Document:

EX-10.1

 

Exhibit 10.1

THE J. M. SMUCKER COMPANY

2006 EQUITY COMPENSATION PLAN

     
1. Purpose. The purpose of The
J. M. Smucker Company 2006 Equity Compensation Plan is
to attract and retain Directors, consultants, officers and other
employees of The J. M. Smucker Company, an Ohio corporation, and
its Subsidiaries and to provide to such persons incentives and
rewards for performance.

     
2. Definitions. As used in this Plan,

		
	 	     
    (a) “Appreciation Right” means a right granted
    pursuant to Section 5 or Section 9 of this Plan, and
    will include both Free-Standing Appreciation Rights and Tandem
    Appreciation Rights.
	 
	 	     
    (b) “Base Price” means the price to be used as
    the basis for determining the Spread upon the exercise of a
    Free-Standing Appreciation Right or a Tandem Appreciation Right.
	 
	 	     
    (c) “Board” means the Board of Directors of the
    Company and, to the extent of any delegation by the Board to a
    committee (or subcommittee thereof) pursuant to Section 12
    of this Plan, such committee (or subcommittee).
	 
	 	     
    (d) “Change in Control” has the meaning set forth
    in Section 14 of this Plan.
	 
	 	     
    (e) “Code” means the Internal Revenue Code of
    1986, as amended from time to time.
	 
	 	     
    (f) “Common Shares” means the shares of common
    stock, without par value, of the Company or any security into
    which such Common Shares may be changed by reason of any
    transaction or event of the type referred to in Section 13
    of this Plan.
	 
	 	     
    (g) “Company” means The J. M. Smucker Company, an
    Ohio corporation and its successors.
	 
	 	     
    (h) “Covered Employee” means a Participant who
    is, or is determined by the Board to be likely to become, a
    “covered employee” within the meaning of
    Section 162(m) of the Code (or any successor provision).
	 
	 	     
    (i) “Date of Grant” means the date specified by
    the Board on which a grant of Option Rights, Appreciation
    Rights, Performance Shares, Performance Units, Incentive Awards
    or other awards contemplated by Section 10 of this Plan, or
    a grant or sale of Restricted Stock, Restricted Stock Units, or
    other awards contemplated by Section 10 of this Plan will
    become effective (which date will not be earlier than the date
    on which the Board takes action with respect thereto).
	 
	 	     
    (j) “Detrimental Activity” means:

		
	 	     
    (i) Engaging in any activity, as an employee, principal,
    agent, or consultant for another entity that competes with the
    Company in any actual, researched, or prospective product,
    service, system, or business activity for which the Participant
    has had any direct responsibility during the last two years of
    his or her employment with the Company or a Subsidiary, in any
    territory in which the Company or a Subsidiary manufactures,
    sells, markets, services, or installs such product, service, or
    system, or engages in such business activity.
	 
	 	     
    (ii) Soliciting any employee of the Company or a Subsidiary
    to terminate his or her employment with the Company or a
    Subsidiary.
	 
	 	     
    (iii) The disclosure to anyone outside the Company or a
    Subsidiary, or the use in other than the Company’s or a
    Subsidiary’s business, without prior written authorization
    from the Company, of any confidential, proprietary or trade
    secret information or material relating to the business of the
    Company and its Subsidiaries, acquired by the Participant during
    his or her employment with the Company or its Subsidiaries or
    while acting as a consultant for the Company or its Subsidiaries
    thereafter.

 

 

		
	 	     
    (iv) The failure or refusal to disclose promptly and to
    assign to the Company upon request all right, title and interest
    in any invention or idea, patentable or not, made or conceived
    by the Participant during employment by the Company and any
    Subsidiary, relating in any manner to the actual or anticipated
    business, research or development work of the Company or any
    Subsidiary or the failure or refusal to do anything reasonably
    necessary to enable the Company or any Subsidiary to secure a
    patent where appropriate in the United States and in other
    countries.
	 
	 	     
    (v) Activity that results in Termination for Cause. For the
    purposes of this Section, “Termination for Cause”
    shall mean a termination:

		
	 	     
    (A) due to the Participant’s willful and continuous
    gross neglect of his or her duties for which he or she is
    employed, or
	 
	 	     
    (B) due to an act of dishonesty on the part of the
    Participant constituting a felony resulting or intended to
    result, directly or indirectly, in his or her gain for personal
    enrichment at the expense of the Company or a Subsidiary.

		
	 	     
    (vi) Any other conduct or act determined to be injurious,
    detrimental or prejudicial to any significant interest of the
    Company or any Subsidiary unless the Participant acted in good
    faith and in a manner he or she reasonably believed to be in or
    not opposed to the best interests of the Company.

		
	 	     
    (k) “Director” means a member of the Board of
    Directors of the Company.
	 
	 	     
    (l) “Effective Date” means the date that this
    Plan is approved by the shareholders of the Company.
	 
	 	     
    (m) “Evidence of Award” means an agreement,
    certificate, resolution or other type or form of writing or
    other evidence approved by the Board that sets forth the terms
    and conditions of the awards granted. An Evidence of Award may
    be in an electronic medium, may be limited to notation on the
    books and records of the Company and, with the approval of the
    Board, need not be signed by a representative of the Company or
    a Participant.
	 
	 	     
    (n) “Exchange Act” means the Securities Exchange
    Act of 1934, as amended, and the rules and regulations
    thereunder, as such law, rules and regulations may be amended
    from time to time.
	 
	 	     
    (o) “Existing Plans” means the 1987 Stock Option
    Plan, the Amended Restricted Stock Bonus Plan, the Amended and
    Restated 1997 Stock-Based Incentive Plan, the 1998 Equity and
    Performance Incentive Plan (As Amended and Restated Effective as
    of June 6, 2005), the Amended and Restated Nonemployee
    Director Stock Plan and the Nonemployee Director Stock Option
    Plan.
	 
	 	     
    (p) “Free-Standing Appreciation Right” means an
    Appreciation Right granted pursuant to Section 5 or
    Section 9 of this Plan that is not granted in tandem with
    an Option Right.
	 
	 	     
    (q) “Incentive Awards” has the meaning set forth
    in Section 11 of this Plan.
	 
	 	     
    (r) “Incentive Stock Options” means Option Rights
    that are intended to qualify as “incentive stock
    options” under Section 422 of the Code or any
    successor provision.
	 
