Document:

EX-10.1

 

 

    EXHIBIT 10.1

 

    2008 STOCK
    PLAN

 

		
	
    1.  
	
    Purpose

 

    The Plan enables non-employee directors and professional and
    management employees who contribute significantly to the success
    of Eaton Corporation (the “Company”) to participate in
    its future prosperity and growth and to identify their interests
    with those of the shareholders. The purpose of the Plan is to
    provide long-term incentive through outstanding service to the
    Company and its shareholders and to assist in recruiting and
    retaining people of outstanding ability and initiative in
    non-employee director, professional and management positions.

 

		
	
    2.  
	
    Administration

 

    (A) Employee Awards

 

    With respect to employee awards, the Plan shall be administered
    by the Compensation and Organization Committee of the Board of
    Directors (the “Committee”).

 

    (B) Non-Employee Director Awards

 

    With respect to non-employee director awards, the Plan shall be
    administered by the Governance Committee of the Board of
    Directors.

 

    (C) Authority of Committees

 

    With respect only to those awards for which it has
    administrative responsibility, the Committee and the Governance
    Committee shall each have complete authority(except as otherwise
    provided herein)to interpret all provisions of the Plan and any
    award consistent with law, to determine the type and terms of
    awards consistent with the provisions of the Plan, to prescribe
    the form of instruments evidencing awards, to adopt, amend and
    rescind general and special rules and regulations for its
    administration, and to make all other determinations necessary
    or advisable for its administration of the Plan. The
    determinations of the each committee shall be final and
    conclusive. Each committee may act by resolution or in any other
    manner permitted by law.

 

    The Committee may delegate its authority to one or more officers
    of the Company (a “Delegate”) with respect to the
    granting of awards to employees who are not officers or
    directors of the Company who are subject to Section 16(b)
    of the Securities Exchange Act of 1934, as amended (Section
    “16b”).

 

		
	
    3.  
	
    Shares
    Available

 

    The aggregate of (a) the number of Eaton common shares
    (“shares”) delivered by the Company in payment and
    upon exercise of awards to employees and non-employee directors
    and (b) the number of shares subject to outstanding awards
    to employees and non-employee directors shall not exceed
    2.7 million at any one time, subject to adjustments as
    authorized herein. Any shares available for options or stock
    appreciation rights will be reduced by 2.47 for each performance
    share, performance share unit, restricted share, restricted
    share unit or other share-based awards denominated in full
    shares. To the extent that any award is forfeited, or any option
    or stock appreciation right terminates, expires or lapses
    without being exercised, the shares subject to such awards not
    delivered as a result thereof shall again be available for
    awards under the Plan. Shares tendered or withheld to pay the
    exercise price of a stock option or to pay tax withholding will
    count against the foregoing limitations and will not be added
    back to the shares available under the Plan. When a stock
    appreciation right that may be settled for shares is exercised,
    the number of shares subject to the grant agreement shall be
    counted against the number of shares available for issuance
    under the Plan as one (1) share for every share subject
    thereto, regardless of the number of shares used to settle the
    stock appreciation right upon exercise. Shares available for
    awards may consist, in whole or in part, of authorized and
    unissued shares or treasury shares.

 

    The maximum aggregate number of shares or share units underlying
    options or related to other awards that may be granted to any
    employee during any three consecutive calendar year period is
    1,200,000. In addition, no more than 5% of the total number of
    shares authorized for delivery under the Plan may be granted as
    performance shares, restricted shares, stock appreciation rights
    or other share-based awards (other than stock options) which
    vest within less than one year after the date of grant. With
    respect to such awards in excess of

    

    1

 

    5% of the total number of such authorized number of shares, the
    vesting period must exceed one year, with no more than one third
    of shares becoming vested at the end of each of the twelve-month
    periods following the date of grant.

 

    Awards may be made under the Plan at any time after approval of
    the Plan by shareholders at the 2008 annual meeting until
    December 31, 2018. Awards under the Plan shall be evidenced
    by a written agreement, contract, or other instrument or
    document, including an electronic communication, as may from
    time to time be designated by the Company (an “Award
    Agreement”).

 

		
	
    4.  
	
