Exhibit 10.1

 

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Zimmer Biomet Holdings, Inc.

Executive Severance Plan

Effective as of January 15, 2018

 

 

 

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Table of Contents

 

INTRODUCTION

     1  

ABOUT YOUR PARTICIPATION

     1  

Eligibility to Participate in the Plan

     1  

Eligibility to Receive Severance Benefits

     2  

AMOUNT OF SEVERANCE BENEFIT OFFER

     3  

How Your Severance Benefit Offer Is Calculated

     3  

HOW SEVERANCE BENEFITS ARE PAID

     4  

General Release Requirements

     5  

Forfeiture and Repayment

     5  

Form of General Release

     5  

How Other Benefits Are Affected

     6  

Deductions from Severance Benefits

     6  

PLAN ADMINISTRATION

     6  

Plan Sponsor

     7  

Plan Administrator

     7  

Agent for Service of Legal Process

     9  

Identification Numbers

     9  

Plan Year

     9  

Plan Funding

     9  

Amendments/Reservation of Rights

     9  

Plan Document

     9  

CLAIM AND APPEAL PROCESS FOR SEVERANCE BENEFITS

     9  

Initial Claims for Benefits

     9  

Procedures for Appealing an Adverse Benefit Determination

     10  

YOUR RIGHTS UNDER ERISA

     12  

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Receive Information About Your Plan and Benefits

     12  

Enforce Your Rights

     12  

Assistance with Your Questions

     12  

GENERAL PROVISIONS

     13  

GOVERNING LAW

     13  

SECTION 409A

     13  

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Executive Severance Plan    1

 

INTRODUCTION

Zimmer Biomet Holdings, Inc. (the “Company”) hereby establishes the Zimmer
Biomet Holdings, Inc. Executive Severance Plan (the “Executive Severance Plan”
or the “Plan”). This document serves as the plan document and summary plan
description (SPD) for the Plan. It describes the benefits as they apply to
eligible executives. The Plan document applies to eligible participants (as
defined below) who are notified in writing by the Company on or after the
effective date of this Plan of their separation or pending separation from
employment with the Company.

Nothing in this Plan creates or constitutes a contract of employment with the
Company or any of its direct or indirect subsidiaries or affiliates. Employment
with the Company and its affiliates is “at-will” absent any contractual
employment agreement or applicable law to the contrary, which means that either
the executive or the Company, subsidiary or affiliate may terminate the
employment relationship at any time for any reason, with or without cause or
notice.

ABOUT YOUR PARTICIPATION

This section includes important information about your participation in the
Executive Severance Plan. The Plan provides severance benefits to eligible
executives of the Company and its direct and indirect subsidiaries and
affiliates whose employment is involuntarily terminated for reasons other than
misconduct or other cause, subject to the terms set forth below. No individual
shall have a vested right to benefits under the Plan.

This section covers two types of eligibility — eligibility to participate in the
Plan and eligibility to receive severance benefits under the Plan. You must
satisfy both eligibility requirements to be eligible for benefits.

Eligibility to Participate in the Plan

You are eligible to participate in the Executive Severance Plan if you:

 

  •   Are employed by the Company or a direct or indirect subsidiary or
affiliated company of the Company; and

 

  •   Are designated by the Company’s President and CEO or the Compensation and
Management Development Committee of the Board of Directors (the “Board”) a
member of the Company’s Operating Committee at the time of the Company’s
providing to you written notice of immediate or pending separation from
employment as of a specified date.

Notwithstanding the foregoing, you are not eligible to participate in this Plan
if you:

 

  •   Are eligible to receive (regardless of whether you actually qualify for or
receive the benefits), or have received, an offer of severance benefits pursuant
to the terms and conditions of an individual employment or change in control
agreement;

 

  •   Are entitled to long-term disability (LTD) benefits under a Company
long-term disability plan; and/or

 

  •   Have agreed in writing that you are not entitled to participate in this
Plan.

If you are a participant in this Plan, you are not eligible to participate in or
receive benefits under the Zimmer Biomet Holdings, Inc. Restated Severance Plan.

When Participation Ends

Participation in the Plan ends on the first of the following dates:

 

  •   The date you no longer meet the eligibility requirements to participate;

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Executive Severance Plan    2

 

  •   The date all severance benefits you are eligible or agree to receive have
been paid;

 

  •   The date your employment ends for any reason that does not qualify you for
an offer of severance benefits;

 

  •   The date of your death; or

 

  •   The date the Plan is terminated or amended so that you lose coverage.

