EX-10.01






Exhibit 10.01









Scripps Networks Interactive, Inc.

Executive Change in Control Plan





 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	 	 	 
	 	 	 	 
	ARTICLE 1.
	 	INTRODUCTION

	 	 	1	 
	 	 	 
	 	 	 	 
	ARTICLE 2.
	 	DEFINITIONS

	 	 	1	 
	 	 	 
	 	 	 	 
	ARTICLE 3.
	 	PLAN PARTICIPATION

	 	 	4	 
	 	 	 
	 	 	 	 
	ARTICLE 4.
	 	ACCELERATION OF VESTING OF EQUITY AWARDS UPON CHANGE IN CONTROL

	 	 	4	 
	 	 	 
	 	 	 	 
	ARTICLE 5.
	 	TERMINATION PAYMENT AND OTHER BENEFITS UPON CERTAIN TERMINATIONS 

OF EMPLOYMENT AFTER CHANGE IN CONTROL

	 	 	5	 
	 	 	 
	 	 	 	 
	ARTICLE 6.
	 	NON-DUPLICATION OF PAYMENTS AND BENEFITS

	 	 	8	 
	 	 	 
	 	 	 	 
	ARTICLE 7.
	 	SOURCE OF PAYMENTS

	 	 	9	 
	 	 	 
	 	 	 	 
	ARTICLE 8.
	 	PLAN ADMINISTRATION AND CLAIMS PROCEDURE

	 	 	9	 
	 	 	 
	 	 	 	 
	ARTICLE 9.
	 	ARBITRATION OF DISPUTES

	 	 	10	 
	 	 	 
	 	 	 	 
	ARTICLE 10.
	 	MISCELLANEOUS PROVISIONS

	 	 	10	 






 




 





 









 









			
	ARTICLE 1.	 	INTRODUCTION





Scripps Networks Interactive, Inc., an Ohio corporation (“Company”), adopted the Scripps Networks
Interactive, Inc. Executive Change in Control Plan (“Plan”), effective immediately prior to the
Distribution Date as defined in the Employee Matters Agreement by and between The E. W. Scripps
Company and the Company (the “Effective Date”).



The Plan generally provides for certain potential termination payments and other benefits for
covered executives if their employment terminates under prescribed circumstances after a change in
control, all as specifically described in the following provisions of the Plan. The Company
believes that it will derive substantial benefits by adopting the Plan because its existence will:




	 	•	 	Allow covered executives to focus on the Company’s business and objectively
evaluate any future proposals during potential change in control transactions,
	 
	 	•	 	Assist the Company in attracting and retaining selected executives,
	 
	 	•	 	Provide for greater consistency of protection for selected executives, and
	 
	 	•	 	Avoid problems associated with adopting change in control agreements during any
future potential change in control transaction.






			
	ARTICLE 2.	 	DEFINITIONS






	2.1	 	“Board” means the board of directors of the Company.
	 
	2.2	 	“Cause” means:






	 	(a)	 	Commission of a felony or an act or series of acts that results in material
injury to the business or reputation of the Company or any subsidiary;
	 
	 	(b)	 	Willful failure to perform duties of employment, if such failure has not been
cured in all material respects within twenty (20) days after the Company or any
subsidiary, as applicable, gives notice thereof; or
	 
	 	(c)	 	Breach of any material term, provision or condition of employment, which breach
has not been cured in all material respects within twenty (20) days after the Company
or any subsidiary, as applicable, gives notice thereof.






	2.3	 	“Change in Control” means the occurrence, after the Distribution Date, of any of the
following with respect to the Company:





 





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	 	(a)	 	Any Person becomes a Beneficial Owner of a majority of the outstanding Common
Voting Shares, $.01 par value, of the Company (or shares of capital stock of the
Company with comparable or unlimited voting rights), excluding, however, The Edward W.
Scripps Trust (the “Trust") and the trustees thereof, and any Person that is or becomes
a party to the Scripps Family Agreement, dated October 15, 1992, as amended currently
and as it may be amended from time to time in the future (the “Family Agreement"); or
	 
	 	(b)	 	Assets of the Company accounting for 90% or more of the Company’s revenues are
disposed of pursuant to a merger, consolidation, sale, or plan of liquidation and
dissolution (unless the Trust or the parties to the Family Agreement have Beneficial
Ownership of, directly or indirectly, a controlling interest (defined as owning a
majority of the voting power) in the entity surviving such merger or consolidation or
acquiring such assets upon such sale or in connection with such plan of liquidation and
dissolution).