	 	     
    (s) “Management Objectives” means the measurable
    performance objective or objectives established pursuant to this
    Plan for Participants who have received grants of Performance
    Shares or Performance Units or Incentive Awards or, when so
    determined by the Board, Option Rights, Appreciation Rights,
    Restricted Stock, Restricted Stock Units, dividend credits and
    other awards pursuant to this Plan. Management Objectives may be
    described in terms of Company-wide objectives or objectives that
    are related to the performance of the individual Participant or
    of the Subsidiary, division, department, region or function
    within the Company or Subsidiary in which the Participant is
    employed. The Management Objectives may be made relative to the
    performance of other companies. The

 

 

		
	 	
    Management Objectives applicable to any award to a Covered
    Employee will be based on specified levels of or improvement in
    one or more of the following metrics:

		
	 	     
    (i) Profits (e.g., operating income, income
    from continuing operations, EBIT, EBT, net income, material
    margins, earnings per share, residual or economic
    earnings — these profitability metrics could be
    measured before special items and subject to GAAP definition);
	 
	 	     
    (ii) Cash Flow (e.g., EBITDA, operating cash
    flow, total cash flow, cash flow in excess of cost of capital or
    residual cash flow or cash flow return on investment);
	 
	 	     
    (iii) Returns (e.g., profits or cash flow
    returns on: assets, invested capital, net capital employed, and
    equity);
	 
	 	     
    (iv) Working Capital (e.g., working capital
    divided by sales, days’ sales outstanding, days’ sales
    inventory, and days’ sales in payables);
	 
	 	     
    (v) Profit Margins (e.g., profits divided by
    revenues, gross margins and material margins divided by
    revenues, and material margin divided by sales pounds);
	 
	 	     
    (vi) Liquidity Measures (e.g.,
    debt-to-capital, debt-to-EBITDA, total debt ratio);
	 
	 	     
    (vii) Sales Growth, Cost Initiative and Stock Price
    Metrics (e.g., revenues, revenue growth, stock price
    appreciation, total return to shareholders, sales and
    administrative costs divided by sales, and sales and
    administrative costs divided by profits); and
	 
	 	     
    (viii) Strategic Initiative Key Deliverable Metrics
    consisting of one or more of the following: product
    development, strategic partnering, research and development,
    market penetration, geographic business expansion goals, cost
    targets, customer satisfaction, employee satisfaction,
    management of employment practices and employee benefits,
    supervision of litigation and information technology, and goals
    relating to acquisitions or divestitures of subsidiaries,
    affiliates and joint ventures.

     
If the Board determines that a change in the business,
operations, corporate structure or capital structure of the
Company, or the manner in which it conducts its business, or
other events or circumstances render the Management Objectives
unsuitable, the Board may in its discretion modify such
Management Objectives or the related levels of achievement, in
whole or in part, as the Board deems appropriate and equitable,
except in the case of a Covered Employee where such action would
result in the loss of the otherwise available exemption of the
award under Section 162(m) of the Code. In such case, the
Board will not make any modification of the Management
Objectives or the level or levels of achievement with respect to
such Covered Employee.

		
	 	     
    (t) “Market Value per Share” means, as of any
    particular date, the average of the high and low sales prices of
    the Common Shares as reported on the New York Stock Exchange
    Composite Tape or, if not listed on such exchange, on any other
    national securities exchange on which the Common Shares are
    listed, or if there are no sales on such day, on the next
    preceding trading day during which a sale occurred. If there is
    no regular trading market for such Common Shares, the Market
    Value per Share shall be determined by the Board.
	 
	 	     
    (u) “Nonemployee Director” means a person who is
    a “nonemployee director” of the Company within the
    meaning of Rule 16b-3 of the Securities and Exchange
    Commission promulgated under the Exchange Act.
	 
	 	     
    (v) “Optionee” means the optionee named in an
    Evidence of Award evidencing an outstanding Option Right.
	 
	 	     
    (w) “Option Price” means the purchase price
    payable on exercise of an Option Right.
	 
	 	     
    (x) “Option Right” means the right to purchase
    Common Shares upon exercise of an option granted pursuant to
    Section 4 or Section 9 of this Plan.

 

 

		
	 	     
    (y) “Participant” means a person who is selected
    by the Board to receive benefits under this Plan and who is at
    the time a consultant, an officer, or other employee of the
    Company or any one or more of its Subsidiaries, or who has
    agreed to commence serving in any of such capacities within
    90 days of the Date of Grant, and will also include each
    Nonemployee Director who receives an award under this Plan.
	 
	 	     
    (z) “Performance Period” means, in respect of a
    Performance Share or Performance Unit, a period of time
    established pursuant to Section 8 of this Plan within which
    the Management Objectives relating to such Performance Share or
    Performance Unit are to be achieved.
	 
	 	     
    (aa) “Performance Share” means a bookkeeping
    entry that records the equivalent of one Common Share awarded
    pursuant to Section 8 of this Plan.
	 
	 	     
    (bb) “Performance Unit” means a bookkeeping entry
    awarded pursuant to Section 8 of this Plan that records a
    unit equivalent to $1.00 or such other value as is determined by
    the Board.
	 
	 	     
    (cc) “Plan” means The J. M. Smucker Company 2006
    Equity Compensation Plan, as may be amended from time to time.
	 
	 	     
    (dd) “Restricted Stock” means Common Shares
    granted or sold pursuant to Section 6 or Section 9 of
    this Plan as to which neither the substantial risk of forfeiture
    nor the prohibition on transfers has expired.
	 
	 	     
    (ee) “Restriction Period” means the period of
    time during which Restricted Stock Units are subject to
    restrictions, as provided in Section 7 or Section 9 of
    this Plan.
	 
	 	     
    (ff) “Restricted Stock Unit” means an award made
    pursuant to Section 7 or Section 9 of this Plan of the
    right to receive Common Shares at the end of a specified period.
    An award of Restricted Stock Units may be described as an award
    of “Deferred Stock Units”.
	 
	 	     
    (gg) “Spread” means the excess of the Market
    Value per Share on the date when an Appreciation Right is
    exercised over the Option Price or Base Price provided for in
    the related Option Right or Free-Standing Appreciation Right,
    respectively.
	 
	 	     
    (hh) “Subsidiary” means a corporation, company or
    other entity (i) at least 50 percent of whose
    outstanding shares or securities (representing the right to vote
    for the election of directors or other managing authority) are,
    or (ii) which does not have outstanding shares or
    securities (as may be the case in a partnership, joint venture
    or unincorporated association), but at least 50 percent of
    whose ownership interest representing the right generally to
    make decisions for such other entity is, now or hereafter, owned
    or controlled, directly or indirectly, by the Company except
    that for purposes of determining whether any person may be a
    Participant for purposes of any grant of Incentive Stock
    Options, “Subsidiary” means any corporation in which
    at the time the Company owns or controls, directly or
    indirectly, at least 50 percent of the total combined
    voting power represented by all classes of stock issued by such
    corporation.
	 
	 	     
    (ii) “Tandem Appreciation Right” means an
    Appreciation Right granted pursuant to Section 5 or
    Section 9 of this Plan that is granted in tandem with an
    Option Right.

     
3. Shares Available Under the Plan.

		
	 	     
    (a) Maximum Shares Available Under Plan.

		
	 	     
    (i) Subject to adjustment as provided in Section 13 of
    this Plan, the number of Common Shares that may be issued or
    transferred (i) upon the exercise of Option Rights or
    Appreciation Rights, (ii) in payment of Restricted Stock
    and released from substantial risks of forfeiture thereof, (iii)
    in payment of Restricted Stock Units, (iv) in payment of
    Performance Shares or Performance Units that have been earned,
    (v) as awards to Nonemployee Directors, (vi) as awards
    contemplated by Section 10 of this Plan, or (vii) in
    payment of dividend equivalents paid with respect to awards

 

 

		
	 	
    made under the Plan will not exceed in the aggregate 2,500,000
    Common Shares. Such shares may be shares of original issuance or
    treasury shares or a combination of the foregoing.
	 
