Exhibit 10.8

VERITIV CORPORATION

2014 OMNIBUS INCENTIVE PLAN

(As Adopted and Effective on June 30, 2014)

ARTICLE I

Purpose; Eligibility

Section 1.1 General Purpose. This Veritiv Corporation 2014 Omnibus Incentive
Plan, as may be amended from time to time (the “Plan”), has the following
purposes: (1) to attract and retain employees, consultants and directors who
will contribute to the long-range success of Veritiv Corporation (the “Company”)
and its Subsidiaries (as defined herein); (2) to provide incentives that align
the interests of employees, consultants and directors of the Company and its
Subsidiaries with those of the shareholders of the Company; and (3) to promote
the success of the Company’s business.

Section 1.2 Eligible Award Recipients. The persons eligible to receive Awards
are the Service Providers of the Company and its Subsidiaries and such other
individuals designated by the Committee who are reasonably expected to become
Service Providers after the receipt of Awards.

Section 1.3 Available Awards. Awards that may be granted under the Plan include
Options, Stock Purchase Rights, Restricted Stock, Restricted Stock Units,
Performance Shares, Performance Units, SARs, Dividend Equivalents, Deferred
Share Units or other Stock-Based Awards.

ARTICLE II

Definitions

Whenever the following terms are used in this Plan, they shall have the meanings
specified below unless the context clearly indicates to the contrary. The
singular pronoun shall include the plural where the context so indicates.

“Administrator” shall mean the Board or any committee of the Board designated by
the Board to administer the Plan. To the extent Section 162(m) of the Code is
applicable to the Company and the Plan, and for those Awards intended to qualify
as performance-based compensation under Section 162(m) of the Code, the
Administrator shall mean the Compensation and Leadership Development Committee
of the Board (the “Compensation Committee”) or such other committee or
subcommittee of the Board or the Compensation Committee as the Board or the
Compensation Committee shall designate, consisting of two or more members, each
of whom is a “non-employee director” within the meaning of Rule 16b-3, as
promulgated under the Exchange Act, and an “outside director” within the meaning
of Section 162(m) of the Code and Treasury Regulations Section 1.162-27(e)(3) or
any successor to such statute and regulation.

“Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with, such Person
where “control” shall have the meaning given such term under Rule 405 of the
Securities Act.

“Alternative Award” shall have the meaning set forth in Section 14.1.

“Applicable Laws” shall mean the requirements relating to the administration of
stock option, restricted stock, restricted stock unit and other equity-based
compensation plans under U.S. state corporate laws, U.S. federal and state
securities laws, the Code, any stock exchange or quotation system on which any
shares of Company Common Stock are listed or quoted and the applicable laws of
any other country or jurisdiction where Awards are granted under the Plan.

“Award” shall mean any right granted under the Plan, including an Option, Stock
Purchase Right, Restricted Stock, Restricted Stock Unit, Performance Share,
Performance Unit, SAR, Dividend Equivalent, Deferred Share Unit or other
Stock-Based Award granted to a Participant pursuant to the Plan, including an
Award combining two or more types of Awards into a single grant.

“Award Agreement” shall mean any written agreement, contract or other instrument
or document evidencing the terms and conditions of an individual Award granted
under the Plan, including the rights and obligations of the Participant upon the
issuance of Company Common Stock subject to an Award. The Administrator may
provide for the use of electronic, internet or other non-paper Award Agreements,
and the use of electronic, internet or other non-paper means for the
Participant’s acceptance of, or actions under, an Award Agreement unless
otherwise expressly specified herein. In the event of any inconsistency or
conflict between the express terms of the Plan and the express terms of an Award
Agreement, the express terms of the Plan shall govern.

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“Base Price” shall have the meaning set forth below in the definition of Stock
Appreciation Right.

“Board” shall mean the Board of Directors of the Company, as constituted at any
time.

“Cause” shall, as to any Award granted to a Participant, have the meaning
provided in the Award Agreement or the Participant’s employment agreement with
the Company or a Subsidiary (including, without limitation, offer letters), or,
if there is no such definition in any such agreement, “Cause” shall include, but
is not limited to, misconduct or other activity detrimental to the business
interest or reputation of the Company or continued unsatisfactory job
performance without making reasonable efforts to improve. Examples include
insubordination, protracted or repeated absence from work without permission,
illegal activity, disorderly conduct, etc. A termination for Cause shall be
deemed to include a determination by the Administrator following a Participant’s
termination of employment that circumstances existing prior to such termination
would have entitled the Company or one of its Subsidiaries to have terminated
such Participant’s employment for Cause.

“Change in Control” shall mean the first to occur of any of the following events
after the Effective Date:

(a) the acquisition, directly or indirectly, by any Person (which, for purposes
of this definition, shall include a “group” (as defined in Section 13(d) of the
Exchange Act)) of beneficial ownership of more than fifty percent (50%) of the
combined voting power of the Company’s then outstanding voting securities, other
than any such acquisition by the Company, any of its Subsidiaries, any employee
benefit plan of the Company or any of its Subsidiaries or any Affiliates of the
foregoing;

(b) the merger, consolidation or other similar transaction involving the
Company, as a result of which Persons who were holders of voting securities of
the Company immediately prior to such merger, consolidation, or other similar
transaction do not immediately thereafter beneficially own, directly or
indirectly, more than fifty percent (50%) of the combined voting power entitled
to vote generally in the election of directors of the merged or consolidated
company;

(c) within any 24-month period, the Incumbent Directors shall cease to
constitute at least a majority of the Board;

(d) the approval by the Company’s shareholders of the liquidation or dissolution
of the Company other than a liquidation of the Company into any Subsidiary or a
liquidation as a result of which Persons who were holders of voting securities
of the Company immediately prior to such liquidation own, directly or
indirectly, more than fifty percent (50%) of the combined voting power entitled
to vote generally in the election of directors of the entity that holds
substantially all of the assets of the Company following such event; or

(e) the sale, transfer or other disposition of all or substantially all of the
assets of the Company to one or more Persons that are not, immediately prior to
such sale, transfer or other disposition, Affiliates of the Company;

in each case, provided that, as to Awards subject to Section 409A of the Code,
such event also constitutes a “change in control” within the meaning of
Section 409A of the Code. In addition, notwithstanding the foregoing, a “Change
in Control” shall not be deemed to occur if the Company files for bankruptcy,
liquidation or reorganization under the United States Bankruptcy Code or as a
result of any restructuring that occurs as a result of any such.

“Change in Control Price” shall mean the highest price per share of Company
Common Stock offered in conjunction with any transaction resulting in a Change
in Control. If any part of the offered price is payable other than in cash, the
value of the non-cash portion of the Change in Control Price shall be determined
in good faith by the Administrator as constituted immediately prior to the
Change in Control.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Company” shall mean Veritiv Corporation, a Delaware corporation, and any
successor thereto.

“Company Common Stock” shall mean the common stock, par value $0.01 per share,
of the Company and such other stock or securities into which such common stock
is hereafter converted or for which such common stock is exchanged.

“Compensation Committee” shall have the meaning set forth above in the
definition of Administrator.

 

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“Competitive Activity” shall mean a Participant’s material breach of restrictive
covenants relating to noncompetition, nonsolicitation (of customers or
employees) or preservation of confidential information, or other covenants
having the same or similar scope, included in an Award Agreement or other
agreement to which the Participant and the Company or any of its Subsidiaries is
a party.

“Consultant” shall mean any natural person who is engaged by the Company or any
of its Subsidiaries to render consulting or advisory services to such entity as
an independent contractor.

“Corporate Event” shall mean, as determined by the Administrator in its sole
discretion, any transaction or event described in Section 4.3(a) or any unusual
or nonrecurring transaction or event affecting the Company, any Subsidiary of
the Company, or the financial statements of the Company or any of its
Subsidiaries, or changes in applicable laws, regulations or accounting
principles (including, without limitation, a recapitalization of the Company).

“Deferred Share Unit” shall mean a unit credited to a Participant’s account in
the books of the Company under Article X which represents the right to receive
one Share of Company Common Stock or cash equal to the Fair Market Value thereof
on settlement of the account.

“Director” shall mean a member of the Board or a member of the board of
directors of any Subsidiary of the Company.

“Disability” shall mean (x) for Awards that are not subject to Section 409A of
the Code, “disability” as such term is defined in the long-term disability
insurance plan or program of the Company or any Subsidiary then covering the
Participant and (y) for Awards that are subject to Section 409A of the Code,
“disability” shall have the meaning set forth in Section 409A(a)(2)(c) of the
Code; provided that with respect to Awards that are not subject to Section 409A,
in the case of any Participant who, as of the date of determination, is a party
to an effective services, severance, consulting or employment agreement with the
Company or any Subsidiary of the Company that employs such individual
(including, without limitation, offer letters), “Disability” shall have the
meaning, if any, specified in such agreement.

“Dividend Equivalent” shall mean the right to receive payments, in cash or in
Shares, based on dividends paid with respect to Shares.

“Effective Date” shall mean the date as of which this Plan is adopted by the
Board.

“Eligible Representative” for a Participant shall mean such Participant’s
personal representative or such other person as is empowered under the deceased
Participant’s will or the then applicable laws of descent and distribution to
represent the Participant hereunder.

“Employee” shall mean any individual classified as an employee by the Company or
one of its Subsidiaries, whether such employee is so employed at the time this
Plan is adopted or becomes so employed subsequent to the adoption of this Plan,
including any person to whom an offer of employment has been extended (except
that any Award granted to such person shall be conditioned on his or her
commencement of service). A person shall not cease to be an Employee in the case
of (a) any leave of absence approved by the Company or (b) transfers between
locations of the Company or between the Company, any of its Subsidiaries, or any
successor to the foregoing. For purposes of Incentive Stock Options, no such
leave may exceed three (3) months, unless reemployment upon expiration of such
leave is guaranteed by statute or contract. If reemployment upon expiration of a
leave of absence approved by the Company is not so guaranteed, the employment
relationship shall be deemed to have terminated on the first day immediately
following such three (3)-month period, and such Incentive Stock Option held by
the Optionee shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Non-qualified Stock Option on the first day
immediately following a three (3)-month period from the date the employment
relationship is deemed terminated.

