Document:

EX-10.2

 

Exhibit 10.2

FORM OF

AMENDED AND RESTATED 1999 STOCK INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

     This RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), made and entered into as of
February ___, 2007 by and between                                          (the “Participant”) and Martha Stewart Living
Omnimedia, Inc., a Delaware corporation (the “Company”), sets forth the terms and conditions of an
Award of Restricted Stock Units granted in connection with the Company’s Bonus Conversion Policy,
as adopted by the Compensation Committee of the Company’s Board of Directors (the “Committee”) on
February 22, 2007 (the “Bonus Conversion Policy”) and pursuant to Section 8 of the Company’s
Amended and Restated 1999 Stock Incentive Plan (the “Plan”). Any capitalized terms used but not
defined herein shall have the meaning prescribed in the Plan.

     1. Grant and Vesting of Restricted Stock Units.

(a) Subject to the provisions of this Agreement and to the provisions of each of the
Bonus Conversion Policy and the Plan, the Company hereby grants to the Participant
                     restricted stock units (the “Stock Units”), each of which represents the
right to receive, subject to the conditions set forth herein, one share of Class A
common stock of the Company, par value $0.01 per share (“Common Stock”). Such number
of Stock Units represents 115% of $                    , the value of the cash bonus awarded to
the Participant that such Participant has elected to take in the form of Stock Units
(the “Base Cash Value”), and has been calculated based on a per share value of
$                    , which represents the closing price as reported on the New York Stock
Exchange of a share of Common Stock (the “Per Share Price”) on the last business day
immediately preceding the later of (a) the date of adoption by the Committee of the
Bonus Conversion Policy and (b) the date on which the Committee determined the actual
amount of cash bonus to be awarded to the Participant under the Company’s Annual
Incentive Plan for performance in the prior fiscal year (such later date, the
“Determination Date”). No Common Stock will be issued unless and until the Stock
Units vest pursuant to this Agreement.

(b) Subject to the terms and conditions of this Agreement, the Stock Units shall vest
and shall no longer be subject to any restrictions hereunder (i) with respect to
thirty-three percent (33%) of the Stock Units, on the first anniversary of the
Determination Date, (ii) with respect to thirty-three percent (33%) of the Stock
Units, on the second anniversary of the Determination Date and (iii) with respect to
thirty-four percent (34%) of the Stock Units, on the third anniversary of the
Determination Date (such three year period, the “Restriction Period”).
Notwithstanding the foregoing, all the Stock Units shall immediately vest and no
longer be subject to restriction if the Participant’s employment with the Company is
terminated during the Restriction Period due to death or Disability, or pursuant to
the terms of any arrangement between the Participant and the Company, if any. Except
as provided in the preceding sentence, in the event that the employment of the
Participant with the Company shall terminate during the Restriction Period,

 

 

Stock Units representing that number of shares with an aggregate value, based on the
Per Share Price, equal to (i) 100% of the Base Cash Value, if the termination occurs
on or prior to the first anniversary of the Determination Date, (ii) 67% of the Base
Cash Value, if the termination occurs after the first anniversary but on or prior to
the second anniversary of the Determination Date, and (iii) 34% of the Base Cash
Value, if the termination occurs after the second anniversary but on or prior to the
third anniversary of the Determination Date shall vest, and the remainder of the
unvested Stock Units shall be forfeited effective upon termination. For purposes of
this Agreement, employment with the Company shall include employment with the
Company’s affiliates and its successors.

(c) Upon the vesting of any Stock Units, the Common Stock underlying such Stock Unit
will be delivered to the Participant (or, in the case of the Participant’s death, the
Participant’s executor) pursuant to Paragraph 2 hereof. Nothing in this Agreement
shall confer upon the Participant any right to continue in the employ of the Company
or any of its affiliates or interfere in any way with the right of the Company or any
such affiliate to terminate the Participant’s employment at any time.

