Exhibit 10.38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HERBALIFE LTD.

2014 STOCK INCENTIVE PLAN

Amended and Restated Effective April 28, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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HERBALIFE LTD.

2014 STOCK INCENTIVE PLAN

Amended and Restated Effective April 28, 2016

1. Purpose

The purpose of the Herbalife Ltd. 2014 Stock Incentive Plan (as amended from
time to time, the “Plan”) is to promote and closely align the interests of
employees, directors and consultants of Herbalife Ltd. (the “Company”) and its
shareholders by providing stock-based compensation and other performance-based
compensation. The Plan is intended to strengthen the Company’s ability to drive
performance which enhances long term shareholder value; to increase employee
stock ownership; and to strengthen the Company’s ability to attract and retain
outstanding employees, directors and consultants.

The Plan supersedes the Company’s 2005 Stock Incentive Plan with respect to
future awards, and provides for the grant of Options, Stock Appreciation Rights,
Stock Units and Restricted Stock, any of which may be performance-based, and for
Incentive Bonuses, which may be paid in cash or stock or a combination thereof,
as determined by the Committee.

2. Definitions

As used in the Plan, the following terms shall have the meanings set forth
below:

 

(a)

“Affiliate” means any entity in which the Company has a substantial direct or
indirect equity interest, as determined by the Committee from time to time.

 

(b)

“Act” means the Securities Exchange Act of 1934, as amended, or any successor
thereto.

 

(c)

“Award” means an Option, Stock Appreciation Right, Stock Unit or Incentive Bonus
granted to a Participant pursuant to the provisions of the Plan, any of which
may be subject to performance conditions in accordance with Section 12 of the
Plan.

 

(d)

“Award Agreement” means a written or electronic agreement or other instrument as
may be approved from time to time by the Committee and designated as such
implementing the grant of each Award. An Award Agreement may be in the form of
an agreement to be executed by both the Participant and the Company (or an
authorized representative of the Company) or certificates, notices or similar
instruments as approved by the Committee and designated as such.

 

(e)

“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Act.

 

(f)

“Board” means the board of directors of the Company.

 

(g)

“Change in Control” means the occurrence of any one of the following:

 

(1)

an acquisition (other than directly from the Company after advance approval by a
majority of the Incumbent Board) of Common Shares or other voting securities of
the Company by any “person” (as the term person is used for purposes of
Section 13(d) or 14(d) of the Exchange Act), other than the Company, any
Subsidiary, any employee benefit plan of the Company or any Subsidiary, or any
person in connection with a transaction described in clause (iii) of this
Section 2(d), immediately after which such person has “beneficial ownership”
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or
more of the then outstanding Common Shares or the combined voting power of the
Company’s then outstanding voting securities;

 

(2)

the individuals who, as of the Effective Date, are members of the Board (the
“Incumbent Board”), cease for any reason during any 24-month period to
constitute at least a majority of the members of the Board; provided, however,
that if the election, or nomination for election by the Company’s common
shareholders, of any new director was approved by a vote of at least a majority
of the Incumbent Board, such new director shall, for purposes of the Plan, be
considered as a member of the Incumbent Board; or

 

(3)

the consummation of: (A) a merger, consolidation or reorganization with or into
the Company, unless the voting securities of the Company, immediately before
such merger, consolidation or reorganization, own directly or indirectly
immediately following such merger, consolidation or reorganization, at least 50%
of the combined voting power of the outstanding voting securities of the entity
resulting from such merger or consolidation or reorganization in substantially
the same proportion as their ownership of the voting securities immediately
before such merger, consolidation or reorganization; (B) a complete liquidation
or dissolution of the Company; or (C) the sale, lease, transfer or other
disposition of all or substantially all of the assets of the Company to any
person (other than a transfer to a Subsidiary).

 

(h)

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the rulings and regulations issues thereunder.

 

(i)

“Committee” means the Compensation Committee of the Board (or any successor
committee), or such other committee as designated by the Board to administer the
Plan under Section 6.

 

(j)

“Common Stock” means the common stock of the Company, par value $0.001 a share,
or such other class or kind of shares or other securities as may be applicable
under Section 15.

 

(k)

“Company” means Herbalife Ltd., a Cayman Islands exempted limited liability
company, and except as utilized in the definition of Change in Control, any
successor corporation.

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(l)

“Dividend Equivalents” mean an amount payable in cash or Common Stock, as
determined by the Committee, with respect to a Stock Unit Award equal to what
would have been received if the shares underlying the Award had been owned by
the Participant.

 

(m)

“Effective Date” means the date on which the Plan takes effect, as defined
pursuant to Section 4 of the Plan.

 

(n)

“Eligible Person” means an employee, director or consultant of the Company or a
Subsidiary, including an officer or director who is such an employee.
Notwithstanding the foregoing, a person who would otherwise be an Eligible
Person shall not be an Eligible Person in any jurisdiction where such person’s
participation in the Plan would be unlawful. Non-employee directors shall be
considered Eligible Persons under the Plan.

 

(o)

“Fair Market Value” means as of any date, the value of the Common Stock
determined as follows: (i) if on such date the Common Stock is listed on any
established stock exchange, system or market, its Fair Market Value shall be the
closing price for the Common Stock as quoted on such exchange, system or market
as reported in the Wall Street Journal or such other source as the Committee
deems reliable (or, if no such closing price is reported, the closing price on
the last preceding date on which a sale of Common Stock occurred); provided,
however, that the Committee may, in its discretion, determine the Fair Market
Value of a share of Common Stock on the basis of the opening, closing, or
average of the high and low sale prices of a share of Common Stock on such date,
the preceding trading day, the next succeeding trading day, an average of
trading days, or the actual sale price of a share of Common Stock; and (ii) in
the absence of an established market for the Common Stock, the Fair Market Value
thereof shall be determined in good faith by the Committee by the reasonable
application of a reasonable valuation method, taking into account factors
consistent with Treas. Reg. § 409A-1(b)(5)(iv)(B) as the Committee deems
appropriate.

 

(p)

“Incentive Bonus” means a bonus opportunity awarded under Section 11 pursuant to
which a Participant may become entitled to receive an amount based on
satisfaction of such performance criteria established for a performance period
of not less than one year as are specified in the Award Agreement.

 

(q)

“Incentive Stock Option” means a stock option that is designated as potentially
eligible to qualify as an “incentive stock option” within the meaning of
Section 422 of the Code.

 

(r)

“Nonqualified Stock Option” means a stock option that is not intended to qualify
as an “incentive stock option” within the meaning of Section 422 of the Code.

 

(s)

“Option” means a right to purchase a number of shares of Common Stock at such
exercise price, at such times and on such other terms and conditions as are
specified in or determined pursuant to an Award Agreement. Options granted
pursuant to Section 8 of the Plan may be Incentive Stock Options or Nonqualified
Stock Options.