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

“Executive Officer” shall mean each person who is an officer of the Company or
any Subsidiary and who is subject to the reporting requirements under
Section 16(a) of the Exchange Act.

 

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“Fair Market Value” of a Share as of any date of determination shall be:

(a) If the Company Common Stock is listed on any established stock exchange or a
national market system, then the closing price on such date per Share as
reported as quoted on such stock exchange or system shall be the Fair Market
Value for the date of determination;

(b) If there are no transactions in the Company Common Stock that are available
to the Company on any date of determination pursuant to clause (a) but
transactions are available to the Company as of the immediately preceding
trading date, then the Fair Market Value determined as of the immediately
preceding trading date shall be the Fair Market Value for the date of
determination; or

(c) If neither clause (a) nor clause (b) shall apply on any date of
determination, then the Fair Market Value shall be determined in good faith by
the Administrator with reference to (x) the most recent valuation of the Company
Common Stock performed by an independent valuation consultant or appraiser of
nationally recognized standing selected by the Administrator, if any, (y) sales
prices of securities issued to investors in any recent arm’s length
transactions, and (z) any other factors determined to be relevant by the
Administrator, and such determination shall be conclusive and binding for all
purposes.

“Good Reason” shall, in the case of any Participant who, as of the date of
determination, is a party to an employment, severance or similar agreement with
the Company or any Subsidiary of the Company that employs such individual, have
the meaning, if any, specified in such agreement (including, without limitation,
offer letters), provided, however that if there is no such employment, severance
or similar agreement in which such term is defined, “Good Reason” shall have the
meaning, if any, given such term in the applicable Award Agreement. For the
avoidance of doubt, if a Participant is not a party to any such an agreement
defining “Good Reason” or its substantial equivalent, the “Good Reason”
definition shall not apply to such Participant.

“Grant Date” shall mean the date on which the Administrator adopts a resolution,
or takes other appropriate action, expressly granting an Award to a Participant
that specifies the key terms and conditions of the Award or, if a later date is
set forth in such resolution, then such date as is set forth in such resolution.

“Incentive Stock Option” shall mean an Option which qualifies under Section 422
of the Code and is expressly designated as an Incentive Stock Option in the
Award Agreement.

“Incumbent Directors” shall mean individuals who, on the Effective Date,
constitute the Board; provided that any individual becoming a Director
subsequent to the Effective Date whose election or nomination for election to
the Board was approved by a vote of at least two-thirds of the Incumbent
Directors then on the Board (either by specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee for Director
without objection to such nomination) shall be an Incumbent Director. No
individual initially elected as a director of the Company as a result of an
actual or threatened election contest with respect to the Directors or as a
result of any other actual or threatened solicitation of proxies by or on behalf
of any person other than the Board shall be an Incumbent Director.

“normal retirement age” shall have the meaning set forth in the applicable Award
Agreement or, if not defined in the Award Agreement, pursuant to the customary
policies of the Company.

“Non-qualified Stock Option” shall mean an Option which is not an Incentive
Stock Option.

“Non-U.S. Awards” shall have the meaning set forth in Section 3.5.

“Option” shall mean an option to purchase Company Common Stock granted under the
Plan. The term “Option” includes both an Incentive Stock Option and a
Non-qualified Stock Option.

“Option Price” shall have the meaning set forth in Section 6.3.

“Optionee” shall mean a Participant to whom an Option or SAR is granted under
the Plan.

“Participant” shall mean any Service Provider who has been granted an Award
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Award.

 

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“Performance Award” shall mean Performance Shares, Performance Units and all
other Awards that vest (in whole or in part) upon the achievement of specified
Performance Goals.

“Performance Cycle” shall mean the period of time selected by the Administrator
during which performance is measured for the purpose of determining the extent
to which a Performance Award has been earned or vested.

“Performance Goals” shall mean the objectives established by the Administrator
for a Performance Cycle pursuant to Section 9.5 for the purpose of determining
the extent to which a Performance Award has been earned or vested.

“Performance Share” shall mean an Award granted pursuant to Article IX of the
Plan of a contractual right to receive a number of Shares (or the cash
equivalent thereof) upon the achievement, in whole or in part, of the applicable
Performance Goals.

“Performance Unit” shall mean a U.S. Dollar-denominated unit (or a unit
denominated in the Participant’s local currency) granted pursuant to Article IX
of the Plan, payable in cash or in Shares upon the achievement, in whole or in
part, of the applicable Performance Goals.

“Person” shall mean an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental authority or any other entity of whatever nature.

“Plan” shall have the meaning set forth in Section 1.1.

“Replacement Awards” shall mean Shares issued in assumption of, or in
substitution for, any outstanding awards of any entity acquired in any form or
combination by the Company or any of its Subsidiaries.

“Restricted Stock” shall mean an Award granted pursuant to Section 8.1.

“Restricted Stock Unit” shall mean an Award granted pursuant to Section 8.2.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Service Provider” shall mean an Employee, Consultant or Director.

“Share” shall mean a share of Company Common Stock.

“Stock Appreciation Right” or “SAR” shall mean the right to receive a payment
from the Company in cash and/or Shares equal to the product of (i) the excess,
if any, of the Fair Market Value of one Share on the exercise date over a
specified price (the “Base Price”) fixed by the Administrator on the Grant Date
(which specified price shall not be less than the Fair Market Value of one Share
on the Grant Date), multiplied by (ii) a stated number of Shares.

“Stock-Based Award” shall have the meaning set forth in Section 11.1.

“Stock Purchase Right” shall mean an Award granted pursuant to Section 11.2.

“Subplans” shall have the meaning set forth in Section 3.5.

“Subsidiary” shall mean any entity that is directly or indirectly controlled by
the Company or any entity in which the Company directly or indirectly has at
least a 50% equity interest, provided that, to the extent required under
Section 422 of the Code when granting an Incentive Stock Option, Subsidiary
shall mean any corporation in an unbroken chain of corporations beginning with
such entity if each of the corporations other than the last corporation in the
unbroken chain then owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.

“Termination of employment,” “termination of service” and any similar term or
terms shall mean, with respect to a Director who is not an Employee of the
Company or any of its Subsidiaries, the date upon which such Director ceases to
be a member of the Board, with respect to a Consultant who is not an Employee of
the Company or any of its Subsidiaries, the date upon which such Consultant
ceases to provide consulting or advisory services to the Company or any of its
Subsidiaries and, with respect to an

 

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Employee, the date the Participant ceases to be an Employee; provided that with
respect to any Award subject to Section 409A of the Code, such terms shall mean
“separation from service,” as defined in Section 409A of the Code and the rules,
regulations and guidance promulgated thereunder. A “termination of employment”
or “termination of service” shall not occur if a Director, immediately upon
ceasing to be a member of the Board, becomes an Employee of the Company or any
of its Subsidiaries or if an Employee, immediately upon termination of
employment with the Company or any of its Subsidiaries, becomes or continues to
serve as a member of the Board.

“Withholding Taxes” shall mean the statutory minimum of any federal, state,
local or foreign income taxes, withholding taxes or employment taxes required to
be withheld under Applicable Law.

ARTICLE III

Administration

Section 3.1 Administrator. The Plan shall be administered by the Administrator,
which Administrator, unless otherwise determined by the Board, shall be
constituted to comply with Applicable Laws, including, without limitation,
Section 16 of the Exchange Act and Section 162(m) of the Code.

Section 3.2 Powers of the Administrator. Subject to the provisions of the Plan
and, in the case of a committee, the specific duties delegated by the Board to
such Administrator, and subject to the approval of any relevant authorities, the
Administrator shall have the authority in its discretion to:

(a) determine the Fair Market Value;

(b) select the Service Providers to whom Awards may from time to time be granted
hereunder;

(c) determine the type or types of Awards to be granted to each Participant;

(d) determine the number of Awards to be granted and the number of Shares to
which an Award will relate;

(e) determine when Awards are to be granted under the Plan and the applicable
Grant Date;

(f) determine the terms and conditions of any Awards granted hereunder
(including, without limitation, the exercise price, the vesting provisions, the
time or times when Awards may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions and any
restriction or limitation regarding any Awards or the Company Common Stock
relating thereto) based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

(g) determine all matters and questions related to the termination of service of
a Service Provider with respect to any Award granted to such Service Provider
hereunder, including, but not by way of limitation of, all questions of whether
a particular Service Provider has taken a leave of absence, all questions of
whether a leave of absence taken by a particular Service Provider constitutes a
termination of service, and all questions of whether a termination of service of
a particular Service Provider resulted from discharge for Cause;

(h) approve forms of agreement for use under the Plan, which need not be
identical for each Service Provider;

(i) prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to Subplans established for the purpose
of satisfying applicable foreign laws;

(j) determine whether, to what extent, and pursuant to what circumstances an
Award may be settled in, or the exercise or purchase price of an Award may be
paid in, cash, Company Common Stock, other Awards, or other property, or an
Award may be canceled, forfeited or surrendered;

(k) suspend or accelerate the vesting of any Award granted under the Plan;

(l) amend any outstanding Awards as set forth in Section 15.2 hereof;

(m) construe and interpret the terms of the Plan and Awards granted pursuant to
the Plan and apply its provisions;

(n) determine the effect of a Corporate Event under Section 4.3;

(o) make decisions with respect to outstanding Awards that may become necessary
upon a change in corporate control or an event that triggers anti-dilution
adjustments;

 

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(p) authorize any person to execute, on behalf of the Company, any instrument
required to carry out the purposes of the Plan;

(q) interpret, administer, reconcile any inconsistency in, correct any defect in
and/or supply any omission in the Plan and any instrument or agreement relating
to, or Award granted under, the Plan; and

(r) make all other decisions and determinations that may be required pursuant to
the Plan or as the Administrator deems necessary or advisable to administer the
Plan.