    Eligibility for
    Awards

 

    Any salaried employee (including officers) of the Company or any
    of its subsidiaries occupying a professional or management
    position may be granted an award. The Committee (or a Delegate)
    (a) will designate employees to whom grants are to be made,
    (b) will specify the number of options, stock appreciation
    rights, performance shares, performance share units, restricted
    shares, restricted share units or other share-based awards
    subject to each grant, and (c) subject to
    Section 5(B), will specify the price of the award, if
    applicable. Non-employee directors are eligible to receive
    restricted shares as provided under Section 6.

 

		
	
    5.  
	
    Stock
    Options

 

    (A) Grants.

 

    The Committee may grant to eligible employees (i) options
    which are intended to qualify as incentive stock options
    (“Incentive Stock Options”) under the Internal Revenue
    Code, or (ii) options which are not intended to qualify as
    Incentive Stock Options. Each option will give the employee the
    right to purchase a designated number of shares. The aggregate
    fair market value (at the time of grant) of shares for Incentive
    Stock Options under all plans of the Company which become
    initially exercisable by an employee during any calendar year
    shall not exceed $100,000 (or such other amount as may be
    provided by the Internal Revenue Code or the regulations
    thereunder).

 

    (B) Exercise.

 

    Each option shall be exercisable on such date or dates, during
    such period and for such number of shares, as shall be
    determined by the Committee on the date of grant and set forth
    in the applicable Award Agreement; provided, however, grants to
    employees subject to 16b shall not be exercisable for at least
    six months after those options are granted. The Committee may,
    in its sole discretion, accelerate or extend (but not beyond the
    ten-year term of the option) the times when an option may be
    exercised and the Management Compensation Committee (comprised
    of Company officers) may do likewise for employees who are not
    subject to Section 16b.

 

    (C) Price.

 

    Each Award Agreement for stock options shall state the number of
    shares to which it pertains and the option price. The option
    price shall be the fair market value of the shares subject to
    the option on the date of grant. The fair market value of a
    share shall be the closing price of a share as quoted on the New
    York Stock Exchange, unless the Committee specifies the use of a
    different method to determine the fair market value. In no event
    may any option granted under the Plan be amended, other than
    pursuant to Section 10, to decrease the exercise price
    thereof, be cancelled in conjunction with the grant of any new
    option with a lower exercise price, or otherwise be subject to
    any action that would be treated, for accounting purposes, as a
    “repricing” of such option, unless such amendment,
    cancellation or action is approved by the Company’s
    shareholders.

 

    (D) Payment.

 

    The Committee shall establish in the applicable Award Agreement
    the time or times when an option may be exercised in whole or in
    part, and the method or methods by which, and the form or forms,
    including, without limitation, cash, shares or other awards, or
    any combination thereof, having a fair market value on the
    exercise date equal to the exercise price in which payment of
    the exercise price may be made. The Committee shall determine
    acceptable methods of tendering shares or other consideration.

 

		
	
    6.  
	
    Non-employee
    Director Restricted Shares

 

    Subject to approval of the Plan by shareholders at the 2008
    annual meeting, each person who on the grant date (as defined
    below in this Section 6) is serving as a non-employee
    director automatically shall be granted a

    

    2

 

    number of restricted shares equal to the quotient resulting from
    dividing (i) the annual retainer in effect on the grant
    date, by (ii) the closing price of a share on the New York
    Stock Exchange on the Monday immediately prior to the grant date
    or if that date is not a trading day on the New York Stock
    Exchange, the trading day immediately preceding that Monday. The
    grant date is the fourth Wednesday of each January, beginning
    with January of 2009. Notwithstanding anything to the contrary
    herein, no non-employee director shall receive any award under
    the Plan for a particular year if that director receives such a
    grant under any other stock plan of the Company. Restricted
    shares are actual shares issued to the non-employee directors
    which are subject to the terms and conditions set forth in the
    Award Agreement as approved by the Governance Committee.

 

		
	
    7.  
	
    Performance
    Awards

 

    (A) Grants.

 

    The Committee may grant performance shares or performance share
    units to any eligible employee for no cash consideration, if
    permitted by applicable law, or for such consideration as may be
    determined by the Committee and specified in the grant. The
    Committee shall establish award periods and shall establish in
    writing within the first 90 days of each award period the number
    of performance shares or units to be earned and the Company
    performance objectives (as defined below) to be met. A
    performance share unit is equal in value to one share and
    subject to vesting on the basis of the achievement of specified
    performance objectives. Upon vesting, performance share units
    will be settled by delivery of shares to the holder of the units
    equal to the number of vested performance share units, less a
    sufficient number of shares to satisfy tax withholding
    requirements.

