for benefits. The Plan Administrator’s review
shall take into account all comments, documents, records and other information
submitted by the Claimant relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination.

 

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  (b)

Decision on Review. The Plan Administrator shall review the denied claim and
provide a written decision within 60 days of the date the Plan Administrator
receives the Claimant’s written request for review. This period may be extended
by an additional 60 days if special circumstances require an extension of time,
provided the Participant is notified of the extension within the initial 60-day
period. The extension notice shall indicate:

 

  (i)

the special circumstances requiring the extension of time; and

 

  (ii)

the date, no later than 120 days after receipt of the written request for
review, by which the Claimant can expect to receive a decision.

 

  (c)

Content of Denial Notice. If a claim for benefits is partially or wholly denied
on appeal, the Claimant will receive a written notice that:

 

  (i)

states the specific reason or reasons for the denial;

 

  (ii)

refers to the specific Plan provisions on which the denial is based;

 

  (iii)

includes a statement that the Claimant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records and
other information relevant to the claim; and

 

  (iv)

includes a statement of the right to bring a civil action under Section 502(a)
of ERISA.

5.5 Limitations on Legal Actions; Dispute Resolution. Claimants must follow the
claims procedures described in this Article 5 before taking action in any other
forum regarding a claim for benefits under the Plan. Furthermore, any such
action initiated by a Claimant under the Plan must be brought by the Claimant
within one year of a final determination on the claim for benefits under these
claims procedures, or the Claimant’s benefit claim will be deemed permanently
waived and abandoned, and the Claimant will be precluded from reasserting it.
Further, after following the claims procedures described in this Article 5,
except with respect to enforcement of any covenants in connection with
Section 4.5, the following provisions apply to any further disputes that may
arise regarding this Plan:

 

  (a)

In the event of any dispute, claim, question or disagreement arising out of or
relating to the Plan, the parties shall use their best efforts to settle such
dispute, claim, question or disagreement. To this effect, they shall consult and
negotiate with each other, in good faith and, recognizing their mutual
interests, attempt to reach a just and equitable resolution satisfactory to both
parties.

 

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  (b)

If the parties do not reach such a resolution within a period of 30 days, then
any such unresolved dispute or claim, upon notice by any party to the other,
shall be resolved by confidential binding arbitration in accordance with the
rules of the Judicial Arbitration & Mediation Services, Inc. Such arbitration
will take place in the City of New York. The arbitrator shall be empowered to
decide the arbitrability of all disputes, and shall apply the substantive
federal, state or local law and statute of limitations governing any dispute
submitted to arbitration and any arbitration demand must be filed within the
applicable limitations period for the claim or claims asserted. In ruling on any
dispute submitted to arbitration, the arbitrator shall have the authority to
award only such remedies or forms of relief as are provided for under the
substantive law governing such dispute. The arbitrator shall issue a written
decision that shall include the essential findings and conclusions on which the
decision is based (a standard award). Each Participant consents to the
jurisdiction of the state of New York for injunctive, specific enforcement or
other relief in aid of the arbitration proceedings or to enforce judgment of the
award in such arbitration proceeding, but not otherwise. The award entered by
the arbitrator shall be final and binding on all parties to arbitration, and may
be entered in any court of competent jurisdiction. The Company and applicable
Participant shall equally bear all fees and costs unique to the arbitration
forum (e.g., filing fees, transcript costs and arbitrator’s fees), except as
provided otherwise in statutory claims. The Company and applicable Participant
shall be responsible for their own attorneys’ fees and costs, except as provided
otherwise in statutory claims.

 

  (c)

Each Participant agrees that any dispute under the Plan that is determined to be
not subject to arbitration shall be subject to exclusive jurisdiction and venue
in the New York State Supreme Court sitting in New York County.

 

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ARTICLE 6

Plan Amendment and Termination

6.1 Power to Amend and Terminate. The Plan Sponsor may, at any time, terminate
or amend the Plan in its sole discretion with respect to any or all Participants
and for any reason, including altering, reducing or eliminating benefits to be
paid to Participants who have not yet experienced a Separation Date; provided,
however, that any amendment or termination that eliminates potential Severance
Benefits for a Participant shall not be effective until one year after notice is
provided to the Participant. The provisions of the Plan as in effect at the time
of a Participant’s Separation Date shall control any Plan benefits paid to that
Participant, unless modified by the Plan Sponsor or otherwise specified in the
Plan.

6.2 Successor Employer. Any successor to all or any portion of the business of
the Plan Sponsor may, with the consent of the Plan Sponsor, continue the Plan.
Such successor shall succeed to all the rights, powers and duties of the Plan
Sponsor. The employment of any Participant who continues in the employ of the
successor shall not be deemed to have been terminated or severed for purposes of
the Plan.

