Document:

EX-10.1

 Exhibit 10.1 
  

 
 SEPARATION AGREEMENT 

January 15, 2018 
 Charles M. Byrnes 

Dear Chuck: 
 This letter agreement
(“Separation Agreement”) is provided to confirm the terms of your separation from employment with Kennametal Inc. (“Company”). The Company advises you to consult with an attorney regarding this Separation Agreement, which
includes the Company’s consideration it shall pay you in exchange for a release of claims, as per Section 4(a) and Section 15 of your Officer’s Employment Agreement dated November 7, 2015 (“Officer’s Employment
Agreement”) which was effective December 7, 2015. 
  

	 	1.	Termination of Officer Status and Employment with the Company. 

 Your status as Vice
President and President, Industrial Business Segment and employment with the Company will terminate without cause effective January 15, 2018 (“Termination Date”). On the Termination Date, you will cease to perform any duties or
responsibilities of your former position as Vice President and President, Industrial Business Segment. As such, you are not authorized to make any commitments on behalf of the Company or otherwise bind or obligate the Company, nor are you authorized
to represent to others (directly or by implication) that you have any such authority. 
 Your Officer’s Employment Agreement will
terminate on the Termination Date concurrent with your employment, except for your continued obligations under the terms of paragraph 9 concerning confidential information and non-disclosure (which are
reincorporated herein as if set forth in full). You acknowledge and agree that no “Change of Control” as defined under the Officer’s Employment Agreement has occurred. Your designation as an “executive officer” of the
Company for purposes of the Securities Exchange Act of 1934, as amended, shall also cease on your Termination Date or such earlier date as determined by the Kennametal Board of Directors, but the Company’s Insider Trading Policy, as well as all
other applicable Company policies and procedures, will continue to apply to you in accordance with their terms. 

 

 
  

 Notwithstanding your termination of employment and officer status, the Company acknowledges
and agrees that the obligations set forth under the Indemnification Agreement dated December 7, 2015 between you and the Company remain in full force and effect according to the terms of that agreement. 

 

	 	2.	Compensation and Benefits. 

 In accordance with the terms and conditions of your
employment with the Company, the following sets forth the compensation and benefits you are entitled to and will receive. You are not entitled to any compensation or benefits not otherwise set forth in this Section 2. 

(a)        Base Salary:  You will continue to receive your current base salary, subject to
current deductions, withholdings and current benefit elections, through your Termination Date, in accordance with the Company’s established payroll practices. 

(b)        Paid Time Off Payout:  After your employment with the Company terminates, you
will be paid for any earned and unused Paid Time Off (“PTO”), through your Termination Date, subject to normal withholdings. This represents full payment of all of your PTO as of the termination of your employment. You will not earn
any PTO or pay after your Termination Date, and you will not receive any further payment for earned and unused PTO. In the event you have used more PTO than you have earned up to your Termination Date, you authorize the Company to withhold from the
separation benefit payments, which are to be paid in accordance with Section 3, an amount equal to the unearned PTO taken. 

(c)        Active Benefits:  Subject to your current elections, you will continue to
receive active coverage for medical, dental, and vision benefits through the last day of the month in which your employment terminates. Coverage for life, AD&D, and disability will end effective on your Termination Date. 

(d)         COBRA Benefits:  After your healthcare coverage as an active employee ends,
you and your dependents have the right to continue your group health care coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), by paying the applicable premium, for a period of time (usually 18 months). You will
receive information about this benefit continuation under separate cover from Business Solver, Kennametal’s third party COBRA administrator. 

(e)        Equity Awards: 

(i)        Stock Options:  You will have all rights to vested stock options previously
granted to you, subject to and in accordance with the terms and conditions of the applicable stock option award agreements between you and the Company, as well as other relevant plan provisions. Vesting of stock options will continue through your
Termination Date, to the extent provided by the terms of the applicable agreements. Your right to exercise vested stock options, following your Termination Date, shall be in accordance with the applicable stock plan(s) and

  
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any applicable stock option agreements. Stock Options not vested on your Termination Date will be forfeited. 

(ii)        Restricted Stock Units:  You will have all rights to restricted stock units
previously granted to you subject to and in accordance with the terms and conditions of the applicable restricted stock unit agreements between you and the Company, as well as other relevant stock plan provisions. Restricted stock units not vested
on your Termination Date will be forfeited. 
 (iii)        Performance Stock Units:
 As your performance stock units will not be vested on your Termination Date, they will be forfeited. 
 (f)
        Thrift Plus Plan:  As a vested participant in the Thrift Plus Plan (TPP), you will have all rights subject to the terms and conditions of the TPP Plan document. 