 

    No grantee may receive a long-term incentive award in any
    performance period of more than 200,000 share equivalent
    units, subject to adjustment pursuant to Section 10.

 

    The Award Agreement shall specify if the grantee shall be
    entitled to receive current or deferred payments of cash in
    respect of vested performance units corresponding to the
    dividends payable on shares.

 

    (B) Performance Objectives.

 

    (1) The performance objectives for performance share or
    performance share unit grants shall be set forth in the related
    Award Agreement and shall consist of objective tests based on
    one or more of the following: the Company’s earnings, cash
    flow, cash flow return on gross capital, revenues, financial
    return ratios, market performance, shareholder return
    and/or
    value, operating profits, net profits, earnings per share,
    operating earnings per share, profit returns and margins, share
    price, working capital, and changes between years or periods, or
    returns over years or periods that are determined with respect
    to any of the above-listed performance criteria.

 

    (2) The performance period may extend over two to five
    calendar years, and may overlap one another, although no two
    performance periods may consist solely of the same calendar
    years. Performance Objectives may be measured solely on a
    corporate, subsidiary or business unit basis, or a combination
    thereof. Further, Performance Objectives may reflect absolute
    entity performance or a relative comparison of entity
    performance to the performance of a peer group of entities or
    other external measure of the selected Performance Objectives.

 

    (3) When the Performance Objectives for an award period are
    established, the formula for any such award may include or
    exclude items to measure specific objectives, such as losses
    from discontinued operations, extraordinary gains or losses, the
    cumulative effect of accounting changes, acquisitions or
    divestitures, foreign exchange impacts and any unusual,
    nonrecurring gain or loss, and will be based on accounting rules
    and related Company accounting policies and practices in effect
    on the date of the award.

 

    (4) After performance shares or units have been granted and
    performance objectives have been established, the initial
    performance share or unit target award may be increased or
    decreased based only upon the performance level achieved within
    a performance period.

 

		
	
    8.  
	
    Other
    Awards

 

    In limited circumstances where the Committee determines that the
    use of stock options is inadvisable for tax or other regulatory
    reasons, it may grant stock appreciation rights to eligible
    employees. Stock appreciation rights entitle the holder, upon
    exercise, to receive a number of shares or cash, as the
    Committee may determine, equal to the increase in fair market
    value of a number of shares designated by such rights from the
    date of grant to the

    

    3

 

    date of exercise. The number of shares subject to a stock
    appreciation right shall be counted against the individual limit
    on the maximum number of shares that may be awarded to any
    employee during any three consecutive calendar year period, and
    against the maximum number of shares which may be delivered
    under the Plan. The exercise price per share of a stock
    appreciation right shall not be less than the fair market value
    of a share on the grant date and the term of a stock
    appreciation right may be no longer than ten years. The fair
    market value of a share shall be the closing price of a share as
    quoted on the New York Stock Exchange, unless the Committee
    specifies the use of a different method to determine fair market
    value. In no event may any stock appreciation right granted
    under the Plan be amended, other than pursuant to
    Section 10, to decrease the exercise price thereof, be
    cancelled in conjunction with the grant of any new stock
    appreciation right with a lower exercise price, or otherwise be
    subject to any action that would be treated, for accounting
    purposes, as a “repricing” of such stock appreciation
    right, unless such amendment, cancellation or action is approved
    by the Company’s shareholders.

 

    The Committee may grant other share-based awards to any eligible
    employee for no cash consideration, if permitted by applicable
    law, or for such consideration as may be determined by the
    Committee and specified in the grant. Such grants may include
    restricted shares or restricted share units. The Committee may
    specify such criteria or periods for payment as it shall
    determine and the extent to which such criteria or periods have
    been met shall be conclusively determined by the Committee and
    set forth in the Award Agreement. Other share-based grants may
    be paid in shares or other consideration related to shares, as
    specified by the grant, and shall have such terms and conditions
    as shall be determined by the Committee and set forth in the
    Award Agreement.

 

		
	
    9.  
	
    Transfers

 

    Except as otherwise provided by the Committee, awards under the
    Plan are not transferable other than by will or the laws of
    descent and distribution. A transferred award may be exercised
    by the transferee only to the extent that the grantee would have
    been entitled to exercise the award had the award not been
    transferred.