Section 3.3 Delegation by the Administrator. The Administrator may delegate,
subject to such terms or conditions or guidelines as it shall determine, to any
officer or group of officers, or Director or group of Directors, of the Company
or its Affiliates any portion of its authority and powers under the Plan with
respect to Participants who are not Executive Officers or non-employee Directors
of the Board; provided that any delegation to one or more officers of the
Company shall be subject to and comply with Section 157(c) of the Delaware
General Corporation Law (or successor provision). In addition, (i) with respect
to any Award intended to qualify as “performance-based” compensation under
Section 162(m) of the Code, the Administrator shall mean the Compensation
Committee or such other committee or subcommittee of the Board or the
Compensation Committee as the Board or the Compensation Committee shall
designate, consisting solely of two or more members, each of whom is an “outside
director” within the meaning of Section 162(m) of the Code and Treasury
Regulations Section 1.162-27(e)(3) or any successor to such statute and
regulation and (ii) with respect to any Award intended to qualify for the
exemption contained in Rule 16b-3 promulgated under the Exchange Act, the
Administrator shall consist of solely two or more “non-employee directors”
within the meaning of such rule, or, in the alternative, the entire Board.

Section 3.4 Compensation, Professional Assistance, Administrator Decisions
Final; Indemnification. The Administrator shall receive no compensation for its
services hereunder except as may be determined by the Board. All expenses and
liabilities incurred by the Administrator in connection with the administration
of the Plan shall be borne by the Company. The Administrator may, in its
discretion, elect to engage the services of attorneys, consultants, accountants,
appraisers, brokers or other persons. The Administrator, the Company and its
officers and Directors shall be entitled to rely upon the advice, opinions or
valuations of any such persons. All actions taken and all interpretations,
decisions and determinations made by the Administrator shall be final, binding
and conclusive upon all Participants, the Company and all other interested
persons. The Administrator’s determinations under the Plan need not be uniform
and may be made by the Administrator selectively among persons who receive, or
are eligible to receive, Awards under the Plan, whether or not such persons are
similarly situated. The Administrator (and its members) shall not be personally
liable for any action, determination or interpretation made with respect to the
Plan or the Awards, and the Administrator (and its members), in addition to such
other rights of indemnification as they may have as Directors or members of the
Administrator, and to the extent allowed by Applicable Laws, shall be
indemnified by the Company against the reasonable expenses, including attorney’s
fees, actually incurred in connection with any action, suit or proceeding or in
connection with any appeal therein, to which the Administrator (and its members)
may be party by reason of any such action, determination or interpretation.

Section 3.5 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
herein regarding the maximum number of shares issuable hereunder and the maximum
Award to any single Participant, the Administrator may (i) modify the terms and
conditions of Awards granted to Participants employed or providing services
outside the United States (“Non-U.S. Awards”), (ii) establish subplans with such
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
Administrator’s decision to grant Non-U.S. Awards or to establish Subplans is
entirely voluntary, and at the complete discretion of the Administrator. The
Administrator 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 and members of the
Administrator 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-U.S. Award (x) are
wholly discretionary and, although provided by either the Company, a Subsidiary
or Affiliate, do not constitute regular or periodic payments and (y) except as
otherwise required under Applicable Laws, 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.

 

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ARTICLE IV

Shares Subject to Plan

Section 4.1 Shares Subject to Plan.

(a) Subject to Section 4.3, the aggregate number of Shares which may be issued
under this Plan is 2,080,000, all of which may be issued in the form of
Incentive Stock Options under the Plan. The Shares issued under the Plan may be
authorized but unissued, or reacquired Company Common Stock. No provision of
this Plan shall be construed to require the Company to maintain the Shares in
certificated form.

(b) Upon the grant of an Award, the maximum number of Shares set forth in
Section 4.1(a) shall be reduced by the maximum number of Shares that are issued
or may be issued pursuant to such Award. Upon the exercise, settlement or
conversion of any Award or portion thereof, there shall again be available for
grant under the Plan the number of Shares subject to such Award or portion
thereof minus the actual number of Shares issued in connection with such
exercise, settlement or conversion. If any such Award or portion thereof is for
any reason forfeited, canceled, expired or otherwise terminated without the
issuance of Shares, the Shares subject to such forfeited, canceled, expired or
otherwise terminated Award or portion thereof shall again be available for grant
under the Plan. If Shares are withheld from issuance with respect to an Award by
the Company in satisfaction of any tax withholding or similar obligations, such
withheld Shares shall again be available for grant under the Plan. Awards which
the Administrator reasonably determines will be settled in cash shall not reduce
the Plan maximum set forth in Section 4.1(a). Notwithstanding the foregoing, and
except to the extent required by Applicable Law, Replacement Awards shall not be
counted against Shares available for grant pursuant to this Plan.

Section 4.2 Individual Award Limitations. Subject to Section 4.1(a) and
Section 4.3, the following individual Award limits shall apply to the extent
Section 162(m) of the Code is applicable to the Company and the Plan, and for
those Awards intended to qualify as performance-based compensation under
Section 162(m) of the Code:

(a) No Participant may be granted in any calendar year more than 1,000,000
Options, SARs or any other Award based solely on the increase in value of the
Shares from the Grant Date under the Plan.

(b) No Participant may be granted in any calendar year more than 1,000,000
Performance Shares, shares of performance-based Restricted Stock,
performance-based Restricted Stock Units or performance-based Dividend
Equivalents under the Plan.

(c) No Participant may be granted in any calendar year Performance Units or any
other performance-based Award settled in cash under the Plan with a value of
more than US $10,000,000 (or the equivalent of such amount denominated in the
Participant’s local currency).

Section 4.3 Changes in Company Common Stock; Disposition of Assets and Corporate
Events.

(a) If and to the extent necessary or appropriate to reflect any stock dividend,
extraordinary dividend, stock split or share combination or any
recapitalization, reorganization, merger, consolidation, combination, exchange
of shares, spin-off, liquidation or dissolution of the Company or other similar
transaction affecting the Company Common Stock (each, a “Corporate Event”), the
Administrator shall adjust the number and type of shares available for issuance
under the Plan, the maximum number and type of shares subject to all Awards, the
maximum number and type of shares with respect to which any one person may be
granted Awards during any period and the number, class and Option Price (if
applicable) or Base Price (if applicable) of any outstanding Award, and/or make
such substitution, revision or other provisions or take such other actions with
respect to any outstanding Award or the holder or holders thereof, in each case
as it determines to be equitable. Without limiting the generality of the
foregoing sentence, in the event of any such Corporate Event, the Administrator
shall have the power to make such changes as it deems appropriate in (i) the
number and type of shares or other securities covered by outstanding Awards,
(ii) the prices specified therein (if applicable), (iii) the securities, cash or
other property to be received upon the exercise, settlement or conversion of
such outstanding Awards or otherwise to be received in connection with such
outstanding Awards and (iv) and any applicable Performance Goals. After any
adjustment made by the Administrator pursuant to this Section 4.3, the number of
shares subject to each outstanding Award shall be rounded down to the nearest
whole number.

(b) Any adjustment of an Award pursuant to this Section 4.3 shall be effected in
compliance with Section 422 and 409A of the Code to the extent applicable.

 

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Section 4.4 Award Agreement Provisions. The Administrator may include such
further provisions and limitations in any Award Agreement as it may deem
equitable and in the best interests of the Company and its Subsidiaries.

Section 4.5 Prohibition Against Repricing. Except to the extent (i) approved in
advance by holders of a majority of the Shares entitled to vote generally in the
election of Directors or (ii) pursuant to Section 4.3 as a result of any
Corporate Event, the Administrator shall not have the power or authority to
reduce the exercise price of outstanding Options or SARs or cancel, convert,
exchange, replace, buyout or surrender outstanding Options or SARS in exchange
for cash, other awards or Options or SARs with an exercise price that is less
than the exercise price of the original Options or SAR.s

ARTICLE V

Granting of Options and SARs and Sale of Company Common Stock

Section 5.1 Eligibility. Non-qualified Stock Options and SARs may be granted to
Service Providers. Subject to Section 5.2, Incentive Stock Options may only be
granted to Employees.

Section 5.2 Qualification of Incentive Stock Options. No Employee may be granted
an Incentive Stock Option under the Plan if such Employee, at the time the
Incentive Stock Option is granted, owns stock possessing more than ten
(10) percent of the total combined voting power of all classes of stock of the
Company or any then existing Subsidiary of the Company or “parent corporation”
(within the meaning of Section 424(e) of the Code) unless such Incentive Stock
Option conforms to the applicable provisions of Section 422 of the Code.

Section 5.3 Granting of Options and SARs to Service Providers.

(a) Options and SARs. The Administrator may from time to time:

(i) Select from among the Service Providers (including those to whom Options or
SARs have been previously granted under the Plan) such of them as in its opinion
should be granted Options and/or SARs;

(ii) Determine the number of Shares to be subject to such Options and/or SARs
granted to such Service Provider, and determine whether such Options are to be
Incentive Stock Options or Non-qualified Stock Options; and

(iii) Determine the terms and conditions of such Options and SARs, consistent
with the Plan.

(b) SARs may be granted in tandem with Options or may be granted on a
freestanding basis, not related to any Option. Unless otherwise determined by
the Administrator at the Grant Date or determined thereafter in a manner more
favorable to the Participant, SARs granted in tandem with Options shall have
substantially similar terms and conditions to such Options to the extent
applicable, or may be granted on a freestanding basis, not related to any
Option.