For purposes of this Section 2.3, “Person” has the meaning provided in section 3(a)(9) of
the Securities Exchange Act of 1934, as amended (“Exchange Act”), and as used in sections
13(d) and 14(d) of the Exchange Act, including a “group” within the meaning of section 13(d)
of the Exchange Act; and “Beneficial Ownership” and “Beneficial Owner” have the meanings
provided in Rule 13d-3 promulgated under the Exchange Act.




	2.4	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	2.5	 	“Committee” means the Board’s Compensation Committee.
	 
	2.6	 	“Company” means Scripps Networks Interactive, Inc., an Ohio corporation, and any successor.
	 
	2.7	 	“Covered Executive” means an employee of the Company or its subsidiaries who is employed as
an executive and who is listed in Appendix A at the time of a Change in Control.
	 
	2.8	 	“Disability” means a Covered Executive’s termination or suspension of employment accompanied
by his/her actual receipt of a Disability Retirement Benefit under the Pension Plan or a
Disability Benefit under the Long Term Disability Income Plan. A Covered Executive will be
deemed to be in actual receipt of the aforementioned benefits during any waiting period, of up
to ninety (90) days duration, that is a prerequisite for the commencement of benefit payments.
	 
	2.9	 	“Good Reason” means any of the following actions on or after a Change in Control, without the
Covered Executive’s consent:





 





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	 	(a)	 	A material diminution in a Covered Executive’s annual salary or target annual
incentive opportunity below the amount of annual salary or target annual incentive
opportunity in effect immediately prior to such Change in Control;
	 
	 	(b)	 	A material diminution in a Covered Executive’s authority, duties, or
responsibilities as compared to his or her authority, duties, or responsibilities
immediately prior to such Change in Control;
	 
	 	(c)	 	A material diminution in the authority, duties, or responsibilities of the
supervisor to whom the Covered Executive is required to report, including a requirement
that the Covered Executive report to a corporate officer or employee instead of
reporting directly to the Board;
	 
	 	(d)	 	A material diminution in the budget over which a Covered Executive retains
authority as compared to the budget over which he or she had authority immediately
prior to such Change in Control;
	 
	 	(e)	 	A material change in geographic location at which a Covered Executive is
principally employed as compared to the geographic location immediately prior to such
Change in Control; or
	 
	 	(f)	 	The Company’s (or successor’s) material breach of this Plan or of any material
term, provision or condition of employment of a Covered Executive, unless the Covered
Executive’s employment is terminated for Cause within the applicable cure period set
forth below.






A termination of a Covered Executive’s employment by a Covered Executive shall not be deemed
to be for Good Reason unless (1) the Covered Executive gives notice to the Company of the
existence of the event or condition constituting Good Reason within thirty (30) days after
such event or condition initially occurs or exists, (2) the Company fails to cure such event
or condition within thirty (30) days after receiving such notice, and (3) Executive’s
“separation from service” within the meaning of Section 409A of the Code occurs not later
than ninety (90) days after such event or condition initially occurs or exists (or, if
earlier, the last day of the 24-month period following a Change in Control).




	2.10	 	“Retirement” means a Covered Executive’s termination of employment accompanied by his/her
actual receipt of a Normal Retirement Benefit or Early Retirement Benefit under the Pension
Plan.
	 
	2.11	 	“Long Term Disability Income Plan” means the employee benefit plan of that name sponsored by
the Company, including any amended, restated or successor version of that plan.
	 
	2.12	 	“Pension Plan” means the tax-qualified employee pension plan of that name sponsored by the
Company (or in which the Company is a participating company), including any amended, restated
or successor version of that plan.





