Exhibit 10.1

Appendix A

TREEHOUSE FOODS, INC.

EQUITY AND INCENTIVE PLAN

(Amended and Restated Effective February 14, 2017)

Section 1. PURPOSE

The TreeHouse Foods, Inc. Equity and Incentive Plan, as amended and restated
effective February 14, 2017 (the “Plan”), was originally an amendment and
restatement of the TreeHouse Foods, Inc. 2005 Long-Term Stock Incentive Plan
approved by stockholders on April 19, 2007 and February 27, 2015. The Plan is
intended to promote the interests of the Company and its shareholders by
(i) attracting and retaining non-employee directors and executive personnel and
other key employees of outstanding ability; (ii) motivating non-employee
directors and executive personnel and other key employees, by means of
performance-related incentives, to achieve longer-range Performance Criteria;
and (iii) enabling such non-employee directors and employees to participate in
the growth and financial success of the Company.

Section 2. DEFINITIONS

(a) Certain Definitions. Capitalized terms used herein without definition shall
have the respective meanings set forth below:

“Act” means the Securities Exchange Act of 1934, as amended.

“Affiliate” means (i) for purposes of Incentive Stock Options, any corporation
that is a “parent corporation” (as defined in Section 424(e) of the Code) or a
“subsidiary corporation” (as defined in Section 424(e) of the Code) of the
Company, and (ii) for all other purposes, with respect to any person, any other
person that (directly or indirectly) is controlled by, controlling or under
common control with such person.

“Award” means any grant or award made pursuant to Sections 5 through 8 of the
Plan, inclusive.

“Award Agreement” means either a written or electronic agreement entered into by
the Company and a Participant setting forth the terms and provisions applicable
to an Award or Awards granted to the Participant, or a written or electronic
statement issued by the Company describing the terms and conditions of an Award
or Awards.

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

“Cause” means (i) the willful failure of a Participant to perform substantially
his or her duties; (ii) a Participant’s willful or serious misconduct that has
caused, or could reasonably be expected to result in, material injury to the
business or reputation of an Employer; (iii) a Participant’s conviction of, or
entering a plea of guilty or nolo contendere to, a crime constituting a felony;
(iv) the breach by a Participant of any written covenant or agreement with an
Employer, any material written policy of any Employer or any Employer’s “code of
conduct”, or (v) the Participant’s failure to cooperate with an Employer in any
internal investigation or administrative, regulatory or judicial proceeding;
provided that if a Participant is a party to an employment or individual
severance agreement with an Employer that defines the term “Cause” then, with
respect to any Award made to such Participant, “Cause” shall have the meaning
set forth in such employment or severance agreement. In addition, the
Participant’s Service shall be deemed to have terminated for Cause if, after the
Participant’s Service has terminated (for a reason other than Cause), facts and
circumstances are discovered that would have justified a termination for Cause.

“Change in Control” means the first occurrence of any of the following events
after the Effective Date:

(i) any person, entity or “group” (as defined in Section 13(d) of the Act),
other than the Company, a wholly-owned subsidiary of the Company, and any
employee benefit plan of the

 

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Company or any wholly-owned subsidiary of the Company, becomes a “beneficial
owner” (as defined in Rule 13d-3 under the Act), of 30% or more of the combined
voting power of the Company’s then outstanding voting securities;

(ii) the persons who, as of the Effective Date, are serving as the members of
the Board (the “Incumbent Directors”) shall cease for any reason to constitute
at least a majority of the Board (or the board of directors of any successor to
the Company), provided that any director elected to the Board, or nominated for
election, by at least two-thirds of the Incumbent Directors then still in office
shall be deemed to be an Incumbent Director for purposes of this clause (ii);

(iii) the Company consummates a merger or consolidation with any other
corporation, and as a result of which (A) persons who were shareholders of the
Company immediately prior to such merger or consolidation, do not, immediately
thereafter, own, directly or indirectly and in substantially the same
proportions as their ownership of the stock of the Company immediately prior to
the merger or consolidation, more than 50% of the combined voting power of the
voting securities entitled to vote generally in the election of directors of
(x) the Company or the surviving entity or (y) an entity that, directly or
indirectly, owns more than 50% of the combined voting power entitled to vote
generally in the election of directors of the entity described in subclause (x),
and (B), within the 12-month period after such consummation of the merger or
consolidation, the members of the Board as of the consummation of such merger or
consolidation cease to constitute a majority of the board of directors of the
Company or the surviving entity (or the entity that, directly or indirectly,
owns more than 50% of the combined voting power entitled to vote generally in
the election of directors of the Company or such surviving entity);

(iv) the Company consummates a sale, transfer or other disposition of all or
substantially all of the assets of the Company, which is consummated and
immediately following which the persons who were shareholders of the Company
immediately prior to such sale, transfer or disposition, do not own, directly or
indirectly and in substantially the same proportions as their ownership of the
stock of the Company immediately prior to the sale, transfer or disposition,
more than 50% of the combined voting power of the voting securities entitled to
vote generally in the election of directors of (x) the entity or entities to
which such assets are sold or transferred or (y) an entity that, directly or
indirectly, owns more than 50% of the combined voting power entitled to vote
generally in the election of directors of the entities described in subclause
(x); and

(v) the shareholders of the Company approve a plan of complete liquidation of
the Company, or such a plan is commenced; provided that if a Participant is a
party to an employment or individual severance agreement with an Employer that
defines the term “Change of Control” then, with respect to any Award made to
such Participant, “Change of Control” shall have the meaning set forth in such
employment or severance agreement.

“Change in Control Price” means the price per share offered in respect of Stock
in conjunction with any transaction resulting in a Change in Control on a
fully-diluted basis (as determined in good faith by the Committee as constituted
before the Change in Control, if any part of the offered price is payable other
than in cash) or, in the case of a Change in Control occurring solely by reason
of a change in the composition of the Board, the highest Fair Market Value of a
share of Stock on any of the 30 trading days immediately preceding the date on
which a Change in Control occurs.

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

“Committee” means the Compensation Committee of the Board or such other
committee of the Board as the Board shall from time to time designate to
administer the Plan.

“Company” means TreeHouse Foods, Inc., a Delaware corporation.

“Consultant” means any person, including an advisor, engaged by an Employer to
render services to such Employer and who is not a Director or an Employee.

 

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“Designated Beneficiary” means the beneficiary designated by the Participant, in
a manner determined by the Committee, to receive amounts due the Participant in
the event of the Participant’s death. In the absence of an effective designation
by the Participant, Designated Beneficiary shall mean the Participant’s estate.

“Director” means any individual who is a member of the Board or the board of
directors of an Affiliate of the Company.

“Disability” means, unless another definition is incorporated into the
applicable Award Agreement, the Participant is, by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
(12) months, (i) unable to engage in any substantial gainful activity, or
(ii) receiving income replacement benefits for a period of not less than three
months under an accident and health plan covering employees of the Company or an
Affiliate; provided that if a Participant is a party to an employment or
individual severance agreement with an Employer that defines the term
“Disability” then, with respect to any Award made to such Participant,
“Disability” shall have the meaning set forth in such employment or severance
agreement.

“Effective Date” means February 14, 2017, the date on which the Plan, as amended
and restated, was approved by the Committee on behalf of the Board.

“Employee” means any officer or employee employed by any Employer in a
common-law employee-employer relationship.

“Employer” means the Company and any Affiliate thereof.

“Executive Officer” means any “officer” within the meaning of Rule 16(a)-1(f)
promulgated under the Act or any “covered employee” within the meaning of
Section 162(m)(3) of the Code.

“Fair Market Value” means the closing price of the Stock as reported for
consolidated trading of issues on the New York Stock Exchange on the date in
question, or if the Stock was not traded on such date, the closing price on the
first date prior thereto on which the Stock was so traded.

“Good Reason” means, as determined by the Committee in its sole discretion and
solely with respect to this Plan and any Award made hereunder, the occurrence of
any of the following events without the Participant’s express written consent:
(i) the material reduction of the Participant’s authorities, duties, and
position with the Company, (ii) a material reduction by the Company of the
Participant’s base compensation, other than a reduction approved by the Board
that similarly applies to all executive officers of the Company or similarly
situated Participants, or (iii) a change in the offices of the Participant to a
place that is more than thirty (30) miles in distance farther from the
Participant’s home than the current executive offices of the Company in Oak
Brook, IL; provided that if a Participant is a party to an employment or
individual severance agreement with an Employer that defines the term “Good
Reason” then, with respect to any Award made to such Participant, “Good Reason”
shall have the meaning set forth in such employment or severance agreement.

The Participant must provide notice to the Company of the existence of one or
more of the foregoing conditions within ninety (90) calendar days of the initial
existence of the condition, upon the notice of which the Company will have
thirty (30) calendar days during which it may remedy the condition. For a
Participant’s termination of Service to be on account of “Good Reason,” it must
occur within one hundred eighty (180) calendar days following the initial
existence of the applicable condition.