 

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ARTICLE 7

Miscellaneous Provisions

7.1 Section 280G. Notwithstanding any other provision of the Plan or any other
plan, arrangement or agreement to the contrary, if it shall be determined that
any payment or distribution in the nature of compensation (within the meaning of
Section 280G(b)(2) of the Code) to or for the benefit of a Participant, whether
paid or payable or distributed or distributable pursuant to the terms of the
Plan or otherwise (a “Payment”), would constitute an “excess parachute payment”
within the meaning of Section 280G of the Code, the aggregate present value of
the Payments shall be reduced (but not below zero) to the Reduced Amount
(defined below) if and only if the Accounting Firm (defined below) determines
that the reduction will provide the Participant with a greater
net after-tax benefit than would no reduction. No reduction shall be made unless
the reduction would provide the Participant with a greater
net after-tax benefit. The determinations under this Section 7.1 shall be made
as follows:

 

  (a)

The “Reduced Amount” shall be an amount expressed in present value which
maximizes the aggregate present value of Payments without causing any Payment to
be subject to the Excise Tax (defined below), determined in accordance with
Section 280G(d)(4) of the Code. The term “Excise Tax” means the excise tax
imposed under Section 4999 of the Code, together with any interest or penalties
imposed with respect to such excise tax.

 

  (b)

Payments shall be reduced on a nondiscretionary basis in such a way as to
minimize the reduction in the economic value deliverable to the Participant.
Where more than one payment has the same value for this purpose and they are
payable at different times, they will be reduced on a pro rata basis. Only
amounts payable under the Plan shall be reduced pursuant to this Section 7.1.

 

  (c)

All determinations to be made under this Section 7.1 shall be made by an
independent certified public accounting firm selected by the Plan Sponsor and
agreed to by the Participant immediately prior to the change-in-ownership or
-control transaction (the “Accounting Firm”). The Accounting Firm shall provide
its determinations and any supporting calculations both to the Company and the
Participant within 10 days of the transaction. Any such determination by the
Accounting Firm shall be binding upon the Company and the Participant. All of
the fees and expenses of the Accounting Firm in performing the determinations
referred to in this Section shall be borne solely by the Plan Sponsor.

7.2 Section 409A. It is intended that the Severance Benefits set forth in
Article 4 are, to the greatest extent possible, exempt from the application of
Section 409A and the Plan shall be construed and interpreted accordingly.
However, if the Company (or, if applicable, the successor entity thereto)
determines that all or a portion of the Severance Benefits constitute “deferred
compensation” under Section 409A and that the Participant is a “specified
employee” of the Company or any successor entity thereto, as such term is
defined in Code Section

 

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409A(a)(2)(B)(i), then, solely to the extent necessary to avoid the incurrence
of the adverse personal tax consequences under Section 409A, the timing of the
applicable payments shall be delayed until the first payroll date following the
six-month anniversary of the Participant’s “separation from service” (as defined
under Section 409A) and the Company (or its successor) shall (a) pay to the
Participant a lump sum amount equal to the sum of the payments that the
Participant would otherwise have received during such six-month period had no
such delay been imposed and (b) commence paying the balance of the payments in
accordance with the applicable payment schedule set forth in the Plan. For
purposes of Section 409A, each installment payment provided under the Plan shall
be treated as a separate payment. To the extent required by Section 409A, any
payments to be made to a Participant upon his or her termination of employment
shall only be made upon such Participant’s separation from service. The Company
makes no representations that the payments and benefits provided under the Plan
comply with Section 409A and in no event shall the Company be liable for all or
any portion of any taxes, penalties, interest or other expenses that may be
incurred by the Participant on account of noncompliance with Section 409A.

7.3 Limitation on Liability. In no event shall the Company, the Plan
Administrator or any officer or director of the Company incur any liability for
any act or failure to act with respect to the Plan.

7.4 Non-Assignment of Benefits. Benefits paid under the Plan are for the sole
use of Participants. Except as required by law, benefits provided under the Plan
cannot be assigned, transferred or pledged to anyone as collateral for a debt or
other obligation.

7.5 Construction. Words used in the masculine gender shall include the feminine
and words used in the singular shall include the plural, as appropriate.

7.6 Conflict with Applicable Law. If any provisions of ERISA or other applicable
law render any provision of the Plan unenforceable, such provision shall be of
no force and effect only to the minimum extent required by such law.

7.7 Contract of Employment. Nothing contained in the Plan shall be construed to
constitute a contract of employment between the Company and any employee or
impose on the Company an obligation to retain any Participant as an employee, to
continue any Participant’s current employment status or to change any employment
policies of the Company, nor shall any provision hereof restrict the right of
the Company to discharge any of its employees or restrict the right of any such
employee to terminate his or her employment with the Company.

7.8 Source of Benefits. The Plan is intended to be an unfunded welfare benefit
plan for purposes of ERISA and a severance pay arrangement within the meaning of
Section 3(2)(B)(i) of ERISA. All benefits payable pursuant to the Plan shall be
paid or provided by the Company from its general assets. The Plan is not
intended to be a pension plan described in Section 3(2)(A) of ERISA.

7.9 Withholding. The Company shall have the authority to withhold or cause to
have withheld applicable income and payroll taxes from any payments made under
the Plan to the extent required by law.

 

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7.10 Governing Law. To the extent not preempted by ERISA or any other federal
statutes or regulations, the Plan will be construed and enforced according to
the laws of the State of New York (other than its laws respecting choice of
law).

 

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