 

(t)

“Participant” means any individual described in Section 3 to whom Awards have
been granted from time to time by the Committee and any authorized transferee of
such individual.

 

(u)

“Person” shall have the meaning given in Section 3(a)(9) of the Act, as modified
and used in Sections 13(d) and 14(d) thereof, except that such term shall not
include (i) the Company or any of its Affiliates, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
any of its Subsidiaries, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities or (iv) a corporation owned, directly
or indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company.

 

(v)

“Plan” means this HERBALIFE LTD. 2014 Stock Incentive Plan, as amended and
restated as set forth herein and as it may be further amended from time to time.

 

(w)

“Prior Plans” means the Company’s Amended and Restated 2005 Stock Incentive Plan
and the Company’s 2004 Stock Incentive Plan, each as amended.

 

(x)

“Qualifying Performance Criteria” has the meaning set forth in Section 12(b).

 

(y)

“Restricted Stock” means an Award or issuance of Common Stock the grant,
issuance, retention, vesting and/or transferability of which is subject during
specified periods of time to such conditions (including continued employment or
performance conditions) and terms as the Committee deems appropriate.

 

(aa)

“Separation from Service” or “Separates from Service” means the termination of
Participant’s employment with the Company and all Subsidiaries that constitutes
a “separation from service” within the meaning of Section 409A of the Code.

 

(bb)

“Stock Appreciation Right” means a right granted pursuant to Section 9 of the
Plan that entitles the Participant to receive, in cash or Common Stock or a
combination thereof, as determined by the Committee, value equal to the excess
of (i) the market price of a specified number of shares of Common Stock at the
time of exercise over (ii) the exercise price of the right, as established by
the Committee on the date of grant.

 

(cc)

“Stock Unit” means an Award denominated in units of Common Stock under which the
issuance of shares of Common Stock (or cash payment in lieu thereof) is subject
to such conditions (including continued employment or performance conditions)
and terms as the Committee deems appropriate.

 

(dd)

“Subsidiary” means any business association (including a corporation or a
partnership, other than the Company) in an unbroken chain of such associations
beginning with the Company if each of the associations other than the last
association in the unbroken chain owns equity interests (including stock or
partnership interests) possessing 50% or more of the total combined voting power
of all classes of equity interests in one of the other associations in such
chain.

 

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(ee)

“Substitute Awards” means Awards granted or Common Stock issued by the Company
in assumption of, or in substitution or exchange for, awards previously granted,
or the right or obligation to make future awards, by a company acquired by the
Company or any Subsidiary or with which the Company or any Subsidiary combines.
 

3. Eligibility

Any Eligible Person is eligible to receive an Award. Options intending to
qualify as Incentive Stock Options may only be granted to employees of the
Company or any Subsidiary.

4. Adoption and Termination of Plan

This Plan was originally effective on April 29, 2014 (the “Effective Date”). The
Plan as amended and restated was approved by the Board of Directors of the
Company on February 9, 2016 (the “Approval Date”), and shall become effective
when it is approved by the Company’s shareholders at the Company’s 2016 Annual
General Meeting of Shareholders. The Plan shall remain available for the grant
of Awards until April 28, 2026; provided, however, that Incentive Stock Options
may not be granted under the Plan after the tenth (10th) anniversary of the
Approval Date. Notwithstanding the foregoing, the Plan may be terminated at such
earlier time as the Board may determine. Termination of the Plan will not affect
the rights and obligations of the Participants and the Company arising under
Awards theretofore granted.

5. Shares Subject to the Plan and to Awards

(a) Aggregate Limits. The aggregate number of shares of Common Stock issuable
under the Plan shall not exceed 8,700,000, plus any shares of Common Stock that
remained available for issuance under the Prior Plans as of the Effective Date.
Any shares of Common Stock issued under Options or Stock Appreciation Rights
shall be counted against the number of shares issuable under the Plan on a
one-for-one basis and any shares of Common Stock issued pursuant to Awards other
than Options or Stock Appreciation Rights shall be counted against this limit as
1.85 shares of Common Stock for every one (1) share of Common Stock subject to
such Award. Shares of Common Stock subject to outstanding awards under either of
the Prior Plans as of the Effective Date (such awards the “Prior Plan Awards”)
that, after the Effective Date, are canceled, expired, forfeited or otherwise
not issued under a Prior Plan Award (including as a result of being withheld to
pay withholding taxes in connection with any such awards (other than options or
stock appreciation rights)) or settled in cash shall be added to the number of
shares of Common Stock issuable under the Plan as one (1) share of Common Stock
if such shares were subject to options or stock appreciation rights granted
under a Prior Plan, and as 1.85 shares of Common Stock if such shares were
subject to awards other than options or stock appreciation rights granted under
either of the Prior Plans. The aggregate number of shares of Common Stock
available for grant under this Plan and the number of shares of Common Stock
subject to Awards outstanding at the time of any event described in Section 15
shall be subject to adjustment as provided in Section 15. The shares of Common
Stock issued pursuant to Awards granted under this Plan may be shares that are
authorized and unissued or shares that were reacquired by the Company, including
shares purchased in the open market.

(b) Issuance of Shares. For purposes of Section 5(a), the aggregate number of
shares of Common Stock issued under this Plan at any time shall equal only the
number of shares of Common Stock actually issued upon exercise or settlement of
an Award, and shares of Common Stock subject to Awards that have been canceled,
expired, forfeited or otherwise not issued under an Award and shares of Common
Stock subject to Awards settled in cash shall not count as shares of Common
Stock issued under this Plan. Notwithstanding the foregoing, the following
shares of Common Stock will not be added back (or with respect to Prior Plan
Awards, will not be added) to the aggregate number of shares of Common Stock
available for issuance: (i) shares of Common Stock that were subject to a
stock-settled Stock Appreciation Right (or a stock appreciation right granted
under a Prior Plan) and were not issued upon the net settlement or net exercise
of such Stock Appreciation Right (or stock appreciation right granted under a
Prior Plan), (ii) shares of Common Stock delivered to or withheld by the Company
to pay the exercise price of an Option (or an option granted under a Prior
Plan), (iii) Shares of Common Stock delivered to or withheld by the Company to
pay the withholding taxes related an Award (or an award granted under a Prior
Plan), or (iv) Shares of Common Stock repurchased on the open market with cash
proceeds from exercise of an Option (or option granted under a Prior Plan). Any
shares of Common Stock that again become available for grant pursuant to this
Section 5 shall be added back as one(1) share of Common Stock if such shares
were subject to Options or Stock Appreciation Rights granted under the Plan or
options or stock appreciation rights granted under a Prior Plan, and as 1.85
shares of Common Stock if such shares were subject to Awards other than Options
or Stock Appreciation Rights granted under the Plan or subject to awards other
than options or stock appreciation rights granted under the Prior Plans. In
addition, any shares issued by the Company through the assumption or
substitution of outstanding grants from an acquired company shall not reduce the
shares available for grants under the Plan.