(c) Upon the selection of a Service Provider to be granted an Option or SAR
under this Section 5.3, the Administrator shall issue, or shall instruct an
authorized officer to issue, such Option or SAR and may impose such conditions
on the grant of such Option or SAR as it deems appropriate. Subject to
Section 15.2 of the Plan, any Incentive Stock Option granted under the Plan may
be modified by the Administrator, without the consent of the Optionee, even if
such modification would result in the disqualification of such Option as an
“incentive stock option” under Section 422 of the Code.

ARTICLE VI

Terms of Options and SARs

Section 6.1 Award Agreement. Each Option and each SAR shall be evidenced by a
written Award Agreement, which shall be executed by the Optionee and an
authorized officer and which shall contain such terms and conditions as the
Administrator shall determine, consistent with the Plan. Award Agreements
evidencing Incentive Stock Options shall contain such terms and conditions as
may be necessary to qualify such Options as “incentive stock options” under
Section 422 of the Code.

Section 6.2 Exercisability and Vesting of Options and SARs.

(a) Each Option and SAR shall vest and become exercisable according to the terms
of the applicable Award Agreement; provided, however, that by a resolution
adopted after an Option or SAR is granted the Administrator may, on such terms
and conditions as it may determine to be appropriate, accelerate the time at
which such Option or SAR or any portion thereof may be exercised.

 

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(b) Except as otherwise provided by the Administrator or in the applicable Award
Agreement, no portion of an Option or SAR which is unexercisable on the date
that an Optionee incurs a termination of service as a Service Provider shall
thereafter become exercisable.

(c) The aggregate Fair Market Value (determined as of the Grant Date of the
Option) of all Shares with respect to which Incentive Stock Options are first
exercisable by a Service Provider in any calendar year may not exceed $100,000
or such other limitation as imposed by Section 422(d) of the Code, or any
successor provision. To the extent that Incentive Stock Options are first
exercisable by a Participant in excess of such limitation, the excess shall be
considered Non-qualified Stock Options.

(d) SARs granted in tandem with an Option shall become vested and exercisable on
the same date or dates as the Options with which such SARs are associated vest
and become exercisable. SARs that are granted in tandem with an Option may only
be exercised upon the surrender of the right to exercise such Option for an
equivalent number of Shares, and may be exercised only with respect to the
Shares for which the related Option is then exercisable.

Section 6.3 Option Price and Base Price. Excluding Replacement Awards, the per
Share purchase price of the Shares subject to each Option (the “Option Price”)
and the Base Price of each SAR shall be set by the Administrator and shall be
not less than 100% of the Fair Market Value of such Shares on the Grant Date of
such Option or SAR.

Section 6.4 Expiration of Options and SARs. No Option or SAR may be exercised
after the first to occur of the following events:

(a) The expiration of ten (10) years from the Grant Date of the Option or SAR;
or

(b) With respect to an Incentive Stock Option in the case of an Optionee owning
(within the meaning of Section 424(d) of the Code), at the time the Incentive
Stock Option was granted, more than 10% of the total combined voting power of
all classes of stock of the Company or any Subsidiary, the expiration of five
(5) years from the date the Incentive Stock Option was granted.

ARTICLE VII

Exercise of Options and SARs

Section 7.1 Person Eligible to Exercise. During the lifetime of the Optionee,
only the Optionee may exercise an Option or SAR (or any portion thereof) granted
to him or her; provided, however, that the Optionee’s Eligible Representative
may exercise his or her Option or SAR or portion thereof during the period of
the Optionee’s Disability. After the death of the Optionee, any exercisable
portion of an Option or SAR may, prior to the time when such portion becomes
unexercisable under the Plan or the applicable Award Agreement, be exercised by
his or her Eligible Representative.

Section 7.2 Partial Exercise. At any time and from time to time prior to the
date on which the Option or SAR becomes unexercisable under the Plan or the
applicable Award Agreement, the exercisable portion of an Option or SAR may be
exercised in whole or in part; provided, however, that the Company shall not be
required to issue fractional Shares and the Administrator may, by the terms of
the Option or SAR, require any partial exercise to exceed a specified minimum
number of Shares.

Section 7.3 Manner of Exercise. Subject to any generally applicable conditions
or procedures that may be imposed by the Administrator, an exercisable Option or
SAR, or any exercisable portion thereof, may be exercised solely by delivery to
the Administrator or its designee of all of the following prior to the time when
such Option or SAR or such portion becomes unexercisable under the Plan or the
applicable Award Agreement:

(a) Notice in writing signed by the Optionee or his or her Eligible
Representative, stating that such Option or SAR or portion thereof is being
exercised, and specifically stating the number of Shares with respect to which
the Option or SAR is being exercised (which form of notice shall be provided by
the Administrator upon request and may be electronic);

 

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(b) (i) With respect to the exercise of any Option, full payment (in cash
(through wire transfer only) or by personal, certified, or bank cashier check)
of the aggregate Option Price of the Shares with respect to which such Option
(or portion thereof) is thereby exercised; or

(ii) With the consent of the Administrator, (A) Shares owned by the Optionee
duly endorsed for transfer to the Company or (B) Shares issuable to the Optionee
upon exercise of the Option, with a Fair Market Value on the date of Option
exercise equal to the aggregate Option Price of the Shares with respect to which
such Option (or portion thereof) is thereby exercised; or

(iii) With the consent of the Administrator, payment of the Option Price through
a broker-assisted cashless exercise program established by the Company or other
“cashless”, or net issuance, basis; or

(iv) With the consent of the Administrator, any form of payment of the Option
Price permitted by Applicable Laws and any combination of the foregoing methods
of payment.

(c) Full payment to the Company (in cash or by personal, certified or bank
cashier check or by any other means of payment approved by the Administrator) of
all minimum amounts necessary to satisfy any and all Withholding Taxes arising
in connection with the exercise of the Option or SAR (notice of the amount of
which shall be provided by the Administrator as soon as practicable following
receipt by the Administrator of the notice of exercise);

(d) Such representations and documents as the Administrator deems necessary or
advisable to effect compliance with all applicable provisions of the Securities
Act and any other federal or state securities laws or regulations. The
Administrator shall provide the Optionee or Eligible Representative with all
such representations and documents as soon as practicable following receipt by
the Administrator of the notice of exercise. The Administrator may, in its sole
discretion, also take whatever additional actions it deems appropriate to effect
such compliance including, without limitation, placing legends on share
certificates and issuing stop-transfer orders to transfer agents and registrars;
and

(e) In the event that the Option or SAR or portion thereof shall be exercised as
permitted under Section 7.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the Option
or SAR or portion thereof.

Section 7.4 Optionee Representations. The Administrator, in its sole discretion,
may require an Optionee to make certain representations or acknowledgements on
or prior to the purchase of any Shares pursuant to any Option or SAR granted
under this Plan, in respect thereof including, without limitation, that the
Optionee is acquiring the Shares for an investment purpose and not for resale,
and, if the Optionee is an Affiliate, additional acknowledgements regarding when
and to what extent any transfers of such Shares may occur.

Section 7.5 Settlement of SARs. Unless otherwise determined by the
Administrator, upon exercise of a SAR, the Participant shall be entitled to
receive payment in the form, determined by the Administrator, of Shares, or
cash, or a combination of Shares and cash having an aggregate value equal to the
amount determined by multiplying:

(a) any increase in the Fair Market Value of one Share on the exercise date over
the Base Price of such SAR, by

(b) the number of Shares with respect to which such SAR is exercised; provided,
however, that on the Grant Date, the Administrator may establish, in its sole
discretion, a maximum amount per Share that may be payable upon exercise of a
SAR, and provided, further, that in no event shall the value of the Company
Common Stock or cash delivered on exercise of a SAR exceed the excess of the
Fair Market Value of the Shares with respect to which the SAR is exercised over
the Fair Market Value of such Shares on the Grant Date of such SAR.

Section 7.6 Conditions to Issuance of Shares. The Company shall evidence the
issuance of Shares delivered upon exercise of an Option or SAR in the books and
records of the Company or in a manner determined by the Company. Notwithstanding
the above, the Company shall not be required to effect the issuance of any
Shares purchased upon the exercise of any Option or SAR or portion thereof prior
to fulfillment of all of the following conditions:

(a) The admission of such Shares to listing on any and all stock exchanges on
which such class of Company Common Stock is then listed;

(b) The completion of any registration or other qualification of such Shares
under any state or federal law or under the rulings or regulations of the U.S.
Securities and Exchange Commission or any other local, state, federal or foreign
governmental regulatory body, which the Administrator shall, in its sole
discretion, deem necessary or advisable;

 

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(c) The obtaining of any approval or other clearance from any state or federal
governmental agency which the Administrator shall, in its sole discretion,
determine to be necessary or advisable; and

(d) The payment to the Company (or its Subsidiary, as applicable) of all amounts
which it is required to withhold under Applicable Law in connection with the
exercise of the Option or SAR.

The Administrator shall not have any liability to any Optionee for any delay in
the delivery of Shares to be issued upon an Optionee’s exercise of an Option or
SAR.

Section 7.7 Rights as Stockholders. The holder of an Option or SAR shall not be,
nor have any of the rights or privileges of, a stockholder of the Company in
respect of any Shares purchasable upon the exercise of any part of an Option or
SAR unless and until the Shares attributable to the exercise of the Option or
SAR have been issued by the Company to such holder and, unless otherwise
determined by the Administrator, such holder has made such representations and
provided such documents as the Administrator deems necessary or advisable to
effect compliance with all applicable provisions of the Securities Act and any
other federal or state securities laws or regulations.