“Incentive Stock Option” means a stock option granted under Section 7 of the
Plan that is designated as an Incentive Stock Option that is intended to meet
the requirements of Section 422 of the Code.

“Net Exercised” means the exercise of an Option or any portion thereof by the
delivery of the greatest number of whole shares of Stock having a Fair Market
Value on the date of exercise not in excess of the difference between the
aggregate Fair Market Value of the shares of Stock subject to the Option (or the
portion of such Option then being exercised) and the aggregate exercise price
for all such shares of Stock under the Option (or the portion thereof then being
exercised), with any fractional share that would result from such equation to be
payable in cash.

 

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“New Employer” means, after a Change in Control, a Participant’s employer, or
any direct or indirect parent or any direct or indirect majority-owned
subsidiary of such employer.

“Non-statutory Stock Option” means a stock option granted under Section 7 of the
Plan that is not intended to be an Incentive Stock Option.

“Option” means an Incentive Stock Option or a Non-statutory Stock Option.

“Other Stock-Based Award” means an award of, or related to, shares of Stock
other than Options, SARs, Restricted Stock, Performance Shares, Restricted Stock
Units or Performance Units, as granted by the Committee in accordance with the
provisions of Section 8 of the Plan.

“Participant” means an Employee, Director or Consultant who is selected by the
Committee to receive an Award under the Plan.

“Performance Award” means an Award granted pursuant to Section 5 of the Plan of
a contractual right to receive cash or Stock (as determined by the Committee)
upon the achievement, in whole or in part, of the applicable Performance
Criteria.

“Performance Criteria” means the objectives established by the Committee for a
Performance Period pursuant to Section 5(c) of the Plan for the purpose of
determining the extent to which an Award of Performance Shares, Performance
Awards, or Performance Units has been earned.

“Performance Period” means the period selected by the Committee during which
performance is measured for the purpose of determining the extent to which an
Award of Performance Shares, Performance Awards, or Performance Units has been
earned, provided that the minimum duration of a Performance Period shall be
one-year.

“Performance Share” means an Award granted pursuant to Section 5 of the Plan of
a contractual right to receive one share of Stock (or the Fair Market Value
thereof in cash or any combination of cash and Stock, as determined by the
Committee), or a fraction or multiple thereof, upon the achievement, in whole or
in part, of the applicable Performance Criteria.

“Performance Unit” means an Award granted pursuant to Section 5 of the Plan of a
contractual right to receive a fixed or variable dollar denominated unit (or a
unit denominated in the Participant’s local currency), or a fraction or multiple
thereof, upon the achievement, in whole or in part, of the applicable
Performance Criteria. The Committee shall determine whether the earned portion
of any such Performance Units shall be payable in cash, Stock or any combination
thereof.

“Restriction Period” means the period of time selected by the Committee during
which an Award of Restricted Stock and Restricted Stock Units, as the case may
be, is subject to forfeiture and/or restrictions on transfer pursuant to the
terms of the Plan, provided that the minimum duration of a Restriction Period
shall be one-year.

“Restricted Stock” means shares of Stock contingently granted to a Participant
under Section 6 of the Plan.

“Restricted Stock Unit” means a fixed or variable stock denominated unit
contingently awarded to a Participant under Section 6 of the Plan.

“Retirement” means, unless another definition is incorporated into the
applicable Award Agreement, a termination of the Participant’s Service at or
after the date the Participant has reached age 55 and has completed five years
of Service with the Company; provided that if a Participant is a party to an
employment or individual severance agreement with an Employer that defines the
term “Retirement” then, with respect to any Award made to such Participant,
“Retirement” shall have the meaning set forth in such employment or severance
agreement.

“Service” means the provision of services to the Company or its Affiliates in
the capacity of (i) an Employee, (ii) a Director, or (iii) a Consultant.

 

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“Special Termination” means a termination of the Participant’s Service due to
death or Disability.

“Stock” means the common stock of the Company, par value $0.01 per share.

“Stock Appreciation Right” or “SAR” means an Award, granted alone or in tandem
with an Option, designated as an SAR under Section 7 of the Plan.

“Subsidiary” means any business entity in which the Company possesses directly
or indirectly fifty percent (50%) or more of the total combined voting power.

(b) Gender and Number. Except when otherwise indicated by the context, words in
the masculine gender used in the Plan shall include the feminine gender, the
singular shall include the plural, and the plural shall include the singular.

Section 3. POWERS OF THE COMMITTEE

(a) Eligibility. Each Employee, Director or Consultant who, in the opinion of
the Committee, has the capacity to contribute to the successful performance of
the Company is eligible to be a Participant in the Plan.

(b) Power to Grant and Establish Terms of Awards. The Committee shall have the
discretionary authority, subject to the terms of the Plan, to determine which
Employees, Directors or Consultants to whom Awards shall be granted, the type or
types of Awards to be granted, and the terms and conditions of any and all
Awards including, without limitation, the number of shares of Stock subject to
an Award, the time or times at which Awards shall be granted, and the terms and
conditions of applicable Award Agreements. The Committee may establish different
terms and conditions for different types of Awards, for different Participants
receiving the same type of Award, and for the same Participant for each type of
Award such Participant may receive, whether or not granted at the same or
different times.

(c) Administration. The Plan shall be administered by the Committee. The
Committee shall have sole and complete authority and discretion to adopt, alter
and repeal such administrative rules, guidelines and practices governing the
operation of the Plan as it shall from time to time deem advisable, and to
interpret the terms and provisions of the Plan. The Committee’s decisions
(including any failure to make decisions) shall be binding upon all persons,
including the Company, shareholders, Employers, and each Employee, Director,
Consultant, Participant or Designated Beneficiary, and shall be given deference
in any proceeding with respect thereto.

(d) Delegation by the Committee. The Committee may delegate to the Company’s
Chief Executive Officer and/or to such other officer(s) of the Company the power
and authority to make and/or administer Awards under the Plan with respect to
individuals who are below the position of Company Senior Vice President (or any
analogous title), pursuant to such conditions and limitations as the Committee
may establish; provided that only the Committee or the Board may select, and
grant Awards to, Executive Officers or exercise any other discretionary
authority under the Plan in respect of Awards granted to such Executive
Officers. Unless the Committee shall otherwise specify, any delegate shall have
the authority and right to exercise (within the scope of such person’s delegated
authority) all of the same powers and discretion that would otherwise be
available to the Committee pursuant to the terms hereof. The Committee may also
appoint agents (who may be officers or employees of the Company) to assist in
the administration of the Plan and may grant authority to such persons to
execute agreements, including Award Agreements, or other documents on its
behalf. All expenses incurred in the administration of the Plan, including,
without limitation, for the engagement of any counsel, consultant or agent,
shall be paid by the Company.

(e) Restrictive Covenants and Other Conditions. Without limiting the generality
of the foregoing, the Committee may condition the grant of any Award under the
Plan upon the Participant to whom such Award would be granted agreeing in
writing to certain conditions (such as restrictions on the ability to transfer
the underlying shares of Stock) or covenants in favor of the Company and/or one
or more Affiliates thereof (including, without limitation, covenants not to
compete, not to solicit employees and customers and not to disclose confidential
information, that may have effect following the termination of the Participant’s
Service and after the Stock subject to the Award has been transferred to the
Participant), including, without limitation, the requirement that the
Participant disgorge any profit, gain or other benefit received in respect of
the Award prior to any breach of any such covenant.

 

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(f) Participants Based Outside the United States. To conform with the provisions
of local laws and regulations, or with local compensation practices and
policies, in foreign countries in which the Company or any of its Subsidiaries
or Affiliates operate, but subject to the limitations set forth in Section 4 of
the Plan regarding the maximum number of shares of Stock issuable hereunder and
the maximum Award to any single Participant, the Committee may (i) modify the
terms and conditions of Awards granted to Participants employed outside the
United States (“Non-US Awards”), (ii) establish, without amending the Plan,
subplans with modified exercise procedures and such other modifications as may
be necessary or advisable under the circumstances (“Subplans”), and (iii) take
any action which it deems advisable to obtain, comply with or otherwise reflect
any necessary governmental regulatory procedures, exemptions or approvals with
respect to the Plan. The Committee’s decision to grant Non-US Awards or to
establish Subplans is entirely voluntary and at the complete discretion of the
Committee. The Committee may amend, modify or terminate any Subplans at any
time, and such amendment, modification or termination may be made without prior
notice to the Participants. The Company, Subsidiaries, Affiliates of any of the
foregoing and members of the Committee shall not incur any liability of any kind
to any Participant as a result of any change, amendment or termination of any
Subplan at any time. The benefits and rights provided under any Subplan or by
any Non-US Award (i) are wholly discretionary and, although provided by either
the Company, a Subsidiary or Affiliate of any of the foregoing, do not
constitute regular or periodic payments and (ii) are not to be considered part
of the Participant’s salary or compensation under the Participant’s employment
with the Participant’s local employer for purposes of calculating any severance,
resignation, redundancy or other end of service payments, vacation, bonuses,
long-term service awards, indemnification, pension or retirement benefits, or
any other payments, benefits or rights of any kind. If a Subplan is terminated,
the Committee may direct the payment of Non-US Awards (or direct the deferral of
payments whose amount shall be determined) prior to the dates on which payments
would otherwise have been made, and, in the Committee’s discretion, such
payments may be made in a lump sum or in installments.