(c) Tax Code Limits. The aggregate number of shares of Common Stock that may be
issued pursuant to the exercise of Incentive Stock Options granted under this
Plan shall not exceed 5,000,000, which number shall be calculated and adjusted
pursuant to Section 15 only to the extent that such calculation or adjustment
will not affect the status of any option intended to qualify as an Incentive
Stock Option under Section 422 of the Code. The aggregate number of shares of
Common Stock that may be earned pursuant to Awards granted under this Plan
during any calendar year to any one Participant shall not exceed 2,000,000 (the
“Annual Share Limit”), which number shall be calculated and adjusted pursuant to
Section 15 only to the extent that such calculation or adjustment will not
affect the status of any Award intended to qualify as “performance-based
compensation” under Section 162(m) of the Code but which number shall not count
any tandem SARs (as defined in Section 9). The maximum cash amount payable
pursuant to all Incentive Bonuses granted in any calendar year to any
Participant under this Plan that are intended to satisfy the requirements for
“performance-based compensation” under Section 162(m) of the Code shall not
exceed $15,000,000 (the “Annual Cash Limit”).

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(d) Substitute Awards. Substitute Awards shall not reduce the shares of Common
Stock authorized for issuance under the Plan or authorized for grant to a
Participant in any calendar year. Additionally, in the event that a company
acquired by the Company or any Subsidiary, or with which the Company or any
Subsidiary combines, has shares available under a pre-existing plan approved by
shareholders and not adopted in contemplation of such acquisition or
combination, the shares available for grant pursuant to the terms of such
pre-existing plan (as adjusted, to the extent appropriate, using the exchange
ratio or other adjustment or valuation ratio or formula used in such acquisition
or combination to determine the consideration payable to the holders of common
stock of the entities party to such acquisition or combination) may be used for
Awards under the Plan and shall not reduce the shares of Common Stock authorized
for issuance under the Plan; provided that Awards using such available shares
shall not be made after the date awards or grants could have been made under the
terms of the pre-existing plan, absent the acquisition or combination, and shall
only be made to individuals who were employees or directors of such acquired or
combined company before such acquisition or combination.

(e) Non-Employee Director Limits. The aggregate number of shares of Common Stock
subject to Awards granted under this Plan during any calendar year to any one
non-employee director shall not exceed that number of shares having a Fair
Market Value on the date of grant of $375,000; provided, however, that in the
calendar year in which a non-employee director first joins the Board or is first
designated as Chairman of the Board or Lead Director, the maximum number of
shares subject to Awards granted to such non-employee director may be up to two
hundred percent (200%) of the number of shares of Common Stock indicated by the
foregoing limit.

6. Administration of the Plan

(a) Administrator of the Plan. The Plan shall be administered by the Committee.
The Board shall fill vacancies on, and from time to time may remove or add
members to, the Committee. The Committee shall act pursuant to a majority vote
or unanimous written consent. Any power of the Committee may also be exercised
by the Board, except to the extent that the grant or exercise of such authority
would cause any Award or transaction to become subject to (or lose an exemption
under) the short-swing profit recovery provisions of Section 16 of the
Securities Exchange Act of 1934 or cause an Award intended to qualify as
performance-based compensation under Section 162(m) of the Code not to qualify
for such treatment. To the extent that any permitted action taken by the Board
conflicts with action taken by the Committee, the Board action shall control. To
the maximum extent permissible under applicable law, the Compensation Committee
of the Board (or any successor) may by resolution delegate any or all of its
authority to one or more subcommittees composed of one or more directors and/or
officers, and any such subcommittee shall be treated as the Committee for all
purposes under this Plan. Notwithstanding the foregoing, if the Board or the
Compensation Committee of the Board (or any successor) delegates to a
subcommittee comprised of one or more officers of the Company (who are not also
directors) the authority to grant Awards, the resolution so authorizing such
subcommittee shall specify the total number of shares of Common Stock such
subcommittee may award pursuant to such delegated authority, and no such
subcommittee shall designate any officer serving thereon or any executive
officer of the Company as a recipient of any Awards granted under such delegated
authority. The Committee hereby delegates to and designates the senior human
resources officer of the Company (or such other officer with similar authority),
and to his or her delegates or designees, the authority to assist the Committee
in the day-to-day administration of the Plan and of Awards granted under the
Plan, including without limitation those powers set forth in Section 6(b)(4)
through (9) and to execute agreements evidencing Awards made under this Plan or
other documents entered into under this Plan on behalf of the Committee or the
Company. The Committee may further designate and delegate to one or more
additional officers or employees of the Company or any subsidiary, and/or one or
more agents, authority to assist the Committee in any or all aspects of the
day-to-day administration of the Plan and/or of Awards granted under the Plan.

(b) Powers of Committee. Subject to the express provisions of this Plan, the
Committee shall be authorized and empowered to do all things that it determines
to be necessary or appropriate in connection with the administration of this
Plan, including, without limitation:

 

(1)

to prescribe, amend and rescind rules and regulations relating to this Plan and
to define terms not otherwise defined herein;

 

(2)

to determine which persons are Eligible Persons, to which of such Eligible
Persons, if any, Awards shall be granted hereunder and the timing of any such
Awards;

 

(3)

to prescribe and amend the terms of the Award Agreements, to grant Awards and
determine the terms and conditions thereof;

 

(4)

to establish and verify the extent of satisfaction of any performance goals or
other conditions applicable to the grant, issuance, retention, vesting,
exercisability or settlement of any Award;

 

(5)

to prescribe and amend the terms of or form of any document or notice required
to be delivered to the Company by Participants under this Plan;

 

(6)

to determine the extent to which adjustments are required pursuant to
Section 15;

 

(7)

to interpret and construe this Plan, any rules and regulations under this Plan
and the terms and conditions of any Award granted hereunder, and to make
exceptions to any such provisions if the Committee, in good faith, determines
that it is appropriate to do so;

 

(8)

to approve corrections in the documentation or administration of any Award; and

 

(9)

to make all other determinations deemed necessary or advisable for the
administration of this Plan.

