Exhibit 10.2

HENRY SCHEIN, INC.

2013 STOCK INCENTIVE PLAN

As Amended and Restated Effective as of May 14, 2013

 

1. Purposes of the Plan

The purposes of this Henry Schein, Inc. 2013 Stock Incentive Plan, as amended
and restated effective as of May 14, 2013, 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, Restricted Stock and restricted stock units.

 

2. Definitions

(a) “Acquisition Event” means a merger or consolidation in which HSI is not the
surviving entity, or 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.

(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) “Class A Option” means an Option evidenced by a Class A Option Agreement.

(i) “Class A Option Agreement” has the meaning set forth in Section 6(a).

(j) “Class B Option” means an Option evidenced by a Class B Option Agreement.

(k) “Class B Option Agreement” has the meaning set forth in Section 6(a).

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

(m) “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 a
“non-employee director” within the meaning of Rule 16b-3 promulgated under the
Act, an “outside director” as defined under Section 162(m) of the Code and an
“independent director” (within the meaning of NASDAQ Rule 5605(a)(2) or such
other applicable stock exchange rule). If the Board does not appoint a committee
for this purpose, “Committee” means the Board.

 

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(n) “Common Stock” means the voting common stock of HSI, par value $.0l, any
Common Stock into which the Common Stock may be converted and any Common Stock
resulting from any reclassification of the Common Stock.

(o) “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.

(p) “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.

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

(r) “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.

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

(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.

(t) “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.

 

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(u) “HSI” means Henry Schein, Inc.

(v) “HSI Agreement” means the Amended and Restated HSI Agreement dated as of
February 16, 1994 among HSI and certain other parties.

(w) “HSI Closing” means the closing of the HSI Public Offering.

(x) “HSI Public Offering” means an initial public offering of shares of HSI
Common Stock at a Market Capitalization which is not less than the Minimum
Market Capitalization then in effect and as a result of which at least 20% of
the common equity of HSI will be publicly held by at least 300 holders and such
shares of HSI Common Stock will be listed or admitted to trading on the New York
Stock Exchange or the American Stock Exchange or quoted on NASDAQ or is on such
terms and conditions as are approved by Marvin Schein prior to the effective
date thereof.

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

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

(aa) “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.

(bb) “Market Capitalization” means (i) the per share initial public offering
price, multiplied by (ii) the number of shares outstanding immediately prior to
the HSI Closing less the aggregate number of shares issued pursuant to the 1994
Stock Purchase Agreement between HSI and the HSI Employee Stock Ownership Plan
(the “HSI ESOP”) or held by the HSI ESOP which are outstanding on such date.

(cc) “Minimum Market Capitalization” means $48,000,000 on August 15, 1992, which
amount shall increase on each day thereafter as follows:

From August 15, 1992 until the 1st anniversary thereof: $15,123 per day;

From the 1st anniversary thereof until the 2nd anniversary thereof: $16,862 per
day;

From the 2nd anniversary thereof until the 3rd anniversary thereof: $18,802 per
day;

From the 3rd anniversary thereof until the 4th anniversary thereof: $20,964 per
day;

From the 4th anniversary thereof until the 5th anniversary thereof: $23,375 per
day;

From the 5th anniversary thereof until the 6th anniversary thereof: $26,063 per
day;

From the 6th anniversary thereof until the 7th anniversary thereof: $29,060 per
day; and

Thereafter: $32,402 per day.

(dd) “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.

(ee) “Option Agreement” means a Class A Option Agreement or Class B Option
Agreement.

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

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

 

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

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

(jj) “Plan” means the Henry Schein, Inc. 2013 Stock Incentive Plan, as amended
from time to time (formerly referred to as the Henry Schein, Inc. 1994 Stock
Incentive Plan).

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

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

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

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

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

(pp) “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.

(qq) “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.

(rr) “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.

(ss) “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.

(tt) “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

 

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to occur until such later time as such Consultant ceases to be a Key Employee,
Consultant or director of HSI or any of its 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, and March 27, 2007 and was subsequently amended. The Plan is hereby
renamed the Henry Schein, Inc. 2013 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 2013
annual stockholders’ meeting to be held on May 14, 2013. If stockholder approval
of the Plan is obtained, no Award shall be granted under the Plan on or after
May 14, 2023, but Awards previously granted may extend beyond that date;
provided that no Award (other than an Option or Stock Appreciation Right) that
is intended to be “performance-based” under Section 162(m) of the Code shall be
granted on or after the first meeting of the Company’s stockholders that occurs
in the fifth year following the year of stockholder approval of the Plan unless
the Performance Goals set forth on Exhibit A are reapproved (or other designated
performance goals are approved) by the stockholders by such 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 HSI Agreement, 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 Section 162(m) of the Code, 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

 

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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.