Section 4. MAXIMUM AMOUNT AVAILABLE FOR AWARDS

(a) Number. Subject in all cases to the provisions of this Section 4, the
maximum number of shares of Stock that are available for issuance pursuant to
Awards shall be 16,060,167 or the sum of (i) 12,260,167 shares of Stock
previously authorized under the Plan and (ii) 3,800,000 shares of Stock
requested pursuant to this most recent amendment and restatement of the Plan.
Such maximum number of shares shall be subject to adjustment in Section 4(d).
Notwithstanding the provisions of Section 4(b) of the Plan, the maximum number
of shares of Stock that may be issued in respect of Incentive Stock Options
shall not exceed 1,000,000 shares. Shares of Stock may be made available from
Stock held in treasury or authorized but unissued shares of the Company not
reserved for any other purpose.

(b) Canceled, Terminated, or Forfeited Awards, etc. Any shares of Stock subject
to an Award which for any reason expires without having been exercised, is
canceled or terminated or otherwise is settled without the issuance of any Stock
shall again be available for grant under the Plan. In applying the immediately
preceding sentence, if (i) shares of Stock otherwise issuable or issued in
respect of, or as part of, any Award other than Options and SARs are withheld to
cover taxes, such shares shall not be treated as having been issued under the
Plan and shall again be available for issuance under the Plan, (ii) shares of
Stock otherwise issuable or issued in respect of, or as part of, any Award of
Options or SARs are withheld to cover taxes or the exercise price of such Award,
such shares shall be treated as having been issued under the Plan and shall not
be available for issuance under the Plan (iii) any Options are Net Exercised,
the aggregate number of shares of Stock subject to such Options shall be deemed
issued under the Plan and shall not be available for issuance under the Plan,
and (iv) any stock-settled SARs are exercised, the aggregate number of shares of
Stock subject to such SARs shall be deemed issued under the Plan and shall not
be available for issuance under the Plan. In addition, shares of Stock tendered
to exercise outstanding Options or other Awards or to cover applicable taxes on
Awards of Options and SARs shall not be available for issuance under the Plan,
but shares of Stock tendered to cover applicable taxes on Awards other than
Options and SARs shall be available for issuance under the Plan. The number of
shares of Stock remaining available for issuance shall be reduced by the number
of shares of Stock subject to outstanding Awards and, for Awards that are not
denominated by shares of Stock, by the number of shares of Stock actually
delivered upon settlement or payment of the Award; provided, however, that,
notwithstanding the foregoing, for every one Share issued in respect of an award
of (i) Restricted Stock, (ii) Restricted Stock Units,

 

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(iii) Performance Shares, (iv) Performance Units, (v) Performance Awards, and
(vi) Other Stock-Based Awards, the number of shares of Stock available for
issuance under the Plan shall be reduced by 2.38 shares of Stock for purposes of
determining the number of shares of Stock that remain available for issuance
under the Plan. Solely for the purpose of applying the limitation set forth in
Section 4(a), the number of shares available for issuance under the Plan shall
be increased by one (1.00) Share for every one (1.00) Share granted in respect
of an Award of an Option or SAR that again become available for grant pursuant
to this Section 4(b) and two and thirty-eight hundredths (2.38) shares of Stock
for every one (1.00) Share granted in respect of an Award other than an Award of
a Stock Option or Stock Appreciation Right that again become available for grant
pursuant to this Section 4(b).

(c) Individual Award Limitations.

(i) Annual Limit on Awards to Participants. Subject to the annual award
limitations applicable to a non-Employee Director under Section 4(c)(ii), no
Participant may be granted under the Plan in any calendar year Awards of
Restricted Stock, Restricted Stock Units, Performance Shares and Performance
Units covering an aggregate of more than 1,500,000 shares of Stock, subject to
adjustment as described in Section 4(d) or 10(b). No Participant may be granted
Options and SARs with respect to more than 1,500,000 shares of Stock under the
Plan in any calendar year, subject to adjustment as described in Section 4(d) or
10(b). The maximum aggregate cash payment with respect to cash-based Awards
(including Performance Awards) granted in any one fiscal year that may be made
to any Participant shall be $5,000,000.

(ii) Annual Limit on Awards to Non-employee Directors. No non-employee Director
may receive in any calendar year Awards with an aggregate Fair Market Value
greater than $500,000 whether such Awards are settled in cash or in shares of
Stock; provided that this limit shall not apply to any Awards a non-employee
Director elects to receive at Fair Market Value in lieu of all or a portion of
such non-employee Director’s Compensation. “Compensation” for this purpose
includes all cash remuneration payable to a non-employee Director, other than
reimbursement for expenses, and shall include retainer fees for Service on the
Board, fees for serving as Chairman of the Board or for serving as Chairman or
member of any committee of the Board, compensation for work performed in
connection with service on a committee of the Board or at the request of the
Board, any committee of the Board or a Chief Executive Officer or any other kind
or other category of fees or payments which may be put into effect in the
future.

(d) Adjustment in Capitalization.

(i) In the event that the Committee shall determine that any stock dividend,
stock split, share combination, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination, exchange
of shares, warrants or rights offering to purchase Stock at a price
substantially below Fair Market Value, or other similar corporate event affects
the Stock such that an adjustment is required in order to preserve, or to
prevent the enlargement of, the benefits or potential benefits intended to be
made available under this Plan, then an adjustment shall be made, as applicable,
in (1) the number and class of shares of stock available for Awards under
Section 4(a), (2) the limitations in Section 4(c), (3) the shares of Stock that
may become subject to an Award the number and kind of shares of stock or other
securities into which each outstanding share of Stock was changed, for which
each such share of Stock was exchanged, or to which each such share of Stock, as
the case may be, (4) the exercise price applicable to outstanding Awards, and
(5) other value determinations applicable to outstanding Awards. In the event of
any other change in corporate capitalization (including, but not limited to, a
merger, consolidation, any reorganization (whether or not such reorganization
comes within the definition of such term in Section 368 of the Code), or any
partial or complete liquidation of the Company to the extent such events do not
constitute equity restructurings or business combinations within the meaning of
FASB ASC Topic 718, such equitable adjustments described in the foregoing
sentence may be made as determined to be appropriate and equitable by the
Committee to prevent dilution or enlargement of rights. In either case, any such
adjustment shall be conclusive and binding for all purposes of the Plan. Unless
otherwise determined by the Committee, the number of shares of Stock subject to
an Award shall always be a whole number.

 

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(ii) In addition to the adjustments permitted under subparagraph (d)(i) above,
the Committee, in its sole discretion, may make such other adjustments or
modifications in the terms of any Awards that it deems appropriate to reflect
any of the events described in subparagraph (d)(i) above, including, but not
limited to, (1) modifications of performance goals and changes in the length of
Performance Periods, or (2) the substitution of other property of equivalent
value (including, without limitation, cash, other securities and securities of
entities other than the Company that agree to such substitution) for the shares
of Stock available under the Plan or the shares of Stock covered by outstanding
Awards, including arranging for the assumption, or replacement with new awards,
of Awards held by Participants, but in either case only to the extent permitted
by Section 162(m) of the Code with respect to Awards intended to qualify as
performance-based compensation within the meaning of Section 162(m)(4) of the
Code and (3) in connection with any sale of a Subsidiary, arranging for the
assumption, or replacement with new awards, of Awards held by Participants
employed by the affected Subsidiary by the Subsidiary or an entity that controls
the Subsidiary following the sale of such Subsidiary.

(iii) The determination of the Committee as to the foregoing adjustments set
forth in this Section 4(d), if any, shall be made in accordance with Code
Sections 409A or 424, to the extent applicable, and shall conclusive and binding
on Participants under the Plan.

(e) Effect of Plans Operated by Acquired Companies. If a company acquired by the
Company or any Subsidiary or with which the Company or any Subsidiary combines
has shares available under a pre-existing plan approved by shareholders and not
adopted in contemplation of such acquisition or combination, the shares
available for grant pursuant to the terms of such pre-existing plan (as
adjusted, to the extent appropriate, using the exchange ratio or other
adjustment or valuation ratio or formula used in such acquisition or combination
to determine the consideration payable to the holders of common stock of the
entities party to such acquisition or combination) may be used for Awards under
the Plan and shall not reduce the shares of Stock authorized for grant under the
Plan. Awards using such available shares shall not be made after the date awards
or grants could have been made under the terms of the pre-existing plan, absent
the acquisition or combination, and shall only be made to individuals who were
not Employees, non-employee Directors or Consultant prior to such acquisition or
combination.