	 	     
    (ii) Common Shares covered by an award granted under the
    Plan shall not be counted as used unless and until they are
    actually issued and delivered to a Participant and, therefore,
    the total number of shares available under the Plan as of a
    given date shall not be reduced by any shares relating to prior
    awards that have expired or have been forfeited or cancelled.
    Notwithstanding anything to the contrary contained herein:
    (A) if Common Shares are tendered or otherwise used in
    payment of the Option Price of an Option Right the total number
    of shares covered by the Option Right being exercised shall
    reduce the aggregate plan limit described above; (B) Common
    Shares withheld by the Company to satisfy the tax withholding
    obligation shall count against the plan limit described above;
    and (C) the number of Common Shares covered by an
    Appreciation Right, to the extent that it is exercised and
    settled in Common Shares, and whether or not shares are actually
    issued to the participant upon exercise of the right, shall be
    considered issued or transferred pursuant to the Plan. In the
    event that the Company repurchases shares with Option Right
    proceeds, those shares will not be added to the aggregate plan
    limit described above.

		
	 	     
    (b) Life of Plan Limits. Notwithstanding anything in
    this Section 3, or elsewhere in this Plan, to the contrary
    and subject to adjustment as provided in Section 13 of this
    Plan:

		
	 	     
    (i) The aggregate number of Common Shares actually issued
    or transferred by the Company upon the exercise of Incentive
    Stock Options will not exceed 2,500,000 Common Shares.
	 
	 	     
    (ii) Awards will not be granted under Section 9 or
    Section 10 of the Plan to the extent they would involve the
    issuance of more than 250,000 shares in the aggregate.

		
	 	     
    (c) Individual Participant Limits. Notwithstanding
    anything in this Section 3, or elsewhere in this Plan to
    the contrary, and subject to adjustment as provided in
    Section 13 of this Plan:

		
	 	     
    (i) No Participant will be granted Option Rights or
    Appreciation Rights, in the aggregate, for more than 600,000
    Common Shares during any calendar year.
	 
	 	     
    (ii) No Participant will be granted Restricted Stock or
    Restricted Stock Units that specify Management Objectives,
    Performance Shares or other awards under Section 10 of this
    Plan, in the aggregate, for more than 200,000 Common Shares
    during any calendar year.
	 
	 	     
    (iii) Notwithstanding any other provision of this Plan to
    the contrary, in no event will any Participant in any calendar
    year receive an award of Performance Units having an aggregate
    maximum value as of their respective Dates of Grant in excess of
    $4,000,000.
	 
	 	     
    (iv) The maximum value of any Incentive Award that may be
    earned by any Participant by achievement of Management
    Objectives in any calendar year shall not exceed $4,000,000 in
    cash and shall not exceed 200,000 Common Shares.

     
4. Option Rights. The Board may, from time to time
and upon such terms and conditions as it may determine,
authorize the granting to Participants of options to purchase
Common Shares. Each such grant will be subject to all of the
requirements contained in the following provisions:

		
	 	     
    (a) Each grant will specify the number of Common Shares to
    which it pertains subject to the limitations set forth in
    Section 3 of this Plan.
	 
	 	     
    (b) Each grant will specify an Option Price per share,
    which may not be less than the Market Value per Share on the
    Date of Grant.
	 
	 	     
    (c) Each grant will specify whether the Option Price will
    be payable (i) in cash or by check acceptable to the
    Company or by wire transfer of immediately available funds,
    (ii) by the actual or constructive transfer to the Company
    of Common Shares owned by the Optionee for at least six months
    having a value at the time of exercise equal to the total Option
    Price, (iii) by a combination of such methods of payment,
    or (iv) by such other methods as may be approved by the
    Board.

 

 

		
	 	     
    (d) To the extent permitted by law, any grant may provide
    for deferred payment of the Option Price from the proceeds of
    sale through a bank or broker on a date satisfactory to the
    Company of some or all of the shares to which such exercise
    relates.
	 
	 	     
    (e) Successive grants may be made to the same Participant
    whether or not any Option Rights previously granted to such
    Participant remain unexercised.
	 
	 	     
    (f) Each grant will specify the period or periods of
    continuous service by the Optionee with the Company or any
    Subsidiary that is necessary before the Option Rights or
    installments thereof will become exercisable. A grant of Option
    Rights may provide for the earlier exercise of such Option
    Rights in the event of the retirement, the attainment of
    reasonable age and service requirements approved by the Board,
    death or disability of a Participant or a Change in Control.
	 
	 	     
    (g) Any grant of Option Rights may specify Management
    Objectives that must be achieved as a condition to the exercise
    of such rights.
	 
	 	     
    (h) Option Rights granted under this Plan may be
    (i) options, including, without limitation, Incentive Stock
    Options, that are intended to qualify under particular
    provisions of the Code, (ii) options that are not intended
    so to qualify, or (iii) combinations of the foregoing.
    Incentive Stock Options may only be granted to Participants who
    meet the definition of “employees” under
    Section 3401(c) of the Code.
	 
	 	     
    (i) The exercise of an Option Right will result in the
    cancellation on a share-for-share basis of any Tandem
    Appreciation Right authorized under Section 5 of this Plan.
	 
	 	     
    (j) No Option Right will be exercisable more than
    10 years from the Date of Grant.
	 
	 	     
    (k) Each grant of Option Rights will be evidenced by an
    Evidence of Award. Each Evidence of Award shall be subject to
    this Plan and shall contain such terms and provisions,
    consistent with this Plan, as the Board may approve.

     
5. Appreciation Rights.

		
	 	     
    (a) The Board may also authorize the granting (i) to
    any Optionee, of Tandem Appreciation Rights in respect of Option
    Rights granted hereunder, and (ii) to any Participant, of
    Free-Standing Appreciation Rights. A Tandem Appreciation Right
    will be a right of the Optionee, exercisable by surrender of the
    related Option Right, to receive from the Company an amount
    determined by the Board, which will be expressed as a percentage
    of the Spread (not exceeding 100 percent) at the time of
    exercise. Tandem Appreciation Rights may be granted at any time
    prior to the exercise or termination of the related Option
    Rights; provided, however, that a Tandem Appreciation
    Right awarded in relation to an Incentive Stock Option must be
    granted concurrently with such Incentive Stock Option. A
    Free-Standing Appreciation Right will be a right of the
    Participant to receive from the Company an amount determined by
    the Board, which will be expressed as a percentage of the Spread
    (not exceeding 100 percent) at the time of exercise.
	 
	 	     
    (b) Each grant of Appreciation Rights will be subject to
    all of the requirements contained in the following provisions:

		
	 	     
    (i) Each grant will specify that the amount payable on
    exercise of an Appreciation Right will be paid by the Company in
    Common Shares.
	 
	 	     
    (ii) Any grant may specify that the amount payable on
    exercise of an Appreciation Right may not exceed a maximum
    specified by the Board at the Date of Grant.
	 
	 	     
    (iii) Any grant may specify waiting periods before exercise
    and permissible exercise dates or periods.
	 
	 	     
    (iv) Any grant may specify that such Appreciation Right may
    be exercised only in the event of, or earlier in the event of,
    the retirement, the attainment of reasonable age and service
    requirements approved by the Board, death or disability of a
    Participant or a Change in Control.

 

 

		
	 	     
    (v) Any grant of Appreciation Rights may specify Management
    Objectives that must be achieved as a condition of the exercise
    of such Appreciation Rights.
	 
	 	     
    (vi) Each grant of Appreciation Rights will be evidenced by
    an Evidence of Award, which Evidence of Award will describe such
    Appreciation Rights, identify the related Option Rights (if
    applicable), and contain such other terms and provisions,
    consistent with this Plan, as the Board may approve.

		
	 	     
    (c) Any grant of Tandem Appreciation Rights will provide
    that such Tandem Appreciation Rights may be exercised only at a
    time when the related Option Right is also exercisable and at a
    time when the Spread is positive, and by surrender of the
    related Option Right for cancellation. Successive grants of
    Tandem Appreciation Rights may be made to the same Participant
    regardless of whether any Tandem Appreciation Rights previously
    granted to the Participant remain unexercised.
	 