Eligibility to Receive Severance Benefits

As a Plan participant, you become eligible to receive severance benefits if you
meet all of the following requirements:

 

  •   You are notified in writing that your employment is being terminated;

 

  •   You sign the general release required by the Company within the time
period specified within the general release and, if applicable, do not validly
revoke your signature within the revocation period;

 

  •   If required to do so, you execute any confidentiality, intellectual
property, and/or other restrictive covenant agreement in a form provided by the
Company; and

 

  •   You work through your scheduled termination date.

Notwithstanding the foregoing, you will not be eligible to receive severance
benefits under this Plan if your employment is terminated for any of the
following reasons:

 

  •   Voluntary termination of employment or resignation of employment before
your scheduled termination date;

 

  •   Mandatory retirement due to Company policies or legal requirements;

 

  •   Willful misconduct or activity that the Company has deemed actually or
potentially detrimental to the interests of the Company, which may include, but
is not limited to, dishonesty; theft; violation of the Company Code of Business
Conduct and Ethics or other Company policy, rule, or procedure, such as those
relating to alcohol or drugs, discrimination or harassment, workplace violence,
product quality, safety, etc.; unauthorized disclosure of confidential
information; conduct inconsistent with any applicable law or regulation; or
other serious misconduct;

 

  •   Willful failure or refusal to substantially perform job responsibilities
(other than any such failure resulting from incapacity due to disability), as
determined by the Company, including but not limited to deliberate
unsatisfactory behavior and/or job performance;

 

  •   Excessive, unauthorized absenteeism;

 

  •   Any act or omission that the Company has determined has caused, is
causing, will cause, or has the potential to cause significant harm or loss to
the Company, its officers, and/or its employees;

 

  •   Refusal to accept reassignment to a different primary work location
designated by the Board (for the President and CEO) or by the President and CEO
(for other Operating Committee members), despite the availability of relocation
assistance benefits in accordance with the terms of the Company’s relocation
policy and plan as applicable for senior executives;

 

  •   The sale of all or part of the Company’s business, if you are offered
comparable employment with the acquiring or restructured company; or

 

  •   Extended absence under a Company short-term disability (STD) or LTD plan
or program, including your failure or inability to return to active employment
from a period of receiving STD/ LTD benefits; provided, however, if, but for
your approved leave, you would have been separated from employment for a reason
unrelated to your leave, such as position elimination or organizational
restructuring, while you are receiving STD benefits, then you may be eligible
for severance benefits equal to the amount of benefits determined under the Plan
less the amount of STD benefits paid after the date your employment would have
terminated.

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Executive Severance Plan    3

 

When Severance Benefits End

Severance benefit eligibility will end on the earliest of the following dates:

 

  •   The date you receive all severance benefits to which you are entitled or
agree to receive;

 

  •   The date you effectively revoke your signature on your release within the
time allowed;

 

  •   The date you engage in activity that the Company determines has caused, is
causing, will cause, or has the potential to cause significant loss or harm to
the Company, its officers and/or its employees; or

 

  •   The date the Plan is terminated or amended to change eligibility
requirements so as to make you ineligible.

AMOUNT OF SEVERANCE BENEFIT OFFER

The amount of your severance benefit offer is calculated based on the following
as of the date of your termination of employment:

How Your Severance Benefit Offer Is Calculated

 

Position

    

President and CEO

   2x the sum of your annualized base salary plus your target annual bonus,
determined as of your separation date

Other Operating Committee Members

   1x the sum of your annualized base salary plus your target annual bonus,
determined as of your separation date

In addition to the benefit described above, if you are eligible to receive
severance benefits (including providing a valid general release as described
above) and you are covered under the federal law known as COBRA, you will
receive an amount equal to the then-current monthly COBRA premium based upon the
group health insurance (medical and dental, but excluding vision) you had in
effect the day before your separation from employment, multiplied by 24 for the
President and CEO and by 12 for other members of the Operating Committee. If you
are eligible to receive severance benefits, you will receive this amount (less
all applicable withholding taxes) whether or not you elect COBRA coverage or use
the amount to pay for the cost of COBRA coverage. In order to continue your
health insurance coverage after your separation from employment, you must elect
continuation of coverage in accordance with COBRA instructions you will be
provided upon your separation from employment, and pay the applicable premiums
in a timely manner.