 

    Notwithstanding anything herein to the contrary, the transfer of
    Incentive Stock Options shall be limited as required by the
    Internal Revenue Code and applicable regulations.

 

		
	
    10.  
	
    Adjustments

 

    In the event of a reorganization, merger, consolidation,
    reclassification, recapitalization, combination or exchange of
    shares, stock split, stock dividend, rights offering or similar
    event affecting shares of the Company, the following shall be
    equitably adjusted (a) the number and class of shares
    (i) reserved under the Plan, (ii) for which awards may
    be granted to an individual, and (iii) covered by
    outstanding awards denominated in shares or share units,
    (b) the prices relating to outstanding awards, and
    (c) the appropriate fair market value and other price
    determinations for such awards.

 

		
	
    11.  
	
    Qualified
    Performance-Based Awards

 

    (A) The provisions of the Plan are intended to ensure that
    all options, performance shares and performance share units
    granted hereunder to any individual who is or may be a
    “covered employee” (within the meaning of
    Section 162(m)(3) of the Internal Revenue Code) qualify for
    the Section 162(m) exception (the “Section 162(m)
    Exception”) for performance-based compensation (a
    “Qualified Performance-Based Award”), and all of the
    awards specified in this Section 11(A) and the Plan shall
    be interpreted and operated consistent with that intention.

 

    (B) Each Qualified Performance-Based Award (other than an
    option or stock appreciation right) shall be earned, vested and
    payable (as applicable) only upon the achievement of one or more
    Performance Objectives, together with the satisfaction of any
    other conditions, such as continued employment, as the Committee
    may determine to be appropriate. Qualified Performance-Based
    Awards may not be amended, nor may the Committee exercise
    discretionary authority in any manner that would cause the
    Qualified Performance-Based Award to cease to qualify for the
    Section 162(m) Exception. Awards shall be contingent on
    continued employment by the Company during each performance
    period; provided, however, that this requirement will not apply
    in the event of termination of employment by reason of death or
    disability (as determined by the Committee). In the event of
    termination of employment of a participant for these reasons
    during any incomplete performance periods, awards for such
    performance periods shall be prorated for the amount of service
    by the participant during the

    

    4

 

    performance period. The prorated awards shall be payable to the
    participant (or to his or her estate) at the same time as awards
    for such performance periods are paid to the other participants
    and shall be subject to the same requirements for attainment of
    the specified Performance Objectives as apply to such other
    participants’ awards.

 

    (C) The Committee shall certify in writing as to the
    measurement of performance by the Company and the business units
    relative to Performance Objectives and the resulting earned
    performance awards. The Committee shall rely on such financial
    information and other materials as it deems necessary and
    appropriate to enable it to certify to the percentage of
    achievement of Performance Objectives. The Committee shall make
    its determination not later than March 15 following the end
    of the performance measurement period.

 

		
	
    12.  
	
    General
    Provisions

 

    (A) Awards granted under the Plan are subject to the
    Company’s policy, adopted by the Board of Directors, that
    provides that, if the Board determines that an executive engaged
    in any fraud, misconduct or other bad-faith action that,
    directly or indirectly, caused or partially caused the need for
    a material accounting restatement for any period as to which a
    performance-based award was paid or credited to the executive,
    the performance-based award is subject to reduction,
    cancellation or reimbursement at the discretion of the Board.

 

    (B) The Company shall have the right to deduct from any
    cash payment made under the Plan any taxes required by law to be
    withheld. It shall be a condition to the obligation of the
    Company to deliver shares that the participant pay the Company
    such amount as it may request for the purpose of satisfying any
    such tax liability. Any award under the Plan may provide that
    the participant may elect, in accordance with any Committee
    regulations, to pay the amount of such withholding taxes in
    shares.

 

    (C) No person, estate or other entity shall have any of the
    rights of a shareholder with reference to shares subject to an
    award until a certificate or certificates for the shares have
    been delivered to that person, estate or other entity. The Plan
    shall not confer upon any non-employee director or employee any
    right to continue in that capacity.

 

    (D) The Plan and all determinations made and actions taken
    pursuant hereto, to the extent not governed by the laws of the
    United States, shall be governed by the laws of Ohio.

 

		
	
    13.  
	