	 	     
    (d) Regarding Free-Standing Appreciation Rights only:

		
	 	     
    (i) Each grant will specify in respect of each
    Free-Standing Appreciation Right a Base Price, which may not be
    less than the Market Value per Share on the Date of Grant;
	 
	 	     
    (ii) Successive grants may be made to the same Participant
    regardless of whether any Free-Standing Appreciation Rights
    previously granted to the Participant remain unexercised; and
	 
	 	     
    (iii) No Free-Standing Appreciation Right granted under
    this Plan may be exercised more than 10 years from the Date
    of Grant.

     
6. Restricted Stock. The Board may also authorize
the grant or sale of Restricted Stock to Participants. Each such
grant or sale will be subject to all of the requirements
contained in the following provisions:

		
	 	     
    (a) Each such grant or sale will constitute an immediate
    transfer of the ownership of Common Shares to the Participant in
    consideration of the performance of services, entitling such
    Participant to voting, dividend and other ownership rights, but
    subject to the substantial risk of forfeiture and restrictions
    on transfer hereinafter referred to.
	 
	 	     
    (b) Each such grant or sale may be made without additional
    consideration or in consideration of a payment by such
    Participant that is less than the Market Value per Share at the
    Date of Grant.
	 
	 	     
    (c) Each such grant or sale will provide that the
    Restricted Stock covered by such grant or sale will be subject
    to a “substantial risk of forfeiture” within the
    meaning of Section 83 of the Code for a period to be
    determined by the Board at the Date of Grant, or upon
    achievement of Management Objectives referred to in subparagraph
    (e) below. If the elimination of restrictions is based on
    the passage of time rather than the achievement of Management
    Objectives, the period of time will be no shorter than three
    years, except that the restrictions may be removed on an annual,
    ratable basis during the three year period.
	 
	 	     
    (d) Each such grant or sale will provide that during the
    period for which such substantial risk of forfeiture is to
    continue, the transferability of the Restricted Stock will be
    prohibited or restricted in the manner and to the extent
    prescribed by the Board at the Date of Grant (which restrictions
    may include, without limitation, rights of repurchase or first
    refusal in the Company or provisions subjecting the Restricted
    Stock to a continuing substantial risk of forfeiture in the
    hands of any transferee).
	 
	 	     
    (e) Any grant of Restricted Stock may specify Management
    Objectives that, if achieved, will result in termination or
    early termination of the restrictions applicable to such
    Restricted Stock; provided, however, that notwithstanding
    subparagraph (c) above, restrictions relating to Restricted
    Stock that vests upon the achievement of Management Objectives
    may not terminate sooner than one year from the Date of Grant.
    Each grant may specify in respect of such Management Objectives
    a minimum acceptable level of achievement and may set forth a
    formula for determining the number of shares of Restricted Stock
    on which restrictions will terminate if performance is at or
    above the minimum or threshold level or levels, or is at or
    above the target level or levels, but falls short of maximum
    achievement of the specified Management Objectives. The grant of
    Restricted Stock will specify that, before the termination or
    early

 

 

		
	 	
    termination of restrictions applicable to such Restricted Stock,
    the Board must determine that the Management Objectives have
    been satisfied.
	 
	 	     
    (f) Notwithstanding anything to the contrary contained in
    this Plan, any grant or sale of Restricted Stock may provide for
    the earlier termination of restrictions on such Restricted Stock
    in the event of the retirement, the attainment of reasonable age
    and service requirements approved by the Board, death or
    disability of a Participant or a Change in Control.
	 
	 	     
    (g) Any such grant or sale of Restricted Stock may require
    that any or all dividends or other distributions paid thereon
    during the period of such restrictions be automatically deferred
    and reinvested in additional shares of Restricted Stock, which
    may be subject to the same restrictions as the underlying award.
	 
	 	     
    (h) Each grant or sale of Restricted Stock will be
    evidenced by an Evidence of Award and will contain such terms
    and provisions, consistent with this Plan, as the Board may
    approve. Unless otherwise directed by the Board, (i) all
    certificates representing shares of Restricted Stock will be
    held in custody by the Company until all restrictions thereon
    will have lapsed, together with a stock power or powers executed
    by the Participant in whose name such certificates are
    registered, endorsed in blank and covering such Shares or
    (ii) all shares of Restricted Stock will be held at the
    Company’s transfer agent in book entry form with
    appropriate restrictions relating to the transfer of such shares
    of Restricted Stock.

     
7. Restricted Stock Units. The Board may also
authorize the granting or sale of Restricted Stock Units (which
may also be referred to as Deferred Stock Units) to
Participants. Each such grant or sale will be subject to all of
the requirements contained in the following provisions:

		
	 	     
    (a) Each such grant or sale will constitute the agreement
    by the Company to deliver Common Shares to the Participant in
    the future in consideration of the performance of services, but
    subject to the fulfillment of such conditions (which may include
    the achievement of Management Objectives) during the Restriction
    Period as the Board may specify. If a grant of Restricted Stock
    Units specifies that the Restriction Period will terminate upon
    the achievement of Management Objectives, then, notwithstanding
    anything to the contrary contained in subparagraph
    (c) below, such Restriction Period may not terminate sooner
    than one year from the Date of Grant. Each grant may specify in
    respect of such Management Objectives a minimum acceptable level
    of achievement and may set forth a formula for determining the
    number of shares of Restricted Stock Units on which restrictions
    will terminate if performance is at or above the minimum or
    threshold level or levels, or is at or above the target level or
    levels, but falls short of maximum achievement of the specified
    Management Objectives. The grant of such Restricted Stock Units
    will specify that, before the termination or early termination
    of restrictions applicable to such Restricted Stock Units, the
    Board must determine that the Management Objectives have been
    satisfied.
	 
	 	     
    (b) Each such grant or sale may be made without additional
    consideration or in consideration of a payment by such
    Participant that is less than the Market Value per Share at the
    Date of Grant.
	 
	 	     
    (c) If the Restriction Period lapses only by the passage of
    time rather than the achievement of Management Objectives as
    provided in subparagraph (a) above, each such grant or sale
    will be subject to a Restriction Period of not less than three
    years, except that a grant or sale may provide that the
    Restriction Period will expire ratably during the three-year
    period, on an annual basis, as determined by the Board at the
    Date of Grant.
	 
	 	     
    (d) Notwithstanding anything to the contrary contained in
    this Plan, any grant or sale of Restricted Stock Units may
    provide for the earlier lapse or other modification of the
    Restriction Period in the event of the retirement, the
    attainment of reasonable age and service requirements approved
    by the Board, death or disability of a Participant or a Change
    in Control.
	 
	 	     
    (e) During the Restriction Period, the Participant will
    have no right to transfer any rights under his or her award and
    will have no rights of ownership in the Restricted Stock Units
    and will have no right to vote them, but the Board may at the
    Date of Grant, authorize the payment of dividend equivalents on

 

 

		
	 	
    such Restricted Stock Units on either a current or deferred or
    contingent basis, either in cash or in additional Common Shares.
	 
	 	     
    (f) Each grant or sale will specify the time and manner of
    payment of the Restricted Stock Units that have been earned.
    Each grant or sale will specify that the amount payable with
    respect thereto will be paid by the Company in Common Shares.
	 