Effective January 1, 2019, in addition to the above amounts, if your employment
is terminated by the Company on or after January 1 but prior to the payment date
for bonuses related to the previous calendar year under the Executive
Performance Incentive Plan (“EPIP”), and you were eligible to participate in the
EPIP immediately prior to your separation and are entitled to severance benefits
under this Plan, your severance benefit will be increased by the value of the
bonus you would have received under the EPIP, if any, had you remained employed
on the payment date (“Enhanced Amount”). If EPIP payout amounts have not yet
been determined at that time, your lump-sum severance payment that includes the
base pay, target bonus, and COBRA subsidy components will include a bonus
component based upon the approximate value of the anticipated bonus you would
have been eligible to receive had you remained employed as of the payout date
(“Estimated Bonus Payment”). The Company, upon finalizing bonus payment
calculations for the year, will determine the actual bonus you would have been
paid had you remained employed on the payout date and, if that amount is greater
than the Estimated Bonus Payment, will pay such difference (“Bonus True-Up
Payment”) to you.

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Executive Severance Plan    4

 

Notwithstanding the foregoing, if you are on an approved STD leave and would,
but for your approved STD leave, be separated from employment for a
severance-qualifying reason unrelated to your leave, such as position
elimination or organizational restructuring, then you may be eligible for
severance benefits upon your separation equal to the amount of benefits
determined under the Plan less the amount of STD benefits paid after the date
your employment would have terminated.

Any severance benefits otherwise offered under this Plan shall be reduced by any
severance benefits required to be paid under applicable law, including, but not
limited to, statutes, ordinances, or local laws or customs (collectively, “Other
Severance Benefits”). If the amount of Other Severance Benefits is greater than
the amount offered under this Plan, no benefits are payable under this Plan. In
the event that in your situation the laws of a country other than the United
States may apply to this Plan and/or to your employment relationship with the
Company or its affiliates, and such laws will cause, directly or indirectly,
total severance benefits under this Plan and Other Severance Benefits otherwise
payable to you to exceed the benefits payable under this Plan, then you shall be
excluded from participation in this Plan.

The Company will also offer to you, if you are eligible, reasonable outplacement
services provided through a third-party administrator at the Company’s expense
(with a value not to exceed $25,000) or an equivalent cash benefit in the plan
administrator’s discretion.

The Company may from time to time amend this Plan, via addendum or otherwise, to
provide for different severance benefits and/or severance benefit terms and
conditions, or to eliminate severance benefits entirely, for all or a portion of
the Company’s executives. Any addendum will be effective only upon approval by
the Compensation and Management Development Committee of the Board (or by the
Board, should the Board limit or remove the authority of the Compensation and
Management Development Committee to approve such Plan changes). All other terms
of the Plan document shall continue to apply.

HOW SEVERANCE BENEFITS ARE PAID

Severance payments will be made in lump-sum form, less tax withholdings and any
amounts owed to the Company for any reason. Payment will be made as soon as
administratively feasible, in accordance with the Company’s regular payroll
schedule, after your timely return of a signed general release in the form you
were provided and, if applicable, after the expiration of a specified revocation
period during which you do not validly revoke your signature on the general
release. Any Bonus True-Up Payment you are eligible to receive will be paid in
lump-sum form as soon as administratively feasible in accordance with the
Company’s regular payroll schedule once the amount has been determined, less tax
withholdings and any amounts owed to the Company for any reason.

Notwithstanding the foregoing, severance benefits will not be paid to you until
you have returned all Company-owned property to the Company in a condition
satisfactory to the Company. Company-owned property shall include, but not be
limited to, the Company’s intellectual property and confidential and trade
secret information as well as Company-issued computers, PDAs, electronic
tablets, cell phones, and corporate credit cards that are in your possession or
control.

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Executive Severance Plan    5

 

General Release Requirements

You must sign a release in the form provided by the Company to receive severance
benefits. By signing the release, you agree to the terms of the release, which
include giving up, to the fullest extent permitted by law, any right to sue the
Company and any of its direct or indirect subsidiaries and affiliates.

The general release you are provided will state how many days you have to sign
and deliver the release to the Company and, if applicable, how many days you
have to rescind your signature. If you do not deliver the signed release within
the time allowed, or if you timely and properly rescind your signature, the
Company will consider this a refusal to sign and you will not be eligible to
receive severance benefits.