 

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Notwithstanding anything in this Plan to the contrary, with respect to any Award
that is “deferred compensation” under Section 409A of the Code, the Committee
shall exercise its discretion in a manner that causes such Awards to be
compliant with or exempt from the requirements of such Code section. Without
limiting the foregoing, unless expressly agreed to in writing by the Participant
holding such Award, the Committee shall not take any action with respect to any
Award which constitutes (i) a modification of a stock right within the meaning
of Treas. Reg. Section 1.409A-1(b)(5)(v)(B) so as to constitute the grant of a
new stock right, (ii) an extension of a stock right, including the addition of a
feature for the deferral of compensation within the meaning of Treas. Reg.
Section 1.409A-1(b)(5)(v)(C), or (iii) an impermissible acceleration of a
payment date or a subsequent deferral of a stock right subject to Section 409A
of the Code within the meaning of Treas. Reg. Section 1.409A-1(b)(5)(v)(E).

The Committee may, in its sole and absolute discretion, without amendment to the
Plan but subject to the limitations otherwise set forth in Section 19, waive or
amend the operation of Plan provisions respecting exercise after termination of
employment or service to the Company or an Affiliate. The Committee or any
member thereof may, in its sole and absolute discretion and, except as otherwise
provided in Section 19, waive, settle or adjust any of the terms of any Award so
as to avoid unanticipated consequences or address unanticipated events
(including any temporary closure of an applicable stock exchange, disruption of
communications or natural catastrophe).

Further, and notwithstanding anything in the Plan to the contrary, Restricted
Stock or Stock Unit Awards granted under the Plan may not become exercisable,
vest or be settled, in whole or in part, prior to the one-year anniversary of
the date of grant, except that the Committee may provide that such Awards become
exercisable, vest or settle prior to such date in the event of the Participant’s
death or disability or in the event of a Change in Control. Notwithstanding the
foregoing, with respect to Restricted Stock or Stock Unit Awards, up to 5% of
the aggregate number of shares of Common Stock authorized for issuance under
this Plan (as described in Section 5(a)) may be issued pursuant to Awards
subject to any, or no, vesting conditions, as the Committee determines
appropriate.

(c) Determinations by the Committee. All decisions, determinations and
interpretations by the Committee regarding the Plan, any rules and regulations
under the Plan and the terms and conditions of or operation of any Award granted
hereunder, shall be final and binding on all Participants, beneficiaries, heirs,
assigns or other persons holding or claiming rights under the Plan or any Award.
The Committee shall consider such factors as it deems relevant, in its sole and
absolute discretion, to making such decisions, determinations and
interpretations including, without limitation, the recommendations or advice of
any officer or other employee of the Company and such attorneys, consultants and
accountants as it may select. Members of the Board and members of the Committee
acting under the Plan shall be fully protected in relying in good faith upon the
advice of counsel and shall incur no liability except for gross negligence or
willful misconduct in the performance of their duties.

(d) Subsidiary Awards. In the case of a grant of an Award to any Participant
employed by a Subsidiary, such grant may, if the Committee so directs, be
implemented by the Company issuing any subject shares of Common Stock to the
Subsidiary, for such lawful consideration as the Committee may determine, upon
the condition or understanding that the Subsidiary will transfer the shares of
Common Stock to the Participant in accordance with the terms of the Award
specified by the Committee pursuant to the provisions of the Plan.
Notwithstanding any other provision hereof, such Award may be issued by and in
the name of the Subsidiary and shall be deemed granted on such date as the
Committee shall determine.

7. Plan Awards

(a) Terms Set Forth in Award Agreement. Awards may be granted at any time and
from time to time prior to the termination of the Plan to Eligible Persons as
determined by the Committee. The terms and conditions of each Award shall be set
forth in an Award Agreement in a form approved by the Committee for such Award,
which Award Agreement may contain such terms and conditions as specified from
time to time by the Committee, provided such terms and conditions do not
conflict with the Plan. The Award Agreement for any Award (other than Restricted
Stock awards) shall include the time or times at or within which and the
consideration, if any, for which any shares of Common Stock may be acquired from
the Company. The terms of Awards may vary among Participants, and the Plan does
not impose upon the Committee any requirement to make Awards subject to uniform
terms. Accordingly, the terms of individual Award Agreements may vary.

(b) Separation from Service. Subject to the express provisions of the Plan, the
Committee shall specify before, at, or after the time of grant of an Award the
provisions governing the effect(s) upon an Award of a Participant’s Separation
from Service.

(c) Rights of a Shareholder. A Participant shall have no rights as a shareholder
with respect to shares of Common Stock covered by an Award (including voting
rights) until the date the Participant becomes the holder of record of such
shares of Common Stock. No adjustment shall be made for dividends or other
rights for which the record date is prior to such date, except as provided in
Section 10(b) or Section 15 of this Plan or as otherwise provided by the
Committee.

8. Options

(a) Grant, Term and Price. The grant, issuance, retention, vesting and/or
settlement of any Option shall occur at such time and be subject to such terms
and conditions as determined by the Committee or under criteria established by
the Committee, which may include conditions based on continued employment,
passage of time, attainment of age and/or service requirements, and/or
satisfaction of performance conditions in accordance with Section 12 of the
Plan. The term of an Option shall in no event be greater than ten years;
provided, however, the term of an Option (other than an Incentive Stock Option)
shall be automatically extended if, at the time

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of its scheduled expiration, the Participant holding such Option is prohibited
by law or the Company’s insider trading policy from exercising the Option, which
extension shall expire on the thirtieth (30th) day following the date such
prohibition no longer applies. The Committee will establish the price at which
Common Stock may be purchased upon exercise of an Option, which, in no event
will be less than the Fair Market Value of such shares on the date of grant;
provided, however, that the exercise price per share of Common Stock with
respect to an Option that is granted as a Substitute Award may be less than the
Fair Market Value of the shares of Common Stock on the date such Option is
granted if such exercise price is based on a formula set forth in the terms of
the options held by such optionees or in the terms of the agreement providing
for such merger or other acquisition that satisfies the requirements of
(i) Section 409A of the Code, if such options held by such optionees are not
intended to qualify as “incentive stock options” within the meaning of
Section 422 of the Code, and (ii) Section 424(a) of the Code, if such options
held by such optionees are intended to qualify as “incentive stock options”
within the meaning of Section 422 of the Code. The exercise price of any Option
may be paid in cash or such other method as determined by the Committee,
including an irrevocable commitment by a broker to pay over such amount from a
sale of the Shares issuable under an Option, the delivery of previously owned
shares of Common Stock or withholding of shares of Common Stock deliverable upon
exercise.

(b) No Repricing without Shareholder Approval. Other than in connection with a
change in the Company’s capitalization (as described in Section 15), the
Committee shall not, without shareholder approval, reduce the exercise price of
such Option and, at any time when the exercise price of an Option is above the
Fair Market Value of a share of Common Stock, shall not, without shareholder
approval (except in the case of a Change in Control), exchange such Option for a
new Award or for cash.