(g)         Executive Retirement Plan:  You are not entitled to Executive Retirement Plan
(“ERP”) benefits as you are not vested under the terms and conditions of the ERP Plan document. 

(h)        Officer Benefits:  Your eligibility for the continuation of the following
officer benefits is as set forth below: 
 (i)        Annual Incentive Plan Eligibility:
 Your are not eligible for the Annual Incentive Plan for Fiscal Year 2018. 

(ii)        Long Term Incentive Program:  You are not eligible to receive any future
grants through the Long Term Incentive Program (“LTIP”), subsequent to January 5, 2018. Your rights related to prior grants issued to you under the LTIP are subject to the terms and conditions of the applicable agreements between you
and the Company, as well as other relevant plan provisions. 
  

	 	3.	Involuntary Termination Benefits. 

 Consistent with the terms of your Officers
Employment Agreement, the Company asks that you sign this Separation Agreement to obtain the compensation described in this Section 3 and to effectuate the release of claims set forth in Section 4. In exchange for your execution of this
release, and upon your signing this Separation Agreement (without revoking it, as provided herein) and it becoming effective, the Company will provide you: 

(a) Severance:  For the twelve (12) month period beginning on January 5, 2018 and ending on January 4, 2019,
severance pay in the form of salary continuation payments, at the rate of your current base salary ($406,850 per year), in substantially equal installments (at least monthly) in accordance with the Company’s established payroll practices,
subject to required and authorized withholdings and deductions. 

  
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 (b) Additional Severance:  The Company will pay to you a pro-rated amount of your Fiscal Year 2018 Target Annual Incentive equal to $152,569, which payment will be made to you six (6) months after your Termination Date, subject to required and authorized withholdings
and deductions. The Company will also pay to you as a lump sum the fair value of the remaining outstanding unvested LTIP that was granted to you as a new hire grant on December 15, 2015. This includes the final traunche of 5,563 shares of new
hire RSUs valued at $278,150 and the final traunche of 23,657 new hire Stock Options with a net exercise value of $692,914 both of which would have vested on December 15, 2018. These amounts will be paid as a total lump sum payment of $971,064
six (6) months following the Termination Date, subject to required and authorized withholdings and deductions in accordance with IRC 409A. 

(c) Medical Benefit Continuation:  The Company will provide a period of Medical Benefit Continuation to you, consistent with your
2018 Enrollment Election (subject to change in a manner consistent with any similar changes permitted for then-current employees of the Company), from the date that your active employee medical coverage terminates through
December 31, 2018, and this continued group medical coverage will reduce the duration of your eligibility for continued group medical coverage under COBRA on a co-extensive basis. This
continuation of group medical coverage is intended as a continuation of medical benefits only and does not include a continuation of dental and vision benefits. Additionally, all Company contributions into your Health Savings Account (HSA) will
cease upon your Termination Date. The Medical Benefit Continuation referenced above provides financial support to you with respect to required COBRA medical coverage premiums. During the Medical Benefit Continuation period provided for in this
Section 3(b), the Company will assume the obligation for the COBRA medical premium costs through December 31, 2018. Please note that you must take affirmative action in order to receive this Medical Benefit Continuation. 

The following disclosure pertains to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and how it may
affect payments of deferred compensation under this Separation Agreement. The Code governs the taxation of deferred compensation, and contains provisions that accelerate income recognition and impose interest and additional taxes on payments and
awards subject to Code Section 409A that fail to conform or are modified inconsistent with the requirements of Code Section 409A. You should review the content of this Agreement, specifically this paragraph 3, with your attorney and/or tax
advisor for Section 409A compliance. You are solely liable for all tax, interest and penalties that might be imposed under Section 409A. The Company agrees to discuss modifying the terms of this paragraph 3 at your request, if necessary,
to comply with the requirements of Section 409A and the regulations promulgated thereunder. Such request must be made within 21 days from the date of this letter. For purposes of this Agreement, each payment is intended to be excepted
from Section 409A to the maximum extent provided under Section 409A as follows: each severance payment, including each individual installment payment, shall be treated as a separate payment. Each payment under this Agreement is intended to
be excepted from Section 409A to the maximum extent provided under Section 409A as follows: (i) each payment made within the applicable 2 1⁄2
month period specified in Treas. Reg. § 1.409A-1(b)(4) is intended to be excepted under the short-term deferral exception as specified in Treas. Reg. §
1.409A-1(b)(4); (ii) post-termination medical benefits are intended to be excepted under the medical benefits exceptions as specified 