	 	     
    (g) Each grant or sale of Restricted Stock Units will be
    evidenced by an Evidence of Award and will contain such terms
    and provisions, consistent with this Plan, as the Board may
    approve.

     
8. Performance Shares and Performance Units. The
Board may also authorize the granting of Performance Shares and
Performance Units that will become payable to a Participant upon
achievement of specified Management Objectives during the
Performance Period. Each such grant will be subject to all of
the requirements contained in the following provisions:

		
	 	     
    (a) Each grant will specify the number of Performance
    Shares or Performance Units to which it pertains, which number
    may be subject to adjustment to reflect changes in compensation
    or other factors; provided, however, that no such
    adjustment will be made in the case of a Covered Employee where
    such action would result in the loss of the otherwise available
    exemption of the award under Section 162(m) of the Code.
	 
	 	     
    (b) The Performance Period with respect to each Performance
    Share or Performance Unit will be such period of time (not less
    than one year) as will be determined by the Board at the time of
    grant, which may be subject to earlier lapse or other
    modification in the event of the retirement, death or disability
    of a Participant or a Change in Control.
	 
	 	     
    (c) Any grant of Performance Shares or Performance Units
    will specify Management Objectives which, if achieved, will
    result in payment or early payment of the award, and each grant
    may specify in respect of such specified Management Objectives a
    level or levels of achievement and will set forth a formula for
    determining the number of Performance Shares or Performance
    Units that will be earned if performance is at or above the
    minimum or threshold level or levels, or is at or above the
    target level or levels, but falls short of maximum achievement
    of the specified Management Objectives. The grant of Performance
    Shares or Performance Units will specify that, before the
    Performance Shares or Performance Units will be earned and paid,
    the Board must determine that the Management Objectives have
    been satisfied.
	 
	 	     
    (d) Each grant will specify the time and manner of payment
    of Performance Shares or Performance Units that have been
    earned. Any grant may specify that the amount payable with
    respect thereto may be paid by the Company in Common Shares, in
    Restricted Stock or Restricted Stock Units or in any combination
    thereof and may either grant to the Participant or retain in the
    Board the right to elect among those alternatives.
	 
	 	     
    (e) Any grant of Performance Shares or Performance Units
    may specify that the amount payable or the number of Common
    Shares, shares of Restricted Stock or Restricted Stock Units
    with respect thereto may not exceed a maximum specified by the
    Board at the Date of Grant.
	 
	 	     
    (f) The Board may at the Date of Grant of Performance
    Shares, provide for the payment of dividend equivalents to the
    holder thereof on either a current or deferred or contingent
    basis, either in cash or in additional Common Shares.
	 
	 	     
    (g) Each grant of Performance Shares or Performance Units
    will be evidenced by an Evidence of Award and will contain such
    other terms and provisions, consistent with this Plan, as the
    Board may approve.

     
9. Awards to Nonemployee Directors. The Board may,
from time to time and upon such terms and conditions as it may
determine, authorize the granting to Nonemployee Directors
Option Rights, Appreciation Rights or other awards contemplated
by Section 10 of this Plan and may also authorize the grant
or sale of Common Shares, Restricted Stock or Restricted Stock
Units (which may also be referred to as Deferred Stock

 

 

Units) to Nonemployee Directors. Each grant of an award to a
Nonemployee Director will be upon such terms and conditions as
approved by the Board, will not be required to be subject to any
minimum vesting period, and will be evidenced by an Evidence of
Award in such form as will be approved by the Board. Each grant
will specify in the case of an Option Right an Option Price per
share, and in the case of a Free-Standing Appreciation Right, a
Base Price per share, which will not be less than the Market
Value per Share on the Date of Grant. Each Option Right and
Free-Standing Appreciation Right granted under the Plan to a
Nonemployee Director will expire not more than 10 years
from the Date of Grant and will be subject to earlier
termination as hereinafter provided. If a Nonemployee Director
subsequently becomes an employee of the Company or a Subsidiary
while remaining a member of the Board, any award held under this
Plan by such individual at the time of such commencement of
employment will not be affected thereby. Nonemployee Directors,
pursuant to this Section 9, may be awarded, or may be
permitted to elect to receive, pursuant to procedures
established by the Board, all or any portion of their annual
retainer, meeting fees or other fees in Common Shares,
Restricted Stock, Restricted Stock Units or other awards under
the Plan in lieu of cash.

     
10. Other Awards.

		
	 	     
    (a) The Board may, subject to limitations under applicable
    law, grant to any Participant such other awards that may be
    denominated or payable in, valued in whole or in part by
    reference to, or otherwise based on, or related to, Common
    Shares or factors that may influence the value of such shares,
    including, without limitation, convertible or exchangeable debt
    securities, other rights convertible or exchangeable into Common
    Shares, purchase rights for Common Shares, awards with value and
    payment contingent upon performance of the Company or specified
    Subsidiaries, affiliates or other business units thereof or any
    other factors designated by the Board, and awards valued by
    reference to the book value of Common Shares or the value of
    securities of, or the performance of specified Subsidiaries or
    affiliates or other business units of the Company. The Board
    shall determine the terms and conditions of such awards. Common
    Shares delivered pursuant to an award in the nature of a
    purchase right granted under this Section 10 shall be
    purchased for such consideration, paid for at such time, by such
    methods, and in such forms, including, without limitation,
    Common Shares, other awards, notes or other property, as the
    Board shall determine.
	 
	 	     
    (b) The Board may grant Common Shares as a bonus, or may
    grant other awards in lieu of obligations of the Company or a
    Subsidiary to pay cash or deliver other property under this Plan
    or under other plans or compensatory arrangements, subject to
    such terms as shall be determined by the Board.
	 
	 	     
    (c) Share-based awards, pursuant to this Section 10,
    are not required to be subject to any minimum vesting period.

     
11. Incentive Awards. The Board is authorized to
grant Incentive Awards, which awards shall represent a
conditional right to receive Restricted Stock or Restricted
Stock Units upon achievement of pre-established Management
Objectives, subject to the following terms and conditions:

		
	 	     
    (a) It is the intent of the Company that Incentive Awards
    under this Section 11 granted to persons who are Covered
    Employees within the meaning of Section 162(m) of the Code
    shall constitute “qualified performance-based
    compensation” within the meaning of Section 162(m) of
    the Code. Accordingly, this Section 11 shall be interpreted
    in a manner consistent with Section 162(m) of the Code.
	 
	 	     
    (b) If the Board determines to grant Incentive Awards with
    respect to any one or more fiscal years, the Board shall select
    the Participants to be granted such awards and establish the
    Management Objectives, amounts payable and other terms of
    settlement, and all other terms of such awards. Such
    determinations by the Board shall be made, in the case of any
    Covered Employee, not later than the end of the first quarter of
    that fiscal year or such earlier date as may be necessary to
    comply with Section 162(m) of the Code.
	 
	 	     
    (c) The Board shall specify whether and to what extent an
    Incentive Award shall be settled in shares of Restricted Stock,
    Restricted Stock Units or in a combination thereof at the time
    of grant of

 

 

		
	 	
    such award. If any Restricted Stock or Restricted Stock Units
    are awarded in settlement of such an Award, such Restricted
    Stock or Restricted Stock Units shall be subject to a
    restriction on transferability and a risk of forfeiture for a
    period extending until at least the end of the third fiscal year
    following the year to which such award related (except that the
    restrictions may lapse on an annual, ratable basis during the
    three-year period and the Board may accelerate the lapse of such
    restrictions in the event of the retirement, the attainment of
    reasonable age and service requirements approved by the Board,
    death or disability of a Participant or a Change in Control).
    The Board may specify additional or longer restrictions on
    transferability and risks of forfeiture with respect to such
    Restricted Stock or Restricted Stock Units.
	 