 





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“Supplemental Executive Retirement Plan” means the non-tax-qualified excess retirement plan
sponsored by the Company (or in which the Company is a participating company), including any
amended, restated or successor version of that plan.




	2.13	 	“Termination Payment” is the payment described in Section 5.2 to which a Covered Executive
may become entitled following termination of his/her employment under the circumstances
described in Section 5.1.
	 
	2.14	 	In addition to the foregoing, certain other terms of more limited usage are defined in other
Articles of the Plan. All terms defined in the Plan are designated with initial capital
letters.
	 
	2.15	 	Whenever appropriate, words used herein in the singular may be read as the plural and the
plural may be read as the singular. Unless otherwise clear from the context, words used
herein in the masculine shall also be deemed to include the feminine.






			
	ARTICLE 3.	 	PLAN PARTICIPATION





An individual must be a Covered Executive in order to participate in the Plan. The names of all
Covered Executives are listed in Appendix A. The Committee may revise Appendix A at any time(s) by
adding or deleting names (or changing Termination Pay Multiples), provided that the deletion of any
name (or reduction of any Termination Pay Multiple) shall require sixty (60) days’ advance written
notice to each affected Covered Executive. Only those employees listed in Appendix A at the time of
a Change in Control are eligible to receive any rights, termination payment or other benefits under
the Plan.




			
	ARTICLE 4.	 	ACCELERATION OF VESTING OF EQUITY AWARDS UPON CHANGE IN CONTROL





Upon a Change in Control, the terms of the Scripps Networks Interactive, Inc. 2008 Long-Term
Incentive Plan (or any successor plan) and the applicable award agreements shall govern the
treatment of all outstanding equity awards of a Covered Executive, including but not limited to any
incentive or nonqualified stock options, stock appreciation rights in tandem with or independent of
options (“SARs”), restricted or nonrestricted share awards, performance-based restricted shares,
restricted stock units and performance units.



 





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	ARTICLE 5.	 	TERMINATION PAYMENT AND OTHER BENEFITS UPON CERTAIN TERMINATIONS OF EMPLOYMENT AFTER
CHANGE IN CONTROL






	5.1	 	Eligibility for Termination Payment. A Covered Executive will be entitled to receive
a Termination Payment (described in Section 5.2) if, within twenty-four (24) months after a
Change in Control, his/her employment with the Company is terminated either (i) by the Company
without Cause, or (ii) by the Covered Executive for Good Reason. Notwithstanding the
foregoing, a Covered Executive will not be entitled to any Termination Payment if his/her
termination of employment is (i) of his/her own initiative for any reason other than Good
Reason, or (ii) on account of his/her Retirement, Disability or death. A Termination Payment
is in lieu of any further salary, bonus, annual incentive or other payments to a Covered
Executive for periods subsequent to the date of his/her termination of employment; but the
Covered Executive still will retain any and all of his/her vested rights under the Company’s
employee pension and benefit plans and arrangements, including, without limitation, the
Pension Plan and the Supplemental Executive Retirement Plan.
	 
	5.2	 	Amount of Termination Payment. A Covered Executive’s Termination Payment is a cash
lump sum equal to the amount computed by multiplying (i) the sum of his/her Base Salary plus
Annual Incentive, by (ii) his/her Termination Pay Multiple. A Covered Executive’s Termination
Payment will be paid by the Company within thirty (30) days following his/her termination of
employment.






As used herein, the following terms have the following meanings:




	 	(a)	 	“Base Salary” means a Covered Executive’s highest annualized rate of basic
salary in effect at any time during the then current partial calendar year, if
applicable, and three (3) full prior calendar years preceding his/her termination of
employment;
	 
	 	(b)	 	“Annual Incentive” means the higher of (i) a Covered Executive’s target annual
incentive in the then partial calendar year, if applicable, of his/her termination of
employment, or (ii) his/her highest actual annual incentive earned in the three (3)
full prior calendar years preceding his/her termination of employment under an annual
incentive plan sponsored by the Company or any comparable plans of The E. W. Scripps
Company (and annualized in the case of any pro rata annual incentive earned for a
partial calendar year); and
	 
	 	(c)	 	“Termination Pay Multiple” is the number set forth beside a Covered Executive’s
name in Appendix A under the column so named Termination Pay Multiple.