    Amendment and
    Termination

 

    The Board of Directors of the Company may alter, amend or
    terminate the Plan from time to time, except that the Plan may
    not be materially amended without shareholder approval if
    shareholder approval is required by law, regulation or an
    applicable stock exchange; provided that the Plan may not be
    amended without shareholder approval to (i) increase the
    aggregate number of shares which may be issued under the
    Plan,(ii) increase the maximum number of shares which may be
    granted to any employee, or (iii) grant options or stock
    appreciation rights at a purchase price below fair market value
    on the date of grant.

 

		
	
    14.  
	
    Effective and
    Termination Dates

 

    The Plan will become effective if and when approved by
    shareholders holding a majority of the Company’s
    outstanding common shares entitled to vote at the 2008 annual
    meeting of shareholders. No new awards shall be granted to any
    employee or non-employee Director under any other previously
    approved Company stock plan after the Plan becomes effective.

 

    No awards shall be granted under the Plan after
    December 31, 2018. Awards granted before that date shall
    remain valid thereafter in accordance with their terms.

 

    

    5EX-10.2

 

    EXHIBIT 10.2

 

    SENIOR EXECUTIVE
    INCENTIVE COMPENSATION PLAN

 

    1. Purpose. This document sets forth the annual incentive
    plan applicable to employees of Eaton Corporation (the
    “Company”) who are executive officers of the Company,
    including those whose annual incentive compensation for any
    taxable year of the Company commencing on or after
    January 1, 2008 the Committee (hereafter defined)
    anticipates would not be deductible due to Section 162(m)
    of the Internal Revenue Code of 1986, as amended (the
    “Code”). This plan is hereinafter referred to as the
    “Plan.”

 

    The Plan is designed to promote the profitable growth of the
    Company by:

 

    a. Providing rewards for achieving specified performance
    goals.

 

    b. Recognizing corporate, business unit and individual
    performance and achievement.

 

    c. Attracting, motivating and retaining superior executive
    talent.

 

    2. Administration. The Plan shall be administered by the
    Compensation and Organization Committee of the Board of
    Directors (the “Board”), or by any other committee of
    the Board to whom this authority is delegated by the Board (the
    “Committee”). The Committee shall be comprised
    exclusively of three or more directors who are not employees and
    who are “outside directors” within the meaning of
    Section 162(m)(4)(C) of the Code. The Committee will
    approve the goals, participation, target bonus awards, actual
    bonus awards, timing of payment and other actions necessary to
    the administration of the Plan. Any determination by the
    Committee pursuant to the Plan shall be final, binding and
    conclusive on all employees and participants and anyone claiming
    under or through any of them. The provisions of the Plan are
    intended to ensure that all awards granted hereunder to any
    individual who is or may be a “covered employee”
    (within the meaning of Section 162(m)(3) of the Code)
    qualify for the Section 162(m) exception for
    performance-based compensation, and all awards and the Plan
    shall be interpreted and operated consistent with that intention.

 

    3. Participation. The participant group will consist of the
    Chief Executive Officer and any Officer reporting directly to
    the Chief Executive Officer. An employee participating in the
    Plan shall not participate in the Company’s Executive
    Incentive Compensation Plan.

 

    4. Establishment of Incentive Opportunities.

 

    a. On or before March 30 of each year, the Committee shall
    establish in writing performance goals (the “Corporate
    Performance Goals”) to be used in determining an aggregate
    amount to be distributed under the Plan (the “Aggregate
    Incentive Opportunity”). The Aggregate Incentive
    Opportunity will be a dollar amount calculated by reference to
    specified levels of, growth in, or ratios involving, the
    Corporate Performance Goals, which may include any one or more
    of the following: the Company’s earnings per share,
    operating earnings per share, total return to shareholders, cash
    flow return, cash flow return on gross capital, net income, net
    income before tax, return on equity, or return on assets. The
    Corporate Performance Goals may be described in terms of
    Company-wide objectives or objectives that are related to the
    performance of any subsidiary, division, department, or region
    of, or function in, the Company. The Corporate Performance Goals
    may be made relative to the performance of other corporations.

 

    b. On or before March 30 of each year, the Committee will
    establish in writing a percentage share of the Aggregate
    Incentive Opportunity to each participant (the “Individual
    Incentive Opportunity”). The sum of all Individual
    Incentive Opportunities will not exceed 100% of the Aggregate
    Incentive Opportunity. No participant will be assigned an
    Individual Incentive Opportunity greater than $7,500,000.