(f) Minimum Vesting Standards. Any Award granted under this Plan shall be
subject to a minimum vesting period of not less than one year following the date
the applicable Award is granted. Notwithstanding the foregoing, the Committee
may grant Awards covering up to five percent of the total number of shares of
Stock authorized under this Plan without respect to the minimum vesting
standards set forth in this Section 4(f). Nothing in this Section 4(f) shall
preclude the Administrator from taking action, in its sole discretion, to
accelerate the vesting of any Award in connection with or following a holder’s
death, disability, or in connection with a Change in Control.

Section 5. PERFORMANCE AWARDS, PERFORMANCE SHARES AND PERFORMANCE UNITS

(a) Generally. The Committee shall have the authority to determine the
Participants who shall receive Performance Awards, Performance Shares and
Performance Units, the number of Performance Shares and the number and value of
Performance Units each Participant receives for each or any Performance Period,
and the Performance Criteria applicable in respect of such Performance Awards,
Performance Shares and Performance Units for each Performance Period. The
Committee shall determine the duration of each Performance Period (which may
differ from each other), and there may be more than one Performance Period in
existence at any one time as to any Participant or all or any class of
Participants. Each grant of Performance Shares and Performance Units shall be
evidenced by an Award Agreement that shall specify the number of Performance
Shares and the number and value of Performance Units awarded to the Participant,
the Performance Criteria applicable thereto, and such other terms and conditions
not inconsistent with the Plan as the Committee shall determine. No shares of
Stock will be issued at the time an Award of Performance Shares is made, and the
Company shall not be required to set aside a fund for the payment of Performance
Shares or Performance Units. Subject to the terms of the Plan, Performance
Awards may be granted to Participants in such amounts, subject to such
Performance Criteria, and upon such terms, and at any time and from time to
time, as shall be determined by the Committee.

 

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(b) Earned Performance Awards, Performance Shares and Performance Units.
Performance Awards, Performance Shares and Performance Units shall become
earned, in whole or in part, based upon the achievement of one or more
Performance Criteria or other performance conditions achieved during a
Performance Period selected by the Committee. In the case of an Award to any
Executive Officer of Performance Awards, Performance Shares or Performance Units
that are intended to qualify as “performance-based compensation” under Section
162(m) of the Code, such Award must solely be subject to one or more Performance
Criteria selected from among the criteria set forth in Section 5(c) of the Plan.
The Committee may provide, at the time of any grant of Performance Shares or
Performance Units, that if performance relative to the Performance Criteria
exceeds targeted levels, the number of shares issuable in respect of each
Performance Share or the value payable in respect of each Performance Unit shall
be adjusted by such multiple (not in excess of 200%) as the Committee shall
specify.

(c) Performance Criteria. At the discretion of the Committee, Performance
Criteria may be based on the total return to the Company’s shareholders,
inclusive of dividends paid, during the applicable Performance Period
(determined either in absolute terms or relative to the performance of one or
more similarly situated companies or a published index covering the performance
of a number of companies), or upon the relative or comparative attainment of one
or more of the following criteria, whether in absolute terms or relative to the
performance of one or more similarly situated companies or a published index
covering the performance of a number of companies: working capital, book value,
cash flow (including funds from operations), customer satisfaction, combined
ratio, earnings (either in aggregate or on a per-share basis), earnings before
or after either, or any combination of, interest, taxes, depreciation, or
amortization (EBITDA), economic value added, expenses/ costs, gross or net
income, gross or net operating margins, gross or net profits, gross or net
revenues, inventory turns, margins, market share, net income or earnings,
operating income or earnings, operational performance measures, pre-tax income,
productivity ratios and measures, profitability ratios, return measures
(including return on assets, return on equity, return on investment, return on
capital, return on invested capital, gross profit return on investment, gross
margin return on investment), share price (including growth in share price and
total shareholder return), strategic business objectives (including objective
project milestones), or transactions relating to acquisitions or divestitures,
and, in the case of persons who are not Executive Officers, such other criteria
as may be determined by the Committee. Performance Criteria may be established
on a Company-wide basis or with respect to one or more business units or
divisions or Subsidiaries. When establishing Performance Criteria for a
Performance Period, the Compensation Committee shall exclude, unless it
determines otherwise at the time that it establishes the Performance Criteria,
(i) any or all items determined to be unusual in nature and/or infrequent in
occurrence as determined under ASC Topic 225, (ii) charges or costs associated
with restructuring of the Company or any subsidiary, (iii) discontinued
operations, (iv) other unusual or non-recurring items, (v) the cumulative
effects of accounting changes or (vi) such other objective factors as the
Compensation Committee deems appropriate.

Except in the case of Awards to Executive Officers intended to be
“performance-based compensation” under Section 162(m)(4) of the Code, the
Committee may also adjust the Performance Criteria for any Performance Period as
it deems equitable in recognition of unusual or non-recurring events affecting
the Company, changes in applicable tax laws or accounting principles, or such
other factors as the Committee may determine.

(d) Special Rule for Performance Criteria. If, at the time of grant, the
Committee intends an Award of Performance Awards, Performance Shares or
Performance Unit to qualify as “performance-based compensation” within the
meaning of Section 162(m)(4) of the Code, (i) the Committee must establish the
Performance Criteria for the applicable Performance Period no later than the
90th day after the Performance Period begins (or by such other date as may be
required under Section 162(m) of the Code) and (ii) the Committee may not in any
event increase the amount of compensation payable to a covered employee (within
the meaning of Section 162(m) of the Code) upon attainment of the Performance
Criteria above the maximum amount approved by the Committee in clause (i) above.

(e) Certification of Attainment of Performance Criteria. As soon as practicable
after the end of a Performance Period and prior to any payment in respect of
such Performance Period, the Committee shall certify the amount of the
Performance Award, the number of Performance Shares, or the number and value of
Performance Units, that have been earned on the basis of performance in relation
to the established Performance Criteria.

 

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(f) Payment of Awards. Earned Performance Awards, Performance Shares and the
value of earned Performance Units shall be distributed to the Participant or, if
the Participant has died, to the Participant’s Designated Beneficiary, as soon
as practicable after the expiration of the Performance Period and the
Committee’s certification under Section 5(e) above, provided that (i) earned
Performance Awards, Performance Shares and the value of earned Performance Units
shall not be distributed to a Participant until any other conditions on payment
of such Awards established by the Committee have been satisfied, and (ii) any
amounts payable in respect of Performance Awards, Performance Shares or
Performance Units pursuant to Section 9 of the Plan shall be distributed in
accordance with Section 9. The Committee shall determine whether Performance
Awards, Performance Shares and the value of earned Performance Units are to be
distributed in the form of cash, shares of Stock or in a combination thereof,
with the value or number of shares of Stock payable to be determined based on
the Fair Market Value of Stock on the date of the Committee’s certification
under Section 5(e) above.

(g) Newly Eligible Participants. Notwithstanding anything in this Section 5 to
the contrary, the Committee shall be entitled to make such rules, determinations
and adjustments as it deems appropriate with respect to any Participant who
becomes eligible to receive Performance Awards, Performance Shares or
Performance Units after the commencement of a Performance Period.

(h) Termination of Service.

(i) Special Termination or Retirement. Unless otherwise determined by the
Committee at or after the grant date, or except as provided in an employment or
individual severance agreement between a Participant and an Employer, a
Participant whose Service terminates by reason of a Special Termination or due
to Retirement shall be entitled to a distribution of the same Performance
Awards, number of Performance Shares, or the value of Performance Units that
would have been payable for the Performance Period had his or her Service
continued until the end of the applicable Performance Period (based on actual
performance), prorated for the Participant’s length of Service during the
Performance Period. Any Performance Awards, Performance Shares or value of
Performance Units becoming payable in accordance with the preceding sentence
shall be paid at the same time as the Performance Awards, Performance Shares and
the value of Performance Units are paid to other Participants (or at such
earlier time as the Committee may permit). Any rights that a Participant or
Designated Beneficiary may have in respect of any Performance Awards,
Performance Shares or Performance Units outstanding at the date of the Special
Termination or Retirement that are not available to be earned or that are not
earned in accordance with this Section 5(h)(i) shall be forfeited and canceled,
effective as of the date of the Participant’s termination of Service.

(ii) Termination for any Other Reason. Unless otherwise determined by the
Committee at or after the grant date, or except as provided in an employment or
individual severance agreement between a Participant and an Employer, if a
Participant’s Service is terminated for any reason other than a Special
Termination or Retirement prior to vesting in the Performance Awards,
Performance Shares or Performance Units, all of the Participant’s rights to
Performance Awards, Performance Shares and Performance Units shall be
immediately forfeited and canceled as of the date of such termination of
Service. Notwithstanding the immediately preceding sentence, a Participant’s
rights in respect of unearned Performance Awards, Performance Shares and
Performance Units shall in all events be immediately forfeited and canceled as
of the date of the Participant’s termination of Service for Cause.