  
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in Treas. Reg. § 1.409A-1(b)(9)(v)(B); and (iii) to the extent payments are made as a result of an involuntary separation, each payment that
is not otherwise excepted under the short-term deferral exception or medical benefits exception is intended to be excepted under the involuntary pay exception as specified in Treas. Reg. §
1.409A-1(b)(9)(iii). You shall have no right to designate the date of any payment hereunder. With respect to payments subject to Section 409A of the Code (and not excepted therefrom), if any, it is
intended that each payment is paid on permissible distribution event and at a specified time consistent with Section 409A of the Code. 
  

	 	4.	Your Release of Claims.  

 By signing this Separation Agreement and accepting the
compensation set forth in Section 3, you, on behalf of yourself, your heirs, executors, administrators, successors and assigns, waive, release and forever discharge the Company and all current and former subsidiaries, divisions, related or
affiliated companies, and all of their officers, directors, employees, agents, successors, predecessors and assigns, including but not limited to all management and supervisory employees (severally and collectively “Releasees”), jointly
and individually, from all claims, complaints, demands, causes of action, obligations, liabilities and damages of every nature and description, known or unknown, foreseen or unforeseen, in law or equity, at common law or under any statute, rule,
regulation, order or law, whether federal, state or local, on any grounds whatsoever arising before your signing this Separation Agreement, including but not limited to any claim relating to or arising out of your employment by the Company or the
Company’s involuntary termination of your employment, any claim under the WARN Act, any claim under the Age Discrimination in Employment Act of 1967, as amended, any claim of discrimination on any basis under any federal, state or local law,
any claim of breach of any express or implied contract, any claim for promissory estoppel or detrimental reliance, and any claim for wrongful or constructive discharge. If any administrative agency or court assumes jurisdiction of any charge,
complaint, proceeding or action covered by Section 4 of this Separation Agreement against any of the Releasees, you agree not to accept, recover or receive any monetary damages or other relief from or in connection with such charge, complaint,
proceeding or action. You agree that if a court of competent jurisdiction determines that you are to be awarded damages under WARN, those damages will be offset by the total compensation paid to you under Section 3(a) and 3(b) of this
Separation Agreement. 
 The Company advises you to consult with your own attorney before agreeing to the release of claims set forth in
this section. As set forth below in Section 12, you have twenty-one (21) days from the date of your receipt of this letter to review this Separation Agreement and the release it contains. 

Nothing in this section impairs your right to vested Company benefits to which you are entitled as of the date you sign this Separation
Agreement. Nothing in this section impairs any right you hold that cannot be waived or released as a matter of law. By way of example, nothing in this section impairs your right to file a charge or complaint with any appropriate federal, state, or
local agency, such as the United States Equal Employment Opportunity Commission, or to participate in or cooperate with any such charge or complaint procedure. After signing this Separation Agreement, you retain the right to challenge the validity
of the Separation 

  
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Agreement. If you have any questions about other rights you may hold that cannot be waived or released as a matter of law, the Company advises you to consult with your own attorney on that
subject. 
  

	 	5.	Your Representations. 

 By signing this Separation Agreement and accepting the
compensation set forth in Section 3, you represent and affirm that you have neither filed nor caused or permitted to be filed on your behalf any claim, charge, proceeding or action against any of the Releasees in any court or administrative
agency for your benefit. Further, you represent and affirm that you are aware of no facts that would support the filing of any such claim, charge, proceeding or action. Further, you represent and affirm that, as of the date you signed this
Separation Agreement, you were aware of no facts indicating that the Company, or any person or entity acting on its behalf, engaged in illegal or unethical conduct of any sort, and that you have not engaged in any such conduct. If you are unable to
make these representations, you must contact the Company before signing this Separation Agreement. All of the representations contained in this Section 5 are material to the Company’s decision to offer the compensation set forth in
Section 3, and the Company is acting in reliance on your representations when offering and providing these benefits. 
  

	 	6.	Non-Admission. 

 The act of offering this
Separation Agreement is not an admission of any liability whatsoever by the Company or any of the Releasees. 
  

