Exhibit 10.1

SECOND AMENDED AND RESTATED WEIGHT WATCHERS INTERNATIONAL, INC.

2014 STOCK INCENTIVE PLAN

 

1. Purpose of the Plan

The purpose of the Plan is to aid the Company and its Affiliates in recruiting
and retaining employees, directors, advisors and consultants and to motivate
such employees, directors, advisors and consultants to exert their best efforts
on behalf of the Company and its Affiliates by providing incentives through the
granting of Awards. The Company expects that it will benefit from the added
interest which such employees, directors, advisors and consultants will have in
the welfare of the Company and its Affiliates as a result of their proprietary
interest in the Company’s success.

 

2. Definitions

The following capitalized terms used in the Plan have the respective meanings
set forth in this Section:

 

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

 

(b) “Affiliate” means any entity that is consolidated with the Company for
financial reporting purposes or any other entity designated by the Board in
which the Company or an Affiliate has a direct or indirect equity interest of at
least 20%, measured by reference to vote or value.

 

(c) “Award” means an Option, Stock Appreciation Right, Restricted Stock or Other
Stock-Based Award (including, without limitation, Restricted Stock Units), or a
Cash Award (as defined under Section 9(c) of this Plan), granted pursuant to the
Plan.

 

(d) “Beneficial Owner” means “Beneficial Owner” as defined under Rule 13d-3 of
the Act.

 

(e) “Board” means the Board of Directors of the Company.

 

(f) “Cash Award” means a “Cash Award” as defined in Section 9(c).

 

(g) “Change in Control” means the occurrence of any of the following events:

(i) any “Person” or “Group”, in each case within the meaning of Section 13(d)(3)
or 14(d)(2) of the Act (other than the Company or any company owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company) becomes the “Beneficial
Owner” of 25% or more of the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the election of
directors; excluding, however, any circumstance in which such beneficial
ownership resulted from any acquisition by an employee benefit plan (or related
trust) sponsored or maintained by the Company or by any corporation controlling,
controlled by, or under common control with, the Company;

(ii) a change in the composition of the Board since the Effective Date, such
that the individuals who, as of such date, constituted the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of such Board;
provided, that any individual who becomes a director of the Company subsequent
to the Effective Date whose election, or nomination for election by the
Company’s shareholders, was approved by the vote of at least a majority of the
directors then comprising the Incumbent Board shall be deemed a member of the
Incumbent Board;

(iii) a reorganization, recapitalization, merger or consolidation (a “Corporate
Transaction”) involving the Company, unless securities representing 51% or more
of the combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors of the Company or the corporation
resulting from such Corporate Transaction (or the parent of such corporation)
are held subsequent to such transaction by the person or persons who were the
Beneficial Owners of the outstanding voting securities entitled to vote
generally in the election of directors of the Company immediately prior to such
Corporate Transaction, in substantially the same proportions as their ownership
immediately prior to such Corporate Transaction; or

 

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(iv) the sale, transfer or other disposition of all or substantially all of the
assets of the Company or the liquidation or dissolution of the Company;

if and only if, as a result of any of the foregoing events set forth in clause
(i) or (iii), any Person or Group, other than Artal or any of its affiliates, is
or becomes the Beneficial Owner, directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power of its then
outstanding securities entitled to vote in the election of members of the Board.
For purposes of this definition, “Artal” means Artal Holdings Sp. z o.o.

 

(h) “Code” means the Internal Revenue Code of 1986, as amended, or any successor
thereto.

 

(i) “Committee” means the Compensation and Benefits Committee of the Board, or
such other committee of the Board (including, without limitation, the full
Board) to which the Board has delegated power to act under or pursuant to the
Provisions of the Plan. Unless otherwise determined by the Board, the Committee
shall consist of no less than two directors, all of whom shall be intended to
qualify as “outside directors” within the meaning of Section 162(m) of the Code
(or any successor section thereto) and as “non-employee directors” within the
meaning of Rule 16b-3 under the Act.

 

(j) “Company” means Weight Watchers International, Inc., a Virginia corporation.

 

(k) “Effective Date” means the date the Board originally approved the Plan
(prior to any amendment and restatement thereof).

 

(l) “Employment” means (i) a Participant’s employment if the Participant is an
employee of the Company or any of its Affiliates, (ii) a Participant’s services
as a consultant, if the Participant is a consultant to the Company or any of its
Affiliates and (iii) a Participant’s services as a non-employee director, if the
Participant is a non-employee member of the Board or the board of directors of
an Affiliate; provided, however, that unless otherwise determined by the
Committee, a change in a Participant’s status from employee to non-employee
(other than a director of the Company or an Affiliate) shall constitute a
termination of employment for purposes of the Plan.