(c) Incentive Stock Options. Notwithstanding anything to the contrary in this
Section 8, in the case of the grant of an Option intending to qualify as an
Incentive Stock Option, if the Participant owns stock possessing more than 10
percent of the combined voting power of all classes of stock of the Company (a
“10% Shareholder”), the exercise price of such Option must be at least 110
percent of the Fair Market Value of the shares of Common Stock on the date of
grant and the Option must expire within a period of not more than five (5) years
from the date of grant. Notwithstanding anything in this Section 8 to the
contrary, options designated as Incentive Stock Options shall not be eligible
for treatment under the Code as Incentive Stock Options (and will be deemed to
be Nonqualified Stock Options) to the extent that either (a) the aggregate Fair
Market Value of shares of Common Stock (determined as of the time of grant) with
respect to which such Options are exercisable for the first time by the
Participant during any calendar year (under all plans of the Company and any
Subsidiary) exceeds $100,000, taking Options into account in the order in which
they were granted, or (b) such Options otherwise remain exercisable but are not
exercised within three (3) months (or such other period of time provided in
Section 422 of the Code) of separation of service (as determined in accordance
with Section 3401(c) of the Code and the regulations promulgated thereunder).

(d) No Shareholder Rights. Participants shall have no voting rights and will
have no rights to receive dividends or Dividend Equivalents in respect of an
Option or any shares of Common Stock subject to an Option until the Participant
has become the holder of record of such shares.

9. Stock Appreciation Rights

(a) General Terms. The grant, issuance, retention, vesting and/or settlement of
any Stock Appreciation Right shall occur at such time and be subject to such
terms and conditions as determined by the Committee or under criteria
established by the Committee, which may include conditions based on continued
employment, passage of time, attainment of age and/or service requirements,
and/or satisfaction of performance conditions in accordance with Section 12 of
the Plan. Stock Appreciation Rights may be granted to Participants from time to
time either in tandem with or as a component of Options granted under the Plan
(“tandem SARs”) or not in conjunction with other Awards (“freestanding SARs”).
Upon exercise of a tandem SAR as to some or all of the shares covered by the
grant, the related Option shall be canceled automatically to the extent of the
number of shares covered by such exercise. Conversely, if the related Option is
exercised as to some or all of the shares covered by the grant, the related
tandem SAR, if any, shall be canceled automatically to the extent of the number
of shares covered by the Option exercise. Any Stock Appreciation Right granted
in tandem with an Option may be granted at the same time such Option is granted
or at any time thereafter before exercise or expiration of such Option, provided
that the Fair Market Value of Common Stock on the date of the SAR’s grant is not
greater than the exercise price of the related Option. All freestanding SARs
shall be granted subject to the same terms and conditions applicable to Options
as set forth in Section 8 and all tandem SARs shall have the same exercise price
as the Option to which they relate. Subject to the provisions of Section 8 and
the immediately preceding sentence, the Committee may impose such other
conditions or restrictions on any Stock Appreciation Right as it shall deem
appropriate. Stock Appreciation Rights may be settled in Common Stock, cash,
Restricted Stock or a combination thereof, as determined by the Committee and
set forth in the applicable Award Agreement.

(b) No Repricing without Shareholder Approval. Other than in connection with a
change in the Company’s capitalization (as described in Section 15), the
Committee shall not, without shareholder approval, reduce the exercise price of
such Stock Appreciation Right and, at any time when the exercise price of a
Stock Appreciation Right is above the Fair Market Value of a share of Common
Stock, shall not, without shareholder approval (except in the case of a Change
in Control), exchange such Stock Appreciation Right for a new Award or for cash.

(c) No Shareholder Rights. Participants shall have no voting rights and will
have no rights to receive dividends or Dividend Equivalents in respect of an
Award of Stock Appreciation Rights or any shares of Common Stock subject to an
Award of Stock Appreciation Rights until the Participant has become the holder
of record of such shares.

 

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10. Restricted Stock and Stock Unit Awards

(a) Vesting and Performance Criteria. The grant, issuance, retention, vesting
and/or settlement of any Restricted Stock or Stock Unit Award shall occur at
such time and be subject to such terms and conditions as determined by the
Committee or under criteria established by the Committee, which may include
conditions based on continued employment, passage of time, attainment of age
and/or service requirements, and /or satisfaction of performance conditions in
accordance with Section 12 of the Plan. In addition, the Committee shall have
the right to grant Restricted Stock or Stock Unit Awards as the form of payment
for grants or rights earned or due under other shareholder-approved compensation
plans or arrangements of the Company.

(b) Dividends and Distributions. Participants in whose name Restricted Stock is
granted shall be entitled to receive all dividends and other distributions paid
with respect to those shares of Common Stock, unless determined otherwise by the
Committee. The Committee will determine whether any such dividends or
distributions will be automatically reinvested in additional Restricted Stock
and/or subject to the same restrictions on transferability as the shares of
Restricted Stock with respect to which they were distributed or whether such
dividends or distributions will be paid in cash. Unless otherwise provided in
the Award Agreement, during the period prior to shares being issued in the name
of a Participant under any Stock Unit, the Company shall pay or accrue Dividend
Equivalents on each date dividends on Common Stock are paid, subject to such
conditions as the Committee may deem appropriate. The time and form of any such
payment of Dividend Equivalents shall be specified in the Award Agreement.
Notwithstanding anything herein to the contrary, in no event will dividends or
Dividend Equivalents be paid during the performance period with respect to
unearned Awards of Restricted Stock or Stock Units that are subject to
performance-based vesting criteria. Dividends or Dividend Equivalents accrued on
such shares shall become payable no earlier than the date the performance-based
vesting criteria have been achieved and the underlying shares or Stock Units
have been earned.

11. Incentive Bonuses

(a) Performance Criteria. The Committee shall establish the performance criteria
and level of achievement versus these criteria that shall determine the amount
payable under an Incentive Bonus, which may include a target, threshold and/or
maximum amount payable and any formula for determining such, and which criteria
may be based on performance conditions in accordance with Section 12 of the
Plan. The Committee may specify the percentage of the target Incentive Bonus
that is intended to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code. Notwithstanding anything to the
contrary herein, the performance criteria for any portion of an Incentive Bonus
that is intended by the Committee to satisfy the requirements for
“performance-based compensation” under Section 162(m) of the Code shall be a
measure based on one or more Qualifying Performance Criteria (as defined in
Section 12(b)) selected by the Committee and specified at the time the Incentive
Bonus is granted.

(b) Timing and Form of Payment. The Committee shall determine the timing of
payment of any Incentive Bonus. Payment of the amount due under an Incentive
Bonus may be made in cash or in Common Stock, as determined by the Committee.