	 	7.	Non-Compete, Non-Solicitation, Confidential Information and Non-Disclosure; Return of Company
Property. 

 (a) Non-Compete,
Non-Solicitation, Confidential Information and Non-Disclosure:  You agree to comply with any obligations you may have, contractual or otherwise to: 

(i) refrain from competing against the Company for a period of two (2) years from the Termination Date. The competitors shall include,
without limitation, those listed on Appendix A attached hereto and incorporated herein. 
 (ii) refrain from soliciting any employee of the
Company for hire for a period of two (2) years from the Termination Date; 
 (iii) refrain from disclosing and otherwise protect any
confidential information about or belonging to the Company including, but not limited to, those obligations set forth in your Officer’s Employment Agreement, and to honor any other applicable post-employment restrictions you may have agreed to
as a Company employee, which obligations are not superseded by this Separation Agreement. 
 (b) Return of Company Property:
 You agree that you have returned, or will return within one (1) day of your Termination Date, as provided in Section 1 above, all Company 

  
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property and information, including but not limited to the following: all keys and/or access cards to the Company’s facilities/offices, all equipment, documents, customer lists, written
information, forms, plans, documents or other written or computer material or data, software or firmware, records, or copies of the same, belonging to the Company or any company affiliated with the Company, in your possession or control. You agree
that you are not entitled to receive or retain the compensation set forth in Section 3 of this Separation Agreement until you return all information and property to the Company in compliance with this Separation Agreement. 

 

	 	8.	Confidentiality Regarding Terms of This Separation Agreement. 

 You agree that the terms
and conditions of this Separation Agreement, and the actions of the parties in accordance therewith, are confidential, and that you have not disclosed and will not disclose such information to anyone, other than your attorney, accountant, tax
advisor, immediate family or as required by law or for purposes of enforcing this Separation Agreement. To the extent you disclose such information to any of the aforementioned persons, you will advise them that they must not disclose that
information and are bound by this confidentiality provision. 
  

	 	9.	Company-Issued Credit Card Obligations. 

 You agree that you will issue payment to the
approved Kennametal credit provider (for example: JP Morgan Chase) for any outstanding balance on my Company-issued credit card within thirty (30) days of your Termination Date. If you do not issue payment to the approved credit provider within
that period of time, you authorize the Company to withhold from the separation benefit payments, which are to be paid in accordance with Section 3 above, an amount equal to the unpaid balance that remains due to the approved credit provider.
Any business expenses that are subject to reimbursement by the Company, which are incurred through your Termination Date, may be processed for reimbursement either prior to your Termination Date through normal expense reimbursement processes or,
after your termination date, by promptly forwarding a request for reimbursement directly to your supervisor. 
  

	 	10.	Non-Disparagement. 

 You agree that you will not
communicate to third parties disparaging remarks, untrue statements, or negative opinions about the Company, its subsidiaries and affiliated companies, or any of their employees, officers or directors. You agree that you are not entitled to receive
or retain the compensation set forth in Section 3 of this Separation Agreement if you breach this non-disparagement obligation. 
  

	 	11.	Complete Agreement/Ongoing Contractual Obligations. 

 When executed, this Separation
Agreement is the complete understanding concerning the Company’s involuntary termination of your employment and supersedes any and all prior agreements or understandings concerning that subject, except as otherwise provided in this Separation
Agreement. 

  
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	 	12.	Governing Law. 

 This Separation Agreement will be governed by Pennsylvania law without
regard to its conflict of laws provision, except to the extent federal law applies. If any provision of this Separation Agreement, except the Release in Section 4, is declared illegal or unenforceable by a court of competent jurisdiction and
cannot be modified to be enforceable, such provision shall immediately become null and void, leaving the remainder of this Separation Agreement in full force and effect. 
  

	 	13.	Acknowledgements. 

 By executing this Separation Agreement, you acknowledge that: 

(a) the Company hereby advises you (in writing) to review this Separation Agreement, including the release of claims in Section 4, with
your own attorney before you sign the Separation Agreement, and that you are solely responsible for the fees and costs of such attorney; 

(b) you have twenty-one (21) days from the date of your receipt of this letter to review and
accept this Separation Agreement and the release it contains, you acknowledge that, if you execute this Separation Agreement prior to the expiration of the twenty-one (21) day period, you do so having
fully and carefully considered the Separation Agreement and you agree that, to the extent this Separation Agreement was modified by the parties prior to its execution by you, such modification does not restart or extend this twenty-one (21) day period; 
 (c) you have the right to revoke and cancel this Separation Agreement
for seven (7) days after you sign it, it shall not be effective until after passage of that seven (7) day period without your revoking it and you may revoke it within seven (7) days after signing it by hand delivering, sending via
overnight mail or mailing a written notice of revocation to Kennametal Inc., 600 Grant Street, Suite 5100, Pittsburgh, Pennsylvania 15219, Attn: Vice President and Chief Human Resources Officer; 