 

(m) “Fair Market Value” means, on a given date, unless otherwise expressly
determined by the Committee on or prior to such date, (i) if there should be a
public market for the Shares on such date, the closing sales price of the Shares
on the New York Stock Exchange (or such other national securities exchange on
which the Shares are traded) on such date, or, (ii) if no sale of Shares shall
have been reported on the New York Stock Exchange (or such other national
securities exchange on which the Shares are traded) on such date, then the
closing sales price of the Shares on the New York Stock Exchange (or such other
national securities exchange on which the Shares are traded) on the most recent
preceding date on which sales of the Shares have been so reported or quoted, or
(iii) if there should not be a public market for the Shares on such date, the
Fair Market Value shall be the value established by the Committee in good faith.

 

(n) “ISO” means an Option that is also an “incentive stock option” within the
meaning of Section 422 of the Code granted pursuant to Section 6(d).

 

(o) “Other Stock-Based Awards” means “Other Stock-Based Awards” as defined in
Section 9(a).

 

(p) “Option” means a stock option granted pursuant to Section 6.

 

(q) “Option Price” means the purchase price per Share of an Option, as
determined pursuant to Section 6(a).

 

(r) “Participant” means an employee, director, advisor or consultant of the
Company or an Affiliate who is selected by the Committee to participate in the
Plan.

 

(s) “Performance-Based Awards” means certain Other Stock-Based Awards granted
pursuant to Section 9(b).

 

(t) “Plan” means the Weight Watchers International, Inc. 2014 Stock Incentive
Plan, as amended from time to time.

 

(u) “Restricted Stock” means any Share granted pursuant to Section 8.

 

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(v) “Restricted Stock Unit” means an Other Stock-Based Award representing a
contractual right to receive a Share, as described under Section 8(e).

 

(w) “Shares” means shares of Common Stock of the Company, no par value per
share.

 

(x) “Stock Appreciation Right” means a stock appreciation right as defined in
Section 7(b).

 

(y) “Subsidiary” means a subsidiary corporation, as defined in Section 424(f) of
the Code (or any successor section thereto), of the Company.

 

3. Shares Subject to the Plan

 

  (a) The total number of Shares that may be issued under the Plan is 8.5
million, all of which may be granted as ISOs. The maximum number of Shares
subject to Options or Stock Appreciation Rights which may be granted during a
calendar year to any Participant shall be 875,000. The maximum amount of
Performance-Based Awards that may be granted during a calendar year to any
Participant shall be: (x) with respect to Performance-Based Awards that are
denominated or payable in Shares, 584,000 Shares and (y) with respect to
Performance-Based Awards that are not denominated or payable in Shares, $5
million. The maximum number of shares of Common Stock subject to Awards granted
during a calendar year to any non-employee director, taken together with any
cash fees paid to such non-employee director during the calendar year, shall not
exceed $600,000 in total value (calculating the value of any such Awards based
on the grant date fair value of such Awards for financial reporting purposes and
excluding, for this purpose, the value of any dividend equivalent payments paid
pursuant to any Award granted in a previous calendar year).

 

  (b) The Shares may consist, in whole or in part, of unissued Shares or Shares
that the Company has reacquired, bought on the market or otherwise. The issuance
of Shares or the payment of cash upon the exercise of an Award or in
consideration of the cancellation or termination of an Award shall reduce the
total number of Shares available under the Plan, as applicable. Shares subject
to Awards (or portions thereof) that terminate or lapse without the payment of
consideration may be granted again under the Plan. Additionally, Shares withheld
by the Company to satisfy any tax withholding obligation may be granted again
under the Plan.

 

4. Administration

 

  (a) The Plan shall be administered by the Committee, which may delegate its
duties and powers in whole or in part to any subcommittee thereof consisting
solely of at least two individuals who are intended to qualify as “non-employee
directors” within the meaning of Rule 16b-3 under the Act (or any successor rule
thereto) and, to the extent required by Section 162(m) of the Code (or any
successor section thereto), “outside directors” within the meaning thereof. In
addition, to the extent permitted under applicable law and the applicable rules
of any listing exchange, the Committee may delegate the authority to grant
Awards under the Plan to any employee or group of employees of the Company or an
Affiliate; provided, that such grants are consistent with guidelines established
by the Committee from time to time and the Plan. Notwithstanding the foregoing,
the Board may, in its sole discretion, take any action delegated to the
Committee under the Plan that it deems necessary or desirable for the
administration of the Plan.

 

  (b) The Committee shall have the full power and authority to make, and
establish the terms and conditions of, any Award to any person eligible to be a
Participant, consistent with the provisions of the Plan, and to waive any such
terms and conditions at any time (including, without limitation, accelerating or
waiving any vesting or forfeiture conditions with respect to outstanding
Awards). Awards may, in the discretion of the Committee, be made under the Plan
in assumption of, or in substitution for, outstanding awards previously granted
by the Company or its Affiliates, or a company acquired by the Company or with
which the Company combines. The number of Shares underlying such substitute
awards shall be counted against the aggregate number of Shares available for
Awards under the Plan.