Section 7.8 Transfer Restrictions. Unless otherwise determined by the
Administrator, the Shares acquired upon exercise of an Option or SAR shall be
subject to the terms and conditions of the Award Agreement and such other terms
and conditions as the Administrator shall determine. In addition, the
Administrator, in its sole discretion, may set forth in an Award Agreement such
further restrictions on the transferability of the Shares purchasable upon the
exercise of an Option or SAR as it deems appropriate. Any such restriction may
be referred to in the Share register maintained by the Company or otherwise in a
manner reflecting its applicability to the Shares. The Administrator may require
the Employee to give the Company prompt notice of any disposition of Shares
acquired by exercise of an Incentive Stock Option, within two (2) years from the
Grant Date of such Option or one (1) year after the transfer of such Shares to
such Employee. The Administrator may cause the Share register maintained by the
Company to refer to such requirement.

ARTICLE VIII

Restricted Stock Awards and Restricted Stock Unit Awards

Section 8.1 Restricted Stock.

(a) Grant of Restricted Stock. The Administrator is authorized to make Awards of
Restricted Stock to any Service Provider selected by the Administrator in such
amounts and subject to such terms and conditions as determined by the
Administrator. All Awards of Restricted Stock shall be evidenced by an Award
Agreement.

(b) Issuance and Restrictions. Restricted Stock shall be subject to such
restrictions on transferability and other restrictions as the Administrator may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).
These restrictions may lapse separately or in combination at such times,
pursuant to such circumstances, in such installments, or otherwise, as the
Administrator determines on the Grant Date of the Award or thereafter.

(c) Issuance of Restricted Stock. The issuance of Restricted Stock granted
pursuant to the Plan may be evidenced in such manner as the Administrator shall
determine; provided, that, no provision of this Plan shall be construed to
require the Company to maintain the Shares in certificated form.

Section 8.2 Restricted Stock Units. The Administrator is authorized to make
Awards of Restricted Stock Units to any Service Provider selected by the
Administrator in such amounts and subject to such terms and conditions as
determined by the Administrator. On the Grant Date, the Administrator shall
specify the date or dates on which the Restricted Stock Units shall become fully
vested and nonforfeitable, and may specify such conditions to vesting as it
deems appropriate. On the Grant Date, the Administrator shall specify the
settlement date applicable to each grant of Restricted Stock Units which shall
be no earlier than the vesting date or dates of the Award and may be determined
at the election of the grantee. Unless otherwise provided in an Award Agreement,
on the settlement date, the Company shall, subject to the terms of this Plan
(including satisfaction of applicable Withholding Taxes), transfer to the
Participant one Share for each Restricted Stock Unit scheduled to be paid out on
such date and not previously forfeited. The Administrator shall specify the
purchase price, if any, to be paid by the grantee to the Company for such
Shares.

Section 8.3 Rights as a Stockholder. A Participant shall not be, nor have any of
the rights or privileges of, a stockholder in respect of Restricted Stock Units
awarded pursuant to the Plan unless and until the Shares attributable to such
Restricted Stock Units

 

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have been issued to such Participant and, unless otherwise determined by the
Administrator, such Participant has made such representations and provided such
documents as the Administrator deems necessary or advisable to effect compliance
with all applicable provisions of the Securities Act and any other federal or
state securities laws or regulations.

ARTICLE IX

Performance Shares and Performance Units

Section 9.1 Grant of Performance Awards. The Administrator is authorized to make
Awards of Performance Shares and Performance Units to any Participant selected
by the Administrator in such amounts and subject to such terms and conditions as
determined by the Administrator. All Performance Shares and Performance Units
shall be evidenced by an Award Agreement.

Section 9.2 Issuance and Restrictions. The Administrator shall have the
authority to determine the Participants who shall receive Performance Shares and
Performance Units, the number of Performance Shares and the number and value of
Performance Units each Participant receives for any Performance Cycle, and the
Performance Goals applicable in respect of such Performance Shares and
Performance Units for each Performance Cycle. The Administrator shall determine
the duration of each Performance Cycle (the duration of Performance Cycles may
differ from one another), and there may be more than one Performance Cycle in
existence at any one time. An Award Agreement evidencing the grant of
Performance Shares or Performance Units shall specify the number of Performance
Shares and the number and value of Performance Units awarded to the Participant,
the Performance Goals applicable thereto, and such other terms and conditions
not inconsistent with the Plan as the Administrator shall determine. No Company
Common 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.

Section 9.3 Earned Performance Shares and Performance Units. Performance Shares
and Performance Units shall become earned, in whole or in part, based upon the
attainment of specified Performance Goals or the occurrence of any event or
events, as the Administrator shall determine, either in an Award Agreement or
thereafter on terms more favorable to the Participant; provided, that, as to any
such Award subject to Section 162(m), to the extent consistent with
Section 162(m). In addition to the achievement of the specified Performance
Goals, the Administrator may condition payment of Performance Shares and
Performance Units on such other conditions as the Administrator shall specify in
an Award Agreement. The Administrator may also provide in an Award Agreement for
the completion of a minimum period of service (in addition to the achievement of
any applicable Performance Goals) as a condition to the vesting of any
Performance Share or Performance Unit Award.

Section 9.4 Rights as a Stockholder. A Participant shall not have any rights as
a stockholder in respect of Performance Shares or Performance Units awarded
pursuant to the Plan (including, without limitation, to the right to vote on any
matter submitted to the Company’s stockholders) unless and until the Shares
attributable to such Performance Shares or Performance Units have been issued to
such Participant or his or her beneficiary and, unless otherwise determined by
the Administrator, such Participant has made such representations and provided
such documents as the Administrator deems necessary or advisable to effect
compliance with all applicable provisions of the Securities Act and any other
federal or state securities laws or regulations.

Section 9.5 Performance Goals. The Administrator shall establish the Performance
Goals that must be satisfied in order for a Participant to receive an Award for
a Performance Period or for an Award of Performance Shares or Performance Units
to be earned or vested. At the discretion of the Administrator, the Performance
Goals may be based upon (alone or in combination): (a) net or operating income
(before or after taxes) or other income measures; (b) earnings before taxes,
interest, depreciation and/or amortization (“EBITDA”); (c) net income before
equity in earnings of unconsolidated Subsidiary, income tax expense, loss on
early debt extinguishment, interest and other (expense) income, realized gain
(loss) on investments, interest expense, equity-based compensation expense,
related party management fees, restructuring charges and depreciation and
amortization expense and net income attributable to noncontrolling interests
(“Adjusted EBITDA”); (d) basic or diluted earnings per share or improvement in
basic or diluted earnings per share; (e) sales (including, but not limited to,
total sales, net sales and revenue growth); (f) profit (including, but not
limited to, net profit, gross profit, operating profit, net operating profit,
economic profit or other corporate profit measures); (g) financial return
measures (including, but not limited to, return on assets, income, capital,
invested capital, equity, investments, sales and revenue); (h) cash flow
measures (including, but not limited to, operating cash flow, free cash flow,
cash flow return on equity and cash flow return on investment); (i) productivity
ratios (including, but not limited to, measuring liquidity, profitability and
leverage); (j) share price (including, but not limited to, growth measures and
total shareholder return); (k) expense/cost management targets (including, but
not limited, to expense management, expense ratio, expense efficiency ratios or
other expense measures); (l) margins (including, but not limited to, operating
margin, net income margin, cash margin, gross, net or operating profit margins,
EBITDA margins and Adjusted EBITDA margins); (m) operating efficiency;
(n) market share or market penetration; (o) customer targets (including, but not
limited to, customer growth and customer satisfaction); (p) working capital
targets or improvements; (q) economic value added;

 

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(r) balance sheet metrics (including, but not limited to, inventory, inventory
turns, receivables turnover, net asset turnover, total debt, net debt, debt
reduction, retained earnings, year-end cash, cash conversion cycle and ratio of
debt to equity or to EBITDA); (s) workforce targets (including, but not limited
to, diversity goals, employee engagement or satisfaction, employee retention and
workplace health and safety goals); (t) implementation, completion or attainment
of measurable objectives with respect to research and development, key products
or key projects, lines of business, acquisitions and divestitures and strategic
plan development and/or implementation; (u) comparisons with various stock
market indices, peer companies or industry groups or classifications with regard
to one more of these criteria, (v) improvements in capital structure,
(w) business expansion or consolidation (acquisitions and divestitures),
(x) internal rate of return or increase in net present value, (y) productivity
measures, (z) cost reduction measures or, for any period of time in which
Section 162(m) is not applicable to the Company and the Plan, or at any time in
the case of (A) persons who are not “covered employees” under Section 162(m) of
the Code or (B) Awards (whether or not to “covered employees”) not intended to
qualify as performance-based compensation under Section 162(m) of the Code, such
other criteria as may be determined by the Administrator.

Performance Goals may be established on a Company-wide basis or with respect to
one or more Subsidiaries or Affiliates or business units, divisions, regions,
departments, functions or products within the Company, a Subsidiary or Affiliate
and may be expressed in absolute terms, or an adjusted basis, in percentages, or
in terms of growth from period to period or growth rates over time, or measured
relative to (i) current internal targets or budgets, (ii) the past performance
of the Company (including the performance of one or more Subsidiaries, divisions
or operating units), (iii) the performance of one or more similarly situated
companies, (iv) the performance of an index covering a peer group of companies
or (v) other external measures of the selected performance criteria. Performance
Goals need not be based upon an increase or positive result under a business
criterion and could include, for example, the maintenance of the status quo or
the limitation of economic losses (measured, in each case, by reference to a
specific business criterion). Any performance objective may measure performance
on an individual basis, as appropriate. The Administrator may provide for a
threshold level of performance below which no Shares or compensation will be
granted or paid in respect of Performance Shares or Performance Units, and a
maximum level of performance above which no additional Shares or compensation
will be granted or paid in respect of Performance Shares or Performance Units,
and it may provide for differing amounts of Shares or compensation to be granted
or paid in respect of Performance Shares or Performance Units for different
levels of performance. When establishing Performance Goals for a Performance
Cycle, the Administrator may determine that any or all “extraordinary items” as
determined under U.S. generally accepted accounting principles and as identified
in the financial statements, notes to the financial statements or management’s
discussion and analysis in the annual report, including, without limitation, the
charges or costs associated with restructurings of the Company, discontinued
operations, extraordinary items, capital gains and losses, dividends, Share
repurchase, other unusual or non-recurring items, and the cumulative effects of
accounting changes shall be excluded from the determination as to whether the
Performance Goals have been met. Except in the case of Awards to “covered
employees” intended to be performance-based compensation under Section 162(m) of
the Code, the Administrator may also adjust the Performance Goals for any
Performance Cycle 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 Administrator may determine.