(d) you have read this Separation Agreement in its entirety and understand all of its terms, including the release in Section 4; 

(e) the compensation described in Section 3 is the only consideration for your signing this Separation Agreement, and no other provision
or inducement has been offered or made to induce you to sign this Separation Agreement; 
 (f) you would not be entitled to receive the
compensation described in Section 3 if you did not sign this Separation Agreement; and 
 (g) you voluntarily and knowingly agree to
all the terms and conditions in this Separation Agreement. 

  
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	Sincerely,
	
	/s/ Christopher Rossi
	 Christopher Rossi
 President and Chief
Executive Officer
 Kennametal Inc.

  
 Attachments 

I hereby execute this Separation Agreement, 
 including the
release in Section 4, intending 
 to be legally bound, this 25th day of January, 2018. 

 

			
		
	By	 	/s/ Charles M. Byrnes
		 	Charles M. Byrnes

  
 9msft-ex1014_505.htm

 

Exhibit 10.14

MICROSOFT CORPORATION 

DEFERRED COMPENSATION PLAN FOR 

NON-EMPLOYEE DIRECTORS 

(Amended and Restated Effective as of December 1, 2017)

 

1.Purpose

The purpose of the Microsoft Corporation Deferred Compensation Plan for Non-Employee Directors (the "Plan") is to further the long-term growth of Microsoft Corporation (the "Company") by allowing the non-employee directors of the Company the opportunity to defer certain compensation, keeping their financial interests aligned with the Company, and providing them with a long-term incentive to continue providing services to the Company.

This Plan is intended to comply with section 409A of the Internal Revenue Code of 1986, as amended (the "Code") and official guidance issued thereunder.  Notwithstanding any other provision of this Plan, this Plan shall be interpreted, operated and administered in a manner consistent with this intention.

2.Effective Date

The Plan is effective January 16, 2006.  This restatement of the Plan is effective as of December 1, 2017.

3.Definitions

In addition to the terms defined above, the following terms shall have the meanings indicated below.

Account – means a bookkeeping account established by the Company for each Participant electing to defer Eligible Compensation under the Plan, which may include sub-accounts for amounts payable at different times and/or payable in different forms.

Affiliate – means any corporation or other entity that is treated as a single employer with the Company under Code section 414.

Board – means the Board of Directors of Microsoft Corporation.

Cash Retainer – means the amount of annual retainer payable in cash for service on the Board, including any annual retainer payable for service as a chair or member of any Board committee.

Common Stock – means the Common Stock, $0.00000625 par value, of the Company.

Director – means a member of the Board who is not an officer or employee of the Company or any Affiliate.

Eligible Compensation – means both the Cash Retainer and Equity Retainer.  For the avoidance of doubt, Eligible Compensation earned in a Plan Year refers to the Cash Retainer and Equity Retainer earned in the four quarterly cycles beginning in the applicable Plan Year measured from the date of the annual shareholders meeting in the immediately prior Plan Year.

Equity Retainer – means the amount of annual retainer payable in Common Stock for service on the Board, including any annual retainer payable for service as a chair or member of any Board committee.

New Director – means a Director who was not eligible to participate in the Plan (or any other plan sponsored by the Company or any Affiliate, which may be aggregated with the Plan under Code section 409A) prior to becoming a Director; provided, all Directors providing services to the Company as of the Effective Date shall be deemed to be New Directors for purposes of making an initial election pursuant to Section 5.1(b)(ii) with respect to Eligible Compensation earned in 2006.

Open Enrollment – means the period during each Plan Year when Directors may elect to make, terminate or change an initial election to defer amounts under the Plan. Open Enrollment shall normally be held during the month of December of each Plan Year.

Participant – means a Director who elects to defer Eligible Compensation under the Plan.

Plan Administrator – means the Compensation Committee of the Board, or its delegate or delegates appointed to administer the Plan.

 

 

Plan Year – means the 12-month period from January 1 to December 31.

Separation from Service or Separates from Service – means a "separation from service" with the Company and its Affiliates within the meaning of Code section 409A.

HR Officer – means the senior corporate officer in charge of the Human Resources department.

4.Participation

4.1Any Director shall be eligible to participate in the Plan.  A Director becomes a Participant in the Plan on the date he or she first enrolls in the Plan by electing to defer Eligible Compensation in accordance with Section 5.1(b).