(iii) Termination in Connection with a Change in Control. Notwithstanding
anything to the contrary in this Section 5(h), Section 9 of the Plan shall
determine the treatment of Performance Awards, Performance Shares and
Performance Units upon a Change in Control, including the treatment of such
Awards granted to any Participant whose Service is involuntarily terminated by
an Employer other than for Cause or whose Service is terminated due to a Special
Termination, in either case, on or after the date on which the shareholders of
the Company approve the transaction giving rise to the Change in Control, but
prior to the consummation thereof.

 

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Section 6. RESTRICTED STOCK AND RESTRICTED STOCK UNITS

(a) Grant. Restricted Stock and Restricted Stock Units may be granted to
Participants at such time or times as shall be determined by the Committee. The
grant date of any Restricted Stock or Restricted Stock Units under the Plan will
be the date on which such Restricted Stock or Restricted Stock Units are awarded
by the Committee, or such other date as the Committee shall determine.
Restricted Stock and Restricted Stock Units shall be evidenced by an Award
Agreement that shall specify (i) the number of shares of Restricted Stock and
the number of Restricted Stock Units granted to each Participant, (ii) the
Restriction Period(s) applicable thereto and (iii) such other terms and
conditions not inconsistent with the Plan as the Committee shall determine,
including customary representations, warranties and covenants with respect to
securities law matters. Awards of Restricted Stock Units shall be evidenced by a
bookkeeping entry in the Company’s records (or by such other reasonable method
as the Company shall determine from time to time).

(b) Vesting. Subject to Section 4(f), Restricted Stock and Restricted Stock
Units granted to a Participant under the Plan shall be subject to a Restriction
Period as specified in the Award Agreement, provided that the Participant
continuously provides Service through such vesting date. The Committee in its
discretion may provide that the Restriction Period on Restricted Stock and
Restricted Stock Units shall lapse, in whole or in part, upon the achievement of
one or more Performance Criteria or other performance conditions, during a
Performance Period selected by the Committee. In the case of an Award to any
Executive Officer of Restricted Stock or Restricted Stock Units that are
intended to qualify as “performance-based compensation” under Section 162(m) of
the Code, such Award shall be (i) solely subject to Performance Criteria
selected from among the criteria set forth in Section 5(c) of the Plan,
(ii) subject to the same restrictions and limitations applicable to Awards of
Performance Shares under Section 5(d) of the Plan and (iii) subject to the
certification required under Section 5(e) of the Plan.

(c) Dividends and Dividend Equivalents. The Committee shall determine whether
and to what extent dividends payable on Stock will be credited, or paid
currently, to a Participant in respect of an Award of Restricted Stock or
Restricted Stock Units provided however, that in the case of an Award of
Restricted Stock or Restricted Stock Units as to which vesting depends upon the
satisfaction of a service condition and/or one or more performance conditions,
the payment of dividends or dividend equivalents shall be subject to the same
service conditions and/or performance conditions, as applicable to the
underlying Award. A Participant holding Restricted Stock Units shall not be
entitled to exercise any voting rights and any other rights as a shareholder
with respect to shares of Stock underlying such Award.

(d) Settlement of Restricted Stock and Restricted Stock Units. At the expiration
of the Restriction Period for any Restricted Stock, the Company shall remove the
restrictions applicable to the Restricted Stock, and shall, upon request,
deliver the stock certificates evidencing such Restricted Stock to the
Participant or the Participant’s legal representative (or otherwise evidence the
issuance of such shares free of any restrictions imposed under the Plan). At the
expiration of the Restriction Period for any Restricted Stock Units, for each
such Restricted Stock Unit, the Participant shall receive, in the Committee’s
discretion, (i) a cash payment equal to the Fair Market Value of one share of
Stock as of such payment date, (ii) one share of Stock or (iii) any combination
of cash and shares of Stock having an aggregate value equal to the Fair Market
Value of one share of Stock.

(e) Restrictions on Transfer. Except as provided herein or in an Award
Agreement, shares of Restricted Stock and Restricted Stock Units may not be
sold, assigned, transferred, pledged or otherwise encumbered during the
Restriction Period. Any such attempt by the Participant to sell, assign,
transfer, pledge or encumber shares of Restricted Stock and Restricted Stock
Units without complying with the provisions of the Plan shall be void and of no
effect.

(f) Termination of Service.

(i) Special Termination. Unless otherwise determined by the Committee at or
after the grant date, or except as provided in an employment or individual
severance agreement between a Participant and an Employer, if a Participant’s
Service terminates by reason of a Special Termination during the Restriction
Period, a pro rata portion of any Stock related to Restricted Stock or a
Restricted Stock Unit held by such Participant shall become nonforfeitable at
the date of such termination, based on the number of full calendar months of
such Participant’s Service relative to the number of full calendar months in the
relevant Restriction Period.

 

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(ii) Retirement. Unless otherwise determined by the Committee at or after the
grant date, or except as provided in an employment or individual severance
agreement between a Participant and an Employer, if a Participant’s Service
terminates by reason of Retirement during the Restriction Period, a pro rata
portion of any Stock related to a Restricted Stock Unit held by such Participant
shall become nonforfeitable at the date of such termination, based on the number
of full calendar months of such Participant’s Service relative to the number of
full calendar months in the relevant Restriction Period. If shares of Restricted
Stock Units are subject to the achievement of Performance Criteria, the pro rata
portion of any Stock earned with respect to Restricted Stock Units described in
the previous sentence shall only vest based on the actual achievement (if any)
of the Performance Criteria and be paid to the Participant at the same time as
the Restricted Stock Units are paid to other Participants.

(iii) Termination for any Other Reason. Unless otherwise determined by the
Committee at or after the grant date, or except as provided in an employment or
individual severance agreement between a Participant and an Employer, if a
Participant’s Service terminates for any reason other than a Special Termination
or Retirement during the Restriction Period, any Restricted Stock or Restricted
Stock Units held by such Participant shall be forfeited and cancelled as of the
date of such termination of Service. Notwithstanding the immediately preceding
sentence, a Participant’s rights in respect of unvested Restricted Stock or
Restricted Stock Units shall in all events be immediately forfeited and canceled
as of the date of the Participant’s termination of Service for Cause.

(iv) Termination in Connection with a Change in Control. Notwithstanding
anything to the contrary in this Section 6(f), Section 9 of the Plan shall
determine the treatment of Restricted Stock and Restricted Stock Units upon a
Change in Control, including the treatment of such Awards granted to any
Participant whose Service is involuntarily terminated by an Employer other than
for Cause or whose Service is terminated due to a Special Termination, in either
case, on or after the date on which the shareholders of the Company approve the
transaction giving rise to the Change in Control, but prior to the consummation
thereof.

Section 7. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

(a) Grant. Options and Stock Appreciation Rights (“SARs”) may be granted to
Participants at such time or times as shall be determined by the Committee. The
Committee shall have the authority to grant Incentive Stock Options,
Non-statutory Stock Options and SARs. The grant date of an Option or SAR under
the Plan will be the date on which the Option or SAR is awarded by the
Committee, or such other future date as the Committee shall determine in its
sole discretion. Each Option or SAR shall be evidenced by an Award Agreement
that shall specify the type of Option Award granted, the exercise price, the
duration of the Option or SAR, the number of shares of Stock to which the Option
or SAR pertains, the conditions upon which the Option or SAR or any portion
thereof shall become vested or exercisable and such other terms and conditions
not inconsistent with the Plan as the Committee shall determine, including
customary representations, warranties and covenants with respect to securities
law matters. For the avoidance of doubt, Incentive Stock Options may only be
granted to Employees.

(b) Exercise Price. The Committee shall establish the exercise price at the time
each Option or SAR is granted, which price shall not be less than 100% of the
Fair Market Value of the Stock on the grant date. Notwithstanding the foregoing,
if an Incentive Stock Option is granted to an Employee who, at the time of
grant, owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or any Affiliate thereof, the exercise price
shall be at least 110% of the Fair Market Value of the Stock on the grant date.

(c) Vesting and Exercisability. Subject to Section 4(f), each Option and SAR
awarded to a Participant under the Plan shall vest and become exercisable as
specified in the applicable Award Agreement, provided that the Participant
continuously provides Service through such vesting date. The Committee, in its
discretion, may establish performance conditions with respect to the
exercisability of any Option or SAR during a Performance Period selected by the
Committee. No Option or SAR shall be exercisable on or after the tenth
anniversary of its grant date (the fifth anniversary of the grant date for an
Incentive Stock Option that is granted to an Employee who, at the time of grant,
owns stock possessing more than 10% of the total combined voting power of all
classes

 

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of stock of the Company or any Affiliate thereof). The Committee may impose such
conditions with respect to the exercise of Options or SARs, including without
limitation, any relating to the application of federal or state securities laws,
as it may deem necessary or advisable.