 

    c. The method to determine the Aggregate and Individual
    Incentive Opportunities shall be stated in terms of objective
    formulas that preclude discretion to increase the amount of the
    award that would otherwise be due upon attainment of the goals.
    No  provision of the Plan shall preclude the Committee from
    exercising negative discretion to reduce any award hereunder.

 

    d. A participant’s Individual Incentive Opportunity in
    any year is the maximum amount that the participant may receive
    under the Plan in that year. Whether or not a participant will
    receive all or any portion of his or her Individual Incentive
    Opportunity will be based on the achievement of corporate and
    business unit financial and strategic objectives established for
    the year (which may be based on the

    

    1

 

    Corporate Performance Goals selected for the year, any of the
    other performance goals listed above) and on the achievement of
    individual goals (collectively, the “Individual Performance
    Goals”).

 

    5. Award Determination.

 

    a. At the end of each year, the Committee will determine
    the Aggregate Incentive Opportunity based on the results of the
    Corporate Performance Goals. The Committee will certify in
    writing whether and to what extent the goals have been achieved.

 

    b. At the end of each calendar year, the Committee will
    assess each participant’s performance against the
    Individual Performance Goals established for each participant.
    Based on this assessment, the Committee will determine whether
    or not to award the entire Individual Incentive Opportunity or a
    lesser amount. In no event will the Individual Incentive
    Opportunity be greater than the portion of the Aggregate
    Incentive Opportunity allocated to the participant.

 

    c. Awards shall be paid under the Plan for any year solely
    on account of the attainment of the performance goals
    established by the Committee for the entire year. Awards shall
    also be contingent on continued employment by the Company during
    the entire year. Exceptions to the requirement of continued
    employment will apply in the event of termination of employment
    by reason of death or disability (as determined by the
    Committee). In the event of termination of employment for these
    reasons, awards for any incomplete performance year shall be
    prorated for the amount of service by the participant during the
    performance year and shall be payable to the participant (or his
    or her estate) at the same time as awards for such performance
    year are paid to the other participants and shall be subject to
    the same requirements for achievement of the specified
    performance goals as apply to such other participants’
    awards.

 

    6. Bonus Payments. Awards under the Plan will be paid
    annually in cash not later than March 15 of the year following
    the performance year, provided that awards or portions thereof
    may be deferred under the Company’s Deferred Incentive
    Compensation Plan II. Awards granted under the Plan are subject
    to the Company’s policy, adopted by the Board, that
    provides that, if the Board determines that an executive engaged
    in any fraud, misconduct or other bad-faith action that,
    directly or indirectly, caused or partially caused the need for
    a material accounting restatement for any period as to which a
    performance-based award was paid or credited to the executive,
    the performance-based award is subject to reduction,
    cancellation or reimbursement at the discretion of the Board.

 

    7. Shareholder Approval and Committee Certification
    Contingencies; Payment of Awards. Payment of any awards under
    the Plan shall be contingent upon the affirmative vote of the
    shareholders of at least a majority of the votes cast (including
    abstentions) at the annual meeting of the shareholders held in
    2008. Unless and until such shareholder approval is obtained, no
    award shall be paid pursuant to the Plan. Subject to the
    provisions of Paragraph 5 above, payment of any award under
    the Plan shall also be contingent upon the Committee’s
    certifying in writing that the performance goals and any other
    material terms applicable to such award were in fact satisfied,
    in accordance with applicable regulations under
    Section 162(m) of the Code. Unless and until the Committee
    so certifies, such award shall not be paid. Unless the Committee
    provides otherwise, (a) earned awards shall be paid
    promptly following such certification, and (b) such payment
    shall be made in cash (subject to any payroll tax withholding
    the Company may determine applies).

 

    To the extent necessary for purposes of Section 162(m) of
    the Code, the Plan shall be resubmitted to shareholders for
    their reapproval in 2013 with respect to awards payable for the
    tax year commencing on and after January 1, 2014.

 

    8. If the Company’s shareholders do not approve the
    Plan, payments that would have been made pursuant to awards that
    were made contingent upon obtaining such approval will not be
    made. No provision of the Plan shall prevent the Committee from
    making any payments or granting any awards outside of the Plan
    whether or not such payments or awards qualify for tax
    deductibility under Section 162(m) of the Code.

    

    2

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