4.2A Director who has been a Participant under the Plan will cease to be a Participant on the date his or her Account is fully distributed.

5.Participant Accounts

5.1Elections to Defer Eligible Compensation

(a)Initial Deferral Election.  A Director may make an irrevocable election to defer the following types of Eligible Compensation in one (1) percent increments up to the specified maximum percentages:

(i)A Director may elect to defer up to 100% of his or her Cash Retainer.

(ii)A Director may elect to defer up to 100% of his or her Equity Retainer.

(b)Time and Manner of Making an Initial Election

(i)A Director may make an irrevocable election to defer one or more types of Eligible Compensation during the Open Enrollment period that occurs in the Plan Year preceding the Plan Year in which the Eligible Compensation is earned.

(ii)In addition to Open Enrollment elections under Section 5.1(b)(i), a New Director may make an irrevocable election to defer one or more types of Eligible Compensation, provided such election is made within thirty (30) days of becoming a New Director and such election shall only apply to amounts earned after the election is filed.

(iii)A deferral election shall be made in accordance with procedures established by the Plan Administrator.

(c)Evergreen Election.  An initial deferral election shall be effective for succeeding Plan Years and shall become irrevocable on each December 31 with respect to Eligible Compensation earned in the immediately following Plan Year unless the Participant terminates or modifies such election.  A Participant may terminate or modify an initial deferral election during the Open Enrollment period immediately prior to the applicable Plan Year.  Any termination of, or modification to, an initial deferral election shall be made in accordance with procedures established by the Plan Administrator.

5.2Crediting of Deferrals.  Eligible Compensation deferred by a Participant under the Plan shall be credited to the Participant's Account as soon as practicable after the amounts would have otherwise been paid to the Participant.  Amounts credited to a Participant's Account shall be deemed immediately invested in shares of Common Stock (calculated to one one-thousandth of a share).  Any dividends which would have been received had such amount actually been invested in shares of Common Stock will also be credited to the Participant's Account and deemed immediately invested in additional shares of Common Stock (calculated to one one-thousandth of a share).  Nothing in this Section or otherwise in the Plan, however, will require the Company to actually invest any amounts credited to a Participant's Account in shares of Common Stock or otherwise.

5.3Vesting.  A Participant shall at all times be one-hundred (100) percent vested in any amounts credited to his or her Account.

5.4Adjustments upon Changes in Capitalization.  If any change is made to the shares of Common Stock without the Company's receipt of consideration, appropriate adjustments shall be made to the number and/or class of securities credited to a Participant's Account under the Plan in the same manner and to the same extent that adjustments are made to the maximum number and/or class of securities issuable under the Company's 2017 Stock Plan.

 

 

6.Distribution of Account Balances

6.1Distribution Form

(a)In the event a Participant elects to have the distribution of a deferred amount (and dividends thereon) commence thirty (30) days following the date of his or her Separation from Service pursuant to Section 6.2, the Participant may elect to have the deferred amount (and dividends thereon) distributed in a lump sum payment or in equal annual installments over a period of five (5) years.  Such election must be made at the time of making the initial deferral election under Section 5.1.

(b)In the event a Participant fails to specify the form in which a deferred amount (and dividends thereon) will be distributed at the time of making an initial deferral election under Section 5.1, or if a Participant elects to receive a distribution other than pursuant to Section 6.2(a)(i), the Participant shall receive such deferred amount (and dividends thereon) in a lump sum payment.

(c)Distribution of a Participant's Account balance shall be made in Common Stock; provided, however, any fractional shares of Common Stock credited to the Account shall be paid in cash.

6.2Distribution Time

(a)A Participant may elect to have the distribution of a deferred amount (and dividends thereon) commence thirty (30) days following:  (i) the date of the Participant's Separation from Service; (ii) the first, second, third, fourth or fifth anniversary of the Participant's Separation from Service; or (iii) a specified date or, if earlier, the fifth anniversary of the Participant's Separation from Service (provided that the specified date must be at least twelve (12) months after the date on which the final payment of the deferred amount would have been made to the Participant absent deferral).  

(b)A Participant must elect the date on which distributions will commence at the time of making the initial deferral election under Section 5.1.  In the event a Participant fails to elect the date on which a distribution will commence at the time of making an initial deferral election under Section 5.1, or if a Participant specifies a date under Section 6.2(a)(iii) that is less than twelve (12) months after the date on which the final payment of the deferred amount would have been made to the Participant absent deferral, the Participant shall receive the distribution thirty (30) days following the date of the Participant's Separation from Service.