     2. Issuance of Shares.

     Subject to Paragraph 8 (pertaining to the withholding of taxes), as soon as practicable after
the Stock Units have vested, the Company shall issue (or cause to be delivered) to the Participant
(or, in the case of the Participant’s death, the Participant’s executor) one or more stock
certificates in respect of the Common Stock underlying such vested Stock Units. Notwithstanding
the foregoing:

     (i) if the Participant is a “key employee” within the meaning of Code section 409A and
            shares of Common Stock would otherwise be delivered to the Participant on account of the
termination of the Participant’s employment with the Company and its affiliates, then such
            shares will not be delivered to the Participant until six months (or such lesser period as
may be permitted by Code section 409A) after such termination of employment to the extent
necessary to avoid the imposition of the penalty under Code section 409A; and

     (ii) if the shares of Common Stock relating to the vested Stock Units would otherwise
be delivered during a period in which the shares are listed on an established national or
regional stock exchange or are publicly traded in an established securities market, and the
Participant is (A) subject to a lock-up agreement restricting the Participant’s ability to
sell shares in the open market, (B) restricted from selling shares in the open market
because the Participant is not then eligible to sell shares under the Company’s insider
trading or similar plan or policy as then in effect (whether because a trading “window” is
not open or the Participant is otherwise restricted from trading) or (C) restricted from
selling shares pursuant to an effective registration statement because of an applicable
blackout thereunder, delivery of the shares related to the vested Stock Units will be
delayed until no earlier than the first date on which the Participant is no longer
prohibited from selling shares due to a lock-up agreement, insider trading plan or

 

 

policy restriction or applicable blackout, but in no event later than the end of the
calendar year in which the shares related to such vested Stock Units would otherwise have
been delivered.

     3. Nontransferability of the Restricted Stock Units.

     Stock Units shall not be transferable by the Participant by means of sale, assignment,
exchange, encumbrance, pledge or otherwise.

     4. Rights as a Stockholder.

     The Participant will have no rights as a stockholder of the Company as a result of the
ownership of Stock Units, including, without limitation, the right to vote or to consent to any
action of stockholders or to receive any notice of meetings of stockholders.

     5. Adjustment in the Event of Change in Stock.

     In the event of a stock split or a corporate transaction such as a merger, consolidation,
separation, spin-off (or other distribution of stock or property of the Company), any
reorganization or any partial or complete liquidation of the Company, or any other similar change
in capitalization or event for which the Committee believes an adjustment is appropriate, the
number of Stock Units and the number and kind of shares underlying such Stock Units shall be
equitably adjusted by the Committee as it may deem appropriate in its sole discretion. The
determination of the Committee regarding any such adjustment will be final and conclusive.

     6. Payment of Transfer Taxes, Fees and Other Expenses.

     The Company agrees to pay any and all original issue taxes and stock transfer taxes that may
be imposed on the issuance of shares received by an Participant in connection with the Stock Units
granted hereby, together with any and all other fees and expenses necessarily incurred by the
Company in connection therewith.

     7. Other Restrictions.

     The Stock Units shall be subject to the requirement that, if at any time the Committee shall
determine that (i) the listing, registration or qualification of the shares of Common Stock subject
or related thereto upon any securities exchange or under any state or federal law, or (ii) the
consent or approval of any government regulatory body, or (iii) an agreement by the Participant
with respect to the disposition of shares of Common Stock is necessary or desirable as a condition
of, or in connection with, the delivery or purchase of shares pursuant thereto, then in any such
event, the issuance of shares of Common Stock that underlie the Stock Units granted hereby shall
not be effective unless such listing, registration, qualification, consent, approval or agreement
shall have been effected or obtained free of any conditions not acceptable to the Committee.

 

 

     8. Taxes and Withholding.

     With respect to any amount that becomes includible in the gross income of the Participant for
federal, state or local income tax purposes as a result of the vesting of the shares of Common
Stock underlying the Stock Units, the Company shall deduct from the shares of Common Stock
otherwise payable to Participant the number of shares necessary to pay any such taxes.

     9. Notices.

     All notices and other communications under this Agreement shall be in writing and shall be
given by hand delivery to the other party or overnight courier, or registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:

(a) if to the Participant, to the address last provided by the Participant to the
Company’s Human Resources Department;

(b) if to the Company:

Martha Stewart Living Omnimedia, Inc.

11 West 42nd Street

New York, New York 10036

Attention: General Counsel &

VP, Senior Director, Human Resources

     10. Laws Applicable to Construction.

     The interpretation, performance and enforcement of this Agreement shall be governed by the
laws of the State of Delaware without reference to principles of conflict of laws, as applied to
contracts executed in and performed wholly within the State of Delaware.

     11. Successors, Assigns and Transferees.

     This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and each
of their respective successors, assigns and transferees; provided, that the Participant may
not assign to any person any of such Participant’s rights hereunder other than in accordance with
the provisions hereof.