	 	     
    (d) As promptly as practicable following completion of the
    year or other period with respect to which Management Objectives
    relating to Incentive Awards are to be achieved, the Board shall
    determine whether and to what extent such Management Objectives
    have in fact been achieved. All such determinations by the Board
    shall be made in writing. The Board may, in its discretion,
    increase or reduce the amounts payable in settlement of such an
    award after the date of grant and prior to settlement (including
    upon consideration by the Board of other performance criteria),
    except that the Committee may not exercise discretion to
    increase the amounts payable in settlement of such an award to a
    Covered Employee.

     
12. Administration of the Plan.

		
	 	     
    (a) This Plan will be administered by the Board, which may
    from time to time delegate all or any part of its authority
    under this Plan to the Executive Compensation Committee of the
    Board or any other committee of the Board (or a subcommittee
    thereof), as constituted from time to time. To the extent of any
    such delegation, references in this Plan to the Board will be
    deemed to be references to such committee or subcommittee.
	 
	 	     
    (b) The interpretation and construction by the Board of any
    provision of this Plan or of any agreement, notification or
    document evidencing the grant of Option Rights, Appreciation
    Rights, Restricted Stock, Restricted Stock Units, Performance
    Shares, Performance Units, Incentive Awards or other awards
    pursuant to Section 10 of this Plan and any determination
    by the Board pursuant to any provision of this Plan or of any
    such agreement, notification or document will be final and
    conclusive.
	 
	 	     
    (c) The Board or, to the extent of any delegation as
    provided in Section 12(a), the committee, may delegate to
    one or more of its members or to one or more officers of the
    Company, or to one or more agents or advisors, such
    administrative duties or powers as it may deem advisable, and
    the Board, the committee, or any person to whom duties or powers
    have been delegated as aforesaid, may employ one or more persons
    to render advice with respect to any responsibility the Board,
    the committee or such person may have under the Plan. The Board
    or the committee may, by resolution, authorize one or more
    officers of the Company to do one or both of the following on
    the same basis as the Board or the committee: (i) designate
    employees to be recipients of awards under this Plan;
    (ii) determine the size of any such awards; provided,
    however, that (A) the Board or the Committee shall not
    delegate such responsibilities to any such officer for awards
    granted to an employee who is a Director or an executive officer
    or any person subject to Section 162(m) of the Code;
    (B) the resolution providing for such authorization sets
    forth the total number of Common Shares such officer(s) may
    grant; and (iii) the officer(s) shall report periodically
    to the Board or the committee, as the case may be, regarding the
    nature and scope of the awards granted pursuant to the authority
    delegated.

     
13. Adjustments. The Board may make or provide for
such adjustments in the numbers of Common Shares covered by
outstanding Option Rights, Appreciation Rights, Restricted Stock
Units, Performance Shares and Performance Units granted
hereunder and, if applicable, in the number of Common Shares
covered by other awards granted pursuant to Section 10
hereof, in the Option Price and Base Price provided in
outstanding Appreciation Rights, and in the kind of shares
covered thereby, as the Board, in its sole discretion may
determine is equitably required to prevent dilution or
enlargement of the rights of Participants or Optionees that
otherwise would result from (a) any stock dividend, stock
split, combination of shares, recapitalization or other change
in the capital structure of the Company, or (b) any merger,
consolidation,

 

 

spin-off, split-off, spin-out, split-up, reorganization, partial
or complete liquidation or other distribution of assets,
issuance of rights or warrants to purchase securities, or
(c) any other corporate transaction or event having an
effect similar to any of the foregoing. Moreover, in the event
of any such transaction or event, the Board, in its discretion,
may provide in substitution for any or all outstanding awards
under this Plan such alternative consideration, if any, as it
may determine to be equitable in the circumstances and may
require in connection therewith the surrender of all awards so
replaced. The Board may also make or provide for such
adjustments in the numbers of shares specified in Section 3
of this Plan as the Board in its sole discretion, exercised in
good faith, may determine is appropriate to reflect any
transaction or event described in this Section 13;
provided, however, that any such adjustment to the number
specified in Section 3(b)(i) will be made only if and to
the extent that such adjustment would not cause any option
intended to qualify as an Incentive Stock Option to fail so to
qualify.

     
14. Change in Control. For purposes of this Plan,
except as may be otherwise prescribed by the Board in an
Evidence of Award made under this Plan, a “Change in
Control” shall be deemed to have occurred upon the
occurrence of any of the following events:

		
	 	     
    (a) A filing pursuant to any federal or state law in
    connection with any tender offer for shares of the Company
    (other than a tender offer by the Company);
	 
	 	     
    (b) The occurrence of or the signing of any agreement for a
    merger, consolidation, combination (as defined in
    Section 1701.01(Q), Ohio Revised Code), or majority share
    acquisition (as defined in Section 1701.01(R), Ohio Revised
    Code) involving the Company and as a result of which the holders
    of shares of the Company prior to the transaction become, or
    will become, by reason of the transaction, the holders of such
    number of shares of the surviving or acquiring corporation as
    entitle them to exercise less than one-third of the voting power
    of such corporation in the election of directors;
	 
	 	     
    (c) The signing of any agreement for the sale of all or
    substantially all of the assets of the Company;
	 
	 	     
    (d) The adoption of any resolution of reorganization or
    dissolution of the Company by the shareholders;
	 
	 	     
    (e) The occurrence of any other event or series of events,
    which, in the opinion of the Board of Directors, will, or is
    likely to, if carried out, result in a change of control of the
    Company;
	 
	 	     
    (f) If during any period of two consecutive years,
    individuals who at the beginning of such period constitute the
    Directors of the Company cease for any reason to constitute a
    majority thereof (unless the election, or the nomination for
    election by the Company’s shareholders, of each Director of
    the Company first elected during such period was approved by a
    vote of at least two-thirds of the Directors then still in
    office who were Directors of the Company at the beginning of any
    such period); or
	 
	 	     
    (g) The acquisition by any person (including a group within
    the meaning of Sections 13(d)(3) or 14(d)(2) of the
    Exchange Act other than the Company (or any of its Subsidiaries)
    of beneficial ownership (within the meaning of Rule 13d-3
    promulgated under the Exchange Act) of 20% or more of the
    Company’s then outstanding securities, unless such
    acquisition is approved by the vote of at least two-thirds of
    the Directors of the Company then in office.

     
15. Detrimental Activity. Any Evidence of Award may
provide that if a Participant, either during employment by the
Company or a Subsidiary or within a specified period after
termination of such employment, shall engage in any Detrimental
Activity, and the Board shall so find, forthwith upon notice of
such finding, the Participant shall:

		
	 	     
    (a) Forfeit any award granted under the Plan then held by
    the Participant;
	 
	 	     
    (b) Return to the Company, in exchange for payment by the
    Company of any amount actually paid therefor by the Participant,
    all Common Shares that the Participant has not disposed of that
    were offered pursuant to this Plan within a specified period
    prior to the date of the commencement of such Detrimental
    Activity, and

 

 

		
	 	     
    (c) With respect to any Common Shares so acquired that the
    Participant has disposed of, pay to the Company in cash the
    difference between:

		
	 	     
    (i) Any amount actually paid therefor by the Participant
    pursuant to this Plan, and
	 
	 	     
    (ii) The Market Value per Share of the Common Shares on the
    date of such acquisition.