(d) Payment of Option Exercise Price. No Stock shall be delivered pursuant to
any exercise of an Option until payment in full of the exercise price therefore
is received by the Company. Such payment may be made in cash or its equivalent
or, if permitted by the Committee, (i) by exchanging shares of Stock owned by
the Participant and which are not the subject of any pledge or other security
interest, (ii) through an arrangement with a broker approved by the Company
whereby payment of the exercise price is accomplished with the proceeds of the
sale of Stock or (iii) by a combination of the foregoing, provided that the
combined value of all cash and cash equivalents and the Fair Market Value of any
such Stock so tendered to the Company, valued as of the date of such tender, is
at least equal to such exercise price of the portion of the Option being
exercised. Additionally, to the extent authorized by the Committee (whether at
or after the grant date), Options may be Net Exercised subject to such terms and
conditions as the Committee may from time to time impose. The Company may not
make a loan to a Participant to facilitate such Participant’s exercise of any of
his or her Options or payment of taxes.

(e) Payment of SAR Amount. Upon exercise of a SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying: (i) the excess of the Fair Market Value of a share of Stock on the
date of exercise over the grant price; by (ii) the number of shares of Stock
with respect to which the SAR is exercised. At the sole discretion of the
Committee, the payment upon SAR exercise may be in cash, in shares of Stock of
equivalent value, or in some combination thereof.

(f) Incentive Stock Option Status. Notwithstanding anything in this Plan to the
contrary, no term of this Plan relating to Incentive Stock Options shall be
interpreted, amended or altered, nor shall any discretion or authority granted
under the Plan be so exercised, so as to disqualify the Plan under Section 422
of the Code.

(g) Termination of Service.

(i) Special Termination. Unless otherwise determined by the Committee at or
after the grant date, or except as provided in an employment or individual
severance agreement between a Participant and an Employer, if the Participant’s
Service is terminated due to a Special Termination, then all Options and SARs
held by the Participant on the effective date of such Special Termination shall
vest and become exercisable and shall remain exercisable until the first to
occur of (A) the second anniversary of the effective date of such Special
Termination (or, for Incentive Stock Options, the first anniversary of such
Special Termination) or (B) the expiration date of the Option or SAR.

(ii) Termination for any Other Reason. Unless otherwise determined by the
Committee at or after the grant date, or except as provided in an employment or
individual severance agreement between a Participant and an Employer, (A) if the
Participant’s Service is voluntarily or involuntarily terminated for any reason
other than a Special Termination prior to the expiration date of the Option or
SAR, any Options and SARs that have not become vested and exercisable on or
before the effective date of such termination shall terminate on such effective
date, and (B) if the Participant’s Service is terminated voluntarily or
involuntarily for any reason other than a Special Termination or for Cause, any
vested and exercisable Options and SARs then held by the Participant shall
remain exercisable for a period of 90 days following the effective date of such
termination of Service.

(iii) Termination for Cause. Notwithstanding anything contrary in this Section
7(g), if the Participant’s Service is terminated for Cause, then all Options or
SARs (whether or not then vested or exercisable) shall terminate and be canceled
immediately upon such termination.

(iv) Termination in Connection with a Change in Control. Notwithstanding
anything to the contrary in this Section 7(g), Section 9 of the Plan shall
determine the treatment of Options and SARs upon a Change in Control, including
the treatment of Options and SARs granted to any Participant whose Service is
involuntarily terminated by an Employer other than for Cause or whose Service is
terminated due to a Special Termination, in either case, on or after the date on
which the shareholders of the Company approve the transaction giving rise to the
Change in Control, but prior to the consummation thereof.

(v) Limited Extension of Exercisable Period. If the exercise period of an Option
or SAR would expire at a time when trading in the Stock is prohibited by federal
securities law or the Company’s insider trading policy, the expiration of the
Option or SAR shall be automatically extended until the thirtieth (30th)
calendar day following the expiration of such prohibition (so long as such
extension shall not violate Section 409A).

 

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Section 8. OTHER STOCK-BASED AWARDS

(a) Other Stock Based Awards. The Committee may grant Other Stock-Based Awards,
including, but not limited to, the outright grant of Stock in satisfaction of
obligations of the Company or any Affiliate thereof under another compensatory
plan, program or arrangement, modified Awards intended to comply with or
structured in accordance with the provisions of applicable non-U.S. law or
practice, or the sale of Stock, in such amounts and subject to such terms and
conditions as the Committee shall determine, including, but not limited to, the
satisfaction of Performance Criteria. Subject to Section 4(f), each Other-Stock
Based Award shall be evidenced by an Award Agreement that shall specify the
terms and conditions applicable thereto. Any Other Stock-Based Award may entail
the transfer of actual shares of Stock or the payment of the value of such Award
in cash based upon the value of a specified number of shares of Stock, or any
combination of the foregoing, as determined by the Committee. The terms of any
Other Stock-Based Award need not be uniform in application to all (or any class
of) Participants, and each Other Stock-Based Award granted to any Participant
(whether or not at the same time) may have different terms.

(b) Termination of Service. In addition to any other terms and conditions that
may be specified by the Committee, each Other Stock-Based Award shall specify
the impact of a termination of Service upon the rights of a Participant in
respect of such Award. At the discretion of the Committee, such conditions may
be the same as apply with respect to Restricted Stock or Restricted Stock Units,
or may be contain terms that are more or less favorable to the Participant.

Section 9. CHANGE IN CONTROL

(a) In General. If the Participant has in effect an employment, retention,
severance or similar agreement with the Company that discusses the effect of a
Change in Control on the Participant’s awards (a “Separate Agreement”), then the
terms of the Separate Agreement shall control. If no Separate Agreements exist,
except as otherwise specified in an Award Agreement, the provisions of this
Section 9 shall apply upon a Change in Control with respect to Awards granted on
or after the Effective Date (for the avoidance of doubt, Awards granted prior to
the Effective Date shall be governed by the terms of the Plan in effect prior to
the Effective Date). Upon a Change in Control, each outstanding Award may be
assumed by the New Employer or replaced with an award that preserves the
existing value of the Award at the time of the Change in Control and shall
provide for subsequent payout in accordance with the same vesting schedule
applicable to the original Award; provided, however, that with respect to any
Awards that are assumed or replaced, such assumed or replacement awards shall
(i) be subject to “double-trigger” vesting as follows: if a Participant’s
Service is involuntarily terminated (for a reason other than Cause) or the
Participant terminates his or her Service due to Good Reason within 24 months
following the Change in Control, such assumed or replacement awards shall
immediately vest upon such termination of Service, and (ii) if assumed or
replaced in relation to a Performance Award, Performance Share or Performance
Unit outstanding under this Plan, also be (A) no longer subject to any
Performance Criteria, which shall be deemed satisfied at the higher of actual
performance through the date of the Change in Control or the target performance
level for such assumed or replaced award and (B) subject only to a time-based
vesting period substantially equivalent to the applicable remaining Performance
Period for such award, subject to acceleration pursuant to (i) above.

(b) Failure to Assume Awards. In the event the New Employer after a Change in
Control does not assume the Award or substitute for the Award an economically
equivalent award that meets the requirements of Section 9(a) above,
notwithstanding any other provision of the Plan to the contrary, immediately
upon occurrence of the Change in Control (i) all outstanding Options, SARs and
Other Stock-Based Awards shall become vested and exercisable; (ii) the
Restriction Period on Restricted Stock and Restricted Stock Units shall lapse;
(iii) each outstanding Performance Award and Performance Share shall be
cancelled in exchange for a payment equal to

 

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the payment that would have been payable had each such Performance Award or
Performance Share been deemed equal to 100% (or such greater or lesser
percentage as the Committee shall specify at the grant date or such greater
percentage as the Committee shall specify after the grant date) of the amount
earned upon full achievement of applicable Performance Criteria; and (iv) each
outstanding Performance Unit shall be cancelled in exchange for a payment equal
to the value that would have been payable had each such Performance Unit been
deemed equal to 100% (or such greater or lesser percentage as the Committee
shall specify at the grant date or such greater percentage as the Committee
shall specify after the grant date) of its initially established dollar or local
currency denominated value. Additionally, in the event the New Employer after a
Change in Control does not assume an Award or substitute for an Award an
economically equivalent award that meets the requirements of Section 9(a) above,
the Committee (as constituted prior to the Change in Control) may provide that
in connection with the Change in Control (i) each Option and SAR shall be
cancelled in exchange for an amount (payable in accordance with Section 9(c)
below) equal to the excess, if any, of the Change in Control Price over the
exercise price for such Option or SAR and (ii) each share of Restricted Stock
and each Restricted Stock Unit shall be cancelled in exchange for an amount
(payable in accordance with Section 9(c) below) equal to the Change in Control
Price, multiplied by the number of shares of Stock covered by such Award.
Notwithstanding any provision to the contrary, the settlement of Awards under
this Section 9(b) shall be made pursuant to its original schedule if necessary
to comply with Code Section 409A).