(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 31,229,270 Shares. The maximum number of Shares that are
authorized for issuance under the Plan pursuant to Class A Options shall be
475,794 Shares. No new Class A Options may be granted under the Plan. The
balance of the Shares reserved for issuance under the Plan shall be covered by
Class B Options and Stock Appreciation Rights. 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, provided
that the number of Shares covered by Class A Options shall be reduced by that
number of Class A Options that are cancelled, expire or are terminated. 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

 

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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 200,000 Shares (subject to any adjustment
pursuant to Section 5(d)) during each fiscal year of HSI during the entire term
of the Plan. Solely with respect to Restricted Stock or restricted stock units
that are intended to be “performance-based” compensation under Section 162(m) of
the Code, 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 200,000 Shares (subject to any adjustment pursuant to
Section 5(d)) 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, the Committee may, in its
discretion, and without any liability to any Participant, terminate all
outstanding Options and Stock Appreciation Rights as of the consummation of the
Acquisition Event by delivering 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). If an Acquisition Event occurs and the Committee does not
terminate the outstanding Options and Stock Appreciation Rights 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

 

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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.

(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 2013 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, subject to the following: (i) in
the case of Class A Options (A) prior to the HSI Public Offering, the Purchase
Price shall not be less than $416.67 per Share, and (B) on or after the HSI
Public Offering, the Purchase Price shall not be less than the Fair Market Value
per Share on the date the Option is granted, and (ii) in the case of Class B
Options or Incentive Stock Options, 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 Class B Option or Incentive
Stock 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, and provided that the Committee may not accelerate the exercise
date prior to the HSI Closing. 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 2013 annual stockholders’ meeting, the vesting
schedule with respect to any Award of Options granted on or after such date
shall be no less than three years (with no more than 1/3rd of the Options
subject thereto vesting on each of the first three anniversaries 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).

 

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(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 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% (20% with respect to Options
granted prior to April 1, 2003) 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 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) solely with respect to an Award granted prior to the date of the Company’s
2009 annual stockholders’ meeting, the approval by the stockholders of HSI of a
Corporate Transaction or, if consummation of such Corporate Transaction is
subject, at the time of such approval by stockholders, to

 

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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% (20% with respect to Options
granted prior to April 1, 2003) or more of the outstanding Shares or Outstanding
HSI Voting Securities, as the case may be) will beneficially own, directly or
indirectly, 33% (20% with respect to Options granted prior to April 1, 2003) or
more of, respectively, the outstanding shares of common stock of the corporation
resulting from such 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) solely with respect to an Award granted on or after the date of the
Company’s 2009 annual stockholders’ meeting, 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% (20% with respect to Options
granted prior to April 1, 2003) or more of the outstanding Shares or Outstanding
HSI Voting Securities, as the case may be) will beneficially own, directly or
indirectly, 33% (20% with respect to Options granted prior to April 1, 2003) or
more of, respectively, the outstanding shares of common stock of the corporation
resulting from such 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

(v) 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; 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% (20% with respect to Options granted
prior to April 1, 2003) or more of the

 

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outstanding Shares or Outstanding HSI Voting Securities, as the case may be)
will beneficially own, directly or indirectly, 33% (20% with respect to Options
granted prior to April 1, 2003) 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 subsequent to an HSI Closing 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.

(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.

 

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

 

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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 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

 

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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.

(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,

 

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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 2013 annual stockholders’ meeting, the vesting
schedule with respect to any Award of Non-Tandem Stock Appreciation Rights
granted on or after such date shall be no less than three years (with vesting as
to no more than 1/3rd of the Non-Tandem Stock Appreciation Rights subject
thereto lapsing on each of the first three anniversaries 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 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.

 

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, including to comply with the requirements of Section 162(m) of
the Code. 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

 

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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 2009 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) granted on or after such date shall be no less than (A) one year, if
the lapsing of restrictions is based (in whole or in part) on the attainment of
one or more Performance Goals, and (B) three years, if the lapsing of
restrictions is based solely on the continued performance of services by the
Participant (with restrictions as to no more than 1/3rd of the Shares subject
thereto lapsing on each of the first three anniversaries 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 award of Restricted Stock is intended to comply with the
“performance based” compensation exception under Section 162(m) of the Code and
if the grant of such Award 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:

(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”) 2013 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.

 

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(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 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.

(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.

 

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.

 

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13. Termination, Amendment and Modification

The Plan shall terminate at the close of business on May 14, 2023, 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 May 14, 2023, 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) effect any change that would require stockholder approval under
Section 162(m) of the Code, including, without limitation, alter the Performance
Goals for the Award of Restricted Stock or restricted stock units; (v) reduce
the Purchase Price of any outstanding Awards (except pursuant to Section 5(d));
(vi) extend the maximum option period under Section 6(d); (vii) 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)); (viii) 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 (ix) 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.

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

Subject to the express provisions contained in the HSI Agreement, 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.

 

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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 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

 

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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 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.

 

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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 Stock intended to be “performance-based” under Section 162(m) of the
Code shall 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. To
the extent permitted under Section 162(m) of the Code, but only to the extent
permitted under Section 162(m) of the Code (including, without limitation,
compliance with any requirements for stockholder approval), 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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