     12. Administration.

     The authority to manage and control the operation and administration of this Agreement shall
be vested in the Compensation Committee of the Board or such other committee of the Board as the
Board may from time to time designate, and the Committee shall have all powers with respect to this
Agreement as it has with respect to the Plan. Any interpretation of the Agreement by the Committee
and any decision made by them with respect to the Agreement is final and binding on all persons.

     13. Incorporation of Plan; Plan Governs.

     Notwithstanding anything in this Agreement to the contrary, all terms and conditions of the
Plan and of the Bonus Conversion Policy are incorporated herein and made part hereof as if stated
herein. This Agreement shall be subject to the terms of the Plan and of the Bonus

 

 

Conversion Policy and if there is any conflict between the terms and conditions of the Plan or
the Bonus Conversion Policy and this Agreement, the terms and conditions of the Plan or Bonus
Conversion Policy, as interpreted by the Committee, shall govern. The Participant may obtain a
copy of the Plan and the Bonus Conversion Policy from the office of the VP, Senior Director, Human
Resources of the Company, and the Participant’s execution of this Agreement constitutes the
Participant’s acknowledgment, receipt, understanding and acceptance of all the terms of conditions
contained in the Plan and the Bonus Conversion Policy. This Agreement is subject to all
interpretations, amendments, rules and regulations promulgated by the Committee from time to time
pursuant to the Plan or the Bonus Conversion Policy.

     14. Not an Employment Contract.

     Neither this Agreement nor any Stock Unit shall confer on the Participant any right with
respect to continuance of employment or other service with the Company or any Subsidiary, nor shall
they interfere in any way with any right the Company or any Subsidiary would otherwise have to
terminate or modify the terms of the Participant’s employment or other service at any time.

     15. Integration.

     This Agreement and the other documents referred to herein, including without limitation the
Plan and the Bonus Conversion Policy, or delivered pursuant hereto, which form a part hereof
contain the entire understanding of the parties with respect to their subject matter. There are no
restrictions, agreements, promises, representations, warranties, covenants or undertakings with
respect to the subject matter hereof other than those expressly set forth herein. This Agreement,
including without limitation the Plan and the Bonus Conversion Policy, supersedes all prior
agreements and understandings between the parties with respect to its subject matter.

     16. Counterparts.

     This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original, but which together constitute one and the same instrument. Notwithstanding the
foregoing, any duly authorized officer of the Company may execute this Agreement by providing an
appropriate facsimile signature, and any counterpart or amendment hereto containing such facsimile
signature shall for all purposes be deemed an original instrument duly executed by the Company.

     17. Participant Acknowledgment.

     The Participant hereby acknowledges receipt of a copy of the Plan, the Bonus Conversion Policy
and the Prospectus. The Participant further acknowledges that all decisions, determinations and
interpretations of the Committee in respect of the Plan, the Bonus Conversion Policy, this
Agreement and the Stock Units granted hereby shall be final and conclusive.

 

 

     IN WITNESS WHEREOF, the Participant has executed this Agreement on such Participant’s own
behalf, thereby representing that such Participant has carefully read and understands this
Agreement and the Plan and the Bonus Conversion Policy as of the day and year first written above,
and the Company has caused this Agreement to be executed in its name and on its behalf, all as of
the date first written above.

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	 	 
	 
	 	MARTHA STEWART LIVING OMNIMEDIA, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Laura A. Schmidt 	 
	 	 	Title:  	VP, Senior Director, Human ResourcesEX-10.20

 

Exhibit 10.20

EXHIBIT A

Foster Wheeler Annual Executive

Short-term Incentive Plan

(As Amended and Restated effective January 1, 2006)

 

 

Table of Contents

	 	 	 	 	 
	Article 1.
	 	Introduction	 	1
	    1.01
	 	Establishment and Applicability of Plan	 	1
	    1.02
	 	Effective Date and Term	 	1
	    1.03
	 	Governing Provisions	 	1
	 
	Article 2.
	 	Definitions	 	1
	    2.01
	 	Base Pay	 	1
	    2.02
	 	Board	 	2
	    2.03
	 	CEO	 	2
	    2.04
	 	Committee	 	2
	    2.05
	 	Company	 	2
	    2.06
	 	Disabled	 	2
	    2.07
	 	Leave of Absence	 	2
	    2.08
	 	Participant	 	2
	    2.09
	 	Plan	 	2
	    2.10
	 	Senior Executive	 	2
	    2.11
	 	Short-Term Incentive Target Percentage Opportunity	 	3
	 