Forfeiture and Repayment

If (1) you violate or breach any term of the Plan or the general release or any
non-disclosure, intellectual property, and/or other restrictive covenant
agreement with the Company or any of its direct or indirect subsidiaries or
affiliates, or (2) after your termination of employment, facts are disclosed or
discovered that could have supported your termination for cause and would have
rendered you ineligible to receive severance benefits under this Plan, as
described in the Eligibility to Receive Severance Benefits section above, then
you shall automatically forfeit any and all rights to benefits under this Plan,
and, to the extent benefits have been paid to you under this Plan, you must
repay the full amount within 15 days of receiving written notification from the
Company. The Company may recover any benefits that you fail to repay in any of
the following ways:

 

  •   Withholding wages, or any other money owed to you, if permitted by
applicable law; and

 

  •   Using other appropriate legal means.

These remedies are not exclusive, and the Company may pursue any other legal
claims and/or remedies that it may have against you arising out of or related to
the facts supporting the forfeiture of rights under this Plan.

Form of General Release

The form of general release you must sign to receive any severance benefits for
which you are eligible will be determined by the Company at the time of your
separation from employment, and may include, among other provisions, the
following:

 

  •   Your agreement that you will not take any action or make any statement
which disparages the Company or other released parties, or its or their
practices, or which disrupts or impairs its or their normal operations so as to
cause a material adverse impact; provided, however, that nothing in the general
release shall restrict your rights to make disclosures specifically allowed or
required under applicable law.

 

  •   Your agreement to make yourself reasonably available by telephone, without
additional compensation beyond your severance benefit, for a specified period of
time following your separation date to respond in a timely manner to inquiries
from one or more designated Company officials related to carrying out an orderly
transition of business.

 

  •   Your agreement to cooperate with the Company and any of its direct or
indirect subsidiaries and affiliates on an ongoing basis to the extent
reasonably necessary for response to any governmental investigation or defense
of litigation, with reimbursement for reasonable out-of-pocket expenses that you
may incur in providing this cooperation and compensation for your time at an
hourly rate based on your final Company base salary.

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Executive Severance Plan    6

 

  •   If your separation date falls on or after January 1 but prior to the
payment date for bonuses related to the previous calendar year under the EPIP
and your severance benefit includes an Enhanced Amount, your specific waiver and
release of any entitlement to any further payout under the EPIP for the prior
calendar year.

How Other Benefits Are Affected

Your participation in all Company employee benefit plans will end on your
termination date, unless the provisions of a plan specifically allow for
benefits to continue following termination.

Severance benefits shall not be considered compensation for purposes of any
qualified or nonqualified deferred compensation or retirement plan or program.

Deductions from Severance Benefits

Amounts Owed to the Company

The Company reserves the right to deduct any amount you owe the Company, or any
of its direct or indirect subsidiaries or affiliates, for any reason, including
but not limited to plan premiums, borrowed vacation/PTO days, loans, signing or
retention incentives, educational assistance, and/or relocation reimbursement,
from any severance benefits payable to you, to the fullest extent permitted by
law. Any offset shall be considered a reduction in severance benefits under this
Plan (but may still be considered taxable income under applicable law).

Deductions

Federal, state, and local income taxes and other deductions required by law will
be withheld from all severance benefits.

Correction of Errors

The Company reserves the right to correct any errors that may occur in
administering the Plan. The Company has the right to recover, at any time, any
excess severance benefits that occur if severance benefits paid exceed those due
to you because of a mistake, incorrect information about your entitlement to
severance benefits, or any other reason. The Company may recover any excess
severance benefits paid to you in any of the following ways:

 

  •   Reducing or suspending future severance benefit payments;

 

  •   Requesting direct payment from you;

 

  •   Withholding wages, or any other money owed to you, if permitted by
applicable law; and

 

  •   Using other appropriate legal means.

These remedies are not exclusive, and the Company may pursue any other legal
claims and/or remedies that it may have against you arising out of or related to
the facts supporting the correction of any errors under this Plan as described
above.

PLAN ADMINISTRATION

This information about the administration of the Plan is provided in compliance
with the Employee Retirement Income Security Act of 1974, as amended (ERISA).
While you should not need these details on a regular basis, the information may
be useful if you have specific questions about the Plan.