	5.3	 	Other Benefit Coverage. If a Covered Executive qualifies for a Termination Payment
under Section 5.1, his/her Benefit Coverage shall be continued for the





 





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Maximum Benefit Period or, if less, until the Covered Executive obtains full-time employment
providing benefits substantially similar to his/her Benefit Coverage. To receive such
Benefit Coverage, the Covered Executive must continue to pay the same percentage of the
total benefit premiums or contributions required from similarly situated executive employees
at the time of the Covered Executive’s termination of employment (or, if materially less, at
the time of the prior Change in Control).




As used herein, the following terms have the following meanings:




	 	(a)	 	“Benefit Coverage” means the medical, dental, disability, life and accidental
death insurance benefits which the Covered Executive and his/her eligible dependents,
if any, were receiving at the time of his/her termination of employment (or, if
materially greater, at the time of the prior Change in Control); and
	 
	 	(b)	 	“Maximum Benefit Period” is the number of months following the Covered
Executive’s termination of employment equal to twelve (12) times his/her Termination
Pay Multiple. The Maximum Benefit Period automatically shall end if a Covered Executive
dies, but only with respect to his/her own coverage, with coverage of any eligible
dependent(s) continuing as though the Covered Executive had not died so long as all
required employee premiums or contributions continue to be paid by the eligible
dependent(s).






	5.4	 	Pension Enhancement. If a Covered Executive qualifies for a Termination Payment under
Section 5.1, he/she will receive a cash lump sum equal to the actuarially determined value of
a Pension Enhancement. The Pension Enhancement will be paid by the Company at the same time as
the Termination Payment.






For purposes of this Section 5.4, “Pension Enhancement” is the excess, if any, of:




	 	(a)	 	The present value of the assumed pension the Covered Executive would be
entitled to receive under the Pension Plan and the Supplemental Executive Retirement
Plan if his/her age and years of credited service at the time of his/her termination of
employment were increased by a number equal to his/her Termination Pay Multiple and if
he/she continued to earn compensation equal to the sum of his/her Base Salary and
Annual Incentive for a period of years equal to his/her Termination Multiple; over
	 
	 	(b)	 	The present value of the actual pension the Covered Executive is entitled to
receive under the Pension Plan and the Supplemental Executive Retirement Plan based
upon his/her actual age and years of credited service at the time of his/her
termination of employment.





 





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In calculating the Pension Enhancement, the same actuarial assumptions and factors shall be
used as are prescribed under the Pension Plan for computing lump sum benefit payments.




	5.5	 	Gross-Up Payment. A Covered Executive also shall be entitled to a Gross-Up Payment,
if applicable. The Company’s obligation to make Gross-Up Payments under this Section 5.5 shall
be conditioned upon a Covered Executive’s termination of employment. “Gross-Up Payment” is the
lump sum benefit payment hereinafter described in this Section 5.5.






If it is determined (as hereinafter provided) that any payment, benefit or distribution to
or for such Covered Executive’s benefit, whether paid or payable or distributed or
distributable pursuant to the terms of the Plan or otherwise pursuant to or by reason of any
other agreement, policy, plan, program, arrangement or similar right (a “Payment”), would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code (or any
successor provision thereto), or any interest or penalties with respect to such excise tax
(such tax, together with any such interest and penalties, hereafter collectively referred to
as the “Excise Tax”), then the Covered Executive shall be entitled to receive a cash lump
sum Gross-Up Payment(s) in an amount such that, after payment by the Covered Executive of
all taxes (including any interest or penalties imposed with respect to such taxes),
including any Excise Tax, imposed upon the Gross-Up Payment(s), the Covered Executive
retains an amount of the Gross-Up Payment(s) equal to the Excise Tax imposed upon the
Payments. The Gross-Up Payment, if any, shall be paid in full to the Covered Executive at
the same time as any Payment (or first installment thereof) subject to the Excise Tax is
paid or provided to the Covered Executive; provided that the Company, in its sole
discretion, may withhold and pay over to the Internal Revenue Service or any other
applicable taxing authority, for the benefit of the Covered Executive, all or any portion of
any Gross-Up Payment, and the Covered Executive consents to such withholding.