12. Qualifying Performance-Based Compensation

(a) General. The Committee may establish performance criteria and level of
achievement versus such criteria that shall determine the number of shares of
Common Stock to be granted, retained, vested, issued or issuable under or in
settlement of or the amount payable pursuant to an Award, which criteria may be
based on Qualifying Performance Criteria or other standards of financial
performance and/or personal performance evaluations. In addition, the Committee
may specify that an Award or a portion of an Award is intended to satisfy the
requirements for “performance-based compensation” under Section 162(m) of the
Code, provided that the performance criteria for such Award or portion of an
Award that is intended by the Committee to satisfy the requirements for
“performance-based compensation” under Section 162(m) of the Code shall be a
measure based on one or more Qualifying Performance Criteria selected by the
Committee and specified at the time the Award is granted.

(b) Qualifying Performance Criteria. For purposes of this Plan, the term
“Qualifying Performance Criteria” shall mean any one or more of the following
performance criteria, or derivations of such performance criteria, either
individually, alternatively or in any combination, applied to either the Company
as a whole or to a business unit or Subsidiary, either individually,
alternatively or in any combination, and measured either annually or
cumulatively over a period of years, on an absolute basis or relative to a
pre-established target, to previous years’ results or to a designated comparison
group, in each case as specified by the Committee: (i) cash flow (before or
after dividends), (ii) earnings per share (including earnings before interest,
taxes, depreciation and amortization), (iii) stock price, (iv) return on equity,
(v) total shareholder return, (vi) return on capital (including return on total
capital or return on invested capital), (vii) return on assets or net assets,
(viii) market capitalization, (ix) economic value added, (x) debt leverage (debt
to capital), (xi) revenue (including adjusted revenue, Volume Points, net sales
and analogous financial measures), (xii) income or net income, (xiii) operating
income, (xiv) operating profit or net operating profit, (xv) operating margin or
profit margin, (xvi) return on operating revenue, (xvii) cash from operations,
(xviii) operating ratio, (xix) operating revenue or (xx) customer service. To
the extent consistent with Section 162(m) of the Code, the Committee may
provide, at the time an Award is granted or at any time during the first 90 days
of the applicable performance period (or prior to the expiration of 25% of the
performance period if the performance period less than one year, or at such
later time if permitted pursuant to Section 162(m)), that any evaluation of
performance under a Qualifying Performance Criteria shall include or exclude any
of the following events that occurs during the applicable performance period:
(A) the effects of charges for restructurings or discontinued operations,
(B) items of gain, loss or expense determined to be infrequently occurring or
related to the disposal of a segment of a business or related to a change in
accounting principle, (C) the cumulative effect of accounting change, (D) asset
write-downs, (E) litigation, claims, judgments, settlements or loss
contingencies,

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(F) the effect of changes in tax law, accounting principles or other such laws
or provisions affecting reported results, (G) accruals for reorganization and
restructuring programs and (H) accruals of any amounts for payment under this
Plan or any other compensation arrangement maintained by the Company.

(c) Certification. The Committee shall certify the extent to which any
Qualifying Performance Criteria has been satisfied, and the amount payable as a
result thereof, prior to payment, settlement or vesting of any Award that is
intended to satisfy the requirements for “performance-based compensation” under
Section 162(m) of the Code.

13. Deferral of Payment

The Committee may, in an Award Agreement or otherwise, provide for the deferred
delivery of Common Stock or cash upon settlement, vesting or other events with
respect to Stock Units, or in payment or satisfaction of an Incentive Bonus. If
a Participant has elected to defer payment or settlement of an Award, then the
Award will (provided that all vesting and other conditions have been satisfied)
be paid in accordance with the Participant’s deferral consistent with the terms
of the applicable deferred compensation plan maintained by the Company.
Notwithstanding anything herein to the contrary, in no event will any election
to defer the delivery of Common Stock or any other payment with respect to any
Award be allowed if the Committee determines, in its sole discretion, that the
deferral would result in the imposition of the additional tax under
Section 409A(a)(1)(B) of the Code. No Award shall provide for deferral of
compensation that does not comply with Section 409A of the Code. The Company,
the Board and the Committee shall have no liability to a Participant, or any
other party, if an Award that is intended to be exempt from, or compliant with,
Section 409A of the Code is not so exempt or compliant or for any action taken
by the Board or the Committee.

14. Conditions and Restrictions Upon Securities Subject to Awards

The Committee may provide that the Common Stock issued upon exercise of an
Option or Stock Appreciation Right or otherwise subject to or issued under an
Award shall be subject to such further agreements, restrictions, conditions or
limitations as the Committee in its discretion may specify prior to the exercise
of such Option or Stock Appreciation Right or the grant, vesting or settlement
of such Award, including without limitation, conditions on vesting or
transferability, forfeiture or repurchase provisions and method of payment for
the Common Stock issued upon exercise, vesting or settlement of such Award
(including the actual or constructive surrender of Common Stock already owned by
the Participant) or payment of taxes arising in connection with an Award.
Without limiting the foregoing, such restrictions may address the timing and
manner of any resales by the Participant or other subsequent transfers by the
Participant of any shares of Common Stock issued under an Award, including
without limitation (i) restrictions under an insider trading policy or pursuant
to applicable law, (ii) restrictions designed to delay and/or coordinate the
timing and manner of sales by the Participant and holders of other Company
equity compensation arrangements, (iii) restrictions as to the use of a
specified brokerage firm for such resales or other transfers and (iv) provisions
requiring Common Stock be sold on the open market or to the Company in order to
satisfy tax withholding or other obligations.

15. Adjustment of and Changes in the Stock

(a) The number and kind of shares of Common Stock available for issuance under
this Plan (including under any Awards then outstanding), and the number and kind
of shares of Common Stock subject to the limits set forth in Section 5 of this
Plan, shall be equitably adjusted by the Committee to reflect any
reorganization, reclassification, combination of shares, stock split, reverse
stock split, spin-off, dividend or distribution of securities, property or cash
(other than regular, quarterly cash dividends), or any other event or
transaction that affects the number or kind of shares of Common Stock
outstanding. Such adjustment may be designed to comply with Section 424 of the
Code or may be designed to treat the shares of Common Stock available under the
Plan and subject to Awards as if they were all outstanding on the record date
for such event or transaction or to increase the number of such shares of Common
Stock to reflect a deemed reinvestment in shares of Common Stock of the amount
distributed to the Company’s securityholders. The terms of any outstanding Award
shall also be equitably adjusted by the Committee as to price, number or kind of
shares of Common Stock subject to such Award, vesting, and other terms to
reflect the foregoing events, which adjustments need not be uniform as between
different Awards or different types of Awards. No fractional shares of Common
Stock shall be issued pursuant to such an adjustment.