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Executive Severance Plan    7

 

Plan Sponsor

The name and address of the plan sponsor are:

Zimmer Biomet Holdings, Inc.

345 East Main Street

Warsaw, IN 46580

USA

This Plan is a welfare benefit plan that provides severance benefits to eligible
executives.

Plan Administrator

The name, address and telephone number of the plan administrator and named
fiduciary are:

Administrative Committee

Zimmer Biomet Holdings, Inc.

345 East Main Street

Warsaw, IN 46580

USA

1-574-267-6131

The administration of the Plan will be under the supervision of the plan
administrator. To the fullest extent permitted by law, the plan administrator
will have the discretion to determine all matters relating to eligibility,
coverage, and benefits under the Plan. Benefits under the Plan will be paid only
if the plan administrator or any authorized delegate decides in the
administrator’s or delegate’s discretion that the applicant is entitled to them.
The plan administrator will also have the discretion to determine all matters
relating to the interpretation and operation of the Plan. Any determination by
the plan administrator or any authorized delegate shall be final and binding.

Questions regarding this Plan should be directed to the plan administrator at
the address shown above.

In addition to any other authority or responsibility placed upon the plan
administrator under the terms of this Plan or applicable law, the plan
administrator is responsible for and authorized to do the following:

 

  •   To grant or deny an individual’s claim for benefits under the Plan;

 

  •   To require any individual seeking benefits under the Plan to furnish such
information as the plan administrator may request for the purpose of the proper
administration of the Plan and as a condition to receiving any benefits under
the Plan;

 

  •   To make and enforce such rules and regulations and prescribe the use of
such forms as the plan administrator deems necessary for the efficient
administration of the Plan;

 

  •   To decide such questions as may arise in connection with the operation of
the Plan including, but not limited to, questions concerning the eligibility of
any individual to participate in or receive benefits under the Plan;

 

  •   To determine the amount of benefits which shall be payable to an executive
in accordance with the provisions of the Plan and to authorize payment of such
benefits;

 

  •   To require, as a condition of receiving any benefits payable under the
Plan, the filing of an authorization or release by the spouse of an eligible
executive divesting such spouse of any right in the Plan or in any payments
thereunder which such spouse may have by operation of law under the laws of his
or her matrimonial domicile or otherwise;

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Executive Severance Plan    8

 

  •   To comply with all reporting and disclosure requirements with respect to
the Plan;

 

  •   To interpret and construe, with discretionary authority, the provisions of
the Plan and to resolve ambiguities, inconsistencies and omissions therein;

 

  •   To employ legal counsel, who may be counsel to the Company, in which case
the employment of such counsel shall not be construed or otherwise used in any
direct or indirect manner to support any allegation of an actual or purported
conflict of interest (inherent, structural, or otherwise) under the Plan, and
such other specialists or persons as the plan administrator deems necessary or
desirable in connection with the administration of the Plan; and

 

  •   To delegate any of the plan administrator’s discretionary or ministerial
responsibilities to other designated persons as the plan administrator may see
fit, including, but not limited to, the determination of questions concerning
the eligibility of any employee to participate in or receive benefits under the
Plan, the interpretation and construction of the provisions of the Plan and the
resolution of ambiguities, inconsistencies, and omissions therein, and the
resolution of any appeal of the denial of a claim for benefits under the Plan.
The delegation of ministerial responsibilities may be effected with or without
written instrument, including pursuant to a standard operating procedure that
the plan administrator utilizes to administer the Plan. The delegation of
discretionary responsibilities will be effected by written instrument executed
by the plan administrator. Notwithstanding the foregoing, the plan
administrator’s failure to delegate responsibilities in writing shall not affect
or undermine the propriety of any delegation of the plan administrator’s
responsibilities under the Plan, and the plan administrator may ratify, at any
later time, through written instrument or otherwise, actions that a delegate has
taken in accordance with delegation authority not previously conveyed through
written instrument, upon which ratification the delegate’s actions shall be
treated as if originally taken under a delegation effected in accordance with
the terms of the Plan. The determination of the plan administrator as to any
question involving the general administration and interpretation of the Plan,
and such determinations made by each person to whom the plan administrator may
delegate the plan administrator’s responsibilities under the Plan, shall be
final, conclusive and binding upon all persons claiming any interest in or under
the Plan except as otherwise provided by law. Any discretionary actions to be
taken under the Plan by the plan administrator, and such actions taken by each
person to whom the plan administrator may delegate the plan administrator’s
responsibilities under the Plan, shall not be subject to de novo review if
challenged in court, by arbitration or in any other forum, and shall be upheld
unless found to be an abuse of discretion.