All determinations required to be made under this Section 5.5, including whether an Excise
Tax is payable by the Covered Executive, the amount of such Excise Tax, whether a Gross-Up
Payment is required and the amount of such Gross-Up Payment, shall be made by a
nationally-recognized legal or accounting firm (the “Firm”) (which may be the Company’s
independent auditor) selected by the Company in its sole discretion. The Firm shall submit
its determination and detailed supporting calculations to the Covered Executive and the
Company as promptly as practicable. If the Firm determines that any Excise Tax is payable by
the Covered Executive and that a Gross-Up Payment is required, the Company shall pay the
Covered Executive the required Gross-Up Payment as provided herein. Any determination by the
Firm as to the amount of the Gross-Up Payment shall be binding upon the Covered Executive
and the Company. As a result of the uncertainty in the application of Section 4999 of the
Internal Revenue Code (or any successor provision thereto) at the time of the initial
determination by the Firm hereunder, it is possible that the Company may fail to pay a
Gross-Up



 





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Payment which should have been paid (an “Underpayment”). If the Covered Executive thereafter
is required to make a payment of any Excise Tax, the Firm shall determine the amount of the
Underpayment, if any, that has occurred and submit its determination and detailed supporting
calculations to the Covered Executive and the Company as promptly as possible. Any such
Underpayment shall be promptly paid by the Company to the Covered Executive, or for his/her
benefit, within thirty (30) days of receipt of such determination and calculations.




The Covered Executive and the Company shall each provide the Firm access to and copies of
any books, records or documents in the possession of the Company or the Covered Executive,
as the case may be, reasonably requested by the Firm, and shall each otherwise cooperate
with the Firm in connection with the preparation and issuance of the determinations
contemplated by this Section 5.5. The fees and expenses of the Firm that are incurred at any
time from the date of this Plan through 10th anniversary of the date of the Change in
Control for services in connection with the determinations and calculations contemplated by
this Section 5.5 shall be paid by the Company. The Company shall pay such fees and expenses
not later than the end of the calendar year following the calendar year in which the related
work is performed or the expenses are incurred by the Firm. The amount of such fees and
expenses that the Company is obligated to pay in any given calendar year shall not affect
the fees and expenses that the Company is obligated to pay in any other calendar year, and
the Covered Executive’s right to have the Company pay such fees and expenses may not be
liquidated or exchanged for any other benefit.




Notwithstanding any other provision of this Section 5.5 to the contrary, and in order to
comply with Section 409A of the Code, the Company and the Covered Executive shall take all
steps reasonably necessary to ensure that any Gross-Up Payment, Underpayment or other
payment or reimbursement made to the Covered Executive pursuant to this Section 5.5 will be
paid or reimbursed on the earlier of (i) the date specified for payment under this Section
5.5, or (ii) December 31st of the year following the year in which the applicable taxes are
remitted or, in the case of reimbursement of expenses incurred due to a tax audit or
litigation to which there is no remittance of taxes, the end of the calendar year following
the year in which the audit is completed or there is a final and nonappealable settlement or
other resolution of the litigation in accordance with Treasury Regulation Section
1.409A-3(i)(1)(v).




			
	ARTICLE 6.	 	NON-DUPLICATION OF PAYMENTS AND BENEFITS





Notwithstanding any contrary provision of the Plan, there shall be no duplication of rights,
payments and benefits under the Plan with rights, payments and benefits granted to a Covered
Executive, in the event of a termination of his/her employment after a Change in Control, under any
other agreement, plan or arrangement (“Alternate Plan”). In order to prevent such duplication, if
the Covered Executive is entitled to payments or benefits under Article 5 upon termination of
employment, the Covered Executive shall not be entitled to any severance pay or benefits under any
Alternate



 





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Plan unless otherwise specifically provided in this Plan or in the Alternative Plan (in a specific
reference to this Plan). Notwithstanding the foregoing, any payments due under the Executive Annual
Incentive Plan upon a Covered Executive’s termination of employment following a Change in Control
shall be in addition to (and shall not be considered duplicative of) any payments or benefits
provided under this Plan.