 

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  (c) The Committee is authorized to interpret the Plan, to establish, amend and
rescind any rules and regulations relating to the Plan, and to make any other
determinations that it deems necessary or desirable for the administration of
the Plan, and may delegate such authority, as it deems appropriate. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in the Plan in the manner and to the extent the Committee deems
necessary or desirable. Any decision of the Committee in the interpretation and
administration of the Plan, as described herein, shall lie within its sole and
absolute discretion and shall be final, conclusive and binding on all parties
concerned (including, but not limited to, Participants and their beneficiaries
or successors).

 

  (d) The Committee shall require payment of any amount it may determine to be
necessary to withhold for federal, state, local or other taxes as a result of
the exercise, grant or vesting of an Award. Unless the Committee specifies
otherwise, a Participant may elect to pay a portion or all of such withholding
taxes by any of the following means (or by a combination of such means):
(i) delivering owned and unencumbered Shares to the Company (subject to any
requirements the Committee may impose); (ii) having Shares withheld by the
Company with a Fair Market Value equal to the minimum statutory withholding rate
from any Shares that would have otherwise been received by the Participant; or
(iii) tendering a cash payment to the Company.

 

5. Limitations

 

  (a) No Award may be granted under the Plan after the tenth anniversary of the
Effective Date; however, Awards granted prior to such tenth anniversary may
extend beyond such tenth anniversary.

 

  (b) Except as otherwise permitted under Section 10 and Section 24, neither the
Option Price of an Option nor the exercise price of any Stock Appreciation
Right, once granted hereunder, may be repriced without prior approval of the
Company’s shareholders. For this purpose, a “repricing” means any of the
following (or any other action that has the same effect as any of the
following): (i) changing the terms of an Option to lower the Option Price or the
terms of a Stock Appreciation Right to lower the exercise price; (ii) any other
action that is treated as a “repricing” under U.S. generally accepted accounting
principles; and (iii) repurchasing for cash or cancelling an Option in exchange
for another Award at a time when the Option Price is greater than the Fair
Market Value of the underlying Shares, unless the cancellation and exchange
occurs in connection with a change in capitalization or similar change permitted
under Section 10.

 

  (c) If any payments or benefits that the Company would otherwise be required
to provide under this Plan cannot be provided in the manner contemplated herein
or under the applicable plan without subjecting a Participant to income tax
under Code Section 409A, the Company shall provide such intended payments or
benefits to such Participant in an alternative manner that conveys an equivalent
economic benefit to that Participant (without materially increasing the
aggregate cost to the Company).

 

6. Terms and Conditions of Options

Options granted under the Plan shall be, as determined by the Committee,
non-qualified or ISOs for federal income tax purposes, as evidenced by the
related Award agreements, and shall be subject to the foregoing and the
following terms and conditions, and to such other terms and conditions, not
inconsistent therewith, as the Committee shall determine:

 

  (a) Option Price. The Option Price shall be determined by the Committee, but
shall not be less than 100% of the Fair Market Value of a Share on the date an
Option is granted.

 

  (b) Exercisability. Options granted under the Plan shall be exercisable at
such time(s) and upon such terms and conditions as may be determined by the
Committee, but in no event shall an Option be exercisable more than ten years
after the date it is granted, except as may be provided pursuant to Section 15.

 

  (c)

Exercise of Options. Except as otherwise provided in the Plan or in an Award
agreement, an Option may be exercised for all, or from time to time any part, of
the Shares for which it is then exercisable.

 

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  For purposes of this Section 6, the exercise date of an Option shall be the
date a notice of exercise is received by the Company from the Participant,
together with provision for payment of the aggregate Option Price in accordance
with this Section 6(c) and the satisfaction of any applicable tax withholdings.
The aggregate Option Price for the Shares as to which an Option is exercised
shall be paid to the Company, as designated by the Committee, pursuant to one or
more of the following methods: (i) in cash or its equivalent (e.g., by check or
wire transfer); (ii) in Shares having a Fair Market Value equal to the aggregate
Option Price for the Shares being purchased and satisfying such other
requirements as may be imposed by the Committee; (iii) partly in cash and partly
in such Shares; (iv) if there is a public market for the Shares at such time,
through the delivery of irrevocable instructions to a broker to sell Shares
obtained upon the exercise of the Option and to deliver promptly to the Company
an amount out of the proceeds of such sale equal to the aggregate Option Price
for the Shares being purchased, in each case in accordance with applicable laws;
or (v) to the extent permitted by the Committee, through “net settlement” in
Shares. No Participant shall have any rights to dividends or other rights of a
shareholder with respect to Shares subject to an Option until the Participant
has given written notice of exercise of the Option, paid in full the aggregate
Option Price for such Shares (and satisfied any tax withholding requirements)
and, if applicable, has satisfied any other conditions imposed by the Committee
pursuant to the Plan.