(b) In the event there shall be any other change in the number or kind of
outstanding shares of Common Stock, or any stock or other securities into which
such Common Stock shall have been changed, or for which it shall have been
exchanged, by reason of a Change in Control, other merger, consolidation or
otherwise, then the Committee shall determine the appropriate and equitable
adjustment to be effected, which adjustments need not be uniform between
different Awards or different types of Awards. In addition, in the event of such
change described in this paragraph, the Committee may accelerate the time or
times at which any Award may be exercised, consistent with and as otherwise
permitted under Section 409A of the Code, and may provide for cancellation of
such accelerated Awards that are not exercised within a time prescribed by the
Committee in its sole discretion.

(c) Unless otherwise expressly provided for in the Award Agreement or another
contract, including an employment agreement, or under the terms of a transaction
constituting a Change in Control, the following shall occur upon a Participant’s
involuntary termination of employment within twenty-four (24) months following a
Change in Control, provided that such termination does not result from the
Participant’s termination for disability, cause or gross misconduct: (i) in the
case of an Option or Stock Appreciation Right, the Participant shall have the
ability to exercise such Option or Stock Appreciation Right, including any
portion of the Option or Stock Appreciation Right not previously exercisable,
and the Option or Stock Appreciation Right shall remain exercisable for a

 

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period of three (3) years following such termination, but in no event after the
expiration of such Option or Stock Appreciation Right, (ii) in the case of an
Award subject to performance conditions in accordance with Section 12 of the
Plan, the Participant shall have the right to receive a payment based on
performance through a date determined by the Committee prior to the Change in
Control (unless such performance cannot be determined, in which case the
Participant shall have the right to receive a payment equal to the target amount
payable), and (iii) in the case of outstanding Restricted Stock and/or Stock
Units, all conditions to the grant, issuance, retention, vesting or
transferability of, or any other restrictions applicable to, such Award shall
immediately lapse. Notwithstanding anything herein to the contrary, in the event
of a Change in Control in which the acquiring or surviving company in the
transaction does not assume or continue outstanding Awards upon the Change in
Control, immediately prior to the Change in Control, all Awards that are not
assumed or continued shall be treated as follows effective immediately prior to
the Change in Control: (A) in the case of an Option or Stock Appreciation Right,
the Participant shall have the ability to exercise such Option or Stock
Appreciation Right, including any portion of the Option or Stock Appreciation
Right not previously exercisable (provided, that any Option or Stock
Appreciation Right for which the exercise price is less than the consideration
per Share payable to shareholders of the Company in such Change in Control may
be cancelled upon the consummation of the Change in Control without payment of
any additional consideration), (B) in the case of an Award subject to
performance conditions in accordance with Section 12 of the Plan, the
Participant shall have the right to receive a payment based on performance
through a date determined by the Committee prior to the Change in Control
(unless such performance cannot be determined, in which case the Participant
shall have the right to receive a payment equal to the target amount payable),
and (C) in the case of outstanding Restricted Stock and/or Stock Units, all
conditions to the grant, issuance, retention, vesting or transferability of, or
any other restrictions applicable to, such Award shall immediately lapse. In no
event shall any action be taken pursuant to this Section 15(c) that would change
the payment or settlement date of an Award in a manner that would result in the
imposition of any additional taxes or penalties pursuant to Section 409A of the
Code.

(d) The Company shall notify Participants holding Awards subject to any
adjustments pursuant to this Section 15 of such adjustment, but (whether or not
notice is given) such adjustment shall be effective and binding for all purposes
of the Plan.

(e) Notwithstanding anything in this Section 15 to the contrary, an adjustment
to an Option or Stock Appreciation Right under this Section 15 shall be made in
a manner that will not result in the grant of a new Option or Stock Appreciation
Right under Section 409A of the Code.

16. Transferability

Each Award may not be sold, transferred for value, pledged, assigned, or
otherwise alienated or hypothecated by a Participant other than by will or the
laws of descent and distribution, and each Option or Stock Appreciation Right
shall be exercisable only by the Participant during his or her lifetime.
Notwithstanding the foregoing, outstanding Options may be exercised following
the Participant’s death by the Participant’s beneficiaries or as permitted by
the Committee.

17. Compliance with Laws and Regulations

This Plan, the grant, issuance, vesting, exercise and settlement of Awards
thereunder, and the obligation of the Company to sell, issue or deliver shares
of Common Stock under such Awards, shall be subject to all applicable foreign,
federal, state and local laws, rules and regulations, stock exchange rules and
regulations, and to such approvals by any governmental or regulatory agency as
may be required. The Company shall not be required to register in a
Participant’s name or deliver Common Stock prior to the completion of any
registration or qualification of such shares under any foreign, federal, state
or local law or any ruling or regulation of any government body which the
Committee shall determine to be necessary or advisable. To the extent the
Company is unable to or the Committee deems it infeasible to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any shares
of Common Stock hereunder, the Company and its Subsidiaries shall be relieved of
any liability with respect to the failure to issue or sell such shares of Common
Stock as to which such requisite authority shall not have been obtained. No
Option shall be exercisable and no Common Stock shall be issued and/or
transferable under any other Award unless a registration statement with respect
to the Common Stock underlying such Option is effective and current or the
Company has determined that such registration is unnecessary.

In the event an Award is granted to or held by a Participant who is employed or
providing services outside the United States, the Committee may, in its sole
discretion, modify the provisions of the Plan or of such Award as they pertain
to such individual to comply with applicable foreign law or to recognize
differences in local law, currency or tax policy. The Committee may also impose
conditions on the grant, issuance, exercise, vesting, settlement or retention of
Awards in order to comply with such foreign law and/or to minimize the Company’s
obligations with respect to tax equalization for Participants employed outside
their home country.

18. Withholding

To the extent required by applicable federal, state, local or foreign law, the
Committee may and/or a Participant shall make arrangements satisfactory to the
Company for the satisfaction of any minimum statutory withholding tax
obligations that arise with respect to any Award, or the issuance or sale of any
shares of Common Stock. The Company shall not be required to recognize any
Participant rights under an Award, to issue shares of Common Stock or to
recognize the disposition of such shares of Common Stock until such obligations
are satisfied. To the extent permitted or required by the Committee, these
obligations may or shall be satisfied by the Company withholding cash from any
compensation otherwise payable to or for the benefit of a Participant, the
Company withholding a portion of the shares of Common Stock that otherwise would
be issued to a Participant under such Award or any other

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award held by the Participant or by the Participant tendering to the Company
cash or shares of Common Stock. For the avoidance of doubt, the Company may only
withhold a portion of the shares of Common Stock to satisfy any minimum
statutory withholding tax obligations that arise with respect to any Award, or
the issuance or sale of any shares of Common Stock.