Consistent with the requirements of ERISA and the regulations thereunder of the
Secretary of Labor, the plan administrator will:

 

  •   Provide adequate notice in writing to any individual whose claim for
benefits under the Plan has been denied, setting forth specific reasons for such
denial, written in a manner calculated to be understood by such employee or
former employee, and

 

  •   Afford a reasonable opportunity to any individual whose claim for benefits
has been denied for a full and fair review of the decision denying the claim.

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Executive Severance Plan    9

 

Agent for Service of Legal Process

The name and address of the agent for service of legal process are:

Corporate Secretary

Zimmer Biomet Holdings, Inc.

345 East Main Street

Warsaw, IN 46580

USA

Legal process also can be served on the plan administrator.

Identification Numbers

The Employer Identification Number (EIN) assigned by the Internal Revenue
Service to the Company is 13-4151777. The plan number for the Plan is 513.

Plan Year

The plan year for the Plan is January 1 through December 31.

Plan Funding

The Plan is funded from the general assets of the Company, as needed. Executives
are not required to contribute to the Plan.

Amendments/Reservation of Rights

The Plan may be amended by the duly authorized action of the Compensation and
Management Development Committee of the Board or by the Board, should the Board
limit or remove the authority of the Compensation and Management Development
Committee to approve such Plan changes.

The Company reserves the right, as described above, to amend, terminate,
suspend, withdraw, or modify the Plan, in whole or in part, at any time, for any
or no reason, and without prior notice. Any Plan amendments may be made by
execution of a written document incorporating the changes. The Company also
reserves in the plan administrator and service providers, as applicable, the
discretionary authority and responsibility to interpret and construe the
provisions of the Plan as described in the above Plan Administrator section.

Plan Document

This document serves as both the summary plan description (SPD) and the official
plan document for the Zimmer Biomet Holdings, Inc. Executive Severance Plan.

CLAIM AND APPEAL PROCESS FOR SEVERANCE BENEFITS

As further explained below, if your claim for severance benefits is denied, you
will receive a notice in writing that explains the reasons for the denial. You
will then have the opportunity to appeal the denial of your claim and receive a
full and fair review of the decision.

Initial Claims for Benefits

The plan administrator, or its delegate, will consider your involuntary
termination to be a claim for benefits under the Plan. Notwithstanding the
foregoing, if you believe that you are entitled to benefits under this Plan, you
may submit a claim to the plan administrator within 60 days of your date of
termination. Your claim submission must be written and delivered to the plan
administrator.

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Executive Severance Plan    10

 

If the plan administrator delegates the initial determination on your claim,
that delegation shall be considered a delegation of the plan administrator’s
ministerial responsibilities under the Plan, unless the plan administrator
determines that the delegation was of its discretionary responsibilities under
the Plan and effects, or ratifies, the discretionary delegation in accordance
with the Plan’s terms.

If the determination on your claim is adverse because your claim is denied in
whole or in part, the plan administrator or its delegate will notify you of that
adverse determination within a reasonable period of time, but not later than 90
days after receiving the claim, or within 90 days of your date of termination if
the plan administrator or its delegate has automatically considered your
termination to be a claim for benefits under the Plan.

If an adverse determination is made on your claim, the plan administrator’s, or
its delegate’s, notice to you will include:

 

  •   The specific reason(s) for the adverse benefit determination;

 

  •   References to the specific Plan provisions on which the benefit
determination is based; and

 

  •   A description of the Plan’s appeal procedures and the time limits
applicable to those procedures, including a statement of your right to bring a
civil action under ERISA after an adverse determination on appeal.

The 90-day claim determination period may be extended for up to an additional 90
days if the plan administrator or its delegate (1) determines that special
circumstances require an extension of time for processing the claim, and
(2) notifies you, before the initial 90-day period expires, of the special
circumstances requiring the extension of time along with the date by which the
it expects to render a determination.

In the event that additional material or information is needed from you to
process and make a determination on your claim, the plan administrator or its
delegate will send you a request for that information, along with an explanation
of why it is necessary. If an extension of time is necessary in order to obtain
such additional information, the Plan’s time frame for making a benefit
determination on review will be suspended from the date the plan administrator
or its delegate sends you the request for information with an extension
notification until the date you respond to the request for additional
information.