	Article 3.
	 	Participation and Eligibility	 	3
	    3.01
	 	Eligibility for Participation	 	3
	    3.02
	 	Partial Year Eligibility	 	3
	 
	Article 4.
	 	Annual Incentive Award	 	3
	    4.01
	 	Annual Incentive Award	 	3
	 
	    4.02
	 	Approval Process	 	4
	 
	Article 5.
	 	Plan Administration	 	4
	    5.01
	 	Committee	 	4
	    5.02
	 	Guarantees	 	4
	    5.03
	 	Governance	 	4
	    5.04
	 	Repayment of Overpayments	 	4
	 
	Article 6.
	 	Miscellaneous	 	5
	    6.01
	 	Plan Changes	 	5
	    6.02
	 	Participant Covenants	 	5
	    6.03
	 	Assignments	 	5
	    6.04
	 	No Contract	 	5
	    6.05
	 	Superseding Provisions	 	5
	    6.06
	 	Prevailing Law	 	6
	    6.07
	 	Indemnification of Committee and Board	 	6
	    6.08
	 	No Prior Right of Award	 	6

i

 

FOSTER WHEELER ANNUAL EXECUTIVE

SHORT-TERM INCENTIVE PLAN

(As Amended and Restated Effective January 1, 2006)

Article 1.

Introduction

	1.01	 	Establishment and Applicability of Plan.
	 
	 	 	Foster Wheeler Ltd. (the “Company”) established the Foster Wheeler Annual Executive
Short-Term Incentive Plan (the “Plan”) effective January 1, 2002. The objectives of the
Plan are to provide the Company with a vehicle through which it may award short-term
incentive compensation to eligible Senior Executives (as defined in Section 2.10 of this
Plan) of the Company as determined by the Chairman, President and Chief Executive Officer of
the Company (the “CEO”) and the Compensation Committee (the “Committee”) of the Board of
Directors of the Company (the “Board”).
	 
	 	 	Only Senior Executives are eligible for a short-term incentive compensation award under this
Plan. Management retains its usual authority and discretion regarding short-term incentive
compensation for other officers, employees, and consultants of the Company and its
affiliates.
	 
	1.02	 	Effective Date and Term.
	 
	 	 	The Plan originally became effective January 1, 2002. Unless superseded or terminated, the
Plan, as amended from time to time, will continue in effect during subsequent calendar
years. This plan is a successor plan to and supersedes in all respects the incentive
compensation provisions of the “Executive Compensation Plan” of the Company (which Executive
Compensation Plan was first approved by the Board on January 1, 1988 and amended from time
to time until the adoption of the present Plan).
	 
	1.03	 	Governing Provisions.
	 
	 	 	For each full or partial year that the Plan is effective, the provisions applicable to each
Participant shall consist of (i) the Plan document set forth herein and (ii) written
determinations by the CEO and the Committee regarding the Participant’s short-term incentive
compensation.

Article 2.

Definitions

	2.01	 	Base Pay.
	 
	 	 	“Base Pay” shall mean the Participant’s base salary rate generally in effect during the
calendar year for which an award of short-term incentive compensation, if any, is made.

 

 

	2.02	 	Board.
	 
	 	 	“Board” shall mean the Board of Directors of the Company.
	 
	2.03	 	CEO.
	 
	 	 	“CEO” shall mean the Chairman, President and Chief Executive Officer of the Company.
	 
	2.04	 	Committee.
	 
	 	 	“Committee” shall mean the Compensation Committee of the Board.
	 
	2.05	 	Company.
	 
	 	 	“Company” shall mean Foster Wheeler Ltd.
	 
	2.06	 	Disabled.
	 
	 	 	“Disabled” shall mean a Participant’s being physically or mentally unable to perform the
material duties of the Participant’s position for a continuous period of 18 months.
	 
	2.07	 	Leave of Absence
	 
	 	 	“Leave of Absence” shall mean an approved leave of absence from the Company which qualifies
under the Family Medical Leave Act of 1993, as amended, or any other approved leave of
absence accepted as such by the Committee.
	 
	2.08	 	Participant.
	 
	 	 	“Participant” shall mean an employee designated as described in Sections 3.01 and 3.02.
	 
	2.09	 	Plan.
	 
	 	 	“Plan” shall mean the Foster Wheeler Annual Executive Short-Term Incentive Plan, as set
forth herein and as amended from time to time.
	 