Section 9.6 Special Rule for Performance Goals. If, at the time of grant, the
Administrator intends a Performance Share Award, Performance Unit or other
Performance Award to qualify as performance-based compensation within the
meaning of Section 162(m) of the Code, the Administrator must establish
Performance Goals for the applicable Performance Cycle prior to the 91st day of
the Performance Cycle (or by such other date as may be required under
Section 162(m) of the Code) and not later than the date on which 25% of the
Performance Cycle has elapsed.

Section 9.7 Negative Discretion. Notwithstanding anything in this Article IX to
the contrary, the Administrator shall have the right, in its absolute
discretion, (i) to reduce or eliminate the amount otherwise payable to any
Participant under Section 9.8 based on individual performance or any other
factors that the Administrator, in its discretion, shall deem appropriate and
(ii) to establish rules or procedures that have the effect of limiting the
amount payable to each Participant to an amount that is less than the maximum
amount otherwise authorized under the Award or under the Plan.

Section 9.8 Certification of Attainment of Performance Goals. As soon as
practicable after the end of a Performance Cycle and prior to any payment or
vesting in respect of such Performance Cycle, the Administrator shall certify in
writing the number of Performance Shares or other Performance Awards and the
number and value of Performance Units that have been earned or vested on the
basis of performance in relation to the established Performance Goals.

Section 9.9 Payment of Awards. Payment or delivery of Company Common Stock with
respect to earned Performance Shares and earned Performance Units shall be made
to the Participant or, if the Participant has died, to the Participant’s
Eligible Representative, as soon as practicable after the expiration of the
Performance Cycle and the Administrator’s certification under

 

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Section 9.8 above and (unless an applicable Award Agreement shall set forth one
or more other dates) in any event no later than the earlier of (i) ninety
(90) days after the end of the fiscal year in which the Performance Cycle has
ended and (ii) ninety (90) days after the expiration of the Performance Cycle.
The Administrator shall determine and set forth in the applicable Award
Agreement whether earned Performance Shares and the value of earned Performance
Units are to be distributed in the form of cash, Shares or in a combination
thereof, with the value or number of Shares payable to be determined based on
the Fair Market Value of the Company Common Stock on the date of the
Administrator’s certification under Section 9.8 above or such other date
specified in the Award Agreement. The Administrator may, in an Award Agreement
with respect to the award or delivery of Shares, condition the vesting of such
Shares on the performance of additional service.

Section 9.10 Newly Eligible Participants. Notwithstanding anything in this
Article IX to the contrary, the Administrator 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 Shares, Performance
Units or other Performance Awards after the commencement of a Performance Cycle.

ARTICLE X

Deferred Share Units

Section 10.1 Grant. Subject to Article III, the Administrator is authorized to
make awards of Deferred Share Units to any Participant selected by the
Administrator at such time or times as shall be determined by the Administrator
without regard to any election by the Participant to defer receipt of any
compensation or bonus amount payable to him. Upon the grant of Deferred Share
Units pursuant to the Plan, the Company shall establish a notional account for
the Participant and will record in such account the number of Deferred Share
Units awarded to the Participant. No Shares will be issued to the Participant at
the time an award of Deferred Share Units is granted. Subject to Article III,
Deferred Share Units may become payable on a Corporate Event, Change in Control,
termination of employment or on a specified date or dates or a specified event
or events set forth in the Award Agreement evidencing such Deferred Share Units.

Section 10.2 Rights as a Stockholder. A Participant shall not be, nor have any
of the rights and privileges of, a stockholder of the Company in respect of
Deferred Share Units awarded pursuant to the Plan unless and until the Shares
attributable to such Deferred Share Units have been issued to such Participant
and, unless otherwise determined by the Administrator, such Participant has made
such representations and provided such documents as the Administrator deems
necessary or advisable to effect compliance with all applicable provisions of
the Securities Act and any other federal or state securities laws or
regulations.

Section 10.3 Vesting. Unless the Administrator provides otherwise on the Grant
Date or provides thereafter in a manner more favorable to the Participant,
Deferred Share Units shall be fully vested and nonforfeitable when granted.

Section 10.4 Further Deferral Elections. A Participant may elect to further
defer receipt of Shares issuable in respect of Deferred Share Units (or an
installment of an Award) for a specified period or until a specified event and
in a manner consistent with Section 409A of the Code, subject in each case to
the Administrator’s approval and to such terms as are determined by the
Administrator, all in its sole discretion. Subject to any exceptions adopted by
the Administrator, such election must generally be made at least twelve
(12) months prior to the prior settlement date of such Deferred Share Units (or
any such installment thereof) and must defer settlement for at least five
(5) years after such prior settlement date. A further deferral opportunity does
not have to be made available to all Participants, and different terms and
conditions may apply with respect to the further deferral opportunities made
available to different Participants.

Section 10.5 Settlement. Subject to this Article X, upon the date specified in
the Award Agreement evidencing the Deferred Share Units, for each such Deferred
Share Unit the Participant shall receive, as specified in the Award Agreement
(and subject to satisfaction of applicable withholding taxes), (i) a cash
payment equal to the Fair Market Value of one (1) Share as of such payment date,
(ii) one (1) Share or (iii) any combination of clauses (i) and (ii).

 

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ARTICLE XI

Other Stock-Based Awards

Section 11.1 Grant of Stock-Based Awards. The Administrator is authorized to
make Awards of other types of equity-based or equity-related awards
(“Stock-Based Awards”) not otherwise described by the terms of the Plan in such
amounts and subject to such terms and conditions as the Administrator shall
determine. All Stock-Based Awards shall be evidenced by an Award Agreement. Such
Stock-Based Awards may be granted as an inducement to enter the employ of the
Company or any Subsidiary or in satisfaction of any obligation of the Company or
any Subsidiary to an officer or other key employee, whether pursuant to this
Plan or otherwise, that would otherwise have been payable in cash or in respect
of any other obligation of the Company. Such Stock-Based Awards may entail the
transfer of actual Shares, or payment in cash or otherwise of amounts based on
the value of Shares and may include, without limitation, Awards designed to
comply with or take advantage of the applicable local laws of jurisdictions
other than the United States.

Section 11.2 Sale of Company Common Stock to Service Providers. The
Administrator, acting in its sole discretion, may from time to time designate
one or more Service Providers to whom an offer to sell Shares shall be made and
the terms and conditions thereof, provided, however, that the price per Share
shall not be less than the Fair Market Value of such Shares on the date any such
offer is accepted. Any Shares sold under this Section 11.2 shall be subject to
the same limitations, restrictions and administration hereunder as would apply
to any Shares issued pursuant to the exercise of an Option under this Plan
including, without limitation, conditions and restrictions set forth in
Section 7.6 above. Unless otherwise determined by the Administrator, Shares
acquired pursuant to this Section 11.2 shall also be subject to the terms and
conditions of an Award Agreement, which shall be executed by the Participant and
an authorized officer.

Section 11.3 Automatic Grants for Directors. The Administrator may institute, by
resolution, grants of automatic Awards to new and continuing Directors, with the
number and type of such Awards, the frequency of grant and all related terms and
conditions, including any applicable vesting conditions, as determined by the
Administrator in its sole discretion.

ARTICLE XII

Dividend Equivalents

Section 12.1 Generally. Dividend Equivalents may be granted to Participants at
such time or times as shall be determined by the Administrator. Dividend
Equivalents may be granted in tandem with other Awards, in addition to other
Awards, or freestanding and unrelated to other Awards. Dividend Equivalents may,
at the discretion of the Administrator, be fully vested and nonforfeitable when
granted or subject to such vesting conditions as determined by the
Administrator. For the avoidance of doubt, Dividend Equivalents with respect to
Awards (including any performance-based awards) shall not be fully vested until
the Awards have been earned and shall be forfeited if the related Award is
forfeited. Dividend Equivalents shall be evidenced in writing, whether as part
of the Award Agreement governing the terms of the Award, if any, to which such
Dividend Equivalent relates, or pursuant to a separate Award Agreement with
respect to freestanding Dividend Equivalents, in each case, containing such
provisions not inconsistent with the Plan as the Administrator shall determine,
including customary representations, warranties and covenants with respect to
securities law matters.

ARTICLE XIII

Termination and Forfeiture

Section 13.1 Termination for Cause. Unless otherwise determined by the
Administrator at the Grant Date and set forth in the Award Agreement covering
the Award or otherwise in writing or determined thereafter in a manner more
favorable to the Participant, if a Participant’s employment or service
terminates for Cause, all Options and SARs, whether vested or unvested, and all
other Awards that are unvested or unexercisable or otherwise unpaid (or were
unvested or unexercisable or unpaid at the time of occurrence of Cause) shall be
immediately forfeited and canceled, effective as of the date of the
Participant’s termination of service.