19. Amendment of the Plan or Awards

The Board may amend, alter or discontinue this Plan and the Committee may amend,
or alter any agreement or other document evidencing an Award made under this
Plan but, except as provided pursuant to the provisions of Section 15, no such
amendment shall, without the approval of the shareholders of the Company:

 

(a)

increase the maximum number of shares of Common Stock for which Awards may be
granted under this Plan;

 

(b)

reduce the price at which Options may be granted below the price provided for in
Section 8(a);

 

(c)

reprice outstanding Options or SARs as described in 8(b) and 9(b);

 

(d)

extend the term of this Plan;

 

(e)

change the class of persons eligible to be Participants;

 

(f)

increase the individual maximum limits in Section 5(c); or

 

(g)

otherwise amend the Plan in any manner requiring shareholder approval by law or
the rules of any stock exchange or market or quotation system on which the
Common Stock is traded, listed or quoted.

No amendment or alteration to the Plan or an Award or Award Agreement shall be
made which would impair the rights of the holder of an Award, without such
holder’s consent, provided that no such consent shall be required if the
Committee determines in its sole discretion and prior to the date of any Change
in Control that such amendment or alteration either (i) is required or advisable
in order for the Company, the Plan or the Award to satisfy any law or regulation
or to meet the requirements of or avoid adverse financial accounting
consequences under any accounting standard, or (ii) is not reasonably likely to
significantly diminish the benefits provided under such Award, or that any such
diminishment has been adequately compensated.

20. No Liability of Company

The Company, any Subsidiary or Affiliate which is in existence or hereafter
comes into existence, the Board and the Committee shall not be liable to a
Participant or any other person as to: (a) the non-issuance or sale of shares of
Common Stock as to which the Company has been unable to obtain from any
regulatory body having jurisdiction the authority deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any shares of Common
Stock hereunder; and (b) any tax consequence expected, but not realized, by any
Participant or other person due to the receipt, exercise or settlement of any
Award granted hereunder.

21. Non-Exclusivity of Plan

Neither the adoption of this Plan by the Board nor the submission of this Plan
to the shareholders of the Company for approval shall be construed as creating
any limitations on the power of the Board or the Committee to adopt such other
incentive arrangements as either may deem desirable, including without
limitation, the granting of restricted stock, stock units, stock appreciation
rights or stock options otherwise than under this Plan or an arrangement not
intended to qualify under Code Section 162(m), and such arrangements may be
either generally applicable or applicable only in specific cases.

22. Governing Law

This Plan and any agreements or other documents hereunder shall be interpreted
and construed in accordance with the laws of the State of Delaware and
applicable federal law. Any reference in this Plan or in the agreement or other
document evidencing any Awards to a provision of law or to a rule or regulation
shall be deemed to include any successor law, rule or regulation of similar
effect or applicability.

23. No Right to Employment, Reelection or Continued Service

Nothing in this Plan or an Award Agreement shall interfere with or limit in any
way the right of the Company, its Subsidiaries and/or its Affiliates to
terminate any Participant’s employment, service on the Board or service for the
Company at any time or for any reason not prohibited by law, nor shall this Plan
or an Award itself confer upon any Participant any right to continue his or her
employment or service for any specified period of time. Neither an Award nor any
benefits arising under this Plan shall constitute an employment contract with
the Company, any Subsidiary and/or its Affiliates. Subject to Sections 4 and 19,
this Plan and the benefits hereunder may be terminated at any time in the sole
and exclusive discretion of the Board without giving rise to any liability on
the part of the Company, its Subsidiaries and/or its Affiliates.

24. Forfeiture Upon Termination of Employment

Except as otherwise provided by the Committee in the Award Agreement, Awards may
be forfeited if the Participant terminates his or her employment with the
Company, a Subsidiary or an Affiliate for any reason.

 

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25. Specified Employee Delay

To the extent any payment under this Plan is considered deferred compensation
subject to the restrictions contained in Section 409A of the Code, and to the
extent necessary to avoid the imposition of taxes under Section 409A of the
Code, such payment may not be made to a specified employee (as determined in
accordance with a uniform policy adopted by the Company with respect to all
arrangements subject to Section 409A of the Code) upon Separation from Service
before the date that is six months after the specified employee’s Separation
from Service (or, if earlier, the specified employee’s death). Any payment that
would otherwise be made during this period of delay shall be accumulated and
paid on the sixth month plus one day following the specified employee’s
Separation from Service (or, if earlier, as soon as administratively practicable
after the specified employee’s death).

26. No Liability of Committee Members

No member of the Committee shall be personally liable by reason of any contract
or other instrument executed by such member or on his behalf in his capacity as
a member of the Committee nor for any mistake of judgment made in good faith,
and the Company shall indemnify and hold harmless each member of the Committee
and each other employee, officer or director of the Company to whom any duty or
power relating to the administration or interpretation of the Plan may be
allocated or delegated, against any cost or expense (including counsel fees) or
liability (including any sum paid in settlement of a claim) arising out of any
act or omission to act in connection with the Plan unless arising out of such
person’s own fraud or willful bad faith; provided, however, that approval of the
Board shall be required for the payment of any amount in settlement of a claim
against any such person. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company’s Articles of Incorporation or By-laws, as a matter
of law, or otherwise, or any power that the Company may have to indemnify them
or hold them harmless.

27. Severability

If any provision of the Plan or any Award is or becomes or is deemed to be
invalid, illegal, or unenforceable in any jurisdiction or as to any Person or
Award, or would disqualify the Plan or any Award under any law deemed applicable
by the Committee, such provision shall be construed or deemed amended to conform
to the applicable laws, or if it cannot be construed or deemed amended without,
in the determination of the Committee, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction,
Person or Award and the remainder of the Plan and any such Award shall remain in
full force and effect.

28. Unfunded Plan

The Plan is intended to be an unfunded plan. Participants are and shall at all
times be general creditors of the Company with respect to their Awards. If the
Committee or the Company chooses to set aside funds in a trust or otherwise for
the payment of Awards under the Plan, such funds shall at all times be subject
to the claims of the creditors of the Company in the event of its bankruptcy or
insolvency.

29. Recoupment Policy

As applicable, all Awards, including any shares of Common Stock subject to an
Award, are subject to any recovery, recoupment, clawback and/or other forfeiture
policy maintained by the Company from time to time and, in accordance with such
policy, may be subject to the requirement that such Awards, including any shares
of Common Stock subject to such Awards, be repaid to the Company after they have
been paid. To the extent any policy adopted by the New York Stock Exchange (or
any other exchange on which the securities of the Company are listed) pursuant
to Section 10D of the Securities Exchange Act of 1934 requires the repayment of
incentive-based compensation received by a Participant, whether paid pursuant to
an Award granted under this Plan or any other plan of incentive-based
compensation maintained in the past or adopted in the future by the Company, by
accepting an Award under this Plan, the Participant agrees to the repayment of
such amounts to the extent required by such policy and applicable law.