 

  (d) ISOs. The Committee may grant Options under the Plan that are intended to
be ISOs. Such ISOs shall comply with the requirements of Section 422 of the Code
(or any successor section thereto). No ISO may be granted to any Participant who
(i) is not an employee of the Company or any of its Subsidiaries or (ii) at the
time of such grant, owns more than 10% of the total combined voting power of all
classes of stock of the Company or of any Subsidiary, unless (i) the Option
Price for such ISO is at least 110% of the Fair Market Value of a Share on the
date the ISO is granted and (ii) the date on which such ISO terminates is a date
not later than the day preceding the tenth anniversary of the date on which the
ISO is granted. Any Participant who disposes of Shares acquired upon the
exercise of an ISO either (i) within two years after the date of grant of such
ISO or (ii) within one year after the transfer of such Shares to the Participant
shall notify the Company of such disposition and of the amount realized upon
such disposition, and the Company and the Participant shall cooperate to ensure
all applicable withholding and other taxes are paid. All Options granted under
the Plan are intended to be nonqualified stock options, unless the applicable
Award agreement expressly states that the Option is intended to be an ISO. If an
Option is intended to be an ISO, and if for any reason such Option (or portion
thereof) shall not qualify as an ISO, then, to the extent of such
nonqualification, such Option (or portion thereof) shall be regarded as a
nonqualified stock option granted under the Plan; provided, that such Option (or
portion thereof) otherwise complies with the Plan’s requirements relating to
nonqualified stock options. In no event shall any member of the Committee, the
Company or any of its Affiliates (or their respective employees, officers or
directors) have any liability to any Participant (or any other person or entity)
due to the failure of an Option to qualify for any reason as an ISO.

 

  (e) Attestation. Wherever in this Plan or any agreement evidencing an Award a
Participant is permitted to pay an Option Price or taxes relating to the
exercise of an Option by delivering Shares, the Participant may, subject to
procedures satisfactory to the Committee, satisfy such delivery requirement by
presenting proof of Beneficial Ownership of such Shares, in which case the
Company shall treat the Option as exercised without further payment and/or shall
withhold such number of Shares from the Shares acquired by the exercise of the
Option, as appropriate.

 

7. Terms and Conditions of Stock Appreciation Rights

 

  (a)

Grants. The Committee may grant (i) a Stock Appreciation Right (as defined in
clause (b) below) independent of an Option or (ii) a Stock Appreciation Right in
connection with an Option, or a portion thereof. A Stock Appreciation Right
granted pursuant to clause (ii) of the preceding sentence (A) may be granted at
the time the related Option is granted or at any time prior to the exercise or
cancellation of the related Option, (B) shall cover the same number of Shares
covered by an Option (or such lesser

 

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  number of Shares as the Committee may determine) and (C) shall be subject to
the same terms and conditions as such Option except for such additional
limitations as are contemplated by this Section 7 (or such additional
limitations as may be included in an Award agreement).

 

  (b) Terms. The exercise price per Share of a Stock Appreciation Right shall be
an amount determined by the Committee but in no event shall such amount be less
than the Fair Market Value of a Share on the date the Stock Appreciation Right
is granted; provided, however, that notwithstanding the foregoing, in the case
of a Stock Appreciation Right granted in conjunction with an Option, or a
portion thereof, the exercise price may not be less than the Option Price of the
related Option. A “Stock Appreciation Right” granted independently of an Option
shall entitle a Participant upon exercise to an amount equal to (i) the excess
of (A) the Fair Market Value on the exercise date of one Share over (B) the
exercise price per Share of the Stock Appreciation Right, multiplied by (ii) the
number of Shares covered by the Stock Appreciation Right. A “Stock Appreciation
Right” granted in conjunction with an Option, or a portion thereof, shall
entitle a Participant to surrender to the Company the unexercised (but
exercisable) Option, or any portion thereof, and to receive from the Company in
exchange therefor an amount equal to (i) the excess of (A) the Fair Market Value
on the exercise date of one Share over (B) the Option Price, multiplied by
(ii) the number of Shares covered by the related Option, or portion thereof,
which is surrendered. Payment of any exercised Stock Appreciation Rights shall
be made in Shares or in cash, or partly in Shares and partly in cash (any such
Shares valued at such Fair Market Value), all as shall be determined by the
Committee. Stock Appreciation Rights may be exercised from time to time upon
actual receipt by the Company of written notice of exercise stating the number
of Shares with respect to which the Stock Appreciation Right is being exercised.
Unless otherwise provided pursuant to a form of exercise in accordance with
procedures approved by the Committee or its designees, the date a notice of
exercise is received by the Company shall be the exercise date. No fractional
Shares will be issued in payment for Stock Appreciation Rights, but instead cash
will be paid for a fraction or, if the Committee should so determine, the number
of Shares will be rounded downward to the next whole Share.