		
	 	     
    (d) To the extent that such amounts are not paid to the
    Company, the Company may set off the amounts so payable to it
    against any amounts that may be owing from time to time by the
    Company or a Subsidiary to the Participant, whether as wages,
    deferred compensation or vacation pay or in the form of any
    other benefit or for any other reason.

     
16. Non U.S. Participants. In order to facilitate
the making of any grant or combination of grants under this
Plan, the Board may provide for such special terms for awards to
Participants who are foreign nationals or who are employed by
the Company or any Subsidiary outside of the United States of
America or who provide services to the Company under an
agreement with a foreign nation or agency, as the Board may
consider necessary or appropriate to accommodate differences in
local law, tax policy or custom. Moreover, the Board may approve
such supplements to or amendments, restatements or alternative
versions of this Plan (including, without limitation, sub-plans)
as it may consider necessary or appropriate for such purposes,
without thereby affecting the terms of this Plan as in effect
for any other purpose, and the Secretary or other appropriate
officer of the Company may certify any such document as having
been approved and adopted in the same manner as this Plan. No
such special terms, supplements, amendments or restatements,
however, will include any provisions that are inconsistent with
the terms of this Plan as then in effect unless this Plan could
have been amended to eliminate such inconsistency without
further approval by the shareholders of the Company.

     
17. Transferability.

		
	 	     
    (a) Except as otherwise determined by the Board, no Option
    Right, Appreciation Right, Restricted Stock, Restricted Stock
    Unit, Performance Share, Performance Unit, award contemplated by
    Section 9 or 10 of this Plan, Incentive Award or dividend
    equivalents paid with respect to awards made under the Plan
    shall be transferable by the Participant except by will or the
    laws of descent and distribution and, in no event shall any such
    award granted under the Plan be transferred for value. Except as
    otherwise determined by the Board, Option Rights and
    Appreciation Rights will be exercisable during the
    Participant’s lifetime only by him or her or, in the event
    of the Participant’s legal incapacity to do so, by his or
    her guardian or legal representative acting on behalf of the
    Participant in a fiduciary capacity under state law or court
    supervision.
	 
	 	     
    (b) The Board may specify at the Date of Grant that part or
    all of the Common Shares that are (i) to be issued or
    transferred by the Company upon the exercise of Option Rights or
    Appreciation Rights, upon the termination of the Restriction
    Period applicable to Restricted Stock Units or upon payment
    under any grant of Performance Shares or Performance Units or
    Incentive Awards or (ii) no longer subject to the
    substantial risk of forfeiture and restrictions on transfer
    referred to in Section 6 of this Plan, will be subject to
    further restrictions on transfer.

     
18. Withholding Taxes. To the extent that the
Company is required to withhold federal, state, local or foreign
taxes in connection with any payment made or benefit realized by
a Participant or other person under this Plan, and the amounts
available to the Company for such withholding are insufficient,
it will be a condition to the receipt of such payment or the
realization of such benefit that the Participant or such other
person make arrangements satisfactory to the Company for payment
of the balance of such taxes required to be withheld, which
arrangements (in the discretion of the Board) may include
relinquishment of a portion of such benefit. If a
Participant’s benefit is to be received in the form of
Common Shares, and such Participant fails to make arrangements
for the payment of tax, the Company shall withhold such Common
Shares having a value equal to the amount required to be
withheld. Notwithstanding the foregoing, when a Participant is
required to pay the Company an amount required to be withheld
under applicable income and employment tax laws, the Participant
may elect to satisfy the obligation, in whole or in part, by
electing to have withheld, from the shares required to be
delivered to the Participant, Common Shares having a value equal
to the

 

 

amount required to be withheld (except in the case of Restricted
Stock where an election under Section 83(b) of the Code has
been made), or by delivering to the Company other Common Shares
held by such Participant. The shares used for tax withholding
will be valued at an amount equal to the Market Value per Share
of such Common Shares on the date the benefit is to be included
in Participant’s income. In no event shall the Market Value
per Share of the Common Shares to be withheld and delivered
pursuant to this Section to satisfy applicable withholding taxes
in connection with the benefit exceed the minimum amount of
taxes required to be withheld. Participants shall also make such
arrangements as the Company may require for the payment of any
withholding tax obligation that may arise in connection with the
disposition of Common Shares acquired upon the exercise of
Option Rights.

     
19. Compliance with Section 409A of the Code.

		
	 	     
    (a) To the extent applicable, it is intended that this Plan
    and any grants made hereunder comply with the provisions of
    Section 409A of the Code. This Plan and any grants made
    hereunder shall be administrated in a manner consistent with
    this intent, and any provision that would cause this Plan or any
    grant made hereunder to fail to satisfy Section 409A of the
    Code shall have no force and effect until amended to comply with
    Section 409A of the Code (which amendment may be
    retroactive to the extent permitted by Section 409A of the
    Code and may be made by the Company without the consent of
    Participants). Any reference in this Plan to Section 409A
    of the Code will also include any proposed, temporary or final
    regulations, or any other guidance, promulgated with respect to
    such Section by the U.S. Department of the Treasury or the
    Internal Revenue Service.
	 
	 	     
    (b) In order to determine for purposes of Section 409A
    of the Code whether a Participant is employed by a member of the
    Company’s controlled group of corporations under
    Section 414(b) of the Code (or by a member of a group of
    trades or businesses under common control with the Company under
    Section 414(c) of the Code) and, therefore, whether the
    Common Shares that are or have been purchased by or awarded
    under this Plan to the Participant are shares of “service
    recipient” stock within the meaning of Section 409A of
    the Code:

		
	 	     
    (i) In applying Code Section 1563(a)(1), (2) and
    (3) for purposes of determining the Company’s controlled
    group under Section 414(b) of the Code, the language
    “at least 50 percent” is to be used instead of
    “at least 80 percent” each place it appears in
    Code Section 1563(a)(1), (2) and (3), and
	 
	 	     
    (ii) In applying Treasury Regulation Section
    1.414(c)-2 for purposes of determining trades or businesses
    under common control with the Company for purposes of Section
    414(c) of the Code, the language “at least
    50 percent” is to be used instead of “at least
    80 percent” each place it appears in Treasury
    Regulation Section 1.414(c)-2.

     
20. Amendments.

		
	 	     
    (a) The Board may at any time and from time to time amend
    this Plan in whole or in part; provided, however, that if
    an amendment to this Plan (i) would materially increase the
    benefits accruing to participants under this Plan,
    (ii) would materially increase the number of securities
    which may be issued under this Plan, (iii) would materially
    modify the requirements for participation in this Plan or
    (iv) must otherwise be approved by the shareholders of the
    Company in order to comply with applicable law or the rules of
    the New York Stock Exchange or, if the Common Shares are not
    traded on the New York Stock Exchange, the principal
    national securities exchange upon which the Common Shares are
    traded or quoted, then, such amendment will be subject to
    shareholder approval and will not be effective unless and until
    such approval has been obtained.
	 