Section 13.2 Termination for Any Other Reason. Unless otherwise determined by
the Administrator at the Grant Date and set forth in the Award Agreement
covering the Award or otherwise in writing or determined thereafter in a manner
more favorable to the Participant, if a Participant’s employment or service
terminates for any reason other than Cause:

(a) All Awards that are unvested or unexercisable shall be immediately forfeited
and canceled, effective as of the date of the Participant’s termination of
service;

(b) All Options and SARs that are vested shall remain outstanding until the
earliest of the following: (x) in the case of termination for death, Disability
or retirement at normal retirement age, the 180th day following the date of the
Participant’s death, Disability or retirement at normal retirement age, (y) the
three-month anniversary of the effective date of the Participant’s termination
for any reason other than death, Disability or retirement at normal retirement
age or (z) the Award’s normal expiration date, after which any unexercised
Options and SARs shall immediately terminate; and

 

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(c) All Awards other than Options and SARs that are vested shall be treated as
set forth in the applicable Award Agreement (or in any more favorable manner
determined by the Administrator).

Section 13.3 Post-Termination Informational Requirements. Before the settlement
of any Award following termination of employment or service, the Administrator
may require the Participant (or the Participant’s Eligible Representative, if
applicable) to make such representations and provide such documents as the
Administrator deems necessary or advisable to effect compliance with Applicable
Law and determine whether the provisions of Section 13.1 or Section 13.4 may
apply to such Award.

Section 13.4 Forfeiture of Awards. Awards granted under this Plan (and gains
earned or accrued in connection with Awards) shall be subject to such generally
applicable policies as to forfeiture and recoupment (including, without
limitation, upon the occurrence of material financial or accounting errors,
financial or other misconduct, Competitive Activity or other conduct by the
Participant that is detrimental to the business or reputation of the Company
and/or its Affiliates) as may be adopted by the Administrator or the Board from
time to time and communicated to Participants. Any such policies may (in the
discretion of the Administrator or the Board) be applied to outstanding Awards
at the time of adoption of such policies, or on a prospective basis only. The
Administrator may specify in an Award Agreement that the Participant’s rights,
payments and benefits with respect to an Award shall be subject to reduction,
cancellation, forfeiture or recoupment upon the occurrence of certain events
(including, without limitation, upon the occurrence of material financial or
accounting errors, financial or other misconduct, Competitive Activity or other
conduct by the Participant that is detrimental to the business or reputation of
the Company and/or its Affiliates). The Participant shall also forfeit and
disgorge to the Company any Awards granted or vested and any gains earned or
accrued due to the exercise of Options or SARs or the sale of any Company Common
Stock to the extent required by Applicable Law or regulations in effect on or
after the Effective Date, including Section 304 of the Sarbanes-Oxley Act of
2002 and Section 10D of the Exchange Act. For the avoidance of doubt, the
Administrator shall have full authority to implement any policies and procedures
necessary to comply with Section 10D of the Exchange Act and any rules
promulgated thereunder. The implementation of policies and procedures pursuant
to this Section 13.4 and any modification of the same shall not be subject to
any restrictions on amendment or modification of Awards.

Section 13.5 Clawbacks. Awards shall be subject to any generally applicable
clawback policy adopted by the Administrator, the Board or the Company that is
communicated to the Participants or any such policy adopted to comply with
Applicable Law.

ARTICLE XIV

Change in Control

Section 14.1 Alternative Award. Subject to Section 14.2, upon a Change in
Control, outstanding Awards (other than Awards that by their express terms are
forfeited upon a Change in Control (e.g., by reason of performance goals not
having been satisfied)) shall be honored or assumed, or new rights shall be
substituted therefor, effective following the Change in Control (such honored,
assumed or substituted award, an “Alternative Award”) having such terms and
conditions as are determined by the Administrator, provided that any Alternative
Awards must (i) include rights and entitlements substantially equivalent to or
better than the rights and entitlements applicable under the Award immediately
prior to the Change in Control (except that, for avoidance of doubt, the
Alternative Awards may relate to an equity interest of a direct or indirect
parent of the Company or an Affiliate rather than to the Company Common Stock);
(ii) as to any service-based vesting requirement applicable to the Award,
provide for full vesting of the Alternative Award upon the Participant’s
termination of employment without Cause or in a constructive discharge during
the remaining vesting period thereof (with “constructive discharge” to have such
meaning as is determined by the Administrator as to a Participant who is not
otherwise covered by a Good Reason provision); (iii) as to any performance-based
vesting requirement applicable to the Award, provide for vesting of the
Alternative Award at target levels upon the Participant’s termination of
employment without Cause or in a constructive discharge during the remaining
vesting period thereof; (iv) as to any Alternative Awards that are stock
options, have identical or better methods of payment of the exercise price
thereof; and (iv) provide for a substantially equivalent method by which the
Participant is able to receive cash in respect of the Alternative Awards (or
such other method as may be agreed by the Administrator and the counterparty in
the Change in Control). If the Administrator determines in connection with a
Change in Control that performance-based vesting requirements applicable to an
Award will no longer operate as intended following the Change in Control or will
no longer provide the intended incentive, the Administrator may modify such
performance-based vesting requirements or impose new performance-based vesting
requirements so long as the Administrator determines that such modified or new
performance-based vesting requirements are not materially more difficult to
achieve than the performance-based vesting requirements applicable to the Award
immediately prior to the Change in Control.

 

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Section 14.2 Accelerated Vesting and Payment. In the event that the
Administrator determines, whether in an Award Agreement or thereafter, including
at the time of or in connection with a Change in Control, that the provisions of
Section 14.1 shall not (or shall no longer) apply, then the Administrator may
determine, in whole or in part and in any combination, that, upon a Change in
Control:

(a) each vested and unvested Option or SAR shall be canceled in exchange for a
payment equal to the excess, if any, of the Change in Control Price over the
applicable Option Price or Base Price;

(b) the vesting restrictions applicable to all other unvested Awards (other than
freestanding Dividend Equivalents not granted in connection with another Award)
shall lapse, all such Awards shall vest and become non-forfeitable and be
canceled in exchange for a payment equal to the Change in Control Price;

(c) all other Awards (other than freestanding Dividend Equivalents not granted
in connection with another Award) that were vested prior to the Change in
Control but that have not been settled or converted into Shares prior to the
Change in Control shall be canceled in exchange for a payment equal to the
Change in Control Price; and

(d) all freestanding Dividend Equivalents not granted in connection with another
Award shall be cancelled without payment therefor.

To the extent any portion of the Change in Control Price is payable other than
in cash and/or other than at the time of the Change in Control, equity holders
under the Plan may (to the extent consistent with Section 409A) receive the same
time and form of payment in the Change in Control in the same proportion as the
Company’s stockholders, or the Administrator may, in its sole discretion, cause
equity holders under the Plan to be paid in cash at the time of the Change in
Control. For avoidance of doubt, upon a Change in Control the Administrator may
cancel Options and SARs for no consideration if the aggregate Fair Market Value
of the Shares subject to Options and SARs is less than or equal to the Option
Price of such Options or the Base Price of such SARs.

Section 14.3 Section 409A. Notwithstanding the broad discretion of the
Administrator in Sections 14.1 and 14.2, if any Award is subject to Section 409A
of the Code and an Alternative Award would be deemed a non-compliant
modification of such Award under Section 409A, then no Alternative Award shall
be provided and such Award shall instead be treated as provided in Section 14.2
or in the Award Agreement (or in such other manner determined by the
Administrator that is a compliant modification under Section 409A).

Section 14.4 Successors and Assigns. The obligations of the Company under the
Plan shall be binding upon any successor corporation or organization resulting
from the merger, consolidation or other reorganization of the Company, or upon
any successor corporation or organization succeeding to all or substantially all
of the assets and business of the Company and its Affiliates, taken as a whole.

ARTICLE XV

Other Provisions

Section 15.1 Awards Not Transferable. Unless otherwise agreed to in writing by
the Administrator, no Award or interest or right therein or part thereof shall
be liable for the debts, contracts or engagements of the Participant or his or
her successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law, by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that nothing in this
Section 15.1 shall prevent transfers by will or by the applicable laws of
descent and distribution or, with the prior approval of the Company’s General
Counsel or the Administrator, estate planning transfers.

Section 15.2 Amendment, Suspension or Termination of the Plan or Award
Agreements.

(a) The Plan may be wholly or partially amended or otherwise modified, suspended
or terminated at any time or from time to time by the Administrator; provided
that without the approval by a majority of the shares entitled to vote at a duly
constituted meeting of shareholders of the Company, no amendment or modification
to the Plan may (i) except as otherwise expressly provided in Section 4.3,
increase the number of Shares subject to the Plan or the individual Award
limitations specified in Section 4.2; (ii) modify the class of persons eligible
for participation in the Plan; or (iii) materially modify the Plan in any other
way that would require shareholder approval under Applicable Law.

 

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(b) Except as otherwise expressly provided in the Plan, neither the amendment,
suspension nor termination of the Plan shall, without the consent of the holder
of the Award, adversely alter or impair any rights or obligations under any
Award theretofore granted. Except as provided by Section 4.3, notwithstanding
the foregoing, the Administrator at any time, and from time to time, may amend
the terms of any one or more existing Award Agreements, provided, however, that
the rights of a Participant under an Award Agreement shall not be adversely
impaired without the Participant’s written consent. The Company shall provide a
Participant with notice of any amendment made to such Participant’s existing
Award Agreement in accordance with the terms of this Section 15.2(b).

(c) Notwithstanding any provision of the Plan to the contrary, in no event shall
adjustments made by the Administrator pursuant to Section 4.3 or the application
of Section 13.5, Section 14.1, Section 14.2, Section 15.7 or Section 15.14 to
any Participant constitute an amendment of the Plan or of any Award Agreement
requiring the consent of any Participant.

(d) No Award may be granted during any period of suspension nor after
termination of the Plan, and in no event may any Award be granted under this
Plan after the expiration of ten (10) years from the Effective Date.