			
	ARTICLE 7.	 	SOURCE OF PAYMENTS





All payments required under the terms of the Plan shall be paid in cash from the general assets of
the Company. A Covered Executive shall have the status of a general creditor of the Company with
respect to any and all claims for payments under the Plan.




			
	ARTICLE 8.	 	PLAN ADMINISTRATION AND CLAIMS PROCEDURE






	8.1	 	Plan Administration. The Plan shall be administered by the Committee and/or its
designee(s). The Committee shall have rights, powers and duties with respect to the Plan that
are comparable to those granted to the designated pension board under the Pension Plan.
Without limiting the generality of the foregoing, the Committee has full authority to (i)
interpret the Plan, (ii) determine all questions relating to the rights and status of Covered
Executives and their Termination Payments, Benefit Coverage, Pension Enhancements and Gross-Up
Payments, and (iii) make such rules and regulations for the administration of the Plan as are
not inconsistent with its express terms and provisions. This provision is included in the Plan
for the express purpose of giving and granting to the Committee the maximum discretionary
authority possible under Firestone Tire and Rubber Company v. Bruch, 489 U.S. 101
(1989). Decisions by the Committee shall be made by majority vote of all members of the
Committee.
	 
	8.2	 	Claims Procedure. If any Covered Executive’s claim for payments or benefits under
the Plan is denied, the Committee shall cause a written notice to be sent to the Covered
Executive setting forth the specific reasons for the denial, specific reference to the
provisions of the Plan on which the denial is based, a description of any material or
information necessary to perfect the denied claim (together with an explanation of why such
material or information is necessary), and an explanation of the review procedure described
below. Within sixty (60) days after receipt of such notice of denial from the Committee, the
Covered Executive, or his/her duly authorized representative, may request a review of the
denied claim by written application to the Committee. In connection with such request for
review, the Covered Executive, or his/her duly authorized representative, shall be entitled to
review any and all documents pertinent to the claim or its denial and also shall be entitled
to submit issues and comments in writing. The decision of the Committee upon such review shall
be made not later than sixty (60) days after the receipt of such request for review, unless
special circumstances shall require an extension of time for processing, in which case a
decision shall be rendered as soon as possible, but not later than one hundred twenty (120)
days





 





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after the Committee’s receipt of the request for review. The decision of the Committee upon
review of the denied application shall be in writing and shall include specific reasons for
the decision and specific references to the pertinent Plan provisions on which the decision
is based. All written communications from the Committee under this Section 8.2 shall be
written in a manner calculated to be understood by the recipient.




			
	ARTICLE 9.	 	ARBITRATION OF DISPUTES





Any controversy or claim arising out of or relating to the Plan that cannot be resolved pursuant to
Section 9.2 shall be settled by binding arbitration in the City of Cincinnati, Ohio, in accordance
with the Commercial Arbitration Rules of the American Arbitration Association then pertaining in
such city; and judgment upon the award rendered by the arbitrator or arbitrators may be entered in
any court in Hamilton County, Ohio having jurisdiction thereof. The arbitrator or arbitrators shall
have powers to issue mandatory orders and restraining orders in connection with such arbitration.
Neither the Company nor a Covered Executive shall be liable for punitive or exemplary damages.
Each party shall be responsible for its/his/her own costs and expenses (including attorneys’ fees).
The federal and state courts in Hamilton County, Ohio shall have exclusive jurisdiction with
respect to the entry of judgment upon any arbitration award hereunder or the granting of any order;
and such courts shall have exclusive jurisdiction with respect to any other controversy or claim
arising out of or relating to the Plan that may properly be brought therein if the provisions
herein mandating arbitration are held to be unenforceable.