	 	     
    (b) The Board will not, without the further approval of the
    shareholders of the Company, authorize the amendment of any
    outstanding Option Right or Appreciation Right to reduce the
    Option Price or the Base Price, as applicable. Furthermore, no
    Option Right or Appreciation Right will be cancelled and
    replaced with awards having a lower Option Price or Base Price
    without further approval of the shareholders of the Company.
    This Section 20(b) is intended to prohibit the repricing of
    Option Rights

 

 

		
	 	
    and Appreciation Rights and will not be construed to prohibit
    the adjustments provided for in Section 13 of this Plan.
	 
	 	     
    (c) If permitted by Section 409A of the Code, in the
    case of involuntary termination of employment or termination of
    employment by reason of death, disability, retirement, closing
    of business or operation units, or elimination of job position,
    or in the case of unforeseeable emergency or other special
    circumstances (including reaching reasonable age and service
    requirements approved by the Board from time to time), of or
    relating to a Participant who holds an Option Right or
    Appreciation Right not immediately exercisable in full, or any
    shares of Restricted Stock as to which the substantial risk of
    forfeiture or the prohibition or restriction on transfer has not
    lapsed, or any Restricted Stock Units as to which the
    Restriction Period has not been completed, or any Performance
    Shares or Performance Units or Incentive Awards which have not
    been fully earned, or any other awards made pursuant to
    Section 10 subject to any vesting schedule or transfer
    restriction, or who holds Common Shares subject to any transfer
    restriction imposed pursuant to Section 17(b) of this Plan,
    the Board may, in its sole discretion, accelerate the time at
    which such Option Right, Appreciation Right or other award may
    be exercised or the time at which such substantial risk of
    forfeiture or prohibition or restriction on transfer will lapse
    or the time when such Restriction Period will end or the time at
    which such Performance Shares or Performance Units or Incentive
    Awards will be deemed to have been fully earned or the time when
    such transfer restriction will terminate or may waive any other
    limitation or requirement under any such award except in the
    case of a Covered Employee where such action would result in the
    loss of the otherwise available exemption of the award under
    Section 162(m) of the Code.
	 
	 	     
    (d) Subject to Section 20(b) hereof, the Board may
    amend the terms of any award theretofore granted under this Plan
    prospectively or retroactively, except in the case of a Covered
    Employee where such action would result in the loss of the
    otherwise available exemption of the award under
    Section 162(m) of the Code. In such case, the Board will
    not make any modification of the Management Objectives or the
    level or levels of achievement with respect to such Covered
    Employee. Subject to Section 13 above, no such amendment
    shall impair the rights of any Participant without his or her
    consent. The Board may, in its discretion, terminate this Plan
    at any time. Termination of this Plan will not affect the rights
    of Participants or their successors under any awards outstanding
    hereunder and not exercised in full on the date of termination.

     
21. Governing Law. The Plan and all grants and
awards and actions taken thereunder shall be governed by and
construed in accordance with the internal substantive laws of
the State of Ohio.

     
22. Effective Date/Termination. This Plan will be
effective as of the Effective Date. No grants will be made on or
after the Effective Date under the Existing Plans, except that
(i) outstanding awards granted under the Existing Plans
will continue unaffected following the Effective Date;
(ii) the provisions relating to the deferral of Director
retainers and fees under the Amended and Restated Nonemployee
Director Stock Plan shall continue to apply to services rendered
through December 31, 2006; and (iii) awards of
performance shares and performance units granted under the 1998
Equity and Performance Incentive Plan (As Amended and Restated
Effective as of June 6, 2005) and outstanding as of the
Effective Date may be converted to restricted stock under such
plan once such performance shares and performance units are
earned. No grant will be made under this Plan more than
10 years after the Effective Date, but all grants made on
or prior to such date will continue in effect thereafter subject
to the terms thereof and of this Plan.

     
23. Miscellaneous Provisions.

		
	 	     
    (a) The Company will not be required to issue any
    fractional Common Shares pursuant to this Plan. The Board may
    provide for the elimination of fractions or for the settlement
    of fractions in cash.
	 
	 	     
    (b) This Plan will not confer upon any Participant any
    right with respect to continuance of employment or other service
    with the Company or any Subsidiary, nor will it interfere in any
    way with any right the Company or any Subsidiary would otherwise
    have to terminate such Participant’s employment or other
    service at any time.

 

 

		
	 	     
    (c) To the extent that any provision of this Plan would
    prevent any Option Right that was intended to qualify as an
    Incentive Stock Option from qualifying as such, that provision
    will be null and void with respect to such Option Right. Such
    provision, however, will remain in effect for other Option
    Rights and there will be no further effect on any provision of
    this Plan.
	 
	 	     
    (d) No award under this Plan may be exercised by the holder
    thereof if such exercise, and the receipt of stock thereunder,
    would be, in the opinion of counsel selected by the Board,
    contrary to law or the regulations of any duly constituted
    authority having jurisdiction over this Plan.
	 
	 	     
    (e) Absence on leave approved by a duly constituted officer
    of the Company or any of its Subsidiaries shall not be
    considered interruption or termination of service of any
    employee for any purposes of this Plan or awards granted
    hereunder, except that no awards may be granted to an employee
    while he or she is absent on leave.
	 
	 	     
    (f) No Participant shall have any rights as a stockholder
    with respect to any shares subject to awards granted to him or
    her under this Plan prior to the date as of which he or she is
    actually recorded as the holder of such shares upon the stock
    records of the Company.
	 
	 	     
    (g) The Board may condition the grant of any award or
    combination of awards authorized under this Plan on the
    surrender or deferral by the Participant of his or her right to
    receive a cash bonus or other compensation otherwise payable by
    the Company or a Subsidiary to the Participant.
	 
	 	     
    (h) Except with respect to Option Rights and Appreciation
    Rights, the Board may permit Participants to elect to defer the
    issuance of Common Shares under the Plan pursuant to such rules,
    procedures or programs as it may establish for purposes of this
    Plan and which are intended to comply with the requirements of
    Section 409A of the Code. The Board also may provide that
    deferred issuances and settlements include the payment or
    crediting of dividend equivalents or interest on the deferral
    amounts.
	 
	 	     
    (i) If any provision of this Plan is or becomes invalid,
    illegal or unenforceable in any jurisdiction, or would
    disqualify this Plan or any award under any law deemed
    applicable by the Board, such provision shall be construed or
    deemed amended or limited in scope to conform to applicable laws
    or, in the discretion of the Board, it shall be stricken and the
    remainder of this Plan shall remain in full force and effect.EX-10.1

 

EXHIBIT 10.1

Big Lots, Inc. Non-Employee Director Compensation Package

Effective August 15, 2006

	 	 	 	 	 
	Annual Retainer

	 	$	45,000	 
	 
	 	 	 	 
	Annual Committee Chair Retainer — Audit Committee

	 	$	10,000	 
	 
	 	 	 	 
	Annual Committee Chair Retainer — Compensation Committee and Nominating/Corporate
Governance Committee

	 	$	5,000	 
	 
	 	 	 	 
	Board Meeting Fee

	 	$	1,500	 
	 
	 	 	 	 
	Committee Meeting Fee

	 	$	1,000	 
	 
	 	 	 	 
	Telephonic Meeting Fee — All Types

	 	$	500	 
	 
	 	 	 	 
	Annual Charitable Donation to Organization Nominated by Director

	 	$	10,000	 
	 
	 	 	 	 
	Big Lots, Inc. Common Shares Underlying Annual Non-Qualified Stock Option Grant1

	 	 	10,000	 

 

			
	1	 	Non-qualified stock options are granted
pursuant to the Big Lots, Inc. Amended and Restated Director Stock Option Plan.

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