 

  (c) Limitations. The Committee may impose, in its discretion, such conditions
upon the exercisability or transferability of Stock Appreciation Rights as it
may deem appropriate.

 

8. Terms and Conditions of Restricted Stock and Restricted Stock Units

 

  (a) Grants. Subject to the provisions of the Plan, the Committee shall
determine the number of Shares to be granted to each Participant, the duration
of the period during which any restrictions may remain imposed on such Shares,
and the conditions, if any, under which, this “Restricted Stock” may be
forfeited to the Company, and any other terms and conditions of such Restricted
Stock as the Committee may determine in its sole discretion.

 

  (b) Transfer Restrictions. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered, except as provided in
the Plan or the applicable Award agreement. Certificates issued in respect of
Shares of Restricted Stock shall be registered in the name of the Participant
and deposited by such Participant, together with a stock power endorsed in
blank, with the Company. After the lapse of the restrictions applicable to such
Shares of Restricted Stock, the Company shall deliver such certificates to the
Participant or the Participant’s legal representative.

 

  (c) Dividends. Dividends paid on any Shares of Restricted Stock may be paid
directly to the Participant, withheld by the Company subject to the vesting of
the Restricted Stock pursuant to the terms of the applicable Award agreement, or
may be reinvested in additional Shares of Restricted Stock, as determined by the
Committee in its sole discretion.

 

  (d)

Performance-Based Grants. Notwithstanding anything to the contrary herein,
certain Shares of Restricted Stock or Restricted Stock Units granted under this
Section 8 may, at the discretion of the Committee, be granted in a manner which
is intended to be deductible by the Company under Section 162(m) of the Code (or
any successor section thereto). The restrictions applicable to such

 

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  Awards shall lapse based wholly or partially on the attainment of written
performance goals approved by the Committee for a performance period established
by the Committee (i) while the outcome for that performance period is
substantially uncertain and (ii) no more than 90 days after the commencement of
the performance period to which the performance goal relates or, if less, the
number of days which is equal to 25% of the relevant performance period. The
performance goals, which must be objective, shall be based upon one or more of
the criteria set forth in Section 9(b). The Committee shall determine in its
discretion whether, with respect to a performance period, the applicable
performance goals have been met with respect to a given Participant and, if they
have, shall so certify prior to the release of the restrictions on the Shares.

 

  (e) Restricted Stock Units. Awards of Restricted Stock Units may also be
granted hereunder, such that the underlying Shares shall be credited to a
bookkeeping account with the Company, with actual Shares not to be issued unless
and until such Restricted Stock Unit has become vested and the underlying Shares
are deliverable pursuant to the terms of such Award. The applicable Award
agreement shall set forth the vesting and delivery restrictions and other terms
and conditions governing the Award. At the discretion of the Committee, the
Award agreement may provide that each Restricted Stock Unit (representing one
Share) may be credited with cash and stock dividends paid by the Company in
respect of one Share (“Dividend Equivalents”). In such case, the Award agreement
may provide that Dividend Equivalents may be (i) currently paid to the
Participant, (ii) credited to the Participant’s bookkeeping Restricted Stock
Unit account, and interest may be credited on the amount of cash Dividend
Equivalents so credited (at a rate and subject to such terms as determined by
the Committee), or (iii) credited to the Participant’s bookkeeping Restricted
Stock Unit account without interest. Dividend Equivalents credited to a
Participant’s account and attributable to any particular Restricted Stock Unit
(and earnings thereon, if applicable) shall be distributed to the Participant
upon settlement of such Restricted Stock Unit and, if such Restricted Stock Unit
is forfeited, the Participant shall have no right to such Dividends Equivalents.
Restricted Stock Units and the Shares underlying such Restricted Stock Units
shall be subject to all applicable provisions of the Plan, including, without
limitation, provisions relating to the adjustment of Awards for splits, mergers,
or other corporate transactions.