			
	ARTICLE 10.	 	MISCELLANEOUS PROVISIONS






	10.1	 	ERISA and Governing Law. The Plan is an unfunded deferred compensation plan for a
select group of management or highly compensated employees, as defined in Section 201(2) and
401(a)(1) of the Employee Retirement Security Act of 1974, as amended (“ERISA”). As such, the
Plan is expressly excluded from all, or substantially all, of the provisions of ERISA,
including but not limited to Parts 2 and 3 of Title I thereof. None of the statutory rights
and protections conferred on participants by ERISA are conferred under the terms of this Plan,
except as expressly noted or required by operation of law. To the extent not superseded by
federal law, the laws of the State of Ohio shall control in any and all matters relating to
the Plan.
	 
	10.2	 	Benefits Are Nonassignable. No right, payment or benefit under the Plan may be
pledged, assigned, anticipated or alienated in any way by any Covered Executive, otherwise
than by will or the laws of descent and distribution. This Plan shall inure to the benefit of
and be enforceable by the legal representatives of a Covered Executive. The Company will
require any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the Company to assume
expressly and agree





 





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to perform this Plan in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. “Company” means the Company
as hereinbefore defined and any successor to its business and/or assets as aforesaid that
assumes and agrees to perform this Plan by operation of law or otherwise. This Plan shall
inure to the benefit of and be binding upon the Company and its successors and assigns.




	10.3	 	Amendment, Suspension or Termination of Plan. The Company hereby reserves the right
and power to amend, suspend or terminate the Plan, in whole or in part, at any time and from
time to time; provided, however, that any action taken after a Change in Control or within
sixty (60) days prior to a Change in Control cannot materially adversely affect the rights,
payments or benefits of any employee who then is a Covered Executive without his/her express
written consent. All actions pursuant to this Section 10.3 shall be set forth in a written
instrument adopted by the Committee and approved or ratified by the Board.
	 
	10.4	 	No Guarantee Of Employment. Nothing contained in the Plan shall be construed as a
contract of employment between the Company or any Covered Executive, or as a right of any
Covered Executive to continue in the employment of the Company, or as a limitation of the
right of the Company to discharge any Covered Executive, with or without cause, at any time.
	 
	10.5	 	Severability. If any provision of the Plan shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining provisions hereof;
instead, each provision shall be fully severable and the Plan shall be construed and enforced
as if the illegal or invalid provision had never been included herein.
	 
	10.6	 	Section 409A of the Code.






	 	(a)	 	Section 409A of the Code (“Section 409A”) imposes payment restrictions on
“separation pay” (i.e., payments owed to a Covered Executive upon termination of
employment). Failure to comply with these restrictions could result in negative tax
consequences to the Covered Executive, including immediate taxation, interest and a 20%
penalty tax. It is the Company’s intent that this Plan be exempt from the application
of, or otherwise comply with, the requirements of Section 409A. Specifically, any
taxable benefits or payments provided under this Plan are intended to be separate
payments that qualify for the “short-term deferral” exception to Section 409A to the
maximum extent possible, and to the extent they do not so qualify, are intended to
qualify for the involuntary separation pay exceptions to Section 409A of the Code, to
the maximum extent possible. If neither of these exceptions applies, then
notwithstanding any provision in this Plan to the contrary:






	 	(i)	 	All amounts that would otherwise be paid or provided during the
first six months following the date of termination shall instead be accumulated
through and paid or provided (together with interest





 





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on any delayed payment at the applicable federal rate under the Code), on
the first business day following the six-month anniversary of the Covered
Executive’s termination of employment.




	 	(ii)	 	Any expense eligible for reimbursement must be incurred, or any
entitlement to a benefit must be used, during the applicable expense
reimbursement or benefit continuation period provided in this Plan. The amount
of the reimbursable expense or benefit to which a Covered Executive is entitled
during a calendar year will not affect the amount to be provided in any other
calendar year, and a Covered Executive’s right to receive the reimbursement or
benefit is not subject to liquidation or exchange for another benefit.
Provided the requisite documentation is submitted, the Company will reimburse
the eligible expenses on or before the last day of the calendar year following
the calendar year in which the expenses were incurred.






	 	(b)	 	For purposes of this Plan, “termination of employment” or words or phrases to
that effect shall mean a “separation from service” within the meaning of Section 409A.





 





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APPENDIX A




 




 






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