Procedures for Appealing an Adverse Benefit Determination

If you receive an adverse benefit determination, you may appeal that
determination. You or your authorized representative will have 60 days following
receipt of a notification of an adverse benefit determination within which to
appeal the determination. You have the right to:

 

  •   Request, free of charge, reasonable access to, and copies of, all
documents, records, and other information relevant to your claim for benefits.
For this purpose, a document, record, or other information is treated as
“relevant” to your claim if it:

 

  —   Was relied upon in making the benefit determination;

 

  —   Was submitted, considered, or generated in the course of making the
benefit determination, regardless of whether such document, record or other
information was relied upon in making the benefit determination; or

 

  —   Demonstrates compliance with the administrative processes and safeguards
required in making the benefit determination.

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Executive Severance Plan    11

 

  •   Submit written comments, documents, records, and other information
relating to your claim for benefits, which will be taken into account in the
review on appeal, regardless of whether the information was submitted or
considered in the initial benefit determination.

The plan administrator or its delegate will notify you of the determination on
appeal within a reasonable period of time, but not later than 60 days after
receipt of your request to appeal. This 60-day period may be extended for up to
an additional 60 days if the plan administrator or its delegate (1) determines
that special circumstances require an extension of time for processing the
claim, and (2) notifies you, before the initial 60-day period expires, of the
special circumstances requiring the extension of time and the date by which a
determination on review is expected.

In the event that additional material or information is needed from you to
process and make a determination on your request for appeal, the plan
administrator or its delegate will send you a request for that information. If
an extension of time is necessary in order to obtain such additional
information, the time frame for making a benefit determination on appeal will be
suspended from the date the plan administrator or its delegate sends you the
request for information with an extension notification until the date you
respond to the request for additional information.

If an adverse determination is made on your appeal, the plan administrator’s or
its delegate’s notice to you will include:

 

  •   The specific reason(s) for the adverse benefit determination;

 

  •   References to the specific Plan provisions on which the benefit
determination is based;

 

  •   A statement that you are entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant to your claim; and

 

  •   A statement describing any further voluntary appeal procedures that may be
offered under the Plan and your right to obtain information about such
procedures, and a statement of your right to bring an action under ERISA.

You must use and exhaust the Plan’s administrative claim and appeal procedures
described above before bringing a lawsuit claiming benefits under the Plan in
either state or federal court. Your failure to follow the Plan’s prescribed
procedures in a timely manner may cause you to lose your right to contest an
adverse benefit determination in court. Any lawsuit claiming benefits must be
filed within two years from your date of termination. In other words, you may
not file a lawsuit related to any claim for benefits under the Plan on or after
the second anniversary of your termination date.

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Executive Severance Plan    12

 

YOUR RIGHTS UNDER ERISA

As a participant in the Plan, you are entitled to certain rights and protections
under ERISA. ERISA provides that all Plan participants shall be entitled to:

Receive Information About Your Plan and Benefits

 

  •   Examine, without charge, at the plan administrator’s office and at other
specified locations, such as worksites, all documents governing the Plan,
including a copy of the latest annual report (Form 5500 Series) filed by the
Plan with the U.S. Department of Labor and available at the Public Disclosure
Room of the Employee Benefits Security Administration.

 

  •   Obtain, upon written request to the plan administrator, copies of
documents governing the operation of the Plan, including copies of the latest
annual report (Form 5500 Series) and updated SPD. The plan administrator may
make a reasonable charge for the copies.

 

  •   Receive a summary of the Plan’s annual financial report. The plan
administrator is required by law to furnish each participant with a copy of this
summary annual report.

Enforce Your Rights

If your claim for Plan benefits is denied or ignored, in whole or in part, you
have the right to know why this was done, to obtain copies of documents relating
to the decision without charge, and to appeal any denial, all within certain
time schedules.

Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request a copy of Plan documents or the latest annual report
from the Plan and do not receive them within 30 days, you may file suit in a
federal court. In such a case, the court may require the plan administrator to
provide the materials and pay you up to $110 a day until you receive the
materials, unless the materials were not sent because of reasons beyond the
control of the administrator.