 

9. Other Awards

 

  (a) Generally. The Committee, in its sole discretion, may grant or sell Awards
of Shares and awards that are valued in whole or in part by reference to, or are
otherwise based on the Fair Market Value of, Shares (“Other Stock-Based
Awards”). Such Other Stock-Based Awards shall be in such form, and dependent on
such conditions, as the Committee shall determine, including, without
limitation, the right to receive, or vest with respect to, one or more Shares
(or the equivalent cash value of such Shares) upon the completion of a specified
period of service, the occurrence of an event and/or the attainment of
performance objectives. Other Stock-Based Awards may also include Dividend
Equivalent rights. Other Stock-Based Awards may be granted alone or in addition
to any other Awards granted under the Plan. Subject to the provisions of the
Plan, the Committee shall determine the number of Shares to be awarded to a
Participant under (or otherwise related to) such Other Stock-Based Awards;
whether such Other Stock-Based Awards shall be settled in cash, Shares or a
combination of cash and Shares; and all other terms and conditions of such
Awards (including, without limitation, the vesting provisions thereof and
provisions ensuring that all Shares so awarded and issued shall be fully paid
and non-assessable).

 

  (b)

Performance-Based Awards. Notwithstanding anything to the contrary herein,
certain Other Stock-Based Awards granted under this Section 9 may be granted in
a manner which is intended to be deductible by the Company under Section 162(m)
of the Code (or any successor section thereto) (“Performance-Based Awards”). A
Participant’s Performance-Based Award shall be determined based on the
attainment of written performance goals approved by the Committee for a
performance period established by the Committee (i) while the outcome for that
performance period is substantially

 

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  uncertain and (ii) no more than 90 days after the commencement of the
performance period to which the performance goal relates or, if less, the number
of days which is equal to 25% of the relevant performance period. The
performance goals, which must be objective, shall be based upon one or more of
the following criteria: (i) consolidated earnings before or after taxes
(including earnings before interest, taxes, depreciation and amortization);
(ii) net income; (iii) operating income; (iv) earnings per Share; (v) book value
per Share; (vi) return on shareholders’ equity; (vii) expense management;
(viii) return on investment; (ix) improvements in capital structure;
(x) profitability or revenue of an identifiable business unit or product;
(xi) maintenance or improvement of profit margins; (xii) stock price;
(xiii) market share; (xiv) revenues or sales; (xv) costs; (xvi) cash flow;
(xvii) working capital; (xviii) return on assets; (xix) total shareholder
return; (xx) customer satisfaction; (xxi) credit rating; (xxii) closing of
corporate transactions and (xxiii) completion or attainment of products or
projects. The foregoing criteria may relate to the Company, one or more of its
Affiliates or one or more of its or their divisions or units, or any combination
of the foregoing, and may be applied on an absolute basis and/or be relative to
one or more peer group companies or indices, or any combination thereof, all as
the Committee shall determine. In addition, to the degree consistent with
Section 162(m) of the Code (or any successor section thereto), the performance
goals may be calculated without regard to extraordinary items. The Committee
shall determine whether, with respect to a performance period, the applicable
performance goals have been met with respect to a given Participant and, if they
have, shall so certify and ascertain the amount of the applicable
Performance-Based Award. No Performance-Based Awards will be paid for such
performance period until such certification is made by the Committee. The amount
of the Performance-Based Award actually paid to a given Participant may be less
than the amount determined by the applicable performance goal formula, at the
discretion of the Committee. The amount of the Performance-Based Award
determined by the Committee for a performance period shall be paid to the
Participant at such time as determined by the Committee in its sole discretion
after the end of such performance period; provided, however, that a Participant
may, if and to the extent permitted by the Committee and consistent with the
provisions of Section 162(m) of the Code (or any successor section thereto),
elect to defer payment of a Performance-Based Award. Any associated dividends or
Dividend Equivalents that may be earned with respect to a Performance-Based
Award (including, without limitation, on any Awards of Restricted Stock or
Restricted Stock Units that are intended to qualify as Performance-Based Awards)
will not be paid unless and until the corresponding portion of the underlying
Award is earned.

 

  (c) Cash Awards. Notwithstanding anything to the contrary provided herein, the
Company may also make awards of cash to Participants in a manner which is
intended to allow such awards to be deductible by the Company under
Section 162(m) of the Code (or any successor section thereto) (such awards,
“Cash Awards”). Cash Awards shall be provided for pursuant to the procedures set
forth in Section 9(b) regarding the grant, determination and payment of the
Performance-Based Award. Any provision of this Plan notwithstanding, in no event
shall any Participant who is a “covered employee” within the meaning of
Section 162(m) of the Code (or any successor section thereto) receive payment of
a Cash Award under this Plan in respect of any performance period in excess of
$5 million, and the Committee shall have the right, in its absolute discretion,
to reduce or eliminate the amount of any Cash Award otherwise payable to any
Participant under this Plan based on individual performance or any other factors
that the Committee, in its discretion, shall deem appropriate.