(c) Payments. Payment of any amounts calculated in accordance with Sections 9(a)
and (b) shall be made in cash or, if determined by the Committee (as constituted
prior to the Change in Control), in shares of the stock of the New Employer
having an aggregate fair market value equal to such amount or in a combination
of such shares of stock and cash. All amounts payable hereunder shall be payable
in full, as soon as reasonably practicable, but in no event later than 10
business days, following the date of the Participant’s termination of Service or
the Change in Control, as applicable. For purposes hereof, the fair market value
of one share of stock of the New Employer shall be determined by the Committee
(as constituted prior to the consummation of the transaction constituting the
Change in Control), in good faith. Notwithstanding any provision to the
contrary, the settlement of Awards under this Section 9(c) shall be made
pursuant to its original schedule if necessary to comply with Code Section
409A).

(d) Termination of Service Prior to Change in Control. In the event that any
Change in Control occurs as a result of any transaction described in clause
(iii) or (iv) of the definition of such term, any Participant whose Service is
involuntarily terminated by an Employer other than for Cause, by the Participant
for Good Reason or due to a Special Termination, in each case, on or after the
date on which the shareholders of the Company approve the transaction giving
rise to the Change in Control, but prior to the consummation thereof, shall be
treated, solely for purposes of this Plan (including, without limitation, this
Section 9), as continuing in Service until the occurrence of such Change in
Control, and to have been terminated immediately thereafter.

Section 10. EFFECTIVE DATE, AMENDMENT, MODIFICATION, AND TERMINATION OF THE PLAN
OR AWARDS

(a) General. The Plan shall be effective on the Effective Date, and shall
continue in effect, unless sooner terminated pursuant to this Section 10, until
the 10th anniversary of the Effective Date, after which no new Awards may be
granted under the Plan. The Board may at any time in its sole discretion, for
any reason whatsoever, terminate or suspend the Plan, and from time to time may
amend or modify the Plan; provided that without the approval by a majority of
the votes cast at a duly constituted meeting of shareholders of the Company, no
amendment or modification to the Plan may (i) materially increase the benefits
accruing to Participants under the Plan, (ii) except as otherwise expressly
provided in Section 4(d) of the Plan, materially increase the number of shares
of Stock subject to the Plan or the individual Award limitations specified in
Section 4(c) of the Plan, (iii) materially modify the requirements for
participation in the Plan or (iv) materially modify the Plan in any other way
that would require shareholder approval under any regulatory requirement that
the Committee determines to be applicable. In the event that the Committee shall
determine that such action would, taking into account such factors as it deems
relevant, be beneficial to the Company, the Committee may affirmatively act to
amend, modify or terminate any outstanding Award at any time prior to payment or
exercise in any manner not inconsistent with the terms of the Plan, subject to
Section 10(b), including without limitation, to change the date or dates as of
which (A) an Option becomes exercisable, (B) a Performance Award,

 

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Performance Share or Performance Unit is deemed earned, or (C) Restricted Stock
and Restricted Stock Units becomes nonforfeitable, except that no outstanding
Option or SAR may be amended or otherwise modified or exchanged (other than in
connection with a transaction described in Section 4(d) of the Plan) in a manner
that would have the effect of (I) reducing the exercise price of an outstanding
Option or an outstanding SAR, (II) cancelling outstanding Options or SARs in
exchange for other Options or SARs with an exercise price that is less than the
exercise price of the cancelled Option or the cancelled SAR or (III) cancelling
an outstanding Option or outstanding SAR with an exercise price that is less
than the Fair Market Value of a share of Stock on the date of cancellation in
exchange for cash or another Award. Any such action by the Committee shall be
subject to the Participant’s consent if the Committee determines that such
action would adversely affect in any material way the Participant’s rights under
such Award, whether in whole or in part. No amendment, modification, or
termination of the Plan or any Award shall adversely affect in any material way
any Award theretofore granted under the Plan, without the consent of the
Participant. Notwithstanding any other provision of the Plan to the contrary,
the Board may amend the Plan and the Board or the Committee may amend an Award
Agreement without Participant consent, to take effect retroactively or
otherwise, as deemed necessary or advisable for the purpose of conforming the
Plan or an Award Agreement to (i) any law relating to plans of this or similar
nature, and to the administrative regulations and rulings promulgated
thereunder, (ii) any applicable exchange requirements and (iii) any compensation
recoupment policy adopted by the Company.

(b) Adjustment of Awards Upon the Occurrence of Certain Events.

(i) Equity Restructurings. If the outstanding shares of Stock are increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities of the Company through a non-reciprocal transaction between the
Company and its stockholders that causes the per share fair value underlying an
Award to change, such as stock dividend, stock split, spin-off, rights offering,
recapitalization through a large, non-recurring cash dividend, or other similar
transaction, a proportionate adjustment shall be made to the number or kind of
shares or securities allocated to Awards that have been granted prior to any
such change. Any such adjustment in an outstanding Option or SAR shall be made
without change in the aggregate exercise price applicable to the unexercised
portion of such Option or SAR but with a corresponding adjustment in the
exercise price for each share of Stock or other unit of any security covered by
such Option or SAR.

(ii) Reciprocal Transactions. The Board may, but shall not be obligated to, make
an appropriate and proportionate adjustment to an Award or to the exercise Price
of any outstanding Award, and/or grant an additional Award to the holder of any
outstanding Award, to compensate for the diminution in the intrinsic value of
the shares of Stock resulting from any reciprocal transaction.

(iii) Certain Unusual or Nonrecurring Events. In recognition of unusual or
nonrecurring events affecting the Company or its financial statements, or in
recognition of changes in applicable laws, regulations, or accounting
principles, and, whenever the Board determines that adjustments are appropriate
in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, the Board may, using
reasonable care, make adjustments in the terms and conditions of, and the
criteria included in, Awards. In case of an Award designed to qualify for the
Performance-Based Exception (as defined in Code Section 409A), the Board will
take care not to make an adjustment that would disqualify the Award.

(iv) Fractional Shares and Notice. Fractional shares of Stock resulting from any
adjustment in Awards pursuant to this Section 10(b) may be settled in cash or
otherwise as the Board determines. The Company will give notice of any
adjustment to each Participant who holds an Award that has been adjusted and the
adjustment (whether or not such notice is given) will be effective and binding
for all Plan purposes.

Section 11. DEFERRALS AND SECTION 409A

(a) Deferrals. As provided in an Award Agreement, the Board may permit a
Participant to defer receipt of cash or shares of Stock that would otherwise be
due to him or her under the Plan or otherwise create a deferred compensation
arrangement (as defined in Section 409A) in accordance with this Section 11. For
purposes of the Plan, “Section 409A” shall mean Code Section 409A and any
applicable regulations or interpretative authority promulgated thereunder.

 

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(b) Initial Deferral Elections. The deferral of an Award or compensation
otherwise payable to the Participant shall be set forth in the terms of the
Award Agreement or as elected by the Participant pursuant to such rules and
procedures as the Board may establish. Except as may otherwise be provided in
the Award Agreement, any such initial deferral election by a Participant will
designate a time and form of payment and shall be made at such time as provided
below:

(i) A Participant may make a deferral election with respect to an Award (or
compensation giving rise thereto) at any time in any calendar year preceding the
year in which services giving rise to such compensation or Award are rendered.

(ii) In the case of the first year in which a Participant becomes eligible to
receive an Award or defer compensation under the Plan (aggregating other plans
of its type as set forth in Section 409A), the Participant may make a deferral
election within 30 days after the date the Participant becomes eligible to
participate in the Plan; provided that such election may apply only with respect
to the portion of the Award or compensation attributable to services to be
performed subsequent to the election.

(iii) Where the grant of an Award or payment of compensation, or the applicable
vesting is conditioned upon the satisfaction of pre-established organizational
or individual performance criteria relating to a performance period of at least
12 consecutive months in which the Participant performs Service, a Participant
may make a deferral election no later than 6 months prior to the end of the
applicable performance period.

(iv) Where the vesting of an Award is contingent upon the Participant’s
continued Service for a period of no less than 13 months, the Participant may
make a deferral election within 30 days of receiving an Award. Any such deferral
election must defer receipt for a period of at least two years.

(v) A Participant may make a deferral election in other circumstances and at
such times as may be permitted under Section 409A.

(c) Distribution Dates. Any deferred compensation arrangement created under the
Plan shall be distributed at such times as provided in the Award Agreement,
which may be upon the earliest or latest of one or more of the following:

(i) A fixed date as set forth in the Award Agreement or pursuant to a
Participant’s election;

(ii) the Participant’s death;

(iii) the Participant’s disability, as defined in Section 409A;

(iv) a change in control event, as defined in Section 409A;

(v) an Unforeseeable Emergency, as defined in Section 409A and implemented by
the Board;

(vi) a Participant’s separation of Service, as defined in Section 409A; or

(vii) such other events as permitted under Section 409A.