If you have a claim for benefits that is denied or ignored, in whole or in part,
you may file a suit in a state or federal court, but only after you have
exhausted the Plan’s claims and appeals procedures as described in the Claim and
Appeal Process for Severance Benefits section.

If it should happen that Plan fiduciaries misuse Plan money, or if you are
discriminated against for asserting your rights, you may seek assistance from
the U.S. Department of Labor, or you may file suit in a federal court. The court
will decide who should pay court costs and legal fees. If you are successful,
the court may order the person you have sued to pay these costs and fees. If you
lose, the court may order you to pay these costs and fees, for example, if it
finds your claim is frivolous.

Assistance with Your Questions

If you have any questions about the Plan, you should contact the plan
administrator. If you have any questions about this statement or about your
rights under ERISA, or if you need assistance in obtaining documents from the
plan administrator, you should contact the nearest office of the Employee
Benefits Security Administration, U.S. Department of Labor, listed in your
telephone directory, or the Division of Technical Assistance and Inquiries,
Employee Benefits Security Administration, U.S. Department of Labor, 200
Constitution Avenue, N.W., Washington, DC 20210.

You may also obtain certain publications about your rights and responsibilities
under ERISA by calling the publications hotline of the Employee Benefits
Security Administration.

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Executive Severance Plan    13

 

GENERAL PROVISIONS

The Plan shall not be deemed to constitute a contract of employment, nor shall
anything contained herein be deemed to give you any right to be retained in the
employ of any employer or to interfere with the rights of the employer to
discharge you at any time and to treat you without regard to the effect which
such treatment might have upon you with respect to participation in the Plan.

If the plan administrator or its delegate determines that you are entitled to
benefits under the Plan but are incompetent or unable to care for your affairs
by reason of physical or mental disability, the plan administrator or its
delegate may cause all payments thereafter becoming due to you to be made to
another person for your benefit, without responsibility to follow the
application of amounts so paid. Payments made pursuant to this provision shall
completely discharge the Company, its direct and indirect subsidiaries and
affiliates, the plan administrator, its delegate(s), and the named fiduciary
with respect to such payments.

In the United States, the Plan is not in lieu of, and does not affect any
requirement for coverage by, workers’ compensation insurance.

You have no right to anticipate, expect, assign, or otherwise dispose of any
interest under the Plan, nor may your interests under the Plan be assigned or
transferred by operation of law.

GOVERNING LAW

The provisions of the Plan shall be construed, administered and governed under
the laws of the State of Indiana to the extent such laws are not pre-empted by
ERISA. To the extent that the laws of a country other than the United States may
apply to an eligible executive, the Plan shall be administered consistent with
the laws of the other country, or, in the alternative and notwithstanding any
other provisions of this Plan, the plan administrator or its delegate may deem
the executive ineligible to participate in this Plan, and the Company may
provide alternative benefits as it deems reasonable in its sole discretion.

SECTION 409A

The Plan is intended to comply with the requirements of Section 409A of the
Internal Revenue Code (the “Code”) and shall be interpreted and construed
consistently with such intent. Payments to you pursuant to the Plan are also
intended to be exempt from Section 409A of the Code to the maximum extent
possible, under either the separation pay exemption pursuant to Treasury
regulation §1.409A-1(b)(9)(iii) or as short-term deferrals pursuant to Treasury
regulation §1.409A-1(b)(4), and, for purposes of such exemptions, each payment
under the Plan shall be considered a separate payment. In the event the terms of
the Plan would subject you to taxes or penalties under Section 409A of the Code
(“409A Penalties”), the Company shall cooperate diligently with you to amend the
terms of the Plan to avoid such 409A Penalties, to the extent possible.
Notwithstanding any other provision in the Plan, if you are a “specified
employee,” as defined in Section 409A of the Code, as of the date of your
separation from service, then to the extent any amount payable under the Plan
(i) constitutes the payment of nonqualified deferred compensation, within the
meaning of Section 409A of the Code, (ii) is payable upon your separation from
service and (iii) under the terms of the Plan would be payable prior to the
six-month anniversary of your separation from service, such payment shall be
delayed until the earlier to occur of (a) the six-month anniversary of your
separation from service or (b) the date of your death. In addition to the
foregoing, to the extent that any payment of deferred compensation subject to
Section 409A of the Code is contingent upon the execution of a written release,
if the designated period for executing a written release spans two tax years,
the payment will be paid in the second tax year.