(c)Except as otherwise permitted under IRS guidance, if a distribution is to be made upon the Separation from Service of a Key Employee, distribution may not be made before the date which is six months after the date of the Key Employee's Separation from Service (or, if earlier, the date of death of the Key Employee).  Any payments that would otherwise be made during this period of delay shall be paid in the seventh month following Separation from Service (or, if earlier, the month after the Key Employee's death).  For this purpose, "Key Employee" means an individual treated as a "specified employee" under Code section 409A(a)(2)(B)(i) as of his or her Separation from Service (i.e., a key employee (as defined under Code section 416(i) without regard to paragraph (5) thereof) of a corporation any stock of which is publicly traded on an established securities market or otherwise).  Key Employees shall be determined in accordance with Code section 409A, using a December 31 identification date.  A listing of Key Employees as of an identification date shall be effective for the 12-month period beginning on the April 1 following the identification date.

(d) Notwithstanding Section 6.1 or 6.2 or any election to the contrary, for purposes of Eligible Compensation earned during each separate quarterly period beginning after 2014, if a Participant Separates from Service during a separate quarterly period, the distribution of any deferred amount (and dividends thereon) attributable to such period will be paid in a cash lump sum within 30 days following the last day of the quarterly period, subject to Section 6.2(c) and in accordance with Treasury Regulation §1.409A-3(c).

6.3Distributions upon Death

(a)In the event a Participant dies prior to the distribution of his or her entire Account balance, the remaining Account balance shall be distributed to the Participant's beneficiary in accordance with Sections 6.1 and 6.2 above.

(b)A Participant shall designate his or her beneficiary prior to death in accordance with procedures established by the Plan Administrator.  If a Participant has not properly designated a beneficiary, or if no designated beneficiary is living on the date of any distribution, such amount shall be distributed to the Participant's estate.

 

 

(c)For purposes of determining the proper death beneficiary under this Plan, this Plan shall not be interpreted as preempting applicable state law regarding the ownership rights of Accounts upon a Participant's death.  For example, although this Plan states that upon a Participant's death, Account balances will be paid to his or her beneficiary, the personal representative will be obligated to pay any benefits owed to a spouse or otherwise as a result of any applicable community property laws.

7.Administration

The Plan Administrator shall be responsible for the operation and administration of the Plan and for carrying out the provisions hereof.  The Plan Administrator shall have the full authority and discretion to make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan and decide or resolve any and all questions, including interpretations of this Plan, as may arise in connection with this Plan.  Any such action taken by the Plan Administrator shall be final and conclusive on any party.  To the extent the Plan Administrator has been granted discretionary authority under the Plan, the Plan Administrator's prior exercise of such authority shall not obligate it to exercise its authority in a like fashion thereafter.  The Plan Administrator shall be entitled to rely conclusively upon all tables, valuations, certificates, opinions and reports furnished by any actuary, accountant, controller, counsel or other person employed or engaged by the Company with respect to the Plan.  The Plan Administrator may, from time to time, employ agents and delegate to such agents, including the HR Officer or other employees of the Company, such administrative duties as it sees fit, and the HR Officer is expressly delegated the authority to take all actions necessary to implement the Plan in accordance with the terms approved by the Board and the Plan Administrator.

8.Amendment and Termination

8.1Amendment or Termination.  The Company reserves the right to amend or terminate the Plan when, in the sole discretion of the Company, such amendment or termination is advisable, pursuant to a resolution or other action taken by the Board or the Plan Administrator, provided that the Board or Plan Administrator may delegate the authority to amend the Plan to the HR Officer from time to time.

8.2Effect of Amendment or Termination.  No amendment or termination of the Plan shall decrease the amounts credited to a Participant's Account as of such amendment or termination.  Upon termination of the Plan, Participants' Account balances shall be distributed in accordance with Sections 6.1 through 6.3, unless the Company determines in its sole discretion that all such amounts shall be distributed upon termination in accordance with the requirements under Code section 409A.

8.3Constructive Receipt Termination.  If amounts deferred under the Plan must be included in income under Code section 409A prior to the scheduled distribution of such amounts, distribution of such amount shall be made to Participants.