Section 15.3 Effect of Plan upon Other Award and Compensation Plans. The
adoption of this Plan shall not affect any other compensation or incentive plans
in effect for the Company or any of its Subsidiaries. Nothing in this Plan shall
be construed to limit the right of the Company or any of its Subsidiaries (a) to
establish any other forms of incentives or compensation for Service Providers or
(b) to grant or assume options or restricted stock other than under this Plan in
connection with any proper corporate purpose, including, but not by way of
limitation, the grant or assumption of options or restricted stock in connection
with the acquisition by purchase, lease, merger, consolidation or otherwise, of
the business, stock or assets of any corporation, firm or association.

Section 15.4 No Fractional Shares. No fractional shares of Common Stock shall be
issued or delivered pursuant to the Plan. The Administrator shall determine
whether cash, additional Awards or other securities or properties shall be
issued or paid in lieu of fractional shares of Common Stock or whether any
fractional shares should be rounded, forfeited or otherwise eliminated.

Section 15.5 At-Will Employment. Nothing in the Plan or any Award Agreement
hereunder shall confer upon the Participant any right to continue as a Service
Provider of the Company or any of its Subsidiaries or shall interfere with or
restrict in any way the rights of the Company and any of its Subsidiaries, which
are hereby expressly reserved, to discharge any Participant at any time for any
reason whatsoever, with or without notice, and with or without Cause.

Section 15.6 Titles. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of the Plan.

Section 15.7 Conformity to Securities Laws. The Plan is intended to conform to
the extent necessary with all provisions of the Securities Act and the Exchange
Act and any and all regulations and rules promulgated under any of the
foregoing, to the extent the Company, any of its Subsidiaries or any Participant
is subject to the provisions thereof. Notwithstanding anything herein to the
contrary, the Plan shall be administered, and Awards shall be granted and may be
exercised, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, the Plan and Awards
granted hereunder shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.

Section 15.8 Term of Plan. The Plan shall become effective on the date as of
which this Plan is adopted by the Board (the “Effective Date”) and shall
continue in effect, unless sooner terminated pursuant to Section 15.2, until the
tenth (10th) anniversary of the Effective Date. No Award shall be granted
pursuant to the Plan after such date, but Awards theretofore granted may extend
beyond that date. The provisions of the Plan shall continue thereafter to govern
all outstanding Awards.

Section 15.9 Governing Law. To the extent not preempted by federal law, the Plan
shall be construed in accordance with and governed by the laws of the State of
Delaware regardless of the application of rules of conflict of law that would
apply the laws of any other jurisdiction.

Section 15.10 Severability. In the event any portion of the Plan or any action
taken pursuant thereto shall be held illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining parts of the Plan, and
the Plan shall be construed and enforced as if the illegal or invalid provisions
had not been included, and the illegal or invalid action shall be null and void.

Section 15.11 Governing Documents. In the event of any express contradiction
between the Plan and any Award Agreement or any other written agreement between
a Participant and the Company or any Subsidiary of the Company that has been
approved by the Administrator, the express terms of the Plan shall govern,
unless it is expressly specified in such Award Agreement or other written
document that such express provision of the Plan shall not apply.

 

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Section 15.12 Withholding Taxes. In addition to any rights or obligations with
respect to Withholding Taxes under the Plan or any applicable Award Agreement,
the Company or any Subsidiary employing a Service Provider shall have the right
to withhold from the Service Provider, or otherwise require the Service Provider
or an assignee to pay, any Withholding Taxes arising as a result of grant,
exercise, vesting or settlement of any Award or any other taxable event
occurring pursuant to the Plan or any Award Agreement, including, without
limitation, to the extent permitted by law, the right to deduct any such
Withholding Taxes from any payment of any kind otherwise due to the Service
Provider or to take such other actions (including, without limitation,
withholding any Shares or cash deliverable pursuant to the Plan or any Award) as
may be necessary to satisfy such Withholding Taxes; provided, however, that in
the event that the Company withholds Shares issued or issuable to the
Participant to satisfy all or any portion of the Withholding Taxes, the Company
shall withhold a number of whole Shares having a Fair Market Value, determined
as of the date of withholding, not in excess of the minimum of tax required to
be withheld by Applicable Law (or such lower amount as may be necessary to avoid
liability award accounting) and any remaining amount shall be remitted in cash
or withheld; and provided, further, that with respect to any Award subject to
Section 409A of the Code, in no event shall Shares be withheld pursuant to this
Section 15.12 (other than upon or immediately prior to settlement in accordance
with the Plan and the applicable Award Agreement) other than to pay taxes
imposed under the U.S. Federal Insurance Contributions Act (FICA) and any
associated U.S. federal withholding tax imposed under Section 3401 of the Code
and in no event shall the value of such Shares (other than upon immediately
prior to settlement) exceed the amount of the tax imposed under FICA and any
associated U.S. federal withholding tax imposed under Section 3401 of the Code.
The Participant shall be responsible for all Withholding Taxes and other tax
consequences of any Award granted under this Plan.

Section 15.13 Unfunded Plan. The Plan shall be unfunded. The Company shall not
be required to establish any special or separate fund or to segregate any assets
to assure the performance of its obligations under the Plan.

Section 15.14 Section 409A. To the extent that the Administrator determines that
any Award granted under the Plan is subject to Section 409A of the Code, the
Award Agreement evidencing such Award shall incorporate the terms and conditions
required by Section 409A of the Code. To the extent applicable, the Plan and
Award Agreements shall be interpreted in accordance with Section 409A of the
Code and Department of Treasury regulations and other interpretive guidance
issued thereunder, including without limitation any such regulations or other
guidance that may be issued after the adoption of the Plan. Notwithstanding any
provision of the Plan to the contrary, in the event that following the adoption
of the Plan, the Administrator determines that any Award may be subject to
Section 409A of the Code and related regulations and Department of Treasury
guidance (including such Department of Treasury guidance as may be issued after
the adoption of the Plan), the Administrator may adopt such amendments to the
Plan and the applicable Award Agreement or adopt other policies and procedures
(including amendments, policies and procedures with retroactive effect), or take
any other actions, that the Administrator determines are necessary or
appropriate to (a) exempt the Award from Section 409A of the Code and/or
preserve the intended tax treatment of the benefits provided with respect to the
Award, (b) comply with the requirements of Section 409A of the Code and related
Department of Treasury guidance or (c) comply with any correction procedures
available with respect to Section 409A of the Code. Notwithstanding anything
else contained in this Plan or any Award Agreement to the contrary, if a Service
Provider is a “specified employee” as determined pursuant to Section 409A under
any Company Specified Employee policy in effect at the time of the Service
Provider’s “separation from service” (as determined under Section 409A) or, if
no such policy is in effect, as defined in Section 409A of the Code), then, to
the extent necessary to comply with, and avoid imposition on such Service
Provider of any tax penalty imposed under, Section 409A of the Code, any payment
required to be made to a Service Provider hereunder upon or following his or her
separation from service shall be delayed until the first to occur of (i) the
six-month anniversary of the Service Provider’s separation from service and
(ii) the Service Provider’s death. Should payments be delayed in accordance with
the preceding sentence, the accumulated payment that would have been made but
for the period of the delay shall be paid in a single lump sum during the
ten-day period following the lapsing of the delay period. Notwithstanding the
foregoing, neither the Company nor the Administrator shall have any obligation
to take any action to prevent the assessment of any excise tax or penalty on any
Participant under Section 409A of the Code and neither the Company nor the
Administrator shall have any liability to any Participant for such tax or
penalty. No provision of this Plan or an Award Agreement shall be construed to
indemnify any Service Provider for any taxes incurred by reason of Section 409A
(or timing of incurrence thereof), other than an express indemnification
provision therefor.

Section 15.15 Section 16. It is the intent of the Company that the Plan satisfy,
and be interpreted in a manner that satisfies, the applicable requirements of
Rule 16b-3 as promulgated under Section 16 of the Exchange Act so that
Participants will be entitled to the benefit of Rule 16b-3, or any other rule
promulgated under Section 16 of the Exchange Act, and will not be subject to
short-swing liability under Section 16 of the Exchange Act. Accordingly, if the
operation of any provision of the Plan would conflict with the intent expressed
in this Section 15.15, such provision to the extent possible shall be
interpreted and/or deemed amended so as to avoid such conflict.

 

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Section 15.16 Section 162(m). To the extent the Administrator issues any Award
that is intended to be exempt from the deduction limitation of Section 162(m) of
the Code, the Administrator may, without shareholder or grantee approval, amend
the Plan or the relevant Award Agreement retroactively or prospectively to the
extent it determines necessary in order to comply with any subsequent
clarification of Section 162(m) of the Code required to preserve the Company’s
federal income tax deduction for compensation paid pursuant to any such Award.

Section 15.17 Beneficiary Designation. Each Participant under the Plan may from
time to time name any beneficiary or beneficiaries by whom any right under the
Plan is to be exercised in case of such Participant’s death. Each designation
will revoke all prior designations by the same Participant, shall be in a form
reasonably prescribed by the Administrator and shall be effective only when
filed by the Participant in writing with the Company during the Participant’s
lifetime.

Section 15.18 Notices. Except as provided otherwise in an Award Agreement, all
notices and other communications required or permitted to be given under this
Plan or any Award Agreement shall be in writing and shall be deemed to have been
given if delivered personally, sent by email or any other form of electronic
transfer approved by the Administrator, sent by certified or express mail,
return receipt requested, postage prepaid, or by any recognized international
equivalent of such delivery, (i) in the case of notices and communications to
the Company, to 6285 Tri-Ridge Boulevard, Loveland, OH 45140 to the attention of
the Corporate Secretary of the Company or (ii) in the case of a Participant, to
the last known address, or email address or, where the individual is an employee
of the Company or one of its subsidiaries, to the individual’s workplace address
or email address or by other means of electronic transfer acceptable to the
Administrator. All such notices and communications shall be deemed to have been
received on the date of delivery, if sent by email or any other form of
electronic transfer, at the time of dispatch or on the third business day after
the mailing thereof.

 

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