	2.10	 	Senior Executive.
	 
	 	 	“Senior Executive” shall mean those persons defined as such in the Foster Wheeler Ltd.
Compensation Committee Charter and such other senior executives whom the CEO may designate
from time-to-time as being covered by the Plan; provided, however, that in all cases, all
officers (as the term is defined in Rule 16a-1 of the Securities Exchange Act) of the
Company and all named executive officers (as the term is defined in 17 CFR 229.402) of the
Company shall be deemed to be Senior Executives for the purposes of this Plan.
	 
	2.11	 	Short-Term Incentive Target Percentage Opportunity
	 
	 	 	“Short-Term Incentive Target Percentage Opportunity” shall mean the “target opportunity” or
similar number set forth in employment agreements or otherwise

2

 

	 	 	established by the CEO, Committee, and/or Board and used as part of the calculation of
bonuses, short-term incentives, or annual incentives (which bonuses and incentives can vary,
in the CEO’s and Committee’s discretion, from year to year and can incorporate the effect of
factors including, but not limited to, market comparability data, Base Pay, and
performance-based adjustments).

Article 3.

Participation and Eligibility

	3.01	 	Eligibility for Participation.
	 
	 	 	Each Senior Executive of the Company or any affiliate of the Company who is designated by
name or title by the CEO as eligible for a calendar year shall be a Participant for that
calendar year. Except as noted in Section 3.02 below, in order to participate in the Plan,
the Senior Executive must have been a full-time employee of the Company as of January 1 of
any calendar year with respect to which a short-term incentive compensation award is made.
A Participant in this Plan in any given year is ineligible for participation in any other
short-term incentive compensation plan or program within the Company or its affiliated
companies for that year.
	 
	3.02	 	Partial Year Eligibility.
	 
	 	 	In addition, Senior Executives hired after January 1, and individuals who otherwise are not
active full-time Senior Executives for the entire calendar year due to death, Disability, or
Leave of Absence, shall also be Participants for that calendar year. Generally, the
Participants described in this Section 3.02 will be eligible to receive an annual short-term
incentive compensation award proportionate to their period of active service for the subject
calendar year. For the avoidance of doubt, the CEO and Committee have the absolute
discretion to make or withhold any award to any person who was a Participant or Senior
Executive at any point during a given year so long as such award is made pursuant to the
procedures set forth elsewhere in this Plan.

Article 4.

Annual Short-Term Incentive Award

	4.01	 	Annual Short-Term Incentive Award.
	 
	 	 	Subject to the other provisions of the Plan, the annual short-term incentive awards, if any,
payable to a Participant for a calendar year shall be recommended by the CEO. Within a
reasonable time after the end of each calendar year, the CEO shall set forth in writing (i)
the Participants eligible for awards; (ii) the amount of the award (by individual or class
of individuals and stated as a dollar amount or a percentage of Base Pay); and (iii) any
factors that should be considered by the Committee in connection therewith. The awards
recommended by the CEO shall only be paid to the extent they are approved pursuant to
Section 4.02.
	 
	4.02	 	Approval Process.

3

 

	 
	 	 	The CEO’s recommendation shall be considered by the Committee. The Committee may approve
the recommendation with respect to any or all Participants, approve a different amount of
award for any or all Participants or deny an award to any or all Participants. In no event
may the amount of an award be based upon a calculation of more than two times the
Participant’s Short-Term Incentive Target Percentage Opportunity; provided, however, that,
for the avoidance of doubt, the foregoing is not intended to limit the CEO’s or the
Committee’s discretion to adjust the amount of an award upward or downward based upon other
appropriate factors including, among other things, company, business group, or operating
unit performance. To the extent an award has been approved, it shall be paid as directed by
the Committee.

Article 5.

Plan Administration

	5.01	 	Committee.
	 
	 	 	Subject to the terms hereof, the Committee shall have authority to control and manage the
operation and administration of the Plan, including all rights and powers necessary or
convenient to the carrying out of its functions hereunder, whether or not such rights and
powers are specifically enumerated herein. The Committee may, in its discretion, delegate
any of its authority with regard to the administration of the Plan, or any portion of the
Plan, to any entity, officer or committee, with or without Committee oversight, and, in such
case, references to the Committee shall be deemed to refer to the delegatee.
	 
	5.02	 	Guarantees.
	 
	 	 	The CEO, with the approval of the Committee, may authorize award guarantees, for up to one
year, for any new Plan Participant. Each proposed guarantee will be decided on an
individual basis taking into account such factors as the Committee deems relevant.
	 