 

10. Adjustments Upon Certain Events

In the event of any stock split, spin-off, share combination, reclassification,
recapitalization, liquidation, dissolution, reorganization, merger, Change in
Control, payment of a dividend (other than a cash dividend paid as part of a
regular dividend program) or other similar transaction or occurrence which
affects the equity securities of the Company or the value thereof, the Committee
shall (i) adjust the number and kind of shares subject to the Plan and available
for or covered by Awards, (ii) adjust the share prices related to outstanding
Awards, and/or (iii) take such other action (including, without limitation
providing for the payment of a cash amount to holders of outstanding Awards in
cancellation of any such Awards), in each case as it deems reasonably necessary
to

 

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address, on an equitable basis, the effect of the applicable corporate event on
the Plan and any outstanding Awards; provided, however, that the Committee may,
upon the consummation of the transactions constituting a Change in Control,
cancel without consideration any outstanding Option or Stock Appreciation Right
having an Option Price or exercise price, respectively, that is greater than the
per share consideration received by a holder of Common Stock in such
transaction. Any such adjustment made or action taken by the Committee in
accordance with the preceding sentence shall be final and binding upon
Participants and upon the Company.

 

11. No Right to Employment or Awards

The granting of an Award under the Plan shall impose no obligation on the
Company or any Affiliate to continue the Employment of a Participant and shall
not lessen or affect the Company’s or any Affiliate’s right to terminate the
Employment of such Participant. No Participant or other person or entity shall
have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Participants, or holders or beneficiaries of Awards.
The terms and conditions of Awards and the Committee’s determinations and
interpretations with respect thereto need not be the same with respect to each
Participant (whether or not such Participants are similarly situated).

 

12. Successors and Assigns

The Plan shall be binding on all successors and assigns of the Company and a
Participant, including without limitation, the estate of such Participant and
the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant’s creditors.

 

13. Nontransferability of Awards

Unless otherwise determined by the Committee, an Award shall not be transferable
or assignable by the Participant otherwise than by will or by the laws of
descent and distribution. In no event shall an Award be transferrable for value.
An Award exercisable after the death of a Participant may be exercised by the
legatees, personal representatives or distributees of the Participant.

 

14. Amendments or Termination

The Committee may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made (a) without the approval of the
shareholders of the Company, if such action would (except as is provided in
Section 10), increase the total number of Shares reserved for the purposes of
the Plan or increase the maximum number of Awards that may be granted to any
Participant, (b) except as is permitted under Section 10, without the consent of
a Participant, if such action would materially diminish any of the rights of the
Participant under any Award theretofore granted to such Participant under the
Plan or (c) with respect to Section 5(b) (except as is provided in Section 10),
relating to repricing of Options or Stock Appreciation Rights, to permit such
repricing; provided, however, that the Board may amend the Plan in such manner
as it deems necessary to permit the granting of Awards meeting the requirements
of the Code or other applicable laws.

 

15. International Participants

With respect to Participants who reside or work outside the United States of
America and who are not (and who are not expected to be) “covered employees”
within the meaning of Section 162(m) of the Code (or any successor section
thereto), the Committee may, in its sole discretion, amend the terms of the Plan
or Awards with respect to such Participants in order to conform such terms with
the requirements of local law or to obtain more favorable tax or other treatment
for a Participant, the Company or an Affiliate.

 

16. Section 409A of the Code.

 

  (a)

Notwithstanding any provision of the Plan to the contrary, it is intended that
the provisions of this Plan comply with Section 409A of the Code, and all
provisions of this Plan shall be construed and

 

9

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  interpreted in a manner consistent with the requirements for avoiding taxes or
penalties under Section 409A of the Code. Each Participant is solely responsible
and liable for the satisfaction of all taxes and penalties that may be imposed
on or in respect of such Participant in connection with this Plan or any other
plan maintained by the Company (including any taxes and penalties under
Section 409A of the Code), and neither the Company nor any Affiliate shall have
any obligation to indemnify or otherwise hold such Participant (or any
beneficiary) harmless from any or all of such taxes or penalties. With respect
to any Award that is considered “deferred compensation” subject to Section 409A
of the Code, references in the Plan to “termination of employment” (and
substantially similar phrases) shall mean “separation from service” within the
meaning of Section 409A of the Code. For purposes of Section 409A of the Code,
each of the payments that may be made in respect of any Award granted under the
Plan is designated as separate payments.

 

  (b) Notwithstanding anything in the Plan to the contrary, if a Participant is
a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the
Code, no payments in respect of any Awards that are “deferred compensation”
subject to Section 409A of the Code and which would otherwise be payable upon
the Participant’s “separation from service” (as defined in Section 409A of the
Code) shall be made to such Participant prior to the date that is six months
after the date of such Participant’s “separation from service” or, if earlier,
the Participant’s date of death. Following any applicable six month delay, all
such delayed payments will be paid in a single lump sum on the earliest date
permitted under Section 409A of the Code that is also a business day.