9.General Provisions

9.1Rights Unsecured.  The right of a Participant or his or her beneficiary to receive a distribution hereunder shall be an unsecured claim against the general assets of the Company, and neither the Participant nor his or her beneficiary shall have any rights in or against any amount credited to any Account or any other specific assets of the Company.  The Plan at all times shall be considered entirely unfunded for tax purposes.  Any funds set aside by the Company for the purpose of meeting its obligations under the Plan, including any amounts held by a trustee, shall continue for all purposes to be part of the general assets of the Company and shall be available to its general creditors in the event of the Company's bankruptcy or insolvency.  The Company's obligation under this Plan shall be that of an unfunded and unsecured promise to pay money in the future.

9.2Construction of Plan.  Nothing in this Plan shall be construed to give any Director any right to receive Eligible Compensation or any other type of compensation.  No Participant or beneficiary shall have any right to receive a distribution under the Plan except in accordance with the terms of the Plan.  Establishment of the Plan shall not be construed to give any Participant the right to be retained as a member of the Board.  Nothing contained in the Plan shall constitute a guarantee by the Company or any other person or entity that the assets of the Company will be sufficient to pay any benefits hereunder.  In the event any provision of the Plan shall be held invalid or illegal for any reason, any illegality or invalidity shall not affect the remaining parts of the Plan, but the Plan shall be construed and enforced as if the illegal or invalid provision had never been inserted.  Words in the masculine gender shall include the feminine and the singular shall include the plural, and vice versa, unless qualified by the context.  Any headings used herein are included for ease of reference only, and are not to be construed so as to alter the terms hereof.

9.3Nonalienation of Benefits.  This Plan inures to the benefit of and is binding upon the parties hereto and their successors, heirs and assigns; provided, however, that the amounts credited to a Participant's Account are not, 

 

 

except as provided in Section 9.4, subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, either voluntary or involuntary, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any right to any benefits payable hereunder, will be null and void and not binding on the Plan or the Company.

9.4Taxes.  The Company or other payor may withhold from a benefit payment under the Plan or a Participant's Eligible Compensation any federal, state, or local taxes required by law to be withheld with respect to a payment or accrual under the Plan, and shall report such payments and other Plan-related information to the appropriate governmental agencies as required under applicable law.

9.5Delivery of Shares.  The obligation of the Company to issue shares of Common Stock under this Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Plan Administrator.

9.6Participant's Cooperation.  The Participant shall cooperate with the Company by furnishing any and all information requested by the Plan Administrator in order to facilitate the payment of benefits hereunder.  If the Participant refuses to cooperate, the Company shall have no further obligation to the Participant under the Plan.

9.7Incapacity of Recipient.  If any person entitled to a distribution under the Plan is deemed by the Plan Administrator to be incapable of personally receiving and giving a valid receipt for such payment, then, unless and until a claim for such payment shall have been made by a duly appointed guardian or other legal representative of such person, the Plan Administrator may provide for such payment or any part thereof to be made to any other person or institution then contributing toward or providing for the care and maintenance of such person.  Any such payment shall be a payment for the account of such person and a complete discharge of any liability of the Company and the Plan with respect to the payment.

9.8Legally Binding.  In the event of any consolidation, merger, acquisition or reorganization, the obligations of the Company under this Plan shall continue and be binding on the Company and its successors or assigns.  The rights, privileges, benefits and obligations under the Plan are intended to be legal obligations of the Company and binding upon the Company, its successors and assigns.

9.9Unclaimed Benefits.  Each Participant shall keep the Plan Administrator informed of his or her current address and the current address of his or her designated beneficiary.  The Plan Administrator shall not be obligated to search for the whereabouts of any person if the location of a person is not made known to the Plan Administrator.

9.10Applicable Law and Venue.  The Plan shall be governed by the laws of the State of Washington. In the event the Company or any Participant (or beneficiary) initiates litigation related to this Plan, the venue for such action will be in King County, Washington.

9.11Waiver of Breach.  The waiver by the Company of any breach of any provision of the Plan by a Participant shall not operate or be construed as a waiver of any subsequent breach by the Participant.

9.12Notice.  Any notice or filing required or permitted to be given to the Plan Administrator under the Plan shall be sufficient if in writing and hand-delivered, or sent by first class mail to the principal office of the Company, directed to the attention of the Plan Administrator.  Such notice shall be deemed given as of the date of delivery, or, if delivery is made by mail, as of the date shown on the postmark.

9.13Attorneys' Fees and Costs.  In the event that a dispute regarding benefits arises between the Company or Plan Administrator and a Participant (or beneficiary) and such dispute is resolved through arbitration or litigation in court, the prevailing party(ies) shall be entitled to their reasonable attorneys' fees and costs incurred in such action.

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