(d) Redeferrals. The Company, in its discretion, may permit a Participant to
make a subsequent election to delay a distribution date, or, as applicable, to
change the form of distribution payments, attributable to one or more events
triggering a distribution, so long as (i) such election may not take effect
until at least twelve (12) months after the election is made, (ii) such election
defers the distribution for a period of not less than five years from the date
such distribution would otherwise have been made, and (iii) such election may
not be made less than twelve (12) months prior to the date the distribution was
to be made.

(e) Termination of Deferred Compensation Arrangements. The Company may in its
discretion terminate the deferred compensation arrangements created under the
Plan subject to the following:

(i) the arrangement may be terminated within the 30 days preceding, or 12 months
following, a change in control, as defined in Section 409A, provided that all
payments under such arrangement are distributed in full within 12 months after
such termination;

 

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(ii) the arrangement may be terminated in the Company’s discretion at any time
provided that (A) all deferred compensation arrangements of similar type
maintained by the Company are terminated, (B) all payments are made at least 12
months and no more than 24 months after such termination, and (C) the Company
does not adopt a new arrangement of similar type for a period of five years
following the termination of the arrangement; and (iii) the arrangement may be
terminated within 12 months of a corporate dissolution taxed under Code
Section 331 or with the approval of a bankruptcy court pursuant to 11 U.S.C.
503(b)(1)(A) provided that the payments under the arrangement are distributed by
the latest of the (A) the end of the calendar year of such termination, (B) the
calendar year in which such payments are fully vested, or (C) the first calendar
year in which such payment is administratively practicable.

(f) Section 409A Savings Clause. Notwithstanding anything in this Plan to the
contrary, no terms of this Plan relating to Awards or any deferral with respect
thereto shall be interpreted, amended or altered, nor shall any discretion or
authority granted under the Plan be so exercised, so as to cause an Award, or
the deferral or payment thereof, to become subject to interests and additional
tax under Section 409A. Notwithstanding any other provision in the Plan to the
contrary, if a Participant is a “Specified Employee,” as that term is used in
Section 409A, at the time of his or her separation from service, no amount that
is subject to Code Section 409A and that becomes payable by reason of such
separation from service shall be paid to such Participant before the earlier of
(i) the expiration of the six-month period measured from the date of the
Participant’s separation from service, and (ii) within 30 days following the
Participant’s death.

Section 12. GENERAL PROVISIONS

(a) Withholding. The Employer shall have the right to deduct from all amounts
paid to a Participant in cash (whether under this Plan or otherwise) any amount
required by law to be withheld in respect of Awards under this Plan as may be
necessary in the opinion of the Employer to satisfy any applicable tax
withholding requirements under the laws of any country, state, province, city or
other jurisdiction, including but not limited to income taxes, capital gains
taxes, transfer taxes, and social security contributions that are required by
law to be withheld. In the case of payments of Awards in the form of Stock, at
the Committee’s discretion, the Participant shall be required to either pay to
the Employer the amount of any taxes required to be withheld with respect to
such Stock or, in lieu thereof, the Employer shall have the right to retain (or
the Participant may be offered the opportunity to elect to tender) the number of
shares of Stock whose Fair Market Value equals such amount required to be
withheld provided however that such amount may not exceed the maximum statutory
withholding rate.

(b) Nontransferability of Awards. No Award shall be assignable or transferable
except by will or the laws of descent and distribution; provided that the
Committee may permit (on such terms and conditions as it shall establish) a
Participant to transfer an Award for no consideration to the Participant’s
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the Participant’s household (other than a
tenant or employee), a trust in which these persons have all of the beneficial
interest and any other entity in which these persons (or the Participant) own
all of the voting interests (“Permitted Transferees”). Except to the extent
required by law, no right or interest of any Participant shall be subject to any
lien, obligation or liability of the Participant. All rights with respect to
Awards granted to a Participant under the Plan shall be exercisable during the
Participant’s lifetime only by such Participant or, if applicable, his or her
Permitted Transferee(s). The rights of a Permitted Transferee shall be limited
to the rights conveyed to such Permitted Transferee, who shall be subject to and
bound by the terms of the agreement or agreements between the Participant and
the Company.

(c) No Limitation on Compensation. Nothing in the Plan shall be construed to
limit the right of the Company to establish other plans or to pay compensation,
in cash or property, in a manner which is not expressly authorized under the
Plan.

(d) No Right to Employment. No person shall have any claim or right to be
granted an Award, and the grant of an Award shall not be construed as giving a
Participant the right to be retained in the employ of the

 

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Employer. The grant of an Award hereunder, and any future grant of Awards under
the Plan is entirely voluntary, and at the complete discretion of the Company.
Neither the grant of an Award nor any future grant of Awards by the Company
shall be deemed to create any obligation to grant any further Awards, whether or
not such a reservation is explicitly stated at the time of such a grant.

The Plan shall not be deemed to constitute, and shall not be construed by the
Participant to constitute, part of the terms and conditions of employment and
participation in the Plan shall not be deemed to constitute, and shall not be
deemed by the Participant to constitute, an employment or labor relationship of
any kind with an Employer. Each Employer expressly reserves the right at any
time to dismiss a Participant free from any liability, or any claim under the
Plan, except as provided herein and in any agreement entered into with respect
to an Award. The Company expressly reserves the right to require, as a condition
of participation in the Plan, that Award recipients agree and acknowledge the
above in writing. Further, the Company expressly reserves the right to require
Award recipients, as a condition of participation, to consent in writing to the
collection, transfer from the Employer to the Company and third parties, storage
and use of personal data for purposes of administering the Plan.

(e) No Rights as Shareholder. Subject to the provisions of the applicable Award
contained in the Plan and in the Award Agreement, no Participant, Permitted
Transferee or Designated Beneficiary shall have any rights as a shareholder with
respect to any shares of Stock to be distributed under the Plan until he or she
has become the holder thereof.

(f) Construction of the Plan. The validity, construction, interpretation,
administration and effect of the Plan and of its rules and regulations, and
rights relating to the Plan, shall be determined solely in accordance with the
laws of the State of Illinois (without reference to the principles of conflicts
of law).

(g) Compliance with Legal and Exchange Requirements. The Plan, the granting and
exercising of Awards thereunder, and any obligations of the Company under the
Plan, shall be subject to all applicable federal, state, and foreign country
laws, rules, and regulations, and to such approvals by any regulatory or
governmental agency as may be required, and to any rules or regulations of any
exchange on which the Stock is listed. The Company, in its discretion, may
postpone the granting and exercising of Awards, the issuance or delivery of
Stock under any Award or any other action permitted under the Plan to permit the
Company, with reasonable diligence, to complete such stock exchange listing or
registration or qualification of such Stock or other required action under any
federal, state or foreign country law, rule, or regulation and may require any
Participant to make such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of Stock in
compliance with applicable laws, rules, and regulations. The Company shall not
be obligated by virtue of any provision of the Plan to recognize the exercise of
any Award or to otherwise sell or issue Stock in violation of any such laws,
rules, or regulations, and any postponement of the exercise or settlement of any
Award under this provision shall not extend the term of such Awards. Neither the
Company nor its directors or officers shall have any obligation or liability to
a Participant with respect to any Award (or Stock issuable thereunder) that
shall lapse because of such postponement.

(h) Indemnification. Each person who is or shall have been a member of the
Committee and each delegate of such Committee shall be indemnified and held
harmless by the Company against and from any loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him or her in connection with
or resulting from any claim, action, suit, or proceeding to which he or she may
be made a party or in which he or she may be involved in by reason of any action
taken or failure to act under the Plan and against and from any and all amounts
paid by him or her in settlement thereof, with the Company’s approval, or paid
by him or her in satisfaction of any judgment in any such action, suit, or
proceeding against him or her, provided that the Company is given an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it personally. The foregoing right of
indemnification shall not be exclusive and shall be independent of any other
rights of indemnification to which such persons may be entitled under the
Company’s Certificate of Incorporation or By-laws, by contract, as a matter of
law, or otherwise.

(i) No Impact On Benefits. Except as may otherwise be specifically stated under
any employee benefit plan, policy or program, no amount payable in respect of
any Award shall be treated as compensation for purposes of calculating a
Participant’s right under any such plan, policy or program.

 

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(j) Dividend Treatment. No cash dividends or distributions declared with respect
to any Award (including Performance Awards) shall be paid to any Participant
unless and until the Participant vests in such underlying Award. All unvested
dividends shall be forfeited by the Participants to the extent their underlying
Awards are forfeited.

(k) No Constraint on Corporate Action. Nothing in this Plan shall be construed
(i) to limit, impair or otherwise affect the Company’s right or power to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure, or to merge or consolidate, or dissolve, liquidate, sell, or
transfer all or any part of its business or assets or (ii) to limit the right or
power of the Company, or any Subsidiary, to take any action which such entity
deems to be necessary or appropriate.

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

 

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