 

  (c) Unless otherwise provided by the Committee, in the event that the timing
of payments in respect of any Award (that would otherwise be considered
“deferred compensation” subject to Section 409A of the Code) would be
accelerated upon the occurrence of (i) a Change in Control, no such acceleration
shall be permitted unless the event giving rise to the Change in Control
satisfies the definition of a change in the ownership or effective control of a
corporation, or a change in the ownership of a substantial portion of the assets
of a corporation pursuant to Section 409A of the Code and any Treasury
Regulations promulgated thereunder or (ii) a disability, no such acceleration
shall be permitted unless the disability also satisfies the definition of
“disability” pursuant to Section 409A of the Code and any Treasury Regulations
promulgated thereunder.

 

17. Other Benefit Plans

All Awards shall constitute a special incentive payment to the Participant and
shall not be taken into account in computing the amount of salary or
compensation of the Participant for the purpose of determining any benefits
under any pension, retirement, profit-sharing, bonus, life insurance or other
benefit plan of the Company or under any agreement between the Company and the
Participant, unless such plan or agreement specifically provides otherwise.

 

18. Administration by the Board

In accordance with Section 4, the Board shall be authorized and shall have the
power to act on behalf and in lieu of the Committee with respect to the matters
contained in this Plan.

 

19. Choice of Law

The Plan shall be governed by and construed and interpreted in accordance with
the laws of the State of New York, and except as otherwise provided in the
pertinent Award agreement, any and all disputes between a Participant and the
Company or any Affiliate relating to an Award shall be brought only in a state
or federal court of competent jurisdiction sitting in Manhattan, New York.

 

20. Effectiveness of the Plan

The Plan shall be effective as of the Effective Date, subject to the approval of
the shareholders of the Company.

 

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21. Awards Subject to the Plan

In the event of a conflict between any term or provision contained in the Plan
and a term or provision contained in any Award agreement, the applicable terms
and provisions of the Plan will govern and prevail.

 

22. Fractional Shares

Notwithstanding other provisions of the Plan or any Award agreements thereunder,
the Company shall not be obligated to issue or deliver fractional Shares
pursuant to the Plan or any Award and the Committee shall determine whether
cash, other securities, or other property shall be paid or transferred in lieu
of any fractional Shares or whether such fractional Shares or any rights thereto
shall be cancelled, terminated or otherwise eliminated with, or without,
consideration.

 

23. Severability

If any provision of the Plan or any Award is, or becomes or is deemed to be
invalid, illegal, unenforceable in any jurisdiction or as to any Participant 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,
Participant or Award and the remainder of the Plan and any such Award shall
remain in full force and effect.

 

24. Stock Option Exchange Program

Notwithstanding any other provision of the Plan to the contrary, the Company, by
action of the Board or the Committee, as the case may be, may effect an option
exchange program (the “Option Exchange Program”), to be commenced through an
option exchange offer within 12 months of shareholder approval of this
Section 24. Under the Option Exchange Program, each Eligible Employee (as
defined below) would be offered the opportunity to exchange all (but not less
than all) of his or her Eligible Options (as defined below) (the “Surrendered
Option”) for new Options (the “New Options”) as follows:

 

  (i) each Surrendered Option held by an Eligible Employee other than the
Company’s Chief Executive Officer shall be exchanged for a New Option on a
two-for-one basis (i.e., the New Option shall cover half as many Shares as the
corresponding Surrendered Option);

 

  (ii) each Surrendered Option held by the Company’s Chief Executive Officer
shall be exchanged for a New Option on a 3.5-for-one basis (i.e., the New Option
shall cover a number of Shares equal to the quotient of the number of Shares
that had been subject to the corresponding Surrendered Option divided by 3.5);
and

 

  (iii) each New Option shall have terms including (a) an expiration date of ten
years after the grant date, (b) terms and conditions that provide for time
vesting over three years from the grant date, such that 25% of the New Options
will vest on each of the first and second anniversaries of the grant date and
the remaining 50% of the New Options will vest on the third anniversary of the
grant date and (c) an Option Price equal to the greater of (x) the closing price
per share of Common Stock on the New York Stock Exchange on the date of grant
and (y) the average closing price of a share of Common Stock on the New York
Stock Exchange for the five trading day period immediately preceding and
including the grant date.

For purposes of this Section 24, “Eligible Employee” means any current employee
of the Company and its Affiliates as of the date New Options are granted under
the Option Exchange Program who holds Eligible Options as of such date.
“Eligible Options” means any performance-vesting stock option that was granted
under any of the Company’s equity incentive compensation plans during the period
from December 12, 2013 to March 11, 2015 at exercise prices ranging from $9.82
to $32.65 that has an option exercise price that is greater than the Fair Market
Value of a Share of Common Stock on the grant date of the New Options. Subject
to the foregoing, the Board or the Committee, as the case may be, shall be
permitted to determine additional terms, restrictions or requirements relating
to the Option Exchange Program.

 

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