	5.03	 	Governance.
	 
	 	 	The Committee shall have sole and exclusive authority to construe and interpret the Plan,
decide all questions of fact and questions of eligibility and determine the amount, manner
and time of payment of any short-term incentive payment hereunder, which shall be final and
binding.
	 
	5.04	 	Repayment of Overpayments.

	 	(a)	 	If the Company discovers that it inadvertently overpaid a Participant or former
Participant with respect to any portion of a short-term incentive compensation award,
the Participant agrees to repay the overpayment amount to the Company within 30 days of
a written request. If the Participant or former Participant does not make such
repayment within 30 days, and has not provided the Committee with clear and specific
evidence (as determined by the Committee in its discretion) establishing his or her
entitlement to the amount the Company considers to have been overpaid, the Company can
recover such overpayment by offsetting the overpayment amount against any money that
might then or later be due from the Company to the Participant or

4

 

	 	 	 	former Participant, including money that is or becomes due as wages, base pay or
short-term incentive compensation to the Participant or former Participant.
	 
	 	(b)	 	The Company’s right under this section to recover overpayments through offset
is not the exclusive means by which it may pursue recovery of said overpayment. In
addition to or in lieu of offset, the Company may also pursue ordinary collection
efforts or legal action against the Participant or former Participant.

Article 6.

Miscellaneous

	6.01	 	Plan Changes.
	 
	 	 	The Company reserves the right to modify or amend the Plan, at any time, and from time to
time, by action of the Board. The Company, through the Board, also reserves the right to
terminate the Plan at any time. Neither amendment nor termination of the Plan may adversely
affect any short-term incentive payments fully awarded and approved pursuant to Article 4
before the amendment or termination effective date, and any such short-term incentive
payment will be paid notwithstanding the amendment or termination of the Plan.
	 
	6.02	 	Participant Covenants.
	 
	 	 	If a Participant fails to adhere to his/her material obligations to
the Company, including, but not limited to his/her restrictive
covenant obligations, the CEO and the Committee, jointly and
severally, shall have the right to either revoke or amend the
Participant’s participation, and his or her entitlement to short-term
incentive compensation payments (including fully awarded and approved
short-term incentive compensation payments), as they deem appropriate
in their sole discretion.
	 
	6.03	 	Assignments.
	 
	 	 	No Participant may sell, assign, transfer, discount or pledge as
collateral for a loan or otherwise anticipate the right to any
distribution under this Plan.
	 
	6.04	 	No Contract.
	 
	 	 	This Plan does not constitute a contract of employment with the Company for a specified
term.
	 
	6.05	 	Superseding Provisions.
	 
	 	 	The Plan supersedes any previous short-term incentive compensation plans affecting the
Participant for the term covered by the Plan.
	 
	 	 	There are no oral agreements or understandings between the Company and any Participant
affecting or relating to the Plan which are not referenced herein. No alteration,
modification or change of the Plan shall be effective unless approved in writing by the
Committee.

5

 

	6.06	 	Prevailing Law.
	 
	 	 	The Plan shall be construed and enforced in accordance with the laws of the State of New
Jersey, without giving effect to its conflict of laws provisions. The Plan is not subject
to the provisions of the Employee Retirement Income Security Act of 1974, as amended.
	 
	6.07	 	Indemnification of Committee and Board.
	 
	 	 	In additions to such other rights of indemnification as they may have, the members of the
Committee and the Board shall be indemnified by the Company against all costs and expenses
reasonably incurred by them in connection with any action, suit or proceeding to which they
or any of them may be a party by reason of any action taken or failure to act under or in
connection with the Plan or any award granted pursuant hereto, and against all amounts paid
by them in settlement thereof (provided such settlement is approved by legal counsel
selected by the Company) or paid by them in satisfaction of any judgment in any such action,
suit or proceeding, except a judgment based upon a finding of bad faith, provided that upon
institution of any such action, suit or proceeding, the Committee or Board member desiring
indemnification shall give the Company an opportunity, at its own expense, to handle and
defend the same.
	 
	6.08	 	No Prior Right of Award.
	 
	 	 	Nothing in the Plan shall be deemed to give any officer or employee, or his or her legal
representative or assigns or any other person or entity claiming under or through him or
her, any contractual right to a bonus or short-term incentive compensation award or
otherwise to participate in the benefits of the Plan, and in all cases, each short-term
incentive compensation award shall be subject to the approval and discretion of the CEO and
the Committee.

6

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